2008-07-17 12:00:00 CEST
2008-07-17 12:00:02 CEST
REGULATED INFORMATION
Nokia - Interim report (Q1 and Q3)
Nokia Q2 2008 net sales EUR 13.2 billion, EPS EUR 0.36 excl. special items (reported EPS EUR 0.29)
Nokia Corporation
Interim report
July 17, 2008 at 13.00 (CET +1)
Nokia Q2 2008 net sales EUR 13.2 billion, EPS EUR 0.36 excl. special items
(reported EPS EUR 0.29)
Market share gains and strong profitability drive EPS growth (excluding special
items)
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| NOKIA SECOND QUARTER 2008 OPERATING RESULTS SUMMARY |
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| Reported & Excluding Special Items1, 2 |
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| EUR million | Q2/2008 | Q2/2007 | YoY | Q1/2008 | QoQ |
| | | | Change | | Change |
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| Net sales - reported | 13 151 | 12 587 | 4% | 12 660 | 4% |
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| Devices & Services | 9 090 | 9 163 | -1% | 9 263 | -2% |
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| Nokia Siemens Networks | 4 067 | 3 438 | 18% | 3 401 | 20% |
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| Group operating profit - | 1 474 | 2 359 | -38% | 1 531 | -4% |
| reported | | | | | |
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| Group operating profit - | 1 934 | 1 393 | 39% | 1 864 | 4% |
| excluding special items1, | | | | | |
| 2 | | | | | |
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| Group operating margin - | 14.7% | 11.1% | | 14.7% | |
| excluding special items1, | | | | | |
| 2 | | | | | |
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| Devices & Services | 1 565 | 1 779 | -12% | 1 883 | -17% |
| operating profit - | | | | | |
| reported | | | | | |
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| D&S operating profit - | 1 824 | 1 779 | 3% | 1 964 | -7% |
| excluding special items1 | | | | | |
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| D&S operating margin - | 20.1% | 19.4% | | 21.2% | |
| excluding special items1 | | | | | |
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| Nokia Siemens Networks | -47 | -1 266 | | -74 | |
| operating profit - | | | | | |
| reported | | | | | |
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| NSN operating profit - | 154 | -361 | | -39 | |
| excluding special items1, | | | | | |
| 2 | | | | | |
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| NSN operating margin - | 3.8% | -10.5% | | -1.1% | |
| excluding special items1, | | | | | |
| 2 | | | | | |
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| Group Common Functions - | -44 | 1 846 | | -278 | |
| reported | | | | | |
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| Group Common Functions - | -44 | -25 | | -61 | |
| excluding special items1 | | | | | |
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| Net Profit - reported | 1 103 | 2 828 | -61% | 1 222 | -10% |
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| Net Profit - excluding | 1 365 | 1 259 | 8% | 1 451 | -6% |
| special items1, 2 | | | | | |
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| EPS, EUR Diluted - | 0.29 | 0.72 | -60% | 0.32 | -9% |
| reported | | | | | |
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| EPS, EUR Diluted - | 0.36 | 0.32 | 13% | 0.38 | -5% |
| excluding special items1, | | | | | |
| 2 | | | | | |
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Note 1 to table relating to figures excluding special items:
Q2 2008 special items
- EUR 259 million of charges related to closure of the Bochum site in Germany
(impacting Devices & Services operating profit).
- EUR 201 million restructuring charge and other one time items (impacting Nokia
Siemens Networks operating profit).
Please see "Q2 2007 special items" of net positive EUR 966 million, and "Q1 2008
special items" of net negative EUR 333 million, on page 11 in this press release
for a description of the special items for those quarters.
Note 2 to table relating to Nokia Group operating profit, Nokia Siemens Networks
operating profit and Nokia EPS, both reported and excluding special items, and
Nokia Group operating margin and Nokia Siemens Networks operating margin,
excluding special items:
In addition to the special items, Nokia Siemens Networks reported operating
profit in Q2 2008 included EUR 120 million of intangible asset amortization and
other purchase price accounting related items arising from the formation of
Nokia Siemens Networks; Q2 2007 included a total of EUR 297 million of
intangible asset amortization, other purchase price accounting related items and
inventory value adjustments arising from the formation of Nokia Siemens
Networks; and Q1 2008 included EUR 120 million of intangible asset amortization
and other purchase price accounting related items arising from the formation of
Nokia Siemens Networks.
EPS excluding special items, intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia Siemens
Networks was EUR 0.37 in Q2 2008; EUR 0.35 in Q2 2007 (also excluding inventory
value adjustments); and EUR 0.39 in Q1 2008.
SECOND QUARTER 2008 HIGHLIGHTS
- Nokia net sales of EUR 13.2 billion, up 4% year on year and up 4% sequentially
(up 11% and 7% at constant currency).
- Devices & Services net sales of EUR 9.1 billion, down 1% year on year and down
2% sequentially (up 6% and 1% at constant currency).
- Nokia Siemens Networks net sales of EUR 4.1 billion, up 18% year on year and
up 20% sequentially (up 26% and 23% at constant currency).
- Services and software net sales of EUR 119 million, up 42% sequentially.
- Nokia diluted EPS of EUR 0.36, up 13% year on year, excluding special items.
- Nokia operating margin of 14.7%, up from 11.1% in Q2 2007 and flat
sequentially, excluding special items.
- Devices & Services operating margin of 20.1%, up from 19.4% in Q2 2007 and
down sequentially from 21.2%, excluding special items.
- Nokia Siemens Networks operating margin of 3.8%, excluding special items, and
6.7%, excluding special items and purchase price accounting related items
arising from the formation of Nokia Siemens Networks.
- Nokia operating cash flow of EUR 1.5 billion.
- Estimated industry mobile device volumes of 303 million units, up 15% year on
year and up 3% sequentially.
- Nokia mobile device volumes of 122 million units, up 21% year on year and up
6% sequentially.
- Nokia estimated mobile device market share of 40%, up from 38% in Q2 2007 and
up from 39% sequentially.
- Nokia mobile device ASP of EUR 74, down sequentially from EUR 79
(approximately 40% of the decline was caused by the impact of exchange rate
movements).
OLLI-PEKKA KALLASVUO, NOKIA CEO: "Nokia delivered increased device market share and strong underlying
profitability in the quarter. Looking at the rest of the year, we are optimistic
and have had good feedback about the broad range of new products we expect to
sell in our device business. In the second quarter we saw good momentum in the
early stages of our services and software business, and we believe that the next
wave of growth will be driven by devices linked with services. On the
infrastructure side, Nokia Siemens Networks delivered a second quarter with good
net sales growth and improved profitability."
INDUSTRY AND NOKIA OUTLOOK
- Nokia expects industry mobile device volumes in the third quarter 2008 to be
up sequentially.
- Nokia expects its mobile device market share in the third quarter 2008 to be
approximately at the same level sequentially.
- Nokia now expects industry mobile device volumes in 2008 to grow 10% or more
from the approximately 1.14 billion units Nokia estimated for 2007. This is an
update to Nokia's earlier estimation that industry mobile device volumes would
grow approximately 10% in 2008.
- Nokia continues to target an increase in its market share in mobile devices in
2008.
- Nokia and Nokia Siemens Networks continue to target for Nokia Siemens Networks
market share to remain constant in 2008, compared to 2007.
