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Nokia Corporation Financial Report for Q4 and full year 2021

Nokia Corporation 
Financial Statement Release
3 February 2022 at 08:00 EET

Nokia Corporation Financial Report for Q4 and full year 2021

Solid end to a transformational year

  • 2021 was a transformational year for Nokia, including refocusing on and strengthening our technology leadership.
  • In Q4, Nokia’s underlying business performed largely as expected with other operating income being above expectations.
  • Q4 net sales declined 5% y-o-y in constant currency as expected with strong growth in Network Infrastructure of +10% offset by Mobile Networks at -16%. Full year net sales grew 3% y-o-y in constant currency.
  • Comparable operating margin of 14.2% (reported 11.5%) in Q4 declined 190bps y-o-y (reported +480bps) due to lower Q4 seasonality as expected.
  • Full year comparable operating margin of 12.5% (reported 9.7%) expanded 300bps y-o-y (reported +570bps) but also benefited from approximately 150bps of one-offs.
  • Comparable diluted EPS of EUR 0.13 in Q4; reported diluted EPS of EUR 0.12.
  • Continued strong free cash flow generation of EUR 0.4bn in Q4. Full year free cash flow of EUR 2.4bn.
  • Guidance for 2022 net sales of EUR 22.6-23.8bn and a comparable operating margin in the range 11-13.5%.
  • New long-term targets to grow revenue faster than the market and a comparable operating margin of ≥14%.
  • Board proposes dividend authorization of EUR 0.08 per share. Share buyback program to be initiated to return EUR 600m over 2 years.

This is a summary of the Nokia Corporation financial report for Q4 and full year 2021 published today. Nokia only publishes a summary of its financial reports in stock exchange releases. The summary focuses on Nokia Group's financial information as well as on Nokia's outlook. The detailed, segment-level discussion will be available in the complete financial report hosted at A video interview summarizing the key points of our Q4 results will also be published on the website. Investors should not solely rely on summaries of Nokia's financial reports and should also review the complete report with tables.


2021 was a strong year for Nokia driven by our growing technology leadership, robust demand and a faster than expected reset of our business. This enabled us to deliver 3% constant currency net sales growth and a comparable operating margin of 12.5%. Thanks to a solid Q4 capping off a strong 2021, we have created an excellent foundation as we begin to move into the next phase of our strategy to deliver growth and expand profitability.

All our business groups made significant progress this year to make us more competitive in all the markets in which we compete. Mobile Networks largely closed the gap to competition in 5G and improved its gross margin while continuing to step up R&D investments. Network Infrastructure extended its technology leadership with significant growth driven by Fixed Networks and Submarine Networks. Cloud and Network Services continued to rebalance its portfolio and saw encouraging growth in its key focus areas. Nokia Technologies made good progress expanding in areas such as automotive and consumer electronics.

The progress we have made with cash generation in the business has strengthened our balance sheet to the point we can look to reinstate shareholder distributions through both a dividend and share buyback program.

Nokia enters 2022 in a strong position with improved margins, faster than expected strategy execution and a high order backlog, although the global supply chain situation remains tight. We see opportunities in the 5G roll out and growing enterprise market. Accordingly, we expect 2022 to bring another year of sales growth and we are targeting a comparable operating margin of 11-13.5% in 2022.

Considering how quickly we have executed on our strategy, we are now introducing new long-term targets. We still expect to deliver progress in 2023 but we want to emphasize that is not the end of our ambition. Our long-term target is to grow faster than the market and to achieve a comparable operating margin of at least 14%. The pace of delivery will depend on both the market environment and decisions we may make on R&D investments to secure our long-term competitiveness and sustainable profitability.

Finally, I want to thank our employees whose excellence, resilience and adaptability have been critical in delivering this performance in 2021. We recognise how valuable each person is to Nokia’s performance and we will increase investment in our people through our renewed people strategy.


