Nokia Corporation Half Year Financial Report July 26, 2018
at 08:00 (CET +1)
Nokia Corporation Financial Report for Q2 and Half Year
2018
First half 2018 as expected; improvement expected in Nokia's
Networks business in second half 2018
- Full year 2018 Nokia-level guidance reiterated
This is a summary of the Nokia Corporation financial report for
Q2 and half year 2018 published today. The complete financial
report for Q2 and half year 2018 with tables is available at
www.nokia.com/financials. Investors should not rely on summaries of
our financial reports only, but should review the complete
financial reports with tables.
FINANCIAL HIGHLIGHTS
- Net sales in Q2 2018 were EUR 5.3bn, compared to EUR 5.6bn in
Q2 2017. On a constant currency basis, net sales would have been
down 1%.
- Non-IFRS diluted EPS in Q2 2018 was EUR 0.03, compared to EUR
0.08 in Q2 2017. Reported diluted EPS in Q2 2018 was negative EUR
0.05, compared to negative EUR 0.07 in Q2 2017.
- In the second quarter, net cash and current financial
investments decreased by approximately EUR 2.0 billion, primarily
due to two expected items: the payment of the dividend of
approximately EUR 940 million; and the payment of employee
incentives related to Nokia's business performance in 2017, which
was the primary driver of the decrease in liabilities within net
working capital of approximately EUR 600 million.
Nokia's Networks business net sales were EUR 4.7bn, with
operating profit of EUR 69mn
- Our backlog was strong at the end of Q2, and we continue to
expect commercial 5G network deployments to begin near the end of
2018.
- Continued progress was made in Q2 with our strategy to
diversify and grow by targeting attractive adjacent markets.
Strong momentum continued with large enterprise vertical and
webscale customers, with double-digit year-on-year growth in net
sales.
- Momentum in our end-to-end strategy continued, with
approximately 40% of our sales pipeline now comprised of solutions,
products and services from multiple business groups.
Nokia Technologies net sales were EUR 361mn, with operating
profit of EUR 292mn
- Strong track record maintained, with 23% year-on-year growth in
recurring licensing net sales and 27% year-on-year operating profit
increase in Q2, primarily related to license agreements entered
into in 2017.
- Nokia Technologies continued to make good progress on new
licensing agreements; no major agreements were announced in
Q2.
Outlook
- Nokia reiterates full year 2018 Nokia-level guidance and
remains on target to deliver EUR 1.2 billion of recurring annual
cost savings in full year 2018.
- In its Networks business, Nokia expects improving market
conditions in the second half of 2018, with particular acceleration
in the fourth quarter in North America. Results in 2018 and over
the longer term are expected to be influenced by: a) our ability to
scale our supply chain operations to meet increasing demand; b)
recovery actions to address increased price pressure; and c) the
timing of completions and acceptances of certain projects,
particularly related to 5G.
- Nokia continues to see opportunities to build on its track
record in Nokia Licensing within Nokia Technologies and drive a
compound annual growth rate of approximately 10% for recurring net
sales over the 3-year period ending 2020.
- Please refer to the full details and other targets in the
Outlook section of this press release.
