Nokia 2012 Annual Report Download - page 108

The following table sets forth the distribution by geographical area of our net sales for the fiscal years
2012 and 2011.
Year Ended December 31,
2012 2011
Europe ................................... 29% 31%
Middle East & Africa ......................... 14% 14%
Greater China .............................. 10% 17%
Asia-Pacific ................................ 27% 23%
North America ............................. 7% 4%
Latin America .............................. 13% 11%
Total ..................................... 100% 100%
The 10 markets in which we generated the greatest net sales in 2012 were, in descending order of
magnitude, China, India, Japan, the United States, Brazil, Germany, Russia, the United Kingdom,
Indonesia and Italy, together representing approximately 52% of total net sales in 2012. In comparison,
the 10 markets in which we generated the greatest net sales in 2011 were China, India, Brazil, Russia,
Germany, Japan, the United States, the United Kingdom, Italy and Spain, together representing
approximately 52% of total net sales in 2011.
Gross Margin
Our gross margin in 2012 was 27.8%, compared to 29.4% in 2011. The lower gross margin in 2012
resulted primarily from the decreased gross margin in Devices & Services compared to 2011, which
was partially offset by increased gross margin in Nokia Siemens Networks.
Operating Expenses
Our research and development (“R&D”) expenses were EUR 4 782 million in 2012, compared to
EUR 5 584 million in 2011. Research and development costs represented 15.8% of our net sales in
2012 compared to 14.4% in 2011. The increase in research and development expenses as a
percentage of net sales largely resulted from a relative decline in net sales in 2012. Research and
development expenses included purchase price accounting items of EUR 378 million in 2012
compared to EUR 412 million in 2011. At December 31, 2012, we employed 27 551 people in research
and development, representing approximately 28% of our total workforce.
In 2012, our selling and marketing expenses were EUR 3 205 million, compared to EUR 3 769 million
in 2011. Selling and marketing expenses represented 10.6% of our net sales in 2012 compared to
9.8% in 2011. The increase in selling and marketing expenses as a percentage of net sales reflected a
decline in net sales in 2012. Selling and marketing expenses included purchase price accounting items
of EUR 314 million in 2012 compared to EUR 422 million in 2011.
Administrative and general expenses were EUR 959 million in 2012, compared to EUR 1 085 million in
2011. Administrative and general expenses were equal to 3.2% of our net sales in 2012 compared to
2.8% in 2011. The increase in administrative and general expenses as a percentage of net sales
reflected a decline in net sales in 2012. Administrative and general expenses included no purchase
price accounting items in 2012 compared to EUR 1 million in 2011.
In 2012, other income and expenses included restructuring charges of EUR 1 807 million, including
EUR 42 million related to country and contract exits, impairments of assets of EUR 32 million, a
negative adjustment of EUR 4 million to purchase price allocations related to the final payment from
Motorola, amortization of acquired intangible assets of EUR 23 million, benefit from cartel claim
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