Nokia Oyj · OMXHEX:NOKIA
Nokia Oyj — Q2 2018 Earnings Presentation
35 slides from Nokia Oyj's earnings presentation, Jul 26, 2018
Slide 1: Financial discussion: non-IFRS net sales and operating profit
EUR million, non-IFRS Net sales % change Gross profit (R&D) (SG&A) Other income and (expenses) Operating profit Change in operating margin % Financial discussion The financial discussion included in this financial report of Nokia’s results comprises the results of Nokia’s businesses — Nokia’s Networ
Slide 2: Financial discussion: net sales and operating profit
EUR million Net Sales % change Gross profit (R&D) (SG&A) Other income and (expenses) Operating profit Change in operating margin % Financial discussion Year-on-year changes in net sales and operating profit Nokia net sales decreased 5% year-on-year. On a constant currency basis, Nokia net sales woul
Slide 3: Financial highlights Q2'18
Financial highlights EUR million Q2’18 Q2’17 YoY change Constant currency YoY change 4 693 4 971 % Ultra Broadband Networks 2 055 2 165 % Global Services 1 326 1 448 IP Networks and Applications 1 313 1 358 % Gross profit 1 632 1 945 Gross margin % 34.8 % 39.1 % )bps R&D ) ) SG&A ) ) Other income an
Slide 4: Change in operating profit
€500M €400M €300M €200M €100M OM 405 Q2n7 Operating profit Change in operating profit LC = 13) Gross profit RED mm Positive SGA mm Negative <= — Q2'18 Operating profit
Slide 5: Net sales by region
Net sales by region EUR million Q2’18 Q2’17 YoY change Constant currency YoY change Asia-Pacific 1 026 Europe 1 039 1 091 Greater China Latin America % % Middle East & Africa % % North America 1 468 1 498 % Total 4 693 4 971 % Financial discussion Year-on-year changes in net sales and operating prof
Slide 6: Ultra Broadband Networks highlights
Financial highlights EUR million Q2’18 Q2’17 YoY change Constant currency YoY change 2 055 2 165 % Mobile Networks 1 565 1 619 % Fixed Networks Gross profit 1 040 Gross margin % 43.7 % 48.0 % )bps R&D ) ) % SG&A ) ) Other income and expenses ) Operating profit Operating margin % 2.4 % 8.8 % )bps
Slide 7: Net sales by region: Ultra Broadband Networks
EUR million Q2'18 Q2'17 YoY change Ultra Broadband Networks Mobile Networks Fixed Networks Asia-Pacific 409 437 (6)% 0% Europe 368 417 (12)% (11)% Greater China 218 275 (21)% (21)% Latin America 86 101 (15)% (8)% Middle East & Africa 143 149 (4)% (1)% North America 831 786 6% 14% Total 2 055 2 165 (
Slide 8: Ultra Broadband Networks financial discussion
Financial discussion Ultra Broadband Networks net sales decreased 5% year-on-year. On a constant currency basis, Ultra Broadband Networks net sales would have been approximately flat year-on-year, with 2% growth in Mobile Networks offset by a 6% decline in Fixed Networks. The decrease in Mobile Netw
Slide 9: Global Services highlights
Financial highlights EUR million Q2’18 Q2’17 YoY change Constant currency YoY change 1 326 1 448 Gross profit Gross margin % 15.2 % 21.1 % )bps R&D ) ) % SG&A ) ) % Other income and expenses ) ) Operating profit Operating margin % 0.8 % 8.5 % )bps
Slide 10: Net sales by region: Global Services
Net sales by region EUR million Q2’18 Q2’17 YoY change Constant currency YoY change Asia-Pacific Europe Greater China Latin America % % Middle East & Africa % % North America Total 1 326 1 448 Financial discussion Global Services net sales decreased 8% year-on-year. On a constant currency basis, Glo
Slide 11: IP Networks and Applications highlights
Financial highlights EUR million Q2’18 Q2’17 YoY change Constant currency YoY change 1 313 1 358 % IP/Optical Networks % IP Routing Optical Networks % % Nokia Software % Gross profit Gross margin % 40.6 % 44.2 % )bps R&D ) ) SG&A ) ) % Other income and expenses ) Operating profit Operating margin %
Slide 12: Net sales by region: IP Networks and Applications
