Nokia Capital Markets Day 2021, 2nd Q&A session

Welcome everyone to the second Q&A session. This session will include all of today's speakers. For our sell-side analysts, let me remind you about two items: first, please limit yourself to one question only as a courtesy to everyone else in the queue; and second, please remember to unmute your microphone and turn on your video after we place you into the live call. With that, let's start the Q&A session. Please raise your hand if you would like to ask a question. And our first question will come from Akshut Sutania at Credit Suisse.

Good afternoon. Maybe a question for Raghav on the CNS business. Raghav, you talked about a lot of things that are going to help improve the margins over time. You're starting from a very low base of minus 2% last year. I'm just trying to understand what's going to be the biggest delta driver for improvement in margins. You have quite an ambitious target of reaching 10% over time. We've seen with one of your peer group companies that margin improvement in this part of the business is proving to be challenging. So if we were to pick one or two items of all the measures you're trying to take, what can we focus on to give us confidence on that big improvement?

Thank you very much for the question. It's a good question. So first of all, as I talked about in my presentation, we are really focusing on five key areas of the market that are really growing fast and where our customers are looking for us to create value. And that's 5G Core, digital operations, private wireless, AI-based services, and managed security. And you will see that this market in itself in 2021 grows at 10% on a CAGR basis and will grow up to 15% on a CAGR basis as we go forward. Today our business mix in that particular segment is about 37% of our business, and as we go into 2023 almost 67% of our business will come from those emerging opportunities. And that is going to be a big driver for our margin improvement growth all the way from 2021 to 2023. In addition to that, we are driving a lot of efficiencies, remotelization of our services and our care, consolidating our workforce into centers of excellence to drive productivity, as well as delivering better customer satisfaction with digitizing processes which will provide us more agility and response. And these will be the key drivers that will really drive our margin improvements on the bottom line all the way from 2021 to 2023, and we will continue to grow faster than the market in each one of these years as we go forward.

Thank you. And for our next question, we'll go to Sami Sarkomaa from Nordea. Sami, please go ahead.

Hello, thanks for taking my question. This will go to Tommy with Mobile Networks. Can you help us understand why the EBIT margin target stands at only 5 to 8% for 2023 following all the planned measures, as you were already at that level last year? And then when looking at your closest peer Ericsson, they were at 15% excluding IPR revenues last year and are targeting even higher levels going forward. What explains such a big difference in margin level?

Thank you, Sami. In my presentation I shared with you why we moved from last year's 8% to around break-even this year, from minus 1 to positive 2%. Most of this is due to the headwind suffered in North America last year, and then partly because our 4G volumes in China are going down but are not replaced by the same amount of 5G in China, and partly because we have this increased R&D investment in 5G. That takes us to around break-even, which is a tough starting point. This is the year of the reset, and then going forward, as of right now, there are many levers that we are pulling to get to the 5 to 8%.

So the margin improvement comes in 2021 to 2022 to 2023 from many sources. We have volume increase because we expect to continue to win more new customers and increase share in incumbent accounts in the CSP space, because of the growth in the private wireless segment, because of cost of goods sold reduction as we continue to reduce product and services cost with SoCs designed for serviceability, digitalization of the service delivery. It comes from mix because we'll be more selective on low-margin deployment services business, comes from central cost of sales because we're making operational and quality improvements that help reduce fixed production overheads and other items like warranty, excess and obsolescence. And then of course OpEx because we will be reducing cost in support functions and administration in non-R&D OpEx. So this year is a tough starting point, and this is the objective and an honest and transparent plan that we have going forward. And of course beyond 2023 the ambition is to get to 10% or better operating margin.

Thank you, Sami. Let's go to Frederik Littell at Danske Bank for our next question.

Thank you very much, thanks for taking my question. Thanks for the interesting presentations from you all. Could I stay with Tommy for a second question here? You described the falling volumes in China on 4G and that you're not really participating to the same extent on 5G, and that was something that sort of happened during the course of 2020. What do you see are your possibilities to come back in China? If you want to come back in China, is there another situation now or is it so that that decision is complete for the long term? I felt that you alluded to in your presentation that you keep a foot in China because it's a very advanced market.

