5g
Nokia Report for Q1 2018: We will fuel that adoption in 2018 with investments in trial costs, as needed says Rajeev Suri
Solid full year results expected in Networks despite challenging Q1; continued strength in Nokia Technologies
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Nokia sees further acceleration of 5G with strong momentum building by year-end
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Nokia raises its primary addressable market outlook for its Networks business in full year 2018, and expects to outperform that market in full year 2018
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Full year 2018 Nokia-level guidance reiterated
This is a summary of the Nokia Corporation financial report for Q1 2018 published today. The complete financial report for Q1 2018 with tables is available at www.nokia.com/financials. Investors should not rely on summaries of our financial reports only, but should review the complete financial reports with tables.
FINANCIAL HIGHLIGHTS
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Net sales in Q1 2018 were EUR 4.9bn, compared to EUR 5.4bn in Q1 2017. On a constant currency basis, net sales would have been flat year-on-year.
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Non-IFRS diluted EPS in Q1 2018 was EUR 0.02, compared to EUR 0.03 in Q1 2017. Reported diluted EPS in Q1 2018 was negative EUR 0.06, compared to negative EUR 0.08 in Q1 2017.
Nokia’s Networks business net sales were EUR 4.3bn, with operating profit of EUR 43mn
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Q1 net sales and profitability were impacted primarily by lower net sales in North America. However, order intake and backlog were excellent in Q1. Therefore, Nokia expects the net sales trajectory in North America, as well as profitability, to improve significantly in the second half of 2018.
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Based on firm orders, Nokia sees customer demand for 5G accelerating further, particularly in North America, where we expect commercial 5G network deployments to begin near the end of 2018.
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Encouraging progress was made in Q1 with our strategy to diversify and grow by targeting attractive adjacent markets. Strong momentum continued with large enterprise vertical and webscale customers, with double-digit year-on-year growth in net sales and order intake.
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Momentum in our end-to-end strategy continued, with one third of our sales pipeline now comprised of solutions, products and services from multiple business groups.
Nokia Technologies net sales were EUR 365mn, with operating profit of EUR 274mn
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Strong track record continued, with 48% year-on-year net sales growth and 136% year-on-year operating profit increase in Q1, primarily related to license agreements entered into in 2017.
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Nokia Technologies continued to make good progress on new patent licensing agreements, as well as brand and technology licensing agreements; no major agreements were announced in Q1.
Outlook
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Nokia reiterates all of its full year 2018 Nokia-level guidance, despite expected weakness in its Networks business in the first half of 2018.
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In its Networks business, Nokia sees market conditions improving and 5G accelerating further, with strong momentum building by year end. Nokia now sees a stronger primary addressable market for its Networks business in full year 2018 and expects its Networks business to outperform its primary addressable market in full year 2018.
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Nokia remains on target to deliver EUR 1.2 billion of recurring annual cost savings in full year 2018. Our active efforts to drive 5G adoption are expected to result in EUR 100 to 200 million of temporary expenses in 2018 to support 5G customer trials.
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Nokia continues to see opportunities to build on its track record in Nokia Licensing within Nokia Technologies and drive a compound annual growth rate of approximately 10% for recurring net sales over the 3-year period ending 2020.
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Please refer to the full details and other targets in the Outlook section of this press release.
