Danske Bankin Sami Sarkamies kysyi miten Nokia aikoo saada MN:n marginaalin kymmeneen prosenttiin. Lundmarkin vastaus oli varsin pitkä, mikä heijastelee niin asian merkityksellisyyttä kuin sen haasteellisuutta:
Sami Sarkamies
Hi, Thanks for the comment. For Mobile Network of less than €9 billion this year with low single-digit EBIT margin, just curious how will you be able to retain scale and grow revenues to €10 billion target that will be required for double-digit margins in the long run? I mean if we look at the latest forecast from the like of Dell’Oro the five-year outlook for RAN market looks quite flattish even if you assume some share gains from Chinese rivals. Do you have anything else planned than the cost program that was announced after third quarter results?
Pekka Lundmark
Of course, I mean, the cost program is an important element in this, but we also have to remember that perhaps with the exception of India, 2023 was really weak year when it comes to investments. And when you look at the big picture, only 25% of 5G base stations are mid-band. So that is suggesting that there will have to be over time in the second half of 2028, there will have to be significant investments in 5G radio networks in different parts of the world already before 6G starts to come in. Data traffic continues to grow 20% to 30% of the year. And then in addition to that, the Chinese will be increasingly under pressure because of political reasons and because of the various actions that the Western countries have taken to limit their access to latest silicon. So it is very clear that to get to €10 billion top line, we have to continue to take market share.
AT&T is, of course, a setback. From there, we need to start climbing back up towards a market share that we’ll need to start by three, if you want to get to €10 billion top line. It is a challenge, absolutely, and that’s why we have provided a fairly low guidance for this year’s profitability, 1% to 4%, and then we commented 2026 target at the December – December event, we are not assuming that we would get to double-digit by 2026.
Then we also need to keep in mind that when we talk about the second half of the decade. By then, we will have significantly increased the non-CSP business part of Mobile Networks. We are already now growing, albeit from a low base, fast in private wireless.
And then a very important target for the second half of the decade is the defense industry, where the spending is significant. It is currently mostly proprietary military technologies when it comes to communications. And the challenge they are facing is that it is getting extremely difficult to being cost competitive there when the technologies are proprietary. So it’s getting extremely expensive. And that’s why the whole defense industry in several parts of the world is looking at commercial technologies at the moment, such as 5G to provide an alternative to proprietary military technologies.
We have said that the actions that MN is taking will allow them to lower the level of net sales to reach this 10% operating margin to approximately €10 billion, as you said. So that is a correct figure that you mentioned. That is our target, how we are modeling the business. Currently, before the cost action started the level to reach a 10% operating margin in terms of sales was €11.5 billion. So now we are taking that to €10 billion.
Sinänsä monipuolinen vastaus, mutta ei oikein minua vakuuttanut.
- Ensinnäkin ei vain AT&T vedä Nokian myyntiä alas mutta myös kokonaismarkkina Dell’Oron mukaan laskussa keskimäärin 1% vuodessa aikajaksolla 2024-28. Kun 5G kasvaa, laskee 4G samalla niin paljon, että kokonaismarkkina taantuu. Toivottavasti kuitenkin Kiina on jo niin täyteen rakennettu, että siellä investoinnit merkittävästi laskisivat samalla kun kasvua vielä jonkin verran piisaisi Kiinan ulkopuolella.
- Yksityisverkot toki kasvavat, mutta niiden myynnistä vastaa kampus-verkkojen osalta CNS kun taas MN toimittaa laajan alueen verkot. Oletan silti, että myös CNS:n myymistä verkoista MN saa ainakin voittoa laitteiden toimittamisesta CNS:lle. Jos Nokian markkinaosuus (joka nyt on 30%) ei muutu ja yksityisverkkojen kasvuennuste toteutuu, kolmessa vuodessa Nokia voisi saada sitä kautta 366 milj. euroa lisää myyntiä:
- Nokia mahdollisuudet puolustussektorilla ovat tällä hetkellä lähinnä sarjaa toivotaan toivotaan, mutta toivottavasti siitä jotain merkityksellistä kehkeytyy.
Onko perusteltuja veikkauksia sitä saavutaako MN koskaan kymmenen prosentin marginaalin? Miksi saavuttaa tai ei saavuta?
