SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

the Securities Exchange Act of 1934

Report on Form 6-K dated May 10, 2016

(Commission File No. 1-13202)

Nokia Corporation

Karaportti 3

FI-02610 Espoo

Finland

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

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

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Enclosures:

Nokia stock exchange release dated May 10, 2016: Nokia Corporation Interim Report for Q1 2016

Nokia Corporation Interim Report for Q1 2016

Non-IFRS financial results benefitted from expanded portfolio and continuation of solid execution

Nokia Corporation

Interim Report

May 10, 2016 at 08:00 (CET +1)

This is a summary of the Nokia Corporation interim report for first quarter 2016 published today. The complete interim report for first quarter 2016 with tables is available at http://nokia.com/financials. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.

FINANCIAL HIGHLIGHTS

·                  Non-IFRS net sales in Q1 2016 of EUR 5.6 billion. In the year-ago quarter, non-IFRS net sales would have been EUR 6.1 billion on a comparable combined company basis.

·                  Non-IFRS diluted EPS in Q1 2016 of EUR 0.03. Q1 2016 reflected the acquisition of Alcatel-Lucent, which resulted in a higher share count, as well as higher non-IFRS tax expenses due to unfavorable changes in the regional profit mix. Note that Nokia’s Q1 2016 non-IFRS diluted EPS was reported as a combined company, whereas the Q1 2015 non-IFRS diluted EPS of EUR 0.05 was reported on a Nokia stand-alone basis.

·                  In Q1 2016, the net cash and other liquid assets of the combined company increased by EUR 471 million, to EUR 8.2 billion, compared to Nokia on a standalone basis at the end of Q4 2015, primarily due to the acquisition of Alcatel-Lucent, partially offset by cash outflows related to working capital.

Nokia’s Networks business

·                  8% year-on-year net sales decrease in Q1 2016. Our performance was primarily due to Ultra Broadband Networks, which declined 12% year-on-year and 27% sequentially, consistent with our outlook for a greater than normal seasonal decline in the wireless infrastructure market in Q1 2016. IP Networks and Applications grew on a year-on-year basis.

·                  Strong non-IFRS gross margin of 38.3% in Q1 2016 primarily due to improved product mix in Ultra Broadband Networks (led by Mobile Networks) and IP Networks and Applications (led by IP/Optical Networks), as well as efficiency gains.

·                  Non-IFRS operating margin of 6.5% in Q1 2016. The year-on-year increase of 2.8 percentage points was primarily due to the higher non-IFRS gross margin, as well as continued focus on execution excellence.

Nokia Technologies

·                  27% year-on-year net sales decrease in Q1 2016. Our performance was affected by the absence of the following three items which benefitted Q1 2015: non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested intellectual property rights (“IPR”), and IPR divestments. Excluding these three items, net sales increased year-on-year by approximately 10% due to higher intellectual property licensing income.

1

First quarter 2016 results compared to combined company historicals. See note 1 to the financial statements for further details(1),(2)

First quarter 2016 results compared to Nokia standalone historicals. See note 1 to the financial statements for further details(1),(3)

(1) Results are as reported unless otherwise specified. The results information in this report is unaudited. Non-IFRS results exclude costs related to the Alcatel-Lucent transaction, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring related costs, and certain other items that may not be indicative of Nokia’s underlying business performance. For Q1 2016 details, please refer to the year to date discussion in the complete interim report and note 2, “Non-IFRS to reported reconciliation”, in the notes to the financial statements attached to the complete interim report. A reconciliation of the Q1 2015 and the Q4 2015 non-IFRS combined company results to the reported results can be found in the “Nokia provides recast segment results for 2015 reflecting new financial reporting structure” stock exchange release published on April 22, 2016.

(2) Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For

2

more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to the complete interim report.

(3) Nokia standalone historicals are the recasting of Nokia’s historical standalone financial results, reflecting Nokia’s updated segment reporting structure, excluding Alcatel-Lucent. Beginning from the first quarter 2016, Nokia results include those of Alcatel-Lucent on a consolidated basis. Accordingly, Nokia results beginning from the first quarter 2016 are not directly comparable to prior period Nokia standalone results.

SUBSEQUENT EVENTS

Nokia launches headcount reductions as part of global synergy and transformation program

Nokia announced that it has started actions to reduce company personnel globally as part of its synergy and transformation program.

The headcount reductions are expected to take place between now and the end of 2018, consistent with Nokia’s synergy target timeline. Reductions will come largely in areas where there are overlaps, as Nokia outlined on October 29, 2015. At the same time, Nokia is taking steps to adapt to challenging market conditions and to shift resources to future-oriented technologies such as 5G, the Cloud and the Internet of Things. As part of the program, Nokia also continues to target savings in real estate, services, procurement, supply chain and manufacturing.

Nokia plans to acquire Withings to accelerate entry into Digital Health

Nokia announced plans to acquire Withings S.A. (“Withings”), a pioneer and leader in the connected health revolution with a family of award-winning digital health products and services to help people all over the world lead healthier, happier and more productive lives. Withings has approximately 200 employees and will be part of our Nokia Technologies business.

With this acquisition, Nokia is strengthening its position in the Internet of Things in a way that leverages the power of the trusted Nokia brand, fits with the Nokia’s purpose of expanding the human possibilities of the connected world, and puts Nokia at the heart of a very large addressable market.

The planned transaction values Withings at EUR 170 million, would be settled in cash and is expected to close in early Q3 2016 subject to regulatory approvals and customary closing conditions.

CEO STATEMENT

Nokia’s first quarter results demonstrate the strategic value of our combination with Alcatel-Lucent.

I am pleased that we were able to deliver solid profitability in what is typically a seasonally weak quarter and at a time when the risk of integration-related disruption was high. While our revenue decline was disappointing, the shortfall was largely driven by Mobile Networks, where the challenging environment is not a surprise. We noted in our Q4 2015 earnings release that we expected some market headwinds in 2016 in the wireless sector and we continue to hold that view today.

Based on our current assessment, we expect a full year 2016 non-IFRS operating margin above 7% in the Networks business. When looking at the first half of the year, we do not expect typical seasonal patterns to occur given likely market conditions in the second quarter and our ongoing integration of Alcatel-Lucent.

