27th Jan 2011 10:02
Nokia / Final Results 27.01.2011 12:02 Dissemination of a UK Regulatory Announcement, transmitted byDGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- Nokia 2010 net sales EUR 42.4 billion, non-IFRS EPS EUR 0.61 (reported EPS EUR0.50) Nokia Board of Directors will propose a dividend of EUR 0.40 per share for 2010(EUR 0.40 per share for 2009). Nokia CorporationInterim ReportJanuary 27, 2011 at 13.00 (CET +1) This is a summary of the fourth quarter and annual results 2010 interim reportpublished today. The complete fourth quarter and annual results 2010 interimreport, including the full year 2010 information and tables, is available athttp://www.nokia.com/results/Nokia_results2010Q4e.pdf. Investors should notrely on summaries of our interim reports only, but should review the completeinterim reports with tables. Non-IFRS fourth quarter 2010 results1 Non-IFRS full year 2010 results1 --------------------------------------------------------------------------------EUR million Q4/201 Q4/200 YoY Q3/201 QoQ 2010 2009 YoY 0 9 Change 0 Change Change--------------------------------------------------------------------------------Net sales 12 653 11 988 6% 10 271 23% 42 451 40 987 4%--------------------------------------------------------------------------------Devices & 8 501 8 179 4% 7 174 18% 29 138 27 853 5%Services --------------------------------------------------------------------------------NAVTEQ 309 225 37% 252 23% 1 003 673 49%--------------------------------------------------------------------------------Nokia Siemens 3 961 3 625 9% 2 943 35% 12 661 12 574 1%Networks -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Operating 1 090 1 473 -26% 634 72% 3 204 3 503 -9%profit --------------------------------------------------------------------------------Devices & 961 1 257 -24% 750 28% 3 162 3 488 -9%Services --------------------------------------------------------------------------------NAVTEQ 100 54 85% 74 35% 265 121 119%--------------------------------------------------------------------------------Nokia Siemens 145 201 -28% -116 95 28 239%Networks -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Operating 8.6% 12.3% 6.2% 7.5% 8.5% margin --------------------------------------------------------------------------------Devices & 11.3% 15.4% 10.5% 10.9% 12.5% Services --------------------------------------------------------------------------------NAVTEQ 32.4% 24.0% 29.4% 26.4% 18.0% --------------------------------------------------------------------------------Nokia Siemens 3.7% 5.5% -3.9% 0.8% 0.2% Networks -------------------------------------------------------------------------------- --------------------------------------------------------------------------------EPS, EUR 0.22 0.25 -12% 0.14 57% 0.61 0.66 -8%Diluted -------------------------------------------------------------------------------- Reported fourth quarter 2010 results Reported full year 2010 results --------------------------------------------------------------------------------EUR million Q4/201 Q4/200 YoY Q3/201 QoQ 2010 2009 YoY 0 9 Change 0 Change Change--------------------------------------------------------------------------------Net sales 12 651 11 988 6% 10 270 23% 42 446 40 984 4%--------------------------------------------------------------------------------Devices & 8 499 8 179 4% 7 173 18% 29 134 27 853 5%Services --------------------------------------------------------------------------------NAVTEQ 309 225 37% 252 23% 1 002 670 50%--------------------------------------------------------------------------------Nokia Siemens 3 961 3 625 9% 2 943 35% 12 661 12 574 1%Networks -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Operating 884 1 141 -23% 403 119% 2 070 1 197 73%profit --------------------------------------------------------------------------------Devices & 1 018 1 219 -16% 807 26% 3 299 3 314 -0.5%Services --------------------------------------------------------------------------------NAVTEQ -19 -56 -48 -225 -344 --------------------------------------------------------------------------------Nokia Siemens 1 17 -94% -282 -686 -1 639 Networks -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Operating 7.0% 9.5% 3.9% 4.9% 2.9% margin --------------------------------------------------------------------------------Devices & 12.0% 14.9% 11.3% 11.3% 11.9% Services --------------------------------------------------------------------------------NAVTEQ -6.1% -24.9% -19.0% -22.5% -51.3% --------------------------------------------------------------------------------Nokia Siemens 0.0% 0.5% -9.6% -5.4% -13.0% Networks -------------------------------------------------------------------------------- --------------------------------------------------------------------------------EPS, EUR 0.20 0.26 -23% 0.14 43% 0.50 0.24 108%Diluted --------------------------------------------------------------------------------Note 1 relating to non-IFRS results:Non-IFRS results exclude special items forall periods. In addition, non-IFRS results exclude intangible assetamortization, other purchase price accounting related items and inventory valueadjustments arising from i) the formation of Nokia Siemens Networks and ii) allbusiness acquisitions completed after June 30, 2008. More specific informationabout the exclusions from the non-IFRS results may be found in our completeinterim report with tables on pages 3-4, 13-15 and 18 for the quarterly periodsand pages 28-30 and 32 for the full year 2010 and 2009. Nokia believes that these non-IFRS financial measures provide meaningfulsupplemental information to both management and investors regarding Nokia'sperformance by excluding the above-described items that may not be indicativeof Nokia's business operating results. These non-IFRS financial measures shouldnot be viewed in isolation or as substitutes to the equivalent IFRS measure(s),but should be used in conjunction with the most directly comparable IFRSmeasure(s) in the reported results. A reconciliation of the non-IFRS results toour reported results for Q4 2010 and Q4 2009 as well as for full year 2010 and2009 can be found in the tables on pages 