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To: Stoctrash who wrote (24649)	10/30/1997 1:21:00 PM
From: DiViT	Respond to of 50808

Noika doing good with Digital boxes.... Strong Profitability Marks Nokia's Third Quarter -2- ÿ 10/30/97 Business Wire (Copyright (c) 1997, Business Wire) ÿ The market for digital satellite and cable-TV terminals based on the DVB ( Digital Video Broadcasting) standard continued to grow during the third quarter of the year, resulting in increased sales of Nokia's multimedia terminals. To meet growing demand in existing markets, including Germany and Spain, as well as other emerging new markets, Nokia signed a manufacturing cooperation agreement with SCI Systems Inc. in September. At the IFA fair in Berlin and the Telecom Interactive exhibition in Geneva, Nokia introduced its interactive multimedia terminal concept for broadband cable services and the first DVB terrestrial terminal solution. Nokia Industrial Electronics Sales of Nokia monitors continued to grow, with the sales growth of professional user group displays surpassing market growth. Nokia Display Products introduced a new line of professional monitor products with high quality picture and excellent ergonomic features. To meet growing demand, Nokia expanded production of its fast chargers for cellular phones. In August, Nokia also began fast charger contract manufacturing in Doumen, China for the Asian market. In October, Nokia signed a letter of intent to sell its audioelectronics business to the US-based Harman International Industries. STATEMENT BY MR JORMA OLLILA, PRESIDENT AND CEO: We are extremely pleased to have achieved another record quarter with excellent profitability and continued growth. Our financial position continued to be strong with cash flow from operations positive at FIM 7.4 billion for the first nine months of the year. We are pleased with the high growth as well as continued excellent level of profitability within Nokia Telecommunications. In Europe, Nokia has now established itself as the market leader in GSM base stations. In GSM systems, our global market share exceeds 25%. We are also the undisputed leader in GSM 1800 systems. Our infrastructure business order inflow has been very strong in 1997. For the first nine months the order inflow was 67% higher than a year ago. We will continue to invest in product development and manufacturing capacity in response to growing customer demand. In Nokia Mobile Phones, we clearly exceeded our profitability target. Enhanced capacity utilization and productivity, as well as somewhat slower than expected price erosion, had a positive impact. In the year-over-year perspective, sales growth was affected by a number of factors, including an unfavorable comparison to a very strong third quarter in 1996. The excellent profitability of the handset business reflects the overall strength of our global R&D and operations. This gives us a solid base for our market position in 1998. We will continue to launch new products and will introduce a number of new, leading-edge GSM terminals within the next two weeks. We have also acted decisively to strengthen our market position in Japan. Next week we will launch a new product for this fast growing market. Sales in our biggest mobile phone markets, including China, the Americas and Europe, have met or exceeded our expectations, while some South East Asian markets developed somewhat slower than anticipated. Our industry-first solutions bringing added value to our customers have firmly established our reputation as an innovative leader and we intend to continue to build upon this position. We believe that we are well placed to take advantage of emerging business opportunities toward the year 2000 and beyond. With fast growing mobile phone penetration, we anticipate increased demand for new networks as well as expansions of existing ones. We also see increasing importance of value-added services to our customers as they seek to differentiate. Our achievements to date, competence and ability to offer innovative solutions give us a firm basis to exploit these opportunities and to continue to solidify our global position. In preparation for the third generation, we are confident that the advanced WCDMA (Wideband Code Division Multiple Access) radio technology built on an evolved core GSM network is an optimal solution