Nokia today provided recast segment results for 2015 reflecting the
company's new financial reporting and organizational structure,
following the acquisition of Alcatel-Lucent. Nokia's organizational
structure is intended to enable the company to create an innovation
leader in next generation technology and services. With
state-of-the-art software, hardware and services for any type of
network, Nokia is at the forefront of creating and licensing the
technologies that are increasingly at the heart of our connected
lives.
Three reportable segments
To support Nokia's strategic objectives and reflect the way the
company evaluates operational performance and allocates resources,
Nokia will revise its financial reporting structure. As of the
first quarter 2016, Nokia will have three reportable segments: The
(i) Ultra Broadband Networks and (ii) IP Networks and Applications
reportable segments within Nokia's Networks business and the (iii)
Nokia Technologies reportable segment within the Nokia Technologies
business. In addition, Nokia will disclose segment-level data for
Group Common and Other.
Ultra Broadband Networks
Ultra Broadband Networks is composed of the Mobile Networks and
Fixed Networks business groups.
- The Mobile Networks business group offers an industry-leading
portfolio of end-to-end mobile networking solutions comprising
hardware, software and services for telecommunications operators,
enterprises and related markets/verticals such as public safety and
Internet of Things.
- The Fixed Networks business group provides copper and fiber
access products, solutions, and services. The portfolio allows for
a customized combination of technologies that brings fiber to the
most economical point for the customer.
IP Networks and Applications
IP Networks and Applications is composed of the IP/Optical
Networks and Applications & Analytics business groups.
- The IP/Optical Networks business group provides the key IP
routing and optical transport systems, software and services to
build high capacity network infrastructure for the internet and
global connectivity.
- The Applications & Analytics business group offers software
solutions spanning customer experience management, network
operations and management, communications and collaboration, policy
and charging, as well as Cloud, IoT, security, and analytics
platforms that enable digital services providers and enterprises to
accelerate innovation, monetize services, and optimize their
customer experience.
Nokia Technologies
The Nokia Technologies business group has two main
objectives:
- To drive growth and renewal in its existing patent licensing
business; and
- to build new businesses for Nokia, based on breakthrough
innovation in key technologies and products, in the areas of
Digital Media and Digital Health.
As of the first quarter 2016, the majority of net sales and the
related costs and expenses attributable to licensing and patenting
the separate patent portfolios of Nokia Technologies, Nokia's
Networks business, and Bell Labs will be recorded in Nokia
Technologies. Each reportable segment will continue to separately
record its research and development expenses.
Group Common and Other
As of the first quarter 2016, Group Common and Other includes
the Alcatel Submarine Networks and Radio Frequency Systems
businesses, both of which are being managed as separate entities.
In addition, Group Common and Other includes Bell Labs' operating
expenses, as well as certain corporate-level and centrally-managed
operating expenses.
Supplementary financial information
As of the first quarter 2016, Nokia will additionally provide
supplementary net sales information on a quarterly basis for:
- Services (part of Nokia's Networks business);
- Each of the four business groups that comprise Nokia's Networks
business;
- IP Routing (part of the IP Networks and Applications reportable
segment within Nokia's Networks business); and
- Optical Networks (part of the IP Networks and Applications
reportable segment within Nokia's Networks business).
This disclosure will be presented in the footnotes of the
"Segment information and eliminations" table.
Recast combined company segment financial results
To provide a basis for comparison, the following tables present
a recasting of combined company segment financial results on an
unaudited basis for all four quarters of 2015 separately, as well
as for full year 2015. This financial information has been prepared
to reflect the financial results of the continuing operations of
the combined company as if it had been operating as such for the
full financial year of 2015. Certain accounting policy alignments,
adjustments and reclassifications have been necessary in order to
combine the financial information of Nokia and Alcatel-Lucent, and
these are explained below in the "Basis of preparation" section of
this stock exchange release.
