Press Release: Nokia comments on Moody’s credit rating announcement
This press release was published yesterday as a response to Moody’s latest credit rating announcement on Nokia.
Espoo, Finland – Timo Ihamuotila, Nokia’s Executive Vice President and CFO, comments on today’s rating decision from Moody’s:
“While we are disappointed with Moody’s decision, its impact on the company is limited. We are quickly taking action to position Nokia for future growth and success. Nokia will continue to focus on lowering the company’s cost structure rapidly, improving cash flow and maintaining a strong financial position.”
Nokia’s financial position remains strong. As of June 30 2012, Nokia had gross a cash balance of EUR 9.4 billion, and a net cash balance of EUR 4.2 billion both balances being higher than one year ago. Nokia also has access to additional liquidity via a revolving credit facility of EUR 1.5 billion. This is entirely undrawn and available to the company through March 2016.
Further information on Nokia’s debt instruments can be found in the company’s Q2 2012 Interim Report issued on July 19, 2012.
Category: Nokia
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Oh, so they have 1.5 billion of additional play money. I hadn’t caught that. Well, it only adds to my analysis that no imminent cash-crisis is in sight at Nokia. A lot hinges on Windows Phone 8 success, though, of course.
That additional 1.5 billion will be available trough march 2016. They might not even make it that far..
Through March 2016 == every day from now until some end date in March 2016.
‘its impact on the company is limited’ old good song
Well, the impact probably is limited unless Nokia is going to apply for new financing any time soon. The stock-hit associated with such news, I think, is the bigger impact through added hostile takeover risk. Which is a big risk for Nokia.
may be financial impact is minimal, but brand, name and other non materialize things are lost forever
That’s putting it too strongly, but yes, some PR impact is also possible of course.
I think the impacts aren’t that minimal. The classic example is that your suppliers will require bigger upfront payments and other assurances, but it goes to the sales channel too. When there is danger your company will disappear in year or two, everyone will be reluctant to make deals with you, and that will drive your costs up.
Exactly. And in such case it is very difficult to manage global operations.
We need to hope that the European finance crisis wont light up in flames. Bank crisis would mean prioritization of financing and companies with bad rating will have trouble getting money independent if they still have cash left.
It does not help at all, if WP8 is late.
There is some truth to this angle too, for sure. How much we guess, I’d say depends on one’s bias.
That is why I did not state any opinion
Everything goes according to the plan, we fully trust Elop, nothing to see here, move along.
No, everything does not go according to the plan. Stop being such an Elop fanboy.
Orderly transitioning away from Symbian failed and Nokia is now paying the price.
Orderly transition to MeeGo was ended when Elop announced immediate killing of Symbian and then proceeded to implement it. And what happened to the claim that Symbian was going to collapse as it did anyway, for qualitative reasons, thus warranting the switch?
Symbian was obviously going to collapse anyway, but it would have done it later. (See: RIM.)
The way Nokia implemented the transition created additional losses and most importantly huge PR damage, that could and should have been avoided.
Elop’s bad. Definitely.
elop has no choice, if symbian & meego aren’t killed, then WP won’t grow, haha.
most lumia buyers are ex-symbianers, not ex-droiders or ex-iphoners, evidence : android & ios keep growing
Later than when? Weren’t you arguing that the start of the collapse in Q1 2011 wasn’t due to Elop announcement (at least not that much), and that he internally saw the numbers falling off cliff? Or that MeeGo hadn’t much better chance than WP because Symbian couldn’t boost the shared Qt ecosystem?
I still didn’t see your explanation of what Elop should do differently to prop up the sinking WP ship, as he did, and simultaneously retain Symbian sales.
Indeed I have argued Symbian sales were dropping already in Q1/2011 (they were, even before Feb11, a known fact) but I think Nokia could have maintained them *better* for a quarter or few had they not done the Feb11 dance as they did. I think the RIM trajectory is telling.
