TIDMNOKIA 
 
   Nokia Corporation 
 
   Stock Exchange Release 
 
   18 March 2021 at 8:00 EET 
 
   Nokia speeds up transformation to improve profitability 
 
   Capital Markets Day 2021 
 
 
   -- Company sets out a three-phased journey to deliver sustainable, 
      profitable growth and technology leadership. 
 
   -- Reiterates its financial outlook for 2021 and provides outlook for 2023. 
 
   -- Anticipates comparable operating margin to increase to 10--13% in 2023 
      and to grow faster than the market in full-year 2023. 
 
   -- Launches new company purpose and ways of working. 
 
   -- Capital Markets Day presentations will update on key market opportunities, 
      focus areas and long-term trends. 
 
 
   Today Nokia is holding its Capital Markets Day 2021 and providing an 
overview of long-term market trends, how it is setting itself up for 
value creation, detailed plans for each of its business segments, its 
financial outlook and its updated dividend policy. 
 
   "Nokia is repositioning itself to deliver sustainable, profitable growth, 
adapting our business to lead in an increasingly digitalized world. We 
have a clear and detailed plan for how we will reset the business, 
accelerate competitiveness and scale up our lead in the markets we 
choose to play in. This plan will enable us to deliver double-digit 
comparable operating margins in 2023," says Pekka Lundmark, President 
and CEO of Nokia. 
 
   "We have moved away from end-to-end as a cornerstone of our equity story 
and have instead put in place four fully accountable, empowered business 
groups, arranged according to how customers buy. Each of these business 
groups has solid strategies and targets to grow market share and margins 
through enhanced technology leadership," he continues. 
 
   Nokia sees a number of major trends impacting the industry over the next 
few years, with 5G and resulting technologies at their core and creating 
opportunities for CSPs, enterprises and webscales. 
 
   These trends include next-generation access with fiber-to-the-home and 
optimized transport technologies delivering a seamless experience for 
consumers in homes and workplaces, enabling a "gigabit society" when 
combined with mobile 5G. In addition, connected digital enterprise will 
drive massive productivity, efficiency and safety gains across 
industries. A result of this will be significant growth in the 
Enterprise market. 
 
   "5G is still in its early phase. We estimate that the peak of the 5G 
market will last roughly twice as long as it did with 4G. So these 
trends of next generation access and digital connected enterprise still 
have a long way to run. I want Nokia be able to shape them, delivering 
best-of-breed products, services and connectivity that allow our 
customers to deliver constantly improving performance," says Lundmark. 
 
   New company purpose 
 
   The world is changing rapidly and facing fundamental challenges. 
Pressure on the planet is increasing, productivity is stalling and 
access to opportunity remains stubbornly unequal. 
 
   Nokia believes technology is central to the solution. 
 
   Technology can help to respond to climate change through more efficient 
use and re-use of the world's resources. It can be essential for 
restoring productivity growth by digitalizing physical industry, and it 
can help provide more inclusive access to work, healthcare, markets and 
education. 
 
   "With that in mind, our new purpose at Nokia is to create technology 
that helps the world act together. With our customers, we create the 
critical networks that bring together the world's people, machines, and 
devices. And everything we do in our business will contribute to this 
aim" Lundmark continues. 
 
   To deliver on its refreshed purpose, Nokia will strengthen its position 
as a trusted partner for critical networks, which underpin more and more 
mission-critical functions for businesses and across societies. In 
addition, Nokia focuses on technology leadership in each of its 
businesses and captures the value shift to cloud and new business models 
as critical networks evolve. Nokia also creates value with long-term 
research and intellectual property which provide both the technology and 
the financial platform for the company to be successful over the long 
term. 
 
   In addition, Nokia is refreshing its ways of working and promoting a 
culture where its people are open to continuous development, fearless to 
experiment and empowered to act with clear accountability. 
 
   Reset, Accelerate, Scale -- three phases to delivering above market 
growth 
 
   To deliver on its targets for sustainable growth Nokia has set out a 
three-phased approach. 
 
   First, an ongoing reset, with focus on securing technology leadership; 
implementing the new operating model to reduce complexity and increase 
accountability; securing full portfolio competitiveness in Mobile 
Networks; resetting its cost base; and renewing the ways of working. 
 
   From 2022 onwards the company will accelerate competitiveness and aims 
to grow margins through enhanced technology leadership, digitalization 
of own operations, automation and capturing emerging opportunities. It 
then plans to scale up to drive growth in new use cases and business 
models including in enterprise and private wireless in order to grow 
faster than the market. 
 
