Slide 1: Q1 2024 Financial results
Q1 2024 Financial results 18 April 2024 1 © 2024 Nokia
Slide 2: Disclaimer
Disclaimer It should be noted that Nokia and its business are exposed to unpredictable factors or underlying assumptions subsequently comparable with similarly titled measures used by other various risks and uncertainties and certain statements herein that proven to be incorrect could cause actual r
Slide 3: Key messages
Key messages • Weak start to 2024 as expected: As expected, weak start to 2024 with 19% y-o-y net sales decline in constant currency. This impacted profitability in our three networks businesses but was offset by deals signed in Nokia Technologies meaning our operating margin improved y-o-y. • Impro
Slide 4: Q1 Financial Performance
Q1 Financial Performance Marco Wirén Chief Financial Officer 4 © 2024 Nokia Public
Slide 5: Strong cash flow and improving orders despite market weakness
Strong cash flow and improving orders despite market weakness Net sales growth (constant currency) 15% Q1 24 net sales (EUR) 4.7bn 5% -5% -19% y-o-y -15% Q1 24 gross margin Q1 24 operating margin -25% Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 48.6% 12.8% 44% 4Q rolling comparable gross m
Slide 6: Network Infrastructure
Network Infrastructure Network Infrastructure net sales growth y-o-y by business line 60% 40% On-going market weakness weighed on Q1 results 20% 0% Submarine Networks impacted by -20% project timing while backlog grew -40% Order intake trends improved in the IP Networks Optical Networks Fixed Networ
Slide 7: Mobile Networks
Mobile Networks Mobile Networks net sales growth y-o-y 20% 10% Challenging spending environment continued 0% -10% Expect progressive improvement through 2024 -20% -30% Strong increase in gross margin due to regional and product mix -40% Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Approxima
Slide 8: Cloud and Network Services
Cloud and Network Cloud and Network Services net sales growth y-o-y Services 10% 5% Challenging spending 0% environment now impacting more -5% Now seeing improving order -10% intake -15% Profitability impacted by scale Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Recent divestment will have
Slide 9: Nokia Technologies
Nokia Technologies €1.4-1.5b Signed three important €1.3b smartphone licenses Annual net sales run-rate for €0.9 – 1.0bn Nokia Technologies now approximately EUR 1.3bn Benefited from over EUR 400 million of catch-up net sales in Q1 2024 planning assumption Operating profit Q4 2023 Smartphone Q1 2024
Slide 10: Regional sales: India and North America weigh heavily on top-line
Regional sales: India and North America weigh heavily on top-line Year-on-year at constant currency -20% reported -19% constant currency Nokia Technologies +216% €5.9bn -25% -37% Europe ex. Tech -13% -24% -68% +25% +8% -23% €4.7bn -19% Americas APAC EMEA Q1 2023 Latin North Greater India Rest of Eur
Slide 11: Catch-up net sales and working capital drive strong cash flow
Catch-up net sales and working capital drive strong cash flow Change in Net Cash (EUR billion) • More than EUR 400m of 6 catch-up sales benefits +0.6 profit 6 -0.2 -0.1 5.1 • Receivables drive net +0.8 -0.1 working capital inflows 5 -0.1 • Returned EUR 0.2bn to 5 shareholders mainly through 4.3 divi
Slide 12: Business Highlights
Business Highlights Pekka Lundmark President and Chief Executive Officer 12 © 2024 Nokia Public
Slide 13: NI: Fixed Networks - well-positioned for market recovery
NI: Fixed Networks - well-positioned for market recovery Technology leadership: Still >70% of homes without FTTH ex. China % Homes connected Homes passed • No. 1 OLT supplier globally: 41% share ex. China* 100 93% 95% • Compelling value proposition with 25G PON 90 • Additional 25G ONT products launc
Slide 14: NI: Optical Networks - bringing scale and efficiency to metro edge
NI: Optical Networks - bringing scale and efficiency to metro edge Metro-optimized Edge-optimized Scalable metro- coherent optics service aggregation optimized platform • Optimized for metro/access • Increasing scale of service • Small chassis optimized • 800G pluggable coherent delivery to the metr
Slide 15: Mobile Networks: R&D investment delivering leading performance
Mobile Networks: R&D investment delivering leading performance Nokia AirScale portfolio delivers performance and flexibility for customers Best network performance… …with widest deployment flexibility… …and commitment to open architectures Average 5G NSA download throughput* 65 60 60 57 Hybrid Nokia
Slide 16: Addressing operators two biggest challenges
Addressing operators two biggest challenges Helping operators to automate and monetize their 5G networks Network programmability and Programmability: APIs and Exposure API exposure enables CSPs to monetize their networks, as does network slicing rApp Cybersecurity Slice Management Analytics feeds ma
Slide 17: Collaborations and partnerships remain a top priority
Collaborations and partnerships remain a top priority • Cloud infrastructure for Cloud RAN and Cloud Core, for the MN and CNS portfolio Strategic partnership to advance network cloud • Nokia adopts Dell as its preferred infrastructure partner for existing Nokia transformation and AirFrame customers
Slide 18: Nokia Technologies now focusing resources on growth areas
Nokia Technologies now focusing resources on growth areas NEW SEGMENT MATURITY Multimedia services Active negotiations and enforcement Low RECENT DEAL EXAMPLES MATURITY A leading IoT devices Block Landis+Gyr POS company Low RECENT DEAL EXAMPLES MATURITY Connected vehicles BMW Mercedes Hyundai Med RE
Slide 19: Key Takeaways
Key Takeaways Smartphone licensing Weak market remains renewal cycle but improving order Solidly on-track to complete, trends provide achieve full year contributing to confidence in H2 outlook strong Q1 cash growth generation 19 © 2024 Nokia Public
Slide 20: 2024 Outlook
2024 Outlook Solidly on track given second half growth and on-going cost savings actions Full year 2024 Comparable operating profit EUR 2.3 billion to EUR 2.9 billion Free cash flow 30 to 60% conversion from comparable operating profit Please refer to the Performance measure section of our Interim R
Slide 21: Q&A
Q&A 21 © 2024 Nokia Public
Slide 22: © 2024 Nokia
Il | ~% | | 4 A | ) | Ep nm i] A a ¥ i | | wl \ | | aH Il ini | | FS , 1h [| A | I | | | i | | | , ‘| : | | we RA WE mn |