Nokia Ar21 en

Nokia
in 2021
Overview
Nokia Business overview

Nokia in 2021
Letter from our President and CEO
Our strategy
02
04
10
14
in 2021
Our history 22
Customer Experience 24
Business groups 26
Mobile Networks 26
Network Infrastructure 29
Cloud and Network Services 32
Nokia Technologies 35
Supply chain, sourcing and manufacturing 38
Corporate governance 40
Corporate governance statement 42
Compensation 59
Board review 74
Business description 76
Board’s review 77
Selected financial data 78
Operating and financial review 79
Sustainability and corporate responsibility 90
Shares and shareholders 110
Articles of Association 114
Risk factors 116
Significant subsequent events 118
Key ratios 119
Alternative performance measures 120
Financial statements 124

Consolidated financial statements 126
Notes to consolidated financial statements 131
Parent Company financial statements 194
Notes to the Parent Company financial statements 198
Signing of the Annual Accounts and the

Review of the Board of Directors 2021 211
Auditor’s report 212
Auditor’s ESEF assurance report215
Other information 216

Forward-looking statements 218
Introduction and use of certain terms 219
Glossary220
Investor information 223
Contact information 224
NOKIA IN 2021 01
Business overview
Business Nokia in 2021

Our strategy
Our history
04
10
14
22
overview
Customer Experience 24
Business groups 26
Mobile Networks 26
Cloud and Network Services 32
Supply chain, sourcing and manufacturing 38
02 NOKIA IN 2021 NOKIA IN 2021 03

Business overview
Nokia in 2021
The platform
for our future
The Nokia platform guides Our purpose Our commitment Essentials
everything we do across
At Nokia, we create technology We deliver critical networks Our guiding principles for the
our global organization.
that helps the world act together. through technology leadership ways of working with and for
Its three elements shape
and trusted partnerships. Nokia are being open, fearless
our ambition, our strategy
and empowered.
and our culture.
While lives may be getting longer, healthier and richer, the world is Four strategic commitments define our role in an evolving market: We are continuously working to create a company culture
facing fundamental challenges: pressure on the planet is increasing, that is inclusive and our essentials lay the foundation of our
productivity is stalling and access to opportunity remains stubbornly ■ We are a trusted partner for critical networks cultural renewal that is required to deliver our purpose, our
unequal. Technology is central to the solution. ■ We focus on technology leadership in each of our businesses strategic commitment and to better serve our customers.
Our essentials reflect what we all want to experience.
With our customers, we create the critical networks that bring ■ We capture the value shift to cloud and new business models
together the world’s people, machines and devices, sensing ■ Open – in mindset, to opportunity, through/with transparency
and acting in real time. ■ We create value with long-term research and intellectual property
■ Fearless – bringing authenticity, sharing ideas and opinions,
embracing collaboration
■ Responding to climate change through more efficient use and
re-use of the world’s resources ■ Empowered – to make decisions, to act with clear accountability
■ Restoring productivity growth by bringing digital to the physical
industries it has not yet reached
■ Providing more inclusive access globally to work, healthcare,
markets and education
■ Meaningful interactions, to drive human progress
Read more on page 18. Read more on page 104.

Business overview
Nokia in 2021
Helping the world

act together
At Nokia, we create technology that helps the Today, the vast majority of the world’s
economy has not yet been digitalized,
Global reach Regional split of employees and net sales
Our technology solutions enable critical
world act together. leaving a lot of potential. Our products
and services can radically accelerate the
networks for communications service
providers (CSPs), enterprise verticals and
digitalization process, making operations
We have a responsibility to enable digitalization. safer, more connected and more efficient.
hyperscalers around the world.
We partner with our customers so our technology In 2021, we significantly reduced the carbon Europe Greater China
can help meet some of the most pressing

footprint of our products, which in turn Net sales in 2021
37 700 12 200
EUR 22.2bn
reduces the ecological impact of our North America
customers. Driving the acceleration of EUR 6 635m EUR 1 545m
challenges the world faces such as climate change, digitalization is critical for making industries 11 000 India
the digital divide and stalling productivity growth. more sustainable, offers significant business EUR 7 280m
opportunities and is key to addressing our
global challenges. Countries of operation Middle East & Africa 16 000
3 200
~130
EUR 1 039m
Through technology leadership and trusted
partnerships we are making a difference in EUR 1 915m Asia Pacific
the world. Latin America
Average number of employees in 2021 3 200 4 600

EUR 2 562m
~87 900
EUR 1 226m
Financial highlights Shareholder distributions Strengthening our Ethical business We announced our
technology leadership In February 2021, we were named for the
For the year ended 31 December,
Continuing operations
2021
EURm
2020
EURm
2019
EURm
Dividend per share proposed in respect fourth consecutive year (2018-2021), target to use 100%
of 2021(1) and the fifth time overall, as one of
Net sales 22 202 21 852 23 315 R&D investment over the past
renewable electricity
EUR 0.08
two decades the World’s Most Ethical Companies
Gross profit 8 834 8 193 8 264
by 2025.
EUR 130bn+
by Ethisphere.
Gross margin 39.8% 37.5% 35.4%
Operating profit 2 158 885 485 Read more about our sustainability and
corporate responsibility work on page 90.
Operating margin 9.7% 4.0% 2.1%
Share buyback program to return up to
Profit/(loss) for the year 1 654 (2 513) 18
EUR 600m
EUR EUR EUR Patent families declared as essential to 5G
4 000+
Earnings per share, diluted 0.29 (0.45) 0.00
Proposed dividend per share(1) 0.08 0.00 0.00
over 2 years
2021 2020 2019
As of 31 December EURm EURm EURm Nobel Prizes awarded for ground-breaking
Net cash and current financial investments 4 615 2 485 1 730 achievements in global innovation
9
(1) The Board of Directors proposes to the Annual General Meeting to be authorized to decide in its discretion on the distribution of an aggregate maximum of EUR 0.08 per share as dividend * “World’s Most Ethical Companies” and “Ethisphere” names
and/or equity repayment. and marks are registered trademarks of Ethisphere LLC.

Business overview
Nokia in 2021
Our business groups

Nokia’s renewed operating model is designed to enable the delivery of our
strategic ambitions, with a lean corporate center enabling fully accountable
business groups. Nokia has four business groups with each business group
aiming to become a technology and market leader in their respective sector.
Mobile Networks Network Infrastructure Cloud and Network Services Nokia Technologies
Mobile Networks provides products and services for radio access Network Infrastructure provides fiber, copper, fixed wireless Cloud and Network Services enables CSPs and enterprises to Nokia Technologies is responsible for managing Nokia’s
networks covering technologies from 2G to 5G, and microwave access technologies, IP routing, data center, subsea and terrestrial deploy and monetize 5G, cloud-native software and as-a-Service patent portfolio and monetizing Nokia’s intellectual property
radio links for transport networks. optical networks – along with related services – to customers delivery models. including patents, technologies and the Nokia brand.
including communications service providers, webscales
(including hyperscalers), digital industries and governments.
Segment net sales Segment net sales

(EURm) (EURm)
-7% +14% +0% +7%
11 327 7 674 3 327 1 487 1 502

10 398 6 903 3 087 3 089 1 402
11398
9 717
7674
6 736 3327 1502
0 0 0 0
2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Segment operating Segment operating

margin (%) margin (%)
+0 bps +340 bps +760 bps -120 bps
7.9% 7.9% 10.2% 5.4% 80.7% 80.1% 78.9%

7.9 10.2
4.1% 80.7
8.1%
6.8%
3.4%
(2.2)%
0.0 0.0 0.0
2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Read more on page 26. Read more on page 29. Read more on page 32. Read more on page 35.

Business overview
Letter from our

President and CEO
Press reset We refocused our cost base and stepped up cash generation and balance sheet put us
2021 was a transformational year for Nokia. our investments in key areas like 5G to in a position to look to reinstate shareholder
This was the year we hit the reset button. We strengthen our technology leadership. distributions through both a dividend and
restarted with a whole new operating model, a share buyback.
We adopted a new purpose: At Nokia, we
purpose, strategic commitments and create technology that helps the world act All our business groups made significant
cultural essentials. together. And we started the process of progress in 2021 to make us more
At our Capital Markets Day in March, we renewing our company culture around three competitive in all the markets in which we
launched a three-phase plan to reset, essentials: Open, fearless and empowered. compete. Mobile Networks largely closed the
accelerate and scale our business to help us gap with competition in 5G and improved its
I am pleased to say we made faster than gross margin while continuing to step up R&D
deliver on our commitments and return to expected progress against our plan this year,
sustainable, profitable growth. investments. Network Infrastructure extended
achieving improved competitiveness and its technology leadership and saw significant
The reset phase began with shifting our focus strengthened technology leadership. growth driven by Fixed Networks and
from an end-to-end approach to four fully Submarine Networks. Cloud and Network
accountable business groups, which aim for Strong financial and strategic Services took good steps to rebalance its
technology leadership in all the markets we performance portfolio and we saw encouraging growth
compete in. We put in place a simplified The changes put in place enabled us to deliver in its key focus areas. Nokia Technologies
operating model, led by a slimmed-down a strong financial performance in 2021 with delivered a strong performance and made
leadership team, with clear responsibilities improvements in net sales, gross and good progress expanding in areas such as
and ownership of their respective areas. operating margins. And the continued strong automotive and consumer electronics.
“ This was the year we hit the reset button. We restarted

with a whole new operating model, purpose, strategic
commitments and cultural essentials. Our new purpose
reflects both our current role and our ambition for the
future: At Nokia, we create technology that helps the
world act together. Considering the pace of our delivery
in 2021, we have created an excellent foundation to
move to the “accelerate” phase of our strategy to
deliver further growth and extend profitability.”
Pekka Lundmark, President and CEO

Business overview
continued
Technology leadership
There were several high-profile and
Network Infrastructure strengthened Nokia’s
leadership in IP routing and silicon innovation
Nokia Technologies achieved the important
milestone of 4 000 patent families declared as “ There’s no green without digital.
with the launch of FP5, the industry’s most essential for 5G standards. We filed more than
industry-leading product launches this year
as we ramped up our efforts to strengthen
advanced processor for service provider
IP networks. We also continued to drive the
1 500 patent applications, demonstrating our
strength and commitment to innovation, and
Nokia wants to lead the way on the
our technology leadership across all our
four business groups.
market in fiber and 5G fixed wireless access,
and in Optical Networks we started deploying
became one of the first companies to receive
ISO 9001 certification for our high-quality global stage in making the case for
digitalization as central to the
Mobile Networks launched our new AirScale our market-leading PSE-V coherent chipset to patent portfolio management.
5G portfolio, powered by our advanced give customers increased performance and
cost efficiency. Our Submarine Networks Additionally, our new Strategy and Technology
ReefShark System-on-Chip technology,
climate challenge.”
business remains the market leader and function launched the Nokia Technology
giving our customers enhanced capacity
is driving innovation in technology and Vision 2030 setting out the opportunities we
and connectivity while offering greater
customer solutions. expect to see from trends such as human
energy efficiency and ease of deployment.
augmentation and digital-physical fusion as
We made good progress against all our KPIs,
Cloud and Network Services strengthened we move from 5G to 5G-Advanced and then
including increasing the proportion of
our competitive advantage in private wireless 6G by the end of this decade.
our 5G shipments that are “5G Powered by
with the launch of MX Industrial Edge, a new
ReefShark” to 76% of all our 5G shipments in
December. This put us on track to achieve our
solution category that will enable on-premises Technology is central to solving
processing of a host of Industry 4.0 applications the biggest global challenges
target of 100% of all 5G product shipments by
and help customers accelerate their
the end of 2022. We also opened a new Open of our time
digitalization plans. We also launched our first
RAN testing and collaboration center in the
Software-as-a-Service products for our The stronger our technology the bigger
US, and announced partnerships with most
communications service provider customers, the role we can play as enablers of the
of the biggest hyperscalers for cloud-based
giving them more flexibility and ways to green transition. Digitalization can
5G radio solutions.
capture revenue. improve productivity, energy efficiency
and waste management across industries.
The vast majority of the world’s economy We also take seriously the role of connectivity
50-75%
Our latest AirScale and FP5 products can
has not yet been digitalized, leaving a lot of
potential. As we said at the COP26 climate
summit in November: “There’s no green
without digital.” Nokia wants to lead the way
in building a fairer and more inclusive world.
We aim to connect the unconnected and
support digital skills to close the digital divide,
providing equal access to opportunity. Our
improve energy efficiency by 50-75% on the global stage in making the case for ambition is to provide critical networks that
compared to previous generations digitalization as central to addressing the enable digital access to healthcare, education,
climate challenge. employment, social services, businesses and
100%
markets. One concrete example in 2021 was
We are committed to reducing emissions by connecting almost 100 schools across Kenya
50% across both our own operations and to enable digital learning.
products in use (so-called Scope 3) between
of the electricity to power our offices, 2019 and 2030. Our new recalibrated I am also proud that, for the fourth time in a
R&D labs and factories will come from science-based targets fulfill our commitment row, we were recognized as one of the World’s
renewable sources by 2025 to align with a 1.5°C global warming scenario. Most Ethical companies by the Ethisphere
And in 2021, Nokia also announced a new Institute.
target to purchase 100% of our electricity
from renewable sources by 2025 to power Looking ahead
our offices, R&D labs and factories. We also Overall, 2021 was a transformational year
became a founding member of the World for Nokia and one that created an excellent
Economic Forum’s First Movers Coalition, foundation for us to move into the “accelerate”
which targets greater uptake of zero-emissions phase of our strategy to deliver growth and
products and services by 2030. expand profitability.
We clearly demonstrated that sustainability is I am enormously grateful to the entire Nokia
core to our business and embedded into the team for helping us to successfully reset our
design, delivery and life cycle of our products business this year and making sure we fulfilled
and services. For instance, our latest AirScale our company purpose to create technology
and FP5 products can improve energy that helps the world act together.
efficiency by 50-75% compared to previous
generations. Improving performance and Pekka Lundmark
energy efficiency is a win-win financially and President and CEO
environmentally and a major driver for our
business as customers increasingly prioritize
In Oulu, Finland our controlled environment
sustainability when deciding on their partners.
enables multiple 5G customer use cases and
configurations to be tested at the same time.

Business overview
Our strategy
Our customers
Enterprise networks and mission-critical industrial
edge applications are key enablers. In the
Enterprise estimated TAM grew energy sector, networks allow for demand
by 9% to EUR 16 billion from management and grid automation.
and market view

In transportation, vehicle automation
2020 to 2021. and the automation of ports and hub
operations will further increase efficiency.
Enterprise TAM includes fast-growing
enterprise verticals and more mature
hyperscaler markets. Enterprise estimated
TAM grew by 9% to EUR 16 billion from 3 Hyperscalers
2020 to 2021. We forecast this market Hyperscaler refers to companies like Alphabet
to grow strongly at 9% CAGR until 2026. (Google), Amazon (Amazon Web Services),
“ Enterprise
Microsoft and Meta Platforms (Facebook)
We target three customer segments with our hardware, software that provide cloud solutions at a global scale,
2 Enterprise verticals
and services portfolio: Communications service providers, leveraging massive connected data centers.
enterprise verticals and hyperscalers.

estimated TAM An enterprise vertical represents a grouping
of companies by an industry (like energy or
Our TAM for hyperscalers consists of optical
networks and IP routing. Within optical
grew by 9% to transportation) that offers products and

services that meet specific needs of that
networks, we foresee that data center
interconnect (DCI) technology will be a
strong driver.
EUR 16 billion from industry. Within the enterprise verticals
segments, we primarily focus on Hyperscalers are not only a customer segment
transportation, energy, manufacturing, for Nokia. They also assume an increasingly
Networks play an increasingly important role
in the economy and throughout society to 1
Communications service
providers (CSPs)
CSPs have kept their capital expenditure
intensity flat, but increased their earnings 2020 to 2021.” logistics and the public sector. We project that
growth will be mainly driven by private wireless
important role in the telecommunication
domain and will become ecosystem partners
enable mission-critical functions for both before interest, taxes, depreciation and networks in manufacturing and logistics as and potential competitors. Hyperscalers
consumers and businesses. This allows amortization (EBITDA) by automation, well as energy. We estimate IP routing and target edge computing as the next growth
Nokia to expand its market opportunities The CSPs estimated total digitalization, shift in channel mix, outsourcing optical networks will grow moderately. engine for industrial automation workloads
for delivering critical networks. addressable market (TAM) grew and asset sales. We expect them to remain and low-latency applications. They partner
focused on the monetization of their The digitalization and automation of
with CSPs to co-locate edge stacks
Critical networks combine carrier-grade by 4% to EUR 98 billion from connectivity strengths and on cost operations across verticals accelerates
on-premise and at metro sites. Furthermore,
resilience, reliability and security with demand for critical networks. In manufacturing
webscale flexibility and elasticity. They are
2020 to 2021. optimization. CSPs continue to assess their they aim to run telco network workloads on
deployment architecture, asset structure, and logistics, the transition to software-centric
already in use today across industries like their cloud infrastructure. Hyperscalers
A communications service provider offers operating model and vendor relationships. operations and the adoption of industrial
precision manufacturing, remote surgery, and engage in the transformation of network
telecommunications services like voice and/or They are also considering the divestments clouds and operational technology (OT) edge
high-frequency trading. As we move ahead in operations with collaboration models and
data services through fixed and/or mobile of passive infrastructure and the transition will further increase efficiency. Private wireless
an era of digitalization, critical networks will services for 5G cloud deployments.
connectivity to consumers, enterprises, to network sharing models. In areas in
gain much more importance and reliability governments and other communications which the network is built for coverage
requirements will increase significantly. service providers. The CSPs estimated total this might reduce the demand for network
We target three customer segments addressable market grew by 4% to EUR 98 vendor equipment.
with our hardware, software and services billion from 2020 to 2021. We expect it to
grow only moderately at 1% compound CSPs nurture a more diverse supplier
portfolio: Communications service providers, ecosystem based on open architectures.
enterprise verticals and hyperscalers. annual growth rate (CAGR) 2021-26. We
project the total radio access network (RAN) Their aim is to broaden their supplier options
Additionally, we focus on licensees in selected and increase competition to strengthen
industries that benefit from the value of our market outside China to continue solid growth
their pricing power towards the network
innovations, primarily in the mobile devices,
automotive, consumer electronics and
during the same period. The market growth is
driven by strong 5G RAN demand, partially vendors. We have seen the first examples
of CSPs relying on hyperscalers to lead the
CSPs Verticals Hyperscalers
emerging IoT industries. offset by declining investments in 2G/3G and
LTE. IP routing and optical networks for CSPs transition to a cloud-based operational and
In this section, we outline the trends that are expected to grow slightly above, or at the business model. This introduces new players
we see in each of our customer segments. and increases competition for established Focus on connectivity Digitalization and Edge computing
rate of, the overall CSP market. CSP investment
Our analysis of the market evolution and in higher-speed access technologies (fiber network vendors. Lastly, geopolitics and strengths automation as growth engine – industrial automation
customer trends informs our strategy. environmental, social and governance (ESG) and cost optimization of operations in industrial segments workloads across on-premise, edge,
and fixed wireless access) continues to drive
criteria influence investment decisions. public cloud
investment in IP and optical layers to handle
the increasing demand. The 5G cycle will also Security and sovereignty have become Favoring cloud strengths Transition to
important factors in the vendor landscape. Partnering with CSPs
yield growth in software, namely in 5G Core
Government-funded broadband initiatives
in vendor and partner ecosystem software-centric to co-locate edge stacks and building
and in all software segments supporting 5G
influence the investments of CSPs, for operations and adoption of industrial an ecosystem for low-latency apps
operations and monetization.
example in rural areas and support the
Network monetization clouds and OT edge
targeting enterprise and edge
emergence of neutral hosts. ESG factors Targeting telco and network
drive green energy use, energy consumption
use cases Energy and manufacturing workloads to run on their cloud
reduction plans and circular economy as early adopters of private wireless infrastructure
approaches and shift the criteria for
ESG and automation solutions
energy consumption reduction plans,
vendor selection as a result. Collaborating with CSPs
circular economy approaches Federal, state government in the transformation of network
and cities network modernization operations
acceleration

Business overview
Our strategy
continued
Industry trends
Shaping the future of critical networks
We have identified 10 trends that will shape the future of

critical networks and influence the distribution of value and the
future competitive landscape within the industry ecosystems.
1 Open architectures and Open RAN 4 Edge cloud 7 Coherent routing 9 Non-terrestrial networks
We see increased activities towards open network architectures, To advance digitalization and automation, there is demand for Pluggable coherent 400G optics, optimized line systems and network Non-terrestrial networks are under disruption from technology-driven
most notably Open RAN (radio access network) with the O-RAN specific workloads to move from the central cloud to be closer to the automation will enable the next generation of IP/Optical network performance and cost improvements and the emergence of the Low
alliance. Open RAN aims at splitting a base transceiver station (BTS) application due to the required low latency. The on-premise enterprise evolution primarily for point-to-point router connections (DCI). Earth Orbit (LEO) deployment model. We expect the non-terrestrial
into its subcomponents with open interfaces and introduces a new edge is best suited to serve privacy-oriented, mission-critical use Aggregation and backbone networks will leverage reconfigurable networks to be mainly complementary to terrestrial networks in terms
network function, RAN Intelligent Controller. The subcomponents can cases. The remaining low latency use cases can be served at the optical add-drop multiplexer (ROADM)-optimized IP topologies to of coverage in low population density areas.
then be provided by different suppliers. CSPs currently experiment Wide Area Network (WAN) termination site. optimize for performance and cost.
with the objective to build and nurture the open ecosystem and
diversify their supplier base.
10 System-on-a-Chip (SoC)
5 Hybrid cloud 8 Infrastructure sharing
SoCs provide a source of competitive differentiation on performance,
2 Cloud RAN Hybrid cloud is emerging as a strong enabler for accelerating digital CSPs are seeking to optimize their cost and asset structure, which cost and power. Industry and use case specific workloads leverage
transformation. Enterprises adopting hybrid cloud models benefit leads to network sharing initiatives and spin-offs. The emergence custom SoCs that provide the required performance at optimal total
Cloud RAN refers to all or some of the baseband functions being run from public cloud (multi-cloud) services, augmented by traditional of neutral hosts is supported by government broadband initiatives cost of ownership. Software applications will be redesigned to take
on a commercial-off-the-shelf (COTS) computing platform rather IT systems and privacy-oriented private clouds. In this context, and capital from infrastructure funds. The neutral host model will advantage of hybrid SoC-based and commoditized x86-based
than purpose-built hardware. The objective is to benefit from cloud enterprises or CSPs as their WAN providers have brought the take different forms depending on the market context. We expect platforms. We expect the build-out of the edge and the migration
computing efficiencies and the pooling of resources. Its adoption large cloud providers (Amazon Web Services, Microsoft Azure, predominantly passive infrastructure sharing with some expansion of workloads to hybrid cloud architecture to influence the timing
will be dependent on the cost-efficiency of COTS platforms, Google Cloud Platform) in their WAN. into active fiber and metro edge compute across the mid-term of bespoke SoC utilization. The industry perspective changes
fiber build-out and the availability of hosting data centers. time frame. from x86 for all workloads towards use case driven bespoke processor
and accelerators.
6 As-a-Service delivery and business models
3 Private wireless networks
With as-a-Service (aaS) business models predominant for software
Large industrials are enhancing their operational technology networks applications in enterprise, CSPs have started migrating their IT apps
with the target of connecting their infrastructure and devices, often to public clouds and consuming them aaS. This development is also
in a wireless manner. This enables the collection and aggregation of increasing in network software. For network functions like 5G Core,
operational data, which in turn is used to improve overall productivity. CSPs will likely use a phased approach with software migrating to
We currently see players in enterprise verticals building their own a cloud deployment model (hybrid) first, before transitioning to
private 4G/5G networks complementing their wi-fi and fixed networks an aaS business model. We expect that in the mid- to long-term,
and expect this trend to continue. most network software and network functions will be consumed
in an aaS model.

Business overview
Our strategy
continued
Our strategic
commitments
Our main strategic commitment is to deliver critical networks
through technology leadership and trusted partnerships.
Building on this, four strategic commitments define the focus
of our strategy in an evolving market.
In March 2021, we concluded a strategic review which resulted in four strategic commitments, announced as part of our
Nokia platform. While our purpose describes the “why” and our cultural essentials the “how” of what we do, the strategic
commitment establishes the “what.” Our main strategic commitment is to deliver critical networks through technology
leadership and trusted partnerships. Building on this, our four strategic commitments define our focus in an evolving market,
help us strengthen our position to secure opportunities in technology disruptions and hedge against potential risks.
We are a trusted We focus on technology We capture the value We create value with
partner for critical leadership in each of shift to cloud and new long-term research and
networks our businesses business models intellectual property
Our customers build the critical networks that provide Cost and performance remain the top priorities for our We see networks evolving to further optimize performance Sustainable technology leadership requires us to anticipate,
essential services for the economy and throughout society. customers. CSPs, in particular, have not experienced strong to cost and increase flexibility. Value in critical networks will shape and invest in the next technology wave. Our innovations,
Critical networks have the combined traits from CSP and top-line growth in recent years but still need to continuously migrate away from monolithic systems towards silicon, research assets and intellectual property provide both the
hyperscaler networks. Like CSP networks, critical networks invest in their networks. Our customers build their critical software and service and will be captured through different technology and the financial platform to enable us to take
deliver “carrier-grade” performance, high availability and networks based upon a best-of-breed approach. Network business models like as-a-Service (aaS), for example. the long-term view and deliver sustainable success.
resilience. Like hyperscaler networks, they are intelligent, elements are selected on a best performance per total cost This development will allow networks to be consumed more
autonomous, flexible and agile enough to serve customers of ownership basis. We see this trend becoming more flexibly and tailored towards new use cases that combine While our business groups focus on near- to mid-term
on demand. To be their trusted partner, our understanding important as networks become more open and cloudified. the capabilities of different players. innovation, Nokia Bell Labs, our world-renowned industrial
of the needs of CSPs, enterprises and hyperscalers in an research arm, is focused on a farther time horizon in its
evolving market is essential. Value creation opportunities In our highly competitive industry, technology leadership is We have positioned our business to capture growth ambition to anticipate and shape longer-term technology
come from a deep, trusted partnership with our customers: also required to underpin momentum and financial returns. opportunities by investing in Open RAN (radio access cycles and inflection points. To that end, we are deeply
for CSPs, for enterprise verticals and for hyperscalers. It is the key to regain some pricing power, drive market share networks) and cloudification. We work closely with the engaged in leading and influencing standards and developing
and improve profitability. Competitive dynamics in the CSP main hyperscalers to bring cloud computing benefits to new standard essential patents (SEPs). Standards work is
industry strongly favor the top two vendors. Almost all CSPs mobile networks. We rebalance our investments to build and important for us to shape technology cycles. This gives us
dual source, giving vendors no pricing power unless they offer strengthen a winning proposition in a cloud-native software the ability to take a longer-term perspective and to invest
some technology advantage. In a market with a small number suite in the domains of 5G Core, analytics and artificial in further technology leadership for the future.
of vendors, technology leadership is the main lever to grow intelligence, mission-critical industrial edge and private
organically. In addition, technology leadership increases wireless, digital operations, monetization and security.
the scale of the business and consequently improves the We target to transform our software business into an aaS
operating leverage in a business with high fixed costs. business and delivery model.
In our industry, only the top one or two players create value
and earn returns above their cost of capital. Therefore, each
of our businesses is focused on technology leadership, and
we will reconsider our segment participation in the domains
in which we do not have technology leadership and do not see
a credible path to achieve it.

Business overview
Our strategy
continued
Our path to continued Our Technology

technology leadership Vision 2030
As one of the industry’s leading investors in communication Going into 2030, we believe that two of the most impactful drivers
technology research and development (R&D), we drive innovation that will dominate network traffic and shape the evolution of networks
across a comprehensive portfolio of network equipment, software, will be human augmentation and digital-physical fusion.
services and licensing opportunities.
Nokia’s world-leading research ■ Bell Labs Core Research: focuses on In 2021, we analyzed the direction and drivers As we move from the 5G era towards
creating game-changing innovations that of technological change in a company-wide 5G-Advanced and onwards to the 6G era,
and development define the future of networks. It also exercise that resulted in our Technology the communications fabric will need to be
We have a global network of R&D centers, explores key technologies to prepare Vision 2030. architected differently. Examples of this
each with technology and competence our businesses for the 6G era on a network evolution will include extreme
specialties and ecosystems. Most of our R&D ten-year horizon. We expect that new human augmentation performance specialized networks for
is conducted in the business group structures technologies, like extended reality (XR), lowest latency and highest reliability,
and is further elaborated upon in the business ■ Bell Labs Solutions Research: focuses on as well as digital-physical fusion technologies, a multi-layered network of networks
group section of this report. creating new value chains. It identifies like digital twins, will drive network traffic to meet the new requirements of emerging
opportunities beyond our current product and future developments in connectivity applications, and with network aaS, the
Nokia Bell Labs and long-term and solutions portfolio and explores new as we enter this new era of unprecedented enabling of networks to be consumed like
market spaces and technology licensing immersiveness and industrial digitalization.
technology leadership possibilities.
cloud services.
Nokia Bell Labs continues its long-standing This will create a next level of expectations for With a focused corporate and technology
tradition of disruptive innovation in the Nokia has pioneered many of the foundational networks – on performance, reliability, ubiquity, strategy, we believe we are strongly positioned
fundamental technologies that underpin technologies of the 5G era and our research security, openness and sustainability – with to lead this evolution.
communications networks and systems, is already now focusing on the future beyond completely new pressures to match the agility
helping us to further secure our technology 5G so that we are firmly positioned to of the cloud as emerging use cases focus on
leadership. A key part of its charter is to also continue our leading role. 5G-Advanced is aaS models and performance-sensitive
explore concepts that generate growth a key stepping stone to the 6G era and will applications at the edge.
opportunities in adjacent and emerging develop 5G to its fullest capabilities, providing
markets. To address this dual mission, Nokia an improved experience for humans and
Bell Labs streamlined its structure in 2021, machines, as well as extensions for new use
forming two organizations under the Nokia cases and functionalities. Nokia is investing
Bell Labs umbrella: to lead in 5G-Advanced networks that are
anticipated to begin appearing in 2025.
We are also already actively preparing for
leadership in 6G. Hexa-X, the European
Commission’s flagship 6G initiative for
Innovation leadership
Spearheaded by Nokia Bell Labs
EUR 130bn+ EUR 4bn+
research into the next generation of wireless invested in cutting-edge invested in R&D across
networks, began in January 2021 with Nokia R&D since 2000 Nokia during 2021
as project lead and working closely with a
strong consortium of European partners.
Standards leadership
Ecosystem leadership through standardization.
4 000+ 6G
patent families declared as leadership in Hexa-X
Nokia holds key positions across all major essential to 5G standards project and beyond
standardization and industry groups
Patent leadership
Constant renewal of industry-leading portfolio
~20 000 1 500+
patent families with the patents filed for new
vast majority still in force inventions in 2021
in ten years’ time

Business overview
Our history
Our history
Nokia has been adapting to the needs of an
ever-changing world for over 155 years.
1865 1960s 2007 2013 2016 2017 2017-2021

Founded as a Nokia becomes a Entered a joint venture with Purchased Siemens’ Acquired Alcatel-Lucent, Created Nokia Additional acquisitions enhancing our
single paper conglomerate comprising Siemens, combining mobile stake in NSN including Bell Labs, Shanghai Bell, a joint technology leadership such as:
mill operation rubber, cable, forestry, and fixed-line phone network creating an innovation venture between
equipment businesses and 2014 leader in next-generation Nokia and China Deepfield, the US-based leader in real-time
electronics and
creating Nokia Siemens Sold Devices and technology and services Huaxin, integrating analytics for IP network performance
power-generation
Networks (NSN) Services business Alcatel-Lucent management and security; Comptel,
businesses
to Microsoft Shanghai Bell Co. Ltd a Finland-based telecommunications
2011 and Nokia China software company; Unium, a Seattle-based
Entered a strategic software company that specializes in
partnership with solving complex wireless networking
Microsoft to address problems for use in mission-critical and
increasing competition residential wi-fi applications; and Elenion,
from iOS and Android a US-based company focusing on silicon
operating systems photonics technology
Acquired the wireless
network equipment
division of Motorola
Milestones
1865 1960 2000 2012 2017 2020
Innovations
1962 2001
Launched the first Invented MIMO
1926 (Multiple-Input and
Brought sound communications satellite,
Telstar 1, into orbit enabling Multiple-Output), a key
to motion element of a large number 2020
pictures* 1947 the first ever broadcast Selected by NASA to build
Developed the of live television between of modern wireless
1991 systems, that allows for 2017 and deploy the first end-to-end
transistor, a tiny device the US and Europe* LTE solution on the lunar surface
Enabled the first greater throughput Developed Probabilistic
that revolutionized the
1969 GSM call using a without increasing Constellation Shaping, Enabled commercial deployment of the
entire electronics
Developed Unix, the Nokia phone over bandwidth requirements* an innovative technology world’s first 5G liquid cooling solution
industry*
software system that the Nokia-built to get the most out of
1954 made the large-scale network of Finnish 2006 each fiber, irrespective Set the 5G speed world record
Created the solar cell, networking of diverse communications Developed Softrouter, of its length and
a routing architecture 2021
enabling the conversion computing systems and service provider capabilities
permitting development Developed the Resh programming
of the sun’s energy the internet practical* Radiolinja
of a programmable, open 2019 language to take control of and manage
into electricity*
1982 1998 network infrastructure to 2014 Opened the world’s a fleet of robots
1958 Introduced both the first Became the allow easier deployment Developed XG-FAST technology, enabling first live end-to-end
Developed the laser, fully digital local telephone world’s largest of new services that service providers to generate fiber-like speeds 5G lab, the Future X Lab
* Bell Telephone Laboratories (1925-1984).
creating the foundation exchange in Europe and the manufacturer of make use of exposed of more than 10Gbps over short distances in Murray Hill, New Following its acquisition by Nokia in 2016,
for fiber optics* world’s first NMT car phone mobile phones network capabilities* using existing copper infrastructure* Jersey, US the company was renamed Nokia Bell Labs.

Business overview
Customer Experience
Customer
Experience
The Nokia Customer Experience (CX) organization was formed in 2021 to
ensure we engage customers with a unified and consistent voice. It also serves
as our customers’ advocate inside Nokia to see to it that we understand the
needs of our customers and deliver the best possible experience for them. In 2021, Lufthansa Technik brought Nokia 5G private
wireless networking into full-time commercial
deployment at its facility in Hamburg, Germany.
The new CX organization unites our sales and challenges through Industry 4.0 digital Case study: Nokia 5G private wireless
customer marketing under one umbrella, transformation. Our solutions help transform networking moves from trial to permanent
allowing us to better leverage commonly operations and modernize communication deployment for Lufthansa Technik
required platforms, processes and resources. networks with leading next-generation
CX drives growth across all business group technologies from across our businesses 5G private wireless networking has enabled
portfolios by engaging CSPs, enterprise – including IP, optical, fiber and private Lufthansa Technik to maintain business
verticals, hyperscalers and governments, wireless networking. The enterprise team has continuity throughout the pandemic,
positioning Nokia as a technology leader, worked with more than 2 200 organizations providing the ability to conduct virtual
innovation partner and solutions – connecting people and technologies, aircraft maintenance inspections for its civil
provider worldwide. improving safety both in the workplace aviation customers over fast, high-definition
(workers and operations) and in cities around video links.
Our customers benefit through the unique the world, increasing automation and agility to
insights as the result of our extensive analysis boost productivity and efficiency, and helping Over a high-quality video stream, customers
of the market. This enables them to make the customers achieve greater resilience and communicate in real time with engine
best strategic technology decisions to help sustainability through digitalization. mechanics performing maintenance work.
grow their business. Dismantled parts are jointly inspected
Together, CX and the business groups align on-screen in high resolution, enabling
While enterprise sales, marketing and on our go-to-market ambitions, resourcing informed decisions to be made. Virtual Table
delivery have moved under the CX umbrella, and customer requirements, enabling the Inspection has now been integrated into
products developed for this diverse customer business groups to remain accountable for Lufthansa Technik’s digital AVIATAR technical
segment remain in the relevant business their own financial performance. Collective aircraft fleet management solution.
groups. Working across industries such as competence, delivered consistently across all
manufacturing, supply chain logistics, energy, business groups, coupled with deep expertise The network is based on Nokia Digital
transportation and the public sector, as well as across each unique industry we serve, solves Automation Cloud (NDAC) 5G SA.
harnessing the power of our growing partner customer challenges, inspires growth and NDAC is a 5G private wireless platform
community, the enterprise team helps enables our customers to achieve their providing high-bandwidth, low-latency,
customers address their unique business immediate and long-term goals. hyperfast private wireless connectivity
and local edge computing, providing key
digitalization enablers for customers looking
to transform to Industry 4.0 operations.

Business overview
Business groups
Mobile
Networks
Deploying one of Nokia’s latest AirScale Massive
MIMO antenna products.
Mobile Networks provides products and services

for radio access networks covering technologies
from 2G to 5G, and microwave radio links for
transport networks.
Market overview Business overview and

In RAN, we are seeing an uplift in the organization
5G share of the market, as communications Aligned with our customer needs and as part
service provider customers replace of Nokia’s transformation, Mobile Networks
volumes of previous technology generations adopted a new organization and operating
to better serve subscribers with high-speed model at the start of 2021. The business
mobile broadband. group now encompasses not only products
Our market is also driven by growth in for RAN and microwave links, but also network
enterprise use cases, as companies across management solutions and services to plan,
different industries, including manufacturing deploy, optimize and maintain networks.
and energy, further automate their In 2021, Mobile Networks launched a new
business processes. 5G portfolio powered by the latest ReefShark
The estimated Mobile Networks addressable System-on-Chip technology, bringing
market, excluding China, for 2021 was increased capacity and connectivity to
EUR 46 billion. We currently forecast an our customers. The launches covered new
addressable market for 2022 of EUR 49 billion. AirScale radios, including the industry’s
We estimate that the addressable market will lightest high-power, 400MHz 32TRX
grow by approximately 3% in 2022 excluding Massive MIMO, and new baseband modules,
the impact of changes in foreign currency supporting 90 000 connected users
exchange rates. simultaneously while enabling a reduction
in power consumption of up to 75%. With
Single RAN software and multiradio baseband
plug-in cards supporting all radio access
technologies from 2G to 5G, Nokia is
accelerating 5G rollouts and reducing overall
RAN total cost of ownership, by unlocking
network efficiencies with common transport,
common operability, common software
delivery and increased hardware sharing.
2021 was a transformational year for

Mobile Networks. We increased our
R&D investments and largely closed
the gap with key competition in 5G.
Tommi Uitto
President, Mobile Networks

Business overview
Business groups
continued
Mobile Networks continued

Network
Infrastructure
Mobile Networks proactively develops new
approaches to building networks. In 2021, we
in Australia. We also strengthened our
footprint in China, signing new 5G deals with
Competition Network Infrastructure works with a wide range
The RAN market, including associated network
launched Nokia Edge Automation to manage
multiple cloud deployments supporting new
China Mobile and China Broadcasting Network. management solutions and network services, of customers in the CSP, enterprise, webscale
5G use cases, opened a new Open RAN testing Our primary focus is on building technology
leadership and bringing the best performing
is a highly consolidated market. Our main
competitors are Huawei, Ericsson, Samsung and hyperscaler segments to meet their
and collaboration center in the US, and
announced partnerships with Amazon Web networks to our customers. We made
significant progress in enhancing our R&D
and ZTE, but there are also a number of
smaller competitors competing in specific
access, transport, routing and core needs,
Services (AWS), Google Cloud and Microsoft
for cloud-based 5G radio solutions. output during 2019-2021. Our 5G R&D technology or regional sub-segments.
For example, in microwave radio links, our
both terrestrial and subsea.
headcount increased by approximately 60%
In 2021, we met our target to hold an from the beginning of 2019 until the end of competitors include Ceragon, NEC and Aviat.
estimated 25-27% share of the RAN market, 2021 and our 5G software feature output
excluding China. Our 4G networks deliver increased 130% during the same time period,
industry leading performance with best outpacing the increase in our headcount and
average downlink and uplink speeds, indicating improved efficiency and productivity.
providing a solid foundation for us to evolve
our customers’ networks to 5G(1). In 2021, In line with Nokia’s overall commitment
we also largely closed the gap with our key to support the Paris Agreement to limit
competition in 5G performance. global warming to 1.5°C, Mobile Networks
announced that it would reduce the average
By the end of 2021, Nokia supplied to power consumption of its AirScale 5G mMIMO
approximately 40% of launched 5G networks, Base Station Site Solution by 50% by 2023, Market overview We currently forecast an addressable market
in half of the countries with live 5G. We had compared to our 2019 level. In addition, Network Infrastructure comprises four for 2022 of EUR 45 billion. We estimate
214 commercial 5G deals, which included to cut cooling energy consumption, we complementary business divisions that can that the addressable market will grow by
many new 5G customers, such as Net4Mobility successfully trialled our Liquid Cooling share best practice and collaborate on approximately 3% in 2022 excluding the
in Sweden, Telus in Canada, Orange in baseband solution with Japanese technology and operations, while maintaining impact of changes in foreign currency
(1) Nokia analysis based on crowdsourced data from Tutela
Belgium, Elisa in Estonia and TPG Telecom communications service provider, KDDI. Technologies Ltd. (May-September 2021) a specialized, highly customer-centric approach. exchange rates.
The pandemic has accelerated and Business overview and

highlighted the explosion in global demand organization
for connectivity and capacity, with moves in
Our business divisions are: Fixed Networks,
every society towards online work, education,
Spanning the globe, both on IP Networks, Optical Networks and Submarine
214
2021 in brief entertainment, medicine and socializing.
land and under the sea, our Networks. Across our portfolio we combine
In 2021, Mobile Networks net sales declined 7% as expected market share A renewed focus on broadband as a critical
innovative hardware and software solutions
loss in North America was partially compensated for by other regions. With networks are the capillaries network element provides the impetus for
with specialist professional services to deliver
increased investments in R&D, we were able to accelerate product roadmaps CSPs, governments and others to invest in
towards technology leadership. Despite these investments, improved cost
commercial 5G deals of connectivity. fiber, fixed wireless access and supporting
value to customers.
competitiveness and execution meant we were still able to deliver a segment IP and optical network infrastructure. As Fixed Networks offers fiber and
130%
Federico Guillén access technology evolves to 10G, 25G, and
operating margin of 7.9% remaining stable year-on-year. copper-based access infrastructure; wi-fi
President, Network Infrastructure beyond, communications service providers solutions, cloud and virtualization. We have a
■ Reached 214 commercial 5G deals and had more than 420 private wireless add revenue streams by serving residential leading position in fiber technology and are
customers, over 80 with 5G users, businesses, and 5G cells with a
increase in 5G software feature output the leaders in XGS-PON(1). We were also the
■ Launched our new AirScale 5G portfolio powered by ReefShark technology, from start of 2019 till end of 2021 single network. first to offer a commercial 25G PON solution.
bringing higher capacity, coverage, power efficiency and easy deployment Our in-house developed Quillion chipset
Our products help established CSPs and
brings best-in-class performance across our
■ Our new AirScale portfolio is O-RAN ready, supporting our efforts new players to build networks that can
portfolio and enables us to innovate rapidly
to develop cloud-based, open approaches to building networks enable a new wave of industrial digitalization.
and with agility. We have made a strong start
They support consumers, enterprises and
■ Set a new target to reduce our base station power consumption by 50% in the relatively new area of 5G fixed wireless
webscales (including hyperscalers). On land
by 2023 compared to our 2019 level access (FWA), based on technology leadership.
and under the sea, our networks are the
Our wi-fi portfolio includes mesh solutions
capillaries of connectivity.
■ Launched new AI-driven digital services to help CSPs reduce the complexity and cloud-based controllers – to manage wi-fi
of network support and maintenance The estimated Network Infrastructure access points in the home – while CSPs can
addressable market, excluding Submarine streamline and automate operations with our
■ Launched Nokia Smart Node, an all-in-one solution for premium 5G mobile
Networks, for 2021 was EUR 42 billion. software-defined access network portfolio.
indoor coverage, as well as new additions to our Wavence microwave
transport portfolio
(1) Dell’Oro Broadband Access 2021 Q3 report

Business overview
Business groups
continued
Network Infrastructure continued
IP Networks provides IP routing solutions for wavelength-division multiplexing,

IP aggregation, edge and core applications for
residential, business, mobile and industrial
services. Our solutions – combined with our
network automation platform – enable
reconfigurable optical add-drop multiplexer
solutions and optical line systems for
metro access and aggregation, data center
interconnect, regional and long-haul/
25G PON
We brought the world’s fastest fiber
customers to control, manage, analyze and ultra-long-haul applications. Our intense network to life
secure their IP networks. Our software-defined focus on technology innovation enabled us,
50%
WAN solutions bring easy, efficient network in 2021, to start shipping our fifth generation
connectivity configuration among clouds and of coherent optical technology, based on
to any enterprise branch. Nokia has recently our in-house designed PSE-V digital
brought to market a next-generation “data signal processor.
center fabric” solution, making data center Our Quillion and PSE-V chipsets provide
switching and cloud environments easier to Submarine Networks has a large physical around 50% higher energy efficiency
scale, adapt and operate. Our ability to offer infrastructure and a strongly cyclical business than previous generations
high performance and massively scalable pattern. As submarine capacity is in an
expansion phase – driven by webscales –
75%
networks is based on innovation – during
2021, we launched the latest generation the market is strong and Nokia is a leader.
in our successful in-house designed family During 2021 we sought to consolidate our
of routing silicon. leadership by updating our fleet and focusing
on converting a strong backlog of orders into FP5 offers up to 75% reduction in
Optical Networks is a leader in optical revenue and we are bringing our technology power consumption by comparison
transport networks for metro, regional, focus to bear on areas including next- with previous generation
long-haul and ultra-long-haul applications, generation spatial division multiplexing.
helping communications service providers
build smarter transport networks, using Competition
our software tools and automation to Our competitors include Huawei and ZTE,
deliver streamlined service delivery and along with Calix and Adtran (Fixed Networks),
lower total cost of ownership. The portfolio Cisco and Juniper (IP Networks), Ciena and
includes coherent optical transponders, Infinera (Optical Networks), and Subcom and
optical transport network switching, NEC (Submarine Networks).
2021 in brief
In 2021, Network Infrastructure grew net sales by 14% from 2020, driven by strong growth
in our Fixed Networks and Submarine Networks divisions, as well as solid performance in our
IP Networks and Optical Networks divisions. Our segment operating margin grew by a healthy
3.4 percentage points to 10.2%.
■ Launched our FP5 routing silicon and platforms, offering CSPs enhanced capacity, security
and power efficiency with high investment protection
■ Brought the world’s fastest fiber network (25G PON) to life for Proximus, Belgium; we are also
trialing 25G with, among others, Openreach, UK
■ Chosen by Telefónica, Spain, to complete its IP network transformation, enabling the
expansion of fiber-to-the-home and 5G services
■ Selected as the single supplier for Swisscom’s new fully automated, high-capacity optical Proximus and Nokia deploy the industry’s first 25 Gbps Our cableship Ile de Sein landing the Ellalink system
transport network connection on a live network. in Madeira.
■ Chosen by China Mobile Cloud to provide an end-to-end SDN solution for its public
Nokia 1830 systems, powered by PSE-V coherent optical Nokia FP5 routing silicon provides the right foundation
cloud service engines, are at the heart of critical networks worldwide. to scale and transform IP networks to stay ahead of
■ Selected for 2Africa: The world’s largest subsea system ever-shifting market demands.

Business overview
Business groups
continued
Cloud and
In 2021, CNS made significant progress
in its mission to help customers and
partners create new value, deliver
Network Services
innovative digital services and
transform business operations.
Raghav Sahgal
President, Cloud and Network Services
Cloud and Network Services serves communications service providers,

enterprise, and hyperscale customers and partners, helping them to navigate
three major industry transitions: the introduction of 5G networks and services, Industrial robot manufacturer KUKA is deploying Nokia
cloud-native software and as-a-Service delivery models. 5G private wireless networking at its Smart Production
and Development Center in Augsburg, Germany.
Market overview
The introduction of 5G networks and services,
cloud-native software and as-a-Service
delivery models places demands on
organizations to find new ways to monetize
digital assets, optimize costs, navigate
complexity and mitigate security risks for
their mission-critical networks.
The estimated Cloud and Network Services
addressable market for 2021 was EUR 26 billion.
We currently forecast an addressable market
for 2022 of EUR 28 billion. We estimate
that the addressable market will grow by
approximately 5% in 2022 excluding the
impact of changes in foreign currency
exchange rates.
Business overview and

organization
Cloud and Network Services comprises four
areas of business focus: Business applications
software, cloud and cognitive services, core
networks software and enterprise solutions.
The group has prioritized research and
development and portfolio investments that
reinforce our focus on technology leadership,
which is a leading priority for our customers
and a crucial marketplace differentiator.
Addressing selected platforms for growth,
we are focusing our investment on 5G core
software, analytics and AI Services, digital
operations, monetization, private wireless
and industrial automation, and security.
We have identified these fast-growing,
higher-margin areas as being critically
important to our CSP and enterprise
customers as they deploy, operate,
and monetize the next wave of 5G.

Business overview
Business groups
continued
Cloud and Network Services continued

Nokia Technologies
We are already delivering cloud-native
solutions that provide network quality of
Customer demand for 5G digital operations,
monetization, security and analytics solutions
Competition Nokia Technologies is responsible for managing Nokia’s
Cloud and Network Services operates in
service and agility. We are enabling customers
to leverage network intelligence for user
has resulted in solid business applications
software performance. Cloud and cognitive
a fast-moving marketplace characterized patent portfolio and monetizing Nokia’s intellectual property,
by numerous competitors that range from
insights that facilitate efficiency and services continues to demonstrate improved
niche providers to global technology including patents, technologies and the Nokia brand.
sustainability, self-protection and self-healing. performance across its cloud and managed
enterprises whose offerings span several
We are deploying industrial solutions that services portfolio.
technical capabilities.
drive digital transformation and Industry 4.0.
And we are helping CSPs to automate network Digitalization plays a critical role in combating
The competitive environment comprises
operations and manage security. climate change and enabling a sustainable
networking companies, infrastructure and
future. Our AI-based energy efficiency service
application software suppliers, services
The transition to Software-as-a-Service provides an intelligent, automated way for
specialists, hyperscalers, cloud providers and
(SaaS) delivery of network software and CSP customers to control equipment power
a wide range of industry segment businesses.
associated use cases is also a key aspect consumption, enabling them to manage
of Cloud and Network Services’ strategy. energy use across their networks. In addition, We operate in a dynamic situation, where Market overview agreements with most of the major
our private wireless technology supports solar vendors and other industry participants smartphone vendors. We also have patent
Nokia Technologies is responsible for
Throughout 2021, Cloud and Network power plant and wind farm communications, may on occasion be a partner or a direct managing Nokia’s patent portfolio and
licensing programs for consumer electronics,
Services has refined operations and sales maintenance and safety needs. competitor, depending on the nature of the monetizing Nokia’s intellectual property,
connected cars, smart meters, payment
team alignment to create efficiencies and engagement. We are acutely aware of the including patents, technologies and the Nokia
terminals and other emerging technologies
enhance portfolio positioning with customers. During 2021, we were named by industry in the field of IoT.
need to build alliances with partners such brand, building on Nokia’s continued
analysts as a market leader in subscriber data
as hyperscalers, who are increasingly innovation leadership, long-term investment In 2021, we announced new patent licensing
management software(1), network automation
influential players in this space. into research and development and decades agreements with Daimler and several other
software(2), private cellular networking(3) of driving technology standards development.
and data, AI and development platforms(4). vehicle manufacturers, as well as Samsung
and Lenovo. These new agreements reflect
Licensing is a virtuous circle, Business overview and the significance of our contributions to
a wheel that has been turning organization cellular and multimedia standards.
for many years, powering Nokia Technologies has three focus areas: Technology Licensing: We continue to license
Patent Licensing of Nokia’s patent portfolio, our innovative multimedia technologies, such
innovation. It enables other Technology Licensing of Nokia’s technologies as OZO Audio and OZO Playback, to
companies to build on our for integration into consumer devices smartphone and camera manufacturers
and Brand Partnerships for licensing the through our Technology Licensing business.
inventions without having to Nokia brand. We also drive advanced audio and video
make their own investments Patent Licensing: We manage the Nokia research and standardization through our
in R&D. patent portfolio, working with the three Multimedia Technologies research unit.
other Nokia business groups, and continue Brand Partnerships: Nokia is a global brand
Jenni Lukander to pursue and grow our patent licensing and
Attained marketplace leadership in private 2021 in brief that is recognized by almost everyone. We
President, Nokia Technologies monetization activities which drive most of
wireless networking with We worked hard throughout 2021 to rebalance our portfolio in Cloud and Network Services work with HMD Global – our licensee for
Nokia Technologies’ net sales. This includes
+420
and ensure our investments are focused on the right areas for growth in the future. Nokia-branded phones and tablets – along
This was therefore a transition year for the business with net sales stable year-on-year and our successful mobile devices licensing with brand partners in other product
a 5.4% segment operating margin. The segment operating margin increased 7.6 percentage program, where we currently have licensing categories, to increase the reach and
customers points primarily due to provisions that negatively impacted in 2020 not present in 2021. strength of the Nokia brand.
>80 include 5G
■ Announced our first SaaS products for CSPs and enterprises across analytics, security and
data management services
■ An industry first, we are deploying our full 5G Standalone Core for DISH in the public cloud
AI-based energy management automation with Amazon Web Services
can reduce energy costs and carbon
footprint by
■ Attained marketplace leadership in private wireless networking with more than 420 customers,
of which over 80 include 5G
4 000+ ISO 9001
30%
■ Key product launches included Nokia Data Marketplace, Nokia iSIM, Nokia MX Industrial Edge
and Nokia NetGuard XDR Security patent families declared as essential Achieved certification for our high-quality
to 5G standards patent portfolio management
■ Secured pan-industry recognition(5) for our Vodafone Anomaly Detection Service, based on
Nokia machine learning software
■ Lufthansa Technik announced that its Nokia 5G private wireless-enabled virtual inspection
service went into full commercial use
(1) Analysys Mason. (September 2021) Subscriber data management: worldwide market shares 2020 and forecast 2020-2021.
(2) Appledore. (July 2021) Leading Suppliers in Network Automation Software.
(3) Technology Business Research (May 2021) Private Cellular Networks Vendors Benchmark.
(4) Analysys Mason. (November 2021) Data, AI and development platforms: worldwide market shares 2020.
(5) 5G World. (September 2021) Most Innovative AI or ML Technology for the Network.

Business overview
Business groups
continued
Nokia Technologies continued
2021 in brief
On the back of new licenses signed we were able to deliver 7% net sales growth in 2021.
Combined with continued control on our cost base we also delivered EUR 1 185 million
segment operating profit.
■ Expanded our patent licensing coverage across key markets, including agreements with
Daimler, Samsung and Lenovo
■ Drove innovation, filing over 1 500 new inventions, and reaching the landmark of
4 000 patent families declared as essential to 5G standards
■ Achieved ISO 9001 certification for our high-quality patent portfolio management
■ Commenced patent infringement proceedings against OPPO, OnePlus and Realme
in several countries in Asia and Europe
■ Received a Technology & Engineering Emmy® Award for our multimedia research
■ Integrated new OZO Audio and OZO Playback features into more devices, including the
Nokia-branded tablet
■ Worked with our brand partners to explore new licensing opportunities
Industry leading patent portfolio We also have a strong multimedia patent

portfolio, built on thirty years of investment
Nokia has defined many of the fundamental
in R&D. For example, we excel in video
technologies used in virtually all mobile
compression technology that enables large
devices. We have invested more than
data files to be shared across the internet.
EUR 130 billion in R&D since 2000 and taken
The work of Nokia’s engineers in video
a leading role in standardization, holding
research and standardization has been
a variety of leadership positions in global
recognized with numerous international
standards development organizations.
awards, including four Technology &
As a result, we own one of the broadest and
Engineering Emmy® Awards.
strongest patent portfolios in the mobile
communications sector, with around 20 000 We continue to generate new intellectual
patent families (each family composed of property at a robust rate, refreshing our
several individual patents), of which over portfolio from R&D activities across all
4 000 are declared as essential to 5G. Nokia businesses. In 2021, we filed patent
Our portfolio has a long lifetime, with the vast applications for more than 1 500 new
majority of patents still in force in ten years’ inventions, enabling 5G networks, connected
time, providing a long-term foundation for 5G devices and more.
the business. We have been ranked #1 in We actively manage our patent portfolio by
several independent third-party studies for continuously evaluating our collective assets
our 2G, 3G, 4G and 5G patents that have been and taking actions to optimize the size of our
declared essential for cellular standards. overall portfolio, while preserving the high
quality of our patents. And in 2021, Nokia
became one of the first companies to achieve
the globally recognized ISO 9001 certification
for our high-quality patent portfolio
management process.
Using a head and torso simulator to conduct audio

quality measurements for our OZO Audio and OZO
Playback solutions.
Business overview
Supply chain, sourcing and manufacturing
Supply chain, sourcing

We continuously optimize our manufacturing cards from idle base station sites, upgraded We also partner with our suppliers to invest
and supplier network across the regions and software (SW), inspected and shipped back, in sustainable solutions and took important
leverage artificial intelligence and machine thus avoiding approximately 844 metric tons steps together in 2021 in areas like
learning capabilities in developing the supply of CO2 emissions. transportation and packaging.
and manufacturing
chain and factory network. This regional
approach will not only enable us to deliver a Throughout our manufacturing network, We are committed to prioritizing and
more rapid response to our customers’ needs, our own factories are on track to be carbon strengthening resilience and sustainability
but also decrease transportation costs and neutral by 2025 through hydro, wind, solar across the end-to-end supply chain to help
reduce CO2 emissions. and other sustainable sources. Many of our us effectively deal with current challenges
electronics manufacturing services (EMS) and be ready for whatever is next.
Sustainability through innovation partners have roadmaps to be carbon neutral
by 2030. Refer to “Sustainability and Corporate
We are committed to cut emissions by 50% by Responsibility” section for more information
2030. This commitment requires actions from
During 2021, global supply chain disruptions impacted us, our customers and our suppliers. We
We clearly communicate our Third-party Code
of Conduct and Nokia Supplier Requirements,
on Nokia’s sustainability targets and
achievements, including those related
operations across industries. continuously challenge our full supply chain
to, for example, develop new digital solutions
which incorporate Responsible Business
Alliance (RBA) Code of Conduct requirements,
to supplier sustainability.
to cut emissions. to our suppliers. These include standards

for responsible sourcing in important areas
We are delivering on increased customer
such as the environment and human rights.
demand for circular supply. Notable examples
Adherence is checked through audits and
Nokia’s supply chain is essential to our While our 2021 net sales were impacted by We continue to drive a diverse and resilient include a frame agreement with Orange and
EcoVadis documentation audits.
customers and our business, and for supply chain constraints, we believe Nokia supplier base to ensure quality, innovation a T-Mobile USA project where we deinstalled
managing the customer demand and supply performed well despite these challenges. We and effective risk mitigation. We partner
for our hardware, software and contract will continue to work to optimize our supply closely across our different business groups
manufactured products. Our end-to-end chain; thinking innovatively, digitally and across and maintain long-lasting relationships with
operations include sourcing, demand and the longer term, working to further develop our suppliers. We also closely collaborate
supply planning, manufacturing, distribution a resilient and sustainable supply chain for with our customers to fully understand their
Own manufacturing
COP26
and logistics. our customers. long-term needs. This approach is helping us
address the global semiconductor shortage. As of 31 December 2021, the production capacity for our wholly owned sites is noted below:
Given the size and scope of our portfolio, we Resilience through strong
purchase over EUR 12 billion worth of products Our geographically dispersed manufacturing Productive capacity,
and services per year from 11 000 different partnerships and digitalization network consists of our own manufacturing Recognized with a COP26 Compass Award Country Location and products(1) net (m2)(2)
suppliers to fully support our complex supply Strong partnerships and digitalization (24% of the network) and contract for Supply Chain Capacity Building for Australia Kilsyth: radio frequency systems 5 400
chain. Throughout 2021, we were presented investments are critical as we build resilience. manufacturing partners to minimize reaching beyond our own operations, China Suzhou: radio frequency systems 27 000
with many challenges and opportunities that We are collaborating with our customers geographic and geopolitical risks. Our network driving best practices with our suppliers
included semiconductor shortages, the and suppliers to build up our solid partner is strategically located around the world: and their suppliers Finland Oulu: base stations 10 000
ongoing COVID-19 pandemic, climate change, network. We optimize our supply chain by Asia Pacific & Japan/India (29%), Europe France Calais: submarine cables 24 000
and geopolitical and security concerns, all leveraging digitalization to strengthen (27%), China (29%) and the Americas (15%). France Trignac: radio frequency systems 7 300
during a critical growth period for 5G. capabilities to predict and simulate various Germany Hannover: radio frequency systems 23 500
operational scenarios to minimize disruptions.
India Chennai: base stations, radio controllers and 12 000
transmission systems
Poland Bydgoszcz: remanufacturing, product integration 15 200
UK Greenwich: submarine cables 12 000
USA Meriden: radio frequency systems 31 000
(1) We consider the production capacity of our manufacturing network to be sufficient to meet the requirements of our business.
The extent of utilization of our manufacturing facilities varies from plant to plant and from time to time during the year. None of
these facilities is subject to a material encumbrance.
(2) Production capacity equals the total area allotted to manufacturing and to the storage of manufacturing-related materials.
2021 in brief
■ Software supply chain digitalization strengthened continuous delivery capability for SW
and Services business models, such as Software-as-a-Service
■ Founding member of Trust Your Supplier program, a blockchain-based network designed
to improve supplier validation, onboarding, and life cycle information management
■ Recognized with a COP26 Compass Award for Supply Chain Capacity Building for reaching
beyond our own operations, driving best practices with our suppliers and their suppliers
■ Growing customer interest in circular supply as we delivered 40% more units compared
to 2020
■ Shipped 10 metric tons of 5G equipment on weekly carbon-neutral flights from China
to Europe, using Sustainable Aviation Fuel, a tested and approved biofuel blended with
We believe that we can only achieve our climate traditional fuels
targets together. In partnership with DB Schenker
and Lufthansa, we have invested in Sustainable ■ On track to eliminate approximately 200 metric tons of packaging/year by end of 2022 via
Aviation Fuel by purchasing cargo space on a reusable supplier bins at our Chennai factory, reducing our carbon footprint by 1.1 metric
weekly carbon-neutral flight. tons/year; expanding to other sites

Corporate governance
Corporate Corporate governance statement

Introduction42
Regulatory framework
Main corporate governance bodies of Nokia
42
44
44
governance
Share ownership of the Board of Directors
and the Group Leadership Team 56
Risk management, internal control and internal
audit functions at Nokia 57
Main procedures relating to insider administration 58
Auditor fees and services 58
Compensation59
Highlights59
Word from the Chair of the Personnel Committee
of the Board 59
Remuneration Policy 61
Remuneration summary for the Board of Directors 61
Remuneration summary for the President and CEO 62
Remuneration Report 2021 65
Introduction65
Board of Directors 66
The President and CEO 67
Remuneration governance 69
Group Leadership Team 70
Review of our incentive plans 71
Review of our comparator companies 73

Corporate governance statement
Corporate
This corporate governance Annual General Meeting 2021 and 2022 As the COVID-19 situation remains serious,
The Annual General Meeting 2021 took place Nokia Corporation’s Annual General Meeting
statement is prepared in at the Company’s headquarters in Espoo 2022 is planned to be held on 5 April 2022
accordance with Chapter 7, on 8 April 2021. To prevent the spread of without shareholders’ presence to prevent the
the COVID-19 pandemic, the Board resolved spread of the ongoing pandemic. Similarly to
Section 7 of the Finnish Securities
governance
on extraordinary measures pursuant to the 2020 and 2021, the meeting will be held under
Markets Act (2012/746, as temporary legislation approved by the Finnish extraordinary measures pursuant to the
amended) and the Finnish Parliament on 3 October 2020. The Annual temporary legislation approved by the Finnish
General Meeting 2021 was convened to be Parliament on 8 May 2021. Participation and
Corporate Governance Code held without shareholders and their proxy exercise of shareholder rights in the meeting
statement
2020 (the “Finnish Corporate representatives being present at the meeting will be possible only by voting in advance,
venue. Participation in the Annual General submitting counterproposals and asking
Governance Code”). questions in advance. Proposals of the Board
Meeting and use of shareholder rights was
possible only by voting in advance as well of Directors to the Annual General Meeting
Introduction as by submitting counterproposals and 2022 were published on 3 February 2022.
In 2021, we continued delivering on Nokia’s asking questions in advance. Approximately
commitment to strong corporate governance 66 000 shareholders representing
and related practices. To do that, the activities approximately 2 500 million shares and
of the Board of Directors are structured votes were represented at the Annual
to develop the Company’s strategy and to General Meeting through advance voting.
enable the Board to support and oversee the The Annual General Meeting supported all
management on the delivery of it within a of the Board’s proposals.
transparent governance framework. The table
below sets out a high-level overview of the
key areas of focus for the Board’s and its
Committees’ activities during the year.
January February/March April May July September/October December

Board – Business and financial reviews – Business review – AGM and appointing Board Chair, – Business and financial – Annual sustainability review – Annual strategy meeting – Business and financial reviews
– Company purpose – Strategy Vice Chair and Committee members reviews – Business and financial – Business and financial reviews – Strategy
– Strategy – Capital Markets Day – Business and financial reviews – Strategy reviews – Group Leadership Team (GLT) – Annual and long-range forecast
– Annual and long-range forecast – Plans to reset cost base – Strategy – Ethics & compliance – Strategy succession planning and target setting
and target setting – Convening the remote Annual – Litigation update – Nokia innovation framework – Board evaluation
– Board evaluation General Meeting (AGM – Digitalization and IT – Corporate Affairs update – Key risks review
– Review of CEO’s performance – Remuneration Report 2020 transformation – Digitalization update
targets and remuneration – Nokia Equity Program 2021–2023 – Future Nokia workplace – Investors’ feedback on sustainability,
– Annual Policy and Charter review governance and remuneration
Corporate Governance – AGM proposals on Board – AGM shareholder feedback – Board evaluation approach – Board remuneration review and
and Nomination composition and remuneration – Planning of Board – Preparing Board composition benchmarking
Committee – Committee compositions composition proposal proposal to AGM – Corporate governance developments
– Corporate governance statement – Annual Charter review
Personnel – Culture – Culture – Human capital risk review – Alignment on 2022 incentive – 2022 incentive targets
Committee – Incentive achievements for 2020 – AGM shareholder feedback – GLT succession planning and equity framework – 2022 equity allocations
– CEO and GLT performance – GLT remuneration – LTI development – Human capital update – Investor and proxy advisor update
– Incentive targets and objectives – eLTI 2021 plan – PC Advisor update – Remuneration Report for 2021
for 2021
– Annual Charter review
– Nokia Equity Program proposal
Audit – Q4 and full-year 2020 financials, – Q1 financials – Q2 financials – Q3 financials – Enterprise Risk Management
Committee annual report – Auditor reporting – Auditor reporting – Auditor reporting – Treasury update
– Auditor reporting – Ethics and compliance, internal audit – Ethics and compliance, – Ethics and compliance, internal – Pensions update
– Ethics and compliance, internal and internal controls updates internal audit and internal audit and internal controls – Audit and internal controls updates
audit and internal controls updates – Finance IT and digitalization controls updates updates – 20-F and annual report update
– AGM proposals to the Board – Cybersecurity – Cybersecurity – Sustainability reporting – Financing strategy
– Structured finance update – Tax update developments – Annual Charter and Policy review
– Credit risk update – Cybersecurity
– Conflict Minerals Reporting
Technology – Updates on major innovation and – Updates on major innovation – Updates on major innovation – Updates on major innovation
Committee technology trends and technology trends and technology trends and technology trends
– Review of strategic technology – Review of strategic – Technology vision and strategy – Review of strategic technology
initiatives technology initiatives – Review of strategic technology initiatives
– Technical excellence awards initiatives
– Annual Charter review

continued
Corporate governance framework Main corporate governance Board of Directors certain specific duties as stipulated by Finnish Board diversity
The operations of Nokia are managed law and our Corporate Governance Guidelines. The Board has adopted principles concerning
bodies of Nokia under the direction of the Board, within the The Vice Chair of the Board assumes the Board diversity describing our commitment to
General Meeting of Shareholders Pursuant to the provisions of the Finnish framework set by the Finnish Companies Act duties of the Chair of the Board in the event promoting a diverse Board composition and
Limited Liability Companies Act (2006/624, and Nokia’s Articles of Association as well as he or she is prevented from performing his how diversity is embedded into our processes
as amended) (the Finnish Companies Act) any complementary rules of procedure as or her duties. and practices when identifying and proposing
which is the legislation under which Nokia defined by the Board, such as the Corporate new Board candidates as well as proposing
operates, and Nokia’s Articles of Association, The independent directors of the new Board re-election of current Board members.
Governance Guidelines and the charters of
the control and management of Nokia are also confirm the election of the members
the Board’s Committees.
divided among shareholders at a general and chairs for the Board’s Committees from At Nokia, diversity is not a static concept but
meeting of shareholders, the Board, the Election and composition of the among the Board’s independent directors rather a relevant mix of required elements for
Board of Directors upon the recommendation of the Corporate the Board as a whole that evolves with time
President and CEO and the Group Leadership Board of Directors
Audit Committee Governance and Nomination Committee based on, among other things, the relevant
External Internal Team, chaired by the President and CEO. Pursuant to the Articles of Association of
Corporate Governance and and based on each Committee’s member business objectives and future needs of Nokia.
Audit Audit Nokia Corporation, we have a Board that is
Nomination Committee qualification standards. These elections The Board diversity is treated as a means of
Personnel Committee General Meeting of Shareholders composed of a minimum of seven and a
Nokia’s shareholders play a key role in maximum of 12 members. The members take place at the Board’s assembly meeting improvement and development rather than
Technology Committee following the general meeting. an end in itself. Diversity of our Board is
corporate governance, with our Annual General of the Board are elected at least annually at
Meeting offering a regular opportunity to each Annual General Meeting with a simple considered from a number of aspects including,
The Corporate Governance and Nomination but not limited to, skills and experience, age,
exercise their decision-making power in Nokia. majority of the shareholders’ votes cast at the
Committee’s aim is to continually renew nationality, ethnicity, cultural and educational
In addition, at the meeting the shareholders meeting. The term of a Board member begins
the Board to ensure an efficient Board of backgrounds, self-declared gender identity,
may exercise their right to speak and ask at the close of the general meeting at which
international professionals with a diverse sexual orientation as well as other individual
questions. During the years 2020-2022 the he or she was elected, or later as resolved by
mix of skills, experience and other personal qualities. The Board shall include
use of shareholder rights has taken, and will, the general meeting, and expires at the close
qualities in line with the diversity principles representatives of more than one gender.
President and CEO take place by remote means only, due to the of the following Annual General Meeting.
established by the Board. The Corporate
Group Leadership Team ongoing COVID-19 pandemic and related The Annual General Meeting convenes by
Governance and Nomination Committee Nokia acknowledges and supports the
precautions taken to ensure the health and 30 June annually.
considers potential director candidates based resolution adopted by the Finnish
safety of our shareholders, employees and on the short- and long-term needs of the Government on 17 February 2015 on
Regulatory framework To the extent compliance with any Our Board’s leadership structure consists of
other stakeholders. Please refer to section Company. In the process to identify and select gender equality on the boards of directors
non-domestic rules would conflict with the a Chair and Vice Chair elected annually by the
Our corporate governance practices comply “Introduction–Annual General Meeting 2021 the candidates matching these needs and of Finnish large and mid-cap listed companies.
laws of Finland, we are obliged to comply Board, and confirmed by the independent
with Finnish laws and regulations, our Articles and 2022”. A working group set up by the desired profiles, the Committee engages We report annually on our objectives relating
with Finnish laws and applicable regulations. directors of the Board from among the Board
of Association approved by the shareholders Finnish Ministry of Justice is preparing an search firms and external advisors. to representation of genders, the means to
There are no significant differences in the members upon the recommendation of the
and corporate governance guidelines amendment to the Finnish Companies Act to achieve it, and the progress we have made.
corporate governance practices applied by Corporate Governance and Nomination
(Corporate Governance Guidelines) adopted by enable fully virtual annual general meetings We aim to have representation of at least 40%
Nokia compared with those applied by the Committee. The Chair of the Board has
the Board of Directors. Corporate Governance and exercise of shareholder rights to their full of the non-prevailing gender on our Board.
US companies under the NYSE corporate extent also by virtual means in the future.
Guidelines reflect our commitment to good
governance standards with the exception that
corporate governance. They include the Each Nokia share entitles a shareholder to one Currently there are six different nationalities represented on the Board and 37.5% of the Board members are female. The Board composition
Nokia complies with Finnish law with respect
directors’ responsibilities, the composition vote at general meetings of Nokia. The Annual proposed to the Annual General Meeting 2022 has representation of six nationalities and 40% of Board members are female.
to the approval of equity compensation plans.
and election of the members of the Board General Meeting decides, among other things,
Under Finnish law, stock option plans require
and its Committees, and certain other on the election and remuneration of the Board,
shareholder approval at the time of their Independence of Corporate
matters relating to corporate governance. the adoption of annual accounts, the the company Governance and
launch. All other plans that include the delivery
We also comply with the Finnish Corporate distribution of retained earnings shown on the
Year of and major Audit Nomination Personnel Technology
of company stock in the form of newly issued Gender Birth Nationality Tenure(1) shareholders Committee(2) Committee(2) Committee(2) Committee(2)
Governance Code adopted by the Securities balance sheet, discharging the members of the
shares or treasury shares require shareholder Sari Baldauf (Board Chair) Female 1955 Finnish 3 Independent Member Member
Market Association. Board and the President and CEO from liability,
approval at the time of the delivery of the
Kari Stadigh (Board Vice Chair) Male 1955 Finnish 10 Independent Chair Member
In addition, we comply with the rules and shares unless shareholder approval has as well as on the election and fees of the
external auditor. As of the Annual General Bruce Brown Male 1958 American 9 Independent Member Chair Member
recommendations of Nasdaq Helsinki and been granted through an authorization to
the Board, a maximum of five years earlier. Meeting 2020, the Remuneration Policy is Thomas Dannenfeldt Male 1966 German 1 Independent Member Member
Euronext Paris as applicable to us due to
the listing of our shares on the exchanges. The NYSE corporate governance standards presented to the general meeting at least Jeanette Horan Female 1955 British 4 Independent Member Member
Furthermore, as a result of the listing of our require that the equity compensation plans every four years and the Remuneration Report Edward Kozel Male 1955 American 4 Independent Member Chair
American Depositary Shares on the New York are approved by the company’s shareholders. annually as of 2021. Resolutions of the general Søren Skou Male 1964 Danish 2 Independent Member
Stock Exchange (NYSE) and our registration Nokia aims to minimize the necessity for, or meeting regarding the policy and the report Carla Smits-Nusteling Female 1966 Dutch 5 Independent Chair Member
under the US Securities Exchange Act of 1934, consequences of, conflicts between the laws are advisory.
we follow the applicable U.S. federal securities of Finland and applicable non-domestic (1) Terms as Nokia Board member before the Annual General Meeting on 8 April 2021.
In addition to the Annual General Meeting, (2) As of 8 April 2021.
laws and regulations, including the corporate governance standards.
an Extraordinary General Meeting may be
Sarbanes-Oxley Act of 2002 as well as the convened when the Board considers such
In addition to the Corporate Governance
rules of the NYSE, in particular the corporate a meeting to be necessary, or when the
Guidelines, the Committees of the Board
governance standards under Section 303A provisions of the Finnish Companies Act
have adopted charters that define each
of the NYSE Listed Company Manual. We mandate that such a meeting must be held.
Committee’s main duties and operating
comply with these standards to the extent
principles. The Board has also adopted the
such provisions are applicable to us as a
Code of Conduct that applies to directors,
foreign private issuer.
executives, and employees of Nokia, as well
as employees of Nokia’s subsidiaries and
affiliated companies (such as joint ventures)
in which Nokia owns a majority of the shares
or exercises effective control. Furthermore,
the Board has adopted the Code of Ethics
applicable to our key executives, including
the President and CEO, CFO and
Corporate Controller.

