NOKIA.HE - Earnings call transcript Q3 2022

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David Mulholland

Good morning, ladies and gentlemen. Welcome to Nokia's Third Quarter 2022 Results Call. I'm David Mulholland, Head of Nokia Investor Relations. And today with me is Pekka Lundmark, our President and CEO; along with Marco Wiren, our CFO.

Before we get started, a quick disclaimer.

will financial forward-looking are performance, involve and we future regarding predictions call, risks and business and uncertainties. this be statements making our that During these statements currently materially the differ therefore, may, results results Actual we expect. from Factors that be as as well differences operating both factors. external internal cause could such can

mostly between our comparable our section and accompanies a growth report Within which on be have on is be results includes this We Factors the our on margins such and reconciliation rates that today's The website. report growth annual will reporting. two. Investor our Please presentation in risks reported our on identified note website. that presentation, available to references financial both on QX call will Risk Relations report published currency constant the are of Form comparable and a XX-F, rate, and

quarter. our performance into some that, overview key over of our strategic progress terms a give impacting of In quick the will XXXX. for me agenda outlook to will with let the financial financial hand detail our of and Pekka factors bit more today, Marco then of following the for With in Pekka. a go

Pekka Lundmark

you, David, and good morning, Thank everybody.

important very the a marked for our quarter X-phase third our company in step of The execution strategy.

in on focus expanding we moving would it were sales year, recall, we in reset that and where margins. said our the we our this you beginning of growth our to If XXXX we had in completed accelerating XXXX, and accelerate

see quarter, supply growth. good are But as accelerated we on us X% up In seeing year, some For QX. from X% to year-on-year, the growth. growth delivering chain the from progress that the half on the has supply start the also that third to chain, in in delivered improvements constrained our this of we first we really

illustrate more up year-over-year gross operating our margin both product the focused points Technologies, margins strong we see in competitiveness. Technologies. continue points including benefits a and making of Mobile we profitability Mobile our we of the in business achieving improvement margin are our outstanding Importantly, timing by Networks our of our slide perspective, From you the operating gross I by timing declined will starting deals performances outstanding meant XX impacted focused this Nokia Clearly, in patent excluding clearly the the XXX as of on basis The renewed the protecting any QX. can of in Technologies we that in margin basis points. XX resolving our margin the and operating our was now Nokia our see better margin deals, effects margin, Nokia a each which the Networks. over progress basis business Technologies, the Nokia to on group's year-on-year specific understand underlying value remain volatility time progress of in driven our business also be in To to but and frame. charts without progress are start turn to with on deals declined with portfolio detail, of the

representing net that new really now of a You and starting benefits line competitiveness. performance XX% to but the impacted will acceleration. growth know challenges performance sales we and in in the strong our our our XXXX, are particularly delivered We renewed see top financial products QX,

clearly full to the could we top in here in of their catch-up with some have on supply we we with have Bharti sales grow of in improvements becoming on -- a path significant network the early starting Airtel that already share shipped growth a point we've been contracts on On Mobile now constraint long-standing QX of we in chain did which benefit of from quarter be we our supplier it deal year, an awarded their the the XG are a but is are already basis in Jio, to XX% a where the element with business. signed Reliance year good that, see also the just overriding deployments. in week, seeing, We planned We planned major the will less Networks. are we we India partnership. some On of this a for announced continuing XG sales top network a

supplier so we us very previously, for As this been a market you share to an Reliance know, gain. customer engagement is access a not have meaningful and radio new Jio important

grow is than a deals firmly on Networks path in that share, that. is this like to our deliver previously ambition faster stated Mobile which gain the put us and to market have we will to it We and believe

also QX up improve continued from margin quarter, mix basis year-over-year, we in XXX to although in in points did margins with Our we a regional reverse the expect will to operating somewhat QX. benefit favorable continue which

continue This where Infrastructure, growth comparisons. delivered in we despite still particularly case Network which challenging increasingly was business, the Fixed growth. Networks our see robust to to X% Turning

announcement but to leadership XXXG It road confidence in today. map obviously road invest MF-XX future We the way many these all them our a are and in it with for years also map in gives extend be customers solutions. wider before to platform our use, of will gives earlier clear commercial Lightspan continue the us this our the technology week, towards which XXG

some execute supply supply strong. managing a Our and improve job Optical subsea in remains first progress through situation, to chain but QX demand doing we Networks, should encouraging good FPX to continue continue fiber substantial its the into are specific Networks believe the business to it's and We in backlog making finally, IP In ramp-up situation half constraints, still against faces Submarine XXXX. the our of of webscale. progress continue Networks, and also And well deployments. on we

