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 April 22, 2016

(Commission File No. 1-13202)

 

Nokia Corporation

Karaportti 3

FI-02610 Espoo

Finland

(Name and address of registrant’s principal executive office)

 

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-Fx     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

 

 

 



 

Enclosures:

 

Nokia stock exchange release dated April 22, 2016: Nokia provides recast segment results for 2015 reflecting new financial reporting structure

 



 

 

Nokia provides recast segment results for 2015 reflecting new financial reporting structure

 

Nokia Corporation
Stock Exchange Release
April 22, 2016 at 08:45 (CET +1)

 

Nokia provides recast segment results for 2015 reflecting new financial reporting structure

 

Espoo, Finland — Nokia today provided recast segment results for 2015 reflecting the company’s new financial reporting and organizational structure, following the acquisition of Alcatel-Lucent. Nokia’s organizational structure is intended to enable the company to create an innovation leader in next generation technology and services. With state-of-the-art software, hardware and services for any type of network, Nokia is at the forefront of creating and licensing the technologies that are increasingly at the heart of our connected lives.

 

Three reportable segments

 

To support Nokia’s strategic objectives and reflect the way the company evaluates operational performance and allocates resources, Nokia will revise its financial reporting structure. As of the first quarter 2016, Nokia will have three reportable segments: The (i) Ultra Broadband Networks and (ii) IP Networks and Applications reportable segments within Nokia’s Networks business and the (iii) Nokia Technologies reportable segment within the Nokia Technologies business. In addition, Nokia will disclose segment-level data for Group Common and Other.

 

Ultra Broadband Networks

 

Ultra Broadband Networks is composed of the Mobile Networks and Fixed Networks business groups.

 

·                  The Mobile Networks business group offers an industry-leading portfolio of end-to-end mobile networking solutions comprising hardware, software and services for telecommunications operators, enterprises and related markets/verticals such as public safety and Internet of Things.

 

·                  The Fixed Networks business group provides copper and fiber access products, solutions, and services. The portfolio allows for a customized combination of technologies that brings fiber to the most economical point for the customer.

 

IP Networks and Applications

 

IP Networks and Applications is composed of the IP/Optical Networks and Applications & Analytics business groups.

 

·                  The IP/Optical Networks business group provides the key IP routing and optical transport systems, software and services to build high capacity network infrastructure for the internet and global connectivity.

 

·                  The Applications & Analytics business group offers software solutions spanning customer experience management, network operations and management, communications and collaboration, policy and charging, as well as Cloud, IoT, security,

 

2



 

and analytics platforms that enable digital services providers and enterprises to accelerate innovation, monetize services, and optimize their customer experience.

 

Nokia Technologies

 

The Nokia Technologies business group has two main objectives:

 

·                  To drive growth and renewal in its existing patent licensing business; and

 

·                  to build new businesses for Nokia, based on breakthrough innovation in key technologies and products, in the areas of Digital Media and Digital Health.

 

As of the first quarter 2016, the majority of net sales and the related costs and expenses attributable to licensing and patenting the separate patent portfolios of Nokia Technologies, Nokia’s Networks business, and Bell Labs will be recorded in Nokia Technologies. Each reportable segment will continue to separately record its research and development expenses.

 

Group Common and Other

 

As of the first quarter 2016, Group Common and Other includes the Alcatel Submarine Networks and Radio Frequency Systems businesses, both of which are being managed as separate entities. In addition, Group Common and Other includes Bell Labs’ operating expenses, as well as certain corporate-level and centrally-managed operating expenses.

 

Supplementary financial information

 

As of the first quarter 2016, Nokia will additionally provide supplementary net sales information on a quarterly basis for:

 

·                  Services (part of Nokia’s Networks business);

·                  Each of the four business groups that comprise Nokia’s Networks business;

·                  IP Routing (part of the IP Networks and Applications reportable segment within Nokia’s Networks business); and

·                  Optical Networks (part of the IP Networks and Applications reportable segment within Nokia’s Networks business).

 

This disclosure will be presented in the footnotes of the “Segment information and eliminations” table.

 

Recast combined company segment financial results

 

To provide a basis for comparison, the following tables present a recasting of combined company segment financial results on an unaudited basis for all four quarters of 2015 separately, as well as for full year 2015. This financial information has been prepared to reflect the financial results of the continuing operations of the combined company as if it had been operating as such for the full financial year of 2015. Certain accounting policy alignments, adjustments and reclassifications have been necessary in order to combine the financial information of Nokia and Alcatel-Lucent, and these are explained below in the “Basis of preparation” section of this stock exchange release.

