SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Report on Form 6-K dated July 17, 2009

 

(Commission File No. 1-13202)

 

This Report on Form 6-K shall be incorporated by reference in our automatic shelf registration statement on Form F-3, as filed with the Securities and Exchange Commission on March 25, 2008 (File No. 333-149890), to the extent not superseded by documents or reports subsequently filed by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.

 


 

Nokia Corporation

(Name of Registrant)

 

Keilalahdentie 4

P.O. Box 226, FI-00045 Nokia Group, Espoo

Finland

(Address of Principal Executive Offices)

 


 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F: x

 

Form 40-F: o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes: o

 

Nox

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes: o

 

Nox

 

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes: o

 

Nox

 

Enclosure:                 Nokia Q2 2009 interim report excluding non-GAAP financial measures

 

 

 



 

INTERIM REPORT

 

For the purposes of incorporation by reference in Nokia Corporation’s registration statement on Form F-3, filed with the SEC on March 25, 2008, this Nokia Q2 2009 interim report does not contain references to non-GAAP financial measures relating to operating profit, expenses, margins and earnings per share that exclude special and other items and net sales at constant currency, but otherwise contains the same information as the Q2 2009 interim report released by Nokia on July 16, 2009.

 

Nokia Corporation

July 16, 2009

 

Nokia Q2 2009 net sales EUR 9.9 billion, EPS EUR 0.10

Operating margin in Devices & Services up sequentially to 11.6%

 

 

 

Second quarter 2009 results(1), (2)

 

 

 

 

 

 

 

YoY

 

 

 

QoQ

 

EUR million

 

Q2/2009

 

Q2/2008

 

Change

 

Q1/2009

 

Change

 

Net sales

 

9 912

 

13 151

 

-24.6

%

9 274

 

6.9

%

Devices & Services

 

6 586

 

9 090

 

-27.5

%

6 173

 

6.7

%

NAVTEQ

 

147

 

 

 

 

 

132

 

11.4

%

Nokia Siemens Networks

 

3 199

 

4 067

 

-21.3

%

2 990

 

7.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

427

 

1 474

 

-71.0

%

55

 

676.4

%

Devices & Services

 

763

 

1 565

 

-51.2

%

547

 

39.5

%

NAVTEQ

 

-100

 

 

 

 

 

-120

 

-16.7

%

Nokia Siemens Networks

 

-188

 

-47

 

300.0

%

-361

 

-47.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

4.3

%

11.2

%

 

 

0.6

%

 

 

Devices & Services

 

11.6

%

17.2

%

 

 

8.9

%

 

 

NAVTEQ

 

-68.0

%

 

 

 

 

-90.9

%

 

 

Nokia Siemens Networks

 

-5.9

%

-1.2

%

 

 

-12.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPS, EUR Diluted

 

0.10

 

0.29

 

-65.5

%

0.03

 

233.3

%

 


Note 1 relating to NAVTEQ: On July 10, 2008, Nokia completed the 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: Nokia net sales were EUR 19 186 million and earnings per share (diluted) were EUR 0.13 for the period from January 1 to June 30, 2009.

 

SECOND QUARTER 2009 HIGHLIGHTS

 

·                  Nokia net sales of EUR 9.9 billion, down 25% year on year and up 7% sequentially.

·                  Devices & Services net sales of EUR 6.6 billion, down 28% year on year and up 7% sequentially.

·                  Devices & Services gross margin of 34.0%, up from 33.8% in Q1 2009.

·                  Services net sales of EUR 140 million (billings of EUR 207 million). Due to the divestment of the security appliance business in April 2009, services net sales are not directly comparable to prior periods.

·                  Estimated industry mobile device volumes of 268 million units, down 12% year on year and up 5% sequentially.

·                  Nokia mobile device volumes of 103.2 million units, down 15% year on year and up 11% sequentially.

·                  Nokia estimated mobile device market share of 38% in Q2 2009, down from 40% in Q2 2008 and up from 37% in Q1 2009.

·                  Nokia mobile device ASP of EUR 62, down from EUR 65 in Q1 2009.

·                  NAVTEQ net sales of EUR 147 million, up 11% sequentially.

·                  Nokia Siemens Networks net sales of EUR 3.2 billion, down 21% year on year and up 7% sequentially

·                  Nokia operating cash flow of EUR 716 million.

·                  Total cash and other liquid assets of EUR 7.0 billion at the end of Q2 2009.

 

2



 

OLLI-PEKKA KALLASVUO, NOKIA CEO:

 

“Nokia put in a solid performance in what was another tough quarter. We increased our share of the global mobile device market sequentially to an estimated 38% and grew our smartphone market share to an estimated 41%. As a result of strong operational execution, underlying operating margins improved sequentially in all segments. Competition remains intense, but demand in the overall mobile device market appears to be bottoming out. As before, we are continuing to tightly manage our operating expenses.

 

We are balancing short-term priorities with our longer-term growth ambitions as elements of the mobile handset, PC, internet and media industries converge to form a new industry. Consumers will increasingly expect devices and services designed as integrated solutions. To capture this opportunity we are accelerating our strategic transformation into a solutions company.”

 

INDUSTRY AND NOKIA OUTLOOK

 

·                  Nokia expects industry mobile device volumes in the third quarter 2009 to be at approximately the same level or up slightly sequentially.

·                  Nokia expects its mobile device market share in the third quarter 2009 to be approximately at the same level sequentially.

·                  Nokia continues to expect 2009 industry mobile device volumes to decline approximately 10% from 2008 levels.

·                  Nokia now expects its market share in mobile devices to be approximately flat in 2009, compared with 2008. This is an update to Nokia’s earlier target to increase its market share in mobile devices in 2009.

·                  Nokia and Nokia Siemens Networks continue to expect the mobile infrastructure and fixed infrastructure and related services market to decline approximately 10% in Euro terms in 2009, from 2008 levels.

·                  Nokia and Nokia Siemens Networks now expect Nokia Siemens Networks market share to decline moderately in 2009, compared to 2008, with a strong performance in its Services business unit expected to be offset by declines in certain product businesses. This is an update to Nokia and Nokia Siemens Networks earlier target for Nokia Siemens Networks market share to remain constant in 2009, compared to 2008.

 

SECOND QUARTER 2009 FINANCIAL HIGHLIGHTS

 

(Comparisons are given to the second quarter 2008, unless otherwise indicated.)