11, 13-16 and 27-32 of our completeinterim report with tables. A reconciliation of our Q3 2010 non-IFRS resultscan be found on pages 12-13 and 15-19 of our Q3 2010 complete interim reportwith tables that was published on October 21, 2010. FOURTH QUARTER 2010 HIGHLIGHTS- Nokia net sales of EUR 12.7 billion in Q4 2010, up 6% year-on-year and 23%sequentially (flat and up 24% at constant currency). - Devices & Services net sales of EUR 8.5 billion in Q4 2010, up 4%year-on-year and 18% sequentially (down 3% and up 19% at constant currency). - Services net sales of EUR 201 million in Q4 2010, up 21% year-on-year and 26%sequentially; billings of EUR 352 million, up 57% year-on-year and 8%sequentially. - Nokia total mobile device volumes of 123.7 million units in Q4 2010, down 3%year-on-year and up 12% sequentially. - Nokia converged mobile device (smartphone and mobile computer) volumes of28.3 million units in Q4 2010, up 36% year-on-year and 7% sequentially. - Nokia mobile device ASP (including services revenue) of EUR 69 in Q4 2010, upfrom EUR 64 in Q4 2009 and EUR 65 in Q3 2010. - Devices & Services gross margin of 29.2% in Q4 2010, down from 34.3% in Q42009 and up from 29.0% in Q3 2010. - Devices & Services non-IFRS operating margin of 11.3% in Q4 2010, down from15.4% in Q4 2009 and up from 10.5% in Q3 2010. - NAVTEQ net sales of EUR 309 million in Q4 2010, up 37% year-on-year and 23%sequentially (up 33% and 27% at constant currency). - Nokia Siemens Networks net sales of EUR 4.0 billion in Q4 2010, up 9%year-on-year and 35% sequentially (up 7% and 37% at constant currency). - Nokia Siemens Networks non-IFRS operating margin of 3.7% in Q4 2010, downfrom 5.5% in Q4 2009 and up from -3.9% in Q3 2010. - Nokia operating cash flow of EUR 2.4 billion and cash generated fromoperations of EUR 2.5 billion in Q4 2010. - Total cash and other liquid assets of EUR 12.3 billion and net cash and otherliquid assets of EUR 7.0 billion at the end of Q4 2010. - Nokia taxes continued to be unfavorably impacted by Nokia Siemens Networkstaxes as no tax benefits are recognized for certain Nokia Siemens Networksdeferred tax items. In Q4 2010, this was more than offset by a favorable profitmix and certain current quarter benefits both in Devices & Services and inNokia Siemens Networks taxes. If Nokia's estimated long-term tax rate of 26%had been applied, non-IFRS Nokia EPS would have been approximately 2.5 Eurocents lower in Q4 2010. FULL YEAR 2010 HIGHLIGHTS- Based on Nokia's preliminary estimate, industry mobile device volumesincreased 13% in 2010, compared to 2009 (based on Nokia's revised definition ofthe industry mobile device market applicable beginning in 2010). - Based on Nokia's preliminary market estimate, Nokia's mobile device volumemarket share decreased to 32% in 2010, compared to 34% in 2009 (based onNokia's revised definition of the industry mobile device market shareapplicable beginning in 2010). - Nokia's estimated mobile device value market share was down slightly in 2010,compared to 2009. - Nokia's non-IFRS operating expenses in Devices & Services were approximatelyEUR 5.6 billion in 2010, compared to EUR 5.8 billion in 2009. - Devices & Services non-IFRS operating margin was 10.9% in 2010, compared to12.5% in 2009. - Based on preliminary estimates, Nokia and Nokia Siemens Networks believe themarket for mobile and fixed infrastructure and related services wasapproximately flat in Euro terms in 2010, compared to 2009. - Based on preliminary estimates, Nokia and Nokia Siemens Networks believeNokia Siemens Networks grew slightly faster than the market in Euro terms in2010, compared to 2009. - Nokia Siemens Networks non-IFRS operating margin of 0.8% in 2010, compared to0.2% in 2009. STEPHEN ELOP, NOKIA CEO:'In Q4 we delivered solid performance across all three of our businesses, andgenerated outstanding cash flow. Additionally, growth trends in the mobiledevices market continue to be encouraging. Yet, Nokia faces some significantchallenges in our competitiveness and our execution. In short, the industrychanged, and now it's time for Nokia to change faster.' NOKIA OUTLOOK- Nokia expects Devices & Services net sales to be between EUR 6.8 billion andEUR 7.3 billion in the first quarter 2011. - Nokia expects its non-IFRS operating margin in Devices & Services to bebetween 7% and 10% in the first quarter 2011. - Nokia and Nokia Siemens Networks expect Nokia Siemens Networks' net sales tobe between EUR 2.8 billion and EUR 3.1 billion in the first quarter 2011. - Nokia and Nokia Siemens Networks expect the non-IFRS operating margin inNokia Siemens Networks to be between -3% and breakeven in the first quarter2011. Nokia will hold a Strategy and Financial Briefing in London on February 11,2011. In connection with that event, Nokia plans to discuss its strategy andobjectives going forward. FOURTH QUARTER 2010 FINANCIAL HIGHLIGHTSThe non-IFRS results exclusionsQ4 2010 ? EUR 206 million (net) consisting of:- EUR 28 million restructuring charge and other associated items in NokiaSiemens Networks - EUR 85 million restructuring charges in Devices & Services- EUR 147 million gain on sale of wireless modem business in Devices & Services- EUR 116 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia Siemens Networks - EUR 119 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ - EUR 5 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of OZ Communications, Novarra andMotally in Devices & Services Q4 2010 taxes ? EUR 52 million non-cash tax benefit from reassessment ofrecoverability deferred tax assets in Nokia Siemens Networks Q3 2010 ? EUR 231 million (net) consisting of:- EUR 61 million prior years-related refund of customs duties- EUR 49 million restructuring charge and other associated items in NokiaSiemens Networks - EUR 117 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia Siemens Networks - EUR 122 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ - EUR 4 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of OZ Communications, Novarra,MetaCarta and Motally in Devices & Services Q3 2010 taxes ? EUR 127 million prior years-related non-cash benefit from