Nokia Q4 2008 Net Sales EUR 12.7 Billion, non-IFRS EPS EUR 0.26 (Reported EPS EUR 0.15)
ESPOO,
Board of Directors will propose a dividend of
(
The complete press release with tables is available at:
http://www.nokia.com/results/Nokia_results2008Q4e.pdf
Non-IFRS full
Non-IFRS fourth quarter 2008 year 2008
results(1, 2) results(1, 2, 3)
Q4/ Q4/ YoY Q3/ QoQ YoY
EUR million 2008 2007 Change 2008 Change 2008 2007 Change
Net sales 12665 15738 -19.5% 12239 3.5% 50722 51108 -0.8%
Devices &
Services 8141 11141 -26.9% 8605 -5.4% 35099 37705 -6.9%
NAVTEQ 206 157 31.2% 363
Nokia Siemens
Networks 4340 4604 -5.7% 3504 23.9% 15319 13443 14.0%
Operating profit 1239 2634 -53.0% 1756 -29.4% 7033 7697 -8.6%
Devices &
Services 983 2541 -61.3% 1602 -38.6% 6373 7588 -16.0%
NAVTEQ 53 29 82.8% 82
Nokia Siemens
Networks 225 195 15.4% 177 27.1% 757 331 128.7%
Operating margin 9.8% 16.7% 14.3% 13.9% 15.1%
Devices &
Services 12.1% 22.8% 18.6% 18.2% 20.1%
NAVTEQ 25.7% 18.5% 22.6%
Nokia Siemens
Networks 5.2% 4.2% 5.1% 4.9% 2.5%
EPS, EUR Diluted 0.26 0.48 -45.8% 0.33 -21.2% 1.34 1.49 -10.1%
Reported full
Reported fourth quarter 2008 year 2008
results(1) results(1,3)
Q4/ Q4/ YoY Q3/ QoQ YoY
EUR million 2008 2007 Change 2008 Change 2008 2007 Change
Net sales 12662 15717 -19.4% 12237 3.5% 50710 51058 -0.7%
Devices &
Services 8141 11141 -26.9% 8605 -5.4% 35099 37705 -6.9%
NAVTEQ 205 156 31.4% 361
Nokia Siemens
Networks 4338 4583 -5.3% 3503 23.8% 15309 13393 14.3%
Operating profit 492 2492 -80.3% 1469 -66.5% 4966 7985 -37.8%
Devices &
Services 766 2594 -70.5% 1602 -52.2% 5816 7584 -23.3%
NAVTEQ -73 -80 -8.8% - 153
Nokia Siemens
Networks -179 0 -1 - 301 -1308 -77.0%
Operating margin 3.9% 15.9% 12.0% 9.8% 15.6%
Devices &
Services 9.4% 23.3% 18.6% 16.6% 20.1%
NAVTEQ -35.6% -51.3% -42.4%
Nokia Siemens
Networks -4.1% 0.0% 0.0% -2.0% -9.8%
EPS, EUR Diluted 0.15 0.47 -68.1% 0.29 -48.3% 1.05 1.83 -42.6%
Note 1 relating to NAVTEQ: On
acquisition of NAVTEQ Corporation. NAVTEQ is a separate reportable segment of
Nokia starting from the third quarter 2008. Accordingly, the results of
NAVTEQ are not available for the prior periods.
Note 2 relating to non-IFRS results: Non-IFRS results exclude special
items for all periods. In addition, non-IFRS results exclude intangible asset
amortization, other purchase price accounting related items and inventory
value adjustments arising from i) the formation of Nokia Siemens Networks and
ii) all business acquisitions completed after
information about the exclusions from the non-IFRS results may be found in
this press release on pages 3 and 11-16 for the quarterly periods and pages
24 -29 for the full year 2008 and 2007.
Nokia believes that these non-IFRS financial measures provide meaningful
supplemental information to both management and investors regarding Nokia’s
performance by excluding the above-described items that may not be indicative
of Nokia’s business operating results. These non-IFRS financial measures
should not be viewed in isolation or as substitutes to the equivalent IFRS
measure(s), but should be used in conjunction with the most directly
comparable IFRS measure(s) in the reported results.
A reconciliation of the non-IFRS results to our reported results for Q4
2008 and Q4 2007 as well as for full year 2008 and 2007 can be found in the
tables on pages 11-16 and 25-29 of this press release. A reconciliation of
our Q3 2008 non-IFRS results can be found on pages 12-16 of our Q3 2008
Interim Report of
Note 3 relating to Nokia Siemens Networks: The results of Nokia Group and
Nokia Siemens Networks for the full year 2008 are not directly comparable to
the results for the full year 2007, which include the results of Nokia’s
former Networks business group for the first quarter 2007 and those of Nokia
Siemens Networks from
FOURTH QUARTER 2008 HIGHLIGHTS
– Nokia net sales of
sequentially (down 18% and up 1% at constant currency).
– Devices & Services net sales of
and down 5% sequentially (down 25% and 8% at constant currency).
– Services and software net sales of
– Estimated industry mobile device volumes of 305 million units, down 9%
year on year and down 2% sequentially.
– Nokia mobile device volumes of 113.1 million units, down 15% year on
year and down 4% sequentially.
– Nokia estimated mobile device market share of 37% in Q4 2008, down from
40% in Q4 2007 and down from 38% in Q3 2008. The full year 2008 estimated
market share was 39%.
