Nokia 2014 Annual Report Download - page 78

76 NOKIA IN 2014
Risk factors
Set forth below is a description
ofrisk factors that could aect
Nokia. There may be, however,
additional risks unknown to
Nokiaand other risks currently
believed to be immaterial that
could turn out to be material.
These risks, either individually or together,
could adversely aect our business, sales,
protability, results of operations, nancial
condition, costs, expenses, liquidity, market
share, brand, reputation and share price from
time to time. Unless otherwise indicated or
the context otherwise provides, references in
these risk factors to “Nokia”, “we”, “us” and
“our” mean Nokia’s consolidated operating
segments and refer to Continuing operations.
We describe the risks that aect the Nokia
Group or are relevant to all Nokia businesses
at the beginning of this section and provide
information on additional risks that are
primarily related to the individual Nokia
business: Nokia Networks, HERE and Nokia
Technologies, and are detailed separately
under their respective headings below.
This annual report also contains
forward-looking statements that involve
risksand uncertainties presented in
“Forward-looking statements” below.
Risks relating to Nokia
■Nokia’s strategy to be a leader in
technologies of the Programmable World,
which is subject to various risks and
uncertainties, including that Nokia may
notbe able to sustain or improve the
operational and financial performance
ofitsbusinesses or that Nokia may not be
able to correctly identify or successfully
pursue business opportunities.
■We may be adversely affected by general
economic and market conditions.
■We are a company with global operations
and with sales derived from various
countries, exposing us to risks related to
regulatory, political or other developments
in various counties or regions.
■Our products, services and business
models depend on IPR on technologies that
we have developed as well as technologies
that are licensed to us by certain third
parties. As a result, evaluating the rights
related to the technologies we use or intend
to use is increasingly challenging, and we
expect to continue to face claims that we
could have allegedly infringed third parties’
IPR. Theuseof these technologies may also
result inincreased licensing costs for us,
restrictions on our ability to use certain
technologies in our products and/or costly
and time-consuming litigation.
■We have operations in a number of
countries and, as a result, face complex
tax issues and tax disputes and could
be obligated to pay additional taxes in
various jurisdictions.
■Our actual or anticipated performance,
among other factors, could reduce our
ability to utilize our deferred tax assets.
■We may be unable to retain, motivate,
develop and recruit appropriately
skilled employees.
■If any of the companies we partner and
collaborate with were to fail to perform
as expected or if we fail to achieve the
collaboration or partnering arrangements
needed to succeed, we may not be able to
bring our products, services or technologies
to market successfully or in a timely
manner or our operations could be
affected adversely.
■Our net sales, costs and results of
operations, as well as the US dollar value
of our dividends and market price of our
American Depositary Shares (“ADSs”),
are affected by exchange rate fluctuations,
particularly between the euro, which is
our reporting currency, and the US dollar,
the Japanese yen and the Chinese yuan,
as well as certain other currencies.
■An unfavorable outcome of litigation,
contract-related disputes or allegations
ofhealth hazards associated with our
businesses could have a material adverse
effect on our us.
■Our operations rely on the efficient and
uninterrupted operation of complex and
centralized information technology systems
and networks and certain personal and
consumer data is stored as part of our
business operations. If a system or
networkinefficiency, cybersecurity breach,
malfunction or disruption occurs, this
couldhave a material adverse effect on
ourbusiness and results of operations.
■We may not be able to achieve targeted
benefits from or successfully implement
planned transactions, such as acquisitions,
divestments, mergers or joint ventures,
forinstance due to issues in successfully
selecting the targets or failure to execute
transactions or due to unexpected liabilities
associated with such transactions.
■Our efforts aimed at managing and
improving financial or operational
performance, cost savings and
competitiveness may not lead to targeted
results or improvements.
■We may not be able to optimize our capital
structure as planned and re-establish
our investment grade credit rating.