2010-04-22 12:00:00 CEST
2010-04-22 12:00:04 CEST
REGULATED INFORMATION
Nokia - Interim report (Q1 and Q3)
Nokia Q1 2010 net sales EUR 9.5 billion, non-IFRS EPS EUR 0.14 (reported EPS EUR 0.09)
Nokia Corporation
Interim Report
April 22, 2010 at 13.00 (CET +1)
Nokia Q1 2010 net sales EUR 9.5 billion, non-IFRS EPS EUR 0.14 (reported EPS
EUR 0.09)
Growth in year-on-year net sales, operating profit and EPS (non-IFRS and
reported)
--------------------------------------------------------------------------------
| | Non-IFRS first quarter 2010 results1 |
--------------------------------------------------------------------------------
| EUR million | Q1/2010 | Q1/2009 | YoY | Q4/2009 | QoQ |
| | | | Change | | Change |
--------------------------------------------------------------------------------
| Net sales | 9 522 | 9 276 | 3% | 11 988 | -21% |
--------------------------------------------------------------------------------
| Devices & Services | 6 663 | 6 173 | 8% | 8 179 | -19% |
--------------------------------------------------------------------------------
| NAVTEQ | 189 | 134 | 41% | 225 | -16% |
--------------------------------------------------------------------------------
| Nokia Siemens Networks | 2 718 | 2 990 | -9% | 3 625 | -25% |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 820 | 514 | 60% | 1 473 | -44% |
--------------------------------------------------------------------------------
| Devices & Services | 804 | 642 | 25% | 1257 | -36% |
--------------------------------------------------------------------------------
| NAVTEQ | 41 | 5 | 720% | 54 | -24% |
--------------------------------------------------------------------------------
| Nokia Siemens Networks | 15 | -122 | | 201 | -93% |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating margin | 8.6% | 5.5% | | 12.3% | |
--------------------------------------------------------------------------------
| Devices & Services | 12.1% | 10.4% | | 15.4% | |
--------------------------------------------------------------------------------
| NAVTEQ | 21.7% | 3.7% | | 24.0% | |
--------------------------------------------------------------------------------
| Nokia Siemens Networks | 0.6% | -4.1% | | 5.5% | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| EPS, EUR Diluted | 0.14 | 0.10 | 40% | 0.25 | -44% |
--------------------------------------------------------------------------------
| | Reported first quarter 2010 results |
--------------------------------------------------------------------------------
| EUR million | Q1/2010 | Q1/2009 | YoY | Q4/2009 | QoQ |
| | | | Change | | Change |
--------------------------------------------------------------------------------
| Net sales | 9 522 | 9 274 | 3% | 11 988 | -21% |
--------------------------------------------------------------------------------
| Devices & Services | 6 663 | 6 173 | 8% | 8 179 | -19% |
--------------------------------------------------------------------------------
| NAVTEQ | 189 | 132 | 43% | 225 | -16% |
--------------------------------------------------------------------------------
| Nokia Siemens Networks | 2 718 | 2 990 | -9% | 3 625 | -25% |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 488 | 55 | 787% | 1 141 | -57% |
--------------------------------------------------------------------------------
| Devices & Services | 831 | 547 | 52% | 1 219 | -32% |
--------------------------------------------------------------------------------
| NAVTEQ | -77 | -120 | | -56 | |
--------------------------------------------------------------------------------
| Nokia Siemens Networks | -226 | -361 | | 17 | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating margin | 5.1% | 0.6% | | 9.5% | |
--------------------------------------------------------------------------------
| Devices & Services | 12.5% | 8.9% | | 14.9% | |
--------------------------------------------------------------------------------
| NAVTEQ | -40.7% | -90.9% | | -24.9% | |
--------------------------------------------------------------------------------
| Nokia Siemens Networks | -8.3% | -12.1% | | 0.5% | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| EPS, EUR Diluted | 0.09 | 0.03 | 200% | 0.26 | -65% |
--------------------------------------------------------------------------------
Note 1 relating to non-IFRS results: Non-IFRS results exclude special items for
all periods. In addition, non-IFRS results exclude intangible asset
amortization, other purchase price accounting related items and inventory value
adjustments arising from i) the formation of Nokia Siemens Networks and ii) all
business acquisitions completed after June 30, 2008. More specific information
about the exclusions from the non-IFRS results may be found in this press
release on pages 2-3, 12-14 and 16.
Nokia believes that these non-IFRS financial measures provide meaningful
supplemental information to both management and investors regarding Nokia's
performance by excluding the above-described items that may not be indicative of
Nokia's business operating results. These non-IFRS financial measures should not
be viewed in isolation or as substitutes to the equivalent IFRS measure(s), but
should be used in conjunction with the most directly comparable IFRS measure(s)
in the reported results. A reconciliation of the non-IFRS results to our
reported results for Q1 2010 and Q1 2009 can be found in the tables on pages 10
and 12-16 of this press release. A reconciliation of our Q4 2009 non-IFRS
results can be found on pages 10 and 12-16 of our Q4 2009 Interim Report of
January 28, 2010.
FIRST QUARTER 2010 HIGHLIGHTS
- Nokia net sales of EUR 9.5 billion, up 3% year-on-year and down 21%
sequentially (up 1% and down 21% at constant currency).
- Devices & Services net sales of EUR 6.7 billion, up 8% year-on-year and down
19% sequentially (up 7% and down 19% at constant currency).
- Services net sales of EUR 148 million, down 12% sequentially; billings of EUR
228 million, up 1% sequentially.
- Nokia total mobile device volumes of 107.8 million units, up 16% year-on-year
and down 15% sequentially.
- Nokia converged mobile device (smartphone and mobile computer) volumes of 21.5
million units, up 57% year-on-year and up 3% sequentially.
- Nokia mobile device ASP (including services revenue) of EUR 62, down from EUR
64 in Q4 2009.
- Devices & Services gross margin of 32.4%, down from 33.8% in Q1 2009 and 34.3%
in Q4 2009.
- Devices & Services non-IFRS operating margin of 12.1%, up from 10.4% in Q1
2009 and down from 15.4% in Q4 2009.
- NAVTEQ non-IFRS net sales of EUR 189 million, up 41% year-on-year and down 16%
sequentially (up 46% and down 18% at constant currency).
- Nokia Siemens Networks net sales of EUR 2.7 billion, down 9% year-on-year and
down 25% sequentially (down 12% and 27% at constant currency).
- Nokia Siemens Networks non-IFRS operating margin of 0.6%, up from -4.1% in Q1
2009 and down from 5.5% in Q4 2009.
- Nokia operating cash flow of EUR 1.0 billion.
- Total cash and other liquid assets of EUR 9.7 billion at the end of Q1 2010.
- Nokia taxes were unfavorably impacted by Nokia Siemens Networks taxes as no
tax benefits are recognized for certain Nokia Siemens Networks deferred tax
items. If Nokia's estimated long-term tax rate of 26% had been applied, non-IFRS
Nokia EPS would have been approximately 1 Euro cent higher.
OLLI-PEKKA KALLASVUO, NOKIA CEO: "In Q1, Nokia delivered both year-on-year net sales and operating profit growth.
We continue to face tough competition with respect to the high end of our mobile
device portfolio, as well as challenging market conditions on the infrastructure
side.
During the quarter, we also demonstrated our ability to deliver the Nokia
smartphone experience to consumers on a global scale, with our smartphone
shipments up by more than 50% year-on-year. The consumer response to the
inclusion of our walk and drive navigation offering on our smartphones has been
tremendous. Since launching in January, 10 million Nokia smartphone users around
the world have downloaded the offering.
In infrastructure, Nokia Siemens Networks' profitability benefited from a
positive sales mix in Q1. I am also pleased to see encouraging results from the
company's focus on helping operators meet the challenge of the rapid growth in
data and signaling traffic from smartphones."
INDUSTRY AND NOKIA OUTLOOK
- Nokia expects Devices & Services net sales to be between EUR 6.7 billion and
EUR 7.2 billion in the second quarter 2010.
- Nokia expects its non-IFRS operating margin in Devices & Services to be
between 9% to 12% in the second quarter 2010.
- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks' net sales to
be between EUR 3.1 billion and EUR 3.4 billion in the second quarter 2010.
- Nokia and Nokia Siemens Networks expect the non-IFRS operating margin in Nokia
Siemens Networks to be between 0% to 3% in the second quarter 2010.
- Nokia continues to expect industry mobile device volumes to be up
approximately 10% in 2010, compared to 2009 (based on its revised definition of
the industry mobile device market applicable beginning in 2010).
- Nokia continues to target its mobile device volume market share to be flat in
2010, compared to 2009.
- Nokia continues to target to increase its mobile device value market share
slightly in 2010, compared to 2009.
- Nokia continues to target non-IFRS operating expenses in Devices & Services of
approximately EUR 5.7 billion in 2010.
- Nokia now targets Devices & Services non-IFRS operating margin of 11% to 13%
in 2010. This is an update to Nokia's earlier Devices & Services non-IFRS
operating margin target of 12% to 14% in 2010.
- Nokia and Nokia Siemens Networks continue to expect a flat market in euro
terms for the mobile and fixed infrastructure and related services market in
2010, compared to 2009.
- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks to
grow faster than the market in 2010.
- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks to
reduce its non-IFRS annualized operating expenses and production overheads by
EUR 500 million by the end of 2011, compared to the end of 2009.
- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks
non-IFRS operating margin of breakeven to 2% in 2010.
FIRST QUARTER 2010 FINANCIAL HIGHLIGHTS
(Comparisons are given to the first quarter 2009 results, unless otherwise
indicated.)
The non-IFRS results exclusions
Q1 2010 - EUR 332 million (net) consisting of:
- EUR 125 million restructuring charge and other one-time items in Nokia Siemens
Networks.
- EUR 29 million gain on sale of assets and a business in Devices & Services.
- EUR 116 million of intangible asset amortization and other purchase price
accounting related items arising from the formation of Nokia Siemens Networks.
