Nokia Capital Markets Day 2021, Federico Guillén

Hello everyone, it's a pleasure to speak with you today, even though we cannot meet in person. I'd like to introduce Nokia's new Network Infrastructure business group. As the saying goes, if you want to go fast, go alone; if you want to go far, go together. Nokia is able to do both by bringing together four complementary divisions that share best practices and collaborate on technology and operations while maintaining a specialized, customer-centric approach. We strive to be the world's most trusted systems partner for the world's most critical networks, supporting consumers, enterprises, and web scalars, and enabling the new wave of industrial digitalization. In 2020, the divisions that now make up Network Infrastructure delivered revenue of about 7 billion euros with a 7% operating profit. But we intend to leverage our technology leadership, scale, and customer focus to exceed that performance. We are a global leader in service provider routing, optical transport, next-generation fiber, and turnkey submarine cable solutions. 99 of the top 100 telecom operators, 7 of the top 8 cloud providers, and over 1,500 enterprises rely on us. We see growth opportunities through cross-selling, market share increase, and new customer acquisition outside the CSP market. Our IP Networks division reported 2.8 billion euros in revenue in 2020, optical networks 1.7 billion, fixed networks 1.8 billion, and submarine networks is the market leader in its field. Industry dynamics driving growth include 5G, enterprise digital transformation, pandemic-driven demand for connectivity, and Industry 4.0. We expect our addressable market (excluding submarine and data center networks) to grow from 42.3 billion in 2020 to 45.1 billion by 2023. Our strategy has three pillars: first, intense portfolio innovation across all divisions; second, focus on service provider customers with core technologies like custom routing, optical, and silicon; third, increase business with non-CSP customers by leveraging our technologies into verticals like utilities, transportation, and mining. Examples include networks for air traffic control, power grids, and oil and gas. We are also investing in webscale and cloud builder solutions. In IP Networks, we continue innovation with our in-house FP4 silicon and network automation. In Optical Networks, we will drive growth with next-generation DSPs, silicon photonics, and photonic switching. Fixed Networks is number one in 10G and first with 25G PON; we target increased technology leadership with in-house silicon and optical modules. Submarine Networks capitalizes on strong market demand, updating our fleet and converting a strong backlog. We also see opportunities in data center switching, 5G fixed wireless access, new fiber builders, and open/disaggregated architectures. We will adjust our sales model and geopolitics are considered. Financially, we target net sales growth substantially above the market's 2% CAGR, with R&D investment and flat operating expenses as a percentage of sales. We expect operating profit in the range of 9% to 12% by 2023, making Network Infrastructure a strong profit driver for Nokia.