2007-10-18 12:00:02 CEST
2007-10-18 12:00:02 CEST
REGULATED INFORMATION
Nokia - Quarterly report
Nokia reports Q3 2007 net sales of EUR 12.9 billion and EPS of EUR 0.40
Nokia market share grows to an estimated 39%; total device operating margin up
sequentially
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| | NOKIA IN THE THIRD QUARTER 2007* |
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| EUR million | Q3/2007** | Q3/2006** | Change |
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| Net sales | 12 898 | 10 100 | 28% |
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| Mobile Phones | 6 131 | 5 949 | 3% |
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| Multimedia | 2 580 | 2 092 | 23% |
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| Enterprise Solutions | 526 | 257 | 105% |
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| Nokia Siemens Networks | 3 674 | 1 804 | |
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| Operating profit | 1 862 | 1 100 | 69% |
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| Mobile Phones | 1 388 | 779 | 78% |
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| Multimedia | 575 | 366 | 57% |
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| Enterprise Solutions | 88 | -65 | |
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| Nokia Siemens Networks*** | -120 | 131 | |
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| Group Common Functions | -69 | -111 | |
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| Operating margin (%) | 14.4 | 10.9 | |
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| Mobile Phones (%) | 22.6 | 13.1 | |
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| Multimedia (%) | 22.3 | 17.5 | |
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| Enterprise Solutions (%) | 16.7 | -25.3 | |
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| Nokia Siemens Networks (%)*** | -3.3 | 7.3 | |
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| Net profit | 1 563 | 845 | 85% |
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| EPS, EUR | | | |
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| Basic*** | 0.40 | 0.21 | 90% |
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| Diluted*** | 0.40 | 0.21 | 90% |
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* As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on
a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by
Nokia and Siemens, is comprised of the former Nokia Networks and Siemens'
carrier-related operations for fixed and mobile networks. Accordingly, the
results of Nokia Group and Nokia Siemens Networks for the third quarter 2007 are
not directly comparable to results for the third quarter 2006. Nokia's third
quarter 2006 included the former Nokia Networks business group only.
** Q3 2007 special items:
- EUR 86 million restructuring charge and other one-time items in Nokia Siemens
Networks (impacting Nokia Siemens Networks operating profit)
- EUR 60 million gain on sale of real estate (impacting Group Common Functions
operating profit)
- Excluding special items, diluted EPS was EUR 0.40
** Q3 2006 special items:
- Mobile Phones operating profit included charges of EUR 128 million primarily
related to the restructuring of the CDMA business and associated asset
write-downs.
- Excluding this special item, diluted EPS was EUR 0.23.
*** Important note to Nokia Siemens Networks Q3 2007 operating profit and Nokia
EPS: In addition to the 'special items' listed above, Nokia Siemens Networks
reported operating profit also included EUR 144 million in intangible asset
amortization and other Purchase Price Accounting related items.
THIRD QUARTER 2007 HIGHLIGHTS
- Nokia diluted EPS of EUR 0.40, excluding special items, growing 74% from Q3
2006.
- Nokia operating cash flow of EUR 2.0 billion.
- Nokia operating margin of 14.6%, up sequentially from 11.0% in Q2 2007,
excluding special items.
- Nokia device volumes of 111.7 million units, up 11% sequentially and up 26%
year on year.
- Estimated industry device volumes of 286 million units, up 9% sequentially and
up 17% year on year.
- Nokia estimated device market share of 39%, up from 38% in Q2 2007 and up from
36% in Q3 2006.
- The proportion of devices Nokia sold in the under EUR 30 category increased
significantly, both sequentially and year on year.
- Total device operating margin, and Mobile Phones gross margin, increased
sequentially, despite Nokia's total device ASP of EUR 82 decreasing from EUR 90
in Q2 2007.
- Nokia Siemens Networks operating margin, excluding special items, was -1.0%
and was a positive 3.0%, excluding special items and Purchase Price Accounting
related items.
OLLI-PEKKA KALLASVUO, NOKIA CEO:
Nokia strengthened its leading position in the device industry in the third
quarter. In a strong market, we simultaneously gained market share and increased
our operating margins. The quality and depth of our device portfolio continues
to give us a good competitive edge and we believe our portfolio looks promising
for next year.
INDUSTRY AND NOKIA OUTLOOK
- Nokia expects industry mobile device volumes in the fourth quarter 2007 to be
up sequentially.
- We expect Nokia's device market share in the fourth quarter 2007 to be
approximately at the same level sequentially, leading to an estimated increase
of our market share in the full year of 2007.
- Nokia expects that the mobile device market volume will be approximately 1.1
billion units in 2007, up from the approximately 978 million units Nokia
estimated for 2006.
- Nokia continues to expect the device industry to experience value growth in
2007, but expects some decline in industry ASPs, primarily reflecting the
increasing impact of the emerging markets and competitive factors in general.
- Nokia continues to expect very slight market growth for the mobile and fixed
infrastructure and related services market in euro terms in 2007.
- Nokia and Nokia Siemens Networks cost synergy target for Nokia Siemens
Networks continues to be to achieve approximately EUR 1.5 billion of annual cost
synergies by the end of 2008.
- Nokia and Nokia Siemens Networks have identified a further EUR 500 million of
annual cost synergies, the majority of which we now estimate will be realized by
the end of 2008.
- Nokia is updating its previous estimate of EUR 1.5 billion in charges
associated with cost synergies for Nokia Siemens Networks, and such charges are
now estimated to be slightly above EUR 2 billion. The total estimated charges
reflect the total annual EUR 2 billion cost synergy target and the increased
visibility on the additional EUR 500 million of targeted cost synergies,
including the potential need to further refine Nokia Siemens Networks' product
portfolio in a way not previously identified at the formation of Nokia Siemens
Networks on April 1, 2007.
- Nokia estimates that the majority of the remaining estimated charges
associated with cost synergies for Nokia Siemens Networks will be recorded in
the fourth quarter 2007. The total restructuring charges recorded by the end of
the third quarter 2007 are EUR 991 million.
Q3 2007 FINANCIAL HIGHLIGHTS
(Comparisons are given to the third quarter 2006 results, unless otherwise
indicated.)
As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on a
fully consolidated basis. Nokia Siemens Networks, a company jointly owned by
Nokia and Siemens, is comprised of the former Nokia Networks and Siemens'
carrier-related operations for fixed and mobile networks. Accordingly, the
results of Nokia Group and Nokia Siemens Networks for the third quarter 2007 are
not directly comparable to results for the third quarter 2006. Nokia's third
quarter 2006 included the former Nokia Networks business group only.
Nokia Group
Nokia's third quarter 2007 net sales increased 28% to EUR 12.9 billion, compared
with EUR 10.1 billion in the third quarter 2006. At constant currency, group net
sales would have increased 32%.
Nokia's third quarter 2007 operating profit grew 69% to EUR 1.9 billion
(including the EUR 26 million net negative impact of special items), compared
with EUR 1.1 billion in the third quarter 2006 (including the negative impact of
the EUR 128 million special item). The special items for the third quarter 2007
included a EUR 86 million restructuring charge and other one-time items in Nokia
Siemens Networks (impacting Nokia Siemens Networks operating profit); and a EUR
60 million gain on sale of real estate (impacting Group Common Functions).
