News Article | October 27, 2016
Solid financial and operational performance across the company This is a summary of the Nokia Corporation interim report for third quarter 2016 and January-September 2016 published today. The complete interim report for third quarter 2016 and January-September 2016 with tables is available at www.nokia.com/financials. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables. New expiration date announced for Nokia's public buy-out offer for Alcatel-Lucent securities; Squeeze-out expected to occur on November 2, 2016 On October 4, 2016, the French stock market authority (Autorité des marchés financiers, "AMF") announced that a legal action was filed before the Paris Court of Appeal (the "Court") on September 30, 2016 for annulment of the AMF's clearance decision regarding Nokia's public buy-out offer (the "Public Buy-Out Offer"), which would be followed by a squeeze-out (the "Squeeze-Out", together with the Public Buy-Out Offer, the "Offer"), for all remaining securities of Alcatel-Lucent. On October 25, 2016, the AMF announced the continuation of the timetable of the Offer and, accordingly, the Public Buy-Out Offer period will end on October 31, 2016 and the Squeeze-Out will be implemented on November 2, 2016. In connection with the continuation of the timetable, as a precautionary measure, Nokia has agreed to certain commitments that are in force until the decision of the Court, and in the event that the AMF's clearance decision would be nullified or amended by the Court. The legal challenge filed before the Court against the AMF's clearance decision regarding the Offer is still pending and the Court is expected to issue a decision during the first quarter of 2017. Nokia believes that the Offer complies with all applicable laws and regulations and that the legal challenge is without merit. Nokia adjusts planned share repurchase program to EUR 1.0 billion, after using approximately EUR 560 million in cash to acquire Alcatel-Lucent securities in order to reach the 95% squeeze-out threshold On October 29, 2015, Nokia announced a EUR 7 billion Capital Structure Optimization Program, including EUR 1.5 billion of share repurchases. The shareholder distributions were calculated assuming ownership of all outstanding shares of Alcatel-Lucent and conversion of all Nokia and Alcatel-Lucent convertible bonds. Nokia intended to reach the 95% squeeze-out threshold through the initial and subsequent public share exchange offers made in Q4 2015 and Q1 2016 for all outstanding Alcatel-Lucent securities. However, as the 95% threshold was not reached through the exchange offers, Nokia has, in addition to using its shares, used approximately EUR 560 million in cash to acquire Alcatel-Lucent securities in order to reach the 95% threshold. If the Alcatel-Lucent securities that were purchased in cash by Nokia would have instead been exchanged for Nokia shares at the 0.55 exchange ratio for Alcatel-Lucent shares or the 0.704 exchange ratio for the relevant Alcatel-Lucent convertible bonds, approximately 87 million more Nokia shares would have been issued. Ultimately, including the expected cash to be used for the Public Buy-Out Offer and Squeeze-Out of approximately EUR 630 million, Nokia expects to use a total of approximately EUR 1.2 billion in cash to acquire Alcatel-Lucent securities; and instead of having approximately 6 billion Nokia shares outstanding at the end of the transaction, Nokia now expects approximately 5.8 billion outstanding shares. Nokia considers the approximately EUR 560 million in cash that was used to reach the 95% squeeze-out threshold as indirect share repurchases, and thus, part of the planned EUR 1.5 billion share repurchase program. Consequently, under Nokia's Capital Structure Optimization program, Nokia has already completed EUR 560 million of indirect share repurchases and intends to proceed with EUR 1.0 billion of share repurchases, starting after the completion of the squeeze-out and continuing through the end of 2017. Nokia and China Huaxin continue negotiations to create a new joint venture combining Nokia China and Alcatel-Lucent Shanghai Bell Nokia and China Huaxin Post & Telecommunication Economy Development Center ("China Huaxin") are continuing their discussions under the memorandum of understanding, as originally announced on August 28, 2015, to combine Nokia's telecommunications infrastructure businesses in China ("Nokia China") and Alcatel-Lucent Shanghai Bell into a new joint venture. The expected time frame to reach a definitive agreement was within nine months after completion of Nokia's proposed combination with Alcatel-Lucent in January 2016. Due to the complexity of the negotiations, Nokia and China Huaxin have not reached final terms of how the new joint venture would be created. Therefore, Nokia and China Huaxin continue negotiations to create a new joint venture combining Nokia China and Alcatel-Lucent Shanghai Bell, while continuing to operate under the existing interim operating agreement. In addition to information on our reported IFRS results, we provide certain information on a non-IFRS, or underlying business performance, basis. We believe that our non-IFRS results provide meaningful supplemental information to both management and investors regarding Nokia's underlying business performance by excluding the below-described items that may not be indicative of Nokia's business operating results. These non-IFRS financial measures should not be viewed in isolation or as substitutes to the equivalent IFRS measure(s), but should be used in conjunction with the most directly comparable IFRS measure(s) in the reported results. Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. The non-IFRS exclusions are not allocated to the segments, and hence they are reported only at the Nokia consolidated level. The financial discussion included in this interim report of Nokia's results comprises the results of Nokia's businesses - Nokia's Networks business and Nokia Technologies, as well as Group Common and Other. For more information on the changes to our reportable segments, please refer to note 3, "Segment information and eliminations", in the notes to the financial statements attached to this report. In the discussion of Nokia's results in the third quarter 2016 comparisons are given to the third quarter 2015 and second quarter 2016 results on a combined company basis, unless otherwise indicated. This data has been prepared to reflect the financial results of the continuing operations of Nokia as if the new financial reporting structure had been in operation for the full year 2015. Certain accounting policy alignments, adjustments and reclassifications have been necessary, and these are explained in the "Basis of preparation" section of Nokia's stock exchange release published on April 22, 2016. These adjustments also include reallocation of items of costs and expenses based on their nature and changes to the definition of the line items in the combined company accounting policies, which also affect numbers presented in these interim financial statements for 2015. In the discussion of Nokia's reported results for the third quarter 2016 and January-September 2016 comparisons are given to the third quarter 2015 and January-September 2015 Nokia standalone historical results, which have been recast to reflect Nokia's updated segment reporting structure excluding Alcatel-Lucent, unless otherwise indicated. From the beginning of 2016, Nokia's results include those of Alcatel-Lucent on a consolidated basis and accordingly are not directly comparable to Nokia standalone historical results. Nokia delivered solid third quarter results. Nokia Technologies led the way, with a sharp year-on-year increase in net sales, largely driven by revenues related to the Samsung licensing agreement that was announced in Q3. The results also reflect another excellent quarter from Fixed Networks, which improved both net sales and profitability from one year ago. When we announced our second quarter results in August, we said that we expected to see slight sequential improvement in both net sales and operating margin in the third quarter in our Networks business, and we delivered in both of those areas. I was particularly pleased with our operating margin performance in the quarter, which reflects the strong, focused execution across the organization. We were able to deliver these solid results despite market conditions that are softer than expected, particularly in mobile infrastructure. As we look forward, we expect those conditions to stabilize somewhat in 2017, with the primary addressable market in which Nokia competes likely to decline in the low single digits for that year. I believe that Nokia remains well-positioned for this environment. Our disciplined operating model of tight cost controls, prudent investment and focused innovation; our constant industrialization of best practices across the company; our structured approach to fast integration and synergy capture -- all help give us a competitive advantage. In addition, the power of our broad portfolio was evident in the quarter. We have the unique scope necessary to be able to design and deliver end-to-end networks and thus anchor ourselves in the long-term purchasing strategies of our customers. We also have the capability to diversify into new areas where high-performance, end-to-end networks are increasingly required, such as for large Internet and enterprise vertical market companies. We are seeing good growth in these segments, and have plans to target them further as we move forward. While the fourth quarter is expected to be soft from a topline perspective, I believe that we will meet our guidance for our Networks business of significant sequential sales and operating margin increase for Q4 and our full-year operating margin guidance of 7% to 9%. In short, we remain on track in our execution and focused on creating value for our customers and shareholders. Nokia non-IFRS net sales decreased 7% year-on-year and increased 5% sequentially. On a constant currency basis, Nokia non-IFRS net sales would have decreased 6% year-on-year and increased 4% sequentially. Sequentially, Nokia's non-IFRS gross profit, non-IFRS other income and expense and non-IFRS operating profit benefitted from the absence of an adverse effect related to a customer in Latin America undergoing judicial recovery in Q2 2016. Nokia net sales increased 94% year-on-year, compared to Nokia standalone net sales, and increased 5% sequentially. On a constant currency basis, Nokia net sales would have increased 95% year-on-year, compared to Nokia standalone net sales, and 5% sequentially. The year-on-year increase in Nokia net sales in the third quarter 2016, compared to Nokia standalone net sales, was primarily due to growth in Nokia's Networks business and Group Common and Other, both of which primarily related to the acquisition of Alcatel-Lucent, as well as growth in Nokia Technologies. This was partially offset by purchase price allocation adjustment related to the reduced valuation of deferred revenue that existed on Alcatel-Lucent's balance sheet at the time of the acquisition. The sequential increase in Nokia net sales in the third quarter 2016 was primarily due to growth in Nokia Technologies and Nokia's Networks business, the positive impact related to the purchase price allocation adjustment associated with the reduced valuation of deferred revenue that existed on Alcatel-Lucent's balance sheet at the time of the acquisition and growth in Group Common and Other. The year-on-year decrease in Nokia operating profit, compared to Nokia standalone operating profit, was primarily due to higher research and development ("R&D") expenses and higher selling, general and administrative ("SG&A") expenses, partially offset by higher gross profit, all of which related primarily to the acquisition of Alcatel-Lucent. The increase in gross profit was primarily due to Nokia's Networks business and, to a lesser extent, Nokia Technologies and Group Common and Other, partially offset by non-IFRS exclusions related to deferred revenue. The increase in R&D expenses was primarily due to Nokia's Networks business, non-IFRS exclusions related to amortization of intangible assets and, to a lesser extent, Group Common and Other and Nokia Technologies. The increase in SG&A expenses was primarily due to Nokia's Networks business, non-IFRS exclusions related to amortization of intangible assets, as well as transaction and integration related costs and, to a lesser extent, Group Common and Other and Nokia Technologies. Nokia's other income and expenses was an expense of EUR 39 million in the third quarter 2016, compared to an expense of EUR 80 million in the year-ago period. The net positive fluctuation was primarily related to non-IFRS exclusions attributable to lower restructuring and associated charges, partially offset by the absence of realized gains related to certain of Nokia's investments