While integrations of the scale of Alcatel-Lucent are complex and take time, we are now sufficiently confident in our progress that we are targeting synergies that are both more than and faster than our original plan. We already have agreed transition plans that cover the most pressing areas of portfolio overlap with most of our top

3

customers; have begun the process of reducing over-lapping personnel including initial reductions in the United States and several other countries; started to consolidate our real estate footprint with several sites already closed and thirty more scheduled for the current quarter; and completed 40 projects with suppliers to drive procurement savings, with 200 more projects currently underway and plans for hundreds of additional projects to be launched largely over the course of Q2 2016.

I am also pleased that we continue to see strong support from our customers, including those from the former Alcatel-Lucent. We are focused on capitalizing on these opportunities through strengthening our sales execution, as well as bringing unique innovation rapidly to market, such as our recently announced 5G-ready AirScale radio access family of products.

On a final note, I am excited that the team from Withings will be joining Nokia, as part of Nokia Technologies. We have said consistently that digital health is an area of strategic interest to us, and with this acquisition we have an excellent opportunity to expand in what is one of the largest markets in the Internet of Things and build future licensing opportunities.

Rajeev Suri
President and CEO

FINANCIAL DISCUSSION

The following discussion is of Nokia’s results for the first quarter 2016, which comprise the results of Nokia’s businesses — Nokia’s Networks business (including Ultra Broadband Networks and IP Networks and Applications) and Nokia Technologies, as well as Group Common and Other. For more information on the recent changes to our reportable segments, please refer to note 3, “Segment information and eliminations”, in the notes to the financial statements attached to the complete interim report. Comparisons are given to the first quarter 2015 and fourth quarter 2015 results on a combined company basis, unless otherwise indicated.

This data has been prepared to reflect the financial results of the continuing operations of Nokia as if the new financial reporting structure had been in operation for the full year 2015. Certain accounting policy alignments, adjustments and reclassifications have been necessary, and these are explained in the “Basis of preparation” section of the stock exchange release published on April 22, 2016. These adjustments include also reallocation of items of costs and expenses based on their nature and changes to the definition of the line items in the combined company accounting policies, which affect also numbers presented in these interim financial statements for 2015. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to the complete interim report.

Non-IFRS Net sales

Nokia non-IFRS net sales decreased 9% year-on-year and decreased 27% sequentially. On a constant currency basis, Nokia non-IFRS net sales would have decreased 9% year-on-year and would have decreased 27% sequentially.

Year-on-year discussion

The year-on-year decrease in Nokia non-IFRS net sales in the first quarter 2016 was primarily due to lower net sales in Nokia’s Networks business and Nokia Technologies.

Sequential discussion

The sequential decrease in Nokia non-IFRS net sales in the first quarter 2016 was primarily due to lower net sales in Nokia’s Networks business and Nokia Technologies.

4

Non-IFRS Operating profit

Year-on-year discussion

Nokia non-IFRS operating profit increased primarily due to lower non-IFRS research and development (“R&D”) expenses and a net positive fluctuation in non-IFRS other income and expenses, partially offset by lower non-IFRS gross profit.

The lower non-IFRS gross profit was primarily due to Nokia Technologies partially offset by Nokia’s Networks business.

The lower non-IFRS R&D expenses was primarily due to Nokia’s Networks business and Nokia Technologies.

Nokia non-IFRS other income and expenses was an expense of EUR 15 million in the first quarter 2016, compared to an expense of EUR 49 million in the year-ago quarter. On a year-on-year basis, the change was primarily due to Group Common and Other, as well as Nokia’s Networks business.

Sequential discussion

Nokia non-IFRS operating profit decreased primarily due to lower non-IFRS gross profit, partially offset by lower non-IFRS R&D expenses and non-IFRS selling, general and administrative (“SG&A”) expenses.

The lower non-IFRS gross profit was primarily due to Nokia’s Networks business and Nokia Technologies.

The lower non-IFRS R&D expenses was primarily due to Nokia’s Networks business.

The lower non-IFRS SG&A expenses was primarily due to Nokia’s Networks business.

Nokia non-IFRS other income and expenses was an expense of EUR 15 million in the first quarter 2016, compared to an income of EUR 20 million in the fourth quarter 2015. On a sequential basis, the change was primarily due to Nokia’s Networks business, partially offset by Group Common and Other.

