Dokumentation: Hele Nokias beretning om regnskabet

NOKIA CLOSES 2003 WITH EXCELLENT FOURTH QUARTER

Nokia Mobile Phones grows sales and delivers record profits for Q4 and full year 2003

Nokia Networks demonstrates good profitability in Q4 due to strong seasonality and favorable product mix as well as impact of restructuring measures

Highlights 4Q 2003 (all comparisons are year on year):Net sales decreased 1% to EUR 8.8 billion (up 8% at constant currency)Nokia Mobile Phones net sales increased 4% to EUR 7.0 billion (up 15% at constant currency)Nokia Mobile Phones volumes grew 20% to 55.3 million units, leading to an estimated 38% market shareMobile phone industry volumes were an estimated 145 million unitsExcellent profitability with Nokia Mobile Phones pro forma and reported operating margins of 24.7% and 24.4%, respectivelyColor-screen phones made up half of Nokia Mobile Phones volumes Nokia Networks sales were EUR 1.7 billion, exceeding Nokia expectationsNokia Networks pro forma and reported operating margins improved to 12.1% and 2.4%, respectivelyPro forma EPS (diluted) grew 12% to EUR 0.29; reported EPS (diluted) grew 14% to EUR 0.25

Highlights full-year 2003 (all comparisons to full-year 2002):Net sales decreased 2% to EUR 29.5 billion (up 7% at constant currency) Nokia Mobile Phones net sales were up 2% to EUR 23.6 billion (up 12% at constant currency) Nokia Mobile Phones volumes grew 18% to 179.3 million units.

Total mobile phone industry volumes grew 16% to an estimated 471 million units Nokia”s estimated mobile phone market share was slightly above 38%Nokia Mobile Phones achieved record pro forma operating margins of 23.6% (reported 23.2%)Nokia Networks sales decreased 14% to EUR 5.6 billion with a pro forma operating margin of 4.2% (reported -3.9%) Pro forma EPS (diluted) decreased 4% to EUR 0.79, reported EPS (diluted) grew 6% to EUR 0.75

Nokia”s Board of Directors will propose a dividend of EUR 0.30 per share for 2003 (EUR 0.28 per share for 2002).

JORMA OLLILA, CHAIRMAN AND CEO:

2003 was a record year for the mobile handset industry and for Nokia Mobile Phones. With volume growth of 16%, the mobile phone market achieved record volumes of 471 million units for the year, and culminated in high fourth quarter volumes of 145 million units, according to our preliminary estimates. Nokia Mobile Phones reached not only record profits, but also higher-than-ever sales and volumes. In addition, we managed to slightly increase our mobile phone market share to just above 38% for the full year. This is a remarkable achievement from the Nokia team.

We strengthened our position in three strategic areas by attaining the number one market position in the United States and the number one position in GSM in China, as well as significantly increasing global CDMA market share. I am also very pleased with the 12% pro forma operating margin achieved by Nokia Networks in the fourth quarter. Towards the end of the year, the infrastructure market showed encouraging signs of recovery as the mobile operators increased investments and the market began to stabilize.

In 2003, Nokia achieved excellent profitability and pro forma operating profit of EUR 5.1 billion. In addition, our cash flow remained at an excellent level. At constant currency, Nokia sales would have grown 7% and Nokia Mobile Phones sales would have grown 12%. Sales were muted by the continued weakness of the US dollar, which depreciated by about 17% against the euro during the year.

We saw an increase in the average selling price of mobile phones compared with the third quarter as consumers upgraded to more advanced devices. Half of Nokia”s handset volumes for the fourth quarter had color screens. Nokia also has the broadest camera phone portfolio with 12 models announced by the end of 2003. We have been able to establish Series 60 as the leading mobile device platform and the Nokia 6600 smart phone, which exemplifies the convergence trend, has been an instant commercial success after its sales debut in October.

In addition to the mass-market adoption of more advanced phones, there was strong growth in emerging markets. Low penetration markets, such as India, Brazil and Russia, experienced significant volume growth, and Nokia Mobile Phones built on its leading position in many of the high growth and emerging markets.

Nokia Networks positive Q4 pro forma result comes from stronger-than-expected year-end operator investments combined with a favorable product mix and the success of the decisive restructuring measures we took in early 2003. It also reflects the improved profitability of 3G WCDMA as we have successfully addressed temporary quality issues experienced in the first part of 2003.

In 2004, Nokia expects market growth to continue. We expect total mobile phone market volumes to grow somewhat over 10% and the infrastructure market to be flat to slightly up.

We are energized by our reorganization into four business groups, which better reflect our strategy to expand mobile voice, drive consumer mobile multimedia and mobilize enterprise solutions. We enter 2004 ready to build on our already strong positions in Mobile Phones and Networks and to lay the foundations for future growth with the Multimedia and Enterprise Solutions business groups.