Q32010 changes in dividend withholding tax legislation in certain jurisdictionswith retroactive effects Q4 2009 ? EUR 332 million (net) consisting of:- EUR 89 million restructuring charge and other one-time items in Nokia SiemensNetworks - EUR 22 million gain on sale of real estate in Nokia Siemens Networks- EUR 36 million restructuring charge in Devices & Services- EUR 117 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia Siemens Networks - EUR 110 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ - EUR 2 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of OZ Communications in Devices &Services Q4 2009 taxes ? EUR 213 million non-cash positive effect from development andoutcome of various prior year items impacting Nokia taxes Non-IFRS results exclude special items for all periods. In addition, non-IFRSresults exclude intangible asset amortization, other purchase price accountingrelated items and inventory value adjustments arising from i) the formation ofNokia Siemens Networks and ii) all business acquisitions completed after June30, 2008. Nokia GroupNokia's fourth quarter 2010 net sales increased 6% to EUR 12.7 billion,compared with EUR 12.0 billion in the fourth quarter 2009, and increased 23%compared with EUR 10.3 billion in the third quarter 2010. At constant currency,group net sales would have been flat year-on-year and increased 24%sequentially. The following chart sets out the year-on-year and sequential growth rates inour net sales on a reported basis and at constant currency for the periodsindicated. FOURTH QUARTER 2010 NET SALES, REPORTED & CONSTANT CURRENCY1 ------------------------------------------------------------------------------ YoY Change QoQ Change-----------------------------------------------------------------------------Group net sales - reported 6% 23%-----------------------------------------------------------------------------Group net sales - constant currency1 0% 24%-----------------------------------------------------------------------------Devices & Services net sales - reported 4% 18%-----------------------------------------------------------------------------Devices & Services net sales - constant currency1 -3% 19%-----------------------------------------------------------------------------NAVTEQ net sales - reported 37% 23%-----------------------------------------------------------------------------NAVTEQ net sales - constant currency1 33% 27%-----------------------------------------------------------------------------Nokia Siemens Networks net sales - reported 9% 35%-----------------------------------------------------------------------------Nokia Siemens Networks net sales - constant currency1 7% 37%-----------------------------------------------------------------------------Note 1:Change in net sales at constant currency excludes the impact of changesin exchange rates in comparison to the Euro, our reporting currency. Nokia's fourth quarter 2010 reported operating profit was EUR 884 million,compared with an operating profit of EUR 1 141 million in the fourth quarter2009 and an operating profit of EUR 403 million in the third quarter 2010.Nokia's fourth quarter 2010 reported operating margin was 7.0%, compared with9.5% in the fourth quarter 2009 and 3.9% in the third quarter 2010. Nokia'sfourth quarter 2010 non-IFRS operating profit was EUR 1 090 million, comparedwith EUR 1 473 million in the fourth quarter 2009 and EUR 634 million in thethird quarter 2010. Nokia's fourth quarter 2010 non-IFRS operating margin was8.6%, compared with 12.3% in the fourth quarter 2009 and 6.2% in the thirdquarter 2010. The year-on-year decrease in Nokia's non-IFRS operating marginresulted from a decline in Devices & Services and Nokia Siemens Networks'non-IFRS operating margins that were only partially offset by an increase inNAVTEQ's non-IFRS operating margin. The sequential increase in Nokia's non-IFRSoperating margin reflected improved non-IFRS operating margin in all threereportable segments. The following chart sets out Nokia Group's cash flow (for the periodsindicated) and financial position (at the end of the periods indicated), aswell as the year-on-year and sequential growth rates. NOKIA GROUP CASH FLOW AND FINANCIAL POSITION --------------------------------------------------------------------------------- EUR million Q4/2010 Q4/2009 YoY Q3/2010 QoQ Change Change --------------------------------------------------------------------------------Cash generated from operations 2 492 1 288 93% 1 206 107%--------------------------------------------------------------------------------Operating cash flow1 2 436 1 535 59% 439 455%--------------------------------------------------------------------------------Total cash and other liquid 12 275 8 873 38% 10 235 20%assets --------------------------------------------------------------------------------Net cash and other liquid 6 996 3 670 91% 4 375 60%assets2 --------------------------------------------------------------------------------Net debt-equity ratio -43% -25% -29% (gearing) --------------------------------------------------------------------------------Note 1:Net cash from operating activities.Note 2: Total cash and other liquid assets minus interest-bearing liabilities. Year-on-year and sequentially, the increase in operating cash flow wasprimarily driven by net working capital improvements in both Devices & Servicesand Nokia Siemens Networks. Approximately EUR 600 million of these net workingcapital improvements were driven by the timing of customer payments andvalue-added tax refunds, which were received in Q4 2010 instead of subsequentperiods. In addition, on a sequential basis, we did not experience the cashoutflows related to foreign exchange hedging activities that we had in thethird quarter 2010, and our operating cash flow also benefited from improvednet profit. Both total as well as net cash and other liquid assets increased in the fourthquarter 2010 as a result of positive overall cash generation. Devices & ServicesNet Sales.The following chart sets out our Devices & Services net sales for theperiods indicated, as well as the year-on-year and