TIDMNOKIA
Nokia Corporation
Interim report
29 October 2020 at 08:00 (CET +1)
Nokia Corporation Interim Report for Q3 and January-September 2020
Solid margin and free cash flow; net sales decline primarily due to
services
-- Continued improvements in our Mobile Access portfolio; reducing product
costs and improving product performance; commitment to invest in R&D to
drive product leadership
-- 7% year-on-year decrease in net sales, largely driven by lower services
within Mobile Access, consistent with our expectation for lower network
deployment services
-- Strong year-on-year growth in Nokia Enterprise
-- Continued margin expansion year-on-year, primarily driven by Mobile
Access and Optical Networks
-- Positive operating profit, on a reported basis, in Q3 and first nine
months of 2020
-- Solid free cash flow in Q3 and the first nine months of 2020
-- Adjusted 2020 outlook midpoints for non-IFRS EPS to EUR 0.23 (from EUR
0.25) and operating margin to 9.0% (from 9.5%), with the new midpoints
and ranges within the previously provided outlook ranges
-- Provided new outlook for 2021 non-IFRS operating margin of 7-10%
-- Long term outlook to be provided latest at the Capital Markets Day on
March 18, 2021
This is a summary of the Nokia Corporation Interim Report for Q3 and
January-September 2020 published today. The complete Interim Report for
Q3 and January-September 2020 with tables is available at
https://www.globenewswire.com/Tracker?data=XPamBNLwnKNl3BEKUNYJTX0CC4JMvJL021VFHQy5bfkzgDSwSbuAjicQt7Kg-Bj6PX3QaF48ID84mBhPlshAZdkj-RSoco_QNQuwFMryH2U=
www.nokia.com/financials. Investors should not rely on summaries of our
financial reports only, but should review the complete financial reports
with tables.
PEKKA LUNDMARK, PRESIDENT AND CEO, ON Q3 2020 RESULTS
In my first quarter as CEO of Nokia, I have seen both opportunities and
challenges. As our solid Q3 results demonstrate, we are making good
progress in many parts of our business. Profitability was up on a
year-on-year basis, we had the fifth consecutive quarter of solid free
cash flow, Nokia Enterprise maintained its double-digit growth, and we
continued to strengthen the competitiveness and cost position of our
mobile radio products.
When I look ahead, however, the good progress we have made is not
enough. Our financial performance in 2021 is expected to be challenging,
and more change is needed. We have lost share at one large North
American customer, see some margin pressure in that market, and believe
we need to further increase R&D investments to ensure leadership in 5G.
In fact, we have decided that we will invest whatever it takes to win in
5G. Our customers are counting on us and we will be there for them.
We announced separately today some important changes to our operating
model. The goal of this new model is to better align with the needs of
our customers, and through that improve our performance and create
shareholder value. The changes announced today mark a shift from
end-to-end as a strategic principle to a more focused approach with each
business group having a distinct role in our overall strategy.
Each of the four new business groups will have P&L responsibility and
ownership of creating a path to becoming one of the market leaders in
their respective sector. The changes optimize our operating model for
better accountability and transparency, increased simplicity and
cost-efficiency.
We plan to share more details about our strategy in December and at a
Capital Markets Day in March. A more rigorous approach to capital
allocation will be key to our strategic direction. As a technology
company we will invest to win in those segments where we choose to
compete.
Equally important is our view of the future, where we see an opportunity
to lead in "network-as-a-service" business models for telecom operators
and enterprise customers. This change offers a broad opportunity for
Nokia to provide a trusted, software-led and cloud-based network
capability that can be rapidly integrated, deployed, and self-managed as
a complete service, allowing us to move up the value chain and provide
additional "network plus" value-adding services. This vision will take
time to become a reality, but Nokia is well positioned to win given our
deep experience in delivering carrier-grade network performance and
extensive work with webscale companies and enterprises.
