29th Apr 2014 05:00
Nokia / Miscellaneous 29.04.2014 05:00 Dissemination of a Regulatory Announcement, transmitted byDGAP - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- Nokia CorporationStock exchange releaseApril 29, 2014 at 06:00 (CET+1) Espoo, Finland - Having completed the sale of substantially all of its Devices& Services business to Microsoft on April 25, 2014, Nokia today announced thefollowing: -- The appointment of Rajeev Suri as President and Chief Executive Officer, effective May 1, 2014; -- A vision to be a leader in technologies important in a connected world; -- A strategy to realize that vision by building on Nokia's three strong businesses in networks, location and technologies; -- Plans for a EUR 5 billion program to optimize its capital structure, including the Nokia Board's proposal to the Annual General Meeting 2014 for the dividend and for an authorization for the Board to repurchase shares; and -- A new governance structure and the appointment of a new leadership team, effective May 1, 2014. New President and CEO Nokia Board of Directors has appointed Rajeev Suri as President and CEO ofNokia Corporation, effective May 1, 2014. Suri joined Nokia in 1995 and hasheld a wide range of leadership positions in the company. Since October of2009, he has served as CEO of NSN, the former joint venture between Nokia andSiemens that is now fully owned by Nokia. During his tenure as CEO, thatbusiness went through a radical transformation to become one of the leaders inthe telecommunications infrastructure industry. 'As Nokia opens this new chapter, the Nokia Board and I are confident thatRajeev is the right person to lead the company forward,' said Risto Siilasmaa,Chairman of the Nokia Board of Directors. 'He has a proven ability to createstrategic clarity, drive innovation and growth, ensure disciplined execution,and deliver results. We believe that his passion for technology will helpensure that Nokia continues to deliver innovations that have a positive impacton people's lives.' Siilasmaa, who has also been serving as an interim CEO, will return to focusingexclusively on his role as Chairman of Nokia's Board of Directors as of May 1,2014. 'I am honored to have been asked to take this role, and excited about thepossibilities that lie in our future,' said Rajeev Suri. 'Nokia, with its deepexperience in connecting people and its three strong businesses, iswell-positioned to tap new opportunities during this time of technologicalchange. I look forward to working with the entire Nokia team as we embark onthis exciting journey.' Long-term leadership targeted in three key areas Nokia believes that over the next 10 years billions of connected devices willconverge into intelligent and programmable systems that will have the potentialto improve lives in a vast number of areas: time and availability,transportation and resource consumption, learning and work, health andwellness, and many more. This new world of technology will require 1) connectivity capable of handlingmassive numbers of devices and exponential increases in data traffic; 2)location services that seamlessly bridge between the real and virtual worlds;and 3) innovation, including in sensing, radio and low power technologies.Nokia's vision is to be a leader over the long term in these three areas. 'The world of technology is on the verge of a change that we believe will be asprofound as the creation of the internet' said Rajeev Suri. 'With our threestrong businesses - Networks, HERE and Technologies - and position as one ofthe world's largest software companies, we are well placed to meet our goal tobe a leader in the technologies for a world where everybody and everything isconnected.' Nokia strategy 'Nokia's strategy is to develop its three businesses in order to realize itsvision of being a technology leader in a connected world and, in turn, createlong-term shareholder value,' said Rajeev Suri. 'Our goal is to optimize thecompany so that each business is best enabled to meet its goals. Where it makessense to do so, we will pursue shared opportunities between the businesses, butnot at the expense of focus and discipline in each.' Nokia will target the creation of long-term shareholder value by focusing onthe following three areas: 1) Through its Networks business (formerly Nokia Solutions and Networks, orNSN), Nokia will invest in the innovative products and services needed bytelecoms operators to manage the increase in wireless data traffic which ismore than doubling every year. Future investment will focus on further buildingon our strong position in mobile broadband and related services, andstrengthening our leadership position in next-generation network technologies. Today, the Networks business serves more than 90 of the world's 100 largestoperators, is a leader in the large and dynamic mobile broadband market, and isranked third in estimated global market share in mobile radio and second intelecommunication services. An early leader in virtualization and cloudtechnologies, Networks conducted trials and pre-commercial live projects withmore than 50 customers in 2013. 