Nokia has now posted earnings for the first quarter of 2021 today. The highlights for the Q1 2021 are growth in sales, increase in operating margin and improvements in operating profit across all business groups.
Nokia Technologies net sales also increased by 5%. The increase in Nokia Technologies net sales is however attributed to higher patent licensing income and not due to any growth in the brand licensing income.
Here are the earning highlights for Q1 2021.
- Strong start to the year with constant currency net sales up 9% year-on-year, driven by strong growth in Network Infrastructure and solid growth in Mobile Networks; reported net sales increased 3%
- Enterprise constant currency net sales up 18% year-on-year, as we gained 63 new customers, more than doubling the number we added in Q1 2020; reported net sales increased 14%
- Comparable gross margin of 38.2% (reported 37.9%), reflecting improvements in Mobile Networks, mainly driven by 5G growth and favorable product and regional mix, and broad improvements across Network Infrastructure
- Comparable operating margin of 10.9% (reported 8.5%), with improvements in comparable operating profit across all business groups
- Comparable diluted EPS of EUR 0.07; reported diluted EPS of EUR 0.05
- Strong cash flow performance, driven by operating profit and good collection of receivables
- Solid liquidity position, with net cash of EUR 3.7bn and total cash of EUR 8.8bn
- Executing well on three-phased approach to achieve sustainable, profitable growth and technology leadership set out at Capital Markets Day
- Full year 2021 and 2023 outlook maintained
We have delivered a robust start to the year with strong net sales, operating margin and cash flow. Today’s results demonstrate that we are on track to deliver on our three-phased plan to achieve sustainable, profitable growth and technology leadership as announced at our recent Capital Markets Day.
I was particularly pleased by strong sales growth across our Network Infrastructure business group driven by increasing demand for next generation connectivity; good progress in Mobile Networks in securing full portfolio competitiveness; continued double-digit sales growth with our Enterprise customers; double-digit sales growth in North America; and good net sales development for Nokia Technologies.
At this point we are maintaining our Outlook for the full year, as we want to see how 2021 continues to develop. The solid first quarter provides a good foundation for achieving the higher end of the 7 to 10% comparable operating margin range. We expect our typical quarterly earnings seasonality to be less pronounced in 2021, and we continue to monitor overall market developments including visibility for semiconductor availability. I am proud of how we have continued to successfully deliver to our customers during the global semiconductor shortage.
I want to recognize all the hard work that the Nokia team has put in and thank them for delivering such a strong first quarter.