 

3



 

Segment information and eliminations (comparable combined company information, unaudited)

 

Q1’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common and
Other

 

Eliminations

 

Nokia Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

Net sales

 

4 227

 

1 435

 

5 662

 

273

 

203

 

(8

)

6 129

 

Cost of sales

 

(2 815

)

(872

)

(3 686

)

(2

)

(185

)

8

 

(3 865

)

Gross profit

 

1 413

 

563

 

1 976

 

271

 

18

 

0

 

2 264

 

% of net sales

 

33.4

%

39.3

%

34.9

%

99.3

%

8.8

%

 

 

36.9

%

Research and development expenses

 

(702

)

(321

)

(1 023

)

(72

)

(70

)

0

 

(1 165

)

% of net sales

 

17

%

22

%

18

%

27

%

34

%

 

 

19

%

Selling, general and administrative expenses

 

(514

)

(191

)

(705

)

(21

)

(48

)

0

 

(774

)

% of net sales

 

12

%

13

%

12

%

8

%

23

%

 

 

13

%

Other income and expenses

 

(29

)

(10

)

(38

)

1

 

(11

)

0

 

(49

)

Operating profit

 

168

 

42

 

209

 

178

 

(111

)

0

 

276

 

% of net sales

 

4.0

%

2.9

%

3.7

%

65.1

%

(54.5

)%

 

 

4.5

%

 


(1)      Mobile Networks net sales of EUR 3 686 million, Fixed Networks net sales of EUR 541 million.

 

(2)      IP Networks net sales of EUR 729 million, Optical Networks net sales of EUR 320 million, Applications & Analytics net sales of EUR 385 million.

 

(3)      Services net sales of EUR 2 122 million.

 

Segment information and eliminations (comparable combined company information, unaudited)

 

Q2’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common and
Other

 

Eliminations

 

Nokia Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

Net sales

 

4 303

 

1 593

 

5 895

 

219

 

254

 

(5

)

6 363

 

Cost of sales

 

(2 775

)

(885

)

(3 661

)

(2

)

(211

)

5

 

(3 868

)

Gross profit

 

1 527

 

707

 

2 235

 

217

 

43

 

0

 

2 495

 

% of net sales

 

35.5

%

44.4

%

37.9

%

99.1

%

17.0

%

 

 

39.2

%

Research and development expenses

 

(668

)

(307

)

(975

)

(70

)

(73

)

0

 

(1 118

)

% of net sales

 

16

%

19

%

17

%

32

%

29

%

 

 

18

%

Selling, general and administrative expenses

 

(523

)

(190

)

(712

)

(28

)

(61

)

0

 

(801

)

% of net sales

 

12

%

12

%

12

%

13

%

24

%

 

 

13

%

Other income and expenses

 

(29

)

(8

)

(36

)

0

 

110

 

0

 

74

 

Operating profit

 

308

 

203

 

511

 

120

 

18

 

0

 

649

 

% of net sales

 

7.2

%

12.7

%

8.7

%

54.6

%

7.2

%

 

 

10.2

%

 


(1)      Mobile Networks net sales of EUR 3 722 million, Fixed Networks net sales of EUR 580 million.

 

(2)      IP Networks net sales of EUR 769 million, Optical Networks net sales of EUR 407 million, Applications & Analytics net sales of EUR 417 million.

 

(3)      Services net sales of EUR 2 220 million.

 

4



 

Segment information and eliminations (comparable combined company information, unaudited)

 

Q3’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common and
Other

 

Eliminations

 

Nokia Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

Net sales

 

4 469

 

1 552

 

6 020

 

169

 

211

 

(6

)

6 395

 

Cost of sales

 

(2 918

)

(874

)

(3 792

)

(3

)

(195

)

6

 

(3 984

)

Gross profit

 

1 551

 

678

 

2 228

 

166

 

16

 

0

 

2 410

 

% of net sales

 

34.7

%

43.7

%

37.0

%

98.3

%

7.4

%

 

 

37.7

%

Research and development expenses

 

(604

)

(301

)

(904

)

(55

)

(64

)

0

 

(1 024

)

% of net sales

 

14

%

19

%

15

%

33

%

30

%

 

 

16

%

Selling, general and administrative expenses

 

(490

)

(180

)

(670

)

(27

)

(51

)

0

 

(748

)

% of net sales

 

11

%

12

%

11

%

16

%

24

%

 

 

12

%

Other income and expenses

 

21

 

4

 

25

 

0

 

19

 

0

 

44

 

Operating profit

 

478

 

200

 

678

 

84

 

(80

)

0

 

682

 

% of net sales

 

10.7

%

12.9

%

11.3

%

49.6

%

(38.0

)%

 

 

10.7

%

 


(1)  Mobile Networks net sales of EUR 3 903 million, Fixed Networks net sales of EUR 566 million.