continued
Experience and skills of the Board members Biographical details of our current Chair of the Board of Directors of If P&C Chair Sari Baldauf
Board members Insurance Holding Ltd 2002–2019. Member
General management and business operations of the Board of Directors of Nordea Bank AB
Finance and accounting
Chair Sari Baldauf (publ) 2010–2018. Chair of the Board Risk
b. 1955 Committee (BRIC) of Nordea Bank AB (publ)
Chief Executive Officer Communications service provider market Chair of the Nokia Board since 2020. Board 2011–2018.
member since 2018. Member of the
Corporate Governance and Nomination
Chief Financial Officer Enterprise business Committee and the Personnel Committee. Bruce Brown
b. 1958
Master of Business Administration, Helsinki Nokia Board member since 2012. Chair of
Chief Technology Officer Technology School of Economics and Business the Personnel Committee. Member of the
Administration, Finland. Bachelor of Science, Corporate Governance and Nomination
Helsinki School of Economics and Business Committee and the Technology Committee.
Administration, Finland. Honorary doctorates Vice Chair Kari Stadigh
Members of the Board of Directors Furthermore, the Board proposes, on As noted by the Chair of the Board in the MBA Xavier University, the United States. BS
in Technology (Helsinki University of
Until the Annual General Meeting held on the recommendation of the Corporate Annual General Meeting 2021, the Corporate (Chemical Engineering), Polytechnic Institute
Technology, Finland) and Business
8 April 2021, the Board consisted of nine Governance and Nomination Committee, Governance and Nomination Committee of New York University, the United States.
Administration (Turku School of Economics
members: Sari Baldauf (Chair), Kari Stadigh that the following new members be elected to monitors closely the time commitments of
and Business Administration and Aalto Chief Technology Officer of the Procter &
(Vice Chair), Bruce Brown, Thomas the Board composition for a term ending at the Board members to ensure they are able
University School of Business, Finland). Gamble Company 2008–2014. Various
Dannenfeldt, Jeanette Horan, Edward Kozel, the close of the next Annual General Meeting: to devote the appropriate time to carry
Elizabeth Nelson, Søren Skou and Lisa Hook, former President and CEO of out their duties and responsibilities. The Executive Vice President and General Manager, executive and managerial positions in Baby
Carla Smits-Nusteling. Neustar, Inc., Thomas Saueressig, a member Corporate Governance and Nomination Networks Business Group, Nokia, 1998–2005. Care, Feminine Care, and Beauty Care units of
of the Executive Board of SAP SE and Committee has prepared the proposed Various executive positions at Nokia in Finland the Procter & Gamble Company since 1980 in
The Annual General Meeting held on 8 April Global Head of SAP Product Engineering, composition of the Board of Directors to the United States, Germany and Japan.
and the United States 1983–1998.
2021 elected eight members to the Board for and Kai Öistämö, President and CEO of the Annual General Meeting 2022 taking
a term ending at the close of the next Annual Member of the Supervisory Board and Member of the Board of Directors, Chair of
Vaisala Corporation. into account shareholders’ expectations the Compensation Committee and member
General Meeting. Sari Baldauf, Bruce Brown, and feedback in this regard. Member of the Nomination Committee of
Thomas Dannenfeldt, Jeanette Horan, Edward The Corporate Governance and Nomination of the Nominating and Corporate Governance Bruce Brown
Mercedes-Benz Group AG. Member of the
Kozel, Søren Skou, Carla Smits-Nusteling Committee will propose in the assembly Further, while the Finnish market practice is to Board of Directors of Aalto University. Senior Committee of the Glatfelter Company.
and Kari Stadigh were re-elected as Board meeting of the new Board of Directors that vote on the proposed Board composition as a Advisor of DevCo Partners Oy. Member of the Member of the Board of Directors, the Audit
members. Following the meeting, the Board Sari Baldauf be re-elected to serve as Chair slate, some of our investors have expressed Board of Directors of Demos Helsinki. Vice Committee and the Compensation
re-elected Sari Baldauf to serve as Chair and of the Board and Søren Skou to serve as the their preference of being able to vote on Chair of the Board of Directors and Member Committee of Medpace Inc 2016–2019.
Kari Stadigh as Vice Chair of the Board for a new Vice Chair of the Board, subject to their directors individually. Nokia has been actively of the Executive Committee of Technology Member of the Board of Directors of Agency
term ending at the close of the next Annual election to the Board of Directors. involved in the initiative to supplement Industries of Finland. for Science, Technology & Research (A*STAR)
General Meeting. the market practice as well as the Finnish in Singapore 2011–2018.
The current and proposed members of the Corporate Governance Code to enable also Member of the Supervisory Board of
Proposals of the Board of Directors to the Board are all non-executive. For the term that individual director election method in Finland. Deutsche Telekom AG 2012–2018. Chair of
Annual General Meeting 2022 were published began at the Annual General Meeting 2021 We plan to be among the first Finnish the Board of Directors of Fortum Corporation Thomas Dannenfeldt
on 3 February 2022. On the recommendation and for the term beginning at the Annual companies to introduce this election method 2011–2018. Member of the Board of b. 1966
of the Board’s Corporate Governance and General Meeting 2022, all Board member once that will be feasible to implement in Directors of Akzo Nobel 2012–2017. Nokia Board member since 2020. Member
Nomination Committee, the Board proposes candidates have been determined to be of the Audit Committee and the Technology Thomas Dannenfeldt
the future Annual General Meetings to be
to the Annual General Meeting that the independent of Nokia and its significant organized under the Finnish Companies Act Committee.
number of Board members be ten. Kari shareholders under the Finnish corporate Vice Chair Kari Stadigh
instead of the temporary COVID-19 legislation b. 1955
Stadigh has informed that he will no longer governance rules and the rules of the NYSE, Degree in Mathematics, University of Trier,
followed in 2020–2022. Vice Chair of the Nokia Board since 2020.
be available to serve on the Nokia Board of as applicable. Any possible changes impacting Germany.
Directors after the Annual General Meeting. the independence assessment would be Board member since 2011. Chair of the
Corporate Governance and Nomination Chief Financial Officer of Deutsche Telekom
Consequently, the Board proposes, on the assessed as of the date of the Annual
Committee and member of the Personnel AG 2014–2018. Chief Financial Officer of
recommendation of the Board’s Corporate General Meeting.
Committee. Deutsche Telekom’s German operations
Governance and Nomination Committee, that
2010–2014. Various operational positions
the following seven current Board members Master of Science (Eng.), Helsinki University of (sales, marketing, customer care, finance and
be re-elected as members of the Nokia Board Technology, Finland. Bachelor of Business procurement in fixed and mobile business,
of Directors for a term ending at the close of Administration, Hanken School of Economics, national and international positions) at
the next Annual General Meeting: Sari Baldauf, Helsinki, Finland. Deutsche Telekom 1992–2010.
Bruce Brown, Thomas Dannenfeldt,
Jeanette Horan, Edward Kozel, Søren Skou Group CEO and President of Sampo plc Chair of the Supervisory Board of Ceconomy
and Carla Smits-Nusteling. 2009–2019. Deputy CEO of Sampo plc AG and Chair of the Presidential Committee,
2001–2009. President of Sampo Life Nomination Committee and Mediation
Insurance Company Limited 1999–2000. Committee. Member of the Board of Advisors
President of Nova Life Insurance Company Ltd at axxessio GmbH.
1996–1998. President and COO of Jaakko
Pöyry Group 1991–1996. Member of the Board of Directors of T-Mobile
US 2013–2018 and Buy-In 2013–2018.
Chair of the Board of Directors of Metso Chair of the Board of Directors of T-Systems
Outotec Corporation and member of the International 2013–2018 and EE 2014–2016.
Remuneration and HR Committee. Chair of
the Board of Directors of Saxo Bank Group.
Chair of the Board of Directors of Mandatum
Life Insurance Company Limited 2001–2019.

continued
Operations of the Board of Directors In risk management, the Board’s role environmental and social developments and
Jeanette Horan Søren Skou Jeanette Horan
The Board represents and is accountable to includes risk analysis and assessment activities in the Company in their respective
b. 1955 b. 1964
the shareholders of Nokia. While its ultimate in connection with financial, strategy areas of responsibilities. During 2021, the
Nokia Board member since 2017. Member CEO of A.P. Møller – Mærsk A/S. Nokia Board
statutory accountability is to the shareholders, and business reviews, updates and Audit Committee’s responsibilities included,
of the Audit Committee and the Technology member since 2019. Member of the
the Board also takes into account the interests decision-making proposals. Risk management amongst others, the implementation planning
Committee. Personnel Committee.
of the Nokia’s other stakeholders. The Board’s policies and processes are an integral part of of new climate and other sustainability
MBA, Business Administration and MBA (honours), IMD, Switzerland. Business responsibilities are active, not passive, and Board deliberations and risk-related updates reporting requirements, as well as oversight
Management, Boston University, the United Administration, Copenhagen Business School, include the responsibility to evaluate the are provided to the Board on a recurring basis. of the ethics and compliance program and
States. BSc, Mathematics, University of Denmark. Maersk International Shipping strategic direction of Nokia, its management For a more detailed description of our risk cybersecurity risks and maturity. The Audit
London, the United Kingdom. Education (M.I.S.E.). policies and the effectiveness of the management policies and processes, refer Committee also annually reviews sustainability
implementation of such by the management to “Risk management, internal control disclosures as well as the use of conflict
Various executive and managerial positions Chief Executive Officer of Maersk Line on a regular basis. It is the responsibility of the and internal audit functions at Nokia— minerals in Nokia’s products presented in the
at IBM 1998–2015. Vice President of Digital 2012–2016. Chief Executive Officer of Maersk members of the Board to act in good faith and Main features of risk management systems”. annual reports and the related regulatory
Equipment Corporation 1994–1998. Vice Tankers 2001–2011. Variety of executive with due care, so as to exercise their business filings. The Personnel Committee assists the
President, Development of Open Software roles, senior positions and other roles at A.P. Edward Kozel judgment on an informed basis, in a manner The Board has the responsibility for Board in the incorporation of the ESG-related
Foundation 1989–1994. Møller – Mærsk since 1983. that they reasonably and honestly believe appointing and discharging the President, metrics in the incentive structures and
to be in the best interests of Nokia and its the Chief Executive Officer, Chief Financial oversees the human capital management,
Member of the Supervisory Board at Wolters Member of The European Round Table Officer and Chief Legal Officer. Since
Kluwer, and the Chair of the Remuneration for Industry. shareholders. In discharging this obligation, including personnel policies and practices
the members of the Board must inform August 2020, Pekka Lundmark has served related to Nokia culture, employee wellbeing,
Committee. Member of the Board of Advisors as the President and CEO. His rights and
at Jane Doe No More, a non-profit themselves of all relevant information diversity, recruiting, development and
Carla Smits-Nusteling reasonably available to them. The Board and responsibilities include those allotted to the retention. Corporate Governance and
organization. Member of the Board of President under Finnish law and he also chairs
Directors of the Ridgefield Symphony b. 1966 each Board Committee also have the power Nomination Committee assesses and advises
Nokia Board member since 2016. Chair of to appoint independent legal, financial or the Group Leadership Team. the Board in the environmental, social and
Orchestra, a non-profit organization.
the Audit Committee and member of the other advisors as they deem necessary. The Board approves and the independent governance (ESG) related activities and
Member of the Board of Advisors of Corporate Governance and Nomination The Company will provide sufficient funding to directors of the Board confirm the practices aiming to enhance governance
Cybereason 2017–2018. Member of the Committee. the Board and to each Committee to exercise compensation and terms of employment structure supporting them. The Technology
Board of Directors of West Corporation their functions and provide compensation of the President and CEO, subject to the Committee reviews how sustainability is
2016–2017 and Microvision 2006–2017. Master’s Degree in Business Economics, Søren Skou for the services of their advisors. requirements of Finnish law, upon the embedded into our technology strategy
Erasmus University Rotterdam, the
recommendation of the Personnel and roadmaps.
Netherlands. Executive Master of Finance The Board is ultimately responsible for, and
Edward Kozel and Control, Vrije University Amsterdam, its duties include, monitoring and reviewing Committee of the Board. The compensation Board evaluation
b. 1955 the Netherlands. Nokia’s financial reporting process, the and terms of employment of the other Group In line with our Corporate Governance
Nokia Board member since 2017. Chair of the effectiveness of related control and audit Leadership Team members are approved Guidelines, the Board conducts an annual
Technology Committee and member of the Member of the Board of Directors and Chief by the Personnel Committee upon the
functions and the independence of Nokia’s performance evaluation, which also includes
Audit Committee. Financial Officer of KPN 2009–2012. Various recommendation of the President and CEO.
external auditor, as well as monitoring the evaluation of the Board Committees’ work,
financial positions in KPN 2000–2009. Various
Company’s statutory audit. The Board’s Board oversight of environmental and social the Board and Committee Chairs and
Degree in Electrical Engineering and financial and operational positions in TNT/PTT
responsibilities also include overseeing the activities and governance practices (ESG) individual Board members. The Board
Computer Science, University of California, Post 1990–2000.
structure and composition of our top Under our Corporate Governance Guidelines, evaluation is conducted as a self-evaluation
the United States.
Chair of the Board of Directors of TELE2 AB. management and monitoring legal compliance the Board evaluates Nokia’s environmental and while an external evaluator is periodically
President and CEO of Range Networks Member of the Board of Directors, Chair of and the management of risks related to our social activities and governance practices engaged. Feedback is also requested from
2013–2014. Owner of Open Range the Audit Committee and member of the Carla Smits-Nusteling operations. In doing so, the Board may set (ESG), related risks and target setting as well as selected members of management as part
2000–2013. Chief Technology and Innovation Remuneration and Nomination Committee annual ranges and/or individual limits for their implementation and effectiveness in the of the Board evaluation process. Each year,
Officer and member of the Board of of Allegro.eu SA. Member of the Board of capital expenditures, investments and Company. In 2021, the Board approved the the results of the evaluation are discussed
Management of Deutsche Telekom Directors of the Stichting Continuïteit Ahold divestitures and other financial and select key ESG targets on climate change and and analyzed by the entire Board and
2010–2012. CEO of Skyrider 2006–2008. Delhaize (SCAD) foundation. Lay Judge in the non-financial commitments that may not be diversity included in the short-term incentive improvement actions are agreed based on
Managing Director of Integrated Finance Enterprise Court of the Amsterdam Court of exceeded without a separate Board approval. program and also reviewed the evolving ESG such discussion. In 2021, the evaluation
2005–2006. Senior Vice President, Business Appeal since 2015. requirements and expectations, investor process was carried out by an external
development and Chief Technology Officer feedback and the disclosure approach. In evaluator and included both a written
and Board member of Cisco 1989–2001. Member of the Supervisory Board and Chair questionnaire and interviews.
of the Audit Committee of ASML 2013–2021. addition, the Board Committees monitor
Member of the Advisory Board at Telia Member of the Management Board of the
Ventures. Unilever Trust Office 2015–2019. Meetings of the Board of Directors
The Board held 12 meetings excluding Committee meetings during 2021. Approximately 67% of these meetings were regular meetings
Various Board memberships in 1999–2009.
in person or by video connection. In 2021, the meetings were mainly conducted by video connection as a consequence of the COVID-19
pandemic. The other meetings were held in writing.
Meetings in person/ Meetings Attendance in

by video in writing all meetings %
Full Board 8 4 99
Audit Committee 7 0 96
Corporate Governance and Nomination Committee 4 0 100
Personnel Committee 5 0 100
Technology Committee 4 0 100

continued
Directors’ attendance at the Board and Committee meetings in 2021 is set forth in the table below: In discharging its oversight role, the Audit The Audit Committee meets a minimum of The Corporate Governance and Nomination
Committee has full access to all Company four times a year. The Committee meets Committee
Corporate books, records, facilities and personnel. The separately with the representatives of Nokia’s The Committee consists of three to five
Governance Audit Committee also maintains procedures management, heads of the internal audit, and members of the Board who meet all applicable
Audit and Nomination Personnel Technology
Board Committee Committee Committee Committee for the receipt, retention and treatment of ethics and compliance functions, and the independence requirements as stipulated by
meetings meetings meetings meetings meetings complaints received by Nokia regarding external auditor in connection with each Finnish law and the rules of Nasdaq Helsinki
% % % % %
accounting, internal controls, or auditing regularly scheduled meeting. The head of the and the NYSE. As of 8 April 2021 the
Sari Baldauf (Board Chair) 100 100 100 100 matters and for the confidential, anonymous internal audit function has, at all times, direct Corporate Governance and Nomination
Kari Stadigh (Board Vice Chair) 100 100 100 submission by our employees of concerns access to the Audit Committee, without the Committee has consisted of the following
Bruce Brown 100 100 100 100 relating to accounting or auditing matters. involvement of management. four members of the Board: Kari Stadigh
Thomas Dannenfeldt 100 100 100 Nokia’s disclosure controls and procedures, (Chair), Sari Baldauf, Bruce Brown and
Audit Committee pre-approval policies Carla Smits-Nusteling.
Jeanette Horan 100 100 100 which are reviewed by the Audit Committee
and procedures
and approved by the President and CEO and
Edward Kozel 92 86 100 The Audit Committee of the Board is The Committee fulfills its responsibilities by:
the Chief Financial Officer, as well as the
Elizabeth Nelson (until 8 April 2021) 100 100 100 responsible, among other matters, for
internal controls over financial reporting, are ■ actively identifying individuals qualified to
Søren Skou 100 100 oversight of the external auditor’s
designed to provide reasonable assurance be elected members of the Board as well as
Carla Smits-Nusteling 100 100 100 independence, subject to the requirements
regarding the quality and integrity of Nokia’s considering and evaluating the appropriate
of applicable legislation. The Audit Committee
financial statements and related disclosures. level and structure of director
has adopted a policy regarding an approval
Additionally, many of the directors attended, meet separately at least once annually. In 2021, Only the Chair of the Board Sari Baldauf For further information on internal control remuneration;
procedure of audit services performed by
as non-voting observers, meetings of a all members of the Board were non-executive and the President and CEO Pekka Lundmark over financial reporting, refer to “Risk
the external auditors of Nokia Group and ■ preparing and evaluating the principles
Committee of which they were not a member. and determined to be independent from were present in person. management, internal control and internal
permissible non-audit services performed regarding Board diversity;
Nokia and significant shareholders under the audit functions at Nokia–Description of
Committees of the Board of Directors by the principal external auditor of the
Directors meet without the management in Finnish corporate governance standards and internal control procedures in relation to ■ preparing proposals to the shareholders
The Board of Directors has four committees Nokia Group (the “Pre-approval Policy”).
connection with each regularly scheduled the rules of the NYSE. the financial reporting process”. on the director nominees for election at
meeting. According to Board practices, that assist the Board in its duties pursuant Under the Pre-approval Policy, proposed the general meetings as well as director
meetings without management present are In the continued effort to prevent the spread to their respective committee charters. The Under Finnish law, an external auditor is
services either: (i) may be pre-approved by remuneration;
only attended by non-executive directors. of the COVID-19 pandemic, the Board of Board may also establish ad hoc committees elected by a simple majority vote of the
the Audit Committee in accordance with
These meetings are chaired by the Directors resolved pursuant to the temporary for detailed reviews or consideration of shareholders at the Annual General Meeting ■ monitoring significant developments in the
certain service categories described in the
non-executive Chair of the Board. In case the legislation approved by the Finnish Parliament particular topics to be proposed for the for one year at a time. The Audit Committee law and practice of corporate governance,
Pre-approval Policy (general pre-approval);
non-executive Chair of the Board is unable on 3 October 2020, to hold the Annual approval of the Board. Any director who so prepares the proposal to the shareholders, including the sustainability-related
or (ii) require the specific pre-approval of the
to chair these meetings, the non-executive General Meeting 2021 without the presence wishes may attend, as a non-voting observer, upon its evaluation of the qualifications and governance trends and of the directors’
Audit Committee (specific pre-approval).
Vice Chair of the Board chairs the meeting. of shareholders, their proxy representatives, meetings of committees of which they are independence of the external auditor, of the duties and responsibilities;
The Pre-approval Policy sets out the audit,
Additionally, the independent directors would the Board and the senior management. not members. nominee for election or re-election. Under
audit-related, tax and other services that have ■ assisting the Board and each Committee
Finnish law, the fees of the external auditor
received the general pre-approval of the Audit of the Board in its annual performance
are also approved by the shareholders by a
Committee. All other audit, audit-related evaluations, including establishing criteria
simple majority vote at the Annual General
Board of Directors Meeting. The Committee prepares the
(including services related to internal controls to be applied in connection with such
and significant mergers and acquisitions evaluations;
Corporate Governance and proposal to the shareholders in respect of
projects), tax and other services are subject to
Audit Committee Nomination Committee Personnel Committee Technology Committee the fees of the external auditor, and approves
specific pre-approval by the Audit Committee. ■ developing and administering Nokia’s
Oversees the accounting and Prepares the proposals for the Oversees the human capital Reviews key innovation and the external auditor’s annual audit fees under
All service requests concerning generally Corporate Governance Guidelines and
financial as well as non-financial general meetings in respect of the management related policies technology initiatives of Nokia the guidance given by the Annual General
pre-approved services are submitted to an giving recommendations regarding them
reporting processes of Nokia composition of the Board and the and practices at Nokia. Assists which are formulated by the Meeting. For information about the fees
appointed Audit Committee delegate within to the Board; and
and the audits of its financial director remuneration to be the Board in discharging its management. paid to Nokia’s external auditor, Deloitte Oy,
management, who determines whether the
statements as well as the approved by the shareholders, responsibilities in relation to during 2021 refer to “Auditor fees and ■ reviewing Nokia’s disclosure in the
services are within the services generally
internal controls and and monitors issues and practices all compensation and related services” below. corporate governance statement.
pre-approved services. The Pre-approval
compliance program. related to corporate governance reporting, including equity The Board has determined that all members Policy is subject to annual review by the The Committee has the power and practice
and proposes necessary actions compensation, of Nokia’s of the Audit Committee, including its Chair, Audit Committee. to appoint a recruitment firm to identify
in respect thereof. executives and their terms Carla Smits-Nusteling, are “audit committee
The Audit Committee establishes budgeted appropriate new director candidates.
of employment. financial experts” as defined in the
fee levels annually for each of the categories
requirements of Item 16A of the Annual
of audit and non-audit services that are
The Audit Committee The Committee is responsible for assisting ■ the performance of the Company’s internal Report on Form 20-F filed with the U.S.
pre-approved under the Pre-approval Policy,
The Committee consists of a minimum of the Board in the oversight of: controls, risk management and the Securities and Exchange Commission (SEC).
namely, audit, audit-related, tax and other
three members of the Board who meet all assurance function; Ms. Smits-Nusteling and each of the other
■ the quality and integrity of the Company’s services. At each regular meeting of the Audit
applicable independence, financial literacy and members of the Audit Committee are
financial and non-financial statements and ■ the performance of the internal audit Committee, the auditor provides a report in
other requirements as stipulated by Finnish “independent directors” as defined by Finnish
related disclosures; function; order for the Audit Committee to review the
law and the rules of Nasdaq Helsinki and the law, the Finnish Corporate Governance Code
services that the auditor is providing, as well
NYSE. As of 8 April 2021, the Audit Committee ■ the statutory audit of the Company’s ■ the Company’s compliance with legal and and in Section 303A.02 of the NYSE Listed
as the cost of those services.
has consisted of the following four members financial statements; including the regulatory requirements, including the Company Manual.
of the Board: Carla Smits-Nusteling (Chair), sustainability reporting therein; performance of its ethics and compliance
Thomas Dannenfeldt, Jeanette Horan and program; and
Edward Kozel. ■ the external auditor’s qualifications and
independence; ■ the pension liabilities, taxation and
cybersecurity of the Company.
■ the performance of the external auditor
subject to the requirements of Finnish law;

continued
The Personnel Committee The Committee also oversees human capital ■ the Company’s approach to major Biographical details of the Nassib Abou-Khalil Ricky Corker Pekka Lundmark
The Committee consists of a minimum of management and periodically reviews the technological innovations; current members of the Nokia b. 1972 b. 1967
three members of the Board who meet all personnel policies and practices of Nokia Group Leadership Team Chief Legal Officer (CLO). Group Chief Customer Experience
related to human capital management ■ key technology trends that may result
applicable independence requirements as Leadership Team member since Officer (CCXO). Group Leadership
and social responsibilities relating to its in disruptive threats or opportunities
stipulated by Finnish law and the rules of Pekka Lundmark 2019. Joined Nokia in 2014. Team member since 2019.
employees , including Company culture, and the proposals on how to adequately
Nasdaq Helsinki and the NYSE. As of 8 April b. 1963 Joined Nokia in 1993.
occupational safety, employee wellbeing, address them; Bachelor of Arts (Political
2021 the Personnel Committee has consisted President and Chief Executive
of the following four members of the Board: morale, diversity, equity and inclusion, talent ■ high-level risks and opportunities Officer (CEO) since 2020. Sciences), Civil Law (LL.L.), Bachelor in Communications
Bruce Brown (Chair), Sari Baldauf, Søren Skou management and development, succession associated with the Company’s Research Rejoined Nokia in 2020. Common Law (LL.B.) and Master and Electronic Engineering from
and Kari Stadigh. planning, resourcing, recruiting , attrition, and Development Programs; and of Law (LL.M), University of the Royal Melbourne Institute
retention and employee engagement. Master of Science, Department Ottawa, Canada. of Technology, Australia.
The Committee has overall responsibility ■ embedding sustainability in the technology of Technical Physics, Helsinki
for evaluating, resolving and making The Technology Committee roadmaps. University of Technology, Finland. Deputy Chief Legal Officer, President of Customer
recommendations to the Board regarding: The Committee consists of a minimum Business, Nokia 2019. General Operations, Americas, Nokia,
of three members of the Board who meet Group Leadership Team and the President and CEO, Fortum Counsel, Customer Operations, 2019–2020. Executive Vice Nassib Abou-Khalil
■ preparing the Remuneration Policy and the applicable independence requirements as Corporation 2015–2020. Nokia 2016–2019. Head of President and President of North
Remuneration Report; President and CEO President and CEO, Konecranes
stipulated by Finnish law and the rules of We have a Group Leadership Team that is Legal & compliance, MEA, Nokia America, Nokia, 2011–2018. Head
Nasdaq Helsinki and the NYSE and have such Plc 2005–2015 and Group 2014–2015. Head of Public Policy, of Asia Pacific, Nokia Siemens
■ compensation and terms of employment responsible for the operative management Executive Vice President
of the Company’s senior management; skills in innovation, technology and science of Nokia. The Board appoints the Chair of Europe, Middle East & Africa, Networks, 2009–2011. Head of
matters as the Board determines adequate 2004–2005. President and CEO, and General Counsel, Middle East Asia North Region, Nokia Siemens
the Group Leadership Team. The Group Hackman Oyj Abp 2002–2004.
■ all equity-based plans; from time to time. As of 8 April 2021 the Leadership Team is chaired by the President & Africa, Yahoo!, 2010–2014. Networks, 2008–2009. Head of
Technology Committee has consisted of Managing Partner, Startupfactory Regional Counsel, Middle East Hutchison Global Customer
■ incentive compensation plans, policies and and CEO. The President and CEO’s rights and 2000–2002. Various executive
programs of the Company affecting the following four members of the Board: responsibilities include those allotted to the & Africa and India, GE Oil & Gas, Business Team, Nokia Siemens
Edward Kozel (Chair), Bruce Brown, positions at Nokia 1990–2000. 2007–2010. Regulatory Counsel, Networks, 2007–2008. Vice
executives; and President under Finnish law.
Thomas Dannenfeldt and Jeanette Horan. Commissioner, Broadband Etisalat, 2006–2007. Various legal President Asia Pacific, Nokia
■ possible other significant incentive plans. On 31 December 2021, the Group Leadership Commission for Sustainable counsel roles, TMF Netherlands Networks, 2005–2007. Lead Sales
In its dialogue with and provision of opinions Team consisted of 11 members, including 2002–2006. Legal articling, Director Asia Pacific, Nokia
The Committee is responsible for preparing and advice to the management, the Development. Member of the
the President and CEO, representing eight Board, Research Institute of the Fasken Martineau 1999–2001. Networks, 2004–2005. Account Nishant Batra
the Remuneration Policy, including Nokia’s Committee will periodically review: different nationalities. In total 27% of the Director Telstra, Nokia Networks,
compensation philosophy and principles and Finnish Economy (ETLA) and Member of the Board, Vice Chair
■ the Company’s technological Group Leadership Team members were Finnish Business and Policy Forum 2002–2003. Account Director
ensuring that the Company’s compensation female and 9% non-binary. of the Governance Committee Vodafone Australia and New
programs are performance-based, designed competitiveness and new strategic (EVA). International Member of and Member of the Risk
technology initiatives as well as market the Academy, Royal Swedish Zealand, and Sales Director
to contribute to long-term shareholder value Committee, Global Legal Entity Vodafone Asia Pacific Customer
creation in line with shareholders’ interests, trends, considering both organic as well Academy of Engineering Sciences Foundation (GLEIF).
as inorganic options to retain or attain (IVA). Member of the Board, Business Team, Nokia Networks,
properly motivate management, are aligned 2001–2002. Commercial Director
with the Remuneration Policy as well as competitiveness; Finnish Athletics Federation.
Nishant Batra Global Accounts British Telecom,
support overall corporate strategies. Chairman of the Board, Nokia Networks, 2001. Senior
b. 1978
Confederation of Finnish Chief Strategy and Technology sales and marketing positions
Industries, 2019–2020. Member Officer (CSTO). Group Leadership at Nokia, 1993–2001.
Name Position Gender Year of birth Nationality On GLT since of the Board, East Office of Team member since 2021.
Pekka Lundmark President and CEO Male 1963 Finnish 2020 Finnish Industries, 2009–2020. Joined Nokia in 2021. Ricky Corker
Nassib Abou-Khalil Chief Legal Officer Non-binary 1972 Dutch 2019 Chairman of the Board,
Nishant Batra Chief Strategy and Technology Officer Male 1978 Indian 2021 Finnish Energy, 2016–2018. MBA from INSEAD. Master’s
degree in Telecommunications
Ricky Corker Chief Customer Experience Officer Male 1967 Australian 2019
and a master’s degree in
Federico Guillén President of Network Infrastructure Male 1963 Spanish 2016 Computer Science, Southern
Jenni Lukander President of Nokia Technologies Female 1974 Finnish 2019 Methodist University, Dallas, the
Raghav Sahgal President of Cloud and Network Services Male 1962 American 2020 United States. Bachelor’s degree
Melissa Schoeb Chief Corporate Affairs Officer Female 1968 American 2021 in Computer Applications,
Tommi Uitto President of Mobile Networks Male 1969 Finnish 2019 Devi Ahilya University, Indore,
Stephanie Werner-Dietz Chief People Officer Female 1972 German 2020 Madhya Pradesh, India.
Marco Wirén Chief Financial Officer Male 1966 Finnish/Swedish 2020 Previously Executive Vice
President and Chief Technology
Officer, Veoneer, Inc. 2018–2021.
Prior to Veoneer Inc. held several
senior positions at Ericsson,
2006–2016 in the United States,
Sweden and India.
Independent member of the
Board of Directors of Sensys
Gatso Group.

continued
Federico Guillén Jenni Lukander Melissa Schoeb Federico Guillén Tommi Uitto Tommi Uitto Stephanie Werner-Dietz Marco Wirén
b. 1963 b. 1974 b. 1968 b. 1969 b. 1972 b. 1966
President of Network President of Nokia Technologies. Chief Corporate Affairs Officer President of Mobile Networks. Chief People Officer (CPO). Group Chief Financial Officer (CFO).
Infrastructure. Group Leadership Group Leadership Team member (CCAO). Group Leadership Team Group Leadership Team member Leadership Team member since Group Leadership Team member
Team member since 2016. since 2019. Joined Nokia in 2007. member since 2021. Joined Nokia since 2019. Joined Nokia in 1996. 2020. Joined Nokia in 1998. since 2020. Joined Nokia in 2020.
Joined Nokia in 2016. in 2021.
Master of Laws, University of Master’s degree in industrial Diploma in Applied business Master’s degree in Business
Degree in Telecommunications Helsinki, Finland. Bachelor of Arts in International management, Helsinki languages (Chinese) and Administration, University of
Engineering, ETSIT at Universidad Relations and Spanish, University University of Technology, Finland. International business studies, Uppsala, Sweden. Studies in
Politécnica de Madrid, Spain. Senior Vice President, Head of Mary Washington, Virginia, Master’s degree in operations University of Applied Sciences, management and strategic
Master’s degree in Switching & of Patent Business, Nokia the United States. Fellowship management, Michigan Bremen, Germany. leadership, including at Duke
Communication Architectures, 2018–2019. Vice President, Head Recipient, Four Freedoms Technological University, Business School, the United
ETSIT at Universidad Politécnica of Patent Licensing, Nokia 2018. Foundation, Rome, Italy. the United States. Vice President, Global HR Center States, IMD, Switzerland and
de Madrid, Spain. Master’s Degree Vice President, Head of Litigation of Expertise, Nokia, 2018–2019. Stockholm School of Economics,
and Competition Law, Nokia Vice President, Corporate Affairs, Jenni Lukander Stephanie Werner-Dietz Senior Vice President, Global Vice President, Business HR Head
in International Management, Sweden.
ESC Lyon and Alcatel, France. 2016–2018. Director, Head of Occidental, 2017–2021. Vice Product Sales, Mobile Networks, for Nokia Corporate Functions,
Regulatory and Competition Law, President, Communications Nokia 2016–2018. Senior Vice Nokia, 2016–2018. Head of President, Wärtsilä Energy and
President of Customer Nokia 2015–2016. Director, and Public Affairs, Occidental, President, Global Mobile Business HR for Chief Finance and Executive Vice President, Wärtsilä
Operations, Europe, Middle East Head of Competition Law, 2012–2017. Senior Director, Broadband Sales, Customer Operations Officer/Organization, Group, 2018–2020. Executive
& Africa and Asia Pacific, Nokia, Nokia 2011–2015. Senior Legal Communications and Public Operations, Nokia Networks, Nokia, 2012–2015. Head of Nokia Vice President and CFO, Wärtsilä
2018–2020. President of Fixed Counsel, Nokia 2007–2011. Affairs, Occidental, 2007–2012. 2015–2016. Senior Vice Siemens Networks Business Group, 2013–2018. Executive
Networks, Nokia, 2016–2018. Visiting lawyer, Nokia, 2001. Senior Vice President and President, West Europe, Talent, Leadership & Organization Vice President and CFO, SSAB
President of Fixed Networks, Lawyer, Roschier Ltd. 1999–2007. Senior Partner, General Manager Customer Operations, Nokia Development, Nokia Siemens Group, 2008–2013. Vice
Alcatel-Lucent, 2013–2016. and other senior positions, Networks, 2013–2015. Head Networks, 2011–2012. Head of President, Business Control,
President and Chief Senior Officer FleishmanHillard 2002–2007. of Radio Cluster (Senior Vice Business HR, Nokia Radio Access, SSAB Group, 2007–2008. CFO,
of Alcatel-Lucent Spain and Global Raghav Sahgal Director of Global President), Mobile Broadband, 2007–2011. Head of HR Emerging Eltel Networks, 2006–2007.
Account Manager Telefónica, b. 1962 Communications, Nortel Nokia Siemens Networks, Markets, Romania, Nokia, 2007. Vice President of Business
Alcatel-Lucent, 2009–2013. Vice President of Cloud and Network Networks, 2000–2002. Raghav Sahgal Marco Wirén 2012–2013. Head of Global LTE Senior HR Manager, Strategic development, Eltel Networks,
President Sales of Vertical Market Services. Group Leadership Team Vice President, Technology, Radio Access Business Line (Vice Projects, US, Nokia, 2004–2006. 2004–2005. Head of Service
Sales in Western Europe, member since 2020. Joined Nokia FleishmanHillard, 1998–2000. President) and Quality, Mobile HR Manager Global Platforms, Division, Eltel Networks,
Alcatel-Lucent, 2009. Head of in 2017. Business Director, The VenCom Broadband, Nokia Siemens Nokia, 2001–2004. HR Country 2003–2004. Vice President,
Regional Support Center, Fixed Master of Science in Computer Group Inc, 1995–1997. Networks, 2011–2012. Head of Manager for the Philippines, Corporate Development, Eltel
Access Division for South Europe, Systems Management, University Consultant, London United Product Management, Network Nokia, 1999–2001. HR Manager, Networks, 2002–2003. Vice
Middle East & Africa, India and of Maryland, the United States. Kingdom and Washington DC, Systems, Nokia Siemens Nokia Networks for Switzerland, President, Strategy & Business
Caribbean & Latin America, Bachelor of Science in Computer the United States, Gemini Networks, 2010. Head of Product Nokia, 1998–1999. Development, NCC Group,
Alcatel-Lucent, 2007–2009. Engineering, Tulane University, Consulting, 1991–1995. Management, Radio Access, 1999–2002. Head of Strategic
President and Chief Senior New Orleans, the United States. Nokia Siemens Networks, 2009. Planning, NCC Group, 1998–1999.
Officer, Alcatel Mexico and Member of the Arthur Page Head of WCDMA/HSPA and Radio Group Controller, NCC Group,
Executive Business Certificate in Society and The Seminar. Member
Global Account Manager, General Management, Harvard Platforms Product Management, 1996–1998.
Telmex, 2003–2007. Various R&D, of Mary Washington University Nokia Siemens Networks, 2008.
University, the United States. College of Business Executive Vice Chair of the Board of
portfolio and sales management Melissa Schoeb Head of WCDMA/HSPA Product
positions with Telettra in Spain, President of Nokia Enterprise, Advisory Board. Line Management, Nokia Siemens Directors and Chair of the Audit
and then with Alcatel in Spain, 2020. Senior Vice President, Networks, 2007. General Committee, Neste Corporation.
Belgium and the United States Nokia Software, 2017–2020. Manager, Radio Controller Product
1989–2003. President, NICE Ltd. Asia Pacific Management, Nokia Networks,
and the Middle East, 2010–2017. 2005–2007. Director, Sales &
Advisory Board Member, Orga Marketing (Lead Sales Director),
Systems, 2010–2014. Vice France Telecom/Orange
President, Communications Nokia Networks, 2002–2005.
Business Unit, Asia Pacific & Operations Director, Northeast
Japan, Oracle, 2008–2010. Europe, Central & Eastern Europe
Chief Business Officer, Comverse, and Middle East, Nokia Networks,
2005–2006. Executive Vice 1999–2002.
President, Asia Pacific, CSG,
2002–2005. Vice President,
Software Products Group Asia
Pacific, Lucent Technologies,
2000–2002.

continued
Summary of changes in the Group Share ownership of the Board of Directors and the Group Risk management, internal Description of internal control Further, the management has also:
Leadership Team in 2021 and thereafter procedures in relation to the financial
During 2021, the Group Leadership Team was Leadership Team control and internal audit ■ assessed the design of the controls in place
reporting process aimed at mitigating the financial reporting
complemented with two new appointments: The following table sets forth the number of shares and American Depositary Shares (ADS) held functions at Nokia The management is responsible for risks;
by the members of the Board as at 31 December 2021, when they held a total of 1 116 075
■ Nishant Batra, Chief Strategy and shares and ADSs in Nokia, which represented approximately 0.02% of our total shares and Main features of risk management establishing and maintaining adequate
Technology Officer as of 18 January 2021; internal control over Nokia’s financial ■ tested operating effectiveness of all key
voting rights excluding shares held by Nokia Group. systems controls; and
and We have a systematic and structured reporting. Our internal control over financial
Name Shares(1) ADSs(1) approach to risk management. Key risks and reporting is designed to provide reasonable ■ evaluated all noted deficiencies in internal
■ Melissa Schoeb, Chief Corporate Affairs assurance to the management and the Board
opportunities are primarily identified against controls over financial reporting in the
Officer as of 12 April 2021. Sari Baldauf (Board Chair) 206 931 regarding the reliability of financial reporting
business targets either in business operations interim and as of year-end.
Kari Stadigh (Board Vice Chair) 328 058 or as an integral part of strategy and financial and the preparation and fair presentation
Furthermore, the following changes took
place within the Group Leadership Team: Bruce Brown 185 656 planning. Risk management covers strategic, of published financial statements. In 2021, Nokia has followed the procedures
Thomas Dannenfeldt 63 677 operational, financial, compliance and as described above and has reported on
■ Ricky Corker, President of Customer The management conducts a yearly the progress and assessments to the
Jeanette Horan 79 008 hazard risks. Key risks and opportunities assessment of Nokia’s internal controls over
Operations, Americas, was appointed are analyzed, managed and monitored as management and to the Audit Committee
Edward Kozel 106 070 financial reporting in accordance with the
Chief Customer Experience Officer as part of business performance management of the Board on a quarterly basis.
of 1 January 2021; Søren Skou 49 092 Committee of Sponsoring Organizations
with the support of risk management
Carla Smits-Nusteling 97 583 framework (the “COSO framework”, 2013) Description of the organization of the
■ Federico Guillén, President of Customer personnel and the centralized Enterprise Risk and the Control Objectives for Information
Management function. internal audit function
Operations, EMEA & APAC, was appointed (1) The number of shares or ADSs includes shares and ADSs received as director compensation as well as shares and ADSs acquired and Related Technology (COBIT) framework We also have an internal audit function that
through other means. Stock options or other equity awards that are deemed as being beneficially owned under the applicable SEC
President of Network Infrastructure as rules are not included. The principles documented in the Nokia of internal controls. The assessment is examines and evaluates the adequacy and
of 1 January 2021; and Enterprise Risk Management Policy, which is performed based on a top-down risk effectiveness of our system of internal
The following table sets forth the number of shares and ADSs held by the President and CEO approved by the Audit Committee of the assessment of our financial statements
■ Raghav Sahgal, President of Nokia control. Internal audit reports to the Audit
and the other members of the Group Leadership Team in office as at 31 December 2021, when Board, require risk management and its covering significant accounts, processes
Enterprise, was appointed President Committee of the Board. The head of the
they held a total of 2 724 205 shares and ADSs in Nokia, which represented approximately elements to be integrated into key processes. and locations, corporate-level controls
of Cloud and Network Services as of internal audit function has direct access to
0.05% of our total shares and voting rights excluding shares held by Nokia Group. One of the core principles is that the business and information systems’ general controls.
1 January 2021. the Audit Committee, without involvement of
or function head is also the risk owner, As part of its assessment, the management the management. The internal audit staffing
Name Position in 2021 Shares(1) ADSs(1)
although all employees are responsible for has documented: levels and annual budget are approved by the
Pekka Lundmark President and CEO 1 232 333 identifying, analyzing and managing risks, Audit Committee. All authority of the internal
Nassib Abou-Khalil Chief Legal Officer 89 446 as appropriate, given their roles and duties. ■ the corporate-level controls, which create audit function is derived from the Board.
Nishant Batra Chief Strategy and Technology Officer 23 528 Our overall risk management concept is based the “tone from the top” containing the The internal audit aligns to the business by
Ricky Corker Chief Customer Experience Officer 272 966 on managing the key risks that would prevent Nokia values and Code of Conduct and business group and function.
us from meeting our objectives, rather than which provide discipline and structure
Federico Guillén President of Network Infrastructure 317 262 Annually, an internal audit plan is developed
focusing on eliminating all risks. In addition to to decision-making processes and ways
Jenni Lukander President of Nokia Technologies 49 654 the principles defined in the Nokia Enterprise of working. Selected items from our with input from the management, taking into
Raghav Sahgal President of Cloud and Network Services 303 925 Risk Management Policy, other key policies operational mode and governance account key business risks and external
Melissa Schoeb Chief Corporate Affairs Officer 86 606 reflect implementation of specific aspects principles are separately documented factors. This plan is approved by the Audit
Tommi Uitto President of Mobile Networks 86 048 of risk management. as corporate-level controls; Committee. Audits are completed across
the business focusing on site level, customer
Stephanie Werner-Dietz Chief People Officer 32 183 ■ the significant processes: (i) give a complete
Key risks and opportunities are reviewed by level, business project level, IT system
Marco Wirén Chief Financial Officer 230 254 the Group Leadership Team and the Board end-to-end view of all financial processes; implementation, IT security, operations
(1) As at 31 December 2021, no ADSs were held by the Group Leadership Team members. The number of shares or ADSs includes
in order to create visibility on business risks (ii) identify key control points; (iii) identify activities or at a Group function level. The
shares and ADSs received as compensation as well as shares and ADSs acquired through other means. Stock options or other as well as to enable prioritization of risk involved organizations; (iv) ensure coverage results of each audit are reported to the
equity awards that are deemed as being beneficially owned under the applicable SEC rules are not included. management activities. Overseeing risk is for important accounts and financial management identifying issues, financial
an integral part of the Board’s deliberations. statement assertions; and (v) enable impact, if any, and the correcting actions
The Board’s Audit Committee is responsible internal control management within Nokia; to be completed. Quarterly, the internal
for, among other matters, risk management audit function communicates the progress
■ the control activities, which consist of
relating to the financial reporting process of the internal audit plan completion,
policies and procedures to ensure the
and assisting the Board’s oversight of the risk including the results of the closed audits,
management’s directives are carried out
management function. The Board’s role in to the Audit Committee.
and the related documentation is stored
overseeing risk includes risk analysis and
according to our document retention Internal audit also works closely with our
assessment in connection with financial,
practices and local statutory requirements; Ethics and Compliance office to review
strategy and business reviews, updates
and any financial concerns brought to light
and decision-making proposals.
from various channels and, where relevant,
■ the information systems’ general controls
works with Enterprise Risk Management
to ensure that sufficient IT general controls,
to ensure priority risk areas are reviewed
including change management, system
through audits.
development and computer operations,
as well as access and authorizations, In 2021, the internal audit plan was materially
are in place. completed. Due to some Covid-19 impacts,
a very small number of audits had to be
rescheduled to 2022. The results of these
reviews, as well as the rescheduling to 2022
were reported to the management and to
the Audit Committee.

continued
Compensation
Related party transactions Persons discharging managerial Nokia has imposed this closed window period
We determine and monitor related parties in responsibilities also on separately designated financial
accordance with the International Accounting Nokia has identified members of the reporting persons who are recurrently
Standards (IAS 24, Related Party Disclosures) Board of Directors and the Group Leadership involved with the preparation of Nokia’s
and other applicable regulations. We maintain Team as persons discharging managerial quarterly and annual results announcements.
information on our related parties as well as responsibilities who, along with persons These persons are separately notified
monitor and assess related party transactions. closely associated with them, are required of their status as designated financial
As a main principle, all transactions should be to notify Nokia and the Finnish Financial reporting persons.
conducted at arm’s-length and as part of the Supervisory Authority of their transactions
ordinary course of business. In exceptional Insider registers
with Nokia’s financial instruments. Nokia
cases where these principles would be Nokia does not maintain a permanent
publishes the transaction notifications.
deviated from, Nokia would set up a separate insider register. Insiders are identified on a
process to determine the related parties in In addition, according to the Nokia Insider case-by-case basis for specific projects and
question and to seek relevant approvals in Policy, persons discharging managerial are notified of their insider status. Persons
responsibilities are obligated to clear with included in a project-specific insider register This section sets out our remuneration ■ The business achieved excellent financial results during 2021,
accordance with internal guidelines and resulting in an above target incentive payment with Mr. Lundmark’s
applicable regulations. the Deputy Chief Legal Officer, Corporate, are prohibited from dealing in Nokia’s governance, policies and how they have been short-term incentive award at 183% of target.
a planned transaction in Nokia’s financial financial instruments until the project ends
implemented within Nokia. It includes our
Main procedures relating instruments in advance. It is also recommended or is made public.
Remuneration Report where we provide disclosure
■ The 2019 Performance Share Plan (in respect of performance during
that trading and other transactions in Nokia’s the years 2019-2021) paid out at 53% of target. Mr. Lundmark did
to insider administration financial instruments are carried out in times Supervision
of the compensation of our Board members not have any awards under this plan.
Our insider administration is organized when the information available to the market Our insider administration’s responsibilities
according to the applicable European Union is as complete as possible. include internal communications related and the President and CEO for 2021. ■ Achievement of our incentivized Environmental, Societal and
and Finnish laws and regulations. In addition, to insider matters and trading restrictions, Governance (ESG) metrics was mixed with overall achievement
the Board of Directors has approved the Nokia Closed window setting up and maintaining our insider The content of the Remuneration Report, of our emissions targets and under-performance against our
registers, arranging related trainings as well diversity targets.
Insider Policy, which sets out Nokia-wide rules Persons discharging managerial
as organizing and overseeing compliance
which will be presented to an advisory vote at
and practices to ensure full compliance with responsibilities are subject to a closed ■ Our pay policies and practices continue to ensure that there is
applicable rules and that inside information window period of 30 calendar days preceding with the insider rules. the Annual General Meeting 2022, is detailed
no unexplained gender based pay gap in Nokia.
is recognized and treated in an appropriate the disclosure of Nokia’s quarterly or annual
Violations of the Nokia Insider Policy must be below. A standalone version is published on
manner and with the highest integrity. result announcements, as well as the day of
The Nokia Insider Policy is applicable to all the disclosure. During the closed window
reported to the Deputy Chief Legal Officer, a stock exchange release.
Corporate. Nokia employees may also use
directors, executives and employees of period, persons discharging managerial Word from the Chair of the Personnel
responsibilities are prohibited from dealing
channels stated in the Nokia Code of Conduct Other compensation-related information provided
the Company. for reporting incidents involving suspected Committee of the Board
in Nokia’s financial instruments.
violations of the Nokia Insider Policy.
alongside the Remuneration Report for 2021 is not
subject to a vote at the Annual General Meeting
2022, but provides further information on the
Auditor fees and services compensation policies applied within Nokia as well
Deloitte Oy, based in Helsinki, Finland, served as our auditor for the financial year ended 31 December 2021 and for the financial year ended
31 December 2020. The auditor is elected annually by our shareholders at the Annual General Meeting for the financial year commencing next
as on the compensation of the rest of the Group
after the election. On an annual basis, the Audit Committee of the Board prepares a proposal to the shareholders regarding the appointment Leadership Team.
of the auditor based upon its evaluation of the qualifications and independence of the auditor to be proposed for election.
We report information applicable to executive
The following table presents fees by type paid to Deloitte’s network of firms for the years ended 31 December:
compensation in accordance with Finnish
EURm 2021 2020 regulatory requirements and with requirements
Dear Fellow Shareholder,
Audit fees(1) 22.0 22.3 set forth by the U.S. Securities and Exchange
Audit-related fees(2) 1.9 0.4 I am delighted to present this year’s compensation report, in a year
Tax fees(3) 0.2 0.6
Commission that are applicable to us. that was transformational for Nokia and where Nokia reset itself and
All other fees(4) 0.1 1.6 achieved strong financial performance with significantly improved
Total 24.2 24.9 Highlights profitability and cash generation. These results provide confidence
that our new strategy, new operating model and new culture are
(1) Audit fees consist of fees incurred for the annual audit of the Group’s consolidated financial statements and the statutory financial statements of the Group’s subsidiaries. ■ 2021 was a transformational year for Nokia, including refocusing delivering the types of results our shareholders expect.
(2) Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Group’s financial statements or that are on and strengthening our technology leadership.
traditionally performed by the independent auditor, and include consultations concerning financial accounting and reporting standards; advice and assistance in connection with local statutory
accounting requirements; due diligence related to mergers and acquisitions; and audit procedures in connection with investigations in the pre-litigation phase and compliance programs. They also ■ 2021 was also the first complete year with Mr. Lundmark as
Business context
include fees billed for other audit services, which are those services that only the independent auditor can reasonably provide, and include the provision of comfort letters and consents in connection The Letter from our President and CEO sets out more detail, with 2021
President and CEO, the first year for many of the Group Leadership
with statutory and regulatory filings and the review of documents filed with the SEC and other capital markets or local financial reporting regulatory bodies. a year in which the new Nokia strategy delivered great results and our
(3) Tax fees include fees billed for: (i) services related to tax compliance including preparation and/or review of tax returns, preparation, review and/or filing of various certificates and forms and consultation Team operating under Nokia’s new operating model, and the first
annual incentive plans paid out accordingly. Our performance was
regarding tax returns and assistance with revenue authority queries; compliance reviews, advice and assistance on other indirect taxes; and transaction cost analysis; (ii) service related to tax audits; (iii) complete year operating under the new organization structure,
services related to individual compliance (preparation of individual tax returns and registrations for employees (non-executives), assistance with applying visa, residency, work permits and tax status for reflected in Nokia’s share price as well. Our continued use in 2021 of
culture and strategy.
expatriates); (iv) services related to technical guidance on tax matters; (v) services related to transfer pricing advice and assistance with tax clearances; and (vi) tax consultation and planning (advice on a long-term performance metric based on shareholder return ensures
stock-based remuneration, local employer tax laws, social security laws, employment laws and compensation programs and tax implications on short-term international transfers).
(4) Other fees include fees billed for Company establishments; liquidations; forensic accounting, data security, other consulting services and reference materials and services.
■ Mr. Lundmark’s compensation remained unchanged during the that shareholders and executives are aligned for the short and long
year. The first tranche of restricted shares granted to him on joining term and there are direct links between executive compensation
(in respect of forfeited awards from his previous employer) vested and shareholder value.
and were released.
In 2021, we maintained the compensation approach set by the policy
■ Following on from his 2020 purchase of EUR 2.6 million of shares approved by shareholders in 2020 and applied to Mr. Lundmark when
in the market, Mr. Lundmark committed a further EUR 2.0 million he was appointed. The Remuneration Report, and all elements of
worth of shares to the co-investment plan, ensuring that his interests the compensation delivered in 2021, are fully consistent with the
and the interests of Nokia’s shareholders remain closely aligned. approved policy.

Compensation
continued
Strategy and compensation Share ownership requirement Remuneration Policy Remuneration for the term that began at the Annual General Meeting
At the core of Nokia’s philosophy lie two principles: Mr. Lundmark started his tenure with Nokia with a significant purchase held on 8 April 2021 and ends at the close of the Annual General
Nokia Corporation’s Remuneration Policy was supported at the Annual
of EUR 2.6 million of shares in 2020 and has continued to acquire Meeting in 2022 consists of the following fees:
■ Pay for performance and aligning the interests of employees with General Meeting 2020 receiving 86% of votes in favor. This policy
Nokia shares during 2021. He now exceeds the shareholding remained in force during 2021. The information below is provided
shareholders; and requirement with a holding worth approximately five times his annual Annual fee(1) EUR
as a summary for ease of reference.
■ Ensuring that compensation programs and policies support the base salary. This is a sign of his commitment to and alignment with Chair 440 000
delivery of the corporate strategy and create long-term sustainable Nokia’s long-term success. In addition to applying the Remuneration Policy to our President and
Vice Chair 185 000
CEO, the principles of our policy extend to the Group Leadership
shareholder value. Member 160 000
Short- and long-term incentives in 2022 Team. This includes caps to equity award amounts and provisions
Our 2022 incentive plans follow this structure, which is the same as 2021: related to clawback. Chair of Audit Committee 30 000
Shareholder outreach
I was delighted that 93% of votes cast at the Annual General Meeting Member of Audit Committee 15 000
The Board regularly monitors the effectiveness of the measures
in 2021 supported the remuneration report. During 2021 we met Delivering sustainable value – Long-term incentive used in our incentive plans to ensure that they align with and drive Chair of Personnel Committee 30 000
with 15 of our largest shareholders and a number of other key the strategy of the Company. Member of Personnel Committee 15 000
Absolute Total Shareholder Return 100%
stakeholders, discussing a range of issues, primarily focused on Chair of Technology Committee 20 000
Focus on increase in share price and restoration of the dividend
governance and ESG. These meetings have helped to inform our views Remuneration summary for the Board of Directors Member of Technology Committee 10 000
and strengthen our belief that ESG measures are a core component The Board’s Corporate Governance and Nomination Committee Meeting fee(2) EUR
of our incentive plans. elivering the next year’s step in the strategic plan –
D periodically reviews the remuneration for the Chair and members of Meeting requiring intercontinental travel 5 000
The Personnel Committee reviewed our compensation peer group and Short-term incentive the Board against companies of similar size and complexity. The
Meeting requiring continental travel 2 000
adjusted this to reflect a group better aligned with our new direction, objective of the Corporate Governance and Nomination Committee
Comparable Strategic Environmental, social and
strategy and market focus. Full details of the changes are presented is to enable Nokia to compete for the top-of-the-class Board (1) The fees payable to the Committee Chairs and members are not paid to the Chair of the Board
operating profit objective 20% governance aspects (ESG)
later in this section; in summary, of the previous group of 14 companies competence in order to maximize the value creation for the for her service in any of the Board Committees.
70% 10% (2) Paid for a maximum of seven meetings per term. Not paid to the Chair of the Board.
we removed two telecoms companies and added a further 15 (mostly shareholders. The Committee’s aim is to ensure that the Company
technology) companies giving a new peer group of 27 comparators. Deliver Deliver meaningful Deliver on our responsibilities has an efficient Board comprised of international professionals Proposals of the Board of Directors to the Annual General Meeting 2022
comparable strategic actions to reduce carbon emissions representing a diverse and relevant mix of skills, experience, were published on 3 February 2022. To ensure the competitiveness
CEO compensation operating profit and become a more diverse background and other personal qualities in line with the diversity of the Board remuneration and reflecting the fee development in
During 2021, there was no increase to Pekka Lundmark’s base salary employer principles established by the Board. Competitive Board remuneration Nokia’s global peer group, the Corporate Governance and Nomination
and target incentives. contributes to the achievement of this target. Committee has recommended to the Board that the annual fees
The 2022 long-term incentive is based on performance over the life of of Board members, save for the Chair, would be proposed to be
■ Mr. Lundmark’s bonus for 2021 was at 183% of target totaling The Annual General Meeting resolves annually on the remuneration
the three-year plan from the date of the award. The metric is absolute increased with EUR 10 000. Other remuneration payable to the Board
EUR 2 975 781. This reflects the strong business performance and to the Chair and members of the Board. The Chair of the Board’s
total shareholder return (TSR) measured by dividend adjusted share and Committee members would remain unchanged and thereby no
the progress made in transforming Nokia to deliver the types of remuneration was last changed in 2008. The Board members’
price at the end of the performance period. By using this metric, additional annual fee is proposed to be paid to the members of the
results that our shareholders expect. annual fees were last changed in 2016 and prior to that in 2007.
we will incentivize executives to deliver the desired business results Corporate Governance and Nomination Committee or the Chair of
The structure of the Board remuneration for the current term of
■ Mr. Lundmark participated in the eLTI 2021 co-investment plan. and support the restoration of the dividend and the transparency the Board for her service in any of the Board Committees.
the Board is set out in the table below.
His commitment of EUR 2.0 million worth of shares is a significant for participants to see how the plan is performing. We believe that
absolute TSR is a more suitable metric than relative TSR given the Consequently, on the recommendation of the Board’s Corporate
sign of his commitment to Nokia and helps to ensure his interest Fees Fees consist of annual fees and meeting fees.
Company’s turnaround phase where the most relevant benchmark Governance and Nomination Committee and in line with Nokia’s
and the interest of our shareholders are closely aligned. As a
is its own baseline. Remuneration Policy, the Board of Directors proposes to the Annual
reminder, the payout of this co-investment plan is determined Approximately 40% of the annual fee is paid in Nokia
General Meeting 2022 that the annual fee payable for a term ending
by total shareholder return. Our compensation approach and structure is, has, and continues shares purchased from the market on behalf of the
at the close of the next Annual General Meeting be as follows:
to play a key role in supporting Nokia’s reset and sustainable share Board members or alternatively delivered as treasury
■ The first tranche of Mr. Lundmark’s restricted shares, awarded EUR 440 000 for the Chair of the Board, EUR 195 000 for the Vice
price growth. shares held by the Company. The balance is paid in
to him in 2020 in respect of forfeited compensation from his Chair of the Board, EUR 170 000 for each member of the Board,
cash, most of which is typically used to cover taxes
previous employer, vested in October 2021. This tranche totaled EUR 30 000 each for the Chairs of the Audit Committee and the
In the Remuneration Report, we also show a comparison of the arising from the paid remuneration.
117 467 shares and further tranches are due for release in 2022 Personnel Committee and EUR 20 000 for the Chair of the Technology
development of compensation for the Board members and the
and 2023 subject to his continued service. Meeting fees are paid in cash. Committee as an additional annual fee, EUR 15 000 for each member
President and CEO, against average employee remuneration
of the Audit Committee and Personnel Committee and EUR 10 000
2021 remuneration outcomes and Nokia’s financial development over the last five years. No meeting fees and no additional annual fees based for each member of the Technology Committee as an additional
The 2021 Short-Term Incentive outcome for the President and CEO The comparison shows a clear link between President and CEO on service in any of the Board Committees are paid to annual fee.
at 183% of overall target reflects Nokia’s excellent 2021 performance. pay and Company performance. the Chair of the Board.
The strong financial performance was however tempered by lower Incentives Non-executive directors are not eligible to participate In order to align the interests of the Board members with those of the
ESG outcomes, representing 56% of target for this portion of the in any Nokia incentive plans and do not receive shareholders, it is proposed that, in line with the Company’s Corporate
Bruce Brown, Chair of the Personnel Committee
annual incentive. performance shares, restricted shares or any other Governance Guidelines, approximately 40% of the annual fee be paid
equity-based or other form of variable compensation in Nokia shares either purchased from the market on behalf of the
The 2019 Long-Term Incentive vested at the end of 2021. for their duties as members of the Board. Board members or alternatively delivered as treasury shares held by
The outcome, at 53% of target, reflects the aggregate outcomes the Company. The Board also proposes that members of the Board
Pensions Non-executive directors do not participate in any
for the three-year performance period 2019–2021. of Directors shall be compensated for travel and accommodation
Nokia pension plans.
expenses as well as other costs directly related to Board and Board
Share Members of the Board shall normally retain until the
Committee work. The meeting fee, travel expenses and other
ownership end of their directorship such number of shares that
expenses would be paid in cash.
requirement corresponds to the number of shares they have
received as Board remuneration during their first
three years of service in the Board (the net amount
received after deducting those shares needed to
offset any costs relating to the acquisition of the
shares, including taxes).
Other Directors are compensated for travel and
accommodation expenses as well as other costs
directly related to Board and Committee work.
This compensation is paid in cash.

Compensation
continued
Remuneration summary for the President and CEO

Year ending 31 December 2022,
in accordance with the approved Year ended
Element Remuneration Policy 31 December 2021 Purpose Operation Opportunity
Name Pekka Lundmark Pekka Lundmark
Base salary EUR 1 300 000 EUR 1 300 000 Provide competitive base salary to attract Base pay is normally reviewed annually taking into consideration Pay reviews are set within the context of employee increases
and retain individual with the requisite level a variety of factors, including, for example, the following: and changes within the Nokia peer group. Changes reflect not
of knowledge, skills and experience to lead only improving performance but also improving competence
our businesses ■ performance of the Company and the individual; and skills as would be applied to any other employee in Nokia.
■ remuneration of our external comparator group;
■ changes in individual responsibilities; and
■ employee salary increases across Nokia and in the local market.
Short-term Measures: Measures: To incentivize and reward performance Short-term incentives are based on performance against Target award: 125% of base salary
incentives against delivery of the annual business plan single-year targets and normally paid in cash.
■ 100% Nokia scorecard ■ 100% Nokia scorecard Minimum 0% of base salary
Targets for the short-term incentives are set at the start of the
– 70% comparable – 70% comparable year, in the context of analyst expectations and the annual plan, Maximum 281.25% of base salary
operating profit operating profit selecting measures that align to the delivery of Nokia’s strategy.
– 20% strategic objectives – 20% strategic objectives Achievement is assessed at the end of the year.
– 10% environment, social – 10% environment, social Short-term incentives are subject to the clawback policy
and governance objectives and governance objectives (see below).
Long-term Target award: 200% of Target award: 200% To reward for delivery of sustainable Long-term incentive awards are normally made in performance Target award: 200% of base salary
incentives base salary (EUR 2 600 000) of base salary (EUR 2 600 000) long-term performance, align the shares and paid for performance against longer-term targets.
(Performance President and CEO’s interests with Minimum 0% of base salary
Shares) Minimum 0% Minimum 0% of base salary those of shareholders and aid retention. Targets are set in the context of the Nokia long-term plans and
of base salary analyst forecasts ensuring that they are considered both Maximum 400% of base salary(1).
Maximum 400% of base salary(1) demanding and motivational.
Maximum 400% The Board’s Personnel Committee retains discretion to make
of base salary(1) Metric: Absolute Total Shareholder Long-term incentives are subject to the clawback policy awards up to twice that level in exceptional circumstances
Return (see below). such as for example upon recruitment, significant change in
Metric: Absolute Total Shareholder responsibilities, significant strategic change or other similar
Return events. The use of discretion would be explained at the time.
Pension Contribution to the mandatory Contribution to the mandatory To provide for retirement with a level Retirement age is defined and pensions are provided in line with Pursuant to Finnish legislation, Nokia is required to make
TyEL pension plan in Finland. TyEL pension plan in Finland. of certainty. local country arrangements; in Finland this is the statutory Finnish contributions to the Finnish TyEL pension arrangements in
pension system (Finnish TyEL). respect of the President and CEO. Such payments can be
characterized as defined contribution payments. The amount
Under the TyEL arrangements, base salary, incentives and other is disclosed in the Remuneration Report.
taxable benefits are included in the definition of earnings while
gains from equity-related plans are not.
No supplemental pension arrangements are provided in Finland.
Benefits & Life and critical illness insurance, Life and critical illness insurance, To attract, retain and protect the Benefits are made available as part of the same policy that applies The value will be the cost to the company.
mobility private medical insurance and private medical insurance and President and CEO. to employees more broadly in the relevant country, with additional
company car. company car. security provisions, as appropriate.
Total Target EUR 5 525 000 EUR 5 525 000(2)
Remuneration
Share ownership Requirement: 3 times annual Requirement: 3 times annual
requirement base salary base salary

Requirement (value): Requirement (value):
EUR 3 900 000 EUR 3 900 000
(1) Excluding share price growth
(2) Excluding 2020 and 2021 matching performance share awards under the eLTI co-investment arrangement

Compensation
continued
Illustration of the earning opportunity for the President Remuneration on recruitment Please note that the Remuneration Report, applicable to the Board and President and CEO, subject to an
and CEO Our policy on recruitment is to offer a compensation package that is
sufficient to attract, retain and motivate the individual with the right
advisory vote at the Annual General Meeting 2022, starts below and is also published on a stock exchange
The illustration below shows the pay components of the President and
CEO at minimum, target and maximum payout. It includes an annual skills for the required role. release. Other compensation-related information provided before and after the Remuneration Report is not
apportionment of both 2020 and 2021 eLTI co-investment plans. On occasion, we may offer compensation to buy out awards or other subject to a vote at the Annual General Meeting 2022, but provides further information on the compensation
Mr. Lundmark chose to invest in both years aligning a considerable
proportion of his incentive directly to shareholder return.
lost compensation which the candidate held prior to joining Nokia, policies applied within Nokia and the compensation of the Group Leadership Team.
but which lapsed upon the candidate leaving their previous employer.
Earning opportunity of the President and CEO (EURm) Due consideration is given to the potential value and timing of such
awards, taking into account any conditions attached to the awards
16
14
and the likely performance against such conditions.
Remuneration Report 2021
Clawback Introduction
12 The President and CEO is subject to a clawback policy where any
restatement of financial results may result in the reclaiming of This Remuneration Report of Nokia Corporation (the Report) has been approved by the company’s Board of Directors (the Board) to be
10 amounts previously paid, which had been based on numbers that presented to the Annual General Meeting 2022. The resolution of the Annual General Meeting on the Report is advisory. The Report
have since been materially restated. Any such reclaimed amount, presents the remuneration of the Board members and the President and CEO for the financial year 2021 in accordance with the Finnish
8
and the period over which payments can be reclaimed, will take Decree of the Ministry of Finance 608/2019, the Finnish Corporate Governance Code of 2020 as well as other applicable Finnish laws and
6 into account the circumstances and duration of any misstatement. regulations. The members of the Board and the President and CEO have been remunerated in accordance with our approved Remuneration
In the case of unintentional misstatement, payments made within Policy during the financial year 2021.
4
the last three years may be subject to the policy at the discretion In 2021 our remuneration structure promoted the company’s long-term financial success by setting the performance criteria for short-
2 of the Personnel Committee. and long-term incentives to support the company’s short- and long-term goals, as well as through shareholding requirements set for
0 the President and CEO and the Board members. Aligned with Nokia’s pay-for-performance remuneration principle, performance-based
Termination provisions compensation was emphasized over fixed base salary. The setting and application of the performance criteria for incentive programs
Min Target Max
In the event of a termination of employment, any payable executed the philosophy of pay-for-performance and supported the delivery of the corporate strategy as well as the creation of long-term
Base salary compensation is determined in line with legal advice regarding local sustainable shareholder value.
Short-term incentive legislation, country policies, contractual obligations and the rules
Long-term incentive of the applicable incentive and benefit plans. Current termination The table below compares the development of the remuneration of our Board of Directors, President and CEO, average employee pay and
Co-investment arrangement provisions of the President and CEO’s service agreement are described company performance.
in the Remuneration Report.
Aggregate remuneration President and Total Shareholder Return
Share ownership requirement Change of control arrangements, if any, are based on a double trigger of the Board of CEO actual Average Salaries (Rebased to 100 at
Nokia believes that it is desirable for its executives to own shares in structure, which means that both a specified change of control event Year Directors (EUR)(1) remuneration (EUR)(2) and Wages (EUR)(3) Net sales (EURm) 31 Dec 2016)(4)
Nokia to align their interests with those of shareholders and to ensure and termination of the individual’s employment must take place 2017 2 138 000 6 423 559 63 461 23 147 64.05
that their decisions are in the long-term interest of the company. The for any change of control-based severance payment to materialize. 2018 2 203 000 4 651 009 63 220 22 563 85.92
President and CEO is required to own three times his or her annual 2019 2 219 000 3 897 625 61 980 23 315 57.48
base salary in Nokia shares and is given a period of five years from 2020 2 016 000 3 587 781 65 787 21 852 54.95
appointment to achieve the required level of share ownership. 2021 1 821 000 4 908 244 70 411 22 202 132.63
(1) Aggregate total remuneration paid to the members of the Board during the financial year as annual fee and meeting fee, as applicable, and as approved by general meetings of shareholders.
The value depends on the number of members elected to the Board for each term as well as on the composition of the Board committees and travel required.
(2) The President and CEO actual remuneration represents the combined total in 2020, when Mr. Lundmark replaced Mr. Suri.
(3) Average salaries and wages are based on average employee numbers and total salaries and wages as reported in the Company’s financial statements.
(4) Total shareholder return on last trading day of the previous year.
We also present this data graphically:

Comparative data (rebased year end 2016 = 100)
150%
100%
50%
0
2016 2017 2018 2019 2020 2021
Remuneration of the Board of Directors

President and CEO actual remuneration
Average salaries and wages
Net sales
Total Shareholder Return

Compensation
continued
While the graph reflects the Euro values paid during each financial year, in practice the Board members’ remuneration closely aligns with the The President and CEO
performance of the Company and the total shareholder return. Approximately 40% of the Board members’ annual fees were paid in Nokia
shares purchased from the market on their behalf and the directors shall retain until the end of their directorship such number of shares The following table shows the actual remuneration received by Mr. Lundmark in 2021 and aggregate figures for Pekka Lundmark and
that corresponds to the number of shares they have received as Board remuneration during their first three years of service on the Board. Rajeev Suri as President and CEO in 2020 (individual disclosure was contained in last year’s report). The long-term incentive payments
The rest of the annual fee was paid in cash, most of which is typically used to cover taxes arising from the remuneration. It is the Company’s reflect actual payments in the respective years attributable to the vesting of the 2018 Nokia performance share plan in 2021 (comparative
policy that the non-executive members of the Board do not participate in any of Nokia’s equity programs and do not receive performance figures show the payment of the 2017 Nokia performance share plan in 2020).
shares, restricted shares, or any other equity-based or other variable compensation for their duties as Board members. All members of the
Board were non-executive during the financial years 2017–2021. 2021 2020
EUR (Lundmark) Pay mix(1) (Combined) Pay mix(1)
The pay-for-performance remuneration principle applied to the President and CEO as well as the shareholding requirement of the Salary 1 300 000 27% 1 301 032 37%
President and CEO and the Board members, as applicable, contribute to an alignment of interests with shareholders, while also promoting Short-term incentive(2) 2 975 781 61% 1 518 765 43%
and incentivizing decisions that are in the long-term interest of the Company.
Long-term incentive(3) 596 732 12% 687 740 20%
We look forward to our shareholders’ support and confirmation that the Report is aligned with the Remuneration Policy. Other compensation(4) 35 731 80 244
Total 4 908 244 3 587 781
Board of Directors
(1) Pay mix reflects the proportions of base salary, short-term incentive and long-term incentive of total compensation, excluding other compensation.
The shareholders resolve annually on director remuneration based on a proposal made by the Board of Directors on the recommendation (2) Short-term incentives represent amounts earned in respect of the financial year, but that are paid in April of the following year.
of the Board’s Corporate Governance and Nomination Committee. (3) Mr. Suri’s 2019 pro-rated LTI vested in 2021 and will be released in March 2022; this is estimated at EUR 1 281 535 and is excluded from the table above.
(4) Other compensation includes benefits such as telephone, car, driver, tax compliance support, and medical insurance.
At the Annual General Meeting held on 8 April 2021, Elizabeth Nelson stepped down from the Board and the Annual General Meeting
resolved to elect eight members to the Board. The following Board members were re-elected for a term ending at the close of the Annual Pursuant to Finnish legislation, Nokia is required to make contributions to the Finnish TyEL pension arrangements in respect of the
General Meeting 2022: Sari Baldauf, Bruce Brown, Thomas Dannenfeldt, Jeanette Horan, Edward Kozel, Søren Skou, Carla Smits-Nusteling President and CEO. Such payments can be characterized as defined contribution payments. In 2021, payments to the Finnish state pension
and Kari Stadigh. system equaled EUR 314 457 for Mr. Lundmark in respect of his service as President and CEO (EUR 103 256 for Mr. Lundmark in 2020 as a
split year). No supplementary pension arrangements were offered.
The aggregate amount of compensation paid to Board members in 2021 equaled EUR 1 821 000 of which EUR 1 770 000 consisted of
annual fees and the rest of meeting fees. In accordance with the resolution by the Annual General Meeting 2021, approximately 40% of the Short-term incentive
annual fee from Board and Board Committee work was paid in Nokia shares purchased from the market on behalf of the Board members The 2021 short-term incentive framework for the President and CEO was based on financial, strategic and ESG objectives. Achievement
following the Annual General Meeting. The directors shall retain until the end of their directorship such number of shares that corresponds against the 2021 targets was as follows:
to the number of shares they have received as Board remuneration during their first three years of service in the Board. The rest of the
annual fee was paid in cash, most of which is typically used to cover taxes arising from the remuneration. All meeting fees were paid in cash. Metric Weight Target Achievement
It is the Company’s policy that the non-executive members of the Board do not participate in any of Nokia’s equity programs and do not Comparable Operating Profit 70% 1 823 EURm 225%
receive performance shares, restricted shares, or any other equity-based or other variable compensation for their duties as Board Diversity 5% Diversity of new hires 0%
members. No such variable compensation was paid since all persons acting as Board members during the financial year 2021 were 411 125 tCO2e (Scopes 1 and 2),
non-executive. Emissions Scopes 1,2 and 3 5% 1 463 tCO2e/EURm (Scope 3) 112.5%
Strategic Objectives 20% Individual objectives 100%
The following table outlines the total annual compensation paid in 2021 to the members of the Board for their services, as resolved by the
shareholders at the Annual General Meeting.
Accordingly, the short-term incentive of Mr. Lundmark as the President and CEO equaled EUR 2 975 781 or 183% of the target award.
60% of annual
Total 40% of annual fees and all Number of Shares Long-term incentives
remuneration fees paid in meeting fees paid Approximately 40% In 2021, Mr. Lundmark was awarded the following equity awards under the Nokia equity program. The performance condition for the 2021
Annual fee (EUR) Meeting fees (EUR)(1) paid (EUR) shares (EUR) in cash (EUR) of the annual fee
performance shares is based on absolute total shareholder return and the actual achievement will be detailed following the end of the
Sari Baldauf (Board Chair) 440 000 – 440 000 176 000 264 000 43 711 three-year performance period. The eLTI plan is a co-investment plan applicable to the President and CEO and a select number of other
Kari Stadigh (Board Vice Chair) 200 000 7 000 207 000 80 000 127 000 19 868 senior executives, which provides for a 2:1 award of Nokia Performance Shares in return for purchase and continued holding of Nokia
Bruce Brown 200 000 7 000 207 000 80 000 127 000 19 868 shares. This substantial personal investment in Nokia shares directly aligns Mr. Lundmark’s interests with those of shareholders. The award
Thomas Dannenfeldt 185 000 7 000 192 000 74 000 118 000 18 378 payout is determined by absolute total shareholder return.
Jeanette Horan 185 000 7 000 192 000 74 000 118 000 18 378
Grant date fair value
Edward Kozel 195 000 7 000 202 000 78 000 124 000 19 372 Performance share awards(1) Units awarded (EUR) Grant date Vesting
Elizabeth Nelson (until 8 April 2021)(2) – – – – – – Awarded as regular performance share award 769 200 2 607 588 25 March 2021 Q1 2024
Søren Skou 175 000 7 000 182 000 70 000 112 000 17 385 Awarded as eLTI performance share award 962 180 4 089 265 1 June 2021 Q2 2024
Carla Smits-Nusteling 190 000 9 000 199 000 76 000 123 000 18 875
(1) The 2021 performance shares (regular and eLTI) have a three-year performance period based on absolute total shareholder return. The maximum payout is 200% subject to maximum
Total 1 770 000 51 000 1 821 000 708 000 1 113 000 175 835
performance against the performance criterion. Vesting is subject to continued employment.
(1) Meeting fees include all meeting fees paid for the term that ended at the Annual General Meeting held on 8 April 2021 and meeting fees accrued and paid in 2021 for the term that began at the
same meeting. Vesting for President and CEO during the year
(2) Stepped down at the Annual General Meeting on 8 April 2021 and thus did not receive any annual fee in 2021. The first tranche of Mr. Lundmark’s 2020 restricted share award, made to him on joining in recognition of forfeited awards from his previous
employer, vested on 1 October 2021, releasing 117 467 shares to the value of EUR 596 732.
Share awards vesting during the year Units awarded Target Achievement Units vesting
2020 Restricted Share Award Tranche 1 117 467 N/A N/A 117 467

