26th Jan 2012 10:09
Nokia / Miscellaneous 26.01.2012 12:09 Dissemination of a UK Regulatory Announcement, transmitted byDGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement.--------------------------------------------------------------------------- - Accelerating investment in Lumia range of smartphones, having sold well over1 million Lumia devices to date - Solid Q4 performance in mobile phones- Strong balance sheet, with net cash and other liquid assets of EUR 5.6billion at end of Q4 2011 - Nokia Board of Directors will propose a dividend of EUR 0.20 per share for2011 (EUR 0.40 per share for 2010) Nokia CorporationInterim reportJanuary 26, 2012 at 13.00 (CET+1) This is a summary of the fourth quarter and annual results 2011 interim reportpublished today. The complete fourth quarter and annual results 2011 interimreport with tables is available athttp://www.results.nokia.com/results/Nokia_results2011Q4e.pdf. Investors shouldnot rely on summaries of our interim reports only, but should review thecomplete interim reports with tables. Reported and Non-IFRS Reported and Non-IFRS fourth quarter 2011 results1 full year 2011 results1--------------------------------------------------------------------------------EUR million Q4/201 Q4/201 YoY Q3/201 QoQ 2011 2010 YoY 1 0 Change 1 Change Change----------------------------------------------------------------------------------------------------------------------------------------------------------------Nokia Net sales 10 005 12 651 -21% 8 980 11% 38 659 42 446 -9%Operating -954 884 -71 -1 073 2 070 profit Operating 478 1090 -56% 252 90% 1 825 3 204 -43% profit (non-IFRS) EPS, EUR -0.29 0.20 -0.02 -0.31 0.50 diluted EPS, EUR 0.06 0.22 -73% 0.03 100% 0.29 0.61 -52% diluted (non-IFRS)2 Net cash from 644 2436 -74% 852 -25% 1 137 4 774 -76%operating activities Net cash and 5 581 6 996 -20% 5 067 10% 5 581 6 996 -20%other liquid assets3 ----------------------------------------------------------------------------------------------------------------------------------------------------------------Devices & Services4 Net sales 5 997 8 499 -29% 5 392 11% 23 943 29 134 -18%Smart Devices 2 747 4 396 -38% 2 194 25% 10 820 14 874 -27%net sales Mobile Phones 3 040 3 948 -23% 2 915 4% 11 930 13 696 -13%net sales Mobile device 113.5 123.7 -8% 106.6 6% 417.1 452.9 -8%volume (mn units) Smart Devices 19.6 28.6 -31% 16.8 17% 77.3 103.6 -25%volume (mn units) Mobile Phones 93.9 95.0 -1% 89.8 5% 339.8 349.2 -3%volume (mn units) Mobile device 53 69 -23% 51 4% 57 64 -11%ASP5 Smart Devices 140 154 -9% 131 7% 140 144 -3%ASP5 Mobile Phones 32 42 -24% 32 0% 35 39 -10%ASP5 Operating 203 1 082 -81% 168 22% 884 3 540 -75%profit Operating 292 1 025 -72% 258 13% 1 683 3 403 -51%profit (non-IFRS) Operating 3.4% 12.7% 3.1% 3.7% 12.2% margin % Operating 4.9% 12.1% 4.8% 7.0% 11.7% margin % (non-IFRS) ----------------------------------------------------------------------------------------------------------------------------------------------------------------Location & Commerce6 Net sales 306 265 15% 282 9% 1 091 869 25%Operating -1 205 -148 -85 -1 526 -663 profit Operating 29 -29 28 4% 48 -173 - profit (non-IFRS) Operating 393.8% -55.8% -30.1% -139.9% -76.3% margin % Operating 9.5% -10.9% 9.9% 4.4% -19.9% margin % (non-IFRS) ----------------------------------------------------------------------------------------------------------------------------------------------------------------Nokia Siemens Networks7 Net sales 3 815 3 961 -4% 3 413 12% 14 041 12 661 11%Operating 67 1 -114 -300 -686 profit Operating 176 145 21% 6 225 95 137% profit (non-IFRS) Operating 1.8% 0.0% -3.3% -2.1% -5.4% margin % Operating 4.6% 3.7% 0.2% 1.6% 0.8% margin % (non-IFRS) -------------------------------------------------------------------------------- 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 for Q4 2011 on pages 4-5, 20-22 and 24, and pages41-43 and 45 for the full years 2011 and 2010. 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 2011 and Q4 2010 can be found in the tables onpages 18 and 20-24 of our complete interim report with tables. A reconciliationof our Q3 2011 non-IFRS results to our reported results can be found on pages17 and 20-24 of our complete Q3 2011 interim report with tables which waspublished on October 20, 2011. A reconciliation of our 2011 and 2010 non-IFRSresults to our reported results can be found on pages 40-45. Note 2 relating to non-IFRS Nokia EPS: Nokia taxes continued to be unfavorablyimpacted by Nokia Siemens Networks taxes as no tax benefits are recognized forcertain Nokia Siemens Networks deferred tax items. In Q4 2011, the Finnishstatutory tax rate change also had a one-quarter negative impact. If Nokia'sestimated long-term tax rate of 26% had been applied, non-IFRS Nokia EPS wouldhave been approximately 1.2 Euro cents higher in Q4 2011. Note 3 relating to Nokia net cash and other liquid assets: Calculated as totalcash and other liquid assets less interest-bearing liabilities. Note 4 relating to Devices & Services reporting structure: As of April 1, 2011,our Devices & Services business has two operating and reportable segments -Smart Devices, which focuses on smartphones, and Mobile Phones, which focuseson mass market mobile devices - as well as Devices & Services Other. Priorperiod results for each quarter and the full year 2010 and Q1 2011 have beenregrouped (on an unaudited basis) for comparability purposes according to thenew reporting format that became effective on April 1, 2011. Devices & Services prior period results for each quarter and the full year 2010and Q1, Q2 and Q3 2011 have also been recasted (on an unaudited basis) forcomparability purposes according to the new reporting format that becameeffective on October 1, 2011. See Note 6 below relating to Location & Commerce. Note 5 relating to average selling prices (ASP): Mobile device ASP representstotal Devices & Services net sales (Smart Devices net sales, Mobile Phones netsales, and Devices & Services Other net sales) divided by total Devices &Services volumes. Devices & Services Other net sales includes net sales ofNokia's luxury phone business Vertu and spare parts, as well as intellectualproperty royalty income. Smart Devices ASP represents Smart Devices net salesdivided by Smart Devices volumes. Mobile Phones ASP represents Mobile Phonesnet sales divided by Mobile Phones volumes. Note 6 relating to Location & Commerce: On June 22, 2011, we announced plans tocreate a new Location & Commerce business which combines NAVTEQ and Nokia'ssocial location services operations from Devices & Services, which focuses onlocation based services and local commerce. The Location & Commerce business isan operating and reportable segment beginning October 1, 2011. From the thirdquarter 2008 until the end of the third quarter 2011, NAVTEQ was a separatereportable segment of Nokia. Prior period results for each quarter and the fullyear 2010 and Q1, Q2 and Q3 2011 have been recasted (on an unaudited basis) forcomparability purposes according to the new reporting format that becameeffective on October 1, 2011. Recasted reported financial information can beaccessed at: http://www.nokia.com/investors. Note 7 relating to Nokia Siemens Networks: Nokia Siemens Networks completed theacquisition of Motorola Solutions' networks assets on April 30, 2011.Accordingly, the fourth quarter and full year 2011 results of Nokia SiemensNetworks are not directly comparable to their prior-year comparatives. STEPHEN ELOP, NOKIA CEO: The fourth quarter of 2011 marked a significant step in Nokia's transformation.Most notably, in Q4 we introduced new mobile phones and smartphones, whichresulted from the strategy shift in our Devices & Services business. Overall, we are pleased with the performance of our mobile phones business,which benefited in Q4 from sequential double-digit percentage growth in ourdual SIM business, with particular strength in India, Middle East and Africaand South East Asia. In October, we introduced the Asha 200, 201, 300 and 303,which brought new mobile phones into 76 markets around the world. We arebuilding on this foundation with R&D investments as we continue our journey toconnect the next billion to the Internet. Also in October, just six months after signing an agreement with Microsoft, weintroduced our first two devices based on the Windows Phones platform - theNokia Lumia 800 and the Nokia Lumia 710. We brought the new devices to marketahead of schedule, demonstrating that we are changing the clock speed of Nokia.To date, we have introduced Lumia to consumers in Europe, Hong Kong, India,Russia, Singapore, South Korea and Taiwan. We have also started our important re-entry into the North American market.Earlier this month, T-Mobile started selling the Nokia Lumia 710 as a leaddevice. We also announced the new Nokia Lumia 900 with AT&T, and immediatelyreceived a number of industry awards. The Nokia Lumia 900 is our third Lumiadevice, our first LTE device designed specifically for the North Americanmarket, and AT&T is positioning the Lumia 900 as a lead LTE device. In the war of ecosystems, clearly there are some strong contenders already onthe field. And with Lumia, we have demonstrated that we belong on the field. Our specific intent has been to establish a beachhead in this war ofecosystems, and country by country that is what we are now accomplishing. Todate we have sold well over 1 million Lumia devices. From this beachhead ofmore than 1 million Lumia devices, you will see us push forward with the sales,marketing and successive product introductions necessary to be successful. Wealso plan to bring the Lumia series to additional markets including China andLatin America in the first half of 2012. And, while we progressed in the right direction in 2011, we still have atremendous amount to accomplish in 2012, and thus, it is my assessment that weare in the heart of our transition. Specifically, changing market conditions are putting increased pressure onSymbian. In certain markets, there has been an acceleration of the anticipatedtrend towards lower-priced smartphones with specifications that are differentfrom Symbian's traditional strengths. As a result of the changing marketconditions, combined with our increased focus on Lumia, we now believe that wewill sell fewer Symbian devices than we previously anticipated. During Q4, we also formed the Location & Commerce business to drive value fromour leading mapping and location-based services platform. We conducted annualimpairment testing in Q4 in the context of our new structure and plans for thefuture, and valued the Location & Commerce business at EUR 4.1 billion,resulting in an impairment of goodwill of EUR 1.1 billion. The Location &Commerce business is an important asset that is bringing differentiatinglocation-based services to Nokia, the Windows Phone ecosystem, and otherMicrosoft products such as Bing. We believe this is the leading location-basedservices platform with an opportunity to become tremendously powerful ascomputing goes more mobile, and location increasingly becomes a criticalorganizing dimension for a person's experiences. In summary, with a strong balance sheet, our performance in mobile phones andthe new excitement around Lumia, we are confident that we are on the righttrack to build long-term value. NOKIA OUTLOOK - Nokia expects its non-IFRS Devices & Services operating margin in the firstquarter 2012 to be around breakeven, ranging either above or below byapproximately 2 percentage points. This outlook is based on our expectationsregarding a number of factors, including: - competitive industry dynamics, particularly impacting our Smart Devicesbusiness unit; - a greater-than-normal seasonal decline in Devices & Services net sales;- timing, ramp-up, and consumer demand related to our new products;- the macroeconomic environment. - Nokia continues to target to reduce Devices & Services non-IFRS operatingexpenses by more than EUR 1 billion for the full year 2013, compared to therecasted full year 2010 Devices & Services non-IFRS operating expenses of EUR5.35 billion. - Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRSoperating margin to be negative in the earlier part of 2012. In the firstquarter of 2012, Nokia Siemens Networks expects substantial charges related toits previously announced global restructuring program aimed at maintaininglong-term competitiveness and improving profitability. Due to the nature of therestructuring program as well as prevailing uncertain macroeconomic conditions,the timing of improvements in profitability is uncertain and therefore NokiaSiemens Networks' non-IFRS operating margin in 2012 is expected to be volatile.Thus, Nokia and Nokia Siemens Networks do not believe it is appropriate to givespecific full year or quarterly guidance for Nokia Siemens Networks during2012. - Nokia Siemens Networks continues to target to reduce its non-IFRS annualizedoperating expenses and production overheads by EUR 1 billion by the end of2013, compared to the end of 2011. LONGER TERM OUTLOOK AND TARGETSNokia believes it is currently not appropriate to provide annual targets for2012 mainly for the following reasons: - 2012 is expected to continue to be a year of transition, during which ourDevices & Services business will be subject to risks and uncertainties. Thoserisks and uncertainties include, among others, consumer demand for our Symbiandevices; the timing, ramp-up, and consumer demand related to new products,including our Lumia devices; and further pressure on margins as competitorsendeavor to capitalize on our platform and product transition; - Nokia Siemens Networks has announced a new strategy which focuses itsbusiness on mobile broadband and services, and has launched an extensive globalrestructuring program. - Additionally, the macroeconomic environment is making it increasinglydifficult to estimate our outlook and provide reliable targets. Longer-term, Nokia targets:- Devices & Services net sales to grow faster than the market.