TABLE OF CONTENTS

S. No TITLE PAGE NO

1. LETTER FROM THE CEO OR CHAIRMAN

2. FINANCIAL HIGHLIGHTS

3. MANAGEMENT’S DISCUSSION AND

ANALYSIS (MD & A)

4. AUDITOR’S REPORT

5. FINANCIAL STATEMENT

6. NOTES TO FINANCIAL STATEMENTS

7. CORPORATE GOVERNANCE

8. BUSINESS OVERVIEW

9. RISK FACTORS

10. SUSTAINABILITY AND CORPORATE SOCIAL

RESPONSIBILITY

11. SHAREHOLDER INFORMATION

12. LETTERS TO SHAREHOLDERS

13. GLOSSARY OF TERMS

LETTER FROM THE CEO OR CHAIRMAN

We said at the start of 2022 that it would be a year of acceleration, and

I am pleased that we delivered what we promised. The Nokia team did a great
job navigating geopolitical, economic and supply challenges, successfully
executed our strategy and delivered a strong full-year performance. As a result,
we achieved another year of solid growth while maintaining good profitability.
The reset we completed in 2021 meant we began the year on a much stronger
footing for the second phase of our three-part plan to reset, accelerate and scale
our business with the aim of ensuring sustainable, profitable growth. The focus
on strengthening our technology leadership and increasing our competitiveness
helped us gain market share in many areas including new customer wins in
rapidly growing markets like India.
One of our strategic priorities for 2022, and beyond, was to broaden
our customer base and grow in Enterprise. I was delighted that we delivered on
this aspiration with strong Enterprise net sales growth. Importantly we also
achieved significant webscale customer wins and momentum continues to build
in private wireless, where we had more than 560 customers at the end of 2022.
Our technology leadership was evident in many other areas, including IP
Networks, where we started to deploy 800 Gigabit Ethernet (800GE) routing to
give operators more capacity and greater energy efficiency. We also launched
Nokia Lightspan MF-14, the world’s most advanced fiber platform, and carried
out the first 100G passive optical network (PON) broadband demonstration in
the US. Together with our partners, we set new records in 5G carrier
aggregation and launched the world’s first commercial 5G standalone network
with network slicing for Fixed Wireless Access services. We also launched the
first complete 5G core solution in the Software-as-a-Service (SaaS) delivery
model.
Nokia continued to invest in research and development and to ensure
our technology leadership for the future. Construction work got underway on a
new campus in Oulu, Finland, encompassing new facilities for R&D,
manufacturing and office space, and we announced an ambitious redevelopment
of our Ottawa campus, in Canada, to create a center of excellence for 5G,
cybersecurity, AI and machine learning research. This year was not without its
challenges. Nokia strongly condemned the Russian invasion of Ukraine, and I
am proud of our Ukrainian employees, who are bravely helping maintain
customer networks and provide critical connectivity. It became clear in the early
days of the invasion that our continued presence in Russia would no longer be
possible, so we took the decision to exit the Russian market.

Progress across our business groups

All four of our empowered and accountable business groups showed
signs of acceleration this year, helping Nokia take another step towards our
long-term target of growing faster than the market with a comparable operating
margin of at least 14%(1). Network Infrastructure had another year of strong
growth, with all four of its business divisions contributing, and significant
operating margin expansion. Clear technology leadership across the portfolio
and continued strong demand for fiber were the biggest drivers. We have now
reached more than 100 customers for PSE-V, our advanced coherent optical
solution, and more than 30 customers for our FP5 chipset. Mobile Networks
delivered on its ambition to return to growth in 2022 and improved profitability
over the full year, driven by increased portfolio competitiveness and strong
demand. We continued to win new 5G business and our ReefShark system-on-
chip portfolio accounted for 97% of shipments by the end of the year, hitting the
target of around 100%.
FINANCIAL HIGHLIGHTS