sequential growth rates, bycategory. DEVICES & SERVICES NET SALES BY CATEGORY -----------------------------------------------------------------------------EUR million Q4/2010 Q4/2009 YoY Change Q3/2010 QoQ Change----------------------------------------------------------------------------Mobile phones1 4 092 4 294 -5% 3 560 15%----------------------------------------------------------------------------Converged mobile devices2 4 407 3 885 13% 3 613 22%----------------------------------------------------------------------------Total 8 499 8 179 4% 7 173 18%----------------------------------------------------------------------------Note 1:Series 30 and Series 40-based devices ranging from basic mobile phonesfocused on voice capability to devices with a number of additionalfunctionalities, such as Internet connectivity, including the services andaccessories sold with them. Note 2: Smartphones and mobile computers, including the services andaccessories sold with them. The following chart sets out Devices & Services net sales for the periodsindicated, as well as the year-on-year and sequential growth rates, bygeographic area. DEVICES & SERVICES NET SALES BY GEOGRAPHIC AREA ------------------------------------------------------------------------EUR million Q4/2010 Q4/2009 YoY Change Q3/2010 QoQ Change-----------------------------------------------------------------------Europe 3 088 3 153 -2% 2 289 35%-----------------------------------------------------------------------Middle East & Africa 1 177 1 148 3% 930 27%-----------------------------------------------------------------------Greater China 1 682 1 243 35% 1 654 2%-----------------------------------------------------------------------Asia-Pacific 1 603 1 783 -10% 1 504 7%-----------------------------------------------------------------------North America 233 257 -9% 226 3%-----------------------------------------------------------------------Latin America 715 595 20% 570 25%-----------------------------------------------------------------------Total 8 499 8 179 4% 7 173 18%-----------------------------------------------------------------------Year-on-year, the 4% net sales increase resulted from higher ASPs partiallyoffset by lower device volumes in most regions. Our device volumes in thefourth quarter 2010 were adversely affected by shortages of certain components,which we expect to continue to impact our business at least through the end ofthe first quarter 2011, as well as by a number of supply and logisticschallenges driven by the tight component availability during the quarter.Sequentially, the 18% net sales increase reflected higher ASPs, as well ashigher device volumes in most regions, partially offset by a number of supplyand logistics challenges driven by the tight component availability during thefourth quarter 2010. At constant currency, Devices & Services net sales wouldhave decreased 3% year-on-year and increased 19% sequentially. Of our total Devices & Services net sales, services contributed EUR 201 millionin the fourth quarter 2010, compared with EUR 166 million in the fourth quarter2009 and EUR 159 million in the third quarter 2010. Services billings in thefourth quarter 2010 were EUR 352 million, compared with EUR 224 million in thefourth quarter 2009 and EUR 325 million in the third quarter 2010. Volume and Market Share.The following chart sets out our Devices & Servicesvolumes for the periods indicated, as well as the year-on-year and sequentialgrowth rates, by category. DEVICES & SERVICES MOBILE DEVICE VOLUMES BY CATEGORY -----------------------------------------------------------------------------million units Q4/2010 Q4/2009 YoY Change Q3/2010 QoQ Change----------------------------------------------------------------------------Mobile phones1 95.4 106.1 -10% 83.9 14%----------------------------------------------------------------------------Converged mobile devices2 28.3 20.8 36% 26.5 7%----------------------------------------------------------------------------Total 123.7 126.9 -3% 110.4 12%----------------------------------------------------------------------------Note 1:Series 30 and Series 40-based devices ranging from basic mobile phonesfocused on voice capability to devices with a number of additionalfunctionalities, such as Internet connectivity, including the services andaccessories sold with them. Note 2: Smartphones and mobile computers, including the services andaccessories sold with them. In the fourth quarter 2010, the overall industry mobile device volumes were 402million units, based on Nokia's preliminary estimate, representing an increaseof 12% year-on-year and 11% sequentially. Nokia's preliminary estimated mobiledevice market share was 31% in the fourth quarter 2010, down from an estimated35% in the fourth quarter 2009 and up from an estimated 30% in the thirdquarter 2010 (based on Nokia's revised definition of the industry mobile devicemarket share applicable beginning in 2010 and applied retrospectively to 2009for comparative purposes only). Of the total industry mobile device volumes, converged mobile device industryvolumes in the fourth quarter 2010 increased to 90.5 million units, based onNokia's preliminary estimate, representing an increase of 73% year-on-year and29% sequentially. Nokia's preliminary estimated share of the converged mobiledevice market was 31% in the fourth quarter 2010, compared with an estimated40% in the fourth quarter 2009 and an estimated 38% in the third quarter 2010. The following chart sets out our mobile device volumes for the periodsindicated, as well as the year-on-year and sequential growth rates, bygeographic area. DEVICES & SERVICES MOBILE DEVICE VOLUMES BY GEOGRAPHIC AREA ------------------------------------------------------------------------million units Q4/2010 Q4/2009 YoY Change Q3/2010 QoQ Change-----------------------------------------------------------------------Europe 33.5 34.3 -2% 29.2 15%-----------------------------------------------------------------------Middle East & Africa 22.2 24.3 -9% 18.4 21%-----------------------------------------------------------------------Greater China 21.9 17.6 24% 20.2 