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First quarter 2018 non-IFRS results. Refer to note 1, “Basis of Preparation” and note 15, “Performance measures”, in the “Financial statement information” section for further details1 |
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EUR million (except for EPS in EUR) |
Q1’18 |
Q1’17 |
YoY change |
Constant currency YoY change |
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Net sales (non-IFRS) |
4 929 |
5 388 |
(9)% |
0% |
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Nokia’s Networks business |
4 324 |
4 902 |
(12)% |
(3)% |
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Nokia Technologies |
365 |
247 |
48% |
49% |
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Group Common and Other |
252 |
254 |
(1)% |
4% |
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Gross profit (non-IFRS) |
1 941 |
2 196 |
(12)% |
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Gross margin % (non-IFRS) |
39.4% |
40.8% |
(140)bps |
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Operating profit (non-IFRS) |
239 |
341 |
(30)% |
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Nokia’s Networks business |
43 |
324 |
(87)% |
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Nokia Technologies |
274 |
116 |
136% |
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Group Common and Other |
(78) |
(99) |
(21)% |
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Operating margin % (non-IFRS) |
4.8% |
6.3% |
(150)bps |
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Financial income and expenses (non-IFRS) |
(116) |
(81) |
43% |
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Income taxes (non-IFRS) |
(36) |
(48) |
(25)% |
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Profit for the period (non-IFRS) |
83 |
203 |
(59)% |
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Profit attributable to the equity holders of the parent (non-IFRS) |
86 |
196 |
(56)% |
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Non-controlling interests (non-IFRS) |
(3) |
6 |
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EPS, EUR diluted (non-IFRS) |
0.02 |
0.03 |
(33)% |
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First quarter 2018 reported results. Refer to note 1, “Basis of Preparation” and note 15, “Performance measures”, in the “Financial statement information” section for further details1 |
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EUR million (except for EPS in EUR) |
Q1’18 |
Q1’17 |
YoY change |
Constant currency YoY change |
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Net sales |
4 924 |
5 378 |
(8)% |
0% |
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Nokia’s Networks business |
4 324 |
4 902 |
(12)% |
(3)% |
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Nokia Technologies |
365 |
247 |
48% |
49% |
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Group Common and Other |
252 |
254 |
(1)% |
4% |
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Non-IFRS exclusions |
(5) |
(11) |
(55)% |
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Gross profit |
1 805 |
2 125 |
(15)% |
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Gross margin % |
36.7% |
39.5% |
(280)bps |
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Operating loss |
(336) |
(127) |
165% |
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Nokia’s Networks business |
43 |
324 |
(87)% |
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Nokia Technologies |
274 |
116 |
136% |
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Group Common and Other |
(78) |
(99) |
(21)% |
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Non-IFRS exclusions |
(575) |
(468) |
23% |
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Operating margin % |
(6.8)% |
(2.4)% |
(440)bps |
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Financial income and expenses |
(108) |
(146) |
(26)% |
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Income taxes |
94 |
(154) |
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Loss for the period |
(354) |
(435) |
(19)% |
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Loss attributable to the equity holders of the parent |
(351) |
(473) |
(26)% |
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Non-controlling interests |
(3) |
37 |
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EPS, EUR diluted |
(0.06) |
(0.08) |
(25)% |
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Net cash and current financial investments |
4 176 |
4 409 |
(5)% |
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1Results are as reported unless otherwise specified. The financial information in this report is unaudited. Non-IFRS results exclude costs related to the acquisition of Alcatel-Lucent and related integration, goodwill impairment charges, intangible asset amortization and other purchase price fair value adjustments, restructuring and associated charges and certain other items that may not be indicative of Nokia’s underlying business performance. For details, please refer to the non-IFRS exclusions section included in discussion of the quarterly performance and note 2, “Non-IFRS to reported reconciliation”, in the notes to the Financial statement information in this report. Change in net sales at constant currency excludes the effect of changes in exchange rates in comparison to euro, our reporting currency. For more information on currency exposures, please refer to note 1, “Basis of Preparation”, in the “Financial statement information” section in this report. |
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CEO STATEMENT
We see strong momentum building for the full year despite a slow start in Networks. I have considerable confidence that Nokia is well-positioned to out-perform a strengthening Networks market and meet our full-year 2018 guidance.
Our confidence is based on strong order intake and backlog in Q1; our end-to-end strategy is resonating with customers, resulting in strong cross-sell activity and a year-on-year doubling of the multi-business group pipeline; we have clear visibility to 5G deals for large-scale commercial rollouts in United States in the second half of the year; and are successfully executing our diversification strategy, with consistent double-digit profitable growth with enterprise and webscale customers.
On the licensing side, first quarter recurring revenue was up by 65% year-on-year, and we expect continued strong growth in the months ahead. We see further opportunities in smart phone licensing in China, in the automotive sector and in brand licensing.
Our end-to-end portfolio positions us very well for 5G and our efforts to accelerate global 5G adoption are clearly delivering results. We will fuel that adoption in 2018 with investments in trial costs, as needed. These investments will position us to capture opportunities in a 5G market that we believe will substantially accelerate later this year in the United States, followed by other large-scale 5G commercial rollouts starting in 2019 in multiple geographies. Given these developments, we expect to see continued softness in the first half of 2018, followed by a much stronger second half.