- Devices & Services non-IFRS operating margin to be 10% or more. Longer-term, Nokia and Nokia Siemens Networks target:- Nokia Siemens Networks' non-IFRS operating margin to be between 5% and 10%. FOURTH QUARTER 2011 FINANCIAL HIGHLIGHTS The non-IFRS results exclude: Q4 2011 -- EUR 1 432 million (net) consisting of:- EUR 1 090 million partial impairment of goodwill in Location & Commerce- EUR 25 million restructuring charge in Location & Commerce- EUR 119 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ - EUR 100 million restructuring charge and EUR 36 million associatedimpairments in Devices & Services - EUR 2 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of Novarra, MetaCarta and Motally inDevices & Services - EUR 86 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia Siemens Networksand the acquisition of Motorola Solutions' networks assets - EUR 23 million restructuring charge and other associated items in NokiaSiemens Networks - EUR 49 million benefit from a cartel claim settlement Q4 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 2011 -- EUR 323 million (net) consisting of:- EUR 26 million restructuring charge and other associated items in NokiaSiemens Networks - EUR 59 million restructuring charge and EUR 54 million associated impairmentsin Devices & Services - EUR 24 million positive Accenture deal closing adjustment in Devices &Services - EUR 94 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia Siemens Networksand the acquisition of Motorola Solutions' networks assets - EUR 113 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ - EUR 1 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of Novarra, MetaCarta and Motally inDevices & Services 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 Group Nokia has three businesses that reflect its new operational structureimplemented during 2011 - Devices & Services, Location & Commerce and NokiaSiemens Networks. As of April 1, 2011, Devices & Services has two operatingand reportable segments - Smart Devices, which focuses on smartphones, andMobile Phones, which focuses on mass market mobile devices - as well as Devices& Services Other. As of October 1, 2011, a new operating and reportablesegment, Location & Commerce, was formed by combining the NAVTEQ business withNokia's social location services operations, which focuses on location basedservices and local commerce. From the third quarter of 2008 until the end ofthe third quarter of 2011, NAVTEQ was a separate reportable segment of Nokia. Prior period results for each quarter and the full year 2010 and Q1, Q2 and Q32011 have been recasted (on an unaudited basis) for comparability purposesaccording to the new reporting format. Recasted reported financial informationcan be accessed at: http://www.nokia.com/investors 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 2011 NET SALES, REPORTED & CONSTANT CURRENCY1 ------------------------------------------------------------- YoY Change QoQ Change------------------------------------------------------------------------------------------------------------------------Group net sales - reported -21% 11%Group net sales - constant currency1 -19% 11%Devices & Services -29% 11%net sales - reported Devices & Services -26% 12%net sales - constant currency1 Nokia Siemens Networks -4% 12%net sales - reported Nokia Siemens Networks -5% 10%net sales - constant currency1 ------------------------------------------------------------ Note 1: Change in net sales at constant currency excludes the impact of changesin exchange rates in comparison to the Euro, our reporting currency. The following chart sets out Nokia Group's cash flow for the periods indicatedand financial position at the end of the periods indicated, as well as theyear-on-year and sequential growth rates. NOKIA GROUP CASH FLOW AND FINANCIAL POSITION ------------------------------------------------------------------------EUR million Q4/2011 Q4/2010 YoY Change Q3/2011 QoQ Change-----------------------------------------------------------------------Net cash from 634 2 436 -74% 852 -26%operating activities -----------------------------------------------------------------------Total cash and 10 902 12 275 -11% 10 809 1%other liquid assets -----------------------------------------------------------------------Net cash and 5 581 6 996 -20% 5 067 10%other liquid assets1 ----------------------------------------------------------------------- Note 1: Total cash and other liquid assets minus interest-bearing liabilities. Year-on-year, net cash and other liquid assets decreased by EUR 1.4 billionprimarily due to payment of the dividend, cash outflows related to theacquisition of Motorola Solutions' networks assets, and capital expenditures,partially offset by positive overall net cash from operating activities and aEUR 500 million equity investment in Nokia Siemens Networks by Siemens. Sequentially, net cash and other liquid assets increased by EUR 514 millionprimarily due to underlying profitability, net working capital improvements inNokia Siemens Networks, cash inflows related to IPR, positive foreign exchangeimpact on our cash balances, and the receipt of a platform support payment fromMicrosoft, partially offset by net cash outflows related to taxes, capitalexpenditures, and hedging activities. Our broad strategic agreement with Microsoft includes platform support paymentsfrom Microsoft to us as well as software royalty payments from us to Microsoft. In the fourth quarter 2011, we received the first quarterly platform supportpayment of USD 250 million (EUR 180 million). We have a competitive softwareroyalty structure, which includes minimum software royalty commitments. Overthe life of the agreement, both the platform support payments and the minimumsoftware royalty commitments are expected to measure in the billions of USDollars. Devices & Services As of April 1, 2011, our Devices & Services business has two operating andreportable segments - Smart Devices, which focuses on smartphones, and MobilePhones, which focuses on mass market mobile devices - as well as Devices &Services Other. Additionally, in 2011 we announced plans to create a newLocation & Commerce business which combines NAVTEQ and Nokia's social locationservices operations from Devices & Services. The Location & Commerce businessis an operating and reportable segment beginning October 1, 2011. Prior periodresults for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 havebeen recasted (on an unaudited basis) for comparability purposes according tothe new reporting format. Recasted reported financial information can beaccessed at: http://www.nokia.com/investors The following chart sets out a summary of the results for our Devices &Services business for the periods indicated, as well as the year-on-year andsequential growth rates. DEVICES & SERVICES RESULTS SUMMARY --------------------------------------------------------------------- Q4/2011 Q4/2010 YoY Q3/2011 QoQ Change Change--------------------------------------------------------------------Net sales (EUR million)1 5 997 8 499 -29% 5 392 11%--------------------------------------------------------------------Mobile device volume 113.5 123.7 -8% 106.6 6%(million units) --------------------------------------------------------------------Mobile device ASP (EUR) 53 69 -23% 51 4%--------------------------------------------------------------------Non-IFRS gross margin (%) 25.8% 29.0% 25.7% --------------------------------------------------------------------Non-IFRS operating 1 262 1 431 -12% 1 126 12%expenses (EUR million) --------------------------------------------------------------------Non-IFRS operating 4.9% 12.1% 4.8% margin (%) -------------------------------------------------------------------- Note 1: Includes IPR royalty income recognized in Devices & Services Other netsales. Net SalesThe year-on-year decline and sequential increase in our Devices & Services netsales are discussed below in our operating analysis of our Smart Devices andMobile Phones business units. No non-recurring IPR royalty income wasrecognized in the fourth quarter 2011, compared with approximately EUR 70million recognized in the third quarter 2011 and approximately EUR 30 millionrecognized in the fourth quarter 2010 in Devices & Services Other whichbenefited our overall Devices & Services results in those quarters. Atconstant currency, Devices & Services net sales would have decreased 26%year-on-year and increased 12% sequentially. The following chart sets out the net sales for our Devices & Services businessfor the periods indicated, as well as the year-on-year and sequential growthrates, by geographic area. The IPR royalty income described in the paragraphabove has been allocated to the geographic areas contained in this chart. DEVICES & SERVICES NET SALES BY GEOGRAPHIC AREA ----------------------------------------------------------------EUR million Q4/2011 Q4/2010 YoY Q3/2011 QoQ Change Change------------------------------------------------------------------------------------------------------------------------------Europe 1 922 3 088 -38% 1 394 38%Middle East & Africa 1 065 1 177 -10% 957 11%Greater China 1 008 1 682 -40% 1 240 -19%Asia-Pacific 1 297 1 603 -19% 1 197 8%North America 53 233 -77% 73 -27%Latin America 652 715 -9% 531 23%---------------------------------------------------------------Total 5 997 8 499 -29% 5 392 11%--------------------------------------------------------------- VolumeThe following chart sets out the mobile device volumes for our Devices &Services business for the periods indicated, as well as the year-on-year andsequential growth rates, by geographic area. DEVICES & SERVICES MOBILE DEVICE VOLUMES BY GEOGRAPHIC AREA ------------------------------------------------------------------------million units Q4/2011 Q4/2010 YoY Change Q3/2011 QoQ Change----------------------------------------------------------------------------------------------------------------------------------------------Europe 25.3 33.5 -24% 20.7 22%Middle East & Africa 25.9 22.2 17% 26.0 0%Greater China 14.7 21.9 -33% 15.9 -8%Asia-Pacific 34.7 31.3 11% 32.4 7%North America 0.5 2.6 -81% 0.7 -29%Latin America 12.4 12.2 2% 10.9 14%-----------------------------------------------------------------------Total 113.5 123.7 -8% 106.6 6%----------------------------------------------------------------------- On a year-on-year basis, the decline in our total Devices & Services volumes inthe fourth quarter 2011 was driven by significantly lower Smart Devicesvolumes. Mobile Phones volumes were approximately flat year-on-year. The sequential increase in our total Devices & Services volumes in the fourthquarter 2011 was driven by higher Mobile Phones and Smart Device volumessupported by an increased seasonal demand for our devices. During the fourth quarter 2011, our overall channel inventory increased on asequential basis. We ended the fourth quarter 2011 with our sales channelinventories within our normal range of 4-6 weeks. Average Selling PriceOn a year-on-year basis, the overall decrease in our Devices & Services ASP inthe fourth quarter 2011 was driven primarily by the lower ASP in Mobile Phonesand, to a lesser extent, Smart Devices, a higher proportion of Mobile Phonessales, the negative impact from foreign currency hedging and the appreciationof the Euro against certain currencies, partially offset by a positive impactfrom lower deferral of revenue related to services sold in combination with ourdevices. On a sequential basis, the overall increase in our Devices & Services ASP inthe fourth quarter 2011 was driven primarily by a product mix shift towardsSmart Devices, the depreciation of the Euro against certain currencies and alower deferral of revenue related to services sold in combination with ourdevices, partially offset by a negative impact from foreign currency hedging,pricing pressure and lower IPR royalty income as the third quarter 2011 ASPbenefited from the recognition of non-recurring IPR royalty income discussedabove. Gross MarginOn a year-on-year basis, the decline in our Devices & Services non-IFRS grossmargin in the fourth quarter 2011 was driven by gross margin declines in bothSmart Devices and Mobile Phones, partially offset by higher IPR royalty income. On a sequential basis, the slight increase in our Devices & Services non-IFRSgross margin in the fourth quarter 2011 was driven primarily by gross marginimprovements in Mobile Phones, almost entirely offset by the gross margindecline in Smart Devices and lower IPR royalty income. Operating ExpensesDevices & Services non-IFRS research and development expenses decreased 16%year-on-year due to declines in Smart Devices and Devices & Services Otherresearch and development expenses, partially offset by a year-on-year increasein Mobile Phones research and development expenses. The decreases in SmartDevices and Devices & Services Other research and development expenses were dueprimarily to a focus on priority projects and cost controls. The increase inMobile Phones research and development expenses was primarily due toinvestments in product development to bring new innovations to the market insupport of our strategy to bring internet to the next billion, partially offsetby a focus on priority projects and cost controls. On a sequential basis, Devices & Services non-IFRS research and developmentexpenses increased by 12% primarily due to an increase in Mobile Phonesresearch and development expenses as we invested to support our Internet forthe next billion strategy. Devices & Services non-IFRS sales and marketing expenses decreased 5%year-on-year, primarily due to lower sales, and increased 19% sequentially. Thesequential increase was primarily driven by higher marketing expenses,particularly relating to our new smartphone launches in Smart Devices. Devices & Services non-IFRS administrative and general expenses decreased 28%year-on-year and 22% sequentially. In the fourth quarter 2011, Devices &Services non-IFRS other income and expense had a slight positive year-on-yearand sequential impact on profitability. Reported other income and expense wassignificantly adversely impacted in the fourth quarter 2011 primarily as aresult of restructuring-related expenses discussed below, which were recognizedin Devices & Services Other, partially offset by a benefit related to a cartelclaim settlement. Cost Reduction Activities and Planned Operational AdjustmentsWe are continuing to target to reduce our Devices & Services non-IFRS operatingexpenses by more than EUR 1 billion for the full year 2013, compared to therecasted full year 2010 Devices & Services non-IFRS operating expenses of EUR5.35 billion. This reduction is expected to come from a variety of differentsources and initiatives, including a planned reduction in the number ofemployees and normal personnel attrition, a reduction in the use of outsourcedprofessionals, reductions in facility costs, and various improvements inefficiencies. During the fourth quarter 2011, Devices & Services recognized net charges