8%-----------------------------------------------------------------------Asia-Pacific 31.3 34.5 -9% 27.8 13%-----------------------------------------------------------------------North America 2.6 3.8 -32% 3.2 -19%-----------------------------------------------------------------------Latin America 12.2 12.4 -2% 11.6 5%-----------------------------------------------------------------------Total 123.7 126.9 -3% 110.4 12%-----------------------------------------------------------------------Nokia's 3% year-on-year decrease in global mobile device volumes during thefourth quarter 2010 was driven primarily by the intense competitiveenvironment, as well as certain component shortages and a number of supply andlogistics challenges resulting from the tight component availability during thequarter. This volume decline was somewhat offset by a year-on-year improvementin the overall market environment. On a sequential basis, Nokia's 12% increasein global mobile device volumes was primarily due to increased seasonal demandfor our devices offset to some extent by a number of supply and logisticschallenges driven by the tight component availability during the fourth quarter2010. Average Selling Price.The following chart sets out our Devices & Services ASPfor the periods indicated, as well as the year-on-year and sequential growthrates, by category. DEVICES & SERVICES AVERAGE SELLING PRICE BY CATEGORY -----------------------------------------------------------------------------EUR Q4/2010 Q4/2009 YoY Change Q3/2010 QoQ Change----------------------------------------------------------------------------Mobile phones1 43 40 6% 42 1%----------------------------------------------------------------------------Converged mobile devices2 156 186 -16% 136 15%----------------------------------------------------------------------------Total 69 64 7% 65 6%----------------------------------------------------------------------------Note 1: Series 30 and Series 40-based devices ranging from basic mobile phonesfocused on voice capability to devices with a number of additionalfunctionalities, such as Internet connectivity, including the services andaccessories sold with them. Note 2: Smartphones and mobile computers, including the services andaccessories sold with them. The year-on-year 7% increase in our ASP was primarily due to converged mobiledevices representing a greater proportion of our overall mobile device salesand the appreciation of certain currencies against the Euro, offset to someextent by general price erosion and a higher proportion of lower-pricedconverged mobile device sales. On a sequential basis, the 6% increase in ourASP was primarily driven by an increased proportion of sales of higher pricedconverged mobile devices and foreign exchange hedging, offset to some extent bythe depreciation of certain currencies against the Euro. The 17% year-on-yeardecline in our converged mobile devices ASPs was mainly driven by general priceerosion and an increase in the proportion of lower-priced converged mobiledevices sales. The 14% sequential increase in our converged mobile devices ASPswas mainly driven by an increased proportion of sales of higher pricesconverged mobile devices during the fourth quarter 2010. Profitability.Devices & Services gross profit (reported and non-IFRS) decreased12% to EUR 2.5 billion, compared with EUR 2.8 billion in the fourth quarter2009, and increased 19% compared to EUR 2.1 billion in the third quarter 2010.The gross margin (reported and non-IFRS) was 29.2% in the fourth quarter 2010,compared with 34.3% in the fourth quarter 2009 and 29.0% in the third quarter2010. The year-on-year gross margin decline was primarily due to material costerosion being less - driven by both shortages of certain components and theappreciation of certain currencies against the Euro - than general productprice erosion, as well as a negative impact from foreign exchange hedging. Theimpact of these factors was offset to some extent by converged mobile devicesrepresenting a greater proportion of our overall mobile device volumes.Sequentially, the gross margin increase was primarily due to an increasedproportion of sales of higher priced mobile devices and the depreciation ofcertain currencies against the Euro, offset to a large extent by a negativeone-quarter impact from foreign exchange hedging as well as lower royaltyincome in the fourth quarter 2010. Nokia sees shortages of certain componentsimpacting our business at least through the end of first quarter 2011. Devices & Services reported operating profit decreased 16% to EUR 1 018million, compared with EUR 1 219 million in the fourth quarter 2009, andincreased 26% compared with EUR 807 million in the third quarter 2010. Thereported operating margin was 12.0% in the fourth quarter 2010, compared with14.9% in the fourth quarter 2009 and 11.3% in the third quarter 2010. Devices &Services non-IFRS operating profit decreased 24% to EUR 961 million comparedwith EUR 1 257 million in the fourth quarter 2009, and increased 28% comparedwith EUR 750 million in the third quarter 2010. The non-IFRS operating marginwas 11.3% in the fourth quarter 2010, compared with 15.4% in the fourth quarter2009 and 10.5% in the third quarter 2010. The year-on-year decrease in non-IFRSoperating profit was driven primarily by the lower gross margin. Sequentially,the increase in non-IFRS operating profit was primarily due to higher netsales, offset to some extent by higher operating expenses. NAVTEQNet Sales.Fourth quarter 2010 NAVTEQ reported net sales increased 37%year-on-year to EUR 309 million, compared with EUR 225 million in the fourthquarter 2009, and increased 23% compared to EUR 252 million in the thirdquarter 2010. The year-on-year and sequential increase in reported net saleswas primarily driven by improved sales of map licenses to mobile devicecustomers as well as higher navigation uptake rates in the automotive industry.Sequentially, net sales also benefited from a stronger market for personalnavigation devices (PNDs). At constant currency, NAVTEQ net sales would haveincreased 33% year-on-year and 27% sequentially. Profitability.In