Nokia Q2 2009 net sales EUR 9.9 billion, non-IFRS EPS EUR 0.15
(reported EPS EUR 0.10)>
Nokia Q2 2009 net sales EUR 9.9 billion, non-IFRS EPS EUR 0.15 (reported EPS EUR 0.10)
(Thomson Reuters ONE) - Corporate news announcement processed and transmitted by Hugin AS.The issuer is solely responsible for the content of this announcement. ------------------------------------------------------------------------------------ Non-IFRS operating margin in Devices & Services up sequentially to12.2% (reported 11.6%)Nokia CorporationInterim ReportJuly 16, 2009 at 13.00 (CET +1)The complete press release with tables is available at:http://www.nokia.com/results/Nokia_results2009Q2e.pdf+-------------------------------------------------------------------+| | || | Non-IFRS second quarter 2009 results1,2,3 ||-------------------+-----------------------------------------------|| | | | YoY | | QoQ ||-------------------+---------+---------+--------+---------+--------|| EUR million | Q2/2009 | Q2/2008 | Change | Q1/2009 | Change ||-------------------+---------+---------+--------+---------+--------|| Net sales | 9 913 | 13 155 | -24.6% | 9 276 | 6.9% ||-------------------+---------+---------+--------+---------+--------|| Devices & | | | | | || Services | 6 586 | 9 090 | -27.5% | 6 173 | 6.7% ||-------------------+---------+---------+--------+---------+--------|| NAVTEQ | 148 | | | 134 | 10.4% ||-------------------+---------+---------+--------+---------+--------|| Nokia Siemens | | | | | || Networks | 3 199 | 4 071 | -21.4% | 2 990 | 7.0% ||-------------------+---------+---------+--------+---------+--------|| | | | | | ||-------------------+---------+---------+--------+---------+--------|| Operating profit | 775 | 2 054 | -62.3% | 514 | 50.8% ||-------------------+---------+---------+--------+---------+--------|| Devices & | | | | | || Services | 802 | 1 824 | -56.0% | 642 | 24.9% ||-------------------+---------+---------+--------+---------+--------|| NAVTEQ | 19 | | | 5 | 280.0% ||-------------------+---------+---------+--------+---------+--------|| Nokia Siemens | | | | | || Networks | 2 | 274 | -99.3% | -122 | ||-------------------+---------+---------+--------+---------+--------|| | | | | | ||-------------------+---------+---------+--------+---------+--------|| Operating margin | 7.8% | 15.6% | | 5.5% | ||-------------------+---------+---------+--------+---------+--------|| Devices & | | | | | || Services | 12.2% | 20.1% | | 10.4% | ||-------------------+---------+---------+--------+---------+--------|| NAVTEQ | 12.8% | | | 3.7% | ||-------------------+---------+---------+--------+---------+--------|| Nokia Siemens | | | | | || Networks | 0.1% | 6.7% | | -4.1% | ||-------------------+---------+---------+--------+---------+--------|| | | | | | ||-------------------+---------+---------+--------+---------+--------|| EPS, EUR Diluted | 0.15 | 0.37 | -59.5% | 0.10 | 50.0% ||-------------------+--------------------------------------+--------|| | | ||-------------------+-----------------------------------------------|| | || | Reported second quarter 2009 results1,3 ||-------------------+-----------------------------------------------|| | | | YoY | | QoQ ||-------------------+---------+---------+--------+---------+--------|| EUR million | Q2/2009 | Q2/2008 | Change | Q1/2009 | Change ||-------------------+---------+---------+--------+---------+--------|| Net sales | 9 912 | 13 151 | -24.6% | 9 274 | 6.9% ||-------------------+---------+---------+--------+---------+--------|| Devices & | | | | | || Services | 6 586 | 9 090 | -27.5% | 6 173 | 6.7% ||-------------------+---------+---------+--------+---------+--------|| NAVTEQ | 147 | | | 132 | 11.4% ||-------------------+---------+---------+--------+---------+--------|| Nokia Siemens | | | | | || Networks | 3 199 | 4 067 | -21.3% | 2 990 | 7.0% ||-------------------+---------+---------+--------+---------+--------|| | | | | | ||-------------------+---------+---------+--------+---------+--------|| Operating profit | 427 | 1 474 | -71.0% | 55 | 676.4% ||-------------------+---------+---------+--------+---------+--------|| Devices & | | | | | || Services | 763 | 1 565 | -51.2% | 547 | 39.5% ||-------------------+---------+---------+--------+---------+--------|| NAVTEQ | -100 | | | -120 | -16.7% ||-------------------+---------+---------+--------+---------+--------|| Nokia Siemens | | | | | || Networks | -188 | -47 | 300.0% | -361 | -47.9% ||-------------------+---------+---------+--------+---------+--------|| | | | | | ||-------------------+---------+---------+--------+---------+--------|| Operating margin | 4.3% | 11.2% | | 0.6% | ||-------------------+---------+---------+--------+---------+--------|| Devices & | | | | | || Services | 11.6% | 17.2% | | 8.9% | ||-------------------+---------+---------+--------+---------+--------|| NAVTEQ | -68.0% | | | -90.9% | ||-------------------+---------+---------+--------+---------+--------|| Nokia Siemens | | | | | || Networks | -5.9% | -1.2% | | -12.1% | ||-------------------+---------+---------+--------+---------+--------|| | | | | | ||-------------------+---------+---------+--------+---------+--------|| EPS, EUR Diluted | 0.10 | 0.29 | -65.5% | 0.03 | 233.3% |+-------------------------------------------------------------------+Note 1 relating to NAVTEQ: On July 10, 2008, Nokia completed theacquisition of NAVTEQ Corporation. NAVTEQ is a separate reportablesegment of Nokia starting from the third quarter 2008. Accordingly,the results of NAVTEQ are