 

Q2 2009 special items— EUR 348 million (net) consisting of:

 

·                  EUR 22 million of impairment of intangible assets in Devices & Services

·                  EUR 83 million restructuring charge in Devices & Services

·                  EUR 68 million gain on sale of security appliance business in Devices & Services

·                  EUR 69 million restructuring charge and other one-time items in Nokia Siemens Networks

·      EUR 121 million of intangible assets amortization and other purchase price related items arising from the formation of Nokia Siemens Networks

·      EUR 119 million of intangible assets amortization and other purchase price related items arising from the acquisition of NAVTEQ

·      EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications in Devices & Services

 

Q1 2009 special items — EUR 459 million consisting of:

 

·                  EUR 34 million of impairment of intangible assets in Devices & Services

·                  EUR 59 million restructuring charge in Devices & Services

·                  EUR 123 million restructuring charge and other one-time items in Nokia Siemens Networks

·      EUR 116 million of intangible assets amortization and other purchase price related items arising from the formation of Nokia Siemens Networks

·      EUR 125 million of intangible assets amortization and other purchase price related items arising from the acquisition of NAVTEQ

 

3



 

·      EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications in Devices & Services

 

Q2 2008 special items — EUR 580 million consisting of:

 

·                  EUR 259 million of charges related to closure of the Bochum site in Germany in Devices & Services

·                  EUR 201 million restructuring charge and other one-time items in Nokia Siemens Networks

·      EUR 120 million of intangible assets amortization and other purchase price related items arising from the formation of Nokia Siemens Networks

 

Nokia Group

 

Nokia’s second quarter 2009 net sales decreased 25% to EUR 9.9 billion, compared with EUR 13.2 billion in the second quarter 2008.

 

Nokia’s second quarter 2009 operating profit decreased 71% to EUR 427 million, compared with EUR 1.5 billion in the second quarter 2008. Nokia’s second quarter 2009 operating margin was 4.3% (11.2%).

 

Operating cash flow for the second quarter 2009 was EUR 716 million. Operating cash flow for the second quarter 2008 was EUR 1.5 billion. Total cash and other liquid assets were EUR 7.0 billion at June 30, 2009, compared with EUR 8.0 billion at June 30, 2008. At June 30, 2009, Nokia’s net debt-equity ratio (gearing) was -10%, compared with -47% at June 30, 2008.

 

Devices & Services

 

In the second quarter 2009, the total mobile device volumes of our Devices & Services group were 103.2 million units, representing a decline of 15% year on year and an 11% increase sequentially. The overall industry mobile device volumes for the same period were 268 million units based on Nokia’s preliminary estimate, representing a 12% year on year decrease and a 5% sequential increase. The lower device volumes year on year for Nokia and the industry continued to be driven by the negative impact of the deteriorated global economic conditions, including weaker consumer and corporate spending, constrained credit availability and currency market volatility. The sequential industry device volume increase primarily reflected seasonality in the second quarter. Nokia volumes also benefited sequentially from a more stable inventory situation in the operator and distributor channels. Nokia’s mobile device market share was an estimated 38% in the second quarter 2009, down from 40% in the second quarter 2008 and up from 37% in the first quarter 2009.

 

Of the total industry mobile device volumes, converged mobile device industry volumes in the second quarter 2009 increased to 41.0 million units, based on Nokia’s preliminary estimate, compared with an estimated 37.1 million units in the second quarter 2008, and 36.0 million units in the first quarter 2009. Our own converged mobile device volumes were 16.9 million units in the second quarter 2009, compared with 15.3 million units in the second quarter 2008 and 13.7 million units in the first quarter 2009. Nokia’s share of the converged device market was an estimated 41% in the second quarter 2009, unchanged from 41% in the second quarter 2008 and up from 39% in the first quarter 2009. We shipped 4.6 million Nokia Nseries and 4.7 million Nokia Eseries devices during the second quarter 2009, up from the combined 8.2 million Nseries and Eseries devices we shipped in the first quarter 2009.

 

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.

 

4



 

NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA

 

(million units)

 

Q2/2009

 

Q2/2008

 

YoY Change

 

Q1/2009

 

QoQ Change

 

Europe

 

23.3

 

27.1

 

-14.0

%

22.3

 

4.5

%

Middle East & Africa

 

18.9

 

21.1

 

-10.4

%

14.8

 

27.7

%

Greater China

 

18.6

 

17.6

 

5.7

%

17.9

 

3.9

%

Asia-Pacific

 

30.3

 

36.4

 

-16.8

%

28.2

 

7.4

%

North America

 

3.2

 

4.5

 

-28.9

%

3.4

 

-5.9

%

Latin America

 

8.9

 

15.3

 

-41.8

%

6.6

 

34.8

%

Total

 

103.2

 

122.0

 

-15.4

%

93.2

 

10.7

%

 

Based on our preliminary market estimate, Nokia’s mobile device market share for the second quarter 2009 was 38%, compared with 40% in the second quarter 2008 and 37% in the first quarter 2009. Our year on year market share decline was driven primarily by lower market share in Latin America, Asia-Pacific and North America. This was partially offset by a slightly higher market share in Greater China, Europe and Middle East & Africa. Sequentially, our market share declined in North America, but this decline was more than offset by our increased market share in Middle East & Africa, Greater China, Europe, Asia-Pacific and Latin America.

 

Our mobile device average selling price (ASP) in the second quarter 2009 was EUR 62, down from EUR 74 in the second quarter 2008 and EUR 65 in the first quarter 2009. Both the year on year and sequential ASP declines were primarily due to general price pressure and a higher proportion of sales of lower priced products. Our second quarter 2009 ASP benefited from sales of new high-end products, compared to the first quarter 2009.

 

Second quarter 2009 Devices & Services net sales declined 28% to EUR 6.6 billion, compared with EUR 9.1 billion in the second quarter 2008. Devices & Services net sales were down year on year in all geographic areas. The net sales decline resulted primarily from lower volumes, combined with the ASP decline, compared with the second quarter 2008. Of our total Devices & Services net sales, services contributed EUR 140 million in the second quarter 2009, representing 18% year on year growth and a 7% sequential decrease. Nokia completed the divestment of its security appliances business in April 2009 and accordingly services net sales for periods from April 1, 2009 are not directly comparable to services net sales of any prior periods.

 

Devices & Services gross profit decreased 32% to EUR 2.2 billion, compared with EUR 3.3 billion in the second quarter 2008, with a gross margin of 34.0% (36.1%). 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 sales of new high-end, higher margin devices, as well as general price pressure.

 

Devices & Services operating profit decreased 51% to EUR 763 million, compared with EUR 1.6 billion in the second quarter 2008, with an operating margin of 11.6% (17.2%). The year on year decrease in operating profit for the second quarter 2009 was due primarily to lower net sales compared with the second quarter 2008. The impact of lower net sales was somewhat mitigated by a reduction in our cost of sales and operating expenses during the second quarter 2009.

 

NAVTEQ

 

(Comparisons are given to the first quarter 2009)

 

Second quarter 2009 NAVTEQ net sales increased 11% sequentially to EUR 147 million, compared with EUR 132 million in the first quarter 2009, reflecting a slight pick-up in demand for auto navigation systems. NAVTEQ gross profit was EUR 126 million (EUR 116 million), with a gross margin of 85.7% (87.5%). NAVTEQ had an operating loss of EUR 100 million (EUR 120 million loss). The operating margin was -68.0% (-90.9%).

 

Nokia Siemens Networks

 

Second quarter 2009 net sales decreased 21% to EUR 3.2 billion, compared with EUR 4.1 billion in the second quarter 2008, reflecting challenging market conditions and competitive factors.

