Key Takeaways American depositary receipts (ADRs) of Nokia (NOK) dropped Thursday after the Finnish telecommunications company reported second-quarter results that included lower sales than analysts had expected and a surprise loss. Sales fell 18% year-over-year to EUR4.47 billion, with Chief Executive Officer (CEO) Pekka Lundmark noting that they were being impacted by "ongoing market weakness." Despite the worse-than-expected first- and second-quarter sales and lowered full-year sales projections for its ...

OP margin Public 18 July 2024 Q2 2024 1 © 2024 Nokia It should be noted that Nokia and its business are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements. These forward-looking statements reflect Nokia's current expectations and views of future developments and include statements preceded by "believe", "expect", "expectations", "commit", "envisage", "anticipate", "foresee", "see", "target", "estimate", "designed", "aim", "fo ...

Financial Data and Key Metrics - Q2 2024 sales declined by 18% YoY, primarily driven by a significant drop in India, which accounted for three-quarters of the decline [25][31][135] - Gross margin increased by 450 basis points, largely due to improvements in Mobile Networks, including €150 million in accelerated revenue recognition from the AT&T contract resolution [31] - Operating margin stood at 9.5%, down 190 basis points YoY, impacted by the decline in top-line revenue despite the AT&T benefit [32] - Free cash flow was strong at approximately €400 million in Q2, contributing to a net cash balance of €5.5 billion [20][44] - The company is tracking towards the midpoint or slightly below the midpoint of its comparable operating profit guidance of €2.3 billion to €2.9 billion for 2024 [28] Business Line Performance - **Network Infrastructure**: Sales declined by 11% YoY, with sequential improvement from Q1. Order intake trends are improving, supporting expectations of significant net sales growth in H2 2024 [33][26] - **Mobile Networks**: Sales decline was mainly driven by India, reflecting the peak of 5G deployments in Q2 2023. However, sequential growth was seen across all regions, and the AT&T contract resolution provided a €150 million revenue boost [35][36] - **Cloud and Network Services**: Sales declined by 16% YoY, impacted by the challenging environment and the disposal of the device management and service management platform business, which had a 3 percentage point negative impact [40][41] - **Nokia Technologies**: Solid quarter with a run rate of €1.3 billion, supported by smartphone renewals and a new agreement with a video streaming platform [42] Market Performance - **India**: Significant decline in sales, with Q2 2023 marking the peak of 5G deployments. Full-year revenue in India is expected to be between €1.5 billion to €2 billion, including contributions from fixed wireless contracts [35][139] - **North America**: Return to growth, supported by the AT&T benefit and improvements in Network Infrastructure [43] - **Other Regions**: Softness across most markets, with no significant growth drivers noted [43] Strategy and Industry Competition - The company is focusing on cost savings, having already achieved €400 million in run-rate savings out of a targeted €800 million to €1.2 billion by 2026 [27][65] - The acquisition of Infinera is expected to enhance the Network Infrastructure business, particularly in optical networks, with €200 million in synergies targeted by 2027 [49][50] - The divestment of the Submarine Networks business to the French State is part of the strategy to streamline operations and focus on core areas [24][51] - The company is making progress in Open RAN and Cloud RAN projects, with recent wins including Vodafone in Italy and stc in Saudi Arabia [58][59] Management Commentary on Operating Environment and Future Outlook - The industry is stabilizing, with expectations of significant net sales growth acceleration in H2 2024, though the recovery is slower than previously anticipated [4][26] - The company remains on track to achieve its 2024 outlook, supported by cost-saving measures and improving order intake trends [4][68] - Management expects a strong Q4, driven by sales volume and order backlog, though continued momentum in Q3 is required [7][8] Other Important Information - The company has signed 16 ecosystem agreements, including with Orange, Telefonica, and Turkcell, as well as partnerships with Infobip and Google, which are expected to drive demand for network APIs [3] - The board has accelerated the share buyback program, aiming to complete €600 million in buybacks by the end of 2024, a year ahead of schedule [69][110] Q&A Session Summary Question: Network Infrastructure EBIT Margins - The company expects Q3 margins to balance weaker Mobile Networks performance with improvements in Network Infrastructure. Q4 margins are expected to be strong, supported by order backlog and delivery schedules [74][75] Question: Strong H2 Recovery - The strong recovery in H2 is supported by existing order backlog, market recovery trends, and expected delivery times. The company anticipates continued order momentum in Q3 [77][78][79] Question: Cost Savings Impact - €400 million in cost savings have been implemented, with one-third impacting cost of sales and two-thirds impacting OpEx. The company is confident in achieving its cost-saving targets [81][82] Question: Cloud and Network Services Growth - CNS seasonality is expected to be similar to previous years, with a strong Q4. Core network traction in Europe and the decline of 3G core networks are key drivers [85][86][89] Question: AT&T Contract Impact - The €150 million from AT&T is an acceleration of revenue recognition, not a fee. Revenue from AT&T is expected to remain stable in 2024 but drop by half in 2025 [90][91][92] Question: German Government Actions on Chinese Vendors - The company is monitoring the situation in Germany regarding restrictions on Chinese vendors but lacks clarity on the impact on RAN opportunities [99][100] Question: Enterprise and Webscale Diversification - The company is making progress in diversifying into enterprise and webscale markets, with non-CSP business now accounting for 11.6% of group net sales [96][103] Question: Portfolio Management and Acquisitions - The company remains prudent on acquisitions, focusing on strong industrial logic and synergies. The divestment of ASN was driven by strategic considerations and favorable pricing [124][126] Question: Cash Flow and Working Capital - Strong cash flow in H1 was driven by normalization of working capital and India payments. The €150 million AT&T impact will lead to working capital inflows in subsequent quarters [128][129][132] Question: Revenue Decline and Right-Sizing - The revenue decline is primarily market-driven, with three-quarters of the decline coming from India. The right-sizing of the organization has not negatively impacted revenue [135][137] Question: Operating Model and Margins - The company is focusing on shifting more value to software and cloud-based models to improve margins. Large-scale CSP projects remain a margin drag, but enterprise and defense sectors offer better margin potential [150][151][155] Question: IPR and Tech Revenue - The company signed a video streaming deal in Q2 and is exploring new growth areas, with a run rate of €150 million in new growth areas as of December [158]

