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Nokia financial results

Q1 2014 Conference call
29 April 2014
15:00 / Helsinki
08:00 / New York
Presenters:
Rajeev Suri/ President and CEO*
Timo Ihamuotila / EVP and CFO
Matt Shimao / Head of Investor Relations
*Effective1 May 2014
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Disclaimer
It should be noted that Nokia and its business are
exposed to various risks and uncertainties and certain
statements herein that are not historical facts are
forward-looking statements, including, without
limitation, those regarding future business and
financial performance of Nokia and its industry and
statements preceded by "believe," "expect,"
"anticipate," "foresee," "sees," "target," "estimate,"
"designed," "aim", "plans," "intends," "focus",
continue, project, should, "will" or similar
expressions. These statements are based on
management's best assumptions and beliefs in light of
the information currently available to it. Because they
involve risks and uncertainties, actual results may differ
materially from the results that we currently expect.
Factors, including risks and uncertainties that could
cause these can be both external, such as general,
economic and industry conditions, as well as internal
operating factors. We have identified these in more
detail in our most recent annual report on Form 20-F
in under Item 3D. Risk Factors and in our first quarter
2014 Interim Report issued on April 29, 2014. Other
unknown or unpredictable factors or underlying
assumptions subsequently proven to be incorrect could
cause actual results to differ materially from those in
the forward-looking statements. Nokia does not
undertake any obligation to publicly update or revise
forward-looking statements, whether as a result of new
information, future events or otherwise, except to the
extent legally required.
In addition to information on our reported IFRS results,
we provide certain information on a non-IFRS, or
underlying business performance, basis. Non-IFRS
results exclude all material special items for all periods.
Nokia believes that our non-IFRS results provide
meaningful supplemental information to both
management and investors regarding Nokias
underlying business performance by excluding the
above-described items that may not be indicative of
Nokias business operating results. These non-IFRS
financial measures should not be viewed in isolation or
as substitutes to the equivalent IFRS measure(s), but
should be used in conjunction with the most directly
comparable IFRS measure(s) in the reported results. A
detailed explanation of the content of the non-IFRS
information and a reconciliation between the non-IFRS
and the reported information can be found in Nokias
respective results reports. Please see our Results
Report issued on January 23, 2014 for more
information on our results and financial performance
for the indicated periods as well as our operating and
reporting structure.
Nokia is a registered trademark of Nokia Corporation.
Other product and company names mentioned herein
may be trademarks or trade names of their respective
owners.
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Presented by
Rajeev Suri
President and CEO*
Timo Ihamuotila
EVP and CFO
*Effective 1 May, 2014
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Networks
Q1 2014 Highlights
Net sales were EUR 2.3 billion, down 17% year-on-year and 25% sequentially.
Excluding the negative affect of foreign currency fluctuations, divestments of
businesses, and the exiting of certain customer contracts countries, net sales were
down approximately 6% year-on-year.
Non-IFRS gross margin was 39.6%, up 560 basis points year-on-year and 200
basis points sequentially.
Non-IFRS OPEX was EUR 704 million, down 8% year-on-year and 9% sequentially.
Non-IFRS operating margin was 9.3%, up 230 basis points year-on-year and down
190 basis points sequentially.
At the end of Q1, Networks contribution to Nokia's gross cash was EUR 2.9 billion
and Networks contribution to Nokia's net cash was EUR 1.9 billion.
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HERE
Q1 2014 Highlights
Net sales were EUR 209 million, down 3% year-on-year and 18%
sequentially.
External net sales were EUR 185 million, up 13% year-on-year and down 18%
sequentially.
Internal net sales were EUR 24 million, down 54% year-on-year and 20%
sequentially.
Non-IFRS gross margin was 77.5%, up 200 basis points year-on-year and
190 basis points sequentially.
Non-IFRS OPEX was EUR 154 million, down 8% year-on-year and 8%
sequentially.
Non-IFRS operating margin was 4.8%, up 710 basis points year-on-year and
down 500 basis points sequentially.
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Technologies
Q1 2014 Highlights
Net sales were EUR 131 million, up 7% year-on-year and 8%
sequentially.
Non-IFRS gross margin was 98.5%, down 70 basis points year-on-year
and up 10 basis points sequentially.
Non-IFRS OPEX was EUR 40 million, down 17% year-on-year and up 8%
sequentially.
Non-IFRS operating margin was 65.6%, up 630 basis points year-on-
year and down 130 basis points sequentially.
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Discontinued Operations
Q1 2014 Highlights
Net sales were EUR 1.9 billion, down 30% year-on-year
and 27% sequentially.
Non-IFRS gross margin was 16.2%, down 570 basis
points year-on-year and 410 basis points sequentially.
In Q1 2014 and Q4 2013, non-IFRS gross margin was
negatively affected by approximately EUR 60 million
and EUR 50 million of inventory related allowances,
respectively. In Q1 2013, non-IFRS gross margin was
positively affected by EUR 50 million of inventory
related allowances.
Non-IFRS OPEX was EUR 597 million, down 10% year-
on-year and 17% sequentially.
Non-IFRS operating margin was negative 15.9%, down
1330 basis points year-on-year and 860 basis points
sequentially.
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Q&A
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