Nokia's Share Repurchases: A Strategic Move to Strengthen Financial Health

Nokia Corporation, a global leader in B2B technology and innovation, has recently announced the repurchase of its own shares as part of a strategic program aimed at offsetting the dilutive effect of new shares issued to Infinera Corporation shareholders and certain Infinera Corporation share-based incentives. This move, initiated on 22 November 2024, is expected to have a significant impact on Nokia's capital structure and financial health.

The repurchase program targets to acquire up to 150 million shares, with a maximum aggregate purchase price of EUR 900 million. The repurchases are subject to the Market Abuse Regulation (EU) 596/2014 (MAR) and the Commission Delegated Regulation (EU) 2016/1052, and are based on the authorization granted to the Board of Directors by Nokia's Annual General Meeting on 3 April 2024.

As of 10 January 2025, Nokia has acquired 872,093 shares at an average price of EUR 4.41 per share, with a total cost of EUR 3,842,878. After these transactions, Nokia holds 226,474,894 treasury shares. This indicates that the company is actively executing its share buyback program, which is expected to continue until 31 December 2025.

The repurchased shares will be cancelled accordingly, further reducing the number of outstanding shares and strengthening Nokia's financial health. By managing share dilution effectively, the company can improve its earnings per share (EPS) and return on equity (ROE) metrics, as the same level of earnings will be distributed among fewer shares.



The strategic rationale behind Nokia's share buyback program is to reduce the company's capital and offset the dilution from issuing additional shares. The repurchases are expected to be funded using the Company's funds in the reserve for invested unrestricted equity, which means that the repurchases will reduce the Company's total unrestricted equity. This reduction in unrestricted equity will directly impact Nokia's capital structure by decreasing the number of outstanding shares and increasing the proportion of equity in the company's capital structure.

In summary, Nokia's share buyback program is expected to:

1. Reduce the number of outstanding shares, increasing the proportion of equity in the company's capital structure.
2. Strengthen Nokia's financial health by improving EPS and ROE metrics.
3. Decrease the Company's total unrestricted equity, as the repurchases are funded using the Company's funds in the reserve for invested unrestricted equity.

These impacts on Nokia's capital structure and financial health are supported by the specific data and examples provided in the materials, such as the number of shares repurchased, the total cost of transactions, and the planned reduction in unrestricted equity.



Nokia's share repurchases could potentially lead to an increase in the stock price, increased EPS, positive market sentiment, short-term volatility, and an increase in shareholder value. However, the actual market reaction will depend on various factors, including the overall market conditions, Nokia's financial performance, and investor sentiment.

In conclusion, Nokia's share buyback program is a strategic move aimed at offsetting the dilutive effect of new shares issued to Infinera Corporation shareholders and certain Infinera Corporation share-based incentives. The program is expected to have a significant impact on Nokia's capital structure and financial health, with potential benefits for shareholders and the company's long-term prospects.