ofEUR 136 million related to restructuring activities, which includedrestructuring charges and associated impairments. As of the end of the fourthquarter 2011, we had recognized cumulative charges of EUR 797 million relatedto restructuring activities in 2011. While the total extent of therestructuring activities is still to be determined, we currently anticipatecumulative charges in Devices & Services of around EUR 900 million before theend of 2012. We also believe total cash outflows related to our Devices &Services restructuring activities will be below the level of the cumulativecharges related to these restructuring activities. Smart Devices The following chart sets out a summary of the results for our Smart Devicesbusiness unit for the periods indicated, as well as the year-on-year andsequential growth rates. SMART DEVICES RESULTS SUMMARY ----------------------------------------------------------------------------- Q4/2011 Q4/2010 YoY Change Q3/2011 QoQ Change----------------------------------------------------------------------------Net sales (EUR millions)1 2 747 4 396 -38% 2 194 25%----------------------------------------------------------------------------Smart Devices volume 19.6 28.6 -31% 16.8 17%(million units) ----------------------------------------------------------------------------Smart Devices ASP (EUR) 140 154 -9% 131 7%----------------------------------------------------------------------------Gross margin (%) 19.9% 28.7% 20.7% ----------------------------------------------------------------------------Operating expenses 732 899 -19% 656 12%(EUR millions) ----------------------------------------------------------------------------Contribution margin (%) -7.0% 11.6% -8.7% ---------------------------------------------------------------------------- Note 1: Does not include IPR royalty income. IPR royalty income is recognizedin Devices & Services Other net sales. Net SalesThe year-on-year decline in our Smart Devices net sales in the fourth quarter2011 was primarily due to significantly lower volumes. On a sequential basis,the increase in our Smart Devices net sales in the fourth quarter 2011 was dueto the higher volumes and ASP. VolumeThe year-on-year decline in our Smart Devices volumes in the fourth quarter2011 continued to be driven by the strong momentum of competing smartphoneplatforms relative to our Symbian devices in all regions, particularly inEurope. On a sequential basis, the increase in our Smart Devices volumes in the fourthquarter 2011 was primarily driven by the broader availability throughout thequarter of the Nokia N9 and the shipments during the quarter of the Nokia Lumia800 and 710 in selected markets, as well as increased seasonal demand for ourdevices. Average Selling PriceThe year-on-year decline in our Smart Devices ASP in the fourth quarter 2011was driven primarily by a higher proportion of sales of lower priced Symbiandevices and price erosion due to the competitive environment, as well as thenegative impact from foreign currency hedging. Our ASP in the fourth quarter2011 benefited from the sales of the higher priced Nokia N9 and Nokia Lumiadevices and a lower deferral of revenue related to services sold in combinationwith our devices. Sequentially, the increase in our Smart Devices ASP in the fourth quarter 2011was driven primarily by a positive mix shift towards our newer higher pricedsmartphones, the depreciation of the Euro against certain currencies and thelower deferral of revenue related to services sold in combination with ourdevices, partially offset by price erosion and the negative impact from foreigncurrency hedging. Gross MarginThe year-on-year decline in our Smart Devices gross margin in the fourthquarter 2011 was driven primarily by greater price erosion than cost erosiondue to the competitive environment and the Symbian related allowances discussedbelow, partially offset by the lower deferral of revenue related to servicessold in combination with our devices and the positive impact from foreigncurrency hedging. On a sequential basis, the decline in our Smart Devices gross margin in thefourth quarter 2011 was driven primarily by the Symbian related allowancesdiscussed below, greater price erosion than cost erosion, and the negativeimpact from foreign currency hedging, which partially offset the positiveimpact from the lower deferral of revenue related to services sold incombination with our devices and lower fixed manufacturing costs. Following the announcement of our strategic partnership with Microsoft inFebruary 2011, our strategy included the expectation to sell approximately 150million more Symbian devices in the years to come. However, changing marketconditions are putting increased pressure on Symbian. In certain markets, therehas been an acceleration of the anticipated trend towards lower-pricedsmartphones with specifications that are different from Symbian's traditionalstrengths, which has contributed to a faster decline of our Symbian volumesthan we anticipated. We expect this trend to continue in 2012. To maximize thevalue of the Symbian asset going forward, we expect to continue shippingSymbian devices in specific regions and distribution channels, as well as tocontinue to provide software support to our Symbian customers through 2016. Asa result of the changing market conditions, combined with our increased focuson Lumia, we now believe we will sell fewer Symbian devices than previouslyanticipated. Thus, in the fourth quarter 2011, we recognized allowances forexcess component inventory and future purchase commitments related to Symbian. Mobile Phones The following chart sets out a summary of the results for our Mobile Phonesbusiness unit for the periods indicated, as well as the year-on-year andsequential growth rates. MOBILE PHONES RESULTS SUMMARY --------------------------------------------------------------------------------- Q4/2011 Q4/2010 YoY Q3/2011 QoQ Change Change --------------------------------------------------------------------------------Net sales (EUR millions)1 3 040 3 948 -23% 2 915 4%--------------------------------------------------------------------------------Mobile Phones volume (million 93.9 95.0 -1% 89.8 5% units) --------------------------------------------------------------------------------Mobile Phones ASP (EUR) 32 42 -24% 32 0%--------------------------------------------------------------------------------Gross margin (%) 27.7% 28.5% 23.6% --------------------------------------------------------------------------------Operating expenses (EUR 429 410 5% 404 6% million) --------------------------------------------------------------------------------Contribution margin (%) 13.5% 18.1% 10.1% -------------------------------------------------------------------------------- Note 1: Does not include IPR royalty income. IPR royalty income is recognizedin Devices & Services Other net sales. Net SalesOn a year-on-year basis, our Mobile Phones net sales in the fourth quarter 2011decreased due to the lower ASP. On a sequential basis, the increase in ourMobile Phones net sales in the fourth quarter 2011 was due to higher volumes. VolumeMobile Phones volumes in the fourth quarter 2011 were approximately flatyear-on-year. This was primarily driven by our reduced portfolio of higherpriced mobile phones compared to the fourth quarter 2010, almost entirelyoffset by a portfolio renewal, such as the broad availability of dual SIMdevices, and higher volumes at lower price points in the fourth quarter 2011. On a sequential basis, the increase in our Mobile Phones volumes in the fourthquarter 2011 was primarily driven by the broader availability of our dual SIMdevices as well as the ongoing product renewal across the mobile phonesportfolio, and to a lesser extent from higher seasonal demand for our mobileproducts. Average Selling PriceThe year-on-year decline in our Mobile Phones ASP in the fourth quarter 2011was primarily driven by an increased proportion of sales of lower priceddevices, the negative impact from foreign currency hedging and the appreciationof the Euro against certain currencies. On a sequential basis, our Mobile Phones ASP was unchanged with relativelystable prices across the portfolio. The negative impact from foreign currencyhedging in the fourth quarter 2011 was offset by the deprecation of the Eurocompared to certain currencies and the lower deferral of revenue related toservices sold in combination with our devices. Gross MarginThe year-on-year decline in our Mobile Phones gross margin in the fourthquarter 2011 was primarily due to greater price erosion than cost erosion andthe appreciation of the Euro against certain currencies partially offset by apositive mix shift towards higher margin mobile phones, the positive impactfrom foreign currency hedging, and the lower deferral of revenue related toservices sold in combination with our devices. The sequential increase in our Mobile Phones gross margin in the fourth quarter2011 primarily reflected the positive impact from foreign currency hedging,greater cost erosion than price erosion, the lower deferral of revenue relatedto services sold in combination with our devices, lower warranty costs and moreefficient utilization of manufacturing capacity, partially offset by thedepreciation of the Euro against certain currencies. Location & Commerce On June 22, 2011, we announced plans to create a new Location & Commercebusiness which combines NAVTEQ and Nokia's social location services operationsfrom Devices & Services. The Location & Commerce business is an operating andreportable segment beginning October 1, 2011. In addition to a broad portfolioof products and services for the wider internet ecosystem, the Location &Commerce business is creating integrated social location offerings in supportof Nokia's strategic goal in smartphones, including the Nokia experience withWindows Phone, as well as support for bringing the internet to the nextbillion. From the third quarter 2008 until the end of the third quarter 2011,NAVTEQ was a separate reportable segment of Nokia. Prior period results foreach quarter and the full year 2010 and Q1, Q2 and Q3 2011 have been recasted(on an unaudited basis) for comparability purposes according to the newreporting format that became effective on October 1, 2011. Recasted reportedfinancial information can be accessed at: http://www.nokia.com/investors. The following chart sets out a summary of the results for Location & Commercefor the periods indicated, as well as the year-on-year and sequential growthrates. LOCATION & COMMERCE RESULTS SUMMARY ----------------------------------------------------------------------------- Q4/2011 Q4/2010 YoY Change Q3/2011 QoQ Change----------------------------------------------------------------------------Net sales (EUR millions) 306 265 15% 282 9%----------------------------------------------------------------------------Non-IFRS gross margin (%) 77.8% 82.6% 81.6% ----------------------------------------------------------------------------Non-IFRS operating 206 246 -16% 201 2%expenses (EUR millions) ----------------------------------------------------------------------------Non-IFRS operating 9.5% -10.9% 9.9% margin (%) ---------------------------------------------------------------------------- Net SalesThe year-on-year increase in Location & Commerce net sales in the fourthquarter 2011 was primarily driven by higher recognition of deferred revenuerelated to sales of map platform licenses to Smart Devices and, to a lesserextent, by higher sales of map content licenses to vehicle customers due tohigher consumer uptake of vehicle navigation systems, partially offset by lowersales to portable navigation devices (PND) customers. Sequentially, the increase in Location & Commerce net sales in the fourthquarter 2011 was primarily due to seasonally strong sales of map contentlicenses in the vehicle segment due to higher consumer uptake of vehiclenavigation systems and increased sales of updates. Gross MarginOn a sequential basis, the decline in Location & Commerce non-IFRS gross marginin the fourth quarter 2011 was primarily due to an increased proportion oflower gross margin sales and a shift of research and development operatingexpenses to cost of sales as a result of the divestiture of the mediaadvertising business. On a year-on-year basis, the decline in Location & Commerce non-IFRS grossmargin in the fourth quarter 2011 was primarily due to a shift of research anddevelopment operating expenses to cost of sales as a result of the divestitureof the media advertising business. Operating ExpensesLocation & Commerce non-IFRS research and development expenses decreased 16%year-on-year reflecting a shift in expenses from research and development tocosts of sales related to the divestiture of the media advertising business.Location & Commerce non-IFRS research and development expenses increased 1%sequentially primarily driven by the timing of projects related to productdevelopment. Location & Commerce non-IFRS sales and marketing expenses decreased 22%year-on-year primarily driven by lower spending on product marketing. Location& Commerce non-IFRS sales and marketing expenses increased 6% sequentially,primarily driven by seasonal increases in marketing expenses related to mapupdate marketing campaigns. Location & Commerce non-IFRS administrative and general expenses decreased 5%year-on-year primarily driven by a focus on cost controls. Location & Commercenon-IFRS administrative and general expenses increased 13 % sequentiallyprimarily driven by increased depreciation related to the closure of offices. In the fourth quarter 2011, we conducted our annual impairment testing toassess if events or changes in circumstances indicated that the carrying amountof our goodwill may not be recoverable. As a result, we recorded a charge tooperating profit of EUR 1 090 million for the impairment of goodwill in ourLocation & Commerce business. The impairment charge is based on our estimatethat the recoverable amount of Location & Commerce is EUR 4.1 billion. Afterthe impairment charge, the carrying amount of goodwill for Location & Commerceis EUR 3.3 billion. The impairment negatively impacted our reported EPS by EUR0.29. The impairment charge is the result of an evaluation of the projected financialperformance of our Location & Commerce business. This takes into considerationthe market dynamics in digital map data and related location-based contentmarkets, including our estimate of the market moving long-term from fee-basedtowards