Yeah, thank you, Frederik. Good question. Let's first look at the starting point. Actually, we had never made a decision that we would not participate in 5G radio access in China. In fact, we did participate and we did win some market share in 5G with China Mobile and then the joint venture of China Telecom, even if of course much smaller market share than what we have had in 4G. So we have supplied our 2.5 GHz 5G to China Mobile and 3.5 GHz to CTC/CUC, both in macro and small cells including some important cities like Shanghai. But at the time of the central purchasing rounds, the first ones, we were still in the middle of the product turnaround, and we didn't really have fully competitive product for the Chinese customers' needs, especially in the art of bandwidth. And when you don't score well in the technical evaluation in China, then you have to give very significant discounts to secure share, which is why we decided to take very little share at the time. But that was back then.

Let's talk about today and the future. We are participating in the next central purchasing rounds of 5G in China with China Mobile, China Telecom, China Unicom, as well as China Broadcast Network, or CBN. Because like I said, China is a big market, there are important innovations there. Our product is more competitive after the last two years of turnaround and continues to improve through this year. Picking an example, the 700 MHz 5G product offered to CBN has actually to a good extent been developed by our R&D in Hangzhou and Nanjing. We are the first supplier who has completed the tests in 26 GHz millimeter wave with MIIT, the ministry. So we are trying to increase our share there. But this said, it is of course challenging to increase share in the latter central purchasing rounds when most of the market share has been awarded in the first central purchasing rounds. I hope I was able to add color and answer your question properly.

Absolutely, thank you very much. Very good answer, thank you.

Thank you, Frederik. And for our next question, let's move to Robert Sanders at Deutsche Bank.

Hi, thanks for taking my question. Just more questions for Tommy, I'm afraid. Could I just ask about the Verizon impact and a bit about margins? On the Verizon impact, is there a kind of residual services impact into next year from that contract? Is there any kind of residual nagging impact from services revenue falling away? And then on the margins by region, typically the US was the most profitable region but you've been highlighting more aggressive pricing. Presumably then the European margins are improving given Huawei's issues. Is that what you're seeing, a kind of equalization of margin by region, or even perhaps that European margins are now ahead of the US?

Alright, thank you. Actually there were three questions but I'm of course super happy to answer all three. So first, most of the impact of the headwind that we suffered in North America is already visible in the quarters of this year in 2021. So the impact is already fully or mostly visible, and going forward we will of course have very important business in North America with many carriers. So earlier this year we announced a five-year deal with T-Mobile USA in low bands and mid bands and millimeter wave, and today we announced an expansion deal with AT&T in the US including the very important C-band. And like I said, we can indeed offset some of the earlier mentioned headwind with the wins that we have scored in the rest of the world over the past two years. Now when you refer to the US pricing, the market has been more competitive during the last rounds of deal making than perhaps before, but we have been able to secure our share of the business and move ahead.

In terms of European margins, some of these new customers where we have won more increased market share, this has happened partly in Europe but it has also happened in other parts of the world like Japan, Australia, New Zealand, Canada for that matter. And according to Dell'Oro, for one, we have gotten to basically a tight number one position in Europe in 5G market share and grown our market share, and are now tied with Ericsson and Huawei in Europe. The market is of course very competitive.

Thank you, Robert. Next let's go to the line of Frank Mael from DNB.

Thanks for taking the question. A bit of a follow-up on the footprint in North America, but first I would like to just ask about your CSP market outlook, which seems perhaps a bit cautious in comparison to other market researchers such as Dell'Oro indicating that in 2020 there was pretty good momentum coming out, with 2021 showing some 4% growth. Looking forward to 2023, given the flatness you see in the CSP market, what are the headwinds you see there on the market level? And also with the AT&T contract in the pocket, I think Tommy alluded to the fact that you've been able to secure your share of the business. Could you confirm that you expect no further material footprint loss in North America? And finally, if I may, what do you see as the main swing factors driving the quite wide range of 10 to 13% at group level?

Alright, yeah, let's do so. So first, the market size — indeed what we have shown in this presentation as our estimate for the addressable market development for mobile networks, for the products and services, we estimate a 1% growth CAGR for the next couple of years. That's of course with the current FX rate. Dell'Oro for instance, they use constant currency and they report in USD, and that's a bit more than 2%. So there's a small difference there. If we think about the news from the US from last week and some of the announcements made there, we are still in the process of analyzing all of those. But it is important to note that Dell'Oro, which you refer to, they have also restated the market value for 2020 and opted significantly, which will then have an impact on the growth rate looking at 2021 and onwards. And then it's good to remember that the C-band deployment in the US will accelerate during the second half of the year because that spectrum becomes available only from the end of the year. And in terms of market share, indeed our product competitiveness has improved over the past two years, and that's why we believe that the risk of any further major market share loss or footprint loss has significantly reduced. When it comes to the swing factors in 10 to 13, of course market development is very important here, and also looking into different geographies, the product mix as well. It is important that as a technology company we have the product leadership, so that is definitely a factor here. But also if you think about the geographies, if you're present in high-margin markets where you have good margins, that mix is extremely important. There's a lot of different factors that are a little bit unknown yet when it comes to choosing between 10 and 13. Of course today's deal as well when it comes to AT&T, and what we have won already in the US, is very comforting as well. But still, there is some way to go to 2023.