- EUR 118 million of intangible asset amortization and other purchase price
accounting related items arising from the acquisition of NAVTEQ.
- EUR 2 million of intangible assets amortization and other purchase price
related items arising from the acquisition of OZ Communications in Devices &
Services.
Q4 2009 - EUR 332 million (net) consisting of:
- EUR 89 million restructuring charge and other one-time items in Nokia Siemens
Networks.
- EUR 22 million gain on sale of real estate in Nokia Siemens Networks.
- EUR 36 million restructuring charge in Devices & Services.
- EUR 117 million of intangible asset amortization and other purchase price
accounting related items arising from the formation of Nokia Siemens Networks.
- EUR 110 million of intangible asset amortization and other purchase price
accounting related items arising from the acquisition of NAVTEQ.
- EUR 2 million of intangible assets amortization and other purchase price
related items arising from the acquisition of OZ Communications in Devices &
Services.
Q4 2009 taxes - EUR 213 million non-cash positive effect from development and
outcome of various prior year items impacting Nokia taxes
Q1 2009 - EUR 459 million consisting of:
- EUR 34 million of impairment of intangible assets in Devices & Services.
- EUR 59 million restructuring charge in Devices & Services.
- EUR 123 million restructuring charge and other one-time items in Nokia Siemens
Networks.
- EUR 116 million of intangible assets amortization and other purchase price
related items arising from the formation of Nokia Siemens Networks.
- EUR 125 million of intangible assets amortization and other purchase price
related items arising from the acquisition of NAVTEQ.
- EUR 2 million of intangible assets amortization and other purchase price
related items arising from the acquisition of OZ Communications in Devices &
Services.
Non-IFRS results exclude special items for all periods. In addition, non-IFRS
results exclude intangible asset amortization, other purchase price accounting
related items and inventory value adjustments arising from i) the formation of
Nokia Siemens Networks and ii) all business acquisitions completed after June
30, 2008.
Nokia Group
Nokia's first quarter 2010 net sales increased 3% to EUR 9.5 billion, compared
with EUR 9.3 billion in the first quarter 2009. At constant currency, group net
sales would have increased 1% year-on-year.
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.
--------------------------------------------------------------------------------
| FIRST QUARTER 2010 NET SALES, REPORTED & CONSTANT CURRENCY1 |
--------------------------------------------------------------------------------
| | YoY | QoQ Change |
| | Change | |
--------------------------------------------------------------------------------
| Group net sales - reported | 3% | -21% |
--------------------------------------------------------------------------------
| Group net sales - constant currency1 | 1% | -21% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Devices & Services net sales - reported | 8% | -19% |
--------------------------------------------------------------------------------
| Devices & Services net sales - constant currency1 | 7% | -19% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NAVTEQ net sales - reported | 41% | -16% |
--------------------------------------------------------------------------------
| NAVTEQ net sales - constant currency1 | 46% | -18% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nokia Siemens Networks net sales - reported | -9% | -25% |
--------------------------------------------------------------------------------
| Nokia Siemens Networks net sales - constant | -12% | -27% |
| currency1 | | |
--------------------------------------------------------------------------------
| Note 1: 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 first quarter 2010 reported operating profit increased to EUR 488
million, compared with EUR 55 million in the first quarter 2009. Nokia's first
quarter 2010 non-IFRS operating profit increased 60% to EUR 820 million,
compared with EUR 514 million in the first quarter 2009. Nokia's first quarter
2010 reported operating margin was 5.1% (0.6%). Nokia's first quarter 2010
non-IFRS operating margin was 8.6% (5.5%).
Operating cash flow for the first quarter 2010 was EUR 1.0 billion. The
operating cash flow for the first quarter 2009 was EUR 0.3 billion. Total cash
and other liquid assets were EUR 9.7 billion at end of the first quarter 2010,
compared with EUR 8.1 billion at the end of the first quarter 2009. At the end
of the first quarter 2010, Nokia's net debt-equity ratio (gearing) was -31%,
compared with -14% at the end of the first quarter 2009.
Nokia is taking measures to mitigate the impact on its business of the
disruption to air traffic caused by the spread of ash following the volcanic
eruption in Iceland. Measures include adjusting our logistics operation to help
ensure component availability and product deliveries to customers. Although the
impact on our business is not quantifiable at this stage, it is anticipated
that, depending on how long they would need to be in place, the use of
alternative logistics arrangements may have an adverse impact on our net sales
and profitability going forward.
Devices & Services
Net Sales: First quarter 2010 Devices & Services net sales increased 8% to EUR
6.7 billion, compared with EUR 6.2 billion in the first quarter 2009. At
constant currency, Devices & Services net sales would have increased 7%. The net
sales increase resulted primarily from higher volumes in most regions driven by
stronger demand, partially offset by an ASP decline, compared to the first
quarter 2009.
The following chart sets out Devices & Services net sales for the periods
indicated, as well as the year-on-year and sequential growth rates, by
geographic area.
--------------------------------------------------------------------------------
| DEVICES & SERVICES NET SALES BY GEOGRAPHIC AREA |
--------------------------------------------------------------------------------
| (EUR million) | Q1/2010 | Q1/2009 | YoY | Q4/2009 | QoQ |
| | | | Change | | Change |
--------------------------------------------------------------------------------
| Europe | 2 186 | 2 136 | 2% | 3 153 | -31% |
--------------------------------------------------------------------------------
| Middle East & Africa | 1 005 | 774 | 30% | 1 148 | -12% |
--------------------------------------------------------------------------------
| Greater China | 1 458 | 1 249 | 17% | 1 243 | 17% |
--------------------------------------------------------------------------------
| Asia-Pacific | 1 363 | 1 409 | -3% | 1 783 | -24% |
--------------------------------------------------------------------------------
| North America | 219 | 301 | -27% | 257 | -15% |
--------------------------------------------------------------------------------
| Latin America | 432 | 304 | 42% | 595 | -27% |
--------------------------------------------------------------------------------
| Total | 6 663 | 6 173 | 8% | 8 179 | -19% |
--------------------------------------------------------------------------------
Of our total Devices & Services net sales, services contributed EUR 148 million
in the first quarter 2010, compared with EUR 169 million in the fourth quarter
2009. Services billings in the first quarter 2010 were EUR 228 million, compared
with EUR 226 million in the fourth quarter 2009. Due to the divestment of the
security appliance business in April 2009, services net sales of EUR 150 million
and billings of EUR 166 million in the first quarter 2009 are not directly
comparable to services net sales and billings in the first quarter 2010.
The following chart sets out our Devices & Services net sales for the periods
indicated, as well as the year-on-year and sequential growth rates, by category.
--------------------------------------------------------------------------------
| DEVICES & SERVICES NET SALES BY CATEGORY |
--------------------------------------------------------------------------------
| (EUR million) | Q1/2010 | Q1/2009 3 | YoY | Q4/2009 | QoQ |
| | | | Change3 | | Change |
--------------------------------------------------------------------------------
| Mobile phones1 | 3 325 | 3 529 | -6% | 4 294 | -23% |
--------------------------------------------------------------------------------
| Converged mobile | 3 338 | 2 602 | 28% | 3 885 | -14% |
| devices2 | | | | | |
--------------------------------------------------------------------------------
| Total | 6 663 | 6 131 | 9% | 8 179 | -19% |
--------------------------------------------------------------------------------
| Note 1: Series 30 and Series 40-based devices ranging from basic mobile |
| phones focused on voice capability to devices with a number of additional |
| functionalities, such as Internet connectivity, including the services and |
| accessories sold with them. |
--------------------------------------------------------------------------------
| Note 2: Smartphones and mobile computers, including the services and |
| accessories sold with them. |
--------------------------------------------------------------------------------
| Note 3: Does not include the net sales of the security appliance business |
| that was divested in April 2009. |
--------------------------------------------------------------------------------
Volume and Market Share: In the first quarter 2010, the total mobile device
volumes of Devices & Services were 107.8 million units, representing an increase
of 16% year-on-year and a decrease of 15% sequentially. The overall industry
mobile device volumes for the same period were 323 million units based on
Nokia's preliminary estimate, representing an increase of 11% year-on-year and a
decrease of 10% sequentially. Nokia's preliminary estimated mobile device market
share was 33% in the first quarter 2010, up from an estimated 32% in the first
quarter 2009 and down from an estimated 35% in the fourth quarter 2009. As
previously announced, beginning in 2010 we revised our definition of the
industry mobile device market that we use to estimate industry volumes. This is
due to improved measurement processes and tools that enable us to have better
visibility to estimate the number of mobile devices sold by certain new entrants
in the global mobile device market. We are applying the revised definition and
improved measurement processes and tools beginning in 2010, and retrospectively
to 2009 for comparative purposes only.
Of the total industry mobile device volumes, converged mobile device industry
volumes in the first quarter 2010 increased to 52.6 million units, based on
Nokia's preliminary estimate, compared with an estimated 36.0 million units in
the first quarter 2009 and 52.4 million units in the fourth quarter 2009. Our
own converged mobile device volumes, comprising our smartphones and mobile
computers, were 21.5 million units in the first quarter 2010, an increase of 57%
compared with 13.7 million units in the first quarter 2009 and 3% compared with
20.8 million units in the fourth quarter 2009. Nokia's preliminary estimated
share of the converged mobile device market was 41% in the first quarter 2010,
up from an estimated 38% in the first quarter 2009 and an estimated 40% in the
fourth quarter 2009.
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.