Compensation
continued
Remuneration governance The Board of Directors approves, and the independent members
Vesting for former President and CEO during the year of the Board confirm, the compensation of the President and CEO,
Mr. Suri’s pro-rated 2019 Performance Share Award vested on 31 December 2021 and will be released in March 2022. The award was We manage our remuneration through clearly defined processes,
upon recommendation of the Personnel Committee. The Personnel
pro-rated to 66.67% reflecting his two years of service during the performance period, and vesting was at 53% resulting in a projected with well-defined governance principles, ensuring that no individual
Committee consults regularly with the President and CEO and the
release of 229 913 shares with an estimated value of EUR 1 281 535 (using the 31 December 2021 share price). The Board decided this is involved in the decision-making related to their own remuneration
Chief People Officer though they are not present when their own
pro-rated vesting to Mr. Suri to ensure his full commitment to the successful leadership transition that was critical for the Company in the and that there is appropriate oversight of any compensation decision.
compensation is reviewed or discussed. This enables the Personnel
period before Mr. Lundmark was released by his previous employer, during the early stages of the COVID-19 pandemic. Remuneration of the Board is annually presented to shareholders for
Committee to be mindful of employee pay and conditions across the
approval at the Annual General Meeting and the remuneration of the
broader employee population. The Committee has the power, in its
President and CEO is approved by the Board.
Performance Share Award 2019 Units awarded Target Units vesting sole discretion, to retain compensation consultants to assist the
2019 annual award 650 699 Market share, earnings per share, free cash flow 229 913 The Board submits its proposal to the Annual General Meeting on Personnel Committee in evaluating executive compensation.
the recommendation of the Board’s Corporate Governance and
The Personnel Committee Chair regularly engages with shareholders
Nomination Committee, which actively considers and evaluates
Share ownership on pay and broader matters to hear their views on our compensation
the appropriate level and structure of directors’ remuneration.
Our share ownership policy requires that the President and CEO holds a minimum of three times his or her annual base salary in Nokia policies, programs and associated disclosures and reflect on their
Shareholders also authorize the Board to resolve to issue shares,
shares in order to ensure alignment with shareholder interests over the long term. Mr. Lundmark significantly exceeds this requirement with feedback. In recent years this feedback has informed the increase
for example to settle Nokia’s equity-based incentive plans, based on
a holding of approximately five times base salary, well within the five-year period permitted. in performance periods for the long-term incentive and the inclusion
the proposal of the Board.
of ESG metrics.
Mr. Lundmark Units Value(1) (EUR)
Beneficially owned shares as of 31 December 2021 1 232 333 6 869 024
Unvested shares under outstanding Nokia equity plans(2) 4 029 007 22 457 685
Total 5 261 340 29 326 709
(1) The values are based on the closing price of a Nokia share of EUR 5.574 on Nasdaq Helsinki on 31 December 2021.
Work of the Personnel Committee
(2) The number of units represents the number of unvested awards as of 31 December 2021. The Personnel Committee convened five times during 2021 January September
with a general theme for each meeting. All meetings were held ■ Incentive targets and ■ 2022 Incentive framework
Mr. Lundmark’s termination provisions are as follows: in accordance with any COVID-19 restrictions in force at the time. objectives
■ Analytics and demographics
Termination by Reason Notice Compensation
■ Nokia Equity Program
Nokia Cause None The President and CEO is entitled to no additional compensation and all ■ Equity plan direction
unvested equity awards would be forfeited after termination. ■ Culture evolution
JAN December
DEC
Nokia Reasons other Up to 12 months The President and CEO is entitled to a severance payment equaling up to ■ Prior year incentive results ■ Personnel Committee charter
than cause 12 months of compensation (including annual base salary, benefits, and FE review
OV ■ President and CEO
target incentive) and unvested equity awards would be forfeited after
B
N
termination. remuneration ■ 2022 Incentive metrics
4 1
President Any reason 12 months The President and CEO may terminate his service agreement at any time May ■ Proxy agency and shareholder
OCT
MAR
and CEO with 12 months’ prior notice. The President and CEO would either continue ■ Culture update feedback
to receive salary and benefits during the notice period or, at Nokia’s
discretion, a lump sum of equivalent value. Additionally, the President and ■ Shareholder feedback update ■ The Compensation Report
CEO would be entitled to any short or long-term incentives that would for 2021
■ GLT compensation review
normally vest during the notice period. Any unvested equity awards would
APR
SEP
be forfeited after termination. July
3 2 ■ Succession
President Nokia’s material Up to 12 months In the event that the President and CEO terminates his service agreement
and CEO breach of the service based on a final arbitration award demonstrating Nokia’s material breach of ■ People risks and opportunities
G
AU
AY
agreement the service agreement, he is entitled to a severance payment equaling up to M
12 months of compensation (including annual base salary, benefits and target ■ LTI Development
JUL
incentive). Any unvested equity awards would be forfeited after termination. JU N
■ Status of incentive payouts
and ESG goal achievement
The President and CEO is subject to a 12-month non-competition and non-solicit obligation that applies after the termination of the
1 Approvals & reporting
service agreement or the date when he is released from his obligations and responsibilities, whichever occurs earlier. 2 Philosophy & structure
3 Long-term direction & market review
4 Planning

Compensation
continued
The President and CEO Advisors Unvested equity awards held by the Nokia Group Leadership Team, including the President and CEO
The President and CEO has an active role in the compensation The Personnel Committee engaged Willis Towers Watson, an The following table sets forth the potential aggregate ownership interest through the holding of equity-based incentives of the Group Leadership
governance and performance management processes for the Group independent external consultant, to assist in the review and Team in office, including the President and CEO, as of 31 December 2021:
Leadership Team and the wider employee population at Nokia. determination of executive compensation and program design and
provide insight into market trends and regulatory developments. Shares receivable Shares receivable Shares receivable
The President and CEO is not a member of the Personnel Committee through performance through performance through restricted
and does not vote at Personnel Committee meetings, nor does he shares at grant shares at maximum(4) shares
participate in any conversations regarding his own compensation. Number of equity awards held by
the Group Leadership Team(1) 9 619 108 19 238 216 1 392 775
Group Leadership Team % of the outstanding shares(2) 0.17% 0.34% 0.02%
At the end of 2021, the Group Leadership Team consisted of 11 persons split between Finland, other European countries, Singapore and the % of the total outstanding equity
United States. For information regarding the current Group Leadership Team composition refer to the Corporate Governance Statement. incentives (per instrument)(3) 13.68% 13.68% 5.48%
Name Position in 2021 Appointment date (1) Includes the 11 members of the Group Leadership Team in office as of 31 December 2021.
(2) The percentages are calculated in relation to the outstanding number of shares and total voting rights of Nokia as of 31 December 2021, excluding shares held by Nokia Group. No member of the Group
Pekka Lundmark President and CEO 1 August 2020 Leadership Team owns more than 1% of the outstanding Nokia shares.
(3) The percentages are calculated in relation to the total outstanding equity incentives per instrument.
Nassib Abou-Khalil Chief Legal Officer 1 August 2019 (4) At maximum performance, under the performance share plans outstanding as of 31 December 2021, the payout would be 200% and the table reflects this potential maximum payout. The 2019
Nishant Batra Chief Strategy & Technology Officer 18 January 2021 performance shares vested on 1 January 2022 and the shares released will be distributed in March 2022.
Ricky Corker President, Customer Experience (new role as of 1 January 2021) 1 January 2019
Federico Guillén President, Network Infrastructure (new role as of 1 January 2021) 8 January 2016 Long-term incentives
Review of our incentive plans
Jenni Lukander President, Nokia Technologies 1 August 2019 We annually review compensation against key metrics such as total
Each year we monitor the performance of our incentive plans against
Raghav Sahgal President, Cloud and Network Services (new role as of 1 January 2021) 1 June 2020 shareholder return and share price to validate the effectiveness of
the targets for the plan, total shareholder return and the impact that
Melissa Schoeb Chief Corporate Affairs Officer 12 April 2021 our equity plans.
the plans have on total compensation compared with market peers.
Tommi Uitto President, Mobile Networks 31 January 2019 The 2019 performance share plan vested on 1 January 2022 with
Stephanie Werner-Dietz Chief People Officer 1 January 2020 Target setting 53% of the target award vesting based on the achievement against
Marco Wirén Chief Financial Officer 1 September 2020 Targets for the short-term incentives are set annually at or before the the revenue, earnings per share and free cash flow targets during the
start of the year, balancing the need to deliver value with the need performance period (financial years 2019–2021).
The remuneration of the members of the Group Leadership Team Executives on the Group Leadership Team are subject to the same to motivate and drive performance of the Group Leadership Team.
(excluding the President and CEO) consists of base salary, other remuneration policy framework as the President and CEO. This Targets are selected from a set of strategic metrics that align with The metric for the performance shares awarded in 2021 (under the
benefits, and short- and long-term incentives. Short-term incentive includes being subject to clawback and shareholding requirements. driving sustainable value for shareholders and are set in the context of Nokia LTI Plan 2021–2023) was based on total shareholder return in
plans are based on rewarding the delivery of business performance The shareholding requirement for members of the Group Leadership market expectations and analyst consensus forecasts. Targets for our a similar manner to the 2020 awards. This reflects our commitment
utilizing certain, or all, of the following metrics as appropriate to the Team is two times their base salary. long-term incentive plans are set in a similar context. The long-term to driving the best direct, long-term results and closely aligns plan
member’s role: revenue, comparable operating profit, free cash flow incentive targets are set at the start of the performance period and participants with the interests of shareholders. Awards to senior
and defined strategic objectives. locked in for the life of the plan. executives and leaders were made in March and for other employees
in October. The performance periods were adjusted accordingly to
Remuneration of the Group Leadership Team in 2021 Short-term incentives ensure that a three-year vesting period was maintained and the
Remuneration of the Group Leadership Team (excluding the President and CEO) in 2020 and 2021, in the aggregate, was as follows: In 2021 short-term incentive targets and achievements were based awards will not vest until a corresponding date three years later in 2024.
on a mix of metrics as shown below. Targets were measured either at The performance conditions were not adjusted.
2021 2020 a Nokia Group level or, alternatively, a mix of Nokia Group and business
EURm(1) EURm(1) group level for business group presidents.
Salary, short-term incentives and other compensation(2) 16.0 24.4
■ Comparable operating profit of Nokia
Long-term incentives(3) 2.2 3.7
Total 18.2 28.1 ■ Operating profit / operating margin for the relevant business group
(1) The values represent each member’s time on the Group Leadership Team. ■ Role related strategic objectives
(2) Short-term incentives represent amounts earned in respect of 2021 performance. Other compensation includes mobility related payments, local benefits and pension costs.
(3) The amounts represent the value of equity awards that vested in 2021. ■ ESG (carbon emissions and diversity)
The members of the Group Leadership Team (excluding the President and CEO) were awarded the following equity awards under the Nokia Those Group Leadership Team members not leading a business group
equity program in 2021: will have the equivalent proportion of their incentive based on Nokia’s
comparable operating profit.
Units Grant date fair value
Award awarded(1) (EUR) Grant date Vesting
Performance share award(2) 1 998 300 6 850 125 25 March and 19 May 2021 Q1 2024 and Q2 2024
eLTI performance share award(3) 1 584 852 6 735 621 1 June 2021 Q2 2024
Restricted share award(4) 888 300 3 143 313 25 March and 19 May 2021 Q1 2022, Q2 2022, Q1 2023, Q3 2023
(1) Includes units awarded to persons who were Group Leadership Team members during 2021.
(2) The 2021 performance shares have a three-year performance period based on absolute total shareholder return. The maximum payout is 200% subject to maximum performance against the
performance criterion. Vesting is subject to continued employment.
(3) The eLTI is a selective arrangement offered to senior leaders in 2021. In return for the purchase and continued holding of Nokia shares, a 2:1 match of Nokia 2021 performance shares was made.
These vest after three years subject to absolute total shareholder return and continued employment, with a maximum payment at 200% subject to maximum performance.
(4) Vesting of the tranches of the 2021 restricted share award is conditional to continued employment.

Compensation
continued
Nokia Long-Term Incentive Plan and Employee Share Pay for performance Review of our comparator companies
Purchase Plan 2021–2023 Core to our compensation philosophy is a desire to pay for performance.
In looking for suitable comparators, we have always considered
The long-term incentive plan (LTI Plan) intends to effectively contribute Each year we review overall total shareholder return compared with businesses of similar size, global scale and complexity. During 2021,
to the long-term value creation and sustainability of the Company and long-term incentive payouts mapping the performance of the plans our core comparator group was reviewed and updated so that it
align the interests of the executives and employees with those of against the total shareholder return curve. consists of the following 27 companies (15 companies marked in
Nokia’s shareholders. Nokia’s long-term incentive plan for 2021–2023 italics were added, and two – BT, Deutsche Telekom – were removed).
is a key tool which supports these objectives. Under the LTI Plan the The Board feels that this comparator group now better reflects
Share price and total shareholder return vs long-term
Company may grant eligible executives and other employees awards Nokia’s business and human capital competitors.
incentive performance
in the form of both performance shares and restricted shares.
250%
Awards under the LTI Plan may be granted between the date the ABB IBM
plan is approved and 31 December 2023 subject to applicable Adobe Infineon Technologies
performance metrics as well as performance and/or restriction 200% Airbus Juniper Networks
periods of up to 36 months depending on the award. Consequently, ASML Kone
the restriction periods for the last awards granted under the LTI Plan Atos Motorola Solutions
150%
would end in 2026. Performance metrics as well as weightings and BAE Systems NXP Semiconductors
targets for the selected metrics for performance shares are set by
25.72% 23.75% Capgemini Oracle
the Board of Directors annually to ensure they continue to support 100%
Nokia’s long-term business strategy and financial success. Ciena Philips
Cisco Systems SAP
The potential maximum aggregate number of Nokia shares that may 50% Corning Siemens Healthineers
100% 100%
be issued based on awards granted under the LTI plan in 2021, 2022 86%
57% 53% Dell Technologies VMware
and 2023 is 350 million. Until the Nokia shares are delivered, the 46%
29%
participants will not have any shareholder rights, such as voting or 0 Nil Nil Ericsson Vodafone Group
dividend rights associated with the performance or restricted shares. TSR 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020* 2021* Hewlett Packard Enterprise Wärtsilä
If the participant’s employment with Nokia terminates before the value Long-term incentive plan, as of 31 December HP
vesting date of the award or a part of an award, the individual is not,
as a main rule, entitled to settlement based on the plan. Achieved
Overachieved
The approach for 2021 and the intended approach for 2022 is that the Nokia total shareholder return (“TSR”)
majority of long-term incentive plan participants receive restricted
shares rather than performance shares although the executives, * Performance period not yet completed.
including the President and CEO, continued to receive performance
shares as the main form of long-term incentives. The performance Looking at the performance of our long-term incentive plans against
shares will be subject to performance criterion which will continue to total shareholder return, there is a reasonable alignment with the
be absolute total shareholder return and the plan vests no earlier than performance of the plans declining as total shareholder return declines
three years from the grant. The regular restricted share awards will and the trend lines are reasonably aligned.
have a three-year vesting period with cliff vesting but, in limited cases
predominantly related to retention, the Company may introduce The Board continues to actively monitor the performance of
different vesting periods with tranche vesting. This will simplify plan our long-term incentive plans to ensure that they deliver value
participation for employees. for shareholders.
The purpose of the employee share purchase plan (ESPP) is to

encourage share ownership within the Nokia employee population,
increasing engagement and sense of ownership in the company.
Under the ESPP 2021–2023, subject to the Board commencing annual
plan cycles, the eligible employees may elect to make contributions
from their monthly net salary to purchase Nokia shares at market value
on pre-determined dates on a quarterly basis during the applicable
plan period. Nokia would deliver one matching share for every two
purchased shares that the participant still holds at the end of
applicable plan cycle. In addition, the participants may be offered free
shares subject to meeting certain conditions related to participation
as determined by the Board.
The maximum number of shares that can be issued under all plan
cycles commencing under the ESPP in 2021, 2022 and 2023 is
35 million. Participants have immediate shareholder rights over all
shares purchased from the market. Until the matching or free Nokia
shares are delivered, the participants will not have any shareholder
rights, such as voting or dividend rights associated with the matching
or free shares.

Board review
Board Business description

Board’s review
Selected financial data
Operating and financial review
76
77
78
79
review
Results of operations 79
Results of segments 82
Mobile Networks 82
Cloud and Networks Services 84
Group Common and Other 86
Liquidity and capital resources 87
Financial position 87
Cash flow 87
Financial assets and debt 88
Venture fund investments and commitments 89
Treasury policy 89
Foreign exchange impact 89
Sustainability and corporate responsibility 90
Our purpose, strategy and targets 90
Sustainability governance 94
Risk management 95
Combating climate change 96
Conducting our business with integrity 98
Our culture – Open, Fearless and Empowered 104
Disclosure under the European Union Taxonomy Regulation 108
Shares and shareholders 110
Share details 110
Shareholders112
Articles of Association 114
Risk factors 116
Significant subsequent events 118
Key ratios 119
Alternative performance measures 120

Board review
Business description Board’s review
Business description Board’s review

If 2020 proved how vital connectivity was to keeping business and society functioning,
2021 showed how it can improve lives through greater productivity, access to opportunity,
and sustainability. Nokia’s technology and solutions helped with all of these.
Nokia Corporation is a public limited liability The shares of Nokia Corporation are listed 2021 was a strong year for Nokia. released its 2030 technology vision setting During 2021, the Board held 12 meetings
company incorporated and domiciled in on the Nasdaq Helsinki Stock Exchange, out the opportunities, challenges and and its committees 20 meetings. The Board’s
Nokia launched its three-phased strategy,
Helsinki, Finland. Nokia Corporation is the the New York Stock Exchange and the changes we expect to see as we move from work early in the year was centered around
the first phase of which focused on resetting
parent company (Parent Company or Parent) Euronext Paris Stock Exchange. 5G to 5G-Advanced and on to 6G. We believe on the Company’s new mission, strategy,
our business. As part of this, we refocused
for all its subsidiaries (Nokia or the Group). that the network evolution will include operating model and cost base. After this,
on strengthening technology leadership
extreme performance specialized networks the Board focused on reviewing the
At Nokia, we create technology that helps the in all the markets in which Nokia competes.
for lowest latency and highest reliability, implementation of these changes, as well
world act together. We provide mobile, fixed To fully align our business with our strategic
a multi-layered network of networks to as on the most essential strategic questions
and cloud network solutions that enable commitment to providing our customers with
meet the new requirements of emerging and initiatives to secure technology leadership
critical networks for communication service critical networks that societies and companies
applications, and with network as-a-Service, and sustainable growth in accordance with
providers (CSPs), enterprise verticals and can rely on, highlights of the year included
the enabling of networks to be consumed the new strategy.
hyperscalers. Our portfolio of products, renewing our purpose – ‘At Nokia, we create
like cloud services.
services and licensing opportunities helps technology that helps the world act together.’ The four Committees of the Board – Audit,
accelerate digitalization to address global Nokia also adopted a new operating model Corporate Governance and Nomination,
sustainability, productivity and accessibility based around four fully accountable Sustainability at the core Personnel and Technology – assisted the Board
challenges. We have customers in more than business groups. of our business effectively during the year. This was evident
100 countries around the world and Sustainability has always been at the heart also with respect to environmental, social and
The Board is pleased to note that the
operations in Europe, the Middle East & Africa, of Nokia’s business and is also an integral part governance (ESG) priorities where each of the
implementation of the first phase of the
Greater China, North America, Asia-Pacific of our Board’s work. Committees, as well as the Board as a whole,
strategy progressed well, in many respects
and Latin America. even faster than expected. This was reflected adopted ESG matters as integral parts of their
We believe that our technology can help to
in the strong financial results for the full year. respective areas of responsibility. Further, in
meet some of the world’s most pressing
In 2021, Nokia’s net sales grew from the 2021 the Board’s Corporate Governance and
challenges, such as climate change, the
previous year, profitability improved significantly, Nomination Committee focused on the renewal
digital divide and stalling productivity growth.
and strong cash generation continued. of the Board itself. The outcome of this work is
The solutions Nokia provides can help the
reflected in the Board composition proposed
world decarbonize, reducing waste, limiting
In 2022, Nokia will move to the second phase to the 2022 Annual General Meeting which
the use of natural resources and driving the
of its strategy to deliver growth and expand includes three new director candidates.
reuse of materials to combat climate change.
profitability. The third phase of the strategy
They can restore failing productivity through
is to scale up to drive growth in new use cases
digitalization of industry. And they can
Our direction for 2022
and business models. Everyone at Nokia should be proud of the
bring more inclusive access to opportunity,
education and vital social services. Company’s progress in 2021. That progress
Short- and long-term technology was reflected in the improved cash generation
leadership People are Nokia’s greatest asset. We aim to that strengthened our balance sheet to
enable a culture that drives business value the extent that we can look to reinstate
To strengthen its technology leadership,
based on the cultural essentials that Nokia shareholder returns through both a dividend
Nokia significantly increased its R&D
launched in 2021 as part of our new Nokia and a share buyback program.
investment in 2021 and launched new
Platform: open, fearless and empowered.
market-leading products in key technologies Nokia’s dividend policy is to target recurring,
These describe the central principles of
such as 5G and IP Routing. Nokia has now stable and over time growing ordinary
how Nokia operates, as a company and as
largely closed the gap to the competition in dividend payments, taking into account
individuals, and guide how we interact with
5G and has a strong foundation for this new the previous year’s earnings as well as the
each other and the world around us. The
era of connectivity, where the peak of the company’s financial position and business
integration of these principles into Nokia’s
market is still ahead of us. outlook. The Board proposes a dividend
operating culture got off to a good start in
The 5G rollouts have enabled new services 2021, and we continue this work this year with authorization of EUR 0.08 per share and
and solutions. Based on our analysis, the our new people strategy launched in early 2022. announced a share buyback program that
global pandemic has accelerated the demand was initiated in February 2022 to return
for these solutions and services by several The Board’s work in 2021 EUR 600 million over two years.
years. Nokia is well-positioned to support Due to the COVID-19 pandemic, the 2021 The Board would like to thank all Nokia’s people
companies and societies in their digitalization Annual General Meeting was held with for their hard and committed work. Nokia
journey, and we are increasing our investment exceptional arrangements for the second enters 2022 in a strong position with improved
in private wireless to extend our lead in consecutive year at the company’s margins, faster than expected strategy
this area. headquarters in Espoo on 8 April, 2021. execution, a strong leadership team, and
Approximately 66 300 shareholders empowered and talented people as well as
While the benefits of 5G are beginning to
representing approximately 2 470 million strengthened technology leadership.
become apparent, the race to develop 6G is
shares and votes were represented at
already underway. We want to lead this next There is still a lot of work left to be done,
the meeting.
technology cycle. As a result, this year Nokia but Nokia has all it takes to continue to
execute well against its strategy based
on the strong results achieved in 2021.
Board review
Selected financial data Operating and financial review
Selected Operating and

financial data financial review
This section includes selected financial and other measures for the Nokia Group as of and for each of the years in the three-year period ended The financial information included in this “Operating and financial Cost savings programs
31 December 2021. The information has been derived from, and should be read in conjunction with, our audited consolidated financial statements review” section as of 31 December 2021 and 2020, and for the years In 2018, following the completion of the Alcatel-Lucent integration
prepared in accordance with IFRS. The consolidated financial statements as of 31 December 2021 and 2020 and for the years ended 31 December ended 31 December 2021, 2020 and 2019 has been derived from and the related cost savings program, we announced a cost reduction
2021, 2020 and 2019 are included in this report. our audited consolidated financial statements included in this report. program to target substantial savings while continuing to make further
The financial information should be read in conjunction with, and is investments to drive future growth and higher returns. The savings
2021 2020 2019 qualified in its entirety by reference to, our audited consolidated came from a wide range of areas, including investments in digitalization
For the year ended 31 December (in EURm, except for percentage and personnel data) financial statements. to drive more automation and productivity, further process and tool
From the consolidated income statement simplification, significant reductions in central support functions to
Net sales 22 202 21 852 23 315 Results of operations reach best-in-class cost levels, prioritization of R&D programs to best
Operating profit 2 158 885 485 This “Results of operations” section discusses the results of our create long-term value, a sharp reduction of R&D in legacy products,
% of net sales 9.7% 4.0% 2.1% continuing and discontinued operations. driving efficiency from further application of our Common Software
Profit before tax 1 926 743 156 Foundation and innovative software development techniques, the
Profit/(loss) for the year from continuing operations 1 654 (2 513) 18 Impact of COVID-19 on our operations consolidation of selected cross-company activities and further
Loss for the year from discontinued operations (9) (3) (7) The COVID-19 pandemic that started in early 2020 and had a severe reductions in real estate and other overhead costs. In 2020, we
Profit/(loss) for the year 1 645 (2 516) 11 impact on the global economy and financial markets during the year, completed our cost savings program, generating the expected savings
From the consolidated statement of financial position continued to affect people and businesses around the world in 2021. through the actions listed above. The cost savings program resulted
Non-current assets 20 452 17 976 22 320 While the situation is improving and economic recovery is on its way, in EUR 500 million of net benefits in full year 2020, compared to full
Current assets 19 597 18 215 16 808 certain parts of the world and certain sectors of the economy continue year 2018.
Total assets 40 049 36 191 39 128 to be hit harder than others. In 2020, the impact of COVID-19 on our
financial performance and financial position was primarily related to In the first quarter of 2021, we announced plans to reset our cost base,
Capital and reserves attributable to equity holders of the parent 17 360 12 465 15 325 targeting a reduction of approximately EUR 600 million by the end of
Non-controlling interests 102 80 76 temporary factory closures in the first half of the year. The factory
closures related primarily to Submarine Networks business in Network 2023. Given the strength in our end markets in 2021, the pace of
Total equity 17 462 12 545 15 401 restructuring in 2021 has been slower than we initially planned. The
Interest-bearing liabilities(1) 4 653 5 576 4 277 Infrastructure and had a negative impact on net sales, with the majority
of these net sales shifting to future periods, rather than being lost. In overall size of the plan, however, remains unchanged, and continues
Lease liabilities(1) 1 009 910 1 030 to depend on the evolution of our end markets – consistent with our
Provisions(1) 1 569 1 532 1 209 addition, COVID-19 affected our operational costs and cash flows in
2020, for example as a result of temporarily lower travel, temporary commentary when we announced the plan. In February 2022, we
Other liabilities(1) 15 356 15 628 17 211 updated our expectations for restructuring and associated charges as
Total shareholders’ equity and liabilities 40 049 36 191 39 128 delays in capital expenditure and lower cash outflows related to income
taxes due to tax reliefs. In 2021, we saw some benefit related to an well as cash outflows, compared to our original estimates. We expect
Other information the cost savings to result in approximately EUR 500-600 million of
increase in demand in areas like Fixed Networks, where trends such as
Research and development expenses (4 214) (4 087) (4 532) restructuring and associated charges by 2023, down from our previous
remote working drove communications service providers to increase
% of net sales (19.0)% (18.7)% (19.4)% estimate of EUR 600-700 million. We also expect total restructuring and
investments in their broadband infrastructure.
Capital expenditure (560) (479) (690) associated cash outflows to be approximately EUR 1 050-1 150 million,
% of net sales (2.5)% (2.2)% (3.0)% As of 31 December 2021, potential risks and uncertainties continue down slightly from our previous estimate of EUR 1 100-1 200 million.
Personnel expenses (7 541) (7 310) (7 360) to exist related to the scope and duration of the COVID-19 pandemic This total includes approximately EUR 500 million of cash outflows
Average number of employees 87 927 92 039 98 322 and the pace and shape of the economic recovery following it, and it is related to our previous restructuring program.
Order backlog, EUR billion 20.3 16.6 18.8 impossible to predict with accuracy the precise impact of such risks
Key financial indicators and ratios on us, our operations and our business.
Earnings per share attributable to equity holders of the parent
Basic earnings per share, EUR
Continuing operations 0.29 (0.45) 0.00
Profit/(loss) for the year 0.29 (0.45) 0.00
Diluted earnings per share, EUR
Proposed dividend per share, EUR(2) 0.08 – –
Return on capital employed % 10.13% 4.60% 1.31%
Return on shareholders’ equity % 10.88% neg. 0.05%
Equity ratio % 43.60% 34.66% 39.36%
Net debt to equity (gearing) % (26.43)% (19.81)% (11.23)%
Cash and cash equivalents 6 691 6 940 5 910
Total cash and current financial investments(3) 9 268 8 061 6 007
Net cash and current financial investments(4) 4 615 2 485 1 730
Net cash from operating activities 2 625 1 759 390
Free cash flow 2 368 1 356 (297)
(1) Includes both current and non-current liabilities in the consolidated statement of financial position.
(2) The Board of Directors proposes to the Annual General Meeting to be authorized to decide in its discretion on the distribution of an aggregate maximum of EUR 0.08 per share as dividend and/or
equity repayment.
(3) Total cash and current financial investments consist of the following line items from our consolidated statement of financial position: cash and cash equivalents and current financial investments.
(4) Net cash and current financial investments equal total cash and current financial investments less long-term and short-term interest-bearing liabilities.


Board review
continued
For the year ended 31 December 2021 compared to the year ended 31 December 2020 Operating expenses Financial income and expenses
The following table sets forth the results of Nokia and the percentage of net sales for the years indicated. Our research and development expenses in 2021 were Financial income and expenses were a net expense of EUR 241 million
EUR 4 214 million, an increase of EUR 127 million, or 3%, compared in 2021, an increase of EUR 77 million, or 47%, compared to a net
2021 2020 to EUR 4 087 million in 2020. Research and development expenses expense of EUR 164 million in 2020. The net negative fluctuation in
Year-on-year represented 19.0% of our net sales in 2021 compared to 18.7% financial income and expenses was primarily due to a change in the
For the year ended 31 December EURm % of net sales EURm % of net sales change %
in 2020. The increase in research and development expenses was financial liability to acquire Nokia Shanghai-Bell non-controlling
Net sales 22 202 100.0 21 852 100.0 2 primarily related to increased investments in both Mobile Networks interest, partially offset by lower loss allowances on customer
Cost of sales (13 368) (60.2) (13 659) (62.5) (2) and Network Infrastructure. The higher research and development financing loans. In 2021, the change in liability to acquire Nokia
Gross profit 8 834 39.8 8 193 37.5 8 expenses also reflected lower restructuring and associated charges. Shanghai-Bell non-controlling interest was negative EUR 33 million,
Research and development expenses (4 214) (19.0) (4 087) (18.7) 3 In 2021, variable pay accruals within research and development compared to positive EUR 79 million in 2020. In 2021, loss allowances
Selling, general and administrative expenses (2 792) (12.6) (2 898) (13.3) (4) expenses were higher, compared to 2020. In 2021, research and on customer financing loans recognized in the income statement
Other operating income and expenses 330 1.5 (323) (1.5) – development expenses included restructuring and associated were EUR 32 million, compared to EUR 58 million in 2020.
charges of EUR 62 million, compared to EUR 190 million in 2020.
Operating profit 2 158 9.7 885 4.0 144 Profit before tax
Share of results of associated companies and joint ventures 9 – 22 0.1 (59) Our selling, general and administrative expenses in 2021 were Our profit before tax in 2021 was EUR 1 926 million, an increase
Financial income and expenses (241) (1.1) (164) (0.8) 47 EUR 2 792 million, a decrease of EUR 106 million compared to of EUR 1 183 million compared to EUR 743 million in 2020.
EUR 2 898 million in 2020. Selling, general and administrative
Profit before tax 1 926 8.7 743 3.4 – Income tax
expenses represented 12.6% of our net sales in 2021 compared to
Income tax expense (272) (1.2) (3 256) (14.9) – 13.3% in 2020. The decrease in selling, general and administrative Income taxes were a net expense of EUR 272 million in 2021,
Profit/(loss) for the year 1 654 7.4 (2 513) (11.5) – expenses was broad-based across businesses and largely reflected a decrease of EUR 2 984 million compared to a net expense of
efforts to reduce our cost base. Additionally, the lower selling, EUR 3 256 million in 2020. The decrease in net income taxes was
Attributable to: primarily attributable to the derecognition of Finnish deferred tax
Equity holders of the parent 1 632 7.4 (2 520) (11.5) – general and administrative expenses in 2021 reflected lower
amortization of acquired intangible assets, partially offset by the assets of EUR 2.9 billion that negatively impacted 2020 and, to a
Non-controlling interests 22 0.1 7 – 214 lesser extent, tax benefits related to both past operating model
absence of a transaction and integration-related credits which
benefited 2020 and slightly higher restructuring and associated charges. integration, as well as a change in the recognition of deferred tax
Net sales The following table sets forth distribution of net sales by customer In 2021, variable pay accruals within selling, general and administrative assets in 2021. The derecognition in 2020 was required due to a
Net sales in 2021 were EUR 22 202 million, an increase of type for the years indicated. expenses were higher, compared to 2020. In 2021, selling, general and regular assessment of our ability to utilize the tax assets in Finland in
EUR 350 million, or 2%, compared to EUR 21 852 million in 2020. administrative expenses included amortization of acquired intangible the foreseeable future that is done primarily based on our historical
The increase in net sales was primarily due to growth in Network 2021 2020 Year-on-year assets of EUR 335 million, compared to EUR 350 million in 2020. performance. These tax assets are not lost, and the derecognition
Infrastructure and, to a lesser extent, Nokia Technologies. For the year ended 31 December EURm EURm change %
2021 did not include any transaction and integration-related credits, can be reversed. They can still be utilized in the taxation and the
This was partially offset by a decline in Mobile Networks net sales. Communication service providers 17 977 17 954 0 compared to EUR 11 million in 2020. 2021 included restructuring and derecognition is not expected to affect the overall taxation of
Enterprise 1 575 1 571 0 associated charges of EUR 74 million, compared to EUR 68 million the Nokia Group or its cash taxes. For further information on the
The following table sets forth distribution of net sales by region for realizability assessment of Finnish deferred tax assets, please refer
Licensees 1 502 1 402 7 in 2020.
the years indicated. to Note 11, Income taxes, of our consolidated financial statements.
Other(1) 1 148 925 24 Other operating income and expenses in 2021 was a net income of
2021 2020(1) Year-on-year Total 22 202 21 852 2 EUR 330 million, an increase of EUR 653 million, compared to a net Profit/loss attributable to equity holders of the parent and earnings
For the year ended 31 December EURm EURm change %
expense of EUR 323 million in 2020. The net positive fluctuation in per share
Asia Pacific 2 562 2 742 (7) (1) Includes net sales of Submarine Networks which operates in a different market, and Radio
our other operating income and expenses was primarily due to a The profit attributable to equity holders of the parent in 2021 was
Frequency Systems (RFS), which is being managed as a separate entity, and certain other items,
Europe(2) 6 635 6 427 3 such as elimination of inter-segment revenues and certain items related to purchase price non-cash impairment loss on goodwill which negatively impacted EUR 1 632 million, an increase of EUR 4 152 million, compared to a
allocation. Submarine Networks and RFS net sales also include revenue from communication
2020, a net positive fluctuation in the amount of loss allowances on loss of EUR 2 520 million in 2020. The change in profit attributable
Greater China 1 545 1 510 2 service providers and enterprise customers.
trade receivables, increased net benefits from Nokia’s venture fund to equity holders of the parent was primarily due to lower income tax
India 1 039 954 9 expenses and an improvement in operating profit, partially offset by
Latin America 1 226 1 070 15 Gross profit investments, a gain related to the settlement of legal disputes and
Gross profit in 2021 was EUR 8 834 million, an increase of foreign exchange hedging. a net negative fluctuation in financial income and expenses.
Middle East & Africa 1 915 1 981 (3)
EUR 641 million, or 8%, compared to EUR 8 193 million in 2020. Our EPS from continuing operations in 2021 was EUR 0.29 (basic)
North America 7 280 7 168 2 The increase in gross profit was primarily due to Network Operating profit
Our operating profit in 2021 was EUR 2 158 million, an increase of and EUR 0.29 (diluted) compared to negative EUR 0.45 (basic) and
Total 22 202 21 852 2 Infrastructure, Cloud and Network Services and Nokia Technologies, negative EUR 0.45 (diluted) in 2020.
partially offset by Mobile Networks. Gross profit in 2021 also reflected EUR 1 273 million, compared to an operating profit of EUR 885 million
(1) In 2021, we aligned how we externally report financial information on a regional basis with our
lower restructuring and associated charges and the absence of a gain in 2020. The increase in operating profit was primarily due to a net
internal reporting structure. As a result, India which was earlier presented as part of Asia Pacific
region is presented as a separate region. In addition, certain countries are now presented as related to defined benefit plan amendments. In 2021, variable pay positive fluctuation in other operating income and expenses, higher
part of a different region. The comparative net sales by region amounts for 2020 have been
accruals within cost of sales were higher, compared to 2020. Gross gross profit and lower selling, general and administrative expenses,
recast accordingly.
margin in 2021 was 39.8%, compared to 37.5% in 2020. In 2021, partially offset by higher research and development expenses.
(2) All Nokia Technologies IPR and licensing net sales are allocated to Finland.
gross profit included restructuring and associated charges of Our operating margin in 2021 was 9.7%, compared to 4.0% in 2020.
EUR 121 million, compared to EUR 393 million in 2020. In 2021,
gross profit did not include a gain related to defined benefit plan
amendments, compared to a gain of EUR 90 million in 2020.

Board review
continued
Results of segments Network Infrastructure

In 2021, we had four operating and reportable segments for the financial reporting purposes: (1) Mobile Networks, (2) Network Infrastructure, For the year ended 31 December 2021 compared to the year ended 31 December 2020
(3) Cloud and Network Services and (4) Nokia Technologies. We also present segment-level information for Group Common and Other. We The following table sets forth the segment operating results and the percentage of net sales for the years indicated.
adopted our current operational and reporting structure on 1 January 2021. The reporting structure was revised to reflect our new strategy
and operational model which is aligned with the way the management evaluates the operational performance of Nokia and allocates resources. 2021 2020
Year-on-year
Segment information for 2020 and 2019 has been recast for comparability purposes according to the new operating and reporting structure. For the year ended 31 December EURm % of net sales EURm % of net sales change %
For more information, refer to Note 5, Segment information, in the consolidated financial statements. Net sales(1) 7 674 100.0 6 736 100.0 14
The amounts presented in this “Results of segments” section for each reportable segment and Group Common and Other represent Cost of sales (4 990) (65.0) (4 375) (64.9) 14
the amounts reported to the management for the purpose of assessing performance and making decisions about resource allocation. Gross profit 2 684 35.0 2 361 35.1 14
Certain costs and revenue adjustments are not allocated to the segments for this purpose. For more information on our operational and Research and development expenses (1 165) (15.2) (1 084) (16.1) 7
reporting structure as well as the reconciliation of reportable segment measures to those of the Nokia Group, refer to Note 5, Segment Selling, general and administrative expenses (765) (10.0) (777) (11.5) (2)
information, in the consolidated financial statements.
Other operating income and expenses 30 0.4 (43) (0.6) –
Mobile Networks Operating profit 784 10.2 457 6.8 72
For the year ended 31 December 2021 compared to the year ended 31 December 2020 (1) In 2021, net sales include IP Networks net sales of EUR 2 679 million, Optical Networks net sales of EUR 1 708 million, Fixed Networks net sales of EUR 2 358 million and Submarine Networks net sales
The following table sets forth the segment operating results and the percentage of net sales for the years indicated. of EUR 929 million. In 2020, net sales include IP Networks net sales of EUR 2 585 million, Optical Networks net sales of EUR 1 695 million, Fixed Networks net sales of EUR 1 759 million and Submarine
Networks net sales of EUR 697 million.
2021 2020
Year-on-year Net sales Operating expenses
For the year ended 31 December EURm % of net sales EURm % of net sales change % Network Infrastructure net sales in 2021 were EUR 7 674 million, an Network Infrastructure research and development expenses were
Net sales 9 717 100.0 10 398 100.0 (7) increase of EUR 938 million, or 14%, compared to EUR 6 736 million EUR 1 165 million in 2021, an increase of EUR 81 million, or 7%,
Cost of sales (6 080) (62.6) (6 666) (64.1) (9) in 2020. The increase in Network Infrastructure net sales reflected compared to EUR 1 084 million in 2020. The increase in research and
Gross profit 3 637 37.4 3 732 35.9 (3) growth across all businesses, with particular strength in Fixed development expenses primarily reflected continued investments
Research and development expenses (2 078) (21.4) (1 881) (18.1) 10 Networks and Submarine Networks. In full year 2021, net sales were in customer-focused technology leadership. In 2021, variable pay
also impacted by supply constraints. accruals within Network Infrastructure research and development
Selling, general and administrative expenses (832) (8.6) (906) (8.7) (8)
expenses were higher, compared to 2020.
Other operating income and expenses 38 0.4 (126) (1.2) – IP Networks net sales were EUR 2 679 million in 2021, an increase of
Operating profit 765 7.9 819 7.9 (7) EUR 94 million, or 4%, compared to EUR 2 585 million in 2020. Net Network Infrastructure selling, general and administrative expenses
sales in IP Networks increased in 2021, despite some supply chain were EUR 765 million in 2021, a decrease of EUR 12 million, or 2%,
Net sales Operating expenses constraints, driven by ongoing technology leadership, with particular compared to EUR 777 million in 2020. The decrease in Network
Mobile Networks net sales in 2021 were EUR 9 717 million, a decrease Mobile Networks research and development expenses were strength in North America and Latin America. Infrastructure selling, general and administrative expenses largely
of EUR 681 million, or 7%, compared to EUR 10 398 million in 2020. EUR 2 078 million in 2021, an increase of EUR 197 million, or 10% reflected efforts to reduce our cost base. In 2021, variable pay
Fixed Networks net sales were EUR 2 358 million in 2021, an increase accruals within Network Infrastructure selling, general and
The decrease in Mobile Networks net sales was primarily driven by compared to EUR 1 881 million in 2020. This reflected higher
of EUR 599 million, or 34%, compared to EUR 1 759 million in 2020. administrative expenses were higher, compared to 2020.
the earlier communicated market share loss and price erosion in investments in 5G R&D to accelerate our product roadmaps and cost
The strong growth in Fixed Networks net sales resulted from continued
North America. In full year 2021, net sales were also impacted by competitiveness. In 2021, variable pay accruals within Mobile Networks
growth in fiber technologies, broadband devices and Fixed Wireless Network Infrastructure other operating income and expenses was
supply constraints. research and development expenses were higher, compared to 2020.
Access, as CSPs continued to invest in broadband connectivity, an income of EUR 30 million in 2021, a change of EUR 73 million
Gross profit Mobile Networks selling, general and administrative expenses particularly in North America. compared to an expense of EUR 43 million in 2020. The change in
Mobile Networks gross profit in 2021 was EUR 3 637 million, a were EUR 832 million in 2021, a decrease of EUR 74 million, or 8%, other operating income and expenses was primarily due to a net
Optical Networks net sales were EUR 1 708 million in 2021, an increase positive fluctuation in the amount of loss allowances on trade
decrease of EUR 95 million, or 3%, compared to EUR 3 732 million in compared to EUR 906 million in 2020. The decrease in Mobile
of EUR 13 million, or 1%, compared to EUR 1 695 million in 2020. receivables and gains from foreign exchange hedging.
2020. Mobile Networks gross margin in 2021 was 37.4%, compared Networks selling, general and administrative expenses largely reflected
The slight increase in Optical Networks net sales primarily reflects
to 35.9% in 2020. The decrease in Mobile Networks gross profit efforts to reduce our cost base. In 2021, variable pay accruals within
growth in North America and Latin America, partially offset by a Operating profit
largely reflected lower net sales, partially offset by higher gross margin. Mobile Networks selling, general and administrative expenses were
decline in Asia Pacific. Network Infrastructure operating profit was EUR 784 million in 2021,
The higher gross margin in Mobile Networks stems mainly from higher, compared to 2020.
an increase of EUR 327 million, or 72%, compared to EUR 457 million
progress in our cost competitiveness, 5G growth, favorable regional Submarine Networks net sales were EUR 929 million in 2021, an
Mobile Networks other operating income and expenses was an income in 2020. Network Infrastructure operating margin in 2021 was 10.2%,
mix and EUR 80 million positive impact of a one-time software deal increase of EUR 232 million, or 33%, compared to EUR 697 million
of EUR 38 million in 2021, a change of EUR 164 million compared to an compared to 6.8% in 2020. The strong increase in operating margin
that was completed in the second quarter of 2021. In 2021, variable in 2020. The increase in Submarine Networks net sales continued to
expense of EUR 126 million in 2020. The change in other operating was primarily attributable to higher net sales and the net positive
pay accruals within Mobile Networks cost of sales were higher, be driven by large sub-sea telecommunications projects.
income and expenses was primarily due to a net positive fluctuation fluctuation in other operating income and expense, partly offset by
compared to 2020.
in the amount of loss allowances on trade receivables and gains from Gross profit higher research and development expenses.
foreign exchange hedging. Network Infrastructure gross profit in 2021 was EUR 2 684 million, an
increase of EUR 323 million, or 14%, compared to EUR 2 361 million
Operating profit
in 2020. Network Infrastructure gross margin in 2021 was 35.0%,
Mobile Networks operating profit was EUR 765 million in 2021, a
compared to 35.1% in 2020. The increase in Network Infrastructure
decrease of EUR 54 million, compared to EUR 819 million in 2020.
gross profit primarily reflected higher net sales. In 2021, variable pay
Mobile Networks operating margin was 7.9% in both 2021 and 2020.
accruals within Network Infrastructure cost of sales were higher,
compared to 2020.

Board review
continued
Cloud and Network Services Nokia Technologies

For the year ended 31 December 2021 compared to the year ended 31 December 2020 For the year ended 31 December 2021 compared to the year ended 31 December 2020
The following table sets forth the segment operating results and the percentage of net sales for the years indicated. The following table sets forth the segment operating results and the percentage of net sales for the years indicated.
2021 2020 2021 2020

Year-on-year Year-on-year
For the year ended 31 December EURm % of net sales EURm % of net sales change % For the year ended 31 December EURm % of net sales EURm % of net sales change %
Net sales 3 089 100.0 3 087 100.0 – Net sales 1 502 100.0 1 402 100.0 7
Cost of sales (1 929) (62.4) (2 071) (67.1) (7) Cost of sales (5) (0.3) (9) (0.6) (44)
Gross profit 1 160 37.6 1 016 32.9 14 Gross profit 1 497 99.7 1 393 99.4 7
Research and development expenses (537) (17.4) (552) (17.9) (3) Research and development expenses (201) (13.4) (190) (13.6) 6
Selling, general and administrative expenses (477) (15.4) (518) (16.8) (8) Selling, general and administrative expenses (92) (6.1) (81) (5.8) 14
Other operating income and expenses 20 0.6 (13) (0.4) – Other operating income and expenses (19) (1.3) 1 0.1 –
Operating profit 166 5.4 (67) (2.2) (348) Operating profit 1 185 78.9 1 123 80.1 6
Net sales Cloud and Network Services selling, general and administrative
Cloud and Network Services net sales in 2021 were EUR 3 089 million, expenses were EUR 477 million in 2021, a decrease of EUR 41 million, Net sales Nokia Technologies selling, general and administrative expenses in
an increase of EUR 2 million, or approximately flat, compared to or 8%, compared to EUR 518 million in 2020. The decrease in Cloud Nokia Technologies net sales in 2021 were EUR 1 502 million, an 2021 were EUR 92 million, an increase of EUR 11 million, or 14%,
EUR 3 087 million in 2020. The net sales performance in Cloud and and Network Services selling, general and administrative expenses increase of EUR 100 million, or 7%, compared to EUR 1 402 million in compared to EUR 81 million in 2020. The increase in Nokia
Network Services reflected growth in Core Networks and Enterprise largely reflected efforts to reduce our cost base. In 2021, variable pay 2020. The increase in Nokia Technologies net sales primarily reflects Technologies selling, general and administrative expenses was
Solutions, which was offset by declines in Cloud and Cognitive Services accruals within Cloud and Network Services selling, general and new and renewed patent license agreements signed this year and in primarily due to higher licensing-related costs. In 2021, variable pay
and Business Applications. administrative expenses were higher, compared to 2020. 2020, positive traction in other patent license agreements in the accruals within Nokia Technologies selling, general and administrative
consumer electronics and automotive sectors, as well as catch-up net expenses were higher, compared to 2020.
Gross profit Cloud and Network Services other operating income and expenses was sales related to new patent license agreements. This was partially
Cloud and Network Services gross profit in 2021 was EUR 1 160 million, an income of EUR 20 million in 2021, a change of EUR 33 million offset by lower brand licensing net sales and lower net sales from one Nokia Technologies other operating income and expenses in 2021 was
an increase of EUR 144 million, or 14%, compared to EUR 1 016 million compared to an expense of EUR 13 million in 2020. The change in licensee, following the expiration of a patent licensing agreement in an expense of EUR 19 million, a change of EUR 20 million compared to
in 2020. Cloud and Network Services gross margin in 2021 was 37.6%, other operating income and expenses was primarily due to a net the third quarter of 2021. an income of EUR 1 million in 2020. The change in other operating
compared to 32.9% in 2020. The increase in Cloud and Network positive fluctuation in the amount of loss allowances on trade income and expense was primarily related to a settlement charge
Services gross profit was primarily due the absence of project-related receivables. Gross profit related to a one-time transaction.
loss provisions, which negatively impacted 2020. In 2021, variable pay Nokia Technologies gross profit in 2021 was EUR 1 497 million, an
Operating profit increase of EUR 104 million, or 7%, compared to EUR 1 393 million in Operating profit
accruals within Cloud and Network Services cost of sales were higher, Nokia Technologies operating profit in 2021 was EUR 1 185 million,
compared to 2020. Cloud and Network Services operating profit was EUR 166 million in 2020. The higher gross profit in Nokia Technologies was primarily due
2021, a change of EUR 233 million, compared to an operating loss of to higher net sales. an increase of EUR 62 million, or 6%, compared to an operating profit
Operating expenses EUR 67 million in 2020. Cloud and Network Services operating margin of EUR 1 123 million in 2020. The increase in Nokia Technologies
Cloud and Network Services research and development expenses in 2021 was 5.4% compared to negative 2.2% in 2020. The increase in Operating expenses operating profit was primarily due to higher net sales, partially offset
were EUR 537 million in 2021, a decrease of EUR 15 million, or 3%, Cloud and Network Services operating margin in 2021 was primarily Nokia Technologies research and development expenses in 2021 were by higher operating expenses and a net negative fluctuation in other
compared to EUR 552 million in 2020. The decrease in Cloud and due to higher gross profit, lower operating expenses and a positive EUR 201 million, an increase of EUR 11 million, or 6%, compared to operating income and expense. Nokia Technologies operating margin
Network Services research and development expenses largely fluctuation in other operating income and expenses. EUR 190 million in 2020. The increase in Nokia Technologies research in 2021 was 78.9% compared to 80.1% in 2020.
reflected efforts to reduce our cost base. In 2021, variable pay and development expenses was primarily due to higher investments
accruals within Cloud and Network Services research and development to drive creation of intellectual property. In 2021, variable pay accruals
expenses were higher, compared to 2020. within Nokia Technologies research and development expenses were
higher, compared to 2020.

Board review
continued
Group Common and Other Liquidity and capital resources The cash inflow from operating activities included in 2021 paid
For the year ended 31 December 2021 compared to the year ended 31 December 2020 taxes of EUR 314 million, an increase of EUR 34 million compared to
Financial position EUR 280 million in 2020, interest received of EUR 41 million compared
The following table sets forth the operating results for Group Common and Other, and the percentage of net sales for the years indicated.
As of 31 December 2021, our total cash and current financial to EUR 33 million in 2020 and interest paid of EUR 192 million compared
2021 2020
investments (defined as cash and cash equivalents and current to EUR 35 million in 2020.
Year-on-year financial investments) equaled EUR 9 268 million, an increase of
For the year ended 31 December EURm % of net sales EURm % of net sales change % The cash outflow from investing activities was EUR 1 795 million in
EUR 1 207 million, compared to EUR 8 061 million as of 31 December
Net sales 257 100.0 269 100.0 (4) 2020. The increase was primarily attributable to net cash inflow from 2021, an increase of EUR 357 million compared to EUR 1 438 million
Cost of sales (270) (105.1) (262) (97.4) 3 operating activities of EUR 2 625 million, partially offset by capital cash outflow in 2020. Cash outflow from investing activities was
Gross profit (13) (5.1) 7 2.6 – expenditure of EUR 560 million, repayment of long-term borrowings primarily driven by net cash outflow of EUR 1 447 million of current
of EUR 927 million, and payment of principal portion of lease liabilities financial investments in 2021, compared to EUR 1 031 million in 2020
Research and development expenses (103) (40.1) (110) (40.9) (6)
of EUR 226 million. As of 31 December 2019, our total cash and and cash outflow due to the capital expenditure of EUR 560 million in
Selling, general and administrative expenses (213) (82.9) (207) (77.0) 3 2021 compared to EUR 479 million in 2020. This was partially offset by
current financial investments equaled EUR 6 007 million.
Other operating income and expenses 204 79.4 59 21.9 – net cash inflow from non-current financial investments of EUR 200
Operating loss (125) (48.6) (251) (93.3) (50) As of 31 December 2021, our net cash and current financial million compared to EUR 63 million in 2020.
investments (defined as total cash and current financial investments
less long-term and short-term interest-bearing liabilities) equaled Major items of capital expenditure in 2021 included investments in R&D
Net sales Group Common and Other other operating income and expense in EUR 4 615 million, an increase of EUR 2 130 million, compared to equipment, test equipment, hardware for telecommunication and cloud
Group Common and Other net sales in 2021 were EUR 257 million, 2021 was an income of EUR 204 million, an increase of EUR 145 million EUR 2 485 million as of 31 December 2020. The increase was environment, repair or improvements of sites, shipyards and vessels.
a decrease of EUR 12 million, or 4%, compared to EUR 269 million compared to a net income of EUR 59 million in 2020. The net positive mainly attributable to net cash inflow from operating activities
in 2020. The decrease in Group Common and Other net sales was fluctuation in other operating income and expense in 2021 was In 2021, our cash outflow from financing activities was EUR 1 212 million,
of EUR 2 625 million, partially offset by capital expenditure of
due to Radio Frequency Systems, primarily driven by lower net sales primarily related to increased net benefits from Nokia’s venture compared to EUR 883 million cash inflow in 2020. The cash outflow was
EUR 560 million, and payment of the principal portion of the lease
in North America. fund investments. In 2021, the net benefit related to Nokia’s venture primarily driven by payments of long-term borrowings of EUR 927 million
liabilities of EUR 226 million. As of 31 December 2019, our net cash
fund investments was EUR 190 million, compared to a net benefit and payments of the principal portion of lease liabilities EUR 226 million
Gross profit and current financial investments equaled EUR 1 730 million.
of EUR 50 million in the year-ago period. in 2021 compared to EUR 234 million in 2020.
Group Common and Other gross profit in 2021 was negative As of 31 December 2021, our cash and cash equivalents equaled
EUR 13 million, compared to EUR 7 million in 2020. Group Common Operating loss EUR 6 691 million, a decrease of EUR 249 million compared to
and Other gross margin in 2021 was negative 5.1% compared to Group Common and Other operating loss in 2021 was EUR 125 million, EUR 6 940 million as of 31 December 2020. As of 31 December 2019,
2.6% in 2020. a change of EUR 126 million, compared to an operating loss of our cash and cash equivalents equaled EUR 5 910 million.
EUR 251 million in 2020. The change in Group Common and Other
Operating expenses operating loss was primarily attributable to the net positive fluctuation
Group Common and Other research and development expenses
Cash flow
in other operating income and expense. 2021
in 2021 were EUR 103 million, a decrease of EUR 7 million, or 6%,
compared to EUR 110 million in 2020. The cash inflow from operating activities in 2021 was EUR 2 625 million,
an increase of EUR 866 million compared to a cash inflow of
Group Common and Other selling, general and administrative EUR 1 759 million in 2020. The increase was primarily attributable to an
expenses in 2021 were EUR 213 million, an increase of EUR 6 million, increase in net profit, adjusted for non-cash items, of EUR 3 358 million,
or 3%, compared to EUR 207 million in 2020. In 2021, variable pay an increase of EUR 607 million compared to EUR 2 751 million in 2020
accruals within Group Common and Other selling, general and and to a lesser extent in a decrease in cash tied-up to net working
administrative expenses were higher, compared to 2020. capital of EUR 268 million in 2021 compared to EUR 710 million cash
tied-up in 2020. The primary driver for the decrease in net working
capital tied-up compared to 2020 was related to a decrease in
receivables of EUR 239 million compared to an increase in receivables
of EUR 418 million in 2020 and to a lesser extent, a decrease in liabilities
of EUR 459 million compared to a decrease of EUR 845 million in 2020,
offset by an increase in inventories of EUR 48 million compared to a
decrease of EUR 553 million in 2020. The decrease in liabilities during
2021 was primarily attributable to a decrease in contract liabilities
and restructuring and associated cash outflows and partially offset
by an increase in liabilities related to variable pay and an increase in
trade payables.

Board review
continued
2020 Financial assets and debt Off-balance sheet arrangements Foreign exchange impact
Our cash inflow from operating activities in 2020 was EUR 1 759 million, As of 31 December 2021, our net cash and current financial There are no material off-balance sheet arrangements that have, or
We are a company with global operations and net sales derived from
an increase of EUR 1 369 million compared to a cash inflow of investments equaled EUR 4 615 million consisting of EUR 9 268 million are reasonably likely to have, a current or future effect on our financial
various countries, invoiced in various currencies. Therefore, our
EUR 390 million in 2019. The increase was primarily attributable to in total cash and current financial investments, and EUR 4 653 million condition, revenues or expenses, results of operations, liquidity,
business and results from operations are exposed to changes in
a decrease in cash tied-up to net working capital of EUR 710 million in of long-term and short-term interest-bearing liabilities. capital expenditures or capital resources that are material to investors,
exchange rates between the euro, our reporting currency, and other
2020 compared to EUR 1 788 million cash tied-up in 2019, and net except for the purchase obligations and lease commitments, as well
currencies, such as the U.S. dollar. The magnitude of foreign exchange
profit, adjusted for non-cash items, of EUR 2 751 million, an increase We hold our total cash and current financial investments as guarantees and financing commitments disclosed in Note 28,
exposures changes over time as a function of our net sales and costs
of EUR 113 million compared to EUR 2 638 million in 2019. The primary predominantly in euro. Our current financial investments mainly Commitments, contingencies and legal proceedings, and in Note 34,
in different markets, as well as the prevalent currencies used for
driver for the decrease in net working capital tied-up was related to include high-quality money market and fixed income instruments with Financial risk management, of our consolidated financial statements.
transactions in those markets. Significant changes in exchange rates
a decrease in liabilities of EUR 845 million compared to a decrease strict maturity limits. We also have a EUR 1 500 million revolving credit
Venture fund investments and commitments may also impact our competitive position and related price pressures
of EUR 2 232 million in 2019, and a decrease in inventories of facility available for liquidity purposes. The facility has no financial
through their impact on our competitors.
EUR 553 million compared to a decrease of EUR 285 million in 2019. covenants and remains undrawn. We make financing commitments to a number of unlisted venture
The decrease in liabilities was primarily attributable to a decrease in funds that make technology-related investments. The majority of the To mitigate the impact of changes in exchange rates on our results, we
As of 31 December 2021, our interest-bearing liabilities consisted of
trade payables, driven by lower inventory levels, a decrease in deferred investments are managed by NGP Capital, a global venture capital firm hedge material net foreign exchange exposures (net sales less costs in
EUR 750 million notes due in 2024, EUR 500 million notes due in 2025,
revenue and restructuring and associated cash outflows, partially backing entrepreneurs building a responsible and inclusive world a currency) typically with a hedging horizon of approximately 12 months.
a EUR 500 million R&D loan from the European Investment Bank
offset by an increase in provisions and an increase in liabilities related where the confluence of sensors, mobility, software and cloud For the majority of these hedges, hedge accounting is applied to
maturing in 2025, a EUR 250 million R&D loan from the Nordic
to employee benefits. The decrease in inventories was attributable to solutions will connect people and industries in new ways transforming reduce income statement volatility.
Investment Bank with final maturity in 2025, EUR 750 million notes
improved inventory management and temporary dynamics related to how we live and work. In January 2022, Nokia agreed on capital
due in 2026, USD 500 million notes due in 2027, EUR 500 million notes In 2021, approximately 25% of Nokia’s net sales and total costs were
COVID-19. In 2020, the increase in receivables was EUR 418 million commitment of USD 400 million to NGP Capital’s new venture fund,
due in 2028, USD 74 million notes due in 2028, USD 206 million notes denominated in euro, and approximately 50% of Nokia’s net sales and
compared to a decrease of EUR 159 million in 2019. Fund V, with Nokia as a sole investor. For more information on the
due in 2029, USD 500 million notes due in 2039, and EUR 124 million total costs were denominated in U.S. dollars. In 2021, approximately
new capital commitment, refer to Note 35, Subsequent events,
In 2020, cash inflow from operating activities included paid taxes of other liabilities. The EUR notes maturing in 2024, 2025, 2026 and 5% of Nokia’s net sales and total costs were denominated in
of our consolidated financial statements.
of EUR 280 million, a decrease of EUR 236 million compared to 2028 as well as the USD notes maturing in 2027 and 2039, are issued Chinese yuan.
EUR 516 million in 2019; interest received of EUR 33 million compared by Nokia Corporation, while the USD notes maturing in 2028 and 2029 As of 31 December 2021, our venture fund investments
to EUR 57 million in 2019; and interest paid of EUR 35 million compared are issued by Lucent Technologies Inc., a predecessor to Nokia of equaled EUR 758 million, compared to EUR 745 million as of The average currency mix for Nokia’s net sales and total costs:
to EUR 1 million in 2019. America Corporation (Nokia’s wholly-owned subsidiary, formerly known 31 December 2020. For more information on the fair value of our
as Alcatel-Lucent USA Inc.). The loans from the Nordic Investment Bank 2021 2020
venture fund investments, refer to Note 22, Fair value of financial
The cash outflow from investing activities equaled EUR 1 438 million and from the European Investment Bank are drawn by Nokia Corporation. instruments, of our consolidated financial statements. Currency Net sales Total costs Net sales Total costs
in 2020, an increase of EUR 1 148 million compared to EUR 290 million For more information on our interest-bearing liabilities, refer to Note 21, EUR ~25% ~25% ~25% ~25%
cash outflow in 2019. Cash outflow from investing activities was Interest-bearing liabilities, of our consolidated financial statements. As of 31 December 2021, our venture fund commitments equaled
primarily driven by cash outflow of EUR 1 154 million due to purchase EUR 137 million, compared to EUR 189 million as of 31 December USD ~50% ~50% ~50% ~50%
of current financial investments in 2020, compared to EUR 473 million in In February 2021, we redeemed EUR 350 million of the 1.00% 2020. As a limited partner in venture funds, we are committed to CNY ~5% ~5% ~5% ~5%
2019, and cash outflow due to the capital expenditure of EUR 479 million Senior Notes due March 2021. capital contributions and entitled to cash distributions according to Other ~20% ~20% ~20% ~20%
in 2020 compared to EUR 690 million in 2019. the respective partnership agreements and underlying fund activities. Total ~100% ~100% ~100% ~100%
In December 2021, we redeemed USD 500 million of the 3.375%
For more information on venture fund commitments, refer to Note 28,
Major items of capital expenditure in 2020 included investments in R&D Senior Notes due June 2022.
Commitments, contingencies and legal proceedings, and Note 34,
equipment, test equipment, hardware for telecommunication and cloud Financial risk management, of our consolidated financial statements. For the full year 2021 compared to the previous year, the U.S. dollar
In June 2021, we exercised our option to extend the maturity date
environment, plants, buildings and construction for transformation was weaker against the euro. The weaker U.S. dollar in 2021 on a
of the EUR 1 500 million revolving credit facility. Subsequent to the
projects, and repair or improvements of sites. Treasury policy year-on-year basis had a negative impact on our net sales reported
extension, EUR 1 412 million of the facility has its maturity in June
Treasury activities are governed by the Nokia Treasury Policy approved in euros. However, the weaker U.S. dollar also contributed to slightly
In 2020, our cash inflow from financing activities was EUR 883 million, 2026 and EUR 88 million of the facility has its maturity in June 2024.
by the President and CEO within the authority granted by the Board of lower costs of sales and operating expenses on a year-on-year basis.
compared to EUR 479 million cash used in 2019. The cash inflow In total, before hedging, the weaker U.S. dollar on a year-on-year basis
We consider that with EUR 9 268 million of total cash and current Directors and supplemented by operating procedures approved by the
was primarily driven by cash inflow from long-term borrowings of had a slightly negative effect on our operating profit in 2021.
financial investments, and with our undrawn revolving credit facility, CFO, covering specific areas such as foreign exchange risk, interest
EUR 1 349 million, partially offset by paid dividends of EUR 148 million,
we have sufficient funds to satisfy our future working capital needs, rate risk, credit risk and liquidity risk. The objective of treasury’s
paid by subsidiaries of the Group to non-controlling interest, compared For a discussion of the instruments used by us in connection with our
capital expenditure, R&D investments, structured finance, venture liquidity and capital structure management activities is to ensure that
to EUR 570 million in 2019, primarily relating to dividends to equity hedging activities, refer to Note 34, Financial risk management, of our
fund commitments, acquisitions and debt service requirements, at we have sufficient liquidity to go through unfavorable periods without
holders of the parent. The payments of the principal portion of lease consolidated financial statements. Refer also to “Operating and
least through 2022. We further consider that with our current credit being severely constrained by the availability of funds to execute
liabilities were EUR 234 million in 2020 compared to EUR 221 million financial review and prospects – Risk factors”.
ratings of BB+ by Standard & Poor’s, Ba2 by Moody’s, and BBB- by Nokia’s business plans and implement Nokia’s long-term business
in 2019.
Fitch, we have access to the capital markets should any funding needs strategy. We are risk-averse in our treasury activities.
arise in 2022.
We aim to re-establish investment grade credit ratings.

Board review
Sustainability and corporate responsibility
Sustainability
In our sustainability work, we focus on 13 key
HIGH
topic areas based on the results of a thorough Connecting people and things
materiality analysis. Our materiality analysis is
based on global macro trends that have an
and corporate
impact on sustainable development, our
regular engagement with various stakeholders Climate
including our customers and investors, and Nokia’s direct
benchmarking industry peers and leaders Sustainability related
products and services
economic impact KEY
in sustainability. The diagram on the right FOCUS
responsibility
shows the top right quadrant of our
materiality matrix.
Ethical business practices and
corporate governance
Preventing the misuse

of our technology Health Privacy and
and safety data security
Improving lives with technology
We believe the positive impact of the technology we create and deliver provides Environment
Responsible
sourcing Employee
engagement,
our greatest contribution to the United Nations Sustainable Development Our people diversity and
IMPACT ON SUSTAINABLE DEVELOPMENT

Labor practices – own
inclusion
Goals (SDGs) and considerably outweighs potential negative impacts. Integrity operations
All the topics shown in this diagram are material to Prevention of environmental
our sustainability work. Those in the top right corner pollution in own operations
of the diagram are most important to our business
and sustainable development. Sustainable
product materials
Our products and solutions are designed to We aim to minimize the negative impact of our and focus for our activities. At the core of our and E-waste
drive social, environmental, and economic operations through continuous improvement approach is the belief that our technology
progress and are essential to solving some in product design and responsible business improves people’s lives. Our technology
of the world’s greatest challenges including practices that are underpinned by robust connects people to the services, places,
stalled productivity, climate change and policies, processes and management opportunities and other people that matter
unequal access to opportunity. They bring systems that align with globally recognized to them. This is aligned with our company
digitalization to physical industries, making frameworks. Our business model is purpose: Creating technology that helps the IMPACT ON OUR BUSINESS HIGH
them more efficient and sustainable, described in the “Business overview” world act together.
contribute to a more equitable, secure section of this report.
society, providing access to better healthcare, Our sustainability focus is built around actions
education and greater economic opportunity Our purpose, strategy and targets in three core areas where we believe we can
and a cleaner, safer planet with reduced have the greatest impact – Climate, Integrity
Our sustainability approach aligns with
carbon emissions and more efficient use and Culture. The three core areas are
the topics that are most material to our
of natural resources. underpinned by well-managed fundamental
business and where we have most impact on
responsible business processes, procedures
sustainable development, providing structure
and activities (see the picture below).
Fundamental responsible
business requirements
– Environmental management
– Circularity C
– Portfolio energy efficiency
E
UL
AT
– Supplier human and labor

TU
CL I M
rights
CREATING
RE
– Health & safety

– Inclusion & diversity TECHNOLOGY
– Labor practices in own THAT HELPS THE
operations WORLD ACT
– Ethics & compliance TOGETHER
– Preventing misuse of
technology
– Responsible sourcing
– Data privacy & security
IN TE G RITY

Board review
continued
Our business and the UN Sustainable Development Goals Key sustainability targets
The United Nations Sustainable Development Goals (SDGs) and their targets are a key framework for our Our targets are determined based on our sustainability approach and scope and balanced between short,
sustainability work. For us, goals 8, 9 and 13 are the most material and provide the areas in which we can medium and long term targets. The key targets are listed in the table below. More information about new
have the greatest positive impact. More examples of how the work we do actively contributes to SDGs targets set in 2021 and details about our work towards achieving the targets can be found as part of our
beyond these three goals can be found in our People & Planet report and on our website. We believe 2021 People & Planet report.
technology will continue to play a critical role in accelerating and achieving all 17 SDGs.
Target Base
Focus area year year Target 2021 results Target status
2030 2019 Our Science-based target (SBT): Emissions covered by our SBT were 37 598 000 Not on track
Reduce our greenhouse gas (GHG) emissions tCO2e* which, as anticipated, are 8% above our
across our value chain (Scope 1, 2 and 3) by 50% cumulative carbon budget for 2020–2021, if a
between 2019 and 2030, and reach net zero linear reduction from 2019 is expected annually.
by 2050. However, we do not expect the reduction of
emissions in our value chain to be a linear
process. We plan to achieve our target of 50%
reduction in emissions by 2030 as we see
greater impact as more energy efficient
products and features of our portfolio are
adopted and decarbonization of the electricity
grid continues globally.
CLIMATE 2030 2019 Our final assembly suppliers reach net zero Our final assembly suppliers’ emissions were On track
emissions 59 000 tCO2e which is a 22% decrease
by 2030. from 2019.
2030 2019 Our suppliers reduce GHG emissions by 50% Our suppliers’ emissions were 1 571 600 tCO2e On track
by 2030. which is a 49% decrease from 2019.
2021 2020 Reach 45% coverage of renewable electricity 53% of our purchased electricity was renewable. Achieved
from the total purchased electricity.
2021 2019 Reduce GHG emissions from our facilities Emissions from our facilities were 243 200 Achieved
(Scope 1 and 2) by 20%. tCO2e which is a 30% reduction from 2019.
2021 2020 Divert 70% of facility waste from landfill. 80% of facility waste was diverted from landfill. Achieved
Promote inclusive Build resilient Take urgent action 2030 2016 100% of suppliers delivering high risk activity to 23% of relevant suppliers met H&S preferred On track
and sustainable infrastructure, to combat climate meet “H&S preferred supplier” status (score 4 or
more out of 5) in our Health & Safety maturity
supplier status.
economic growth, promote sustainable change and its assessment.
employment and industrialization and impacts

2021 2020 Keep the unexplained pay-gap closed. The unexplained pay-gap was closed for 2021. Achieved
decent work foster innovation CULTURE 2021 2020 Reach a minimum of 26% female hires in all
global external recruits.
25% of external recruits were women.
We aim to increase our marketing,
Not achieved
communication and talent attraction activities

As a global company we have significant Goal 9 remains the most material SDG for us Climate change is the most significant to make Nokia’s employer brand stand out for
direct and indirect economic impact. Our in the area of helping the world act together sustainability challenge for our business and diversity-friendly employment policies.
direct economic impact includes for example and improving people’s lives with our the planet and requires that we put in place
2021 2020 Direct 30% of our corporate social responsibility 33% of our CSR program spend was focused on Achieved
our purchasing from suppliers, wages and technology. It relates directly to the core the processes and concrete actions to do our (CSR) program spend towards initiatives focused empowering diversity.
benefits paid to our employees, income taxes of our business. The networks we supply to part. Through the technology we provide we on empowering diversity.
paid to the public sector, and community our customers provide access to people also help customers, other industries,
investments. The benefits of the technology everywhere, connecting them to more individuals and society digitalize industrial 2030 2016 Reach 85% favorability of employee/line manager Progress against the target was measured as On track
we provide deliver our greatest indirect impact. information, more public services and greater processes so that they become more engagement on ethics and compliance. favorable responses to the following question in
economic opportunities. The connectivity predictive and productive, with reduced our employee survey: “My line manager sets a
emissions. We have set an ambitious positive example by acting with integrity.” 91% of
and digitalization our products and solutions
the responses were favorable.
provide are critical enablers of sustainable science-based target (SBT) in line with the
transformation of asset heavy industries 1.5°C warming scenario to reduce our scope 2025 2020 80% of suppliers receive satisfactory 68% of suppliers received satisfactory On track
including manufacturing. 1, 2 and 3 greenhouse gas emissions by 50% sustainability score from supplier performance sustainability score.
between 2019 and 2030. The SBT also evaluation (includes performance across our
includes reaching net zero by 2050. INTEGRITY
sustainability assessment programs such as
EcoVadis, CDP, Conflict minerals).
2022 2020 Complete our second Global Network Initiative Preparation to the assessment was started. On track
(GNI) assessment and, as a result, Nokia deemed
to have shown good faith efforts to implement
the GNI principles in freedom of expression
and privacy.
2021 2020 95% of our employees complete Ethical 97% of employees completed the training. Achieved
Business Training.
*tCO2e = tons of carbon dioxide equivalents

Board review
continued
Sustainability governance Risk management ■ product safety ■ purchasing boycotts and public harm
to our brand
The Board of Directors evaluates the Company’s sustainability-related risks and target setting as well as their implementation and effectiveness Sustainability risks and opportunities are part ■ environmental accidents
in Nokia. In 2021, the Board approved the selected key sustainability targets on climate change and diversity (included in the short-term incentive of our Enterprise Risk Management framework ■ issues with tariffs and taxation, including
program) and also reviewed the evolving ESG (environmental, social and governance) requirements and expectations, investor feedback and with multi-disciplinary company-wide risk ■ health & safety tax disputes
disclosure approach. In addition, the Board Committees monitor environmental and social developments and activities in the Company in their identification, assessment, and management ■ privacy and security, including
respective areas of responsibilities. In 2021, the Chief Corporate Affairs Officer had overall responsibility for sustainability in the Group Leadership processes. We recognize and aim to mitigate ■ disruptions in our manufacturing, service
cybersecurity threats creation, delivery, logistics or supply chain
Team (GLT). In line with our new mode of operation, GLT approves sustainability-related strategy, targets and operational frameworks, within which the potential risks and negative impacts
corporate functions and business groups can operate. This enables accountability and empowerment of each business group whilst maintaining associated with our business whether related ■ potential human rights abuse through caused, for instance, by natural disasters,
appropriate strategic and operative oversight. Independent councils and committees, such as the Sustainability Council, are used to steer, to technology, supply chain, climate or people, misuse of the technology we provide military actions, civil unrest, public health
align and ensure the implementation of these strategies, targets and frameworks and make recommendations to the GLT. Our overall sustainability while also driving the opportunities within and and safety threats (including disease
governance framework and responsibilities are shown in the diagram below. beyond our business in order to contribute to ■ potential lack of proper respect for outbreaks), many of which may be fueled
achieving the UN Sustainable Development human rights, fair labor conditions, by the adverse effects resulting from
Goals. Our Code of Conduct defines our way the environment and communities climate change.
of working and we have clear policies and in our operations and supply chains
Nokia Board ■ Reviews sustainability performance and targets minimum once a year and approves How these risks are managed, including
processes for each identified material ■ non-compliance with regulations or our related key policies and actions, is further
select key sustainability targets and corporate donations budget.
of Directors sustainability risk. supplier and customer requirements discussed in the following paragraphs,
■ Specific sustainability topics are reviewed by Board Committees based on their
responsibilities, including sustainability reporting, related risk management, ethics, The main features of our risk management ■ violation of ethical standards, including in the context of relevant topics.
cybersecurity and privacy, culture, human capital management and embedding systems are described as part of our our Code of Conduct
sustainability in our technologies. Corporate governance statement (see
Corporate Governance—Risk management, ■ labor unrest and strikes
internal control and internal audit functions ■ inability to retain, motivate, develop and
at Nokia). In addition, the “Risk factors” recruit appropriately skilled employees
Group ■ Reviews and approves implementation of and changes to sustainability-related policies, section of this report provides discussion
management and operational frameworks, strategy, targets and performance, annual on the most important risk factors affecting
Leadership sustainability report, and links to rewarding. our operations. These risks include
Team ■ Conducts sustainability review and provides feedback minimum 2 times per year and as sustainability-related issues such as:
topic-specific areas require
■ CEO, CFO and business group presidents review additional sustainability topics minimum
two times per year as part of Nokia business reviews.
Sustainability Donations and Inclusion and

Council Sponsorships Diversity Steering
Committee Committee
■ Steers the alignment of sustainability ■ Sets principles for allocation of ■ Reviews annual Inclusion and Diversity
strategy, priorities, and the corporate donations and investments (I&D) plans
implementation of sustainability for universities and communities ■ Sets Nokia-level I&D ambitions and
activities across Nokia ■ Approves funds for donation measures impact and targets
■ Contributes to the sustainability allocation and reviews major ■ Evaluates business group level I&D
strategy and materiality assessment, sponsorships actions and provides feedback to
and reviews sustainability targets ■ Assesses the impact of all donation business groups
and performance programs
Members
■ Provides additional insight to
Members Chief Legal Officer, Head of Inclusion &
sustainability-related risks and
Chief Financial Officer, Chief Corporate Diversity, other senior leaders from
opportunities
Affairs Officer, Chief People Officer, business groups, Human Resources,
Members Chief Technology Officer, Chief ESG and legal, and representatives
Senior leaders from units representing Compliance Officer, Vice President from employee resource groups.
product development, real estate, Head of Customer Experience Finance. Convened 3 times in 2021.
strategy and technology, human Convened 2 times in 2021.
resources, and procurement.
Convened 7 times in 2021.
ESG Corporate ESG function drives Ethics and Provides training and supports
the implementation of the employees in making decisions
function and sustainability strategy and actions Compliance that are ethical, legal, and
Sustainability needed to achieve the targets at Office consistent with our values.
the operational level. A Forum Investigates concerns about
Forum of subject matter experts from potential breaches of our Code
business units and functions of Conduct.
facilitates information sharing and
helps implement processes and Work at height and electrical work related to roll
activities to achieve the targets. out of networks requires us to insist on strict
health & safety requirements for all those
working on behalf of Nokia.

