SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a -16 or 15d -16 of

the Securities Exchange Act of 1934

 

Report on Form 6-K dated April 20, 2005

 

Nokia Corporation

Nokia House

Keilalahdentie 4

02150 Espoo

Finland

(Name and address of registrant’s principal executive office)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

Form 20-F  ý      Form 40-F  o

 

Enclosures:

 

1.                                                                  Nokia Press Release dated April 20, 2005 and titled:

New IFRS standards and their impact on Nokia 2004 and future accounts

 

 



 

 

press release

 

 

 

 

 

20.4.2005

 

New IFRS standards and their impact on Nokia 2004 and future accounts

 

International Financial Reporting Standards (IFRS) were subject to changes as of January 1, 2005. The following covers those rules applicable to Nokia. The total impact of the changes resulting from the retrospective implementation of the new rules to Nokia’s 2004 financial accounts were an increase of EUR 104 million on net sales, and a net decrease of EUR 4 million on operating profit. These result from the changes in IFRS 2 and IAS 39 Revised.

 

IFRS 2:  Share-based payments

 

IFRS 2 requires companies to recognize the cost of share-based awards to employees over the grant date to vesting date. The standard applies to awards granted since November 7, 2002 and not yet vested by January 1, 2005. The cost is assessed on a fair value basis using an option pricing model.

 

For the Nokia 2004 accounts, this applies only to the 2003 stock option, and 2004 stock option, performance share and restricted share plans. The retrospective implementation of this change reduced the year 2004 operating profit by EUR 62 million.

 

The impact of this new rule will be seen in all relevant operating expenses lines.

 

IAS 39 Revised: Hedge accounting

 

IAS 39R no longer permits hedge accounting for treasury center foreign exchange netting, the method that Nokia has historically used to hedge foreign exchange risk. This change in the hedge accounting rules is retrospective for Nokia as an existing IFRS user.

 

The retrospective implementation of this change increased 2004 net sales by EUR 104 million and increased 2004 operating profit by EUR 58 million.

 

With effect from the beginning of this year, Nokia has revised its method of hedging foreign exchange risks to ensure hedge accounting treatment under the new rules.

 

IFRS 3: Business combinations, IAS 36 Revised: Impairment of assets, and IAS 38 Revised: Intangible assets

 

IFRS 3 calls for the discontinuation of goodwill amortization. IFRS 3 had no retrospective impact on Nokia’s 2004 financial accounts. At December 31, 2004 Nokia had EUR 90 million of goodwill on its balance sheet, which in the future will not be amortized, but will be subject to an annual impairment test in accordance with IAS 36R.

 

The impact of the retrospective implementation of IFRS 2 and IAS 39R on Nokia’s 2004 financial accounts can be found in the following tables.

 

1



 

IMPACT OF RETROSPECTIVE IMPLEMENTATION OF IFRS 2 AND IAS 39R

 

CONSOLIDATED PROFIT AND LOSS ACCOUNT, IFRS, EUR million (unaudited)

 

 

 

Previously

 

Impact of

 

 

 

 

 

reported

 

IFRS 2 &

 

Revised

 

 

 

1-3/2004

 

IAS 39 R

 

1-3/2004

 

 

 

 

 

 

 

 

 

Net sales

 

6 625

 

-277

 

6 348

 

Cost of sales

 

-3 943

 

171

 

-3 772

 

Research and development expenses

 

-855

 

-9

 

-864

 

Selling and marketing expenses

 

-517

 

-3

 

-520

 

Administrative, general and other expenses

 

-148

 

-1

 

-149

 

Amortization of goodwill

 

-24

 

 

 

-24

 

 

 

 

 

 

 

 

 

Operating profit

 

1 138

 

-119

 

1 019

 

Share of results of associated companies

 

-4

 

 

 

-4

 

Financial income and expenses

 

76

 

 

 

76

 

 

 

 

 

 

 

 

 

Profit before tax and minority interests

 

1 210

 

-119

 

1 091

 

Tax

 

-385

 

32

 

-353

 

 

 

 

 

 

 

 

 

Profit before minority interests

 

825

 

-87

 

738

 

Profit attributable to minority interests

 

-9

 

 

 

-9

 

 

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

816

 

-87

 

729

 

 

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

 

 

Basic

 

0.17

 

-0.01

 

0.16

 

Diluted

 

0.17

 

-0.01

 

0.16

 

 

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

 

 

Basic

 

4 679 708

 

 

 

4 679 708

 

Diluted

 

