Company: NOKBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001104659-25-070159
Chunk: 2

Company: NOKIA CORP
Filing Date: 2025-07-24
Form: 6-K
Chunk 2
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 Markets Day in New York
on November 19.

Turning to our second quarter results, the significant currency fluctuations,
particularly the weaker USD, had a meaningful impact on both our net sales and operating profit. On a constant currency and portfolio
basis our overall net sales declined 1%, however excluding a settlement benefit in the prior year, sales would have grown 3%. Network
Infrastructure grew 8% in Q2. Mobile Networks’ net sales declined 13%, primarily related to the aforementioned prior year settlement
benefit and also due to project timing in India. Cloud and Network Services grew 14% with strong momentum in 5G Core. Nokia Technologies
grew 3% and secured several new agreements in the quarter.

Q2 comparable gross margin was stable year-on-year at 44.7%. Operating
profit in the quarter was impacted by a non-cash negative impact to venture funds of EUR 50 million which included a EUR 60 million negative
currency revaluation and the effect of tariffs we highlighted in Q1, contributing to our comparable operating margin declining 290 bps
to 6.6%. Despite the cash impact of 2024 incentives during Q2, we had a strong cash performance and have generated free cash flow of
over EUR 800 million in the first half.

Q2 saw continued strong order momentum in Optical Networks with a
book-to-bill well above 1, driven by new hyperscaler orders. We had several key wins in the quarter, including a deal with a large US
communication service provider along with receiving our first award for 800G pluggables from a US hyperscaler. Across the group, Nokia
generated 5% of sales in Q2 from hyperscalers. While we still have a lot of work ahead of us, I’m pleased with the progress
we are making integrating Infinera, including executing on synergies. Additionally, the commercial momentum we are seeing reinforces
the long-term value creation opportunity of the acquisition.

Looking ahead we expect a stronger second half performance, particularly
in Q4 consistent with normal seasonality. For the full year, the underlying business is trending largely as expected. We continue to
expect strong growth in Network Infrastructure, growth in Cloud and Network Services and largely stable net sales in Mobile Networks
on a constant currency and portfolio basis. In Nokia Technologies we expect approximately EUR 1.1 billion in operating profit.

However, we are facing two headwinds to our full year operating profit
outlook which are outside