CEO Kallasvuo expects Nokia to emerge strong from economic crisis
Questions raised at AGM over Navteq deal
Olli-Pekka Kallasvuo
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The Annual General Meeting of mobile telephone giant Nokia attracted more than 1,000 holders of Nokia stock to the Helsinki Fair Centre on Thursday.
President and CEO Olli-Pekka Kallasvuo sought to allay concerns voiced by shareholders by predicting that Nokia will make it through the recession better than its competitors.
“Although the global mobile communications market is shrinking this year, I believe strongly that in spite of the difficult market situation, Nokia’s future gives reason for optimism”, Kallasvuo said.
Kallasvuo gave four reasons why he expects Nokia to do well: the company it is overwhelmingly the biggest manufacturer of mobile telephones, its trademark is one of the best in the world, its economic situation is good, and its capital structure is flexible.
Of the world’s large manufacturers of mobile telephones, Nokia is the furthest in combining telephones and new services. Kallasvuo believes that the new services will promote brand loyalty.
“We estimate that our brand loyalty of about 55 per cent is nearly double that of our global competitors.”
Commenting on individual models, Kallasvuo profusely praised the XpressMusic 5800 telephone, which boasts a touch screen. In the first quarter of this year, 2.6 million ExpressMusic 5800s were sold.
“It could prove to be our most successful device ever.”
To reach this goal, the new phone would have to beat the sales of the 1100, which has sold well over 200 million. Last week Nokia estimated that monthly sales of the 5800 would exceed one million.
At the AGM, many shareholders questioned the wisdom of the acquisition of the map company Navteq for nearly ERU 6 billion. Kallasvuo insisted that it was a good buy.
“The idea was that Nokia would be more competitive after the corporate purchase. I am still very enthusiastic about the deal.”
However, Kallasvuo conceded that the economic crisis has affected the development of Navteq’s business, noting that it has been affected by the difficulties of the car industry, which is one of its important customers.
In January-March Navteq’s profit excluding single items was a mere EUR 5 million.
Nokia continues to face considerable problems in North America, a fact which Kallasvuo admitted when this was pointed out by a shareholder.
“Development has taken place, but it is too slow”.
Protests were raised among small investors by the decision to reduce the dividend to EUR 0.4 per share. Shareholder George Jauhiainen suggested that the pay of the members of the Board of Directors should be reduced proportionally as well - by 25 per cent. There was no vote on the proposal, which was nevertheless recorded in the minutes.
Opening the meeting, Chairman of the Board Jorma Ollila mentioned that the board of directors focussed special attention last year to business operations in China, the challenges of network activities, and the opportunities arising from the acquisition of Navteq.
President and CEO Olli-Pekka Kallasvuo sought to allay concerns voiced by shareholders by predicting that Nokia will make it through the recession better than its competitors.
“Although the global mobile communications market is shrinking this year, I believe strongly that in spite of the difficult market situation, Nokia’s future gives reason for optimism”, Kallasvuo said.
Kallasvuo gave four reasons why he expects Nokia to do well: the company it is overwhelmingly the biggest manufacturer of mobile telephones, its trademark is one of the best in the world, its economic situation is good, and its capital structure is flexible.
Of the world’s large manufacturers of mobile telephones, Nokia is the furthest in combining telephones and new services. Kallasvuo believes that the new services will promote brand loyalty.
“We estimate that our brand loyalty of about 55 per cent is nearly double that of our global competitors.”
Commenting on individual models, Kallasvuo profusely praised the XpressMusic 5800 telephone, which boasts a touch screen. In the first quarter of this year, 2.6 million ExpressMusic 5800s were sold.
“It could prove to be our most successful device ever.”
To reach this goal, the new phone would have to beat the sales of the 1100, which has sold well over 200 million. Last week Nokia estimated that monthly sales of the 5800 would exceed one million.
At the AGM, many shareholders questioned the wisdom of the acquisition of the map company Navteq for nearly ERU 6 billion. Kallasvuo insisted that it was a good buy.
“The idea was that Nokia would be more competitive after the corporate purchase. I am still very enthusiastic about the deal.”
However, Kallasvuo conceded that the economic crisis has affected the development of Navteq’s business, noting that it has been affected by the difficulties of the car industry, which is one of its important customers.
In January-March Navteq’s profit excluding single items was a mere EUR 5 million.
Nokia continues to face considerable problems in North America, a fact which Kallasvuo admitted when this was pointed out by a shareholder.
“Development has taken place, but it is too slow”.
Protests were raised among small investors by the decision to reduce the dividend to EUR 0.4 per share. Shareholder George Jauhiainen suggested that the pay of the members of the Board of Directors should be reduced proportionally as well - by 25 per cent. There was no vote on the proposal, which was nevertheless recorded in the minutes.
Opening the meeting, Chairman of the Board Jorma Ollila mentioned that the board of directors focussed special attention last year to business operations in China, the challenges of network activities, and the opportunities arising from the acquisition of Navteq.
Helsingin Sanomat