Board review
continued
TE C
A
UL
CLIM
CREATING
TURE
TECHNOLOGY
THAT HELPS THE
WORLD ACT
TOGETHER
IN T Y
E G RIT
Combating Our strategy to increase Circularity

Climate change is a significant risk to society. We have in place a robust environmental Our Scope 3 emissions were 40 634 700
We recognize that we provide products and management system and environmental tCO2e, increasing from the previous year due Closing the circularity gap is essential in
services globally that may affect the policy, supported by documented
circularity follows the in part to our sales growth and sold product
climate change
fighting climate change. We embed circularity
environment and climate as manufacturing, processes and procedures to ensure their mix. This means we are not on track with into everything we do and our strategy to
distributing, and operating these products
require energy and other resources. Our most
implementation. The system helps us to
monitor our progress and identify needed
classic waste hierarchy. our SBT if a linear reduction from 2019 is
expected annually. However, we do not expect
increase circularity follows the classic waste
hierarchy. First, we focus on the avoidance
material climate-related opportunities and
risks are related to our ability to help other
improvements. Our own operational
footprint is certified under the ISO 14001
The first principle of this the reduction of emissions in our value chain
to be a linear process. We plan to stay within
of waste through digitalization, operational
efficiency and product life extension. As we
industries to reduce their emissions and the
energy efficiency of our products. We believe
environmental management system
standard and at the end of 2021 the
is always the avoidance the 2020-2030 cumulative carbon budget
and achieve our target of 50% reduction in
cannot dematerialize everything, we ensure
robust waste management practices are in
that the opportunities our technology
provides to customers, industry and society,
coverage of employees within the scope
of that certification was 88%.
of waste, which we do emissions by 2030 as we see greater impact
as more energy efficient products and
place, where we look for options for reuse and
and the measures we have taken in our

Our climate ambition
through digitalization, features of our portfolio are adopted and
material recycling when reuse is not possible.
The final options are recovery and landfill.
operations can positively contribute to decarbonization of the electricity grid
the fight against climate change. We have set a science-based greenhouse operational efficiency continues globally.
We offer refurbishment and recycling of
older equipment as an integral part of our
gas (GHG) emission reduction target through
Our Highlights
Our own operations are not very sensitive
to the changes in energy pricing or natural
the Science Based Target (SBT) initiative: and product life Improvements in our product energy
efficiency in 2021 included for example FP5,
product lifecycle management. In 2021,
we sent around 3 270 metric tons of old
our target is to reduce our emissions by
We committed to use
catastrophes and severe weather, but climate
change can impact our customers and supply
50% between 2019 and 2030 across our extension. our fifth generation of high-performance IP
routing silicon, and the latest range of our
telecommunications equipment for materials
recovery and we refurbished or reused
value chain (Scope 1, 2 and 3). Our Scope 1
100%
chain, as well as the global economy, political AirScale 5G products. Implementing our AVA approximately 55 400 units with a combined
GHG emissions were 124 300 tCO2e and total weight of 350 metric tons.
and social stability. We have aligned our market-based Scope 2 emissions were solution provides additional efficiency by
climate-related disclosures in our CDP report 224 500 tCO2e. At the end of 2021, our powering down parts of the radio network
according to the guidance of the Task Force on progress on scope 2 emissions has been when traffic levels are low. Modernization of
renewable electricity in our
Climate-related Financial Disclosures (TCFD). faster than initially planned as we continue legacy networks also drives improved energy
facilities by 2025.
CDP is a global organization that runs a bespoke to make significant improvements in our efficiency, and the customer base station
global disclosure system for investors, sites we modernized in 2021 used on average
COP26
own operations. To further accelerate
companies, cities, states, and regions to improvements in our own operations we 46% less energy than those where our
manage their environmental impacts. also announced our new target to purchase customers did not modernize. We also work
100% renewable electricity in our facilities with our suppliers to reduce our upstream
We joined the World Economic by 2025 and joined the RE100 initiative indirect emissions – read more in the
Forum’s First Movers Coalition as communicated in January 2022. Responsible sourcing section of this chapter.
as a founding member at COP26
climate conference in Glasgow.
46%
less energy was used on average
by the customer networks we
modernized in 2021 compared We look for options to recover and reuse materials
to those not modernized. and components and to use recycled content in
our products in order to drive a circular approach.
Given our good progress in reducing Scope 1

emissions, we decided to accelerate our
climate ambition regarding our own operations
and announced our new target to purchase
100% renewable electricity in our facilities
by 2025 and joined the RE100 initiative.

Board review
continued
TE C
A
UL
CLIM
CREATING
TURE
TECHNOLOGY
THAT HELPS THE
WORLD ACT
TOGETHER
IN T Y
E G RIT
Conducting We strive to conduct business in a manner consistent with the highest standards of business
ethics and integrity. We work to earn and keep the trust of our customers, governments,
employees and other stakeholders with whom we interact. Doing so requires a strong culture
A separate Code of Ethics sets out further
expectations of our President and CEO,
Chief Financial Officer, Deputy Chief Financial
Anti-corruption and bribery
We do not engage in, nor do we tolerate,
The Anti-Corruption Center of Excellence
(CoE) is a dedicated group within our
compliance team that assesses, monitors,
our business
corrupt behavior by our employees, partners,
of integrity, driven by leaders and embraced by all our employees, and a robust compliance Officer and Corporate Controller. We also have or suppliers. Improper payments are strictly and approves or rejects engagement with
program that is agile, practical and effective, and that reflects Nokia’s high standards. a Third-Party Code of Conduct that applies prohibited. We employ a multi-faceted high-risk third parties (including, but not
with integrity Our Code of Conduct

Our Code of Conduct provides the framework for our commitment to integrity. It unites us
to external third parties with whom we work,
which clearly states our expectations
regarding ethical conduct. Our codes are
approach to prevent corruption. We have clear
and unequivocal policies concerning improper
payments, facilitation payments, gifts and
limited to, commercial third parties and
other high-risk suppliers), as well as practices
such as gifts, entertainment, hospitality,
behind a common vision and set of values. Our Code of Conduct sets out four straightforward further supplemented by policies, procedures, hospitality, sponsorships and donations, sponsorships and donations. Potential
defining principles: we follow the laws where we do business; we set an example for one and guidance documents covering a range and other areas of corruption risk. customers are screened to identify risks
another by being honest and fair; we promote a culture of integrity through mutual respect of topics, such as third-party screening related to such matters as money laundering,
and trust; and we hold each other accountable to adhere to the Code of Conduct and report procedures and corporate hospitality. We carry out training and regularly terrorism financing, and human rights abuses.
potential violations. These four straightforward, guiding principles are supplemented by 14 key communicate to our employees regarding The activities of the CoE are digitalized and
business policy statements covering critical issues and risks we face (see the picture below). In 2021, we continued our longstanding legal and compliance risks, and we review tool-based, including, for example, monitoring
practice of providing annual training to our these risks and our mitigation measures with and training of third parties. Third parties
employees on ethical business practices, the company’s senior leadership and Audit must adhere to our Third-Party Code of
as well as other important topics such as Committee of the Board of Directors. We Conduct, and they are required to sign
Our Highlights inclusion and diversity and information
■ Conflicts of interests conduct periodic audits and risk assessments our anti-corruption certification annually.
security. Our Ethical Business Training was
97%
to ensure that we identify and respond to
■ Dealing with government officials completed by 97% of our employees, corruption risks across our operations.
We do business ■ Fair competition surpassing the target of 95%. We provide a Our Compliance Operations Reviews are
range of trainings and resources that include comprehensive assessments of compliance
of our employees completed
the right way ■ Improper payments (Anti-corruption)
comprehensive online courses, targeted risk within regions and business groups.
■ Trade compliance micro-learnings, compliance job aids, and live
the Ethical Business Training We also carry out risk-based due diligence
■ Working with third parties training. In 2021, anti-corruption training was and monitoring procedures for different
delivered to business groups, regional groups, categories of third parties (such as suppliers
In 2021, we implemented
Nokia service companies, joint ventures and and business partners) to assess and manage
439
other stakeholders with close to 6 000 potential risks related to engaging and
individuals trained. working with them. In addition, we screen
our end customers to assess possible legal,
supply chain audits, including 64 onsite ■ Environment compliance and reputational risks, including,
in-depth audits on corporate responsibility but not limited to, sanctions and money
topics, 36 onsite audits against our supplier We respect ■ Fair employment laundering risks.
requirements and 339 supplier assessments our people and ■ Health, safety & labor conditions
conducted using the EcoVadis scorecards ■ Human rights
community
■ Privacy
We became an official member of the
Responsible
Business Alliance
■ Controllership
We safeguard ■ Intellectual property & Confidential information
our assets ■ Insider trading
Sharing best practices is an integral part of our

way of working and an important training method.

Board review
continued
Oversight and grievance mechanisms Data privacy and security We have a Nokia-wide Information Security approach to human rights. Our human rights
Our Board of Directors and its Audit We have established a comprehensive Policy in place to reduce business risks by processes cover the whole value chain, from Human Rights Due Diligence
protecting and managing Nokia information supplier management to product end use
Committee and our executive leadership company-wide privacy program based on
in a consistent way, to protect the rights and and we have set clear requirements for all
cases reviewed in 2021
team all provide oversight of our ethics and relevant laws, best practices, and standards.
compliance program. Our Chief Compliance This program is supported by, and aligned interests of Nokia customers and Nokia, and areas separately.
Officer provides periodic reports and with, corporate, business-group, and central to enable transparency and accountability
with respect to the treatment of all Nokia Our Human Rights Due Diligence (HRDD)
updates concerning compliance programs, functions-level policies and processes. We aim process, which is embedded in our global
31
investigations, and evolving external to mitigate privacy risk in relation to the data information. We are committed to comply
with industry leading security practices and sales process, provides the mechanism and
enforcement and risk trends to the Board, we collect, process and store. We observe the tools to effectively deal with our most salient
Audit Committee and others, as needed. concept of data minimization, meaning we have ISO 27001 certifications for selected
operations. We also continue improving our human rights risks arising from the potential
Employees are expected and encouraged to endeavor only to collect personal data that misuse of the products and technology we
report concerns about ethical misconduct, is necessary for the purposes for which it is information security capabilities within
people, technologies and processes, as well provide. Before any sale is made, we aim to
potential violations of law, our Code of collected and to retain such data for no longer identify the level of possible risk to human
Conduct, or our company policies. We provide than is necessary. We implement appropriate as expanding the scope of the ISO 27001
rights through potential misuse of our
numerous channels and mechanisms to controls to ensure that only persons with a certification.
technology and provide mitigation if any risk
2
facilitate such reporting, including the means clear and justifiable need to know can access is identified. The HRDD process is initiated
to report anonymously (unless prohibited personal data. We have formal processes and
Human rights – freedom of expression
according to various triggers including
by local law), and we strive to ensure that procedures in place to manage and mitigate and privacy
technology type, customer, country and use
employees feel comfortable reporting any related risk to data subjects in the event We are committed to the principles of the
case. Of the cases handled by HRDD in 2021,
concerns. Our global Ombuds program of a personal data breach. These processes Universal Declaration of Human Rights, the
73% were resolved as ‘Go’, 26% as ‘Go with
helps drive our ‘speak-up’ culture and allays also include mechanisms to communicate in United Nations Global Compact, and the
conditions’, and 1% as ‘No go’. In addition to
any concerns employees may feel about a timely fashion with supervisory authorities, Organisation for the Economic Co-operation
potential product misuse, human rights risks
potential reprisal for having filed a report. should that be required. We measure and and Development (OECD) guidelines for
appear in our global supply chain. Our supply
monitor privacy maturity by undertaking Multinational Enterprises. We encourage our 1 Go 73%
In 2021, we received 853 concerns, of which chain risks and activities are further discussed
privacy maturity assessments across the suppliers and business partners to share
361 were investigated by our Business in the Responsible Sourcing section below and 2 Go with conditions 26%
business. A program of privacy awareness these values. We endorsed the United Nations
Integrity Group (our investigations team in in a separate modern slavery statement 3 No go 1%
and training ensures we continuously and Guiding Principles on Business and Human
the compliance organization) as alleged published on our website.
effectively address areas of the highest Rights in 2011. Our Code of Conduct together
violations of our Code of Conduct. In 2021, privacy impact.
We have regular engagement at Board and Leadership
with our Human Rights Policy sets out our
the Business Integrity Group closed 261 levels to ensure oversight of ethics and compliance
investigations into alleged violations of Security is a key concern in 5G, IoT and and other sustainability topics.
our Code of Conduct, 72 of which were other new technologies. We aim to develop Security is a key concern in today’s ever more
substantiated with cause found after products and services that meet or surpass complex networks. We build security and privacy
investigation. We also implemented corrective the applicable security standards. Hence, into the design of products and networks,
actions including 13 dismissals and 15 written we build privacy and security into the design with appropriate data protection safeguards.
warnings following investigations conducted of our products and services and employ The technology we provide can bring positive benefits to individuals and society
by the Business Integrity Group. Beyond appropriate safeguards to protect data as whole. We have a robust Human Rights Due Diligence process that aims to
individual discipline, these investigations against unauthorized use or disclosure. ensure the technology we provide is not misused to limit the privacy or freedom
resulted in detailed root cause analysis, and Nevertheless, we and our products may of expression of any individual or group.
remedial measures and improvements were be subject to cybersecurity incidents
identified and monitored for implementation. including those resulting from hacking, We are a member of the Global Network
viruses, malicious software, unauthorized Initiative (GNI), a multi-stakeholder group
modifications, or other activities that may of companies, civil society organizations
cause potential security risks and other (including human rights and press freedom
harm to us, our customers or other end groups), investors, and academics working
users of our products and services. together to protect and advance freedom
Therefore, we have developed and of expression and privacy in the ICT sector.
implemented processes and tools for use in A condition of membership for companies
product development, referred to as Design is agreement to adhere to the GNI Principles
for Security or DfSec, which underlies all and allowing GNI to conduct an independent
product development. In 2021, product assessment of the member company’s
security and DfSec requirements have progress towards implementing the GNI
been further enhanced to meet the latest Principles. We have started initial engagement
industry standards. and preparation in the fourth quarter of 2021
for the next assessment and will undergo
our second independent assessment
during 2022.

Board review
continued
We have partnered with our logistics service provider to reduce

emissions through net-zero flights that use Sustainable Aviation Fuel.
Our Highlights Responsible sourcing

We expect our suppliers to adhere to our
we have conducted refresher training sessions
regarding modern slavery and inclusion Traceability
COP26 of our materials

Third Party Code of Conduct and provide and diversity for our suppliers located in
them with our Supplier Requirements, high-risk countries, conducted further risk
including the Responsible Business Alliance
(RBA) Code of Conduct and additional,
assessments, and carried out a supplier
survey around inclusion and diversity.
and ensuring our
At COP26 UN Climate change
conference we were recognized for Nokia-specific sustainability requirements. We also continued our work with the Joint
Audit Cooperation, a group of our major
products are
The requirements cover such topics as
our capacity building work in supply
chains through an award by Defra UK environment, health, safety and security, customers who collaborate to drive
improvement and transparency in supply
conflict-free are
privacy, risk management, labor and human
(Department for Environment, Food
and Rural Affairs UK) and Responsible rights management, and ethics. We also run chain management, and we became an official
member of the Responsible Business Alliance.
a priority for us.
Business Alliance. assessments and audits of our suppliers and
provide training to ensure they meet our Traceability of our materials and ensuring our
ethical requirements and continuously products are conflict-free are a priority for us,
improve on their performance. as evidenced in our Responsible Minerals
While COVID-19 and related precautions have Policy, which can be found online. The
limited the possibility of conducting onsite potential risks associated with the mining and
audits, we continue to assess and monitor trade of metals that provide key minerals in
our suppliers with more focus on remote electronic components may include impacts
activities. In 2021, we implemented related to military conflict, human rights
439 supply chain audits (391 in 2020), violations, as well as negative environmental We continued our CDP Supply Chain Program, To help us reduce our logistics emissions
including 64 onsite in-depth audits on impacts. Tin, tantalum, tungsten, gold and creating environmental improvement we partnered with our logistics service
corporate responsibility topics, 36 onsite cobalt are in scope of our due diligence. By programs and improving our upstream provider to implement net-zero flights using
audits against our supplier requirements and the end of 2021, 99% of our suppliers had indirect emissions that occur in the chain. Sustainable Aviation Fuel. To accelerate
339 supplier assessments conducted using achieved full visibility to the smelters in our In 2021, 441 of our key suppliers responded industry collaboration on reaching 1.5°C
the EcoVadis scorecards. We also ran training supply chain, and for 97% of our suppliers the to the CDP’s request to disclose their climate ambition, we were one of the founding
workshops for suppliers including for example entire supply chain consists of smelters that performance information and 296 also members in the World Economic Forum’s
topics such as climate change, conflict-free/ have been validated as conflict-free, active in provided emission reduction targets. First Movers Coalition. The Coalition is tasked
responsible minerals sourcing, modern the validation process or low risk. Our latest We also had 273 suppliers responding on to create the market and spur growth by
slavery, and health and safety. Following Conflict Minerals report was also updated the CDP Water security questionnaire. leveraging collective demand and committing
growing concerns around mistreatment during the year. To move forward with climate-related targets, to buying zero-emission goods and services
of ethnic and other minorities globally, we also encouraged suppliers to set climate across eight critical industry sectors by 2030.
targets to be in line with the Science At COP26 UN Climate change conference we
Based Targets initiative and recognized were recognized for our capacity building
climate-related innovations as part of work in supply chains through an award by
our Supplier Diamond Awards Program. Defra UK (Department for Environment,
With our final assembly suppliers, Food and Rural Affairs UK) and Responsible
we worked on specifying the activities for Business Alliance.
realizing their 2030 net-zero roadmaps.
Share of suppliers that have achieved conflict-free status

99% 97%
100%
80%
60%
40%
20%
0%
Suppliers that have completed Suppliers that have achieved
identification of all smelters conflict-free status

Board review
continued
TE C
The people strategy translates the essentials into ambitions

A
UL
CLIM
CREATING
TURE
TECHNOLOGY
THAT HELPS THE
and actions in four ways:

WORLD ACT
TOGETHER
IN T Y
E G RIT
Our culture – At Nokia, we care about our people. We aim to hire and retain
the best talent and provide a work environment where each Growing together Leading lights
Open, Fearless person can thrive.
Nokia people strategy Nokia people strategy
and Empowered Our essentials describe the foundation of our culture. There
are three – open, fearless and empowered – which incorporate
our values and determine how we, both as a company and as
individuals, interact with each other and the world around us.
The essentials reflect how it should feel to work at Nokia, People need to develop and refresh their skills in order to succeed In times of change and uncertainty, it is more important than ever to
and what we want our customers, suppliers and partners in their roles and grow their potential. Our objective is to enrich, lead with the essentials, and with strong human skills that promote
to experience working with us. recognize and reward individual experience and skills, matching psychological safety. The new hybrid working environment requires
personal and professional growth with the business needs of Nokia. connecting with employees in new ways, engaging through empathy,
whilst retaining strategic and operational focus.
Our Highlights Open We are committed to employee development and growth by providing
resources, learning opportunities and programs to enable employees In 2021 we designed our leadership expectations around our
We introduced our new I am open in mindset; to opportunity, to the future and teams to grow and develop business-critical technical, leadership essentials, embracing feedback and performance growth. The
Nokia Essentials – and evolving market needs, to new approaches,

and to collaborate.
and professional skills and manage their personal wellbeing. We have
around 280 internal coaches and around 400 mentors who are made
leadership approach also includes “informal leaders” such as project
leads and scrum masters to ensure that anyone influencing the work
which describe the foundation of our culture. available to all employees. In 2021, many of our face-to-face programs of others is equipped to do so. We delivered programs for new line
were impacted by COVID-19 and repurposed to be delivered virtually. managers and leaders covering around 600 participants to ensure
Every employee in Nokia received a Fearless On average our employees spent 30 hours in training during 2021. they are equipped to develop and retain our people, and to help them
grow in this unprecedented environment.
Recharge Day, I am fearless and bring my authentic self to work, sharing my
an additional day of leave to emphasize ideas and opinions and knowing that mistakes are ok as long
the importance of work-life-balance. as we can learn from them.
We belong Experience is
Empowered Nokia people strategy
everything
I am empowered and supported to make decisions and Nokia people strategy
own my work because I am trusted and I trust my colleagues,
who have my back in success or failure.
We are building a culture of belonging and personal connection to the To embed our new mode of operation we are shaping the Nokia
broader Nokia community. To truly act together, we must be inclusive, environment to enable people to be empowered and productive.
offering equal opportunities so that everyone feels valued, heard, We strive for increased flexibility in how and where employees work,
Our essentials are brought to life through our and able to contribute. simplified policies and processes, psychological safety and the
feeling of working in a united manner.
In 2021, we renewed our D&I ambition, strategy, and targets to
people strategy. continuously improve the inclusion of all our employees with special We announced our new flexible working approach that will be
focus on historically underrepresented groups. We introduced a effective from 2022 and allows employees (subject to business need)
mandatory training to help recognize exclusive behaviors and to work up to three days a week remotely on average, provides greater
understand their consequences. acceptance of fully remote work, and greater flexibility in their
Putting our people at the

working hours.
We continue to drive improvements in gender diversity by:
■ Monitoring pay equity. Assessment of the unexplained pay gap,
heart of everything we do as well as any mitigations required, are built into our annual salary
review to ensure that any pay gaps remain closed.
Nokia people strategy ■ Targeting 26% women in global external hiring, revising our
recruitment process, and providing training to recruiters and
managers on how to avoid bias. At the end of 2021, women
represented 25% of the external hires. Although we did not meet
our target, our actions increased the share of women hired in nearly
every quarter compared to the previous quarter.
■ Increasing our talent attraction activities to make Nokia’s brand
stand out for its diversity friendly policies.
■ Running programs in collaboration with UN Women, our customers
and internally to support women’s careers.

Board review
continued
Employee demographics Wellbeing ■ We granted all our employees an extra day We implement training, analysis, assessments
The market for skilled employees in our Average number of employees in 2021 We act to equip employees to manage their of paid annual leave as a ‘Recharge Day’ to and consequence management to address
recognize their dedication and hard work, job-related health and safety risks. We run a
business is extremely competitive, and even by geographical location personal well-being, feel safe talking about
offering a chance to switch off and reset. wide range of programs targeted at constantly
more so since the beginning of COVID-19. their mental health at work, and provide
Our workforce has fluctuated over recent access to the support they need, when they improving our health and safety performance,
1 North America 11 013 ■ Ergonomic guidance to help our employees
years as we have introduced changes in our need it most. while also encouraging employees and
2 Finland 6 301 adjust their home working environments
strategy to respond to our business targets contractors to report near misses and
3 Other European countries 31 395 Even before the pandemic, we actively to support muscular-skeletal wellbeing. dangerous incidents.
and our activities. These changes may in the 4 Greater China 12 244 supported wellbeing and work-life balance.
future cause disruption and fatigue among
5 Latin America 3 210 As the COVID-19 pandemic continued to pose
Health, safety and labor conditions We see the highest risk exposure to health
employees, which, when coupled with our Our Code of Conduct is the basis for labor and safety in the delivery of field work, which
6 Middle East & Africa 3 244 challenges for many people during 2021 we
employee demographics and a dependence conditions, enhanced by a full set of global is predominantly delivered by our contractors
7 Asia Paciﬁc 4 585 reassessed our initiatives to ensure we are
on key resources in some areas, make a human resources policies and procedures through tasks such as working at height,
focus on skill refresh, wellbeing, inclusivity 8 India 15 935 doing all we can to help people cope with the
disruption, including: that enable fair employment. We adhere to driving for work and electrical installation and
and enabling personal and professional the International Labor Organization (ILO) maintenance. Consequently, we have set
growth imperative. 1 ■ A new mental health training series, with Declaration on Fundamental Principles and stringent key performance indicators related
In 2021, the average number of employees regular trainings and resources covering a Rights at Work and we meet, or where possible to the supplier ability to deliver safely, which is
was 87 927 (92 039 in 2020 and 98 322 in broad range of wellbeing topics, including exceed, the requirements of labor laws and evaluated by our Health and Safety Maturity
emotional triggers and mindfulness, regulations wherever we have operations. Assessment process. By the end of 2021,
2019). The graph on the right shows the 2 preventing digital burn-out and building
average number of employees in 2021 We work hard to ensure decent working 99% of suppliers delivering high-risk activity
by geographical location. resilient muscles, with around 10 000 conditions and fair employment, taking had been assessed using our H&S Maturity
8 engagements via the live and on-demand into account both international and local Assessment Process and 98% of the assessed
At the end of 2021, 27% of our leadership sessions to date. laws and guidelines. Our health and safety suppliers met H&S compliant supplier status.
team’s positions were held by women, while 3 management system is the basis for our We also carried out impact assessments on
■ Our Personal Support Service continues
87 927
the share of women in all leadership positions 7 overall program and an integral part of how we 100% of all high-risk projects. 98% of those
across Nokia was 16%. In total, women to support all our employees and their
manage health and safety. The management projects were found to meet our minimum
accounted for 22% of our workforce. families, in their native language.
6 system is certified with the internationally non-negotiable requirements.
The service provides confidential support
recognized ISO 45001. The certification is
and guidance across a range of emotional,
provided by a third party, Bureau Veritas,
practical, and work-life issues, as well
5 and the share of our employees covered by
as mindfulness coaching to help with
the certification at the end of 2021 was 84%.
managing stress, and coaching to help
navigate life transitions.
4
Coaching and guidance play a key role in helping
to manage stress and work-life balance.
Share of women in 2021
50%
40% 38%
30% 27%
22%
20%
16%
10%
0%
Nokia Board Group Leadership All leadership Total
of Directors Team positions workforce

Board review
continued
Disclosure under the European Disclosure requirements for fiscal To determine our taxonomy-eligible activities, Our taxonomy-eligible net sales, capital expenditure and operating expenditure for 2021 are
year 2021 we have established a cross-organizational shown in the table below.
Union Taxonomy Regulation working group consisting of our business,
As a company subject to the European Union Reporting obligations are enforced gradually
finance and sustainability experts and Proportion of taxonomy-eligible Proportion of taxonomy non-eligible
(EU) Taxonomy Regulation (2020/852), in accordance with the timelines set out in the economic activities (%) economic activities (%)
conducted an analysis mapping our activities
including related implementing and delegated Taxonomy Regulation. For the financial year
to the taxonomy. From the activities included Net sales(1) <1% >99%
acts and their annexes, we are mandated to 2021, we are required to report financial
in the Annex I and II of the Climate Delegated Capital expenditure(2) <1% >99%
disclose the share of our net sales (turnover), indicators only for environmental objectives 1.
Act, we identified the following activities as Operating expenditure <1% >99%
capital expenditure and operating expenditure Climate change mitigation and 2 Climate
potentially relevant for Nokia: activities 3.6.
from/allocated to economic activities that are change adaptation. In the first reporting year
8.1, 8.2 and 9.1 for environmental objective 1, (1) Net sales as presented in the consolidated income statement.
eligible for or aligned with the EU taxonomy the requirements are also lighter in other (2) Additions to intangible assets, property, plant and equipment, and right-of-use assets. Refer to Note 13. Intangible assets, Note 14.
and activities 3.6, 8.1, 8.2 and 9.2 for
for environmentally sustainable activities and ways, meaning that companies shall report Property, plant and equipment, and Note 15. Leases in the consolidated financial statements.
environmental objective 2. Our final
its technical screening criteria. The purpose the share of activities that are eligible for the
assessment, however, concluded that in 2021
of the taxonomy is to help direct financing taxonomy instead of reporting the alignment Accounting policy for the Capital expenditure
we had taxonomy-eligible activities only in
of the activities. ‘Eligible’, in this context, In assessing its taxonomy-eligible CapEx, Nokia
to activities that contribute substantially category 8.2 Data-driven solutions for taxonomy-related financial KPIs
to following six environmental objectives: refers to activities that are recognized by the includes in the numerator capital expenditure
Greenhouse gas (GHG) emissions reductions Taxonomy-related reporting obligations
taxonomy but have not yet been evaluated related to the assets associated with its
(Objective 1: Climate change mitigation). include a description of an ‘accounting policy’,
1. Climate change mitigation; using the technical screening criteria, whereas taxonomy-eligible economic activities. In 2021,
‘aligned’ refers to activities that are eligible including calculation principles for the
We have taken a very strict and conservative Nokia did not identify capital expenditure
2. Climate change adaptation; numerator and the denominator. This section
and pass the technical screening criteria. interpretation regarding which activities can related to CapEx plans aimed at expanding
explains how net sales (turnover), capital
3. Sustainable use and protection of water qualify as eligible, meaning that for example taxonomy-aligned economic activities or
Starting from fiscal year 2022, companies expenditure and operating expenditure were
and marine resources; for activity 8.2 under Climate change allowing taxonomy-eligible economic
are required to disclose the share of aligned determined and allocated to the numerator;
mitigation we only consider data-driven activities to become taxonomy-aligned.
4. The transition to a circular economy; activities for environmental objectives 1 and the basis on which the net sales, capital
solutions ‘predominantly’ designed for The denominator is the total amount of
and 2. First reporting obligations related to expenditure and operating expenditure
5. Pollution prevention and control; and GHG emission reductions. additions to intangible assets, property,
objectives 3–6 are expected to apply to either were calculated.
plant and equipment, and right-of-use assets
6. Protection and restoration of biodiversity fiscal year 2022 or 2023, depending on the We provide connectivity and digitalization
Net sales during the financial year as presented in the
and ecosystems. final timeline of related technical criteria and solutions which enable efficiencies and
In assessing its taxonomy-eligible net sales consolidated financial statements (total
delegated acts. sustainable transformation of other
(turnover), Nokia includes in the numerator additions are presented in Note 13. Intangible
industries, with an important role as an assets, Note 14. Property, plant and
Nokia’s business activities and the estimated aggregated amount of net
enabler of decarbonization. Our products equipment, and Note 15. Leases). Additions
the EU taxonomy sales from products and services associated
have features that save energy, but those are considered before depreciation and
with its taxonomy-eligible economic activities.
The EU taxonomy and its technical screening features are usually designed and sold amortization for the relevant financial year.
In case the amount of net sales from a
criteria are dynamic, and further development as part of the overall product or solution and
product or service is not separately tracked
of the criteria takes place on the EU Platform are not ‘predominantly’ designed to reduce Operating expenditure
in Nokia’s financial reporting systems, for
on Sustainable Finance. Certain economic emissions; therefore we have determined In assessing its taxonomy-eligible OpEx,
example when the product is part of a larger
activities have been prioritized in the that many of our products and solutions, Nokia includes in the numerator the
solution sold to the customers, the amount
development of the taxonomy, meaning that such as 5G, are not eligible for the taxonomy direct operating expenses related to the
of net sales allocated to these products and
not all economic activities have yet been in its current form, although we will continue products and services associated with its
services is assessed using the best estimate
recognized in the taxonomy and its screening to assess this interpretation as more taxonomy-eligible economic activities.
of their share of the total net sales of
criteria. The share of eligible activities is taxonomy-related reporting guidance In 2021, Nokia did not identify operating
the larger solution they are part of. The
expected to be higher for many companies becomes available and the reporting process expenses related to CapEx plans aimed at
denominator is the total net sales of the
than the share of aligned activities, but in matures. We advocate that future work on the expanding taxonomy-aligned economic
Nokia Group as presented in the consolidated
general the rates of eligibility and alignment taxonomy will recognize the positive impact activities or allowing taxonomy-eligible
income statement.
are expected to remain low in the early that connectivity, digitalization and 5G economic activities to become
implementation phases of the regulation. technologies have on the six environmental taxonomy-aligned. The denominator
objectives of the taxonomy. as defined in the EU taxonomy consist of
direct costs that relate to research and
development, building renovation measures,
short-term leases, maintenance and repair,
and any other direct expenditures relating
to servicing of assets of property, plant
and equipment, excluding depreciation,
amortization and impairment costs.

Board review
Shares and shareholders
Shares and
Key ratios
For the year ended 31 December, Continuing operations 2021 2020 2019 2018 2017
Earnings per share, basic, EUR 0.29 (0.45) 0.00 (0.10) (0.26)
Earnings per share, diluted, EUR 0.29 (0.45) 0.00 (0.10) (0.26)
shareholders
P/E ratio 19.22 neg. – neg. neg.
Proposed dividend per share, EUR(1)(2) 0.08 0.00 0.00 0.20 0.19
Total dividends, EURm(1)(3) 456 – – 560 1 063
Payout ratio(1) 0.28 – – neg. neg.
Dividend yield %(1) 1.44 – – 3.98 4.88
As of 31 December 2021 2020 2019 2018 2017
Shareholders’ equity per share, EUR 3.08 2.22 2.73 2.73 2.89
Market capitalization, EURm 31 409 17 701 18 476 28 134 21 704
Share details
Shares and share capital (1) The Board of Directors proposes to the Annual General Meeting to be authorized to decide in its discretion on the distribution of an aggregate maximum of EUR 0.08 per share as dividend and/or
equity repayment.
Nokia has one class of shares. Each Nokia share entitles the holder to one vote at general meetings of Nokia. (2) In 2019, Nokia’s Annual General Meeting resolved to authorize the Board of Directors to resolve on the distribution of an aggregate maximum of EUR 0.20 per share as dividend for the financial year
2018 in four quarterly instalments. Finally, the Board of Directors resolved on the distribution of two quarterly instalments totaling EUR 0.10 per share.
As of 31 December 2021, the share capital of Nokia Corporation equaled EUR 245 896 461.96 and the total number of shares issued was (3) In 2021, total dividends are calculated based on the proposed Annual General Meeting authorization to the Board of maximum distribution of EUR 0.08 per share for the financial year 2021, and the
5 675 461 159. As of 31 December 2021, the total number of shares included 40 467 555 shares owned by Group companies representing total number of shares on the date of issuing the financial statements for 2021. On the date of issuing the financial statements for 2021 the total number of Nokia shares is 5 696 261 159.
Comparative amounts represent the actual total distribution to equity holders of the parent for the year presented.
approximately 0.7% of the total number of shares and the total voting rights.
In 2021, under the authorization granted to the Board of Directors by the Annual General meeting, the Parent Company issued 21 575 000 Share turnover
new shares without consideration to itself to fulfill the company’s obligation under the Nokia Equity Programs. For the year ended 31 December 2021 2020 2019 2018 2017
In 2021, under the authorization granted to the Board of Directors by the Annual General meeting, the Parent Company issued 17 497 244 Number of shares traded during the year (000s) (1)
16 560 334 13 903 762 11 003 630 8 960 687 8 839 680
treasury shares to employees, including certain members of the Group Leadership Team, as settlement under Parent Company equity-based Average number of shares excluding shares held by the Group during
incentive plans and the employee share purchase plan. The shares were issued without consideration and in accordance with the rules of the the year (000s) 5 630 025 5 612 418 5 599 912 5 588 020 5 651 814
plans. Share turnover % 294 248 196 160 156
Information on the authorizations held by the Board of Directors in 2021 to issue shares and special rights entitling to shares, to transfer shares (1) Source: Nasdaq Helsinki, the NYSE composite tape and Euronext Paris.
and repurchase own shares, as well as information on related party transactions, the shareholders, stock options, shareholders’ equity per
The principal trading markets for the shares are Nasdaq Helsinki and Euronext Paris, in the form of shares, and the NYSE, in the form of ADSs.
share, dividend yield, price per earnings ratio, share prices, market capitalization, share turnover and average number of shares is available in the
“Corporate governance—Compensation” section, and in Note 19, Equity, of the consolidated financial statements. Share price development
The Board of Directors held at 31 December 2021 a total of 1 116 075 shares and ADSs in Nokia, which represented approximately 0.02% of Nasdaq Helsinki New York Stock Exchange Euronext Paris
our total shares and voting rights excluding shares held by Nokia Group. The CEO owned at 31 December 2021 a total of 1 232 333 shares. High Low Value High Low Value High Low Value
There were no public takeover offers by third parties for Nokia’s shares or by Nokia for other companies’ shares during the 2020 and 2021 Annual data EUR USD EUR
fiscal years. 2021 Full year High/Low 5.71 3.12 9.79 3.75 5.70 3.12
2021 Full year Average (Volume-weighted) 4.22 5.06 4.20
Nokia does not have minimum or maximum share capital or a par value of a share.
Year-end value 31 December 2021 5.57 6.22 5.57
As of 31 December 2021 2020 2019 2018 2017 Year-end value 31 December 2020 3.15 3.91 3.14
Share capital, EURm 246 246 246 246 246 Change from 31 December 2020 to
Shares, (000s) 5 675 461 5 653 886 5 640 536 5 635 945 5 839 404 31 December 2021 76.8% 59.1% 77.4%
Shares held by the Group, (000s) 40 468 36 390 34 955 42 783 259 887
Number of shares excluding shares held by the Group, (000s) 5 634 993 5 617 496 5 605 581 5 593 162 5 579 517 Stock option exercises
Average number of shares excluding shares held by the Group Subscription price Number of new Date of Net proceeds New share capital
during the year Year(1) Stock option category EUR shares 000s payment EURm EURm
Basic, (000s)(1) 5 630 025 5 612 418 5 599 912 5 588 020 5 651 814 2019 Nokia Stock Option Plan 2013 1Q 2.58 0 2019 0.00 –
Diluted, (000s)(1) 5 684 235 5 612 418 5 626 375 5 588 020 5 651 814 Nokia Stock Option Plan 2013 2Q 2.35 23 2019 0.05 –
Number of registered shareholders(2) 233 844 246 886 248 526 243 409 247 717 Nokia Stock Option Plan 2013 3Q 2.72 0 2019 0.00 –
Nokia Stock Option Plan 2013 4Q 5.41 0 2019 0.00 –
(1) Used in calculation of earnings per share for profit or loss for the year attributable to equity holders of the parent.
(2) Each account operator is included in the figure as only one registered shareholder. Total 23 0.05
(1) After 2019 the Group no longer administered any global stock option plan. Refer to Note 24, Share-based payment.

Board review
Shares and shareholders
continued
Dividend and share buy-backs Breakdown of share ownership as of 31 December 2021(1)

The dividend to shareholders is Nokia’s principal method of distributing earnings to shareholders. Beginning with the distribution for the Number of % of Total number % of
financial year 2018, Nokia started paying dividends in quarterly instalments. On 24 October 2019, the Board resolved to pause dividend By number of shares owned shareholders shareholders of shares all shares
distributions, in order to: a) guarantee Nokia’s ability to increase 5G investments, b) continue investing in growth in strategic focus areas of 1–100 60 856 26.02 3 037 099 0.05
enterprise and software and c) strengthen Nokia’s cash position.
101–1 000 107 439 45.95 47 832 871 0.84
The dividend policy was updated at the Capital Markets Day in March 2021 to be “We target recurring, stable and over time growing ordinary 1 001–10 000 57 708 24.68 179 903 497 3.17
dividend payments, taking into account the previous year’s earnings as well as the company’s financial position and business outlook”. 10 001–100 000 7 371 3.15 180 346 263 3.18
The Board proposes to the Annual General Meeting 2022 to be authorized to decide in its discretion on the distribution of an aggregate 100 001–500 000 365 0.16 70 594 230 1.24
maximum of EUR 0.08 per share as dividend and/or as assets from the invested unrestricted equity fund. The authorization will be used to 500 001–1 000 000 33 0.01 22 961 237 0.41
distribute dividend and/or equity repayment in four instalments during the period of validity of the authorization unless the Board of Directors 1 000 001–5 000 000 50 0.02 124 312 091 2.19
decides otherwise for a justified reason. The proposed total authorization for dividend and/or equity repayment is in line with the Company’s Over 5 000 000 22 0.01 5 046 473 871 88.92
dividend policy. The authorization would be valid until the opening of the next Annual General Meeting. The Board would make separate Total 233 844 100.00 5 675 461 159 100.00
resolutions on the amount and timing of each distribution of the dividend and/or equity repayment.
(1) The breakdown covers only shareholders registered in Finland, and each account operator (12) is included in the number of shareholders as only one registered shareholder. As a result, the breakdown
In 2020 and 2021, Nokia generated strong cash flow which has significantly improved the cash position of the company. To manage the is not illustrative of the entire shareholder base of Nokia.
company’s capital structure, Nokia’s Board of Directors initiated a share buyback program under the current authorization from the Annual
General Meeting to repurchase shares, with purchases beginning in the first quarter of 2022. The program targets to return up to EUR 600 million By nationality % of shares
of cash to shareholders in tranches over a period of two years, subject to continued authorization from the Annual General Meeting. Non-Finnish shareholders 77.80
We distribute distributable funds, if any, within the limits set by the Finnish Companies Act as defined below. We make and calculate the Finnish shareholders 22.20
distribution, if any, in the form of cash dividends, assets from the reserve for invested unrestricted equity, share buybacks, or in some other Total 100.00
form, or a combination of these. There is no specific formula by which the amount of a distribution is determined, although some limits set
by law are discussed below. The timing and amount of future distributions of retained earnings and/or assets from the reserve for invested By shareholder category (Finnish shareholders) % of shares
unrestricted equity, if any, will depend on our future results and financial conditions.
Corporations 2.05
Under the Finnish Companies Act, we may distribute retained earnings and/or assets from the reserve for invested unrestricted equity on Households 7.15
our shares only upon a shareholders’ resolution and subject to limited exceptions in the amount proposed by the Board. The amount of any Financial and insurance institutions 2.27
distribution is limited to the amount of distributable earnings of the Parent Company pursuant to the last audited financial statements
Non-profit organizations 1.25
approved by our shareholders, taking into account the material changes in the financial situation of the Parent Company after the end of the
last financial period and a statutory requirement that the distribution of earnings must not result in insolvency of the Parent Company. Subject Governmental bodies (incl. pension insurance companies) 9.48
to exceptions relating to the right of minority shareholders to request a certain minimum distribution, the distribution may not exceed the Total 22.20
amount proposed by the Board of Directors.
As of 31 December 2021, a total of 1 112 307 568 ADSs (equivalent to the same number of shares or approximately 19.6% of the total shares)
Shareholders were outstanding and held of record by 110 198 registered holders in the United States. We are aware that many ADSs are held of record by
As of 31 December 2021, shareholders registered in Finland represented approximately 22% and shareholders registered in the name of a brokers and other nominees, and accordingly the above number of holders is not necessarily representative of the actual number of persons
nominee represented approximately 78% of the total number of shares of Nokia Corporation. The number of directly registered shareholders who are beneficial holders of ADSs or the number of ADSs beneficially held by such persons. Based on information available from Broadridge
was 233 844 as of 31 December 2021. Each account operator (12) is included in this figure as only one registered shareholder. Financial Solutions, Inc., the number of beneficial owners of ADSs as of 31 December 2021 was 1 386 233.
Largest shareholders registered in Finland as of 31 December 2021(1) Based on information known to us as of 2 February 2022, as of 31 December 2021, Blackrock, Inc. beneficially owned 367 636 592 Nokia
Total number shares, which at that time corresponded to approximately 6.5% of the total number of shares and voting rights of Nokia.
Shareholder of shares 000s % of all shares % of all voting rights
Solidium Oy 301 000 5.30 5.30 To the best of our knowledge, Nokia is not directly or indirectly owned or controlled by any other corporation or any government, and there are
no arrangements that may result in a change of control of Nokia.
Keskinäinen Työeläkevakuutusyhtiö Varma 97 952 1.73 1.73
Keskinäinen Eläkevakuutusyhtiö Ilmarinen 69 695 1.23 1.23 Shares and stock options owned by the members of the Board and the Nokia Group Leadership Team
Keskinäinen Työeläkevakuutusyhtiö Elo 30 520 0.54 0.54 As of 31 December 2021, the members of our Board and the Group Leadership Team held a total of 3 840 280 shares and ADSs in Nokia,
Valtion Eläkerahasto 25 000 0.44 0.44 which represented approximately 0.07% of our shares and total voting rights excluding shares held by the Nokia Group.
OP-Suomi -Sijoitusrahasto 17 681 0.31 0.31 Offer and listing details
Oy Lival Ab 16 697 0.29 0.29 Our capital consists of shares traded on Nasdaq Helsinki under the symbol “NOKIA” and Euronext Paris under the symbol “NOKIA”. Our ADSs,
Svenska Litteratursällskapet i Finland r.f. 15 678 0.28 0.28 each representing one of our shares, are traded on the NYSE under the symbol “NOK”. The ADSs are evidenced by American Depositary Receipts
Nordea Pro Finland Fund 10 838 0.19 0.19 (ADRs) issued by Citibank, N.A.
Sijoitusrahasto Seligson & Co 9 513 0.17 0.17
(1) Excluding nominee registered shares and shares owned by Nokia Corporation. Nokia Corporation owned 29 008 894 shares as of 31 December 2021.

Board review
Articles of Association
Articles of
By completing and returning the form of proxy The purchase price of the shares under our Pre-emptive rights
provided by the Depositary, a holder of ADSs Articles of Association is the higher of: (a) the In connection with any offering of shares,
also authorizes the Depositary to give notice weighted average trading price of the shares the existing shareholders have a pre-emptive
to us, required by our Articles of Association, on Nasdaq Helsinki during the ten business right to subscribe for shares offered in
of the holder’s intention to attend the days prior to the day on which we have been
Association
proportion to the amount of shares in their
general meeting. notified by the purchaser that its holding possession. However, a general meeting of
has reached or exceeded the threshold shareholders may vote, by a majority of
The rights of shareholders are related to the referred to above or, in the absence of such
shares as set forth in the Finnish Companies two-thirds of the votes cast and two-thirds
notification or its failure to arrive within the of the shares represented at the meeting,
Act and our Articles of Association. Neither specified period, the day on which our Board
Finnish law nor our Articles of Association to waive this pre-emptive right provided that,
otherwise becomes aware of this; or (b) the from the company’s perspective, weighty
sets limitations on the rights to own Nokia average price, weighted by the number of
securities, including the rights of foreign financial grounds exist.
shares, which the purchaser has paid for
shareholders to hold or exercise voting rights the shares it has acquired during the last
in the said securities. Amendment of the 12 months preceding the date referred
Monitoring of Foreign Corporate
Articles of Association requires a decision of to in (a). Acquisitions
the general meeting, supported by two-thirds Under the Finnish Act on the Monitoring of
of the votes cast and two-thirds of the shares Under the Finnish Securities Market Act, a Foreign Corporate Acquisitions (2012/172
represented at the meeting. shareholder whose voting power exceeds as amended), a notification to the Ministry
30% or 50% of the total voting rights in a of Economic Affairs and Employment is
Each of our shares confers equal rights to company shall, within one month, offer
Articles of Association Directors’ voting powers Under Finnish law, shareholders may attend share in the distribution of the company’s to purchase the remaining shares of the
required for a non-resident of Finland, directly
and vote at general meetings in person or funds. Under Finnish law, dividend entitlement or indirectly, when acquiring one-tenth or
Amendment of our Articles of Association Under Finnish law, resolutions of the Board company, as well as any other rights entitling
by proxy. It is not customary in Finland for lapses after three years if a dividend remains more of the voting power or corresponding
requires a resolution of the general meeting shall be made by a majority vote. A director to the shares issued by the company, such
a company to issue forms of proxy to its unclaimed for that period, in which case the factual influence in a company. The Ministry
of shareholders, supported by two-thirds of shall refrain from taking any part in the as subscription rights, convertible bonds or
shareholders. Accordingly, Nokia does not do unclaimed dividend will be recognized as of Economic Affairs and Employment has to
the votes cast and two-thirds of the shares consideration of an agreement between stock options issued by the company. The
so. However, registered holders and beneficial income by Nokia. confirm the acquisition unless the acquisition
represented at the meeting. the director and the company or third party, purchase price shall be the market price of
owners of ADSs are issued forms of proxy by would jeopardize important national interests,
or any other issue that may provide any the securities in question. Subject to certain
the Depositary. Disclosure of shareholder
Registration material benefit to him or her, which may be exceptions, the market price is determined
in which case the matter is referred to the
contradictory to the interests of the company. Council of State. If the company in question
Nokia is organized under the laws of the To attend and vote at a general meeting, a ownership or voting power on the basis of the highest price paid for is operating in the defense sector, an approval
Republic of Finland and registered in the Under Finnish law, there is no age limit shareholder must be registered in the register the security during the preceding six months
According to the Finnish Securities Market by the Ministry of Economic Affairs and
Finnish Trade Register under the business requirement for directors, and there are no of shareholders in the Finnish book-entry by the shareholder or any party in close
Act, a shareholder shall disclose his or her Employment is required before the acquisition
identity code 0112038-9. Under its current requirements under Finnish law that a director system on or prior to the record date set connection to the shareholder. Subject to
ownership or voting power to the company is made. These requirements are not
Articles of Association, Nokia’s corporate must own a minimum number of shares in forth in the notice of the general meeting. certain exceptions, if the shareholder or any
and the Finnish Financial Supervisory applicable if, for instance, the voting power is
purpose is to research, develop, manufacture, order to qualify to act as a director. However, A registered holder or a beneficial owner related party has not during the six months
Authority when the ownership or voting power acquired in a share issue that is proportional
market, sell and deliver products, software in accordance with the current company of the ADSs, like other beneficial owners preceding the offer acquired any securities
reaches, exceeds or falls below 5, 10, 15, 20, to the holder’s ownership of the shares.
and services in a wide range of consumer policy, approximately 40% of the annual whose shares are registered in the company’s that are the target for the offer, the market
25, 30, 50 or 90% of all the shares or Moreover, the requirements do not apply
and business-to-business markets. These fee payable to the Board members is paid register of shareholders in the name of a price is determined based on the average
the voting rights outstanding. The term to residents of countries in the European
products, software and services relate to, in Nokia shares purchased from the market nominee, may vote with their shares provided of the prices paid for the security in public
“ownership” includes ownership by the Economic Area or EFTA countries, except
among others, network infrastructure for or alternatively by using treasury shares held that they arrange to have their name entered trading during the preceding three months
shareholder, as well as selected related where at least one tenth of shares or other
telecommunication operators and other by Nokia, and the directors shall retain until in the temporary register of shareholders for weighted by the volume of trade.
parties, and calculating the ownership or controlling right in such resident are held by
enterprises, the IoT, human health and the end of their directorship such number the general meeting. voting power covers agreements or other a party not resident in the European Economic
well-being, multimedia, big data and analytics, of shares that corresponds to the number Under the Finnish Companies Act, a
The record date is the eighth business day arrangements, which when concluded would Area or EFTA.
mobile devices and consumer wearables and of shares they have received as Board shareholder whose holding exceeds
preceding the meeting. To be entered in the cause the proportion of voting rights or
other electronics. The company may also remuneration during their first three years nine-tenths of the total number of shares
temporary register of shareholders for the number of shares to reach, exceed or fall
create, acquire and license intellectual of service (the net amount received after or voting rights in Nokia has both the right
general meeting, a holder of ADSs must below the aforementioned limits. Upon
property and software as well as engage in deducting those shares used for offsetting and, upon a request from the minority
provide the Depositary, or have his broker receiving such notice, the company shall
other industrial and commercial operations, any costs relating to the acquisition of the shareholders, the obligation to purchase all
or other custodian provide the Depositary, disclose it by a stock exchange release
including securities trading and other shares, including taxes). the shares of the minority shareholders for
on or before the voting deadline, as defined without undue delay.
investment activities. The company may the then current market price. The market
carry on its business operations directly, Share rights, preferences and in the proxy material issued by the Depositary,
Purchase obligation price is determined, among other things,
a proxy with the following information: the on the basis of the recent market price of
through subsidiary companies, affiliate restrictions name, address, and social security number or Our Articles of Association require a the shares. The purchase procedure under
companies and joint ventures. Each share confers the right to one vote at another corresponding personal identification shareholder that holds one-third or one-half the Finnish Companies Act differs, and the
general meetings. According to Finnish law, number of the holder of the ADSs, the of all of our shares to purchase the shares purchase price may differ, from the purchase
a company generally must hold an Annual number of shares to be voted by the holder of all other shareholders that so request. procedure and price under the Finnish
General Meeting called by the Board within of the ADSs and the voting instructions. A shareholder who becomes subject to the Securities Market Act, as discussed above.
six months from the end of the financial year. The register of shareholders as of the record purchase obligation is also obligated to However, if the threshold of nine-tenths has
Additionally, the Board is obliged to call an date of each general meeting is public until purchase any subscription rights, stock been exceeded through either a mandatory
Extraordinary General Meeting, whenever the end of the respective meeting. Other options or convertible bonds issued by or a voluntary public offer pursuant to the
such meeting is deemed necessary, or at nominee registered shareholders can the company if so requested by the holder. Finnish Securities Market Act, the market price
the request of the auditor or shareholders attend and vote at the general meetings by under the Finnish Companies Act is deemed
representing a minimum of one-tenth of all instructing their broker or other custodian to to be the price offered in the public offer,
outstanding shares. Under our Articles of register the shareholder in Nokia’s temporary unless there are specific reasons to deviate
Association, the Board is elected at least register of shareholders and give the voting from it.
annually at the Annual General Meeting of instructions in accordance with the broker’s
the shareholders for a term ending at the or custodian’s instructions.
end of the next Annual General Meeting.

Board review
Risk factors
Risk factors
Our competitiveness Geopolitical, legal, regulatory and ■ The degree of control and level of influence
■ Our ability to adapt to changing business compliance environment in the joint ventures where Nokia is the
models, technological changes and to meet ■ Direct and indirect regulation and political minority partner and other affiliated
new competition; developments regulating trade, taxes, companies where Nokia does not have
national security, competition law, export direct management control or which are
■ Investing in new competitive high-quality controls and sanctions, cyber security, not fully integrated into its operational
products, services, upgrades and sustainability reporting and anti-corruption; infrastructure; and
technologies that achieve or retain
a broad market acceptance; ■ Changes in regulations or in their ■ Natural or man-made disasters, military
application applicable to current or new actions, wars, labor unrest, civil unrest or
■ Our success in the development of technologies or products; health crises impacting our service delivery
new technologies, their rollout and or production sites or the production sites
commercialization and bringing them ■ Emerging new regulation applicable to of our suppliers, which are geographically
to market in a timely manner; current or new technologies or products; concentrated.
Set forth below is a description Risks related to our strategy and its Surrounding economic, financial and
■ Our ability to retain, develop, reskill and ■ Our products, services and operations
execution competitive environment Financial and taxes related uncertainties
of risk factors that could affect ■ Our ability to become and remain as a ■ General economic and financial market
recruit appropriately skilled employees in meeting all relevant quality, health, safety ■ Complex tax laws and rules, including any
the right activities and locations; or security standards and other
our business. Shareholders leading provider of technology, software conditions and other developments in the
recommendations and regulatory
changes in the aforesaid, as well as diverse
and services in the industries and markets economies and industries where we, our tax authority practices and interpretations;
and potential investors should in which we operate; customers and partners/suppliers operate;
■ Our capabilities to manage end-to-end requirements globally;
costs related to our portfolio of products ■ Our ability to utilize our tax attributes and
carefully review the following and services; ■ Compliance with laws and regulations
■ Trends, such as cloudification, open RAN/ ■ Duration of the COVID-19 outbreak, deferred tax assets;
risk factors, in addition to other openness, virtualization and disaggregation disruptiveness of the related measures ■ Adjusting our cost base by achieving
relating to privacy, data protection, and the
protection or transfer of personal data; and ■ Access to sources of funding on favorable
information contained in this with potential impact on our portfolio to contain the virus and other prolonged savings to offset increased investments in terms or at all;
of products and services, competitive impacts of the pandemic; ■ Our ability to maintain an effective system
report. The risk factors described landscape, business models and our
R&D and future capabilities, including 5G,
cloud and digitalization, including ability of governance and compliance processes, ■ Our ability to re-establish investment grade
below should not be construed margin profile; ■ The cyclical nature of the markets in which
to manage the inflationary pressures disclosure controls and internal control rating or maintain our credit ratings;
we operate, competitor behavior, customer
as exhaustive. There may be ■ The degree our investments, including consolidation, customer purchase and
regarding salary and other costs; and over financial reporting.
■ Exchange rate fluctuations impacting our
additional risks that are unknown venture funds, result in technologies, spending behavior, deployments and ■ Identifying and implementing the Business operations net sales, costs and results of operations,
products or services that achieve or retain rollout timing; appropriate measures to improve ■ Our manufacturing, service creation, as well as the US dollar value of our
to us and other risks currently broad or timely market acceptance, answer cost-efficiency or to maintain achieved delivery, logistics or supply chain to dividends and market price of our ADSs;
believed to be immaterial that to the expanding needs or preferences ■ Accelerating inflation and our ability to pass
efficiency levels. operate without significant interruptions or
increased costs to our customers; ■ Pension and post-employment cost-related
could turn out to be material. of our customers or consumers, or in break-
Intellectual property rights,
shortages, including the impacts of current
risks and our ability to avoid or control costs
through innovations, research assets, ■ Price erosion largely driven by competition global semiconductor components
These risks, either individually or collectively, digitalization and intellectual property that technology and brand licensing shortage constraint on our deliveries and resulting from a need for increased funding;
challenging the connectivity business
could adversely affect our business, we could otherwise utilize for value creation; ■ Our ability to create new relevant the overall disruptance and continuing and
models of our customers;
competitiveness, market share, sales, costs, technologies, products and services uncertainty in the global supply chain;
■ Our success in continuing to improve our ■ Recoverability of the carrying amount of our
expenses, results of operations, profitability, ■ Our dependency on a limited number through our R&D, as well as our ability to
operations and efficiencies through the ■ Performance capabilities of our partners goodwill, which could result in significant
financial condition, liquidity, reputation, brand of customers and large multi-year protect our innovations and to maintain
new operating model; and suppliers and their high standards to impairment charges.
and share price. Unless otherwise indicated or agreements; the relative strength of our intellectual
the context otherwise requires, references in property portfolio; meet product quality, health, safety or Ownership of our shares
■ Our ability and success in acquiring or ■ Competitiveness of or developments
these risk factors to “Nokia”, the “Nokia security requirements or comply with ■ The amount of dividend and/or repayment
divesting businesses and technologies, regarding pricing and agreement terms we ■ Our ability to protect and monetize our
Group”, “Group”, “we”, “us” and “our” mean other regulations or local laws, such as of capital and other profit distributions
in integrating acquisitions, entering into offer, including developments with respect intellectual property e.g. due to market,
Nokia’s consolidated operating segments. environmental or labor laws; such as share buybacks to shareholders
licensing arrangements, and in forming to customer financing or extended regulatory and other developments, or
Certain risks or events may be more prevalent and managing joint ventures or ■ Inefficiencies, breaches, malfunctions or for each financial period is uncertain;
payment terms or credit lines that we court rulings in intellectual property-related
with respect to the Group or a certain partnerships; and provide our customers; and litigation and other disputes; disruptions of our information technology ■ Volatility of the trading price of our shares
business group, business or part of the Group. systems and processes or disruptions of and ADSs, including as a result of factors
■ Our ability to meet our sustainability ■ Willingness of banks or other institutions ■ Uncertainty relating to the evolving global
In evaluating the risks, one should not rely services relying on our or third-party IT; outside our control; and
targets, including with respect to our to purchase our receivables. regulatory and standardization landscape
exclusively on the bullets in the below greenhouse gas emission commitments, relating to intellectual property; ■ Actual or perceived security or privacy ■ Non-Finnish shareholders are likely required
summary but read the full risk factor and to comply with stakeholder breaches, as well as defects, errors or to provide detailed information to obtain
discussion. This report also contains expectations regarding sustainability ■ Developments in the concentrated vulnerabilities in our technology and advantageous withholding tax treatment
forward-looking statements that involve activities and disclosures. smartphone market, the source of that of third-party providers; for dividends.
risks and uncertainties presented in a significant portion of our patent
“Forward-looking statements” above. licensing income; ■ Damage caused to existing undersea
infrastructure during installation
Cost and performance remain the top ■ Success and profitability of technology or maintenance of undersea
priorities for our customers. Our capability licensing, brand licensing and other telecommunications cable networks;
to compete in the top-two-vendors field, business ventures, including venture fund
as a trusted partner for critical networks, is investments where the valuation and
dependent on multiple external and internal proceeds of our venture fund investments
factors, partially outside our control, including may fluctuate;
such as:
■ Claims that we have allegedly infringed
third parties’ IPR; and
■ Our ability to renew or finalize licenses
regarding technologies that are licensed
to us on acceptable commercial terms.

Board review
Significant subsequent events Key ratios
Significant Key ratios

subsequent events
Capital commitment Share buyback program Key ratios
In January 2022, we agreed on capital commitment of On 3 February 2022, we announced that its Board of Earnings per share (basic)
USD 400 million to NGP Capital’s Fund V. The fund’s Directors is initiating a share buyback program under Profit/(loss) attributable to equity holders of the parent
emphasis on companies developing emerging 5G use the current authorization from the AGM to repurchase Weighted average number of shares outstanding
cases for industrial and business transformation aligns shares. The program targets to return up to
closely with Nokia’s technology leadership vision and EUR 600 million of cash to shareholders in tranches Earnings per share (diluted)
its efforts to maximize the value shift towards cloud. over a period of two years, subject to continued Profit/(loss) attributable to equity holders of the parent adjusted for the effect of dilution
Per industry standard practice, the capital will be called authorization from the Annual General Meeting. Nokia Adjusted weighted average number of shares
throughout the 10 year lifecycle of the fund. launched the first phase of the program on 11 February P/E ratio
2022 with repurchases starting on 14 February 2022. Closing share price as of 31 December
For more details about the share buyback program and Earnings per share (basic) for continuing operations
how Nokia plans to distribute funds to its shareholders,
refer to Note 19, Equity. Payout ratio
Proposed dividend per share
Earnings per share (basic) for continuing operations
Dividend yield %
Proposed dividend per share
Closing share price as of 31 December
Shareholders’ equity per share
Capital and reserves attributable to equity holders of the parent
Number of shares as of 31 December – number of treasury shares as of 31 December
Market capitalization
(Number of shares as of 31 December – number of treasury shares as of 31 December) x closing share price as of 31 December
Share turnover %
Number of shares traded during the year
Average number of shares during the year

Board review
Alternative performance measures
Alternative
Equity ratio %
Definition
Equity ratio % is defined as Total capital and reserves attributable to equity holders of the parent + non-controlling interests / Total assets.
Purpose
performance
Equity ratio indicates the proportion of assets financed by the capital provided by the equity holders of the parent to total assets of Nokia.
Composition of equity ratio %:
EURm 2021 2020 2019
measures
Total capital and reserves attributable to the equity holders of the parent 17 360 12 465 15 325
Non-controlling interests 102 80 76
Shareholders’ equity 17 462 12 545 15 401
Total assets 40 049 36 191 39 128
Equity ratio % 43.60% 34.66% 39.36%
Total cash and current financial investments

Definition
Certain financial measures presented in this report are not measures of financial performance, financial position or cash flows defined in IFRS. Total cash and current financial investments consist of cash and cash equivalents and current financial investments.
As these measures are not defined in IFRS, they may not be directly comparable with financial measures used by other companies, including Purpose
those in the same industry. The primary rationale for presenting these measures is that the management uses these measures in assessing Total cash and current financial investments is used to indicate funds available to Nokia to run its current and invest in future business activities
the financial performance of Nokia and believes that these measures provide meaningful supplemental information on the underlying business as well as provide return for security holders.
performance of the Nokia. These financial measures should not be considered in isolation from, or as a substitute for, financial information
presented in compliance with IFRS. Composition of total cash and current financial investments:
Return on capital employed % EURm 2021 2020 2019

Definition Cash and cash equivalents 6 691 6 940 5 910
Return on capital employed is defined as Profit before tax + Interest expense on interest-bearing liabilities / Average capital and reserves Current financial investments 2 577 1 121 97
attributable to equity holders of the parent + average non-controlling interests + average interest-bearing liabilities.
Total cash and current financial investments 9 268 8 061 6 007
Purpose
Return on capital employed indicates how efficiently Nokia uses its capital to generate profits. Net cash and current financial investments
Definition
Composition of return on capital employed %:
Net cash and current financial investments equals total cash and current financial investments less long-term and short-term interest-bearing
liabilities.
EURm 2021 2020 2019
Profit before tax 1 926 743 156 Purpose
Interest expense on interest-bearing liabilities 113 127 99 Net cash and current financial investments is used to indicate Nokia’s liquidity position after cash required to settle the interest-bearing liabilities.
Total 2 039 870 255 Composition of net cash and current financial investments:
Average capital and reserves attributable to equity holders of the parent(1) 14 913 13 895 15 307
Average non-controlling interests(1) 91 78 79 EURm 2021 2020 2019
Average interest-bearing liabilities(1) 5 115 4 927 4 049 Total cash and current financial investments
Total capital employed 20 119 18 900 19 435 Cash and cash equivalents 6 691 6 940 5 910
Return on capital employed % 10.13% 4.60% 1.31% Current financial investments 2 577 1 121 97
Interest-bearing liabilities
(1) Calculated as the average of opening and closing balance for the year as presented in the consolidated statement of financial position.
Long-term interest-bearing liabilities (4 537) (5 015) (3 985)
Return on shareholders’ equity % Short-term interest-bearing liabilities (116) (561) (292)
Definition Net cash and current financial investments 4 615 2 485 1 730
Return on shareholders’ equity is defined as Profit/(loss) for the year attributable to equity holders of the parent / Average capital and reserves
attributable to equity holders of the parent.
Purpose
Return on shareholders’ equity indicates how efficiently Nokia uses the capital invested by its shareholders to generate profits
Composition of return on shareholders’ equity %:
EURm 2021 2020 2019
Profit/(loss) for the year attributable to equity holders of the parent 1 623 (2 523) 7
Average capital and reserves attributable to equity holders of the parent(1) 14 913 13 895 15 307
Return on shareholders’ equity % 10.88% (18.16)% 0.05%
(1) Calculated as the average of opening and closing balance for the year as presented in the consolidated statement of financial position.

