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Press Release -- April 26th, 2018
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Nokia Corporation Interim Report for Q1 2018

Nokia Corporation 
Interim Report
April 26, 2018 at 08:00 (CET +1)

Nokia Corporation Interim Report for Q1 2018

Solid full year results expected in Networks despite challenging Q1; continued strength in Nokia Technologies

  • Nokia sees further acceleration of 5G with strong momentum building by year-end
  • Nokia raises its primary addressable market outlook for its Networks business in full year 2018, and expects to outperform that market in full year 2018
  • Full year 2018 Nokia-level guidance reiterated


This is a summary of the Nokia Corporation financial report for Q1 2018 published today. The complete financial report for Q1 2018 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 financial reports with tables.

FINANCIAL HIGHLIGHTS

  • Net sales in Q1 2018 were EUR 4.9bn, compared to EUR 5.4bn in Q1 2017. On a constant currency basis, net sales would have been flat year-on-year.
  • Non-IFRS diluted EPS in Q1 2018 was EUR 0.02, compared to EUR 0.03 in Q1 2017. Reported diluted EPS in Q1 2018 was negative EUR 0.06, compared to negative EUR 0.08 in Q1 2017.

Nokia’s Networks business net sales were EUR 4.3bn, with operating profit of EUR 43mn

  • Q1 net sales and profitability were impacted primarily by lower net sales in North America. However, order intake and backlog were excellent in Q1. Therefore, Nokia expects the net sales trajectory in North America, as well as profitability, to improve significantly in the second half of 2018.
  • Based on firm orders, Nokia sees customer demand for 5G accelerating further, particularly in North America, where we expect commercial 5G network deployments to begin near the end of 2018.
  • Encouraging progress was made in Q1 with our strategy to diversify and grow by targeting attractive adjacent markets.  Strong momentum continued with large enterprise vertical and webscale customers, with double-digit year-on-year growth in net sales and order intake.
  • Momentum in our end-to-end strategy continued, with one third of our sales pipeline now comprised of solutions, products and services from multiple business groups.

Nokia Technologies net sales were EUR 365mn, with operating profit of EUR 274mn

  • Strong track record continued, with 48% year-on-year net sales growth and 136% year-on-year operating profit increase in Q1, primarily related to license agreements entered into in 2017.
  • Nokia Technologies continued to make good progress on new patent licensing agreements, as well as brand and technology licensing agreements; no major agreements were announced in Q1.

Outlook

  • Nokia reiterates all of its full year 2018 Nokia-level guidance, despite expected weakness in its Networks business in the first half of 2018.
  • In its Networks business, Nokia sees market conditions improving and 5G accelerating further, with strong momentum building by year end. Nokia now sees a stronger primary addressable market for its Networks business in full year 2018 and expects its Networks business to outperform its primary addressable market in full year 2018.
  • Nokia remains on target to deliver EUR 1.2 billion of recurring annual cost savings in full year 2018. Our active efforts to drive 5G adoption are expected to result in EUR 100 to 200 million of temporary expenses in 2018 to support 5G customer trials.
  • Nokia continues to see opportunities to build on its track record in Nokia Licensing within Nokia Technologies and drive a compound annual growth rate of approximately 10% for recurring net sales over the 3-year period ending 2020.
  • Please refer to the full details and other targets in the Outlook section of this press release.
First quarter 2018 non-IFRS results. Refer to note 1, “Basis of Preparation” and note 15, “Performance measures”, in the “Financial statement information” section for further details1
EUR million (except for EPS in EUR) Q1’18 Q1’17 YoY change Constant currency YoY change
Net sales (non-IFRS) 4 929 5 388 (9)% 0%
  Nokia’s Networks business 4 324 4 902 (12)% (3)%
  Nokia Technologies 365 247 48% 49%
  Group Common and Other 252 254 (1)% 4%
Gross profit (non-IFRS) 1 941 2 196 (12)%
Gross margin % (non-IFRS) 39.4% 40.8% (140)bps  
Operating profit (non-IFRS) 239 341 (30)%
  Nokia’s Networks business 43 324 (87)%
  Nokia Technologies 274 116 136%
  Group Common and Other (78) (99) (21)%
Operating margin % (non-IFRS) 4.8% 6.3% (150)bps
Financial income and expenses (non-IFRS) (116) (81) 43%
Income taxes (non-IFRS) (36) (48) (25)%
Profit for the period (non-IFRS) 83 203 (59)%
Profit attributable to the equity holders of the parent (non-IFRS) 86 196 (56)%
Non-controlling interests (non-IFRS) (3) 6
EPS, EUR diluted (non-IFRS) 0.02 0.03 (33)%
 