'Customers of our Networks business can have confidence that we will continueto make the investments necessary to deliver the innovation needed to help thembuild even stronger businesses,' said Rajeev Suri. 2) Through its HERE business, Nokia will invest to further develop its locationcloud to make it the leading source of location intelligence and experiencesacross many different operating systems, platforms and screens. Given thatlocation is an essential element of a connected world, we will target ourinvestment in three areas: 1) technology for smart, connected cars; 2)cloud-based services for personal mobility and location intelligence, includingfor the growing segment of wearables and special purpose devices; and 3)location-based analytics for better business decisions. Today, HERE is the leading global provider of map content, powering four out offive in-car navigation systems. Its location platform is used by leadinginternet companies such as Amazon, Microsoft and Yahoo. 'Our view is that onlyone other company has location services that come close to the depth andbreadth of those from HERE - and HERE has the advantage of being independentfrom any operating system or single business model,' said Rajeev Suri. 3) Through its Technologies business, Nokia will invest in the furtherdevelopment of its industry-leading innovation portfolio. This will include 1)expanding our successful intellectual property licensing program; 2) helpingother companies and organizations benefit from our breakthrough innovationsthrough technology licensing; and 3) exploring new technologies for use inpotential future products and services. The Technologies team includes hundreds of world-class scientists and engineerswho have driven more than half of Nokia's recent patent filings and many ofwhom are recognized as leading experts in fields that are essential forenabling the future connected world. These areas include low-power connectedsmart multi-sensor systems, distributed sensing, and intelligent interplaybetween various types of radio technologies. 'Nokia's industry leading intellectual property has the potential to createsignificant value for our licensees and our shareholders,' said Rajeev Suri.'With the strength of our Technologies team and continuing investment inadvanced research and development, we can also drive new opportunities forNokia in both business-to-business and consumer markets.' Nokia's continuing businesses invested more than EUR 2.5 billion in researchand development in 2013. We believe that the company has a strong financialposition and the capacity to continue to make the investments necessary toremain an innovation leader in the three segments in which it competes. Planned EUR 5 billion capital structure optimization program As a result of the closing of the transaction between Nokia and Microsoft,Nokia's financial position and earnings profile have both improvedsignificantly. Furthermore, Nokia's Board of Directors has conducted a thoroughanalysis of Nokia's potential capital structure requirements. Based on thisanalysis, the Nokia Board is confident that Nokia has the financial strengthand flexibility to sustain the long-term investments necessary to ensureindustry leadership in the future. To improve the efficiency of Nokia's capital structure, the Nokia Board istoday announcing plans for a EUR 5 billion capital structure optimizationprogram which focuses on recommencing ordinary dividends, distributing deemedexcess capital to shareholders, and reducing interest bearing debt. Thiscomprehensive program consists of the following components: -- Recommencement of ordinary dividend payments, with at least EUR 800 million of ordinary dividends in total planned for 2013 and 2014, as follows: -- An ordinary dividend for 2013 of EUR 0.11 per share (approximately EUR 400 million), subject to shareholder approval in 2014; and -- A planned ordinary dividend for 2014 of at least EUR 0.11 per share (at least approximately EUR 400 million), subject to shareholder approval in 2015; -- A special dividend of EUR 0.26 per share, subject to shareholder approval in 2014 (approximately EUR 1 billion); -- A EUR 1.25 billion share repurchase program, subject to the authorization to the Board by the shareholders in 2014; and -- Debt reduction of approximately EUR 2 billion by the end of the second quarter 2016. 'We are committed to effective deployment of capital to drive future valuecreation,' said Timo Ihamuotila, who is currently Nokia's Chief FinancialOfficer and who has been appointed to serve as the Group Chief FinancialOfficer as of May 1, 2014. 