Nokia 2015 Annual Report Download - page 15

Business overview
13NOKIA IN 2015
“Our acquisition of
Alcatel Lucent is an
industry-changing event
and opens exciting new
opportunities for us
andour customers.
Itenables us to pursue
our vision toexpand the
human possibilities of
the connected world.”
Nokia Networks recorded a 2015 net sales
increase of 3%, and we kept our focus on
delivering strong protability despite market
conditions. In that vein, Nokia Networks’ gross
margin in the nal quarter of the year was an
excellent 39.6%, our third consecutive
quarter above 39%.
Nokia Networks’ various highlights of 2015
included our announcement with China Mobile
in October for a comprehensive framework
agreement, valued at more than USD 1 billion
(EUR 930 million) for mobile communications
equipment and services.
Nokia Technologies’ net sales for the year
increased 77% to EUR 1.02 billion as a result
of revenue stemming from the positive
outcome of a multi-year patent arbitration
process with Samsung, with operating prot
similarly increasing 110% versus 2014.
The arbitration was focused on a portion of
the patent portfolio of Nokia Technologies.
There are a number of patents within Nokia
Technologies that were not covered and, of
course, we have separate patent portfolios
outside Nokia Technologies that were
excluded aswell.
Given this, we expect to have further
discussions with Samsung related to those
parts of our intellectual property that were
not covered by the arbitration. In time, we
believe that we will generate additional
revenue from Samsung in these areas.
In July, Nokia Technologies launched OZO,
therst commercially-available virtual reality
camera designed and built for professional
content creators, and the rst in a planned
portfolio of digital media products. We are
receiving rave reviews from Hollywood and
NASA amongst others, and are excited by OZO’s
prospects to transform the media landscape.
Sustainability and the year ahead
Finally, I am proud that our solid 2015 results
came while achieving our sustainability
objectives.
For example, we were more energy ecient
inour own operations and, as a result, our
greenhouse gas emissions from our oces
and factories around the world decreased by
12%, including our green electricity purchases.
And we launched our rst ‘zero CO2 emission’
base station site oering that alone cuts base
station site energy consumption and CO2
emissions by up to 70%, while remaining CO2
emissions can be reduced to zero by using
renewable energy sources.
In September, we were included in the Dow
Jones Sustainability Index in recognition
ofour economic, environmental and social
responsibility; and, in November, our
commitment to addressing climate change
was recognized by the CDP—a leading global
organization working with shareholders
andcompanies to disclose greenhouse gas
emissions of major corporations—as they
included us with a perfect score of 100 in
theirClimate Change A-list.
These are exciting times for the new Nokia.
Despite near-term challenges in our industry,
we are well positioned to deliver on the three
major opportunities that are ahead of us.
Firstly, the convergence between xed,
mobile, and IP and optical networks where
wehave the talent and expertise to deliver
exceptional new products and services to
ourcustomers. Secondly, the convergence
between the telecommunications world and
the IT world, where we are also well placed to
deliver game-changing solutions.
Finally, our end-to-end capability and cutting
edge research and innovation mean that we
are well positioned for the rising tide of IoT
products, services and business models. This
position will be reinforced as we move toward
a more exible network with 5G. This new
connected world will oer great potential
forall of us—individuals and businesses alike.
Byfocusing on, and expanding, the human
possibilities that this new world will create,
weare ideally placed for the future.
Rajeev Suri
President and CEO