Consolidated income statement (condensed) | |||||||||
EUR million | Reported | Comparable | |||||||
Q2'21 | Q2'20 | Q1-Q2'21 | Q1-Q2'20 | Q2'21 | Q2'20 | Q1-Q2'21 | Q1-Q2'20 | ||
Net sales (Notes 2, 3) | 5,313 | 5,092 | 10,389 | 10,005 | 5,313 | 5,093 | 10,389 | 10,007 | |
Cost of sales1 | (3,133) | (3,151) | (6,285) | (6,328) | (3,064) | (3,076) | (6,200) | (6,203) | |
Gross profit1 (Note 2) | 2,179 | 1,942 | 4,105 | 3,678 | 2,249 | 2,017 | 4,189 | 3,804 | |
Research and development expenses1 | (1,063) | (1,013) | (2,060) | (2,019) | (1,011) | (953) | (1,985) | (1,928) | |
Selling, general and administrative expenses1 | (712) | (709) | (1,360) | (1,489) | (585) | (590) | (1,137) | (1,262) | |
Other operating income and expenses1 | 80 | (50) | 232 | (76) | 29 | (50) | 166 | (75) | |
Operating profit (Note 2) | 484 | 170 | 916 | 94 | 682 | 423 | 1,234 | 539 | |
Share of results of associated companies and joint ventures | 0 | 6 | (5) | 3 | 0 | 6 | (5) | 3 | |
Financial income and expenses | (68) | (11) | (123) | (61) | (39) | (27) | (91) | (93) | |
Profit before tax | 416 | 165 | 788 | 35 | 643 | 403 | 1,138 | 448 | |
Income tax expense (Note 5) | (66) | (80) | (166) | (51) | (104) | (87) | (224) | (100) | |
Profit/(loss) from continuing operations | 350 | 85 | 622 | (16) | 539 | 316 | 914 | 348 | |
(Loss)/profit attributable to equity holders of the parent | 344 | 80 | 613 | (22) | 532 | 311 | 905 | 342 | |
Non-controlling interests | 7 | 5 | 9 | 6 | 7 | 5 | 9 | 6 | |
Profit/(loss) from discontinued operations | 1 | 14 | (9) | (1) | 0 | 0 | 0 | 0 | |
Loss attributable to equity holders of the parent | 1 | 14 | (9) | (1) | 0 | 0 | 0 | 0 | |
Non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Profit/(loss) for the period | 351 | 99 | 614 | (17) | 539 | 316 | 914 | 348 | |
Attributable to | |||||||||
Equity holders of the parent | 344 | 94 | 605 | (23) | 532 | 311 | 905 | 342 | |
Non-controlling interests | 7 | 5 | 9 | 6 | 7 | 5 | 9 | 6 | |
Earnings per share, EUR (for profit attributable to equity holders of the parent) | |||||||||
Basic | |||||||||
Continuing operations | 0.06 | 0.01 | 0.11 | 0.00 | 0.09 | 0.06 | 0.16 | 0.06 | |
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
Profit for the period | 0.06 | 0.02 | 0.11 | 0.00 | 0.09 | 0.06 | 0.16 | 0.06 | |
Diluted | |||||||||
Continuing operations | 0.06 | 0.01 | 0.11 | 0.00 | 0.09 | 0.06 | 0.16 | 0.06 | |
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
Profit for the period | 0.06 | 0.02 | 0.11 | 0.00 | 0.09 | 0.06 | 0.16 | 0.06 | |
Average number of shares ('000 shares) | |||||||||
Basic | |||||||||
Continuing operations | 5,629,374 | 5,610,426 | 5,626,737 | 5,609,281 | 5,629,374 | 5,610,426 | 5,626,737 | 5,609,281 | |
Discontinued operations | 5,629,374 | 5,610,426 | 5,626,737 | 5,609,281 | 0 | 5,629,374 | 5,610,426 | 5,626,737 | 5,609,281 |
Profit for the period | 5,629,374 | 5,610,426 | 5,626,737 | 5,609,281 | 5,629,374 | 5,610,426 | 5,626,737 | 5,609,281 | |
Diluted | |||||||||
Continuing operations | 5,665,966 | 5,631,431 | 5,664,224 | 5,609,281 | 5,665,966 | 5,631,431 | 5,664,224 | 5,631,154 | |
Discontinued operations | 5,665,966 | 5,631,431 | 5,664,224 | 5,609,281 | 0 | 5,665,966 | 5,631,431 | 5,664,224 | 5,631,154 |
Profit for the period | 5,665,966 | 5,631,431 | 5,664,224 | 5,609,281 | 5,665,966 | 5,631,431 | 5,664,224 | 5,631,154 | |
1In the fourth quarter of 2020, Nokia reclassified certain items of income and expenses from other operating income and expenses to the functions. The comparative reported amounts for Q2'20 and Q1-Q2'20 have been recast accordingly. Refer to Note 1, Basis of preparation. | |||||||||
The above condensed consolidated income statement should be read in conjunction with accompanying notes. |
Consolidated statement of comprehensive income (condensed) | ||||
EUR million | Reported | |||
Q2'21 | Q2'20 | Q1-Q2'21 | Q1-Q2'20 | |
Profit/(loss) for the period | 351 | 99 | 614 | (17) |
Other comprehensive income | ||||
Items that will not be reclassified to profit or loss | ||||
Remeasurements of defined benefit plans | 379 | (548) | 1,092 | (26) |
Income tax related to items that will not be reclassified to profit or loss | (101) | 138 | (283) | 8 |
Items that may be reclassified subsequently to profit or loss | ||||
Translation differences | (113) | (550) | 432 | (160) |
Net investment hedges | 9 | 157 | (79) | 49 |
Cash flow and other hedges | 19 | 27 | (3) | 36 |
Financial assets at fair value through other comprehensive income | 4 | 18 | 11 | 35 |
Other changes, net | 0 | 4 | 0 | 3 |
Income tax related to items that may be reclassified subsequently to profit or loss | (1) | (39) | 1 | (23) |
Other comprehensive income/(loss), net of tax | 196 | (793) | 1,171 | (78) |
Total comprehensive income/(loss) for the period | 547 | (694) | 1,785 | (95) |
Attributable to: | ||||
Equity holders of the parent | 540 | (697) | 1,773 | (101) |
Non-controlling interests | 7 | 3 | 12 | 6 |
The above condensed consolidated statement of comprehensive income should be read in conjunction with accompanying notes. |
Consolidated statement of financial position (condensed) | |||
EUR million | 30 June 2021 | 30 June 2020 | 31 December 2020 |
ASSETS | |||
Goodwill | 5,270 | 5,609 | 5,074 |
Other intangible assets | 1,768 | 2,287 | 1,953 |
Property, plant and equipment | 1,802 | 1,770 | 1,783 |
Right-of-use assets | 904 | 857 | 805 |
Investments in associated companies and joint ventures | 224 | 166 | 233 |
Non-current financial investments (Note 6) | 761 | 682 | 745 |
Deferred tax assets (Note 5) | 1,502 | 5,009 | 1,822 |
Other non-current financial assets (Note 6) | 329 | 448 | 306 |
Defined benefit pension assets (Note 4) | 5,670 | 4,935 | 5,038 |
Other non-current assets | 237 | 225 | 217 |
Non-current assets | 18,467 | 21,988 | 17,976 |
Inventories | 2,392 | 2,865 | 2,242 |
Trade receivables (Note 6) | 4,387 | 4,671 | 5,503 |
Contract assets | 1,288 | 1,196 | 1,080 |
Prepaid expenses and accrued income | 881 | 853 | 850 |
Current income tax assets | 317 | 304 | 265 |
Other current financial assets (Note 6) | 183 | 206 | 214 |
Current financial investments (Note 6) | 1,499 | 399 | 1,121 |
Cash and cash equivalents (Note 6) | 7,252 | 7,088 | 6,940 |
Current assets | 18,198 | 17,582 | 18,215 |
Total assets | 36,665 | 39,570 | 36,191 |
SHAREHOLDERS' EQUITY AND LIABILITIES | |||
Share capital | 246 | 246 | 246 |
Share issue premium | 411 | 434 | 443 |
Treasury shares | (352) | (352) | (352) |
Translation differences | (944) | (494) | (1,295) |
Fair value and other reserves | 2,730 | 1,423 | 1,910 |
Reserve for invested unrestricted equity | 15,698 | 15,627 | 15,656 |
Accumulated deficit | (3,541) | (1,644) | (4,143) |
Total capital and reserves attributable to equity holders of the parent | 14,248 | 15,241 | 12,465 |
Non-controlling interests | 89 | 78 | 80 |
Total equity | 14,337 | 15,319 | 12,545 |
Long-term interest-bearing liabilities (Notes 6, 8) | 4,504 | 5,181 | 5,015 |
Long-term lease liabilities | 807 | 729 | 721 |
Deferred tax liabilities | 272 | 240 | 260 |
Defined benefit pension and post-employment liabilities (Note 4) | 3,509 | 4,537 | 4,046 |
Contract liabilities | 478 | 772 | 566 |
Deferred revenue and other long-term liabilities | 520 | 624 | 541 |
Provisions (Note 7) | 711 | 477 | 736 |
Non-current liabilities | 10,800 | 12,560 | 11,885 |
Short-term interest-bearing liabilities (Notes 6, 8) | 559 | 756 | 561 |
Short-term lease liabilities | 223 | 227 | 189 |
Other financial liabilities (Note 6) | 727 | 763 | 738 |
Current income tax liabilities | 155 | 157 | 188 |
Trade payables (Note 6) | 3,119 | 3,255 | 3,174 |
Contract liabilities | 2,544 | 2,817 | 2,394 |
Accrued expenses, deferred revenue and other liabilities | 3,373 | 2,986 | 3,721 |
Provisions (Note 7) | 829 | 730 | 796 |
Current liabilities | 11,528 | 11,690 | 11,761 |
Total shareholders' equity and liabilities | 36,665 | 39,570 | 36,191 |
Shareholders' equity per share, EUR | 2.53 | 2.72 | 2.22 |
Number of shares (1 000 shares, excluding treasury shares) | 5,629,381 | 5,610,426 | 5,617,496 |
The above condensed consolidated statement of financial position should be read in conjunction with accompanying notes. |
Consolidated statement of cash flows (condensed) | ||||
EUR million | Q2'21 | Q2'20 | Q1-Q2'21 | Q1-Q2'20 |
Cash flow from operating activities | ||||
Profit/(loss) for the period | 351 | 99 | 614 | (17) |
Adjustments | 559 | 535 | 927 | 958 |
Depreciation and amortization | 273 | 290 | 544 | 574 |
Restructuring charges | 120 | 98 | 148 | 177 |
Financial income and expenses | 67 | 10 | 123 | 65 |
Income tax expense | 67 | 79 | 166 | 49 |
Loss/(gain) from non-current investments | 2 | 21 | (92) | 28 |
Other | 30 | 37 | 38 | 65 |
Cash from operations before changes in net working capital | 910 | 634 | 1,541 | 941 |
Change in net working capital | (664) | (175) | 136 | (364) |
(Increase)/decrease in receivables | (77) | 219 | 1,014 | 641 |
(Increase)/decrease in inventories | (136) | (82) | (114) | 19 |
Decrease in non-interest-bearing liabilities | (451) | (312) | (764) | (1,024) |
Cash from operations | 246 | 459 | 1,677 | 577 |
Interest received | 9 | 8 | 25 | 16 |
Interest paid | (59) | (49) | (122) | 39 |
Income taxes paid, net | (90) | (85) | (170) | (165) |
Net cash from operating activities | 106 | 333 | 1,410 | 467 |
Cash flow from investing activities | ||||
Purchase of property, plant and equipment and intangible assets | (113) | (89) | (272) | (243) |