– Nokia mobile device ASP of
– Devices & Services gross margin of 33.8%, down from 36.5% in Q3 2008.
– NAVTEQ net sales of
million
– Nokia Siemens Networks net sales of
year and up 24% sequentially (down 4% and up 23% at constant currency).
– Nokia Siemens Networks achieved substantially all of the
billion
– Operating cash flow was negative
one-time
the previously announced license agreement. Excluding the Qualcomm payment,
operating cash flow was
– Total cash and other liquid assets of
2008.
OLLI-PEKKA KALLASVUO,
“In recent weeks, the macroeconomic environment has deteriorated rapidly,
with even weaker consumer confidence, unprecedented currency volatility and
credit tightness continuing to impact the mobile communications industry. We
are taking action to reduce overall costs and to preserve our strong capital
structure. This is clearly our top priority in the current economic
environment. However, it is important for Nokia to continue investing at the
proper pace in future growth. We believe Nokia has a tremendous opportunity
to capture value as the Internet services market evolves and grows. Being a
catalyst for change has been our heritage and it will be our future.”
INDUSTRY AND NOKIA OUTLOOK
– Nokia expects industry mobile device volumes in the first quarter 2009
to decline sequentially to a greater extent than the seasonal sequential
decrease in the first quarter of the past few years.
– Nokia expects its mobile device market share in the first quarter 2009
to be at approximately the same level sequentially.
– While noting the extremely limited visibility, Nokia now expects 2009
industry mobile device volumes to decline approximately 10% from 2008 levels.
Nokia expects the decline to be greater in the first half than in the second
half of the year. This is an update to Nokia’s earlier estimate that 2009
industry mobile device volumes would decline 5% or more from 2008 levels.
– Nokia continues to target an increase in its market share in mobile
devices in 2009.
– Nokia now targets its non-IFRS operating margin in Devices & Services
to be more than 10% in the first half 2009 and to be in the teens for the
second half 2009, rather than in the teens for the full year 2009 as
previously targeted.
– Nokia targets its annualized non-IFRS operating expense run rate in
Devices & Services to be lower than
would represent a reduction of more than
run rate at the beginning of 2009. Nokia targets that a majority of the
reduction will happen during 2009.
– Nokia and Nokia Siemens Networks continue to expect the mobile
infrastructure and fixed infrastructure and related services market to
decline 5% or more in Euro terms in 2009, from 2008 levels.
– Nokia and Nokia Siemens Networks continue to target for Nokia Siemens
Networks market share to remain constant in 2009, compared to 2008.
Q4 2008 FINANCIAL HIGHLIGHTS
(Comparisons are given to the fourth quarter 2007 results, unless
otherwise indicated.)
The non-IFRS results exclusions
Q4
–
Siemens Networks
–
–
Foundation
–
–
price accounting related items arising from the formation of Nokia Siemens
Networks
–
price accounting related items arising from the acquisition of NAVTEQ
Q3
–
Siemens Networks
–
price accounting related items arising from the formation of Nokia Siemens
Networks
–
price accounting related items arising from the acquisition of NAVTEQ
Q4
–
Siemens Networks
–
–
–
price accounting related items arising from the formation of Nokia Siemens
Networks
Non-IFRS results exclude special items for all periods. In addition,
non-IFRS results exclude intangible asset amortization, other purchase price
accounting related items and inventory value adjustments arising from i) the
formation of Nokia Siemens Networks and ii) all business acquisitions
completed after
Nokia Group
Nokia’s fourth quarter 2008 net sales decreased 19% to
compared with
currency, group net sales would have decreased 18% year on year and increased
1% sequentially.
The following chart sets out the year on year and sequential growth rates
in our net sales on a reported basis and at constant currency for the periods
indicated.
NOKIA FOURTH QUARTER 2008 NET SALES
Reported & Constant Currency(1)
Q4/2008 vs. Q4/2008 vs.
Q4/2007 Q3/2008
Change Change
Group net sales - reported -19% 3%
Group net sales - constant currency(1) -18% 1%
Devices & Services net sales - reported -27% -5%
Devices & Services net sales - constant
currency(1) -25% -8%
Nokia Siemens Networks net sales -
reported
-5% 24%
Nokia Siemens Networks net sales -
constant currency(1) -4% 23%
Note 1: Change in net sales at constant currency excludes the impact of
changes in exchange rates in comparison to the Euro, our reporting currency.
Nokia’s fourth quarter 2008 reported operating profit decreased 80% to
Nokia’s fourth quarter 2008 non-IFRS operating profit decreased 53% to
1.2 billion
Nokia’s fourth quarter 2008 reported operating margin was 3.9% (15.9%).
Nokia’s fourth quarter 2008 non-IFRS operating margin was 9.8% (16.7%).
Operating cash flow for the fourth quarter 2008 was negative
billion
Qualcomm as part of the previously announced license agreement. Excluding the
Qualcomm payment, operating cash flow was
flow for the fourth quarter 2007 was
liquid assets were
11.8 billion
debt-equity ratio (gearing) was – 14%, compared with – 62% at
2007
Devices & Services
In the fourth quarter 2008, the total mobile device volumes of our
Devices & Services group were 113.1 million units, representing a decline of
15% year on year and a 4% sequential decrease. The overall industry mobile
device volumes for the same period were 305 million units based on Nokia’s
estimate, representing a 9% year on year decrease and a 2% sequential
decrease.
