Nokia Q3 2013 Earnings Release (PDF) ...
results.nokia.com
Financial And Operating Highlights
Third quarter 2013 highlights:
Nokia Group non-IFRS EPS in Q3 2013 was EUR 0.01; reported EPS was EUR -0.02
• Nokia Group achieved underlying operating profitability for the fifth consecutive quarter, with a Q3 non-IFRS operating margin of 3.8%, driven by strong performances by Nokia Solutions and Networks (NSN) and HERE.
• Nokia Group ended Q3 with a strong balance sheet and solid cash position, with gross cash of EUR 9.1 billion and net cash of EUR 2.4 billion. Excluding the acquisition of Siemens’ stake in NSN for EUR 1.7 billion, Nokia Group net cash was approximately flat sequentially. At the end of Q3 NSN’s contribution to Nokia Group gross and net cash was EUR 2.7 billion and EUR 1.5 billion, respectively.
• NSN achieved underlying profitability for the sixth consecutive quarter, with Q3 non-IFRS operating margin of 8.4%, reflecting strong gross margin and continued progress relative to its strategy in a seasonally weak quarter.
• HERE achieved Q3 non-IFRS operating margin of 9.5%, reflecting solid gross margin and operational efficiency.
• Devices & Services achieved Q3 non-IFRS operating margin of negative 1.6%.
Nokia Group net sales in Q3 2013 were EUR 5.7 billion, flat quarter-on-quarter
• NSN Q3 net sales decreased 7% quarter-on-quarter to EUR 2.6 billion, primarily reflecting seasonality and NSN’s strategic focus.
• HERE Q3 net sales decreased 9% quarter-on-quarter to EUR 0.2 billion, primarily due to lower seasonal sales to vehicle customers.
• Devices & Services Q3 net sales increased 6% quarter-on-quarter to EUR 2.9 billion.
• Lumia Q3 volumes increased 19% quarter-on-quarter to 8.8 million units, reflecting our recently
broadened Lumia product range and strong customer demand, particularly for the Lumia 520.
• Mobile Phones Q3 volumes increased 4% quarter-on-quarter to 55.8 million units, demonstrating solid performance across the majority of our portfolio due to recently launched devices, particularly the Nokia 105, the Asha 501, and the Nokia 210.
Additional information
Commencing the fourth quarter 2013, and subject to shareholder approval of the sale of substantially all of its Devices & Services business at our Extraordinary General Meeting (EGM), Nokia expects to report substantially all of its Devices & Services business as discontinued operations. If Nokia Group would have reported substantially all of its Devices & Services business as discontinued operations in the third quarter 2013 the net sales of its continuing operations would have been EUR 2.9 billion, which is EUR 2.8 billion lower than Nokia Group net sales of EUR 5.7 billion. However, Nokia Group’s non-IFRS operating margin of its continuing operations would have been 11.5%, which is 7.7 percentage points higher than the third quarter 2013 non-IFRS operating margin of 3.8
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Nokia Outlook
• Nokia expects NSN’s non-IFRS operating margin in the fourth quarter 2013 to be approximately positive 12 percent, plus or minus four percentage points. This outlook is based on Nokia’s expectations regarding a number of factors, including:
-> competitive industry dynamics;
-> product and regional mix;
-> industry seasonality;
-> the timing of major new network deployments; and
-> expected continued improvement under NSN’s restructuring and transformation programs.
• In the fourth quarter 2013, Nokia expects NSN to deliver solid net sales growth on a sequential basis, supported by strong industry seasonality.
• Nokia continues to target to reduce NSN’s non-IFRS annualized operating expenses and production overheads by more than EUR 1.5 billion by the end of 2013, compared to the end of 2011.
• Nokia has signed an agreement to enter into a transaction whereby Nokia will sell substantially all of its Devices & Services business to Microsoft. Commencing the fourth quarter 2013, and subject to shareholder approval of the transaction at our EGM, Nokia expects to report substantially all of its Devices & Services business as discontinued operations.
• In the fourth quarter 2013, Nokia expects the discontinued operations related to the Devices &
Services business to generate negative operating margin on a non-IFRS basis.
• Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of approximately EUR 3.0 billion by the end of 2013.
NSN Standalone Interim Report To Be Published Today
• As previously announced, as a result of the debt securities NSN issued in March 2013, NSN is committed to making certain financial data publicly available through its standalone reporting format. Consequently, NSN also plans to publish its standalone third quarter 2013 and January-September 2013 interim report on today at approximately 1.30pm Finnish time.
• The report will also be made available on NSN’s website at:www.nsn.com/about-us/company/financial/financialresults.
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- Eric - |
