TIDMNOKIA
Nokia Corporation
Financial Statement Release
4 February 2021 at 08:00 (CET +1)
Nokia Corporation Financial Report for Q4 and Full Year 2020
Solid margin performance driven by customer demand in North America
-- 5% year-on-year decrease in reported net sales in Q4, primarily due to
Mobile Access, as declines in network deployment and planning services
were partially offset by growth in radio access products
-- 1% growth in constant currency net sales in Q4
-- Continued improvements in our Mobile Access portfolio; strengthening
roadmaps, reducing product costs and improving product performance;
commitment to invest in R&D to drive product leadership
-- Increase in Mobile Access gross margin in Q4, primarily driven by
improved 5G gross margin, partially offset by a project-related loss
provision
-- Positive operating profit, on a reported basis, in Q4 and full year 2020
-- Non-IFRS operating profit in Q4 benefited by approximately EUR 250
million, due to the timing of revenue recognition and a net positive
fluctuation in Nokia's venture fund investments
-- Strong free cash flow in Q4 and full year 2020 benefited from an early
customer payment of approximately EUR 0.5 billion, which was expected in
Q1 2021
-- Derecognized EUR 2.9 billion of Finnish deferred tax assets, which are
not lost
-- Reiterated outlook for 2021 comparable operating margin of 7-10% and
provided new outlook for net sales and free cash flow
-- Board does not propose a dividend or dividend authorization for the
financial year 2020
This is a summary of the Nokia Corporation financial report for Q4 and
full year 2020 published today. The complete financial report for Q4 and
full year 2020 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.
PEKKA LUNDMARK, PRESIDENT AND CEO, ON Q4 AND FULL YEAR 2020 RESULTS
Nokia delivered a solid Q4 to end 2020 at the high end of our Outlook
range. We saw healthy gross margin and operating margin performance for
both Q4 and full year 2020, supported by a regional mix shift towards
the higher margin North America region and by our ongoing R&D efforts to
enhance product quality and cost competitiveness.
From a business group perspective, in Q4 and full year 2020, our gross
margin improvement was primarily driven by Networks, as was our full
year operating margin performance. In Q4, our operating profit
performance benefited by approximately EUR 250 million from two
unexpected, yet significant drivers: a timing benefit of approximately
EUR 150 million as we recognized net sales at the very end of the
quarter, which we had expected in 2021; and we had a net positive
fluctuation in Nokia's venture fund investments of approximately EUR 100
million.
The healthy close to the year does not change our earlier communicated
view for Nokia-level operating margin expected in 2021.
Net sales for Q4 were down 5% on a reported basis and up 1% in constant
currency and for full year 2020 they were down 6% on a reported basis
and down 4% in constant currency.
Nokia delivered strong cash performance in Q4 and full year 2020,
benefitting from a large customer payment that had been expected in Q1
2021, marking the third consecutive quarter of positive free cash flow.
Additionally, our liquidity position continues to be solid.
Financial improvement in Mobile Access was clear in both Q4 and full
year 2020 results, reflecting our ongoing efforts to strengthen the
competitiveness and cost position of our mobile radio products. Overall,
we saw growth in radio access products in Q4 and full year 2020, with
growth in 5G partially offset by decreases in legacy radio access
products.
5G gross margin increased due to product cost reduction, partly helped
by higher ReefShark shipment volumes. Our aim was to be above 35% for
our KPI on shipments of our "5G Powered by ReefShark" portfolio; we
ended the year at 43% and we remain on track to realize 70% by the end
of 2021. This underlines the ongoing progress with our Mobile Networks
turnaround and, as I said in Q3, we will invest whatever it takes to win
in 5G. Completing the turnaround in Mobile Networks remains our top
priority for 2021, and these visible signs of progress give me
confidence that we are on the right track but there is still work to be
done.
Our Enterprise business delivered another good set of results giving a
solid foundation to build on. Q4 Enterprise net sales were up 1% in
reported and 5% in constant currency. For full year 2020, they were up
11% in reported and 14% in constant currency, reflecting our leadership
position in many areas, including in private wireless. We announced key
partnerships with AT&T and Verizon for private wireless and won 79 new
customers in Q4. We now have 260 private wireless customers. Public
sector demand remains robust and we announced a US federal government
cyber deal after the quarter end in mid-January.
