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Nokia Corporation Financial Report for Q1 2022


Nokia Corporation 
Interim report
28 April 2022 at 08:00 EEST

Nokia Corporation Financial Report for Q1 2022

Strong profitable start to the year

  • Q1 net sales grew 1% y-o-y in constant currency (+5% reported).
  • Network Infrastructure grew 9% in constant currency, driven by strong demand in both Fixed and Submarine Networks while Cloud and Network Services also performed well growing 5% in constant currency with strength in Core Networks.
  • Mobile Networks declined 4% in constant currency due to supply chain constraints while demand remains strong. Nokia Technologies declined 17% in constant currency as licenses that expired in 2021 have not yet renewed.
  • Both reported and comparable basis gross margin expanded meaningfully y-o-y (+270bps and +250bps respectively) despite component cost inflation as we improved our cost competitiveness.
  • Comparable operating margin was flat y-o-y at 10.9% as improved gross margins were offset by lower other operating income (was notably high in Q1 2021) and higher R&D investments.
  • Reported operating margin fell 190bps y-o-y to 6.6% primarily due to a EUR 104m provision related to Russia.
  • Comparable diluted EPS of EUR 0.07; reported diluted EPS of EUR 0.04.
  • Free cash flow of EUR 0.3bn, net cash balance of EUR 4.9bn.
  • Full year 2022 outlook is unchanged in constant currency. Full year net sales outlook applying 31 March 2022 exchange rates is EUR 22.9bn to EUR 24.1bn.

This is a summary of the Nokia Corporation financial report for Q1 2022 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 A video interview summarizing the key points of our Q1 results will also be published on the website. Investors should not solely rely on summaries of Nokia's financial reports and should also review the complete report with tables.


During the first quarter of the year, we were shocked to see the Russian invasion of Ukraine. Nokia believes in human rights, international co-operation and the rule of law. Throughout the war our priority has been the safety and wellbeing of our people. We support our employees in Ukraine in multiple ways and are proud of their continued efforts to maintain our customers’ networks in the country. It has been clear for us since the early days of the invasion that continuing our presence in Russia would not be possible. We announced in early April that we will exit the Russian market in a responsible way and aim to provide the necessary support to maintain our customers’ networks, as we exit.

On a more positive note, I am pleased with our start to 2022. Demand in our end markets remains high, and although supply chain constraints continue to impact our growth, we delivered 1% constant currency net sales growth in Q1. Our comparable operating margin was stable year-on-year at 10.9% as strong underlying improvements in profitability were offset by rising R&D investment, lower other operating income compared to the year before and some timing effects in Nokia Technologies.

Network Infrastructure delivered again strong growth with continued robust momentum in both Fixed and Submarine Networks. In Mobile Networks supply constraints hindered our revenue growth, nevertheless we expect to return to growth this year due to our improved competitiveness. Our 5G Core business continued to drive good growth in Cloud and Network Services.

In Nokia Technologies we are in the process of renewing licenses which has led to some timing effects in net sales in the quarter. We are confident in the quality of our patent portfolio and expect to return to previously communicated €1.4-1.5bn annualized net sales run rate.

Overall, Q1 was a strong start for the year both in terms of net sales and profitability. The demand environment remains strong and while supply chain and inflation challenges remain, we are confident we can deliver our 2022 outlook and continue to make good progress towards our long-term targets.


EUR million (except for EPS in EUR) Q1'22 Q1'21 YoY change ConstantcurrencyYoYchange
Net sales 5 348 5 076 5% 1%
Gross margin % 40.6% 37.9% 270bps
Research and development expenses (1 072) (996) 8%
Selling, general and administrative expenses (675) (649) 4%
Operating profit 354 431 (18)%
Operating margin % 6.6% 8.5% (190)bps
Profit for the period 219 263 (17)%
EPS, diluted 0.04 0.05 (20)%
Net cash and interest-bearing financial investments 4 904 3 689 33%
Net sales 5 348 5 076 5% 1%
Gross margin % 40.7% 38.2% 250bps
Research and development expenses (1 052) (973) 8%
Selling, general and administrative expenses (581) (552) 5%
Operating profit 583 551 6%
Operating margin % 10.9% 10.9% 0bps
Profit for the period 416 375 11%
EPS, diluted 0.07 0.07 0%
ROIC119.5% 15.3% 420bps
1 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 Q1 2022 for details.

Business groupresults Mobile
Cloud and
Network Services
Group common
and other
EUR million Q1'22Q1'21Q1'22Q1'21Q1'22Q1'21Q1'22Q1'21Q1'22Q1'21
Net Sales 2 268 2 262 1 974 1 727 736 674 306 365 76 57
YoY change 0%14%9%(16)%33%
Constant currency YoY change (4)%9%5%(17)%26%
Gross margin % 39.8% 33.2% 34.7% 34.9% 38.6% 33.4% 99.7% 99.7% 2.6% (3.5)%
Operating profit/(loss) 171 76 195 187 20 (20) 220 286 (23) 22
Operating margin % 7.5% 3.4% 9.9% 10.8% 2.7% (3.0)% 71.9% 78.4% (30.3)% 38.6%


Full year 2022
Net sales1 EUR 22.9 billion to EUR 24.1 billion (constant currency unchanged, adjusted for currency)1
Comparable operating margin2 11 to 13.5%
Free cash flow2 25-55% conversion from comparable operating profit

1 Assuming the rate 1 EUR = 1.11 USD as of 31 Mar 2022 continues for the remainder of 2022 along with actual Q1 foreign exchange (adjusted from prior EUR 1.13 rate as of 31 Dec 2021). Assuming the year-end 2021 exchange rate, the net sales outlook would continue to be EUR €22.6bn to EUR 23.8bn.
2 Please refer to Note 10, Performance measures, in the Financial statement information section included in Nokia Corporation Financial Report for Q1 2022 for a full explanation of how these terms are defined.

