Nokia Corporation Interim Report for Q 04

Nokia Corporation

Interim report

April 29, 2014 at 08.00 (CET 1)

This is a summary of the first quarter 2014 interim report published today. The complete first quarter 2014 interim report with tables is available at http://company.nokia.com/financials. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.

FINANCIAL AND OPERATING HIGHLIGHTS

First quarter 2014 highlights for continuing operations*:

Nokias non-IFRS diluted EPS in Q1 2014 of EUR 0.04 (0.01 in Q1 2013); reported diluted EPS of EUR 0.03 (-0.03 in Q1 2013)

Nokias net sales in Q1 2014 were EUR 2.7 billion, down 15% compared to Q1 2013.

In Q1 2014, underlying operating profitability for Nokias continuing operations increased to EUR 304 million, or 11.4% of net sales, compared to EUR 254 million, or 8.1% of net sales, in Q1 2013.

Networks achieved solid underlying operating profitability, with Q1 2014 non-IFRS operating profit of EUR 216 million, or 9.3% of net sales, compared to EUR 196 million, or 7.0%, in Q1 2013. This was primarily due to a higher gross margin which benefitted from a higher proportion of software sales, significant efficiency improvements in Global Services and a higher proportion of Mobile Broadband sales.

HEREs external net sales were EUR 185 million, an increase of 13% year-on-year, driven by strong sales to vehicle customers.

Technologies entered in to an agreement with HTC, validating Nokias implementation patents and enabling Technologies to focus on further licensing opportunities.

*See note 4 to our Summary Financial Information table below concerning our current operational and reporting structure

Balance sheet highlights:

Nokia Group ended Q1 2014 with a strong balance sheet and solid cash position with gross cash of EUR 6.9 billion and net cash of EUR 2.1 billion compared to EUR 9.0 billion and EUR 2.3 billion, respectively, at the end of Q4 2013. The sequential decline in Nokias gross cash was primarily due to repayment of certain debt facilities totalling approximately EUR 1.8 billion during the first quarter 2014.

If the transaction to sell to Microsoft substantially all of our Devices & Services business would have closed before the end of the first quarter 2014, Nokia would have ended the quarter with gross cash of approximately EUR 10.5 billion and net cash of approximately EUR 7.1 billion.

Risto Siilasmaa, Nokia Chairman, commented on the companys progress:

With the closing of our transaction with Microsoft, Nokia begins a new era. We are confident in our future. Nokias vision is to be a leader in technologies which will be important in a world of billions of intelligent connected devices. With our strategic direction now set, our highly talented teams can focus fully on realizing our vision by building on Nokias three strong businesses - Networks, HERE, and Technologies. In all three businesses, Nokia has a solid foundation and we continue to see attractive opportunities to invest in growth. Additionally, we will focus on managing our capital effectively, and we have announced a comprehensive EUR 5 billion program to optimize our capital structure.

In the first quarter of 2014, all three of our businesses delivered solid performance. In particular, we were pleased by the continued strength of Networks underlying operating profitability. Under the leadership of Rajeev Suri, Networks has become an innovation leader, with tremendously improved strategic focus and financial results. I believe Rajeev is the right person to lead Nokia forward, and that his passion for technology will help ensure that Nokia continues to deliver technologies that have a positive impact on peoples lives.

SUMMARY FINANCIAL INFORMATION

Reported and Non-IFRS

first quarter 2014 results1-4

EUR million Q1/14 Q1/13 YoY

Change Q4/13 QoQ

Change

Continuing

Operations

Net sales 2 664 3 140 -15% 3 476 -23%

Gross margin %

(non-IFRS) 45.7% 39.3% 42.5 %

Operating expenses

(non-IFRS) - 925 -1 004 -8% -1 018 -9%

Operating profit

(non-IFRS) 304 254 20% 409 -26%

Non-IFRS

exclusions 62 283 134

Operating profit 242 - 30 274 -12%

EPS, EUR diluted

(non-IFRS) 0.04 0.01 300% 0.08 -50%

EPS, EUR diluted

(reported) 0.03 -0.03 0.05 -40%

Net cash from

operating activities6 198 498 -60%

Net cash and

other liquid assets5 2 075 4 479 -54% 2 308 -10%

Networks

Net sales 2 328 2 804 -17% 3 105 -25%

Mobile Broadband

net sales 1 250 1 244 0% 1 563 -20%

Global Services

net sales 1 069 1 423 -25% 1 540 -31%

Gross margin %

(non-IFRS) 39.6% 34.0% 37.6%

Operating profit

(non-IFRS) 216 196 10% 349 -38%

Operating

margin %

(non-IFRS) 9.3% 7.0% 11.2%

HERE

Net sales 209 216 -3% 255 -18%

Gross margin %

(non-IFRS) 77.5% 75.5% 75.6%

Operating profit

(non-IFRS) 10 -5 25 -60%

Operating margin %

(non-IFRS) 4.8% -2.3% 9.8%

Technologies

Net sales 131 123 7% 121 8%

Gross margin %

(non-IFRS) 98.5% 99.2% 98.4%

Operating profit

(non-IFRS) 86 73 18% 81 6%

Operating

margin %

(non-IFRS) 65.6% 59.3% 66.9%

Discontinued

Operations

Net sales 1 929 2 765 -30% 2 633 -27%

Operating profit

(non-IFRS) -306 -73 -191

Operating profit -326 -120 -198

Operating margin %

(non-IFRS) -15.9% -2.6% -7.3%

Operating margin % -16.9% -4.3% -7.5%

Net cash from

operating activities6 -336 -292

Nokia Group

(continuing and

discontinued

operations)

EPS, EUR diluted

(non-IFRS) -0.04 -0.02 0.03

EPS, EUR diluted

(reported) -0.06 -0.07 -0.01

Ne

LINK:	http://company.nokia.com/en/news/press-releases/2014/04/29/nokia-corpo...
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