Nokia is entering 2022 in a bullish mood, increasing its targets, reinstating its dividends, and initiating a share buyback programme after a successful ‘transformational’ year under the leadership of CEO Pekka Lundmark.
The Finnish telecoms equipment manufacturer posted full year had warned investors to expect a transitional year during 2021 as it did “whatever it takes” to win the 5G radio market.
The company is locked in a fiercely contested battle with other Network Equipment Providers (NEPs) such as Ericsson and Huawei. However, the company was surprised by the earlier-than-expected shift to 5G and has struggled with the high cost of developing 5G technologies.
Lundmark was appointed in the summer of 2020 to remedy the situation and he initiated a major internal restructure.
Now, after encouraging signs last year, Nokia’s financials are starting to see the benefit.
Full year sales were up 3% year-on-year to €22.1 billion, with Nokia benefiting from increased margins. Now it is projecting revenues of up to €23.8 billion next year and is seeking to grow faster than the rest of the industry.
“2021 was a strong year for Nokia driven by our growing technology leadership, robust demand and a faster than expected reset of our business,” declared Lundmark. “Thanks to a solid Q4 capping off a strong 2021, we have created an excellent foundation as we begin to move into the next phase of our strategy to deliver growth and expand profitability.
“All our business groups made significant progress this year to make us more competitive in all the markets in which we compete. Mobile Networks largely closed the gap to competition in 5G and improved its gross margin while continuing to step up R&D investments.”
“Nokia enters 2022 in a strong position with improved margins, faster than expected strategy execution and a high order backlog, although the global supply chain situation remains tight. We see opportunities in the 5G roll out and growing enterprise market.”
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Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.