Segment information and eliminations
(comparable combined company information, unaudited) |
|
|
|
|
|
|
|
|
Q1'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Technologies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
Net sales |
4 227 |
1 435 |
5 662 |
273 |
203 |
(8) |
6 129 |
Cost of sales |
(2
815) |
(872) |
(3
686) |
(2) |
(185) |
8 |
(3
865) |
Gross profit |
1 413 |
563 |
1 976 |
271 |
18 |
0 |
2 264 |
% of net sales |
33.4% |
39.3% |
34.9% |
99.3% |
8.8% |
|
36.9% |
Research and development expenses |
(702) |
(321) |
(1 023) |
(72) |
(70) |
0 |
(1 165) |
% of net sales |
17% |
22% |
18% |
27% |
34% |
|
19% |
Selling, general and administrative expenses |
(514) |
(191) |
(705) |
(21) |
(48) |
0 |
(774) |
% of net sales |
12% |
13% |
12% |
8% |
23% |
|
13% |
Other income and
expenses |
(29) |
(10) |
(38) |
1 |
(11) |
0 |
(49) |
Operating profit |
168 |
42 |
209 |
178 |
(111) |
0 |
276 |
% of net
sales |
4.0% |
2.9% |
3.7% |
65.1% |
(54.5)% |
|
4.5% |
1Mobile Networks net sales of EUR 3
686 million, Fixed Networks net sales of EUR 541 million. |
2IP Networks net sales of EUR 729
million, Optical Networks net sales of EUR 320 million,
Applications & Analytics net sales of EUR 385 million. |
3Services net sales of EUR 2 122
million. |
Segment information and eliminations
(comparable combined company information, unaudited) |
|
|
|
|
|
|
|
|
Q2'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Technologies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
Net sales |
4 303 |
1 593 |
5 895 |
219 |
254 |
(5) |
6 363 |
Cost of sales |
(2
775) |
(885) |
(3
661) |
(2) |
(211) |
5 |
(3
868) |
Gross profit |
1 527 |
707 |
2 235 |
217 |
43 |
0 |
2 495 |
% of net sales |
35.5% |
44.4% |
37.9% |
99.1% |
17.0% |
|
39.2% |
Research and development expenses |
(668) |
(307) |
(975) |
(70) |
(73) |
0 |
(1 118) |
% of net sales |
16% |
19% |
17% |
32% |
29% |
|
18% |
Selling, general and administrative expenses |
(523) |
(190) |
(712) |
(28) |
(61) |
0 |
(801) |
% of net sales |
12% |
12% |
12% |
13% |
24% |
|
13% |
Other income and
expenses |
(29) |
(8) |
(36) |
0 |
110 |
0 |
74 |
Operating profit |
308 |
203 |
511 |
120 |
18 |
0 |
649 |
% of net
sales |
7.2% |
12.7% |
8.7% |
54.6% |
7.2% |
|
10.2% |
1Mobile Networks net sales of EUR 3
722 million, Fixed Networks net sales of EUR 580 million. |
2IP Networks net sales of EUR 769
million, Optical Networks net sales of EUR 407 million,
Applications & Analytics net sales of EUR 417 million. |
3Services net sales of EUR 2 220
million. |
Segment information and eliminations
(comparable combined company information, unaudited) |
|
|
|
|
|
|
|
|
Q3'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Technologies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
Net sales |
4 469 |
1 552 |
6 020 |
169 |
211 |
(6) |
6 395 |
Cost of sales |
(2
918) |
(874) |
(3
792) |
(3) |
(195) |
6 |
(3
984) |
Gross profit |
1 551 |
678 |
2 228 |
166 |
16 |
0 |
2 410 |
% of net sales |
34.7% |
43.7% |
37.0% |
98.3% |
7.4% |
|
37.7% |
Research and development expenses |
(604) |
(301) |
(904) |
(55) |
(64) |
0 |
(1 024) |
% of net sales |
14% |
19% |
15% |
33% |
30% |
|
16% |
Selling, general and administrative expenses |
(490) |
(180) |
(670) |
(27) |
(51) |
0 |
(748) |
% of net sales |
11% |
12% |
11% |
16% |
24% |
|
12% |
Other income and
expenses |
21 |
4 |
25 |
0 |
19 |
0 |
44 |
Operating profit |
478 |
200 |
678 |
84 |
(80) |
0 |
682 |
% of net
sales |
10.7% |
12.9% |
11.3% |
49.6% |
(38.0)% |
|
10.7% |
1Mobile Networks net sales of EUR 3
903 million, Fixed Networks net sales of EUR 566 million. |
2IP Networks net sales of EUR 783
million, Optical Networks net sales of EUR 345 million,
Applications & Analytics net sales of EUR 424 million. |
3Services net sales of EUR 2 184
million. |
Segment information and eliminations