At the end of 2020, we announced a new operating model to better align
us with the needs of our customers and to better maintain and achieve
technology leadership in the areas where we choose to compete.
Pleasingly we already have strong technology leadership positions in
many key areas of our new business groups. In Network Infrastructure we
have industry-leading FP4-based products and in Cloud and Network
Services we are jointly developing transformational cloud-native 5G core
solutions for CSPs and Enterprise customers. In our Mobile Networks
business, together with Elisa and Qualcomm, we hold the worldwide 5G
speed record.
These are encouraging results, however, as I said in Q3, we expect 2021
to be challenging, a year of transition, with meaningful headwinds due
to market share loss and price erosion in North America.
Additionally, as I said, delivering on our new operating model for a
strong and sustainable long-term business requires us to make further 5G
R&D investments in 2021, meaning we will sacrifice some short-term
margin to ensure leadership in 5G.
Considering these elements, we maintain our comparable operating margin
outlook for 2021 and -- as new items -- give an outlook for net sales
and free cash flow for 2021. As previously stated, we intend to provide
a long-term outlook latest at Capital Markets Day on March 18.
Regarding dividend, we are pleased with Nokia's recent operational
performance and satisfied that we have strengthened our cash position.
However, with the focus on increased investments in 5G and strategic
areas, while continuing to establish a track record of sustainable cash
generation, the Board does not propose a dividend or dividend
authorization for the financial year 2020. We intend to provide an
update on our dividend policy latest at Capital Markets Day.
We took important steps in 2020 to accelerate roadmaps, improve
execution and create a new way of working, which will enable Nokia to
return to a sustainable long-term financial performance. We know we have
our work cut out for us in 2021, but the new Group Leadership Team has
hit the ground running. As announced earlier, we will go deep into each
of our business groups at our Capital Markets Day to discuss specific
targets and action plans.
I want to conclude by thanking everyone at Nokia. This has been a year
of incredible change where our personal resilience as well as technology
has been tested like never before. I am extremely proud of our team,
their commitment and their achievements. Thank you.
NOKIA FINANCIAL RESULTS
Constant Constant
EUR million (except YoY currency YoY currency
for EPS in EUR) Q4'20 Q4'19 change YoY change Q1-Q4'20 Q1-Q4'19 change YoY change
---------------------- ------- ----- -------- ----------- -------- -------- ------ -----------
Net sales 6 568 6 903 (5)% 1% 21 867 23 315 (6)% (4)%
Networks 5 040 5 439 (7)% (2)% 16 865 18 209 (7)% (5)%
Nokia Software 864 870 (1)% 5% 2 658 2 767 (4)% (1)%
Nokia Technologies 382 376 2% 3% 1 402 1 487 (6)% (6)%
Group Common and
Other 292 231 26% 26% 983 952 3% 2%
Non-IFRS
exclusions (1) 1 (3) (29)
Eliminations (8) (13) (38) (71)
Gross margin %(1) 39.2% 38.5% 70bps 37.6% 35.4% 220bps
Operating
profit/(loss) 475 803 (41)% 918 485 89%
Networks 533 671 (21)% 964 665 45%
Nokia Software 266 304 (13)% 511 589 (13)%
Nokia Technologies 317 320 (1)% 1 164 1 239 (6)%
Group Common and
Other (27) (161) (525) (490)
Non-IFRS
exclusions (615) (331) (1 196) (1 518)
Operating margin % 7.2% 11.6% (440)bps 4.2% 2.1% 210bps
Net sales (non-IFRS) 6 569 6 903 (5)% 1% 21 870 23 344 (6)% (4)%
Gross margin %
(non-IFRS) 41.8% 40.0% 180bps 39.0% 36.5% 250bps
Operating profit
(non-IFRS) 1 090 1 134 (4)% 2 114 2 003 6%
Operating margin %
(non-IFRS) 16.6% 16.4% 20bps 9.7% 8.6% 110bps
------- ----- -------- -------- -------- ------
Financial income and
expenses 29 (15) (106) (341) (69)%
Income taxes (3 131) (246) (3 255) (138)
Profit/(loss) for the
period (2 608) 563 (2 421) 18
EPS, diluted (0.46) 0.10 (0.43) 0.00
Financial income and
expenses (non-IFRS) (13) (46) (72)% (184) (337) (45)%
Income taxes
(non-IFRS) (286) (288) (1)% (488) (448) 9%
Profit for the period
(non-IFRS) 811 821 (1)% 1 464 1 230 19%
EPS, diluted
(non-IFRS) 0.14 0.15 (7)% 0.26 0.22 18%
------- ----- -------- -------- -------- ------
(1) In Q4 2020, Nokia reclassified certain items of income and expenses from other operating income
and expenses to the functions. The comparative reported results for Q4'19 and Q1-Q4'19 have been
revised accordingly. Refer to note 1, "Basis of preparation" in the "Financial statement information"
section for details.