Two different issues: 1) Did Symbian need the boot and was it dropping. 2) How to boot Symbian, without adding to the drop. I think 1) is yes but Nokia failed on 2).
@Janne
What the? Nokia smartphone still grew YoY on Q1 2011.
“Indeed I have argued Symbian sales were dropping already in Q1/2011 (they were, even before Feb11, a known fact)”
Please specify the source of this known fact. I would be glad to read about it…
Except these two issues are tightly connected. If Nokia were able to significantly stave off the supposed drop (and just one quarter makes no difference) on their own, then they didn’t need to boot Symbian immediately. Actually, in that case the old strategy of Symbian gradual decline would be the best one.
Nokia absolutely did not need to boot Symbian immediately. That may be one of the biggest PR (and business) blunders of the 21st century so far. The hate damage alone is proof of that.
However, to put in perspective, RIM instead put a brave face on things – and not even that brave face helped them when the cliff finally came and legacy stopped selling.
I maintain: Symbian would have dropped – and soon. But yes, Nokia made it worse.
Please, please, please dont use RIM analogy. They did not have such an transition plan, feature phone business, global presence and ready high-end replacement platform before Q12013. Even Meltemi could have been ready before BB10, if they hadnt started to shift resources in the mids of development.
I use RIM because it is a great analogy. Not perfect, but great.
You assume a new system (with an empty-slate ecosystem) can skyrocket into the place of the old one. I don’t think that is realistic. Not for BB10, not for Samsung Android, not for Nokia MeeGo.
Anything Nokia would have done during 2011 (S^4, MeeGo, Meltemi…), would have taken time to grow. Maybe something would have grown faster than Windows Phone, maybe not, but still it would have taken a trajectory.
And it would have osbourned Symbian^3 while doing it. So Nokia, in any case, would have continued to take a hit until the new thing caught on and was ramped up.
If you want to argue some position you need to at least have some verifiable, credible data. All analyst houses as well as Nokia themselves had a completely different picture – up to Q2’11 YoY sales were on the rise, and with a couple of exceptions, so was the revenue. Also, sales were rising QoQ up until Q1’11 – in fact, Nokia have broken their all time records in the smartphone department (ex ‘converged devices’) with regards to both sales and revenues in Q4’10, and you can’t attribute both to channel stuffing. The stock price was on the rise because of that, and investors ain’t idiots.
The stagnation/drop in Q1’11 can be much more attributed to the Ratnering & Osborning in the mid of the quarter – you can check the data analysts gathered for Jan’11 and even if you extrapolate it to the sales pattern of Q3’10 since the holiday season was over – it suggests that they would, for the first time in a long-long time, have had a better Q1 than Q4 was – something that even Apple cannot do. Of course, after the Feb’11 nobody sane would do any serious business with Nokia and their EOLed devices. Q2’11 can serve as a reminder of that, let alone the quarters that followed when retailers and carriers refused to sign new deals for obvious reasons.
Now, unless you have something that can prove that analysts and Nokia are damn liars and that their reports are fabricated, I’d suggest you not to argue such position.
What the f*****? Seriously, how dumb needs one to be to not be able to read a simple graph?
http://gs.statcounter.com/#mobile_os-eu-monthly-200812-201102
http://gs.statcounter.com/#mobile_os-na-monthly-200812-201102
http://gs.statcounter.com/#mobile_os-ww-monthly-200812-201102
Where is that magical upward trend you keep bangin’ on about? Certainly not in the actual usage figures.
@zipa
We’re talking about sales as in, actual handsets against hard money, not browsing share on the Statcounter’s network.
You can find out all about it here : http://www.nokia.com/global/about-nokia/investors/financials/reports/results—reports/
incognito:
Don’t worry, I’m not going to argue you. You believe what you want to believe.
So just to sum up: The only reason why sales were dropping so rapidly in Q1 2011 for the first time ever in Nokia’s history was the Burning Platform Memo and the change of strategy. Before that sales were rising continuously.