5

OUTLOOK

6

RISKS AND FORWARD-LOOKING STATEMENTS

It should be noted that Nokia and its businesses are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements, including, without limitation, those regarding: A) our ability to integrate Alcatel Lucent into our operations and achieve the targeted business plans and benefits, including targeted synergies in relation to the acquisition of Alcatel Lucent announced on April 15, 2015 and closed in early 2016; B) our ability to squeeze out the remaining Alcatel Lucent shareholders in a timely manner or at all to achieve full ownership of Alcatel Lucent; C) expectations, plans or benefits related to our strategies and growth management; D) expectations, plans or benefits related to future performance of our businesses; E) expectations, plans or benefits related to changes in our management and other leadership, operational structure and operating model, including the expected characteristics, business, organizational structure, management and operations following the acquisition of Alcatel Lucent; F) expectations regarding market developments, general economic conditions and structural changes; G) expectations and targets regarding financial performance, results, operating expenses, taxes, 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; H) timing of the deliveries of our products and services; I) expectations and targets regarding collaboration and partnering arrangements, as well as our expected customer reach; J) outcome of pending and threatened litigation, arbitration, disputes, regulatory proceedings or investigations by authorities; K) expectations regarding restructurings, investments, uses of proceeds from transactions, acquisitions and divestments and our ability to achieve the financial and operational targets set in connection with any such restructurings, investments, divestments and acquisitions; and L) statements preceded by or including “believe,” “expect,” “anticipate,” “foresee,” “sees,” “target,” “estimate,” “designed,” “aim,” “plans,” “intends,” “focus,” “continue,” “project,” “should,” “will” or similar expressions. These statements are based on the management’s best assumptions and beliefs in light of the information currently available to it. Because they involve risks and uncertainties, actual results may differ materially from the results that we currently expect. Factors, including risks and uncertainties, that could cause such differences include, but are not limited to: 1) our ability to execute our strategy, sustain or improve the operational and financial performance of our business or correctly identify or successfully pursue business opportunities or growth; 2) our ability to achieve the anticipated business and operational benefits and synergies from the Alcatel Lucent transaction, including our ability to integrate Alcatel Lucent into our operations and within the timeframe targeted, and our ability to implement our organization and operational structure efficiently; 3) our ability to complete the purchases of the remaining outstanding Alcatel Lucent securities and realize the benefits of the public exchange offer for all outstanding Alcatel Lucent securities; 4) our dependence on general economic and market conditions and other developments in the economies where we operate; 5) our dependence on the development of the industries in which we operate, including the cyclicality and variability of the telecommunications industry; 6) our exposure to regulatory, political or other developments in various countries or regions, including emerging markets and the associated risks in relation to tax matters and exchange controls, among others; 7) our ability to effectively and profitably compete and invest in new competitive high-quality products, services, upgrades and technologies and bring them to market in a timely manner; 8) our dependence on a limited number of customers and large multi-year agreements; 9) Nokia Technologies’ ability to maintain and establish new sources of patent licensing income and IPR-related revenues, particularly in the smartphone market; 10) our dependence on IPR technologies, including those that we have developed and those that are licensed to us, and the risk of associated IPR-related legal claims, licensing costs and restrictions on use; 11) our exposure to direct and indirect regulation, including economic or trade policies, and the reliability of our governance, internal controls and compliance processes to prevent regulatory penalties; 12) our reliance on third-party solutions for data storage and the distribution of products and services, which expose us to risks relating to security, regulation and cybersecurity breaches; 13) Nokia Technologies’ ability to generate net sales and profitability through licensing of the Nokia brand, the development and sales of products and services, as well as other business ventures which may not materialize as planned; 14) our exposure to legislative frameworks and jurisdictions that regulate fraud, economic trade sanctions and policies, and Alcatel Lucent’s previous and current involvement in anti-corruption allegations; 15) the potential complex tax issues, tax disputes and tax obligations we may face in various jurisdictions, including the risk of obligations to pay additional taxes; 16) our actual or anticipated performance, among other factors, which could reduce our ability

7

to utilize deferred tax assets; 17) our ability to retain, motivate, develop and recruit appropriately skilled employees; 18) our ability to manage our manufacturing, service creation, delivery, logistics and supply chain processes, and the risk related to our geographically concentrated production sites; 19) the impact of unfavorable outcome of litigation, arbitration, agreement-related disputes or allegations of product liability associated with our businesses; 20) exchange rate fluctuations; 21) inefficiencies, breaches, malfunctions or disruptions of information technology systems; 22) our ability to optimize our capital structure as planned and re-establish our investment grade credit rating or otherwise improve our credit ratings; 23) uncertainty related to the amount of dividends and equity return we are able to distribute to shareholders for each financial period; 24) our ability to achieve targeted benefits from or successfully implement planned transactions, as well as the liabilities related thereto; 25) our involvement in joint ventures and jointly-managed companies; 26) performance failures by our partners or failure to agree to partnering arrangements with third parties; 27) our ability to manage and improve our financial and operating performance, cost savings, competitiveness and synergy benefits after the acquisition of Alcatel Lucent; 28) adverse developments with respect to customer financing or extended payment terms we provide to customers; 29) the carrying amount of our goodwill may not be recoverable; 30) risks related to undersea infrastructure; 31) unexpected liabilities with respect to pension plans, insurance matters and employees; and 32) unexpected liabilities or issues with respect to the acquisition of Alcatel Lucent, including pension, postretirement, health and life insurance and other employee liabilities or higher than expected transaction costs as well as the risk factors specified on pages 69 to 87 of our annual report on Form 20-F filed on April 1, 2016 under “Operating and financial review and prospects—Risk factors”, as well as in Nokia’s other filings with the U.S. Securities and Exchange Commission. Other unknown or unpredictable factors or underlying assumptions subsequently proven to be incorrect could cause actual results to differ materially from those in the forward-looking statements. We do not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

The financial statements were authorized for issue by management on May 9, 2016.

Media and Investor Contacts:

Corporate Communications, tel. +358 10 448 4900 email: press.services@nokia.com
Investor Relations, tel. +358 4080 3 4080 email: investor.relations@nokia.com

·                  Nokia’s Annual General Meeting 2016 is scheduled to be held on June 16, 2016.

·                  Nokia plans to publish its second quarter 2016 results on August 4, 2016.

8

Interim Report for Q1 2016

Non-IFRS financial results benefitted from expanded portfolio and continuation of solid execution

Financial highlights

·             Non-IFRS net sales in Q1 2016 of EUR 5.6 billion. In the year-ago quarter, non-IFRS net sales would have been EUR 6.1 billion on a comparable combined company basis.

·             Non-IFRS diluted EPS in Q1 2016 of EUR 0.03. Q1 2016 reflected the acquisition of Alcatel-Lucent, which resulted in a higher share count, as well as higher non-IFRS tax expenses due to unfavorable changes in the regional profit mix. Note that Nokia’s Q1 2016 non-IFRS diluted EPS was reported as a combined company, whereas the Q1 2015 non-IFRS diluted EPS of EUR 0.05 was reported on a Nokia stand-alone basis.

·             In Q1 2016, the net cash and other liquid assets of the combined company increased by EUR 471 million, to EUR 8.2 billion, compared to Nokia on a standalone basis at the end of Q4 2015, primarily due to the acquisition of Alcatel-Lucent, partially offset by cash outflows related to working capital.

Nokia’s Networks business

·             8% year-on-year net sales decrease in Q1 2016. Our performance was primarily due to Ultra Broadband Networks, which declined 12% year-on-year and 27% sequentially, consistent with our outlook for a greater than normal seasonal decline in the wireless infrastructure market in Q1 2016. IP Networks and Applications grew on a year-on-year basis.

·             Strong non-IFRS gross margin of 38.3% in Q1 2016 primarily due to improved product mix in Ultra Broadband Networks (led by Mobile Networks) and IP Networks and Applications (led by IP/Optical Networks), as well as efficiency gains.

·             Non-IFRS operating margin of 6.5% in Q1 2016. The year-on-year increase of 2.8 percentage points was primarily due to the higher non-IFRS gross margin, as well as continued focus on execution excellence.