Results are as reported and relate to continuing operations unless otherwise
specified. The financial information in the Nokia Corporation Financial
Report for Q4 and full year 2020 is unaudited. Non-IFRS results exclude
intangible asset amortization and other fair value adjustments, goodwill
impairments, restructuring related charges and certain other items affecting
comparability. For details, please refer to note 2, "Non-IFRS to reported
reconciliation", in the notes to the Financial statement information
in Nokia Corporation Financial Report for Q4 and full year 2020. 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 Nokia Corporation
Financial Report for Q4 and full year 2020.
Net sales
In Q4 2020, reported net sales decreased 5%, primarily driven by lower
net sales in Mobile Access, where a decline in network deployment and
planning services was partially offset by growth in 5G radio access
products. On a constant currency basis, Nokia net sales increased 1% in
Q4 2020. In full year 2020, reported net sales decreased 6%, primarily
due to network deployment and planning services in Mobile Access. In
Nokia Enterprise, we continued to make great progress in full year 2020
and delivered 11% year-on-year growth in reported net sales. On a
constant currency basis, Nokia net sales decreased 4% in full year 2020.
Gross margin
Reported gross margin in Q4 2020 was 39.2%, compared to 38.5% in Q4
2019. Non-IFRS gross margin was 41.8%, compared to 40.0% in Q4 2019. The
improvement in gross margin was primarily driven by Mobile Access, where
strong 5G gross margin expansion was partially offset by a
project-related loss provision. To a lesser extent, our Q4 2020 gross
margin performance was affected by mix shifts, with a higher proportion
of Group Common and Other, as well as a decline in Nokia Software. In
full year 2020, reported gross margin was 37.6%, compared to 35.4% in
full year 2019. Non-IFRS gross margin was 39.0%, compared to 36.5% in
full year 2019.
Operating profit
In Q4 2020, our non-IFRS and reported operating profit performance was
positively affected by approximately EUR 250 million from two
significant drivers: a timing benefit, as we recognized net sales at the
very end of the quarter, which we had expected in 2021, and a net
positive fluctuation in Nokia's venture fund investments. Our non-IFRS
and reported diluted EPS benefited by approximately EUR 0.035 from these
items.
Earnings per share
Non-IFRS diluted EPS in Q4 2020 was EUR 0.14, compared to EUR 0.15 in Q4
2019, primarily due to lower operating profit, partially offset by a net
positive fluctuation in financial income and expenses. In full year
2020, non-IFRS diluted EPS was EUR 0.26, compared to 0.22 in full year
2019.
Reported diluted EPS in Q4 2020 was negative EUR 0.46, compared to EUR
0.10 in Q4 2019. The change was primarily driven by a net negative
fluctuation in income taxes related to the EUR 2.9 billion derecognition
of Finnish deferred tax assets and, to a lesser extent, lower operating
profit, partially offset by a net positive fluctuation in financial
income and expenses. In full year 2020, reported diluted EPS was
negative EUR 0.43, compared to 0.00 in full year 2019. The derecognition
was required due to a regular assessment of our ability to utilize the
tax assets in Finland in the foreseeable future that is done primarily
based on our historical performance. These tax assets are not lost, and
the derecognition can be reversed. They can still be utilized in the
taxation and the derecognition is not expected to affect the overall
taxation of the Nokia Group or its cash taxes. For further details on
the derecognition of Finnish deferred tax assets, please refer to note
6, "Deferred taxes" in the "Financial statement information" section in
Nokia Corporation Financial Report for Q4 and full year 2020.
Cash performance
Q4 2020 was the third quarter in a row of positive free cash flow.