| Second quarter and January-June 2018 non-IFRS
results. Refer to note 1, "Basis of Preparation" and note 15,
"Performance measures", in the "Financial statement information"
section for further details1 |
| EUR
million (except for EPS in EUR) |
Q2'18 |
Q2'17 |
YoY change |
Constant currency YoY change |
Q1-Q2'18 |
Q1-Q2'17 |
YoY change |
Constant currency YoY change |
| Net sales
(non-IFRS) |
5
318 |
5
629 |
(6)% |
(1)% |
10
246 |
11
017 |
(7)% |
0% |
|
Nokia's Networks business |
4
693 |
4
971 |
(6)% |
0% |
9
018 |
9
873 |
(9)% |
(1)% |
|
Nokia Technologies |
361 |
369 |
(2)% |
(2)% |
726 |
616 |
18% |
19% |
|
Group Common and Other |
278 |
307 |
(9)% |
(4)% |
530 |
562 |
(6)% |
(1)% |
| Gross profit
(non-IFRS) |
2
038 |
2
350 |
(13)% |
|
3
979 |
4
546 |
(12)% |
|
| Gross margin %
(non-IFRS) |
38.3% |
41.7% |
(340)bps |
|
38.8% |
41.3% |
(250)bps |
|
| Operating profit
(non-IFRS) |
334 |
574 |
(42)% |
|
573 |
915 |
(37)% |
|
|
Nokia's Networks business |
69 |
406 |
(83)% |
|
112 |
730 |
(85)% |
|
|
Nokia Technologies |
292 |
230 |
27% |
|
565 |
346 |
63% |
|
|
Group Common and Other |
(27) |
(62) |
(56)% |
|
(105) |
(161) |
(35)% |
|
| Operating margin %
(non-IFRS) |
6.3% |
10.2% |
(390)bps |
|
5.6% |
8.3% |
(270)bps |
|
| Financial income and
expenses (non-IFRS) |
(84) |
(63) |
33% |
|
(200) |
(144) |
39% |
|
| Income taxes
(non-IFRS) |
(106) |
(74) |
43% |
|
(143) |
(122) |
17% |
|
| Profit for the period
(non-IFRS) |
139 |
441 |
(68)% |
|
223 |
644 |
(65)% |
|
|
Profit attributable to the equity holders of the parent
(non-IFRS) |
144 |
449 |
(68)% |
|
230 |
646 |
(64)% |
|
|
Non-controlling interests (non-IFRS) |
(4) |
(9) |
|
|
(7) |
(2) |
|
|
| EPS, EUR
diluted (non-IFRS) |
0.03 |
0.08 |
(63)% |
|
0.04 |
0.11 |
(64)% |
|
| |
|
|
|
|
|
|
|
|
| Second quarter and January-June 2018 reported
results. Refer to note 1, "Basis of Preparation" and note 15,
"Performance measures", in the "Financial statement information"
section for further details1 |
| EUR
million (except for EPS in EUR) |
Q2'18 |
Q2'17 |
YoY change |
Constant currency YoY change |
Q1-Q2'18 |
Q1-Q2'17 |
YoY change |
Constant currency YoY change |
| Net sales |
5
313 |
5
619 |
(5)% |
(1)% |
10
237 |
10
996 |
(7)% |
0% |
|
Nokia's Networks business |
4
693 |
4
971 |
(6)% |
0% |
9
018 |
9
873 |
(9)% |
(1)% |
|
Nokia Technologies |
361 |
369 |
(2)% |
(2)% |
726 |
616 |
18% |
19% |
|
Group Common and Other |
278 |
307 |
(9)% |
(4)% |
530 |
562 |
(6)% |
(1)% |
|
Non-IFRS exclusions |
(5) |
(11) |
(55)% |
|
(9) |
(21) |
(57)% |
|
| Gross profit |
1
860 |
2
236 |
(17)% |
|
3
666 |
4
361 |
(16)% |
|
| Gross margin % |
35.0% |
39.8% |
(480)bps |
|
35.8% |
39.7% |
(390)bps |
|
| Operating loss |
(221) |
(45) |
391% |
|
(557) |
(173) |
222% |
|
|
Nokia's Networks business |
69 |
406 |
(83)% |
|
112 |
730 |
(85)% |
|
|
Nokia Technologies |
292 |
230 |
27% |
|
565 |
346 |
63% |
|
|
Group Common and Other |
(27) |
(62) |
(56)% |
|
(105) |
(161) |
(35)% |
|
|
Non-IFRS exclusions |
(555) |
(620) |
(10)% |
|
(1
129) |
(1
088) |
4% |
|
| Operating margin % |
(4.2)% |
(0.8)% |
(340)bps |
|
(5.4)% |
(1.6)% |
(380)bps |
|
| Financial income and
expenses |
(56) |
(287) |
(80)% |
|
(164) |
(433) |
(62)% |
|
| Income taxes |
10 |
(103) |
|
|
104 |
(256) |
|
|
| Loss for the
period |
(271) |
(433) |
(37)% |
|
(625) |
(868) |
(28)% |
|
|
Loss attributable to the equity holders of the parent |
(267) |
(423) |
(37)% |
|
(618) |
(896) |
(31)% |
|
|
Non-controlling interests |
(4) |
(9) |
|
|
(7) |
28 |
|
|
| EPS, EUR diluted |
(0.05) |
(0.07) |
(29)% |
|
(0.11) |
(0.16) |
(31)% |
|
| Net cash
and current financial investments |
2 144 |
3 964 |
(46)% |
|
2 144 |
3 964 |
(46)% |
|
| 1Results
are as reported unless otherwise specified. The financial
information in this report is unaudited. Non-IFRS results exclude
costs related to the acquisition of Alcatel-Lucent and related
integration, goodwill impairment charges, intangible asset
amortization and other purchase price fair value adjustments,
restructuring and associated charges and certain other items that
may not be indicative of Nokia's underlying business performance.
