Good morning, ladies and gentlemen. Welcome to Nokia's Fourth Quarter 2023 Results Call. I'm David Mulholland, Head of Nokia Investor Relations. And today with me is Pekka Lundmark, our President and CEO; along with Marco Wiren, our CFO. Before we get started, a quick disclaimer. During this call, we will be making forward-looking statements regarding our future business and financial performance and these statements are predictions that involve risks and uncertainties. Actual results may therefore differ materially from the results we currently expect. Factors that could cause such differences can be both external as well as internal operating factors. We have identified such risks in the Risk Factors section of our annual report on Form 20-F, which is available on our Investor Relations website. Within today's presentation, references to growth rates will mostly be on a constant currency growth rate basis and where we refer to margins, it will be based on our comparable reporting. Please note that our Q4 report and a presentation that accompanies this call are published on our website. The report includes both reported and comparable financial results and a reconciliation between the two. With that complete, in terms of the agenda for today, Pekka will give an overview on the quarter and then Marco will give into a bit more detail on some of the key factors impacting our financial performance before Pekka gives a brief conclusion when we move to Q&A. With that, let me hand over to Pekka.

Thank you, David and thank you to everyone for joining us today. So, let me start with an update on some of the strategic and operational changes we announced with our Q3 results in October. We are evolving our operational model to give our business groups increased autonomy and have now embedded our sales teams into the business groups. This announcement has been well received by our customers. We have hit the ground running in 2024 to embed sales teams into the business groups happened at the start of the year. We have appointed customer account executives and the country manager role has also been reinforced. The customer account executives are there to ensure that we still offer one point of contact and person responsible for overall relationship management with customers without detracting from the accountability of the business groups. Some corporate functions have also moved to the business groups as we move to a leaner corporate center. During first half of 2024, we will begin reporting business group regional sales and cash flow metrics to further enhance transparency. And we already commenced the process of resetting our cost base during 2023. We expect this program will generate EUR 400 million of gross savings during 2024. If we then turn to Q4 and 2023 full year we, of course, saw a meaningful shift in customer behavior impacting our industry. This was driven by macroeconomic environment and high interest rates along with customer inventory digestion especially in North America. This led to our fourth quarter sales declined by 21% and full year sales declined by 8% in constant currency. Proactive action across our organization meant we were able to protect our profitability, while continuing to invest in R&D, and we delivered a comparable operating margin of 14.8% in Q4 and 10.7% for the full year. This was a resilient performance considering the challenging environment and lower contribution from our high-margin patent licensing business as some renewals remained outstanding. We were pleased with our cash performance in the quarter where we generated €1.7 billion of free cash flow and we ended the year with a net cash balance of €4.3 billion. Positively, we also ended the year with improving order intake. Our fourth quarter book-to-bill was above one, particularly supported by our network infrastructure business, indicating at least some improvement in the overall spending environment. Moving on to Network Infrastructure. Sales declined by 24% in constant currency versus the year-ago quarter, which had been particularly strong. For the full year, sales declined by 9%, mainly, driven by IP and Fixed Networks, optical networks grew by 5% and ASM declined slightly. There was a favorable development in gross margin, which impacted by improved by 60 basis points versus the year ago quarter and by 130 basis points for the full year, and this was driven by positive product mix. Operating margin in the quarter decreased to 13.9% due to the impact of lower sales. For the year, our -- ended up at 13.1%, which was comfortably within the range we had shared at the beginning of the year and above the targets we had set for ourselves back in 2021. As you remember, we had Capital Markets Day back then where we set the targets for each of the business in 2023. Also, if I can give you a quick update on the profitability of each of the units within NI for the full year in 2023, IP Networks saw its profitability declined slightly due to the weaker sales coverage, but remains mid to high-teens operating margin. Optical networks improved strongly benefiting from the sales growth to deliver a high single-digit operating margin. For fixed networks, despite the sales decline, product mix was beneficial and delivered high-teens operating margin. And finally, submarine networks remained low single-digit, but did improve slightly year-over-year. Mobile Networks Q4 saw the continued impact of normalization of India rollout and the dual impact of inventory digestion and macroeconomic pressure spending in North America. We were, however, pleased to see a robust gross margin performance supported by favorable regional and product mix in Q4. Similarly, operating margin for the quarter was 11.5%, an improvement of 470 basis points versus the year ago quarter, driven by gross margin and lower variable pay accruals. For the full year, in spite of top-line challenges, operating margin was 7.4%, which was within our stated planning assumption for the year and at the higher end of our targets we set back in 2021. Finally, on Mobile Networks, AT&T's recent announcement to move to a largely single-source radio network was, of course, a disappointing development. As we said at our investor event in December, and as confirmed by AT&T, this does not reflect the technological competitiveness that we have achieved with our products. This has been evidenced by our significant increase in rent market share in recent years. I firmly believe Mobile Networks has the right strategy in place to create value for our shareholders in the future with opportunities to gain share, diversify our business and achieve a double-digit operating margin longer term. CNS sales declined in Q4 by 5%, driven by declines in all businesses with the exception of business applications, which grew. Gross margin improved, and this flowed through to operating margin and the full year improved from 5.3% to 7.9%. The 7.9% operating margin, we delivered is at the higher end of what we targeted at the start of the year. It is slightly below the lower end of what we had set as target back in 2021. This is due to the increased investments we decided to make in private wireless, which has been consistently delivering double-digit growth. 2023, did see us making progress in our portfolio rebalancing efforts with the divestment of VitalQIP, the announced sale of our device management and service management platforms businesses in December and the partnership we announced with Red Hat on cloud infrastructure. We also led the industry trend towards programmable networks with the launch of our network as code platform which now has nine commercial agreements. Nokia Technologies net sales decreased 63% on both the reported and constant currency basis in the fourth quarter as the year-ago quarter had a €305 million one-off non-cash benefit we explained at the time. Excluding this, the year-on-year net sales performance primarily reflected lower net sales from a license that expired at the end of the third quarter 2023. The financial performance in 2023 was, of course, not what we had hoped for as some deals took longer to renew than we had expected. There were still some very important achievements. We signed long-term renewals with both Apple and Samsung, along with signing a new agreement with Honor. Positively, as we, of course, announced yesterday, we have now achieved a renewal with Oppo. And we are very close to concluding another agreement in China. With these agreements, we are now in the final stages of our smartphone license renewal cycle with only the recently expired major agreement outstanding. This provides long-term stability to our Nokia Technologies business, which can now increasingly focus on growing our licensing run rate in the new growth areas, including automotive, consumer electronics, IoT and multimedia. I remain confident that with growth in these areas, we can return to an annual net sales run rate of €1.4 billion to €1.5 billion in Nokia Technologies in the mid-term. Enterprise net sales decreased 3% in constant currency in Q4 in comparison to a very strong year ago quarter. However, for the full year, we grew 16%, which shows strong continued momentum. Overall, customer engagement also remains strong as we added 151 new enterprise customers in the quarter. Private wireless continued to show strong growth in 2023 and now has more than 710 customers. You can also see on the right-hand side of this slide, a breakdown of the €2.3 billion of enterprise sales we had in 2023. We wanted to give a bit more color around the components of our enterprise business. Almost half of our enterprise sales come from areas where we sell our NI products into targeted enterprise verticals, particularly those that value mission-critical networks. Private wireless is now just over one-quarter of our enterprise sales having grown strongly for several years and then web scale is an increasingly important opportunity for us as well. Now I will hand over to Marco to go through the financials in more detail.

