#Nokia announced a new financial reporting structure

One thing I have always liked about Nokia, as a person who likes financial stuff, is the transparent and detailed financial reporting that the company does. In some cases in Nokia’s history, there were times public and fans wanted to know more about some business result, and Nokia refused to provide that info. To be precise, that was the case with the sales figures of Nokia N9 and Nokia 808. By comparing Nokia’s way of reporting to other companies in the sector, it’s easy to conclude that Nokia is very transparent.

This week Nokia announced a new financial reporting structure, basically dividing the “Networks” business into three segments:

  1. Ultra Broadband Networks, comprised of the Mobile Networks and Fixed Networks business groups.
  2. Global Services, comprised of the Global Services business group.
  3. IP Networks and Applications, comprised of the IP/Optical Networks and Applications & Analytics business groups.

As before, Nokia Technologies remain to be reported as a standalone part inside Nokia.

To provide investors and analysts a better way to inspect Nokia’s upcoming Q2 results scheduled for 27th July, Nokia provided the financial results for Q1 and full 2016 in the new reporting scheme. The full report can be found here. Down below you can take a look at some key Financial figures for Q1 2017 and Q2 2016, because these two quarters will be compared to the Q2 2017 results we’ll see on the 27th.

Results for Q1 2017:

  • Net sales: €5.378 billion
    • Networks total: €4.902 billion
      • Ultra Broadband: €2.236 billion
      • Global Services: €1.361 billion
      • IP Networks: €1.304 billion
    • Technologies: €247 million
  • Operating profit: (-)€127 million
    • Networks: €324 million
      • Ultra Broadband: €245 million
      • Global Services: €55 million
      • IP Networks: €23 million
    • Technologies: €116 million
  • Other selling, general and administrative expenses (mainly related to Alcatel-Lucent acquisition): €781 million

Results for Q2 2016:

  • Net sales: €5.576 billion
    • Networks total: €5.222 billion
      • Ultra Broadband: €2.356 billion
      • Global Services: €1.444 billion
      • IP Networks: €1.421 billion
    • Technologies: €194 million
  • Operating profit: (-)€760 million
    • Networks: €313 million
      • Ultra Broadband: €184 million
      • Global Services: €34 million
      • IP Networks: €95 million
    • Technologies: €89 million
  • Other selling, general and administrative expenses (mainly related to Alcatel-Lucent acquisition): €765 million

The segment of Nokia we are most interested in is Nokia Technologies. Now under the lead of Gregory Lee, the business is responsible for Nokia OZO, Nokia Health, Patents and Brand Partnership. Under brand partnership are included HMD’s royalties for use of the Nokia brand and patents on smartphones. HMD does not need to pay the brand license for feature phones, because they acquired it from Microsoft. We could also find out in the upcoming report how much money will Nokia get from the patent deal signed with Apple. And maybe some insight of the recently announced partnership with Xiaomi.

  • Stinger

    I’m hoping HMD Global will be this transparent, but I doubt it. I still haven’t been able to discern how many Nokia 6 units have been shipped.

    The Nokia N9 I strongly suspect was a HUGE sales hit for Nokia, but Stephen Elop wanted to go with windows. The N9’s sales success would have been a strong argument to use Meego instead of Windows Phone. Meego is the best operating system I have ever used. I miss it!

    • We will never know how good or bad the sales were. HMD is privately owned and they won’t be that transparent. In fact, they only have to publish yearly reports to Finnish authorities and that’s publicly available.