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Nokia Corporation Financial Report for Q2 and Half Year 2023
[July 20, 2023]

Nokia Corporation Financial Report for Q2 and Half Year 2023

Nokia Corporation
Half Year Financial Report
20 July 2023 at 08:00 EEST

Nokia Corporation Financial Report for Q2 and Half Year 2023

Resilient performance amidst macro uncertainty

  • Q2 net sales flat y-o-y in constant currency (-3% reported).
  • Enterprise net sales grew 27% y-o-y in constant currency (25% reported).
  • Comparable gross margin declined 180bps y-o-y to 38.8% (reported declined 200bps to 38.2%) due to regional mix in Mobile Networks, partly offset by a strong Network Infrastructure margin and catch-up net sales in Nokia Technologies.
  • Comparable operating margin declined y-o-y by 120bps to 11.0% (reported declined 130bps to 8.3%), due to the above mentioned gross margin factors, partly offset by lower operating expenses and higher other operating income.
  • Comparable diluted EPS of EUR 0.07; reported diluted EPS of EUR 0.05.
  • Free cash flow negative EUR 0.4bn, net cash balance of EUR 3.7bn.
  • As announced on 14 July 2023, Nokia now expects full year 2023 net sales in the range of EUR 23.2 billion to EUR 24.6bn with a comparable operating margin in the range of 11.5% to 13.0%.

This is a summary of the Nokia Corporation Financial Report for Q2 and Half Year 2023 published today. Nokia only publishes a summary of its financial reports in stock exchange releases. The summary focuses on Nokia Group's financial information as well as on Nokia's outlook. The detailed, segment-level discussion will be available in the complete financial report hosted at A video interview summarizing the key points of our Q2 results will also be published on the website. Investors should not solely rely on summaries of Nokia's financial reports and should also review the complete reports with tables.


In Q2 we delivered stable net sales in constant currency compared to the prior year. As a result of prudent management of our costs, we were able to deliver a solid comparable operating margin of 11.0% despite the regional mix headwinds faced in our Mobile Networks business. Considering the significant decline in major North American operators' investments, our operating margin has proved resilient, even adjusting for the EUR 80 million of catch-up net sales in Nokia Technologies.

The highlight of the quarter was the new long-term patent license agreement signed with Apple. This is another major milestone in our smartphone license renewal cycle. Our performance in Enterprise was also a highlight with net sales increasing by 27% in constant currency illustrating how well we are executing on this strategic pillar.

Our Network Infrastructure business saw a 6% decline in net sales in constant currency as macro uncertainty impacted the business, particularly in IP Networks which declined 11%. We also saw a decline in Fixed Networks, driven by Fixed Wireless Access and some modest inventory management, nonetheless fiber demand remains robust. In Optical Networks we saw continued strength with 16% growth. Supportive product mix in the quarter along with good cost discipline led to operating margin improving 160bps year-on-year.

Our Mobile Networks business continued to benefit from 5G deployments in India offsetting on-going weakness in North America, delivering 5% net sales growth in constant currency. Gross margin was largely in line with Q1 and continued cost discipline led to an operating margin of 7.9% in Q2.

Cloud and Network Services achieved net sales growth of 2% in constant currency and delivered a 2.2% operating margin in the quarter. We recently announced a strategic partnership with Red Hat for cloud infrastructure, another important milestone on the path to rebalancing the portfolio.

Nokia Technologies’ annual net sales run-rate remained approximately EUR 1.0 billion in Q2 excluding the catch-up benefit. Considering our current base of agreements, we now see that our net sales annual run-rate would be EUR 1.1 billion from January 2024, subject to any other material developments. We remain confident Nokia Technologies will return to an annual run-rate of EUR 1.4-1.5 billion as we work through the smartphone license renewal cycle and grow in new areas.

Earlier in the year I highlighted that we were starting to see signs of macroeconomic challenges along with inventory digestion impacting customer spending and this has intensified through the second quarter. In the second half we expect these trends to continue to impact our business, meaning we now see second half net sales broadly similar to the first half in both Network Infrastructure and Mobile Networks with some sequential improvement visible into Q4.