Thank you, Pekka, and good morning, good afternoon from my side as well. And let's start by looking at the regional performance of the businesses. And in quarter four, all regions declined and we saw growth in Middle East and Africa. Most notably, North America declined once again and reflected the inventory digestion and macro uncertainty, which has been dominating most of the year. India declined by 30% and this was related to the 5G deployments that continue to normalize. And in Europe, we saw a meaningful decline in the quarter and some of which was driven by Nokia Technologies, which is entirely reported in the Europe numbers. Otherwise, the decline was mainly driven by Mobile Networks and Network Infrastructure. And then looking at the operating profit in the quarter. Pekka explained a number of these drivers already, but a few things that I want to point out. And first one is common contribution, which was better than a year ago quarter, and this was driven by venture fund where the performance improved. In Mobile Networks and Cloud and Network Services, they improved somewhat year-on-year. And then, however, the majority of the decline was driven by Nokia Technologies with a year ago quarter benefited from the €305 million one-off that Pekka mentioned. And then moving to our cash position in quarter four. We had a strong quarter and ended the year with €4.3 billion of net cash, an increase of €1.3 billion compared to quarter three. And this is mainly reflected strong quarter four profits and a significant inflow of cash related to net working capital. And this was due to both lower inventories as well as receivables, which benefited from partial prepayment of licensing agreement that was made in 2023. And during quarter four, we returned over €200 million to shareholders through dividends and the completion of the second tranche of our two-year €600 million share buyback program. In the full year 2023, we returned over €900 million to shareholders through dividends and share buybacks. Free cash flow for the full year was just over €800 million and this is 34% conversion compared to operating profit, and this was in line with our guidance of 20% to 50% for the year. Then turning to our 2024 cash flow outlook. We try to provide a view here on the moving parts in the 30% to 60% free cash flow conversion from comparable operating profit that we have guided for. We do expect to see a positive impact from our operational and net working capital in 2024 as we continue to see some reduction from the build up we saw during the past two years. And then we expect cash taxes to be about €500 million in 2024. And then we assume also cash flow related to restructuring of about €550 million. Although, I would like to note that we also target to achieve the €500 million in-year cost savings in 2024, and this related both the program we just launched, but also the final savings of our prior 2021 program. And then finally, Nokia Technologies, we expect cash generation to be approximately €700 million below operating profit, and this is due to prepayments that we received in 2023. From 2025 and onwards, we expect greater alignment between Nokia Technologies, cash generation and operating profit. So taking these on the consideration, we should land into the 30% to 60% conversion rate. Then as you look out to 2026, you can see that we are well on track to reach our target of 55% to 85% conversion, especially as mega technologies, cash generation starts to align more with its operating profit. And then at the end of 2023, our net cash represented about 19% of our net sales, which is above the target of 10% to 15% that we laid out in the beginning of the year. And given this strong cash position, the Board of Directors will propose an increase in our dividend to €0.13 per share. And the Board is also proposing to initiate a new buyback program of €600 million over two years. And given the ongoing macroeconomic uncertainty and industry challenges, we feel it is prudent to take a measured approach to getting to the 10% to 15% net cash target. And if we now look at the 2024, you can see in the presentation on the release, the planning assumptions we have for our business groups in 2024. And as you can see, these are well aligned with the commentary we provided back in December. I will not go into detail on each number, but you will note that we provide a net sales assumption by business group instead of the targeted addressable market assumptions we have provided in the past, which we hope gives greater transparency as well. And piecing all of these assumptions together, you can understand our full year outlook for 2024, we are now guiding for comparable operating profit between €2.3 billion and €2.9 billion, which takes into consideration all of the BG assumptions. We also expect the free cash flow conversion between 30% and 60% for the reasons I talked through earlier. And one further planning assumption we have provided that I would like to highlight is around the seasonality that we expect in 2024. We expect Q1 net sales in our network businesses to show a largely normal seasonal decline sequencing. And since 2016, the average Q1 sequential decline in sales has been 23%. And we expect significant seasonality in profit generation in 2024 with lower sales coverage to weigh on operating profit in quarter one, especially in MN and CNS. And then the company then expect progressive improvement in these businesses throughout the year. I also want to draw your attention to some changes that we will be making to disclosures and accounting for 2024. These changes are being made to enhance transparency and further support understanding of financials of our business goals. First, by quarter two at the latest, we start disclosing regional sales and cash flow metrics by business growth, which help provide a more complete picture of the individual parts of the business. And the second is that we will change the way of account for the impact of our venture funds. Historically, they have been recorded in other operating income and expense and therefore, included in our operating profit. But going forward, we will now report this in financial income and expenses, and we believe that this makes sense given the volatility of these valuations in recent years. And with that, back to you, Pekka, for some final thoughts before Q&A.