For details, please refer to the non-IFRS exclusions section
included in discussions of both the quarterly and year to date
performance and note 2, "Non-IFRS to reported reconciliation", in
the notes to the Financial statement information in this report.
Change in net sales at constant currency excludes the effect of
changes in exchange rates in comparison to euro, our reporting
currency. For more information on currency exposures, please refer
to note 1, "Basis of Preparation", in the "Financial statement
information" section in this report. |
CEO STATEMENT
Nokia's Q2 2018 results were consistent with our view that the
first half of the year would be weak followed by an increasingly
robust second half. Pleasingly, I am able to confirm that we expect
to deliver 2018 results within the ranges of our annual
guidance.
Our topline started to recover in the second quarter, with sales
in constant currency approximately flat at both Group and Networks
levels; year-on-year constant currency sales growth in three of
five of our Networks business groups and in three out of our six
regions.
Our entry into the enterprise market continued to proceed well
in Q2. Year-on-year sales in constant currency increased
approximately 30%, with strength in both vertical markets and
webscale companies. Nokia Technologies had a very good second
quarter, with recurring licensing revenues up very strongly and
operating profit up at excellent levels compared to Q2 last
year.
Our view about the acceleration of 5G has not changed and we
continue to believe that Nokia is well-positioned for the coming
technology cycle given the strength of our end-to-end portfolio.
Our deal win rate is very good, with significant recent successes
in the key early 5G markets of the United States and China.
The installed base of our superb high-capacity AirScale product,
which enables customers to quickly upgrade to 5G without a hardware
swap, is growing fast. And, the strength of our end-to-end
portfolio remains a differentiator. When you look at our sales
pipeline, 40% of it is now comprised of end-to-end deals. That is
the highest level we have seen to-date.
Business and regional mix continued to have some impact on gross
margin, as did near-term actions of a small number of large
customers funding their 5G entry within their existing budget
plans.
We expect market conditions to improve further in the second
half, particularly in Q4, Nokia's seasonally strongest quarter, and
as 5G accelerates significantly.
Rajeev Suri President and CEO
OUTLOOK
|
|
Metric |
Guidance |
Commentary |
| Nokia |
Non-IFRS operating margin |
9-11% for full year 2018 and 12-16% for full year 2020 |
Nokia 's guidance for significant improvement between
full year 2018 and full year 2020 is primarily due to expectations
for: Improved results in Nokia's Networks business, which are
detailed below; Improved results in Nokia Technologies, which are
detailed below; and Lower Nokia support function costs within
Nokia's Networks business and Group Common and Other. |
|
Non-IFRS diluted earnings per share |
EUR 0.23 - 0.27 in full year 2018 and EUR 0.37 - 0.42 in full year
2020 |
| |
Dividend |
Approximately 40% to 70% of non-IFRS EPS on a long-term basis |
Nokia's Board of Directors is committed to proposing a growing
dividend, including for 2018. |
| |
Recurring free cash flow |
Slightly positive in full year 2018 and clearly positive in full
year 2020 |
Recurring free cash flow is expected to improve over the
longer-term, due to lower cash outflows related to restructuring
and network equipment swaps1 and improved operational results over
time. |
| |
Recurring annual cost savings for Nokia, excluding Nokia
Technologies |
Approximately EUR 1.2 billion of recurring annual cost savings in
full year 2018, of which approximately EUR 800 million are expected
from operating expenses1 |
The reference period is full year 2015, in which the combined
operating expenses of Nokia and Alcatel-Lucent, excluding Nokia
Technologies, were approximately EUR 7.3 billion.As a result of
active efforts to drive 5G adoption, and in the interest of our
long-term strategy given the acceleration of 5G, in 2018 we expect
to incur approximately EUR 100 to 200 million of temporary
incremental expenses related to 5G customer trials that will
partially reduce the positive impact from the recurring annual cost
savings. |
| |
Network equipment swaps |
Approximately EUR 1.4 billion of charges and cash outflows in
total1 |
The charges related to network equipment swaps are being recorded
as non-IFRS exclusions, and therefore do not affect Nokia's
non-IFRS operating profit. |
| |
Non-IFRS financial income and expenses |
Expense of approximately EUR 350 million in full year 2018 and
approximately EUR 300 million over the longer-term (This is an
update to earlier guidance of approximately EUR 300 million for
