Segment information

12 Months Ended

Dec. 31, 2023

Disclosure of operating segments [abstract]

Segment information

2.2. Segment information

Accounting policies

Nokia has four operating and reportable segments for

financial reporting purposes: (1) Network Infrastructure,

(2) Mobile Networks, (3) Cloud and Network Services

and (4) Nokia Technologies. In addition, Nokia provides

net sales disclosure for the following business

divisions within the Network Infrastructure segment:

(i) IP Networks, (ii) Optical Networks, (iii) Fixed Networks

and (iv) Submarine Networks.

The President and CEO is the chief operating decision-

maker monitoring the operating results of segments

for the purpose of assessing performance and making

decisions about resource allocation. Key financial

performance measures of the segments comprise

primarily net sales and segment operating profit.

The evaluation of segment performance and allocation

of resources is primarily based on segment operating

profit which the management believes is the most

relevant measure for this purpose. Segment operating

profit excludes intangible asset amortization and

other purchase price fair value adjustments, goodwill

impairments, restructuring-related charges and certain

other items of income and expenses that may not be

indicative of the business operating results.

Accounting policies of the segments are the same as

those for the Group except for the aforementioned

items of income and expenses that are not allocated to

the segments. Inter-segment revenues and transfers are

accounted for as if the revenues were to third parties,

that is, at current market prices.

Segment descriptions

Network Infrastructure

The Network Infrastructure segment serves communications

service providers, enterprises, webscales and public sector

customers. It comprises the following business divisions:

(i) IP Networks, which provides IP networks and services

for residential, mobile, enterprise and cloud applications;

(ii) Optical Networks, which provides optical transport

networks for metro, regional, and long-haul applications, and

collaborates with Submarine Networks on subsea applications;

(iii) Fixed Networks, which provides fiber, fixed wireless access

and copper technologies; and (iv) Submarine Networks,

which offers undersea cable transmission.

Mobile Networks

The Mobile Networks segment creates products and services

covering all mobile technology generations. Its portfolio

includes products for radio access networks (RAN) and

microwave radio (MWR) links for transport networks, and

solutions for network management, as well as network

planning, optimization, network deployment and technical

support services.

Cloud and Network Services

The Cloud and Network Services segment is built around

software and the cloud and is focused on driving leadership

in cloud-native software and as-a-service delivery models,

as demand for critical networks accelerates; and has strong

market positions in communications software, private wireless

networks, and cognitive (or intelligent) services. The Cloud

and Network Services portfolio encompasses core network

solutions, including both voice and packet core; business

applications covering areas like security, automation, and

monetization; cloud and cognitive services; and enterprise

solutions covering private wireless and industrial automation.

Nokia Technologies

Nokia Technologies segment monetizes Nokia’s intellectual

property, including patents, technologies and the Nokia brand,

building on Nokia’s continued innovation leadership, long-term

investment into research and development, and decades of

driving technology standards development. The majority of net

sales and related costs and expenses attributable to licensing

and patenting the patent portfolio of Nokia is recorded in

Nokia Technologies, while each segment separately records

its own research and development expenses.

Group Common and Other

Despite not being a reportable segment, Nokia also provides

segment-level information for Group Common and Other.

Group Common and Other includes Radio Frequency Systems

which is managed as a separate entity. In addition, Group

Common and Other includes certain corporate-level and

centrally managed operating expenses, as well as fair value

gains and losses on investments in venture funds, including

investments managed by NGP Capital.

Segment results

EURm	Network Infrastructure(1)	Mobile Networks	Cloud and Network Services	Nokia Technologies	Group Common and Other	Eliminations and unallocated items(2)	Nokia Group
2023
Net sales to external customers	8 039	9 791	3 219	1 085	124	—	22 258
Net sales to other segments	(2)	6	1	—	6	(11)	—
Operating profit/(loss)	1 054	723	255	734	(391)	(687)	1 688
Share of results of associated companies and joint ventures	—	(30)	7	12	—	(28)	(39)
Financial income and expenses							(150)
Profit before tax							1 499
Other segment items
Depreciation and amortization	(235)	(366)	(81)	(39)	(14)	(352)	(1 087)
2022
Net sales to external customers	9 044	10 658	3 350	1 583	276	—	24 911
Net sales to other segments	3	13	1	12	19	(48)	—
Operating profit/(loss)	1 102	940	177	1 208	(318)	(791)	2 318
Share of results of associated companies and joint ventures	—	(11)	6	(8)	—	(13)	(26)
Financial income and expenses							(108)
Profit before tax							2 184
Other segment items
Depreciation and amortization	(229)	(347)	(91)	(34)	(28)	(411)	(1 140)
2021
Net sales to external customers	7 673	9 711	3 088	1 490	240	—	22 202
Net sales to other segments	1	6	1	12	17	(37)	—
Operating profit/(loss)	784	765	166	1 185	(125)	(617)	2 158
Share of results of associated companies and joint ventures	(1)	6	6	(2)	—	—	9
Financial income and expenses							(241)
Profit before tax							1 926
Other segment items
Depreciation and amortization	(208)	(338)	(95)	(33)	(30)	(391)	(1 095)

(1)Includes IP Networks net sales of EUR 2 606 million (EUR 3 063 million in 2022 and EUR 2 679 million in 2021), Optical Networks net sales of EUR 1 942 million (EUR 1 891 million

in 2022 and EUR 1 708 million in 2021), Fixed Networks net sales of EUR 2 369 million (EUR 2 943 million in 2022 and EUR 2 358 million in 2021) and Submarine Networks net

sales of EUR 1 120 million (EUR 1 150 million in 2022 and EUR 929 million in 2021).

(2)Unallocated items comprise costs related to intangible asset amortization, restructuring-related charges, impairments and certain other items.

Material reconciling items between total segment

operating profit and operating profit for the Group

EURm	2023	2022	2021
Total segment operating profit	2 375	3 109	2 775
Restructuring and associated charges	(356)	(177)	(263)
Amortization of acquired intangible assets	(352)	(411)	(391)
Costs associated with country exit	49	(98)	—
Impairment and write-off of assets, net of reversals	(25)	(97)	(45)
Settlement of legal disputes	—	—	80
Gain on sale of fixed assets	—	—	53
Other	(3)	(8)	(51)
Operating profit for the Group	1 688	2 318	2 158

Information by geographies and customer

concentration

Net sales to external customers by country

EURm	2023	2022	2021
Finland	1 192	1 697	1 605
United States	5 373	7 949	6 791
India	2 835	1 283	1 022
France	792	862	847
Great Britain	786	759	650
Other	11 280	12 361	11 287
Total	22 258	24 911	22 202

Net sales to external customers by country are based on the

location of the customer, except for Nokia Technologies IPR

and licensing net sales which are allocated to Finland.

Major customers

As is typical for our industry, Nokia’s net sales are largely driven

by multi-year customer agreements with a limited number of

significant customers. In 2023, no single customer represented

more than 10% of net sales. In 2022, net sales to the largest

customer were 10% and in 2021, 11% of net sales to external

customers. Net sales to the largest customer were reported

by Network Infrastructure, Mobile Networks and Cloud and

Network Services, as well as Group Common and Other.

Non-current assets by country

EURm	2023	2022
Finland	1 549	1 365
United States	4 383	5 032
France	2 139	2 180
Other	1 376	1 297
Total	9 447	9 874

Non-current assets consists of goodwill, other intangible

assets, property, plant and equipment and right-of-use assets.