Thanks, Marco. And just very quickly, before we turn to Q&A, let me conclude with a couple of remarks. First of all, as already discussed, we faced a highly challenging environment in 2023, but considering the 8% decline in net sales I believe we delivered a resilient financial performance. Our business group did a good job maintaining profitability and still delivering on operating margin targets as we said at the start of the year. We also delivered a solid cash performance in line with the guidance we gave at the start of the year. This is enabling the Board to propose an increase in our shareholder distributions for the coming year. Secondly, we are moving quickly on our cost reduction program. And more importantly, we continue to take steps to increase the operational autonomy of our business groups. We want to make sure they are empowered to take the right decisions to create shareholder value into the future. And finally, while the environment will remain challenging in the first half of 2024, the strong order intake we saw in Q4 points to some improvement in the spending environment, especially for Network Infrastructure. Also, we are now in the final stages of our smartphone license renewal cycle in Nokia Technologies. This will lead to greater stability in Nokia Technologies going forward and will allow the business to focus more on its growth areas. With that, I will hand back to David for the Q&A.

Thank you, Pekka and Marco, for the presentations. [Operator Instructions] Alice, with that, could you please give the instructions?

We will now begin the question-and-answer session [Operator Instructions] I will now hand the call back to Mr. David Mulholland.

Thanks, Alice. We'll take our first question from Jakob Bluestone from BNP Paribas Exane. Jakob, please go ahead.

Thanks, David. Hi. Good morning. I was hoping you could maybe expand a little bit on the green shoots commentary. Specifically, what do you think is driving the sort of improvement coming through? And maybe if you could just comment a little bit whether you're seeing any green shoots in Mobile Networks or if it's just on the Network Infrastructure side? Thank you.