EUR million Q2’18 Q2’17 YoY change Constant currency YoY change IP Networks and Applications IP/ Optical Networks Nokia Software Net sales by region
Slide 13: IP Networks and Applications financial discussion
Financial discussion IP Networks and Applications net sales decreased 3% year-on-year. On a constant currency basis, IP Networks and Applications net sales would have increased 2% year-on-year, with 1% growth in IP/Optical Networks and 2% growth in Nokia Software. The decrease in IP/Optical Networks
Slide 14: Nokia Technologies highlights
Financial highlights EUR million Q2’18 Q2’17 YoY change Constant currency YoY change Gross profit % Gross margin % 98.1 % 95.4 % bps R&D ) ) SG&A ) ) Other income and expenses ) ) Operating profit % Operating margin % 80.9 % 62.3 % 1 860 bps
Slide 15: Nokia Technologies financial discussion
Financial discussion Nokia Technologies net sales decreased 2% year-on-year, on both a reported and constant currency basis. Of the EUR 361 million of net sales in the second quarter 2018, EUR 352 million related to patent, brand and technology licensing and EUR 9 million related to digital health.
Slide 16: Group Common and Other highlights
Financial highlights EUR million Q2’18 Q2’17 YoY change Constant currency YoY change Gross profit Gross margin % 19.1 % 17.6 % bps R&D ) ) % SG&A ) ) Other income and expenses Operating loss ) ) Operating margin % (9.7 (20.2 1 050 bps
Slide 17: Group Common and Other financial discussion
Financial discussion Group Common and Other net sales decreased 9% year-on-year. On a constant currency basis, Group Common and Other net sales would have decreased 4% year-on-year. The decrease in Group Common and Other net sales was primarily due to Alcatel Submarine Networks, partially offset by
Slide 18: Cash and cash flow in Q2 2018
Components of net sales Margin Components of operating profit EUR million, at end of period Q2’18 Q2’17 YoY change Q1’18 QoQ change Total cash and current financial investments(1) 5 861 7 917 7 897 Net cash and current financial investments(1) 2 144 3 964 4 176 (1) Total cash and current financial i
Slide 19: Q1-Q2'18 financial highlights
Financial highlights(1) Constant currency YoY EUR million (except EPS in EUR) Q1-Q2’18 Q1-Q2’17 YoY change change 10 237 10 996 % Nokia’s Networks business 9 018 9 873 Nokia Technologies % % Group Common and Other Non-IFRS exclusions ) ) Gross profit 3 666 4 361 Gross margin % 35.8 % 39.7 % )bps Ope
Slide 20: Nokia's Networks business highlights Q1-Q2'18
Financial highlights EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change 9 018 9 873 Ultra Broadband Networks 3 912 4 401 Global Services 2 565 2 809 IP Networks and Applications 2 540 2 663 % Gross profit 3 181 3 879 Gross margin % 35.3 % 39.3 % )bps R&D (1 808 ) (1 860 ) SG&A (1
Slide 21: Net sales by region
Net sales by region EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change Asia-Pacific 1 832 2 072 Europe 2 024 2 067 % Greater China 1 183 Latin America % % Middle East & Africa % % North America 2 713 3 192 Total 9 018 9 873
Slide 22: Networks business financial discussion
Financial discussion Year-on-year changes in net sales and operating profit In the first six months of 2018, Nokia’s Networks business net sales decreased 9% year-on-year. On a constant currency basis, Nokia’s Networks business net sales would have decreased 1% year-on-year. A discussion of our resu
Slide 23: Ultra Broadband Networks highlights Q1-Q2'18
Financial highlights EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change 3 912 4 401 Mobile Networks 2 978 3 353 Fixed Networks 1 048 Gross profit 1 777 2 171 Gross margin % 45.4 % 49.3 % )bps R&D (1 137 ) (1 164 ) SG&A ) ) Other income and expenses Operating profit Operating margi
Slide 24: Net sales by region: Ultra Broadband Networks