Nokia achieved its continued solid performance and high profitability with the commitment of our dedicated and hard-working employees. I thank everyone at Nokia for being passionate about what we do – Connecting People – and for contributing to our continued progress.

BUSINESS DEVELOPMENT AND OUTLOOK

Fourth quarter delivers strong nokia mobile phones and nokia networks sales

Nokia fourth-quarter net sales decreased by 1% to EUR 8.8 billion, compared to fourth quarter 2002. However, at constant currency, group net sales would have been up by 8% year on year.

In the fourth quarter, Nokia Mobile Phones net sales climbed 4% year on year, reaching EUR 7.0 billion, driven by high volumes and a favorable product mix featuring color-screen and camera phones. Sales continued to be strong in low penetration markets such as India, Brazil and Russia. On a regional level, the Americas had excellent sales growth and the Europe/Middle East/Africa region had solid growth, while sales in the Asia-Pacific region declined slightly. At constant currency, Nokia Mobile Phones net sales would have increased 15% year on year.

Nokia Networks net sales declined 18% year on year and were EUR 1.7 billion in the fourth quarter, exceeding our earlier expectations, primarily because of especially strong year-end investments from operators. Sales declined in all three geographical regions, Europe/Middle East/Africa, the Americas, and Asia-Pacific. However, sales growth was strong in China. At constant currency, Nokia Networks net sales would have been EUR 1.8 billion.

Higher Nokia Mobile Phones sales for 2003, Nokia Networks sales were low until fourth quarter

For the full year 2003, Nokia net sales decreased by 2% year on year to EUR 29.5 billion, but would have been up 7% at constant currency. This reflects the significant impact of the weak US dollar, which depreciated by about 17% against the euro in 2003.

Full-year net sales for Nokia Mobile Phones reached their highest level ever at EUR 23.6 billion, up 2% compared to 2002, driven by the consumer uptake of color-screen and camera phones, Nokia”s growing presence in low penetration markets, and Nokia”s increased share of the US, China and CDMA markets.

Nokia Mobile Phones net sales growth was more than offset by the decline in Nokia Networks net sales, which decreased 14% year over year to EUR 5.6 billion. This was due to the continued decline in the infrastructure market in 2003. Nokia Networks made a small gain in market share, reaching slightly above 15% of the overall mobile infrastructure market. Despite the continued decline in 2003, encouraging signs in the fourth quarter indicated that the market was beginning to stabilize as the financial position of operators improved, leading to an overall spending increase in all markets.

Record profit in nokia mobile phones for fourth quarter and 2003

In the fourth quarter 2003, Nokia Mobile Phones achieved record pro forma operating profit of EUR 1.7 billion (reported EUR 1.7 billion), up 4% compared to the fourth quarter 2002, and maintained a strong pro forma operating margin of 24.7% (reported 24.4%).

Full-year pro forma operating profit also reached a record high of EUR 5.6 billion, up 5% compared to 2002 (reported increased 5% to EUR 5.5 billion), with the pro forma operating margin increasing to 23.6% (reported increasing to 23.2%).

Nokia Networks improves fourth quarter profitability in a challenging year following its restructuring

In the fourth quarter, Nokia Networks pro forma operating profit was EUR 206 million, including EUR 108 million in impairments and write-offs of capitalized research and development expenses (reported operating profit EUR 41 million, including goodwill impairments of EUR 151 million), compared to EUR 19 million (reported operating loss EUR 82 million) in the fourth quarter 2002. Nokia Networks pro forma operating margin reached 12.1% (reported 2.4%) in the quarter reflecting stronger-than-expected year-end operator investments combined with a favorable product mix and the positive impact of the restructuring measures taken earlier in 2003. The level of profitability in the fourth quarter is not indicative of a trend.

For the full year 2003, Nokia Networks had a pro forma operating loss of EUR 236 million (reported EUR 219 million operating loss, including a EUR 151 million goodwill impairment and a positive adjustment of EUR 226 million related to customer finance impairments), compared to a pro forma operating profit of EUR 416 million (reported EUR 49 million operating loss) in 2002. The 2003 pro forma operating result was adversely affected by charges related to restructuring costs as well as impairments and write-offs of capitalized R&D expenses at Nokia Networks totaling EUR 550 million.

Cash position remains excellent

Nokia”s cash position remained excellent at EUR 11.3 billion as of December 31, 2003. During 2003, Nokia paid EUR 1.4 billion in dividends and used a record EUR 1.4 billion for share buy-backs.