--------------------------------------------------------------------------------
| DEVICES & SERVICES MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA |
--------------------------------------------------------------------------------
| (million units) | Q1/2010 | Q1/2009 | YoY | Q4/2009 | QoQ |
| | | | Change | | Change |
--------------------------------------------------------------------------------
| Europe | 23.9 | 22.3 | 7% | 34.3 | -30% |
--------------------------------------------------------------------------------
| Middle East & | 22.2 | 14.8 | 50% | 24.3 | -9% |
| Africa | | | | | |
--------------------------------------------------------------------------------
| Greater China | 21.1 | 17.9 | 18% | 17.6 | 20% |
--------------------------------------------------------------------------------
| Asia-Pacific | 29.2 | 28.2 | 4% | 34.5 | -15% |
--------------------------------------------------------------------------------
| North America | 2.7 | 3.4 | -21% | 3.8 | -29% |
--------------------------------------------------------------------------------
| Latin America | 8.7 | 6.6 | 32% | 12.4 | -30% |
--------------------------------------------------------------------------------
| Total | 107.8 | 93.2 | 16% | 126.9 | -15% |
--------------------------------------------------------------------------------
Nokia's 16% year-on-year increase in global mobile device volumes was primarily
driven by an improved demand environment as economic conditions continued to
improve in most regions, compared with the difficult economic conditions of the
first quarter 2009. This improvement was offset to some extent by lower demand
for our mobile devices in some countries in Asia-Pacific and North America. On a
sequential basis, Nokia's 15% decline in global mobile device volumes primarily
reflected typical seasonal demand weakness in virtually all regions, offset to
some extent by strong demand in China during the New Year festive season in the
first quarter 2010. Demand was strong for our converged mobile devices in the
first quarter 2010. However, competitive pressures in the ultra-low to mid-range
product price bands, particularly in certain Asian countries, adversely affected
our mobile device volumes in the first quarter 2010.
Average Selling Price. Our mobile device average selling price (ASP) in the
first quarter 2010 was EUR 62, down from EUR 66 in the first quarter 2009 and
from EUR 64 in the fourth quarter 2009. The lower year-on-year ASP was primarily
due to general price erosion across our mobile device portfolio, offset to some
extent by a positive mix shift from sales of mobile phones towards sales of
converged mobile devices. On a sequential basis, our lower ASP was primarily
driven by price pressure, particularly in certain high-end smartphones, offset
to some extent by a positive mix shift from sales of mobile phones towards sales
of converged mobile devices. The year-on-year and sequential declines in our
converged mobile devices ASP's were mainly driven by an increase in the
proportion of such devices sold at lower price points consistent with our
strategy to reach wider groups of consumers and price pressure in certain
high-end smartphones in the first quarter 2010. As previously announced,
beginning in the first quarter 2010 our total ASP includes services net sales
given the increasing contribution of the services we sell in combination with
our devices.
The following chart sets out our Devices & Services ASP for the periods
indicated, as well as the year-on-year and sequential growth rates, by category.
--------------------------------------------------------------------------------
| DEVICES & SERVICES AVERAGE SELLING PRICE BY CATEGORY |
--------------------------------------------------------------------------------
| (EUR) | Q1/2010 | Q1/2009 | YoY | Q4/2009 | QoQ |
| | | | Change | | Change |
--------------------------------------------------------------------------------
| Mobile phones1 | 39 | 44 | -13% | 40 | -5% |
--------------------------------------------------------------------------------
| Converged mobile | 155 | 190 | -18% | 186 | -17% |
| devices2 | | | | | |
--------------------------------------------------------------------------------
| Total | 62 | 66 | -7% | 64 | -4% |
--------------------------------------------------------------------------------
| Note 1: Series 30 and Series 40-based devices ranging from basic mobile |
| phones focused on voice capability to devices with a number of additional |
| functionalities, such as Internet connectivity, including the services and |
| accessories sold with them. |
--------------------------------------------------------------------------------
| Note 2: Smartphones and mobile computers, including the services and |
| accessories sold with them. |
--------------------------------------------------------------------------------
Profitability: Devices & Services gross profit (reported and non-IFRS) increased
3% to EUR 2.2 billion, compared with EUR 2.1 billion in the first quarter 2009,
with a gross margin (reported and non-IFRS) of 32.4% (33.8%). Devices & Services
gross margin (reported and non-IFRS) was 34.3% in the fourth quarter 2009.
Overall, both the year-on-year and sequential gross margin declines were
primarily due to our product material costs declining at a lower rate than the
price erosion of our devices, especially in the high end of our mobile device
portfolio during the first quarter 2010. The year-on-year gross margin decline
was offset to some extent by a positive mix shift towards sales of higher-margin
converged mobile devices in the first quarter 2010. The first quarter 2009 gross
margin also benefited from more positive foreign exchange hedging than did the
gross margin in the first quarter 2010. Sequentially, the appreciation of the
Japanese Yen versus the Euro, lower royalty income and higher production
overhead costs relative to lower volumes in the first quarter 2010 also
contributed to the gross margin decline. Foreign exchange hedging had a positive
one-quarter impact on the gross margin in the first quarter 2010, compared to an
immaterial impact on the gross margin in the fourth quarter 2009.
Devices & Services reported operating profit increased 52% to EUR 831 million,
compared with EUR 547 million in the first quarter 2009, with a reported
operating margin of 12.5% (8.9%). Devices & Services non-IFRS operating profit
increased 25% to EUR 804 million, compared with EUR 642 million in the first
quarter 2009, with a non-IFRS operating margin of 12.1% (10.4%). The 25%
year-on-year increase in non-IFRS operating profit for the first quarter 2010
was driven primarily by higher net sales as well as lower operating and other
expenses.
Nokia is planning to deliver a family of smartphones based on the Symbian^3
software platform that is targeted to offer a clearly improved user experience,
a high standard of quality, and competitive value to consumers. We plan to
launch the first smartphone based on Symbian^3 during the second quarter 2010,
with shipments expected during the third quarter 2010.
NAVTEQ
Net Sales. First quarter 2010 NAVTEQ reported net sales increased 43%
year-on-year to EUR 189 million, compared with EUR 132 million in the first
quarter 2009, benefiting from growth in mobile device sales, particularly Nokia
mobile devices, and improved conditions in the automotive industry.
Profitability. In the first quarter 2010, NAVTEQ's reported gross profit
increased to EUR 160 million, compared with EUR 115 million in the first quarter
2009, with a gross margin of 84.7% (87.1%). Non-IFRS gross profit was EUR 160
million (EUR 117 million), with a non-IFRS gross margin of 84.7% (87.3%). In the
first quarter 2010, NAVTEQ's reported operating loss decreased to EUR 77
million, compared with a EUR 120 million loss in the first quarter 2009. The
reported operating margin was -40.7% (-90.9%). NAVTEQ's non-IFRS operating
profit was EUR 41 million (EUR 5 million), with a non-IFRS operating margin of
21.7% (3.7%) in the first quarter 2010.
Nokia Siemens Networks
Net Sales. First quarter 2010 net sales decreased 9% to EUR 2.7 billion,
compared with EUR 3.0 billion in the first quarter 2009, reflecting challenging
competitive factors and market conditions. At constant currency, Nokia Siemens
Networks net sales would have decreased 12%. Of total Nokia Siemens Networks net
sales, services contributed EUR 1.3 billion in the first quarter 2010.
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.
--------------------------------------------------------------------------------
| NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA | | |
--------------------------------------------------------------------------------
| (EUR million) | Q1/2010 | Q1/2009 | YoY | Q4/2009 | QoQ Change |
| | | | Change | | |
--------------------------------------------------------------------------------
| Europe | 1 065 | 1 097 | -3% | 1 327 | -20% |
--------------------------------------------------------------------------------
| Middle East & | 297 | 436 | -32% | 371 | -20% |
| Africa | | | | | |
--------------------------------------------------------------------------------
| Greater China | 275 | 284 | -3% | 425 | -35% |
--------------------------------------------------------------------------------
| Asia-Pacific | 632 | 692 | -9% | 818 | -23% |
--------------------------------------------------------------------------------
| North America | 153 | 169 | -9% | 244 | -37% |
--------------------------------------------------------------------------------
| Latin America | 296 | 312 | -5% | 440 | -33% |
--------------------------------------------------------------------------------
| Total | 2 718 | 2 990 | -9% | 3 625 | -25% |
--------------------------------------------------------------------------------
Profitability. Nokia Siemens Networks reported gross profit increased 11% to EUR
782 million, compared with EUR 703 million in the first quarter 2009, with a
gross margin of 28.8% (23.5%). Nokia Siemens Networks non-IFRS gross profit
increased 12% to EUR 853 million, compared with EUR 764 million in the first
quarter 2009, with a non-IFRS gross margin of 31.4% (25.6%). The higher
year-on-year non-IFRS gross profit in the first quarter 2010 was due primarily to continued progress on product cost reductions as well as an increased
proportion of sales of higher margin offerings during the quarter, offset to
some extent by lower net sales, compared to the first quarter 2009.
Nokia Siemens Networks first quarter 2010 reported operating loss was EUR 226
million, compared with a reported operating loss of EUR 361 million in the first
quarter 2009, with a reported operating margin of -8.3% (-12.1%). Nokia Siemens
Networks non-IFRS operating profit was EUR 15 million in the first quarter 2010,
compared with a non-IFRS operating loss of EUR 122 million in the first quarter
2009, with a non-IFRS operating margin of 0.6% (-4.1%). The year-on-year
improvement in Nokia Siemens Networks non-IFRS operating result primarily
reflected improved gross profitability as well as lower operating expenses.
Q1 2010 OPERATING HIGHLIGHTS
Devices & Services
- Nokia continued to make progress in the development of its key services:
- Location: Nokia introduced a new and improved version of Ovi Maps, available
for download at www.nokia.com/maps. At the same time, Nokia modified its
business model by including world-wide walk and drive navigation with the new
Ovi Maps at no extra cost with compatible Nokia smartphones. Since launching in
January, the new Ovi Maps has been downloaded by 10 million Nokia smartphone
users. Going forward, the offering will be pre-installed on Nokia's smartphones.
- Music: Nokia continued to grow its footprint in digital music, expanding its
chain of digital music stores to cover 34 markets, including several markets in
the Middle East. Nokia also increased to 28 the number of markets in which Comes
With Music, its ‘all you can eat' music offering, is available. Since the end of
the quarter, Nokia has also launched a Digital Rights Management-free Comes With
Music service in China, and announced the upcoming availability of Ovi Music
Unlimited in India. Following the launch in India, Nokia will have introduced
Comes With Music in each of the BRIC markets.
