Nokia Corporation Nokia Corporation Financial -3-

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Networks and Nokia Software are expected to be influenced by factors including: — Our expectation that we will slightly underperform our primary addressable market, which is expected to be flattish on a constant currency basis in full year 2020, excluding China (This is an update to our earlier commentary to […]

   Networks and Nokia Software are expected to be influenced by factors 
including: 
 
 
   -- Our expectation that we will slightly underperform our primary 
      addressable market, which is expected to be flattish on a constant 
      currency basis in full year 2020, excluding China (This is an update to 
      our earlier commentary to perform in-line with our primary addressable 
      market, which is expected to decline on a constant currency basis in full 
      year 2020, excluding China). Our updated expectation is primarily due to 
      lower network deployment services within Mobile Access and a slightly 
      improved market outlook, given the lower than expected market impact from 
      COVID-19 in Q2 2020; 
 
   -- Our expectation for operating profit seasonality in 2020 to be similar to 
      2019, with the majority of operating profit to be generated in the fourth 
      quarter. Due to our strong free cash flow performance in the first six 
      months of 2020, we no longer expect our free cash flow seasonality in 
      2020 to be similar to 2019. (This is an update to earlier commentary for 
      both operating profit and free cash flow seasonality in 2020 to be 
      similar to 2019); 
 
   -- Potential risks and uncertainties related to the scope and duration of 
      the COVID-19 impact and the pace and shape of the economic recovery 
      following the pandemic; 
 
   -- Competitive intensity, which is particularly impacting Mobile Access and 
      is expected to continue at a high level in full year 2020, as some 
      competitors seek to take share in the early stage of 5G; 
 
   -- Our expectation that we will accelerate our product roadmaps and cost 
      competitiveness through additional 5G investments in 2020, thereby 
      enabling us to drive product cost reductions and maintain the necessary 
      scale to be competitive; 
 
   -- Our expectation that we will drive improvements in automation and 
      productivity through additional digitalization investments in 2020; 
 
   -- Customer demand could weaken and risk could increase further in India, 
      after the country's Supreme Court upheld a ruling that telecoms companies 
      must pay retroactive license and spectrum fees; 
 
   -- Opportunities and risks in North America following the completion of a 
      merger, and, more broadly, the potential for temporary capital 
      expenditure constraints due to potential mergers or acquisitions by our 
      customers; 
 
   -- The timing of completions and acceptances of certain projects; 
 
   -- Some customers are reassessing their vendors in light of security 
      concerns, creating near-term pressure to invest in order to secure 
      long-term benefits; 
 
   -- Our expectation that we will improve our R&D productivity and reduce 
      support function costs through the successful execution of our cost 
      savings program, which is explained in more detail in the Cost savings 
      program section of Nokia Corporation interim report for Q2 and half year 
      2020; 
 
   -- Our product and regional mix, including the impact of the high cost level 
      associated with our first generation 5G products; and 
 
   -- Macroeconomic, industry and competitive dynamics. 
 
 
   Nokia Technologies is expected to be influenced by factors including: 
 
 
   -- The timing and value of new and existing patent licensing agreements with 
      smartphone vendors, automotive companies and consumer electronics 
      companies; 
 
   -- Results in brand and technology licensing; 
 
   -- Costs to protect and enforce our intellectual property rights; and 
 
   -- The regulatory landscape. 
 
 
   Additionally, our outlook is based on the following assumptions: 
 
 
   -- Nokia's outlook for recurring free cash flow is expected to be supported 
      by an improvement in net working capital performance and improved 
      operational results, partially offset by a more substantial difference in 
      2020 between profit and free cash flow in Nokia Technologies; 
 
   -- Non-IFRS financial income and expenses are expected to be an expense of 
      approximately EUR 300 million in full year 2020 and over the longer-term. 
      (This is an update to earlier commentary for an expense of EUR 350 
      million in full year 2020 and per annum over the longer-term). Our 
      updated commentary is primarily due to our expectation for lower costs 
      related to the sale of receivables and improved FX results; 
 
   -- Non-IFRS income taxes are expected at a rate of approximately 26% in full 
      year 2020 and approximately 25% over the longer-term, subject to the 
      absolute level of profits, regional profit mix and changes to our 
      operating model; 
 
   -- Cash outflows related to income taxes are expected to be approximately 
      EUR 400 million in full year 2020 and approximately EUR 450 million per 
      annum over the longer term until our US or Finnish deferred tax assets 
      are fully utilized (This is an update to earlier commentary for EUR 450 
      million in full year 2020.) Our updated commentary is primarily due to 
      our expectation for lower cash taxes in 2020, driven by COVID-19-related 
      tax relief; and 
 
   -- Capital expenditures are expected to be approximately EUR 550 million in 
      full year 2020 and approximately EUR 600 million per annum over the 
      longer-term. (This is an update to earlier commentary for EUR 600 million 
      in full year 2020.) Our updated commentary is primarily due to temporary 
      delays related to COVID-19. 
 