'We believe our planned comprehensive EUR 5 billioncapital structure optimization program enables Nokia to make quick and orderlyprogress towards a more efficient capital structure, and is aligned with thelong-term interests of our customers and shareholders. Together with ourcontinued focus on solid business execution, these capital structureenhancements support our longer-term target to return to an investment gradecredit rating, which would further affirm our long-term competitive strengthand support our strategic objectives.' Ordinary Dividends - at least EUR 800 million in total for 2013 and 2014 As part of the overall capital structure optimization program, Nokia Board ofDirectors proposes to the Annual General Meeting, scheduled to take place onJune 17, 2014 (Annual General Meeting 2014), the recommencement of ordinarydividend payments to shareholders. The Nokia Board proposes to the AnnualGeneral Meeting 2014 that a dividend of EUR 0.11 per share be paid with respectto the year 2013, which equals approximately half of Nokia's non-IFRS earningsfrom continuing operations in 2013. This ordinary dividend for 2013 is expectedto be paid on or about July 3, 2014. Furthermore, the Nokia Board plans to propose an ordinary dividend of at leastEUR 0.11 per share with respect to the year 2014 to the Annual General Meetingconvening in spring 2015. Special Dividend and Share Repurchase Program - EUR 2.25 billion in total The Nokia Board of Directors proposes to the Annual General Meeting 2014 aspecial dividend of EUR 0.26 per share (approximately EUR 1 billion). Thespecial dividend is expected to be paid on or about July 3, 2014. The Nokia Board also proposes a share repurchase authorization to facilitatethe EUR 1.25 billion of planned share repurchases over two years. The NokiaBoard proposes that the Annual General Meeting 2014 authorize the Board toresolve to repurchase a maximum of 370 million Nokia shares, which correspondsto less than 10% of Nokia shares outstanding. The term of the repurchaseauthorization is for the maximum of 18 months under Finnish regulations, and isexpected to be re-proposed by the Nokia Board at the Annual General Meeting2015. The repurchased shares are expected to be cancelled. The shares may berepurchased in the open market, in privately negotiated transactions, throughthe use of derivative instruments, or through a tender offer made to allshareholders on equal terms. The share repurchase authorization would beeffective until December 17, 2015 and terminate the current authorizationgranted by the Annual General Meeting on May 7, 2013. The Nokia Board plans tocommence the repurchases following the publication of the Company's interimreport for the second quarter of 2014. Debt reduction program - EUR 2 billion in total In addition, Nokia plans to reduce interest bearing debt by approximately EUR 2billion by the end of the second quarter 2016. Once complete, the debtreduction is expected to result in annual run rate savings of at least EUR 100million related to recurring interest costs. Furthermore, lowering our grossdebt level is aligned with our target to return to being an investment gradecompany. Nokia intends to reduce interest bearing debt by utilizing applicablematurity dates, call dates, or other terms allowing early redemption orretirement of debt or by making offers to repurchase debt in the open market. Nokia ended the first quarter 2014 with a strong balance sheet and solid cashposition with gross cash of EUR 6.9 billion and net cash of EUR 2.1 billioncompared to EUR 9.0 billion and EUR 2.3 billion, respectively, at the end ofthe fourth quarter 2013. The sequential decline in Nokia's gross cash wasprimarily due to repayment of certain debt facilities totalling approximatelyEUR 1.8 billion during the first quarter 2014. If the transaction to sellMicrosoft substantially all of our Devices & Services business would haveclosed before the end of the first quarter 2014, Nokia would have ended thequarter with gross cash of approximately EUR 10.5 billion and net cash ofapproximately EUR 7.1 billion. Clear operational governance and structure; strong leadership team Nokia will adopt a simple and clear operational governance model, designed tofacilitate innovation and growth. As of May 1, 2014, all three businesses willreport to the Nokia President and CEO, who has full accountability for theperformance of the company. HERE and Technologies each will have a singleleader reporting to the President and CEO. To ensure efficiency and simplicity,the Nokia President and CEO will assume direct control of the Networks businessand key Networks leaders will report to him. The primary operative decision-making body for the company will be the NokiaGroup Leadership Team, which will be responsible for Group level matters,including the company strategy and overall business portfolio. Effective May 12014, the Nokia Group Leadership Team will replace the current Nokia LeadershipTeam, and the President and CEO will chair the Group Leadership Team, whichwill consist of the following members: -- Rajeev Suri as President and CEO of Nokia. -- Timo Ihamuotila as Executive Vice President and Group Chief Financial Officer. -- Michael Halbherr as CEO of HERE. -- Henry Tirri as Executive Vice President, and acting Head of Technologies. -- Samih Elhage as Executive Vice President and Chief Financial and Operating Officer of Networks. The current Nokia Leadership Team will be disbanded. On April 25, 2014, StephenElop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber stepped downfrom the Nokia Leadership Team and transferred to Microsoft. In addition,Louise Pentland, Juha Akras and Kai Oistamo will step down from the NokiaLeadership Team effective May 1, 2014 and leave the company to pursueopportunities outside of Nokia. Pentland, Akras and Oistamo will continue toserve Nokia in an advisory role during a transition period. Of the currentNokia Leadership Team members, Timo Ihamuotila, Michael Halbherr and HenryTirri will continue as members of the Group Leadership Team, as mentionedabove. With these leaders leaving the company, Nokia announces the appointment ofHans-Jurgen Bill as Executive Vice President of Human Resources, Barry Frenchas Executive Vice President of Marketing and Corporate Affairs, and MariaVarsellona as Executive Vice President and Chief Legal Officer, effective May1, 2014. 