Of the total industry mobile device volumes, converged mobile device
industry volumes in the fourth quarter 2008 increased to 48.0 million units,
based on Nokia’s estimate, compared with an estimated 40.1 million units in
the fourth quarter 2007 and 44.2 million units in the third quarter 2008. Our
own converged mobile device volumes were 15.1 million units in the fourth
quarter 2008, compared with 18.8 million units in the fourth quarter 2007 and
15.5 million units in the third quarter 2008. We shipped approximately 8
million Nokia Nseries and over 3 million Nokia Eseries devices during the
fourth quarter 2008.
The following chart sets out our mobile device volumes for the periods
indicated, as well as the year on year and sequential growth rates, by
geographic area.
NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA
(million units) Q4/2008 Q4/2007 YoY Change Q3/2008 QoQ Change
Europe 34.7 37.2 -6.7% 27.4 26.6%
Middle East & Africa 18.2 23.6 -22.9% 21.5 -15.3%
Greater China 12.9 20.2 -36.1% 19.8 -34.8%
Asia-Pacific 29.9 34.0 -12.1% 33.6 -11.0%
North America 4.1 5.1 -19.6% 4.5 -8.9%
Latin America 13.3 13.4 -0.7% 11.0 20.9%
Total 113.1 133.5 -15.3% 117.8 -4.0%
Based on our preliminary market estimate, Nokia’s mobile device market
share for the fourth quarter 2008 was 37%, compared with 40% in the fourth
quarter 2007 and 38% in the third quarter 2008. Our year on year market share
decline was driven primarily by lower market share in
slightly higher market share in
market share decline was driven primarily by lower market share in
China
was sequentially up in
extreme currency volatility, our market share in the fourth quarter 2008 in
some geographic areas may have been affected by products being re-routed by
the distribution channels for sale to consumers in other geographic areas,
particularly in
Our mobile device average selling price (ASP) in the fourth quarter 2008
was
in the third quarter 2008. The lower year on year ASP was primarily due to a
higher proportion of sales of lower priced products. Our ASP was little
changed on a sequential basis due primarily to a similar product mix in the
third and fourth quarters 2008. Starting from the first quarter 2008, our ASP
excludes net sales from our services and software business. Prior periods
have been reclassified for comparison purposes.
Fourth quarter 2008 Devices & Services net sales declined 27% to
billion
constant currency, Devices & Services net sales would have decreased 25%. The
net sales decline resulted primarily from lower volumes in all regions,
combined with an ASP decline, driven by weaker demand, a higher proportion of
sales of lower priced products and general price pressure compared to the
fourth quarter 2007. Of our total Devices & Services net sales, services and
software contributed
37% sequentially.
Net sales grew in Devices & Services year on year in
sales were down year on year in
Devices & Services reported gross profit and non-IFRS gross profit
decreased 37% to
quarter 2007, with a reported gross margin and non-IFRS gross margin of 33.8%
(38.9%). The year on year gross margin decrease was primarily due to a higher
proportion of sales of lower end, lower margin devices, and a lower
proportion of new high-end, higher margin devices during the fourth quarter
2008.
Devices & Services reported operating profit decreased 70% to
million
reported operating margin of 9.4% (23.3%). Devices & Services non-IFRS
operating profit decreased 61% to
billion
(22.8%). The 61% year on year decrease in non-IFRS operating profit for the
fourth quarter 2008 was driven primarily by lower net sales compared to the
fourth quarter 2007.
NAVTEQ
(Comparisons are given to the third quarter 2008)
Fourth quarter 2008 NAVTEQ reported net sales increased 31% sequentially
to
NAVTEQ reported gross profit was
gross margin of 87.8% (88.5%). Non-IFRS gross profit was
139 million
reported operating loss of
operating margin was -35.6%(-51.3%). NAVTEQ non-IFRS operating profit was
53 million
(18.5%).
Nokia Siemens Networks
Fourth quarter 2008 net sales decreased 5% to
with
Siemens Networks net sales would have decreased 4%.
The following chart sets out Nokia Siemens Networks net sales for the
periods indicated, as well as the year on year and sequential growth rates,
by geographic area.
NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA
EUR million Q4/2008 Q4/2007 YoY Change Q3/2008 QoQ Change
Europe 1 636 2 045 -20.0% 1 358 20.5%
Middle East & Africa 615 541 13.7% 424 45.0%
Greater China 409 492 -16.9% 288 42.0%
Asia-Pacific 967 838 15.4% 894 8.2%
North America 198 243 -18.5% 150 32.0%
Latin America 513 424 21.0% 389 31.9%
Total 4 338 4 583 -5.3% 3 503 23.8%
Nokia Siemens Networks reported gross profit decreased 17% to
billion
gross margin of 26.1% (29.7%). Nokia Siemens Networks non-IFRS gross profit
decreased 6% to
quarter 2007, with a non-IFRS gross margin of 30.4% (30.4%). The lower year
on year non-IFRS gross profit in the fourth quarter 2008 was due primarily to
lower year on year net sales.
Nokia Siemens Networks had a fourth quarter 2008 reported operating loss
of
the fourth quarter 2007, with a reported operating margin of -4.1% (0%).