Yes. Thank you. The comment on green shoots was clearly more on the NI side. And of course, the good thing now is that, as you know, we have the four businesses in NI, we had strong order intake in Q4 in all 4 business divisions of NI. In IP Networks, it's driven by tailwinds in webscale and enterprise contracts. In Fixed Networks, its driven by government funding, which starts to benefit the market already now in order intake, but because of the delivery cycle, then in terms of sales and topline, mostly in the second half of 2024. In Optical Networks, it's simply share gains because of our strong product momentum and the excellent feedback we are receiving from customers to our recent product announcements. And in Submarine Networks, we already had a strong order book in the beginning of the quarter, but we had great order intake in Q4 as well, and that combination is now going to be driving the outlook for that business going forward.

Did you have a follow-up, Jakob?

Maybe just on the Mobile Networks. What are you sort of seeing there? It sounds like it's still pretty tough?

Yes. The -- I mean, the market will remain tough at least for the first half of the year. When you look at the Mobile Networks sales guidance for this year, there, of course, you need to remember that the significant part of that is driven by India. Our group sales in India were -- in 2022, they were €1.3 billion and last year, €2.8 billion. And now we are expecting that 2024 on group level would be somewhere between €1.5 billion to €2 billion and most of that decline that we will see in India this year will be in Mobile Networks. So, that already -- when you do the math, you can see that, that explains a significant part of the drop. But overall, I mean, we are still expecting or waiting for mobile operators throughout the world to start investing because investments have been very low, 2023 was a tough year for the whole market, of course, most pronounced in North America. Fact still remains that only about 25% of base stations outside of China are 5G midband. And a small majority of all core networks have been upgraded 5G advanced. And those investments will need to come because without that operators will not be able to monetize 5G properly. Right now, interest rates are still high. Many operators have high leverage. The good thing would be that if interest rates would come down, data traffic will continue to grow 20% to 30% per year. So, gradually, that will also start to force operators to again invest. But the reality is that nobody knows when that will come. I'm absolutely convinced that it will come, but we are not yet seeing concrete signs of it happening.

Thank you, Jakob. We'll take our next question from Simon Leopold from Raymond James. Simon, please go ahead.

Great. I wanted to see if you could help us in terms of how the AT&T transition with the ORAN project, is affecting your revenue assumptions? And what I'm sort of trying to tease out here is there sort of a step-down rapid decline, or is there may be a long tail of spending before a slowdown? I just like a little bit of color about how we should think about that revenue impact in 2024? Thank you.

Okay. So, just as a reminder, we said that AT&T represented last year 5% to 8% of sales in Mobile Network. So, that is important to keep in mind that that 2023 number was significantly in terms of euros or dollars was significantly lower than in 2021 or 2022. So, we had already seen a significant decline in AT&T volumes because of their lower investments. Now we have an existing contract with a five-year contract with AT&T that was published in the beginning of 2021. Negotiations are still ongoing with respect to how we execute on this contract and before we have concluded those negotiations, it is hard to give a clear answer as to the -- how the trajectory of the decline will look like. But clearly, we do expect our sales to AT&T to drop this year. We have to remember, though, that when we, first of all, look at Mobile Networks, irrespective of this contract, we will continue to supply microwave radios and femto products to AT&T. And then outside of mobile networks, we obviously continue to remain a key supplier in both Network Infrastructure and CNS. And those two businesses do not have anything to do with the radio network decision that AT&T made.

Did you have a follow-up?

Yes. And as a follow-up, the forecasting this quarter in terms of the planning, we don't have a revenue outlook, but there is the operating income outlook and I imagine that, that is what's really important to folks. But I assume there is an underlying revenue assumption, you would have given it to us, I imagine if you wanted to, and you've chosen not to. So maybe help us understand sort of the thinking and the puts and takes on what assumptions you've made for full year 2024 revenue and the choice to guide the way you have? Thank you.

Yes, absolutely. Thank you. As you see, we changed a little bit how we are guiding for this year, and we decided to give more flavor and information about our assumptions for business growth. And we believe that this will be more helpful for you to get a better picture of each of the businesses, which are then combining the whole company. And for the group level, we guide on the operating profit and free cash flow. And then you can see that we have -- on the business group's assumptions, we have both net sales and also operating margin. And then when it comes to technologies, we have also given you what is the operating profit assumption for this year. And also the seasonality we have given you very – hopefully, good understanding how the year will play out. And the seasonality will be I would say, more back to normal that we've seen in some years ago as well and very heavy second half quarter one is about 23% normally lower than quarter four year before. So I hope that there's more detailed assumptions in the guidance will give you a better understanding how the company is going and also giving you a better understanding of the different areas and businesses.