We have therefore reduced our net sales outlook for 2023 to EUR 23.2 billion to EUR 24.6 billion from the prior EUR 24.6 billion to EUR 26.2 billion. Proactive action by our business groups to manage cost is largely mitigating the impact to our operating margin and hence we only narrow the range to 11.5% to 13.0% from the prior 11.5% to 14.0%.

Looking beyond 2023, in Network Infrastructure we believe these impacts are mostly short-term in nature and that moving forward we see growth opportunities supported by the work we have been doing to diversify our customer base by growing in enterprise and webscale. In Mobile Networks there is still substantial need for operators to invest in 5G globally with only approximately 25% of the potential mid-band 5G base stations so far deployed outside China. We also remain focused on taking the necessary actions to improve our operating margin to double-digit. For the Group we remain committed to achieving at least 14% comparable operating margin longer-term.

Finally, given the strength of our balance sheet and EUR 3.7 billion net cash position I'm confident we have a firm foundation from which to navigate this period of uncertainty. I would like to thank all the Nokia employees for their hard work, cost focus and continued commitment.


EUR million (except for EPS in EUR) Q2'23 Q2'22 YoY change Constant currency YoY change Q1-Q2'23 Q1-Q2'22 YoY change Constant currency YoY change
Reported results                
Net sales 5 710 5 873 (3)% 0% 11 569 11 220 3% 4%
Gross margin % 38.2% 40.2% (200)bps   37.8% 40.4% (260)bps  
Research and development expenses (1 045) (1 091) (4)%   (2 154) (2 163) 0%  
Selling, general and administrative expenses (703) (728) (3)%   (1 432) (1 403) 2%  
Operating profit 474 564 (16)%   900 918 (2)%  
Operating margin % 8.3% 9.6% (130)bps   7.8% 8.2% (40)bps  
Profit for the period 289 460 (37)%   578 679 (15)%  
EPS, diluted 0.05 0.08 (38)%   0.10 0.12 (17)%  
Net cash and interest-bearing financial investments 3 660 4 546 (19)%   3 660 4 546 (19)%  
Comparable results                
Net sales 5 710 5 873 (3)% 0% 11 569 11 220 3% 4%
Gross margin % 38.8% 40.6% (180)bps   38.2% 40.7% (250)bps  
Research and development expenses (1 026) (1 069) (4)%   (2 119) (2 122) 0%  
Selling, general and administrative expenses (618) (623) (1)%   (1 259) (1 204) 5%  
Operating profit 626 714 (12)%   1 106 1 296 (15)%  
Operating margin % 11.0% 12.2% (120)bps   9.6% 11.6% (200)bps  
Profit for the period 414 585 (29)%   756 1 001 (24)%  
EPS, diluted 0.07 0.10 (30)%   0.13 0.17 (24)%  
ROIC1 13.9% 18.5% (460)bps   13.9% 18.5% (460)bps  

1 Comparable ROIC = Comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to the Performance measures section in Nokia Corporation Financial Report for Q2 and Half Year 2023 for details.

Business group results Network
Cloud and Network Services Nokia
Group Common and Other
EUR million Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22
Net sales 1 978 2 153 2 623 2 593 742 753 334 305 35 77
YoY change (8)%   1%   (1)%   10%   (55)%  
Constant currency YoY change (6)%   5%   2%   10%   (53)%  
Gross margin % 37.1% 35.4% 33.4% 40.2% 36.5% 37.2% 100.0% 99.7% (2.9)% (5.2)%
Operating profit/(loss) 260 247 206 291 16 (5) 236 217 (91) (36)
Operating margin % 13.1% 11.5% 7.9% 11.2% 2.2% (0.7)% 70.7% 71.1% (260.0)% (46.8)%



Under the authorization by the Annual General Meeting held on 4 April 2023, the Board of Directors may resolve on the distribution of an aggregate maximum of EUR 0.12 per share to be paid in respect of financial year 2022. The authorization will be used to distribute dividend and/or assets from the reserve for invested unrestricted equity in four installments during the authorization period, in connection with the quarterly results, unless the Board decides otherwise for a justified reason.

On 20 July 2023, the Board resolved to distribute a dividend of EUR 0.03 per share. The dividend record date is on 25 July 2023 and the dividend will be paid on 3 August 2023. The actual dividend payment date outside Finland will be determined by the practices of the intermediary banks transferring the dividend payments.