Nokia's third quarter 2007 operating margin was 14.4% (10.9%), including the EUR
26 million net negative impact of the special items. Excluding the special
items, Nokia's third quarter 2007 operating margin was 14.6% (12.2%).
Operating cash flow for the third quarter 2007 was EUR 2.0 billion, compared
with EUR 1.0 billion for the third quarter 2006, and total combined cash and
other liquid assets were EUR 9.2 billion, compared with EUR 8.5 billion at
December 31, 2006. As of September 30, 2007, our net debt-equity ratio (gearing)
was -51%, compared with -68% at December 31, 2006.
Mobile devices
In the third quarter 2007, the total mobile device volume achieved by our Mobile
Phones, Multimedia and Enterprise Solutions business groups reached 111.7
million units, representing 26% year on year growth and an 11% sequential
increase. The overall industry volume for the same period reached an estimated
286 million units, representing 17% year on year growth and a 9% sequential
increase.
Converged device industry volumes increased to an estimated 31.7 million units,
compared with 19.5 million units in the third quarter 2006. Nokia's own
converged device volume rose to 16.0 million units, compared with 10.4 million
units in the third quarter 2006. Nokia shipped well over 9 million Nokia Nseries
and almost 2 million Nokia Eseries devices during the third quarter 2007.
The following chart sets out Nokia's mobile device volumes for the periods
indicated, as well as the year on year and sequential growth rates, by
geographic area.
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| NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA |
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| (million units) | Q3 2007 | Q3 2006 | YoY | Q2 2007 | QoQ |
| | | | Change | | Change |
| | | | (%) | | (%) |
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| Europe | 29.0 | 24.8 | 16.9 | 27.1 | 7.0 |
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| Middle East & Africa | 19.3 | 13.3 | 45.1 | 17.1 | 12.9 |
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| China | 18.9 | 13.8 | 37.0 | 15.9 | 18.9 |
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| Asia-Pacific | 29.5 | 20.9 | 41.1 | 25.6 | 15.2 |
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| North America | 5.4 | 5.8 | -1.7 | 4.1 | 39.0 |
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| Latin America | 9.6 | 9.9 | -3.0 | 11.0 | -12.7 |
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| Total | 111.7 | 88.5 | 26.2 | 100.8 | 10.8 |
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Based on our preliminary market estimate, Nokia's market share for the third
quarter 2007 was 39%, compared with 36% in the third quarter 2006 and 38% in the
second quarter 2007. Nokia's year on year market share increase was driven
primarily by strong gains in Europe, Middle East & Africa, Asia-Pacific and
China. Nokia's market share decreased year on year in Latin America and North
America. Nokia had strong sequential market share gains in North America and to
a lesser degree in China and Asia-Pacific. Nokia's market share decreased
sequentially in Europe, Latin America and Middle East & Africa. Nokia's device
volumes for the third quarter 2007 were somewhat constrained by component
shortages, which continue to some degree in the fourth quarter 2007. In a
strongly growing market, these component shortages are linked to the expected
high demand for Nokia products and seasonal industry growth in the fourth
quarter.
Nokia's average selling price in the third quarter 2007 was EUR 82, down from
EUR 93 in the third quarter 2006 and down from EUR 90 in the second quarter
2007. The lower year on year and sequential ASP in the third quarter 2007 was
primarily the result of a significantly higher proportion of entry level device
sales, especially in the under EUR 30 category where industry growth has been
very strong and where Nokia has the leading market share. Nokia's margins were
strong in entry-level devices (including the under EUR 30 category) in the third
quarter 2007; driven by Nokia's scale, low cost structure, world class
distribution and leading brand.
Business Groups
Mobile Phones
Third quarter 2007 net sales grew 3% to EUR 6.1 billion, compared with EUR 5.9
billion in the third quarter 2006. Strong overall volume growth was partially
offset by a significant ASP decline year on year, driven primarily by a higher
proportion of entry-level sales. Net sales year on year growth was strongest in
Asia-Pacific and Middle East & Africa, followed by China. Net sales were down
significantly in North America, and to a lesser degree in Latin America and
Europe year on year.
Mobile Phones operating profit grew 78% to EUR 1.4 billion, compared with EUR
779 million in the third quarter 2006, with an operating margin of 22.6%
(13.1%). Third quarter 2006 reported operating profit included a charge of EUR
128 million primarily related to the restructuring of the CDMA business and
associated asset write-downs. The 53% increase in operating profit for the third
quarter 2007, excluding these charges, was driven primarily by an improved gross
margin, compared to the third quarter 2006. The increase in Mobile Phones gross
margin was primarily due to newer and more profitable products across its range.
Multimedia
Third quarter 2007 net sales increased 23% to EUR 2.6 billion, compared with EUR
2.1 billion in the third quarter 2006. Multimedia net sales were up in all
regions, with growth strongest in Latin America and North America. However,
Latin America and North America net sales continue to be relatively small.
Multimedia net sales growth was driven by high volumes of Nokia Nseries
multimedia computers, especially the Nokia N70, Nokia N73 and Nokia N95.
Multimedia third quarter operating profit grew 57% to EUR 575 million, compared
with EUR 366 million in the third quarter 2006, with an operating margin of
22.3% (17.5%). Operating profit growth in the third quarter 2007 was driven by
strong net sales growth and improved gross margins from a solid product
portfolio, compared to the third quarter 2006.
Enterprise Solutions
Third quarter 2007 net sales increased 105% to EUR 526 million, compared with
EUR 257 million in the third quarter 2006. Net sales were up significantly year
on year in all regions except North America. Net sales were driven primarily by
strong volume growth in Enterprise Solutions device business, especially the
Nokia E65, compared to the third quarter 2006.
In the third quarter 2007, Enterprise Solutions operating profit was EUR 88
million, compared with an operating loss of EUR 65 million in the third quarter
2006, with an operating margin of 16.7%
(-25.3%). The significantly improved operating performance for the third quarter
2007 reflected strong net sales growth and effective cost control, compared to
the third quarter 2006.
Nokia Siemens Networks
Third quarter 2007 net sales were EUR 3.7 billion. The third quarter 2007
results of Nokia Siemens Networks are not directly comparable to the third
quarter of 2006 as it included the former Nokia Networks business group only.
However, net sales were up 7% compared to the second quarter of 2007, which was
the first quarter of operations for Nokia Siemens Networks.
The following chart sets out Nokia Siemens Networks net sales for the periods
indicated by geographic area.
