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Nokia Corporation releases Financial Report for Q4 and full year 2022

Nokia Corporation Financial Report for Q4 and full year 2022

A solid end to a year of acceleration

  • Q4 net sales grew 11% y-o-y in constant currency (16% reported). Full year net sales grew 6% (12% reported).
  • In Q4 Network Infrastructure grew net sales 14% in constant currency with all units contributing. Mobile Networks grew 3% with a meaningful shift in regional mix in the quarter while Cloud and Network Services grew 5%. Nokia Technologies grew 82% as a long-term licensee exercised an option leading to higher revenue recognition in Q4.
  • Enterprise net sales grew 49% y-o-y in constant currency in Q4 (55% reported); 21% in full year 2022 (27% reported).
  • Q4 comparable gross margin +340bps y-o-y to 43.5% (reported +330bps to 42.8%), with 240bps of expansion related to the Nokia Technologies option exercise. Comparable operating margin +130bps to 15.5% (reported +30bps to 11.8%).
  • Q4 operating margin improved y-o-y due to the combination of the exercised option in Nokia Technologies and stronger margin in Network Infrastructure offsetting declines in Mobile Networks (regional mix shift) and greater losses in Group Common and Other primarily related to the strong venture fund performance in the prior year.
  • Re-recognized deferred tax asset of EUR 2.5bn in Q4 which boosted reported net profit and EPS.
  • Q4 comparable diluted EPS of EUR 0.16; reported diluted EPS of EUR 0.56. Full year EUR 0.44 and EUR 0.75 respectively.
  • Q4 free cash flow positive EUR 0.4bn, net cash balance of EUR 4.8bn. Full year free cash flow EUR 0.8bn.
  • Board proposes dividend authorization of EUR 0.12 per share.
  • Nokia expects 2023 full year net sales of between EUR 24.9bn to 26.5bn, comparable operating margin between 11.5 to 14.0% and Free Cash Flow conversion from comparable operating profit of 20 to 50%.


We said at the start of 2022 that it would be a year of acceleration and we delivered what we promised. The Nokia team did a great job navigating geopolitical, economic and supply challenges, successfully executed our strategy and delivered a strong full year performance. Our constant currency full year net sales growth accelerated to 6% and we maintained a stable comparable operating margin of 12.5% which is a good result considering one-off benefits we had in 2021.

One of our strategic priorities is to broaden our customer base and grow in Enterprise and I’m delighted we achieved 21% net sales growth in constant currency for the full year with 49% growth in Q4. There were important webscale wins in 2022 with momentum also continuing to build in our private wireless business where we added 45 customers in Q4.

The highlight of the fourth quarter was our stellar Network Infrastructure performance, which grew net sales 14% in constant currency with significant operating margin expansion. Notably, we saw a strong acceleration in both our Optical Networks and IP Networks businesses with net sales growing 21% and 11% respectively in constant currency. Mobile Networks delivered 3% constant currency growth in Q4 with operating margin declining year-on-year, as expected due to changes in regional mix. On a full year basis, Mobile Networks’ 3% net sales growth and 90bps higher operating margin is encouraging after a successful reset the previous year. We continue to see solid demand trends in Network Infrastructure and Mobile Networks as we look ahead into 2023.

In Cloud and Network Services, we saw good Q4 net sales growth of 5% in constant currency and continued improvement in gross margin, which increased 200bps year-on-year. Increased investments into private wireless and Software-as-a-Service meant operating margin was largely stable. This is evidence that the ongoing optimization of our portfolio is bearing fruit and positioning us for continued profitable growth in the future.

In Nokia Technologies, we remain in two litigation/renewal discussions. Several court rulings have validated our position giving us confidence in our approach to prioritize the value of our portfolio over achieving specific timelines. At the end of the year, a long-term licensee exercised an option to extend its license in effect into perpetuity. This meant we recognized all outstanding revenue for this license in the fourth quarter. More recently, I was pleased to see us enter into a new multi-year patent license agreement with Samsung, which underscores Nokia Technologies’ strong patent portfolio and supports its ability to deliver stable operating profit over the long-term.

Looking forward to 2023, while we are mindful of the uncertain economic outlook, demand remains robust. We expect another year of growth and we are targeting full year net sales of between EUR 24.9bn and EUR 26.5bn which implies between 2% and 8% growth in constant currency. We are also targeting a comparable operating margin in the range of 11.5% to 14.0%. Whilst this growth means we have another year of working capital build constraining our free cash flow conversion from comparable operating profit to a range of 20% to 50%, we expect significantly stronger cash flow in 2024. Due to our confidence in our long-term outlook and strong balance sheet position the Board is proposing an increase in the dividend to EUR 0.12 per share.