Proceeds from sale of property, plant and equipment and intangible assets | 16 | 1 | 48 | 2 |
Acquisition of businesses, net of cash acquired | (33) | 0 | (33) | (104) |
Proceeds from disposal of businesses, net of disposed cash | 0 | 0 | 0 | 7 |
Purchase of current financial investments | (231) | (300) | (685) | (391) |
Proceeds from maturities and sale of current financial investments | 258 | 58 | 318 | 91 |
Purchase of non-current financial investments | (16) | (14) | (42) | (24) |
Proceeds from sale of non-current financial investments | 84 | 34 | 133 | 57 |
Foreign exchange hedging of cash and cash equivalents1 | 2 | 57 | (5) | 75 |
Other | 7 | 3 | 8 | 13 |
Net cash used in investing activities | (26) | (250) | (530) | (517) |
Cash flow from financing activities | ||||
Purchase of a subsidiary's equity instruments | 0 | (2) | 0 | (2) |
Proceeds from long-term borrowings | 3 | 1,093 | 15 | 1,593 |
Repayment of long-term borrowings | (101) | (172) | (482) | (211) |
Proceeds from/(repayment of) short-term borrowings | 18 | 69 | (50) | 83 |
Payment of principal portion of lease liabilities | (52) | (56) | (103) | (123) |
Dividends paid | (3) | (1) | (3) | (16) |
Net cash (used in)/from financing activities | (135) | 931 | (623) | 1,324 |
Translation differences1 | (8) | (85) | 55 | (96) |
Net (decrease)/increase in cash and cash equivalents | (63) | 929 | 312 | 1,178 |
Cash and cash equivalents at beginning of period | 7,315 | 6,159 | 6,940 | 5,910 |
Cash and cash equivalents at end of period | 7,252 | 7,088 | 7,252 | 7,088 |
1In 2021, Nokia changed the presentation of the cash flows relating to foreign exchange hedging of cash and cash equivalents from translation differences to cash flow from investing activities. The comparative amounts for 2020 have been reclassified accordingly. Refer to Note 1, Basis of preparation. | ||||
Consolidated statement of cash flows combines cash flows from both the continuing and the discontinued operations. The figures in the consolidated statement of cash flows cannot be directly traced from the statement of financial position without additional information as a result of acquisitions and disposals of subsidiaries and net foreign exchange differences arising on consolidation. | ||||
The above condensed consolidated statement of cash flows should be read in conjunction with accompanying notes. |
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Consolidated statement of changes in shareholders' equity (condensed) | ||||||||||
EUR million | Share capital | Share issue premium | Treasury shares | Translation differences | Fair value and other reserves | Reserve for invested unrestricted equity | Accumulated deficit | Attributable to equity holders of the parent | Non-controlling interests | Total equity |
1 January 2020 | 246 | 427 | (352) | (372) | 1,382 | 15,607 | (1,613) | 15,325 | 76 | 15,401 |
Loss for the period | 0 | 0 | 0 | 0 | 0 | 0 | (23) | (23) | 6 | (17) |
Other comprehensive loss | 0 | 0 | 0 | (122) | 41 | 0 | 2 | (78) | 0 | (78) |
Total comprehensive loss | 0 | 0 | 0 | (122) | 41 | 0 | (21) | (101) | 6 | (95) |
Share-based payments | 0 | 34 | 0 | 0 | 0 | 0 | 0 | 34 | 0 | 34 |
Excess tax benefit on share-based payments | 0 | 4 | 0 | 0 | 0 | 0 | 0 | 4 | 0 | 4 |
Settlement of share-based payments | 0 | (31) | 0 | 0 | 0 | 20 | 0 | (12) | 0 | (12) |
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (4) | (4) |
Acquisition of non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | (10) | (10) | 0 | (10) |
Total transactions with owners | 0 | 7 | 0 | 0 | 0 | 20 | (10) | 17 | (4) | 13 |
30 June 2020 | 246 | 434 | (352) | (494) | 1,423 | 15,627 | (1,644) | 15,241 | 78 | 15,319 |
1 January 2021 | 246 | 443 | (352) | (1,295) | 1,910 | 15,656 | (4,143) | 12,465 | 80 | 12,545 |
Profit for the period | 0 | 0 | 0 | 0 | 0 | 0 | 605 | 605 | 9 | 614 |
Other comprehensive income | 0 | 0 | 0 | 351 | 819 | 0 | (2) | 1,168 | 3 | 1,171 |
Total comprehensive income | 0 | 0 | 0 | 351 | 819 | 0 | 603 | 1,773 | 12 | 1,785 |
Share-based payments | 0 | 33 | 0 | 0 | 0 | 0 | 0 | 33 | 0 | 33 |
Settlement of share-based payments | 0 | (65) | 0 | 0 | 0 | 42 | 0 | (23) | 0 | (23) |
Dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2) | (2) |
Other movements | 0 | 0 | 0 | 0 | 0 | 0 | (1) | (1) | 0 | (1) |
Total transactions with owners | 0 | (32) | 0 | 0 | 0 | 42 | (1) | 9 | (2) | 7 |
30 June 2021 | 246 | 411 | (352) | (944) | 2,730 | 15,698 | (3,541) | 14,248 | 89 | 14,337 |
The above condensed consolidated statement of changes in shareholders' equity should be read in conjunction with accompanying notes. |
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Notes to Financial statements | ||||||
1. BASIS OF PREPARATION | ||||||
This unaudited and condensed consolidated financial statement information of Nokia has been prepared in accordance with IAS 34, Interim Financial Reporting, and it should be read in conjunction with the consolidated financial statements for 2020 prepared in accordance with IFRS as published by the IASB and adopted by the EU. The same accounting policies, methods of computation and applications of judgment are followed in this financial statement information as was followed in the consolidated financial statements for 2020. Percentages and figures presented herein may include rounding differences and therefore may not add up precisely to the totals presented and may vary from previously published financial information. This financial report was authorized for issue by management on 29 July 2021. Net sales and operating profit of the Nokia Group, particularly in Mobile Networks, Network Infrastructure and Cloud and Network Services segments, are subject to seasonal fluctuations being generally highest in the fourth quarter and lowest in the first quarter of the year. This is mainly due to the seasonality in the spending cycles of communication service providers. Management has identified its regions as the relevant category to present disaggregated revenue. Nokia's primary customer base consists of companies that operate on a country specific or a regional basis and are subject to macroeconomic conditions specific to those regions. Further, although Nokia's technology cycle is similar around the world, each country or region is inherently in a different stage of that cycle, often influenced by macroeconomic conditions. Each reportable segment, as described in Note 2, Segment Information, operates in every region as described in Note 3, Net Sales. No reportable segment has a specific revenue concentration in any region other than Nokia Technologies, which is included in Europe. Each type of customer, as disclosed in Note 3, Net Sales, operates in all regions. In 2017, Nokia and China Huaxin Post & Telecommunication Economy Development Center (China Huaxin) commenced operations of the joint venture Nokia Shanghai Bell (NSB). China Huaxin obtained the right to fully transfer its ownership interest in NSB to Nokia in exchange for a future cash settlement. To reflect this obligation, Nokia derecognized the non-controlling interest and records a financial liability in current liabilities in line with the option exercise period. Any changes in the estimated future cash settlement are recorded in financial income and expense. In the fourth quarter of 2020, Nokia reviewed the presentation of income and expenses related to its restructuring plans, pension plan curtailments and amendments as well as certain asset impairments. As a result, Nokia reclassified the restructuring and associated charges, pension curtailment and plan amendment income and expenses as well as certain impairment charges that were previously presented in other operating income and expenses to the functional line items to enhance the relevance of information provided in Nokia's consolidated income statement. The comparative amounts for 2020 have been reclassified accordingly. Related to Q2 2020, as a result of reclassification, Nokia's cost of sales increased by EUR 65 million, R&D expenses increased by EUR 44 million, SG&A expenses increased by EUR 29 million and other operating expenses decreased by EUR 137 million compared to the previously reported amounts. Related to Q1-Q2 2020, as a result of reclassification, Nokia's cost of sales increased by EUR 106 million, R&D expenses increased by EUR 63 million, SG&A expenses increased by EUR 47 million and other operating expenses decreased by EUR 216 million compared to the previously reported amounts. In the first quarter of 2021, Nokia reviewed the presentation of cash flows related to foreign exchange hedging of cash and cash equivalents. As a result, Nokia reclassified the results of foreign exchange hedging of cash and cash flows previously presented in translation differences to the cash flow from investing activities to enhance the relevance of information provided in Nokia's consolidated statement of cash flows. The comparative amounts for 2020 have been reclassified accordingly. Related to Q2 2020, as a result of the reclassification, the net cash used in investing activities decreased by EUR 57 million and translation differences decreased by EUR 57 million compared to the previously reported amounts. Related to Q1-Q2 2020, as a result of the reclassification, the net cash used in investing activities decreased by EUR 75 million and translation differences decreased by EUR 75 million compared to the previously reported amounts. In 2020, the global economy and financial markets were severely affected by the COVID-19 pandemic. To date, the impact of COVID-19 on our financial performance and financial position has been limited, primarily relating to temporary factory closures in the first half of 2020. As of 30 June 2021, potential risks and uncertainties continue to exist related to the scope and duration of the COVID-19 impact as well as the pace and shape of the economic recovery, and it is impossible to predict with accuracy the precise impact of such risks on our business. | ||||||
