Nokia provided recast comparative segment financial information and additional financial disclosures on a quarterly and annual basis for 2018, reflecting the previously announced organizational changes to accelerate its strategy execution.
Nokia will publish its first-quarter 2019 interim report on April 25, 2019 at approximately 8 a.m. Finnish time (CET+1) in accordance with its new reporting structure. Analyst and media call details are provided below.
Changes in reporting structure, effective from January 1, 2019
Nokia announced organizational changes to accelerate its strategy execution on October 25, November 22 and December 31, 2018. Accordingly, Nokia has revised its financial reporting structure to better reflect its strategy, organizational structure and the way it evaluates operational performance and allocates resources.
As of January 1, 2019, Nokia has three reportable segments: (i) Networks, (ii) Nokia Software and (iii) Nokia Technologies. In addition, Nokia also discloses segment-level data for Group Common and Other.
Within the new Networks reportable segment, Nokia is providing net sales disclosure for the following businesses: (i) Mobile Access, (ii) Fixed Access, (iii) IP Routing and (iv) Optical Networks.
Certain reclassifications have been made in order to reflect the new organizational structure of the company, the most significant of which are: (i) activities related to our cloud core offering have been reclassified from the former Mobile Networks business group and former Global Services reportable segment to the new Nokia Software reportable segment and (ii) activities related to the former Mobile Networks business group and former Global Services reportable segment that are not reclassified to the new Nokia Software reportable segment are now reported together under the new Mobile Access business.
Nokia is also providing separate net sales disclosure for its different customer types: (i) Communication Service Providers, (ii) Enterprises and (iii) Licensees.
Additionally, Nokia is providing adjusted financial disclosure for its Networks and Nokia Software reportable segments, with amounts related to licensing and Nokia Bell Labs allocated 85% to Networks and 15% to Nokia Software, in accordance with their approximate value contribution.
Recast comparative segment financial information for 2018
To provide a basis for comparison, the following tables present a recasting of Nokia's segment financial information on an unaudited basis for all four quarters of 2018 separately, as well as for the full year 2018.
The tables are also available in Excel format at http://nokia.com/financials.
|
Q1- |
Networks1 |
Nokia Soft- |
Nokia Techn- |
Gro- |
Eli- |
Non-IF- |
Non-IF- |
Nokia |
|
EUR |
||||||||
|
Net |
17 |
2 |
1 |
1 |
(63) |
22 580 |
(17) |
22 563 |
|
Cost |
(11 |
(1 346) |
(22) |
(870) |
63 |
(13 545) |
(572) |
(14 117) |
|
Gross |
6 |
1 |
1 |
154 |
0 |
9 035 |
(5 |
8 |
|
% of |
34.7 |
50.4 |
98.5 |
15.0 |
|
40.0% |
|
37.4% |
|
Research |
(3 |
(486) |
(145) |
(293) |
0 |
(4 014) |
(606) |
(4 620) |
|
Sell- |
(2 |
(429) |
(127) |
(201) |
0 |
(2 896) |
(567) |
(3 463) |
|
Other |
(31) |
(3) |
(5) |