Nokia Siemens Networks non-IFRS operating profit increased 15% to
million
fourth quarter 2007, with a non-IFRS operating margin of 5.2% (4.2%). The
year on year improvement in Nokia Siemens Networks non-IFRS operating profit
primarily reflected lower operating expenses.
Q4 2008 OPERATING HIGHLIGHTS
Nokia
– Nokia announced a reorganization of its sales, marketing, research and
other activities, impacting an estimated 850 employees globally. The
reorganization includes a headcount reduction at Nokia Research Center and
the closure of Nokia’s offices in
– Nokia announced that it is discontinuing mobile device sales and
marketing activities in
and Nokia’s global R&D and sourcing operations in
– Nokia announced the renewal of a multi-year patent license agreement
with Research In Motion (RIM), covering the worldwide use of standards
essential patents for GSM, WCDMA and CDMA2000 technologies. The financial
terms of the agreement consist of an up-front payment and on-going royalties
payable to Nokia.
Devices
– Further strengthening its Nokia Nseries range of mobile devices, Nokia
announced the Nokia N97, a mobile computer featuring a 3.5″ touch display
with a full QWERTY keyboard, a 5 megapixel camera, integrated A-GPS sensors
and an electronic compass, and 32 GB of on-board memory.
– Nokia announced and started shipments of the Nokia 5800 XpressMusic, a
mobile device optimized for music and featuring a 3.2 inch touch screen
display with tactile feedback, a 3.2 megapixel camera and A-GPS functionality.
– Nokia announced and started shipments of the Nokia E63, with a full
QWERTY keyboard, a variety of multimedia features and offered at a price
intended to make the Eseries range accessible to a wider audience.
– Nokia announced the strengthening of its portfolio of entry-level
mobile devices with several new models, including the Nokia 1202, developed
especially for people living in rural areas. With an estimated retail price
of
– Nokia completed its acquisition of Symbian Limited, the company that
develops and licenses Symbian OS, the market-leading operating system for
mobile devices. The acquisition is an important step by Nokia and industry
partners to develop Symbian OS into an open and unified mobile software
platform, which will be licensed royalty-free and eventually move towards
‘open source’.
– Nokia and IBM announced IBM Lotus Notes support for selected Nokia
S60-based mobile devices, meaning that millions of Lotus Notes users are now
able to access their email with their Nokia devices.
Services & Software
– Nokia announced an agreement to sell its security appliance business to
Check Point Software Technologies, a disposal in line with Nokia’s renewed
business mobility strategy to cease developing and marketing its own
behind-the-firewall business mobility solutions.
– Nokia completed its acquisition of OZ Communications Inc., a purchase
intended to strengthen its position in consumer mobile messaging.
– In the
‘all-you-can-eat’ music offer where, following the purchase of a Nokia Comes
With Music-edition device, users can download freely from a catalogue of
millions of tracks for a pre-defined period of time – typically one year or
longer – and keep the music once that period is up. Nokia launched the
service with the support of all the major music labels – Universal Music
Group International, Warner Music Group, Sony BMG Music Entertainment and EMI
Group – numerous independent labels as well as music publishing rights.
– Nokia launched
bringing the cumulative total of digital music stores to 12 across three
continents.
– Nokia launched Maps on Ovi, a tool enabling people to plan their
journey at home on their PC and synchronize the data with their mobile.
– Nokia launched the beta trial of Mail on Ovi, a free email service
enabling users of selected Nokia devices to obtain an ovi.com-suffixed email
account without the need for a separate PC.
– Nokia announced the launch of Nokia Messaging, a service which gives
millions of consumers access to email and instant messaging accounts from
Yahoo! Mail(R) and Yahoo! Messenger(R), Windows Live Hotmail, Gmail and
Google Talk, and AOL Mail, as well as email solutions from thousands of ISPs
around the world on the majority of Nokia devices. Nokia Messaging is
launching commercially in selected markets during the first quarter 2009.
– Nokia announced
and education services being developed for non-urban consumers in emerging
markets.
– Seven new titles were made commercially available on the N-Gage mobile
games service.
NAVTEQ
– NAVTEQ announced an agreement to acquire T-Traffic Systems GmbH, a
leading provider of traffic services in
completed in
– NAVTEQ expanded its portfolio of dynamic content – or real-time data -
to include flight status and fuel prices, leveraging leading dynamic
distribution capabilities from traffic and camera alerts.
– NAVTEQ Traffic was launched in Microsoft Windows Live FrameIt.
– NAVTEQ announced an industry strategy for map-enhanced ADAS (advanced
driver assistance systems) using the Map-Enhanced Positioning Engine (MPE).
– NAVTEQ launched an enhanced Traffic Patterns product in
Nokia Siemens Networks
– Nokia Siemens Networks secured 3G contracts with three major operators
in Canada – Telus,
breakthrough into a wireless market long dominated by incumbent suppliers.
– Nokia Siemens Networks became the first infrastructure vendor to ship
Long Term Evolution (LTE) compatible base stations. The Flexi Multimode Base
Station hardware requires only a software upgrade for full LTE capability.
Nokia Siemens Networks also recorded another world first with a demonstration
of LTE-Advanced technology.
– Nokia Siemens Networks strengthened its leading position in packet core
with a deal with NTT DoCoMo for LTE Evolved Packet Core (EPC), in partnership
with Fujitsu.
