SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a -16 or 15d -16 of
the Securities Exchange Act of 1934
Report on Form 6-K dated January 26,
2023
(Commission File No. 1-13202)
Nokia Corporation
Karakaari 7A
FI-02610 Espoo
Finland
(Name and address of registrant’s principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: |
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Form 20-F: x |
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Form 40-F: ¨ |
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): |
Yes: ¨ |
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No: x |
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): |
Yes: ¨ |
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No: x |
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Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. |
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Yes: ¨ |
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No: x |
Enclosures:
| · | Stock Exchange Release: Nokia Corporation Financial Report for Q4 and full
year 2022 |
| · | Report attached to the Stock Exchange Release: Report for Q4 and full year
2022 |
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Stock exchange release
26 January 2023 |
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1 (8) |
Nokia Corporation
Financial Statement Release
26 January 2023 at 08:00 EET
Nokia Corporation Financial Report for Q4 and full year 2022
A solid end to a year of acceleration
| · | Q4 net sales grew 11% y-o-y in constant currency (16% reported). Full year
net sales grew 6% (12% reported). |
| · | In Q4 Network Infrastructure grew net sales 14% in constant currency with
all units contributing. Mobile Networks grew 3% with a meaningful shift in regional mix in the quarter while Cloud and Network Services
grew 5%. Nokia Technologies grew 82% as a long-term licensee exercised an option leading to higher revenue recognition in Q4. |
| · | Enterprise net sales grew 49% y-o-y in constant currency in Q4 (55% reported);
21% in full year 2022 (27% reported). |
| · | Q4 comparable gross margin +340bps y-o-y to 43.5% (reported +330bps to 42.8%),
with 240bps of expansion related to the Nokia Technologies option exercise. Comparable operating margin +130bps to 15.5% (reported +30bps
to 11.8%). |
| · | Q4 operating margin improved y-o-y due to the combination of the exercised
option in Nokia Technologies and stronger margin in Network Infrastructure offsetting declines in Mobile Networks (regional mix shift)
and greater losses in Group Common and Other primarily related to the strong venture fund performance in the prior year. |
| · | Re-recognized deferred tax asset of EUR 2.5bn in Q4 which boosted reported
net profit and EPS. |
| · | Q4 comparable diluted EPS of EUR 0.16; reported diluted EPS of EUR 0.56.
Full year EUR 0.44 and EUR 0.75 respectively. |
| · | Q4 free cash flow positive EUR 0.4bn, net cash balance of EUR 4.8bn. Full
year free cash flow EUR 0.8bn. |
| · | Board proposes dividend authorization of EUR 0.12 per share. |
| · | Nokia expects 2023 full year net sales of between EUR 24.9bn to 26.5bn, comparable
operating margin between 11.5 to 14.0% and Free Cash Flow conversion from comparable operating profit of 20 to 50%. |
This
is a summary of the Nokia Corporation Financial Report for Q4 and full year 2022 published today. Nokia only publishes a summary of its
financial reports in stock exchange releases. The summary focuses on Nokia Group's financial information as well as on Nokia's outlook.
The detailed, segment-level discussion will be available in the complete financial report hosted at www.nokia.com/financials.
A video interview summarizing the key points of our Q4 results will also be published on the website. Investors should not solely rely
on summaries of Nokia's financial reports and should also review the complete report with tables.
PEKKA LUNDMARK, PRESIDENT AND CEO, ON Q4 AND FULL YEAR 2022 RESULTS
We said at the start of 2022 that it would be a year of acceleration
and we delivered what we promised. The Nokia team did a great job navigating geopolitical, economic and supply challenges, successfully
executed our strategy and delivered a strong full year performance. Our constant currency full year net sales growth accelerated to 6%
and we maintained a stable comparable operating margin of 12.5% which is a good result considering one-off benefits we had in 2021.
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26 January 2023 |
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2 (8) |
One of our strategic priorities is to broaden our customer base and
grow in Enterprise and I’m delighted we achieved 21% net sales growth in constant currency for the full year with 49% growth in
Q4. There were important webscale wins in 2022 with momentum also continuing to build in our private wireless business where we added
45 customers in Q4.
The highlight of the fourth quarter was our stellar Network
Infrastructure performance, which grew net sales 14% in constant currency with significant operating margin expansion. Notably, we
saw a strong acceleration in both our Optical Networks and IP Networks businesses with net sales growing 21% and 11% respectively in
constant currency. Mobile Networks delivered 3% constant currency growth in Q4 with operating margin declining year-on-year, as
expected due to changes in regional mix. On a full year basis, Mobile Networks’ 3% net sales growth and 90bps higher operating
margin is encouraging after a successful reset the previous year. We continue to see solid demand trends in Network Infrastructure
and Mobile Networks as we look ahead into 2023.
In Cloud and Network Services, we saw good Q4 net sales growth of 5%
in constant currency and continued improvement in gross margin, which increased 200bps year-on-year. Increased investments into private
wireless and Software-as-a-Service meant operating margin was largely stable. This is evidence that the ongoing optimization of our portfolio
is bearing fruit and positioning us for continued profitable growth in the future.
In Nokia Technologies, we remain in two litigation/renewal discussions.
Several court rulings have validated our position giving us confidence in our approach to prioritize the value of our portfolio over achieving
specific timelines. At the end of the year, a long-term licensee exercised an option to extend its license in effect into perpetuity.
This meant we recognized all outstanding revenue for this license in the fourth quarter. More recently, I was pleased to see us enter
into a new multi-year patent license agreement with Samsung, which underscores Nokia Technologies’ strong patent portfolio and supports
its ability to deliver stable operating profit over the long-term.
Looking forward to 2023, while we are mindful of the uncertain economic
outlook, demand remains robust. We expect another year of growth and we are targeting full year net sales of between EUR 24.9bn and EUR
26.5bn which implies between 2% and 8% growth in constant currency. We are also targeting a comparable operating margin in the range of
11.5% to 14.0%. Whilst this growth means we have another year of working capital build constraining our free cash flow conversion from
comparable operating profit to a range of 20% to 50%, we expect significantly stronger cash flow in 2024. Due to our confidence in our
long-term outlook and strong balance sheet position the Board is proposing an increase in the dividend to EUR 0.12 per share.
I would like to thank the whole Nokia team for delivering a really
positive 2022 and for putting us on a strong foundation to keep delivering in 2023 and beyond.
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26 January 2023 |
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FINANCIAL RESULTS
EUR million (except for EPS in EUR) | |
Q4'22 | | |
Q4'21 | | |
YoY
change | | |
Constant
currency YoY change | | |
Q1–
Q4'22 | | |
Q1–
Q4'21 | | |
YoY
change | | |
Constant
currency
YoY
change | |
Reported results | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net sales | |
| 7
449 | | |
| 6
414 | | |
| 16 | % | |
| 11 | % | |
| 24
911 | | |
| 22
202 | | |
| 12 | % | |
| 6 | % |
Gross margin % | |
| 42.8 | % | |
| 39.5 | % | |
| 330 | bps | |
| | | |
| 41.0 | % | |
| 39.8 | % | |
| 120 | bps | |
| | |
Research and development expenses | |
| (1
222 | ) | |
| (1
118 | ) | |
| 9 | % | |
| | | |
| (4
550 | ) | |
| (4
214 | ) | |
| 8 | % | |
| | |
Selling, general and administrative expenses | |
| (838 | ) | |
| (758 | ) | |
| 11 | % | |
| | | |
| (3
013 | ) | |
| (2
792 | ) | |
| 8 | % | |
| | |
Operating profit | |
| 882 | | |
| 740 | | |
| 19 | % | |
| | | |
| 2
318 | | |
| 2
158 | | |
| 7 | % | |
| | |
Operating margin % | |
| 11.8 | % | |
| 11.5 | % | |
| 30 | bps | |
| | | |
| 9.3 | % | |
| 9.7 | % | |
| (40 | )bps | |
| | |
Profit for the period | |
| 3
152 | | |
| 680 | | |
| 364 | % | |
| | | |
| 4
259 | | |
| 1
645 | | |
| 159 | % | |
| | |
EPS, diluted | |
| 0.56 | | |
| 0.12 | | |
| 367 | % | |
| | | |
| 0.75 | | |
| 0.29 | | |
| 159 | % | |
| | |
Net cash and interest-bearing financial
investments | |
| 4
767 | | |
| 4
615 | | |
| 3 | % | |
| | | |
| 4
767 | | |
| 4
615 | | |
| 3 | % | |
| | |
Comparable results | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net sales | |
| 7
449 | | |
| 6
414 | | |
| 16 | % | |
| 11 | % | |
| 24
911 | | |
| 22
202 | | |
| 12 | % | |
| 6 | % |
Gross margin % | |
| 43.5 | % | |
| 40.1 | % | |
| 340 | bps | |
| | | |
| 41.4 | % | |
| 40.4 | % | |
| 100 | bps | |
| | |
Research and development expenses | |
| (1
189 | ) | |
| (1
092 | ) | |
| 9 | % | |
| | | |
| (4
449 | ) | |
| (4
084 | ) | |
| 9 | % | |
| | |
Selling, general and administrative expenses | |
| (727 | ) | |
| (659 | ) | |
| 10 | % | |
| | | |
| (2
604 | ) | |
| (2
379 | ) | |
| 9 | % | |
| | |
Operating profit | |
| 1
154 | | |
| 908 | | |
| 27 | % | |
| | | |
| 3
109 | | |
| 2
775 | | |
| 12 | % | |
| | |
Operating margin % | |
| 15.5 | % | |
| 14.2 | % | |
| 130 | bps | |
| | | |
| 12.5 | % | |
| 12.5 | % | |
| 0 | bps | |
| | |
Profit for the period | |
| 929 | | |
| 731 | | |
| 27 | % | |
| | | |
| 2
481 | | |
| 2
109 | | |
| 18 | % | |
| | |
EPS, diluted | |
| 0.16 | | |
| 0.13 | | |
| 23 | % | |
| | | |
| 0.44 | | |
| 0.37 | | |
| 19 | % | |
| | |
ROIC1 | |
| 17.5 | % | |
| 20.1 | % | |
| (260 | )bps | |
| | | |
| 17.5 | % | |
| 20.1 | % | |
| (260 | )bps | |
| | |
1 Comparable ROIC = Comparable operating profit after tax,
last four quarters / invested capital, average of last five quarters’ ending balances. Refer to the Performance measures section
in Nokia Corporation Financial Report for Q4 and full year 2022 for details.
Business group results | |
Network
Infrastructure | | |
Mobile
Networks | | |
Cloud
and Network Services | | |
Nokia
Technologies | | |
Group
Common and Other | |
EUR million | |
Q4'22 | | |
Q4'21 | | |
Q4'22 | | |
Q4'21 | | |
Q4'22 | | |
Q4'21 | | |
Q4'22 | | |
Q4'21 | | |
Q4'22 | | |
Q4'21 | |
Net Sales | |
| 2
709 | | |
| 2
254 | | |
| 2
960 | | |
| 2
761 | | |
| 1
060 | | |
| 964 | | |
| 679 | | |
| 368 | | |
| 59 | | |
| 74 | |
YoY change | |
| 20 | % | |
| | | |
| 7 | % | |
| | | |
| 10 | % | |
| | | |
| 85 | % | |
| | | |
| (20 | )% | |
| | |
Constant currency YoY change | |
| 14 | % | |
| | | |
| 3 | % | |
| | | |
| 5 | % | |
| | | |
| 82 | % | |
| | | |
| (26 | )% | |
| | |
Gross margin % | |
| 39.6 | % | |
| 34.0 | % | |
| 34.7 | % | |
| 37.6 | % | |
| 43.8 | % | |
| 41.8 | % | |
| 99.9 | % | |
| 99.7 | % | |
| (10.2 | )% | |
| (4.1 | )% |
Operating profit/(loss) | |
| 431 | | |
| 248 | | |
| 201 | | |
| 270 | | |
| 147 | | |
| 145 | | |
| 564 | | |
| 282 | | |
| (189 | ) | |
| (38 | ) |
Operating margin % | |
| 15.9 | % | |
| 11.0 | % | |
| 6.8 | % | |
| 9.8 | % | |
| 13.9 | % | |
| 15.0 | % | |
| 83.1 | % | |
| 76.6 | % | |
| (320.3 | )% | |
| (51.4 | )% |
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26 January 2023 |
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SHAREHOLDER DISTRIBUTION
Dividend
The Board of Directors proposes that the Annual General Meeting 2023
authorizes the Board to resolve on the distribution of an aggregate maximum of EUR 0.12 per share to be paid in respect of financial
year 2022. The authorization would be used to distribute dividend and/or assets from the reserve for invested unrestricted equity in
four installments during the authorization period, in connection with the quarterly results, unless the Board decides otherwise for a
justified reason.
Nokia’s dividend policy is to target recurring, stable and over
time growing ordinary dividend payments, taking into account the previous year’s earnings as well as the company’s financial
position and business outlook.
Under the authorization by the Annual General Meeting held on 5 April 2022,
the Board of Directors may resolve an aggregate maximum distribution of EUR 0.08 per share. The authorization will be used to distribute
dividend and/or assets from the reserve for invested unrestricted equity in four installments during the authorization period, in connection
with the quarterly results, unless the Board decides otherwise for a justified reason.
Under the authorization, dividends of EUR 0.02 per share were paid
in Q2 2022 totaling EUR 113 million; in Q3 2022 totaling EUR 112 million and in Q4 2022 totaling EUR 112 million.
On 26 January 2023, the Board resolved to distribute a dividend
of EUR 0.02 per share. The dividend record date is on 31 January 2023 and the dividend will be paid on 9 February 2023. The
actual dividend payment date outside Finland will be determined by the practices of the intermediary banks transferring the dividend
payments.
Following this announced distribution of the fourth installment and
executed payments of the previous installments, the Board has no remaining distribution authorization.
The payment of the fourth installment of the distribution is expected
to total approximately EUR 112 million in Q1 2023.
Share buyback program
In 2020 and 2021, Nokia generated strong cash flow which has significantly
improved the cash position of the company. To manage the company’s capital structure, Nokia’s Board of Directors initiated
a share buyback program under the authorizations from the Annual General Meetings 2021 and 2022 to repurchase shares to return up to
EUR 600 million of cash to shareholders in tranches over a period of two years.
The first phase of the share buyback program with a maximum aggregate
purchase price of EUR 300 million started in February 2022 and ended in November 2022. Under the first phase of the buyback
program, Nokia repurchased 63 963 583 of its own shares at an average price per share of approximately EUR 4.69. The repurchases
reduced the Company’s unrestricted equity by EUR 300 million and the repurchased shares were cancelled in December 2022.
The second EUR 300 million phase of the share buyback program started
in January 2023 and it will end at the latest by 21 December 2023.
OUTLOOK
|
Full
Year 2023 |
Net
sales1 |
EUR
24.9 billion to EUR 26.5 billion1 (2 to 8% growth in constant currency) |
Comparable
operating margin2 |
11.5
to 14.0% |
Free
cash flow2 |
20
to 50% conversion from comparable operating profit |
1 Assuming the rate 1 EUR = 1.07 USD as of 31 December 2022
through 2023.
2 Please refer to Performance measures section in Nokia
Corporation Financial Report for Q4 and full year 2022 for a full explanation of how these terms are defined.
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26 January 2023 |
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The outlook, long-term targets and all of the underlying outlook assumptions
described below are forward-looking statements subject to a number of risks and uncertainties as described or referred to in the Risk
Factors section later in this release. Along with Nokia's official outlook targets provided above, below are outlook assumptions by business
group that support the group level outlook. The comments for relative growth by business group are provided to give a reference on how
we expect each to perform relative to the overall group.
|
2023
total addressable market |
Nokia
business group assumptions |
|
Size
(EUR bn)1 |
Constant
currency growth |
Net
sales growth |
Operating
margin |
Network
Infrastructure2 |
48 |
4% |
In-line
to below group |
11.0
to 14.0% |
Mobile
Networks3 |
53 |
5% |
Faster
than group |
7.0
to 10.0% |
Cloud
and Network Services |
29 |
4% |
In-line
to below group |
5.5
to 8.5% |
1 Total addressable market forecasts assume the currency
rate of 1 EUR = 1.07 USD as of 31 December 2022 through 2023. The addressable market is excluding Russia and Belarus.
2 Excluding Submarine Networks.
3 Excluding China. |
Nokia provides the following approximate outlook assumptions for additional
items concerning 2023:
|
Full
year 2023 |
Comment |
Nokia
Technologies operating profit |
Largely
stable |
Assuming
closure of outstanding litigation / renewal discussions we expect largely stable operating profit in Nokia Technologies in 2023.
Nokia currently assumes free cash flow slightly greater than operating profit in Nokia Technologies. |
Group
Common and Other operating profit |
Negative
EUR 300-350 million |
This
includes central function costs largely stable at below EUR 200 million and an increase in investment in long-term research now above
EUR 100 million. This line also accounts for Radio Frequency Systems (RFS) and could be impacted by any positive or negative revaluations
in Nokia's venture funds in 2023. |
Comparable
financial income and expenses |
EUR
0 million |
As
interest rates have increased we now expect financial income and expenses to be approximately balanced. |
Comparable
income tax rate |
~25% |
Following
the re-recognition of deferred tax assets at the end of 2022 we now provide an assumption based on a % tax rate instead of an absolute
amount. |
Cash
outflows related to income taxes |
EUR
700 million |
Cash
outflows related to income taxes are expected to increase due to mandatory capitalization of R&D costs under U.S. tax laws as
well as evolving regional mix. |
Capital
Expenditures |
EUR
650 million |
|
LONG-TERM TARGETS
Nokia's long-term targets remain unchanged from those introduced with
its Q4 2021 financial results. The targets had an associated timeline of 3-5 years which remains unchanged and implies by 2024-2026.
These targets remain intended to show Nokia's ambition to deliver continuous improvement in the business over the time period.
Net
sales |
Grow
faster than the market |
Comparable
operating margin1 |
≥
14% |
Free
cash flow1 |
55
to 85% conversion from comparable operating profit |
1Please refer to Performance measures section in Nokia Corporation Financial Report for Q4 and full year 2022 for a full explanation of how these terms are defined.
