Nokia Corporation Financial Report for Q2 and Half Year 2022


Nokia Corporation 
Half year report

Nokia Corporation Financial Report for Q2 and Half Year 2022

Good profitability supports full year outlook

  • Q2 net sales increased 3% y-o-y in constant currency (+11% reported).
  • Network Infrastructure net sales grew 12% in constant currency, with growth across all four businesses while Mobile Networks returned to growth despite ongoing supply chain constraints.
  • Cloud and Network Services net sales were flat in constant currency while Nokia Technologies declined 25% as it continued to be impacted by expired licenses that are in the process of being renewed.
  • Comparable gross margin of 40.6% and operating margin of 12.2%. Underlying profitability improved but was offset by Nokia Technologies and a one-off software deal in Mobile Networks in the prior year meaning margins declined y-o-y.
  • Reported gross margin declined 80bps y-o-y to 40.2% and operating margin expanded 50bps y-o-y to 9.6% as the above factors impacting comparable margins were offset primarily by lower restructuring charges.
  • Comparable diluted EPS of EUR 0.10; reported diluted EPS of EUR 0.08.
  • Free cash flow negative EUR 0.1bn, net cash balance of EUR 4.5bn.
  • Solid first half performance with 2% constant currency net sales growth and comparable operating margin of 11.6% (reported 8.2%), down slightly as timing effects in Nokia Technologies offset underlying profitability improvements.
  • Full year 2022 net sales outlook is unchanged in constant currency. Full year net sales outlook applying 30 June 2022 exchange rates is EUR 23.5bn to EUR 24.7bn. Comparable operating margin guidance remains 11% to 13.5%.

This is a summary of the Nokia Corporation Financial Report for Q2 and Half Year 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 Q2 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.


I am pleased to say we continued to execute well in the second quarter. We improved net sales growth to 3% in constant currency despite ongoing supply chain constraints. We delivered another quarter of robust profitability with a 12.2% comparable operating margin, slightly down year-on-year due to timing effects of contract renewals in Nokia Technologies and a one-off software deal last year. Excluding these factors, we can see continued strong improvement in the underlying profitability of the business.

Network Infrastructure maintained its strong growth momentum with net sales up 12% in constant currency more than offsetting the decline in Nokia Technologies. I was pleased to see Mobile Networks returned to growth with a 1% increase in constant currency despite supply chain constraints, while Cloud and Network Services was stable year-on-year.

Momentum continues to build in Enterprise with growing order intake and returned to growth with an 8% increase in net sales in constant currency which are important for our long-term aspirations in the space. Since the start of this year we have been making further investments into private wireless both in R&D and go-to-market to capitalise on our early market leadership. We expect these investments will deliver strong financial returns for us in the mid-term as indicated by double-digit net sales growth in private wireless in the quarter.

While we recognize the increased global macroeconomic uncertainty and currency fluctuations impacting some emerging markets, I am confident we have the right strategy in place to navigate these challenges along with support from structural technology adoption trends in 5G and fiber. However, we will not become complacent; we remain focused on building technology leadership and improving cost-efficiency to deliver on our strategic goals for the years ahead.

We have had a strong first half and with our renewed competitiveness, we are well placed to deliver our full year 2022 guidance. There remain risks around timing of Nokia Technologies’ contract renewals, potential COVID-19 lockdowns and the supply chain which remains challenging but is showing signs of improvement. We are currently tracking towards the higher-end of our net sales guidance and towards the mid-point of our operating margin guidance as we manage ongoing inflation and currency headwinds.