(2)  IP Networks net sales of EUR 783 million, Optical Networks net sales of EUR 345 million, Applications & Analytics net sales of EUR 424 million.

(3)  Services net sales of EUR 2 184 million.

 

Segment information and eliminations (comparable combined company information, unaudited)

 

Q4’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common and
Other

 

Eliminations

 

Nokia Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

Net sales

 

5 081

 

1 976

 

7 057

 

413

 

254

 

(4

)

7 719

 

Cost of sales

 

(3 161

)

(1 065

)

(4 226

)

(4

)

(222

)

4

 

(4 447

)

Gross profit

 

1 920

 

911

 

2 830

 

409

 

32

 

0

 

3 272

 

% of net sales

 

37.8

%

46.1

%

40.1

%

99.1

%

12.5

%

 

 

42.4

%

Research and development expenses

 

(682

)

(329

)

(1 011

)

(73

)

(77

)

0

 

(1 161

)

% of net sales

 

13

%

17

%

14

%

18

%

30

%

 

 

15

%

Selling, general and administrative expenses

 

(552

)

(209

)

(761

)

(33

)

(58

)

0

 

(852

)

% of net sales

 

11

%

11

%

11

%

8

%

23

%

 

 

11

%

Other income and expenses

 

16

 

23

 

39

 

7

 

(25

)

0

 

20

 

Operating profit

 

702

 

396

 

1 097

 

311

 

(129

)

0

 

1 279

 

% of net sales

 

13.8

%

20.0

%

15.6

%

75.2

%

(50.7

)%

 

 

16.6

%

 


(1)  Mobile Networks net sales of EUR 4 382, Fixed Networks net sales of EUR 698 million.

(2)  IP Networks net sales of EUR 930 million, Optical Networks net sales of EUR 512 million, Applications & Analytics net sales of EUR 535 million.

(3)  Services net sales of EUR 2 500 million.

 

5



 

Segment information and eliminations (comparable combined company information, unaudited)

 

Q1-Q4’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common and
Other

 

Eliminations

 

Nokia Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

Net sales

 

18 079

 

6 555

 

24 634

 

1 074

 

921

 

(24

)

26 606

 

Cost of sales

 

(11 669

)

(3 696

)

(15 365

)

(10

)

(813

)

24

 

(16 164

)

Gross profit

 

6 410

 

2 859

 

9 269

 

1 064

 

108

 

0

 

10 441

 

% of net sales

 

35.5

%

43.6

%

37.6

%

99.0

%

11.8

%

 

 

39.2

%

Research and development expenses

 

(2 655

)

(1 258

)

(3 914

)

(270

)

(284

)

0

 

(4 468

)

% of net sales

 

15

%

19

%

16

%

25

%

31

%

 

 

17

%

Selling, general and administrative expenses

 

(2 078

)

(770

)

(2 848

)

(109

)

(219

)

0

 

(3 175

)

% of net sales

 

11

%

12

%

12

%

10

%

24

%

 

 

12

%

Other income and expenses

 

(20

)

9

 

(11

)

7

 

93

 

0

 

89

 

Operating profit

 

1 656

 

840

 

2 496

 

692

 

(301

)

0

 

2 887

 

% of net sales

 

9.2

%

12.8

%

10.1

%

64.4

%

(32.7

)%

 

 

10.8

%

 


(1)Mobile Networks net sales of EUR 15 694 million, Fixed Networks net sales of EUR 2 385 million.

 

(2)IP Networks net sales of EUR 3 211 million, Optical Networks net sales of EUR 1 584 million, Applications & Analytics net sales of EUR 1 760 million.

 

(3)Services net sales of EUR 9 026 million.

 

Recast combined company net sales by geographic area for Nokia’s Networks business

 

The geographic exposure for Nokia’s Networks business has changed significantly, following the acquisition of Alcatel-Lucent. The following table provides a recasting of combined company net sales for Nokia’s Networks business by geographic area on an unaudited basis for all four quarters of 2015 separately, as well as for full year 2015.