Board review
Alternative performance measures
continued
Net debt to equity (gearing) % Comparable operating profit

Definition Definition
Net debt to equity (gearing) % is defined as Long-term and short-term interest-bearing liabilities less total cash and current financial Comparable operating profit excludes intangible asset amortization and other purchase price fair value adjustments, goodwill impairments,
investments / (Total capital and reserves attributable to the equity holders of the parent + Non-controlling interests). restructuring related charges and certain other items affecting comparability.
Purpose Purpose
Net debt to equity ratio presents the relative proportion of shareholders’ equity and interest-bearing liabilities used to finance Nokia’s assets We believe that our comparable operating profit provides meaningful supplemental information to both management and investors regarding
and indicates the leverage of Nokia’s business. Nokia’s underlying business performance by excluding certain items of income and expenses that may not be indicative of Nokia’s business
operating results. Comparable operating profit is used also in determining management remuneration.
Composition of net debt to equity (gearing) %:
Composition of comparable operating profit:
EURm 2021 2020 2019
Interest-bearing liabilities EURm 2021 2020 2019
Long-term interest-bearing liabilities 4 537 5 015 3 985 Operating profit 2 158 885 485
Short-term interest-bearing liabilities 116 561 292 Amortization of acquired intangible assets 391 407 924
Total cash and current financial investments Restructuring and associated charges 263 651 502
Cash and cash equivalents (6 691) (6 940) (5 910) Settlement of legal disputes (80) – –
Current financial investments (2 577) (1 121) (97) Gain on sale of fixed assets (53) – –
Net debt (4 615) (2 485) (1 730) Impairment and write-off of assets, net of reversals 45 241 29
Total capital and reserves attributable to the equity holders of the parent 17 360 12 465 15 325 Change in provisions related to past acquisitions 26 – –
Non-controlling interests 102 80 76 Fair value changes of legacy IPR fund 23 – –
Shareholders’ equity 17 462 12 545 15 401 Gain on defined benefit plan amendment – (90) (168)
Net debt to equity (gearing) % (26.43)% (19.81)% (11.23)% Transaction and related costs, including integration costs – (11) 48
Product portfolio strategy costs – – 163
Free cash flow Operating model integration – – 12
Definition Other 2 (2) 8
Free cash flow is defined as Net cash from operating activities – purchases of property, plant and equipment and intangible assets (capital Comparable operating profit 2 775 2 081 2 003
expenditures) + proceeds from sale of property, plant and equipment and intangible assets – purchase of non-current financial investments
+ proceeds from sale of non-current financial investments.
Purpose
Free cash flow is the cash that Nokia generates after net investments to tangible, intangible and non-current financial investments and it
represents the cash available for distribution among its security holders. It is a measure of cash generation, working capital efficiency and capital
discipline of the business.
Composition of free cash flow:
EURm 2021 2020 2019

Net cash from operating activities 2 625 1 759 390
Net capital expenditures
Purchases of property, plant and equipment and intangible assets (capital expenditures) (560) (479) (690)
Proceeds from sale of property, plant and equipment and intangible assets 103 13 39
Purchase of non-current financial investments (77) (59) (180)
Proceeds from sale of non-current financial investments 277 122 144
Free cash flow 2 368 1 356 (297)
Capital expenditure
Definition
Purchases of property, plant and equipment and intangible assets (excluding assets acquired under business combinations).
Purpose
Capital expenditure is used to describe investments in profit-generating activities in the future.
Composition of capital expenditure:
EURm 2021 2020 2019

Purchases of property, plant and equipment and intangible assets (560) (479) (690)
Capital expenditure (560) (479) (690)

Financial statements
Financial
Consolidated financial statements 126
Consolidated income statement 126
Consolidated statement of comprehensive income 127
Consolidated statement of financial position 128
statements
Consolidated statement of cash flows 129
Consolidated statement of changes in shareholders’ equity 130
Notes to consolidated financial statements 131

1. Corporate information 131
2. Significant accounting policies 131
3. New and amended standards and interpretations 143
4. Use of estimates and critical accounting judgments 143
5. Segment information 144
6. Revenue recognition 148
7. Expenses by nature 149
8. Personnel expenses 149
9. Other operating income and expenses 150
10. Financial income and expenses 150
11. Income taxes 151
12. Earnings per share 153
13. Goodwill and intangible assets 154
14. Property, plant and equipment 155
15. Leases 156
16. Impairment 157
17. Inventories 158
18. Other receivables 158
19. Equity 159
20. Other comprehensive income 162
21. Interest-bearing liabilities 162
22. Fair value of financial instruments 164
23. Derivative financial instruments 166
24. Share-based payments 167
25. Pensions and other post-employment benefits 169
26. Deferred revenue and other liabilities 175
27. Provisions 176
28. Commitments, contingencies and legal proceedings 177
29. Notes to the consolidated statement of cash flows 178
30. Group companies 179
31. Significant partly-owned subsidiaries 184
32. Investments in associated companies and joint ventures 184
33. Related party transactions 185
34. Financial risk management 186
35. Subsequent events 193
Parent Company financial statements 194

Parent Company income statement 194
Parent Company statement of financial position 195
Parent Company statement of cash flows 197
Notes to the Parent Company financial statements 198

1. Accounting principles 198
2. Personnel expenses 201
3. Auditor’s fees 201
4. Other operating income and expenses 201
5. Financial income and expenses 202
6. Group contributions 202
7. Income taxes 202
8. Tangible assets 203
9. Investments 204
10. Prepaid expenses and accrued income 204
11. Shareholders’ equity 204
12. Distributable earnings 205
13. Fair value and other reserves 205
14. Fair value of financial instruments 206
15. Derivative financial instruments 208
16. Provisions 209
17. Interest-bearing liabilities 209
18. Accrued expenses and other liabilities 210
19. Commitments and contingencies 210
20. Loans granted to the management of the company 210
21. Notes to the statement of cash flows 210
22. Nokia companies 210
23. The shares of the Parent Company 210
24. Financial risk management 210
25. Subsequent events 210
Signing of the Annual Accounts and the

Review of the Board of Directors 2021 211
Auditor’s report 212
Auditor’s ESEF assurance report 215

Consolidated income statement Consolidated statement of comprehensive income
2021 2020 2019 2021 2020 2019

For the year ended 31 December Notes EURm EURm EURm For the year ended 31 December Notes EURm EURm EURm
Net sales 5, 6 22 202 21 852 23 315 Profit/(loss) for the year 1 645 (2 516) 11
Cost of sales 7 (13 368) (13 659) (15 051) Other comprehensive income
Gross profit 8 834 8 193 8 264 Items that will not be reclassified to profit or loss
Research and development expenses 7 (4 214) (4 087) (4 532) Remeasurements of defined benefit plans 3 040 624 414
Selling, general and administrative expenses 7 (2 792) (2 898) (3 219) Income tax related to items that will not be reclassified to profit or loss (755) (140) (95)
Other operating income(1) 9 443 126 173 Items that may be reclassified subsequently to profit or loss
Other operating expenses(1) 7, 9 (113) (449) (201) Translation differences 1 153 (1 232) 260
Operating profit 2 158 885 485 Net investment hedges (249) 266 (58)
Share of results of associated companies and joint ventures 32 9 22 12 Cash flow and other hedges – 15 (2)
Financial income(1) 10 43 165 169 Financial assets at fair value through other comprehensive income 7 47 8
Financial expenses(1) 10 (284) (329) (510) Other increase, net – 3 –
Profit before tax 1 926 743 156 Income tax related to items that may be reclassified subsequently to
Income tax expense 11 (272) (3 256) (138) profit or loss 2 25 11
Profit/(loss) for the year from continuing operations 1 654 (2 513) 18 Other comprehensive income/(loss), net of tax 20 3 198 (392) 538
Loss for the year from discontinued operations (9) (3) (7) Total comprehensive income/(loss) for the year 4 843 (2 908) 549
Profit/(loss) for the year 1 645 (2 516) 11 Attributable to:
Attributable to: Equity holders of the parent 4 814 (2 914) 545
Equity holders of the parent 1 623 (2 523) 7 Non-controlling interests 29 6 4
Non-controlling interests 22 7 4
The notes are an integral part of these consolidated financial statements.
Earnings per share attributable to equity holders of the parent 12 EUR EUR EUR
Basic
Diluted
(1) In 2021 Nokia changed the presentation of certain items within other operating income and expenses and financial income and expenses. The comparative amounts for 2020 and 2019 have
been recast accordingly. For more information, refer to Note 2, Significant accounting policies.
126 146 NOKIA IN 2021 NOKIA IN 2021 147 127

Consolidated statement of financial position Consolidated statement of cash flows
2021 2020 2021 2020 2019

As of 31 December Notes EURm EURm For the year ended 31 December Notes EURm EURm EURm
ASSETS Cash flow from operating activities

Non-current assets Profit/(loss) for the year 1 645 (2 516) 11
Goodwill and intangible assets 13, 16 7 051 7 027 Adjustments, total 29 1 713 5 267 2 627
Property, plant and equipment 14, 16 1 924 1 783 Change in net working capital(1)
Right-of-use assets 15, 16 884 805 Decrease/(Increase) in receivables 239 (418) 159
Investments in associated companies and joint ventures 16, 32 243 233 (Increase)/Decrease in inventories (48) 553 285
Non-current financial investments 22 758 745 Decrease in non-interest-bearing liabilities (459) (845) (2 232)
Deferred tax assets 11 1 272 1 822 Cash from operations 3 090 2 041 850
Other non-current financial assets 22, 34 325 306 Interest received 41 33 57
Defined benefit pension assets 25 7 740 5 038 Interest paid 15, 21 (192) (35) (1)
Other non-current receivables 18 255 217 Income taxes paid, net (314) (280) (516)
Total non-current assets 20 452 17 976 Net cash from operating activities 2 625 1 759 390
Current assets Cash flow from investing activities
Inventories 17 2 392 2 242 Purchase of property, plant and equipment and intangible assets (560) (479) (690)
Trade receivables 22, 34 5 382 5 503 Proceeds from sale of property, plant and equipment and intangible assets 103 13 39
Contract assets 6, 34 1 146 1 080 Acquisition of businesses, net of cash acquired (33) (104) –
Other current receivables 18 859 850 Proceeds from disposal of businesses, net of disposed cash – 11 19
Current income tax assets 11 214 265 Purchase of current financial investments (1 845) (1 154) (473)
Other current financial assets 22, 23, 34 336 214 Proceeds from maturities and sale of current financial investments 398 123 991
Current financial investments 22, 34 2 577 1 121 Purchase of non-current financial investments (77) (59) (180)
Cash and cash equivalents 22, 34 6 691 6 940 Proceeds from sale of non-current financial investments 277 122 144
Total current assets 19 597 18 215 Foreign exchange hedging of cash and cash equivalents(2) (77) 79 (123)
Total assets 40 049 36 191 Other 19 10 (17)
SHAREHOLDERS’ EQUITY AND LIABILITIES Net cash used in investing activities (1 795) (1 438) (290)
Capital and reserves attributable to equity holders of the parent Cash flow from financing activities
Share capital 246 246 Purchase of equity instruments of subsidiaries – (1) (1)
Share premium 454 443 Proceeds from long-term borrowings 21 17 1 595 1 039
Treasury shares (352) (352) Repayment of long-term borrowings 21 (927) (246) (766)
Translation differences (396) (1 295) (Repayment of)/proceeds from short-term borrowings 21 (67) (83) 40
Fair value and other reserves 4 219 1 910 Payment of principal portion of lease liabilities 15, 21 (226) (234) (221)
Reserve for invested unrestricted equity 15 726 15 656 Dividends paid (9) (148) (570)
Accumulated deficit (2 537) (4 143) Net cash (used in)/from financing activities (1 212) 883 (479)
Total capital and reserves attributable to equity holders of the parent 17 360 12 465 Translation differences(2) 133 (174) 28
Non-controlling interests 102 80 Net (decrease)/increase in cash and cash equivalents (249) 1 030 (351)
Total equity 19 17 462 12 545 Cash and cash equivalents as of 1 January 6 940 5 910 6 261
Non-current liabilities Cash and cash equivalents as of 31 December 6 691 6 940 5 910
Long-term interest-bearing liabilities 21, 22, 34 4 537 5 015 (1) Net working capital includes both short-term and long-term items.
Long-term lease liabilities 21 824 721 (2) In 2021, Nokia changed the presentation of the cash flows relating to foreign exchange hedging of cash and cash equivalents from translation differences to cash flow from investing
activities. The comparative amounts for 2020 and 2019 have been reclassified accordingly. Refer to Note 2, Significant accounting policies.
Deferred tax liabilities 11 282 260
Defined benefit pension and post-employment liabilities 25 3 408 4 046 The items in the consolidated statement of cash flows do not directly correspond to the changes in the respective items in the consolidated
Contract liabilities 6 354 566 statement of financial position due to several reasons such as presentation not on accrual basis in the consolidated statement of cash flows, the
Deferred revenue and other non-current liabilities 22, 26 436 541 effects of foreign exchange differences arising on consolidation and changes in the consolidation scope. The consolidated statement of cash flows
Provisions 27 645 736 combines cash flows from both the continuing and the discontinued operations.
Total non-current liabilities 10 486 11 885
Current liabilities
Short-term interest-bearing liabilities 21, 22, 34 116 561
Short-term lease liabilities 21 185 189
Other financial liabilities 22, 23, 34 762 738
Current income tax liabilities 11 202 188
Trade payables 22, 34 3 679 3 174
Contract liabilities 6 2 293 2 394
Deferred revenue and other current liabilities 22, 26 3 940 3 721
Provisions 27 924 796
Total current liabilities 12 101 11 761
Total liabilities 22 587 23 646
Total shareholders’ equity and liabilities 40 049 36 191
128 148 NOKIA IN 2021 NOKIA IN 2021 149 129

Consolidated statement of changes in shareholders’ equity Notes to consolidated financial statements
Reserve for Attributable In respect of the consolidated statement of cash flows, Nokia
Fair value invested to equity Non- 1. Corporate information reclassified the results of foreign exchange hedging of cash and cash
Share Share Treasury Translation and other unrestricted Accumulated holders of controlling Total
EURm Notes capital premium shares differences reserves equity deficit the parent interests equity Nokia Corporation, a public limited liability company incorporated and flows that were previously presented in translation differences to the
As of 1 January 2019 246 436 (408) (592) 1 063 15 606 (1 058) 15 293 82 15 375 domiciled in Helsinki, Finland, is the parent company (Parent Company cash flow from investing activities. The comparative amounts for 2020
Profit for the year 7 7 4 11 or Parent) for all its subsidiaries (Nokia or the Group). Nokia is a global and 2019 have been reclassified accordingly. Related to 2020, as a
provider of mobile, fixed and cloud network solutions combining result of the reclassification, the net cash used in investing activities
Other comprehensive income 19, 20 220 319 (1) 538 538
hardware, software and services, as well as licensing of intellectual decreased by EUR 79 million and translation differences changed
Total comprehensive income property, including patents, technologies and the Nokia brand. Nokia’s
for the year – – – 220 319 – 6 545 4 549 by EUR -79 million compared to the previously reported amounts.
operational headquarters are located in Espoo, Finland. The shares of Related to 2019, as a result of the reclassification, the net cash used
Share-based payments 81 81 81 Nokia Corporation are listed on the Nasdaq Helsinki Stock Exchange, in investing activities increased by EUR 123 million and translation
Excess tax benefit on share- the New York Stock Exchange and the Euronext Paris Stock Exchange. differences changed by EUR 123 million compared to the previously
based payments (7) (7) (7) reported amounts.
Settlement of share-based These consolidated financial statements for the year ended
31 December 2021 were authorized for issuance and filing In 2020, Nokia reviewed the presentation of income and expenses
payments (83) 56 1 (26) (26)
by the Board of Directors on 3 March 2022. related to its restructuring plans, pension plan curtailments and
Dividends 19 (560) (560) (10) (570)
amendments as well as certain asset impairments. As a result,
Other movements (1) (1) (1) 2. Significant accounting policies Nokia reclassified the restructuring and associated charges, pension
Total transactions with owners – (9) 56 – – 1 (561) (513) (10) (523)
Basis of presentation and statement of compliance curtailment and plan amendment income and expenses as well as
As of 31 December 2019 246 427 (352) (372) 1 382 15 607 (1 613) 15 325 76 15 401 certain impairment charges that were previously presented in other
The consolidated financial statements are prepared in accordance
Loss for the year (2 523) (2 523) 7 (2 516) operating income and expenses to the functional line items to enhance
with International Financial Reporting Standards (IFRS) as issued by
Other comprehensive loss 19, 20 (922) 528 3 (391) (1) (392) the relevance of information provided in its consolidated income
the International Accounting Standards Board (IASB) and as adopted
Total comprehensive loss by the European Union (EU). The consolidated financial statements are statement. The comparative amounts for 2019 were reclassified
for the year – – – (922) 528 – (2 520) (2 914) 6 (2 908) accordingly. As a result, cost of sales increased by EUR 62 million,
presented in millions of euros (EURm), except as otherwise noted, and
Share-based payments 76 76 76 research and development expenses increased by EUR 121 million,
are prepared under the historical cost convention, except as disclosed
Excess tax benefit on in the accounting policies below. The notes to the consolidated selling, general and administrative expenses increased by EUR 118 million,
share-based payments 2 2 2 other operating income decreased by EUR 187 million and other
financial statements also conform to the Finnish accounting and
operating expenses decreased by EUR 488 million compared to the
Settlement of share-based company legislation.
amounts presented in Nokia’s consolidated financial statements for 2019.
payments (62) 49 (13) (13)
In 2021, Nokia reviewed the presentation of certain items in its
Dividends 19 – (5) (5) consolidated income statement and consolidated statement of cash Other information
Acquisition of non-controlling flows. As a result, Nokia made the following reclassifications to enhance This paragraph is included in connection with statutory reporting
interests (10) (10) (10) the relevance of information provided: requirements in Germany. The fully consolidated German subsidiary,
Investment in subsidiary by Nokia Solutions and Networks GmbH & Co. KG, registered in the
non-controlling interest – 2 2 In respect of the consolidated income statement, Nokia reclassified commercial register of Munich under HRA 88537, has made use
certain items between other operating income and expenses. Gains of the exemption available under § 264b and § 291 of the German
Other movements (1) (1) 1 –
and losses from unlisted venture funds that were previously presented Commercial Code (HGB).
Total transactions with owners – 16 – (1) – 49 (10) 54 (2) 52
as other operating income and other operating expenses, respectively,
As of 31 December 2020 246 443 (352) (1 295) 1 910 15 656 (4 143) 12 465 80 12 545 are presented on a net basis as other operating income. Foreign Principles of consolidation
Profit for the year 1 623 1 623 22 1 645 exchange gains and losses on hedging forecasted sales and purchases The consolidated financial statements comprise the financial
Other comprehensive income 19, 20 899 2 309 (17) 3 191 7 3 198 that were previously presented as other operating income and other statements of the Parent Company, and each of those companies
Total comprehensive income operating expenses, respectively, are presented on a net basis as other over which it exercises control. Control over an entity exists when
for the year – – – 899 2 309 – 1 606 4 814 29 4 843 operating expenses. Expected credit losses on trade receivables that Nokia is exposed, or has rights, to variable returns from its involvement
Share-based payments 108 108 108 were presented as other operating income if the amount of expected with the entity and has the ability to affect those returns through its
credit losses decreased and as other operating expenses if the amount power over the entity. When Nokia has less than a majority of voting
Settlement of share-based
of expected credit losses increased, are presented as other operating or similar rights in an entity, it considers all relevant facts and
payments (97) 70 (27) (27)
expenses regardless of the direction of change. The comparative circumstances in assessing whether it has power over an entity,
Dividends 19 – (7) (7)
amounts for 2020 and 2019 have been recast accordingly. In total including the contractual arrangements, and voting rights and potential
Total transactions with owners – 11 – – – 70 – 81 (7) 74 other operating income and other operating expenses decreased by voting rights. Nokia reassesses whether or not it controls an entity
As of 31 December 2021 246 454 (352) (396) 4 219 15 726 (2 537) 17 360 102 17 462 EUR 24 million and EUR 64 million in 2020 and 2019, respectively, if facts and circumstances indicate that there are changes to the
as a result of the reclassifications. elements of control.
Additionally, in respect of the consolidated income statement, Consolidation of a subsidiary begins when Nokia obtains control over
Nokia reclassified certain items between financial income and the subsidiary and ceases when it loses control over the subsidiary.
expenses. Negative interest on financial investments that were Assets, liabilities, income and expenses of a subsidiary acquired or
previously presented as part of interest income on financial disposed of during the year are included in the consolidated financial
investments, are presented as a separate line item in financial statements from the date Nokia gains control until the date Nokia
expenses. The comparative amounts for 2020 and 2019 have been ceases to control the subsidiary. A change in the ownership interest
recast accordingly. Financial income and financial expenses increased of a subsidiary, without a loss of control, is accounted for as an equity
by EUR 9 million and EUR 4 million, in 2020 and 2019, respectively, transaction. If Nokia loses control in a subsidiary, the related assets,
as a result of the reclassifications. liabilities, non-controlling interest and other components of equity
are derecognized with any gain or loss recognized in the consolidated
income statement. Any investment retained in the former subsidiary
is measured at fair value.
All intercompany transactions are eliminated as part of the

consolidation process. Non-controlling interests are presented
separately as a component of net profit or loss and are shown as a
component of shareholders’ equity in the consolidated statement
of financial position.
130 150 NOKIA IN 2021 NOKIA IN 2021 151 131

Notes to consolidated financial statements
continued
Business combinations Non-current assets (or disposal groups) held for sale and Nokia recognizes revenue from contracts with customers to reflect Hardware and software sold by Nokia includes warranty, which can
Business combinations are accounted for using the acquisition method. the transfer of promised goods and services to customers for amounts either be assurance-type for repair of defects and recognized as a
discontinued operations
The consideration transferred in a business combination is measured that reflect the consideration to which Nokia expects to be entitled in centralized warranty provision (refer to Note 27, Provisions), or service-
Non-current assets or disposal groups are classified as assets held
as the aggregate of the fair values of the assets transferred, liabilities exchange for those goods and services. The consideration may include type for scope beyond the repair of defects or for a time period
for sale if their carrying amounts will be recovered principally through a
incurred towards the former owners of the acquired entity or a variable amount, which Nokia estimates based on the most likely beyond the standard assurance-type warranty period and considered
sale transaction rather than through continuing use. For this to be the
business and equity instruments issued. Acquisition-related costs amount. Items causing variability include volume discounts and sales- a separate performance obligation within the context of the contract.
case, the asset, or the disposal group, must be available for immediate
are recognized as expenses in the consolidated income statement based or usage-based royalties. Nokia includes variable consideration Revenue is allocated to each performance obligation based on its
sale in its present condition subject only to terms that are usual and
in the period in which the costs are incurred and the related services into the transaction price only to the extent that it is highly probable standalone selling price in relation to the overall transaction price. The
customary for sales of such assets or disposal groups, and the sale
are received with the exception of costs directly attributable to the that a significant revenue reversal will not occur. The transaction price standalone selling price of each performance obligation is determined
must be highly probable. These assets, or in the case of disposal
issuance of equity instruments that are accounted for as a deduction also excludes amounts collected on behalf of third parties. by considering factors such as the price of the performance obligation
groups, assets and liabilities, are presented separately in the
from equity. if sold on a standalone basis and the expected cost of the performance
consolidated statement of financial position and measured at the lower Nokia’s payment terms are 80 days on average. Invoices are generally
obligation plus a reasonable margin when price references are not
Identifiable assets acquired and liabilities assumed are measured of the carrying amount and fair value less costs to sell. Non-current issued as control transfers and/or as services are rendered. When this
available. The portion of the transaction price allocated to each
at the acquisition date fair values. Nokia elects whether to measure assets classified as held for sale, or included in a disposal group is not the case, Nokia recognizes a contract asset or a contract liability
performance obligation is then recognized when the revenue
the non-controlling interests in the acquiree at fair value or at the classified as held for sale, are not depreciated or amortized. depending on the timing of payment versus transfer of control. In case
recognition criteria for that performance obligation have been met.
proportionate share of the acquiree’s identifiable net assets on a the timing of payments provides either the customer or Nokia with a
Discontinued operation is reported when a component of Nokia,
business combination by business combination basis. The excess significant benefit of financing, the transaction price is adjusted for the Nokia presents its customer contracts in the consolidated statement
comprising operations and cash flows that can be clearly distinguished
of the aggregate of the consideration transferred and the amount effect of financing and the related interest revenue or interest expense of financial position as either a contract asset or a contract liability,
both operationally and for financial reporting purposes from the rest
recognized for non-controlling interests over the acquisition date fair is presented separately from revenue. As a practical expedient, Nokia depending on the relationship between Nokia’s performance and the
of Nokia, has been disposed of or is classified as held for sale, and that
values of the identifiable net assets acquired is recorded as goodwill. does not account for financing components if, at contract inception, customer’s payment for each individual contract. On a net basis, a
component represents a major line of business or geographical area
the consideration is expected to be received within one year before contract asset position represents where Nokia has performed by
of operations or is part of a single coordinated plan to dispose of a
Investments in associates and joint ventures or after the goods or services have been transferred to the customer. transferring goods or services to a customer before the customer
separate major line of business or geographical area of operations.
An associate is an entity over which Nokia exercises significant has provided the associated consideration or before payment is due.
Profit or loss from discontinued operations is reported separately from Nokia enters into contracts with customers consisting of any
influence. Significant influence is the power to participate in the Conversely, a contract liability position represents where a customer
income and expenses from continuing operations in the consolidated combination of hardware, services and intellectual property. The
financial and operating policy decisions of the entity, but is not control has paid consideration or payment is due, but Nokia has not yet
income statement, with prior periods presented on a comparative associated revenue recognized for such contracts depends on the
or joint control over those policies. transferred goods or services to the customer. Contract assets
basis. Intra-group revenues and expenses between continuing and nature of the underlying goods and services provided. The promised
presented in the consolidated statement of financial position are
A joint venture is a type of joint arrangement whereby the parties that discontinued operations are eliminated. goods or services in the contract might include sale of goods, license
current in nature while contract liabilities can be either current or
have joint control of the arrangement have rights to the net assets of intellectual property and grant of options to purchase additional
Discontinued operations presented in the consolidated income non-current. Invoiced receivables represent unconditional rights to
of the arrangement. Joint control is the contractually agreed sharing goods or services that may provide the customer with a material right.
statement for 2021, 2020 and 2019 comprise the financial results payment and are presented separately as trade receivables in the
of control of an arrangement, which exists only when decisions about Nokia conducts an assessment at contract inception to determine
related to the HERE business and the D&S business. Nokia sold its HERE consolidated statement of financial position.
relevant activities require the unanimous consent of the parties which promised goods and services in a customer contract are distinct
digital mapping and location services business to a German automotive
sharing control. and accordingly identified as performance obligations. Nokia considers Sale of products
industry consortium comprised of AUDI AG, BMW Group and Daimler AG
that goods and services are distinct if the customer can benefit from Nokia manufactures and sells a range of networking equipment,
Nokia’s investments in associates and joint ventures are accounted for in a transaction that was completed on 4 December 2015. Nokia sold
the good or service either on its own or together with other resources covering the requirements of network operators. Revenue for these
using the equity method. Under the equity method, the investment in substantially all of its Devices & Services business to Microsoft in a
readily available, and if Nokia’s promise to transfer the good or service products is recognized when control of the products has transferred,
an associate or joint venture is initially recognized at cost. The carrying transaction that was completed on 25 April 2014. The timing and
is separately identifiable from other promises in the contract. the determination of which may require judgment. Typically, for
amount of the investment is adjusted to recognize changes in Nokia’s amount of financial effects related to these operations are largely
dependent upon external factors such as final outcomes of uncertain standard equipment sales, control transfers upon delivery. For more
share of net assets of the associate or joint venture since the Nokia allocates the transaction price to each distinct performance
tax positions. complex solutions, control generally transfers upon acceptance.
acquisition date. Nokia’s share of profits and losses of associates obligation on the basis of their standalone selling prices, relative to
and joint ventures is included in the consolidated income statement the overall transaction price. If a standalone selling price is not In some arrangements, mainly within the Submarine Networks
outside operating profit or loss. Any change in other comprehensive
Revenue recognition observable, it is estimated. The transaction price may include a business, Nokia’s performance does not create an asset with an
income of associates and joint ventures is presented as part of Nokia’s Nokia accounts for a contract with a customer when the contract has discount or a variable amount of consideration that is generally alternative use and Nokia recognizes revenue over time using the
other comprehensive income. been approved in writing, which is generally when both parties are allocated proportionately to all performance obligations in the contract output method, which faithfully depicts the manner in which the
committed to perform their respective obligations, the rights, including unless Nokia has observable evidence that the entire discount relates asset is transferred to the customer as well as Nokia's enforceable
After application of the equity method, as of each reporting date, payment terms, regarding the goods and services to be transferred can to only one or more, but not all, performance obligations in a contract. rights to payment for the work completed to date. The output measure
Nokia determines whether there is objective evidence that the be identified, the contract has commercial substance, and collection selected by Nokia for each contract may vary depending on the nature
investment in an associate or joint venture is impaired. If there is such of the consideration to which Nokia expects to be entitled is probable. Revenue is recognized when, or as, Nokia satisfies a performance
of the contract.
evidence, Nokia recognizes an impairment loss that is calculated as the Management considers only legally enforceable rights in evaluating the obligation by transferring a promised good or service to a customer,
difference between the recoverable amount of the associate or joint accounting for contracts with customers. As such, frame agreements which is when the customer obtains control of that good or service. Sale of services
venture and its carrying value. The impairment loss is presented within that do not create legally enforceable rights and obligations are The amount of revenue recognized is the amount allocated to the Nokia provides services related to the provision of networking
share of results of associated companies and joint ventures in the accounted for based on the issuance of subsequent legally binding satisfied performance obligation based on the relative standalone equipment, ranging from managing a customer’s network and product
consolidated income statement. purchase orders under the frame agreements. selling prices. A performance obligation may be satisfied at a point maintenance services to network installation, integration and
in time or over time. optimization. Revenue for each separate service performance
A contract modification or a purchase order is accounted for as a
obligation is recognized as or when the customer obtains the benefits
separate contract if the scope of the contract increases by additional
of Nokia’s performance. Service revenue is recognized over time for
distinct goods or services, and the price of the contract increases by
managed and maintenance services, as in these cases Nokia performs
an amount that reflects the standalone selling price of those additional
throughout a fixed contract term and the customer simultaneously
goods or services. In case the additional goods or services are distinct
receives and consumes the benefits as Nokia performs. In some cases,
but not sold at a standalone selling price, the contract modification is
Nokia performs services that are subject to customer acceptance
accounted for prospectively. In cases where the additional goods or
where revenue is recognized when the customer acceptance is received.
services are not distinct, the modification is accounted for through
a cumulative catch-up adjustment.
132 152 NOKIA IN 2021 NOKIA IN 2021 153 133

continued
Sale of intellectual property licenses For defined benefit plans, including pension and post-employment Share-based payments Deferred tax assets and deferred tax liabilities are offset for
Nokia provides its customers with licenses to intellectual property (IP) healthcare and life insurance, costs are assessed using the projected Nokia offers three types of global equity-settled share-based presentation purposes when there is a legally enforceable right to set
owned by Nokia by granting software licenses and rights to benefit unit credit method: the cost is recognized in the consolidated income compensation plans for employees: performance shares, restricted off current tax assets against current tax liabilities, and the deferred
from Nokia’s IP in their products. When a software license is sold, statement so as to spread the benefit over the service lives of shares and the employee share purchase plan. tax assets and deferred tax liabilities relate to income taxes levied
revenue is recognized upon delivery or acceptance of the software, employees. The defined benefit obligation is measured as the present by the same taxation authority on either the same taxable entity or
value of the estimated future cash outflows using interest rates on Employee services received and the corresponding increase in equity different taxable entities, which intend either to settle current tax
as Nokia has determined that each software release is distinct and the
high-quality corporate bonds or government bonds with maturities are measured by reference to the fair value of the equity instruments liabilities and assets on a net basis, or to realize the assets and settle
license is granted for software as it exists when the control transfers
that most closely match expected payouts of benefits. The defined as of the grant date, excluding the impact of any non-market vesting the liabilities simultaneously in each future period in which significant
to the customer.
benefit plan asset is measured at fair market value as of the reporting conditions. Non-market vesting conditions attached to the performance amounts of deferred tax liabilities or deferred tax assets are expected
When Nokia grants customers a license to use IP owned by Nokia, the date. Assets invested in alternative asset classes such as private equity, shares are included in assumptions about the number of shares that the to be settled or recovered.
associated license fee revenue is recognized in accordance with the real estate and absolute return, are measured using latest available employee will ultimately receive. Nokia reviews the assumptions made
substance of the relevant agreements. In the majority of cases, Nokia valuations provided by the asset managers, reviewed by Nokia, and on a regular basis and, where necessary, revises its estimates of the Nokia periodically evaluates positions taken in tax returns with
retains obligations to continue to develop and make available to the adjusted for subsequent cash flows. The liability or asset recognized number of performance shares that are expected to be settled. Plans respect to situations in which applicable tax regulation is subject to
customer the latest IP in the licensed assets during the contract term, in the consolidated statement of financial position is the present value that apply tranched vesting are accounted for under the graded vesting interpretation. It adjusts the amounts of current and deferred tax
and therefore revenue is recognized pro rata over the period during of the defined benefit obligation as of the reporting date less the fair model. Share-based compensation is recognized as an expense in the assets and liabilities recorded, where it is considered probable,
which Nokia is expected to perform. Recognition of the revenue as value of plan assets including effects of any asset ceiling. consolidated income statement over the relevant service periods. i.e. more likely than not, that certain tax positions may not be fully
pro rata over the term of the license is considered the most faithful sustained upon review by tax authorities. The amounts recorded are
depiction of Nokia’s satisfaction of the performance obligation as Service cost related to employees’ service in the current period as Income taxes based on the most likely amount or the expected value, depending
the IP being licensed towards the customer includes new inventions well as past service cost resulting from plan amendments, curtailments, Income tax expense comprises current tax and deferred tax. Tax is on which method Nokia expects to better predict the resolution of
patented by Nokia that are highly interdependent and interrelated and and gains and losses on settlements are all presented within cost of recognized in the consolidated income statement except to the extent the uncertainty, as of each reporting date.
created through the course of continuous research and development sales, research and development expenses or selling, general and that it relates to items recognized in other comprehensive income,
(R&D) efforts that are relatively stable throughout the year. In some administrative expenses in the consolidated income statement. Past or directly in equity, in which case the related tax is recognized in Foreign currency translation
contracts, Nokia has no remaining obligations to perform after granting service costs are recognized immediately in the consolidated income other comprehensive income or equity, respectively. Functional and presentation currency
a license to the initial IP, and licensing fees are non-refundable. In statement when the plan amendment, curtailment or settlement occurs. The financial statements of all Group companies are measured using
Current taxes are based on the results of the Group companies and
these cases, revenue is recognized at the beginning of the license term. Net interest, consisting of interest calculated by applying a discount functional currency, which is the currency of the primary economic
are calculated using the local tax laws and tax rates that are enacted environment in which the entity operates. The consolidated financial
rate to the net defined benefit liability or asset and the effect of asset
Government grants or substantively enacted as of the reporting date. Corporate taxes
ceiling, as well as pension plan administration costs not taken into statements are presented in euro, the functional and presentation
withheld at the source of the income on behalf of the Group companies
Government grants are recognized when there is reasonable assurance account in determining the return on plan assets, are presented within currency of the Parent Company.
that Nokia will comply with the conditions attached to them and the are accounted for as income taxes when determined to represent a tax
financial income and expenses in the consolidated income statement.
grants will be received. Government grants received as compensation on net income. Transactions in foreign currencies
Remeasurements, comprising actuarial gains and losses, the effect
for expenses or losses incurred are recognized in the consolidated of the asset ceiling and the return on plan assets, excluding amounts Transactions in foreign currencies are recorded at exchange rates
Deferred tax assets and liabilities are determined using the balance
income statement as a deduction against the related expenses except recognized in net interest, are recognized immediately in the prevailing at the dates of the individual transactions. For practical
sheet liability method for all temporary differences arising between the
for certain non-recurring grants that are recognized as other operating consolidated statement of financial position with a corresponding debit reasons, a rate that approximates the actual rate at the date of the
tax bases of assets and liabilities and their carrying amounts in the
income. Government grants related to assets are presented in the or credit to pension remeasurements reserve within shareholders’ transaction is often used. Monetary assets and liabilities denominated
consolidated financial statements. Deferred tax assets are recognized
consolidated statement of financial position as deferred income and equity through other comprehensive income in the period in which in foreign currency are valued at the exchange rates prevailing at the
to the extent it is probable that future taxable profit will be available
recognized as income over the same period the asset is depreciated they occur. Remeasurements are not reclassified to profit or loss in end of the reporting period. Foreign exchange gains and losses arising
against which the unused tax losses, unused tax credits and deductible
or amortized. subsequent periods. from monetary assets and liabilities as well as fair value changes of
temporary differences can be utilized in the relevant jurisdictions.
related hedging instruments are recognized in financial income and
Government grants received in the form of R&D tax credits are Deferred tax assets are assessed for realizability as of each reporting
Actuarial valuations for Nokia’s defined benefit post-employment plans expenses in the consolidated income statement. Unrealized foreign
date. When facts and circumstances indicate it is no longer probable
recognized as a deduction against R&D expenses if the amount of the are performed annually or when a material plan amendment, exchange gains and losses related to non-monetary non-current
that deferred tax assets will be utilized, adjustments are made as
tax credit is linked to the amount of R&D expenditures incurred by curtailment or settlement occurs. financial investments are included in the fair value measurement of
Nokia and the tax credit is a fully collectible asset that will be paid necessary. Deferred tax liabilities are recognized for taxable temporary
these investments and recognized in other operating income and
Termination benefits differences, and for temporary differences that arise between the
in cash by the government in case Nokia is not able to offset it against expenses in the consolidated income statement.
Termination benefits are payable when employment is terminated fair value and the tax base of identifiable net assets acquired in
its income tax payable. R&D tax credits that do not meet both
before the normal retirement date, or whenever an employee accepts business combinations. Foreign Group companies
conditions are recognized as income tax benefit.
voluntary redundancy in exchange for these benefits. Nokia recognizes On consolidation, the assets and liabilities of foreign operations whose
Deferred tax liabilities are not recognized if they arise from the
Employee benefits termination benefits when it is demonstrably committed to either
initial recognition of goodwill. Deferred tax liabilities are provided on functional currency is other than euro are translated into euro at the
Pensions and other post-employment benefits terminating the employment of current employees according to a exchange rates prevailing at the end of the reporting period. The
taxable temporary differences arising from investments in subsidiaries,
Nokia has various post-employment plans in accordance with the local detailed formal plan without possibility of withdrawal, or providing income and expenses of these foreign operations are translated into
associates and joint arrangements, except for deferred tax liability
conditions and practices in the countries in which it operates. The plans termination benefits as a result of an offer made to encourage euro at the average exchange rates for the reporting period. The
where the timing of the reversal of the temporary difference is
are generally funded through payments to insurance companies or voluntary redundancy. These benefits are recorded as termination exchange differences arising from translation for consolidation are
controlled by Nokia, and it is probable that the temporary difference
contributions to trustee-administered funds as determined by periodic benefits as a component of the restructuring provision. Local laws may recognized as translation differences in the consolidated statement
will not reverse in the foreseeable future.
actuarial calculations. provide employees with the right to benefits from the employer upon of comprehensive income. On disposal of a foreign operation the
termination whether the termination is voluntary or involuntary. For Deferred tax assets and deferred tax liabilities are measured using cumulative amount of translation differences relating to that disposal
In a defined contribution plan, Nokia’s legal or constructive obligation these specific benefits, the difference between the value of the higher the enacted or substantively enacted tax rates as of the reporting is reclassified to profit or loss.
is limited to the amount that it agrees to contribute to the fund. benefit for involuntary termination and the lower benefit for voluntary date that are expected to apply in the period when the asset is
Nokia’s contributions to defined contribution plans, multi-employer termination is treated as a termination benefit and the portion of the realized or the liability is settled. Deferred tax assets and liabilities
and insured plans are recognized in the consolidated income statement benefit that Nokia would be required to pay to the employee in the are not discounted.
in the period to which the contributions relate. If a pension plan is case of voluntary termination is treated as a contractual or legal
funded through an insurance contract where Nokia does not retain obligation determined by local law and accounted for as a defined
any legal or constructive obligations, the plan is treated as a defined benefit arrangement as described in the pensions section above.
contribution plan. All arrangements that do not fulfill these conditions
are considered defined benefit plans.
134 154 NOKIA IN 2021 NOKIA IN 2021 155 135

Notes to consolidated financial statements Notes to consolidated financial statements
continued
Sale of intellectual
Intangible assets property licenses Nokia
For appliesbenefit
defined a practical
plans,expedient
includingwhereby
pension leases for which the lease
and post-employment Nokia acts primarily as a lessee in its leasing transactions. However, Inventories
Nokia provides
Intangible assets itsacquired
customers with licenses
separately to intellectual
are measured property (IP)
on initial term is 12 months
healthcare or less at the
and life insurance, lease
costs arecommencement
assessed using the dateprojected
(short- Nokia will enter into contracts to sublease vacant leasehold or freehold Inventories are stated at the lower of cost and net realizable value.
owned by Nokia
recognition by granting
at cost. The costsoftware licenses
of intangible assets andacquired
rights toinbenefit
a termcredit
unit leases) are notthe
method: recognized in its consolidated
cost is recognized statement of
in the consolidated income properties for sublease terms up to 10 years to offset or mitigate the Cost is determined using standard cost, which approximates actual
from Nokia’s
business IP in theirisproducts.
combination their fair When
value aassoftware
of the date license is sold,
of acquisition. financial position.
statement so as toInstead,
spread Nokia recognizes
the benefit over thethe service
lease payments
lives of unavoidable costs associated with those properties. In these cases, cost on a first-in first-out (FIFO) basis. Net realizable value is the
revenue
Internallyisgenerated
recognizedintangibles,
upon delivery or acceptance
except for development of the costs
software,
that associated with
employees. The short-term leases
defined benefit as an operating
obligation expense
is measured on present
as the a Nokia classifies each sublease as a finance lease whenever the sublease amount that can be realized from the sale of the inventory in the
as
may Nokia has determined
be capitalized, that eachassoftware
are expensed incurred.release is distinct
Development andare
costs the straight-line
value basis over future
of the estimated the lease
cash term. In addition,
outflows as a practical
using interest rates on contract transfers substantially all the risks and rewards incidental normal course of business after allowing for the costs of realization.
license is granted
capitalized for software
only if Nokia has theas it existsfeasibility
technical when the to control transfers
complete the expedient, Nokia
high-quality does not
corporate bondsseparate certain non-lease
or government bonds with components
maturities to ownership to the subtenant. All other subleases are classified as In addition to the cost of materials and direct labor, an appropriate
to the has
asset; customer.
an ability and intention to use or sell the asset; can frommost
that leaseclosely
components
match but instead
expected accounts
payouts for each lease
of benefits. The defined operating leases. proportion of production overhead is included in the cost of inventory.
demonstrate that the asset will generate future economic benefits; component
benefit plan and
asset associated
is measured specified
at fairnon-lease
market value component
as of theas a single
reporting An allowance is recorded for excess inventory and obsolescence based
When Nokia grants customers a license to use IP owned by Nokia, the Included within other financial assets in its consolidated statement
has resources available to complete the asset; and has the ability lease Assets
date. component. Non-lease
invested components
in alternative such assuch
asset classes payments for equity,
as private on the lower of cost and net realizable value.
associated license fee revenue is recognized in accordance with the of financial position, Nokia recognizes a net investment asset for all
to measure reliably the expenditure during development. maintenance
real estate and and servicesreturn,
absolute made arein conjunction
measured usingwith the leased
latest asset
available
substance of the relevant agreements. In the majority of cases, Nokia are included
valuations in the lease
provided by theliability
assetwhenever
managers,these payments
reviewed are fixed
by Nokia, and finance subleases based on the present value of future sublease Nokia classifies its inventories to raw materials and semi-finished
retains
The usefulobligations to continue
life of Nokia’s to develop
intangible assets, and other make
thanavailable
goodwill,toisthe finite. payments at the sublease commencement date. After the goods, finished goods, and contract work in progress. Raw materials
and defined
adjusted for in the lease contract.
subsequent cash flows. Other
The payments
liability or for non-lease
asset recognized
customer the latest
Following initial IP in thefinite
recognition, licensed assets assets
intangible during are the carried
contract atterm,
cost commencement date, the net investment asset is measured on an and semi-finished goods include purchased materials, components
components
in that are
the consolidated variable based
statement on consumption,
of financial position is theeg.present
propertyvalue
and
less therefore
accumulated revenue is recognized
amortization pro rata over
and accumulated the periodlosses.
impairment during taxes,
of the insurance payments
defined benefit and variable
obligation property
as of the service
reporting datecosts,
less the fair amortized cost basis using the effective interest method where the net and supplies to be used in production. Finished goods include goods
which Nokia
Intangible is expected
assets to perform.
are amortized overRecognition
their useful of thegenerally
lives, revenue three
as investment asset increases related to the accretion of interest income manufactured by Nokia or by subcontractors that are ready for sale
are recognized
value as anincluding
of plan assets expense effects
when incurred.
of any asset ceiling.
pro rata
to ten over using
years, the term of the licensemethod,
the straight-line is consideredwhich the most faithful
is considered to and decreases for sublease payments received. Sublease payments and goods purchased for resale. Contract work in progress includes
depiction
best reflect of the
Nokia’s
pattern satisfaction
in which of thethe performance
asset’s obligation
future economic as
benefits The majority
Service of Nokia’s
cost related leased assets
to employees’ relateinto
service commercial
the and as
current period received from operating subleases is recognized as other operating costs incurred to date for customer contracts where the contractual
the IP being licensed
are expected towards the
to be consumed. customeron
Depending includes
the naturenew of inventions
the industrial
well as pastproperties
service cost suchresulting
as R&D fromfacilities,
planproduction
amendments, facilities and
curtailments, income on a straight-line basis over the lease term. performance obligations are not yet satisfied. Contract work in
patented
intangibleby Nokia
asset, the that are highly interdependent
amortization charges are presented and interrelated
within cost and office
and buildings.
gains and lossesNokiaon also leases vehicles
settlements are allprovided
presented as within
employeecost of progress will be recognized as cost of sales when control of the
created benefits
sales, and service
research vehicles.
and development expenses or selling, general and Impairment of goodwill, intangible assets, property,
of sales,through
researchthe andcourse of continuous
development expenses research and development
or selling, general and related performance obligation is transferred to the customer.
(R&D) efforts that
administrative are relatively
expenses stable throughout
in the consolidated income the year. In some
statement. administrative expenses in the consolidated income statement. Past plant and equipment and right-of-use assets
Right-of-use assets are measured at cost less accumulated
contracts, Nokia has no remaining obligations to perform after granting service costs are recognized immediately in the consolidated income Nokia assesses the recoverability of the carrying value of goodwill, Fair value measurement of financial instruments
depreciation and impairment losses, and adjusted for any
Property,
a license to plantthe initialandIP,equipment
and licensing fees are non-refundable. In statement when the plan amendment, curtailment or settlement occurs. intangible assets, property, plant and equipment and right-of-use A number of financial instruments are measured at fair value as of
remeasurements
Net of the of
interest, consisting lease liabilities.
interest The cost
calculated of right-of-use
by applying assets
a discount
Property,
these cases,plant and equipment
revenue is recognized are stated at cost less
at the beginning ofaccumulated
the license term. assets if events or changes in circumstances indicate that the carrying each reporting date after initial recognition. Fair value is the price that
includes the amount of lease liabilities recognized, initial direct costs
depreciation and accumulated impairment losses. Depreciation is rate to the net defined benefit liability or asset and the effect of asset value may be impaired. In addition, Nokia tests the carrying value would be received to sell an asset or paid to transfer a liability in an
Government grants incurred, and lease payments made at or before the commencement
recorded on a straight-line basis over the expected useful lives of the ceiling, as well as pension plan administration costs not taken into of goodwill for impairment annually even if there is no indication orderly transaction between market participants at the measurement
Government grants are recognized when there is reasonable assurance date lessinany
account lease incentives
determining received.
the return on planRight-of-use
assets, areassets are within
presented
assets as follows: of impairment. date. The fair value of an asset or a liability is measured using the
that Nokia will comply with the conditions attached to them and the depreciated on a straight-line basis over the lease
financial income and expenses in the consolidated income statement. term as follows:
assumptions that market participants would use when pricing the asset
Buildings
grants will and constructions
be received. Government grants received as compensation Remeasurements, comprising actuarial gains and losses, the3–15 effect Factors that Nokia considers when it reviews indications of impairment
Buildings years or liability, assuming that market participants act in their economic
for expenses
Buildings and or losses incurred are recognized in the consolidated
constructions 20–33 years of the asset ceiling and the return on plan assets, excluding amounts include, but are not limited to, underperformance of the asset relative
Other 3–5 years best interest, by using quoted market rates, discounted cash flow
income statement to its historical or projected future results, significant changes in the
Light buildings and as a deduction against the related expenses
constructions 3–20 except
years recognized in net interest, are recognized immediately in the analyses and other appropriate valuation models. Nokia uses valuation
for certain non-recurring grants that are recognized as other operating consolidated statement of financial position with a corresponding debit manner of using the asset or the strategy for the overall business,
Vessels techniques that are appropriate in the circumstances and for which
income. Government grants related to assets are presented in the Lease liabilities are measured at the present value of lease payments and significant negative industry or economic trends.
Cable-laying vessels 15–40 years or credit to pension remeasurements reserve within shareholders’ sufficient data is available to measure fair value, maximizing the use
consolidated statement of financial position as deferred income and to be made over the lease term. Nokia determines the lease term as
equity through other comprehensive income in the period in which Goodwill is allocated to the cash-generating units or groups of cash- of relevant observable inputs and minimizing the use of unobservable
Cable-laying accessories 4–10 years the non-cancellable term of the lease, together with any periods
recognized as income over the same period the asset is depreciated they occur. Remeasurements are not reclassified to profit or loss in generating units that are expected to benefit from the synergies of the inputs. All financial assets and liabilities for which fair values are being
Machinery
or amortized. and equipment covered by an option to extend the lease if it is reasonably certain to
subsequent periods. related business combination and that reflect the lowest level at which measured or disclosed in the consolidated financial statements are
Production machinery, measuring and test equipment 1–5 years be exercised, as well as any periods covered by an option to terminate
goodwill is monitored for internal management purposes. A cash- categorized within the fair value hierarchy, described as follows,
Government
Other machinery grants andreceived
equipment in the form of R&D tax credits are 3–10 years the lease valuations
Actuarial if it is reasonably
for Nokia’scertain not to
defined be exercised.
benefit The lease plans
post-employment
generating unit, as determined for the purposes of Nokia’s goodwill based on the lowest level input that is significant to the fair value
recognized as a deduction against R&D expenses if the amount of the payments
are performedinclude fixed lease
annually or when payments
a materialandplan
certain fixed non-lease
amendment,
impairment testing, is the smallest group of assets generating cash measurement as a whole:
tax
Land credit is linked
and water areasto theare amount of R&D expenditures incurred by
not depreciated. components
curtailment orless any leaseoccurs.
settlement incentives receivable, variable lease
Nokia and the tax credit is a fully collectible asset that will be paid payments that depend on an index or a rate, and appropriate inflows that are largely independent of the cash inflows from other Level 1—Quoted (unadjusted) market prices for exchange-traded
Maintenance,
in cash by the repairs
government and renewals are generally
in case Nokia is not able expensed
to offset in it
the period
against Termination
termination fees benefits
whenever the lease term has been determined based assets or groups of assets. The carrying value of a cash-generating
products in active markets for identical assets or liabilities;
in which
its income they
taxare incurred.
payable. R&DHowever,
tax creditsmajorthatrenovations
do not meet are capitalized
both Termination benefits
on the expectation thatareNokia
payable will when
exerciseemployment
its option is toterminated
terminate. unit includes its share of relevant corporate assets allocated to it on
and included
conditions areinrecognized
the carrying asamount
incomeof taxthe asset when it is probable
benefit. before the normal
Nokia does retirement
not generally enterdate, or whenever
into lease contracts an with
employee
variableaccepts
lease a reasonable and consistent basis. When the composition of one or Level 2—Valuation techniques for which significant inputs other
that future economic benefits in excess of the originally assessed voluntary
payments redundancy
linked to future in exchange
performance for these
or use benefits. Nokia recognizes
of an underlying asset. more groups of cash-generating units to which goodwill has been than quoted prices are directly or indirectly observable; and
Employee benefits of the existing asset will flow to Nokia.
standard of performance termination benefits when it is demonstrably committed to either allocated is changed, the goodwill is reallocated based on the relative
After the commencement date, the amount of leaseaccording
liabilities to
is a Level 3—Valuation techniques for which significant inputs are
Pensions and other
Major renovations arepost-employment
depreciated over the benefits
remaining useful life of terminating the employment of current employees fair value of the affected groups of cash-generating units.
measured on anplan amortized unobservable.
Nokia has various
the related asset. post-employment
Leasehold improvements plans inare accordance
depreciated withover
the local detailed formal withoutcost basis using
possibility the effective
of withdrawal, interest
or providing
method where the lease Nokia conducts its impairment testing by determining the recoverable
conditions
the shorterand practices
of the lease term in theandcountries
the useful in which it operates.
life. Gains and lossesThe on plans termination benefits as aliabilities
result ofincrease
an offer related
made totoencourage
the accretion Nokia categorizes assets and liabilities that are measured at fair value
of interestredundancy.
and decrease for lease payments made. In amount for an asset, a cash-generating unit or groups of cash-generating
are
the generally
disposal of funded
property, through plantpayments
and equipmentto insurance companies
are included or
in other voluntary These benefits are recorded asaddition,
termination the on a recurring basis into an appropriate level of the fair value hierarchy
carrying units. The recoverable amount of an asset, a cash-generating unit or
contributions
operating income to trustee-administered
or expenses. funds as determined by periodic benefits amounts for the of
as a component right-of-use asset and
the restructuring lease liability
provision. Local are
laws may at the end of each reporting period.
remeasured if therewithis a the
modification, a change in the groups of cash-generating units is the higher of its fair value less costs
actuarial calculations. provide employees right to benefits from thelease termupon
employer or
of disposal and its value-in-use. The recoverable amount is compared
Leases a change in the
termination futurethe
whether lease paymentsisresulting
termination voluntaryfrom a change inFor
or involuntary. an
In to the asset’s, cash-generating unit’s or groups of cash-generating
Ona1defined
Januarycontribution
2019, Nokiaplan,
adoptedNokia’s
IFRSlegal
16,or constructive
Leases, obligation
which provides index or
these rate used
specific to determine
benefits, such lease
the difference betweenpayments.
the value Theofinterest
the higher
is limitedlessee
to theaccounting
amount that it agrees to contribute units’ carrying value. If the recoverable amount for the asset, cash-
a single model, requiring lessees totorecognize
the fund. component of the leasetermination
benefit for involuntary payments isand recognized
the loweras interest
benefit forexpense
voluntary
Nokia’s contributions to lease
defined contribution plans, multi-employer within financial expenses. generating unit or groups of cash-generating units is less than its
right-of-use assets and liabilities for all leases in the consolidated termination is treated as a termination benefit and the portion of the
and insuredofplans are recognized in the consolidated income statement carrying value, the asset is considered impaired and is written down
statement financial position. The right-of-use asset represents the benefit that Nokia would be required to pay to the employee in the
in the period Nokia uses its incremental borrowing rate to calculate the present to its recoverable amount. Impairment losses are presented in cost
lessee’s right to
to which
use thethe contributions
underlying leasedrelate.
assetIfwhile
a pension plan liability
the lease is case of voluntary termination is treated as a contractual or legal
value of lease payments as the interest rate implicit in the lease is not
funded through an insurance contract where Nokia does not retain of sales, research and development expenses or selling, general and
represents the lessee’s obligation to make lease payments. obligation determined by local law and accounted for as a defined
any legal or constructive obligations, the plan is treated as a defined readily determinable. Nokia estimates its incremental borrowing rate administrative expenses in the consolidated income statement,
benefit arrangement as described in the pensions section above.
Nokia assesses
contribution at contract
plan. inceptionthat
All arrangements whether
do not a contract is, or
fulfill these contains,
conditions quarterly based on the rate of interest that Nokia would pay to borrow except for impairment losses on goodwill, which are presented in
a lease
are i.e. Nokiadefined
considered assesses whether
benefit the contract conveys the right to
plans. over the lease term with a similar security to obtain an asset of a other operating expenses.
control the use of an identified asset for a period of time in exchange similar value to the leased asset in a similar economic environment.
for consideration. At the commencement date of the lease, Nokia Nokia measures all leases at amortized cost based on the appropriate
recognizes a right-of-use asset and a lease liability for all leases with a discount rate available in the quarter when lease commencement
lease term exceeding 12 months. The commencement date is the date occurred. Where a lease contract modification or reassessment of
when the lessor makes the underlying leased asset available for use the lease liability resulting from a change in the lease term occurs,
by Nokia. Nokia remeasures the present value of the lease liability based on
the appropriate discount rate available in the quarter when the
reassessment or modification occurs.
136 156
154 NOKIA IN 2021 NOKIA IN 2021 157 137
continued
Classification and measurement of financial assets Other non-current financial assets Trade receivables Corporate cash investments may also include money market funds
Nokia has classified its financial assets that are debt instruments Other non-current financial assets include restricted assets and Trade receivables arise from contracts with customers and represent that do not qualify as cash equivalents, investments acquired for
in the following three categories: financial assets measured at other receivables, customer and vendor financing related loan an unconditional right to receive the consideration and only the trading purposes, investment structures consisting of securities traded
amortized cost, financial assets measured at fair value through other receivables and certain other investments of a long-term nature. passage of time is required before the consideration is received. in combination with derivatives with complementing and typically
comprehensive income, and financial assets measured at fair value Nokia sells trade receivables to various financial institutions without offsetting risk factors and other investments that have cash flows
Restricted assets and other receivables include restricted bank not being solely payments of principal and interest. These investments
through profit and loss. Nokia has classified its financial assets that are recourse in the normal course of business, in order to manage credit
deposits primarily related to employee benefits as well as other loan are executed with the purpose of collecting contractual cash flows
equity instruments to financial assets measured at fair value through risk and working capital cycle, and the business model for managing
receivables. These assets are initially measured at fair value and in trade receivables is holding receivables to collect contractual cash flows and principal repayments as well as for capital appreciation and can
profit and loss. The selection of the appropriate category is made
subsequent periods at amortized cost using the effective interest be sold at any time.
based on both Nokia’s business model for managing the financial asset and selling receivables. Trade receivables are initially recognized
method. Interest calculated using the effective interest method as well
and on the contractual cash flow characteristics of the asset. and subsequently remeasured at fair value, determined using the
as foreign exchange gains and losses are recognized in financial income These investments are initially recognized and subsequently
discounted cash flow method. The changes in fair value are recognized
Nokia’s business model for managing financial assets is defined on a and expenses in the consolidated income statement. For these assets, remeasured at fair value determined using quoted market rates,
in fair value reserve in other comprehensive income. If trade
portfolio level. The business model must be observable on a practical a loss allowance is calculated on a quarterly basis based on a review of discounted cash flow models or other appropriate valuation methods
receivables are sold, the difference between the carrying amount
level by the way the business is managed. The cash flows of financial collectability and available collateral, recorded as an adjustment to the as of the reporting date. Fair value adjustments, foreign exchange
derecognized and the consideration received is recognized in financial
assets measured at amortized cost are solely payments of principal carrying amount of the investment and recognized in other financial gains and losses and realized gains and losses are recognized in
expenses in the consolidated income statement.
and interest. These assets are held within a business model that has expenses in the consolidated income statement. financial income and expenses in the consolidated income statement.
an objective to hold assets to collect contractual cash flows. Financial Current financial investments
Customer- and vendor-related loan receivables are managed in a Cash and cash equivalents
assets measured at fair value through other comprehensive income Nokia invests a portion of the corporate cash needed to cover the
portfolio with a business model of holding investments to collect Cash and cash equivalents include cash at bank and in hand as well
have cash flows that are solely payments of principal and interest and projected cash outflows of its ongoing business operations in highly
principal and interest as well as selling investments. They are initially as highly liquid, fixed income and money market investments that
these assets are held within a business model that has an objective liquid, interest-bearing investments. Current financial investments
recognized and subsequently remeasured at fair value determined are readily convertible to known amounts of cash with maturities at
that is achieved both by holding financial assets to collect contractual may include investments measured at amortized cost and investments
using the discounted cash flow method. The changes in fair value acquisition of three months or less, as well as bank deposits with
cash flows and selling financial assets. Financial assets measured at fair measured at fair value through profit and loss.
are recognized in fair value reserve in other comprehensive income. maturities or contractual call periods at acquisition of three months
value through profit and loss are assets that do not fall in either of
Interest calculated using the effective interest method as well as Corporate cash investments in bank deposits used as collateral for or less. Due to the high credit quality and short-term nature of
these two categories. In addition to the classification as described
foreign exchange gains and losses are recognized in financial income derivative transactions are initially measured at fair value and in these investments, there is an insignificant risk of change in value.
above, the accounting for financial assets is impacted if the financial
and expenses in the consolidated income statement. Estimated credit subsequent periods measured at amortized cost using the effective Investments in money market funds that have a risk profile consistent
asset is part of a hedging relationship (see below the section on
loss is typically based on 12-month expected credit loss for existing interest method. Interest calculated using the effective interest with the aforementioned criteria are also classified as cash equivalents.
Hedge accounting).
loans and estimated additional draw-downs during that period; refer method as well as foreign exchange gains and losses are recognized in Investments that have cash flows that are solely payments of principal
All purchases and sales of financial assets are recorded on the trade to Impairments section for further detail. Loss allowance is calculated financial income and expenses in the consolidated income statement. and interest are measured at amortized cost. All other investments
date, that is, when Nokia commits to purchase or sell the asset. on a quarterly basis based on a review of collectability and available are measured at fair value through profit and loss.
collateral, and recorded in other financial expenses in the consolidated Corporate cash investments in bank deposits, as well as fixed income
A financial asset is derecognized when substantially all the risks
and rewards related to the financial asset have been transferred income statement reducing fair value loss recorded in other and money market securities with initial maturity or put feature longer Classification and measurement of financial liabilities
comprehensive income. In case a receivable is sold, the impact of than three months that have characteristics of solely payments of Nokia has classified its financial liabilities in the following categories:
to a third party that assumes control of the financial asset.
expected credit loss is reversed, and the full gain or loss incurred principal and interest and are not part of structured investments, financial liabilities measured at amortized cost and financial liabilities
Non-current financial investments for the sale is recorded in financial income and expenses in the are managed in a portfolio with a business model of holding measured at fair value through profit and loss. Nokia classifies
Non-current financial investments include investments in unlisted consolidated income statement. investments to collect principal and interest, and are initially measured derivative liabilities as well as the conditional obligation related to Nokia
private equity shares and unlisted venture funds. As these equity and at fair value and in subsequent periods measured at amortized cost Shanghai Bell at fair value through profit and loss and all other financial
debt investments do not fulfil the criteria of being solely payments The cash flows of other investments of a long-term nature do not using the effective interest method. These investments are executed liabilities at amortized cost.
of principal and interest, they are classified as fair value through profit fulfill the criteria of being solely payments of principal and interest. with the main purpose of collecting contractual cash flows and
These investments are initially recognized and subsequently principal repayments. However, investments are sold from time to All financial liabilities are initially recognized at fair value and, in case of
and loss and are initially recognized and subsequently remeasured at
remeasured at fair value using quoted market rates, discounted time for liquidity management and market risk mitigation purposes. borrowings and payables, net of transaction costs. Financial liabilities
fair value.
cash flow models or other appropriate valuation methods as of are derecognized when the related obligation is discharged or cancelled
Fair value is estimated using a number of methods, including, but not the reporting date. Fair value adjustments, foreign exchange gains For these investments interest calculated using the effective interest or expired. Additionally, a substantial modification of the terms of an
limited to: quoted market rates; the current market value of similar and losses as well as realized gains and losses from the disposal of method, as well as foreign exchange gains and losses, are recognized existing financial liability is accounted for as a derecognition of the
instruments; prices established from a recent arm’s-length financing these investments are mainly recognized within financial income in financial income and expenses in the consolidated income original financial liability and the recognition of a new financial liability.
transaction of target companies; and analysis of market prospects and and expenses in the consolidated income statement. statement. When an investment is disposed of, the difference between On derecognition of a financial liability, the difference between the
operating performance of target companies, taking into consideration the carrying amount derecognized and the consideration received carrying amount extinguished and the consideration paid is recognized
public market comparable companies in similar industry sectors. Nokia Other current financial assets is recognized in financial income and expenses in the consolidated in interest expenses in the consolidated income statement.
uses judgment in selecting the appropriate valuation methodology Other current financial assets include current part of other non-current income statement. The FIFO method is used to determine the cost
as well as underlying assumptions based on existing market practice financial assets and short-term loan receivables as well as derivative basis of fixed income securities being disposed of. Interest-bearing liabilities
and conditions. assets that are discussed separately in the Derivative financial Long-term interest-bearing liabilities are measured at amortized cost
instruments section below. Due to the high credit quality of Nokia’s investment portfolio, the using the effective interest method. Short-term interest-bearing
Fair value adjustments, foreign exchange gains and losses as well estimated credit loss is normally based on 12-month expected credit liabilities, including the current part of long-term interest-bearing
as realized gains and losses from the disposal of these investments Short-term loan receivables are initially measured at fair value and in loss. Loss allowance is calculated on a quarterly basis, recorded as an liabilities and collaterals for derivative transactions, are measured
are recognized within other operating income and expenses in the subsequent periods measured at amortized cost using the effective adjustment to the carrying amount of the investment and recognized at amortized cost using the effective interest method.
consolidated income statement. interest method. Interest calculated using the effective interest in other financial expenses in the consolidated income statement.
method as well as foreign exchange gains and losses are recognized Transaction costs, interest calculated using the effective interest
in financial income and expenses in the consolidated income method as well as foreign exchange gains and losses are recognized in
statement. For these loans, a loss allowance is calculated on a financial income and expenses in the consolidated income statement.
quarterly basis based on a review of collectability and available
collateral, recorded as an adjustment to the carrying amount of
the investment and recognized in other financial expenses in the
consolidated income statement.
138 158 NOKIA IN 2021 NOKIA IN 2021 159 139

continued
Other financial liabilities For other non-current financial assets, loans, loan commitments and For derivatives not designated under hedge accounting but hedging For qualifying foreign exchange forwards and foreign exchange options,
Other financial liabilities mainly include a conditional obligation to financial guarantees extended to third parties, the ECL is calculated identifiable forecast exposures such as anticipated foreign currency the change in fair value that reflects the change in spot exchange
China Huaxin as part of the Nokia Shanghai Bell definitive agreements separately for each significant counterparty using the method denominated sales and purchases, the gains and losses are recognized rates on a discounted basis is recognized in hedging reserve in other
where China Huaxin obtained the right to fully transfer its ownership described above, including the impact of any collateral arrangements in other operating income or expenses in the consolidated income comprehensive income. The changes in the forward element of the
interest in Nokia Shanghai Bell to Nokia in exchange for a future cash or other credit enhancements to LGD. The estimate is based on statement. The gains and losses on all other derivatives not designated foreign exchange forwards and the time value of the options that
settlement. The financial liability related to the conditional obligation 12-month ECL unless there has been a significant increase in credit under hedge accounting are recognized in financial income and relate to hedged items are deferred in the cost of hedging reserve
is measured based on the expected future cash settlement with any risk for the specific counterparty since the initial recognition, in which expenses in the consolidated income statement. in other comprehensive income and are subsequently accounted for
changes recorded in financial income and expenses in the consolidated case lifetime ECL is estimated. Breaches of contract, credit rating in the same way as the spot element or intrinsic value.
Embedded derivatives included in contracts are identified and
income statement. downgrades and other credit measures are typical indicators that Nokia
monitored by Nokia. For host contracts that are not financial assets In each quarter, Nokia evaluates whether the forecast sales and
takes into consideration when assessing whether the credit risk on a
Other financial liabilities also include derivative liabilities that are containing embedded derivatives that are not closely related, the purchases are still expected to occur. If a portion of the hedged cash
financial instrument has increased significantly since initial recognition.
discussed separately in the Derivative financial instruments embedded derivatives are separated and measured at fair value as of flow is no longer expected to occur, all related deferred gains or losses
section below. For trade receivables and contract assets, an expected credit loss each reporting date with changes in fair value recognized in financial are derecognized from other comprehensive income and recognized
allowance is calculated and provided for each customer using the income and expenses in the consolidated income statement. For host in other operating income and expenses in the consolidated income
Trade payables model described above where the key considerations include the contracts that are financial assets containing embedded derivatives, statement as hedge accounting criteria is no longer met. If the hedged
Trade payables are carried at invoiced amount, which is considered credit rating of the customer and the aging of the related balances. A the whole contract is measured at fair value as of each reporting date cash flow ceases to be highly probable, but is still expected to occur,
to be equal to the fair value due to the short-term nature of Nokia’s simplified approach is applied where the allowance is determined at an with changes in fair value recognized in financial income and expenses accumulated gains and losses remain in other comprehensive income
trade payables. amount equal to the lifetime expected credit losses for each customer. in the consolidated income statement. until the hedged cash flow affects profit or loss.
Impairments of financial assets The change in the amount of loss allowance for ECL for trade Hedge accounting Nokia’s risk management objective is to hedge forecast cash flows until
Impairment requirements apply to the recognition of a loss allowance receivables and contract assets is recognized in other operating Nokia applies hedge accounting on certain foreign exchange forward the related revenue has been recognized. Each hedge relationship is
for expected credit losses (ECL) on financial assets measured at expenses and for other financial assets in financial expenses in the contracts, options or option strategies, and interest rate derivatives. discontinued during the quarter when the hedge matures, which is also
amortized cost, financial assets measured at fair value through other consolidated income statement. For assets carried at amortized cost, Qualifying options and option strategies have zero net premium, or the quarter that it has been designated to hedge. At this point, the
comprehensive income, financial guarantee contracts and loan the loss allowance is recorded as an adjustment to the carrying a net premium paid. For option structures, the critical terms of the accumulated profit or loss of cash flow hedges is recycled to other
commitments. Nokia continuously assesses its financial instruments amount. For assets carried at fair value through other comprehensive purchased and written options are the same and the notional amount operating income and expenses in the consolidated income statement.
on a forward-looking basis and accounts for the changes in ECL on income, the loss allowance is recorded as an adjustment in other of the written option component is not greater than that of the In case the forecast amount of revenue is not recognized during
a quarterly basis using the following method: comprehensive income instead of adjusting the carrying amount purchased option. a quarter, the full accumulated profit or loss of cash flow hedges
that has already been recorded at fair value. For financial guarantee designated for said quarter is still recycled and the portion related
 ECL = PD x LGD x EAD contracts, the loss allowance is recognized as another liability in the In the fair valuation of foreign exchange forward contracts, Nokia to forecast revenue that was not recognized is disclosed as
statement of financial position. separates the spot element and the forward element including the hedge ineffectiveness.
 Probability of Default (PD) is estimated separately for the
impact of foreign currency basis spread and forward points, which is
centralized investment portfolio and non-centralized investments. As cash flow hedges primarily mature in the same quarter as the
Derivative financial instruments considered as the cost of hedging for foreign exchange forward
The estimate is based on the credit rating profile of these hedged item, there is no significant ineffectiveness resulting from time
All derivatives are recognized initially at fair value on the date a contracts. In the fair valuation of foreign exchange option contracts,
investments as well as specific local circumstances as applicable, value of money. Nokia will validate the magnitude of the impact of
derivative contract is entered into and subsequently remeasured at Nokia separates the intrinsic value and time value, which is considered
unless there are specific events that would indicate that the credit discounting related to the amount of profit or loss recognized in other
fair value. The method of recognizing the resulting gain or loss varies as the cost of hedging for foreign exchange option contracts. In the
rating would not be an appropriate basis for estimating credit risk comprehensive income on a quarterly basis.
according to whether the derivatives are designated and qualify under fair valuation of cross-currency swaps, Nokia separates the foreign
at the reporting date.
hedge accounting. currency basis spread that is considered as the cost of hedging for Nokia has also entered into foreign exchange forwards in relation to
 For Loss Given Default (LGD), the recovery rate is also estimated cross-currency swaps. forecast sales and purchases that do not qualify as highly probable
The cash flows of a hedge are classified as cash flows from operating
separately for centralized investment portfolios and non-centralized forecast transactions and hence do not satisfy the requirements for
activities in the consolidated statement of cash flows in case the Cash flow hedges: hedging of forecast foreign currency
investments and is based on the type of investment, specific local hedge accounting. For these foreign exchange forwards, the gains
underlying hedged items relate to Nokia’s operating activities. When denominated sales and purchases
circumstances as applicable as well as related collateral and losses are recognized in other operating income and expenses
a derivative contract is accounted for as a hedge of an identifiable Nokia applies cash flow hedge accounting primarily to forecast business
arrangements, if any. in the consolidated income statement.
position relating to financing or investing activities, the cash flows of foreign exchange exposure that arises from highly probable forecast
 Exposure at Default (EAD) is normally the nominal value of the the contract are classified in the same way as the cash flows of the operative business transactions. The risk management strategy is to Cash flow hedges: hedging of future interest cash flows
investment or financial guarantee. For loan commitments, EAD is position being hedged. Certain derivatives are hedging the foreign hedge material net exposures (identified standard sales exposure Nokia also applies cash flow hedging to future interest cash flows in
based on estimated draw-down amounts for the next 12 months. exchange risk of Nokia’s cash position and their cash flows are included minus identified standard costs exposure) by using foreign exchange foreign currency related to issued bonds. These future interest cash
in cash flows from investing activities in the consolidated statement forwards and foreign exchange options in a layered hedging style that
All Nokia’s current investments at amortized cost and fair value flows are hedged with cross-currency swaps that have been bifurcated
of cash flows. follows defined hedging level ranges and hedge maturities in quarterly
through other comprehensive income are considered to have low credit and designated partly as fair value hedges to hedge both foreign
time buckets. The hedged item must be highly probable and present exchange and the interest rate benchmark risk component of the
risk, and the loss allowance recognized during the period is therefore Derivatives not designated in hedge accounting relationships
limited to 12 months’ expected losses. Financial instruments that are an exposure to variations in cash flows that could ultimately affect issued bond and partly as cash flow hedges to hedge the foreign
carried at fair value through profit and loss
rated as investment grade are considered to have low credit risk for profit or loss. exchange risk related to the remaining portion of interest cash flows
Foreign exchange forward contracts are valued at market-forward
the purposes of this assessment. exchange rates. Changes in fair value are measured by comparing Nokia only designates the spot element of the foreign exchange on the issued bond. The accumulated profit or loss for the part of
these rates with the original contract-forward rate. Currency options forward contract as the hedging instrument. Currency options, or these cross-currency swaps designated as cash flow hedges is initially
are valued as of each reporting date by using the Garman & Kohlhagen option strategies, may also be used for cash flow hedging, in which recorded in hedging reserve and recycled to profit or loss at the time
option valuation model. Changes in fair value are recognized in the case the intrinsic value of the option is designated as the hedging when the related interest cash flows are settled. Nokia separates the
consolidated income statement. instrument. Hedge effectiveness is assessed at inception and quarterly foreign currency basis spread from cross-currency swaps and excludes
during the hedge relationship to ensure that an economic relationship it from the hedge relationship as cost of hedging that is initially
Fair values of forward rate agreements, interest rate options, recognized and subsequently measured at fair value and recorded
exists. As Nokia only enters in hedge relationships where the
futures contracts and exchange-traded options are calculated based in cost of hedging reserve in other comprehensive income.
critical terms match, the assessment of effectiveness is done on
on quoted market rates as of each reporting date. The discounted
a qualitative basis.
cash flow method is used to value interest rate and cross-currency
swaps. Changes in fair value are recognized in the consolidated
income statement.
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continued
Fair value hedges: hedging of foreign exchange exposure Hedges of net investments in foreign operations Provisions 3. New and amended standards and
In certain cases, mainly related to long-term construction projects, Nokia applies hedge accounting for its foreign currency hedging of Provision is recognized when Nokia has a present legal or constructive
Nokia applies fair value hedge accounting for foreign exchange risk with selected net investments. Hedged item can be an amount of net assets obligation as a result of past events, it is probable that an outflow interpretations
the objective to reduce the exposure to fluctuations in the fair value of equal to or less than the carrying amount of the net assets of the of resources will be required to settle the obligation and a reliable On 1 January 2021, Nokia adopted the following amendments to the
firm commitments due to changes in foreign exchange rates. Changes foreign operation in Nokia consolidated financial statements. The risk estimate of the amount can be made. Management judgment may accounting standards issued by the IASB and endorsed by the EU:
in the fair value of both spot and forward elements of the derivatives management strategy is to protect the euro counter value of the be required in determining whether it is probable that an outflow
designated and qualifying as fair value hedges, together with any portion of this exposure expected to materialize as non-euro cash of economic benefits will be required to settle the obligation. The  Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16:
changes in the fair value of the hedged firm commitments attributable repatriation in the foreseeable future. amount recognized as a provision is based on the best estimate of Interest Rate Benchmark Reform – Phase 2.
to the hedged risk, are recorded in financial income and expenses in unavoidable costs required to settle the obligation at the end of the
Nokia only designates the spot element of the foreign exchange The amendments had no material impact on Nokia’s consolidated
the consolidated income statement. reporting period.
forward contract as the hedging instrument. Currency options, or financial statements.
Fair value hedges: hedging of interest rate exposure option strategies, may also be used for net investment hedging, When estimating the amount of unavoidable costs, management Nokia has not early adopted any new and amended standards and
Nokia applies fair value hedge accounting to reduce exposure to fair in which case the intrinsic value of the option is designated as the may be required to consider a range of possible outcomes and their interpretations that have been issued but are not yet effective. The
value fluctuations of interest-bearing liabilities due to changes in hedging instrument. Hedge effectiveness is assessed at inception associated probabilities, risks and uncertainties surrounding the events new and amended standards and interpretations issued by the IASB
interest rates and foreign exchange rates. Nokia uses interest rate and quarterly during the hedge relationship to ensure that an and circumstances as well as making assumptions of the timing of that are effective in future periods are not expected to have a material
swaps and cross-currency swaps aligned with the hedged items to economic relationship exists. As Nokia only enters in hedge payment. Changes in estimates of timing or amounts of costs required impact on the consolidated financial statements of Nokia when
hedge interest rate risk and associated foreign exchange risk. relationships where the critical terms match, the assessment of to settle the obligation may become necessary as time passes and/or adopted. Nokia intends to adopt these new and amended standards
effectiveness is done on a qualitative basis with no significant more accurate information becomes available. Nokia assesses the
Nokia has entered into long-term borrowings mainly at fixed rate and and interpretations, if applicable, when they become effective and are
ineffectiveness expected. adequacy of its existing provisions and adjusts the amounts as
swapped a portion of them into floating rates in line with a defined endorsed by the EU.
necessary based on actual experience and changes in facts and
target interest profile. Nokia aims to mitigate the adverse impacts For qualifying foreign exchange forwards, foreign exchange options and
from interest rate fluctuations by continuously managing net interest option strategies, the change in fair value that reflects the change in
circumstances as of each reporting date. For descriptions of different 4. Use of estimates and critical accounting
classes of provisions, refer to Note 27, Provisions.
spot exchange rates is recognized in translation differences within
exposure resulting from financial assets and liabilities by setting
consolidated shareholders’ equity. The changes in the forward element
judgments
appropriate risk management benchmarks and risk limits. The hedged Contingent liabilities
item is identified as a proportion of the outstanding loans up to the of foreign exchange forwards as well as the changes in the time value The preparation of financial statements requires use of management
Nokia discloses ongoing legal matters that relate to possible
notional amount of the swaps as appropriate to achieve the risk of options (collectively known as the “cost of hedging”) is recognized judgment in selecting and applying accounting policies as well as
obligations whose existence will be confirmed by the occurrence or
management objective. Nokia enters into interest rate swaps that have in cost of hedging reserve in other comprehensive income. The cost making estimates and assumptions about the future. These judgments,
non-occurrence of one or more uncertain future events not wholly
similar critical terms as the hedged item, such as reference rate, reset of hedging at the date of designation of the foreign exchange forward estimates and assumptions may have a significant effect on the
within the control of Nokia. These matters are assessed continually
dates, payment dates, maturities and notional amount and hence Nokia or option contract as a hedging instrument is amortized to financial amounts recognized in the financial statements.
to determine whether an outflow of resources embodying economic
expects that there will be no significant ineffectiveness. Nokia has not income and expenses in the consolidated income statement over the benefits has become probable so as to recognize a provision. The estimates and assumptions used in determining the carrying
entered into interest rate swaps where it would be paying fixed rate. duration of the contract. Hence, in each reporting period, the change in
amounts of assets and liabilities are based on historical experience,
fair value of forward element of the foreign exchange forward contract Treasury shares expected outcomes and various other factors that were available when
Nokia’s borrowings are carried at amortized cost. Changes in the fair or the time value of the option contract is recorded in cost of hedging Nokia recognizes its own equity instruments that are acquired (treasury these consolidated financial statements were prepared, and they are
value of derivatives designated and qualifying as fair value hedges, reserve, while the amortization amount is reclassified from cost of shares) as a reduction of equity at cost of acquisition. When cancelled believed to be reasonable under the circumstances. The estimates
together with any changes in the fair value of hedged liabilities hedging reserve to profit or loss. or reissued, the acquisition cost of treasury shares is recognized and assumptions are reviewed continually and revised if changes
attributable to the hedged risk, are recorded in financial income and
Accumulated changes in fair value from qualifying hedges are in retained earnings or other distributable reserves of the equity. in circumstances occur, or as a result of new information or more
expenses in the consolidated income statement. Nokia separates the
foreign currency basis spread from cross-currency swaps and excludes derecognized from translation differences within consolidated experience. As estimates and assumptions inherently contain a
Dividend and equity repayment varying degree of uncertainty, actual outcomes may differ resulting
it from the hedged risk as cost of hedging that is initially recognized shareholders’ equity on the disposal of all or part of a foreign
Nokia pays dividend and/or makes equity repayments to its in adjustments to the carrying amounts of assets and liabilities in the
and subsequently measured at fair value and recorded in cost of subsidiary by sale, liquidation, repayment of share capital or
shareholders in quarterly instalments. Each quarterly distribution subsequent periods.
hedging reserve in other comprehensive income. If a hedge relationship abandonment. The cumulative amount or proportionate share of
is resolved by the Board of Directors separately in accordance with
no longer meets the criteria for hedge accounting, hedge accounting changes in the fair value of qualifying hedges deferred in translation
the authorization granted by the Annual General Meeting. Dividends The accounting matters presented in this note are determined to
ceases, cost of hedging recorded in cost of hedging reserve is differences is recognized as income or expense on disposal.
and/or equity repayments are recognized in the consolidated involve the most difficult, subjective or complex judgments, or are
immediately expensed and any fair value adjustments made to the financial statements when the Board of Directors has resolved considered as key sources of estimation uncertainty.
carrying amount of the hedged item while the hedge was effective are on the quarterly payment.
recognized in financial income and expenses in the consolidated
income statement based on the effective interest method.
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continued
Pension and other post-employment benefit obligations Nokia continues to assess the realizability of deferred tax assets Segment descriptions Nokia Technologies
including in particular its actual profit record and may re-recognize Mobile Networks The Nokia Technologies segment, building on decades of innovation
and expenses
deferred tax assets related to Finland where a clear pattern of tax The Mobile Networks segment offers technologies for Radio Access and R&D leadership in technologies used in virtually all mobile devices
Key source of estimation uncertainty
profitability can be established. Networks (RAN) as well as Microwave Radio Links (MWR) for transport used today, is expanding the Nokia patent licensing business,
The determination of pension and other post-employment benefit
networks. RAN includes 3GPP radio technologies ranging from 2G/GSM reintroducing the Nokia brand to smartphones through brand licensing,
obligations and expenses for defined benefit plans is dependent on Refer to Note 11, Income taxes, for further information on
to 5G/NR in licensed and unlicensed spectrum for both macro and small and establishing a technology licensing business. The majority of
a number of estimates and assumptions, including the discount rate, income taxes.
cell deployments. In addition to RAN and MWR products, the Mobile net sales and related costs and expenses attributable to licensing
future mortality rate, annual rate of increase in future compensation
and patenting the patent portfolio of Nokia is recorded in Nokia
levels, and healthcare costs trend rates and usage of services in the 5. Segment information Networks segment provides associated network management solutions
Technologies, while each segment separately records its own research
United States where the majority of our post-employment healthcare as well as network planning, network optimization, network deployment
Nokia has four operating and reportable segments for the financial and technical support services. and development expenses.
plans are maintained. Changes in assumptions and actuarial estimates reporting purposes: (1) Mobile Networks, (2) Network Infrastructure,
may materially affect the benefit obligation, future expense and Nokia also provides segment-level information for Group Common and
(3) Cloud and Network Services and (4) Nokia Technologies. Network Infrastructure
future cash flow. Based on these estimates and assumptions, Other. Group Common and Other includes Radio Frequency Systems
The Network Infrastructure segment serves communication service
as of 31 December 2021, defined benefit obligations amount to In addition, Nokia provides net sales disclosure for the following which is managed as a separate entity. In addition, Group Common and
providers, enterprises, webscales and public sector customers.
EUR 22 704 million (EUR 23 501 million in 2020) and the fair value business divisions within the Network Infrastructure segment: Other includes certain corporate-level and centrally managed operating
It comprises the following business divisions: (i) IP Networks, which
of plan assets amounts to EUR 27 128 million (EUR 25 688 million (i) IP Networks, (ii) Optical networks, (iii) Fixed Networks and expenses, as well as fair value gains and losses on investments in
provides IP networks and services for residential, mobile, enterprise
in 2020). (iv) Submarine Networks. unlisted venture funds, including investments managed by NGP Capital.
and cloud applications; (ii) Optical Networks, which provides optical
Critical accounting judgment Nokia adopted its current operational and reporting structure on transport networks for metro, regional, longhaul and ultra-longhaul
Where a surplus on a defined benefit scheme arises, Nokia analyzes 1 January 2021. The reporting structure was revised to reflect Nokia’s applications; (iii) Fixed Networks, which provides fiber, fixed wireless
the recoverability of the surplus through either a refund or through new strategy and operational model and is aligned with the way the access, and copper technologies; and (iv) Submarine Networks,
reduction of future contributions in determining whether it is management evaluates the operational performance of Nokia and which offers undersea cable transmission.
necessary to restrict the amount of the surplus that is recognized. allocates resources. Previously Nokia had three reportable segments:
Cloud and Network Services
Nokia has two plans in the US, one plan in the UK and one in Belgium (1) Networks, (2) Nokia Software and (3) Nokia Technologies.
Furthermore, Networks reportable segment consisted of four The Cloud and Network Services segment is built around software and
with material surplus positions with a combined surplus of EUR 7 718
aggregated operating segments: (1) Mobile Networks, (2) Global the cloud and is focused on driving leadership in cloud-native software
million as of 31 December 2021 (EUR 6 147 million in 2020). In 2021,
Services, (3) Fixed Networks and (4) IP/Optical Networks. The most and as-a-service delivery models, as demand for critical networks
Nokia modified the terms of all pension plans in the US after which it
significant changes to the operational and reporting structure are accelerates; and with strong market positions in communications
has made the judgment that all plans with material surplus positions
the reclassifications of the following product areas: software, private wireless networks, and cognitive (or intelligent)
meet the requirements of recoverability. The remaining pension plans
services. The Cloud and Network Services portfolio encompasses core
for which Nokia has determined that the surplus assets are not
 Network management was reclassified from Nokia Software to network solutions, including both voice and packet core; business
recoverable are considered to be not material. The resulting asset
Mobile Networks applications covering areas like security and digital operations; cloud
ceiling limitation is recorded at EUR 92 million as of 31 December 2021
 Submarine Networks was reclassified from Group Common and and cognitive services; and enterprise solutions covering private
(EUR 1 195 million in 2020).
Other to Network Infrastructure wireless and industrial automation.
Refer to Note 25, Pensions and other post-employment benefits.  Packet Core was reclassified from IP/Optical Networks to Cloud
and Network Services
Income taxes  Managed Services, Network Cognitive Services and Enterprise
Critical accounting judgment Solution Services were reclassified from Global Services to Cloud
Nokia uses judgment in determining the extent to which deferred tax and Network Services
assets can be recognized. The recognition of deferred tax assets is  Digital Automation and Analytics & IoT was reclassified from Group
based on the assessment of whether it is probable that sufficient Common and Other to Cloud and Network Services
taxable profit will be available in the future to utilize the deductible
temporary differences, unused tax losses and unused tax credits Segment information for 2020 and 2019 has been recast for
before the unused tax losses and unused tax credits expire. This comparability purposes according to the new operating and
assessment requires estimates of the future financial performance reporting structure.
of a particular legal entity or a tax group that has recognized the
The President and CEO is the chief operating decision-maker
deferred tax asset.
monitoring the operating results of segments for the purpose of
As of 31 December 2021, Nokia has EUR 33 222 million (EUR 33 620 million assessing performance and making decisions about resource allocation.
in 2020) of temporary differences, tax losses carry forward and tax Key financial performance measures of the segments comprise
credits for which no deferred tax assets are recognized due to primarily net sales and segment operating profit. The evaluation of
uncertainty of utilization. The majority of these unrecognized deferred segment performance and allocation of resources is primarily based on
tax assets relate to France and Finland. As it relates to Finland, in 2020 segment operating profit which the management believes is the most
Nokia derecognized EUR 2 918 million of deferred tax assets based relevant measure for this purpose. Segment operating profit excludes
on the assessment that was done primarily based on the historical acquired intangible asset amortization and other purchase price fair
performance. At 31 December 2021, Nokia continues to conclude that value adjustments, goodwill impairments, restructuring related charges
it is not probable that it will be able to utilize the deferred tax assets and certain other items of income and expenses that may not be
in Finland in the foreseeable future. This conclusion is based on the indicative of the business operating results.
weighting of objective negative evidence against more subjective
Accounting policies of the segments are the same as those described
positive evidence. The primary factors in this weighting were the more
in Note 2, Significant accounting policies, except that certain above-
objective record of a pattern of financial performance compared to the
mentioned items of income and expenses are not allocated to the
more inherently subjective expectations regarding future financial
segments. Inter-segment revenues and transfers are accounted for as
performance in Finland.
if the revenues were to third parties, that is, at current market prices.
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continued
Segment information Material reconciling items between total segment operating profit and operating profit for the Group
Eliminations EURm 2021 2020 2019
and
Mobile Network Cloud and Nokia Group Common unallocated Nokia Total segment operating profit 2 775 2 081 2 003
EURm Networks Infrastructure(1) Network Services Technologies and Other items(2) Group Amortization of acquired intangible assets (391) (407) (924)
2021 Restructuring and associated charges (263) (651) (502)
Net sales to external customers 9 711 7 673 3 088 1 490 240 – 22 202 Settlement of legal disputes 80 – –
Net sales to other segments 6 1 1 12 17 (37) – Gain on sale of fixed assets 53 – –
Operating profit/(loss) 765 784 166 1 185 (125) (617) 2 158 Impairment and write-off of assets, net of reversals (45) (241) (29)
Share of results of associated companies Change in provisions related to past acquisitions (26) – –
and joint ventures 6 (1) 6 (2) – 9 Fair value changes of legacy IPR fund (23) – –
Financial income and expenses (241) Gain on defined benefit plan amendment – 90 168
Profit before tax 1 926 Transaction and related costs, including integration costs – 11 (48)
Product portfolio strategy costs – – (163)
Other segment items Operating model integration – – (12)
Depreciation and amortization (338) (208) (95) (33) (30) (391) (1 095) Other (2) 2 (8)
2020 Operating profit for the Group 2 158 885 485
Net sales to external customers 10 394 6 735 3 086 1 389 250 (2) 21 852
Net sales to other segments 4 1 1 13 19 (38) – Information by geographies and customer concentration
Operating profit/(loss) 819 457 (67) 1 123 (251) (1 196) 885 Net sales to external customers by country
Share of results of associated companies
Net sales(1)
and joint ventures 22 (1) 5 1 (5) 22 2021 2020 2019
EURm
Financial income and expenses (164) Finland(1) 1 605 1 480 1 552
Profit before tax 743 United States 6 791 6 792 6 645
Japan 1 030 904 977
Other segment items India 1 022 945 1 350
Depreciation and amortization (347) (200) (114) (39) (25) (407) (1 132) Other 11 754 11 731 12 791
2019 Total 22 202 21 852 23 315
Net sales to external customers 11 325 6 902 3 327 1 473 317 (29) 23 315
(1) Net sales to external customers by country are based on the location of the customer, except for Nokia Technologies IPR and licensing net sales which are allocated to Finland. In 2021, Nokia
Net sales to other segments 2 1 – 14 54 (71) –
aligned how it externally reports financial information on a geographical basis with its internal reporting structure. As a result, a portion of net sales has been reallocated between countries.
Operating profit/(loss) 384 562 136 1 200 (279) (1 518) 485 The comparative information for 2020 and 2019 has been recast accordingly.
Share of results of associated companies
and joint ventures 9 (1) 4 – – 12 Major customers
Financial income and expenses (341) As is typical for our industry, Nokia’s net sales are largely driven by multi-year customer agreements with limited amount of significant customers.
Profit before tax 156 Net sales from Nokia’s largest customer were 11% (11% in 2020 and less than 10% in 2019) of net sales to external customers. Net sales from
the largest customer were reported by Mobile Networks, Networks Infrastructure, Cloud and Network Services as well as Group Common and Other.
Other segment items Non-current assets by country
Depreciation and amortization (228) (129) (66) (33) (280) (924) (1 660)
Non-current assets(1)
(1) Includes IP Networks net sales of EUR 2 679 million (EUR 2 585 million in 2020 and EUR 2 700 million in 2019), Optical Networks net sales of EUR 1 708 million (EUR 1 695 million in 2020 and EURm 2021 2020
EUR 1 752 million in 2019), Fixed Networks net sales of EUR 2 358 million (EUR 1 759 million in 2020 and EUR 1 881 million in 2019) and Submarine Networks net sales of EUR 929 million Finland 1 348 1 382
(EUR 697 million in 2020 and EUR 570 million in 2019).
United States 5 083 4 843
(2) Unallocated items comprise costs related to the acquired intangible asset amortization and other purchase price fair value adjustments, goodwill impairments, restructuring related charges
and certain other items. France 2 029 1 857
Other 1 399 1 533
Total 9 859 9 615
(1) Consists of goodwill and intangible assets, property, plant and equipment and right-of-use assets.
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continued
6. Revenue recognition Completed Contracts