- Store: Nokia continued to grow and enhance the useability of Ovi Store.
Nokia's most popular smartphones each have access to more than 9 500 content
items (including applications) in the store, while operator support continues to
increase with mobile billing now available through over 60 operators in 19
countries. The vast majority of Ovi Store users can access the store in their
own language and pay for content in their local currency. Currently, the store
is attracting more than 1.5 million downloads a day, with the average active
user downloading more than 8 applications or items of content a month.
- Messaging: Nokia Messaging continued to grow, with more than three million
accounts now created.
- Emerging markets: Subscriptions to Nokia Life Tools, a service giving access
to agricultural information and education and entertainment services without
requiring use of GPRS or web connectivity, reached more than one million. The
service is currently available in India and Indonesia. After introducing Nokia
Money in 2009, Nokia in February 2010 launched a commercial pilot of the service
in Pune, one of the largest metropolitan areas in India, in partnership with YES
BANK. Through the service, people can transfer money to other people just by
using their mobile phone numbers, pay utility bills as well as recharge their
prepaid SIM cards (SIM top-up).
- Nokia announced the Nokia C5, a smartphone optimized for social networking and
sharing. The compact device includes access to Nokia's range of mobile services,
such as free navigation, in one affordable package, with an estimated retail
price of EUR 135, before taxes and subsidies.
- Nokia commenced shipments of the Nokia X6 16GB, a powerful, touch
entertainment smartphone.
- Nokia commenced shipments of the Nokia 2690, an entry device giving access to
Ovi Mail and featuring an FM radio and VGA camera.
- Nokia and T-Mobile USA commenced shipments of the Nokia 5230 Nuron smartphone,
which features turn by turn navigation at no extra cost and is the first Nokia
device with a United States operator preloaded with Ovi Store.
- Nokia and Intel began to merge their Maemo and Moblin software platforms to
form a single Linux-based and fully open source platform, MeeGo, for a wide
range of computing devices, including pocketable mobile computers, netbooks,
tablets, mediaphones, connected TVs and in-vehicle infotainment systems. By
creating MeeGo, Nokia and Intel plan to accelerate industry innovation and
reduce time-to-market for a range of new Internet-based applications and
services and exciting user experiences.
- Nokia announced the acquisition of Novarra, whose mobile browser and services
platform will be used by Nokia to deliver enhanced Internet experiences on
Nokia's mobile phones based on the Series 40 software platform. The acquisition
was completed in April 2010.
NAVTEQ
- NAVTEQ launched its new advanced mapping collection technology, NAVTEQ True,
further innovating the scale and quality of data collection and processing.
- NAVTEQ announced the availability of real-time traffic in the United Kingdom,
bringing to 13 the number of European countries in which uninterrupted traffic
data are available.
- NAVTEQ launched Intermediate Maps of Nigeria and Kenya, expanding map coverage
in Africa by more than 200 000 kilometers and more than 23 000 Points of
Interest.
- NAVTEQ launched Enhanced 3D City Models in Europe, providing intelligent
visual texturing to simplify navigation.
- NAVTEQ announced that Nobex Technologies selected NAVTEQ Location Point
Advertising, making location-aware advertising inventory available on Nobex
Radio Companion.
- NAVTEQ announced that the National Geospatial Intelligence Agency selected
NAVTEQ map data to support the Homeland Security Infrastructure Program.
- NAVTEQ announced the signing of Golden Tulip Hospitality Group as a Direct
Access customer for their 230 properties worldwide.
- NAVTEQ announced the development of Fiat Group Automobiles' first online Map
Update Store.
Nokia Siemens Networks
- Under a five-year managed services contract with NII Holdings, Nokia Siemens
Networks will plan, design, build, manage, and optimize their network in
Argentina, Chile, Brazil, Mexico and Peru. The contract covers the existing iDEN
networks and the upcoming 3G networks of the operator.
- Nokia Siemens Networks continued to win major contracts in key emerging
markets including India with a USD 700 million network expansion deal with
Bharti Airtel and a EUR 300 million GSM roll out and Managed Services contract
with Aircel; and in China with a 3G Radio and Core Network deal with Beijing
Mobile that supports future migration to TD-LTE.
- Nokia Siemens Networks maintained momentum in LTE with a new contract with
TeliaSonera; Nokia Siemens Networks also made the Middle East's first LTE call
with Zain Bahrain and completed a 100 Mbps data call on an LTE trial network
with M1 in Singapore.
- Nokia Siemens Networks was selected by the Iliad Group's Free Mobile business
for the supply of radio, core and applications for the 4th license 3G mobile
network in France. Nokia Siemens Networks won a contract to upgrade Telefonica's
3G network in Spain to HSPA+ paving the way for enhanced mobile broadband
services with download speeds up to 42 Mbps.
- Nokia Siemens Networks' core mobile network technology, which addresses the
signaling and capacity challenges of growing smartphone data usage, earned the
company contracts with operators including Swisscom and SFR. In response to the
increasing demand for converged devices, Nokia Siemens Networks established
Smart Labs in Finland and the United States with the aim of enhancing the
everyday experience of users of converged devices.
- Operators continued to leverage Nokia Siemens Networks' subscriber-centric
solutions to provide flexible and personalized services to its customers. Deals
were signed with Tunisiana and Vodacom Tanzania for flexible and convergent
payment services and Smart Communications in the Philippines for unified
charging and billing solution which will allow it to bring services to market
faster.
- In North America, Nokia Siemens Networks announced five contracts for its 40
Gbps optical solution, with XO Communications, Columbus Networks, Insight
Communications, NewWave Communications and Fidelity Communications. In addition,
the Optical Transport Network (OTN) Switch was launched in the quarter, a key
new product for the optical portfolio.
For more information on the operating highlights mentioned above, please refer
to related press announcements at the following links: www.nokia.com/press,
www.navteq.com/about/press.html, www.nokiasiemensnetworks.com/press
NOKIA IN THE FIRST QUARTER 2010
(The following discussion is of Nokia's reported results. Comparisons are given
to the first quarter 2009 results, unless otherwise indicated.)
Nokia's net sales increased 3% to EUR 9 522 million (EUR 9 274 million). Net
sales of Devices & Services increased 8% to EUR 6 663 million (EUR 6 173
million). Net sales of NAVTEQ increased 43% to EUR 189 million (EUR 132
million). Net sales of Nokia Siemens Networks decreased 9% to EUR 2 718 million
(EUR 2 990 million).
Operating profit increased 787% to EUR 488 million (EUR 55 million),
representing an operating margin of 5.1% (0.6%). Operating profit in Devices &
Services increased 52% to EUR 831 million (EUR 547 million), representing an
operating margin of 12.5% (8.9%). Operating loss in NAVTEQ was EUR 77 million
(operating loss EUR 120 million), representing an operating margin of -40.7%
(-90.9%). Operating loss in Nokia Siemens Networks was EUR 226 million
(operating loss EUR 361 million), representing an operating margin of -8.3%
(-12.1%). Group Common Functions reported expense totaled EUR 20 million (EUR 11
million).
In the period from January to March 2010, net financial expense was EUR 73
million (EUR 77 million). Profit before tax was EUR 411 million (loss EUR 12
million). Profit was EUR 175 million (EUR 4 million), based on a profit of EUR
349 million (EUR 122 million) attributable to equity holders of the parent and a
loss of EUR 174 million (loss of EUR 118 million) attributable to
non-controlling interests. Earnings per share increased to EUR 0.09 (basic) and
to EUR 0.09 (diluted), compared with EUR 0.03 (basic) and EUR 0.03 (diluted) in
the first quarter of 2009.
PERSONNEL
The average number of employees during the period from January to March 2010 was
125 155, of which the average number of employees at Nokia Siemens Networks was
64 281. At March 31, 2010, Nokia employed a total of 125 859 people (124 292
people at March 31, 2009), of which 64 319 were employed by Nokia Siemens
Networks (60 546 people at March 31, 2009).
SHARES
The total number of Nokia shares at March 31, 2010 was 3 744 956 052. At March
31, 2010, Nokia and its subsidiary companies owned 36 156 362 Nokia shares,
representing approximately 1.0 % of the total number of Nokia shares and the
total voting rights.