   Market development 2020 to 2023 
 
   Nokia's total estimated addressable market is expected to grow at a 
compounded annual growth rate (CAGR) of approximately 1% from 2020 to 
2023, comprising of the following estimates: 
 
 
   -- Mobile Networks estimated 2020 -- 2023 addressable market CAGR, excluding 
      China, of approximately 1%; 
 
   -- Network Infrastructure estimated 2020 -- 2023 global addressable market 
      CAGR of approximately 2%; 
 
   -- Cloud and Network Services estimated 2020 -- 2023 global addressable 
      market CAGR of 2%. 
 
 
   Financial outlook for 2021 and 2023 
 
   Today, Nokia reiterated its financial outlook for 2021 and provided its 
outlook for 2023. 
 
 
 
 
Outlook                       Full year 2021        Full year 2023 
Net sales, adjusted for     EUR 20.6 billion to  Grow faster than the 
 currency fluctuations(1)     EUR 21.8 billion          market 
Comparable operating 
 margin(2)                             7 to 10%             10 to 13% 
Free cash flow(3)                      Positive      Clearly positive 
Comparable ROIC(2,4)                  10 to 15%             15 to 20% 
 
   (1) Assuming continuation of 2020 year-end EUR/USD rate of 1.23. 
 
   (2) Comparable measures exclude intangible asset amortization and other 
fair value adjustments, goodwill impairments, restructuring related 
charges and certain other items affecting comparability. 
 
   (3) Free cash flow = net cash from/(used in) operating activities - 
capital expenditures + proceeds from sale of property, plant and 
equipment and intangible assets -- purchase of non-current financial 
investments + proceeds from sale of non-current financial investments. 
 
   (4) Comparable ROIC = (Comparable operating profit after tax) / (Average 
total equity + average interest-bearing liabilities -- average total 
cash and current financial investments). 
 
   Providing transparency to Nokia's four new business groups 
 
   In addition, regarding the underlying assumptions of Nokia's financial 
outlook, Nokia updated its outlook assumptions for its four new business 
groups and Group Common and Other in 2021, and provided new outlook 
assumptions for 2023. 
 
   Between 2021 and 2023, each business group is expected to contribute to 
shareholder value creation. Each business group is focused on driving 
improved focus on capital allocation and technology leadership in 2021, 
positioning Nokia to grow profitably in 2022 and beyond. Over time, each 
business group is expected to generate a return on capital employed 
(ROCE) greater than Nokia's weighted average cost of capital (WACC) of 
7%. 
 
 
 
 
 Comparable operating margin 
Outlook assumptions           Full year 2021  Full year 2023 
Mobile Networks                   -1% to +2%         5 to 8% 
Network Infrastructure              7 to 10%        9 to 12% 
Cloud and Network Services           3 to 6%        8 to 11% 
Nokia Technologies            >75%*           >75%* 
 
 
   *Although we are now providing our outlook assumption for Nokia 
Technologies in terms of comparable operating margin, we continue to 
maintain our expectation for Nokia Technologies to deliver a slight 
improvement in comparable operating profit in full year 2021, relative 
to full year 2020, and stable performance over the longer term. 
 
   Group Common and Other primarily consists of support function costs. 
Where possible, we have now embedded support function costs directly 
into our business groups. Therefore, we expect the net negative impact 
of Group Common and Other to decrease, relative to previous levels, to 
approximately EUR200 million in 2021 and 2023. 
 
   Sustainability 
 
   Nokia strongly believes that connectivity and technology will play a key 
role in helping to solve many future challenges. Its sustainability 
strategy is focused on areas it believes will have the greatest impact 
on sustainable development and on its business. To improve people's 
lives, it is focusing on climate, integrity and culture: 
 
 
   -- On climate, Nokia recently announced that it is targeting to reduce 
      emissions by 50% across both its own operations and products in use 
      between 2019 and 2030. Its new recalibrated Science Based Targets 
      fulfil its commitment to align with a 1.5degC global warming scenario. 
 
   -- On integrity, Nokia has been recognized as one of the world's most 
      ethical companies by the Ethisphere institute and intends to continue to 
      strengthen its position. 
 
   -- On culture, Nokia wants to prioritize greater inclusion and diversity. As 
      one example, it is targeting an increase of female hires in global 
      external recruits. 
 
 
   Updated dividend policy

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03-18-21 0215ET