 

NET SALES BY GEOGRAPHIC AREA (comparable combined company information, unaudited)

 

NOKIA’S NETWORKS BUSINESS

 

EUR million

 

Q1’15

 

Q2’15

 

Q3’15

 

Q4’15

 

Q1-Q4’15

 

Asia-Pacific

 

1 155

 

1 033

 

1 080

 

1 198

 

4 465

 

Europe

 

1 242

 

1 364

 

1 374

 

1 617

 

5 597

 

Greater China

 

604

 

707

 

895

 

916

 

3 122

 

Latin America

 

320

 

421

 

431

 

594

 

1 766

 

Middle East & Africa

 

443

 

539

 

507

 

596

 

2 085

 

North America

 

1 899

 

1 831

 

1 733

 

2 136

 

7 599

 

Total

 

5 662

 

5 895

 

6 020

 

7 057

 

24 634

 

 

Recast Nokia standalone segment financial results

 

In addition, to fulfill external reporting requirements, the following tables include a recasting of Nokia’s standalone historical financial results, on an unaudited basis for all four of the quarters of 2015 separately, as well as for full year 2015. This financial information has been prepared to reflect the financial results of the continuing operations of Nokia on a standalone basis. Certain accounting policy alignments, adjustments and reclassifications have been necessary, and these are explained below in the “Basis of preparation” section of this stock exchange release.

 

6



 

Segment information and eliminations (Nokia standalone historicals, unaudited)

 

Q1’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP
Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common
and
Other

 

Eliminations

 

Nokia
Total

 

Non-IFRS
exclusions
(4)

 

Nokia
Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

 

 

 

 

Net sales

 

2 355

 

317

 

2 671

 

267

 

0

 

(4

)

2 935

 

0

 

2 935

 

Cost of sales

 

(1 556

)

(194

)

(1 750

)

(2

)

(1

)

4

 

(1 749

)

(2

)

(1 751

)

Gross profit

 

799

 

122

 

922

 

265

 

(1

)

0

 

1 186

 

(2

)

1 184

 

% of net sales

 

33.9

%

38.7

%

34.5

%

99.3

%

 

 

 

 

40.5

%

 

 

40.4

%

Research and development expenses

 

(383

)

(75

)

(458

)

(58

)

(19

)

0

 

(536

)

(7

)

(543

)

% of net sales

 

16

%

24

%

17

%

22

%

 

 

 

 

18

%

 

 

19

%

Selling, general and administrative expenses

 

(277

)

(67

)

(344

)

(21

)

(18

)

0

 

(383

)

(10

)

(393

)

% of net sales

 

12

%

21

%

13

%

8

%

 

 

 

 

13

%

 

 

13

%

Other income and expenses

 

(6

)

(3

)

(9

)

1

 

(11

)

0

 

(19

)

0

 

(19

)

Operating profit

 

133

 

(22

)

111

 

186

 

(49

)

0

 

248

 

(20

)

228

 

% of net sales

 

5.7

%

(7.0

)%

4.2

%

69.6

%

 

 

 

 

8.5

%

 

 

7.8

%

 


(1)Mobile Networks net sales of EUR 2 317 million, Fixed Networks net sales of EUR 38 million.

 

(2)IP Networks net sales of EUR 136 million, Applications & Analytics net sales of EUR 180 million.

 

(3)Services net sales of EUR 1 266 million.

 

(4)Non-IFRS measures exclude goodwill impairment charges, intangible asset amortization and items related to purchase price allocation, as well as restructuring-related costs, costs related to the Alcatel-Lucent transaction and certain other items that may not be indicative of the Group’s underlying business.

 

Segment information and eliminations (Nokia standalone historicals, unaudited)

 

Q2’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP
Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common
and
Other

 

Eliminations

 

Nokia
Total

 

Non-IFRS
exclusions
(4)

 

Nokia
Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

 

 

 

 

Net sales

 

2 440

 

289

 

2 729

 

194

 

0

 

(4

)

2 919

 

0

 

2 919

 

Cost of sales

 

(1 477

)

(139

)

(1 615

)

(2

)

1

 

4

 

(1 612

)

37

 

(1 575

)

Gross profit

 

963

 

150

 

1 113

 

193

 

1

 

0

 

1 306

 

37

 

1 343

 

% of net sales

 

39.5

%

51.9

%

40.8

%

99.0

%

 

 

 

 

44.8

%

 

 

46.0

%

Research and development expenses

 

(360

)

(64

)

(424

)

(57

)

(22

)

0

 

(503

)

(13

)

(516

)

% of net sales

 

15

%

22

%

16

%

29

%

 

 

 

 

17

%

 

 

18

%

Selling, general and administrative expenses

 

(296

)

(69

)

(365

)

(28

)

(29

)

0

 

(421

)

(27

)

(448

)

% of net sales

 

12

%

24

%

13

%

14

%

 

 

 

 

14

%

 

 

15

%

Other income and expenses

 

4

 

2

 

7

 

0

 

107

 

0

 

114

 

0

 

114

 

Operating profit

 

312

 

19

 

331

 

108

 

57

 

0

 

496

 

(3

)

493

 

% of net sales

 

12.8

%

6.6

%

12.1

%

55.5

%

 

 

 

 

17.0

%

 

 

16.9

%

 


(1)Mobile Networks net sales of EUR 2 407 million, Fixed Networks net sales of EUR 33 million.