not available for the prior periods.Note 2 relating to non-IFRS results: Non-IFRS results exclude specialitems for all periods. In addition, non-IFRS results excludeintangible asset amortization, other purchase price accountingrelated items and inventory value adjustments arising from i) theformation of Nokia Siemens Networks and ii) all business acquisitionscompleted after June 30, 2008. More specific information about theexclusions from the non-IFRS results may be found in this pressrelease on pages 3, 10 and 13-17.Nokia believes that these non-IFRS financial measures providemeaningful supplemental information to both management and investorsregarding Nokia's performance by excluding the above-described itemsthat may not be indicative of Nokia's business operating results.These non-IFRS financial measures should not be viewed in isolationor as substitutes to the equivalent IFRS measure(s), but should beused in conjunction with the most directly comparable IFRS measure(s)in the reported results. A reconciliation of the non-IFRS results toour reported results for Q2 2009 and Q2 2008 can be found in thetables on pages 10 and 13-17 of this press release. A reconciliationof our Q1 2009 non-IFRS results can be found on pages 12-16 of our Q12009 Interim Report of April 16, 2009.Note 3: Nokia reported net sales were EUR 19 186 million and earningsper share (diluted) were EUR 0.13 for the period from January 1 toJune 30, 2009. Further information about the results for the periodfrom January 1 to June 30, 2009 can be found in this press release onpages 9, 11, and 18-23.SECOND QUARTER 2009 HIGHLIGHTS- Nokia net sales of EUR 9.9 billion, down 25% year on year and up 7%sequentially (down 24% and up 7% at constant currency).- Devices & Services net sales of EUR 6.6 billion, down 28% year onyear and up 7% sequentially (down 28% and up 7% at constantcurrency), and non-IFRS operating margin of 12.2% (20.1% in Q2 2008).- Devices & Services gross margin of 34.0%, up from 33.8% in Q1 2009.- Services net sales of EUR 140 million (billings of EUR 207million). Due to the divestment of the security appliance business inApril 2009, services net sales are not directly comparable to priorperiods.- Estimated industry mobile device volumes of 268 million units, down12% year on year and up 5% sequentially.- Nokia mobile device volumes of 103.2 million units, down 15% yearon year and up 11% sequentially.- Nokia estimated mobile device market share of 38% in Q2 2009, downfrom 40% in Q2 2008 and up from 37% in Q1 2009.- Nokia mobile device ASP of EUR 62, down from EUR 65 in Q1 2009.- NAVTEQ net sales of EUR 147 million, up 11% sequentially, andnon-IFRS operating margin of 12.8% (3.7% in Q1 2009)- Nokia Siemens Networks net sales of EUR 3.2 billion, down 21% yearon year and up 7% sequentially (down 20% and up 8% at constantcurrency), and non-IFRS operating margin of 0.1% (6.7% in Q2 2008)- Nokia operating cash flow of EUR 716 million.- Total cash and other liquid assets of EUR 7.0 billion at the end ofQ2 2009.OLLI-PEKKA KALLASVUO, NOKIA CEO:"Nokia put in a solid performance in what was another tough quarter.We increased our share of the global mobile device marketsequentially to an estimated 38% and grew our smartphone market shareto an estimated 41%. As a result of strong operational execution,underlying operating margins improved sequentially in all segments.Competition remains intense, but demand in the overall mobile devicemarket appears to be bottoming out. As before, we are continuing totightly manage our operating expenses.We are balancing short-term priorities with our longer-term growthambitions as elements of the mobile handset, PC, internet and mediaindustries converge to form a new industry. Consumers willincreasingly expect devices and services designed as integratedsolutions. To capture this opportunity we are accelerating ourstrategic transformation into a solutions company."INDUSTRY AND NOKIA OUTLOOK- Nokia expects industry mobile device volumes in the third quarter2009 to be at approximately the same level or up slightlysequentially.- Nokia expects its mobile device market share in the third quarter2009 to be approximately at the same level sequentially.- Nokia continues to expect 2009 industry mobile device volumes todecline approximately 10% from 2008 levels.- Nokia now expects its market share in mobile devices to beapproximately flat in 2009, compared with 2008. This is an update toNokia's earlier target to increase its market share in mobile devicesin 2009.- Nokia now expects its non-IFRS operating margin in Devices &Services in the second half 2009 to be at approximately the samelevel as in the first half 2009. This is an update to Nokia's earliertarget for the non-IFRS operating margin in Devices & Services to bein the teens for the second half 2009.- Nokia and Nokia Siemens Networks continue to expect the mobileinfrastructure and fixed infrastructure and related services marketto decline approximately 10% in Euro terms in 2009, from 2008 levels.