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| NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA |
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| EUR million | Q3 2007 | Q2 2007 | QoQ Change |
| | | | (%) |
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| Europe | 1 500 | 1 186 | 25.9 |
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| Middle East & Africa | 448 | 369 | 21.3 |
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| China | 372 | 294 | 26.4 |
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| Asia-Pacific | 849 | 1 183 | -27.8 |
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| North America | 152 | 164 | -7.0 |
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| Latin America | 353 | 242 | 46.0 |
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| Total | 3 674 | 3 438 | 6.9 |
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Nokia Siemens Networks third quarter operating profit was negative EUR 120
million, with an operating margin of -3.3%. The reported third quarter 2007
operating profit included a charge of EUR 86 million related to Nokia Siemens
Networks restructuring costs and other one time items. The operating profit for
the third quarter 2007, excluding these special items, was negative EUR 34
million, with an operating margin of -1.0%, improving from the comparable second
quarter 2007 operating margin of 10.5%. The improvement in the operating margin
was driven by higher net sales and the absence of the acquisition related
inventory value adjustments of EUR 182 million, which only impacted the second
quarter of 2007. The operating profit in the third quarter 2007 also included
EUR 144 million for intangible asset amortization and other Purchase Price
Accounting related items. Third quarter 2007 operating margin was a positive
3.0%, excluding both the special items and the Purchase Price Accounting related
items.
Q3 2007 OPERATING HIGHLIGHTS
Nokia
- Nokia introduced Ovi, the company's new Internet services brand name. Ovi,
meaning 'door' in Finnish, will enable consumers to easily access their existing
social network, communities and content, and will act as a gateway to Nokia
services.
- As part of Ovi, Nokia announced the Nokia Music Store and N-Gage, two services
that make it easy for people to discover, try and buy music and games from a
range of artists and publishers, including exclusive content only available
through Nokia.
- In July, Nokia acquired Twango, which provides a comprehensive media sharing
solution for organizing and sharing photos, videos and other personal media. By
acquiring Twango, Nokia will be able to offer people an easy way to share
multimedia content through their desktop and mobile devices. This acquisition
was followed by the acquisition of Enpocket, a global leader in mobile
advertising, announced in the third quarter 2007 and closed early during the
fourth quarter 2007; and the agreement announced early in the fourth quarter
2007 to acquire NAVTEQ, a leading provider of comprehensive digital map
information for automotive navigation systems, mobile navigation devices,
Internet-based mapping applications, and government and business solutions. The
acquisition of NAVTEQ is not yet closed.
Mobile Phones
The following devices were announced during Q3:
- Nokia 5310 XpressMusic and Nokia 5610 XpressMusic, both with dedicated music
keys, expanded memory, large screens and extended battery performance.
- Nokia 6301, a stainless steel device offering consumers seamless voice and
data mobility across GSM cellular and WLAN networks via Unlicensed Mobile Access
(UMA) technology.
- Nokia 6555, the first phone with a unique smooth-back fold design. In the US,
the Nokia 6555 is exclusively available from AT&T.
- Nokia's Prism collection, comprising the Nokia 7900 Prism and the Nokia 7500
Prism - the latest range of mobile phones aimed at style-conscious consumers.
The Prism collection features a diamond-cut design with sharp angled lines,
geometric patterns and graphic light-refracting colors.
Multimedia
- Nokia announced two new Nokia Nseries devices: Nokia N81 8GB, an entertainment
focused multimedia computer and Nokia N95 8GB, which follows the success of the
original Nokia N95 with a larger display, enhanced usage times and 8 gigabytes
of memory capacity.
- The Nokia N95 multimedia computer has been voted 'the European Media Phone of
the Year 2007-2008' by the European Imaging and Sound Association (EISA),
Europe's leading association for consumer electronics.
Enterprise Solutions
- The Nokia E51 was announced during the third quarter. This stylish dual-mode
business smartphone is designed for great cellular performance as well as
integration with corporate telephony systems from partners such as Cisco and
Alcatel. The device will be featured as part of BT's Corporate Fusion program
- Nokia announced Mail for Exchange 2.0 for Nokia Eseries and selected Nokia
Nseries devices, providing seamless access to Microsoft Exchange servers from a
Nokia device with improved user experience.
- Nokia won 10 new Nokia Intellisync wireless email operator accounts worldwide,
marking the most contracts signed in any single quarter since the Intellisync
acquisition.
- Nokia completed a refresh of its security appliance product line with the
launch of the Nokia IP2450. This high-performance appliance leverages new Intel
technology designed to deliver leading price performance to our enterprise
security customers.
Nokia Siemens Networks
- Nokia Siemens Networks announced it would expand its R&D competence in
Chengdu, China and would invest USD 100 million to strengthen operations in
India. The company also announced that its Services business unit would be based
in India.
- Contracts won included a USD 900 million end-to-end network expansion with
Bharti Airtel in India; a EUR 180 million GSM/EDGE deal with Henan MCC in China;
a multi-vendor IP network maintenance agreement with Deutsche Telekom in
Germany; and a EUR 61.5 million 3G network expansion agreement with Taiwan's
Chunghwa Telecom.
- Nokia Siemens Networks won the first commercial deployment for its I-HSPA
solution with TerreStar; made a cooperation deal with Intel in IPTV; and
launched a new 3G Femto Home Access solution and then struck Femto cooperation
deals with Airvana Inc. and Thomson.
- During the quarter Nokia Siemens Networks was the first company to
successfully deploy hybrid backhaul in a live network. Hybrid backhaul is aimed
at helping operators to reduce costs while boosting capacity.
- Nokia Siemens Networks continued to be on track to achieve the earlier
announced cost synergy targets, including the planned personnel reductions.
- The integration work continues and Nokia Siemens Networks has defined its new
values.
For more information on the operating highlights mentioned above, please refer
to related press announcements, which can be accessed at the following link:
http://www.nokia.com/press and http://www.nokiasiemensnetworks.com/press.
NOKIA IN THE THIRD QUARTER 2007
(International Financial Reporting Standards (IFRS) comparisons given to the
third quarter 2006 results, unless otherwise indicated.)
As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on a
fully consolidated basis. Nokia Siemens Networks, a company jointly owned by
Nokia and Siemens, is comprised of the former Nokia Networks and Siemens'
carrier-related operations for fixed and mobile networks. Accordingly, the
results of Nokia Group and Nokia Siemens Networks for the third quarter 2007 are
not directly comparable to results for the third quarter 2006. Nokia's third
quarter 2006 included the former Nokia Networks business group only.
Nokia's net sales increased 28% to EUR 12 898 million (EUR 10 100 million). Net
sales of Mobile Phones increased 3% to EUR 6 131 million (EUR 5 949 million).
Net sales of Multimedia increased 23% to EUR 2 580 million (EUR 2 092 million).
Net sales of Enterprise Solutions increased 105% to EUR 526 million (EUR 257
million). Net sales of Nokia Siemens Networks were EUR 3 674 million.
Operating profit increased to EUR 1 862 million (EUR 1 100 million),
representing an operating margin of 14.4% (10.9%). Operating profit in Mobile
Phones increased 78% to EUR 1 388 million (EUR 779 million), representing an
operating margin of 22.6% (13.1%). Operating profit in Multimedia increased 57%
to EUR 575 million (EUR 366 million), representing an operating margin of 22.3%
(17.5%). Enterprise Solutions reported an operating profit of EUR 88 million
(operating loss of EUR 65 million), representing an operating margin of 16.7%
(-25.3%). Nokia Siemens Networks reported an operating loss of EUR 120 million
representing an operating margin of -3.3%. Group Common Functions operating
expenses totaled EUR 69 million (operating expenses EUR 111 million).
