Ben,
re: NOK 2000 Results
It was a heck of a year for Nokia, so far as I can see.
From a Gorilla Gaming perspective this is exemplified by them moving from a strong Prince to King in their core business, achieving > 2X sales of their next nearest competitor and > 2X margins of same, while also strengthening their position on the network infrastructure side.
I do not begrudge, however, not moving back into them earlier, to supplement my core QUALCOMM CDMA Gorilla position, because they were simply the best of a bad bunch (appreciation wise) of a rotten sector last year, despite what they accomplished.
In case you're interested, the "Nokia in 2000 Press Release" summarizing Annual Results 2000 is here:
nokia.com
A few quickly abstracted highlights from above are presented below:
[Some of the number crunchers here may wish to comment on, or question the numbers ... Now that the year is concluded I hope to finalize my Project Hunt Report ASAP, and will not be commenting much on NOK specifically till I've concluded it].
>> Nokia today announced the strongest annual operating results in its history. The company increased its market share in both the networks and mobile phone businesses and again achieved high profitability.
Commenting on the results, Jorma Ollila, Nokia's Chairman and CEO said: "Nokia's financial figures for the fourth quarter and the full year 2000 are nothing short of extraordinary. They confirm that we executed our business plans in accordance with our stated forecast, and, building on this strong base we look forward to the transition towards next generation technologies."
Nokia's mobile phone sales volume growth has consistently exceeded market growth. In 2000. Nokia grew faster than the market during every quarter and in every region.
For the full year 2000:
- Net sales grew by 54% to EUR 30 376 million,
- Operating profit increased by 48% to EUR 5 776 million, operating margin was 19.0%,
- Earnings per share (diluted) increased by 52% to EUR 0.82.
Note: Currency rate December 31, 2000, 1 EUR = 0.890 USD,
Division Breakdown:
* Revenue
- Nokia Networks increased sales by 36% to 7,714M EUR
- Nokia Mobile Phones increased sales by 66% to 21,887M EUR
- Nokia Ventures Organization increased sales by 106% to 854M EUR
* Operating Profits
- Nokia Networks increased operating profits by 26% to 1,358M EUR
- Nokia Mobile Phones increased operating profits by 26% to 4,879M EUR
- Nokia Ventures Organization lost 387M EUR (- 121%)
- Common Group Expenses were - 74M EUR compared to - 98M EUR in 1999
* EPS, EUR (split adjusted)
- Basic 0.84 (+ 50%)
- Diluted 0.82 (+ 52)
Earnings per share increased to EUR 0.26 (basic) and to EUR 0.25 (diluted) compared with EUR 0.19 (basic) and EUR 0.18 (diluted) in the corresponding period in 1999. Excluding the impact of the change in the company's accounting for its Finnish pension plan, EPS would have been EUR 0.25 (basic) and EUR 0.24 (diluted).
* Proposed dividend
- EUR 0.28
The current economic environment and the ongoing evolution of wireless technologies have made it challenging to forecast short-term market developments. Nokia estimates first-quarter sales growth in the region of 25-30% and EPS at the same level as the first quarter 2000. This reflects somewhat slower-than- anticipated market growth during the first quarter and the company's strategy of aggressively gaining market share especially in mobile phones. The profitability outlook for the balance of the year in Nokia Networks remains as previously stated, with operating margins estimated in the high teens, while margins for Nokia Mobile Phones are expected to reach 20% at the latest in the fourth quarter 2001.
People and R&D
- At the end of 2000, Nokia employed 60,289 people worldwide (55 260 at year-end 1999).
- At year-end, Nokia had 19,304 R&D employees, approximately 30% of Nokia's total personnel.
- Investments in research and development increased by 47% (by 53% in 1999) and totaled EUR 2 584 million (EUR 1 755 million in 1999), representing 8.5% of net sales (8.9% of net sales in 1999).
Nokia Global Reach
- The 10 largest Nokia markets were the US, China, the UK, Germany, Italy, France, Brazil, the Philippines, Australia and Spain, together representing 64% of total sales.
- Europe accounted for 52% of Nokia's net sales (53% in 1999), the Americas 25% (25% in 1999) and Asia-Pacific 23% (22% in 1999).