Comparable and constant currency measures | ||||||
Nokia presents financial information on a reported, comparable (until the fourth quarter of 2020 non-IFRS) and constant currency basis. Comparable measures presented in this document exclude intangible asset amortization and other purchase price fair value adjustments, goodwill impairments, restructuring related charges and certain other items affecting comparability. In order to allow full visibility on determining comparable results, information on items affecting comparability is presented separately for each of the components of profit or loss. Constant currency reporting provides additional information on change in financial measures on a constant currency basis in order to better reflect the underlying business performance. Therefore, change in financial measures at constant currency excludes the impact of changes in exchange rates in comparison to euro, our reporting currency. As comparable or constant currency financial measures are not defined in IFRS they may not be directly comparable with similarly titled measures used by other companies, including those in the same industry. The primary rationale for presenting these measures is that the management uses these measures in assessing the financial performance of Nokia and believes that these measures provide meaningful supplemental information on the underlying business performance of Nokia. These financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS. Refer to Note 10, Performance measures, for further details. | ||||||
Foreign exchange rates | ||||||
Nokia's net sales are derived from various countries and invoiced in various currencies. Therefore, our business and results from operations are exposed to changes in foreign exchange rates between the euro, our reporting currency, and other currencies, such as the US dollar and the Chinese yuan. To mitigate the impact of changes in exchange rates on our results, we hedge operative forecasted net foreign exchange exposures, typically within a 12-month horizon, and apply hedge accounting in the majority of cases. The below table shows the exposure to different currencies for net sales and total costs. | ||||||
Q2'21 | Q2'20 | Q1'21 | ||||
Net sales | Total costs | Net sales | Total costs | Net sales | Total costs | |
EUR | ~25% | ~25% | ~25% | ~25% | ~25% | ~25% |
USD | ~50% | ~50% | ~50% | ~45% | ~50% | ~45% |
CNY | ~5% | ~5% | ~5% | ~10% | ~5% | ~10% |
Other | ~20% | ~20% | ~20% | ~20% | ~20% | ~20% |
Total | 100% | 100% | 100% | 100% | 100% | 100% |
End of Q2'21 balance sheet rate 1 EUR = 1.19 USD, end of Q2'20 balance sheet rate 1 EUR = 1.12 USD and end of Q1'21 balance sheet rate 1 EUR = 1.17 USD | ||||||
New and amended standards and interpretations | ||||||
The amendments to IFRS standards that became effective on 1 January 2021, did not have a material impact on Nokia's consolidated financial statements. New standards and amendments to existing standards issued by the IASB that are not yet effective are not expected to have a material impact on Nokia's consolidated financial statements when adopted. |
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2. SEGMENT INFORMATION |
Nokia has four operating and reportable segments for the financial reporting purposes: (1) Mobile Networks, (2) Network Infrastructure, (3) Cloud and Network Services and (4) Nokia Technologies. Segment-level information for Group Common and Other is also presented. In addition, Nokia provides net sales disclosure for the following businesses within the Network Infrastructure segment: (i) IP Networks, (ii) Optical Networks, (iii) Fixed Networks and (iv) Submarine Networks. Nokia adopted its current operational and reporting structure on 1 January 2021. The reporting structure was revised to reflect Nokia's new strategy and operational model which is aligned with the way the management evaluates the operational performance of Nokia and allocates resources. Previously Nokia had three reportable segments: (1) Networks, (2) Nokia Software and (3) Nokia Technologies. Furthermore, Networks reportable segment consisted of four aggregated operating segments: (1) Mobile Networks, (2) Global Services, (3) Fixed Networks and (4) IP/Optical Networks. The most significant changes to the operational and reporting structure are the reclassifications of the following product areas: • Network management was reclassified from Nokia Software to Mobile Networks • Submarine Networks was reclassified from Group Common and Other to Network Infrastructure • Packet Core was reclassified from IP/Optical Networks to Cloud and Network Services • Managed Services, Network Cognitive Services and Enterprise Solution Services were reclassified from Global Services to Cloud and Network Services • Digital Automation and Analytics & IoT was reclassified from Group Common and Other to Cloud and Network Services Segment information for 2020 has been recast for comparability purposes according to the new operating and reporting structure. The President and CEO is the chief operating decision-maker and monitors the operating results of segments for the purpose of assessing performance and making decisions about resource allocation. Key financial performance measures of the segments include primarily net sales and operating profit. The evaluation of segment performance and allocation of resources is primarily based on comparable operating profit which the management believes is the most relevant measure for this purpose. Comparable operating profit excludes intangible asset amortization and other purchase price fair value adjustments, goodwill impairments, restructuring related charges and certain other items affecting comparability. Accounting policies of the segments are the same as those described in Note 2, Significant accounting policies in the consolidated financial statements for 2020, except that items affecting comparability are excluded from the measurement of comparable measures. For more information on comparable measures, refer to Notes 1, Basis of preparation and 10, Performance Measures. Inter-segment revenues and transfers are accounted for as if the revenues were to third parties, that is, at current market prices. |
Mobile Networks The Mobile Networks operating segment offers technologies for Radio Access Networks (RAN) as well as Microwave Radio Links (MWR) for transport networks. RAN includes 3GPP radio technologies ranging from 2G/GSM to 5G/NR in licensed and unlicensed spectrum for both macro and small cell deployments. In addition to RAN and MWR products, the Mobile Networks operating segment provides associated network management solutions as well as network planning, network optimization, network deployment and technical support services. Network Infrastructure The Network Infrastructure operating segment serves communication service providers, enterprises, webscales and public sector customers. It comprises the following businesses: (i) Optical Networks, which provides optical transport networks for metro, regional, longhaul and ultra-longhaul applications; (ii) IP Networks, which provides IP networks and services for residential, mobile, enterprise and cloud applications; (iii) Fixed Networks, which provides fiber, fixed wireless access, and copper technologies; and (iv) Submarine Networks, which offers undersea cable transmission. Cloud and Network Services The Cloud and Network Services operating segment is built around software and the cloud and is focused on driving leadership in cloud-native software and as-a-service deliver models, as demand for critical networks accelerates; and with strong market positions in communications software, private wireless networks, and cognitive (or intelligent) services. The Cloud and Network Services portfolio encompasses core networks, including both voice and packet core; business applications covering areas like security and digital operations; cloud and cognitive services; and enterprise solutions covering private wireless and industrial automation. Nokia Technologies The Nokia Technologies operating segment, building on decades of innovation and R&D leadership in technologies used in virtually all mobile devices used today, is expanding the Nokia patent licensing business, reintroducing the Nokia brand to smartphones through brand licensing, and establishing a technology licensing business. The majority of net sales and related costs and expenses attributable to licensing and patenting the patent portfolio is recorded in Nokia Technologies, while each segment separately records its own research and development expenses. Group Common and Other Group Common and Other includes Radio Frequency Systems which is managed as a separate entity. In addition, Group Common and Other includes Nokia Bell Labs' operating expenses, certain corporate-level and centrally managed operating expenses, as well as fair value gains and losses on investments in unlisted venture funds, including investments managed by NGP Capital. |