 

(2)IP Networks net sales of EUR 103 million, Applications & Analytics net sales of EUR 185 million.

 

(3)Services net sales of EUR 1 359 million.

 

(4)Non-IFRS measures exclude goodwill impairment charges, intangible asset amortization and items related to purchase price allocation, as well as restructuring-related costs, costs related to the Alcatel-Lucent transaction and certain other items that may not be indicative of the Group’s underlying business.

 

7



 

Segment information and eliminations (Nokia standalone historicals, unaudited)

 

Q3’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP
Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common
and
Other

 

Eliminations

 

Nokia
Total

 

Non-IFRS
exclusions
(4)

 

Nokia
Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

 

 

 

 

Net sales

 

2 548

 

329

 

2 877

 

163

 

0

 

(4

)

3 036

 

0

 

3 036

 

Cost of sales

 

(1 573

)

(149

)

(1 722

)

(2

)

0

 

4

 

(1 720

)

0

 

(1 720

)

Gross profit

 

975

 

180

 

1 155

 

161

 

0

 

0

 

1 316

 

0

 

1 316

 

% of net sales

 

38.3

%

54.7

%

40.1

%

98.9

%

 

 

 

 

43.4

%

 

 

43.4

%

Research and development expenses

 

(346

)

(63

)

(410

)

(45

)

(18

)

0

 

(473

)

(8

)

(481

)

% of net sales

 

14

%

19

%

14

%

28

%

 

 

 

 

16

%

 

 

16

%

Selling, general and administrative expenses

 

(271

)

(65

)

(336

)

(27

)

(22

)

0

 

(385

)

(37

)

(422

)

% of net sales

 

11

%

20

%

12

%

16

%

 

 

 

 

13

%

 

 

14

%

Other income and expenses

 

3

 

0

 

3

 

0

 

17

 

0

 

20

 

(100

)

(80

)

Operating profit

 

360

 

52

 

412

 

89

 

(23

)

0

 

478

 

(145

)

333

 

% of net sales

 

14.1

%

15.8

%

14.3

%

54.7

%

 

 

 

 

15.8

%

 

 

11.0

%

 


(1)Mobile Networks net sales of EUR 2 522 million, Fixed Networks net sales of EUR 26 million.

 

(2)IP Networks net sales of EUR 128 million, Applications & Analytics net sales of EUR 201 million.

 

(3)Services net sales of EUR 1 304 million.

 

(4)Non-IFRS measures exclude goodwill impairment charges, intangible asset amortization and items related to purchase price allocation, as well as restructuring-related costs, costs related to the Alcatel-Lucent transaction and certain other items that may not be indicative of the Group’s underlying business.

 

Segment information and eliminations (Nokia standalone historicals, unaudited)

 

Q4’15

 

EUR million

 

Ultra
Broadband
Networks
(1)

 

IP
Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common
and
Other

 

Eliminations

 

Nokia
Total

 

Non-IFRS
exclusions
(4)

 

Nokia
Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

 

 

 

 

Net sales

 

2 815

 

395

 

3 210

 

403

 

0

 

(4

)

3 609

 

0

 

3 609

 

Cost of sales

 

(1 748

)

(170

)

(1 918

)

(2

)

0

 

4

 

(1 916

)

0

 

(1 916

)

Gross profit

 

1 067

 

224

 

1 292

 

401

 

0

 

0

 

1 693

 

0

 

1 693

 

% of net sales

 

37.9

%

56.8

%

40.2

%

99.5

%

 

 

 

 

46.9

%

 

 

46.9

%

Research and development expenses

 

(380

)

(67

)

(447

)

(60

)

(24

)

0

 

(531

)

(9

)

(540

)

% of net sales

 

14

%

17

%

14

%

15

%

 

 

 

 

15

%

 

 

15

%

Selling, general and administrative expenses

 

(303

)

(73

)

(376

)

(33

)

(29

)

0

 

(437

)

(70

)

(507

)

% of net sales

 

11

%

18

%

12

%

8

%

 

 

 

 

12

%

 

 

14

%

Other income and expenses

 

21

 

5

 

26

 

7

 

(22

)

0

 

11

 

(14

)

(3

)

Operating profit

 

405

 

90

 

495

 

316

 

(74

)

0

 

736

 

(93

)

643

 

% of net sales

 

14.4

%

22.7

%

15.4

%

78.3

%

 

 

 

 

20.4

%

 

 

17.8

%

 


(1)Mobile Networks net sales of EUR 2 776 million, Fixed Networks net sales of EUR 39 million.

