| FILED BY NOKIA CORPORATION PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
SUBJECT COMPANY: ALCATEL-LUCENT FILE NO. 001-11130
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FILED BY NOKIA CORPORATION
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
SUBJECT COMPANY: ALCATEL-LUCENT
FILE NO. 001-11130
Investor roadshow
November 2015
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Disclaimers
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements that reflect Nokia’s and Alcatel-Lucent’s current expectations and views of future events and developments. Some of these forward-looking statements can be identified by terms and phrases such as “anticipate,” “should,” “likely,” “foresee,” “believe,” “estimate,” “expect,” “intend,” “continue,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions. These forward-looking statements include statements relating to the [strategy of the combined company; product lines and portfolio of the combined company; earnings per share; cost synergies, synergy targets, operating cost savings, revenue and balance sheet of the combined company; capital structure optimization; shareholder distribution plan; de-leveraging; plan to achieve investment grade credit rating; conditions to closing; expected settlement date of the exchange offer; profile; integration; composition of the board and management of the combined company; and structure and organization of the combined company]. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements. These forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These forward-looking statements are only predictions based upon our current expectations and views of future events and developments and are subject to risks and uncertainties that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Risks and uncertainties include the ability of the parties to obtain the necessary stock exchange clearances to open the public exchange offers, minimum tender acceptances, inability to achieve targeted synergies and projections, shareholder approval to close, consummation of the pending transaction and ability to implement the capital structure optimization program.
The forward-looking statements should be read in conjunction with the other cautionary statements that are included elsewhere, including the Risk Factors section of the Registration Statement on Form F-4
(the “Registration Statement”), Nokia’s and Alcatel-Lucent’s most recent annual reports on Form 20-F, reports furnished on Form 6-K, and any other documents that Nokia or Alcatel-Lucent have filed with the SEC, the AMF or with the FIN-FSA. Any forward-looking statements made in this presentation are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
IMPORTANT ADDITIONAL INFORMATION
This presentation relates to the proposed public exchange offer by Nokia to exchange all of the ordinary shares, American Depositary Shares (“ADSs”) and convertible securities issued by Alcatel-Lucent for new ordinary shares and ADSs of Nokia. This presentation is for informational purposes only and does not constitute an offer to purchase or exchange, or a solicitation of an offer to sell or exchange, any ordinary shares, ADSs or convertible securities of Alcatel-Lucent, and include the Tender Offer Statement on Schedule TO or the Preliminary Prospectus / Offer to Exchange included in the Registration Statement on Form F-4 dated November 12, 2015 (the “Registration Statement”), the Solicitation / Recommendation Statement on Schedule 14D-9 to be filed by Alcatel-Lucent with the SEC, the listing prospectus of Nokia filed by Nokia with the Finnish Financial Supervisory Authority on October 23, 2015, or the draft offer document (projet de note d’information) filed by Nokia on October 29, 2015 with, and which received the visa of, the French Autorité des marchés financiers (“AMF”) on November 12, 2015 or the draft response document (projet de note en réponse) filed by Alcatel-Lucent on October 29, 2015 with, and which received the visa of, the AMF (including the letter of transmittal and related documents and as amended and supplemented from time to time, the “Exchange Offer Documents”). No offering of securities shall be made in the United States except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933. Making this presentation available in electronic format does not constitute a recommendation by Nokia or any other party to sell or buy securities.
The making of the proposed exchange offer by persons who are residents in or nationals or citizens of jurisdictions outside France or the United States or to custodians, nominees or trustees of such persons (the “Restricted Shareholders”) may be made only in accordance with the laws of the relevant jurisdiction. It is the responsibility of the Restricted Shareholders wishing to accept the proposed exchange offer to inform themselves of and ensure compliance with the laws of their respective jurisdictions in relation to the proposed exchange offer. The tender offer will be made only through the Exchange Offer Documents.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE EXCHANGE OFFER DOCUMENTS AND ALL OTHER RELEVANT DOCUMENTS THAT NOKIA OR ALCATEL-LUCENT HAS FILED OR MAY FILE WITH THE SEC, AMF, NASDAQ HELSINKI OR FINNISH FINANCIAL SUPERVISORY AUTHORITY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY
HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING THE PROPOSED EXCHANGE OFFER.
The information contained in this presentation must not be published, released or distributed, directly or indirectly, in any jurisdiction where the publication, release or distribution of such information is restricted by laws or regulations. Therefore, persons in such jurisdictions into which these materials are published, released or distributed must inform themselves about and comply with such laws or regulations. Nokia and Alcatel-Lucent do not accept any responsibility for any violation by any person of any such restrictions.
