2nd Qtr &Interim Rslts-Part 2

Nokia Corporation 27 July 2000 PART 2 CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million (unaudited) 4-6/00 4-6/99 1-6/00 1-6/99 1-12/99 Net sales 6 980 4 493 13 517 8 363 19 772 Cost of sales -4 203 -2 783 -8 215 -5 112 -12 227 Research and development -677 -395 -1 207 -747 -1 755 expenses Selling, general and -655 -419 -1 315 -826 -1 811 administrative expenses Amortization of goodwill -33 -15 -52 -29 -71 Operating profit 1 412 881 2 728 1 649 3 908 Share of results of -1 -2 -4 -4 -5 associated companies Financial income and 13 -2 33 -10 -58 expenses Profit before tax and 1 424 877 2 757 1 635 3 845 minority interests Tax -438 -280 -854 -526 -1 189 Minority interests -35 -16 -61 -23 -79 Net profit 951 581 1 842 1 086 2 577 Earnings per share, EUR Basic 0.20 0.13 0.39 0.24 0.56 Diluted 0.20 0.12 0.39 0.22 0.54 Average number of shares (1 000 shares) Basic 4 673 061 4 591 940 4 663 503 4 589 740 4 593 761 Diluted 4 795 234 4 834 946 4 776 569 4 830 164 4 743 185 Depreciation 227 140 407 284 665 Currency rate June 30, 2000, 1 EUR = 0.947 USD, 1 EUR = 5.94573 FIM NET SALES BY BUSINESS GROUP, EUR million (unaudited) 4-6/00 4-6/99 1-6/00 1-6/99 1-12/99 Nokia Networks 1 925 1 390 3 427 2 498 5 673 Nokia Mobile Phones 4 883 2 922 9 722 5 499 13 182 Nokia Ventures 193 67 404 131 415 Organization Discontinued Display - 136 - 270 580 Products Inter-business group -21 -22 -36 -35 -78 eliminations Nokia Group 6 980 4 493 13 517 8 363 19 772 OPERATING PROFIT BY BUSINESS GROUP, EUR million 4-6/00 4-6/99 1-6/00 1-6/99 1-12/99 Nokia Networks 348 274 621 500 1 082 Nokia Mobile Phones 1 221 671 2 382 1 287 3 099 Nokia Ventures -108 -31 -178 -53 -175 Organization Common Group Expenses -49 -33 -97 -85 -98 Nokia Group 1 412 881 2 728 1 649 3 908 CONDENSED CASH FLOW STATEMENT, IAS, EUR million (unaudited) 1-6/00 1-6/99 1-12/99 Net cash from operating activities 1 604 1 520 3 102 Net cash used in investing activities -936 -663 -1 341 Net cash used in financing activities -1 242 -931 -592 Net increase in cash and cash equivalents -574 -74 1 169 Cash and cash equivalents 4 200 2 970 2 990 at beginning of period Cash and cash equivalents 3 626 2 896 4 159 at end of period Dividends In 2000 dividends to Nokia Oyj's shareholders (EUR 931 million) were booked as liability at the end of the first quarter. The dividends were paid in April and had an impact on cash flow and gearing in the second quarter. In 1999 net cash used in financing activities includes dividends paid EUR 586 million. Currency rate June 30, 2000, 1 EUR = 0.947 USD, 1 EUR = 5.94573 FIM CONSOLIDATED BALANCE SHEET, IAS, EUR million (unaudited) 30.6.2000 30.6.1999 31.12.1999 ASSETS Fixed assets and other non- current assets Intangible assets 1 260 663 838 Property, plant and 2 359 1 617 2 031 equipment Investments in associated 88 82 76 companies Investments in other 161 65 68 companies Deferred tax assets 413 259 257 Other assets 768 67 217 5 049 2 753 3 487 Current assets Inventories 2 418 1 634 1 772 Receivables 5 604 4 010 4 861 Short-term investments 2 605 2 054 3 136 Bank and cash 1 021 843 1 023 11 648 8 541 10 792 Total assets 16 697 11 294 14 279 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity Share capital 281 291 279 Share issue premium 1 427 887 1 079 Treasury shares -151 -110 -24 Translation differences 270 213 243 Retained earnings 6 559 4 389 5 801 8 386 5 670 7 378 Minority interests 173 89 122 Long-term liabilities Long-term interest bearing 266 290 269 liabilities Deferred tax liabilities 83 86 80 Other long-term 72 48 58 liabilities 421 424 407 Current liabilities Short-term borrowings 819 431 792 Current portion of long-term 1 5 1 debt Accounts payable 2 509 1 845 2 202 Accrued expenses 4 388 2 830 3 377 7 717 5 111 6 372 Total shareholders' equity and 16 697 11 294 14 279 liabilities Interest-bearing liabilities 1 086 726 1 062 Net debt to equity (gearing), % -30 -38 -41 Shareholders' equity per 1.79 1.24 1.59 share, EUR Number of shares (1000 shares)* 4 676 847 4 593 200 4 652 679 Change in Nokia Accounting Principles: In 2000, the Group has adopted the new IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and recognized a provision for social security costs on unexercised stock options granted