 

(2)IP Networks net sales of EUR 147 million, Applications & Analytics net sales of EUR 247 million.

 

(3)Services net sales of EUR 1 495 million.

 

(4)Non-IFRS measures exclude goodwill impairment charges, intangible asset amortization and items related to purchase price allocation, as well as restructuring-related costs, costs related to the Alcatel-Lucent transaction and certain other items that may not be indicative of the Group’s underlying business.

 

8



 

Segment information and eliminations (Nokia standalone historicals, unaudited)

 

Q1-Q4’15

 

EUR million

 

Ultra
Broad-
band
Networks
(1)

 

IP
Networks
and
Applications
(2)

 

Networks
business
Total
(3)

 

Nokia
Technologies

 

Group
Common
and
Other

 

Eliminations

 

Nokia
Total

 

Non-IFRS
exclusions
(4)

 

Nokia
Total

 

 

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

non-IFRS

 

 

 

 

 

Net sales

 

10 158

 

1 328

 

11 486

 

1 027

 

0

 

(15

)

12 499

 

0

 

12 499

 

Cost of sales

 

(6 353

)

(652

)

(7 005

)

(7

)

0

 

15

 

(6 998

)

36

 

(6 962

)

Gross profit

 

3 805

 

676

 

4 481

 

1 020

 

0

 

0

 

5 501

 

35

 

5 536

 

% of net sales

 

37.5

%

50.9

%

39.0

%

99.3

%

 

 

 

 

44.0

%

 

 

44.3

%

Research and develop- ment expenses

 

(1 470

)

(269

)

(1 739

)

(220

)

(84

)

0

 

(2 042

)

(38

)

(2 080

)

% of net sales

 

14

%

20

%

15

%

21

%

 

 

 

 

16

%

 

 

17

%

Selling, general and admin- istrative expenses

 

(1 147

)

(274

)

(1 421

)

(108

)

(97

)

0

 

(1 626

)

(144

)

(1 771

)

% of net sales

 

11

%

21

%

12

%

11

%

 

 

 

 

13

%

 

 

14

%

Other income and expenses

 

22

 

4

 

26

 

7

 

92

 

0

 

126

 

(114

)

12

 

Operating profit

 

1 210

 

138

 

1 349

 

698

 

(89

)

0

 

1 958

 

(261

)

1 697

 

% of net sales

 

11.9

%

10.4

%

11.7

%

68.0

%

 

 

 

 

15.7

%

 

 

13.6

%

 


(1)Mobile Networks net sales of EUR 10 022 million, Fixed Networks net sales of EUR 136 million.

 

(2)IP Networks net sales of EUR 514 million, Applications & Analytics net sales of EUR 813 million.

 

(3)Services net sales of EUR 5 424 million.

 

(4)Non-IFRS measures exclude goodwill impairment charges, intangible asset amortization and items related to purchase price allocation, as well as restructuring-related costs, costs related to the Alcatel-Lucent transaction and certain other items that may not be indicative of the Group’s underlying business.

 

Basis of preparation

 

The recast combined company financial results presented in this press release are derived from the unaudited condensed financial information presented in the interim reports of Nokia and Alcatel-Lucent for all quarters of 2015 and from the audited financial information presented in the annual report for 2015 for Nokia. Nokia financial information includes only continuing operations, which means that all periods presented exclude the historical operating results attributable to the divested HERE business. The accounting impact of the purchase price allocation done on Alcatel-Lucent, upon acquisition by Nokia, is not reflected in the combined company financial results.