Following this announced distribution, the Board’s remaining distribution authorization is a maximum of EUR 0.06 per share.

Share buyback program

In February 2022, Nokia’s Board of Directors initiated a share buyback program to repurchase shares to return up to EUR 600 million of cash to shareholders in tranches over a period of two years. The second EUR 300 million phase of the share buyback program started in January 2023 and it will end at the latest by 21 December 2023. Under this phase, Nokia has by 30 June 2023 repurchased 40 145 500 of its own shares at an average price per share of approximately EUR 4.14.


  Full Year 2023
Net sales1 EUR 23.2 billion to EUR 24.6 billion (-4% to +2% growth in constant currency)
Comparable operating margin2 11.5 to 13.0%
Free cash flow2 20 to 50% conversion from comparable operating profit

1Assuming the rate 1 EUR = 1.09 USD as of 30 June 2023 continues for the remainder of 2023 along with actual H1 foreign exchange rates (adjusted from prior 1.09 USD rate as of 31 March 2023).
2 Please refer to Performance measures section in Nokia Corporation Financial Report for Q2 and Half Year 2023 for a full explanation of how these terms are defined.

Nokia announced an update to its financial outlook for 2023 on 14 July 2023. Nokia's financial outlook prior to this was for net sales of EUR 24.6 billion to EUR 26.2 billion, a comparable operating margin of 11.5% to 14.0% and free cash flow of 20 to 50% conversion from comparable operating profit. The updates to Nokia's outlook assumptions highlighted below are already incorporated in the revised guidance.

The outlook, long-term targets and all of the underlying outlook assumptions described below are forward-looking statements subject to a number of risks and uncertainties as described or referred to in the Risk Factors section later in this release. Along with Nokia's official outlook targets provided above, below are outlook assumptions by business group that support the group level outlook. The comments for relative growth by business group are provided to give a reference on how we expect each to perform relative to the overall group.

  2023 total addressable market Nokia business group assumptions
  Size (EUR bn)1 Constant currency growth Net sales growth Operating margin
Network Infrastructure2 44 (update) 1% (update) Below group (update) 12.0 to 14.0% (update)
Mobile Networks3 47 (update) -2% (update) Faster than group 6.0 to 8.0% (update)
Cloud and Network Services 27 (update) 3% Faster than group (update) 6.0 to 8.0% (update)

1 Total addressable market forecasts assume the rate 1 EUR = 1.09 USD as of 30 June 2023 continues for the remainder of 2023 along with actual H1 foreign exchange rates. The addressable market is excluding Russia and Belarus.
2 Excluding Submarine Networks.
3 Excluding China.

Nokia provides the following approximate outlook assumptions for additional items concerning 2023:

  Full year 2023 Comment
Nokia Technologies operating profit Largely stable Assuming closure of outstanding litigation / renewal discussions we expect largely stable operating profit in Nokia Technologies in 2023.
Nokia currently assumes free cash flow will be meaningfully greater than operating profit in Nokia Technologies. (update)
Group Common and Other operating profit Negative
EUR 400 million (update)
This includes central function costs which are expected to be largely stable at below EUR 200 million and an increase in investment in long-term research now above EUR 100 million. This line also accounts for Radio Frequency Systems (RFS) and could be impacted by any positive or negative revaluations in Nokia's venture funds in 2023.
Comparable financial income and expenses EUR 0 to negative EUR 100 million (update) Reflecting year-to-date results and the impact of higher interest expenses.
Comparable income tax rate ~25% Following the re-recognition of deferred tax assets at the end of 2022 we now provide an assumption based on a % tax rate instead of an absolute amount.
Cash outflows related to income taxes EUR 700 million Cash outflows related to income taxes are expected to increase due to mandatory capitalization of R&D costs under U.S. tax laws as well as evolving regional mix.
Capital Expenditures EUR 700 million  


Nokia's long-term targets remain unchanged from those introduced with its Q4 2021 financial results. The targets had an associated timeline of 3-5 years which remains unchanged and implies by 2024-2026. These targets remain intended to show Nokia's ambition to deliver continuous improvement in the business over the time period.