for enhanced wireless services. We have expanded our global R&D activities by establishing a research and development center in the Yokosuka Research Park near Tokyo, Japan. One of the responsibilities of the new unit is to support our participation in the development and standardization of the future third generation cellular technology. The center will also increase our cooperation with local universities and research institutes. Looking to the whole year, we renew our previously stated positive outlook for strong growth and good profitability. However, our actual results will always depend not only on our performance but also on a variety of external factors, including general economic and industry conditions. CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS (unaudited) 7-9/97 7-9/96 1-9/97 1-9/96 1-12/96 MFIM MFIM MFIM MFIM MFIM Net sales 12 363 9 773 36 755 26 652 39 321 Cost of goods sold -7 872 -6 891 -24 277 -19 352 -28 029 Research and development expenses -987 -828 -3 031 -2 453 -3 514 Selling, general and administrative expenses -1 250 -862 -3 823 -2 318 -3 512 Operating profit 2 254 1 192 5 624 2 529 4 266 Share of results of associated companies 7 32 33 51 37 Financial income and expenses -56 -123 -121 -352 -405 Profit before tax and minority interests 2 205 1 101 5 536 2 228 3 898 Tax -617 -308 -1 550 -595 -856 Minority interests -13 -17 -6 -15 2 Profit from continuing operations 1 575 776 3 980 1 618 3 044 Discontinued operations 261 - 261 - 219 Net profit 1 836 776 4 241 1 618 3 263 Earnings per share (FIM): Continuing operations 5.56 2.74 14.05 5.70 10.73 Depreciation 608 523 1 754 1 502 2 236 NET SALES BY BUSINESS GROUP, MFIM 7-9/97 7-9/96 1-9/97 1-9/96 1-12/96 Nokia Telecommunications 4 370 3 132 12 458 9 134 13 333 Nokia Mobile Phones 6 671 5 641 20 138 14 440 21 579 Other Operations (a) 1 630 1 152 4 937 3 629 5 197 Inter-business group eliminations -308 -152 -778 -551 -788 Nokia Group 12 363 9 773 36 755 26 652 39 321 (a) of which Discontinued and Divested Operations - 45 - 512 589 Currency rate September 30, 1997, 1 FIM = 0.187 USD CONSOLIDATED BALANCE SHEET, IAS (unaudited) 30.9.1997 30.9.1996 31.12.1996 MFIM MFIM MFIM ASSETS Fixed assets and other non-current assets 9 078 8 168 8 409 Current assets Inventories 8 024 7 752 6 423 Accounts receivable 11 038 10 214 10 898 Cash and cash equivalents 9 927 4 893 7 545 28 989 22 859 24 866 Total assets 38 067 31 027 33 275 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity 19 298 14 292 15 925 Minority shareholders' interests 98 45 29 Long-term liabilities 1 664 2 327 2 414 Current liabilities 17 007 14 363 14 907 Total shareholders' equity and liabilities 38 067 31 027 33 275 Shareholders' equity per share (FIM) 68.13 50.45 56.24 Interest bearing liabilities 3 965 6 380 6 076 Currency rate September 30, 1997, 1 FIM = 0.187 USD CONTINGENT LIABILITIES (unaudited) NOKIA GROUP 30.9.1997 30.9.1996 31.12.1996 MFIM MFIM MFIM Pension fund liability Liability of pension funds 2 2 2 Liability for bills of exchange 3 5 1 Mortgages As security for loans For own debts 67 228 254 As security for other commitments For own commitments 13 26 37 Assets pledged As security for own debts 108 80 62 Guarantees Guarantees for loans As security for loans of associated companies 6 152 6 As security for loans of other companies 267 49 82 Other guarantees and commitments As security for own commitments 1 105 927 991 Leasing obligations 1 518 1 259 1 181 Currency rate September 30, 1997, 1 FIM = 0.187 USD NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS 1) 30.9.1997 30.9.1996 31.12.1996 MFIM MFIM MFIM Foreign exchange forward contracts 2) 3) 53 089 31 237 30 714 Currency options bought 10 529 6 596 5 796 Currency options sold 10 269 5 699 5 827 Interest rate forward and futures contracts 2) 17 237 24 412 25 519 Interest rate swaps 735 1 362 1 645 Interest rate options bought 508 1 283 1 139 Interest rate options sold 134 1 253 342 1)The notional amounts of derivatives summarized here do not represent amounts exchanged by the parties and, thus are not a measure of the exposure of Nokia caused by its use of derivatives. 2)Notional amounts outstanding include positions, which have been closed off. 3)Notional amount includes contracts used to hedge the net investments in foreign subsidiaries. Currency rate September 30, 1997, 1 FIM = 0.187 USD