During Q4 2020, net cash increased by approximately EUR 0.6 billion,
resulting in an end-of-quarter net cash balance of approximately EUR 2.5
billion. During Q4 2020, total cash increased by approximately EUR 0.4
billion, resulting in an end-of-quarter total cash balance of
approximately EUR 8.1 billion. Strong cash performance in Q4 and full
year 2020 benefited from an early customer payment of approximately EUR
0.5 billion, which was expected in Q1 2021.
COVID-19
COVID-19 resulted in a net sales impact of approximately EUR 200 million
in full year 2020, with the majority of these net sales expected to be
shifted to future periods, rather than being lost. In addition, we had a
temporary benefit of approximately EUR 250 million due to lower travel
and personnel expenses related to COVID-19.
DIVID
Beginning with the distribution for the financial year 2018, Nokia
started paying dividends in quarterly instalments. On October 24, 2019,
the Board resolved to pause dividend distributions, in order to: a)
guarantee Nokia's ability to increase 5G investments, b) continue
investing in growth in strategic focus areas of enterprise and software
and c) strengthen Nokia's cash position. This was done in accordance
with Nokia's dividend policy, which states that dividend decisions are
made taking into account Nokia's cash position and expected cash flow
generation.
The Board is pleased with Nokia's recent operational performance and the
track record of sustainable cash generation that Nokia is starting to
build. The Board is satisfied that Nokia has strengthened its cash
position. However, the Board continues to focus on ensuring Nokia's
ability to increase investments in 5G and strategic areas, while
continuing to establish a track record of sustainable cash generation.
Therefore, the Board does not propose a dividend or dividend
authorization for the financial year 2020. After Q4 2021, the Board will
assess the possibility of proposing a dividend distribution for the
financial year 2021, taking into account the net cash position, as well
as the outlook for 2022.
COVID-19
The COVID-19 pandemic has made vividly clear the critical importance of
connectivity to keep society functioning. We believe we have a resilient
customer base, and we feel a sense of duty to our customers and the
communities they serve.
Due to significant uncertainties and risks in estimating the impact of
customer-related delivery and implementation challenges, we are now
focusing our COVID-19 disclosure on the impact of factory closures,
which have had a net sales impact of approximately EUR 200 million in
full year 2020, with the majority of these net sales expected to be
shifted to future periods, rather than being lost. The EUR 200 million
of negative impact in full year 2020 relates primarily to Alcatel
Submarine Networks in Group Common and Other, which experienced
temporary factory closures that particularly impacted Q1 2020 and Q2
2020.
COVID-19 also affected our operational costs (for example, temporary
lower travel), capital expenditures (temporary delays), and cash
outflows related to taxes (tax relief). In full year 2020, we had a
temporary benefit of approximately EUR 250 million due to lower travel
and personnel expenses related to COVID-19, of which approximately EUR
150 million benefited operating expenses and approximately EUR 100
million benefited cost of sales. In full year 2021, based on our current
understanding of the COVID-19-related developments, we expect a
temporary benefit of approximately EUR 150 million due to lower travel
and personnel expenses related to COVID-19, of which approximately EUR
100 million is expected to benefit operating expenses and approximately
EUR 50 million is expected to benefit cost of sales.
Potential risks and uncertainties continue to exist related to the scope
and duration of the COVID-19 impact and the pace and shape of the
economic recovery following the pandemic and it is impossible to predict
with accuracy the precise impact of such risks on us, our operations and
our business.
During the COVID-19 pandemic, we have continued to advance our 5G
roadmap and product evolution, as planned, and we believe that our
COVID-19 mitigation actions in R&D have been successful.
Health and safety
Naturally, Nokia's first focus during the COVID-19 pandemic is to our
employees. We have in place strict protocols for Nokia facilities and
provided clear advice to our employees about how they can mitigate the
risks of COVID-19 in situations where they have to go about critical
work. We have taken a range of steps, including banning international
travel for Nokia employees, except for strictly-defined 'critical'
reasons; closing all our facilities to all visitors, with the exception
of people engaged in essential maintenance and services, and asking our
staff to work from home wherever possible. We started implementing these
measures in some regions already in January 2020 and have updated
guidance as the situation has developed.
As the overwhelming majority of Nokia employees continue working
remotely, we are providing guidance on how staff can maintain a healthy
work-life balance and look after their physical and mental well-being.