--------------------------------------------------------------------------------
| CONSOLIDATED INCOME STATEMENT, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | Reported | Reported | | Non-IFRS | Non-IFRS |
| | 1-3/2010 | 1-3/2009 | | 1-3/2010 | 1-3/2009 |
--------------------------------------------------------------------------------
| Net sales | 9 522 | 9 274 | | 9 522 | 9 276 |
--------------------------------------------------------------------------------
| Cost of sales | -6 444 | -6 371 | | -6 373 | -6 310 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Gross profit | 3 078 | 2 903 | | 3 149 | 2 966 |
--------------------------------------------------------------------------------
| Research and | -1 433 | -1 500 | | -1 280 | -1 358 |
| development expenses | | | | | |
--------------------------------------------------------------------------------
| Selling and marketing | -934 | -962 | | -825 | -855 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Administrative and | -260 | -280 | | -232 | -250 |
| general expenses | | | | | |
--------------------------------------------------------------------------------
| Other income | 103 | 56 | | 74 | 56 |
--------------------------------------------------------------------------------
| Other expenses | -66 | -162 | | -66 | -45 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 488 | 55 | | 820 | 514 |
--------------------------------------------------------------------------------
| Share of results of | -4 | 10 | | -4 | 10 |
| associated companies | | | | | |
--------------------------------------------------------------------------------
| Financial income and | -73 | -77 | | -73 | -77 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Profit before tax | 411 | -12 | | 743 | 447 |
--------------------------------------------------------------------------------
| Tax | -236 | 16 | | -287 | -117 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Profit | 175 | 4 | | 456 | 330 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Profit attributable to | 349 | 122 | | 516 | 357 |
| equity holders of the | | | | | |
| parent | | | | | |
--------------------------------------------------------------------------------
| Loss attributable to | -174 | -118 | | -60 | -27 |
| non-controlling | | | | | |
| interests | | | | | |
--------------------------------------------------------------------------------
| | 175 | 4 | | 456 | 330 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | | | | | |
| EUR (for profit | | | | | |
| attributable to the | | | | | |
| equity holders of the | | | | | |
| parent) | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.09 | 0.03 | | 0.14 | 0.10 |
--------------------------------------------------------------------------------
| Diluted | 0.09 | 0.03 | | 0.14 | 0.10 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Average number of | | | | | |
| shares | | | | | |
| (1 000 shares) | | | | | |
--------------------------------------------------------------------------------
| Basic | 3 708 477 | 3 699 879 | | 3 708 477 | 3 699 879 |
--------------------------------------------------------------------------------
| Diluted | 3 712 425 | 3 715 330 | | 3 712 425 | 3 715 330 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | 437 | 462 | | 201 | 221 |
| amortization, total | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Share-based | 6 | -25 | | 6 | -25 |
| compensation expense, | | | | | |
| total | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOKIA NET SALES BY GEOGRAPHIC AREA, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| Reported | 1-3/2010 | Y-o-Y | 1-3/2009 | 1-12/2009 |
| | | change, % | | |
--------------------------------------------------------------------------------
| Europe | 3 283 | - | 3 271 | 14 790 |
--------------------------------------------------------------------------------
| Middle-East & Africa | 1 309 | 8 | 1 217 | 5 605 |
--------------------------------------------------------------------------------
| Greater China | 1 738 | 13 | 1 534 | 6 429 |
--------------------------------------------------------------------------------
| Asia-Pacific | 2 006 | -5 | 2 101 | 8 967 |
--------------------------------------------------------------------------------
| North America | 454 | -15 | 533 | 2 061 |
--------------------------------------------------------------------------------
| Latin America | 732 | 18 | 618 | 3 132 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 9 522 | 3 | 9 274 | 40 984 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOKIA PERSONNEL BY GEOGRAPHIC AREA |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 31.03.10 | Y-o-Y | 31.03.09 | 31.12.09 |
| | | change, % | | |
--------------------------------------------------------------------------------
| Europe | 56 844 | -7 | 60 872 | 57 490 |
--------------------------------------------------------------------------------
| Middle-East & Africa | 4 599 | -9 | 5 033 | 4 172 |
--------------------------------------------------------------------------------
| Greater China | 17 134 | 15 | 14 957 | 15 774 |
--------------------------------------------------------------------------------
| Asia-Pacific | 25 323 | 16 | 21 853 | 24 382 |
--------------------------------------------------------------------------------
| North America | 7 951 | -9 | 8 719 | 7 911 |
--------------------------------------------------------------------------------
| Latin America | 14 008 | 9 | 12 858 | 13 824 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total | 125 859 | 1 | 124 292 | 123 553 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DEVICES & SERVICES, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | Reporte | Special | Non-IFR | Reported | Special | Non-IFR |
| | d | items & | S | 1-3/2009 | items & | S |
| | 1-3/201 | PPA | 1-3/201 | | PPA | 1-3/200 |
| | 0 | 1-3/2010 | 0 | | 1-3/2009 | 9 |
--------------------------------------------------------------------------------
| Net sales | 6 663 | - | 6 663 | 6 173 | - | 6 173 |
--------------------------------------------------------------------------------
| Cost of sales | -4 507 | - | -4 507 | -4 088 | - | -4 088 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Gross profit | 2 156 | - | 2 156 | 2 085 | - | 2 085 |
--------------------------------------------------------------------------------
| % of net | 32.4 | | 32.4 | 33.8 | | 33.8 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Research and | -724 | 2 | -722 | -755 | 2 | -753 |
| development | | | | | | |
| expenses 1) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 10.9 | | 10.8 | 12.2 | | 12.2 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Selling and | -547 | - | -547 | -575 | - | -575 |
| marketing | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| % of net | 8.2 | | 8.2 | 9.3 | | 9.3 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Administrativ | -92 | - | -92 | -96 | - | -96 |
| e and general | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| % of net | 1.4 | | 1.4 | 1.6 | | 1.6 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other income | 38 | -29 | 9 | -112 | 93 | -19 |
| and expenses | | | | | | |
| 2) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | 831 | -27 | 804 | 547 | 95 | 642 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| % of net | 12.5 | | 12.1 | 8.9 | | 10.4 |
| sales | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Amortization of acquired intangible assets of EUR 2 million in Q1/10 and |
| EUR 2 million in Q1/09. |
--------------------------------------------------------------------------------
| 2) Gain on sale of assets and business of EUR 29 million in Q1/10. |
| Restructuring charges of EUR 59 million and impairment of assets EUR 34 |
| million in Q1/09. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NAVTEQ, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | Reporte | Special | Non-IFR | Reported | Special | Non-IFR |
| | d | items & | S | 1-3/2009 | items & | S |
| | 1-3/201 | PPA | 1-3/201 | | PPA | 1-3/200 |
| | 0 | 1-3/2010 | 0 | | 1-3/2009 | 9 |
--------------------------------------------------------------------------------
| Net sales 1) | 189 | - | 189 | 132 | 2 | 134 |
--------------------------------------------------------------------------------
| Cost of sales | -29 | - | -29 | -17 | - | -17 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Gross profit | 160 | - | 160 | 115 | 2 | 117 |
--------------------------------------------------------------------------------
| % of net | 84.7 | | 84.7 | 87.1 | | 87.3 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Research and | -165 | 88 | -77 | -168 | 93 | -75 |
| development | | | | | | |
| expenses 2) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 87.3 | | 40.7 | 127.3 | | 56.0 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Selling and | -57 | 30 | -27 | -55 | 30 | -25 |
| marketing | | | | | | |
| expenses 3) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 30.2 | | 14.3 | 41.7 | | 18.7 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Administrativ | -15 | - | -15 | -12 | - | -12 |
| e and general | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| % of net | 7.9 | | 7.9 | 9.1 | | 9.0 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other income | - | - | - | - | - | - |
| and expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | -77 | 118 | 41 | -120 | 125 | 5 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| % of net | -40.7 | | 21.7 | -90.9 | | 3.7 |
| sales | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Deferred revenue related to acquisitions of EUR 2 million in Q1/09. |
--------------------------------------------------------------------------------
| 2) Amortization of acquired intangibles of EUR 88 million in Q1/10 and of |
| EUR 93 million in Q1/09. |
--------------------------------------------------------------------------------
| 3) Amortization of acquired intangibles of EUR 30 million in Q1/10 and of |
| EUR 30 million in Q1/09. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NOKIA SIEMENS NETWORKS, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | Reporte | Special | Non-IFR | Reported | Special | Non-IFR |
| | d | items & | S | 1-3/2009 | items & | S |
| | 1-3/201 | PPA | 1-3/201 | | PPA | 1-3/200 |
| | 0 | 1-3/2010 | 0 | | 1-3/2009 | 9 |
--------------------------------------------------------------------------------
| Net sales | 2 718 | - | 2 718 | 2 990 | - | 2 990 |
--------------------------------------------------------------------------------
| Cost of sales | -1 936 | 71 | -1 865 | -2 287 | 61 | -2 226 |
| 1) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Gross profit | 782 | 71 | 853 | 703 | 61 | 764 |
--------------------------------------------------------------------------------
| % of net | 28.8 | | 31.4 | 23.5 | | 25.6 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Research and | -544 | 63 | -481 | -577 | 47 | -530 |
| development | | | | | | |
| expenses 2) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 20.0 | | 17.7 | 19.3 | | 17.7 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Selling and | -329 | 79 | -250 | -332 | 77 | -255 |
| marketing | | | | | | |
| expenses 3) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 12.1 | | 9.2 | 11.1 | | 8.5 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Administrativ | -142 | 28 | -114 | -155 | 30 | -125 |
| e and general | | | | | | |
| expenses 4) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 5.2 | | 4.2 | 5.2 | | 4.2 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other income | 7 | - | 7 | - | 24 | 24 |
| and expenses | | | | | | |
| 5) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | -226 | 241 | 15 | -361 | 239 | -122 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| % of net | -8.3 | | 0.6 | -12.1 | | -4.1 |
| sales | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Restructuring charges of EUR 71 million in Q1/10 and of EUR 61 million in |
| Q1/09. |
--------------------------------------------------------------------------------
| 2) Restructuring charges of EUR 18 million and amortization of acquired |
| intangibles of EUR 45 million in Q1/10. Restructuring charges of EUR 2 |
| million and amortization of acquired intangibles of EUR 45 million in Q1/09. |
--------------------------------------------------------------------------------
| 3) Restructuring charges of EUR 8 million and amortization of acquired |
| intangibles of EUR 71 million in Q1/10. Restructuring charges of EUR 6 |
| million and amortization of acquired intangibles of EUR 71 million in Q1/09. |
--------------------------------------------------------------------------------
| 4) Restructuring charges of EUR 28 million in Q1/10 and EUR 30 million in |
| Q1/09. |
--------------------------------------------------------------------------------
