Nokia Corporation Q4 and full year 2012 Interim Report

Nokia Corporation Q4 and full year 2012 Interim Report 
ESPOO, FINLAND -- (Marketwire) -- 01/24/13 --  


 
 
Nokia Corporation
Interim report
January 24, 2013 at 13.00 (CET+1)

 
This is a summary of the fourth quarter and full year 2012 interim
report published today. The complete fourth quarter and full year 2012
interim report
with tables is available at
http://www.results.nokia.com/results/Nokia_results2012Q4e.pdf.
Investors should
not rely on summaries of our interim reports only,
but should review the complete interim reports with tables. 
FINANCIAL AND OPERATING HIGHLIGHTS 
Fourth quarter 2012 highlights: 
Nokia Group non-IFRS EPS in Q4 2012 was EUR 0.06; reported EPS was
EUR 0.05. 
- Nokia Group achieves underlying operating profitability, with Q4
non-IFRS operating margin of 7.9%. 
- Nokia Group strengthened its net cash position by approximately EUR
800 million sequentially, of which approximately EUR 650 million was
generated by
Nokia Siemens Networks. 
- Devices & Services Q4 non-IFRS operating margin improved
quarter-on-quarter to 1.3%, due to an increase in gross margin as
well as a decrease in operating expenses. 
- Nokia Siemens Networks non-IFRS operating margin improved
quarter-on-quarter
and year-on-year to a 14.4% in Q4, the highest
level of underlying operating
profitability since its formation in
April 2007, primarily due to an increase in gross margin. 
Full year 2012 highlights: 
Nokia Group full year 2012 non-IFRS EPS was EUR -0.17; reported EPS
was EUR -0.84. 
- Nokia Group achieves underlying operating profitability, with full
year 2012
non-IFRS operating margin of 0.4%. 
- Nokia Group ends 2012 with a strong balance sheet and solid cash
position.
Gross cash was EUR 9.9 billion and net cash was EUR 4.4
billion, after incurring
cash outflows related to restructuring of
approximately EUR 1.5 billion and dividend payment of approximately
EUR 750 million. 
- To ensure strategic flexibility, the Nokia Board of Directors will
propose
that no dividend payment will be made for 2012 (EUR 0.20 per
share for 2011).
Nokia's Q4 financial performance combined with this
dividend proposal further
solidifies the company's strong liquidity
position. 
Commenting on the results, Stephen Elop, Nokia CEO, said: 
"We are very encourag
ed that our team's execution against our
business strategy
has started to translate into financial results.
Most notably we are pleased
that Nokia Group reached underlying
operating profitability in the fourth quarter and for the full year
2012. 
While the first half of 2012 was difficult for Nokia Group, in Q4
2012 we strengthened our financial position, improved our underlying
operating margin in Devices & Services, introduced the HERE brand to
expand our mapping and location
experiences, and drove record
profitability in Nokia Siemens Networks. 
We remain focused on moving through our transition, which includes
continuing to improve our product competitiveness, accelerate the way
we operate and manage
our costs effectively. All of these efforts are
aimed at improving our financial
performance and delivering more
value to our shareholders." 
SUMMARY FINANCIAL INFORMATION 


 
 
+---------------+-----------------------------------++-----------------
---+
|               |Reported and Non-IFRS              ||Reported and        |
|               |fourth quarter 2012 results1,2     ||Non-IFRS full year  |
|               |                                   ||2012 results1,2     |
|               +------+-------+-----+-------+------++------+------+------+
|EUR million    | Q4/  |Q4/    |YoY   |Q3/   |QoQ   ||      |      |YoY   |
|               | 2012 |2011   |Change|2012  |Change|| 2012 |  2011|Change|
 
+---------------+------+-------+------+------+------++------+-------+-----+
|Nokia Group    |      |       |      |      |      ||      |       |     |
|               |      |       |      |      |      ||      |       |     |
|Net sales      | 8 041| 10 005|  -20%| 7 239|   11%||30 176|38 659 | -22%|
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |   439|   -954|      |  -576|      ||-2 303| -1 073|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |      |       |      |      |      ||      |       |     |
|(non-IFRS)     |   635|    478|   33%|    78|  714%||   126|  1 825| -93%|
|               |      |       |      |      |      ||      |       |     |
|EPS, EUR       |      |       |      |      |      ||      |       |     |
|diluted        |  0.05|  -0.29|      | -0.26|      || -0.84|  -0.31|     |
|               |      |       |      |      |      ||      |       |     |
|EPS, EUR       |      |       |      |      |      ||      |       |     |
|diluted        |      |       |      |      |      ||      |       |     |
|(non-IFRS)3    |  0.06|   0.06|    0%| -0.07|      || -0.17|   0.29|     |
|               |      |       |      |      |      ||      |       |     |
|Net cash from  |      |       |      |      |      ||      |       |     |
|operating      |      |       |      |      |      ||      |       |     |
|activities     |   563|    634|  -11%|  -429|      ||  -354|  1 137|     |
|               |      |       |      |      |      ||      |       |     |
|Net cash and   |      |       |      |      |      ||      |       |     |
|other liquid   |      |       |      |      |      ||      |       |     |
|assets4        | 4 360|  5 581|  -22%| 3 564|   22%||  4360|  5 581| -22%|
+---------------+------+-------+------+------+------++------+-------+-----+
|Devices &      |      |       |      |      |      ||      |       |     |
|Services5      |      |       |      |      |      ||      |       |     |
|               |      |       |      |      |      ||      |       |     |
|Net sales      | 3 854|  5 997|  -36%| 3 563|    8%||15 686| 23 943| -34%|
|               |      |       |      |      |      ||      |       |     |
|Smart Devices  |      |       |      |      |      ||      |       |     |
|net sales      | 1 225|  2 747|  -55%|   976|   26%|| 5 446| 10 820| -50%|
|               |      |       |      |      |      ||      |       |     |
|Mobile Phones  |      |       |      |      |      ||      |       |     |
|net sales      | 2 468|  3 040|  -19%| 2 366|    4%|| 9 436| 11 930| -21%|
|               |      |       |      |      |      ||      |       |     |
|Mobile device  |      |       |      |      |      ||      |       |     |
|volume         |      |       |      |      |      ||      |       |     |
|(million units)|  86.3|  113.5|  -24%|  82.9|    4%|| 335.6|  417.1| -20%|
|               |      |       |      |      |      ||      |       |     |
|Smart Devices  |      |       |      |      |      ||      |       |     |
|volume         |      |       |      |      |      ||      |       |     |
|(million units)|   6.6|   19.6|  -66%|   6.3|    5%||  35.1|   77.3| -55%|
|               |      |       |      |      |      ||      |       |     |
|Mobile Phones  |      |       |      |      |      ||      |       |     |
|volume         |      |       |      |      |      ||      |       |     |
|(million units)|  79.6|   93.9|  -15%|  76.6|    4%|| 300.5|  339.8| -12%|
|               |      |       |      |      |      ||      |       |     |
|Mobile device  |      |       |      |      |      || 
     |       |     |
|ASP6           |    45|     53|  -15%|    43|    5%||    47|     57| -18%|
|               |      |       |      |      |      ||      |       |     |
|Smart Devices  |      |       |      |      |      ||      |       |     |
|ASP6           |   186|    140|   33%|   155|   20%||   155|    140|  11%|
|               |      |       |      |      |      ||      |       |     |
|Mobile Phones  |      |       |      |      |      ||      |       |     |
|ASP6           |    31|     32|   -3%|    31|    0%||    31|     35| -11%|
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |   276|    203|   36%|  -683|      ||-1 100|    884|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |      |       |      |      |      ||      |       |     |
|(non-IFRS)     |    52|    292|  -82%|  -263|      ||  -703|  1 683|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|margin %       |  7.2%|   3.4%|      |-19.2%|      || -7.0%|   3.7%|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|margin %       |      |       |      |      |      ||      |       |     |
|(non-IFRS)     |  1.3%|   4.9%|      | -7.4%|      || -4.5%|   7.0%|     |
+---------------+------+-------+------+------+------++------+-------+-----+
|Location &     |      |       |      |      |      ||      |       |     |
|Commerce5      |      |       |      |      |      ||      |       |     |
|               |      |       |      |      |      ||      |       |     |
|Net sales      |   278|    306|   -9%|   265|    5%|| 1 103|  1 091|   1%|
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |   -56| -1 205|      |   -56|      ||  -301| -1 526|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |      |       |      |      |      ||      |       |     |
|(non-IFRS)     |    40|     29|   38%|    37|    8%||   154|     48| 221%|
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|margin %       |-20.1%|-393.8%|      |-21.1%|      ||-27.3%|-139.9%|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|margin %       |      |       |      |      |      ||      |       |     |
|(non-IFRS)     | 14.4%|   9.5%|      | 14.0%|      || 13.9%|   4.4%|     |
+---------------+------+-------+------+------+------++------+-------+-----+
|Nokia Siemens  |      |       |      |      |      ||      |       |     |
|Networks5      |      |       |      |      |      ||      |       |     |
|               |      |       |      |      |      ||      |       |     |
|Net sales      | 3 988|  3 815|    5%| 3 501|   14%||13 779| 14 041|  -2%|
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |   251|     67|  275%|   182|   38%||  -799|   -300|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|profit         |      |       |      |      |      ||      |       |     |
|(non-IFRS)     |   575|    176|  227%|   323|   78%||   778|    225| 246%|
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|margin %       |  6.3%|   1.8%|      |  5.2%|      || -5.8%|  -2.1%|     |
|               |      |       |      |      |      ||      |       |     |
|Operating      |      |       |      |      |      ||      |       |     |
|margin %       |      |       |      |      |      ||      |       |     |
|(non-IFRS)     | 14.4%|   4.6%|      |  9.2%|      ||  5.6%|   1.6%|     |
+---------------+------+-------+------+------+------++------+-------+-----+

 
Note 1 relating to non-IFRS (also referred to as "underlying")
results: In addition to information on our reported IFRS results, we
provide certain information on a non-IFRS, or underlying business
performance, basis. Non-IFRS
results exclude special items for all
periods. In addition, non-IFRS results
exclude intangible asset
amortization, other purchase price accounting related
items and
inventory value adjustments arising from (i) the formation of
Nokia
Siemens Networks and (ii) all business acquisitions completed
after June 30, 2008.  Nokia believes that our non-IFRS results
provide meaningful supplemental information to both management and
investors regarding Nokia's underlying business performance by
excluding the above-described items that may
not be indicative of
Nokia's business operating results. These non-IFRS financial measures
should not be viewed in isolation or as substitutes to the
equivalent
IFRS measure(s), but should be used in conjunction with the most
directly comparable IFRS measure(s) in the reported results. See note
2 below
for information about the exclusions from our non-IFRS
results. More information, including a reconciliation of our Q4 2012
and Q4 2011 non-IFRS results to our reported results, can be found in
our complete Q4 2012 interim
report with tables on pages 18 and
20-24. A reconciliation of our full year 2012 and full year 2011
non-IFRS results to our reported results can be found in the same
report on pages 40-45.  A reconciliation of our Q3 2012 non-IFRS
results to our reported results can be found in our complete Q3
interim report
with tables on pages 19 and 22-26 published on October
18, 2012. 
Note 2 relating to non-IFRS exclusions: 
Q4 2012 - EUR 196 million (net) consisting of: 
- EUR 255 million restructuring charge and other associated item in
Nokia Siemens Networks, including EUR 34 million of net charges
related to country and contract exits based on new strategy that
focuses on key markets and product
segments,  as well  as an
impairment of assets of EUR 2 million. 
- EUR 9 million restructuring charge in Location & Commerce 
- EUR 2 million restructuring related impairments in Devices &
Services 
- EUR 75 million net benefit from releases of restructuring
provisions in Devices & Services 
- EUR 21 million positive item from a cartel claim settlements in
Devices & Services 
- EUR 52 million net gain on sale of Vertu business in Devices &
Services 
- EUR 79 million net gain on sale of real estate in Devices &
Services 
- EUR 67 million of intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia
Siemens Networks
and the acquisition of Motorola Solutions' networks
assets 
- EUR 87 million of intangible asset amortization and other purchase
price
 accounting related items arising from the acquisition of NAVTEQ 
- EUR 1 million of intangible assets amortization and other purchase
price related items arising from the acquisition of Novarra, MetaCarta
and Motally in Devices & Services 
Q3 2012 - EUR 654 million (net) consisting of: 
- EUR 74 million restructuring charge and other associated items in
Nokia Siemens Networks, including EUR 3 million of net charges related
to country and
contract exits based on new strategy that focuses on
key markets and product
segments. 
- EUR 2 million restructuring charge in Location & Commerce 
- EUR 454 million restructuring charge and other associated items in
Devices & Services 
- EUR 67 million of intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia
Siemens Networks
and the acquisition of Motorola Solutions' networks
assets 
- EUR 91 million of intangible asset amortization and other purchase
price accounting related items ari
sing from the acquisition of NAVTEQ 
- EUR 1 million of intangible assets amortization and other purchase
price related items arising from the acquisition of Novarra, MetaCarta
and Motally in Devices & Services 
- EUR 35 million positive item from a cartel claim settlement in
Devices & Services 
Q3 2012 taxes - EUR 157 million non-cash deferred tax expense related
to corporate reorganizations arising from Location & Commerce business
integration. 
Q4 2011 - EUR 1 432 million (net) consisting of: 
- EUR 1 090 million partial impairment of goodwill in Location &
Commerce 
- EUR 25 million restructuring charge in Location & Commerce 
- EUR 119 million of intangible asset amortization and other purchase
price accounting related items arising from the acquisition of NAVTEQ 
- EUR 100 million restructuring charge and EUR 36 million associated
impairments
in Devices & Services 
- EUR 2 million of intangible assets amortization and other purchase
price related items arising from the acquisition of Novarra, MetaCarta
and Motally in Devices & Services 
- EUR 86 million of intangible asset amortization and other purchase
price accounting related items arising from the formation of Nokia
Siemens Networks
and the acquisition of Motorola Solutions' networks
assets 
- EUR 23 million restructuring charge and other associated items in
Nokia Siemens Networks 
- EUR 49 million benefit from a cartel claim settlement 
Note 3 relating to non-IFRS Nokia EPS: 
Nokia taxes were unfavorably impacted by Devices & Services taxes as
no tax benefits are recognized for certain Devices & Services
deferred tax items. If
Nokia's earlier estimated long-term tax rate
of 26% had been applied, non-IFRS
Nokia EPS would have been
approximately 0.5 Euro cent higher in Q4 2012. Going
forward on a
non-IFRS basis, until a pattern of tax profitability is
reestablished, Nokia expects to record quarterly tax expense of
approximately
EUR 50 million related to its Devices & Services
business and approximately EUR
50 million related to its Nokia
Siemens Networks business. Nokia expects to continue to record taxes
related to its Location & Commerce business at a 26%
rate. 
Note 4 relating to Nokia net cash and other liquid assets: Calculated
as total
cash and other liquid assets less interest-bearing
liabilities. For selected
information on Nokia Group interest-bearing
liabilities, please see the table on page 53 of the complete Q4 2012
interim report with tables 
Note 5 relating to operational and reporting structure: We adopted
our current
operational structure during 2011 and have three
businesses: Devices & Services,
Location & Commerce and Nokia Siemens
Networks and four operating and reportable
segments: Smart Devices
and Mobile Phones within Devices & Services, Location & Commerce and
Nokia Siemens Networks. Smart Devices focuses on smartphones
and
Mobile Phones focuses on mass market mobile devices, including
Asha full touch
smartphones. Devices & Services also contains Devices
& Services Other which
includes net sales of our luxury phone
business Vertu through October 12, 2012,
spare parts and related cost
of sales and operating expenses, as well as intellectual property
related income and common research and development expenses. In
October 2012, we completed the divestment of Vertu to EQT VI,
a
European private equity firm.  Location & Commerce focuses on the
development of location-based services and local commerce. On
November 13, 2012, Nokia introduced HERE, the new brand for its
location and mapping service. For financial reporting purposes, the
Location & Commerce business will be renamed
as the HERE business,
starting with the first quarter 2013. Nokia Siemens Networks is one
of the leading global providers of telecommunications infrastructure
hardware, software and services. Nokia Siemens Networks completed
the
acquisition of Motorola Solutions' networks assets on April 30, 2011.
Accordingly, the results of Nokia Siemens Networks for 2012 are not
directly
comparable to 2011. 
Note 6 relating to average selling prices (ASP): Mobile device ASP
represents
total Devices & Services net sales (Smart Devices net
sales, Mobile Phones net
sales, and Devices & Services Other net
sales) divided by total Devices & Services volumes. Devices &
Services Other net sales includes net sales of Nokia's luxury phone
business Vertu through October 12, 2012, spare parts, as
well as
intellectual property income. Smart Devices ASP represents Smart
Devices
net sales divided by Smart Devices volumes. Mobile Phones ASP
represents Mobile
Phones net sales divided by Mobile Phones volumes. 
NOKIA OUTLOOK 
- Nokia expects its Devices & Services non-IFRS operating margin in
the first
quarter 2013 to be approximately negative 2 percent, plus or
minus four percentage points. This outlook is based on Nokia's
expectations regarding a
number of factors, including: 
- competitive industry dynamics continuing to negatively affect the
Mobile Phones and Smart Devices business units; 
- the first quarter being a seasonally weak quarter; 
- consumer demand, particularly for our Lumia and Asha smartphones; 
- continued ramp up for our new Lumia smartphones; 
- expected cost reductions under Devices & Services' restructuring
program; and 
- the macroeconomic environment. 
- Nokia continues to target to reduce its Devices & Services non-IFRS
operating
expenses to an annualized run rate of approximately EUR 3.0
billion by the end
of 2013. 
- Nokia expects Location & Commerce non-IFRS operating margin in the
first quarter 2013 to be negative due to lower recognized revenue from
internal sales,
which carry higher gross margin, and to a lesser
extent by a negative mix shift
within external sales. 
- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks
non-IFRS operating margin in the first quarter 2013 to be
approximately positive 3 percent, plus or minus four percentage
points.  This outlook is based on Nokia
Siemens Networks'
expectations regarding a number of factors, including: 
- competitive industry dynamics; 
- the first quarter being a seasonally weak quarter; 
- product and regional mix; 
- expected continued improvement under Nokia Siemens Networks'
restructuring
program; and 
- the macroeconomic environment. 
- Nokia Siemens Networks now targets to reduce its non-IFRS
annualized operating
expenses and production overheads by more than
EUR 1 billion by the end of 2013, compared to the end of 2011. Nokia
Siemens Networks previous target was to reduce its non-IFRS
annualized operating expenses and production overheads by
EUR 1
billion by the end of 2013, compared to the end of 2011. 
FOURTH QUARTER 2012 FINANCIAL AND OPERATING DISCUSSION 
NOKIA GROUP 
See note 5 to our Summary Financial Information table above
concerning our current operational and reporting structure which we
adopted during 2011. The
following discussion includes information on
a non-IFRS, or underlying business
performance, basis. See no
tes 1
and 2 to our Summary Financial Information table
above for
information about our underlying non-IFRS results and the
non-IFRS
exclusions for the periods discussed below. 
The following table sets forth the year-on-year and sequential growth
rates in
our net sales on a reported basis and at constant currency
for the periods
indicated. 