MANAGEMENT’S DISCUSSION AND ANALYSIS

Our business divisions are: Fixed Networks, IP Networks, Optical

Networks and Submarine Networks. Fixed Networks offers fiber and copper-
based access infrastructure, Wi-Fi in-home solutions, the cloud and
virtualization. In 2022, we continued to advance our leading position in passive
optical networks (PON)2). We were first-to-market with a 25G PON solution
and have shown up to 100G PON proofs of concept with customers in Europe
and the USA. We continue to innovate around solutions that will allow our
customers to lead today, while protecting their investments for the future. Our
Lightspan MF-14 product, launched in Q4, is the world’s first generation 6
broadband platform, enabling the convergence of all services on a single fiber
infrastructure. This solution has already been selected by customers building
25G capable networks in Europe, North America and Asia Pacific. We have
reinforced our market leadership(3) in 5G Fixed Wireless Access with the
world’s first large-scale, long-reach 5G Wave deployment for Australia’s
National Broadcaster nbn.
IP Networks is a global leader in IP access, aggregation, and edge and core
routing for residential, business, mobile, cloud and digital industry applications.
Our ability to offer high-performance and massively scalable networks is
enabled though our industry-leading, in-house designed FP5 routing silicon and
FP5-based routing platforms. Combined with our network automation and
security platforms, we further enable customers to efficiently control, manage,
analyze and secure their IP networks. We are actively driving the next
generation in IP routing – 800 Gigabit Ethernet – which we have trialed with
customers including BT, DE-CIX and LINX. Our software-defined WAN
solutions bring easy, efficient network connectivity configuration among clouds
and to any enterprise branch. Our next-generation data center fabric makes
cloud environments easier to scale, adapt and operate.Optical Networks is a
leader in optical transport networks for metro, regional, long-haul and ultra-
long-haul applications. Our approach helps communications service providers
address the massive growth in bandwidth demand, while simplifying network
operations through software tools and automation. This enables a more
streamlined service delivery and a lower total cost of ownership. The portfolio
includes coherent optical transponders, optical transport network switching,
wavelength-division multiplexing, reconfigurable optical add-drop multiplexer
solutions and optical line systems. Our successful rollout of our fifth generation
of coherent optical technology, based on our in-house designed PSE-V digital
signal processor, highlights our focus on and commitment to technology
innovation.Submarine Networks continues to be a leader in the growing
undersea telecoms networks segment and saw continued growth in demand in
2022, led by hyperscalers and driven by factors ranging from increased cloud
computing to virtual reality, as well as by the need to bring the advantages of
connectivity to previously underserved parts of the world. Our technology
innovation and customer focus helped take Submarine Networks above EUR 1
billion in sales this year, a first for this business division.
Competition
Our competitors include Huawei and ZTE, along with Calix and Adtran (Fixed
Networks), Cisco and Juniper (IP Networks), Ciena and Infinera (Optical
Networks), and Subcom and NEC (Submarine Networks).
AUDITOR’S REPORT
To the Annual General Meeting of Nokia Corporation
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Nokia Corporation (business
identity code 0112038-9) for the year ended 31 December 2022. The financial
statements comprise the consolidated balance sheet, income statement,
statement of comprehensive income, statement of cash flows, statement of
changes in shareholders’ equity and notes, including a summary of significant
accounting policies, as well as the parent company’s balance sheet, income
statement, statement of cash flows and notes.
In our opinion
■ the consolidated financial statements give a true and fair view of the group’s
financial position, financial performance and cash flows in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU.
■ the financial statements give a true and fair view of the parent company’s
financial performance and financial position in accordance with the laws and
regulations governing the preparation of financial statements in Finland and
comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit
Committee.
FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
1. Corporate information
Nokia Corporation, a public limited liability company incorporated and
domiciled in Helsinki, Finland, is the parent company (Parent Company or
Parent) for all its subsidiaries (Nokia or the Group). Nokia is a global provider
of mobile, fixed and cloud network solutions combining hardware, software and
services, as well as licensing of intellectual property, including patents,
technologies and the Nokia brand. Nokia’s operational headquarters are located
in Espoo, Finland. The shares of Nokia Corporation are listed on the Nasdaq
Helsinki Stock Exchange, the New York Stock Exchange and the Euronext Paris
Stock Exchange. These consolidated financial statements for the year ended
31 December 2022 were authorized for issuance and filing by the Board of
Directors on 2 March 2023.