to employees. In accordance with the transitional rule of IAS 37 the cumulative prior year net of tax effect (206 MEUR) has been recorded as an adjustment to retained earnings. * Shares owned by Group companies are excluded Currency rate June 30, 2000, 1 EUR = 0.947 USD, 1 EUR = 5.94573 FIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR million (unaudited) Share Share issue Treasury Translation Retained Total Capital premium shares differences Earnings Balance at December 31, 1998 255 909 -110 182 3 873 5 109 Share issue 14 14 Bonus issues 36 -36 - Dividend -586 -586 Translation 31 31 differences Other increase/ 16 16 decrease, net Net profit 1 086 1 086 Balance at June 30, 1999 291 887 -110 213 4 389 5 670 Balance at December 31, 1999 279 1 079 -24 243 5 801 7 378 Share issue 2 348 350 Acquisition of -127 -127 treasury shares Dividend -931 -931 Translation 27 27 differences Change in -206 -206 accounting policy Other increase/ 53 53 decrease, net Net profit 1 842 1 842 Balance at June 30, 2000 281 1 427 -151 270 6 559 8 386 COMMITMENTS AND CONTINGENCIES, EUR million (unaudited) GROUP 30.6.2000 30.6.1999 31.12.1999 Collateral for own commitments Mortgages 12 6 6 Assets pledged 3 7 3 Contingent liabilities on behalf of Group companies Other guarantees 576 441 427 Contingent liabilities on behalf of other companies Guarantees for loans 267 143 234 Other guarantees 1 1 - Leasing obligations 862 510 560 Currency rate June 30, 2000, 1 EUR = 0.947 USD, 1 EUR = 5.94573 FIM NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS, EUR million 1) (unaudited) 30.6.2000 30.6.1999 31.12.1999 Foreign exchange forward 10 137 9 050 9 473 contracts 2) 3) Currency options bought 2 292 689 1 184 Currency options sold 1 914 698 978 Interest rate forward and - 315 598 futures contracts 2) Interest rate swaps 250 50 250 Cash settled equity swaps 4) 372 - - 1) The notional amounts of derivatives summarized here do not represent amounts exchanged by the parties and, thus are not a measure of the exposure of Nokia caused by its use of derivatives. 2) Notional amounts outstanding include positions, which have been closed off. 3) Notional amount includes contracts used to hedge the net investments in foreign subsidiaries. 4) Cash settled equity swaps are used to hedge risks relating to incentive programs and investment activities. Currency rate June 30, 2000, 1 EUR = 0.947 USD, 1 EUR = 5.94573 FIM It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding 1) the timing of product deliveries; 2) the Company's ability to develop new products and technologies; 3) expectations regarding market growth and developments; 4) expectations for growth and profitability; and 5) statements preceded by 'believes', 'expects', 'anticipates', 'foresees', or similar expressions, are forward-looking statements. Because such statements involve risks and uncertainties, actual results may differ materially from the results currently expected by the Company. Factors that could cause such differences include, but are not limited to 1) general economic conditions, such as the rate of economic growth in the Company's principal geographic markets or fluctuations in exchange rates; 2) industry conditions, such as the strength of product demand, the intensity of competition, pricing pressures, the acceptability of new product introductions, the introduction of new products by competitors, changes in technology, the ability of the Company to source components from third parties without interruption and at reasonable prices, and the financial condition of the Company's customers; 3) operating factors, such as continued success of manufacturing activities and the achievement of efficiencies therein, continued success of product development or inventory risks due to shifts in market demand; as well as 4) the risk factors specified on pages 21 to 23 of the Company's Form 20-F for the year ended December 31, 1999. NOKIA Helsinki, July 27, 2000 For more information: Lauri Kivinen, Corporate Communications, tel. +358 9 1807 495, lauri.kivinen@nokia.com Ulla James, Investor Relations, tel. +1 972 894 4880, ulla.james@nokia.com Antti Raikkonen, Investor Relations, tel. +358 9 1807 290, antti.raikkonen@nokia.com

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