 
 
+----------------------------------------------------------------+
| FOURTH QUARTER 2012 NET SALES,                                 |
| REPORTED & CONSTANT CURRENCY1                                  |
+--------------------------------------+------------+------------+
|                                      | YoY Change | QoQ Change |
+--------------------------------------+------------+------------+
| Group net sales - reported           |    -20%    |    11%     |
|                                      |            |            |
| Group net sales - constant currency1 |    -23%    |    12%     |
|                                      |            |            |
| Devices & Services                   |            |            |
| net sales -reported                  |    -36%    |     8%     |
|                                      |            |            |
| Devices & Services                   |            |            |
| net sales - constant currency1       |    -40%    |     8%     |
|                                      |            |            |
| Nokia Siemens Networks               |            |            |
| net sales -reported                  |     5%     |    14%     |
|                                      |            |            |
| Nokia Siemens Networks               |            |            |
| net sales - constant currency1       |     1%     |    16%     |
+--------------------------------------+------------+------------+

  
Note 1: Change in net sales at constant currency excludes the impact
of changes
in exchange rates in comparison to the Euro, our reporting
currency. 
At constant currency Nokia Group's net sales would have decreased 23%
year-on-year and increased 12% sequentially. 
The following table sets forth Nokia Group's reported cash flow for
the periods
indicated and financial position at the end of the periods
indicated, as well as the year-on-year and sequential growth rates. 


 
 
+----------------------------------------------------------------+
| NOKIA GROUP CASH FLOW                                          |
| AND FINANCIAL POSITION                                         |
+---------------------+--------+--------+-------+--------+-------+
|                     |        |        |   YoY |        |   QoQ |
| EUR million         |Q4/2012 |Q4/2011 |Change |Q3/2012 |Change |
+---------------------+--------+--------+-------+--------+-------+
| Net cash from       |        |        |       |        |       |
| operating activities|    563 |    634 | -11%  |   -429 |       |
+---------------------+--------+--------+-------+--------+-------+
| Total cash and      |        |        |       |        |       |
| other liquid assets |  9 909 | 10 902 | -9%   |  8 779 | 13%   |
+---------------------+--------+--------+-------+--------+-------+
| Net cash and        |        |        |       |        |       |
| other liquid assets1|  4 360 |  5 581 | -22%  |  3 564 | 22%   |
+---------------------+--------+--------+-------+--------+-------+

 
Note 1: Total cash and other liquid assets minus interest-bearing
liabilities. 
Year-on-year, net cash and other liquid assets decreased by EUR 1.2
billion in
the fourth quarter 2012, primarily due to cash outflows
related to restructuring
of approximately EUR 1.5 billion, the
payment of the dividend of approximately
EUR 750 million, cash
outflows related to net financial expenses and taxes as
well as
capital expenditures. This was partially offset by positive overall
net
cash from operating activities, excluding cash outflows related
to restructuring, net financial expenses and taxes, as well as cash
flows related
to the receipt of quarterly platform support payments
from Microsoft (which commenced in the fourth quarter 2011). 
Sequentially, net cash and other liquid assets increased by EUR 796
million in
the fourth quarter 2012, primarily due to positive Nokia
Siemens Networks operating profits, the receipt of a USD 250 million
(approximately EUR 196 million) quarterly platform support payment
from Microsoft and proceeds from
real estate sales and business
divestments, partially offset by cash outflows
related to
restructuring, taxes and net financial expenses as well as
capital
expenditures. 
In the fourth quarter 2012, Nokia Siemens Networks' contribution to
net cash
from operating activities was approximately EUR 740 million,
primarily due to
net profit adjusted for non-cash items. At the end
of the fourth quarter 2012,
Nokia Siemens Networks' contribution to
the Nokia gross cash was EUR 2.4 billion
and contribution to Nokia's
net cash was EUR 1.3 billion. 
Our agreement with Microsoft includes platform support payments from
Microsoft
to us as well as software royalty payments from us to
Microsoft.  In the fourth
quarter 2012, we received a quarterly
platform support payment of USD 250 million (approximately EUR 196
million). Under the terms of the agreement governing the platform
support payments, the amount of each quarterly platform
support
payment is USD 250 million. We have a competitive software royalty
structure, which includes annual minimum software royalty
commitments. Minimum
software royalty commitments are paid quarterly.
Over the life of the agreement,
both the platform support payments
and the minimum software royalty commitments
are expected to measure
in the billions of US dollars. Over the life of the agreement the
total amount of the platform support payments is expected to slightly
exceed the total amount of the minimum software royalty commitment
payments. To date the amount of platform support payments received by
Nokia has
exceeded the amount of minimum royalty commitment payments
to Microsoft. Thus
for the remainder of the life of the agreement the
total amount of the minimum
software royalty commitment payments are
expected to exceed the total amount of the platform support payments.
In accordance with the terms of the agreement,
the platform support
payments and annual minimum software royalty commitment
payments
continue for a corresponding period of time. 
During fourth quarter 2012, Nokia Group performed its annual goodwill
impairment
assessment. The methodology and models used for the annual
impairment assessment
are consistent with our second quarter 2012
interim analysis and our last annual
assessment performed during the
fourth quarter 2011.  Inputs to the valuation
model, such as cash
flows, discount rates and growth rates, have been updated to reflect
our most recent projections and they materially align with the
interim
analysis conducted during second quarter 2012. 
At the date of our 2012 annual impairment assessment, goodwill
amounting to EUR
530 million, EUR 899 million, EUR 3 270 million and
EUR 183 million was allocated to Mobile Phones, Smart Devices,
Location & Commerce and Nokia Siemens
Networks, respectively. No
goodwill impairment charge was recorded during the
fourth quarter
2012 as a result of the goodwill impairment assessment. However a
change in any of the key assumptions used in measuring the
recoverable value of our Location & Commerce business could have
resulted in goodwill impairment.
While we believe the estimated
recoverable values are reasonable, actual performance in the
short-term and long-term could be materially different from
our
forecasts, which could impact future estimates of recoverable value
of our
reporting units and could result in impairment charges. 
DEVICES & SERVICES 
The following table sets forth a summary of the results for our
Devices & Services business for the periods indicated, as well as the
year-on-year and
sequential growth rates. 


 
 
 
+----------------------------------------------------------------------
---+
| DEVICES & SERVICES                                                      |
| RESULTS SUMMARY                                                         |
+--------------------------+--------+---------+--------+---------+--------+
|                          |        |         |    YoY |         |    QoQ |
|                          |Q4/2012 | Q4/2011 | Change | Q3/2012 | Change |
+--------------------------+--------+---------+--------+---------+--------+
| Net sales (EUR million)1 |  3 854 |   5 997 |   -36% |   3 563 |     8% |
+--------------------------+--------+---------+--------+---------+--------+
| Mobile device volume     |        |         |        |         |        |
| (million units)          |   86.3 |   113.5 |   -24% |    82.9 |     4% |
+--------------------------+--------+---------+--------+---------+--------+
| Mobile device ASP (EUR)  |     45 |      53 |   -15% |      43 |     5% |
+--------------------------+--------+---------+--------+---------+--------+
| Non-IFRS gross margin (%)|  23.9% |   25.8% |        |   18.5% |        |
+--------------------------+--------+---------+--------+---------+--------+
| Non-IFRS operating       |        |         |        |         |        |
| expenses (EUR million)   |    869 |   1 262 |   -31% |     915 |    -5% |
+--------------------------+--------+---------+--------+---------+--------+
| Non-IFRS operating       |        |         |        |         |        |
| margin (%)               |   1.3% |    4.9% |        |   -7.4% |        |
+--------------------------+--------+---------+--------+---------+--------+

 
Note 1: Includes IPR income recognized in Devices & Services Other net
sales. 
The year-on-year and sequential changes in our Devices & Services net
sales,
volumes, average selling prices and gross margin are discussed
below under our
Smart Devices and Mobile Phones business units. 
Smartphone Volumes 
In the fourth quarter 2012, Devices & Services total smartphone
volumes were
15.9 million units, composed of: 
- 9.3 million Asha full touch smartphones in Mobile Phones 
- 4.4 million Lumia smartphones in Smart Devices 
- 2.2 million Symbian smartphones in Smart Devices 
Devices & Services Other 
Both year-on-year and sequentially, Devices & Services Other net
sales were lower in the fourth quarter 2012 primarily due to the
divestment of Vertu. Following the divestment of Vertu, Devices &
Services Other net sales are comprised of IPR income and sales of
spare parts. In the fourth quarter 2012,
Devices & Services Other net
sales benefitted from non-recurring IPR income of
approximately EUR
50 million. Within Devices & Services Other, we estimate that
our
current annual IPR income run-rate is approximately EUR 0.5 billion. 
Channel Inventory 
We ended the fourth quarter 2012 at the higher end of our normal 4 to
6 week
channel inventory range. On an absolute unit basis channel
inventories increased
sequentially. 
Net Sales and Volumes by Geographic Area 
The following table sets forth the net sales for our Devices &
Services business
for the periods indicated, as well as the
year-on-year and sequential growth
rates, by geographic area. IPR
income is allocated to the geographic areas contained in this chart. 


 
 
+----------------------------------------------------------------------
+
| DEVICES & SERVICES NET SALES                                         |
| BY GEOGRAPHIC AREA                                                   |
+----------------------+---------+---------+--------+---------+--------+
|                      |         |         |    YoY |         |    QoQ |
| EUR million          | Q4/2012 | Q4/2011 | Change | Q3/2012 | Change |
+----------------------+---------+---------+--------+---------+--------+
| Europe               |   1 210 |   1 922 |   -37% |     985 |    23% |
|                      |         |         |        |         |        |
| Middle East & Africa |     745 |   1 065 |   -30% |     682 |     9% |
|                      |         |         |        |         |        |
| Greater China        |     213 |   1 008 |   -79% |     278 |   -23% |
|                      |         |         |        |         |        |
| Asia-Pacific         |     941 |   1 297 |   -27% |     977 |    -4% |
|                      |         |         |        |         |        |
| North America        |     196 |      53 |   270% |      36 |   444% |
|                      |         |         |        |         |        |
| Latin America        |     549 |     652 |   -16% |     605 |    -9% |
+----------------------+---------+---------+--------+---------+--------+
| Total                |   3 854 |   5 997 |   -36% |   3 563 |     8% |
+----------------------+---------+---------+--------+---------+--------+

 
The following table sets forth the mobile device volumes for our
Devices & Services business for the periods indicated, as well as the
year-on-year and
sequential growth rates, by geographic area. 


 
 
+----------------------------------------------------------------------
+
| DEVICES & SERVICES MOBILE DEVICE                                     |
| VOLUMES BY GEOGRAPHIC AREA                                           |
+----------------------+---------+---------+--------+---------+--------+
|                      |         |         |    YoY |         |    QoQ |
| million units        | Q4/2012 | Q4/2011 | Change | Q3/2012 | Change |
+----------------------+---------+---------+--------+---------+--------+
| Europe               |    19.4 |    25.3 |   -23% |    16.8 |    15% |
|                      |         |         |        |         |        |
| Middle East & Africa |    21.8 |    25.9 |   -16% |    19.1 |    14% |
|                      |         |         |        |         |        |
| Greater China        |     4.6 |    14.7 |   -69% |     5.8 |   -21% |
|                      |         |         |        |         |        |
| As
ia-Pacific         |    28.7 |    34.7 |   -17% |    30.1 |    -5% |
|                      |         |         |        |         |        |
| North America        |     0.7 |     0.5 |    40% |     0.3 |   133% |
|                      |         |         |        |         |        |
| Latin America        |    11.1 |    12.4 |   -10% |    10.8 |     3% |
+----------------------+---------+---------+--------+---------+--------+
| Total                |    86.3 |   113.5 |   -24% |    82.9 |     4% |
+----------------------+---------+---------+--------+---------+--------+