93 |
0 |
55 |
(477) |
(422) |
|
Ope- |
773 |
450 |
1 203 |
(246) |
0 |
2 180 |
(2 239) |
(59) |
|
% |
4.4 |
16.6 |
80.1 |
(24.0)% |
|
9.7 |
|
(0.3)% |
|
Depre- |
(384) |
(65) |
(21) |
(46) |
0 |
(515) |
(940) |
(1 455) |
|
Share of |
12 |
0 |
0 |
0 |
0 |
12 |
0 |
12 |
|
EBI- |
1 |
515 |
1 |
(200) |
0 |
2 708 |
(1 300) |
1 |
|
1 |
Mobile Access net sales of EUR 11 273 million, Fixed Access net sales of EUR 1 980 million, IP Routing net sales of EUR 2 545 million and Optical Networks net sales of EUR 1 606 million. |
|||||||
|
2 |
Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. |
|||||||
|
Q1'18 |
Networks1 |
Nokia Soft-ware |
Nokia Techn-ologies |
Gro- |
Eli- |
Non-IF- |
Non- |
Nokia To- |
|
EUR |
||||||||
|
Net |
3 |
541 |
365 |
252 |
(12) |
4 |
(5) |
4 |
|
Cost |
(2 |
(308) |
(10) |
(216) |
12 |
(2 988) |
(131) |
(3 119) |
|
Gross |
1 |
233 |
355 |
36 |
0 |
1 941 |
(135) |
1 |
|
% of |
34.8% |
43.1% |
97.3% |
14.3% |
|
39.4% |
|
36.7% |
|
Research |
(766) |
(128) |
(43) |
(74) |
0 |
(1 011) |
(156) |
(1 167) |
|
Sell- Admi- |
(532) |
(111) |
(39) |
(52) |
0 |
(732) |
(116) |
(847) |
|
Other |
27 |
8 |
0 |
7 |
0 |
41 |
(168) |
(127) |
|
Ope- |
46 |
1 |
274 |
(83) |
0 |
239 |
(575) |
(336) |
|
% |
1.2 |
0.2 |
75.1 |
(32.9)% |
|
4.8% |
|
(6.8)% |
|
Depre- |
(96) |
(17) |
(5) |
(12) |
0 |
(130) |
(242) |
(372) |
|
Share of |
(4) |
0 |
1 |
0 |
0 |
(4) |
0 |
(4) |
|
EBI- |
137 |
19 |
279 |
(71) |
0 |
365 |
(333) |
32 |
|
1 |
Mobile Access net sales of EUR 2 426 million, Fixed Access net sales of EUR 445 million, IP Routing net sales of EUR 550 million and Optical Networks net sales of EUR 363 million. |
|||||||
|
2 |
Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. |
|||||||
|
Q2'18 |
Networks1 |
Nokia Soft-ware |
Nokia Techn-ologies |
Gro- |
Eli- |
Non-IF- |
Non- |
Nokia To- |
|
EUR |
||||||||
|
Net |
4 |
612 |
361 |
280 |
(15) |
5 |
(5) |
5 |
|
Cost |
(2 |
(330) |
(7) |
(228) |
15 |
(3 279) |
(173) |
(3 453) |
|
Gross |
1 |
282 |
354 |
52 |
0 |
2 |
(178) |
1 |
|
% of |
33.1 |
46.1% |
98.1% |
18.6 |
|
38.3% |
|
35.0% |
|
Research |
(784) |
(123) |
(36) |
(73) |
0 |
(1 016) |
(149) |
(1 165) |
|
Sell- |
(516) |
(104) |
(25) |
(50) |
0 |
(695) |
(117) |
(813) |
|
Other |
(16) |
(14) |
(1) |
38 |
0 |
7 |
(110) |
(103) |
|
Ope- |
34 |
40 |
292 |
(33) |
0 |
334 |
(555) |
(221) |
|
% |
0.8 |
6.5 |
80.9% |
(11.8) |
|
6.3 |
|
(4.2)% |
|
Depre- |
(96) |
(19) |
(5) |
(8) |
0 |
(128) |
(232) |
(360) |
|
Share of |
(3) |
0 |
0 |
0 |
0 |
(4) |
0 |
(4) |
|
EBI- |
127 |
59 |
297 |
(24) |
0 |
458 |
(323) |
135 |
|
1 |
Mobile Access net sales of EUR 2 634 million, Fixed Access net sales of EUR 490 million, IP Routing net sales of EUR 592 million and Optical Networks net sales of EUR 365 million. |
|||||||
|
2 |
Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. |
|||||||
|
Q3'18 |
Net-works1 |
Nokia Soft-ware |
Nokia Techn-ologies |
Gro- |
Eli- |
Non-IF- |
Non- |
Nokia To- |
|
EUR |
||||||||
|
Net |
4 |
623 |
351 |
236 |
(14) |
5 |
(4) |
5 |
|
Cost |
(2 |
(322) |
(2) |
(200) |
14 |
(3 320) |
(118) |
(3 |
|
Gross |
1 |
301 |
350 |
36 |
0 |
2 |
(122) |
2 |
|
% of |
34.1 |
48.3 |
99.7 |
15.3 |
|
39.2 |
|
37.0 |
|
Research |