4 683 116

 

 

 

4 683 116

 

 

 

 

 

 

 

 

 

 

2



 

 

 

Previously

 

Impact of

 

 

 

Previously

 

Impact of

 

 

 

 

 

reported

 

IFRS 2 &

 

Revised

 

reported

 

IFRS 2 &

 

Revised

 

 

 

4-6/2004

 

IAS 39 R

 

4-6/2004

 

1-6/2004

 

IAS 39 R

 

1-6/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

6 640

 

-177

 

6 463

 

13 265

 

-454

 

12 811

 

Cost of sales

 

-4 090

 

175

 

-3 915

 

-8 033

 

346

 

-7 687

 

Research and development expenses

 

-945

 

-12

 

-957

 

-1 800

 

-21

 

-1 821

 

Selling and marketing expenses

 

-673

 

-3

 

-676

 

-1 190

 

-6

 

-1 196

 

Administrative, general and other expenses

 

-91

 

-2

 

-93

 

-239

 

-3

 

-242

 

One-time item

 

90

 

 

 

90

 

90

 

 

 

90

 

Amortization of goodwill

 

-24

 

 

 

-24

 

-48

 

 

 

-48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

907

 

-19

 

888

 

2 045

 

-138

 

1 907

 

Share of results of associated companies

 

-6

 

 

 

-6

 

-10

 

 

 

-10

 

Financial income and expenses

 

135

 

 

 

135

 

211

 

 

 

211

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax and minority interests

 

1 036

 

-19

 

1 017

 

2 246

 

-138

 

2 108

 

Tax

 

-315

 

2

 

-313

 

-700

 

34

 

-666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before minority interests

 

721

 

-17

 

704

 

1 546

 

-104

 

1 442

 

Minority interests

 

-9

 

 

 

-9

 

-18

 

 

 

-18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

712

 

-17

 

695

 

1 528

 

-104

 

1 424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

0.15

 

 

0.15

 

0.33

 

-0.02

 

0.31

 

Diluted

 

0.15

 

 

0.15

 

0.33

 

-0.02

 

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

4 620 853

 

 

 

4 620 853

 

4 650 281

 

 

 

4 650 281

 

Diluted

 

4 625 693

 

 

 

4 625 693

 

4 655 703

 

 

 

4 655 703

 

 

3



 

 

 

Previously

 

Impact of

 

 

 

Previously

 

Impact of

 

 

 

 

 

reported

 

IFRS 2 &

 

Revised

 

reported

 

IFRS 2 &

 

Revised

 

 

 

7-9/2004

 

IAS 39 R

 

7-9/2004

 

1-9/2004

 

IAS 39 R

 

1-9/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

6 939

 

165

 

7 104

 

20 204

 

-289

 

19 915

 

Cost of sales

 

-4 410

 

-108

 

-4 518

 

-12 443

 

238

 

-12 205

 

Research and development expenses

 

-880

 

-11

 

-891

 

-2 680

 

-32

 

-2 712

 

Selling and marketing expenses

 

-578

 

-3

 

-581

 

-1 768

 

-9

 

-1 777

 

Administrative, general and other expenses

 

-139

 

-2

 

-141

 

-378

 

-5

 

-383

 

One-time item

 

20

 

 

 

20

 

110

 

 

 

110

 

Amortization of goodwill

 

-24

 

 

 

-24

 

-72

 

 

 

-72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

928

 

41

 

969

 

2 973

 

-97

 

2 876

 

Share of results of associated companies

 

-6

 

 

 

-6

 

-16

 

 

 

-16

 

Financial income and expenses

 

78

 

 

 

78

 

289

 

 

 

289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax and minority interests

 

1 000

 

41

 

1 041

 

3 246

 

-97

 

3 149

 

Tax

 

-324

 

-16

 

-340

 

-1 024

 

18

 

-1 006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before minority interests

 

676

 

25

 

701

 

2 222

 

-79

 

2 143

 

Minority interests

 

-16

 

 

 

-16

 

-34

 

 

 

-34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

660

 

25

 

685

 

2 188

 

-79

 

2 109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

0.14

 

0.01

 

0.15

 

0.47

 

-0.01

 

0.46

 

Diluted

 

0.14

 

0.01

 

0.15

 

0.47

 

-0.01

 

0.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

4 564 585

 

 

 

4 564 585

 

4 621 507

 

 

 

4 621 507

 

Diluted

 

4 572 177

 

 

 

4 572 177

 

4 628 256

 

 