advertising-based models especially in some more mature markets. Italso reflects recently announced results and related competitive factors in thelocal search and advertising market resulting in lower estimated growthprospects from our location-based assets integrated with different advertisingplatforms. After consideration of all relevant factors, we reduced the netsales projections for Location & Commerce which, in turn, reduced projectedprofitability and cash flows. The Location & Commerce business is an important asset that is bringingdifferentiating location-based services to Nokia, the Windows Phone ecosystem,and other Microsoft products such as Bing. We believe this is the leadinglocation-based services platform with an opportunity to become tremendouslypowerful as computing goes more mobile. Nokia Siemens Networks Nokia Siemens Networks completed the acquisition of Motorola Solutions'networks assets on April 30, 2011. Accordingly, the results of Nokia SiemensNetworks for the fourth quarter 2011 are not directly comparable to its resultsfor the fourth quarter 2010. The following chart sets out a summary of the results for Nokia SiemensNetworks for the periods indicated, as well as the year-on-year and sequentialgrowth rates. NOKIA SIEMENS NETWORKS RESULTS SUMMARY --------------------------------------------------------------------- Q4/2011 Q4/2010 YoY Q3/2011 QoQ Change Change--------------------------------------------------------------------Net sales (EUR million) 3 815 3 961 -4% 3 413 12%--------------------------------------------------------------------Non-IFRS gross margin (%) 29.2% 26.4% 26.8% --------------------------------------------------------------------Non-IFRS operating 943 881 7% 936 1%expenses (EUR million) --------------------------------------------------------------------Non-IFRS operating 4.6% 3.7% 0.2% margin (%) -------------------------------------------------------------------- Net SalesThe following chart sets out Nokia Siemens Networks net sales for the periodsindicated, as well as the year-on-year and sequential growth rates, bygeographic area. NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA ----------------------------------------------------------------EUR millions Q4/2011 Q4/2010 YoY Q3/2011 QoQ Change Change------------------------------------------------------------------------------------------------------------------------------Europe 1 272 1 357 -6% 1 074 18%Middle East & Africa 394 423 -7% 301 31%Greater China 438 508 -14% 302 45%Asia-Pacific 909 978 -7% 978 -7%North America 293 226 30% 304 -4%Latin America 509 469 9% 454 12%---------------------------------------------------------------Total 3 815 3 961 -4% 3 413 12%--------------------------------------------------------------- The year-on-year decrease in Nokia Siemens Networks' net sales in the fourthquarter 2011 was driven primarily by a decline in sales of infrastructureequipment, which more than offset the contribution from the acquired MotorolaSolutions networks assets and a slight increase in sales of services. Excludingthe acquired Motorola Solutions networks assets, net sales would have decreasedby 11% year-on-year. The sequential increase in Nokia Siemens Networks' netsales in the fourth quarter 2011 was driven primarily by industry seasonality.Services represented slightly over 50% of Nokia Siemens Networks' net sales inthe fourth quarter 2011. At constant currency, Nokia Siemens Networks' net sales would have decreased 5%year-on-year and increased 10% sequentially. Gross MarginThe higher year-on-year and sequential Nokia Siemens Networks' non-IFRS grossmargin in the fourth quarter 2011 was primarily due to higher software sales,improved performance in services and the contribution from the acquiredMotorola assets. Operating Expenses Nokia Siemens Networks' non-IFRS research and development expenses increased10% year-on-year primarily due to the addition of research and developmentoperations relating to the acquired Motorola Solutions networks assets as wellas investments in strategic initiatives. On a sequential basis, Nokia SiemensNetworks' non-IFRS research and development expenses increased 2% driven byhigher seasonal revenues, largely offset by cost control initiatives and focuson strategic investments. Nokia Siemens Networks' non-IFRS sales and marketing expenses increased 1%year-on-year primarily due to the addition of sales and marketing operationsrelating to the acquired Motorola Solutions networks assets, partially offsetby cost control initiatives. On a sequential basis, Nokia Siemens Networksnon-IFRS sales and marketing expenses decreased 1% reflecting cost controlinitiatives. Nokia Siemens Networks' non-IFRS administrative and general expenses increased8% year-on-year, reflecting the higher net sales and the addition of MotorolaSolutions' network assets. Sequentially, Nokia Siemens Networks non-IFRSadministrative and general expenses decreased 1%. The year-on-year improvement in Nokia Siemens Networks' non-IFRS other incomefor the fourth quarter 2011 primarily reflected lower indirect tax provisionsas well as lower allowances for doubtful accounts. Sequentially, Nokia SiemensNetworks' non-IFRS other income decreased primarily due to higher indirect taxprovisions and some write-offs. Operating MarginThe higher year-on-year Nokia Siemens Networks non-IFRS operating margin in thefourth quarter 2011 primarily reflected the higher gross margin, partiallyoffset by increased operating expenses. The sequential increase in Nokia Siemens Networks' non-IFRS operating margin inthe fourth quarter 2011 primarily reflected the high net sales and grossmargin, as well strong operating expense control. Strategy Update and Global Restructuring ProgramOn November 23, 2011, Nokia Siemens Networks announced its strategy to focus onmobile broadband and services and the launch of an extensive globalrestructuring program. Nokia Siemens Networks plans to realign its business to focus on mobilebroadband (including optical), customer experience management and services.Nokia Siemens Networks' services organization will further strengthen itsglobal delivery system. Business areas not consistent with the new strategy areplanned to be divested or managed for value. Quality and innovation willcontinue to be priorities for the company, with ongoing investment in bothareas. Nokia Siemens Networks targets to reduce its non-IFRS annualized operatingexpenses and production overheads by EUR 1 billion by the end of 2013, comparedto the end of 2011. While these savings are expected to come largely fromorganizational streamlining, the company will also target areas such as realestate, information technology, product and service procurement costs, overallgeneral and administrative expenses, and a significant reduction of suppliersin order to further lower costs and improve quality. Nokia Siemens Networks plans to reduce its global workforce by approximately 17000 by the end of 2013. These planned reductions are expected to be driven byaligning the company's workforce with its new strategy as well as through arange of productivity and efficiency measures. These planned measures areexpected to include elimination of the company's matrix organizationalstructure, site consolidation, transfer of activities to global deliverycenters, consolidation of certain central functions, cost synergies from theintegration of Motorola's wireless assets, efficiencies in service operations,and company-wide process simplification. Nokia Siemens Networks will begin the process of engaging with employeerepresentatives in accordance with country-specific legal requirements to findsocially responsible means to address these reduction needs. More informationwill be shared in impacted countries as the process proceeds. In order toreduce the impact of the planned reductions, Nokia Siemens Networks intends tolaunch locally led programs at the most affected sites to provide re-trainingand re-employment support. In the first quarter of 2012, Nokia Siemens Network expects substantial chargesrelated to this restructuring program. FOURTH QUARTER 2011 OPERATING HIGHLIGHTS Devices & Services- Nokia announced the Nokia Lumia 800 and Nokia Lumia 710, the first two Nokiasmartphones based on Windows Phone. The Lumia range is designed to bringconsumers attractive industrial design, a fast social and Internet experience,leading imaging capabilities as well as signature Nokia experiences optimizedfor Windows Phone, such as Nokia Drive and Mix Radio. By the end of thequarter, the Nokia Lumia 800, which features a 3.7 inch AMOLED ClearBlackcurved display, was on sale in France, Germany, Hong Kong, India, Italy, theNetherlands, Russia, Singapore, Spain, Taiwan and the United Kingdom. Since theend of the year, the Lumia 800 has also gone on sale in Denmark, South Korea,Sweden and Switzerland. By the end of the fourth quarter, the Lumia 710 was onsale in Hong Kong, India, Italy, Russia, Singapore and Taiwan. Since the end ofthe year, the Lumia 710 has also gone on sale in Germany, Spain and the UnitedStates, where it is being offered exclusively through T-Mobile. - Since the end of the quarter, Nokia has announced the Nokia Lumia 900, thefirst of Nokia's Windows Phone-based range to feature high-speed LTEconnectivity, and which will go on sale in early 2012 in the United Statesexclusively through AT&T. - Nokia announced four new Series 40-based mobile phones: the Nokia Asha 300,Asha 303, Asha 200 and Asha 201. Each phone supports Nokia's aim to connect thenext billion consumers with devices which offer high-quality, stylish designs,with the best access to social networks and the Internet. The Nokia Asha 300,Asha 303 and Asha 200 - also Nokia's latest dual SIM device - started shippingduring the fourth quarter of 2011, while the Nokia Asha 201 is expected tobegin shipping in the first quarter of 2012. - Nokia announced and started shipments of the Nokia 603, an affordableno-compromise smartphone featuring simple pairing, sharing and tag reading withNFC and running on the latest Symbian Belle platform. Nokia also launched theNokia Luna Bluetooth Headset designed as an in-ear device with NFC pairingcapabilities. - Nokia announced and began shipments of two high performance audio headsets,the Nokia Purity HD Stereo Headset by Monster and the in-ear Nokia PurityStereo Headset by Monster. Location & Commerce- Location & Commerce made available Nokia Maps and Nokia Drive for Nokia's newLumia smartphones. Nokia Maps is a mobile application that gives people newways to discover and explore the world around them, as well as enabling them tosearch for addresses and places of interest. Nokia Drive is a dedicated in-carnavigation application, equivalent to a fully-fledged PND, includingvoice-guided navigation in multiple languages for more than 100 countries, 2Dand 3D map views and day and night modes. - Location & Commerce launched Nokia Pulse, an application that enables peopleto instantly share their location or other information with family, friends orany other pre-defined group. - Location & Commerce commercially released Nokia Maps 3.08 for Symbian,providing better and faster ways to find places and the best way to get there. - Location & Commerce launched Nokia Maps 3D at maps.nokia.com/3D with search,routing and sharing functionality. - Location & Commerce began powering Yahoo! Maps.- NAVTEQ was selected by Ford Motor Company to be its exclusive map supplierfor the SYNC MyFord Touch navigation system. The agreement positions NAVTEQ asthe map data provider for the system in North America, Latin America, theMiddle East, Russia and Europe. - NAVTEQ divested its media advertising business to Matchbin, a provider ofcontent management, advertising and local marketplace solutions for mediacompanies. Nokia Siemens Networks- On November 22, 2011, Nokia Siemens Networks announced a new strategy,including changes to its organizational structure and a significantrestructuring program aimed at making the company a leader in mobile broadbandand services and improving the company's competitiveness and profitability. - As part of its new strategy, Nokia Siemens Networks is focusing on mobilebroadband and services, and as such has announced a number of planneddivestments, with the sale of its Microwave Transport business to DragonWave,its fixed line Broadband Access business to ADTRAN and its WiMAX unit to NewNetCommunications Technologies. - Nokia Siemens Networks announced a number of mobile broadband deals,including: working with SKY in Brazil to launch 4G TD-LTE wireless networks forthe first time in Latin America; developing the GSM network and expanding3G/HSPA+ for Polkomtel in Poland; and upgrading the GSM network in the Moscowregion for Russian operator Megafon, paving the way for transition to LTE. - Nokia Siemens Networks continued to conduct a number of LTE trials, includingcollaborating with 02 in the UK to provide LTE services on a trial basis toselect users in London, working with Saudi Telecom Company to ensure networkavailability for the upsurge in traffic during the holy Hajj pilgrimage, andsuccessfully completing Indonesia's first 1800 MHz LTE trial for Indosat. InJapan, Nokia Siemens Networks implemented its Circuit Switched Fallback (CSFB)technology to enable CDMA and LTE technologies to work together in KDDI'snetwork. - In optical, Nokia Siemens Networks worked with Italy's Fastweb using LiquidTransport architecture to deploy the country's first 100G optical fiber networkbetween Milan and Rome. The company also announced a deal to deliver theworld's longest 40G link, without intermediate amplifiers, in the 354 kilometreunder-sea link upgrade for PT Telkom in Indonesia. - In services, Nokia Siemens Networks opened a new Service Delivery Center inMexico, the company's fifth worldwide, to provide network planning andoptimization services for operators in Latin America, with the intention ofextending these capabilities to other regions in due course. - Nokia Siemens Networks was selected by Bharti Airtel to implement apan-Indian Customer Experience Management platform to enrich data servicesexperience; and to deliver a superior mobile broadband experience to Bharticustomers in 16 African countries. In Egypt, Nokia Siemens Networks isupgrading Vodafone's subscriber data management system, enabling the operatorto offer a range of customized services. For more information, please refer to related press announcements at thefollowing links: www.nokia.com/press and www.nokiasiemensnetworks.com/press