Nokia Annual Report on Form 20-F 2025

2	Annual Report

As filed with the Securities and Exchange Commission on 5 March 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended 31 December 2025

Commission file number 1-13202

Nokia Corporation

(Exact name of Registrant as specified in its charter)

Republic of Finland

(Jurisdiction of incorporation)

Karakaari 7 FI-02610 Espoo, Finland

(Address of principal executive offices)

Johanna Mandelin, VP, Corporate Legal, Telephone: +358 (0) 104 488 000, Facsimile: +358 (0) 104 481 002,

Karakaari 7, FI-02610 Espoo, Finland

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”):

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares	NOK	New York Stock Exchange
Shares		New York Stock Exchange(1)

(1)Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Exchange Act: None

Indicate the number of outstanding shares of each of the registrant’s classes of capital or common stock as of the close of the period covered by the annual report. Shares: 5 742 239 696.

3	Annual Report
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	Yes ☒	No ☐
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If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.	Yes ☐	No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for<br><br>such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	Yes ☒	No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T<br><br>(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).	Yes ☒	No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth<br><br>company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or “emerging growth company” in Rule 12b-2 of the Exchange Act.<br><br>(Check one):				Large accelerated filer ☒	Accelerated filer ☐
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Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐			Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting<br><br>under Section 404(b) of the Sarbanes Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.	☒
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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of<br><br>an error to previously issued financial statements.	☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s<br><br>executive officers during the relevant recovery period pursuant to §240.10D-1(b).	☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:			U.S. GAAP ☐
---
International Financial Reporting Standards as issued by the International Accounting Standards Board ☒
Other ☐		If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.	Item 17 ☐	Item 18 ☐
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If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).	Yes ☐	No ☒
4	Annual Report
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Cross-reference table to Form 20-F

Form 20-F<br><br>Item Number		Form 20-F Heading	Section in Document
ITEM	1	IDENTITY OF DIRECTORS, SENIOR<br><br>MANAGEMENT AND ADVISERS	N/A
ITEM	2	OFFER STATISTICS AND EXPECTED<br><br>TIMETABLE	N/A
ITEM	3	KEY INFORMATION
	3A	[Reserved]
	3B	Capitalization and Indebtedness	N/A
	3C	Reasons for the Offer and Use of Proceeds	N/A
	3D	Risk Factors	Operating and financial review and prospects—Risk factors
ITEM	4	INFORMATION ON THE COMPANY
	4A	History and Development of the Company	Cover page; Business overview; Introduction and use of certain terms; Business<br><br>overview—Nokia in 2025—Our 2025 highlights; Operating and financial review and<br><br>prospects—Operating and financial review—Liquidity and capital resources; Operating<br><br>and financial review and prospects—Shares and shareholders—Share details—Shares<br><br>and share capital; General facts on Nokia—Alternative performance measures;<br><br>Operating and financial review and prospects—Significant subsequent events;<br><br>Financial statements—Notes to the consolidated financial statements—Note 6.2.<br><br>Acquisitions; Other information—Investor information
	4B	Business Overview	Business overview—Nokia in 2025; Business overview—Strategy; Business overview—<br><br>Customers and partners; Operating and financial review and prospects—Operating<br><br>and financial review—Results of segments; Operating and financial review and<br><br>prospects—Risk Factors; Financial statements—Notes to the consolidated financial<br><br>statements—Note 1.1. Corporate information; Financial statements—Notes to the<br><br>consolidated financial statements—Note 2.2. Segment information; Financial<br><br>statements—Notes to the consolidated financial statements—Note 2.6. Discontinued<br><br>operations; General facts on Nokia—Government regulation
	4C	Organizational Structure	Business overview—Nokia in 2025; Financial statements—Notes to the consolidated<br><br>financial statements—Note 1.1. Corporate information; Financial statements—<br><br>Notes to the consolidated financial statements—Note 2.2. Segment information;<br><br>Financial statements—Notes to the consolidated financial statements—Note 2.6.<br><br>Discontinued operations; Financial statements—Notes to the consolidated financial<br><br>statements—Note 6.3. Principal Group companies
	4D	Property, Plants and Equipment	Financial statements—Notes to the consolidated financial statements—Note 4.2.<br><br>Property, plant and equipment; Financial statements—Notes to the consolidated<br><br>financial statements—Note 4.3. Leases; Business overview—Customers and partners<br><br>—Our supply chain
	4A	UNRESOLVED STAFF COMMENTS	None
ITEM	5	OPERATING AND FINANCIAL REVIEW AND<br><br>PROSPECTS
	5A	Operating Results	Business overview—Strategy; General facts on Nokia—Government regulation;<br><br>Financial statements—Notes to the consolidated financial statements—Section 2.<br><br>Results for the year; Financial statements—Notes to the consolidated financial<br><br>statements—Note 5.4. Financial risk management; Operating and financial review and<br><br>prospects—Operating and financial review	Form 20-F<br><br>Item Number	Form 20-F Heading	Section in Document
---	---	---	---
	5B	Liquidity and Capital Resources	Operating and financial review and prospects—Operating and financial review—<br><br>Liquidity and capital resources; Financial statements—Notes to the consolidated<br><br>financial statements—Note 5.2. Financial assets and liabilities; Financial statements—<br><br>Notes to the consolidated financial statements—Note 5.3. Derivative assets and<br><br>liabilities; Financial statements—Notes to the consolidated financial statements—<br><br>Note 6.1. Commitments, contingencies and legal proceedings; Financial statements—<br><br>Notes to the consolidated financial statements—Note 5.4. Financial risk management
	5C	Research and Development, Patents and<br><br>Licenses etc.	Business overview—Strategy; Business overview—Nokia in 2025—Our operating<br><br>model in 2025—Nokia Technologies; Operating and financial review and prospects—<br><br>Operating and financial review—Results of operations; Operating and financial review<br><br>and prospects—Operating and financial review—Results of segments
	5D	Trend Information	Business overview—Nokia in 2025; Business overview—Strategy
	5E	Critical Accounting Estimates	N/A
ITEM	6	DIRECTORS, SENIOR MANAGEMENT AND<br><br>EMPLOYEES
	6A	Directors and senior management	Corporate governance—Corporate governance Statement
	6B	Compensation	Corporate governance—Remuneration; Financial statements—Notes to the<br><br>consolidated financial statements—Note 6.4. Related party transactions; Financial<br><br>Statements—Notes to the consolidated financial statements—Note 3.2.<br><br>Remuneration of key management; Financial statements—Notes to the consolidated<br><br>financial statements—Note 3.3. Share-based payments
	6C	Board Practices	Corporate governance—Corporate governance statement; Corporate governance—<br><br>Remuneration—Remuneration governance
	6D	Employees	Business overview—Nokia in 2025; Operating and financial review and prospects—<br><br>Operating and financial review—Results of operations—Cost savings program;<br><br>Financial statements—Notes to the consolidated financial statements— Note 3.1.<br><br>Summary of personnel expenses
	6E	Share Ownership	Corporate governance—Remuneration—Remuneration Report 2025; Corporate<br><br>governance—Corporate governance statement; Financial statements—Notes to the<br><br>consolidated financial statements—Note 3.3. Share-based payments
	6F	Disclosure of a registrant’s action to<br><br>recover erroneously awarded<br><br>compensation	N/A
ITEM	7	MAJOR SHAREHOLDERS AND RELATED<br><br>PARTY TRANSACTIONS
	7A	Major Shareholders	Operating and financial review and prospects—Shares and shareholders
	7B	Related Party Transactions	Financial statements—Notes to the consolidated financial statements—Note 6.4.<br><br>Related party transactions
	7C	Interests of Experts and Counsel	N/A
ITEM	8	FINANCIAL INFORMATION
	8A	Consolidated Statements and Other<br><br>Financial Information	Financial statements; Reports of independent registered public accounting firm;<br><br>Operating and financial review and prospects—Shares and shareholders—Share<br><br>details—Dividend and share buybacks; Financial statements—Notes to the<br><br>consolidated financial statements—Note 6.1. Commitments, contingencies and legal<br><br>proceedings
5	Annual Report
---	---
Form 20-F<br><br>Item Number		Form 20-F Heading	Section in Document
---	---	---	---
	8B	Significant Changes	Operating and financial review and prospects—Significant subsequent events;<br><br>Financial statements—Notes to the consolidated financial statements—Note 6.5.<br><br>Subsequent events
ITEM	9	THE OFFER AND LISTING
	9A	Offer and Listing Details	Operating and financial review and prospects—Shares and shareholders; Financial<br><br>statements—Notes to the consolidated financial statements—Note 1.1. Corporate<br><br>information; Other information—Investor information—Stock exchanges
	9B	Plan of Distribution	N/A
	9C	Markets	Operating and financial review and prospects—Shares and shareholders; Financial<br><br>statements—Notes to the consolidated financial statements—Note 1.1. Corporate<br><br>information; Other information—Investor information—Stock exchanges
	9D	Selling Shareholders	N/A
	9E	Dilution	N/A
	9F	Expenses of the Issue	N/A
ITEM	10	ADDITIONAL INFORMATION
	10A	Share capital	N/A
	10B	Memorandum and Articles of Association	Operating and financial review and prospects—Articles of Association; Other<br><br>information—Exhibits
	10C	Material Contracts	N/A
	10D	Exchange Controls	General facts on Nokia—Controls and procedures—Exchange controls
	10E	Taxation	General facts on Nokia—Taxation
	10F	Dividends and Paying Agents	N/A
	10G	Statement by Experts	N/A
	10H	Documents on Display	Other information—Investor information—Documents on display
	10I	Subsidiary Information	N/A
	10J	Annual Report to Security Holders	N/A
ITEM	11	QUANTITATIVE AND QUALITATIVE<br><br>DISCLOSURES ABOUT MARKET RISK	Business overview—Strategy; Operating and financial review and prospects—Risk<br><br>factors—Financial and tax-related uncertainties; Financial statements—Notes to the<br><br>consolidated financial statements—Note 5.4. Financial risk management; Financial<br><br>statements—Notes to the consolidated financial statements—Note 4.5. Trade<br><br>receivables and other customer-related balances
ITEM	12	DESCRIPTION OF SECURITIES OTHER THAN<br><br>EQUITY SECURITIES
	12A	Debt Securities	N/A
	12B	Warrants and Rights	N/A
	12C	Other Securities	N/A
	12D	American Depositary Shares	General facts on Nokia—American Depositary Shares; Introduction and use of certain<br><br>terms	Form 20-F<br><br>Item Number	Form 20-F Heading	Section in Document
---	---	---	---
ITEM	13	DEFAULTS, DIVIDEND ARREARAGES AND<br><br>DELINQUENCIES	None
ITEM	14	MATERIAL MODIFICATIONS TO THE RIGHTS<br><br>OF SECURITY HOLDERS AND USE OF<br><br>PROCEEDS	None
ITEM	15	CONTROLS AND PROCEDURES	Corporate governance—Corporate governance statement—Risk management,<br><br>internal control and internal audit functions at Nokia; General facts on Nokia—<br><br>Controls and procedures; Reports of independent registered public accounting firm
ITEM	16	[Reserved]
	16A	AUDIT COMMITTEE FINANCIAL EXPERT	Corporate governance—Corporate governance statement—Our main corporate<br><br>governance bodies—Board of Directors—Committees of the Board of Directors
	16B	CODE OF ETHICS	Corporate governance—Corporate governance statement—Regulatory framework;<br><br>Operating and financial review and prospects—Business Integrity; Other information—<br><br>Exhibits
	16C	PRINCIPAL ACCOUNTANT FEES AND<br><br>SERVICES	Corporate governance—Corporate governance statement—Auditor fees and services;<br><br>Corporate governance—Corporate governance statement—Audit Committee pre-<br><br>approval policies and procedures
	16D	EXEMPTIONS FROM THE LISTING<br><br>STANDARDS FOR AUDIT COMMITTEES	None
	16E	PURCHASES OF EQUITY SECURITIES BY THE<br><br>ISSUER AND AFFILIATED PURCHASERS	Operating and financial review and prospects—Shares and shareholders—Share<br><br>details—Purchases of equity securities by the Company and affiliated purchasers<br><br>Corporate Governance—Remuneration
	16F	CHANGE IN REGISTRANT’S CERTIFYING<br><br>ACCOUNTANT	N/A
	16G	CORPORATE GOVERNANCE	Corporate governance—Corporate governance statement—Regulatory framework
	16H	MINE SAFETY DISCLOSURE	None
	16I	DISCLOSURE REGARDING FOREIGN<br><br>JURISDICTIONS THAT PREVENT<br><br>INSPECTIONS	N/A
	16J	INSIDER TRADING POLICIES	Corporate governance—Corporate governance statement—Main procedures relating<br><br>to insider administration; Other information—Exhibits
	16K	CYBERSECURITY	Corporate governance—Corporate Governance Statement—Risk management,<br><br>internal control and internal audit functions at Nokia; Corporate governance<br><br>statement—Our main corporate governance bodies—Board of Directors—Board<br><br>oversight of cybersecurity; Operating and financial review and prospects—Risk factors<br><br>—Risks impacting our competitiveness
ITEM	17	FINANCIAL STATEMENTS	Financial statements
ITEM	18	FINANCIAL STATEMENTS	Financial statements
ITEM	19	EXHIBITS	Other information—Exhibits
6	Annual Report
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Forward-looking

statements

Certain statements contained in this report constitute “forward-looking

statements.” Forward-looking statements provide Nokia's current expectations of

future events and trends based on certain assumptions and include any statement

that does not directly relate to any current or historical fact. The words “believe,”

“expect,” “expectations,” “anticipate,” “foresee,” “see,” “target,” “estimate,”

“designed,” “aim,” “plan,” “intend,” “influence,” “assumption,” “focus,” “continue,”

“project,” “should,” “is to,” “will,” “strive,” “may,” “could,” “forecast,” or similar

expressions as they relate to us or our management are intended to identify these

forward-looking statements, as well as statements regarding:

a)business strategies, planning assumptions, projects, market expansion, growth

management, and future industry trends and megatrends and our plans to

address them;

b)future performance of our businesses and any future distributions and

dividends;

c)expectations and targets regarding financial performance, results, operating

expenses, cash flows, tariffs, taxes, currency exchange rates, hedging, cost

savings and competitiveness, as well as results of operations including targeted

synergies and those related to market share, prices, net sales, income and

margins;

d)expectations, plans, timelines or benefits related to our transactions,

investments and changes in our organizational and operational structure;

e)market developments in our current and future markets and their seasonality

and cyclicality, including the telecommunication provider and AI & Cloud provider

markets, as well as general economic conditions, future regulatory

developments and the expected impact, timing and duration of potential global

pandemics and geopolitical conflicts on our businesses, our supply chain, our

customers’ businesses and the general market and economic conditions;

f)our position in the market, including product portfolio and geographical reach,

and our ability to use the same to develop the relevant business or market and

maintain our order pipeline over time;

g)any future collaboration or business collaboration agreements or patent license

agreements or arbitration awards, including income from any collaboration or

partnership, agreement or award;

h)timing of the development and delivery of our products and services;

i)the outcome of pending and threatened litigation, arbitration, disputes,

regulatory proceedings or investigations by authorities;

j)restructurings, investments, capital structure optimization efforts, divestments

and our ability to achieve the financial and operational targets set in connection

with any such restructurings, investments, and capital structure optimization

efforts including our ongoing cost savings program;

k)future capital expenditures, temporary incremental expenditures or other R&D

expenditures to develop or rollout new products; and

l)sustainability and corporate responsibility.

These statements are based on management’s best assumptions and beliefs in

light of the information currently available to it and are subject to a number of

known and unknown risks and uncertainties, many of which are beyond our control,

which could cause actual results to differ materially from such statements. These

statements are only predictions based upon our current expectations and views of

future events and developments and are subject to risks and uncertainties that are

difficult to predict because they relate to events and depend on circumstances that

will occur in the future. Risks and uncertainties that could affect these statements

include but are not limited to the risk factors specified under the section “Risk

factors” of this report and in our other filings or documents furnished with the U.S.

Securities and Exchange Commission. Other unknown or unpredictable factors or

underlying assumptions subsequently proven to be incorrect could cause actual

results to differ materially from those in the forward-looking statements. We do

not undertake any obligation to publicly update or revise forward-looking

statements, whether as a result of new information, future events or otherwise,

except to the extent legally required.

7	Annual Report

Introduction

and use of

certain terms

Nokia Corporation (“Parent Company”) is a public limited liability company

incorporated under the laws of the Republic of Finland and registered to the Finnish

Trade Register since 1896. In this Annual Report on Form 20-F, any reference to

“we,” “us,” “Nokia Group,” “the Group,” “the company” or “Nokia” means Nokia

Corporation and its consolidated subsidiaries and generally Nokia’s continuing

operations, except where we separately specify that the term means

Nokia Corporation or a particular subsidiary or business segment only or our

discontinued operations. References to “our shares,” matters relating to our shares

or matters of corporate governance refer to the shares and corporate governance

of Nokia Corporation.

Nokia Corporation has published its consolidated financial statements in euro

for periods beginning on or after 1 January 1999. In this Annual Report on Form 20-

F, references to “EUR,” “euro” or “€” are to the common currency of the European

Economic and Monetary Union, references to “dollars,” “US dollars,” “USD” or “$”

are to the official currency of the United States, references to “Chinese yuan” or

“CNY” are to the official currency of the People’s Republic of China, references to

“INR” or “Indian rupee” are to the official currency of the Republic of India,

references to “GBP” or “British pound” are to the official currency of the United

Kingdom and references to “Japanese yen” or “JPY” are to the official currency of

Japan.

Additional terms are defined in the “Glossary.”

The information contained in, or accessible through, the websites linked

throughout this Annual Report on Form 20-F is not incorporated by reference into

this document and should not be considered a part of this document.

Nokia Corporation furnishes Citibank, N.A., as Depositary, with its consolidated

financial statements and a related audit opinion of our independent auditors

annually. These financial statements are prepared in accordance with IFRS

Accounting Standards as issued by the International Accounting Standards Board

(IASB) and as adopted by the European Union (EU). In accordance with the rules and

regulations of the SEC, we do not provide a reconciliation of our consolidated

financial statements to the generally accepted accounting principles in the US, or

US GAAP.

We also furnish the Depositary with quarterly reports containing unaudited financial

information prepared in accordance with IAS 34, Interim Financial Reporting, as well

as all notices of shareholders’ meetings and other reports and communications

that are made available generally to our shareholders. The Depositary makes these

notices, reports and communications available for inspection by record holders of

American Depositary Receipts (ADRs), evidencing American Depositary Shares

(ADSs), and distributes to all record holders of ADR notices of shareholders’

meetings received by the Depositary.

In addition to the materials delivered to holders of ADRs by the Depositary, holders

can access our consolidated financial statements, and other information included

in our annual reports and proxy materials, at nokia.com/financials. This Annual

Report on Form 20-F is also available at nokia.com/financials as well as on

Citibank’s website at https://fs11.formsite.com/bHTsOU/r2piq0mgvd/index.

Holders may also request a hard copy of this annual report by calling the toll-free

number 1-877-NOKIA-ADR (1-877-665-4223), or by directing a written request to

Citibank, N.A., Shareholder Services, PO Box 43077, Providence, RI 02940-3081,

United States. With each annual distribution of our proxy materials, we offer our

record holders of ADRs the option of receiving all of these documents electronically

in the future.

1	Nokia Annual Report on Form 20-F 2025

In this report

Business overview	2
Nokia in 2025	3
Advancing connectivity to secure a brighter world	3
Our 2025 highlights	5
Interview with our President and CEO	6
Our financial performance in 2025	9
Our operating model in 2025	10
Our business groups	11
Strategy	13
Our strategy	13
Our technology vision	19
Customers and partners	21
Our customers	21
Our supply chain	24
Corporate governance	25
Corporate governance statement	26
Remuneration	47
Operating and financial review and prospects	65
Selected financial data	66
Operating and financial review	67
Business integrity	79
Environment	84
Shares and shareholders	88
Articles of Association	92	Risk factors	94
---	---
Significant subsequent events	113
General facts on Nokia	114
American Depositary Shares	115
Controls and procedures	115
Government regulation	116
Sales in United States-sanctioned countries	116
Taxation	117
Key ratios	120
Alternative performance measures	121
Financial statements	124
Consolidated financial statements	125
Notes to the consolidated financial statements	130
Reports of independent registered<br><br>public accounting firm	188
Other information	190
Exhibits	191
Glossary	192
Investor information	195
Signatures	196

2	Nokia Annual Report on Form 20-F 2025
Nokia in 2025	3
---	---
Advancing connectivity to secure<br><br>a brighter world	3
Our 2025 highlights	5
Interview with our President and CEO	6
Our financial performance in 2025	9
Our operating model in 2025	10
Our business groups	11	Strategy	13
---	---
Our strategy	13
Our technology vision	19
Customers and partners	21
Our customers	21
Our supply chain	24

| 3 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Advancing connectivity to

secure a brighter world

Nokia has long been trusted to provide the critical network infrastructure

the world relies on. Today, our technology is connecting intelligence –

powering our customers with advanced connectivity.

Telecommunication

providers

Transforming legacy networks into

high performance, secure platforms to

meet the rising demands of AI

AI & Cloud

Delivering advanced optical and IP

data center connectivity to power AI

computing across continents

Mission Critical

Enterprise & Defense

Connecting the intelligence of

machines, devices, and people for

secure, AI-enabled operations

~€160bn+

R&D investments since 2000

15/20

of the world’s fastest 5G networks use Nokia RAN

+4.4bn

mobile subscriptions supported by Nokia networks

9/10

of the top global hyperscalers use Nokia’s

optical networks

| 4 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Regional split of

employees

North America

10 000

Europe

33 000

Greater China

7 200

Net sales, EURm

19 889

North America

Europe

Greater China

India

Asia Pacific

Latin America

Middle East & Africa

Countries of operation

~130

Average number of employees in 2025

~78 000

Latin America

2 800

Middle East & Africa

2 800

India

18 300

Asia Pacific

3 900

| 5 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our 2025 highlights

New President and

CEO announced

February Justin Hotard was announced as

Nokia’s new President and CEO, joining us

on 1 April. Hotard has more than 25 years’

experience with global technology

companies, driving innovation, technology

leadership and revenue growth. He also

possesses vast expertise in the AI and data

center markets, which are critical for

Nokia’s future growth.

Closed acquisition

of Infinera

February The acquisition of Infinera

demonstrated our commitment to providing

the infrastructure underpinning the AI

supercycle and capturing the demand that

comes with it. It also improved the scale of our

Network Infrastructure business and allowed

us to pick up the pace of innovation to meet

the requirements of the AI era.

Milestones for Nokia

and Nokia Bell Labs

May Nokia celebrated its 160th birthday in

The company has been through many

transformations over that time, but none has

been more consequential than the switch to

focusing on telecoms in the 1990s. That set us

on the path to becoming what we are today: a

trusted global provider of secure and advanced

connectivity for customers all over the world.

We also celebrated the 100th anniversary of

the world‑renowned research institution Nokia

Bell Labs.

State-of-the-art R&D

campus in Oulu, Finland

September We opened our new, state-of-the-

art campus in Oulu, Finland. The campus is the

world’s most advanced hub for 5G and 6G

radio innovation. On site, 3 000 staff design,

test and deliver next-generation networks.

Those staff draw on the expertise of a local

ecosystem including customers, universities,

start-ups, established technology providers

and NATO facilities.

Announced strategic

partnership with NVIDIA

October We announced that NVIDIA will

invest $1 billion in Nokia as part of a

strategic partnership between our two

companies. Together the two companies will

enable accelerated development and

deployment of next generation AI-native

mobile networks and AI networking

infrastructure.

The partnership will add NVIDIA-powered AI-

RAN products to Nokia’s industry-leading

RAN (radio access networks) portfolio. The

announcement marks the beginning of the

AI-native wireless era, providing the

foundation to support AI-powered

consumer experiences and enterprise

services at the edge.

Together with NVIDIA we will define the next

generation of global connectivity.

New strategy announced

at Capital Markets Day

November We welcomed investors and

analysts to our Capital Markets Day in New

York to share how we are connecting

intelligence and accelerating value creation

for our customers and investors. At the

event Nokia announced a new strategy, as

well as a simplified operating model, a new

long-term financial target, new strategic

KPIs and changes to its Group Leadership

Team.

Expansion with AI & Cloud

2025 We saw real progress in AI & Cloud. We

closed and integrated Infinera. We launched

new 800G pluggables, delivering excellent

optical performance for data centers in a

compact, low-power form factor. We

expanded our data center switching offer with

our new 7220 IXR H6 switching platform,

And we generated EUR 2.4 billion in orders

from AI & Cloud customers across the year.

| 6 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Interview

with our

President

and CEO

How would you characterize Nokia’s

financial performance in 2025?

Overall, our performance was solid and in line with expectations.

We grew net sales by 3%, delivered approximately EUR 2 billion in

comparable operating profit(1) in line with guidance, and generated

free cash flow(1) of EUR 1.5 billion.

Beneath those headline results was disciplined execution. We

navigated significant foreign exchange headwinds, successfully

closed the Infinera acquisition, and accelerated growth in AI &

Cloud, generating more than EUR 2.4 billion of orders from this

customer segment. Our strong cash generation allowed us to

further strengthen the balance sheet, invest in growth, and fund

our dividend.

(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the

most directly comparable IFRS measures, refer to the “Alternative performance

measures” section.

| 7 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

“Nokia changed the world once

by connecting people. Now we

can change it again by

connecting intelligence.”

Justin Hotard

President and CEO

What drove performance across the portfolio?

Within Network Infrastructure, we saw strong growth in Optical

Networks, solid performance in IP Networks, and stable results

in Fixed Networks as we repositioned the portfolio. The

integration of Infinera strengthened our competitive position,

particularly with AI & Cloud customers, and increased our

market share in North America.

Cloud and Network Services performed well, growing faster

than the market and improving profitability. Mobile Networks

showed signs of stabilization but remained below our long-

term expectations, and we are sharpening execution

accordingly. Nokia Technologies executed well with a slight

increase in our contracted net sales run-rate to EUR 1.4 billion

and delivered net sales of EUR 1.5 billion with strong

profitability and cash generation.

What strategic actions shaped the year?

2025 was about setting the strategy for where we see the

business going, and aligning the company accordingly. During

the year, we repositioned Nokia to sharpen execution and

focus on where we see the greatest long-term opportunities.

These changes were designed to increase our organizational

clock speed by reducing complexity and accelerating decision-

making.

At our Capital Markets Day in November, we introduced our

new strategy to position Nokia to lead in the AI-driven

transformation of networks and capture the value of the AI

supercycle. We simplified our operating model and reorganized

our business into two primary operating segments — Network

Infrastructure and Mobile Infrastructure — to better align to

customer needs and accelerate innovation as demand for

advanced connectivity increases. This reorganization took

effect as of 1 January 2026.

We also identified several businesses that, while attractive, are

not core to our strategy and decided to move them into

Portfolio Businesses to improve performance and explore

strategic alternatives.

We strengthened our position with telecommunication

providers, accelerated expansion in AI & Cloud, grew in mission

critical enterprise, and moved our defense activities into a

dedicated unit for incubation.

What are you doing to make

Nokia easier to work with?

There are three elements. It starts and ends with the customer.

First, as part of our simplified operating model, we established

a unified Global Sales and Customer Operations organization

for our telecommunication providers and mission critical

enterprise customers, while maintaining deep focus on AI &

Cloud within Network Infrastructure. The result is clearer

accountability and a simpler engagement model.

Second, we strengthened our partnerships — both go-to-

market and strategic technology partnerships. Our collaboration

with NVIDIA to build AI-native networks starting with AI-RAN

reflects our approach: focus our innovation where we

differentiate, and partner with best-of-breed leaders elsewhere.

Third, we simplified internally by consolidating functions,

eliminating overlaps, clarifying accountability, and reinforcing

functional excellence. This aligns with our Team Nokia culture

— clear roles, shared objectives, and collective focus on

delivering innovation that creates value for our customers.

How is AI & Cloud demand affecting Nokia’s

growth, and why does Nokia have a right to win?

AI & Cloud represent the leading edge of the AI supercycle.

Early applications are driving substantial infrastructure

investment in data centers and AI factories. We have focused

our roadmap, integrated Infinera to strengthen optical

capabilities, launched 800G ZR/ZR+ coherent pluggables,

invested in new fab capacity for our optical components, and

introduced our 7220 IXR platform AI-native architectures.

We offer AI & Cloud customers a differentiated alternative built

on performance, quality, and deep optical integration. Our

vertical integration across hardware and software allows us to

optimize power, scale, and reliability — advantages that matter

as AI infrastructure expands.

AI & Cloud customers are increasingly driving the leading edge

of network technology. That positions us to innovate at the

forefront and extend those capabilities across

telecommunications and enterprise markets. As a result, we

are continuing to invest in both our optical and IP networking

businesses for long-term growth and scale.

| 8 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

How are you approaching capital

allocation and investment discipline?

Our capital allocation principles remain consistent: invest

organically where returns are highest, complemented by

disciplined M&A and targeted minority investments.

Under our strategy, we are increasing investment in Optical

Networks and IP Networks, investing selectively in

differentiation within Mobile Infrastructure — including cloud-

native core, AI-native networks, and 6G — and reducing

exposure to lower-growth areas. We shifted from broad venture

funding to more targeted strategic minority investments.

At the same time, we remain committed to financial discipline

and shareholder returns, including the proposed EUR 0.14 per

share distribution.

What are your priorities for 2026 and beyond?

Our new strategy outlines five strategic priorities: accelerating

growth in AI & Cloud; leading in AI-native networks and 6G;

growing through co-innovation; deploying capital where we

differentiate; and unlocking sustainable returns.

Within that framework, I see three critical areas of focus for 2026.

First, capturing growth in Network Infrastructure, particularly

with AI & Cloud customers, while improving profitability in

Fixed Networks.

Second, improving gross margin, segment operating profit,

and cash flow in Mobile Infrastructure. While this is not a

structural growth market near-term, it should deliver

consistent returns while we invest in long-term technology

leadership for AI-native networks and 6G.

Third, driving efficiency and productivity across the company.

This includes disciplined cost management, embedding a

culture of continuous improvement, and investing in AI

internally to simplify processes, increase automation, and

accelerate time-to-value from R&D.

Delivering on these priorities is how we create long-term value

for our shareholders.

Do you view culture as a performance driver?

Absolutely. Nokia is a company built from multiple

transformations over time, and building a unified culture is

essential. We are doing this by engaging our leaders and our

entire employee base, so their voice is a part of our cultural

evolution and values.

Team Nokia means clear accountability, empowerment, and

shared objectives. It also means clear ownership and disciplined

follow-through, so that decisions translate into results. We are

making sure every employee understands how their goals and

actions connect directly to Nokia’s overall strategy.

We are reinforcing agility, continuous learning, and streamlined

processes so that innovation translates into measurable

performance and value for our customers and shareholders

and growth opportunities for our employees.

How do you see the outlook for 2026?

In financial terms, we target EUR 2.0 to 2.5 billion of

comparable operating profit(1) in 2026. We expect continued

strong demand trends in Network Infrastructure as we ramp

new products expanding our presence in AI & Cloud and invest

for long-term growth. In Mobile Infrastructure, we see a stable

market environment and are focused on efficiency and

improving profitability.

Overall, our objective in 2026 is to demonstrate clear progress

toward the long-term targets we set at our Capital Markets Day.

As you reflect on your first year as CEO,

how do you view Nokia’s direction?

2025 was my first year as CEO, and it was a year of decisive

action. We clarified our strategy, simplified the company, and

made changes to the leadership team to align accountability with

our strategic priorities and strengthen execution. I’m encouraged

by how the leadership team has stepped up during this transition

and how quickly we are operating as a unified group.

I am proud of the progress Team Nokia has made, and I want to

thank the entire team for their focus and commitment.

I also want to thank the Board, and in particular our Board Chair

Sari Baldauf — who has decided to step down — for her

leadership and support during this transition. I look forward to

continuing to work closely with the Board as we execute our

strategy and unlock Nokia’s full potential.

Nokia changed the world once by connecting people. Now we

can change it again by connecting intelligence.

(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures

to the most directly comparable IFRS measures, refer to the “Alternative

performance measures” section.

| 9 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our financial performance in 2025

Our performance in 2025 was a solid foundation for the launch of a new strategy that will position

Nokia to lead network transformation in the AI era and support long-term profitable growth.

Net sales (EURm)

245

Operating profit (EURm)

271

Free cash flow (EURm)(1)

298

Earnings per share (EUR)(2)

329

Proposed dividend per share (EUR)(3)

369

150+

Countries served with

Nokia connectivity

27%

Reduction of total GHG

emissions (scopes 1, 2, 3)

from a 2019 base year

€4.9bn

R&D investments in 2025

€2.1bn

Dividends paid since 2023

€1.6bn

Shares repurchased since 2023

(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures, refer to the “Alternative performance measures” section.

(2)Diluted earnings per share for continuing operations.

(3)The Board of Directors proposes to the Annual General Meeting 2026 to be authorized to decide in its discretion on the distribution of an aggregate maximum of EUR 0.14 per share as

dividend from the retained earnings and/or as assets from the reserve for invested unrestricted equity.

| 10 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our operating model in 2025

In 2025, Nokia operated with four business groups as outlined below.

In November 2025, alongside the launch of its new strategy, Nokia announced that it would simplify its operating model into two

primary operating segments, Network Infrastructure and Mobile Infrastructure. This simplification took effect on 1 January 2026

with the new structure described on page 18.

Network Infrastructure

Network Infrastructure delivers optical

transport, IP routing and switching, and fixed

access technology for telecommunication

providers, mission critical enterprise and AI &

Cloud customers.

Segment net sales (EURm)

+23%

643

Segment operating margin

-190 bps

673

Cloud and Network Services

Cloud and Networks Services provides open,

secure, automated and scalable software that

accelerates our customers’ journeys to

autonomous networks and new value creation.

Segment net sales (EURm)

+1%

294669116247464

Segment operating margin

+500 bps

294669116247495

Mobile Networks

Mobile Networks creates high-performance

products and services that support advanced

connectivity across all 3GPP mobile

technology generations, enabling a seamless

evolution to future technologies.

Segment net sales (EURm)

-4%

919

Segment operating margin

-270 bps

949

Nokia Technologies

Nokia Technologies is responsible for

managing Nokia’s patent portfolio and

monetizing Nokia’s intellectual property,

including patents and technologies.

Segment net sales (EURm)

-22%

1414

Segment operating margin

-790 bps

1444

| 11 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our business groups

Network<br><br>Infrastructure
Network Infrastructure provides reliable, high-performing,<br><br>trusted solutions that power everything from everyday<br><br>communications to AI and essential mission critical systems.

Network Infrastructure delivered net sales of

EUR 8.0 billion in 2025 with a segment

operating margin of 9.8%.

We deliver industry-leading optical, IP, fixed

and data center networking solutions to

telecommunication providers, AI & Cloud

customers, mission critical enterprises,

wholesalers and public sector organizations.

Our trusted, purpose-built connectivity

solutions power the internet, drive the global

economy, and support the mission critical

industries that keep the world running.

Optical Networks

Optical is a critical component of the

infrastructure required to support AI at scale,

and we are investing with a long-term view. We

see rapid adoption of high-speed optical

transmission technology including 1.2T/1.6T

coherent transponders and 800G coherent

pluggables that can drive down cost, space, and

power per bit. The demand for 800G pluggables

is challenging the industry's supply chain. Our

focus is on driving market share gains across the

portfolio, building on our number two global

market position(1), increasing our presence in AI &

Cloud and taking steps to address new emerging

intra-data center component opportunities.

IP Networks

IP Networks continued to lead in its sector,

holding the number one global position in IP

edge routing(2). Key priorities for the business

include expanding our presence in data center

networks and driving growth in the mission

critical enterprise segment. We saw

encouraging proof points in the second half of

2025 for our data center business, with a

number of significant design wins and

increased order intake.

Fixed Networks

Fixed Networks focuses on advancing fiber

technologies by leading in residential Passive

Optical Networks (PON), innovating chipsets

and platforms, leveraging AI and automation

to increase margins, and expanding PON into

new sectors such as enterprises and data

centers. Continued innovation leadership in

next generation PON technologies, such as

10G, 25G, and 50G, enabled Fixed Networks to

sustain its global number one position in xPON

OLT for the sixth consecutive year. The

business is also number one in 10G (XGS PON)

ONT/OLT, underscoring its strength in high-

speed fiber connectivity solutions(1).

(1)Omdia and Dell’Oro Q3’25

(2)Dell’Oro Q3'25

Cloud and<br><br>Network Services
Cloud and Network Services delivers open, secure, automated,<br><br>and scalable software that accelerates our customers’ journey<br><br>to autonomous networks and new value creation.

Cloud and Network Services (CNS) delivered

net sales of EUR 2.6 billion, with a segment

operating margin of 13.0%.

Cloud and Network Services’ portfolio includes

Core Network software, which is made up of

voice core, packet core, subscriber data

management, and signaling and policy

software for telecommunication providers.

The CNS portfolio also includes Autonomous

Network software which is made up of a

software fabric (called Autonomous Network

Fabric) that supports digital operations,

analytics and AI, and security software. CNS

customers include the largest

telecommunication providers and mission

critical enterprises in the world.

Telecommunication investments remained

stable in 2025 with providers focusing on 5G

expansion while investing in automation and AI

to optimize their networks, reduce costs, and

improve sustainability. Monetization of 5G

investments also remained a top priority

among the larger providers.

In Core Networks, we hold a leading position in

the telecommunications market, with our

technology present in 65% of

telecommunication providers’ 5G SA

networks. Omdia has ranked us number one in

portfolio competitiveness, Core SaaS, cloud-

native readiness, automation, and 5G deals,

with the highest number of 5G SA core

operator customers and live deployments

worldwide. We have achieved our position by

being early to invest in cloud innovation,

containerization, multi-cloud support, and

flexible deployment options.

In Autonomous Networks, we are a market

leader across various domains: ranked number

one in both AI Ops and Cross-Domain Service

Orchestration and number two in Network

Automation Software by Appledore; number

one in Automated Assurance and a leader in

Service Assurance by Analysys Mason; an

innovation leader in Telco Extended Detection

and Response (XDR) security by GigaOm; and a

Leader and Top Innovator for Telco API

platforms by ABI Research.

| 12 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our business groups

Mobile<br><br>Networks
Mobile Networks creates high-performing products and<br><br>services that support advanced connectivity across all 3GPP<br><br>mobile technology generations.

Mobile Networks delivered net sales of EUR

7.8 billion in 2025 with a segment operating

margin of 2.8%.

Mobile Networks’ portfolio included products

for radio access networks (RAN) and

microwave radio for transport, network

management and a range of associated

services. We serve telecommunication

providers and mission critical enterprises,

including the defense sector and

governments. The demand environment was

largely stable in 2025.

In 2025, we reinforced our position as a global

RAN supplier, delivering the fastest 5G in 15 of

the 20 fastest 5G countries. Analyst firms like

Dell’Oro and Omdia ranked Nokia third in

global Mobile RAN market share for the first

three quarters.

By the end of the year, we had 408

commercial 5G agreements across key regions

and over 1 000 private wireless customers. In

2024 - 2025, we gained 18 new

telecommunication customers, seven of which

joined in 2025, expanded RAN market share

with 18 customers, and saw 13 existing

customers upgrade to 5G technologies.

Nokia has set itself apart from competitors by

pioneering AI-powered radio access networks

(AI-RAN) solutions in partnership with NVIDIA.

As the first supplier to introduce commercial-

grade AI-RAN products for 5G-Advanced and

6G networks, we leverage the NVIDIA ARC-Pro

accelerated computing platform to evolve our

Cloud RAN into a Cloud AI-RAN solution, and in

our AirScale RAN solutions. The upcoming AI-

RAN capacity plug-in unit for Nokia AirScale

baseband will be optimized for AI-native

traffic, allowing customers to capture greater

opportunities in the AI-driven market cycle.

T-Mobile U.S. is partnering with Nokia and

NVIDIA to drive and test AI-RAN technologies

within its commercial network. We are also

collaborating with NVIDIA on AI-RAN

innovation with SoftBank in Japan and Indosat

Ooredoo Hutchison in Indonesia. Additionally,

with KDDI in Japan, we are researching AI-

RAN’s practical applications and architectures

for future commercial viability.

Building on the achievements of 2025 and

embracing AI-driven networks and next-

generation 5G-Advanced and 6G, we are well

positioned to anticipate industry needs and

shape the future of global connectivity.

Nokia<br><br>Technologies
Nokia Technologies conducts research and standardization,<br><br>protects our investments by securing patents, and enables<br><br>other companies to build on our innovation through licensing.

Nokia Technologies delivered net sales of EUR

1.5 billion, with a segment operating profit of

EUR 1.1 billion.

We continued to diversify our revenue pools

with further progress in our expansion areas,

including automotive, consumer electronics,

Internet of Things (IoT), and multimedia

services. In addition, we continued to invest in

our portfolio to future-proof our business.

Nokia has led wireless and multimedia

innovation for over 30 years, building one of

the industry’s largest high-quality patent

portfolios with more than 26 000 families,

including over 8 000 essential to 5G. Our

inventions range from AI and machine learning

for 5G-Advanced and 6G, to environmental

sustainability solutions, Multi-RAT Spectrum

Sharing, MIMO, and quantum security.

The business group shares Nokia’s technology

with a wide range of industries by licensing our

foundational wireless and multimedia

innovations. We have dedicated patent

licensing programs for mobile devices,

consumer electronics, IoT devices and

solutions, automotive, and multimedia

services.

The strength of our assets has made it

possible for us to successfully secure the vast

majority of our patent licensing agreements

without resorting to litigation. This solid

foundation also enables us to establish new

markets through pioneering agreements.

Whenever a device connects to a mobile

network or streams video, it’s powered by

Nokia’s technology. Our inventions are

integrated into more than a billion new devices

worldwide each year. They power entire

industries, enabling smartphones, laptops,

smart TVs, connected cars, smart home

appliances, video streaming platforms, and a

wide range of AR/VR applications.

Building on the strong performance of our

smartphone renewals and the momentum in

our expansion areas, we are well positioned

for continued stability. We have secured

annual contracted recurring revenue of over

EUR 800 million through 2030, providing a

healthy foundation for future success. Our

licensing programs in our expansion areas of

automotive, consumer electronics, IoT and

multimedia now contribute an annual revenue

run-rate of more than EUR 200 million.

| 13 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our strategy

Connecting

intelligence:

Powering

the AI era

We are in the middle of an AI

supercycle, a technology revolution in

which multiple waves of innovation will

build on each other.