(755) |
(117) |
(28) |
(71) |
0 |
(971) |
(152) |
(1 123) |
|
Sell- |
(518) |
(110) |
(30) |
(52) |
0 |
(710) |
(160) |
(870) |
|
Other |
(2) |
0 |
(1) |
32 |
0 |
28 |
(108) |
(80) |
|
Ope- |
178 |
75 |
290 |
(56) |
0 |
487 |
(541) |
(54) |
|
% |
4.2 |
12.0 |
82.6 |
(23.7) |
|
8.9 |
|
(1.0) |
|
Depre- |
(92) |
(14) |
(5) |
(13) |
0 |
(124) |
(232) |
(356) |
|
Share of |
2 |
0 |
0 |
0 |
0 |
2 |
0 |
2 |
|
EBI- |
272 |
88 |
295 |
(43) |
0 |
613 |
(309) |
304 |
|
1 |
Mobile Access net sales of EUR 2 741 million, Fixed Access net sales of EUR 503 million, IP Routing net sales of EUR 610 million and Optical Networks net sales of EUR 412 million. |
|||||||
|
2 |
Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. |
|||||||
|
Q4'18 |
Networks1 |
Nokia Soft-ware |
Nokia Techn-ologies |
Gro- |
Eli- |
Non-IF- |
Non- |
Nokia To- |
|
EUR |
||||||||
|
Net |
5 |
938 |
423 |
257 |
(21) |
6 |
(3) |
6 |
|
Cost |
(3 |
(386) |
(3) |
(228) |
21 |
(3 957) |
(151) |
(4 108) |
|
Gross |
1 |
552 |
420 |
29 |
0 |
2 |
(154) |
2 |
|
% of |
36.3 |
58.8% |
99.3% |
11.3 |
|
42.4% |
|
40.2% |
|
Research |
(786) |
(117) |
(38) |
(75) |
0 |
(1 016) |
(149) |
(1 165) |
|
Sell- |
(575) |
(105) |
(32) |
(46) |
0 |
(758) |
(174) |
(933) |
|
Other |
(39) |
3 |
(3) |
17 |
0 |
(21) |
(90) |
(111) |
|
Ope- |
515 |
333 |
347 |
(74) |
0 |
1 |
(568) |
552 |
|
% |
9.8 |
35.5% |
82.0% |
(28.8) |
|
16.3% |
|
8.0 |
|
Depre- |
(100) |
(16) |
(6) |
(12) |
0 |
(133) |
(234) |
(367) |
|
Share of |
18 |
0 |
0 |
0 |
0 |
18 |
0 |
18 |
|
EBI- |
633 |
349 |
353 |
(62) |
0 |
1 |
(335) |
937 |
|
1 |
Mobile Access net sales of EUR 3 472 million, Fixed Access net sales of EUR 542 million, IP Routing net sales of EUR 794 million and Optical Networks net sales of EUR 467 million. |
|||||||
|
2 |
Non-IFRS results exclude costs related to the Alcatel-Lucent transaction and related integration, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring and associated charges, and certain other items that may not be indicative of Nokia's underlying business performance. |
|||||||
Additional new disclosures
The following table presents net sales disclosure for our different customer types.
|
EUR million (unaudited) |
Q1'18 |
Q2'18 |
Q3'18 |
Q4'18 |
Q1-Q4'2018 |
|
Communication service providers |
4 080 |
4 398 |
4 632 |
5 845 |
18 955 |
|
Enterprise |
244 |
295 |
256 |
371 |
1 167 |
|
Licensees |
349 |
352 |
351 |
423 |
1 476 |
|
Other1 |
251 |
268 |
219 |
230 |
965 |
|
Total |
4 924 |
5 313 |
5 458 |
6 869 |
22 563 |
|
|
|
|
|
|
|
|
1Includes net sales of Alcatel-Lucent Submarine Networks (ASN) and Radio Frequency Systems (RFS), both of which are being managed as separate entities, and certain other items, such as net sales of Digital Health business, eliminations of inter-segment revenues as well as certain items related to purchase price allocation. ASN and RFS net sales include also revenue from communications service providers and enterprise customers. |
|||||
The following tables provide adjusted financial disclosure for our Networks and Nokia Software reportable segments, with amounts related to licensing and Nokia Bell Labs allocated 85% to Networks and 15% to Nokia Software.