2. Significant accounting policies

Basis of presentation and statement of compliance The consolidated financial
statements are prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board
(IASB) and as adopted by the European Union (EU). The consolidated financial
statements are presented in millions of euros (EURm), except as otherwise
noted, and are prepared under the historical cost convention, except as disclosed
in the accounting policies below. The consolidated financial statements also
conform to the Finnish accounting and company legislation.

3. New and amended standards and interpretations

On 1 January 2022, Nokia adopted the following amendments to the accounting
standards issued by the IASB and endorsed by the EU:
■ Amendments to IFRS 3 Business Combinations: Reference to the Conceptual
Framework,
■ Amendments to IAS 16 Property, Plant and Equipment: Proceeds before
Intended Use,
■ Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent
Assets: Onerous Contracts — Cost of Fulfilling a Contract, and
■ Amendments included in the Annual Improvements to IFRS Accounting
Standards 2018-2020 Cycle. The amendments had no material impact on
Nokia’s consolidated financial statements.Nokia has not early adopted any new
or amended standards or interpretations that have been issued but are not yet
effective. The new and amended standards and interpretations issued by the
IASB that are effective in future periods are not expected to have a material
impact on the consolidated financial statements of Nokia when adopted. Nokia
intends to adopt these new and amended standards and interpretations, if
applicable, when they become effective and are endorsed by the EU.

4. Use of estimates and critical accounting judgments

The preparation of financial statements requires use of management judgment in
selecting and applying accounting policies as well as making estimates and
assumptions about the future. These judgments, estimates and assumptions may
have a significant effect on the amounts recognized in the financial statements.
The estimates and assumptions used in determining the carrying amounts of
assets and liabilities are based on historical experience, expected outcomes and
various other factors that were available when these consolidated financial
statements were prepared, and they are believed to be reasonable under the
circumstances. The estimates and assumptions are reviewed continually and
revised if changes in circumstances occur, or as a result of new information or
more experience. As estimates and assumptions inherently contain a varying
degree of uncertainty, actual outcomes may differ resulting in adjustments to the
carrying amounts of assets and liabilities in the subsequent periods.

CORPORATE GOVERNANCE
This corporate governance statement is prepared in accordance with Chapter 7,
Section 7 of the Finnish Securities Markets Act (2012/746, as amended) and the
Finnish Corporate Governance Code 2020 (the “Finnish Corporate Governance
Code”). Regulatory framework Our corporate governance practices comply
with Finish laws and regulations, our Articles of Association approved by the
shareholders and corporate governance guidelines (“Corporate Governance
Guidelines”) adopted by the Board of Directors. The Corporate Governance
Guidelines reflect our commitment to good corporate governance. They include
the directors’ responsibilities, the composition and election of the members of
the Board and its Committees, and certain other matters relating to corporate
governance. We also comply with the Finnish Corporate Governance Code
adopted by the Securities Market Association.
In addition, we comply with the rules and recommendations of Nasdaq Helsinki
and Euronext Paris as applicable to us due to the listing of our shares on the
exchanges. Furthermore, as a result of the listing of our American Depositary
Shares on the New York Stock Exchange (NYSE) and our registration under the
US Securities Exchange Act of 1934, we follow the applicable U.S. federal
securities laws and regulations, including the Sarbanes-Oxley Act of 2002 as
well as the rules of the NYSE, in particular the corporate governance standards
under Section 303A of the NYSE Listed Company Manual. We comply with
these standards to the extent such provisions are applicable to us as a foreign
private issuer.
Main corporate governance bodies of Nokia
Pursuant to the provisions of the Finnish Limited Liability Companies Act
(2006/624, as amended) (the “Finnish Companies Act”), the legislation under
which Nokia operates, and Nokia’s Articles of Association, the control and
management of Nokia are divided among shareholders at a general meeting of
shareholders, the Board, the President and CEO and the Group Leadership
Team, chaired by the President and CEO. General Meeting of Shareholders
Nokia’s shareholders play a key role in corporate governance, with our Annual
General Meeting offering a regular opportunity to exercise their decision-
making power in Nokia. In addition, at the meeting the shareholders may
exercise their right to speak and ask questions.
Each Nokia share entitles a shareholder to one vote at general meetings of
Nokia. The Annual General Meeting decides, among other things, on the
election and remuneration of the Board, the adoption of annual accounts, the
distribution of retained earnings shown on the balance sheet, discharging the
members of the Board and the President and CEO from liability, as well as on
the election and fees of the external auditor. As of the Annual General Meeting
2020, the Remuneration Policy is presented to the general meeting at least every
four years and the Remuneration Report annually as of 2021. Resolutions of the
general meeting regarding the policy and the report are advisory.
In addition to the Annual General Meeting, an Extraordinary General
Meeting may be convened when the Board considers such a meeting to be
necessary, or when the provisions of the Finnish Companies Act mandate that
such a meeting must be held.

