Sales fall by 17% at Nokia Siemens Networks in Q2 2013

Sales decrease attributed top divestment of non-core businesses, exit from certain contracts and countries and reduced wireless infrastructure deployment activity hitting Mobile Broadband and Global Services divisions

Sales fall by 17% at Nokia Siemens Networks in Q2 2013

Net sales at Nokia Siemens Networks fell by 17% year on year for the second quarter of 2013, according to figures out today (18 July 2013). Net sales totalled Eur 2.7bn (£2.3bn) and were down 1% on the previous quarter. Global Services accounted for approximately 52% of net sales and Mobile Broadband 46% .

NSN attributes the decline to the divestment of some non-core businesses and the exiting from certain customer contracts and countries. Excluding these two factors, net sales fell by 11% due to a decline in wireless infrastructure deployment activity, which affected both the Global Services and Mobile Broadband divisions. The latter was also hit by lower GSM and Voice and IP transformation sales, which were only partially offset by higher LTE sales.

The company posted a net operating profit of Eur 8 million (£6.8m), a marked improvement on the loss of Eur 226 million (£194.6m) in Q2 2012. Non-IFRS figures, which NSN sees as more indicative of the underlying performance of the company, showed an operating profit of Eur 328 million (£282.4 million), up from Eur 28 million (£24.1m) a year ago.

NSN noted that the company achieved an underlying profitability for the fifth consecutive quarter. NSN had an operating margin of 0.3% (Q2 13: -6.8%), while the non-IFRS figure stood at 11.8% (Q2 13: 0.8%).

Regionally, NSN saw sales fall in every region except North America, where sales rose by 16% to Eur 348 million, but they were down 18% on Q1 2013.

The Asia-Pacific region was the company’s largest area by revenue with net sales of Eur 784 million, down 24% on the year and 10% on the previous quarter. Europe was next at Eur 775 million, down 22% on Q2 2013, but up 6% on Q1 2013.

Sales in Latin America dropped by 9% year on year to Eur 346 million (up 17% on Q1 2013), while Middle East and Africa fell 12% to Eur268 million 9Up 3% on Q1 20130 and Greater China saw sales decline by 24% to Eur 260 million, but this was up by 17% on Q1 2013.

NSN cost cutting and restructuring programme is continuing and it is now targeted to reduce its non-IFRS annualised operating expenses and production overheads by more than Eur 1.5 billion by the end of 2013, compared with the end of 2011. The previously announced target was Eur 1 billion.

On 1 July 2013, Nokia Group announced it would buy out Siemens’s 50% share in the Nokia Siemens Networks joint venture for Eur 1.7 billion. This is expected to close in Q3 2103.

See also: Nokia buys out Siemens stake in NSN joint venture for €1.7 billion

Ericsson year-on-year sales flat for second quarter of 2013

Huawei posts revenues of £12 billion for first half of 2013

ZTE revenues decline by 11.6% to £4 billion in the first half of 2013 

Alcatel-Lucent posts net losses of £768m in second quarter of 2013

Written by Wireless magazine
Wireless magazine

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