Nokia Corporation 
   Stock Exchange Release 
   October 29, 2020, at 08:00 (CET +1) 
   Nokia announces first phase of its new strategy, changes to operating 
model and Group Leadership Team 
   New company strategy to be shared in three phases, starting today; new 
operating model to be effective January 1, 2021, designed to better 
position company for changing markets and align with customer needs. 
   -- New model to include four P&L-responsible business groups aligned with 
      customer buying behavior 
   -- New business groups are Mobile Networks, IP and Fixed Networks, Cloud and 
      Network Services and Nokia Technologies 
   -- New Customer Experience organization to strengthen customer relationships 
      across all businesses 
   -- Optimizes model for better accountability and transparency, increased 
      simplicity and improved cost-efficiency 
   -- New structure effective January 1, 2021 
   -- Nokia will announce its new strategy in three phases; more information to 
      be shared on December 16, 2020, and at Capital Markets Day on March 18, 
   Espoo, Finland -- Nokia today announces high-level strategic principles 
and a new operating model that will be effective on January 1, 2021. 
   "Our industry is undergoing profound changes. Industrial automation and 
digitalization are increasing customer demand for high-performance 
networks, with a trend towards open interfaces, virtualization, and 
cloud native software. This will revolutionize how we design, deploy, 
manage and sell our products and solutions," said Pekka Lundmark, 
President and CEO. 
   "As we work to renew our strategy, we will ensure we are well positioned 
to leverage these trends, improve our performance and position the 
company for long-term value creation." 
   At this point, Nokia's strategy review has reached four conclusions. 
First, that technology leadership will be the top priority; second, that 
the company's current customer base, consisting of telco operators and 
enterprises (including webscale companies), provides a solid platform 
for value creation; third, that there is a longer-term opportunity to 
move into higher-value "network-as-a-service" business models; and 
fourth, that end-to-end as a core strategic idea will be replaced with a 
more focused approach, with each of the company's new business groups 
having a distinct role in the overall strategy. 
   Nokia will have four P&L-responsible business groups structured around 
unique customer offerings, with ownership for becoming one of the market 
leaders in their respective sector. They will also need to demonstrate a 
clear route for delivering shareholder value with return on capital 
employed as a key metric. 
   "Our goal is to better align with the needs of our customers, and 
through that increase accountability, reduce complexity and improve 
cost-efficiency. Going forward, we will have a more rigorous approach to 
capital allocation and will invest to win in those segments where we 
choose to compete," said Pekka Lundmark. 
   The new business groups are: 
   -- Mobile Networks, which will include mobile network products, network 
      deployment and technical support services, and related network 
      management. This business group will offer the full portfolio for 
      customers wanting to buy mobile access networks. It will target 
      leadership in key technologies such as 5G, ORAN and vRAN. The net sales 
      of Mobile Networks in the last four quarters were approximately EUR10 
      billion. Tommi Uitto has been appointed as President of this business 
   -- IP and Fixed Networks, which will include IP Routing, Optical Networks 
      and Fixed Networks, as well as Alcatel Submarine Networks business, 
      currently reported under "Group Common." This business group will respond 
      to the ever-increasing demand for higher capacity, greater reliability, 
      faster speeds and lower costs. The net sales of IP and Fixed Networks in 
      the last four quarters were approximately EUR7 billion. Federico 
      Guillén has been appointed as President of this business group. 
   -- Cloud and Network Services, which will include the existing Nokia 
      Software business (excluding Mobile Networks network management), Nokia's 
      enterprise solutions, core network solutions including both voice and 
      packet core, and managed and advanced services from its current Global 
      Services unit. This unit will also act as a delivery channel of certain 
      products from other business groups to enterprise customers. Cloud and 
      Network Services will target growth by leveraging the industry transition 
      to cloud-based delivery, network-as-a-service business models, and 
      software-led value creation. The net sales of Cloud and Network Services 
      in the last four quarters were approximately EUR3 billion. Raghav Sahgal 
      has been appointed as President of this business group. 
