Nokia Unveils Restructuring Plan With Dual Operating Segments and Ambitious 2028 Financial Goals

2025-12-26 03:55:08

Nokia (NOK) has announced a significant organizational transformation alongside aggressive financial targets for 2028. The telecom infrastructure company will consolidate its operations into two primary operating segments—Network Infrastructure and Mobile Infrastructure—taking effect from January 1, 2026. This structural overhaul marks a shift from Nokia’s previous operational model and will be reflected in financial reporting beginning with first quarter 2026 results.

New Financial Trajectory and Growth Targets

The Finnish technology firm has set its sights on comparable operating profit of 2.7 billion to 3.2 billion euros by 2028, representing substantial growth from the 2.0 billion euros achieved in the preceding 12 months. To support this expansion, Nokia targets net sales compound annual growth rate of 6-8% for the 2025-2028 period, with a notably aggressive 10-12% CAGR targeted for the combined Optical Networks and IP Networks divisions.

This updated long-term financial target replaces Nokia’s prior objectives, which aimed for market-outpacing growth, a minimum comparable operating margin of 13%, and free cash flow conversion of 55% to 85% from comparable operating profit.

Streamlined Organizational Architecture

The two new operating segments will fundamentally reshape how Nokia executes its business strategy. The Network Infrastructure segment, continuing under David Heard’s leadership, will comprise three business units: Optical Networks, IP Networks, and Fixed Networks. This consolidated structure aims to enhance operational efficiency within the infrastructure domain.

Simultaneously, the newly formed Mobile Infrastructure segment brings together Nokia’s Core Networks portfolio, Radio Networks portfolio, and Technology Standards (formerly Nokia Technologies). Justin Hotard will serve as interim leader of this segment, which encompasses three units: Core Software, Radio Networks, and Technology Standards. This realignment is designed to strengthen Nokia’s position in mobile network solutions and standardization efforts.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.