Successful Completion of The Shift Plan
Group generates Euro 660 million of free cash flow in 2015
Paris, France, February 11, 2016
The Shift Plan
- Free cash flow of Euro 660 million in 2015, exceeding the Shift Plan target of being free cash flow positive in 2015
- Cumulative fixed cost savings over the Shift Plan horizon of Euro 1,031 million, surpassing the objective of Euro 950 million
- Core Networking revenues totaling Euro 6,780 million with adjusted operating margin of 10.0% in 2015 as a whole, consistent with the revised objectives
- Access operating cash flow at Euro 627 million for 2015, exceeding the Shift Plan target of Euro 200 million
- Debt reduction exceeding the Shift Plan target of Euro 2 billion, evidenced by net cash position of Euro 1,409 million compared to a net debt position of Euro (794) million at the end of Q2 2013
- Share of next-generation technologies growing to 77% of revenues in 2015, from around half of revenues in 2012
- Gross margin reaching 36.0% in 2015, an improvement of nearly 7 percentage points compared to 2012
- Adjusted Operating margin reaching 7.2% in 2015, an improvement of 9 percentage points compared to 2012
- Group revenues, excluding Managed Services and at constant perimeter, increasing 15% year-on-year and 6% at constant exchange rates
- Strong growth in next-generation technologies revenues, up 36% year-on-year and 26% at constant exchange rates, and now representing 79% of revenues compared to 67% in the year-ago quarter.
- Record profitability with gross margin expanding 470 bps to 39.4%, reflecting a high level of activity at the end of the year, composed notably of significant software sales.
- Adjusted operating profit almost doubling year-over-year to Euro 560 million; adjusted operating margin reaching 13.5%, up 580 bps, reflecting the improvement in gross margin and relatively lower operating expenses.
- Reported Group share of net income amounting Euro 589 million for the quarter, leading to a full year level of Euro 257 million, the first full year profit since 2011. Excluding Nokia transaction related costs, Group share of net income reaching Euro 659 million for the fourth quarter and Euro 361 million for 2015 as a whole.
- Free cash flow of Euro 1,020 million, the highest level ever recorded in any quarter since the Alcatel-Lucent merger.
Key numbers for the fourth quarter and full year 2015 (unaudited)