I would say I fully agree with Marco, and then I would say that it actually boils down very much to one question, and that is what we in the release today called market development. Of course it means our top line development. Our guidance is that by 2023 we want to go faster than the market. But when you were listening to the business group presidents' presentation, I hope you actually could capture the optimism and enthusiasm there when they were describing their plans. When we are saying that we've got to grow faster than the market, of course that gives a lot of room to maneuver as to where we will finally land. We roughly understand where the OpEx will go, we start to have an understanding of where the gross margin will go, and then there is a pretty good leverage if the top line grows faster than we would have in the more conservative plans. So that would be the most visible thing between the 10 and 13 percent, the most important driver between the two extremes.

Thank you, that's very clear. Thank you so much for your question, Frank. For our next question, let's go to the line of Alex Paterk at SG.

Yes, hi, thanks for the question. I'll actually have two. The first one will be for Tommy, just on the phasing of the impact that you're going to see in the US. You have quite a painful impact there this year as we can see on the margins, so is that going to come through immediately from Q1, or how does it develop in terms of linearity over the year? When is the point of maximum pain here? And then a second one for Federico, if you zoom in on optics a little bit, do you see market share opportunities, market share gains opportunities? Some of your competitors are saying that Huawei is obviously losing share there as well due to security concerns. Do you see anything coming through there and why haven't you actually been able to capitalize on that up until now?

Alright, thank you. Yeah, indeed this headwind that we suffered in North America, that is something where the impact is immediately available and visible. Most of that impact is immediately affecting the quarters Q1, Q2, Q3, Q4 for this year.

Thank you, Alex. And now let's go to the line of Sandeep Deshpande from JPMorgan.

Yeah hi, thank you for letting me on. I have two quick questions. Firstly, in the mobile networks market for Tommy, I mean your product is more competitive today and you still have all that 4G footprint that you've lost in the US. So is there no possibility that the better product will allow you to keep some at least of that footprint in radio that you might lose? And my second quick question is regarding the IP market — in 2023 or 2024 you might lose some of the business associated with that Microsoft deal. So is there other business which is going to come through which will compensate that?

Alright, thank you, Sandeep. While I cannot speak on behalf of Verizon or share any details of any ongoing discussion that we may have with them, what I can say is that Verizon remains a strategically important customer to all of Nokia, including Mobile Networks, including my business group. Verizon has a lot of Nokia radio equipment in its network, you can see it with your bare eye. And we are working closely with Verizon to support them in their 5G network evolution. And now that our product competitiveness has improved and continues to improve, we will obviously keep looking for ways to do more business with Verizon.

Thank you, Sandeep. For our next question, let's move to Daniel Derberg at Handelsbanken.

Thank you so much for taking my question, gentlemen. And I think I have a question to Nishant that would be on the network as a service, i.e., the WaveFree. How fast, or do we have any timeline when we should expect this to start to materialize? And also, what do you see on the competitive side — do you see a big risk that you compete with your own customers in terms of the private network for enterprises?

Yeah sure. I think the key thing of winning in the enterprise space, because we operate in multiple verticals and we've got our dedicated sales teams and we build expertise of use cases that are necessary to solve in each one of those cases, and we combine that with technology to really build the value proposition. And that proposition is then taken through partners, as Federico talked about, through our CSP partners or directly or through industrial partners to bring the overall solution. The enterprise world is a very large domain, it requires a very large digital ecosystem of solutions that you need to bring together. And so you have to have a very flexible approach, but you do have to have deep segment knowledge about the problems that you're trying to solve for our customers. And so we are well placed in that in terms of being able to have a team that is dedicated to this space, working in conjunction with our partners to drive the joint value proposition forward.

Thank you so much, thank you Daniel. For our next question, let's move to the line of Richard Kramer from Arete.