Nokia Technologies

·             27% year-on-year net sales decrease in Q1 2016. Our performance was affected by the absence of the following three items which benefitted Q1 2015: non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested intellectual property rights (“IPR”), and IPR divestments. Excluding these three items, net sales increased year-on-year by approximately 10% due to higher intellectual property licensing income.

Nokia Corporation Interim Report May 10, 2016

1

First quarter 2016 results compared to combined company historicals. See note 1 to the financial statements for further details(1),(2)

First quarter 2016 results compared to Nokia standalone historicals. See note 1 to the financial statements for further details(1),(3)

(1)Results are as reported unless otherwise specified. The results information in this report is unaudited. Non-IFRS results exclude costs related to the Alcatel-Lucent transaction, goodwill impairment charges, intangible asset amortization and purchase price related items, restructuring related costs, and certain other items that may not be indicative of Nokia’s underlying business performance. For Q1 2016 details, please refer to the year to date discussion and note 2, “Non-IFRS to reported reconciliation”, in the notes to the financial statements attached to this report. A reconciliation of the Q1 2015 and the Q4 2015 non-IFRS combined company results to the reported results can be found in the “Nokia provides recast segment results for 2015 reflecting new financial reporting structure” stock exchange release published on April 22, 2016.

(2)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

2

(3)Nokia standalone historicals are the recasting of Nokia’s historical standalone financial results, reflecting Nokia’s updated segment reporting structure, excluding Alcatel-Lucent. Beginning from the first quarter 2016, Nokia results include those of Alcatel-Lucent on a consolidated basis. Accordingly, Nokia results beginning from the first quarter 2016 are not directly comparable to prior period Nokia standalone results.

Subsequent events

Nokia launches headcount reductions as part of global synergy and transformation program

Nokia announced that it has started actions to reduce company personnel globally as part of its synergy and transformation program.

The headcount reductions are expected to take place between now and the end of 2018, consistent with Nokia’s synergy target timeline. Reductions will come largely in areas where there are overlaps, as Nokia outlined on October 29, 2015. At the same time, Nokia is taking steps to adapt to challenging market conditions and to shift resources to future-oriented technologies such as 5G, the Cloud and the Internet of Things. As part of the program, Nokia also continues to target savings in real estate, services, procurement, supply chain and manufacturing.

Nokia plans to acquire Withings to accelerate entry into Digital Health

Nokia announced plans to acquire Withings S.A. (“Withings”), a pioneer and leader in the connected health revolution with a family of award-winning digital health products and services to help people all over the world lead healthier, happier and more productive lives. Withings has approximately 200 employees and will be part of our Nokia Technologies business.

With this acquisition, Nokia is strengthening its position in the Internet of Things in a way that leverages the power of the trusted Nokia brand, fits with the Nokia’s purpose of expanding the human possibilities of the connected world, and puts Nokia at the heart of a very large addressable market.

The planned transaction values Withings at EUR 170 million, would be settled in cash and is expected to close in early Q3 2016 subject to regulatory approvals and customary closing conditions.

3

CEO statement

Nokia’s first quarter results demonstrate the strategic value of our combination with Alcatel-Lucent.

I am pleased that we were able to deliver solid profitability in what is typically a seasonally weak quarter and at a time when the risk of integration-related disruption was high. While our revenue decline was disappointing, the shortfall was largely driven by Mobile Networks, where the challenging environment is not a surprise. We noted in our Q4 2015 earnings release that we expected some market headwinds in 2016 in the wireless sector and we continue to hold that view today.

Based on our current assessment, we expect a full year 2016 non-IFRS operating margin above 7% in the Networks business. When looking at the first half of the year, we do not expect typical seasonal patterns to occur given likely market conditions in the second quarter and our ongoing integration of Alcatel-Lucent.

While integrations of the scale of Alcatel-Lucent are complex and take time, we are now sufficiently confident in our progress that we are targeting synergies that are both more than and faster than our original plan. We already have agreed transition plans that cover the most pressing areas of portfolio overlap with most of our top customers; have begun the process of reducing over-lapping personnel including initial reductions in the United States and several other countries; started to consolidate our real estate footprint with several sites already closed and thirty more scheduled for the current quarter; and completed 40 projects with suppliers to drive procurement savings, with 200 more projects currently underway and plans for hundreds of additional projects to be launched largely over the course of Q2 2016.

I am also pleased that we continue to see strong support from our customers, including those from the former Alcatel-Lucent. We are focused on capitalizing on these opportunities through strengthening our sales execution, as well as bringing unique innovation rapidly to market, such as our recently announced 5G-ready AirScale radio access family of products.

On a final note, I am excited that the team from Withings will be joining Nokia, as part of Nokia Technologies. We have said consistently that digital health is an area of strategic interest to us, and with this acquisition we have an excellent opportunity to expand in what is one of the largest markets in the Internet of Things and build future licensing opportunities.

Rajeev Suri
President and CEO

4

Nokia in Q1 2016

Financial discussion

The following discussion is of Nokia’s results for the first quarter 2016, which comprise the results of Nokia’s businesses — Nokia’s Networks business (including Ultra Broadband Networks and IP Networks and Applications) and Nokia Technologies, as well as Group Common and Other. For more information on the recent changes to our reportable segments, please refer to note 3, “Segment information and eliminations”, in the notes to the financial statements attached to this report. Comparisons are given to the first quarter 2015 and fourth quarter 2015 results on a combined company basis, unless otherwise indicated.

This data has been prepared to reflect the financial results of the continuing operations of Nokia as if the new financial reporting structure had been in operation for the full year 2015. Certain accounting policy alignments, adjustments and reclassifications have been necessary, and these are explained in the “Basis of preparation” section of the stock exchange release published on April 22, 2016. These adjustments include also reallocation of items of costs and expenses based on their nature and changes to the definition of the line items in the combined company accounting policies, which affect also numbers presented in these interim financial statements for 2015. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

5

Non-IFRS Net sales

Nokia non-IFRS net sales decreased 9% year-on-year and decreased 27% sequentially. On a constant currency basis, Nokia non-IFRS net sales would have decreased 9% year-on-year and would have decreased 27% sequentially.