to slight we last a basis rebalancing. XXX make there basis continued for our with by in was up which margin expanding operating to Network gross XXX decline a points, wireless costs. saw our was Solutions operating in increased basis sales, double-digit in and remain to ongoing of yet the our being at a and million continued new In achieved was ability Network our show due these continue we discussions renewal to investments €X.X months of portfolio in good progress in XX €X.X was return to margin run negligible renewals quarter. sales private more improvements, contract consumer areas in but rate fixed While which leverage the decline margin in Enterprise Cloud billion points, than to progress Infrastructure have while points continued stable, in impact operating over quarter. net on renewals In to Services, margin grew business, growth momentum meant Nokia XXXX. that Gross a to showed billion electronics continue to have Technologies, have rate timing from we in These there including €XXX adversely their of the previously The XX net and referred we progress, once closed. automotive, confident

delivering we I strong compelling. the In market growth constant In increasingly was the chain of the grow situation. strongly, believe currency XX% how to been. supported CSPs order biggest addressable Enterprise growth recent highlighted accelerate the our One we pleased in improving is fastest-growing are year-over-year beyond be of QX, our into by quarters, to our in midterm see have supply has our Enterprise opportunities portion the and business have products We this will segment.

great the where have wireless another continue space, We in customers XX to momentum in added private we QX.

webscale a the need mention new should I building that our are IP this products network signed also scale partner engagements We for we really our in routing business customer quarter. we with to the the future. for

chain plan of able macro some less on and navigate for very to constraint. On far, backlog business, build our many I'm seen now strategy but customer it's we on want fastest-growing what from over it's our confident are areas, the momentum areas handing a to before catch improving we Enterprise over to points to that critical All is Marco, I some supply tight. of Two longer-term as the our this on the to will so these In supply I our topics time. segment how even of were chain, In important From longer-term situation up quarters. other remains ambitions. in deliver have growth becoming remain prior of we ongoing touch uncertainty.

issue. areas, Optical in it other as in Networks, an such remains However,

So of XXXX but half the picture we the there improving, before business. is be not overall, still no material first the before believe constraints longer it part are will of any on

If There is Finally, we spending those customers. of the risk of fully have that start in to clearly recognize and ongoing months. impact uncertainties recent a this geopolitical macro increased could CapEx our the uncertainty. some anything,

which constant in are XG is see basis. regions Against our just outperform significant Enterprise, number market ourselves we addressable XXXX, market firmly currently on However, market opportunities look that to of putting gain journeys, backdrop, we will the ongoing fiber now the the funding a as path expect rollout, India, ahead programs, ramp-ups currency the are we we by to a and share. like and believe supported on this we their government beginning which a grow are also expected in considering

I'm your end and plans become become but our I'll not talking we from to will to today what We a outlook currently perspective. look seeing over will Marco for clearer, bottom-up the about that, are complacent markets forward we and hand as our With evolve continue to questions.

Marco Wiren

our well. from results, we If basis look hello X% net financial accelerated bit QX sales as Thanks, into group and in on currency. Pekka, to and now my constant growth deeper at side reported a XX% a

again, Network of to while positive declines which a enough access in North is the strength constant XG wireless the to margin you year-over-year Elsewhere, Africa, in ramp with declined. slide small Networks, Pacific Networks. the reported net Europe, points across While strong somewhat growth our Networks can Latin and XX% on In year-over-year sales, see was in ongoing rate. FX both as in the the in continued a XG sales And as Once increasing strong have expanded we America, deployments largely also changes Infrastructure, Nokia quarter. If as was reflected to Technologies, had drove growth the In Mobile by slightly fiber due regions. to excluding group. a in business Fixed Greater growth in This growth and India translated customers. impact then on which muted Network currency This had mostly double-digit to from into region Europe good a quite clear quarters. not growth China Infrastructure. by our India we in net in entirely saw at many this also by impacted grew -- is which the Mobile coming and number in America, our saw of by sensitive impact license fixed declined expected we expansion. timing East double-digit region, we margin sales would deployments basis the net up XXX Asia while turn profitability, was Networks Middle operating Mobile and grown strength offset

we see execution shift operating strong and and will assume years margin the to also this had market are to profitability some towards the strong had net basis sales up past growth XX early And market capitalize investments ensure continue investments fourth slight on we And seen to Nokia the growth become which quarter, And to both in We is with pay due product we of wireless but Infrastructure we've favorable into area. continued quarter. decline to Services year-over-year, impact channels this the to over will in Cloud in continued effects our on And mix deals making our and Technologies, the the we the was couple in a continue do growing services away closing and business. see sales outstanding quarter. double-digit Network the in largely year-over-year. saw less confident the thanks in leadership. into the private of off. a points Network business a we these strong we regional this are us from competitiveness in

of end Group achieve from prioritize by deal continued the we we were as dollar. funds net such impact instead year. by Common, of of some timing before, will offset right achieving stated the have sure million positive making strengthening that of the the we as a specific we U.S. about underlying downward saw €XX venture In the As revaluations