 

5



 

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

 

Q2/2009

 

Q2/2008

 

YoY
Change

 

Q1/2009

 

QoQ
Change

 

Europe

 

1 209

 

1 412

 

-14.4

%

1 097

 

10.2

%

Middle East & Africa

 

459

 

553

 

-17.0

%

436

 

5.3

%

Greater China

 

353

 

413

 

-14.5

%

284

 

24.3

%

Asia-Pacific

 

648

 

1 076

 

-39.8

%

692

 

-6.4

%

North America

 

208

 

158

 

31.6

%

169

 

23.1

%

Latin America

 

322

 

455

 

-29.2

%

312

 

3.2

%

Total

 

3 199

 

4 067

 

-21.3

%

2 990

 

7.0

%

 

Nokia Siemens Networks gross profit decreased 25% to EUR 860 million, compared with EUR 1.1 billion in the second quarter 2008, with a gross margin of 26.9% (28.2%). The lower year on year gross profit in the second quarter 2009 was due primarily to lower year on year net sales.

 

Nokia Siemens Networks had a second quarter 2009 operating loss of EUR 188 million compared with an operating loss of EUR 47 million in the second quarter 2008, with an operating margin of -5.9% (-1.2%). The year on year decline in Nokia Siemens Networks operating profit primarily reflected lower net sales.

 

Q2 2009 OPERATING HIGHLIGHTS

 

Devices & Services

 

·                  Nokia continued to take action to adjust its business operations and cost base in accordance with market demand as well as seek savings in operational expenses, looking at all areas and activities across Devices & Services and global support functions:

·                  Nokia announced plans to streamline its Services organization, including measures that are targeted to open up greater opportunities for third party partner services. Approximately 450 employees globally are affected by the plans.

·                  Nokia announced plans to improve cost-efficiency in logistics, production management and production support operations, with approximately 170 employees globally affected.

·                  Nokia announced a targeted voluntary resignation package for up to 320 employees at its mobile device manufacturing facility in Salo, Finland. The scheme was fully subscribed.

·                  Nokia commenced shipments of the Nokia N97, its flagship smartphone and the first device to ship with the integrated Ovi Store, a one-stop-shop for applications and content for millions of Nokia device users and another critical element of our evolving Ovi internet services offering. Ovi Store launched in late May and by the end of the quarter it had attracted downloads from people in more than 180 countries.

·                  In the area of music, Nokia benefited from the continued strong performance by the Nokia 5800 XpressMusic, its first mass market touch product, which shipped 3.7 million units during the quarter. More than 6.8 million units have shipped since the device began shipping in late November last year. During the second quarter, Nokia further strengthened its offering of devices optimized for music, announcing the Nokia 5530 XpressMusic, a compact touch-screen device. Nokia also extended its Comes With Music service — an ‘all-you-can-eat’ music offer where users can download freely millions of tracks for a pre-defined period of time and keep those tracks once the period is up — to Brazil, Germany, Italy, Mexico, Sweden and Switzerland. Additionally, Nokia extended Nokia Music Store, with the chain of digital music stores now covering 21 countries in total.

·                  Nokia Messaging, Nokia’s consumer email service, continued to gain traction among operators with six new agreements announced in the second quarter. By the end of the quarter, Nokia Messaging was available to Nokia users in more than 40 countries. Additionally, by the end of the quarter, approximately 600 000 people

 

6



 

had activated an Ovi Mail account. Ovi Mail is an email solution developed especially for consumers in emerging markets.

·                  Nokia started shipments of the Nokia E75, its flagship email device, and the Nokia N86 8MP, its flagship imaging device. Nokia also announced the Nokia E72, its latest full QWERTY smartphone and the successor to the highly popular Nokia E71. Cumulative shipments of the Nokia E71 reached 5 million during the quarter.

·                  Nokia made Nokia Life Tools commercially available across India. Nokia Life Tools is an innovative offering of agriculture information, education and entertainment services targeted at non-urban consumers in emerging markets. Nokia Life Tools is available on the new Nokia 2330 classic and the Nokia 2323 classic, and will also be made available on other enabled devices.

·                  Nokia announced the Nokia 6216 classic, its first SIM-based Near Field Communication (NFC) device which enables operators to build NFC services on to the SIM card.

·                  Nokia commenced shipments of its first 3G mobile device in Korea. The 6210s is a competitively priced smartphone with a slide form factor and is available through local operator KTF.

·                  Nokia expanded its network of research laboratories with the opening of Nokia Research Center, Berkeley, in California in the United States.

·                  Nokia and Intel Corporation announced that they will work together to develop a new class of Intel® Architecture-based mobile computing device and chipset architectures that will combine the performance of powerful computers with high-bandwidth mobile broadband communications and ubiquitous Internet connectivity. The two companies share a vision of a new class of standards-based mobile computing platforms that provide an always-on, always-connected experience and offer the performance to deliver PC-like Internet experiences across a new class of services.

 

NAVTEQ

 

·                  NAVTEQ announced the availability of dynamic content delivery for HD Radio™ systems in North America, accelerating the delivery of content including traffic, weather and fuel prices.

·                  NAVTEQ launched NAVTEQ LocationPoint™, a location-based advertising service for mobile devices, in several European countries.

·                  NAVTEQ announced the availability of Motorway Junction Objects, which enables navigation systems to display full 3D animation of complex junctions, in Australia with expansion planned to include the United States and Europe.

·                  NAVTEQ announced a contract extension with MSN® Direct for NAVTEQ Traffic™, supporting Microsoft’s Live Search Maps web-based service and as part of the MSN Direct connected services bundle.

·                  NAVTEQ announced that it has signed an agreement with Samsung Electronics providing access to all countries in the NAVTEQ database as well as NAVTEQ’s Visual Content, Speed Limits, Extended Lanes and NAVTEQ Discover Cities™.

 

Nokia Siemens Networks

 

·                  In June, Nokia Siemens Networks reached an agreement to acquire CDMA and LTE assets from Nortel in a USD 650 million transaction that remains subject to the approvals of the relevant bankruptcy courts in North America as well as customary closing conditions.

·                  Nokia Siemens Networks strengthened its capital structure with the completion of a EUR 2 billion syndicated loan agreement with a group of 21 international banks, in a transaction that was over-subscribed. Nokia Siemens Networks also concluded an agreement with the European Investment Bank for a EUR 250 million loan for the development of its multimode Radio Access network technology.

·                  Nokia Siemens Networks was awarded a EUR 1.1 billion, five-year managed services deal by Oi, a major Brazilian operator and one of the largest in Latin America. By the terms of the contract Nokia Siemens Networks will be the sole provider of operations and maintenance for all of Oi’s Internal Plant Operations across 17 Brazilian states.

·                  Momentum in the services business continued with key services-led customer wins with Telenor in Pakistan, DIGI Telecommunications in Malaysia and a turnkey security solution for MTS in Russia that will ensure safe internet browsing on GSM and 3G networks.