Financial income was EUR 67 million (EUR 34 million). Profit before tax and
minority interests was
EUR 1 924 million (EUR 1 145 million). Taxes included the positive impact of
approximately EUR 70 million due to changes in deferred tax assets due to the
decrease in the German statutory tax rate. Net profit totaled EUR 1 563 million
(EUR 845 million). Earnings per share increased to EUR 0.40 (basic) and to EUR
0.40 (diluted), compared with EUR 0.21 (basic) and EUR 0.21 (diluted) in the
third quarter of 2006.
NOKIA IN JANUARY - SEPTEMBER 2007
(International Financial Reporting Standards (IFRS) comparisons given to the
January-September 2006 results, unless otherwise indicated.)
As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on a
fully consolidated basis. Nokia Siemens Networks, a company jointly owned by
Nokia and Siemens, is comprised of the former Nokia Networks and Siemens'
carrier-related operations for fixed and mobile networks. Accordingly, the
results of Nokia Group and Nokia Siemens Networks for the third quarter 2007 are
not directly comparable to results for the third quarter 2006. Nokia's third
quarter 2006 included the former Nokia Networks business group only.
Nokia's net sales increased 20% to EUR 35 341 million (EUR 29 420 million). Net
sales of Mobile Phones decreased to EUR 17 645 million (EUR 17 693 million). Net
sales of Multimedia increased 31% to EUR 7 512 million (EUR 5 741 million). Net
sales of Enterprise Solutions increased 93% and totaled EUR 1 400 million (EUR
726 million). Net sales of Nokia Siemens Networks were EUR 8 810 million.
Operating profit increased to EUR 5 493 million (EUR 3 969 million),
representing an operating margin of 15.5% (13.5%). Operating profit in Mobile
Phones increased 26% to EUR 3 576 million (EUR 2 843 million), representing an
operating margin of 20.3% (16.1%). Operating profit in Multimedia increased 57%
to EUR 1 560 million (EUR 993 million), representing an operating margin of
20.8% (17.3%). Enterprise Solutions reported an operating profit of EUR 149
million (operating loss of EUR 194 million), representing an operating margin of
10.6% (-26.7%). Operating loss in Nokia Siemens Networks was EUR 1 308 million,
representing an operating margin of -14.8 %. Group Common Functions operating
profit totaled EUR 1 516 million, including a gain of EUR 1 883 million.
In the period from January to September 2007, net financial income was EUR 175
million (EUR 163 million). Profit before tax and minority interests was EUR 5
695 million (EUR 4 155 million). Net profit totaled EUR 5 370 million (EUR 3 033
million). Earnings per share increased to EUR 1.37 (basic) and to EUR 1.36
(diluted), compared with EUR 0.74 (basic) and EUR 0.74 (diluted).
PERSONNEL
The average number of employees during January-September was 96 495. At
September 30, 2007, Nokia employed a total of 112 913 people (68 483 people at
December 31, 2006). The increase in personnel at September 30, 2007 is primarily
attributable to Nokia Siemens Networks.
SHARES
The total number of Nokia shares on September 30, 2007 was 3 935 542 025. On
September 30, 2007, Nokia and its subsidiary companies owned 101 992 828 Nokia
shares, representing approximately 2.6 % of the total number of Nokia shares and
the total voting rights.
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| Q3 2007 BY BUSINESS GROUP, EUR | | | | | |
| million | | | | | |
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| (unaudited) | | | | | | | |
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| | Mobil | Multim | Enterp | Nokia | Common | Elimina | Group |
| | e | edia | rise | Siemen | Group | tions | |
| | Phone | | Soluti | s | Functi | | |
| | s | | ons | Networ | ons | | |
| | | | | ks | | | |
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--------------------------------------------------------------------------------
| Net sales | 6 131 | 2 580 | 526 | 3 674 | | -13 | 12 |
| | | | | | | | 898 |
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| Gross profit | 2 102 | 1 037 | 239 | 1 038 | 10 | | 4 426 |
--------------------------------------------------------------------------------
| Gross margin, | 34.3 | 40.2 | 45.4 | 28.3 | | | 34.3 |
| % | | | | | | | |
--------------------------------------------------------------------------------
| Research and | -304 | -238 | -63 | -686 | -95 | | -1 |
| development | | | | | | | 386 |
| expenses | | | | | | | |
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| % of net sales | 5.0 | 9.2 | 12.0 | 18.7 | | | 10.7 |
--------------------------------------------------------------------------------
| Selling and | -400 | -202 | -71 | -352 | -7 | | -1 |
| marketing | | | | | | | 032 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 6.5 | 7.8 | 13.5 | 9.6 | | | 8.0 |
--------------------------------------------------------------------------------
| Administrative | -20 | -13 | -16 | -146 | -50 | | -245 |
| and general | | | | | | | |
| expenses | | | | | | | |
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| % of net sales | 0.3 | 0.5 | 3.0 | 4.0 | | | 1.9 |
--------------------------------------------------------------------------------
| Other | 10 | -9 | -1 | 26 | 73 | | 99 |
| operating | | | | | | | |
| income and | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | 1 388 | 575 | 88 | -120 | -69 | | 1 862 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 22.6 | 22.3 | 16.7 | -3.3 | | | 14.4 |
| margin, % | | | | | | | |
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| | | | | | | | |
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| Q3 2006 BY BUSINESS GROUP, EUR | | | | | |
| million | | | | | |
--------------------------------------------------------------------------------
| (unaudited) | | | | | | | |
--------------------------------------------------------------------------------
| | Mobil | Multim | Enterp | Networ | Common | Elimina | Group |
| | e | edia | rise | ks | Group | tions | |
| | Phone | | Soluti | | Functi | | |
| | s | | ons | | ons | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 5 949 | 2 092 | 257 | 1 804 | | -2 | 10 |
| | | | | | | | 100 |
--------------------------------------------------------------------------------
| Gross profit | 1 630 | 784 | 108 | 594 | 6 | | 3 122 |
--------------------------------------------------------------------------------
| Gross margin, | 27.4 | 37.5 | 42.0 | 32.9 | | | 30.9 |
| % | | | | | | | |
--------------------------------------------------------------------------------
| Research and | -296 | -213 | -74 | -262 | -60 | | -905 |
| development | | | | | | | |
| expenses | | | | | | | |
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| % of net sales | 5.0 | 10.2 | 28.8 | 14.5 | | | 9.0 |
--------------------------------------------------------------------------------
| Selling and | -373 | -186 | -75 | -128 | -6 | | -768 |
| marketing | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 6.3 | 8.9 | 29.2 | 7.1 | | | 7.6 |
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| Administrative | -20 | -11 | -20 | -54 | -46 | | -151 |
| and general | | | | | | | |
| expenses | | | | | | | |
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| % of net sales | 0.3 | 0.5 | 7.8 | 3.0 | | | 1.5 |
--------------------------------------------------------------------------------
| Other | -162 | -8 | -4 | -19 | -5 | | -198 |
| operating | | | | | | | |
| income and | | | | | | | |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | 779 | 366 | -65 | 131 | -111 | | 1 100 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 13.1 | 17.5 | -25.3 | 7.3 | | | 10.9 |
| margin, % | | | | | | | |
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| | | | | | | | |
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| NOKIA NET SALES BY GEOGRAPHIC AREA, EUR million | |
--------------------------------------------------------------------------------
| (unaudited) | | | | | |
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| | | | 7-9/2007 | Y-o-Y | 7-9/2006 | 1-12/2006 |
| | | | | change, % | | |
--------------------------------------------------------------------------------
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| Europe | | | 4 913 | 30 | 3 771 | 15 587 |
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| Middle-East & | | 1 867 | 42 | 1 318 | 5 277 |
| Africa | | | | | |
--------------------------------------------------------------------------------
| China | | | 1 725 | 19 | 1 444 | 5 361 |
--------------------------------------------------------------------------------
| Asia-Pacific | | 2 812 | 32 | 2 125 | 8 361 |