full year 2018) |
Nokia's outlook for non-IFRS financial income and expenses in full
year 2018 and over the longer-term is expected to be influenced by
factors including: Net interest expenses related to
interest-bearing liabilities and defined benefit pension and other
post-employment benefit plans; Foreign exchange fluctuations and
hedging costs; and Expenses related to the sale of
receivables. |
| |
Non-IFRS tax rate |
Approximately 30% for full year 2018 and 25% over the
longer-term |
Nokia's outlook for non-IFRS tax rate for full year 2018 and over
the longer-term is expected to be influenced by factors including
the absolute level of profits, regional profit mix and any further
changes to our operating model.Nokia expects cash outflows related
to taxes to be approximately EUR 400 million in full year 2018 and
approximately EUR 450 million over the longer-term until Nokia's US
or Finnish deferred tax assets are fully utilized.(This is an
update to earlier commentary for cash outflows related to taxes to
be approximately EUR 450 million in full year 2018.) |
|
|
Capital expenditures |
Approximately EUR 700 million in full year 2018 and approximately
EUR 600 million over the longer-term |
Primarily attributable to Nokia's Networks business, and consistent
with the depreciation of property, plant and equipment over the
longer-term. |
| Nokia's Networks business |
Net sales |
Outperform its primary addressable market in 2018 and over the
longer-term |
For Nokia's Networks business, Nokia expects net sales
to outperform its primary addressable market and operating margin
to expand between full year 2018 and full year 2020.Nokia's outlook
for net sales and operating margin for Nokia's Networks business in
2018 and 2020 is expected to be influenced by factors including: An
approximately 1 to 3 percent decline in the primary addressable
market for Nokia's Networks business in full year 2018, compared to
2017, on a constant currency basis; Customer demand for 5G, with
commercial 5G network deployments expected to begin near the end of
2018; Improving market conditions in the second half of 2018, with
particular acceleration in the fourth quarter in North America,
following weakness in the first half of 2018 (This is an update to
earlier commentary for improved market conditions in the second
half of 2018, particularly in North America.); Growth in the
primary addressable market for Nokia's Networks business in 2019
and 2020, on a constant currency basis; Our ability to scale our
supply chain operations to meet increasing demand; Recovery actions
to address increased price pressure, including the ability to
offset price erosion through cost reductions (new commentary); The
timing of completions and acceptances of certain projects,
particularly related to 5G (new commentary); Focus on targeted
growth opportunities in attractive adjacent markets; Building a
strong standalone software business; Improved R&D productivity
resulting from new ways of working and the reduction of legacy
platforms over time; Lower support function costs, including IT and
site costs; Uncertainty related to potential mergers or
acquisitions by our customers; Product and regional mix; and
Competitive and other industry dynamics. |
|
Operating margin |
6-9% for full year 2018 and 9-12% for full year 2020 |
| Nokia Licensing within
Nokia Technologies |
Recurring net sales |
Grow at a compound annual growth rate (CAGR) of approximately 10%
over the 3-year period ending 2020 |
Due to risks and uncertainties in determining the
timing and value of significant patent, brand and technology
licensing agreements, Nokia believes it is not appropriate to
provide annual outlook ranges for Nokia Licensing within Nokia
Technologies. Although annual results are difficult to forecast,
Nokia expects net sales growth and operating margin expansion over
the 3-year period ending 2020.In full year 2017, licensing net
sales were approximately EUR 1.6 billion, of which approximately
EUR 300 million were non-recurring in nature and related to
catch-up net sales for prior years.Nokia's outlook for net sales
and operating margin for Nokia Licensing within Nokia Technologies
is expected to be influenced by factors including: The timing and
value of new patent licensing agreements with smartphone vendors,
automotive companies and consumer electronics companies;
Renegotiation of expiring patent licensing agreements; Increases or
decreases in net sales related to existing patent licensees;
Results in brand and technology licensing; Costs to protect and
enforce our intellectual property rights; and The regulatory
landscape. |
|
|
Operating margin |
Expand to approximately 85% for full year 2020 |
1 For further details related to the cost savings and network
equipment swaps guidance, please refer to the "Cost savings
program" on page 8.