   -- Nokia Technologies, which will remain largely unchanged. The net sales of 
      this business group in the last four quarters were approximately EUR1.4 
      billion. Jenni Lukander continues as President of this business group. 
   In addition to these four business groups, there will be a Customer 
Experience organization that will provide a common interface with 
customers and will act as the voice of the customer across all business 
groups. This unit will include Nokia's customer teams, region and 
country management, as well as marketing. The organization will be led 
by Ricky Corker. 
   "Our focused business groups will ensure that we shorten the distance 
between customers and product development. Our new Customer Experience 
organization is designed to build on our deep customer relationships. We 
already have world-class teams and fully intend to keep this as a key 
strength going forward," said Lundmark. 
   Additionally, there will be four corporate functions: 
   -- Finance, which will also include cross-company shared services, and which 
      will be led by Chief Financial Officer Marco Wirén. 
   -- Legal and Compliance, which will be led by Chief Legal Officer Nassib 
   -- People, which will include human resources functions, operating model 
      management and real estate. This function will be led by Chief People 
      Officer Stephanie Werner-Dietz. 
   -- Strategy and Technology, which will include strategic planning, long-term 
      research including Nokia Bell Labs, and IT and digitalization. The leader 
      for this function will be named at a later stage. 
   The new structure and any resulting new appointments will take effect on 
January 1, 2021, at which point the roles mentioned above will form 
Nokia's new Group Leadership Team led by President and CEO Pekka 
Lundmark. These leaders will start developing business plans for their 
respective units immediately. 
   Nokia plans to share more information about strategy, market dynamics 
and more details about its new business groups on December 16, 2020. A 
Capital Markets Day is planned for March 18, 2021, for deep dives into 
the company's business groups, focusing on strategy, targets, and 
operational plans. Nokia also plans to adapt its external reporting in 
line with the new model to help investors assess the value of the 
different parts of its business. 
   Nokia's Q3 2020 results analyst webcast will begin on October 29, 2020, 
at 3 p.m. EET. A link to the webcast will be available at 
www.nokia.com/financials. Media representatives can listen in via the 
link, or alternatively call +1 412 717 9224. 
   Note: Proposed organizational changes referenced in this release may be 
subject to consultation with employee representatives in certain 
jurisdictions and are not considered final until such processes are 
   Media inquiries: 
   Nokia Communications 
   Tel.: +358 10 448 4900 
   Email: press.services@nokia.com 
   Katja Antila, Global Head of Media Relations 
   Investor inquiries: 
   Nokia Investor Relations 
   Tel.: +358 40 803 4080 
   Email: investor.relations@nokia.com 
   About Nokia 
   We create the technology to connect the world. Only Nokia offers a 
comprehensive portfolio of network equipment, software, services and 
licensing opportunities across the globe. With our commitment to 
innovation, driven by the award-winning Nokia Bell Labs, we are a leader 
in the development and deployment of 5G networks. 
   Our communication service provider customers support more than 6.4 
billion subscriptions with our radio networks, and our enterprise 
customers have deployed over 1,300 industrial networks worldwide. 
Adhering to the highest ethical standards, we transform how people live, 
work and communicate. For our latest updates, please visit us online at 
www.nokia.com and follow us on Twitter at @nokia. 