Year-on-year discussion

The year-on-year decrease in Nokia non-IFRS net sales in the first quarter 2016 was primarily due to lower net sales in Nokia’s Networks business and Nokia Technologies.

Sequential discussion

The sequential decrease in Nokia non-IFRS net sales in the first quarter 2016 was primarily due to lower net sales in Nokia’s Networks business and Nokia Technologies.

Non-IFRS Operating profit

Year-on-year discussion

Nokia non-IFRS operating profit increased primarily due to lower non-IFRS research and development (“R&D”) expenses and a net positive fluctuation in non-IFRS other income and expenses, partially offset by lower non-IFRS gross profit.

The lower non-IFRS gross profit was primarily due to Nokia Technologies partially offset by Nokia’s Networks business.

The lower non-IFRS R&D expenses was primarily due to Nokia’s Networks business and Nokia Technologies.

Nokia non-IFRS other income and expenses was an expense of EUR 15 million in the first quarter 2016, compared to an expense of EUR 49 million in the year-ago quarter. On a year-on-year basis, the change was primarily due to Group Common and Other, as well as Nokia’s Networks business.

Sequential discussion

Nokia non-IFRS operating profit decreased primarily due to lower non-IFRS gross profit, partially offset by lower non-IFRS R&D expenses and non-IFRS selling, general and administrative (“SG&A”) expenses.

The lower non-IFRS gross profit was primarily due to Nokia’s Networks business and Nokia Technologies.

The lower non-IFRS R&D expenses was primarily due to Nokia’s Networks business.

The lower non-IFRS SG&A expenses was primarily due to Nokia’s Networks business.

Nokia non-IFRS other income and expenses was an expense of EUR 15 million in the first quarter 2016, compared to an income of EUR 20 million in the fourth quarter 2015. On a sequential basis, the change was primarily due to Nokia’s Networks business, partially offset by Group Common and Other.

6

Outlook

7

8

Nokia’s Networks business

Operational highlights

Ultra Broadband Networks

Introduced the next generation AirScale Radio Access. This 5G-ready solution will enable operators to satisfy future demands including the Internet of Things, virtual reality, augmented reality, factories of the future and other advanced scenarios.

Established the Telecom Infra Project (TIP) with Facebook, Intel, Deutsche Telekom, EE, Globe, SK Telecom and others to accelerate global growth of high quality, scalable and affordable telecommunications infrastructure.

Announced plans with T-Mobile to conduct preliminary 5G testing, advance technology development and trial initial use cases in 2H 2016.

Completed trials with Deutsche Telekom, amongst others, on XG-FAST, a Bell Labs-developed extension of Nokia’s G.fast technology, which generated data throughput speeds of more than 10 gigabits-per-second (Gbps) over traditional copper lines, approximately 200 times faster than the average residential broadband connection.

36 customer trials for XG-FAST (copper-based) and 35 customer trials for next generation Passive Optical Network (PON; fiber-based) technology.

Announced its Passive Optical LAN (POL) solution, which provides operators and enterprises a high capacity, scalable alternative to traditional copper-based LANs while being up to 50% more cost efficient.

Introduced Nokia AVA, a cognitive service platform powered by high levels of automation, virtualization and intelligent analytics.

IP Networks and Applications

Introduced a significant expansion of its 1830 Photonic Service Switch (PSS) portfolio, quadrupling optical fiber capacity to more than 70 terabits per second to address surging network data traffic demand.

Announced plans to transform Telefónica’s network with its IP core and virtualized service router technology along with its services expertise to meet growing customer demand for high performance data and HD video.

Announced the deployment of its most powerful IP core network router, the next-generation 7950 XRS (Extensible Routing System) with Bell Canada.

Traction in our 7950 XRS IP Core router remained solid, with 2 new wins, bringing the total wins to date to 57.

Nuage gained 10 new customers in the first quarter, bringing the total to 60 wins. Over a dozen customers, including service providers and enterprises, are deploying the Nuage Virtualized Network Services (VNS) solution to deliver software-defined WAN (SD-WAN) services.

Acquired Nakina Systems, a security and orchestration software specialist, to reinforce Nokia’s position in security at a time when customers are bolstering their defenses to cope with the increasing demands of hyper connectivity, new regulations and emerging technologies.

Demonstrated a proof of concept together with Orange, using CloudBand’s NFV platform to speed up service deployment, increase flexibility and optimize costs for on-demand and cloud-based, all-IP networks.

9

10

Financial highlights

The following table presents Combined company historicals for Nokia which reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

(1)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

Financial discussion

Net sales by segment

Nokia’s Networks business net sales decreased 8% year-on-year and decreased 27% sequentially. On a constant currency basis, Nokia’s Networks business net sales would have decreased 9% year-on-year and would have decreased 26% sequentially.

A discussion of our results within Ultra Broadband Networks and IP Networks and Applications is included in the sections “Ultra Broadband Networks” and “IP Networks and Applications” below.

Year-on-year discussion

The year-on-year decrease in Nokia’s Networks business net sales in the first quarter 2016 was primarily due to lower net sales in Ultra Broadband Networks.

11

Sequential discussion

The sequential decrease in Nokia’s Networks business net sales in the first quarter 2016 was due to lower net sales in both Ultra Broadband Networks and IP Networks and Applications.

12

Net sales by region

(1)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

Year-on-year discussion

On a regional basis, compared to the first quarter 2015, Nokia’s Networks business net sales in Asia-Pacific decreased primarily due to Ultra Broadband Networks. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks, partially offset by Fixed Networks.

In Europe, Nokia’s Networks business net sales decreased primarily due to Ultra Broadband Networks, partially offset by IP Networks and Applications.

13

In Greater China, Nokia’s Networks business net sales decreased primarily due to Ultra Broadband Networks and IP Networks and Applications. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks, partially offset by Fixed Networks.

In Latin America, Nokia’s Networks business net sales increased primarily due to IP Networks and Applications, partially offset by Ultra Broadband Networks. The increase in IP Networks and Applications was primarily due to IP/Optical Networks. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks, partially offset by Fixed Networks.

In Middle East and Africa, Nokia’s Networks business net sales decreased in both Ultra Broadband Networks and IP Networks and Applications.

