Nokia Oyj — Earnings Release 2004

Oct 14, 2004

News Details

Ad-hoc | 14 October 2004 13:36

Nokia reports third-quarter 2004 net sales of EUR 6 939 million, EPS EUR 0.14

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Nokia reports third-quarter 2004 net sales of EUR 6 939 million, EPS EUR 0.14 Highlights third quarter 2004 (all comparisons in parentheses are to third quarter 2003 results regrouped according to 2004 organization): ·Net sales increased 1% to EUR 6 939 million (EUR 6 874 million in Q3 2003), up 8% at constant currency ·Operating profit decreased 20% to EUR 928 million (EUR 1 154 million), with operating margin of 13.4% (16.8%) ·EPS (diluted) was EUR 0.14 (EUR 0.17) on net profits of EUR 660 million ·Mobile Phones net sales of EUR 4 429 million (EUR 5 118 million) were 13% lower than in 2003, with EUR 822 million operating profit (EUR 1 473 million) and operating margin of 18.6% (28.8%) ·Multimedia net sales increased 94% to EUR 914 million (EUR 471 million) ·Networks net sales grew 21% to EUR 1 470 million (EUR 1 217 million), with EUR 181 million operating profit (EUR 4 million) and an operating margin of 12.3% (0.3%) ·Enterprise Solutions net sales increased 52% to EUR 172 million (EUR 113 million) ·Operating cash flow for the quarter was EUR 1.2 billion (EUR 1.2 billion) and overall cash position was EUR 11.8 billion (EUR 10.8 billion) at the end of the quarter JORMA OLLILA, CHAIRMAN AND CEO: The strong momentum in the global mobile device industry continued in the third quarter, resulting in a total global mobile device volume of 158 million units, according to our preliminary estimate. The replacement market in Europe and North America, as well as markets with relatively low mobile penetration rates such as Latin America, continued to be the major contributors to this volume growth. With more competitively positioned mobile devices in the replacement market and an attractive offering for rapidly growing markets, Nokia’s mobile device volume reached 51.4 million units in the third quarter. While Nokia was able to deliver products in higher-than-expected volumes during the quarter, industry-wide component tightness affected our overall volumes. Nokia’s mobile device market share increased quarter-on-quarter to 33%, according to our preliminary estimate. We made substantial market share gains in major Western European markets and maintained our leadership position in China. However, in the US we lost market share during the quarter, and despite strong sales growth, our market share in Latin America was down slightly from the second quarter 2004. Nokia net sales increased slightly from third quarter 2003 levels. This was a result of the mobile device market share gains in Europe and continuing strong mobile device sales in China, Latin America and the rest of Asia offsetting the negative sales development in North America. Sales in the infrastructure business grew significantly in Europe, Latin America and Asia as investments in capacity and coverage increased. We achieved EUR 0.14 EPS with a combination of healthy demand for Nokia products, which resulted in higher-than-expected sales, and steadfast cost control. To further the focused renewal of our product portfolio, we introduced and started shipping several new mobile devices during the third quarter. The newly launched products strengthen our high-end and mid-range offering and include a trio of fashion-category phones, the Nokia 7260, Nokia 7270 and Nokia 7280; our third mega-pixel imaging smartphone, the Nokia 6670; and the Nokia 9300 enterprise smartphone. Our mobile infrastructure business sales grew markedly in Europe, Latin America and Asia during the quarter as operators continued to expand capacity and coverage. Sustained strong sales in 2G and five new GSM, EDGE and 3G customers in growth markets contributed to Networks solid third-quarter profitability. Highlighting our progress in 3G, Nokia has to date supplied 3G technology to 24 of the 50 commercially launched WCDMA 3G networks in the world. We aim to continue offering high value-adding products to our customers, including operators, consumers and enterprises, by persistently renewing our competences and product portfolio. To drive these results, we have allocated additional resources to customization and enhanced customer focus, as several recent announcements indicate. We expect continued strong growth in global mobile device market volumes in the fourth quarter, even as compared to the remarkable final quarter in 2003, and now estimate that the 2004 total market volume will be approximately 630 million units. In the fourth quarter, we will begin shipping several new products focused on the mid-range and high-end to further strengthen the competitiveness of our product portfolio in order to continue building our market share. end of ad-hoc-announcement (c)DGAP 14.10.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding: A) the timing of product and solution launches and deliveries; B) our ability to develop, implement and commercialize new products, solutions and technologies; C) expectations regarding market growth, developments and structural changes; D) expectations and targets for our results of operations; E) the outcome of pending and threatened litigation; and F) 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 industry and the broader mobility industry, including the development of the mobile software and services market, as well as industry consolidation and other structural changes; 2) timing and success of the introduction and roll out of new products and solutions; 3) demand for and market acceptance of our products and solutions; 4) the impact of changes in technology and the success of our product and solution development; 5) the intensity of competition in the mobility industry and changes in the competitive landscape; 6) our ability to control the variety of factors affecting our ability to reach our targets and give accurate forecasts; 7) pricing pressures; 8) the availability of new products and services by network operators and other market participants; 9) general economic conditions globally and in our most important markets; 10) our success in maintaining efficient manufacturing and logistics as well as the high quality of our products and solutions; 11) inventory management risks resulting from shifts in market demand; 12) our ability to source quality components without interruption and at acceptable prices; 13) our success in collaboration arrangements relating to technologies, software or new products and solutions; 14) the success, financial condition, and performance of our collaboration partners, suppliers and customers; 15) any disruption to information technology systems and networks that our operations rely on; 16) our ability to have access to the complex technology involving patents and other intellectual property rights included in our products and solutions at commercially acceptable terms and without infringing any protected intellectual property rights; 17) developments under large, multi- year contracts or in relation to major customers; 18) the management of our customer financing exposure; 19) exchange rate fluctuations, including, in particular, fluctuations between the euro, which is our reporting currency, and the US dollar, the UK pound sterling and the Japanese yen; 20) our ability to recruit, retain and develop appropriately skilled employees; 21) our ability to implement our new organizational structure; and 22) the impact of changes in government policies, laws or regulations; as well as 23) the risk factors specified on pages 12 to 21 of the company’s Form 20-F for the year ended December 31, 2003 under “Item 3.D Risk Factors.” NOKIA, HELSINKI, FINLAND – OCTOBER 14, 2004 Media and Investor Contacts: Corporate Communications, tel. +358 7180 34495 or +358 7180 34900 Investor Relations Europe, tel. +358 7180 34289 Investor Relations US, tel. +1 914 368 0555 ——————————————————————————– WKN: 870737; ISIN: FI0009000681; Index: Listed: Amtlicher Markt in Frankfurt (General Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 141336 Okt 04