Nokia Oyj — Earnings Release 2003

Jul 17, 2003

News Details

Ad-hoc | 17 July 2003 11:53

Nokia Corp english

Nokia continues to gain market share in phones with excellent profitability Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Nokia continues to gain market share in phones with excellent profitability Second quarter 2003 compared with the second quarter 2002: -Net sales were EUR 7 019 million (EUR 6 935 million in 2Q 2002), up by 1%. -Pro forma operating profit was EUR 858 million (EUR 1 260 million), down by 32%. This included a charge of EUR 399 million related to restructuring in Nokia Networks. Pro forma operating margin was 12.2% (18.2%). -Pro forma adjustments for the second quarter 2003 consisted of goodwill amortization of EUR 40 million. -Pro forma net profit was EUR 664 million (EUR 905 million), down by 27%. -Pro forma earnings per share (diluted) were EUR 0.14 (EUR 0.19). -Reported operating profit decreased by 33% to EUR 818 million (EUR 1 221 million). This also included the charge of EUR 399 million. -Reported net profit decreased by 28% to EUR 624 million (EUR 862 million) and reported earnings per share (diluted) decreased to EUR 0.13 (EUR 0.18). -Operating cash flow in the second quarter continued strongly at EUR 1.3 billion. end of ad-hoc-announcement (c)DGAP 17.07.2003 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: JORMA OLLILA, CHAIRMAN AND CEO: Continued excellent profitability and further positive market share developments in mobile phones during the quarter were very reassuring. We gained in two strategic focus areas: the US, our largest market, and the global CDMA market. Nokia’s market share in mobile phones is now estimated at 39%, marking both a sequential and year-on-year increase for the second quarter. Overall, however, our sales reflected general economic and US-dollar weakness. Our 14% growth in mobile phone volumes during the quarter was supported with shipments of 13 new models. Key to our success has been, and will continue to be, our winning execution and strong competitive position in all major technologies and segments. For the full year 2003, we are looking to enhance our leadership with a record launch of more than 35 new models. Further to the feature-rich, multimedia models already on the market with current technologies, shipments of the Nokia 6650, our first 3G WCDMA phone, marked the full-scale availability of this new technology through standard distribution channels across the markets. I see this as strategically important not only for us but the entire industry. And this was not just any product launch – it was the culmination of our industry’s largest ever field-testing exercise, a prolonged and exhaustive project, using 20,000 phones in almost every WCDMA network in the world. With our growing portfolio, we are bringing the power of mobility into new areas such as imaging, music, games and enterprise applications, as well as expanding the mobile experience for the user. Nearly one-third of all Nokia phones sold now have color screens and multimedia capability. The new Nokia 6600 camera phone, launched in June, is a perfect example of a smart phone that combines business functionality like secure e-mail with a personal multimedia experience. We are now seeing increased signs of a consumer shift towards more feature-rich devices in leading-edge markets such as the UK and Scandinavia. In our network business, decisive restructuring actions now underway are on track and will better position our business amid current challenging market conditions. In WCDMA networks, we are satisfied with progress made during the quarter. We now see our leading rollout capability and commercial readiness putting us among the very few top-tier companies driving this industry forward. Bringing the full power of mobility to enterprises represents a new wave in business communication and a major opportunity for us. By integrating mobile technologies into their infrastructure, enterprises can achieve massive gains in productivity and efficiency. To address this, we are creating a new business group, Nokia Enterprise Solutions, which will report directly to me. The group will provide a diverse handset range as well as security and mobile connectivity solutions specifically tailored for enterprise needs. 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 mobile phone replacement market and the timing and success of the roll-out of new products and solutions based on 3G and subsequent new technologies; 2) demand for our products and solutions; 3) the development of the mobile software and services market in general; 4) the availability of new products and services by network operators; 5) market acceptance of new products and service introductions; 6) the intensity of competition in the mobile communications market and changes in the competitive landscape; 7) the impact of changes in technology; 8) general economic conditions globally and in our most important markets; 9) pricing pressures; 10) consolidation or other structural changes in the mobile communications market; 11) the success and financial condition of the Company’s partners, suppliers and customers; 12) the management of the Company’s customer financing exposure; 13) the success of our product development; 14) our success in maintaining efficient manufacturing and logistics as well as high product quality; 15) the ability of the Company to source quality components and research and development without interruption and at acceptable prices; 16) our ability to have access to the complex technology involving patents and other intellectual property rights included in our products and solutions; 17) inventory management risks resulting from shifts in market demand; 18) fluctuations in exchange rates, including, in particular, the fluctuations between the euro, which is our reporting currency, and the US dollar and the Japanese yen; 19) the impact of changes in government policies, laws or regulations; as well as 20) the risk factors specified on pages 11 to 18 of the Company’s Form 20-F for the year ended December 31, 2002. NOKIA Helsinki – July 17, 2003 Media and Investor Contacts: Lauri Kivinen, Corporate Communications, tel. +358 7180 34495 Ulla James, Investor Relations, tel. +358 7180 34962 Bill Seymour, Investor Relations, tel. +1 972 894 4701 Antti Räikkönen, Investor Relations, tel. +358 7180 34290 http://www.nokia.com – Nokia will report 3Q results on October 16, 2003 and plans a mid-quarter update on September 9, 2003. – A results announcement for 4Q 2003 is planned for January 22, 2004. ——————————————————————————– WKN: 870737; ISIN: FI0009000681; Index: Listed: Amtlicher Markt in Frankfurt (General Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 171153 Jul 03