NOKIA IN JANUARY - DECEMBER 2011 (The following discussion is of Nokia's reported results. Comparisons are givento 2010 results, unless otherwise indicated.) Effective from October 1, 2011, Nokia had three businesses that reflect its newoperational structure - Devices & Services, Location & Commerce and NokiaSiemens Networks. Devices & Services includes two operating and reportablesegments - Smart Devices, which focuses on smartphones, and Mobile Phones,which focuses on mass market mobile devices - as well as Devices & ServicesOther. As of October 1, 2011 a new operating and reportable segment, Location &Commerce, was formed by integrating the NAVTEQ business with Nokia's sociallocation services operations, which focuses on location based services andlocal commerce. From the third quarter 2008 until the fourth quarter 2011,NAVTEQ was a separate reportable segment of Nokia. Prior period results for each quarter and the full year 2010 and Q1, Q2 and Q32011 have been recasted (on an unaudited basis) for comparability purposesaccording to the new reporting format. Recasted reported financial informationcan be accessed at: http://www.nokia.com/investors In 2011, our net sales decreased 9% to EUR 38.7 billion (EUR 42.4 billion in2010). Net sales of Devices & Services decreased 18% to EUR 23.9 billion (EUR29.1 billion). Net sales of Smart Devices decreased 27% to EUR 10 820 million(EUR 14 874 million). Net sales of Mobile Phones decreased 13% to EUR 11 930million (EUR 13 696 million). Net sales of Location & Commerce increased 25% toEUR 1 091 million (EUR 869 million). Net sales of Nokia Siemens Networksincreased 11% to EUR 14.0 billion (EUR 12.7 billion). In 2011, Europe accounted for 31% (34%) of our net sales, Asia-Pacific 23%(21%), Greater China 17% (18%), Middle East & Africa 14% (13%), Latin America11% (9%) and North America 4% (5%). The 10 markets in which we generated thegreatest net sales in 2011 were, in descending order of magnitude, China,India, Brazil, Russia, Germany, Japan, the United States, the United Kingdom,Italy and Spain, together representing approximately 52% of total net sales in2011. In comparison, the 10 markets in which we generated the greatest netsales in 2010 were China, India, Germany, Russia, the United States, Brazil,the United Kingdom, Spain, Italy and Indonesia, together representingapproximately 52% of total net sales in 2010. Our gross margin in 2011 was 29.3%, compared to 30.2% in 2010. Gross profit inDevices & Services decreased to EUR 6 640 million (gross profit of EUR 8 722million), representing a gross margin of 27.7% (29.9%). Gross profit of SmartDevices decreased to EUR 2 561 million (EUR 4 587 million), representing 23.7%of Smart Devices net sales (30.8%). Gross profit of Mobile Phones decreased toEUR 3 117 million (EUR 3 830 million), representing 26.1% of Mobile Phones netsales (28.0%). Gross profit in Location & Commerce increased to EUR 877million (gross profit of EUR 700 million), representing a gross margin of 80.4%(80.5%). Gross profit in Nokia Siemens Networks increased to EUR 3 802 million(gross profit EUR 3 395 million), representing a gross margin of 27.1% (26.8%). Our 2011 operating loss was EUR 1.1 billion, compared with an operating profitof EUR 2.1 billion in 2010. Our 2011 operating margin was -2.8% (4.9%). Ouroperating profit in 2011 included purchase price accounting items and otherspecial items of net negative EUR 2.9 billion (net negative EUR 1.1 billion).Operating profit in Devices & Services decreased to EUR 884 million (operatingprofit of EUR 3 540 million), representing an operating margin of 3.7% (12.2%). Devices & Services operating profit in 2011 included purchase price accountingitems and other special items of net negative EUR 799 million (net positive EUR137 million).Contribution of Smart Devices decreased to EUR -411 million (EUR 1376 million), representing -3.8% of Smart Devices net sales (9.3%). Contribution of Mobile Phones decreased to EUR 1 481 million (EUR 2 327million), representing 12.4% of Mobile Phones net sales (17.0%). Operating lossin Location & Commerce was EUR 1 526 million (operating loss of EUR 663million), representing an operating margin of -139.9% (-76.3%). Location &Commerce operating loss included purchase price accounting items and otherspecial items of negative EUR 1.6 billion (net negative EUR 490 million).Operating loss in Nokia Siemens Networks was EUR 300 million (operating lossEUR 686 million), representing an operating margin of -2.1% (-5.4%). NokiaSiemens Networks operating loss in 2011 included purchase price accountingitems and other special items of net negative EUR 0.5 billion (net negative EUR0.8 billion).Group Common Functions expense totaled EUR 131 million in 2011,compared to EUR 113 million in 2010. Although the mobile device industry continued to see volume growth in 2011, ournet sales and profitability were negatively impacted by the increasing momentumof competing smartphone platforms relative to our Symbian smartphones in allregions as we embarked on our platform transition to Windows Phone, as well asour pricing actions due to the competitive environment in both the smartphoneand mobile phone markets. In addition, during the first half of 2011 our netsales and profitability were adversely impacted by our lack of dual SIMproducts, which continued to be a growing part of the market. For Nokia SiemensNetworks, net sales growth was driven primarily by the contribution from theacquired Motorola Solutions networks assets, which was completed on April 29,2011. On a year-on-year basis the movement of the Euro relative to relevantcurrencies had almost no impact on our overall net sales. Our research and development expenses were EUR 5.6 billion in 2011, compared toEUR 5.9 billion in 2010. Research and development costs represented 14.5% ofour net sales in 2011 (13.8%). Research and development expenses includedpurchase price accounting items and other special items of EUR 440 million in2011 (EUR 575 million). In 2011, our selling and marketing expenses were EUR 3.8 billion, compared toEUR 3.9 billion in 2010. Selling and marketing expenses represented 9.8% of ournet sales in 2011 (9.1%). Selling and marketing expenses included purchaseprice accounting items and other special items of EUR 444 million in 2011 (EUR429 million). Administrative and general expenses were EUR 1.1 billion in 2011, compared toEUR 1.1 billion in 2010. Administrative and general expenses were equal to 2.9%of our net sales in 2011 (2.6%). Administrative and general expenses includedspecial items of EUR 37 million in 2011 (EUR 77 million). Financial income and expenses, net, was an expense of EUR 102 million in 2011(EUR 285 million). The lower net expense in 2011 was primarily driven by lowernet costs related to hedging our cash balances and favorable fluctuations incertain foreign currency exchange rates. Nokia expects financial income andexpenses, net, in 2012 to be an expense of approximately EUR 300 millionprimarily due to higher expected net costs related to hedging our cash balancesas well as higher costs related to Nokia Siemens Networks' financing. Loss before tax was EUR 1.2 billion in 2011 (profit EUR 1.8 billion). Loss wasEUR 1.5 billion (profit of EUR 1.3 billion), based on a loss of EUR 1.2 billion(profit of EUR 1.8 billion) attributable to equity holders of the parent and aloss of EUR 0.3 billion (loss of EUR 0.5 billion) attributable tonon-controlling interests. Earnings per share decreased to EUR -0.31 (dilutedand basic), compared to EUR 0.50 (diluted and basic). The following chart sets out Nokia Group's cash flow for the fiscal years 2011and 2010 and financial position at the end of each of those years, as well asthe year-on-year growth rates. NOKIA GROUP CASH FLOW AND FINANCIAL POSITION ----------------------------------------------EUR million 2011 2010 YoY Change---------------------------------------------Net cash from 1 137 4 774 -76%operating activities. ---------------------------------------------Total cash and 10 902 12 275 -11%other liquid assets ---------------------------------------------Net cash and 5 581 6 996 -20%other liquid assets1 --------------------------------------------- Note 1: Total cash and other liquid assets minus interest-bearing liabilities. Net cash and other liquid assets decreased by EUR 1.4 billion primarily due topayment of the dividend, cash outflows related to the acquisition of MotorolaSolutions' networks assets, and capital expenditures, partially offset bypositive overall net cash from operating activities and a EUR 500 millionequity investment in Nokia Siemens Networks by Siemens. In 2011, capitalexpenditure amounted to EUR 597 million (EUR 679 million). The following discussion of Nokia's three businesses - Devices & Services,Location & Commerce and Nokia Siemens Networks - contains non-IFRS resultswhich exclude special items for all periods. In addition, non-IFRS resultsexclude intangible asset amortization, other purchase price accounting relateditems and inventory value adjustments arising from i) the formation of NokiaSiemens Networks and ii) all business acquisitions completed after June 30,2008. Devices & Services As of April 1, 2011, our Devices & Services business includes two operating andreportable segments - Smart Devices, which focuses on smartphones, and MobilePhones, which focuses on mass market mobile devices - as well as Devices &Services Other. Additionally, in 2011 we announced plans to create a newLocation & Commerce business which combines NAVTEQ and Nokia's social locationservices operations from Devices & Services. The Location & Commerce businessis an operating and reportable segment beginning October 1, 2011. Prior periodresults for each quarter and the full year 2010 and Q1, Q2 and Q3 2011 havebeen recasted (on an unaudited basis) for comparability purposes according tothe new reporting format. Recasted reported financial information can beaccessed at: http://www.nokia.com/investors The following chart sets out a summary of the results for our Devices &Services business and the year-on-year growth rates for the fiscal years 2011and 2010. DEVICES & SERVICES RESULTS SUMMARY ------------------------------------------------ 2011 2010 YoY Change-----------------------------------------------Net sales 23 943 29 134 -18%(EUR millions)1 -----------------------------------------------Mobile device volume 417.1 452.9 -8%(million units) -----------------------------------------------Mobile device 57 64 -11%ASP (EUR) -----------------------------------------------Non-IFRS 27.7% 29.9% gross margin (%) -----------------------------------------------Non-IFRS operating 4 974 5 341 -7%expenses (EUR millions) -----------------------------------------------Non-IFRS operating 7.0% 11.7% margin (%) ----------------------------------------------- Note 1: Includes IPR royalty income recognized in Devices & Services Other netsales. Net SalesThe decline in Devices & Services net sales in 2011 resulted from lower volumesand ASPs in both Smart Devices and Mobile Phones discussed below, partiallyoffset by higher IPR royalty income discussed below. At a constant currency,Devices & Services net sales would have decreased 17% compared to 2010. During the second quarter of 2011, Devices & Services net sales were negativelyimpacted by unexpected sales and inventory patterns, resulting in distributorsand operators purchasing fewer of our devices across our portfolio as theyreduced their inventories of Nokia devices. Devices & Services net sales werealso impacted during the second quarter of 2011 by a negative mix shift towardsdevices with lower average selling prices and lower gross margins. Ourimmediate actions enabled us to create healthier sales channel dynamics duringthe latter weeks of the second quarter 2011. Devices & Services net salesincreased sequentially in the fourth quarter 2011, supported by broader productrenewal in both Mobile Phones, for example dual SIM devices, and Smart Devicesas well as overall industry seasonality. Our overall Devices & Services net sales in 2011 benefited from the recognitionin Devices & Services Other of approximately EUR 450 million (approximately EUR70 million in 2010) of non-recurring IPR royalty income, as well as stronggrowth in the underlying recurring IPR royalty income. We believe thesedevelopments underline Nokia's industry leading patent portfolio. During thelast two decades, we have invested more than EUR 45 billion in research anddevelopment and built one of the wireless industry's strongest and broadest IPRportfolios, with over 10 000 patent families. Nokia is a world leader in thedevelopment of handheld device and mobile communications technologies, which isalso demonstrated by our strong patent position. The following chart sets out the net sales for our Devices & Services businessand year-on-year growth rates by geographic area for the fiscal years 2011 and2010. The IPR royalty income referred to in the paragraph above has beenallocated to the geographic areas contained in this chart. DEVICES & SERVICES NET SALES BY GEOGRAPHIC AREA ---------------------------------------------EUR million 2011 2010 YoY Change----------------------------------------------------------------------------------------Europe 7 064 9 736 -27%Middle East & Africa 4 098 4 046 1%Greater China 5 063 6 167 -18%Asia-Pacific 4 896 6 014 -19%North America 354 901 -61%Latin America 2 468 2 270 9%--------------------------------------------Total 23 943 29 134 -18%-------------------------------------------- VolumeThe following chart sets out the mobile device volumes for our Devices &Services business and year-on-year growth rates by geographic area for thefiscal years 2011 and 2010. DEVICES & SERVICES MOBILE DEVICE VOLUMES BY GEOGRAPHIC AREA -------------------------------------------million units 2011 2010 YoY Change------------------------------------------------------------------------------------Europe 87.8 112.7 -22%Middle East & Africa 94.6 83.8 13%Greater China 65.8 82.5 -20%Asia-Pacific 118.9 119.1 0%North America 3.9 11.1 -65%Latin America 46.1 43.7 5%------------------------------------------Total 417.1 452.9 -8%------------------------------------------ On a year-on-year basis, the decline in our total Devices & Services volumes in2011 was driven by lower volumes in both Smart Devices and Mobile Phonesdiscussed below. Average Selling PriceOn a year-on-year basis, the overall decrease in our Devices & Services ASP in2011 was driven primarily by