 
On a year-on-year basis, the increases in North America net sales and
volumes
were primarily due to our Smart Devices business unit, most
notably higher net
sales and volumes of our Lumia devices. On a
year-on-year basis, the decrease in Greater China net sales was
primarily due to our Smart Devices business unit,
most notably lower
net sales of our Symbian devices. On a year-on-year basis,
the
decrease in Greater China volumes was primarily due to our Smart
Devices
business unit, most notably lower volumes of our Symbian
devices as well as lower volumes of our Mobile Phones devices. 
On a sequential basis, the increases in North America net sales and
volumes were
primarily due to our Smart Devices business unit, most
notably higher net sales
and volumes of our Lumia devices. On a
sequential basis, the decreases in Greater China net sales and
volumes were primarily due to lower net sales and
volumes our Mobile
Phones devices. 
At constant currency Devices & Services' net sales would have
decreased 40% year-on-year and increased 8% sequentially. 
Operating Expenses 
Devices & Services non-IFRS operating expenses decreased 31%
year-on-year and
5% sequentially in the fourth quarter 2012. On a
year-on-year basis, operating
expenses related to Mobile Phones and
Smart Devices decreased 19% and 34% respectively, in the fourth
quarter 2012. On a sequential basis, operating expenses related to
Mobile 
Phones decreased by 12% while Smart Devices operating
expenses
increased 9%, respectively, in the fourth quarter 2012. In addition
to the factors described below, the year-on-year changes were affected
by the proportionate allocation of operating expenses being affected
by the relative
mix of sales and gross profit performance between
Mobile Phones and Smart Devices. This resulted in higher and lower
relative allocations to Mobile Phones
and Smart Devices,
respectively. 
Devices & Services non-IFRS research and development expenses
decreased 34% year-on-year in the fourth quarter 2012. On a
sequential basis, Devices & Services non-IFRS research and
development expenses decreased 8% in the fourth
quarter 2012. Both
the year-on-year and sequential declines were primarily due
to
ramping down Symbian and MeeGo, reductions in certain Mobile Phones
related
activities and overall cost controls. 
Devices & Services non-IFRS sales and marketing expenses decreased
28% year-on-year in the fourth quarter 2012. On a year-on-year basis
marketing expenses
declined primarily due to lower marketing
expenditure on Symbian, a lower cost
base as a result of business
divestments and tight cost control, partially offset by higher
marketing expenditure related to our Lumia devices. On a sequential
basis, Devices & Services non-IFRS sales and marketing expenses
increased 3% in the fourth quarter 2012. Sequentially, marketing
expenses increased primarily due to higher expenditure on Lumia and
seasonality, partially offset by business divestments, headcount
reductions and tight cost
control. 
Devices & Services non-IFRS administrative and general expenses
decreased 30%
year-on-year in the fourth quarter 2012 and 35%
sequentially. The year-on-year
and sequential decreases are primarily
related to cost savings in support functions, business divestments
and shared function cost categorization. 
In the fourth quarter 2012, Devices & Services non-IFRS other income
and expense
had a negative year-on-year and positive sequential impact
on profitability. On a reported basis, other income and expense was
positively affected in the fourth
quarter 2012 primarily as a result
of net gains from the sale of real estate of EUR 79 million, the
divestment of the Vertu business of EUR 52 million and a
positive
item of EUR 21 million from a cartel claim settlement, as well as
an
EUR 75 million net benefit related to restructuring provision
releases as discussed in the "Cost Reduction Activities and Planned
Operational Adjustments"
section below. 
Operating Margin 
The lower year-on-year Devices & Services non-IFRS operating margin
in the fourth quarter 2012 was primarily due to lower net sales and
gross margin, partially offset by lower operating expenses. 
The sequentially higher Devices & Services non-IFRS operating margin
in the fourth quarter 2012 was primarily due to higher gross margin
and to a lesser
extent lower operating expenses. 
Cost Reduction Activities and Planned Operational Adjustments 


 
 
+----------------------------------------------------------------------
---+
|DEVICES & SERVICES RESTRUCTURING SUMMARY                                 |
+-------------+-------------+-------------+---------+--------+------------+
|             |             |             |  Q1/2013|   2013 |            |
|             |             |Cumulative up|(approxi-|(approx-|       Total|
|             |      Q4/2012|  to  Q4/2012|     mate|   imate|(approximate|
|EUR (million)|(approximate)|(approximate)|estimate)|estimate|   estimate)|
+-------------+-------------+-------------+---------+--------+------------+
|Restructuring|             |             |         |        |            |
|related      |             |             |      Not|     Not|            |
|charges      |          -73|        1 400| provided|provided|       1 600|
+-------------+-------------+-------------+---------+--------+------------+
|Restructuring|             |             |         |        |            |
|related cash |             |             |         |        |            |
|outflows     |          300|        1 100|      150|     300|       1 400|
+-------------+-------------+-------------+---------+--------+------------+

 
Nokia continues to target to reduce its Devices & Services non-IFRS
operating
expenses to an annualized run rate of approximately EUR 3.0
billion by the end
of 2013. 
At the end of the fourth quarter 2012, Devices & Services and
Corporate Common
had approximately 33 200 employees, a reduction of
approximately 16 500 compared
to fourth quarter 2011, and
approximately 5 000 compared to third quarter 2012. 
In connection with the implementation of our strategy announced in
February 2011, we have announced and made a number of changes to our
operations. In the
fourth quarter of 2012, we recognized a net
benefit of EUR 73 million related to restructuring provision releases
and impairments related to our restructuring
activities in Devices &
Services. By the end of the fourth quarter 2012, we had
recorded
cumulative Devices & Services restructuring charges and other
associated items of approximately EUR 1.4 billion. In total, we
expect now cumulative Devices & Services restructuring charges of
approximately EUR 1.6
billion before the end of 2013. This is
approximately EUR 200 million less than
what we estimated earlier. 
By the end of the fourth quarter 2012, Devices & Services had
cumulative restructuring related cash outflows of approximately EUR
1.1 billion. We expect
Devices & Services restructuring related cash
outflows to be approximately EUR
150 million in first quarter 2013
and approximately EUR 300 million in full year
2013. Of the total
expected charges relating to restructuring activities of
approximately EUR 1.6 billion, we expect Devices & Services non-cash
charges to be approximately EUR 200 million. This means that we also
now expect total restructuring related cash outflows to be
approximately EUR 200 million less
than what we estimated earlier. 
SMART DEVICES 
The following table sets forth a summary of the results for our Smart
Devices
business unit for the periods indicated, as well as the
year-on-year and sequential growth rates. 


 
 
+----------------------------------------------------------------------
---+
| SMART DEVICES                                                           |
| RESULTS SUMMARY                                                         |
+--------------------------+---------+---------+--------+--------+--------+
|                          |         |         |    YoY |        |    QoQ |
|                          | Q4/2012 | Q4/2011 | Change |Q3/2012 | Change |
+--------------------------+---------+---------+--------+--------+--------+
| Net sales (EUR million)1 |   1 225 |   2 747 |   -55% |    976 |    26% |
+--------------------------+---------+---------+--------+--------+--------+
| Smart Devices volume     |         |         |        |        |        |
| (million units)          |     6.6 |    19.6 |   -66% |    6.3 |     5% |
+--------------------------+---------+---------+--------+--------+--------+
| Smart Devices ASP (EUR)  |     186 |     140 |    33% |    155 |    20% |
+--------------------------+---------+---------+--------+--------+--------+
| Gross margin (%)         |   18.0% |   19.9% |        |  -3.5% |        |
+--------------------------+---------+---------+--------+--------+--------+
| Operating expenses       |         |         |        |        |        |
| (EUR million)2           |     481 |     732 |   -34% |    441 |     9% |
+--------------------------+---------+---------+--------+--------+--------+
| Contribution margin (%)2 |  -21.6% |   -7.0% |        | -48.9% |        |
+--------------------------+---------+---------+--------+--------+--------+

 
Note 1: Does not include IPR income. IPR income is recognized in
Devices & Services Other net sales. 
Note 2: The year-on-year decrease in operating expenses was affected
by the proport
ionate allocation of operating expenses being affected
by the relative
mix of sales and gross profit performance between
Mobile Phones and Smart Devices, resulting in lower relative
allocations to Smart Devices in the first,
second, third and fourth
quarters 2012. Accordingly, fourth quarter 2012 operating expenses
are not directly comparable to fourth quarter 2011
operating
expenses. 
Net Sales 
On a year-on-year basis, the decline in our Smart Devices net sales
in the fourth quarter 2012 was due to lower volumes partially offset
by higher ASPs. On a sequential basis, the increase in our Smart
Devices net sales in the fourth
quarter 2012 was due to higher ASPs
and volumes. 
Volume 
During the fourth quarter 2012 we shipped 6.6 million Smart Devices
units, of
which 4.4 million were Lumia devices. During the fourth
quarter 2012 our Smart
Devices volumes were affected by supply
constraints as we ramped up our production capacity, particularly
related to the Lumia 920, which have continued
into the first quarter
2013. Symbian devices accounted for 2.2 million units of our Smart
Devices volumes in the fourth quarter 2012. We expect our Symbian
devices to account for a significantly smaller portion of our overall
Smart Devices volumes in the first quarter 2013 and going forward. 
The year-on-year decline in our Smart Devices volumes in the fourth
quarter 2012 continued to be driven by the strong momentum of
competing smartphone platforms and our portfolio transition from
Symbian devices to Lumia devices.
The decline was primarily due to
lower Symbian device volumes, partially offset
by higher Lumia device
volumes. On a geographical basis, the decrease in volumes
was due to
lower volumes in Greater China, Europe, Asia-Pacific, Middle East and
Africa and Latin America, partially offset by an increase in volumes
in North
America. 
On a sequential basis, the increase in our Smart Devices volumes in
the fourth
quarter 2012 was primarily due to higher Lumia device
volumes,
 partially offset
by lower Symbian device volumes. On a
geographical basis, the increase in volumes was primarily due to
higher volumes in North America and Europe, partially offset by lower
volumes in all other regions. 
Average Selling Price 
The year-on-year increase in our Smart Devices ASP in the fourth
quarter 2012
was primarily due to a positive mix shift towards sales
of our Lumia devices
which carry a higher ASP than our Symbian
devices, partially offset by our pricing actions taken in previous
quarters in 2012 related to certain Lumia devices. 
Sequentially, the increase in our Smart Devices ASP in the fourth
quarter 2012
was primarily due to a positive mix shift towards sales
of our newly launched
Lumia devices which had a higher ASP, partially
offset by general price erosion.
The ASP of our Lumia devices in the
fourth quarter 2012 was EUR 192, compared to EUR 160 in the third
quarter 2012. The increase in Lumia ASPs was primarily due
to a
positive mix shift towards sales of our newly launched Lumia devices
which
had a higher ASP. 
Gross Margin 
The year-on-year decline in our Smart Devices gross margin in the
fourth quarter
2012 was primarily due to greater price erosion than
cost erosion, partially
offset by a positive product mix shift
towards higher gross margin Lumia devices
as well as the absence of
Symbian related allowances which were recognized in
the fourth
quarter 2011. From an operating system perspective, the
year-on-year
decline in our Smart Devices gross margin in the fourth
quarter 2012 was primarily due to a lower Symbian gross margin. 
On a sequential basis, the increase in our Smart Devices gross margin
in the
fourth quarter 2012 was primarily due to the absence of
approximately EUR 120
million of inventory related allowances which
were recognized in the third quarter 2012 as well as a positive
product mix shift towards higher gross margin
devices, and lower
Symbian fixed costs per unit. From an operating system perspective,
the sequential increase in our Smart Devices gross margin in
the
fourth quarter was primarily due to a higher Lumia gross margin
as well as a
higher Symbian gross margin. 
Increases or decreases to Smart Devices inventory related allowances
may be required in the future depending on several factors, including
consumer demand
and continued ramp up particularly related to our new
Lumia devices. 
MOBILE PHONES 
The following table sets forth a summary of the results for our
Mobile Phones
business unit for the periods indicated, as well as the
year-on-year and sequential growth rates. 


 
 
+----------------------------------------------------------------------
---+
|MOBILE PHONES                                                            |
|RESULTS SUMMARY                                                          |
+------------------------------------+-------+-------+------+------+------+
|                                    |    Q4/|    Q4/|   YoY|   Q3/|   QoQ|
|                                    |   2012|   2011|Change|  2012|Change|
+------------------------------------+-------+-------+------+------+------+
|Net sales (EUR million)1            |  2 468|  3 040|  -19%| 2 366|    4%|
+------------------------------------+-------+-------+------+------+------+
|Mobile Phones volume (million units)|   79.6|   93.9|  -15%|  76.6|    4%|
+------------------------------------+-------+-------+------+------+------+
|Mobile Phones ASP (EUR)             |     31|     32|   -3%|    31|    0%|
+------------------------------------+-------+-------+------+------+------+
|Gross margin (%)                    |  22.2%|  27.7%|      | 21.7%|      |
+------------------------------------+-------+-------+------+------+------+
|Operating expenses (EUR million)2   |    346|    429|  -19%|   393|  -12%|
+------------------------------------+-------+-------+------+------+------+
|Contribution margin (%)2            |   8.2%|  13.5%|      |  4.9%|      |
+------------------------------------+-------+-------+------+------+------+

 
Note 1: Does not include IPR income. IPR income is recognized in
Devices & Services Other net sales. 
Note 2: The year-on-year decrease in operating expenses was affected
by the proportionate allocation of operating expenses being affected
by the relative
mix of sales and gross profit performance between
Mobile Phones and Smart Devices, resulting in higher relative
allocations to Mobile Phones in the first,
second, third and fourth
quarters 2012. Accordingly, fourth quarter 2012 operating expenses
are not directly comparable to fourth quarter 2011
operating
expenses. 
Net Sales 
On a year-on-year basis, the decline in our Mobile Phones net sales
in the fourth quarter 2012 was due to lower volumes as well as lower
ASPs. On a sequential basis, the increase in our Mobile Phones net
sales in the fourth quarter 2012 was primarily due to higher volumes. 
Volume 
During the fourth quarter 2012 we shipped 79.6 million Mobile Phones
units, of
which 9.3 million were Asha full touch smartphones. 
On a year-on-year basis, the decrease in our Mobile Phones volumes in
the fourth
quarter 2012 was primarily due to the decline in volumes of
our lower priced
devices that we sell to our customers for below EUR
30. Overall volumes of our
higher priced devices that we sell to our
customers for above EUR 30 also declined, despite the addition of
Asha full touch smartphone volumes in the fourth quarter 2012. 
On a sequential basis, the increase in our Mobile Phones volumes in
the fourth
quarter 2012 was primarily due to the increase in volumes
of our lower priced
devices that we sell to our customers for below
EUR 30. Volumes of our higher
priced devices that we sell to our
customers for above EUR 30 also increased,
partially due to growth in
volumes of our Asha full touch smartphones. 
Average Selling Price 
The year-on-year decline in our Mobile Phones ASP in the fourth
quarter 2012 was primarily due to general price erosion and an
increased pro
portion of sales of
lower priced devices, partially
offset by the net positive impact related to
foreign currency
fluctuations. 
On a sequential basis, our Mobile Phones ASP was flat in the fourth
quarter 2012 as a mix shift towards higher priced devices, including
our full touch Asha
smartphones, as well as the net positive impact
from foreign currency fluctuations were offset by general price
erosion. 
Gross Margin 
The year-on-year decline in our Mobile Phones gross margin in the
fourth quarter
2012 was primarily due to a negative product mix shift
towards lower gross margin devices, as well as the net negative
impact related to foreign currency
fluctuations. 
On a sequential basis, the increase in our Mobile Phones gross margin
in the
fourth quarter 2012 was primarily due to greater cost erosion
than price erosion, partially offset by the net negative impact
related to foreign currency
fluctuations. 
LOCATION & COMMERCE 
On November 13, 2012, Nokia introduced HERE, the new brand for its
location and
mapping service. For financial reporting purposes, the
Location & Commerce business will be renamed as the HERE business,
starting with the first quarter
2013. 
The following table sets forth a summary of the results for Location
& Commerce
for the periods indicated, as well as the year-on-year and
sequential
growth
rates. 


