Nokia published its annual report last week and we summarise some of the main points here. Nokia''s quarterly results contain fairly detailed notes to the accounts already so incremental disclosure is limited though there are a few snippets around supplier and customer concentration, asset impairment test assumptions and management pay.
What happened?
Operational
. Outlook for market: Communication service provider (CSP, ie telco operators) market globally fell -5% in 2024, Nokia expects a +2% CAGR 24-29 and aims to grow faster than market. For enterprise market grew 4% in 2024 and Nokia expects an 8% CAGR in 24-29 with a rising market share
. Suppliers: Nokia has 9k suppliers with spend spread 28% Europe, 44% Asia, China 16%, Americas 12%. It has its own manufacturing in Finland (10k sq-km) and India (16k sq-km)
Financial
. Customer concentration: 2023/24 no single customer was 10% of sales but in 2022 biggest customer 11%
. FX exposure: USD went from 50% to 55% of revs. INR fell from 5% to zeroVenture fund investments balance sheet value EUR865m (2023 EUR784m)
. Divisional assumptions for asset impairment tests: NI and cloud terminal growth 1.5% (was 1.0%). No change to MN. Minor changes to discount rates
Mgmt comp
. Remuneration of CEO: EUR6.7m in 24 vs EUR8.0m in 23 mostly as share based payment expenses EUR3.1m vs EUR5.0m last year
. CEO pay 2024 STI scorecard: 60% operating profit (83% achieved ), 20% cash release (225% achieved), 10% gender diversity (25% achieved ), 10% health and safety (62% achieved). LTI scorecard weightings: rel TSR 50%, 40% cum. Adj EPS, 10% CO2 reduction
BNPP Exane View:
Nokia already has quite comprehensive disclosure but there are a few interesting points:
. Nokia gives a longer term outlook for both the CSP and the enterprise market which points to better revenue growth than what we saw in 2024. This looks reasonable as 2024 started quite weak esp in the US where revenues fell post the post COVID restocking and tax...
