Nokia Q2 2010 net sales EUR 10 billion

FINLAND: Nokia's second quarter 2010 net sales increased 1 percent to EUR 10 billion, compared with EUR 9.9 billion in the second quarter 2009. At constant currency, group net sales would have decreased 4 percent year-on-year.

Q2 2010 Highlights
- Nokia net sales of EUR 10.0 billion, up 1 percent year-on-year and 5 percent sequentially (down 4 percent and up 2 percent at constant currency).
- Devices & Services net sales of EUR 6.8 billion, up 3 percent year-on-year and 2 percent sequentially (down 2 percent and 1 percent at constant currency).
- Services net sales of EUR 158 million, up 7 percent sequentially; billings of EUR 295 million, up 29 percent sequentially.
- Nokia total mobile device volumes of 111.1 million units, up 8 percent year-on-year and 3 percent sequentially.
- Nokia converged mobile device (smartphone and mobile computer) volumes of 24 million units, up 42 percent year-on-year and 12 percent sequentially.
- Nokia mobile device ASP (including services revenue) of EUR 61, down from EUR 62 in Q1 2010.
- Devices & Services gross margin of 30.2 percent, down from 34 percent in Q2 2009 and 32.4 percent in Q1 2010.
- Devices & Services non-IFRS operating margin of 9.5 percent, down from 12.2 percent in Q2 2009 and 12.1 percent in Q1 2010.
- NAVTEQ non-IFRS net sales of EUR 253 million, up 71 percent year-on-year and 34 percent sequentially (up 69 percent and 30 percent at constant currency).
- Nokia Siemens Networks net sales of EUR 3 billion, down 5 percent year-on-year and up 12 percent sequentially (down 11 percent and up 10 percent at constant currency).
- Nokia Siemens Networks non-IFRS operating margin of 1.7 percent, up from 0.1 percent in Q2 2009 and 0.6 percent in Q1 2010.
- Nokia operating cash flow of EUR 944 million.
- Total cash and other liquid assets of EUR 9.5 billion at the end of Q2 2010.
- Nokia taxes were unfavorably impacted by Nokia Siemens Networks taxes as no tax benefits are recognized for certain Nokia Siemens Networks deferred tax items. If Nokia's estimated long-term tax rate of 26 percent had been applied, non-IFRS Nokia EPS would have been approximately half a Euro cent higher.

Olli-Pekka Kallasvoo, CEO, Nokia, said: "Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future. For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our Mobile Phones business, helped by an improving line-up of affordable models.

"In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia's fightback at the higher end of the market."Source: Nokia.


Industry and Nokia outlook
- Nokia expects Devices & Services net sales to be between EUR 6.7 billion and EUR 7.2 billion in the third quarter 2010.
- Nokia expects its non-IFRS operating margin in Devices & Services to be between 7 percent to 10 percent in the third quarter 2010.
- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks' net sales to be between EUR 2.7 billion and EUR 3.1 billion in the third quarter 2010.
- Nokia and Nokia Siemens Networks expect the non-IFRS operating margin in Nokia Siemens Networks to be between -2 percent and 2 percent in the third quarter 2010.
- Nokia continues to expect industry mobile device volumes to be up approximately 10 percent in 2010, compared to 2009 (based on its revised definition of the industry mobile device market applicable beginning in 2010).
- Nokia continues to target its mobile device volume market share to be flat in 2010, compared to 2009.
- Nokia continues to expect its mobile device value market share to be slightly lower in 2010, compared to 2009.
- Nokia continues to target non-IFRS operating expenses in Devices & Services of approximately EUR 5.7 billion in 2010.
- Nokia targets Devices & Services non-IFRS operating margin of 10 percent to 11 percent in 2010. This provides quantification in line with the June 16, 2010, revised target for Devices & Services non-IFRS operating margin for 2010 to be at the lower end of, or below, the previous target of 11 percent to 13 percent. Nokia continues to expect Devices & Services non-IFRS operating margin during the fourth quarter 2010 to be higher than the currently targeted full year Devices & Services non-IFRS operating margin.
- Nokia and Nokia Siemens Networks continue to expect a flat market in Euro terms for the mobile and fixed infrastructure and related services market in 2010, compared to 2009.
- Nokia and Nokia Siemens Networks now target Nokia Siemens Networks to maintain its market share in 2010. This is an update to Nokia and Nokia Siemens Networks earlier target for Nokia Siemens Networks to grow faster than the market in 2010.
- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks to reduce its non-IFRS annualized operating expenses and production overheads by EUR 500 million by the end of 2011, compared to the end of 2009.
- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks non-IFRS operating margin of breakeven to 2 percent in 2010.