'Nokia has a strong and proven team of leaders,' said Rajeev Suri. 'We intendto move fast to further refine our execution plan, build the right companyculture, and institute the necessary operational governance and performancemanagement systems.' Effective May 1, the interim governance structure of Nokia will cease to exist. Risto Siilasmaa, who has been serving as an interim CEO since September 3,2013, will focus exclusively on his role as the Chairman of the Nokia Board ofDirectors. In addition, Timo Ihamuotila will step down from the interimPresident position. Consistent with the planned structural changes announced today, Networks(formerly Nokia Solutions and Networks, or NSN) and Technologies will operateunder the Nokia brand. HERE will retain its distinct identity within the Nokiafamily and, where appropriate, will be identified as 'A Nokia Company'. The NSNname will no longer be used after a short phase-out period. For financialreporting purposes, Nokia will have four reportable segments: Mobile Broadbandand Global Services within Networks, HERE, and Technologies. More information on the Nokia Leaders is available at: http://company.nokia.com. Press conference Nokia is to hold a press conference today at its Karaportti campus in Espoo,Finland. The event is open to representatives of the media. Time: 10:30-11:30 (CET+1). Registration opens at 10:00. Place: Karakaari 7, Espoo 02610. http://her.isb/UWyd6 For others wishing to view the press conference, we will be live-streaming theevent at the following link:http://sites.media-server.com/mmc-custom-portals/nokia/2014-04-29_press-conference/index.php?p=wnkrw6rc Analyst conference call Nokia is to hold a conference call for equity analysts today at 15:00 (CET+1).A webcast of the conference call will be available athttp://company.nokia.com/financials. Media representatives wishing to listen inmay call +1 706 634 5012, conference ID 30453654. FORWARD LOOKING STATEMENTS It should be noted that Nokia and its business are exposed to various risks anduncertainties and certain statements herein that are not historical facts areforward-looking statements, including, without limitation, those regarding: A)expectations, plans or benefits related to Nokia's new strategy; B)expectations, plans or benefits related to future performance of Nokia'scontinuing businesses Networks, HERE and Technologies; C) expectations, plansor benefits related to changes in leadership and operational structure; D)expectations regarding market developments, general economic conditions andstructural changes; E) expectations and targets regarding performance,including those related to market share, prices, net sales and margins; F) thetiming of the deliveries of our products and services; G) expectations andtargets regarding our financial performance, cost savings and competitivenessas well as results of operations; H) expectations and targets regardingcollaboration and partnering arrangements; I) the outcome of pending andthreatened litigation, disputes, regulatory proceedings or investigations byauthorities; J) expectations regarding restructurings, investments, uses ofproceeds from transactions, acquisitions and divestments and our ability toachieve the financial and operational targets set in connection with any suchrestructurings, investments, divestments and acquisitions, including anyexpectations, plans or benefits related to or caused by the transactionannounced on September 3, 2013 where Nokia sold substantially all of Nokia'sDevices & Services business to Microsoft on April 25, 2014 ('Sale of the D&SBusiness'); K) statements preceded by or including 'believe,' 'expect,''anticipate,' 'foresee,' 'sees,' 'target,' 'estimate,' 'designed,' 'aim','plans,' 'intends,' 'focus', 'continue', 'project', 'should', 'will' or similarexpressions. These statements are based on management's best assumptions andbeliefs in light of the information currently available to it. Because theyinvolve risks and uncertainties, actual results may differ materially from theresults that we currently expect. Factors, including risks and uncertaintiesthat could cause these differences include, but are not limited to: 1) ourability to execute our new strategy successfully and in a timely manner, andour ability to successfully adjust our operations; 2) our ability to sustain orimprove the operational and financial performance of our continuing businessesand correctly identify business opportunities or successfully pursue newbusiness opportunities; 3) our ability to execute Networks' strategy andeffectively, profitably