Third Quarter Results - Pt 2
Nokia Corporation
19 October 2001
Part 2
CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million
(unaudited)
Pro forma Pro forma Reported Reported
7-9/01 7-9/00 7-9/01 7-9/00
Net sales 7 050 7 575 7 050 7 575
Cost of sales -4 573 -4 915 -4 573 -4 915
Research and development -675 -613 -675 -613
expenses
Selling, general and -731 -694 -731 -694
administrative expenses
One-time charges 1) - - -714
Amortization of goodwill - - -73 -31
Operating profit 1 071 1 353 284 1 322
Share of results of associated -9 -5 -9 -5
companies
Financial income and expenses 6 18 6 18
Profit before tax and minority 1 068 1 366 281 1 335
interests
Tax -298 -394 -85 -394
Minority interests -10 -49 -10 -49
Net profit 760 923 186 892
Earnings per share, EUR
Net profit
Basic 0.16 0.20 0.04 0.19
Diluted 0.16 0.19 0.04 0.19
Average number of shares
(1 000 shares)
Basic 4701821 4679976 4701821 4679976
Diluted 4771603 4793623 4771603 4793623
Depreciation and amortization, 341 279
total
Non-recurring items
1) One-time charges, see page 2
CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million
(unaudited)
Pro forma Pro forma Reported Reported
1-9/01 1-9/00 1-9/01 1-9/00
Net sales 22 403 21 092 22 403 21 092
Cost of sales 1) -14 157 -13 130 -14 228 -13 130
Research and development -2 235 -1 820 -2 235 -1 820
expenses
Selling, general and -2 363 -2 009 -2 502 -2 009
administrative expenses 2)
One-time charges 3) - - -714 -
Amortization of goodwill - - -215 -83
Operating profit 3 648 4 133 2 509 4 050
Share of results of -9 -9 -9 -9
associated companies
Financial income and expenses 80 51 80 51
Profit before tax and 3 719 4 175 2 580 4 092
minority interests
Tax -1 019 -1 248 -766 -1 248
Minority interests -64 -110 -64 -110
Net profit 2 636 2 817 1 750 2 734
Earnings per share, EUR
Net profit
Basic 0.56 0.60 0.37 0.59
Diluted 0.55 0.59 0.37 0.57
Average number of shares
(1 000 shares)
Basic 4696591 4669034 4696591 4669034
Diluted 4783567 4792321 4783567 4792321
Depreciation and 1014 686
amortization, total
Non-recurring items
1) Non-recurring charges of EUR 71 million from Q2
2) Non-recurring charges, total of EUR 139 million from Q2, including
EUR 54 million impairment of goodwill, and EUR 24 million gain from
the disposal of certain production operations.
3) One-time charges from Q3, see page 2.
CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million
(unaudited)
Pro forma Reported
1-12/00 1-12/00
Net sales 30 376 30 376
Cost of sales -19 072 -19 072
Research and development expenses -2 584 -2 584
Selling, general and administrative -2 859 -2 804
expenses 1)
Amortization of goodwill - -140
Operating profit 5 861 5 776
Share of results of associated companies -16 -16
Financial income and expenses 102 102
Profit before tax and minority interests 5 947 5 862
Tax -1 780 -1 784
Minority interests -140 -140
Net profit 4 027 3 938
Earnings per share, EUR
Net profit
Basic 0.86 0.84
Diluted 0.84 0.82
Average number of shares
(1 000 shares)
Basic 4 673 162 4 673 162
Diluted 4 792 980 4 792 980
Depreciation and amortization, total 1 009
Non-recurring items
1) Change in accounting method related to pensions,
EUR 55 million positive item
NET SALES BY BUSINESS GROUP, EUR million
(unaudited)
7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000
Nokia Networks 1 659 1 926 5 577 5 353 7 714
Nokia Mobile Phones 5 269 5 456 16 448 15 178 21 887
Nokia Ventures 140 209 443 613 854
Organization
Inter-business group -18 -16 -65 -52 -79
eliminations
Nokia Group 7 050 7 575 22 403 21 092 30 376
OPERATING PROFIT BY BUSINESS GROUP, EUR million
(unaudited)
Pro forma 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000
Nokia Networks 155 357 819 993 1 400
Nokia Mobile Phones 1 002 1 069 3 169 3 453 4 897
Nokia Ventures -72 -60 -267 -203 -307
Organization
Common Group Expenses -14 -13 -73 -110 -129
Nokia Group 1 071 1 353 3 648 4 133 5 861
Goodwill amortization 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000
Nokia Networks -26 -8 -64 -23 -42
Nokia Mobile Phones -23 -1 -70 -3 -18
Nokia Ventures -24 -22 -81 -57 -80
Organization
Common Group Expenses - - - - -
Total -73 -31 -215 -83 -140
Non-recurring items 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000
Nokia Networks -714 - -755 - -
Nokia Mobile Phones - - -35 - -
Nokia Ventures - - -134 - -
Organization
Common Group Expenses - - - - 55
Total -714 - -924 - 55
Reported 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000
