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Tuesday , 11 December 2018
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Nokia Corporation: Interim Report for Q1 2015

Strong year-on-year sales growth; Weak Nokia Networks profitability compensated by good performance in Nokia Technologies and HERE

This is a summary of the Nokia Corporation interim report for first quarter 2015 published today. The complete first quarter 2015 interim report with tables is available at http://company.nokia.com/en/financials. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.

FINANCIAL HIGHLIGHTS

  • Net sales in Q1 2015 of EUR 3.2 billion (EUR 2.7 billion in Q1 2014), up 20% year-on-year
  • Non-IFRS diluted EPS in Q1 2015 of EUR 0.05 (EUR 0.04 in Q1 2014), an increase of 25% year-on-year; reported diluted EPS in Q1 2015 of EUR 0.05 (EUR 0.03 in Q1 2014), up 67% year-on-year

Nokia Networks

  • 15% year-on-year net sales growth driven by growth in four out of our six regions, with non-IFRS operating margin declining to 3.2% from 9.3%
  • 21% year-on-year growth in Global Services net sales, primarily driven by strong growth in the network implementation business line. 10% year-on-year growth in Mobile Broadband net sales, primarily driven by overall radio technologies, particularly LTE
  • 61% year-on-year decline in non-IFRS operating profit primarily driven by lower software sales, lower non-IFRS gross profit in the systems integration business line, the short-term impact of strategic entry deals, higher non-IFRS operating expenses due to foreign exchange impacts and increased investments in LTE, 5G and cloud core, and more challenging market conditions

HERE

  • 25% year-on-year growth in net sales, with 29% year-on-year increase in sales of new vehicle licenses for embedded navigation systems
  • 90% year-on-year growth in non-IFRS operating profit, with non-IFRS operating margin expanding to 7.3% from 4.8%

Nokia Technologies

  • 103% year-on-year growth in net sales and 124% growth in non-IFRS operating profit, primarily due to non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested intellectual property rights, and intellectual property rights divested in the first quarter 2015. In addition, net sales and non-IFRS operating profit benefitted from higher intellectual property licensing income from existing licensees
  Reported first quarter 2015 results1
EUR million Q1’15 Q1’14 YoY change Q4’14 QoQ change
Net sales – constant currency     11%   (21)%
Net sales 3 196 2 664 20% 3 802 (16)%
  Nokia Networks 2 673 2 328 15% 3 365 (21)%
  HERE 261 209 25% 292 (11)%
  Nokia Technologies 266 131 103% 149 79%
Gross margin % (non-IFRS) 42.5% 45.6% (310)bps 43.5% (100)bps
Operating profit (non-IFRS) 265 305 (13)% 524 (49)%
  Nokia Networks 85 216 (61)% 470 (82)%
  HERE 19 10 90% 20 (5)%
  Nokia Technologies 193 86 124% 77 151%
  Group Common Functions (32) (8)   (43)  
Operating margin % (non-IFRS) 8.3% 11.4% (310)bps 13.8% (550)bps
Profit (non-IFRS) 200 172 16% 356 (44)%
Profit 181 110 65% 327 (45)%
EPS, EUR diluted (non-IFRS) 0.05 0.04 25% 0.09 (44)%
EPS, EUR diluted 0.05 0.03 67% 0.08 (38)%
           

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