The Exchange Offer Documents and other documents referred to above, if filed or furnished by Nokia or Alcatel-Lucent with the SEC, as applicable, including the preliminary Registration Statement, are or will be available free of charge at the SEC’s website (www.sec.gov).
Nokia’s draft offer document (projet de note d’information) and Alcatel-Lucent’s draft response document (projet de note en réponse), containing detailed information with regard to the French public exchange offer, are available on the websites of the AMF (www.amf-france.org), Nokia (www.nokia.com) and/or Alcatel-Lucent (www.alcatel-lucent.com), as applicable.
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Agenda
Positioning for the future
A transformational combination
Recap of strategic rationale
Customer reaction
Strong transaction-related execution
Execution of objectives
Timeline and key milestones
A foundation for long-term success
Business groups and operational model
Integration preparedness
Leadership
Delivering value to our shareholders
Alcatel-Lucent governance plan
Acceleration of synergy target
Capital structure optimization and shareholder distribution program
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Agenda
Page
Positioning for the future 4
A transformational combination
Recap of strategic rationale
Customer reaction
Strong transaction-related execution 9 A foundation for long-term success 12 Delivering value to our shareholders 17
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Transformational combination driving significant shareholder value
End-to-end portfolio scope and scale player with leading global positions across products
Strategically and services compelling
Complementary offerings, customers and geographic footprint with limited overlap
Innovation powerhouse with significant combined R&D resources
Pro forma combined net sales of approximately €24.7bn1 in 2014 with additional cross-sell opportunities and expanded addressable market to c. €130bn Financially
Operating cost synergies of approximately €900m annually anticipated in 20182 attractive
Strong balance sheet with pro forma combined net cash of €8.1bn at June 30, 2015
(excluding adjustment related to expected conversion of Nokia’s €750m convertible bonds)
EPS accretive in 20172,3
Successful execution track-record on both sides
Positioned to
Deep culture of innovation and common vision for the future succeed
Strong governance allows for efficient integration and acceleration of synergies
Creating an innovation leader in next generation technology and services for an IP connected world
1 Pro-forma net sales as per Form F-4 filing, excluding HERE; 2 Assuming transaction closing Q1 2016; 3 Non-IFRS basis excluding restructuring charges and amortization of intangibles
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Recap of strategic rationale
Changing industry paradigms demanding…
1
Telcos consolidating
Operator
consolidation Increased network sharing
Expanding to quad-play
2 Ubiquitous broadband
Cloud / IP networking
convergence
Convergence Converging:
in multiple
dimensions —Networks (all IP)
—Products (quad-play)
—Experiences (multiple
screens & applications)
3
Faster time to market
Increased efficiency and
Cloud scalability with automation
Enablement for IoT and
Industrial Internet
…an innovation leader in next generation technology and services for an IP connected world
End-to-end portfolio and market leadership
…
Strong market positions
# 1 LTE # 2 IP routing1
# 2 Services # 1 Fixed broadband
# 1 IMS / VoLTE # 1 Device management
Customer Experience
# 1 Subscriber management # 1 Management (CEM)
… with enhanced scale and innovation capabilities
Leader in carrier-grade telecoms Industry leading R&D platform
Carrier revenues, FY14A €bn R&D spend, CY14A €bn
25.1 24.7 23.5
5.0
2 4.7
9.0
3
4.2
4 5 6 7 4.0
Source: Dell’Oro; Infonetics; Internal estimates; Company information
Average FX for calendar and fiscal years applied as appropriate: SEK/EUR 0.1099, CNY/EUR 0.1224
1 IP edge and core service provider markets; 2 Calendar year 2014A; USD/EUR FX 0.7539; 3 Excludes HERE; 4 Ericsson Group revenues 2014A;
5 Pro-forma revenues as per Form F-4 filing, excluding HERE; 6 Carrier business revenues; 7 Based on disclosed mid-point of 25-27% service provider revenues as per Cisco Q4’2014 earnings call transcript; USD/EUR FX 0.7351
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Complementary geographic presence strengthening global footprint
2014A net sales1, €bn
Combined 7.3
6.4
4.6
5.8 2.9
1.3 2.7
1.3 2.1 1.7
3.4 3.3 1.0 0.7
1.6 1.4 1.0 1.0
North Europe Asia-Pacific / Greater Middle East & Latin America
America Japan / India China Africa
Nokia Group1
LatAm
MEA 9%
9% Europe
29%
Greater
China
12%
North
America APJ / India
13% 28%
Alcatel-Lucent Group
MEA LatAm2
8% 5%
Greater North
China America
10% 44%
APJ / India
10%
Europe
22%
Combined
LatAm
MEA 7% North
8% America
Greater 30%
China
11%
APJ / India
19% Europe
26%
Source: Company information
1 Based on Pro-forma net sales as per Form F-4 filing, excluding HERE; 2 Includes Caribbean, Central America and South America
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Strong customer support for the combination
Breadth of • “The portfolios complement each other very well.” combined • “The combination of Nokia and Alcatel-Lucent is a smart decision. Alcatel-Lucent is product the leader in transmission and fiber technology…Our fiber operation is handled by portfolio Alcatel-Lucent and, following the combination with Nokia, we expect them to enhance their service quality by taking advantage of Nokia’s capabilities.”