– In December, Nokia Siemens Networks announced it had been selected for
a major managed services deal with Tata Teleservices Limited, which involves
network planning, project management, network roll-out and systems
integration activities across the Indian operator’s new national GSM network
as well as the provision of radio access and soft-switching equipment.
– Research house Ovum named Nokia Siemens Networks the market leader in
the WDM (Wavelength Division Multiplexing) deployment of 40 Gigabit per
second optical transmission technology, during a quarter in which the company
began a significant roll-out with a major customer.
– Nokia Siemens Networks expanded its relationship with Blyk, the free
mobile network for 16-24 year olds funded by advertising, with turnkey
services contracts to host the operator’s core network as it expands into
Netherlands
For more information on the operating highlights mentioned above, please
refer to related press announcements at the following links:
http://www.nokia.com/press http://www.navteq.com/about/press.html,
http://www.nokiasiemensnetworks.com/press
NOKIA IN THE FOURTH QUARTER 2008
(The following discussion is of Nokia’s reported results. Comparisons are
given to the fourth quarter 2007 results, unless otherwise indicated.)
As of
Phones, Multimedia and Enterprise Solutions, and the supporting horizontal
groups were replaced by an integrated business segment, Devices & Services.
Prior period results for Nokia and its reportable segments have been
regrouped for comparability purposes according to the new reportable segments
(on an unaudited basis). Devices & Services has three business units,
Devices, Services and Markets, supported by a Corporate Development Office.
Link to regrouped 2007 financials: http://investors.nokia.com
On
NAVTEQ is a separate reportable segment of Nokia starting from the third
quarter 2008. Accordingly, the results of NAVTEQ are not available for the
prior periods.
Nokia’s net sales decreased 19% to
million). Net sales of Devices & Services decreased 27% to
(
Nokia Siemens Networks decreased 5% to
Operating profit decreased 80% to
representing an operating margin of 3.9% (15.9%). Operating profit in Devices
& Services decreased 70% to
an operating margin of 9.4% (23.3%). Operating loss in NAVTEQ was
million
Siemens Networks was
operating margin of -4.1% (0%). Group Common Functions reported expense
totaled
In the period from October to
minority interests was
quarter 2008, Nokia taxes benefited from Nokia obtaining a favorable high
tech qualification assessment in
benefits from prior years resulted in a lower tax rate in the fourth quarter
2008. Net profit totaled
share decreased to
NOKIA IN JANUARY –
(The following discussion is of Nokia’s reported results. Comparisons are
given to 2007 results, unless otherwise indicated.)
As of
Phones, Multimedia and Enterprise Solutions, and the supporting horizontal
groups were replaced by an integrated business segment, Devices & Services.
Prior period results for Nokia and its reportable segments have been
regrouped for comparability purposes according to the new reportable segments
(on an unaudited basis). Devices & Services has three business units,
Devices, Services and Markets, supported by a Corporate Development Office.
Link to regrouped 2007 financials: http://investors.nokia.com.
As of
Networks on a fully consolidated basis. Nokia Siemens Networks, a company
jointly owned by Nokia and Siemens, is comprised of the former Nokia Networks
and Siemens’ carrier-related operations for fixed and mobile networks.
Accordingly, the results of Nokia Group and Nokia Siemens Networks for the
full year 2008 are not directly comparable to the results for the full year
2007. Nokia’s first quarter 2007 included the former Nokia Networks business
group only.
On
NAVTEQ is a separate reportable segment of Nokia starting from the third
quarter 2008. Accordingly, the results of NAVTEQ are not available for the
prior periods.
Nokia Group
For 2008, Nokia’s net sales decreased 1% to
billion
increased 14% to
the six months ended
In 2008,
America
Nokia generated the greatest net sales in 2008 were, in descending order of
magnitude,
in 2008. In comparison, the 10 markets in which Nokia generated the greatest
net sales in 2007 were
net sales in 2007.
Nokia’s gross margin in 2008 was 34.3%, compared to 33.8% in 2007.
Nokia’s 2008 operating profit decreased 38% to
Nokia’s operating profit in 2008 included purchase price accounting items and
other special items of net negative
million
billion
margin of 16.6% (20.1%). Devices & Services operating profit in 2008 included
special items of negative
NAVTEQ’s operating loss for the six months ended on
153 million
loss included purchase price accounting items and other special items of
negative
301 million
representing an operating margin of -2.0% (-9.8%). Nokia Siemens Networks
operating loss in 2008 included purchase price accounting items and other
special items of net negative
The global economic slowdown, combined with unprecedented currency
volatility, resulted in a sharp pull back in global consumer spending in the
second half of 2008, particularly in the fourth quarter. The more limited
availability of credit also reduced the purchasing ability of some trade
customers. In 2008, Nokia’s net sales and profitability, in particular in
Devices & Services, were negatively impacted by these factors.
Reported research and development expenses were
up 6% from
represented 11.8% of Nokia net sales in 2008, up from 11.0% in 2007. Research
and development expenses included purchase price accounting items and other
special items of
representing approximately 31% of the group’s total workforce, and had a
strong research and development presence in 16 countries.
In 2008, Nokia’s selling and marketing expenses were
compared with
Nokia represented 8.6% of its net sales in 2008 (8.6%). Selling and marketing
expenses included purchase price accounting items and other special items of
Administrative and general expenses were
compared to
equal to 2.5% of net sales in 2008 (2.3%). Administrative and general
expenses included special items of
Group Common Functions expenses totaled
with an operating profit of
included a
liabilities.
