Nokia F-20 report - an investor's treasure trove
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On Monday, Nokia submitted its annual F-20 report to the Securities and Exchange Commission in the United States. The report can be seen as the favourite reading of every investor.
The dramaturgical progression of this 216-page book is very energetic. At first, the reader is given full and breathless details of every possible and impossible risk threatening the telecommunications giant: there could be a loss of competitiveness if the product portfolio is not in order. Growth can stop if growth in the mobile telephone market stagnates. Competitiveness could weaken, costs might go out of control, competition is tough, product development requires investment, there can be disturbances in logistics, and there are macro-economic risks as well.
Nokia warns investors that the merger of the networks operations of Nokia and Siemens might not result in the synergy benefits that had been anticipated. The merger to form Nokia Siemens Networks should be implemented by the end of this month, and the cost-benefit target for the first three months of this year is EUR 1.5 billion.
Nokia observes that officials are investigating corruption allegations involving Siemens, and could press charges against employees joining the new company. This could affect business activities of Nokia Siemens Networks, its financing position, and its reputation. According to Nokia, officials could find more evidence of wrongdoing.
Midway through the book there is detailed information about what the top management of Nokia are paid. The bonuses of the management declined last year, because the criteria for bonuses - turnover, profit, and cash flow targets - were not met. President and CEO Olli-Pekka Kallasvuo earned EUR 5.2 million in pay, bonuses, options, shares, and pension accruals.
Kallasvuo's other perks included a car and a driver, EUR 10,000 worth of investment advice services, and a mobile phone benefit of EUR 3,000 and a club membership.
Nokia does not say what club Kallasvuo belongs to, but all of the company's executives reportedly have the right to join one club at Nokia's expense.
The final part of the book has traditionally climaxed in a report on court cases that Nokia has been involved in. The list includes information that class-action suits have been filed in connection with Loudeye, a company acquired by Nokia in the autumn. The suits allege that Loudeye's management voted for selling to Nokia at too low a price. In a separate lawsuit, the Loudeye management are accused of having given an excessively positive image of the company's business prospects in 2003-2005.
Nokia proclaims in its familiar manner, that it will "vigorously" defend itself against the charges.
Helsingin Sanomat
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| 14.3.2007 - TODAY |
 Nokia F-20 report - an investor's treasure trove |
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