made through its venture funds. Nokia operating profit increased primarily due to lower restructuring and associated charges and higher gross profit. Sequentially, Nokia's gross profit benefitted from the absence of an adverse effect related to a customer in Latin America undergoing judicial recovery in Q2 2016. The increase in gross profit was primarily due to Nokia Technologies. Nokia's other income and expenses was an expense of EUR 39 million in the third quarter 2016, compared to an expense of EUR 643 million in the second quarter 2016. The decrease was primarily due to lower restructuring and associated charges. Sequentially, Nokia's other income and expense benefitted from the absence of an adverse effect related to a customer in Latin America undergoing judicial recovery in Q2 2016. Non-IFRS exclusions consist of costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. For additional details, please refer to note 2, "Non-IFRS to reported reconciliation, Continuing Operations", in the notes to the financial statements attached to this report. In the third quarter 2016, non-IFRS exclusions in net sales amounted to EUR 60 million, and related to purchase price allocation adjustment related to the reduced valuation of deferred revenue that existed on Alcatel-Lucent's balance sheet at the time of the acquisition. In the third quarter 2016, non-IFRS exclusions in operating profit amounted to EUR 501 million, and were attributable to non-IFRS exclusions that negatively affected gross profit, R&D, SG&A and other income and expenses as follows: In the third quarter 2016, non-IFRS exclusions in gross profit amounted to EUR 149 million, and primarily due to product portfolio integration costs related to the acquisition of Alcatel-Lucent, and the deferred revenue. In the third quarter 2016, non-IFRS exclusions in R&D expenses amounted to EUR 179 million, and primarily related to the amortization of intangible assets resulting from the acquisition of Alcatel-Lucent and, to a lesser extent, product portfolio integration costs related to the acquisition of Alcatel-Lucent. In the third quarter 2016, non-IFRS exclusions in SG&A expenses amounted to EUR 145 million, and primarily related to the amortization of intangible assets resulting from the acquisition of Alcatel-Lucent, as well as integration and transaction related costs. In the third quarter 2016, non-IFRS exclusions in other income and expenses amounted to EUR 29 million, and primarily related to EUR 34 million of restructuring and associated charges for Nokia's cost reduction and efficiency improvement initiatives. The following table summarizes the financial information related to our cost savings program, as of the end of the third quarter 2016. Balances related to previous Nokia and Alcatel-Lucent restructuring and cost savings programs have been included as part of this overall cost savings program. It should be noted that Nokia and its businesses are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements, including, without limitation, those regarding: A) our ability to integrate Alcatel Lucent into our operations and achieve the targeted business plans and benefits, including targeted synergies in relation to the acquisition of Alcatel Lucent announced on April 15, 2015 and closed in early 2016; B) our ability to squeeze out the remaining Alcatel Lucent shareholders in a timely manner or at all to achieve full ownership of Alcatel Lucent; C) expectations, plans or benefits related to our strategies and growth management; D) expectations, plans or benefits related to future performance of our businesses; E) expectations, plans or benefits related to changes in our management and other leadership, operational structure and operating model, including the expected characteristics, business, organizational structure, management and operations following the acquisition of Alcatel Lucent; F) expectations regarding market developments, general economic conditions and structural changes; G) expectations and targets regarding financial performance, results, operating expenses, taxes, currency exchange rates, hedging, cost savings and competitiveness, as well as results of operations including targeted synergies and those related to market share, prices, net sales, income and margins; H) timing of the deliveries of our products and services; I) expectations and targets regarding collaboration and partnering arrangements, joint-ventures or the creation of joint-ventures, as well as our expected customer reach; J) outcome of pending and threatened litigation, arbitration, disputes, regulatory proceedings or investigations by authorities, including the implications of the legal action brought against the French stock market authority's (Autorité des marchés financiers) clearance decision on Nokia's proposed public buy-out offer followed by a squeeze-out; K) expectations regarding restructurings, investments, uses of proceeds from transactions, acquisitions and divestments and our ability to achieve the financial and operational targets set in connection with any such restructurings, investments, divestments and acquisitions; and L) statements preceded by or including "believe," "expect," "anticipate," "foresee," "sees," "target," "estimate," "designed," "aim," "plans," "intends," "focus," "continue," "project," "should," "will" or similar expressions. These statements are based on the management's best assumptions and beliefs in light of the information currently available to it. Because they involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors, including risks and uncertainties, that could cause such differences include, but are not limited to: 1) our ability to execute our strategy, sustain or improve the operational and financial performance of our business or correctly identify or successfully pursue business opportunities or growth; 2) our ability to achieve the anticipated business and operational benefits and synergies from the Alcatel Lucent transaction, including our ability to integrate Alcatel Lucent into our operations and within the timeframe targeted, and our ability to implement our organization and operational structure efficiently; 3) our ability to complete the purchases of the remaining outstanding Alcatel Lucent securities and realize the benefits of the public exchange offer for all outstanding Alcatel Lucent securities, and the outcome of the decision by the French Court of Appeal in relation to the clearance decision of Nokia's