As intelligence moves beyond the data center and into the

physical world the AI supercycle will transform how devices

interact, how industries operate, and how people live and

experience technology. This represents a moment of

disruption in which new leaders can emerge and substantial

new value can be created.

As the trusted western provider of secure and advanced

connectivity, our technology is powering the AI supercycle.

From fixed to mobile infrastructure we are developing

technology that accelerates value for our customers.

Significant value creation opportunity in the AI supercycle
Large AI supercycle<br><br>market opportunity	A strong innovation<br><br>roadmap	Key wins validating<br><br>strategic milestones
€60bn	€4.9bn	~€2.4bn
‘28 SAM, 9% CAGR(1)	R&D investment in 2025	YTD AI & Cloud orders up 3X(2)
(1) Serviceable addressable market. Nokia, analyst reports, excluding China/Russia;<br><br>(2) YTD 2025 including Infinera from 1 January 2025. AI & Cloud includes AI and data center customers, neocloud, sovereign cloud,<br><br>Tier 2/3 cloud providers.

| 14 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our strategy evolution during 2025

Infinera acquisition

Nokia announced its intent to acquire Infinera, a leader in

optical networking solutions and advanced optical

semiconductors, on 26 June 2024 and the acquisition was

completed on 28 February 2025. Nokia acquired Infinera for a

purchase consideration of EUR 2.5 billion as described in more

detail on page 184. The transaction was aligned with Nokia’s

strategic direction and aimed to provide three primary strategic

benefits:

1.Increased scale in Optical Networks: The combination of

Nokia’s existing optical portfolio with Infinera’s has

created a business with the scale to better compete on all

fronts with the market leaders, and over time, improve

the operating margin and returns generated in the

business.

2.Expanded presence in North America: Nokia’s Optical

Networks business before the acquisition had a strong

position in many regions but the notable weakness was in

North America. This was the region of strength for Infinera

and the acquisition was highly complementary and creates a

stronger global presence.

3.Strengthened position in AI & Cloud: Nokia had only limited

presence in supplying the hyperscalers or even the broader AI &

Cloud markets. Infinera already had deep engagement with

hyperscalers and has built on that post acquisition.

Nokia moved quickly after the completion of the acquisition to

integrate the business. Within just over a month of closing the

acquisition, Nokia communicated to customers how the product

portfolio would evolve. The commercial momentum of the

combined optical business was strong through the rest of 2025.

Leadership transition

In February, Nokia announced a leadership transition that would

see Justin Hotard appointed as President and CEO, succeeding

Pekka Lundmark, with the change taking effect on 1 April 2025.

Following the leadership transition, Nokia entered a period of

strategic assessment. From the start the focus was on capital

allocation to ensure Nokia is investing sufficiently in the key

growth opportunities in the business but also driving for

efficiency across the organization.

While some conclusions of that process were already announced

earlier, Nokia’s new strategy was then fully communicated at

the Capital Markets Day in November 2025. The following pages

outline the strategy Nokia began implementing through 2025

and will focus on executing in 2026 and beyond.

Capital Markets Day 2025

On 19 November 2025, during our Capital Markets Day, we

announced our new strategy to position Nokia to lead in the AI-

driven transformation of networks and capture the value of the

AI supercycle. It laid out how we would take the lead in

connecting intelligence by becoming faster, more agile, more

focused and more execution-driven. Going forward we will be

guided by five strategic priorities:

▪Accelerate growth in AI & Cloud

▪Lead the next era of mobile connectivity with AI-native

networks and 6G

▪Grow by co-innovating with customers and partners

▪Focus capital where Nokia can differentiate

▪Unlock sustainable returns

To execute on our new strategic direction, we have simplified

Nokia’s operating model, effective from 1 January 2026. Nokia

has moved from four business groups to two primary operating

segments: Network Infrastructure and Mobile Infrastructure.

This simplification will streamline our organization, allowing us

to accelerate innovation, unlock operating leverage and move

faster.

Our ways of working will also change in order to reinforce our

strategic priorities. Going forward we are prioritizing clear roles,

accountability and the empowerment needed to execute at

pace. This will help us move faster, make better decisions, align

ourselves more closely with customers and focus our attention

on where we see the greatest opportunities. This

straightforward, cohesive, customer-focused approach has a

simple name: Team Nokia.

Nokia has already changed the world once. Now we have the

opportunity to change it again. This is the new chapter of Nokia:

focused, differentiated, trusted and already creating value in

the AI era.

| 15 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our strategic

priorities in action

Strategic priority

Accelerate growth in

AI & Cloud

The AI supercycle is a multi-decade, multi-wave

technology transition. We are investing to grow in the

parts of our portfolio that power it, from data centers to

the intelligent edge. These investments, specifically in

Optical Networks and IP Networks, will help us to capture

the demand, growth and value that the AI supercycle is

generating.

Our acquisition of Infinera strengthened our position in

optical transport, enabling us to deliver ultra-fast, reliable

connectivity for hyperscale data centers and AI workloads.

Strategic partnerships with leading technology companies

such as NVIDIA, and investments in providers of sovereign

AI cloud infrastructure such as Nscale, ensure our

solutions are embedded at the heart of global innovation

and value creation.

AI network demand grid
	Reliability	<br><br>Downtime	Per‑port peak<br><br>bandwidth	Mobile traffic		Latency
AI-native					Physical AI<br><br>▪Self-driving cars<br><br>▪General robotics
Open
Trustworthy<br><br>and secure		Perception AI<br><br>▪Speech<br><br>recognition<br><br>▪Deep RecSys<br><br>▪Medical imaging	Generative AI<br><br>▪Digital<br><br>marketing<br><br>▪Content<br><br>creation	Agentic AI<br><br>▪Coding assistant<br><br>▪Customer service<br><br>▪Patient care
Extensible	Foundational AI<br><br>▪2012 AlexNet

| 16 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Strategic priority

02	Lead the next era of connectivity<br><br>with AI-native networks and 6G

We’re pioneering trusted, secure, AI-

powered networks.

Currently, most AI data traffic comes from

text-based applications such as large

language models (LLMs). In the future, that

traffic will become more diverse, based on

images, videos and physical devices with

embedded AI, such as augmented reality

glasses. In addition, AI is shifting network

traffic away from the traditional, downlink-

heavy model based on consuming content,

and towards a more balanced, uplink-and-

downlink model based on the creation,

interpretation and uploading of data. In the

AI supercycle networks must not only carry

this AI traffic but also use AI to optimize

performance, reliability, and energy

efficiency.

Our innovations in optical transport, IP

switching, and radio hardware and software

allow networks to meet these demanding

requirements, making it possible to achieve

ultra-low latency, massive capacity and

extreme scalability. Our AI-RAN partnership

with NVIDIA demonstrates our strategic

intent, while ongoing research and

standardization work mean we are already

shaping the qualities and capabilities of 6G.

By cloudifying core network functions,

collaborating with industry leaders and

developing the software that optimizes

networks for the reality of AI, we help our

customers to scale efficiently and securely

as AI traffic grows, agentic AI rolls out and

physical AI becomes more commonplace.

Strategic priority

03	Grow by co-innovating with<br><br>customers and partners

Our best innovations are built together with

customers, partners and the broader

technology ecosystem. But we want to go

further. We will drive co-creation with our

ecosystem where customers or partner

competencies complement our own, aiming

to improve product performance, strengthen

our own competitiveness and further

differentiate us in a demanding market.

Recent examples of this approach include

partnership and investment in Nscale for AI

cloud infrastructure, and collaboration with

NestAI to advance autonomous systems in

defense.

These initiatives demonstrate our ability to

leverage our networking expertise while

integrating complementary capabilities from

partners.

Co-innovation accelerates time-to-market,

strengthens customer relationships, and

ensures solutions deliver measurable

outcomes. Nokia’s recently strengthened

partnership with NVIDIA demonstrates these

benefits – our largest US customer, T-Mobile

US, is an active participant in the

partnership, using it to drive and test AI-RAN

technologies and use cases.

English 20-F and Annual Report (5).jpg

From connecting people to connecting intelligence
Consumer<br><br>AI traffic<br><br>growth	Enterprise and<br><br>industrial AI traffic<br><br>growth	New<br><br>network<br><br>demands
20%<br><br>CAGR over the next<br><br>decade	~50%<br><br>CAGR over the<br><br>next decade	» Uplink intensity increasing<br><br>» Traffic variability increasing<br><br>» Latency sensitivity critical	Synergy model
---

Telecommunications,

Cloud, Industry,

Defense

Tailored

solutions

with

measurable

outcomes

Nokia

networking

expertise

Hyperscalers,

Industry Leaders,

Enterprises

16	2	Nokia Annual Report on Form 20-F 2025

| 17 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Strategic priority

04	Focus capital where<br><br>Nokia can differentiate

We will invest where we can truly differentiate

ourselves from our competitors, ensuring

resources are allocated to areas with clear

technological leadership and market

opportunity.

Elsewhere, we will partner with the best in

the industry to create more value. With our

Core portfolio, for example, we focused on

real software differentiation and partnered

with companies such as Red Hat instead of

building our own cloud stack.

We are pulling back from venture fund

investing in order to focus on selective and

strategic direct minority investments that

support or complement our commercial

endeavors and strategy to drive market

technology leadership.

Our strategy also takes account of

opportunities to achieve organic growth

through R&D, targeted capital expenditure

to expand critical capacity, and selective

mergers and acquisitions, such as our

acquisition of Infinera, that enhance our

capabilities in areas where we can lead. The

creation of our Portfolio Businesses segment

clarifies non-core activities and enables

evaluation of alternative ownership models.

Strategic priority

05	Unlock sustainable<br><br>returns

We will empower Team Nokia, invest in AI-

enabled productivity and pursue consistent,

durable value for our shareholders.

Internally, our focus on operational

excellence, portfolio simplification and AI-

enabled productivity drives efficiency and

profitability across the organization.

Capital discipline supports balanced and

growing dividends and share buybacks, while

performance improvements and cost

efficiencies can reinforce market share

gains.

By executing our strategic priorities, we aim

to deliver earnings growth, cash generation

and total shareholder returns, further driving

innovation and value creation in the

technology ecosystem.

Capital allocation: approach and resulting opportunity
1	Organic investment:<br><br>R&D and CapEx	Focused	Near-term profit<br><br>improvement
2	Inorganic investment:<br><br>M&A and strategic investments	Prudent
			Long-term growth<br><br>potential
3	Dividends: recurring, stable<br><br>and growing over time
		Balanced
4	Share buybacks:<br><br>excess cash return			Creating long-term value for shareholders
---	---	---
Delivering<br><br>profit<br><br>expansion	Position Nokia<br><br>for long-term<br><br>growth	Maintaining<br><br>disciplined approach<br><br>to capital allocation

| 18 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Framing Nokia’s future

Our strategy is clear, focused and

positions us to lead. To execute with

maximum efficiency, Nokia must align with

our customers - how they buy, how they

evolve and how they position themselves.

To better align with customer needs and accelerate innovation as

the AI supercycle increases demand for advanced connectivity,

Nokia announced that it would simplify its operating model into

two primary operating segments: Network Infrastructure and

Mobile Infrastructure. This reorganization took effect as of

1 January 2026. During 2025 Nokia still operated under the

previous structure as described on page 10.

The reorganization recognizes Network Infrastructure as a

growth segment, positioned to capitalize on the rapid, global AI

and data center build-out while continuing to innovate for its

telecommunications customer base. The segment consists of

three business units: Optical Networks, IP Networks and

Fixed Networks.

The new Mobile Infrastructure segment brings together Nokia’s

Core Software portfolio, Radio Networks portfolio and Technology

Standards, formerly Nokia Technologies. It will be positioned for

core and radio-network technology and services leadership to

lead the industry towards AI-native networks and 6G.

Nokia Defense is being launched as an incubation unit to serve

as the central go-to-market and R&D hub for Nokia’s defense

portfolio.

This new structure gives us the clarity and accountability we

need to execute with speed and discipline.

Nokia has conducted a thorough review of its business

portfolio. This process identified several units which, despite

some compelling growth opportunities, are not seen as core to

the future of the company’s strategy.

Nokia aims to conclude on a future direction for each unit

during 2026. During this transition, Nokia’s priority will be to

ensure continuity for customers and employees.

Portfolio Businesses include the following units:

▪Fixed Wireless Access CPE

▪Site Implementation and Outside Plant

▪Enterprise Campus Edge

▪Microwave Radio

Business structure: Two operating segments	Our customers	Creating long-term value for stakeholders
Network Infrastructure<br><br>Mobile Infrastructure	Telecommunication Providers<br><br>AI & Cloud<br><br>Mission Critical Enterprise & Defense<br><br>Technology Licensees	Customer focus and co-innovation<br><br>Embedding greater agility to position Nokia for long-term sales growth<br><br>Driving profit growth through operational excellence and efficiency<br><br>Maintain a disciplined approach to capital allocation

| 19 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our technology vision

Connecting

intelligence:

Enabling a

supercycle

LLMs, agents, autonomous vehicles – some of the

innovations to have emerged from the first phase of

the AI supercycle are already all around us. To fully

capture the value of that supercycle we must

understand what AI means for connectivity. AI will

blur the boundaries of the physical and the digital

worlds. The connected landscape will completely

change the demands placed on networks.

As a trusted Western provider of secure and advanced connectivity,

Nokia’s technology is powering the AI supercycle. Our technology

provides the infrastructure for AI systems to exchange and process data

in real time. This is vital but far from straightforward: the amount of

complex and diverse AI-native network traffic is increasing exponentially.

Connectivity that hits required KPIs for bandwidth, capacity and latency

will become a major value driver for telecommunication providers as data

flows both ways between data centers and AI-powered devices,

applications and autonomous vehicles.

| 20 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Enterprises must scale their adoption of AI. This means

networks must evolve from delivery channels to integral

components of the AI ecosystem. This is true not only to

capture opportunities enabled by 5G, but to prepare for 6G and

beyond.

But while grasping the potential of AI, enterprises also recognize

that the infrastructure enabling it must be secure and dependable.

Advanced connectivity allows for more devices, machines and

distributed systems to plug into networks. This increases the need

for trust, security and resilience across entire architectures.

Privacy, transparency, accountability and other responsible

principles must be prioritized throughout the development,

implementation and operation of AI models and tools.

For decades, Nokia technologies have driven the digitalization

of networks, from analog sound waves to bits, then to packet

switched technologies across radio, transport, IP switching

domains and the cloud edge. We have peerless visibility across

the network, based on unique datasets that allow us to train,

inference and fine-tune AI models built specifically for

networks.

In RAN, we recently reinforced our AnyRAN portfolio by

expanding our partnership with NVIDIA, bringing their GPUs into

our radio networks and embedding AI-based innovations into

the base bands. This brings GPU support to our proven field-

hardened software on the AI-RAN platform.

In IP routing, our portfolio is built on robust software sitting on

top of unique silicon, as well as a comprehensive portfolio of

data center switches. We are also leaders in Indium Phosphide

photonic integrated circuits, differentiating us from our

competitors. In fixed access, we recently launched the world's

first 50-gig PON and are getting ready for ultra-fast broadband.

In Optical Networks, our innovation in material sciences helps us

achieve previously impossible capacities across fiber optical

cables, doubling previous throughput and interface

performance. Our pluggables give operators and hyperscalers

the flexibility and scalability that the AI era demands.

Tomorrow’s networks won’t just carry data. They will

continuously adapt, protect and improve. AI powers the

networks, and the networks power AI. The benefits will be felt by

network owners and their customers: businesses, public

services and communities, everywhere.

Nokia Bell Labs
Nokia Bell Labs is one of the world’s premier industrial<br><br>research labs. Celebrating its centenary in 2025 – the same<br><br>year as Nokia’s 160th anniversary – it brings together<br><br>mathematicians, engineers, physicists, programmers and<br><br>other experts to work on some of technology’s biggest<br><br>challenges.<br><br>Nokia Bell Labs researches the fields of network<br><br>fundamentals, automation, semiconductors and devices, and<br><br>AI and software systems. Current focus areas include:<br><br>Physical AI: We are building Physical AI models that can<br><br>interpret a physical scene in real-time. These models allow<br><br>users to ask “what is happening now?” and issue natural<br><br>language commands in a variety of settings; the models will<br><br>reply with an understanding of the physical world and the<br><br>people and objects that inhabit it.	Space communications: In March 2025, in collaboration with<br><br>NASA, Intuitive Machines and Lunar Outpost, we deployed the<br><br>first cellular network on the Moon.<br><br>AI-native networks and 6G: Throughout 2025 we advanced<br><br>the 6G ecosystem in multiple domains through co-creation<br><br>with customers and partners. Work included the exploration of<br><br>interoperable, multi-vendor AI in wireless networks with<br><br>Qualcomm Technologies; 6G radio receiver leveraging AI to<br><br>extend uplink range and enhance coverage with Rohde &<br><br>Schwarz; and driving innovation in 6G energy efficiency and<br><br>network resiliency with KDDI Research.
Our R&D, standardization, and IP strength
---	---	---
Innovation leadership<br><br>Strong innovation roadmaps and<br><br>co-innovation with customers<br><br>and partners.	~€160bn	€4.9bn
	R&D investments since<br><br>2000	R&D investments in 2025
Standards leadership<br><br>Ecosystem leadership through<br><br>standardization. Nokia holds key<br><br>positions across all major<br><br>standardization and industry<br><br>groups.	8 000+	6G
	patent families declared as<br><br>essential to 5G standards	founding member of Next G Alliance<br><br>and leadership in Hexa-X-II and 6G-<br><br>ANNA projects
Patent leadership<br><br>Constant renewal of industry-<br><br>leading portfolio.	26 000+
	patent families with vast majority<br><br>still in force in ten years’ time

| 21 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our customers

Delivering

value,

consistently

Nokia’s technology is an essential enabler

of the AI supercycle – a revolution that is

already reshaping demand from our

customers.

Telecommunication<br><br>providers	Telecommunication<br><br>providers	Telecommunication<br><br>providers
70%	70%	15/20
of the world’s 5G standalone<br><br>networks include Nokia core<br><br>platforms	of fiber broadband connections<br><br>in North America use Nokia<br><br>networks	of the world’s fastest 5G<br><br>networks rely on our technology
AI & Cloud	AI & Cloud	Mission critical<br><br>enterprises
9/10	100+	1 000+
of the top global hyperscalers<br><br>use Nokia’s optical networks	customer relationships	momentum growing in utilities,<br><br>transportation, public sector,<br><br>manufacturing and health care

Our customers are contending with the accelerating growth of

AI traffic and the new demands that AI applications are placing

on network performance.

As a trusted global provider of secure and advanced

connectivity, our technology helps our customers capture the

opportunities of an AI-enabled future. We also co-create

solutions with those customers to make sure our product

performance and business competitiveness are second to none.

Our customers comprise four broad groups: Telecommunication

Providers, AI & Cloud, Mission Critical Enterprise & Defense, and

Technology Licensees. Nokia discloses the combination of AI &

Cloud providers and Mission Critical Enterprise in the breakdown of

sales by customer type on page 135. This section analyzes the

current situation with each of those customer groups.

| 22 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- | | 01 | | | --- | --- | | | Our customers Telecommunication Providers | | | Serviceable addressable market: €69 billion, up 2% year-on-year. |

Telecommunication providers offer voice and/or data services

through fixed and/or mobile connectivity to consumers,

enterprises, governments and other customers. To stay

competitive, telecommunication providers must unlock new

value, improve performance and bring new services to their

customers, transforming legacy networks into high performance

and secure platforms ready for the demands of the AI supercycle.

Nokia estimates that in 2025 our serviceable addressable

market (SAM) related to telecommunication providers was EUR

69 billion, having increased by 2% from 2024 to 2025, excluding

the impact of changes in foreign currency exchange rates. We

saw moderate market growth in all segments driven by North

America, Middle East, Africa and India.

We expect the SAM to grow moderately, at a 1% compound annual

growth rate (CAGR) between 2025 and 2028 excluding the impact of

changes in foreign currency exchange rates. We expect that fiber, IP

routing and optical networks will grow faster than the overall

telecommunication provider market, driven by the continuous

demand for higher speed access technologies. Meanwhile we expect

RAN investments to track the overall telecommunication provider

market, as 5G continues to roll out. This rollout will drive growth in

software, including 5G Core and all software segments supporting

5G operability and monetization. Long term, we expect growth in the

RAN market following the rise of AI-enabled devices and the demand

for intelligent applications at the edge.

Having invested billions in spectrum, access technologies and

transport infrastructure in recent years, we expect

telecommunication providers to remain focused on the

monetization and cost optimization of their assets. They are

also considering divesting from passive infrastructure and

transitioning towards network sharing models, which might

reduce demand for network vendor equipment. We have also

seen some telecommunication providers adopt cloud-based

operational and business models, which may allow for new

market entrants, accelerate innovation and create market share

opportunities for technology leaders, including Nokia.

02
	Our customers<br><br>AI & Cloud
	Serviceable addressable market:<br><br>€17 billion, up 28% year-on-year.

AI & Cloud providers are building the physical infrastructure of

the AI economy at unprecedented speed. To meet rising demand,

they need ultra-high-performance connectivity to deliver high

capacity hyperscale connectivity across continents and within the

data center. Increasingly, they rely on Nokia to power their AI

factories in some of the most complex networks ever seen – nine

of the world’s top 10 hyperscalers use Nokia’s optical technology.

We estimate that in 2025, Nokia’s SAM related to AI & Cloud

providers was EUR 17 billion, having increased by 28%,

excluding the impact of changes in foreign currency exchange

rates from 2024 to 2025. This was driven by an acceleration of

data center networking roll-outs, especially by hyperscalers.

Our SAM for AI & Cloud providers consists mainly of optical and

IP networks, providing conduits for the data and compute that

power AI training and real-time inference. Within optical

networks, we expect that data center interconnect will drive

strong growth, while the rapid increase in data traffic required

by AI & Cloud providers will necessitate the adoption of higher

bit rate technologies in IP networks.

The largest global AI & Cloud providers are structurally important

parts of the telecommunications ecosystem. As well as building the

AI factories that enable the AI supercycle, they partner with

telecommunication providers to co-locate edge stacks on-premises

and they aim to run telecommunications network workloads on

their cloud infrastructure. As such, AI & Cloud providers are

customers, partners and potential competitors in some areas.

We forecast this market to grow at 26% CAGR until 2028, excluding

the impact of changes in foreign currency exchange rates.

| 23 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

03	Our customers<br><br>Mission Critical<br><br>Enterprise & Defense
	Serviceable addressable market:<br><br>€13 billion, up 11% year-on-<br><br>year.

Mission critical enterprises are those in which connectivity is a

strategic asset helping to deliver persistent connectivity for

operations that simply cannot fail. They include public utilities,

rail and transportation, emergency services and militaries.

Mission critical enterprises demand the best, most reliable, most

resilient connectivity on the market, often in challenging

locations and situations. From emergency response and grid

restoration to real-time train control, they require networks that

deliver always-on connectivity across wide and indoor areas,

ultra-low latency for instant command and automation, and

robust end-to-end security. This is why mission critical

enterprises are replacing siloed legacy systems with higher-

performance dual-use technologies, such as 5G, which can be

optimized for specific use cases while remaining more affordable

and delivering higher performance than bespoke technologies.

We see defense as a particularly important part of the mission

critical enterprise market. Militaries are accelerating their

spending, including on robust, resilient and secure

communications technologies, especially those that are dual-

use. Nokia is a trusted partner to the defense community and

an innovation leader in cloud, fixed and wireless networks. We

provide best-in-class dual-use technologies that can enhance

defense communications and accelerate the digital

transformation of defense assets.

We estimate that in 2025, Nokia’s SAM related to mission critical

enterprises was EUR 13 billion, having increased by 11%,

excluding the impact of changes in foreign currency exchange

rates from 2024 to 2025. This was driven by strong growth in

both Network Infrastructure, especially in data center networks,

and Mobile Networks.

We forecast this market to grow at 14% CAGR until 2028,

excluding the impact of changes in foreign currency exchange

rates.

04	Our customers<br><br>Technology<br><br>Licensees
	Total revenue: €1.5 billion<br><br>down 22% year-on-year.

Technology licensees are companies that have agreed licenses

to use Nokia’s intellectual property in their products. This

includes the licensing of Nokia’s industry leading patent

portfolio and the licensing of technologies for integration into

consumer devices.

The vast majority of Nokia Technologies’ revenue comes

from patent licensing. We have patent licensing agreements

with most of the world’s major smartphone vendors and

with most Western car makers.

In addition to mobile devices and automotive, we run patent

licensing programs for consumer electronics, video services and

the wider IoT domain.

In total, we have more than 250 licensees across all our

programs, including companies like Apple, Samsung, Lenovo,

and Mercedes-Benz.

| 24 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- | | Own manufacturingAs of 31 December 2025, the production capacity for sites owned by us is noted below: | | | --- | --- | | Country | Productive capacity, net (m2)(2) | | Finland | 11 500 | | India | 15 500 | | The United States | 2 300 | | The United States | 2 400 | | (1)We consider the production capacity of our manufacturing network to be sufficient to meet the requirements of our business. The extent of utilization of our manufacturing facilities varies from plant to plant and from time to time during the year. None of these facilities is subject to a material encumbrance. During 2025, there were no site disposals. During 2024, Nokia disposed of the following sites: 1) Calais: submarine cables (France), 61 000 m2 net productive capacity.2) Greenwich: submarine cables (United Kingdom), 11 000 m2 net productive capacity.3) Hannover: radio frequency systems (Germany), 23 500 m2 net productive capacity.4) Suzhou: radio frequency systems (China), 13 500 m2 net productive capacity.During 2023, Nokia disposed of the following sites: 1) Trignac: radio frequency systems (France), 7 300 m2 net productive capacity.2) Meriden: radio frequency systems (The United States), 31 000 m2 net productive capacity.3) Bydgoszcz: remanufacturing, product integration (Poland), 15 200 m2 net productive capacity.(2)Production capacity equals the total area allotted to manufacturing and to the storage of manufacturing-related materials.(3)Leased site.(4)In addition to the Allentown site owned by Nokia, as of February 2026, Nokia has leased an additional site in Allentown that is expected to expand the production capacity by approximately 1 800 m2. In addition to the above-mentioned sites, Nokia has in February 2026 completed the purchase of a previously leased facility in San Jose, California (the United States) on which a new Compound Semiconductor Wafer Fab is expected to begin production in 2027 and additional construction will continue to expand the capacity of the site through 2028. The productive capacity of the site is expected to reach 2 600 m2. Funding of the California expansion includes 40 million of the total 93 million in direct funding from the U.S. Department of Commerce under the CHIPS Act and other federal, state, and local incentives (including available investment tax credits). Up to 53 million of the CHIPS Act grant funding and federal (including available investment tax credits) and state incentives, may also be used for a potential project in Pennsylvania relating to photonics packaging and testing. For more details, please refer to Note 4.2. Property, plant and equipment in the consolidated financial statements. | |

All values are in US Dollars.

Our supply chain

Trusted relationships

Nokia’s diversified and sustainable supply chain is a strategic

asset for us, our customers and consumers of connectivity.

Our end-to-end operations include sourcing, demand and

supply planning, manufacturing, distribution and logistics. In

2025, we purchased over EUR 11 billion worth of products and

services from around 9 000 suppliers.

While the operating environment remained challenging in 2025,

we continued to develop risk and cost management capabilities,

robust partnerships and a regional approach.

Focus on risk and cost management

Demand for our products remains volatile, driven by macro-

economic conditions and growth in AI & Cloud infrastructure. To

address market fluctuations and supply-chain disruptions, we

work with customers to develop robust mid- and long-term

forecasts, enabling effective risk management, cost-efficiency

prioritization and enhanced resilience. Our rigorous inventory-

management practices mitigate the risk of excess stock.

We continued to develop our risk management capabilities,

supported by increased digitalization and automation.

Inventories and safety buffers were largely kept upstream on a

component level, increasing the flexibility to react to any

potential short-term product type changes.

Building resilience

We continuously optimize our manufacturing, distribution and

supplier networks, ensuring several manufacturing sources for

key volume products. We also leverage AI capabilities to better

develop our supply chain and factory network.

Our geographically dispersed manufacturing network consists

of both our own manufacturing (4% of the network, based on

number of sites) and contract manufacturing partners. Our

network is strategically located around the world, and each year

our spending percentage varies depending on regional demand.

In 2025, our spend spread was: Europe 28%, Asia Pacific,

Japan/India 44%, China 16% and the Americas 12%.

The Infinera acquisition gave Nokia the capability to build key

optical semiconductor components with its internal Indium

Phosphide (InP) wafer fab capability in California, US. InP

components are a key element of Optical transceivers and

transponders. Having capability in-house derisks a critical

element of our supply chain. In addition, Nokia has a site for the

advanced packaging and testing of these components.

Sustainability enablement and innovation

We expect suppliers to follow our Third-party Code of Conduct

and Nokia Supplier Requirements. These cover topics such as

environment, responsible minerals and modern slavery and are

embedded in our due-diligence and supplier support efforts.

In 2025, we implemented 788 supply chain audits. The findings

and corrective actions give us confidence that we are reducing

risks related to safety, labor and human rights. We established a

Sustainability criteria in our Supply Chain Finance framework,

benefitting suppliers with strong sustainability performance.

We are committed to cutting 50% of our absolute scope 1, 2

and 3 greenhouse gas emissions by 2030. We are also

committed to overall net-zero by 2040 across our value chain.

In 2025, we reached a 100% share of renewable electricity in

our own factories.

We have increased recycled content in mechanical parts and aim

to reach at least 50% recycled aluminum, copper, steel, and

polymerics by 2030. We further strengthened the traceability

and conflict-free status of relevant minerals in our supply chain.

25	Nokia Annual Report on Form 20-F 2025
Corporate governance statement	26
---	---
Regulatory framework	26
Main corporate governance bodies of Nokia	27
General Meeting of Shareholders	27
Board of Directors	28
Group Leadership Team and the President and CEO	40
Risk management, internal control and internal audit functions<br><br>at Nokia	44
Main procedures relating to insider administration	46
Auditor fees and services	46	Remuneration	47
---	---
Highlights	47
Remuneration Report 2025	48
Letter from the Chair of the Personnel Committee of the Board	48
Introduction	50
Pay for performance	51
Global peer group	51
Remuneration of the Board of Directors	52
Remuneration of the President and CEO	53
Remuneration Policy	58
The updated Remuneration Policy for the Board of Directors	58
The updated Remuneration Policy for the President and CEO	59
Remuneration governance	62
Remuneration of the Nokia Group Leadership Team in 2025	63

| 26 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Corporate governance statement

“Strong governance is the foundation of Nokia’s long-term success. In 2025, our Board of Directors continued to drive strategic

direction as well as support and oversee management performance, promoting transparency and accountability across all operations.”

Highlights in our corporate governance during 2025 ▪Justin Hotard was announced as Nokia’s new President and CEO, joining us on 1 April. Hotard has broad experience with global technology companies, driving technology leadership, innovation and revenue growth. ▪In March 2025, we published Nokia’s first sustainability statement aligned with the EU Corporate Sustainability Reporting Directive and Finnish regulation, marking a significant step in our ESG journey. ▪At the 2025 Annual General Meeting (AGM) our shareholders reaffirmed their support for the Board’s proposals with a record high overall vote turnout. Our shareholders were also able to follow the meeting via webcast and submit verbal and written questions. ▪We have continued our proactive stance on AI governance through our robust AI governance framework at Nokia. We have defined our guiding AI principles through Nokia Bell Labs, and mobilized our cross-functional teams to ensure readiness for every regulatory milestone. ▪We have had the pleasure to engage with several of our largest shareholders during 2025 to discuss Nokia’s sustainability, remuneration and governance practices, and their expectations in these areas. We also welcomed NVIDIA as our shareholder in connection with our strategic partnership agreement, reinforcing our commitment to innovation and collaboration.

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 2025 (the “Finnish Corporate Governance Code”).

Regulatory framework

Our corporate governance practices comply with Finnish laws

and regulations, our Articles of Association approved by the

shareholders and our corporate governance guidelines

(“Corporate Governance Guidelines”) adopted by the Board of

Directors. The Corporate Governance Guidelines reflect our

commitment to strong 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.

We follow the rules and recommendations of Nasdaq Helsinki

due to the listing of our shares on this exchange (ticker code

“NOKIA”). During 2025 we also complied with the rules of

Euronext Paris prior to delisting our shares on 31 December

Furthermore, due to the listing of our American

Depositary Shares on the New York Stock Exchange (NYSE)

(ticker code “NOK”) and our registration under the U.S.

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.

To the extent compliance with any non-domestic rules would

conflict with the laws of Finland, we are obliged to comply with

Finnish laws and applicable regulations. There are no significant

differences in the corporate governance practices applied by

Nokia compared with those applied by U.S. companies under the

NYSE corporate governance standards with the exception that

Nokia complies with Finnish law with respect to the approval of

equity compensation plans. Under Finnish law, stock option

plans require shareholder approval at the time of their launch.

All other plans that include the delivery of company stock in the

form of newly issued shares or treasury shares require

shareholder approval at the time of delivery of the shares

unless shareholder approval has been granted through an

authorization to the Board, a maximum of five years earlier. The

NYSE corporate governance standards require that equity

compensation plans are approved by the company’s

shareholders. Nokia aims to minimize the necessity for, or

consequences of, conflicts between the laws of Finland and

applicable non-domestic corporate governance standards.

In addition to the Corporate Governance Guidelines, the

Committees of the Board have adopted charters that define

each Committee’s main duties and operating principles. The

Board has also adopted the Code of Conduct that applies to

directors, executives, and employees of Nokia, as well as

employees of Nokia’s subsidiaries and affiliated companies

(such as joint ventures) in which Nokia owns a majority of the

shares or exercises effective control. Furthermore, the Board

has adopted the Code of Ethics and Executive Officer Clawback

Policy applicable to our key executives, including the President

and CEO, CFO and Corporate Controller.

| 27 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Our main corporate governance bodies

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, 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 authorization for

the Board to distribute dividend or other assets, 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 and the sustainability reporting assurer. The

Remuneration Policy is presented to the general meeting at

least every four years and the Remuneration Report is

presented annually. Resolutions of the general meeting

regarding the policy and the report are advisory in nature.

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.

The Finnish Companies Act was amended in 2022 to enable

limited liability companies to hold hybrid and virtual-only

general meetings. A virtual general meeting, as defined by the

Finnish Companies Act, is a meeting held without a physical

meeting venue, where shareholders must be able to exercise

their shareholder rights in full by virtual means, including

voting in real time and asking questions orally during the

meeting.

The Finnish legislation can be considered a leading example of

protecting shareholders’ rights in virtual general meetings. In

the future, virtual general meetings are expected to improve

the position of nominee-registered shareholders residing

outside of Finland, who may have been unable to attend the

general meeting in person or be represented by proxy. The

reduced carbon footprint is also one of the benefits of virtual

general meetings.

Annual General Meeting 2025 and 2026

The Annual General Meeting 2025 took place at Finlandia Hall,

Helsinki, on 29 April 2025. We were pleased to see the high

number of votes cast representing approximately 61.4% of all

outstanding shares and votes. For the fourth consecutive year,

the turnout for the vote stood at a record-high level.

Corporate governance framework
	General Meeting<br><br>of Shareholders
External Audit<br><br>Sustainability<br><br>Assurance	Board of Directors<br><br>Audit, Corporate Governance and Nomination,<br><br>Personnel, Strategy, Technology Committees	Internal Audit
	President and CEO<br><br>Group Leadership Team

A total of 106 746 shareholders representing approximately

3 304 million shares and 58.9% of all the shares and votes in

the Company participated the Annual General Meeting. On the

other hand, we once more saw a lower number of shareholders

attending in person. To facilitate shareholder participation and

digital options to follow the meeting, the Company offered

the opportunity to cast votes in advance and to follow the

meeting and ask questions through a live webcast, both in

writing and orally.

Nokia Corporation’s Annual General Meeting 2026 is planned to

be held on 9 April 2026. The Board’s proposals to the Annual

General Meeting 2026 were published on 29 January 2026.

| 28 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Board of Directors

The operations of Nokia are managed under the direction of the

Board, within the framework set by the Finnish Companies Act,

Nokia’s Articles of Association and any complementary rules of

procedure as defined by the Board, such as the Corporate

Governance Guidelines and the charters of the Board’s

Committees.

Election of the Board of Directors

Pursuant to our Articles of Association, we have a Board that is

composed of a minimum of seven and a maximum of 12 members.

The members of the Board are elected at least annually at each

Annual General Meeting. The candidates are considered individually

and those receiving the most votes shall be elected pursuant to

the Finnish Companies Act. The term of the Board members begins

at the close of the general meeting at which they were elected and

expires at the close of the following Annual General Meeting.

The Annual General Meeting convenes by 30 June annually.

Our Board’s leadership structure consists of a Chair and Vice

Chair elected annually by the Board and confirmed by the

independent directors of the Board upon the recommendation

of the Corporate Governance and Nomination Committee. The

Chair of the Board has certain specific duties as stipulated by

Finnish law and our Corporate Governance Guidelines. The Vice

Chair assumes the duties of the Chair of the Board in the event

the Chair is prevented from performing his or her duties.

The independent directors of the new Board confirm the

election of the members and chairs for the Board’s Committees

from among the Board’s independent directors upon the

recommendation of the Corporate Governance and Nomination

Committee and based on each Committee’s qualification

standards. These elections take place at the Board’s assembly

meeting following the general meeting.

The Corporate Governance and Nomination Committee aims to

continually renew the Board to have an efficient Board of

international professionals with a mix of skills, experience and

other personal qualities in line with the diversity principles

established by the Board. The Committee considers potential

director candidates based on the short-term and long-term

needs of the Company. In the process of identifying and selecting

the candidates matching these needs and desired profiles, the

Committee engages recruitment firms and external advisers.

Board independence

In accordance with the Corporate Governance Guidelines

adopted by the Board of Directors, the Nokia Board shall have a

majority of directors who meet the criteria for independence as

defined by the Finnish Corporate Governance Code and the

rules of the NYSE. All members of the Board’s Audit, Personnel,

Corporate Governance and Nomination Committees as well as

the majority of the Strategy and Technology Committees shall

be independent Directors under the same criteria.

The Board will monitor its compliance with these requirements

for director independence on an ongoing basis. Each

independent director is expected to notify the Chair of the

Corporate Governance and Nomination Committee, as soon as

reasonably practicable, in the event that his or her personal

circumstances change in a manner that may affect the Board’s

evaluation of such director’s independence. The Board of

Directors evaluates the independence of its members annually

and, in addition to this, on a continuous basis with the assistance

of the Corporate Governance and Nomination Committee.

Board composition

The Board has adopted diversity principles, demonstrating our

commitment to promoting a well-balanced Board composition.

These principles are embedded in our processes and practices

for identifying and proposing new candidates for the Board, as

well as for the re-election of current members.

For Nokia, Board composition is not static, but evolves over time

based on the relevant business objectives and future needs. We

view Board diversity as one of factors that strengthen the

Board’s overall effectiveness rather than an end in itself.

Diversity of our Board is considered from a number of aspects

including, but not limited to, skills and experience, tenure, age,

nationality, cultural and educational backgrounds, gender, as

well as other individual qualities.

| 29 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Current members of the Board of Directors

The Annual General Meeting held on 29 April 2025 elected ten

members to the Board for a term ending at the close of the next

Annual General Meeting. Timo Ahopelto, Sari Baldauf, Elizabeth

Crain, Thomas Dannenfeldt, Lisa Hook, Mike McNamara, Thomas

Saueressig, and Kai Öistämö were re-elected as Board

members. Pernille Erenbjerg and Timo Ihamuotila were elected

as new Board members. Following the meeting, the Board re-

elected Sari Baldauf to serve as Chair and Timo Ihamuotila as

Vice Chair of the Board for the same term.

In the current Board composition, 40% of the Board members

are female. There are currently five different nationalities and a

rather wide age and tenure range represented on the Board.

The current members of the Board are all non-executive and for

the term that began at the Annual General Meeting 2025, all

Board members were determined to be independent of Nokia

and its significant shareholders under the Finnish Corporate

Governance Code and the NYSE rules, as applicable.

In addition to biographical information of the Board members,

the table in the upper right corner sets forth the number of

shares and American Depositary Shares (ADSs) held by the

Board members. At 31 December 2025, they held a total of

1 092 401

shares and ADSs in Nokia, representing

approximately

0.02

% of our total shares and voting rights

excluding shares held by the Nokia Group.

Each Board member has a unique skill set that supports Nokia's

business. The primary areas of expertise of the current and

proposed Board members are highlighted in the skills matrix

shown to the right.

Biographical details of the Board members

	Gender	Year of Birth	Nationality	Tenure(1)	Independent of the<br><br>company and major<br><br>shareholders	Shares(2)	ADSs(2)
Sari Baldauf (Chair)	Female	1955	Finnish	7	Independent	385 046
Timo Ihamuotila (Vice Chair as of 29<br><br>April 2025)	Male	1966	Finnish	0	Independent	119 624
Timo Ahopelto	Male	1975	Finnish	2	Independent	62 082
Elizabeth Crain	Female	1964	American	2	Independent		67 467
Thomas Dannenfeldt	Male	1966	German	5	Independent	166 802
Pernille Erenbjerg	Female	1967	Danish	0	Independent	17 840
Lisa Hook	Female	1958	American	3	Independent		78 290
Mike McNamara	Male	1964	Irish	1	Independent	42 664
Thomas Saueressig	Male	1985	German	3	Independent	74 322
Kai Öistämö	Male	1964	Finnish	3	Independent	78 264
(1)Terms as Nokia Board member before the Annual General Meeting on 29 April 2025.<br><br>(2)The number of shares or ADSs includes shares and ADSs received as director compensation as well as shares and ADSs acquired through other means. Stock options or other<br><br>equity awards that are deemed as being beneficially owned under the applicable SEC rules are not included.