   ANALYST CONFERENCE CALL 
 
   Nokia's analyst conference call will begin on July 31, 2020 at 3 p.m. 
Finnish time. A link to the webcast of the conference call will be 
available at 
https://www.globenewswire.com/Tracker?data=jg7A6XD12Wh0kKBCMkH0P-f1INZIRzS_EVnRqob_gcN3WdCALILqPkD4iqQzCS2g-3Wi5QSyud317SVUy5FF-MEGqK790irvpkk4EdNcl3SPkDu-xVBGLO_dg2xb4O6m3fi4Nf94pgh3vkf9syTkQsKIPsS8bopbw3fRpUtSvg25wiZeqJqcyxRlcXXhzMHt8WJz1GR7TaEvEtexNSsdQ6hUo2KjirlXY_jjDlH2ERuLMwmUAm-6QVlVF8dLZ6OSi8OSQLFUqXlLRP59Y-aaGA== 
www.nokia.com/financials. Media representatives can listen in via the 
link, or call +1-412-717-9224. 
 
   Media Inquiries: 
 
   Nokia Communications 
 
   Tel. +358 10 448 4900 
 
   Email: 
https://www.globenewswire.com/Tracker?data=6r-e7Yn5m2r4z3Kn_1RDNVhRocksQ-MJKYIBfO5GvLz39SypzZ5_og13zHHkFyG9NOqEpVwd-xR2Oh3cIW5vXNx10ceTtEJ0OHUt1_6hR9k= 
press.services@nokia.com 
 
   Katja Antila, Head of Media Relations 
 
   Investor Inquiries: 
 
   Nokia Investor Relations 
 
   Tel. +358 40 803 4080 
 
   Email: 
https://www.globenewswire.com/Tracker?data=csoaOOK2C1rrWq-btxGLuN2neBfJg96tEru-p6SvnqRpPji90jlMPB86sM7bpPd9KippG6SES_ZCDkCobfZZavNzcxyFa-3eX1vE9nBESwavEQAeh2Ksbwolzm7t0wUq 
investor.relations@nokia.com 
 
   About Nokia 
 
   We create the technology to connect the world. Only Nokia offers a 
comprehensive portfolio of network equipment, software, services and 
licensing opportunities across the globe. With our commitment to 
innovation, driven by the award-winning Nokia Bell Labs, we are a leader 
in the development and deployment of 5G networks. 
 
   Our communications service provider customers support more than 6.4 
billion subscriptions with our radio networks, and our enterprise 
customers have deployed over 1,300 industrial networks worldwide. 
Adhering to the highest ethical standards, we transform how people live, 
work and communicate. For our latest updates, please visit us online 
www.nokia.com and follow us on Twitter @nokia. 
 
   RISKS AND FORWARD-LOOKING STATEMENTS 
 
   It should be noted that Nokia and its businesses are exposed to various 
risks and uncertainties and certain statements herein that are not 
historical facts are forward-looking statements. These forward-looking 
statements reflect Nokia's current expectations and views of future 
developments and include statements regarding: A) expectations, plans or 
benefits related to our strategies, growth management and operational 
key performance indicators; B) expectations, plans or benefits related 
to future performance of our businesses (including the expected impact 
and timing of that impact of COVID-19 on our businesses and our 
customers' businesses) and any expected future dividends including 
timing and qualitative and quantitative thresholds associated therewith; 
C) expectations and targets regarding financial performance, cash 
generation, results, the timing of receivables, operating expenses, 
taxes, currency exchange rates, hedging, cost savings, product cost 
reductions and competitiveness, as well as results of operations 
including targeted synergies, better commercial management and those 
results related to market share, prices, net sales, income and margins; 
D) expectations, plans or benefits related to changes in organizational 
and operational structure; E) expectations regarding competition within 
our market, market developments, general economic conditions and 
structural and legal change globally and in national and regional 
markets, such as China; F) our ability to integrate acquired businesses 
into our operations and achieve the targeted business plans and benefits, 
including targeted benefits, synergies, cost savings and efficiencies; 
G) expectations, plans or benefits related to any future collaboration 
or to business collaboration agreements or patent license agreements or 
arbitration awards, including income to be received under any 
collaboration or partnership, agreement or award; H) timing of the 
deliveries of our products and services, including our short term and 
longer term expectations around the rollout of 5G, investment 
requirements with such rollout, and our ability to capitalize on such 
rollout; as well as the overall readiness of the 5G ecosystem; I) 
expectations and targets regarding collaboration and partnering 
arrangements, joint ventures or the creation of joint ventures, and the 
related administrative, legal, regulatory and other conditions, as well 

(MORE TO FOLLOW) Dow Jones Newswires

July 31, 2020 01:15 ET (05:15 GMT)

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