Maybe as a quick follow-up, just to put things in perspective in terms of seasonality. So when we are saying that we are returning to a more normal seasonality, how was this then abnormal in 2023? Three, there were two main reasons for that. In Mobile Networks, there were significant deliveries in India in the first half of the year, which kind of distorted the seasonality. And then the same thing, but for a different reason in NI as well. The beginning of the year was extremely strong because there were catch-up deliveries that had to do with the supply chain shortage and the extremely high orders that operators have placed as a result of increased demand as a result of COVID. So that's why both NI and MN had unusual seasonality in 2023 and both of those we expect to return back to normal in '24.

Thanks, Simon. We'll take our next question from François Bouvignies from UBS. François, please go ahead. François Bouvignies: Hi, thank you, very much. Just wanted to ask you on the hyperscale wins and momentum. Pekka, you've seen in your remarks and in the release, quite excited about the wins and the network infrastructure momentum. And I wanted to ask you from the switching and routing, do you -- are you taking some market share there? Can you elaborate a bit on the hyperscale wins momentum, it's related to AI? Just to understand a bit better the momentum because when we look at Arista and Cisco, it doesn't seem they have a lot of momentum. So it's very specific to you, which would suggest that you are gaining some market share. But then you said a bit earlier that the market share is more on the optical side and it seems to be more market-driven on the other side of routing and fix. So just to elaborate, would be great. That’s my first question. Thank you.

That's a highly relevant question. The NI business with hyperscalers has been fairly optical-driven exactly as I commented before. We have existing optical business with them that is looking pretty good. But the main growth potential for us there is really in data center switching. And I cannot disclose the name, but we had a significant order from one of the hyperscalers in Q4. We hope to be able to disclose the name also in not too distant future, but we are not able to do it yet. And this will be driving growth for web scale business in the IP networks side of NI going into 2024. Of course, we have to remember that compared to our competitors, our switching business, data center switching business is small. So we are a challenger, but the good side of that is, of course, is that now when we have an increasingly strong product portfolio for that based on our in-house silicon, which is welcomed by hyperscalers combined with strong software offering that offers a lot of flexibility for different data center architectures, we believe that there is a possibility to gradually break into this market and get meaningful growth in the segment because, of course, we know -- we all know that the CSP market as a whole will not be a growth market. Of course, we target to gain share there, but data centers will be the most significant growth market in the whole world in our industry. And that's why, it is so important to increasingly focus on that segment. François Bouvignies: Yes, just a quick clarification on what you said Pekka, the deal you signed that you can't disclose yet. I mean, I guess it's a market share. I mean, I guess you are kind of a market share winner, I would imagine, given your low footprint in originally in this?

Yes, it is. It is a market share win, yes. François Bouvignies: Okay. And just my follow-up question is on Open RAN. AT&T kind of surprised the market with this deal. And I just was wondering if you see some acceleration in terms of activity of open RAN from other operators following that deal. I mean, we are a few months now, a couple of months after this announcement. From what to understand the other operators are also looking closely at it. And so do you expect other announcements from other operators this year of this kind, or do you really think it's like just a one-off from now?

Open RAN is gradually gaining speed. I don't expect and I have not seen that the AT&T decision would have led to any kind of increase in open run interest in other parts of the world. There are a lot of estimates that in 2028, O-RAN would represent roughly 25% or 24% of the total RAN market. So that gives you a perspective. What I really suggest is that people need to follow up very closely that what the facts about different rollouts are including in all announced projects, how quickly will it be? And will it be true O-RAN, or will it be O-RAN where you just have the same supplier on both sides of the interface. We have two real commercial O-RAN deployments ongoing at the moment. One is with NTT DOCOMO in Japan, and the other one is the recently announced Deutsche Telekom project in Germany. We have already connected our DU and CU to five suppliers radio units, which is more than any other supplier. So gradually, O-RAN fronthaul -- open fronthaul interface is becoming commercial reality. It starts from simple radios and only gradually moves to massive MIMO, but it will eventually get there as well. So it will be part of the market, a small part of the market for quite some time. But as I have said before, we see it as more as an opportunity than a threat for Nokia.

Thanks, Francois. We'll take our next question from Sami Sarkamies from Danske Bank. Sami, please go ahead.

Hi, Thanks for the comment. For Mobile Network of less than €9 billion this year with low single-digit EBIT margin, just curious how will you be able to retain scale and grow revenues to €10 billion target that will be required for double-digit margins in the long run? I mean if we look at the latest forecast from the like of Delora [ph] the five-year outlook for RAN market looks quite flattish even if you assume some share gains from Chinese rivals. Do you have anything else planned than the cost program that was announced after third quarter results?