(comparable combined company information, unaudited) |
|
|
|
|
|
|
|
|
Q4'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Technologies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
Net sales |
5 081 |
1 976 |
7 057 |
413 |
254 |
(4) |
7 719 |
Cost of sales |
(3
161) |
(1
065) |
(4
226) |
(4) |
(222) |
4 |
(4
447) |
Gross profit |
1 920 |
911 |
2 830 |
409 |
32 |
0 |
3 272 |
% of net sales |
37.8% |
46.1% |
40.1% |
99.1% |
12.5% |
|
42.4% |
Research and development expenses |
(682) |
(329) |
(1 011) |
(73) |
(77) |
0 |
(1 161) |
% of net sales |
13% |
17% |
14% |
18% |
30% |
|
15% |
Selling, general and administrative expenses |
(552) |
(209) |
(761) |
(33) |
(58) |
0 |
(852) |
% of net sales |
11% |
11% |
11% |
8% |
23% |
|
11% |
Other income and
expenses |
16 |
23 |
39 |
7 |
(25) |
0 |
20 |
Operating profit |
702 |
396 |
1 097 |
311 |
(129) |
0 |
1 279 |
% of net
sales |
13.8% |
20.0% |
15.6% |
75.2% |
(50.7)% |
|
16.6% |
1Mobile Networks net sales of EUR 4
382, Fixed Networks net sales of EUR 698 million. |
2IP Networks net sales of EUR 930
million, Optical Networks net sales of EUR 512 million,
Applications & Analytics net sales of EUR 535 million. |
3Services net sales of EUR 2 500
million. |
Segment information and eliminations
(comparable combined company information, unaudited) |
|
|
|
|
|
|
|
|
Q1-Q4'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Technologies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
Net sales |
18 079 |
6 555 |
24 634 |
1 074 |
921 |
(24) |
26 606 |
Cost of sales |
(11
669) |
(3
696) |
(15
365) |
(10) |
(813) |
24 |
(16
164) |
Gross profit |
6 410 |
2 859 |
9 269 |
1 064 |
108 |
0 |
10 441 |
% of net sales |
35.5% |
43.6% |
37.6% |
99.0% |
11.8% |
|
39.2% |
Research and development expenses |
(2 655) |
(1 258) |
(3 914) |
(270) |
(284) |
0 |
(4 468) |
% of net sales |
15% |
19% |
16% |
25% |
31% |
|
17% |
Selling, general and administrative expenses |
(2 078) |
(770) |
(2 848) |
(109) |
(219) |
0 |
(3 175) |
% of net sales |
11% |
12% |
12% |
10% |
24% |
|
12% |
Other income and
expenses |
(20) |
9 |
(11) |
7 |
93 |
0 |
89 |
Operating profit |
1 656 |
840 |
2 496 |
692 |
(301) |
0 |
2 887 |
% of net
sales |
9.2% |
12.8% |
10.1% |
64.4% |
(32.7)% |
|
10.8% |
1Mobile Networks net sales of EUR 15
694 million, Fixed Networks net sales of EUR 2 385 million. |
2IP Networks net sales of EUR 3 211
million, Optical Networks net sales of EUR 1 584 million,
Applications & Analytics net sales of EUR 1 760 million. |
3Services net sales of EUR 9 026
million. |
Recast combined company net sales by geographic area for
Nokia's Networks business
The geographic exposure for Nokia's Networks business has
changed significantly, following the acquisition of Alcatel-Lucent.
The following table provides a recasting of combined company net
sales for Nokia's Networks business by geographic area on an
unaudited basis for all four quarters of 2015 separately, as well
as for full year 2015.
NET SALES BY GEOGRAPHIC AREA
(comparable combined company information, unaudited) |
|
|
|
|
|
|
NOKIA'S NETWORKS BUSINESS |
|
|
|
EUR
million |
Q1'15 |
Q2'15 |
Q3'15 |
Q4'15 |
Q1-Q4'15 |
Asia-Pacific |
1 155 |
1 033 |
1 080 |
1 198 |
4 465 |
Europe |
1 242 |
1 364 |
1 374 |
1 617 |
5 597 |
Greater China |
604 |
707 |
895 |
916 |
3 122 |
Latin America |
320 |
421 |
431 |
594 |
1 766 |
Middle East & Africa |
443 |
539 |
507 |
596 |
2 085 |
North America |
1
899 |
1
831 |
1
733 |
2
136 |
7
599 |
Total |
5
662 |
5
895 |
6
020 |
7
057 |
24
634 |
Recast Nokia standalone segment financial results
In addition, to fulfill external reporting requirements, the
following tables include a recasting of Nokia's standalone
historical financial results, on an unaudited basis for all four of
the quarters of 2015 separately, as well as for full year 2015.
