Slide 1: Q3 2024 Financial results
Q3 2024 Financial results 17 October 2024 1 © 2024 Nokia
Slide 2: Disclaimer
Disclaimer It should be noted that Nokia and its business 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
Slide 3: Key messages – Q3 2024
Key messages – Q3 2024 • Market remains weak but starting to turn the corner. Market recovery happening slower than previously expected but now visible in Fixed Networks and IP Networks. Market remains weaker for Optical Networks and Mobile Networks. • Q3 saw return to growth in both Fixed Networks
Slide 4: Q3 Financial Performance
Q3 Financial Performance Marco Wirén Chief Financial Officer 4 © 2024 Nokia Public
Slide 5: Strong gross margin improvement amidst ongoing market weakness
Strong gross margin improvement amidst ongoing market weakness Q3 24 net sales (EUR) Q3 24 gross margin Q3 24 operating margin Q3 24 FCF (EUR) Q3 24 net cash (EUR) 4.3bn 45.7% 10.5% 0.6bn 5.5bn (7)% y-o-y +490bps y-o-y +160bps y-o-y Net Sales (EUR million) Gross profit (EUR million) and margin Opera
Slide 6: Network Infrastructure
Network Infrastructure Net sales by quarter (EUR million) Network Infrastructure 1 000 +9% +6% -15% 800 • Return to growth in both Fixed 600 Networks and IP Networks 400 • Strong growth in North America 200 driving both FN and IP 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3
Slide 7: Mobile Networks
Mobile Networks 3 500 Mobile Networks Net sales (EUR million) by quarter -17% 3 000 • Sales trends continue to be 2 500 impacted by weakness in India. 2 000 • Strong gross margin 1 500 improvement y-o-y 1 000 500 • Continued strong progress on 0 cost savings Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24
Slide 8: Cloud and Network Services
Cloud and Network 1 200 Cloud and Network Services Net sales by quarter -4% Services 1 000 800 • Flat net sales performance 600 excluding divestment 400 • Strong gross margin 200 performance supported by 0 improvement in cost of delivery Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 • Operat
Slide 9: Nokia Technologies
Nokia Technologies €1.4-1.5bn • Growth in net sales driven by €1.3bn smartphone renewals and new growth areas €0.9-1.0bn • Run-rate remained at approximately EUR 1.3bn • Continue to progress on multimedia and signed an agreement with a point-of-sale- payment device manufacturer 2024 planning assumpt
Slide 10: Regional sales: India drove majority of Q3 decline
Regional sales: India drove majority of Q3 decline Year-on-year at constant currency -8% reported -7% constant currency €4.7bn Nokia Technologies 35% Europe ex. Tech -7% -8% -2% -8% 1% €4.3bn -43% -3% -2% Americas APAC EMEA Q3 23 Latin North Greater India Rest of APAC Europe Middle East FX Impact Q3
Slide 11: Solid profit and working capital drive free cash flow
Solid profit and working capital drive free cash flow • Receivables driving working capital inflows • Returned EUR 0.4bn to shareholders through €5.5bn €5.5bn dividend and share buybacks • Free cash flow of EUR 621 million Q2 24 Adjusted Change in Dividend & Capex Cash Taxes Restructuring Other Othe
Slide 12: Business Highlights
Business Highlights Pekka Lundmark President and Chief Executive Officer 1 2 12 © 2024 Nokia Public
Slide 13: Focusing on our strategy execution in a challenging market
Focusing on our strategy execution in a challenging market Worldwide Telecom Equipment* Dell'oro market (Nokia scope, USD bn)** 10% 100 5% 95 YoY Growth in % —% (5)% 90 -2% (10)% 85 (15)% -8% (20)% 80 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2021 2022 2023 2024 22 22 23 23 23 23 24 24 Feb 2024 August 2024 *Source: D
Slide 14: Significant progress on Mobile Networks revamped strategy
Significant progress on Mobile Networks revamped strategy Lower cost base means ~EUR 9.5 billion net sales for double digit operating margin Continued deal Re-baselining Driving productivity Renewing go-to- Optimizing momentum operations for and efficiency via market model to commercial resiliency a
Slide 15: Network Infrastructure - Supportive market dynamics ahead
Network Infrastructure - Supportive market dynamics ahead Recovery has been slower than expected in 2024 but dynamics remain supportive Fixed Networks Net sales (EUR million) • ~70% of homes not connected with fiber (ex. China) mid- Fixed • Government funding programs starting to impact 3000 2000 si
Slide 16: Strategic push to expand into webscale and enterprise
Strategic push to expand into webscale and enterprise Investing to better position ourselves with non-CSP customers Event-Driven Automation Reliable, simplified and adaptable data center network operations Deploying Nokia IP and optical platforms in datacenters across U.S. and Europe as part of mass
Slide 17: Cloud and Network Services - driving cloud-native core leadership
Cloud and Network Services - driving cloud-native core leadership 1st 5G SA live deployment on 5G SA core hyperscaler cloud Autonomous & secure Leader networks Magic Quadrant TM for CSP 5G Core Network Infrastructure Solution Edge Regional Central Hybrid Public #1 Private Live 5G core 2 networks Any
Slide 18: 2024 Outlook
2024 Outlook Tracking within bottom-half of comparable OP range and high end of FCF range 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 Alternative performance measure section of
Slide 19: Key Takeaways
Key Takeaways Significant gross Market remains weak margin improvement Continued strong but starting to turn and cost savings deal momentum the corner program on track Strong cash performance with 2024 outlook net cash of reiterated EUR 5.5bn 19 © 2024 Nokia Public
Slide 20: Q&A
Q&A 2 0 20 © 2024 Nokia Public
Slide 21: © 2024 Nokia
2 1 © 2024 Nokia