Nokia Corporation Interim Report for Q 04 and January-June 04

Nokia Corporation

Interim Report

July 24, 2014 at 08.00 (CET 1)

This is a summary of the Nokia Corporation Interim Report for Q2 2014 and January-June 2014 published today. The complete Interim Report with tables for Q2 2014 and January-June 2014 is available at http://company.nokia.com/financials. Investors should not rely on summaries of Nokias interim reports only, but should review the full interim reports with tables.

Nokia Corporation Interim Report for Q2 2014 and January-June 2014

FINANCIAL AND OPERATING HIGHLIGHTS

Second quarter 2014 highlights for continuing operations:

- Non-IFRS diluted EPS in Q2 2014 of EUR 0.06 (EUR 0.05 in Q2 2013); reported diluted EPS of EUR -0.01 (EUR -0.02 in Q2 2013)

- Net sales in Q2 2014 of EUR 2.9 billion (EUR 3.2 billion in Q2 2013)

Nokia Networks

- In Q2 2014, Nokia Networks achieved strong underlying operating profitability with non-IFRS operating profit of EUR 281 million, or 11.0% of net sales, compared to EUR 328 million, or 11.8% of net sales, in Q2 2013. The strong level of profitability for Nokia Networks in Q2 2014 and Q2 2013 was primarily due to operational efficiency which benefitted both gross margin and operating profit.

- Nokia Networks net sales in Q2 2014 were EUR 2.6 billion, compared to EUR 2.8 billion in Q2 2013.

- Excluding foreign currency fluctuations and the divestments of businesses not consistent with its strategic focus, as well as the exiting of certain customer contracts and countries, Nokia Networks net sales would have increased 1% year-on-year.

HERE

- HERE net sales in Q2 2014 were approximately flat on a year-on-year basis. Excluding foreign currency fluctuations, HERE net sales in Q2 2014 would have increased 2% year-on-year.

- In Q2 2014, HERE sold map data licenses for the embedded navigation systems of 3.3 million new vehicles globally, compared to 2.7 million vehicles in Q2 2013.

- HERE continued to focus on investing in longer term transformational growth opportunities, and announced the acquisitions of Medio and Desti.

Nokia Technologies

- Nokia Technologies net sales increased sequentially in Q2 2014, primarily due to Microsoft becoming a more significant intellectual property licensee in conjunction with the sale of substantially all of the Devices & Services business to Microsoft.

Balance sheet highlights:

- Nokia ended Q2 2014 with a strong balance sheet and solid cash position with gross cash of EUR 9.0 billion and net cash of EUR 6.5 billion compared to EUR 6.9 billion and EUR 2.1 billion, respectively, at the end of Q1 2014.

- In Q2 2014, Nokia completed the sale of substantially all of the Devices & Services business to Microsoft. Of the approximately EUR 5.0 billion of net cash impact from the proceeds, approximately EUR 4.8 billion benefitted Q2 2014 with the balance expected to be received in the second half 2014. In connection with the completion of the transaction the EUR 1.5 billion Microsoft convertible bonds were repaid.

- During Q2 2014 we started the capital structure optimization program with the redemption of approximately EUR 950 million of Nokia Networks debt. As a result of this, Nokia no longer has material financial covenants.

January-June 2014 highlights for continuing operations:

Nokia continuing operations net sales in January-June 2014 were EUR 5.6 billion

- Nokia continuing operations net sales for the first half 2014 decreased 11% year-on-year.

- Reported EPS for the first half 2014 was EUR 0.02, compared to EUR -0.04 in the first half 2013.

Commenting on the second quarter results, Rajeev Suri, Nokia President and CEO, said:

Nokias second quarter performance shows the strength of the company today.

In Nokia Networks, our unique operating model has allowed us to deliver strong profitability while improving our topline trend. Maintaining this balance will remain a clear priority in the second half of the year, when we expect Networks to return to year-on-year growth. Our expectations for the full year 2014 have improved and we now expect full year underlying profitability for Networks to be at or slightly above our long term target range of 5 to 10 percent.

HERE demonstrated good year-on-year growth in its automotive business, and we continue to invest to expand in this area, as well as in the enterprise and consumer markets. The licensing and innovation engine of Nokia Technologies remains very much on track. We see opportunities to expand this business with both new and existing licensees, and the Technologies team continues to increase its industry-leading patent portfolio.

This performance, along with the many conversations I have had with customers, partners, employees and others in my first quarter as CEO, gives me a high degree of confidence about our future.

SUMMARY FINANCIAL INFORMATION

Reported and Non-IFRS second quarter 2014 results1 Reported and Non-IFRS January - June 2014 results1

EUR million Q2/14 Q2/13 YoY

Change Q1/14 QoQ

Change Q1-Q2/2014 Q1-Q2/2013 YoY

Change

Continuing Operations

Net sales 2 942 3 155 -7 % 2 664 10 % 5 606 6 295 -11 %

Gross margin % (non-IFRS) 44.0 % 43.6 % 45.7 % 44.8 % 41.4 %

Operating expenses (non-IFRS) -940 -1 009 -7 % -925 2 % -1 865 -2 013 -7 %

Operating profit (non-IFRS) 347 430 -19 % 304 14 % 651 684 -5 %

Non-IFRS exclusions 62 419 62 125 702

Operating profit 284 12 242 17 % 526 -18

EPS, EUR diluted (non-IFRS) 0.06 0.05 20 % 0.04 50 % 0.10 0.06 67 %

EPS, EUR diluted (reported) -0.01 -0.02 0.03 0.02 -0.04

Net cash from operating activities 1 455 - - 198 1 653 -

Net cash and other liquid assets 6 497 4 067 60 % 2 075 213 % 6 497 4 067 60 %

Discontinued Operations

Net sales 497 2 579 -81 % 1 929 -74 % 2 426 5 344 -55 %

Operating profit (non-IFRS) -110 -127 -3

LINK:	http://company.nokia.com/en/news/press-releases/2014/07/24/nokia-corpo...
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