Nokia lowers net sales and narrows operating margin outlook for 2023
Via Nokia
Jul 14, 2023
Inside information: Nokia lowers net sales and narrows operating margin outlook for 2023
- Nokia lowers net sales outlook to EUR 23.2 billion to 24.6 billion from EUR 24.6 billion to EUR 26.2 billion
- Narrows comparable operating margin range to 11.5% to 13% from 11.5% to 14%
- Reports preliminary Q2 financial results of approximately EUR 5.7 billion net sales and 11% comparable operating margin
Espoo, Finland – Nokia is today providing an update to its financial guidance for full year 2023. Nokia is lowering its full year net sales outlook to a range of EUR 23.2 billion to EUR 24.6 billion (previously EUR 24.6 billion to 26.2 billion) and narrowing its comparable operating margin range outlook to 11.5% to 13% (previously 11.5% to 14%). The changes are related to Nokia’s Network Infrastructure and Mobile Networks business groups.
The weaker demand outlook in the second half is due to both the macro-economic environment and customers’ inventory digestion. Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 – notably in North America. There is also inventory normalization happening at customers after the supply chain challenges of the past two years.
Update to Nokia’s financial outlook for 2023
| Updated | Previous (as of Q1 results) | |
| Net sales1 | EUR 23.2 billion to EUR 24.6 billion (-4% to +2% constant currency growth) |
EUR 24.6 billion to EUR 26.2 billion (2% to 8% constant currency growth) |
| Comparable operating margin | 11.5% to 13% | 11.5% to 14% |
| Free cash flow conversion from comparable operating profit | 20% to 50% | 20% to 50% |
1 Assuming the rate 1 EUR = 1.09 USD as of 30 June 2023 continues for the remainder of 2023 along with actual H1 foreign exchange rates (adjusted from prior 1.09 USD rate as of 31 March 2023).
In the second quarter, based on its preliminary financials, Nokia expects to report net sales of approximately EUR 5.7 billion, flat year-on-year on a constant currency basis with a comparable operating margin of approximately 11%. Nokia’s operating profit in Q2 benefitted from approximately EUR 80 million related to catch-up net sales in Nokia Technologies.
Across the group Nokia has been proactively managing costs to protect profitability. As it progresses through this period of uncertainty Nokia will continue to take measures to ensure it remains on track towards its long-term targets of growing faster than the market and delivering a comparable operating margin of at least 14%.
Nokia will release its second quarter and half year 2023 financial results on Thursday 20 July 2023.