Nokia (NOKIA) Q4 2023 earnings summary

Executive summary

• 2023 delivered resilient profitability and solid cash generation amid a challenging market; Q4 order intake and cash flow improved.

• Operating-model changes advanced, with sales embedded in business groups and cost actions underway.

Financial highlights

• Q4 net sales were €5.7bn, down 21% YoY at constant currency and 23% reported, from €7.4bn in Q4 2022.

• Q4 comparable operating profit was €846m with a 14.8% margin, versus €1,154m and 15.5% a year earlier; margin declined 70 bps YoY.

• FY 2023 net sales declined 8% at constant currency; operating margin was 10.7%, down 180 bps YoY.

• FY free cash flow was €0.8bn; year-end net cash reached €4.3bn, up from €3.0bn at Q3 2023.

Outlook and guidance

• FY 2024 comparable operating profit guidance is €2.3bn–€2.9bn; FCF conversion is expected at 30%–60%.

• 2024 is expected to be challenging in H1, with improvement and green shoots anticipated in H2.

• Network Infrastructure 2024 planning assumptions: constant-currency sales growth of 2%–8% and operating margin of 11.5%–14.5%.

• Mobile Networks assumptions: sales decline of 10%–15% and operating margin of 1%–4%; Cloud and Network Services: sales change of -2% to +3% and margin of 6%–9%.

• 2026 margin assumptions are 12%–15% for Network Infrastructure, 6%–9% for Mobile Networks and 7%–10% for Cloud and Network Services; Technologies operating profit target is >€1.1bn.