This financial information has been prepared to reflect the
financial results of the continuing operations of Nokia on a
standalone basis. Certain accounting policy alignments, adjustments
and reclassifications have been necessary, and these are explained
below in the "Basis of preparation" section of this stock exchange
release.
Segment information and eliminations
(Nokia standalone historicals, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Q1'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Techno- logies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
Non-IFRS
exclu- sions 4 |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
|
|
Net sales |
2 355 |
317 |
2 671 |
267 |
0 |
(4) |
2 935 |
0 |
2 935 |
Cost of sales |
(1
556) |
(194) |
(1
750) |
(2) |
(1) |
4 |
(1
749) |
(2) |
(1
751) |
Gross profit |
799 |
122 |
922 |
265 |
(1) |
0 |
1 186 |
(2) |
1 184 |
% of net sales |
33.9% |
38.7% |
34.5% |
99.3% |
|
|
40.5% |
|
40.4% |
Research and develop- ment expenses |
(383) |
(75) |
(458) |
(58) |
(19) |
0 |
(536) |
(7) |
(543) |
% of net sales |
16% |
24% |
17% |
22% |
|
|
18% |
|
19% |
Selling, general and admin- istrative
expenses |
(277) |
(67) |
(344) |
(21) |
(18) |
0 |
(383) |
(10) |
(393) |
% of net sales |
12% |
21% |
13% |
8% |
|
|
13% |
|
13% |
Other income and
expenses |
(6) |
(3) |
(9) |
1 |
(11) |
0 |
(19) |
0 |
(19) |
Operating profit |
133 |
(22) |
111 |
186 |
(49) |
0 |
248 |
(20) |
228 |
% of net
sales |
5.7% |
(7.0)% |
4.2% |
69.6% |
|
|
8.5% |
|
7.8% |
1Mobile Networks net sales of EUR 2
317 million, Fixed Networks net sales of EUR 38 million. |
|
|
2IP Networks net sales of EUR 136
million, Applications & Analytics net sales of EUR 180
million. |
|
|
3Services net sales of EUR 1 266
million. |
|
|
4Non-IFRS
measures exclude goodwill impairment charges, intangible asset
amortization and items related to purchase price allocation, as
well as restructuring-related costs, costs related to the
Alcatel-Lucent transaction and certain other items that may not be
indicative of the Group's underlying business. |
Segment information and eliminations
(Nokia standalone historicals, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Q2'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Techno- logies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
Non-IFRS
exclu- sions 4 |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
|
|
Net sales |
2 440 |
289 |
2 729 |
194 |
0 |
(4) |
2 919 |
0 |
2 919 |
Cost of sales |
(1
477) |
(139) |
(1
615) |
(2) |
1 |
4 |
(1
612) |
37 |
(1
575) |
Gross profit |
963 |
150 |
1 113 |
193 |
1 |
0 |
1 306 |
37 |
1 343 |
% of net sales |
39.5% |
51.9% |
40.8% |
99.0% |
|
|
44.8% |
|
46.0% |
Research and develop- ment expenses |
(360) |
(64) |
(424) |
(57) |
(22) |
0 |
(503) |
(13) |
(516) |
% of net sales |
15% |
22% |
16% |
29% |
|
|
17% |
|
18% |
Selling, general and admin- istrative
expenses |
(296) |
(69) |
(365) |
(28) |
(29) |
0 |
(421) |
(27) |
(448) |
% of net sales |
12% |
24% |
13% |
14% |
|
|
14% |
|
15% |
Other income and
expenses |
4 |
2 |
7 |
0 |
107 |
0 |
114 |
0 |
114 |
Operating profit |
312 |
19 |
331 |
108 |
57 |
0 |
496 |
(3) |
493 |
% of net
sales |
12.8% |
6.6% |
12.1% |
55.5% |
|
|
17.0% |
|
16.9% |
1Mobile Networks net sales of EUR 2
407 million, Fixed Networks net sales of EUR 33 million. |
|
|
2IP Networks net sales of EUR 103
million, Applications & Analytics net sales of EUR 185
