Capital Markets Day 2021 - Federico Guillén President of Network Infrastructure - Nokia Corporation
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Capital Markets Day 2021 Federico Guillén President of Network Infrastructure
Disclaimer It should be noted that Nokia and its business are exposed Exchange Commission, including Nokia’s financial results measures at constant currency excludes the impact of to various risks and uncertainties and certain statements reports. Other unknown or unpredictable factors or changes in exchange rates in comparison to euro, our herein that are not historical facts are forward-looking underlying assumptions subsequently proven to be reporting currency. As comparable or constant currency statements. These forward-looking statements reflect incorrect could cause actual results to differ materially financial measures are not defined in IFRS they may not be Nokia’s current expectations and views of future from those in the forward-looking statements. We do not directly comparable with similarly titled measures used by developments and include statements preceded by undertake any obligation to publicly update or revise other companies, including those in the same industry. The “believe”, “expect”, “expectations”, “commit”, “anticipate”, forward-looking statements, whether as a result of new primary rationale for presenting these measures is that “foresee”, “see”, “target”, “estimate”, “designed”, “aim”, information, future events or otherwise, except to the the management uses these measures in assessing the “plan”, “intend”, “influence”, “assumption”, “focus”, extent legally required. financial performance of Nokia and believes that these “continue”, “project”, “should", "is to", "will” or similar measures provide meaningful supplemental information expressions. These statements are based on Nokia presents financial information on reported, on the underlying business performance of Nokia. These management's best assumptions and beliefs in light of the comparable and constant currency basis. Comparable financial measures should not be considered in isolation information currently available to it. Because they involve measures presented in this document exclude intangible from, or as a substitute for, financial information risks and uncertainties, actual results may differ materially asset amortization and other fair value adjustments, presented in compliance with IFRS. from the results that we currently expect. Factors, goodwill impairments, restructuring related charges and including risks and uncertainties that could cause such certain other items affecting comparability. In order to Nokia is a registered trademark of Nokia Corporation. differences can be both external, such as general, allow full visibility on determining comparable results, Other product and company names mentioned herein may economic and industry conditions, as well as internal information on items affecting comparability is presented be trademarks or trade names of their respective owners. operating factors. We have identified these in more detail separately for each of the components of profit or loss. in our Annual Report on Form 20-F for the year ended Constant currency reporting provides additional December 31, 2020 under “Operating and Financial Review information on change in financial measures on a constant and Prospects—Risk Factors“, and in our other filings or currency basis in order to better reflect the underlying documents furnished with the U.S. Securities and business performance. Therefore, change in financial 2 © 2021 Nokia Public
Our ambition is to be The world’s most trusted systems partner for the world’s most critical networks. 3 © 2021 Nokia Public
Network infrastructure at a glance
A strong foundation for value acceleration
Net Sales (2020) Top CSPs worldwide are SP Routing EMEA1
Next Gen Fiber Access2
our customers
Global Turnkey Subsea
99 of 100
€7.0bn Enterprise customers
#1
Comparable OP (2020) >1,500 SP Routing Global3
Optical Transport EMEA2
Global Fiber Access3
7% #2
Top cloud providers
7 of 8
14Q20, Dell’Oro, 24Q20 Rolling, Dell’Oro, 3Excl-China, 4Q20, Dell’Oro Revenue figures for 2020
4 © 2021 Nokia Public
Network Infrastructure
Our portfolio
IP Optical Fixed Submarine
Networks Networks Networks Networks
IP networks & services for Optical transport Fixed network services and Turnkey global undersea
residential, mobile, networks for metro- solutions spanning fiber, 5G transmission systems for
enterprise and cloud access, regional, longhaul and copper broadband CSPs, webscale, and oil
interconnect applications and ultra longhaul access networks and gas applications
applications
5 © 2021 Nokia Public
Market trends
Critical networks underpin industry transformation
NI TAM 2020-231 €bn
+2%
CAGR
42 45
5G infrastructure Enterprise digital
& services transformation & cloud
0.4% CSP 20/23 CAGR
5.3% Non-CSP 20/23 CAGR
IPN ON FN
Pandemic-accelerated Industry 4.0 2020 2023
residential broadband 1Does not include submarine cables or DC switching
6 © 2021 Nokia Public
Our strategy for growth
Technology leadership and customer focus
1 2 3
Deliver Portfolio Strengthen CSP Accelerate non-CSP
Innovation Foundation Growth
Technology leadership in Focused investment on Further expansion into
networking silicon, software, delivering solutions webscale and enterprise
and automation optimized for CSPs markets
7 © 2021 Nokia Public
IP Networks Strengthening our leadership position in core technologies Industry leading silicon & systems Software excellence Network automation & tools 8 © 2021 Nokia Public
Optical Networks Driving profitability through technology investment and increased scale Deliver next-gen DSPs Silicon photonics for optical components and modules Network automation & application ecosystem 9 © 2021 Nokia Public
Fixed Networks Continued leadership in fiber with next gen 10G & 25G Invest in in-house silicon and optical modules for cost, TTM and differentiation Cloud native software for automation and scalability Lead in 5G FWA CPEs 10 © 2021 Nokia Public
Submarine Networks Confirm leadership in submarine optical cable industry Vessel fleet rejuvenation and expansion of owned vessels Conversion of strong backlog 11 © 2021 Nokia Public
Opportunities to accelerate value creation
Data Center 5G Fixed New Network Openness &
Networks Wireless Access Builders Disaggregation
Opportunity: Opportunity: Opportunity: Opportunity:
DC switching is a large 5G brings increasing Share gains & new New technologies and
market with significant opportunity & traction sources of investment architectural approaches
growth opportunity for FWA create opportunity for
network transformation
Challenge: Challenge: Challenge: Challenge:
Large established market Limited silicon New builders require new Must build the right
with solid competition ecosystem diversity sales engagement model solutions that deliver
value
12 © 2021 Nokia PublicOur financial ambition
Increase profitability
Comments Comparable operating profit drivers 2020-2023
Gross profit expands
On market share gains in growing
market
SG&A optimized
2pts lower as % of net sales
R&D investments prioritized
For growth areas as well as cost
2020 Gross SG&A R&D 2021 Gross SG&A R&D 2023
optimization Profit Profit
Comparable operating margin 2020-2023
7% 7–10% 9–12%
13 © 2021 Nokia PublicKey takeaways
Network infrastructure portfolio
A strong
Market growth Accelerating Structured to
business
& opportunity value creation succeed
foundation
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