the higher proportion of Mobile Phone sales,partially offset by the positive impact from higher IPR royalty income and thelower deferral of revenue related to services sold in combination with ourdevices. On a year-on-year basis, the impact from the appreciation of the Euroagainst certain currencies had a slightly negative impact, almost entirelyoffset by the positive impact from foreign currency hedging. Gross MarginOn a year-on-year basis, the decline in our Devices & Services non-IFRS grossmargin in 2011 was driven by gross margin declines in both Smart Devices and toa lesser extent in Mobile Phones discussed below, partially offset by higherIPR royalty income. Operating ExpensesDevices & Services non-IFRS research and development expenses decreased 9%year-on-year in 2011 due to declines in Smart Devices and Devices & ServicesOther research and development expenses, partially offset by an increase inMobile Phones research and development expenses. The decreases in Smart Devicesand Devices & Services Other research and development expenses were dueprimarily to a focus on priority projects and cost controls. The increase inMobile Phones research and development expenses was due primarily toinvestments to accelerate product development to bring new innovations to themarket faster and at lower price-points, consistent with Mobile Phones'internet for the next billion' strategy, partially offset by a focus onpriority projects and cost controls. Devices & Services non-IFRS sales and marketing expenses decreased 4%year-on-year in 2011 primarily driven by lower Smart Devices sales andmarketing expenditure. Devices & Services non-IFRS administrative and general expenses decreased 7%year-on-year in 2011, primarily driven by lower Smart Devices administrativeand general expenses which more than offset an increase in Devices & ServicesOther administrative and general expenses. In 2011, Devices & Services non-IFRS other income and expense was virtuallyunchanged year-on-year. Reported other income and expense was significantlyadversely impacted in 2011 primarily as a result of restructuring relatedexpenses discussed below, which were recognized in Devices & Services Other. Cost Reduction Activities and Planned Operational AdjustmentsWe are targeting to reduce our Devices & Services non-IFRS operating expensesby more than EUR 1 billion for the full year 2013, compared to the recastedfull year 2010 Devices & Services non-IFRS operating expenses of EUR 5.35billion. This reduction is expected to come from a variety of different sourcesand initiatives, including a planned reduction in the number of employees andnormal personnel attrition, a reduction in the use of outsourced professionals,reductions in facility costs, and various improvements in efficiencies. Our cost reduction activities include a strategic collaboration with Accentureto outsource Nokia's Symbian software development and support activities toAccenture. Approximately 2 300 Nokia employees were transferred to Accenture aspart of the transaction which was completed on September 30, 2011. At the end of the third quarter 2011, we announced plans to take additionalactions to align our workforce and operations. The measures include the closureof Nokia's manufacturing facility in Cluj, Romania, which - together withadjustments to supply chain operations - has impacted approximately 2 200employees; a plan to shift the focus of Nokia's manufacturing operations inSalo in Finland, Komarom in Hungary, and Reynosa in Mexico towards customer andmarket-specific software and sales package customization; and a plan toconcentrate the development efforts of Location & Commerce in Berlin inGermany, Boston and Chicago in the U.S., and other supporting sites. Theplanned changes in Location & Commerce, which include the closure of itsoperations in Bonn in Germany and Malvern in the U.S., are estimated to impactapproximately 1 300 employees. The planned measures support the execution of our strategy and also target tobring efficiencies and speed to the organization. In line with the companyvalues, Nokia is offering employees affected by the planned reductions acomprehensive support program. We remain committed to supporting employees andthe local communities through this difficult change. As of December 31, 2011, we had recognized cumulative net charges in Devices &Services of EUR 797 million related to restructuring activities in 2011, whichincluded restructuring charges and associated impairments. While the totalextent of the restructuring activities is still to be determined, we currentlyanticipate cumulative charges in Devices & Services of around EUR 900 millionbefore the end of 2012. We also believe total cash outflows related to ourDevices & Services restructuring activities will be below the level of thecumulative charges related to these restructuring activities. Smart Devices The following chart sets out a summary of the results for our Smart Devicesbusiness unit for the periods indicated, as well as the year-on-year growthrates. SMART DEVICES RESULTS SUMMARY -------------------------------------------------- 2011 2010 YoY Change-------------------------------------------------Net sales (EUR millions)1 10 820 14 874 -27%-------------------------------------------------Smart Devices volume 77.3 103.6 -25%(million units) -------------------------------------------------Smart Devices ASP (EUR) 140 144 -3%-------------------------------------------------Gross margin (%) 23.7% 30.8% -------------------------------------------------Operating expenses 2 974 3 392 -12%(EUR millions) -------------------------------------------------Contribution margin (%) -3.8% 9.3% ------------------------------------------------- Note 1: Does not include IPR royalty income. IPR royalty income is recognizedin Devices & Services Other net sales. Net SalesThe year-on-year decline in our Smart Devices net sales in 2011 was primarilydue to significantly lower volumes and, to a lesser extent, lower ASPs. VolumeThe year-on-year decrease in our Smart Device volumes in 2011 was driven by thestrong momentum of competing smartphone platforms relative to our higher pricedSymbian devices, particularly in Europe and Asia Pacific, as well as pricingtactics by certain competitors. During the second quarter 2011, our SmartDevice volumes were also negatively impacted by distributors and operatorspurchasing fewer of our smartphones as they reduced their inventories of thosedevices which were slightly above normal levels at the end of the first quarter2011, particularly in China. During the second half of 2011, our Symbiancompetitiveness continued to be challenged across the portfolio driving thesignificant year-on-year volume decline. Average Selling PriceThe year-on-year decline in our Smart Devices ASP in 2011 was driven primarilyby price actions due to the competitive environment and the negative impactfrom foreign currency hedging, partially offset by a positive mix shift towardshigher priced smartphones, such as the Nokia N8, Nokia N9 and Lumia devices,and the lower deferral of revenue related to services sold in combination withour devices, particularly in the second half of 2011. Although Smart Devices ASP declined progressively during the first threequarters of 2011, Smart Devices ASP increased sequentially in the fourthquarter 2011, supported by sales of the higher priced Nokia N9 and Nokia Lumiadevices. Gross MarginThe year-on-year decline in our Smart Devices gross margin in 2011 was drivenprimarily by greater price erosion than cost erosion due to the competitiveenvironment, our tactical pricing actions during the second and third quartersof 2011 and an increase in Symbian-related allowances during the fourth quarter2011, as previously discussed in the fourth quarter 2011 Smart Devices grossmargin section. Following the announcement of our strategic partnership with Microsoft inFebruary 2011, our strategy included the expectation to sell approximately 150million more Symbian devices in the years to come. To maximize the value of theSymbian asset going forward, we expect to continue shipping Symbian devices inspecific geographies and channels as well as to continue to provide softwaresupport to our Symbian customers through 2016. As a result of the changingmarket conditions, combined with our increased focus on Lumia, we now believewe will sell fewer Symbian devices than previously anticipated. Thus, in thefourth quarter 2011, we recognized allowances related to excess componentinventory and future purchase commitments. Mobile Phones The following chart sets out a summary of the results for our Mobile Phonesbusiness unit and year-on-year growth rates for the fiscal years 2011 and 2010. MOBILE PHONES RESULTS SUMMARY ------------------------------------------------ 2011 2010 YoY Change-----------------------------------------------Net sales 11 930 13 696 -13%(EUR millions)1 -----------------------------------------------Mobile Phones volume 339.8 349.2 -3%(million units) -----------------------------------------------Mobile Phones 35 39 -10%ASP (EUR) -----------------------------------------------Gross margin (%) 26.1% 28.0% -----------------------------------------------Operating expenses 1 640 1 508 9%(EUR million) -----------------------------------------------Contribution margin (%) 12.4% 17.0% ----------------------------------------------- Note 1: Does not include IPR royalty income. IPR royalty income is recognizedin Devices & Services Other net sales. Net SalesOn a year-on-year basis, our Mobile Phones net sales decreased in 2011 due tolower ASPs and, to a lesser extent, lower volumes. VolumeThe year-on-year decline in our Mobile Phones volumes in 2011 was driven by thechallenging competitive environment, especially during the first half of theyear due to our lack of dual SIM phones, which continued to be a growing partof the market and pressure from a variety of price aggressive competitors whichadversely impacted our Mobile Phones volumes. During 2011, Mobile Phonesvolumes were also negatively impacted by our reduced portfolio of higher pricedmobile phones, as well as by distributors and operators purchasing fewer of ourmobile phones during the second quarter 2011 as they reduced their inventoriesof those devices which were slightly above normal levels at the end of thefirst quarter 2011. During the second half of 2011, our Mobile Phones volumes increasedyear-on-year driven by the introduction and broader availability of our firstdual SIM devices and the ongoing product renewal across the mobile phonesportfolio, which more than offset our reduced portfolio of higher priced mobilephones. Average Selling PriceThe year-on-year decline in our Mobile Phones ASP in 2011 was primarily due toa higher proportion of sales of lower priced devices driven by a reducedportfolio of higher priced mobile phones and our tactical pricing actionsacross the portfolio taken which partially impacted the second quarter 2011 andfully impacted the third quarter 2011. In addition, the appreciation of theEuro against certain currencies contributed to the decline which was partiallyoffset by the positive impact from foreign currency hedging. Gross MarginThe year-on-year decline in our Mobile Phones gross margin in 2011 was dueprimarily to greater price erosion than cost erosion due to the competitiveenvironment and our tactical pricing actions across the portfolio partiallyimpacting the second quarter 2011 and fully impacting the third quarter 2011, anegative impact from foreign currency hedging and the appreciation of the Euroagainst certain currencies, partially offset by a product mix shift towardshigher margin mobile phones. Location & Commerce On June 22, 2011, we announced plans to create a new Location & Commercebusiness which combines NAVTEQ and Nokia's social location services operationsfrom Devices & Services. The Location & Commerce business is an operating andreportable segment beginning October 1, 2011. In addition to a broad portfolioof products and services for the wider internet ecosystem, the Location &Commerce business is creating integrated social location offerings in supportof Nokia's strategic goal in smartphones, including the Nokia experience withWindows Phone, as well as support for bringing the internet to the nextbillion. From the third quarter 2008 until the end of the third quarter 2011,NAVTEQ was a separate reportable segment of Nokia. Prior period results foreach quarter and the full year 2010 and Q1, Q2 and Q3 2011 have been recasted(on an unaudited basis) for comparability purposes according to the newreporting format that became effective on October 1, 2011. Recasted reportedfinancial information can be accessed at: http://www.nokia.com/investors. The following chart sets out a summary of the results for Location & Commerceand year-on-year growth rates for the fiscal years 2011 and 2010. LOCATION & COMMERCE RESULTS SUMMARY -------------------------------------------- 2011 2010 YoY Change-------------------------------------------Net sales 1 091 869 26%(EUR millions) -------------------------------------------Non-IFRS 80.4% 80.6% gross margin (%) -------------------------------------------Non-IFRS 827 871 -5%operating expenses (EUR millions) -------------------------------------------Non-IFRS 4.4% -19.9% operating margin (%) ------------------------------------------- Net SalesThe year-on-year increase in net sales in 2011 was primarily driven by highersales of map content licenses to vehicle customers due to increased consumeruptake of navigation systems and higher recognition of deferred revenue relatedto sales of map platform licenses to Smart Devices. Gross MarginOn a year-on-year basis the non-IFRS gross margin in Location & Commerce wasvirtually unchanged. In 2011, the non-IFRS gross margin benefited from anincreased proportion of higher gross margin sales compared to 2010, which wereoffset by a reclassification of certain data related charges from operatingexpenditure to cost of sales in the fourth quarter of 2011. Operating ExpensesLocation & Commerce non-IFRS research and development expenses decreased 5%primarily driven by a focus on cost controls, lower project spending and ashift of research and development operating expenses to cost of sales as aresult of the divestiture of the media advertising business. Location & Commerce non-IFRS sales and marketing expenses decreased 5%primarily driven by a focus on cost controls and lower product marketingspending. Location & Commerce non-IFRS