--------------------------------------------------------------------------------
| North America | | 611 | -10 | 679 | 2 970 |
--------------------------------------------------------------------------------
| Latin America | | 970 | 27 | 763 | 3 565 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | | | 12 898 | 28 | 10 100 | 41 121 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOKIA PERSONNEL BY GEOGRAPHIC AREA | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | 30.09.07 | Y-o-Y | 30.09.06 | 31.12.06 |
| | | | | change, % | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Europe | | | 60 124 | 54 | 38 971 | 39 306 |
--------------------------------------------------------------------------------
| Middle-East & | | 4 474 | 385 | 922 | 1 021 |
| Africa | | | | | |
--------------------------------------------------------------------------------
| China | | | 13 129 | 80 | 7 277 | 7 452 |
--------------------------------------------------------------------------------
| Asia-Pacific | | 17 331 | 84 | 9 420 | 9 868 |
--------------------------------------------------------------------------------
| North America | | 5 687 | -4 | 5 918 | 5 574 |
--------------------------------------------------------------------------------
| Latin America | | 12 168 | 135 | 5 185 | 5 262 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | | | 112 913 | 67 | 67 693 | 68 483 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED PROFIT AND LOSS ACCOUNT, IFRS, EUR | | | |
| million | | | |
--------------------------------------------------------------------------------
| (unaudited) | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 7-9/20 | 7-9/20 | 1-9/20 | 1-9/20 | 1-12/20 |
| | 07 | 06 | 07 | 06 | 06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 12 898 | 10 100 | 35 341 | 29 420 | 41 121 |
--------------------------------------------------------------------------------
| Cost of sales | -8 472 | -6 978 | -23 | -19 | -27 742 |
| | | | 737 | 834 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 4 426 | 3 122 | 11 604 | 9 586 | 13 379 |
--------------------------------------------------------------------------------
| Research and development | -1 386 | -905 | -4 027 | -2 832 | -3 897 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Selling and marketing expenses | -1 032 | -768 | -3 084 | -2 307 | -3 314 |
--------------------------------------------------------------------------------
| Administrative and general | -245 | -151 | -824 | -484 | -666 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Other income | 132 | 59 | 2 173 | 446 | 522 |
--------------------------------------------------------------------------------
| Other expenses | -33 | -257 | -349 | -440 | -536 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1 862 | 1 100 | 5 493 | 3 969 | 5 488 |
--------------------------------------------------------------------------------
| Share of results of associated | -5 | 11 | 27 | 23 | 28 |
| companies | | | | | |
--------------------------------------------------------------------------------
| Financial income and expenses | 67 | 34 | 175 | 163 | 207 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before tax | 1 924 | 1 145 | 5 695 | 4 155 | 5 723 |
--------------------------------------------------------------------------------
| Tax | -364 | -289 | -745 | -1 071 | -1 357 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before minority | 1 560 | 856 | 4 950 | 3 084 | 4 366 |
| interests | | | | | |
--------------------------------------------------------------------------------
| Minority interests | 3 | -11 | 420 | -51 | -60 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit attributable to equity | 1 563 | 845 | 5 370 | 3 033 | 4 306 |
| holders of the parent | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | | | | | |
--------------------------------------------------------------------------------
| (for profit attributable to | | | | | |
| the equity holders | | | | | |
--------------------------------------------------------------------------------
| of the parent) | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.40 | 0.21 | 1.37 | 0.74 | 1.06 |
--------------------------------------------------------------------------------
| Diluted | 0.40 | 0.21 | 1.36 | 0.74 | 1.05 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of shares (1 | | | | | |
| 000 shares) | | | | | |
--------------------------------------------------------------------------------
| Basic | 3 865 | 4 037 | 3 906 | 4 087 | 4 062 |
| | 207 | 146 | 862 | 308 | 833 |
--------------------------------------------------------------------------------
| Diluted | 3 919 | 4 048 | 3 947 | 4 099 | 4 086 |
| | 284 | 306 | 207 | 655 | 529 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Depreciation and amortization, | 367 | 181 | 926 | 533 | 712 |
| total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share-based compensation | 65 | 42 | 169 | 100 | 192 |
| expense, total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET, IFRS, EUR million | | |
| (unaudited) | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | 30.09.2 | 30.09.200 | 31.12.2006 |
| | 007 | 6 | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Capitalized development costs | 396 | 236 | 251 |
--------------------------------------------------------------------------------
| Goodwill | 1 366 | 450 | 532 |
--------------------------------------------------------------------------------
| Other intangible assets | 2 433 | 254 | 298 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1 911 | 1 584 | 1 602 |
--------------------------------------------------------------------------------
| Investments in associated companies | 328 | 211 | 224 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 335 | 284 | 288 |
--------------------------------------------------------------------------------
| Deferred tax assets | 1 527 | 661 | 809 |
--------------------------------------------------------------------------------
| Long-term loans receivable | 132 | 19 | 19 |
--------------------------------------------------------------------------------
| Other non-current assets | 25 | 7 | 8 |
--------------------------------------------------------------------------------
| | 8 453 | 3 706 | 4 031 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 2 890 | 2 275 | 1 554 |
--------------------------------------------------------------------------------
| Accounts receivable | 9 754 | 5 777 | 5 888 |
--------------------------------------------------------------------------------
| Prepaid expenses and accrued income | 2 999 | 1 910 | 2 496 |
--------------------------------------------------------------------------------
| Other financial assets | 528 | 58 | 111 |
--------------------------------------------------------------------------------
| Available-for-sale investments, liquid | 5 779 | 5 501 | 5 012 |
| assets | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments, cash | 1 617 | 1 310 | 2 046 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Bank and cash | 1 762 | 1 115 | 1 479 |
--------------------------------------------------------------------------------
| | 25 329 | 17 946 | 18 586 |
--------------------------------------------------------------------------------
| Total assets | 33 782 | 21 652 | 22 617 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| Capital and reserves attributable to | | | |
| equity holders of the parent | | | |
--------------------------------------------------------------------------------
| Share capital | 246 | 246 | 246 |
--------------------------------------------------------------------------------
| Share issue premium | 575 | 2 593 | 2 707 |
--------------------------------------------------------------------------------
| Treasury shares | -2 211 | -1 365 | -2 060 |
--------------------------------------------------------------------------------
| Translation differences | -102 | 7 | -34 |
--------------------------------------------------------------------------------
| Fair value and other reserves | 19 | -49 | -14 |
--------------------------------------------------------------------------------
| Reserve for invested non-restricted | 2 460 | - | - |
| equity | | | |
--------------------------------------------------------------------------------
| Retained earnings | 12 149 | 9 752 | 11 123 |
--------------------------------------------------------------------------------
| | 13 136 | 11 184 | 11 968 |
--------------------------------------------------------------------------------
| Minority interests | 2 570 | 86 | 92 |
