Nokia Oyj — Earnings Release 2002

Oct 17, 2002

News Details

Ad-hoc | 17 October 2002 12:09

Nokia Corp english

NOKIA SALES RETURN TO GROWTH WITH STRONG PROFITABILITY Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– NOKIA SALES RETURN TO GROWTH WITH STRONG PROFITABILITY Third-quarter 2002 (IAS) compared with third-quarter 2001: – Net sales increased 2% to EUR 7 224 million (EUR 7 050 million in 3Q 2001). – Pro forma operating profit increased by 14% to EUR 1 219 million (EUR 1 071 million); pro forma operating margin increased to 16.9% (15.2%). – Reported operating profit increased to EUR 859 million (EUR 284 million); reported operating margin increased to 11.9% (4.0%). – Pro forma adjustments: a one-time charge of EUR 306 million related to outstanding long-term financing to MobilCom and EUR 54 million in goodwill amortization. – Pro forma earnings per share (diluted) increased to EUR 0.18 (EUR 0.16). – Reported net profit increased to EUR 610 million (EUR 186 million) and reported earnings per share (diluted) increased to EUR 0.13 (EUR 0.04). – Operating cash flow in the third quarter was EUR 2.2 billion (EUR 1.4 billion). end of ad-hoc-announcement (c)DGAP 17.10.2002 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: JORMA OLLILA, CHAIRMAN AND CEO: Nokia’s third-quarter results were greatly encouraging, marking a return to top- line growth with pro forma earnings per share at EUR 0.18, ahead of earlier guidance. The strength of this performance speaks very highly for our people and my thanks go to the whole Nokia team. In clear demonstration of our strong execution and consistent approach to operational efficiency, we were again able to sustain strong profitability and a very high operating cash flow of EUR 2.2 billion. In mobile phones, pro forma operating profit rose by an outstanding 25%, compared with the third quarter last year, with margins exceeding expectations at a very healthy 22.2%. I am also very satisfied with Nokia’s overall market position and market share developments throughout the year. Color and multimedia are adding excitement to mobile communications. The handset market is entering a new growth period spurred by the arrival of an increasing number of mass volume products with color and multimedia messaging capability, all enriching the customer experience. Current visibility suggests overall market volume for 2002 will reach our earlier expectations of 400 million units sold. Compelling new services and phone features are increasingly moving both business people and consumers from a very large existing subscriber base to upgrade their phones, or even look towards owning more than one device. The mobile network infrastructure market remains challenging with continued low investments. However, we have seen significant progress in the third-generation WCDMA rollout. Pre-commercial network launches are underway and manufacturers and operators are completing interoperability testing. I have no doubt that wireless wideband technology will become vital for capacity, speed and quality of service, as the industry moves forward at full speed. In September, we demonstrated our first dual-mode WCDMA/GSM phone on a live network. Type approval tests for the Nokia 6650 have been passed and we are ready to begin shipments to operators. We expect the 3G business system to be sufficiently mature to support broad handset shipments within the first half 2003. New mobile services are being introduced in the majority of networks. We are more than pleased by the fast-paced take up of multimedia messaging, with over 50 network operators in Europe and Asia already offering multimedia messaging services. This to me is clear indication that digital convergence in mobility has become a reality. Completely new categories of devices, such as phones with integrated cameras, have begun to redefine the scope and scale of the market, greatly expanding Nokia’s future potential for growth. It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding A) the timing of product deliveries; B) our ability to develop and implement new products and technologies; C) expectations regarding market growth and developments; D) expectations for growth and profitability; and E) statements preceded by “believe,” “expect,” “anticipate,” “foresee” or similar expressions, are forward-looking statements. Because these statements involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors that could cause these differences include, but are not limited to: 1) developments in the mobile communications market including the continued development of the replacement market and the Company’s success in the 3G market; 2) demand for products and services; 3) market acceptance of new products and service introductions; 4) the availability of new products and services by operators; 5) weakened economic conditions in many of the Company’s principal markets; 6) pricing pressures; 7) intensity of competition; 8) the impact of changes in technology; 9) consolidation or other structural changes in the mobile communications market; 10) the success and financial condition of the Company’s partners, suppliers and customers; 11) the management of the Company’s customer financing exposure; 12) the continued success of product development by the Company; 13) the continued success of cost-efficient, effective and flexible manufacturing by the Company; 14) the ability of the Company to source component production and R&D without interruption and at acceptable prices; 15) inventory management risks resulting from shifts in market demand; 16) fluctuations in exchange rates, including, in particular, the fluctuations in the euro exchange rate between the US dollar and the Japanese yen; 17) impact of changes in government policies, laws or regulations; 18) the risk factors specified on pages 10 to 17 of the Company’s Form 20-F for the year ended December 31, 2001. NOKIA Helsinki – October 17, 2002 For more information: Lauri Kivinen, Corporate Communications, tel. +358 7180 34495 Ulla James, Investor Relations, tel. +1 972 894 4880 Antti Räikkönen, Investor Relations, tel. +358 7180 34290 http://www.nokia.com – Nokia will report 4Q results on January 23, 2003 and plans a mid-quarter update on December 10, 2002. – Results announcements for 1Q, 2Q and 3Q, 2003 are planned for April 17, July 17 and October 16, respectively. – The Annual General meeting is expected to be held on March 27, 2003. The complete press release with tables is available at: http://www.nokia.com/investor/2002/3Q/ ——————————————————————————– WKN: 870737; ISIN: FI0009000681; Index: Listed: Amtlicher Markt in Frankfurt; Freiverkehr in Berlin, Bremen, Düsseldorf, Hamburg, Hannover, München, Stuttgart 171209 Okt 02