First quarter 2018 reported results. Refer to note 1, “Basis of Preparation” and note 15, “Performance measures”, in the “Financial statement information” section for further details1
EUR million (except for EPS in EUR) Q1’18 Q1’17 YoY change Constant currency YoY change
Net sales 4 924 5 378 (8)% 0%
  Nokia’s Networks business 4 324 4 902 (12)% (3)%
  Nokia Technologies 365 247 48% 49%
  Group Common and Other 252 254 (1)% 4%
  Non-IFRS exclusions (5) (11) (55)%
Gross profit 1 805 2 125 (15)%
Gross margin % 36.7% 39.5% (280)bps  
Operating loss (336) (127) 165%
  Nokia’s Networks business 43 324 (87)%
  Nokia Technologies 274 116 136%
  Group Common and Other (78) (99) (21)%
  Non-IFRS exclusions (575) (468) 23%
Operating margin % (6.8)% (2.4)% (440)bps
Financial income and expenses (108) (146) (26)%
Income taxes 94 (154)
Loss for the period (354) (435) (19)%
Loss attributable to the equity holders of the parent (351) (473) (26)%
Non-controlling interests (3) 37
EPS, EUR diluted (0.06) (0.08) (25)%
Net cash and current financial investments 4 176 4 409 (5)%
1Results 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 Nokia’s underlying business performance. For details, please refer to the non-IFRS exclusions section included in discussion of the quarterly performance and note 2, “Non-IFRS to reported reconciliation”, in the notes to the Financial statement information in this report. Change in net sales at constant currency excludes the effect 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”, in the “Financial statement information” section in this report.

CEO STATEMENT

We see strong momentum building for the full year despite a slow start in Networks. I have considerable confidence that Nokia is well-positioned to out-perform a strengthening Networks market and meet our full-year 2018 guidance.

Our confidence is based on strong order intake and backlog in Q1; our end-to-end strategy is resonating with customers, resulting in strong cross-sell activity and a year-on-year doubling of the multi-business group pipeline; we have clear visibility to 5G deals for large-scale commercial rollouts in United States in the second half of the year; and are successfully executing our diversification strategy, with consistent double-digit profitable growth with enterprise and webscale customers.

On the licensing side, first quarter recurring revenue was up by 65% year-on-year, and we expect continued strong growth in the months ahead. We see further opportunities in smart phone licensing in China, in the automotive sector and in brand licensing.

Our end-to-end portfolio positions us very well for 5G and our efforts to accelerate global 5G adoption are clearly delivering results. We will fuel that adoption in 2018 with investments in trial costs, as needed. These investments will position us to capture opportunities in a 5G market that we believe will substantially accelerate later this year in the United States, followed by other large-scale 5G commercial rollouts starting in 2019 in multiple geographies. Given these developments, we expect to see continued softness in the first half of 2018, followed by a much stronger second half.

We also see a clear path to market share gains this year given our success in 4G expansion, 5G deals, IP routing in both the service provider segment and adjacent markets, and optical, driven by 5G and webscale customers.

While our Networks gross margin in Q1 decreased on a year-on-year basis, the primary underlying reasons for that – regional and product mix – are largely temporary in nature and expected to improve in the second half of 2018. It is also important to understand that we did not see significant degradation of margins at the overall product level. We remain on track to deliver on our EUR 1.2 billion cost savings commitment.