--------------------------------------------------------------------------------
| Total equity | 15 706 | 11 270 | 12 060 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Long-term interest-bearing liabilities | 242 | 70 | 69 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1 029 | 140 | 205 |
--------------------------------------------------------------------------------
| Other long-term liabilities | 129 | 119 | 122 |
--------------------------------------------------------------------------------
| | 1 400 | 329 | 396 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Current portion of long-term loans | 25 | - | - |
--------------------------------------------------------------------------------
| Short-term borrowing | 679 | 266 | 247 |
--------------------------------------------------------------------------------
| Accounts payable | 6 542 | 4 264 | 3 732 |
--------------------------------------------------------------------------------
| Accrued expenses | 5 629 | 3 206 | 3 796 |
--------------------------------------------------------------------------------
| Provisions | 3 801 | 2 317 | 2 386 |
--------------------------------------------------------------------------------
| | 16 676 | 10 053 | 10 161 |
--------------------------------------------------------------------------------
| Total shareholders' equity and | 33 782 | 21 652 | 22 617 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 946 | 336 | 316 |
--------------------------------------------------------------------------------
| Shareholders' equity per share, EUR | 3.43 | 2.79 | 3.02 |
--------------------------------------------------------------------------------
| Number of shares (1 000 shares) 1) | 3 833 | 4 009 905 | 3 965 730 |
| | 549 | | |
--------------------------------------------------------------------------------
| 1) Shares owned by Group companies are | | | |
| excluded. | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT, IFRS, EUR million | | |
--------------------------------------------------------------------------------
| (unaudited) | | | |
--------------------------------------------------------------------------------
| | 1-9/2007 | 1-9/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | |
--------------------------------------------------------------------------------
| Profit attributable to equity holders of | 5 370 | 3 033 | 4 306 |
| the parent | | | |
--------------------------------------------------------------------------------
| Adjustments, total | -650 | 1 338 | 1 857 |
--------------------------------------------------------------------------------
| Profit attributable to equity holders of | 4 720 | 4 371 | 6 163 |
| the parent before change in net working | | | |
| capital | | | |
--------------------------------------------------------------------------------
| Change in net working capital | 1 037 | -801 | -793 |
--------------------------------------------------------------------------------
| Cash generated from operations | 5 757 | 3 570 | 5 370 |
--------------------------------------------------------------------------------
| Interest received | 238 | 175 | 235 |
--------------------------------------------------------------------------------
| Interest paid | -41 | -7 | -18 |
--------------------------------------------------------------------------------
| Other financial income and expenses, net | -23 | 44 | 54 |
| received | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -764 | -963 | -1 163 |
--------------------------------------------------------------------------------
| Net cash from operating activities | 5 167 | 2 819 | 4 478 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of Group companies, net of | 328 | -388 | -517 |
| acquired cash | | | |
--------------------------------------------------------------------------------
| Purchase of current available-for-sale | -3 862 | -2 879 | -3 219 |
| investments, liquid assets | | | |
--------------------------------------------------------------------------------
| Purchase of non-current available-for-sale | -66 | -66 | -88 |
| investments | | | |
--------------------------------------------------------------------------------
| Purchase of shares in associated companies | -13 | -8 | -15 |
--------------------------------------------------------------------------------
| Additions to capitalized development costs | -128 | -82 | -127 |
--------------------------------------------------------------------------------
| Long-term loans made to customers | -73 | -12 | -11 |
--------------------------------------------------------------------------------
| Proceeds from repayment and sale of | 19 | 56 | 56 |
| long-term loans receivable | | | |
--------------------------------------------------------------------------------
| Recovery of impaired long-term loans made | - | 276 | 276 |
| to customers | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payment of (-) other | -10 | -2 | -3 |
| long-term loans receivable | | | |
--------------------------------------------------------------------------------
| Proceeds from (+), payment of (-) | -27 | 235 | 199 |
| short-term loans receivable | | | |
--------------------------------------------------------------------------------
| Capital expenditures | -592 | -462 | -650 |
--------------------------------------------------------------------------------
| Proceeds from disposal of shares in | - | 1 | 1 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Proceeds from maturities and sale of | 3 091 | 4 124 | 5 058 |
| current available-for-sale investments, | | | |
| liquid assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of non-current | 28 | 20 | 17 |
| available-for-sale investments | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets | 108 | 24 | 29 |
--------------------------------------------------------------------------------
| Dividends received | 13 | - | - |
--------------------------------------------------------------------------------
| Net cash used in/from investing activities | -1 184 | 837 | 1 006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from stock option exercises | 148 | 34 | 46 |
--------------------------------------------------------------------------------
| Purchase of treasury shares | -2 883 | -2 675 | -3 371 |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings | 141 | 57 | 56 |
--------------------------------------------------------------------------------
| Repayment of long-term borrowings | -30 | -7 | -7 |
--------------------------------------------------------------------------------
| Proceeds from (+), payment of (-) | 222 | -106 | -137 |
| short-term borrowings | | | |
--------------------------------------------------------------------------------
| Dividends paid | -1 722 | -1 553 | -1 553 |
--------------------------------------------------------------------------------
| Net cash used in financing activities | -4 124 | -4 250 | -4 966 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign exchange adjustment | -5 | -39 | -51 |
--------------------------------------------------------------------------------
| Net increase (+)/decrease (-) in cash and | -146 | -633 | 467 |
| cash equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at beginning of | 3 525 | 3 058 | 3 058 |
| period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of period | 3 379 | 2 425 | 3 525 |
--------------------------------------------------------------------------------
| NB: The figures in the consolidated cash flow statement cannot be directly |
| traced from the balance sheet |
--------------------------------------------------------------------------------
| without additional information as a result of acquisitions and disposals of |
| subsidiaries and net foreign |
--------------------------------------------------------------------------------
| exchange differences arising on | | | |
| consolidation. | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, IFRS, EUR | |
| million | |
--------------------------------------------------------------------------------
| (unaudited | | | | | | | | | | |
| ) | | | | | | | | | | |
--------------------------------------------------------------------------------
| | Sh | Sha | Tre | Trans | Fair | Rese | Reta | Befo | Min | Tota |
| | ar | re | asu | latio | valu | rve | ined | re | o-r | l |
| | e | iss | ry | n | e | for | earn | mino | ity | equi |
| | ca | ue | sha | diffe | and | inve | ings | rity | int | ty |
| | pi | pre | res | rence | othe | sted | | | er- | |
| | ta | miu | | | r | non- | | | est | |
| | l | m | | | rese | rest | | | | |
