Nokia Repurchases Shares: A Strategic Move to Maintain Capital Structure and Shareholder Value

Nokia Corporation, a leading B2B technology and innovation company, has announced the repurchase of its own shares on 07.02.2025. This strategic move aims to offset the dilutive effect of new Nokia shares issued to the shareholders of Infinera Corporation and certain Infinera Corporation share-based incentives. By repurchasing and cancelling its own shares, Nokia seeks to maintain its capital structure and enhance shareholder value.

The repurchase program, authorized by Nokia's Board of Directors, targets to repurchase 150 million shares for a maximum aggregate purchase price of EUR 900 million by the end of 2025. The repurchases are based on the authorization granted by Nokia's Annual General Meeting on 3 April 2024 and are in compliance with the Market Abuse Regulation (EU) 596/2014 (MAR) and the Commission Delegated Regulation (EU) 2016/1052.

The repurchase program has several strategic implications for Nokia's capital structure and shareholder value:

1. Capital Reduction: By repurchasing and cancelling its own shares, Nokia reduces its capital, offsetting the dilution from issuing additional shares. This helps maintain the company's capital structure and prevents excessive dilution of existing shareholders' interests.
2. Shareholder Value: Reducing the number of outstanding shares increases earnings per share (EPS) and return on equity (ROE), as the same amount of earnings is distributed among fewer shares. This can lead to an increase in share price, benefiting shareholders.
3. Dividend Payout: With a stronger balance sheet and potentially higher EPS, Nokia may be able to maintain or even increase its dividend payout, further benefiting shareholders.
4. Financial Flexibility: The repurchases are funded using the Company's funds in the reserve for invested unrestricted equity, demonstrating Nokia's financial strength and flexibility.



Nokia's strong Q4 growth and profitability, as reported in their financial statement release on 30 January 2025, further supports the company's financial health and ability to execute this share repurchase program. The Board is proposing an increase in the dividend to EUR 0.14 per share in respect of the financial year 2024, aligning with the company's long-term financial objectives of returning value to shareholders.

In conclusion, Nokia's repurchase of its own shares is a strategic move aimed at maintaining its capital structure and enhancing shareholder value. By reducing the number of outstanding shares and offsetting the dilutive effect of the Infinera acquisition, Nokia demonstrates its commitment to managing its capital structure and maintaining shareholder value.