Rajeev Suri
President and CEO

OUTLOOK

  Metric Guidance Commentary
Nokia Non-IFRS operating margin 9-11% for full year 2018 and

12-16% for full year 2020

Nokia expects non-IFRS operating margin and non-IFRS diluted earnings per share to expand between full year 2018 and full year 2020 primarily due to:

  1. Improved results in Nokia’s Networks business, which are detailed below;
  2. Improved results in Nokia Technologies, which are detailed below; and
  3. Lower Nokia support function costs within Nokia’s Networks business and Group Common and Other.
Non-IFRS diluted earnings per share EUR 0.23 – 0.27 in full year 2018 and

EUR 0.37 – 0.42 in full year 2020
Dividend Approximately 40% to 70% of non-IFRS EPS on a long-term basis Nokia’s Board of Directors is committed to proposing a growing dividend, including for 2018.
Recurring free cash flow Slightly positive in full year 2018 and clearly positive in full year 2020 Recurring free cash flow is expected to improve over the longer-term, due to lower cash outflows related to restructuring and network equipment swaps1 and improved operational results over time.
Recurring annual cost savings for Nokia, excluding Nokia Technologies Approximately EUR 1.2 billion of recurring annual cost savings in full year 2018, of which approximately EUR 800 million are expected from operating expenses1 The reference period is full year 2015, in which the combined operating expenses of Nokia and Alcatel-Lucent, excluding Nokia Technologies, were approximately EUR 7.3 billion.
As a result of active efforts to drive 5G adoption, and in the interest of our long-term strategy given the acceleration of 5G, in 2018 we expect to incur approximately EUR 100 to 200 million of temporary incremental expenses related to 5G customer trials that will partially reduce the positive impact from the recurring annual cost savings.
(This is an update to earlier commentary for approximately EUR 100 million of temporary incremental expenses.)
Network equipment swaps Approximately EUR 1.4 billion of charges and cash outflows in total1 The charges related to network equipment swaps are being recorded as non-IFRS exclusions, and therefore do not affect Nokia’s non-IFRS operating profit.
Non-IFRS financial income and expenses Expense of approximately EUR 300 million in full year 2018 and over the longer-term

Nokia’s outlook for non-IFRS financial income and expenses in full year 2018 and over the longer-term is expected to be influenced by factors including:

  • Net interest expenses related to interest-bearing liabilities and defined benefit pension and other post-employment benefit plans;
  • Foreign exchange fluctuations and hedging costs; and
  • Expenses related to the sale of receivables.
Non-IFRS tax rate Approximately 30% for full year 2018 and 25% over the longer-term Nokia’s outlook for non-IFRS tax rate for full year 2018 and over the longer-term is expected to be influenced by factors including the absolute level of profits, regional profit mix and any further changes to our operating model.
Nokia expects cash outflows related to taxes to be approximately EUR 450 million in full year 2018 and over the longer-term until Nokia’s US or Finnish deferred tax assets are fully utilized.
Capital expenditures Approximately EUR 700 million in full year 2018 and approximately EUR 600 million over the longer-term Primarily attributable to Nokia’s Networks business, and consistent with the depreciation of property, plant and equipment over the longer-term.


Nokia’s Networks business
Net sales Outperform its primary addressable market in 2018 and over the longer-term

(This is an update to earlier guidance for net sales to decline in-line with its primary addressable market in 2018.)
For Nokia’s Networks business, Nokia expects net sales to outperform its primary addressable market and operating margin to expand between full year 2018 and full year 2020.

Nokia’s outlook for net sales and operating margin for Nokia’s Networks business is expected to be influenced by factors including:

  • An approximately 1 to 3 percent decline in the primary addressable market for Nokia’s Networks business in full year 2018, compared to 2017, on a constant currency basis. 5G momentum is expected to drive growth in the primary addressable market in 2019 and 2020, on a constant currency basis.

(This is an update to earlier commentary for a 2 to 4 percent decline in full year 2018.);

  • Customer demand for 5G accelerating further, with commercial 5G network deployments expected to begin near the end of 2018.

