ADT 2000 Annual Report Download - page 23

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We give customers what they want. Every year, we get bet-
ter at focusing on the customer’s needs. Our service and relia-
bility help generate a great amount of repeat business.
We are global. Many of our best customers are large corpo-
rations that do business all over the world. Increasingly, such
customers want a single global provider who can get them what
they need, from Borneo to Boston.
Strategic acquisitions also play a key role in our growth.
A good acquisition should not only be profitable on its own
terms, it should also help existing businesses and product lines.
The products we gain through acquisitions help open doors with
new customers and create cross-selling opportunities. Or an
acquired product may fit so well with those we already offer that
a customer may, for the first time, begin to see us as a good
place for one-stop shopping.
The Internet
Tyco is using the Internet to become even more efficient and
more profitable. We see the Internet as a tool that can:
* reduce purchasing costs
* improve productivity
* enhance internal knowledge
* boost awareness—and perhaps sales—of products
Because of the Internet, we are seeing dramatic improvements
in supply chain management and significant savings on raw
materials. Also, by enhancing communications, the Internet can
increase productivity. If we know about customer orders faster,
we can adjust production runs and reduce our working capital.
Better communications can also slash transaction costs.
Our Fire Protection unit is using the Internet as a knowledge
management tool. Before bidding on a job, we often have to find
out which employees have the expertise to perform it. In the
past, the search was time-consuming. Now, through e-mail and
a Fire Protection Intranet, we not only locate the necessary peo-
ple quickly, but can also tell the prospective customer how much
expertise we have in a certain field. The process saves money
and time—and helps us win more bids.
The Internet is also helping to create new products,
especially at ADT Security. By using the Internet, ADT will soon
be able to monitor, and eventually adjust, every appliance in
your home.
ADT is currently selling more systems to both consumers
and businesses on the Internet. Indeed, the ADT website
(www.adt.com) is generating 100,000 visits per month. Our
Electronics unit is also selling via the AMP website
(www.amp.com), where 110,000 engineered products are avail-
able for inspection and purchase.
Finally, the Internet is an excellent everyday cost-cutting
tool, which fits extremely well in the Tyco culture, where a focus
on efficiency is a way of life.
Tyco Ventures
During fiscal 2000, we started Tyco Ventures, our new venture
capital unit, to access new and emerging technology that could
be used in our businesses. Tyco Ventures gives us an early look
at potentially groundbreaking new technologies. Its invest-
ments range from minimally invasive surgical products compa-
nies to optical communications and network equipment com-
panies. Naturally, we aim to earn attractive returns on our
invested capital.
Tyco Ventures has thus far invested $130 million in emerg-
ing companies. This investment also represents a source of
research and development for new and innovative products for
our core businesses.
Tyco Electronics
Tyco’s Electronics segment had an outstanding year, as operat-
ing income surged 127 percent to $2.4 billion, up from $1.1
billion last year. Sales for the group totaled $9.9 billion, com-
pared to $6.1 billion in the prior year.
Tyco’s telecommunications products gained market share
worldwide, with sales spurred by cellular phones, switching
stations and networking. Tyco products are found in 60 percent
of new cell phones, with some phones containing seven or more
different Tyco products (such as gallium arsenide chips,
input/output connectors, battery connectors, antennas, poly
switches, coax connectors and battery packs).
Sales of fiber optic components almost doubled, growing
from $215 million to $420 million (not including those made by
TyCom). Sales at the Tyco Printed Circuit group, aided by the
acquisition of Praegitzer, nearly doubled to $835 million.
We made our first foray into manufacturing circuit boards in
China by opening a new plant in Shanghai.
The smooth integration of recent acquisitions—Raychem,
Siemens Electromechanical Components and the OEM business
of Thomas & Betts—allowed us to significantly increase sales of
automotive products. We made great gains in the U.S. and Asia/
Pacific region, sometimes because we were able to sell a bundle
of products together. Tyco produces some of the most advanced
components in today’s vehicles, such as the GPS antennas for
GM’s OnStar®roadside assistance product.
Some revolutionary technology came with Thomas & Betts.
Metallic Particle Interconnects set a new standard for speed in
miniaturized interconnect products, and should find a large mar-
ket in telecommunications and computer applications.