 

The following tables provide a summary of the adjustments and reclassifications that have been made to align Alcatel-Lucent’s and Nokia’s historical income statement information with the combined company’s accounting policies and financial statement presentation. These include the:

 

·                  Reclassification of certain items from net sales to offset R&D expenses or to be included in other income as these do not reflect the ordinary activities of the combined company;

·                  reclassification of items, such as change in the bad debt reserve, expenses related to field trials and gains on sales of assets from cost of sales to R&D expenses and to offset SG&A expenses and other expenses to meet the definitions of these line items in the combined company;

·                  reclassification of withholding taxes to income taxes instead of presenting them within the operational income statement items;

·                  reclassification of discounting costs & hedging, bonds & guarantees, litigation costs and capital gain/loss on disposal of entities from below operating profit to other expenses to reflect the application of the combined company accounting policy;

 

9



 

·                  some R&D expenses and cost of development work on internal use software that were previously capitalized by Alcatel-Lucent and have now been expensed as incurred due to adoption of the combined company accounting policy;

·                  reclassification of net interest expenses related to defined benefit pension plans from operational income statement items to financial items below operating profit; and

·                  reallocation of items of costs and expenses based on their nature and the definition of the line items in the combined company accounting policies. These reallocations relate to procurement, order management, project financial controllers, learning solution management, product line management and communications.

 

The recast combined company financial information has been prepared by management for illustrative purposes only and is not necessarily indicative of the financial position or results of Nokia’s operations that would have been realized had the acquisition of Alcatel-Lucent or the sale of the HERE business occurred earlier, nor is it meant to be indicative of any anticipated future results of operations.

 

Accounting reclassifications and accounting policy alignments

 

Q1’15

 

EUR million

 

Nokia
historical

 

Alcatel-Lucent
historical

 

Accounting
reclassifications
and accounting
policy
alignments

 

Eliminations

 

Total Nokia

 

 

 

non-IFRS

 

non-IFRS

 

 

 

 

 

non-IFRS

 

Net sales

 

2 935

 

3 235

 

(33

)

(8

)

6 129

 

Cost of sales

 

(1 769

)

(2 116

)

12

 

8

 

(3 865

)

Gross profit

 

1 165

 

1 119

 

(20

)

0

 

2 264

 

Research and development expenses

 

(547

)

(609

)

(9

)

0

 

(1 165

)

Selling, general and administrative expenses

 

(353

)

(428

)

7

 

0

 

(774

)

Other income and expenses

 

(19

)

 

(30

)

0

 

(49

)

Operating profit

 

246

 

82

 

(52

)

0

 

276

 

 

Q2’15

 

EUR million

 

Nokia
historical

 

Alcatel-Lucent
historical

 

Accounting
reclassifications
and accounting
policy
alignments

 

Eliminations

 

Total Nokia

 

 

 

non-IFRS

 

non-IFRS

 

 

 

 

 

non-IFRS

 

Net sales

 

2 919

 

3 450

 

(1

)

(5

)

6 363

 

Cost of sales

 

(1 637

)

(2 248

)

12

 

5

 

(3 868

)

Gross profit

 

1 282

 

1 202

 

11

 

0

 

2 495

 

Research and development expenses

 

(516

)

(591

)

(11

)

0

 

(1 118

)

Selling, general and administrative expenses

 

(386

)

(436

)

21

 

0

 

(801

)

Other income and expenses

 

114

 

 

(40

)

0

 

74

 

Operating profit

 

494

 

175

 

(20

)

0

 

649

 

 

10



 

Q3’15

 

EUR million

 

Nokia
historical

 

Alcatel-Lucent
historical

 

Accounting
reclassifications
and accounting
policy
alignments

 

Eliminations

 

Total Nokia

 

 

 

non-IFRS

 

non-IFRS

 

 

 

 

 

non-IFRS

 

Net sales

 

3 036

 

3 429

 

(64

)

(6

)

6 395

 

Cost of sales

 

(1 738

)

(2 247

)

(5

)

6

 

(3 984

)

Gross profit

 

1 297

 

1 182

 

(69

)

0

 

2 410

 

Research and development expenses

 

(484

)

(548

)

8

 

0

 

(1 024

)

Selling, general and administrative expenses

 

(358

)

(422

)

32

 

0

 

(748

)

Other income and expenses

 

20

 

 

24

 

0

 

44

 

Operating profit

 

475

 

212

 

(5

)

0

 

682

 

 

Q4’15

 

EUR million

 

Nokia
historical

 

Alcatel-Lucent
historical

 

Accounting
reclassifications
and accounting
policy
alignments

 

Eliminations

 

Total Nokia

 

 

 

non-IFRS

 

non-IFRS

 

 

 

 

 

non-IFRS

 

Net sales

 

3 609

 

4 161

 

(47

)

(4

)

7 719

 

Cost of sales

 

(1 936

)

(2 521

)

6

 

4

 

(4 447

)

Gross profit

 

1 673

 

1 640

 

(41

)

0

 

3 272

 

Research and development expenses

 

(541

)