   It should be noted that Nokia and its businesses are exposed to various 
risks and uncertainties and certain statements herein that are not 
historical facts are forward-looking statements. These forward-looking 
statements reflect Nokia's current expectations and views of future 
developments and include statements regarding: A) expectations, plans or 
benefits related to our strategies, growth management and operational 
key performance indicators; B) expectations, plans or benefits related 
to future performance of our businesses (including the expected impact, 
timing and duration of that impact of COVID-19 on our businesses, our 
supply chain and our customers' businesses) and any future dividends 
including timing and qualitative and quantitative thresholds associated 
therewith; C) expectations and targets regarding financial performance, 
cash generation, results, the timing of receivables, operating expenses, 
taxes, currency exchange rates, hedging, cost savings, product cost 
reductions and competitiveness, as well as results of operations 
including targeted synergies, better commercial management and those 
results related to market share, prices, net sales, income and margins; 
D) expectations, plans or benefits related to changes in organizational 
and operational structure; E) expectations regarding competition within 
our market, market developments, general economic conditions and 
structural and legal change globally and in national and regional 
markets, such as China; F) our ability to integrate acquired businesses 
into our operations and achieve the targeted business plans and benefits, 
including targeted benefits, synergies, cost savings and efficiencies; 
G) expectations, plans or benefits related to any future collaboration 
or to business collaboration agreements or patent license agreements or 
arbitration awards, including income to be received under any 
collaboration or partnership, agreement or award; H) timing of the 
deliveries of our products and services, including our short term and 
longer term expectations around the rollout of 5G, investment 
requirements with such rollout, and our ability to capitalize on such 
rollout; I) expectations and targets regarding collaboration and 
partnering arrangements, joint ventures or the creation of joint 
ventures, and the related administrative, legal, regulatory and other 
conditions, as well as our expected customer reach; J) outcome of 
pending and threatened litigation, arbitration, disputes, regulatory 
proceedings or investigations by authorities; K) expectations regarding 
restructurings, investments, capital structure optimization efforts, 
uses of proceeds from transactions, acquisitions and divestments and our 
ability to achieve the financial and operational targets set in 
connection with any such restructurings, investments, capital structure 
optimization efforts, divestments and acquisitions, including our 
current cost savings program; L) expectations, plans or benefits related 
to future capital expenditures, reduction of support function costs, 
temporary incremental expenditures or other R&D expenditures to develop 
or rollout software and other new products, including 5G, ReefShark and 
increased digitalization; M) expectations regarding our customers' 
future actions, including our customers' capital expenditure constraints 
and our ability to satisfy customer's needs and retain their business; 
and N) statements preceded by or including "believe", "expect", 
"expectations", "deliver", "maintain", "strengthen", "target", 
"estimate", "plan", "intend", "assumption", "focus", "continue", 
"should", "will" or similar expressions. These forward-looking 
statements are subject to a number of risks and uncertainties, many of 
which are beyond our control, which could cause our actual results to 
differ materially from such statements. These statements are based on 
management's best assumptions and beliefs in light of the information 
currently available to them. These forward-looking statements are only 
predictions based upon our current expectations and views of future 
events and developments and are subject to risks and uncertainties that 
are difficult to predict because they relate to events and depend on 
circumstances that will occur in the future. Factors, including risks 
and uncertainties that could cause these differences include, but are 
not limited to: 1) our strategy is subject to various risks and 
uncertainties and we may be unable to successfully implement our 
strategic plans, sustain or improve the operational and financial 
performance of our business groups, correctly identify or successfully 
pursue business opportunities or otherwise grow our business; 2) general 
economic and market conditions, general public health conditions 
(including its impact on our supply chains) and other developments in 
the economies where we operate, including the timeline for the 
deployment of 5G and our ability to successfully capitalize on that 
deployment; 3) competition and our ability to effectively and profitably 
invest in existing and new high-quality products, services, upgrades and 
technologies and bring them to market in a timely manner; 4) our 
dependence on the development of the industries in which we operate, 
including the cyclicality and variability of the information technology 
and telecommunications industries and our own R&D capabilities and 
investments; 5) our dependence on a limited number of customers and 
large multi-year agreements, as well as external events impacting our 