Nokia Networks -585 349 - 970 1 358
Nokia Mobile Phones 979 1 068 3 064 3 450 4 879
Nokia Ventures -96 -82 -482 -260 -387
Organization
Common Group Expenses -14 -13 -73 -110 -74
Nokia Group 284 1 322 2 509 4 050 5 776
CONSOLIDATED BALANCE SHEET, IAS, EUR million
(unaudited)
30.9.2001 30.9.2000 31.12.2000
ASSETS
Fixed assets and other non-current
assets
Intangible assets 2 491 1 527 1 994
Property, plant and equipment 2 601 2 637 2 732
Investments in associated 58 83 61
companies
Available-for-sale investments 405 309 392
Deferred tax assets 629 501 401
Long-term loan receivables 819 712 808
7 003 5 769 6 388
Current assets
Inventories 1 910 2 420 2 263
Receivables 6 999 7 182 7 056
Available-for-sale investments 2 739 2 620 2 774
Bank and cash 1 559 1 497 1 409
13 207 13 719 13 502
Total assets 20 210 19 488 19 890
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital 283 281 282
Share issue premium 1 997 1 690 1 695
Treasury shares -40 -184 -157
Equity adjustments 224 435 347
Retained earnings 9 074 7 433 8 641
11 538 9 655 10 808
Minority interests 193 195 177
Long-term liabilities
Long-term interest bearing 243 186 173
liabilities
Deferred tax liabilities 81 69 69
Other long-term liabilities 64 72 69
388 327 311
Current liabilities
Short-term borrowings 782 1 110 1 069
Current portion of long-term 4 48 47
debt
Accounts payable 2 520 2 898 2 814
Accrued expenses 2 751 3 301 2 860
Provisions 2 034 1 954 1 804
8 091 9 311 8 594
Total shareholders' equity and 20 210 19 488 19 890
liabilities
Interest-bearing liabilities 1 029 1 344 1 289
Shareholders' equity per share, EUR 2.45 2.06 2.30
Number of shares (1000 shares) * 4 716 080 4 683 825 4 692 133
* Shares owned by Group companies are excluded
CONSOLIDATED CASH FLOW STATEMENT, IAS, EUR million
(unaudited)
1-9/2001 1-9/2000 1-12/2000
Cash flow from operating activities
Net profit 1 750 2 734 3 938
Adjustments, total 2 521 1 952 2 805
Net profit before change in net 4 271 4 686 6 743
working capital
Change in net working capital 452 -1 031 -1 377
Cash generated from operations 4 723 3 655 5 366
Interest received 211 197 255
Interest paid -138 -81 -115
Other financial income and expenses 41 -413 -454
Income taxes paid -961 -1 013 -1 543
Net cash from operating activities 3 876 2345 3 509
Cash flow from investing activities
Acquisition of Group companies,
net of acquired cash -131 2 -400
Investments in other shares - 95 -118 -111
Additions in capitalized development -327 -298 -393
costs
Long-term loans receivable from -756 -651 -776
customers
Capital expenditures -821 -1 171 -1 580
Proceeds from disposal of Group
companies,
net of disposed cash - 2 4
Proceeds from sale of available-for- 103 68 75
sale investments
Proceeds from sale of fixed assets 230 154 221
Dividends received 27 49 51
Net cash used in investing activities -1 770 -1 963 -2 909
Cash flow from financing activities
Proceeds from issuance of share 14 52 72
capital
Treasury shares acquired -21 -35 -160
Capital investment by minority 2 3 7
shareholders
Long-term liabilities, proceeds 49 -71 -82
from/payment of
Short-term borrowings, proceeds -548 124 133
from/payment of
Long-term receivables, proceeds -20 - -
from/payment of
Short-term receivables, proceeds -41 387 378
from/payment of
Dividends paid -1 354 -1 012 -1 004
Net cash used in financing activities -1 919 -552 -656
Foreign exchange impact on cash -72 128 80
Net increase in cash and cash 115 -42 24
equivalents
Cash and cash equivalents at beginning 4 183 4 159 4 159
of period
Cash and cash equivalents at end of 4 298 4 117 4 183
period
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR million
(unaudited)
Share Share Treas Transl Fair Retain Total
capital issue ury ation value ed
prem shares differ and earn
ium ences other ings
Reser
ves
Balance at 279 1 079 -24 243 5 801 7 378
December 31, 1999
Share issue 2 536 538
Acquisition of -160 -160
treasury shares
Stock options issued 75 75
on acquisitions
Dividend -931 -931
Translation 192 192
differences
Change in accounting -206 -206
policy
Other 35 35
increase/decrease, net
Net profit 2 734 2 734
Balance at 281 1 690 -184 435 7 433 9 655
September 30, 2000
Balance at 282 1 695 -157 347 - 8 641 10 808
December 31, 2000
Share issue 1 345 346
Acquisition of -21 -21
treasury shares
Disposal of treasury -53 138 85
shares
Stock options issued 20 20
on acquisitions
Stock options -10 -10
exercised