Experience and primary skills of the Board members

	Business<br><br>Exec. role with<br><br>P&L<br><br>responsibility	External<br><br>boardroom<br><br>roles/<br><br>Governance	Finance and<br><br>accounting	Legal/Public<br><br>policy/<br><br>Compliance	Telecommunication<br><br>providers market<br><br>segment	Enterprise<br><br>market<br><br>segment	Technology	Cybersecurity	Environmental<br><br>/Social issues
Current Board<br><br>members
Sari Baldauf	✔	✔		✔	✔		✔		✔
Timo Ihamuotila	✔	✔	✔	✔		✔	✔
Timo Ahopelto	✔	✔				✔	✔	✔
Elizabeth Crain	✔	✔	✔	✔
Thomas Dannenfeldt		✔	✔		✔	✔	✔
Pernille Erenbjerg	✔	✔	✔		✔		✔	✔	✔
Lisa Hook	✔	✔		✔	✔	✔	✔	✔
Mike McNamara	✔	✔				✔	✔	✔
Thomas Saueressig	✔	✔			✔	✔	✔	✔	✔
Kai Öistämö	✔	✔			✔		✔	✔	✔
Proposed new Board<br><br>member
Meredith Whittaker	✔	✔		✔			✔	✔

| 30 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Director time commitments

The Corporate Governance and Nomination Committee

monitors closely the time commitments of the Board members

and annually reviews the Directors’ attendance rate at the

Board and Committee meetings to ensure they are able to

devote the appropriate time to the Company to carry out their

duties and responsibilities.

The Corporate Governance Guidelines of the Board include

numerical limits and a process for pre-clearance of new roles in

public companies. Directors should not serve on more than four

other boards of public companies in addition to the Nokia

Board, and on no more than three other boards of public

companies in addition to the Nokia Board, in cases where they

serve as board chair or lead independent director outside the

Nokia Board. The Audit Committee members should not serve

on more than two other audit committees of public companies

in addition to the Nokia Audit Committee.

No positions in excess of these limits may be held without prior

consent by the Chair of the Board and the Chair of the

Corporate Governance and Nomination Committee determining

that such positions would not impair the Director’s service on

the Nokia Board or Audit Committee.

The Corporate Governance and Nomination Committee will

annually, ahead of preparing the proposal on the Board

composition, review and assess the Directors’ current and

planned time commitments outside the Company to seek

affirmation that all Directors acknowledge the time

commitment principles set forth in the Corporate Governance

Guidelines of the Board.

The Committee also reviews under its related guidelines and

procedures the proposed new Director candidates’ time

commitments during the proposed term to ensure that they are

able to dedicate sufficient time to their responsibilities on the

Nokia Board.

Proposed members of the Board of Directors

Proposals of the Board of Directors to the Annual General

Meeting 2026 were published on 29 January 2026. On the

recommendation of the Corporate Governance and Nomination

Committee, the Board proposes to the Annual General Meeting

that the number of Board members be ten. The Board Chair Sari

Baldauf has informed the Committee that she will no longer be

available to serve on the Nokia Board of Directors after the

Annual General Meeting.

Consequently, on the recommendation of the Corporate

Governance and Nomination Committee, the Board proposes

that the following nine current Board members be re-elected as

members of the Nokia Board of Directors for a term ending at

the close of the next Annual General Meeting: Timo Ahopelto,

Elizabeth Crain, Thomas Dannenfeldt, Pernille Erenbjerg, Lisa

Hook, Timo Ihamuotila, Mike McNamara, Thomas Saueressig and

Kai Öistämö.

Furthermore, the Board proposes, on the recommendation of

the Corporate Governance and Nomination Committee, that

Meredith Whittaker, a United States citizen and President of

Signal Technology Foundation, be elected as a new member of

the Board for a term ending at the close of the next Annual

General Meeting. If elected, Ms. Whittaker is expected to bring

valuable experience in artificial intelligence, digital risk, and

technology governance, thereby strengthening the Board’s

oversight of emerging technologies.

The Corporate Governance and Nomination Committee will

propose in the assembly meeting of the new Board of Directors

that Timo Ihamuotila be elected to serve as Chair of the Board

and Thomas Saueressig be elected to serve as Vice Chair of the

Board, subject to their election to the Board of Directors.

The Board composition proposed to the Annual General Meeting

2026 has representation of five nationalities and 40% of the

proposed members are female.

All Board member candidates, apart from Meredith Whittaker,

have been determined to be independent of the Company and

its significant shareholders for the term beginning from the

Annual General Meeting 2026 under the Finnish Corporate

Governance Code and the rules of the NYSE. Ms. Whittaker has

agreed to lead a strategic advising effort for Nokia Bell Labs,

Nokia’s global research arm, for a fixed fee and period of 12

months. Due to the research-focused advisory role, Ms.

Whittaker has been determined non-independent of the

Company. Nokia has strict and well-defined conflict-mitigation

measures in place, including the exclusion of Ms. Whittaker from

any business activities and operational decisions. Further, if

elected, Ms. Whittaker will refrain from joining Board

Committees other than the Technology Committee. Any

possible changes impacting the Board candidates’

independence would be assessed separately as at the date of

the Annual General Meeting.

Nokia is proud to continue to be among the first Finnish listed

companies providing its shareholders with the opportunity to

consider each Director candidate individually since our Annual

General Meeting 2023.

| 31 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Biographical details of our current Board members

C	P	S	C	S	P	T	P	S
Chair Sari Baldauf			Vice Chair Timo Ihamuotila		Timo Ahopelto		Elizabeth Crain
b. 1955			b. 1966		b. 1975		b. 1964

Chair of the Nokia Board since 2020.

Nokia Board member since 2018.

Member of the Corporate Governance

and Nomination Committee, the

Personnel Committee and the Strategy

Committee.

Master of Business Administration and

Bachelor of Science, Helsinki School of

Economics and Business

Administration, Finland. Honorary

doctorates in Technology (Helsinki

University of Technology, Finland) and

Business Administration (Turku School

of Economics and Business

Administration and Aalto University

School of Business, Finland).

Executive Vice President and General

Manager, Networks Business Group,

Nokia 1998–2005. Various executive

positions at Nokia in Finland and in the

United States 1983–1998.

Member of the Board of Directors of

the Finnish Climate Leadership

Coalition (CLC). Senior Advisor of DevCo

Partners Oy.

Member of the Board of Technology

Industries of Finland 2021–2023. Member

of the Board of Directors of Aalto

University 2018–2023. Member of the

Supervisory Board of Mercedes-Benz

Group AG 2008–2023. Member of the

Supervisory Board of Deutsche Telekom

AG 2012–2018. Chair of the Board of

Directors of Fortum Corporation 2011–

Member of the Board of Directors

of Akzo Nobel 2012–2017.

Vice Chair of Nokia Board since 2025.

Nokia Board member since 2025. Chair

of the Corporate Governance and

Nomination Committee and member of

the Strategy Committee.

Licentiate of Science (Finance), Helsinki

School of Economics, Finland. Master of

Science (Economics), Helsinki School of

Economics, Finland.

Chief Financial Officer and Member of the

Group Executive Committee of ABB Ltd,

2017–2026 (until 31 Jan 2026). Executive

Vice President and Chief Financial Officer,

Nokia 2009–2016, member of the Nokia

Group Leadership Team 2007–2016 and

Interim President of Nokia between

September 2013 and May 2014.

Executive Vice President, Sales and

Markets, Nokia 2008–2009. Executive Vice

President, Sales and Portfolio

Management, Mobile Phones, Nokia 2007.

Senior Vice President, CDMA Business

Unit, Mobile Phones, Nokia 2004–2007.

Vice President, Finance, Corporate

Treasurer, Nokia 2000–2004. Director of

Corporate Finance, Nokia 1999–2000.

Vice President of Nordic Derivatives Sales,

Citibank plc 1996–1999. Manager of

Dealing & Risk Management, Nokia 1993–

Analyst, Assets and Liability

Management, Kansallis-Osake-Pankki

1990–1993.

Member of the Board of Directors, Kone

Oyj. Member of the Board of Directors,

Oras Invest Oy. Member of the Board of

Directors, Uponor Oyj 2013–2017.

Founding Partner of Lifeline Ventures.

Nokia Board member since 2023.

Member of the Personnel Committee

and the Technology Committee.

Master’s degree in Industrial

Management, Helsinki University of

Technology, Finland.

Head of Strategy and Business

Development, Blyk 2006–2009.

Founding CEO and Vice President of

Worldwide Commercial Operations, CRF

Health 2000–2006. Consultant,

McKinsey & Company 1999–2000.

Chair of the Board of Directors, Canatu

Plc (former Lifeline SPAC I Plc). Chair of

the Board, Finnish Startup Community.

Various other board positions in private

companies.

Member of the Board of Directors,

Solidium Oy 2017–2025. Member of

the Board of Directors, Digital

Workforce Services Plc 2016–2025.

Member of the Board of Finnish

Business and Policy Forum EVA and

Research Institute for Finnish Economy

(ETLA) 2015–2024. Member of the

Board of Directors, Tietoevry

Corporation 2017–2023. Chair of the

Board, Slush Conference 2018–2023

and member of the Board 2013–2018.

Member of the Board, Business Finland

2014–2020. Member of the Board,

Startup Foundation 2015–2018.

Committee Key
	A	udit
	C	orporate Governance and Nomination
	P	ersonnel
	S	trategy
	T	echnology

Nokia Board member since 2023. Chair

of the Strategy Committee and

member of the Personnel Committee.

MBA, the Wharton School at the

University of Pennsylvania,

Pennsylvania, United States. Bachelor

of Science in Economics, Arizona State

University, Arizona, United States.

Advisory Partner, the Consello Group.

Chief Operating Officer and Founding

Partner, Moelis & Company 2007–2023.

Managing Director, Office of the CEO at

UBS Investment Bank 2005–2007. Chief

Operating Officer and Chief

Administrative Officer, the UBS

Investment Banking Department

Americas franchise 2001–2005.

Investment Principal, McCown De

Leeuw & Company 2000–2001.

Investment Principal, Morgan Stanley

Capital Partners 1997–2000. Vice

President, Investment Banking, Merrill

Lynch & Co. 1994–1997. Associate,

Investment Banking, J.P. Morgan

Securities 1992–1994. Analyst, Merrill

Lynch & Co. 1988–1990.

Member of the Board of Directors and

Chair of the Audit Committee, Core

Scientific, Inc. Trustee Emeritus, The

Royal Academy Trust, London.

Member of the Board of Directors,

Exscientia Plc 2021–2024. Member of

the Board of Directors, Moelis &

Company 2017–2021.

| 32 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Biographical details of our current Board members continued

A	P	A	C	A	S
Thomas Dannenfeldt		Pernille Erenbjerg		Lisa Hook
b. 1966		b. 1967		b. 1958

Nokia Board member since 2020. Chair

of the Personnel Committee and the

Audit Committee.

Degree in Mathematics, University of

Trier, Germany.

Chief Financial Officer, Deutsche

Telekom AG 2014–2018. Chief Financial

Officer, Deutsche Telekom AG’s

German operations 2010–2014.

Various operational positions, Deutsche

Telekom AG 1992–2010.

Member of the Board of Directors and

Chair of the Compensation Committee,

T-Mobile US, Inc.

Chair of the Supervisory Board,

CECONOMY AG 2021–2025. Member of

the Advisory Board, axxessio GmbH

2020–2025. Member of the Board of

Directors, T-Mobile US, Inc. 2013–2018.

Member of the Board of Directors, Buy-

In 2013–2018. Chair of the Board of

Directors, T-Systems International

2013–2018. Chair of the Board of

Directors, EE Ltd. 2014–2016.

Nokia Board member since 2025.

Member of the Audit Committee and

the Corporate Governance and

Nomination Committee.

Master of Science in Economics, the

Copenhagen Business School, Denmark.

Group CEO and President, TDC Group

2015–2018. Group CFO and Deputy

CEO, TDC Group 2011–2015. Executive

Vice President, TDC Group 2003–2011.

Equity Partner, Deloitte 2002–2003.

CPA, Arthur Andersen 1987–2002.

Member of the Board of Directors and

Chair of the Audit Committee, Genmab

A/S. Member of the Board of Directors

and Chair of the Audit Committee, RTL

Group SA. Chair of the Board of

Directors, KK Wind Solutions A/S.

Member of the Board of Directors,

GlobalConnect A/S.

Member of the Board of Directors,

Millicom S.A. 2019–2024. Chair of the

Board of Directors, Viaplay Group AB

(publ) 2021–2023 and Board member

2020–2021. Member of the Board of

Directors, Nordea Bank Oyj 2017–2021.

Member of the Board of Directors,

DFDS A/S 2014–2018. Member of the

Board of Directors, Royal Danish

Theatre 2011–2015.

Adjunct professor at Copenhagen

Business School.

Committee Key
	A	udit
	C	orporate Governance and Nomination
	P	ersonnel
	S	trategy
	T	echnology

Nokia Board member since 2022.

Member of the Audit Committee and

the Strategy Committee.

Juris Doctorate, Dickinson School of

Law at Pennsylvania State University,

Pennsylvania, United States. Bachelor’s

degree in Public Policy, Duke University,

North Carolina, United States.

President and CEO, Neustar, Inc. 2010–

COO, Neustar, Inc 2008–2010.

President and CEO, SunRocket, Inc.

2006–2007. Executive positions,

America Online, Inc. 2000–2004.

Previous positions as Partner, Brera

Capital Partners; managing director,

Alpine Capital Group, LLC.; various

executive positions, Time Warner, Inc.;

legal adviser to the Chairman of the

Federal Communications Commission;

and General Counsel, the Cable Group

at Viacom International, Inc.

Member of the Board of Directors, FIS

Global Inc. Lead Independent Director

of the Board of Directors, Philip Morris

International. Member of the Board of

Directors, Zayo Group. Chair of

Advisory Board, Trilantic Capital

Partners. Member of the US National

Security Telecommunications Advisory

Committee since 2012.

Member of the Board of Directors of

Ritchie Bros. Auctioneers Inc. 2021–2023;

Ping Identity Holding Corp. 2019–2022;

Partners Group Holdings 2020–2021;

Unisys Corp. 2019–2021; Neustar, Inc.

2010–2019; and RELX Plc 2006–2016.

| 33 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Biographical details of our current Board members continued

A	T	C	T	S	T
Mike McNamara		Thomas Saueressig		Kai Öistämö
b. 1964		b. 1985		b. 1964

Nokia Board member since 2024.

Member of the Audit Committee and

the Technology Committee.

Bachelor of Engineering, University

College Dublin, Ireland.

Strategic Advisor, Target Corporation

2022–2023. Executive Vice President

and Chief Information Officer, Target

Corporation 2015–2022. Chief

Information Officer, Tesco 2011–2015.

Director of Operations Development

and IT, Tesco 2006–2011. Chief

Technology Officer Tesco.com, Tesco

1999–2006. Senior Manager, Accenture

1991–1998. Computer Programmer,

British Telecom 1989–1991.

Member of the Board of Directors,

Hawaiian Holdings, Inc. 2020–2024.

Member of the Executive Board of SAP

SE and Global Head of Customer

Services & Delivery Board. Nokia Board

member since 2022. Member of the

Corporate Governance and Nomination

Committee and the Technology

Committee.

Degree in Business Information

Technology, University of Cooperative

Education in Mannheim, Germany. Joint

Executive MBA from ESSEC, France and

Mannheim Business School, Germany.

Global Head of Product Engineering,

SAP SE 2019–2024. Chief Information

Officer, SAP SE 2016–2019. Vice

President, Global Head of IT Services of

SAP SE 2014–2016. Previous positions

at SAP SE in Germany since 2007,

including assignment in the SAP Labs

Silicon Valley in Palo Alto, California,

United States.

Member of the Young Global Leaders of

the World Economic Forum. Member of

the Industry Advisory Board of the

Munich Institute of Robotics and

Machine Intelligence (MIRMI).

Committee Key
	A	udit
	C	orporate Governance and Nomination
	P	ersonnel
	S	trategy
	T	echnology

President and CEO of Vaisala

Corporation. Nokia Board member

since 2022. Chair of the Technology

Committee and member of the

Strategy Committee.

PhD in computer science, Tampere

University of Technology, Finland.

Chief Operating Officer of InterDigital,

Inc. 2018–2020. Executive Partner of

Siris Capital Group 2016–2018. EVP,

Chief Development Officer at Nokia

2010–2014. EVP, Devices at Nokia

2008–2010. EVP, Mobile Phones

Business Group at Nokia 2006–2008.

Several previous positions at Nokia

1991–2006.

Venture Partner of Kvanted Oy.

Chairman of the Board, Fastems Group

2014–2022. Member of the Board of

Directors, Sanoma Group 2010–2021.

Chairman of the Board, Helvar Oy Ab

2014–2020. Member of the Board of

Directors, Mavenir Plc 2017–2018.

Member of the Board of Directors,

Digia / Qt Group Oyj 2015–2018.

Member of the Board of Directors,

InterDigital, Inc. 2015–2018. Member of

the Board of Directors, oikian solutions

Oy 2014–2018. Chairman of the Board,

Tampere University 2013–2017.

Chairman of the Board of Directors,

Tekes 2012–2014. Member of the

Board of Directors, Nokian Tyres plc

2008–2010.

| 34 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Operations of the Board of Directors

The Board represents and is accountable to the shareholders of

Nokia. While its ultimate statutory accountability is to the

shareholders, the Board also takes into account the interests of

Nokia’s other stakeholders. The Board’s responsibilities are

active, and include the responsibility to evaluate the strategic

direction of Nokia, its management policies and the

effectiveness of the implementation of such by the

management on a regular basis.

It is the responsibility of the members of the Board to act in

good faith and with due care, so as to exercise their business

judgment on an informed basis, in a manner that they

reasonably and honestly believe to be in the best interests of

Nokia and its shareholders. In discharging this obligation, the

members of the Board must inform themselves of all relevant

information reasonably available to them. The Board and each

Board Committee also has the power to appoint independent

legal, financial or other advisers as they deem necessary. The

Company will provide sufficient funding to the Board and to

each Committee to exercise their functions and provide

compensation for the services of their advisers.

The Board has the responsibility for appointing and discharging

the President and Chief Executive Officer, Chief Financial Officer

and Chief Legal Officer. The Board is ultimately responsible for,

and its duties include, monitoring and reviewing Nokia’s

financial reporting process, the effectiveness of related control

and audit functions and the independence of Nokia’s external

auditor, as well as monitoring the Company’s statutory audit.

The Board’s responsibilities also include overseeing the

structure and composition of our top management and

monitoring legal compliance and the management of risks

related to our operations. In doing so, the Board may set annual

ranges and/or individual limits for capital expenditures,

investments and divestitures and other financial and non-

financial commitments that may not be exceeded without a

separate Board approval.

In risk management, the Board’s role includes risk analysis and

assessment in connection with financial, strategy and business

reviews, updates and decision-making proposals. Risk

management policies and processes are an integral part of

Board deliberations and risk-related updates are provided to

the Board on a recurring basis. For a more detailed description

of our risk management policies and processes, refer to the

“Risk management, internal control and internal audit functions

at Nokia — Risk management principles” section.

The Board approves and the independent directors of the Board

confirm the compensation and terms of employment of the

President and CEO, subject to the requirements of Finnish law,

upon the recommendation of the Personnel Committee of the

Board. The compensation and terms of employment of the

other Group Leadership Team members are approved by the

Personnel Committee upon the recommendation of the

President and CEO.

Board oversight of environmental and social activities and

governance practices

Under Nokia’s Corporate Governance Guidelines, the Board

evaluates Nokia’s environmental and social activities and

governance practices, related risks and target setting, as well as

their implementation and effectiveness across the Company.

In 2025, the Board reviewed the progress and key milestones

for the sustainability targets, sustainability results for 2024,

sustainability-related risks and opportunities, the evolving

sustainability requirements and expectations, investor feedback

and Nokia’s approach to related disclosures. The Board also

provided direction on environmental and supply‑chain priorities,

the refreshed social impact strategy, and company‑wide

engagement and enablement efforts. Additionally, in January

2025, the Board approved the targets related to climate change

in the long-term incentive plan for 2025 and approved the

CEO’s targets on health and safety and diversity which are

included in his short-term incentive plan for 2025.

The Board Committees monitor ESG developments and

activities in the Company in their respective areas of

responsibilities.

The Audit Committee reviews sustainability disclosures annually,

as well as the information on the use of conflict minerals in

Nokia’s products presented in the annual reports and regulatory

filings. During 2025, the Audit Committee’s responsibilities

included the oversight of sustainability reporting, including the

double materiality assessment, regulatory developments

related to mandatory sustainability related disclosures, as well

as oversight of the ethics and compliance program.

The Personnel Committee oversees human capital

management, including personnel policies and practices related

to Nokia’s culture, physical safety, employee well-being,

workforce composition, recruiting, development and retention.

In 2025, the Committee focused on workforce demographics

and conducted a people risk review, including physical safety,

employee survey results and succession planning.

The Personnel Committee recommended that the Board

continue to include GHG emission reduction as a metric in the

long-term incentive plan. Additionally, the Committee

emphasized the importance of fostering a strong health and

safety culture and maintaining workforce diversity. To reinforce

accountability, the Personnel Committee recommended that

the Board retain discretion to make downward adjustments to

short-term incentives if company performance in these areas

falls short during the annual incentive period.

The Corporate Governance and Nomination Committee

assesses and advises the Board on ESG-related activities and

practices, aiming to enhance the governance structure

supporting them.

The Technology Committee reviews how the Company’s ESG

strategy embeds into its technology strategy and roadmaps.

| 35 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Board oversight of cybersecurity

Nokia group-level security is set up in four domains: product,

service, information, and customer security. While the oversight of

security risks and their management, including cybersecurity, is a

Board level responsibility in the Company, the detailed reviews

of the different security domains are allocated to the

Committees of the Board. These Committees are responsible for

monitoring and assessing security, including cybersecurity-

related risks and reporting to the Board in their respective areas

of responsibilities. The responsibilities of the Audit Committee

include oversight of the management and processes related to

IT and services security risks and maturity, including security-

related controls, compliance, incident process, disclosures and

risk management. The Technology Committee oversees product

and customer security risk management. The Committees

report to the Board on a regular basis and prepare

recommendations to the Board, whenever deemed necessary.

The Board also receives regular updates on cybersecurity.

Board oversight of Artificial Intelligence (AI)

The proliferation of AI technologies is creating new

opportunities for innovation. To ensure the responsible use of

AI, particularly with respect to ethics, privacy, and security, we

have established a comprehensive AI governance framework at

Nokia, including a central steering committee and a separate AI

governance board for group-level policies and procedures,

incident reporting, coordination and related communication.

The Board’s oversight of AI development is based on principles

similar to those we apply to other advanced technologies. The

Technology Committee of the Board has reviewed the AI

governance framework before its adoption and is responsible

for overseeing that compliance with all relevant regulatory

frameworks for AI has been effectively arranged. The

Technology Committee will also monitor and stay informed on

the progress and challenges of using AI, both at a strategic and

operational level. The Technology Committee reports to the

Board on AI governance at Nokia and on AI-related topics on a

regular basis. In carrying out this oversight, the Board and the

Technology Committee are supported by their relevant

technology, data and security expertise and access to internal

and external experts. This enables the Board to effectively

assess AI‑related opportunities and risks, including ethical,

regulatory and security considerations, and to appropriately

challenge management.

| 36 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Board evaluation

In line with our Corporate Governance Guidelines, the Board

conducts a comprehensive annual performance evaluation,

which also includes evaluation of the Board Committees’ work,

the Board and Committee Chairs and individual Board members.

The Board evaluation is conducted as a self-evaluation, typically

with a detailed questionnaire, while an external evaluator is

periodically engaged. Feedback is also requested from selected

members of management as part of the Board evaluation

process. The questions aim to measure and elicit feedback on

the processes, structure, accountability, transparency, and

effectiveness of the Board and to gain an overview of the issues

that are areas of excellence, areas where the Board thinks

greater focus is warranted and determining areas where

performance could be enhanced.

Each year, the results of the evaluation are discussed and

analyzed by the entire Board and improvement actions are

agreed based on such discussions. In 2025, the evaluation

process was carried out as a thorough self-evaluation for a third

consecutive year by using an external evaluation platform that

included both numeric assessments and the possibility to

provide more detailed written comments. The questionnaire

comprised areas such as Nokia purpose and strategy, Board

agenda and meetings, and Board composition and dynamics, as

well as information, reporting and risk management.

Meetings of the Board of Directors

The Board of Directors constitutes a quorum if more than half

of its members are present. The Board held 23 meetings

excluding Committee meetings during 2025. In total 14 (64%)

of these meetings were regular meetings in person or by video

connection. The other nine meetings were held in writing.

Directors’ attendance at the Board and Committee meetings in 2025 is set forth in the table below:
	Board meeting attendance		Board and Committee meeting<br><br>attendance(1)
Member	Meetings	%	Meetings	%
Sari Baldauf (Chair)	23/23	100%	41/41	100%
Timo Ihamuotila (Vice Chair as of 29 April 2025)	12/14	86%	19/21	90%
Søren Skou (Vice Chair until 29 April 2025)	9/9	100%	13/15	87%
Timo Ahopelto	22/23	96%	32/33	97%
Elizabeth Crain	23/23	100%	35/35	100%
Thomas Dannenfeldt	22/23	96%	36/38	95%
Pernille Erenbjerg (as of 29 April 2025)(2)	10/14	71%	16/21	75%
Lisa Hook	23/23	100%	36/36	100%
Mike McNamara	23/23	100%	34/34	100%
Thomas Saueressig	22/23	96%	31/32	97%
Carla Smits-Nusteling (until 29 April 2025)	8/9	89%	13/14	93%
Kai Öistämö	21/23	91%	31/33	94%
Average attendance (%)		95%		95%
(1)Any director who so wishes may attend, as a non-voting observer, meetings of committees of which they are not members. Figures exclude directors attending committee<br><br>meetings as non-voting observers.<br><br>(2)In her first year on the Board, Pernille Erenbjerg had pre-existing scheduling conflicts, and subsequent changes to the Board’s meeting calendar further impacted her ability to<br><br>attend all meetings during 2025.

Directors meet without management in connection with each

regularly scheduled meeting. According to Board practices,

meetings without management present are only attended by

non-executive directors. These meetings are chaired by the

non-executive Chair of the Board. In cases where the non-

executive Chair of the Board is unable to chair these meetings,

the non-executive Vice Chair of the Board chairs the meeting.

Additionally, the independent directors would meet separately

at least once annually. In 2025, all members of the Board were

non-executive and determined to be independent from Nokia

and significant shareholders under the Finnish Corporate

Governance Code and the rules of the NYSE.

Committees of the Board of Directors

In 2025, the Board of Directors had five Committees that

assisted the Board in its duties pursuant to their respective

Committee charters. The Board may also establish new or ad

hoc committees for detailed reviews or consideration of

particular topics to be proposed for the approval of the Board.

Any director who so wishes may attend, as a non-voting

observer, meetings of Committees of which they are not

members.

| 37 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

The Audit Committee

The following table sets forth the members of the Audit

Committee and their meeting attendance in 2025:

	Attendance
Member	Meetings	%
Carla Smits-Nusteling (Chair until 29<br><br>April 2025)	3/3	100%
Thomas Dannenfeldt (Chair as of 29<br><br>April 2025)	6/6	100%
Pernille Erenbjerg (as of 29 April<br><br>2025)	3/3	100%
Lisa Hook	6/6	100%
Mike McNamara	6/6	100%
Average attendance (%)		100%

The Committee consists of a minimum of three members of the

Board who meet all applicable independence, financial literacy

and other requirements as stipulated by Finnish law, the Finnish

Corporate Governance Code and the rules of the NYSE.

As of 29 April 2025, the Audit Committee has consisted of the

following four members of the Board: Thomas Dannenfeldt

(Chair), Pernille Erenbjerg, Lisa Hook and Mike McNamara.

The Committee is responsible for assisting the Board in the

oversight of:

▪the quality and integrity of the Company’s financial

statements, related disclosures and sustainability reporting;

▪the statutory audit of the Company’s financial statements,

related disclosures and sustainability reporting;

▪the qualifications and independence of the external auditor

and the sustainability reporting assurer;

▪the performance of the external auditor and the assurer

subject to the requirements of Finnish law;

▪the performance of the Company’s internal controls, risk

management and the assurance function;

▪the performance of the internal audit function;

▪the Company’s compliance with legal and regulatory

requirements, including the performance of its ethics and

compliance program;

▪the monitoring and assessment of any related party

transactions;

▪the pension liabilities and taxation of the Company; and

▪the processes and management related to the cybersecurity

of the Company, including information and services security.

In discharging its oversight role, the Audit Committee has full

access to all Company books, records, facilities and personnel.

The Audit Committee also maintains procedures for the receipt,

retention and treatment of complaints received by Nokia

regarding accounting, internal controls, auditing or

sustainability reporting matters and for the confidential,

anonymous submission by our employees of concerns relating

to accounting, auditing or sustainability reporting assurance

matters. Nokia’s disclosure controls and procedures, which are

reviewed by the Audit Committee and approved by the President

and CEO and the Chief Financial Officer, as well as the internal

controls over financial reporting, are designed to provide

reasonable assurance regarding the quality and integrity of

Nokia’s financial statements and related disclosures. For further

information on internal control over financial reporting, refer to

the section “Risk management, internal control and internal

audit functions at Nokia––Description of internal control

procedures in relation to the financial reporting process”.

Under the Finnish Companies Act, an external auditor and a

sustainability reporting assurer are elected by a simple majority

vote of the shareholders at the Annual General Meeting for one

year at a time. The Audit Committee prepares the proposal to

the shareholders for the election of the nominees, upon its

evaluation of the qualifications and independence of the

external auditor and the sustainability reporting assurer. Under

Finnish law, the fees of the external auditor and of the

sustainability reporting assurer are approved by the

shareholders by a simple majority vote at the Annual General

Meeting. The Committee prepares the proposals to the

shareholders in respect of the fees of the external auditor and

the sustainability reporting assurer, and approves their annual

fees under the guidance given by the Annual General Meeting.

For information about the fees paid to Nokia’s external auditor

and sustainability reporting assurer, Deloitte Oy, during 2025

refer to the section “Auditor fees and services”.

The Board has determined all current Committee members be

‘financially literate’ satisfying the applicable financial-

sophistication requirement by the New York Stock Exchange. In

addition, three Committee members, Thomas Dannenfeldt,

Pernille Erenbjerg and Lisa Hook, are determined to be ‘audit

committee financial experts’ as defined in the requirements of

Item 16A of the Annual Report on Form 20-F filed with the U.S.

Securities and Exchange Commission (SEC). All members of the

Audit Committee are “independent directors” as defined by

Finnish law, the Finnish Corporate Governance Code and in

Section 303A.02 of the NYSE Listed Company Manual.

The Audit Committee meets a minimum of four times a year.

The Committee meets separately with the representatives of

Nokia’s management, heads of the internal audit, and ethics and

compliance functions, and the external auditor in connection

with each regularly scheduled meeting. The head of the internal

audit function has, at all times, direct access to the Audit

Committee, without the involvement of management.

Audit Committee pre-approval policies and procedures

The Audit Committee of the Board is responsible, among other

matters, for oversight of the external auditor’s independence,

subject to the requirements of applicable legislation. The Audit

Committee has adopted a policy regarding an approval

procedure of audit services performed by the external auditors

of the Nokia Group and permissible non-audit services

performed by the principal external auditor of the Nokia Group

(the “Pre-approval Policy”).

Under the Pre-approval Policy, proposed services either: (i) may

be pre-approved by the Audit Committee in accordance with

certain service categories described in the Pre-approval Policy

(general pre-approval); or (ii) require the specific pre-approval

of the Audit Committee (specific pre-approval). The Pre-

approval Policy sets out the audit, audit-related, tax and other

services that have received the general pre-approval of the

Audit Committee. All other audit, audit-related (including

services related to internal controls and significant mergers and

acquisitions projects), tax and other services are subject to

specific pre-approval by the Audit Committee. All service

requests concerning generally pre-approved services are

submitted to an appointed Audit Committee delegate within

management, who determines whether the services are within

the generally pre-approved services. The Pre-approval Policy is

subject to annual review by the Audit Committee.

The Audit Committee establishes budgeted fee levels annually

for each of the categories of audit and non-audit services that

are pre-approved under the Pre-approval Policy, namely, audit,

audit-related, tax and other services. At each regular meeting of

the Audit Committee, the auditor provides a report in order for

the Audit Committee to review the services that the auditor is

providing, as well as the cost of those services.

| 38 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

The Corporate Governance and Nomination Committee

The following table sets forth the members of the Corporate

Governance and Nomination Committee and their meeting

attendance in 2025:

	Attendance
Member	Meetings	%
Timo Ihamuotila (Chair as of 29 April<br><br>2025)	4/4	100%
Søren Skou (Chair until 29 April<br><br>2025)	2/2	100%
Sari Baldauf	6/6	100%
Pernille Erenbjerg (as of 29 April<br><br>2025)	3/4	75%
Lisa Hook (until 29 April 2025)	2/2	100%
Thomas Saueressig (as of 29 April<br><br>2025)	4/4	100%
Carla Smits-Nusteling (until 29 April<br><br>2025)	2/2	100%
Kai Öistämö (until 29 April 2025)	2/2	100%
Average attendance (%)		96%

The Committee consists of three to five members of the Board

who meet all applicable independence requirements as

stipulated by Finnish law, the Finnish Corporate Governance

Code and the rules of the NYSE.

As of 29 April 2025, the Corporate Governance and Nomination

Committee has consisted of the following four members of the

Board: Timo Ihamuotila (Chair), Sari Baldauf, Pernille Erenbjerg

and Thomas Saueressig.

The Committee fulfills its responsibilities by:

▪actively identifying individuals qualified to be elected

members of the Board, as well as considering and evaluating

the appropriate level and structure of director remuneration;

▪preparing and evaluating the principles regarding Board

diversity;

▪preparing proposals to the shareholders on the director

nominees for election at the general meetings, as well as

director remuneration;

▪monitoring and assessing the directors’ current and planned

time commitments outside the Nokia Board and their

attendance at Nokia Board and Committee meetings;

▪monitoring significant developments in the law and practice

of corporate governance, including sustainability-related

governance trends and the directors’ duties and

responsibilities;

▪assisting the Board and each Committee of the Board in its

annual performance evaluation process, including

establishing criteria to be applied in connection with such

evaluations;

▪developing and administering Nokia’s Corporate Governance

Guidelines and giving recommendations regarding them to

the Board; and

▪reviewing Nokia’s disclosure in the corporate governance

statement.

The Committee has the power and practice to appoint a

recruitment firm to identify appropriate new director candidates.

The Personnel Committee

The following table sets forth the members of the Personnel

Committee and their meeting attendance in 2025:

	Attendance
Member	Meetings	%
Thomas Dannenfeldt (Chair)	5/5	100%
Timo Ahopelto	5/5	100%
Sari Baldauf	5/5	100%
Elizabeth Crain	5/5	100%
Average attendance (%)		100%

The Committee consists of a minimum of three members of the

Board who meet all applicable independence requirements as

stipulated by Finnish law, the Finnish Corporate Governance

Code and the rules of the NYSE.

As of 29 April 2025, the Personnel Committee has consisted of

the following four members of the Board: Thomas Dannenfeldt

(Chair), Timo Ahopelto, Sari Baldauf and Elizabeth Crain.

The Committee has overall responsibility for evaluating,

resolving and making recommendations to the Board regarding:

▪preparing the Remuneration Policy and the Remuneration

Report;

▪compensation and terms of employment of the Company’s

senior management;

▪human capital management;

▪all equity-based plans;

▪incentive compensation plans, policies and programs of the

Company affecting executives; and

▪possible other significant incentive plans.

The Committee is responsible for preparing the Remuneration

Policy, including Nokia’s compensation philosophy and

principles and ensuring that the Company’s compensation

programs are performance-based, designed to contribute to

long-term shareholder value creation in line with shareholders’

interests, properly motivate management and are aligned with

the Remuneration Policy, as well as supporting overall

corporate strategies.

The Committee also oversees human capital management and

periodically reviews the personnel policies and practices of

Nokia related to human capital management and social

responsibilities relating to its employees, including Company

culture, physical safety, employee wellbeing, morale, diversity,

talent management and development, succession planning,

resourcing, recruiting, attrition, retention and employee

engagement.

| 39 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

The Strategy Committee

The following table sets forth the members of the Strategy

Committee and their meeting attendance in 2025:

	Attendance
Member	Meetings	%
Elizabeth Crain (Chair)	7/7	100%
Sari Baldauf	7/7	100%
Thomas Dannenfeldt (until 29 April<br><br>2025)	3/4	75%
Lisa Hook	7/7	100%
Timo Ihamuotila (as of 29 April<br><br>2025)	3/3	100%
Søren Skou (until 29 April 2025)	2/4	50%
Kai Öistämö (as of 29 April 2025)	3/3	100%
Average attendance (%)		91%

The Committee consists of a minimum of three members of the

Board and the majority of them shall meet all applicable

independence requirements as stipulated by the Finnish

Corporate Governance Code and the rules of the NYSE.

As of 29 April 2025, the Strategy Committee has consisted of

the following five members of the Board: Elizabeth Crain (Chair),

Sari Baldauf, Lisa Hook, Timo Ihamuotila and Kai Öistämö.

The Committee is established by the Board primarily for the

purpose of assisting the Board with respect to various strategic

initiatives related to developing Nokia’s corporate and business

strategies and capturing the strategic opportunities identified

under them.

The Committee’s duties may include:

▪overseeing the preparation of strategies related to strategic

initiatives;

▪reviewing the prospective alternatives for the strategic

initiatives identified by management;

▪acting as a preparatory body for assessing the specific

strategic initiatives requiring the Board’s decision;

▪overseeing the implementation of the strategic initiatives;

and

▪evaluating the outcomes of the strategic initiatives, focusing

on their implementation, financial results and long-term

success.

The Technology Committee

The following table sets forth the members of the Technology

Committee and their meeting attendance in 2025:

	Attendance
Member	Meetings	%
Kai Öistämö (Chair)	5/5	100%
Timo Ahopelto	5/5	100%
Mike McNamara	5/5	100%
Thomas Saueressig	5/5	100%
Average attendance (%)		100%

The Committee consists of a minimum of three members of the

Board and the majority of them shall meet applicable

independence requirements as stipulated by Finnish law, the

Finnish Corporate Governance Code and the rules of the NYSE

and have such skills in innovation, technology and science

matters as the Board determines adequate from time to time.

As of 29 April 2025, the Technology Committee has consisted

of the following four members of the Board: Kai Öistämö (Chair),

Timo Ahopelto, Mike McNamara and Thomas Saueressig.

In its dialogue with and provision of feedback and advice to the

management, the Committee will periodically review:

▪the Company’s technological competitiveness and new

strategic technology initiatives as well as market trends,

considering both organic and inorganic options to retain or

attain competitiveness;

▪the Company’s approach to major technological innovations;

▪key technology trends that may result in disruptive threats

or opportunities and proposals on how to adequately

address them;

▪high-level risks and opportunities associated with the

Company’s Research and Development Programs;

▪embedding sustainability in the technology roadmaps; and

▪the processes and management related to the cybersecurity

of the Company, including product and customer security.

| 40 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Group Leadership Team and

the President and CEO

The Group Leadership Team is responsible for the operative

management of Nokia. The Group Leadership Team is chaired

by the President and CEO. The President and CEO’s rights and

responsibilities include those allotted to the President under

Finnish law.

At 31 December 2025, the Group Leadership Team consisted of

12 members, including the President and CEO, representing five

different nationalities. In total 25% of the Group Leadership

Team members were female. The table shown to the right sets

forth the biographical information of the Group Leadership

Team members.

At 31 December 2025, a total of

2 117 191

Nokia shares and a

total of 275 368 American Depositary Shares (ADSs) were held

by the Group Leadership Team members. These holdings

represented approximately 0.04% of our total shares and

voting rights excluding shares held by the Nokia Group. The

number of shares includes shares received as compensation as

well as shares acquired through other means. Stock options or

other equity awards that are deemed as being beneficially

owned under the applicable SEC rules are not included in the

table.

Summary of changes in the Group Leadership Team in 2025
The following members stepped down from the Group<br><br>Leadership Team:<br><br>▪Pekka Lundmark, President and Chief Executive Officer, as<br><br>of 31 March 2025;<br><br>▪Lorna Gibb, Chief People Officer, as of 13 June 2025;<br><br>▪Federico Guillén, President of Network Infrastructure, as<br><br>of 30 June 2025;<br><br>▪Nishant Batra, Chief Strategy and Technology Officer, as<br><br>of 30 September 2025; and<br><br>▪Tommi Uitto, President of Mobile Networks, as of<br><br>31 December 2025.	The Group Leadership Team was complemented with five<br><br>new appointments:<br><br>▪Justin Hotard, President and Chief Executive Officer,<br><br>effective 1 April 2025;<br><br>▪Victoria Hanrahan, Chief of Staff to Nokia’s President and<br><br>CEO, effective 16 June 2025;<br><br>▪David Heard, President of Network Infrastructure, effective<br><br>1 July 2025;<br><br>▪Pallavi Mahajan, Chief Technology and AI Officer, effective<br><br>1 October 2025;<br><br>▪Konstanty Owczarek, Chief Corporate Development Officer,<br><br>effective 1 October 2025; and<br><br>▪Furthermore, on 10 November 2025, Nokia announced the<br><br>appointment of Kristen Pressner as Chief People Officer, to<br><br>take effect during the second quarter of 2026.		Name	Position	Gender	Year of birth	Nationality	On GLT since	Shares	ADSs
---	---	---	---	---	---	---	---
Justin Hotard	President and CEO	Male	1974	American	2025	609 274
Louise Fisk	Chief Communications Officer<br><br>(currently Chief Communications and<br><br>Marketing Officer)	Female	1976	British	2024	52 063
Patrik Hammarén	President of Nokia Technologies<br><br>(currently President of Technology<br><br>Standards)	Male	1982	Finnish	2024	40 387
Victoria Hanrahan	Chief of Staff to the President and CEO	Female	1988	American	2025	—
Mikko Hautala	Chief Geopolitical and Government<br><br>Relations Officer	Male	1972	Finnish	2024	2 800
David Heard	President of Network Infrastructure	Male	1968	American	2025		275 368
Pallavi Mahajan	Chief Technology and AI Officer	Female	1977	Indian/American	2025	—
Esa Niinimäki	Chief Legal Officer (currently Chief Legal<br><br>and Administrative Officer) and interim<br><br>Chief People Officer	Male	1976	Finnish	2023	79 281
Konstanty Owczarek	Chief Corporate Development Officer	Male	1979	American	2025	—
Raghav Sahgal	President of Cloud and Network Services<br><br>(currently Chief Customer Officer)	Male	1962	American	2020	719 174
Tommi Uitto	President of Mobile Networks	Male	1969	Finnish	2019	256 042
Marco Wirén	Chief Financial Officer	Male	1966	Finnish/Swedish	2020	358 170

| 41 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Biographical details of the current members of the Nokia Group Leadership Team

Justin Hotard	Louise Fisk	Patrik Hammarén	Victoria Hanrahan
b. 1974	b. 1976	b. 1982	b. 1988

President and Chief Executive Officer

(CEO) since 2025.