Supporting the essential services our customers provide
The products and services that we provide have never been more critical
in enabling the world to continue to function in an orderly way. We
continue to work closely with all our customers, to ensure that the
changing needs and requirements at this time are well understood and
that we respond appropriately to them.
In Q4 2020, connectivity continued to bring together people isolated
from each other by the COVID-19 pandemic. Remote working and schooling,
robust delivery of basic services and smart deliveries are just some
examples that have been enabled by our connectivity solutions. In
December, we announced that, together with Vodafone India Foundation, we
have deployed a Smart Agriculture solution that aims to improve the
productivity of farmers in India. The pilot project is being implemented
in 100 locations in the states of Madhya Pradesh and Maharashtra and
will benefit over 50 000 farmers in the region by enhancing their
productivity and income.
Nokia has a global manufacturing footprint designed for optimized global
supply, and to mitigate against risks such as local disruptive events,
transportation capacity problems, and political risks. Our supply
network consists of 25 factories around the globe and six hubs for
customer fulfillment. As a result, at the Nokia level, we are not
dependent on one location or entity. We have also established a global
command center to manage the supply chain challenges arising from the
outbreak; and we are ready to activate relevant business continuity
plans should the situation in any part of our organization require this.
These actions demonstrate our strong commitment to supporting global
efforts to end the pandemic and overcoming the disruption and challenges
we currently face.
OUTLOOK
Full Year 2021
Net sales, adjusted for EUR 20.6 billion to EUR 21.8 billion, assuming continuation
currency fluctuations of 2020 year-end EUR/USD rate of 1.23
------------------------ -----------------------------------------------------------
Comparable operating
margin(1) 7 to 10%
Free cash flow(2) Positive
-- 1 Comparable measures exclude intangible asset amortization and other
fair value adjustments, goodwill impairments, restructuring related
charges and certain other items affecting comparability. Refer to note 12
"Performance measures" in Nokia Corporation Financial Report for Q4 and
full year 2020.
-- 2 Free cash flow = net cash from/(used in) operating activities - capital
expenditures + proceeds from sale of property, plant and equipment and
intangible assets -- purchase of non-current financial investments +
proceeds from sale of non-current financial investments.
Long term
Nokia intends to provide a long-term outlook, latest at Capital Markets
Day on March 18, 2021
Dividend policy
In connection with the work on long term financial targets, Nokia will
also assess its dividend policy, and intends to provide an update, latest
at Capital Markets Day on March 18, 2021
OUTLOOK ASSUMPTIONS
-- In full year 2021, we expect our net sales, adjusted for currency
fluctuations, to be affected by:
-- A significant decline in Mobile Networks, due to not converting
all of its 4G footprint into 5G footprint in North America in
2020, as well as price erosion in North America (new);
-- Net sales growth, primarily in Network Infrastructure and Nokia
Technologies (new);
-- Mobile Networks is expected to deliver comparable operating margin of
around zero percent in full year 2021, and significant improvement over
the longer term;
-- Network Infrastructure is expected to deliver comparable operating margin
in the high single digit range in full year 2021, and gradual improvement
over the longer term;
-- Cloud & Network Services is expected to deliver comparable operating
margin in the mid-single digit range in full year 2021, and significant
improvement over the longer term;
-- Nokia Technologies is expected to deliver a slight improvement in
comparable operating profit in full year 2021, relative to full year
2020, and stable performance over the longer term;
-- Group Common and Other is expected to deliver a comparable operating loss
of approximately EUR 200 million in full year 2021, and stable
performance over the longer term;
-- In full year 2021, Nokia expects the free cash flow performance of Nokia
Technologies to be approximately EUR 600 million lower than its operating
profit, primarily due to prepayments we received from certain licensees;
-- Comparable financial income and expenses are expected to be an expense of
approximately EUR 250 million in full year 2021 and over the longer-term
(new);
-- Comparable income tax expenses are expected to be approximately EUR 450
million in full year 2021 and over the longer-term, subject to regional
profit mix, net sales subject to withholding tax and the timing of patent
licensing cash flow (new);
-- Cash outflows related to income taxes are expected to be approximately
EUR 350 million in full year 2021 and over the longer term until our US
or Finnish deferred tax assets are fully utilized (new);
-- Capital expenditures are expected to be approximately EUR 700 million in
full year 2021 and EUR 600 million over the longer-term (new); and
-- Rule of thumb related to currency fluctuations: Assuming our current mix
of net sales and total costs (refer to Note 1, "Basis of Preparation" in
the "Financial statement information" section for details in Nokia
Corporation Financial Report for Q4 and full year 2020), we expect that a
10% increase in the EUR/USD exchange rate would have an impact of
approximately negative 4 to 5% on net sales and an approximately neutral
impact on operating profit (new).