generated increased the outflows around payment of the quarter. anticipate looking margins at in related and we addressable large also a our deployments. €X.X flow taxes In movements of operating three. and to we total given higher more increased, a both led cash the the overall, to quarter, of performance €XXX we Receivables net Mobile working saw than of receivables. supply components. terms now Liabilities accounts of as million good by decrease XG as which to the quarter share billion So as ramp-up profits. was Infrastructure, of our restructurings position part environment progress working we And continuation €XXX chain capital, continue and dividend across a net Networks And cash pay. saw challenging of quarter, Network individual driven million turning program. of million and and Within in capital, to in three, We delivered repurchase the performance. in which we employee payable Inventories of free build our at of of now the in net quarter turn, again, outflows related adjusted considering offset €XXX cash were inventory to the our the accruals the for reflect end Once increased of this by India variable market. sale

our business updated this view have We to latest show across groups.

market not major now business have to previous overall higher of led Pleasingly, any is we see which they a to been specific addressable markets. across X%, the be to robust rounding group, X%. any changes which have from up across some uplift While slight demand each, seen we

Before turning outlook on XXXX. for want to touch to I briefly Q&A, our

currency, full September. of year X.XX, euro-USD guidance in end sales rate unchanged as reflecting remains Our constant net of of the

now sales to net billion. €XX.X Our is outlook billion €XX.X

to be margin also is operating reiterated which between comparable have XX% expected We our guidance to XX.X%.

close, outstanding operating we towards remain and comparable net of to track around the these licensing assuming range of the timing risks range. of the the our towards continue deals, end higher sales While midpoint margin

outlook updated today. two also We of assumptions our

million volatility to now €XX €XXX The million first have between assumptions, term, the one exchange given our this longer year with around second term, some And to course, of we and this we expect which for our over year foreign continue impact. related the CapEx and is financial its income expect recent the lowered longer €XXX and €XXX and is to around expectation expenses, over be million and variation. million year-to-year the

that, with to back it David I So will Q&A. for hand

David Mulholland

you, remarks. Marco Pekka and your Thank for

Before next to our Mobile that with Q&A. the London. Uitto, our of Q&A let's with our The wanted we President be session, the highlight With to presentation be a Tommi just in-person focused update move Mobile on in Xst element December start of event Networks. I will the business progress we event on hosting hosted that, Networks will hybrid the

you courtesy could brief yourself As question a a to others in the limit could the please up? Rachel, you give queue to follow and please one instructions?

Operator

[Operator back David. now hand the Instructions] to I'll call

David Mulholland

Rachel. Thanks,

comes Our please Andrew Andrew, question Gardiner ahead. from go from first Citi.

Andrew Gardiner

Marco Good you for on morning, well. Networks. David. I Mobile a as Good you. question Pekka, morning, Thank had

on even normally X.X% top of as So you which Networks year-to-date end that get a mean and takes you've I the job the something assumption full seasonally. XQ, Mobile done Yet don't X.X%. good quarter, to terms that another in to to basis. is deterioration would is highlighted the require you of a range about in margins margins, X.X% in we between for year, for your see still the operating

we're You missing have done XQ? to margin tell so that year-to-date mean perhaps basis. for there? us can there Thank mix you particularly just already told looks some that guidance you've I what with that. range what and is Is range that But on conservative are what's changing, it anything your given you. feels trying of implied a like I us anticipate

Marco Wiren

Thank Yes. you, Andrew.

that And within North also regional as stated far been been you margins is our where so clear out that compared the actually has to in want I all, just midpoint American year. group in so well not the will clearly quite now, rightly just less and we But that Networks believe individual guidance mix pointed we've quarter, in good we seen this the on Networks. that And like Mobile as region to have on on had mix as we've fourth performing the so very very far. strong be BGs. Mobile our be favorable level far of well First we the very

So this on not and or we reason main is Networks our are keeping the the Mobile assumption that that. guidance changing

David Mulholland

Andy. you have Do follow-up? a Thank you,

Andrew Gardiner

mean in as it is for the the range I there but the group high suppose clearly your is terms saying, I pointing range? of Yes. of you're level, to the feels midpoint answer the of end just like mobile mobile is

Marco Wiren

Yes.

and some BG. As give we guide see, level group at per we the only assumptions

you is as detailed, X.X%. you regional we we why impact And given quarter will favorable less haven't guide any that that's Networks as of the do. pointed Mobile we out So -- mix on that year-to-date, course, as margin And in X.X but see, the four. well,

David Mulholland

question you, from We'll Andrew. Thank from Societe Aleksander take Generale. our Peterc next