MBA from the MIT Sloan School of

Management, Massachusetts, United

States. Bachelor of Science in Electrical

Engineering from the University of Illinois

Urbana-Champaign, Illinois, United

States.

Executive Vice President and General

Manager, Data Center & AI Group, Intel

2024–2025. Executive Vice President

and General Manager, High-

Performance Computing, AI & Labs,

HPE, 2021–2024. Senior Vice President,

President and Managing Director of HPE

Japan and China, HPE 2019–2020.

Senior Vice President and General

Manager, Volume Global Business Unit,

HPE 2017–2019. Vice President,

Strategy, Planning & Operations, Data

Center Infrastructure Group, HPE 2015–

President and General Manager,

Global Small Business Cloud Platform,

NCR Corporation 2013–2014. VP,

Corporate Development, NCR Corp.

2012–2013. Vice President and General

Manager, NCR Entertainment, NCR Corp.

2010–2012. Senior Director, Mergers &

Acquisitions, NCR Corp. 2007–2010.

Director, Product Management, Symbol

Technologies 2005–2007. Senior

Manager, Corporate Development,

Symbol Technologies 2003–2005.

Business Development Analyst, Surface

Logix 2002–2003. Senior Systems

Engineer, Motorola Inc. 1996–2000.

Chief Communications and Marketing

Officer (CCMO). Group Leadership

Team member since 2024. Joined

Nokia in 2020.

Advanced executive leadership

development, DUKE University, North

Carolina, United States. Advanced

global leadership, INSEAD business

school, France. Post graduate diploma

in PR & Journalism, University of Wales,

College of Cardiff, United Kingdom. BA

Hons in Communication, University of

Wales, College of Cardiff, United

Kingdom.

Vice President, Corporate Affairs

Programs & Corporate

Communications, Nokia 2020–2024.

Global leadership team,

Communications and Marketing

Director, BAE Systems Applied

Intelligence 2015–2019. Head of Global

Communications, Investor Relations

and Marketing, Innovation Group 2012–

Global PR Director & Deputy

Communications Director, Logica

2006–2012. Partner & Associate

Director, LEWIS Communications 1999–

2006.

Trustee of the Williams Syndrome

Foundation.

President of Technology Standards.

Group Leadership Team member since

Joined Nokia in 2007.

Master of Law, University of Helsinki,

Finland. Master of Science (Information

Networks), Aalto University, Finland.

Chief Licensing Officer Wireless

Technologies, Nokia Technologies

2024–2024. Vice President, Head of IoT

Licensing Program, Nokia Technologies

2022–2024. Head of Patent Licensing

Greater China, Nokia Technologies

2020–2022. Director, Patent Licensing,

Nokia Technologies 2018–2020.

Manager, Patent Licensing, Nokia

Technologies 2014–2018. Senior Legal

Counsel, HERE, Nokia 2013–2014. Legal

Counsel, HERE Nokia 2013–2013. Legal

Counsel, Central and East Europe, Nokia

2012–2013. Legal Counsel, Central

Europe, Nokia 2011–2012. Legal

Counsel, MeeGo & Open Source, Nokia

2007–2011.

Chief of Staff to Nokia’s President and

CEO. Group Leadership Team member

since 2025. Joined Nokia in 2025.

MBA from the University of Houston,

Texas, United States. Bachelor of

Business Administration, Texas A&M

University, Texas, United States.

Vice President, Global Marketing - High

Performance Compute & Artificial

Intelligence, HPE 2023–2024. Director,

Chief of Staff, HPC & AI Business Unit,

HPE 2021–2023. Manager, Marketing

Strategy, HPE 2019–2021. Senior

Product Marketing Manager, HPE 2015–

Product Marketing Manager,

Neuromodulation Division, St. Jude

Medical 2013–2015. Marketing

Communications Coordinator, St. Jude

Medical 2010–2013.

| 42 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Biographical details of the current members of the Nokia Group Leadership Team continued

Mikko Hautala	David Heard	Pallavi Mahajan	Esa Niinimäki
b. 1972	b. 1968	b. 1977	b. 1976

Chief Geopolitical & Government

Relations Officer, and Chairman, Nokia

Defense. Group Leadership Team

member since 2024. Joined Nokia in

2024.

Master of Social Sciences (Political

history), University of Helsinki, Finland.

Master of Philosophy (Slavic languages),

University of Helsinki, Finland.

Ambassador, Head of Mission, Embassy

of Finland, Washington DC 2020–2024.

Ambassador, Head of Mission, Embassy

of Finland, Moscow 2016–2020. Foreign

Policy Adviser to the President, Office

of the President of the Republic of

Finland, Helsinki 2012–2016. Minister,

Deputy Head of Mission, Embassy of

Finland, Moscow 2011–2012.

Diplomatic Adviser to the Minister of

Foreign Affairs, Ministry for Foreign

Affairs, Helsinki 2007–2011. First

Secretary, Permanent Representation

of Finland to the EU, Brussels 2002–

Attaché, Ministry for Foreign

Affairs, Helsinki 2001–2002. Attaché,

Embassy of Finland, Kyiv 1999–2001.

Visa Officer, Embassy of Finland, Kyiv

1998–1999.

Board Member Support for Finnish

Society (SYT) foundation. Chairman of

the Council, The John Morton Center

for North American Studies, University

of Turku, Finland.

President of Network Infrastructure.

Group Leadership Team member since

Joined Nokia in 2025.

Master’s degree in Management

Science (Sloan), Stanford University

Graduate School of Business, California,

United States. Master of Business

Administration (MBA), University of

Dayton, Ohio, United States. Bachelor

of Arts, Production & Operations

Management, Ohio State University,

Ohio, United States.

Chief Growth Officer at Network

Infrastructure, Nokia February–June

Chief Executive Officer, Infinera

2020–2025. Chief Operations Officer

and various senior positions, Infinera

2017–2020. Cloud Service Provider

(Executive Consultant - External), Dell

2015-2016. President, Network &

Service (Software) Enablement, JDSU

2010–2015. Chief Operating Officer,

BigBand Networks 2007–2010.

President & CEO, Somera

Communications (Jabil) 2004–2006.

President, Switching Systems, Tekelec

(Oracle) 2003–2004. President & CEO,

Santera Systems Inc. (Oracle) 2003–

General Manager & Vice

President Wireless, various positions,

Alcatel Lucent 1996–2000. Vice

President of Access, AT&T (Lucent

Technologies) 1990–1996.

Chief Technology and AI Officer. Group

Leadership Team member since 2025.

Joined Nokia in 2025.

Bachelor of Technology degree in

Computer Science, the National

Institute of Technology Kurukshetra,

India. Master degree in Science in

Software Systems from Birla Institute

of Technology and Science, India.

Advanced Leadership Program at

Stanford University Graduate School of

Business, California, United States.

Corporate Vice President & General

Manager, Data Center and AI Group,

Intel 2024–2025. Corporate Vice

President & GM, Network and Edge

Group, Intel 2022–2024. Vice President,

Solutions Engineering & Customer

Experience, High Performance

Compute, Hewlett Packard Enterprise

2021–2022. Vice President, Head of

Software Engineering for Compute,

Hewlett Packard Enterprise 2020–2021.

Vice President Engineering, Juniper

Networks 2016–2019. Several senior

positions, Juniper Networks 2003–

Technical Lead, BayPackets

2001–2003. Research Engineer, Centre

for Development of Telematics (C-DOT)

1998–2001.

Chief Legal and Administrative Officer,

Interim Chief People Officer and Board

Secretary. Group Leadership Team

member since 2023. Joined Nokia in

2007.

Master of Laws, Fordham University,

School of Law, New York, United States.

Master of Law, University of Helsinki,

Finland.

Interim Chief Legal Officer, Nokia 2022–

Deputy Chief Legal Officer, Vice

President, Corporate Legal and Board

Secretary, Nokia 2018–2023. General

Counsel, Global Services, Nokia 2015–

Head of Corporate Legal, Nokia

Solutions and Networks and Head of

Finance & Labor Legal, Nokia 2013–

Senior Legal Counsel, Legal and

IP, India, Middle East and Africa, Nokia

2012–2013. (Senior) Legal Counsel,

Corporate Legal, Nokia 2007–2011.

Group Legal Counsel, Metsä Group

2005–2007. Associate Lawyer, White &

Case LLP 2003–2005.

Chair of Legal Affairs Committee of the

Confederation of Finnish Industries.

Member of the Market Practice Board

of Securities Market Association and

the Policy Committee of the Directors’

Institute Finland.

| 43 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Biographical details of the current members of the Nokia Group Leadership Team continued

Konstanty Owczarek	Raghav Sahgal	Marco Wirén
b. 1979	b. 1962	b. 1966

Chief Corporate Development Officer

(CCDO). Group Leadership Team member

since 2025. Joined Nokia in 2025.

Master’s degree in Finance and Banking,

University of Lodz, Poland. Bachelor’s

degree in Business Administration, Emory

University, Georgia, United States.

Managing Partner and Founder, KJO

Advisors LLC 2024–2025. Chief

Strategy Officer and Chief Operating

Officer, High Performance Computing,

AI & Research business unit, Hewlett

Packard Enterprise 2022–2024. Head of

Strategy and Innovation and Head of

New Markets, AIG Life, American

International Group, Inc. 2020–2022.

Head of Mergers & Acquisitions and

Strategy, AIG Life & Retirement,

American International Group, Inc.

2018–2020. Director, AIG Corporate

Development, American International

Group, Inc. 2015–2017. Founding

Partner, Strategic Risk Capital Advisors,

LLC 2009–2015. Director, Integrated

Finance Ltd. (IFL) / Marakon Associates

2004–2009. Analyst, Technology, Media

and Telecommunications unit, Bear

Stearns & Co. 2003–2004.

Chief Customer Officer. Group

Leadership Team member since 2020.

Joined Nokia in 2017.

Master of Science in Computer Systems

Management, University of Maryland,

Maryland, United States. Bachelor of

Science in Computer Engineering,

Tulane University, Louisiana, United

States. Executive Business Certificate in

General Management, Harvard

University, Massachusetts, United

States.

President of Nokia Enterprise 2020.

Senior Vice President, Nokia Software

2017–2020. President, NICE Ltd. Asia

Pacific and the Middle East 2010–2017.

Advisory Board Member, Orga Systems

2010–2014. Vice President,

Communications Business Unit, Asia

Pacific & Japan, Oracle 2008–2010.

Chief Business Officer, Comverse

2005–2006. Executive Vice President,

Asia Pacific, CSG 2002–2005. Vice

President, Software Products Group

Asia Pacific, Lucent Technologies 2000–

2002.

Chief Financial Officer (CFO). Group

Leadership Team member since 2020.

Joined Nokia in 2020.

Master’s degree in Business

Administration, University of Uppsala,

Sweden. Studies in management and

strategic leadership, including at Duke

Business School, North Carolina, United

States; IMD, Switzerland and Stockholm

School of Economics, Sweden.

President, Wärtsilä Energy and

Executive Vice President, Wärtsilä

Group 2018–2020. Executive Vice

President and CFO, Wärtsilä Group

2013–2018. Executive Vice President

and CFO, SSAB Group 2008–2013. Vice

President, Business Control, SSAB

Group 2007–2008. CFO, Eltel Networks

2006–2007. Vice President of Business

Development, Eltel Networks 2004–

Head of Service Division, Eltel

Networks 2003–2004. Vice President,

Corporate Development, Eltel Networks

2002–2003. Vice President, Strategy &

Business Development, NCC Group

1999–2002. Head of Strategic Planning,

NCC Group 1998–1999. Group

Controller, NCC Group 1996–1998.

Vice Chair of the Board of Directors of

Neste Corporation 2019–2023 and

member of the Board 2015–2023.

| 44 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Risk management, internal control and

internal audit functions at Nokia

Risk management principles

We have a systematic and structured approach to risk

management. It covers strategic, operational, financial,

compliance and reputational risks and opportunities, including

potentially material impacts to people and the environment. The

principles documented in the Nokia Enterprise Risk Management

(ERM) Policy, which is approved by the Audit Committee of the

Board, require risk management and its elements to be

integrated into key processes:

▪ERM is an integral part of Nokia’s objective setting and key

decision making

Key risks and opportunities are primarily identified against

business targets either in business operations or as an

integral part of strategy and financial planning. Those are

monitored as part of the management and business

performance information flow. Our overall risk management

concept is based on managing the key risks that would

prevent us from meeting our objectives, rather than

focusing on eliminating all risks.

▪ERM is a core component of Nokia’s corporate governance

ERM accountability runs through the Company and is

embedded into Nokia corporate governance. The Board of

Directors and the Group Leadership Team are committed to

effective risk management as a core management capability

that supports Nokia in achieving strategic, tactical and

operational business objectives and in managing business

performance.

▪Risk ownership follows business ownership

Nokia ERM is aligned to the overall Nokia governance model,

where Nokia’s businesses are accountable for meeting

approved plans and targets as agreed within Nokia. Each

business or function head is an owner of the risks in their

respective responsibility area and is responsible for

identifying and managing key risks and capturing

opportunities.

▪ERM is an area of continuous improvement

ERM is an area of continuous improvement for Nokia. The

Chief Financial Officer, who also functions as the Chief Risk

Officer, provides guidance and sponsors the development of

ERM practices and ERM improvement.

In addition to the principles defined in the Nokia Enterprise Risk

Management Policy, other key corporate level policies reflect

the implementation of specific aspects of risk management.

Cybersecurity risk management

Nokia, along with its partners and contracted third parties, faces

cybersecurity threats like ransomware, viruses, worms and

other malicious software, unauthorized modifications, or illegal

activities that may cause potential security risks and other harm

to Nokia, its customers or consumers and other end-users of

Nokia’s products and services. The dynamic nature of IT

technologies, including the introduction of AI technologies,

increase these risks.

Cybersecurity incidents can lead to lengthy and costly incident

response, remediation of the attack affecting business

continuity, or breach and legal proceedings and fines imposed

on Nokia, as well as adverse effects to Nokia’s reputation and

brand value. Despite sustained investments, preventing,

detecting and containing cyber-attacks remain challenging.

Additionally, the regulatory framework around responding to

and disclosing such events is in flux and we may not be able to

comply with the regulations.

We face a number of cybersecurity risks within our business.

Although such risks have not materially affected us thus far,

including our business strategy, results of operations, or

financial condition, we have experienced threats to and

breaches of our data and systems, including malware and

computer virus attacks. We continue to address these

challenges, but there is no guarantee against future attacks.

Nokia has well-established cybersecurity processes built into its

overall security risk management framework. This integration is

achieved through the implementation of a security program set on

various processes, such as cybersecurity risk management, third-

party security risk management, security incident management and

business continuity and disaster recovery planning. In evaluation of

the effectiveness of our cybersecurity processes and their

alignment with the industry best practices, we have engaged and

may engage in the future with third party advisers and consultants.

The Chief Security Officer, who has the authority to establish

and oversee the Nokia information security program, keeps

Nokia’s executive leadership informed on program outcomes

and highlights information security risks which may affect Nokia

business and customers. Nokia’s executive leadership provides

direction and support and has the responsibility to execute the

program within their own domains. Key principles are

communicated through the Nokia Information Security Policy,

applicable also to third parties and collaborators and supported

by topical Standard Operation Procedures and guidelines.

Nokia’s commitment to security is reflected in the supplier

selection processes, contracts and supplier (re)assessments

that are designed to ensure effective security is in place in our

supply chain and with our third-party partners. We are dedicated

to adhering to applicable laws, regulations, contractual

commitments, and industry best practices, including but not

limited to ISO 27001, NIST SP 800 series, the Cloud Security

Alliance Control Matrix, and the Information Security Forum.

Nokia’s cybersecurity incidents are handled in the Security Incident

Management Process, which covers all phases of incident

response, including preparation, identification, containment,

eradication, recovery and post-incident analysis. Each confirmed

cybersecurity-related incident is assessed against a classification

scheme (impact on confidentiality, integrity and availability of the

related asset, urgency, and priority of the security incident).

Significant cybersecurity incidents are elevated and managed by

a cross-functional, executive management-level team, which is

responsible for making the necessary decisions and prioritizing

actions that can minimize the impact of the security incident to

Nokia and its customers. Members from the CFO and Legal,

Compliance & Sustainability teams are responsible for determining

the materiality of the security incident and promptly informing the

Audit Committee of the Board.

The Nokia management team for assessing and managing

cybersecurity threats includes members with training and

experience in security risk management, security governance, cyber

resilience, security incident management, information technology,

cybersecurity legal and compliance requirements and disclosures.

These activities are coordinated and overseen by the Chief Security

Officer, who leads the assessment of cybersecurity risks, ensures

the alignment between different functions to assess and manage

the risks and works with the designated risk owners through the

Cyber Risk Council and the Enterprise Risk Management framework.

The Chief Security Officer has extensive cybersecurity expertise,

having held cybersecurity‑related roles since 2012, and holds

undergraduate and post-graduate degrees in Engineering and

professional certifications in cyber security management. The

Cyber Risk Council includes members of our senior management

| 45 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

with significant working experience in technology, cybersecurity and

risk management. For an overview of the training and experience of

the members of the Board and our assessment of their experience

and skills related to cybersecurity, please see “Main corporate

governance bodies of Nokia – Board of Directors”.

Description of internal control procedures in

relation to the financial reporting process

Management is responsible for establishing and maintaining

adequate internal control over Nokia’s financial reporting. Our

internal control over financial reporting is designed to provide

reasonable assurance to management and the Board regarding

the reliability of financial reporting and the preparation and fair

presentation of published financial statements.

Management conducts a yearly assessment of Nokia’s internal

controls over financial reporting in accordance with the Committee

of Sponsoring Organizations framework (the “COSO framework”,

2013) and the Control Objectives for Information and Related

Technology (COBIT) framework of internal controls. The assessment

is performed based on a top-down risk assessment of our financial

statements covering significant accounts, processes and locations,

corporate-level controls and information systems’ general controls.

As part of its assessment, management has documented:

▪the corporate-level controls, which create the “tone from

the top” containing the Nokia values and Code of Conduct

and which provide discipline and structure to decision-

making processes and ways of working. Selected items from

our operational mode and governance principles are

separately documented as corporate-level controls;

▪the significant processes: (i) give a complete end-to-end

view of all financial processes; (ii) identify key control points;

(iii) identify involved organizations; (iv) ensure coverage for

important accounts and financial statement assertions; and

(v) enable internal control management within Nokia;

▪the control activities, which consist of policies and

procedures to ensure management’s directives are carried

out and the related documentation is stored according to

our document retention practices and local statutory

requirements; and

▪the information systems’ general controls to ensure that

sufficient IT general controls, including change management,

system development and computer operations, as well as

access and authorizations, are in place.

Further, management has also:

▪assessed the design of the controls in place aimed at

mitigating the financial reporting risks;

▪tested operating effectiveness of all key controls; and

▪evaluated all noted deficiencies in internal controls over

financial reporting in the interim and as of year end.

In 2025, Nokia has followed the procedures as described above

and has reported on the progress and assessments to

management and to the Audit Committee of the Board on a

quarterly basis.

Description of the organization of the internal

audit function

We have an internal audit function that examines and evaluates

the adequacy and effectiveness of our system of internal

control. Internal audit reports to the Audit Committee of the

Board. The head of the internal audit function has direct access

to the Audit Committee, without the involvement of

management. The internal audit staffing levels and annual

budget are approved by the Audit Committee. All authority of the

internal audit function is derived from the Board. The internal

audit aligns to the business by business group and function.

Annually, a risk-based internal audit plan is developed taking

into account key business risks, emerging risks, external factors

and input from management. This plan is approved by the Audit

Committee. Audits are completed across business groups and

functions. The results of each audit are reported to

management identifying issues, financial impact, if any, and the

correcting actions to be completed. Quarterly, the internal audit

function communicates the progress of the internal audit plan

completion, including the results of the closed audits, to the

Audit Committee. Any changes to the risk environment

impacting the internal audit plan are presented to the Audit

Committee for review and approval on a quarterly basis.

Internal audit also works closely with Internal Controls and

Ethics and Compliance offices to review any financial and

compliance concerns brought to light from various channels

and, where relevant, works with Enterprise Risk Management to

ensure priority risk areas are reviewed through audits.

| 46 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Related party transactions

We determine and monitor related parties in accordance with

the International Accounting Standards (IAS 24, Related Party

Disclosures) and other applicable regulations including the

applicable U.S. securities laws. We maintain information on our

related parties, as well as monitor and assess related party

transactions. As a main principle, all transactions should be

conducted at arm’s length and as part of the ordinary course of

business. In exceptional cases where these principles would be

deviated from, Nokia would set up a separate process to

determine the related parties in question and to seek relevant

approvals in accordance with internal guidelines and applicable

regulations.

Main procedures relating to insider

administration

Our insider administration is organized according to the

applicable European Union and Finnish laws and regulations as

well as applicable U.S. securities laws and regulations. In

addition, Nokia has adopted the Nokia Insider Trading Policy,

approved by the Board of Directors, which sets out Nokia-wide

rules and practices to ensure full compliance with applicable

rules and that inside information is recognized and treated in an

appropriate manner and with the highest integrity. The Nokia

Insider Trading Policy is applicable to all directors, executives

and employees of Nokia.

Persons discharging managerial responsibilities

Nokia has identified members of the Board of Directors and the

Group Leadership Team as persons discharging managerial

responsibilities who, along with persons closely associated with

them, are required to notify Nokia and the Finnish Financial

Supervisory Authority of their transactions with Nokia’s financial

instruments. Nokia publishes the transaction notifications.

In addition, according to the Nokia Insider Trading Policy,

persons discharging managerial responsibilities are obligated to

clear a planned transaction in Nokia’s financial instruments in

advance with the person in charge of the insider administration.

It is also recommended that trading and other transactions in

Nokia’s financial instruments are carried out in times when the

information available to the market is as complete as possible.

Closed window

Persons discharging managerial responsibilities are subject to a

closed window period of 30 calendar days preceding the

disclosure of Nokia’s quarterly or annual result announcements,

as well as the day of the disclosure. During the closed window

period, persons discharging managerial responsibilities are

prohibited from dealing in Nokia’s financial instruments.

Nokia has imposed this closed window period also on separately

designated financial reporting persons who are recurrently

involved with the preparation of Nokia’s quarterly and annual

results announcements. These persons are separately notified

of their status as designated financial reporting persons.

Insider registers

Nokia does not maintain a permanent insider register. Insiders

are identified on a case-by-case basis for specific projects and

are notified of their insider status. Persons included in a project-

specific insider register are prohibited from dealing in Nokia’s

financial instruments until the project ends or is made public.

Supervision

Our insider administration’s responsibilities include, among

other matters, internal communications related to insider

matters and trading restrictions, setting up and maintaining our

insider registers and arranging related trainings, as well as

organizing and overseeing compliance with the insider rules.

Violations of the Nokia Insider Trading Policy must be reported

to the head of Corporate Legal. Nokia employees may also use

channels stated in the Nokia Code of Conduct for reporting

incidents involving suspected violations of the Nokia Insider

Trading Policy.

Auditor fees and services

Deloitte Oy, based in Helsinki, Finland, served as our auditor and

our sustainability reporting assurer for the financial year ended

31 December 2025 and for the financial year ended 31

December 2024. The auditor and the sustainability reporting

assurer are elected annually by our shareholders at the Annual

General Meeting for the next financial year commencing after

the election. On an annual basis, the Audit Committee of the

Board prepares a proposal to the shareholders regarding the

appointment of the auditor and the sustainability reporting

assurer based upon its evaluation of the qualifications and

independence of the auditor and the sustainability reporting

assurer to be proposed for election.

The following table presents fees by type paid to Deloitte’s

network of firms for the years ended 31 December:

EURm	2025	2024
Audit fees(1)	19.5	18.5
Audit-related fees(2)	2.3	2.5
Tax fees(3)	0.4	0.2
All other fees(4)	0.3	0.1
Total	22.5	21.3

(1)Audit fees consist of fees incurred for the annual audit of the Group’s

consolidated financial statements and the statutory financial statements of the

Group’s subsidiaries.

(2)Audit-related fees consist of fees billed for sustainability reporting assurance

approximately EUR 0.9 million (approximately EUR 1.4 million in 2024) as well as

other assurance and related services that are reasonably related to the

performance of the audit or review of the Group’s financial statements or that are

traditionally performed by the independent auditor, and include consultations

concerning financial accounting and reporting standards; advice and assistance in

connection with local statutory accounting requirements; due diligence related to

mergers and acquisitions; and audit procedures in connection with investigations

in the pre-litigation phase and compliance programs. They also include fees billed

for other audit services, which are those services that only the independent

auditor can reasonably provide, and include the provision of comfort letters and

consents in connection with statutory and regulatory filings and the review of

documents filed with the SEC and other capital markets or local financial reporting

regulatory bodies.

(3)Tax fees include fees billed for: (i) services related to tax compliance including

preparation and/or review of tax returns, preparation, review and/or filing of

various certificates and forms and consultation regarding tax returns and

assistance with revenue authority queries; compliance reviews, advice and

assistance on other indirect taxes; and transaction cost analysis; (ii) services

related to tax audits; (iii) services related to individual compliance (preparation of

individual tax returns and registrations for employees (non-executives), assistance

with applying for visas, residency, work permits and tax status for expatriates); (iv)

services related to technical guidance on tax matters; (v) services related to

transfer pricing advice and assistance with tax clearances; and (vi) tax consultation

and planning (advice on stock-based remuneration, local employer tax laws, social

security laws, employment laws and compensation programs and tax implications

on short-term international transfers).

(4)Other fees include fees billed for Company establishments, liquidations, forensic

accounting, data security, other consulting services and reference materials

and services.

| 47 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration

This section sets out our remuneration

governance, policies and how they have

been implemented within Nokia. It

includes our Remuneration Report

where we disclose the remuneration of

our Board members and the President

and CEO for 2025, which will be

presented to the Annual General

Meeting (AGM) 2026 for an advisory

vote.

Shareholders have approved of our proposed amendments to

the Remuneration Policy in the 2025 AGM. A summary of the

Policy is set out in this section of the report and the full version

of the Policy is available on our website.

Other remuneration-related information provided alongside the

Remuneration Report is not subject to a vote at the AGM 2026

but provides added information on the Nokia Remuneration

Policy and remuneration practices applied within Nokia as well

as on the remuneration of the Group Leadership Team

members.

We report information applicable to executive remuneration in

accordance with Finnish regulatory requirements and with

requirements set by the US Securities and Exchange

Commission that are applicable to us.

Highlights
▪Overall performance in 2025 was solid, with net sales<br><br>growth, comparable operating profit(1) and strong free<br><br>cash flow(1) delivered in line with expectations, which are<br><br>reflected in the incentive payouts. Disciplined execution<br><br>helped offset FX headwinds, complete the Infinera<br><br>acquisition, accelerate AI & Cloud orders, and strengthen<br><br>the balance sheet while funding investments and<br><br>dividends.<br><br>▪Justin Hotard joined Nokia as President and CEO on 1<br><br>April 2025 at the same salary and variable pay<br><br>opportunities as his predecessor and was invited to<br><br>participate in a co-investment (eLTI) arrangement. In<br><br>addition, he received compensation for the loss of<br><br>forfeited awards on leaving his previous employer on a<br><br>like-for-like basis.<br><br>▪Justin Hotard’s 2025 short-term incentive (STI) was<br><br>subject to a score of operating profit, cash release(2),<br><br>health & safety and diversity objectives and resulted in an<br><br>overall STI payout of 129% of target opportunity.<br><br>▪Pekka Lundmark stepped down from the role of Nokia<br><br>President and CEO on 31 March 2025 and continued as<br><br>Advisor to the new President and CEO until 31 December<br><br>2025, to ensure a smooth leadership transition.	▪The former CEO received his base salary, benefits and<br><br>incentives throughout 2025. The remaining balance of his<br><br>notice period of 12 months until 9 February 2026 was<br><br>paid out together with his 2025 short-term incentive.<br><br>▪The long-term incentive (LTI) awards (performance<br><br>shares) granted to Pekka Lundmark and other GLT<br><br>members in 2022 fully lapsed following the end of the<br><br>three-year performance period in 2025.<br><br>▪The 2026 STI for the CEO will be subject to comparable<br><br>operating profit in constant currency(2) and free cash<br><br>flow(1) measures, with potential Board downward<br><br>discretion on health and safety and workforce<br><br>composition.<br><br>▪The 2026 metrics for the LTI (performance shares) for<br><br>Justin Hotard and the rest of the GLT will continue to be<br><br>subject to a scorecard of relative Total Shareholder<br><br>Return (“TSR”), cumulative reported Earnings Per Share<br><br>(EPS) and greenhouse gas (GHG) emission reduction.<br><br>▪Justin Hotard received a salary increase of approximately<br><br>6.0% in 2026, to bring his total target remuneration<br><br>closer to the market level, this will remain significantly<br><br>below the US benchmark primarily due to the significantly<br><br>lower LTI award.
Further details of all of these matters are set out in the Remuneration Report.

Highlights

▪Overall performance in 2025 was solid, with net sales growth, comparable operating profit(1) and strong free cash flow(1) delivered in line with expectations, which are reflected in the incentive payouts. Disciplined execution helped offset FX headwinds, complete the Infinera acquisition, accelerate AI & Cloud orders, and strengthen the balance sheet while funding investments and dividends. ▪Justin Hotard joined Nokia as President and CEO on 1 April 2025 at the same salary and variable pay opportunities as his predecessor and was invited to participate in a co-investment (eLTI) arrangement. In addition, he received compensation for the loss of forfeited awards on leaving his previous employer on a like-for-like basis. ▪Justin Hotard’s 2025 short-term incentive (STI) was subject to a score of operating profit, cash release(2), health & safety and diversity objectives and resulted in an overall STI payout of 129% of target opportunity. ▪Pekka Lundmark stepped down from the role of Nokia President and CEO on 31 March 2025 and continued as Advisor to the new President and CEO until 31 December 2025, to ensure a smooth leadership transition.

▪The former CEO received his base salary, benefits and incentives throughout 2025. The remaining balance of his notice period of 12 months until 9 February 2026 was paid out together with his 2025 short-term incentive. ▪The long-term incentive (LTI) awards (performance shares) granted to Pekka Lundmark and other GLT members in 2022 fully lapsed following the end of the three-year performance period in 2025. ▪The 2026 STI for the CEO will be subject to comparable operating profit in constant currency(2) and free cash flow(1) measures, with potential Board downward discretion on health and safety and workforce composition. ▪The 2026 metrics for the LTI (performance shares) for Justin Hotard and the rest of the GLT will continue to be subject to a scorecard of relative Total Shareholder Return (“TSR”), cumulative reported Earnings Per Share (EPS) and greenhouse gas (GHG) emission reduction. ▪Justin Hotard received a salary increase of approximately 6.0% in 2026, to bring his total target remuneration closer to the market level, this will remain significantly below the US benchmark primarily due to the significantly lower LTI award.

Further details of all of these matters are set out in the Remuneration Report.

(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures, refer to the “Alternative performance measures”

section

(2)Comparable operating profit in constant currency and cash flow less comparable operating profit (i.e. cash release) are financial measures used only in calculation of short-term

incentives for the President and CEO and the members of the Global Leadership Team. These measures are not used to communicate the management’s view of Nokia’s financial

performance, and hence they are not considered as alternative performance measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable

IFRS measure, refer to the ”Alternative performance measures” section.

| 48 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration Report 2025

Letter from the Chair of the Personnel

Committee of the Board

“Dear Fellow Shareholder,

I am delighted to present our

Remuneration Report 2025

as the Chair of the Personnel

Committee of the Nokia Board.”

Our remuneration philosophy

At the core of Nokia’s philosophy lie two principles:

▪pay for performance and aligning the interests of employees

with shareholders; and

▪ensure that remuneration programs and policies support the

delivery of the corporate strategy and create long-term

sustainable shareholder value.

Shareholder support

Driven by the strategic shift to expand into new business areas such

as data centers, private wireless, and defense, particularly in North

America, the Nokia Board of Directors proposed amendments to

the Remuneration Policy (“Policy”) for approval by shareholders in

the 2025 Annual General Meeting (“AGM”). In developing the

proposal, engagement was undertaken with the company’s largest

shareholders in November 2024 and April 2025. The Board

welcomed the support received from the majority of shareholders

for the amendments at the AGM, while acknowledging that a

significant minority voted against the proposal.

In response to this outcome, and consistent with our commitment

to maintaining an open and constructive dialogue with our

shareholders, further engagement was conducted with

approximately 30% of our shareholders during Autumn 2025. The

principal concerns raised by investors related to the introduction of

restricted shares in the Policy and the perceived lack of clarity

around the use of underpins.

When considering the introduction of restricted shares, the

Personnel Committee of the Board of Directors (“Committee”)

carefully evaluated the strategic context in which Nokia operated,

particularly the growing importance of the North American market

and the need to remain competitive in attracting and retaining

senior leadership capable of delivering our long-term objectives.

The proportion of Nokia’s revenue generated in North America is

expected to increase as we expand in higher-growth businesses.

These areas, such as data centers, represent key drivers of the

company’s future development, and as part of this strategy, Nokia

completed the EUR 2.5 billion acquisition of Infinera Corporation in

2025, a US-based supplier of optical networking solutions and

advanced optical semiconductors. Justin Hotard, who headed the

Data Center & AI Group at Intel with more than 25 years of

experience in AI and data-center markets across major US

technology companies, was appointed as CEO in April 2025.

Against this backdrop, the Committee concluded that the

introduction of additional restricted share awards of up to 100% of

base salary was necessary to position the CEO’s total remuneration

closer to market levels for comparable US-based roles, to provide

the retention support expected in the North American executive

market and to ensure a healthy compression between the

remuneration of the CEO and that of his direct reports. With the

addition of restricted shares, more than two-thirds of the CEO’s

total target remuneration – and nearly 90% of variable

remuneration at maximum – will remain performance-based,

maintaining Nokia’s commitment to pay for performance.

Compensation of the new President and CEO

On 10 February 2025, Nokia announced that Justin Hotard

would be appointed as its new President and Chief Executive

Officer from 1 April 2025. The new President and CEO’s salary and

variable pay arrangement were the same as his predecessor.

Hotard received his salary for the period from 1 April 2025 to the

end of the financial year with a prorated STI payout over the same

period of 129% of target opportunity, based on the performance

of the company. He was granted LTI (performance share) award in

July 2025.

In addition, Justin Hotard received a one-time buy-out award of EUR

2.0 million in cash and EUR 6.0 million in restricted shares, vesting in

three tranches over a period of three years, both in lieu of his

forfeited unvested equity awards from the previous employer.

Additionally, Justin Hotard was given compensation for repayment

of previous employer’s sign-on bonus that he had to repay, of c.

EUR 1.0 million. Mr. Hotard was also invited to participate in the co-

investment-based long-term incentive arrangement (eLTI) , under

which he invested EUR 2 821 000 in Nokia shares in June 2025. In

return, he is offered two Performance Shares for each share

invested as a matching award. The invested shares must be held for

three years for the matching shares to vest, subject to the same

performance conditions as for the 2025 LTI Performance Shares.

| 49 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

This investment aligns the new President and CEO with shareholders

from the start and is a sign of his commitment to Nokia.

The Board has approved a 6.0% increase to Justin Hotard’s

base salary as of 1 January 2026, while maintaining his target

STI and performance share opportunities at their existing levels.

With this increase, the President and CEO’s total target

remuneration will remain below the US median benchmark.

Exit arrangements for the previous President and CEO

Pekka Lundmark continued to lead Nokia until 31 March 2025 and

remained employed during 2025 to support the transition of

leadership and relationships with our key customers and

stakeholders after stepping down as President and CEO.

Mr. Lundmark received his base salary and incentive throughout

The remaining balance of his 12-month notice period base

pay and benefits until 9 February 2026 was paid out in cash in lieu

of notice, together with his 2025 STI based on actual performance.

He was not eligible for 2026 STI. Considering Mr. Lundmark’s

retirement from operational roles and his continued work to enable

a smooth leadership transition throughout 2025, on Board’s

discretion, Pekka Lundmark retained his outstanding long-term

incentives (performance shares 2022‒2024 and eLTI 2024). These

awards will vest on normal vesting dates prorated to his service at

the company until 31 December 2025 and subject to applicable

performance conditions.

The 2022 LTI (performance shares) was subject to the

predetermined dividend adjusted share price targets and a three-

year performance period which ended in January 2025. Based on

the dividend adjusted share price outcome of EUR 4.88, the award

lapsed in full for Pekka Lundmark and other GLT members who

received the grant in 2022.

STI performance outcome and payout for 2025

Justin Hotard’s 2025 STI, prorated for period worked, was subject

to a scorecard of operating profit, cash release(1), health & safety

and diversity objectives. Pekka Lundmark’s 2025 STI was subject to

the same scorecard of measures.

The comparable operating profit in constant currency(1) for 2025

was EUR 2 168 million, against the target of EUR 2 093 million. As a

result, the payout for this element was 115% of target. For the

cash release element (cash flow less comparable operating profit)(1),

the actual outcome was EUR -338 million, against the target of EUR

-1 238 million. This resulted in a payout of 198% of target for this

element.

The first gender diversity metric (female percentage in workforce)

achieved 22.9% for the full year, against the target of 23.9%, which

resulted in a payout of 0% of target for this element. The second

gender diversity metric (female percentage in leadership) achieved

17.2% for the full year, against the target of 18.2%, which resulted

in a payout of 0% of target for this element.

The health & safety metric of lost time injury frequency rate

measures how often lost time injuries occur that directly impacts

Nokia employees during the year. This metric achieved an outcome

of 0.055 lost time injury frequency rate (“LTIFR”) against the target

of 0.085, which resulted in a payout of 225% of target for this

element. However, as a result of five fatalities within Nokia’s control

during the year, the Board exercised downward discretion to reduce

the payout under this element by 10%, which resulted in the final

outcome of 203% for this metric.

As a result, a total of 129% of target STI was payable for the

financial year 2025.

STI and LTI performance conditions for 2026

During 2025, the Committee also undertook a review of the

performance metrics used for our STI and LTI plans and decided to

make changes for 2026 to ensure our incentive plans support our

strategy focused on growth and performance. Our 2026 incentive

plans for the President and CEO and the rest of the GLT will follow

the structure set out below.

Delivering the next year’s step in the strategic plan – STI
Comparable Operating Profit in<br><br>Constant Currency(1) 70%	Free Cash Flow(2) 30%
Continued focus on profitability	Achieve a strong cash position
Delivering sustainable value – LTI
50% relative TSR, 40% cumulative reported EPS (adjusted for<br><br>impairments and M&A), 10% GHG emission reduction (scope 1, 2 and 3)
A more rounded and balanced approach reflecting performance over<br><br>the long term in growing the business and in delivering shareholder<br><br>value whilst working towards our 2030 goal of 50% GHG emission<br><br>reduction

For 2026, cash release(1) has been replaced with Free Cash

Flow(2), which provides a simpler and a more transparent view of

underlying cash generation. Additionally, health & safety and

diversity will no longer operate as standalone metrics within the

STI, as the Committee considers performance in these areas as an

integral part of the day-to-day responsibilities of the President and

CEO and senior leaders rather than a measure for variable

remuneration. These areas remain important to the company’s

long-term success, and the Committee will retain the ability to apply

a downward discretion to STI outcomes where performance in

these areas does not meet expectations. The STI weightings have

been adjusted for 2026 to reflect this updated framework.

The Committee reaffirmed the importance of a safety culture with

ongoing safety programs and targets aimed at raising awareness

and encouraging positive safety behaviors among subcontractors.

Nokia will continue to set internal safety targets for 2026.

Share ownership requirement

Our President and CEO is required to hold Nokia shares

equivalent to three times his annual base salary. Justin Hotard

currently maintains a total shareholding (including his

beneficially owned shares and unvested restricted shares) which

significantly exceeds the requirement. This demonstrates his

commitment to an alignment with Nokia’s long-term success

and our shareholder interests.

Conclusions

I thank shareholders who assisted the Committee in the

consultation process during 2025 and we remain committed to

maintaining an open and constructive dialogue. I look forward to

your continued support at our 2026 Annual General Meeting.

THOMAS DANNENFELDT,

CHAIR OF THE PERSONNEL COMMITTEE

(1) Comparable operating profit in constant currency and cash flow less comparable

operating profit (i.e. cash release) are financial measures used only in calculation of

short-term incentives for the President and CEO and the members of the Global

Leadership Team. These measures are not used to communicate the management’s

view of Nokia’s financial performance, and hence they are not considered as

alternative performance measures. For the definition and reconciliation of non-IFRS

measures to the most directly comparable IFRS measure, refer to the ”Alternative

performance measures” section.

(2) Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the

most directly comparable IFRS measures, refer to the “Alternative performance

measures” section.

| 50 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Introduction

This Remuneration Report of Nokia Corporation (the Report) has

been approved by the Company’s Board of Directors (the Board)

to be presented to the Annual General Meeting 2026. The

resolution of the Annual General Meeting on the Report is

advisory. The Report presents the remuneration of the Board

members and the President and CEO for the financial year 2025

in accordance with the Decree of the Finnish Ministry of Finance

608/2019 and the Finnish Corporate Governance Code 2025, as

well as other applicable Finnish laws and regulations. The

members of the Board and the President and CEO have been

remunerated in accordance with our approved Remuneration

Policy during the financial year 2025. No temporary or other

deviations from the Policy have been made and no clawback

provisions have been exercised during the financial year 2025.

In 2025, our remuneration structure promoted the Company’s

long-term financial success by setting the performance criteria

for short-term and long-term incentives to support the

Company’s short-term and long-term goals, as well as through

shareholding requirements set for the President and CEO, the

GLT and the Board members. Aligned with Nokia’s pay-for-

performance remuneration principle, performance-based

remuneration was emphasized over fixed base salary. The

setting and application of the performance criteria for incentive

programs executed the philosophy of pay-for-performance and

supported the delivery of the corporate strategy as well as the

creation of long-term sustainable shareholder value.

The table on the right compares the development of the

remuneration of our Board of Directors, President and CEO,

average employee pay and Company performance over a five-

year period.