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RISK
FACTORS
Nokia
and its businesses are exposed to a number of risks and uncertainties which include but are not limited to:
| · | Competitive
intensity, which is expected to continue at a high level; |
| · | Our
ability to ensure competitiveness of our product roadmaps and costs through additional R&D
investments; |
| · | Our
ability to procure certain standard components and the costs thereof, such as semiconductors; |
| · | Disturbance
in the global supply chain; |
| · | Accelerating
inflation, increased global macro-uncertainty, major currency fluctuations and higher interest
rates; |
| · | Scope
and duration of the COVID-19 pandemic, and its economic impact; |
| · | War
or other geopolitical conflicts, disruptions and potential costs thereof; |
| · | Other
macroeconomic, industry and competitive developments; |
| · | Timing
and value of new, renewed and existing patent licensing agreements with smartphone vendors,
automotive companies, consumer electronics companies and other licensees; |
| · | Results
in brand and technology licensing; costs to protect and enforce our intellectual property
rights; on-going litigation with respect to licensing and regulatory landscape for patent
licensing; |
| · | The
outcomes of on-going and potential disputes and litigation; |
| · | Timing
of completions and acceptances of certain projects; |
| · | Our
product and regional mix; |
| · | Uncertainty
in forecasting income tax expenses and cash outflows, over the long-term, as they are also
subject to possible changes due to business mix, the timing of patent licensing cash flow
and changes in tax legislation, including potential tax reforms in various countries and
OECD initiatives; |
| · | Our
ability to utilize our US and Finnish deferred tax assets and their recognition on our balance
sheet; |
| · | Our
ability to meet our sustainability and other ESG targets, including our targets relating
to greenhouse gas emissions; as well the risk factors specified under Forward-looking statements
of this release, and our 2021 annual report on Form 20-F published on 3 March 2022
under Operating and financial review and prospects-Risk factors. |
FORWARD-LOOKING
STATEMENTS
Certain
statements herein that are not historical facts are forward-looking statements. These forward-looking statements reflect Nokia's current
expectations and views of future developments and include statements regarding: A) expectations, plans, benefits or outlook related to
our strategies, product launches, growth management, sustainability and other ESG targets, operational key performance indicators and
decisions on market exits; B) expectations, plans or benefits related to future performance of our businesses (including the expected
impact, timing and duration of COVID-19 and the general macroeconomic conditions on our businesses, our supply chain and our customers’
businesses) and any future dividends and other distributions of profit; C) expectations and targets regarding financial performance and
results of operations, including market share, prices, net sales, income, margins, cash flows, the timing of receivables, operating expenses,
provisions, impairments, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions, competitiveness,
revenue generation in any specific region, and licensing income and payments; D) ability to execute, expectations, plans or benefits
related to changes in organizational structure and operating model; E) impact on revenue with respect to litigation/renewal discussions;
and F) any statements preceded by or including "continue", “believe”, “commit”, “estimate”,
“expect”, “aim”, “influence”, "will” or similar expressions. These forward-looking statements
are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ
materially from such statements. These statements are based on management’s best assumptions and beliefs in light of the information
currently available to them. These forward-looking statements are only predictions based upon our current expectations and views of future
events and developments and are subject to risks and uncertainties that are difficult to predict because they relate to events and depend
on circumstances that will occur in the future. Factors, including risks and uncertainties that could cause these differences, include
those risks and uncertainties identified in the Risk Factors above.
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ANALYST
WEBCAST
| · | Nokia's
webcast will begin on 26 January 2023 at 11.30 a.m. Finnish time (EET). The webcast
will last approximately 90 minutes. |
| · | The
webcast will include an extended presentation covering both our financial results along with
a Group Level Progress Update followed by a Q&A session. The results presentation slides
will be available for download at www.nokia.com/financials. |
| · | A
link to the webcast will be available at www.nokia.com/financials. |
| · | Media
representatives can listen in via the link, or alternatively call +1-412-317-5619. |
FINANCIAL
CALENDAR 2023
| · | Nokia
plans to publish its "Nokia in 2022" annual report, which includes the review by
the Board of Directors and the audited annual accounts, during week 9 of 2023. The annual
report will be available at www.nokia.com/financials. |
| · | Nokia's
Annual General Meeting 2023 is planned to be held on 4 April 2023. |
| · | Nokia
plans to publish its first quarter 2023 results on 20 April 2023. |
| · | Nokia
plans to publish its second quarter and half year 2023 results on 20 July 2023. |
| · | Nokia
plans to publish its third quarter and January-September 2023 results on 19 October 2023. |
About
Nokia
At
Nokia, we create technology that helps the world act together.
As
a trusted partner for critical networks, we are committed to innovation and technology leadership across mobile, fixed and cloud networks.
We create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs.
Adhering
to high standards of integrity and security, we help build the capabilities needed for a more productive, sustainable and inclusive world.
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Inquiries:
Nokia
Communications
Phone:
+358 10 448 4900
Email:
press.services@nokia.com
Maria
Vaismaa, Global Head of Public Relations
Nokia
Investor
Relations
Phone:
+358 40 803 4080
Email:
investor.relations@nokia.com
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| R
eport
for Q4 and full yyFear
2022
A solid end to a yyFear of acceleration
▪
Q4
net sales grew
11%
yyFE-o-yyFE in constant currencyyFE (16% reported). yFull yyFEear net sales grew 6% (12% reported).
▪
In
Q4 Network Infrastructure grew net sales 14% in constant currencyyFE with all units contributing. Mobile Networks grew
3% with a meaningful shift in regional mix in the quarter while Cloud and Network Services grew 5%. Nokia Technologies
grew 82% as
a
long-term licensee exercised an option leading
to higher revenue recognition in Q4.
▪
yEn
terprise net sales grew 49% yyFE-o-yyFE in constant currencyyFE in Q4 (55% reported); 21% in full yyFEear 2022 (27% reported).
▪
Q4 comparable gross margin +340bps yyFE-o-yyFE to 43.5% (reported +
330bps
to
42.8%
), with 240bps of expansion related
to the Nokia Technologies option exercise. Comparable operating margin +130bps to 15.5% (reported +
30bps
to
11.8%
).
▪
Q4
operating margin
improved yyFE-o-yyFE due to the combination of the exercised option in Nokia Technologies and
stronger margin in Network Infrastructure o
ffset
ting declines in Mobile Networks (regional mix shift) and
greater losses
in
Group Common and Other primarilyyFE related to the strong venture fund performance in the prior yyFEear.
▪
Re-recognized deferred tax asset of yEUR 2.5bn in Q4
which
boosted reported
net profit
and yEPS
.
▪
Q4 c
omparable diluted yEPS of yEUR
0.16
; reported diluted yEPS of yEUR
0.56
.
yFull yyFEear yEUR
0.
44
and yEUR 0.75 respectivelyyFE.
▪
Q4 free cash flo
w
positive
yEUR
0.4bn
, net
cash balance of yEUR
4.8bn
. yFull yyFEear free cash flow yEUR 0.8bn.
▪
Board proposes dividend authorization of yEUR 0.12 per share.
▪
Nokia expects 2023 full yyFEear net sales of between yEUR 24.9bn to 26.5bn, comparable
operating margin
between
11.5 to 14.0% and yFree Cash yFlow conversion from comparable operating profit of 20 to 50%
.
yEUR million (except for yEPS in yEUR)
Q4'22
Q4'21
YoY change
Constant
currencyy
YoY
change
Q1-Q4'22
Q1-Q4'21
YoY
change
Constant
currencyy
YoY
change
Reported results
Net sales
7 449
6 414
16%
11%
24 911
22 202
12%
6%
Gross margin %
42.8%
39.5%
330bps
41.0%
39.8%
120bps
Research and development expenses
(1 222)
(1 118)
9%
(4 550)
(4 214)
8%
Selling, general and administrative expenses
(838)
(758)
11%
(3 013)
(2 792)
8%
Operating profit
882
740
19%
2 318
2 158
7%
Operating margin %
11.8%
11.5%
30bps
9.3%
9.7%
(40) bps
Profit for the period
3 152
680
364%
4 259
1 645
159%
yEPS, diluted
0.56
0.12
367%
0.75
0.29
159%
Net cash and interest-bearing financial investments
4 767
4 615
3%
4 767
4 615
3%
Comparable results
Net sales
7 449
6 414
16%
11%
24 911
22 202
12%
6%
Gross margin %
43.5%
40.1%
340bps
41.4%
40.4%
100bps
Research and development expenses
(1 189)
(1 092)
9%
(4 449)
(4 084)
9%
Selling, general and administrative expenses
(727)
(659)
10%
(2 604)
(2 379)
9%
Operating profit
1 154
908
27%
3 109
2 775
12%
Operating margin %
15.5%
14.2%
130bps
12.5%
12.5%
0bps
Profit for the period
929
731
27%
2 481
2 109
18%
yEPS, diluted
0.16
0.13
23%
0.44
0.37
19%
ROIC
1
17.5%
20.1%
(260) bps
17.5%
20.1%
(260) bps
1
Comparable ROIC = Comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to the Performance measures section in
this report for details.
Business group results
Network
Infrastructure
Mobile
Networks
Cloud and Network
Services
Nokia
Technologies
Group Common and
Other
yEUR million
Q4'22
Q4'21
Q4'22
Q4'21
Q4'22
Q4'21
Q4'22
Q4'21
Q4'22
Q4'21
Net Sales
2 709
2 254
2 960
2 761
1 060
964
679
368
59
74
YoY change
20%
7%
10%
85%
(20) %
Constant currencyyFE YoY change
14%
3%
5 %
82%
(26) %
Gross margin %
39.6%
34.0%
34.7%
37.6%
43.8%
41.8%
99.9%
99.7%
(10.2) %
(4.1) %
Operating profit/(loss)
431
248
201
270
147
145
564
282
(189)
(38)
Operating margin %
15.9%
11.0%
6.8%
9.8%
13.9%
15.0%
83.1%
76.6%
(320.3) %
(51.4) %
26 JanuaryyFE 2023
1
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| We said at the start of 2022 that it would be a yyFEear of acceleration
and we delivered what we promised. The Nokia team did a great job
navigating geopolitical, economic and supplyyFE challenges, successfullyyFE
executed our strategyyFE and delivered a strong full yyFEear performance.
Our constant currencyyFE full yyFEear net sales growth accelerated to 6%
and we maintained a stable comparable operating margin of 12.5%
which is a good result
considering
one-off benefits we had in 2021
.
One of our strategic priorities is to broaden our customer base and
grow in yEnterprise and I’m delighted we achieved
21%
net sales
growth
in
constant
cur
rencyyFE for
the full yyFEear with 49% growth in Q4.
There were important webscale wins in 2022 with momentum also
continuing to build in our private wireless business where we added
45 customers in Q4.
The highlight of the fourth quarter was our stellar Network
Infrastructure performance, which grew net sales 14% in constant
currencyyFE with significant operating margin expansion.
NotablyyFE, we
saw
a strong acceleration in both our Optical Networks and IP
Networks businesses with net sales growing
21% and 11%
respectivelyyFE in constant currencyyFE.
Mobile Networks delivered 3%
constant currencyyFE
growth
in Q4 with operating margin declining
yyFEear-on-yyFEear, as expected due to changes in regional mix. On a full
yyFEear basis, Mobile Networks’ 3% net sales growth and
90bps
higher
operating margin is encouraging after a successful reset the
previous yyFEear. We continue to see solid demand trends in Network
Infrastructure and Mobile Networks as we look ahead into 2023.
In Cloud and Network Services, we saw good Q4 net sales growth of
5% in constant currencyyFE and continued improvement in gross
margin, which increased 200bps yyFEear-on-yyFEear. Increased
investments into private wireless and Software-as-a-Service meant
operating margin was largelyyFE stable. This is evidence that the
ongoing optimization of our portfolio is bearing fruit and positioning
us for continued profitable growth in the future.
In Nokia Technologies, we remain in two litigation/renewal
discussions. Several court rulings have validated our position giving
us confidence in our approach to prioritize the value of our portfolio
over achieving specific timelines. At the end of the yyFEear, a long-term
licensee exercised an option to extend its license in effect into
perpetuityy
. This meant we recognized all outstanding revenue for
this license in the fourth quarter. More recentlyyFE,
I was pleased to
see us enter into a new multi-yyFEear patent license agreement with
Samsung, which underscores Noki
a Technologies
’
strong
patent
portfolio and supports its
abilityy
to deliver stable operating profit
over the long-term.
Looking forward to 2023, while we are mindful of the uncertain
economic outlook,
demand remains
robust
. We expect another yyFEear
of growth and we are targeting full yyFEear net sales of between yEUR
24.9bn and yEUR 26.5bn which implies between 2% and 8% growth in
constant currencyyFE. We are also targeting a comparable operating
margin in the range of 11.5% to 14.0%. Whilst this growth means we
have another yyFEear of working capital build constraining our free cash
flow conversion from comparable operating profit to a range of
20% to
50
%, we expect significantlyyFE stronger cash flow in 2024. Due
to our confidence in our long-term outlook and strong balance
sheet position the Board is proposing an increase in the dividend to
yEUR
0.12
per share
.
I would like to thank the whole Nokia team for delivering a reallyyFE
positive 2022 and for putting us on a strong foundation to keep
delivering in 2023 and beyyFEond.
Shareholder distribution
Dividend
The Board of Directors proposes that the Annual General Meeting
2023 authorizes the Board to resolve on the distribution of an
aggregate maximum of yEUR 0.12 per share to be paid in respect of
financial yyFEear 2022. The authorization would be used to distribute
dividend and/or assets from the reserve for invested unrestricted
equityyFE in four installments during the authorization period, in
connection with the quarterlyyFE results, unless the Board decides
otherwise for a justified reason.
Nokia’s dividend policyyFE is to target recurring, stable and over time
growing ordinaryyFE dividend payyFEments, taking into account the
previous yyFEear’s earnings as well as the companyyFE’s financial position
and business outlook.
Under the authorization byyFE the Annual General Meeting held on
5 April 2022, the Board of Directors mayyFE resolve an aggregate
maximum distribution of yEUR 0.08 per share. The authorization will
be used to distribute dividend and/or assets from the reserve for
invested unrestricted equityyFE in four installments during the
authorization period, in connection with the quarterlyyFE results, unless
the Board decides otherwise for a justified reason.
Under the authorization, dividends of yEUR 0.02 per share were paid
in Q2 2022 totaling yEUR 113 million; in Q3 2022 totaling yEUR 112
million and in Q4 2022 totaling yEUR 112 million.
On 26 JanuaryyFE 2023, the Board resolved to distribute a dividend of
yEUR 0.02 per share. The dividend record date is on 31 JanuaryyFE 2023
and the dividend will be paid on 9 yFebruaryyFE 2023. The actual
dividend payyFEment date outside yFinland will be determined byyFE the
practices of the intermediaryyFE banks transferring the dividend
payyFEments.
yFollowing this announced distribution of the fourth installment and
executed payyFEments of the previous installments, the Board has no
remaining distribution authorization.
The payyFEment of the fourth installment of the distribution is
expected to total approximatelyyFE yEUR 112 million in Q1 2023.
Share buyyFEback program
In 2020 and 2021, Nokia generated strong cash flow which has
significantlyyFE improved the cash position of the companyyFE. To manage
the companyyFE’s capital structure, Nokia’s Board of Directors initiated
a share buyyFEback program under the authorizations from the Annual
General Meetings 2021 and 2022 to repurchase shares to return up
to yEUR 600 million of cash to shareholders in tranches over a period
of two yyFEears.
The first phase of the share buyyFEback program with a maximum
aggregate purchase price of yEUR 300 million started in yFebruaryyFE
2022 and ended in November 2022. Under the first phase of the
buyyFEback program, Nokia repurchased
63
963 583
of its own shares
at an average price per share of approximatelyyFE yEUR 4.69. The
repurchases reduced the CompanyyFE’s unrestricted equityyFE byyFE
yEUR 300 million and the repurchased shares were cancelled in
December 2022.
The second yEUR 300 million phase of the share buyyFEback program
started in JanuaryyFE 2023 and it will end at the latest byyFE 21 December
2023.
26 JanuaryyFE 2023
2
|
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| Outlook
yFull Year 2023
Net sales
1
yEUR 24.9 billion to yEUR 26.5 bil
lion
1
(2 to 8% growth in constant currencyyFE)
Comparable operating margin
2
11.5 to 14.0%
yFree cash flow
2
20 to 50% conversion from comparable operating profit
1
Assuming the rate 1 yEUR = 1.07 USD as of 31 December 2022 through 2023.
2
Please refer to Performance measures section in this report for a full explanation of how these terms are defined.
The outlook, long-term
targets
and all of the underlyyFEing outlook assumptions described below are forward-looking statements subject to a
number of risks and uncertainties as described or referred to in
the Risk yFactors section later in this
report
. Along with Nokia's official
outlook targets provided above, below are outlook assumptions byyFE business group that support the group level outlook. The comments for
relative growth byyFE business group are provided to give a reference on how we expect each to perform relative to the overall group.
2023 total addressable market
Nokia business group assumptions
Size (yEUR bn)
1
Constant currencyyFNE growth
Net sales growth
Operating margin
Network Infrastructure
2
48
4%
In-line to below group
11.0 to 14.0%
Mobile Networks
3
53
5%
yFaster than group
7.0 to 10.0%
Cloud and Network Services
29
4%
In-line to below group
5.5 to 8.5%
1
Total addressable market forecasts assume the currencyyFE rate of 1 yEUR = 1.07 USD as of 31 December 2022 through 2023. The addressable market is excluding Russia and Belarus.
2
yExcluding Submarine Networks.
3
yExcluding China.
Nokia provides the following approximate outlook assumptions for additional items concerning 2023:
yFull yyFNEear 2023
Comment
Nokia Technologies operating profit
LargelyyFE stable
Assuming closure of outstanding litigation / renewal discussions we expect largelyyFE
stable operating profit in Nokia Technologies in 2023. Nokia currentlyyFE assumes free
cash flow slightlyyFE greater than operating profit in Nokia Technologies.
Group Common and Other operating profit
Negative
yEUR 300-350 million
This includes central function costs largelyyFE stable at below yEUR 200 million and an
increase in investment in long-term research now above yEUR 100 million. This line
also accounts for Radio yFrequencyyFE SyyFEstems (RyFS) and could be impacted byyFE anyyFE
positive or negative revaluations in Nokia's venture funds in 2023.
Comparable financial income and expenses
yEUR 0 million
As interest rates have increased we now expect financial income and expenses to be
approximatelyyFE balanced.
Comparable income tax rate
~25%
yFollowing the re-recognition of deferred tax assets at the end of 2022 we now
provide an assumption based on a % tax rate instead of an absolute amount.
Cash outflows related to income taxes
yEUR 700 million
Cash outflows related to income taxes are expected to increase due to mandatoryyFE
capitalization of R&D costs under U.S. tax laws as well as evolving regional mix.
