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Electronics Production | July 16, 2009

Nokia: net sales down 25% Y-o-Y

Nokia reported net sales of €9.9 billion, down 25% year on year and up 7% sequentially (down 24% and up 7% at constant currency).

Olli-Pekka Kallasvuo, Nokia's CEO: "Nokia put in a solid performance in what was another tough quarter. We increased our share of the global mobile device market sequentially to an estimated 38% and grew our smartphone market share to an estimated 41%. As a result of strong operational execution, underlying operating margins improved sequentially in all segments. Competition remains intense, but demand in the overall mobile device market appears to be bottoming out. As before, we are continuing to tightly manage our operating expenses." "We are balancing short-term priorities with our longer-term growth ambitions as elements of the mobile handset, PC, internet and media industries converge to form a new industry. Consumers will increasingly expect devices and services designed as integrated solutions. To capture this opportunity we are accelerating our strategic transformation into a solutions company." 2Q Highlights - Nokia net sales of EUR 9.9 billion, down 25% year on year and up 7% sequentially (down 24% and up 7% at constant currency). - Devices & Services net sales of EUR 6.6 billion, down 28% year on year and up 7% sequentially (down 28% and up 7% at constant currency), and non-IFRS operating margin of 12.2% (20.1% in Q2 2008). - Devices & Services gross margin of 34.0%, up from 33.8% in Q1 2009. - Services net sales of EUR 140 million (billings of EUR 207 million). Due to the divestment of the security appliance business in April 2009, services net sales are not directly comparable to prior periods. - Estimated industry mobile device volumes of 268 million units, down 12% year on year and up 5% sequentially. - Nokia mobile device volumes of 103.2 million units, down 15% year on year and up 11% sequentially. - Nokia estimated mobile device market share of 38% in Q2 2009, down from 40% in Q2 2008 and up from 37% in Q1 2009. - Nokia mobile device ASP of EUR 62, down from EUR 65 in Q1 2009. - NAVTEQ net sales of EUR 147 million, up 11% sequentially, and non-IFRS operating margin of 12.8% (3.7% in Q1 2009) - Nokia Siemens Networks net sales of EUR 3.2 billion, down 21% year on year and up 7% sequentially (down 20% and up 8% at constant currency), and non-IFRS operating margin of 0.1% (6.7% in Q2 2008) - Nokia operating cash flow of EUR 716 million. - Total cash and other liquid assets of EUR 7.0 billion at the end of Q2 2009. Industry & Nokia Outlook - Nokia expects industry mobile device volumes in the third quarter 2009 to be at approximately the same level or up slightly sequentially. - Nokia expects its mobile device market share in the third quarter 2009 to be approximately at the same level sequentially. - Nokia continues to expect 2009 industry mobile device volumes to decline approximately 10% from 2008 levels. - Nokia now expects its market share in mobile devices to be approximately flat in 2009, compared with 2008. This is an update to Nokia's earlier target to increase its market share in mobile devices in 2009. - Nokia now expects its non-IFRS operating margin in Devices & Services in the second half 2009 to be at approximately the same level as in the first half 2009. This is an update to Nokia's earlier target for the non-IFRS operating margin in Devices & Services to be in the teens for the second half 2009. - Nokia and Nokia Siemens Networks continue to expect the mobile infrastructure and fixed infrastructure and related services market to decline approximately 10% in Euro terms in 2009, from 2008 levels. - Nokia and Nokia Siemens Networks now expect Nokia Siemens Networks market share to decline moderately in 2009, compared to 2008, with a strong performance in its Services business unit expected to be offset by declines in certain product businesses. This is an update to Nokia and Nokia Siemens Networks earlier target for Nokia Siemens Networks market share to remain constant in 2009, compared to 2008.
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