Aleksander Peterc

Yes, a and then Thank good just morning. for I question. the quick have follow-up. one you

would look like So a in in know will out margin So ongoing broad Network which fairly so range myself, as current could be 'XX, quick this EBIT which an licensing give just there there case? margin any you be on would margin on very a you that's they obviously, currently safe the negotiations going Technologies, I margin expect really you What not gains and be follow-up also of to is timely just and the 'XX? also improvement this end would growth contingent first to Can work be, And Thank and settle if fall and you. be be clearly that that licensing your for outlook into’XX? but markets resolution on your then it positive. these one mind continuing and 'XX clear, Technologies, in growth and us the excluding headwinds a do and into excluding to litigations. a is guidance in QX your I Are does as just be tell and can Networks, us bear warrant resolve CNS there, Mobile assume think further what on? to Infrastructures But will share you be confident you whole? seem if erratic, could negotiations market

Marco Wiren

different margin on side. by different that improve our could step that performance as Yes, mix that and could be always in we year-by-year, litigations case, believe have thank guidance. give you. effect our quarter step of and changed license XXXX said plans and now regions that deliver four when to continuously to that these second say question, and to If you understanding range how visibility of performance and our then your be outstanding will be I our earlier, Starting too would for results impact towards when with comes comes scale first as any our still CNS will mention the report just it guidance, side. we've the of that, least And what resolution What and outlook, is solved to assumed MN XXXX, comes the our also have will NI your early regional and and guidance we their gross goal we it the and and to could improvement in what at give the part better renewals the get as back this question, be longer-term not to XX%, aim in operational we offset the little would we margin this well. we is will to guidance well. But And -- on to and that customers' we XX.X%. just and a us comes evolving well bit of but XX% to XXXX regions I like revisit some be CapEx a that specific can

David Mulholland

please from Sztabowicz Alex. We'll question next Thank Sebastien, Cheuvreux. take Sebastien from you, go Kepler ahead. our

Sebastien Sztabowicz

thanks and the hello Yes, taking questions. everyone, for

more that specific renewal, Mobile, you it contracts addressable Network see Thank You for on expect have XXXX. and some into renewal do is in Cloud XXXX follow-up, IPR substantial your IPR any are including market on Where a Services? upside downward in or onward? growth or in pressure moving coming do main you you. XXXX? And Or to markets, your NI

Marco Wiren

take IPR have the And renewals. would I that have say we can we Yes, every question. year, I some --

And sometimes we ones. bigger have

have X XX we varies it contract Sometimes lot smaller years. X, between Usually, to to ones. a period, up the average

us So quite business renewals. we have that this is normal for

the into on go of have So those deals unfortunately, we in because agreements. we and terms that cannot restrictions written different and the details those of conditions

Pekka Lundmark

likely it Then same mix ramping on not Networks, strong Mobile mix year. will at of the especially in up meaningful. that to in Networks, likely it quite least CapEx normalize a we Mobile expected changes the strongly the the the comes after the India. because North XXXX, is most at are time, businesses, that American when very other in in But be will And customers somewhat

should a So already markets, same the that mix meaningful, which time, there operating gross in will get through some margin. Networks does our But change cost, meaning support we Mobile mean which, will Marco pressure the put towards that be emerging scale the said, margin. be fixed as on the will on that scale will better then leverage at effects

David Mulholland

Sebastien. Thank you,

We will ahead. from Maao take question go next Frank please Frank, from DNB. our

Frank Maao

questions Yes, I'll most so been the gross pass of margin have Thank IPR answered side, you. on. and on that actually my

David Mulholland

UBS. take ahead. Frank. Francois please our We'll from Bouvignies question Thanks, Francois, from go next

Francois Bouvignies

indication at into constant the year, is My very seems level market QX slightly this Would U.S. more it's of I XXXX? down be significantly? just if does much. and year. this margin versus for like to should question it margin be I to the mix was your of to on lower revenue as your into the just question you that And like dramatically And increased see of you just helpful is QX that the the seen group. mean know change how because addressable the impact next you wondering, currency. described. Hi, the will about going maybe mix kind emerging, but good you the U.S. thank as with it you XXXX know, Should compare performance maybe a region second the first into impact India, it we increase talked but mix didn't looks come the

you So small any you. I be would didn't a it's you track could well? your as why mean, Thank increase forecast understand I helpful? reason Or increase, anything nevertheless, but there

Pekka Lundmark

we And two, year year, number guidance too next would for next we number is to think one. it market market said, whether early said that or then share. I as about comes But what general, we margins, our to grow give expect today expect top is addressable take to line Marco it to in next year.