- Nokia and Nokia Siemens Networks now expect Nokia Siemens Networksmarket share to decline moderately in 2009, compared to 2008, with astrong performance in its Services business unit expected to beoffset by declines in certain product businesses. This is an updateto Nokia and Nokia Siemens Networks earlier target for Nokia SiemensNetworks market share to remain constant in 2009, compared to 2008.SECOND QUARTER 2009 FINANCIAL HIGHLIGHTS(Comparisons are given to the second quarter 2008, unless otherwiseindicated.)The non-IFRS results exclusionsQ2 2009 - EUR 348 million (net) consisting of:- EUR 22 million of impairment of intangible assets in Devices &Services- EUR 83 million restructuring charge in Devices & Services- EUR 68 million gain on sale of security appliance business inDevices & Services- EUR 69 million restructuring charge and other one-time items inNokia Siemens Networks- EUR 121 million of intangible assets amortization and otherpurchase price related items arising from the formation of NokiaSiemens Networks- EUR 119 million of intangible assets amortization and otherpurchase price related items arising from the acquisition of NAVTEQ- EUR 2 million of intangible assets amortization and other purchaseprice related items arising from the acquisition of OZ Communicationsin Devices & ServicesQ1 2009 - EUR 459 million consisting of:- EUR 34 million of impairment of intangible assets in Devices &Services- EUR 59 million restructuring charge in Devices & Services- EUR 123 million restructuring charge and other one-time items inNokia Siemens Networks- EUR 116 million of intangible assets amortization and otherpurchase price related items arising from the formation of NokiaSiemens Networks- EUR 125 million of intangible assets amortization and otherpurchase price related items arising from the acquisition of NAVTEQ- EUR 2 million of intangible assets amortization and other purchaseprice related items arising from the acquisition of OZ Communicationsin Devices & ServicesQ2 2008 - EUR 580 million consisting of:- EUR 259 million of charges related to closure of the Bochum site inGermany in Devices & Services- EUR 201 million restructuring charge and other one-time items inNokia Siemens Networks- EUR 120 million of intangible assets amortization and otherpurchase price related items arising from the formation of NokiaSiemens NetworksNon-IFRS results exclude special items for all periods. In addition,non-IFRS results exclude intangible asset amortization, otherpurchase price accounting related items and inventory valueadjustments arising from i) the formation of Nokia Siemens Networksand ii) all business acquisitions completed after June 30, 2008.Nokia GroupNokia's second quarter 2009 net sales decreased 25% to EUR 9.9billion, compared with EUR 13.2 billion in the second quarter 2008.At constant currency, Group net sales would have decreased 24% yearon year and increased 7% sequentially.The following chart sets out the year on year and sequential growthrates in our net sales on a reported basis and at constant currencyfor the periods indicated.+-------------------------------------------------------------------+| NOKIA SECOND QUARTER 2009 NET SALES ||-------------------------------------------------------------------|| Reported & Constant Currency1 ||-------------------------------------------------------------------|| | Q2/2009 | Q2/2009 || | vs. | vs. ||-------------------------------------| Q2/2008 | Q1/2009 || | Change | Change ||-------------------------------------+--------------+--------------|| | | ||-------------------------------------+--------------+--------------|| Group net sales - reported | -25% | 7% ||-------------------------------------+--------------+--------------|| Group net sales - constant | | || currency1 | -24% | 7% ||-------------------------------------+--------------+--------------|| | | ||-------------------------------------+--------------+--------------|| Devices & Services net sales - | | || reported | -28% | 7% ||-------------------------------------+--------------+--------------|| Devices & Services net sales - | | || constant currency1 | -28% | 7% ||-------------------------------------+--------------+--------------|| | | ||-------------------------------------+--------------+--------------|| Nokia Siemens Networks net sales - | | || reported | -21% | 7% ||-------------------------------------+--------------+--------------|| Nokia Siemens Networks net sales - | | || constant currency1 | -20% | 8% ||-------------------------------------+--------------+--------------|| | | ||-------------------------------------------------------------------|| Note 1: Change in net sales at constant currency excludes the || impact of changes in exchange rates in comparison to the Euro, || our reporting currency. |+-------------------------------------------------------------------+Nokia's second quarter 2009 reported operating profit decreased 71%to EUR 427 million, compared with EUR 1.5 billion in the secondquarter 2008. Nokia's second quarter 2009 non-IFRS operating profitdecreased 62% to EUR 775 million, compared with EUR 2.1 billion inthe second quarter 2008. Nokia's second quarter 2009 reportedoperating margin was 4.3% (11.2%). Nokia's second quarter 2009non-IFRS operating margin was 7.8% (15.6%).Operating cash flow for the second quarter 2009 was EUR 716 million.Operating cash flow for the second quarter 2008 was EUR 1.5 billion.Total cash and other liquid assets were EUR 7.0 billion at June 30,2009, compared with EUR 8.0 billion at June 30, 2008. At June 30,2009, Nokia's net debt-equity ratio (gearing) was -10%, compared with-47% at June 30, 2008.Devices & ServicesIn the second quarter 2009, the total mobile device volumes of ourDevices & Services group were 103.2 million units, representing adecline of 15% year on year and an 11% increase sequentially. Theoverall industry mobile device volumes for the same period were 268million units