- Nokia and Nokia Siemens Networks continue to expect the mobile infrastructure
and fixed infrastructure and related services market to be flat in Euro terms in
2008, compared to 2007.
- Nokia and Nokia Siemens Networks continued cost synergy target for Nokia
Siemens Networks is to achieve substantially all of the EUR 2.0 billion of
targeted annual cost synergies by the end of 2008, as previously announced.
OUTLOOK FOR FINANCIAL IMPACT OF NAVTEQ
Nokia expects NAVTEQ to be slightly dilutive to EPS in 2008, approximately
neutral in 2009 and accretive thereafter, excluding purchase price accounting
related items arising from the NAVTEQ acquisition. On a reported basis, Nokia
expects NAVTEQ to be slightly dilutive to EPS in 2008, 2009 and 2010, and
accretive thereafter. Nokia currently expects to recognize approximately EUR 2
billion of intangibles related primarily to the navigable map database and
customer relationships. We expect these intangibles to be amortized over
approximately five years. Net of deferred taxes, we expect the impact on our
Consolidated Profit and Loss Account of the purchase price accounting related
items arising from the NAVTEQ acquisition to be approximately EUR 250 million on
an annual basis.
Q2 2008 FINANCIAL HIGHLIGHTS
(Comparisons are given to the second quarter 2007 results, unless otherwise
indicated.)
Nokia Group
Nokia's second quarter 2008 net sales increased 4% to EUR 13.2 billion, compared
with EUR 12.6 billion in the second quarter 2007. At constant
currency, group net sales would have increased 11% year on year and 7%
sequentially.
The following chart sets out the year on year and sequential growth rates in our
net sales on a reported basis and at constant currency for the periods
indicated.
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| NOKIA SECOND QUARTER 2008 NET SALES |
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| Reported & Constant Currency1 |
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| | Q2/2008 vs. | Q2/2008 vs. Q1/2008 |
| | Q2/2007 Change | Change |
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| Group net sales - reported | 4% | 4% |
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| Group net sales - constant | 11% | 7% |
| currency1 | | |
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| | | |
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| Devices & Services net sales - | -1% | -2% |
| reported | | |
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| Devices & Services net sales - | 6% | 1% |
| constant currency1 | | |
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| | | |
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| Nokia Siemens Networks net sales | 18% | 20% |
| - reported | | |
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| Nokia Siemens Networks net sales | 26% | 23% |
| - constant currency1 | | |
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Note 1 to table relating to net sales figures at constant currency:
Change in net sales at constant currency excludes the impact of changes in
exchange rates in comparison to the Euro, our reporting currency
Nokia's second quarter 2008 reported operating profit decreased 38% to EUR 1.5
billion (including the EUR 460 million negative impact of special items),
compared with EUR 2.4 billion in the second quarter 2007 (including the EUR 966
million net positive impact of special items). The special items for the second
quarter 2008 included EUR 259 million of charges related to the closure of the
Bochum site in Germany (impacting Devices & Services operating profit) and a
restructuring charge and other one time items of EUR 201 million (impacting
Nokia Siemens Networks operating profit). The special items for the second
quarter 2007 included a EUR 1 879 million gain on the formation of Nokia Siemens
Networks (impacting Group Common Functions operating result); EUR 905 million
restructuring charges and other one-time items in Nokia Siemens Networks
(impacting Nokia Siemens Networks operating profit); a EUR 15 million gain on
sale of real estate (impacting Group Common Functions operating
result); and EUR 23 million Nokia Siemens Networks related other costs
(impacting Group Common Functions operating result). Nokia's second quarter 2008
reported operating margin was 11.2% (18.7%), including the EUR 460 million
negative impact of the special items. Excluding the special items, Nokia's
second quarter 2008 operating margin was 14.7% (11.1%).
Operating cash flow for the second quarter 2008 was EUR 1.5 billion, compared
with EUR 1.5 billion for the second quarter 2007, and total combined cash and
other liquid assets were EUR 8.0 billion at June 30, 2008, compared with EUR
11.8 billion at December 31, 2007. At June 30, 2008, our net debt-equity ratio
(gearing) was -46%, compared with -61% at December 31, 2007.
Devices & Services
In the second quarter 2008, the total mobile device volume of our Devices &
Services group reached 122 million units, representing 21% year on year growth
and a 6% sequential increase. The overall industry mobile device volume for the
same period reached 303 million units based on Nokia's estimate, representing
15% year on year growth and a 3% sequential increase.
Of the total industry mobile device volumes, converged mobile device industry
volumes in the second quarter 2008 increased to 37.1 million units, based on
Nokia's estimate, compared with an estimated 27.0 million units in the second
quarter 2007. Our own converged mobile device volumes rose to 15.3 million units
in the second quarter 2008, compared with 13.9 million units in the second
quarter 2007. We shipped over 10 million Nokia Nseries and almost 2 million
Nokia Eseries devices during the second quarter 2008.
The following chart sets out our 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) | Q2/2008 | Q2/2007 | YoY Change | Q1/2008 | QoQ Change |
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| Europe | 27.1 | 27.1 | 0.0% | 25.7 | 5.4% |
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| Middle East & | 21.1 | 17.1 | 23.4% | 20.2 | 4.5% |
| Africa | | | | | |
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| Greater China | 17.6 | 15.9 | 10.7% | 21.0 | -16.2% |
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| Asia-Pacific | 36.4 | 25.6 | 42.2% | 34.1 | 6.7% |
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| North America | 4.5 | 4.1 | 9.8% | 2.6 | 73.1% |
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| Latin America | 15.3 | 11.0 | 39.1% | 11.9 | 28.6% |
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| Total | 122.0 | 100.8 | 21.0% | 115.5 | 5.6% |
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Based on our preliminary market estimate, Nokia's market share for the second
quarter 2008 was 40%, compared with 38% in the second quarter 2007 and 39% in
the first quarter 2008. Our year on year market share increase was driven
primarily by our strong position in the fastest growing markets globally and by
strong share gains in Latin America, Asia-Pacific and a slight increase in North
America. Our market share decreased year on year in Middle East & Africa,
Greater China and Europe. We had sequential market share gains in
North America, Europe, Middle East & Africa and Asia Pacific. Our market share
decreased sequentially in Greater China and to a lesser extent in Latin America.
Our mobile device average selling price (ASP) in the second quarter 2008 was EUR
74, down from EUR 90 in the second quarter 2007 and down from EUR 79 in the
first quarter 2008. The lower year on year and sequential ASP was primarily due
to a higher proportion of lower priced products and the negative impact of the
weaker US dollar. Approximately 30% of the year on year decline and
approximately 40% of the sequential decline in ASP was caused by the impact of
changes in exchange rates. Starting from the first quarter 2008, our mobile
device ASP excludes net sales from our services and software business. Prior
periods have been reclassified for comparison purposes.
Second quarter 2008 Devices & Services net sales declined 1% to
EUR 9.1 billion, compared with EUR 9.2 billion in the second quarter 2007. At
constant currency, Devices & Services net sales would have increased 6%. Strong
overall volume growth was offset by an ASP decline, driven primarily by a higher
proportion of lower end devices and the negative impact of the weaker US dollar
on net sales in the second quarter 2008, compared to the second quarter 2007.