Nokia Corporation Half Year Report 18 July 2024 at 08:00 EEST Nokia Corporation Report for Q2 and Half Year 2024 Full year outlook reiterated in challenging environment Q2 net sales declined 18% y-o-y in constant currency (-18% reported) primarily due to strong year-ago quarter in India. Submarine Networks treated as discontinued operation. Positively, order intake trends continued to improve, particularly in Network Infrastructure. Comparable gross margin in Q2 increased by 450bps y-o-y to 44.7% (reported ...

Press Release Spain's Aire Networks selects Nokia mobile core solutions to enhance customer experience The deal, which includes Nokia voice core, packet core, subscriber data management, policy control and signaling will increase the operator's network capacity. Nokia's solutions will support Aire's network evolution to unlock new services and business models that deliver faster time to value and revenue streams. Resources and additional information Website: Nokia MantaRay NM Website: Nokia 5G Voice Core We ...

Nokia Corporation (NOK) has announced a strategic partnership with Telecom Egypt to introduce 5G technology in the Middle-East country for the first time. This collaboration aims to significantly enhance the country's telecommunications infrastructure and accelerate its digital transformation journey. Shares of Nokia have gained 2.6% over the past year compared with the industry's growth of 50.7%. Ooma, Inc. (OOMA) offers cloud-based communications solutions, smart security and other connected services. The ...

Press Release Nokia and Telecom Egypt bring 5G to Egypt for the first time Please refer to Telecom Egypt's full financial disclosures on ir.te.eg Tommi Uitto, President of Mobile Networks at Nokia, said: "This important 5G contract with Telecom Egypt extends our longstanding partnership. The introduction of 5G services enabled by our extensive portfolio will open exciting new opportunities for people and businesses in Egypt to experience enhanced mobile connectivity. Our collaboration establishes a strong f ...

Michael Vi In the three months since posting first-quarter results, Nokia (NYSE:NOK) gained 16.67%. This return is almost double that of the S&P 500 (IVV), which gained 8.15%. When the communications equipment supplier reports Q2 results this Thursday, July 18, 2024, what should shareholders expect? Investors have five things to consider. 1. Nokia Q1 2024 Results In the last quarter, Nokia posted non-GAAP earnings per share of EUR 0.09 (USD 0.10). Revenue fell by 20.3% Y/Y to EUR 4.67 billion (USD 5.1 billi ...

Nokia Corporation (NOK) recently partnered with Norlys to enhance telecommunication infrastructure in Denmark. This collaborative effort is aimed at strengthening Norlys' mobile core network, boosting security measures and optimizing managed services to elevate user experiences across Norlys' extensive network infrastructure. Additionally, Nokia will plug in NetGuard telco-grade Endpoint Detection and Response, Privileged Access Management and Certificate Management solutions to enhance security. Nokia will ...

Press Release 11 July 2024 Espoo, Finland – Nokia will publish its second-quarter and half-year financial report on 18 July 2024 at approximately 8 a.m. Finnish time (EEST). The report will be made available on the Nokia website immediately after publication. The detailed, segment-level discussion will be available in the complete financial report hosted at www.nokia.com/financials. A video interview summarizing the key points of our Q2 results will also be published on the website. Investors should not sol ...