Nokia Corporation Report for Q4 06 and Full Year 06

Nokia Corporation

Financial Statement Release

February 2, 2017 at 08:00 (CET 1)

Nokia Corporation Report for Q4 2016 and Full Year 2016

Operating margin for Nokias Networks business at the high end of our guidance range for full year 2016

This is a summary of the Nokia Corporation report for fourth quarter 2016 and full year 2016 published today. The complete fourth quarter 2016 and full year 2016 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 Q4 2016 of EUR 6.7bn (reported: EUR 6.6bn). In the year-ago quarter, non-IFRS net sales would have been EUR 7.7bn on a comparable combined company basis (reported: EUR 3.6bn on a Nokia stand-alone basis).

Non-IFRS diluted EPS in Q4 2016 of EUR 0.12 (reported: EUR 0.11) benefited by approximately EUR 0.02-0.03 due to the Q4 2016 non-IFRS tax rate coming in at 23% compared to our guidance.

Non-IFRS diluted EPS in full year 2016 of EUR 0.22 (reported: negative EUR 0.13).

Nokias Board of Directors will propose a dividend of EUR 0.17 per share for 2016 (EUR 0.16 per share for 2015).

Nokias Networks business

14% year-on-year net sales decrease in Q4 2016, reflecting challenging market conditions in Q4 2016 and the difficult comparison against the strong performance by Alcatel-Lucent in Q4 2015.

Strong Q4 2016 gross margin of 40.6% and operating margin of 14.1%, supported by continued focus on operational excellence and cost controls.

Operating margin of 8.9% in full year 2016, at the high end of our guidance range of 7-9%.

Nokia Technologies

25% year-on-year net sales decrease and 49% operating profit decrease in Q4 2016, primarily due to the absence of the Samsung arbitration award, which benefited Q4 2015. The declines were partially offset by the expanded intellectual property rights (IPR) license agreement with Samsung announced in Q3 2016 and divested IPR. In addition, the acquisition of Withings helped to offset the decline in net sales.

Group Common and Other

34% year-on-year net sales increase in Q4 2016, with particularly strong growth in Alcatel Submarine Networks.

Q4 and January-December 2016 non-IFRS results. Refer to note 1 in the Financial statement information for further details 1,2

Combined

company histori-

cals2 Combined

company histori-

cals2

EUR million Q416 Q415 YoY change Q316 QoQ change Q1-Q416 Q1-

Q415 YoY change

Net sales -

constant currency

(non-IFRS) (13)% 11% (10)%

Net sales

(non-IFRS) 6 715 7 719 (13)% 5 950 13% 23 945 26 606 (10)%

Nokias Networks

business 6 069 7 057 (14)% 5 322 14% 21 799 24 634 (12)%

Ultra Broadband

Networks 4 332 5 081 (15)% 3 903 11% 15 770 18 079 (13)%

IP Networks and

Applications 1 737 1 976 (12)% 1 419 22% 6 029 6 555 (8)%

Nokia Technologies 309 413 (25)% 353 (12)% 1 053 1 074 (2)%

Group Common

and Other 341 254 34% 298 14% 1 145 921 24%

Gross profit

(non-IFRS) 2 818 3 272 (14)% 2 365 19% 9 589 10 441 (8)%

Gross margin %

(non-IFRS) 42.0% 42.4% (40)bps 39.7% 230bps 40.0% 39.2% 80bps

Operating profit

(non-IFRS) 940 1 279 (27)% 556 69% 2 172 2 887 (25)%

Nokias Networks

business 854 1 097 (22)% 432 98% 1 935 2 496 (22)%

Ultra Broadband

Networks 574 702 (18)% 326 76% 1 362 1 656 (18)%

IP Networks and

Applications 280 396 (29)% 106 164% 573 840 (32)%

Nokia Technologies 158 311 (49)% 225 (30)% 579 692 (16)%

Group Common

and Other (73) (129) (101) (341) (301)

Operating margin %

(non-IFRS) 14.0% 16.6% (260)bps 9.3% 470bps 9.1% 10.9% (180)bps

Q4 and January-December 2016 reported results, unless otherwise specified. Refer to note 1 in the Financial statement information for further details 1,3

Nokia stand-

alone histori-

cals3 Nokia stand-

alone histori-

cals3

EUR million

(except for EPS

in EUR) Q416 Q415 YoY change Q316 QoQ change Q1-Q416 Q1-Q415 YoY change

Net Sales -

constant currency 84% 10% 89%

Net sales 6 641 3 609 84% 5 890 13% 23 614 12 499 89%

Nokias Networks

business 6 069 3 210 89% 5 322 14% 21 799 11 486 90%

Ultra Broadband

Networks 4 332 2 815 54% 3 903 11% 15 770 10 158 55%

IP Networks and

Applications 1 737 395 340% 1 419 22% 6 029 1 328 354%

Nokia Technologies 309 403 (23)% 353 (12)% 1 053 1 027 3%

Group Common

and Other 341 0 298 14% 1 145 0

Non-IFRS

exclusions (74) 0 (60) 23% (331) 0

Gross profit 2 659 1 693 57% 2 216 20% 8 456 5 536 53%

Gross margin % 40.0% 46.9% (690)bps 37.6% 240bps 35.8% 44.3% (850)bps

Operating profit 317 643 (51)% 55 476% (1 100) 1 697

Nokias Networks

business 854 495 73% 432 98% 1 935 1 349 43%

Ultra Broadband

Networks 574 405 42% 326 76% 1 362 1 210 13%

IP Networks and

Applications 280 90 211% 106 164% 573 138 315%

Nokia Technologies 158 316 (50)% 225 (30)% 579 698 (17)%

Group Common

and Other (73) (74) (101) (341) (89)

Non-IFRS exclusions (622) (93) 569% (501) 24% (3 272) (261) 1 154%

Operating margin % 4.8% 17.8% (1 300)bps 0.9% 390bps (4.7)% 13.6% (1 830)bps

Profit (non-IFRS) 676 575 18% 264 156% 1 250 1 392 (10)%

Profit/(Loss) 4 658 499 32% (133) (595)% (912) 1 194

EPS, diluted

(non-IFRS) 0.12 0.15 (20)% 0.04 200% 0.22 0.36 (39)%

EPS, diluted 4 0.11 0.13 (15)% (0.02) (650)% (0.13) 0.31

Net cash and other

liquid assets 5 299 7 775 (32)% 5 539 (4)% 5 299 7 775 (32)%

1Results are as reported unless otherwise specified. The results information in this report is unaudited. Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associat

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