ADT 1999 Annual Report Download - page 23

totaled $7.7 billion, compared to $7.1 billion in the
prior year.
Surging demand for broadband services
led to a stellar year at Tyco Submarine Systems Ltd.
Undersea fiber optic cable revenues rose
25 percent.
The market we serve is shifting dramatical-
ly, as new entrepreneurial players—differentiated
from older, established telephone companies—
become the major investors in undersea cable.
We value both. To meet skyrocketing demand, we
boosted our undersea fiber optic cable installation
and maintenance capacity with the acquisition of
Temasa. The transaction added three cable ships to
our fleet, which will help meet increasing mainte-
nance demand.
We recently introduced a unique, new
undersea cable maintenance program, guarantee-
ing a fast response if a network is ever disabled. We
have already signed two contracts worth $225 mil-
lion over five years, and expect more to follow.
With the acquisition of AMP, Raychem, and
Siemens Electromechanical Components, total seg-
ment sales should exceed $10 billion in fiscal 2000.
We will provide components and systems to a large
base of customers worldwide. AMP alone already
serves 90,000 customers.
Each of Raychem's nine product lines fits
directly into our existing businesses, and Raychem
and AMP have thousands of customers in common.
Raychem, for instance, sells underground equip-
ment for electric utilities, while AMP focuses on
above-ground applications. Because the two com-
panies often interact with the same purchasing
manager, we expect to realize significant synergies,
as well as increased sales going forward. R&D staff
at the two companies will now work together when
appropriate to develop new products for their most
promising markets.
Like AMP, Raychem is the clear leader
in many of its markets. Raychem is a leader in com-
puter touch screens found in airplanes,
automobiles, computers, museums, restaurants,
retailers, public kiosks and casinos.
Tyco Printed Circuit Group sales rose 52
percent to more than $300 million, led by strength in
the telecommunications and data networking sec-
tors. We combined AMP's circuit board group with
existing operations, which now gives us a solid
presence in Europe and China.
Healthcare and Specialty Products
Tyco Healthcare and Specialty Products reported
excellent results in fiscal 1999. Earnings increased
to $1.4 billion, compared with $482 million in the
prior year. Sales grew 23 percent to $5.7 billion, as
compared with $4.7 billion last year.
Aided by the recent merger with U.S. Surgi-
cal and the acquisition of Graphic Controls, Tyco
Healthcare won many large contracts with group
purchasing organizations and integrated health net-
works in fiscal 1999. Our strategy of offering a
broader array of products to health care providers is
paying off.
The international health care market
continues to represent an important opportunity for
Tyco. It is growing 50 percent faster than the U.S.
market and is more profitable because cost pres-
sures are often less
intense. International busi-
ness now accounts for 35
percent of sales but 38 per-
cent of profits.
An even faster-
growing segment is the
alternate site market (nurs-
ing homes, outpatient clin-
ics), where sales are surg-
ing 10–11 percent per year.
We are already number
one in wound care and incontinence products in this
market, and we are leveraging this strength into
incremental sales.
Tyco Plastics and Adhesives had a good
year, with sales up 16 percent and earnings up 35
percent. Although the cost of resin, our primary raw
material, surged by 45 percent by the end of the
year, we passed most—but not all—of the increase
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