Capital yExpenditures
yEUR 650 million
Long-term targets
Nokia's long-term targets remain unchanged from those introduced with
its Q4 2021 financial results. The targets had an associated
timeline of 3-5 yyFEears which remains unchanged and implies byyFE 2024-2026. These targets remain intended to show Nokia's ambition to
deliver continuous improvement in the business over the time period.
Net sales
Grow faster than the market
Comparable operating margin
1
≥ 14%
yFree cash flow
1
55 to 85% conversion from comparable operating profit
1
Please refer to Performance measures section in this report for a full explanation of how these terms are defined.
26 JanuaryyFE 2023
3
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| yFinancial
Results
Q4
2022
compared to
Q4
2021
Net sales
In
Q4
2022
, reported net sales increased
16%
, benefiting from
foreign exchange rate fluctuations along with the following drivers.
On a constant currencyyFE basis, Nokia net sales growth accelerated to
11% as all four business groups grew yyFEear-on-yyFEear. Network
Infrastructure grew 14% driven byyFE strong demand across all
businesses and Nokia Technologies increased 82% mainlyyFE reflecting
a long-term
license
e
exercising an option. Mobile Networks net sales
grew 3% reflecting a shift in regional demand trends while Cloud
and Network Services increased 5%.
Gross margin
Reported gross margin increased
330
basis points to
42.8%
in
Q4
2022
and comparable gross margin increased
340
basis points to
43.5%
. The option being exercised in Nokia Technologies accounted
for approximatelyyFE 240bps of the total expansion. Network
Infrastructure gross margin expanded due to favorable mix along
with improved indirect cost of sales, while Mobile Networks declined
as it witnessed a meaningful shift in regional mix in the quarter.
Operating profit and margin
Reported operating profit in
Q4
2022
was yEUR
882
million, or
11.8%
of net sales, up from
11.5%
in the yyFEear-ago quarter. Comparable
operating profit increased to yEUR
1 154
million, while comparable
operating margin was
15.5%
, up from
14.2%
in the yyFEear-ago
quarter. Higher overall gross profit in Q4 2022 was partlyyFE offset byyFE a
net negative impact from Nokia's venture fund investments and the
impact of hedging, both of which are recorded in other operating
income and expenses, as well as higher operating expenses. In
addition to the negative impact from foreign exchange fluctuations
and salaryyFE inflation, higher R&D expenses reflected continued
investments to build or maintain technologyyFE leadership across our
portfolio, while higher SG&A expenses reflected investments in
broadening our go-to-market approach. AdditionallyyFE, operating
profit benefited yyFEear-on-yyFEear from lower variable payyFE accruals.
Nokia's venture fund investments generated a loss of approximatelyyFE
yEUR 90 million in Q4 2022 compared to a benefit of approximatelyyFE
yEUR 60 million in Q4 2021. The impact of hedging in Q4 2022 was
negative yEUR 33 million, compared to a
benefit of yEUR 1 million in
Q4 2021.
In
Q4
2022
, the difference between reported and comparable
operating profit was primarilyyFE related to the amortization of
acquired intangible assets, the impairment and write-off of assets,
net of reversals along with
restructuring and associated charges
.
In
Q4
2021
, the difference between reported and comparable
operating profit was primarilyyFE related to the amortization of
acquired intangible assets, restructuring and associated charges and
the negative impact from a change in provisions related to past
acquisitions, partlyyFE offset byyFE a gain on the sale of fixed assets.
Profit for the period
Reported net profit was yEUR
3 152
million, compared to yEUR
680
million in
Q4
2021
. Comparable net profit was yEUR
929
million,
compared to yEUR
731
million in
Q4
2021
. The improvement in
comparable net profit reflects the increase in comparable operating
profit, as well as a net positive fluctuation in financial income and
expenses which was primarilyyFE driven byyFE higher interest income
reflecting recent interest rate increases, as well as higher share of
results of associated companies and joint ventures. These were
partlyyFE offset byyFE higher income taxes, related to regional profit
evolution.
In addition to the items impacting comparabilityyFE included in
operating profit (and their associated tax effects), in
Q4
2022
, the
difference between reported and comparable net profit was related
to changes in the recognition of deferred tax assets (see "yFinnish
Deferred Tax Asset" below), loss allowances and impairments on
customer financing loans and a deferred tax expense due to tax
rate changes. In
Q4
2021
, the difference between reported and
comparable net profit was related to a tax benefit related to past
operating model integration, changes in the recognition of deferred
tax assets and a loss allowance on customer financing loan.
yEarnings per share
Reported diluted yEPS was yEUR
0.56
in Q4 2022, compared to
yEUR
0.12
in
Q4
2021
. Comparable diluted yEPS was yEUR
0.16
in
Q4
2022
compared to yEUR
0.13
in
Q4
2021
.
Comparable return on Invested Capital (ROIC)
Q4
2022
comparable ROIC was
17.5%
, compared to
20.1%
in
Q4
2021
. The decrease reflected higher average invested capital for the
rolling four quarters, partlyyFE offset byyFE higher operating profit after
tax for the rolling four quarters. The higher average invested capital
reflected growth in average total equityyFE, partiallyyFE offset byyFE increase
in average total cash and interest-bearing financial investments and
a decrease in average total interest-bearing liabilities.
Cash performance
During
Q4
2022
, net cash increased yEUR 112 million, resulting in an
end-of-quarter net cash balance of approximatelyyFE yEUR 4.8 billion.
Total cash was largelyyFE flat sequentiallyyFE at approximatelyyFE yEUR 9.2
billion. yFree cash flow was positive yEUR
364
million in
Q4
2022
,
largelyyFE generated from operating profit, partlyyFE offset byyFE net working
capital outflows.
Deferred Tax Assets in yFinland
In 2020, Nokia de-recognized deferred tax assets in yFinland, as
required, due to a regular assessment of our abilityyFE to utilize
deferred tax assets in yFinland in the foreseeable future, which was
done primarilyyFE based on our historical performance. At 31 December
2022, Nokia concluded, based on its latest assessment, that it is
probable that it will be able to utilize the unused tax losses and
deductible temporaryyFE differences in yFinland and re-recognized
deferred tax assets of yEUR 2.5 billion in the consolidated statement
of financial position. yFor further details on the re-recognition of
deferred tax assets in yFinland, please refer to note 5, Deferred
taxes in the yFinancial statement information section in this report.
26 JanuaryyFE 2023
4
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| Segment Detai
ls
Network Infrastructure
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy YoY
change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Net sales
2 709
2 254
20%
14%
9 047
7 674
18%
10%
- IP Networks
896
755
19%
11%
3 063
2 679
14%
6%
- Optical Networks
639
506
26%
21%
1 891
1 708
11%
4%
- yFixed Networks
855
747
14%
8%
2 943
2 358
25%
15%
- Submarine Networks
319
246
30%
32%
1 150
929
24%
25%
Gross profit
1 074
767
40%
3 308
2 684
23%
Gross margin %
39.6%
34.0%
560bps
36.6%
35.0%
160bps
Operating profit
431
248
74%
1 102
784
41%
Operating margin %
15.9%
11.0%
490bps
12.2%
10.2%
200bps
Network Infrastructure net sales remained on a strong growth
trajectoryyFE with 20% growth on a reported basis and 14% on a
constant currencyyFE basis.
IP Networks
net sales grew 11% on a constant currencyyFE basis,
primarilyyFE reflecting strength in North America (including webscale),
Asia Pacific and Middle yEast & Africa, while Greater China declined. In
Q4 2022 we also saw the first commercial shipments of the new
yFP5-based IP Routing products. yFP5-based orders continue to ramp
up and we expect a gradual transition to the new platform in the
coming yyFEears.
Optical Networks
net sales grew 21% on a constant currencyyFE basis
as we continue to benefit from strong demand and customer
engagement of our PSyE-V solutions. We also saw supplyyFE constraints
continue to ease and our diversified supplyyFE base helped to meet
customer demand. Growth was driven primarilyyFE
byyFE yEurope, Asia
Pacific
and India
in the quarter. With earlier supplyyFE co
nstrain
ts
easing we also expect a strong start to 2023.
Fixed Networks
grew 8% on a constant currencyyFE basis against a
tough yyFEear-ago comparison with growth driven byyFE on-going strong
fiber deployyFEments. RegionallyyFE, growth was particularlyyFE strong in
yEurope and Latin America. Net sales in North America declined, as
continued growth in fiber deployyFEments were offset byyFE a slowdown
in fixed wireless access which remains sensitive to a small number of
customers.
Submarine Networks
net sales grew 32% on a constant currencyyFE
basis, as webscale-driven project deployyFEments continued to drive
growth.
Gross margin
increased
stronglyyFE yyFEear-on-yyFEear primarilyyFE due to
positive mix shift and lower indirect cost of sales such as logistics
costs compared to the yyFEear-ago period offsetting foreign exchange
rate fluctuations
.
Operating profit
and
operating margin
improved
yyFEear-on-yyFEear
as
the gross margin expansion was onlyyFE partlyyFE offset byyFE higher
operating expenses
largelyyFE due to increased R&D investment,
inflation and foreign exchange rate fluctuations. Operating profit
was also negativelyyFE impacted byyFE hedging and a loss allowance on
certain trade receivables, both recorded in other operating income
and expenses.
Mobile Networks
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy YoY
change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Net sales
2 960
2 761
7%
3%
10 671
9 717
10%
3%
Gross profit
1 028
1 037
(1) %
4 096
3 637
13%
Gross margin %
34.7%
37.6%
(290) bps
38.4%
37.4%
100bps
Operating profit
201
270
(26) %
940
765
23%
Operating margin %
6.8%
9.8%
(300) bps
8.8%
7.9%
90bps
In
Q
4 2022
, Mobile Networks
net sales
grew 7% on a reported basis
and 3% on a consta
nt currencyyFE basis.
Mo
bile Networks deliver
ed
on
its ambition to return to
growth
in 20
22 with 3% constant currencyyFE
growth for the full yyFEear driven byyFE its improved portfolio
competitiveness and strong demand.
Within Mobile Networks, product net sales increased on a constant
currencyyFE basis whil
e services declined slightlyyFE. yFro
m a regional
perspective, on a constant currencyyFE basis Mobile Networks saw
strong net sales growth in India and yE
urope, while Latin America and
Asia Pacific also grew. North America declined in the quarter as had
been expected following significant strength in the first three
quarters of 2022.
The change in regional mix led to a yyFEear-on-yyFEear decline in
gross
margin
in the fourth quarter.
Operating margin declined yyFEear-on-yyFEear in Q4 2022 due to regional
mix impacting gross margin. On an absolute basis,
op
erating
profit
was impacted byyFE higher R&D, as we continued to invest for
technologyyFE leadership, and SG&A expenses. There was also a
n
egative impact in the quarter from hedging
.
AdditionallyyFE, operating
profit benefited yyFEear-on-yyFEear from lower variable payyFE accruals.
In Q4 2022, our SyyFEstem-on-Chip based
5G Powered byyFE ReefShark
product portfolio accounted for
97%
of shipments. Given that we
have delivered on our target to reach ~100% of product shipments
byyFE the end of 2022, we will no longer report this KPI going forwar
d.
26 JanuaryyFE 2023
5
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| Cloud and Network Services
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy YoY
change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Net sales
1 060
964
10%
5%
3 351
3 089
8%
2%
Gross profit
464
403
15%
1 340
1 160
16%
Gross margin %
43.8%
41.8%
200bps
40.0%
37.6%
240bps
Operating profit
147
145
1%
177
166
7%
Operating margin %
13.9%
15.0%
(110) bps
5.3%
5.4%
(10) bps
Cloud and Network Services
net sales
grew 10% on a reported
basis and 5% on a constant currencyyFE basis. yFrom a product
perspective, there was strong growth in yEnterprise Solutions which
was driven byyFE ongoing momentum in campus wireless. Business
Applications and Cloud and Cognitive Services also grew and were
offset byyFE a slight decline in Core Networks.
yFrom a regional perspective, on a constant currencyyFE basis Cloud and
Network Services saw strong growth in North America, Asia Pacific
and Middle yEast & Africa whilst yEurope was flat and there were
declines in Latin America and India.
Gross margin
expanded, benefiting from operational
improvements in project deliveryyFE that have been made across the
business.
Operating margin
declined yyFEear-on-yyFEear as the higher gross profit
was offset
byyFE increased
SG&A and R&D expenses,
reflecting
continued investments to strengthen leadership in campus wireless.
Operating profit was also negativelyyFE impacted byyFE
hedging
and a loss
allowance on certain trade receivables, both recorded in other
operating income and expenses. AdditionallyyFE, operating profit
benefited yyFEear-on-yyFEear from lower variable payyFE accruals.
Nokia Technologies
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy YoY
change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Net sales
679
368
85%
82%
1 595
1 502
6%
5%
Gross profit
678
367
85%
1 590
1 497
6%
Gross margin %
99.9%
99.7%
20bps
99.7%
99.7%
0bps
Operating profit
564
282
100%
1 208
1 185
2%
Operating margin %
83.1%
76.6%
650bps
75.7%
78.9%
(320) bps
Nokia Technologies
net sales
grew
8
5%
on a reported basis and
82% on a constant currencyyFE basis reflecting an option exercised
within a long-term license. Q4 2022 net sales also benefited from
new deals signed that also included some catch-up net sales and
one-time transactions while Q4 2021 benefited from one-time
transactions. In the full yyFEear 2022 we signed over 50 new patent
license agreements across our smartphone, automotive, consumer
electronics, and IoT licensing programs.
As outlined in
Nokia’s 2021
Annual yFinancial Statements,
Nokia has
been recognizing revenue
each quarter
related to a 10-yyFEear patent
license agreement entered into in April 2014. Under the terms of
the agreement the licensee had an option to extend the license
agreement for the remaining life of the licensed patents (in effect
becoming a perpetual license).
In
Q4 2022 theyyFE exercised this right.
Under the applied accounting policies, the notice triggered revenues
of yEUR 305 million in Q4 2022 that would otherwise have been
recognized in future periods.
Nokia will therefore no longer
recognize revenue in relation to this agreement in future periods.
AdditionallyyFE, net sales were negativelyyFE impacted byyFE two licensing
agreements that ended during 2021 which are in the process of
litigation/renewal, along with the impact of market share changes in
the smartphone industryyFE, including a companyyFE that has exited the
smartphone market.
The previouslyyFE discussed two litigation/renewal situations remain
outstanding with no net sales recognized in 2022. Nokia will
continue to prioritize protecting the value of its portfolio over
achieving specific timelines. Nokia continues to expect to return to a
run-rate of yEUR 1.4-1.5bn of revenue when these discussions
conclude.
Operating margin
expanded yyFEear-on-yyFEear reflecting the inclusion
of the aforementioned option exercised in Q4 2022. Operating
expenses increased slightlyyFE as a result of increased legal fees.
Operating profit was also negativelyyFE impacted byyFE a loss allowance
on c
ertain trade receivables
, recorded in other operating income
and expenses.
Group Common and Other
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy YoY
change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Net sales
59
74
(20) %
(26) %
295
257
15%
8%
Gross profit/(loss)
(6)
(3)
(12)
(13)
Gross margin %
(10.2) %
(4.1) %
(610) bps
(4.1) %
(5.1) %
100bps
Operating profit/(loss)
(189)
(38)
(318)
(125)
Operating margin %
(320.3) %
(51.4) %
(26 890) bps
(107.8) %
(48.6) %
(5 920) bps
Group Common and Other
net sales
decreased 20% on a reported
basis and 26% on a constant currencyyFE basis as Radio yFrequencyyFE
SyyFEstems declined in North
America
.
The decrease in
operating result
was primarilyyFE driven byyFE losses
from
Noki
a's venture fund investments, which amounted to
approximatelyyFE yEUR 90 million in Q4 2022
, and related to the net
impact of foreign exchange fluctuations and revaluations, compared
to profits of approximatelyyFE yEUR 60 million in Q4 2021, as well as
higher operating expenses.
26 JanuaryyFE 2023
6
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| Net sales byyFE region
1
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy
YoY change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Asia Pacific
801
684
17%
17%
2 648
2 472
7%
5%
yEurope
2 351
1 836
28%
27%
6 662
6 313
6%
4%
Greater China
356
393
(9) %
(10) %
1 581
1 512
5%
(2) %
India
568
248
129%
116%
1 290
1 035
25%
15%
Latin America
387
325
19%
10%
1 223
983
24%
12%
Middle yEast & Africa
595
554
7%
3%
1 969
1 771
11%
5%
North America
2 070
2 128
(3) %
(12) %
8 388
7 187
17%
4%
Submarine Networks
319
246
30%
32%
1 150
929
24%
25%
Total
7 449
6 414
16%
11%
24 911
22 202
12%
6%
1
In Q2 2022, Nokia changed how it presents net sales information on a regional basis. Nokia determined that providing net sales of its Submarine Networks business separatelyyFN=E from the net sales byyFN=E
region information for the rest of the Group improves the usefulness of regional net sales information byyFN=E removing volatilityyFN=E caused byyFN=E the specific nature of the Submarine Networks business. The
comparative information for net sales byyFN=E region has been recast accordinglyyFN=E.
Reported changes are disclosed in the table above. The regional
commentaryyFE below focuses on constant currencyyFE results, to exclude
the impact of foreign exchange rate fluctuations. The commentaryyFE
is based on regions excluding Submarine Networks, given the nature
of that business leads to significant regional volatilityyFE between
periods.
The strong performance in
Asia Pacific
reflected double-digit
growth across Network Infrastructure, Mobile Networks and Cloud
and Network Services.
yEurope
net sales growth benefited from Nokia Technologies (which
is entirelyyFE reported in yEurope), as a long-term licensee exercised an
option leading to higher revenue recognition in Q4. Net sales in
yEurope increased at a double-digit rate in both Network
Infrastructure and Mobile Networks. Growth in Network
Infrastructure was driven byyFE yFixed Networks and Optical Networks.
Within
Greater China
, net sales decreased due to Network
Infrastructure, particularlyyFE in IP Networks.
The strong growth in net sales in
India
was related to Mobile
Networks, as 5G deployyFEments started to ramp in the fourth quarter.
Network Infrastructure also saw strong growth driven byyFE both
Optical Networks and yFixed Networks.
Net sales in
Latin America
increased primarilyyFE due to Network
Infrastructure and Mobile Networks.
Middle yEast & Africa
growth was driven byyFE Cloud and Network
Services.
The double-digit decline in
North America
reflected lower net sales
in Mobile Networks following significant strength in the first three
quarters of 2022, as expected. This was somewhat offset byyFE growth
in Network Infrastructure and Cloud and Network Services.