I have no doubt that the potential of Nokia is substantial, even if
delivering on that promise will take time. We expect to stabilize our
financial performance in 2021 and deliver progressive improvement
towards our long-term goal after that. We intend to provide an update on
long-term outlook at the latest on Capital Markets Day. I am confident
that with the right strategy, focus, and operating model we will be
successful. Today, we embark on that journey.
NOKIA FINANCIAL RESULTS
Constant Constant
EUR million (except YoY currency YoY currency
for EPS in EUR) Q3'20 Q3'19 change YoY change Q1-Q3'20 Q1-Q3'19 change YoY change
---------------------- ----- ----- ------ ----------- -------- -------- ------ -----------
Net sales 5 294 5 686 (7)% (3)% 15 299 16 412 (7)% (6)%
Networks 4 112 4 434 (7)% (3)% 11 825 12 770 (7)% (6)%
Nokia Software 585 677 (14)% (10)% 1 795 1 898 (5)% (4)%
Nokia Technologies 331 358 (8)% (8)% 1 020 1 112 (8)% (8)%
Group Common and
Other 275 236 17% 16% 691 720 (4)% (5)%
Non-IFRS
exclusions (1) (2) (2) (29)
Eliminations (9) (17) (29) (58)
Gross profit 1 976 1 969 0% 5 760 5 614 3%
Operating
profit/(loss) 350 264 33% 444 (318)
Networks 263 128 105% 431 (7)
Nokia Software 87 156 (44)% 246 286 (14)%
Nokia Technologies 274 294 (7)% 846 919 (8)%
Group Common and
Other (138) (100) (499) (329)
Non-IFRS
exclusions (136) (214) (581) (1 187)
Operating margin % 6.6% 4.6% 200bps 2.9% (1.9)% 480bps
Net sales (non-IFRS) 5 294 5 688 (7)% (3)% 15 301 16 441 (7)% (6)%
Gross profit
(non-IFRS) 1 981 2 006 (1)% 5 785 5 765 0%
Operating profit
(non-IFRS) 486 478 2% 1 025 869 18%
Operating margin %
(non-IFRS) 9.2% 8.4% 80bps 6.7% 5.3% 140bps
----- ----- ------ -------- -------- ------
Financial income and
expenses (73) (98) (26)% (134) (326) (59)%
Income taxes (74) (80) (124) 108
Profit/(loss) for the
period 203 87 133% 187 (545)
EPS, diluted 0.04 0.01 300% 0.03 (0.10)
Financial income and
expenses (non-IFRS) (78) (113) (31)% (172) (291) (41)%
Income taxes
(non-IFRS) (103) (101) 2% (202) (161) 25%
Profit for the period
(non-IFRS) 305 267 14% 653 409 60%
EPS, diluted
(non-IFRS) 0.05 0.05 0% 0.11 0.07 57%
----- ----- ------ -------- -------- ------
The financial information in this report is unaudited. Non-IFRS results
exclude costs related to the acquisition of Alcatel-Lucent and related
integration, goodwill impairment charges, intangible asset amortization
and other purchase price fair value adjustments, restructuring and
associated charges and certain other items that may not be indicative of
Nokia's underlying business performance. For details, please refer to
note 2, "Non-IFRS to reported reconciliation", in the notes to the
Financial statement information included in Nokia Corporation Interim
Report for Q3 and January-September 2020. Change in net sales at
constant currency excludes the effect of changes in exchange rates in
comparison to euro, our reporting currency. For more information on
currency exposures, please refer to note 1, "Basis of Preparation", in
the "Financial statement information" section included in Nokia
Corporation Interim Report for Q3 and January-September 2020.
-- Both non-IFRS and reported net sales in Q3 2020 were EUR 5.3bn, compared
to EUR 5.7bn in Q3 2019. On a constant currency basis, both non-IFRS and
reported net sales decreased 3%, primarily due to services within Mobile
Access. The services-related declines in Q3 2020 were primarily driven by
lower levels of network deployment services, consistent with our
expectation, as disclosed in our Outlook section of the Report for Q2 and
Half Year 2020. In Nokia Enterprise, we continued to make great progress
and delivered 15% year-on-year growth in net sales.