based on Nokia's preliminary estimate, representing a12% year on year decrease and a 5% sequential increase. The lowerdevice volumes year on year for Nokia and the industry continued tobe driven by the negative impact of the deteriorated global economicconditions, including weaker consumer and corporate spending,constrained credit availability and currency market volatility. Thesequential industry device volume increase primarily reflectedseasonality in the second quarter. Nokia volumes also benefitedsequentially from a more stable inventory situation in the operatorand distributor channels. Nokia's mobile device market share was anestimated 38% in the second quarter 2009, down from 40% in the secondquarter 2008 and up from 37% in the first quarter 2009.Of the total industry mobile device volumes, converged mobile deviceindustry volumes in the second quarter 2009 increased to 41.0 millionunits, based on Nokia's preliminary estimate, compared with anestimated 37.1 million units in the second quarter 2008, and 36.0million units in the first quarter 2009. Our own converged mobiledevice volumes were 16.9 million units in the second quarter 2009,compared with 15.3 million units in the second quarter 2008 and 13.7million units in the first quarter 2009. Nokia's share of theconverged device market was an estimated 41% in the second quarter2009, unchanged from 41% in the second quarter 2008 and up from 39%in the first quarter 2009. We shipped 4.6 million Nokia Nseries and4.7 million Nokia Eseries devices during the second quarter 2009, upfrom the combined 8.2 million Nseries and Eseries devices we shippedin the first quarter 2009.The following chart sets out our mobile device volumes for theperiods indicated, as well as the year on year and sequential growthrates, by geographic area.+-------------------------------------------------------------------+| NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA ||-------------------------------------------------------------------|| | | | YoY | | QoQ || (million units) | Q2/2009 | Q2/2008 | Change | Q1/2009 | Change ||-------------------+---------+---------+--------+---------+--------|| Europe | 23.3 | 27.1 | -14.0% | 22.3 | 4.5% ||-------------------+---------+---------+--------+---------+--------|| Middle East & | | | | | || Africa | 18.9 | 21.1 | -10.4% | 14.8 | 27.7% ||-------------------+---------+---------+--------+---------+--------|| Greater China | 18.6 | 17.6 | 5.7% | 17.9 | 3.9% ||-------------------+---------+---------+--------+---------+--------|| Asia-Pacific | 30.3 | 36.4 | -16.8% | 28.2 | 7.4% ||-------------------+---------+---------+--------+---------+--------|| North America | 3.2 | 4.5 | -28.9% | 3.4 | -5.9% ||-------------------+---------+---------+--------+---------+--------|| Latin America | 8.9 | 15.3 | -41.8% | 6.6 | 34.8% ||-------------------+---------+---------+--------+---------+--------|| Total | 103.2 | 122.0 | -15.4% | 93.2 | 10.7% |+-------------------------------------------------------------------+Based on our preliminary market estimate, Nokia's mobile devicemarket share for the second quarter 2009 was 38%, compared with 40%in the second quarter 2008 and 37% in the first quarter 2009. Ouryear on year market share decline was driven primarily by lowermarket share in Latin America, Asia-Pacific and North America. Thiswas partially offset by a slightly higher market share in GreaterChina, Europe and Middle East & Africa. Sequentially, our marketshare declined in North America, but this decline was more thanoffset by our increased market share in Middle East & Africa, GreaterChina, Europe, Asia-Pacific and Latin America.Our mobile device average selling price (ASP) in the second quarter2009 was EUR 62, down from EUR 74 in the second quarter 2008 and EUR65 in the first quarter 2009. Both the year on year and sequentialASP declines were primarily due to general price pressure and ahigher proportion of sales of lower priced products. Our secondquarter 2009 ASP benefited from sales of new high-end products,compared to the first quarter 2009.Second quarter 2009 Devices & Services net sales declined 28% to EUR6.6 billion, compared with EUR 9.1 billion in the second quarter2008. Devices & Services net sales were down year on year in allgeographic areas. At constant currency, Devices & Services net saleswould have decreased 28%. The net sales decline resulted primarilyfrom lower volumes, combined with the ASP decline, compared with thesecond quarter 2008. Of our total Devices & Services net sales,services contributed EUR 140 million in the second quarter 2009,representing 18% year on year growth and a 7% sequential decrease.Nokia completed the divestment of its security appliances business inApril 2009 and accordingly services net sales for periods from April1, 2009 are not directly comparable to services net sales of anyprior periods.Devices & Services reported gross profit and non-IFRS gross profitdecreased 32% to EUR 2.2 billion, compared with EUR 3.3 billion inthe second quarter 2008, with a reported and non-IFRS gross margin of34.0% (36.1%). The year on year gross margin decrease was primarilydue to a higher proportion of sales of lower end, lower margindevices and a lower proportion of sales of new high-end, highermargin devices, as well as general price pressure.Devices & Services reported operating profit decreased 51% to EUR 763million, compared with EUR 1.6 billion in the second quarter 2008,with a reported operating margin of 