Slide 1: Investor presentation 31 July 2020
Investor presentation 31 July 2020 1 © 2020 Nokia
Slide 2: Disclaimer
Disclaimer It should be noted that Nokia and its business are exposed to actual results to differ materially from those in the forward- IFRS, and either of these financial measures as used by Nokia may various risks and uncertainties and certain statements herein that looking statements. We do not u
Slide 3: Welcome
Welcome Rajeev Suri 4. Second quarter highlights President and CEO 6. Mobile Access 11. Cash generation 12. Networks highlights 13. Nokia Enterprise and Nokia Software 15. Regional update 16. Sustainability performance Kristian Pullola 18. Liquidity position and cash update CFO 20. Nokia Technologie
Slide 4: Q2 highlights (non-IFRS)
Highlights Net sales Group level gross margin Q2 highlights (non-IFRS) (non-IFRS) Continued improved execution drives strong €5.1bn 39.6% Q2 2019: €5.7bn Q2 2019: 37.2% margin and cash performance Group level operating margin EPS diluted (non-IFRS) €0.06 Within previously provided (non-IFRS) Outlook
Slide 5: A closer look at our second quarter
Highlights A closer look at our second quarter 1. 2. 3. 4. Mobile Access Actions to Progress within Progress in improvements strengthen cash our business our strategic generation groups diversification 5 © 2020 Nokia
Slide 6: Mobile Access business improvements
Mobile Access Mobile Access business improvements Driving profitability through four key actions 1. 2. 3. 4. Reduce product Maintain scale Improve Further cost commercial strengthen management and operational deal discipline performance in services 6 © 2020 Nokia
Slide 7: 5G Powered by ReefShark
Mobile Access improvements “5G Powered by Expected “5G Powered by ReefShark” shipments: ReefShark” ~ 100% Q2 2020 performance in-line with our expectations ~ 70% • This KPI tracks shipments of our System-on-Chip (SoC) based 5G Powered by ReefShark (“5G PBR”) product portfolio. Increased 5G PBR >35%
Slide 8: 4G and 5G mobile radio market share
Mobile Access improvements 4G and 5G mobile radio market share 4G+5G mobile radio market share, excluding China, expected to stabilize in Full Year 2020 at: Q2 2020 performance in-line with our expectations • We finished 2019 with our 4G+5G mobile radio market share standing at ~27% excluding China.
Slide 9: 5G win rate
Mobile Access improvements 5G win rate • This KPI measures how we are doing in converting our end of 2018 4G footprint into 5G footprint. It factors in customer size, as well as new 5G footprint where we did not previously have a 4G installed base (meaning it can be over 100%). • 5G win rate remaine
Slide 10: Mobile Access business improvements
Mobile Access Mobile Access business improvements Driving profitability through four key actions 1. 2. 3. 4. Reduce product Maintain scale Improve Further cost commercial strengthen management and operational deal discipline performance in services 10 © 2020 Nokia
Slide 11: Cash generation
Cash generation Strengthening Net cash and current financial investments cash generation Fourth consecutive quarter of solid cash performance €1.6bn Total cash and current financial investments €7.5bn 11 © 2020 Nokia
Slide 12: Networks highlights
Progress within our business groups Networks highlights Mobile Access – good operational momentum and strong margin expansion; 83 5G commercial deals and 32 live 5G networks Fixed Access – margin expansion and improving demand for fiber IP Routing – continued market leadership; difficult YoY compari
Slide 13: Nokia Enterprise
Progress in our strategic diversification Nokia Enterprise Q2 2020 performance in-line Q2 net sales growth Constant currency YoY change with our expectations • Strong momentum in webscale and private wireless • 180 private 4G and 5G deals to date • 18% year-on-year growth 13 © 2020 Nokia
Slide 14: Nokia Software
Progress in our strategic diversification Nokia Software Continued strong execution; difficult YoY comparison With the industry's leading cloud-native, multi-vendor, and multi-network solutions, we continue to see robust deal win rates. 14 © 2020 Nokia
Slide 15: Regional update
Regional update Regional update 15 © 2020 Nokia
Slide 16: Our sustainability performance
Sustainability performance Our sustainability performance Improving lives with our technology Climate Integrity Culture Continuing to recalibrate our existing Strengthened our compliance Committed to promoting a culture science-based targets (SBT) according communications to ensure our of inclusion
Slide 17: Results
Results 18. Liquidity position and cash update 20. Results for Nokia Technologies and Group Common and Other 22. Cost savings update 23. Outlook Kristian Pullola CFO 17 © 2020 Nokia
Slide 18: Liquidity position
Liquidity position Liquidity position Total cash and current financial investments (EUR billion) EUR 1.0bn debt 8 7,5 Solid total cash position of 7 EUR 7.5 billion 6,5 Raised EUR 1.0 billion of debt, 6 on a net basis 5,5 5 EUR 1.5 billion revolving credit facility 4,5 4 3,5 3 Q2 2019 Q3 2019 Q4 201
Slide 19: Change in net cash
Cash update Change in net cash Free cash flow of EUR 265 million (EUR billion) 19 © 2020 Nokia
Slide 20: Results for Nokia Technologies
Results for Nokia Technologies Nokia Technologies Profits remain strong, but declined mainly as a result of lower net sales. 20 © 2020 Nokia
Slide 21: Results for Group Common and Other
Results for Group Common and Other Group Common and Other COVID-19 had a ~ EUR 150 million negative net impact on net sales in Q2. 21 © 2020 Nokia
Slide 22: Nokia Group Cost savings program
Cost savings update Nokia Group Cost savings program Remain on track to meet In EUR million, To be To be recorded EUR 500 million target by approximately Total Recorded as of recorded in beyond end of 2020 expected Q2 2020 Q3-Q4 2020 2020 Restructuring and associated 900 660 240 0 No changes to expe
Slide 23: Outlook
Outlook Outlook Full Year 2020 Non-IFRS diluted earnings per share EUR 0.25 (adjusted from EUR 0.23) plus or minus 5 cents Non-IFRS operating margin 9.5% (adjusted from 9.0%) plus or minus 1.5 percentage points Recurring free cash flow1 Clearly positive (This is an update from positive) Long term (3
Slide 24: © 2020 Nokia
© 2020 Nokia NOKIA
Slide 25: NOKIA
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