In North America, Nokia’s Networks business net sales decreased primarily due to Ultra Broadband Networks. The decrease in Ultra Broadband was primarily due to Mobile Networks.

Sequential discussion

On a regional basis, compared to the fourth quarter 2015, Nokia’s Networks business net sales in Asia-Pacific decreased due to both IP Networks and Applications and Ultra Broadband Networks. The decrease in IP Networks and Applications was primarily due to IP/Optical Networks. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks, partially offset by Fixed Networks.

In Europe, Nokia’s Networks business net sales decreased due to both Ultra Broadband Networks and IP Networks and Applications. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks.

In Greater China, Nokia’s Networks business net sales decreased due to both Ultra Broadband Networks and IP Networks and Applications. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks.

In Latin America, Nokia’s Networks business net sales decreased primarily due to both Ultra Broadband Networks and IP Networks and Applications. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks. The decrease in IP Networks and Applications was primarily due to IP/Optical Networks.

In Middle East and Africa, Nokia’s Networks business net sales decreased primarily due to both Ultra Broadband Networks and IP Networks and Applications. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks.

In North America, Nokia’s Networks business net sales decreased primarily due to both Ultra Broadband Networks and IP Networks and Applications. The decrease in Ultra Broadband Networks was primarily due to Mobile Networks. The decrease in IP Networks and Applications was primarily due to Applications & Analytics.

Non-IFRS Operating profit

Year-on-year discussion

On a year-on-year basis, in the first quarter 2016, Nokia’s Networks business non-IFRS operating profit increased primarily due to lower non-IFRS R&D expenses and non-IFRS SG&A expenses, higher non-IFRS gross profit and a net positive fluctuation in non-IFRS other income and expenses.

14

The higher non-IFRS gross profit was primarily due to IP Networks and Applications, partially offset by Ultra Broadband Networks.

The lower non-IFRS R&D expenses was primarily due to Ultra Broadband Networks, partially offset by IP Networks and Applications.

The lower non-IFRS SG&A expenses was primarily due to Ultra Broadband Networks, partially offset by IP Networks and Applications.

Nokia’s Networks business non-IFRS other income and expenses was an expense of EUR 19 million in the first quarter 2016, compared to an expense of EUR 38 million in the year-ago quarter. On a year-on-year basis, the change was due to Ultra Broadband Networks.

Sequential discussion

On a sequential basis, in the first quarter 2016, Nokia’s Networks business non-IFRS operating profit decreased primarily due to lower non-IFRS gross profit and a net negative fluctuation in non-IFRS other income and expenses, partially offset by lower non-IFRS SG&A expenses and non-IFRS R&D expenses.

The lower non-IFRS gross profit was due to both Ultra Broadband Networks and IP Networks and Applications.

The lower non-IFRS R&D expenses was primarily due to Ultra Broadband Networks, partially offset by IP Networks and Applications.

The lower non-IFRS SG&A expenses was due to Ultra Broadband Networks, and to a lesser extent, IP Networks and Applications.

Nokia’s Networks business non-IFRS other income and expenses was an expense of EUR 19 million in the first quarter 2016, compared to an income of EUR 39 million in the fourth quarter 2015. On a sequential basis, the change was due to both IP Networks and Applications and Ultra Broadband Networks.

15

Ultra Broadband Networks

Financial highlights

The following table presents Combined company historicals for Nokia which reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

(1)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

16

Financial discussion

Net sales

Ultra Broadband Networks net sales decreased 12% year-on-year and decreased 27% sequentially. On a constant currency basis, Ultra Broadband net sales would have decreased 12% year-on-year and would have decreased 26% sequentially.

Year-on-year discussion

The year-on-year decrease in Ultra Broadband Networks net sales in the first quarter 2016 was due to Mobile Networks, partially offset by growth in Fixed Networks.

Mobile Networks net sales decreased year-on-year in the first quarter 2016, primarily due to radio networks and services. For both radio networks and services, the decline was primarily related to lower levels of activity with certain North American customers.

Fixed Networks net sales increased year-on-year in the first quarter 2016, primarily due to broadband access and digital home, partially offset by services. The growth in broadband access was attributable to continued positive trends in vectoring.

Sequential discussion

The sequential decrease in Ultra Broadband Networks net sales in the first quarter 2016 was due to Mobile Networks and, to a lesser extent, Fixed Networks.

Mobile Networks net sales decreased sequentially in the first quarter 2016, primarily due to seasonal declines in radio networks and services. For both radio networks and services, the decline was primarily related to lower levels of activity with certain customers in North America, Europe and Greater China.

Fixed Networks net sales decreased sequentially in the first quarter 2016, primarily due to seasonal declines in services and digital home, partially offset by strength in broadband access.

Non-IFRS Operating profit

Year-on-year discussion

On a year-on-year basis, in the first quarter 2016, Ultra Broadband Networks non-IFRS operating profit increased primarily due to lower non-IFRS R&D expenses, lower non-IFRS SG&A expenses and a net positive fluctuation in non-IFRS other income and expenses, partially offset by lower non-IFRS gross profit.

The decrease in Ultra Broadband Networks non-IFRS gross profit was primarily due to lower non-IFRS gross profit in Mobile Networks, partially offset by higher non-IFRS gross profit in Fixed Networks. For both Mobile Networks and Fixed Networks, the change in non-IFRS gross profit was primarily due to the change in net sales.

Ultra Broadband Networks non-IFRS R&D expenses decreased on a year-on-year basis, primarily due to Mobile Networks. The decrease in Mobile Networks was primarily due to continued operational improvement, with investments focused on LTE and 5G.

17

The decrease in Ultra Broadband Networks non-IFRS SG&A expenses was primarily due to Mobile Networks, which benefitted from cost discipline and continued operational improvement.

Ultra Broadband Networks non-IFRS other income and expenses was an expense of EUR 9 million in the first quarter 2016, compared to an expense of EUR 29 million in the year-ago quarter. On a year-on-year basis, the change was primarily due to Mobile Networks, and to a lesser extent Fixed Networks.

Sequential discussion

On a sequential basis, in the first quarter 2016, Ultra Broadband Networks non-IFRS operating profit decreased due to lower non-IFRS gross profit and, to a lesser extent, a net negative fluctuation in non-IFRS other income and expenses, partially offset by lower non-IFRS SG&A expenses and non-IFRS R&D expenses.