11.6% (17.2%). Devices & Servicesnon-IFRS operating profit decreased 56% to EUR 802 million, comparedwith EUR 1.8 billion in the second quarter 2008, with a non-IFRSoperating margin of 12.2% (20.1%). The 56% year on year decrease innon-IFRS operating profit for the second quarter 2009 was dueprimarily to lower net sales compared with the second quarter 2008.The impact of lower net sales was somewhat mitigated by a reductionin our cost of sales and operating expenses during the second quarter2009.NAVTEQ(Comparisons are given to the first quarter 2009)Second quarter 2009 NAVTEQ net sales increased 11% sequentially toEUR 147 million, compared with EUR 132 million in the first quarter2009, reflecting a slight pick-up in demand for auto navigationsystems. NAVTEQ reported gross profit was EUR 126 million (EUR 116million), with a gross margin of 85.7% (87.5%). Non-IFRS gross profitwas EUR 127 million (EUR 117 million), with a non-IFRS gross marginof 85.8% (87.3%). NAVTEQ had a reported operating loss of EUR 100million (EUR 120 million loss). The reported operating margin was-68.0% (-90.9%). NAVTEQ non-IFRS operating profit was EUR 19 million(EUR 5 million), with a non-IFRS operating margin of 12.8% (3.7%).Nokia Siemens NetworksSecond quarter 2009 net sales decreased 21% to EUR 3.2 billion,compared with EUR 4.1 billion in the second quarter 2008, reflectingchallenging market conditions and competitive factors. At constantcurrency, Nokia Siemens Networks net sales would have decreased 20%.The following chart sets out Nokia Siemens Networks net sales for theperiods indicated, as well as the year on year and sequential growthrates, by geographic area.+-------------------------------------------------------------------+| NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA || ||-------------------------------------------------------------------|| | | | YoY | | QoQ || EUR million | Q2/2009 | Q2/2008 | Change | Q1/2009 | Change ||-------------------+---------+---------+--------+---------+--------|| Europe | 1 209 | 1 412 | -14.4% | 1 097 | 10.2% ||-------------------+---------+---------+--------+---------+--------|| Middle East & | | | | | || Africa | 459 | 553 | -17.0% | 436 | 5.3% ||-------------------+---------+---------+--------+---------+--------|| Greater China | 353 | 413 | -14.5% | 284 | 24.3% ||-------------------+---------+---------+--------+---------+--------|| Asia-Pacific | 648 | 1 076 | -39.8% | 692 | -6.4% ||-------------------+---------+---------+--------+---------+--------|| North America | 208 | 158 | 31.6% | 169 | 23.1% ||-------------------+---------+---------+--------+---------+--------|| Latin America | 322 | 455 | -29.2% | 312 | 3.2% ||-------------------+---------+---------+--------+---------+--------|| Total | 3 199 | 4 067 | -21.3% | 2 990 | 7.0% |+-------------------------------------------------------------------+Nokia Siemens Networks reported gross profit decreased 25% to EUR 860million, compared with EUR 1.1 billion in the second quarter 2008,with a gross margin of 26.9% (28.2%). Nokia Siemens Networks non-IFRSgross profit decreased 30% to EUR 897 million, compared with EUR 1.3billion in the second quarter 2008, with a non-IFRS gross margin of28.0% (31.5%). The lower year on year non-IFRS gross profit in thesecond quarter 2009 was due primarily to lower year on year netsales.Nokia Siemens Networks had a second quarter 2009 reported operatingloss of EUR 188 million compared with an operating loss of EUR 47million in the second quarter 2008, with an operating margin of -5.9%(-1.2%). Nokia Siemens Networks non-IFRS operating profit was EUR 2million in the second quarter 2009, compared with a non-IFRSoperating profit of EUR 274 million in the second quarter 2008, witha non-IFRS operating margin of 0.1% (6.7%). The year on year declinein Nokia Siemens Networks non-IFRS operating profit primarilyreflected lower net sales.Q2 2009 OPERATING HIGHLIGHTSDevices & Services- Nokia continued to take action to adjust its business operationsand cost base in accordance with market demand as well as seeksavings in operational expenses, looking at all areas and activitiesacross Devices & Services and global support functions:- Nokia announced plans to streamline its Services organization,including measures that are targeted to open up greater opportunitiesfor third party partner services. Approximately 450 employeesglobally are affected by the plans.- Nokia announced plans to improve cost-efficiency in logistics,production management and production support operations, withapproximately 170 employees globally affected.- Nokia announced a targeted voluntary resignation package for up to320 employees at its mobile device manufacturing facility in Salo,Finland. The scheme was fully subscribed.- Nokia commenced shipments of the Nokia N97, its flagship smartphoneand the first device to ship with the integrated Ovi Store, aone-stop-shop for applications and content for millions of Nokiadevice users and another critical element of our evolving Oviinternet services offering. Ovi Store launched in late May and by theend of the quarter it had attracted downloads from people in morethan 180 countries.