-- The impact of COVID-19 on Nokia's financial performance and financial
position was primarily related to factory closures, resulting in a net
sales impact of approximately EUR 200 million in the first nine months of
2020, with the majority of these net sales expected to be shifted to
future periods, rather than being lost. At the end of Q3 2020, we were no
longer experiencing factory closures related to COVID-19. In addition,
COVID-19 has affected our operational costs, and we now expect a
temporary benefit of approximately EUR 250 million due to lower travel
and personnel expenses related to COVID-19 in full year 2020.
-- In Q3 2020, non-IFRS gross margin was 37.4% (reported 37.3%) and non-IFRS
operating margin was 9.2% (reported 6.6%). During the period, Nokia
continued to deliver improvements in gross margin and operating margin.
-- In Networks, gross profit and operating profit increased, driven
primarily by improved performance in Mobile Access and Optical Networks.
In Mobile Access, we continued to drive improvements in our portfolio by
strengthening our roadmaps, reducing product costs and improving our
product performance. In Optical Networks, our significantly improved
year-on-year results were due to a particularly strong Q3 2020, which
benefitted from pent-up demand, following the easing of temporary supply
chain constraints related to COVID-19.
-- Non-IFRS diluted EPS in Q3 2020 was EUR 0.05, compared to EUR 0.05 in Q3
2019, primarily driven by continued progress related to our cost savings
program and a net positive fluctuation in financial income and expenses,
partially offset by a net negative fluctuation in other operating income
and expense, higher investments in 5G R&D to accelerate our product
roadmaps and cost competitiveness in Mobile Access and lower gross
profit.
-- Reported diluted EPS in the first nine months of 2020 was EUR 0.03,
compared to negative EUR 0.10 in the first nine months of 2019. The
change was primarily driven by lower amortization of acquired intangible
assets, continued progress related to our cost savings program, a net
positive fluctuation in financial income and expenses and lower costs
related to network equipment swaps, partially offset by higher
investments in 5G R&D to accelerate our product roadmaps and cost
competitiveness in Mobile Access and a net negative fluctuation in other
operating income and expense.
-- Q3 2020 was the fifth quarter in a row of solid free cash flow. We
established a program in Q1 2019 to focus on free cash flow. Since
establishing this program, reduced working capital has been a significant
source of cash, principally because of lower net sales and, to a lesser
extent, improved execution. During Q3 2020, net cash increased by
approximately EUR 0.3 billion, resulting in an end-of-quarter net cash
balance of approximately EUR 1.9 billion. During Q3 2020, total cash
increased by approximately EUR 0.1 billion, resulting in an
end-of-quarter total cash balance of approximately EUR 7.6 billion.
COVID-19
The COVID-19 pandemic has made vividly clear the critical importance of
connectivity to keep society functioning. We believe we have a resilient
customer base, and we feel a sense of duty to our customers and the
communities they serve.
We believe the impact of COVID-19 on Nokia's financial performance and
financial position has so far been primarily related to factory
closures. Due to significant uncertainties and risks in estimating the
impact of customer-related delivery and implementation challenges, we
are now focusing our COVID-19 disclosure on the impact of factory
closures, which have had a net sales impact of approximately EUR 200
million in the first nine months of 2020, with the majority of these net
sales expected to be shifted to future periods, rather than being lost.
At the end of Q3 2020, we were no longer experiencing factory closures
related to COVID-19. The EUR 200 million of negative impact in the first
nine months of 2020 relates primarily to Alcatel Submarine Networks
within Group Common and Other, which experienced temporary factory
closures that impacted Q1 2020 and Q2 2020.