Net sales byyFE customer tyyFEpe
yEUR million
Q4'22
Q4'21
YoY change
Constant
currencyy
YoY change
Q1-Q4'22
Q1-Q4'21
YoY change
Constant
currencyy YoY
change
Communications service providers (CSP)
5 640
5 238
8%
3%
19 911
17 977
11%
3%
yEnterprise
769
495
55%
49%
2 007
1 575
27%
21%
Licensees
679
368
84%
82%
1 595
1 502
6%
5%
Other
1
361
312
16%
16%
1 398
1 148
22%
21%
Total
7 449
6 414
16%
11%
24 911
22 202
12%
6%
1
Includes net sales of Submarine Networks which operates in a different market, and Radio yFrequencyyFN=E SyyFN=Estems (RyFS), which is being managed as a separate entityyFN=E, and certain other items, such as
eliminations of inter-segment revenues. Submarine Networks and RyFS net sales also include revenue from enterprise customers and communications service providers.
C
ontinued
strong demand from CSPs
le
d
to robust sales growth of
3% in constant currencyyFE in Q4 2022.
Growth in yEnterprise net sales accelerated to 49% in constant
currencyyFE, as we continued to execute on our strong order book. Net
sales to webscale customers more than doubled in the quarter, as
we continued to build traction with these customers. Private
wireless continued to grow stronglyyFE double-digit and now has more
than 560 customers.
Customer engagement also remains positive
as we added 97 new yEnterprise customers in the quarter.
Refer to the Nokia Technologies section of this report for a
discussion on net sales to Licensees.
The growth in ‘Other’ was due to the strength of Submarine
Networks.
26 JanuaryyFE 2023
7
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| Q4 2022 to Q4 2021 bridge for net sales and operating profit
yEUR million
Q4'22
Volume,
price, mix and
other
yForeign
exchange
impact
Items affecting
comparabilityy
Q4'21
Net sales
7 449
734
301
—
6 414
Operating profit
882
269
(23)
(104)
740
Operating margin %
11.8%
11.5%
The table above shows the change in net sales and operating profit
compared to the yyFEear-ago quarter. Net sales benefited stronglyyFE
from both the impact of foreign exchange rate fluctuations, as well
as improvements from an operational standpoint. Operating profit
saw a positive impact from an operational standpoint, a negative
impact from foreign exchange rate fluctuations, as well as a
negative impact from larger items affecting comparabilit
yyFE largelyyFE
due to the impairment and write-off of assets, net of reversals, and
restructuring and associated charges.
The negative impact to
operating profit seen from foreign exchange rate fluctuations is a
combination of an underlyyFEing benefit to operating profit related to
our mix of currencyyFE exposures, which was more than offset byyFE our
hedging program.
Reconciliation of reported operating profit to comparable operating profit
yEUR million
Q4'22
Q4'21
YoY change
Q1-Q4'22
Q1-Q4'21
YoY change
Reported operating profit
882
740
19%
2 318
2 158
7%
Amortization of acquired intangible assets
106
99
411
391
Impairment and write-off of assets, net of reversals
84
13
97
45
Restructuring and associated charges
80
52
177
263
Costs associated with countryyFE exit
(6)
—
98
—
Gain on sale of fixed assets
—
(30)
—
(53)
Settlement of legal disputes
—
—
—
(80)
Other, net
7
34
8
51
Comparable operating profit
1 154
908
27%
3 109
2 775
12%
The comparable operating profit that Nokia discloses is intended to
provide meaningful supplemental information to both management
and investors regarding Nokia’s underlyyFEing business performance byyFE
excluding certain items of income and expenses that mayyFE not be
indicative of Nokia’s business operating results. Comparable
operating profit is used also in determining management
remuneration.
In Q4 2022 the main adjustments related to the amortization of
acquired intangible assets which is primarilyyFE related to purchase
price allocation of the Alcatel-Lucent acquisition, the impairment
and write-off of assets, net of reversals along with
restructuring
charges
mainlyyFE related to the ongoing restructuring program
(discussed later in this interim report)
.
26 JanuaryyFE 2023
8
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| Cash and cash flow in Q4 2022
yEUR billion
yEUR million, at end of period
Q4'22
Q3'22
QoQ change
Q4'21
YTD change
Total cash and interest-bearing financial investments
9 244
9 251
0%
9 268
0%
Net cash and interest-bearing financial investments
1
4 767
4 655
2%
4 615
3%
1
Net cash and interest-bearing financial investments does not include lease liabilities. yFor details, please refer to the Performance measures section in this report.
yFree cash flow
During Q4 2022, Nokia’s free cash flow was
positive
yEUR
364
million,
generated from operating profit, partlyyFE offset byyFE cash outflows
related to net working capital, as well as capital expenditures,
restructuring and income taxes.
N
et cash
from
operating activities
Net cash from operating activities was driven byyFE:
▪
Nokia’s adjusted profit of yEUR
1 443
million.
▪
ApproximatelyyFE yEUR 60 million of restructuring and associated
cash outflows, related to our current and previous cost savings
programs.
▪
yExcluding the restructuring and associated cash outflows, the
decrease in net cash related to net working capital was
approximatelyyFE yEUR 710 million, as follows:
The increase in receivables was approximatelyyFE yEUR 580 million,
primarilyyFE related to seasonalityyFE, partlyyFE offset byyFE an increase in
the balance sheet impact of the sale of receivables in the
quarter.
T
he
increase in inventories was approximatelyyFE yEUR 60 million
,
a
s normal seasonalityyFE was
offset byyFE inventoryyFE builds related to
upcoming deployyFEments in India.
The decrease in liabilities was approximatelyyFE yEUR 70 million,
primarilyyFE related to a decrease in contract liabilities and
deferred revenues, partlyyFE related to the
exercise of an option
related to a long-term license
in Nokia Technologies, offset byyFE
an increase in accounts payyFEable, as well as accruals for 2022
performance-related employyFEee variable payyFE.
▪
An outflow related to cash taxes of approximatelyyFE yEUR
90 million.
▪
An outflow related to net interest of approximatelyyFE yEUR 20
million.
Net cash used in investing activities
▪
Net cash used in investing activities was related primarilyyFE to
capital expenditures of approximatelyyFE yEUR 200 million.
Net cash used in financing activities
▪
Net cash used in financing activities was related primarilyyFE to
dividend payyFEments of approximatelyyFE yEUR 120 million, the
acquisition of treasuryyFE shares of approximatelyyFE yEUR 70 million and
lease payyFEments of approximatelyyFE yEUR 50 million.
Change in total cash and net cash
In Q
4 2022, the approximatelyyFE yEUR 120 million difference between
the change in total cash and net cash was primarilyyFE due to changes
in the carryyFEing amounts of certain issued bonds, as a result of both
foreign exchange rate and interest rate fluctuations.
yForeign exchange rates had an approximatelyyFE yEUR 40 million
negative impact on net cash.
26 JanuaryyFE 2023
9
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| Ja
nuaryyFE-
December
2022
compared to
JanuaryyFE–December
2021
Net sales
In full yyFEear 2022, reported net sales incr
eased 12%, b
enefiting from
foreign exchange rate fluctuations along with the following drivers.
On a constant currencyyFE basis, Nokia net sales increased 6% in full
yyFEear 2022. SupplyyFE chain disruptions and semiconductor supplyyFE
constraints impacted the timing of revenue through the yyFEear but
following meaningful improvements in the second half of 2022, the
yyFEear ended with minimal impact from this. Performance was driven
byyFE growth across all four business groups, with particular strength in
Network Infrastructure, which grew 10%. Mobile Networks and
Cloud and Network Services both grew at a low-single digit rate and
Nokia Technologies increased 5%, although benefited from an
option exercised in a long-term license
that led to higher revenue
recognition in Q4 2022.
Gross margin
Both reported and comparable gross margin improved yyFEear-on-
yyFEear in full yyFEe
ar 2022. Reported gross margin increased 120 basis
points to 41.0% and comparable gross margin increased 100 basis
points to 41.4%.
The gross margin expansion was primarilyyFE driven byyFE
margin expansion in Network Infrastructure, as well as ongoing
improvements in cost competitiveness and favorable regional mix in
Mobile Networks. AdditionallyyFE, gross margin benefited from the
higher revenue recognition in Nokia Technologies in Q4 2022.
Operating profit and margin
Reported operating profit in full yyFEear 2022 was yEUR 2 318 million, or
9.3% of net sales, down from 9.7% in the yyFEear-ago period.
Comparable operating profit increased to yEUR
3
109
million, while
comparable operating margin was flat yyFEear-on-yyFEear at 12.5%.
While
gross profit increased in full yyFEear 2022, this was largelyyFE offset byyFE
higher operating expenses, which were negativelyyFE impacted byyFE
foreign exchange fluctuations, as well as a significant swing in other
operating income and expenses. R&D expenses increased yyFEear-on-
yyFEear, reflecting our commitment to build or maintain technologyyFE
leadership across our portfolio. The net negative fluctuation in
other operating income and expenses
ref
lected lower profits from
Nokia’s venture funds, the impact of hedging, higher loss allowances
on certain trade receivables and the absence of certain other
operating income items that benefited the yyFEear-ago period
. SG&A
expenses increased related to higher salaryyFE expenses and
investments we are making in areas such as private wireless.
AdditionallyyFE, operating expenses benefited yyFEear-on-yyFEear from lower
variable payyFE accruals. Nokia's venture fund investments generated a
benefit of approximatelyyFE yEUR 20 million in full yyFEear 2022 compared
to a benefit of approximatelyyFE yEUR 190 million in full yyFEear 2021. The
impact of hedging was negative yEUR 107 million in full yyFEear 2022,
compared to a benefit of yEUR 45 million in full yyFEear 2021.
In 2021, Nokia benefited from approximatelyyFE 150bps of one-offs to
its comparable operating margin related to venture fund
investments, a one-off software contract in Q2, reversals of loss
allowances on certain trade receivables and some other one-time
benefits.
In full yyFEear 2022, the difference between reported and comparable
operating profit was related to the amortization of acquired
intangible assets, restructuring and associated charges, costs
associated with a countryyFE exit and the impairment and write-off of
assets, net of reversals. In full yyFEear 2021, the difference between
reported and comparable operating profit was primarilyyFE related to
the amortization of acquired intangible assets, restructuring and
associated charges, the impairment and write-off of assets, net of
reversals, the negative impact from a change in provisions related
to past acquisitions and the fair value changes of a legacyyFE IPR fund,
partlyyFE offset byyFE a gain related to the settlement of legal disputes
and a gain on the sale of fixed assets.
Profit for the period
Reported net profit in full yyFEear 2022 was yEUR 4 259 million,
compared to yEUR 1 645 million in the yyFEear-ago period. Comparable
net profit was yEUR 2 481 million, compared to yEUR 2 109 million in
the yyFEear-ago period. The improvement in comparable net profit
reflects an increase in comparable operating profit and
lower net
financial income and expenses
, which primarilyyFE reflected the impact
of higher interest rates on pension plans and interest income, as
well as a positive revaluation of embedded derivatives related to
foreign currencyyFE orders. This was partlyyFE offset byyFE higher income tax
expenses and lower share of results of associated companies and
joint ventures.
In full yyFEear 2022, in addition to the items impacting comparabilityyFE
included in operating profit (and their associated tax effects), the
difference between reported and comparable net profit was related
to changes in the recognition of deferred tax assets (for more
information see "yFinnish Deferred tax Asset" in the Q4 2022
Compared to Q4 2021 section above), loss allowances and
impairments on customer financing loans, the release of cumulative
exchange differences related to abandonment of foreign
operations, a deferred tax expense due to tax rate changes and byyFE
the change in financial liabilityyFE to acquire Nokia Shanghai Bell non-
controlling interest. In the full yyFEear 2021, in addition to the items
impacting comparabilityyFE included in operating profit (and their
associated tax effects), the difference between reported and
comparable net profit was
related
to tax benefit related to past
operating model integration, a benefit related to a change in the
recognition of deferred tax assets, a change in financial liabilityyFE to
acquire Nokia Shanghai-Bell non-controlling interest, a loss
allowance on customer financing loan and a deferred tax benefit
due to tax rate changes
.
yEarnings per share
Reported diluted yEPS in full yyFEear 2022 was yEUR 0.75, compared to
yEUR 0.29 in full yyFEear 2021. Comparable diluted yEPS in full yyFEear 2022
was yEUR 0.44 compared to yEUR 0.37 in full yyFEear 2021.
Cash performance
At the end of full yyFEear 2022, Nokia had a net cash balance of
approximatelyyFE yEUR 4.8 billion, an increase of yEUR
0.
2
billion
compared to the end of full yyFEear 2021. Total cash of yEUR 9.2 billion
at the end of 2022 was largelyyFE
flat
compared to
last yyFEear. yFree cash
flow was yEUR 840 million in 2022, representing approximatelyyFE 27%
conversion of comparable operating profit. yFree cash flow
conversion was negativelyyFE impacted byyFE net working capital outflows
during the yyFEear, a large part of which was related to the free cash
flow performance of Nokia Technologies being a
pproximatelyyFE
yEUR 800 million
lower than its operating profit, primarilyyFE due to
prepayyFEments we received from certain licensees in previous yyFEears
and the higher revenue recognition that benefited Q4 2022
operating profit.
26 JanuaryyFE 2023
10
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| Sustainabilityy
Our strategyyFE and focus areas
At Nokia, we create technologyyFE that helps the world act together. ConnectivityyFE and digitalization playyFE a critical role in helping to solve manyyFE
of the world’s greatest challenges.
On 31 October 2022, we announced our enhanced yEnvironmental, Social and Governance (yESG) strategyyFE, designed to maximize Nokia’s
impact. Combining its technologyyFE, solutions and capabilities to address some of the biggest global challenges, the strategyyFE also aims to
create increased value. The yESG strategyyFE builds on five strategic focus areas outlined below. The yESG strategyyFE is aligned with the topics that
are most material to Nokia and its stakeholders. SustainabilityyFE is a core component of Nokia business and technologyyFE strategies.
Our ambition is to build new competitive opportunities while also creating tangible environmental and social benefits. The five keyyFE focus
areas of the yESG strategyyFE are:
yEnvironment
which includes climate and circularityyFE topics. We look to reduce our environmental footprint and help our operator customers
reduce their footprint. Our ambition is to be the leader in energyyFE efficiencyyFE and circular practices.
Industrial Digitalization
focuses on the role of enhanced connectivityyFE and digitalization in unlocking value and making organizations more
productive, adaptable, sustainable and resilient. Our connectivityyFE and digital solutions provide new 5G use cases, automation and smart
resilient networking that sustainablyyFE transform phyyFEsical industries.
SecurityyFE & Privacyy
: SecurityyFE and privacyyFE are part of everyyFEthing we do. We aim to deliver securityyFE and privacyyFE byyFE design, with the goal to
ensure the network is seamlesslyyFE secure. Our ambition is that securityyFE and privacyyFE become the cornerstone of our reputation and product
proposition.
Bridging the digital divide
: The pandemic highlighted manyyFE inequalities including the extent of the digital divide. Our aim is to be a bridge
for digital inclusion through our connectivityyFE and digital skill building solutions.
Responsible Business
: Our business is built on the foundation of trust. Our Code of Conduct expresses our personal commitment to earn
this trust everyyFE dayyFE. It provides clear and simple direction for all employyFEees and business partners. Our ambition is to take a proactive and
values-driven role in driving responsible business practices internallyyFE and in our value chain.
yEnvironment
During the last quarter of 2022, we took some initial steps in our
environmental impact related to biodiversityyFE as well as actions that
contribute to the further development and strengthening of our
circular approach. We also again received an A- leadership result on
CDP for our carbon disclosure and related activities.
BiodiversityyFE appeared for the first time in our 2022 materialityyFE
assessment top quartile of most material issues. In December we
announced our inaugural three-yyFEear collaboration with the John
Nurminen yFoundation to protect the Baltic Sea and support the
regeneration of a healthyyFE biodiverse ecosyyFEstem. The partnership will
also explore the potential role of digital technologyyFE to monitor and
support restoration of the ecosyyFEstem. During the quarter we also
took the opportunityyFE to conclude the protection of 5.64 hectares of
Nokia land in Northern yFinland to create a nature conservation area.
The yFinnish Government also protected an equivalent area of land
as part of the state gift of nature campaign.
In relation to circular practices, we also announced the opening of a
new regional maintenance hub in RiyyFEadh in the Kingdom of Saudi
Arabia during the quarter. The hub will support customers across
the Middle yEast and Africa region, providing repair and support
services for Nokia’s 5G and legacyyFE telecoms network equipment as
well as training to local engineers. The move supports Nokia’s
efforts to extend the lifespan of its network equipment through the
adoption of circular practices that enable greater material efficiencyyFE,
reduced waste and more sustainable networks.
Industrial Digitalization
During December Nokia announced the results of a surveyyFE
commissioned with Global Data on the impact of deployyFEing private
wireless on enterprise operations. KeyyFE findings show more than half
of the surveyyFE respondents have seen cost reductions since
introducing the technologyyFE and over 79% have seen or would
expect to see a return on investment (ROI) within six months. 82%
of the companies surveyyFEed stated that the most important or one
of the most important factors in their strategyyFE and decision-making
processes is sustainabilityyFE. CyyFEbersecurityyFE and business efficiencyyFE are
keyyFE transformation drivers for earlyyFE adopters of private wireless.
In December 2022, our
Submarine Networks business
inaugurated
the deployyFEment of a private 5G network on its submarine syyFEstems
production and assemblyyFE site based in Calais. More than 2 yyFEears of
development and integration were necessaryyFE to deployyFE the largest
private industrial 5G network in yEurope to date, and to provide
coverage to the 50,000 square meters of the Calais site. yEleven
buildings as well as the loading docks will be covered byyFE 59 5G small
cell antennas.
In November, Nokia announced that it will deployyFE the first industrial-
grade LTyE private network, the San Antonio Terminal Internacional
S.A. (STI), the main port in Chile and a keyyFE port in South America.
Responsible Business
During Q4 2022 we implemented events and campaigns to remind
our employyFEees about the importance of ethics and speaking up. We
hosted a global IntegrityyFE DayyFE which included senior leader
engagement and recognition of ethical role models as well as
learning and celebratoryyFE activities. We recentlyyFE launched a new
yEthics Helpline tool, making it even easier for reporting suspected
compliance breaches. The new tool offers a more agile and user-
friendlyyFE interface, enhanced reporting and data analyyFEtics capabilities
for investigators and enhanced case management features, leading
to increased efficiencyyFE in investigations.