- In the area of music, Nokia benefited from the continued strongperformance by the Nokia 5800 XpressMusic, its first mass markettouch product, which shipped 3.7 million units during the quarter.More than 6.8 million units have shipped since the device beganshipping in late November last year. During the second quarter, Nokiafurther strengthened its offering of devices optimized for music,announcing the Nokia 5530 XpressMusic, a compact touch-screen device.Nokia also extended its Comes With Music service - an'all-you-can-eat' music offer where users can download freelymillions of tracks for a pre-defined period of time and keep thosetracks once the period is up - to Brazil, Germany, Italy, Mexico,Sweden and Switzerland. Additionally, Nokia extended Nokia MusicStore, with the chain of digital music stores now covering 21countries in total.- Nokia Messaging, Nokia's consumer email service, continued to gaintraction among operators with six new agreements announced in thesecond quarter. By the end of the quarter, Nokia Messaging wasavailable to Nokia users in more than 40 countries. Additionally, bythe end of the quarter, approximately 600 000 people had activated anOvi Mail account. Ovi Mail is an email solution developed especiallyfor consumers in emerging markets.- Nokia started shipments of the Nokia E75, its flagship emaildevice, and the Nokia N86 8MP, its flagship imaging device. Nokiaalso announced the Nokia E72, its latest full QWERTY smartphone andthe successor to the highly popular Nokia E71. Cumulative shipmentsof the Nokia E71 reached 5 million during the quarter.- Nokia made Nokia Life Tools commercially available across India.Nokia Life Tools is an innovative offering of agricultureinformation, education and entertainment services targeted atnon-urban consumers in emerging markets. Nokia Life Tools isavailable on the new Nokia 2330 classic and the Nokia 2323 classic,and will also be made available on other enabled devices.- Nokia announced the Nokia 6216 classic, its first SIM-based NearField Communication (NFC) device which enables operators to build NFCservices on to the SIM card.- Nokia commenced shipments of its first 3G mobile device in Korea.The 6210s is a competitively priced smartphone with a slide formfactor and is available through local operator KTF.- Nokia expanded its network of research laboratories with theopening of Nokia Research Center, Berkeley, in California in theUnited States.- Nokia and Intel Corporation announced that they will work togetherto develop a new class of Intel® Architecture-based mobile computingdevice and chipset architectures that will combine the performance ofpowerful computers with high-bandwidth mobile broadbandcommunications and ubiquitous Internet connectivity. The twocompanies share a vision of a new class of standards-based mobilecomputing platforms that provide an always-on, always-connectedexperience and offer the performance to deliver PC-like Internetexperiences across a new class of services.NAVTEQ- NAVTEQ announced the availability of dynamic content delivery forHD Radio(TM) systems in North America, accelerating the delivery ofcontent including traffic, weather and fuel prices.- NAVTEQ launched NAVTEQ LocationPoint(TM), a location-basedadvertising service for mobile devices, in several Europeancountries.- NAVTEQ announced the availability of Motorway Junction Objects,which enables navigation systems to display full 3D animation ofcomplex junctions, in Australia with expansion planned to include theUnited States and Europe.- NAVTEQ announced a contract extension with MSN® Direct for NAVTEQTraffic(TM), supporting Microsoft's Live Search Maps web-basedservice and as part of the MSN Direct connected services bundle.- NAVTEQ announced that it has signed an agreement with SamsungElectronics providing access to all countries in the NAVTEQ databaseas well as NAVTEQ's Visual Content, Speed Limits, Extended Lanes andNAVTEQ Discover Cities(TM).Nokia Siemens Networks- In June, Nokia Siemens Networks reached an agreement to acquireCDMA and LTE assets from Nortel in a USD 650 million transaction thatremains subject to the approvals of the relevant bankruptcy courts inNorth America as well as customary closing conditions.- Nokia Siemens Networks strengthened its capital structure with thecompletion of a EUR 2 billion syndicated loan agreement with a groupof 21 international banks, in a transaction that was over-subscribed.Nokia Siemens Networks also concluded an agreement with the EuropeanInvestment Bank for a EUR 250 million loan for the development of itsmultimode Radio Access network technology.- Nokia Siemens Networks was awarded a EUR 1.1 billion, five-yearmanaged services deal by Oi, a major Brazilian operator and one ofthe largest in Latin America. By the terms of the contract NokiaSiemens Networks will be the sole provider of operations andmaintenance for all of Oi's Internal Plant Operations across 17Brazilian states.- Momentum in the services business continued with key services-ledcustomer wins with Telenor in Pakistan, DIGI Telecommunications inMalaysia and a turnkey security solution for MTS in Russia that willensure safe internet browsing on GSM and 3G networks.- Nokia Siemens Networks continued to facilitate its customers'development of mobile broadband internet with significant winsincluding a network modernization deal with M1 in Singapore, thedevelopment of an HSPA+ capable network for Elisa in Finland, theroll-out of Ireland's National Broadband Scheme using WirelessBroadband with 3 and a successful trial of HSPA+ in a live 3G networkwith Zain Saudi Arabia.