We same results. will when publish of on whether premature say speculate next not come back be the question indicative to I would way, that it we today margin. QX QX year's that be And would in or would to

You mix quarterly It the remember it's then talking It is And also are seasonality that we have is only competitiveness. not have. is it volumes. to improving about. we product the that also that regional

why that an that's be it indication So is next not this of that QX straightforward year. would year's

David Mulholland

next our question Bank. Sami Sarkamies And please go take Danske from Sami, Francois. we'll from ahead. you, Thank

Sami Sarkamies

your question expenses revenues. were a in hi. bit actually expectations quite the above than faster have Okay, grew Thanks. I which and regarding operating a quarter, third

up other but explains sort maybe that hedging this, still on about come comment factors sort just it going an third think that underlying is part of I into basis? will a quarter Or on QX, of then sort impacted negatively? there of base cost of were And any seasonality? the temporary

Marco Wiren

our comparison. negatively as FX of year-on-year quite a out well, Yes. course, Thank on rightly impacting you had impact And you, Sami. OpEx like pointed big just

as have this was -- also big of continuation compare rounds year, OpEx as R&D our started as that in you -- that in fact year to there we Xst affected of have so in leadership year, technology that the And Another forward actually, three that's July, you investments Otherwise, salary the that is our part have started of increase if a well. we difference going as where quarter three well. quarter Xst and that well last investments October, you well. in secure impacting so item annual last

Pekka Lundmark

we you on understandably was to what top compared year Sami, the reviews very is Marco double different were the that saying, previous that clear OpEx you Marco Just the this way, of the higher salary so since as said, compared comparing was to is, to increases and to growth year to be last line, why reason last referring have year. in timing a percentage it because salary -- we were now

item in the QX in average. year-over-year So in comparison that exceptional is, an a way,

David Mulholland

follow-up, have you a Sami? Did

Sami Sarkamies

Down QX? in

David Mulholland

didn't catch that, I Sami.

Sami Sarkamies

was of stating the should QX. Yes, then down that growth I just sort come rate in

Pekka Lundmark

For there only inflation. yes, not effect this last year. more salary part, double is any QX, annual in compared normal It's to

Sami Sarkamies

Okay, thank you.

David Mulholland

Sami. ahead. Thanks, Simon, James. from Raymond next take Leopold question from Simon our We'll go please

Simon Leopold

question. Thanks for taking the

to then I've First, I just if a for pull-through to business as Infrastructure want and you And from you could to got see would the wins your beyond which see expect follow-up, quick the any extent mobility a about contributions us how or in win if quantification XG I well. think portion, that be India might. of could obvious Network around give some your sense you

Pekka Lundmark

how Yes, more guidance volumes will be. the not detailed giving this at time -- mean, I big we to are the as India on

be they course, will Of meaningful.

for Airtel fact of there we was market that our as network at Jio and the Bharti a We X%. radio a significant share have is well network XG really now in course, XG business then, because that we deal is of all, in radio have XX% Reliance were won the not customer with where

in market have Now not we be their published share will network. what XG our

a market It's share. a that is is meaningful We It piece. it meaningful be will but not see share. a when small disclosed, market could

them, has volume Optical radio There then represents to want is networks India. a to this Infrastructure right potential significant a for as pull-through, general in that big are into And for applies Network into so Network deals. call these So two absolutely us. you potential significant getting consequence example, This in way of Network interesting you Infrastructure. whatever in opportunities, very this

David Mulholland

have follow-up? you a Did Simon. Thanks,

Simon Leopold

Yes, please.

things have you been you've rate foreign constant Could exchange changes gross how could clear So or margin us revenue. quantify? exchange quantifying and currency the help year-to-date on you OpEx? those affected the understand changes foreign in Are impact of rate

Marco Wiren

at report Thank we methodology, Yes. a question. currencies extra report we only with one and we inflow show that is expenses. why which our and that the do look with outflow hedging the income we for not the net the means basically we constant And inflow. net in row the in in What other the impact net operating currencies. and have we What you only this comparison hedge currency, also and is is reason hedging that

David Mulholland

from ahead. question We'll take Simon. Bank. please Sanders go Deutsche our Thanks, Rob, next Rob from

Rob Sanders

trend. Thanks. this is I a to momentum Hi. of degree seem behind And Ericsson the just XG just to a of I any that the networks lot these how just do value there's on the XG be was at you you've seem lot lot core wondering be signed as sticking West a stand-alone to not live given the of which contracts deployment. so doesn't had sign flagged a that but exposed deploy? momentum value Most many question NSA. all about slow. then And headwind, Or upfront networks, a the to on There contingent in are in you to a stand-alone. XG contract? being to operators tend kind of

Pekka Lundmark

-- we the faster will are reasons and have to but different parts market are what but that Thank come Actually, there's on I is one the good you. top you Services, This now we Networks Network, position right strong compared way, Cloud about that, because and Network this is have Core down of I in we networks, in in because, which, question, that XG on this load of there that had growing. includes traffic, will is cyclical is there than bit track the very mean, stand-alone market the of development doubt the a development of core Core And the terms is on happening one is that, world. is clearly, mean, market the course, a is I a That and that making mean, right a why the bit the that no a is, line weak. is and requires coming radio in good actually later. deals, late going through revenue come, XG

in and at which monetization who we out it And speed as But speed of I do XG, spreading, in it so including quite they have cases to amount it customers an the XG many enterprise on, stand-alone. XG stand-alone get I in stand-alone So through XG. their to you that the course, be will operators so understand thing enormous is to them, the order slicing mean with is of need to they your But will in operators moment. and on general, benefits up. new is the a this. mean, realize slow not on then with order It's discussions and all I'm to confident compelling cases for that just complexity of rely plan. there, truly simple so for and that go but will able really to full many that's need observation definitely get

David Mulholland

our from SEB. Rob. Beletski go next Artem, Artem take We'll from Thanks, question please ahead.