Net sales year on year growth was strongest in Latin America, followed by
Asia-Pacific and Middle East & Africa. Net sales were down in Europe, North
America and Greater China year on year. Of our total Devices & Services net
sales, services and software net sales were EUR 119 million in the second
quarter 2008, up from EUR 84 million in the first quarter 2008.
Devices & Services gross profit decreased 3% to EUR 3.3 billion, compared with
EUR 3.4 billion in the second quarter 2007, with a gross margin of 36.1%
(36.7%). The year on year gross margin decrease was primarily due to a higher
proportion of sales of lower end devices, a lower proportion of new high-end
devices shipping in volumes, and a mix shift of sales to lower margin regions
during the second quarter 2008.
Devices & Services reported operating profit decreased 12% to EUR 1.6 billion
(including the negative impact of the EUR 259 million special item), compared
with EUR 1.8 billion in the second quarter 2007, with a reported operating
margin of 17.2% (19.4%). Second quarter 2008 reported operating profit included
EUR 259 million of charges related to the closure of the Bochum site in Germany.
The 3% year on year increase in operating profit for the second quarter 2008,
excluding the special item, was driven primarily by effective operating expenses
control partially offset by a decrease in gross margin, compared to the second
quarter 2007. Excluding the special item, Devices & Services second quarter 2008
operating margin was 20.1% (19.4%).
Nokia Siemens Networks
Second quarter 2008 net sales increased 18% to EUR 4.1 billion, compared with
EUR 3.4 billion in the second quarter 2007. At constant currency, Nokia Siemens
Networks net sales would have increased 26%. Net sales year on year growth was
strongest in Latin America, followed by Middle East & Africa, Greater China and
Europe. Net sales were down in Asia-Pacific and North America. The higher year
on year net sales primarily reflected the favorable comparison to the second
quarter 2007, which was negatively impacted by challenges related to the start
of operations of Nokia Siemens Networks, which commenced on April 1, 2007.
The following chart sets out Nokia Siemens Networks net sales for the periods
indicated, as well as the year on year and sequential growth rates, by
geographic area.
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| NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA | |
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| EUR million | Q2/2008 | Q2/2007 | YoY Change | Q1/2008 | QoQ Change |
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| Europe | 1 412 | 1 186 | 19.1% | 1 212 | 16.5% |
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| Middle East & | 553 | 369 | 49.9% | 448 | 23.4% |
| Africa | | | | | |
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| Greater China | 413 | 294 | 40.5% | 269 | 53.5% |
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| Asia-Pacific | 1 076 | 1 183 | -9.0% | 944 | 14.0% |
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| North America | 158 | 164 | -3.7% | 192 | -17.7% |
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| Latin America | 455 | 242 | 88.0% | 336 | 35.4% |
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| Total | 4 067 | 3 438 | 18.3% | 3 401 | 19.6% |
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Nokia Siemens Networks gross profit increased 114% to EUR 1.1 billion, compared
with EUR 534 million in the second quarter 2007, with a gross margin of 28.2%
(15.5%). The increase in gross profit in the second quarter 2008 resulted
primarily from the favorable comparison to the second quarter 2007, which had
significant costs associated with restructuring charges, other special items and
inventory value adjustments related to the start of operations of Nokia Siemens
Networks.
Nokia Siemens Networks had a second quarter reported operating loss of EUR 47
million (including the negative impact of EUR 201 million in special items),
compared with a reported operating loss of EUR 1.3 billion in the second quarter
2007 (including the negative impact of EUR 905 million in special items), with a
reported operating margin of -1.2% (-36.8%). The reported second quarter 2008
operating loss included a restructuring charge and other one time items of EUR
201 million. The reported second quarter 2007 operating profit included a charge
of EUR 905 million related to Nokia Siemens Networks restructuring costs and
other one time charges. The operating margin for the second quarter 2008,
excluding these special items, was 3.8% (-10.5%).
The operating profit in the second quarter 2008, both reported and excluding
special items, also included EUR 120 million of intangible asset amortization
and other purchase price accounting related items arising from the formation of
Nokia Siemens Networks. Second quarter 2008 operating margin was a positive
6.7%, excluding both the special items and the purchase price accounting related
items arising from the formation of Nokia Siemens Networks. The operating profit
in the second quarter 2007, both reported and excluding special items, also
included EUR 297 million of purchase price accounting related items arising from
the formation of Nokia Siemens Networks (EUR 115 million) and inventory value
adjustments (EUR 182 million). Second quarter 2007 operating margin was -2%,
excluding both the special items, the purchase price accounting related items
and the inventory value adjustments arising from the formation of Nokia Siemens
Networks. The year on year improvement in operating profit, excluding both the
special items, the purchase price accounting related items and the inventory
value adjustments arising from the formation of Nokia Siemens Networks,
reflected the higher net sales, improved gross margin and lower operating
expenses. Nokia Siemens Networks continued to be on track to deliver the annual
EUR 2 billion cost synergy target as previously announced.
Q2 2008 OPERATING HIGHLIGHTS
Nokia
- Nokia announced plans to acquire Symbian Limited, the UK based software
company that develops and licenses Symbian OS, the leading converged device
software.
- Nokia and nine other industry leaders announced plans to establish the Symbian
Foundation to manage and unify the platform, to license it on a royalty-free
basis and ultimately to make it available as an open source platform within two
years. To date, more than 30 industry leading companies have announced their
support for the initiative and intent to join.
- Nokia announced that it had completed its acquisition of Trolltech ASA, a
recognized software provider with world-class software development platforms and
frameworks.
Devices
- The Nokia E71 and Nokia E66, optimized for email, were announced in June.
These devices support email accounts from more than 1,000 ISPs around the
world, including Gmail, Yahoo! mail and Hotmail. Additionally, the Nokia E71 and
Nokia E66 support corporate email solutions, including Microsoft Exchange, Nokia
Intellisync Wireless Email solution, SYSTEM Seven and Visto Mobile email. The
Nokia E71 also began shipping during the quarter.
- Two other key products, the Nokia N78 and Nokia 6220, also began shipping
during the quarter.
- As part of our renewed strategy for North America, we announced the Nokia 6205
exclusively with Verizon in June. The Nokia 6205 is scheduled to begin shipping
in July.
- In April, Nokia unveiled a new range of mobile devices specifically for entry
markets, highlighted by the Nokia 5000, our first mega-pixel device priced at
under EUR 100. All of these devices offer support for email.
- In June, Nokia unveiled our latest collection of style-driven devices, the
Supernova collection. The flagship model of the collection, the Nokia 7610
Supernova, is available in a range of exchangeable color covers.
Services & Software
- Sony BMG Music Entertainment signed up to support Nokia Comes With Music, with
the top three music labels -- Universal Music Group International, Warner Music
Group and Sony BMG Music Entertainment -- now committed to this service concept.
- The Nokia Music Store opened in Australia, France, Italy, the Netherlands,
Singapore and Sweden, bringing to 10 the total number of stores opened by the
end of the second quarter.
- The N-Gage mobile games service became commercially available. The service
allows consumers to try all N-Gage games for free from any one of the tens of
millions of compatible Nokia devices in the market.
- Nokia Maps 2.0 - our next generation location based service - was released and
downloaded over 406 000 times during the quarter.
- Nokia announced the acquisition of Plazes AG, to help Nokia to accelerate its
vision of bringing people and places closer together, in line with our broader
services strategy.