Of course, I mean, the cost program is an important element in this, but we also have to remember that perhaps with the exception of India, 2023 was really weak year when it comes to investments. And when you look at the big picture, only 25% of 5G base stations are mid-band. So that is suggesting that there will have to be over time in the second half of 2028, there will have to be significant investments in 5G radio networks in different parts of the world already before 6G starts to come in. Data traffic continues to grow 20% to 30% of the year. And then in addition to that, the Chinese will be increasingly under pressure because of political reasons and because of the various actions that the Western countries have taken to limit their access to latest silicon. So it is very clear that to get to €10 billion top line, we have to continue to take market share. AT&T is, of course, a setback. From there, we need to start climbing back up towards a market share that we'll need to start by three, if you want to get to €10 billion top line. It is a challenge, absolutely, and that's why we have provided a fairly low guidance for this year's profitability, 1% to 4%, and then we commented 2026 target at the December -- December event, we are not assuming that we would get to double-digit by 2026. Then we also need to keep in mind that when we talk about the second half of the decade. By then, we will have significantly increased the non-CSP business part of Mobile Networks. We are already now growing, albeit from a low base, fast in private wireless. And then a very important target for the second half of the decade is the defense industry, where the spending is significant. It is currently mostly proprietary military technologies when it comes to communications. And the challenge they are facing is that it is getting extremely difficult to being cost competitive there when the technologies are proprietary. So it's getting extremely expensive. And that's why the whole defense industry in several parts of the world is looking at commercial technologies at the moment, such as 5G to provide an alternative to proprietary military technologies. We have said that the actions that MN is taking will allow them to lower the level of net sales to reach this 10% operating margin to approximately €10 billion, as you said. So that is a correct figure that you mentioned. That is our target, how we are modeling the business. Currently, before the cost action started the level to reach a 10% operating margin in terms of sales was €11.5 billion. So now we are taking that to €10 billion.

Do you have a quick follow-up, Sami?

Maybe technical good regarding technologies. There was a slight drop in IPR run rate during Q4. Can you elaborate on that? And then just update on where we will be after the OPPO renewal? I think previously, you were talking about €1.1 billion starting this year. But now, I guess it must be a bit more than that?

Yes. Thank you, Sami. What it comes to run rate in quarter four, we had one license that expired at the end of quarter three, and that's why we see a run rate change as well. But if you look 2024, so we are guiding an increase in our run rate, and we just cannot quantify these yet because we have still some deals that are outstanding and because the content of the deals are confidential, we are not allowed to give you that much information about that. But I hope that perhaps in quarter one, we will give you more flavor on this as well. And when it comes to 2024 operating profit, we said at least €1.4 billion for the full year, and this is including the catch-up as well.

Thanks, Sami. We'll take our next question from Richard Kramer from Arete. Please go ahead, Richard.

Thanks very much, guys. Pekka, my question is, I'm just conscious that this year, you've laid out targets and talked about order strength at the beginning of the year and then needed to reduce your targets for margins and cash conversion. Now you're looking at €1 billion of cash outflows for restructuring. And so my question is, how are you going to mitigate the risk of losing sales or momentum or other opportunities in the midst of this reset? And are you confident that you can undertake the restructuring without opportunities that you've laid out, the green shoot…

Yes, Dave. I mean she biggest restructuring when it comes to customer interface, that actually went live already on the first of January. So we did it very quickly. We made the decision late in the year, and we planned and executed everything very, very quickly. So now Q1 will be the quarter of stabilization in the customer interface. And I have to say that when we have explained the logic to the customers, basically saying that we want for each business to place highly empowered teams in front of the customer so as to short-term simplify the organizational structure and shorten the distance between the customer and the real decision makers for each business that has been very well received. And when you then complement that with the account executive concept where one of the sales leads of the businesses take on as an additional responsibility to run the overall relationship management with the customer and then to coordinate cross BG matters. So that simplification has been well received. Of course, this type of things always cause stability issues in the short term, but I believe that it will quickly be behind us and people will start to see the benefits of this new model. Then when it comes to the other cost savings in addition to the simplification of the customer interface, there, we have to look at each business separately. And of course, as we said, Mobile Networks accounts for roughly 60% of the action we are taking. And that's, of course, a reflection of the overall industry outlook and the challenges that, that business is facing. But this is already also well underway in terms of implementation. And they are the most important goal is really, as we said in December also is to protect our R&D output.

Okay. Thank you. Okay. Please.

Yes. If I just then move on to the other businesses. So because this is very much MN-centric, then NI has a different situation because there we have as I said, great order intake in Q4, and we have a 2% to 8% growth outlook for this year. So there, obviously, the need to restructure the cost base is not the same as it is in the MN business. And then in CNS, the action is mostly centered around portfolio rebalancing. You will have seen that we -- we made some divestments last year, and we are getting close to the type of portfolio that we look at -- are looking for the rebalancing is not 100% done yet. We are still working on certain things. That's really the name of the game in CNS. And then tech we already discussed because now with the Oppo deal and hopefully the rest coming soon, we will see significant stability in that business. So all four businesses are in a fundamentally different place when it comes to the restructuring need.