administrative and general expenses decreased 8%primarily driven by a focus on cost controls, partially offset by increaseddepreciation costs related to closure of offices. Nokia Siemens Networks Nokia Siemens Networks completed the acquisition of Motorola Solutions'networks assets on April 30, 2011. Accordingly, the results of Nokia SiemensNetworks for 2011 are not directly comparable to 2010. The following chart sets out a summary of the results for Nokia SiemensNetworks and year-on-year growth rates for fiscal years 2011 and 2010. NOKIA SIEMENS NETWORKS RESULTS SUMMARY --------------------------------------------- 2011 2010 YoY Change--------------------------------------------Net sales 14 041 12 661 11%(EUR millions) --------------------------------------------Non-IFRS 27.4% 28.2% gross margin (%) --------------------------------------------Non-IFRS 3 662 3 456 6%operating expenses (EUR millions) --------------------------------------------Non-IFRS 1.6% 0.8% operating margin (%) -------------------------------------------- Net SalesThe following chart sets out Nokia Siemens Networks net sales and year-on-yeargrowth rates, by geographic area for fiscal years 2011 and 2010. NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA ---------------------------------------------EUR millions 2011 2010 YoY Change----------------------------------------------------------------------------------------Europe 4 469 4 628 -3%Middle East & Africa 1 391 1 451 -4%Greater China 1 465 1 451 1%Asia-Pacific 3 848 2 915 32%North America 1 077 735 47%Latin America 1 791 1 481 21%--------------------------------------------Total 14 041 12 661 11%-------------------------------------------- The year-on-year increase in Nokia Siemens Networks' net sales in 2011 wasdriven primarily by the contribution from the acquired Motorola Solutionsnetworks assets, which was completed on April 29, 2011. Excluding the acquiredMotorola Solutions networks assets, net sales would have increased 4%year-on-year, primarily driven by growth in services, which representedapproximately 50% of Nokia Siemens Networks' net sales in 2011. At constant currency, Nokia Siemens Networks' net sales would have increased11% year-on-year in 2011. Nokia and Nokia Siemens Networks targeted that Nokia Siemens Networks net saleswould grow faster than the market in 2011. Based on insufficient full yeardata, we believe that it is not yet possible to determine if this target wasachieved. Gross MarginThe slight decline in Nokia Siemens Networks non-IFRS gross margin in 2011 wasprimarily due to the competitive industry environment and an unfavorable salesmix towards lower gross margin revenues, partially offset by the positiveimpact from the acquired Motorola Solutions networks assets. Operating ExpensesNokia Siemens Networks' non-IFRS research and development expenses increased 9%year-on-year in 2011 primarily due to the addition of R&D operations relatingto the acquired Motorola Solutions networks assets as well as investments instrategic initiatives. Nokia Siemens Networks' non-IFRS sales and marketing expenses were virtuallyflat year-on-year in 2011 as the increase from the acquired Motorola Solutionsnetworks was offset by ongoing cost control initiatives. Nokia Siemens Networks' non-IFRS administrative and general expenses increased8% year-on-year in 2011, reflecting the higher net sales and the addition ofMotorola Solutions' network assets. Nokia Siemens Networks' non-IFRS other income increased year-on-year in 2011due primarily to improvements in customer collections. Based on our estimates, Nokia and Nokia Siemens Networks believe that NokiaSiemens Networks was able to materially achieve its target to reduce itsnon-IFRS annualized operating expenses and production overheads by EUR 500million by the end of 2011, compared to the end of 2009. Operating MarginThe higher year-on-year Nokia Siemens Networks non-IFRS operating margin in2011 primarily reflected the higher net sales and lower operating expenseintensity, partially offset by the lower gross margin. Strategy Update and Global Restructuring ProgramOn November 23, 2011 Nokia Siemens Networks announced its strategy to focus onmobile broadband and services and the launch of an extensive globalrestructuring program. Nokia Siemens Networks plans to realign its business to focus on mobilebroadband (including optical), customer experience management and services.Nokia Siemens Networks' services organization will further strengthen itsglobal delivery system. Business areas not consistent with the new strategy areplanned to be divested or managed for value. Quality and innovation willcontinue to be priorities for the company, with ongoing investment in bothareas. Nokia Siemens Networks targets to reduce its non-IFRS annualized operatingexpenses and production overheads by EUR 1 billion by the end of 2013, comparedto the end of 2011. While these savings are expected to come largely fromorganizational streamlining, the company will also target areas such as realestate, information technology, product and service procurement costs, overallgeneral and administrative expenses, and a significant reduction of suppliersin order to further lower costs and improve quality. Nokia Siemens Networks plans to reduce its global workforce by approximately 17000 by the end of 2013. These planned reductions are expected to be driven byaligning the company's workforce with its new strategy as well as through arange of productivity and efficiency measures. These planned measures areexpected to include elimination of the company's matrix organizationalstructure, site consolidation, transfer of activities to global deliverycenters, consolidation of certain central functions, cost synergies from theintegration of Motorola's wireless assets, efficiencies in service operations,and company-wide process simplification. Nokia Siemens Networks will begin the process of engaging with employeerepresentatives in accordance with country-specific legal requirements to findsocially responsible means to address these reduction needs. More informationwill be shared in impacted countries as the process proceeds. In order toreduce the impact of the planned reductions, Nokia Siemens Networks intends tolaunch locally led programs at the most affected sites to provide re-trainingand re-employment support. FULL YEAR 2011 OPERATING HIGHLIGHTS Nokia- Nokia announced a new strategy for its mobile products business, with threecore elements: i) to win in smartphones; ii) to connect the 'next billion'consumers to the Internet and information; and iii) to continue to invest inlong-term exploratory research into the future of mobility and computing. Nokiaoutlined this new strategy in conjunction with an announcement of changes toits leadership team and operational structure designed to accelerate thecompany's speed of execution. Nokia switched to a structure featuring twodistinct business units within our Devices & Services business - Smart Devicesand Mobile Phones - and formed a new business, Location & Commerce. - Location & Commerce was formed by the combination of Nokia's NAVTEQ businesswith Nokia's social location services operations and is focusing on thedevelopment of integrated social location products and services for consumers,as well as platform services and local commerce services for devicemanufacturers, application developers, Internet services providers, merchants,and advertisers. Nokia also announced plans for changes to its R&D operations,including personnel reductions, to support the execution of our new strategy. - In February 2011, Nokia announced the new Nokia Leadership Team (formerly theGroup Executive Board) composed of the following members: Stephen Elop (ChiefExecutive Officer), Esko Aho (Corporate Relations and Responsibility), JuhaAkras (Human Resources), Jerri DeVard (Chief Marketing Officer), Colin Giles(Sales), Richard Green (Chief Technology Officer), Jo Harlow (Smart Devices),Timo Ihamuotila (Chief Financial Officer), Mary McDowell (Mobile Phones), KaiOistamo (Chief Development Officer), Tero Ojanpera (Services & DeveloperExperience, acting), Louise Pentland (Chief Legal Officer) and Niklas Savander(Markets). Michael Halbherr, who was appointed as Executive Vice President tolead the new Location & Commerce business, also became a member of the NokiaLeadership Team, effective July 1, 2011. Henry Tirri was appointed ExecutiveVice President and Chief Technology Officer, effective September 22, 2011,replacing Richard Green. Tero Ojanpera left the Nokia Leadership Team at theend of his contract on September 30, 2011. - Nokia received approval from the Management Board of the Frankfurt StockExchange for its request to delist Nokia shares from the exchange. Inaccordance with the decision, the final day of trading of Nokia shares on theFrankfurt Stock Exchange will be March 16, 2012. - Nokia and Siemens announced the appointment of Jesper Ovesen as ExecutiveChairman of the Board of Nokia Siemens Networks. As Executive Chairman, Ovesenassumes a full-time role with a special emphasis on overseeing the strategicdirection of Nokia Siemens Networks as it seeks to strengthen its position as aleader in the industry and become a more independent entity. - Nokia and Siemens announced that they each provided capital of EUR 500million to Nokia Siemens Networks to further strengthen the company's financialposition. - Nokia was again selected as a component of the Dow Jones Sustainability WorldIndex (DJSI) and Dow Jones Sustainability Europe Index in the DJSI 2011 Review. - Nokia announced that it has signed a patent license agreement with Apple. Theagreement resulted in settlement of all patent litigation between thecompanies, including the withdrawal by Nokia and Apple of their respectivecomplaints to the US International Trade Commission. Devices & Services- Nokia announced plans to establish a new manufacturing site near Hanoi innorthern Vietnam. - To focus feature phone production in locations closest to suppliers and keymarkets, Nokia ended production at its manufacturing facility in Cluj, Romania.Since the end of the quarter, Nokia and De' Longhi, a global leader inhousehold appliances, have announced that they have agreed terms for De' Longhito acquire the facility, subject to approvals by the relevant authorities. Smart Devices- To support its effort to win in smartphones, Nokia announced in February 2011plans to form a broad strategic partnership with Microsoft to combine theirrespective complementary assets and expertise to build a new global mobileecosystem. Under the strategic partnership, which was formalized in April 2011,Nokia is adopting and licensing from Microsoft Windows Phone as its primarysmartphone platform, and has subsequently begun a transition away from Symbian.In October 2011, Nokia launched the Nokia Lumia 800 and Nokia Lumia 710, itsfirst products based on the Windows Phone platform. The Lumia range is designedto bring consumers attractive industrial design, a fast social and Internetexperience, leading imaging capabilities as well as signature Nokia experiencesoptimized for Windows Phone, such as Nokia Drive and Mix Radio. - Nokia's new strategy for smartphones also included personnel reductions aswell as the transfer of approximately 2 300 employees to Accenture as part ofan agreement in which Accenture is providing Symbian software development andsupport activities to Nokia through 2016. Nokia has continued to bring newSymbian smartphones to market, including seven devices during 2011, of whichthree are powered by Belle, the latest version of the Symbian software, whichbrings a major improvement to the user experience. - Nokia launched the Nokia N9, the outcome of efforts in Nokia's MeeGo program.The Nokia N9 is a pure touch smartphone which introduces an innovative newdesign where the home key - typically located at the bottom of the device - isreplaced by a simple gesture: a swipe. Under Nokia's new strategy forsmartphones, MeeGo will place increased emphasis on longer-term marketexploration of next-generation devices, platforms and user experiences. Mobile Phones- To support its effort to connect the 'next billion', Nokia renewed itsstrategy to focus on capturing volume and value growth by leveraging ourinnovation and strength in developing growth markets to provide people with anaffordable Internet experience on their mobile device - in many cases, theirfirst ever Internet experience with any computing device. In the fourthquarter of 2011, Nokia launched the Nokia Asha range of Nokia mobile phones,which offer access to the Internet, integrated social networking, messaging andaccess to applications from Nokia Store. - Nokia's dual SIM technology was among several new innovations during 2011aimed at increasing affordability for the consumer not just at the point ofsale, but in terms of the total cost of ownership of the device. During 2011,Nokia brought to market its first seven dual SIM mobile phones. Mobile Phonesalso developed applications and services specifically with affordability inmind. During 2011, some of Nokia's new mobile phones - including the Nokia Asharange - shipped with a powerful new browser, which compresses data and can thusreduce the cost of browsing the web. Additionally, some new models shipped withour new maps software which provides an advanced, cost-efficient mapsexperience. Nokia Maps for Series 40 is similar to that available on oursmartphones in that people can view maps and plan routes when the phone is inoffline mode. Location & Commerce- During 2011, Location & Commerce continued to develop integratedlocation-based products and services for consumers, as well as platformservices for the wider ecosystem. For consumers, these included: - Nokia Maps, a mobile application that gives people new ways to discover andexplore the world around them, as well as enabling them to search for andnavigate to addresses and places of interest; - Nokia Drive, a dedicated in-car navigation application, equivalent to afully-fledged PND, including voice-guided navigation in multiple languages formore than 100 countries, 2D and 3D map views and day and night modes; - Nokia Public Transport, a dedicated public transport application whichprovides smart public transportation routing for more than 231 cities worldwideon mobile, including timetable routing for bus and train routes for 77 cities; - Nokia Pulse, an application that enables people to instantly share theirlocation or other information with family, friends or any other pre-definedgroup; - Nokia Live View, an augmented reality application that enables people to seeinformation about points of interest - such as a restaurant, hotel or shop - in their camera viewfinder; - Nokia Maps HTML5 - a mobile web version of Nokia Maps providing access toNokia's rich mapping experience to owners of non-Nokia smartphones and tablets; - maps.nokia.com, Nokia's mapping offering on the web, enabling people todiscover the world easy and comfortably with City Pages, heat maps, stunning 3Dmaps for more than 20 cities, a rich places directory, superior content fromleading guides, and local insights from Nokia users. - Location & Commerce continued to build the 'Where' ecosystem with partnersfrom Internet companies as well as the car and mobile industry, includingYahoo! whose maps.yahoo.com offering is now being powered by the Nokia LocationPlatform, benefiting from the latest maps with up-to-date locationdata/addresses, new routing options enabling users to avoid tolls and freeway,updated road networks and points of interest. - Location & Commerce began powering Yahoo! Maps.