NOKIA IN Q2 2018 - NON-IFRS
FINANCIAL DISCUSSION
The financial discussion included in this financial report of
Nokia's results comprises the results of Nokia's businesses -
Nokia's Networks business and Nokia Technologies, as well as Group
Common and Other. For more information on our reportable segments,
please refer to note 3, "Segment information", in the "Financial
statement information" section in this report.
Year-on-year changes in non-IFRS net sales and non-IFRS
operating profit
Nokia non-IFRS net sales decreased 6% year-on-year. On a
constant currency basis, Nokia non-IFRS net sales would have
decreased 1% year-on-year.
| EUR
million, non-IFRS |
Net sales |
% change |
Gross profit |
(R&D) |
(SG&A) |
Other income and (expenses) |
Operating profit |
Change in operating margin % |
| Networks business |
(278) |
(6)% |
(313) |
5 |
31 |
(60) |
(337) |
(670)bps |
| Nokia Technologies |
(8) |
(2)% |
2 |
24 |
25 |
11 |
62 |
1
860bps |
| Group Common and
Other |
(29) |
(9)% |
(1) |
(3) |
4 |
35 |
35 |
1
050bps |
| Eliminations |
3 |
|
0 |
0 |
0 |
0 |
0 |
|
|
Nokia |
(311) |
(6)% |
(312) |
25 |
60 |
(14) |
(240) |
(390)bps |
On a year-on-year basis, foreign exchange fluctuations had a
negative impact on non-IFRS gross profit, a positive impact on
non-IFRS operating expenses and an approximately neutral net impact
on non-IFRS operating profit in the second quarter 2018.
Year-on-year changes in non-IFRS profit attributable to the
equity holders of the parent
| EUR
million, non-IFRS |
Operating profit |
Financial income and expenses |
Income taxes |
Profit |
Non-controlling interests |
Profit attributable to the equity holders of the parent |
|
Nokia |
(240) |
(21) |
(32) |
(302) |
(5) |
(305) |
Non-IFRS financial income and expenses
The net negative fluctuation in non-IFRS financial income and
expenses was primarily due to the absence of venture fund
distributions. Interest expenses associated with the inclusion of
new items such as costs related to the sale of receivables and
financing elements from customer and other contracts as a result of
the adoption of new IFRS standards in the first quarter 2018 were
offset by lower interest expenses from financing activities.
Non-IFRS income taxes
Increase in non-IFRS tax rate to 43% in the second quarter 2018
was primarily due to regional profit mix. In the second quarter
2017 regional profit mix resulted in an unusually low non-IFRS tax
rate of 14% and in addition, in the second quarter 2018 the
combination of lower absolute level of profit and certain prior
year tax charges increased the non-IFRS tax
rate.