 

7



 

·                  Nokia Siemens Networks continued to facilitate its customers’ development of mobile broadband internet with significant wins including a network modernization deal with M1 in Singapore, the development of an HSPA+ capable network for Elisa in Finland, the roll-out of Ireland’s National Broadband Scheme using Wireless Broadband with 3 and a successful trial of HSPA+ in a live 3G network with Zain Saudi Arabia.

·                  Time Warner Cable selected Nokia Siemens Networks to supply and build a fully integrated, 3GPP and PacketCable 2.0 compliant IMS (IP Multimedia Subsystem) network, which will be the basis for providing next generation consumer applications that will combine existing voice, video and data services.

 

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 SECOND QUARTER 2009

 

(Comparisons are given to the second quarter 2008 results, unless otherwise indicated.)

 

On July 10, 2008, Nokia completed the 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.

 

Nokia’s net sales decreased 25% to EUR 9 912 million (EUR 13 151 million). Net sales of Devices & Services decreased 28% to EUR 6 586 million (EUR 9 090 million). Net sales of NAVTEQ were EUR 147 million. Net sales of Nokia Siemens Networks decreased 21% to EUR 3 199 million (EUR 4 067 million).

 

Operating profit decreased 71% to EUR 427 million (EUR 1 474 million), representing an operating margin of 4.3% (11.2%). Operating profit in Devices & Services decreased 51% to EUR 763 million (EUR 1 565 million), representing an operating margin of 11.6% (17.2%). Operating loss in NAVTEQ was EUR 100 million, representing an operating margin of -68.0%. Operating loss in Nokia Siemens Networks was EUR 188 million (loss of EUR 47 million), representing an operating margin of -5.9% (-1.2%). Corporate Common Functions expense totaled EUR 48 million (EUR 44 million).

 

In the second quarter 2009, net financial expense was EUR 61 million (net financial income EUR 3 million). Profit before tax was EUR 380 million (EUR 1 477 million). Profit was EUR 287 million (EUR 1 083 million), based on a profit of EUR 380 million (EUR 1 103 million) attributable to equity holders of the parent and a negative EUR 93 million (negative EUR 20 million) attributable to minority interests. Earnings per share decreased to EUR 0.10 (basic) and EUR 0.10 (diluted), compared with EUR 0.29 (basic) and EUR 0.29 (diluted) in the second quarter of 2008.

 

NOKIA IN JANUARY - JUNE 2009

 

(Comparisons are given to the January-June 2008 results, unless otherwise indicated.)

 

On July 10, 2008, Nokia completed the 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.

 

Nokia’s net sales decreased 26% to EUR 19 186 million (EUR 25 811 million). Net sales of Devices & Services decreased 30% to EUR 12 759 million (EUR 18 353 million). Net sales of NAVTEQ were EUR 279 million. Net sales of Nokia Siemens Networks decreased 17% to EUR 6 189 million (EUR 7 468 million).

 

Operating profit decreased 84% to EUR 482 million (EUR 3 005 million), representing an operating margin of 2.5% (11.6%). Operating profit in Devices & Services decreased 62% to EUR 1 310 million (EUR 3 448 million), representing an operating margin of 10.3% (18.8%). Operating loss in NAVTEQ was EUR 220 million, representing an operating margin of -78.9%. Operating loss in Nokia Siemens Networks was EUR 549 million (loss of EUR 121 million), representing an operating margin of -8.9% (-1.6%). Corporate Common Functions expense totaled EUR 59 million (EUR 322 million).

 

8



 

In the period from January to June 2009, net financial expense was EUR 138 million (net financial income EUR 71 million). Profit before tax was EUR 368 million (EUR 3 084 million). Profit was EUR 291 million (EUR 2 283 million), based on a profit of EUR 502 million (EUR 2 325 million) attributable to equity holders of the parent and a negative EUR 211 million (negative EUR 42 million) attributable to minority interests. Earnings per share decreased to EUR 0.14 (basic) and EUR 0.13 (diluted), compared with EUR 0.61 (basic) and EUR 0.61 (diluted) in January-June 2008.

 

PERSONNEL

 

The average number of employees during January-June 2009 was 123 274, of which the average number of employees at Nokia Siemens Networks was 60 686. At June 30, 2009, Nokia employed a total of 120 827 people (117 212 at June 30, 2008), of which 60 983 were employed by Nokia Siemens Networks (60 039 people at June 30, 2008).

 

SHARES

 

The total number of Nokia shares at June 30, 2009 was 3 744 948 552. At June 30, 2009, Nokia and its subsidiary companies owned 37 520 159 Nokia shares, representing approximately 1.0% of the total number of Nokia shares and the total voting rights.

 

9



 

CONSOLIDATED INCOME STATEMENT, EUR million

(unaudited)

 

 

 

4-6/2009

 

4-6/2008

 

 

 

 

 

 

 

Net sales

 

9 912

 

13 151

 

Cost of sales

 

-6 685

 

-8 727

 

 

 

 

 

 

 

Gross profit

 

3 227

 

4 424

 

Research and development expenses

 

-1 458

 

-1 396

 

Selling and marketing expenses

 

-1 003

 

-990

 

Administrative and general expenses

 

-304

 

-338

 

Other income

 

143

 

119

 

Other expenses

 

-178

 

-345

 

 

 

 

 

 

 

Operating profit

 

427

 

1 474

 

Share of results of associated companies

 

14

 

 

Financial income and expenses

 

-61

 

3

 

 

 

 

 

 

 

Profit before tax

 

380

 

1 477

 

Tax

 

-93

 

-394

 

 

 

 

 

 

 

Profit

 

287

 

1 083

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

380

 

1 103

 

Profit attributable to minority interests

 

-93

 

-20

 

 

 

287

 

1 083

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

(for profit attributable to the equity holders of the parent)

 

 

 

 

 

Basic

 

0.10

 

0.29

 

Diluted

 

0.10

 

0.29

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

Basic

 

3 704 819

 

3 755 241

 

Diluted

 

3 711 297

 

3 788 068

 

 

 

 

 

 

 

Depreciation and amortization, total

 

443

 

334

 

 

 

 

 

 

 

Share-based compensation expense, total

 

9

 

39

 

 

10



 

CONSOLIDATED INCOME STATEMENT, EUR million

(unaudited)

 

 

 

1-6/2009

 

1-6/2008

 

 

 

 

 

 

 

Net sales

 

19 186

 

25 811

 

Cost of sales

 

-13 056

 

-16 860

 

 

 

 

 

 

 

Gross profit

 

6 130

 

8 951

 

Research and development expenses

 

-2 958

 

-2 771

 

Selling and marketing expenses

 

-1 965

 

-2 025

 

Administrative and general expenses

 

-584

 

-646

 

Other income

 

199

 

164

 

Other expenses

 

-340

 

-668

 

 

 

 

 

 

 

Operating profit

 

482

 

3 005

 

Share of results of associated companies

 

24

 

8

 

Financial income and expenses

 

