Slide 1: Q2 2024 Financial results
Q2 2024 Financial results 18 July 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 – Q2 2024
Key messages – Q2 2024 • Announced planned divestment of ASN and intent to purchase Infinera aligned with strategic pillar to actively manage portfolio and that will significantly strengthen our Network Infrastructure business. • Ongoing market weakness in Q2 – net sales declined 18% in constant cur
Slide 4: Q2 Financial Performance
Q2 Financial Performance Marco Wirén Chief Financial Officer 4 © 2024 Nokia Public
Slide 5: Full year outlook reiterated in a challenging environment
Full year outlook reiterated in a challenging environment Q2 24 net sales (EUR) Q2 24 gross margin Q2 24 operating margin Q2 24 FCF (EUR) Q2 24 net cash (EUR) 4.5bn 44.7% 9.5% 0.4bn 5.5bn -18% y-o-y +450bps y-o-y -190 bps y-o-y Net sales (EUR million) Gross profit (EUR million) and margin Operating
Slide 6: Network Infrastructure
Network Infrastructure net sales by quarter Network Infrastructure 1 000 -6% 900 -11% 800 -1% -18% +6% 700 +17% • ASN now recorded in 600 500 discontinued operations 400 300 • Sales increased sequentially 200 100 0 • Order intake improvement for Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 7: Mobile Networks
Mobile Networks net sales by quarter Mobile Networks 3 500 -24% 3 000 +25% 2 500 • Challenging spending environment continued 2 000 1 500 • India net sales down sharply 1 000 • Customer settlement benefited 500 results, making up for nearly half 0 of gross margin improvement Q2 22 Q3 22 Q4 22 Q1 23
Slide 8: Cloud and Network Services
Cloud and Network Services net sales by quarter Cloud and Network 1 200 -16% Services 1 000 -6% 800 • Market remained challenging 600 • Disposal had 300bps impact 400 on net sales decline 200 • Profitability impacted by scale 0 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 • Strong engagemen
Slide 9: Nokia Technologies
Nokia Technologies €1.4-1.5b • Growth driven by earlier-signed €1.3b agreements and higher automotive and consumer electronic net sales €0.9 – 1.0bn • Run-rate remained at approximately EUR 1.3bn • Important multimedia agreement signed with video streaming platform 2024 planning assumption Operating
Slide 10: Regional sales: India weighed heavily on top-line in Q2
Regional sales: India weighed heavily on top-line in Q2 Year-on-year at constant currency -18% reported and constant currency Nokia Technologies +5% €5.4bn +3% Europe ex. Tech -15% -2% -12% €4.5bn -69% -12% -11% -1% Americas APAC EMEA Q2 2023 Latin North Greater India Rest of APAC Europe Middle East
Slide 11: Working capital drives solid cash flow
Working capital drives solid cash flow Change in Net Cash (EUR billion) • Receivables driving working capital inflows +0.3 +0.1 • EUR 0.3bn of disposals +0.6 -0.3 5.5 benefited cash -0.1 -0.1 5.1 -0.1 -0.1 • Returned EUR 0.3bn to shareholders through dividend and share buybacks • Free cash flow of E
Slide 12: Business Highlights
Business Highlights Pekka Lundmark President and Chief Executive Officer 12 © 2024 Nokia Public
Slide 13: Network Infrastructure strengthened with market leading pillars
Network Infrastructure strengthened with 3 market leading pillars Attractive market leading provider of fixed network infrastructure Net Operating Operating Nokia Growth Key Sales margin - margin - Opportunity Competitors 2023 2023 aspiration • Demand for fiber build remains strong EUR Fixed • Matur
Slide 14: Momentum building in Mobile Networks
Momentum building in Mobile Networks Customer momentum since 2019 Successful Nokia Open/Cloud RAN projects 60 Vodafone und Nokia partner to introduce Open RAN in Nokia’s solutions are 50 Italy validated with ecosystem of leading 40 industry partners 30 across hardware and software 20 Nokia and stc s
Slide 15: Cloud and Network Services: progress with Network Monetization
Cloud and Network Services: progress with Network Monetization Developer & enterprise ecosystems Signed Q2 partnerships agreements with Infobip and Google, executing on our strategy Applications to address and access a broad range of with Network as Code SDK ecosystems Continued building our platfor
Slide 16: Taking fast action to reduce cost
Taking fast action to reduce cost Cost savings program (EUR million)* Nokia headcount (k)** 1200 88 86 1000 84 800 82 80 600 78 77 400 76 74 200 72 72 0 70 Run-rate 2024 2025 2026 Beyond Total Oct- Dec- Mar- Jun- Target by Q2 2026 2023 2023 2024 2024 at end 2024 Expected annual in-year gross savings
Slide 17: 2024 Outlook
2024 Outlook Solidly on track to achieve the outlook given quick actions to reduce cost 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 Report for
Slide 18: Key Takeaways
Key Takeaways Order intake Cost savings Positive deal momentum program on track traction across continued in weak and outlook business groups market reiterated Strong cash performance with Share buyback to net cash of be accelerated EUR 5.5bn 18 © 2024 Nokia Public
Slide 19: © 2024 Nokia Public
© 2024Nokia | Public 19
Slide 20: © 2024 Nokia
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