The outlook, the long-term targets (3-5 years) and all of the underlying outlook assumptions described below are subject to risk factors as described in the Risk Factors section later in this report.

  • Nokia’s outlook assumptions expect the following size and growth in our total addressable markets (Mobile Networks excluding China and Network Infrastructure excluding Submarine Networks) and assuming Q1 actual EUR/USD rate and 1.11 for the remainder of the year (updated):
2022 TAM (€bn)Constant currency growth
Mobile Networks 50 +4%
Network Infrastructure 45 +3%
Cloud and Network Services 27 +4%
Nokia TAM 122 +4%
  • Nokia’s outlook assumptions for the operating margin of each business group in 2022 are provided below:        
Full year 2022
Mobile Networks 6.5 to 9.5%
Network Infrastructure 9.5 to 12.5%
Cloud and Network Services 4.0 to 7.0%
Nokia Technologies >75%
  • We expect Nokia Technologies to deliver a largely stable operating profit performance in 2022 and over the longer-term;
  • We expect the net negative impact of Group Common and Other to be EUR 250 million in 2022 and over the longer-term;
  • In full year 2022, Nokia expects the free cash flow performance of Nokia Technologies to be approximately EUR 450 million lower than its operating profit, primarily due to prepayments we received from certain licensees in previous years;
  • Comparable financial income and expenses are expected to be an expense of approximately EUR 150-200 million in full year 2022 and over the longer-term;
  • Comparable income tax expenses are expected to be approximately EUR 450 million in full year 2022 and over the longer-term;
  • Cash outflows related to income taxes are expected to be approximately EUR 400 million in full year 2022 and over the longer-term;
  • Capital expenditures are expected to be approximately EUR 650 million in full year 2022 and around EUR 600 million over the longer-term; 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 Q1 2022 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’s long-term targets as published with our fourth quarter 2021 results remain unchanged.


Dividend policy and 2021 proposal

Under the authorization by the Annual General Meeting held on 5 April 2022, the Board of Directors may resolve an aggregate maximum distribution of EUR 0.08 per share. The authorization will be used to distribute dividend and/or assets from the reserve for invested unrestricted equity in four instalments during the authorization period, in connection with the quarterly results, unless the Board decides otherwise for a justified reason.

On 28 April 2022, the Board resolved to distribute a dividend of EUR 0.02 per share. The dividend record date is on 3 May 2022 and the dividend will be paid on 12 May 2022. The actual dividend payment date outside Finland will be determined by the practices of the intermediary banks transferring the dividend payments.

Following this announced distribution, the Board’s remaining distribution authorization is a maximum of EUR 0.06 per share.

The payment of the first instalment of the distribution is expected to total approximately EUR 113 million in Q2 2022.

Share buyback program

In 2020 and 2021, Nokia generated strong cash flow which significantly improved the cash position of the company. To manage the company’s capital structure, Nokia’s Board of Directors initiated a share buyback program under the authorization from the AGM to repurchase shares. Purchases began in February 2022. By the end of March 2022, Nokia has repurchased 10 462 808 shares for a total value of EUR 49 901 475, with weighted average purchase price of EUR 4.77 per share. The program targets to return up to EUR 600 million of cash to shareholders in tranches over a period of two years.


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

  • Competitive intensity, which is expected to continue at a high level;
  • Our ability to ensure competitiveness of our product roadmaps and costs through additional R&D investments;
  • Our ability to procure certain standard components and the costs thereof, such as semiconductors;
  • Disturbance in the global supply chain;
  • Accelerating inflation;
  • Scope and duration of the COVID-19 pandemic, and its economic impact;
  • War or other geopolitical conflicts, disruptions and potential costs thereof;
  • Other macroeconomic, industry and competitive developments;
  • Timing and value of new and existing patent licensing agreements with smartphone vendors, automotive companies, consumer electronics companies and other licensees;
  • Results in brand and technology licensing; costs to protect and enforce our intellectual property rights; and the regulatory landscape for patent licensing;
  • Timing of completions and acceptances of certain projects;
  • Our product and regional mix;
  • Uncertainty in forecasting income tax expenses and cash outflows, over the long-term, as they are also subject to possible changes due to regional profit mix, net sales subject to withholding taxes, the timing of patent licensing cash flow and changes in tax legislation, including potential tax reform in the U.S. and OECD initiatives;
  • Our ability to utilize our US and Finnish deferred tax assets and their recognition on our balance sheet;
  • Our ability to meet our sustainability and other ESG targets, including our targets relating to greenhouse gas emissions; as well the risk factors specified under Forward-looking Statements of this release, and our 2021 annual report on Form 20-F published on 3 March 2022 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, sustainability and other ESG targets, operational key performance indicators and decisions on market exits; B) expectations, plans or benefits related to future performance of our businesses (including the expected impact, timing and duration of COVID-19 on our businesses, our supply chain and our customers’ businesses) and any future dividends and other distributions of profit; C) expectations and targets regarding financial performance and results of operations, including market share, prices, net sales, income, margins, cash generation, the timing of receivables, operating expenses, provisions, impairments, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions and competitiveness; D) ability to execute, expectations, plans or benefits related to changes in organizational structure and operating model; 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 28 April 2022 at 11.30 a.m. Finnish time (EEST). 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.


  • Nokia plans to publish its second quarter and half year 2022 results on 21 July 2022.
  • Nokia plans to publish its third quarter and January-September 2022 results on 20 October 2022.

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

Maria Vaismaa, Global Head of Public Relations

Investor Relations
Phone: +358 40 803 4080


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