the fourth quarter 2010, NAVTEQ's gross profit (reported andnon-IFRS) increased 37% to EUR 271 million, compared with EUR 195 million inthe fourth quarter 2009, and increased 27% compared with EUR 213 million in thethird quarter 2010. NAVTEQ's gross margin (reported and non-IFRS) increased to87.7%, compared to a reported gross margin of 86.7% and a non-IFRS gross marginof 87.1% in the fourth quarter 2009, and 84.5% (reported and non-IFRS) in thethird quarter 2010. In the fourth quarter 2010, NAVTEQ's reported operating loss decreased to EUR19 million, compared with a EUR 56 million loss in the fourth quarter 2009 anda EUR 48 million loss in the third quarter 2010. The reported operating marginwas -6.1% in the fourth quarter 2010, compared with -24.9% in the fourthquarter 2009 and -19.0% in the third quarter 2010. NAVTEQ's non-IFRS operatingprofit was EUR 100 million, compared with EUR 54 million in the fourth quarter2009 and EUR 74 million in the third quarter 2010. The non-IFRS operatingmargin was 32.4% in the fourth quarter 2010, compared with 24.0% in the fourthquarter 2009 and 29.4% in the third quarter 2010. The year-on-year andsequential increase in NAVTEQ's non-IFRS operating margin was primarily due tohigher net sales, offset to some extent by higher operating expenses. Nokia Siemens NetworksNet Sales.The following chart sets out Nokia Siemens Networks net sales for theperiods indicated, as well as the year-on-year and sequential growth rates, bygeographic area. NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA ------------------------------------------------------------------------EUR million Q4/2010 Q4/2009 YoY Change Q3/2010 QoQ Change-----------------------------------------------------------------------Europe 1 357 1 327 2% 1 070 27%-----------------------------------------------------------------------Middle East & Africa 423 371 14% 331 28%-----------------------------------------------------------------------Greater China 508 425 20% 311 63%-----------------------------------------------------------------------Asia-Pacific 978 818 20% 711 38%-----------------------------------------------------------------------North America 226 244 -7% 175 29%-----------------------------------------------------------------------Latin America 469 440 7% 345 36%-----------------------------------------------------------------------Total 3 961 3 625 9% 2 943 35%-----------------------------------------------------------------------The year-on-year 9% increase in net sales was primarily driven by growth inboth the product and services businesses in most regions. The sequential 35%increase in net sales was primarily driven by a seasonally strongerinfrastructure market in the fourth quarter 2010. Net sales in the fourthquarter 2010 also benefited from an improvement in overall componentavailability. Of total Nokia Siemens Networks net sales, services contributedEUR 1.8 billion in the fourth quarter 2010, compared to EUR 1.7 billion in thefourth quarter 2009 and EUR 1.4 billion in the third quarter 2010. At constantcurrency, Nokia Siemens Networks net sales would have increased 7% year-on-yearand 37% sequentially. Profitability.Nokia Siemens Networks reported gross profit decreased 3% to EUR1 042 million compared with EUR 1 071 million in the fourth quarter 2009, andincreased 48% compared with EUR 702 million in the third quarter 2010. Thereported gross margin was 26.3% in the fourth quarter 2010, compared with 29.5%in the fourth quarter 2009 and 23.9% in the third quarter 2010. Nokia SiemensNetworks non-IFRS gross profit in the fourth quarter 2010 decreased 6% to EUR 1045 million compared with EUR 1 108 million in the fourth quarter 2009, andincreased 42% compared with EUR 733 million in the third quarter 2010. Thenon-IFRS gross margin was 26.4% in the fourth quarter 2010, compared with 30.6%in the fourth quarter 2009 and 24.9% in the third quarter 2010. The loweryear-on-year non-IFRS gross margin in the fourth quarter 2010 was primarily dueto general price pressure on certain products, a higher proportion of lowermargin products in the business mix and to some extent project executionrelated challenges in the Middle East and Africa. The higher sequentialnon-IFRS gross margin in the fourth quarter 2010 was primarily due to a morefavourable business mix, strong seasonal net sales and the absence of certainitems that had a negative impact on the gross margin in the third quarter 2010. Nokia Siemens Networks fourth quarter 2010 reported operating profit was EUR 1million, compared with a reported operating profit of EUR 17 million in thefourth quarter 2009 and a reported operating loss of EUR 282 million in thethird quarter 2010. The reported operating margin was 0.0% in the fourthquarter 2010, compared with 0.5% in the fourth quarter 2009 and -9.6% in thethird quarter 2010. Nokia Siemens Networks non-IFRS operating profit was EUR145 million in the fourth quarter 2010, compared with a non-IFRS operatingprofit of EUR 201 million in the fourth quarter 2009 and a non-IFRS operatingloss of EUR 116 million in the third quarter 2010. The non-IFRS operatingmargin was 3.7% in the fourth quarter 2010, compared with 5.5% in the fourthquarter 2009 and -3.9% in the third quarter 2010. The year-on-year decline inNokia Siemens Networks non-IFRS operating profit was primarily due to the lowergross margin, which was to some extent offset by higher net sales and loweroperating expenses. The sequential increase in Nokia Siemens Networks non-IFRSoperating profit was primarily due to higher net sales and gross margin, offsetto some extent by higher operating expenses in the fourth quarter 2010. Q4 2010 OPERATING HIGHLIGHTSDevices & Services- Following the start of shipments of the Nokia N8 in the third quarter, Nokiabegan shipments of two other smartphones based on the new Symbian software: TheNokia C7, a sleek, full-touch smartphone crafted from stainless steel and glassthat is designed to appeal especially to social networkers, and the NokiaC6-01, a smaller, full-touch smartphone that features Nokia ClearBlacktechnology for improved outdoor visibility. - Nokia