Thanks very much. I have one for Jenni and one for Federico. Jenni, we know you've been sort of deep in the middle of some very contentious litigation in the auto space, and you've got some additional angles with Avanci. Can you help us size both the costs that you're currently facing and the overall pool or what you see as the addressable market for technologies' income from that autos market? And equally with brand licensing, I think it's fair to say that HMD has not been a huge success. Do you see brand licensing remaining a material component of technologies over time? And then for Federico, how are you planning to — how shall I say — sort of replace if possible the sort of driving forces...

Thank you, Richard. For our next question, let's go to Andrew Gardner from Barclays.

Thank you very much. Tommy in his presentation gave a term target for mobile networks, indicating that there was still some expansion to come beyond the 2023 timeframe. Speaking of 10 plus, I'm just wondering for Federico and Raghav in NI and Cloud and Network Services, the margins that you guys have set out for 2023 – is that almost an end point or a sustainable level? If not, what would your aspirational margin targets be beyond that timeframe? Thank you.

The one I can go first? Yeah, please. Okay, thanks, Federico. So first of all, we are only guiding to 2023, and as you can see on our operating margin walk, this consistently improves relative to each year on a very consistent basis. And so 2023 is not an end point for us. We are not guiding anything, but I very much expect to continue to grow healthy margins going beyond 2023. We will continue to look at market conditions and all of that, but at this point in time, our guidance is still 2023, but we are confident that we'll continue that journey after that.

And if I just before we take the next question, I would just like to confirm this from group point of view. For example, if we take Federico's business, as we have said earlier and as many of you know, the IP routing business is already well into double digits, optical network has been low but it's now clearly improving, fixed networks has some pretty attractive trajectories going on as well as also submarine networks, and you heard what Tommy said about his ambition. And when you then see what some of these cloud players have been able to achieve through various types of as-a-service business models, you will understand that Raghav's ambition will not stop at the 2023 either on the group level. From 21 to 23, the corridor that we are given increases by in a way average one and a half percentage point per year. I think that is a pretty good trajectory. It's too early today to comment anything that will happen after 2023, but as you can see, we have no intention to stop there.

Thank you very much. Thank you, Andrew. For our next question, let's go to Peter Kurt Nielsen from ABG.

Hi, Peter, please go ahead. Hi, Peter Kurt. Oh, did we lose Peter Kurt? I'm on here, sorry. Sorry, Matt, there was an issue here. A question related to enterprises, please. Judging from your comment, confident comments on your position in enterprises, it sounds like you believe you have the necessary skills in-house. Is that correct? Or would you anticipate needing to make some bolt-on acquisitions in order to strengthen your position in the enterprise area? And if I can just follow up on the private wireless outlook for Tommy, I guess. Please, you talked about the two sales models, the direct one and the one via CSPs. Is there any material difference in profitability for Nokia in these two sales channels, respectively? Please. Thank you.

Yeah, maybe I'll take the first question. Right up front, so first of all, I think we, as I talked about it earlier, we are building with our dedicated sales organization and domain experts. We are building clear vertical expertise on what our customers are looking for in the areas of industrial automation, which are very specific to a vertical. But there are many use cases. We'll bring some use cases, the customer will develop some use cases, and there will be use cases that will come from the broader ecosystem. To say that we have all the expertise, that's not a fair comment, but do we have the right expertise to bolt on to the technology leadership we have in the private wireless and other aspects of enterprise? That is absolutely something that we are very proud of. It is actually a unique differentiator of what we bring to the market. And with respect to M&A, obviously we can't comment on it. We'll continue to monitor those things through our strategy organization. We'll continue to monitor technology trends, and if we see that there's something interesting we need to do, then we'll make the appropriate decision at the time.

I'll take it and I'll add to it if you want. Okay. Yeah, so in this enterprise segment with the private wireless networks, we do expect the margins to be better over time than in the CSP segment as we gain scale. It is still a very small business, but it is growing, and this is based upon the leadership that we have in this segment with the products and solutions. We are able to drive better margin because there's more room to offer differentiated solutions. You see, it's like tapping to a different wallet in contrast to the traditional wireless services, which is really about basic connectivity and infotainment for consumers type of business. This is rather about driving industrial productivity, helping those industry verticals to automate their physical business processes, and that's where there's more room for differentiation. But I'll go back to you if you want to add.

Yeah, I think you've pretty much laid it out. I think we continue to see healthy margins when you look at private wireless, campus networks, wide area networks, and we continue to see good margins in this space. And these margins will only get better as we bring more industrial automation use cases as value addition over the private wireless network to really solve for very specific industrial automation use cases. And so that reinforces the value of the private wireless network to drive more value creation, and that's part of our enterprise strategy.

