FT: Nokia is looking for a new CEO – the company denies

Network devices manufacturer Nokia has started the search for a new CEO, reports an authoritative newspaper Financial Times.

According to it, the company has approached several candidates and hired a consultant for the task. According to the Financial Times, the CEO is to be replaced because the company’s turnover has decreased and the value of the stock has developed poorly.

Nokia denies the newspaper’s information.

“The board fully supports the CEO Pekka Lundmarkia and there is no ongoing process to replace him”, the statement of Nokia’s board states.

The statement emphasizes that the key tasks of each company’s board are to systematically and continuously evaluate and discuss the management team’s long-term succession plan, which covers internal and external candidates.

“Our CEO and chairman of the board are fully aware of and participating in this process,” the statement said.

Lundmark started as CEO of Nokia in the fall of 2020. During his term as CEO, the company has changed its organization and operating method and cut its costs, but the value of the stock has weakened.

According to the Financial Times, the company’s shareholders in particular are frustrated by the decrease in turnover and the development of the stock. The newspaper does not say how many shareholders it has been in contact with.

The information from the Financial Times did not cause a significant change in the value of Nokia’s stock on the New York Stock Exchange.

The government chairman Sari Baldauf informed Helsingin Sanomat via text message that he had nothing to add to the statement. According to the Financial Times, Nokia’s board is also looking for a new chairman to replace Baldauf. He will be 70 years old next year.

Five within a year, Nokia’s share has depreciated by 19 percent. The main competitor Ericsson’s stock has weakened by almost ten percent in the same period.

Two weeks ago, the news agency Bloomberg reported that Nokia is considering selling its largest business group, i.e. mobile phone networks. The company denied the information.

Last in 2010, Nokia’s turnover shrank by eight percent to 22.3 billion euros. The operating profit percentage measuring profitability was 10.7, while it was 12.5 in 2022.

Nokia’s central problem is that telecom operators have reduced their investments in mobile phone networks. However, Ericsson has the same problem.

Ericsson’s turnover decreased by ten percent last year and the operating profit percentage was 8.1.

Nokia has tried to reduce its dependence on telecom operators by expanding its business to customers other than telecom operators. So far, the results have been relatively meager.

Expiring the turnover and operating profit of the second quarter of the year were improved by the one-time income of 150 million euros from mobile phone networks. It was part of an agreement negotiated with AT&T, the largest telecommunications operator in the United States, when it decided to transfer the procurement of fifth-generation (5g) mobile network technology to Ericsson.

The five-year contract won by Ericsson is worth 14 billion dollars. It is by far the largest contract in the industry.