| 5) Restructuring charges of EUR 24 million in Q1/09. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GROUP COMMON FUNCTIONS, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | Reporte | Special | Non-IFR | Reported | Special | Non-IFRS |
| | d | items & | S | 1-3/2009 | items & | 1-3/2009 |
| | 1-3/201 | PPA | 1-3/201 | | PPA | |
| | 0 | 1-3/201 | 0 | | 1-3/2009 | |
| | | 0 | | | | |
--------------------------------------------------------------------------------
| Net sales | - | - | - | - | - | - |
--------------------------------------------------------------------------------
| Cost of sales | - | - | - | - | - | - |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Gross profit | - | - | - | - | - | - |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Research and | - | - | - | - | - | - |
| development | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Selling and | -1 | - | -1 | - | - | - |
| marketing | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Administrativ | -11 | - | -11 | -23 | - | -23 |
| e and general | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other income | -8 | - | -8 | 12 | - | 12 |
| and expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | -20 | - | -20 | -11 | - | -11 |
| profit | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED INCOME STATEMENT, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| NOKIA GROUP |
--------------------------------------------------------------------------------
| | Reported | Special | Non-IFR | Reported | Special | Non-IFR |
| | 1-3/2010 | items & | S | 1-3/2009 | items & | S |
| | | PPA | 1-3/201 | | PPA | 1-3/200 |
| | | 1-3/2010 | 0 | | 1-3/2009 | 9 |
--------------------------------------------------------------------------------
| Net sales 1) | 9 522 | - | 9 522 | 9 274 | 2 | 9 276 |
--------------------------------------------------------------------------------
| Cost of | -6 444 | 71 | -6 373 | -6 371 | 61 | -6 310 |
| sales 2) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Gross profit | 3 078 | 71 | 3 149 | 2 903 | 63 | 2 966 |
--------------------------------------------------------------------------------
| % of net | 32.3 | | 33.1 | 31.3 | | 32.0 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Research and | -1 433 | 153 | -1 280 | -1 500 | 142 | -1 358 |
| development | | | | | | |
| expenses 3) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 15.0 | | 13.4 | 16.2 | | 14.6 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Selling and | -934 | 109 | -825 | -962 | 107 | -855 |
| marketing | | | | | | |
| expenses 4) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 9.8 | | 8.7 | 10.4 | | 9.2 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Administrati | -260 | 28 | -232 | -280 | 30 | -250 |
| ve and | | | | | | |
| general | | | | | | |
| expenses 5) | | | | | | |
--------------------------------------------------------------------------------
| % of net | 2.7 | | 2.4 | 3.0 | | 2.7 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Other income | 37 | -29 | 8 | -106 | 117 | 11 |
| and expenses | | | | | | |
| 6) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | 488 | 332 | 820 | 55 | 459 | 514 |
| profit | | | | | | |
--------------------------------------------------------------------------------
| % of net | 5.1 | | 8.6 | 0.6 | | 5.5 |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Share of | -4 | | -4 | 10 | | 10 |
| results of | | | | | | |
| associated | | | | | | |
| companies | | | | | | |
--------------------------------------------------------------------------------
| Financial | -73 | | -73 | -77 | | -77 |
| income and | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Profit | 411 | 332 | 743 | -12 | 459 | 447 |
| before tax | | | | | | |
--------------------------------------------------------------------------------
| Tax | -236 | -51 | -287 | 16 | -133 | -117 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Profit | 175 | 281 | 456 | 4 | 326 | 330 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Profit | 349 | 167 | 516 | 122 | 235 | 357 |
| attributable | | | | | | |
| to equity | | | | | | |
| holders of | | | | | | |
| the parent | | | | | | |
--------------------------------------------------------------------------------
| Profit | -174 | 114 | -60 | -118 | 91 | -27 |
| attributable | | | | | | |
| to | | | | | | |
| non-controll | | | | | | |
| ing | | | | | | |
| interests | | | | | | |
--------------------------------------------------------------------------------
| | 175 | 281 | 456 | 4 | 326 | 330 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | | | | | | |
| share, EUR | | | | | | |
| (for profit | | | | | | |
| attributable | | | | | | |
| to the | | | | | | |
| equity | | | | | | |
| holders of | | | | | | |
| the parent) | | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.09 | | 0.14 | 0.03 | | 0.10 |
--------------------------------------------------------------------------------
| Diluted | 0.09 | | 0.14 | 0.03 | | 0.10 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Average | | | | | | |
| number of | | | | | | |
| shares | | | | | | |
| (1 000 | | | | | | |
| shares) | | | | | | |
--------------------------------------------------------------------------------
| Basic | 3708477 | | 3708477 | 3699879 | | 3699879 |
--------------------------------------------------------------------------------
| Diluted | 3712425 | | 3712425 | 3715330 | | 3715330 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | 437 | -236 | 201 | 462 | -241 | 221 |
| and | | | | | | |
| amortization | | | | | | |
| , total | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Share-based | 6 | - | 6 | -25 | - | -25 |
| compensation | | | | | | |
| expense, | | | | | | |
| total | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 1) Deferred revenue related to acquisitions of EUR 2 million in Q1/09. |
--------------------------------------------------------------------------------
| 2) Restructuring charges of EUR 71 million in Q1/10 and of EUR 61 million in |
| Q1/09. |
--------------------------------------------------------------------------------
| 3) Amortization of acquired intangible assets of EUR 135 million and |
| restructuring charges of EUR 18 million in Q1/10. Amortization of acquired |
| intangible assets of EUR 140 million and restructuring charges of EUR 2 |
| million in Q1/09. |
--------------------------------------------------------------------------------
| 4) Restructuring charges of EUR 8 million and amortization of acquired |
| intangible assets of EUR 101 million in Q1/10. Restructuring charges of EUR |
| 6 million and amortization of acquired intangible assets of EUR 101 million |
| in Q1/09. |
--------------------------------------------------------------------------------
| 5) Restructuring charges of EUR 28 million in Q1/10 and EUR 30 million in |
| Q1/09. |
--------------------------------------------------------------------------------
| 6) Gain on sale of assets and business EUR 29 million in Q1/10. |
| Restructuring charges of EUR 83 million and impairment of intangible assets |
| of EUR 34 million in Q1/09. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED INCOME STATEMENT, IFRS, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | 1-3/2010 | 1-3/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Net sales | 9 522 | 9 274 | 40 984 |
--------------------------------------------------------------------------------
| Cost of sales | -6 444 | -6 371 | -27 720 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross profit | 3 078 | 2 903 | 13 264 |
--------------------------------------------------------------------------------
| Research and development expenses | -1 433 | -1 500 | -5 909 |
--------------------------------------------------------------------------------
| Selling and marketing expenses | -934 | -962 | -3 933 |
--------------------------------------------------------------------------------
| Administrative and general expenses | -260 | -280 | -1 145 |
--------------------------------------------------------------------------------
| Impairment of goodwill | - | - | -908 |
--------------------------------------------------------------------------------
| Other income | 103 | 56 | 338 |
--------------------------------------------------------------------------------
| Other expenses | -66 | -162 | -510 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 488 | 55 | 1 197 |
--------------------------------------------------------------------------------
| Share of results of associated | -4 | 10 | 30 |
| companies | | | |
--------------------------------------------------------------------------------
| Financial income and expenses | -73 | -77 | -265 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before tax | 411 | -12 | 962 |
--------------------------------------------------------------------------------
| Tax | -236 | 16 | -702 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit | 175 | 4 | 260 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit attributable to equity holders | 349 | 122 | 891 |
| of the parent | | | |
--------------------------------------------------------------------------------
| Loss attributable to non-controlling | -174 | -118 | -631 |
| interests | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 175 | 4 | 260 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | | | |
| (for profit attributable to the | | | |
| equity holders of the parent) | | | |
--------------------------------------------------------------------------------
| Basic | 0.09 | 0.03 | 0.24 |
--------------------------------------------------------------------------------
| Diluted | 0.09 | 0.03 | 0.24 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average number of shares (1 000 shares) | |
--------------------------------------------------------------------------------
| Basic | 3 708 477 | 3 699 879 | 3 705 116 |
--------------------------------------------------------------------------------
| Diluted | 3 712 425 | 3 715 330 | 3 721 072 |
--------------------------------------------------------------------------------| | | | |
--------------------------------------------------------------------------------
| Depreciation and amortization, total | 437 | 462 | 1 784 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share-based compensation expense, | 6 | -25 | 13 |
| total | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS, EUR million |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 1-3/2010 | 1-3/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Profit | 175 | 4 | 260 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income | | | |
--------------------------------------------------------------------------------
| Translation differences | 901 | 388 | -563 |
--------------------------------------------------------------------------------
| Net investment hedge gains/losses | -229 | -27 | 114 |
--------------------------------------------------------------------------------
| Cash flow hedges | -233 | -384 | 25 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 16 | -6 | 48 |
--------------------------------------------------------------------------------
| Other increase/decrease, net | -51 | -15 | -7 |
--------------------------------------------------------------------------------
| Income tax related to components of | 102 | 102 | -44 |
| other comprehensive income | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income, net of | 506 | 58 | -427 |
| tax | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income | 681 | 62 | -167 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income | | | |
| attributable to | | | |
--------------------------------------------------------------------------------
| equity holders of the parent | 875 | 202 | 429 |
--------------------------------------------------------------------------------
| non-controlling interests | -194 | -140 | -596 |
--------------------------------------------------------------------------------
| | 681 | 62 | -167 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION, IFRS, EUR million (unaudited) |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS | 31.03.2010 | 31.03.200 | 31.12.2009 |
| | | 9 | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Capitalized development costs | 114 | 231 | 143 |
--------------------------------------------------------------------------------
| Goodwill | 5 524 | 6 584 | 5 171 |
--------------------------------------------------------------------------------
| Other intangible assets | 2 635 | 3 760 | 2 762 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1 888 | 2 080 | 1 867 |
--------------------------------------------------------------------------------
| Investments in associated companies | 122 | 95 | 69 |