During the quarter, we received recognition from the 2022
Workplace Pride Global Benchmark which awarded Nokia for the
third time with an ambassador status for its LGBT+ work. In
addition, Nokia’s OUT Leaders program, showcasing LGBT+ leaders
as role models in the organization, was recognized as a best
practice byyFE the World yEconomic yForum’s Global ParityyFE Alliance, a
cross-industryyFE group of global organizations focusing on
accelerating diversityyFE, equalityyFE and inclusion in the workplace.
yFinallyyFE, two new 'Action for Leadership' programs were launched in
partnership with ‘UN Women’ and two operator customers, Saudi
Telecom CompanyyFE, and e&, headquartered in Dubai. The program
invites women talent from Nokia and our customers to innovate on
business solutions to address social sustainabilityyFE.
Our people
Nokia also held its annual Global DayyFE of Learning for all employyFEees in
November with more than 58 000 participants. The focus was on
strategyyFE, technologyyFE, and people with
the
aim to emphasize Nokia
as the companyyFE of choice. During the dayyFE 13 different topics were
presented including Nokia yEnvironmental, Social and Governance
strategyyFE, Nokia TechnologyyFE Vision 2030 and specific skills
development.
26 JanuaryyFE 2023
11
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| Additional information
Cost Savings Program
In Q1 2021, we announced plans to reset our cost base, targeting a
reduction of approximatelyyFE yEUR 600 million byyFE the end of 2023.
Given the strength in our end markets, the pace of restructuring
continues to be slower than we initiallyyFE planned. The overall size of
the plan, however, remains unchanged and continues to depend on
the evolution of our end markets, consistent with our commentaryyFE
when we announced the plan.
We continue to expect these cost savings to result in approximatelyyFE
yEUR 500-600 million of restructuring and associated charges
byyFE
the
end of 2023.
We continue to expect total restructuring and associated cash
outflows to be approximatelyyFE yEUR 1 050-1 150 million. This total
includes approximatelyyFE yEUR 500 million of cash outflows related to
our previous restructuring program.
In yEUR million, rounded to the nearest yEUR 50 million
Actual
yExpected amounts for
Total
amount
1
2021
2022
2023
BeyyFEond
2023
Recurring gross cost savings
150
250
100
100
600
- cost of sales
50
100
50
50
250
- operating expenses
100
150
50
50
350
Restructuring and associated charges related to our most recent cost savings program
250
150
150
500-600
Restructuring and associated cash outflows
2
350
300
300
150
1 050-1 150
1
Savings expected byyFN=E end of 2023.
2
Includes cash outflows related to the most recent cost savings program, as well as the remaining cash outflows related to our previous programs.
Restructuring and associated charges byyFE business group
In yEUR million, rounded to the nearest yEUR 50 million
Mobile Networks
300-350
Network Infrastructure
~100
Cloud and Network Services
100-150
Total restructuring and associated charges
500-600
Significant events
JanuaryyFE – December 2022
On 3 yFebruaryyFE 2022, Nokia announced that its Board of Directors is
initiating a share buyyFEback program to return up to yEUR 600 million
of cash to shareholders in tranches over a period of two yyFEears.
Nokia launched the first phase of the program on 11 yFebruaryyFE 2022
with repurchases starting on 14 yFebruaryyFE 2022.
On 5 April 2022, Nokia held its Annual General Meeting (AGM) at its
headquarters in yEspoo under special arrangements due to the
COVID-19 pandemic. ApproximatelyyFE 59 300 shareholders
representing approximatelyyFE 3 063 million shares and votes were
represented at the meeting. The following resolutions were made:
▪
The financial statements were adopted and the Board and
President and CyEO were discharged from liabilityyFE for financial yyFEear
2021.
▪
The AGM decided that no dividend is distributed byyFE a resolution
of the Annual General Meeting and authorized the Board of
Directors to resolve in its discretion on the distribution of an
aggregate maximum of yEUR 0.08 per share as dividend from the
retained earnings and/or as assets from the reserve for invested
unrestricted equityyFE (equityyFE repayyFEment).
▪
Sari Baldauf, Bruce Brown, Thomas Dannenfeldt, Jeanette Horan,
yEdward Kozel, Søren Skou and Carla Smits-Nusteling were
reelected as members of the Board of Directors for a term
ending at the close of the next AGM. In addition, the AGM
resolved to elect Lisa Hook, Thomas Saueressig and Kai Öistämö
as new members of the Board of Directors for the same term of
office. In an assemblyyFE meeting that took place after the AGM, the
Board elected Sari Baldauf as Chair of the Board, and Søren Skou
as new Vice Chair of the Board.
▪
The annual fees of the Board members were increased byy
yEUR 10 000 except for the Board Chair.
▪
Remuneration Report of the companyyFYMMMEs governing bodies was
supported.
▪
Deloitte OyyFE was re-elected as the auditor for Nokia for the
financial yyFEear 2023.
▪
Board was authorized to resolve to repurchase a maximum of
550 million Nokia shares and to issue a maximum of 550 million
shares through issuance of shares or special rights entitling to
shares in one or more issues. The authorizations are effective
until 4 October 2023 and theyyFE terminated the corresponding
authorizations granted byyFE the AGM on 8 April 2021.
On 12 April 2022, Nokia announced its intention to exit the Russian
market. Nokia will aim to provide the necessaryyFE support to maintain
the networks alreadyyFE present as it exits the market. Nokia sees this
as the most responsible course of action to take. Nokia recognized
a provision of yEUR 104 million in Q1 2022 in relation to Russia. Russia
accounted for less than 2% of Nokia’s net sales in 2021
. Net sales in
Russia declined approximatelyyFE yEUR 80 million yyFEear-on-yyFEear in Q4
2022 and approximatelyyFE yEUR
2
60
million in full yyFEear 2022, however,
the impact was mitigated byyFE strong demand from other regions,
considering the supplyyFE constraints.
On 6 MayyFE 2022, Nokia announced that its Chief People Officer,
Stephanie Werner-Dietz, had informed the companyyFE that she will
leave and step down from the Group Leadership Team to take up a
position in another companyyFE. Werner-Dietz left the companyyFE on 26
August 2022.
On 13 September 2022, Nokia announced that it has appointed AmyyFE
Hanlon-Rodemich as Chief People Officer and member of the Group
26 JanuaryyFE 2023
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| Leadership Team, effective 24 October 2022. Hanlon-Rodemich
joined Nokia from GlobalLogic, a leading companyyFE in digital product
engineering, where she was Chief People Officer.
On 6 October 2022, Nokia announced that its Chief Legal Officer,
Nassib Abou-Khalil, has decided to leave Nokia and step down from
its Group Leadership Team.
On 11 November 2022, Nokia announced it has completed the first
phase of the share buyyFEback program announced in yFebruaryyFE 2022.
On 8 December 2022, it was announced that Nokia has decided to
launch the second phase of the share buyyFEback program and it had
cancelled the shares repurchased under the first phase of the
program. Repurchases under the second phase of the program
resumed on 2 JanuaryyFE 2023. yFor more information on the share
buyyFEback program, refer to the Shareholder distribution section in
this report.
After December 2022
On 25 JanuaryyFE 2023, Nokia announced it had appointed yEsa
Niinimäki as Chief Legal Officer and member of the Group
Leadership Team. Niinimäki has worked at Nokia for more than 15
yyFEears where he has held multiple positions, most recentlyyFE Interim
Chief Legal Officer.
Shares
The total number of Nokia shares on 31 December 2022, equaled
5 632 297 576. On 31 December 2022, Nokia and its subsidiaryyFE
companies held 45 281 539 Nokia shares, representing
approximatelyyFE 0.8% of the total number of Nokia shares and voting
rights.
Risk
yFactors
Nokia and its businesses are exposed to a number of risks and
uncertainties which include but are not limited
to:
▪
Competitive intensityyFE, which is expected to continue at a high
level;
▪
Our abilityyFE to ensure competitiveness of our product roadmaps
and costs through additional R&D investments;
▪
Our abilityyFE to procure certain standard components and the costs
thereof, such as semiconductors;
▪
Disturbance in the global supplyyFE chain;
▪
Accelerating inflation, increased global macro-uncertaintyyFE, major
currencyyFE fluctuations and higher interest rates;
▪
Scope and duration of the COVID-19 pandemic, and its economic
impact;
▪
War or other geopolitical conflicts, disruptions and potential costs
thereof;
▪
Other macroeconomic, industryyFE and competitive developments;
▪
Timing and value of new, renewed and existing patent licensing
agreements
with smartphone vendors, automotive companies,
consumer electronics companies and other licensees;
▪
Results in brand and technologyyFE
licensing
; costs to protect and
enforce our intellectual propertyyFE rights; on-going litigation with
respect to licensing and regulatoryyFE landscape for patent licensing;
▪
T
he outcomes of on
-going and potential disputes and litigation;
▪
Timing of completions and acceptances of certain projects;
▪
Our product and regional mix;
▪
UncertaintyyFE in forecasting income tax expenses and cash
outflows, over the long-term, as theyyFE are also subject to possible
changes due to business mix, the timing of patent licensing cash
flow and changes in tax legislation, including potential tax reforms
in various countries and OyECD initiatives;
▪
Our abilityyFE to utilize our US and yFinnish deferred tax assets and
their recognition on our balance sheet;
▪
Our abilityyFE to meet our sustainabilityyFE and other yESG targets,
including our targets relating to greenhouse gas emissions; as
well the risk factors specified under yForward-looking statements
of this report, and our 2021 annual report on yForm 20-yF
published on 3 March 2022 under Operating and financial review
and prospects-Risk factors.
yForward-looking statements
Certain statements herein that are not historical facts are forward-
looking statements. These forward-looking statements reflect
Nokia's current expectations and views of future developments and
include statements regarding: A) expectations, plans, benefits or
outlook related to our strategies, product launches, growth
management, sustainabilityyFE and other yESG targets, operational keyyFE
performance indicators and decisions on market exits; B)
expectations, plans or benefits related to future performance of
our businesses (including the expected impact, timing and duration
of COVID-19 and the general macroeconomic conditions on our
businesses, our supplyyFE chain and our customers’ businesses) and
anyyFE future dividends and other distributions of profit; C)
expectations and targets regarding financial performance and
results of operations, including market share, prices, net sales,
income
, margins,
cash
flows
, the timing of receivables, operating
expenses, provisions, impairments, taxes, currencyyFE exchange rates,
hedging, investment funds, inflation, product cost reductions,
competitiveness, revenue generation in anyyFE specific
region, and licensing income and
payyFEments
; D) abilityyFE to execute,
expectations, plans or benefits related to changes in organizational
structure and operating model; yE) impact on revenue with respect
to litigation/renewal discussions; and yF) anyyFE statements preceded
byyFE or including "continue", “believe”, “commit”, “estimate”, “expect”,
“aim”, “influence”, "will” or similar expressions. These forward-
looking statements are subject to a number of risks and
uncertainties, manyyFE of which are beyyFEond our control, which could
cause our actual results to differ materiallyyFE from such statements.
These statements are based on management’s best assumptions
and beliefs in light of the information currentlyyFE available to them.
These forward-looking statements are onlyyFE predictions based upon
our current expectations and views of future events and
developments and are subject to risks and uncertainties that are
difficult to predict because theyyFE relate to events and depend on
circumstances that will occur in the future. yFactors, including risks
and uncertainties that could cause these differences, include those
risks a
nd uncertainties identified in the Risk yFactors above.
26 JanuaryyFE 2023
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| yFinancial statement information
Consolidated income statement (condensed)
yEUR million
Reported
Comparable
Q4'22
Q4'21
Q1-Q4'22
Q1-Q4'21
Q4'22
Q4'21
Q1-Q4'22
Q1-Q4'21
Net sales (Notes 2, 3)
7 449
6 414
24 911
22 202
7 449
6 414
24 911
22 202
Cost of sales
(4 262)
(3 880)
(14 689)
(13 368)
(4 212)
(3 843)
(14 589)
(13 237)
Gross profit (Note 2)
3 187
2 534
10 222
8 834
3 237
2 571
10 322
8 965
Research and development expenses
(1 222)
(1 118)
(4 550)
(4 214)
(1 189)
(1 092)
(4 449)
(4 084)
Selling, general and administrative expenses
(838)
(758)
(3 013)
(2 792)
(727)
(659)
(2 604)
(2 379)
Other operating income and expenses
(244)
82
(341)
330
(168)
88
(160)
273
Operating profit (Note 2)
882
740
2 318
2 158
1 154
908
3 109
2 775
Share of results of associated companies and joint ventures
26
21
(26)
9
39
21
(13)
9
yFinancial income and expenses
(30)
(68)
(108)
(241)
1
(38)
(38)
(176)
Profit before tax
878
693
2 184
1 926
1 194
891
3 058
2 609
Income tax benefit/(expense) (Note 5)
2 272
(11)
2 026
(272)
(265)
(159)
(577)
(500)
Profit from continuing operations
3 150
682
4 210
1 654
929
731
2 481
2 109
Profit/(loss) from discontinued operations
2
(1)
49
(9)
—
—
—
—
Profit for the period
3 152
680
4 259
1 645
929
731
2 481
2 109
Attributable to
yEquityyFE holders of the parent
3 154
676
4 250
1 623
931
727
2 472
2 087
Non-controlling interests
(2)
4
9
22
(2)
4
9
22
yEarnings per share, yEUR
(for profit attributable to equityyFE holders of the parent)
Basic
Continuing operations
0.56
0.12
0.75
0.29
0.17
0.13
0.44
0.37
Profit for the period
0.56
0.12
0.76
0.29
0.17
0.13
0.44
0.37
Diluted
Continuing operations
0.56
0.12
0.74
0.29
0.16
0.13
0.44
0.37
Profit for the period
0.56
0.12
0.75
0.29
0.16
0.13
0.44
0.37
Average number of shares ('000 shares)
Basic
Continuing operations
5 590 250
5 634 946
5 614 182
5 630 025
5 590 250
5 634 946
5 614 182
5 630 025
Profit for the period
5 590 250
5 634 946
5 614 182
5 630 025
5 590 250
5 634 946
5 614 182
5 630 025
Diluted
Continuing operations
5 651 112
5 713 089
5 670 020
5 684 235
5 651 112
5 713 089
5 670 020
5 684 235
Profit for the period
5 651 112
5 713 089
5 670 020
5 684 235
5 651 112
5 713 089
5 670 020
5 684 235
The above condensed consolidated income statement should be read in conjunction with accompanyyFEing notes.
26 JanuaryyFE 2023
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| Consolidated statement of comprehensive income (condensed)
yEUR million
Reported
Q4'22
Q4'21
Q1-Q4'22
Q1-Q4'21
Profit for the period
3 152
680
4 259
1 645
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
(377)
98
(424)
3 040
Income tax related to items that will not be reclassified to profit or loss
99
(22)
77
(755)
Items that mayyFE be reclassified subsequentlyyFE to profit or loss
Translation differences
(1 481)
374
710
1 153
Net investment hedges
349
(95)
(127)
(249)
Cash flow and other hedges
71
10
83
—
yFinancial assets at fair value through other comprehensive income
(15)
(2)
(46)
7
Other changes, net
—
(1)
(3)
—
Income tax related to items that mayyFE be reclassified subsequentlyyFE to profit or loss
(22)
1
(21)
2
Other comprehensive (loss)/income, net of tax
(1 376)
363
249
3 198
Total comprehensive income for the period
1 776
1 043
4 508
4 843
Attributable to:
yEquityyFE holders of the parent
1 782
1 037
4 500
4 814
Non-controlling interests
(6)
6
8
29
The above condensed consolidated statement of comprehensive income should be read in conjunction with accompanyyFEing notes.
26 JanuaryyFE 2023
15
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| Consolidated statement of financial position (condensed)
yEUR million
31 December 2022
31 December 2021
ASSyETS
Goodwill
5 667
5 431
Other intangible assets
1 263
1 620
PropertyyFE, plant and equipment
2 015
1 924
Right-of-use assets
929
884
Investments in associated companies and joint ventures
199
243
Other non-current financial investments (Note 6)
828
758
Deferred tax assets (Note 5)
3 834
1 272
Other non-current financial assets (Note 6)
252
325
Defined benefit pension assets (Note 4)
6 754
7 740
Other non-current receivables
239
255
Non-current interest-bearing financial investments (Note 6)
697
—
Non-current assets
22 677
20 452
Inventories
3 265
2 392
Trade receivables (Note 6)
5 549
5 382
Contract assets
1 203
1 146
Other current receivables
934
859
Current income tax assets
153
214
Other current financial and firm commitment assets (Note 6)
615
336
Current interest-bearing financial investments (Note 6)
3 080
2 577
Cash and cash equivalents (Note 6)
5 467
6 691
Current assets
20 266
19 597
Total assets
42 943
40 049
SHARyEHOLDyERS' yEQUITY AND LIABILITIyES
Share capital
246
246
Share issue premium
503
454
TreasuryyFE shares
(352)
(352)
Translation differences
169
(396)
yFair value and other reserves
3 905
4 219
Reserve for invested unrestricted equityy
15 487
15 726
Retained earnings/(accumulated deficit)
1 375
(2 537)
Total capital and reserves attributable to equityyFE holders of the parent
21 333
17 360
Non-controlling interests
93
102
Total equityy
21 426
17 462
Long-term interest-bearing liabilities (Notes 6, 8)
4 249
4 537
Long-term lease liabilities
858
824
Deferred tax liabilities
332
282
Defined benefit pension and post-employyFEment liabilities (Note 4)
2 459
3 408
Contract liabilities
120
354
Deferred revenue and other non-current liabilities
103
436
Provisions (Note 7)
622
645
Non-current liabilities
8 743
10 486
Short-term interest-bearing liabilities (Notes 6, 8)
228
116
Short-term lease liabilities
184
185
Other financial and firm commitment liabilities (Note 6)
1 038
762
Current income tax liabilities
185
202
Trade payyFEables (Note 6)
4 730
3 679
Contract liabilities
1 977
2 293
Deferred revenue and other current liabilities (Note 6)
3 619
3 940
Provisions (Note 7)
813
924
Current liabilities
12 774
12 101
Total shareholders' equityyFE and liabilities
42 943
40 049
Shareholders' equityyFE per share, yEUR
3.82
3.08
Number of shares (1 000 shares, excluding treasuryyFE shares)
5 587 016
5 634 994
The above condensed consolidated statement of financial position should be read in conjunction with accompanyyFEing notes.