 
 
+----------------------------------------------------------------------
+
|LOCATION & COMMERCE                                                   |
|RESULTS SUMMARY                                                       |
+--------------------------------+-------+-------+------+-------+------+
|                                |       |       |   YoY|       |   QoQ|
|                                |Q4/2012|Q4/2011|Change|Q3/2012|Change|
+--------------------------------+-------+-------+------+-------+------+
|Net sales (EUR millions)        |    278|    306|   -9%|    265|    5%|
+--------------------------------+-------+-------+------
+-------+------+
|External net sales (EUR million)|    204|    200|    2%|    179|   14%|
+--------------------------------+-------+-------+------+-------+------+
|Internal net sales (EUR million)|     74|    106|  -30%|     86|  -14%|
+--------------------------------+-------+-------+------+-------+------+
|Non-IFRS gross margin (%)       |  82.0%|  77.8%|      |  80.4%|      |
+--------------------------------+-------+-------+------+-------+------+
|Non-IFRS operating              |       |       |      |       |      |
|expenses (EUR million)          |    189|    206|   -8%|    175|    8%|
+--------------------------------+-------+-------+------+-------+------+
|Non-IFRS operating              |       |       |      |       |      |
|margin (%)                      |  14.4%|   9.5%|      |  14.0%|      |
+--------------------------------+-------+-------+------+-------+------+

 
Net Sales 
In the fourth quarter 2012, the year-on-year increase in external
Location &
Commerce net sales was primarily due to higher sales of map
content licenses to vehicle customers due to higher consumer uptake of
vehicle navigation systems.
In the fourth quarter 2012, the
sequential increase in external Location & Commerce net sales was
primarily due to a higher consumer uptake of vehicle navigation
systems as well as seasonally higher sales to personal
navigation
devices customers. 
In the fourth quarter 2012, the year-on-year and sequential declines
in internal
Location & Commerce net sales were due to declines in
sales to our Smart Devices
business unit. 
Gross Margin 
On a year-on-year basis, the increase in Location & Commerce non-IFRS
gross margin in the fourth quarter 2012 was primarily due to lower
deferred cost of
sales associated with internal sales and a higher
gross margin within the vehicle segment, partially offset by lower
sales to personal navigation device
customers. 
On a sequential basis, the increase in Location & Commerce non-IFRS
gross margin
in the fourth quarter 2012 was primarily due to lower
deferred cost of sales
associated with internal sales, a higher gross
margin within the vehicle segment, and seasonally higher sales to
personal navigation device customers. 
Operating Expenses 
Location & Commerce non-IFRS research and development expenses
decreased 10%
year-on-year due to cost reductions. On a sequential
basis, research and development expenses increased 5% sequentially in
the fourth quarter 2012 primarily due to increased project spending
relating to software development and map creation. 
Location & Commerce non-IFRS sales and marketing expenses decreased
8% year-on-year primarily due to cost reduction actions. On a
sequential basis, sales and marketing expenses increased 22%
sequentially in the fourth quarter due to higher marketing costs and
investments to establish the new HERE brand. 
Location & Commerce non-IFRS administrative and general expenses
increased 6%
year-on-year and increased 12% sequentially in the fourth
quarter 2012. On a
year-on-year and sequential basis, the increase
was primarily due to the higher
use of services provided by shared
support functions. 
Location & Commerce non-IFRS other income and expense for the fourth
quarter
2012 was approximately zero, compared to expense of EUR 3
million in the fourth
quarter 2011 and approximately zero in the
third quarter 2012. 
Operating Margin 
The year-on-year increase in Location & Commerce non-IFRS operating
margin in
the fourth quarter 2012 was primarily due to lower operating
expenses and higher
gross margin, partially offset by lower net
sales. 
The approximately flat sequential Location & Commerce non-IFRS
operating margin
in the fourth quarter 2012 was primarily due to
higher net sales and gross margin, almost entirely offset by higher
operating expenses. 
NOKIA SIEMENS NETWORKS 
The following table sets forth a summary of the results for Nokia
Siemens Networks for the periods indicated, as well as the
year-on-year and sequential
growth rates. 


 
 
+----------------------------------------------------------------------
---+
| NOKIA SIEMENS NETWORKS                                                  |
| RESULTS SUMMARY                                                         |
+--------------------------+---------+---------+--------+---------+-------+
|                          |         |         |    YoY |         |   QoQ |
|                          | Q4/2012 | Q4/2011 | Change | Q3/2012 |Change |
+--------------------------+---------+---------+--------+---------+-------+
| Net sales (EUR million)  |   3 988 |   3 815 |     5% |   3 501 |   14% |
+--------------------------+---------+---------+--------+---------+-------+
| Non-IFRS gross margin (%)|   36.0% |   29.2% |        |   32.2% |       |
+--------------------------+---------+---------+--------+---------+-------+
| Non-IFRS operating       |         |         |        |         |       |
| expenses (EUR million)   |     843 |     943 |   -11% |     797 |    6% |
+--------------------------+---------+---------+--------+---------+-------+
| Non-IFRS operating       |         |         |        |         |       |
| margin (%)               |   14.4% |    4.6% |        |    9.2% |       |
+--------------------------+---------+---------+--------+---------+-------+

 
Net Sales 
The following table sets forth Nokia Siemens Networks net sales for
the periods
indicated, as well as the year-on-year and sequential
growth rates, by geographic area. 


 
 
+----------------------------------------------------------------------
+
| NOKIA SIEMENS NETWORKS                                               |
| NET SALES BY GEOGRAPHIC AREA                                         |
+----------------------+---------+---------+--------+---------+--------+
|                      |         |         |    YoY |         |    QoQ |
| EUR million          | Q4/2012 | Q4/2011 | Change | Q3/2012 | Change |
+----------------------+---------+---------+--------+-------
--+--------+
| Europe               |   1 058 |   1 272 |   -17% |     918 |    15% |
|                      |         |         |        |         |        |
| Middle East & Africa |     388 |     394 |    -2% |     325 |    19% |
|                      |         |         |        |         |        |
| Greater China        |     416 |     438 |    -5% |     313 |    33% |
|                      |         |         |        |         |        |
| Asia-Pacific         |   1 176 |     909 |    29% |   1 266 |    -7% |
|                      |         |         |        |         |        |
| North America        |     426 |     293 |    45% |     285 |    49% |
|                      |         |         |        |         |        |
| Latin America        |     524 |     509 |     3% |     394 |    33% |
+----------------------+---------+---------+--------+---------+--------+
| Total                |   3 988 |   3 815 |     5% |   3 501 |    14% |
+----------------------+---------+---------+--------+---------+--------+

 
The year-on-year increase in Nokia Siemens Networks' net sales in the
fourth
quarter 2012 was primarily due to higher sales of both
infrastructure equipment
and services, partially offset by a decline
in sales of business areas not consistent with Nokia Siemens
Networks' strategic focus. On a regional basis,
the year-on-year
growth was primarily due to higher net sales in Asia Pacific,
most
notably in Japan which saw strong growth in sales of both
infrastructure
equipment and services, as well as in North America
which also saw strong growth
in sales of both infrastructure
equipment and services. This was partially offset by lower sales in
Europe, most notably in Western Europe due to declines
in sales of
both infrastructure equipment and services. In the fourth
quarter
2012, Nokia Siemens Networks net sales benefited from
non-recurring IPR income
of approximately EUR 30 million. 
The sequential increase in Nokia Siemens Networks' net sales in the
fou
rth quarter 2012 was primarily due to higher sales of both services
and infrastructure equipment consistent with industry seasonality. On
a regional
basis, the sequential growth was primarily due to higher
net sales in North America which saw strong growth in sales of both
infrastructure equipment and
services, Latin America which saw strong
growth in sales of both infrastructure
equipment and services and
Greater China which saw strong growth in sales of
both services and
infrastructure equipment, partially offset by lower sales in
Asia
Pacific, most notably Japan which saw a decline primarily in sales of
infrastructure equipment. In the fourth quarter 2012, Nokia Siemens
Networks net sales benefited from non-recurring IPR income of
approximately EUR 30 million. 
At constant currency Nokia Siemens Networks' net sales would have
increased 1%
year-on-year and increased 16% sequentially. 
Gross Margin 
On a year-on-year basis, the increase in Nokia Siemens Networks'
non-IFRS gross
margin in the fourth quarter 2012 was due to favorable
product and regional mix
towards higher gross margin revenues,
particularly in infrastructure equipment
and to a lesser extent
services, driven mainly by Nokia Siemens Networks priority markets
including Japan, Korea and North America, partially offset by
lower
infrastructure equipment gross margin in Europe. In addition, the
year-on-year increase in Nokia Siemens Networks non-IFRS gross margin
was also due to structural cost savings in its production overheads as
part of its broader cost
savings targets. 
On a sequential basis, the increase in Nokia Siemens Networks'
non-IFRS gross
margin in the fourth quarter 2012 was due to favorable
product and regional mix
towards higher gross margin revenues, in
both services and infrastructure equipment, driven mainly by Latin
America, North America and Europe, partially
offset by Asia Pacific
most notably in Japan. In addition, the sequential increase in Nokia
Siemens Networks non-IFRS gross margin was also due to seasonally
strong high gross margin software sales as well as structural
cost
savings in its production overheads as part of its broader cost
savings targets. 
Operating Expenses 
Nokia Siemens Networks' non-IFRS research and development expenses
decreased
10% year-on-year in the fourth quarter 2012 primarily due
to improvements in
overall research and development efficiency.
Sequentially, Nokia Siemens Networks' non-IFRS research and
development expenses increased 7% primarily due
to higher accrued
incentive expenses consistent with Nokia Siemens Networks'
business
performance in the fourth quarter 2012, partially offset by cost
control initiatives. 
Year-on-year, Nokia Siemens Networks' non-IFRS sales and marketing
expenses decreased 11% in the fourth quarter 2012 primarily due to
structural cost savings, partially offset by higher accrued incentive
expenses consistent with
Nokia Siemens Networks' business performance
in the fourth quarter 2012. On a
sequential basis, Nokia Siemens
Networks non-IFRS sales and marketing expenses
increased 3% in the
fourth quarter 2012 primarily due to higher accrued incentive
expenses consistent with Nokia Siemens Networks' business
performance
in the fourth quarter 2012, partially offset by
structural cost savings. 
Nokia Siemens Networks' non-IFRS administrative and general expenses
decreased
13% year-on-year in the fourth quarter 2012 primarily due
to structural cost
savings. On a sequential basis, Nokia Siemens
Networks non-IFRS administrative
and general expenses increased 5% in
the fourth quarter 2012, primarily due higher accrued incentive
expenses consistent with Nokia Siemens Networks' business performance
in the fourth quarter 2012, as well as higher expense reallocation to
other function costs, which more than offset structural cost
savings. 
Nokia Siemens Networks' non-IFRS other income and expense for the
fourth quarter
2012 was an expense of EUR 16 million, compared to
income of EUR 5 million in
the fourth quarter 2011 and expense of EUR
8 million in the third quarter 2012.
 On both a year-on-year and
sequential basis, this was primarily due to changes
in the doubtful
account allowances. 
Operating Margin 
The year-on-year increase in Nokia Siemens Networks non-IFRS
operating margin in the fourth quarter 2012 was primarily due to the
higher gross margin and higher
net sales, and to a lesser extent,
lower operating expenses. 
The sequential increase in Nokia Siemens Networks non-IFRS operating
margin in
the fourth quarter 2012 was primarily due to the higher net
sales and gross margin, partially offset by higher operating
expenses. 
Strategy Update and Global Restructuring Program 


 
 
+----------------------------------------------------------------------
---+
|NOKIA SIEMENS NETWORKS RESTRUCTURING SUMMARY                             |
+-------------+---------+----------+---------+--------+---------+---------+
|             |         |Cumulative|         |        |         |         |
|             |         |     up to|  Q1/2013|   2013 |    2014 |    Total|
|             |  Q4/2012|   Q4/2012|(approxi-|(approx-|(approxi-|(approxi-|
|             |(approxi-| (approxi-|     mate|   imate|     mate|     mate|
|EUR (million)|    mate)|     mate)|estimate)|estimate|estimate)|estimate)|
+-------------+---------+----------+---------+--------+---------+---------+
|Restructuring|         |          |         |        |         |         |
|related      |         |          |      Not|     Not|      Not|         |
|charges      |      257|     1 300| provided|provided| provided|    1 300|
+-------------+---------+----------+---------+--------+---------+---------+
|Restructuring|         |          |         |        |         |         |
|related cash |         |          |         |        |         |         |
|outflows     |      180|       650|      200|     450|      200|    1 300|
+-------------+---------+----------+---------+--------+---------+---------+