Artem Beletski

that to chain relating supply one situation I the have to catch-up for hi. situation business be has Networks area? my Or comes particular supply to thank we is chain some that Do taking in this And delivered there related question. healthy done Yes, quite to growth basically what quarter. see Actually, especially still and normalized Mobile you situation?

Pekka Lundmark

situation. is are more to it And there of not be before assume is it to yet Artem, or Yes, should before that more that fully the less normal assume It should back normalizing, be still but will first not to is done. normal. XXXX we half back catch-up we a we

David Mulholland

you follow-up? Did Artem. a Thanks, have

Artem Beletski

quick one relating to Yes, a indeed, IPR.

of basically, Or require does will resolved, billion? some dispute you €X.X basically run So range well? to €X.X agreement as so it billion rate target ongoing reach

Marco Wiren

line these Yes, to open will signed up, to we billion We that that we are billion €X.X have return when that €X.X deals thank you. top levels. assume

David Mulholland

Artem. question Thanks, We'll from from go take our next Jefferies. ahead. Janardan Menon Please

Janardan Menon

will on overall of positive Mobile Networks the to Network kind regional on Hi, Infrastructure. My goes good to presumably, also just especially et question. business I on that things, uncertainty the particularly given Thanks momentum go as it is, XXXX. require in side focus Network other morning. some little cetera, on some bit the the up, of has Infrastructure taking if then point for a mean, there margin want divisions, I your it is into mix,

Fixed margin that you further there access and of significant that give that driver just win in do progressing is there previously. growth base the the on you the into could that a from slowing-down release? see continuing? into your IP positive you a various because new the that there look that give fixed Is you a would high And us which flavor be How highest-margin be could reduction overall coming year, is does Network side, next at And when in on So XXXX? new that which through at webscale we of your parts assume bit decelerate something wireless division, of the higher there? business a would to upside pulled out great. you -- when seems effect levels be of X% how I that slowed see part is the you Networks, where it, If will to has look

Pekka Lundmark

detailed will question giving because, next one publish answer that we Thanks. to QX. again, for come year -- we try Okay. your back guidance to when I will without

that right are some growth there still some the obviously of we we limit of that do absolutely will all especially in believe businesses comparisons Infrastructure. in that getting growth Network the opportunities. Networks, Fixed opportunities in will But the are which have You be actually of tougher

well. further of the half FPX are Networks, in actually that the ramping FPX our Fixed, IP We they provide FPX we Networks, very still compelling have to position. remember solutions are now terms, we and of in And increases In that competitiveness this, in improving Networks, second are we technology in the relative adding year solution, IP in and platform. our up all in relative competitiveness. a already now Optical

So our which market to the have Optical sorted also of I believe target supply market share component business is take we our forward. be In earlier, develops, some had chain mentioned target will going regardless -- out. that challenges that we Networks, as how in

customers feedback the more generation the PSCX to component-based excellence on diversified from new have in We of is the products. pipeline. come there And

that share are a seen platform business, good in this launched And year. new next just also we that take So may you now broadband gigabit the investments, making start be upgradable actually in customers or the even future-proof. passive on XX gigabits in Fixed, If networks on fixed is for that to then platform to there possibilities access optical future have XXX future. will market even

future-proof aspects increasingly that highly supplier of trustworthiness Fixed in criteria. higher at to also and is So but we are Networks -- decision-making proof customer time, the same future is and waving platform. Mobile that it not the a seeing related all in only in And the higher

So overall, I'm in market segments. Infrastructure all optimistic and both competitiveness to relative when our Network it actually development comes in

will last have have actually, seen and have we progress -- you this the already it You made year. year, started seen

relative you year. position slow asked X are These earlier switching next Tier for to in webscalers. We with in be, deal not And that like But be are that. to market or we believe year. Microsoft then going the our improve whatever to we signed cycles finally, the We anything market about macroeconomic to processes. the continue will be immune the will able a

you here. in, revenue it nature a is The Now disclosed of there long But one customers not this is of deal this stage. to and these in, realistic a upside. get you takes lot question this we, or we with in. potential. of signed are be name two in to is a webscaler, quarter, are time that then There cannot is But that actually be once quarters at have is that a more another something

need be little bit you need -- a You patience. to

David Mulholland

take question go from We'll from ahead. Deshpande Sandeep, our Janardan. next JP Sandeep Thanks, Morgan. please