and timely adapt its business and operations to theincreasingly diverse needs of its customers and technological developments; 4)our ability within our Networks business to effectively and profitably investin and timely introduce new competitive high-quality products, services,upgrades and technologies; 5) our ability to invent new relevant technologies,products and services, to develop and maintain our intellectual propertyportfolio and to maintain the existing sources of intellectual property relatedrevenue and establish new such sources; 6) our ability to protect numerouspatented standardized or proprietary technologies from third-party infringementor actions to invalidate the intellectual property rights of thesetechnologies; 7) our ability within our HERE business to maintain currentsources of revenue, historically derived mainly from the automotive industry,create new sources of revenue, establish a successful location-based platformand extend our location-based services across devices and operating systems; 8)effects of impairments or charges to carrying values of assets, includinggoodwill, or liabilities; 9) our dependence on the development of the mobileand communications industry in numerous diverse markets, as well as on generaleconomic conditions globally and regionally; 10) our Networks business'dependence on a limited number of customers and large, multi-year contracts;11) our ability to retain, motivate, develop and recruit appropriately skilledemployees; 12) the potential complex tax issues and obligations we may face,including the obligation to pay additional taxes in various jurisdictions andour actual or anticipated performance, among other factors, could result inallowances related to deferred tax assets; 13) our ability to manage ourmanufacturing, service creation and delivery, and logistics efficiently andwithout interruption, especially if the limited number of suppliers we dependon fail to deliver sufficient quantities of fully functional products andcomponents or deliver timely services; 14) potential exposure to contingentliabilities due to the Sale of the D&S Business and possibility that theagreements we have entered into with Microsoft may have terms that prove to beunfavorable to us; 15) any inefficiency, malfunction or disruption of a systemor network that our operations rely on or any impact of a possiblecybersecurity breach; 16) our ability to reach targeted results or improvementsby managing and improving our financial performance, cost savings andcompetitiveness; 17) management of Networks' customer financing exposure; 18)the performance of the parties we partner and collaborate with, and our abilityto achieve successful collaboration or partnering arrangements; 19) our abilityto protect the technologies, which we develop, license, use or intend to usefrom claims that we have infringed third parties' intellectual property rights,as well as, impact of possible licensing costs, restriction on our usage ofcertain technologies, and litigation related to intellectual property rights;20) the impact of regulatory, political or other developments on our operationsand sales in those various countries or regions where we do business; 21)exchange rate fluctuations, particularly between the euro, which is ourreporting currency, and the US dollar, the Japanese yen and the Chinese yuan,as well as certain other currencies; 22) our ability to successfully implementplanned transactions, such as acquisitions, divestments, mergers or jointventures, manage unexpected liabilities related thereto and achieve thetargeted benefits; 23) the impact of unfavorable outcome of litigation,contract related disputes or allegations of health hazards associated with ourbusiness, as well as the risk factors specified in the most recent Nokia'sannual report on Form 20-F in under Item 3D. 'Risk Factors'. Other unknown orunpredictable factors or underlying assumptions subsequently proven to beincorrect could cause actual results to differ materially from those in theforward-looking statements. Nokia does not undertake any obligation to publiclyupdate or revise forward-looking statements, whether as a result of newinformation, future events or otherwise, except to the extent legally required. About Nokia Nokia invests in technologies important in a world where billions of devicesare connected. We are focused on three businesses: network infrastructuresoftware, hardware and services, which we offer through Networks; locationintelligence, which we provide through HERE; and advanced technologydevelopment and licensing, which we pursue through Technologies. Each of thesebusinesses is a leader in its respective field. http://company.nokia.com Media Enquiries: NokiaCommunicationsTel. +358 (0) 10 448 4900Email: [email protected] Source: NASDAQ OMX 29.04.2014 DGAP's Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: Nokia FinlandPhone: Fax: E-mail: Internet: ISIN: FI0009000681Category Code: MSCTIDM: 0HAFSequence Number: 2015Time of Receipt: Apr 29, 2014 05:00:00 End of Announcement DGAP News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement.
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