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Mobile Networks | ||||||||
Q2'21 | Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 2,380 | 0 | 2,380 | 0 | 2,424 | 0 | 2,424 | 0 |
Gross profit | 973 | (31) | 942 | 0 | 875 | (28) | 848 | 0 |
Gross margin % | 40.9% | 39.6% | 0.0% | 36.1% | 35.0% | 0.0% | ||
Operating profit | 249 | (31) | 219 | ERROR:#REF! | 183 | (79) | 104 | |
Operating margin % | 10.5% | 9.2% | ERROR:#REF! | 7.5% | 4.3% | |||
Other segment items | ||||||||
Depreciation and amortization | (83) | (16) | (99) | 0 | (88) | (17) | (105) | 0 |
Share of results of associated companies and joint ventures | 0 | 0 | 0 | 0 | 6 | 0 | 6 | 0 |
EBITDA | 332 | (15) | 318 | 0 | 277 | (62) | 215 | 0 |
Q1-Q2'21 | Q1-Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 4,642 | 0 | 4,642 | 0 | 4,769 | (1) | 4,768 | |
Gross profit | 1,724 | (39) | 1,686 | 0 | 1,605 | (51) | 1,553 | |
Gross margin % | 37.1% | 36.3% | 0.0% | 33.7% | 32.6% | |||
Operating profit | 326 | (63) | 263 | 0 | 197 | (137) | 60 | |
Operating margin % | 7.0% | 5.7% | 4.1% | 1.3% | ||||
Other segment items | ||||||||
Depreciation and amortization | (166) | (32) | (198) | 0 | (175) | (34) | (209) | |
Share of results of associated companies and joint ventures | (4) | 0 | (4) | 0 | 2 | 0 | 2 | |
EBITDA | 488 | (31) | 457 | 0 | 374 | (103) | 271 | |
Network Infrastructure | ||||||||
Q2'21 | Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales(1) | 1,778 | 0 | 1,778 | 0 | 1,545 | 0 | 1,545 | 0 |
Gross profit | 628 | (9) | 620 | 0 | 537 | (15) | 523 | 0 |
Gross margin % | 35.3% | 34.9% | 0.0% | 34.8% | 33.9% | 0.0% | ||
Operating profit/(loss) | 162 | (96) | 66 | ERROR:#REF! | 66 | (115) | (49) | |
Operating margin % | 9.1% | 3.7% | ERROR:#REF! | 4.3% | (3.2)% | |||
Other segment items | ||||||||
Depreciation and amortization | (52) | (74) | (126) | 0 | (51) | (81) | (131) | 0 |
Share of results of associated companies and joint ventures | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EBITDA | 214 | (22) | 192 | 0 | 117 | (34) | 82 | 0 |
¹In Q2´21, IP Networks net sales of EUR 630 million, Optical Networks net sales of EUR 391 million, Fixed Networks net sales of EUR 531 million and Submarine Networks net sales of EUR 226 million. | ||||||||
Q1-Q2'21 | Q1-Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales(1) | 3,505 | 0 | 3,505 | 0 | 2,964 | 0 | 2,963 | |
Gross profit | 1,230 | (12) | 1,219 | 0 | 998 | (26) | 972 | |
Gross margin % | 35.1% | 34.8% | 0.0% | 33.7% | 32.8% | |||
Operating profit/(loss) | 349 | (178) | 170 | 0 | 34 | (209) | (174) | |
Operating margin % | 10.0% | 4.9% | 1.1% | (5.9)% | ||||
Other segment items | ||||||||
Depreciation and amortization | (100) | (146) | (247) | 0 | (101) | (157) | (258) | |
Share of results of associated companies and joint ventures | (1) | 0 | (1) | 0 | 0 | 0 | 0 | |
EBITDA | 448 | (32) | 416 | 0 | 135 | (52) | 84 | |
¹In Q1-Q2´21, IP Networks net sales of EUR 1 255 million, Optical Networks net sales of EUR 791 million, Fixed Networks net sales of EUR 1 022 million and Submarine Networks net sales of EUR 437 million. | ||||||||
Cloud and Network Services | ||||||||
Q2'21 | Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 703 | 0 | 703 | 0 | 718 | 0 | 718 | 0 |
Gross profit | 251 | (30) | 221 | 0 | 258 | (29) | 229 | 0 |
Gross margin % | 35.7% | 31.4% | 0.0% | 35.9% | 31.9% | 0.0% | ||
Operating profit/(loss) | 10 | (51) | (41) | 0 | (6) | (48) | (54) | 0 |
Operating margin % | 1.4% | (5.8)% | 0.0% | (0.8)% | (7.5)% | 0.0% | ||
Other segment items | ||||||||
Depreciation and amortization | (25) | (7) | (32) | 0 | (29) | (8) | (37) | 0 |
Share of results of associated companies and joint ventures | 1 | 0 | 1 | 0 | 1 | 0 | 1 | 0 |
EBITDA | 36 | (44) | (8) | 0 | 24 | (40) | (16) | 0 |
Q1-Q2'21 | Q1-Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 1,377 | 0 | 1,377 | 0 | 1,462 | 0 | 1,462 | |
Gross profit | 476 | (34) | 441 | 0 | 513 | (44) | 469 | |
Gross margin % | 34.6% | 32.0% | 0.0% | 35.1% | 32.1% | |||
Operating loss | (10) | (69) | (79) | 0 | (45) | (77) | (123) | |
Operating margin % | (0.7)% | (5.7)% | 0.0% | (3.1)% | (8.4)% | |||
Other segment items | ||||||||
Depreciation and amortization | (49) | (15) | (64) | 0 | (59) | (16) | (75) | |
Share of results of associated companies and joint ventures | 2 | 0 | 2 | 0 | 2 | 0 | 2 | |
EBITDA | 41 | (54) | (13) | 0 | 16 | (61) | (46) | |
Nokia Technologies | ||||||||
Q2'21 | Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 401 | 0 | 401 | 0 | 341 | 0 | 341 | 0 |
Gross profit | 400 | 0 | 400 | 0 | 339 | 0 | 339 | 0 |
Gross margin % | 99.8% | 99.8% | 0.0% | 99.4% | 99.4% | 0.0% | ||
Operating profit | 332 | 0 | 331 | 0 | 272 | (1) | 271 | 0 |
Operating margin % | 82.8% | 82.5% | 0.0% | 79.8% | 79.5% | 0.0% | ||
Other segment items | ||||||||
Depreciation and amortization | (8) | 0 | (8) | 0 | (10) | 0 | (10) | 0 |
Share of results of associated companies and joint ventures | (1) | 0 | (1) | 0 | 0 | 0 | 0 | 0 |
EBITDA | 339 | 0 | 338 | 0 | 282 | (1) | 281 | 0 |
Q1-Q2'21 | Q1-Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 766 | 0 | 766 | 0 | 689 | 0 | 689 | |
Gross profit | 764 | 0 | 764 | 0 | 684 | 0 | 684 | |
Gross margin % | 99.7% | 99.7% | 0.0% | 99.3% | 99.3% | |||
Operating profit | 618 | (1) | 617 | 0 | 552 | (1) | 551 | |
Operating margin % | 80.7% | 80.5% | 0.0% | 80.1% | 80.0% | |||
Other segment items | ||||||||
Depreciation and amortization | (17) | 0 | (17) | 0 | (19) | 0 | (20) | |
Share of results of associated companies and joint ventures | (1) | 0 | (1) | 0 | 0 | 0 | 0 | |
EBITDA | 634 | (1) | 633 | 0 | 571 | (1) | 571 | |
Group Common and Other | ||||||||
Q2'21 | Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 62 | 0 | 62 | 0 | 75 | 0 | 75 | 0 |
Gross (loss)/profit | (3) | 0 | (3) | 0 | 6 | (4) | 2 | 0 |
Gross margin % | (4.8)% | (4.8)% | 0.0% | 8.0% | 2.7% | 0.0% | ||
Operating loss | (70) | (20) | (90) | 0 | (91) | (11) | (103) | 0 |
Operating margin % | (112.9)% | (145.2)% | 0.0% | (121.3)% | (137.3)% | 0.0% | ||
Other segment items | ||||||||
Depreciation and amortization | (7) | 0 | (8) | 0 | (6) | 0 | (7) | 0 |
Share of results of associated companies and joint ventures | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EBITDA | (63) | (20) | (82) | 0 | (85) | (11) | (96) | 0 |
Q1-Q2'21 | Q1-Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 119 | 0 | 119 | 0 | 143 | 0 | 143 | |
Gross (loss)/profit | (5) | 0 | (5) | 0 | 4 | (5) | (1) | |
Gross margin % | (4.2)% | (4.2)% | 0.0% | 2.8% | (0.7)% | |||
Operating loss | (48) | (7) | (55) | 0 | (199) | (21) | (221) | |
Operating margin % | (40.3)% | (46.2)% | 0.0% | (139.2)% | (154.5)% | |||
Other segment items | ||||||||
Depreciation and amortization | (18) | (1) | (18) | 0 | (13) | (1) | (13) | |
Share of results of associated companies and joint ventures | 0 | 0 | 0 | 0 | (1) | 0 | (1) | |
EBITDA | (30) | (6) | (37) | 0 | (187) | (20) | (209) | |
Nokia Group | ||||||||
Q2'21 | Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 5,313 | 0 | 5,313 | 0 | 5,093 | (1) | 5,092 | 0 |
Gross profit | 2,249 | (70) | 2,179 | 0 | 2,017 | (75) | 1,942 | 0 |
Gross margin % | 42.3% | 41.0% | 0.0% | 39.6% | 38.1% | 0.0% | ||
Operating profit | 682 | (198) | 484 | 0 | 423 | (253) | 170 | 0 |
Operating margin % | 12.8% | 9.1% | 0.0% | 8.3% | 3.3% | 0.0% | ||
Other segment items | ||||||||
Depreciation and amortization | (176) | (97) | (273) | 0 | (184) | (106) | (290) | 0 |
Share of results of associated companies and joint ventures | 0 | 0 | 0 | 0 | 6 | 0 | 6 | 0 |
EBITDA | 858 | (101) | 757 | 0 | 613 | (147) | 466 | 0 |
Q1-Q2'21 | Q1-Q2'20 | |||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | ||
Net sales | 10,389 | 0 | 10,389 | 0 | 10,007 | (1) | 10,005 | |
Gross profit | 4,189 | (85) | 4,105 | 0 | 3,804 | (126) | 3,678 | |
Gross margin % | 40.3% | 39.5% | 0.0% | 38.0% | 36.8% | |||
Operating profit | 1,234 | (318) | 916 | 0 | 539 | (445) | 94 | |
Operating margin % | 11.9% | 8.8% | 0.0% | 5.4% | 0.9% | |||
Other segment items | ||||||||
Depreciation and amortization | (350) | (194) | (544) | 0 | (367) | (208) | (574) | |
Share of results of associated companies and joint ventures | (5) | 0 | (5) | 0 | 3 | 0 | 3 | |
EBITDA | 1,579 | (124) | 1,455 | 0 | 909 | (237) | 671 |
&1#&"Arial"&8&K001753Nokia internal use
Reconciliation of the segments to the Group | |||||||
Q2'21 | Q1-Q2'21 | ||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | |
Net sales | |||||||
Mobile Networks | 2,380 | 0 | 2,380 | 4,642 | 0 | 4,642 | |
Network Infrastructure | 1,778 | 0 | 1,778 | 3,505 | 0 | 3,505 | |
Cloud and Network Services | 703 | 0 | 703 | 1,377 | 0 | 1,377 | |
Nokia Technologies | 401 | 0 | 401 | 766 | 0 | 766 | |
Group Common and Other | 62 | 0 | 62 | 119 | 0 | 119 | |
Segment total | 5,324 | 0 | 5,324 | 10,409 | 0 | 10,409 | |
Eliminations | (10) | 0 | (10) | (20) | 0 | (20) | |
Nokia Group | 5,313 | 0 | 5,313 | 10,389 | 0 | 10,389 | |
Gross profit | |||||||
Mobile Networks | 973 | (31) | 942 | 1,724 | (39) | 1,686 | |
Network Infrastructure | 628 | (9) | 620 | 1,230 | (12) | 1,219 | |
Cloud and Network Services | 251 | (30) | 221 | 476 | (34) | 441 | |
Nokia Technologies | 400 | 0 | 400 | 764 | 0 | 764 | |
