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= firstname.lastname@example.org 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 email@example.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
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