That's helpful, thank you. Thank you, Peter Kurt.

Great, thank you. I had a question around the Google relationship in particular, because it seems increasingly strategic. I guess first, from an operational standpoint, will you be shutting down all of your data centers or either owned or co-located and go completely into Google Cloud Platform? And what impact do you see that having on Capex going forward? What Google technologies will Nokia be adopting internally or embedding into your own products? And then secondly, what are those joint product or service initiatives that you're working on together, and how will those work in practice? Will you have go-to-market collaboration in edge computing or other areas? So any insight you can provide on that relationship would be appreciated. Thank you.

Thank you, thanks for the question. I think there's a two-part question here. One is the use of Google in our own environment, and I think maybe Nishant can better answer that one. But if you want, I can take the other part of the question first. I'd like to broaden the subject around much more the larger web scalers. We've been seeing Nokia has been working with many of the web scalers for a number of years where we've been hosting software applications on a strategy called any-cloud strategy, where our customers can choose to take our applications and put it on any cloud infrastructure. What this has really enabled is our customers to really participate and create value in the broader digital ecosystems, and they've really appreciated that. That's the openness that we have brought. The announcements that we've just made really extend our commitment, the clarification of our portfolio, and most recently, the announcements talk about extending this into Tommy's portfolio, clarifying the radio stack. This really will allow our customers to actually engage in a much bigger open ecosystem to drive 5G use cases, value creation, and monetization opportunities. So this relationship with the web scalers is very critical in terms of bringing value and being able to participate in creating value in the broader ecosystem. So with that, I'll pass it on to Nishant to talk about the second part of the question.

Yeah, happy to. I think just to complement one more thing, the traffic for a lot of enterprise use cases would run off the edge, and we are really thinking about what edge platform is best suited because we sit on a gold mine of workloads, and Google may play a part in that. So there's an aspect of that as well. Then there is the internal digitalization strategy, and to your question, we will not shut down all of our private data centers. It will be a balance. We want to make sure that applications that require from a security and privacy perspective, we will keep some on the private cloud and then migrate the rest to Google Cloud. Here, the strategy is twofold: we're looking at the applications as well as data center to data center migration. So we're looking at how we can shut down a few where the applications are non-core and we can move it to Google Cloud. Of course, here applications like enterprise resource planning would take much longer than some of the fringe applications, but we're well on our way on that migration as well.

Great, thanks. And the capex impact, it's all already factored in. So what you see in terms of guidance that we provided, we don't see anything above and beyond that. In terms of our IT capex, it's also factored in. And what Marco talked about, unless Marco you want to add some more there? No, what comes to capex in general, we have guided 1,700 million, so it's a little bit increased compared to 2020. We had just south of 500 million, but this body is quite small compared to the total capex. So the big increases that we have is actually coming from real estate, but also investments in capacity, especially in ASM, where we have an extremely good order book and order intake increase in 2020, so we have to increase the capacity in that entity.

Thanks, Marco. Thank you very much. Thank you, Stefan.

Now let's move to the line of Simon Leopold from Raymond James. Thanks for taking this question. I wanted to follow up on the concept of Open RAN and get your perspectives thinking out perhaps two to three years of how material do you see the market opportunity for Nokia in Open RAN. And I'd also like maybe for Federico to follow up in terms of how you might have some follow-through in optical and routing based on Open RAN opening up perhaps some new market opportunities, maybe with the hyperscalers for example, but broadly your take on Open RAN. Thank you.

Alright, I think this one comes to me. So thanks, Simon. It's too early to forecast exactly how big the Open RAN market will be, but for one, Dell'Oro is estimating that Open RAN would represent some 10% of the overall RAN market in 2024, 25, and a couple of years later. And we see Open RAN as an angle to take share. There are those 27 strong operators in the Open RAN Alliance today, and they will be requiring O-RAN compliance from their radio suppliers. If the suppliers are not O-RAN compliant, they risk losing share. And for us, being strong in Open RAN gives us the ability to then compete for more share. And then you have some operators out there who may need to adjust their supplier base, and Open RAN is a good mechanism for them to change that supplier base and increase supplier diversity. When that happens, obviously, that market share will be spread across, and then the question is who is O-RAN compliant, who is making that commitment to have O-RAN compliant products, which is really the future way of doing radio business. So for us, we can win radio business, we can win baseband, we can win both. Actually, we expect that even if some operators require O-RAN compliance in the contracts, they may actually be still buying RF and baseband from the same supplier for at least some time and have that option. We keep an eye on that because certainly, any hole that this might bring is still to be assessed, but could give us an opportunity. And also for fixed, by the way, and that's one of the reasons why we are bringing 25-gig PON, because eventually when the number of cell sites grow with millimeter wave, then you're going to need point-to-multipoint solutions as well in the front.