Nokia Siemens Networks
- Nokia Siemens Networks signed a multi-year managed services network operations
agreement with Embarq Corporation in the United States. Nokia Siemens Networks
also won a consulting contract with China Mobile Group Beijing Ltd to improve
the operator's user experience.
- Nokia Siemens Networks demonstrated its Internet High Speed Packet Access
(I-HSPA) solution with the world's fastest data call using a mobile device in a
test with Mobilkom Austria, in which data speeds reached 10.1 Mbps.
- Nokia Siemens Networks launched the industry's first DWDM single optical
platform serving Metro to Core and added internet access to its Village
Connection solution.
- Nokia Siemens Networks won contracts with Celcom in Malaysia, Tusmobil in
Slovenia, TIM in Brazil, Zain in Iraq, DTAC in Thailand and both Indosat and
Telkomsel in Indonesia.
- Nokia Siemens Networks signed contracts for Mobile TV services with Swisscom
(in partnership with Nokia) and SingTel in Singapore. It also signed a contract
with T-Mobile Austria for its subscriber data management solution, which allows
the operator to manage its customers' experience more proactively.
- In May, a consortium led by Nokia Siemens Networks launched a commercial
hosted mobile broadband service throughout Thalys' high-speed European rail
network. Nokia Siemens Networks also concluded deals with GSM-Railway in India
and Europe.
For more information on the operating highlights mentioned above, please refer
to related press announcements at the following links:
http://www.nokia.com/press and http://www.nokiasiemensnetworks.com/press.
NOKIA IN THE SECOND QUARTER 2008
(International Financial Reporting Standards (IFRS) comparisons given to the
second quarter 2007 results, unless otherwise indicated.)
As of January 1, 2008, our three mobile device business groups, Mobile Phones,
Multimedia and Enterprise Solutions, and the supporting horizontal groups were
replaced by an integrated business segment, Devices & Services. Prior period
results for Nokia and its reportable segments have been regrouped for
comparability purposes according to the new reportable segments (on an unaudited
basis). Devices & Services has three business units, Devices, Services &
Software and Markets, supported by a Corporate Development Office. Link to
regrouped 2007 financials: www.nokia.com/investors.
Nokia's net sales increased 4% to EUR 13 151 million (EUR 12 587 million). Net
sales of Devices & Services decreased 1% to EUR 9 090 million (EUR 9 163
million). Net sales of Nokia Siemens Networks increased 18% to EUR 4 067 million
(EUR 3 438 million).
Reported operating profit decreased 38% to EUR 1 474 million (EUR 2 359
million), representing a reported operating margin of 11.2% (18.7%). Reported
operating profit in Devices & Services decreased 12% to
EUR 1 565 million (EUR 1 779 million), representing a reported operating margin
of 17.2% (19.4%). The reported operating loss in Nokia Siemens Networks was EUR
47 million (loss of EUR 1 266 million), representing an operating margin of
-1.2% (-36.8%). Group Common Functions expenses totaled EUR 44 million (positive
EUR 1 846 million).
Financial income was EUR 3 million (EUR 60 million). Reported Profit before tax
and minority interests was EUR 1 477 million (EUR 2 446 million). Reported net
profit totaled EUR 1 103 million (EUR 2 828 million). Reported earnings per
share decreased to EUR 0.29 (basic) and to EUR 0.29 (diluted), compared to EUR
0.72 (basic) and EUR 0.72 (diluted) in the second quarter 2007. Earnings per
share, excluding special items, increased to EUR 0.36 (diluted), compared to EUR
0.32 (diluted) in the second quarter 2007.
NOKIA IN JANUARY - JUNE 2008
(International Financial Reporting Standards (IFRS) comparisons given to the
January-June 2007 results, unless otherwise indicated.)
As of January 1, 2008, our three mobile device business groups, Mobile Phones,
Multimedia and Enterprise Solutions, and the supporting horizontal groups were
replaced by an integrated business segment, Devices & Services. Prior period
results for Nokia and its reportable segments have been regrouped for
comparability purposes according to the new reportable segments (on an unaudited
basis). Devices & Services has three business units, Devices, Services &
Software and Markets, supported by a Corporate Development Office. Link to
regrouped 2007 financials: www.nokia.com/investors.
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 periods from April 1, 2007
are not directly comparable to any prior period results. Prior periods include
the former Nokia Networks business group only.
Nokia's net sales increased 15% to EUR 25 811 million (EUR 22 443 million). Net
sales of Devices & Services increased 6% to EUR 18 353 million (EUR 17 326
million). Net sales of Nokia Siemens Networks were EUR 7 468 million (EUR 5 135
million).
Reported operating profit decreased to EUR 3 005 million (EUR 3 631 million),
representing a reported operating margin of 11.6% (16.2%). Reported operating
profit in Devices & Services increased 14% to EUR 3 448 million (EUR 3 031
million), representing a reported operating margin of 18.8% (17.5%). Reported
operating loss in Nokia Siemens Networks was EUR 121 million (EUR 1 188
million), representing a reported operating margin of -1.6% (-23.1%). Group
Common Functions reported expenses totaled EUR 322 million (positive EUR 1 788
million, including a gain of EUR 1 879 million on the formation of Nokia Siemens
Networks).
In the period from January to June 2008, net financial income was EUR 71 million
(EUR 108 million). Reported profit before tax and minority interests was EUR 3
084 million (EUR 3 771 million). Reported net profit totaled EUR 2 325 million
(EUR 3 807 million). Reported earnings per share decreased to EUR 0.61 (basic)
and to EUR 0.61 (diluted), compared with EUR 0.97 (basic) and EUR 0.96 (diluted)
in the first six months of 2007. Earnings per share, excluding special items,
increased to EUR 0.74 EUR (diluted), compared to EUR 0.58 (diluted) in the first
six months of 2007.
PERSONNEL
The average number of employees during January-June 2008 was 115 786. At June
30, 2008, we employed a total of 117 212 people (112 262 people at December 31,
2007).
SHARES
The total number of Nokia shares at June 30, 2008 was 3 800 415 410. At June 30,
2008, Nokia and its subsidiary companies owned 90 255 504 Nokia shares,
representing approximately 2.4% of the total number of Nokia shares and the
total voting rights.
