Nokia Oyj · OMXHEX:NOKIA
Nokia Oyj — Q2 2021 Earnings Presentation
21 slides from Nokia Oyj's earnings presentation, Jul 29, 2021
Slide 1: Q2 2021 Investor presentation
Q2 2021 Investor presentation 29 July 2021 1 © 2021 Nokia
Slide 2: Disclaimer
Disclaimer It should be noted that Nokia and its business are exposed to proven to be incorrect could cause actual results to differ companies, including those in the same industry. The primary various risks and uncertainties and certain statements herein that materially from those in the forward-lo
Slide 3: Welcome
Welcome Pekka Lundmark 4. Q2 highlights President and CEO 5. Strategy progress 6. Business group highlights 19. Outlook Marco Wirén 12. Addressable market CFO 13. Q2 financial performance 17. Cash flow 18. Venture funds 3 © 2021 Nokia Public
Slide 4: Strong financial performance across all segments
Strong financial performance across all segments Q2 21 net sales Q2 21 gross margin Q2 21 operating margin +9% (year-over-year at 42.3% (comparable) +270 bps YoY 12.8% (comparable) +450 bps YoY constant currency) Comparable gross margin Comparable operating margin YoY constant currency growth 25% 50
Slide 5: Good progress in Q2 on our three-phase strategy
Good progress in Q2 on our three-phase strategy Reset Accelerate Scale Mobile Networks Network Infrastructure Nokia Technologies • AirScale radio and baseband launch • +20% sales growth in Q2* • Two automotive licenses signed • Increased R&D investment • Gaining market share • Winning back customers
Slide 6: New AirScale product launch boosts our competitiveness
New AirScale product launch boosts our competitiveness Next-generation AirScale 5G portfolio powered by On track with KPIs ReefShark technology • ~70% ReefShark share by end of • Widest bandwidth radios and 2021 industry’s lightest 32TRX mMIMO • 4G/5G conversion rate at 90%* active antenna • 4G/5G m
Slide 7: Network Infrastructure gaining share in growing markets
Network Infrastructure gaining share in growing markets YoY constant currency net sales growth 0% 20% 40% 60% 80% • Strong H1 growth for all businesses 49% Fixed Networks 28% • Gaining share in a growing market 22% IP Networks 8% Optical 7% • New product launches to come in H2 Networks 13% Submarine
Slide 8: Portfolio rebalancing on track in Cloud and Network Services
Portfolio rebalancing on track in Cloud and Network Services 5G Core customers • We are on track with portfolio rebalancing >150 • Accelerating investment in growth areas • Deployed 5G SA Core for DISH on AWS • >340 private wireless customers Private Wireless customers 340 250 180 Q2 2020 Q3 2020 Q4
Slide 9: Nokia Technologies progress in Automotive
Nokia Technologies progress in Automotive Expanded automotive licensing #1 program, signing two new agreements in Q2 2021, underlining strength of cellular portfolio PA Consulting ranked Nokia as #1 in 5G Standard Essential Patents Continued industry leadership with Continue to renew our patent +3,5
Slide 10: Enterprise pipeline remains strong
Enterprise pipeline remains strong Q2 21 net sales -2% • Q2 growth slowed due to tough comparison H1 21 net sales • 63 new customers in Q2 +7% • Confidence in pipeline and full year (year-over-year at constant currency) 10 © 2021 Nokia Public
Slide 11: CFO remarks
CFO remarks Marco Wirén 12. Addressable market CFO 13. Q2 performance 17. Cash flow 18. Venture funds 11 © 2021 Nokia Public
Slide 12: Improving outlook for Mobile Networks 2021 addressable market
Improving outlook for Mobile Networks 2021 addressable market 2021 YoY YoY Estimated, in € (as of Q2 2021) (at const. ccy) (prior estimate) Mobile Networks1 46bn +6% +3% Network Infrastructure2 42bn +4% +4% Cloud and Network Services 26bn +4% +2% Total addressable market 113bn +5% +3% 1Excluding Chi
Slide 13: Broad-based growth with most regions contributing
Broad-based growth with most regions contributing Year-over-year at constant currency +9% constant currency growth +4% reported growth +11% +4% -4% +4% +7% +57% €5.3bn +75% €5.1bn Q2 2020 India Latin America Europe North Greater China Middle East & Asia Pacific FX impact Q2 2021 America Africa 13 ©
Slide 14: Strong underlying improvements in gross margin
Strong underlying improvements in gross margin Also helped by a one-off benefit Group comparable gross margin Mobile Networks comparable gross margin 40.9% 42.3% 39.6% 36.1% Q2 2020 Product Regional Volume Cost FX MN one- Q2 2021 Q2 2020 Product Regional Cost FX MN one- Q2 2021 mix mix impact saving
Slide 15: Structural improvements to operating margin and some one-offs
Structural improvements to operating margin and some one-offs Group comparable operating margin • Strong structural margin Structural improvements 12.8% improvement • Cost base well managed • Cost reductions offset by rising R&D investment and 8.3% incentive accruals Q2 2020 Product Regional Volume
Slide 16: Growth and margin expansion in all business groups
Growth and margin expansion in all business groups Figures shown based on comparable reporting with revenues in EUR million Mobile Network Networks Q2 2021 Q2 2020 YoY at CC Infrastructure Q2 2021 Q2 2020 YoY at CC Net Sales 2,380 2,424 3% Net Sales 1,778 1,545 20% Gross margin 40.9% 36.1% Gross mar
Slide 17: Liquidity position remains solid with EUR 3.7bn net cash
Liquidity position remains solid with EUR 3.7bn net cash Generated positive free cash flow for the fifth quarter in a row € billion Operating Investing Financing +0.9 -0.1 3.7 -0.6 +0.1 3.7 -0.1 -0.1 -0.1 Q2 2020 Adjusted profit Restructuring NWC (excluding Income taxes Capital Other investing Lease
Slide 18: Venture funds continue to deliver good returns
Venture funds continue to deliver good returns Summary of Nokia venture fund* performance • Revaluations of venture funds impact other operating income • Typically, 15-20% IRRs at maturity • Investments can also bring other benefits in licensing or partnerships • Book value remaining of €760m on our
Slide 19: Full Year 2021 Outlook increased
Full Year 2021 Outlook increased Full year 2021 Full year 2023 Net sales1 €21.7 billion to €22.7 billion Grow faster than the market (adjusted from €20.6bn to €21.8bn) Comparable operating margin2 10 to 12% (adjusted from 7 to 10%) 10 to 13% Free cash flow3 Clearly positive (adjusted from positive)
Slide 20: © 2021 Nokia Public
20 ©2021 Nokia Public NOKIA
Slide 21: NOKIA
NOKIA