proposed public buy-out offer and squeeze-out; 4) our dependence on general economic and market conditions and other developments in the economies where we operate; 5) our dependence on the development of the industries in which we operate, including the cyclicality and variability of the telecommunications industry; 6) our exposure to regulatory, political or other developments in various countries or regions, including emerging markets and the associated risks in relation to tax matters and exchange controls, among others; 7) our ability to effectively and profitably compete and invest in new competitive high-quality products, services, upgrades and technologies and bring them to market in a timely manner; 8) our dependence on a limited number of customers and large multi-year agreements; 9) Nokia Technologies' ability to maintain and establish new sources of patent licensing income and IPR-related revenues, particularly in the smartphone market; 10) our dependence on IPR technologies, including those that we have developed and those that are licensed to us, and the risk of associated IPR-related legal claims, licensing costs and restrictions on use; 11) our exposure to direct and indirect regulation, including economic or trade policies, and the reliability of our governance, internal controls and compliance processes to prevent regulatory penalties; 12) our reliance on third-party solutions for data storage and the distribution of products and services, which expose us to risks relating to security, regulation and cybersecurity breaches; 13) Nokia Technologies' ability to generate net sales and profitability through licensing of the Nokia brand, the development and sales of products and services, as well as other business ventures which may not materialize as planned; 14) our exposure to legislative frameworks and jurisdictions that regulate fraud, economic trade sanctions and policies, and Alcatel Lucent's previous and current involvement in anti-corruption allegations; 15) the potential complex tax issues, tax disputes and tax obligations we may face in various jurisdictions, including the risk of obligations to pay additional taxes; 16) our actual or anticipated performance, among other factors, which could reduce our ability to utilize deferred tax assets; 17) our ability to retain, motivate, develop and recruit appropriately skilled employees; 18) our ability to manage our manufacturing, service creation, delivery, logistics and supply chain processes, and the risk related to our geographically concentrated production sites; 19) the impact of unfavorable outcome of litigation, arbitration, agreement-related disputes or allegations of product liability associated with our businesses; 20) exchange rate fluctuations, as well as hedging activities; 21) inefficiencies, breaches, malfunctions or disruptions of information technology systems; 22) our ability to optimize our capital structure as planned and re-establish our investment grade credit rating or otherwise improve our credit ratings; 23) uncertainty related to the amount of dividends and equity return we are able to distribute to shareholders for each financial period; 24) our ability to achieve targeted benefits from or successfully implement planned transactions, as well as the liabilities related thereto; 25) our involvement in joint ventures and jointly-managed companies or failures to create planned joint ventures; 26) performance failures by our partners or failure to agree to partnering arrangements with third parties; 27) our ability to manage and improve our financial and operating performance, cost savings, competitiveness and synergy benefits after the acquisition of Alcatel Lucent; 28) adverse developments with respect to customer financing or extended payment terms we provide to customers; 29) the carrying amount of our goodwill may not be recoverable; 30) risks related to undersea infrastructure; 31) unexpected liabilities with respect to pension plans, insurance matters and employees; and 32) unexpected liabilities or issues with respect to the acquisition of Alcatel Lucent, including pension, postretirement, health and life insurance and other employee liabilities or higher than expected transaction costs as well as the risk factors specified on pages 69 to 87 of our annual report on Form 20-F filed on April 1, 2016 under "Operating and financial review and prospects-Risk factors", as well as in Nokia's other filings with the U.S. Securities and Exchange Commission. Other unknown or unpredictable factors or underlying assumptions subsequently proven to be incorrect could cause actual results to differ materially from those in the forward-looking statements. We do not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required. The financial statements were authorized for issue by management on October 26, 2016.
Simultaneous determination of four fluorescent whitening agents (including trans and cis isomers) in facial mask by dispersive solid-phase extraction combined with ultra high performance liquid chromatography and diode array detection
Liao H.,China Huaxin
Journal of Separation Science | Year: 2016
A novel ultra high performance liquid chromatography with diode array detection method, based on the dispersive solid-phase extraction by using polymer weak anion exchange as the sorbent, was established for the simultaneous determination of fluorescent whitening agents 85, 28, 351, and 71 in facial mask. The amounts of polymer weak anion exchange, adsorption time, and volume of elution solvent in the dispersive solid-phase extraction technology were optimized, and the developed method was validated in terms of the method limit of detection, method limit of quantitation, linear range, recovery, accuracy, and precision. Results indicated that the standard curves were linear over the selected concentration ranges of 0.05-100 mg/L for four target analytes, with determination coefficients greater than 0.999. The method limits of quantitation of the target analytes were in the range of 0.6-2.8 mg/kg. Recoveries were calculated at the concentrations of 1.0-30 mg/kg spiked in negative samples and the values were between 89.3 and 102% with an RSD of 2.5-5.1% for intraday precision and 3.8-5.0% for interday precision. The method was successfully applied to analyze 20 facial mask samples and fluorescent whitening agent 85 was detected in one sample with the concentration of 4.7 mg/kg. © 2016 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim.