NOKIA IN Q2 2018 - REPORTED
FINANCIAL DISCUSSION
Year-on year changes in net sales and operating
profit
Nokia net sales decreased 5% year-on-year. On a constant
currency basis, Nokia net sales would have decreased 1%
year-on-year.
| EUR
million |
Net Sales |
% change |
Gross profit |
(R&D) |
(SG&A) |
Other income and (expenses) |
Operating profit |
Change in operating margin % |
| Networks business |
(278) |
(6)% |
(313) |
5 |
31 |
(60) |
(337) |
(670)bps |
| Nokia Technologies |
(8) |
(2)% |
2 |
24 |
25 |
11 |
62 |
1
860bps |
| Group Common and
Other |
(29) |
(9)% |
(1) |
(3) |
4 |
35 |
35 |
1
050bps |
| Eliminations |
3 |
|
0 |
0 |
0 |
0 |
0 |
|
| Non-IFRS
exclusions |
6 |
(55)% |
(64) |
23 |
34 |
72 |
65 |
|
|
Nokia |
(306) |
(5)% |
(376) |
49 |
93 |
59 |
(176) |
(340)bps |
Year-on year changes in profit attributable to the equity
holders of the parent
| EUR
million |
Operating profit |
Financial income and expenses |
Income taxes |
Profit |
Non-controlling interests |
Profit attributable to the equity holders of the parent |
|
Nokia |
(176) |
231 |
113 |
162 |
(5) |
156 |
Financial income and expenses
The net positive fluctuation in financial income and expenses
was primarily due to the absence of non-IFRS exclusions related to
Nokia's tender offer to purchase the 6.50% notes due January 15,
2028, the 6.45% notes due March 15, 2029 and the 5.375% notes due
May 15, 2019 and the absence of non-recurring interest expense
resulting from the uncertain tax position related to disposal of
former Alcatel-Lucent railway signaling business to Thales as well
as the release of cumulative exchange differences related to
abandonment of foreign operations and the change in financial
liability to acquire NSB non-controlling interest.
Income taxes
The change in taxes from an expense in the second quarter 2017
to a slight benefit in the second quarter 2018 was primarily due to
absence of non-recurring tax expenses related to the disposal of
the former Alcatel Lucent railway signaling business to Thales and
deferred tax valuation allowance both of which had negative impact
on the second quarter 2017 tax expense.
Non-IFRS exclusions in Q2 2018
Non-IFRS exclusions consist of costs related to the acquisition
of Alcatel-Lucent and related integration, goodwill impairment
charges, intangible asset amortization and purchase price related
items, restructuring and associated charges and certain other items
that may not be indicative of Nokia's underlying business
performance. For additional details, please refer to note 2,
"Non-IFRS to reported reconciliation", in the "Financial statement
information" section in this report.
Cost savings program
The following table summarizes the financial information related
to our cost savings program, as of the end of the second quarter
2018. Balances related to previous Nokia and Alcatel-Lucent
restructuring and cost savings programs have been included as part
of this overall cost savings program as of the second quarter
2016.
| In
EUR million, approximately |
Q2'18 |
| Opening balance of
restructuring and associated liabilities |
830 |
| + Charges in the
quarter |
30 |
| - Cash outflows
in the quarter |
110 |
| = Ending balance
of restructuring and associated liabilities |
750 |
| of which
restructuring provisions |
680 |
| of which other
associated liabilities |
70 |
| |
|
| Total expected
restructuring and associated charges |
1 900 |
| - Cumulative
recorded |
1 490 |
| = Charges
remaining to be recorded |
410 |
| |
|
| Total expected
restructuring and associated cash outflows |
2 250 |
| - Cumulative
recorded |
1 190 |
| = Cash outflows
remaining to be recorded |
1 060 |
The following table summarizes our full year 2016 and 2017
results and future expectations related to our cost savings program
and network equipment swaps.