The non-IFRS gross profit decrease in Ultra Broadband Networks was primarily due to Mobile Networks and, to a lesser extent, Fixed Networks. For both Mobile Networks and Fixed Networks, the decrease in non-IFRS gross profit was primarily due to the decrease in net sales.

Ultra Broadband Networks non-IFRS R&D expenses decreased on a sequential basis, primarily due to Mobile Networks. The decrease in Mobile Networks was primarily related to continued operational improvement, with investments focused on LTE and 5G.

The decrease in Ultra Broadband Networks non-IFRS SG&A expenses was primarily due to Mobile Networks. The decrease in Mobile Networks was primarily related to seasonal spending patterns, as well as cost discipline and continued operational improvement.

Ultra Broadband Networks non-IFRS other income and expenses was an expense of EUR 9 million in the first quarter 2016, compared to an income of EUR 16 million in the fourth quarter 2015. On a sequential basis, the change was primarily due to Mobile Networks.

18

IP Networks and Applications

Financial highlights

The following table presents Combined company historicals for Nokia which reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

19

(1)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

Financial discussion

Net sales

IP Networks and Applications net sales increased 1% year-on-year and decreased 27% sequentially. On a constant currency basis, IP Networks and Applications net sales would have increased 1% year-on-year and would have decreased 26% sequentially.

Year-on-year discussion

The year-on-year increase in IP Networks and Applications net sales in the first quarter 2016 was primarily due to IP/Optical Networks, partially offset by Applications & Analytics.

IP/Optical Networks net sales increased year-on-year in the first quarter 2016, primarily due to optical networks, partially offset by IP routing. Excluding the negative impact from lower resale of third party IP routers, net sales in IP routing would have grown on a year-on-year basis.

Applications & Analytics net sales decreased year-on-year in the first quarter 2016, primarily due to the timing of projects, as well as the absence of net sales related to a large implementation, which was completed in the first quarter 2015.

Sequential discussion

The sequential decrease in IP Networks and Applications net sales in the first quarter 2016 was primarily due to IP/Optical Networks and, to a lesser extent, Applications & Analytics.

IP/Optical Networks net sales decreased sequentially in the first quarter 2016, primarily due to seasonal declines in IP routing and optical networks, as well as a negative impact from lower resale of third party IP routers.

Applications & Analytics net sales decreased sequentially in the first quarter 2016, due to seasonal declines across all business lines.

Non-IFRS Operating profit

Year-on-year discussion

On a year-on-year basis, in the first quarter 2016, IP Networks and Applications non-IFRS operating profit increased, primarily due to higher non-IFRS gross profit, partially offset by higher non-IFRS R&D expenses and non-IFRS SG&A expenses.

The increase in IP Networks and Applications non-IFRS gross profit was due to both IP/Optical Networks and Applications & Analytics.

IP Networks and Applications non-IFRS R&D expenses increased on a year-on-year basis, primarily due to IP/Optical Networks, specifically related to investments in our internet protocol (“IP”) and software defined networking (“SDN”) solutions.

20

The increase in IP Networks and Applications non-IFRS SG&A expenses was due to IP/Optical Networks and Applications & Analytics, which both had higher investments to support future business growth.

Sequential discussion

On a sequential basis, in the first quarter 2016, IP Networks and Applications non-IFRS operating profit decreased primarily due to lower non-IFRS gross profit and, to a lesser extent, a net negative fluctuation in non-IFRS other income and expenses.

The decrease in IP Networks and Applications non-IFRS gross profit was due to both IP/Optical Networks and Applications & Analytics.

IP Networks and Applications non-IFRS other income and expenses was an expense of EUR 10 million in the first quarter 2016, compared to an income of EUR 23 million in the fourth quarter 2015. On a sequential basis, the change was due to both IP/Optical Networks and Applications & Analytics.

21

Nokia Technologies

Operational highlights

Licensing

The decision in the patent license arbitration with Samsung was received in February 2016, relating to a portion of the patent portfolio of Nokia Technologies.

Further discussions continued with Samsung, regarding the licensing of Nokia’s intellectual property in areas not covered by the arbitration.

Digital Media and Digital Health

Announced the sales start of the OZO professional virtual reality camera in Europe, as well as new post-production partnerships to advance end-to-end solutions for creating next generation digital media experiences.

Announced plans to acquire Withings in April 2016, to accelerate its digital health business. Withings is a pioneer and leader in the connected health revolution with a family of award-winning products and services. The acquisition is expected to close in early Q3 2016.

Financial highlights

The following table presents Combined company historicals for Nokia which reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

22

(1)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

Financial discussion

Net sales

Nokia Technologies net sales decreased 27% year-on-year and decreased 52% sequentially. On a constant currency basis, Nokia Technologies net sales would have decreased 28% year-on-year and would have decreased 52% sequentially.

Year-on-year discussion

The year-on-year decrease in Nokia Technologies net sales in the first quarter 2016 was primarily due to the absence of non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested IPR and IPR divested in the first quarter 2015, all of which benefitted the first quarter 2015, as well as lower licensing income from certain existing licensees that experienced decreases in handset sales. This was partially offset by higher intellectual property licensing income from existing and new licensees.

Nokia Technologies net sales for the first quarter of 2016 included revenue from all licensing negotiations, litigations and arbitrations to the extent that the criteria for revenue recognition have been met.

Sequential discussion

The sequential decrease in Nokia Technologies net sales in the first quarter 2016 was primarily due to the absence of non-recurring adjustments from an existing agreement of approximately EUR 200 million benefitting the fourth quarter 2015.

Nokia Technologies net sales for the first quarter of 2016 included revenue from all licensing negotiations, litigations and arbitrations to the extent that the criteria for revenue recognition have been met.

23

Non-IFRS Operating profit

Year-on-year discussion

The year-on-year decrease in Nokia Technologies non-IFRS operating profit was primarily due to lower non-IFRS gross profit and, to a lesser extent, higher non-IFRS SG&A expenses, partially offset by lower non-IFRS R&D expenses.

The decrease in Nokia Technologies non-IFRS R&D expenses was primarily due to the focusing of research investments towards the areas of digital media and digital health, as well as lower patent portfolio costs.