Nokia Wireless Industry Outlook
Nokia's preliminary market estimates indicate a year-on-year rise of about 50% in the global mobile phone subscriber base to approximately 715 million users at the end of the year 2000, representing global penetration of about 12%. Our estimate for the global subscriber base at the end of 1999 is about 480 million. Nokia forecasts subscription growth to remain strong and the mobile phone user base to break through one billion in the first half of 2002.
The ongoing evolution of new wireless technologies also makes it challenging to forecast short-term market developments. Operators are actively investing in 3G wireless networks, and Nokia is well positioned to serve them with its products and solutions. In the current circumstances, Nokia has modified slightly its global mobile phone market forecasts for 2001, with expectations now for the market to grow at a rate of about 25-35% to 500-550 million units. Market growth during the second half of the year is expected to be stronger than the first.
Nokia 2.5G GPRS
- GPRS network shipments accelerated during the year, and Nokia has now delivered well over 50 GPRS networks to leading operators in Europe, the US and Asia. By the end of the year, 15 operators had launched GPRS services based on Nokia solutions, accounting for more than half of all commercial GPRS launches.
worldwide.
- Nokia's GPRS handsets are scheduled to start shipping in the third quarter 2001, with volumes rising into the millions in the fourth quarter.
3G UMTS
- Nokia's first 3G terminals are expected to follow with similar timing (as GPRS) and similar volume expectations one year after GPRS handsets are scheduled to start shipping - that translates to W-CDMA handsets are scheduled to start shipping in the third quarter 2001.
- Nokia signed its first contracts for 3G networks and had by the end of the year been chosen as a 3G supplier by a total of 13 operators in Asia, the US and Europe.
- Nokia won its biggest deal to date when it signed a Letter of Intent with AT&T Wireless Services (AWS) to supply 1900 MHz radio network systems and to support the evolution to third-generation services. The contract includes Nokia's triple-mode (GSM/EDGE/UMTS) base station radio solutions, which will enable early deployment of 3G Services in the United States.
- Nokia continued to prepare for early deployment of 3G services, launching a complete family of 3G base stations and the IP-RAN Common Radio Resources Management solution, which increases radio network capacity. Nokia also launched the Nokia mPlatform, an open platform for operators and service providers, and the Nokia mPosition Solution, which provides operators with an end-to-end solution for location-based services in mobile networks.
- Underscoring the company's commitment to being one of the first to deliver fully 3GPP-compliant WCDMA networks in 2001, Nokia continued to introduce industry-first radio access solutions that dramatically reduce costs and improve capacity. Launches included a new family of WCDMA base stations and the Nokia Common Radio Resource Management solution, which will increase radio network capacity and simplify the operation of future multi-standard mobile networks. Nokia also introduced the Nokia 3G All-IP Core, an IPv6 based concept for 3G core networks, and 3G functionality for mobile switches.
- Nokia expects its first 3G deliveries in the first half of 2001, with volume deliveries commencing in the second half. During 2000, Nokia prepared for volume rollouts of 3G networks both in production and network implementation. This included verifying the capacity of the Nokia supplier network, signing agreements with a significant number of suppliers and subcontractors, and signing cooperation agreements for turnkey implementation of 3G and GSM with four major companies; ABB, Bovis Lend Lease, MKI and Wireless Facilities Inc.
Nokia Ventures Organization (Nokia Internet Communications)
In 2000, Nokia launched a new initiative to develop technical architecture for the mobile Internet. This architecture will help create a user-friendly mobile Internet experience for anyone on any network, with any type of access. Secure and reliable network solutions for corporates is also a growth area for us. Last year, Nokia Internet Communications established itself as a market leader in security infrastructure and software applications for corporate customers. Nokia Internet Communications expects revenues for 2001 to exceed EUR 500 million, while targeted annual revenue growth is at least 50%. The unit is expected to reach the breakeven point during 2002. <<
No specific mention of CDMA (except the WCDMA references above) save this one:
"This year, we expect a similar or greater number of product roll-outs, including new GPRS models, new WAP models and several new CDMA models."
- Eric - |