(This is an update to earlier commentary for deployments to begin in 2019.);

  • Improved market conditions in the second half of 2018, particularly in North America, following expected weakness in the first half of 2018 (new commentary);
  • Our ability to scale our supply chain operations to meet increasing demand (new commentary);
  • A negative impact to reported net sales due to foreign exchange headwinds, particularly in first half 2018;
  • Focus on targeted growth opportunities in attractive adjacent markets;
  • Building a strong standalone software business;
  • Improved R&D productivity resulting from new ways of working and the reduction of legacy platforms over time;
  • Lower support function costs, including IT and site costs;
  • Uncertainty related to potential mergers or acquisitions by our customers;
  • Product and regional mix; and
  • Competitive and other industry dynamics.
Operating margin 6-9% for full year 2018 and 9-12% for full year 2020
Nokia Licensing within Nokia Technologies Recurring net sales Grow at a compound annual growth rate (CAGR) of approximately 10% over the 3-year period ending 2020

Due to risks and uncertainties in determining the timing and value of significant patent, brand and technology licensing agreements, Nokia believes it is not appropriate to provide annual outlook ranges for Nokia Licensing within Nokia Technologies. Although annual results are difficult to forecast, Nokia expects net sales growth and operating margin expansion over the 3-year period ending 2020.

In full year 2017, licensing net sales were approximately EUR 1.6 billion, of which approximately EUR 300 million were non-recurring in nature and related to catch-up net sales for prior years.

Nokia’s outlook for net sales and operating margin for Nokia Licensing within Nokia Technologies is expected to be influenced by factors including:

  • The timing and value of new patent licensing agreements with smartphone vendors, automotive companies and consumer electronics companies;
  • Renegotiation of expiring patent licensing agreements;
  • Increases or decreases in net sales related to existing patent licensees;
  • Results in brand and technology licensing;
  • Costs to protect and enforce our intellectual property rights; and
  • The regulatory landscape.
Operating margin Expand to approximately 85% for full year 2020

1For further details related to the cost savings and network equipment swaps guidance, please refer to the “Cost savings program”.


Nokia introduces a co-investment arrangement to executive compensation

In order to further increase alignment of management’s interests with shareholders and to maximize long-term shareholder value creation, the Board of Directors has decided to offer a co-investment arrangement, as part of the grants under the existing 2018 Performance Share Plan, to the President and CEO and a limited number of senior leaders in key positions whose contributions have a direct impact to the Company’s strategy and long-term value.

Under the co-investment arrangement, the participants will be offered a matching award of two 2018 Performance Shares for each Nokia share that they purchase voluntarily with their own funds from the open market, with the payout of the Performance Shares subject to actual performance. For each participant, the arrangement is offered in addition to their normal annual long-term incentive award, and the maximum investment value corresponds to their normal annual long-term incentive award set by the company.

This arrangement will not change existing shareholder authorizations to the Board of Directors nor the earlier disclosed dilution impact of the 2018 Nokia Equity Program. The related purchases of shares by the participants are expected to be executed mainly during Q2 and Q3 of 2018 and the shares purchased under the arrangement must be held until January 1, 2021 in order for the matching performance share award to vest.

Further information of the 2018 Performance Share Plan is available in the company’s stock exchange release concerning the 2018 Nokia Equity Program published on February 1, 2018.

NOKIA IN Q1 2018 – NON-IFRS

FINANCIAL DISCUSSION

The financial discussion included in this financial report of Nokia’s results comprises the results of Nokia’s businesses – Nokia’s Networks business and Nokia Technologies, as well as Group Common and Other. For more information on our reportable segments, please refer to note 3, “Segment information”, in the “Financial statement information” section in this report.

Year-on-year changes in non-IFRS net sales and non-IFRS operating profit

Nokia non-IFRS net sales decreased 9% year-on-year. On a constant currency basis, Nokia non-IFRS net sales would have been approximately flat year-on-year.