customers including mergers and acquisitions and the possibility of our 
customers awarding business to our competitors; 6) our ability to 
maintain our existing sources of intellectual property-related revenue 
through our intellectual property, including through licensing, 
establishing new sources of revenue and protecting our intellectual 
property from infringement; 7) our ability to manage and improve our 
financial and operating performance, cost savings, competitiveness and 
synergies generally, expectations and timing around our ability to 
recognize any net sales and our ability to implement changes to our 
organizational and operational structure efficiently; 8) our global 
business and exposure to regulatory, political or other developments in 
various countries or regions, including emerging markets and the 
associated risks in relation to tax matters and exchange controls, among 
others; 9) our ability to achieve the anticipated benefits, synergies, 
cost savings and efficiencies of acquisitions; 10) exchange rate 
fluctuations, as well as hedging activities; 11) our ability to 
successfully realize the expectations, plans or benefits related to any 
future collaboration or business collaboration agreements and patent 
license agreements or arbitration awards, including income to be 
received under any collaboration, partnership, agreement or arbitration 
award; 12) Nokia Technologies' ability to protect its IPR and to 
maintain and establish new sources of patent, brand and technology 
licensing income and IPR-related revenues, particularly in the 
smartphone market, which may not materialize as planned, 13) our 
dependence on IPR technologies, including those that we have developed 
and those that are licensed to us, and the risk of associated 
IPR-related legal claims, licensing costs and restrictions on use; 14) 
our exposure to direct and indirect regulation, including economic or 
trade policies, and the reliability of our governance, internal controls 
and compliance processes to prevent regulatory penalties in our business 
or in our joint ventures; 15) our reliance on third-party solutions for 
data storage and service distribution, which expose us to risks relating 
to security, regulation and cybersecurity breaches; 16) inefficiencies, 
breaches, malfunctions or disruptions of information technology systems, 
or our customers' security concerns; 17) our exposure to various legal 
frameworks regulating corruption, fraud, trade policies, and other risk 
areas, and the possibility of proceedings or investigations that result 
in fines, penalties or sanctions; 18) adverse developments with respect 
to customer financing or extended payment terms we provide to customers; 
19) the potential complex tax issues, tax disputes and tax obligations 
we may face in various jurisdictions, including the risk of obligations 
to pay additional taxes; 20) our actual or anticipated performance, 
among other factors, which could reduce our ability to utilize deferred 
tax assets; 21) our ability to retain, motivate, develop and recruit 
appropriately skilled employees; 22) disruptions to our manufacturing, 
service creation, delivery, logistics and supply chain processes, and 
the risks related to our production sites; 23) the impact of litigation, 
arbitration, agreement-related disputes or product liability allegations 
associated with our business; 24) our ability to re-establish investment 
grade rating or maintain our credit ratings; 25) our ability to achieve 
targeted benefits from, or successfully implement planned transactions, 
as well as the liabilities related thereto; 26) our involvement in joint 
ventures and jointly-managed companies; 27) the carrying amount of our 
goodwill may not be recoverable; 28) uncertainty related to the amount 
of dividends and equity return (if any) we are able to distribute to 
shareholders for each financial period; 29) pension costs, employee 
fund-related costs, and healthcare costs; 30) our ability to 
successfully complete and capitalize on our order backlogs and continue 
converting our sales pipeline into net sales; 31) risks related to 
undersea infrastructure; and 32) the scope and duration of  the COVID-19 
impact on the global economy and financial markets as well as our 
customers, supply chain, product development, service delivery, other 
operations and our financial, tax, pension and other assets, and the 
shape of the economic recovery following the pandemic as well as the 
risk factors specified in our 2019 annual report on Form 20-F published 
on March 5, 2020 under "Operating and financial review and 
prospects-Risk factors" as supplemented by the form 6-K published on 
April 30, 2020 under the header "Risk Factors" and in our other filings 
or documents furnished with the U.S. Securities and Exchange Commission. 
Other unknown or unpredictable factors or underlying assumptions 
subsequently proven to be incorrect could cause actual results to differ 
materially from those in the forward-looking statements. We do not 
undertake any obligation to publicly update or revise forward-looking 
statements, whether as a result of new information, future events or 
otherwise, except to the extent legally required. 

(END) Dow Jones Newswires

October 29, 2020 02:15 ET (06:15 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
Nokia (NYSE:NOK)
Historical Stock Chart
From Nov 2020 to Dec 2020 Click Here for more Nokia Charts.
Nokia (NYSE:NOK)
Historical Stock Chart
From Dec 2019 to Dec 2020 Click Here for more Nokia Charts.