Group Common and Other | (3) | 0 | (3) | (5) | 0 | (5) | |
Segment total | 2,249 | (70) | 2,179 | 0 | 4,189 | (85) | 4,105 |
Nokia Group | 2,249 | (70) | 2,179 | 4,189 | (85) | 4,105 | |
Operating profit/(loss) | |||||||
Mobile Networks | 249 | (31) | 219 | 326 | (63) | 263 | |
Network Infrastructure | 162 | (96) | 66 | 349 | (178) | 170 | |
Cloud and Network Services | 10 | (51) | (41) | (10) | (69) | (79) | |
Nokia Technologies | 332 | 0 | 331 | 618 | (1) | 617 | |
Group Common and Other | (70) | (20) | (90) | (48) | (7) | (55) | |
Segment total | 682 | (198) | 484 | 0 | 1,234 | (318) | 916 |
Nokia Group | 682 | (198) | 484 | 1,234 | (318) | 916 | |
Q2'20 | Q1-Q2'20 | ||||||
EUR million | Comparable | Items affecting comparability | Reported | Comparable | Items affecting comparability | Reported | |
Net sales | |||||||
Mobile Networks | 2,424 | 0 | 2,424 | 4,769 | (1) | 4,768 | |
Network Infrastructure | 1,545 | 0 | 1,545 | 2,964 | 0 | 2,963 | |
Cloud and Network Services | 718 | 0 | 718 | 1,462 | 0 | 1,462 | |
Nokia Technologies | 341 | 0 | 341 | 689 | 0 | 689 | |
Group Common and Other | 75 | 0 | 75 | 143 | 0 | 143 | |
Segment total | 5,103 | 0 | 5,103 | 10,027 | (1) | 10,025 | |
Eliminations | (11) | 0 | (11) | (20) | 0 | (20) | |
Nokia Group | 5,093 | (1) | 5,092 | 10,007 | (1) | 10,005 | |
Gross profit | |||||||
Mobile Networks | 875 | (28) | 848 | 1,605 | (51) | 1,553 | |
Network Infrastructure | 537 | (15) | 523 | 998 | (26) | 972 | |
Cloud and Network Services | 258 | (29) | 229 | 513 | (44) | 469 | |
Nokia Technologies | 339 | 0 | 339 | 684 | 0 | 684 | |
Group Common and Other | 6 | (4) | 2 | 4 | (5) | (1) | |
Segment total | 2,017 | (75) | 1,942 | 0 | 3,804 | (126) | 3,678 |
Nokia Group | 2,017 | (75) | 1,942 | 3,804 | (126) | 3,678 | |
Operating profit/(loss) | |||||||
Mobile Networks | 183 | (79) | 104 | 197 | (137) | 60 | |
Network Infrastructure | 66 | (115) | (49) | 34 | (209) | (174) | |
Cloud and Network Services | (6) | (48) | (54) | (45) | (77) | (123) | |
Nokia Technologies | 272 | (1) | 271 | 552 | (1) | 551 | |
Group Common and Other | (91) | (11) | (103) | (199) | (21) | (221) | |
Segment total | 423 | (253) | 170 | 0 | 539 | (445) | 94 |
Nokia Group | 423 | (253) | 170 | 539 | (445) | 94 |
&1#&"Arial"&8&K001753Nokia internal use
3. NET SALES | ||||||
Net sales by region | ||||||
EUR million | Q2'21 | Q2'20¹ | YoY change | Q1-Q2'21 | Q1-Q2'20¹ | YoY change |
Asia Pacific | 582 | 643 | (9)% | 1,162 | 1,343 | (13)% |
Europe | 1,662 | 1,565 | 6% | 3,136 | 2,999 | 5% |
Greater China | 374 | 338 | 11% | 776 | 671 | 16% |
India | 290 | 179 | 62% | 538 | 392 | 37% |
Latin America | 323 | 216 | 50% | 616 | 497 | 24% |
Middle East & Africa | 423 | 426 | (1)% | 838 | 908 | (8)% |
North America | 1,659 | 1,725 | (4)% | 3,324 | 3,196 | 4% |
Total | 5,313 | 5,092 | 4% | 10,389 | 10,005 | 4% |
1In the first quarter of 2021, Nokia aligned how it externally reports financial information on a regional basis with its internal reporting structure. As a result, India which was earlier presented as part of Asia Pacific region is presented as a separate region. In addition, certain countries are now presented as part of a different region. The comparative net sales by region amounts for Q2'20 and Q1-Q2´20 have been recast accordingly. | ||||||
Net sales by customer type | ||||||
EUR million | Q2'21 | Q2'20 | YoY change | Q1-Q2'21 | Q1-Q2'20 | YoY change |
Communication service providers | 4,277 | 4,180 | 2% | 8,375 | 8,245 | 2% |
Enterprise | 357 | 376 | (5)% | 712 | 687 | 4% |
Licensees | 401 | 341 | 18% | 766 | 689 | 11% |
Other1 | 278 | 195 | 43% | 536 | 384 | 40% |
Total | 5,313 | 5,092 | 4% | 10,389 | 10,005 | 4% |
1Includes net sales of Submarine Networks which operates in a different market, and Radio Frequency Systems (RFS), which is being managed as a separate entity, and certain other items, such as eliminations of inter-segment revenues and certain items related to purchase price allocation. Submarine Networks and RFS net sales include also revenue from communication service providers and enterprise customers. |
&1#&"Arial"&8&K001753Nokia internal use
4. PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS | |||||||||
Nokia operates a number of post-employment plans in various countries including both defined contribution and defined benefit plans. Defined benefit plans include pension plans and other post-employment benefit plans, providing retirement healthcare benefits and life insurance coverage. 95% of Nokia's defined benefit obligation and 98% of plan assets fair values were remeasured as of 30 June 2021. Nokia's pension and post-retirement plans in the United States have been remeasured by updated valuations from an external actuary and the main pension plans outside of the US have been remeasured based upon updated asset valuations and changes in the discount rates during the reporting period. The impact of not remeasuring other pension and post-employment obligations is considered not material. As of 30 June 2021, the weighted average discount rates used in remeasurement of the most significant plans were as follows (comparatives as of 31 December 2020): U.S. Pension 2.28% (1.94 %), U.S. Opeb 2.34% (1.97%), Germany 0.75 % (0.35 %) and U.K. 1.81 % (1.26 %). The funded status of Nokia's defined benefit plans (before the effect of the asset ceiling) increased from EUR 3 194 million, or 114.1%, as of 31 March 2021 to EUR 3 620 million, or 116.0% as of 30 June 2021. During the quarter the global defined benefit plan asset portfolio was invested approximately 73% in fixed income, 6% in equities and 21% in other asset classes, mainly private equity and real estate. Market conditions for financial assets have continued to stabilize after COVID-19 related stress in 2020. Should there be another increase in financial market volatility, fair values of pension assets may fluctuate in future quarters. | |||||||||
Change in pension and post-employment net asset/(liability) | |||||||||
30 June 2021 | 30 June 2020 | 31 December 2020 | |||||||
EUR million | Pensions1 | US Opeb | Total | Pensions1 | US Opeb | Total | Pensions1 | US Opeb | Total |
Net asset/(liability) recognized 1 January | 2,572 | (1,580) | 992 | 2,348 | (1,861) | 487 | 2,348 | (1,861) | 487 |
Recognized in income statement | (81) | (14) | (95) | (87) | (26) | (113) | (196) | 43 | (153) |
Recognized in other comprehensive income | 964 | 128 | 1,092 | 96 | (122) | (26) | 707 | (83) | 624 |
Contributions and benefits paid | 97 | (10) | 87 | 82 | (4) | 78 | 186 | 6 | 192 |
Exchange differences and other movements2 | (128) | 213 | 85 | (19) | (9) | (28) | (473) | 315 | (158) |
Net asset/(liability) recognized at the end of the period | 3,424 | (1,263) | 2,161 | 2,420 | (2,022) | 398 | 2,572 | (1,580) | 992 |
1Includes pensions, retirement indemnities and other post-employment plans. | |||||||||
2Includes Section 420 transfers, medicare subsidies, and other transfers. | |||||||||
Funded status | |||||||||
EUR million | 30 June 2021 | 31 March 2021 | 31 December 2020 | 30 September 2020 | 30 June 2020 | ||||
Defined benefit obligation1 | (22,599) | (22,630) | (23,501) | (24,554) | (25,615) | ||||
Fair value of plan assets1 | 26,219 | 25,824 | 25,688 | 26,302 | 27,058 | ||||
Funded status | 3,620 | 3,194 | 2,187 | 1,748 | 1,443 | ||||
Effects of asset ceiling | (1,459) | (1,368) | (1,195) | (1,191) | (1,045) | ||||
Net asset recognized at the end of the period | 2,161 | 1,826 | 992 | 557 | 398 | ||||
1The comparative amounts for defined benefit obligation and fair value of plan assets have been changed for each quarter in 2020 to reflect the timing of US benefit payments. |
&1#&"Arial"&8&K001753Nokia internal use
5. DEFERRED TAXES |
At 30 June 2021, Nokia has recognized deferred tax assets of EUR 1.5 billion (EUR 1.8 billion at 31 December 2020), significant portion of which relate to unused tax losses, unused tax credits and deductible temporary differences in the United States (EUR 0.5 billion). Nokia continually evaluates the probability of utilizing its deferred tax assets and considers both favorable and unfavorable factors in its assessment. Deferred tax assets are recognized to the extent it is probable that future taxable profit will be available against which the unused tax losses, unused tax credits and deductible temporary differences can be utilized in the relevant jurisdictions. Nokia has an established pattern of sufficient profitability to conclude that it is probable that it will be able to utilize the deferred tax assets in the United States. At 30 June 2021, Nokia has unrecognized deferred tax assets of approximately EUR 8 billion (EUR 8 billion at 31 December 2020), the majority of which relate to France (approximately EUR 4 billion) and Finland (approximately EUR 3 billion). These deferred tax assets have not been recognized due to uncertainty regarding their utilization. A significant portion of the French unrecognized deferred tax assets are indefinite in nature and available against future French tax liabilities, subject to a limitation of 50% of annual taxable profits. The majority of Finnish unrecognized deferred tax assets are not subject to expiry and are available against future Finnish tax liabilities. |
&1#&"Arial"&8&K001753Nokia internal use
6. FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||