News Article | March 17, 2015
The desktop phone may seem like a dinosaur in this mobile-first era, but with a 7-inch touch screen and an integrated camera on its latest model, Alcatel-Lucent Enterprise begs to differ. The 8088 Smart Deskphone, launched Monday, has been developed to feel at home in a world where users are becoming accustomed to touch-centric products and relying more on smartphones for communicating. From the screen on the 8088, users can search for contacts, set alarms and access voice mail. There are APIs available for customization. The phone's features can at the same time be controlled from a smartphone, tablet or laptop. The user can also start a call on a deskphone and then transfer it to a smartphone or vice versa. The integrated 5-megapixel camera is meant to be used, among other things, for video conferencing. To build on that, the 8088 also has an HDMI output for screen replication on a bigger display for room-based video collaboration. The phone will start shipping in April. Pricing wasn't immediately available. Alcatel-Lucent Enterprise in its current form was born last year when Alcatel-Lucent sold the business to China Huaxin, as part of a reorganization to turn its fortunes around. The phone, along with an upgraded version of OpenTouch Suite, was launched at the Cebit trade show in Germany and at Enterprise Connect conference in Orlando, both taking place this week.
News Article | November 25, 2014
The company, which recently was spun out of parent Alcatel-Lucent, is unveiling its enhanced OpenTouch Suite for SMB communications solution. Alcatel-Lucent Enterprise is looking to give smaller companies the same type of communication capabilities as their larger brethren. The company—which recently was spun out of parent company Alcatel-Lucent—is rolling out its enhanced OpenTouch Suite for SMB, a lineup of communications solutions that is designed to give small and midsize businesses the tools they need to reap the benefits of enhanced communications while making those tools simpler and more affordable. Smaller companies see the same advantages in unified communications (UC) as larger businesses do, from better business outcomes and employee productivity to greater mobility and cost savings, according to Alcatel-Lucent Enterprise officials. They just don't have the same size budgets or IT staffs that bigger companies have. "SMBs want the same opportunities as mid- and large-sized companies to run their business efficiently," Eric Penisson, general manager of Alcatel-Lucent Enterprise's communications business, said in a statement. "With new features to collaborate, be more mobile, offer more apps and maximize performance, Alcatel-Lucent OmniPCX Office RCE [the foundation of the new OpenTouch Suite for SMB] makes SMBs feel like they can generate the same opportunities as a large company."The enhanced suite offers such capabilities as a simplified Session Initiation Protocol (SIP) solution and bring-your-own-device (BYOD) policies, an improved cloud strategy and expanded mobile device support, according to company officials.Alcatel-Lucent Enterprise is pitching the offering as a way for both SMBs and their channel partners to create UC solutions that will work for the businesses. Adoption of UC technologies is expected to grow over the next few years. A recent report from analyst firm Transparency Market Research found that the global unified communications market will increase to $61.9 billion by 2018, while another report from ReportsnReports indicated that the worldwide UC market will grow more than 14 percent annually between now and 2019. Transparency Market Research analysts pointed to such trends as BYOD, an increasingly mobile workforce, growing popularity of video-based communications and more mobile device penetration into virtualization as helping to drive interest in UC. A broad array of collaboration technology vendors are looking to tap into the growing interest in UC, including among smaller businesses. Most recently, Cisco Systems this month unveiled its Business Edition 6000S , which officials described as a complete collaboration solution integrated into a 2921 Integrated Services Router (ISR). The offering is aimed at midmarket companies with up to 1,000 employees, with each BE6000S platform offering a range of services—from voice and video to instant messaging and presence—to 25 to 150 users. Such companies are looking for enterprise-level collaboration solutions that are easy to use and affordable, Chris Wiborg, director of collaboration portfolio marketing at Cisco, told eWEEK. "They don't want an enterprise solution that's been dumbed down," Wiborg told eWEEK. That is the push Alcatel-Lucent Enterprise is making with its OpenTouch Suite for SMB. The solution includes the OmniPCX Office RCE Release 10 communications server, an all-in-one converged solution for voice and data that is easy to deploy and use, officials said. With the new PowerCPU Extended Edition, there is no longer a need for a hard disk, which increases the reliability of the solution. SIP deployment and public trunking become easier and less costly, and customers no longer need a session border controller. The OpenTouch Conversation mobility offering supports Apple's iOS and Google's Android 4.4 mobile operating systems, and includes new interfaces. In addition, the OpenTouch Conversation and MY IC Web for Office Internet-based application offer customers the ability to track conversation and call histories. Alcatel-Lucent Enterprise also is including OpenTouch Office Cloud for cloud-based communications, enabling customers to pay only for what they need regarding IP trunks and licenses, officials said. Alcatel-Lucent sold the bulk of its enterprise business in October to Chinese investment company China Huaxin for $255 million. China Huaxin holds 85 percent of the business, while Alcatel-Lucent retains the other 15 percent. At the time of the sale, Alcatel-Lucent Enterprise CEO Michel Emelianoff said the new company will double the size of the business within five years and transform it from one that sells products to one that deals in "business outcomes." He also wants the company to become the world's largest enterprise communications vendor.
