Q2 2021 Investor presentation 29 July 2021 1 © 2021 Nokia Disclaimer It should be noted that Nokia and its business are exposed to proven to be incorrect could cause actual results to differ companies, including those in the same industry. The primary various risks and uncertainties and certain statements herein that materially from those in the forward-looking statements. We do rationale for presenting these measures is that the management are not historical facts are forward-looking statements. These not undertake any obligation to publicly update or revise forward- uses these measures in assessing the financial performance of forward-looking statements reflect Nokia’s current expectations looking statements, whether as a result of new information, future Nokia and believes that these measures provide meaningful and views of future developments and include statements events or otherwise, except to the extent legally required. supplemental information on the underlying business performance preceded by “believe”, “expect”, “expectations”, “commit”, of Nokia. These financial measures should not be considered in “anticipate”, “foresee”, “see”, “target”, “estimate”, ”designed”, Nokia presents financial information on reported, comparable and isolation from, or as a substitute for, financial information “aim”, “plan”, “intend”, “influence”, “assumption”, “focus”, constant currency basis. 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Factors, comparable results, information on items affecting comparability is including risks and uncertainties that could cause such differences presented separately for each of the components of profit or loss. can be both external, such as general, economic and industry Constant currency reporting provides additional information on conditions, as well as internal operating factors. We have identified change in financial measures on a constant currency basis in order these in more detail in our annual report on Form 20-F for the year to better reflect the underlying business performance. Therefore, ended December 31, 2020 under “Operating and Financial Review change in financial measures at constant currency excludes the and Prospects—Risk Factors“, and in our other filings or documents impact of changes in exchange rates in comparison to euro, our furnished with the U.S. Securities and Exchange Commission, reporting currency. As comparable or constant currency financial including Nokia’s financial results reports. Other unknown or measures are not defined in IFRS they may not be directly unpredictable factors or underlying assumptions subsequently comparable with similarly titled measures used by other 2 © 2021 Nokia Public Welcome Pekka Lundmark 4. Q2 highlights President and CEO 5. Strategy progress 6. Business group highlights 19. Outlook Marco Wirén 12. Addressable market CFO 13. Q2 financial performance 17. Cash flow 18. Venture funds 3 © 2021 Nokia Public Strong financial performance across all segments Q2 21 net sales Q2 21 gross margin Q2 21 operating margin +270 bps +450 bps +9% 42.3% YoY 12.8% YoY (year-over-year at (comparable) (comparable) constant currency) Comparable gross margin Comparable operating margin YoY constant currency growth 25% 50% 15% 20% 20% 10.5% 45% 9.1% 20% 41% 10% 7.5% 40% 15% 36% 36% 4.3% 35% 35% 36% 5% 1.4% 10% 35% 0% 30% 5% 3% 2% -0.8% 25% -5% 0% Mobile Networks Network Cloud and Network Mobile Networks Network Cloud and Network Mobile Network Cloud and Nokia Infrastructure Services Infrastructure Services Networks Infrastructure Network Technologies Services Q2 2020 Q2 2021 Q2 2020 Q2 2021 4 © 2021 Nokia Public Good progress in Q2 on our three-phase strategy Reset Accelerate Scale Mobile Networks Network Infrastructure Nokia Technologies • AirScale radio and baseband launch • +20% sales growth in Q2* • Two automotive licenses signed • Increased R&D investment • Gaining market share • Winning back customers • Further product launches in H2 Cloud & Network Services Cloud & Network Services Network Infrastructure • Portfolio rebalancing under way, but • Over 150 customers for 5G Core • Sustained market share gains showing underlying profitability • Now over 340 private wireless deals up particularly in fixed networks from 250 start of the year *in constant currency 5 © 2021 Nokia Public New AirScale product launch boosts our competitiveness Next-generation AirScale 5G portfolio