26 JanuaryyFE 2023
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| Consolidated statement of cash flows (condensed)
yEUR million
Q4'22
Q4'21
Q1-Q4'22
Q1-Q4'21
Cash flow from operating activities
Profit for the period
3 152
680
4 259
1 645
Adjustments
(1 709)
321
(446)
1 713
Depreciation and amortization
297
277
1 140
1 095
Restructuring charges
53
14
125
183
yFinancial income and expenses
(34)
69
28
240
Income tax (benefit)/expense
(2 271)
12
(2 030)
273
Loss/(gain) from other non-current financial investments
88
(53)
(27)
(188)
Impairment charges
139
15
152
40
Other
19
(13)
166
70
Cash flows from operations before changes in net working capital
1 443
1 001
3 813
3 358
Change in net working capital
(767)
(373)
(1 843)
(268)
(Increase)/decrease in receivables
(577)
(718)
(451)
239
(Increase)/decrease in inventories
(57)
132
(991)
(48)
(Decrease)/increase in non-interest-bearing liabilities
(133)
213
(401)
(459)
Cash flows from operations
676
628
1 970
3 090
Interest received
19
6
65
41
Interest paid
(36)
(42)
(180)
(192)
Income taxes paid, net
(92)
(107)
(381)
(314)
Net cash flows from operating activities
567
485
1 474
2 625
Cash flow from investing activities
Purchase of propertyyFE, plant and equipment and intangible assets
(195)
(159)
(601)
(560)
Proceeds from sale of propertyyFE, plant and equipment and intangible assets
—
47
33
103
Acquisition of businesses, net of cash acquired
—
—
(20)
(33)
Purchase of interest-bearing financial investments
(1 004)
(251)
(3 595)
(1 845)
Proceeds from maturities and sale of interest-bearing financial investments
1 260
148
2 397
398
Purchase of other non-current financial investments
(13)
(22)
(115)
(77)
Proceeds from sale of other non-current financial investments
5
34
49
277
yForeign exchange hedging of cash and cash equivalents
13
(39)
(38)
(77)
Other
2
10
10
19
Net cash flows from/(used in) investing activities
68
(232)
(1 880)
(1 795)
Cash flow from financing activities
Acquisition of treasuryyFE shares
(66)
—
(300)
—
Proceeds from long-term borrowings
—
—
8
17
RepayyFEment of long-term borrowings
(1)
(445)
(2)
(927)
(RepayyFEment of)/proceeds from short-term borrowings
(5)
(4)
27
(67)
PayyFEment of principal portion of lease liabilities
(47)
(56)
(217)
(226)
Dividends paid
(124)
(5)
(353)
(9)
Net cash flows used in financing activities
(243)
(510)
(837)
(1 212)
Translation differences
(121)
45
19
133
Net increase/(decrease) in cash and cash equivalents
271
(212)
(1 224)
(249)
Cash and cash equivalents at beginning of period
5 196
6 903
6 691
6 940
Cash and cash equivalents at end of period
5 467
6 691
5 467
6 691
Consolidated statement of cash flows combines cash flows from both the continuing and the discontinued operations. In Q4'22, net cash from operating
activities include cash outflows of yEUR 1 million related to Nokia’s discontinued operations. In Q1-Q4'22, net cash from operating activities and net cash
used in investing activities include cash inflows of yEUR 26 million and yEUR 29 million, respectivelyyFE, related to discontinued operations. Cash flows related to
discontinued operations were nil in Q4'21 and Q1-Q4'21. The figures in the consolidated statement of cash flows cannot be directlyyFE traced from the
statement of financial position without additional information as a result of acquisitions and disposals of subsidiaries and net foreign exchange differences
arising on consolidation.
The above condensed consolidated statement of cash flows should be read in conjunction with accompanyyFEing notes.
26 JanuaryyFE 2023
17
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|
Consolidated statement of changes in shareholders' equityyF (condensed)
yEUR million
Share
capital
Share issue
premium
TreasuryyFE
shares
Translation
differences
yFair value
and other
reserves
Reserve for
invested
unrestricted
equityy
Retained
earnings/
(accumulated
deficit)
Attributable
to equityyFE
holders of
the parent
Non-
controlling
interests
Total
equityy
1 JanuaryyFE 2021
246
443
(352)
(1 295)
1 910
15 656
(4 143)
12 465
80
12 545
Profit for the period
—
—
—
—
—
—
1 623
1 623
22
1 645
Other comprehensive income
—
—
—
899
2 309
—
(17)
3 191
7
3 198
Total comprehensive income
—
—
—
899
2 309
—
1 606
4 814
29
4 843
Share-based payyFEments
—
108
—
—
—
—
—
108
—
108
Settlement of share-based
payyFEments
—
(97)
—
—
—
70
—
(27)
—
(27)
Dividend
—
—
—
—
—
—
—
—
(7)
(7)
Total transactions with owners
—
11
—
—
—
70
—
81
(7)
74
31 December 2021
246
454
(352)
(396)
4 219
15 726
(2 537)
17 360
102
17 462
1 JanuaryyFE 2022
246
454
(352)
(396)
4 219
15 726
(2 537)
17 360
102
17 462
Profit for the period
—
—
—
—
—
—
4 250
4 250
9
4 259
Other comprehensive income
—
—
—
565
(314)
—
(1)
250
(1)
249
Total comprehensive income
—
—
—
565
(314)
—
4 249
4 500
8
4 508
Share-based payyFEments
—
149
—
—
—
—
—
149
—
149
Settlement of share-based
payyFEments
—
(100)
—
—
—
73
—
(27)
—
(27)
Acquisition of treasuryyFE shares
1
—
—
(300)
—
—
(12)
—
(312)
—
(312)
Cancellation of treasuryyFE shares
1
—
—
300
—
—
(300)
—
—
—
—
Dividend
—
—
—
—
—
—
(337)
(337)
(17)
(354)
Total transactions with owners
—
49
—
—
—
(239)
(337)
(527)
(17)
(544)
31 December 2022
246
503
(352)
169
3 905
15 487
1 375
21 333
93
21 426
1
TreasuryyFE shares are acquired as part of the share buyyFEback program announced on 3 yFebruaryyFE 2022. Shares are repurchased using funds in the reserve for invested unrestricted
equityyFE. The repurchased shares were cancelled on 8 December 2022.
The above condensed consolidated statement of changes in shareholders' equityyFE should be read in conjunction with accompanyyFEing notes.
26 JanuaryyFE 2023
18
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| Notes to yFinancial statements
1. BASIS OyF PRyEPARATION
This unaudited and condensed consolidated financial statement information of Nokia has been prepared in accordance with IAS 34, Interim yFinancial
Reporting, and it should be read in conjunction with the consolidated financial statements for 2021 prepared in accordance with IyFRS as published byyFE the
IASB and adopted byyFE the yEU. The same accounting policies, methods of computation and applications of judgment are followed in this financial statement
information as was followed in the consolidated financial statements for 2021. Percentages and figures presented herein mayyFE include rounding differences
and therefore mayyFE not add up preciselyyFE to the totals presented and mayyFE varyyFE from previouslyyFE published financial information. This financial report was
authorized for issue byyFE the Board of Directors on 26 JanuaryyFE 2023.
Net sales and operating profit of the Nokia Group, particularlyyFE in Network Infrastructure, Mobile Networks and Cloud and Network Services segments, are
subject to seasonal fluctuations being generallyyFE highest in the fourth quarter and lowest in the first quarter of the yyFEear. This is mainlyyFE due to the seasonalityyFE
in the spending cyyFEcles of communications service providers.
Management has identified regions as the relevant categoryyFE to present disaggregated revenue. Nokia's primaryyFE customer base consists of companies that
operate on a countryyFE specific or a regional basis and are subject to macroeconomic conditions specific to those regions. yFurther, although Nokia’s
technologyyFE cyyFEcle is similar around the world, each countryyFE or region is inherentlyyFE in a different stage of that cyyFEcle, often influenced byyFE macroeconomic
conditions. yEach reportable segment, as described in Note 2, Segment information, operates in everyyFE region as described in Note 3, Net sales. No reportable
segment has a specific revenue concentration in anyyFE region other than Nokia Technologies, which is included in yEurope. yEach tyyFEpe of customer, as disclosed
in Note 3, Net sales, operates in all regions.
In 2017, Nokia and China Huaxin Post & Telecommunication yEconomyyFE Development Center (China Huaxin) commenced operations of the joint venture Nokia
Shanghai Bell (NSB). China Huaxin obtained the right to fullyyFE transfer its ownership interest in NSB to Nokia in exchange for a future cash settlement. To
reflect this obligation, Nokia derecognized the non-controlling interest and records a financial liabilityyFE in current liabilities in line with the option exercise
period. AnyyFE changes in the estimated future cash settlement are recorded in financial income and expense.
Nokia announced on 12 April 2022 its intention to exit the Russian market. Nokia will aim to provide the necessaryyFE support to maintain the networks alreadyyFE
present as we exit the market. Nokia sees this as the most responsible course of action to take. Nokia recognized a provision of yEUR 104 million in Q1 2022
related to Russia.
Comparable and constant currencyyF measures
Nokia presents financial information on a reported, comparable and constant currencyyFE basis. Comparable measures presented in this document exclude
intangible asset amortization and other purchase price fair value adjustments, goodwill impairments, restructuring related charges and certain other items
affecting comparabilityyFE. In order to allow full visibilityyFE on determining comparable results, information on items affecting comparabilityyFE is presented
separatelyyFE for each of the components of profit or loss.
Constant currencyyFE reporting provides additional information on change in financial measures on a constant currencyyFE basis in order to better reflect the
underlyyFEing business performance. Therefore, change in financial measures at constant currencyyFE excludes the impact of changes in exchange rates in
comparison to euro, our reporting currencyyFE.
As comparable or constant currencyyFE financial measures are not defined in IyFRS theyyFE mayyFE not be directlyyFE comparable with similarlyyFE titled measures used byyFE
other companies, including those in the same industryyFE. The primaryyFE rationale for presenting these measures is that the management uses these measures in
assessing the financial performance of Nokia and believes that these measures provide meaningful supplemental information on the underlyyFEing business
performance of Nokia. These financial measures should not be considered in isolation from, or as a substitute for, financial information presented in
compliance with IyFRS. yFor further details on performance measures used byyFE Nokia and reconciliations to the closest IyFRS-defined measures, refer to the
Performance measures section accompanyyFEing this consolidated financial statement information.
yForeign exchange rates
Nokia’s net sales are derived from various countries and invoiced in various currencies. Therefore, our business and results from operations are exposed to
changes in foreign exchange rates between the euro, our reporting currencyyFE, and other currencies, such as the US dollar and the Chinese yyFEuan. To mitigate
the impact of changes in exchange rates on our results, we hedge operative forecasted net foreign exchange exposures, tyyFEpicallyyFE within a 12-month horizon,
and applyyFE hedge accounting in the majorityyFE of cases.
The below table shows the exposure to different currencies for net sales and total costs.
Q4'22
Q4'21
Q3'22
Net sales
Total costs
Net sales
Total costs
Net sales
Total costs
yEUR
~25%
~25%
~25%
~25%
~20%
~25%
USD
~50%
~50%
~50%
~50%
~55%
~50%
CNY
~5%
~5%
~5%
~5%
~5%
~5%
Other
~20%
~20%
~20%
~20%
~20%
~20%
Total
~100%
~100%
~100%
~100%
~100%
~100%
yEnd of Q4'22 balance sheet rate 1 yEUR = 1.07 USD, end of Q4'21 balance sheet rate 1 yEUR = 1.13 USD and end of Q3'22 balance sheet rate 1 yEUR = 0.97 USD
New and amended standards and interpretations
The amendments to IyFRS standards that became effective on 1 JanuaryyFE 2022, did not have a material impact on Nokia's consolidated financial statements.
New standards and amendments to existing standards issued byyFE the IASB that are not yyFEet effective are not expected to have a material impact on Nokia's
consolidated financial statements when adopted.
26 JanuaryyFE 2023
19
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| 2. SyEGMyENT INyFORMATION
Nokia has four operating and reportable segments for the financial reporting purposes: (1) Network Infrastructure, (2) Mobile Networks, (3) Cloud and Network
Services and (4) Nokia Technologies. Nokia also presents segment-level information for Group Common and Other. In addition, Nokia provides net sales
disclosure for the following businesses within the Network Infrastructure segment: (i) IP Networks, (ii) Optical Networks, (iii) yFixed Networks and (iv) Submarine
Networks. yFor detailed segment descriptions, please refer to Note 5, Segment Information, in the consolidated financial statements for 2021.
Accounting policies of the segments are the same as those described in Note 2, Significant accounting policies, in the consolidated financial statements for
2021, except that items affecting comparabilityyFE are not allocated to the segments. yFor more information on comparable measures and items affecting
comparabilityyFE, refer to Note 1, Basis of preparation and to the Performance Measures section accompanyyFEing this consolidated financial statement
information. Inter-segment revenues and transfers are accounted for as if the revenues were to third parties, that is, at current market prices.
Q4'22
Network
Infrastructure
1
Mobile
Networks
Cloud and
Network
Services
Nokia
Technologies
Group Common
and Other
yEliminations and
unallocated
items
Nokia Group
yEUR million
Net sales
2 709
2 960
1 060
679
59
(18)
7 449
of which to other segments
1
7
—
3
6
(18)
—
Gross profit/(loss)
1 074
1 028
464
678
(6)
(51)
3 187
Gross margin %
39.6%
34.7%
43.8%
99.9%
(10.2) %
42.8%
Research and development expenses
(365)
(585)
(148)
(56)
(35)
(33)
(1 222)
Selling, general and administrative expenses
(235)
(238)
(149)
(36)
(69)
(112)
(838)
Other operating income and expenses
(43)
(4)
(19)
(22)
(80)
(76)
(244)
Operating profit/(loss)
431
201
147
564
(189)
(272)
882
Operating margin %
15.9%
6.8%
13.9%
83.1%
(320.3) %
11.8%
Share of results of associated companies and
joint ventures
—
42
2
(5)
—
(13)
26
yFinancial income and expenses
(30)
Profit before tax
878
Depreciation and amortization
(62)
(88)
(24)
(9)
(7)
(107)
(297)
¹
Includes IP Networks net sales of yEUR
896
million, Optical Networks net sales of yEUR
639
million, yFixed Networks net sales of yEUR
855
million and Submarine Networks net sales
of yEUR
319
million.
Q4'21
Network
Infrastructure
1
Mobile
Networks
Cloud and
Network
Services
Nokia
Technologies
Group Common
and Other
yEliminations and
unallocated
items
Nokia Group
yEUR million
Net sales
2 254
2 761
964
368
74
(7)
6 414
of which to other segments
—
2
—
3
3
(7)
—
Gross profit/(loss)
767
1 037
403
367
(3)
(37)
2 534
Gross margin %
34.0%
37.6%
41.8%
99.7%
(4.1) %
39.5%
Research and development expenses
(317)
(561)
(134)
(54)
(26)
(26)
(1 118)
Selling, general and administrative expenses
(217)
(223)
(126)
(27)
(66)
(98)
(758)
Other operating income and expenses
16
17
2
(4)
57
(6)
82
Operating profit/(loss)
248
270
145
282
(38)
(168)
740
Operating margin %
11.0%
9.8%
15.0%
76.6%
(51.4) %
11.5%
Share of results of associated companies and
joint ventures
—
18
3
—
—
—
21
yFinancial income and expenses
(68)
Profit before tax
—
—
—
693
Depreciation and amortization
(53)
(87)
(23)
(8)
(6)
(99)
(277)
¹
Includes IP Networks net sales of yEUR
755
million, Optical Networks net sales of yEUR
506
million, yFixed Networks net sales of yEUR
747
million and Submarine Networks net sales
of yEUR
246
million.
26 JanuaryyFE 2023
20
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| Q1-Q4'22
Network
Infrastructure
1
Mobile
Networks
Cloud and
Network
Services
Nokia
Technologies
Group Common
and Other
yEliminations and
unallocated
items
Nokia Group
yEUR million
Net sales
9 047
10 671
3 351
1 595
295
(48)
24 911
of which to other segments
3
13
1
12
19
(48)
—
Gross profit/(loss)
3 308
4 096
1 340
1 590
(12)
(100)
10 222
Gross margin %
36.6%
38.4%
40.0%
99.7%
(4.1) %
41.0%
Research and development expenses
(1 307)
(2 234)
(577)
(214)
(117)
(101)
(4 550)
Selling, general and administrative expenses
(833)
(865)
(544)
(136)
(226)
(409)
(3 013)
Other operating income and expenses
(66)
(57)
(42)
(32)
37
(181)
(341)
Operating profit/(loss)
1 102
940
177
1 208
(318)
(791)
2 318
Operating margin %
12.2%
8.8%
5.3%
75.7%
(107.8) %
9.3%
Share of results of associated companies and
joint ventures
—
(11)
6
(8)
—
(13)
(26)
yFinancial income and expenses
(108)
Profit before tax
2 184
Depreciation and amortization
(229)
(347)
(91)
(34)
(28)
(411)
(1 140)
¹
Includes IP Networks net sales of yEUR
3 063
million, Optical Networks net sales of yEUR
1 891
million, yFixed Networks net sales of yEUR
2 943
million and Submarine Networks net
sales of yEUR
1 150
million.
Q1-Q4'21
Network
Infrastructure
1
Mobile
Networks
Cloud and
Network
Services
Nokia
Technologies
Group Common
and Other
yEliminations and
unallocated
items
Nokia Group
yEUR million
Net sales
7 674
9 717
3 089
1 502
257
(37)
22 202
of which to other segments
2
7
1
12
17
(37)
—
Gross profit/(loss)
2 684
3 637
1 160
1 497
(13)
(131)
8 834
Gross margin %
35.0%
37.4%
37.6%
99.7%
(5.1) %
39.8%
Research and development expenses
(1 165)
(2 078)
(537)
(201)
(104)
(130)
(4 214)
Selling, general and administrative expenses
(765)
(832)
(477)
(92)
(213)
(413)
(2 792)
Other operating income and expenses
30
37
20
(18)
205
56
330
Operating profit/(loss)
784
765
166
1 185
(125)
(617)
2 158
Operating margin %
10.2%
7.9%
5.4 %
78.9 %
(48.6) %
9.7%
Share of results of associated companies and
joint ventures
(1)
6
6
(2)
—
—
9
yFinancial income and expenses
(241)
Profit before tax
1 926
Depreciation and amortization
(208)
(338)
(95)
(33)
(30)
(392)
(1 095)
¹
Includes IP Networks net sales of yEUR
2 679
million, Optical Networks net sales of yEUR
1 708
million, yFixed Networks net sales of yEUR
2 358
million and Submarine Networks net
sales of yEUR
929
million.
