Nokia Corporation Financial Report for Q2 and Half Year 2017

Nokia Corporation

Half Year Financial Report

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

Nokia Corporation Financial Report for Q2 and Half Year 2017

Strong results in Nokia Technologies and solid performance in Nokias Networks business

This is a summary of the Nokia Corporation financial report for Q2 and half year 2017 published today. The complete financial report for Q2 and half year 2017 with tables is available at www.nokia.com/financials. Investors should not rely on summaries of our financial reports only, but should review the complete reports with tables.

FINANCIAL HIGHLIGHTS

Non-IFRS net sales in Q2 2017 of EUR 5.6bn (EUR 5.7bn in Q2 2016). Reported net sales in Q2 2017 of EUR 5.6bn (EUR 5.6bn in Q2 2016).

Non-IFRS diluted EPS in Q2 2017 of EUR 0.08 (EUR 0.03 in Q2 2016). Reported diluted EPS in Q2 2017 of negative EUR 0.07 (negative EUR 0.12 in Q2 2016).

Nokias Networks business

5% year-on-year net sales decrease in Q2 2017, primarily due to Ultra Broadband Networks. Within Ultra Broadband Networks, Mobile Networks declined in Q2 following a strong Q1, while Fixed Networks declined at a lower rate in Q2 compared to Q1. Within IP Networks and Applications, IP/Optical Networks declined at a lower rate in Q2 compared to Q1, and Applications & Analytics grew. Global Services net sales were approximately flat.

Strong Q2 2017 gross margin of 39.1% and operating margin of 8.2%, with solid performance across Ultra Broadband Networks, Global Services and IP Networks and Applications.

Nokia Technologies

90% year-on-year net sales increase in Q2 2017, primarily due to a new license agreement in Q2 2017 and a license agreement that was expanded in Q3 2016. Approximately 40% of the EUR 175 million year-on-year increase was non-recurring in nature and related to catch-up net sales for Q1 2017.

158% year-on-year operating profit increase in Q2 2017, primarily related to higher net sales, partially offset by increased licensing-related litigation costs and the ramp-up of our digital health business unit.

Second quarter and January-June 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) Q217 Q216 YoY

change Q117 QoQ change Q1-

Q217 Q1-

Q216 YoY

change

Net sales -

constant currency (non-IFRS) (2)% 7% (4)%

Net sales (non-IFRS) 5 629 5 670 (1)% 5 388 4% 11 017 11 285 (2)%

Nokias Networks business 4 971 5 222 (5)% 4 902 1% 9 873 10 415 (5)%

Ultra Broadband Networks 2 165 2 356 (8)% 2 236 (3)% 4 401 4 653 (5)%

Global Services 1 448 1 444 0% 1 361 6% 2 809 2 888 (3)%

IP Networks and Applications 1 358 1 421 (4)% 1 304 4% 2 663 2 874 (7)%

Nokia Technologies 369 194 90% 247 49% 616 391 58%

Group Common and Other 307 270 14% 254 21% 562 506 11%

Gross profit (non-IFRS) 2 350 2 205 7% 2 196 7% 4 546 4 433 3%

Gross margin % (non-IFRS) 41.7% 38.9% 280bps 40.8% 90bps 41.3% 39.3% 200bps

Operating profit (non-IFRS) 574 332 73% 341 68% 915 677 35%

Nokias Networks business 406 313 30% 324 25% 730 650 12%

Ultra Broadband Networks 191 184 4% 245 (22)% 437 311 41%

Global Services 123 34 262% 55 124% 179 137 31%

IP Networks and Applications 91 95 (4)% 23 296% 114 202 (44)%

Nokia Technologies 230 89 158% 116 98% 346 195 77%

Group Common and Other (62) (70) (99) (161) (169)

Operating margin % (non-IFRS) 10.2% 5.9% 430bps 6.3% 390bps 8.3% 6.0% 230bps

Financial income and expenses (non-IFRS) (63) (29) 117% (81) (22)% (144) (96) 50%

Taxes (non-IFRS) (74) (135) (45)% (48) 54% (122) (275) (56)%

Profit (non-IFRS) 441 171 158% 203 117% 644 310 108%

Profit attributable to the equity holders of the parent (non-IFRS) 449 194 131% 196 129% 646 346 87%

Non-controlling interests (non-IFRS) (9) (24) (63)% 6 (2) (37) (95)%

EPS, EUR diluted (non-IFRS) 0.08 0.03 167% 0.03 167% 0.11 0.06 83%

Second quarter and January-June 2017 reported 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) Q217 Q216 YoY change Q117 QoQ change Q1-Q217 Q1-Q216 YoY change

Net Sales -

constant currency 0% 7% (2)%

Net sales 5 619 5 576 1% 5 378 4% 10 996 11 088 (1)%

Nokias Networks business 4 971 5 222 (5)% 4 902 1% 9 873 10 415 (5)%

Ultra Broadband Networks 2 165 2 356 (8)% 2 236 (3)% 4 401 4 653 (5)%

Global Services 1 448 1 444 0% 1 361 6% 2 809 2 888 (3)%

IP Networks and Applications 1 358 1 421 (4)% 1 304 4% 2 663 2 874 (7)%

Nokia Technologies 369 194 90% 247 49% 616 391 58%

Group Common and Other 307 270 14% 254 21% 562 506 11%

Non-IFRS exclusions (11) (93) (88)% (11) 0% (21) (197) (89)%

Gross profit 2 236 2 031 10% 2 125 5% 4 361 3 608 21%

Gross margin % 39.8% 36.4% 340bps 39.5% 30bps 39.7% 32.5% 720bps

Operating (loss)/profit (45) (760) (94)% (127) (65)% (173) (1 472) (88)%

Nokias Networks business 406 313 30% 324 25% 730 650 12%

Ultra Broadband Networks 191 184 4% 245 (22)% 437 311 41%

Global Services 123 34 262% 55 124% 179 137 31%

IP Networks and Applications 91 95 (4)% 23 296% 114 202 (44)%

Nokia Technologies 230 89 158% 116 98% 346 195 77%

Group Common and Other (62) (70) (99) (161) (169)

Non-IFRS exclusions (620) (1 092) (43)% (468) 32% (1 088) (2 149) (49)%

Operating margin % (0.8)% (13.6)% 1 280bps (2.4)% 160bps (1.6)% (13.3)% 1 170bps

Financial income and expenses (218) (32) 581% (146) 49% (364) (135) 170%

Taxes 2 (172) 65 (154) 12% (325) 166

(Loss)/Profit 2 (433) (726) (40)% (435) 0% (868) (1 437) (40)%

(Loss)/Profit attributable to the equity holders of the parent 2 (423) (667) (37)% (473) (11)% (896) (1 291) (31)%

Non-controlling interests 2 (9) (58) (84)% 37 (124)% 28 (

LINK:	http://www.nokia.com/en_int/news/releases/2017/07/27/nokia-corporation...
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