 

4 628 256

 

 

4



 

 

 

Previously

 

Impact of

 

 

 

Previously

 

Impact of

 

 

 

 

 

reported

 

IFRS 2 &

 

Revised

 

reported

 

IFRS 2 &

 

Revised

 

 

 

10-12/2004

 

IAS 39 R

 

10-12/2004

 

1-12/2004

 

IAS 39 R

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

9 063

 

393

 

9 456

 

29 267

 

104

 

29 371

 

Cost of sales

 

-5 690

 

-284

 

-5 974

 

-18 133

 

-46

 

-18 179

 

Research and development expenses

 

-1 053

 

-11

 

-1 064

 

-3 733

 

-43

 

-3 776

 

Selling and marketing expenses

 

-784

 

-3

 

-787

 

-2 552

 

-12

 

-2 564

 

Administrative, general and other expenses

 

-193

 

-2

 

-195

 

-571

 

-7

 

-578

 

One-time item

 

38

 

 

 

38

 

148

 

 

 

148

 

Amortization of goodwill

 

-24

 

 

 

-24

 

-96

 

 

 

-96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

1 357

 

93

 

1 450

 

4 330

 

-4

 

4 326

 

Share of results of associated companies

 

-10

 

 

 

-10

 

-26

 

 

 

-26

 

Financial income and expenses

 

116

 

 

 

116

 

405

 

 

 

405

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax and minority interests

 

1 463

 

93

 

1 556

 

4 709

 

-4

 

4 705

 

Tax

 

-411

 

-29

 

-440

 

-1 435

 

-11

 

-1 446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before minority interests

 

1 052

 

64

 

1 116

 

3 274

 

-15

 

3 259

 

Minority interests

 

-33

 

 

 

-33

 

-67

 

 

 

-67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to equity holders of the parent

 

1 019

 

64

 

1 083

 

3 207

 

-15

 

3 192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share, EUR

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

0.23

 

0.01

 

0.24

 

0.70

 

-0.01

 

0.69

 

Diluted

 

0.23

 

0.01

 

0.24

 

0.70

 

-0.01

 

0.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares (1 000 shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

4 508 880

 

 

 

4 508 880

 

4 593 196

 

 

 

4 593 196

 

Diluted

 

4 516 591

 

 

 

4 516 591

 

4 600 337

 

 

 

4 600 337

 

 

5



 

IMPACT OF RETROSPECTIVE IMPLEMENTATION OF IAS 39R

 

NET SALES BY QUARTER 2004

 

Previously reported Net Sales

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

4 251

 

4 167

 

4 429

 

5 660

 

18 507

 

Multimedia

 

776

 

739

 

914

 

1 230

 

3 659

 

Enterprise Solutions

 

189

 

189

 

172

 

280

 

830

 

Networks

 

1 415

 

1 576

 

1 470

 

1 906

 

6 367

 

Eliminations

 

-6

 

-31

 

-46

 

-13

 

-96

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

6 625

 

6 640

 

6 939

 

9 063

 

29 267

 

 

Impact of adopting IAS 39R

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

-171

 

-117

 

91

 

211

 

14

 

Multimedia

 

-32

 

-10

 

17

 

42

 

17

 

Enterprise Solutions

 

-5

 

-4

 

3

 

15

 

9

 

Networks

 

-69

 

-46

 

54

 

125

 

64

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

-277

 

-177

 

165

 

393

 

104

 

 

Revised Net Sales

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

4 080

 

4 050

 

4 520

 

5 871

 

18 521

 

Multimedia

 

744

 

729

 

931

 

1 272

 

3 676

 

Enterprise Solutions

 

184

 

185

 

175

 

295

 

839

 

Networks

 

1 346

 

1 530

 

1 524

 

2 031

 

6 431

 

Eliminations

 

-6

 

-31

 

-46

 

-13

 

-96

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

6 348

 

6 463

 

7 104

 

9 456

 

29 371

 

 

6



 

IMPACT OF RETROSPECTIVE IMPLEMENTATION OF IFRS 2 AND IAS 39R

 

OPERATING PROFIT BY QUARTER 2004

 

Previously reported Operating Profit

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

1 089

 

797

 

822

 

1 060

 

3 768

 

Multimedia

 

2

 

-74

 

87

 

164

 

179

 

Enterprise Solutions

 

-31

 

-59

 

-66

 

-43

 

-199

 

Networks

 

182

 

255

 

181

 

260

 

878

 

Common Group Functions

 