Financial assets and liabilities recorded at fair value are categorized based on the amount of unobservable inputs used to measure their fair value. Three hierarchical levels are based on an increasing amount of judgment associated with the inputs used to derive fair valuation for these assets and liabilities; Level 1 being market values for exchange traded products, Level 2 being primarily based on quotes from third-party pricing services and Level 3 requiring most management judgment. For more information about the valuation methods and principles, refer to Note 2, Significant accounting policies and Note 24, Fair value of financial instruments, in the consolidated financial statements for 2020. Items carried at fair value in the following table are measured at fair value on a recurring basis. | |||||||||
EUR million | Carrying amounts | Fair value | |||||||
Amortized cost | Fair value through profit or loss | Fair value through other comprehensive income | |||||||
30 June 2021 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Total | Total | |
Non-current financial investments | 0 | 23 | 0 | 738 | 0 | 0 | 0 | 761 | 761 |
Other non-current financial assets | 120 | 0 | 99 | 0 | 0 | 110 | 0 | 329 | 329 |
Other current financial assets including derivatives | 45 | 0 | 111 | 8 | 0 | 19 | 0 | 183 | 183 |
Trade receivables | 0 | 0 | 0 | 0 | 0 | 4,387 | 0 | 4,387 | 4,387 |
Current financial investments | 138 | 0 | 1,107 | 0 | 0 | 254 | 0 | 1,499 | 1,499 |
Cash and cash equivalents | 4,756 | 0 | 2,496 | 0 | 0 | 0 | 0 | 7,252 | 7,252 |
Total financial assets | 5,059 | 23 | 3,813 | 746 | 0 | 4,770 | 0 | 14,411 | 14,411 |
Long-term interest-bearing liabilities | 4,504 | 0 | 0 | 0 | 0 | 0 | 0 | 4,504 | 4,700 |
Other long-term financial liabilities | 0 | 0 | 0 | 75 | 0 | 0 | 0 | 75 | 75 |
Short-term interest-bearing liabilities | 559 | 0 | 0 | 0 | 0 | 0 | 0 | 559 | 562 |
Other short-term financial liabilities including derivatives | 0 | 0 | 256 | 471 | 0 | 0 | 0 | 727 | 727 |
Trade payables | 3,119 | 0 | 0 | 0 | 0 | 0 | 0 | 3,119 | 3,119 |
Total financial liabilities | 8,182 | 0 | 256 | 546 | 0 | 0 | 0 | 8,984 | 9,183 |
EUR million | Carrying amounts | Fair value | |||||||
Amortized cost | Fair value through profit or loss | Fair value through other comprehensive income | |||||||
31 December 2020 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Total | Total | |
Non-current financial investments | 0 | 31 | 0 | 714 | 0 | 0 | 0 | 745 | 745 |
Other non-current financial assets | 115 | 0 | 99 | 5 | 0 | 87 | 0 | 306 | 306 |
Other current financial assets including derivatives | 22 | 0 | 169 | 8 | 0 | 15 | 0 | 214 | 214 |
Trade receivables | 0 | 0 | 0 | 0 | 0 | 5,503 | 0 | 5,503 | 5,503 |
Current financial investments | 134 | 0 | 882 | 0 | 0 | 105 | 0 | 1,121 | 1,121 |
Cash and cash equivalents | 4,333 | 0 | 2,607 | 0 | 0 | 0 | 0 | 6,940 | 6,940 |
Total financial assets | 4,604 | 31 | 3,757 | 727 | 0 | 5,710 | 0 | 14,829 | 14,829 |
Long-term interest-bearing liabilities | 5,015 | 0 | 0 | 0 | 0 | 0 | 0 | 5,015 | 5,140 |
Other long-term financial liabilities | 0 | 0 | 0 | 19 | 0 | 0 | 0 | 19 | 19 |
Short-term interest-bearing liabilities | 561 | 0 | 0 | 0 | 0 | 0 | 0 | 561 | 561 |
Other short-term financial liabilities including derivatives | 0 | 0 | 318 | 420 | 0 | 0 | 0 | 738 | 738 |
Trade payables | 3,174 | 0 | 0 | 0 | 0 | 0 | 0 | 3,174 | 3,174 |
Total financial liabilities | 8,750 | 0 | 318 | 439 | 0 | 0 | 0 | 9,507 | 9,632 |
Lease liabilities are not included in the fair value of financial instruments. | |||||||||
Level 3 Financial assets include a large number of investments in unlisted equities and unlisted venture funds, including investments managed by NGP Capital specializing in growth-stage investing. The fair value of level 3 investments is determined using one or more valuation techniques with unobservable inputs, where the use of the market approach generally consists of using comparable market transactions, while the use of the income approach generally consists of calculating the net present value of expected future cash flows. | |||||||||
Level 3 Financial liabilities include a conditional obligation to China Huaxin related to Nokia Shanghai Bell. | |||||||||
Reconciliation of the opening and closing balances on level 3 financial assets and liabilities: | |||||||||
EUR million | Level 3 Financial Assets | Level 3 Financial Liabilities | |||||||
Balance as of 31 December 2020 | 727 | (439) | |||||||
Net gains/(losses) in income statement | 86 | (63) | |||||||
Acquisitions through business combination | 0 | (48) | |||||||
Additions | 36 | 0 | |||||||
Deductions | (102) | 4 | |||||||
Transfers out of level 3 | (2) | 0 | |||||||
Other movements | 1 | 0 | |||||||
Balance as of 30 June 2021 | 746 | (546) | |||||||
The gains and losses from venture fund and similar investments categorized in level 3 are included in other operating income and expenses. The gains and losses from other level 3 financial assets and liabilities are recorded in financial income and expenses. A net gain of EUR 20 million (net gain of EUR 102 million in 2020) related to level 3 financial instruments held at 30 June 2021, was included in the profit and loss during 2021. |
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7. PROVISIONS | |||||||||
EUR million | Restructuring | Warranty | Litigation | Environmental | Project losses | Divestment- related | Material liability | Other1 | Total |
As of 1 January 2021 | 441 | 220 | 73 | 113 | 276 | 49 | 130 | 230 | 1,532 |
Translation differences | 0 | 1 | 2 | 5 | 0 | 0 | 0 | 6 | 14 |
Reclassification | (4) | 0 | (2) | 0 | 0 | (12) | 0 | 17 | (1) |
Charged to income statement | |||||||||
Additions | 159 | 86 | 21 | 6 | 0 | 12 | 4 | 53 | 341 |
Reversals | (11) | (7) | (6) | (1) | (9) | (3) | (20) | (6) | (63) |
Total charged to income statement | 148 | 79 | 15 | 5 | (9) | 9 | (16) | 47 | 278 |
Utilized during period2 | (129) | (83) | (7) | (4) | (23) | 0 | (22) | (15) | (283) |
As of 30 June 2021 | 456 | 217 | 80 | 118 | 245 | 45 | 92 | 287 | 1,540 |
Non-current | 211 | 20 | 15 | 103 | 176 | 43 | 16 | 128 | 711 |
Current | 244 | 197 | 65 | 15 | 70 | 3 | 75 | 159 | 829 |
1Other provisions include provisions for various obligations such as indirect tax provisions, employee-related provisions other than restructuring provisions and asset retirement obligations. | |||||||||
2The utilization of restructuring provision includes items transferred to accrued expenses, of which EUR 53 million remained in accrued expenses as of 30 June 2021. |
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8. INTEREST-BEARING LIABILITIES | |||||||
Carrying amount (EUR million) | |||||||
Issuer/borrower | Instrument | Currency | Nominal (million) | Final maturity | 30 June 2021 | 30 June 2020 | 31 December 2020 |
Nokia Corporation | 1.00% Senior Notes1 | EUR | 350 | March 2021 | 0 | 350 | 350 |
Nokia Corporation | 3.375% Senior Notes | USD | 500 | June 2022 | 427 | 459 | 417 |
Nokia Corporation | 2.00% Senior Notes | EUR | 750 | March 2024 | 760 | 764 | 762 |
Nokia Corporation | EIB R&D Loan | EUR | 500 | February 2025 | 500 | 500 | 500 |
Nokia Corporation | NIB R&D Loan2 | EUR | 250 | May 2025 | 250 | 250 | 250 |
Nokia Corporation | 2.375% Senior Notes | EUR | 500 | May 2025 | 497 | 496 | 497 |
Nokia Corporation | 2.00% Senior Notes | EUR | 750 | March 2026 | 761 | 763 | 762 |
Nokia Corporation | 4.375% Senior Notes | USD | 500 | June 2027 | 454 | 492 | 448 |
Nokia of America Corporation | 6.50% Senior Notes | USD | 74 | January 2028 | 63 | 66 | 61 |
Nokia Corporation | 3.125% Senior Notes | EUR | 500 | May 2028 | 497 | 497 | 497 |
Nokia of America Corporation | 6.45% Senior Notes | USD | 206 | March 2029 | 175 | 186 | 169 |
Nokia Corporation | 6.625% Senior Notes | USD | 500 | May 2039 | 538 | 596 | 541 |
Nokia Corporation and various subsidiaries | Other liabilities | 141 | 518 | 322 | |||
Total | 5,063 | 5,937 | 5,576 | ||||
1Nokia redeemed EUR 350 million of the 1.00% Senior Notes due March 2021 in February 2021. | |||||||
2The loan from the Nordic Investment Bank (NIB) is repayable in three equal annual installments in 2023, 2024 and 2025. | |||||||
Significant credit facilities and funding programs | |||||||
Utilized (million) | |||||||
Financing arrangement | Committed / uncommitted | Currency | Nominal (million) | 30 June 2021 | 30 June 2020 | 31 December 2020 | |
Revolving Credit Facility1 | Committed | EUR | 1 500 | 0 | 0 | 0 | |
Finnish Commercial Paper Programme | Uncommitted | EUR | 750 | 0 | 20 | 0 | |
Euro-Commercial Paper Programme | Uncommitted | EUR | 1 500 | 0 | 0 | 0 | |
Euro Medium Term Note Programme2 | Uncommitted | EUR | 5 000 | 2,500 | 2,850 | 2,850 | |
1Nokia exercised its option to extend the maturity date of the Revolving Credit Facility in June 2021. Subsequent to the extension, the facility has its maturity in June 2026, except for EUR 88 million having its maturity in June 2024. | |||||||
2All euro-denominated bonds have been issued under the Euro Medium Term Note Programme. | |||||||
All borrowings and credit facilities presented in the tables above are senior unsecured and have no financial covenants. |
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9. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS | |||
EUR million | 30 June 2021 | 30 June 2020 | 31 December 2020 |
Contingent liabilities on behalf of Group companies | |||
Guarantees issued by financial institutions | |||
Commercial guarantees | 1,180 | 1,224 | 1,107 |