Net financial expense was
million
Profit before tax and minority interests was
billion
share decreased to
1.85
Operating cash flow for the year ended
billion
were
debt-to-equity ratio (gearing) was – 14% (-61% as of
2008, capital expenditure amounted to
Devices & Services
In 2008, the total mobile device volume of our Devices & Services group
reached 468 million units, representing an increase of 7% year on year.
Strong year on year volume growth in the first half 2008 was significantly
offset by slowing growth in the third quarter 2008 and declining volumes in
the fourth quarter 2008. The overall industry mobile device volumes for 2008
reached 1.21 billion units, based on Nokia’s preliminary market estimate,
representing an increase of 6% year on year. Based on our preliminary market
estimate, Nokia’s market share grew to 39 % in 2008, compared to 38% in 2007.
Of the total industry mobile device volumes, converged mobile device
industry volumes in 2008 increased to 161 million units, based on Nokia’s
estimate, compared with an estimated 117 million units in 2007. Our own
converged mobile device volumes were 60.6 million units in 2008, compared
with 60.5 million units in 2007. Nokia shipped over 36 million Nokia Nseries
and approximately 10 million Nokia Eseries devices in 2008.
The following chart sets out our mobile device volumes for the periods
indicated, as well as the year on year growth rates, by geographic area.
NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA
(million units) 2008 2007 YoY Change
Europe 114.9 117.2 -2.0%
Middle East & Africa 81.0 75.6 7.1%
Greater China 71.3 70.7 0.8%
Asia-Pacific 134.0 112.9 18.7%
North America 15.7 19.4 -19.1%
Latin America 51.5 41.3 24.7%
Total 468.4 437.1 7.2%
During 2008, Nokia gained device market share in
In
by strong share gains in markets such as
continued to benefit from its brand and broad product portfolio. Nokia’s
significant market share gains in
strong position in the fastest growing markets, such as
In
result of market share losses in several markets, including
primarily due to a market share decline in the US.
In
product portfolio and extensive distribution system during 2008, but our
market share fell partly due to price competition. In
share was slightly down. Nokia’s share increased in, for example,
Nokia’s device ASP in 2008 was
2007. Industry ASPs also declined in 2008. Nokia’s lower ASP in 2008 compared
to 2007 was primarily the result of a higher proportion of lower-priced entry
level device sales where industry growth was strong.
Devices & Services net sales 2008 declined 7% to
compared with
Services net sales would have decreased 2%. Volume growth was more than
offset by an ASP decline. Of our total Devices & Services net sales, services
and software contributed
Net sales grew in Devices & Services year on year in
sales were down year on year in
Devices & Services gross profit decreased 7% to
compared with
Devices & Services operating profit decreased 23% to
compared with
2008 was 16.6%, compared with 20.1% in 2007. The year on year decrease in
operating profit in 2008 was driven primarily by lower net sales and higher
operating expenses compared to 2007.
NAVTEQ
Net sales of NAVTEQ for the six months ended on
accounted for 44% of NAVTEQ’s net sales,
NAVTEQ operating loss for the six months ended on
Nokia Siemens Networks
Net sales of Nokia Siemens Networks increased 14% to
2008, compared with
of Nokia Siemens Networks would have increased 20%.
of Nokia Siemens Network’s net sales,
13 %,
for Nokia Siemens Networks for 2008 are not directly comparable to the
results for 2007, which include the results of Nokia’s former Networks
business group for the first quarter 2007 and those of Nokia Siemens Networks
from
Nokia Siemens Networks had an operating loss of
with operating loss of
Siemens Networks in 2008 was -2.0% compared with -9.8% in 2007. The decrease
in operating loss in 2008 resulted primarily from higher net sales and lower
operating expenses and restructuring costs.
2008 OPERATING HIGHLIGHTS
Nokia
– Nokia began operating under its new organizational structure, with its
three former mobile device business groups-Mobile Phones, Multimedia and
Enterprise Solutions-and the supporting horizontal groups forming one
integrated business group, Devices & Services. The new organizational
structure is designed to align Nokia with the opportunities Nokia sees for
future growth in devices and services and increase efficient ways of working
across the company. Devices & Services has three business units: Devices;
Services; and Markets. The three units receive operational support from our
Corporate Development Office, which is also responsible for exploring
corporate strategic and future growth opportunities.
– Nokia announced and completed the closure of its mobile devices
production facility in Bochum,
its new facility in Cluj,
device production facilities in
– Nokia and Qualcomm announced that they entered into a new 15 year
license agreement covering various standards, including GSM, EDGE, CDMA,
WCDMA, HSDPA, OFDM, WiMAX, LTE and other technologies. The agreement resulted
in settlement of all litigation between the two companies.
Devices
– Further strengthening its Nokia Nseries range of mobile devices, Nokia
announced and began shipments of the Nokia N78, Nokia N79, Nokia N85 and
Nokia N96, and unveiled the flagship Nokia N97 mobile computer.
– Building out the Nokia Eseries range of mobile devices, Nokia announced
and began shipments of the Nokia E63, Nokia E66 and Nokia E71.
– Nokia announced that Microsoft Exchange ActiveSync will be available in
all Nokia S60 3rd Edition devices, as well as compatibility with IBM Lotus
Notes Traveler on all Nokia S60 3rd Edition devices. These announcements
enable access to over 80 percent of the world’s corporate email accounts.