(603

)

(17

)

0

 

(1 161

)

Selling, general and administrative expenses

 

(410

)

(477

)

35

 

0

 

(852

)

Other income and expenses

 

11

 

 

9

 

0

 

20

 

Operating profit

 

734

 

560

 

(15

)

0

 

1 279

 

 

Q1-Q4’15

 

EUR million

 

Nokia
historical

 

Alcatel-Lucent
historical

 

Accounting
reclassifications
and accounting
policy
alignments

 

Eliminations

 

Total Nokia

 

 

 

non-IFRS

 

non-IFRS

 

 

 

 

 

non-IFRS

 

Net sales

 

12 499

 

14 275

 

(144

)

(24

)

26 606

 

Cost of sales

 

(7 081

)

(9 132

)

25

 

24

 

(16 164

)

Gross profit

 

5 418

 

5 143

 

(120

)

0

 

10 441

 

Research and development expenses

 

(2 088

)

(2 351

)

(29

)

0

 

(4 468

)

Selling, general and administrative expenses

 

(1 507

)

(1 763

)

95

 

0

 

(3 175

)

Other income and expenses

 

126

 

 

(37

)

0

 

89

 

Operating profit

 

1 949

 

1 029

 

(91

)

0

 

2 887

 

 

11



 

About Nokia

 

Nokia is a global leader in the technologies that connect people and things. Powered by the innovation of Bell Labs and Nokia Technologies, the company is at the forefront of creating and licensing the technologies that are increasingly at the heart of our connected lives.

 

With state-of-the-art software, hardware and services for any type of network, Nokia is uniquely positioned to help communication service providers, governments, and large enterprises deliver on the promise of 5G, the Cloud and the Internet of Things. http://nokia.com

 

Media Enquiries:
Nokia
Communications
Tel. +358 (0) 10 448 4900
Email: press.services@nokia.com

 

Investor Enquiries:
Nokia
Investor Relations
Tel. +358 4080 3 4080
Email: investor.relations@nokia.com

 

RISKS AND FORWARD-LOOKING STATEMENTS

 

It should be noted that Nokia and its businesses are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements, including, without limitation, those regarding: A) our ability to integrate Alcatel Lucent into our operations and achieve the targeted business plans and benefits, including targeted synergies in relation to the acquisition of Alcatel Lucent announced on April 15, 2015 and closed in early 2016; B) expectations, plans or benefits related to our strategies and growth management; C) expectations, plans or benefits related to future performance of our businesses; D) expectations, plans or benefits related to changes in our management and other leadership, operational structure and operating model, financial reporting structure and reportable segments, including the expected characteristics, business, organizational structure, management and operations following the acquisition of Alcatel Lucent; E) the accounting policy alignments, adjustments and reclassifications related to the recast combined company financial information; F) expectations regarding market developments, general economic conditions and structural changes; G) expectations and targets regarding financial performance, results, operating expenses, taxes, cost savings and competitiveness, as well as results of operations including targeted synergies and those related to market share, prices, net sales, income and margins; and H) statements preceded by or including “believe,” “expect,” “anticipate,” “foresee,” “sees,” “target,” “estimate,” “designed,” “aim,” “plans,” “intends,” “focus,” “continue,” “project,” “should,” “will” or similar expressions. These statements are based on the 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, including risks and uncertainties, that could cause such differences include, but are not limited to: 1) our ability to execute our strategy, sustain or improve the operational and financial performance of our business or correctly identify or successfully pursue business opportunities or growth; 2) our ability to achieve the anticipated business and operational benefits and synergies from the Alcatel Lucent transaction, including our ability to integrate Alcatel Lucent into our operations and within the timeframe targeted, and our ability to implement our organization and operational structure efficiently; and 3) our ability to manage

 

12



 

and improve our financial and operating performance, cost savings, competitiveness and synergy benefits after the acquisition of Alcatel Lucent, as well as the risk factors specified on pages 69 to 87 of our annual report on Form 20-F filed on April 1, 2016 under “Operating and financial review and prospects—Risk factors”, as well as in Nokia’s other filings with the U.S. Securities and Exchange Commission. Other unknown or unpredictable factors or underlying assumptions subsequently proven to be incorrect could cause actual results to differ materially from those in the forward-looking statements. We do 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.

 

13



 

SIGNATURE

 

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.

 

Date: April 22, 2016

Nokia Corporation

 

 

 

 

 

 

By:

/s/ Riikka Tieaho

 

 

Name:

Riikka Tieaho

 

 

Title:

Vice President, Corporate Legal

 

14