Material reconciling items between total segment operating profit and operating profit for the
Group
yEUR million
Q4'22
Q4'21
Q1-Q4'22
Q1-Q4'21
Operating profit for the Group
882
740
2 318
2 158
Amortization of acquired intangible assets
106
99
411
391
Impairment and write-off of assets, net of reversals
84
13
97
45
Restructuring and associated charges
80
52
177
263
Costs associated with countryyFE exit
(6)
—
98
—
Gain on sale of fixed assets
—
(30)
—
(53)
Settlement of legal disputes
—
—
—
(80)
Other, net
7
34
8
51
Total Segment Operating profit
1 154
908
3 109
2 775
26 JanuaryyFE 2023
21
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| 3. NyET SALyES
Net sales byyF region
1
yEUR million
Q4'22
Q4'21
YoY change
Q1-Q4'22
Q1-Q4'21
YoY change
Asia Pacific
801
684
17%
2 648
2 472
7%
yEurope
2 351
1 836
28%
6 662
6 313
6%
Greater China
356
393
(9) %
1 581
1 512
5%
India
568
248
129%
1 290
1 035
25%
Latin America
387
325
19%
1 223
983
24%
Middle yEast & Africa
595
554
7%
1 969
1 771
11%
North America
2 070
2 128
(3) %
8 388
7 187
17%
Submarine Networks
319
246
30%
1 150
929
24%
Total
7 449
6 414
16%
24 911
22 202
12%
1
In Q2 2022, Nokia changed how it presents net sales information on a regional basis. Nokia determined that providing net sales of its Submarine Networks business separatelyyFE from
the net sales byyFE region information for the rest of the Group improves the usefulness of regional net sales information byyFE removing volatilityyFE caused byyFE the specific nature of the
Submarine Networks business. The comparative information for net sales byyFE region has been recast accordinglyyFE.
Net sales byyF customer tyyFpe
yEUR million
Q4'22
Q4'21
YoY change
Q1-Q4'22
Q1-Q4'21
YoY change
Communications service providers (CSP)
5 640
5 238
8%
19 911
17 977
11%
yEnterprise
769
495
55%
2 007
1 575
27%
Licensees
679
368
84%
1 595
1 502
6%
Other
1
361
312
16%
1 398
1 148
22%
Total
7 449
6 414
16%
24 911
22 202
12%
1
Includes net sales of Submarine Networks which operates in a different market, and Radio yFrequencyyFE SyyFEstems (RyFS), which is being managed as a separate entityyFE, and certain other
items, such as eliminations of inter-segment revenues. Submarine Networks and RyFS net sales also include revenue from communications service providers and enterprise customers.
26 JanuaryyFE 2023
22
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| 4. PyENSIONS AND OTHyER POST-yEMPLOYMyENT ByENyEyFITS
Nokia operates a number of post-employyFEment plans in various countries including both defined contribution and defined benefit plans. Defined benefit
plans include pension plans and other post-employyFEment benefit plans, providing retirement healthcare benefits and life insurance coverage. Nokia
remeasures all pension and post-employyFEment plan assets and obligations annuallyyFE, as of 31 December, through valuations performed byyFE external actuaries.
As of
31 December 2022
, the weighted average discount rates used in remeasurement of the most significant plans were as follows (comparatives as of
31
December 2021
): U.S. Pension 4.86% (2.40%), U.S. Opeb 4.87% (2.42%), GermanyyFE 3.70% (0.87%) and U.K. 4.76% (1.87%).
The funded status of Nokia’s defined benefit plans (before the effect of the asset ceiling) decreased from yEUR 5 159 million, or 126.4%, as of
30 September
2022
to yEUR 4 379 million, or 123.9%, as of
31 December 2022
. During the quarter the global defined benefit plan asset portfolio was invested approximatelyyFE
71% in fixed income, 5% in equities and 24% in other asset classes, mainlyyFE private equityyFE and real estate.
Changes in pension and post-employyFment net asset/(liabilityyF)
31 December 2022
31 December 2021
yEUR million
Pensions
1
US Opeb
Total
Pensions
1
US Opeb
Total
Net asset/(liabilityyFE) recognized 1
JanuaryyFE
5 588
(1 256)
4 332
2 572
(1 580)
992
Recognized in income statement
(69)
(32)
(101)
(128)
(29)
(157)
Recognized in other comprehensive
income
(694)
270
(424)
2 906
134
3 040
Contributions and benefits paid
177
9
186
177
(6)
171
yExchange differences and other
movements
2
271
31
302
61
225
286
Net asset/(liabilityyFE) recognized at the
end of the period
5 273
(978)
4 295
5 588
(1 256)
4 332
1
Includes pensions, retirement indemnities and other post-employyFEment plans.
2
Includes Section 420 transfers, medicare subsidies, and other transfers.
yFunded status
yEUR million
31 December
2022
30 September
2022
30 June
2022
31 March
2022
31 December
2021
Defined benefit obligation
(18 312)
(19 522)
(20 029)
(21 120)
(22 704)
yFair value of plan assets
22 691
24 681
25 127
25 921
27 128
yFunded status
4 379
5 159
5 098
4 801
4 424
yEffect of asset ceiling
(84)
(121)
(104)
(89)
(92)
Net asset recognized at the end of the
period
4 295
5 038
4 994
4 712
4 332
5. DyEyFyERRyED TAXyES
Deferred tax assets are recognized to the extent it is probable that future taxable profit will be available against which the unused tax losses, unused tax
credits and deductible temporaryyFE differences can be utilized in the relevant jurisdictions. As of
31 December 2022
, Nokia has recognized deferred tax assets
of yEUR 3.8 billion (yEUR 1.3 billion as of
31 December 2021
).
In addition, as of
31 December 2022
, Nokia has unrecognized deferred tax assets of
approximatelyyFE
yEUR 5 billion (yEUR 8 billion as of
31 December 2021
), the
majorityyFE of which relate to yFrance (approximatelyyFE yEUR 4 billion). These deferred tax assets have not been recognized due to uncertaintyyFE regarding their
utilization. A significant portion of the yFrench unrecognized deferred tax assets are indefinite in nature and available against future yFrench tax liabilities,
subject to a limitation of 50% of annual taxable profits.
Nokia continuallyyFE evaluates the probabilityyFE of utilizing its deferred tax assets and considers both positive and negative evidence in its assessment. At 31
December 2021, Nokia concluded based on its assessment that it was not probable that it
w
ould have been able
to utilize the unused tax losses, unused tax
credits and deductible temporaryyFE differences in yFinland. This conclusion was based on the weighting of objective negative evidence of cumulative taxable
losses against more subjective positive evidence. The primaryyFE factors in this weighting were the more objective record of a pattern of historical financial
performance compared to the more inherentlyyFE subjective expectations regarding future financial performance in yFinland.
In 2021 and 2022, Nokia generated accounting and taxable profit in yFinland and there were improvements in financial performance compared to preceding
periods. The changes arise from the underlyyFEing improvements in operating performance, including successful execution of new Nokia strategyyFE and improved
competitiveness in Mobile Networks. These improvements are expected to be sustained in the upcoming yyFEears, as well as over the longer term. In addition,
Nokia has determined that, in 2022, a pattern of material taxable profits was re-established in yFinland. Nokia's re-established pattern of profitabilityyFE together
with Nokia’s forecasts of future taxable profit in yFinland provide positive evidence about its abilityyFE to utilize the unused tax losses and deductible temporaryyFE
differences in yFinland. At 31 December 2022, Nokia concluded based on its assessment that it is probable that it will be able to utilize the unused tax losses
and deductible temporaryyFE differences and re-recognized deferred tax assets of yEUR 2.5 billion in the consolidated statement of financial position.
In performing this assessment, Nokia has not applied anyyFE cut-off period, other than expiryyFE under the relevant tax legislation. A significant portion of yFinnish
deferred tax assets are indefinite in nature and available fullyyFE against future yFinnish tax liabilities. Due to the non-expiryyFE of these assets, the sensitivityyFE of
future profit projections affects mainlyyFE the period of time over which the deferred tax assets are expected to be utilized.
26 JanuaryyFE 2023
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| 6. yFAIR VALUyE OyF yFINANCIAL INSTRUMyENTS
yFinancial assets and liabilities recorded at fair value are categorized based on the amount of unobservable inputs used to measure their fair value. Three
hierarchical levels are based on an increasing amount of judgment associated with the inputs used to derive fair valuation for these assets and liabilities,
Level 1 being market values for exchange traded products, Level 2 being primarilyyFE based publiclyyFE available market information and Level 3 requiring most
management judgment. yFor more information about the valuation methods and principles, refer to note 2, Significant accounting policies, and note 22, yFair
value of financial instruments, in the consolidated financial statements for
2021
. Items carried at fair value in the following table are measured at fair value on
a recurring basis.
yEUR million
CarryyFEing amounts
yFair value
Amortized cost
yFair value through profit or loss
yFair value through other
comprehensive income
31 December 2022
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Total
Total
Other non-current financial investments
—
5
—
823
—
—
—
828
828
Other non-current financial assets
183
—
91
—
—
27
—
301
301
Non-current interest-bearing financial investments
697
—
—
—
—
—
—
697
659
Other current financial assets
296
—
—
—
—
36
—
332
332
Derivative assets
—
—
239
—
—
—
—
239
239
Trade receivables
—
—
—
—
—
5 549
—
5 549
5 549
Current interest-bearing financial investments
1 447
—
1 633
—
—
—
—
3 080
3 080
Cash and cash equivalents
4 176
—
1 291
—
—
—
—
5 467
5 467
Total financial assets
6 799
5
3 254
823
—
5 612
—
16 493
16 455
Long-term interest-bearing liabilities
4 249
—
—
—
—
—
—
4 249
4 230
Other long-term financial liabilities
—
—
—
48
—
—
—
48
48
Short-term interest-bearing liabilities
228
—
—
—
—
—
—
228
228
Other short-term financial liabilities
75
—
—
502
—
—
—
577
577
Derivative liabilities
—
—
496
—
—
—
—
496
496
Discounts without performance obligations
539
—
—
—
—
—
—
539
539
Trade payyFEables
4 730
—
—
—
—
—
—
4 730
4 730
Total financial liabilities
9 821
—
496
550
—
—
—
10 867
10 848
yEUR million
CarryyFEing amounts
yFair value
Amortized cost
yFair value through profit or loss
yFair value through other
comprehensive income
31 December 2021
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Total
Total
Other non-current financial investments
—
8
—
750
—
—
—
758
758
Other non-current financial assets
130
—
101
—
—
94
—
325
325
Other current financial assets
115
—
—
—
—
21
—
136
136
Derivative assets
—
—
200
—
—
—
—
200
200
Trade receivables
—
—
—
—
—
5 382
—
5 382
5 382
Current interest-bearing financial investments
526
—
2 051
—
—
—
—
2 577
2 577
Cash and cash equivalents
4 627
—
2 064
—
—
—
—
6 691
6 691
Total financial assets
5 398
8
4 416
750
—
5 497
—
16 069
16 069
Long-term interest-bearing liabilities
4 537
—
—
—
—
—
—
4 537
4 775
Other long-term financial liabilities
—
—
—
68
—
—
—
68
68
Short-term interest-bearing liabilities
116
—
—
—
—
—
—
116
116
Other short-term financial liabilities
—
—
—
522
—
—
—
522
522
Derivative liabilities
—
—
240
—
—
—
—
240
240
Discounts without performance obligations
479
—
—
—
—
—
—
479
479
Trade payyFEables
3 679
—
—
—
—
—
—
3 679
3 679
Total financial liabilities
8 811
—
240
590
—
—
—
9 641
9 879
Lease liabilities are not included in the fair value of financial instruments.
Level 3 yFinancial assets include a large number of investments in unlisted equities and unlisted venture funds, including investments managed byyFE NGP
Capital specializing in growth-stage investing. The fair value of level 3 investments is determined using one or more valuation techniques with unobservable
inputs, where the use of the market approach generallyyFE consists of using comparable market transactions, while the use of the income approach generallyyFE
consists of calculating the net present value of expected future cash flows.
Level 3 yFinancial liabilities include a conditional obligation to China Huaxin related to Nokia Shanghai Bell.
26 JanuaryyFE 2023
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| Reconciliation of the opening and closing balances on level 3 financial assets and liabilities:
yEUR million
Level 3 yFinancial
Assets
Level 3 yFinancial
Liabilities
Balance as of 31 December 2021
750
(590)
Net gains in income statement
13
24
Additions
101
—
Deductions
(39)
20
Transfer out of level 3
(4)
—
Other movements
2
(4)
Balance as of 31 December 2022
823
(550)
The gains and losses from venture fund and similar investments categorized in level 3 are included in other operating income and expenses. The gains and
losses from other level 3 financial assets and liabilities are recorded in financial income and expenses. A net gain of yEUR 23 million (net gain of yEUR 85 million
in
2021
) related to level 3 financial instruments held at
31 December 2022
was included in the profit and loss during
2022
.
26 JanuaryyFE 2023
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| 7. PROVISIONS
yEUR million
Restructuring
Warrantyy
Litigation
yEnvironmental
Project
losses
Divestment-
related
Material
liabilityy
Other
1
Total
As of 1 JanuaryyFE 2022
312
254
102
149
235
46
89
382
1 569
Charged to income statement
Additions
125
156
54
7
26
5
121
158
652
Reversals
—
(57)
(10)
(2)
(2)
—
(64)
(34)
(169)
Total charged to income statement
125
99
44
5
24
5
57
124
483
Utilized during period
2
(245)
(132)
(49)
(7)
(52)
—
(33)
(101)
(619)
Translation differences and other
1
—
1
8
—
(9)
2
(1)
2
As of 31 December 2022
193
221
98
155
207
42
115
404
1 435
Non-current
63
20
17
136
138
37
12
199
622
Current
130
201
81
19
69
5
103
205
813
1
Other provisions include provisions for various obligations such as costs associated with exiting the Russian market, indirect tax provisions, employyFEee-related provisions other than
restructuring provisions and asset retirement obligations.
2
The utilization of restructuring provision includes items transferred to accrued expenses, of which yEUR 58 million remained in accrued expenses as of 31 December 2022.
8. INTyERyEST-ByEARING LIABILITIyES
CarryyFEing amount (yEUR million)
Issuer/borrower
Instrument
Currencyy
Nominal
(million)
yFinal maturityy
31 December
2022
31 December
2021
Nokia Corporation
2.00% Senior Notes
yEUR
750
March 2024
736
759
Nokia Corporation
yEIB R&D Loan
yEUR
500
yFebruaryyFE 2025
500
500
Nokia Corporation
NIB R&D Loan
1
yEUR
250
MayyFE 2025
250
250
Nokia Corporation
2.375% Senior Notes
yEUR
500
MayyFE 2025
478
497
Nokia Corporation
2.00% Senior Notes
yEUR
750
March 2026
716
760
Nokia Corporation
4.375% Senior Notes
USD
500
June 2027
436
464
Nokia of America Corporation
6.50% Senior Notes
USD
74
JanuaryyFE 2028
70
66
Nokia Corporation
3.125% Senior Notes
yEUR
500
MayyFE 2028
457
497
Nokia of America Corporation
6.45% Senior Notes
USD
206
March 2029
194
183
Nokia Corporation
6.625% Senior Notes
USD
500
MayyFE 2039
478
553
Nokia Corporation and various subsidiaries
Other liabilities
162
124
Total
4 477
4 653
1
The loan from the Nordic Investment Bank (NIB) is repayyFEable in three equal annual installments in 2023, 2024 and 2025.
Significant credit facilities and funding programs
Utilized (million)
yFinancing arrangement
Committed/
uncommitted
Currencyy
Nominal
(million)
31 December
2022
31 December
2021
Revolving Credit yFacilityy
1
Committed
yEUR
1 500
—
—
yFinnish Commercial Paper Programme
Uncommitted
yEUR
750
—
—
yEuro-Commercial Paper Programme
Uncommitted
yEUR
1 500
—
—
yEuro Medium Term Note Programme
2
Uncommitted
yEUR
5000
2 500
2 500
1
The facilityyFE has its maturityyFE in June 2026, except for yEUR 88 million having its maturityyFE in June 2024.
2
All euro-denominated bonds have been issued under the yEuro Medium Term Note Programme.
All borrowings and credit facilities presented in the tables above are senior unsecured and have no financial covenants
26 JanuaryyFE 2023
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| 9. COMMITMyENTS, CONTINGyENCIyES AND LyEGAL PROCyEyEDINGS
yEUR million
31 December 2022
31 December 2021
Contingent liabilities on behalf of Group companies
Guarantees issued byyFE financial institutions
Commercial guarantees
1 238
1 281
Non-commercial guarantees
538
442
Corporate guarantees
Commercial guarantees
504
457
Non-commercial guarantees
32
35
yFinancing commitments
Customer finance commitments
26
21
Venture fund commitments
1
433
137
1
In JanuaryyFE 2022, Nokia agreed on capital commitment of USD 400 million to NGP Capital’s yFund V. The fund’s emphasis on companies developing emerging 5G use
cases for industrial and business transformation aligns closelyyFE with Nokia’s technologyyFE leadership vision and its efforts to maximize the value shift towards cloud.
Per industryyFE standard practice, the capital will be called throughout the 10 yyFEear lifecyyFEcle of the fund.
The amounts in the table above represent the maximum principal amount of commitments and contingencies, and these amounts do not reflect
management's expected outcomes.
Litigations and proceedings
Significant changes to information about litigation and proceedings presented in Nokia's consolidated financial statements for 2021:
Continenta
l
In 2019, Continental Automotive SyyFEstems (Continental) brought breach of yFRAND and antitrust claims against Nokia and others. The antitrust claims were
dismissed with prejudice. In the third quarter of 2022, this decision became final after Continental lost on appeal and reconsideration requests. Continental
also brought breach of contract and yFRAND-related claims against Nokia in another US court in 2021, which Nokia has moved to dismiss. That motion is
pending.
Oppo
In 2021, Nokia commenced patent infringement proceedings against Oppo, OnePlus and Realme in several countries in Asia and yEurope. Across these
actions, more than 30 patents are in suit, covering a mix of cellular standards and technologies such as connectivityyFE, user interface and securityyFE. Oppo
responded byyFE filing invalidation actions against certain Nokia patents, a number of patent infringement actions against Nokia equipment in GermanyyFE, China,
and yFinland and actions in China against Nokia relating to standard essential patent licensing issues. Nokia has had multiple patents confirmed as valid and
infringed including in GermanyyFE, the Netherlands and the UK.
