Nokia Oyj · OMXHEX:NOKIA
Nokia Oyj — Q4 2022 Earnings Presentation
17 slides from Nokia Oyj's earnings presentation, Jan 26, 2023
Slide 1: Q4 2022 Investor presentation
Q4 2022 Investor presentation 26 January 2023 1 © 2023 Nokia
Slide 2: Disclaimer
Disclaimer It should be noted that Nokia and its business are exposed to proven to be incorrect could cause actual results to differ companies, including those in the same industry. The primary various risks and uncertainties and certain statements herein that materially from those in the forward-lo
Slide 3: Agenda
Agenda Pekka Lundmark 4. Financial highlights President and CEO 5. Business Group performance Marco Wirén 10. Financial performance bridges CFO 13. Cash flow performance 15. 2023 TAM and outlook 3 © 2023 Nokia Public
Slide 4: A solid end to a year of acceleration
A solid end to a year of acceleration Q4 22 net sales FY 22 net sales Net sales growth y-o-y (constant currency) +11% +6% 15% 10% 5% 0% Q4 22 operating margin FY 22 operating margin -5% 15.5% 12.5% -10% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q322 Q4 22 4Q rolling comparable gross margin 4Q rolling comp
Slide 5: Network Infrastructure – stellar finish to a strong year
Network Infrastructure – stellar finish to a strong year NI net sales growth y-o-y by business line Q4 22 net sales FY 22 net sales 40% 32% 21% +14% +10% 20% 11% 8% 0% -20% IP Networks Optical Networks Fixed Networks Submarine Networks Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q422 Q4 22 operating margin FY 22
Slide 6: Mobile Networks – quarter consolidated return to growth for year
Mobile Networks – quarter consolidated return to growth for year Mobile Networks net sales growth y-o-y Q4 22 net sales FY 22 net sales 20% +3% +3% 10% 0% -10% -20% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q4 22 operating margin FY 22 operating margin 6.8% 8.8% MN 4Q rolling g
Slide 7: Cloud and Network Services – meaningful growth in Enterprise
Cloud and Network Services – meaningful growth in Enterprise Cloud and Network Services net sales growth y-o-y Q4 22 net sales FY 22 net sales 15% +5% +2% 10% 5% 0% -5% -10% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q4 22 operating margin FY 22 operating margin 13.9% 5.3% CNS 4Q rolling gross
Slide 8: Nokia Technologies – benefited from licensee exercising option
Nokia Technologies – benefited from licensee exercising option Nokia Technologies net sales by quarter Q4 22 net sales FY 22 net sales +82% +5% 800 700 600 500 400 Q4 22 operating margin FY 22 operating profit 300 83.1% EUR 1.2bn 200 100 0 +650bps y-o-y Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 2
Slide 9: Agenda
Agenda Pekka Lundmark 4. Financial highlights President and CEO 5. Business Group performance Marco Wirén 10. Financial performance bridges CFO 13. Cash flow performance 15. 2023 TAM and outlook 9 © 2023 Nokia Public
Slide 10: Growth across most regions offsets North America decline
Growth across most regions offsets North America decline Year-on-year at constant currency +16% reported growth +11% constant currency growth €7.4bn +10% +3% +17% +116% -10% +32% +27% -12% Nokia Technologies +82% €6.4bn Europe ex. Tech +13% Q4 2021 Europe India Asia Pacific Latin Middle East Greater
Slide 11: Technologies and Network Infrastructure expand Q4 margin
Technologies and Network Infrastructure expand Q4 margin Group comparable operating profit Exercised option by licensee benefited Nokia Technologies €1 154m Network Infrastructure showed strong expansion €908m Mobile Networks impacted by 15.5% regional shift 14.2% Group Common saw negative Q4 2021 N
Slide 12: Strong underlying margin improvements in MN and NI in 2022
Strong underlying margin improvements in MN and NI in 2022 Business group contributions to comparable operating margin progress 12.5% 12.5% 11.0% 1.5% 2021 one-offs 2021 ex. one- MN NI CNS TECH GC / Other FX 2022 offs contribution contribution contribution contribution 12 © 2023 Nokia Public
Slide 13: NWC and Nokia Technologies drove weak cash conversion in 2022
NWC and Nokia Technologies drove weak cash conversion in 2022 27% 2022 D&A vs capex Net working Nokia Interest Taxes Restructuring Other 2022 FCF Comparable capital Technologies Conversion operating profit 13 © 2023 Nokia Public
Slide 14: 2023 cash conversion impacted by net working capital change
2023 cash conversion impacted by net working capital change 85% 85% 65% 50% 50% 55% 27% 20% 20% 2023 D&A vs capex Nokia Interest Taxes Restructuring Net working 2023 FCF 2020 FCF 2021 FCF 2022 FCF 2023 FCF Longer term Comparable Technologies / Other capital Conversion Conversion Conversion Conversio
Slide 15: Market growth in 2023 across BGs, led by 5G deployments in India
Market growth in 2023 across BGs, led by 5G deployments in India YoY Estimated, in EUR1 2022 2023 (at const. ccy) Network Infrastructure2 47bn 48bn +4% Mobile Networks3 51bn 53bn +5% Cloud and Network Services 28bn 29bn +4% 1Total addressable market forecasts assume the currency rate of 1 EUR = 1.07
Slide 16: 2023 outlook
2023 outlook Full year 2023 Net sales1 €24.9 billion to €26.5 billion (2 to 8% growth in constant currency) Comparable operating margin2 11.5 to 14.0% Free cash flow 20 to 50% conversion from comparable operating profit 1Assuming the rate 1 EUR = 1.07 USD as of 31 December 2022 through 2023. 2Please
Slide 17: NOKIA
NOKIA