Thank you, and now thank you, Simon.

So our final question for today will come from Amit Harchandani from Citi. Please go ahead and, Amit, thank you.

Since I'm the last one, if you don't mind me asking two quick clarifications and a question, please. My first clarification is on the technologies business: why is the margin being guided at greater than 75% and not greater than 80%, given that it's been above 80% over the last three years? A second quick clarification with regards to mobile networks: are you factoring in the degree of pricing flexibility in order to offset your product, which is still being developed until it ends up becoming fully competitive? And for my main question, if I may, I've heard the word pivot being mentioned across different sessions, and you have in fact pivoted the whole organizational structure. Clearly, a lot needs to go right for you to hit some of your longer-term targets out to 2023. But if some of these pivots are not happening at a pace that you need, are you willing to undertake more drastic measures, including further restructuring, potentially divestitures? I guess, what's the degree of options on the table for you to hit the margin target for 2023, or is this the plan that you're working with and there are no further steps that you could take to get to the target? Thank you.

Yeah, I mean, I'm not sure if I understood your question properly, but if by factoring in pricing flexibility you mean whether we have had to sell our product at a discount because in 5G it hasn't been as competitive as we wanted, then the answer is not really. What I said about China is actually quite specific to China because of the mechanics of how the central purchasing rounds work: you have the technical ranking and then the commercial round, etc. So not really.

And then the question that you call the main question, of course now in this model, and you have seen the plan, now the business groups are highly empowered to execute, and they will control all the resources that they will need to execute this plan. But with that empowerment comes also a very high degree of accountability. We will not tolerate businesses with sub-scale performance, and in case there would be businesses within these groups that would not meet the targets, we would immediately assess our options. We will have a pretty high degree of performance management and accountability applied to all our businesses. And then, as the final comment, again from group strategy point of view, this is now the main plan with accountable business groups. You have heard the plans. On top of that, we will always keep our options open and engage in active portfolio management. That is not something that is the primary plan in our case, but you can be assured that in case this plan does not lead to results, there will be other options considered. And you will have seen actually in the restructuring announcement, 80 to 85, 5,000, there is a 5,000 gap. And of course, the better we succeed in this plan, the better the top line develops, the better the gross margin develops, the closer most likely we will be at the 5,000 reduction. That already shows that if this plan does not get executed well enough, we already now have a readiness to do more, and that's why we put the 10,000 number there as well.

Thank you all. Thank you, Amit, and thank you again to all of you for your questions today. This concludes our second Q&A session and our event for today. To wrap up our Capital Markets Day, I would now like to turn the call back over to Pekka for closing remarks.

Thank you, Matt, and hey, sincerely, thank you everyone for joining and asking all these highly relevant questions and playing your part in this day, which has been a big day for us. I fully understand if some of you in a way suffer from information overload, and in case you want to revisit anything that we said today, all these presentations will very soon be available on nokia.com. Before then, very quickly, I would like to recap the very key points. First, our four new commitments: we are a trusted partner for critical networks, we focus on technology leadership in each of our business groups, we capture the value shift to cloud and new business models, and we create value with long-term research and intellectual property. Those are the four key commitments. Then my point number two: the three-phase journey of reset, accelerate, and scale that you could see on the group level and then also in all business group presentations. This structure will help us to deliver on those commitments and return to sustainable profitable growth. In fact, the reset phase began on day one of my time as President and CEO. And then the key point number three: all our business groups and functions are contributing to this journey and address it in ways specific to them. And as you have seen, they are all accountable and once again highly empowered, and all are united by Nokia's new purpose and refreshed culture. As I said at the beginning, Nokia really is a great company. We have so much to be proud of, and the measures we have outlined today will help us build on that pride and create technology that helps the world act together for customers, for investors, and for our planet. Thank you.

I would like to remind everyone that during today's event, we have made forward-looking statements, including but not limited to our future performance and financial results. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees of performance. I encourage you to read Nokia's filings with the SEC for a discussion of the risks that can affect Nokia's business, operations, and performance. We are under no obligation and expressly disclaim any obligation to update, alter, or otherwise revise any forward-looking statements except as required by law. Thank you for joining us today.