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Nokia names CEO, restores profitability after Microsoft deal

By BusinessNews Staff on April 30, 2014

Nokia announced Tuesday that the former head of Solutions and Networks (NSN), Rajeev Suri, will take over the helm at the Finnish telecommunications giant.

The announcement came just days after Nokia completed the sale of its devices and services division to Microsoft.

Nokia announced Friday it had substantially completed the sale of its devices and services division to Microsoft. The total price was said to be slightly higher than the 5.44 billion euros (7.53 billion U.S. dollars) initially agreed last September.

Nokia chairman Risto Siilasmaa said he believes Suri, the new president and CEO, to be “the right person to lead the company forward” as “Nokia opens this new chapter.”

Suri “has a proven ability to create strategic clarity, drive innovation and growth, ensure disciplined execution, and deliver results,” Siilasmaa added. Suri would take office on May 1 and Siilasmaa would continue as chairman.

Born in 1967 in India, Suri joined Nokia group in 1995 and held a wide range of leadership positions between then and 2007. He has been NSN CEO since 2009. During his tenure as CEO, NSN’s business went through a radical transformation and became a leader in the global telecommunications infrastructure industry.

In its 2014 first quarter financial report, Nokia said on Tuesday that it has restored profitability and regained a strong balance sheet and solid cash position after the massive deal with Microsoft.

Its net sales was 2.66 billion euros (3.61 billion U.S. dollars), which dropped by 15 percent compared to the first quarter of 2013. However, the operating profit was 304 million euros, which increased by 20 percent from the first quarter last year.

As a mainstay of the Finland-based company, NSN’s operating profit was 216 million euros, which increased by 10 percent on a yearly basis.

After selling its mobile phone business to Microsoft, the company maintained gross cash of 6.9 billion euros and net cash of 2.1 billion euros respectively.

The market reacted positively to Nokia’s results. Two hours after the publication of the Q1 report, its share price surged nearly 6 percent in Helsinki Stock Exchange Market on Tuesday morning.

“With the closing of our transaction with Microsoft, Nokia begins a new era. We are confident in our future. Nokia’s vision is to be a leader in technologies which will be important in a world of billions of intelligent connected devices,” commented Risto Siilasmaa.

Meanwhile, Nokia unveiled its new strategy, saying that the company will focus on NSN, which provides network infrastructure; HERE, which offers location-based services; and Advanced Technologies, which focuses on advanced technology development and licensing.

“In all three businesses, Nokia has a solid foundation and we continue to see attractive opportunities to invest in growth,” said Siilasmaa.

Nokia has planed to invest 5 billion euros in a capital structure optimization program, which focuses on recommencing ordinary dividends, distributing deemed excess capital to shareholders, and reducing interest bearing debt.

[Punch]

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