In April 2014, Nokia entered into an agreement to license certain technology patents and patent applications owned by Nokia on the effective
Management has determined that Nokia’s geographic areas depict how the nature, amount, timing and uncertainty of revenue and cash flows
date of that agreement, on a non-exclusive basis, to a licensee, for a period of 10 years (the “License Agreement”). Contemporaneously and under
are affected by economic factors. Nokia’s primary customer base consists of companies that operate on a country-specific or a regional basis.
the terms of the License Agreement, Nokia issued to the licensee an option to extend the technology patent license for the remaining life of the
Although Nokia’s technology cycle is similar around the world, different countries and regions are inherently in a different stage of that cycle,
licensed patents. Nokia received all cash consideration due for the sale of the 10-year license and option upon closing of the License Agreement.
often influenced by macroeconomic conditions specific to those countries and regions.
Management has determined that, upon transition to IFRS 15, Revenue from Contracts with Customers, the License Agreement is a completed
Each reportable segment, as described in Note 5, Segment information, consists of customers that operate in all geographic areas. No reportable contract. As such, in accordance with the transition requirements of the standard, Nokia continues to apply its prior revenue accounting policies,
segment has a specific revenue concentration in any geographic area other than Nokia Technologies, which is included within Europe. based on IAS 18, Revenue, and related interpretations, to the License Agreement. Under those policies, Nokia is recognizing revenue over the
term of the License Agreement.
Net sales to external customers by region(1)
As of 31 December 2021, the balance of deferred revenue related to the License Agreement of EUR 360 million (EUR 515 million in 2020),
EURm 2021 2020 2019 recognized in deferred revenue in the consolidated statement of financial position, is expected to be recognized as revenue through 2024.
Asia Pacific 2 562 2 742 3 070
Europe 6 635 6 427 6 438 7. Expenses by nature
Greater China 1 545 1 510 1 970 EURm 2021 2020 2019
India 1 039 954 1 359 Personnel expenses 7 541 7 310 7 360
Latin America 1 226 1 070 1 517 Cost of material 6 320 6 016 8 148
Middle East & Africa 1 915 1 981 1 977 Project subcontracting and other customer contract expenses 4 225 4 887 4 003
North America 7 280 7 168 6 984 Depreciation and amortization 1 095 1 132 1 660
Total 22 202 21 852 23 315 IT services 230 343 362
(1) Net sales to external customers by region are based on the location of the customer, except for Nokia Technologies IPR and licensing net sales which are allocated to Europe. In 2021, Nokia Impairment charges 39 241 38
aligned the way it externally reports financial information on a regional basis with its internal reporting structure. As a result, India which was earlier presented as part of the Asia Pacific region Other(1) 1 037 1 164 1 432
is now presented as a separate region. In addition, certain countries are now presented as part of a different region. The comparative net sales to external customers by region for 2020 and
2019 have been recast accordingly. Total operating expenses(1) 20 487 21 093 23 003
(1) In 2021 Nokia changed the presentation of certain items within other operating income and expenses, impacting the total operating expense amount. The comparative amounts for 2020 and
Contract assets and contract liabilities 2019 have been recast accordingly. For more information, refer to Note 2, Significant accounting policies.
Contract asset balances decrease upon reclassification to trade receivables when Nokia’s right to payment becomes unconditional. Contract
liability balances decrease when Nokia satisfies the related performance obligations and revenue is recognized. There were no material cumulative Operating expenses include government grant income and R&D tax credits of EUR 111 million (EUR 98 million in 2020 and EUR 83 million in 2019)
adjustments to revenue recognized arising from changes in transaction prices, changes in measures of progress or changes in estimated most of which have been recognized in the consolidated income statement as a deduction against research and development expenses.
variable consideration. Restructuring charges by function(1):
During the year, Nokia recognized EUR 1.7 billion (EUR 2.1 billion in 2020) of revenue that was included in the current contract liability balance EURm 2021 2020 2019
at the beginning of the period.
Cost of sales 133 245 227
Order backlog Research and development expenses 73 189 105
As of 31 December 2021, the aggregate amount of the transaction price allocated to partially or wholly unsatisfied performance obligations Selling, general and administrative expenses 78 67 117
arising from fixed contractual commitments amounted to EUR 20.3 billion (EUR 16.6 billion in 2020), which included the amounts related to the Total restructuring charges 284 501 449
completed contract disclosed below. Management has estimated that these unsatisfied performance obligations will be recognized as revenue (1) Restructuring charges include defined benefit plan curtailment income and expenses.
as follows:
2021 2020 8. Personnel expenses
Within 1 year 73% 68% EURm 2021 2020 2019
2-3 years 24% 31% Salaries and wages(1) 6 191 6 055 6 094
More than 3 years 3% 1% Share-based payment expense(2) 118 76 77
Total 100% 100% Pension and other post-employment benefit expense, net(3) 406 362 242
Social security costs 826 817 947
The estimated timing of the satisfaction of these performance obligations is subject to change owing to factors beyond Nokia’s control such as
Total 7 541 7 310 7 360
customer and network demand, market conditions and, in some cases, restrictions imposed by the weather or other factors impacting project
logistics. Revenue recognized in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods (for (1) Includes termination benefits.
example, due to changes in transaction price) was not material. (2) Presented net of related social costs.
(3) Includes net gain on pension plan amendments, curtailments and settlements of EUR 13 million (net gains of EUR 58 million in 2020 and EUR 131 million in 2019).
The average number of employees is 87 927 (92 039 in 2020 and 98 322 in 2019).
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continued
9. Other operating income and expenses 11. Income taxes

EURm 2021 2020 2019 Components of the income tax expense
Other operating income
EURm 2021 2020 2019
Gains from unlisted venture funds(1) 188 61 50
Current tax (409) (295) (367)
Settlements and resolutions of legal disputes 90 – –
Deferred tax 137 (2 961) 229
Profit on sale of property, plant and equipment 66 3 18
Total (272) (3 256) (138)
Subsidies and government grants 43 3 8
Other 56 59 97
Total 443 126 173
Income tax reconciliation
Reconciliation of the difference between income tax computed at the statutory rate in Finland of 20% and income tax recognized in the
Other operating expenses
consolidated income statement:
Changes in provisions (77) (5) (47)
Foreign exchange gains/(losses) on hedging forecasted sales and purchases(1) 45 5 (88) EURm 2021 2020 2019
VAT and other indirect tax write-offs (21) (5) – Income tax expense at statutory rate (385) (149) (31)
Retirements and loss on sale of property, plant and equipment (20) (10) (27) Permanent differences 47 90 53
Expected credit losses on trade receivables(1) 16 (171) 28 Non-creditable withholding taxes (37) (37) (31)
Goodwill impairment – (200) – Income taxes for prior years(1) 95 26 (13)
Other (56) (63) (67) Effect of different tax rates of subsidiaries operating in other jurisdictions (57) (39) (8)
Total (113) (449) (201) Effect of deferred tax assets not recognized(2) (77) (3 202) (99)
Benefit arising from previously unrecognized deferred tax assets 187 105 29
(1) In 2021 Nokia changed the presentation of certain items within other operating income and expenses. The comparative amounts for 2020 and 2019 have been recast accordingly.
For more information, refer to Note 2, Significant accounting policies.
Net increase in uncertain tax positions (29) (12) (6)
Change in income tax rates 17 (12) (30)
10. Financial income and expenses Income taxes on undistributed earnings (33) (26) (2)
Total (272) (3 256) (138)
EURm 2021 2020 2019
Financial income (1) In 2021, relates primarily to a tax benefit related to past operating model integration.
(2) In 2020, includes a derecognition of deferred tax assets related to Finland.
Interest income on financial investments(1) 21 30 35
Interest income on financing components of other contracts 28 38 42
Income tax liabilities and assets include a net liability of EUR 192 million liability (EUR 149 million in 2020) relating to uncertain tax positions with
Other financial income(2) (6) 97 92 inherently uncertain timing of cash outflows.
Total 43 165 169
Financial expenses Prior period income tax returns for certain Group companies are under examination by local tax authorities. Nokia has ongoing tax investigations
in various jurisdictions, including the United States, Canada, India, Brazil, Saudi Arabia and South Korea. Nokia’s business and investments,
Interest expense on interest-bearing liabilities (113) (127) (99)
especially in emerging market countries, may be subject to uncertainties, including unfavorable or unpredictable tax treatment. Management
Negative interest on financial investments(1) (29) (9) (4)
judgment and a degree of estimation are required in determining the tax expense or benefit. Even though management does not expect that
Interest expense on financing components of other contracts(3) (40) (83) (172) any significant additional taxes in excess of those already provided for will arise as a result of these examinations, the outcome or actual cost
Interest expense on lease liabilities (24) (25) (28) of settlement may vary materially from estimates.
Net interest income/(expense) on defined benefit plans 26 – (9)
Net fair value losses on investments at fair value through profit and loss – – (2) Deferred tax assets and liabilities
Net fair value gains/(losses) on hedged items under fair value hedge accounting 25 (122) (133) 2021 2020
Net fair value (losses)/gains on hedging instruments under fair value hedge accounting (25) 118 141 Deferred Deferred Deferred Deferred
EURm tax assets tax liabilities Net balance tax assets tax liabilities Net balance
Net foreign exchange losses (60) (8) (106)
Tax losses carried forward and unused tax credits 794 – 720 –
Other financial expenses(4)(5) (44) (73) (98)
Undistributed earnings – (136) – (104)
Total (284) (329) (510)
Intangible assets and property, plant and equipment 1 167 (176) 1 020 (291)
(1) In 2021 Nokia changed the presentation of negative interest on financial investments within financial income and expenses. The comparative amounts for 2020 and 2019 have been recast Right-of-use assets – (210) – (197)
accordingly. For more information, refer to Note 2, Significant accounting policies.
(2) In 2021, includes an expense of EUR 33 million (in 2020 and 2019 income of EUR 79 million and EUR 64 million, respectively) due to a change in the fair value of the financial liability related
Defined benefit pension assets – (2 052) 3 (1 233)
to Nokia Shanghai Bell. Refer to Note 31, Significant partly-owned subsidiaries. Other non-current assets 49 (34) 27 (40)
(3) In 2021, includes EUR 12 million (EUR 31 million in 2020 and EUR 94 million in 2019) related to the sale of receivables. Inventories 79 (13) 120 (8)
(4) In 2021, includes an increase in loss allowance of EUR 32 million (EUR 58 million in 2020) related to loans extended to an emerging market customer.
(5) In 2019, includes an impairment of EUR 64 million related to a loan extended to a certain emerging market customer recognized upon contract exit. Other current assets 152 (81) 98 (46)
Lease liabilities 165 – 164 (3)
Defined benefit pension and other post-employment liabilities 1 023 – 1 045 (7)
Other non-current liabilities 1 – – –
Provisions 82 (87) 251 (86)
Other current liabilities 300 (55) 200 (63)
Other temporary differences 36 (14) 5 (13)
Total before netting 3 848 (2 858) 990 3 653 (2 091) 1 562
Netting of deferred tax assets and liabilities (2 576) 2 576 – (1 831) 1 831 –
Total after netting 1 272 (282) 990 1 822 (260) 1 562
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continued
Movements in the net deferred tax balance during the year: Expiry of tax losses carried forward and unused tax credits:
EURm 2021 2020 2019 2021 2020
EURm Recognized Unrecognized Total Recognized Unrecognized Total
As of 1 January 1 562 4 734 4 561
Adoption of new IFRS standards(1) – – (1) Tax losses carried forward
Recognized in income statement, continuing operations 137 (2 961) 229 Within 10 years 132 2 508 2 640 163 2 364 2 527
Recognized in income statement, discontinued operations – 1 – Thereafter – 3 3 7 – 7
Recognized in other comprehensive income (753) (115) (84) No expiry 2 172 16 882 19 054 1 810 16 657 18 467
Recognized in equity – 2 (7) Total 2 304 19 393 21 697 1 980 19 021 21 001
Acquisitions through business combinations and disposals (6) 4 – Tax credits
Translation differences 50 (103) 36 Within 10 years 32 325 357 29 326 355
As of 31 December 990 1 562 4 734 Thereafter 49 4 53 36 2 38
No expiry 177 13 190 206 13 219
(1) In 2019, adoption of IFRS 16, Leases.
Total 258 342 600 271 341 612
Amount of temporary differences, tax losses carried forward and tax credits for which no deferred tax asset was recognized due to uncertainty of
utilization: Nokia has undistributed earnings of EUR 422 million (EUR 645 million in 2020) for which a deferred tax liability has not been recognized as these
earnings will not be distributed in the foreseeable future.
EURm 2021 2020
Temporary differences 13 487 14 258 12. Earnings per share
Tax losses carried forward 19 393 19 021 2021 2020 2019
Tax credits 342 341 EURm EURm EURm
Total 33 222 33 620 Profit or loss attributable to equity holders of the parent
Continuing operations 1 632 (2 520) 14
Deferred tax assets are recognized to the extent it is probable that future taxable profit will be available against which the unused tax losses, Discontinued operations (9) (3) (7)
unused tax credits and deductible temporary differences can be utilized in the relevant jurisdictions. Profit/(loss) for the year 1 623 (2 523) 7
000s shares 000s shares 000s shares
Nokia continually evaluates the probability of utilizing its deferred tax assets and considers both positive and negative evidence in its assessment. Weighted average number of shares outstanding 5 630 025 5 612 418 5 599 912
At 31 December 2020, Nokia concluded based on its assessment that it is not probable that it will be able to utilize the unused tax losses, unused Effect of potentially dilutive shares
tax credits and deductible temporary differences in Finland in the foreseeable future. This assessment was done primarily based on the historical
Performance shares 50 300 19 780 24 072
performance. Consequently, Nokia derecognized EUR 2 918 million of deferred tax assets related to Finland.
Restricted shares and other 3 910 3 884 2 391
At 31 December 2021, Nokia continues to conclude that such utilization is not probable. When an entity has incurred losses in recent years in a Total effect of potentially dilutive shares 54 210 23 664 26 463
certain jurisdiction, additional caution should be exercised before a deferred tax asset is recognized. The entity recognizes a deferred tax asset Adjusted weighted average number of shares 5 684 235 5 636 082 5 626 375
arising from unused losses or tax credits only to the extent the entity has sufficient taxable temporary differences or there is convincing other
evidence that sufficient tax profit will be available against which the unused tax losses or unused tax credits can be utilized in the future. Positive Earnings per share EUR EUR EUR
evidence of future taxable profits may be assigned less weight in assessing the appropriateness of recording a deferred tax asset when there Basic earnings per share
is other negative evidence such as cumulative losses, which are considered strong evidence that future taxable profits may not be available. Continuing operations 0.29 (0.45) 0.00
Discontinued operations 0.00 0.00 0.00
In 2021, Nokia generated accounting and taxable profit in Finland and there were improvements in financial performance compared to the
previous periods. At 31 December 2021, Nokia does not consider that it has generated an established pattern of sufficient tax profitability
to conclude that it is probable that Nokia will be able to utilize the deferred tax assets in Finland. This conclusion is based on the weighting of Diluted earnings per share
objective negative evidence against more subjective positive evidence. The primary factors in this weighting were the more objective record Continuing operations 0.29 (0.45) 0.00
of a pattern of financial performance compared to the more inherently subjective expectations regarding future financial performance in Finland. Discontinued operations 0.00 0.00 0.00
Nokia continues to assess the realizability of deferred tax assets including in particular its actual profit record and may re-recognize deferred tax
assets related to Finland where a clear pattern of tax profitability can be established. Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the parent by the weighted average number
of shares outstanding during the year. Diluted earnings per share is calculated by adjusting the profit or loss attributable to equity holders of the
The majority of the unrecognized temporary differences, tax losses and tax credits relate to France and Finland. Based on the pattern of losses parent, and the weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares. Potential ordinary shares
in the past years in France and the lack of convincing enough evidence of sufficient taxable profit in the future years in Finland, it is uncertain are excluded from the calculation of diluted earnings per share when they are determined to be antidilutive.
whether these deferred tax assets can be utilized in the foreseeable future. A significant portion of the French unrecognized deferred tax assets
are indefinite in nature and available against future French tax liabilities, subject to a limitation of 50% of annual taxable profits. The majority In 2020, the effect of potentially dilutive shares was excluded from the calculation of diluted earnings per share as it was determined to be
of Finnish unrecognized deferred tax assets are not subject to expiry and are available against future Finnish tax liabilities. antidilutive due to the loss from continuing operations.
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continued
13. Goodwill and intangible assets 14. Property, plant and equipment
EURm Goodwill Intangible assets Total Land, buildings, Machinery, equipment Assets under
EURm constructions and vessels and other construction Total
Acquisition cost as of 1 January 2020 6 435 9 466 15 901
Translation differences (331) (359) (690) Acquisition cost as of 1 January 2020 1 267 3 018 143 4 428
Additions – 39 39 Translation differences (63) (102) (4) (169)
Acquisitions through business combinations(1) 78 72 150 Additions 36 290 123 449
Disposals and retirements – (31) (31) Acquisitions through business combinations – 2 – 2
Reclassifications 61 64 (125) –
Acquisition cost as of 31 December 2020 6 182 9 187 15 369
Disposals and retirements (36) (137) – (173)
Accumulated amortization and impairment charges as of 1 January 2020 (908) (7 037) (7 945)
Acquisition cost as of 31 December 2020 1 265 3 135 137 4 537
Translation differences – 256 256
Impairment charges (200) (9) (209) Accumulated depreciation as of 1 January 2020 (451) (2 121) – (2 572)
Disposals and retirements – 28 28 Translation differences 33 72 – 105
Amortization – (472) (472) Disposals and retirements 22 128 – 150
Depreciation (86) (351) – (437)
Accumulated amortization and impairment charges as of 31 December 2020 (1 108) (7 234) (8 342)
Accumulated depreciation as of 31 December 2020 (482) (2 272) – (2 754)
Net book value as of 1 January 2020 5 527 2 429 7 956
Net book value as of 31 December 2020 5 074 1 953 7 027 Net book value as of 1 January 2020 816 897 143 1 856
Net book value as of 31 December 2020 783 863 137 1 783
Translation differences 307 325 632 Acquisition cost as of 1 January 2021 1 265 3 135 137 4 537
Additions – 15 15 Translation differences 53 88 7 148
Acquisitions through business combinations(1) 63 24 87 Additions 27 333 214 574
Disposals and retirements – (52) (52) Reclassifications 28 41 (69) –
Disposals and retirements (145) (226) (9) (380)
Acquisition cost as of 31 December 2021 1 228 3 371 280 4 879
Accumulated amortization and impairment charges as of 1 January 2021 (1 108) (7 234) (8 342)
Translation differences (13) (243) (256) Accumulated depreciation as of 1 January 2021 (482) (2 272) – (2 754)
Disposals and retirements – 47 47 Translation differences (26) (59) – (85)
Amortization – (449) (449) Impairment charges (14) – – (14)
Disposals and retirements 114 216 – 330
Accumulated amortization and impairment charges as of 31 December 2021 (1 121) (7 879) (9 000)
Depreciation (87) (345) – (432)
Net book value as of 1 January 2021 5 074 1 953 7 027
Accumulated depreciation as of 31 December 2021 (495) (2 460) – (2 955)
Net book value as of 31 December 2021 5 431 1 620 7 051
Net book value as of 1 January 2021 783 863 137 1 783
(1) In 2021, Nokia acquired 100% ownership interest in Zyzyx. In 2020, Nokia acquired 100% ownership interest in Elenion Technologies. Goodwill of these acquisitions was allocated to the
Net book value as of 31 December 2021 733 911 280 1 924
Network Infrastructure operating segment.
Net book value of intangible assets by type of asset(1):

EURm 2021 2020
Customer relationships 1 178 1 401
Patents and licenses 183 232
Technologies and IPR&D 133 155
Tradenames and trademarks 47 90
Other 79 75
Total 1 620 1 953
(1) The largest movements are due to amortization and translation differences, with the exception of Technologies and IPR&D, which includes the acquired technology EUR 24 million in 2021
(EUR 72 million in 2020).
As of 31 December 2021, the weighted average for the remaining amortization periods is approximately four years for customer relationships,
five years for patents and licenses, three years for technologies and IPR&D, one year for tradenames and trademarks and three years for others.
154 174 NOKIA IN 2021 NOKIA IN 2021 175 155

continued
15. Leases 16. Impairment

Right-of-use assets Goodwill
Right-of-use assets represent Nokia’s right to use the underlying leased assets. Nokia has allocated goodwill to the operating segments corresponding to groups of cash-generating units (CGUs) that are expected to benefit
from goodwill in line with Nokia’s operational and reporting structure. Refer to Note 5, Segment information.
EURm Buildings Other Total
Acquisition cost as of 1 January 2020 1 048 121 1 169 Allocation of goodwill
Net additions(1) 89 59 148 The following table presents the allocation of goodwill to groups of CGUs as of 31 December(1):
Retirements (31) – (31)
EURm Carrying amount
Accumulated depreciation as of 1 January 2020 (209) (48) (257) Mobile Networks 2 191
Impairment charges (32) – (32) Network Infrastructure 2 690
Retirements 31 – 31 Cloud and Network Services 550
Depreciation (176) (47) (223) 2020
Accumulated depreciation as of 31 December 2020 (386) (95) (481) Mobile Networks 729
Net book value as of 1 January 2020 839 73 912 Fixed Networks 609
Net book value as of 31 December 2020 720 85 805 Global Services 958
Acquisition cost as of 1 January 2021 1 106 180 1 286 IP/Optical Networks 1 865
Translation differences 47 3 50 Nokia Software 914
Net additions(1) 209 76 285
(1) Nokia adopted its current operational and reporting structure on 1 January 2021. Goodwill was reallocated to current groups of CGUs based on relative fair value.
Retirements (44) (36) (80)
Acquisition cost as of 31 December 2021 1 318 223 1 541 Recoverable amounts
Accumulated depreciation as of 1 January 2021 (386) (95) (481) The recoverable amounts of the groups of CGUs were based on fair value less costs of disposal that was determined using a level 3 fair value
Translation differences (15) (2) (17) measurement based on a discounted cash flow calculation. The cash flow projections used in calculating the recoverable amounts were based
Impairment charges (25) – (25) on financial plans approved by management covering an explicit forecast period of three years.
Retirements 44 36 80 Seven additional years of cash flow projections subsequent to the explicit forecast period of three years reflect a gradual progression towards
Depreciation (151) (63) (214) the steady state cash flow projections modeled in the terminal year. The terminal growth rate assumptions reflect long-term average growth
Accumulated depreciation as of 31 December 2021 (533) (124) (657) rates for the industries and economies in which the groups of CGUs operate. The discount rates reflect current assessments of the time value
Net book value as of 1 January 2021 720 85 805 of money and relevant market risk premiums reflecting risks and uncertainties for which the future cash flow estimates have not been adjusted.
785 99 884 Other key variables in future cash flow projections include assumptions on estimated sales growth, gross margin and operating margin. All cash
Net book value as of 31 December 2021
flow projections are consistent with market participant assumptions.
(1) Net additions comprise new lease contracts as well as modifications and remeasurements of existing lease contracts.
Terminal growth rate and post-tax discount rate applied in the impairment test for the groups of CGUs:
Amounts recognized in the income statement
Key assumption % Terminal growth rate Post-tax discount rate
EURm 2021 2020 2019
2021
Depreciation expense of right-of-use assets (214) (223) (225)
Mobile Networks 1.2 7.7
Expenses relating to short-term leases (13) (22) (26)
Network Infrastructure 1.4 7.7
Interest expense on lease liabilities (24) (25) (28)
Cloud and Network Services 1.6 6.9
Income from subleasing leasehold and freehold properties(1) 8 4 9
2020
Gains arising from sale and leaseback transactions 15 – 9
Mobile Networks 1.2 8.0
Total(2) (228) (266) (261)
Fixed Networks 0.8 7.4
(1) Sublease income comprises rent income from operating subleases and financial income on the net investment in the lease related to finance subleases. Global Services 1.1 7.6
(2) Total recognized in the income statement excludes impairment of right-of-use assets, which is presented in Note 16, Impairment, and deferred taxes discussed in Note 11, Income taxes.
IP/Optical Networks 1.4 7.9
Nokia Software 1.5 7.0
Amounts reported in the statement of cash flows
EURm 2021 2020 2019 The results of the impairment testing indicate adequate headroom for each group of CGUs in 2021.
Payment of principal portion of lease liabilities (226) (234) (221)
Interest portion of lease liabilities (24) (25) (28)
Total (250) (259) (249)
The maturity analysis of lease liabilities is presented in Note 34, Financial risk management. Commitments related to future lease contracts are
presented in Note 28, Commitments, contingencies and legal proceedings.
156 176 NOKIA IN 2021 NOKIA IN 2021 177 157

continued
Impairment charges by asset category 19. Equity

EURm 2021 2020 2019
Shares and share capital
Goodwill – 200 – Share capital
Intangible assets – 9 12 Nokia Corporation has one class of shares. Each share entitles the holder to one vote at general meetings. The shares have no par value nor is
Property, plant and equipment 14 – 4 there a minimum or maximum share capital or number of shares under the Articles of Association of Nokia Corporation. As of 31 December 2021,
Right-of-use assets(1) 25 32 20 the share capital amounted to EUR 245 896 461.96 (EUR 245 896 461.96 in 2020) and consisted of 5 675 461 159 (5 653 886 159 in 2020)
Investments in associated companies and joint ventures – 4 2 issued and fully paid shares.
Total 39 245 38
Share premium
(1) Nokia adopted IFRS 16, Leases, on 1 January 2019. In 2019, a EUR 20 million impairment charge is presented net of onerous lease contract provision releases. Share premium reserve consists of the share premium account of the Parent Company. In addition, the equity impact corresponding to the
employee services received related to the equity-settled share-based compensation plans is recorded in the share premium reserve.
Based on the long-range plan prepared in the fourth quarter of 2020, Nokia conducted an impairment test and concluded that the carrying
amount exceeded the recoverable amount for its Fixed Networks group of CGUs. As a result, Nokia recorded a non-cash impairment charge Treasury shares
of EUR 200 million within other operating expenses to reduce the goodwill within its Fixed Networks operating segment. As of 31 December 2021, the number of Nokia shares held by the Group companies was 40 467 555 (36 389 799 in 2020) representing 0.7%
(0.6% in 2020) of the share capital and total voting rights.
Other impairments recorded by Nokia in 2021, 2020 and 2019 are immaterial.
In 2021, under the authorization held by the Board of Directors, Nokia Corporation issued 21 575 000 new shares to itself to fulfill the company’s
17. Inventories obligation under the Nokia Equity Programs and 17 497 244 treasury shares to employees, including certain members of the Group Leadership
EURm 2021 2020 Team, as settlement under Nokia’s equity-based incentive plans and the employee share purchase plan. The shares were issued without
Raw materials and semi-finished goods 673 552 consideration.
Finished goods 1 039 940 Reconciliation of the number of shares outstanding at the beginning and at the end of the period:
Contract work in progress 680 750
Number of shares 000s 2021 2020 2019
Total 2 392 2 242
As of 1 January 5 617 496 5 605 581 5 593 162
Settlement of share-based payments 17 497 11 915 12 396
The cost of inventories recognized as an expense during the year and included in the cost of sales is EUR 6 427 million (EUR 6 115 million in 2020
and EUR 8 181 million in 2019). Stock options exercised – – 23
As of 31 December 5 634 993 5 617 496 5 605 581
Movements in allowances for excess and obsolete inventory for the years ended 31 December:
EURm 2021 2020 2019 Authorizations given to the Board of Directors related to issue and repurchase of shares
As of 1 January 480 505 521 Authorization to issue shares and special rights entitling to shares
Charged to income statement 49 71 83 At the Annual General Meeting held on 8 April 2021, the shareholders authorized the Board of Directors to issue a maximum of 550 million shares
Deductions(1) (71) (96) (99) through one or more issues of shares or special rights entitling to shares. The Board of Directors is authorized to issue either new shares or
As of 31 December 458 480 505 shares held by Nokia. The authorization included the right for the Board of Directors to resolve on all the terms and conditions of such share
and special rights issuances, including issuance in deviation from the shareholders’ pre-emptive rights. The authorization may be used to develop
(1) Deductions include utilization and releases of allowances. Nokia’s capital structure, diversify the shareholder base, finance or carry out acquisitions or other arrangements, settle Nokia’s equity-based
incentive plans, or for other purposes resolved by the Board of Directors. The authorization is effective until 7 October 2022, and terminated the
18. Other receivables previous authorizations to issue shares and special rights entitling to shares.
Non-current Authorization to repurchase shares
EURm 2021 2020 At the Annual General Meeting held on 8 April 2021, the shareholders authorized the Board of Directors to repurchase a maximum of 550 million
R&D tax credits and other indirect tax receivables 148 129 shares. The amount corresponds to less than 10% of the total number of Nokia’s shares. Shares may be repurchased to be cancelled, held to be
reissued, transferred further or for other purposes resolved by the Board. The shares may be repurchased otherwise than in proportion to the
Deposits 47 47
shares held by the shareholders. The price paid for the shares under the authorization shall be based on the market price of Nokia shares on
Other 60 41
the securities markets on the date of the repurchase. The Board shall resolve on all other matters related to the repurchase of Nokia shares.
Total 255 217 The authorization is effective until 7 October 2022, and terminated the previous authorization to repurchase shares.
Current Distribution of funds

Nokia distributes funds to its shareholders in two ways: a) as dividends from retained earnings and/or as equity repayment from the reserve of
EURm 2021 2020 invested unrestricted equity, and b) by repurchasing its own shares using funds in the unrestricted equity. The dividend and/or equity repayment
R&D tax credits, VAT and other indirect tax receivables 480 483 is distributed in quarterly instalments subject to the Board of Directors’ resolution as authorized by the Annual General Meeting (AGM). The amount of
Divestment-related receivables 23 23 any distribution is limited to the amount of distributable earnings of the Parent Company, and subject to exceptions relating to the right of minority
Deposits 22 19 shareholders to request a certain minimum distribution, the distribution may not exceed the amount proposed by the Board of Directors.
Other 334 325
Nokia’s Board of Directors proposes that the AGM in 2022 authorizes the Board to decide in its discretion on the distribution of an aggregate
Total 859 850 maximum of EUR 0.08 per share as dividend and/or as assets from the reserve of invested unrestricted equity. On the date of issuing the financial
statements for 2021 the total number of Nokia shares is 5 696 261 159 and consequently the total amount of distribution would be EUR 456 million.
Total number of shares includes shares held by the Group companies which are not entitled to distribution. The AGMs in 2021 and 2020 resolved
that no dividend is distributed for the financial years 2020 and 2019, respectively. In 2019, Nokia paid a total dividend of EUR 560 million,
corresponding to EUR 0.10 per share, to its shareholders related to the financial year 2018.
Nokia’s Board of Directors has also initiated a share buyback program under the current authorization from the AGM to repurchase shares. The
program targets to return up to EUR 600 million of cash to shareholders in tranches over a period of two years, subject to continued authorization
from the AGM. The aggregate purchase price of all shares to be acquired in the first tranche, which began in February 2022 and which is expected
to end in December 2022, shall not exceed EUR 300 million. The maximum number of shares that can be repurchased under the first phase of the
program is 275 000 000 shares corresponding to approximately 5% of the total number of shares in Nokia. The repurchased shares will be cancelled.
Nokia has appointed a third-party broker as the lead-manager for the first phase of the buyback program. The lead-manager will make trading
decisions independently of and without influence from Nokia. Nokia may terminate the program prior to its scheduled end date.
158 178 NOKIA IN 2021 NOKIA IN 2021 179 159

continued
Nature and purpose of other equity reserves Changes in other comprehensive income by component of equity
Translation differences Fair value and other reserves
Translation differences consist of foreign exchange differences arising from translation of foreign operations into euro, the presentation currency Translation Pension Hedging Cost of hedging Fair value
of the consolidated financial statements as well as gains and losses related to hedging of net investments in foreign operations. EURm differences remeasurements reserve reserve reserve
As of 1 January 2019 (592) 1 137 (21) 8 (61)
Fair value and other reserves Foreign exchange translation differences 259 – – – –
Pension remeasurements
Net investment hedging losses (40) – – (6) –
Pension remeasurements reserve includes actuarial gains and losses as well as return on plan assets and changes in the effect of the asset ceiling,
Remeasurements of defined benefit plans – 319 – – –
excluding amounts recognized in net interest, related to Nokia’s defined benefit plans.
Net fair value losses – – (17) (34) (101)
Hedging reserve Transfer to income statement 1 – 32 18 107
Hedging reserve includes the change in fair value that reflects the change in spot exchange rates for certain foreign exchange forward contracts Other increase – 1 – – –
that are designated as cash flow hedges to the extent that the hedge is effective. (372) 1 457 (6) (14) (55)
As of 31 December 2019
Cost of hedging reserve Foreign exchange translation differences (1 231) – – – –
Cost of hedging reserve includes forward element of foreign exchange forward contracts and the time value of foreign exchange options related Net investment hedging gains 307 – – 1 –
to cash flow hedging of forecasted foreign currency sale and purchase transactions. Additionally, cost of hedging reserve includes the difference Remeasurements of defined benefit plans – 484 – – –
between the change in fair value of forward element of foreign exchange forward contracts and the time value of option contracts and the Net fair value gains/(losses) – – 13 (13) (175)
amortization of forward element of foreign exchange forward contracts and time value of option contracts related to net investment hedging.
Transfer to income statement – – (5) 16 208
Cost of hedging reserve also includes changes in fair value from foreign currency basis spread related to fair value hedging of foreign currency
Other decrease (1) – – – –
denominated bonds.
Movement attributable to non-controlling interests 2 (1) – – –
Fair value reserve As of 31 December 2020 (1 295) 1 940 2 (10) (22)
Fair value reserve includes the changes in fair value of financial instruments that are managed in a portfolio with a business model of holding Foreign exchange translation differences 1 162 – – – –
financial instruments to collect contractual cash flows including principal and interest as well as selling financial instruments. The fair values
Net investment hedging losses (249) – – – –
recorded in fair value reserve for these instruments are reduced by amounts of loss allowances.
Remeasurements of defined benefit plans – 2 302 – – –
Reserve for invested unrestricted equity Net fair value (losses)/gains – – (15) 5 (25)
The reserve for invested unrestricted equity includes that part of the subscription price of issued shares that according to the share issue Transfer to income statement (7) – 6 4 32
decision is not to be recorded to the share capital as well as other equity inputs that are not recorded to some other reserve. The amounts Movement attributable to non-controlling interests (7) – – – –
received for treasury shares are recorded to the reserve for invested unrestricted equity, unless it is provided in the share issue decision that As of 31 December 2021(1) (396) 4 242 (7) (1) (15)
it is to be recorded in full or in part to the share capital.
(1) In 2021, translation differences includes EUR 226 million (EUR 475 million in 2020 and EUR 168 million in 2019) of gains related to net investment hedging.
Other equity
Accumulated deficit Capital management
Accumulated deficit is the net total of previous years’ profits and losses less dividends paid to the shareholders. For capital management purposes Nokia defines capital as total equity and interest-bearing liabilities less cash and cash equivalents and current
financial investments. The main objectives of Nokia's capital management are to maintain a solid overall financial position and to ensure sufficient
Non-controlling interests financial flexibility to execute Nokia’s long-term business strategy and to provide returns to shareholders. From a liquidity perspective, Nokia
Non-controlling interests represent the share of net assets of certain subsidiaries attributable to their minority shareholders. For more intends to maintain a level of cash and cash equivalents and current financial investments at 30% or more of annual net sales. Nokia targets
information on the contractual arrangement related to the ownership interests in the Nokia Shanghai Bell Group, refer to Note 31, investment grade credit ratings with the long-term credit ratings being BBB- (stable) by Fitch, Ba2 (positive) by Moody’s, and BB+ (stable) by S&P
Significant partly-owned subsidiaries. Global Ratings as of 31 December 2021. With regards to shareholder remuneration, Nokia targets recurring, stable and over time growing ordinary
dividend payments, taking into account the previous year’s earnings as well as the company’s financial position and business outlook. Nokia is also
using share repurchases as a tool to manage its capital structure through the reduction of capital and distribute excess cash to the shareholders.
160 180 NOKIA IN 2021 NOKIA IN 2021 181 161

continued
Nokia’s significant credit facilities and funding programs as of 31 December:

20. Other comprehensive income
2021 2020 2019 Utilized (million)
EURm Gross Tax Net Gross Tax Net Gross Tax Net Committed / uncommitted Financing arrangement Currency Nominal (million) 2021 2020
Pension remeasurements(1) Committed Revolving Credit Facility(1) EUR 1 500 – –

Remeasurements of defined benefit plans 3 040 (755) 2 285 624 (140) 484 414 (95) 319 Uncommitted Finnish Commercial Paper Programme EUR 750 – –
Net change during the year 3 040 (755) 2 285 624 (140) 484 414 (95) 319 Uncommitted Euro-Commercial Paper Programme EUR 1 500 – –
Translation differences Uncommitted Euro Medium Term Note Programme(2) EUR 5 000 2 500 2 850
Exchange differences on translating foreign Total 2 500 2 850
operations 1 160 2 1 162 (1 232) 1 (1 231) 259 – 259 (1) Nokia exercised its option to extend the maturity date of the Revolving Credit Facility in June 2021. Subsequent to the extension, the facility has its maturity in June 2026, except for
Transfer to income statement (7) – (7) – – – 1 – 1 EUR 88 million having its maturity in June 2024.
(2) All euro-denominated bonds have been issued under the Euro Medium Term Note Programme.
Net change during the year 1 153 2 1 155 (1 232) 1 (1 231) 260 – 260
Net investment hedges(2)
All borrowings and credit facilities presented in the tables above are senior unsecured and have no financial covenants.
Net investment hedging (losses)/gains (249) – (249) 266 42 308 (58) 12 (46)
Net change during the year (249) – (249) 266 42 308 (58) 12 (46) To manage interest rate and foreign exchange risks related to Nokia’s interest-bearing liabilities, Nokia has designated the following cross-
Cash flow and other hedges(3) currency swaps as hedges under both fair value hedge accounting and cash flow hedge accounting, and interest rate swaps as hedges under fair
Net fair value (losses)/gains (10) – (10) 1 (1) – (64) 13 (51) value hedge accounting as of 31 December:
Transfer to income statement 10 – 10 14 (3) 11 62 (12) 50
Notional (million) Fair value EURm
Net change during the year – – – 15 (4) 11 (2) 1 (1) Entity Instrument(1) Currency Maturity 2021 2020 2021 2020
Financial assets at fair value through other Nokia Corporation Cross-currency swaps USD June 2022 – 500 – (48)
comprehensive income Nokia Corporation Interest rate swaps EUR March 2024 185 – – –
Net fair value (losses)/gains (25) – (25) (213) 38 (175) (126) 25 (101) Nokia Corporation Cross-currency swaps USD June 2027 500 250 (7) (28)
Transfer to income statement on loss allowance 19 – 19 229 (46) 183 40 (8) 32 Nokia Corporation Cross-currency swaps USD May 2039 300 250 (46) (78)
Transfer to income statement on disposal 13 – 13 31 (6) 25 94 (19) 75 Total (53) (154)
Net change during the year 7 – 7 47 (14) 33 8 (2) 6
(1) All cross-currency swaps and interest rate swaps are fixed-to-floating swaps.
Other increase – – – 3 – 3 – – –
Total 3 951 (753) 3 198 (277) (115) (392) 622 (84) 538 Changes in lease liabilities, interest-bearing liabilities and associated derivatives arising from financing activities:
(1) In 2021, remeasurement of defined benefit plans includes the impact of the modification of the terms of the US defined benefit pension plans. For more information, refer to Note 25, Long-term Short-term Derivatives held to
Pensions and other post-employment benefits. interest-bearing interest-bearing hedge long-term
(2) In 2020, income tax related to net investment hedging gains includes EUR 94 million related to the derecognition of deferred tax assets in Finland. For more information, refer to Note 11, EURm liabilities liabilities borrowings(1) Lease liabilities(2) Total
Income taxes.
As of 1 January 2020 3 985 292 50 1 030 5 357
(3) Includes movements in cash flow hedging reserve and related cost of hedging reserve.
Cash flows 1 401 (83) (52) (234) 1 032
21. Interest-bearing liabilities Non-cash changes:
Carrying amount EURm(1)
Acquisitions through business combinations 10 30 – – 40
Issuer/borrower Instrument Currency Nominal (million) Final maturity 2021 2020 Changes in foreign exchange rates (133) (7) 123 (37) (54)
Nokia Corporation 1.00% Senior Notes(2) EUR 350 March 2021 – 350 Changes in fair value 102 – (102) – –
Nokia Corporation 3.375% Senior Notes(3) USD 500 June 2022 – 417 Reclassification between long-term and short-term (350) 350 – – –
Nokia Corporation 2.00% Senior Notes EUR 750 March 2024 759 762 Net additions(3) – – – 147 147
Nokia Corporation EIB R&D Loan EUR 500 February 2025 500 500 Other(4) – (21) 135 4 118
Nokia Corporation NIB R&D Loan(4) EUR 250 May 2025 250 250 As of 31 December 2020 5 015 561 154 910 6 640
Nokia Corporation 2.375% Senior Notes EUR 500 May 2025 497 497 Cash flows (923) (67) 13 (226) (1 203)
Nokia Corporation 2.00% Senior Notes EUR 750 March 2026 760 762 Non-cash changes:
Nokia Corporation 4.375% Senior Notes USD 500 June 2027 464 448 Changes in foreign exchange rates 122 2 (104) 36 56
Nokia of America Corporation 6.50% Senior Notes USD 74 January 2028 66 61 Changes in fair value (53) – (10) – (63)
Nokia Corporation 3.125% Senior Notes EUR 500 May 2028 497 497 Reclassification between long-term and short-term 380 (380) – – –
Nokia of America Corporation 6.45% Senior Notes USD 206 March 2029 183 169 Net additions(3) – – – 296 296
Nokia Corporation 6.625% Senior Notes USD 500 May 2039 553 541 Other (4) – – (7) (11)
Nokia Corporation and various As of 31 December 2021 4 537 116 53 1 009 5 715
subsidiaries Other liabilities 124 322
(1) Includes derivatives designated in fair value and cash flow hedge accounting relationships as well as derivatives not designated in hedge accounting relationship but hedging identifiable
Total 4 653 5 576 long-term borrowing exposure.
(2) Includes non-current and current lease liabilities.
(1) Carrying amount includes EUR 166 million (EUR 224 million in 2020) of fair value gains related to fair value hedge accounting relationships, out of which EUR 203 million (EUR 235 million
(3) Net additions comprise new lease contracts as well as modifications and remeasurements of existing lease contracts.
in 2020) are fair value gains related to discontinued fair value hedge accounting relationships that are amortized over the life of the respective Senior Notes.
(4) In 2020, includes EUR 135 million cash inflow from settlements of certain interest rate derivatives held to hedge long-term borrowings that is included in operating activities as interest paid
(2) In January 2021, Nokia exercised its issuer call option to redeem 1.00% Senior Notes due March 2021 for the full amount of EUR 350 million. The redemption date for the notes was
in the consolidated statement of cash flows.
15 February 2021.
(3) In December 2021, Nokia exercised its issuer call option to redeem 3.375% Senior Notes due June 2022 for the full amount of USD 500 million. The redemption date for the notes was
16 December 2021.
(4) The loan from the Nordic Investment Bank (NIB) is repayable in three equal annual instalments in 2023, 2024 and 2025.
162 182 NOKIA IN 2021 NOKIA IN 2021 183 163

continued
The level 2 category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported
22. Fair value of financial instruments by prices from observable current market transactions. These include assets and liabilities with fair values based on publicly available market
Financial assets and liabilities recorded at fair value are categorized based on the amount of unobservable inputs used to measure their fair value. information, financial assets with fair values based on broker quotes and assets that are valued using Nokia’s own valuation models whereby
Three hierarchical levels are based on an increasing amount of judgment associated with the inputs used to derive fair valuation for these assets the material assumptions are market observable. The majority of Nokia’s cash equivalents, current investments, over-the-counter derivatives,
and liabilities, level 1 being market values for exchange traded products, level 2 being primarily based on publicly available market information, trade receivables and certain other products are included within this category.
and level 3 requiring most management judgment. At the end of each reporting period, Nokia categorizes its financial assets and liabilities to
the appropriate level of fair value hierarchy. Items carried at fair value in the following table are measured at fair value on a recurring basis. The level 3 financial assets category includes a large number of investments in unlisted equities and unlisted venture funds, including investments
managed by NGP Capital specializing in growth-stage investing. The fair value of level 3 investments is determined using one or more valuation
Carrying amounts Fair value(1)
Fair value through Fair value through other
techniques where the use of the market approach generally consists of using comparable market transactions, while the use of the income
Amortized profit or loss comprehensive income approach generally consists of calculating the net present value of expected future cash flows. For unlisted funds, the selection of appropriate
EURm cost Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Total Total valuation techniques by the fund managing partner may be affected by the availability and reliability of relevant inputs. In some cases, one
2021 valuation technique may provide the best indication of fair value while in other circumstances multiple valuation techniques may be appropriate.
Non-current financial investments – 8 – 750 – – – 758 758
The inputs generally considered in determining the fair value of level 3 investments include the original transaction price, recent transactions in
Other non-current financial assets 130 – 101 – – 94 – 325 325 the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers, subsequent
Other current financial assets rounds of financing, recapitalizations or other transactions undertaken by the issuer, offerings in the equity or debt capital markets, and changes
including derivatives 115 – 200 – – 21 – 336 336 in financial ratios or cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. The fair value may be adjusted
Trade receivables – – – – – 5 382 – 5 382 5 382 to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the managing partner in the absence of
Current financial investments 526 – 2 051 – – – – 2 577 2 577 market information.
Cash and cash equivalents 4 627 – 2 064 – – – – 6 691 6 691
The level 3 investments are remeasured for each reporting date taking into consideration any changes in estimates, projections and assumptions,
Total financial assets 5 398 8 4 416 750 – 5 497 – 16 069 16 069 as well as any changes in economic and other relevant conditions. Level 3 investments include approximately 40 separate venture funds investing
Long-term interest-bearing liabilities 4 537 – – – – – – 4 537 4 775 in hundreds of individual companies in various sectors and geographies, focusing on digital health, software and enterprise sectors. Hence,
Other long-term financial liabilities – – – 68 – – – 68 68 specific estimates and assumptions used by managing partners due to the lack of observable inputs do impact the fair value of individual
Short-term interest-bearing liabilities 116 – – – – – – 116 116 investments, but no individual input has a significant impact on the aggregated fair value of level 3 investments.
Other short-term financial liabilities
Level 3 financial liabilities include a conditional obligation to China Huaxin as part of the Nokia Shanghai Bell definitive agreements where China
including derivatives – – 240 522 – – – 762 762
Huaxin obtained the right to fully transfer its ownership interest in Nokia Shanghai Bell to the Group in exchange for a future cash settlement.
Discounts without performance obligations 479 – – – – – – 479 479 The fair value of the liability is measured based on the expected future cash settlement. The measurement of the financial liability involves
Trade payables 3 679 – – – – – – 3 679 3 679 estimation of the option exercise price and the distribution of excess cash balances upon exercise. Unobservable valuation inputs include certain
Total financial liabilities 8 811 – 240 590 – – – 9 641 9 879 financial performance metrics of Nokia Shanghai Bell. No individual input has a significant impact on the total fair value of the level 3 financial
liability. Refer to Note 31, Significant partly-owned subsidiaries.
Carrying amounts Fair value(1)
Fair value through Fair value through other Reconciliation of the opening and closing balances of level 3 financial assets and liabilities:
Amortized profit or loss comprehensive income
EURm cost Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Total Total Level 3 financial Level 3 financial
EURm assets liabilities
2020
As of 1 January 2020 746 (659)
Non-current financial investments – 31 – 714 – – – 745 745
Other non-current financial assets 115 – 99 5 – 87 – 306 306 Net gains in income statement 19 94
Other current financial assets including Additions(1) 49 –
derivatives 22 – 169 8 – 15 – 214 214 Deductions(1) (85) 2
Trade receivables – – – – – 5 503 – 5 503 5 503 Transfers out of level 3 (5) 126
Current financial investments 134 – 882 – – 105 – 1 121 1 121 Other movements 3 (2)
Cash and cash equivalents 4 333 – 2 607 – – – – 6 940 6 940 As of 31 December 2020 727 (439)
Total financial assets 4 604 31 3 757 727 – 5 710 – 14 829 14 829 Net gains/(losses) in income statement 177 (107)
Long-term interest-bearing liabilities 5 015 – – – – – – 5 015 5 140 Acquisitions through business combination – (48)
Other long-term financial liabilities – – – 19 – – – 19 19 Additions(1) 69 –
Short-term interest-bearing liabilities 561 – – – – – – 561 561 Deductions(1) (218) 7
Other short-term financial liabilities Transfers out of level 3 (7) –
including derivatives – – 318 420 – – – 738 738 Other movements 2 (3)
Discounts without performance obligations(2) 747 – – – – – – 747 747 As of 31 December 2021 750 (590)
Trade payables 3 174 – – – – – – 3 174 3 174 (1) For level 3 financial assets, additions mainly include capital contributions to venture funds and deductions mainly include distributions from venture funds.
Total financial liabilities 9 497 – 318 439 – – – 10 254 10 379
The gains and losses from venture fund and similar investments categorized in level 3 are included in other operating income and expenses. The
(1) The following fair value measurement methods are used for items not carried at fair value: The fair values of long-term interest-bearing liabilities, including current part, are primarily based
on publicly available market information (level 2). The fair values of other assets and liabilities, including loan receivables and loans payable, are primarily based on discounted cash flow
gains and losses from other level 3 financial assets and liabilities are recorded in financial income and expenses. A net gain of EUR 85 million (net
analysis (level 2). The fair value is estimated to equal the carrying amount for short-term financial assets and financial liabilities due to limited credit risk and short time to maturity. Refer to gain of EUR 102 million in 2020) related to level 3 financial instruments held at 31 December 2021 was included in the profit and loss during 2021.
Note 2, Significant accounting policies.
(2) In 2021, Nokia has revised the classification of discounts without performance obligations and included this financial liability in the table. The comparative amounts for 2020 have been
adjusted accordingly.
Lease liabilities are not included in the fair value of financial instruments.
The level 1 category includes financial assets and liabilities that are measured in whole by reference to published quotes in an active market.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, and those
prices represent actual and regularly occurring market transactions on an arm’s-length basis. This category includes only exchange traded products.
164 184 NOKIA IN 2021 NOKIA IN 2021 185 165

continued
23. Derivative financial instruments 24. Share-based payments

Assets Liabilities Nokia has several equity-based incentive programs for executives and other eligible employees for the purposes of retention and recruitment.
EURm Fair value(1) Notional(2) Fair value(1) Notional(2) Under the programs, employees may be granted performance shares or restricted shares, or be invited to purchase Nokia shares and receive
2021 matching shares under Nokia’s voluntary all-employee share purchase program. Starting in 2021, Nokia granted restricted shares to selected
Hedges on net investment in foreign subsidiaries employees as the primary method of equity compensation whereas grants under performance share plans were targeted on a more limited basis
Foreign exchange forward contracts 1 1 568 (11) 1 394 to senior level employees and executives. The equity-based incentive grants are expected to be settled with equity, and are generally conditional
Cash flow hedges on continued employment as well as the fulfillment of any performance conditions specified in the award terms. In 2021, the share-based
Foreign exchange forward contracts 28 1 521 (47) 1 571 payment expense, including social security costs, for all equity-based incentive grants in the consolidated income statement amounts to
Currency options bought – 7 – – EUR 118 million (EUR 76 million in 2020 and EUR 77 million in 2019). All amounts relate to equity-settled awards.
Fair value hedges Active share-based payment plans by instrument
Interest rate swaps – 185 – –
Performance shares Restricted shares
Foreign exchange forward contracts 22 577 (80) 2 182 Number of Weighted Weighted
Firm commitments 58 2 069 (11) 397 performance shares average grant Number of average grant
outstanding at date fair value restricted shares date fair value
Cash flow and fair value hedges(3) target EUR(1) outstanding EUR(1)
Cross-currency swaps 15 265 (68) 441 As of 1 January 2019 83 143 531 3 582 048
Derivatives not designated in hedge accounting relationships carried at fair value Granted 31 979 747 4.02 2 060 342 4.18
through profit and loss Forfeited (4 964 055) (451 540)
Foreign exchange forward contracts 74 6 432 (23) 6 390 Vested(2) (18 933 700) (1 915 675)
Currency options bought – 10 – – As of 31 December 2019 91 225 523 3 275 175
Other derivatives 2 25 – –
Granted 38 753 394 2.63 3 830 700 3.06
Total 200 12 659 (240) 12 375
Forfeited (4 752 172) (1 100 107)
2020 Vested(2) (25 754 552) (1 478 175)
Hedges on net investment in foreign subsidiaries As of 31 December 2020 99 472 193 4 527 593
Foreign exchange forward contracts 1 1 423 (3) 559
Granted 17 749 650 5.11 25 046 200 5.05
Cash flow hedges
Forfeited (5 783 031) (783 950)
Foreign exchange forward contracts 34 933 (16) 736
Vested(2) (31 611 804) (2 026 150)
Currency options bought 1 108 – –
As of 31 December 2021(3) 79 827 008 26 763 693
Currency options sold – – – 6
Fair value hedges (1) The fair value for the 2019 performance shares and all restricted shares are estimated based on the grant date market price of the Nokia share less the present value of dividends expected to
be paid during the vesting period. The fair value for the 2020 and 2021 performance shares is estimated based on the dividend-adjusted price of the Nokia share at the settlement date of
Foreign exchange forward contracts 83 1 340 (14) 588 the plan and the target payout levels.
Firm commitments 19 468 (101) 1 105 (2) Vested performance shares at target are multiplied by the confirmed payout (% of target) to calculate the total number of Nokia shares settlement.
(3) Includes 26 267 664 performance shares for the Performance Share Plan 2019 and 401 514 Restricted Shares that vested on 1 January 2022.
Cash flow and fair value hedges(3)
Cross-currency swaps – – (154) 815
Derivatives not designated in hedge accounting relationships carried at fair value
through profit and loss
Foreign exchange forward contracts 29 3 716 (16) 3 917
Currency options bought 2 171 – –
Other derivatives – – – 9
Total 169 8 159 (304) 7 735
(1) Included in other current financial assets and other financial liabilities in the consolidated statement of financial position.
(2) Includes the gross amount of all notional values for contracts that have not yet been settled or cancelled. The amount of notional value outstanding is not necessarily a measure or indication
of market risk as the exposure of certain contracts may be offset by that of other contracts.
(3) Cross-currency swaps have been designated partly as fair value hedges and partly as cash flow hedges.
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continued
Performance shares 25. Pensions and other post-employment benefits

In 2021, Nokia administered four global performance share plans, the Performance Share Plans of 2018, 2019, 2020 and 2021. The performance
shares represent a commitment by Nokia to deliver Nokia shares to eligible participants at a future point in time, subject to the fulfillment of Nokia maintains a number of post-employment plans in various countries including both defined benefit and defined contribution plans. Nokia’s
predetermined criteria. Performance shares are granted on a limited basis for purposes related to retention and recruitment of individuals defined benefit plans comprise significant pension programs and schemes as well as material other post-employment benefit plans providing
deemed critical to Nokia's future success. Until the Nokia shares are delivered, the participants do not have any shareholder rights, such as voting post-employment healthcare and life insurance coverage to certain employee groups. Defined benefit plans expose Nokia to various risks such as
or dividend rights, associated with the performance shares. The performance share grants are generally forfeited if the employment relationship investment risk, interest rate risk, life expectancy risk, and regulatory/compliance risk. The characteristics and extent of these risks vary depending
with Nokia terminates prior to vesting. on the legal, fiscal, and economic requirements in each country. In 2021, the amount recognized in the consolidated income statement related to
defined benefit plans was EUR 157 million (EUR 153 million in 2020 and EUR 31 million in 2019).
The 2020 and 2021 Performance Share Plans are three-year plans where Nokia’s actual total shareholder return (“TSR”) is compared to the target
TSR to determine the number of Nokia shares that will be delivered at settlement. TSR is calculated based on the growth in the Nokia share price Nokia also participates in defined contribution plans, multi-employer and insured plans for which Nokia contributions are recognized as expense
plus any dividends paid during the plan period. The 2020 and 2021 Performance Share Plans do not include a minimum payout guarantee. in the consolidated income statement in the period to which the contributions relate. In a defined contribution plan, Nokia’s legal or constructive
obligation is limited to the amount that it agrees to contribute to the fund. In 2021, the amount recognized in the consolidated income statement
Global performance share plans as of 31 December 2021: related to defined contribution plans was EUR 223 million (EUR 209 million in 2020 and EUR 220 million in 2019).
Performance shares Confirmed payout Performance Restriction Settlement
Defined benefit plans
Plan outstanding at target (% of target) period period year
Nokia’s most significant defined benefit pension plans are in the United States, Germany, and the United Kingdom. Together they account for
2018 – 57 2018-2019 2020 2021
91% (91% in 2020) of Nokia’s total defined benefit obligation and 91% (91% in 2020) of Nokia’s total plan assets.
2019 26 267 664 53 2019-2021 N/A 2022
2020 35 973 694 – 2020-2023 N/A 2023 The defined benefit obligations, the fair value of plan assets, the effects of the asset ceiling and the net defined benefit balance as of 31 December:
2021 17 585 650 – 2021-2024 N/A 2024 2021 2020
Defined Net defined Defined Net defined
For the 2019 performance share plan, the number of performance shares at target is the amount of performance shares granted to an individual benefit Fair value Effects of benefit benefit Fair value Effects of benefit
EURm obligation of plan assets asset ceiling balance obligation of plan assets asset ceiling balance
that will be settled if the target performance is achieved. At maximum performance, the settlement amounts to two times the amount at target.
The 2019 performance share plan has a three-year performance period (2019-2021) and the performance criteria are: earnings per share United States (16 907) 21 746 – 4 839 (17 379) 20 328 (1 125) 1 824
(diluted), free cash flow and revenue relative to market (market share). The criteria exclude costs related to the acquisition of Alcatel-Lucent and Germany (2 630) 1 295 – (1 335) (2 847) 1 244 – (1 603)
related integration, goodwill impairment charges, intangible asset amortization and other purchase price fair value adjustments, restructuring United Kingdom (1 235) 1 652 – 417 (1 231) 1 716 – 485
and associated charges and certain other items. The Performance Share Plan 2019 includes a minimum payout guarantee for performance Other (1 932) 2 435 (92) 411 (2 044) 2 400 (70) 286
shares granted to non-executive participants, such that 25% of the performance shares granted will settle, regardless of the satisfaction of the Total (22 704) 27 128 (92) 4 332 (23 501) 25 688 (1 195) 992
applicable performance criteria. Performance shares granted to executive participants under the Performance Share Plan 2019 do not include
a minimum payout guarantee. United States
Restricted shares Nokia has significant defined benefit pension plans and a significant post-employment welfare benefit plan (Opeb) providing post-employment
In 2021, there were outstanding Restricted Shares from grants made in 2018, 2019, 2020 and 2021. Restricted Shares represent a commitment healthcare benefits and life insurance coverage in the United States. The pension plans include both traditional service-based programs and
by Nokia to deliver Nokia shares to eligible participants at a future point in time, subject to the fulfillment of predetermined service conditions. cash-balance plans. Salaried, non-union-represented employees are covered by a cash-balance program. All other legacy programs, including
Restricted Shares will either vest on the third anniversary of the award or follow a tranche vesting schedule whereby each plan vests in one-three legacy service-based programs, were frozen by 31 December 2009. For former employees who, when actively employed, were represented by a
tranches determined at the award date. Restricted Shares are subject to continued employment with Nokia and participants do not have any union, Nokia maintained two defined benefit pension plans, both of which are traditional service-based programs. On 31 December 2021, these
shareholder rights, such as voting or dividend rights, until the Nokia shares are delivered. The restricted share grants are generally forfeited if two plans were merged. The post-employment plans provide welfare benefits for certain retired former employees. Pursuant to an agreement
the employment relationship with Nokia terminates prior to vesting of the applicable tranche or tranches. with the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) unions, Nokia provides
post-employment healthcare benefits and life-insurance coverage for employees formerly represented by these two unions. That agreement
Employee share purchase plan was renewed in 2020 and the contract expires on 31 December 2027.
Nokia offers a voluntary Employee Share Purchase Plan to its employees. Participating employees make contributions from their net salary to
purchase Nokia shares on a monthly basis during a 12-month savings period. Nokia intends to deliver one matching share for every two purchased Germany
shares the employee holds as of the end of the Plan cycle. In 2021, 4 851 070 matching shares were issued as a settlement to the participants of Nokia maintains two primary plans in Germany which cover the majority of active employees: the cash-balance plan Beitragsorientierter
the Employee Share Purchase Plan 2020 (6 340 859 matching shares issued under the 2019 Plan in 2020 and 4 524 101 matching shares issued Altersversorgungs Plan (BAP) for the Group’s former Nokia employees and a similar cash-balance program (AVK Basis-/Matchingkonto) for the
under the 2018 Plan in 2019). Group’s former Alcatel-Lucent employees. Individual benefits are generally dependent on eligible compensation levels, ranking within the Group
and years of service. These plans are partially funded defined benefit pension plans, the benefits being subject to a minimum return guaranteed
Legacy equity compensation programs by the Group. The funding vehicle for the BAP plan is the NSN Pension Trust e.V. The trust is legally separate from the Group and manages the
Stock options plan assets in accordance with the respective trust agreements.
In 2021, Nokia no longer administered any stock option plan. The last stock option plan administered by Nokia was the Stock Option Plan 2011. All other plans have been frozen or closed in prior years and replaced by the cash-balance plans. Benefits are paid in annual instalments,
The last stock options under this Plan were granted in 2013. During 2019, the last remaining 23 000 outstanding and exercisable stock options as monthly retirement pension, or as a lump sum on retirement in an amount equal to accrued pensions and guaranteed interest.
were exercised with weighted average exercise price of EUR 2.35 and at a weighted average share price of EUR 5.34. The final subscription period
ended on 27 December 2019. United Kingdom
Nokia maintains one primary plan in the UK, “Nokia Retirement Plan for former NSN & ALU employees”, which is the result of the 2019 merger of
Each stock option entitled the holder to subscribe for one new Nokia share. The stock options were non-transferable and could be exercised
the legacy Nokia plan where the plan was merged and members’ benefits were transferred to the legacy Alcatel-Lucent plan. The combined plan
for shares only. Shares were eligible for dividends for the financial year in which the share subscription took place. Other shareholder rights
consists of both money purchase sections with Guaranteed Minimum Pension (GMP) underpin and final salary sections. All final salary sections
commenced on the date on which the subscribed shares were entered in the Trade Register. The stock option grants were generally forfeited
are closed to future benefit accrual: the legacy Nokia plan closed on 30 April 2012 and the legacy Alcatel-Lucent plan on 30 April 2018. Individual
if the employment relationship with Nokia was terminated.
benefits for final salary sections are dependent on eligible compensation levels and years of service. For the money purchase sections with
GMP underpin, individual benefits are dependent on the greater of the value of GMP at retirement date or the pension value resulting from
the individual’s invested funds. Nokia engages the services of an external Trustee service provider to manage all investments for the combined
pension plan.
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continued
Impact on the consolidated financial statements The movements in the fair value of plan assets for the years ended 31 December:
Movements in the defined benefit obligation, fair value of plan assets and the impact of the asset ceiling 2021 2020
The movements in the present value of the defined benefit obligation for the years ended 31 December: United States United States Other United States United States Other
EURm pension Opeb pension Total pension Opeb pension Total
2021 2020
As of 1 January 19 869 459 5 360 25 688 20 560 464 5 273 26 297
United States United States Other United States United States Other
EURm pension Opeb pension Total pension Opeb pension Total Interest income 411 12 56 479 480 8 77 565
As of 1 January (15 340) (2 039) (6 122) (23 501) (16 449) (2 325) (6 006) (24 780) Administrative expenses and interest
Current service cost (106) – (90) (196) (118) – (93) (211) on asset ceiling (16) – (5) (21) (19) – (7) (26)
Interest expense (308) (41) (61) (410) (375) (54) (83) (512) Settlements – – (42) (42) – – (15) (15)
Past service cost(1) (5) – 22 17 (55) 89 29 63 Total 395 12 9 416 461 8 55 524
Settlements – – 38 38 – – 10 10 Remeasurements:
Total (419) (41) (91) (551) (548) 35 (137) (650) Return on plan assets, excluding
Remeasurements: amounts included in interest
(Loss)/gain from change in income 760 47 46 853 2 227 16 233 2 476
demographic assumptions (7) 6 (12) (13) 202 20 66 288 Total 760 47 46 853 2 227 16 233 2 476
Gain/(loss) from change in financial Translation differences 1 625 50 159 1 834 (1 832) (41) (139) (2 012)
assumptions 640 82 267 989 (1 427) (203) (377) (2 007) Contributions:
Experience gain/(loss) 75 (1) (44) 30 30 85 (15) 100 Employers 25 (6) 60 79 26 6 67 99
Total 708 87 211 1 006 (1 195) (98) (326) (1 619) Plan participants – 71 27 98 – 92 29 121
Translation differences (1 184) (157) (135) (1 476) 1 451 196 125 1 772 Benefits paid (1 343) (219) (147) (1 709) (1 401) (260) (152) (1 813)
Contributions from plan participants – (71) (27) (98) – (92) (29) (121) Section 420 Transfer(1) (348) 348 – – (160) 160 – –
Benefits paid 1 343 219 240 1 802 1 401 260 245 1 906 Other 4 (3) (131) (130) (12) 14 (6) (4)
Other – (13) 127 114 – (15) 6 (9) Total (37) 241 (33) 171 (3 379) (29) (201) (3 609)
Total 159 (22) 205 342 2 852 349 347 3 548 As of 31 December 20 987 759 5 382 27 128 19 869 459 5 360 25 688
As of 31 December (14 892) (2 015) (5 797) (22 704) (15 340) (2 039) (6 122) (23 501) (1) Section 420 Transfer. Refer to Future cash flows section below.
(1) Consists primarily of gain on plan amendment in France in 2021. In 2020, these values consist of curtailment due to global restructuring, special termination benefits for certain US employees
and extension of US retiree healthcare benefits related to US union negotiations for formerly represented employees.
The movements in the impact of the asset ceiling limitation for the years ended 31 December:
2021 2020
Present value of obligations includes EUR 16 788 million (EUR 16 959 million in 2020) of wholly funded obligations, EUR 4 723 million United States United States Other United States United States Other
(EUR 5 412 million in 2020) of partly funded obligations and EUR 1 193 million (EUR 1 130 million in 2020) of unfunded obligations. EURm pension Opeb pension Total pension Opeb pension Total
As of 1 January (1 125) – (70) (1 195) (975) – (55) (1 030)
Interest expense (22) – – (22) (27) – – (27)
Remeasurements:
Change in asset ceiling, excluding
amounts included in interest
expense 1 198 – (17) 1 181 (216) – (17) (233)
Translation differences (51) – (5) (56) 93 – 2 95
As of 31 December – – (92) (92) (1 125) – (70) (1 195)
Net balances as of 31 December:

