NSN sales slump in Q4 2013 and as full year revenues drop by 18%

Despite an increase in LTE sales in China, Europe and Asia Pacific and reduction in spending in GSM and core network infrastructure sees revenues decline in 2013

NSN sales slump in Q4 2013 and as full year revenues drop by 18%

Sales at NSN fell by 22% year-on-year in the fourth quarter of 2013 to Euro 3.1bn (£2.5bn), partly due to reduced infrastructure spending, particularly in GSM and core networks, which were only partially offset by increased LTE sales in China, Europe and Asia-Pacific. Sales for the quarter were up 20% on Q3 2013, however.

NSN said sales were also hit by divestments of non-core businesses, the exiting of some customer contracts and countries and negative foreign currency fluctuations. Operating profit for the quarter was Euro 243 million (£200m), a drop of 4% on Q4 2012, but up 46% on Q3 2013.

The mobile Mobile Broadband division accounted for sales of Euro 1.5bn (£1.2bn), down 12% on Q4 2013, but up 24% on Q3 2013. The Global Services division racked up sales of Euro 1.5bn (£1.2bn), down 22% on Q4 2012, but up 16% on Q3 2013.

Emerging markets proved to be the most lucrative for NSN with Asia-Pacific bringing in Euro 907 million (£746m), although sales were down 23% on the same quarter of 2014, but up 15% on Q3 2013.

NSN’s core home market of Europe saw a 21% fall in sales year-on-year in Q4 2014 to Euro 834 million (£686m), but a 19% rise on Q3 2013. Latin America saw sales of Euro 340 million (£279m), down 35% year-on-year.

The Middle East and Africa region took Euro 388 million (£277m), down 13% year-on-year, while North American sales fell 38% year-on-year to Euro 263 million (£216m). The only region to see positive growth year-on-year was Greater China, up 2% to Euro 424 million (£348m).

2013 full year results

For the full year in 2013, NSN saw sales fall by 18% year-on-year to Euro 11.2bn (£9.2bn) from Euro 13.7bn (£11.3bn) in 2012. However, the company saw a major improvement in profitability in 2013 after producing an operating profit of Euro 420 million (£345m) compared with a loss of Euro 795 million (£654m) in 2012.

NSN will make the bulk of parent company Nokia’s revenues on completion of the sale of its Devices and Services division to Microsoft for Euro 5.4bn (£4.4bn), which was announced on 3 September 2013. The deal is expected to close at the end of the first quarter of 2014.

NSN is continuing is global restructuring programme announced in November 2011. It is seeking to divest itself of non-core assets and reduce operating expenses and production overheads. So far, cumulative restructuring costs up to the end of Q4 2013 have reached Euro 1.8bn (£1.5bn). The are expected to total Euro 1.9bn (£1.6bn) by the end of 2014.

 See also:

ZTE expects to return to profitability in 2013

Huawei says ‘innovation’ is behind its 8% increase in sales for 2013


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