"I would like to call it a transformational year,"
CEO Pekka Lundmark told reporters after the group posted a net profit of EUR
1.6 billion, driven by a 1.6 percent increase in sales to EUR 22.2 billion.
The results follow a string of quarterly earnings surprises
for the network equipment maker, which has been flagging in the race for the 5G
network equipment market against Sweden's Ericsson and China's Huawei.
Since taking the helm in 2019, Lundmark has overseen a
wide-ranging restructuring and cost-cutting programme, with savings invested
into developing new, more competitive products.
The moves are widely seen as having paid off, with Nokia
predicting a comparable operating margin of between 11 and 13.5 percent for
2022, following 12.5 percent in 2021.
Lundmark has until now been cautious of publicly offering
longer-term forecasts but on Thursday announced that the group hopes to push
its operating margin beyond 14 percent in the next three to five years.
Increased cash flow also meant Nokia would reinstate
dividends, which were suspended in October 2019.
"The board is proposing a EUR 0.08 per share dividend
for 2021 and we are also initiating a share buyback programme to return up to
EUR 600 million over two years," Lundmark said.
Lundmark said the semiconductor shortage and global supply
chain hold-ups have "stabilised" but that the situation "continues
tight".
He said that expected improvements in the second half of
2022 "will not help this year yet in the big picture" but that 2023
should look "very different".