related to
acquisitions
Dividend -1 314 -1 314
Translation -60 -60
differences
Effect of change in -56 -56
accounting principle (IAS
39)
Cash flow hedges and fair -7 -7
value adjustments
Other -3 -3
increase/decrease, net
Net profit 1 750 1 750
Balance at 283 1 997 -40 287 -63 9 074 11 538
September 30, 2001
COMMITMENTS AND CONTINGENCIES, EUR million
(unaudited) GROUP
30.9.2001 30.9.2000 31.12.2000
Collateral for own commitments
Mortgages 10 12 12
Assets pledged 3 4 4
Collateral given on behalf
of other companies
Assets pledged 23 - 23
Contingent liabilities on behalf of
Group companies
Other guarantees 555 607 656
Contingent liabilities on
behalf of other companies
Guarantees for loans 74 372 298
Other guarantees 1
Leasing obligations 1 301 879 895
NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS, EUR million
(unaudited) 1)
30.9.2001 30.9.2000 31.12.2000
Foreign exchange forward contracts 2)3) 8 130 9 854 10 497
Currency options bought 980 1 539 2 165
Currency options sold 929 1 355 2 029
Interest rate forward and futures - - -
contracts 2)
Interest rate swaps - 250 250
Cash settled equity swaps 4) 267 350 336
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 investments activities
Closing rate, 1 EUR = 0.926 USD
Change in Accounting Principles
The Group has adopted, beginning January 1, 2001, IAS 39, Financial
instruments: recognition and measurement. The impact of the changes
in policy on opening shareholders' equity is quantified as follows:
Total shareholders' equity at 31 December 2000
as previously reported 10 808
IAS 39 transition adjustments:
Fair value adjustments to available-for-sale debt
and equity investments 1) 58
Transfer of gains and losses on qualifying cash
flow hedging derivatives 2) -114
Total shareholders' equity at 1 January 2001 10 752
1) Available-for-sale investments in debt and equity securities and
investments in unlisted equity shares are measured at fair value
unless investments are held for trading or originated loans or
unlisted equities cannot be measured reliably.
2) Gains and losses on foreign exchange forward contracts that
are properly designated and are highly effective as cash flow hedges
of highly probable forecast foreign currency cash flows are deferred
in a hedging reserve within equity. Previously, such gains and losses
were reported as deferred income or expenses.
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
and implement 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) industry conditions,
such as the strength of product demand, the intensity of competition,
pricing pressures, the acceptability of new product introductions
such as Internet-ready phones, the introduction of new products by
competitors, the impact of changes in technology, including the
Company's success in the emerging 3G market, the introduction and
marketing of new products and services by operators, the ability of
the Company to source components from third parties without
interruption and at reasonable prices, demand for vendor financing
and the Company's ability and willingness to provide such financing
and to mitigate the related exposure, and the success and financial
condition of the Company's strategic partners and customers; 2)
operating factors, such as continued success of manufacturing
activities and the achievement of manufacturing efficiencies therein,
continued success of product development and inventory risks due to
shifts in market demand; 3) general economic conditions in the
Company's principal geographic markets and in the wireless
telecommunications industry as a whole, and fluctuations in exchange
rates, including in particular the impact of the exchange rate
between the Euro and the US dollar; as well as 4) the risk factors
specified on pages 10 to 16 of the Company's Form 20-F for the year
ended December 31, 2000.
NOKIA
Helsinki, October 19, 2001
For more information:
Lauri Kivinen, Corporate Communications, tel. +358 7180 34495
Ulla James, Investor Relations, tel. +1 972 894 4880
Antti Raikkonen, Investor Relations, tel. +358 7180 34290
www.nokia.com
- Nokia will report 4Q 2001 results on January 24, 2002 and plans a
mid-quarter update on December 11, 2001.
- Results announcements for 1Q, 2Q and 3Q, 2002 are planned for
April 18, July 18 and October 17, respectively.
- The Annual General Meeting is expected to be held on March 21,2002.
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