COVID-19 also affected our operational costs (for example, temporary
lower travel), capital expenditures (temporary delays), cash outflows
related to taxes (tax relief), and net working capital (for example,
lower inventories due to temporary disruptions). In full year 2020, we
now expect a temporary benefit of approximately EUR 250 million due to
lower travel and personnel expenses related to COVID-19, of which
approximately EUR 150 million is expected to benefit operating expenses
and approximately EUR 100 million is expected to benefit cost of sales.
Potential risks and uncertainties continue to exist related to the scope
and duration of the COVID-19 impact and the pace and shape of the
economic recovery following the pandemic.
During the COVID-19 pandemic, we have continued to advance our 5G
roadmap and product evolution, as planned, and we believe that our
COVID-19 mitigation actions in R&D have been successful. We believe we
remain on track with our plans to drive progressive improvement over the
course of 2020.
Health and safety
Naturally, Nokia's first focus during the COVID-19 pandemic is to our
employees. We have in place strict protocols for Nokia facilities and
provided clear advice to our employees about how they can mitigate the
risks of COVID-19 in situations where they have to go about critical
work.
We have taken a range of steps, including banning international travel
for Nokia employees, except for strictly-defined 'critical' reasons;
closing all our facilities to all visitors, with the exception of people
engaged in essential maintenance and services, and asking our staff to
work from home wherever possible. We started implementing these measures
in some regions already in January and have updated guidance as the
situation has developed.
As the overwhelming majority of Nokia employees continue working
remotely, we are providing guidance on how staff can maintain a healthy
work-life balance and look after their physical and mental well-being.
Supporting the essential services our customers provide
The products and services that we provide have never been more critical
in enabling the world to continue to function in an orderly way. We
continue to work closely with all our customers, to ensure that the
changing needs and requirements at this time are well understood and
that we respond appropriately to them.
In Q3 2020, connectivity continued to bring together people isolated
from each other by the COVID-19 pandemic. Remote working and schooling,
robust delivery of basic services and smart deliveries are just some
examples that have been enabled by our connectivity solutions. Our
shared value project with UNICEF in Kenya continued in Q3 2020 with the
first schools connected in September using our Fixed Wireless Access
solution, FastMile. The work started in early 2018. The current COVID-19
pandemic has underlined the importance of connectivity to enable digital
learning and inclusion.
Nokia has a global manufacturing footprint designed for optimized global
supply, and to mitigate against risks such as local disruptive events,
transportation capacity problems, and political risks. Our supply
network consists of 25 factories around the globe and six hubs for
customer fulfillment. As a result, at the Nokia level, we are not
dependent on one location or entity. We have also established a global
command center to manage the supply chain challenges arising from the
outbreak; and we are ready to activate relevant business continuity
plans should the situation in any part of our organization require this.
Impact on asset valuations
COVID-19 has affected the valuations of certain assets, including
investments in non-publicly quoted assets through Nokia's venture fund
investments and pension plans, the valuation of which is inherently
challenging in fast-moving market conditions. In Q3 2020, the valuation
uncertainty has decreased compared to Q2 2020 but still remains elevated
(for details, please refer to note 5 "Pensions and other post-employment
benefits" and note 8 "Fair value of financial instruments") in the
"Financial statement information" section included in Nokia Corporation
interim report for Q3 and January-September 2020).
In relation to its financial statements as of September 30, 2020, Nokia
has also considered the indicators of impairment of goodwill and other
intangible assets, recoverability of deferred tax assets, valuation of
inventories, and collectability of trade receivables and contract
assets. Based on these assessments, COVID-19 is currently not expected
to have long-term effects on Nokia's financial performance that would
require adjustments to the carrying amounts of goodwill and other
intangible assets or deferred tax assets. Also, Nokia has not identified
any material increase in the amount of bad debt or need to adjust the
valuation of inventories.