million. |
|
|
3Services net sales of EUR 1 359
million. |
|
|
4Non-IFRS
measures exclude goodwill impairment charges, intangible asset
amortization and items related to purchase price allocation, as
well as restructuring-related costs, costs related to the
Alcatel-Lucent transaction and certain other items that may not be
indicative of the Group's underlying business. |
Segment information and eliminations
(Nokia standalone historicals, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Q3'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Techno- logies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
Non-IFRS
exclu- sions 4 |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
|
|
Net sales |
2 548 |
329 |
2 877 |
163 |
0 |
(4) |
3 036 |
0 |
3 036 |
Cost of sales |
(1
573) |
(149) |
(1
722) |
(2) |
0 |
4 |
(1
720) |
0 |
(1
720) |
Gross profit |
975 |
180 |
1 155 |
161 |
0 |
0 |
1 316 |
0 |
1 316 |
% of net sales |
38.3% |
54.7% |
40.1% |
98.9% |
|
|
43.4% |
|
43.4% |
Research and develop- ment expenses |
(346) |
(63) |
(410) |
(45) |
(18) |
0 |
(473) |
(8) |
(481) |
% of net sales |
14% |
19% |
14% |
28% |
|
|
16% |
|
16% |
Selling, general and admin- istrative
expenses |
(271) |
(65) |
(336) |
(27) |
(22) |
0 |
(385) |
(37) |
(422) |
% of net sales |
11% |
20% |
12% |
16% |
|
|
13% |
|
14% |
Other income and
expenses |
3 |
0 |
3 |
0 |
17 |
0 |
20 |
(100) |
(80) |
Operating profit |
360 |
52 |
412 |
89 |
(23) |
0 |
478 |
(145) |
333 |
% of net
sales |
14.1% |
15.8% |
14.3% |
54.7% |
|
|
15.8% |
|
11.0% |
1Mobile Networks net sales of EUR 2
522 million, Fixed Networks net sales of EUR 26 million. |
|
|
2IP Networks net sales of EUR 128
million, Applications & Analytics net sales of EUR 201
million. |
|
|
3Services net sales of EUR 1 304
million. |
|
|
4Non-IFRS
measures exclude goodwill impairment charges, intangible asset
amortization and items related to purchase price allocation, as
well as restructuring-related costs, costs related to the
Alcatel-Lucent transaction and certain other items that may not be
indicative of the Group's underlying business. |
Segment information and eliminations
(Nokia standalone historicals, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Q4'15 |
Ultra
Broadband Networks 1 |
IP Networks
and Appli- cations 2 |
Networks
business Total 3 |
Nokia
Techno- logies |
Group Common
and Other |
Elimi-
nations |
Nokia
Total |
Non-IFRS
exclu- sions 4 |
Nokia
Total |
EUR million |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
non-IFRS |
|
|
Net sales |
2 815 |
395 |
3 210 |
403 |
0 |
(4) |
3 609 |
0 |
3 609 |
Cost of sales |
(1
748) |
(170) |
(1
918) |
(2) |
0 |
4 |
(1
916) |
0 |
(1
916) |
Gross profit |
1 067 |
224 |
1 292 |
401 |
0 |
0 |
1 693 |
0 |
1 693 |
% of net sales |
37.9% |
56.8% |
40.2% |
99.5% |
|
|
46.9% |
|
46.9% |
Research and develop- ment expenses |
(380) |
(67) |
(447) |
(60) |
(24) |
0 |
(531) |
(9) |
(540) |
% of net sales |
14% |
17% |
14% |
15% |
|
|
15% |
|
15% |
Selling, general and admin- istrative
expenses |
(303) |
(73) |
(376) |
(33) |
(29) |
0 |
(437) |
(70) |
(507) |
% of net sales |
11% |
18% |
12% |
8% |
|
|
12% |
|
14% |
Other income and
expenses |
21 |
5 |
26 |
7 |
(22) |
0 |
11 |
(14) |
(3) |
Operating profit |
405 |
90 |
495 |
316 |
(74) |
0 |
736 |
(93) |
643 |
% of net
sales |
14.4% |
22.7% |
15.4% |
78.3% |
|
|
20.4% |
|
17.8% |
1Mobile Networks net sales of EUR 2
