Marconi reported core sales of £426 million for the three month period ending 31-March-2003, down 7% from the previous quarter and 4% lower excluding the impact of core business disposals and closures. Some highlights from the quarter:
- the company said market conditions "remained tough" across all major geographic regions and worsened considerably in the Middle East. Relative stability in Marconi's core European markets - UK, Germany and Italy - was offset by a substantially reduced level of sales in the Middle East, partly due to the completion of a major contract in Saudi Arabia. Sales in the US were down 8%, where an increase in sales of Broadband Routing and Switching (BBRS) equipment was more than offset mainly by lower service revenues in outside plant and power due to continued CAPEX reductions from US service providers.
overall Broadband Routing and Switching (BBRS) sales increased to £37 million, compared to £32 million in the prior quarter
Marconi's ten largest customers for the quarter were BellSouth, BT, Telecom Italia, Telkom South Africa, US Federal Government, UK Government, Verizon, Viag Interkom (Germany), Vodafone Group and Wind (Italy). In aggregate, these customers accounted for 59% of sales, a similar level as in each of the 3 previous quarters
it was the second consecutive quarter of positive cash flow
gross margins improved to 24% from 22% despite the lower sales volume
the company's core operating cost annual run-rate (before exceptional items) has been reduced to around £490 million from the previous run-rate target of £520 million
the company's financial restructuring is almost complete
Marconi Corporation plc shares, warrants and notes are expected to start trading on the London Stock Exchange on 19 May 2003