We also see a clear path to market share gains this year given our success in 4G expansion, 5G deals, IP routing in both the service provider segment and adjacent markets, and optical, driven by 5G and webscale customers.
While our Networks gross margin in Q1 decreased on a year-on-year basis, the primary underlying reasons for that – regional and product mix – are largely temporary in nature and expected to improve in the second half of 2018. It is also important to understand that we did not see significant degradation of margins at the overall product level. We remain on track to deliver on our EUR 1.2 billion cost savings commitment.
Rajeev Suri
President and CEO
NEW DELHI: Chipset maker MediaTek, which claims to power more than two billion connected devices every year, hosted ‘Catch-up with Tech’ in collaboration with handset brand Infinix on August 28 to share insightful and engaging conversations about the new-age smartphones and innovative technologies powering everyday lives.
The meet-up threw the spotlight on the MediaTek Dimensity Auto, Satellite solutions and Generative AI along with an extensive showcase of newly-launched Infinix Zero 30 5G powered by MediaTek Dimensity 8020, Infinix GT 10 Pro powered by MediaTek Dimensity 8050, and Infinix QLED TV powered by MediaTek.
In terms of specs, the Infinix Zero 30 5G is tailored for young storytellers and creators, featuring the first-ever smartphone to deliver 4K 60fps video recording from its 108 MP OIS rear camera and ultra-high resolution 50MP front camera. The Zero 30 series powered by MediaTek Dimensity 8020 is said to be a game changer for the front camera vlogging experience along with being the slimmest curved AMOLED smartphone in the segment with glass and a vegan leather back panel. It also claims to be one of the most premium-looking devices in the segment.
The event witnessed a panel discussion moderated by Anuj Sidharth, Deputy Director Marketing & Corporate Communications, MediaTek and included expert panelists from Infinix, MediaTek and two renowned professional photographers.
“With the fifth edition of Catch-up with Tech, we aim to bring consumers closer to the technology and enable them to make informed buying decisions based on their diverse needs. In collaboration with Infinix, this meet-up is in-line with MediaTek’s vision of technology democratization and making innovative technology accessible to everyone,” said Anku Jain, Managing Director, MediaTek India. “The MediaTek Dimensity 8020 in Infinix Zero 30 5G brings faster displays, brilliant cameras and ultra-fast performance. Further, MediaTek Imagiq technologies enrich the capture experience by combining dedicated AI, imaging processors and accelerators to provide incredible results,” he added.
Anish Kapoor, CEO, Infinix Mobile India, said, “Featuring India’s first 50MP 4K 60 fps video recording, Infinix Zero 30 5G is primed to redefine smartphone imaging capabilities, setting a new standard for the creators and vlogging enthusiasts. Our collaboration with MediaTek has played a pivotal role in shaping our exceptional smartphone portfolio, and the Zero 30 5G stands as evidence of our unwavering commitment to innovation and delivering unmatched experiences to our users. The display and design of the device represent a leap forward in smartphone technology. As Infinix Zero 30 5G hits the shelves, we are positive that our customers will find this new offering as exhilarating as we do, further empowering creators to capture their story like never before.”
Radhakrishnan Chakyat, a photography evangelist, founder and host of Pixel Viilage, said, “Infinix Zero 30 5G smartphone powered by MediaTek Dimensity 8020 chipset has amazing hardware features, an excellent camera, dual-view video mode and is primed for optimal content creation and saves a tremendous amount of editing time.”
Aarzoo Khurana, a wildlife photographer, said, “Over the last few days, I clicked various pictures and recorded a few videos with the newly-launched Infinix Zero 30 5G powered by MediaTek Dimensity 8020, and the experience has been truly inspiring. Infinix’s smartphone’s OIS feature helps content creators click shake-free pictures and the front camera, which is extremely sharp and detailed, enables content creators to click countless selfies.”
NEW DELHI: Nokia has announced the results of its new research report, the Nokia MEA Mobile Broadband Index, which provides a comprehensive overview of the MEA region’s mobile broadband landscape. The in-depth report highlights the steady growth of 5G in the Middle East and Africa region (MEA) as well as its impact on digital transformation.
