Nokia(US:NOK)2023-01-30 16:50Financial Data and Key Metrics Changes - The company reported a full-year cash flow of €841 million, with a cash conversion ratio of 27%, which is at the low end of the guidance of 25% to 55% [8] - The net cash position ended at €4.8 billion, indicating a strong liquidity position [8] - The operating profit for 2022 exceeded €3 billion, around €3.1 billion, showing significant improvement from previous years [16][17] Business Line Data and Key Metrics Changes - Mobile Networks and Network Infrastructure (NI) contributed significantly to the operating profit and margins in 2022, with NI achieving a comparable operating profit of €1.1 billion, up from €457 million in 2020 [40][41] - The operating margin for NI reached 12.2% in 2022, with a new target for 2023 set between 11% to 14% [41] - Enterprise sales grew by 21% from 2021 to 2022, with a notable 49% growth in Q4 [22] Market Data and Key Metrics Changes - The company expects a 4% growth in the Network Infrastructure market and a 5% growth in Mobile Networks, heavily influenced by the rapid growth in India [10] - The addressable market for Mobile Networks is projected to grow at a 1% CAGR through 2025, with an extended peak in 5G expected until 2030 [64][66] Company Strategy and Development Direction - The company is focusing on a three-phase transformation plan: reset, accelerate, and scale, with the current emphasis on acceleration [18][20] - The goal is to achieve an operating margin of at least 14% in the long term, with a focus on technology leadership and expanding the enterprise segment to double digits [39][104] - The company aims to diversify its customer base beyond service providers, with a clear target for Enterprise sales to reach 10% of total sales [23] Management's Comments on Operating Environment and Future Outlook - Management highlighted macroeconomic uncertainties as a reason for a wider guidance range for net sales growth between €24.9 billion to €26.5 billion, expecting a growth of 2% to 8% in constant currencies [11] - The management expressed confidence in achieving stronger cash flow in 2024 compared to 2023, with a long-term target for cash flow conversion between 55% to 85% [10] Other Important Information - The company launched a new ESG strategy aimed at making ESG a competitive advantage, with targets for 100% renewable electricity by 2025 and net zero emissions by 2050 [32][35] - R&D investment was €4.4 billion in the previous year, maintaining an R&D intensity of around 18% despite increased spending [37] Q&A Session Summary Question: What are the growth expectations for the different business segments? - The company expects Mobile Networks to grow faster than the market and to expand operating margins into double digits from the current 8.8% level [62] - For Network Infrastructure, the target is to sustain mid-teens operating margins while capitalizing on ongoing fiber deployments and technology advancements [55][56]