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| Q2 2008 BY REPORTABLE SEGMENT, EUR million |
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| (unaudited) |
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| | Devices & | Nokia | Group | Eliminat | Group |
| | Services | Siemens | Common | ions | |
| | | Networks | Functions | | |
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| Net sales | 9 090 | 4 067 | - | -6 | 13 151 |
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| Gross profit | 3 278 | 1 146 | - | - | 4 424 |
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| Gross margin, % | 36.1 | 28.2 | | | 33.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Research and | -741 | -653 | -2 | - | -1 396 |
| development | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 8.2 | 16.1 | | | 10.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Selling and | -630 | -359 | -1 | - | -990 |
| marketing | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 6.9 | 8.8 | | | 7.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Administrative | -115 | -188 | -35 | - | -338 |
| and general | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 1.3 | 4.6 | | | 2.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating | -227 | 7 | -6 | - | -226 |
| income and | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1 565 | -47 | -44 | - | 1 474 |
--------------------------------------------------------------------------------
| Operating margin, | 17.2 | -1.2 | | | 11.2 |
| % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Q2 2007 BY REPORTABLE SEGMENT, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | Devices & | Nokia | Group | Eliminat | Group |
| | Services | Siemens | Common | ions | |
| | | Networks | Functions | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 9 163 | 3 438 | 20 | -34 | 12 587 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 3 365 | 534 | 7 | - | 3 906 |
--------------------------------------------------------------------------------
| Gross margin, | 36.7 | 15.5 | | | 31.0 |
| % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Research and | -723 | -986 | -4 | - | -1 713 |
| development | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 7.9 | 28.7 | | | 13.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Selling and | -761 | -499 | -2 | - | -1 262 |
| marketing | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 8.3 | 14.5 | | | 10.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Administrative | -92 | -285 | -22 | - | -399 |
| and general | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 1.0 | 8.3 | | | 3.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other | -10 | -30 | 1867 | - | 1 827 |
| operating | | | | | |
| income and | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | 1 779 | -1 266 | 1 846 | - | 2 359 |
| profit | | | | | |
--------------------------------------------------------------------------------
| Operating | 19.4 | -36.8 | | | 18.7 |
| margin, % | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOKIA NET SALES BY GEOGRAPHIC AREA, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | 4-6/2008 | Y-o-Y | 4-6/2007 | 1-12/2007 |
| | | change, % | | |
--------------------------------------------------------------------------------
| Europe | 4 657 | -3 | 4 792 | 20 030 |
--------------------------------------------------------------------------------
| Middle-East & | 1 935 | 14 | 1 695 | 7 211 |
| Africa | | | | |
--------------------------------------------------------------------------------
| Greater China | 1 583 | 4 | 1 523 | 6 398 |
--------------------------------------------------------------------------------
| Asia-Pacific | 3 148 | 2 | 3 087 | 11 295 |
--------------------------------------------------------------------------------
| North America | 503 | -5 | 527 | 2 278 |
--------------------------------------------------------------------------------
| Latin America | 1 325 | 38 | 963 | 3 846 |
--------------------------------------------------------------------------------
| Total | 13 151 | 4 | 12 587 | 51 058 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOKIA PERSONNEL BY GEOGRAPHIC AREA |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | 30.06.08 | Y-o-Y | 30.06.07 | 31.12.07 |
| | | change, % | | |
--------------------------------------------------------------------------------
| Europe | 60 345 | -1 | 60 873 | 58 090 |
--------------------------------------------------------------------------------
| Middle-East & Africa | 5 093 | 15 | 4 431 | 4 509 |
--------------------------------------------------------------------------------
| Greater China | 13 946 | 9 | 12 814 | 13 272 |
--------------------------------------------------------------------------------
| Asia-Pacific | 20 041 | 28 | 15 613 | 18 117 |
--------------------------------------------------------------------------------
| North America | 5 916 | 3 | 5 739 | 5 817 |
--------------------------------------------------------------------------------
| Latin America | 11 871 | 14 | 10 401 | 12 457 |
--------------------------------------------------------------------------------
| Total | 117 212 | 7 | 109 871 | 112 262 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED PROFIT AND LOSS ACCOUNT, IFRS, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Net sales | 13 151 | 12 587 | 25 811 | 22 443 | 51 058 |
--------------------------------------------------------------------------------
| Cost of sales | -8 727 | -8 681 | -16 860 | -15 275 | -33 781 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 4 424 | 3 906 | 8 951 | 7 168 | 17 277 |
--------------------------------------------------------------------------------
| Research and | -1 396 | -1 713 | -2 771 | -2 636 | -5 636 |
| development | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Selling and | -990 | -1 262 | -2 025 | -2 051 | -4 379 |
| marketing | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Administrative | -338 | -399 | -646 | -574 | -1 165 |
| and general | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Other income | 119 | 1 987 | 164 | 2 040 | 2 312 |
--------------------------------------------------------------------------------
| Other expenses | -345 | -160 | -668 | -316 | -424 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 1 474 | 2 359 | 3 005 | 3 631 | 7 985 |
--------------------------------------------------------------------------------
| Share of results | - | 27 | 8 | 32 | 44 |
| of associated | | | | | |
| companies | | | | | |
--------------------------------------------------------------------------------
| Financial income | 3 | 60 | 71 | 108 | 239 |
| and expenses | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before | 1 477 | 2 446 | 3 084 | 3 771 | 8 268 |
| tax | | | | | |
--------------------------------------------------------------------------------
| Tax | -394 | -44 | -801 | -381 | -1 522 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before | 1 083 | 2 402 | 2 283 | 3 390 | 6 746 |
| minority | | | | | |
| interests | | | | | |
--------------------------------------------------------------------------------
| Minority | 20 | 426 | 42 | 417 | 459 |
| interests | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit | 1 103 | 2 828 | 2 325 | 3 807 | 7 205 |
| attributable to | | | | | |
| equity holders | | | | | |
| of the parent | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings per | | | | | |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| (for profit | | | | | |
| attributable to | | | | | |
| the equity | | | | | |
| holders | | | | | |
--------------------------------------------------------------------------------
| of the parent) | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.29 | 0.72 | 0.61 | 0.97 | 1.85 |
--------------------------------------------------------------------------------
| Diluted | 0.29 | 0.72 | 0.61 | 0.96 | 1.83 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number | | | | | |
| of shares (1 000 | | | | | |
| shares) | | | | | |
--------------------------------------------------------------------------------
| Basic | 3 755 | 3 906 | 3 789 252 | 3 928 035 | 3 885 408 |
| | 241 | 768 | | | |
--------------------------------------------------------------------------------
| Diluted | 3 788 | 3 946 | 3 829 144 | 3 959 486 | 3 932 008 |
| | 068 | 398 | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Depreciation and | 334 | 386 | 681 | 559 | 1 206 |
| amortization, | | | | | |
| total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share-based | 39 | 55 | 97 | 103 | 236 |
| compensation | | | | | |
| expense, total | | | | | |
--------------------------------------------------------------------------------
Q2 2008 special items:
- EUR 259 million charges related to closure of the Bochum site in Germany
(impacting Devices & Services operating profit)
- EUR 201 million restructuring charge and other one time items (impacting Nokia
Siemens Networks operating profit)
- Excluding the net impact of these special items, diluted EPS was EUR 0.36
Q2 2007 special items:
- EUR 1 879 million non-taxable gain on formation of Nokia Siemens Networks
(impacting Group Common Functions operating result)
- EUR 905 million restructuring charges and other one-time items in Nokia
Siemens Networks (impacting Nokia Siemens Networks operating result)
- EUR 15 million gain on sale of real estate (impacting Group Common Functions
operating result)
- EUR 23 million Nokia Siemens Networks related other costs (impacting Group
Common Functions operating result)
- Excluding the net impact of these special items, diluted EPS was EUR 0.32
Q1 2008 special items:
- EUR 217 million loss due to transfer of Finnish pension liabilities (impacting
Group Common Functions)
- EUR 81 million facilities impairment and other charges related to closure of
the Bochum site in Germany (impacting Devices & Services operating profit)
- EUR 65 million gain due to transfer of Finnish pension liabilities (impacting
Nokia Siemens Networks operating profit)
- EUR 100 million restructuring charge (impacting Nokia Siemens Networks
operating profit)
- Excluding the net impact of these special items, diluted EPS was EUR 0.38
In addition to the special items, Nokia Siemens Networks reported operating
profit included the following:
- Q2 2008, EUR 120 million of intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia Siemens
Networks. Excluding the impact of these items, in addition to the net impact of
special items, diluted EPS was EUR 0.37.