“We are looking for partners that can move quickly with us as we are sourcing and architecting our network.”
Scale to
“The Alcatel-Lucent story will really strengthen Nokia’s portfolio and gives them a deliver quickly unique differentiator in the local market.” and be locally relevant “Alcatel-Lucent’s product lines will strengthen Nokia’s current portfolio. as well as their reach to the North American market…. the strategic fit with us will be higher if the deal goes through.”
Innovation
“(We need) suppliers that (are) innovative and strong, with financial depth. Nokia (will) capabilities bring innovation and financial strength and the combination (will) create a stronger and financial player in the supply chain.” strength
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Agenda
Page
Positioning for the future 4
Strong transaction-related execution 9
Execution of objectives
Timeline and key milestones
A foundation for long-term success 12
Delivering value to our shareholders 17
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On an accelerated timeline due to strong execution of key objectives
Regulatory approvals All required governmental approvals have been received
complete Antitrust clearances obtained in 23 jurisdictions; other regulatory clearances
obtained from 5 regulators
Portfolio alignment Agreed disposal of HERE to AUDI AG, BMW Group and Daimler AG for net proceeds of
ongoing €2.5bn1
Announced planned leadership and organizational structure for combined Nokia and
New leadership Alcatel-Lucent
announced Strong involvement and commitment of combined leadership allows for efficient
integration and acceleration of synergies
Annual operating cost synergies target of €900m2 expected to be achieved one year
Synergies target earlier (in 2018) than initially announced
accelerated Rigorous approach to determination of synergies, planning and integration
Attractive c. €4bn shareholder distribution plan announced
Strong and efficient Significant deleveraging of c. €3bn, with interest bearing liabilities reduced by c. €2bn
capital structure and debt like items by c. €1bn
Long-term target to re-establish investment grade credit rating
On track for closing in Q1 2016
1 The transaction values HERE at an enterprise value of €2.8bn with a normalized level of working capital. Upon closing, Nokia estimates that it will receive net proceeds of slightly above €2.5bn, as the purchaser would be compensated for certain defined liabilities of HERE currently expected to be slightly below €300m as part of the transaction; 2 Relative to the combined non-IFRS projected results of Nokia and Alcatel-Lucent for full year 2015
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Indicative transaction timeline and key events
Dec 23, 2015
Apr 15, 2015 Oct 7, 2015 Nov 18, 2015 Expiration of initial
New leadership Launch of initial offer offer period Offer settlement settlement date post of
announced period in France and January coupon for
to combine the United States 2018 OCEANE holders
Aug 28, 2015 French Oct 21, Foreign 2015 Nov 19, 2015 c. Jan 7, 2016 c. Feb 3, 2016
MoU signed with Huaxin Investment Approval Admission of Expected settlement Expiration of
on JV between Nokia received—Receipt of shares existing for Nokia trading date and delivery of reopened offer
China & Alcatel-Lucent all key regulatory on Euronext Paris new Nokia shares
Shanghai Bell approvals
Announcement Regulatory approvals Initial Offer period Reopened Offer
period1
Nov 12, 2015 c. Jan 14, 2016
AMF clearance of c. Jan 5, 2015 Offer reopened
Jun 16 / Jul 24, 2015 Oct 19, 2015 French offer Expected formal
Receipt of United MOFCOM approval publication of final
States DoJ and EU received offer results by AMF c. Feb 8, 2016
commission approvals AMF publishes the
results of the
Oct 29, 2015 reopened offer
Filing of French
Sept 14, 2015 offer with the Dec 2, 2015 c. Jan 8, 2016
CFIUS approval received AMF Nokia EGM to vote on Listing and admission to
the proposed trading of new Nokia shares on
combination Nasdaq Helsinki, Euronext
Paris and NYSE (ADS)
Note: Timeline not to scale
1 Offer reopened if Nokia owns over 50% but under 95% of Alcatel-Lucent’s share capital and voting rights after the initial offer period (subject to satisfaction or waiver of the minimum tender condition)
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Agenda
Page
Positioning for the future 4
Strong transaction-related execution 9
A foundation for long-term success 12
Business groups and operational model
Integration preparedness
Leadership
Delivering value to our shareholders 17
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Business groups organized to achieve clear market leadership, offer customers end-to-end expertise and maximize focus on innovation