|
Q1-Q4'18 (unaudited) |
Before allocations |
|
Allocations |
|
After allocations |
|
|
|
|
|
Licensing |
Nokia Bell Labs |
|
|
|
Net sales (EUR million) |
|
|
|
|
|
|
|
Networks |
17 404 |
|
1 255 |
6 |
|
18 665 |
|
Nokia Software |
2 713 |
|
221 |
1 |
|
2 935 |
|
Nokia Technologies |
1 501 |
|
(1 476) |
|
|
25 |
|
Group Common and Other |
1 024 |
|
|
(7) |
|
1 017 |
|
Eliminations |
(63) |
|
|
|
|
(63) |
|
Non-IFRS total |
22 580 |
|
0 |
0 |
|
22 580 |
|
|
|
|
|
|
|
|
|
Operating Profit (EUR million) |
|
|
|
|
|
|
|
Networks |
773 |
|
1 046 |
(162) |
|
1 657 |
|
Nokia Software |
450 |
|
185 |
(29) |
|
606 |
|
Nokia Technologies |
1 203 |
|
(1 231) |
|
|
(28) |
|
Group Common and Other |
(246) |
|
|
191 |
|
(55) |
|
Non-IFRS total |
2 180 |
|
0 |
0 |
|
2 180 |
|
|
|
|
|
|
|
|
|
Operating Margin % |
|
|
|
|
|
|
|
Networks |
4.4% |
|
|
|
|
8.9% |
|
Nokia Software |
16.6% |
|
|
|
|
20.6% |
|
Nokia Technologies |
80.1% |
|
|
|
|
|
|
Group Common and Other |
(24.0)% |
|
|
|
|
(5.4)% |
|
Non-IFRS total |
9.7% |
|
|
|
|
9.7% |
|
Q1'18 (unaudited) |
Before allocations |
|
Allocations |
|
After allocations |
|
|
|
|
|
Licensing |
Nokia Bell Labs |
|
|
|
Net sales (EUR million) |
|
|
|
|
|
|
|
Networks |
3 783 |
|
297 |
1 |
|
4 081 |
|
Nokia Software |
541 |
|
52 |
0 |
|
594 |
|
Nokia Technologies |
365 |
|
(349) |
|
|
16 |
|
Group Common and Other |
252 |
|
|
(1) |
|
251 |
|
Eliminations |
(12) |
|
|
|
|
(12) |
|
Non-IFRS total |
4 929 |
|
0 |
0 |
|
4 929 |
|
|
|
|
|
|
|
|
|
Operating Profit (EUR million) |
|
|
|
|
|
|
|
Networks |
46 |
|
252 |
(43) |
|
255 |
|
Nokia Software |
1 |
|
45 |
(8) |
|
38 |
|
Nokia Technologies |
274 |
|
(297) |
|
|
(23) |
|
Group Common and Other |
(83) |
|
|
51 |
|
(32) |
|
Non-IFRS total |
239 |
|
0 |
0 |
|
239 |
|
|
|
|
|
|
|
|
|
Operating Margin % |
|
|
|
|
|
|
|
Networks |
1.2% |
|
|
|
|
6.2% |
|
Nokia Software |
0.2% |
|
|
|
|
6.4% |
|
Nokia Technologies |
75.1% |
|
|
|
|
|
|
Group Common and Other |
(32.9)% |
|
|
|
|
(12.7)% |
|
Non-IFRS total |
4.8% |
|
|
|
|
4.8% |
|
Q2'18 (unaudited) |
Before allocations |
|
Allocations |
|
After allocations |
|
|
|
|
|
Licensing |
Nokia Bell Labs |
|
|
|
Net sales (EUR million) |
|
|
|
|
|
|
|
Networks |
4 081 |
|
299 |
2 |
|
4 382 |
|
Nokia Software |
612 |
|
53 |
0 |
|
665 |
|
Nokia Technologies |
361 |
|
(352) |
|
|
9 |
|
Group Common and Other |
280 |
|
|
(2) |
|
278 |
|
Eliminations |
(15) |
|
|
|
|
(15) |
|
Non-IFRS total |
5 318 |
|
0 |
0 |
|
5 318 |
|
|
|
|
|
|
|
|
|
Operating Profit (EUR million) |
|
|
|
|
|
|
|
Networks |
34 |
|
252 |
(43) |
|
244 |
|
Nokia Software |
40 |
|
45 |
(8) |
|
77 |
|
Nokia Technologies |
292 |
|
(297) |
|
|
(5) |
|
Group Common and Other |
(33) |
|
|
50 |
|
17 |
|
Non-IFRS total |
334 |
|
0 |
0 |
|
334 |
|
|
|
|
|
|
|
|
|
Operating Margin % |
|
|
|
|
|
|
|
Networks |
0.8% |
|
|
|
|
5.6% |
|
Nokia Software |
6.5% |
|
|
|
|
11.6% |
|
Nokia Technologies |
80.9% |
|
|
|
|
|
|
Group Common and Other |
(11.8)% |
|
|
|
|
6.1% |
|
Non-IFRS total |
6.3% |
|
|
|
|
6.3% |
|
Q3'18 (unaudited) |