| | | | | | rves | rict | | | | |
| | | | | | | ed | | | | |
| | | | | | | equi | | | | |
| | | | | | | ty | | | | |
--------------------------------------------------------------------------------
| Balance at | 26 | 2 | -3 | 69 | -176 | . | 13 | 12 | 205 | 12 |
| December | 6 | 458 | 616 | | | | 154 | 155 | | 360 |
| 31, 2005 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tax | | 17 | | | | | | 17 | | 17 |
| benefit on | | | | | | | | | | |
| stock | | | | | | | | | | |
| options | | | | | | | | | | |
| exercised | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translatio | | | | -115 | | | | -115 | -9 | -124 |
| n | | | | | | | | | | |
| difference | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | 53 | | | | 53 | | 53 |
| investment | | | | | | | | | | |
| hedge | | | | | | | | | | |
| gains, net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | 127 | | | 127 | | 127 |
| hedges, | | | | | | | | | | |
| net of tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Available- | | | | | 0 | | | 0 | | 0 |
| for-sale | | | | | | | | | | |
| investment | | | | | | | | | | |
| s, net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | 4 | 4 | -1 | 3 |
| increase, | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 3 | 3 | 51 | 3 |
| | | | | | | | 033 | 033 | | 084 |
--------------------------------------------------------------------------------
| Total | | | | | | | | | |
| recognized | | | | | | | | | |
| income and | | | | | | | | | |
--------------------------------------------------------------------------------
| expense | - | 17 | - | -62 | 127 | - | 3 | 3 | 42 | 3 |
| | | | | | | | 037 | 119 | | 160 |
--------------------------------------------------------------------------------
| Stock | | 34 | | | | | | 34 | | 34 |
| options | | | | | | | | | | |
| exercised | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | | -1 | | | | | | -1 | | -1 |
| options | | | | | | | | | | |
| exercised | | | | | | | | | | |
| related to | | | | | | | | | | |
| acquisitio | | | | | | | | | | |
| ns | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-base | | 62 | | | | | | 62 | | 62 |
| d | | | | | | | | | | |
| compensati | | | | | | | | | | |
| on | | | | | | | | | | |
--------------------------------------------------------------------------------
| Settlement of | 3 | 34 | | | | | 37 | | 37 |
| performance | | | | | | | | | |
| shares | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisitio | | | -2 | | | | | -2 | | -2 |
| n of | | | 713 | | | | | 713 | | 713 |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Reissuance | | | 3 | | | | | 3 | | 3 |
| of | | | | | | | | | | |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cancellati | -2 | 20 | 4 | | | | -4 | - | | - |
| on of | 0 | | 927 | | | | 927 | | | |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | -1 | -1 | -41 | -1 |
| | | | | | | | 512 | 512 | | 553 |
--------------------------------------------------------------------------------
| Acquisitio | | | | | | | | - | -11 | -119 |
| n of | | | | | | | | | 9 | |
| minority | | | | | | | | | | |
| interests | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | -2 | 118 | 2 | - | - | - | -6 | -4 | -16 | -4 |
| other | 0 | | 251 | | | | 439 | 090 | 0 | 250 |
| equity | | | | | | | | | | |
| movements | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance at | 24 | 2 | -1 | 7 | -49 | - | 9 | 11 | 87 | 11 |
| September | 6 | 593 | 365 | | | | 752 | 184 | | 270 |
| 30, 2006 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at | 24 | 2 | -2 | -34 | -14 | - | 11 | 11 | 92 | 12 |
| December | 6 | 707 | 060 | | | | 123 | 968 | | 060 |
| 31, 2006 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Excess tax | | 88 | | | | | | 88 | 4 | 92 |
| benefit on | | | | | | | | | | |
| share-base | | | | | | | | | | |
| d | | | | | | | | | | |
| compensati | | | | | | | | | | |
| on | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translatio | | | | -89 | | | | -89 | 4 | -85 |
| n | | | | | | | | | | |
| difference | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | 21 | | | | 21 | | 21 |
| investment | | | | | | | | | | |
| hedge | | | | | | | | | | |
| gains, net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash flow | | | | | -18 | | | -18 | | -18 |
| hedges, | | | | | | | | | | |
| net of tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Available- | | | | | 51 | | | 51 | | 51 |
| for-sale | | | | | | | | | | |
| investment | | | | | | | | | | |
| s, net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | 74 | 74 | | 74 |
| increase, | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 5 | 5 | -42 | 4 |
| | | | | | | | 370 | 370 | 0 | 950 |
--------------------------------------------------------------------------------
| Total | - | 88 | - | -68 | 33 | - | 5 | 5 | -41 | 5 |
| recognized | | | | | | | 444 | 497 | 2 | 085 |
| income and | | | | | | | | | | |
| expense | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | | 49 | | | | 99 | | 148 | | 148 |
| options | | | | | | | | | | |
| exercised | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | | -3 | | | | | | -3 | | -3 |
| options | | | | | | | | | | |
| exercised | | | | | | | | | | |
| related to | | | | | | | | | | |
| acquisitio | | | | | | | | | | |
| ns | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-base | | 164 | | | | | | 164 | | 164 |
| d | | | | | | | | | | |
| compensati | | | | | | | | | | |
| on | | | | | | | | | | |
--------------------------------------------------------------------------------
| Settlement of | -69 | 44 | | | | | -25 | | -25 |
| performance | | | | | | | | | |
| shares | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquisitio | | | -2 | | | | | -2 | | -2 |
| n of | | | 934 | | | | | 934 | | 934 |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Reissuance | | 0 | 6 | | | | | 6 | | 6 |
| of | | | | | | | | | | |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cancellati | | | 2 | | | | -2 | - | | - |
| on of | | | 733 | | | | 733 | | | |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | -2 | | | | 2 | | - | | - |
| issue | | 361 | | | | 361 | | | | |
| premium | | | | | | | | | | |
| reduction | | | | | | | | | | |
| and | | | | | | | | | | |
| transfer | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | -1 | -1 | -37 | -1 |
| | | | | | | | 685 | 685 | | 722 |
--------------------------------------------------------------------------------
| Minority | | | | | | | | - | 2 | 2 |
| interest | | | | | | | | | 927 | 927 |
| on | | | | | | | | | | |
| formation | | | | | | | | | | |
| of Nokia | | | | | | | | | | |
| Siemens | | | | | | | | | | |
| Networks | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total of | - | -2 | -15 | - | - | 2 | -4 | -4 | 2 | -1 |
| other | | 220 | 1 | | | 460 | 418 | 329 | 890 | 439 |
| equity | | | | | | | | | | |
| movements | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance at | 24 | 575 | -2 | -102 | 19 | 2 | 12 | 13 | 257 | 15 |
| September | 6 | | 211 | | | 460 | 149 | 136 | 0 | 706 |
| 30, 2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS AND CONTINGENCIES, EUR | | | |
| million | | | |
--------------------------------------------------------------------------------
| (unaudited) | | | |
--------------------------------------------------------------------------------
| | | GROUP | |
--------------------------------------------------------------------------------
| | 30.09.07 | 30.09.06 | 31.12.06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Collateral for own commitments | | | |
--------------------------------------------------------------------------------
| Property under mortgages | 18 | 18 | 18 |
--------------------------------------------------------------------------------
| Assets pledged | 28 | 27 | 27 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities on behalf of | | | |
| Group companies | | | |
--------------------------------------------------------------------------------
| Guarantees for loans | 170 | - | - |
--------------------------------------------------------------------------------
| Other guarantees | 2 540 | 407 | 358 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities on behalf of | | | |
| other companies | | | |
--------------------------------------------------------------------------------
| Guarantees for loans | 3 | 28 | 23 |
--------------------------------------------------------------------------------
| Other guarantees | 1 | 2 | 2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing obligations | 502 | 605 | 665 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financing commitments | | | |
