HELSINKI (Reuters) – Nokia Chief Executive Rajeev Suri will step down in September and be replaced by Pekka Lundmark, who used to work for the Finnish company and is the current CEO of energy group Fortum, Nokia said on Monday.
FILE PHOTO: Pekka Lundmark, President and CEO of Finnish utility company Fortum, poses after a news conference announcing that Fortum is set to gain control of Germany’s Uniper by acquiring the stakes of activist funds Elliott and Knight Vinke in Duesseldorf, Germany, October 8, 2019. REUTERS/Thilo Schmuelgen
Suri has been in the role for six years and was previously head of Nokia Siemens Networks.
The Finnish company has been struggling to regain investors’ confidence after issuing a surprise profit warning in October that slashed off a third of its value and forcing the company to admit some delays in its 5G development.
Nokia faces intense competition from Sweden’s Ericsson and China’s Huawei in the race to deliver 5G telecoms networks to operators around the world.
Lundmark, head of Fortum since 2015, held multiple executive positions at Nokia between 1990 and 2000, including vice president of strategy and business development at Nokia Networks.
Lundmark led Fortum to embark on a bold attempt to gain control of its German rival Uniper, resulting in a power dealock between the companies that has yet to be resolved.
Before his time at Fortum, Lundmark led Finnish cranemaker Konecranes for 10 years until 2015.
“He has a record of leadership and shareholder value creation at large business-to-business companies; deep experience in telecommunications networks, industrial digitization, and key markets such as the United States and China; Nokia Chairman Risto Siilasmaa said in a statement.
The chairman also cited his focus “on strategic clarity, operational excellence and strong financial performance.”
Nokia’s October surprise profit warning forced it to halt dividend payouts.
“We view the change of CEO positively due to the fact that in its current situation Nokia needs a greater redirection which embarks from changing the management,” said analyst Mikael Rautanen of Inderes.
“At the same time, the news strengthens our earlier assessment that the company has more than just temporary problems,” he added.
Nokia shares were lifted last week after Bloomberg News reported that the Finnish telecom network equipment maker was considering asset sales and mergers.
However, a source close to the company told Reuters there was no truth to the report. Nokia declined to comment.
Reporting by Anne Kauranen and Terje Solsvik; Editing by Kim Coghill and Keith Weir