-138

 

71

 

 

 

 

 

 

 

Profit before tax

 

368

 

3 084

 

Tax

 

-77

 

-801

 

 

 

 

 

 

 

Profit

 

291

 

2 283

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

502

 

2 325

 

Profit attributable to minority interests

 

-211

 

-42

 

 

 

291

 

2 283

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

(for profit attributable to the equity holders of the parent)

 

 

 

 

 

Basic

 

0.14

 

0.61

 

Diluted

 

0.13

 

0.61

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

Basic

 

3 702 362

 

3 789 252

 

Diluted

 

3 718 775

 

3 829 144

 

 

 

 

 

 

 

Depreciation and amortization, total

 

905

 

681

 

 

 

 

 

 

 

Share-based compensation expense, total

 

-16

 

97

 

 

11



 

NOKIA NET SALES BY GEOGRAPHIC AREA, EUR million

(unaudited)

 

 

 

4-6/2009

 

Y-o-Y
change,
%

 

4-6/2008

 

1-12/2008

 

 

 

 

 

 

 

 

 

 

 

Europe

 

3 418

 

-27

 

4 657

 

18 842

 

Middle-East & Africa

 

1 503

 

-22

 

1 935

 

7 265

 

Greater China

 

1 491

 

-6

 

1 583

 

6 420

 

Asia-Pacific

 

2 220

 

-29

 

3 148

 

11 344

 

North America

 

534

 

6

 

503

 

2 068

 

Latin America

 

746

 

-44

 

1 325

 

4 771

 

 

 

 

 

 

 

 

 

 

 

Total

 

9 912

 

-25

 

13 151

 

50 710

 

 

NOKIA PERSONNEL BY GEOGRAPHIC AREA

 

 

 

30.06.09

 

Y-o-Y
change,
%

 

30.06.08

 

31.12.08

 

 

 

 

 

 

 

 

 

 

 

Europe

 

59 996

 

-1

 

60 345

 

61 971

 

Middle-East & Africa

 

4 164

 

-18

 

5 093

 

5 160

 

Greater China

 

14 596

 

5

 

13 946

 

14 879

 

Asia-Pacific

 

22 236

 

11

 

20 041

 

21 832

 

North America

 

8 074

 

36

 

5 916

 

8 862

 

Latin America

 

11 761

 

-1

 

11 871

 

13 125

 

 

 

 

 

 

 

 

 

 

 

Total

 

120 827

 

3

 

117 212

 

125 829

 

 

12



 

DEVICES & SERVICES, EUR million

(unaudited)

 

 

 

4-6/2009

 

4-6/2008

 

 

 

 

 

 

 

Net sales

 

6 586

 

9 090

 

Cost of sales

 

-4 345

 

-5 812

 

 

 

 

 

 

 

Gross profit

 

2 241

 

3 278

 

% of net sales

 

34.0

 

36.1

 

 

 

 

 

 

 

Research and development expenses (1)

 

-733

 

-741

 

% of net sales

 

11.1

 

8.2

 

 

 

 

 

 

 

Selling and marketing expenses

 

-599

 

-630

 

% of net sales

 

9.1

 

6.9

 

 

 

 

 

 

 

Administrative and general expenses

 

-106

 

-115

 

% of net sales

 

1.6

 

1.3

 

 

 

 

 

 

 

Other income and expenses (2)

 

-40

 

-227

 

 

 

 

 

 

 

Operating profit

 

763

 

1 565

 

% of net sales

 

11.6

 

17.2

 

 


(1) Include amortization of acquired intangible assets of EUR 2 million in Q2/09

 

(2) Include restructuring charges of EUR 83 million, impairment of assets EUR 22 million and gain on sale of security appliance business of EUR 68 million in Q2/09. Include restructuring charges of EUR 259 million related to closure of the Bochum site in Germany in Q2/08.

 

13



 

NAVTEQ, EUR million

(unaudited)

 

 

 

4-6/2009

 

 

 

 

 

Net sales (1)

 

147

 

Cost of sales

 

-21

 

 

 

 

 

Gross profit

 

126

 

% of net sales

 

85.7

 

 

 

 

 

Research and development expenses (2)

 

-158

 

% of net sales

 

107.5

 

 

 

 

 

Selling and marketing expenses (3)

 

-55

 

% of net sales

 

37.4

 

 

 

 

 

Administrative and general expenses

 

-15

 

% of net sales

 

10.2

 

 

 

 

 

Other income and expenses

 

2

 

 

 

 

 

Operating profit

 

-100

 

% of net sales

 

-68.0

 

 


(1) Include deferred revenue related to acquisitions of EUR 1 million in Q2/09.

 

(2) Include amortization of acquired intangibles of EUR 88 million in Q2/09.

 

(3) Include amortization of acquired intangibles of EUR 30 million in Q2/09.

 

14



 

NOKIA SIEMENS NETWORKS, EUR million

(unaudited)

 

 

 

4-6/2009

 

4-6/2008

 

 

 

 

 

 

 

Net sales (1)

 

3 199

 

4 067

 

Cost of sales (2)

 

-2 339

 

-2 921

 

 

 

 

 

 

 

Gross profit

 

860

 

1 146

 

% of net sales

 

26.9

 

28.2

 

 

 

 

 

 

 

Research and development expenses (3)

 

-566

 

-653

 

% of net sales

 

17.7

 

16.1

 

 

 

 

 

 

 

Selling and marketing expenses (4)

 

-349

 

-359

 

% of net sales

 

10.9

 

8.8

 

 

 

 

 

 

 

Administrative and general expenses (5)

 

-149

 

-188

 

% of net sales

 

4.7

 

4.6

 

 

 

 

 

 

 

Other income and expenses (6)

 

16

 

7

 

 

 

 

 

 

 

Operating profit

 

-188

 

-47

 

% of net sales

 

-5.9

 

-1.2

 

 


(1) Include deferred revenue related to acquisitions of EUR 4 million in Q2/08.

 

(2) Include restructuring charges of EUR 37 million in Q2/09 and of EUR 132 million in Q2/08.

 

(3) Include reversal of restructuring charges of EUR 3 million and amortization of acquired intangibles of EUR 45 million in Q2/09. Include amortization of acquired intangibles of EUR 45 million in Q2/08.

 

(4) Include restructuring charges of EUR 4 million and amortization of acquired intangibles of EUR 71 million in Q2/09. Include amortization of acquired intangibles of EUR 71 million in Q2/08.

 

(5) Include restructuring charges of EUR 41 million in Q2/09 and EUR 45 million in Q2/08.

 

(6) Include reversal of restructuring charges of EUR 10 million and include amortization of acquired intangibles of EUR 5 million in Q2/09. Include restructuring charges of EUR 24 million in Q2/08.