- Q2 2007, EUR 297 million of intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia Siemens
Networks (EUR 115 million) and inventory value adjustments (EUR 182 million).
Excluding the impact of these items, in addition to the net impact of special
items, diluted EPS was EUR 0.35.
- Q1 2008, EUR 120 million of intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia Siemens
Networks. Excluding the impact of these items, in addition to the net impact of
special items, diluted EPS was EUR 0.39.
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET, IFRS, EUR million (unaudited) |
--------------------------------------------------------------------------------
| ASSETS | 30.06.2008 | 30.06.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Capitalized development costs | 342 | 387 | 378 |
--------------------------------------------------------------------------------
| Goodwill | 1 512 | 1 437 | 1 384 |
--------------------------------------------------------------------------------
| Other intangible assets | 2 220 | 2 557 | 2 358 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1 862 | 1 939 | 1 912 |
--------------------------------------------------------------------------------
| Investments in associated | 327 | 331 | 325 |
| companies | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments | 408 | 307 | 341 |
--------------------------------------------------------------------------------
| Deferred tax assets | 1 671 | 1 307 | 1 553 |
--------------------------------------------------------------------------------
| Long-term loans receivable | 16 | 109 | 10 |
--------------------------------------------------------------------------------
| Other non-current assets | 24 | 58 | 44 |
--------------------------------------------------------------------------------
| | 8 382 | 8 432 | 8 305 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 2 763 | 2 661 | 2 876 |
--------------------------------------------------------------------------------
| Accounts receivable | 11 084 | 8 609 | 11 200 |
--------------------------------------------------------------------------------
| Prepaid expenses and accrued | 3 277 | 2 933 | 3 070 |
| income | | | |
--------------------------------------------------------------------------------
| Current portion of long-term loans | 125 | - | 156 |
| receivable | | | |
--------------------------------------------------------------------------------
| Other financial assets | 168 | 493 | 239 |
--------------------------------------------------------------------------------
| Available-for-sale investments, | 2 771 | 5 026 | 4 903 |
| liquid assets | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments, | 3 436 | 935 | 4 725 |
| cash equivalents | | | |
--------------------------------------------------------------------------------
| Bank and cash | 1 774 | 2 346 | 2 125 |
--------------------------------------------------------------------------------
| | 25 398 | 23 003 | 29 294 |
--------------------------------------------------------------------------------
| Total assets | 33 780 | 31 435 | 37 599 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND | | | |
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Capital and reserves attributable to equity holders of the parent |
--------------------------------------------------------------------------------
| Share capital | 246 | 246 | 246 |
--------------------------------------------------------------------------------
| Share issue premium | 498 | 2 833 | 644 |
--------------------------------------------------------------------------------
| Treasury shares | -1 670 | -1 036 | -3 146 |
--------------------------------------------------------------------------------
| Translation differences | -205 | 47 | -163 |
--------------------------------------------------------------------------------
| Fair value and other reserves | -192 | -97 | 23 |
--------------------------------------------------------------------------------
| Reserve for invested | 3 314 | 42 | 3 299 |
| non-restricted equity | | | |
--------------------------------------------------------------------------------
| Retained earnings | 9 954 | 10 391 | 13 870 |
--------------------------------------------------------------------------------
| | 11 945 | 12 426 | 14 773 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Minority interests | 2 504 | 2 372 | 2 565 |
--------------------------------------------------------------------------------
| Total equity | 14 449 | 14 798 | 17 338 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Long-term interest-bearing | 169 | 106 | 203 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1 019 | 1 055 | 963 |
--------------------------------------------------------------------------------
| Other long-term liabilities | 115 | 125 | 119 |
--------------------------------------------------------------------------------
| | 1 303 | 1 286 | 1 285 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Current portion of long-term loans | 123 | 2 | 173 |
--------------------------------------------------------------------------------
| Short-term borrowing | 1 066 | 615 | 898 |
--------------------------------------------------------------------------------
| Accounts payable | 5 914 | 5 777 | 7 074 |
--------------------------------------------------------------------------------
| Accrued expenses | 6 791 | 5 299 | 7 114 |
--------------------------------------------------------------------------------
| Provisions | 4 134 | 3 658 | 3 717 |
--------------------------------------------------------------------------------
| | 18 028 | 15 351 | 18 976 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' equity and | 33 780 | 31 435 | 37 599 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 1 358 | 723 | 1 274 |
--------------------------------------------------------------------------------
| Shareholders' equity per share, | 3.22 | 3.20 | 3.84 |
| EUR | | | |
--------------------------------------------------------------------------------
| Number of shares (1 000 shares) 1) | 3 710 160 | 3 879 601 | 3 845 950 |
--------------------------------------------------------------------------------
| 1) Shares owned by Group companies | | | |
| are excluded. | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT, IFRS, EUR | | |
| million | | |
--------------------------------------------------------------------------------
| (unaudited) | | | |
--------------------------------------------------------------------------------
| | 1-6/2008 | 1-6/2007 | 1-12/2007 |
--------------------------------------------------------------------------------
| Cash flow from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Profit attributable to equity | 2 325 | 3 807 | 7 205 |
| holders of the parent | | | |
--------------------------------------------------------------------------------
| Adjustments, total | 2 062 | -1 363 | 1 269 |
--------------------------------------------------------------------------------
| Change in net working capital | -1 321 | 1 054 | 605 |
--------------------------------------------------------------------------------
| Cash generated from operations | 3 066 | 3 498 | 9 079 |
--------------------------------------------------------------------------------
| Interest received | 242 | 181 | 362 |
--------------------------------------------------------------------------------
| Interest paid | -48 | -50 | -59 |
--------------------------------------------------------------------------------
| Other financial income and | 173 | -26 | -43 |
| expenses, net received | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -1 221 | -425 | -1 457 |
--------------------------------------------------------------------------------
| Net cash from operating | 2 212 | 3 178 | 7 882 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Acquisition of Group companies, | -311 | 378 | 253 |
| net of acquired cash | | | |
--------------------------------------------------------------------------------
| Purchase of current | -521 | -2 407 | -4 798 |
| available-for-sale investments, | | | |
| liquid assets | | | |
--------------------------------------------------------------------------------
| Purchase of non-current | -71 | -47 | -126 |
| available-for-sale investments | | | |
--------------------------------------------------------------------------------
| Purchase of shares in | - | -10 | -25 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Additions to capitalized | -45 | -83 | -157 |
| development costs | | | |
--------------------------------------------------------------------------------
| Long-term loans made to | -23 | - | -261 |
| customers | | | |