- NAVTEQ was selected by Ford Motor Company to be its exclusive map supplierfor the SYNC MyFord Touch navigation system. The agreement positions NAVTEQ asthe map data provider for the system in North America, Latin America, theMiddle East, Russia and Europe. - NAVTEQ announced that it is supplying map data and content to Daimler AG forthe Mercedes E Class range plus the CLS-Class model. As a result, almost allDaimler passenger vehicle navigation platforms in Europe will be powered byNAVTEQ. Nokia Siemens Networks- In November 2011, Nokia Siemens Networks announced a new strategy, includingchanges to its organizational structure and a significant restructuring programaimed at making the company an undisputed leader in mobile broadband andservices and improving the company's competitiveness and profitability. - As part of its new strategy, Nokia Siemens Networks is focusing on mobilebroadband and services, and as such has announced a number of planneddivestments, with the sale of its Microwave Transport business to DragonWave,its fixed line Broadband Access business to ADTRAN and its WiMAX unit to NewNetCommunications Technologies. - Throughout 2011, Nokia Siemens Networks announced a number of contracts inthe key area of mobile broadband, including LTE deals with STC in Saudi Arabia,Latvijas Mobilais Telefons in Latvia; with TeliaSonera in Finland, Bell inCanada, LG U+ and SK Telecom in Korea, Telecom Italia and Telefonica O2 inGermany. - To further support its focus on mobile broadband, Nokia Siemens Networks alsooutlined its vision for how broadband must be delivered in the future viaLiquid Net; unveiled three new TD-LTE devices to supply communications serviceproviders and enable the market for TD-LTE; agreed to establish a mobilebroadband focused SmartLab with the Skolkovo Foundation in Russia; and set-up ajoint venture to build 4G LTE equipment with Micran in Tomsk, Russia. SIGNIFICANT ACQUISITIONS AND DIVESTMENTS IN 2011- During the second quarter 2011, Nokia Siemens Networks completed theacquisition of certain wireless network infrastructure assets of MotorolaSolutions, including products and services in relation to GSM, CDMA, WCDMA,WiMAX and LTE. The acquisition is designed to strengthen the company's positionin North America and Japan, adding approximately 6 900 employees across 52countries. - During the fourth quarter 2011, as part of its new strategy, Nokia SiemensNetworks is focusing on mobile broadband and services, and as such hasannounced a number of planned divestments, with the sale of its MicrowaveTransport business to DragonWave, its fixed line Broadband Access business toADTRAN and its WiMAX unit to NewNet Communications Technologies. PERSONNEL The average number of employees during the period from January to December 2011was 134 171, of which the average number of employees at Location & Commerceand Nokia Siemens Networks was 7 187 and 71 825 respectively. At December 31,2011, Nokia employed a total of 130 050 people (132 427 people at December 31,2010), of which 6 659 were employed by Location & Commerce (7 232 people atDecember 31, 2010) and 73 686 were employed by Nokia Siemens Networks (66 160people at December 31, 2010). SHARES The total number of Nokia shares at December 30, 2011 was 3 744 956 052. AtDecember 31, 2011, Nokia and its subsidiary companies owned 34 767 046 Nokiashares, representing approximately 0.9 % of the total number of Nokia sharesand the total voting rights. DIVIDEND Nokia's Board of Directors will propose a dividend of EUR 0.20 for 2011. Thedistributable funds on the balance sheet of the parent company as per December31, 2011 amount to EUR 6 153 million. FORWARD-LOOKING STATEMENTSIt should be noted that certain statements herein which are not historicalfacts are forward-looking statements, including, without limitation, thoseregarding: A) the expected plans and benefits of our strategic partnership withMicrosoft to combine complementary assets and expertise to form a global mobileecosystem and to adopt Windows Phone as our primary smartphone platform; B) thetiming and expected benefits of our new strategy, including expectedoperational and financial benefits and targets as well as changes in leadershipand operational structure; C) the timing of the deliveries of our products andservices; D) our ability to innovate, develop, execute and commercialize newtechnologies, products and services; E) expectations regarding marketdevelopments and structural changes; F) expectations and targets regarding ourindustry volumes, market share, prices, net sales and margins of products andservices; G) expectations and targets regarding our operational priorities andresults of operations; H) expectations and targets regarding collaboration andpartnering arrangements; I) the outcome of pending and threatened litigation;J) expectations regarding the successful completion of acquisitions orrestructurings on a timely basis and our ability to achieve the financial andoperational targets set in connection with any such acquisition orrestructuring; and K) statements preceded by 'believe,' 'expect,' 'anticipate,''foresee,' 'target,' 'estimate,' 'designed,' 'plans,' 'will' or similarexpressions. These statements are based on management's best assumptions andbeliefs in light of the information currently available to it. Because theyinvolve risks and uncertainties, actual results may differ materially from theresults that we currently expect. Factors that could cause these differencesinclude, but are not limited to: 1) our ability to succeed in creating acompetitive smartphone platform for high-quality differentiated winningsmartphones or in creating new sources of revenue through our partnership withMicrosoft; 2) the expected timing of the planned transition to Windows Phone asour primary smartphone platform and the introduction of mobile products basedon that platform; 3) our ability to maintain the viability of our currentSymbian smartphone platform during the transition to Windows Phone as ourprimary smartphone platform; 4) our ability to realize a return on ourinvestment in MeeGo and next generation devices, platforms and userexperiences; 5) our ability to build a competitive and profitable globalecosystem of sufficient scale, attractiveness and value to all participants andto bring winning smartphones to the market in a timely manner; 6) our abilityto produce mobile phones in a timely and cost efficient manner withdifferentiated hardware, localized services and applications; 7) our ability toincrease our speed of innovation, product development and execution to bringnew competitive smartphones and mobile phones to the market in a timely manner;8) our ability to retain, motivate, develop and recruit appropriately skilledemployees; 9) our ability to implement our strategies, particularly our newmobile product strategy; 10) the intensity of competition in the variousmarkets where we do business and our ability to maintain or improve our marketposition or respond successfully to changes in the competitive environment; 11)our ability to maintain and leverage our traditional strengths in the mobileproduct market if we are unable to retain the loyalty of our mobile operatorand distributor customers and consumers as a result of the implementation ofour new strategy or other factors; 12) our success in collaboration andpartnering arrangements with third parties, including Microsoft; 13) thesuccess, financial condition and performance of our suppliers, collaborationpartners and customers; 14) our ability to source sufficient quantities offully functional quality components, subassemblies and software on a timelybasis without interruption and on favorable terms, including the disruption ofproduction and/or deliveries from any of our suppliers as a result of adverseconditions in the geographic areas where they are located; 15) our ability tomanage efficiently our manufacturing, service creation, delivery and logisticswithout interruption; 16) our ability to ensure the timely delivery ofsufficient volumes of products that meet our and our customers' and consumers'requirements and manage our inventory and timely adapt our supply to meetchanging demands for our products; 17) any actual or even alleged defects orother quality, safety and security issues in our products; 18) any actual oralleged loss, improper disclosure or leakage of any personal or consumer datacollected or made available to us or stored in or through our products; 19) ourability to successfully manage costs, including our ability to achieve targetedcosts reductions and to effectively and timely execute related restructuringmeasures, including personnel reductions; 20) our ability to effectively andsmoothly implement the new operational structure for our businesses; 21) thedevelopment of the mobile and fixed communications industry and generaleconomic conditions globally and regionally; 22) exchange rate fluctuations,including, in particular, fluctuations between the euro, which is our reportingcurrency, and the US dollar, the Japanese yen and the Chinese yuan, as well ascertain other currencies; 23) our ability to protect the technologies, which weor others develop or that we license, from claims that we have infringed thirdparties' intellectual property rights, as well as our unrestricted use oncommercially acceptable terms of certain technologies in our products andservices; 24) our ability to protect numerous patented standardized orproprietary technologies from third-party infringement or actions to invalidatethe intellectual property rights of these technologies; 25) the impact ofchanges in government policies, trade policies, laws or regulations andeconomic or political turmoil in countries where our assets are located and wedo business; 26) any disruption to information technology systems and networksthat our operations rely on; 27) unfavorable outcome of litigations; 28)allegations of possible health risks from electromagnetic fields generated bybase stations and mobile products and lawsuits related to them, regardless ofmerit; 29) our ability to achieve targeted costs reductions and increaseprofitability in Nokia Siemens Networks and to effectively and timely executerelated restructuring measures; 30) Nokia Siemens Networks' ability to maintainor improve its market position or respond successfully to changes in thecompetitive environment; 31) Nokia Siemens Networks' liquidity and its abilityto meet its working capital requirements; 32) whether Nokia Siemens Networks isable to successfully integrate the acquired assets of Motorola Solutions'networks business, retain existing customers of the acquired business,cross-sell Nokia Siemens Networks' products and services to customers of theacquired business and otherwise realize the expected synergies and benefits ofthe acquisition; 33) Nokia Siemens Networks' ability to timely introduce newproducts, services, upgrades and technologies; 34) Nokia Siemens Networks'success in the telecommunications infrastructure services market and NokiaSiemens Networks' ability to effectively and profitably adapt its business andoperations in a timely manner to the increasingly diverse service needs of itscustomers; 35) developments under large, multi-year contracts or in relation tomajor customers in the networks infrastructure and related services business;36) the management of our customer financing exposure, particularly in thenetworks infrastructure and related services business; 37) whether ongoing orany additional governmental investigations into alleged violations of law bysome former employees of Siemens AG may involve and affect the carrier-relatedassets and employees transferred by Siemens AG to Nokia Siemens Networks; 38)any impairment of Nokia Siemens Networks customer relationships resulting fromongoing or any additional governmental investigations involving the Siemenscarrier-related operations transferred to Nokia Siemens Networks; as well asthe risk factors specified on pages 12-39 of Nokia's annual report Form 20-Ffor the year ended December 31, 2010 under Item 3D. 'Risk Factors.' Otherunknown or unpredictable factors or underlying assumptions subsequently provingto be incorrect could cause actual results to differ materially from those inthe forward-looking statements. Nokia does not undertake any obligation topublicly update or revise forward-looking statements, whether as a result ofnew information, future events or otherwise, except to the extent legallyrequired. Nokia, Helsinki - January 26, 2012 Media and Investor Contacts:Corporate Communications, tel. +358 7180 34900Investor Relations Europe, tel. +358 7180 34927Investor Relations US, tel. +1 914 368 0555 - Nokia plans to publish its quarterly results in 2012 on the following dates:Q1 on April 19, Q2 on July 19 and Q3 on October 18, 2012. - Nokia plans to publish its annual report, Nokia in 2011, in week 13 of 2012.- Nokia's Annual General Meeting is scheduled to be held on May 3, 2012. www.nokia.com Click on, or paste the following link into your web browser, to view theassociated documents https://newsclient.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=375667 News Source: NASDAQ OMX 26.01.2012 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: MSCLSE Ticker: 0HAFSequence Number: 971Time of Receipt: Jan 26, 2012 12:08:51 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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