Group Full P&L
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.
OCI
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.
BS
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.
CF
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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Sh Eq
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.

&1#&"Arial"&8&K001753Nokia internal use

Notes
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.

&1#&"Arial"&8&K001753Nokia internal use

Segment Description
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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&1#&"Arial"&8&K001753Nokia internal use

Segment P&L
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 to Group
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

NS by Geo
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

Pensions
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

Deferred Taxes
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

FV of Fin. Instruments
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.

&1#&"Arial"&8&K001753Nokia internal use

Provisions
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.

&1#&"Arial"&8&K001753Nokia internal use

Interest-bearing Liabilities
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.

&1#&"Arial"&8&K001753Nokia internal use

Commitments
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.

&1#&"Arial"&8&K001753Nokia internal use

Performance Measures
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.

&1#&"Arial"&8&K001753Nokia internal use

Performance measures table 1
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)

&1#&"Arial"&8&K001753Nokia internal use

Performance measures table 2
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.