--------------------------------------------------------------------------------
| Proceeds from repayment and | 56 | -11 | 163 |
| sale of long-term loans | | | |
| receivable | | | |
--------------------------------------------------------------------------------
| Proceeds from (+) / payment of | -1 | 4 | 5 |
| (-) other long-term loans | | | |
| receivable | | | |
--------------------------------------------------------------------------------
| Proceeds from (+) / payment of | -371 | 395 | -119 |
| (-) short-term loans receivable | | | |
--------------------------------------------------------------------------------
| Capital expenditures | -403 | -344 | -715 |
--------------------------------------------------------------------------------
| Proceeds from disposal of | 2 | - | 6 |
| shares in associated companies | | | |
--------------------------------------------------------------------------------
| Proceeds from disposal of | 50 | | |
| businesses | | | |
--------------------------------------------------------------------------------
| Proceeds from maturities and | 2 583 | 2 345 | 4 930 |
| sale of current | | | |
| available-for-sale investments, | | | |
| liquid assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of | 9 | 22 | 50 |
| non-current available-for-sale | | | |
| investments | | | |
--------------------------------------------------------------------------------
| Proceeds form sale of fixed | 49 | 27 | 72 |
| assets | | | |
--------------------------------------------------------------------------------
| Dividends received | - | - | 12 |
--------------------------------------------------------------------------------
| Net cash from / used in | 1 003 | 269 | -710 |
| investing activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Proceeds from stock option | 5 | 78 | 987 |
| exercises | | | |
--------------------------------------------------------------------------------
| Purchase of treasury shares | -2 753 | -1 708 | -3 819 |
--------------------------------------------------------------------------------
| Proceeds from long-term | 13 | 1 | 115 |
| borrowings | | | |
--------------------------------------------------------------------------------
| Repayment of long-term | -69 | -1 | -16 |
| borrowings | | | |
--------------------------------------------------------------------------------
| Proceeds from (+) / payment of | -30 | -351 | 661 |
| (-) short-term borrowings | | | |
--------------------------------------------------------------------------------
| Dividends paid | -1 999 | -1 722 | -1 760 |
--------------------------------------------------------------------------------
| Net cash used in financing | -4 833 | -3 703 | -3 832 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign exchange adjustment | -22 | 12 | -15 |
--------------------------------------------------------------------------------
| Net increase (+) / decrease (-) | -1 640 | -244 | 3 325 |
| in cash and cash equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 6 850 | 3 525 | 3 525 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 5 210 | 3 281 | 6 850 |
| end of period | | | |
--------------------------------------------------------------------------------
| 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) |
--------------------------------------------------------------------------------
| | Sha | Sha | Trea | Tra | Fair | Rese | Retai | Befor | Mino | Total |
| | re | re | sury | nsl | valu | rve | ned | e | rity | equit |
| | cap | iss | shar | ati | e | for | earni | minor | inte | y |
| | ita | ue | es | on | and | inve | ngs | ity | rest | |
| | l | pre | | dif | othe | sted | | | | |
| | | miu | | fer | r | non- | | | | |
| | | m | | enc | rese | rest | | | | |
| | | | | e | rves | rict | | | | |
| | | | | | | ed | | | | |
| | | | | | | equi | | | | |
| | | | | | | ty | | | | |
--------------------------------------------------------------------------------
| Balanc | 246 | 270 | -206 | -34 | -14 | - | 11123 | 11968 | 92 | 12060 |
| e at | | 7 | 0 | | | | | | | |
| Decemb | | | | | | | | | | |
| er 31, | | | | | | | | | | |
| 2006 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Tax | | -1 | | | | | | -1 | | -1 |
| benefi | | | | | | | | | | |
| t on | | | | | | | | | | |
| stock | | | | | | | | | | |
| option | | | | | | | | | | |
| s | | | | | | | | | | |
| exerci | | | | | | | | | | |
| sed | | | | | | | | | | |
--------------------------------------------------------------------------------
| Excess | | 29 | | | | | | 29 | | 29 |
| tax | | | | | | | | | | |
| benefi | | | | | | | | | | |
| t on | | | | | | | | | | |
| share- | | | | | | | | | | |
| based | | | | | | | | | | |
| compen | | | | | | | | | | |
| sation | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transl | | | | 75 | | | | 75 | 4 | 79 |
| ation | | | | | | | | | | |
| differ | | | | | | | | | | |
| ences | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | 6 | | | | 6 | | 6 |
| invest | | | | | | | | | | |
| ment | | | | | | | | | | |
| hedge | | | | | | | | | | |
| gains, | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | | | -116 | | | -116 | | -116 |
| flow | | | | | | | | | | |
| hedges | | | | | | | | | | |
| , net | | | | | | | | | | |
| of tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Availa | | | | | 33 | | | 33 | | 33 |
| ble-fo | | | | | | | | | | |
| r-sale | | | | | | | | | | |
| invest | | | | | | | | | | |
| ments, | | | | | | | | | | |
| net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -120 | -120 | | -120 |
| decrea | | | | | | | | | | |
| se, | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 3807 | 3807 | -417 | 3390 |
--------------------------------------------------------------------------------
| Total | | | | | | | | | | |
| recogn | | | | | | | | | | |
| ized | | | | | | | | | | |
| income | | | | | | | | | | |
| and | | | | | | | | | | |
--------------------------------------------------------------------------------
| expens | - | 28 | - | 81 | -83 | - | 3687 | 3713 | -413 | 3300 |
| e | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | | 46 | | | | 42 | | 88 | | 88 |
| option | | | | | | | | | | |
| s | | | | | | | | | | |
| exerci | | | | | | | | | | |
| sed | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | | -2 | | | | | | -2 | | -2 |
| option | | | | | | | | | | |
| s | | | | | | | | | | |
| exerci | | | | | | | | | | |
| sed | | | | | | | | | | |
| relate | | | | | | | | | | |
| d to | | | | | | | | | | |
| acquis | | | | | | | | | | |
| itions | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | | 100 | | | | | | 100 | | 100 |
| based | | | | | | | | | | |
| compen | | | | | | | | | | |
| sation | | | | | | | | | | |
--------------------------------------------------------------------------------
| Settle | | -46 | 44 | | | | | -2 | | -2 |
| ment | | | | | | | | | | |
| of | | | | | | | | | | |
| perfor | | | | | | | | | | |
| mance | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquis | | | -175 | | | | | -1757 | | -1757 |
| ition | | | 7 | | | | | | | |
| of | | | | | | | | | | |
| treasu | | | | | | | | | | |
| ry | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Reissu | | | 4 | | | | | 4 | | 4 |
| ance | | | | | | | | | | |
| of | | | | | | | | | | |
| treasu | | | | | | | | | | |
| ry | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cancel | | | 2733 | | | | -2733 | - | | - |
| lation | | | | | | | | | | |
| of | | | | | | | | | | |
| treasu | | | | | | | | | | |
| ry | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Divide | | | | | | | -1686 | -1686 | -37 | -1723 |
| nd | | | | | | | | | | |
--------------------------------------------------------------------------------
| Minority | | | | | | - | - | 2730 | 2730 |
| interest | | | | | | | | | |
| on | | | | | | | | | |
| formation | | | | | | | | | |
| of Nokia | | | | | | | | | |
| Siemens | | | | | | | | | |
| Networks | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | 98 | 1024 | - | - | 42 | -4419 | -3255 | 2693 | -562 |
| other | | | | | | | | | | |
| equity | | | | | | | | | | |
| moveme | | | | | | | | | | |
| nts | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balanc | 246 | 283 | -103 | 47 | -97 | 42 | 10391 | 12426 | 2372 | 14798 |
| e at | | 3 | 6 | | | | | | | |
| June | | | | | | | | | | |
| 30, | | | | | | | | | | |
| 2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balanc | 246 | 644 | -314 | -16 | 23 | 3299 | 13870 | 14773 | 2565 | 17338 |
| e at | | | 6 | 3 | | | | | | |
| Decemb | | | | | | | | | | |
| er 31, | | | | | | | | | | |
| 2007 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Excess | | -96 | | | | | | -96 | - | -96 |
| tax | | | | | | | | | | |