The pay-for-performance remuneration principle applied to the

President and CEO, as well as the shareholding requirement of

the President and CEO and the Board members, as applicable,

contribute to an alignment of interests with shareholders, while

also promoting and incentivizing decisions that are in the long-

term interest of the Company.

Year	Aggregate remuneration of<br><br>the Board of Directors (EUR)(1)	President and CEO actual<br><br>remuneration (EUR)(2)	Average salaries and wages<br><br>(EUR)(3)(5)	Net sales (EURm)(5)	Total shareholder return<br><br>(rebased to 100 at 31 Dec<br><br>2020)(4)
2021	1 821 000	4 908 244	70 411	22 202	176.90%
2022	2 280 000	4 316 606	74 241	23 761	139.07%
2023	2 503 000	3 738 560	69 096	21 138	101.13%
2024	2 511 000	3 988 250	78 576	19 220	146.73%
2025	2 499 000	7 286 861	80 367	19 889	197.49%

(1)Aggregate total remuneration paid to the members of the Board during the financial year as annual fee and meeting fee, as applicable, and as approved by general meetings

of shareholders. The value depends on the number of members elected to the Board for each term as well as on the composition of the Board committees and travel required.

During the term that began from the Annual General Meeting 2021, the Board had eight members only, compared to ten members during the following terms.

(2)The President and CEO actual remuneration represents the aggregate total of the two President and CEOs in 2025.

(3)Average salaries and wages are based on average employee numbers and their total salaries and wages as reported in the Company’s financial statements.

(4)Total shareholder return on last trading day of the previous year.

(5)In June 2024, Nokia classified its Submarine Networks business as a discontinued operation. The comparative amounts for 2023 and 2022 have been recast accordingly.

We also present this data graphically:

Comparative data (rebased year-end 2020 = 100)

31336081402015

| 51 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Pay for performance

Core to our remuneration philosophy is a desire to pay for

performance.

Each year we review overall total shareholder return compared

with LTI vesting, mapping the performance of the plans against

the total shareholder return curve.

Looking at the performance of our long-term incentive plans

against total shareholder return, there is a reasonable

alignment with the performance of the plans declining as total

shareholder return declines.

The Board continues to actively monitor the performance of our

long-term incentive plans to ensure that they deliver value for

shareholders.

Share price and total shareholder return vs long-term incentive performance

39032662786049

Global peer group

During 2025, the global peer group used in our remuneration

benchmarking and relative TSR performance assessment was

reviewed and updated so that it consists of the following 24

companies. As part of this review, Atos was removed from the

(1)2023 LTI's performance period ended in January 2026. The vesting outcome of this award will be reported in the 2026 Remuneration Report.

(2)2024 and 2025 LTIs’ performance periods are not yet completed.

peer group following material changes to its business profile, and

both Juniper Networks and VMware were removed as they have

delisted.

ABB	Infineon Technologies
Adobe	Kone
Airbus	Motorola Solutions
ASML	NXP Semiconductors
BAE Systems	Oracle
Capgemini	Philips
Ciena	SAP
Cisco Systems	Siemens Healthineers
Corning	Vodafone Group
Dell Technologies	Wärtsilä
Ericsson
Hewlett Packard Enterprise
HP
IBM

| 52 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration of the Board of Directors

The shareholders resolve annually on director remuneration

based on a proposal made by the Board of Directors on the

recommendation of the Board’s Corporate Governance and

Nomination Committee.

The aggregate amount of remuneration paid to the Board

members in 2025 equaled EUR 2 499 000 of which

EUR 2 390 000 consisted of annual fees and the rest of meeting

fees. In accordance with the resolution by the Annual General

Meeting 2025, approximately 40% of the annual fee from Board

and Board Committee work was paid in Nokia shares purchased

from the market on behalf of the Board members following the

Annual General Meeting.

The directors shall retain until the end of their directorship such

number of shares that corresponds to the number of shares

they have received as Board remuneration during their first

three years of service on the Board.

The rest of the annual fee was paid in cash, most of which was

used to cover taxes arising from the remuneration. All meeting

fees were paid in cash.

It is the Company’s policy that the non-executive members of

the Board do not participate in any of Nokia’s equity programs

and do not receive performance shares, restricted shares, or

any other variable remuneration for their duties as Board

members. No such variable remuneration was paid since all

persons acting as Board members during the financial year

2025 were non-executive.

Board remuneration for the term that began at the Annual General Meeting held on 29 April 2025 and ends at the close of the Annual

General Meeting in 2026 consisted of the following fees.

Annual fee	EUR
Chair	440 000
Vice Chair	210 000
Member	185 000
Chair of Audit Committee	30 000
Member of Audit Committee	15 000
Chair of Personnel Committee	30 000
Member of Personnel Committee	15 000
Chair of Strategy Committee	20 000
Member of Strategy Committee	10 000
Chair of Technology Committee	20 000
Member of Technology Committee	10 000
Meeting fee(1)	EUR
Meeting requiring intercontinental travel	5 000
Meeting requiring continental travel	2 000

(1)Paid for a maximum of seven meetings per term.

The following table outlines the total annual remuneration paid in 2025 to the members of the Board for their services.

	Annual fees<br><br>(EUR)	Meeting fees<br><br>(EUR)(1)	Total<br><br>remuneration paid<br><br>(EUR)	60% of annual fees<br><br>and all meeting fees<br><br>paid in cash (EUR)	40% of annual<br><br>fees paid in shares<br><br>(EUR)	Number of shares<br><br>(approx. 40% of the<br><br>annual fee)(2)
Sari Baldauf (Chair)	465 000	10 000	475 000	289 000	186 000	41 478
Søren Skou (Vice Chair)(3)	—	2 000	2 000	2 000	—	—
Timo Ihamuotila (Vice Chair as of 29<br><br>April 2025)	220 000	9 000	229 000	141 000	88 000	19 624
Timo Ahopelto	210 000	10 000	220 000	136 000	84 000	18 732
Elizabeth Crain	220 000	12 000	232 000	144 000	88 000	19 624
Thomas Dannenfeldt	245 000	14 000	259 000	161 000	98 000	21 854
Pernille Erenbjerg (as of 29 April 2025)	200 000	—	200 000	120 000	80 000	17 840
Lisa Hook	210 000	12 000	222 000	138 000	84 000	18 732
Mike McNamara (as of 3 April 2024)	210 000	14 000	224 000	140 000	84 000	18 732
Thomas Saueressig	195 000	14 000	209 000	131 000	78 000	17 394
Carla Smits-Nusteling(3)	—	2 000	2 000	2 000	—	—
Kai Öistämö	215 000	10 000	225 000	139 000	86 000	19 178
Total	2 390 000	109 000	2 499 000	1 543 000	956 000	213 188

(1)Meeting fees include all meeting fees paid during the reported year 2025.

(2)40% of the annual fees after deducting the applicable transfer taxes.

(3)Stepped down at the Annual General Meeting on 29 April 2025 and received no annual fees in 2025.

| 53 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration of the President and CEO

The following table shows the actual remuneration received by the former and current President and CEO in 2025 and 2024. As our

CEO changed in the financial year 2025, both individual and aggregate figures are presented in respect of service as President and CEO

for comparison purposes. The 2024 LTI figure relates to the vesting of the 2021 LTI performance shares and the 2021 eLTI matching

performance shares. The 2025 LTI figure relates to the vesting of the 2022 LTI performance shares.

EUR	2025 (Combined)	Pay mix(1)	2025 (Hotard)(2)	Pay mix(1)	2025<br><br>(Lundmark)(3)	Pay mix(1)	2024	Pay mix(1)
Salary	1 410 500	38%	1 057 875	38%	352 625	38%	1 410 500	36%
Short-term incentive(4)	2 271 787	62%	1 703 840	62%	567 947	62%	1 824 834	46%
Long-term incentive(5)	—	0%	—	0%	—	0%	697 872	18%
Other remuneration(6)	3 604 574		3 584 877		19 697		55 044
Total	7 286 861		6 346 592		940 269		3 988 250

(1)Pay mix reflects the proportion of base salary, STI and LTI of total remuneration, excluding other remuneration.

(2)Justin Hotard’s compensation is shown in respect of his service as President and CEO from 1 April 2025.

(3)Pekka Lundmark’s compensation is shown in respect of his service as President and CEO to 31 March 2025. In addition, in respect of his services as an advisor between stepping

down as President and CEO on 31 March 2025 and his last day of work on 31 December 2025, he received EUR 1 057 875 salary and EUR 29 523 in benefits. The remaining balance

of his 12-month notice period base pay and benefits until 9 February 2026 was paid out in cash in lieu of notice, EUR 35 269, together with his 2025 STI based on actual

performance, which amounted to EUR 2 271 787 for the full year. Pekka Lundmark is not eligible for 2026 STI.

(4)STI represents the amounts earned in respect of financial year 2025, but that are paid in April 2026.

(5)LTI payments to Pekka Lundmark represents his 2022 performance share award, which fully lapsed.

(6)Other compensation for Pekka Lundmark includes telephone, car, driver, tax compliance support and medical insurance. For Justin Hotard, other compensation includes a one-

time buy-out award of EUR 2 000 000 in lieu of his forfeited unvested equity awards from the previous employer, compensation for repayment of previous employer’s sign-on

bonus that he had to repay of EUR 1 025 154, and other benefits including relocation and housing (including temporary housing), schooling fees, car, driver, telephone, medical

insurance and legal fees equaling to EUR 559 723.

Pursuant to Finnish legislation, Nokia is required to make contributions to the Finnish TyEL pension arrangements in respect of the

President and CEO. Such payments can be characterized as defined contribution payments. In 2025, payments to the Finnish state

pension system equaled EUR 39 291 for Pekka Lundmark in respect of his service as President and CEO (EUR 310 937 in 2024) and

EUR 490 275 for Justin Hotard. No supplementary pension arrangements were offered.

| 54 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Hire and 2025 arrangements for Justin Hotard

Justin Hotard was appointed as President and CEO from 1 April 2025. His hire arrangements are summarized below and are in

accordance with the Remuneration Policy (“Policy”).

Item	Action	Amount	Note
Salary	Paid monthly from 1 April 2025	EUR 1.4 m per annum, pro-<br><br>rated for 2025	In line with Policy and Executive<br><br>Agreement
Short-term incentive<br><br>2025	Paid at actual for 2025 and prorated for period worked<br><br>during the year	EUR 1.7 m	In line with Policy and STI plan<br><br>rules
Long-term incentive<br><br>2025	Performance share award vests in 2028 subject<br><br>to relative TSR (50%), cumulative earnings per share<br><br>(40%) and GHG emission reduction (10%)	Target EUR 2.8 m	In line with Policy and LTI plan<br><br>rules
eLTI co-investment<br><br>arrangement	In return for a purchase and continued holding of 2.8m<br><br>EUR worth of Nokia shares, a 2:1 award of Nokia 2025<br><br>performance shares was made. These vest in 2028<br><br>subject to relative TSR (50%), cumulative earnings per<br><br>share (40%) and GHG emission reduction (10%) and<br><br>continued holding of the purchased shares	Target EUR 5.6 m	In line with Policy and same as<br><br>arrangement provided to Pekka<br><br>Lundmark, Justin Hotard was<br><br>invited to participate in<br><br>the eLTI co-investment<br><br>arrangement. This required him<br><br>to make a substantial personal<br><br>investment in Nokia shares<br><br>aligning his personal interests<br><br>with those of shareholders from<br><br>joining.
Buyout of forfeited<br><br>Restricted Stock<br><br>awards	To compensate for the forfeiture of awards from the<br><br>previous employer, and having duly considered the<br><br>structure, time horizons, value and performance<br><br>conditions of those forfeited awards, the Board<br><br>granted the CEO EUR 6.0 million in restricted shares,<br><br>vesting in three equal tranches in 2026, 2027 and<br><br>2028, as well as a cash payment of EUR 2.0 million,<br><br>which was paid upon his commencement in April 2025.	EUR 8.0 m	In line with Policy and Executive<br><br>Agreement and LTI Plan rules
Compensation for<br><br>repayment<br><br>of previous employer’s<br><br>sign-on bonus	Cash in recognition of the repayment of sign-on bonus<br><br>to previous employer	EUR 1.0 m	In line with Policy and Executive<br><br>Agreement
Benefits	Paid from 1 April 2025	Standard Finnish benefits<br><br>plus relocation support,<br><br>temporary accommodation<br><br>support, housing allowance,<br><br>schooling allowance, and<br><br>legal fees	In line with Policy and Executive<br><br>Agreement

| 55 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

2025 Short-term Incentive of the President and CEO

Targets for the STI are set annually at or before the start of the year (adjusted for exceptional one-off items), balancing the need to

deliver value with the need to motivate and drive the performance of the Executive Team. Targets are determined for a set of strategic

metrics that align with driving sustainable value for shareholders and are set in the context of market expectations and analyst

consensus forecasts. For 2025, both Pekka Lundmark and Justin Hotard had a target STI opportunity of 125% of annual base salary.

Their 2025 STI framework was based on a scorecard of financial and non-financial objectives. Achievements against the 2025 targets

are set out in the table below. The outcomes for all metrics were calculated based on formulaic approach. For the health & safety

metric, lost time injury frequency rate achieved an outcome of 225% of target. However, as a result of five subcontractor fatalities

within Nokia’s control during the year, the Board exercised downward discretion to reduce the payout under this element by 10%,

which resulted in the final outcome of 203% for this metric.

Metric	Weight	Target	2025 performance<br><br>outcome	2025 STI<br><br>outcome (% of<br><br>target)
Comparable operating profit<br><br>in constant currency(1)	60%	EUR 2 093 m	EUR 2 168 m	115%
Cash release(1)	20%	EUR – 1 238 m	EUR – 338 m	198%
Gender diversity – women in<br><br>leadership	5%	Female percentage of global leadership of 18.2%	17.2%	0%
Gender diversity – women in<br><br>workforce	5%	Female percentage of global workforce 23.9%	22.9%	0%
Health & safety	10%	• Employee lost time injury frequency rate (LTIFR) of 0.085<br><br>• Fatality modifier (downward discretion in the event of fatalities,<br><br>including all subcontractors)	LTIFR of 0.055<br><br>with 5 fatalities	203%
Total STI outcome	100%			129%

(1)Comparable operating profit in constant currency and cash flow less comparable operating profit (i.e. cash release) are financial measures used only in calculation of short-term

incentives for the President and CEO and the members of the Global Leadership Team. These measures are not used to communicate the management’s view of Nokia’s financial

performance, and hence they are not considered as alternative performance measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS

measure, refer to the ”Alternative performance measures” section.

Accordingly, the total 2025 STI payout for Pekka Lundmark and Justin Hotard for their respective periods of service as the President

and CEO during 2025 was EUR 567 947 and EUR 1 703 840, respectively. Pekka Lundmark’s total STI for 2025, reflecting continued

service until year-end, amounted to EUR 2 271 787.

| 56 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Long-term Incentive awards granted to the President and CEO during 2025

In 2025, Justin Hotard was granted the following LTI (performance share) awards.

Targets for our LTI performance shares are set in a similar context to the STI. The performance shares targets are set at the start of

the performance period reflecting the business strategy and priorities over the three-year performance period. The performance

conditions for the 2025 performance shares are based on 50% relative TSR against our global peer group(1), 40% cumulative earnings

per share (EPS) and 10% GHG emission reduction targets over the three-year performance period from 2025 to 2028. During 2025,

Justin Hotard was invited to participate in the co-investment eLTI, under which he invested EUR 2.8 million in Nokia shares and

received two-for-one matching performance shares in return. The matching performance shares were subject to the same

performance conditions as set out above. Both the LTI performance shares and eLTI matching performance shares have a three-year

performance and vesting period. The targets for all metrics as well as the performance and vesting outcomes will be disclosed in the

2028 Remuneration Report.

Performance share awards(1) (2)	Units awarded	Grant date face value(3)<br><br>(EUR)	Grant date	Vesting
2025 LTI performance shares	608 000	2 681 280	7 July 2025	Q3 2028
2025 eLTI matching performance shares	1 218 548	5 666 248	3 June 2025	Q2 2028

(1)Global peer group consisted of 24 companies (see details under the “Global peer group” section).

(2)The maximum vesting is 200% of target if stretch performance targets are met.

(3)Grant date face value was calculated using the closing price of EUR 4.41 and EUR 4.65 on the date of grant for the 2025 performance shares and 2025 eLTI matching shares,

respectively.

As part of Justin Hotard’s joining arrangements as new President and CEO, he received a one-off buyout award of EUR 6.0 million in

restricted shares vesting in three tranches over a period of three years, in lieu of his forfeited unvested equity from the previous

employer. The value of this buyout award was determined taking account of the structure, time horizon, value and performance

conditions (where applicable) of his forfeited awards from the previous employer.

Restricted share awards	Units awarded	Grant date face value<br><br>(EUR)(1)	Grant date	Vesting
2025 LTI restricted shares (buyout)	1 287 600	6 438 000	1 April 2025	Q2 2026, Q2<br><br>2027, Q2 2028

(1)Grant date face value was calculated using the closing share price at the date of grant of EUR 5.00. The difference in the grant date face value and the originally agreed amount of

EUR 6.0 million is due to the different share price used to calculate the number of shares to be granted using Nokia’s averaging method.

Long-term Incentive awards and other equity awards vested for the President and CEO during 2025

Pekka Lundmark was granted LTI performance share award in March 2022. The award had a three-year performance period and was

subject to dividend adjusted share price targets over the performance period. However, as the threshold share price was not achieved, the

award lapsed in full on 6 July 2025.

Share awards vesting during the year	Units awarded	Target share<br><br>price (EUR)	Share price<br><br>achievement<br><br>(EUR)	Vesting outcome<br><br>(% of target)	Units vested	Value of vested<br><br>award (EUR)
2022 LTI performance shares	543 900	6.50	4.88	0%	—	—

| 57 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

The President and CEO’s share ownership and unvested share awards

Our share ownership policy requires that the President and CEO holds a minimum of three times his or her annual base salary in Nokia

shares in order to ensure alignment with shareholder interests over the long term. Justin Hotard significantly exceeds this requirement

with a holding of 597%(1) well within the five-year allotted period.

Justin Hotard	Units	Value(2) (EUR)
Beneficially owned shares at 31 December 2025	609 274	3 393 656
Unvested shares under outstanding Nokia equity plans(3)	3 114 148	17 345 804
Total	3 723 422	20 739 460

(1)Shareholding of 597% of annual base salary as of 14 November 2025, using 12-month average share price. This includes all beneficially owned Nokia shares and unvested

restricted shares with no performance conditions.

(2)The values are based on the closing price of a Nokia share of EUR 5.57 on Nasdaq Helsinki on 30 December 2025.

(3)The number of units represents the number of unvested awards as of 31 December 2025.

The President and CEO’s termination provisions 2025

Termination by	Reason	Notice	Compensation
Nokia	Cause	None	The President and CEO is entitled to no additional remuneration and all unvested<br><br>equity awards would be forfeited after termination.
Nokia	Reasons other<br><br>than cause	Up to 12 months	The President and CEO is entitled to a severance payment equaling to<br><br>12 months’ remuneration (including annual base salary, benefits, and target short-<br><br>term incentive). Unvested equity awards would be forfeited after termination,<br><br>unless the Board determines otherwise.<br><br>If termination occurs within three months before, or six months after a change of<br><br>control event (double trigger), the CEO is entitled to shorten his notice period to<br><br>three months, he receives 12 months’ remuneration and all his equity awards vest<br><br>subject to performance and time proration until the expiry of the agreement.
President and CEO	Any reason	12 months	The President and CEO may terminate his service agreement at any time with<br><br>12 months’ notice. The President and CEO would either continue to receive salary<br><br>and benefits during the notice period or, at Nokia’s discretion, a lump sum of<br><br>equivalent value. Additionally, the President and CEO would be entitled to any short-<br><br>or long-term incentives that would normally vest during the notice period. Any<br><br>unvested equity awards would be forfeited after termination, except in the event of<br><br>death, permanent disability and retirement, and unless the Board determines<br><br>otherwise.
President and CEO	Nokia’s material<br><br>breach of the<br><br>service agreement	Up to 12 months	In the event that the President and CEO terminates his service agreement based on<br><br>Nokia’s material breach of the service agreement, he is entitled to reduce the notice<br><br>period to two months, and to receive a severance payment equaling to 12 months’<br><br>remuneration including the notice period. All equity awards vest, subject to any<br><br>applicable performance criteria and prorated until the expiry of the agreement.

The President and CEO is subject to a 12-month non-competition and non-solicit obligation that applies after the termination of the

service agreement or the date when he is released from his obligations and responsibilities, whichever occurs earlier.

| 58 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration Policy

Nokia Corporation’s Remuneration Policy, which applies to the

governing bodies of the Company, i.e. the Board of Directors

and the President and CEO, was approved by shareholders at

the Annual General Meeting 2025, receiving 61.78% of votes in

favor. This Policy remained in force and unchanged during 2025.

The information below is provided as a summary for ease of

reference.

In addition to applying the Remuneration Policy to our President

and CEO, the principles of our policy extend to the Group

Leadership Team.

The Board regularly monitors the effectiveness of the measures

used in our incentive plans to ensure that they align with and

drive the strategy of the company.

The Remuneration Policy for the Board of

Directors

In accordance with the Remuneration Policy, the Board’s

Corporate Governance and Nomination Committee periodically

reviews the remuneration for the Chair and members of the

Board against companies of similar size and complexity. The

objective of the Corporate Governance and Nomination

Committee is to enable Nokia to compete for top-of-class

Board competence to maximize value creation for its

shareholders. The Committee’s aim is that the Company has an

efficient Board composed of international professionals

representing a diverse and relevant mix of skills, experience,

background and other personal qualities. Competitive Board

remuneration contributes to the achievement of this target.

The main structure of the Board remuneration as outlined in the

Remuneration Policy is set out in the following table.

Fees	Fees consist of annual fees and meeting fees.<br><br>Approximately 40% of the annual fee is paid in<br><br>Nokia shares purchased from the market on<br><br>behalf of the Board members or alternatively<br><br>delivered as treasury shares held by the<br><br>Company. The balance is paid in cash, most of<br><br>which is typically used to cover taxes arising<br><br>from the paid remuneration.<br><br>Meeting fees are paid in cash.
Incentives	Non-executive directors are not eligible to<br><br>participate in any Nokia incentive plans and do<br><br>not receive performance shares, restricted<br><br>shares or any other equity-based or other<br><br>form of variable compensation for their duties<br><br>as members of the Board.
Pension	Non-executive directors do not participate in<br><br>any Nokia pension plans.
Share<br><br>ownership<br><br>requirement	Members of the Board shall normally retain<br><br>until the end of their directorship such<br><br>number of shares that corresponds to the<br><br>number of shares they have received as Board<br><br>remuneration during their first three years of<br><br>service on the Board (the net amount received<br><br>after deducting those shares needed to offset<br><br>any costs relating to the acquisition of the<br><br>shares, including taxes).
Other	Directors are compensated for travel and<br><br>accommodation expenses as well as other<br><br>costs directly related to Board and Committee<br><br>work. These are paid in cash.

Proposals of the Board of Directors to the Annual General

Meeting 2026 were published on 29 January 2026. The

Corporate Governance and Nomination Committee has resolved

to recommend to the Board that the annual fees of Board

members would remain at an unchanged level. Consequently,

the Board proposes to the Annual General Meeting 2026 that

the annual fees payable for a term ending at the close of the

next Annual General Meeting be as follows:

▪EUR 440 000 for the Chair of the Board;

▪EUR 210 000 for the Vice Chair of the Board;

▪EUR 185 000 for each other member of the Board;

▪EUR 30 000 each for the Chairs of the Audit Committee and

the Personnel Committee and EUR 20 000 for the Chairs of

the Technology Committee and the Strategy Committee as

an additional annual fee; and

▪EUR 15 000 for each member of the Audit Committee and

the Personnel Committee and EUR 10 000 for each member

of the Technology Committee and the Strategy Committee

as an additional annual fee.

In addition, the Board of Directors proposes that the meeting

fees for Board and Committee meetings remain at the current

level. The meeting fees are based on potential travel required

between the Board member’s home location and the location of

a meeting and are paid for a maximum of seven meetings per

term as follows:

▪EUR 5 000 per meeting requiring intercontinental travel; and

▪EUR 2 000 per meeting requiring intracontinental travel.

Only one meeting fee is paid if the travel covered by the fee

includes several meetings of the Board and its Committees. The

Board also proposes that members of the Board shall be

compensated for travel and accommodation expenses as well as

other costs directly related to Board and Board Committee work.

| 59 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

The Remuneration Policy for the President and CEO

Remuneration elements	Purpose and link to strategy	Operation including maximum opportunity	Performance metrics
Base salary	To attract and retain individuals<br><br>with the requisite level of<br><br>knowledge, skills and experience to<br><br>lead our businesses	Base salary is normally reviewed annually taking into consideration a variety of<br><br>factors, including, for example, performance of the Company and the individual,<br><br>remuneration of our global peer group, changes in individual responsibilities and<br><br>employee salary increases.	Whilst there are no performance targets attached to the payment of base salary,<br><br>performance is considered as context in the annual salary review.
Pension	To provide retirement benefit aligned<br><br>with local country practice	Pension arrangements reflect the relevant market practice and may evolve year-<br><br>on-year. The President and CEO may participate in the applicable pension<br><br>programs available to other executives in the country of employment. Details of<br><br>the actual pension arrangement will be shown in the annual Remuneration Report.<br><br>In Finland, the President and CEO participates in the Finnish statutory Employee’s<br><br>Pension Act (TyEL), and there is no supplementary pension plan.	N/A
Other benefits	To provide a competitive level of<br><br>benefits and to support recruitment<br><br>and retention	Benefits will be provided in line with local market practice in the country of<br><br>employment and may evolve year-on-year. Benefits may include, for example, a<br><br>company car (or cash equivalent), risk benefits (for example life and disability<br><br>insurance) and employer contributions to insurance plans (for example medical<br><br>insurance).<br><br>Additional beneﬁts and allowances may be offered in certain circumstances such<br><br>as relocation support, expatriate allowances, and temporary living and<br><br>transportation expenses aligned with Nokia’s mobility policy.<br><br>The President and CEO is also eligible to participate in similar programs which may<br><br>be offered to Nokia’s other employees such as the voluntary all-employee share<br><br>purchase plan.	N/A
Short-term incentive<br><br>(STI)	To incentivize and reward performance<br><br>against delivery of the annual business<br><br>plan	STI is based on performance against one-year financial and non-financial targets<br><br>and normally paid in cash.<br><br>Minimum payout is 0% of base salary.<br><br>Target opportunity is 125% of base salary.<br><br>Maximum opportunity is 281.25% of base salary.<br><br>The malus and clawback conditions apply in accordance with Company clawback<br><br>policies.	Performance measures, weightings and targets for the selected measures are set<br><br>annually by the Board to ensure they continue to support Nokia’s short-term<br><br>business strategy. These measures can vary from year to year to reflect business<br><br>priorities and may include a balance of financial, key operational and non-financial<br><br>measures (including but not limited to strategic, customer satisfaction, employee<br><br>engagement, environmental, social, governance or other sustainability-related<br><br>measures).<br><br>Although the performance measures and weighting may differ year to year<br><br>reflecting the business priorities, in any given year, a minimum of 60% of measures<br><br>will be based on financial criteria.<br><br>Targets for the short-term incentives are set at the start of the year, in the context<br><br>of analyst expectations and the annual plan, selecting measures that align to the<br><br>delivery of Nokia’s strategy.<br><br>The performance metrics and weightings are disclosed retrospectively in the annual<br><br>Remuneration Report.

| 60 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- || Remuneration elements | Purpose and link to strategy | Operation including maximum opportunity | Performance metrics | | --- | --- | --- | --- | | Long-term incentive (LTI) – performance share award | To reward for delivery of sustainable long-term performance, align the President and CEO’s interests with those of shareholders, and aid retention | Long-term incentive awards may be made annually in performance shares, vesting normally after three years dependent on the achievement of performance conditions measured over a three-year period. Target award level is 200% of base salary at the date of grant, with maximum vesting of 400% of base salary. The malus and clawback conditions apply in accordance with Company clawback policies. | Performance measures, weightings and target metrics for the selected measures are set by the Board to ensure they continue to support Nokia’s long-term business strategy and financial success. Targets are set in the context of Nokia’s long-term plans and analyst forecasts, ensuring that they are considered both achievable and sufficiently stretching. The Board may choose different measures and weightings each year based on the business plan. The measures consist of at least 60% financial and/or share price- related measures. The Performance metrics and weightings are disclosed retrospectively in the annual Remuneration Report. | | Long-term incentive (LTI) - restricted share award | To incentivize longer-term decision making for sustainable shareholder value creation and to aid retention | Restricted share awards of up to 100% of base salary may be granted, vesting after at least three years, subject to financial underpins and continued service. The malus and clawback conditions apply in accordance with Company clawback policies. | Financial underpins are determined by the Board to ensure alignment with underlying company performance and shareholder experience. The Board may choose different financial underpins for each grant based on the business plan and strategic priority. | | Enhanced LTI (eLTI) – co-investment arrangement | To further align the President and CEO’s interests with Nokia’s long-term success and shareholder interests | Unlike the LTI performance share award, this is not an annual award and is only granted in exceptional circumstances. The President and CEO may be invited, at the discretion of the Board, to purchase investment shares of up to 200% of base salary, and in return, receive two matching shares for every one investment share purchased. The matching shares are delivered in the form of performance shares, typically subject to the same performance conditions as for the LTI performance share award, with a three-year performance and vesting period. The minimum vesting of the matching shares is 0% of base salary and maximum vesting is two times grant level. The malus and clawback conditions apply in accordance with Company clawback policies. | The performance metrics, targets and weightings for the matching shares are typically the same as those for LTI performance shares granted in the same year. | | Shareholding requirement | Align the President and CEO’s interests with those of shareholders and ensure any decisions made are in the long-term interest of the Company | The President and CEO is required to build and maintain a shareholding equivalent to 300% of base salary, to be achieved normally within five years of appointment. | N/A |

| 61 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Pay mix and remuneration scenarios for the President and CEO

Aligned with Nokia’s pay-for-performance remuneration

principle, performance-based remuneration is emphasized over

base salary. The chart below illustrates how the proportion of

the President and CEO’s remuneration package varies at the

minimum, target and maximum levels of performance. A

significant proportion of remuneration is linked to performance,

especially at maximum performance levels. Actual pay mix is

influenced by the extent to which the performance targets set

for the STI and LTI are achieved and may vary from the

scenarios below.

The long-term incentive vesting outcomes in the chart below

ignore share price movement from grant to vest. The eLTI is not

included in this analysis as it is not an annual award and is only

granted in exceptional circumstances. The vesting outcome of

the matching performance shares under the eLTI would be

dependent, besides the performance, on the value of the

investment, which could range from 0% to 200% of base salary

for the President and CEO. The minimum and maximum vesting

levels for the matching performance shares are provided in the

above summary table of the remuneration elements.

President and CEO pay mix scenarios

322156907004616

Share ownership requirement

Nokia believes that it is desirable for its executives to own

shares in Nokia to align their interests with those of

shareholders and to ensure that their decisions are in the long-

term interest of the Company. The President and CEO is

required to own three times his or her annual base salary in

Nokia shares and is given a period of five years from

appointment to achieve the required level of share ownership.

Malus and clawback

The malus and clawback conditions apply in accordance with

Company’s clawback policies to the short-term and long-term

incentives for all participants, including the President and CEO.

Nokia’s Executive Officer Clawback Policy is applied in the case

of any erroneously awarded compensation due to restatement

in the Company’s Financial Statements with a three-year

lookback period, resulting in the reclaiming of amounts then-

outstanding or previously paid.

Additionally, under the Nokia Incentive Compensation Clawback

Policy, unless the Personnel Committee otherwise decides, the

recoupment of previously awarded, paid or received

compensation is triggered in situations of reputational damage,

willful breach of internal control procedures, gross misconduct

and restatement of financial statement (clawback triggers) with

a recoupment period not exceeding three years in total.

Remuneration on recruitment

Our policy on recruitment is to offer a remuneration package

that is sufficient to attract, retain and motivate the individual

57%

with the right skills for the required role.

On occasion, we may offer buy-out awards to compensate for a

candidate’s forfeited awards on leaving a previous employer.

24%

Such buy-out awards would, where possible, reflect the nature

of the forfeited awards in terms of delivery mechanism, time

100%

19%

horizons, attributed expected value and performance

conditions.

Termination provisions

In the event of a termination of employment, any payable

remuneration is determined in line with legal advice regarding

local legislation, country policies, contractual obligations and

the rules of the applicable incentive and benefit plans. Payment

in lieu of notice will not typically exceed the value of 12 months’

remuneration (including base salary, benefits, STI and pension

contribution, if applicable). The treatment of equity incentive

awards may depend on the circumstances of the departure. In

the event of death, permanent disability or retirement,

unvested awards are normally allowed to be retained. These

awards will vest either on departure or at normal vesting date,

subject to performance (if applicable) and time proration, unless

the Board of Directors determines otherwise. Current

termination provisions of the President and CEO’s service

agreement are described in the Remuneration Report.

Change of control arrangements, if any, are based on a double

trigger structure, which means that both a specified change of

control event and termination of the individual’s employment

must take place for any change of control-based severance

payment to materialize.

| 62 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration governance

We manage our remuneration through clearly defined

processes, with well-defined governance principles, ensuring

that no individual is involved in the decision making related to

their own remuneration, and that there is appropriate oversight

of any remuneration decision. Remuneration of the Board is

annually presented to shareholders for approval at the Annual

General Meeting. The Board submits its proposal to the Annual

General Meeting on the recommendation of the Board’s

Corporate Governance and Nomination Committee, which

actively considers and evaluates the appropriate level and

structure of directors’ remuneration. Shareholders also

authorize the Board to resolve to issue shares, for example to

settle Nokia’s equity-based incentive plans, based on the

proposal of the Board.

The Board of Directors approves, and the independent

members of the Board confirm, the remuneration of the

President and CEO, upon recommendation of the Personnel

Committee.

The Personnel Committee consults regularly with the President

and CEO and the Chief People Officer. The President and CEO

has an active role in the remuneration governance and

performance management processes for the GLT and the wider

employee population at Nokia. However, the President and CEO

or the Chief Personnel Officer are not present when their own

remuneration is reviewed or discussed. This enables the

Personnel Committee to be mindful of employee pay and

conditions across the broader employee population.

The Committee has the power, in its sole discretion, to retain

remuneration advisers to assist the Personnel Committee in

evaluating executive remuneration. During 2025, the Personnel

Committee engaged Alvarez & Marsal, an independent external

adviser, to assist in the review and determination of executive

remuneration and program design, as well as to provide insight

into market trends. Willis Towers Watson was retained as a

market data provider for the Committee.

The Personnel Committee Chair regularly engages with

shareholders to discuss their views on our remuneration

policies, programs and associated disclosures and reflects on

their feedback. These insights are taken account of in the

Committee’s and Board’s decision-making process for executive

remuneration.

ENG AR 02032026 (11).jpg

Work of the Personnel Committee

The Personnel Committee convened five times during

2025 with a general theme for each meeting

1 Approvals & reporting

2 Philosophy & structure

3 Long-term direction & market review

4 Planning

January

▪2024 STI performance outcome

▪2025 STI and LTI metrics and target setting

▪President and CEO remuneration review

▪Equity plan vesting and granting during 2025

▪Remuneration Report for 2024

June

▪2025 Annual General Meeting season review

▪GLT remuneration review

▪Culture update

▪GLT succession planning

July

▪Remuneration Policy review

▪GLT succession planning

▪Inflight LTI awards performance update

▪Market practice update

▪People risks including physical safety review

September

▪Workforce demographics

▪2026 STI and LTI performance metrics initial discussion

December

▪Preliminary review of metrics and targets for 2026 STI

and LTI

▪2026 equity plan budget and allocation

▪Proxy agency and shareholder consultation feedback

▪Planning of Remuneration Report for 2025

▪Annual GLT and CEO benchmarking

▪Executive shareholding assessment

▪Personnel Committee charter review

| 63 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Remuneration of the Nokia Group

Leadership Team in 2025

The remuneration of the members of the GLT (excluding the

President and CEO) consists of base salary, other benefits, and

short-term and long-term incentives. Short-term incentive

plans are based on rewarding the delivery of business

performance utilizing certain, or all, of the following metrics as

appropriate to the member’s role: comparable operating profit

in constant currency(1), cash release(1) and ESG-related

measures such as health & safety.

Executives in the GLT are subject to the same remuneration

policy framework as the President and CEO. This includes being

subject to the malus and clawback conditions and shareholding

requirements. The shareholding requirement for members of

the GLT is two times their annual base salary, built within a

period of five years of their appointment.

At the end of 2025, the Group Leadership Team consisted of 12 persons split between Finland, UK and the United States. For

information regarding the current Group Leadership Team composition, refer to the Corporate Governance Statement.

Name	Position in 2025	Appointment date
Justin Hotard	President and CEO	1 April 2025
Louise Fisk	Chief Communications Officer<br><br>(currently Chief Communications and Marketing Officer)	18 October 2024
Patrik Hammarén	President of Nokia Technologies<br><br>(currently President of Technology Standards)	18 October 2024
Victoria Hanrahan	Chief of Staff to the President and CEO	16 June 2025
Mikko Hautala	Chief Geopolitical and Government Relations Officer	1 November 2024
David Heard	President of Network Infrastructure	1 July 2025
Pallavi Mahajan	Chief Technology and AI Officer	1 October 2025
Esa Niinimäki	Chief Legal Officer (currently Chief Legal and Administrative Officer) and<br><br>interim Chief People Officer	25 January 2023
Konstanty Owczarek	Chief Corporate Development Officer	1 October 2025
Raghav Sahgal	President of Cloud and Network Services (currently Chief Customer Officer)	1 June 2020
Tommi Uitto	President of Mobile Networks	31 January 2019
Marco Wirén	Chief Financial Officer	1 September 2020

Remuneration of the Group Leadership Team members in 2025

Remuneration of the Group Leadership Team (excluding the President and CEO) in 2024 and 2025, in the aggregate, was as follows:

EURm⁽¹⁾	2025	2024
Salary, short-term incentives and other compensation(2)	14.3	11.3
Long-term incentives(3)	3.1	3.9
Total	17.4	15.2

(1)The values represent each member’s time on the Group Leadership Team.

(2)Short-term incentives represent amounts earned in respect of 2025 performance. Other compensation includes mobility-related payments, local benefits and pension costs.

(3)The amounts represent the equity awards that vested in 2025 and 2024.

The members of the Group Leadership Team (excluding the President and CEO) were awarded the following equity awards under the

Nokia equity program in 2025:

Award	Units awarded(1)	Grant date fair value (EUR)	Grant date	Vesting
Performance share award(2)	2 552 690	11 289 683	7 July 2025, 13 October 2025	Q3 & Q4 2028
Restricted share award(3)	1 957 270	8 663 881	7 July 2025, 13 October 2025	Q3 & Q4 2026, Q3 & Q4<br><br>2027, Q3 & Q4 2028

(1) Comparable operating profit in constant currency and cash flow less comparable

operating profit (i.e. cash release) are financial measures used only in calculation

of short-term incentives for the President and CEO and the members of the Global

Leadership Team. These measures are not used to communicate the

management’s view of Nokia’s financial performance, and hence they are not

considered as alternative performance measures. For the definition and

reconciliation of non-IFRS measures to the most directly comparable IFRS

measure, refer to the ”Alternative performance measures” section.

(1)Includes units awarded to persons who were Group Leadership Team members during 2025.

(2)The 2025 performance shares have a three-year performance period based on 50% relative total shareholder return, 40% three-year cumulative EPS and 10% GHG emission

reduction scope 1, 2 and 3 targets. The maximum payout is 200% of target subject to maximum performance against the performance criteria. Vesting is subject to continued

employment.

(3)Vesting of each tranche of the restricted share awards is conditional on continued employment.

| 64 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information | | --- |

Unvested equity awards held by the Group Leadership Team, including the President and CEO

The following table sets forth the potential aggregate ownership interest through the holding of equity-based long-term incentives of

the Group Leadership Team in office, including the President and CEO, at 31 December 2025:

	Shares receivable through<br><br>performance<br><br>shares at grant	Shares receivable through<br><br>performance<br><br>shares at maximum(4)	Shares receivable through<br><br>restricted shares
Number of equity awards held by the Group Leadership Team(1)	7 659 499	15 307 998	6 545 123
% of the outstanding shares(2)	0.14%	0.27%	0.12%
% of the total outstanding equity incentives (per instrument)(3)	19.25%	20.09%	4.67%

(1)Includes the 12 members of the Group Leadership Team in office at 31 December 2025.

(2)The percentages are calculated in relation to the outstanding number of shares and total voting rights of Nokia at 31 December 2025, excluding shares held by the Nokia Group.

No member of the Group Leadership Team owned more than 1% of the outstanding Nokia shares.

(3)The percentages are calculated in relation to the total outstanding equity incentives per instrument.

(4)At maximum performance, under the performance share plans outstanding at 31 December 2025, the payout would be 200% and the table reflects this potential maximum

payout.

Employee Share Purchase Plan

All eligible Nokia employees, including the President and CEO and our GLT members, can participate in the Employee Share Purchase

Plan, by making contributions from their monthly net salaries (up to a cap) to purchase Nokia shares at market value. Participants will

receive one matching share for every two purchased shares they still hold at the end of the applicable annual plan cycle. Until the

matching shares are delivered, the participants have no shareholder rights, such as voting or dividend rights associated with the

matching shares.

65	Nokia Annual Report on Form 20-F 2025

Operating and financial

review and prospects

Selected financial data	66
Operating and financial review	67
Results of operations	67
Discontinued operations	70
Results of segments	71
Network Infrastructure	71
Cloud and Network Services	72
Mobile Networks	73
Nokia Technologies	74
Group Common and Other	75
Liquidity and capital resources	76
Financial position	76
Cash flow	76	Financial assets and debt	77
---	---
Venture fund investments and commitments	78
Treasury policy	78
Foreign exchange impact	78
Business integrity	79
Environment	84
Shares and shareholders	88
Share details	88
Shareholders	91
Articles of Association	92
Risk factors	94
Significant subsequent events	113

| 66 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects •Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Selected financial data

The below table presents selected financial and other measures for the Nokia Group as of and for the financial years ended on 31 December 2025, 2024 and 2023.