Networking Technologies
Mobile IP / Optical Applications
Networks Networks & Analytics Fixed Networks Technologies
Samih Elhage Basil Alwan Bhaskar Gorti Federico Guillén Ramzi Haidamus
President President President President President
Mobile IP Routing OSS Fixed Patent licensing
SRAN, LTE Edge Routing Fiber
5G Core Routing Cloud Stack Copper Technology
SmallCells & WiFi Access & Aggregation Orchestration Home devices licensing
Cloud RAN
Antennas Packet Core E2E systems Maintenance mode fixed Brand licensing
Public Safety GGSN, SGSN, MME (e.g. perfect voice) Incubation
• EPC Gateway Security
Airframe Services Industry leading patent
Infrastructure SDN (incl. SAM) Payment • Deployment2 portfolio
Microwave transport • Maintenance
Nuage SDN1 Analytics • Professional Services
Partnering BU—• Datacenter automation, • CEM/ DEM
mobile-attached VNS Partnering BU— Products Services
Core functions Optical transport Value add/SW solutions
SDM Long haul Core functions
IMS/VoLTE Metro Policy and charging
Element Mgmt
3GCore Video & CDN IoT platform
Services Services Services
Deployment2 Deployment2 Deployment2
Maintenance Maintenance Maintenance
Professional Services Professional Services Professional Services
Systems integration Global services delivery Sales organization Integration and transformation office
1 Includes Enterprise Networking
2 Product-attached deployment services relevant for the respective BG, incl. E&I, Network Build & Implementation, and SIOP
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Operating model for each business group optimized for market success, clear accountability and transparent performance reporting
Business groups Operating model
Mobile • Targeting scale and efficiency with ongoing cost improvement
Networks • Underpinned by best-in-class quality and technology
IP / Optical • Invest in growth and scale
Networks • To serve as an incubator for future technologies
Networks • Focus on emerging technologies
Applications
& Analytics • and Platform improved to develop security IoT capabilities, the cloud layer, virtualization
Fixed • Focus on extreme efficiency
Networks • Selective investments in growth opportunities
• Standalone entity for incubating and licensing new technologies
• Targeted growth areas typically outside networks infrastructure
Technologies • Continued own innovation, product development and go-to-
Technologies market operations
2014 Combined pro forma net sales1
€24.7bn
2014 Combined addressable market
€130bn
Market growth rate2
3.5%
1 Pro-forma net sales as per Form F-4 filing, excluding HERE; 2 Estimated compounded annual growth rate 2014-2019E
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Integration preparedness focused on addressing key risks and minimizing disruption
Focus areas Objectives
Ensuring customer focus and minimizing
Customer sales channel disruption
interface Joint go-to-market approach and
coordinated touchpoints
Product Create joint portfolios
portfolio Minimize roadmap disruption
Existing Minimize disruption for operators by
installed base enabling Nokia and Alcatel-Lucent radio
access products to work together
Synergies Establish targets and clear accountability
realization Maximize organizational readiness at closing
Key targeted actions
Single customer interface and full sales order visibility including combined orders
Cross selling for selected customers enabled
Unify, align, and bundle portfolios where necessary to present detailed joint portfolios to customers
Product portfolio plan including roadmaps, sales material, pricing, Product Data Management (‘PDM’) data, and associated capacity plan
Drive CPRI interface readiness to minimize need for equipment swaps
Detailed joint account approach for prioritized accounts with overlapping portfolios
Accountability for synergy targets allocated to responsible units
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Exceptional leadership with deep industry expertise
Rajeev Suri
President & CEO
20 / 24
Business groups
Mobile Networks IP/Optical networks Applications & Analytics Fixed Networks Technologies
Samih Elhage Basil Alwan Bhaskar Gorti Federico Guillén Ramzi Haidamus
President President President President President
3 / 25 12 / 17 1 / 11 232 / 27 1 / 13
Functional groups
Timo Ihamuotila Ashish Chowdhary Marc Rouanne
CFO Chief Customer Operations Officer Chief Innovation & Operating Officer
19 / 19 12 / 25 184 / 27
Hans-Jürgen Bill Kathrin Buvac Barry French Maria Varsellona
Chief Human Resources Officer Chief Strategy Officer Chief Marketing Officer Chief Legal Officer
82 / 21 82 / 15 9 / 95 2 / 26
Years at Nokia or Alcatel-Lucent / Years in Telco industry
1 More than 20 years of software experience; 2 Time in acquired companies is excluded from time at Nokia / Alcatel-Lucent;