 

15



 

GROUP COMMON FUNCTIONS, EUR million

(unaudited)

 

 

 

4-6/2009

 

4-6/2008

 

 

 

 

 

 

 

Net sales

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

Research and development expenses

 

-1

 

-2

 

 

 

 

 

 

 

Selling and marketing expenses

 

 

-1

 

 

 

 

 

 

 

Administrative and general expenses

 

-34

 

-35

 

 

 

 

 

 

 

Other income and expenses

 

-13

 

-6

 

 

 

 

 

 

 

Operating profit

 

-48

 

-44

 

 

16



 

CONSOLIDATED INCOME STATEMENT, EUR million

(unaudited)

 

NOKIA GROUP

 

 

 

4-6/2009

 

4-6/2008

 

 

 

 

 

 

 

Net sales (1)

 

9 912

 

13 151

 

Cost of sales (2)

 

-6 685

 

-8 727

 

 

 

 

 

 

 

Gross profit

 

3 227

 

4 424

 

% of net sales

 

32.6

 

33.6

 

 

 

 

 

 

 

Research and development expenses (3)

 

-1 458

 

-1 396

 

% of net sales

 

14.7

 

10.6

 

 

 

 

 

 

 

Selling and marketing expenses (4)

 

-1 003

 

-990

 

% of net sales

 

10.1

 

7.5

 

 

 

 

 

 

 

Administrative and general expenses (5)

 

-304

 

-338

 

% of net sales

 

3.1

 

2.6

 

 

 

 

 

 

 

Other income and expenses (6)

 

-35

 

-226

 

 

 

 

 

 

 

Operating profit

 

427

 

1 474

 

% of net sales

 

4.3

 

11.2

 

 

 

 

 

 

 

Share of results of associated companies

 

14

 

 

Financial income and expenses

 

-61

 

3

 

 

 

 

 

 

 

Profit before tax

 

380

 

1 477

 

Tax

 

-93

 

-394

 

 

 

 

 

 

 

Profit

 

287

 

1 083

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

380

 

1 103

 

Profit attributable to minority interests

 

-93

 

-20

 

 

 

287

 

1 083

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

(for profit attributable to the equity holders of the parent)

 

 

 

 

 

Basic

 

0.10

 

0.29

 

Diluted

 

0.10

 

0.29

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

Basic

 

3 704 819

 

3 755 241

 

Diluted

 

3 711 297

 

3 788 068

 

 

 

 

 

 

 

Depreciation and amortization, total

 

443

 

334

 

 

 

 

 

 

 

Share-based compensation expense, total

 

9

 

39

 

 


(1) Include deferred revenue related to acquisitions of EUR 1 million Q2/09 and EUR 4 million in Q2/08.

(2) Include restructuring charges of EUR 37 million in Q2/09 and EUR 132 million in Q2/08.

(3) Include amortization of acquired intangible assets of EUR 135 million and reversal of restructuring charges of EUR 3 million

in Q2/09. Include amortization of acquired intangible assets of EUR 45 million in Q2/08.

(4) Include restructuring charges of EUR 4 million and include amortization of acquired intangible assets of EUR 101 million in Q2/09.

Include amortization of acquired intangible assets of EUR 71 million in Q2/08.

(5) Include restructuring charges of EUR 41 million in Q2/09 and EUR 45 million in Q2/08.

(6) Include restructuring charges of EUR 73 million, amortization of acquired intangible assets of EUR 5 million and impairment

of intangible assets of EUR 22 million and include gain on sale of security business of EUR 68 million in Q2/09. Include restructuring

charges of EUR 283 million in Q2/08.

 

17



 

CONSOLIDATED INCOME STATEMENT, IFRS, EUR million

(unaudited)

 

 

 

4-6/2009

 

4-6/2008

 

1-6/2009

 

1-6/2008

 

1-12/2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

9 912

 

13 151

 

19 186

 

25 811

 

50 710

 

Cost of sales

 

-6 685

 

-8 727

 

-13 056

 

-16 860

 

-33 337

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

3 227

 

4 424

 

6 130

 

8 951

 

17 373

 

Research and development expenses

 

-1 458

 

-1 396

 

-2 958

 

-2 771

 

-5 968

 

Selling and marketing expenses

 

-1 003

 

-990

 

-1 965

 

-2 025

 

-4 380

 

Administrative and general expenses

 

-304

 

-338

 

-584

 

-646

 

-1 284

 

Other income

 

143

 

119

 

199

 

164

 

420

 

Other expenses

 

-178

 

-345

 

-340

 

-668

 

-1 195

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

427

 

1 474

 

482

 

3 005

 

4 966

 

Share of results of associated companies

 

14

 

 

24

 

8

 

6

 

Financial income and expenses

 

-61

 

3

 

-138

 

71

 

-2

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

 

380

 

1 477

 

368

 

3 084

 

4 970

 

Tax

 

-93

 

-394

 

-77

 

-801

 

-1 081

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit

 

287

 

1 083

 

291

 

2 283

 

3 889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

380

 

1 103

 

502

 

2 325

 

3 988

 

Profit attributable to minority interests

 

-93

 

-20

 

-211

 

-42

 

-99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

287

 

1 083

 

291

 

2 283

 

3 889

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

 

 

 

 

 

 

(for profit attributable to the equity holders of the parent)

 

 

 

 

 

 

 

 

 

 

 

Basic

 

0.10

 

0.29

 

0.14

 

0.61

 

1.07

 

Diluted

 

0.10

 

0.29

 

0.13

 

0.61

 

1.05

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

 

 

 

 

 

 

Basic

 

3 704 819

 

3 755 241

 

3 702 362

 

3 789 252

 

3 743 622

 

Diluted

 

3 711 297

 

3 788 068

 

3 718 775

 

3 829 144

 

3 780 363

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, total

 

443

 

334

 

905

 

681

 

1 617

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense, total

 

9

 

39

 

-16

 

97

 

67

 

 

18



 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, IFRS, EUR million

(unaudited)

 

 

 

4-6/2009

 

4-6/2008

 

1-6/2009

 

1-6/2008

 

1-12/2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit

 

287

 

1 083

 

291

 

2 283

 

3 889

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

Tax benefit on stock options exercised

 

 

 

 

 

4

 

Excess tax benefit on share-based compensation

 

-1

 

-70

 

-14

 

-100

 

-128

 

Translation differences

 

-549

 

82

 

-161

 

-49

 

595

 

Net investment hedge gains

 

61

 

-11

 

34

 

26

 

-123

 

Cash flow hedges

 

96

 

-277

 

-288

 

-305

 

-40

 

Available-for-sale investments

 

-5

 

2

 

-11

 

18

 

-15

 

Other increase/decrease, net

 

2

 

3

 

-12

 

-33

 

28

 

Income tax related to components of other comprehensive income

 

-42

 

69

 

60

 

71

 

58

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income, net of tax

 

-438

 

-202

 

-392

 

-372

 

379

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

-151

 

881

 

-101

 

1 911

 

4 268

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

equity holders of the parent

 

-91

 

942

 

99

 

1 955

 

4 459

 

minority interests

 

-60

 

-61

 

-200

 

-44

 

-191

 

 

 

-151

 

881

 

-101

 

1 911

 

4 268

 