The information has been derived from Nokia’s consolidated financial statements prepared in accordance with IFRS Accounting Standards.

EURm (except for percentage and personnel data)	2025	2024	2023
From the consolidated income statement
Net sales	19 889	19 220	21 138
Operating profit(1)	885	1 970	1 733
% of net sales	4.4%	10.2%	8.2%
Profit before tax	915	2 091	1 469
Profit from continuing operations	638	1 711	649
Profit/(loss) from discontinued operations	22	(427)	30
Profit for the year	660	1 284	679
From the consolidated statement of financial position
Non-current assets	21 805	21 162	21 694
Current assets	15 792	17 987	18 087
Assets held for sale	—	—	79
Total assets	37 597	39 149	39 860
Total shareholders' equity	20 967	20 657	20 537
Non-controlling interests	91	90	91
Total equity	21 058	20 747	20 628
Interest-bearing liabilities(2)	3 413	3 887	4 191
Lease liabilities(2)	1 000	863	997
Provisions(2)	1 416	1 228	1 262
Other liabilities(2)	10 710	12 424	12 782
Total shareholders’ equity and liabilities	37 597	39 149	39 860
Other information
Research and development expenses(3)	(4 855)	(4 512)	(4 277)
% of net sales	(24.4)%	(23.5)%	(20.2)%
Capital expenditure(4)	(606)	(472)	(652)
% of net sales	(3.0)%	(2.5)%	(3.1)%
Personnel expenses(3)	7 831	7 563	7 294
Average number of employees(3)	78 005	78 434	84 795
Order backlog, EUR billion(5)	19.5	20.0	22.0
m (except for percentage and personnel data)	2024	2023
---	---	---
Key financial indicators and ratios
Earnings per share attributable to equity holders of the parent
Basic earnings per share,
Continuing operations	0.31	0.11
Profit for the year	0.23	0.12
Diluted earnings per share,
Continuing operations	0.31	0.11
Profit for the year	0.23	0.12
Proposed dividend per share, (6)	0.14	0.13
Return on capital employed %(4)	9.3%	6.6%
Return on shareholders’ equity %(4)	6.2%	3.2%
Equity ratio %(4)	53.0%	51.8%
Net debt to equity (gearing) %(4)	(23.4)%	(21.0)%
Cash and cash equivalents	6 623	6 234
Total cash and interest-bearing financial investments(4)	8 741	8 514
Net cash and interest-bearing financial investments(4)	4 854	4 323
Net cash flows from operating activities	2 493	1 317
Free cash flow(4)	2 021	665

All values are in Euros.

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and administrative

expenses and other operating income to financial income. The comparative amounts for 2024 and 2023 have been recast

accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.

(2)Includes both current and non-current liabilities in the consolidated statement of financial position.

(3)Presented for continuing operations.

(4)Non-IFRS measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures,

refer to the ”Alternative performance measures” section.

(5)Order backlog includes EUR 1.7 billion in 2023 related to discontinued operations sold in 2024.

(6)The Board of Directors proposes to the Annual General Meeting 2026 to be authorized to decide in its discretion on the

distribution of an aggregate maximum of EUR 0.14 per share as dividend from the retained earnings and/or as assets from the

reserve for invested unrestricted equity.

| 67 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Operating and financial review

The financial information included in this “Operating and financial review” section as of and for the

years ended 31 December 2025 and 2024 has been derived from, and should be read in

conjunction with, Nokia’s consolidated financial statements included in this report. For discussion

of the year ended 31 December 2024 compared to the year ended 31 December 2023, please refer

to this section of Nokia’s Annual Report on Form 20-F for the year ended 31 December 2024.

On 28 February 2025, Nokia completed the acquisition of Infinera Corporation (Infinera), pursuant

to the definitive agreement announced on 27 June 2024. Infinera, a San Jose based global supplier

of innovative open optical networking solutions and advanced optical semiconductors, became part

of the Nokia group effective as of the closing, with Nokia holding 100% of its equity and voting

rights. The acquisition is expected to significantly improve Nokia’s scale and profitability in optical

networks, and accelerate Nokia’s growth strategy in data centers and strengthen its presence both

in North America and with hyperscalers. Nokia is reporting the acquired business as part of its

Network Infrastructure segment. For more information, refer to Note 6.2. Acquisitions in the

consolidated financial statements.

In 2025, Nokia completed a strategic review of its venture fund investment activities. As a result,

Nokia no longer views broad-based venture fund investments as having a strategic role and has

initiated a process to scale down these investments. Consequently, the presentation of the results

of venture fund investments as operating activities is no longer considered relevant, and therefore

Nokia is presenting the gains and losses from venture fund investments, including the changes in

fair value and the fund management fees, as financial income. For the segment reporting purposes,

the results of venture fund investments had previously been included in the operating results of

Group Common and Other. The comparative financial information has been recast accordingly. As a

result of the recast, in 2024, selling, general and administrative costs decreased by EUR 18 million,

other operating income decreased by EUR 47 million and financial income increased by EUR 29

million.

Results of operations

Nokia Group

The following table sets forth the segment operating results and the percentage of net sales for

the years indicated.

For the year ended 31 December 2025 compared to the year ended 31 December 2024

	2025		2024
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales	19 889	100.0%	19 220	100.0%	3%
Cost of sales	(11 230)	(56.5)%	(10 356)	(53.9)%	8%
Gross profit	8 659	43.5%	8 864	46.1%	(2)%
Research and development<br><br>expenses	(4 855)	(24.4)%	(4 512)	(23.5)%	8%
Selling, general and<br><br>administrative expenses(1)	(3 073)	(15.5)%	(2 872)	(14.9)%	7%
Other operating income and<br><br>expenses(1)	154	0.8%	490	2.5%	(69)%
Operating profit(1)	885	4.4%	1 970	10.2%	(55)%
Share of results of associated<br><br>companies and joint ventures	19	0.1%	7	0.0%	171%
Financial income and expenses(1)	11	0.1%	114	0.6%	(90)%
Profit before tax	915	4.6%	2 091	10.9%	(56)%
Income tax expense	(277)	(1.4)%	(380)	(2.0)%	(27)%
Profit from continuing<br><br>operations	638	3.2%	1 711	8.9%	(63)%
Profit/(loss) from discontinued<br><br>operations	22	0.1%	(427)	(2.2)%	(105)%
Profit for the year	660	3.3%	1 284	6.7%	(49)%
Attributable to:
Equity holders of the parent	651	3.3%	1 277	6.6%	(49)%
Non-controlling interests	9	0.0%	7	0.0%	29%

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and administrative

expenses and other operating income to financial income. The comparative amounts for 2024 have been recast accordingly. For

more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.

| 68 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Net sales

Net sales in 2025 were EUR 19 889 million, an increase of EUR 669 million, or 3%, compared to EUR

19 220 million in 2024. The acquisition of Infinera contributed EUR 1 258 million to net sales and

changes in foreign exchange rates had a negative impact on net sales of approximately 4%. Beyond

these impacts, the net sales increase was driven by a strong performance in Network

Infrastructure, particularly in Optical Networks with strong demand trends among AI & Cloud

customers.

The following table sets forth distribution of net sales by region for the years indicated.

EURm	2025	2024	Change %
Americas	6 985	6 276	11%
Latin America	784	895	(12)%
North America	6 201	5 381	15%
APAC	4 639	4 549	2%
Greater China	913	1 134	(19)%
India	1 534	1 373	12%
Rest of APAC	2 192	2 042	7%
EMEA	8 265	8 395	(2)%
Europe(1)	6 165	6 362	(3)%
Middle East & Africa	2 100	2 033	3%
Total	19 889	19 220	3%

(1)All Nokia Technologies IPR and licensing net sales are allocated to Finland.

The following table sets forth distribution of net sales by customer type for the years indicated.

EURm	2025	2024	Change %
Telecom providers	15 313	15 085	2%
AI & Cloud and Mission Critical Enterprise & Defense	3 085	2 180	42%
Licensees	1 501	1 928	(22)%
Other(1)	(10)	27	(137)%
Total	19 889	19 220	3%

(1)In 2025, includes eliminations of inter-segment revenues, unallocated items and certain other items. In 2024, includes net sales of

Radio Frequency Systems (RFS), which was managed as a separate entity, and certain other items, such as eliminations of inter-

segment revenues. RFS net sales also include revenue from telecom providers and AI & Cloud and Mission Critical Enterprise &

Defense.

Gross profit

Gross profit in 2025 was EUR 8 659 million, a decrease of EUR 205 million, or 2%, compared to EUR

8 864 million in 2024. The decrease in gross profit was primarily related to a reduction in the profit

contribution from Nokia Technologies which benefited from more than EUR 400 million of one-time

catch up net sales in 2024 and to lesser extent attributable to acquisition related charges of the

Infinera acquisition and a provision for a contractual claim. This was partly offset by the increase in

gross profit related to the Infinera acquisition. Gross profit in 2025 also reflected relatively stable

restructuring and associated charges, which amounted to EUR 148 million in 2025, compared to

EUR 155 million in 2024. Gross margin in 2025 was 43.5%, compared to 46.1% in 2024 due to

these same factors.

Operating expenses

Research and development expenses in 2025 were EUR 4 855 million, an increase of

EUR 343 million, or 8%, compared to EUR 4 512 million in 2024. Research and development

expenses represented 24.4% of the net sales in 2025 compared to 23.5% in 2024. The increase in

research and development expenses was primarily related to the acquisition of Infinera and higher

investment in Network Infrastructure which offset cost savings elsewhere in the business. Research

and development expenses in 2025 contained similar levels of restructuring and associated

charges, which amounted to EUR 137 million in 2025, compared to EUR 135 million in 2024.

Selling, general and administrative expenses in 2025 were EUR 3 073 million, an increase of EUR

201 million compared to EUR 2 872 million in 2024. Selling, general and administrative expenses

represented 15.5% of the net sales in 2025 compared to 14.9% in 2024. The increase in selling,

general and administrative expenses was driven by higher costs associated with the acquisition of

Infinera. This was somewhat offset by ongoing cost savings actions. 2025 included restructuring

and associated charges of EUR 191 million, compared to EUR 145 million in 2024. In 2025, selling,

general and administrative expenses included amortization and depreciation of acquired intangible

assets and property, plant and equipment of EUR 358 million, compared to EUR 294 million in 2024.

Other operating income and expenses in 2025 were a net income of EUR 154 million, a decrease of

EUR 336 million, compared to a net income of EUR 490 million in 2024. The decrease in other

operating income and expenses was primarily driven by the absence of a gain on sale of TD Tech and

a gain on sale of the Device Management and Service Management Platform businesses of EUR 191

million and EUR 68 million, respectively, that benefited 2024. In addition, the reversals of expected

credit losses on trade receivables reduced by EUR 77 million and gains on sale of property, plant and

equipment decreased by EUR 73 million, compared to 2024. The decrease in other operating income

and expenses was partially offset by the impact of hedging which was positive EUR 81 million in

2025, compared to a positive impact of EUR 23 million in 2024.

| 69 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Operating profit

Operating profit in 2025 was EUR 885 million, a decrease of EUR 1 085 million, compared to an

operating profit of EUR 1 970 million in 2024. The decrease in operating profit was due to lower

gross profit as described above, and the net negative fluctuation in other operating income and

expenses, in addition to which research and development expenses and selling, general and

administrative expenses were higher related to the Infinera acquisition. Operating margin in 2025

was 4.4%, compared to 10.2% in 2024.

Financial income and expenses

Financial income and expenses were a net income of EUR 11 million in 2025, a negative fluctuation

of EUR 103 million, compared to a net income of EUR 114 million in 2024. The net negative

fluctuation in financial income and expenses mainly resulted from decrease in interest income on

financial investments of EUR 135 million and net negative fluctuation in the results of venture fund

investments of EUR 95 million partly offset by decrease in interest expense on interest-bearing

liabilities of EUR 68 million.

Profit before tax

Profit before tax in 2025 was EUR 915 million, a decrease of EUR 1 176 million, compared to

EUR 2 091 million in 2024.

Income tax

Income taxes were a net expense of EUR 277 million in 2025, a net positive fluctuation of EUR 103

million compared to a net expense of EUR 380 million in 2024. The positive fluctuation in net

income taxes was primarily attributable to decrease in the profit before tax year-over-year, and to

lesser extent to the change in geographical sales and profit mix. For more details on these items,

please refer to Note 2.5. Income taxes in the consolidated financial statements.

Profit from continuing operations

Profit from continuing operations in 2025 was EUR 638 million, a decrease of EUR 1 073 million,

compared to a profit of EUR 1 711 million in 2024. The change was due to the lower operating

profit and the net negative fluctuation in financial income and expenses, partially offset by the

lower income tax expenses.

EPS from continuing operations in 2025 was EUR 0.12 (basic) and EUR 0.11 (diluted) compared to

EUR 0.31 (basic) and EUR 0.31 (diluted) in 2024.

Profit/loss from discontinued operations

Profit from discontinued operations in 2025 was EUR 22 million, a change of EUR 449 million,

compared to a loss of EUR 427 million in 2024. For discussion of results on discontinued

operations, refer to Discontinued operations section below.

Profit for the year

Profit for the year in 2025 was EUR 660 million, a decrease of EUR 624 million, compared to a profit

of EUR 1 284 million in 2024. The change in profit for the year was primarily due to the lower profit

from continuing operations.

EPS in 2025 was EUR 0.12 (basic) and EUR 0.12 (diluted) compared to EUR 0.23 (basic) and EUR 0.23

(diluted) in 2024.

Order backlog

At 31 December 2025, the order backlog amounted to EUR 19.5 billion compared to EUR 20.0

billion at 31 December 2024. The slight decline in order backlog year-on-year primarily related to

changes in foreign exchange rates as a significant portion of Nokia’s orders are in US Dollars. Nokia

Technologies backlog declined due to its normal contract cycle as Nokia recognises revenue over

time from multi-year contracts. Backlog increased in Network Infrastructure and Mobile Networks

and decreased in Cloud and Network Services.

Management has estimated that the order backlog will be recognized as revenue as follows:

	2025	2024
Within 1 year	57%	53%
2-3 years	28%	27%
More than 3 years	15%	20%
Total	100%	100%

| 70 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Cost savings program

On 19 October 2023, Nokia announced actions being taken across segments to address the

challenging market environment that the company faced. The company will reduce its cost base

and increase operational efficiency while protecting its R&D capacity and commitment to

technology leadership. Nokia targets to lower its cost base on a gross basis (i.e. before inflation) by

between EUR 800 million and EUR 1 200 million by the end of 2026 compared to 2023, assuming

on-target variable pay in both periods. This represents a 10-15% reduction in personnel expenses.

The program is expected to lead to a 72 000–77 000 employee organization compared to the

86 000 employees Nokia had when the program was announced. The headcount figures represent

the originally planned headcount targets and do not take into consideration the completed

divestment of Submarine Networks or planned divestments or acquisitions.

Actual headcount at 31 December 2024 was 75 600. The plan does not reflect the additional

headcount coming from the acquisition of Infinera which was completed in Q1 2025. The

headcount at 31 December 2025 would have been 74 100 had Nokia not acquired Infinera.

The program is expected to deliver savings on a net basis but the magnitude will depend on

inflation. The cost savings are expected to primarily be achieved in Mobile Networks, Cloud and

Network Services and Nokia’s corporate functions. One-time restructuring charges and cash

outflows of the program are expected to be similar to the annual cost savings achieved.

The current plan envisages achieving gross cost savings of EUR 1 200 million within the 2024–2026

program although this remains subject to change depending on the evolution of end market

demand. This includes the expected gross cost savings along with the associated restructuring

charges and cash outflows for the program. Nokia expects approximately 70% of the savings to be

achieved within operating expenses and 30% within cost of sales. By segments, approximately

50-60% of the savings are expected to be achieved within Mobile Networks, 30% within Cloud and

Network Services and the remaining 10-20% between Network Infrastructure and corporate center.

Discontinued operations

For the year ended 31 December 2025 compared to the year ended 31 December 2024

The following table sets forth the results for discontinued operations, and the percentage of net

sales for the years indicated. On 27 June 2024, Nokia announced it had entered into a put option

agreement to sell its wholly owned subsidiary Alcatel Submarine Networks (ASN) to the French

State. As a result, Nokia classified the Submarine Networks business as a discontinued operation

and recast the comparative amounts accordingly. The sale was completed on 31 December 2024.

	2025		2024
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales	—	100.0%	1 059	100.0%	(100)%
Expenses	—	0.0%	(989)	(93.4)%	(100)%
Operating profit	—	0.0%	70	6.6%	(100)%
Financial income and expenses	—	0.0%	(7)	(0.7)%	(100)%
Impairment loss recognized on<br><br>the remeasurement to fair value<br><br>less costs to sell	—	0.0%	(514)	(48.5)%	(100)%
Gain on sale	22	0.0%	29	2.7%	(24)%
Profit/(loss) from discontinued<br><br>operations before tax	22	0.0%	(422)	(39.8)%	(105)%
Income tax expense	—	0.0%	(5)	(0.5)%	(100)%
Profit/(loss) from discontinued<br><br>operations⁽¹⁾	22	0.0%	(427)	(40.3)%	(105)%

(1)Profit/loss from discontinued operations is attributable to the equity holders of the parent in its entirety.

Considering Nokia had completed the sale of ASN by the end of 2024, Nokia had no functioning

discontinued operations during 2025. The only impact to Nokia’s financial performance in 2025

from discontinued operations was a EUR 22 million gain on sale which relates to positive post-

closing purchase price adjustments and an earn-out mechanism related to ASN’s financial

performance during 2025 exceeding the targets.

| 71 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Results of segments

During 2025, Nokia had four operating and reportable segments for financial reporting purposes:

(1) Network Infrastructure, (2) Cloud and Network Services, (3) Mobile Networks and (4) Nokia

Technologies. Nokia also presents segment-level information for Group Common and Other. The

amounts presented in this “Results of segments” section for each reportable segment and Group

Common and Other represent the amounts reported to the management for the purpose of

assessing performance and making decisions about resource allocation. Certain costs and revenue

adjustments are not allocated to the segments for this purpose. For more information on Nokia’s

operational and reporting structure as well as the reconciliation of reportable segment measures to

those of the Nokia Group, refer to Note 2.2. Segment information, in the consolidated financial

statements.

Network Infrastructure

For the year ended 31 December 2025 compared to the year ended 31 December 2024

The following table sets forth the segment operating results and the percentage of net sales for

the years indicated.

	2025		2024
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales(1)	7 986	100.0%	6 518	100.0%	23%
Cost of sales	(4 700)	(58.9)%	(3 781)	(58.0)%	24%
Gross profit	3 286	41.1%	2 737	42.0%	20%
Research and development<br><br>expenses	(1 536)	(19.2)%	(1 207)	(18.5)%	27%
Selling, general and administrative<br><br>expenses	(985)	(12.3)%	(815)	(12.5)%	21%
Other operating income and<br><br>expenses	15	0.2%	46	0.7%	(67)%
Operating profit	780	9.8%	761	11.7%	2%

(1)In 2025, net sales include Optical Networks net sales of EUR 3 019 million, IP Networks net sales of EUR 2 594 million and Fixed

Networks net sales of EUR 2 373 million. In 2024, net sales include Optical Networks net sales of EUR 1 636 million, IP Networks

net sales of EUR 2 583 million and Fixed Networks net sales of EUR 2 299 million.

Net sales

Network Infrastructure net sales in 2025 were EUR 7 986 million, an increase of EUR 1 468 million,

or 23%, compared to EUR 6 518 million in 2024. The acquisition of Infinera at the end of February

contributed EUR 1 273 million in net sales growth. Nokia saw growth on an organic basis in all three

of the units within Network Infrastructure while foreign exchange rate fluctuations had an

approximately 4% negative impact on net sales for Network Infrastructure.

Optical Networks net sales were EUR 3 019 million in 2025, an increase of EUR 1 383 million, or

85%, compared to EUR 1 636 million in 2024. The acquisition of Infinera at the end of February

contributed EUR 1 273 million in net sales growth. Foreign exchange rate fluctuations had an

approximately 5% negative impact on net sales. Demand increased from AI & Cloud and Mission

Critical Enterprise & Defense customers while demand from telecom providers remained largely

stable.

IP Networks net sales were EUR 2 594 million in 2025, an increase of EUR 11 million compared to

EUR 2 583 million in 2024. Foreign exchange rate fluctuations had an approximately 5% negative

impact on net sales. Net sales in IP Networks increased in 2025, as growth in sales to AI & Cloud and

Mission Critical Enterprise & Defense offset a slight decline in sales to telecom providers.

Fixed Networks net sales were EUR 2 373 million in 2025, an increase of EUR 74 million, or 3%,

compared to EUR 2 299 million in 2024. Foreign exchange rate fluctuations had an approximately

4% negative impact on net sales. The increase in Fixed Networks net sales reflected growth in the

fiber product families and fixed wireless access, offsetting some declines in product areas that are

being deprioritized such as Site Implementation and Outside Plant.

The following table sets forth distribution of net sales by region for the years indicated.

EURm	2025	2024	Change %
Americas	3 688	2 726	35%
APAC	1 648	1 426	16%
EMEA	2 650	2 366	12%
Total	7 986	6 518	23%

Gross profit

Network Infrastructure gross profit in 2025 was EUR 3 286 million, an increase of EUR 549 million,

or 20%, compared to EUR 2 737 million in 2024. Network Infrastructure gross margin in 2025 was

41.1%, compared to 42.0% in 2024. Gross profit increased primarily related to the acquisition of

Infinera. Gross margin declined, reflecting changes in product mix in the year.

Operating expenses

Network Infrastructure research and development expenses were EUR 1 536 million in 2025, an

increase of EUR 329 million, or 27% compared to EUR 1 207 million in 2024. The increase in

research and development expenses reflected the acquisition of Infinera and investments in future

growth opportunities.

Network Infrastructure selling, general and administrative expenses were EUR 985 million in 2025,

an increase of EUR 170 million, or 21%, compared to EUR 815 million in 2024. The increase in

selling, general and administrative expenses largely reflected the acquisition of Infinera and

investments in sales resources for future growth opportunities.

Network Infrastructure other operating income and expenses was an income of EUR 15 million in

2025, a change of EUR 31 million compared to an income of EUR 46 million in 2024. The change in

other operating income and expenses was mainly due to lower proceeds from the sale of digital

assets. The other operating income was primarily related to hedging.

Operating profit

Network Infrastructure operating profit was EUR 780 million in 2025, an increase of EUR 19 million,

or 2%, compared to EUR 761 million in 2024. Network Infrastructure operating margin in 2025 was

9.8%, compared to 11.7% in 2024.

| 72 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Cloud and Network Services

For the year ended 31 December 2025 compared to the year ended 31 December 2024

The following table sets forth the segment operating results and the percentage of net sales for

the years indicated.

	2025		2024⁽¹⁾
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales	2 606	100.0%	2 589	100.0%	1%
Cost of sales	(1 307)	(50.2)%	(1 432)	(55.3)%	(9)%
Gross profit	1 299	49.8%	1 157	44.7%	12%
Research and development<br><br>expenses	(567)	(21.8)%	(550)	(21.3)%	3%
Selling, general and<br><br>administrative expenses	(421)	(16.2)%	(444)	(17.2)%	(5)%
Other operating income and<br><br>expenses	27	1.0%	43	1.7%	(37)%
Operating profit	338	13.0%	206	8.0%	64%

(1)In 2025, Nokia moved Managed Services business from Cloud and Network Services to Mobile Networks. The comparative amounts

for 2024 have been recast accordingly. For more information, refer to Note 2.2. Segment information in the consolidated financial

statements.

Net sales

Cloud and Network Services net sales in 2025 were EUR 2 606 million, an increase of EUR 17 million,

or 1%, compared to EUR 2 589 million in 2024. Foreign exchange rate fluctuations had an

approximately 5% negative impact on net sales. Enterprise Campus Edge and Core Networks grew,

but this was partially offset by the impact of the disposal of the Device Management and Service

Management Platform businesses during 2024.

The following table sets forth distribution of net sales by region for the years indicated.

EURm	2025	2024	Change %
Americas	1 120	1 153	(3)%
APAC	529	517	2%
EMEA	957	919	4%
Total	2 606	2 589	1%

Gross profit

Cloud and Network Services gross profit in 2025 was EUR 1 299 million, an increase of

EUR 142 million, or 12%, compared to EUR 1 157 million in 2024. Cloud and Network Services gross

margin in 2025 was 49.8%, compared to 44.7% in 2024. Gross profit increased mainly as a result

of higher gross margin reflecting favorable product mix.

Operating expenses

Cloud and Network Services research and development expenses were EUR 567 million in 2025, an

increase of EUR 17 million or 3%, compared to EUR 550 million in 2024. The increase in research

and development expenses largely reflected increased investments in Core Networks.

Cloud and Network Services selling, general and administrative expenses were EUR 421 million in

2025, a decrease of EUR 23 million, or 5%, compared to EUR 444 million in 2024. The decrease in

selling, general and administrative expenses largely reflected continued discipline on cost control.

Cloud and Network Services other operating income and expenses was an income of EUR 27 million

in 2025, a change of EUR 16 million compared to an income of EUR 43 million in 2024.

Operating profit

Cloud and Network Services operating profit was EUR 338 million in 2025, an increase of

EUR 132 million, compared to EUR 206 million in 2024. Cloud and Network Services operating

margin in 2025 was 13.0% compared to 8.0% in 2024.

| 73 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Mobile Networks

For the year ended 31 December 2025 compared to the year ended 31 December 2024

The following table sets forth the segment operating results and the percentage of net sales for

the years indicated.

	2025		2024⁽¹⁾
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales	7 806	100.0%	8 158	100.0%	(4)%
Cost of sales	(4 914)	(63.0)%	(4 939)	(60.5)%	(1)%
Gross profit	2 892	37.0%	3 219	39.5%	(10)%
Research and development<br><br>expenses	(2 076)	(26.6)%	(2 160)	(26.5)%	(4)%
Selling, general and<br><br>administrative expenses	(687)	(8.8)%	(756)	(9.3)%	(9)%
Other operating income and<br><br>expenses	91	1.2%	149	1.8%	(39)%
Operating profit	220	2.8%	452	5.5%	(51)%

(1)In 2025, Nokia moved Managed Services business from Cloud and Network Services to Mobile Networks. The comparative amounts

for 2024 have been recast accordingly. For more information, refer to Note 2.2. Segment information in the consolidated financial

statements.

Net sales

Mobile Networks net sales in 2025 were EUR 7 806 million, a decrease of EUR 352 million, or 4%,

compared to EUR 8 158 million in 2024. Foreign exchange rate fluctuations had an approximately

4% negative impact on net sales. Net sales declined in the America’s region and APAC. Sales in

APAC declined in Greater China, partially offset by increase in the rest of APAC. Sales in EMEA were

stable.

The following table sets forth distribution of net sales by region for the years indicated.

EURm	2025	2024	Change %
Americas	2 182	2 396	(9)%
APAC	2 464	2 593	(5)%
EMEA	3 160	3 169	0%
Total	7 806	8 158	(4)%

Gross profit

Mobile Networks gross profit in 2025 was EUR 2 892 million, a decrease of EUR 327 million, or 10%,

compared to EUR 3 219 million in 2024. Mobile Networks gross margin in 2025 was 37.0%,

compared to 39.5% in 2024. The decrease in gross profit and gross margin was mainly driven by

two one-time factors. In 2024, Nokia benefited from EUR 150 million of accelerated revenue

recognition related to the AT&T settlement. In 2025, Nokia had a one-time contract settlement

related to a project that started in 2019 which had a net negative effect of EUR 120 million on

gross profit.

Operating expenses

Mobile Networks research and development expenses were EUR 2 076 million in 2025, a decrease

of EUR 84 million, or 4% compared to EUR 2 160 million in 2024. The lower research and

development expenses mainly reflected underlying cost reductions and foreign exchange rate

fluctuations.

Mobile Networks selling, general and administrative expenses were EUR 687 million in 2025, a

decrease of EUR 69 million, or 9%, compared to EUR 756 million in 2024. The decrease in selling,

general and administrative expenses mainly reflected underlying cost reductions and foreign

exchange rate fluctuations.

Mobile Networks other operating income and expenses was an income of EUR 91 million in 2025, a

decline of EUR 58 million compared to an income of EUR 149 million in 2024. The change in other

operating income and expenses was primarily due to lower proceeds from the sale of digital assets.

Operating profit

Mobile Networks operating profit was EUR 220 million in 2025, a decrease of EUR 232 million,

compared to EUR 452 million in 2024. Mobile Networks operating margin was 2.8% in 2025

compared to 5.5% in 2024.

| 74 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Nokia Technologies

For the year ended 31 December 2025 compared to the year ended 31 December 2024

The following table sets forth the segment operating results and the percentage of net sales for

the years indicated.

	2025		2024
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales	1 501	100.0%	1 928	100.0%	(22)%
Cost of sales	—	0.0%	(2)	(0.1)%	(100)%
Gross profit	1 501	100.0%	1 926	99.9%	(22)%
Research and development<br><br>expenses	(309)	(20.6)%	(250)	(13.0)%	24%
Selling, general and<br><br>administrative expenses	(149)	(9.9)%	(163)	(8.5)%	(9)%
Other operating income and<br><br>expenses	16	1.1%	1	0.1%	1 500%
Operating profit	1 059	70.6%	1 514	78.5%	(30)%

Net sales

Nokia Technologies net sales in 2025 were EUR 1 501 million, a decrease of EUR 427 million, or

22%, compared to EUR 1 928 million in 2024. Foreign exchange rate fluctuations had an

approximately 1% negative impact on net sales. The decline in Nokia Technologies net sales was

primarily due to more than EUR 400 million catch-up net sales recognized in 2024, partially offset

by new multimedia deals signed in 2025. Nokia Technologies continued to make good progress in

expanding in areas such as automotive, consumer electronics, IoT and multimedia.

Gross profit

Nokia Technologies gross profit in 2025 was EUR 1 501 million, a decrease of EUR 425 million, or

22%, compared to EUR 1 926 million in 2024. The lower gross profit was due to lower net sales.

Operating expenses

Nokia Technologies research and development expenses in 2025 were EUR 309 million, an increase

of EUR 59 million, or 24%, compared to EUR 250 million in 2024. The increase in research and

development expenses was primarily due to higher investments to drive the creation of intellectual

property and an approximately EUR 20 million impairment charge to previously acquired assets.

Nokia Technologies selling, general and administrative expenses in 2025 were EUR 149 million, a

decrease of EUR 14 million, or 9%, compared to EUR 163 million in 2024. The decrease in selling,

general and administrative expenses was primarily due to lower litigation costs.

Nokia Technologies other operating income and expenses in 2025 was an income of EUR 16 million,

a change of EUR 15 million compared to an income of EUR 1 million in 2024. The change in other

operating income and expenses was primarily related to currency hedging.

Operating profit

Nokia Technologies operating profit in 2025 was EUR 1 059 million, a decrease of EUR 455 million,

or 30%, compared to an operating profit of EUR 1 514 million in 2024. Nokia Technologies

operating margin in 2025 was 70.6% compared to 78.5% in 2024.

| 75 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Group Common and Other

For the year ended 31 December 2025 compared to the year ended 31 December 2024

The following table sets forth the operating results for Group Common and Other, and the

percentage of net sales for the years indicated.

	2025		2024
	EURm	% of net sales	EURm	% of net sales	Change %
Net sales	17	100.0%	34	100.0%	(50)%
Cost of sales	(21)	(123.5)%	(29)	(85.3)%	(28)%
Gross profit	(4)	(23.5)%	5	14.7%	(180)%
Research and development<br><br>expenses	(126)	(741.2)%	(131)	(385.3)%	(4)%
Selling, general and<br><br>administrative expenses(1)	(243)	(1 429.4)%	(227)	(667.6)%	7%
Other operating income and<br><br>expenses(1)	—	0.0%	4	11.8%	(100)%
Operating loss(1)	(373)	(2 194.1)%	(349)	(1 026.5)%	7%

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and

administrative expenses and other operating income to financial income. The comparative amounts for 2024 have been recast

accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.

Net sales

Group Common and Other net sales in 2025 were EUR 17 million, a decrease of EUR 17 million, or

50%, compared to EUR 34 million in 2024. The decrease in Group Common and Other net sales was

related to Radio Frequency Systems, which was substantially divested in 2024.

Gross profit

Group Common and Other gross profit in 2025 was negative EUR 4 million, compared to positive

EUR 5 million in 2024.

Operating expenses

Group Common and Other research and development expenses in 2025 were EUR 126 million, a

decrease of EUR 5 million, or 4%, compared to EUR 131 million in 2024.

Group Common and Other selling, general and administrative expenses in 2025 were EUR 243

million, an increase of EUR 16 million, or 7%, compared to EUR 227 million in 2024.

Group Common and Other other operating income and expenses in 2025 were zero, a net negative

fluctuation of EUR 4 million compared to an income of EUR 4 million in 2024.

Operating loss

Group Common and Other operating loss in 2025 was EUR 373 million, an increase of EUR 24

million, compared to an operating loss of EUR 349 million in 2024.

| 76 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Liquidity and capital resources

Financial position

Cash and cash equivalents

At 31 December 2025, Nokia’s cash and cash equivalents equaled EUR 5 462 million, a decrease of

EUR 1 161 million compared to EUR 6 623 million as of 31 December 2024. The decrease was

primarily attributable to acquisition of businesses of EUR 1 730 million, dividends of EUR 759

million, net cash outflow related to long-term borrowings of EUR 724 million, share repurchases of

EUR 624 million, capital expenditure of EUR 606 million, purchase of unowned share of Nokia

Shanghai Bell of EUR 501 million, partially offset by net cash inflow from operating activities of EUR

2 071 million, proceeds from issuance of shares to NVIDIA of EUR 859 million and net cash inflow

related to interest-bearing financial investments of EUR 765 million.

Total cash and interest-bearing financial investments(1)

At 31 December 2025, Nokia’s total cash and interest-bearing financial investments(1) equaled

EUR 6 791 million, a decrease of EUR 1 950 million, compared to EUR 8 741 million as of 31

December 2024. Decrease was attributable to the decrease in cash and cash equivalents of EUR

1 161 million, current interest-bearing financial investments of EUR 700 million and non-current

interest-bearing financial investments of EUR 89 million.

Net cash and interest-bearing financial investments(1)

At 31 December 2025, Nokia’s net cash and interest-bearing financial investments(1) equaled

EUR 3 378 million, a decrease of EUR 1 476 million, compared to EUR 4 854 million as of 31

December 2024. Decrease was attributable to the decrease in cash and cash equivalents of EUR

1 161 million, current interest-bearing financial investments of EUR 700 million, non-current

interest-bearing financial investments of EUR 89 million and an increase in short-term interest-

bearing liabilities of EUR 115 million, partially offset by a decrease in long-term interest-bearing

liabilities of EUR 589 million.

(1)Non-IFRS measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures,

refer to the “Alternative performance measures” section.

Cash flow

Operating activities

The cash inflow from operating activities in 2025 was EUR 2 071 million, a decrease of

EUR 422 million compared to a cash inflow of EUR 2 493 million in 2024. The decrease was primarily

attributed to a decrease of EUR 716 million in net profit, adjusted for non-cash items, which

equaled EUR 2 725 million compared to EUR 3 441 million in 2024, which was offset by a decrease

in cash tied-up to net working capital of EUR 209 million, compared to EUR 569 million cash tied-up

in 2024. The primary drivers for the decrease in cash tied-up to net working capital were related to

a decrease in liabilities of EUR 333 million compared to a decrease of EUR 609 million in 2024 and

an increase in receivables of EUR 25 million compared to an increase in receivables of EUR 364

million in 2024. This was partly offset by a decrease in inventories of EUR 149 million compared to

a decrease of EUR 404 million in 2024. The increase in receivables during 2025 was primarily driven

by account receivables. The decrease in liabilities during 2025 was primarily due to restructuring

and associated cash outflows and a decrease in trade payables.

In 2025, the cash inflow from operating activities included paid taxes of EUR 396 million, an

increase of EUR 54 million compared to EUR 342 million in 2024, interest received of

EUR 163 million compared to EUR 226 million in 2024 and interest paid of EUR 212 million

compared to EUR 263 million in 2024.

Investing activities

The cash outflow from investing activities was EUR 1 396 million in 2025, compared to a

EUR 117 million cash outflow in 2024. Cash outflows from investing activities was primarily driven

by acquisition of businesses of EUR 1 730 million compared to EUR 37 million in 2024, capital

expenditure of EUR 606 million compared to EUR 472 million in 2024 and purchase of shares in

associated companies of EUR 50 million. These were partially offset by net cash inflow of EUR 765

million of interest-bearing financial investments compared to net cash inflows of EUR 214 million in

2024 and net cash inflow from other financial assets of EUR 69 million compared to EUR 210 million

in 2024.

Major items of capital expenditure in 2025 included investments in R&D and test equipment, lab

and factory infrastructure, strategic patent portfolios and repairs or improvements of sites.

Financing activities

In 2025, the cash outflow from financing activities was EUR 1 610 million, compared to a

EUR 2 003 million cash outflow in 2024. The cash outflows was driven by repayments of long-term

borrowings of EUR 875 million compared to EUR 462 million in 2024, dividend payments of EUR 759

million, compared to EUR 723 million in 2024, share repurchases of EUR 624 million compared to

EUR 680 million in 2024, purchase of unowned share of Nokia Shanghai Bell of EUR 501 million and

payments of the principal portion of lease liabilities of EUR 221 million, compared to EUR 233

million in 2024. These were partially offset by proceeds from issuance of shares to NVIDIA of EUR

859 million and proceeds from long-term borrowings of EUR 151 million, compared to EUR 101

million in 2024.

| 77 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Financial assets and debt

At 31 December 2025, Nokia’s net cash and interest-bearing financial investments(1) equaled

EUR 3 378 million consisting of EUR 6 791 million in total cash and interest-bearing financial

investments(1), and EUR 3 413 million of long-term and short-term interest-bearing liabilities.

Nokia holds total cash and interest-bearing financial investments(1) predominantly in euro.

Interest-bearing financial investments mainly include high-quality money market and fixed income

instruments with strict maturity limits and diversified counterparty risk limits. Nokia also has EUR

2 000 million revolving credit facilities available for liquidity purposes. The facilities have no

financial covenants and remain undrawn.

At 31 December 2025, Nokia’s interest-bearing liabilities consisted of the following liabilities:

Instrument	Currency	Nominal (million)
2.00% Senior Notes		630
4.375% Senior Notes		500
6.50% Senior Notes		74
3.125% Senior Notes		500
6.45% Senior Notes		206
4.375% Sustainability-linked Senior Notes		500
NIB R&D loan		250
6.625% Senior Notes		500
Other borrowings		466

All values are in Euros.

The EUR notes maturing in 2026, 2028 and 2031, as well as the USD notes maturing in 2027 and

2039, are issued by Nokia Corporation, while the USD notes maturing in 2028 and 2029 are issued

by Lucent Technologies Inc., a predecessor to Nokia of America Corporation (Nokia’s wholly-owned

subsidiary, formerly known as Alcatel-Lucent USA Inc.). The loan from the Nordic Investment Bank

(NIB) is drawn by Nokia Corporation. For more information on the interest-bearing liabilities, refer

to Note 5.2. Financial assets and liabilities in the consolidated financial statements.

In March 2025, Nokia established a new EUR 500 million revolving credit facility maturing in March

This facility has a one-year extension option, its pricing is linked to Nokia’s credit ratings, it

has no financial covenants and the facility remains undrawn as of 31 December 2025.(2)

In June 2025, Nokia refinanced its undrawn EUR 1 412 million revolving credit facility maturing in

June 2026 with a new facility in size of EUR 1 500 million maturing in June 2030. The new facility

has two one-year extension options, its pricing is linked to Nokia’s key sustainability targets in

addition to credit ratings, it has no financial covenants and the facility remains undrawn as of 31

December 2025.

In December 2025, Nokia signed a loan facility agreement of EUR 435 million for financing research

and development with the European Investment Bank (EIB). The availability period of the loan

facility ends in December 2027. The loan facility was not disbursed as of 31 December 2025 and

will have an average maturity of approximately seven years after disbursement.

Nokia considers that with EUR 6 791 million of total cash and interest-bearing financial

investments(1) and with its undrawn revolving credit facilities, it has sufficient funds to satisfy its

future working capital needs, capital expenditure, R&D investments, structured finance, venture

fund commitments, acquisitions and debt service requirements, at least through 2026. Nokia

further considers that with its current credit ratings of BBB- (stable) by Fitch, Ba1 (positive) by

Moody’s, and BBB- (stable) by S&P Global, it has access to the capital markets should any funding

needs arise in 2026.

Nokia aims to maintain investment grade credit ratings.

Off-balance sheet arrangements

There are no material off-balance sheet arrangements that have, or are reasonably likely to have, a

current or future effect on Nokia’s financial condition, revenues or expenses, results of operations,

liquidity, capital expenditures or capital resources that are material to investors, except for the

purchase obligations and lease commitments, as well as guarantees and financing commitments

disclosed in Note 6.1. Commitments, contingencies and legal proceedings, and in Note 5.4.

Financial risk management, of the consolidated financial statements.

(1)Non-IFRS measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures,

refer to “Alternative performance measures” section.

(2)On 3 March 2026, Nokia voluntarily canceled the EUR 500 million revolving credit facility with the effective date of 6 March 2026.

| 78 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Venture fund investments and commitments

Nokia makes financing commitments to a number of unlisted venture funds that make technology-

related investments. The majority of the investments are managed by NGP Capital, a global venture

capital firm backing exceptional entrepreneurs focused on Deeptech opportunities in data

infrastructure, AI, semiconductors and space. In 2025, Nokia completed a strategic review of its

venture fund investment activities. As a result, it no longer views broad-based venture fund

investments as having a strategic role and has initiated a process to scale down these investments.

This also led to a change in the presentation of the results of venture fund investments from

operating activities to financial income.

As of 31 December 2025, the fair value of the venture fund investments and similar investments

equaled EUR 857 million, compared to EUR 865 million as of 31 December 2024. For more

information on the fair value of the venture fund investments, refer to Note 5.2. Financial assets

and liabilities in the consolidated financial statements.

As of 31 December 2025, Nokia’s investment commitments equaled EUR 221 million, compared to

EUR 306 million as of 31 December 2024. As a limited partner in venture funds, Nokia is committed

to capital contributions and entitled to cash distributions according to the respective partnership

agreements and underlying fund activities. For more information on venture fund commitments,

refer to Note 6.1. Commitments, contingencies and legal proceedings in the consolidated financial

statements.