BUSINESS OVERVIEW
The Nokia platform guides everything we do across our global organization. Its
three elements shape our ambition, our strategy and our culture.
Our purpose
At Nokia, we create technology that helps the world act together. While our
lives may be getting longer, healthier and richer, the world is facing
fundamental challenges: Productivity is stalling, pressure on the planet is
increasing and access to opportunity remains stubbornly unequal.
Digitalization is central to the solution.
We see the potential of digital to transform business, industry and society. When
the world’s organizations, machines and devices are in sync with each other and
the people they serve, a new capability unfolds to create a more productive,
sustainable and accessible future.
Our commitment
We are delivering the next evolution in critical networking through technology
leadership and trusted partnerships. We are meeting the new demands placed on
networks through the next evolution of networking where networks meet cloud
with ‘networks that sense, think and act’. These networks go beyond connecting
people and things, bits and bytes. They’re adaptable, autonomous, and
consumable. They’re alive with intelligence and enable people, machines and
devices to interact in real time, like never before.Critically, ‘networks that sense,
think and act’ are creating new opportunities for our customers and partners,
both existing and new, to access and harness the full power of networking like
never before. How?
■ By ‘sensing’ and understanding human and machine parameters using next
generation mobile and optical technologies
■ By ‘thinking’ of actions before a fault occurs in the network or in an
enterprise using next generation analytics and AI
■ By ‘acting’ to connect humans and machines alike by enabling wide area or
local area networks.
Essentials
Our essentials highlight the culture we are creating for our people, customers
and partners. As we seek to realize the full potential of digital in every industry,
acting as a collaborative partner to our customers and pioneering the next
evolution of networks, we are creating the culture needed to drive the future
growth of Nokia.
■ Open – in mindset, to opportunity, through/with transparency
■ Fearless – bringing authenticity, sharing ideas and opinions,
embracing collaboration
■ Empowered – to make decisions, to act with clear accountability.

RISK FACTORS
Sustainability related risks and opportunities are part of our Enterprise
Risk Management framework. We recognize and aim to mitigate the potential
risks and negative impacts associated with our business whether related to
technology, supply chain, climate or people, while also driving the opportunities
within and beyond our business to contribute to achieving the UN Sustainable
Development Goals. We have clear policies and processes for each identified
material sustainability related risk, including our Code of Conduct which
reflects our values through clear and simple directions on ways of working for
all employees and business partners. The main features of our risk management
systems are described as part of our Corporate governance statement (see
Corporate Governance – Risk management, internal control and internal audit
functions at Nokia). In addition, the “Risk factors” section of this report
provides discussion on the most important risk factors affecting our operations.
These risks include sustainability-related issues such as:
■ product safety
■ environmental incidents
■ health & safety
■ privacy and security, including cybersecurity threats
■ potential human rights abuse through misuse of the technology we provide
■ potential lack of proper respect for human rights, fair labor conditions, the
environment and communities in our operations and supply chains
■ non-compliance with regulations or our supplier and customer requirements
■ violation of ethical standards, including our Code of Conduct
■ labor unrest and strikes
■ inability to retain, motivate, develop and recruit appropriately skilled
employees
■ purchasing boycotts and public harm to our brand
■ issues with tariffs and taxation, including tax disputes
■ disruptions in our manufacturing, service creation, delivery, logistics or
supply chain caused, for instance, by natural disasters, military actions, civil
unrest, public health and safety threats (including disease outbreaks), many of
which may be fueled by the adverse effects resulting from climate change

