Rajeev Suri promoted to Nokia CEO

Flush from the Microsoft deal, Nokia has announced a capital restructuring programme that will see it return cash to shareholders through the resumption of dividends and aim to pay down €2bn of its debt over the next two years.

The device-free Nokia will have three strings to its bow. The networks business, which Rajeev Suri will continue to run directly, its location services business, recently rebranded as Here, and a unit responsible for R&D and intellectual property strategy, known as Technologies.

“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 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.”

The Here unit will focus on connected car solutions, personal mobility including wearables and location-based analytics, Nokia said. “Here has the advantage of being independent from any operating system or single business model,” said Suri.

With the handsets division now out of the picture, underlying operating profitability for Nokia’s continuing operations increased to €304 million, or 11.4 per cent of net sales, for the first quarter of 2014, an increase of 20 per cent year on year.

Total sales dropped 15 per cent year on year however, from €3.14bn in the first quarter of 2013 to €2.66bn in the same period this year.

Networks achieved solid underlying operating profitability, with Q114 non-IFRS operating profit of €216m, or 9.3 per cent of net sales, compared to €196m, in Q113. This was primarily due to a higher gross margin which benefitted from a higher proportion of software sales, significant efficiency improvements in Global Services and a higher proportion of mobile broadband sales, the company said.

Here’s external net sales were €185m, an increase of 13 per cent year-on-year, driven by strong sales to vehicle customers.