News Article | February 6, 2014
Alcatel-Lucent has revealed that it is in discussions with technology investment company China Huaxin to sell off its enterprise phone business. The French telecoms equipment maker included the news in its end-of-year financial results, where the company recorded encouraging results following losses last year. China Huaxin’s offer for the acquisition of 75 percent of Alcatel-Lucent Enterprise valued the business at €268 million (£222 million). Under the terms of the deal, Alcatel-Lucent would retain a 15 percent minority interest in the business, but all contracts and employees would transfer to the Chinese company. The two companies are already partners in a joint venture in the Chinese market, targeting the sale of communications products and services to corporations in the country. Alcatel said it expects to sign the deal by the second quarter of this year, and is aiming to close it by the third quarter pending regulatory approval. The sale is part of a longer-term strategy by Alcatel’s new chief executive Michel Combes, who took over in April 2013 and pledged to deliver €1 billion in asset sales by 2015 as part of his ‘Shift Plan 2015’. The sale follows the news in December that Alcatel would be selling its US satellite-communications subsidiary LGS Innovations to an investor group led by US-based Madison Dearborn Partners for a reported $200 million. In its end of year results, Alcatel revealed it had recorded fourth-quarter revenues of €3.93 billion euros (£3.26 billion). This was lower than analyst expectations; however the company also recorded an operating profit of €307 million (£255 million) and a gross margin of 34 percent, both of which were better than expected. However, the company suffered from a major writedown on its mobile business and restructuring costs from layoffs, after announcing last October that it planned to cut 10,000 jobs worldwide over the next two years in order to save money. It also consumed more cash than it generated for the second year in a row, recording negative free cash flow of €636 million (£527 million). This meant that the company still recorded a net loss for the year, although 2013’s loss of €1.3 billion (£1.07 billion) was significantly down from the €2 billion (£1.66 billion) loss in 2012. The reduction shows that the company had benefitted from major cost-cutting and a more focused products offerings, and is on track to fulfil the goals of its Shift Plan 2015, which focuses on continued cost reductions, cash generation, and profitable growth. At the recent CES event, Alcatel had signalled that its consumer device division would be a major part of its efforts for 2014, revealing a new 5.5 inch smartphone and two tablet devices (pictured above), which were heralded by a company spokesman as, “a great first step in our product alignment for smartphones and tablets”. Do you know all about 4G ? Take our quiz.
News Article | October 1, 2014
Alcatel-Lucent has closed the sale of its IP telephony and Ethernet switching equipment activities to China Huaxin. The spun off company will struggle to compete with the likes of Microsoft and Cisco Systems, and will have to make acquisitions of its own to grow. Both product segments are highly competitive and going through big changes thanks to the growing popularity of smartphones and technologies such as software-defined networking and cloud-based communication services. Alcatel-Lucent first announced the sale of its Enterprise subsidiary in February, when said it had received a binding offer from Huaxin, an industrial investment company that focuses on information and communications technologies. Alcatel-Lucent Enterprise CEO Michel Emelianoff has high hopes for the company's OpenTouch platform. It includes Conversation, which lets users start a call on a deskphone and then transfer it to a laptop, smartphone or tablets. Alcatel-Lucent is ahead of the competition in the implementation of software-defined networking, Emelianoff said during a conference call. Alcatel-Lucent Enterprise will have its headquarters in Colombes near Paris, with about 2,700 employees worldwide. Gartner analyst Steve Blood , who specializes in unified communications, is cautiously optimistic about Alcatel-Lucent Enterprise's future. The optimism stems from Huaxin's seeming willingness to invest, but success won't come easily for the company in any segment. "There is nothing wrong with the products, but it's just a very competitive market and companies have tons on other options," Blood said. Growth largely has to come from acquisitions, he added. Huaxin is ready to make the investments needed for acquisitions, according to Emelianoff. Huaxin isn't the only Chinese company that wants a piece of the enterprise IT and communications market. Huawei and ZTE are aggressively pushing to get a foothold with large portfolios. Also, earlier this week Lenovo announced its acquisition of IBM's server business is headed towards closing. This expansion is good for competition, according to Blood. Challenges for the vendors are getting the culture right and overcoming preconceived notions about Chinese vendors. The former is something Huawei has struggled with, for example. "They are all going to struggle in North America because of the anti-Chinese sentiment in the region ... But Europe is a good opportunity because there isn't the same concern," Blood said. The sale of Alcatel-Lucent Enterprise is part of Alcatel-Lucent's Shift Plan, launched in June last year, to refocus the company on IP and broadband access. Alcatel-Lucent will retain a 15 percent minority stake in Alcatel-Lucent Enterprise and is getting €202 million (US$254 million) in cash. Historically carrier vendors have struggled to find success in the enterprise sector, so Alcatel-Lucent holding on to the unit never made any sense, according to Blood. "Getting rid of the unit was absolutely the right thing to do and it should have done it years ago," he said.