Nokia and industry mobile phone volume growth robust in q4 and 2003

For the fourth quarter 2003, overall mobile phone market volumes are estimated to be about 145 million units, a 23% increase year on year. Nokia achieved a record volume of 55.3 million units, a 20% increase year-on-year and a 22% increase sequentially, resulting in an estimated 38% market share in the fourth quarter.

According to Nokia”s preliminary estimates for the full year, Nokia Mobile Phones volume growth of 18% was faster than the market volume growth of 16%. Nokia”s market share reached slightly above 38% with Nokia Mobile Phones volumes of 179.3 million units in a global market of an estimated 471 million units. Year-on-year market volume growth was 20% in Europe, 17% in the Americas and about 11% the Asia-Pacific region. Nokia continues to aim for 40% market share in the mobile device market.

In 2003, the company estimates the number of global mobile subscribers has grown to 1.3 billion and forecasts this number to reach two billion in 2008.

Industry outlook

Nokia continues to expect that mobile device market volumes will grow somewhat over 10% in 2004. Volume growth in mobile devices in 2004 is expected to come from increased penetration in growth markets and ongoing upgrades in developed markets.

In 2004, the network infrastructure market is expected to be at the same level as 2003 or slightly up, in euro terms.

In 2004, the mobile multimedia market will be in its infancy. However, Nokia expects to see demand continue to develop for mobile imaging, games, media and music devices as consumers become more aware of mobile multimedia services.

For the enterprise solutions market, Nokia sees that complete end-to-end solutions, covering mobile devices, gateway platforms, network security and applications will be key growth drivers. The company anticipates that 2004 will be of a year of initial building in the mobile enterprise solutions market by the industry and Nokia.

Nokia believes that 2004 will be the year of full-scale commercialization of 3G WCDMA. By the end of 2004, Nokia expects that more than 50 WCDMA networks will have been launched and that a large number of WCDMA handsets from different vendors will be available.

Nokia outlook for Q1 2004

First quarter net sales for Nokia Group are expected to increase in the range of 3% – 7%, compared to the first quarter of 2003. First quarter reported EPS (diluted) is expected to be in the range of EUR 0.17 and EUR 0.19.

As of the Q1 2004 results announcement, Nokia will no longer provide pro forma results.

It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding: A)the timing of product and solution deliveries; B)our ability to develop, implement and commercialize new products, solutions and technologies; C)expectations regarding market growth, developments and structural changes; D)expectations and targets for our results of operations; and E)statements preceded by “believe,” “expect,” “anticipate,” “foresee” or similar expressions are forward-looking statements. Because these statements involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors that could cause these differences include, but are not limited to: 1)developments in the mobile communications industry and the broader mobility industry, including the development of the mobile software and services market, as well as industry consolidation and other structural changes; 2)timing and success of the introduction and roll-out of new products and solutions;3) demand for and market acceptance of our products and solutions; 4)the impact of changes in technology and the success of our product and solution development; 5)the intensity of competition in the mobility industry and changes in the competitive landscape; 6)our ability to control the variety of factors affecting our ability to reach our targets and give accurate forecasts; 7)pricing pressures; 8)the availability of new products and services by network operators and other market participants;9)general economic conditions globally and in our most important markets; 10)our success in maintaining efficient manufacturing and logistics as well as high quality of our products and solutions;11) inventory management risks resulting from shifts in market demand; 12)our ability to source quality components without interruption and at acceptable prices; 13)our success in collaboration arrangements relating to technologies, software or new products and solutions; 14)the success, financial condition, and performance of our collaboration partners, suppliers and customers; 15)any disruption to information technology systems and networks that our operations rely on; 16)our ability to have access to the complex technology involving patents and other intellectual property rights included in our products and solutions at commercially acceptable terms and without infringing any protected intellectual property rights;17)developments under large, multi-year contracts or in relation to major customers; 18)the management of our customer financing exposure; 19)exchange rate fluctuations, including, in particular, fluctuations between the euro, which is our reporting currency, and the US dollar and the Japanese yen; 20)our ability to recruit, retain and develop appropriately skilled employees;21) our ability to implement our new organizational structure; and 22) the impact of changes in government policies, laws or regulations as well as 23)the risk factors specified on pages 11 to 18 of the company”s Form 20-F under “Item 3.D Risk Factors” for the year ended December 31, 2002.

NOKIA, Helsinki – January 22, 2004

Media and Investor Contacts:

Corporate Communications, tel. +358 7180 34495 or +358 7180 34900

Investor Relations Europe, tel. +358 7180 34289

Investor Relations US, tel. +1 972 894 4880

www.nokia.com

– Nokia will report 1Q results on April 16, 2004

– Results announcements for 2Q and 3Q, 2004 are planned for July 15 and October 14, respectively.

– The Annual General Meeting will be held on March 25, 2004.