 

19



 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION, IFRS, EUR million (unaudited)

 

 

 

30.06.2009

 

30.06.2008

 

31.12.2008

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Capitalized development costs

 

204

 

342

 

244

 

Goodwill

 

6 290

 

1 512

 

6 257

 

Other intangible assets

 

3 348

 

2 220

 

3 913

 

Property, plant and equipment

 

2 011

 

1 862

 

2 090

 

Investments in associated companies

 

69

 

327

 

96

 

Available-for-sale investments

 

510

 

408

 

512

 

Deferred tax assets

 

2 129

 

1 671

 

1 963

 

Long-term loans receivable

 

37

 

16

 

27

 

Other non-current assets

 

8

 

24

 

10

 

 

 

14 606

 

8 382

 

15 112

 

Current assets

 

 

 

 

 

 

 

Inventories

 

1 973

 

2 763

 

2 533

 

Accounts receivable

 

8 725

 

11 084

 

9 444

 

Prepaid expenses and accrued income

 

4 571

 

3 277

 

4 538

 

Current portion of long-term loans receivable

 

13

 

125

 

101

 

Other financial assets

 

393

 

168

 

1 034

 

Investments at fair value through profit and loss, liquid assets

 

689

 

 

 

Available-for-sale investments, liquid assets

 

1 205

 

2 771

 

1 272

 

Available-for-sale investments, cash equivalents

 

3 434

 

3 436

 

3 842

 

Bank and cash

 

1 666

 

1 774

 

1 706

 

 

 

22 669

 

25 398

 

24 470

 

Total assets

 

37 275

 

33 780

 

39 582

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY AND LIABILITIES

 

 

 

 

 

 

 

Capital and reserves attributable to equity holders of the parent

 

 

 

 

 

 

 

Share capital

 

246

 

246

 

246

 

Share issue premium

 

299

 

498

 

442

 

Treasury shares

 

-697

 

-1 670

 

-1 881

 

Translation differences

 

216

 

-205

 

341

 

Fair value and other reserves

 

-198

 

-192

 

62

 

Reserve for invested non-restricted equity

 

3 178

 

3 314

 

3 306

 

Retained earnings

 

9 739

 

9 954

 

11 692

 

 

 

12 783

 

11 945

 

14 208

 

Minority interests

 

2 085

 

2 504

 

2 302

 

Total equity

 

14 868

 

14 449

 

16 510

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Long-term interest-bearing liabilities

 

4 079

 

169

 

861

 

Deferred tax liabilities

 

1 510

 

1 019

 

1 787

 

Other long-term liabilities

 

67

 

115

 

69

 

 

 

5 656

 

1 303

 

2 717

 

Current liabilities

 

 

 

 

 

 

 

Current portion of long-term loans

 

53

 

123

 

13

 

Short-term borrowing

 

1 393

 

905

 

3 578

 

Other financial liabilities

 

152

 

161

 

924

 

Accounts payable

 

5 276

 

5 914

 

5 225

 

Accrued expenses

 

6 580

 

6 791

 

7 023

 

Provisions

 

3 297

 

4 134

 

3 592

 

 

 

16 751

 

18 028

 

20 355

 

Total shareholders’ equity and liabilities

 

37 275

 

33 780

 

39 582

 

Interest-bearing liabilities

 

5 525

 

1 197

 

4 452

 

Shareholders’ equity per share, EUR

 

3.45

 

3.22

 

3.84

 

Number of shares (1 000 shares) (1)

 

3 707 428

 

3 710 160

 

3 697 872

 

 


(1) Shares owned by Group companies are excluded.

 

20



 

CONSOLIDATED STATEMENT OF CASH FLOWS, IFRS, EUR million

(unaudited)

 

 

 

1-6/2009

 

1-6/2008

 

1-12/2008

 

Cash flow from operating activities

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

502

 

2 325

 

3 988

 

Adjustments, total

 

977

 

2 062

 

3 469

 

Change in net working capital

 

602

 

-1 321

 

-2 546

 

Cash generated from operations

 

2 081

 

3 066

 

4 911

 

Interest received

 

76

 

242

 

416

 

Interest paid

 

-75

 

-48

 

-155

 

Other financial income and expenses, net

 

-533

 

173

 

-195

 

Income taxes paid

 

-557

 

-1 221

 

-1 780

 

Net cash from operating activities

 

992

 

2 212

 

3 197

 

 

 

 

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

 

 

 

Acquisition of Group companies, net of acquired cash

 

-19

 

-311

 

-5 962

 

Purchase of current available-for-sale investments, liquid assets

 

-362

 

-521

 

-669

 

Purchase of investments at fair value through profit and loss, liquid assets

 

-695

 

 

 

Purchase of non-current available-for-sale investments

 

-50

 

-71

 

-121

 

Purchase of shares in associated companies

 

-28

 

 

-24

 

Additions to capitalized development costs

 

-25

 

-45

 

-131

 

Long-term loans made to customers

 

 

-23

 

 

Proceeds from repayment and sale of long-term loans receivable

 

 

56

 

129

 

Proceeds from (+) / payment of (-) other long-term loans receivable

 

 

-1

 

-1

 

Proceeds from (+) / payment of (-) short-term loans receivable

 

2

 

-371

 

-15

 

Capital expenditures

 

-281

 

-403

 

-889

 

Proceeds from disposal of shares in associated companies

 

15

 

2

 

3

 

Proceeds from disposal of businesses

 

62

 

50

 

41

 

Proceeds from maturities and sale of current available-for-sale investments, liquid assets

 

421

 

2 583

 

4 664

 

Proceeds from sale of non-current available-for-sale investments

 

1

 

9

 

10

 

Proceeds form sale of fixed assets

 

20

 

49

 

54

 

Dividends received

 

1

 

 

6

 

Net cash used in / from investing activities

 

-938

 

1 003

 

-2 905

 

 

 

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

5

 

53

 

Purchase of treasury shares

 

 

-2 753

 

-3 121

 

Proceeds from long-term borrowings

 

3 396

 

13

 

714

 

Repayment of long-term borrowings

 

-25

 

-69

 

-34

 

Proceeds from (+) / payment of (-) short-term borrowings

 

-2 374

 

-30

 

2 891

 

Dividends paid

 

-1 519

 

-1 999

 

-2 048

 

Net cash from / used in financing activities

 

-522

 

-4 833

 

-1 545

 

 

 

 

 

 

 

 

 

Foreign exchange adjustment

 

20

 

-22

 

-49

 

Net increase (+) / decrease (-) in cash and cash equivalents

 

-448

 

-1 640

 

-1 302

 

Cash and cash equivalents at beginning of period

 

5 548

 

6 850

 

6 850

 

Cash and cash equivalents at end of period

 

5 100

 

5 210

 

5 548

 

 

NB: The figures in the consolidated cash flow statement cannot be directly traced from the balance sheet without additional information as a result of acquisitions and disposals of subsidiaries and net foreign exchange differences arising on consolidation.