News Article | February 7, 2014
Tech sector earnings this week stirred concerns about growth for social media companies LinkedIn and Twitter but highlighted positive trends for some networking and cloud services companies. Meanwhile, weak economic growth in emerging markets caused IDC to lower its forecast for global IT spending this year. Professional social network LinkedIn said Thursday that revenue for the fourth quarter was US$447.2 million, an increase of 47 percent year over year. Increased demand for Talent Solutions, a premium-fee recruitment package, helped boost sales. However net income, dragged down by stock-based compensation expenses, was $3.8 million, a drop of 67 percent year over year. The company said revenue for the year is likely to total $2.05 billion, less than the $2.16 billion average analyst estimate, according to Thomson Reuters. First-quarter sales forecasts for $455 million to $460 million came up short of analyst expectations by as much as $10 million. LinkedIn shares were trading at $209.45 Friday afternoon, down by $14.05. Microblogging site Twitter reported its first earnings statement as a public company on Wednesday, and while sales jumped year over year, the announcement sparked worries about slowing user growth. The company said revenue for the quarter ending Dec. 31 was $243 million, up 116 percent year over year. Its loss, however, amounted to $511 million, far greater than its loss of $8.71 million a year earlier. Twitter added 9 million users, or 3.8 percent more, to the service in the last three months of 2013, which was below what analysts were hoping for. "Twitter may be finding it more difficult to capture a more mainstream audience," according to a Morgan Stanley research note. "Q4 results show signs of slowing user growth and engagement -- potential risks include large internet competitors adding similar functionality to their existing platforms, similar services popular outside the US and Europe gaining traction in developed markets, or users spending less time on Twitter." Even though the company showed its ad business is doing well, investors are obviously concerned. Twitter shares plunged Thursday to $50.03, down by $15.94. They recovered somewhat Friday afternoon, trading at $53.96, still significantly lower for the week. News from the networking and cloud-platform sector was positive this week. Akamai announced fourth-quarter revenue of $436 million, up 15 percent year over year, and net income of $80 million, up 18 percent. Akamai provides cloud services for delivering and optimizing online content and applications, centering around its Intelligent Platform. "Driven by strong traffic growth in social media, gaming, online video and software download and robust demand in e-commerce over the holiday season, Akamai reported another strong quarter," according to a research note from analysts Greg Miller and Eric Chu at Canaccord Genuity. Akamai shares closed at $57.18 Thursday, jumping up by almost $10. Shares lost some momentum Friday afternoon, trading at $56.59, but were nevertheless up significantly for the week. For Alcatel-Lucent, wireless access, including LTE networks, was the star product category in the fourth quarter. Sales related to fixed access and IP transport products also boosted revenue. The financially struggling company had good news Thursday, reporting a net profit of €134 million (US$182 million), compared to a €1.56 billion loss for the year-earlier period. Sales were €3.93 billion, down 0.1 percent year on year. Though the company still has to show that it can increase revenue, the profit is a good way to start showing that CEO Michel Combes' Shift plan to turn the company around is having an effect. Combes took the helm of the financially beleaguered company about a year ago. The Shift plan, announced last June, calls for the company to get rid of US$1 billion in assets and become profitable by next year. The company announced this week that it has received an offer from China Huaxin for its enterprise unit, which makes IP telephony and Ethernet switching equipment. The offer values the unit at €268 million. Alcatel-Lucent will keep a 15 percent stake in the business. Company shares are traded in Europe and are not included in the U.S. indexes, but its success in LTE and IP products bodes well for those sectors. Though IT sector earnings reports have been fairly strong over the past few weeks, tech company shares have had a bumpy ride, reflecting overall market volatility. Shares on U.S. exchanges have trended down so far this year. Though major exchanges ended Friday up for the day overall, tech company shares on the Nasdaq are still down by about 2.5 percent for the year. Weak economic growth in emerging markets has been a main concern. This week, IDC said the tech market would also be hit by weakness in emerging markets. "IT spending will be inhibited by the economic slowdown in emerging markets in 2014," IDC said in a statement. "An inevitable deceleration in the growth of smartphones and tablets" would also have an impact on overall spending, IDC said. IDC lowered its forecasts for IT market growth in Asia/Pacific, Central and Eastern Europe (CEE), and the Middle East and Africa (MEA), which in turn brought down its forecast for worldwide IT spending growth to 4.6 percent this year in constant currency terms, from the previous forecast of 5 percent.
News Article | May 21, 2015
Hewlett-Packard Co. sold a majority stake in its Chinese server, storage and technology assets for $2.3 billion to Tsinghua University, becoming the first major U.S. technology company to pass control to local owners since the government stepped up restrictions on foreign firms. A group owned by the Chinese university, Tsinghua Holdings, will purchase the 51 percent stake in a new business called H3C. The deal values the businesses at $4.5 billion net of cash and debt, the companies said Thursday in a statement. China has been encouraging the use of local suppliers and aims to purge most foreign technology from the country’s banks, military and government enterprises by 2020, people with knowledge of the matter said in December. By selling control of the businesses to Chinese investors, Hewlett-Packard seeks to win sales to state-owned companies. The Palo Alto, California-based company will maintain full ownership of its China-based enterprise services, software, HP Helion Cloud, Aruba Networks, printing and personal-systems businesses. Hewlett-Packard’s networking units had “a rougher than anticipated” quarter, Chief Executive Officer Meg Whitman told analysts in late February, noting that they struggled in China especially. Networking sales in the three months ended January 31 fell 11 percent from a year earlier. Under the deal, H3C will become a subsidiary of Unisplendour, a publicly traded unit of Tsinghua Holdings. Unisplendour, a software vendors and system integrator, has been in a long-term strategic distribution partnership with Hewlett-Packard since 1999. The new H3C generated adjusted revenue of $3.1 billion and adjusted operating profit of $400 million last year, according to the companies’ statement. Hewlett-Packard shares rose 2.3 percent to close at $33.83, leaving the stock down 16 percent this year. Bloomberg News reported in March that Tsinghua, ICBC International Ltd.’s direct-investment arm RT Capital and state-owned China Huaxin Post & Telecommunication Economy Development Center were on a short list of bidders for the Hewlett-Packard units.