EUR million, non-IFRS Net sales % change Gross profit (R&D) (SG&A) Other income and (expenses) Operating profit Change in operating margin %
Networks business (578) (12)% (386) 47 23 34 (281) (560)bps
Nokia Technologies 118 48% 121 18 19 0 158 2 810bps
Group Common and Other (2) (1)% 10 5 6 1 21 800bps
Eliminations 3 0 0 0 0 0
Nokia (459) (9)% (255) 69 49 35 (102) (150)bps

On a year-on-year basis, foreign exchange fluctuations had a significantly negative impact on non-IFRS gross profit, a significantly positive impact on non-IFRS operating expenses and a slightly negative net impact on non-IFRS operating profit in the first quarter 2018.

Year-on-year changes in non-IFRS profit attributable to the equity holders of the parent

EUR million, non-IFRS Operating profit Financial income and expenses Taxes Profit Non-controlling interests Profit attributable to the equity holders of the parent
Nokia (102) (35) 12 (120) (9) (110)

Non-IFRS financial income and expenses

The net negative fluctuation in non-IFRS financial income and expenses was primarily due to interest expenses associated with the financial liability related to Nokia Shanghai Bell, higher losses from foreign exchange fluctuations and the inclusion of new items such as costs related to the sale of receivables and financing elements from customer and other contracts as a result of the adoption of new IFRS standards in the first quarter 2018. This was partially offset by lower interest expenses.

NOKIA IN Q1 2018 – REPORTED

FINANCIAL DISCUSSION

Year-on year changes in net sales and operating profit

Nokia net sales decreased 8% year-on-year. On a constant currency basis, Nokia net sales would have been approximately flat year-on-year.

EUR million Net Sales % change Gross profit (R&D) (SG&A) Other income and (expenses) Operating profit Change in operating margin %
Networks business (578) (12)% (386) 47 23 34 (281) (560)bps
Nokia Technologies 118 48% 121 18 19 0 158 2 810bps
Group Common and Other (2) (1)% 10 5 6 1 21 800bps
Eliminations 3 0 0 0 0 0
Non-IFRS exclusions 6 (55)% (64) 28 22 (94) (107)
Nokia (454) (8)% (320) 98 72 (58) (209) (440)bps

Year-on-year changes in profit attributable to the equity holders of the parent

EUR million Operating profit Financial income and expenses Taxes Profit Non-controlling interests Profit attributable to the equity holders of the parent
Nokia (209) 38 248 81 (40) 122

Financial income and expenses

The net positive fluctuation in financial income and expenses was primarily due to the absence of expenses related to Nokia’s tender offer to repurchase certain bonds, which negatively affected the first quarter 2017, and lower interest expenses. This was partially offset by higher losses from foreign exchange fluctuations, expenses associated with the financial liability related to Nokia Shanghai Bell and the inclusion of new items such as costs related to the sale of receivables and financing elements from customer and other contracts as a result of the adoption of new IFRS standards in the first quarter 2018.

Taxes

The change in taxes was primarily due to the absence of a EUR 245 million tax expense, which negatively affected the first quarter 2017.

Non-IFRS exclusions in Q1 2018

Non-IFRS exclusions consist of costs related to the acquisition of Alcatel-Lucent and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges and certain other items that may not be indicative of Nokia’s underlying business performance. For additional details, please refer to note 2, “Non-IFRS to reported reconciliation”, in the “Financial statement information” section in this report.

Cost savings program

The following table summarizes the financial information related to our cost savings program, as of the end of the first quarter 2018. Balances related to previous Nokia and Alcatel-Lucent restructuring and cost savings programs have been included as part of this overall cost savings program as of the second quarter 2016.

 In EUR million, approximately Q1’18
Opening balance of restructuring and associated liabilities 810
 + Charges in the quarter 140
 – Cash outflows in the quarter 120
 = Ending balance of restructuring and associated liabilities 830
  of which restructuring provisions 740
  of which other associated liabilities 90
Total expected restructuring and associated charges 1 900
 – Cumulative recorded 1 460
 = Charges remaining to be recorded 440
Total expected restructuring and associated cash outflows 2 250
 – Cumulative recorded 1 080
 = Cash outflows remaining to be recorded 1 170

The following table summarizes our full year 2016 and 2017 results and future expectations related to our cost savings program and network equipment swaps.