776 million, Fixed Networks net sales of EUR 39 million. |
|
|
2IP Networks net sales of EUR 147
million, Applications & Analytics net sales of EUR 247
million. |
|
|
3Services net sales of EUR 1 495
million. |
|
|
4Non-IFRS
measures exclude goodwill impairment charges, intangible asset
amortization and items related to purchase price allocation, as
well as restructuring-related costs, costs related to the
Alcatel-Lucent transaction and certain other items that may not be
indicative of the Group's underlying business. |
Segment information and eliminations
(Nokia standalone historicals, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Q1-Q4'15 |
Ultra Broad-
band Net- works 1 |
IP Net-
works and Appli- cations 2 |
Net- works
busi- ness Total 3 |
Nokia
Techno- logies |
Group Common
and Other |
Elimi- na-
tions |
Nokia
Total |
Non- IFRS
exclu- sions 4 |
Nokia
Total |
EUR million |
non-
IFRS |
non-
IFRS |
non-
IFRS |
non-
IFRS |
non-
IFRS |
non-
IFRS |
non-
IFRS |
|
|
Net sales |
10 158 |
1 328 |
11 486 |
1 027 |
0 |
(15) |
12 499 |
0 |
12 499 |
Cost of sales |
(6
353) |
(652) |
(7
005) |
(7) |
0 |
15 |
(6
998) |
36 |
(6
962) |
Gross profit |
3 805 |
676 |
4 481 |
1 020 |
0 |
0 |
5 501 |
35 |
5 536 |
% of net sales |
37.5% |
50.9% |
39.0% |
99.3% |
|
|
44.0% |
|
44.3% |
Research and develop- ment expenses |
(1 470) |
(269) |
(1 739) |
(220) |
(84) |
0 |
(2 042) |
(38) |
(2 080) |
% of net sales |
14% |
20% |
15% |
21% |
|
|
16% |
|
17% |
Selling, general and admi- nistrative
expenses |
(1 147) |
(274) |
(1 421) |
(108) |
(97) |
0 |
(1 626) |
(144) |
(1 771) |
% of net sales |
11% |
21% |
12% |
11% |
|
|
13% |
|
14% |
Other income and
expenses |
22 |
4 |
26 |
7 |
92 |
0 |
126 |
(114) |
12 |
Operating profit |
1 210 |
138 |
1 349 |
698 |
(89) |
0 |
1 958 |
(261) |
1 697 |
% of net
sales |
11.9% |
10.4% |
11.7% |
68.0% |
|
|
15.7% |
|
13.6% |
1Mobile Networks net sales of EUR 10
022 million, Fixed Networks net sales of EUR 136 million. |
|
|
2IP Networks net sales of EUR 514
million, Applications & Analytics net sales of EUR 813
million. |
|
|
3Services net sales of EUR 5 424
million. |
|
|
4Non-IFRS
measures exclude goodwill impairment charges, intangible asset
amortization and items related to purchase price allocation, as
well as restructuring-related costs, costs related to the
Alcatel-Lucent transaction and certain other items that may not be
indicative of the Group's underlying business. |
Basis of preparation
The recast combined company financial results presented in this
press release are derived from the unaudited condensed financial
information presented in the interim reports of Nokia and
Alcatel-Lucent for all quarters of 2015 and from the audited
financial information presented in the annual report for 2015 for
Nokia. Nokia financial information includes only continuing
operations, which means that all periods presented exclude the
historical operating results attributable to the divested HERE
business. The accounting impact of the purchase price allocation
done on Alcatel-Lucent, upon acquisition by Nokia, is not reflected
in the combined company financial results.
The following tables provide a summary of the adjustments and
reclassifications that have been made to align Alcatel-Lucent's and
Nokia's historical income statement information with the combined
company's accounting policies and financial statement presentation.