RISK FACTORS
Nokia and its business are exposed to a number of risks and
uncertainties which include but are not limited to:
-- Competitive intensity, which is particularly impacting Mobile Networks
and is expected to continue at a high level in full year 2021, as some
competitors seek to take share in the early stages of 5G;
-- Our ability to accelerate our product roadmaps and cost competitiveness
through additional 5G investments in full year 2021, thereby enabling us
to drive product cost reductions and maintain the necessary scale to be
competitive;
-- Some customers are reassessing their vendors in light of security
concerns, creating near-term pressure to invest in order to secure
long-term benefits;
-- Developments in North America following the conclusion of the C-band
auction, including the potential for temporary capital expenditure
constraints or the acceleration of 5G deployments;
-- Customer demand could weaken and risk could increase further in India,
after the country's Supreme Court upheld a ruling that telecoms companies
must pay retroactive license and spectrum fees;
-- Potential risks and uncertainties related to the scope and duration of
the COVID-19 impact and the pace and shape of the economic recovery
following the pandemic;
-- Our ability to procure certain standard components;
-- The timing of completions and acceptances of certain projects;
-- Our product and regional mix;
-- Macroeconomic, industry and competitive dynamics;
-- The timing and value of new and existing patent licensing agreements with
smartphone vendors, automotive companies and consumer electronics
companies;
-- Results in brand and technology licensing; costs to protect and enforce
our intellectual property rights; and the regulatory landscape for patent
licensing;
as well as the risk factors specified under "Forward-looking Statements"
of this release, and our 2019 annual report on Form 20-F published on
March 5, 2020 under "Operating and financial review and prospects-Risk
factors" as supplemented by the form 6-K published on April 30, 2020
under the header "Risk Factors".
ANALYST CONFERENCE CALL
Nokia's analyst conference call will begin on February 4, 2021 at 3 p.m.
Finnish time. A link to the webcast of the conference call will be
available at
https://www.globenewswire.com/Tracker?data=AB_g0R47a6ZRS6qnZH33ilJugXuGCnbQmZGfV5xk9HxQYh7ifu9HL7kZ9_y4X_hLpyy3VsQx8FNBRpOngpib8THtgtrBATFL03NxoQaou3q36JeC_Kl5urhIkOI_myfxzHXt-c-Kmo1X_mDhMgR9zmVHol0GnUsytabz6217A-u0AU7-0X7tA7MvNua7dNR1jMLego9YtjRZR0ZDQ-Ge7WIzaHEVQn0EE1osBl1dy45mFYj4YqCpoIts4GGIW-jgmp2Ow3ewAi-4nfq1Mi4tQQ==
www.nokia.com/financials. Media representatives can listen in via the
link, or call +1-412-717-9224.
FINANCIAL CALAR 2021
-- Nokia plans to publish its "Nokia in 2020" annual report, which includes
the review by the Board of Directors and the audited annual accounts, in
week 9 of 2021. The annual report will be available at
http://www.nokia.com/financials www.nokia.com/financials.
-- Nokia's Capital Markets Day is planned to be held on March 18, 2021.
-- Nokia's Annual General Meeting 2021 is planned to be held on April 8,
2021.
-- Nokia plans to publish its first quarter 2021 results on April 29, 2021.
-- Nokia plans to publish its second quarter and half year 2021 results on
July 29, 2021.
-- Nokia plans to publish its third quarter and January-September 2021
results on October 28, 2021.
Media Inquiries:
Nokia Communications
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press.services@nokia.com
Katja Antila, Head of Media Relations
Investor Inquiries:
Nokia Investor Relations
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Email:
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investor.relations@nokia.com
About Nokia
We create the critical networks and technologies to bring together the
world's intelligence, across businesses, cities, supply chains and
societies.