powered by On track with KPIs ReefShark technology • ~70% ReefShark share by end of • Widest bandwidth radios and 2021 industry’s lightest 32TRX mMIMO • 4G/5G conversion rate at 90%* active antenna • 4G/5G market share of ~25- • Highest capacity baseband with up 27%* in full year 2021 to 75% better power efficiency *Excluding China • Important step in reducing environmental footprint Winning back customers in Canada and China • New ReefShark SoCs • O-RAN ready 6 © 2021 Nokia Public Network Infrastructure gaining share in growing markets YoY constant currency net sales growth 0% 20% 40% 60% 80% • Strong H1 growth for all businesses Fixed Networks 49% 28% • Gaining share in a growing market IP Networks 22% 8% • Optical 7% New product launches to come in H2 Networks 13% Submarine 57% • Backlog starting to flow through into sales Networks 72% Q1 2021 Q2 2021 in Submarine Networks IP Routing Market share* Optical – WDM + OMSN* 26% 22% 16% 14% *Source: Dell’Oro – 4 quarter rolling 17Q1 18Q1 19Q1 20Q1 21Q1 17Q1 18Q1 19Q1 20Q1 21Q1 Global ex. China market share 7 © 2021 Nokia Public Portfolio rebalancing on track in Cloud and Network Services 5G Core customers • We are on track with portfolio rebalancing • Accelerating investment in growth areas • Deployed 5G SA Core for DISH on AWS >150 • >340 private wireless customers Private Wireless customers 340 250 180 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 8 © 2021 Nokia Public Nokia Technologies progress in Automotive Expanded automotive licensing program, signing two new agreements in Q2 2021, underlining strength of cellular portfolio #1 PA Consulting ranked Nokia as #1 in 5G Standard Essential Patents Continued industry leadership with Continue to renew our patent +3,500 portfolio patent families declared essential for 5G 9 © 2021 Nokia Public Enterprise pipeline remains strong Q2 21 net sales -2% • Q2 growth slowed due to tough comparison H1 21 net sales • 63 new customers in Q2 +7% • Confidence in pipeline and full year (year-over-year at constant currency) 10 © 2021 Nokia Public CFO remarks Marco Wirén 12. Addressable market CFO 13. Q2 performance 17. Cash flow 18. Venture funds 11 © 2021 Nokia Public Improving outlook for Mobile Networks 2021 addressable market 2021 YoY YoY Estimated, in € (as of Q2 2021) (at const. ccy) (prior estimate) Mobile Networks1 46bn +6% +3% Network Infrastructure2 42bn +4% +4% Cloud and Network Services 26bn +4% +2% Total addressable market 113bn +5% +3% 1Excluding China 2Excluding Submarine Networks Market size calculated assuming actual currency rates for first half 2021 and end of June EUR/USD rate of 1.19 continues in the second half 2021 12 © 2021 Nokia Public Broad-based growth with most regions contributing Year-over-year at constant currency +9% constant currency growth +4% reported growth +4% -4% +4% +11% +7% +57% €5.3bn +75% €5.1bn Q2 2020 India Latin America Europe North Greater China Middle East & Asia Pacific FX impact Q2 2021 America Africa 13 © 2021 Nokia Public Strong underlying improvements in gross margin Also helped by a one-off benefit Group comparable gross margin Mobile Networks comparable gross margin 40.9% 42.3% 39.6% 36.1% Q2 2020 Product Regional Volume Cost FX MN one- Q2 2021 Q2 2020 Product Regional Cost FX MN one- Q2 2021 mix mix impact savings impact off mix mix savings impact off impact impact 14 © 2021 Nokia Public Structural improvements to operating margin and some one-offs Group comparable operating margin • Strong structural margin Structural improvements 12.8% improvement • Cost base well managed • Cost reductions offset by rising R&D investment and 8.3% incentive accruals Q2 2020 Product Regional Volume Cost Opex FX OOIE MN one- Q2 2021 mix mix impact savings impact impact impact off deal OOIE = Other operating income and expense 15 © 2021 Nokia Public Growth and margin expansion in all business groups Figures shown based on comparable reporting with revenues in EUR million Mobile Network Networks Q2 2021 Q2 2020 YoY at CC Infrastructure Q2 2021 Q2 2020 YoY at CC Net Sales 2,380 2,424 3% Net Sales 1,778 1,545 20% Gross margin 40.9% 36.1% Gross margin 35.3% 34.8% Operating margin 10.5% 7.5% Operating margin 9.1% 4.3% Cloud and Network Nokia Services Q2 2021 Q2 2020 YoY at CC Technologies Q2 2021 Q2 2020 YoY at CC Net Sales 703 718 2% Net Sales 401 341 20% Gross margin 35.7% 35.9% Gross margin 99.8% 99.4% Operating margin 1.4% -0.8%