Nokia Corporation 
Half year report
29 July 2021 at 08:00 EET

Nokia Corporation Financial Report for Q2 and Half Year 2021

Strong first half, 2021 Outlook revised upwards

  • Top-line strength continued in Q2, with constant currency net sales up 9% year-on-year, driven by growth across all business groups, with particular strength in Network Infrastructure. Reported net sales increased 4%.
  • Important progress on our three-phased strategy. Mobile Networks strengthening its competitiveness with major product launch, including some industry leading features. Network Infrastructure continued to gain share in the first half.
  • Our new operating model is delivering clear accountability and financial discipline through the organization.
  • Comparable gross margin of 42.3% (reported 41.0%) in Q2, reflecting broad improvements, particularly in Mobile Networks, which benefitted from a one-time software deal and 5G growth.
  • Comparable operating margin of 12.8% (reported 9.1%) in Q2, with improvements across all business groups, also helped by the one-time software deal in Mobile Networks.
  • Q2 comparable diluted EPS of EUR 0.09; reported diluted EPS of EUR 0.06.
  • Generated positive free cash flow for the fifth quarter in a row; liquidity position remains solid with EUR 3.7bn net cash.
  • Strong performance in first half 2021 with 9% constant currency sales growth (reported net sales +4%) and comparable operating margin of 11.9% (reported 8.8%), driving increase in our full year Outlook although headwinds remain for the second half.
  • Considering our strong start to 2021, we revise our full year 2021 Outlook, including net sales expected to be EUR 21.7bn to 22.7bn (previously EUR 20.6bn to EUR 21.8bn) with comparable operating margin in the range of 10-12% (previously 7-10%).

This is a summary of the Nokia Corporation Financial Report for Q2 and Half Year 2021 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 Investors should not solely rely on summaries of Nokia's financial reports, but should also review the complete reports with tables.


I am delighted that our strong start to 2021 continued in the second quarter. Our constant currency sales growth of 9%, combined with good cost control, enabled us to deliver a comparable operating margin of 12.8%. Even excluding a one-time software deal in Mobile Networks, we saw good underlying progress in operating margin. We are already seeing the benefits of our new operating model which helped us to deliver such a strong financial performance.

The highlight of the second quarter was the Mobile Networks launch of our new AirScale baseband and radio products with up to 75% better power efficiency helping to reduce our environmental footprint and the lightest 32TRX massive MIMO active antenna in the market. In Network Infrastructure we sustained double-digit growth and have a series of product launches ahead in the second half to further strengthen our differentiation. Cloud and Network Services is making good progress on its portfolio rebalancing and Nokia Technologies continues to scale with two licensing agreements with automotive manufacturers including Daimler.

Considering our robust start to 2021, we are revising upwards our full year Outlook. We now expect a comparable operating margin between 10-12% for full year 2021, compared to our previous range of 7-10%. We have executed faster than planned on our strategy in the first half which provides us with a good foundation for the full year. We still however expect to face the earlier communicated headwinds in the second half, particularly with market share loss and price erosion in North America. Therefore, we still expect our typical quarterly earnings seasonality to be less pronounced in 2021. In addition, we continue to accelerate R&D investments and monitor risks around component availability, considering the strong demand for our products.

Overall, I am very happy with the progress made in the first half. I want to thank our entire team for their hard work and commitment.


EUR million (except for EPS in EUR) Q2'21 Q2'20 YoY change Constant currency YoY change Q1–Q2'21 Q1–Q2'20 YoY change Constant currency YoY change
Reported results                
Net sales 5 313 5 092 4% 9% 10 389 10 005 4% 9%
Gross margin %1 41.0% 38.1% 290bps   39.5% 36.8% 270bps  
Research and development expenses1 (1 063) (1 013) 5%   (2 060) (2 019) 2%  
Selling, general and administrative expenses1 (712) (709) 0%   (1 360) (1 489) (9)%  
Operating profit 484 170 185%   916 94 874%  
Operating margin % 9.1% 3.3% 580bps   8.8% 0.9% 790bps  
Profit/(loss) for the period 351 99 255%   614 (17)    
EPS, diluted 0.06 0.02 200%   0.11 0.00    
Net cash and current financial investments 3 688 1 550 138%   3 688 1 550 138%  
Comparable results                
Net sales 5 313 5 093 4% 9% 10 389 10 007 4% 9%
Gross margin % 42.3% 39.6% 270bps   40.3% 38.0% 230bps  
Research and development expenses (1 011) (953) 6%   (1 985) (1 928) 3%  
Selling, general and administrative expenses (585) (590) (1)%   (1 137) (1 262) (10)%  
Operating profit 682 423 61%   1 234 539 129%  
Operating margin % 12.8% 8.3% 450bps   11.9% 5.4% 650bps  
Profit for the period 539 316 71%   914 348 163%  
EPS, diluted 0.09 0.06 50%   0.16 0.06 167%  
ROIC2 18.4% 11.4% 700bps          
1In Q4 2020, Nokia reclassified certain items of income and expenses from other operating income and expenses to the functions. The comparative reported results for Q2’20 and Q1-Q2'20 have been recast accordingly. Refer to Note 1, Basis of preparation, in the Financial statement information section included in Nokia Corporation Financial Report for Q2 and Half Year 2021 for details.
2Comparable ROIC = Comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to Note 10, Performance measures, in the Financial statement information section included in Nokia Corporation Financial Report for Q2 and Half Year 2021 for details.

