Nokia(US:NOK)2024-02-28 16:00Financial Performance - Nokia's net sales for 2023 were EUR 22.3 billion, a decline from EUR 24.9 billion in 2022, representing a decrease of approximately 10.5%[18] - The gross profit for 2023 was EUR 8.7 billion, with a gross margin of 39.0%, down from 41.0% in 2022[18] - Operating profit decreased to EUR 1.7 billion, resulting in an operating margin of 7.6%, compared to 9.3% in the previous year[18] - Profit for the year was EUR 674 million, significantly lower than EUR 4.2 billion in 2022[18] - The proposed dividend per share for 2023 is EUR 0.13, an increase from EUR 0.12 in 2022[18] Market and Sales Trends - Nokia Technologies reported a segment net sales decline of 32% with an operating margin decrease of 810 basis points[38] - The estimated total addressable market (TAM) for communications service providers (CSPs) declined by 6% to EUR 96 billion from 2022 to 2023, with expectations of only moderate growth at a 1% CAGR until 2028[67][68] - The enterprise estimated TAM grew by 7% to EUR 16 billion from 2022 to 2023, with a forecasted strong growth at a 7% CAGR until 2028[72] - Network Infrastructure's net sales were negatively impacted by market uncertainty, but profitability remained robust with strong order intake, particularly for IP Networks from webscale customers[43] - Mobile Networks experienced a full-year net sales decline, but increased its 5G market share significantly and continued to grow in private wireless, with new high-performance massive MIMO radios added to its portfolio[44] Innovation and R&D - Nokia's R&D investment since 2000 has reached approximately EUR 150 billion, with over 6,000 patent families declared essential to the 5G standard[25] - Nokia's innovation efforts are led by Nokia Bell Labs, which made breakthroughs in optical networking and 6G, and the company is working with venture partners to commercialize these innovations[59][61] - In 2023, Nokia Bell Labs set four new world records for submarine optical communications and optical networks[105] - Nokia is leading the Hexa-X-II initiative for 6G research and launched a 6G Lab in India[103] - The company is focused on developing new standard-essential patents (SEPs) to shape future technologies and strengthen its IPR portfolio[111] Strategic Initiatives - The company initiated a share buyback program to return up to EUR 600 million to shareholders over the next two years[41] - Nokia announced the acquisition of Fenix Group to strengthen its offerings in the defense sector in the United States[48] - Nokia aims to lower its cost base by EUR 800 million to EUR 1,200 million by the end of 2026 to protect profitability amid ongoing market uncertainty[57] Sustainability and ESG Efforts - The company made significant progress in developing its environmental, social, and governance (ESG) strengths, receiving a top ranking in Sustainalytics' 2023 ESG Top-Rated Companies list[51] - The company aims to cut greenhouse gas emissions across its value chain by 50% by 2030, with factories on track to achieve 100% renewable electricity by 2025[190] - The company conducted a significant increase in supplier audits in 2023 to ensure compliance with labor rights, health and safety, and environmental standards[189] - The company introduced recycled material content targets for mechanical suppliers as part of its circularity program[191] - The company redesigned a key intercontinental logistics route with DHL Global Forwarding, achieving a 68% reduction in transport carbon emissions[193] Supply Chain and Manufacturing - The company purchased over EUR 13 billion worth of products and services from around 10,000 different suppliers in 2023[180] - Nokia's manufacturing network consists of 18% owned manufacturing and 82% contract manufacturing partners, strategically located to minimize risks[186] - The company is committed to enhancing resilience and sustainability across its supply chain to effectively address arising challenges[194] - The company is piloting fiber-based solutions to replace plastic in repair centers, aiming for wider implementation[192] - As of December 31, 2023, the company's net productive capacity across various manufacturing sites includes 13,500 m² in Suzhou, China, and 10,000 m² in Oulu, Finland[195]