Having completed the sale of substantially all of its Devices & Services business to Microsoft on April 25, 2014, Nokia has announced the appointment of Rajeev Suri as President and Chief Executive Officer, effective May 1, 2014.
The devices company, now part of Microsoft, also iterated its vision to be a leader in technologies important in a connected world.
Nokia said it will realise this vision by building on Nokia's three strong businesses in networks, location and technologies.
The company also announced plans for a 5 billion euro program to optimise 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.
The company has also announced a new governance structure and the appointment of a new leadership team, effective May 1, 2014.
The New President and CEO
Rajeev Suri, President and CEO of Nokia Corporation effective May 1, 2014, is an old Nokia hand.
He joined Nokia in 1995 and has held a wide range of leadership positions in the company.
Since October of 2009, he has served as CEO of NSN, the former joint venture between Nokia and Siemens that is now fully owned by Nokia. During his tenure as CEO, that business went through a radical transformation to become one of the leaders in the telecommunications infrastructure industry.
"As Nokia opens this new chapter, the Nokia Board and I are confident that Rajeev 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 create strategic clarity, drive innovation and growth, ensure disciplined execution, and deliver results. We believe that his passion for technology will help ensure that Nokia continues to deliver innovations that have a positive impact on people's lives."
Siilasmaa, who has also been serving as an interim CEO, will return to focusing exclusively 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 the possibilities that lie in our future," said Rajeev Suri. "Nokia, with its deep experience in connecting people and its three strong businesses, is well-positioned to tap new opportunities during this time of technological change. I look forward to working with the entire Nokia team as we embark on this exciting journey."
Long-term leadership targeted in three key areas
Nokia said in its statement it believes that over the next 10 years billions of connected devices will converge into intelligent and programmable systems that will have the potential to improve lives in a vast number of areas: time and availability, transportation and resource consumption, learning and work, health and wellness, and many more.
This new world of technology will require 1) connectivity capable of handling massive 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 as profound as the creation of the internet" said Rajeev Suri. "With our three strong businesses - Networks, HERE and Technologies - and position as one of the world's largest software companies, we are well placed to meet our goal to be a leader in the technologies for a world where everybody and everything is connected."
"Nokia's strategy is to develop its three businesses in order to realize its vision of being a technology leader in a connected world and, in turn, create long-term shareholder value," said Rajeev Suri. "Our goal is to optimize the company so that each business is best enabled to meet its goals. Where it makes sense to do so, we will pursue shared opportunities between the businesses, but not at the expense of focus and discipline in each."
Nokia will target the creation of long-term shareholder value by focusing on the following three areas:
Through its Networks business (formerly Nokia Solutions and Networks, or NSN), Nokia will invest in the innovative products and services needed by telecoms operators to manage the increase in wireless data traffic which is more than doubling every year. Future investment will focus on further building on their strong position in mobile broadband and related services, and strengthening our leadership position in next-generation network technologies, the company said in its statement.
Today, the Networks business serves more than 90 of the world's 100 largest operators, is a leader in the large and dynamic mobile broadband market, and is ranked third in estimated global market share in mobile radio and second in telecommunication services. An early leader in virtualization and cloud technologies, Networks conducted trials and pre-commercial live projects with more than 50 customers in 2013.
"Customers of our Networks business can have confidence that we will continue to make the investments necessary to deliver the innovation needed to help them build even stronger businesses," said Rajeev Suri.
Through its HERE business, Nokia will invest to further develop its location cloud to make it the leading source of location intelligence and experiences across many different operating systems, platforms and screens. Given that location is an essential element of a connected world, we will target our investment in three areas: 1) technology for smart, connected cars; 2) cloud-based services for personal mobility and location intelligence, including for the growing segment of wearables and special purpose devices; and 3) location-based analytics for better business decisions.
Through its Technologies business, Nokia will invest in the further development of its industry-leading innovation portfolio. This will include 1) expanding their successful intellectual property licensing program; 2) helping other companies and organizations benefit from our breakthrough innovations through technology licensing; and 3) exploring new technologies for use in potential future products and services.
The Technologies team includes hundreds of world-class scientists and engineers who have driven more than half of Nokia's recent patent filings and many of whom are recognized as leading experts in fields that are essential for enabling the future connected world. These areas include low-power connected smart multi-sensor systems, distributed sensing, and intelligent interplay between various types of radio technologies.
"Nokia's industry leading intellectual property has the potential to create significant value for our licensees and our shareholders," said Rajeev Suri. "With the strength of our Technologies team and continuing investment in advanced research and development, we can also drive new opportunities for Nokia in both business-to-business and consumer markets."
Nokia's continuing businesses invested more than EUR 2.5 billion in research and development in 2013.'We believe that the company has a strong financial position and the capacity to continue to make the investments necessary to remain an innovation leader in the three segments in which it competes,' the Nokia statement said.
Planned EUR 5 billion capital structure optimization programme
As a result of the closing of the transaction between Nokia and Microsoft, Nokia's financial position and earnings profile have both improved significantly, according to the company.
To improve the efficiency of Nokia's capital structure, the Nokia Board announced plans for a EUR 5 billion capital structure optimization programme which focuses on recommencing ordinary dividends, distributing deemed excess capital to shareholders, and reducing interest bearing debt.