The increase in Nokia Technologies non-IFRS SG&A expenses was primarily due to the ramp-up of new businesses and higher business support costs.

Nokia Technologies non-IFRS other income and expenses was approximately zero in the first quarter 2016, compared to an income of EUR 1 million in the year-ago quarter.

Sequential discussion

The sequential decrease in Nokia Technologies non-IFRS operating profit was primarily due to lower non-IFRS gross profit and, to a lesser extent, a net negative fluctuation in non-IFRS other income and expenses, partially offset by lower non-IFRS R&D expenses.

The decrease in Nokia Technologies non-IFRS R&D expenses was primarily due to lower patent portfolio costs, as well as lower investments in digital media following the launch of the OZO virtual reality camera.

Nokia Technologies non-IFRS other income and expenses was approximately zero in the first quarter 2016, compared to an income of EUR 7 million in the fourth quarter 2015.

24

Group Common and Other

Financial highlights

The following table presents Combined company historicals for Nokia which reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

(1)Combined company historicals reflect Nokia’s new operating and financial reporting structure, including Alcatel-Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. For more information on the combined company historicals, please refer to note 1, “Basis of Preparation”, in the notes to the financial statements attached to this report.

25

Financial discussion

Net sales

Group Common and Other net sales increased 16% year-on-year and decreased 7% sequentially. On a constant currency basis, Group Common and Other net sales would have increased 7% year-on-year and would have decreased 5% sequentially.

Year-on-year discussion

The year-on-year increase in Group Common and Other net sales in the first quarter 2016 was primarily due to Alcatel Submarine Networks, partially offset by Radio Frequency Systems.

Sequential discussion

The sequential decrease of in Group Common and Other net sales in the first quarter 2016 was primarily due to Radio Frequency Systems and Alcatel Submarine Networks.

Non-IFRS Operating profit

Year-on-year discussion

On a year-on-year basis, in the first quarter 2016, Group Common and Other non-IFRS operating loss decreased, primarily due to a net positive fluctuation in non-IFRS other income and expenses and higher non-IFRS gross profit.

The increase in Group Common and Other non-IFRS gross profit was primarily due to Alcatel Submarine Networks, partially offset by Radio Frequency Systems.

Group Common and Other non-IFRS other income and expenses was an income of EUR 3 million in the first quarter 2016, compared to an expense of EUR 11 million in the year-ago quarter. On a year-on-year basis, the change was primarily due to a net positive fluctuation in realized gains and losses related to certain of Nokia’s investments made through its venture funds.

Sequential discussion

On a sequential basis, in the first quarter 2016, Group Common and Other non-IFRS operating loss decreased primarily due to a net positive fluctuation in non-IFRS other income and expenses.

Group Common and Other non-IFRS other income and expenses was an income of EUR 3 million in the first quarter 2016, compared to an expense of EUR 25 million in the fourth quarter 2015. On a sequential basis, the change was primarily due to a net positive fluctuation in realized gains and losses related to certain of Nokia’s investments made through its venture funds.

26

Cash and cash flow

Nokia change in net cash and other liquid assets (EUR billion)

(1)Total cash and other liquid assets less interest-bearing liabilities.

(2)Beginning from the first quarter 2016, Nokia results include those of Alcatel-Lucent on a consolidated basis. Accordingly, Nokia results beginning from the first quarter 2016 are not directly comparable to prior period Nokia standalone results.

In the first quarter 2016, Nokia’s total cash and other liquid assets increased by EUR 2 637 million and Nokia’s net cash and other liquid assets increased by EUR 471 million.

Foreign exchange rates had an approximately EUR 110 million positive impact on net cash.

On a sequential basis, net cash and other liquid assets were affected by the following factors:

In the first quarter 2016, Nokia’s net cash from operating activities was negative EUR 1.6 billion:

·             Nokia’s adjusted net profit before changes in net working capital was EUR 298 million in the first quarter 2016.

·             Total cash outflows related to working capital of approximately EUR 1.6 billion. Nokia had approximately EUR 180 million of restructuring-related cash outflows in the first quarter 2016, primarily related to previous cost

27

savings programs. Excluding this, net working capital generated a decrease in net cash of approximately EUR 1.4 billion, primarily due to a decrease in short-term liabilities, an increase in inventories and an increase in receivables.

·                  The cash outflows of approximately EUR 1.1 billion related to short-term liabilities were primarily due to a decline in accounts payable of approximately EUR 650 million (of which approximately EUR 350 million related to our actions to harmonize working capital processes and practices, particularly in the area of payables, and approximately EUR 300 million was attributable to seasonality), the termination of Alcatel-Lucent’s license agreement with Qualcomm which resulted in approximately EUR 280 million of cash outflows and a decline in accrued expenses and other short-term liabilities of approximately EUR 200 million.

·                  The cash outflows of approximately EUR 40 million related to the increase in receivables were primarily due to cash outflows of approximately EUR 1.0 billion related to reductions in the sale of receivables (debt-like items), in accordance with our Capital Structure Optimization Program. This was almost completely offset by cash inflows related to a seasonal decline in receivables and cash inflows related to the catch-up payment from the Samsung arbitration award.

·                  The cash outflows related to a seasonal increase in inventories were approximately EUR 220 million.

·             In addition, Nokia had cash outflows of approximately EUR 130 million related to income taxes and cash outflows of approximately EUR 170 million related to net interest.

In the first quarter 2016, Nokia’s net cash inflows from investing activities primarily related to an increase in net cash of approximately EUR 2.0 billion related to the acquired net cash and other liquid assets of Alcatel-Lucent, partially offset by approximately EUR 80 million of capital expenditures.

28

Nokia’s year to date performance

Financial highlights(1)

The following discussion is of Nokia’s reported results for January-March 2016 which comprise the results of Nokia’s businesses — Nokia’s Networks business (including Ultra Broadband Networks and IP Networks and Applications) and Nokia Technologies, as well as Group Common and Other. For more information on the reportable segments, please refer to note 3, “Segment information and eliminations”, in the notes to the financial statements attached to this report. Comparisons are given to January-March 2015 Nokia standalone historicals, which have been recast to reflect Nokia’s updated segment reporting structure, unless otherwise indicated.