 

21



 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, IFRS, EUR million

(unaudited)

 

 

 

Share
capital

 

Share
issue
premium

 

Treasury
shares

 

Translation
difference

 

Fair
value
and
other
reserves

 

Reserve
for
invested
non-
restricted
equity

 

Retained
earnings

 

Before
minority

 

Minority
interest

 

Total
equity

 

Balance at December 31, 2007

 

246

 

644

 

-3 146

 

-163

 

23

 

3 299

 

13 870

 

14 773

 

2 565

 

17 338

 

Total comprehensive income

 

 

-96

 

 

-42

 

-215

 

 

2 308

 

1 955

 

-44

 

1 911

 

Share-based compensation

 

 

 

99

 

 

 

 

 

 

 

 

 

 

 

99

 

 

 

99

 

Settlement of performance shares

 

 

 

-149

 

116

 

 

 

 

 

15

 

 

 

-18

 

 

 

-18

 

Acquisition of treasury shares

 

 

 

 

 

-2 873

 

 

 

 

 

 

 

 

 

-2 873

 

 

 

-2 873

 

Reissuance of treasury shares

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Cancellation of treasury shares

 

 

 

 

 

4 232

 

 

 

 

 

 

 

-4 232

 

 

 

 

 

Dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

-1 992

 

-1 992

 

-7

 

-1 999

 

Acquisitions and other changes in minority interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-10

 

-10

 

Balance at June 30, 2008

 

246

 

498

 

-1 670

 

-205

 

-192

 

3 314

 

9 954

 

11 945

 

2 504

 

14 449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2008

 

246

 

442

 

-1 881

 

341

 

62

 

3 306

 

11 692

 

14 208

 

2 302

 

16 510

 

Total comprehensive income

 

 

-13

 

 

-125

 

-260

 

 

497

 

99

 

-200

 

-101

 

Share-based compensation

 

 

 

-14

 

 

 

 

 

 

 

 

 

 

 

-14

 

 

 

-14

 

Settlement of performance shares

 

 

 

-116

 

215

 

 

 

 

 

-128

 

 

 

-29

 

 

 

-29

 

Cancellation of treasury shares

 

 

 

 

 

969

 

 

 

 

 

 

 

-969

 

 

 

 

 

Dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

-1 481

 

-1 481

 

-17

 

-1 498

 

Balance at June  30, 2009

 

246

 

299

 

-697

 

216

 

-198

 

3 178

 

9 739

 

12 783

 

2 085

 

14 868

 

 

22



 

COMMITMENTS AND CONTINGENCIES, EUR million

(unaudited)

 

 

 

GROUP

 

 

 

30.06.2009

 

30.06.2008

 

31.12.2008

 

 

 

 

 

 

 

 

 

Collateral for own commitments

 

 

 

 

 

 

 

Property under mortgages

 

18

 

18

 

18

 

Assets pledged

 

10

 

30

 

11

 

 

 

 

 

 

 

 

 

Contingent liabilities on behalf of Group companies

 

 

 

 

 

 

 

Guarantees for loans

 

 

 

 

Other guarantees

 

2 651

 

2 653

 

2 896

 

 

 

 

 

 

 

 

 

Contingent liabilities on behalf of associated companies

 

 

 

 

 

 

 

Other guarantees

 

1

 

 

 

 

 

 

 

 

 

 

 

Contingent liabilities on behalf of other companies

 

 

 

 

 

 

 

Financial guarantees on behalf of third parties

 

1

 

147

 

2

 

Other guarantees

 

4

 

4

 

1

 

 

 

 

 

 

 

 

 

Leasing obligations

 

1 259

 

1 217

 

1 156

 

 

 

 

 

 

 

 

 

Financing commitments

 

 

 

 

 

 

 

Customer finance commitments

 

37

 

464

 

197

 

Venture fund commitments

 

355

 

335

 

467

 

 

1 EUR = 1.392 USD

 

23



 

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) our ability to develop and grow our consumer Internet services business; D) expectations regarding market developments and structural changes; E) expectations regarding our mobile device volumes, market share, prices and margins; F) expectations and targets for our results of operations; G) the outcome of pending and threatened litigation; H) 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 I) 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 related financial crisis and their impact on us, our customers and end-users of our products, services and solutions, our suppliers and collaborative partners; 2) the development of the mobile and fixed communications industry, as well as 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; 3) the intensity of competition in the mobile and fixed communications industry and our ability to maintain or improve our market position or respond successfully to changes in the competitive landscape; 4) competitiveness of our product, services and solutions portfolio; 5) our ability to successfully manage costs; 6) exchange rate fluctuations, including, in particular, fluctuations between the euro, which is our reporting currency, and the US dollar, the Japanese yen, the Chinese yuan and the UK pound sterling, as well as certain other currencies; 7) the success, financial condition and performance of our suppliers, collaboration partners and customers; 8) our ability to source sufficient amounts of fully functional components, sub-assemblies, software and content without interruption and at acceptable prices; 9) the impact of changes in technology and our ability to develop or otherwise acquire and timely and successfully commercialize complex technologies as required by the market; 10) the occurrence of any actual or even alleged defects or other quality, safety or security issues in our products, services and solutions; 11) the impact of changes in government policies, trade policies, laws or regulations or political turmoil in countries where we do business; 12) our success in collaboration arrangements with others relating to development of technologies or new products, services and solutions; 13) 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; 14) inventory management risks resulting from shifts in market demand; 15) 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 solutions; 16) our ability to protect numerous Nokia, NAVTEQ and Nokia Siemens Networks patented, standardized or proprietary technologies from third-party infringement or actions to invalidate the intellectual property rights of these technologies; 17) any disruption to information technology systems and networks that our operations rely on; 18) developments under large, multi-year contracts or in relation to major customers; 19) the management of our customer financing exposure;  20) our ability to retain, motivate, develop and recruit appropriately skilled employees; 21) whether, as a result of investigations into alleged violations of law by some 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 violations that may have occurred after the transfer, of such assets and employees that could result in additional actions by government authorities; 22) 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; 23) unfavorable outcome of litigations; 24) allegations of possible health risks from electromagnetic fields generated by base stations and mobile devices and lawsuits related to them, regardless of merit; as well as the risk factors specified on pages 11-28 of Nokia’s annual report on Form 20-F for the year ended December 31, 2008 under Item 3D. “Risk Factors.” 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 publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

 

Nokia, Helsinki – July 16, 2009

 

Media and Investor Contacts:

Corporate Communications, tel. +358 7180 34900

Investor Relations Europe, tel. +358 7180 34289

Investor Relations US, tel. +1 914 368 0555

 

·                  Nokia plans to publish its third quarter 2009 results on October 15, 2009.

 

www.nokia.com

 

24



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Nokia Corporation, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

NOKIA CORPORATION

 

 

 

 

Date: July 17, 2009

By:

/s/ KAARINA STÅHLBERG

 

 

 

 

Name:

Kaarina Ståhlberg

 

Title:

Vice President, Assistant General Counsel

 

25