|
|
Actual |
Actual |
Actual |
Expected amounts for |
|
In EUR million, approximately rounded to the nearest EUR 50
million |
2016 |
2017 |
Cumulative through the end of 2017 |
FY 2018 as of the end of |
FY 2019 and beyond as of the end of |
Total as of the end of |
|
|
|
|
Q1'18 |
Q2'18 |
Q1'18 |
Q2'18 |
Q1'18 |
Q2'18 |
|
Recurring annual cost savings |
550 |
250 |
800 |
400 |
400 |
0 |
0 |
1
200 |
1
200 |
|
- operating expenses |
350 |
150 |
500 |
300 |
300 |
0 |
0 |
800 |
800 |
|
- cost of sales |
200 |
100 |
300 |
100 |
100 |
0 |
0 |
400 |
400 |
|
Restructuring and associated charges |
750 |
550 |
1 300 |
600 |
600 |
0 |
0 |
1
900 |
1
900 |
|
Restructuring and associated cash outflows |
400 |
550 |
950 |
650 |
650 |
650 |
650 |
2
250 |
2
250 |
|
Charges related to network equipment swaps |
150 |
450 |
600 |
650 |
650 |
150 |
150 |
1
400 |
1
400 |
|
Cash outflows related to network equipment swaps |
150 |
450 |
600 |
650 |
650 |
150 |
150 |
1 400 |
1 400 |
On a cumulative basis, Nokia continues to be on track to achieve
the targeted EUR 1.2 billion of recurring annual cost savings in
full year 2018.
RISKS AND FORWARD-LOOKING STATEMENTS
It should be noted that Nokia and its businesses are exposed to
various risks and uncertainties and certain statements herein that
are not historical facts are forward-looking statements, including,
without limitation, those regarding: A) our ability to integrate
acquired businesses into our operations and achieve the targeted
business plans and benefits, including targeted benefits,
synergies, cost savings and efficiencies; B) expectations, plans or
benefits related to our strategies and growth management; C)
expectations, plans or benefits related to future performance of
our businesses; D) expectations, plans or benefits related to
changes in organizational and operational structure; E)
expectations regarding market developments, general economic
conditions and structural changes; F) expectations and targets
regarding financial performance, results, operating expenses,
taxes, currency exchange rates, hedging, cost savings and
competitiveness, as well as results of operations including
targeted synergies and those related to market share, prices, net
sales, income and margins; G) expectations, plans or benefits
related to any future collaboration or to business collaboration
agreements or patent license agreements or arbitration awards,
including income to be received under any collaboration or
partnership, agreement or award; H) timing of the deliveries of our
products and services; I) expectations and targets regarding
collaboration and partnering arrangements, joint ventures or the
creation of joint ventures, and the related administrative, legal,
regulatory and other conditions, as well as our expected customer
reach; J) outcome of pending and threatened litigation,
arbitration, disputes, regulatory proceedings or investigations by
authorities; K) expectations regarding restructurings, investments,
capital structure optimization efforts, uses of proceeds from
transactions, acquisitions and divestments and our ability to
achieve the financial and operational targets set in connection
with any such restructurings, investments, capital structure
optimization efforts, divestments and acquisitions; and L)
statements preceded by or including "believe", "expect",
"anticipate", "foresee", "sees", "target", "estimate", "designed",
"aim", "plans", "intends", "focus", "continue", "project",
"should", "is to", "will" or similar expressions. These statements
are based on management's best assumptions and beliefs in light of
the information currently available to it. Because they involve
risks and uncertainties, actual results may differ materially from
the results that we currently expect. Factors, including risks and
uncertainties that could cause these differences include, but are
not limited to: 1) our strategy is subject to various risks and
uncertainties and we may be unable to successfully implement our
strategic plans, sustain or improve the operational and financial
performance of our business groups, correctly identify or
successfully pursue business opportunities or otherwise grow our
business; 2) general economic and market conditions and other
developments in the economies where we operate; 3) competition and
our ability to effectively and profitably invest in new competitive
high-quality products, services, upgrades and technologies and
bring them to market in a timely manner; 4) our dependence on the
development of the industries in which we operate, including the
cyclicality and variability of the information technology and
telecommunications industries; 5) our dependence on a limited
number of customers and large multi-year agreements; 6) our ability
to maintain our existing sources of intellectual property-related
revenue, establish new sources of revenue and protect our
intellectual property from infringement; 7) our global business and
exposure to regulatory, political or other developments in various
countries or regions, including emerging markets and the associated
risks in relation to tax matters and exchange controls, among