EUR million (except for EPS in EUR) Q4'21 Q4'20 YoY change Constant currency YoY change Q1–Q4'21 Q1–Q4'20 YoY change Constant currency YoY change
Reported results                
Net sales 6 414 6 553 (2)% (5)% 22 202 21 852 2% 3%
Gross margin % 39.5% 39.0% 50bps   39.8% 37.5% 230bps  
Research and development expenses (1 118) (1 145) (2)%   (4 214) (4 087) 3%  
Selling, general and administrative expenses (758) (777) (2)%   (2 792) (2 898) (4)%  
Operating profit 740 441 68%   2 158 885 144%  
Operating margin % 11.5% 6.7% 480bps   9.7% 4.0% 570bps  
Profit/(loss) for the period 680 (2 696)     1 645 (2 516)    
EPS, diluted 0.12 (0.48)     0.29 (0.45)    
Net cash and current financial investments 4 615 2 485 86%   4 615 2 485 86%  
Comparable results                
Net sales 6 414 6 554 (2)% (5)% 22 202 21 854 2% 3%
Gross margin % 40.1% 41.6% (150)bps   40.4% 38.9% 150bps  
Research and development expenses (1 092) (1 010) 8%   (4 084) (3 817) 7%  
Selling, general and administrative expenses (659) (670) (2)%   (2 379) (2 489) (4)%  
Operating profit 908 1 056 (14)%   2 775 2 081 33%  
Operating margin % 14.2% 16.1% (190)bps   12.5% 9.5% 300bps  
Profit for the period 731 784 (7)%   2 109 1 437 47%  
EPS, diluted 0.13 0.14 (7)%   0.37 0.25 48%  
ROIC1 20.1% 11.9% 823bps   20.1% 11.9% 823bps  
1 Comparable ROIC = Comparable operating profit after tax, last four quarters / invested capital, average of last five quarters’ ending balances. Refer to Note 10, Performance measures, in the Financial statement information section included in Nokia Corporation Financial Report for Q4 and full year 2021 for details.


Reconciliation of reported operating profit to comparable operating profit      
EUR million Q4'21 Q4'20 YoY change Q1–Q4'21 Q1–Q4'20 YoY change
Reported operating profit 740 441 68% 2 158 885 144%
Amortization of acquired intangible assets 99 99   391 407  
Restructuring and associated charges 52 314   263 651  
Gain on sale of fixed assets (30) 0   (53) (2)  
Impairment and write-off of assets, net of reversals 13 216   45 241  
Settlement of legal disputes 0 0   (80) 0  
Gain on defined benefit plan amendment 0 0   0 (90)  
Other, net 34 (14)   51 (11)  
Comparable operating profit 908 1 056 (14)% 2 775 2 081 33%


Dividend policy and 2021 proposal

In line with Nokia’s dividend policy as stated below, Nokia’s Board of Directors proposes that the Annual General Meeting authorizes the Board to resolve on a dividend of EUR 0.08 per share be paid to investors in respect of financial year 2021. If the resolution is approved the dividend would be paid in quarterly installments starting after the AGM.

Our 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.

Share buyback program

In 2020 and 2021, Nokia has 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 is initiating a share buyback program under the current authorization from the AGM to repurchase shares, with purchases expected to begin in Q1. The program targets to return up to EUR 600m of cash to shareholders in tranches over a period of two years, subject to continued authorization from the AGM.


  Full year 2022
Net sales1 EUR 22.6 billion to EUR 23.8 billion
Comparable operating margin2 11 to 13.5%
Free cash flow2 25-55% conversion from comparable operating profit

1 Assuming the rate 1 EUR = 1.13 USD as of 31 Dec 2021 continues throughout 2022.
Please refer to Note 10, Performance measures, in the Financial statement information section included in Nokia Corporation Financial Report for Q4 and full year 2021 for a full explanation of how these terms are defined.


The outlook, the long-term targets (3-5 years) and all of the underlying outlook assumptions described below are subject to risk factors as described in the Risk Factors section later in this release. All of the below outlook assumptions are new as they now refer to 2022 and over the longer-term.