Treasury Policy

Treasury activities are governed by the Nokia Treasury Policy approved by the President and CEO

and supplemented by operating procedures approved by the Chief Financial Officer, covering

specific areas such as foreign exchange risk, interest rate risk, credit risk and liquidity risk. The

objective of treasury’s liquidity and capital structure management activities is to ensure that Nokia

has sufficient liquidity to go through unfavorable periods without being severely constrained by the

availability of funds to execute Nokia’s business plans and implement Nokia’s long-term business

strategy. Nokia is risk-averse in its treasury activities.

Foreign exchange impact

Nokia is a company with global operations and net sales derived from various countries, invoiced in

various currencies. Therefore, Nokia’s business and results from operations are exposed to

changes in exchange rates between the euro, Nokia’s reporting currency, and other currencies,

such as the US dollar. The magnitude of foreign exchange exposures changes over time as a

function of Nokia’s net sales and costs in different markets, as well as the prevalent currencies

used for transactions in those markets. Significant changes in exchange rates may also impact

Nokia’s competitive position and related price pressures through their impact on its competitors.

To mitigate the impact of changes in exchange rates on its results, Nokia hedges material net

foreign exchange exposures (net sales less costs in a currency) typically with a hedging horizon of

approximately 12 months. For the majority of these hedges, hedge accounting is applied to reduce

income statement volatility.

In 2025, Group net sales were mostly denominated in US dollars, euros and Indian rupee and total

costs mostly in US dollars, euros, Indian rupee and Chinese yuan.

The average currency mix for Group net sales and total costs:

	2025		2024
Currency	Net sales	Total costs	Net sales	Total costs
EUR	~25%	~25%	~25%	~30%
USD	~55%	~50%	~55%	~45%
CNY	~0%	~5%	~5%	~5%
INR	~5%	~5%	~0%	~5%
Other	~15%	~15%	~15%	~15%
Total	~100%	~100%	~100%	~100%

For the full year 2025 compared to the previous year, the US dollar was weaker against the euro.

The weaker US dollar in 2025 on a year-on-year basis had a significantly negative impact on Nokia’s

net sales reported in euros. However, the weaker US dollar also contributed to lower costs of sales

and slightly lower operating expenses on a year-on-year basis. In total, before hedging, the weaker

US dollar on a year-on-year basis had a negative effect on Nokia’s operating profit in 2025.

For a discussion of the instruments used by Nokia in connection with its hedging activities, refer to

Note 5.4. Financial risk management in the consolidated financial statements. Refer also to the

“Risk factors” section.

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Business

integrity

Management of business conduct

Culture of integrity

Nokia is consistently recognized as one of the World’s Most

Ethical Companies® by Ethisphere. Nokia upholds high ethical

standards through its Code of Conduct, training, processes, and

controls. The company promotes integrity and encourages

employees to voice concerns without fear of retaliation. Every

employee in the company is responsible for adhering to our

Code of Conduct and is held accountable for violations.

The Code of Conduct includes a section that outlines leader and

manager expectations for cultivating Nokia’s culture of integrity

within their respective organizations. Many resources are available

to educate managers about these responsibilities and to facilitate

discussions with team members about compliance risks. Nokia

measures the level of manager engagement via an annual survey.

Nokia’s corporate culture of integrity is supported by its

comprehensive compliance training program, including its annual

mandatory “Ethical Business Training” course. The topics within

the mandatory training program are rotated every year to raise

awareness on high-risk areas, emerging risks, and key focus areas.

Nokia’s culture of integrity helps to prevent unlawful or unethical

behavior and reduces risks related to anti-corruption, competition,

bribery, fraud, money laundering, privacy and data protection,

human rights and other high-risk areas. Training and awareness

initiatives make it clear that Nokia expects employees to follow laws

and policies, and they will be subject to discipline, up to and including

termination of employment, for unlawful or unethical behavior.

Compliance Program governance

Nokia’s compliance program is supported by its Ethics and

Regulatory Compliance team, comprised of approximately 100

experienced compliance professionals, which is led by the Chief

Compliance Officer, who reports to the Chief Legal and

Administrative Officer. The team includes several distinct

functions, including regional and business-specific compliance

leaders, a risk assessment function and a global team of

dedicated investigators, who are independent from Nokia’s

business segments to ensure utmost objectivity, discreteness

and confidentiality and are responsible for compliance concerns

that are reported to Nokia.

The organization also includes an Anti-Corruption Center of

Excellence that is responsible for conducting due diligence of

commercial third parties, customers, and high risk suppliers and

oversees the due diligence of high-risk transactions. It is also

responsible for Nokia’s global Anti-Corruption Program, which

includes policies and processes, controls, and training.

The Chief Compliance Officer has direct access to the Audit

Committee of the Board, which provides oversight of Nokia’s

Compliance Program. The Chief Compliance Officer meets at

least quarterly with the Audit Committee and as needed based

on specific matters. The Chief Compliance Officer also meets at

least annually with the full Board of Directors.

Nokia has robust policies and processes to avoid unlawful

behavior and unethical acts by its employees or by third parties

with which Nokia does business. With respect to anti-corruption

and bribery, the key risk is that a rogue employee or a third party

with which Nokia does business (primarily high-risk suppliers or

commercial third parties) engages in behavior that violates

Nokia’s anti-corruption policies and/or applicable laws or fails to

comply with or circumvents one of Nokia’s anti-corruption

processes or control points. Potential violations of anti-

corruption laws may result in investigations; and if a violation is

substantiated, the results may include reputational damage, fines

and forfeiture awards, and potential criminal action against

individuals involved, as well as against those who should have

been aware that a violation was occurring. Nokia strives to stay

abreast of geopolitical changes, business models and strategies

that may increase the risk of corruption, such as planned

expansion in a high-risk market or segment. As these are

identified, the Ethics & Regulatory Compliance organization works

closely with the business to develop risk mitigants proactively to

minimize residual risk. These efforts may include targeted and

focused training, the implementation of additional control

points and processes, and increased review and monitoring.

Anti-corruption and bribery risks can exist in many aspects of

our operations, including certain go-to-market sales models and

in project delivery and execution. To effectively mitigate these

risks, the Ethics and Regulatory Compliance organization has

compliance professionals who partner closely with various parts

of our business. Through this collaboration, the organization

proactively manages these changing risks by continually

evolving the Anti-Corruption Compliance Framework and

Program. Business activity presents risk with respect to the

possibility of third parties engaging in violations of anti-

corruption laws. The third parties with the highest risk include

| 80 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review •Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

certain high-risk suppliers (those dealing in customs, site

acquisition work, or other engagements with governmental

agencies) and commercial third parties (distributors, resellers

and indirect resellers). To mitigate this risk, Nokia provides

training to those third parties with the highest risk and requires

annual compliance acknowledgments, as well as

acknowledgment of Nokia’s Third-Party Code of Conduct. These

actions, as well as clear contractual provisions including

compliance with laws, are designed to ensure that third parties

understand the expectations for compliant behavior. In

addition, suppliers and commercial third parties must

successfully complete a risk-based due diligence vetting

process. This vetting process often results in approval with risk

mitigants, such as periodic review of transactions, additional

contractual terms, or monitoring.

Business conduct policies and corporate

culture

Nokia’s clear and readily accessible policies and standard

operating procedures (SOPs) guide our employees on how to

behave and mitigate the risk of unlawful or unethical behavior.

Nokia’s policy framework begins with the Nokia Code of

Conduct, which includes the company’s basic principles of

business conduct and high-level policy statements related to

critical business topics. Policy documents further define,

support and explain specific areas of focus. SOPs are created,

where needed, to instruct employees on specific procedures to

implement the policies. Finally, supplemental guidelines (e.g.,

country-specific guidance) or other training materials may be

created for specific implementation of certain procedures. The

full set of supporting policies and related procedures for the

Code of Conduct’s risk areas are available online to Nokia’s

employees.

Employees and third parties that fail to behave ethically and

lawfully are held accountable. A dedicated intranet page

provides an overview of company level policies and SOPs. The

available policies are aligned with all business segments and

corporate functions and are disseminated to employees in

several ways, including:

▪Training programs, both online and live; online training

typically includes quiz questions to test comprehension.

▪The central SOP/policy repository on the company intranet.

▪Quarterly global communications from the Chief Compliance

Officer and targeted communications from regional and

business compliance leaders.

▪Examples and real cases to highlight the importance of

compliance both for Nokia and the individual employee.

Nokia’s Code of Conduct is available in a web-based format in

20 languages. It enforces Nokia’s values and expectations,

outlines Nokia’s 14 key compliance policy statements and

unites all Nokia employees around a common vision. The Code

serves as a guiding framework that provides clarity and

consistency in decision making and defines the principles of

ethical and compliant business practices that all employees and

managers are expected to follow. Everyone in the company is

required to review and acknowledge the Code annually as part

of mandatory compliance training.

A separate Code of Ethics is in place for Nokia’s President and

CEO, Nokia’s Chief Financial Officer, and Nokia’s Corporate

Controller. The purpose of the Code of Ethics is to reinforce

ethical behavior, promote high standards of corporate

governance, and highlight the additional responsibilities of these

functions. It complements Nokia’s Code of Conduct and Insider

Trading Policy, as well as other applicable company guidelines.

Nokia’s Third-Party Code of Conduct requires Nokia’s third-

party business partners to follow similar ethical practices to

those included in Nokia’s Code of Conduct.

Nokia nurtures, promotes and evaluates its compliance culture

using varied mediums. It uses multiple feedback channels,

discussions and training courses to drive continuous

improvement in Nokia’s Compliance Program. Nokia gauges

employee attitudes, perceptions, and experiences regarding the

compliance culture using survey results and other collected

inputs. These results are shared with relevant business/regional

teams, managed through mitigation plans, and integrated into

the annual risk assessment and training and communications

planning for ongoing management of Nokia’s ethical culture.

Beyond a company-wide survey, Nokia also uses other means to

gauge the effectiveness of our Compliance Program, including

short pulse surveys on specific topics for more frequent

feedback on the overall climate in the company as it relates to

Nokia’s essentials: open, fearless, and empowered. As an

example, Nokia’s 2025 mandatory Ethical Business Training

course integrated anonymous questions related to fear of

retaliation, usage of Nokia’s Code of Conduct, reporting

concerns, specific policies, and line manager engagement. 75%

of respondents to the voluntary 2025 survey indicated that their

manager discussed ethics and compliance with their team.

Below are some of the resources, platforms and methods that

Nokia uses to regularly reinforce its culture of doing business

with integrity:

▪Nokia Code of Conduct

▪Manager internal posts and news articles

▪Social media posts from subject matter topical experts,

Nokia’s Chief Compliance Officer and other senior leaders

▪Internal news articles with topic-related links and resources

▪Awareness campaigns and resources (i.e. speaking up and

anti-retaliation)

▪Ombuds program, dedicated resources, and campaigns

▪Dedicated web pages for Compliance Program elements with

95%

of employees by 31 October 2025

Result for the year ended 31 December 2025:

Ethical Business Training course, which includes ESG

(Environmental, Social, Governance) training, completed by

98%

of employees.

Training specific to anti-corruption and bribery is included in the

Ethical Business Training course.

Line manager engagement

Target:

85%

favorability of employee/line manager engagement on ethics

and compliance by the year 2030. This target covers Nokia’s line

managers and their direct reports.

Result for the year ended 31 December 2025:

75%

of respondents to the voluntary survey.

| 84 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

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Environment

This section covers how Nokia

addresses its own environmental

footprint, including its focus on both

climate and circularity. Nokia’s net‑zero

transition plan guides emission

reductions, while its circular strategy

focuses on resource efficiency and

waste reduction—directly lowering

embodied emissions and supporting

path to net-zero. Nokia believes its

technology plays important role in

helping its customers, other industries

and society decarbonize in the AI era.

Environmental policies

Nokia has policies and procedures in place to manage its

material impacts, risks, and opportunities related to climate

change and energy. Nokia tries to prevent environmental

pollution along its value chain, as outlined in its Environmental

policy and its Code of Conduct. Nokia is committed to reducing

GHG emissions across the value chain, in line with its GHG

emissions reduction targets.

Environmental management and ongoing environmental

performance are governed by the certified ISO 14001

Environmental Management System. This ensures a holistic and

structured approach in managing Nokia’s material

environmental matters. In 2025, Environmental Management

Systems covered 47% of Nokia’s sites and 87% of employees.

Climate

Climate change has been a focus for Nokia Group for more than

a decade, and as such consistent efforts are made to develop

and refine Nokia’s approach to understanding and tackling the

risks and opportunities that climate change presents to its

business. As part of this approach, Nokia has set a target to

reach net-zero greenhouse gas emissions by 2040 across its

value chain. This includes decarbonization of Nokia’s own

operations, as well as its supply chain, enhancing product

energy efficiency to break the energy vs. capacity curve and

sustainably support the AI supercycle, and strengthen the

Design for Environment process within R&D. Sustainability

topics, including decarbonization and the circular transition, are

integral to Nokia’s sustainability strategy and are reflected in

how Nokia operates as a company and the business decisions

that are taken. Research in Nokia Bell Labs also contributes

towards these goals.

Transition plan and actions related to climate

change policies

Nokia has set a target to reduce its total global greenhouse gas

emissions (GHG) to net zero across the value chain by 2040.

The Net-Zero target was approved by the Science Based

Targets Initiative (SBTi) in January 2025.

Nokia has defined a net-zero pathway that will help it reduce

emissions across its value chain. Nokia’s GHG emissions and the

estimated decarbonization levers to achieve its 2030 and 2040

targets fall into three main categories:

▪Own operations, including energy use in facilities and fleet,

which contribute to scope 1 and 2 emissions

▪Upstream activities, including purchased goods and services,

capital goods, logistics and business travel, which contribute

to scope 3 emissions category 1, 2, 4 and 6

▪Downstream activities, including the use phase of Nokia

products and solutions, which contribute to scope 3

emissions category 11

Additionally, electricity grid decarbonization has a significant

impact on the reduction of Nokia’s GHG emissions. The net-zero

pathway also requires governance, monitoring and reporting

actions.

The commitment to net-zero by 2040 was approved by the

Nokia Group Leadership team and the Board of Directors was

informed about the commitment.

| 85 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

The main decarbonization levers and examples of key actions taken and planned in the net-zero pathway are described and illustrated below. The actions described below reflect Nokia’s current plans of

potential actions to be taken in the future and are, therefore, forward-looking statements.

	2025	2030	2040
Decarbonization levers	Targets:<br><br>RE100 (scope 2 facilities)<br><br>80% reduction scope 1-2	Targets:<br><br>90% reduction scope 1-2<br><br>SBT: 50% reduction scope 1-2-3	Targets:<br><br>SBT Net-Zero by 2040 (scope 1-2-3)
Own operations: Facilities and fleet (scope 1-2)	Targeted 100% renewable electricity (RE100)	100% electrification of car fleet	Neutralize residual emissions
Upstream: Embodied<br><br>(scope 3, cat 1 and 2)	Engage key suppliers to plan and track<br><br>decarbonization, circular products & services	100% decarbonization for final assembly suppliers,<br><br>50% for other key suppliers	Circular and low-carbon materials product design
Upstream: Logistics and business air travel (scope<br><br>3, cat 4 and 6)	Optimizing transportation modes to minimize<br><br>emissions	Bio-fuel blend agreements for logistics	Significant reduction in air freight emissions
Downstream: Product use phase<br><br>(scope 3, cat 11)	Engage with customers to ensure wide uptake of<br><br>renewables	Development of the product portfolio for energy<br><br>efficiency gains	Develop decarbonized site energy solutions. Secure<br><br>investments in long-term research and disruption
Electricity grid<br><br>(scope 3, cat 1 and 11)	Climate dialogue with stakeholders	Value chain dialogue and customer specific factors.<br><br>Grid decarbonization leading to GHG emission<br><br>reductions(1)	Grid decarbonization leading to further GHG emission<br><br>reductions(2)
Governance, monitoring and reporting	Continuous reporting process development including<br><br>further digitalization of the emissions data	Enter carbon market to purchase removals	Neutralize residual emissions

(1)Assumption: Grid decarbonization leading to 48% smaller emission factor compared to base year 2019 based on IEA WEO2023 – Announced Pledges Scenario.

(2)Assumption: Grid decarbonization leading to 82% smaller emission factor compared to base year 2019 based on IEA WEO2023 – Announced Pledges Scenario.

▪Own operations - Facilities and fleet (scope 1 and 2): Nokia

aims for decarbonization in its facilities and car fleet. Nokia

achieved 96% renewable electricity across all owned and

leased facilities in 2025 and continues its commitment to

target 100% renewable electricity in its own facilities. As

regards Nokia’s car fleet, the aim is to reach the target for

own operations' emissions by continuing to introduce low-

emission vehicles and transitioning to 100% electric vehicles

by 2030.

▪Upstream - Embodied (scope 3, categories 1 and 2): Nokia

will focus on reducing the embodied emissions of its

products, for example by offering circular products, adding

recycled material content into new products, and designing

products that use less material, while having increased

throughput capacity and functionality. At the same time,

Nokia collaborates with suppliers on their journey to

decarbonizing their own operations.

▪Upstream - Logistics and business air travel (scope 3,

categories 4 and 6): Nokia’s action plans include optimizing

transportation modes and route planning, use of

decarbonized fuels in logistics, and reducing air freight.

▪Downstream - Product use phase (scope 3, category 11):

With 94% of emissions resulting from products in use in our

customers’ networks, the greatest efforts remain

concentrated on product design and innovation, to reduce

the power consumption and improve energy efficiency of

products across Nokia’s portfolio.

▪Electricity grid (scope 3, categories 1 and 11): Nokia is

engaging with stakeholders to push for grid decarbonization

and provides digitalization solutions to support renewables

generation and grid transformation in the energy sector.

Nokia also collaborates with its value chain members on their

own journey to transitioning to renewable energy sources as

countries decarbonize their electricity grids.

▪Governance, monitoring and reporting - Carbon removals:

Credible, permanent carbon removals and storage are

expected to be required to neutralize residual emissions to

reach net-zero. Nokia has been examining credible solutions

for carbon removals to support long-term net-zero targets.

This examination has included a pilot to acquire the first

carbon removal credits in 2025.

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Progress in implementing the transition plan

and actions taken in 2025

Nokia has set short-term, medium-term and long-term climate

targets in key areas. Short-term and medium-term targets are

put in place to track and show a pathway towards the long-term

goal.

Nokia has set the target to reach net-zero by 2040, covering

scope 1, 2 and 3 GHG emissions. The GHG emission targets are

for all Nokia business groups, covering various business

activities, such as R&D, logistics, operations and suppliers. The

targets do not have any geographical exclusions.

The consistency and completeness of the near-term (2030) and

long-term (2040) net-zero targets with Nokia’s GHG inventory

boundaries is ensured by meeting the SBTi requirements and

having the targets validated by SBTi. The baseline will be

updated in line with Nokia financial reporting consolidation and

environment data reporting principles whenever significant

changes in business, such as mergers and acquisitions, and

improvements in the data coverage and calculation take place.

Net-Zero target

Nokia’s Net-Zero target is approved by SBTi. This includes

Nokia’s commitment to reach net-zero GHG emissions across

the value chain by 2040.

The long-term target is to reduce absolute scope 1, 2 and scope

3 GHG emissions 90% by 2040 from a 2019 base year. Scope 3

includes the following significant categories to Nokia: category

1 – purchased goods and services, category 2 – capital goods,

category 4 – upstream transportation and distribution, category

6 – business travel and category 11 – use of sold products. As

defined in the current corporate Net-Zero standards (SBT) V1.2,

after a company has achieved its long-term target to cut

emissions, it can use permanent carbon removal and storage to

counterbalance residual emissions up to 10%.

The net-zero target also includes the near-term target to

reduce scope 1, 2 and scope 3 categories 1, 2, 4, 6 and 11 GHG

emissions 50% by 2030 from a 2019 base year. The progress is

on track.

Nokia’s total GHG emissions were 30 490 080 tCO2eq in 2025.

This represents an increase of 17% over the previous year, and

a 27% reduction compared to the base year 2019. Both the

increase compared to the previous year, as well as the decrease

from the base year 2019 were mainly driven by changes in

scope 3 category 11 use of sold products. These GHG emissions

increased by 16% compared to 2024, due to higher sales

volumes, changed product mix and the Infinera acquisition. The

category 11 emissions have decreased by 21% compared to the

base year 2019.

Additionally, Nokia has the following interim and sub-targets:

▪GHG emission reduction of 80% from scope 1 and scope 2

market-based emissions by 2025 from a 2019 base year

▪GHG emissions reduction of 90% from scope 1 and scope 2

market-based emissions by 2030 from a 2019 base year

▪Nokia’s final assembly suppliers (part of scope 3 category 1)

reach zero emissions by 2030 from a 2019 base year

▪Nokia’s suppliers (scope 3 category 1) reduce GHG emissions

by 50% by 2030 from a 2019 base year

▪Nokia’s logistics' GHG emissions (scope 3 category 4)

reduced by 73% by 2030 from a 2019 base year.

Own operations (scope 1 and 2)

Scope 1 and 2 emissions decreased by 37% compared to 2024,

and by 86% compared to the base year 2019. Nokia continued

to increase use of renewable electricity to reduce scope 2

market-based GHG emissions, and reached 96% share of

renewable electricity used in Nokia’s facilities. As an example of

emissions reduction, the renewable usage of district cooling in

Tampere, Finland was validated.

Upstream: Embodied emissions (scope 3, cat 1 and 2)

Nokia works closely with suppliers to improve supplier maturity

around emissions measurement, target setting, roadmaps and

good practice. For final assembly suppliers, Nokia is tracking the

execution of their roadmap at business review meetings

throughout the year, given their target to reach zero emissions

by 2030 for their own scope 1 and 2 emissions. Nokia engages

regularly with approximately 500 of its larger suppliers, taking

into account the CDP Climate program cycle. In addition, close

collaboration is pursued with Nokia’s Joint Design

Manufacturing suppliers, as well as supplier categories with high

emission intensity, such as semiconductor and PWB suppliers.

In 2025, 390 of Nokia’s key suppliers responded to CDP’s

request to disclose their climate performance information, while

258 also provided emissions-reduction targets.

As a result of Nokia’s supplier engagement, a gradual reduction

of Nokia’s scope 3 category 1 (Purchased goods and services)

emissions has been observed since the base year. In 2025, the

total supplier emissions (category 1) increased by 57%

compared to 2024, and reduced by 66% compared to the base

year 2019. Final assembly supplier emissions have increased by

32% compared to 2024, and reduced by 42% from the baseline

year 2019. The main reasons for the year-on-year increase of

category 1 emissions are: Infinera’s acquisition and the

inclusion of its share of emissions in Nokia’s 2025 reporting

(+9% impact), the increase in production volumes, and further

data coverage improvement in suppliers’ own Scope 3 upstream

emissions.

Upstream: Logistics and business air travel (scope 3, cat 4 and 6)

GHG emissions from scope 3 category 4 upstream

transportation and distribution have increased by 39%

compared to 2024, and have reduced by 42% compared to the

base year 2019. The change from 2024 to 2025 was due to

Infinera’s emissions being included in Nokia’s 2025 emissions,

as well as to the increased volumes and air transportation

during 2025, compared to the previous year.

GHG emissions from scope 3 category 6 business travel were

increased by 16% compared to 2024, and decreased by 55%

compared to the base year 2019. The change from 2024 to

2025 was mainly due to the inclusion of Infinera’s emissions in

the 2025 amount.

| 87 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Downstream: Product use phase (scope 3, cat 11)

Many of Nokia’s customers are intent on reducing their power

consumption and their emissions. Nokia considers energy

efficiency to be one of the key factors in product

competitiveness. Some of Nokia’s customers are also

interested in examining new business opportunities that spring

from decarbonization. These developments create new

business opportunities for the company and Nokia is releasing

and delivering innovations that cater for that demand.

One of the key actions required for reducing GHG emissions

during the product use phase is product energy efficiency

improvements in product development. Key actions taken in

2025 include:

▪Nokia continued to improve the energy efficiency of its

products through incremental, as well as generational

hardware improvements;

▪Key innovations, including:

▪Extreme deep sleep mode in 5G AirScale radios

▪AI-optimized RAN energy savings and KPIs

▪Traffic-aware sleep modes in mobile backhaul

▪Energy-efficient site solutions

GHG emissions from scope 3 category 11 “use of sold

products” increased by 16% compared to 2024, and reduced by

21% compared to the base year 2019. The increase from 2024

to 2025 is due to higher sales volumes and a changed product

mix. GHG emissions increased by 4% due to the inclusion of

Infinera’s emissions in 2025 reporting. This increase was offset

by a 1% decrease in the global emission factor, which reflects

the decarbonization development of the global electricity grid.

Nokia’s carbon footprint (scope 1, 2 and 3)

101704825569680

	Emission Source		Metric tons CO2eq	% of total
		Energy use in facilities and by fleet	56 764	0.2%	Scope 1 and 2 market-<br><br>based emissions
94%<br><br>use of sold<br><br>products		Use of sold products	28 607 919	94%	Scope 3 emissions
		Purchased goods and services	1 507 366	5%
		Upstream transportation and<br><br>distribution	222 182	0.7%
		Capital goods	61 671	0.2%
		Business travel	34 178	0.1%
	Total scope 1, 2 and 3 emissions		30 490 080	100%

Nokia’s carbon footprint (scope 1 and 2)

101704825569669

Emission Source		Metric tons CO2eq	% of total
	Facilities, direct emissions	26 849	47%	Scope 1 emissions
	Car Fleet	16 090	28%
	Facilities, indirect emissions from<br><br>purchased energy, market-based	13 825	24%	Scope 2 emissions
Total scope 1 and 2 emissions		56 764	100%

Circularity

Nokia aims to be a driver of circular practices in its industry.

The company focuses on opportunities to promote hardware

circularity by managing the sourcing and reuse of key source

materials. Nokia builds on its existing waste processes and

circular products and services offering, the take-back of

products from customer modernization projects and end-of-life

equipment and increasing the availability and sales of

refurbished products. Nokia also looks to increase the use of

recycled materials in its products, augmenting the inclusion of

recycled plastics, steel, copper and aluminum in product design.

Nokia has set a target to reach 95% waste circularity rate by

The purpose is to improve waste management practices

by maximizing waste utilization and minimizing disposal.

Circularity rate includes waste from Nokia’s offices, labs, manu-

facturing, site installation, product take-back and final assembly

suppliers. Annual waste circularity outcome for 2025 was 90%.

Nokia has recognized areas where high circularity rate has

already been achieved and also areas requiring further action.

| 88 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Shares and shareholders

Share details

Shares and share capital

Nokia has one class of shares. Each Nokia share entitles the holder to one vote at general meetings

of Nokia.

At 31 December 2025, the share capital of Nokia Corporation equaled EUR 245 896 461.96 and the

total number of shares issued was 5 742 239 696. At 31 December 2025, the total number of

shares included 159 705 525 shares owned by Group companies representing approximately 2.8%

of the total number of shares and the total voting rights.

In November 2024, under the authorization granted to the Board of Directors by the Annual

General Meeting 2024, the Board of Directors resolved on an issuance of 150 000 000 new shares

without consideration to itself. Additionally, the Board of Directors resolved on a subsequent

directed issuance of a maximum number of 150 000 000 shares held by the Company as a result of

the aforementioned issuance, to settle its commitments under the merger agreement related to

the Infinera acquisition in respect of shares delivered to eligible stockholders of Infinera. The share

issuance was completed in February 2025. To the extent that the shares were not needed to settle

Nokia’s obligations related to the completion of the acquisition, the Board of Directors resolved on

a directed share issuance of the aforementioned shares without consideration to participants of

Nokia's and Infinera's equity programs the latter of which were assumed by Nokia upon the

completion of the acquisition.

In October 2025, under the authorization granted to the Board of Directors by the Annual General

Meeting 2025, the Board of Directors resolved on an issuance of 120 000 000 new shares without

consideration to itself and resolved on a subsequent directed issuance of a maximum number of

120 000 000 shares held by the Company as a result of the aforementioned issuance, to settle its

commitments under the equity-based incentive plans and the employee share purchase plan in

respect of shares to be delivered during the year 2025, 2026 and 2027. The shares were issued

without consideration.

In October 2025, under the authorization granted to the Board of Directors by the Annual General

Meeting 2025, the Board of Directors resolved on a directed share issuance of 166 389 351 new

shares to enable NVIDIA Corporation to make a USD 1.0 billion equity investment in Nokia. The new

shares were delivered to NVIDIA Corporation in the form of American Depositary Shares in

November 2025.

During 2025, Nokia transferred a total of 46 374 440 treasury shares without consideration to

employees, including certain members of the Group Leadership Team, as settlement under Parent

Company equity-based incentive plans and the employee share purchase plan in accordance with

the rules of the plans. The transfers were based on the resolutions of the Board of Directors in

November 2024 to issue shares held by the Company to settle its commitments to participants of

the plans.

Information on the authorizations held by the Board of Directors in 2025 to issue shares and

special rights entitling to shares, to transfer shares and repurchase own shares, as well as

information on related party transactions, the shareholders and share-based incentives is available

in this section “Shares and shareholders” and additionally in Notes 3.2. Remuneration of key

management, 3.3. Share-based payments, 5.1. Equity and 6.4. Related party transactions in the

consolidated financial statements.

In April 2025, the Board of Directors decided to cancel 150 000 000 Nokia shares held

by the Company and repurchased under the share buyback program initiated in November 2024 and

completed in April 2025. The cancellation did not affect the Company’s share capital nor total equity.

The Board of Directors held at 31 December 2025 a total of 1 092 401 shares and ADSs in Nokia,

which represented approximately 0.02% of our total shares and voting rights excluding shares held

by the Nokia Group. The President and CEO owned at 31 December 2025 a total of 609 274 shares.

There were no public takeover offers by third parties for Nokia’s shares during financial years 2025

and 2024. On 28 February 2025, Nokia completed the acquisition of Infinera. The aggregated

consideration transferred included 127 434 986 Nokia shares held by Nokia Corporation. For more

information, refer to Note 6.2. Acquisitions in the consolidated financial statements.

Nokia does not have minimum or maximum share capital or a par value of a share.

31 December	2025	2024	2023	2022	2021
Share capital, EURm	246	246	246	246	246
Shares, (000s)	5 742 240	5 605 850	5 613 497	5 632 298	5 675 461
Shares held by the Group, (000s)	159 706	232 701	87 896	45 282	40 468
Number of shares excluding shares<br><br>held by the Group, (000s)	5 582 534	5 373 149	5 525 601	5 587 016	5 634 993
Average number of shares excluding<br><br>shares held by the Group during the<br><br>year
Basic, (000s)(1)	5 415 876	5 475 817	5 549 468	5 614 182	5 630 025
Diluted, (000s)(1)	5 502 782	5 530 603	5 585 923	5 670 020	5 684 235
Number of registered<br><br>shareholders(2)	224 893	224 196	247 893	238 359	233 844

(1)Used in calculation of earnings per share attributable to equity holders of the parent.

(2)Each account operator is included in the figure as only one registered shareholder.

| 89 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Key ratios

For the year ended 31 December	2024	2023	2022	2021
Earnings per share, basic,
Continuing operations(1)	0.31	0.11	0.75	N/A
Discontinued operations(1)	(0.08)	0.01	0.01	N/A
Profit for the year	0.23	0.12	0.76	0.29
Earnings per share, diluted,
Continuing operations(1)	0.31	0.11	0.74	N/A
Discontinued operations(1)	(0.08)	0.01	0.01	N/A
Profit for the year	0.23	0.12	0.75	0.29
Proposed dividend per share, (2)	0.14	0.13	0.12	0.08
Dividend payout ratio(3)	45.2%	118.2%	16.0%	N/A
Total dividends, m(4)	785	730	676	449
31 December	2024	2023	2022	2021
Shareholders’ equity per share,	3.84	3.72	3.82	3.08
Share price, (5)	4.27	3.05	4.33	5.57
Price-to-earnings ratio(3)	13.77	27.73	5.77	N/A
Dividend yield(1)	3.28%	4.26%	2.77%	1.44%
Market capitalization, m	22 943	16 853	24 192	31 409

All values are in Euros.

(1)In June 2024, Nokia classified its Submarine Networks business as a discontinued operation. The comparative amounts for 2023

and 2022 have been recast accordingly, however, due to undue cost and effort required to recast historical accounting records the

comparative amounts for 2021 have not been recast.

(2)The Board of Directors proposes to the Annual General Meeting 2026 to be authorized to decide in its discretion on the

distribution of an aggregate maximum of EUR 0.14 per share as dividend from the retained earnings and/or as assets from the

reserve for invested unrestricted equity.

(3)Calculated based on the basic earnings per share from continuing operations.

(4)In 2025, total dividends is calculated based on the proposed Annual General Meeting authorization to the Board of a maximum

distribution of EUR 0.14 per share for the financial year 2025, and the total number of shares on the date of issuing the financial

statements for 2025. On the date of issuing the financial statements for 2025 the total number of Nokia shares is 5 742 239 696.

Comparative amounts represent the actual total distribution to equity holders of the parent for the financial year presented.

(5)Closing Nokia share price at year end on Nasdaq Helsinki.

Share turnover

For the year ended 31 December	2025	2024	2023	2022	2021
Number of shares traded during the<br><br>year (000s)(1)	9 969 841	7 175 750	7 754 279	10 294 615	16 560 334
Average number of shares excluding<br><br>shares held by the Group during the<br><br>year (000s)	5 415 876	5 475 817	5 549 468	5 614 182	5 630 025
Share turnover %	184	131	140	183	294

(1)Source: Nasdaq Helsinki, the NYSE composite tape and Euronext Paris.

The principal trading markets for the shares are Nasdaq Helsinki in the form of shares, and the

NYSE, in the form of ADSs. In 2025, Nokia also maintained a listing on Euronext Paris Stock

Exchange but decided to apply for delisting in November 2025. The final day of trading of Nokia’s

shares on Euronext Paris was 30 December 2025.

Share price development

Nasdaq Helsinki

EUR	High	Low	Value
2025 Full year High/Low	6.65	3.42
2025 Full year Average (Volume-weighted)			4.65
Year-end value 31 December 2025			5.57
Year-end value 31 December 2024			4.27
Change from 31 December 2024 to 31 December 2025			30.4%

New York Stock Exchange

USD	High	Low	Value
2025 Full year High/Low	8.19	4.00
2025 Full year Average (Volume-weighted)			5.47
Year-end value 31 December 2025			6.47
Year-end value 31 December 2024			4.43
Change from 31 December 2024 to 31 December 2025			46.0%

Euronext Paris

EUR	High	Low	Value
2025 Full year High/Low	6.64	3.46
2025 Full year Average (Volume-weighted)			4.78
Year-end value 30 December 2025(1)			5.55
Year-end value 31 December 2024			4.26
Change from 31 December 2024 to 30 December 2025(1)			30.3%

(1) The final day of trading of Nokia’s shares on Euronext Paris was 30 December 2025.

| 90 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Stock option exercises

Since 2019, Nokia has not administered any stock option plans.

Dividend and share buybacks

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 read as follows: “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 2026 that based on the balance

sheet to be adopted for the financial year ended on 31 December 2025, no dividend is distributed

by a resolution of the Annual General Meeting. Instead, the Board of Directors proposes to be

authorized to resolve in its discretion on the distribution of an aggregate maximum of EUR 0.14 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 from the retained

earnings 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 November 2024, under the authorization granted to the Board of Directors by the Annual

General Meeting 2024, Nokia launched a share buyback program to offset the dilutive effect of the

acquisition of Infinera announced in June 2024 targeting to repurchase 150 million shares for an

aggregate purchase price not exceeding EUR 900 million. The repurchases commenced in

November 2024 and ended in April 2025. The repurchased shares were cancelled in April 2025.

Nokia distributes distributable funds, if any, within the limits set by the Finnish Companies Act as

defined below. Nokia makes and calculates the distribution, if any, in the form of cash dividends,

assets from the reserve for invested unrestricted equity, share buybacks, or in some other form, or

a combination of these. There is no specific formula by which the amount of a distribution is

determined, although some limits set by law are discussed below. The timing and amount of future

distributions of retained earnings and/or assets from the reserve for invested unrestricted equity,

if any, will depend on Nokia’s future results and financial conditions.

Under the Finnish Companies Act, Nokia may distribute retained earnings and/or assets from the

reserve for invested unrestricted equity on our shares only upon a shareholders’ resolution and in

the amount proposed by the Board, subject to limited exceptions. The amount of any distribution is

limited to the amount of distributable earnings of the Parent Company pursuant to the last audited

financial statements approved by our shareholders, taking into account the material changes in the

financial situation of the Parent Company after the end of the last financial period and a statutory

requirement that the distribution of earnings must not result in insolvency of the Parent Company.

Subject to exceptions relating to the right of minority shareholders to request a certain minimum

distribution, the distribution may not exceed the amount proposed by the Board of Directors.

Purchases of equity securities by the Company and affiliated purchasers

The table below presents additional information on the purchases of treasury shares in 2025:

Period	Total number of shares<br><br>purchased	Average price paid per<br><br>share, EUR	Total number of shares<br><br>purchased as part of<br><br>publicly announced<br><br>plans or programs	Maximum value of<br><br>shares that may yet be<br><br>purchased under the<br><br>plans or programs, EUR
January(1)	18 313 953	4.41	18 313 953	739 939 153
February	26 686 823	4.70	26 686 823	614 496 274
March	78 864 331	4.86	78 864 331	231 451 624
April	6 948 847	4.96	6 948 847	—
May	—	—	—	—
June	—	—	—	—
July	—	—	—	—
August	—	—	—	—
September	—	—	—	—
October	—	—	—	—
November	—	—	—	—
December	—	—	—	—
Total	130 813 954	4.77	130 813 954	—

(1)On 22 November 2024, Nokia announced that its Board of Directors initiates a share buyback program to offset dilutive effect of

acquisition of Infinera pursuant to an authorization from the Annual General Meeting 2024. The program targeted to repurchase

150 million shares for an aggregate price not exceeding EUR 900 million. The repurchases started on 25 November 2024 and

ended on 2 April 2025.

| 91 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Shareholders

At 31 December 2025, shareholders registered in Finland represented approximately 24% and

shareholders registered in the name of a nominee represented approximately 76% of the total

number of shares of Nokia Corporation. The number of directly registered shareholders was

224 893 at 31 December 2025. Each account operator (12) is included in this figure as only one

registered shareholder.

Largest shareholders registered in Finland at 31 December 2025(1)

Shareholder	Total number<br><br>of shares 000s	% of all shares	% of all voting<br><br>rights
Solidium Oy	325 000	5.66%	5.66%
Keskinäinen Työeläkevakuutusyhtiö Varma	91 266	1.59%	1.59%
Keskinäinen Eläkevakuutusyhtiö Ilmarinen	79 261	1.38%	1.38%
Keskinäinen Työeläkevakuutusyhtiö Elo	36 242	0.63%	0.63%
Valtion Eläkerahasto	27 000	0.47%	0.47%
Oy Lival Ab	18 050	0.31%	0.31%
Svenska litteratursällskapet i Finland r.f.	14 603	0.25%	0.25%
Nordea Bank Abp	11 692	0.20%	0.20%
Nordea Pro Finland Fund	10 567	0.18%	0.18%
OP Finland Index	10 371	0.18%	0.18%

(1)Excluding nominee-registered shares and shares owned by Nokia Corporation. Nokia Corporation owned 148 246 864 shares at

31 December 2025.

Breakdown of share ownership at 31 December 2025(1)

By number of shares owned	Number of<br><br>shareholders	% of<br><br>shareholders	Total number<br><br>of shares	% of all shares
1–100	66 740	29.68%	3 032 534	0.05%
101–1 000	100 869	44.85%	43 713 215	0.76%
1 001–10 000	50 826	22.60%	157 345 733	2.74%
10 001–100 000	6 057	2.69%	146 570 263	2.55%
100 001–500 000	303	0.13%	58 419 999	1.02%
500 001–1 000 000	33	0.02%	24 034 154	0.42%
1 000 001–5 000 000	40	0.02%	91 326 590	1.59%
Over 5 000 000	25	0.01%	5 217 797 208	90.87%
Total	224 893	100.00%	5 742 239 696	100.00%

(1)The breakdown covers only shareholders registered in Finland, and each account operator (12) is included in the number of

shareholders as only one registered shareholder. As a result, the breakdown is not illustrative of the entire shareholder base of

Nokia.

By nationality	% of shares
Non-Finnish shareholders	76.49%
Finnish shareholders	23.51%
Total	100.00%	By shareholder category (Finnish shareholders)	% of shares
---	---
Corporations	4.06%
Households	6.18%
Financial and insurance institutions	2.20%
Non-profit organizations	1.06%
Governmental bodies (incl. pension insurance companies)	10.01%
Total	23.51%

At 31 December 2025, a total of 1 117 743 012 ADSs (equivalent to the same number of shares or

approximately 19% of the total shares) were outstanding and held of record by 82 307 registered

holders in the United States. Nokia is aware that many ADSs are held of record by brokers and other

nominees, and accordingly the above number of holders is not necessarily representative of the

actual number of persons who are beneficial holders of ADSs or the number of ADSs beneficially

held by such persons. Based on information available from Broadridge Financial Solutions, Inc., the

number of beneficial owners of ADSs at 31 December 2025 was 748 358.

Based on the most recent information available to Nokia, at 1 July 2025, BlackRock, Inc. beneficially

owned 373 750 775 Nokia shares and 9 252 262 Nokia ADSs, which at that time corresponded to

approximately 6.85% and 0.16%, respectively, of the total number of shares and voting rights of

Nokia.

According to the notification received by Nokia, the holdings of FMR LLC in Nokia on 2 March 2026

were equivalent to a total of 289 538 191 shares and 277 150 920 voting rights, corresponding to

approximately 5.04% of the total number of shares and 4.83% of voting rights of Nokia.

To the best of its knowledge, Nokia is not directly or indirectly owned or controlled by any other

corporation or any government, and there are no arrangements that may result in a change of

control of Nokia.

Shares owned by the members of the Board and the Group Leadership Team

At 31 December 2025, the members of our Board and the Group Leadership Team held a total of

3 484 960 shares and ADSs in Nokia, which represented approximately 0.06% of our shares and

total voting rights excluding shares held by the Nokia Group.