No.
I really am open for facts I was not aware of. But since I am asking for sources which back up your assumption that sales were dropping even before Q1 2011 and you couldn’t show me anything, it makes more sense to stay with the known facts that Symbian sales didn’t decrease until the Burning Platform Memo and the strategy change.
If you know another truth, please enlighten me. No offense, but I am pretty sure that won’t happen as your short answers prove.
Just an advice: Always try to stick to the truth and don’t come up with assumptions you can’t prove or which seem to be contrary to the reality. If everybody had sticked to that advice, it wouldn’t have been said so much bullshit about Symbian.
Likewise. Just browsethroughthe Nokia financial reports. If the dropalreadyhappened, where wasthe profit warning?
I didn’t say there was a BIG DROP in Q1/2011. Stop imagining things. But also, February 11th didn’t cause the start of the decline – or the shenanigans Nokia needed to keep pulling to ship Symbians in those days. There is a reason why Nokia panicked on Symbian and it isn’t Microsoft.
But you know, this is discussed to death, if you want to believe like Tomi Ahonen that Nokia was on a mend in Q4/2010 and throw around Ratner and whatnot, feel free. You believe what you want to believe.
BTW: Just to make clear, I do think Nokia made things worse with February 11th – and they needn’t and shouldn’t have done it like that. There had to be a better way to EOL Symbian while moving the organisation towards WP work – and I believe the was, I wish they had taken it. I have discussed this in past posts.
another platform is burning…so far so good
ha ha +1…
Nokia = The company specialising in burning platforms
and how did the investors react to this news?
nokia’s share price went against the markets and was up 7% at close.
I hate moody’s. American f*ckers working for apple f*uckers.
Why should anyone listen to these guys? they sunk my country as well (Portugal) in the rating, wtf they have to do with europe? Stop this nonsense already!
What does Nokia have to do with the EU any more?
Less & less these days…
too bad that is true… but all i care is not seeing my fav mobile company go to ruin. I hope that they prove their name right once again in the mobile world. And that consumers stop being stupid puppets of marketing fashions, and start seeing who makes good and reliable devices.
The downgrade was already factored into Nokia CDS. The impact is minimal.
Nokia has jettisoned Symbian, Meego, Meltemi, QT. It survives on S40, Java and Windows Phone.
Nokia is still going through a transition period – that will be complete when its cost base better reflects its lower sales and position in the industry.
By the end of 2013 I expect the major shift to have been completed.
When Elop came he was right in deciding Symbian had no future. But he then quickly decided neither did Meego. We then saw him unveil the WP only strategy to critical approval. He then championed the next billion strategy at the low end which was dead on arrival. Now he is championing the location strategy.
I don’t diagree that Elop faced a touh challenge but his decisions and actions and ultimate execution has all been wrong.
All?
Not all perhaps but did the most damaging one (The burning Memo). It’s a good movie title or book title btw:) Sooner or later there will be a book for Executives on this subject, How to avoid Elop’s phenomenon
Elop’s argument that it was a leak is lame. Who’s in his right mind that this kind of info won’t leak in today’s digital time? I am sure there was a better way in handling the situation without that much damage to Nokia, who knows am not CEO. That alone give me more reason to believe of his biases towards MS.
There, I fixed it for you…
Nokia was at transition phase from symbian to meego for almost 2 years. At 1.5 year came new transition to WP7, and next billion ( meltime ). Now the transition period is another 6-10 months for WP8.
Nokia sacrificing all for WP8, maybe Nokia wasn’t big enough or engineers talented enough or the BOD had very small brains.
I might not have the time frames correct but damn that total transition period seems to be around 4 years.
Nokia always seems to be in perpetual transition from one thing to another, rather than focusing on one thing and working on it. For goodness sake, just jettison the old crap and start cranking on the new stuff like your life depends on it!
I just hope they don’t transition to bankruptcy
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