others; 8) our ability to achieve the anticipated benefits,
synergies, cost savings and efficiencies of acquisitions, including
the acquisition of Alcatel Lucent, and our ability to implement
changes to our organizational and operational structure
efficiently; 9) our ability to manage and improve our financial and
operating performance, cost savings, competitiveness and synergies
generally and after the acquisition of Alcatel Lucent; 10) exchange
rate fluctuations, as well as hedging activities; 11) our ability
to successfully realize the expectations, plans or benefits related
to any future collaboration or business collaboration agreements
and patent license agreements or arbitration awards, including
income to be received under any collaboration, partnership,
agreement or arbitration award; 12) Nokia Technologies' ability to
protect its IPR and to maintain and establish new sources of
patent, brand and technology licensing income and IPR-related
revenues, particularly in the smartphone market, which may not
materialize as planned, 13) our dependence on IPR technologies,
including those that we have developed and those that are licensed
to us, and the risk of associated IPR-related legal claims,
licensing costs and restrictions on use; 14) our exposure to direct
and indirect regulation, including economic or trade policies, and
the reliability of our governance, internal controls and compliance
processes to prevent regulatory penalties in our business or in our
joint ventures; 15) our reliance on third-party solutions for data
storage and service distribution, which expose us to risks relating
to security, regulation and cybersecurity breaches; 16)
inefficiencies, breaches, malfunctions or disruptions of
information technology systems; 17) our exposure to various legal
frameworks regulating corruption, fraud, trade policies, and other
risk areas, and the possibility of proceedings or investigations
that result in fines, penalties or sanctions; 18) adverse
developments with respect to customer financing or extended payment
terms we provide to customers; 19) the potential complex tax
issues, tax disputes and tax obligations we may face in various
jurisdictions, including the risk of obligations to pay additional
taxes; 20) our actual or anticipated performance, among other
factors, which could reduce our ability to utilize deferred tax
assets; 21) our ability to retain, motivate, develop and recruit
appropriately skilled employees; 22) disruptions to our
manufacturing, service creation, delivery, logistics and supply
chain processes, and the risks related to our
geographically-concentrated production sites; 23) the impact of
litigation, arbitration, agreement-related disputes or product
liability allegations associated with our business; 24) our ability
to re-establish investment grade rating or maintain our credit
ratings; 25) our ability to achieve targeted benefits from, or
successfully implement planned transactions, as well as the
liabilities related thereto; 26) our involvement in joint ventures
and jointly-managed companies; 27) the carrying amount of our
goodwill may not be recoverable; 28) uncertainty related to the
amount of dividends and equity return we are able to distribute to
shareholders for each financial period; 29) pension costs, employee
fund-related costs, and healthcare costs; and 30) risks related to
undersea infrastructure, as well as the risk factors specified on
pages 71 to 89 of our 2017 annual report on Form 20-F published on
March 22, 2018 under "Operating and financial review and
prospects-Risk factors" and in our other filings or documents
furnished with the U.S. Securities and Exchange Commission. Other
unknown or unpredictable factors or underlying assumptions
subsequently proven to be incorrect could cause actual results to
differ materially from those in the forward-looking statements. We
do not undertake any obligation to publicly update or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
The financial report was authorized for issue by management on
July 25, 2018.
- Nokia plans to publish its third quarter and January-September
2018 results on October 25, 2018.
Media Enquiries: Nokia Communications Tel. +358 (0) 10
448 4900 Email: press.services@nokia.com Jon Peet, Vice President,
Corporate Communications
Investor Enquiries:Nokia Investor RelationsTel. +358 4080
3 4080Email: investor.relations@nokia.com About Nokia We
create the technology to connect the world. Powered by the research
and innovation of Nokia Bell Labs, we serve communications service
providers, governments, large enterprises and consumers, with the
industry's most complete, end-to-end portfolio of products,
services and licensing.
We adhere to the highest ethical business standards as we create
technology with social purpose, quality and integrity. Nokia is
enabling the infrastructure for 5G and the Internet of Things to
transform the human experience www.nokia.com
- Nokia Corporation report for Q2 2018.pdf
Nokia (NYSE:NOK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Nokia (NYSE:NOK)
Historical Stock Chart
From Apr 2023 to Apr 2024