  
On November 23, 2011, Nokia Siemens Networks announced its strategy to
focus on mobile broadband and services and the launch of an extensive
global restructuring program. 
At the end of the fourth quarter 2012, Nokia Siemens Networks had
approximately
58 400 employees, a reduction of approximately 15 300
compared to fourth quarter
2011, and approximately 2 200 compared to
third quarter 2012. 
Nokia Siemens Networks now targets to reduce its non-IFRS annualized
operating
expenses and production overheads by more than EUR 1
billion by the end of 2013, compared to the end of 2011. Nokia
Siemens Networks previous target was to reduce its non-IFRS
annualized operating expenses and production overheads by
EUR 1
billion by the end of 2013, compared to the end of 2011. While these
savings are expected to come largely from organizational
streamlining, the company will also target areas such as real estate,
information technology, product and service procurement costs,
overall general and administrative expenses, and a significant
reduction of suppliers in order to further lower
costs and improve
quality. 
By the end of the fourth quarter of 2012, Nokia Siemens Networks had
recorded
cumulative restructuring charges and other associated items
of approximately EUR 1.3 billion related to this restructuring
program. In total we now expect cumulative Nokia Siemens Networks'
restructuring charges of approximately EUR
1.3 billion by the end of
2013, virtually all of which have now been recognized.
This is
approximately EUR 100 million more than our previous estimate. 
By the end of the fourth quarter 2012, Nokia Siemens Networks had
cumulative
restructuring related cash outflows of approximately EUR
650 million related to this restructuring program. Nokia Siemens
Networks expects restructuring-related
cash outflows to be
approximately EUR 200 million in the first quarter
2013,
approximately EUR 450 million for the full year 2013, and
approximately EUR 200
million for the full ye
ar 2014 related to this
restructuring program. This means
that we also now expect total
restructuring related cash outflows to be approximately EUR 100
million more than what we estimated earlier. 
Nokia Siemens Networks is focused on maintaining a strong financial
position and liquidity profile.  Cash generation is a clear priority
at Nokia Siemens Networks, and the company intends to be self-funding
in all aspects of its operations. 
Q4 OPERATING HIGHLIGHTS 
NOKIA OPERATING HIGHLIGHTS 
- Nokia completed its divestment of Vertu, the global leader in
luxury mobile
phones, to EQT VI. As part of the transaction,
approximately 1 000 employees
have transferred with Vertu. Nokia
retains a 10% minority shareholding in Vertu. 
- Nokia entered into a new patent license agreement with Research In
Motion. The agreement results in settlement of all existing patent
litigation between the
companies and withdrawal of pending actions in
the US, UK and Canada related to a recent arbitration tribunal
decision. 
- Nokia sold its head office building in Espoo, Finland, to
Finland-based Exilion and has leased it back from Exilion on a
long-term lease. The selling
price was EUR 170 million. 
- Nokia completed an offering of EUR 750 million of senior unsecured 
convertible
bonds due 2017 convertible into ordinary shares of Nokia
Corporation. Nokia intends to use the net proceeds of the offering to
prudently manage its capital
structure, proactively address upcoming
maturities while preserving existing
pools of liquidity and for
general corporate purposes. 
DEVICES & SERVICES OPERATING HIGHLIGHTS 
SMART DEVICES 
- Nokia commenced shipments of the Nokia Lumia 920 and the Nokia
Lumia 820, the
first devices in Nokia's Windows Phone 8 range. The
Lumia 920 is the flagship
Windows Phone 8 smartphone, introducing the
latest advances in Nokia PureView
imaging innovation. The Lumia 820
brings high end smartphone innovation like
wireless charging,
super-sensitive touch displays and new augmented reality experiences,
starting with Nokia City Lens, to a midrange price point. 
- Nokia and Verizon Wireless commenced shipments of the Nokia Lumia
822, which
provides Verizon Wireless customers with the high-end
smartphone features of the Nokia Lumia 820 in a unique design package
running on America's largest 4G LTE
network. 
- Nokia and China Mobile announced the Lumia 920T, the first TD-SCDMA
Windows
Phone in China. With optical image stabilization, world class
location and navigation services, and built-in wireless charging, the
Lumia 920T is the world's most innovative smartphone with the world's
largest mobile operator. 
- Nokia introduced the Nokia Lumia 620, the third and most affordable
in its
range of Windows Phone 8 smartphones. Alongside the flagship
Nokia Lumia 920 and mid-range Nokia Lumia 820, the Nokia Lumia 620
comes in a compact, colorful design and brings Windows Phone 8 to a
more youthful audience. 
MOBILE PHONES 
- Nokia introduced the Nokia Asha 205 and Nokia 206 in both single
SIM and dual
SIM versions. Both devices reflect Nokia's heritage by
combining stylish design
and long-lasting battery life. The Nokia
Asha 205 and Nokia 206 are the first
Mobile Phones devices to include
Nokia's exclusive Slam feature, which enables
consumers to share
multimedia content such as photos and videos with nearby friends
almost instantly. Slam works with most Bluetooth-enabled mobile
phones
without the need to pair devices, and without the recipient
needing to also have
Slam. 
- Nokia commenced shipments of the Nokia Asha 308 and Asha 309,
models offering
a fluid 'swipe' user interface and an open environment
for third-party application development. 
LOCATION & COMMERCE OPERATING HIGHLIGHTS 
- Location & Commerce introduced a new brand -HERE -for our
location-based products and services and has begun adopting the HERE
brand in the portfolio.
HERE is the first location cloud to deliver
the world's best maps and location
experiences across multiple
screens and operating systems. With the new brand,
HERE, Nokia aims
to inspire a new generation of location services and devices
that
make the mobile experience more personally significant for people
everywhere. For financial reporting purposes, the Location & Commerce
business
will be renamed as the HERE business, starting with the
first quarter 2013. 
- To further extend its location services, Location & Commerce
launched a maps
application for iOS under the HERE brand. Based on
HTML5, it includes offline
capabilities, voice-guided walk
navigation, and public transport directions. The application is
available for free download from Apple's App Store. 
- Nokia announced a strategic partnership with Mozilla to bring new
location
experiences to the Firefox OS. Nokia plans to debut a mobile
Web version of HERE
Maps for the new Firefox OS next year. The
companies are working together to
give people the best mapping
experience on Firefox OS. 
- Nokia acquired earthmine inc. earthmine's reality capture and
processing technologies will become integral parts of the 3D map
making capabilities of
HERE. 
- Nokia introduced LiveSight, a technology based on a highly
accurate, 3D map of the world.  LiveSight enables a precise and
intuitive augmented reality experience. Nokia City Lens, which was
developed exclusively for Nokia Lumia
devices and uses a phone's
camera viewfinder to make discovering the world as
easy as lifting up
a phone, is the first application providing a LiveSight-enabled
experience. 
- Oracle developed a built-in link between Oracle Fusion Middleware
MapViewer
and the Nokia Location Platform (NLP). This link removes
the barrier to customized map integration and extends the benefits of
global maps for business
use to Oracle users. 
- Nokia's Location &
Commerce business continued to strengthen its portfolio of
location-based offerings for both Windows Phone 8 and Windows Phone
7.5: 
- Location & Commerce brought its signature applications to the Noki
a
Lumia range on Windows Phone 8, including true offline maps for Nokia
Maps and Nokia
Drive+ (beta). 
- Location & Commerce continued its support for Nokia's Lumia range
on Windows
Phone 7.5 with new releases of Nokia Transport and Nokia
Drive, extending the
availability of the My Commute feature in Nokia
Drive from five to 26 countries.
 In addition, Location & Commerce
also released a beta update to Nokia City Lens
for Lumia on Windows
Phone 7.5, its LiveSight-based augmented reality application, which
turns the phone's camera viewfinder into a new way to see
information
about restaurants, shops, hotels and more overlaid onto the
surfaces
of buildings for the most intuitive way to find hidden gems. 
- After announcing in early 2012 that it is teaming with Groupon to
bring local
and national deals to Nokia customers and integrating
Groupon Now! deals into
Nokia Maps for the Lumia range in the third
quarter, Location & Commerce now
also integrated Groupon Now! deals
into its maps desktop offering on here.com. 
NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS 
- Nokia Siemens Networks continued its mobile broadband deal
momentum, adding
commercial LTE deals in the fourth quarter,
including: delivering a large, multi-city, TD-LTE deployment for
China Mobile; preparing O2's network in the UK to deliver LTE
services across London and the south-east of England, ahead of an
anticipated rapid launch of 4G in early 2013;  completing the first
4G pilot
with TD-LTE technology in Southern Europe for COTA, a new
player in Spanish telecoms, and Wimax Online; and helping Vodacom
become the first operator to
introduce voice and SMS alongside LTE in
South Africa. 
- Nokia Siemens Networks provided GSM and 3G mobile broadband
infrastructure and services in Central and East Java, Sumatra, and
Kalimantan for Indosat in Indonesia; and deployed Wide Band Adaptive
Multi-Rate (WB-AMR) software for Smart Communications 3G network in
Mega Manila in the Philippines, providing
high-definition 
(HD) voice
services to subscribers. 
- Nokia Siemens Networks combined three powerful WCDMA software
features with
the introduction of its Liquid Radio WCDMA software
suite to deliver faster data
uploads and extract the full benefit
from network resources and smartphone capabilities, helping operators
improve customer satisfaction and cut churn while increasing revenue
from greater 3G availability. Nokia Siemens Networks
also launched a
new package of services to ensure operators have the most profitable
blend of macro and small cells for mobile broadband, as well as a new
second-generation 3G femto access point that provides mobile coverage
in the
home or small office. 
- Nokia Siemens Networks' Flexi Zone was awarded the 'Best of 4G
award' at 4G
World in Chicago, in the Radio Access Network (RAN) and
Small Cell Technology
Product category for its RAN & small cell
technology product, based on the company's Liquid Radio architecture,
recognizing mobile broadband innovative
design, small cell technology
and approach. In a recent proof of concept project
based on Liquid
Core architecture, Nokia Siemens Networks and a leading
global
operator jointly demonstrated that core virtualization and
cloud management are
viable technologies for deployment by operators. 
- In Services, Nokia Siemens Networks launched an industry-first
capability center - Service Operations and Management solution - which
combines insights
related to service performance with operations
functions to enable operators to manage mobile broadband services and
tackle service degradation before subscribers experience poor
quality. 
- Nokia Siemens Networks enhanced its award-winning Customer
Experience Management (CEM) on Demand portal by adding three new
software content packs and related services to help operators
pinpoint actionable problems on internet-based maps in seconds and
rank the individual customer perception of any problem they
experience, in addition to providing trends in service use, network
performance and customer experience. 
- Guangdong Mobile, China Mobile's largest subsidiary, selected Nokia
Siemens
Networks' Customer Experience Management engine Serve at Once
Intelligence (SAI)
customer and business analysis suite to boost
subscriber loyalty and revenue
through analysis of real time customer
insights. In December, Nokia Siemens Networks provided a unified
network and service management dashboard solution as part of its CEM
portfolio, including a video wall bigger than a tennis court,
for
Bharti Airtel in Gurgaon, India, to give the operator a complete
network
view and ensure the best possible service quality and user
experience. 
- Nokia Siemens Networks continued to drive towards its strategic
focus on Mobile Broadband, announcing it had reached an agreement to
sell its Optical
Networks business to Marlin Equity Partners and its
Business Support Systems
business to Redknee. It also completed the
divestment of the assets of the non-core IPTV business to Belgacom
and Accenture. 
NOKIA IN JANUARY -DECEMBER 2012 
The following discussion is of Nokia's reported results. Comparisons
are given
to 2011 results, unless otherwise indicated. 
See note 5 to our Summary Financial Information table above
concerning our current operational and reporting structure which we
adopted during 2011. 
In 2012, our net sales decreased 22% to EUR 30.2 billion (EUR 38.7
billion in
2011). Net sales of Devices & Services decreased 34% to EUR
15.7 billion (EUR
23.9 billion). Net sales of Smart Devices decreased
50% to EUR 5 446 million
(EUR 10 820 million). Net sales of Mobile
Phones decreased 21% to EUR 9 436 million (EUR 11 930 million). Net
sales of Location & Commerce increased 1% to
EUR 1 103 million (EUR 1
091 million). Net sales of Nokia Siemens Networks decreased 2% to EUR
13.8 billion (EUR 14.0 billion). 
In 2012, Europe accounted for 29% (31%) of our net sales,
Asia-Pacific 27% (23%), Greater China 10% (17%), Middle East & Africa
14% (14%), Latin America
13% (11%) and North America 7% (4%). The 10
markets in which we generated the
greatest net sales in 2012 were, in
descending order of magnitude, China, India,
Japan, the United
States, Brazil, Germany, Russia, the United Kingdom, Indonesia
and
Italy together representing approximately 52% of total net sales in
2012. In comparison, the 10 markets in which we generated the
greatest net sales in 2011
were China, India, Brazil, Russia,
Germany, Japan, the United States, the United
Kingdom, Italy and
Spain, together representing approximately 52% of total net
sales in
2011. 
Our gross margin in 2012 was 27.8%, compared to 29.4% in 2011. Gross
profit in
Devices & Services decreased to EUR 3 346 million (gross
profit of EUR 6 640
million), representing a gross margin of 21.3%
(27.7%). Gross profit of Smart
Devices decreased to EUR 479 million
(EUR 2 561 million), representing 8.8% of
Smart Devices net sales
(23.7%).  Gross profit of Mobile Phones decreased to EUR 2 211
million (EUR 3 117 million), representing 23.4% of Mobile Phones net
sales
(26.1%).  Gross profit in Location & Commerce was EUR 875
million (gross profit
of EUR 877 million), representing a gross
margin of 79.3% (80.4%). Gross profit
in Nokia Siemens Networks
increased to EUR 4 169 million (gross profit EUR 3 842 million),
representing a gross margin of 30.3% (27.4%). 
Our 2012 operating loss was EUR 2.3 billion, compared with an
operating loss of EUR 1.1 billion in 2011. Our 2012 operating margin
was -7.6% (-2.8%). Our operating loss in 2012 included purchase price
accounting items and other special items of net negative EUR 2.4
billion (net negative EUR 2.9 billion).
Operating loss in Devices &
Services was EUR 1 100 million (operating profit of EUR 884 million),
representing an operating margin of -7.0% (3.7%). Devices & Services
operating profit in 2012 included purchase price accounting items
and
other special items of net negative EUR 397 million (net negative
EUR 799 million). Contribution of Smart D
evices decreased to EUR -1
560 million (EUR
-411 million), representing -28.6% of Smart Devices
net sales (-3.8%).  Contribution of Mobile Phones decreased to EUR
524 million (EUR 1 481 million),
representing 5.6% of Mobile Phones
net sales (12.4%).  Operating loss in Location & Commerce was EUR 301
million (operating loss of EUR 1 526 million),
representing an
operating margin of -27.3% (-139.9%). Location & Commerce operating
loss included purchase price accounting items and other special
items
of negative EUR 455 million (net negative EUR 1.6 billion). 
Operating loss in
Nokia Siemens Networks was EUR 799 million
(operating loss EUR 300 million),
representing an operating margin of
-5.8% (-2.1%). Nokia Siemens Networks operating loss in 2012 included
purchase price accounting items and other special items of net
negative EUR 1.6 billion (net negative EUR 0.5 billion).
Group Common
Functions expense totaled EUR 103 million in 2012, compared to
EUR
131 million in 2011. 
Our research and development expenses were EUR 4.8 billion in 2012,
compared to EUR 5.6 billion in 2011. Research and development costs
represented 15.8% of our net sales in 2012 (14.4%). Research and
development expenses included purchase
price accounting items and
other special items of EUR 378 million in 2012 (EUR
412 million). 
In 2012, our selling and marketing expenses were EUR 3.2 billion,
compared to
EUR 3.8 billion in 2011. Selling and marketing expenses
represented 10.6% of our net sales in 2012 (9.7%). Selling and
marketing expenses included purchase price
accounting items and other
special items of EUR 314 million in 2012 (EUR 422
million). 
Administrative and general expenses were EUR 1.0 billion in 2012,
compared to
EUR 1.1 billion in 2011. Administrative and general
expenses were equal to 3.2%
of our net sales in 2012 (2.8%).
Administrative and general expenses included no special items in 2012
(EUR 1 million in 2011). 
Financial income and expenses, net, was an expense of EUR 340 m
illion
in 2012
(EUR 102 million). The higher net expense in 2012 was
primarily driven by higher
net costs related to hedging our cash
balances and unfavorable fluctuations in
certain foreign currency
exchange rates. 
Loss before tax was EUR 2.6 billion in 2012 (loss of EUR 1.2
billion). Loss was
EUR 3.8 billion (loss of EUR 1.5 billion), based
on a loss of EUR 3.1 billion
(loss of EUR 1.2 billion) attributable
to equity holders of the parent and a
loss of EUR 0.7 billion (loss
of EUR 0.3 billion) attributable to non-controlling interests.
Earnings per share decreased to EUR -0.84 (diluted and basic),
compared to EUR -0.31 (diluted and basic). 
The following chart sets out Nokia Group's cash flow for the fiscal
years 2012
and 2011 and financial position at the end of each of those
years, as well as
the year-on-year growth rates. 


 
+------------------------------------------------+
| NOKIA GROUP CASH FLOW AND FINANCIAL POSITION   |
+----------------------+-------+--------+--------+
|                      |       |        |    YoY |
| EUR million          |  2012 |   2011 | Change |
+----------------------+-------+--------+--------+
| Net cash from        |       |        |        |
| operating activities |  -354 |  1 137 |  -131% |
+----------------------+-------+--------+--------+
| Total cash and       |       |        |        |
| other liquid assets  | 9 909 | 10 902 |    -9% |
+----------------------+-------+--------+--------+
| Net cash and         |       |        |        |
| other liquid assets1 | 4 360 |  5 581 |   -22% |
+----------------------+-------+--------+--------+

 
Note 1: Total cash and other liquid assets minus interest-bearing
liabilities. 
Year-on-year, net cash and other liquid assets decreased by EUR 1.2
billion in
2012, primarily due to cash outflows related to
restructuring of approximately
EUR 1.5 billion, the payment of the
dividend of approximately EUR 750 million in 2012 and cash outflows
related to net financial expenses and taxes as well as
capital
expenditures. This was partially offset by positive overall net
cash
from operating activities, excluding cash outflows related to
restructuring, net financial expenses and taxes, as well as cash
flows related to the receipt of
quarterly platform support payments
from Microsoft (which commenced in the fourth quarter 2011). 
In 2012, Nokia Siemens Networks' contribution to net cash from
operating activities was approximately EUR 1.6 billion, primarily due
to net working capital changes. At the end of 2012, Nokia Siemens
Networks' contribution to the Nokia gross cash was EUR 2.4 billion
and contribution to Nokia's net cash was
EUR 1.3 billion. 
The following discussion of Nokia's three businesses -Devices &
Services, Location & Commerce and Nokia Siemens Networks -includes
information on a non-IFRS, or underlying business performance, basis.
Non-IFRS results exclude
special items for all periods.  In addition,
non-IFRS results exclude intangible
asset amortization, other
purchase price accounting related items and inventory
value
adjustments arising from i) the formation of Nokia Siemens Networks
and
ii) all business acquisitions completed after June 30, 2008. See
note 1 to our
Summary Financial Information table above for
information about our underlying
non-IFRS results. 
Devices & Services 
The following chart sets out a summary of the results for our Devices
& Services
business and the year-on-year growth rates for the fiscal
years 2012 and
2011. 


 
 
+------------------------------------------------------+
| DEVICES & SERVICES                                   |
| RESULTS SUMMARY                                      |
+---------------------------+--------+--------+--------+
|                           |        |        |    YoY |
|                           |   2012 |   2011 | Change |
+---------------------------+--------+--------+--------+
| Net sales (EUR million)1  | 15 686 | 23 943 |   -34% |
+---------------------------+--------+--------+--------+
| Mobile device volume      |        |        |        |
| (million units)           |  335.6 |  417.1 |   -20% |
+---------------------------+--------+--------+--------+
| Mobile device ASP (EUR)   |     47 |     57 |   -18% |
+---------------------------+--------+--------+--------+
| Reported gross margin (%) |  21.3% |  27.7% |        |
+---------------------------+--------+--------+--------+
| Non-IFRS gross margin (%) |  21.3% |  27.7% |        |
+---------------------------+--------+--------+--------+
| Reported operating        |        |        |        |
| expenses (EUR million)    |  4 001 |  4 983 |   -20% |
+---------------------------+--------+--------+--------+
| Non-IFRS operating        |        |        |        |
| expenses (EUR million)    |  3 997 |  4 974 |   -20% |
+---------------------------+--------+--------+--------+
| Reported operating        |        |        |        |
| margin (%)                |  -7.0% |   3.7% |        |
+---------------------------+--------+--------+--------+
| Non-IFRS operating        |        |        |        |
| margin (%)                |  -4.5% |   7.0% |        |
+---------------------------+--------+--------+--------+

 
Note 1: Includes IPR income recognized in Devices & Services Other net
sales. 
Net Sales 
The following chart sets out the net sales for our Devices & Services
business
and year-on-year growth rates by geographic area for the
fiscal years 2012 and
2011. The IPR income referred to in the
paragraph above has been allocated to
the geographic areas contained
in this chart. 