Doing our part to fight the pandemic
We also feel another sense of duty -- to the societies where Nokia
operates. As a global company, we have a duty to be part of the global
fight against this pandemic. In Q3 2020, we also continued our support
for the mHealth program with UNICEF in Indonesia where their real-time
big data and artificial intelligence platform is allowing policymakers
and citizens to understand the levels of physical distancing, movement
and mobility at the village level. As a result of the insights from the
platform, UNICEF Indonesia has been able to materially assist in the
formation of evidence-based policy to fight COVID-19, ensuring a lower
disease burden and a brighter future in Indonesia.
These actions demonstrate our strong commitment to supporting global
efforts to end the pandemic and overcoming the disruption and challenges
we currently face.
OUTLOOK
Full Year 2020
Non-IFRS diluted earnings EUR 0.23 plus or minus 3 cents (adjusted from
per share EUR 0.25 plus or minus 5 cents)
-------------------------- --------------------------------------------------
Non-IFRS operating margin 9.0% plus or minus 1.0 percentage points (adjusted
from 9.5% plus or minus 1.5 percentage points)
Recurring free cash EUR 600 million plus or minus EUR 250 million
flow(1) (adjusted from clearly positive)
(1) Free cash flow = net cash from/(used in) operating activities -
capital expenditures + proceeds from sale of property, plant and
equipment and intangible assets -- purchase of non-current financial
investments + proceeds from sale of non-current financial investments.
Full Year 2021
Non-IFRS operating margin 7 - 10% (new)
Long term
Nokia intends to provide a long term outlook, latest at Capital Markets
Day on March 18, 2021 (This is in comparison to our previous long term
outlook for 12-14% non-IFRS operating margin in 3 to 5 years.) Due to
ongoing work related to our strategy and new operating model, we believe
it would be premature to provide a long-term outlook.
Dividend
Long term (3 to 5 years) annual dividend distribution target: an earnings-based
growing dividend of approximately 40% to 70% of non-IFRS diluted EPS,
taking into account Nokia's cash position and expected cash flow. The
annual distribution would be paid as quarterly dividends.
KEY DRIVERS OF NOKIA'S OUTLOOK
Networks and Nokia Software are expected to be influenced by factors
including:
-- Our expectation that we will underperform our primary addressable market,
which is expected to decline on a constant currency basis in full year
2020, excluding China (This is in comparison to our earlier commentary to
slightly underperform our primary addressable market, which is expected
to be flattish on a constant currency basis, excluding China). We lowered
our expectations regarding network deployment services within Mobile
Access, and we lowered our expectations for our primary addressable
market, excluding China, due to the impact of COVID-19;
-- Our expectation for operating profit seasonality in 2020 to be similar to
2019, with the majority of operating profit to be generated in the fourth
quarter. Due to our strong free cash flow performance in the first nine
months of 2020, we no longer expect our free cash flow seasonality in
2020 to be similar to 2019;
-- Potential risks and uncertainties related to the scope and duration of
the COVID-19 impact and the pace and shape of the economic recovery
following the pandemic;
-- Competitive intensity, which is particularly impacting Mobile Access and
is expected to continue at a high level in full year 2020, as some
competitors seek to take share in the early stage of 5G;
-- Our expectation that we will accelerate our product roadmaps and cost
competitiveness through additional 5G investments in 2020, thereby
enabling us to drive product cost reductions and maintain the necessary
scale to be competitive;
-- Our expectation that we will drive improvements in automation and
productivity through additional digitalization investments in 2020;
-- Customer demand could weaken and risk could increase further in India,
after the country's Supreme Court upheld a ruling that telecoms companies
must pay retroactive license and spectrum fees;
-- Opportunities and risks in North America following the completion of a
merger, and, more broadly, the potential for temporary capital
expenditure constraints due to potential mergers or acquisitions by our
customers;
-- The timing of completions and acceptances of certain projects;
-- Some customers are reassessing their vendors in light of security
concerns, creating near-term pressure to invest in order to secure
long-term benefits;
-- Our expectation that we will improve our R&D productivity and reduce
support function costs through the successful execution of our cost
savings program, which is explained in more detail in the Cost savings
program section of Nokia Corporation interim report for Q3 and
January-September;
-- Our product and regional mix, including the impact of the high cost level
associated with our first generation 5G products; and
-- Macroeconomic, industry and competitive dynamics.
