Hopefully, whatever it is, it is already in the hands of the tech bloggers, and so we get reviews tomorrow, too!
Nokia Capital Markets Day 2014
Nokia sets key 2015 and long-term financial targets, outlines operational and strategic priorities
Stock exchange release
November 14, 2014 at 09:00 (CET +1)
London, UK - Today, at its Capital Markets Day event, Nokia outlined its company vision and strategic priorities for its three businesses, set key 2015 and long-term financial targets for the company and detailed the operational priorities it expects will help create sustainable value for the long term.
"The rapidly evolving world of technology provides the context for Nokia's vision and strategy: now it's about connecting things as well as people, and we expect to see more than 50 billion connected things - devices, modules and sensors - by 2025. We believe we have a powerful role to play in this world, a role of expanding the human possibilities of technology," said Nokia President and CEO, Rajeev Suri.
"This meeting with investors comes on the heels of a quarter where we demonstrated growth across our three businesses. It showed the potential of this company when it starts to execute well," Suri said.
Nokia Group CFO Timo Ihamuotila added: "The foundations for Nokia are solid. We have a strong balance sheet and are making clear progress with our capital structure optimization program."
"As said before, recommencing an ordinary dividend is one of our main priorities, and we expect to continue to repurchase shares as part of our capital structure optimization program," Ihamuotila said.
Given Nokia's pioneering role in connecting people and its strong technology capabilities, the company's vision is to expand the human possibilities of the connected world. Each of Nokia's three businesses is well-placed to contribute to reaching this vision.
To tap the opportunities ahead and leverage its strong assets, Nokia will focus its approach to value creation on four areas:
- Disciplined business portfolio management and capital allocation;
- Clear business-specific strategies;
- Operational excellence; and
- A high-performance culture and strong values.
Looking at market dynamics, the competitive environment and the challenges that operators are facing, Nokia Networks' strategy is to build on its current momentum while transforming to serve the operator of the future. The target is to grow slightly faster than the market over the long-term, create best-in-class, high quality products and services, and deliver on profitability goals.
The strategy for HERE is to leverage the location cloud and superior content in segments where Nokia can differentiate and capture value. The target is to win in automotive, grow in the enterprise segment and leverage the unique assets that HERE has with leading Internet players, while improving profitability through increased efficiency.
Nokia Technologies' strategy builds on its world-leading patent portfolio. It will focus on patent, technology, and brand licensing as well as investment in products and services incubation based on Nokia's innovation.
Nokia's operational approach will help it execute its strategies. There will be a clear focus on operational excellence with the Nokia Business System (NBS), which provides a shared set of operating practices to create value across the three businesses. NBS includes three elements: investment optimization, performance management and talent management. Nokia also continues to target further improvement in its operations going forward, with a clear focus on efficiencies through automation and disciplined processes.
In addition to operational excellence, we are introducing a common, high-performance culture across the company. This is a long term project based on Nokia's new values, and it will be implemented with discipline and rigor.
- Nokia targets to grow Nokia Networks' net sales slightly faster than the market over the long-term.
- Nokia now targets Nokia Networks' long-term non-IFRS operating margin range to be 8% to 11%. This compares to Nokia's previous target for Nokia Networks' long-term non-IFRS operating margin range to be 5% to 10%.
- Nokia targets to record tax expenses in Nokia Group's Consolidated Income Statements at a long-term effective tax rate of approximately 25%. However, Nokia targets Nokia Group's cash tax obligations to continue at approximately EUR 250 million annually until Nokia Group's deferred tax assets have been fully utilized. The cash tax amount may vary depending on profit levels in different jurisdictions and the amount of license income potentially subject to withholding tax.
2015 business outlook
- Nokia expects Nokia Networks' net sales to grow on a year-on-year basis for the full year 2015.
- Nokia expects Nokia Networks' non-IFRS operating margin for the full year 2015 to be in-line with Nokia Networks' new long-term non-IFRS operating margin range of 8% to 11%.
- Nokia's outlook for Nokia Networks net sales and non-IFRS operating margin is based on expectations regarding a number of factors, including:
- Competitive industry dynamics;
- Product and regional mix;
- The timing of major network deployments; and
- Expected continued operational improvement.
- Nokia expects HERE's net sales to grow on a year-on-year basis for the full year 2015.
- Nokia expects HERE's non-IFRS operating margin for the full year 2015 to be between 5% and 10%.
- Nokia expects Nokia Technologies' net sales to grow on a year-on-year basis for the full year 2015, excluding potential amounts related to the expected resolution of the arbitration with Samsung.
- Nokia expects Nokia Technologies' non-IFRS operating expenses to increase meaningfully on a year-on-year basis for the full year 2015, related to higher investments in licensing activities, development of licensable technologies, and business enablers including go-to-market capabilities.
Additional financial guidance for 2015
- Nokia expects Nokia Group capital expenditures to be approximately EUR 200 million in 2015, primarily attributable to capital expenditures by Nokia Networks.