It confirms that the Middle East is far ahead of Africa in terms of 5G adoption, while many operators in Africa are still developing their business models around 4G. Voice traffic still relies on 2G and 3G networks in many parts of the region.
5G is forecast to increase steadily and will contribute to the growth of the mobile broadband subscriber base, which is expected to grow with a CAGR of six percent in MEA. According to the report, 4G networks in MEA account for 79 percent of overall data traffic today, and by 2027, 4G and 5G will together account for 90 percent of data traffic. In the same year, 4G subscribers will reach 1,214 million (53 percent of total subscribers) whereas 5G adoption is estimated to reach 380 million subscribers (17 percent of total). Yearly ARPU is estimated to increase at USD$3.4 in 2027, and total data traffic is expected to increase at a CAGR of 32 percent from 2022 to 2027.
The report shows that in the Gulf Cooperation Council (GCC) region, 5G adoption is the fastest, and 5G subscribers are expected to reach 75 percent by 2027, mainly driven by Saudi Arabia. In non-GCC Middle Eastern countries and in Africa, 4G will continue to expand and remain dominant until 2027, while 5G deployment is at nascent stage today and poised to gain more and more momentum over the next years.
As the report confirms, 5G Fixed Wireless Access (FWA) in the GCC countries and 4G FWA in the rest of the MEA region are one of the most attractive use cases, with a significant opportunity for operators to drive incremental revenues. Furthermore, 5G networks are more energy efficient than previous radio network generations, helping operators reach their sustainability targets.
Mikko Lavanti, Head of Mobile Networks at Nokia MEA, said: “MEA is a diverse region with many countries at different stages of development and that is reflected in our report. Data consumption with high-speed networks is increasing exponentially across the MEA market in both urban and rural areas. Reliable 4G and 5G networks are critical for bridging the digital divide in the region, in addition to supporting data-intensive applications for communities and businesses. Nokia is helping both operators and enterprises unlock new opportunities with 5G, building the evolution towards future technologies that will enable enhanced experiences such as the Metaverse.”
NEW DELHI: Bharti Airtel, India’s telecommunications services provider, today announced the launch of its ultra-fast 5G services in 125 cities. Airtel 5G Plus service is now available to customers in over 265 cities in the country.
Airtel 5G Plus has three compelling advantages for customers. First, it runs on a technology that has the widest acceptance in the world with the most developed ecosystem. This ensures that all 5G smartphones in India seamlessly work on the Airtel network. Second, the company promises to deliver the best experience – between 20 to 30 times higher speeds than today coupled with brilliant voice experience and super-fast call connect. Finally, Airtel 5G Plus network will also be kinder to the environment with its special power reduction solution. Powered by the reliable Airtel network infrastructure, Airtel 5G Plus will provide superfast access to High-Definition video streaming, gaming, multiple chatting, instant uploading of photos et all.
Commenting on the launch, Randeep Sekhon, CTO, Bharti Airtel said, “5G has revolutionized the world of internet, ushering new era of connectivity and communications that will prove to be a game-changer for the country. At Airtel, we remain committed to delivering the highest quality of network and service to our customers as we roll-out 125 more cities today. Airtel was the first in the country to offer 5G services in October 2022, and today’s mega launch is our promise to connect every Airtel customer in the country with ultra-fast Airtel 5G Plus. Our 5G rollout is on track to cover all towns and key rural areas by March 2024.”
Airtel 5G Plus service availability will continue to rapidly expand – including service in all towns and villages in the country soon – as the company is working towards offering nationwide coverage. Airtel is now offering its 5G services in every major city from the upper northern city of Jammu to the southern tip of Kanyakumari.
In the last one year, Airtel has demonstrated the power of 5G with a host of powerful use cases that will change the way customers lead their lives and do business. From India’s first live 5G network in Hyderabad to India’s first private 5G network at the BOSCH facility in Bengaluru to partnering with Mahindra & Mahindra to make its Chakan manufacturing facility, India’s first 5G enabled auto manufacturing unit, Airtel has been at the forefront of 5G innovation.