Before allocations |
|
Allocations |
|
After allocations |
|
|
|
|
|
Licensing |
Nokia Bell Labs |
|
|
|
Net sales (EUR million) |
|
|
|
|
|
|
|
Networks |
4 265 |
|
298 |
2 |
|
4 565 |
|
Nokia Software |
623 |
|
53 |
0 |
|
676 |
|
Nokia Technologies |
351 |
|
(351) |
|
|
0 |
|
Group Common and Other |
236 |
|
|
(2) |
|
234 |
|
Eliminations |
(14) |
|
|
|
|
(14) |
|
Non-IFRS total |
5 461 |
|
0 |
0 |
|
5 461 |
|
|
|
|
|
|
|
|
|
Operating Profit (EUR million) |
|
|
|
|
|
|
|
Networks |
178 |
|
247 |
(41) |
|
384 |
|
Nokia Software |
75 |
|
44 |
(7) |
|
111 |
|
Nokia Technologies |
290 |
|
(290) |
|
|
0 |
|
Group Common and Other |
(56) |
|
|
48 |
|
(8) |
|
Non-IFRS total |
487 |
|
0 |
0 |
|
487 |
|
|
|
|
|
|
|
|
|
Operating Margin % |
|
|
|
|
|
|
|
Networks |
4.2% |
|
|
|
|
8.4% |
|
Nokia Software |
12.0% |
|
|
|
|
16.4% |
|
Nokia Technologies |
82.6% |
|
|
|
|
|
|
Group Common and Other |
(23.7)% |
|
|
|
|
(3.4)% |
|
Non-IFRS total |
8.9% |
|
|
|
|
8.9% |
|
Q4'18 (unaudited) |
Before allocations |
|
Allocations |
|
After allocations |
|
|
|
|
|
Licensing |
Nokia Bell Labs |
|
|
|
Net sales (EUR million) |
|
|
|
|
|
|
|
Networks |
5 276 |
|
360 |
2 |
|
5 637 |
|
Nokia Software |
938 |
|
63 |
0 |
|
1 002 |
|
Nokia Technologies |
423 |
|
(423) |
|
|
0 |
|
Group Common and Other |
257 |
|
|
(2) |
|
255 |
|
Eliminations |
(21) |
|
|
|
|
(21) |
|
Non-IFRS total |
6 872 |
|
0 |
0 |
|
6 872 |
|
|
|
|
|
|
|
|
|
Operating Profit (EUR million) |
|
|
|
|
|
|
|
Networks |
515 |
|
295 |
(36) |
|
774 |
|
Nokia Software |
333 |
|
52 |
(6) |
|
379 |
|
Nokia Technologies |
347 |
|
(347) |
|
|
0 |
|
Group Common and Other |
(74) |
|
|
42 |
|
(32) |
|
Non-IFRS total |
1 120 |
|
0 |
0 |
|
1 120 |
|
|
|
|
|
|
|
|
|
Operating Margin % |
|
|
|
|
|
|
|
Networks |
9.8% |
|
|
|
|
13.7% |
|
Nokia Software |
35.5% |
|
|
|
|
37.8% |
|
Nokia Technologies |
82.0% |
|
|
|
|
|
|
Group Common and Other |
(28.8)% |
|
|
|
|
(12.5)% |
|
Non-IFRS total |
16.3% |
|
|
|
|
16.3%00 |
Nokia to publish first-quarter 2019 interim report on April 25, 2019
Nokia will publish its first-quarter 2019 interim report on April 25, 2019 at approximately 8 a.m. Finnish time (CET+1). The interim report will be made available on the Nokia website immediately after publication.
Nokia only publishes a summary of its financial reports in stock exchange releases. The summary focuses on Nokia Group's financial information as well as on Nokia's outlook.
The detailed segment-level discussion will be available in the complete first-quarter 2019 interim report available at http://nokia.com/financials. Investors should not solely rely on summaries of Nokia's financial reports, but should also review the complete reports with tables.
Nokia's analyst conference call will begin on April 25, 2019 at 3 p.m. Finnish time. A link to the webcast of the conference call will be available at http://nokia.com/financials. Media representatives can listen in via the link on that website, or alternatively call +1 412 317 5210.
Source: Nokia Press Release