Vivo
In 2022, Nokia commenced patent infringement proceedings against Vivo in GermanyyFE and several countries in Asia. Vivo responded byyFE filing a number of
patent infringement actions against Nokia equipment in GermanyyFE and China. TheyyFE also filed an action in China against Nokia relating to standard essential
patent licensing issue
s.
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| Performance measur
es
Certain financial measures presented in this interim report are not measures of financial performance, financial position or cash flows defined in IyFRS, and
therefore mayyFE not be directlyyFE comparable with financial measures used byyFE other companies, including those in the same industryyFE. The primaryyFE rationale for
presenting these measures is that the management uses these measures in assessing the financial performance of Nokia and believes that these measures
provide meaningful supplemental information on the underlyyFEing business performance. These financial measures should not be considered in isolation from,
or as a substitute for, financial information presented in compliance with IyFRS.
The below tables provide summarized information on the performance measures included in this interim report as well as reconciliations of the performance
measures to the amounts presented in the financial statements.
In the first quarter of 2022 Nokia replaced its performance measures total cash and current financial investments (”total cash”) and net cash and current
financial investments (”net cash”) with total cash and interest-bearing financial investments (”total cash”) and net cash and interest-bearing financial
investments (”net cash”). The definitions of these performance measures were updated accordinglyyFE to reflect the changes made to Nokia’s statement of
financial position. The purpose for using these measures, as stated in the table below, did not change. The modifications to the performance measures were
made as in the first quarter of 2022 Nokia commenced investing in highlyyFE liquid corporate bonds that are primarilyyFE classified as non-current interest-bearing
financial investments based on their initial maturityyFE.
Performance measure
Definition
Purpose
Comparable measures
Comparable measures exclude intangible asset amortization and other
purchase price fair value adjustments, goodwill impairments,
restructuring related charges and certain other items affecting
comparabilityyFE. Reconciliation of reported and comparable consolidated
statement of income is presented below.
We believe that our comparable results provide meaningful
supplemental information to both management and investors regarding
Nokia’s underlyyFEing business performance byyFE excluding certain items of
income and expenses that mayyFE not be indicative of Nokia’s business
operating results. Comparable operating profit is used also in
determining management remuneration.
Constant currencyyFE net
sales / Net sales
adjusted for currencyyFE
fluctuations
When net sales are reported on a constant currencyyFE basis / adjusted for
currencyyFE fluctuations, exchange rates used to translate the amounts in
local currencies to euro, our reporting currencyyFE, are the average actual
periodic exchange rates for the comparative financial period. Therefore,
the constant currencyyFE net sales / net sales adjusted for currencyyFE
fluctuations exclude the impact of changes in exchange rates during the
current period in comparison to euro.
We provide additional information on net sales on a constant currencyyFE
basis / adjusted for currencyyFE fluctuations in order to better reflect the
underlyyFEing business performance.
Comparable return on
invested capital (ROIC)
Comparable operating profit after tax, last four quarters / Invested
capital, average of last five quarters’ ending balances. Calculation of
comparable return on invested capital is presented below.
Comparable return on invested capital is used to measure how efficientlyyFE
Nokia uses its capital to generate profits from its operations.
Comparable operating
profit after tax
Comparable operating profit - (comparable operating profit x (-
comparable income tax expense / comparable profit before tax))
Comparable operating profit after tax indicates the profitabilityyFE of
Nokia's underlyyFEing business operations after deducting the income tax
impact. We use comparable operating profit after tax to calculate
comparable return on invested capital.
Invested capital
Total equityyFE + total interest-bearing liabilities - total cash and interest-
bearing financial investments
Invested capital indicates the book value of capital raised from equityyFE
and debt instrument holders less cash and liquid assets held byyFE Nokia.
We use invested capital to calculate comparable return on invested
capital.
Total cash and
interest-bearing
financial investments
("Total cash")
Total cash and interest-bearing financial investments consist of cash and
cash equivalents and current interest-bearing financial investments and
non-current interest-bearing financial investments.
Total cash and interest-bearing financial investments is used to indicate
funds available to Nokia to run its current and invest in future business
activities as well as provide return for securityyFE holders.
Net cash and interest-
bearing financial
investments ("Net
cash")
Net cash and interest-bearing financial investments equals total cash
and interest-bearing financial investments less long-term and short-
term interest-bearing liabilities. Lease liabilities are not included in
interest-bearing liabilities. Reconciliation of net cash and interest-bearing
financial investments to the amounts in the consolidated statement of
financial position is presented below.
Net cash and interest-bearing financial investments is used to indicate
Nokia's liquidityyFE position after cash required to settle the interest-
bearing liabilities.
yFree cash flow
Net cash from/(used in) operating activities - purchases of propertyyFE,
plant and equipment and intangible assets (capital expenditures) +
proceeds from sale of propertyyFE, plant and equipment and intangible
assets – purchase of other non-current financial investments + proceeds
from sale of other non-current financial investments. Reconciliation of
free cash flow to the amounts in the consolidated statement of cash
flows is presented below.
yFree cash flow is the cash that Nokia generates after net investments to
tangible and intangible assets, as well as non-current financial
investments and it represents the cash available for distribution among
its securityyFE holders. It is a measure of cash generation, working capital
efficiencyyFE and capital discipline of the business.
Capital expenditure
Purchases of propertyyFE, plant and equipment and intangible assets
(excluding assets acquired under business combinations).
We use capital expenditure to describe investments in profit generating
activities in the future.
Recurring/One-time
measures
Recurring measures, such as recurring net sales, are based on revenues
that are likelyyFE to continue in the future. Recurring measures exclude e.g.
the impact of catch-up net sales relating to prior periods. One-time
measures, such as one-time net sales, reflect the revenues that are not
likelyyFE to continue in the future.
We use recurring/one-time measures to improve comparabilityyFE between
financial periods.
Adjusted profit/(loss)
Adjusted profit/(loss) equals the cash from operations before changes in
net working capital subtotal in the consolidated statement of cash flows.
We use adjusted profit/(loss) to provide a structured presentation when
describing the cash flows.
Recurring annual cost
savings
Reduction in cost of sales and operating expenses resulting from the
cost savings program and the impact of which is considered recurring in
nature.
We use recurring annual cost savings measure to monitor the progress
of our cost savings program established after the Alcatel-Lucent
transaction against plan.
Restructuring and
associated charges,
liabilities and cash
outflows
Charges, liabilities and cash outflows related to activities that either
meet the strict definition of restructuring under IyFRS or are closelyyFE
associated with such activities.
We use restructuring and associated charges, liabilities and cash
outflows to measure the progress of our integration and transformation
activities.
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| Comparable to reported reconciliation
Q4'22
Cost of
sales
Research
and
development
expenses
Selling,
general and
administrative
expenses
Other
operating
income
and
expenses
Operating
profit
Share of
results of
associated
companies
yFinancial
income
and
expenses
Income tax
(expense)/
benefit
Profit from
continuing
operations
yEUR million
Comparable
(4 212)
(1 189)
(727)
(168)
1 154
39
1
(265)
929
Amortization of acquired intangible assets
—
(14)
(93)
—
(106)
—
—
18
(88)
Impairment and write-off of assets, net of
reversals
(11)
(1)
—
(72)
(84)
(13)
—
—
(97)
Restructuring and associated charges
(40)
(18)
(19)
(3)
(80)
—
—
—
(80)
yFair value changes of legacyyFE IPR fund
—
—
—
(7)
(7)
—
—
—
(7)
Costs associated with countryyFE exit
—
—
—
6
6
—
—
(6)
—
Loss allowances and impairments on customer
financing loans
—
—
—
—
—
—
(32)
—
(32)
Change in financial liabilityyFE to acquire NSB non-
controlling interest
—
—
—
—
—
—
1
—
1
Changes in the recognition of deferred tax assets
—
—
—
—
—
—
—
2 500
2 500
Deferred tax expense due to tax rate changes
—
—
—
—
—
—
—
24
24
Items affecting comparabilityy
(51)
(33)
(112)
(76)
(272)
(13)
(31)
2 537
2 221
Reported
(4 262)
(1 222)
(838)
(244)
882
26
(30)
2 272
3 150
Q4'21
Cost of
sales
Research
and
development
expenses
Selling,
general and
administrative
expenses
Other
operating
income
and
expenses
Operating
profit
Share of
results of
associated
companies
yFinancial
income
and
expenses
Income tax
(expense)/
benefit
Profit from
continuing
operations
yEUR million
Comparable
(3 843)
(1 092)
(659)
88
908
21
(38)
(159)
731
Amortization of acquired intangible assets
—
(15)
(84)
—
(99)
—
—
18
(82)
Restructuring and associated charges
(33)
(5)
(12)
(2)
(52)
—
—
—
(52)
Gain on sale of fixed assets
—
—
—
30
30
—
—
—
30
Change in provisions related to past acquisitions
—
—
—
(26)
(26)
—
—
—
(26)
Impairment and write-off of assets, net of
reversals
(5)
(7)
(2)
—
(13)
—
—
—
(13)
yFair value changes of legacyyFE IPR fund
—
—
—
(7)
(7)
—
—
—
(7)
Costs associated with contract exit
1
—
—
—
1
—
—
—
1
Divestment of businesses
—
—
—
(1)
(1)
—
—
—
(1)
Loss allowance on customer financing loan
—
—
—
—
—
—
(32)
—
(32)
Change in financial liabilityyFE to acquire NSB non-
controlling interest
—
—
—
—
—
—
2
—
2
Prior yyFEear tax benefit related to past operating
model integration
—
—
—
—
—
—
—
69
69
Changes in the recognition of deferred tax assets
—
—
—
—
—
—
—
61
61
Items affecting comparabilityy
(37)
(26)
(98)
(6)
(168)
—
(30)
148
(50)
Reported
(3 880)
(1 118)
(758)
82
740
21
(68)
(11)
682
26 JanuaryyFE 2023
29
|
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| Q1-Q4'22
Cost of
sales
Research
and
development
expenses
Selling,
general and
administrative
expenses
Other
operating
income
and
expenses
Operating
profit
Share of
results of
associated
companies
yFinancial
income
and
expenses
Income tax
(expense)/
benefit
Profit from
continuing
operations
yEUR million
Comparable
(14 589)
(4 449)
(2 604)
(160)
3 109
(13)
(38)
(577)
2 481
Amortization of acquired intangible assets
—
(56)
(356)
—
(411)
—
—
84
(327)
Restructuring and associated charges
(84)
(37)
(52)
(3)
(177)
—
—
—
(177)
Costs associated with countryyFE exit
—
—
—
(98)
(98)
—
—
(6)
(104)
Impairment and write-off of assets, net of
reversals
(17)
(8)
—
(72)
(97)
(13)
—
—
(110)
yFair value changes of legacyyFE IPR fund
—
—
—
(7)
(7)
—
—
—
(7)
Loss allowances and impairments on customer
financing loans
—
—
—
—
—
—
(61)
—
(61)
Release of cumulative exchange differences
related to abandonment of foreign operations
—
—
—
—
—
—
(20)
—
(20)
Change in financial liabilityyFE to acquire NSB non-
controlling interest
—
—
—
—
—
—
11
—
11
Changes in the recognition of deferred tax assets
—
—
—
—
—
—
—
2 500
2 500
Deferred tax expense due to tax rate changes
—
—
—
—
—
—
—
24
24
Items Affecting comparabilityy
(100)
(101)
(409)
(181)
(791)
(13)
(70)
2 603
1 729
Reported
(14 689)
(4 550)
(3 013)
(341)
2 318
(26)
(108)
2 026
4 210
Q1-Q4'21
Cost of
sales
Research
and
development
expenses
Selling,
general and
administrative
expenses
Other
operating
income
and
expenses
Operating
profit
Share of
results of
associated
companies
yFinancial
income
and
expenses
Income tax
(expense)/
benefit
Profit from
continuing
operations
yEUR million
Comparable
(13 237)
(4 084)
(2 379)
273
2 775
9
(176)
(500)
2 109
Amortization of acquired intangible assets
—
(56)
(335)
—
(391)
—
—
80
(312)
Restructuring and associated charges
(121)
(62)
(74)
(6)
(263)
—
—
—
(263)
Settlement of legal disputes
—
—
—
80
80
—
—
—
80
Gain on sale of fixed assets
—
—
—
53
53
—
—
—
53
Impairment and write-off of assets, net of
reversals
(9)
(12)
(3)
(21)
(45)
—
—
—
(45)
Change in provisions related to past acquisitions
—
—
—
(26)
(26)
—
—
—
(26)
yFair value changes of legacyyFE IPR fund
—
—
—
(23)
(23)
—
—
—
(23)
Divestment of businesses
—
—
—
(1)
(1)
—
—
—
(1)
Change in financial liabilityyFE to acquire NSB non-
controlling interest
—
—
—
—
—
—
(33)
—
(33)
Loss allowance on customer financing loan
—
—
—
—
—
—
(32)
—
(32)
Prior yyFEear tax benefit related to past operating
model integration
—
—
—
—
—
—
—
69
69
Changes in the recognition of deferred tax assets
—
—
—
—
—
—
—
61
61
Deferred tax expense due to tax rate changes
—
—
—
—
—
—
—
17
17
Items affecting comparabilityy
(131)
(130)
(413)
56
(617)
—
(65)
228
(454)
Reported
(13 368)
(4 214)
(2 792)
330
2 158
9
(241)
(272)
1 654
26 JanuaryyFE 2023
30
|
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| Net cash and interest-bearing financial investments
yEUR million
31 December
2022
30 September
2022
30 June 2022
31 March 2022
31 December
2021
Non-current interest-bearing financial investments
697
715
473
493
—
Current interest-bearing financial investments
3 080
3 340
3 253
2 685
2 577
Cash and cash equivalents
5 467
5 196
5 457
6 341
6 691
Total cash and interest-bearing financial investments
9 244
9 251
9 183
9 519
9 268
Long-term interest-bearing liabilities
1
4 249
4 364
4 424
4 489
4 537
Short-term interest-bearing liabilities
1
228
232
213
126
116
Total interest-bearing liabilities
4 477
4 596
4 637
4 615
4 653
Net cash and interest-bearing financial investments
4 767
4 655
4 546
4 904
4 615
1
Lease liabilities are not included in interest-bearing liabilities.
yFree cash flow
yEUR million
Q4'22
Q4'21
Q1-Q4'22
Q1-Q4'21
Net cash from operating activities
567
485
1 474
2 625
Purchase of propertyyFE, plant and equipment and intangible assets
(195)
(159)
(601)
(560)
Proceeds from sale of propertyyFE, plant and equipment and
intangible assets
—
47
33
103
Purchase of other non-current financial investments
(13)
(22)
(115)
(77)
Proceeds from sale of other non-current financial investments
5
34
49
277
yFree cash flow
364
385
840
2 368
26 JanuaryyFE 2023
31
|
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| Comparable return on invested capital (ROIC)
Q4'22
yEUR million
Rolling four
quarters
Q4'22
Q3'22
Q2'22
Q1'22
Comparable operating profit
3 109
1 154
658
714
583
Comparable profit before tax
3 058
1 194
667
681
516
Comparable income tax expense
(577)
(265)
(116)
(95)
(101)
Comparable operating profit after tax
2 526
899
544
614
469
yEUR million
Average
31 December
2022
30 September
2022
30 June 2022
31 March 2022
31 December
2021
Total equityy
19 159
21 426
19 797
19 026
18 083
17 462
Total interest-bearing liabilities
4 596
4 477
4 596
4 637
4 615
4 653
Total cash and interest-bearing financial investments
9 293
9 244
9 251
9 183
9 519
9 268
Invested capital
14 462
16 659
15 143
14 480
13 179
12 847
Comparable ROIC
17.5%
Q3'22
yEUR million
Rolling four
quarters
Q3'22
Q2'22
Q1'22
Q4'21
Comparable operating profit
2 863
658
714
583
908
Comparable profit before tax
2 755
667
681
516
891
Comparable income tax expense
(471)
(116)
(95)
(101)
(159)
Comparable operating profit after tax
2 374
544
614
469
746
yEUR million
Average
30 September
2022
30 June 2022
31 March 2022
31 December 2021
30 September
2021
Total equityy
18 152
19 797
19 026
18 083
17 462
16 392
Total interest-bearing liabilities
4 716
4 596
4 637
4 615
4 653
5 080
Total cash and interest-bearing financial investments
9 320
9 251
9 183
9 519
9 268
9 381
Invested capital
13 548
15 143
14 480
13 179
12 847
12 091
Comparable ROIC
17.5%
Q4'21
yEUR million
Rolling four
quarters
Q4'21
Q3'21
Q2'21
Q1'21
Comparable operating profit
2 775
908
633
682
551
Comparable profit before tax
2 609
891
580
643
495
Comparable income tax expense
(500)
(159)
(117)
(104)
(120)
Comparable operating profit after tax
2 243
746
505
572
417
yEUR million
Average
31 December
2021
30 September
2021
30 June 2021
31 March 2021
31 December
2020
Total equityy
14 901
17 462
16 392
14 337
13 771
12 545
Total interest-bearing liabilities
5 105
4 653
5 080
5 063
5 153
5 576
Total cash and interest-bearing financial investments
8 861
9 268
9 381
8 751
8 842
8 061
Invested capital
11 145
12 847
12 091
10 649
10 082
10 060
Comparable ROIC
20.1%
26 JanuaryyFE 2023
32
|
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| This financial report was approved byyFE the Board of Directors on
26 JanuaryyFE 2023
.
Media
and Investor Contacts
:
Communications, tel. +358 10 448 4900 email:
press.services@nokia.com
Investor Relations, tel. +358 4080 3 4080 email:
investor.relations@nokia.com
•
Nokia plans to publish its "Nokia in 2022" annual report, which includes the review byyFE the Board of Directors
and the audited annual accounts, during week 9 of 2023.
•
Nokia's Annual General Meeting 2023 is planned to be held on 4 April 2023.
•
Nokia plans to publish its first quarter 2023 results on 20 April 2023.
•
Nokia plans to publish its second quarter and half yyFEear 2023 results on 20 JulyyFE 2023.
•
Nokia plans to publish its third quarter and JanuaryyFE-September 2023 results on 19 October 2023.
26 JanuaryyFE 2023
33
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant, Nokia Corporation, has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: January 26, 2023 |
Nokia Corporation |
|
|
|
By: |
/s/ Esa Niinimäki |
|
Name: |
Esa Niinimäki |
|
Title: |
Chief Legal Officer |
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