Nokia Reports Improved Margins in Q1 as Transformation Efforts Take Hold
Nokia announced its first-quarter 2020 results, showing improved profitability driven by transformation and cost reduction efforts. The company noted a year-on-year increase in group-level non-IFRS operating margin.
Nokia Corporation reported its first-quarter 2020 financial results, highlighting improved profitability as its transformation and product cost reduction initiatives began to show effects. The company saw a year-on-year increase in its group-level non-IFRS operating margin, alongside growth in its Nokia Software and Nokia Enterprise segments.
President and CEO Rajeev Suri stated that the company made good progress in Mobile Access and cash generation during the quarter. While overall net sales saw a slight decline compared to the previous year, gross profit and non-IFRS operating profit increased. Nokia Software achieved significant margin improvements, and Nokia Enterprise delivered double-digit sales growth.
The company experienced an initial impact from the COVID-19 pandemic, with approximately €200 million in lost sales primarily due to supply chain disruptions in China. Nokia anticipates the majority of the pandemic's impact will be felt in the second quarter but believes the telecommunications industry is relatively resilient.
Nokia adjusted its full-year 2020 outlook to account for increased risks and uncertainties related to the ongoing pandemic. Despite the challenges, the company reported that its research and development roadmaps have remained on track, with some software releases proceeding ahead of schedule.