Nokia 2011 Annual Report Download - page 137

The following table sets forth selective line items and the percentage of net sales that they represent
for Nokia Siemens Networks for the fiscal years 2010 and 2009.
Year Ended
December 31,
2010
Percentage of
Net Sales
Year Ended
December 31,
2009
Percentage of
Net Sales
Percentage
Increase/
(Decrease)
(EUR millions, except percentage data)
Net sales ..................... 12661 100.0% 12 574 100.0% 1%
Cost of Sales ................. (9266) (73.2)% (9 162) (72.9)% 1%
Gross profit ................... 3395 26.8% 3 412 27.1% (1)%
Research and development
expenses .................. (2156) (17.0)% (2 271) (18.1)% (5)%
Selling and marketing
expenses .................. (1328) (10.5)% (1 349) (10.7)% (2)%
Administrative and general
expenses .................. (553) (4.4)% (573) (4.6)% (4)%
Other income and expenses ..... (44) (0.3)% (858) (6.8)% (95)%
Operating profit ............... (686) (5.4)% (1 639) (13.0)% (58)%
Net Sales
The following table sets forth Nokia Siemens Networks net sales and year-on-year growth rate by
geographic area for the fiscal years 2010 and 2009.
Year Ended
December 31,
2010
Change
2009 to 2010
Year Ended
December 31,
2009
(EUR millions, except percentage data)
Europe ........................... 4628 (1)% 4 695
Middle East & Africa ................ 1451 (12)% 1 653
Greater China ...................... 1451 4% 1397
Asia-Pacific ........................ 2915 7% 2725
North America ..................... 735 (2)% 748
Latin America ...................... 1481 9% 1356
Total ............................. 12661 1% 12574
The 1% increase in net sales of Nokia Siemens Networks primarily reflected improved market
conditions in the second half of 2010 and growth in both the product and services business, largely
offset by challenging competitive factors, as well as industry-wide shortages of certain components and
security clearances issues in India preventing the completion of product sales to customers during the
second and third quarters of 2010. Of total Nokia Siemens Networks net sales, services contributed
EUR 5.8 billion in 2010, compared with EUR 5.7 billion in 2009.
Gross Margin
Nokia Siemens Networks gross profit decreased to EUR 3 395 million in 2010, compared with
EUR 3 412 million in 2009, with a gross margin of 26.8% (27.1% in 2009). The year-on-year decline in
gross margin was primarily due to general price pressure on certain products, a higher proportion of
lower margin products in the business mix and shortages of certain components during the second and
third quarters of 2010, offset to some extent by progress on product cost reductions and a more
favorable regional mix compared to 2009.
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