Non-commercial guarantees | 446 | 445 | 450 |
Corporate guarantees | |||
Commercial guarantees | 457 | 910 | 453 |
Non-commercial guarantees | 52 | 57 | 53 |
Financing commitments | |||
Customer finance commitments | 42 | 235 | 180 |
Venture fund commitments | 158 | 231 | 189 |
Other contingent liabilities and financing commitments1 | |||
Other guarantees and financing commitments | 8 | 18 | 11 |
1Other contingent liabilities and financing commitments exclude committed lease contracts that have not yet commenced and purchase obligations. Refer to Note 30, Commitments, contingencies and legal proceedings, in the consolidated financial statements for 2020. | |||
The amounts in the table above represent the maximum principal amount of commitments and contingencies, and these amounts do not reflect management's expected outcomes. | |||
Intellectual property rights litigations | |||
In 2019 and 2020, Nokia filed patent infringement lawsuits against Lenovo in four countries, including United States, regarding 19 Nokia patents used in Lenovo's products. Lenovo responded with counterclaims and nullity proceedings, and in 2020, Lenovo filed an action in the United States against Nokia alleging breach of RAND obligations and other claims. In the first quarter of 2021, Nokia concluded a multi-year, multi-technology patent cross-license agreement with Lenovo. The agreement resolves all pending patent litigation and other proceedings between the two parties, in all jurisdictions. Under the agreement, Lenovo will make a net balancing payment to Nokia. | |||
In 2019, Nokia commenced patent infringement proceedings against Daimler in Germany regarding ten Nokia patents relevant to the 3G and 4G cellular standards used in Daimler's connected cars. In 2020, one of the cases was referred to the Court of Justice of the European Union on questions relating to standard essential patent litigation. In the second quarter of 2021, Nokia and Daimler announced that they have signed a patent licensing agreement under which Nokia licenses mobile telecommunications technology to Daimler and receives payment in return. The parties have agreed to settle all pending litigation between Daimler and Nokia, including the complaint by Daimler against Nokia to the European Commission. Invalidation actions brought by Daimler's suppliers and their respective complaints to the European Commission regarding Nokia's licensing practice continue. | |||
On 1 July 2021, Nokia commenced patent infringement proceedings against Oppo, OnePlus and Realme in Asia and Europe. Across actions in 7 countries, more than 30 patents are in suit, covering a mix of cellular standards and technologies such as connectivity, user interface and security. |
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10. PERFORMANCE MEASURES | ||
Certain financial measures presented in this interim report are not measures of financial performance, financial position or cash flows defined in IFRS, and therefore may not be directly comparable with financial measures used by other companies, including those in the same industry. The primary rationale for presenting these measures is that the management uses these measures in assessing the financial performance of Nokia and believes that these measures provide meaningful supplemental information on the underlying business performance. These financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS. The following tables provide summarized information on the performance measures included in this interim report as well as reconciliations of the performance measures to the amounts presented in the financial statements. | ||
Performance measure | Definition | Purpose |
Comparable measures | Comparable measures exclude intangible asset amortization and other purchase price fair value adjustments, goodwill impairments, restructuring related charges and certain other items affecting comparability. Reconciliation of reported and comparable consolidated statement of income is presented below. | We believe that our comparable results provide meaningful supplemental information to both management and investors regarding Nokia's underlying business performance by excluding certain items of income and expenses that may not be indicative of Nokia's business operating results. Comparable operating profit is used also in determining management remuneration. |
Constant currency net sales / Net sales adjusted for currency fluctuations | When net sales are reported on a constant currency basis / adjusted for currency fluctuations, exchange rates used to translate the amounts in local currencies to euro, our reporting currency, are the average actual periodic exchange rates for the comparative financial period. Therefore, the constant currency net sales / net sales adjusted for currency fluctuations exclude the impact of changes in exchange rates during the current period in comparison to euro. | We provide additional information on net sales on a constant currency basis / adjusted for currency fluctuations in order to better reflect the underlying business performance. |
Comparable return on invested capital (ROIC) | Comparable operating profit after tax, last four quarters / Invested capital, average of last five quarters' ending balances. Calculation of comparable return on invested capital is presented below. | Comparable return on invested capital is used to measure how efficiently Nokia uses its capital to generate profits from its operations. |
Comparable operating profit after tax | Comparable operating profit - (comparable operating profit x comparable income tax expense / comparable profit before tax) | Comparable operating profit after tax indicates the profitability of Nokia's underlying business operations after deducting the income tax impact. We use comparable operating profit after tax to calculate comparable return on invested capital. |
Invested capital | Total equity + total interest-bearing liabilities - total cash and current financial investments | Invested capital indicates the book value of capital raised from equity and debt instrument holders less cash and liquid assets held by Nokia. We use invested capital to calculate comparable return on invested capital. |
Total cash and current financial investments ("Total cash") | Total cash and current financial investments consist of cash and cash equivalents and current financial investments. | Total cash and current financial investments is used to indicate funds available to Nokia to run its current and invest in future business activities as well as provide return for security holders. |
Net cash and current financial investments ("Net cash") | Net cash and current financial investments equals total cash and current financial investments less long-term and short-term interest-bearing liabilities. Lease liabilities are not included in interest-bearing liabilities. Reconciliation of net cash and current financial investments to the amounts in the consolidated statement of financial position is presented below. | Net cash and current financial investments is used to indicate Nokia's liquidity position after cash required to settle the interest-bearing liabilities. |
Free cash flow | Net cash from/(used in) operating activities - purchases of property, plant and equipment and intangible assets (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. Reconciliation of free cash flow to the amounts in the consolidated statement of cash flows is presented below. | Free cash flow is the cash that Nokia generates after net investments to tangible, intangible and non-current financial investments and it represents the cash available for distribution among its security holders. It is a measure of cash generation, working capital efficiency and capital discipline of the business. |
Capital expenditure | Purchases of property, plant and equipment and intangible assets (excluding assets acquired under business combinations). | We use capital expenditure to describe investments in profit generating activities in the future. |
Recurring/One-time measures | Recurring measures, such as recurring net sales, are based on revenues that are likely to continue in the future. Recurring measures exclude e.g. the impact of catch-up net sales relating to prior periods. One-time measures, such as one-time net sales, reflect the revenues that are not likely to continue in the future. | We use recurring/one-time measures to improve comparability between financial periods. |
EBITDA | Operating profit/(loss) before depreciations and amortizations and adjusted for share of results of associated companies and joint ventures. | We use EBITDA as a measure of Nokia's operating performance. |
Adjusted profit/(loss) | Adjusted profit/(loss) equals the cash from operations before changes in net working capital subtotal in the consolidated statement of cash flows. | We use adjusted profit/(loss) to provide a structured presentation when describing the cash flows. |
Recurring annual cost savings | Reduction in cost of sales and operating expenses resulting from the cost savings program and the impact of which is considered recurring in nature. | We use recurring annual cost savings measure to monitor the progress of our cost savings program established after the Alcatel-Lucent transaction against plan. |