These include the:
- Reclassification of certain items from net sales to offset
R&D expenses or to be included in other income as these do not
reflect the ordinary activities of the combined company;
- reclassification of items, such as change in the bad debt
reserve, expenses related to field trials and gains on sales of
assets from cost of sales to R&D expenses and to offset
SG&A expenses and other expenses to meet the definitions of
these line items in the combined company;
- reclassification of withholding taxes to income taxes instead
of presenting them within the operational income statement
items;
- reclassification of discounting costs & hedging, bonds
& guarantees, litigation costs and capital gain/loss on
disposal of entities from below operating profit to other expenses
to reflect the application of the combined company accounting
policy;
- some R&D expenses and cost of development work on internal
use software that were previously capitalized by Alcatel-Lucent and
have now been expensed as incurred due to adoption of the combined
company accounting policy;
- reclassification of net interest expenses related to defined
benefit pension plans from operational income statement items to
financial items below operating profit; and
- reallocation of items of costs and expenses based on their
nature and the definition of the line items in the combined company
accounting policies. These reallocations relate to procurement,
order management, project financial controllers, learning solution
management, product line management and communications.
The recast combined company financial information has been
prepared by management for illustrative purposes only and is not
necessarily indicative of the financial position or results of
Nokia's operations that would have been realized had the
acquisition of Alcatel-Lucent or the sale of the HERE business
occurred earlier, nor is it meant to be indicative of any
anticipated future results of operations.
Accounting reclassifications and
accounting policy alignments |
|
|
|
|
|
|
|
|
|
Q1'15 EUR million |
Nokia historical non-IFRS |
Alcatel-Lucent historical non-IFRS |
Accounting reclassifications and accounting policy
alignments |
Eliminations |
Total Nokia non-IFRS |
|
|
Net sales |
2 935 |
3 235 |
(33) |
(8) |
6 129 |
|
Cost of sales |
(1
769) |
(2
116) |
12 |
8 |
(3
865) |
|
Gross profit |
1 165 |
1 119 |
(20) |
0 |
2 264 |
|
Research and development expenses |
(547) |
(609) |
(9) |
0 |
(1 165) |
|
Selling, general and administrative expenses |
(353) |
(428) |
7 |
0 |
(774) |
|
Other income and
expenses |
(19) |
- |
(30) |
0 |
(49) |
|
Operating
profit |
246 |
82 |
(52) |
0 |
276 |
|
Q2'15 EUR million |
Nokia historical non-IFRS |
Alcatel-Lucent historical non-IFRS |
Accounting reclassifications and accounting policy
alignments |
Eliminations |
Total Nokia non-IFRS |
|
|
Net sales |
2 919 |
3 450 |
(1) |
(5) |
6 363 |
|
Cost of sales |
(1
637) |
(2
248) |
12 |
5 |
(3
868) |
|
Gross profit |
1 282 |
1 202 |
11 |
0 |
2 495 |
|
Research and development expenses |
(516) |
(591) |
(11) |
0 |
(1 118) |
|
Selling, general and administrative expenses |
(386) |
(436) |
21 |
0 |
(801) |
|
Other income and
expenses |
114 |
- |
(40) |
0 |
74 |
|
Operating
profit |
494 |
175 |
(20) |
0 |
649 |
|
Q3'15 EUR million |
Nokia historical non-IFRS |
Alcatel-Lucent historical non-IFRS |
Accounting reclassifications and accounting policy
alignments |
Eliminations |
Total Nokia non-IFRS |
|
|
Net sales |
3 036 |
3 429 |
(64) |
(6) |
6 395 |
|
Cost of sales |
(1
738) |
(2
247) |
(5) |
6 |
(3
984) |
|
Gross profit |
1 297 |
1 182 |
(69) |
0 |
2 410 |
|
Research and development expenses |
(484) |
(548) |
8 |
0 |
(1 024) |
|
Selling, general and administrative expenses |
(358) |
(422) |
32 |
0 |
(748) |
|
Other income and
expenses |
20 |
- |
24 |
0 |
44 |
|
Operating
profit |
475 |
212 |
(5) |
0 |
682 |
|
Q4'15 EUR million |
Nokia historical non-IFRS |
Alcatel-Lucent historical non-IFRS |
Accounting reclassifications and accounting policy
alignments |
Eliminations |
Total Nokia non-IFRS |
|
|
Net sales |
3 609 |
4 161 |
(47) |
(4) |
7 719 |
|
Cost of sales |
(1
936) |
(2
521) |
6 |
4 |
(4
447) |
|
Gross profit |
1 673 |
1 640 |
(41) |
0 |
3 272 |
|
Research and development expenses |
(541) |
(603) |
(17) |
0 |
(1 161) |
|
Selling, general and administrative expenses |
(410) |
(477) |
35 |
0 |
(852) |
|
Other income and
expenses |
11 |
- |
9 |
0 |
20 |
|
Operating
profit |
734 |
560 |
(15) |
0 |
1
279 |
|
Q1-Q4'15 EUR million |
Nokia historical non-IFRS |
Alcatel-Lucent historical non-IFRS |
Accounting reclassifications and accounting policy
alignments |
Eliminations |
Total Nokia non-IFRS |
|
|
Net sales |
12 499 |
14 275 |
(144) |
(24) |
26 606 |
|
Cost of sales |
(7
081) |
(9
132) |
25 |
24 |
(16
164) |
|
Gross profit |
5 418 |
5 143 |
(120) |
0 |
10 441 |
|
Research and development expenses |
(2 088) |
(2 351) |
(29) |
0 |
(4 468) |
|
Selling, general and administrative expenses |
(1 507) |
(1 763) |
95 |
0 |
(3 175) |
|
Other income and
expenses |
126 |
- |
(37) |
0 |
89 |
|
Operating
profit |
1
949 |
1
029 |
(91) |
0 |
2
887 |
|
About Nokia
Nokia is a global leader in the technologies that connect people
and things. Powered by the innovation of Bell Labs and Nokia
Technologies, the company is at the forefront of creating and
licensing the technologies that are increasingly at the heart of
our connected lives.