--------------------------------------------------------------------------------
| Available-for-sale investments | 611 | 537 | 554 |
--------------------------------------------------------------------------------
| Deferred tax assets | 1 453 | 2 127 | 1 507 |
--------------------------------------------------------------------------------
| Long-term loans receivable | 66 | 28 | 46 |
--------------------------------------------------------------------------------
| Other non-current assets | 6 | 13 | 6 |
--------------------------------------------------------------------------------
| | 12 419 | 15 455 | 12 125 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 2 020 | 2 292 | 1 865 |
--------------------------------------------------------------------------------
| Accounts receivable | 7 562 | 8 931 | 7 981 |
--------------------------------------------------------------------------------
| Prepaid expenses and accrued income | 4 666 | 4 561 | 4 551 |
--------------------------------------------------------------------------------
| Current portion of long-term loans | 17 | 99 | 14 |
| receivable | | | |
--------------------------------------------------------------------------------
| Other financial assets | 102 | 515 | 329 |
--------------------------------------------------------------------------------
| Investments at fair value through | 599 | - | 580 |
| profit and loss, liquid assets | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments, | 2 938 | 1 130 | 2 367 |
| liquid assets | | | |
--------------------------------------------------------------------------------
| Available-for-sale investments, cash | 4 612 | 5 370 | 4 784 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Bank and cash | 1 552 | 1 614 | 1 142 |
--------------------------------------------------------------------------------
| | 24 068 | 24 512 | 23 613 |
--------------------------------------------------------------------------------
| Total assets | 36 487 | 39 967 | 35 738 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | | | |
--------------------------------------------------------------------------------
| Capital and reserves attributable to | | | |
| equity holders of the parent | | | |
--------------------------------------------------------------------------------
| Share capital | 246 | 246 | 246 |
--------------------------------------------------------------------------------
| Share issue premium | 277 | 366 | 279 |
--------------------------------------------------------------------------------
| Treasury shares | -670 | -775 | -681 |
--------------------------------------------------------------------------------
| Translation differences | 574 | 707 | -127 |
--------------------------------------------------------------------------------
| Fair value and other reserves | -55 | -210 | 69 |
--------------------------------------------------------------------------------
| Reserve for invested non-restricted | 3 164 | 3 210 | 3 170 |
| equity | | | |
--------------------------------------------------------------------------------
| Retained earnings | 10 430 | 10 831 | 10 132 |
--------------------------------------------------------------------------------
| | 13 966 | 14 375 | 13 088 |
--------------------------------------------------------------------------------
| Non-controlling interests | 1 943 | 2 155 | 1 661 |
--------------------------------------------------------------------------------
| Total equity | 15 909 | 16 530 | 14 749 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Long-term interest-bearing | 4 065 | 3 076 | 4 432 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 1 256 | 1 672 | 1 303 |
--------------------------------------------------------------------------------
| Other long-term liabilities | 71 | 68 | 66 |
--------------------------------------------------------------------------------
| | 5 392 | 4 816 | 5 801 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Current portion of long-term loans | 22 | 54 | 44 |
--------------------------------------------------------------------------------
| Short-term borrowing | 662 | 2 656 | 727 |
--------------------------------------------------------------------------------
| Other financial liabilities | 395 | 373 | 245 |
--------------------------------------------------------------------------------
| Accounts payable | 4 790 | 5 223 | 4 950 |
--------------------------------------------------------------------------------
| Accrued expenses | 6 561 | 6 806 | 6 504 |
--------------------------------------------------------------------------------
| Provisions | 2 756 | 3 509 | 2 718 |
--------------------------------------------------------------------------------
| | 15 186 | 18 621 | 15 188 |
--------------------------------------------------------------------------------
| Total shareholders' equity and | 36 487 | 39 967 | 35 738 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 4 749 | 5 786 | 5 203 |
--------------------------------------------------------------------------------
| Shareholders' equity per share, EUR | 3.77 | 3.88 | 3.53 |
--------------------------------------------------------------------------------
| Number of shares (1 000 shares) 1) | 3 708 800 | 3 703 185 | 3 708 262 |
--------------------------------------------------------------------------------
| 1) Shares owned by Group companies are excluded. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | 1-3/2010 | 1-3/2009 | 1-12/2009 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | |
--------------------------------------------------------------------------------
| Profit attributable to equity holders | 349 | 122 | 891 |
| of the parent | | | |
--------------------------------------------------------------------------------
| Adjustments, total | 543 | 450 | 3 390 |
--------------------------------------------------------------------------------
| Change in net working capital | 289 | 358 | 140 |
--------------------------------------------------------------------------------
| Cash generated from operations | 1 181 | 930 | 4 421 |
--------------------------------------------------------------------------------
| Interest received | 21 | 57 | 125 |
--------------------------------------------------------------------------------
| Interest paid | -43 | -76 | -256 |
--------------------------------------------------------------------------------
| Other financial income and expenses, | 104 | -430 | -128 |
| net | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -308 | -205 | -915 |
--------------------------------------------------------------------------------
| Net cash from operating activities | 955 | 276 | 3 247 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | |
--------------------------------------------------------------------------------
| Acquisition of Group companies, net of | - | -19 | -29 |
| acquired cash | | | |
--------------------------------------------------------------------------------
| Purchase of current available-for-sale | -2 122 | -107 | -2 800 |
| investments, liquid assets | | | |
--------------------------------------------------------------------------------
| Purchase of investments at fair value | - | - | -695 |
| through profit and loss, liquid assets | | | |
--------------------------------------------------------------------------------
| Purchase of non-current | -51 | -43 | -95 |
| available-for-sale investments | | | |
--------------------------------------------------------------------------------
| Purchase of shares in associated | -26 | -28 | -30 |
| companies | | | |
--------------------------------------------------------------------------------
| Additions to capitalized development | - | -18 | -27 |
| costs | | | |
--------------------------------------------------------------------------------
| Proceeds from repayment and sale of | - | 7 | - |
| long-term loans receivable | | | |
--------------------------------------------------------------------------------
| Proceeds from (+) / payment of (-) | - | - | 2 |
| other long-term loans receivable | | | |
--------------------------------------------------------------------------------
| Proceeds from (+) / payment of (-) | -1 | - | 2 |
| short-term loans receivable | | | |
--------------------------------------------------------------------------------
| Capital expenditures | -114 | -144 | -531 |
--------------------------------------------------------------------------------
| Proceeds from disposal of shares in | - | 12 | 40 |
| associated companies | | | |
--------------------------------------------------------------------------------
| Proceeds from disposal of businesses | - | - | 61 |
--------------------------------------------------------------------------------
| Proceeds from maturities and sale of | 1 559 | 253 | 1 730 |
| current available-for-sale investments, | | | |
| liquid assets | | | |
--------------------------------------------------------------------------------
| Proceeds from maturities and sale of | - | - | 108 |
| investments at fair value through | | | |
| profit and loss, liquid assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of non-current | 8 | - | 14 |
| available-for-sale investments | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of fixed assets | 3 | 3 | 100 |
--------------------------------------------------------------------------------
| Dividends received | - | - | 2 |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -744 | -84 | -2 148 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | |
--------------------------------------------------------------------------------
| Proceeds from long-term borrowings | - | 2 250 | 3 901 |
--------------------------------------------------------------------------------
| Repayment of long-term borrowings | -1 | -5 | -209 |
--------------------------------------------------------------------------------
| Proceeds from (+) / payment of (-) | -111 | -1 008 | -2 842 |
| short-term borrowings | | | |
--------------------------------------------------------------------------------
| Dividends paid | - | -29 | -1 546 |
--------------------------------------------------------------------------------
| Net cash used in / from financing | -112 | 1 208 | -696 |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Foreign exchange adjustment | 139 | 36 | -25 |
--------------------------------------------------------------------------------
| Net increase (+) / decrease (-) in cash | 238 | 1 436 | 378 |
| and cash equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at beginning | 5 926 | 5 548 | 5 548 |
| of period | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of | 6 164 | 6 984 | 5 926 |
| 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 | Fai | Res | Retai | Befor | Non- | Total |
| | re | re | sury | nsl | r | erv | ned | e | cont | equit |
| | cap | iss | shar | ati | val | e | earni | non-c | roll | y |
| | ita | ue | es | on | ue | for | ngs | ontro | ing | |
| | l | pre | | dif | and | inv | | lling | inte | |
| | | miu | | fer | oth | est | | inter | rest | |
| | | m | | enc | er | ed | | est | | |
| | | | | e | res | non | | | | |
| | | | | | erv | -re | | | | |
| | | | | | es | str | | | | |
| | | | | | | ict | | | | |
| | | | | | | ed | | | | |
| | | | | | | equ | | | | |
| | | | | | | ity | | | | |
--------------------------------------------------------------------------------
| Balance | 246 | 442 | -188 | 341 | 62 | 330 | 11692 | 14208 | 2302 | 16510 |
| at | | | 1 | | | 6 | | | | |
| December | | | | | | | | | | |
| 31, 2008 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translat | | | | 386 | | | | 386 | 3 | 389 |
| ion | | | | | | | | | | |
| differen | | | | | | | | | | |
| ces | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | -20 | | | | -20 | | -20 |
| investme | | | | | | | | | | |
| nt hedge | | | | | | | | | | |
| losses, | | | | | | | | | | |
| net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | | | -26 | | | -267 | -22 | -289 |
| flow | | | | | 7 | | | | | |
| hedges, | | | | | | | | | | |
| net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Availabl | | | | | -5 | | | -5 | | -5 |
| e-for-sa | | | | | | | | | | |
| le | | | | | | | | | | |
| investme | | | | | | | | | | |
| nts, net | | | | | | | | | | |
| of tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -14 | -14 | -2 | -16 |
| decrease | | | | | | | | | | |
| , | | | | | | | | | | |
| net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 122 | 122 | -119 | 3 |
--------------------------------------------------------------------------------
| Total | - | - | - | 366 | -27 | - | 108 | 202 | -140 | 62 |
| comprehe | | | | | 2 | | | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-ba | | -23 | | | | | | -23 | | -23 |
| sed | | | | | | | | | | |
| compensa | | | | | | | | | | |
| tion | | | | | | | | | | |
