16 July 2009

Nokia Has Shipped Nearly Ten Million Of
Nseries and Eseries Phones During The Q2

As expected, The Finnish mobile phone giant today reported financial results for the second quarter 2009 with 71 per cent decrease in operating profit, which is mainly related to global economic slowdown and the fading demand for mobile phones.

Nokia's share of the converged device market was an estimated 41% in the second quarter 2009, unchanged from 41% in the second quarter 2008 and up from 39% in the first quarter 2009. We shipped 4.6 million Nokia Nseries and 4.7 million Nokia Eseries devices during the second quarter 2009, up from the combined 8.2 million Nseries and Eseries devices we shipped in the first quarter 2009.

Nokia's second quarter 2009 reported operating profit decreased 71% to EUR 427 million, compared with EUR 1.5 billion in the second quarter 2008. Nokia's second quarter 2009 non-IFRS operating profit decreased 62% to EUR 775 million, compared with EUR 2.1 billion in the second quarter 2008. Nokia's second quarter 2009 reported operating margin was 4.3% (11.2%).

Operating cash flow for the second quarter 2009 was EUR 716 million. Operating cash flow for the second quarter 2008 was EUR 1.5 billion. Total cash and other liquid assets were EUR 7.0 billion at June 30, 2009, compared with EUR 8.0 billion at June 30, 2008. At June 30, 2009, Nokia's net debt-equity ratio (gearing) was -10%, compared with -47% at June 30, 2008.

"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." Said Nokia’s CEO Olli-Pekka Kallasvuo.

"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." Kallasvuo added.

In the second quarter 2009, the total mobile device volumes of our Devices & Services group were 103.2 million units, representing a decline of 15% year on year and an 11% increase sequentially. The overall industry mobile device volumes for the same period were 268 million units based on Nokia's preliminary estimate, representing a 12% year on year decrease and a 5% sequential increase.

The lower device volumes year on year for Nokia and the industry continued to be driven by the negative impact of the deteriorated global economic conditions, including weaker consumer and corporate spending, constrained credit availability and currency market volatility. The sequential industry device volume increase primarily reflected seasonality in the second quarter.

Nokia volumes also benefited sequentially from a more stable inventory situation in the operator and distributor channels. Nokia's mobile device market share was an estimated 38% in the second quarter 2009, down from 40% in the second quarter 2008 and up from 37% in the first quarter 2009.

Of the total industry mobile device volumes, converged mobile device industry volumes in the second quarter 2009 increased to 41.0 million units, based on Nokia's preliminary estimate, compared with an estimated 37.1 million units in the second quarter 2008, and 36.0 million units in the first quarter 2009. Our own converged mobile device volumes were 16.9 million units in the second quarter 2009, compared with 15.3 million units in the second quarter 2008 and 13.7 million units in the first quarter 2009.