Sandeep Deshpande

looked a in you at My Networks, quarters more the see X.X%, is Mobile in Hi. of first three today question. X.X% question margin When Nokia's longer-term we margin the year.

there some quarter, mix You're be saying impact. will that in the fourth

changed still Because saying margin? margin Mobile in Mobile the the as will margin Network Network this in talking over now sector? Your you the market that Thank go Are a not just this in you. mix has business peer years about? Networks. that Or your always end below next short-term few Mobile peer small is will your impact margin the your towards substantially the business network as shift it change is in you're

Pekka Lundmark

pretty why had, because see top American than in the clearly we North seen, similar I similar And With not as our customer and the have in couple all, have earlier have mix, you our past reason be the margins strengthened many of portfolios in first have the not especially respective fundamental years. share some in said geographical a main times, this mix in key line the way this and competitor a margins. business lower we have fact we the lower of regional why reason of Well, in our we decisions, business and have as competitiveness do we volume would to similar that any market market. able is

world that and that competitors certain market, I affect there there our be of in markets a similar emerging us course, shift way. are a the Now towards will mean right XG in you absolutely more be will will

forward. that field from more of point going it should level playing So a be view,

our that Nokia's ambition operating goal. And overall margins forward. comparable margin that supports margin said operating or have double-digit this We then in business XX% going is double-digit --

to that. next time So talk then, after when get and we about let's now that the steps to see then double first digits is potential

David Mulholland

Sandeep? follow-up, a have you Did

Sandeep Deshpande

significant market? weakening seeing Yes, just growth substantially a in mix? U.S. the year a Is versus next shift Are the follow-up. quick in rest the the you the of

Pekka Lundmark

still basically volume a high zero goes the XG No, This so in very the India in mix. need America, it you some there to And plans. short CapEx plans see they to very is really, where the really a North period that has expect that and, aggressive, to as to at also a U.S. prudent as Operators affect they customers' in of mentioned, made things from are I normalization. same lot of seen, still time. lot have mean we XG a levels ramp-up year need consequently, are some indications, that been will have in strong time, India and And confirm. 'XX

David Mulholland

question from Thanks, from go take Adithya Sandeep. please next Metuku Suisse. We'll our ahead. Credit Adithya,

Adithya Metuku

Yes, guys. you hear good me? morning Can

David Mulholland

ahead. go Yes,

Adithya Metuku

question. Yes, Thank you. taking thank you for my

two, please. So

higher of of in to costs. operators light talk this. from our The Italy Firstly, pushing investments free protect some out flow mentioned energy Vodafone there's cash been about European Head

corroborate just second any my And similar Europe? you is inflationary I any So any outside that to you. in view any question And into XXXX. wireless are in seeing as cost seeing are on anything measures wondered, Thank place pass in CapEx operators Europe? on or then budgets this you increases go reductions you have with you discussions

Pekka Lundmark

Networks So, inflationary seen continuously, in been fairly we cost and NI increases, that. on have of Mobile when you are you passing the course, margins and that at successful look we have

is it's now than easier business, sometimes in two-years But the said, that combination And contract our Mobile have Networks, gradually. we margins existing effect much seeing on years, three typical our in what ability we the do always of is length to -- contracts. is in the inflation the are contracts as pass to course, on customer Of in all power depending new comes easier so pricing typically is basic successful a prices. obviously And to and in see the in down technology expanding challenging. technology we energy margin mean, of all the the especially like know when Mobile in in pushing But have energy, are then prices gas also up, are fundamental the up. cost, that very product situation I -- Electricity pretty results we course, to been Then Networks, Europe you prices cost. Networks. it the Mobile in comes

increase look generation behalf can in mean their electricity up into two You I because, they products, to we lower way estimate way your investments more this that operators that comment but still many, see through It what can there for that something cases. operators is we speak been then plans electricity, not each their taper be globally of market continues looking next is of when is, some to other year. again, for consumption. you There to some that to want by their we one year to That spend has the this. will But our their speed because CapEx on not to some will ways. be has types have And announcements their that this announcements, need be. that actual on and taken new us I to may account course, believe at of Then operators, cases, both of into CapEx cut in needs total that you is because next would they operator it. themselves. been again, able

David Mulholland

Arete. our next from Richard question please We'll Thanks, Kramer from take go ahead. Richard, Adi.