Nokia Technologies is expected to be influenced by factors including:
-- The timing and value of new and existing patent licensing agreements with
smartphone vendors, automotive companies and consumer electronics
companies;
-- Results in brand and technology licensing;
-- Costs to protect and enforce our intellectual property rights; and
-- The regulatory landscape.
Additionally, our outlook is based on the following assumptions:
-- Nokia's outlook for recurring free cash flow in 2020 is expected to be
supported by an improvement in net working capital performance and
improved operational results, partially offset by a more substantial
difference in 2020 between profit and free cash flow in Nokia
Technologies;
-- In 2020 and 2021, Nokia expects the free cash flow performance of Nokia
Technologies to be approximately EUR 600 million lower than its operating
profit, primarily due to certain major prepayments we received from
certain licensees in 2014 and 2017 (new);
-- Non-IFRS financial income and expenses are expected to be an expense of
approximately EUR 250 million in full year 2020 and EUR 300 million over
the longer-term. (This is in comparison to earlier commentary for an
expense of EUR 300 million in full year 2020 and per annum over the
longer-term). Our updated commentary is primarily due to our expectation
for lower costs related to the sale of receivables and improved FX
results driven by lower expected hedging costs;
-- Non-IFRS income taxes are expected at a rate of approximately 26% in full
year 2020 and approximately 25% over the longer-term, subject to the
absolute level of profits, regional profit mix and changes to our
operating model;
-- Cash outflows related to income taxes are expected to be approximately
EUR 350 million in full year 2020 and approximately EUR 400 million per
annum over the longer term until our US or Finnish deferred tax assets
are fully utilized (This is in comparison to earlier commentary for EUR
400 million in full year 2020 and EUR 450 million per annum over the
longer term.) Our updated commentary is primarily due to our expectation
for lower cash taxes in 2020, driven by COVID-19-related tax reliefs and
delayed timing of certain tax outflows; and uncertainty related to timing
of certain expected cash tax outflows over the longer term; and
-- Capital expenditures are expected to be approximately EUR 500 million in
full year 2020. (This is in comparison to earlier commentary for EUR 550
million in full year 2020 and EUR 600 million over the longer-term.) We
are not currently providing longer-term assumptions for capital
expenditures, and our updated full year 2020 commentary is primarily due
to temporary delays related to COVID-19.
ANALYST CONFERENCE CALL
Nokia's analyst conference call will begin on October 29, 2020 at 3 p.m.
Finnish time. A link to the webcast of the conference call will be
available at
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www.nokia.com/financials. Media representatives can listen in via the
link, or call +1-412-717-9224.
Media Inquiries:
Nokia Communications
Tel. +358 10 448 4900
Email:
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press.services@nokia.com
Katja Antila, Head of Media Relations
Investor Inquiries:
Nokia Investor Relations
Tel. +358 40 803 4080
Email:
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investor.relations@nokia.com
About Nokia
We create the technology to connect the world. Only Nokia offers a
comprehensive portfolio of network equipment, software, services and
licensing opportunities across the globe. With our commitment to
innovation, driven by the award-winning Nokia Bell Labs, we are a leader
in the development and deployment of 5G networks.
Our communications service provider customers support more than 6.4
billion subscriptions with our radio networks, and our enterprise
customers have deployed over 1,300 industrial networks worldwide.
Adhering to the highest ethical standards, we transform how people live,
work and communicate. For our latest updates, please visit us online
www.nokia.com and follow us on Twitter @nokia.