– Nokia announced and began shipments of eight mobile devices with
functions and features specially designed for consumers in emerging markets,
starting with the Nokia 1202 and up to the Nokia 7100 Supernova.
– Nokia announced and began shipments of the Nokia 5800 XpressMusic, a
mobile device optimized for music and featuring a 3.2 inch touch screen
display with tactile feedback, a 3.2 megapixel camera and A-GPS functionality.
– Nokia announced and began shipments of the Nokia 6210 Navigator, the
first Nokia GPS-enabled device with an integrated compass for pedestrian
guidance, and the Nokia 6220 classic.
Services & Software
– Nokia announced that it is focusing on developing services in five core
areas: music, maps, media, messaging and games.
– Nokia expanded
cumulative total of 12 across three continents in 2008, from one at the end
of 2007.
– Nokia launched Comes With Music first in the
support of all major music labels – Universal Music Group International,
Warner Music Group, Sony BMG Music Entertainment and EMI Group – numerous
independent labels as well as music publishing rights.
– The number of titles available on the N-Gage mobile games service grew
to 27 by the end of the year.
– Nokia updated Ovi.com with functionality for syncing your calendar,
contacts, notes and tasks between a Nokia mobile device and www.ovi.com.
NAVTEQ
– NAVTEQ announced an industry strategy for map-enhanced ADAS (advanced
driver assistance systems) using the Map-Enhanced Positioning Engine (MPE).
– NAVTEQ started providing both NAVTEQ Traffic RDS delivery service and
NAVTEQ interactive advertising services for multiple Garmin devices (the nuvi
755T and 775T and nuvi 2×5 family). Together with Garmin, NAVTEQ is the first
to bring an advertising supported, real-time traffic service to market in
– NAVTEQ expanded its portfolio of dynamic content – or real-time data -
to include flight status and fuel prices, leveraging leading dynamic
distribution capabilities from traffic and camera alerts.
Nokia Siemens Networks
– Nokia Siemens Networks achieved substantially all of the
billion
– In November, Nokia Siemens Networks announced that it completed the
preliminary planning process to identify the proposed remaining headcount
reductions necessary to reach its previously announced synergy-related
headcount adjustment goal of 9 000 and began the process of sharing those
plans with employees and their representatives.
– At the Mobile World Congress 2008, Nokia Siemens Networks launched its
LTE solution for radio and core networks, including the new Flexi Multimode
Base Station, and in October announced that it had begun shipping
LTE-compatible Flexi base stations.
– Nokia Siemens Networks demonstrated its technological leadership
throughout the year with a number of industry-leading events: the launch of
the industry’s first DWDM single optical platform serving Metro to Core; the
world’s first demonstration of LTE-Advanced technology; a record-breaking 100
Gbps. transmission on a single wavelength for more than 1 040 kilometers over
deployed field fiber (with Verizon); the worlds fastest IHSPA data call using
a mobile device.
– Nokia Siemens Networks secured major 3G radio access deals all over the
world, from the UK to
– Nokia Siemens Networks’ Services expanded its global remote delivery
capability, delivering more than 200 projects across the world with successes
including major event support ensuring network quality and performance,
software upgrades and maintenance, and network monitoring and planning
services.
– Nokia Siemens Networks continued to win major managed services deals
including a breakthrough network operations agreement with Embarq Corporation
in
– Demonstrating its ongoing commitment to developing innovative solutions
for emerging markets, Nokia Siemens Networks launched its eCommerce rural
trading platform with Fujian Mobile in
to its Village Connection solution.
ACQUISITIONS AND DIVESTMENTS IN 2008
– On
to sell its security appliance business to Check Point Software Technologies.
The disposal related to the renewal of Nokia’s business mobility strategy and
discontinuance of developing and marketing its own behind-the-firewall
business mobility solutions.
– On
of Symbian Limited, the company that develops and licenses Symbian OS, the
market-leading operating system for mobile devices. The acquisition is an
important step by Nokia and industry partners to develop Symbian OS into an
open and unified mobile software platform, which will be licensed
royalty-free and eventually move towards ‘open source’. Nokia and its
partners plan to establish Symbian Foundation, an independent entity, to
manage and unify the platform.
– On
T-Traffic Systems GmbH, a leading provider of traffic services in
The acquisition was completed in
– On
of OZ Communications, the leading consumer mobile messaging solution provider
which delivers access to popular instant messaging and email services on
consumer mobile devices.
– On
Plazes AG, a context-aware social activity service provider, to help Nokia to
accelerate its vision of bringing people and places closer together, in line
with Nokia’s broader services strategy.
– On
provider of comprehensive digital map information. As part of Nokia, NAVTEQ
continues to develop its world-class expertise in the navigation industry,
service its strong customer base, and invest in the further development of
its industry-leading map data and technology platform.
– On
Trolltech ASA, a recognized software provider with world-class software
development platforms and frameworks. Trolltech now operates as Qt Software,
taking its new name from its Qt technology that forms the basis for tens of
thousands of commercial and open source applications.
– On
Identity Systems to Informatica Corporation.
– On
completed the acquisition of Apertio Ltd., a leading provider of open
real-time subscriber data platforms and applications.
– On
the acquisition of Carrier Ethernet specialist Atrica.