  • Nokia’s outlook assumptions for the comparable operating margin of each business group in 2022 are provided below:
  Full year 2022
Mobile Networks 6.5 to 9.5%
Network Infrastructure 9.5 to 12.5%
Cloud and Network Services 4.0 to 7.0%
Nokia Technologies >75%
  • We expect Nokia Technologies to deliver a largely stable operating profit performance in 2022 and over the longer-term;
  • We expect the net negative impact of Group Common and Other to be EUR 250 million in 2022 and over the longer-term;
  • In full year 2022, Nokia expects the free cash flow performance of Nokia Technologies to be approximately EUR 450 million lower than its operating profit, primarily due to prepayments we received from certain licensees in previous years;
  • Comparable financial income and expenses are expected to be an expense of approximately EUR 150-200 million in full year 2022 and over the longer-term;
  • Comparable income tax expenses are expected to be approximately EUR 450 million in full year 2022 and over the longer-term;
  • Cash outflows related to income taxes are expected to be approximately EUR 400 million in full year 2022 and over the longer-term;
  • Capital expenditures are expected to be approximately EUR 650 million in full year 2022 and around EUR 600 million over the longer-term; and
  • Rule of thumb related to currency fluctuations: Assuming our current mix of net sales and total costs (refer to Note 1, Basis of Preparation, in the Financial statement information section included in Nokia Corporation Financial Report for Q4 and full year 2021 for details), we expect that a 10% increase in the EUR/USD exchange rate would have an impact of approximately negative 4 to 5% on net sales and an approximately neutral impact on operating profit. 



With Nokia’s new 2022 guidance for comparable operating margin exceeding the prior 2023 outlook for comparable operating margin and to better reflect long-term ambitions, Nokia has replaced its prior 2023 outlook with long-term targets (3-5 years) for the business, as laid out below. These new targets are intended to show Nokia’s plan to deliver continuous improvement over time in the business.

Net sales Grow faster than the market
Comparable operating margin ≥14%
Free cash flow 55-85% conversion from comparable operating profit


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;
  • Scope and duration of the COVID-19 pandemic, and its economic impact;
  • Accelerating inflation;
  • Other macroeconomic, geopolitical, industry and competitive developments;
  • Timing and value of new 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; and the regulatory landscape for patent licensing;
  • 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 regional profit mix, net sales subject to withholding taxes, the timing of patent licensing cash flow and changes in tax legislation, including potential tax reform in the U.S. 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 as the risk factors specified under Forward-looking Statements of this release, and our 2020 annual report on Form 20-F published on 4 March 2021 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, and operational key performance indicators; B) expectations, plans or benefits related to future performance of our businesses (including the expected impact, timing and duration of COVID-19 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, cash generation, results, the timing of receivables, operating expenses, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions and competitiveness, as well as results of operations including market share, prices, net sales, income and margins; D) ability to execute, expectations, plans or benefits related to changes in organizational structure and operating model; and E) 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 video webcast will begin on 3 February 2022 at 11.30 a.m. Finnish time (EET). A link to the webcast will be available at Media representatives can follow the presentation via the link, or alternatively call +1-412-717-9224.


  • Nokia plans to publish its "Nokia in 2021" annual report, which includes the review by the Board of Directors and the audited annual accounts, during week 9 of 2022. The annual report will be available at
  • Nokia's Annual General Meeting 2022 is planned to be held on 5 April 2022.
  • Nokia plans to publish its first quarter 2022 results on 28 April 2022.
  • Nokia plans to publish its second quarter and half year 2022 results on 21 July 2022.
  • Nokia plans to publish its third quarter and January-September 2022 results on 20 October 2022.


About Nokia

At Nokia, we create technology that helps the world act together.

As a trusted partner for critical networks, we are committed to innovation and technology leadership across mobile, fixed and cloud networks. We create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs.

Adhering to the highest standards of integrity and security, we help build the capabilities needed for a more productive, sustainable and inclusive world.


Phone: +358 10 448 4900
Katja Antila, Head of Corporate Communications

Investor Relations
Phone: +358 40 803 4080