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. These forward-looking
statements reflect Nokia's current expectations and views of future
developments and include statements regarding: A) expectations, plans or
benefits related to our strategies, growth management and operational
key performance indicators; B) expectations, plans or benefits related
to future performance of our businesses (including the expected impact,
timing and duration of that impact of COVID-19 on our businesses, our
supply chain and our customers' businesses) and any future dividends
including timing and qualitative and quantitative thresholds associated
therewith; C) expectations and targets regarding financial performance,
cash generation, results, the timing of receivables, operating expenses,
taxes, currency exchange rates, hedging, cost savings, product cost
reductions and competitiveness, as well as results of operations
including targeted synergies, better commercial management and those
results related to market share, prices, net sales, income and margins;
D) expectations, plans or benefits related to changes in organizational
and operational structure; E) expectations regarding competition within
our market, market developments, general economic conditions and
structural and legal change globally and in national and regional
markets, such as China; F) our ability to integrate acquired businesses
into our operations and achieve the targeted business plans and benefits,
including targeted benefits, synergies, cost savings and efficiencies;
G) expectations, plans or benefits related to any future collaboration
or to business collaboration agreements or patent license agreements or
arbitration awards, including income to be received under any
collaboration or partnership, agreement or award; H) timing of the
deliveries of our products and services, including our short term and
longer term expectations around the rollout of 5G, investment
requirements with such rollout, and our ability to capitalize on such
rollout; I) expectations and targets regarding collaboration and
partnering arrangements, joint ventures or the creation of joint
ventures, and the related administrative, legal, regulatory and other
conditions, as well as our expected customer reach; J) outcome of
pending and threatened litigation, arbitration, disputes, regulatory
proceedings or investigations by authorities; K) expectations regarding
restructurings, investments, capital structure optimization efforts,
uses of proceeds from transactions, acquisitions and divestments and our
ability to achieve the financial and operational targets set in
connection with any such restructurings, investments, capital structure
optimization efforts, divestments and acquisitions, including our
current cost savings program; L) expectations, plans or benefits related
to future capital expenditures, reduction of support function costs,
temporary incremental expenditures or other R&D expenditures to develop
or rollout software and other new products, including 5G, ReefShark and
increased digitalization; M) expectations regarding our customers'
future actions, including our customers' capital expenditure constraints
and our ability to satisfy customer's needs and retain their business;
and N) statements preceded by or including "believe", "expect",
"expectations", "deliver", "maintain", "strengthen", "target",
"estimate", "plan", "intend", "assumption", "focus", "continue",
"should", "will" or similar expressions. These forward-looking
statements are subject to a number of risks and uncertainties, many of
which are beyond our control, which could cause our actual results to
differ materially from such statements. These statements are based on
management's best assumptions and beliefs in light of the information
currently available to them. These forward-looking statements are only
predictions based upon our current expectations and views of future
events and developments and are subject to risks and uncertainties that
are difficult to predict because they relate to events and depend on
circumstances that will occur in the future. Factors, including risks
and uncertainties that could cause these differences include, but are
not limited to: 1) our strategy is subject to various risks and
uncertainties and we may be unable to successfully implement our
strategic plans, sustain or improve the operational and financial
performance of our business groups, correctly identify or successfully
pursue business opportunities or otherwise grow our business; 2) general
economic and market conditions, general public health conditions
(including its impact on our supply chains) and other developments in
the economies where we operate, including the timeline for the
deployment of 5G and our ability to successfully capitalize on that
deployment; 3) competition and our ability to effectively and profitably
invest in existing and new high-quality products, services, upgrades and
technologies and bring them to market in a timely manner; 4) our
dependence on the development of the industries in which we operate,
including the cyclicality and variability of the information technology
and telecommunications industries and our own R&D capabilities and
investments; 5) our dependence on a limited number of customers and
large multi-year agreements, as well as external events impacting our
customers including mergers and acquisitions and the possibility of our
