Creditreform Rating has affirmed the unsolicited corporate issuer rating of Nokia Oyj at BB+. Creditreform Rating has also affirmed the unsolicited corporate issue rating of the long-term local currency senior unsecured notes issued by Nokia Oyj at BB+. These issues are included in the list of ECB-eligible marketable assets, which can be found on the ECB's website. The outlook for the ratings was changed from stable to positive. For more details regarding the ratings, please refer to our rating report.
Creditreform Rating AG confirmed the unsolicited issuer rating of Nokia Oyj. The outlook remains stable. The main positive factors contributing to the rating are the Group´s strong market position, the geographical diversification and the continued improved operating results over the last years, which are in part caused by the implemented cost savings programs. Especially since the operating result in 2020 was still burdened, among other things, by the restructuring and related costs. Nokia has changed its strategic alignment with a strong commitment to technology leadership. We therefore expect an increase in R&D expenditure, which will put some extra pressure on the Group´s earnings and cash-flows. Additionally, Nokia also announced a new cost reduction program, which will also cause an additional EUR 600 700 million restructuring and associated charges by 2023. The aforementioned factors continue to have a dampening effect on the Group´s operating results and we therefore expect a stable development of the Company despite improved results over the last years.
Creditreform Rating AG confirmed the unsolicited issuer rating of Nokia Oyj. The outlook remains stable. The main positive factors contributing to the rating are the Group´s strong market position, the geographical diversification as well as the improved results generated in 2019 and H1 2020, mainly due to an improvement in the Company´s cost structure and operating profitability resulting from measures implemented in the past. However, despite significant savings, we currently also see the current cost savings program of the Company as a constraining rating factor because further cash outflows and restructuring and associated charges are expected to at least the end of 2020, which will continue to put pressure on the Group´s earnings and cash flows. Further constraining factors for the unsolicited corporate issuer rating are the fast-moving pace of the product cycle and cyclical nature of the industry, the dependence on the spending cycle of communication service providers, and the needed commitment for ongoing high R&D investments in order to retain its market position. Due to the ongoing COVID-19 crisis we expect a positive result for the current business year despite a significant fall in revenue.
Creditreform Rating has carried out an unsolicited rating of Nokia Oyj. The rating has been set to BB+ with stable outlook.