started shipments of the Nokia C3 Touch & Type, a stainless steeldevice which combines the touch screen and traditional phone keypad. - Nokia estimates that it became the leader in QWERTY in terms of volume shareduring the fourth quarter, helped by sales of its affordable QWERTY model, theNokia C3. - Nokia continued to develop its Ovi services. Highlights for the quarterincluded: - Store continued to see increased downloads of applications and content. TheStore is now attracting more than 4 million downloads a day, compared with morethan 2.7 million a day reported in October 2010, boosted by traffic from thenew Nokia N8 and Nokia C7, the widespread introduction of operator billing andthe increased availability of local applications and content specific toindividual markets. According to a study by iResearch published since the endof the quarter, Ovi Store ranks as the leading application store in China bydownloads. Other key markets for Ovi Store include Russia and Turkey, wheredownloads from the Store have reached more than 1 million a week in eachmarket. - Maps continued to scale, and today includes coverage of 180 countries andregions in total, with 100 of them navigable. Additionally, more than 100cities around the world have dedicated pedestrian navigation. With the releaseof the latest version of Ovi Maps, users can download maps directly to theirdevice over Wi-Fi as well as enjoy mapping that includes public transport linesfor subways, trams and trains in more than 80 cities around the world. Nokia N8owners have quickly become among the most active Maps users, spending up tofour hours a month using maps and navigating. - Life Tools, Nokia's unique life improvement mobile information servicesdesigned especially for emerging markets, was launched in Nigeria, addingAfrica's most populous country to the service which already operates in India,Indonesia and China. - Nokia announced that it will use Qt technologies to simplify development forboth our own and third party developers. In addition, Nokia announced itsintention to support HTML5 for the development of Web content and applications. - Following the withdrawal of other members, the Symbian Foundation, anon-profit entity, transitioned to a licensing operation only and the Symbianplatform's development is now under the control of Nokia. - In November 2010, Renesas Electronics Corporation completed its acquisitionof Nokia's Wireless Modem business, which was initially announced on July 6,2010. NAVTEQ- NAVTEQ announced its selection by the Federal Communications Commission (FCC)for US map data to support development of a national broadband map. - NAVTEQ announced an expansion in R&D capabilities with the addition of aGlobal R&D Center in Mumbai, India. - NAVTEQ extended its global agreement with ORTEC, also incorporatingadditional NAVTEQ Traffic Patterns and NAVTEQ Transport content. - NAVTEQ acquired PixelActive Inc. to accelerate expansion from a 2D to a 3Dmap and further leverage 3D technologies for all NAVTEQ products. Nokia Siemens Networks- Nokia Siemens Networks added three more 3G customers in India, announcingcontracts with Idea Cellular, Vodafone Essar and Aircel. - Nokia Siemens Networks continued to gain momentum in the emerging networksharing arena. In France Nokia Siemens Networks won a deal to build an enhancedmobile voice and data network in rural France for SFR, which will be sharedwith two other operators. In the UK Nokia Siemens Networks announced it hadsupplied more than 12,000 3G base stations to Mobile Broadband Network Ltd(MBNL), bringing improved coverage and capacity for Three and T-Mobile UKcustomers. - Nokia Siemens Networks continued to make progress in LTE, announcingcontracts with, among others, Deutsche Telekom in Germany, Elisa in Finland andfor Evolved Packet Core with Tele2 in Sweden. - Nokia Siemens Networks secured its first network outsourcing contract inChina with Anhui Unicom; Nokia Siemens Networks also announced plans to expandits global services delivery capability with the opening a new Global NetworkOperations Centre in Brazil. - NBN Co in Australia awarded Nokia Siemens Networks a contract to supply DWDMoptical transport network technology for the national broadband project. - Nokia Siemens Networks announced it will open a Smart Lab in South Korea,focused on developing smart device-optimized applications, services andnetworks. The lab will explore the potential of wireless broadband technologiesfor delivering a superior end-user experience. - Nokia Siemens Networks has successfully tested a technology that couldsignificantly increase the data carrying capacity of standard copper wires. Thecompany achieved data transmission speeds of 825 megabits per second (Mbps)over 400 meters of bonded copper lines and 750 Mbps over 500 meters using'Phantom DSL' technology. For more information on the operating highlights mentioned above, please referto related press announcements at the following links: www.nokia.com/press,www.navteq.com/about/press.html, www.nokiasiemensnetworks.com/press FORWARD-LOOKING STATEMENTSIt should be noted that certain statements herein which are not historicalfacts are forward-looking statements, including, without limitation, thoseregarding: A) the timing of the deliveries of our products and services andtheir combinations; B) our ability to develop, implement and commercialize newtechnologies, products and services and their combinations; C) expectationsregarding market developments and structural changes; D) expectations andtargets regarding our industry volumes, market share, prices, net sales andmargins of products and services and their combinations; E) expectations andtargets regarding our operational priorities and results of operations; F) theoutcome of pending and threatened litigation; G) expectations regarding thesuccessful completion of acquisitions or restructurings on a timely basis andour ability to achieve the financial and operational targets set in connectionwith any such acquisition or restructuring; and H) statements preceded by'believe,' 'expect,' 'anticipate,' 'foresee,' 'target,' 'estimate,' 'designed,''plans,' 