PERSONNEL
The average number of employees during 2008 was 120 066. At
2008
31, 2007
SHARES
The total number of Nokia shares at
At
Nokia shares, representing approximately 2.7 % of the total number of Nokia
shares and the total voting rights.
DIVIDEND
Nokia’s Board of Directors will propose a dividend of
for 2008.
1 EUR = 1.392 USD
The complete press release with tables is available at:
http://www.nokia.com/results/Nokia_results2008Q4e.pdf
FORWARD-LOOKING STATEMENTS
It should be noted that certain statements herein which are not
historical facts, including, without limitation, those regarding: A) the
timing of product, services and solution deliveries; B) our ability to
develop, implement and commercialize new products, services, solutions and
technologies; C) expectations regarding market growth, developments and
structural changes; D) expectations regarding our mobile device volume
growth, market share, prices and margins; E) expectations and targets for our
results of operations; F) the outcome of pending and threatened litigation;
G) expectations regarding the successful completion of contemplated
acquisitions on a timely basis and our ability to achieve the set targets
upon the completion of such acquisitions; and H) statements preceded by
“believe,” “expect,” “anticipate,” “foresee,” “target,” “estimate,”
“designed,” “plans,” “will” or similar expressions are forward-looking
statements. These statements are based on management’s best assumptions and
beliefs in light of the information currently available to it. Because they
involve risks and uncertainties, actual results may differ materially from
the results that we currently expect. Factors that could cause these
differences include, but are not limited to: 1) the deteriorating global
economic conditions and the related financial crisis and their impacts on us,
our customers, suppliers, and collaborative partners; 2) competitiveness of
our product, service and solutions portfolio; 3) the extent of the growth of
the mobile communications industry; 4) the growth and profitability of the
new market segments that we target and our ability to successfully develop or
acquire and market products, services and solutions in those segments; 5) our
ability to successfully manage costs; 6) the intensity of competition in the
mobile communications industry and our ability to maintain or improve our
market position or respond successfully to changes in the competitive
landscape; 7) the impact of changes in technology and our ability to develop
or otherwise acquire complex technologies as required by the market, with
full rights needed to use; 8) timely and successful commercialization of
complex technologies as new advanced products, services and solutions; 9) our
ability to protect the complex technologies, which we or others develop or
that we license, from claims that we have infringed third parties’
intellectual property rights, as well as our unrestricted use on commercially
acceptable terms of certain technologies in our products, services and
solution offerings; 10) our ability to protect numerous Nokia and Nokia
Siemens Networks patented, standardized or proprietary technologies from
third-party infringement or actions to invalidate the intellectual property
rights of these technologies; 11) Nokia Siemens Networks’ ability to achieve
the expected benefits and synergies from its formation to the extent and
within the time period anticipated and to successfully integrate its
operations, personnel and supporting activities; 12) whether, as a result of
investigations into alleged violations of law by some current or former
employees of Siemens AG (“Siemens”), government authorities or others take
further actions against Siemens and/or its employees that may involve and
affect the carrier-related assets and employees transferred by Siemens to
Nokia Siemens Networks, or there may be undetected additional violations that
may have occurred prior to the transfer, or ongoing violations that may have
occurred after the transfer, of such assets and employees that could result
in additional actions by government authorities; 13) any impairment of Nokia
Siemens Networks customer relationships resulting from the ongoing government
investigations involving the Siemens carrier-related operations transferred
to Nokia Siemens Networks; 14) occurrence of any actual or even alleged
defects or other quality issues in our products, services and solutions; 15)
our ability to manage efficiently our manufacturing and logistics, as well as
to ensure the quality, safety, security and timely delivery of our products,
services and solutions; 16) inventory management risks resulting from shifts
in market demand; 17) our ability to source sufficient amounts of fully
functional components and sub-assemblies without interruption and at
acceptable prices; 18) any disruption to information technology systems and
networks that our operations rely on; 19) developments under large,
multi-year contracts or in relation to major customers; 20) economic or
political turmoil in emerging market countries where we do business; 21) our
success in collaboration arrangements relating to development of technologies
or new products, services and solutions; 22) the success, financial condition
and performance of our collaboration partners, suppliers and customers; 23)
exchange rate fluctuations, including, in particular, fluctuations between
the euro, which is our reporting currency, and the US dollar, the Chinese
yuan, the UK pound sterling and the Japanese yen, as well as certain other
currencies; 24) the management of our customer financing exposure; 25)
allegations of possible health risks from electromagnetic fields generated by
base stations and mobile devices and lawsuits related to them, regardless of
merit; 26) unfavorable outcome of litigations; 27) our ability to recruit,
retain and develop appropriately skilled employees; 28) the impact of changes
in government policies, laws or regulations; and 29) our ability to
effectively and smoothly implement our new organizational structure; as well
as the risk factors specified on pages 10-25 of Nokia’s annual report on Form
20-F for the year ended
Other unknown or unpredictable factors or underlying assumptions subsequently
proving to be incorrect could cause actual results to differ materially from
those in the forward-looking statements. Nokia does not undertake any
obligation to update publicly or revise forward-looking statements, whether
as a result of new information, future events or otherwise, except to the
extent legally required.
– Nokia plans to report its quarterly results in 2009 on the following
dates: Q1 on
– Nokia plans to publish its annual report, Nokia in 2008, in week 12 of
2009 on its website, http://www.nokia.com.
– The Annual General Meeting will be held on
SOURCE Nokia Corporation