Actual Actual Actual Expected amounts for
In EUR million, approximately
rounded to the nearest EUR 50 million
2016 2017 Cumulative through the end of 2017 FY 2018
as of the end of
FY 2019 and beyond
as of the end of
Total
as of the end of
Q4’17 Q1’18 Q4’17 Q1’18 Q4’17 Q1’18
Recurring annual cost savings 550 250 800 400 400 0 0 1 200 1 200
 – operating expenses 350 150 500 300 300 0 0 800 800
 – cost of sales 200 100 300 100 100 0 0 400 400
Restructuring and associated charges 750 550 1 300 600 600 0 0 1 900 1 900
Restructuring and associated cash outflows 400 550 950 650 650 650 650 2 250 2 250
Charges related to network equipment swaps 150 450 600 650 650 150 150 1 400 1 400
Cash outflows related to network equipment swaps 150 450 600 650 650 150 150 1 400 1 400

On a cumulative basis, Nokia continues to be on track to achieve the targeted EUR 1.2 billion of recurring annual cost savings in full year 2018.


RISKS AND FORWARD-LOOKING STATEMENTS

It should be noted that Nokia and its businesses are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements, including, without limitation, those regarding: A) our ability to integrate acquired businesses into our operations and achieve the targeted business plans and benefits, including targeted benefits, synergies, cost savings and efficiencies; B) expectations, plans or benefits related to our strategies and growth management; C) expectations, plans or benefits related to future performance of our businesses; D) expectations, plans or benefits related to changes in organizational and operational structure; E) expectations regarding market developments, general economic conditions and structural changes; F) expectations and targets regarding financial performance, results, operating expenses, taxes, currency exchange rates, hedging, cost savings and competitiveness, as well as results of operations including targeted synergies and those related to market share, prices, net sales, income and margins; G) expectations, plans or benefits related to any future collaboration or to business collaboration agreements or patent license agreements or arbitration awards, including income to be received under any collaboration or partnership, agreement or award; H) timing of the deliveries of our products and services; I) expectations and targets regarding collaboration and partnering arrangements, joint ventures or the creation of joint ventures, and the related administrative, legal, regulatory and other conditions, as well as our expected customer reach; J) outcome of pending and threatened litigation, arbitration, disputes, regulatory proceedings or investigations by authorities; K) expectations regarding restructurings, investments, capital structure optimization efforts, uses of proceeds from transactions, acquisitions and divestments and our ability to achieve the financial and operational targets set in connection with any such restructurings, investments, capital structure optimization efforts, divestments and acquisitions; and L) statements preceded by or including “believe”, “expect”, “anticipate”, “foresee”, “sees”, “target”, “estimate”, “designed”, “aim”, “plans”, “intends”, “focus”, “continue”, “project”, “should”, “is to”, “will” or similar expressions. These statements are based on management’s best assumptions and beliefs in light of the information currently available to it. Because they involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors, including risks and uncertainties that could cause these differences include, but are not limited to: 1) our strategy is subject to various risks and uncertainties and we may be unable to successfully implement our strategic plans, sustain or improve the operational and financial performance of our business groups, correctly identify or successfully pursue business opportunities or otherwise grow our business; 2) general economic and market conditions and other developments in the economies where we operate; 3) competition and our ability to effectively and profitably invest in new competitive high-quality products, services, upgrades and technologies and bring them to market in a timely manner; 4) our dependence on the development of the industries in which we operate, including the cyclicality and variability of the information technology and telecommunications industries; 5) our dependence on a limited number of customers and large multi-year agreements; 6) our ability to maintain our existing sources of intellectual property-related revenue, establish new sources of revenue and protect our intellectual property from infringement; 7) our global business and exposure to regulatory, political or other developments in various countries or regions, including emerging markets and the associated risks in relation to tax matters and exchange controls, among others; 8) our ability to achieve the anticipated benefits, synergies, cost savings and efficiencies of acquisitions, including the acquisition of Alcatel Lucent, and our ability to