customers awarding business to our competitors; 6) our ability to
maintain our existing sources of intellectual property-related revenue
through our intellectual property, including through licensing,
establishing new sources of revenue and protecting our intellectual
property from infringement; 7) our ability to manage and improve our
financial and operating performance, cost savings, competitiveness and
synergies generally, expectations and timing around our ability to
recognize any net sales and our ability to implement changes to our
organizational and operational structure efficiently; 8) our global
business and exposure to regulatory, political or other developments in
various countries or regions, including emerging markets and the
associated risks in relation to tax matters and exchange controls, among
others; 9) our ability to achieve the anticipated benefits, synergies,
cost savings and efficiencies of acquisitions; 10) exchange rate
fluctuations, as well as hedging activities; 11) our ability to
successfully realize the expectations, plans or benefits related to any
future collaboration or business collaboration agreements and patent
license agreements or arbitration awards, including income to be
received under any collaboration, partnership, agreement or arbitration
award; 12) Nokia Technologies' ability to protect its IPR and to
maintain and establish new sources of patent, brand and technology
licensing income and IPR-related revenues, particularly in the
smartphone market, which may not materialize as planned, 13) our
dependence on IPR technologies, including those that we have developed
and those that are licensed to us, and the risk of associated
IPR-related legal claims, licensing costs and restrictions on use; 14)
our exposure to direct and indirect regulation, including economic or
trade policies, and the reliability of our governance, internal controls
and compliance processes to prevent regulatory penalties in our business
or in our joint ventures; 15) our reliance on third-party solutions for
data storage and service distribution, which expose us to risks relating
to security, regulation and cybersecurity breaches; 16) inefficiencies,
breaches, malfunctions or disruptions of information technology systems,
or our customers' security concerns; 17) our exposure to various legal
frameworks regulating corruption, fraud, trade policies, and other risk
areas, and the possibility of proceedings or investigations that result
in fines, penalties or sanctions; 18) adverse developments with respect
to customer financing or extended payment terms we provide to customers;
19) the potential complex tax issues, tax disputes and tax obligations
we may face in various jurisdictions, including the risk of obligations
to pay additional taxes; 20) our actual or anticipated performance,
among other factors, which could reduce our ability to utilize deferred
tax assets; 21) our ability to retain, motivate, develop and recruit
appropriately skilled employees; 22) disruptions to our manufacturing,
service creation, delivery, logistics and supply chain processes, and
the risks related to our production sites; 23) the impact of litigation,
arbitration, agreement-related disputes or product liability allegations
associated with our business; 24) our ability to re-establish investment
grade rating or maintain our credit ratings; 25) our ability to achieve
targeted benefits from, or successfully implement planned transactions,
as well as the liabilities related thereto; 26) our involvement in joint
ventures and jointly-managed companies; 27) the carrying amount of our
goodwill may not be recoverable; 28) uncertainty related to the amount
of dividends and equity return (if any) we are able to distribute to
shareholders for each financial period; 29) pension costs, employee
fund-related costs, and healthcare costs; 30) our ability to
successfully complete and capitalize on our order backlogs and continue
converting our sales pipeline into net sales; 31) risks related to
undersea infrastructure; and 32) the scope and duration of the COVID-19
impact on the global economy and financial markets as well as our
customers, supply chain, product development, service delivery, other
operations and our financial, tax, pension and other assets, and the
shape of the economic recovery following the pandemic as well as the
risk factors specified in our 2019 annual report on Form 20-F published
on March 5, 2020 under "Operating and financial review and
prospects-Risk factors" as supplemented by the form 6-K published on
April 30, 2020 under the header "Risk Factors" and in our other filings
or documents furnished with the U.S. Securities and Exchange Commission.
Other unknown or unpredictable factors or underlying assumptions
subsequently proven to be incorrect could cause actual results to differ
materially from those in the forward-looking statements. We do not
undertake any obligation to publicly update or revise forward-looking
statements, whether as a result of new information, future events or
otherwise, except to the extent legally required.
Attachment
-- Nokia_ results_2020_Q3
https://ml-eu.globenewswire.com/Resource/Download/41cd8e58-6650-4158-a9d3-351acd69b13c
(END) Dow Jones Newswires
October 29, 2020 02:15 ET (06:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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