--------------------------------------------------------------------------------
| Customer finance commitments | 357 | 214 | 164 |
--------------------------------------------------------------------------------
| Venture fund commitments | 189 | 245 | 208 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS, EUR | |
| million 1) | |
--------------------------------------------------------------------------------
| (unaudited) | | | |
--------------------------------------------------------------------------------
| | 30.09.07 | 30.09.06 | 31.12.06 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign exchange forward contracts 2) | 38 251 | 32 843 | 29 859 |
--------------------------------------------------------------------------------
| Currency options bought 2) | 4 221 | 380 | 404 |
--------------------------------------------------------------------------------
| Currency options sold 2) | 350 | 189 | 193 |
--------------------------------------------------------------------------------
| Interest rate swaps and futures | 408 | 3 211 | - |
--------------------------------------------------------------------------------
| Cash settled equity options 3) | 23 | 133 | 45 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Includes the gross amount of all | | | |
| notional values for contracts that have | | | |
| not yet been settled or cancelled. The | | | |
| amount of notional value outstanding is | | | |
| not necessarily a measure or indication | | | |
| of market risk, as the exposure of | | | |
| certain contracts may be offset by that | | | |
| of other contracts. | | | |
--------------------------------------------------------------------------------
| 2) Notional amounts include contracts | | | |
| used to hedge the shareholders' equity | | | |
| of foreign subsidiaries. | | | |
--------------------------------------------------------------------------------
| 3) Cash settled equity options can be | | | |
| used to hedge risks relating to | | | |
| incentive programs and investment | | | |
| activities. | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 EUR = 1.387 USD | | | |
--------------------------------------------------------------------------------
FORWARD-LOOKING STATEMENTS
It should be noted that certain statements herein which are not historical
facts, including, without limitation, those regarding: A) the timing of product,
service and solution deliveries; B) our ability to develop, implement and
commercialize new products, services, solutions and technologies; C)
expectations regarding market growth, developments and structural changes; D)
expectations regarding our mobile device volume growth, market share, prices and
margins; E) expectations and targets for our results of operations; F) the
outcome of pending and threatened litigation; G) expectations regarding the
successful completion of contemplated acquisitions on a timely basis and our
ability to achieve set targets upon the completion of such acquisitions; and H)
statements preceded by "believe," "expect," "anticipate," "foresee," "target,"
"estimate," "designed," "plans," "will" or similar expressions are
forward-looking statements. 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 that could cause
these differences include, but are not limited to: 1) competitiveness of our
product portfolio; 2) our ability to identify key market trends and to respond
timely and successfully to the needs of our customers; 3) the extent of the
growth of the mobile communications industry, as well as the growth and
profitability of the new market segments within that industry which we target;
4) the availability of new products and services by network operators and other
market participants; 5) our ability to successfully manage costs; 6) the
intensity of competition in the mobile communications industry and our ability
to maintain or improve our market position and respond successfully to changes
in the competitive landscape; 7) the impact of changes in technology and our
ability to develop or otherwise acquire complex technologies as required by the
market, with full rights needed to use; 8) timely and successful
commercialization of complex technologies as new advanced products, services and
solutions; 9) our ability to protect the complex technologies, which we or
others develop or that we license, from claims that we have infringed third
parties' intellectual property rights, as well as our unrestricted use on
commercially acceptable terms of certain technologies in our products, services
and solution offerings; 10) our ability to protect numerous Nokia patented,
standardized, or proprietary technologies from third party infringement or
actions to invalidate the intellectual property rights of these technologies;
11) our ability to manage efficiently our manufacturing and logistics, as well
as to ensure the quality, safety, security and timely delivery of our products,
services and solutions; 12) inventory management risks resulting from shifts in
market demand; 13) our ability to source quality components and sub-assemblies
without interruption and at acceptable prices; 14) Nokia's and Siemens' ability
to successfully integrate the operations, personnel and supporting activities of
their respective businesses as a result of the merger of Nokia's networks
business and Siemens' carrier-related operations for fixed and mobile networks
forming Nokia Siemens Networks; 15) whether, as a result of investigations into
alleged violations of law by some current or former employees of Siemens,
government authorities or others take actions against Siemens and/or its
employees that may involve and affect the carrier-related assets and employees
transferred by Siemens to Nokia Siemens Networks, or there may be undetected
additional violations that may have occurred prior to the transfer, or ongoing
violations that may occur after the transfer, of such assets and employees that
could result in additional actions by government authorities; 16) the expense,
time, attention and resources of Nokia Siemens Networks and our management to
detect, investigate and resolve any situations related to alleged violations of
law involving the assets and employees of Siemens carrier-related operations
transferred to Nokia Siemens Networks; 17) any impairment of Nokia Siemens
Networks customer relationships resulting from the ongoing government
investigations involving the Siemens carrier-related operations transferred to
Nokia Siemens Networks; 18) developments under large, multi-year contracts or in
relation to major customers; 19) general economic conditions globally and, in
particular, economic or political turmoil in emerging market countries where we
do business; 20) our success in collaboration arrangements relating to
development of technologies or new products, services and solutions; 21) the
success, financial condition and performance of our collaboration partners,
suppliers and customers; 22) any disruption to information technology systems
and networks that our operations rely on; 23) exchange rate fluctuations,
including, in particular, fluctuations between the euro, which is our reporting
currency, and the US dollar, the Chinese yuan, the UK pound sterling and the
Japanese yen, as well as certain other currencies; 24) the management of our
customer financing exposure; 25) allegations of possible health risks from
electromagnetic fields generated by base stations and mobile devices and
lawsuits related to them, regardless of merit; 26) unfavorable outcome of
litigations; 27) our ability to recruit, retain and develop appropriately
skilled employees; and 28) the impact of changes in government policies, laws or
regulations; as well as the risk factors specified on pages 12-24 of Nokia's
annual report on Form 20-F for the year ended December 31, 2006 under "Item 3.D
Risk Factors." Other unknown or unpredictable factors or underlying assumptions
subsequently proving to be incorrect could cause actual results to differ
materially from those in the forward-looking statements. Nokia does not
undertake any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent legally required.
Nokia, Helsinki - October 18, 2007
Media and Investor Contacts:
Corporate Communications, tel. +358 7180 34495 or +358 7180 34900
Investor Relations Europe, tel. +358 7180 34289
Investor Relations US, tel. +1 914 368 0555
- Nokia plans to report its Q4 and full year 2007 results on January 24, 2008
- The Annual General Meeting is scheduled to be held on May 8, 2008
www.nokia.com
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