Tektronix sees the bigger picture

TEKTRONIX must be one of the best-kept secrets in the US. Although it has been in existence for nearly 50 years and is a Fortune 500 company with more than $1.3bn (pounds 828m) of sales around the world, it is little known outside its native land.

That may have something to do with its being based in the Pacific North- west region. But in truth, there was, until recently, little incentive for the Oregon-based organisation to shout about itself. In the words of Rudi Lamprecht, president of European operations, the company emerged from the 1980s "in difficult shape". It employed 20,000 in 10 different businesses and seemed to have lost its way.

The company, founded in 1946 with a focus on innovation in the field of measurement, had fallen into the trap of trying to do everything for itself, and had lost its competitiveness.

The result was that the company's board, in Mr Lamprecht's phrase, "took the company away from the management team". At the head of the replacement group was Jerome Meyer, with a background in the computer industry. Almost immediately, he and his colleagues began a restructuring operation that aimed to reduce the company to "a portfolio of four businesses". These were in the original field of measurement, where Tektronix is a world leader in oscilloscopes; colour printing; video systems; and network displays.

As part of this strategy, much of the manufacturing has been outsourced, often to companies that were once part of Tektronix but have been sold to their management. As a consequence, a staff of about 20,000 in 1990 has been reduced to about 7,800. However, Mr Lamprecht stresses that most of those no longer employed by Tektronix now work for the satellite companies.

Moreover, with the US still accounting for more than half of all sales, it was decided to raise the company's profile overseas. Europe is a particular target - hence the setting up of a European headquarters in Munich 18 months ago, and the hiring of Mr Lamprecht, after a 20-year career at the computer company Hewlett-Packard, to run it.

Now 850-strong and operating in 16 countries, including Britain (where there is a plant at Marlow, Buckinghamshire), the division is justifying the investment made in it, Mr Lamprecht believes, by showing strong growth. The European share of the business is now about 31 per cent, but he sees no reason why it could not soon be 35 or 36 per cent.

Worldwide, sales have risen 9 per cent in measurement products, 36 per cent in colour printing and 33 per cent in video. In Europe the figures are 8, 80 and 90 per cent. Not surprisingly, this performance has helped the stock price - in the past year and a half it has soared from $19 to $47.Profits, standing at more than $60m at the end of the last financial year, have risen 39 per cent in the last quarter.

Measurement remains the key market for Tektronix, but it is somewhat static. The management expects far more from the remaining business areas.

In particular, colour printing - which accounts for only a tenth of the $23bn printing market - is felt to have great potential. Mr Lamprecht says the company, which has about a quarter of the colour portion of the market, is about to go through the sort of change that happened a couple of decades ago in television - all of a sudden everybody will want colour.

Moreover, the combination of network displays and video systems gives it the ability to provide complex video production and transmission products as well as disc-based storage and playback systems of use to large broadcasting organisations.

It is into this part of the operation that the acquisition of Lightworks, the UK maker of computerised video-editing systems, fits. This deal is also in line with a company policy of not concentrating research and development - on which 12 per cent of revenues is spent - in the US. It wants to establish centres of expertise around the world.