Nokia Siemens Networks turned in a strong showing in Q3 primarily due to higher sales of infrastructure equipment and slightly higher sales of services, partially offset by a decline in sales of business areas outside of the company's strategic focus. NSN also attributed its improved financial performance to gains from its restructuring program.
Commenting on the Q3 results, Stephen Elop, Nokia CEO, "…Nokia Siemens Networks had a remarkable quarter in which we achieved record profitability on a non-IFRS basis and the Nokia Siemens Networks cash balance increased for the fourth quarter in a row."
Some highlights:
- Nokia Siemens Networks net sales increased quarter-on-quarter and year-on-year to EUR 3.5 billion.
- Nokia Siemens Networks non-IFRS operating margin significantly improved quarter-on-quarter and year-on-year to 9.2% in Q3; company executing well on restructuring and strategy that focuses on key markets and product segments.
- Nokia Siemens Networks continues to target to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.
- Nokia Siemens Networks expects non-IFRS operating margin in the fourth quarter 2012 to be approximately positive 8%, plus or minus four percentage points.
- On a regional basis, the sequential growth was primarily due to higher net sales in Asia Pacific, most notably in Japan which saw strong growth in sales of both infrastructure equipment and services. This was partially offset by lower sales in Europe of both services and infrastructure equipment, particularly infrastructure equipment sales in Western Europe. In addition, sales of both services and infrastructure equipment in China also declined primarily due to ongoing technology transition.
- As for the restructuring, , NSN had approximately 60 600 employees at the end of Q3, a reduction of approximately 14 300 compared to third quarter 2011, and approximately 2 700 compared to second quarter 2012. The company recognized restructuring charges and other associated items of EUR 74 million related to this restructuring program during Q3, resulting in cumulative charges of approximately EUR 1.0 billion. In total, Nokia Siemens Networks expects cumulative restructuring charges of approximately EUR 1.2 billion related to this restructuring program before the end of 2012.