--------------------------------------------------------------------------------
| Excess | | -12 | | | | | | -12 | | -12 |
| tax | | | | | | | | | | |
| benefit | | | | | | | | | | |
| on | | | | | | | | | | |
| share-ba | | | | | | | | | | |
| sed | | | | | | | | | | |
| compensa | | | | | | | | | | |
| tion | | | | | | | | | | |
--------------------------------------------------------------------------------
| Settleme | | -41 | 137 | | | -96 | | - | | - |
| nt of | | | | | | | | | | |
| performa | | | | | | | | | | |
| nce | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cancella | | | 969 | | | | -969 | - | | - |
| tion of | | | | | | | | | | |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | | - | -7 | -7 |
--------------------------------------------------------------------------------
| Total of | - | -76 | 1106 | - | - | -96 | -969 | -35 | -7 | -42 |
| other | | | | | | | | | | |
| equity | | | | | | | | | | |
| movement | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 246 | 366 | -775 | 707 | -21 | 321 | 10831 | 14375 | 2155 | 16530 |
| at March | | | | | 0 | 0 | | | | |
| 31, 2009 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance | 246 | 279 | -681 | -12 | 69 | 317 | 10132 | 13088 | 1661 | 14749 |
| at | | | | 7 | | 0 | | | | |
| December | | | | | | | | | | |
| 31, 2009 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Translat | | | | 871 | | | | 871 | 30 | 901 |
| ion | | | | | | | | | | |
| differen | | | | | | | | | | |
| ces | | | | | | | | | | |
--------------------------------------------------------------------------------
| Net | | | | -17 | | | | -170 | | -170 |
| investme | | | | 0 | | | | | | |
| nt hedge | | | | | | | | | | |
| losses, | | | | | | | | | | |
| net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Cash | | | | | -13 | | | -137 | -50 | -187 |
| flow | | | | | 7 | | | | | |
| hedges, | | | | | | | | | | |
| net of | | | | | | | | | | |
| tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Availabl | | | | | 13 | | | 13 | | 13 |
| e-for-sa | | | | | | | | | | |
| le | | | | | | | | | | |
| investme | | | | | | | | | | |
| nts, net | | | | | | | | | | |
| of tax | | | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -51 | -51 | | -51 |
| decrease | | | | | | | | | | |
| , net | | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | | | | | 349 | 349 | -174 | 175 |
--------------------------------------------------------------------------------
| Total | - | 0 | 0 | 701 | -12 | - | 298 | 875 | -194 | 681 |
| comprehe | | | | | 4 | | | | | |
| nsive | | | | | | | | | | |
| income | | | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | | -1 | | | | | | -1 | | -1 |
| options | | | | | | | | | | |
| exercise | | | | | | | | | | |
| d | | | | | | | | | | |
| related | | | | | | | | | | |
| to | | | | | | | | | | |
| acquisit | | | | | | | | | | |
| ions | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-ba | | 6 | | | | | | 6 | | 6 |
| sed | | | | | | | | | | |
| compensa | | | | | | | | | | |
| tion | | | | | | | | | | |
--------------------------------------------------------------------------------
| Excess | | 1 | | | | | | 1 | | 1 |
| tax | | | | | | | | | | |
| benefit | | | | | | | | | | |
| on | | | | | | | | | | |
| share-ba | | | | | | | | | | |
| sed | | | | | | | | | | |
| compensa | | | | | | | | | | |
| tion | | | | | | | | | | |
--------------------------------------------------------------------------------
| Settleme | | -8 | 10 | | | -6 | | -4 | | -4 |
| nt of | | | | | | | | | | |
| performa | | | | | | | | | | |
| nce and | | | | | | | | | | |
| restrict | | | | | | | | | | |
| ed | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Reissuan | | | 1 | | | | | 1 | | 1 |
| ce of | | | | | | | | | | |
| treasury | | | | | | | | | | |
| shares | | | | | | | | | | |
--------------------------------------------------------------------------------
| Conversi | | | | | | | | - | 500 | 500 |
| on of | | | | | | | | | | |
| debt to | | | | | | | | | | |
| equity | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | | | - | -24 | -24 |
--------------------------------------------------------------------------------
| Total of | - | -2 | 11 | - | - | -6 | - | 3 | 476 | 479 |
| other | | | | | | | | | | |
| equity | | | | | | | | | | |
| movement | | | | | | | | | | |
| s | | | | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 246 | 277 | -670 | 574 | -55 | 316 | 10430 | 13966 | 1943 | 15909 |
| at March | | | | | | 4 | | | | |
| 31, 2010 | | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS AND CONTINGENCIES, EUR million |
--------------------------------------------------------------------------------
| (unaudited) |
--------------------------------------------------------------------------------
| | 31.03.2010 | GROUP | 31.12.2009 |
| | | 31.03.2009 | |
--------------------------------------------------------------------------------
| Collateral for own commitments | | | |
--------------------------------------------------------------------------------
| Property under mortgages | 18 | 18 | 18 |
--------------------------------------------------------------------------------
| Assets pledged | 13 | 11 | 13 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities on behalf of | | | |
| Group companies | | | |
--------------------------------------------------------------------------------
| Guarantees for loans | - | - | - |
--------------------------------------------------------------------------------
| Other guarantees | 1 374 | 2 673 | 1 350 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities on behalf of | | | |
| other companies | | | |
--------------------------------------------------------------------------------
| Financial guarantees on behalf of | - | 1 | - |
| third parties | | | |
--------------------------------------------------------------------------------
| Other guarantees | 8 | 1 | 3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing obligations | 1 190 | 1 321 | 1 222 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Financing commitments | | | |
--------------------------------------------------------------------------------
| Customer finance commitments | 93 | 193 | 99 |
--------------------------------------------------------------------------------
| Venture fund commitments | 293 | 391 | 293 |
--------------------------------------------------------------------------------
1 EUR = 1.351 USD
The unaudited, consolidated interim financial statements of Nokia have been
prepared in accordance with the International Financial Reporting Standards
("IFRS"). The same accounting policies and methods of computation are followed
in the interim financial statements as were followed in the consolidated
financial statements of Nokia for 2009.
FORWARD-LOOKING STATEMENTS
It should be noted that certain statements herein which are not historical facts
are forward-looking statements, including, without limitation, those regarding:
A) the timing of the deliveries of our products and services and their
combinations; B) our ability to develop, implement and commercialize new
technologies, products and services and their combinations; C) expectations
regarding market developments and structural changes; D) expectations and
targets regarding our industry volumes, market share, prices, net sales and
margins of products and services and their combinations; E) expectations and
targets regarding our operational priorities and results of operations; F) the
outcome of pending and threatened litigation; G) expectations regarding the
successful completion of acquisitions or restructurings on a timely basis and
our ability to achieve the financial and operational targets set in connection
with any such acquisition or restructuring; and H) statements preceded by "believe,""expect,""anticipate,""foresee,""target,""estimate,""designed,""plans,""will" or similar expressions. These statements are based on
management's best assumptions and beliefs in light of the information currently
available to it. Because they involve risks and uncertainties, actual results
may differ materially from the results that we currently expect. Factors that
could cause these differences include, but are not limited to: 1) the
competitiveness and quality of our portfolio of products and services and their
combinations; 2) our ability to timely and successfully develop or otherwise
acquire the appropriate technologies and commercialize them as new advanced
products and services and their combinations, including our ability to attract
application developers and content providers to develop applications and provide
content for use in our devices; 3) our ability to effectively, timely and
profitably adapt our business and operations to the requirements of the
converged mobile device market and the services market; 4) the intensity of
competition in the various markets where we do business and our ability to
maintain or improve our market position or respond successfully to changes in
the competitive environment; 5) the occurrence of any actual or even alleged
defects or other quality, safety or security issues in our products and services
and their combinations; 6) the development of the mobile and fixed
communications industry and general economic conditions globally and regionally;
7) our ability to successfully manage costs; 8) exchange rate fluctuations,
including, in particular, fluctuations between the euro, which is our reporting
currency, and the US dollar, the Japanese yen and the Chinese yuan, as well as
certain other currencies; 9) the success, financial condition and performance of
our suppliers, collaboration partners and customers; 10) our ability to source
sufficient amounts of fully functional components, sub-assemblies, software,
applications and content without interruption and at acceptable prices and
quality; 11) our success in collaboration arrangements with third parties
relating to the development of new technologies, products and services,
including applications and content; 12) our ability to manage efficiently our
manufacturing and logistics, as well as to ensure the quality, safety, security
and timely delivery of our products and services and their combinations; 13) our
ability to manage our inventory and timely adapt our supply to meet changing
demands for our products; 14) 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 and services and their combinations; 15) our ability to protect
numerous Nokia, NAVTEQ and Nokia Siemens Networks patented, standardized or
proprietary technologies from third-party infringement or actions to invalidate
the intellectual property rights of these technologies; 16) the impact of
changes in government policies, trade policies, laws or regulations and economic
or political turmoil in countries where our assets are located and we do
business; 17) any disruption to information technology systems and networks that
our operations rely on; 18) our ability to retain, motivate, develop and recruit
appropriately skilled employees; 19) unfavorable outcome of litigations; 20)
allegations of possible health risks from electromagnetic fields generated by
base stations and mobile devices and lawsuits related to them, regardless of
merit; 21) our ability to achieve targeted costs reductions and increase
profitability in Nokia Siemens Networks and to effectively and timely execute
related restructuring measures; 22) developments under large, multi-year
contracts or in relation to major customers in the networks infrastructure and
related services business; 23) the management of our customer financing
exposure, particularly in the networks infrastructure and related services
business; 24) whether ongoing or any additional governmental investigations into
alleged violations of law by some former employees of Siemens AG ("Siemens") may
involve and affect the carrier-related assets and employees transferred by
Siemens to Nokia Siemens Networks; 25) any impairment of Nokia Siemens Networks
customer relationships resulting from ongoing or any additional governmental
investigations involving the Siemens carrier-related operations transferred to
Nokia Siemens Networks; as well as the risk factors specified on pages 11-32 of
Nokia's annual report Form 20-F for the year ended December 31, 2009 under Item
3D. "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 publicly update or revise forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent legally required.
Nokia, Espoo - April 22, 2010
Media and Investor Contacts:
Corporate Communications, tel. +358 7180 34900
Investor Relations Europe, tel. +358 7180 34927
Investor Relations US, tel. +1 914 368 0555
- Nokia plans to publish its second quarter 2010 results on July 22, 2010.
- Nokia's Annual General Meeting will be held on May 6, 2010.
www.nokia.com
© 2024 Nasdaq, Inc. All Rights Reserved |