- Time Warner Cable selected Nokia Siemens Networks to supply andbuild a fully integrated, 3GPP and PacketCable 2.0 compliant IMS (IPMultimedia Subsystem) network, which will be the basis for providingnext generation consumer applications that will combine existingvoice, video and data services.For more information on the operating highlights mentioned above,please refer to related press announcements at the following links:http://www.nokia.com/press, http://www.navteq.com/about/press.html,http://www.nokiasiemensnetworks.com/pressNOKIA IN THE SECOND QUARTER 2009(The following discussion is of Nokia's reported results. Comparisonsare given to the second quarter 2008 results, unless otherwiseindicated.)On July 10, 2008, Nokia completed the acquisition of NAVTEQCorporation. NAVTEQ is a separate reportable segment of Nokiastarting from the third quarter 2008. Accordingly, the results ofNAVTEQ are not available for the prior periods.Nokia's net sales decreased 25% to EUR 9 912 million (EUR 13 151million). Net sales of Devices & Services decreased 28% to EUR 6 586million (EUR 9 090 million). Net sales of NAVTEQ were EUR 147million. Net sales of Nokia Siemens Networks decreased 21% to EUR 3199 million (EUR 4 067 million).Operating profit decreased 71% to EUR 427 million (EUR 1 474million), representing an operating margin of 4.3% (11.2%). Operatingprofit in Devices & Services decreased 51% to EUR 763 million (EUR 1565 million), representing an operating margin of 11.6% (17.2%).Operating loss in NAVTEQ was EUR 100 million, representing anoperating margin of -68.0%. Operating loss in Nokia Siemens Networkswas EUR 188 million (loss of EUR 47 million), representing anoperating margin of -5.9% (-1.2%). Corporate Common Functionsreported expense totaled EUR 48 million (EUR 44 million).In the second quarter 2009, net financial expense was EUR 61 million(net financial income EUR 3 million). Profit before tax was EUR 380million (EUR 1 477 million). Profit was EUR 287 million (EUR 1 083million), based on a profit of EUR 380 million (EUR 1 103 million)attributable to equity holders of the parent and a negative EUR 93million (negative EUR 20 million) attributable to minority interests.Earnings per share decreased to EUR 0.10 (basic) and EUR 0.10(diluted), compared with EUR 0.29 (basic) and EUR 0.29 (diluted) inthe second quarter of 2008.NOKIA IN JANUARY - JUNE 2009(The following discussion is of Nokia's reported results. Comparisonsare given to the January-June 2008 results, unless otherwiseindicated.)On July 10, 2008, Nokia completed the acquisition of NAVTEQCorporation. NAVTEQ is a separate reportable segment of Nokiastarting from the third quarter 2008. Accordingly, the results ofNAVTEQ are not available for the prior periods.Nokia's net sales decreased 26% to EUR 19 186 million (EUR 25 811million). Net sales of Devices & Services decreased 30% to EUR 12 759million (EUR 18 353 million). Net sales of NAVTEQ were EUR 279million. Net sales of Nokia Siemens Networks decreased 17% to EUR 6189 million (EUR 7 468 million).Operating profit decreased 84% to EUR 482 million (EUR 3 005million), representing an operating margin of 2.5% (11.6%). Operatingprofit in Devices & Services decreased 62% to EUR 1 310 million (EUR3 448 million), representing an operating margin of 10.3% (18.8%).Operating loss in NAVTEQ was EUR 220 million, representing anoperating margin of -78.9%. Operating loss in Nokia Siemens Networkswas EUR 549 million (loss of EUR 121 million), representing anoperating margin of -8.9% (-1.6%). Corporate Common Functionsreported expense totaled EUR 59 million (EUR 322 million).In the period from January to June 2009, net financial expense wasEUR 138 million (net financial income EUR 71 million). Profit beforetax was EUR 368 million (EUR 3 084 million). Profit was EUR 291million (EUR 2 283 million), based on a profit of EUR 502 million(EUR 2 325 million) attributable to equity holders of the parent anda negative EUR 211 million (negative EUR 42 million) attributable tominority interests. Earnings per share decreased to EUR 0.14 (basic)and EUR 0.13 (diluted), compared with EUR 0.61 (basic) and EUR 0.61(diluted) in January-June 2008.PERSONNELThe average number of employees during January-June 2009 was 123 274,of which the average number of employees at Nokia Siemens Networkswas 60 686. At June 30, 2009, Nokia employed a total of 120 827people (117 212 at June 30, 2008), of which 60 983 were employed byNokia Siemens Networks (60 039 people at June 30, 2008).SHARESThe total number of Nokia shares at June 30, 2009 was 3 744 948 552.At June 30, 2009, Nokia and its subsidiary companies owned 37 520 159Nokia shares, representing approximately 1.0% of the total number ofNokia shares and the total voting rights.The complete press release with tables is available at:http://www.nokia.com/results/Nokia_results2009Q2e.pdfFORWARD-LOOKING STATEMENTSIt should be noted that certain statements herein which are nothistorical facts, including, without limitation, those regarding: A)the timing of product, services and solution deliveries; B) ourability to develop, implement and commercialize new products,services, solutions and technologies; C) our ability to develop andgrow our consumer Internet services business; D) expectationsregarding market developments and structural changes; E) expectationsregarding our mobile device volumes, market share, prices andmargins; F) expectations and targets for our results of operations;G) the outcome of pending and threatened litigation; H) expectationsregarding the successful completion of contemplated acquisitions on atimely basis and our ability to achieve the set targets upon thecompletion