News Article | August 28, 2015
Ahead of China's regulators making a decision on Nokia's merger with Alcatel-Lucent, the Finnish company has agreed to a joint venture with Chinese investment firm China Huaxin. Under a memorandum of understanding between the pair, Nokia will hold 50 percent plus one share of a joint venture that combines Nokia's infrastructure businesses in China and Alcatel-Lucent Shanghai Bell. Nokia and Huaxin intend to use the proposed joint venture to speed up regulatory approval in China. "With this MoU now in place, we will also work closely with our new partners to make the case for swift approval of the proposed combination between Nokia and Alcatel-Lucent by the appropriate Chinese authorities," said Nokia chief and president Rajeev Suri. Europe, the US and several other national regulators have already approved the proposed €15.6bn merger, leaving China as one of the main hurdles to the union. Once the deal is finalised, the merged companies will become the world's second largest network equipment vendor behind Sweden's Ericsson and ahead of China's Huawei. The joint venture with China Huaxin -- or Huaxin Post & Telecommunication Economy Development Center -- is conditional on Nokia closing its merger with Alcatel, said Nokia. China Huaxin last year acquired Alcatel-Lucent's enterprise business for €202m, though Alcatel retained a small stake in the firm. "Today's agreement demonstrates Nokia's deep commitment to China. Together with China Huaxin, Nokia will be in an excellent position to support strategic initiatives of the Chinese government such as "Internet Plus" and provide a strong link between Europe and China," said Suri.
News Article | September 1, 2015
The $16.6 billion deal is moving forward, but French politicians are criticizing the bonuses being paid to outgoing Alcatel-Lucent CEO Combes. Nokia's Networks' $16.6 billion takeover of Alcatel-Lucent is pushing forward, though not without a bit of controversy. The deal, designed to take two networking vendors that are in transition and create a formidable company that can compete with the likes of Ericsson, Cisco Systems and Huawei Technologies, already has received approval from regulators in the United States and Europe , among other places. Now, in an effort to curry the favor of Chinese officials, Nokia officials have entered into a joint venture with Chinese investment firm China Huaxin to create what will be called Nokia Shanghai Bell. Nokia will hold a 50 percent-plus-one share of the joint venture, which will bring together Nokia's telecommunications infrastructure business in China with Alcatel-Lucent Shanghai Bell, an existing joint venture between Alcatel-Lucent and China Huaxin. According to a memorandum of understanding (MoU) between Nokia and China Huaxin, the new joint venture will be a boon for both the Chinese telco market and both companies. It also puts the Finland-based Nokia in a strong position to support initiatives under way by the Chinese government—called "Internet Plus"—to drive economic growth by integrating Internet technologies with manufacturing and business efforts, and to help establish stronger links between China and Europe, according to President and CEO Rajeev Suri.In addition, Suri expects it will ease the approval process for Nokia's acquisition of Alcatel-Lucent."With this MoU now in place, we will also work closely with our new partners to make the case for swift approval of the proposed combination between Nokia and Alcatel-Lucent by the appropriate Chinese authorities," he said in a statement. The acquisition, announced earlier this year after more than two years of on-again, off-again negotiations, will create the world's second-largest network equipment vendor, behind Ericsson. In 2014, the companies combined generated $27.5 billion in sales and $2.45 billion in profits, more than $5 billion in R&D (including money for Alcatel-Lucent's and Nokia's FutureWorks program) and net cash of almost $7.9 billion. Both vendors have had their share of changes over the past few years, with Nokia ending its networking partnership with Siemens and Alcatel-Lucent going through another of several restructurings since the merger of Alcatel and Lucent in 2006, this one called the Shift Plan. Since the deal was announced, it was understood that Suri will assume the CEO position of the merged company, with Alcatel-Lucent CEO Michel Combes exiting the business. In August, it was learned that Combes, who engineered the Shift Plan in hopes of streamlining the business and reducing costs, will become chairman of French telco Numericable-SFR and chief operating officer at Altice, an investment arm of billionaire Patrick Drahi and the controlling organization of Numericable-SFR. However, as part of the buyout, Combes will receive $15.7 million over three years, a figure that reportedly has drawn the ire of both the French government and workers unions. Combes reportedly has refused to give up the bonuses , which he said were not tied to the Nokia deal but instead were paid to him because of how well he did his job as Alcatel-Lucent's top executive. Combes, who leaves Alcatel-Lucent for his new jobs Sept. 1, told French news organizations that under his watch, Alcatel-Lucent was able to avoid bankruptcy and its share price increased. However, French politicians and union leaders noted the high unemployment in France—hovering around 10 percent—and stagnant economy; they said that Combes' bonuses look particularly poor given that backdrop. In addition, his Shift Plan, while reviving Alcatel-Lucent's fortunes, also led to job losses for about 10,000 employees. "In today's world and with the problems people face one needs to have a bit of common sense, proportion and restraint," French Finance Minister Michel Sapin reportedly said on France Info radio Aug. 31. "And in this case Michel Combes hasn't. [He must] try to understand how this looks to others, to the French, and from there take good decisions. He still has time to do so." Herve Lassale, an official with CFDT, the largest union at Alcatel-Lucent, told French journalists that "employees who saw the amounts announced at the weekend were no doubt sick. They are indecent considering the social problems of recent years." Editor's note: This story has been changed to note that Nokia is based in Finland.