 
 
+-------------------------------------------------+
| DEVICES & SERVICES NET SALES                    |
| BY GEOGRAPHIC AREA                              |
+----------------------+--------+--------+--------+
|                      |        |        |    YoY |
| EUR million          |   2012 |   2011 | Change |
+----------------------+--------+--------+--------+
| Europe               |  4 643
 |  7 064 |   -34% |
|                      |        |        |        |
| Middle East & Africa |  2 827 |  4 098 |   -31% |
|                      |        |        |        |
| Greater China        |  1 610 |  5 063 |   -68% |
|                      |        |        |        |
| Asia-Pacific         |  3 811 |  4 896 |   -22% |
|                      |        |        |        |
| North America        |    453 |    354 |    28% |
|                      |        |        |        |
| Latin America        |  2 342 |  2 468 |    -5% |
+----------------------+--------+--------+--------+
| Total                | 15 686 | 23 943 |   -34% |
+----------------------+--------+--------+--------+

 
The decline in Devices & Services net sales in 2012 resulted from
lower volumes
in both Smart Devices and Mobile Phones as well as a
lower ASP in Mobile Phones,
partially offset by a higher ASP in Smart
Devices. Devices & Services Other net
sales decreased in 2012 due to
lower non-recurring IPR income, the divestment of Vertu during the
fourth quarter 2012 and lower spare parts sales. 
At a constant currency, Devices & Services net sales would have
decreased 36%
compared to 2011. 
Smart Devices continued to transition as Symbian volumes decreased
sequentially
every quarter in 2012. Lumia device volumes grew in the
first half of 2012 by
expanding geographical distribution as well as
new product launches, but were
negatively affected in the third
quarter 2012 by product transitions. In the
fourth quarter 2012,
Smart Devices net sales grew sequentially as Nokia started
shipping
new Lumia devices, although volumes were adversely affected by
supply
constraints as we ramped up our production capacity,
particularly related to the Lumia 920. Smart Devices shipped a total
of 13.4 million Lumia devices in 2012. 
During the first half of 2012, Mobile Phones was negatively affected
by aggressive price competition and the lack of affordable full touch
devices. Towards the end of the secon
d quarter 2012 Mobile Phones
introduced affordable
Asha full touch smartphones and sold 15.8
million units in the second half 2012. 
Our overall Devices & Services net sales in 2012 benefited from the
recognition
in Devices & Services Other of approximately EUR 50
million (EUR 450 million in 2011) of non-recurring IPR income. During
the last two decades, we have invested
approximately EUR 50 billion
in research and development and built one of the
wireless industry's
strongest and broadest IPR portfolios, with approximately
10 000
patent families.  Nokia is a world leader in the development of
handheld
device and mobile communications technologies, which is also
demonstrated by our strong patent position. Within Devices & Services
Other, we estimate that our
current annual IPR income run-rate is
approximately EUR 0.5 billion. 
Volume 
The following chart sets out the mobile device volumes for our
Devices & Services business and year-on-year growth rates by
geographic area for the fiscal years 2012 and 2011. 


 
 
+-----------------------------------------------+
| DEVICES & SERVICES MOBILE DEVICE              |
| VOLUMES BY GEOGRAPHIC AREA                    |
+----------------------+-------+-------+--------+
|                      |       |       |    YoY |
| million units        |  2012 |  2011 | Change |
+----------------------+-------+-------+--------+
| Europe               |  67.3 |  87.8 |   -23% |
|                      |       |       |        |
| Middle East & Africa |  81.7 |  94.6 |   -14% |
|                      |       |       |        |
| Greater China        |  27.5 |  65.8 |   -58% |
|                      |       |       |        |
| Asia-Pacific         | 113.5 | 118.9 |    -5% |
|                      |       |       |        |
| North America        |   2.2 |   3.9 |   -44% |
|                      |       |       |        |
| Latin America        |  43.4 |  46.1 |    -6% |
+----------------------+-------+-------+--------+
| Total                | 335.6 | 417.1 |   -20% |
+----------------------+-------+-------+--------+

 
On a year-on-year basis, the decline in our total Devices & Services
volumes in 2012 was due to lower volumes in both Smart Devices and
Mobile Phones discussed
below. 
Average Selling Price 
On a year-on-year basis, the overall decrease in our Devices &
Services ASP was
due to higher proportion of Mobile Phones volumes
and lower Mobile Phones ASPs,
partially offset by higher Smart
Devices ASPs. 
Gross Margin 
On a year-on-year basis, the decline in our Devices & Services
non-IFRS gross
margin in 2012 was due to gross margin declines in
Smart Devices and to a lesser
degree in Mobile Phones and Devices &
Services Other. 
Operating Expenses 
Devices & Services non-IFRS operating expenses decreased 20%
year-on-year in
2012. On a year-on-year basis, operating expenses
related to Smart Devices decreased 32% in 2012, where Mobile Phones
remained approximately on the same
level. In addition to the factors
described below, the year-on-year changes were
affected by the
proportionate allocation of operating expenses being affected by the
relative mix of sales and gross profit performance between Mobile
Phones and Smart Devices. This resulted in higher and lower relative
allocations to Mobile
Phones and Smart Devices, respectively. 
Devices & Services non-IFRS research and development expenses
decreased 24% year-on-year in 2012 due to declines in Smart Devices
and Devices & Services
Other research and development expenses. The
decreases in research and development expenses were due primarily to
a focus on priority projects and cost
controls as well as business
divestments. 
Devices & Services non-IFRS sales and marketing expenses decreased
15% year-on-year in 2012 primarily due to lower overall business
activity, improved
efficiency in general marketing activities and
business divestments. 
Devices & Services non-IFRS administrative and general expenses
decreased 19%
year-on-year in 2012, primarily due structural cost
savings as well as business
divestments. 
In 2012, Devices & Services non-IFRS other income and expense had a
negative
year-on-year impact on profitability. Reported other income
and expense was significantly less negative in 2012. Restructuring
charges of EUR 550 million
and related impairments of EUR 30 million,
a benefit from cartel claim settlements of EUR 56 million, a net gain
from the sale of a real estate of EUR
79 million and a net gain from
the divestment of the Vertu business of EUR 52
million were
recognized in Devices & Services Other in 2012. Restructuring charges
of EUR 456 million, impairment of assets of EUR 90 million,
Accenture
deal consideration of EUR 251 million, impairment of shares
in an associated
company of EUR 41 million and a benefit from a
cartel claim settlement of EUR
49 million were recognized in Devices
& Services Other in 2011. 
Cost Reduction Activities and Planned Operational Adjustments Nokia
continues to target to reduce its Devices & Services non-IFRS
operating
expenses to an annualized run rate of approximately EUR 3.0
billion by the end
of 2013. 
On June 14, 2012, we announced targeted investments in key growth
areas, operational changes and significantly increased our cost
reduction target. The
measures included the closure of Nokia's
manufacturing facility in Salo, Finland
as well as the closure of
Nokia's research and development facility in Ulm, Germany. In
addition, Nokia also focused its sales and marketing activities
and
streamlined its IT, corporate and support functions to align with
the sharpened
strategy. 
As of December 31, 2012, we had recognized cumulative net charges in
Devices & Services of approximately EUR 1.4 billion related to
restructuring activities,
which included restructuring charges and
associated impairments. While the total
extent of the restructuring
activities is still to be determined, we currently
anticipate
cumulative charges in Devices & Services o
f approximately EUR
1.6
billion before the end of 2013. We also expect the total cash
outflows related
to our Devices & Services restructuring activities to
be approximately EUR 1.4
billion. 
Smart Devices 
The following chart sets out a summary of the results for our Smart
Devices business unit for the periods indicated, as well as the
year-on-year growth
rates. 


 
 
+-----------------------------------------------------+
| SMART DEVICES                                       |
| RESULTS SUMMARY                                     |
+--------------------------+--------+--------+--------+
|                          |        |        |    YoY |
|                          |   2012 |   2011 | Change |
+--------------------------+--------+--------+--------+
| Net sales (EUR million)1 |  5 446 | 10 820 |   -50% |
+--------------------------+--------+--------+--------+
| Smart Devices volume     |        |        |        |
| (million units)          |   35.1 |   77.3 |   -55% |
+--------------------------+--------+--------+--------+
| Smart Devices ASP (EUR)  |    155 |    140 |    11% |
+--------------------------+--------+--------+--------+
| Gross margin (%)         |   8.8% |  23.7% |        |
+--------------------------+--------+--------+--------+
| Operating expenses       |        |        |        |
| (EUR million)2           |  2 018 |  2 974 |   -32% |
+--------------------------+--------+--------+--------+
| Contribution margin (%)2 | -28.6% |  -3.8% |        |
+--------------------------+--------+--------+--------+

 
Note 1: Does not include IPR income. IPR income is recognized in
Devices & Services Other net sales. 
Note 2: The year-on-year decrease in operating expenses was affected
by the proportionate allocation of operating expenses being affected
by the relative
mix of sales and gross profit performance between
Mobile Phones and Smart Devices, resulting in lower relative
allocations to Smart Devices in 2012. Accordingly, 2012 operating
expenses ar
e not directly comparable to 2011 operating expenses. 
Net Sales 
The year-on-year decline in our Smart Devices net sales in 2012 was
primarily
due to significantly lower volumes, partially offset by
higher ASPs. 
Volume 
The year-on-year decrease in our Smart Device volumes in 2012 was
driven by the
strong momentum of competing smartphone platforms
relative to our Symbian devices. On a geographical basis, the
decrease in volumes was due to lower volumes in Greater China,
Europe, Asia Pacific, Middle East &Africa and Latin
America,
partially offset by slightly higher volumes in North America. 
Average Selling Price 
The year-on-year increase in our Smart Devices ASP in 2012 was
primarily due to a positive mix shift towards sales of our Lumia
devices which had a higher ASP,
a positive impact related to deferred
revenue on services sold in combination
with our devices as well as
the net positive impact related to foreign currency
fluctuations,
partially offset by general price erosion and our pricing actions. 
Gross Margin 
The year-on-year decline in our Smart Devices gross margin in 2012
was primarily
due to greater price erosion than cost erosion due to
the competitive environment, inventory related allowances of EUR 220
million in the second quarter 2012 and EUR 120 million in the third
quarter 2012, higher fixed costs
per unit because of lower sales
volumes, and a negative product mix shift towards lower gross margin
devices. 
Mobile Phones 
The following chart sets out a summary of the results for our Mobile
Phones business unit and year-on-year growth rates for the fiscal
years 2012 and
2011. 


 
 
+----------------------------------------------------------------+
| MOBILE PHONES                                                  |
| RESULTS SUMMARY                                                |
+--------------------------------------+-------+--------+--------+
|                                      |       |        |    YoY |
|                                      |  2012 |   2011 | Change |
+--------------------------------------+-------+--------+--------+
| Net sales (EUR million)1             | 9 436 | 11 930 |   -21% |
+--------------------------------------+-------+--------+--------+
| Mobile Phones volume (million units) |   300 |    340 |   -12% |
+--------------------------------------+-------+--------+--------+
| Mobile Phones ASP (EUR)              |    31 |     35 |   -11% |
+--------------------------------------+-------+--------+--------+
| Gross margin (%)                     | 23.4% |  26.1% |        |
+--------------------------------------+-------+--------+--------+
| Operating expenses (EUR million)2    | 1 661 |  1 640 |     1% |
+--------------------------------------+-------+--------+--------+
| Contribution margin (%)2             |  5.6% |  12.4% |        |
+--------------------------------------+-------+--------+--------+

 
Note 1: Does not include IPR income. IPR income is recognized in
Devices & Services Other net sales. 
Note 2: The year-on-year decrease in operating expenses was affected
by the proportionate allocation of operating expenses being affected
by the relative
mix of sales and gross profit performance between
Mobile Phones and Smart Devices, resulting in higher relative
allocations to Mobile Phones in 2012. Accordingly, 2012 operating
expenses are not directly comparable to 2011 operating expenses. 
Net Sales 
On a year-on-year basis, our Mobile Phones net sales decreased in
2012 due to
lower volumes and ASPs. 
Volume 
The year-on-year decline in our Mobile Phones volumes in 2012 was due
to the
challenging competitive environment and market environment,
which negatively
affected our volumes across the Mobile Phones
portfolio. In particular, low end
smartphones powered by the Android
operating system proliferated at lower price
points throughout 2012.
During the second half of 2012, Mobile Phones started
shipping Asha
full touch smartphones, which improved the competitiveness of
our
higher end Mobile Phones product portfolio. During the second
half of 2012 Mobile Phones shipped 15.8 million Asha full touch
smartphones. 
Average Selling Price 
The year-on-year decline in our Mobile Phones ASP in 2012 was
primarily due to a higher proportion of sales of lower priced devices
and general price erosion. 
Gross Margin 
The year-on-year decline in our Mobile Phones gross margin in 2012
was primarily
due to a higher proportion of sales of lower gross
margin devices as well as the net negative impact related to foreign
currency fluctuations. 
Location & Commerce 
On November 13, 2012, Nokia introduced HERE, the new brand for its
location and
mapping service. For financial reporting purposes, the
Location & Commerce business will be renamed as the HERE business,
starting with the first quarter
2013. 
The following chart sets out a summary of the results for Location &
Commerce
and year-on-year growth rates for the fiscal years 2012 and
2011. 


 
 
+----------------------------------------------------------------------
-+
| LOCATION & COMMERCE                                                   |
| RESULTS SUMMARY                                                       |
+-------------------------------------------+--------+---------+--------+
|                                           |        |         |    YoY |
|                                           |   2012 |    2011 | Change |
+-------------------------------------------+--------+---------+--------+
| Net sales (EUR millions)                  |  1 103 |   1 091 |     1% |
+-------------------------------------------+--------+---------+--------+
|          External net sales (EUR million) |    729 |     698 |     4% |
+-------------------------------------------+--------+---------+--------+
|          Internal net sales (EUR million) |    374 |     393 |    -5% |
+-------------------------------------------+--------+---------+--------+
| Reported gross margin (%)                 |  
79.3% |   80.4% |        |
+-------------------------------------------+--------+---------+--------+
| Non-IFRS gross margin (%)                 |  79.3% |   80.4% |        |
+-------------------------------------------+--------+---------+--------+
| Reported operating expenses (EUR million) |  1 146 |   1 285 |   -11% |
+-------------------------------------------+--------+---------+--------+
| Non-IFRS operating                        |        |         |        |
| expenses (EUR millions)                   |    723 |     827 |   -13% |
+-------------------------------------------+--------+---------+--------+
| Reported operating margin (%)             | -27.3% | -139.9% |        |
+-------------------------------------------+--------+---------+--------+
| Non-IFRS operating                        |        |         |        |
| margin (%)                                |  13.9% |    4.4% |        |
+-------------------------------------------+--------+---------+--------+

 
Net Sales 
The year-on-year increase in Location & Commerce external net sales
in 2012 was
primarily driven by higher sales of map content licenses
to vehicle customers,
partially offset by lower sales to personal
navigation devices customers. 
The year-on-year decline in Location & Commerce internal net sales
was primarily
due to lower sales related to the large decline in
Symbian volumes experienced
since 2010. 
Gross Margin 
On a year-on-year basis, the decrease in Location & Commerce non-IFRS
gross margin in 2012 was primarily due to lower personal navigation
device sales which
carry a higher gross margin, partially offset by
higher gross margin in the vehicle segment. 
Operating Expenses 
Location & Commerce non-IFRS research and development expenses
decreased 14%
primarily driven by a focus on cost controls, lower
project spending and a shift
of research and development operating
expenses to cost of sales as a result of
the divestiture of the media
advertising business. 
Location & Commerce non-IFRS sales and marketing expenses decreased
18% primarily driven by a focus on cost controls and lower marketing
spending. 
Location & Commerce non-IFRS administrative and general expenses
increased 13%
primarily driven by higher use of services provided by
shared support functions. 
Nokia Siemens Networks 
Nokia Siemens Networks completed the acquisition of Motorola
Solutions' networks
assets on April 30, 2011. Accordingly, the results
of Nokia Siemens Networks for 2012 are not directly comparable to
2011. 
The following chart sets out a summary of the results for Nokia
Siemens Networks
and year-on-year growth rates for fiscal years 2012
and 2011. 