Reconciliation of reported operating profit to comparable operating profit        
EUR million Q2'21 Q2'20 YoY change Q1–Q2'21 Q1–Q2'20 YoY change  
Reported operating profit 484 170 185% 916 94 874%  
Restructuring and associated charges 141 130   177 217    
Amortization of acquired intangible assets 97 106   194 207    
Settlement of legal disputes (80) 0   (80) 0    
Impairment of assets, net of impairment reversals 32 19   33 20    
Other, net 8 (2)   (6) 1    
Comparable operating profit 682 423 61% 1 234 539 129%  


  Full year 2021 Full year 2023
Net sales1 EUR 21.7 billion to EUR 22.7 billion

(adjusted from EUR 20.6 to 21.8bn)
Grow faster than the market
Comparable operating margin2 10 to 12% (adjusted from 7 to 10%) 10–13%
Free cash flow3 Clearly positive (adjusted from positive) Clearly positive
Comparable ROIC2,4 17 to 21% (adjusted from 10 to 15%) 15–20%
1 Assuming actual currency rates for first half 2021 and end of June EUR/USD rate of 1.19 continues in the second half 2021 (this is adjusted from our previous guidance based on the year-end 2020 EUR/USD rate of 1.23).
2 Comparable measures exclude intangible asset amortization and other purchase price fair value adjustments, goodwill impairments, restructuring related charges and certain other items affecting comparability. Refer to Note 10, Performance measures, in the Financial statement information section included in Nokia Corporation Financial Report for Q2 and Half Year 2021 for details.
3 Free cash flow = net cash from/(used in) operating activities - capital expenditures + proceeds from sale of property, plant and equipment and intangible assets – purchase of non-current financial investments + proceeds from sale of non-current financial investments..
4 Comparable ROIC = comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to Note 10, Performance measures, in the Financial statement information section included in Nokia Corporation Financial Report for Q2 and Half Year 2021 for details.


  • Nokia’s outlook assumptions for the comparable operating margin of each business group in 2021 and 2023 are provided below (updated):
  Full year 2021 Full year 2023
Mobile Networks 4 to 7% 5 to 8%
Network Infrastructure 8 to 11% 9 to 12%
Cloud and Network Services 3 to 6% 8 to 11%
Nokia Technologies >75% >75%
  • We continue to maintain our expectation for Nokia Technologies to deliver a slight improvement in comparable operating profit in full year 2021, relative to full year 2020, and stable performance over the longer-term;
  • Group Common and Other primarily consists of support function costs. We expect the net negative impact of Group Common and Other to be approximately EUR 200 million in 2021 and over the longer-term;
  • In full year 2021, Nokia expects the free cash flow performance of Nokia Technologies to be approximately EUR 600 million lower than its operating profit, primarily due to prepayments we received from certain licensees;
  • Comparable financial income and expenses are expected to be an expense of approximately EUR 200 million in full year 2021 and EUR 250 million over the longer-term (updated);
  • Comparable income tax expenses are expected to be approximately EUR 450 million in full year 2021 and over the longer-term, subject to regional profit mix, net sales subject to withholding tax and the timing of patent licensing cash flow;
  • Cash outflows related to income taxes are expected to be approximately EUR 350 million in full year 2021 and over the longer-term until our US or Finnish deferred tax assets are fully utilized;
  • Capital expenditures are expected to be approximately EUR 650 million in full year 2021 and EUR 600 million over the longer-term (updated); and
  • Rule of thumb related to currency fluctuations: Assuming our current mix of net sales and total costs (refer to Note 1, Basis of Preparation, in the Financial statement information section included in Nokia Corporation Financial Report for Q2 and Half Year 2021 for details), we expect that a 10% increase in the EUR/USD exchange rate would have an impact of approximately negative 4 to 5% on net sales and an approximately neutral impact on operating profit.


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

  • Competitive intensity, which is particularly impacting Mobile Networks and is expected to continue at a high level in full year 2021, as some competitors seek to take share in the early stages of 5G;
  • Our ability to accelerate our product roadmaps and cost competitiveness through additional 5G investments in full year 2021, thereby enabling us to drive product cost reductions and maintain the necessary scale to be competitive;
  • Some customers are reassessing their vendors in light of security concerns, creating near-term pressure to invest in order to secure long-term benefits;
  • Developments in North America following the conclusion of the C-band auction, including the potential for temporary capital expenditure constraints or the acceleration of 5G deployments;
  • The scope and duration of the COVID-19 impact, particularly in certain countries, including India, where the pandemic has worsened, and the pace and shape of the economic recovery following the pandemic;
  • Our ability to procure certain standard components and the costs thereof, such as semiconductors;
  • The timing of completions and acceptances of certain projects;
  • Our product and regional mix;
  • Macroeconomic, industry and competitive dynamics;
  • 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 for patent licensing;

as well as the risk factors specified under Forward-looking Statements of this release, and our 2020 annual report on Form 20-F published on March 4, 2021 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 and operational key performance indicators; B) expectations, plans or benefits related to future performance of our businesses (including the expected impact, timing and duration of that impact of COVID-19 on our businesses, our supply chain and our customers’ businesses) and any future dividends; 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) ability to execute, expectations, plans or benefits related to changes in organizational and operational structure and cash or cost savings arrangements; and (E) 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 video webcast will begin on 29 July 2021 at 11:30 a.m. Finnish time. A link to the webcast will be available at Media representatives can follow the presentation via the link, or alternatively call +1-412-717-9224.

About Nokia

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

As a trusted partner for critical networks, we are committed to innovation and technology leadership across mobile, fixed and cloud networks. We create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs.

Adhering to the highest standards of integrity and security, we help build the capabilities needed for a more productive, sustainable and inclusive world.


Phone: +358 10 448 4900
Katja Antila, Head of Media Relations

Investor Relations
Phone: +358 40 803 4080



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