I would like to thank the whole Nokia team for delivering a really positive 2022 and for putting us on a strong foundation to keep delivering in 2023 and beyond.


EUR million (except for EPS in EUR) Q4'22 Q4'21 YoY change Constant currency YoY change Q1–Q4'22 Q1–Q4'21 YoY change Constant currency YoY change
Reported results
Net sales 7 449 6 414 16% 11% 24 911 22 202 12% 6%
Gross margin % 42.8% 39.5% 330bps 41.0% 39.8% 120bps
Research and development expenses (1 222) (1 118) 9% (4 550) (4 214) 8%
Selling, general and administrative expenses (838) (758) 11% (3 013) (2 792) 8%
Operating profit 882 740 19% 2 318 2 158 7%
Operating margin % 11.8% 11.5% 30bps 9.3% 9.7% (40)bps
Profit for the period 3 152 680 364% 4 259 1 645 159%
EPS, diluted 0.56 0.12 367% 0.75 0.29 159%
Net cash and interest-bearing financial investments 4 767 4 615 3% 4 767 4 615 3%
Comparable results
Net sales 7 449 6 414 16% 11% 24 911 22 202 12% 6%
Gross margin % 43.5% 40.1% 340bps 41.4% 40.4% 100bps
Research and development expenses (1 189) (1 092) 9% (4 449) (4 084) 9%
Selling, general and administrative expenses (727) (659) 10% (2 604) (2 379) 9%
Operating profit 1 154 908 27% 3 109 2 775 12%
Operating margin % 15.5% 14.2% 130bps 12.5% 12.5% 0bps
Profit for the period 929 731 27% 2 481 2 109 18%
EPS, diluted 0.16 0.13 23% 0.44 0.37 19%
ROIC1 17.5% 20.1% (260)bps 17.5% 20.1% (260)bps
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 Q4 and full year 2022 for details.
Business group results Network
Cloud and
Network Services
Group Common
and Other
EUR million Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 Q4'21
Net Sales 2 709 2 254 2 960 2 761 1 060 964 679 368 59 74
YoY change 20% 7% 10% 85% (20)%
Constant currency YoY change 14% 3% 5% 82% (26)%
Gross margin % 39.6% 34.0% 34.7% 37.6% 43.8% 41.8% 99.9% 99.7% (10.2)% (4.1)%
Operating profit/(loss) 431 248 201 270 147 145 564 282 (189) (38)
Operating margin % 15.9% 11.0% 6.8% 9.8% 13.9% 15.0% 83.1% 76.6% (320.3)% (51.4)%



The Board of Directors proposes that the Annual General Meeting 2023 authorizes the Board to resolve on the distribution of an aggregate maximum of EUR 0.12 per share to be paid in respect of financial year 2022. The authorization would 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.

Nokia’s dividend policy is to target recurring, stable and over time growing ordinary dividend payments, taking into account the previous year’s earnings as well as the company’s financial position and business outlook.

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, dividends of EUR 0.02 per share were paid in Q2 2022 totaling EUR 113 million; in Q3 2022 totaling EUR 112 million and in Q4 2022 totaling EUR 112 million.

On 26 January 2023, the Board resolved to distribute a dividend of EUR 0.02 per share. The dividend record date is on 31 January 2023 and the dividend will be paid on 9 February 2023. 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 fourth installment and executed payments of the previous installments, the Board has no remaining distribution authorization.

The payment of the fourth installment of the distribution is expected to total approximately EUR 112 million in Q1 2023.

Share buyback program

In 2020 and 2021, Nokia generated strong cash flow which has 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 authorizations from the Annual General Meetings 2021 and 2022 to repurchase shares to return up to EUR 600 million of cash to shareholders in tranches over a period of two years.

The first phase of the share buyback program with a maximum aggregate purchase price of EUR 300 million started in February 2022 and ended in November 2022. Under the first phase of the buyback program, Nokia repurchased 63 963 583 of its own shares at an average price per share of approximately EUR 4.69. The repurchases reduced the Company’s unrestricted equity by EUR 300 million and the repurchased shares were cancelled in December 2022.

The second EUR 300 million phase of the share buyback program started in January 2023 and it will end at the latest by 21 December 2023.