2021 2020
United States United States Other United States United States Other
EURm pension Opeb pension Total pension Opeb pension Total
As of 31 December 6 095 (1 256) (507) 4 332 3 404 (1 580) (832) 992
Consisting of:
Net Pension Assets 6 422 – 1 318 7 740 3 738 – 1 300 5 038
Net Pension Liabilities (327) (1 256) (1 825) (3 408) (334) (1 580) (2 132) (4 046)
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continued
Asset ceiling limitation The principal actuarial weighted average assumptions used for determining the defined benefit obligation:
Nokia may recognize the surplus of a pension plan to the amount of economic benefit that the entity can realize, either through a refund or as a % 2021 2020
reduction in future contributions. The most significant limitation of asset recognition for Nokia has been from the overfunded US formerly union-
Discount rate for determining present values 2.2 1.7
represented pension plan. All other countries where asset ceiling limits apply are not considered material.
Annual rate of increase in future compensation levels 2.0 1.9
In 2021, Nokia modified the terms of all three of its US defined benefit pension plans to provide that, in the event of a termination of the plan, Pension growth rate 0.4 0.3
any remaining balance in the Pension Fund, after settling plan liabilities, shall be distributed to Nokia. As a result of the adoption of this Inflation rate 1.8 1.8
modification, Nokia has recognized a reduction during 2021 in the effect of the asset ceiling by EUR 1 369 million. Healthcare costs trend rate assumed for next year(1) 8.6 4.9
Movements in asset ceiling limitation are recognized directly in the consolidated statement of comprehensive income, excluding amounts Healthcare cost trend rate assumed for next year (excluding post-employment dental benefits)(1) 8.9 5.0
included in interest expense. Following the modification to the terms of the US plans Nokia recognized an asset ceiling limitation in the amount Terminal growth rate(1) 4.4 4.4
of EUR 92 million (EUR 1 195 million in 2020). Year that the rate reaches the terminal growth value(1) 2029 2028
Weighted average duration of defined benefit obligations 10 yrs 11 yrs
Recognized in the income statement
Recognized in the consolidated income statement for the years ended 31 December: (1) Actuarial assumptions used for determining the defined benefit obligation - United States.
EURm 2021 2020 2019 Sensitivity analysis

Current service cost(1) 196 211 153 When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the present value of the defined benefit
Past service cost(1) (17) (63) (140) obligation is calculated using the projected unit credit method. The sensitivity analyses are based on a change in an assumption while holding
Net Interest(2) (26) – 9 all other assumptions constant and may not be representative of the actual impact of changes. If more than one assumption is changed
Settlements(1) 4 5 9 simultaneously, the combined impact of changes would not necessarily be the same as the sum of the individual changes. If the assumptions
Total 157 153 31 change to a different level compared with that presented, the effect on the defined benefit obligation may not be linear. Increases and decreases
in the principal assumptions, which are used in determining the defined benefit obligation, do not have a symmetrical effect on the defined
(1) Included in operating expenses within the consolidated income statement.
benefit obligation primarily due to the compound interest effect created when determining the net present value of the future benefit.
(2) Included in financial expenses within the consolidated income statement.
The sensitivity of the defined benefit obligation to changes in the principal assumptions:
Recognized in other comprehensive income
Increase in assumption(1) Decrease in assumption(1)
Recognized in other comprehensive income for the years ended 31 December: Change in assumption EURm EURm
EURm 2021 2020 2019

Discount rate for determining present values 1.0% 2 047 (2 480)
Return on plan assets, excluding amounts included in interest income 853 2 476 2 291 Annual rate of increase in future compensation levels 1.0% (121) 103
(Loss)/gain from change in demographic assumptions (13) 288 813 Pension growth rate 1.0% (468) 406
Gain/(loss) from change in financial assumptions 989 (2 007) (2 391) Inflation rate 1.0% (530) 448
Experience gain 30 100 71 Healthcare cost trend rate 1.0% (17) 15
Change in asset ceiling, excluding amounts included in interest expense 1 181 (233) (370) Life expectancy 1 year (998) 932
Total 3 040 624 414 (1) Positive movement indicates a reduction in the defined benefit obligation; a negative movement indicates an increase in the defined benefit obligation.
Actuarial assumptions and sensitivity analysis Investment strategies

Actuarial assumptions The overall pension investment objective of Nokia is to preserve or enhance the pension plans’ funded status through the implementation of an
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in each country. investment strategy that maximizes return within the context of minimizing funded status risk. In formulating the asset allocation for the plans,
multiple factors are considered, including, but not limited to, the long-term risk and return expectations for a variety of asset classes as well as
The discount rates and mortality tables used for the significant plans: current and multi-year projections of the pension plans’ demographics, benefit payments, contributions and funded status. Local trustee boards
Discount rate % Mortality table are responsible for conducting Asset-Liability studies, when appropriate; overseeing the investment of plan assets; and monitoring and managing
2021 2020 2021 associated risks under company oversight and in accordance with local law. The results of the Asset-Liability framework are implemented on a
Pri–2012 w/MP–2020 plan level.
United States 2.4 1.9 mortality projection scale
Nokia’s pension investment managers may use derivative financial instruments including futures contracts, forward contracts, options and
Germany 0.9 0.4 Heubeck 2018G
interest rate swaps to manage market risk. The performance and risk profile of investments is regularly monitored on a standalone basis as well
United Kingdom(1) 1.9 1.3 CMI 2020 as in the broader portfolio context. One risk is a decline in the plan’s funded status as a result of the adverse performance of plan assets and/or
Total weighted average for all countries 2.2 1.7 defined benefit obligations. The application of the Asset-Liability Model study focuses on minimizing such risks.
(1) Tables are adjusted with 1.5% long-term rate of improvement.
Disaggregation of plan assets
2021 2020
EURm Quoted Unquoted Total % Quoted Unquoted Total %
Equity securities 1 359 – 1 359 5 1 198 110 1 308 5
Fixed income securities 18 732 164 18 896 70 18 666 139 18 805 73
Insurance contracts – 981 981 4 – 793 793 3
Real estate – 1 224 1 224 4 101 1 094 1 195 5
Short-term investments 1 646 – 1 646 6 738 173 911 4
Private equity and other 107 2 915 3 022 11 130 2 546 2 676 10
Total 21 844 5 284 27 128 100 20 833 4 855 25 688 100
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continued
United States plan assets Benefit payments

The majority of Nokia’s United States pension plan assets are held in a master pension trust. The Opeb plan assets are held in two separate The following table summarizes expected benefit payments from the pension plans and other post-employment benefit plans until 2031.
trusts. The Pension & Benefits Investment Committee formally approves the target allocation ranges every few years on the completion of Actual benefit payments may differ from expected benefit payments.
the asset-liability study by external advisors and internal investment management. The overall United States pension plan asset portfolio,
US Pension US Opeb Other countries Total
as of 31 December 2021, reflects a balance of investments split of approximately 20/80 between equity, including alternative investments Supplemental Formerly union Non-union
for this purpose, and fixed income securities. EURm Management Occupational plans represented represented
2022 1 131 243 25 111 55 287 1 852
Most short-term investments including cash, equities and fixed-income securities have quoted market prices in active markets. Equity securities
2023 990 226 24 96 56 263 1 655
represent investments in equity funds and direct investments, which have quoted market prices in an active market. Fixed income securities
2024 944 212 24 76 56 279 1 591
represent direct investments in government and corporate bonds, as well as investments in bond funds, which have quoted market prices in
an active market. Insurance contracts are customary pension insurance contracts structured under domestic law in the respective countries. 2025 899 199 23 68 57 284 1 530
Real estate investments are investments in commercial properties or real estate funds, which invest in a diverse range of real estate properties. 2026 855 187 23 58 57 290 1 470
Short-term investments are liquid assets or cash, which are being held for a short period of time, with the primary purpose of controlling the 2027-2031 3 627 755 102 318 292 1 491 6 585
tactical asset allocation. Private equity net asset values (NAVs) are determined by the asset managers based on inputs such as operating results,
discounted future cash flows and market based comparable data. Private equity fair values reflect the latest available NAVs received from the Benefits are paid from plan assets where there is sufficient funding available to the plan to cover the benefit obligation. Any payments in excess of
asset managers, reviewed by Nokia, and adjusted for subsequent cash flows. the plan assets are paid directly by Nokia. Direct benefit payments expected to be paid in 2022 total EUR 119 million.
Future cash flows 26. Deferred revenue and other liabilities

Contributions
Group contributions to the pension and other post-employment benefit plans are made to facilitate future benefit payments to plan participants. Non-current
The funding policy is to meet minimum funding requirements as set forth in the employee benefit and tax laws, as well as any such additional EURm 2021 2020
amounts as Nokia may determine appropriate. Contributions are made to benefit plans for the sole benefit of plan participants. Employer Deferred revenue(1) 305 460
contributions expected to be paid in 2022 total EUR 76 million. Salaries, wages and social charges 46 45
United States pension plans Other 85 36
Funding methods Total 436 541
Funding requirements for the three United States qualified defined benefit pension plans are determined by the applicable statutes, namely the
Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code of 1986, and regulations issued by the Internal Revenue Current
Service (IRS). In determining funding requirements, ERISA allows assets to be either market value or an average value over a period of time; and
EURm 2021 2020
liabilities to be based on spot interest rates or average interest rates over a period of time. For the non-represented, represented and formerly
represented pension plans, Nokia does not foresee any future funding requirement for regulatory funding purposes, given the plans’ asset Deferred revenue(1) 155 155
allocation and the level of assets compared to liabilities. Salaries, wages and social charges 1 780 1 362
VAT and other indirect taxes 349 337
Post-employment healthcare benefits for both non-represented and formerly union represented retirees are capped for those who retired on or Discounts without performance obligations 479 747
before 1 March 1990. The benefit obligation associated with this group of retirees is 94% of the total United States retiree healthcare obligation
Accrued expenses related to customer projects 517 475
as of 31 December 2021. The US government’s Medicare program is the primary payer for those aged 65 and older, comprising almost all
Other 660 645
uncapped retirees.
Total 3 940 3 721
Section 420 transfers
(1) Non-current deferred revenue of EUR 305 million (EUR 460 million in 2020) and current deferred revenue of EUR 155 million (EUR 155 million in 2020) relates to an IP licensing contract which
Section 420 of the U.S. Internal Revenue Code (Section 420) allows for the transfer of pension assets in excess of specified thresholds above the
was determined to be a completed contract as defined in the transition guidance of IFRS 15, Revenue from Contracts with Customers.
plan’s funding obligation (excess pension assets) to a retiree health benefits account, a retiree life insurance account, or both, maintained within
the pension plan and to use the assets in such accounts to pay for, or to reimburse the employer for the cost of providing, applicable health or Other accruals include accrued logistics, research and development, IT, interest and royalty expenses, as well as various amounts that are
life insurance benefits, each as defined in Section 420, for retired employees, and with respect to health benefits, their spouses and dependents. individually insignificant.
Employers making such transfers are required to continue to provide healthcare benefits or life insurance coverage, as the case may be, for a
certain period of time (cost maintenance period) at levels prescribed by regulations.
For retirees who, when actively employed, were represented by the CWA or the IBEW, Nokia expects to fund the entire current retiree healthcare
and group life insurance obligations with Section 420 transfers from excess pension assets in the formerly represented pension plan. For retirees
who were not represented by the CWA or IBEW (non-represented retirees), Nokia expects to be able to fund some portion of the current retiree
group life insurance obligation with Section 420 transfers from excess pension assets in the non-represented pension plan. Section 420 is
currently set to expire on 31 December 2025.
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continued
27. Provisions 28. Commitments, contingencies and legal proceedings

Project Divestment- Material Contractual obligations
EURm Restructuring Warranty Litigation Environmental losses related liability Other Total
As of 1 January 2021 441 220 73 113 276 49 130 230 1 532 EURm Within 1 year Between 1 and 3 years Between 3 and 5 years More than 5 years Total
Translation differences 1 1 2 8 3 – – 14 29 Purchase obligations as of 31 December 2021(1) 4 328 398 198 82 5 006
Reclassification (5) – (1) – – (12) – 70 52 (1) Includes inventory purchase obligations, service agreements and outsourcing arrangements.
Charged to income statement:
Additions 221 197 81 36 22 12 35 141 745 Additionally, Nokia has committed lease contracts that have not yet commenced as of 31 December 2021. The future lease payments for these
Reversals (38) (17) (20) (1) (3) (3) (36) (27) (145) non-cancellable lease contracts are EUR 31 million within five years and EUR 192 million thereafter.
Total charged to income statement 183 180 61 35 19 9 (1) 114 600 As of 31 December 2021, Nokia has potential (undiscounted) future lease payments of EUR 718 million (EUR 468 million in 2020) relating to
Utilized during year(1) (308) (147) (33) (7) (63) – (40) (46) (644) extension options not expected to be exercised and EUR 48 million (EUR 51 million in 2020) relating to termination options expected to be
As of 31 December 2021 312 254 102 149 235 46 89 382 1 569 exercised that are not included in the lease liability.
Non-current 156 19 14 133 124 43 13 143 645
Guarantees and other contingent commitments
Current 156 235 88 16 111 3 76 239 924
EURm 2021 2020
(1) The utilization of restructuring provision includes items transferred to accrued expenses, of which EUR 69 million remained in accrued expenses as of 31 December 2021.
Contingent liabilities on behalf of Group companies
Restructuring provision Guarantees issued by financial institutions
Nokia provides for the estimated cost to restructure when a detailed formal plan of restructuring has been completed, approved by management, Commercial guarantees(1) 1 281 1 107
and announced. Restructuring costs consist primarily of personnel restructuring charges. The other main components are costs associated Non-commercial guarantees 442 450
with exiting real estate locations, and costs of terminating certain other contracts directly linked to the restructuring. As of 31 December 2021, Corporate guarantees(2)
the restructuring provision amounted to EUR 312 million including personnel and other restructuring costs. The provision consists primarily of Commercial guarantees(1) 457 453
amounts related to the announcements made by Nokia on 6 April 2016, 25 October 2018 and 16 March 2021. The majority of the restructuring Non-commercial guarantees 35 53
cash outflows is expected to occur over the next two years. Financing commitments
Warranty provision Customer finance commitments(3) 21 180
Nokia provides for the estimated liability to repair or replace products under standard warranty at the time revenue is recognized. The provision is Venture fund commitments(4) 137 189
an estimate based on historical experience of the level of repairs and replacements. Cash outflows related to the warranty provision are generally Other contingent liabilities and financing commitments(5)
expected to occur within the next 18 months. Other guarantees and financing commitments 4 11
(1) In commercial guarantees, Nokia reports guarantees that are issued in the normal course of business to Nokia’s customers for the performance of Nokia’s obligations under supply
Litigation provision agreements, including tender bonds, performance bonds and warranty bonds.
Nokia provides for the estimated future settlements related to litigation based on the probable outcome of the claims. Cash outflows related to (2) In corporate guarantees, Nokia reports guarantees with primary obligation that have been issued to Nokia’s customers and other third parties.
the litigation provision are inherently uncertain and generally occur over several periods. For a presentation of certain legal matters potentially (3) Customer finance commitments are available under loan facilities negotiated with customers. Availability of the facility is dependent upon the borrower’s continuing compliance with the
affecting Nokia, refer to Note 28, Commitments, contingencies and legal proceedings. agreed financial and operational covenants, and compliance with other administrative terms of the facility. The loan facilities are primarily available to fund capital expenditure relating to
purchases of network infrastructure equipment and services. Refer to Note 34, Financial risk management.
(4) As a limited partner in NGP Capital and certain other funds making technology-related investments, Nokia is committed to capital contributions and entitled to cash distributions according
Environmental provision to the respective partnership agreements and underlying fund activities.
Nokia provides for estimated costs of environmental remediation relating to soil, groundwater, surface water or sediment contamination (5) Other contingent liabilities and financing commitments exclude committed lease contracts that have not yet commenced and purchase obligations.
when Nokia becomes obliged, legally or constructively, to rectify the environmental damage, or to perform restorative work. The environmental
provision includes estimated costs to sufficiently clean and refurbish contaminated sites, to the extent necessary and, where necessary, The amounts in the table above represent the maximum principal amount of commitments and contingencies, and these amounts do not reflect
continue surveillance at sites where the environmental remediation exposure is less significant. Cash outflows related to the environmental management’s expected outcomes.
liability are inherently uncertain and generally occur over several periods.
Legal matters
Project loss provision A number of Group companies are and will likely continue to be subject to various legal proceedings and investigations that arise from time to
Nokia provides for onerous contracts based on the lower of the expected cost of fulfilling the contract and the expected cost of terminating the time, including proceedings regarding intellectual property, product liability, sales and marketing practices, commercial disputes, employment
contract. An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic and wrongful discharge, antitrust, securities, health and safety, environmental, tax, international trade, privacy matters and compliance. As a
benefits expected to be received under it. Project loss provisions relate to contracts with customers and are evaluated at a contract level. result, Nokia may incur substantial costs that may not be covered by insurance and could affect business and reputation. While management
The majority of the project loss provision utilization is expected to occur over the next two years. does not expect any of the legal proceedings it is currently aware of to have a material adverse effect on Nokia’s financial position, litigation is
inherently unpredictable and Nokia may in the future incur judgments or enter into settlements that could have a material adverse effect on its
Divestment-related provision profitability and cash flows.
Nokia provides for indemnifications it is required to make to the buyers of its disposed businesses. Cash outflows related to the divestment-
related provision are inherently uncertain. Litigation and proceedings
Mass labor litigation in Brazil
Material liability provision Nokia is defending against a number of labor claims in various Brazilian labor courts. Plaintiffs are former employees whose contracts were
Nokia recognizes the estimated liability for non-cancellable purchase commitments for inventory in excess of forecasted requirements at each terminated after Nokia exited from certain managed services contracts. The claims mainly relate to payments made under, or in connection with,
reporting date. Cash outflows related to the material liability provision are expected to occur over the next 12 months. the terminated labor contracts. Nokia has closed the majority of the court cases through settlement or judgment.
Other provisions Asbestos litigation in the United States
Nokia provides for various legal and constructive obligations such as indirect tax provisions, employee-related provisions other than restructuring Nokia is defending approximately 300 asbestos-related matters, at various stages of litigation. The claims are based on premises liability,
provisions and asset retirement obligations. Cash outflows related to other provisions are generally expected to occur over the next two years. products liability, and contractor liability. The claims also involve plaintiffs allegedly diagnosed with various diseases, including but not limited
to asbestosis, lung cancer, and mesothelioma.
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continued
Securities Class Action 30. Group companies

A litigation was filed in 2019 against Nokia and certain executives in the United States relating to allegations of Nokia making false and misleading
statements and omissions concerning its progress of integration of Alcatel-Lucent, including compliance practices identified during the The Group’s subsidiaries as of 31 December 2021:
integration process and disclosed in Nokia’s Annual Report on Form 20-F filed on 21 March 2019. In 2021, the court granted Nokia’s motion Parent Group ownership
to dismiss and, as no appeal was filed, the decision is final. Country of incorporation Company name holding % interest %
Finland Comptel Communications Oy – 100.0
Intellectual property rights litigation Comptel Oy – 100.0
Continental Nokia Innovations Oy 100.0 100.0
In 2019, Continental Automotive Systems (Continental) filed a lawsuit in the United States against Nokia and three other defendants relating to Nokia Investments Oy 100.0 100.0
an alleged breach of FRAND obligations and a refusal to license component suppliers. In 2020, all antitrust and state law claims were dismissed in Nokia Solutions and Networks Asset Management Oy – 100.0
a district court in favor of Nokia and other defendants. Continental has filed a notice of appeal. In 2021, Continental also filed a lawsuit against Nokia Solutions and Networks Branch Operations Oy – 100.0
Nokia alleging breach of contract as well as seeking a declaratory judgment relating to certain FRAND licensing issues. Nokia Solutions and Networks Oy 100.0 100.0
Nokia Technologies Oy 100.0 100.0
Daimler Nokia Teknologia Oy 100.0 100.0
In 2019, Nokia commenced patent infringement proceedings against Daimler in Germany regarding ten Nokia patents relevant to the 3G and Vertu Holdings Oy 100.0 100.0
4G cellular standards used in Daimler’s connected cars. In 2020, one of the cases was referred to the Court of Justice of the European Union Afghanistan Nokia Siemens Networks Afghanistan LLC – 100.0
on questions relating to standard essential patent litigation. In 2021, Nokia and Daimler announced that they have signed a patent licensing Algeria Nokia Siemens Networks Algérie SARL – 100.0
agreement under which Nokia licenses mobile telecommunications technology to Daimler and receives payment in return. The parties have Angola Alcatel-Lucent Angola, Limitada – 100.0
agreed to settle all pending litigation between Daimler and Nokia, including the complaint by Daimler against Nokia to the European Commission. Argentina Nokia Solutions and Networks Argentina S.A. – 100.0
Invalidation actions brought by Daimler’s suppliers and their respective complaints to the European Commission regarding Nokia’s licensing Armenia Nokia Solutions and Networks CJSC – 100.0
practice continue. Australia Nokia Services Pty Limited – 100.0
Lenovo Nokia Solutions and Networks Australia Pty Ltd – 100.0
In 2019 and 2020, Nokia filed patent infringement lawsuits against Lenovo in four countries, including United States, regarding 19 Nokia patents Radio Frequency Systems Pty Limited – 50.0
used in Lenovo’s products. Lenovo responded with counterclaims and nullity proceedings, and in 2020, Lenovo filed an action in the United States Austria IRIS Telecommunication Austria GmbH – 100.0
against Nokia alleging breach of RAND obligations and other claims. In 2021, Nokia concluded a multi-year, multi-technology patent cross-license Nokia Solutions and Networks Holding Österreich GmbH – 100.0
agreement with Lenovo. The agreement resolves all pending patent litigation and other proceedings between the two parties, in all jurisdictions. Nokia Solutions and Networks Österreich GmbH – 100.0
Under the agreement, Lenovo will make a net balancing payment to Nokia. Azerbaijan Nokia Solutions and Networks Baku LLC – 100.0
Bangladesh Nokia Solutions and Networks Bangladesh Limited – 100.0
Oppo Belarus Nokia Solutions and Networks LLC – 100.0
In 2021, Nokia commenced patent infringement proceedings against Oppo, OnePlus and Realme in several countries in Asia and Europe.
Belgium Nokia Bell NV – 100.0
Across these actions, more than 30 patents are in suit, covering a mix of cellular standards and technologies such as connectivity, user interface
Benin Alcatel-Lucent Benin SA – 100.0
and security. Oppo responded by filing invalidation actions against certain Nokia patents, a number of patent infringement actions against
Bolivia Nokia Solutions and Networks Bolivia S.A. – 100.0
Nokia equipment in Germany and China and actions in China against Nokia relating to standard essential patent licensing issues.
Bosnia and Herzegovina Nokia Solutions and Networks d.o.o. Banja Luka – 100.0
Nokia Solutions and Networks d.o.o., Sarajevo – 100.0
29. Notes to the consolidated statement of cash flows
Brazil Alcatel Submarine Networks Brazil Ltda. – 100.0
EURm 2021 2020 2019
Nokia Solutions and Networks do Brasil Telecomunicações Ltda. – 100.0
(1)
Adjustments for RFS Brasil Telecomunicacoes Ltda – 50.0
Depreciation and amortization 1 095 1 132 1 660 Bulgaria Comptel Communications EOOD – 100.0
Share-based payments 108 76 81 Nokia Solutions and Networks EOOD – 100.0
Impairment charges 40 246 102 Cabo Verde Alcatel-Lucent Submarine Networks (Cabo Verde), Lda – 100.0
Restructuring charges(2) 183 454 397 Cameroon Societe de Telecommunication Camerounaise – Sotelcam – 99.6
Profit from non-current investments (188) (61) (50) Canada Nokia Canada Inc. – 100.0
Profit on sale of property, plant and equipment, net (59) (3) (15) Chile Nokia Solutions and Networks Chile Ltda. – 100.0
Share of results of associated companies and joint ventures (9) (26) (12) China Alcatel-Lucent Shanghai Bell Information Products Co., Ltd. – 50.0
Financial income and expenses 240 167 283 Hunan Huanuo Technology Co. Ltd. – 50.0
Income tax expense 273 3 254 140 Lucent Technologies Investment Co. Ltd. – 100.0
Gain on the sale of businesses – – (4) Lucent Technologies Nanjing Telecommunications Co., Ltd. – 100.0
Other operating income and expenses 30 28 45 Lucent Technologies Qingdao Telecommunications Enterprises Co., Ltd. – 100.0
Total 1 713 5 267 2 627 Lucent Technologies Qingdao Telecommunications Systems Ltd. – 51.0
Nokia (Shanghai) Enterprise Management Co., Ltd. – 100.0
(1) Includes continuing and discontinued operations. Nokia Networks (Chengdu) Co.,Ltd. – 50.0
(2) Adjustments represent the non-cash portion of the restructuring charges recognized in the consolidated income statement.
Nokia Shanghai Bell Co., Ltd.(1) – 50.0
Nokia had no material non-cash investing or financing transactions in any of the years presented. Nokia Shanghai Bell Software Co., Ltd. – 50.0
Nokia Solutions and Networks (Suzhou) Co., Ltd. – 100.0
Nokia Solutions and Networks (Suzhou) Supply Chain Service Co., Ltd. – 100.0
Nokia Solutions and Networks Investment (China) Co. Ltd. – 100.0
Nokia Solutions and Networks System Technology (Beijing) Co., Ltd. – 50.0
Nokia Technologies (Beijing) Co., Ltd. – 100.0
RFS Radio Frequency Systems (Shanghai) Co., Ltd. – 50.0
RFS Radio Frequency Systems (Suzhou) Co., Ltd. – 50.0
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continued
Parent Group ownership Parent Group ownership

Country of incorporation Company name holding % interest % Country of incorporation Company name holding % interest %
Colombia Nokia Solutions and Networks Colombia Ltda. – 100.0 Ireland Nokatus Insurance Company Designated Activity Company (DAC) 100.0 100.0
Costa Rica Alcatel Centroamerica S.A. – 100.0 Nokia Ireland Limited – 100.0
Nokia Costa Rica S.A. – 100.0 Israel Nokia Solutions and Networks Ethernet Services Ltd. – 100.0
Croatia Nokia Solutions and Networks d.o.o. – 100.0 Nokia Solutions and Networks Israel Ltd. – 100.0
Czech Republic Nokia Solutions and Networks Czech Republic, s.r.o. – 100.0 Italy Nokia Solutions and Networks Italia S.p.A. – 100.0
Denmark Alcatel Submarine Networks Denmark ApS – 100.0 Nokia Solutions and Networks S.p.A. – 100.0
Nokia Denmark A/S – 100.0 RFS Italia SRL – 50.0
Dominican Republic Nokia Dominican Republic, S.A.S. – 100.0 Jamaica Nokia Jamaica Limited – 100.0
Ecuador Nokia Solutions and Networks Ecuador S.A. – 100.0 Japan Nokia Innovations Japan G.K. – 100.0
Egypt Nokia Egypt S.A.E. – 100.0 Nokia Solutions and Networks Japan G.K. – 100.0
El Salvador Nokia El Salvador, S.A. de C.V. – 100.0 Kazakhstan "Nokia Solutions and Networks Kazakhstan" LLP – 100.0
Estonia Nokia Solutions and Networks OÜ – 100.0 Kenya Alcatel-Lucent East Africa Limited – 100.0
France Alcatel Lucent – 100.0 Kuwait Nokia Solutions and Networks Kuwait Company W.L.L – 49.0
Alcatel Submarine Networks – 100.0 Lao Peoples Democratic
Alcatel Submarine Networks Marine – 100.0 Republic Nokia Shanghai Bell Lao Sole Co. Ltd. – 50.0
Alcatel-Lucent International – 100.0 Latvia Nokia Solutions and Networks SIA – 100.0
Alcatel-Lucent Participations – 100.0 Lithuania UAB Nokia Solutions and Networks – 100.0
Alcatel-Lucent Participations Chine – 100.0 Malaysia Comptel Communications Sdn Bhd – 100.0
Antelec – 100.0 Nokia Services and Networks Malaysia Sdn. Bhd. – 100.0
Camilec – 100.0 Mexico Nokia Operations de México S.A. de C.V. – 100.0
Evolium – 100.0 Radio Frequency Systems de Mexico S.A. de C.V. – 50.0
IRIS Telecommunication France – 100.0 Moldova "Nokia Solutions and Networks" S.R.L. – 100.0
Radio Frequency Systems France – 50.0 Morocco Nokia Solutions and Networks Morocco SARL – 100.0
Germany Alcatel SEL Unterstützungs GmbH – 100.0 Myanmar Nokia Solutions and Networks Myanmar Limited – 100.0
ATG Germany GmbH – 100.0 Netherlands Alcatel-Lucent RT International B.V. – 50.0
IRIS Telecommunication GmbH – 100.0 Alcatel-Lucent Services International B.V. – 100.0
Nokia Asset Verwaltungsgesellschaft mbH – 100.0 Nokia Solutions and Networks B.V. – 100.0
Nokia Display Technics GmbH i.L. – 100.0 Nokia Solutions and Networks Nederland B.V. – 100.0
Nokia Electronics Bochum GmbH i.L. – 100.0 SRA Computer C.V. – 100.0
Nokia Kunststofftechnik GmbH i.L. – 100.0 New Zealand Nokia New Zealand Limited – 100.0
Nokia Solutions and Networks GmbH & Co. KG – 100.0 Nicaragua Lucent Technologies Nicaragua, S.A. – 100.0
Nokia Solutions and Networks International Holding GmbH – 100.0 Nokia Solutions and Networks Nicaragua S.A. – 100.0
Nokia Solutions and Networks Management GmbH – 100.0 Nigeria Alcatel-Lucent Nigeria Limited – 100.0
Nokia Technology GmbH – 100.0 Nokia Solutions and Networks Nigeria Ltd. – 100.0
Nokia Unterstützungsgesellschaft GmbH – 100.0 Norway Alcatel Submarine Networks Norway AS – 100.0
Radio Frequency Systems GmbH – 50.0 Nokia Solutions and Networks Norge AS – 100.0
RFS Holding GmbH – 50.0 Pakistan Alcatel-Lucent Pakistan Limited – 90.0
Greece Nokia Solutions and Networks Hellas Single Member S.A. – 100.0 Nokia Solutions and Networks Pakistan (Private) Limited – 100.0
Guatemala Nokia Operations de Guatemala, S.A. – 100.0 Paraguay Nokia Paraguay S.A. – 100.0
Honduras Nokia Solutions and Networks Honduras, S.A. – 100.0 Peru Nokia Solutions and Networks Peru S.A. – 100.0
Hong Kong Alcatel Submarine Networks Hong Kong Limited – 100.0 Philippines Comptel Palvelut Philippines Inc. – 100.0
Nokia Hong Kong Limited – 100.0 Lucent Technologies Philippines Inc. – 100.0
Nokia Shanghai Bell (Hong Kong) Limited – 50.0 Nokia Shanghai Bell Philippines, Inc. – 50.0
OZ Communications HK Limited – 100.0 Nokia Solutions and Networks Philippines, Inc. – 100.0
Hungary Nokia Solutions and Networks Kft. – 100.0 Nokia Technology Center Philippines, Inc. – 100.0
Nokia Solutions and Networks TraffiCOM Kft. – 99.0 Poland IRIS Telecommunication Poland sp. z o.o. – 100.0
India Alcatel-Lucent India Limited – 100.0 Nokia Solutions and Networks Sp. z.o.o – 100.0
Alcatel-Lucent Managed Solutions India Private Limited – 100.0 Portugal Alcatel-Lucent Portugal, S.A. – 100.0
C-Dot Alcatel-Lucent Research Centre Private Limited – 51.0 Nokia Solutions and Networks Portugal S.A. – 100.0
Comptel Communications India Private Limited – 100.0 Puerto Rico Nokia Puerto Rico Inc. – 100.0
Mformation Software Technologies India Pvt Ltd – 100.0 Romania Nokia Networks S.R.L. – 99.2
Nokia India Private Limited 100.0 100.0 Russia AO “Nokia Solutions and Networks” – 100.0
Nokia Solutions and Networks India Private Limited – 100.0 Nokia Training Center, Russian Federation – 66.0
RFS India Telecom Private Limited – 50.0 OOO “Nokia Solutions and Networks” – 100.0
Indonesia P.T. Lucent Technologies Network Systems Indonesia – 100.0 OOO “RTK – Network Technologies” – 49.0
PT Nokia Solutions and Networks Indonesia – 100.0
Iran Pishahang Communications Networks Development Company (Private Joint Stock) – 90.0
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continued
Parent Group ownership Parent Group ownership

Country of incorporation Company name holding % interest % Country of incorporation Company name holding % interest %
Saudi Arabia Alcatel-Lucent Saudi Arabia Co., Ltd. – 100.0 United States Alcatel Submarine Networks USA Inc. – 100.0
Nokia Arabia Limited – 100.0 Alcatel-Lucent International Holdings Inc. – 100.0
Senegal Nokia West and Central Africa SA – 100.0 Bell Laboratories Inc. – 100.0
Serbia Nokia Solutions and Networks Serbia d.o.o. Beograd – 100.0 Elenion Technologies LLC – 100.0
Singapore Nokia Solutions and Networks Singapore Pte. Ltd. – 100.0 ETA Devices, Inc. – 100.0
Radio Frequency Systems (S) Pte Ltd – 50.0 Intellisync LLC 100.0 100.0
Slovakia Nokia Slovakia, A.S. – 100.0 Lucent Technologies GRL LLC – 100.0
Nokia Solutions and Networks, telekomunikacijske resitve, d.o.o. – 100.0 MRAC, Inc. – 100.0
South Africa Nokia Solutions and Networks South Africa Pty. Ltd. – 100.0 Nassau Metals Corporation – 100.0
Nokia South Africa (Pty) Ltd – 69.9 Nokia Apps Distribution LLC – 100.0
Radio Frequency Systems (Africa) Pty Ltd – 50.0 Nokia Federal Solutions LLC – 100.0
South Korea Nokia Solutions and Networks Korea Ltd. – 100.0 Nokia Innovations US LLC – 100.0
Spain Nokia Spain, S.A. – 100.0 Nokia Investment Management Corporation – 100.0
Nokia Transformation, Engineering & Consulting Services Spain S.L.U. – 100.0 Nokia of America Corporation – 100.0
Sri Lanka Nokia Solutions and Networks Lanka (Private) Limited – 100.0 Nokia US Holdings Inc. – 100.0
Sweden Nokia Solutions and Networks AB – 100.0 Radio Frequency Systems, Inc. – 50.0
Switzerland Alcatel-Lucent Trade International AG – 100.0 SAC AE Design Group, Inc. – 100.0
Nokia Solutions and Networks Schweiz AG – 100.0 SAC Wireless of CA, Inc. – 100.0
Taiwan Nokia Solutions and Networks Taiwan Co., Ltd. – 100.0 SAC Wireless, LLC – 100.0
Taiwan International Standard Electronics Limited – 60.0 Western Electric Company Incorporated – 100.0
Tanzania Nokia Solutions and Networks Tanzania Limited – 100.0 Western Electric International Incorporated – 100.0
Thailand Lucent Technologies Networks (Thailand) Limited – 27.0 Zyzyx, Inc. – 100.0
Nokia (Thailand) Co., Ltd. – 100.0 Uruguay Nokia Uruguay S.A. – 100.0
Tunisia Nokia Solutions and Networks CCC – 100.0 Uzbekistan Nokia Solutions and Networks Tashkent LLC – 100.0
Nokia Solutions and Networks Tunisia SA – 100.0 Venezuela Alcatel de Venezuela C.A. – 100.0
Turkey Alcatel Lucent Teletas Telekomunikasyon A.S. – 65.0 Nokia Solutions and Networks Venezuela C.A. – 100.0
IRIS Telekomünikasyon Mühendislik Hizmetleri A.S. – 100.0 Vietnam Alcatel-Lucent Vietnam Limited – 100.0
Nokia Solutions Networks Iletisim A.S. – 100.0 Nokia Solutions and Networks Technical Services Vietnam Company Limited – 100.0
Ukraine Alcatel-Lucent Ukraine SC – 100.0 (1) Nokia Shanghai Bell Co., Ltd. is the parent company of the Nokia Shanghai Bell Group of which the Nokia Group owns 50% plus one share with China Huaxin, an entity controlled by the Chinese
LLC "Nokia Solutions and Networks Ukraine" – 100.0 government, holding the remaining ownership interests. Refer to Note 31, Significant partly-owned subsidiaries.
United Arab Emirates Alcatel Lucent Middle East North Africa DMCC – 100.0
Nokia Solutions and Networks MEA FZ-LLC – 100.0 The Group’s associated companies as of 31 December 2021:
United Kingdom Alcatel IP Networks Limited – 100.0
Parent Group ownership
Alcatel Submarine Networks UK Ltd – 100.0
Country of incorporation Company name holding % interest %
Alcatel-Lucent Centro Caribbean Holding Limited – 100.0
Finland HMD Global Oy – 10.0
Alcatel-Lucent UK Limited – 100.0
Austria TETRON Sicherheitsnetz Errichtungs-und BetriebsgmbH – 35.0
Apertio Ltd. – 100.0
China Alcatel Shenyang Telecommunication Co., Ltd. – 27.5
Comptel Communications Holdings Limited – 100.0
Fujian FUNO Mobile Communication Technology Co.,Ltd – 49.0
Comptel Communications Limited – 100.0
Shanghai Alcatel Network Support Systems Co., Ltd. – 25.5
Epistrophe Limited – 100.0
Zhejiang Bell Technical Co., Ltd. – 20.0
Europe*Star Limited – 95.0
Cuba Copal, S.A. – 49.0
IRIS Service Delivery UK Ltd – 100.0
France Cibair S.A.S. – 19.0
Mesaplexx Limited – 100.0
III – V LAB – 40.0
Nokia Solutions and Networks UK Limited – 100.0
Germany Logistics Warehousing Systems GmbH – 20.0
Nokia Technologies (UK) Limited – 100.0
Hong Kong TD Tech Holding Limited – 51.0
Nokia UK Limited – 100.0
Netherlands MobiRail V.O.F. – 50.0
R.F.S. (UK) Limited – 50.0
Nigeria ITT Nigeria Limited – 40.0
STC – 100.0
Poland Nexera Holding Sp. Z.o.o. – 14.4
Symbian Limited – 100.0
Saudi Arabia Nokia Solutions and Networks Al-Saudia Co. Limited – 49.0
Singapore Innovis Holdings Pte – 8.4
Turkey Noksel Celik Boru Sanayi A.S. 20.0 20.0
Thales Rail Signalling Solutions S.L.U. ve Alcatel Lucent Teletas A.S. Is Ortakligi – 25.6
United States MobileMedia Ideas LLC – 40.0
Provenance Asset Group Holdings LLC – 15.0
Nokia Corporation has one branch Nokia Oyj, Succursale de Lancy, which is located in Switzerland.
182 180 NOKIA IN 2021 NOKIA IN 2021 181 183

continued
31. Significant partly-owned subsidiaries 33. Related party transactions

Nokia holds an ownership interest of 50% plus one share in Nokia Shanghai Bell’s parent company, Nokia Shanghai Bell Co., Ltd. (NSB), with Nokia has related party transactions with pension funds, associated companies and joint ventures, and the management and the Board of
China Huaxin Post & Telecommunication Economy Development Center (China Huaxin) holding the remaining ownership interests. Nokia applied Directors. Transactions and balances with companies over which Nokia exercises control are eliminated on consolidation. Refer to Note 2,
judgment to conclude that it is able to control NSB based on an assessment of various factors including the ability to nominate key management Significant accounting policies, and Note 30, Principal Group companies.
personnel, decision-making related to the management of NSB operations and Nokia’s exposure to variable returns from NSB.
Transactions with pension funds
In 2017, Nokia entered into a contractual arrangement providing China Huaxin with the right to fully transfer its ownership interest in NSB to Nokia Nokia has borrowings of EUR 40 million (EUR 43 million in 2020) from Nokia Unterstützungsgesellschaft mbH, Nokia’s German pension fund,
and Nokia with the right to purchase China Huaxin’s ownership interest in NSB in exchange for a future cash settlement. To reflect this, Nokia a separate legal entity. The loan bears interest at the rate of 6% per annum and its duration is pending until further notice by the loan
derecognized the non-controlling interest balance related to NSB and recognized a financial liability based on the estimated future cash settlement. counterparties even though they have the right to terminate the loan with a 90-day notice. In 2020, an amendment in the loan agreement
The financial liability is measured based on the expected future cash settlement to acquire the non-controlling interest in NSB. The measurement was reached allowing an off-set to the loan balance of contributions, interest and benefit payments paid. The loan is included in short-term
of the financial liability is complex as it involves estimation of the option exercise price and the distribution of excess cash balances upon exercise. interest-bearing liabilities in the consolidated statement of financial position. For more information on Nokia’s pension plans, refer to Note 25,
In 2021, Nokia increased the value of the financial liability to reflect a change in estimate of the future cash settlement resulting in the recognition Pensions and other post-employment benefits.
of a EUR 33 million loss (EUR 79 million gain in 2020) in financial income and expenses. As of 31 December 2021, the expected future cash
Transactions with associated companies and joint ventures
settlement amounted to EUR 504 million (EUR 420 million in 2020).
EURm 2021 2020 2019
Financial information for the Nokia Shanghai Bell Group(1): Share of results 9 22 12
EURm 2021 2020 Dividend income 8 5 6
Summarized income statement Share of shareholders’ equity 243 233 165
Net sales(2) 1 174 1 376 Sales 87 115 153
Operating loss (8) (3) Purchases (144) (177) (193)
Loss for the year (24) (14) Trade receivables 45 31 22
Loss for the year attributable to: Trade payables (29) (26) (38)
Equity holders of the parent (24) (14)
Non-controlling interests(3) – – Nokia has a financing commitment of EUR 4 million (EUR 6 million in 2020) to an associated company.
Summarized statement of financial position
In 2016, Nokia engaged in a strategic agreement with HMD Global Oy based on which Nokia determined that it exercised significant influence over
Non-current assets 575 577
HMD Global Oy despite holding no voting power in it. The agreement covers branding rights and intellectual property licensing to grant HMD Global
Non-current liabilities (161) (150)
Oy an exclusive global license to create Nokia-branded mobile phones and tablets for ten years. In 2019, Nokia granted a convertible loan of
Non-current net assets 414 427 EUR 60 million to HMD Global Oy containing both a mandatory equity conversion element, and a call option held by Nokia, to convert the loan
Current assets(4) 2 144 1 984 into equity interest in HMD Global Oy. In 2020, Nokia acquired an ownership interest in HMD Global Oy as a result of the equity conversion of the
Current liabilities (1 284) (1 228) convertible loan and recorded an investment in associated companies of EUR 63 million.
Current net assets 860 756
Net assets(5) 1 274 1 183
Management compensation
Compensation information for the President and CEO:
Non-controlling interests(3) – –
Summarized statement of cash flows Cash Share-
Base incentive based payment Pension
Net cash from operating activities 143 189 EUR salary/fee payments expenses(1) expenses Total(2)
Net cash used in investing activities 0 (26) 2021
Net cash used in financing activities(6) (82) (376) Pekka Lundmark 1 300 000 2 975 781 4 263 505 589 873 9 129 159
Translation differences 67 (1) 2020
Net increase/(decrease) in cash and cash equivalents 128 (214) Pekka Lundmark, from 1 August 2020 541 667 573 068 1 063 164 211 050 2 388 949
(1) Financial information for the Nokia Shanghai Bell Group is presented before elimination of intercompany transactions with the rest of the Group but after elimination of intercompany
Rajeev Suri, until 31 July 2020(3) 759 365 945 697 1 276 825 341 591 3 323 478
transactions between entities within the Nokia Shanghai Bell Group. 2019
(2) Includes EUR 61 million (EUR 104 million in 2020) net sales to other Group entities. Rajeev Suri 1 300 000 637 163 2 265 547 353 846 4 556 556
(3) Based on the contractual arrangement with China Huaxin, Nokia does not recognize any non-controlling interest in NSB.
(4) Includes a total of EUR 733 million (EUR 604 million in 2020) of cash and cash equivalents. (1) Represents the expense for all outstanding equity grants recorded during the year.
(5) The distribution of the profits of NSB requires the passing of a special resolution by more than two-thirds of its shareholders, subject to a requirement that at least 50% of the after-tax (2) Additionally, the CEO has received EUR 35 731 (EUR 80 244 in 2020 and EUR 118 619 in 2019) other compensation such as telephone, car, driver, mobility, tax compliance support and
distributable profits are distributed as dividends each year. medical insurance.
(6) Includes EUR 144 million dividend paid to China Huaxin in 2020. (3) Upon stepping down from his role as CEO in 2020, Nokia recorded termination benefits, EUR 5 122 317, for Rajeev Suri according to terms of his exit agreement. During 2021, the details of
Rajeev Suri’s exit agreement were revised and incentive payout factor was finalized, resulting into a credit of EUR 96 201 recorded to the income statement in 2021.
32. Investments in associated companies and joint ventures Total remuneration awarded to the Group Leadership Team for their time as members of the Group Leadership Team:
EURm 2021 2020
EURm 2021 2020 2019
Net carrying amount as of 1 January 233 165
Translation differences 12 (10) Short-term benefits 20 27 24
Acquisitions and additions(1) 3 68 Post-employment benefits(1) 2 2 1
Disposals and deductions (6) (7) Share-based payments 12 9 8
Impairments(2) – (4) Termination benefits(2) – 10 –
Share of results(2) 9 26 Total 34 48 33
Dividends (8) (5) (1) The members of the Group Leadership Team participate in the local retirement programs applicable to employees in the country where they reside.
Net carrying amount as of 31 December 243 233 (2) Includes both termination payments and payments made under exceptional contractual arrangements for lapsed equity awards.
(1) In 2020, Nokia acquired an ownership interest in HMD Global Oy as a result of the equity conversion of the convertible loan. For more information, refer to Note 33, Related party transactions.
(2) In 2020, impairments and share of results are presented in the share of results of associated companies and joint ventures line in the consolidated income statement.
Shareholdings in associated companies and joint ventures comprise investments in unlisted companies.
184 200 NOKIA IN 2021 NOKIA IN 2021 201 185

continued
Board of Directors’ compensation Market risk

The annual remuneration paid to the members of the Board of Directors, as decided by the Annual General Meetings in the respective years: Foreign exchange risk
2021 2020 2019 Nokia operates globally and is exposed to transaction and translation foreign exchange risks. The objective of foreign exchange risk management
is to mitigate adverse impacts from foreign exchange fluctuations on Nokia’s profitability and cash flows. Treasury applies a global portfolio
Annual Meeting Shares Annual Meeting Shares Annual Meeting Shares approach to manage foreign exchange risks within approved guidelines and limits.
fee(1) fees(2) received(3) fee(1) fees received(3) fee(1) fees received(3)
EUR EUR number EUR EUR number EUR EUR number
Transaction risk arises from foreign currency denominated assets and liabilities together with foreign currency denominated future cash flows.
Sari Baldauf, Chair 440 000 – 43 711 440 000 5 000 48 523 185 000 12 000 16 261 Transaction exposures are managed in the context of various functional currencies of Group companies. Material transactional foreign exchange
Kari Stadigh, Vice Chair(4) 200 000 7 000 19 868 185 000 11 000 20 401 160 000 12 000 14 063 exposures are hedged, unless hedging would be uneconomical due to market liquidity and/or hedging cost. Exposures are defined using
Bruce Brown(4)(5) 200 000 7 000 19 868 190 000 22 000 20 953 190 000 27 000 16 700 transaction nominal values. Exposures are mainly hedged with derivative financial instruments, such as foreign exchange forward contracts
Thomas Dannenfeldt(5)(6) 185 000 7 000 18 378 175 000 – 19 299 – – – and foreign exchange options with most of the hedging instruments having a duration of less than a year.
Jeanette Horan(5)(6) 185 000 7 000 18 378 175 000 20 000 19 299 175 000 22 000 15 382
Layered hedging approach is typically used for hedging of highly probable forecast foreign currency denominated cash flows with quarterly
Louis R. Hughes – – – – – – – 22 000 –
hedged items defined based on set hedge ratio ranges for each successive quarter. Hedged items defined for successive quarters are hedged
Edward Kozel(5)(6) 195 000 7 000 19 372 195 000 17 000 21 504 195 000 20 000 17 140 with foreign exchange forward contracts and foreign exchange options with a hedge ratio of 1:1. Hedging level ranges are adjusted on a monthly
Elizabeth Nelson – – – 175 000 17 000 19 299 175 000 25 000 15 382 basis including hedging instrument designation and documentation as appropriate. In case hedges exceed the hedge ratio range for any specific
Olivier Piou – – – – 11 000 – 175 000 14 000 15 382 quarter, the hedge portfolio for that specific quarter is adjusted accordingly.
Risto Siilasmaa – – – – – – 440 000 – 38 675
In certain cases, mainly related to long-term construction projects, Nokia applies fair value hedge accounting for foreign exchange risk with the
Søren Skou(4) 175 000 7 000 17 385 160 000 11 000 17 644 160 000 – 14 063
objective to reduce the exposure to fluctuations in the fair value of the related firm commitments due to changes in foreign exchange rates.
Carla Smits-Nusteling(6) 190 000 9 000 18 875 190 000 17 000 20 953 190 000 20 000 16 700
Exposures are mainly hedged with foreign exchange forward contracts with most of the hedging instruments matching the duration of the
Total 1 770 000 51 000 1 885 000 131 000 2 045 000 174 000 underlying projects. Nokia continuously manages the portfolio of hedging instruments to ensure appropriate alignment with the portfolio of
(1) Annual fees consist of Board member fees and Committee chair and member fees. hedged items at a hedging ratio of 1:1.
(2) Meeting fees include all meeting fees paid for the term that ended at the Annual General Meeting held on 8 April 2021, and meeting fees accrued and paid in 2021 for the term that began at
the same meeting. As Nokia has entities where the functional currency is other than the euro, the shareholders’ equity is exposed to fluctuations in foreign exchange
(3) Approximately 40% of each Board member’s annual compensation is paid in Nokia shares purchased from the market, and the remaining approximately 60% is paid in cash. rates. Changes in shareholders’ equity caused by movements in foreign exchange rates are shown as currency translation differences in the
(4) Annual fees in 2021 include EUR 30 000 for Bruce Brown as Chair and EUR 15 000 for Søren Skou and Kari Stadigh as members of the Personnel Committee. consolidated financial statements. The risk management strategy is to protect the euro counter value of the portion of this exposure expected
(5) Annual fees in 2021 include EUR 20 000 for Edward Kozel as Chair and EUR 10 000 for Bruce Brown, Thomas Dannenfeldt and Jeanette Horan as members of the Technology Committee.
(6) Annual fees in 2021 include EUR 30 000 for Carla Smits-Nusteling as Chair and EUR 15 000 for Thomas Dannenfeldt, Jeanette Horan, and Edward Kozel as members of the Audit Committee.
to materialize as foreign currency repatriation cash flows in the foreseeable future. Exposures are mainly hedged with derivative financial
instruments, such as foreign exchange forward contracts and foreign exchange options with most of the hedging instruments having a duration
of less than a year. Hedged items are defined based on conservative expectations of repatriation cash flows based on a range of considerations.
Transactions with the Group Leadership Team and the Board of Directors Net investment exposures are reviewed, hedged items designated, and hedging levels adjusted at minimum on a quarterly basis with a hedge ratio
No loans were granted to the members of the Group Leadership Team and the Board of Directors in 2021, 2020 or 2019. of 1:1. Additionally, hedging levels are adjusted whenever there are significant events impacting expected repatriation cash flows.
Terms of termination of employment of the President and CEO The foreign exchange risk arising from foreign currency denominated interest-bearing liabilities is primarily hedged using cross-currency swaps
Rajeev Suri stepped down from his position as President and CEO on 31 July 2020. Nokia’s Board of Directors appointed Pekka Lundmark as that are also used to manage Nokia’s interest rate profile (refer to the interest rate risk section below).
President and CEO of Nokia and he started in his new role on 1 August 2020.
Notional amounts in currencies that represent a significant portion of the currency mix in outstanding financial instruments and other hedged
The President and CEO, Pekka Lundmark, may terminate his service agreement at any time with 12 months’ prior notice. The President and CEO items as of 31 December:
would either continue to receive salary and benefits during the notice period or, at Nokia’s discretion, a lump sum of equivalent value. Additionally,
EURm USD CNY JPY INR
the President and CEO would be entitled to any short- or long-term incentives that would normally vest during the notice period. Any unvested
2021
equity awards would be forfeited after termination.
Foreign exchange exposure designated as hedged item for cash flow hedging, net(1) 601 (484) 500 (219)
In the event that the President and CEO terminates his service agreement based on a final arbitration award demonstrating Nokia’s material Foreign exchange exposure designated as hedged item for fair value hedging for FX risk, net(2) 1 580 – – –
breach of the service agreement, he is entitled to a severance payment equaling up to 12 months of compensation, including annual base salary, Foreign exchange exposure designated as hedged item for net investment hedging(3) 1 540 920 – 201
benefits and target incentive. Any unvested equity awards would be forfeited after termination. Foreign exchange exposure from interest-bearing liabilities(4) (841) – – –
Foreign exchange exposure from items on the statement of financial position,
34. Financial risk management excluding interest-bearing liabilities, net (1 602) (938) 155 (404)
General risk management principles Other foreign exchange derivatives, carried at fair value through profit and loss, net(5) 1 372 896 (109) 322
We have a systematic and structured approach to risk management. Key risks and opportunities are primarily identified against business targets EURm USD GBP CNY JPY
either in business operations or as an integral part of strategy and financial planning. Risk management covers strategic, operational, financial, 2020
compliance and hazard risks. Key risks and opportunities are analyzed, managed and monitored as part of business performance management Foreign exchange exposure designated as hedged item for cash flow hedging, net(1) 313 238 – 369
with the support of risk management personnel and the centralized Enterprise Risk Management function. The principles documented in the Nokia Foreign exchange exposure designated as hedged item for fair value hedging for FX risk, net(2) 705 (52) – –
Enterprise Risk Management Policy, which is approved by the Audit Committee of the Board, require risk management and its elements to be Foreign exchange exposure designated as hedged item for net investment hedging(3) 392 136 746 –
integrated into key processes. One of the core principles is that the business or function head is also the risk owner, although all employees are
Foreign exchange exposure from interest-bearing liabilities(4) (1 207) – – –
responsible for identifying, analyzing and managing risks, as appropriate, given their roles and duties. Our overall risk management concept is
Foreign exchange exposure from items on the statement of financial position,
based on managing the key risks that would prevent us from meeting our objectives, rather than solely focusing on eliminating risks. In addition
to the principles defined in the Nokia Enterprise Risk Management Policy, other key policies and operating procedures reflect the implementation excluding interest-bearing liabilities, net 88 (148) (894) 130
of specific aspects of risk management, including financial risk management. Other foreign exchange derivatives, carried at fair value through profit and loss, net(5) (324) 120 714 (95)
(1) Includes foreign exchange exposure from forecasted cash flows related to sales and purchases. In some currencies, especially the US dollar, Nokia has substantial foreign exchange exposures
Financial risks in both estimated cash inflows and outflows. These underlying exposures have been hedged.
The objective for treasury activities is to guarantee sufficient funding at all times and to identify, evaluate and manage financial risks. Treasury (2) Includes foreign exchange exposure from contractual firm commitments. These underlying exposures have been substantially hedged.
activities support this aim by mitigating the adverse effects on the profitability of the underlying business caused by fluctuations in the financial (3) Includes net investment exposures in foreign operations. These underlying exposures have been hedged.
(4) Includes interest-bearing liabilities that have been hedged with cross-currency swaps and foreign exchange forwards. Refer to Note 21, Interest-bearing liabilities.
markets, and by managing the capital structure by balancing the levels of liquid assets and financial borrowings. Treasury activities are governed (5) Items on the statement of financial position are hedged by a portion of foreign exchange derivatives not designated in a hedge relationship and carried at fair value through profit and loss.
by the Nokia Treasury Policy approved by the President and CEO, which provides principles for overall financial risk management and determines
the allocation of responsibilities for financial risk management activities. Operating procedures approved by the Chief Financial Officer (CFO) cover
specific areas such as foreign exchange risk, interest rate risk, credit risk and liquidity risk as well as the use of derivative financial instruments
in managing these risks. Nokia is risk averse in its treasury activities.
Financial risks are divided into market risk covering foreign exchange risk and interest rate risk; credit risk covering business-related credit risk
and financial credit risk; and liquidity risk.
186 202 NOKIA IN 2021 NOKIA IN 2021 203 187

continued
The methodology for assessing foreign exchange risk exposures: Value-at-Risk Nokia’s sensitivity to interest rate exposure in the investment and debt portfolios is presented in the fair value column in the table below with
Nokia uses the Value-at-Risk (VaR) methodology to assess exposures to foreign exchange risks. The VaR-based methodology provides estimates simulated impact to financial statements presented in profit and OCI columns.
of potential fair value losses in market risk-sensitive instruments as a result of adverse changes in specified market factors, at a specified 2021 2020
confidence level over a defined holding period. Nokia calculates the foreign exchange VaR using the Monte Carlo method, which simulates random Impact on Impact Impact Impact on Impact Impact
values for exchange rates in which Nokia has exposures and takes the non-linear price function of certain derivative instruments into account. EURm fair value on profit on OCI fair value on profit on OCI
The VaR is determined using volatilities and correlations of rates and prices estimated from a sample of historical market data, at a 95% Interest rates – increase by 100 basis points 140 1 2 190 1 4
confidence level, using a one-month holding period. To put more weight on recent market conditions, an exponentially weighted moving average Interest rates – decrease by 50 basis points (77) – (1) (100) (1) (2)
is performed on the data with an appropriate decay factor. This model implies that, within a one-month period, the potential loss will not exceed
the VaR estimate in 95% of possible outcomes. In the remaining 5% of possible outcomes, the potential loss will be at minimum equal to the Effects of hedge accounting on the financial position and performance
VaR figure and, on average, substantially higher. The VaR methodology relies on a number of assumptions, which include the following: risks are Nokia is using several types of hedge accounting programs to manage its foreign exchange and interest rate risk exposures; refer to Note 2,
measured under average market conditions, changes in market risk factors follow normal distributions, future movements in market risk factors Significant accounting policies. The effect of these programs on Nokia’s financial position and performance as of 31 December:
are in line with estimated parameters and the assessed exposures do not change during the holding period. Thus, it is possible that, for any given
month, the potential losses at a 95% confidence level are different and could be substantially higher than the estimated VaR. Net Fair value Fair value and
Cash flow investment hedges for cash flow
EURm hedges(1) hedges(1) FX risk(1) hedges(1)
The VaR calculation includes foreign currency denominated monetary financial instruments, such as current financial investments, loans and
2021
trade receivables, cash, loans and trade payables; foreign exchange derivatives carried at fair value through profit and loss that are not in a hedge
relationship and are mostly used to hedge the statement of financial position foreign exchange exposure; and foreign exchange derivatives Carrying amount of hedging instruments (19) (11) (57) (54)
designated as forecasted cash flow hedges, fair value hedges and net investment hedges as well as the exposures designated as hedged items Notional amount of hedging instruments (1 196) (2 949) (1 579) 891
for these hedge relationships. Notional amount of hedged items 1 201 2 949 1 577 (891)
Change in intrinsic value of hedging instruments since 1 January (43) (249) (95) (25)
The VaR risk measures for Nokia’s sensitivity to foreign exchange risks are presented in the Total VaR column and the simulated impact to financial
Change in value of hedged items used to determine hedge effectiveness 40 249 92 25
statements presented in profit, other comprehensive income (OCI) and cumulative translation adjustment (CTA) columns in the table below.
2020
2021 2020
Carrying amount of hedging instruments 19 (2) 69 (154)
Simulated impact on financial statements Simulated impact on financial statements
EURm Total VaR Profit OCI CTA Total VaR Profit OCI CTA Notional amount of hedging instruments (787) (1 620) (636) 815
As of 31 December 11 12 31 – 9 15 21 – Notional amount of hedged items 787 1 620 635 (815)
Average for the year 7 12 19 – 9 18 30 – Change in intrinsic value of hedging instruments since 1 January 33 265 79 118
Range for the year 4-13 10-15 14-31 0-0 6-18 8-32 15-41 0-0 Change in value of hedged items used to determine hedge effectiveness (35) (265) (87) (116)
(1) No significant ineffectiveness has been recorded during the periods presented and economic relationships have been fully effective.
Interest rate risk
Nokia is exposed to interest rate risk either through market value fluctuations of items on the consolidated statement of financial position (price The most significant foreign exchange hedging instruments under cash flow, net investment and fair value hedge accounting as of 31 December:
risk) or through changes in interest income or expenses (refinancing or reinvestment risk). Interest rate risk mainly arises through interest-bearing Maturity breakdown of notional amounts (EURm)(1)
liabilities and assets. Estimated future changes in cash flows and the structure of the consolidated statement of financial position also expose Weighted Between Between
Fair value average 3 and 12 1 and 3 Beyond
Nokia to interest rate risk. Currency (EURm) hedged rate Total Within 3 months months years 3 years
The objective of interest rate risk management is to mitigate adverse impacts arising from interest rate fluctuations on the consolidated income 2021
statement, cash flow, and financial assets and liabilities while taking into consideration Nokia’s target capital structure and the resulting net Cash flow hedge accounting
interest rate exposure. Nokia has entered into long-term borrowings mainly at fixed rates and swapped a portion of them into floating rates, GBP (4) 0.8574 (209) (55) (154) – –
in line with a defined target interest profile. Nokia has not entered into interest rate swaps where it would be paying fixed rates. Nokia aims to GBP 4 0.8570 203 (6) 92 110 7
mitigate the adverse impacts from interest rate fluctuations by continuously managing net interest rate exposure arising from financial assets JPY (1) 130.3819 (392) (100) (292) – –
and liabilities, by setting appropriate risk management benchmarks and risk limits. USD (25) 1.1586 (1 042) (358) (684) – –
USD 14 1.1643 457 6 201 235 15
Interest rate profile of items under interest rate risk management including Nokia’s net cash and current financial investments as well as related
Net investment hedge accounting
derivatives as of 31 December:
CNY (4) 7.2106 (920) (920) – – –
2021 2020 INR (4) 85.8900 (201) (201) – – –
EURm Fixed rate Floating rate(1) Fixed rate Floating rate(1)
USD 1 1.1290 (1 540) (1 540) – – –
Current financial investments 182 2 395 104 1 017 Fair value hedge accounting for FX risk
Cash and cash equivalents 499 6 192 324 6 616 USD (61) 1.1689 (1 580) (73) (238) (1 130) (139)
Interest-bearing liabilities (3 871) (782) (4 687) (889)
2020
Financial assets and liabilities before derivatives (3 190) 7 805 (4 259) 6 744 Cash flow hedge accounting
Interest rate derivatives 838 (838) 661 (661) GBP 0 0.9039 (238) (66) (144) (28) –
Financial assets and liabilities after derivatives (2 352) 6 967 (3 598) 6 083 JPY 7 122.5961 (204) (47) (157) – –
(1) All cash equivalents and derivative transaction-related collaterals with initial maturity of three months or less are considered floating rate for the purposes of interest rate risk management. USD 17 1.1809 (268) (64) (204) – –
Net investment hedge accounting
Treasury monitors and manages interest rate exposure centrally. Nokia uses selective sensitivity analyses to assess and measure interest rate CNY 4 7.9625 (746) (746) – – –
exposure arising from interest-bearing assets, interest-bearing liabilities and related derivatives. Sensitivity analysis determines an estimate USD (6) 1.2158 (392) (392) – – –
of potential fair value changes in market risk-sensitive instruments by varying interest rates in currencies in which Nokia has material amounts Fair value hedge accounting for FX risk
of financial assets and liabilities while keeping all other variables constant. Sensitivities to credit spreads are not reflected in the numbers. USD 70 1.1490 (705) (114) (66) (487) (38)
(1) Negative notional amounts indicate that hedges sell currency, and positive notional amounts indicate that hedges buy currency.
For information on the impact of hedge accounting on equity, refer to Note 19, Equity. For information on hedging instruments used for fair value
and cash flow hedge accounting related to Nokia’s interest-bearing liabilities, refer to Note 21, Interest-bearing liabilities. For information on
derivative instruments, refer to Note 23, Derivative financial instruments.
188 204 NOKIA IN 2021 NOKIA IN 2021 205 189

continued
Credit risk Financial credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to Nokia. Credit risk arises from Financial instruments contain an element of risk resulting from changes in the market price due to counterparties becoming less creditworthy
credit exposures to customers, including outstanding receivables, financial guarantees and committed transactions, as well as financial or risk of loss due to counterparties being unable to meet their obligations. Financial credit risk is measured and monitored centrally by Treasury.
institutions, including bank and cash, fixed income and money market investments, and derivative financial instruments. Credit risk is managed Financial credit risk is managed actively by limiting counterparties to a sufficient number of major banks and financial institutions, and by
separately for business-related and financial credit exposures. monitoring the creditworthiness and the size of exposures continuously. Additionally, Nokia enters into netting arrangements with all major
counterparties, which give the right to offset in the event that the counterparty would not be able to fulfill its obligations. Nokia enters into
Business-related credit risk collateral agreements with certain counterparties, which require counterparties to post collateral against derivative receivables.
Nokia aims to ensure the highest possible quality in trade receivables and contract assets as well as customer or third-party loan receivables.
The Credit Risk Management Standard Operating Procedure, approved by the CFO, lays out the framework for the management of the business- Investment decisions are based on strict creditworthiness and maturity criteria as defined in the Treasury-related policies and procedures.
related credit risks. The Credit Risk Management Standard Operating Procedure sets out that credit decisions are based on credit evaluation in As a result of this investment policy approach and active management of outstanding investment exposures, Nokia has not been subject to
each business, including credit rating and limits for larger exposures, according to defined principles. Group level limit approvals are required for any material credit losses in its financial investments in the years presented. Due to the high credit quality of Nokia’s financial investments,
material credit exposures. Credit risks are monitored in each business and, where appropriate, mitigated on a case-by-case basis with the use of the expected credit loss for these investments is deemed insignificant based on 12 months’ expected credit losses as of 31 December 2021.
letters of credit, collaterals, sponsor guarantees, credit insurance, and sale of selected receivables. Outstanding current financial investments, cash equivalents and cash classified by credit rating grades ranked in line with Standard & Poor’s rating
Nokia applies a simplified approach to recognizing a loss allowance on trade receivables and contract assets based on measurement of lifetime categories as of 31 December:
expected credit losses arising from trade receivables without significant financing components. Based on quantitative and qualitative analysis, Due within Due between Due between Due between Due beyond
Nokia has determined that the credit risk exposure arising from its trade receivables is low risk. Quantitative analysis focuses on historical EURm Rating(1) Cash 3 months 3 and 12 months 1 and 3 years 3 and 5 years 5 years Total(2)(3)
loss rates, historic and projected sales and the corresponding trade receivables, and overdue trade receivables including indicators of any 2021
deterioration in the recovery expectation. Qualitative analysis focuses on all relevant conditions, including customer credit rating, country AAA – 1 819 – – – – 1 819
credit rating and political situation, to improve the accuracy of estimating lifetime expected credit losses. AA+ - AA- 1 073 567 – – – – 1 640
A+ - A- 1 534 2 376 371 125 229 – 4 635
For customer financing related loan receivables, the credit loss estimate is typically based on a 12-month expected credit loss for outstanding
loans and estimated additional draw-downs during this period. However, in case there has been a significant increase in credit risk for the specific BBB+ - BBB- 180 879 2 – – – 1 061
counterparty since the initial recognition, expected credit loss estimate is based on lifetime expected credit loss. The loss allowance is calculated BB+ - BB- 44 – – – – – 44
based on a review of collectability, including customer credit rating and available collateral. Typically customer loan credit risk is higher than credit B+ - B- 25 – – – – – 25
risk of trade receivables and contract assets on average. CCC+ - CCC- – – – – – – –
Non-rated 32 12 – – – – 44
Credit exposure is measured as the total of trade receivables, contract assets and loans outstanding from customers and committed credits.
Trade receivables do not include any major concentrations of credit risk by customer. The top three customers account for 5.6%, 5.5% and 3.2% Total 2 888 5 653 373 125 229 – 9 268
(10.5%, 5.1% and 4.6% in 2020) of trade receivables, contract assets and loans due from customers and other third parties as of 31 December 2020
2021. The top three credit exposures by country account for 17.6%, 9.3% and 8.4% (24.0%, 9.6% and 8.6% in 2020) of Nokia’s trade receivables, AAA – 1 411 – – – – 1 411
contract assets and loans due from customers and other third parties as of 31 December 2021. The 17.6% relates to credit exposure in the AA+ - AA- 895 352 – – – – 1 247
United States (24.0% in 2020 from United States). A+ - A- 1 685 2 593 50 70 155 50 4 603
The total of trade receivables, contract assets and loans due from customers is EUR 7 084 million (EUR 7 124 million in 2020) and customer BBB+ - BBB- 106 490 100 – – – 696
financing related loan commitments undrawn is EUR 21 million (EUR 180 million in 2020) as of 31 December 2021. BB+ - BB- 36 – 1 – – – 37
B+ - B- 26 – – – – – 26
The aging of trade receivables, contract assets and customer finance loans as of 31 December 2021: CCC+ - CCC- 3 – – – – – 3
Past due Past due Past due Non-rated 30 8 – – – – 38
EURm Current 1-30 days 31-180 days More than 180 days Total
Total 2 781 4 854 151 70 155 50 8 061
Trade receivables 5 043 131 249 232 5 655
(1) Bank Parent Company ratings are used here for bank groups. Actual bank subsidiary ratings may differ from the Bank Parent Company rating.
Contract assets 1 146 – – – 1 146
(2) Current financial investments and cash equivalents include bank deposits, structured deposits, investments in money market funds and investments in fixed income instruments.
Customer financing related loan receivables 216 – 1 66 283 (3) Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 424 million (EUR 325 million
Total gross receivables 6 405 131 250 298 7 084 in 2020) of instruments that have a call period of less than three months.
Expected credit loss allowance (202) (9) (44) (189) (444)

Nokia has restricted bank deposits primarily related to employee benefits of EUR 119 million (EUR 107 million in 2020) that are presented in other
Total net receivables 6 203 122 206 109 6 640
non-current financial assets. Nokia has assessed the counterparty credit risk for these financial assets and concluded that expected credit losses
are not significant.
The expected credit loss allowance and amount charged to the consolidated income statement for trade receivables, contract assets and
customer financing related loan receivables for the years ended 31 December: The following table sets out financial assets and liabilities subject to offsetting under enforceable master netting agreements and similar
EURm 2021 2020 2019 arrangements as of 31 December. To reconcile the items shown in the table below to the consolidated statement of financial position, items that
Expected credit loss allowance 444 434 223 are not subject to offsetting would need to be included, refer to Note 23, Derivative financial instruments.
Expected credit loss charged to income statement 10 211 21 Net amounts of Related amounts not set off in the
Gross amounts of financial statement of financial position
financial liabilities/ assets/(liabilities)
Gross amounts of (assets) set off in the presented in the Financial
financial assets/ statement of statement of instruments Cash collateral
EURm (liabilities)(1) financial position financial position assets/(liabilities) (received)/pledged Net amount
2021
Derivative assets 139 – 139 (102) (26) 11
Derivative liabilities (229) – (229) 102 126 (1)
Total (90) – (90) – 100 10
2020
Derivative assets 149 – 149 (53) (89) 7
Derivative liabilities (204) – (204) 53 134 (17)
Total (55) – (55) – 45 (10)
(1) In 2020 gross amounts of financial assets and liabilities have been adjusted to include only derivative contracts that are under enforceable master netting agreements.
190 206 NOKIA IN 2021 NOKIA IN 2021 207 191

continued
The financial instruments subject to enforceable master netting agreements and similar arrangements are not offset in the consolidated Due within Due between 3 Due between Due between Due beyond
EURm Total 3 months and 12 months 1 and 3 years 3 and 5 years 5 years
statement of financial position where there is no intention to settle net or realize the asset and settle the liability simultaneously.
2020
Liquidity risk Non-current financial assets
Liquidity risk is defined as financial distress or extraordinarily high financing costs arising from a shortage of liquid funds in a situation where Other non-current financial assets(1) 188 – – 66 79 43
outstanding debt needs to be refinanced or where business conditions unexpectedly deteriorate and require financing. Transactional liquidity risk Current financial assets
is defined as the risk of executing a financial transaction below fair market value or not being able to execute the transaction at all within a specific Other current financial assets excluding derivatives(1) 39 2 37 – – –
period of time. The objective of liquidity risk management is to maintain sufficient liquidity, and to ensure that it is readily available without Current financial investments 1 121 1 020 101 – – –
endangering its value in order to avoid uncertainty related to financial distress at all times.
Cash and cash equivalents(2) 6 944 6 618 50 70 156 50
Nokia aims to secure sufficient liquidity at all times through efficient cash management and by investing primarily in highly liquid money market Cash flows related to derivative financial assets gross settled:
investments. Depending on its overall liquidity position, Nokia may pre-finance or refinance upcoming debt maturities before contractual maturity Derivative contracts – receipts 7 810 5 873 1 299 599 39 –
dates. The transactional liquidity risk is minimized by entering into transactions where proper two-way quotes can be obtained from the market. Derivative contracts – payments (7 682) (5 813) (1 258) (573) (38) –
Nokia aims to ensure flexibility in funding by maintaining committed and uncommitted credit lines. Refer to Note 21, Interest-bearing liabilities. Trade receivables 5 802 4 674 974 154 – –
The following table presents an undiscounted, contractual cash flow analysis for lease liabilities, financial liabilities and financial assets that are Non-current financial and lease liabilities
presented on the consolidated statement of financial position as well as loan commitments given and obtained. The line-by-line analysis does not Long-term interest-bearing liabilities (5 920) (39) (97) (794) (2 194) (2 796)
directly reconcile with the consolidated statement of financial position. Long-term lease liabilities (750) – – (338) (220) (192)
Current financial and lease liabilities
Due within Due between Due between Due between Due beyond
EURm Total 3 months 3 and 12 months 1 and 3 years 3 and 5 years 5 years Short-term interest-bearing liabilities (564) (552) (12) – – –
2021 Short-term lease liabilities (232) (65) (167) – – –
Non-current financial assets Other financial liabilities excluding derivatives(3) (434) (420) (14) – – –
Other non-current financial assets(1) 236 15 13 110 86 12 Cash flows related to derivative financial liabilities gross settled:
Current financial assets Derivative contracts – receipts 6 926 4 870 883 525 45 603
Other current financial assets excluding derivatives(1) 128 110 18 – – – Derivative contracts – payments (6 999) (4 906) (882) (563) (35) (613)
Current financial investments 2 576 2 274 302 – – – Discounts without performance obligations(4) (747) (421) (310) (13) (3) –
Cash and cash equivalents(2) 6 695 6 268 71 126 230 – Trade payables (3 174) (3 049) (122) (2) – (1)
Cash flows related to derivative financial assets net settled: Commitments given and obtained
Derivative contracts – receipts 2 – (2) 4 – – Loan commitments given undrawn(5) (180) (26) (26) (128) – –
Cash flows related to derivative financial assets gross settled: Loan commitments obtained undrawn(6) 1 482 (1) (3) (8) 1 494 –
Derivative contracts – receipts 10 498 7 907 1 774 462 49 306 Leases committed but not yet commenced (182) (1) (3) (43) (29) (106)
Derivative contracts – payments (10 291) (7 835) (1 713) (434) (35) (274) (1) Other non-current financial assets and other current financial assets excluding derivatives include mainly customer financing related loan receivables.
Trade receivables 5 673 4 829 812 32 – – (2) Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 325 million of instruments that
have a call period of less than three months.
Non-current financial and lease liabilities
(3) Other financial liabilities include a conditional obligation to China Huaxin presented in the earliest period as the exercise period is open.
Long-term interest-bearing liabilities (5 409) (39) (86) (1 171) (2 038) (2 075) (4) In 2021, Nokia has revised the classification of discounts without performance obligations and included this financial liability in the table. The comparative amounts for 2020 have been
Long-term lease liabilities (882) – – (353) (225) (304) adjusted accordingly.
(5) Loan commitments given undrawn have been included in the earliest period in which they could be drawn or called.
Other non-current financial liabilities (34) – – (34) – – (6) Loan commitments obtained undrawn have been included based on the period in which they expire. These amounts include related commitment fees.
Current financial and lease liabilities
Short-term interest-bearing liabilities (116) (89) (27) – – – 35. Subsequent events
Short-term lease liabilities (236) (62) (174) – – –
Other financial liabilities excluding derivatives(3) (522) (504) (18) – – – Non-adjusting events after the reporting period
Cash flows related to derivative financial liabilities gross settled: Capital commitment
Derivative contracts – receipts 12 100 8 483 1 629 1 179 180 629 In January 2022, Nokia agreed on capital commitment of USD 400 million to NGP Capital’s Fund V. The fund’s emphasis on companies developing
emerging 5G use cases for industrial and business transformation aligns closely with Nokia’s technology leadership vision and its efforts to
Derivative contracts – payments (12 220) (8 556) (1 663) (1 231) (176) (594)
maximize the value shift towards cloud. Per industry standard practice, the capital will be called throughout the 10 year lifecycle of the fund.
Discounts without performance obligations (664) (419) (175) (70) – –
Trade payables (3 679) (3 522) (152) (4) – (1) Share buyback program
Commitments given and obtained On 3 February 2022, Nokia announced that its Board of Directors is initiating a share buyback program under the current authorization from the
Loan commitments given undrawn(4) (21) (3) (18) – – – AGM to repurchase shares. The program targets to return up to EUR 600 million of cash to shareholders in tranches over a period of two years,
Loan commitments obtained undrawn(5) 1 482 (1) (3) 80 1 406 – subject to continued authorization from the Annual General Meeting. Nokia launched the first phase of the program on 11 February 2022 with
Leases committed but not yet commenced (223) – – (8) (23) (192) repurchases starting on 14 February 2022. For more details about the share buyback program and how Nokia plans to distribute funds to its
shareholders, refer to Note 19, Equity.
(1) Other non-current financial assets and other current financial assets excluding derivatives include mainly customer financing related loan receivables.
(2) Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 424 million of instruments that
have a call period of less than three months.
(3) Other financial liabilities include a conditional obligation to China Huaxin presented in the earliest period as the exercise period is open.
(4) Loan commitments given undrawn have been included in the earliest period in which they could be drawn or called.
(5) Loan commitments obtained undrawn have been included based on the period in which they expire. These amounts include related commitment fees.
192 208 NOKIA IN 2021 NOKIA IN 2021 209 193