| benefi | | | | | | | | | | |
| t on | | | | | | | | | | |
| share- | | | | | | | | | | |
| based | | | | | | | | | | |
| compen | | | | | | | | | | |
| sation | | | | | | | | | | |
--------------------------------------------------------------------------------
| Transl | | | | -61 | | | | -61 | -13 | -74 |
| ation | | | | | | | | | | |
| differ | | | | | | | | | | |
| ences | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | 19 | | | | 19 | | 19 |
| invest | | | | | | | | | | |
| ment | | | | | | | | | | |
| hedge | | | | | | | | | | |
| gains, | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | | | -233 | | | -233 | | -233 |
| flow | | | | | | | | | | |
| hedges | | | | | | | | | | |
| , net | | | | | | | | | | |
| of tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Availa | | | | | 18 | | | 18 | | 18 |
| ble-fo | | | | | | | | | | |
| r-sale | | | | | | | | | | |
| invest | | | | | | | | | | |
| ments, | | | | | | | | | | |
| net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -17 | -17 | | -17 |
| decrea | | | | | | | | | | |
| se, | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 2325 | 2325 | -42 | 2283 |
--------------------------------------------------------------------------------
| Total | - | -96 | - | -42 | -215 | - | 2308 | 1955 | -55 | 1900 |
| recogn | | | | | | | | | | |
| ized | | | | | | | | | | |
| income | | | | | | | | | | |
| and | | | | | | | | | | |
| expens | | | | | | | | | | |
| e | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | | 99 | | | | | | 99 | | 99 |
| based | | | | | | | | | | |
| compen | | | | | | | | | | |
| sation | | | | | | | | | | |
--------------------------------------------------------------------------------
| Settle | | -14 | 116 | | | 15 | | -18 | | -18 |
| ment | | 9 | | | | | | | | |
| of | | | | | | | | | | |
| perfor | | | | | | | | | | |
| mance | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquis | | | -287 | | | | | -2873 | | -2873 |
| ition | | | 3 | | | | | | | |
| of | | | | | | | | | | |
| treasu | | | | | | | | | | |
| ry | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Reissu | | | 1 | | | | | 1 | | 1 |
| ance | | | | | | | | | | |
| of | | | | | | | | | | |
| treasu | | | | | | | | | | |
| ry | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cancel | | | 4232 | | | | -4232 | - | | - |
| lation | | | | | | | | | | |
| of | | | | | | | | | | |
| treasu | | | | | | | | | | |
| ry | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Divide | | | | | | | -1992 | -1992 | -7 | -1999 |
| nd | | | | | | | | | | |
--------------------------------------------------------------------------------
| Acquis | | | | | | | | - | 1 | 1 |
| itions | | | | | | | | | | |
| and | | | | | | | | | | |
| other | | | | | | | | | | |
| change | | | | | | | | | | |
| s in | | | | | | | | | | |
| minori | | | | | | | | | | |
| ty | | | | | | | | | | |
| intere | | | | | | | | | | |
| sts | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | - | -50 | 1476 | - | - | 15 | -6224 | -4783 | -6 | -4789 |
| of | | | | | | | | | | |
| other | | | | | | | | | | |
| equity | | | | | | | | | | |
| moveme | | | | | | | | | | |
| nts | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balanc | 246 | 498 | -167 | -20 | -192 | 3314 | 9954 | 11945 | 2504 | 14449 |
| e at | | | 0 | 5 | | | | | | |
| June | | | | | | | | | | |
| 30, | | | | | | | | | | |
| 2008 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS AND CONTINGENCIES, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | | GROUP | |
--------------------------------------------------------------------------------
| | 30.06.08 | 30.06.07 | 31.12.07 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Collateral for own commitments | | | |
--------------------------------------------------------------------------------
| Property under mortgages | 18 | 18 | 18 |
--------------------------------------------------------------------------------
| Assets pledged | 30 | 29 | 29 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities on behalf | | | |
| of Group companies | | | |
--------------------------------------------------------------------------------
| Guarantees for loans | - | 204 | - |
--------------------------------------------------------------------------------| Other guarantees | 2 653 | 3 043 | 2 563 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities on behalf | | | |
| of other companies | | | |
--------------------------------------------------------------------------------
| Financial guarantees on behalf | 147 | 5 | 130 |
| of third parties | | | |
--------------------------------------------------------------------------------
| Other guarantees | 4 | 29 | 1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing obligations | 1 217 | 569 | 998 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financing commitments | | | |
--------------------------------------------------------------------------------
| Customer finance commitments | 464 | 283 | 270 |
--------------------------------------------------------------------------------
| Venture fund commitments | 335 | 229 | 251 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1 EUR = 1.542 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,
services 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 the 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, service and solutions portfolio; 2) the extent of the growth of the
mobile communications industry and general economic conditions globally; 3) the
growth and profitability of the new market segments that we target and our
ability to successfully develop or acquire and market products, services and
solutions in those segments; 4) our ability to successfully manage costs; 5) the
intensity of competition in the mobile communications industry and our ability
to maintain or improve our market position or respond successfully to changes in
the competitive landscape; 6) 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; 7) timely and successful
commercialization of complex technologies as new advanced products, services and
solutions; 8) 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; 9) our ability to protect numerous Nokia and Nokia
Siemens Networks patented, standardized or proprietary technologies from
third-party infringement or actions to invalidate the intellectual property
rights of these technologies; 10) Nokia Siemens Networks' ability to achieve the
expected benefits and synergies from its formation to the extent and within the
time period anticipated and to successfully integrate its operations, personnel
and supporting activities; 11) whether, as a result of investigations into
alleged violations of law by some current or former employees of Siemens AG
("Siemens"), government authorities or others take further 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 have occurred after the transfer, of
such assets and employees that could result in additional actions by government
authorities; 12) 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; 13) occurrence
of any actual or even alleged defects or other quality issues in our products,
services and solutions; 14) 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; 15) inventory management risks
resulting from shifts in market demand; 16) our ability to source sufficient
amounts of fully functional components and sub-assemblies without interruption
and at acceptable prices; 17) any disruption to information technology systems
and networks that our operations rely on; 18) developments under large,
multi-year contracts or in relation to major customers; 19) 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) 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; 23)
the management of our customer financing exposure; 24) allegations of possible
health risks from electromagnetic fields generated by base stations and mobile
devices and lawsuits related to them, regardless of merit; 25) unfavorable
outcome of litigations; 26) our ability to recruit, retain and develop
appropriately skilled employees; 27) the impact of changes in government
policies, laws or regulations; and 28) our ability to effectively and smoothly
implement our new organizational structure; as well as the risk factors
specified on pages 10-25 of Nokia's annual report on Form 20-F for the year
ended December 31, 2007 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 - July 17, 2008
Media and Investor Contacts:
Corporate Communications, tel. +358 7180 34900
Investor Relations Europe, tel. +358 7180 34289
Investor Relations US, tel. +1 914 368 0555
- Nokia plans to report its Q3 2008 results on October 16, 2008
www.nokia.com
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