implement changes to our organizational and operational structure efficiently; 9) our ability to manage and improve our financial and operating performance, cost savings, competitiveness and synergies generally and after the acquisition of Alcatel Lucent; 10) exchange rate fluctuations, as well as hedging activities; 11) our ability to successfully realize the expectations, plans or benefits related to any future collaboration or business collaboration agreements and patent license agreements or arbitration awards, including income to be received under any collaboration, partnership, agreement or arbitration award; 12) our dependence on IPR technologies, including those that we have developed and those that are licensed to us, and the risk of associated IPR-related legal claims, licensing costs and restrictions on use; 13) our exposure to direct and indirect regulation, including economic or trade policies, and the reliability of our governance, internal controls and compliance processes to prevent regulatory penalties in our business or in our joint ventures; 14) our reliance on third-party solutions for data storage and service distribution, which expose us to risks relating to security, regulation and cybersecurity breaches; 15) inefficiencies, breaches, malfunctions or disruptions of information technology systems; 16) Nokia Technologies’ ability to generate net sales and profitability through licensing of the Nokia brand, technology licensing and the development and sales of products and services for instance in digital health, as well as other business ventures, which may not materialize as planned; 17) our exposure to various legal frameworks regulating corruption, fraud, trade policies, and other risk areas, and the possibility of proceedings or investigations that result in fines, penalties or sanctions; 18) adverse developments with respect to customer financing or extended payment terms we provide to customers; 19) the potential complex tax issues, tax disputes and tax obligations we may face in various jurisdictions, including the risk of obligations to pay additional taxes; 20) our actual or anticipated performance, among other factors, which could reduce our ability to utilize deferred tax assets; 21) our ability to retain, motivate, develop and recruit appropriately skilled employees; 22) disruptions to our manufacturing, service creation, delivery, logistics and supply chain processes, and the risks related to our geographically-concentrated production sites; 23) the impact of litigation, arbitration, agreement-related disputes or product liability allegations associated with our business; 24) our ability to re-establish investment grade rating or maintain our credit ratings; 25) our ability to achieve targeted benefits from, or successfully implement planned transactions, as well as the liabilities related thereto; 26) our involvement in joint ventures and jointly-managed companies; 27) the carrying amount of our goodwill may not be recoverable; 28) uncertainty related to the amount of dividends and equity return we are able to distribute to shareholders for each financial period; 29) pension costs, employee fund-related costs, and healthcare costs; and 30) risks related to undersea infrastructure, as well as the risk factors specified on pages 71 to 89 of our 2017 annual report on Form 20-F published on March 22, 2018 under “Operating and financial review and prospects-Risk factors” and in our other filings or documents furnished with the U.S. Securities and Exchange Commission. Other unknown or unpredictable factors or underlying assumptions subsequently proven to be incorrect could cause actual results to differ materially from those in the forward-looking statements. We do not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

The financial report was authorized for issue by management on April 25, 2018.

  • Nokia’s Annual General Meeting 2018 is planned to be held on May 30, 2018.
  • Nokia plans to publish its second quarter and half year 2018 results on July 26, 2018.
  • Nokia plans to publish its third quarter and January-September 2018 results on October 25, 2018.


Media Enquiries:
Nokia
Communications
Tel. +358 (0) 10 448 4900
Email: press.services@nokia.com
Jon Peet, Vice President, Corporate Communications

Investor Enquiries:
Nokia Investor Relations
Tel. +358 4080 3 4080
Email: investor.relations@nokia.com


About Nokia

We create the technology to connect the world. Powered by the research and innovation of Nokia Bell Labs, we serve communications service providers, governments, large enterprises and consumers, with the industry’s most complete, end-to-end portfolio of products, services and licensing.

We adhere to the highest ethical business standards as we create technology with social purpose, quality and integrity. Nokia is enabling the infrastructure for 5G and the Internet of Things to transform the human experience www.nokia.com

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