Parent Company income statement Parent Company statement of financial position
2021 2020 2021 2020

For the year ended 31 December Notes EURm EURm As of 31 December Notes EURm EURm
Net sales(1) 182 220 ASSETS
Cost of sales (10) (18) Non-current assets
Gross profit 172 202 Intangible assets
Selling, general and administrative expenses (63) (46) Intangible rights 2 2
Other operating income 4 19 23 Total intangible assets 2 2
Other operating expenses 4 (16) (3) Tangible assets
Operating profit 112 176 Land and water areas 8 9 9
Financial income and expenses Buildings 8 77 83
Income from non-current investments 5 600 – Machinery and equipment 8 2 3
Interest and other financial income 5 296 328 Other tangible assets 8 5 10
Interest and other financial expenses 5 (163) (163) Assets under construction 8 0 –
Impairment of investments in subsidiaries and other shares 9 (6) Total tangible assets 93 105
Total financial income and expenses 727 165 Investments
Profit before appropriations and tax 839 341 Investments in subsidiaries 9 18 661 18 657
Appropriations Non-current financial investments 9, 14 1 1
Group contributions 6 (360) (440) Total investments 18 662 18 658
Profit/(loss) before tax 479 (99) Other non-current assets
Income tax 7 3 (37) Non-current loan receivables from Group companies 14 2 765 2 644
Profit/(loss) for the year 482 (136) Non-current loan receivables from other companies 14 1 1
(1) Net sales from Nokia Technologies segment.
Other non-current receivables 24 28
Total other non-current assets 2 790 2 673
The notes are an integral part of these financial statements.
Total non-current assets 21 547 21 438
Current assets
Accounts receivable from Group companies 161 369
Accounts receivable from other companies 1 –
Current loan receivables from Group companies 14 5 060 4 728
Group contribution receivable from Group companies 150 –
Other financial assets from Group companies 14, 15 151 49
Other financial assets from other companies 14, 15 139 149
Prepaid expenses and accrued income from Group companies 10 127 101
Prepaid expenses and accrued income from other companies 10 527 453
Current financial investments 14 2 514 1 070
Total current assets 8 830 6 919
Cash and cash equivalents 14 4 513 5 043
Total assets 34 890 33 400
194 214 NOKIA IN 2021 NOKIA IN 2021 215 195

Parent Company statement of financial position Parent Company statement of cash flows
continued
2021 2020 2021 2020

As of 31 December Notes EURm EURm For the year ended 31 December Notes EURm EURm
SHAREHOLDERS’ EQUITY AND LIABILITIES Cash flow from operating activities
Capital and reserves Profit/(loss) for the year 482 (136)
Share capital 11 246 246 Adjustments, total 21 (298) 356
Share premium 11 46 46 Change in net working capital
Treasury shares 11, 12 (344) (344) Decrease/(increase) in accounts receivable 276 (58)
Fair value and other reserves 11, 12, 13 15 (18) Increase/(decrease) in non-interest-bearing short-term liabilities 23 (28)
Reserve for invested unrestricted equity 11, 12 15 318 15 248 Decrease in non-interest-bearing long-term liabilities (155) (155)
Retained earnings 11, 12 1 827 1 963 Cash from operations 328 (21)
Profit/(loss) for the year 11, 12 482 (136) Interest received 191 267
Total equity 17 590 17 005 Interest paid (149) (8)
Provisions 16 43 43 Other financial income and expenses received, net(1) 11 58
Non-current liabilities Income taxes received, net 3 3
Long-term interest-bearing liabilities 14, 17 4 299 4 697 Net cash from operating activities 384 299
Advance payments from other companies 305 460 Cash flow from investing activities
Total non-current liabilities 4 604 5 157 Purchase of shares in subsidiary companies and current financial investments (25) (24)
Current liabilities Dividends received 600 –
Short-term interest-bearing liabilities to Group companies 14, 17 10 743 8 942 Proceeds from disposal of businesses 25 –
Short-term interest-bearing liabilities to other companies 14, 17 26 448 Purchase of property, plant and equipment and intangible assets – (6)
Group contribution liabilities to Group companies 510 440 Proceeds from sale of property, plant and equipment and other intangible assets 3 1
Other financial liabilities to Group companies 14 118 144 (Payments of)/proceeds from other non-current receivables (46) 151
Other financial liabilities to other companies 14 733 623 (Payments of)/proceeds from current receivables (446) 3 682
Advances received from other companies 155 155 Purchase of current investments (1 727) (1 044)
Accounts payable to Group companies 211 268 Proceeds from current investments 302 16
Accounts payable to other companies 19 22 Net cash (used in)/from investing activities (1 314) 2 776
Accrued expenses and other liabilities to Group companies 18 53 44 Cash flow from financing activities
Accrued expenses and other liabilities to other companies 18 85 109 (Payments of)/proceeds from long-term borrowings (800) 1 288
Total current liabilities 12 653 11 195 Proceeds from/(payments of) short-term borrowings(1) 1 640 (1 838)
Total liabilities 17 257 16 352 Group contributions, net (440) (390)
Total shareholders’ equity and liabilities 34 890 33 400 Net cash from/(used in) financing activities 400 (940)
Net (decrease)/increase in cash and cash equivalents (530) 2 135
Cash and cash equivalents as of 1 January 5 043 2 908
Cash and cash equivalents as of 31 December 4 513 5 043
(1) In 2021, Nokia changed the presentation of certain foreign exchange cash flows. The comparative amounts have been recast accordingly.
196 216 NOKIA IN 2021 NOKIA IN 2021 217 197

Notes to the Parent Company financial statements
1. Accounting principles Intangible assets and property, plant and equipment Accounts receivable Other financial assets
Intangible assets are stated at cost less accumulated amortization Accounts receivable include amounts invoiced to customers as well Loan receivables include loans to Nokia companies and third parties
Basis of presentation according to plan. Property, plant and equipment is stated at cost as amounts where the revenue recognition criteria have been fulfilled and are measured at nominal value and not in excess of their probable
The Parent Company (Nokia Corporation) financial statements are less accumulated depreciation according to plan. Depreciation and but the customers have not yet been invoiced. Accounts receivable value. Loans are subject to quarterly review as to their collectability and
prepared in accordance with the Finnish Accounting Standards (FAS). amortization according to plan are recorded on a straight-line basis are carried at the original amount invoiced to customers less loss available collateral. An allowance is made if a loan is deemed not to be
The Parent Company is responsible for arranging Nokia’s internal over the expected useful lives of the assets as follows: allowances on accounts receivable accounts. Loss allowances on fully recoverable. The related cost is recognized in other expenses or
financing. Changes in the internal and external financing needs arising accounts receivable are based on a regular review of all outstanding financial expenses, depending on the nature of the receivable, to
Intangible assets 3–7 years amounts, including an analysis of historical bad debt, customer reflect the shortfall between the carrying amount and the present
from changes in operative and organizational models affect the
Buildings 20–33 years concentrations, customer creditworthiness, past due amounts, value of the expected future cash flows. Interest income on loan
Parent Company’s financial position.
Machinery and equipment 3–10 years current economic trends and changes in customer payment terms. receivables is recognized in financial income and expenses.
The Parent Company’s financial statements include the Switzerland Impairment charges on receivables identified as uncollectible are
branch. Land and water areas are not depreciated. The accumulated included in other operating expenses. Cash and cash equivalents
depreciation and amortization according to plan comply with the Cash and cash equivalents include cash at bank and in hand as well
Revenue recognition Finnish Business Tax Act. Investments as highly liquid, fixed-income and money-market investments that
The Parent Company provides its customers with licenses to Investments in subsidiaries are stated at cost less accumulated are readily convertible to known amounts of cash with maturities at
intellectual property (IP) by granting customers with rights to use the Classification and measurement of financial instruments impairment. Non-current financial investments primarily include acquisition of three months or less, as well as bank deposits with
Parent Company’s IP in their products. When the Parent Company For the presentation of the financial instruments, where applicable, technology-related investments in unlisted private equity shares maturities or contractual call periods at acquisition of three months
grants customers with rights to use IP in their products, the associated the Parent Company applies fair value measurement in accordance and unlisted venture funds, which are classified as fair value through or less. Due to the high credit quality and short-term nature of
license fee revenue is recognized in accordance with the substance with the Finnish Accounting Standards (Accounting Act 5:2a §), and profit and loss. These equity investments are initially recognized and these investments, there is an insignificant risk of change in value.
of the relevant agreements. In the majority of cases, Nokia retains thus applies the same accounting principles as the Nokia consolidated subsequently remeasured at fair value. Investments in money-market funds that have a risk profile consistent
obligations to continue to develop the licensed assets during the financial statements. with the aforementioned criteria are also classified as cash equivalents.
contract term, and therefore revenue is recognized pro rata over Fair value is estimated using a number of methods, including, but not
the period during which the Parent Company is expected to perform. Classification and measurement of financial assets limited to: quoted market rates, the current market value of similar Impairment of financial assets
Recognition of the revenue as pro rata over the term of the license The Parent Company classifies its financial assets into the following instruments; prices established from a recent arm’s-length financing Impairment requirements apply to the recognition of a loss allowance
is considered the most faithful depiction of the Parent Company’s categories: financial assets measured at amortized cost, financial transaction of target companies; and analysis of market prospects and for expected credit losses. on financial assets measured at amortized
satisfaction of the performance obligation as the IP being licensed assets measured at fair value through fair value reserve and financial operating performance of target companies, taking into consideration cost, financial assets measured at fair value through fair value reserve,
to the customer includes new inventions patented by the Parent assets measured at fair value through profit and loss. The selection of public market comparable companies in similar industry sectors. The financial guarantee contracts and loan commitments. The Parent
Company that are highly interdependent and interrelated and created the appropriate category is made based on both the Parent Company's Parent Company uses judgment in selecting the appropriate valuation company continuously assesses its financial instruments on a forward-
through continuous R&D efforts that are relatively stable throughout business model for managing the financial asset and on the contractual methodology as well as underlying assumptions based on existing looking basis and accounts for the changes in expected credit losses on
the year. In some contracts, the Parent Company has no remaining cash flow characteristics of the asset. market practice and conditions. a quarterly basis. Refer to Note 2, Significant accounting policies in the
obligations to perform after granting a license to the initial IP, Fair value adjustments, foreign exchange gains and losses as well as consolidated financial statements.
and licensing fees are non-refundable. In these cases, revenue is The business model for managing financial assets is defined on
realized gains and losses from the disposal of these investments are
recognized at the beginning of the license term. portfolio level. The business model must be observable on a practical
recognized within other income and expenses in the income statement.
Classification and measurement of financial liabilities
level by the way the business is managed. The cash flows of financial The Parent Company has classified its financial liabilities in the
Foreign currency translation assets measured at amortized cost are solely payments of principal Corporate cash investments in bank deposits, as well as fixed income following categories: financial liabilities measured at amortized cost
Monetary assets and liabilities denominated in foreign currency are and interest. These assets are held within a business model which has and money market securities with initial maturity or put feature longer and financial liabilities measured at fair value through profit and loss.
valued at the exchange rates prevailing at the end of the reporting an objective to hold assets to collect contractual cash flows. Financial than three months that have characteristics of solely payments of In accordance with the Finnish Accounting Standards (Accounting Act
period. assets measured at fair value through fair value reserve have cash principal and interest and are not part of structured investments, are 5:2a §), the Parent Company classifies derivative liabilities at fair value
flows that are solely payments of principal and interest and these managed in a portfolio with a business model of holding investments to through profit and loss and all other financial liabilities at nominal value.
Share-based payments assets are held within a business model that has an objective achieved collect principal and interest, and are initially measured at fair value and
The Parent Company offers three types of equity-settled share-based both by holding financial assets to collect contractual cash flows and in subsequent periods measured at amortized cost using the effective Interest-bearing liabilities
compensation plans for employees: performance shares, restricted selling financial assets. Financial assets measured at fair value through interest method. These investments are executed with the main Interest-bearing liabilities, including the current part of long-term
shares and the employee share purchase plan. Share-based profit and loss are assets that do not fall in either of these two purpose of collecting contractual cash flows and principal repayments. interest-bearing liabilities and collaterals for derivative transactions,
compensation is recognized as an expense in the income statement categories. In addition to the classification as described above, the However, investments are sold from time to time for liquidity are measured at nominal value. Transaction costs are initially
when the shares are delivered. The settlement covers taxes and accounting for financial assets is impacted if the financial asset is part management and market risk mitigation purposes. recognized as accruals and amortized to the income statement over
similar charges incurred. of a hedging relationship (see the section on hedge accounting below). the life of the instrument. Foreign exchange gains and losses as well
Investments in money-market funds that do not qualify as cash as interest are recognized in financial income and expenses in the
All purchases and sales of financial assets are recorded on the trade equivalents as well as fixed income and money-market securities
Pensions income statement over the life of the instrument.
date, that is, when the Parent Company commits to purchase or sell having initial maturities over three months that are held for trading
Contributions to pension plans are expensed in the income statement
the asset. A financial asset is derecognized when substantially all the or are included in investment structures consisting of securities traded Accounts payable
in the period to which the contributions relate. Pension expenses are
risks and rewards related to the financial asset have been transferred in combination with derivatives are classified as fair value through
reported according to the local legislation. Accounts payable are carried at the invoiced amount.
to a third party that assumes control of the financial asset. profit and loss. Investments in this portfolio are executed with the
main purpose of collecting contractual cash flows, principal repayments
and capital appreciation and they can be sold at any time.
Current financial investments also include term deposits used as

collaterals for derivative transactions. These investments are initially
measured at fair value and in subsequent periods measured at
amortized cost. Interest income as well as foreign exchange gains
and losses are recognized in financial income and expenses in the
income statement.
198 218 NOKIA IN 2021 NOKIA IN 2021 219 199

continued
Derivative financial instruments The Parent Company also applies cash flow hedging to future interest
cash flows in foreign currency related to issued bonds. These future
2. Personnel expenses
All derivatives are recognized initially at fair value on the date a EURm 2021 2020
derivative contract is entered into and subsequently remeasured at interest cash flows are hedged with cross-currency swaps that have
been bifurcated and designated partly as fair value hedges to hedge Salaries and wages 30 41
fair value. The method of recognizing the resulting gain or loss varies
both foreign exchange and the interest rate benchmark risk component Share-based payments 9 2
according to whether the derivatives are designated and qualify under
hedge accounting. of the issued bond and partly as cash flow hedges to hedge the foreign Pension expenses 5 1
exchange risk related to the remaining portion of interest cash flows on Social security expenses 1 1
Derivatives not designated in hedge accounting the issued bond. The accumulated profit or loss for the part of these Total 45 45
cross-currency swaps designated as cash flow hedges is initially
relationships carried at fair value through profit and loss
recorded in hedging reserve and recycled to profit or loss at the time
Forward foreign exchange contracts are valued using the forward
when the related interest cash flows are settled. The Parent Company Average number of employees 2021 2020
exchange rate of the statement of financial position date. Changes 59 72
separates the foreign currency basis spread from cross-currency swaps Marketing
in fair value are measured by comparing these rates with the original
and excludes it from the hedge relationship as cost of hedging that Administration 147 151
contract-forward rate. Currency options are valued using the Garman &
is initially recognized and subsequently measured at fair value and Total average 206 223
Kohlhagen option valuation model on the statement of financial position
recorded in cost of hedging reserve in equity. Number of employees as of 31 December 193 222
date. Changes in fair value are recognized in the income statement.
Fair values of forward rate agreements, interest rate options, Deferred tax
futures contracts and exchange-traded options are calculated based Deferred tax assets are recognized to the extent it is probable that Management compensation
on quoted market rates at each statement of financial position date. future taxable profit will be available against which the unused tax Refer to Note 33, Related party transactions in the consolidated financial statements.
Discounted cash flow method is used to value interest rate and losses, unused tax credits and deductible temporary differences can be
cross-currency swaps. Changes in fair value are recognized in the utilized. The company continually evaluates the probability of utilizing 3. Auditor’s fees
income statement. its deferred tax assets and considers both positive and negative Deloitte Oy served as our auditor for the period ended from 1 January to 31 December 2021. The auditor is elected annually by our shareholders
evidence in its assessment. Evaluation takes into account that at the Annual General Meeting for the financial year commencing next after the election. The following table presents fees by type paid to
Interest income or expense on interest rate derivatives is accrued Finnish Nokia entities can balance their taxable profits via the group Deloitte’s network of firms for the years ended 31 December.
in the income statement during the financial year. contribution system. At 31 December 2020, the company concluded
based on its assessment that it is not probable that it will be able to Parent Company Nokia Group
Hedge accounting utilize the unused tax credits and deductible temporary differences in EURm 2021 2020 2021 2020
The Parent Company may apply hedge accounting on certain forward the foreseeable future. This assessment was done primarily based on Audit fees 10 10 22 22
foreign exchange contracts, certain options or option strategies, the historical performance. Consequently, the company derecognized Audit-related fees 1 – 2 –
and interest rate derivatives. Qualifying options and option strategies EUR 43 million deferred tax assets. Tax fees – – – 1
have zero net premium or a net premium paid. For option structures, Other fees – 2 – 2
the critical terms of the bought and sold options are the same and At 31 December 2021, the company continues to conclude that such
Total 11 12 24 25
the nominal amount of the sold option component is no greater than utilization is not probable. The company recognizes a deferred tax
that of the bought option. asset arising from unused losses or tax credits only to the extent the
company has sufficient taxable temporary differences or there is In 2021, Deloitte Oy performed non-audit services for the Parent company for total fees of EUR 208 thousand (EUR 1 700 thousand in 2020).
The Parent Company applies fair value hedge accounting to reduce convincing other evidence that sufficient tax profit will be available These services included services described in Auditing Act 1:1.2 § for EUR 43 thousand (EUR 20 thousand in 2020) and other non-audit
exposure to fair value fluctuations of interest-bearing liabilities due against which the unused tax losses or unused tax credits can be services for EUR 208 thousand (EUR 1 680 thousand in 2020).
to changes in interest rates and foreign exchange rates. Interest rate utilized in the future. Positive evidence of future taxable profits may
swaps and cross-currency swaps are used aligned with the hedged be assigned less weight in assessing the appropriateness of recording 4. Other operating income and expenses
items to hedge interest rate risk and associated foreign exchange risk. a deferred tax asset when there is other negative evidence such EURm 2021 2020
The Parent Company's borrowings are carried at amortized cost. as cumulative losses, which are considered strong evidence that Other operating income
Changes in the fair value of derivatives designated and qualifying as future taxable profits may not be available. In 2021, Nokia generated Tax indemnification and interest income – 11
fair value hedges, together with any changes in the fair value of hedged accounting and taxable profit in Finland and there were improvements Rental income 3 2
liabilities attributable to the hedged risk, are recorded in financial in financial performance compared to the previous periods.
Gain on non-current investments 10 –
income and expenses in the income statement. The Parent Company At 31 December 2021, the company does not consider that it has
Other income 6 10
separates the foreign currency basis spread from cross-currency swaps generated an established pattern of sufficient tax profitability to
conclude that it is probable that it will be able to utilize the deferred Total 19 23
and excludes it from the hedged risk as cost of hedging that is initially
tax assets. This conclusion is based on the weighting of objective Other operating expenses
recognized and subsequently measured at fair value and recorded in
cost of hedging reserve in equity. If a hedge relationship no longer negative evidence against more subjective positive evidence. The Loss on sale of other tangible assets (4) –
meets the criteria for hedge accounting, hedge accounting ceases, primary factors in this weighting were the more objective record of Land area rehabilitation (5) (1)
cost of hedging recorded in cost of hedging reserve is immediately a pattern of financial performance compared to the more inherently Other expenses (7) (2)
expensed and any fair value adjustments made to the carrying amount subjective expectations regarding future financial performance Total (16) (3)
of the hedged item while the hedge was effective are recognized in in Finland.
financial income and expenses in the income statement based on the The company continues to assess the realizability of deferred tax
effective interest method. assets including in particular the actual profit record and may re-
recognize deferred tax assets where a clear pattern of tax profitability
can be established.
Deferred taxes at the end of 2021:
Tax credits EUR 60 million

Deferred tax depreciations EUR 16 million
Provisions EUR 2 million
Other temporary differences EUR 32 million
200 220 NOKIA IN 2021 NOKIA IN 2021 221 201

continued
5. Financial income and expenses 8. Tangible assets

EURm 2021 2020 Other tangible
Land and Machinery and assets and Assets under
Income from non-current investments
EURm water areas Buildings equipment advance payments construction Total
Dividend income from Group companies 600 –
Total 600 –
Additions 1 4 2 – – 7
Interest and other financial income Disposals and retirements (1) – – – – (1)
Interest income from Group companies 173 261 Reclassifications – 13 1 – (14) –
Interest income from other companies 4 11
Acquisition cost as of 31 December 2020 9 164 16 15 – 204
Foreign exchange gains/losses, net 70 56
Accumulated depreciation as of 1 January 2020 – (76) (12) (4) – (92)
Other financial income from other companies 49 –
Depreciation(1) – (5) (1) (1) – (7)
Total 296 328
Accumulated depreciation as of 31 December 2020 – (81) (13) (5) – (99)
Interest and other financial expenses Net book value as of 1 January 2020 8 71 1 11 14 105
Interest expenses to Group companies (8) (31) Net book value as of 31 December 2020 9 83 3 10 – 105
Interest expenses to other companies (122) (125)
Acquisition cost as of 1 January 2021 9 164 16 15 – 204
Other financial expenses to other companies (33) (7)
Additions – – – 5 – 5
Total (163) (163)
Disposals and retirements – (1) – (15) – (16)
Reclassifications – – – – – –
Financial income and expenses include EUR 25 million expense related to derivative financial instruments subject to hedge accounting (EUR 118 million
Acquisition cost as of 31 December 2021 9 163 16 5 – 193
income in 2020) and EUR 25 million income related to liabilities subject to fair value hedge accounting (EUR 122 million expense in 2020).
Accumulated depreciation as of 1 January 2021 – (81) (13) (5) – (99)
6. Group contributions Disposals and retirements – – – 5 – 5
Depreciation(1) – (5) (1) – – (6)
EURm 2021 2020
Accumulated depreciation as of 31 December 2021 – (86) (14) – – (100)
Granted (510) (440)
Received 150 – Net book value as of 1 January 2021 9 83 3 10 – 105
Net book value as of 31 December 2021 9 77 2 5 – 93
Total (360) (440)
(1) Recognized in selling, general and administrative expenses.
7. Income taxes
EURm 2021 2020
Current tax – –
Tax relating to previous financial years 3 6
Deferred tax(1) – (43)
Total 3 (37)
(1) 2020 deferred tax includes derecognition of deferred tax assets. Refer to Note 1, Accounting principles.
202 222 NOKIA IN 2021 NOKIA IN 2021 223 203

continued
9. Investments 12. Distributable earnings

EURm 2021 2020 EURm 2021 2020
Investments in subsidiaries Reserve for invested unrestricted equity 15 318 15 248
Net carrying amount as of 1 January 18 657 18 633 Retained earnings 1 827 1 963
Additions 25 24 Treasury shares (344) (344)
Disposals (15) – Profit/(loss) for the year 482 (136)
Impairments (6) – Unrestricted equity total 17 283 16 730
Net carrying amount as of 31 December 18 661 18 657 Fair value and other reserves – (18)
Investments in associated companies Distributable earnings total 17 283 16 712
Net carrying amount as of 1 January – 1
Impairment – (1) 13. Fair value and other reserves
Net carrying amount as of 31 December – –
Hedging reserve Cost of hedging Fair value reserve Total
Non-current financial investments EURm Gross Tax Net Gross Tax Net Gross Tax Net Gross Tax Net
Net carrying amount as of 1 January 1 1 As of 1 January 2020 2 – 2 (2) – (2) – – – – – –
Net carrying amount as of 31 December 1 1 Fair value and cash flow hedges
(1) Refer to Note 30, Group companies in the consolidated financial statements Net fair value gains/(losses) (18) – (18) (7) 1 (6) – – – (25) 1 (24)
Transfer to income statement – – – 7 (1) 6 – – – 7 (1) 6
10. Prepaid expenses and accrued income As of 31 December 2020 (16) – (16) (2) – (2) – – – (18) – (18)
EURm 2021 2020 As of 1 January 2021 (16) – (16) (2) – (2) – – – (18) – (18)
Expected future cash settlement to acquire non-controlling interest in Nokia Shanghai Bell(1) 503 420 Fair value and cash flow hedges
Accrued interest 56 56 Net fair value gains/(losses) 29 – 29 5 – 5 – – – 34 – 34
Prepaid and accrued royalty income 5 7 Transfer to income statement (1) – (1) – – – – – – (1) – (1)
Other accrued income from Group companies 71 44 As of 31 December 2021 12 – 12 3 – 3 – – – 15 – 15
Other prepaid expenses and accrued income from other companies 19 27
Total 654 554
(1) Refer to Note 31, Significant partly-owned subsidiaries in the consolidated financial statements.
11. Shareholders’ equity

Reserve for
Fair value invested
Share Treasury and other unrestricted Retained
EURm Share capital premium shares(1) reserves equity earnings Total
As of 1 January 2020 246 46 (344) – 15 199 1 963 17 110
Settlement of share-based payments – – – – 49 – 49
Net fair value gains/(losses) – – – (18) – – (18)
Loss for the year – – – – – (136) (136)
As of 31 December 2020 246 46 (344) (18) 15 248 1 827 17 005
As of 1 January 2021 246 – 46 (344) (18) 15 248 1 827 17 005
Settlement of share-based payments – – – – 70 – 70
Net fair value gains/(losses) – – – 33 – – 33
Profit for the year – – – – – 482 482
As of 31 December 2021 246 46 (344) 15 15 318 2 309 17 590
(1) Treasury shares decrease retained earnings.
204 224 NOKIA IN 2021 NOKIA IN 2021 225 205

continued
14. Fair value of financial instruments Fair value through

Carrying amounts
Fair value through
Fair value(1)
Financial assets and liabilities recorded at fair value are categorized based on the amount of unobservable inputs used to measure their fair value. Amortized profit and loss fair value reserve
Three hierarchical levels are based on an increasing amount of judgment associated with the inputs used to derive fair valuation for these assets EURm cost Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Total Total
and liabilities, level 1 being market values for exchange traded products, level 2 being primarily based on publicly available market information, As of 31 December 2020
and level 3 requiring most management judgment. At the end of each reporting period, Nokia categorizes its financial assets and liabilities to the Non-current financial investments – – – 1 – – – 1 1
appropriate level of fair value hierarchy. Items carried at fair value in the following table are measured at fair value on a recurring basis. Non-current loan receivables from Group companies 2 644 – – – – – – 2 644 2 644
Carrying amounts Fair value(1) Non-current loan receivables from other companies 1 – – – – – – 1 1
Fair value through Fair value through Current loan receivables from Group companies 4 728 – – – – – – 4 728 4 728
Amortized profit and loss fair value reserve
Other current financial assets from Group companies
EURm cost Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Total Total
including derivatives – – 49 – – – – 49 49
As of 31 December 2021
Other current financial assets from other companies
Non-current financial investments – – – 1 – – – 1 1 including derivatives – – 149 – – – – 149 149
Non-current loan receivables from Group companies 2 765 – – – – – – 2 765 2 765 Current financial investments 134 – 836 – – 100 – 1 070 1 070
Non-current loan receivables from other companies 1 – – – – – – 1 1 Cash and cash equivalents 2 502 – 2 541 – – – – 5 043 5 043
Current loan receivables from Group companies 5 060 – – – – – – 5 060 5 060 Total financial assets 10 009 – 3 575 1 – 100 – 13 685 13 685
Other current financial assets from Group companies
Long-term interest-bearing liabilities to other
companies 4 697 – – – – – – 4 697 4 779
Other current financial assets from other companies
Short-term interest-bearing liabilities to Group
companies 8 942 – – – – – – 8 942 8 942
Current financial investments 520 – 1 994 – – – – 2 514 2 514
Short-term interest-bearing liabilities to other
Cash and cash equivalents 2 522 – 1 991 – – – – 4 513 4 513 companies 448 – – – – – – 448 448
Total financial assets 10 868 – 4 275 1 – – – 15 144 15 144 Other financial liabilities to Group companies
Long-term interest-bearing liabilities to other including derivatives – – 144 – – – – 144 144
companies 4 299 – – – – – – 4 299 4 512 Other financial liabilities to other companies
Short-term interest-bearing liabilities to Group including derivatives – – 203 420 – – – 623 623
companies 10 743 – – – – – – 10 743 10 743 Total financial liabilities 14 087 – 347 420 – – – 14 854 14 936
Short-term interest-bearing liabilities to other
(1) The following fair value measurement methods are used for items not carried at fair value: The fair values of long-term interest-bearing liabilities are primarily based on publicly available
companies 26 – – – – – – 26 26
market information (level 2). The fair values of other assets and liabilities, including loans receivable and loans payable are primarily based on discounted cash flow analysis (level 2). The fair
Other financial liabilities to Group companies value is estimated to equal the carrying amount for current financial assets and financial liabilities due to limited credit risk and short time to maturity. Refer to Note 2, Significant accounting
including derivatives – – 118 – – – – 118 118 policies in the consolidated financial statements.
Other financial liabilities to other companies
including derivatives – – 229 504 – – – 733 733 The level 2 category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported
Total financial liabilities 15 068 – 347 504 – – – 15 919 16 132 by prices from observable current market transactions. These include assets and liabilities with fair values based primarily on publicly available
market information, financial assets with fair values based on broker quotes and assets that are valued using the Parent Company’s own valuation
models whereby the material assumptions are market observable. The majority of the Parent Company’s cash equivalents, current investments,
over-the-counter derivatives and certain other products are included within this category.
The level 3 financial assets category includes investments in unlisted equities and unlisted venture funds. The fair value of level 3 investments
is determined using one or more valuation techniques where the use of the market approach generally consists of using comparable market
transactions, while the use of the income approach generally consists of calculating the net present value of expected future cash flows. For
unlisted funds, the selection of appropriate valuation techniques by the fund managing partner may be affected by the availability and reliability
of relevant inputs. In some cases, one valuation technique may provide the best indication of fair value while in other circumstances multiple
valuation techniques may be appropriate.
The inputs generally considered in determining the fair value of level 3 investments include the original transaction price, recent transactions
in the same or similar instruments, completed or pending third-party transactions in the underlying investment or comparable issuers,
subsequent rounds of financing, recapitalizations or other transactions undertaken by the issuer, offerings in the equity or debt capital markets,
and changes in financial ratios or cash flows, adjusted as appropriate for liquidity, credit, market and/or other risk factors. The fair value may be
adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the managing partner in the absence
of market information.
The level 3 investments are remeasured for each reporting date taking into consideration any changes in estimates, projections and assumptions,
as well as any changes in economic and other relevant conditions. Level 3 financial liabilities include a conditional obligation to China Huaxin as
part of the Nokia Shanghai Bell definitive agreements, where China Huaxin obtained the right to fully transfer its ownership interest in Nokia
Shanghai Bell to Nokia in exchange for a future cash settlement. The fair value of the liability is calculated using the net present value of the
expected future cash settlement. Change in this liability does not have an impact on income statement. Refer to Note 31, Significant partly-owned
subsidiaries in the consolidated financial statements.
206 226 NOKIA IN 2021 NOKIA IN 2021 227 207

continued
Reconciliation of the opening and closing balances of level 3 financial assets and liabilities:
16. Provisions
Level 3 Financial Level 3 Financial EURm 2021 2020
EURm Assets Liabilities
Divestment-related 33 32
As of 1 January 2020 1 (631)
Other 10 11
Other movements – 211 Total 43 43
As of 31 December 2020 1 (420)
As of 1 January 2021 1 (420)
Other movements – (84)
17. Interest-bearing liabilities
Carrying amount EURm(1)
As of 31 December 2021 1 (504)
Issuer/borrower Instrument Currency Nominal (million) Final maturity 2021 2020
Nokia Corporation 1.00% Senior Notes(2) EUR 350 March 2021 – 350
15. Derivative financial instruments Nokia Corporation 3.375% Senior Notes(3) USD 500 June 2022 – 418
Assets Liabilities Nokia Corporation 2.00% Senior Notes EUR 750 March 2024 761 766
EURm Fair value(1) Notional(2) Fair value(1) Notional(2) Nokia Corporation EIB R&D Loan EUR 500 February 2025 500 500
As of 31 December 2021 Nokia Corporation NIB R&D Loan(4) EUR 250 May 2025 250 250
Fair value hedges Nokia Corporation 2.375% Senior Notes EUR 500 May 2025 500 500
Interest rate swaps – 185 – – Nokia Corporation 2.00% Senior Notes EUR 750 March 2026 764 767
Cash flow and fair value hedges(3) Nokia Corporation 4.375% Senior Notes USD 500 June 2027 466 451
Cross-currency interest rate swaps 15 265 (68) 441 Nokia Corporation 3.125% Senior Notes EUR 500 May 2028 500 500
Derivatives not designated in hedge accounting relationships carried at fair value Nokia Corporation 6.625% Senior Notes USD 500 May 2039 557 545
through profit and loss Nokia Corporation Other liabilities to Group companies 10 743 8 942
Forward foreign exchange contracts, other companies 123 9 957 (161) 11 537 Nokia Corporation Other liabilities to other companies 26 98
Forward foreign exchange contracts, Group companies 152 7 708 (117) 7 283 Total 15 068 14 087
Currency options bought, other companies – 17 – –
(1) Carrying amount includes EUR 166 million (EUR 224 million in 2020) of fair value gains related to fair value hedge accounting relationships, out of which EUR 203 million (EUR 235 million in
Currency options bought, Group companies – 1 – –
2020) are fair value gains related to discontinued fair value hedge accounting relationships that are amortized over the life of the respective Senior Notes.
Currency options sold, other companies – – – 1 (2) In January 2021, Nokia exercised its issuer call option to redeem 1.00% Senior Notes due March 2021 for the full amount of EUR 350 million. The redemption date for the notes was 15
Currency options sold, Group companies – – – 17 February 2021.
(3) In December 2021, Nokia exercised its issuer call option to redeem 3.375% Senior Notes due June 2022 for the full amount of USD 500 million. The redemption date for the notes was 16
Total 290 18 133 (346) 19 279 December 2021.
As of 31 December 2020 (4) The loan from the Nordic Investment Bank (NIB) is repayable in three equal annual installments in 2023, 2024 and 2025.
Cash flow and fair value hedges(3)
Significant credit facilities and funding programs:
Cross-currency interest rate swaps – – (154) 815
Derivatives not designated in hedge accounting relationships carried at fair value Committed/Uncommitted Financing arrangement Currency Nominal (million) 2021 2020
through profit and loss Committed Revolving Credit Facility(1) EUR 1 500 – –
Forward foreign exchange contracts, other companies 147 7 359 (49) 5 721 Uncommitted Finnish Commercial Paper Programme EUR 750 – –
Forward foreign exchange contracts, Group companies 49 3 032 (141) 5 551 Uncommitted Euro-Commercial Paper Programme EUR 1 500 – –
Currency options bought, other companies 3 279 – – Uncommitted Euro Medium Term Note Programme(2) EUR 5 000 2 500 2 850
Currency options bought, Group companies – 6 – – Total 2 500 2 850
Currency options sold, other companies – – – 6 (1) Nokia exercised its option to extend the maturity date of the Revolving Credit Facility in June 2021. Subsequent to the extension, the facility has its maturity in June 2026, except for EUR 88
Currency options sold, Group companies – – (3) 279 million having its maturity in June 2024.
Total 199 10 676 (347) 12 372 (2) All euro-denominated bonds have been issued under the Euro Medium Term Note Programme.
(1) Included in other current financial assets and other current financial liabilities in the statement of financial position. All borrowings and credit facilities presented in the tables above are senior unsecured and have no financial covenants.
(2) Includes the gross amount of all notional values for contracts that have not yet been settled or cancelled. The amount of notional value outstanding is not necessarily a measure or indication
of market risk as the exposure of certain contracts may be offset by that of other contracts.
(3) Cross-currency interest rate swaps have been designated partly as fair value hedges and partly as cash flow hedges.
Derivative financial instrument designation to hedging relationships in the table above presents the use of and accounting for derivative financial
instruments from the perspective of the Parent Company’s standalone financial statements, which may differ from the designation in the
consolidated financial statements. Refer to Note 23, Derivative financial instruments in the consolidated financial statements.
208 228 NOKIA IN 2021 NOKIA IN 2021 229 209

Signatures
Notes to the Parent Company financial statements Signing of the Annual Accounts and the
continued Review of the Board of Directors 2021
18. Accrued expenses and other liabilities The distributable funds on the balance sheet of the Company on 31 December 2021 were EUR 17 283 million, of which the profit for the
financial year 2021 was EUR 482 million.
EURm 2021 2020
Accrued interest expenses 45 47 The Board of Directors proposes to the Annual General Meeting that based on the balance sheet to be adopted for the financial year ended on
Salaries and social expenses 13 21 31 December 2021, no dividend is distributed by a resolution of the Annual General Meeting. Instead, the Board of Directors proposes to be
VAT and other indirect taxes 3 19 authorized to decide in its discretion on the distribution of an aggregate maximum of EUR 0.08 per share as dividend and/or as assets from the
Other accrued expenses to Group companies 53 44
invested unrestricted equity fund.
Other accrued expenses to other companies 24 22 On the date of issuing the financial statements for 2021 the number of the Company’s shares is 5 696 261 159, and the authorization would
Total 138 153 equal to an approximate maximum of EUR 456 million.(1)
The proposal on the use of profit is in accordance with the Company’s dividend policy.
19. Commitments and contingencies (1) The number of the Company’s shares on 31 December 2021 was 5 675 461 159 after which the Company has issued 20 800 000 new shares.
EURm 2021 2020
Contingent liabilities on behalf of Group companies
Leasing guarantees 551 274 3 March 2022
Other guarantees 1 281 1 225

Contingent liabilities on behalf of other companies
Other guarantees – 5

As of 31 December 2021 operating lease commitments amounted to EUR 1 million (EUR 2 million in 2020).
Sari Baldauf
Kari Stadigh
20. Loans granted to the management of the Company Chair
There were no loans granted to the members of the Nokia Leadership Team and Board of Directors as of 31 December 2021 or 2020.
21. Notes to the statement of cash flows

EURm 2021 2020
Bruce Brown Thomas Dannenfeldt
Adjustments for
Depreciation and amortization 1 7
Income tax (3) 41
Financial income and expenses, net (133) (182)
Impairment charges 6 1 Jeanette Horan Edward Kozel
Asset retirements 11 1

Share-based payment 70 49
Disposal of businesses (10) –
Group contributions 360 440
Other financial items (600) – Søren Skou Carla Smits-Nusteling
Total (298) 356
22. Nokia companies

Refer to Note 30, Group companies in the consolidated financial statements. Pekka Lundmark
President and CEO
23. The shares of the Parent Company
Refer to Note 19, Equity in the consolidated financial statements.
24. Financial risk management

The Auditor’s note
Nokia has a systematic and structured approach to financial risk management across business operations and processes. Financial risk
management policies and procedures are group-wide, and there are no separate or individual financial risk management policies or procedures for Auditor’s Report has been issued today.
the Parent Company. Hence, internal and external financial risk exposures and transactions are managed only in the context of the Nokia financial
Helsinki, 3 March 2022
risk management strategy. The Parent Company is the centralized external dealing entity in Nokia. The Parent Company executes all significant
external financial transactions with banks based on Nokia’s financial risk management strategy and executes identical opposite internal financial Deloitte Oy
transactions with Nokia companies as required. Refer to Note 34, Financial Risk Management in the consolidated financial statements.
Authorized Public Accountant Firm
25. Subsequent events
Share buyback program Marika Nevalainen
On 3 February 2022, Nokia announced that its Board of Directors is initiating a share buyback program under the current authorization from the
AGM to repurchase shares. The program targets to return up to EUR 600 million of cash to shareholders in tranches over a period of two years, APA
subject to continued authorization from the Annual General Meeting. Nokia launched the first phase of the program on 11 February 2022 with
repurchases starting on 14 February 2022. For more details about the share buyback program and how Nokia plans to distribute funds to its
shareholders, refer to Note 19, Equity in the notes to the consolidated financial statements.
210 230 NOKIA IN 2021 NOKIA IN 2021 211

Auditor’s report
Auditor’s report
To the Annual General Meeting of Nokia Corporation Our application of materiality Key audit matter How our audit addressed the key audit matter
We define materiality as the magnitude of misstatement in the Revenue recognition – Accounting for significant and Our audit procedures related to the determination of the appropriateness of
Report on the Audit of the Financial Statements financial statements that makes it probable that the economic complex contracts the accounting for significant and complex contracts included the following,
Opinion decisions of a reasonably knowledgeable person would be changed Refer to Notes 2 and 6 to the financial statements among others:
We have audited the financial statements of Nokia Corporation or influenced. We use materiality both in planning the scope of our
(business identity code 0112038-9) for the year ended 31 December audit work and in evaluating the results of our work. The Company recognises revenue in accordance with ■ We assessed management’s accounting policy in relation to the areas of
2021. The financial statements comprise the consolidated balance International Financial Reporting Standard 15 Revenue from complexity identified in all significant and complex contracts to determine
Based on our professional judgement, we determined materiality Contracts with Customers from contracts. compliance of the policy with IFRS 15;
sheet, income statement, statement of comprehensive income, for the financial statements as a whole as follows:
statement of cash flows, statement of changes in shareholders’ equity A number of the contracts that the Company enters into are ■ We tested the operating effectiveness of controls over revenue
and notes, including a summary of significant accounting policies, Materiality in the Group financial statements particularly significant in value, and contain highly complex terms recognition of significant and complex contracts, specifically focusing
as well as the parent company’s balance sheet, income statement, and conditions which impact revenue recognition. on controls relating to the areas of accounting complexity;
Materiality €170 million
statement of cash flows and notes.
Basis for determining 0.8% of consolidated net sales and 2.0% Such complexities included the assessment of whether to ■ We utilised data analytics to identify those contracts with higher levels
In our opinion materiality of gross profit combine two contracts entered into at similar times, accounting of risk based on size and complexity;
■ the consolidated financial statements give a true and fair view of Rationale for the Given the importance of net sales and gross for modifications to existing contracts and accounting for
contractual discounts. ■ We analysed the terms and conditions of significant and complex
the group’s financial position, financial performance and cash flows benchmark applied profit to investors and other users of the
contracts, and obtained and read the Company’s accounting paper setting
in accordance with International Financial Reporting Standards financial statements, we have used these
Given the level of complexity and management judgement out management’s accounting conclusions;
(IFRS) as adopted by the EU. as primary benchmarks.
involved in the accounting for significant and complex contracts,
performing audit procedures to evaluate the reasonableness of ■ We met with senior management in the finance and operations teams
■ the financial statements give a true and fair view of the relevant to the significant and complex contracts to make inquiries
parent company’s financial performance and financial position Key audit matters these accounting judgements required a high degree of auditor
regarding commercial and financial considerations relating to those
in accordance with the laws and regulations governing the Key audit matters are those matters that, in our professional judgement, and there was a significant audit effort in obtaining
sufficient audit evidence. contracts;
preparation of financial statements in Finland and comply with judgment, were of most significance in our audit of the financial
statutory requirements. statements of the current period. These matters were addressed in This matter is a significant risk of material misstatement referred ■ We consulted with our revenue recognition accounting experts to assess
the context of our audit of the financial statements as a whole and to in EU Regulation No 537/2014, point (c) of Article 10(2). the accounting for certain complex elements within these contracts; and
Our opinion is consistent with the additional report submitted in forming our opinion thereon, and we do not provide a separate
to the Audit Committee. ■ We assessed whether management’s conclusions were in accordance
opinion on these matters.
with the terms and conditions of the contract and compliant with IFRS 15.
Basis for opinion We have also addressed the risk of management override of internal There are no significant risks of material misstatement referred to in EU regulation No 537/2014, point (c) of Article 10(2) relating to the parent
We conducted our audit in accordance with good auditing practice controls. This includes consideration of whether there was evidence company’s financial statements.
in Finland. Our responsibilities under good auditing practice are of management bias that represented a risk of material misstatement
further described in the Auditor’s Responsibilities for the Audit of the due to fraud.
Financial Statements section of our report. Responsibilities of the Board of Directors and the Managing Auditor’s Responsibilities for the Audit of the Financial
Director for the Financial Statements Statements
We are independent of the parent company and of the group
The Board of Directors and the Managing Director are responsible for Our objectives are to obtain reasonable assurance on whether the
companies in accordance with the ethical requirements that are
the preparation of consolidated financial statements that give a true financial statements as a whole are free from material misstatement,
applicable in Finland and are relevant to our audit, and we have
and fair view in accordance with International Financial Reporting whether due to fraud or error, and to issue an auditor’s report that
fulfilled our other ethical responsibilities in accordance with these
Standards (IFRS) as adopted by the EU, and of financial statements includes our opinion. Reasonable assurance is a high level of
requirements.
that give a true and fair view in accordance with the laws and assurance, but is not a guarantee that an audit conducted in
In our best knowledge and understanding, the non-audit services that regulations governing the preparation of financial statements in accordance with good auditing practice will always detect a material
we have provided to the parent company and group companies are in Finland and comply with statutory requirements. The Board of misstatement when it exists. Misstatements can arise from fraud or
compliance with laws and regulations applicable in Finland regarding Directors and the Managing Director are also responsible for such error and are considered material if, individually or in aggregate, they
these services, and we have not provided any prohibited non-audit internal control as they determine is necessary to enable the could reasonably be expected to influence the economic decisions of
services referred to in Article 5(1) of regulation (EU) 537/2014. preparation of financial statements that are free from material users taken on the basis of the financial statements.
The non-audit services that we have provided have been disclosed misstatement, whether due to fraud or error.
As part of an audit in accordance with good auditing practice, we
in note 3 to the parent company financial statements.
In preparing the financial statements, the Board of Directors and the exercise professional judgment and maintain professional skepticism
We believe that the audit evidence we have obtained is sufficient Managing Director are responsible for assessing the parent company’s throughout the audit. We also:
and appropriate to provide a basis for our opinion. and the group’s ability to continue as going concern, disclosing, as
applicable, matters relating to going concern and using the going ■ Identify and assess the risks of material misstatement of the
concern basis of accounting. The financial statements are prepared financial statements, whether due to fraud or error, design and
using the going concern basis of accounting unless there is an perform audit procedures responsive to those risks, and obtain
intention to liquidate the parent company or the group or cease audit evidence that is sufficient and appropriate to provide a basis
operations, or there is no realistic alternative but to do so. for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
■ Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the parent company’s or the group’s internal
control.
■ Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.

Auditor’s ESEF asssurance report
Auditor’s report
continued
■ Conclude on the appropriateness of the Board of Directors’ and the Other reporting requirements Independent Auditor’s Report on Nokia Oyj’s Auditor’s responsibilities
Managing Director’s use of the going concern basis of accounting Information on our audit engagement In accordance with the Engagement Letter we will express an opinion
and based on the audit evidence obtained, whether a material We were first appointed at the Annual General Meeting on 21 May 2019
ESEF Consolidated Financial Statements on whether the electronic tagging of the consolidated financial
uncertainty exists related to events or conditions that may cast to audit the financial statements for the year ended 31 December statements complies in all material respects with the Article 4 of
significant doubt on the parent company’s or the group’s ability 2020. Our appointment represents a total period of uninterrupted ESEF RTS. We have conducted a reasonable assurance engagement
to continue as a going concern. If we conclude that a material To the Board of Directors of Nokia Oyj in accordance with International Standard on Assurance Engagements
engagement of two (2) years.
uncertainty exists, we are required to draw attention in our auditor’s We have performed a reasonable assurance engagement on the ISAE 3000.
report to the related disclosures in the financial statements or, Other information iXBRL tagging of the consolidated financial statements included in the
if such disclosures are inadequate, to modify our opinion. Our The Board of Directors and the Managing Director are responsible for digital files (549300A0JPRWG1KI7U06-2021-12-31-fi.zip) of Nokia The engagement includes procedures to obtain evidence on:
conclusions are based on the audit evidence obtained up to the the other information. The other information comprises the report Oyj for the financial year 1.1. – 31.12.2021 to ensure that the financial ■ whether the tagging of the primary financial statements in
date of our auditor’s report. However, future events or conditions of the Board of Directors and the information included in the Annual statements are tagged with iXBRL mark ups in accordance with the the consolidated financial statements complies in all material
may cause the parent company or the group to cease to continue Report but does not include the financial statements and our auditor’s requirements of Article 4 of EU Commission Delegated Regulation (EU) respects with Article 4 of the ESEF RTS
as a going concern. report thereon. 2018/815 (ESEF RTS).
■ whether the ESEF financial statements are consistent with the
■ Evaluate the overall presentation, structure and content of the Our opinion on the financial statements does not cover the other Responsibilities of the board of directors and managing director audited financial statements
financial statements, including the disclosures, and whether the information. The Board of Directors and Managing Director are responsible for
financial statements represent the underlying transactions and the preparation of the Report of Board of Directors and financial The nature, timing and extent of the procedures selected depend on
In connection with our audit of the financial statements, our statements (ESEF financial statements) that comply with the ESEF RTS. the auditor’s judgement including the assessment of risk of material
events so that the financial statements give a true and fair view.
responsibility is to read the other information and, in doing so, This responsibility includes: departures from requirements sets out in the ESEF RTS, whether due
■ Obtain sufficient appropriate audit evidence regarding the financial consider whether the other information is materially inconsistent to fraud or error.
information of the entities or business activities within the group to with the financial statements or our knowledge obtained in the audit, ■ preparation of ESEF financial statements in accordance with
express an opinion on the consolidated financial statements. We are or otherwise appears to be materially misstated. With respect to the Article 3 of ESEF RTS We believe that the evidence we have obtained is sufficient and
responsible for the direction, supervision and performance of the report of the Board of Directors, our responsibility also includes appropriate to provide a basis for our statement.
■ tagging the consolidated financial statements included within
group audit. We remain solely responsible for our audit opinion. considering whether the report of the Board of Directors has been
the ESEF financial statements by using the iXBRL mark ups in Opinion
prepared in accordance with the applicable laws and regulations.
We communicate with those charged with governance regarding, accordance with Article 4 of ESEF RTS In our opinion the tagging of the primary financial statements in
among other matters, the planned scope and timing of the audit In our opinion, the information in the report of the Board of Directors the consolidated financial statements included in the ESEF financial
■ ensuring consistency between ESEF financial statements and statements of Nokia Oyj (549300A0JPRWG1KI7U06-2021-12-31-fi.
and significant audit findings, including any significant deficiencies is consistent with the information in the financial statements and the
audited financial statements zip) for the year ended 31.12.2021 complies in all material respects
in internal control that we identify during our audit. report of the Board of Directors has been prepared in accordance
with the applicable laws and regulations. The Board of Directors and Managing Director are also responsible with the requirements of ESEF RTS.
We also provide those charged with governance with a statement for such internal control as they determine is necessary to enable
that we have complied with relevant ethical requirements regarding If, based on the work we have performed, we conclude that there Our audit opinion on the consolidated financial statements
the preparation of ESEF financial statements in accordance the of Nokia Oyj for the year ended 31.12.2021 is included in our
independence, and communicate with them all relationships and is a material misstatement of the other information, we are required
requirements of ESEF RTS. Independent Auditor’s Report 3.3.2022. In this report, we do
other matters that may reasonably be thought to bear on our to report that fact. We have nothing to report in this regard.
independence, and where applicable, related safeguards. Auditor’s independence and quality control not express an audit opinion or any other assurance on the
Other statements consolidated financial statements.
We are independent of the company in accordance with the ethical
From the matters communicated with those charged with We support that the financial statements should be adopted. The
requirements that are applicable in Finland and are relevant to the
governance, we determine those matters that were of most proposal by the Board of Directors regarding the use of the profit
engagement we have performed, and we have fulfilled our other Helsinki, 3 March 2022
significance in the audit of the financial statements of the current shown in the balance sheet (and the distribution of other unrestricted
ethical responsibilities in accordance with these requirements.
period and are therefore the key audit matters. We describe these equity) is in compliance with the Limited Liability Companies Act.
Deloitte Oy
matters in our auditor’s report unless law or regulation precludes We support that the Members of the Board of Directors of the parent The auditor applies International Standard on Quality Control (ISQC) 1 Audit firm
public disclosure about the matter or when, in extremely rare company and the Managing Director should be discharged from and therefore maintains a comprehensive quality control system
circumstances, we determine that a matter should not be liability for the financial period audited by us. including documented policies and procedures regarding compliance Marika Nevalainen
communicated in our report because the adverse consequences with ethical requirements, professional standards and applicable legal Authorised Public Accountant (KHT)
of doing so would reasonably be expected to outweigh the public and regulatory requirements.
Helsinki, 3 March 2022
interest benefits of such communication.
Deloitte Oy
Audit Firm
Marika Nevalainen
Authorised Public Accountant (KHT)

Other information
Other Forward-looking statements

Introduction and use of certain terms
Glossary220
Investor information
218
219
223
information
Contact information 224
FP5

Other information
Forward-looking statements Introduction and use of certain terms
Forward-looking statements These statements are based on management’s best assumptions Introduction and use of certain terms
and beliefs in light of the information currently available to it and are
Certain statements contained in this report constitute Nokia Corporation is a public limited liability company incorporated
subject to a number of risks and uncertainties, many of which are
“forward-looking statements.” Forward-looking statements provide under the laws of the Republic of Finland and registered to the Finnish
beyond our control, which could cause actual results to differ materially
Nokia’s current expectations of future events and trends based on Trade Register since 1896. In this report, any reference to “we,” “us,”
from such statements. These statements are only predictions based
certain assumptions and include any statement that does not directly “the Group,” “the company” or “Nokia” means Nokia Corporation
upon our current expectations and views of future events and
relate to any current or historical fact. The words “believe,” “expect,” and its consolidated subsidiaries and generally Nokia’s continuing
developments and are subject to risks and uncertainties that are
“expectations,” “anticipate,” “foresee,” “see,” “target,” “estimate,” operations, except where we separately specify that the term means
difficult to predict because they relate to events and depend on
“designed,” “aim,” “plan,” “intend,” “influence,” “assumption,” Nokia Corporation or a particular subsidiary or business segment only
circumstances that will occur in the future. Risks and uncertainties that
“focus,” “continue,” “project,” “should,” “is to,” “will,” “strive,” “may” or our discontinued operations. References to “our shares,” matters
could affect these statements include but are not limited to the risk
or similar expressions as they relate to us or our management are relating to our shares or matters of corporate governance refer to the
factors specified under the section “Operating and financial review
intended to identify these forward-looking statements, as well as shares and corporate governance of Nokia Corporation.
and prospects—Risk factors” of this report and in our other filings
statements regarding:
or documents furnished with the U.S. Securities and Exchange Nokia Corporation has published its consolidated financial statements
A) business strategies, market expansion, growth management, and Commission. Other unknown or unpredictable factors or underlying in euro for periods beginning on or after 1 January 1999. In this
future industry trends and megatrends and our plans to address assumptions subsequently proven to be incorrect could cause actual report, references to “EUR,” “euro” or “€” are to the common currency
them; results to differ materially from those in the forward-looking statements. of the European Economic and Monetary Union, references to
We do not undertake any obligation to publicly update or revise “dollars,” “US dollars,” “USD” or “$” are to the currency of the United
B) future performance of our businesses and any future distributions forward-looking statements, whether as a result of new information,
and dividends; States, and references to “Chinese yuan” or “Chinese yuan renminbi”
future events or otherwise, except to the extent legally required. or “CNY” are to the official currency of the People’s Republic of China.
C) expectations and targets regarding financial performance, results,
operating expenses, cash flows, taxes, currency exchange rates,
hedging, cost savings and competitiveness, as well as results
of operations including targeted synergies and those related to
market share, prices, net sales, income and margins;
D) expectations, plans, timelines or benefits related to changes in our
organizational and operational structure;
E) market developments in our current and future markets and their
seasonality and cyclicality, including the communications service
provider market, as well as general economic conditions, future
regulatory developments and the expected impact, timing and
duration of the COVID-19 pandemic on our businesses, our supply
chain, our customers’ businesses and the general market and
economic conditions;
F) our position in the market, including product portfolio and
geographical reach, and our ability to use the same to develop
the relevant business or market and maintain our order pipeline
over time;
G) any future collaboration or business collaboration agreements or
patent license agreements or arbitration awards, including income
from any collaboration or partnership, agreement or award;
H) timing of the development and delivery of our products and
services, including our short-term and longer-term expectations
around the deployment of 5G and our ability to capitalize on such
deployment
as well as use our global installed base as the platform for success
in 5G, and the overall readiness of the 5G ecosystem;
I) the outcome of pending and threatened litigation, arbitration,
disputes, regulatory proceedings or investigations by authorities;
J) restructurings, investments, capital structure optimization efforts,
divestments and our ability to achieve the financial and operational
targets set in connection with any such restructurings,
investments, and capital structure optimization efforts including
our ongoing cost savings program;
K) future capital expenditures, temporary incremental expenditures
or other R&D expenditures to develop or rollout new products,
including 5G; and
L) the sustainability and corporate responsibility contained in the
sustainability and corporate responsibility section of this report.

Other information
Glossary
Artificial Intelligence (AI): Autonomous and adaptive intelligence of Discontinued operations: The continuing financial effects of the HERE IP (Internet Protocol): A network layer protocol that offers a
Glossary machines, where machines have the ability to perform tasks in complex business and the Devices & Services business. HERE was divested to an connectionless internet work service and forms part of the
2G (Second Generation Mobile Communications): Also known as environments without constant guidance by a user and have the ability automotive consortium and substantially all of the Devices & Services (Transmission Control Protocol) TCP/IP protocol.
GSM (Global System for Mobile Communications): A digital system for to improve performance by learning from experience. business was sold to Microsoft.
mobile communications that is based on a widely-accepted standard IP (Intellectual Property): Intellectual property results from original
and typically operates in the 900 MHz, 1800 MHz and 1900 MHz Bandwidth: The width of a communication channel, which affects Ecosystem: An industry term to describe the increasingly large creative thought, covering items such as patents, copyright material
frequency bands. transmission speeds over that channel. communities of mutually beneficial partnerships that participants such and trademarks, as well as business models and plans.
as hardware manufacturers, software providers, developers, publishers,
3G (Third Generation Mobile Communications): The third Base station: A network element in a mobile network responsible entertainment providers, advertisers and ecommerce specialists form IPR (Intellectual Property Rights): Legal rights protecting the
generation of mobile communications standards designed for for radio transmission and reception to or from the mobile station. in order to bring their offerings to market. At the heart of the major economic exploitation of intellectual property, a generic term used to
carrying both voice and data generally using WCDMA or close variants. ecosystems in the mobile devices and related services industry is the describe products of human intellect, for example patents, that have
Broadband: The delivery of higher bandwidth by using transmission
See also WCDMA. operating system and the development platform upon which services an economic value.
channels capable of supporting data rates greater than the primary
3GPP (The Third Generation Partnership Project): A consortium rate of 9.6 Kbps. are built. IP/MPLS (IP Multiprotocol Label Switching): IP/MPLS is a routing
comprising several standards organizations which develop protocols Enterprise verticals: One of Nokia’s customer segments. An enterprise technique in telecommunications networks that directs data from one
Churn: A measure of the number of customers or subscribers who
for mobile telecommunications. The initial goal was to develop a global vertical represents a grouping of companies by an industry (like energy node to the next based on short path labels rather than long network
leave their service provider, e.g. a mobile operator, during a given
technical specification for a 3G mobile phone system. Since then, or transportation) that offers products and services that meet specific addresses, thus avoiding complex lookups in a routing table and
time period.
the operations have been extended and today the main focus is needs of that industry. Within the enterprise verticals segments, we speeding traffic flows.
on 5G networks. Cloud: Cloud computing is a model for enabling ubiquitous, primarily focus on transportation, energy, manufacturing, logistics and IPR licensing: Generally an agreement or an arrangement where a
convenient, on-demand network access to a shared pool of the public sector.
4G (Fourth Generation Mobile Communications): The fourth company allows another company to use its intellectual property
configurable computing resources (e.g., networks, servers, storage,
generation of mobile communications standards based on LTE, ETSI (European Telecommunications Standards Institute): (such as patents, trademarks or copyrights) under certain terms.
applications and services) that can be rapidly provisioned and
offering IP data connections only and providing true broadband Standards produced by the ETSI contain technical specifications laying
released with minimal management effort. LTE (Long-Term Evolution): 3GPP radio technology evolution
internet access for mobile devices. See also LTE. down the characteristics required for a telecommunications product. architecture and a standard for wireless communication of high-speed
Cloud and Network Services: Our Cloud and Network Services business
5G (Fifth Generation Mobile Communications): The next major Fixed Wireless Access (FWA): Uses wireless networks to connect fixed data. Also referred to as 4G.
group enables CSPs and enterprises to deploy and monetize 5G,
phase of mobile telecommunications standards. 5G is a complete locations such as homes and businesses with broadband services.
cloud-native software and as-a-Service delivery models. Mission-critical networks/communications: One of the key elements
redesign of network architecture with the flexibility and agility to
FP5: Nokia's fifth generation of high-performance IP routing silicon, of 5G. Mission-critical communications meets the needs of emergency
support upcoming service opportunities. It delivers higher speeds, CloudBand: Our cloud management and orchestration solutions
and the latest range of our AirScale 5G products. responders such as emergency operations centers, fire departments,
higher capacity, extremely low latency and greater reliability. enabling a unified cloud engine and platform for Network Functions
emergency vehicles, police, and search and rescue services, replacing
Virtualization (NFV). See also NFV. Future X: A network architecture – a massively distributed, cognitive,
6G (Sixth Generation Mobile Communications): The cellular industry traditional radio with new communications capabilities available to
introduces a new generation about every ten years. The next Cloud RAN: Cloud RAN refers to all or some of the baseband functions continuously adaptive, learning and optimizing network connecting smartphone users.
generation of technology is expected to be introduced by 2030 being run on a commercial off-the-shelf (COTS) computing platform humans, senses, things, systems, infrastructure and processes.
Mobile broadband: Refers to high-speed wireless internet connections
and is generally referred to as 6G. rather than purpose-built hardware. G.fast: A fixed broadband technology able to deliver up to 1Gbps and services designed to be used from multiple locations.
Access network: A telecommunications network between a local Common Software Foundation (CSF): As a coherent software suite, over very short distances (for example, for in-building use, also
called “Fiber-to-the-Building”). Launched in 2014, G.fast uses more Mobile Networks: Our Mobile Networks business group offers products
exchange and the subscriber station. Nokia’s cloud-native Common Software Foundation is designed to
frequencies and G.fast Vectoring techniques to achieve higher speeds. and services for radio access networks covering technologies from
deliver applications that are hardware- and vendor-agnostic, and easy
Airframe: Our 5G-ready, end-to-end data center solution that 2G to 5G, and microwave radio links for transport networks.
to deploy, integrate, use and upgrade. GPON (Gigabit Passive Optical Network): A fiber access technology
combines the benefits of cloud computing technologies with the
that delivers 25Gbps over a single optical fiber to multiple end points MPLS: Multiprotocol Label Switching, a routing technique for networks.
requirements of the core and radio telecommunications world. It is Converged core: Wireless and fixed access convergence within the
available in Rackmount and Open Compute Project (OCP) form factors. core. As we move towards a 5G standalone core, service providers including residential and enterprise sites. MSO: Multiple System Operators (MSO) are operators of multiple cable
This enables the solution to be very scalable: from small distributed will be able to use a common set of control plane functions within television systems. The majority of system operators run cable systems
GSM (Global System for Mobile Communications): A digital system for
latency-optimized data centers to massive centralized hyperscale the core to manage both wireless and fixed user plane functions. The in more than one community and hence most of them are multiple
mobile communications that is based on a widely accepted standard
data center deployment. ability of a unified control plane will simplify operations and provide system operators.
and typically operates in the 900 MHz, 1800 MHz and 1900 MHz
independent location, scaling and lifecycle management capabilities. frequency bands. See also 2G.
AirScale Radio Access: A 5G-ready complete radio access generation Network Infrastructure: Our Network Infrastructure business group
that helps operators address the increasing demands of today and Convergence: The coming together of two or more disparate provides fiber, copper, fixed wireless access technologies, IP routing,
GSM-R (GSM-Railway): An international wireless communications
tomorrow. The solution comprises: Nokia AirScale Base Station with disciplines or technologies. Convergence types are, for example, data center, subsea and terrestrial optical networks – along with related
standard for railway communication and applications. A sub-system
multiband radio frequency elements and system modules; Nokia IP convergence, fixed-mobile convergence and device convergence. services – to customers including communications service providers,
of European Rail Traffic Management System (ERTMS), it is used for
AirScale Active Antennas; Cloud RAN with Nokia AirScale Cloud Base webscales (including hyperscalers), digital industries and governments.
Core network: A combination of exchanges and the basic transmission communication between train and railway regulation control centers.
Station Server and the cloud-based AirScale RNC (Radio Network
Controller) for 3G; Nokia AirScale Wi-Fi; common software; and services equipment that together form the basis for network services. Hexa-X: European Commission’s flagship 6G initiative for research NFV (Network Functions Virtualization): Principle of separating
which use intelligent analytics and extreme automation to maximize into the next generation of wireless networks. The initiative began in network functions from the hardware they run on by using virtual
CSPs: Communications service providers. One of Nokia’s customer
the performance of hybrid networks. January 2021 with Nokia as project lead, working closely with a strong hardware abstraction.
segments.
consortium of European partners. Nokia Bell Labs: Our research arm engaged in discovering and
Alcatel-Lucent: Alcatel-Lucent Group, that has been part of the Customer Experience Management: Software suite used to manage
Nokia Group since 2016. Hyperscalers: One of Nokia’s customer segments. Hyperscaler refers developing the technological shifts needed for the next phase of
and improve the customer experience, based on customer, device human existence as well as exploring and solving complex problems
and network insights. to companies like Alphabet (Google), Amazon (Amazon Web Services),
Anyhaul: Mobile transport solution for 5G networks covering to radically redefine networks.
Microsoft and Meta Platforms (Facebook) that provide cloud solutions
microwave, IP, optical and broadband. Digital: A signaling technique in which a signal is encoded into digits at a global scale leveraging massive connected data centers. Nokia Technologies: Our Nokia Technologies business group is
for transmission. responsible for managing Nokia’s patent portfolio and monetizing
Internet of Things (IoT): All things such as cars, the clothes we wear,
household appliances and machines in factories connected to the Nokia’s intellectual property, including patents, technologies and the
internet and able to automatically learn and organize themselves. Nokia brand.
220 220 NOKIA IN 2021 NOKIA IN 2021 221

Other information
Glossary Investor information
continued
Non-Standalone (NSA): Network architecture that is built over an Standalone (SA): Network architecture that allows independent
existing 4G network. operation of a 5G service without interaction with an existing 4G core
Investor information
and 4G radio network. Information on the internet
Operating System (OS): Software that controls the basic operation www.nokia.com
of a computer or a mobile device, such as managing the processor and Technology licensing: Generally refers to an agreement or
memory. The term is also often used to refer more generally to the arrangement where under certain terms a company provides Available on the internet: financial reports, members of the Group Leadership Team, other investor-related materials and events, and press
software within a device, for example, the user interface. another company with its technology and possibly know-how, releases as well as environmental and social information, including our People & Planet Report, Code of Conduct, Corporate Governance
whether protected by intellectual property or not, for use in Statement and Remuneration Statement.
O-RAN: The term O-RAN refers to interfaces and architecture elements
products or services offered by the other company.
as specified by the O-RAN alliance. O-RAN Alliance is a specification Investor Relations contacts
group defining next-generation RAN infrastructures, empowered by Telco cloud: Applying cloud computing, SDN and NFV principles in [email protected]
principles of intelligence and openness. telecommunications environment, for example, separating application
software from underlying hardware with automated, programmable Annual General Meeting
Packet: Part of a message transmitted over a packet-switched network. Date: 5 April 2022
interfaces while still retaining telecommunications requirements such
Platform: Software platform is a term used to refer to an operating as high availability and low latency.
Place: Espoo, Finland
system or programming environment, or a combination of the two.
Transmission: The action of conveying signals from one point to one
or more other points. Dividend
PON (Passive Optical Network): A fiber access architecture in which
The Board proposes to the Annual General Meeting 2022 to be authorized to decide, in its discretion, on the distribution of an aggregate
unpowered fiber optic splitters are used to enable a single optical fiber
TXLE (Technical Extra-Large Enterprise): Technically sophisticated maximum of EUR 0.08 per share as dividend and/or as assets from the invested unrestricted equity fund.
to serve multiple endpoints without having to provide individual fibers
companies, such as banks, that invest heavily in their own network
between the hub and customer. Financial reporting
infrastructures to gain a key competitive advantage.
Private wireless network: Private wireless is a standalone network Our interim reports in 2022 are planned to be published on 28 April 2022, 21 July 2022 and 20 October 2022. The full-year 2022 results are
VDSL2 (Very High Bit Rate Digital Subscriber Line 2): A fixed planned to be published in February 2023.
focused on industrial operational assets and users. A private wireless
broadband technology, the successor of ADSL. Launched in 2007,
network provides broadband connectivity, similar to a public wireless
it typically delivers a 30Mbps broadband service from a street Information published in 2021
network, but is owned and controlled by the organization that built or
cabinet (also called a Fiber to the Node deployment) over existing All our global press releases and statements published in 2021 are available on the internet at www.nokia.com/en_int/news/releases.
purchased it.
telephone lines.
Programmable world: A world where connectivity will expand massively, Stock exchanges
VDSL2 vectoring: A fixed broadband technology launched in 2011, The Nokia Corporation share is quoted on the following stock exchanges:
linking people as well as billions of physical objects – from cars, home
able to deliver up to 100Mbps over a VDSL2 line by applying noise
appliances and smartphones, to wearables, industrial equipment and Symbol Trading currency
cancellation techniques to remove cross-talk between neighboring
health monitors. What distinguishes the Programmable World from the Nasdaq Helsinki (since 1915) NOKIA EUR
VDSL2 lines.
Internet of Things (IoT) is the intelligence that is added to data to allow New York Stock Exchange (since 1994) NOK USD
people to interpret and use it, rather than just capture it. Virtual Reality (VR): The simulation of a three-dimensional image or
Euronext Paris (since 2015) NOKIA EUR
environment that can be interacted with in a seemingly real or physical
PSE-3: The PSE-3 chipset is the first coherent digital signal processor
way by a person using special electronic equipment, such as a helmet
to implement Probabilistic Constellation Shaping (PCS), a modulation
with a screen inside or gloves fitted with sensors.
technique pioneered by Nokia Bell Labs.
VoLTE (Voice over LTE): Required to offer voice services on an all-IP
RAN (Radio Access Network): A mobile telecommunications system
LTE network and generally provided using IP Multimedia Subsystem,
consisting of radio base stations and transmission equipment.
which is an architectural framework designed to deliver IP-based
SDAN: Software Defined Access Network. multimedia services on telecommunications networks; standardized
by 3GPP.
SDN (Software-Defined Network): Decoupling of network control and
data forwarding to simplify and automate connections in data centers, WAN (Wide Area Network): A geographically distributed private
clouds and across the wide area. telecommunications network that interconnects multiple local
area networks.
SD-WAN: Software-Defined Networking in a Wide Area Network (WAN)
that simplifies and automates enterprise networks, seamlessly WCDMA (Wideband Code Division Multiple Access): A third-generation
connecting users and applications, from branch office to cloud. mobile wireless technology that offers high data speeds to mobile
and portable wireless devices. Also referred to as 3G.
SEP (Standard-Essential Patent): Generally, patents needed
to produce products which work on a standard which companies Webscale companies: Companies which are investing in cloud
declare as essential and agree to license on Fair, Reasonable and technology and network infrastructure on an increasing scale to fulfill
Non-Discriminatory (FRAND) terms. Can also be referred to as their needs for massive, mission-critical networks.
essential patent.
WING: Worldwide IoT Network Grid is a managed service that offers
Single RAN: Single RAN (S-RAN) allows different radio technologies CSPs the ability to support their enterprise customers with global IoT
to be provided at the same time from a single base station, using a connectivity across borders and technologies.
multi-purpose platform.
WLAN (Wireless Local Area Network): A local area network using
Small cells: Low-powered radio access nodes (micro cells or picocells) wireless connections, such as radio, microwave or infrared links,
that are a vital element in handling very dense data traffic demands. in place of physical cables.
3G and LTE small cells use spectrum licensed by the operator; wi-fi
uses unlicensed spectrum which is therefore not under the operator’s
exclusive control.

Other information
Contact information
Contact information
Nokia Head Office
Karakaari 7
FI-02610 Espoo, Finland

FINLAND
Tel. +358 (0) 10 44 88 000

Fax +358 (0) 10 44 81 002
224 NOKIA IN 2021

Copyright © 2022 Nokia Corporation.
All rights reserved. Nokia is a registered
trademark of Nokia Corporation.
www.nokia.com

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Nokia

Nokia Business overview

Financial statements 124

Signing of the Annual Accounts and the

Auditor’s report 212

Auditor’s ESEF assurance report215

Other information 216

Business Nokia in 2021

02 NOKIA IN 2021 NOKIA IN 2021 03

Read more on page 18. Read more on page 104.

04 NOKIA IN 2021 NOKIA IN 2021 05

Helping the world

can help meet some of the most pressing

Average number of employees in 2021 3 200 4 600

06 NOKIA IN 2021 NOKIA IN 2021 07

Our business groups

Segment net sales Segment net sales

11 327 7 674 3 327 1 487 1 502

Segment operating Segment operating

7.9% 7.9% 10.2% 5.4% 80.7% 80.1% 78.9%

08 NOKIA IN 2021 NOKIA IN 2021 09

Letter from our

“ This was the year we hit the reset button. We restarted

10 NOKIA IN 2021 NOKIA IN 2021 11

12 NOKIA IN 2021 NOKIA IN 2021 13

and market view

enterprise verticals and hyperscalers.

grew by 9% to transportation) that offers products and

14 NOKIA IN 2021 NOKIA IN 2021 15

We have identified 10 trends that will shape the future of

16 NOKIA IN 2021 NOKIA IN 2021 17

18 NOKIA IN 2021 NOKIA IN 2021 19

Our path to continued Our Technology

20 NOKIA IN 2021 NOKIA IN 2021 21

1865 1960s 2007 2013 2016 2017 2017-2021

22 NOKIA IN 2021 NOKIA IN 2021 23

24 NOKIA IN 2021 NOKIA IN 2021 25

Mobile Networks provides products and services

Market overview Business overview and

2021 was a transformational year for

26 NOKIA IN 2021 NOKIA IN 2021 27

Mobile Networks continued

The pandemic has accelerated and Business overview and

(1) Dell’Oro Broadband Access 2021 Q3 report

28 NOKIA IN 2021 NOKIA IN 2021 29

Network Infrastructure continued

IP Networks provides IP routing solutions for wavelength-division multiplexing,

30 NOKIA IN 2021 NOKIA IN 2021 31

Cloud and Network Services serves communications service providers,

Business overview and

32 NOKIA IN 2021 NOKIA IN 2021 33

Cloud and Network Services continued

34 NOKIA IN 2021 NOKIA IN 2021 35

Nokia Technologies continued

Industry leading patent portfolio We also have a strong multimedia patent

Using a head and torso simulator to conduct audio

Supply chain, sourcing

to cut emissions. to our suppliers. These include standards

38 NOKIA IN 2021 NOKIA IN 2021 39

Nokia Business overview

Financial statements 124

Auditor’s report 212

Auditor’s ESEF assurance report215

Other information 216

Business Nokia in 2021

“ This was the year we hit the reset button. We restarted

Corporate Corporate governance statement

Board Business description