Full Year 2023
Net sales1 EUR 24.9 billion to EUR 26.5 billion1 (2 to 8% growth in constant currency)
Comparable operating margin2 11.5 to 14.0%
Free cash flow2 20 to 50% conversion from comparable operating profit

1 Assuming the rate 1 EUR = 1.07 USD as of 31 December 2022 through 2023.
2 Please refer to Performance measures section in Nokia Corporation Financial Report for Q4 and full year 2022 for a full explanation of how these terms are defined.

The outlook, long-term targets and all of the underlying outlook assumptions described below are forward-looking statements subject to a number of risks and uncertainties as described or referred to in the Risk Factors section later in this release. Along with Nokia's official outlook targets provided above, below are outlook assumptions by business group that support the group level outlook. The comments for relative growth by business group are provided to give a reference on how we expect each to perform relative to the overall group.

2023 total addressable market Nokia business group assumptions
Size (EUR bn)1 Constant currency growth Net sales growth Operating margin
Network Infrastructure2 48 4% In-line to below group 11.0 to 14.0%
Mobile Networks3 53 5% Faster than group 7.0 to 10.0%
Cloud and Network Services 29 4% In-line to below group 5.5 to 8.5%
1 Total addressable market forecasts assume the currency rate of 1 EUR = 1.07 USD as of 31 December 2022 through 2023. The addressable market is excluding Russia and Belarus.

2 Excluding Submarine Networks.

3 Excluding China.

Nokia provides the following approximate outlook assumptions for additional items concerning 2023:

Full year 2023 Comment
Nokia Technologies operating profit Largely stable Assuming closure of outstanding litigation / renewal discussions we expect largely stable operating profit in Nokia Technologies in 2023. Nokia currently assumes free cash flow slightly greater than operating profit in Nokia Technologies.
Group Common and Other operating profit Negative

EUR 300-350 million

This includes central function costs largely stable at below EUR 200 million and an increase in investment in long-term research now above EUR 100 million. This line also accounts for Radio Frequency Systems (RFS) and could be impacted by any positive or negative revaluations in Nokia's venture funds in 2023.
Comparable financial income and expenses EUR 0 million As interest rates have increased we now expect financial income and expenses to be approximately balanced.
Comparable income tax rate ~25% Following the re-recognition of deferred tax assets at the end of 2022 we now provide an assumption based on a % tax rate instead of an absolute amount.
Cash outflows related to income taxes EUR 700 million Cash outflows related to income taxes are expected to increase due to mandatory capitalization of R&D costs under U.S. tax laws as well as evolving regional mix.
Capital Expenditures EUR 650 million


Nokia's long-term targets remain unchanged from those introduced with its Q4 2021 financial results. The targets had an associated timeline of 3-5 years which remains unchanged and implies by 2024-2026. These targets remain intended to show Nokia's ambition to deliver continuous improvement in the business over the time period.

Net sales Grow faster than the market
Comparable operating margin1 ≥ 14%
Free cash flow1 55 to 85% conversion from comparable operating profit
1Please refer to Performance measures section in Nokia Corporation Financial Report for Q4 and full year 2022 for a full explanation of how these terms are defined.


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, major currency fluctuations and higher interest rates;
  • 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, renewed 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; on-going litigation with respect to licensing and regulatory landscape for patent licensing;
  • The outcomes of on-going and potential disputes and litigation;
  • 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 business mix, the timing of patent licensing cash flow and changes in tax legislation, including potential tax reforms in various countries 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 and the general macroeconomic conditions 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 flows, the timing of receivables, operating expenses, provisions, impairments, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions, competitiveness, revenue generation in any specific region, and licensing income and payments; D) ability to execute, expectations, plans or benefits related to changes in organizational structure and operating model; E) impact on revenue with respect to litigation/renewal discussions; and F) 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 26 January 2023 at 11.30 a.m. Finnish time (EET). The webcast will last approximately 90 minutes.
  • The webcast will include an extended presentation covering both our financial results along with a Group Level Progress Update followed by a Q&A session. The results presentation slides will be available for download at
  • A link to the webcast will be available at
  • Media representatives can listen in via the link, or alternatively call +1-412-317-5619.


  • Nokia plans to publish its "Nokia in 2022" annual report, which includes the review by the Board of Directors and the audited annual accounts, during week 9 of 2023. The annual report will be available at
  • Nokia's Annual General Meeting 2023 is planned to be held on 4 April 2023.
  • Nokia plans to publish its first quarter 2023 results on 20 April 2023.
  • Nokia plans to publish its second quarter and half year 2023 results on 20 July 2023.
  • Nokia plans to publish its third quarter and January-September 2023 results on 19 October 2023.