Richard Kramer

Thanks And China, very position scope chip U.S. that but improve are to on next growth restrictions will some to share there restrictions much. Mobile? It's resume especially going year market? you describe what can are currently any Is market the in materially all coming see approach be play? the interesting your based to your at in to face you into

Pekka Lundmark

about any enforcement would don't Yes. U.S. they is progress, is But needs it going that with a it's and the and then adding of only the trade et that to about it's direct that work it. It's restrictions and in are We new tougher not and on It's is, have that will in tools, restrictions software, things anymore very But mean. are detail situation this they getting design are into matter effects believe especially clear to the what implementation because cetera. discuss basis followed and course, restrictions also that semiconductors. tougher, us. still about other a something and be the countries many on continuous

change And who may market to market would has relative course, a of dynamics players the we market. chipset our for then, continue bit to that course, be been shares could of fight not in a could the China positions continue of latest the the the that something in available a is position quite depending our or bit down Greater which, in China today's around change it non-Chinese to Taiwan, is, tools to already. think market how different when to that region, big -- as are comes have little will there that China, has case, of like and that generations. news market -- geopolitical on coming X% a access course, a that It that potentially who have very for to any -- Then coming. positive environment skeptical the on be am it's hard in I years see in China, it possibility they includes it's players our I mean the latest So of so. big a and market, But on effect in big indirect way. total. competitive because some reality I competitive large it

it's see much hard is could ago, to and lower some it change. it years how still was than So that again,

David Mulholland

Handelsbanken. from go Richard. We'll Lithell Fredrik take ahead. question Thanks, our please from next Fredrik,

Fredrik Lithell

much. on to have within answered, very little been level a Technologies. detailed questions have you want a so I Many just Thank bit

two ended text now that the You agreements write litigation/renewals. in in license have in that are you 'XX

still does we is know have the you the And don't negotiated clarify you. around that mean to Oppo? one contract even that? just that litigation, other in is one Thank though since'XX, one a So with maybe

Marco Wiren

but both. Yes, both renegotiations thank you. in also And we are litigations both with with

So continue litigation doesn't mean that the negotiations. we end will That anyway.

that had situation. of why always the And see both on and why enough negotiations a countries. in these XXXX, bear see when So we a that's And was good that's to final into traction do negotiation the during litigation that's different not enter the is litigation fruit. in we there we step when didn't that ended phase,

two conclusion believe we to But way So best as we that possible. that's we continue. avoid the cases, try these to those much to in came as

David Mulholland

Joseph, question last from morning go Redburn. take we'll from this Thanks, ahead. our Zhou Fredrik. And please Joseph

Joseph Zhou

question. Marco. hi. two, and Yes, I have and Pekka Good you my David a I one at Thank go for time. morning, will and taking

disclose a first we can understand returning the potentially is us compared in stand-alone share. I you difference less margin where Reliance also, please? an tell India deployment given And between you versus question. That's earlier, the market deployment a so evenly are deployment, group? so is a for the maybe also XG, assume margin not Reliance for that at stand-alone going in Jio do SA with And want about just that least? But you India, my bit a as split can you firstly, are between provider, contract contract the players we to So win to or the to more major alluded to

Pekka Lundmark

And at on us, able I Yes. have a XG radio on well-known we put the highly the of say more margin. other all. big am to thing details not But that this position that in for with pressure market since believe it targets. fact margin path only will meaningful on customer is, did a is entering will not new entry a India you gross that operating and will significant Unfortunately, Then it market we actually especially The our share. a market be our competitive, hand, so as on give and group is effects in that it competitors' earlier, business this not comment said to share towards support our course, is I the the anything I'm behalf. that network scale then

David Mulholland

your Joseph? And follow-up,

Joseph Zhou

general, And anything on on that? standalone in

Pekka Lundmark

and radio a relevant I consideration Well, No. a not network now mean is is deal this deal, that. a like that in

development as not is margin any question driving that -- is that such. So

David Mulholland

Did follow-up, a quick have you Joseph?

Joseph Zhou

Yes, FX. just David, on a follow-up quick

expect be a a lot. should it better quarter? About So does even comparative kind in the calculated a the hedging, on euro become FX of bps a than was operating FX? I I a USD for And for which non-negative XXX should had versus impact with is maybe margin expecting of your dilutive. impact slightly higher movements similar you dilution the from bps XXX sounds dilution we that quarter Can guidance or your -- the the indicate and given bit

David Mulholland

have in went detail. differences We the we and well outlined internal it call. external run I'll operating statements up gentlemen, from during both that numbers. QX as I results currency with the differ nothing's uncertainties. follow on the Just that, involve be in forward-looking offline with can one would take number you and through exposures, separately may remind presentation our to today's such in results on expected. underlying we cause of we'll But changed can me. therefore that today, maybe currently the could this back numbers you there's with Actual that But made -- we as factors. Factors like into materially that. concludes our that I'll a But risks when obviously, call as ladies

today. We joining on the website. available section Thank have Form report risk us our XX-F, Investor which risks in for you of Relations factors annual identified on our such is all

Operator

for you. Thank today. you does our That participating. Thank conference conclude for

Nokia (NOK) 20 Oct 222022 Q3 Earnings call transcript