 
 
+----------------------------------------------------------------------
+
| NOKIA SIEMENS NETWORKS                                               |
| RESULTS SUMMARY                                                      |
+-------------------------------------------+--------+--------+--------+
|                                           |        |        |    YoY |
|                                           |   2012 |   2011 | Change |
+-------------------------------------------+--------+--------+--------+
| Net sales (EUR million)                   | 13 779 | 14 041 |    -2% |
+-------------------------------------------+--------+--------+--------+
| Reported gross margin (%)                 |  30.3% |  27.4% |        |
+-------------------------------------------+--------+--------+--------+
| Non-IFRS gross margin (%)                 |  30.7% |  27.4% |        |
+-------------------------------------------+--------+--------+--------+
| Reported operating expenses (EUR million) |  3 678 |  4 030 |    -9% |
+-------------------------------------------+--------+--------+--------+
| Non-IFRS operating                        |        |        |        |
| expenses (EUR million)                    |  3 413 |  3 662 |    -7% |
+-------------------------------------------+--------+--------+--------+
| Reported operating margin (%)             |  -5.8% |  -2.1% |        |
+-------------------------------------------+--------+--------+--------+
| Non-IFRS operating                        |        |        |        |
| margin (%)                                |   5.6% |   1.6% |        |
+-------------------------------------------+--------+--------+--------+

 
Net Sales 
The following chart sets out Nokia Siemens Networks net sales and
year-on-year growth rates, by geographic area for fiscal years 2012
and
2011. 


 
 
+-------------------------------------------------+
| NOKIA SIEMENS NETWORKS                          |
| NET SALES BY GEOGRAPHIC AREA                    |
+----------------------+--------+--------+--------+
|                      |        |        |    YoY |
| EUR millions         |   2012 |   2011 | Change |
+----------------------+--------+--------+--------+
| Europe               |  3 896 |  4 469 |   -13% |
|                      |        |        |        |
| Middle East & Africa |  1 287 |  1 391 |    -7% |
|                      |        |        |        |
| Greater China        |  1 278 |  1 465 |   -13% |
|                      |        |        |        |
| Asia-Pacific         |  4 347 |  3 848 |    13% |
|                      |        |        |        |
| North America        |  1 294 |   1077 |    20% |
|                      |        |        |        |
| Latin America        |  1 677 |  1 791 |    -6% |
+----------------------+--------+--------+--------+
| Total                | 13 779 | 14 041 |    -2% |
+----------------------+--------+--------+--------+

 
The year-on-year decline in Nokia Siemens Networks' net sales was
primarily due
to the decline in sales of business areas not consistent
with Nokia Siemens Networks' strategic focus and lower infrastructure
equipment sales, partially
offset by higher services net sales. On a
full year basis, services represented
slightly more than 50% of Nokia
Siemens Networks' net sales. 
At constant currency, Nokia Siemens Networks' net sales would have
decreased 5% year-on-year in 2012. 
Gross Margin 
The increase in Nokia Siemens Networks non-IFRS gross margin in 2012
was primarily due to the better gross margin in both infrastructure
equipment and
services. Within infrastructure equipment the increase
was primarily due to favorable region and product mix consistent with
Nokia Siemens Networks' strategy to focus on mobile broadband. Within
services, the increase was primarily due to structural cost actions
and efforts to align the services business with the focused strategy. 
Operating Expenses 
Nokia Siemens Networks' non-IFRS research and development expenses
decreased 5% year-on-year in 2012 primarily due to structural cost
saving actions and overall
research and development efficiency. 
Nokia Siemens Networks' non-IFRS sales and marketing expenses
decreased 11% year-on-year in 2012 primarily due to structural cost
saving actions. 
Nokia Siemens Networks' non-IFRS administrative and general expenses
decreased
8% year-on-year in 2012 primarily due to structural cost
saving actions. 
Nokia Siemens Networks' non-IFRS other income decreased to an expense
year-on-year in 2012 due primarily to due to changes in the doubtful
account allowances. Reported other income and expense for 2012 was an
expense of EUR 1 290 million.
The year-on-year increase of the
expense was mainly driven by increased restructuring and associated
charges. 
Operating Margin 
The higher year-on-year Nokia Siemens Networks non-IFRS operating
margin in 2012 primarily reflected the higher gross margin and lower
operating expenses. 
Strategy Update and Global Restructuring Program 
On November 23, 2011 Nokia Siemens Networks announced its strategy to
focus on
mobile broadband and services and the launch of an extensive
global restructuring program. 
At the end of 2012, Nokia Siemens Networks had approximately 58 400
employees, a reduction of approximately 15 300 compared to end of
2011. 
Nokia Siemens Networks now targets to reduce its non-IFRS annualized
operating
expenses and production overheads by more than EUR 1
billion by the end of 2013, compared to the end of 2011. Nokia
Siemens Networks previous target was to reduce its non-IFRS
annualized operating expenses and production overheads by
EUR 1
billion by the end of 2013, compared to the end of 2011. While these
savings are expected to come largely from organizational
streamlining, the company will also target areas such as real estate,
information technology, product and service procurement costs,
overall general and administrative expenses, and a significant
reduction of suppliers in order to further lower
costs and improve
quality. 
During 2012, Nokia Siemens Networks recognized restructuring charges
and other
associated items of EUR 1.3 billion related to this
restructuring program, resulting in cumulative charges of
approximately EUR 1.3 billion. In total we
now expect cumulative
Nokia Siemens Networks restructuring charges of approximately EUR 1.3
billion by the end of 2013, virtually all of which have
now been
recognized. By the end of 2012, Nokia Siemens Networks had
cumulative
restructuring related cash outflows of approximately EUR
650 million related to this restructuring program. Nokia Siemens
Networks expects restructuring-related cash outflows to be
approximately EUR 450 million for the full year 2013, and
approximately EUR 200 million for the full year 2014 related to this
restructuring program. 
Nokia Siemens Networks is focused on maintaining a strong financial
position and liquidity profile.  Cash generation is a clear priority
at Nokia Siemens Networks, and the company intends to be self-funding
in all aspects of its operations. 
FULL YEAR 2012 OPERATING HIGHLIGHTS 
NOKIA OPERATING HIGHLIGHTS 
- Nokia outlined a range of actions -planned or since completed
-aimed at sharpening its strategy, improving its operating model and
returning the  company
to profitable growth.
 The measures included: 
- Reductions within certain research and development projects,
resulting in the
closure of Nokia's facilities in Ulm, Germany and
Burnaby, Canada; 
- The transfer of device assembly from our production facilities in
Komarom in
Hungary and Reynosa in Mexico to Nokia facilities in Asia,
where the majority of component suppliers are based. The Komarom and
Reynosa facilities are now focusing on smartphone product
customization. 
- The consolidation of certain manufacturing operations, resulting in
the closure of its manufacturing facility in Salo, Finland; 
- Nokia, and De' Longhi SpA, a global leader in household appliances,
agreed
terms for De' Longhi to acquire Nokia's production facility in
Cluj, Romania. 
- Focusing of marketing and sales activities, including prioritizing
key markets; 
- Streamlining of corporate and support functions. 
Since the end of 2012, Nokia has also announced a range of planned
changes to
streamline its IT organization. Nokia believes these
changes will increase operational efficiency and reduce operating
costs, creating an IT organization
appropriate for Nokia's current
size and scope. As part of the planned changes,
Nokia plans to
transfer certain activities and up to 820 employees to HCL
Technologies and TATA Consultancy Services. 
- There were various changes in the Nokia Leadership Team during
2012. Changes
included: 
- Marko Ahtisaari was appointed Executive Vice President of Design
and member of the Nokia Leadership Team as from February 1, 2012. 
- Juha Putkiranta was appointed Executive Vice President of
Operations and member of the Nokia Leadership Team as from July 1,
2012. 
- Timo Toikkanen was appointed Executive Vice President of Mobile
Phones and
member of the Nokia Leadership Team as from July 1, 2012. 
- Chris Weber was appointed Executive Vice President of Sales and
Marketing and
member of the Nokia Leadership Team as from July 1,
2012. 
Further, during 2012, the following members resigned from the Nokia
Leadership
Team: 
- Jerri DeVard, formerly Executive Vice President and Chief Marketing
Officer,
resigned from the Nokia Leadership Team effective as from
July 1, 2012. 
- Colin Giles, formerly Executive Vice President of Sales, resigned
from the
Nokia Leadership Team effective as from July 1, 2012. 
- Mary T. McDowell, formerly Executive Vice President of Mobile
Phones resigned
from the Nokia Leadership Team effective as from July
1, 2012. 
- Niklas Savander, formerly Executive Vice President of Markets
resigned from
the Nokia Leadership Team effective as from July 1,
2012. 
- Esko Aho, formerly Executive Vice President of Corporate Relations
and Responsibility resigned from the Nokia Leadership Team. 
- Nokia completed the acquisition of all technologies and
intellectual property
from Scalado AB to strengthen Nokia's leading
position in mobile imaging. As
part of the transaction, approximately
50 world-class imaging specialists transferred to Nokia. 
- Nokia divested Vertu, its luxury mobile phones business to EQT VI,
a European
private equity firm. 
- Nokia started development of a new manufacturing facility in
Vietnam to serve
the feature phone market. 
- Nokia was again selected as a component of the Dow Jones
Sustainability World
Index (DJSI) and Dow Jones Sustainability Europe
Index in the DJSI 2012 Review. 
- Nokia was included by the Carbon Disclosure Project (CDP) in the
Carbon Disclosure Leadership Index and the Carbon Performance
Leadership Index, receiving recognition both for its disclosure of
climate change information and
the action it is taking to reduce its
emissions. 
DEVICES & SERVICES OPERATING HIGHLIGHTS 
SMART DEVICES 
- Nokia continued to expand the breadth and depth of its Nokia Lumia
range of
Windows Phone 7-based smartphones and brought the range to
new markets, including China and the United States. 
- In September 2012, Nokia launched its first products on Windows
Phone 8, the
latest generation of the Windows Phone platform. Nokia
started selling the first
products running Windows Phone 8 -the
flagship Nokia Lumia 920 and the mid-range
Nokia Lumia 820 - in
select markets including China, Germany, the United Kingdom
and the
United States Nokia has also launched in markets such as India as
well
as introduced the Nokia 620 in select markets, with Lumia
smartphones now available in more than 90 markets around the world.
Nokia's first Windows Phone
8 products showcase the best of Windows
Phone 8, which for the first time shares
many core technologies with
the wider Windows ecosystem. Windows Phone 8 also
introduced
multi-core processor support, NFC (near field communication)
technology, and support for higher screen resolutions, as well as
increased language support and new capabilities in imaging and
application. 
- Nokia continued to support the growth of the Windows Phone
ecosystem. The number of applications in the Windows Phone
Marketplace grew to more than 125 000 by the end of 2012, up from
more than 50 000 at the start of the year. 
- During our transition to Windows Phone through 2012, we continued
to ship devices based on Symbian. The Nokia 808 PureView, a device
which showcases our
imaging capabilities and which came to market in
mid-2012, was the last Symbian
device from Nokia. 
- Nokia announced a range of wireless charging accessories and
partnerships. The Fatboy Recharge Pillow provides an alternative way
to charge the Lumia 920 and
Lumia 820 wirelessly, while HARMAN'S JBL
brand introduced the JBL PowerUP, a
wireless charging docking station
with high quality audio in retro styling and
the JBL PlayUp for high
quality portable audio. Nokia also agreed with Virgin
Atlantic to put
wireless charging stations in its London Heathrow Clubhouse lounge
and with Coffee Bean & Tea Leaf to put charging plates on tables in
some
of their cafes. 
- Nokia announced the launch of Nokia Music in the United States,
further expanding the number of markets in which the free music
streaming service is now available. Nokia Music is a free mobile
experience exclusive to Nokia Lumia handsets, providing consumers
with a simple and delightful way to discover and
enjoy music. 
MOBILE PHONES 
- Mobile Phones continued to expand Nokia's Asha range of products
with technological and design innovations, including launching full
touch models such
as the Asha 308 and Asha 309. These two models
offer a fluid 'swipe' user interface and an open environment for
third-party application development 
-characteristics which helped earn the complete Asha touch range full
smartphone
classification from global market research companies and
analysts such as GfK. 
- Nokia introduced the Nokia 206 in both a single and dual SIM
version. The Nokia 206 includes Nokia's exclusive Slam feature, which
enables consumers to
share multimedia content like photos and videos
with nearby friends almost instantly. Slam works with most
Bluetooth-enabled mobile phones without the need
to pair devices, and
without the recipient needing to also have Slam. 
- Nokia unveiled Nokia Life+, the latest evolution of its widely-used
Nokia Life
service. Nokia Life+ is a Web application, which will
provide millions of people
with valuable information on education,
health and "infotainment" topics. Nokia
Life+ will be supported by
the Nokia Asha 308 and Nokia Asha 309 smartphones
alongside a wide
range of Nokia mobile phones. 
- The Nokia Xpress browser, Nokia's cloud-accelerated browser for
Series 40 devices, continued to grow rapidly with support for 38
devices in 87 languages
and more than 200 countries. The Nokia Xpress
browser is the first of its kind
to support web apps, and since the
release of the SDK in 2011, developer support
has continued to grow. 
LOCATION & COMMERCE OPERATING HIGHLIGHTS 
- Nokia introduced a new brand -HERE -for our location-based products
and services and has begun adopting the HERE brand in the portfolio.
HERE is the
first location cloud to deliver the world's best maps and
location experiences
across multiple screens and operating systems. 
- To further extend its location services, Nokia launched a maps
application for iOS under the HERE brand. 
- Nokia announced a strategic partnership with Mozilla to bring new
location
experiences to the Firefox OS. 
- Nokia acquired earthmine inc. earthmine's reality capture and
processing technologies will become integral parts of the 3D map
making capabilities of
HERE, 
- Nokia introduced LiveSight, a technology based on a highly
accurate, 3D map of the world.  LiveSight provides a precise and
intuitive augmented reality experience. 
- Location & Commerce continued to grow the Nokia Location Platform
(NLP), an
advanced location platform which offers numerous
opportunities upon which third
parties can build. During the year,
among others, Amazon became an NLP licensee
for maps and geocoding
and Ford's research organization selected the NLP to leverage Nokia's
high-quality global location content as well as scalable
cloud
services and APIs. 
- As part of its commitment to strengthen the Windows Phone
ecosystem, Nokia
integrated the NLP into Windows Phone 8 OS to power
location-based experiences
built for Windows Phone 8, including access
to offline maps 
- Location & Commerce agreed a partnership with Groupon to bring
local and national deals to Nokia customer and released a new version
of Nokia Maps for
the Lumia range that integrates Groupon Now! deals
into the app. 
- Location & Commerce introduced My Commute, a new feature of Nokia
Drive that
learns people's driving preferences and uses information
about the latest traffic conditions to help people choose between the
different routes they usually take to get to the places they travel
most. 
- Location & Commerce brought Nokia City Lens, an augmented reality
application,
to the Nokia Lumia smartphone range and continued to
update it throughout the
year. 
- Location & Commerce released Nokia Transport, a mobile application
for the
Lumia range providing underground, tram, suburban train and
bus directions for
more than 500 cities in 46 countries in a
convenient way, and further updated
the application during the year. 
- Location & Commerce continued to build partnerships with a number
of major
industry players, particularly in the area of
automotive-grade maps content and
solutions. We are providing content
to partners including Audi, BMW Chrysler,
Dacia, ESRI, Ford, Garmin,
Hyundai, Kia, Mercedes, Nikon, Pioneer, Scania, Toyota and
Volkswagen. 
- In indoor mapping, Location & Commerce continued to steadily
increase its coverage of venues and buildings around the world and
now covers 5 100 venues
and altogether 18 000 buildings in 40
countries. 
NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS 
- Nokia Siemens Networks added significant commercial LTE deals
during 2012,
including; a major contract with SOFTBANK MOBILE Corp. in
Japan to upgrade its
mobile broadband capacity across the country,
supplying, deploying and integrating its HSPA+ (3G) and FDD LTE (4G)
networks; deploying  the world's
first multi-technology, multi-vendor
self-organizing 3G and 4G mobile networks
for KDDI, also in Japan;
and supporting T-Mobile's 4G network evolution plan
with the
modernization of its GSM, HSPA+ core and radio access infrastructure
in key markets in the USA to improve existing voice and data coverage. 
- Nokia Siemens Networks had a total of 77 LTE deals by the 2012 year
end, with
other mobile broadband deals including with: Bharti Airtel
in India; Telkomsel
in Indonesia; KT in Korea;  Singapore's StarHub;
Tele2 in Estonia, Latvia and
Lithuania;  Hrvatski Telekom in Croatia;
T-Mobile and Orange in Poland; Polkomtel in Poland; Si.mobil in
Slovenia; COTA and Wimax Online in Spain; Zain
KSA in Saudi Arabia;
TOT in Thailand; Optus in Australia; Mobile TeleSystems in Russia; O2
in the UK; Vodacom in South Africa; Saudi Telecom Company;  and
China
Mobile. 
- Nokia Siemens Networks demonstrated its commitment to staying at
the forefront
of mobile broadband innovation with the opening of a
mobile broadband testing
and development facility which opened in
Silicon Valley in the United States.
 In other LTE technology
developments, Nokia Siemens Networks: launched its "FlexiZone"
approach to mobile broadband coverage, which will deliver faster and
more flexible 4G across areas with a very high user density more
efficiently and cost effectively; and expanded its portfolio, to
enable smooth 4G rollouts using
the 'Digital Dividend' in the Asia
Pacific region, Latin America and other parts
of the world. 
- Nokia Siemens Networks also launched a new CDMA base station,
bringing the
benefits of its globally recognized Flexi Multiradio Base
Station platform to
CDMA operators whilst reducing base station
operating costs by up to 70%, and
with 4G upgrade capability
underlining Nokia Siemens Networks' commitment to
mobile broadband
technology evolution. 
- Nokia Siemens Networks unveiled its 'Intelligent IP Edge', the
world's most
advanced network gateway that enables operators to
deliver a better mobile broadband experience and reduce running costs
using Nokia Siemens Networks' Liquid Net approach. Nokia Siemens
Networks and Juniper Networks announced the
launch of the "Integrated
Packet Transport Network", addressing the need for
service providers
to simplify network architecture and giving operators
more
flexibility in their transport networks in a cost effective way,
reflecting Nokia Siemens Networks Liquid Net approach to transforming
networks to cope with
unpredictability and increasing network demand. 
- Nokia Siemens Networks extended its comprehensive small cells
portfolio with
the launch of an enhanced range of picocell base
stations and 3G Femto access
points, and announced a US-based trial
of its Hot Zone approach for increasing
network capacity in the
Chicago area. 
- The launch of the Customer Experience Management (CEM) on Demand
portal in the
 first quarter allowed Nokia Siemens Networks to showcase
a new way of handling
relationships with the world's six billion
mobile users. Nokia Siemens Networks
was recognized for its advances
in CEM at the Global Telecoms Business (GTB)
Innovation Awards 2012
in the wireless infrastructure category where it won a
joint award
with Telkomsel for its use of Nokia Siemens Networks' CEM on
Demand
portfolio. Guangdong MCC in China has signed up to Nokia
Siemens Networks' CEM
software and services, enabling it to improve
customer experience by providing a unified view of its customer data
and continuous reporting of usage trends. 
- During the year, Nokia Siemens Networks completed the sale of its
microwave
transport business to DragonWave, the sale of its fixed
line Broadband Access
business to ADTRAN and the divestment of the
assets of the non-core IPTV business to Belgacom and Accenture. It
also announced it had reached an agreement to sell its Optical
Networks business to Marlin Equity Partners and
its Business Support
Systems business to Redknee. 
PERSONNEL 