Okay. Thanks. And then one quick one for Marco. Again, just conscious that your predecessor had relied in the past on sale of receivables. You did mention that in the statements. Could you give us a sort of rough quantification of how much sales and receivables helped this very good cash flow performance in Q4? Thanks.

Yeah. Thank you. We actually have changed quite dramatically when it comes to how we see sale of receivables. The main thing what we do when we use sale receivables is to mitigate risks. So it could be country risk or customer risk and also the cost -- hedging costs, for example, in certain currencies. So the principle is quite different. And now in quarter four, we mentioned that, but it was a meaningful increase. So in some quarters, we see changes in sale of visibles, and it could be just like I said, that -- it could be a specific country or customer where we see that it's good that we hedge ourselves by selling the receivable or in some cases, actually, we see also that the customers are themselves paying for sale of receivables. And then, of course, it's an operator to do that.

Thanks, Richard. We'll take our next question from Daniel Djurberg from Handelsbanken. Daniel, please go ahead.

Thank you, and good day, gentlemen. And congratulations on solid year-end, and thanks for taking my question. I would like to ask you a little bit on coming back to the catch-up and the IPR revenues that you see. And the question is really, if the €1.4 billion low level that you aim for in technologies in 2024. If this is dependent also on that you signed a recently expired name, and if it also includes HP and Amazon that you have litigation for it or if you can more or less meet this €1.4 billion also excluding these three?

Yeah. What comes to different deals and exactly their levels we cannot go into, as you understand, these is confidential. But we have guided on the best knowledge that we have today and what we see will happen throughout the year. And we've been clear on that as well that this is including the catch-up for those Oppo deal that we just signed. And we also expect to sign couple other deals in technologies that we have -- that has expired before the year-end.

Perfect. And a follow-up, if I may, on the broadband equity and access deployment program in the US. Have you seen any news there in terms of financing, any early order intake. So if it's still your view that it will be supportive on the second half of this year? Thanks.

Absolutely, it will be supportive. And exactly, as we said earlier, the impact starts to be when we talk about sales it starts to gradually come in, in the second half of the year. We have a lot of stuff in the pipeline that we are working on at the moment. So second half of 2024 and then, of course, 2025, it will play a meaningful role in NI, especially Fixed Networks, but there could also be benefits to IP networks and Optical Networks. Of course, we need to keep in mind that when we talk about the €42 billion total program value, approximately 10% of that is addressable to us. The rest will go to something else like digging cables into the ground.

Thanks Daniel. We'll take our next question from Joseph Zhou from Barclays. Joseph, please go ahead.

Hi. Thank you for taking my questions. One and then another follow-up. So firstly, on your free cash flow conversion guidance for before it remains well below the long-term target despite the boost from the IPI cash flow payments. I understand you talked about the moving parts with restructuring and also some prepaid payments already happened. And are there any reasons for us not to expect a bigger working capital reversal given the 5G cycle? And just wondering what are we -- we're missing here?

Yes. Just like you mentioned as well that we will have the negative impact by the prepayments that we received in technologies in 2023. And then we expect also working capital to continue to have a positive impact. But these -- if you sum up these, we believe that we are well in the range that we have guided, which is improving from last year. Last year range that we guided was 20% to 50%. Now it's 30% to 60%. And then year after that, we believe that we are well in our long-term guidance range as well. So it's step-by-step improvement that we see in the free cash flow conversion ratios.

And when it comes to networking capital, we already saw good release in Q4 last year, which was one of the drivers behind the strong cash flow in Q4. There is still additional potential there. But I'm just kind of saying that part of it was already released in Q4. Then there is the €700 million prepayments in tech or €700 million -- no, sorry, I take it back, €700 million lower cash compared to sales -- net sales in 2024 in tech, then there is restructuring cash outflow in 2024. And then since you mentioned the catch-up payments there, you have to remember that, that will be both cash and revenue in 2024. So that does not improve the conversion. It improves the absolute cash, absolutely, but it does not improve the conversion.

Thank you. And then just a follow-up on the bid projects in North America. Just wondering how much contribution have you baked into your 2% to 8% NI growth from these bid projects in North America? And also, you talked about better orders you're seeing for these projects. And what's your visibility to the timing of these projects in terms of delivery?