Restructuring and associated charges, liabilities and cash outflows | Charges, liabilities and cash outflows related to activities that either meet the strict definition of restructuring under IFRS or are closely associated with such activities. | We use restructuring and associated charges, liabilities and cash outflows to measure the progress of our integration and transformation activities. |
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Comparable to reported reconciliation | |||||||||
Q2'21 | Net sales | Cost of sales | Research and development expenses | Selling, general and administrative expenses | Other operating income and expenses | Operating profit/(loss) | Financial income and expenses | Income tax (expense)/ benefit | Profit/(loss) from continuing operations |
EUR million | |||||||||
Comparable | 5,313 | (3,064) | (1,011) | (585) | 29 | 682 | (39) | (104) | 539 |
Restructuring and associated charges | (66) | (33) | (41) | (1) | (141) | 0 | 0 | (141) | |
Amortization of acquired intangible assets | (13) | (84) | (97) | 0 | 20 | (77) | |||
Settlement of legal disputes | 80 | 80 | 0 | 0 | 80 | ||||
Impairment of assets, net of impairment reversals | (3) | (7) | (1) | (21) | (32) | 0 | 0 | (32) | |
Fair value changes of legacy IPR fund | (16) | (16) | 0 | 0 | (16) | ||||
Gain on sale of fixed assets | 8 | 8 | 0 | 0 | 8 | ||||
Change in financial liability to acquire NSB non-controlling interest | 0 | (28) | 0 | (28) | |||||
Deferred tax benefit due to tax rate changes | 0 | 0 | 17 | 17 | |||||
Items affecting comparability | 0 | (70) | (52) | (127) | 51 | (198) | (28) | 38 | (189) |
Reported | 5,313 | (3,133) | (1,063) | (712) | 80 | 484 | (68) | (66) | 350 |
Q2'20 | Net sales | Cost of sales | Research and development expenses | Selling, general and administrative expenses | Other operating income and expenses | Operating profit/(loss) | Financial income and expenses | Income tax (expense)/ benefit | Profit/(loss) from continuing operations |
EUR million | |||||||||
Comparable | 5,093 | (3,076) | (953) | (590) | (50) | 423 | (27) | (87) | 316 |
Restructuring and associated charges | (72) | (31) | (27) | (130) | 0 | 25 | (105) | ||
Amortization of acquired intangible assets | (16) | (90) | (106) | 0 | 23 | (83) | |||
Impairment of assets, net of impairment reversals | (4) | (14) | (2) | (19) | 0 | 4 | (15) | ||
Gain on sale of fixed assets | 1 | 1 | 2 | 1 | |||||
Release of acquisition-related fair value adjustments to deferred revenue and inventory | (1) | (1) | 0 | 0 | 0 | ||||
Change in financial liability to acquire NSB non-controlling interest | 0 | 15 | 0 | 15 | |||||
Legal entity restructuring | 0 | (45) | (45) | ||||||
Items affecting comparability | (1) | (75) | (59) | (119) | 0 | (253) | 15 | 7 | (231) |
Reported | 5,092 | (3,151) | (1,013) | (709) | (50) | 170 | (11) | (80) | 85 |
Q1-Q2'21 | Net sales | Cost of sales | Research and development expenses | Selling, general and administrative expenses | Other operating income and expenses | Operating profit/(loss) | Financial income and expenses | Income tax (expense)/ benefit | Profit/(loss) from continuing operations |
EUR million | |||||||||
Comparable | 10,389 | (6,200) | (1,985) | (1,137) | 166 | 1,234 | (91) | (224) | 914 |
Amortization of acquired intangible assets | (27) | (167) | (194) | 41 | (153) | ||||
Restructuring and associated charges | (80) | (41) | (55) | (1) | (177) | (177) | |||
Settlement of legal disputes | 80 | 80 | 80 | ||||||
Impairment of assets, net of impairment reversals | (4) | (7) | (2) | (21) | (33) | (33) | |||
Gain on sale of fixed assets | 23 | 23 | 23 | ||||||
Fair value changes of legacy IPR fund | (16) | (16) | (16) | ||||||
Costs associated with contract exit | (1) | (1) | (1) | ||||||
Change in financial liability to acquire NSB non-controlling interest | 0 | (32) | (32) | ||||||
Deferred tax benefit due to tax rate changes | 0 | 17 | 17 | ||||||
Items affecting comparability | 0 | (85) | (75) | (224) | 66 | (318) | (32) | 58 | (292) |
Reported | 10,389 | (6,285) | (2,060) | (1,360) | 232 | 916 | (123) | (166) | 622 |
Q1-Q2'20 | Net sales | Cost of sales | Research and development expenses | Selling, general and administrative expenses | Other operating income and expenses | Operating profit/(loss) | Financial income and expenses | Income tax (expense)/ benefit | Profit/(loss) from continuing operations |
EUR million | |||||||||
Comparable | 10,007 | (6,203) | (1,928) | (1,262) | (75) | 539 | (93) | (100) | 348 |
Restructuring and associated charges | (122) | (50) | (46) | (217) | 42 | (175) | |||
Amortization of acquired intangible assets | (28) | (179) | (207) | 47 | (160) | ||||
Impairment of assets, net of impairment reversals | (4) | (14) | (2) | (20) | 4 | (16) | |||
Gain on sale of fixed assets | 1 | 1 | 2 | 1 | |||||
Release of acquisition-related fair value adjustments to deferred revenue and inventory | (1) | (1) | (1) | ||||||
Costs associated with contract exit | 1 | 1 | 1 | ||||||
Transaction and related costs, including integration costs | (1) | (1) | (1) | ||||||
Change in financial liability to acquire NSB non-controlling interest | 0 | 32 | 32 | ||||||
Legal entity restructuring | 0 | (45) | (45) | ||||||
Items affecting comparability | (1) | (125) | (92) | (227) | 0 | (445) | 32 | 49 | (364) |
Reported | 10,005 | (6,328) | (2,019) | (1,489) | (76) | 94 | (61) | (51) | (16) |
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Net cash and current financial investments | ||||||
EUR million | 30 June 2021 | 31 March 2021 | 31 December 2020 | 30 September 2020 | 30 June 2020 | |
Current financial investments | 1,499 | 1,527 | 1,121 | 796 | 399 | |
Cash and cash equivalents | 7,252 | 7,315 | 6,940 | 6,836 | 7,088 | |
Total cash and current financial investments | 8,751 | 8,842 | 8,061 | 7,632 | 7,487 | |
Long-term interest-bearing liabilities1 | 4,504 | 5,039 | 5,015 | 5,099 | 5,181 | |
Short-term interest-bearing liabilities1 | 559 | 114 | 561 | 664 | 756 | |
Total interest-bearing liabilities | 5,063 | 5,153 | 5,576 | 5,763 | 5,937 | |
Net cash and current financial investments | 3,688 | 3,689 | 2,485 | 1,869 | 1,550 | |
1Lease liabilities are not included in interest-bearing liabilities. | ||||||
Free cash flow | ||||||
EUR million | Q2'21 | Q2'20 | Q1-Q2'21 | Q1-Q2'20 | ||
Net cash from operating activities | 106 | 333 | 1,410 | 467 | ||
Purchase of property, plant and equipment and intangible assets | (113) | (89) | (272) | (243) | ||
Proceeds from sale of property, plant and equipment and intangible assets | 16 | 1 | 48 | 2 | ||
Purchase of non-current financial investments | (16) | (14) | (42) | (24) | ||
Proceeds from sale of non-current financial investments | 84 | 34 | 133 | 57 | ||
Free cash flow | 77 | 265 | 1,277 | 259 | ||
Comparable return on invested capital (ROIC) | ||||||
Q2'21 | ||||||
EUR million | Rolling four quarters | Q2'21 | Q1'21 | Q4'20 | Q3'20 | |
Comparable operating profit | 2,776 | 682 | 551 | 1,056 | 486 | |
Comparable profit before tax | 2,608 | 643 | 495 | 1,063 | 407 | |
Comparable income tax expense | (606) | (104) | (120) | (279) | (103) | |
Comparable operating profit after tax | 2,131 | 572 | 417 | 779 | 363 | |
EUR million | Average | 30 June 2021 | 31 March 2021 | 31 December 2020 | 30 September 2020 | 30 June 2020 |
Total equity | 14,238 | 14,337 | 13,771 | 12,545 | 15,220 | 15,319 |
Total interest-bearing liabilities | 5,498 | 5,063 | 5,153 | 5,576 | 5,763 | 5,937 |
Total cash and current financial investments | 8,155 | 8,751 | 8,842 | 8,061 | 7,632 | 7,487 |
Invested capital | 11,581 | 10,649 | 10,082 | 10,060 | 13,351 | 13,769 |
Comparable ROIC | 18.4% | |||||
Q1'21 | ||||||
EUR million | Rolling four quarters | Q1'21 | Q4'20 | Q3'20 | Q2'20 | |
Comparable operating profit | 2,517 | 551 | 1,056 | 486 | 423 | |
Comparable profit before tax | 2,368 | 495 | 1,063 | 407 | 403 | |
Comparable income tax expense | (589) | (120) | (279) | (103) | (87) | |
Comparable operating profit after tax | 1,891 | 417 | 779 | 363 | 332 | |
EUR million | Average | 31 March 2021 | 31 December 2020 | 30 September 2020 | 30 June 2020 | 31 March 2020 |
Total equity | 14,572 | 13,771 | 12,545 | 15,220 | 15,319 | 16,004 |
Total interest-bearing liabilities | 5,485 | 5,153 | 5,576 | 5,763 | 5,937 | 4,995 |
Total cash and current financial investments | 7,667 | 8,842 | 8,061 | 7,632 | 7,487 | 6,315 |
Invested capital | 12,390 | 10,082 | 10,060 | 13,351 | 13,769 | 14,684 |
Comparable ROIC | 15.3% | |||||
Q2'20 | ||||||
EUR million | Rolling four quarters | Q2'20 | Q1'20 | Q4'19 | Q3'19 | |
Comparable operating profit | 2,151 | 423 | 116 | 1,134 | 478 | |
Comparable profit before tax | 1,924 | 403 | 45 | 1,108 | 368 | |
Comparable income tax expense | (488) | (87) | (12) | (288) | (101) | |
Comparable operating profit after tax | 1,605 | 332 | 85 | 839 | 347 | |
EUR million | Average | 30 June 2020 | 31 March 2020 | December 31, 2019 | 30 September 2019 | June 30, 2019 |
Total equity | 15,107 | 15,319 | 16,004 | 15,401 | 14,425 | 14,386 |
Total interest-bearing liabilities | 4,795 | 5,937 | 4,995 | 4,277 | 4,480 | 4,286 |
Total cash and current financial investments | 5,884 | 7,487 | 6,315 | 6,007 | 4,824 | 4,788 |
Invested capital | 14,018 | 13,769 | 14,684 | 13,671 | 14,081 | 13,884 |
Comparable ROIC | 11.4% |
&1#&"Arial"&8&K001753Nokia internal use
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Nokia Oyj published this content on 29 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 08:36:07 UTC.