With state-of-the-art software, hardware and services for any
type of network, Nokia is uniquely positioned to help communication
service providers, governments, and large enterprises deliver on
the promise of 5G, the Cloud and the Internet of Things.
http://nokia.com
Media Enquiries: Nokia Communications Tel. +358 (0) 10
448 4900 Email: press.services@nokia.com
Investor Enquiries: Nokia Investor Relations Tel. +358
4080 3 4080 Email: investor.relations@nokia.com
RISKS AND FORWARD-LOOKING STATEMENTS It should be noted
that Nokia and its businesses are exposed to various risks and
uncertainties and certain statements herein that are not historical
facts are forward-looking statements, including, without
limitation, those regarding: A) our ability to integrate Alcatel
Lucent into our operations and achieve the targeted business plans
and benefits, including targeted synergies in relation to the
acquisition of Alcatel Lucent announced on April 15, 2015 and
closed in early 2016; B) expectations, plans or benefits related to
our strategies and growth management; C) expectations, plans or
benefits related to future performance of our businesses; D)
expectations, plans or benefits related to changes in our
management and other leadership, operational structure and
operating model, financial reporting structure and reportable
segments, including the expected characteristics, business,
organizational structure, management and operations following the
acquisition of Alcatel Lucent; E) the accounting policy alignments,
adjustments and reclassifications related to the recast combined
company financial information; F) expectations regarding market
developments, general economic conditions and structural changes;
G) expectations and targets regarding financial performance,
results, operating expenses, taxes, cost savings and
competitiveness, as well as results of operations including
targeted synergies and those related to market share, prices, net
sales, income and margins; and H) statements preceded by or
including "believe," "expect," "anticipate," "foresee," "sees,"
"target," "estimate," "designed," "aim," "plans," "intends,"
"focus," "continue," "project," "should," "will" or similar
expressions. These statements are based on the management's best
assumptions and beliefs in light of the information currently
available to it. Because they involve risks and uncertainties,
actual results may differ materially from the results that we
currently expect. Factors, including risks and uncertainties, that
could cause such differences include, but are not limited to: 1)
our ability to execute our strategy, sustain or improve the
operational and financial performance of our business or correctly
identify or successfully pursue business opportunities or growth;
2) our ability to achieve the anticipated business and operational
benefits and synergies from the Alcatel Lucent transaction,
including our ability to integrate Alcatel Lucent into our
operations and within the timeframe targeted, and our ability to
implement our organization and operational structure efficiently;
and 3) our ability to manage and improve our financial and
operating performance, cost savings, competitiveness and synergy
benefits after the acquisition of Alcatel Lucent, as well as the
risk factors specified on pages 69 to 87 of our annual report on
Form 20-F filed on April 1, 2016 under "Operating and financial
review and prospects-Risk factors", as well as in Nokia's other
filings with the U.S. Securities and Exchange Commission. Other
unknown or unpredictable factors or underlying assumptions
subsequently proven to be incorrect could cause actual results to
differ materially from those in the forward-looking statements. We
do not undertake any obligation to publicly update or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
HUG#2005798
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