Nokia Corporation Interim Report for Q 07

Nokia Corporation

Interim Report

April 27, 2017 at 08:00 (CET 1)

Nokia Corporation Interim Report for Q1 2017

Solid overall results, with strong performance in Mobile Networks; full year outlook reiterated

This is a summary of the Nokia Corporation interim report for first quarter 2017 published today. The complete first quarter 2017 interim report with tables is available at www.nokia.com/financials. Investors should not rely on summaries of our interim reports only, but should review the complete reports with tables.

FINANCIAL HIGHLIGHTS

Non-IFRS net sales in Q1 2017 of EUR 5.4bn (EUR 5.6bn in Q1 2016). Reported net sales in Q1 2017 of EUR 5.4bn (EUR 5.5bn in Q1 2016).

Non-IFRS diluted EPS in Q1 2017 of EUR 0.03 (EUR 0.03 in Q1 2016). Reported diluted EPS in Q1 2017 of negative EUR 0.08 (negative EUR 0.11 in Q1 2016).

Nokias Networks business

6% year-on-year net sales decrease in Q1 2017 primarily due to IP/Optical Networks and Fixed Networks, with approximately flat net sales in Mobile Networks and Applications & Analytics.

Strong Q1 2017 gross margin of 39.5% and solid operating margin of 6.6%, supported by continued focus on operational excellence, with particularly strong performance in Mobile Networks.

Nokia Technologies

25% year-on-year net sales increase in Q1 2017, primarily due to higher patent and brand licensing income and the acquisition of Withings, partially offset by the absence of licensing income related to certain expired agreements. Approximately one third of the net increase was due to non-recurring net sales related to a new license agreement.

9% year-on-year operating profit increase in Q1 2017, primarily related to higher net sales, which were partially offset by higher operating expenses. The year-on-year increase in operating expenses was primarily due to the ramp-up of our digital health and digital media businesses and increased licensing-related litigation costs.

First quarter 2017 non-IFRS results. Refer to note 1, Basis of Preparation, in the Financial statement information section for further details 1

EUR million (except for EPS in EUR) Q117 Q116 YoY change Q416 QoQ change

Net sales - constant currency (non-IFRS) (6)% (21)%

Net sales (non-IFRS) 5 388 5 615 (4)% 6 731 (20)%

Nokias Networks business 4 902 5 193 (6)% 6 086 (19)%

Ultra Broadband Networks 3 597 3 741 (4)% 4 346 (17)%

IP Networks and Applications 1 304 1 453 (10)% 1 740 (25)%

Nokia Technologies 247 198 25% 309 (20)%

Group Common and Other 254 235 8% 340 (25)%

Gross profit (non-IFRS) 2 196 2 228 (1)% 2 842 (23)%

Gross margin % (non-IFRS) 40.8% 39.7% 110bps 42.2% (140)bps

Operating profit (non-IFRS) 341 345 (1)% 940 (64)%

Nokias Networks business 324 337 (4)% 858 (62)%

Ultra Broadband Networks 301 230 31% 564 (47)%

IP Networks and Applications 23 107 (79)% 294 (92)%

Nokia Technologies 116 106 9% 158 (27)%

Group Common and Other (99) (99) 0% (76)

Operating margin % (non-IFRS) 6.3% 6.1% 20bps 14.0% (770)bps

Financial income and expenses (non-IFRS) (81) (67) 21% (72) 13%

Taxes (non-IFRS) (48) (140) (66)% (204) (76)%

Profit (non-IFRS) 203 139 46% 676 (70)%

Profit attributable to the equity holders of the parent (non-IFRS) 196 152 29% 672 (71)%

Non-controlling interests (non-IFRS) 6 (13) 4 50%

EPS, EUR diluted (non-IFRS) 0.03 0.03 0% 0.12 (75)%

First quarter 2017 reported results, unless otherwise specified. Refer to note 1, Basis of Preparation, in the Financial statement information section for further details 1

EUR million (except for EPS in EUR) Q117 Q116 YoY change Q416 QoQ change

Net Sales - constant currency (4)% (20)%

Net sales 5 378 5 511 (2)% 6 657 (19)%

Nokias Networks business 4 902 5 193 (6)% 6 086 (19)%

Ultra Broadband Networks 3 597 3 741 (4)% 4 346 (17)%

IP Networks and Applications 1 304 1 453 (10)% 1 740 (25)%

Nokia Technologies 247 198 25% 309 (20)%

Group Common and Other 254 235 8% 340 (25)%

Non-IFRS exclusions (11) (104) (74)

Gross profit 2 125 1 577 35% 2 683 (21)%

Gross margin % 39.5% 28.6% 1 090bps 40.3% (80)bps

Operating (loss)/profit (127) (712) (82)% 317 (140)%

Nokias Networks business 324 337 (4)% 858 (62)%

Ultra Broadband Networks 301 230 31% 564 (47)%

IP Networks and Applications 23 107 (79)% 294 (92)%

Nokia Technologies 116 106 9% 158 (27)%

Group Common and Other (99) (99) 0% (76)

Non-IFRS exclusions (468) (1 057) (622)

Operating margin % (2.4)% (12.9)% 1 050bps 4.8% (720)bps

Financial income and expenses (146) (103) 42% (72) 103%

Taxes 2 (154) 101 401

(Loss)/Profit 2 (435) (712) (39)% 658

(Loss)/Profit attributable to the equity holders of the parent 2 (473) (623) (24)% 659

Non-controlling interests 2 37 (88) 0

EPS, EUR diluted 2 (0.08) (0.11) (27)% 0.11

Net cash and other liquid assets 4 409 8 246 (47)% 5 299 (17)%

1 Results are as reported unless otherwise specified. The financial information in this report is unaudited. Non-IFRS results exclude costs related to the acquisition of Alcatel Lucent and related integration, goodwill impairment charges, intangible asset amortization and other purchase price fair value adjustments, restructuring and associated charges and certain other items that may not be indicative of Nokias underlying business performance. For details, please refer to the non-IFRS exclusions section included in discussions of both the quarterly and year to date performance and note 2, Non-IFRS to reported reconciliation, in the notes in the Financial statement information in this report. Change in net sales at constant currency excludes the impact of changes in exchange rates in comparison to euro, our reporting currency. For more information on currency exposures, please refer to note 1, Basis of Preparation,

LINK:	http://www.nokia.com/en_int/news/releases/2017/04/27/nokia-corporation...
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