Alcatel-Lucent today announced its fourth quarter 2013 results, reporting revenues of Euro 3,930 million, flat year-on-year at constant exchange rate. Revenues for the Core Networking and Access segments were up 0.4% year-on-year at constant exchange rates.
Sequentially, at constant exchange rates, Group revenues increased by 8.8% and by 8.9% for Core Networking and Access segments, reflecting notably a strong performance in IP Platforms, IP Transport and Wireless.
From a geographic standpoint, at constant exchange rates, North America grew 2% year-on-year, moderating its pace compared to previous quarters, while Asia Pacific moved into positive territory by rising 10% year-over-year, driven by network roll-outs in China. Encouraging trends continued in Western Europe while Russia returned to growth. The Rest of World area witnessed a decline in the mid-teens.
For 2013 as a whole, the Group recorded revenue growth of 2.9% at constant exchange rates; revenues for Core Networking and Access segments were up 3.6% during the year. The full-year performance reflects solid trends, supported by double-digit growth in IP Routing, progress in WDM and IP Platforms, as well as good traction in mobile and fixed ultra-broadband access activities, both driven by large networks rollouts. This is further evidenced by market share gains.
Gross margin reached 34.3% of revenues in the last quarter, up nearly 400 basis points year on year and 170 basis points sequentially. Year-on-year improvement reflects favorable product mix, operational improvements and reduced fixed operations costs. Sequential improvement mainly reflects reduced operations costs. Full-year gross margin was 32.2%, improving by 220 basis points over the preceding year.
The Group realized fixed costs savings of Euro 104 million in Q4, bringing total fixed costs savings to Euro 363 million for the year, substantially above the Euro 250-300 million set earlier in the year. The Group was able to reduce its ratio of SG&A expenses to revenues by 120 basis points to 12.1% in Q4 and by 160 basis points to 14.1% for the year as a whole.
Adjusted operating income reached Euro 307 million in the quarter, or 7.8% of revenues, compared to Euro 115 million in Q4 2012, or 2.8% of revenues, reflecting a significant improvement in profitability of both Core Networking and Access segments. Overall, for 2013 as a whole, the Group generated adjusted operating income of Euro 290 million, an improvement of Euro 553 million compared to 2012.
The Group reported a positive net income (Group share) of Euro 134 million in Q4, or Euro 0.05 per share. The published net loss for the full year 2013 of Euro (1,304) million was notably impacted by Euro (548) million of net asset impairment charges, essentially recorded in the second quarter of 2013.
Segment operating cash flow reached Euro 499 million in Q4, versus Euro 368 million in Q4 2012. Free cash flow was Euro 363 million in Q4; excluding restructuring charges, free cash flow improved by Euro 119 million.
For the year as a whole, free cash flow was (636) million: excluding restructuring charges and interests paid, free cash flow improved by Euro 324 million.