of such acquisitions; and I) statements preceded by"believe," "expect," "anticipate," "foresee," "target," "estimate,""designed," "plans," "will" or similar expressions areforward-looking statements. These statements are based onmanagement's best assumptions and beliefs in light of the informationcurrently available to it. Because they involve risks anduncertainties, actual results may differ materially from the resultsthat we currently expect. Factors that could cause these differencesinclude, but are not limited to: 1) the deteriorating global economicconditions and related financial crisis and their impact on us, ourcustomers and end-users of our products, services and solutions, oursuppliers and collaborative partners; 2) the development of themobile and fixed communications industry, as well as the growth andprofitability of the new market segments that we target and ourability to successfully develop or acquire and market products,services and solutions in those segments; 3) the intensity ofcompetition in the mobile and fixed communications industry and ourability to maintain or improve our market position or respondsuccessfully to changes in the competitive landscape; 4)competitiveness of our product, services and solutions portfolio; 5)our ability to successfully manage costs; 6) exchange ratefluctuations, including, in particular, fluctuations between theeuro, which is our reporting currency, and the US dollar, theJapanese yen, the Chinese yuan and the UK pound sterling, as well ascertain other currencies; 7) the success, financial condition andperformance of our suppliers, collaboration partners and customers;8) our ability to source sufficient amounts of fully functionalcomponents, sub-assemblies, software and content without interruptionand at acceptable prices; 9) the impact of changes in technology andour ability to develop or otherwise acquire and timely andsuccessfully commercialize complex technologies as required by themarket; 10) the occurrence of any actual or even alleged defects orother quality, safety or security issues in our products, servicesand solutions; 11) the impact of changes in government policies,trade policies, laws or regulations or political turmoil in countrieswhere we do business; 12) our success in collaboration arrangementswith others relating to development of technologies or new products,services and solutions; 13) our ability to manage efficiently ourmanufacturing and logistics, as well as to ensure the quality,safety, security and timely delivery of our products, services andsolutions; 14) inventory management risks resulting from shifts inmarket demand; 15) our ability to protect the complex technologies,which we or others develop or that we license, from claims that wehave infringed third parties' intellectual property rights, as wellas our unrestricted use on commercially acceptable terms of certaintechnologies in our products, services and solutions; 16) our abilityto protect numerous Nokia, NAVTEQ and Nokia Siemens Networkspatented, standardized or proprietary technologies from third-partyinfringement or actions to invalidate the intellectual propertyrights of these technologies; 17) any disruption to informationtechnology systems and networks that our operations rely on; 18)developments under large, multi-year contracts or in relation tomajor customers; 19) the management of our customer financingexposure; 20) our ability to retain, motivate, develop and recruitappropriately skilled employees; 21) whether, as a result ofinvestigations into alleged violations of law by some formeremployees of Siemens AG ("Siemens"), government authorities or otherstake further actions against Siemens and/or its employees that mayinvolve and affect the carrier-related assets and employeestransferred by Siemens to Nokia Siemens Networks, or there may beundetected additional violations that may have occurred prior to thetransfer, or violations that may have occurred after the transfer, ofsuch assets and employees that could result in additional actions bygovernment authorities; 22) any impairment of Nokia Siemens Networkscustomer relationships resulting from the ongoing governmentinvestigations involving the Siemens carrier-related operationstransferred to Nokia Siemens Networks; 23) unfavorable outcome oflitigations; 24) allegations of possible health risks fromelectromagnetic fields generated by base stations and mobile devicesand lawsuits related to them, regardless of merit; as well as therisk factors specified on pages 11-28 of Nokia's annual report onForm 20-F for the year ended December 31, 2008 under Item 3D. "RiskFactors." Other unknown or unpredictable factors or underlyingassumptions subsequently proving to be incorrect could cause actualresults to differ materially from those in the forward-lookingstatements. Nokia does not undertake any obligation to publiclyupdate or revise forward-looking statements, whether as a result ofnew information, future events or otherwise, except to the extentlegally required.Nokia, Helsinki - July 16, 2009Media and Investor Contacts:Corporate Communications, tel. +358 7180 34900Investor Relations Europe, tel. +358 7180 34289Investor Relations US, tel. +1 914 368 0555- Nokia plans to publish its third quarter 2009 results on October15, 2009.www.nokia.com --- End of Message ---NOKIAP.O. Box 226
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Datum: 16.07.2009 - 12:00 Uhr
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