EUR million Q1-Q2'18 Q1-Q2'17 YoY change Ultra Broadband Networks Mobile Networks Fixed Networks Asia-Pacific 809 894 (10)% 0% Europe 743 776 (4)% (4)% Greater China 405 516 (22)% (19)% Latin America 179 165 8% 21% Middle East & Africa 281 274 3% 8% North America 1 496 1 775 (16)% (6)% Total 3 912 4
Slide 25: Ultra Broadband Networks financial discussion
Financial discussion In the first six months of 2018, Ultra Broadband Networks net sales decreased 11% year-on-year. On a constant currency basis, Ultra Broadband Networks net sales would have decreased 4% year-on-year. The decrease in Mobile Networks net sales was primarily due to radio networks, p
Slide 26: Global Services highlights Q1-Q2'18
Financial highlights EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change 2 565 2 809 Gross profit Gross margin % 14.5 % 19.5 % )bps R&D ) ) % SG&A ) ) % Other income and expenses ) ) Operating profit Operating margin % 0.2 % 6.4 % )bps
Slide 27: Net sales by region: Global Services
Net sales by region EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change Asia-Pacific Europe % Greater China Latin America % % Middle East & Africa % % North America Total 2 565 2 809 Financial discussion In the first six months of 2018, Global Services net sales decreased 9% year-o
Slide 28: IP Networks and Applications highlights Q1-Q2'18
Financial highlights EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change 2 540 2 663 % IP/Optical Networks 1 869 1 938 % IP Routing 1 141 1 275 Optical Networks % % Nokia Software Gross profit 1 030 1 159 Gross margin % 40.6 % 43.5 % )bps R&D ) ) SG&A ) ) % Other income and expense
Slide 29: Net sales by region: IP Networks and Applications
Constant currency YoY change EUR million Q1-Q2’18 Q1-Q2’17 YoY change IP Networks and Applications IP/Optical Networks Nokia Software Net sales by region
Slide 30: IP Networks and Applications financial discussion
Financial discussion In the first six months of 2018, IP Networks and Applications net sales decreased 5% year-on-year. On a constant currency basis, IP Networks and Applications net sales would have increased 3% year-on-year, with 4% growth in IP/Optical Networks, partially offset by a 1% decline i
Slide 31: Nokia Technologies highlights Q1-Q2'18
Financial highlights EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change % % Gross profit % Gross margin % 97.7 % 95.1 % bps R&D ) ) SG&A ) ) Other income and expenses ) ) Operating profit % Operating margin % 77.8 % 56.2 % 2 160 bps
Slide 32: Nokia Technologies financial discussion
Financial discussion In the first six months of 2018, Nokia Technologies net sales increased 18% year-on-year. On a constant currency basis, Nokia Technologies net sales would have increased 19% year-on-year. Of the EUR 726 million of net sales in the first six months of 2018, EUR 701 million relate
Slide 33: Group Common and Other highlights Q1-Q2'18
Financial highlights EUR million Q1-Q2’18 Q1-Q2’17 YoY change Constant currency YoY change Gross profit % Gross margin % 16.8 % 14.4 % bps R&D ) ) SG&A ) ) Other income and expenses Operating loss ) ) Operating margin % (19.8 (28.6 bps
Slide 34: Group Common and Other financial discussion
Financial discussion In the first six months of 2018, Group Common and Other net sales decreased 6% year-on-year. On a constant currency basis, Group Common and Other net sales would have decreased 1% year-on-year. The decrease in Group Common and Other net sales was primarily due to Alcatel Submari
Slide 35: Cash and cash flow in the first six months of 2018
EUR million, at end of period Q2’18 Q4’17 YTD change Total cash and current financial investments(1) 5 861 8 280 Net cash and current financial investments(1) 2 144 4 514 (1) Total cash and current financial investments consists of cash and cash equivalents and current financial investments. Net cas