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Nokia speeds up transformation to improve profitability

Sumary of Nokia speeds up transformation to improve profitability:

  • Anticipates comparable operating margin to increase to 10–13% in 2023 and to grow faster than the market in full-year 2023…
  • Today Nokia is holding its Capital Markets Day 2021 and providing an overview of long-term market trends, how it is setting itself up for value creation, detailed plans for each of its business segments, its financial outlook and its updated dividend policy…
  • “Nokia is repositioning itself to deliver sustainable, profitable growth, adapting our business to lead in an increasingly digitalized world…
  • We have a clear and detailed plan for how we will reset the business, accelerate competitiveness and scale up our lead in the markets we choose to play in…
  • “We have moved away from end-to-end as a cornerstone of our equity story and have instead put in place four fully accountable, empowered business groups, arranged according to how customers buy…
  • Each of these business groups has solid strategies and targets to grow market share and margins through enhanced technology leadership,”..
  • Nokia sees a number of major trends impacting the industry over the next few years, with 5G and resulting technologies at their core and creating opportunities for CSPs, enterprises and webscales…
  • I want Nokia be able to shape them, delivering best-of-breed products, services and connectivity that allow our customers to deliver constantly improving performance,”..
  • It can be essential for restoring productivity growth by digitalizing physical industry, and it can help provide more inclusive access to work, healthcare, markets and education…
  • To deliver on its refreshed purpose, Nokia will strengthen its position as a trusted partner for critical networks, which underpin more and more mission-critical functions for businesses and across societies…
  • In addition, Nokia focuses on technology leadership in each of its businesses and captures the value shift to cloud and new business models as critical networks evolve…
  • Nokia also creates value with long-term research and intellectual property which provide both the technology and the financial platform for the company to be successful over the long term…
  • In addition, Nokia is refreshing its ways of working and promoting a culture where its people are open to continuous development, fearless to experiment and empowered to act with clear accountability…
  • It then plans to scale up to drive growth in new use cases and business models including in enterprise and private wireless in order to grow faster than the market…
  • Nokia total estimated addressable market is expected to grow at a compounded annual growth rate (CAGR) of approximately 1% from 2020 to 2023, comprising of the following estimates:..
  • 1 Assuming continuation of 2020 year-end EUR/USD rate of 1.23.2 Comparable measures exclude intangible asset amortization and other fair value adjustments, goodwill impairments, restructuring related charges and certain other items affecting comparability…
  • 3 Free cash flow = net cash from/(used in) operating activities – capital expenditures + proceeds from sale of property, plant and equipment and intangible assets – purchase of non-current financial investments + proceeds from sale of non-current financial investments.4 Comparable ROIC = (Comparable operating profit after tax) / (Average total equity + average interest-bearing liabilities – average total cash and current financial investments)…
  • In addition, regarding the underlying assumptions of Nokia financial outlook, Nokia updated its outlook assumptions for its four new business groups and Group Common and Other in 2021, and provided new outlook assumptions for 2023…
  • Each business group is focused on driving improved focus on capital allocation and technology leadership in 2021, positioning Nokia to grow profitably in 2022 and beyond…
  • Over time, each business group is expected to generate a return on capital employed (ROCE) greater than Nokia weighted average cost of capital (WACC) of 7%…
  • *Although we are now providing our outlook assumption for Nokia Technologies in terms of comparable operating margin, we continue to maintain our expectation for Nokia Technologies to deliver a slight improvement in comparable operating profit in full year 2021, relative to full year 2020, and stable performance over the longer term….

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