SUSTAINABILITY AND CORPORATE SOCIAL

RESPONSIBILITY
Our products, solutions and services can drive social,
environmental, and economic progress. Digitalization and
connectivity can have a critical role in solving some of the
world’s greatest challenges including stalled productivity,
climate change and unequal access to opportunity. Our
products and solutions bring digitalization to physical
industries and cities, helping them decarbonize and increase
efficiency, productivity, and safety. We support the energy
industry in transitioning to a renewable, smart grid future.
Digitalization and connectivity are essential to a more
equitable, secure society, providing improved access to
healthcare, education and greater potential economic
opportunity. They can also play a key role in achieving a
cleaner, safer planet with reduced carbon emissions and more
efficient use and reuse of natural resources. We work to
maximize this positive impact of our technology – our
handprint.
At the same time, we understand our responsibility to
constantly minimize potential negative impacts of our
operations, environmental or social, striving for continuous
improvement in product design and responsible business
practices employed in Nokia and across our value chain. This
is our footprint. We have built robust policies, processes and
management systems that align with globally recognized
frameworks. Our business model is described in the “Business
overview” section of this report.
Our sustainability approach aligns with the topics that are
most material to our business and where we have the most
impact on sustainable development, providing structure and
focus for our activities. At the core of our strategy and
approach is our purpose, to create the technology that helps
the world act together.

SHAREHOLDER INFORMATION
LETTERS TO SHAREHOLDERS
The dividend to shareholders is Nokia’s principal
method of distributing earnings to shareholders. The dividend
policy was updated at the Capital Markets Day in March 2021
to be “We target recurring, stable and over time growing
ordinary dividend payments, taking into account the previous
year’s earnings as well as the company’s financial position
and business outlook” The Board of Directors proposes to the
Annual General Meeting 2023 that no dividend is distributed
by a resolution of the Annual General Meeting for the
financial year ended on 31 December 2022. Instead, the Board
proposes to the Annual General Meeting to be authorized to
decide, in its discretion, on the distribution of an aggregate
maximum of EUR 0.12 per share as dividend from the
retained earnings and/or as assets from the reserve for
invested unrestricted equity. The authorization would be used
to distribute dividend and/or assets from the reserve for
invested unrestricted equity in four installments during the
authorization period, in connection with the quarterly results,
unless the Board of Directors decides otherwise for a justified
reason. The proposed total authorization for distribution of
dividend and/or assets from the reserve for invested
unrestricted equity is in line with the Company’s dividend
policy. The authorization would be valid until the opening of
the next Annual General Meeting. The Board would make
separate resolutions on the amount and timing of each
distribution of dividend and/or assets from the reserve for
invested unrestricted equity.
In 2020 and 2021, Nokia generated strong cash flow
which has significantly improved the cash position of the
company. To manage the company’s capital structure, Nokia’s
Board of Directors initiated a share buyback program under
the authorizations from the Annual General Meetings 2021
and 2022 to repurchase shares to return up to EUR 600
million of cash to shareholders in tranches over a period of
two years. The first phase of the share buyback program with
a maximum aggregate purchase price of EUR 300 million
started in February 2022 and ended in November 2022. The
second EUR 300 million phase of the share buyback program
started in January 2023 and it will end at the latest by 21
December 2023.

GLOSSARY

Discontinued operations: The continuing financial effects of

the here business and the Devices & Services business. Here
was divested to an automotive consortium and substantially
all of the Devices & Services business was sold to Microsoft.
Ecosystem: An industry term to describe the increasingly
large communities of mutually beneficial partnerships that
participants such as hardware manufacturers, software
providers, developers, publishers, entertainment providers,
advertisers and ecommerce specialists form in order to bring
their offerings to market. At the heart of the major ecosystems
in the mobile devices and related services industry is the
operating system and the development platform upon which
services are built.
Enterprise verticals: One of Nokia’s customer segments. An
enterprise vertical represents a grouping of companies by an
industry (like energy or transportation) that offers products
and services that meet specific needs of that industry. Within
the enterprise verticals segments, we primarily focus on
transportation, energy, manufacturing, logistics and the public
sector.
ETSI (European Telecommunications Standards
Institute): Standards produced by the ETSI contain technical
specifications laying down the characteristics required for a
telecommunications product. Fixed Wireless Access (FWA):
Uses wireless networks to connect fixed locations such as
homes and businesses with broadband services.