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Tuesday, October 29, 2013
Nokia NSN, HERE Businesses Give Hope For Company's Future
Nokia gave an upbeat forecast for its telecom equipment unit Nokia Solutions and Networks (NSN), which will be the copmpany's main business after the sale of its phones division to Microsoft.
Nokia chieved underlying operating profitability for the fifth consecutive quarter, with a Q3 non-IFRS operating margin of 3.8%, driven by strong performances by Nokia Solutions and Networks (NSN) and HERE.
Nokia Group ended Q3 with a gross cash of EUR 9.1 billion and net cash of EUR 2.4 billion. Excluding the acquisition of Siemens' stake in NSN for EUR 1.7 billion, Nokia Group net cash was approximately flat sequentially. At the end of Q3 NSN's contribution to Nokia Group gross and net cash was EUR 2.7 billion and EUR 1.5 billion, respectively.
NSN achieved underlying profitability for the sixth consecutive quarter, with Q3 non-IFRS operating margin of 8.4%, reflecting strong gross margin and continued progress relative to its strategy in a seasonally weak quarter.
HERE achieved Q3 non-IFRS operating margin of 9.5%, reflecting solid gross margin and operational efficiency. - Devices & Services achieved Q3 non-IFRS operating margin of negative 1.6%.
Nokia Group net sales in Q3 2013 were EUR 5.7 billion, flat quarter-on-quarter.
Lumia Q3 volumes increased 19% quarter-on-quarter to 8.8 million units, reflecting Nokia's recently broadened Lumia product range and strong demand, particularly for the Lumia 520.
Mobile Phones Q3 volumes increased 4% quarter-on-quarter to 55.8 million units, demonstrating solid performance across the majority of Nokia's portfolio due to recently launched devices, particularly the Nokia 105, the Asha 501, and the Nokia 210.
Risto Siilasmaa, Nokia Chairman and interim CEO commented on the company's progress: "Subject to the planned completion of the Microsoft transaction, Nokia will have three established businesses: NSN, HERE and Advanced Technologies.
Our strategy work is making good progress and it has already become clear that there are meaningful opportunities for all of our business areas: NSN, HERE and Advanced Technologies. In all of these businesses, we have strong assets that we continue to invest in for the long term benefit of our customers and shareholders."
Commenting on the third quarter results, Timo Ihamuotila, Nokia CFO and interim President, said:
"The third quarter was among the most transformative in our company's history. We became the full owner of NSN and we agreed on the sale of our handset operations to Microsoft, transactions which we believe will radically reshape the future of Nokia for the better. Subject to the completion of the Microsoft transaction, Nokia will have significantly improved earnings profile, strong financial position and a solid foundation from which to invest.
We are pleased that NSN and HERE both generated solid profitability in what was a seasonally weak third quarter and at a time when we continue to make significant R&D investments into future growth opportunities."