Net sales Grow faster than the market
Comparable operating margin1 = 14%
Free cash flow1 55 to 85% conversion from comparable operating profit
1 Please refer to Performance measures section in Nokia Corporation Financial Report for Q2 and Half Year 2023 for a full explanation of how these terms are defined.


Nokia and its businesses are exposed to a number of risks and uncertainties which include but are not limited to:

  • Competitive intensity, which is expected to continue at a high level;
  • Our ability to ensure competitiveness of our product roadmaps and costs through additional R&D investments;
  • Our ability to procure certain standard components and the costs thereof, such as semiconductors;
  • Disturbance in the global supply chain;
  • Accelerating inflation, increased global macro-uncertainty, major currency fluctuations and higher interest rates;
  • Potential economic impact and disruption of global pandemics;
  • War or other geopolitical conflicts, disruptions and potential costs thereof;
  • Other macroeconomic, industry and competitive developments;
  • Timing and value of new, renewed and existing patent licensing agreements with smartphone vendors, automotive companies, consumer electronics companies and other licensees;
  • Results in brand and technology licensing; costs to protect and enforce our intellectual property rights; on-going litigation with respect to licensing and regulatory landscape for patent licensing;
  • The outcomes of on-going and potential disputes and litigation;
  • Timing of completions and acceptances of certain projects;
  • Our product and regional mix;
  • Uncertainty in forecasting income tax expenses and cash outflows, over the long-term, as they are also subject to possible changes due to business mix, the timing of patent licensing cash flow and changes in tax legislation, including potential tax reforms in various countries and OECD initiatives;
  • Our ability to utilize our US and Finnish deferred tax assets and their recognition on our balance sheet;
  • Our ability to meet our sustainability and other ESG targets, including our targets relating to greenhouse gas emissions; as well the risk factors specified under Forward-looking statements of this release, and our 2022 annual report on Form 20-F published on 2 March 2023 under Operating and financial review and prospects-Risk factors.


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, benefits or outlook related to our strategies, product launches, growth management, licenses, sustainability and other ESG targets, operational key performance indicators and decisions on market exits; B) expectations, plans or benefits related to future performance of our businesses (including the expected impact, timing and duration of potential global pandemics and the general or regional macroeconomic conditions on our businesses, our supply chain and our customers’ businesses) and any future dividends and other distributions of profit; C) expectations and targets regarding financial performance and results of operations, including market share, prices, net sales, income, margins, cash flows, the timing of receivables, operating expenses, provisions, impairments, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions, competitiveness, revenue generation in any specific region, and licensing income and payments; D) ability to execute, expectations, plans or benefits related to changes in organizational structure and operating model; E) impact on revenue with respect to litigation/renewal discussions; and F) any statements preceded by or including "continue", “believe”, “commit”, “estimate”, “expect”, “aim”, “influence”, "will” or similar expressions. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from such statements. These statements are based on management’s best assumptions and beliefs in light of the information currently available to them. These forward-looking statements are only predictions based upon our current expectations and views of future events and developments and are subject to risks and uncertainties that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Factors, including risks and uncertainties that could cause these differences, include those risks and uncertainties identified in the Risk Factors above.


  • Nokia's webcast will begin on 20 July 2023 at 11.30 a.m. Finnish time (EEST). The webcast will last approximately 60 minutes.
  • The webcast will be a presentation followed by a Q&A session. Presentation slides will be available for download at
  • A link to the webcast will be available at
  • Media representatives can listen in via the link, or alternatively call +1-412-317-5619.


  • Nokia plans to publish its third quarter and January-September 2023 results on 19 October 2023.

About Nokia

At Nokia, we create technology that helps the world act together.

As a B2B technology innovation leader, we are pioneering networks that sense, think and act by leveraging our work across mobile, fixed and cloud networks. In addition, we create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs.

Service providers, enterprises and partners worldwide trust Nokia to deliver secure, reliable and sustainable networks today – and work with us to create the digital services and applications of the future.


Phone: +358 10 448 4900
Email: [email protected]
Kaisa Antikainen, Communications Manager

Investor Relations
Phone: +358 4080 3 4080
Email: [email protected]



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