3 With 20 years of digital media experience; 4 Includes 7 years at Nokia and 11 years at Alcatel-Lucent;
5 With 25 years of marketing and communications experience; 6 With 21 years of legal experience
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Agenda
Page
Positioning for the future 4
Strong transaction-related execution 9
A foundation for long-term success 12
8
Delivering value to our shareholders 17
Alcatel-Lucent governance plan
Acceleration of synergy target
Capital structure optimization and shareholder distribution program
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Alcatel-Lucent governance plan and operational objectives
Assuming successful closing of the offer with Nokia owning at a minimum over 50% of share capital and voting rights in Alcatel-Lucent, Nokia would take the below actions as soon as possible following closing
Nokia intends to propose changes to the composition of Alcatel-Lucent’s Board of
Changes to Alcatel-Lucent Directors as soon as possible
Board of Directors Composition to reflect new shareholder structure and in particular the ownership
level of Nokia
Provide one face to each customer in terms of account leaders and customer teams
Initiate integration and Harmonization of operations and customer facing interactions
drive operational readiness Implementation of coordinated customer support processes
Joint product portfolios and go-to market strategy
One integrated governance model
Clear operating model Key Nokia principles implemented
Interim governance structured to achieve Nokia’s strategic objectives with greater than
50% fully diluted share ownership of Alcatel-Lucent
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Acceleration of realization of operating cost synergies
€900m synergy target to be achieved a year earlier in 2018
Near-term opportunity
Products & Streamlining of overlapping products and services, particularly
services within the planned Mobile Networks business group
Sales
operations Rationalization of regional and sales organizations
Overhead Rationalization of overhead, particularly within manufacturing,
supply-chain, real estate and information technology
Central costs Reduction of central function and public company costs
Procurement Procurement efficiencies, given the combined company’s
expanded purchasing power
Long-term implications
Structural cost advantage
Execution excellence culture
Long-term investments to lead next wave of technological change
Annual operating cost savings of €900m to be achieved on a full year basis in 2018
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Attractive shareholder distribution plan and capital structure optimisation
Shareholder distribution plan 2016/2017
Approximately €4bn of capital return planned
- Combination of special and ordinary dividends
- Two year share repurchase program
Conditional on shareholder approval at 2016 AGM
Subject to the closing of the Alcatel-Lucent and HERE transactions as well as the conversion of all Nokia and Alcatel-Lucent convertible bonds
€ per
Nokia
€bn share
c. €0.65
4.5 0.75
4.0 c. €4bn / share
3.5 0.60
Share buy back
3.0 1.5 2016-171 0.25
0.45
2.5
2.0 0.9 Ordinary dividend at least
20171 0.15 0.30
1.5 Special dividend
0.6 0.10
1.0 20161 0.15
0.5 0.9 Ordinary dividend at least
20161 0.15
0.0 0.00
€ billion € per share
Deleveraging and capital structure
De-leveraging of approximately €3bn planned
- Reduction of interest bearing liabilities by approximately €2bn over two years
- Reduction of debt-like items by approximately €1bn in 2016
Capital structure enhancements designed to put the combined group on a clear path towards an investment grade credit rating which would further affirm Nokia’s competitive strength
Committed to effective deployment of capital to drive long-term value creation
- Strong balance sheet and resources to enable investments in next generation solutions
1 Figures approximate and subject to change
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A transformational combination driving value for all stakeholders
Unique opportunity to create a new European champion and a global leader in ultra-broadband, IP networking and cloud applications
A leading Finnish company and a leading French company join forces to lead creation of next generation network technology and services
Together, Nokia and Alcatel-Lucent would be the company that is positioned to meet the needs of a convergent, IP connected world
A strategically compelling combination aimed at creating significant value for all stakeholders including shareholders, customers and employees
Committed to completing the transaction in close collaboration with all relevant parties
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Q&A
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