Yes. Well, as I said, the timing is such that we start to see top line effects of it in the second half of -- gradually in the second half of 2024 and then into 2025. We have a strong pipeline of opportunities. If I'm not mistaken, there was something small in the order intake already in Q4, but that was small so it is taking off gradually these things because they are politically driven. They always take the time first, you allocate the money on the federal level, then it goes to the state levels, and then gradually it fluctuates the different opportunities with carriers. We have not quantified exactly how much of this would be in the 2% to 8% growth assumption in NI. But as I said, it's H2 driven and it's not huge yet in 2024. It will grow gradually throughout the second half and then into 2025.

Thanks, Joseph. We'll take our next question from Artem Beletski from SEB. Artem, please go ahead.

Yes, hello, and thank you for taking my question. I would like to actually ask on European development and looking at revenue trends, so it seems to be the case that the declines have been accelerating also excluding technologies related impact in Q4. Could you maybe talk a bit more what is happening really there? Is there also potentially some inventory digested, which is ongoing on the market?

I mean, there -- I mean, here and there, there could be some inventory digestion, but the value is in Europe is really the weak economy operators, high leverage high interest rates and consequently, their low appetite to invest. The big question is that when will that start to change, of course, lower interest rates would be great to that end. But fundamentally, I believe that they will have to start investing again. And, of course, they are talking about it, but we have not seen that much yet. What I'm afraid, and this is my big, big worry, I mean, not that much about Nokia, but as a European, there is a risk that Europe falls behind the rest of the world in terms of competitiveness because of the quality of digital infrastructure that we have. The 5G deployment is slower in Europe than in other parts of the world. Politicians and operators understand it. They are talking about it. It remains to be seen when that will start to change. But I'm convinced that it will change. But these things like mid-band penetration in 5G radio, et cetera. It is clearly lower in Europe than in many other parts of the world. But again, what we would hope to, of course, see that the operator market in Europe would consolidate so that we would get stronger, financially stronger operators. In Europe, there is one operator per four million to five million inhabitants and that is, of course, a totally different level than in any other part of the world. In India, there is -- depending on how you calculate three or four operators for 1.3 billion people. In China, there is three operators for 1.3 billion people. And in Europe, we have one operator for 4.5 million people. So the market is so fragmented that it does need to get consolidated. That's one aspect of the picture. But then there are others, as I said, interest rates, et cetera.

Do you have a follow-up question?

Yes. As a follow-up would be actually relating on some good strides what you are making on switching side. And could you maybe comment on profitability of this business, how we should think about it? Is it more like IP Networks type of margin, what you're making there?

Well, that is, of course, highly confidential when we get to one product group for one customer group. But, of course, all this has been assumed in the targets that we have both short-term and long-term targets that we have put ourselves for the NI business. IP business has good profitability and the targets that we have for that business will, of course, stay there also including the growth in switching.

Thanks, Artem. We'll take our last question from Aleksander Peterc from Société Générale. Alex, please go ahead, and if you don't mind keeping it to one question, just given the time.

Yeah. Thank you. Just a quick one to come back on Mobile Networks very briefly. Could you give us a broad idea of when you expect Mobile Networks to kind of bottom out and flatten? Is that a 2025 event, or will happen later? Maybe another way of asking this is, at what point do you expect the AT&T 5G footprint loss resulting from last year's decision to wash out of the base? I know you gave some color on AT&T and all the puts and takes, but just to give us more idea there. Thank you.

I mean I understand the question very well, but you will appreciate that it's extremely difficult to answer because, as I said, first of all, we cannot comment in the AT&T situation before we have concluded the negotiations. That is one thing. And of course, we expect to continue one way or another, at least to continue to be a supplier there as well. Then there is the whole Indian question. Volumes are right now going down. What will happen in India, which operators will invest and how much and when? How will the 4G re-farming take place in India, et cetera, et cetera. And then there is this whole question of when will the data traffic will grow to a level where operators throughout the world, including in Europe, will be forced to invest. So, it is simply too early to say that when Mobile Networks would have reached the bottom. Our outlook for this year, we have wanted to be realistic, that's why we are saying 1% to 4% comparable operating margin, but we are sticking to our longer-term ambition to reach this, what Sami also referred to in his question that with €10 billion sales, we target 10% operating margin. That's how we are modeling the business, but that does require that we also penetrate into non-CSP segments in the second half of [indiscernible].

Thanks, Alex and thank you, everyone, for joining us today. This concludes the Q&A session and today's call. I would like to remind you that during the call today, we have made a number of forward-looking statements that involve risks and uncertainties. Actual results may therefore differ materially from the results currently expected. Factors that could cause such differences can be both external as well as internal operating factors. We have identified such risks in the Risk Factors section of our annual report on Form 20-F which is available on our Investor Relations website. Thank you for joining us.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.