'will' or similar expressions. These statements are based onmanagement's best assumptions and beliefs in light of the information currentlyavailable to it. Because they involve risks and uncertainties, actual resultsmay differ materially from the results that we currently expect. Factors thatcould cause these differences include, but are not limited to: 1) thecompetitiveness and quality of our portfolio of products and services and theircombinations; 2) our ability to timely and successfully develop or otherwiseacquire the appropriate technologies and commercialize them as new advancedproducts and services and their combinations, including our ability to attractapplication developers and content providers to develop applications andprovide content for use in our devices; 3) our ability to effectively, timelyand profitably adapt our business and operations to the requirements of theconverged mobile device market and the services market; 4) the intensity ofcompetition in the various markets where we do business and our ability tomaintain or improve our market position or respond successfully to changes inthe competitive environment; 5) the occurrence of any actual or even allegeddefects or other quality, safety or security issues in our products andservices and their combinations; 6) the development of the mobile and fixedcommunications industry and general economic conditions globally andregionally; 7) our ability to successfully manage costs; 8) exchange ratefluctuations, including, in particular, fluctuations between the euro, which isour reporting currency, and the US dollar, the Japanese yen and the Chineseyuan, as well as certain other currencies; 9) the success, financial conditionand performance of our suppliers, collaboration partners and customers; 10) ourability to source sufficient amounts of fully functional components,sub-assemblies, software, applications and content without interruption and atacceptable prices and quality; 11) our success in collaboration arrangementswith third parties relating to the development of new technologies, productsand services, including applications and content; 12) our ability to manageefficiently our manufacturing and logistics, as well as to ensure the quality,safety, security and timely delivery of our products and services and theircombinations; 13) our ability to manage our inventory and timely adapt oursupply to meet changing demands for our products; 14) our ability to protectthe complex technologies, which we or others develop or that we license, fromclaims that we have infringed third parties' intellectual property rights, aswell as our unrestricted use on commercially acceptable terms of certaintechnologies in our products and services and their combinations; 15) ourability to protect numerous Nokia, NAVTEQ and Nokia Siemens Networks patented,standardized or proprietary technologies from third-party infringement oractions to invalidate the intellectual property rights of these technologies;16) the impact of changes in government policies, trade policies, laws orregulations and economic or political turmoil in countries where our assets arelocated and we do business; 17) any disruption to information technologysystems and networks that our operations rely on; 18) our ability to retain,motivate, develop and recruit appropriately skilled employees; 19) unfavorableoutcome of litigations; 20) allegations of possible health risks fromelectromagnetic fields generated by base stations and mobile devices andlawsuits related to them, regardless of merit; 21) our ability to achievetargeted costs reductions and increase profitability in Nokia Siemens Networksand to effectively and timely execute related restructuring measures; 22)developments under large, multi-year contracts or in relation to majorcustomers in the networks infrastructure and related services business; 23) themanagement of our customer financing exposure, particularly in the networksinfrastructure and related services business; 24) whether ongoing or anyadditional governmental investigations into alleged violations of law by someformer employees of Siemens AG ('Siemens') may involve and affect thecarrier-related assets and employees transferred by Siemens to Nokia SiemensNetworks; 25) any impairment of Nokia Siemens Networks customer relationshipsresulting from ongoing or any additional governmental investigations involvingthe Siemens carrier-related operations transferred to Nokia Siemens Networks;as well as the risk factors specified on pages 11-32 of Nokia's annual reportForm 20-F for the year ended December 31, 2009 under Item 3D. 'Risk Factors.'Other unknown or unpredictable factors or underlying assumptions subsequentlyproving to be incorrect could cause actual results to differ materially fromthose in the forward-looking statements. Nokia does not undertake anyobligation to publicly update or revise forward-looking statements, whether asa result of new information, future events or otherwise, except to the extentlegally required. Nokia, Helsinki - January 27, 2011 Media and Investor Contacts: Corporate Communications, tel. +358 7180 34900Investor Relations Europe, tel. +358 7180 34927Investor Relations US, tel. +1 914 368 0555 - Nokia's Strategy and Financial Briefing is scheduled to be held on February11, 2011. - Nokia plans to publish its quarterly results in 2011 on the following dates:Q1 on April 21, Q2 on July 21 and Q3 on October 20, 2011. - Nokia plans to publish its annual report, Nokia in 2010, in week 13 of 2011.- Nokia's Annual General Meeting will be held on May 3, 2011. www.nokia.comNews Source: NASDAQ OMX 27.01.2011 DGAP's Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: EnglishCompany: Nokia FinlandPhone: Fax: E-mail: Internet: ISIN: FI0009000681Category Code: FRLSE Ticker: 0HAFSequence Number: 660Time of Receipt: Jan 27, 2011 12:02:09 End of Announcement DGAP News-Service ---------------------------------------------------------------------------UK-Regulatory-announcement transmitted by DGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement.
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