- Nokia expects Nokia Group financial income and expenses, including net interest expenses and the impact from changes in foreign exchange rates on certain balance sheet items, to amount to an expense of approximately EUR 160 million in 2015, subject to changes in foreign exchange rates and the level of interest bearing liabilities.
- Nokia expects Group Common Functions non-IFRS operating expenses to be approximately EUR 120 million in 2015.
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There, everyone feel better?
Good. Sleep tight.....
Nokia Here division teases 'Here for Gear' announcement for tomorrow
Nokia's Here division will announce news tomorrow at 10 AM London time. A picture posted to Nokia's Here Twitter account details a picture with the words, "Here for Gear." Nokia's Here navigation software is installed on Samsung's (SSNLF) new Gear S smartwatch....
Nokia has posted above image on HERE’s Twitter account and it teases “HERE for Gear”. So, while it is not too difficult to guess, we decided to reveal anything about it only tomorrow when HERE team makes the announcements. And, we hear that there is more to reveal and talk about than just “HERE for one Gear”.
So, stay tuned for our coverage tomorrow and the announcements will take place around 10 am London time ( 2.30 am IST)
Direct from Nokia
Capital structure optimization program – FAQ for investors:
As part of the Capital Structure Optimization program announced today we are announcing a plan to execute share buybacks of EUR 1.25 billion over two years.
Provided we receive shareholder authorization, our plan is to commence the repurchases following publication of our Q2 2014 results. We will ask for the authorization to run until December 17, 2015 and expect to seek similar authorization at the 2015 Annual General Meeting.
Buy utility stocks, or short social networking stocks...
Either way, go away...
Nokia is looking to beef up its infrastructure play in the US with the acquisition of Schaumburg, Ill.-based indoor wireless specialist SAC Wireless, announced on Wednesday.
Terms of the deal were not disclosed, but Nokia Corp. (NYSE: NOK) said in a statement that it expects it to close in the third quarter of 2014. The newly handset-free infrastructure vendor is hoping to use SAC's infrastructure expertise to strengthen its presence in the North American RAN market. (See Nokia CEO Must Channel Fighting Spirit.)
SAC designs, installs and maintains indoor and outdoor distributed antenna systems (DAS) for better wireless coverage in stadiums, hospitals, government facilities, and enterprises. The company claims all the major US wireless operators among its customers. (See Must Haves for the Big Game? DAS & WiFi.)
Nokia already has a relationship with Sprint Corp. (NYSE: S) here, but like competitor Ericsson AB (Nasdaq: ERIC), wants to get in closer with AT&T Inc. (NYSE: T) and Verizon Wireless . Current Analysis analyst Ed Gubbins says the SAC acquisition should help boost Nokia's presence in North America and offer a way to deepen their relationship with the Tier 1s despite not having LTE basestation contracts with AT&T or Verizon. (See AT&T, Verizon Mulling Managed Services With Ericsson and Sprint Sparks Up Vendors for Faster 4G LTE.)
The deal helps Nokia's US presence in mobile broadband infrastructure, Gubbins says, but, more specifically, it boosts its capabilities in indoor enterprise network deployment services. The analyst says this is "highly relevant to the small-cell opportunity that's ramping up now and relevant to AT&T and Verizon in particular, which are both rolling out small cells." (See NSN to Take Its Flexi Zone to Work and AT&T Gets 'Opportunistic' With 4G Small Cells.)
Like Nokia's recent Mesaplexx buy, both purchased with fresh cash from Microsoft Corp. (Nasdaq: MSFT), the SAC acquisition was all about Nokia's existing core business, not extending its capabilities, something Ricky Corker, executive vice president of North America for Nokia Networks, acknowledged in announcing the acquisition. (See Nokia Buys RF Smarts to Shrink Basestations and Microsoft Officially Closes Nokia Buy.)
"With SAC Wireless' capabilities complementing our own in-house expertise, we are well positioned to bring enhanced quality and increased end-to-end delivery efficiency to our customers," he writes in the release. "No other infrastructure provider is offering this level of proven services."
This is far from the only acquisition announced in July, just two days in. Interestingly, CommScope Inc. is also looking to beef up its indoor enterprise play and just yesterday announced the acquisition of two business units from a small UK-based provider of small cell services, Alifabs Group. (See CommScope Acquires UK Wireless Specialist, Spirent Spends $25M on Radvision VoLTE Unit, Google Adds Songza to Its M&A Playlist, and EZchip Strikes $130M Deal to Buy Tilera.)
The M&A flurry is in large part a response to the complexities around indoor deployments -- acquiring sites and permits, backhauling small cells, mitigating interference, and business models -- are all challenges network operators are working through now. (See Indoor Market Driving LTE Small Cell Push.)
Nokia says SAC's 450 employees and its expertise in site development, "self-perform" implementation of indoor and outdoor small cells and DAS, and program management will complement its in-house capabilities to implement these typically sub-contracted services.