-104

 

-12

 

-96

 

-84

 

-296

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

1 138

 

907

 

928

 

1 357

 

4 330

 

 

Impact of adopting IFRS 2

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

-2

 

-2

 

-2

 

-2

 

-8

 

Multimedia

 

-2

 

-3

 

-2

 

-3

 

-10

 

Enterprise Solutions

 

-2

 

-3

 

-2

 

-2

 

-9

 

Networks

 

-4

 

-6

 

-6

 

-6

 

-22

 

Common Group Functions

 

-3

 

-3

 

-4

 

-3

 

-13

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

-13

 

-17

 

-16

 

-16

 

-62

 

 

Impact of adopting IAS 39R

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

-58

 

7

 

28

 

49

 

26

 

Multimedia

 

-22

 

13

 

8

 

7

 

6

 

Enterprise Solutions

 

-2

 

-

 

-1

 

1

 

-2

 

Networks

 

-24

 

-22

 

22

 

52

 

28

 

Common Group Functions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

-106

 

-2

 

57

 

109

 

58

 

 

Revised Operating Profit

 

 

 

1-3/2004

 

4-6/2004

 

7-9/2004

 

10-12/2004

 

1-12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

Mobile Phones

 

1 029

 

802

 

848

 

1 107

 

3 786

 

Multimedia

 

-22

 

-64

 

93

 

168

 

175

 

Enterprise Solutions

 

-35

 

-62

 

-69

 

-44

 

-210

 

Networks

 

154

 

227

 

197

 

306

 

884

 

Common Group Functions

 

-107

 

-15

 

-100

 

-87

 

-309

 

 

 

 

 

 

 

 

 

 

 

 

 

Nokia Group

 

1 019

 

888

 

969

 

1 450

 

4 326

 

 

7



 

It should be noted that certain statements herein which are not historical facts, including, without limitation, those regarding: A) the timing of product and solution deliveries; B) our ability to develop, implement and commercialize new products, solutions and technologies; C) expectations regarding market growth, developments and structural changes; D) expectations and targets for our results of operations; E) the outcome of pending and threatened litigation; and F) statements preceded by “believe,” expect,” “anticipate,” “foresee,” “target,” “designed” or similar expressions are forward-looking statements. Because these statements involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors that could cause these differences include, but are not limited to: 1) the extent of the growth of the mobile communications industry and the new market segments in which we have recently invested; 2) price erosion; 3) timing and success of the introduction and roll-out of new products and solutions; 4) competitiveness of our product portfolio; 5)  our failure to identify key market trends and to respond timely and successfully to the needs of our customers; 6)  the impact of changes in technology and the success of our product and solution development; 7) the intensity of competition in the mobility industry and changes in the competitive landscape; 8) our ability to control the variety of factors affecting our ability to reach our targets and give accurate forecasts; 9) the availability of new products and services by network operators and other market participants; 10) general economic conditions globally and in our most important markets; 11) our success in maintaining efficient manufacturing and logistics as well as the high quality of our products and solutions; 12)  inventory management risks resulting from shifts in market demand; 13) our ability to source quality components without interruption and at acceptable prices; 14) our success in collaboration arrangements relating to technologies, software or new products and solutions; 15) the success, financial condition, and performance of our collaboration partners, suppliers and customers; 16) any disruption to information technology systems and networks that our operations rely on; 17) our ability to have access to the complex technology involving patents and other intellectual property rights included in our products and solutions at commercially acceptable terms and without infringing any protected intellectual property rights; 18) our ability to recruit, retain and develop appropriately skilled employees; 19) developments under large, multi-year contracts or in relation to major customers; 20) exchange rate fluctuations, including, in particular, fluctuations between the euro, which is our reporting currency, and the US dollar, the UK pound sterling and the Japanese yen; 21) the management of our customer financing exposure; and 22) the impact of changes in government policies, laws or regulations; as well as 23) the risk factors specified on pages 12-22 of the company’s Form 20-F for the year ended December 31, 2004 under “Item 3.D Risk Factors.”

 

Media and Investor Contacts:

 

Corporate Communications, tel. +358 7180 34900

Investor Relations Europe, tel. +358 7180 34289

Investor Relations US, tel. +1 914 368 0555

www.nokia.com

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Nokia Corporation, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Date: April 20, 2005

Nokia Corporation

 

 

 

 

 

By:

/s/ Ursula Ranin

 

 

 

Name: Ursula Ranin

 

 

Title:   Vice President, General Counsel

 

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