With our commitment to innovation and technology leadership, driven by
the award-winning Nokia Bell Labs, we deliver networks at the limits of
science across mobile, infrastructure, cloud, and enabling technologies.
Adhering to the highest standards of integrity and security, we help
build the capabilities we need for a more productive, sustainable and
inclusive world.
For our latest updates, please visit us online
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www.nokia.com and follow us on Twitter @nokia.
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. These forward-looking
statements reflect Nokia's current expectations and views of future
developments and include statements regarding: A) expectations, plans or
benefits related to our strategies, growth management and operational
key performance indicators; B) expectations, plans or benefits related
to future performance of our businesses (including the expected impact,
timing and duration of that impact of COVID-19 on our businesses, our
supply chain and our customers' businesses) and any future dividends
including timing and qualitative and quantitative thresholds associated
therewith; C) expectations and targets regarding financial performance,
cash generation, results, the timing of receivables, operating expenses,
taxes, currency exchange rates, hedging, cost savings, product cost
reductions and competitiveness, as well as results of operations
including targeted synergies, better commercial management and those
results related to market share, prices, net sales, income and margins;
D) expectations, plans or benefits related to changes in organizational
and operational structure; E) expectations regarding competition within
our market, market developments, general economic conditions and
structural and legal change globally and in national and regional
markets, such as China; F) 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;
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, including our short term and
longer term expectations around the rollout of 5G, investment
requirements with such rollout, and our ability to capitalize on such
rollout; 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, including our
current cost savings program; L) expectations, plans or benefits related
to future capital expenditures, reduction of support function costs,
temporary incremental expenditures or other R&D expenditures to develop
or rollout software and other new products, including 5G, ReefShark and
increased digitalization; M) expectations regarding our customers'
future actions, including our customers' capital expenditure constraints
and our ability to satisfy customer's needs and retain their business;
and N) statements preceded by or including "believe", "expect",
"expectations", "deliver", "maintain", "strengthen", "target",
"estimate", "plan", "intend", "assumption", "focus", "continue",
"should", "will" or similar expressions. These forward-looking
statements are subject to a number of risks and uncertainties, many of
which are beyond our control, which could cause our actual results to
differ materially from such statements. These statements are based on
management's best assumptions and beliefs in light of the information
currently available to them. 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. 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, general public health conditions
(including its impact on our supply chains) and other developments in
the economies where we operate, including the timeline for the
deployment of 5G and our ability to successfully capitalize on that
deployment; 3) competition and our ability to effectively and profitably
invest in existing and new 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 and our own R&D capabilities and
investments; 5) our dependence on a limited number of customers and
large multi-year agreements, as well as external events impacting our
customers including mergers and acquisitions and the possibility of our
customers awarding business to our competitors; 6) our ability to
maintain our existing sources of intellectual property-related revenue
through our intellectual property, including through licensing,
establishing new sources of revenue and protecting our intellectual
property from infringement; 7) our ability to manage and improve our
financial and operating performance, cost savings, competitiveness and
synergies generally, expectations and timing around our ability to
recognize any net sales and our ability to implement changes to our
organizational and operational structure efficiently; 8) 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; 9) our ability to achieve the anticipated benefits, synergies,
cost savings and efficiencies of acquisitions; 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,
or our customers' security concerns; 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 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 (if any) we are able to distribute to
shareholders for each financial period; 29) pension costs, employee
fund-related costs, and healthcare costs; 30) our ability to
successfully complete and capitalize on our order backlogs and continue
converting our sales pipeline into net sales; 31) risks related to
undersea infrastructure; and 32) the scope and duration of the COVID-19
impact on the global economy and financial markets as well as our
customers, supply chain, product development, service delivery, other
operations and our financial, tax, pension and other assets, and the
shape of the economic recovery following the pandemic as well as the
risk factors specified in our 2019 annual report on Form 20-F published
on March 5, 2020 under "Operating and financial review and
prospects-Risk factors" as supplemented by the form 6-K published on
April 30, 2020 under the header "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.
Attachment
-- Nokia_Q4_report_English
https://ml-eu.globenewswire.com/Resource/Download/edff33fc-7433-4017-bd81-832164328135
(END) Dow Jones Newswires
February 04, 2021 01:15 ET (06:15 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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