EUR million (except for EPS in EUR)Q2’22Q2’21YoY changeConstant currency YoY changeQ1–Q2’22Q1–Q2’21YoY changeConstant currency YoY change
Reported results        
Net sales5 8735 31311%3%11 22010 3898%2%
Gross margin %40.2%41.0%(80)bps 40.4%39.5%90bps 
Research and development expenses(1 091)(1 063)3% (2 163)(2 060)5% 
Selling, general and administrative expenses(728)(712)2% (1 403)(1 360)3% 
Operating profit56448417% 9189160% 
Operating margin %9.6%9.1%50bps 8.2%8.8%(60)bps 
Profit for the period46035131% 67961411% 
EPS, diluted0.080.0633% 0.120.119% 
Net cash and interest-bearing financial investments4 5463 68823% 4 5463 68823% 
Comparable results        
Net sales5 8735 31311%3%11 22010 3898%2%
Gross margin %40.6%42.3%(170)bps 40.7%40.3%40bps 
Research and development expenses(1 069)(1 011)6% (2 122)(1 985)7% 
Selling, general and administrative expenses(623)(585)6% (1 204)(1 137)6% 
Operating profit7146825% 1 2961 2345% 
Operating margin %12.2%12.8%(60)bps 11.6%11.9%(30)bps 
Profit for the period5855399% 1 00191410% 
EPS, diluted0.100.0911% 0.170.166% 
ROIC118.5%18.4%10bps 18.5%18.4%10bps 
1 Comparable ROIC = Comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to the Performance measures section in Nokia Corporation Financial Report for Q2 and Half Year 2022 for details.
Business group resultsMobile
Cloud and
Network Services
Group Common
and Other
EUR millionQ2’22Q2’21Q2’22Q2’21Q2’22Q2’21Q2’22Q2’21Q2’22Q2’21 
Net Sales2 5932 3802 1531 7787537033054017762 
YoY change9% 21% 7% (24)% 24%  
Constant currency YoY change1% 12% 0% (25)% 16%  
Gross margin %40.2%40.9%35.4%35.3%37.2%35.7%99.7%99.8%(5.2)%(4.8)% 
Operating profit/(loss)291249247162(5)10217332(36)(70) 
Operating margin %11.2%10.5%11.5%9.1%(0.7)%1.4%71.1%82.8%(46.8)%(112.9)% 


 Full year 2022
Net sales1EUR 23.5 billion to EUR 24.7 billion (constant currency unchanged, adjusted for currency)1
Comparable operating margin211 to 13.5%
Free cash flow225-55% conversion from comparable operating profit

1 Assuming the rate 1 EUR = 1.04 USD as of 30 June 2022 continues for the remainder of 2022 along with year-to-date actual foreign exchange rates (adjusted from prior 1 EUR = 1.11 USD rate as of 31 Mar 2022). 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 Performance measures section in Nokia Corporation Financial Report for Q2 and Half Year 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 forward-looking statements subject to a number of risks and uncertainties as described in the Risk Factors section later in this release.

  • Nokia’s outlook assumptions expect the following size and growth in our estimated total addressable markets (Mobile Networks excluding China and Network Infrastructure excluding Submarine Networks) and assuming year-to-date actual EUR/USD rate and 1.04 for the remainder of the year (updated):
 2022 total addressable market (€bn)Constant currency growth
Mobile Networks51+5%
Network Infrastructure47+5%
Cloud and Network Services27+3%
Nokia total addressable market125+4%
  • Nokia’s outlook assumptions for the operating margin of each business group in 2022 are provided below:        
 Full year 2022
Mobile Networks6.5 to 9.5%
Network Infrastructure9.5 to 12.5%
Cloud and Network Services4.0 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 EUR 100-150 million over the longer-term (update);
  • 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; and
  • Capital expenditures are expected to be approximately EUR 650 million in full year 2022 and around EUR 600 million over the longer-term.

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 Q2 and Half Year 2022 for details), we expect that a 10% strengthening in the USD vs. the EUR would have an impact of approximately positive 5% on net sales, a positive impact on operating profit and a slight positive impact to our operating margin, before hedging. In the current financial year, due to the impact of hedging, we expect an approximately neutral impact on operating profit and a slightly negative impact to operating margin (update).

Nokia’s long-term targets as published with our fourth quarter 2021 results remain unchanged.



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 installments during the authorization period, in connection with the quarterly results, unless the Board decides otherwise for a justified reason.

Under the authorization, a EUR 0.02 dividend was paid in Q2 2022 totaling EUR 113 million.

On 21 July 2022, the Board resolved to distribute a dividend of EUR 0.02 per share. The dividend record date is on 26 July 2022 and the dividend will be paid on 4 August 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 of the second installment and the executed payment of the first installment in Q2 2022, the Board’s remaining distribution authorization is a maximum of EUR 0.04 per share.

The payment of the second installment of the distribution is expected to total approximately EUR 112 million in Q3 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, the 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 June 2022, Nokia has repurchased 30 335 608 shares for a total purchase price of approximately EUR 144 million, with weighted average purchase price of EUR 4.73 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, increased global macro-uncertainty and major currency fluctuations;
  • 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 webcast will begin on 21 July 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 third quarter and January-September 2022 results on 20 October 2022.

About Nokia

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Maria Vaismaa, Global Head of Public Relations

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