Automatic translation: Originally published in Finnish 03/08/2026, 10:25 GMT. Give feedback here.

I took a look at Nokia's 1999 annual report, which was written at the turn of the millennium and published in the spring of 2000 at the peak of the dot-com bubble. The old annual report makes for instructive reading in all its arrogance. Many statements turned out to be completely accurate in retrospect. But Nokia was not the agile winner it thought it was, and others stole its thunder. Reading old annual reports provides critical insights into how companies portray things in the best possible light for themselves, and only time will tell how much truth the words hold.

The front cover reads "no limits." The financial development is breathtaking. EBIT grew by +57% to EUR 3.9 billion. Revenue correspondingly increased by +48% to EUR 19.8 billion. The dividend rose by +67% to EUR 0.80. The market capitalization soared to EUR 209 billion by the end of 1999! Return on invested capital climbed to 56%.

Source: Nokia's 1999 annual report.

Growth was furious in both Nokia's network and mobile phone businesses. The figures are embellished with boastful poetry: "The future is limitless

Human imagination is limitless.

Our ability to change is limitless.

Our ability to develop is limitless.

Our desire to achieve is limitless.

Our desire to serve is limitless.

We set our own limits.

There are no other limits."

CEO Jorma Ollila (along with President Pekka Ala-Pietilä—it is also telling that the company had both a CEO and a President) writes about a "new era" in which "we are on the verge of a very significant change" that affects every person and all areas of life. "Through the combination of the Internet and mobility, we are breaking through the boundaries of time and space."

In addition to wireless communication and technology, new applications and features, such as "smart wallets" and "driver-recognizing cars," are just around the corner. 

The uniqueness of the historical moment was correctly identified, but the text positively revels in it, as the authors clearly consider Nokia a winner in this transformation. 

The future is acknowledged as unpredictable, but Nokia's culture would be the right one to sniff out the winds of change, as the CEO's and President's review states: "Our open corporate culture allows for rapid change, tolerates mistakes, and gives people the opportunity to learn and develop. It is based on trust. In addition, we have a clear stance on the direction of development. Our corporate culture and foresight have taken us far."

This is a funny comment in retrospect, because, to my understanding, Nokia precisely lacked trust and an open corporate culture, and thus the above comment did not correspond to reality at all! But there it is, set in stone for the shareholders.

In addition, the annual report shares Nokia's belief that it understands user needs, and thus the company is well-positioned to succeed in change. The ability to adapt is highlighted multiple times to really drive the point home for the reader. And Nokia also had Nokia Ventures Organization, whose task was to develop new services and products for a networked society. "The unit's task is to anticipate future prospects 3–5 years ahead," wrote the unit's director at the time. Furthermore, the unit had a fund in California chasing new business ideas, which had invested in companies such as eVoice, which develops internet communication solutions, and Pogo.com, which developed online family games. 

Surely no one can beat such an innovation machine? The annual report also envisioned an "information-based economic system where growth can be explosive" because the most important raw material, "human imagination," is inexhaustible. 

Nokia's own research and development budget had more than quadrupled in five years to almost EUR 1.8 billion. For a company with such boundless potential, one could probably pay a hefty price on the stock market, as contemporaries thought based on stock prices. 

EPS was EUR 2.24, and there were 1.15 billion shares. Based on the market capitalization, the share price at the time was EUR 182 per share (with the then-current number of shares; the share was later split four-for-one in April 2000), and the P/E ratio was approximately 80x. The P/S ratio was over 10x, which is not at all an unusual figure for today's reader when considering leading technology companies. 

The five-year development presented in the annual report, from 1995–1999, is indeed astounding. Nokia Group's revenue in 1995 would have been approximately EUR 6 billion, whereas now it was already approaching the EUR 20 billion mark. Tripling in just five years! 

Source: Nokia's 1999 annual report.

If the numbers had tripled again in five years, EPS would probably have been over EUR 6 and the P/E "only" 30x.

In addition, the company's leadership position was further strengthened in a explosively growing market. In 1998, Nokia had become the world's largest mobile phone company. The market grew by 60% in 1999. The unit sales of Nokia phones grew by 92%. In addition to new phone buyers, a "re-purchase market" was emerging. "A mobile phone is a device that accompanies its user everywhere," as stated in the annual report.  

The annual report is a prime example of hubris and almost fictional writing for shareholders when it comes to comments on adaptability and culture. But the business numbers are compelling. The company was also right about many things concerning visions of wireless communication, breaking down communication barriers, etc. Yet, with hindsight, we know that the share was in a total bubble, and Nokia was not practically the visionary it claimed to be. Don't believe all management's stories, as I discussed in my previous article.