 
 
+----------------------------------------------------------------------
---+
|PERSONNEL END OF QUARTER                                                 |
+-----------------------------------+-------+-------+------+-------+------+
|                                   |       |       |   YoY|       |   QoQ|
|                                   |Q4/2012|Q4/2011|Change|Q3/2012|Change|
+-----------------------------------+-------+-------+------+-------+------+
|Devices & Services and corporate   |                                     |
|common                             | 33 201| 49 705|  -33%| 38 264|  -13%|
+-----------------------------------+-------+-------+------+-------+------+
|Location & Commerce                |  6 186|  6 659|   -7%|  6 366|   -3%|
+-----------------------------------+-------+-------+------+-------+------+
|Nokia Siemens Networks             | 58 411| 73 686|  -21%| 60 635|   -4%|
+-----------------------------------+-------+-------+------+-------+------+
|Nokia Group                        | 97 798|130 050|  -25%|105 265|   -7%|
+-----------------------------------+-------+-------+------+-------+------+

 
The average number of Nokia Group employees during the period from
January to
December 2012 was 112 256, of which the average number of
employees at Location
& Commerce and Nokia Siemens Networks was 6 441
and 64 052 respectively. At December 31, 2012, Nokia Group employed a
total of 97 798 people (130 050 people
at December 31, 2011), of
which 6 186 were employed by Location & Commerce (6
659 people at
December 31, 2011) and 58 411 were employed by Nokia Siemens Networks
(73 686 people at December 31, 2011). 
SHARES 
The total number of Nokia shares at December 31, 2012, was 3 744 956
052. At
December 31, 2012, Nokia and its subsidiary companies owned 33
971 118 Nokia
shares, representing approximately 0.9% of the total
number of Nokia shares and
the total voting rights. 
DIVIDEND 
To ensure strategic flexibility, the Nokia Board of Directors will
propose that
no dividend payment will be made for 2012 (EUR 0.20 per
share for 2011). Nokia's
fourth quarter 2012 financial performance
combined with this dividend proposal
further solidifies the company's
strong liquidity position. 
The distributable funds on the balance sheet of the parent company as
per December 31, 2012 amount to EUR 5 213 million. 
RISKS AND FORWARD-LOOKING STATEMENTS 
It should be noted that Nokia and its business is exposed to various
risks and
uncertainties and certain statements herein that are not
historical facts are
forward-looking statements, including, without
limitation, those regarding: A)
the expected plans and benefits of
our partnership with Microsoft to bring together complementary assets
and expertise to form a global mobile ecosystem
for smartphones; B)
the timing and expected benefits of our strategies, including
expected operational and financial benefits and targets as well
as
changes in leadership and operational structure; C) the timing of
the deliveries
of our products and services; D) our ability to
innovate, develop, execute and
commercialize new technologies,
products and services; E) expectations regarding
market developments
and structural changes; F) expectations and targets regarding our
industry volumes, market share, prices, net sales and margins of
our
products and services; G) expectations and targets regarding our
operational
priorities and results of operations; H) expectations and
targets regarding collaboration and partnering arrangements; I) the
outcome of pending and threatened litigation and regulatory
proceedings; J) expectations regarding the
successful completion of 
restructurings, investments, acquisitions and divestments on a timely
basis and our ability to achieve the financial and operational
targets set in connection with any such restructurings,
investments,
acquisitions and divestments; and K) statements preceded
by "believe," "expect,"
"anticipate," "foresee," "target,"
"estimate," "designed," "aim", "plans," "intends," "will" or similar
expressions. These statements are based on management's best
assumptions and beliefs in light of the information
currently
available to it. Because they involve risks and
uncertainties, actual results
may differ materially from the results
that we currently expect. Factors, including risks and uncertainties,
that could cause these differences include,
but are not limited to: 
1) our success in the smartphone market, including our
ability to
introduce and bring to market quantities of attractive,
competitively
priced Nokia products that operate on the  Windows
Phone operating system that
are positively differentiated from our
competitors' products, both outside and
within the Windows Phone
ecosystem; 2) our ability to make Nokia products that
operate on the
Windows Phone operating system a competitive choice for consumers,
and together with Microsoft, our success in encouraging and
supporting a competitive and profitable global ecosystem for Windows
Phone products that achieves sufficient scale, value and
attractiveness to all market
participants; 3) reduced demand for, and
net sales of, Nokia Lumia products that
operate on the Windows Phone
7 operating system as a result of increasing availability of Nokia
Lumia products with the new Windows Phone 8 operating system; 4) the
expected continuing decline of sales of Symbian devices and
the
significantly diminishing viability of the Symbian smartphone
platform; 5) our
ability to produce attractive and competitive
devices in our Mobile Phones business unit including feature phones
and devices with more smartphone-like
features such as full touch
devices, in a timely and cost efficient manner with
differentiated
hardware, software, localized services and applications; 6)
our
ability to effectively and timely implement planned changes to
our operational
structure, including the planned restructuring
measures, and to successfully
complete the planned investments,
acquisitions and divestments in order to improve our operating model
and achieve targeted efficiencies and reductions in operating
expenses as well as our ability to accurately estimate the
related
restructuring charges and restructuring related cash
outflows;  7) our future
sales performance, among other factors, may
require us to recognize allowances
related to excess component
inventory, future purchase commitments and inventory
write-offs  in
our Devices & Services business;  8) our ability to realize a
return
on our investment in next generation devices, platforms and user
experiences; 9) the intensity of competition in the various markets
where we do business and our ability to maintain or improve our market
position or respond
successfully to changes in the competitive
environment; 10) our ability to retain, motivate, develop and recruit
appropriately skilled employees; 11) the
success of our Location &
Commerce strategy, including our ability to establish
a successful
location-based platform, extend our location-based  services
across
devices and operating systems, provide support for our Devices
& Services business and create new sources of revenue from our
location-based services and
commerce assets; 12) our actual
performance in the short-term and long-term could be materially
different from our forecasts, which could impact future estimates of
recoverable value of our reporting units and may result in impairment
charges; 13) our success in collaboration and partnering
arrangements
with third parties, including Microsoft; 14) our ability
to increase our speed
of innovation, product development and
execution to bring new innovative and
competitive mobile products and
location-based or other services to the market
in a timely manner;
15) our dependence on the development of the mobile and
communications industry, including location-based and other services
industries,
in numerous diverse markets, as well as on general
economic conditions globally
and regionally; 16) our ability to
protect numerous patented standardized or
proprietary technologies
from third-party infringement or actions to invalidate
the
intellectual property rights of these technologies and our ability to
maintain the existing sources of intellectual property related income
or establish new such sources; 17) our ability to maintain and
leverage our traditional strengths in the mobile product market if we
are unable to retain
the loyalty of our mobile operator and
distributor customers and consumers as a result of the implementation
of our strategies or other factors; 18) the success, financial
condition and performance of our suppliers, collaboration
partners
and customers; 19) our ability to manage efficiently our
manufacturing
and logistics, as well as to ensure the quality,
safety, security and timely
delivery of our products and services;
20) our ability to source sufficient amounts of fully functional
quality components, sub-assemblies, software and
services on a timely
basis without interruption and on favorable terms, particularly as we
ramp our new Lumia smartphone devices; 21) our ability to
manage our
inventory and timely adapt our supply to meet changing demands
for
our products, particularly as we ramp our new Lumia smartphone
devices; 22) any
actual or even alleged defects or other quality,
safety and security issues in
our products; 23) the impact of a
cybersecurity breach or other factors leading
to any actual or
alleged loss, improper disclosure or leakage of any personal or
consumer data collected by us or our partners or subcontractors, made
available
to us or stored in or through our products; 24) our ability
to successfully manage the pricing of our products and costs related
to our products and operations; 25) exchange rate fluctuations,
including, in particular, fluctuations between the euro, which is our
reporting currency, and the US dollar, the Japanese yen and the
Chinese yuan, as well as certain other currencies; 26) our ability to
protect the technologies, which we or others develop or that we
license, from claims that we have infringed third
parties'
intellectual property rights, as well as our unrestricted
use on commercially
acceptable terms of certain technologies in our
products and services; 27) the
impact of economic, political,
regulatory or other developments on our sales,
manufacturing
facilities and assets located in emerging market countries; 28)
the
impact of changes in government policies, trade policies, laws or
regulations where our assets are located and where we do business;
29) the potential complex tax issues and obligations we may incur to
pay additional taxes in the various jurisdictions in which we do
business and our actual or
anticipated performance, among other
factors, could result in allowances related
to deferred tax assets,
30) any disruption to information technology systems and networks
that our operations rely on, which may be for instance caused by
our
inability to successfully and smoothly implement our plans to
streamline our IT organization including the transfer of some
activities and employees to strategic partners; 31) unfavorable
outcome of litigations and regulatory proceedings;  32) allegations
of possible health risks from electromagnetic fields generated by
base stations and mobile products and lawsuits related to
them,
regardless of merit; 33) Nokia Siemens Networks ability to implement
its
new strategy and restructuring plan effectively and in a timely
manner to improve its overall competitiveness and profitability; 34)
Nokia Siemens Networks' success in the mobile broadband and services
market and Nokia Siemens
Networks' ability to effectively and
profitably adapt its business and operations in a timely manner to
the increasingly diverse service needs of its
customers; 35) Nokia
Siemens Networks' ability to maintain or improve its market
position
or respond successfully to changes in the competitive environment;
36)
Nokia Siemens Networks' liquidity and its ability to meet its
working capital
requirements; 37) Nokia Siemens Networks' ability to
timely introduce new competitive products, services, upgrades and
technologies; 38) Nokia Siemens
Networks' ability to execute
successfully its strategy for the acquired Motorola
Solutions
wireless network infrastructure assets; 39) developments under
large,
multi-year contracts or in relation to major customers in the
networks infrastructure and related services business; 40) the
management of our customer
financing exposure, particularly in the
networks infrastructure and related services business; 41) whether
ongoing or any additional governmental investigations into alleged
violations of law by some former employees of Siemens may involve and
affect the carrier-related assets and employees transferred by
Siemens to Nokia Siemens Networks; and 42) any impairment of Nokia
Siemens Networks customer relationships resulting from ongoing or any
additional governmental investigations involving the Siemens
carrier-related
operations transferred to Nokia Siemens Networks, as
well as the risk factors
specified on pages 13-47 of Nokia's annual
report on Form 20-F for the year ended December 31, 2011 under Item
3D. "Risk Factors." Other unknown or unpredictable factors or
underlying assumptions subsequently proving to be incorrect could
cause actual results to differ materially from those in the
forward-looking statements. Nokia does not undertake any obligation
to publicly
update or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to the
extent legally required. 
Nokia, Helsinki - January 24, 2013 
Planned publication dates for interim reports in 2013 
- first quarter 2013 interim report: April 18, 2013 
- second quarter 2013 interim report: July 18, 2013 
- third quarter 2013 interim report: October 17, 2013 
Publication of "Nokia in 2012" 
Nokia plans to publish its "Nokia in 2012" annual report, which
includes the
review by the Board of Directors and the audited annual
accounts, in week 13 of 2013. 
Nokia's Annual General Meeting 
Nokia's Annual General Meeting 2013 is scheduled to be held on May 7,
2013. 
www.nokia.com 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: NOKIA via Thomson Reuters ONE 
[HUG#1672898] 
Media and Investor Contacts:
Corporate Communications
tel. +358 7180 34900,
email: press.services@nokia.com
Investor Relations Europe
tel. +358 7180 34927
Investor Relations US
tel. +1 914 368 0555
 
 
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