Offer and listing details

Nokia’s capital consists of shares traded on Nasdaq Helsinki under the symbol “NOKIA”. Nokia’s

ADSs, each representing one share, are traded on the NYSE under the symbol “NOK”. The ADSs are

evidenced by American Depositary Receipts (ADRs) issued by Citibank, N.A.

In 2025, Nokia shares were also traded on Euronext Paris under the symbol “NOKIA” until the

delisting of the shares. The final day of trading of Nokia’s shares on Euronext Paris was 30

December 2025.

| 92 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders •Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Articles of Association

Amendment of Nokia’s Articles of Association requires a

resolution of the general meeting of shareholders, supported by

two-thirds of the votes cast and two-thirds of the shares

represented at the meeting.

Registration

Nokia Corporation is organized under the laws of the Republic of

Finland and registered in the Finnish Trade Register under

business identity code 0112038-9. Under its current Articles of

Association, Nokia’s object is to research, develop, manufacture,

market, sell and deliver products, software and services related

to, among others, communication and enterprise networks. The

company may also create, acquire and license intellectual property

as well as engage in other industrial and commercial operations,

including securities trading and other investment activities. The

company may carry on its business operations directly, through

subsidiary companies, affiliate companies and joint ventures.

Directors’ voting powers

Under Finnish law, resolutions of the Board shall be made by a

majority vote. A director shall refrain from taking any part in the

consideration of an agreement between the director and the

company or a third party, or any other issue that may provide any

material benefit to him or her and which may be contradictory to

the interests of the company. Under Finnish law, there is no age

limit requirement for directors, and there are no requirements

under Finnish law that a director must own a minimum number of

shares in order to qualify to act as a director. However, in

accordance with the current Company policy, approximately 40%

of the annual fee payable to the Board members is paid in Nokia

shares purchased from the market or alternatively by using

treasury shares held by Nokia, and the directors shall retain until

the end of their directorship such number of shares that

corresponds to the number of shares they have received as Board

remuneration during their first three years of service (the net

amount received after deducting those shares used for offsetting

any costs relating to the acquisition of the shares, including taxes).

Share rights, preferences and

restrictions

Each share confers the right to one vote at general meetings.

According to Finnish law, a company generally must hold an

Annual General Meeting called by the Board within six months

from the end of the financial year. Additionally, the Board is

obliged to call an Extraordinary General Meeting whenever such

meeting is deemed necessary, or at the request of the auditor

or shareholders representing a minimum of one-tenth of all

outstanding shares. Under our Articles of Association, the Board

is elected at least annually at the Annual General Meeting of

shareholders for a term until the close of the next Annual

General Meeting.

Under Finnish law, shareholders may attend and vote at general

meetings in person or by proxy. It is not customary in Finland

for a company to issue forms of proxy to its shareholders.

Accordingly, Nokia does not do so. However, registered holders

and beneficial owners of ADSs are issued forms of proxy by the

Depositary.

To attend and vote at a general meeting, a shareholder must be

registered in the register of shareholders in the Finnish book-

entry system on or prior to the record date set forth in the

notice of the general meeting. A registered holder or a

beneficial owner of the ADSs, like other beneficial owners whose

shares are registered in the Company’s register of shareholders

in the name of a nominee, may vote with their shares provided

that they arrange to have their name entered in the temporary

The record date is the eighth business day preceding the

meeting. To be entered in the temporary register of

shareholders for the general meeting, a holder of ADSs must

provide the Depositary, or have their broker or other custodian

provide the Depositary, on or before the voting deadline, as

defined in the proxy material issued by the Depositary, a proxy

with the following information: the name, address, and social

security number or another corresponding personal

identification number of the holder of the ADSs, the number of

shares to be voted by the holder of the ADSs and the voting

instructions. The register of shareholders as of the record date

of each general meeting is public until the end of the respective

meeting. Other nominee-registered shareholders can attend

and vote at general meetings by instructing their broker or other

custodian to register the shareholder in Nokia’s temporary

accordance with the broker’s or custodian’s instructions.

By completing and returning the form of proxy provided by the

Depositary, a holder of ADSs also authorizes the Depositary to

give notice to us, required by our Articles of Association, of the

holder’s intention to attend the general meeting.

The rights of shareholders are related to the shares as set forth

in the Finnish Companies Act and our Articles of Association.

Neither Finnish law nor our Articles of Association set limitations

on the rights to own Nokia securities, including the rights of

foreign shareholders to hold or exercise voting rights in the said

securities. Amendment of the Articles of Association requires a

decision of the general meeting of shareholders, supported by

two-thirds of the votes cast and two-thirds of the shares

represented at the meeting.

Each of our shares confers equal rights to share in the

distribution of the Company’s funds. Under Finnish law, dividend

entitlement lapses after three years if a dividend remains

unclaimed for that period, in which case the unclaimed dividend

will be recognized as income by Nokia.

| 93 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders •Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Disclosure obligation of shareholder

ownership or voting power

According to the Finnish Securities Market Act, a shareholder

shall disclose their ownership or voting power to the company

and the Finnish Financial Supervisory Authority when the

ownership or voting power reaches, exceeds or falls below 5, 10,

15, 20, 25, 30, 50 or 90% of all the shares or the voting rights.

The term “ownership” includes ownership by the shareholder,

as well as selected related parties calculated in accordance with

the Finnish Securities Market Act, and calculating the ownership

or voting power covers agreements or other arrangements,

which when concluded would cause the proportion of voting

rights or number of shares to reach, exceed or fall below the

aforementioned limits. Upon receiving such notice, the

company shall disclose it by a stock exchange release without

undue delay.

Purchase obligation

Nokia’s Articles of Association require a shareholder whose

holding equals or exceeds one-third or one-half of all of our

shares to purchase the shares of all other shareholders that so

request. A shareholder who becomes subject to the purchase

obligation is also obligated to purchase any subscription rights,

stock options or convertible bonds issued by the company if so

requested by the holder. The purchase price of the shares under

our Articles of Association is the higher of: (a) the weighted

average trading price of the shares on Nasdaq Helsinki during

the ten business days prior to the day on which we have been

notified by the purchaser that its holding has reached or

exceeded the threshold referred to above or, in the absence of

such notification or its failure to arrive within the specified

period, the day on which our Board otherwise becomes aware of

this; or (b) the average price, weighted by the number of shares,

which the purchaser has paid for the shares it has acquired

during the last 12 months preceding the date referred to in (a).

Under the Finnish Securities Market Act, a shareholder whose

voting power exceeds 30% or 50% of the total voting rights in a

company shall, within one month, offer to purchase the

remaining shares of the company, as well as any other rights

entitling to the shares issued by the company, such as

subscription rights, convertible bonds or stock options issued

by the company. The purchase price shall be the market price of

the securities in question. Subject to certain exceptions, the

market price is determined on the basis of the highest price

paid for the security during the preceding six months by the

shareholder or any party in close connection to the shareholder.

Subject to certain exceptions, if the shareholder or any related

party has not during the six months preceding the offer

acquired any securities that are the target for the offer, the

market price is determined based on the average of the prices

paid for the security in public trading during the preceding

three months weighted by the volume of trade.

Under the Finnish Companies Act, a shareholder whose holding

exceeds nine-tenths of the total number of shares or voting

rights in a company has both the right and, upon a request from

the minority shareholders, the obligation to purchase all the

shares of the minority shareholders for the then current market

price. The market price is determined, among other things, on

the basis of the recent market price of the shares. The purchase

procedure under the Finnish Companies Act differs, and the

purchase price may differ, from the purchase procedure and

price under the Finnish Securities Market Act, as discussed

above. However, if the threshold of nine-tenths has been

exceeded through either a mandatory or a voluntary public offer

pursuant to the Finnish Securities Market Act, the market price

under the Finnish Companies Act is deemed to be the price

offered in the public offer, unless there are specific reasons to

deviate from it.

Pre-emptive rights

In connection with any offering of shares, the existing

shareholders have a pre-emptive right to subscribe for shares

offered in proportion to the amount of shares in their

possession. However, a general meeting of shareholders may

vote, by a majority of two-thirds of the votes cast and two-

thirds of the shares represented at the meeting, to waive this

pre-emptive right provided that, from the company’s

perspective, weighty financial grounds exist.

Monitoring of Foreign Corporate

Acquisitions

Under the Finnish Act on the Monitoring of Foreign Corporate

Acquisitions (2012/172 as amended), a notification to the

Ministry of Economic Affairs and Employment is required for a

non-resident of Finland, directly or indirectly, when acquiring

one-tenth or more of the voting power or corresponding factual

influence in a company. The Ministry of Economic Affairs and

Employment has to confirm the acquisition unless the

acquisition would jeopardize important national interests, in

which case the matter is referred to the Council of State. If the

company in question is operating in the defense sector, an

approval by the Ministry of Economic Affairs and Employment is

required before the acquisition is made. These requirements are

not applicable if, for instance, the voting power is acquired in a

share issue that is proportional to the holder’s ownership of the

shares. Moreover, the requirements do not apply to residents of

countries in the European Economic Area or EFTA countries,

except where at least one-tenth of shares or other controlling

right in such resident are held by a party not resident in the

European Economic Area or EFTA.

| 94 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Risk factors

Set forth below is a description of risk

factors that could affect our business.

Shareholders and potential investors

should carefully review the following risk

factors, in addition to other information

contained in this report. The risk factors

described below should not be construed

as exhaustive. There may be additional

risks that are unknown to us, and other

risks currently believed to be immaterial

that could turn out to be material.

These risks, either individually or collectively, could adversely

affect our business, competitiveness, market share, sales,

costs, expenses, results of operations, profitability, financial

condition, liquidity, reputation, brand and share price. Unless

otherwise indicated or the context otherwise requires,

references in these risk factors to “Nokia”, the “Nokia Group”,

“Group”, “we”, “us” and “our” mean Nokia’s consolidated

operating segments. Certain risks or events may be more

prevalent with respect to the Group or a certain business group,

business or part of the Group.

In evaluating the risks, one should not rely exclusively on the

bullets in the below summary but read the full risk factor

discussion. This report also contains forward-looking

statements that involve risks and uncertainties presented in

“Forward-looking statements” above.

Risk factors summary

Our capability to compete and remain a leading provider of

technology, software and services in the industries and markets

in which we operate is dependent on multiple external and

internal factors, partially outside our control, such as:

Risks related to our strategy and its execution

▪Our success in executing the new strategy, correctly identifying and

pursuing opportunities and mitigating risks and in improving the

operational and financial performance, including:

–Positioning ourselves to lead in the Artificial Intelligence-driven

transformation of networks;

–Dependency on sustained traffic growth in customers’ networks and

data centers (DC), introduction of new use cases and low-latency

services to drive the demand for network intelligence and growth in

AI & Cloud;

–Realizing the benefits of the new operating model, delivering

operational continuity and efficiency;

–The degree our investments, including business ventures, result in

technologies, products or services that achieve or retain broad or

timely market acceptance, answer to the expanding needs or

preferences of our customers or consumers, or in breakthrough

innovations, research assets, and intellectual property that we could

otherwise utilize for value creation;

–Our success in acquiring or divesting businesses and technologies,

integrating acquisitions and transitioning divestments, entering into

licensing arrangements, minority investments, forming and managing

joint ventures or partnerships and in realizing the anticipated

business plans, benefits, synergies, cost savings or efficiencies from

these efforts;

–Our ability to realize the anticipated benefits, synergies, cost savings

or efficiencies from acquisitions and to avoid unforeseen integration

obstacles;

–Dependency on the performance of our partners and success in

forming partnering arrangements with third parties;

–Our success in identifying and implementing the appropriate

measures to improve operational performance and cost-efficiency in

order to continue investments in R&D and future capabilities,

including 5G-Advanced and 6G, intra- and inter-data center

solutions, enterprise, cloud, artificial intelligence, automation,

digitalization, security and development of new standard essential

patents and to reach targeted results, benefits and other

improvements; and

–Our ability to meet our own sustainability targets, identify, evaluate

and address sustainability related risks and opportunities

appropriately, and to comply with stakeholder and societal

expectations and practices and with the increasing number of

regulatory requirements related to sustainability, including

mandatory transparency and disclosure requirements, impact to

human rights, and considering our reliance on global supply chains

and the challenges and limitations in the availability of accurate

information contributing to measurement uncertainty in provided

quantitative metrics and monetary amounts in our sustainability

related disclosures.

Surrounding economic, financial and competitive environment

▪General economic and financial market conditions, such as the level of

inflation and unemployment, increased global macroeconomic uncertainty,

major currency fluctuations, higher interest rates and financing costs,

and other developments in the economies and industries where we, our

customers, partners and suppliers operate, including adverse

developments in the policies governing international trade or markets

such as export and import controls, including increases in tariffs, and any

geopolitical escalation such as in the US-China relations, in tensions in

East Asia, Venezuela and ongoing situations in Ukraine and the Middle

East;

▪Intense competition and development of the industries and markets in

which we operate, including:

–The cyclical nature of the markets;

–Technological changes, such as acceleration of AI/automation, and

the speed of technological adoption;

–Competitor behavior and the breadth of the qualified supplier pool;

–Customer consolidation, customer spending appetite and purchase

behavior, deployments and rollout timing;

–Period of high inflation and our ability to pass increased costs to our

pricing;

–Price erosion largely driven by competition challenging the

connectivity business models of our customers;

▪Our dependency on a limited number of big customers and large multi-

year agreements, a single customer or a contract loss, and

competitiveness of, or developments regarding, pricing and contractual

terms we offer or have in place with the customer; and

▪Developments with respect to customer financing, extended payment

terms or credit lines that we provide our customers, such as willingness

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of banks or other institutions to provide guarantees or financing to our

customers or to purchase our receivables.

Our competitiveness

▪Our success in the development of new technologies, services and

upgrades, their rollout and commercialization in a timely manner,

including:

–Our ability to adapt to changing business models, rapid technological

advances and to meet new competition, such as new AI-native

companies or existing competitors leveraging AI more effectively;

–Shifts and trends, such as AI-driven transformation of networks,

cloudification, Open RAN and openness in general, virtualization and

disaggregation, and our ability to integrate advanced AI capabilities

into Nokia's core products and solutions with potential impact on the

attractiveness of our portfolio of products and services, competitive

landscape, business models and our margin profile;

–Our ability to invest in new competitive high-quality products and

services, such as 5G-Advanced, Open RAN, 6G, AI-native networks,

intra-DC and inter-DC connectivity, next-generation broadband

access, the Internet of Things (IoT), the cloud or software, upgrades

and technologies that have accurately anticipated technological,

regulatory and market trends;

–Certain technology limits in key technologies or adoption of

unforeseen disruptive technologies by our competitors, that might

change demand patterns for our products and services and the

competitive dynamics;

–Our capabilities to manage end-to-end costs related to our portfolio

of products and services, meeting evolving expectations and

complying with regulatory requirements and standards;

▪Severity of inefficiencies, operational incidents, malfunctions or

disruptions of our information technology systems and processes or

disruptions of services relying on our own or third-party IT;

▪Actual or perceived security or privacy breaches, including cybersecurity

threats and incidents, data leakage, defects, errors or vulnerabilities in

our technology and services and that of third-party providers;

▪Our manufacturing, service creation, delivery, logistics or supply chain to

operate without significant interruptions or shortages, including the

impacts of geopolitical tensions and open conflicts feeding uncertainty in

the global supply chain;

▪Performance capabilities of our partners and suppliers, and their high

standards to meet product quality, health, safety or security

requirements or comply with other regulations or local laws, such as

environmental or labor laws;

▪Natural or man-made disasters, military actions, wars, labor unrest, civil

unrest or health crises, impacting our service delivery or production sites

or the production sites of our suppliers, which are geographically

concentrated; and

▪Our ability to retain, motivate, develop, reskill and recruit appropriately

skilled employees and to balance our workforce.

Intellectual property rights and licensing

▪Our ability to protect our innovations and to maintain the strength of our

intellectual property portfolio, such as;

–Our ability to create new relevant technologies, products and

services through our R&D,

–Our ability to monetize our intellectual property for instance, due to

market, regulatory and other developments, or court rulings in

intellectual property-related litigation and other disputes;

–Uncertainty relating to the evolving geopolitical environment, global

regulatory and standardization landscape relating to intellectual

property;

–Developments in the concentrated smartphone market, the source

of a significant portion of our patent licensing income;

▪Our ability to renew existing license agreements and conclude new

license agreements regarding our intellectual property that we license to

others on acceptable commercial terms, and the timing, cost, and

potential need for litigation to achieve such renewals and new license

agreements; and

▪Our ability to renew or finalize licenses regarding technologies that are

licensed to us on acceptable commercial terms and to handle claims that

we have allegedly infringed third parties’ IPR.

Geopolitical, legal, regulatory and compliance environment

▪Complexity of direct and indirect regulation, and exposure to political

developments affecting trade, such as:

–Unfavorable or unpredictable treatment in relation to trade

sanctions, tariffs, tax matters and export controls, such as the

changes in the U.S. and multilateral trade policies, including the

export and import controls and laws, particularly with regard to

China, Mexico, Canada and the EU and regulation favoring local

industry participants;

–Complex regulatory frameworks impacting taxation, national

security, competition law, exchange controls, sanctions, cyber

security, communications technology, supply chains, environmental,

social and governance (ESG) topics, including integrity and anti-

corruption;

–Geopolitical tensions, escalations or expansions into open conflicts,

such as potential further developments related to the situations in

Ukraine and in the Middle East and risks related to tensions in

Venezuela, East Asia and in the countries in the Sahel and West

Africa;

–Our level of dependence on emerging markets subject to political

and regulatory changes and economic volatility;

–Changes in existing regulations or in their application, and emerging

new regulation impacting our products, services or business,

including:

–Roll back of certain legislative acts and initiatives, variation in

national implementation of EU legislation and divergence of

regulatory frameworks in the EU, the U.S. and other relevant jurisdictions;

–Emerging new regulations applicable to current or new technologies,

products or telecommunications and technology sectors in general;

–Our products, services and operations meeting all relevant quality,

health, safety or security standards and other recommendations

globally and compliance with laws and regulations, such as related to

digital economy, sustainability, responsible AI, telecommunications

and technology, security and privacy, including network and product

security, protection and transfer of personal data, data access and

use;

▪Uncertainty on the outcome of inspections, investigations, claims, and

government proceedings which we may be subject to at any given time

due to the global nature of our business;

▪Disruptiveness of litigation, arbitration, agreement-related disputes or

product liability-related allegations;

▪Our ability to maintain an effective system of governance and

compliance processes, disclosure controls and internal control over

financial and sustainability reporting and influence those of third parties

whose performance we may be held liable for; and

▪The degree of control and level of influence in the joint ventures where

Nokia is the minority partner and other affiliated companies where Nokia

does not have direct management control, or which are not fully

integrated into its operational infrastructure.

Financial and tax-related uncertainties

▪Complexity of tax laws and rules, including any changes in the aforesaid,

as well as diverse tax authority practices and interpretations;

▪Our ability to utilize our tax attributes and deferred tax assets;

▪Having access to sources of funding on favorable terms or at all;

▪Our ability to maintain our investment grade credit ratings;

▪Exchange rate fluctuations impacting our net sales, costs and results of

operations, as well as the US dollar value of our dividends and market

price of our ADSs;

▪Our pension and other post-employment benefit obligations and the

potential need for increased funding; and

▪Recoverability of the carrying amount of our goodwill, which could result

in significant impairment charges.

Ownership of our shares

▪Uncertainty of the amount of dividend and/or repayment of capital and

other profit distributions such as share buybacks to shareholders for

each financial period;

▪Volatility of the trading price of our shares and ADSs, including as a result

of factors outside our control; and

▪Requirement for non-Finnish shareholders to provide detailed

information in order to obtain advantageous withholding tax treatment

for dividends.

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Full risk factor discussion

Risks related to our strategy and its execution

We may be unable to successfully implement our strategic

plans, sustain or improve the operational and financial

performance of our business groups, correctly identify or

successfully pursue business opportunities, correctly

anticipate or successfully mitigate technological disruptions or

otherwise grow our business.

Our success depends on our ability to become and remain a

leading provider of technology, software and services in the

industries and markets in which we operate. However, there can

be no assurance that we will correctly identify trends,

opportunities or threats that we need to pursue or mitigate to

achieve our goals or targets. For example, the aim of our new

strategy is to position ourselves to lead in the Artificial

Intelligence (AI)-driven transformation of networks and capture

the value of the “AI supercycle” focusing on five strategic

priorities; (i) accelerating growth in AI & Cloud; (ii) leading the

next era of mobile connectivity with AI-native networks and 6G;

(iii) growing by co-innovating with customers and partners; (iv)

focusing capital where Nokia can differentiate; and (v) unlocking

sustainable returns. AI supercycle is driving an unprecedented

demand for network capacity, requiring networks to be more

performant, automated, and optimized for specific AI traffic

patterns, with a strong focus on low latency, high throughput,

and energy efficiency.

As part of the updated strategy, we have transitioned to a new

operating model effective 1 January 2026 with two primary

segments – Networks Infrastructure and Mobile Infrastructure -

and a Portfolio Businesses group for non-core assets. The

realignment is intended to accelerate growth opportunities

from the global “AI supercycle” and enhance focus on AI-native

networks, 6G, cloud infrastructure and software-defined

networking. The revised strategy, with its sharper focus on

capital allocation and AI-centric business models, entails

enhanced operational and execution risks, including the

challenges of scaling new AI & Cloud solutions, responding to

competitive threats including technology-driven entrants

benefiting from lower barriers of entry or disruptive business

modes, and adapting to rapid shifts in customer demand for

network intelligence, low latency applications, security, and

sustainability requirements.

There is no assurance that we will effectively manage the

transition and execute new strategy effectively, deliver

operational continuity, or avoid unforeseen integration

obstacles as resources, leadership and activities are reallocated

across the new structure.

Our path to continued technology leadership lies in long-term

research and development to drive innovation across a

comprehensive portfolio of network equipment, software,

services and licensing. We are investing, for instance, in 5G-

Advanced and 6G research, autonomous networks, data center

interconnect, intra-data center solutions spanning data center

fabrics and optics, silicon and systems leadership, security and

the in development of new standard-essential patents. The R&D

of innovative products, services and technologies is a complex

and uncertain process, and there can be no assurance that our

investments will result in technologies, products or services that

achieve or retain broad or timely market acceptance, are

commercially successful, answer to the expanding needs or

preferences of our customers or consumers, or lead to

breakthrough innovations that we could use for value creation.

As part of implementing our strategic plans we, for instance,

enter into licensing arrangements, partner with third parties and

have entered into a number of and may engage in the future in

transactions, such as divestments and acquisitions, mergers,

joint ventures and minority investments that could complement

or improve our existing operations or technologies, sharpen our

business focus and enable us to grow our business. There can

be no assurance that our efforts to continuously improve our

operations and realize efficiencies will or continue to generate

the expected results or improvements, or that we will achieve

intended targets or financial objectives related to such efforts.

For instance, the underlying rationale, initial assumptions or the

business case in terms of profits, revenue, strategic impact or

otherwise justifying the creation or continuation of a certain

arrangement may not be realized. We may also encounter issues

or inefficiencies related to our organizational and operational

structure, including being unable to successfully implement the

business plans. Also, the planned transactions may not ultimately

be completed on favorable terms or at all, or transactions may

result in liabilities or claims, such as indemnification or breach

of contract claims. The divestment or investment decisions we

make may subject us to litigation arising from minority

shareholders’ actions and investor dissatisfaction with the

activities of our business. Shareholder disputes, if resolved

against us, could have a material adverse effect on us.

We are also engaged in business ventures, including technology

innovation and incubation. Such business areas or plans may be

adversely affected by adverse industry and market developments

in the numerous diverse markets in which we operate, and the

investments we make may not achieve the targeted scale,

intended benefits or yield expected rates of return.

We may be unable to realize the anticipated benefits,

synergies, cost savings or efficiencies from acquisitions, and

we may encounter issues or inefficiencies related to our

organizational and operational structure including being

unable to successfully implement related business plans.

The level of effort required for successful integration of

acquired businesses or assets depends on the complexity of the

acquired business or asset. There can be no assurance that we

will be able to realize the intended organizational and

operational benefits and potentially targeted cost savings

related to our business plans in the manner or within the

timeframe currently anticipated. The risks and uncertainties

relating to the integration include, among others, the

distraction of our management’s attention from our business

resulting in performance shortfalls, the disruption of our

ongoing business, interference with our ability to maintain our

relationships with customers, vendors, regulators and

employees, and inconsistencies in our services, standards,

quality, product road maps, controls, procedures and policies,

any of which could have a material adverse effect on our

business, financial condition and results of operations.

These failures could be triggered, among others, by the following

factors impacting the integration of process and operations:

▪adverse contractual issues or disputes with respect to

various agreements with third parties, employment

agreements, or pension and other post-employment

benefits-related funding or liability issues;

▪our failure to identify issues and liabilities at the target

business or assets during the due diligence and pre-

acquisition process by which we may be exposed to

unknown, larger or contingent liabilities of acquired

businesses, such as those related to contractual obligations,

taxes, pensions, environmental liabilities, disputes and

compliance matters;

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▪disruptions caused, for instance, by reorganizations, which

may result in inefficiency within the new organization

through loss of key employees or delays in implementing our

intended structural changes, among other issues;

▪inability to rationalize or streamline our organization or

product lines/services, or to retire legacy products and

related services as a result of pre-existing customer

commitments;

▪loss of, or lower volume of, business from key customers, or

the inability to renew agreements with existing customers or

establish new customer relationships, including limitations

linked to customer policies with respect to aggregate vendor

share or supplier diversity policies or increased efforts from

competitors aiming to capitalize on disruptions;

▪conditions and burdens imposed by laws, regulators or

industry standards on our business, or adverse regulatory or

industry developments or litigation affecting us;

▪unanticipated changes in business, industry or general

economic conditions that affect the assumptions underlying

the acquisition;

▪issues relating to fraud, non-compliance with applicable laws

and regulations, improper accounting policies, improper

internal control or other improper activities;

▪challenges relating to the consolidation or ongoing

integration of corporate, financial data and reporting,

control and administrative functions;

▪the coordination of R&D, marketing and other support

functions of the combined business may fail or cause

inefficiencies or other administrative burdens;

▪our inability to eliminate the complexity of our corporate

structure following the acquisition; and

▪impairments related to goodwill and other intangible assets,

for instance, due to business performance after an

acquisition or differences in evaluating the goodwill with

respect to the acquired businesses.

Additionally, the anticipated cost reductions and other benefits

expected to arise from the acquisitions and integration of

businesses, as well as related costs to implement such

measures, are derived from our estimates, which are uncertain.

The underlying assumptions are inherently uncertain and

subject to a variety of significant business, economic, and

competitive factors, risks and uncertainties that could cause

our actual results to differ materially from those contained in

the expected synergy benefits and related cost estimates.

Performance failures of our partners as well as failures to

agree to partnering arrangements with third parties could

adversely affect us.

We are increasingly collaborating and partnering with third

parties to develop technologies, products and services, as well

as seeking new revenue streams through partnering

arrangements. We also depend on partners in our efforts to

monetize our technologies, including those of Nokia and Nokia

Bell Labs, and we have outsourced various functions to third

parties and are relying on them to provide certain services to us.

Although the objective of the collaborative and partnering

arrangements is a mutually beneficial outcome for each party,

our ability to introduce and provide technologies, products and

services in a timely manner and so that those are commercially

viable and meet our, our customers’ and consumers’ quality,

safety, security and other standards could be hampered by

performance or other failures of our partners or the companies

we collaborate with. For instance, if a partner acts inconsistently

with our ethical, sustainability, compliance, brand or quality

standards, this can negatively affect our reputation, the value of

our brand and the business outcome of our partnerships.

Furthermore, if we fail to achieve the collaboration or partnering

arrangements needed to succeed, we may be unable to bring

our products, services or technologies to market successfully or

in a timely manner. It is also possible that the parties we

currently collaborate with, turn into our competitors.

In many areas, including R&D, IT, finance and human resources-

related arrangements, a failure to maintain an efficient

relationship with the selected partner may lead to ongoing

operational problems or even to severe business disruptions,

and the availability of the processes and services upon which we

rely may be interrupted. Performance problems may result in

missed reporting deadlines, internal controls challenges,

financial losses, missed business opportunities and reputational

harm. In addition, as management’s focus shifts from a direct to

an indirect operational control in these areas, there is a risk that

without active management and monitoring of the relationship,

the services provided may be below appropriate quality

standards. Partners may not meet agreed service levels, in

which case, depending on the impacted service, our contractual

remedies may not fully cure all of the damages we may suffer.

This is particularly true for any deficiencies that would impact

the reporting requirements applicable to us as a company listed

on multiple stock exchanges. In outsourcing projects, we may

encounter disruption to business resulting from broken

processes and distraction of our employees that may need to

train the partner’s staff or be trained in the partner’s systems.

Adjustments to staff size and transfer of employees to the

partner’s companies could have an adverse effect on us, for

instance, through impacting the morale of our employees,

raising complex labor law issues and resulting in the loss of key

personnel. Additionally, partnering and outsourcing

arrangements can create a dependency on a given partner

causing issues in our ability to learn from day-to-day

responsibilities, gain hands-on experience, adapt to changing

business needs and properly transfer the specific know-how to

the new outsourcing partners. Concerns could equally arise

from giving third parties access to confidential data, strategic

technology applications and books and records. There is also a

risk that we may not be able to determine whether internal

controls have been effectively implemented, and whether the

partner company’s performance and controls monitoring

reports are accurate.

Our efforts aimed at managing and improving our financial or

operational performance may not lead to targeted results,

benefits, cost savings or improvements in our

competitiveness.

We are continuously targeting increased efficiency of our

operations. The strategic and operational changes to our

business and a program to reset our cost base while protecting

our R&D capacity and commitment to technology leadership

continue.

Failure by us to determine the appropriate operational

structure, prioritization of operating expenses and other costs,

to identify and implement the appropriate measures to increase

simplicity and improve cost-efficiency, or to maintain achieved

efficiency levels, could limit our future investments and have a

material adverse effect on our competitiveness, results of

operations and financial condition. Our current and future cost-

saving measures may be costly, potentially disruptive to

operations, and may not lead to sustainable improvements in

our overall competitiveness and profitability, and there can be

no assurance that such measures will be met as planned in

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contemplated timeframes or at all. Our plans may be altered in

the future, including adjusting any projected financial or other

targets. The anticipated costs or the level of disruption

expected from implementing such plans or restructurings may

be higher than expected. Efforts to plan and implement cost-

saving initiatives may divert management attention from the

rest of the business and adversely affect our business.

There are also several other factors that may prevent or delay a

successful implementation of any cost-saving or efficiency

improvement initiatives, including, among others, the following:

▪the need to make additional investments in other areas such

as 5G-Advanced and 6G, enterprise, security, cloud, artificial

intelligence, development of new standard essential patents

and automation/digitalization of services and our own

operations;

▪inaccuracy in our expectations with respect to market

growth, customer demand and other trends;

▪legislative constraints or unfavorable changes in legislation

in the markets in which we operate influencing timing, costs

and expected savings of certain contemplated initiatives;

▪our ability to align and adjust resources, systems and tools,

including digitalization and automation of processes, related

to implementation of planned organizational changes;

▪intended business plans may require us to inform or consult

with employees and labor representatives, and such

processes may influence the timing, costs and extent of

expected savings and the feasibility of certain contemplated

initiatives;

▪inflation driving increase in cost base; and

▪bargaining power of our suppliers which may prevent us

from achieving targeted procurement savings.

Furthermore, cost-saving initiatives may negatively affect our

ability to develop new or improve existing products and

compete effectively in certain markets, and there is no

guarantee that we will continue to be able to successfully

innovate or remain technologically competitive.

We may be subject to increased scrutiny related to our

sustainability activities and disclosures. Our results, reputation

and brand as well as the willingness of customers and suppliers

to do business with us could be harmed if we fail to meet the

regulatory sustainability-related requirements, stakeholder

and societal expectations and our sustainability targets.

Our business could be negatively impacted if we fail to

appropriately address existing and emerging sustainability

matters, including related market pressure. We may fail or be

unable to fully achieve one or more of our sustainability targets,

such as our greenhouse gas emission commitments, due to a

range of factors within or beyond our control, and we may

adjust or modify our targets in light of new information,

adjusted projections, or a change in business strategy, any of

which could negatively impact our brand, reputation, and

business. For instance, our decarbonization efforts are heavily

dependent on the supply and use of renewable energy and

biofuels which may not be available for our customers or supply

chain in all markets or may not reach affordable cost levels for

the actors in our value chain. It is also possible that

stakeholders may be dissatisfied with our sustainability

practices and targets or the speed of their implementation

which could result in action against Nokia by regulators or other

third parties or negative pressure on us or our stock.

The sustainability regulatory environment is complex and

volatile with new requirements proposed or adopted by various

regulators worldwide requiring continuous and consistent

monitoring of regulatory developments and evaluation to

determine applicability to Nokia. Potential failure to, or

perception of a failure to, adapt, disclose relevant metrics, set

targets and implement actions and controls that are rigorous

enough or otherwise in compliance with applicable regulations,

or to prioritize the most material sustainability actions and

targets, could negatively impact our brand, reputation, and

business. We could also incur additional costs and require

additional resources to address evolving regulatory

requirements and to monitor and report on our sustainability

performance programs, and those of our value chain partners, as

required, and to comply with various sustainability practices and

disclosure requirements. For instance, growing country-level

regulatory requirements demand country-specific reporting that

requires robust data collection, systems, controls, processes and

sufficient resource availability. The high number of data points

to be provided and the lack of global harmonization of standards

in the ESG data disclosures makes ESG-related reporting difficult

and resource consuming, which may contribute to challenges for

investors to correctly assess disclosures or our ability to comply

with each disclosure requirement. It is also possible that third

parties rating our ESG practices and performance may make

unfavorable, inaccurate or unsubstantiated interpretations of

our ESG practices and performance based on their own

assessments and publish such interpretations with or without

offering us the possibility to comment.

We may be unable to evaluate climate- and other sustainability-

related risks and opportunities accurately and to identify and

implement strategies for long-term resilience. We foresee that

the global rate of technology adoption will be partially driven by

sustainability matters, such as environmental impact of products

and processes, energy efficiency, security, social and governance

issues. For instance, increasing customer demands for sustainable

products may necessitate significant investments in R&D,

sourcing and relevant processes. Uncertainty, complexity and

volatility of regulatory requirements in countries where our

suppliers do business could impact negatively our suppliers’

ability to meet local and extraterritorial regulatory requirements

which are either directly or indirectly applicable to them, which

could lead to the need for Nokia to re-assess supplier

relationships and sourcing options in order to remain compliant.

Geopolitics, social and political unrest and climate change may

lead to increased labor migration and to political and climate

refugees pushing informal labor into supply chain. Extreme

weather events or other climate-related disruptions could impact

our customers, potentially leading to increased expectations

regarding the resilience of our products and solutions. As artificial

intelligence becomes part of both our product offerings, as well

as of our processes, concerns regarding legally compliant,

sustainable and ethical AI could lead to reputational damage or

regulatory sanctions.

A portion of our product portfolio and customer base relates to

defense and dual-use applications, including secure and mission

critical communications, tactical communications, cyber

capabilities, and private wireless network. These activities may

increase exposure to risks in the area of human rights and export

controls. We conduct Human Rights Due Diligence (HRDD), guided

by international standards such as those of the UN Guiding

Principles, the Organization for Economic Co-operation and

Development (OECD), prior to sales to identify, assess, and

mitigate potential human rights impacts, particularly concerning

sales into higher-risk geographies or use cases that may be

subject to evolving export controls, sanctions, procurement

standards, and stakeholder scrutiny. While we implement

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escalation and approval thresholds, contractual controls,

employee training, and post-sale monitoring where feasible, these

measures have inherent limitations, including constraints on

visibility into end use and the potential for rapid geopolitical

change to outpace existing controls.

Potential failure, or perceived failure, to meet sustainability

disclosure regulations, ethical standards and practices, due

diligence criteria, stakeholder or societal expectations, or to

achieve sustainability targets could result in regulatory

inquiries, enforcement, fines or other sanctions, as well as

negatively impact our reputation, access to financing, employee

retention, or access to financing, compromise our stakeholder

relationships and the willingness of our customers and suppliers

to do business with us.

Risks related to the general economic and

financial market conditions and to the

industries and markets in which we operate

Our sales and profitability have been and may in the future be

materially and adversely affected by general economic and

financial market conditions, such as inflation, increased global

macroeconomic uncertainty, major currency fluctuations,

higher interest rates and financing costs, and other

developments in the economies where we operate.

We are a global company with sales, R&D, manufacturing

facilities, partners and suppliers located in various countries

around the world. Adverse developments in and the weakness of

global economic conditions in general have an adverse effect on

us and the spending of our customers. Further, rising political

tensions could reduce trade volume, investment, technological

exchange and other economic activities between major

international economies, resulting in a material adverse effect

on global economic conditions and the stability of global

financial markets. For instance, the uncertain nature,

magnitude, and duration of hostilities stemming from Russia’s

military invasion of Ukraine, including the potential effects of

sanctions, retaliatory attacks on the world economy and

markets, and any other geopolitical escalation, for instance in

the US-China relations, in Venezuela, in the Middle East or East

Asia, and adverse developments in policies governing

international trade such as export and import controls, including

increases in tariffs, could contribute to increased market

volatility and uncertainty, which could have an adverse impact

on macroeconomic factors affecting market demand,

inflationary development and supply.

We are dependent on the purchase behavior of final end-users.

Any adverse developments in economies, such as increases in

the level of inflation, interest rates or unemployment, may

affect market demand for consumables, such as mobile devices,

mobile subscriptions and both the services that end-users

subscribe to and the usage levels of such services, which may

lead telecommunication providers to invest less in related

infrastructure and services or to invest in low-margin products

and services. This may further be mirrored as an adverse effect

on the business of our patent licensees and our patent licensing

income. Likewise, adverse developments in economic conditions

may lead certain customer segments, such as webscale

companies, transportation & logistics, energy, manufacturing,

and public sector verticals, to invest less or delay spend in

infrastructure and services to digitize their operations or to

invest in low-margin products and services. Further, the

purchasing power of our customers, particularly in developing

markets, depends to a greater extent on the price development

of basic commodities and currency fluctuations, which may

render our products or services unaffordable. Economic

slowdown may also lead to an overcapacity in supply and

inflated inventories, and to delays and shortages in case of

sharp recovery and ramp-up of demand with a potentially

adverse effect on our ability and our suppliers’ ability to deliver

products and services in time. Increasing inflation and other

current market conditions are driving cost increases in

operations, materials and labor, and may also result in strikes

and other industrial actions.

General uncertainty and adverse developments in the financial

markets could have a material adverse effect on our

customers’, suppliers’ and other partners’ ability to obtain

sufficient or affordable financing on satisfying terms. Higher

interest rates increase cost of financing. Uncertain market

conditions may increase the price of financing or decrease its

availability if the banks and investors were to tighten lending

standards or increase interest rates, or if certain assets would

decline in value, which could lead to difficulties in raising funds

or accessing liquidity necessary to maintain our financial

condition and ongoing operations.

We face intense competition and are dependent on

development of the industries and markets in which we

operate. The markets are cyclical and are affected by many

factors, including the general economic environment,

technological changes or the speed of technological adoption,

competitor behavior, customer consolidation, customers’

spending appetite and purchase behavior, including mix of

supply, deployments and rollout timing. Our existing

competition and new competition challenging the connectivity

business models of our customers are driving price erosion.

The competitive environment in the markets in which we

operate, including the related services markets, is characterized

by maturing industry technologies, 5G and related new

technologies, acceleration of AI/automation, diversification of

supplier ecosystems, equipment price erosion and aggressive

price competition. Our competition endeavors to gain market

share in selected regions where Nokia has a large footprint. In

our entry to data center market, we compete against large

incumbent players, as well as operate in a very complex

ecosystem with varying degrees of competition making

expansion challenging. Despite strong growth in mobile data

traffic, most of our customer base has been facing persistent

erosion in unit revenue and is reverting to vendors to

compensate for it. Competition for new customers, as well as

for new infrastructure deployment, is particularly intense and

focused on the favorability of price and agreement terms. We

compete with companies that have large overall scale, which

affords such companies more flexibility compared to us. In

addition, new competition may be entering the network

infrastructure and related services business through adoption

of new technologies or business models, such as virtualized RAN

and Open RAN or as-a-service models for products or services.

We are particularly dependent on the investments made by

telecommunication providers in mobile connectivity, network

infrastructure and related services. The pace and size of such

investments are in turn dependent on the ability of

telecommunication providers to increase their subscriber

numbers, reduce churn, maintain or increase their average

revenue per user, and compete with business models eroding

revenue from traditional voice, messaging and data transport

services. For instance, our plans assume sustained growth in

traffic over our customers’ networks and in data center loads.

For this to happen, video streaming needs to continue to grow

significantly, or new high-data use cases (for instance, Virtual

Reality or Augmented Reality) need to be developed and drive

high concurrency traffic and demand for low latency services.In

| 100 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

addition, we need to be able to drive down power and cost per

bit while increasing scale, agility and resiliency. Should these not

materialize, demand for our products and services could be

negatively affected.

The financial condition of telecommunication providers has

driven them to cost containment actions and merger activity

that have in the past constricted capital expenditure, and may

continue to do so in the future, resulting in further competition

and pressure on pricing and profitability. In addition, the

investments of the telecommunication providers in the new

spectrum assets may reduce their funds available for investing

in the new network infrastructure and related services.

Furthermore, the level of demand by telecommunication

providers, enterprise and other customers that purchase our

products and services is dependent on their ability to monetize

their investment and introduce new use cases and can therefore

change quickly and vary over short periods of time.

Telecommunication providers may also consolidate their

supplier base to our disadvantage — all the way to a one-

supplier model, for instance in a specific product area. In

addition, a portion of our revenues is driven by the timing of

completion and customer acceptances. As a result of the

uncertainty and variations in the telecommunications and

vertical industries, accurate forecasting of revenues, results and

cash flow remains difficult. Furthermore, significant reduction

of business with us could result in the loss of benefits related to

economies of scale.

We may be unable to respond successfully to technological

changes or to alternative technologies in the markets in which

we operate. Market developments favoring new technological

solutions, such as cloud, virtualization, edge computing,

programmable networks, AI-enabled automation and

alternatives such as satellite communications may result in

reduced spending to the benefit of our competitors who have,

or may have, a stronger position in such technologies. The

technological viability of standardized, low-margin hardware

products in combination with the virtualization of functions can

induce a change in purchase behavior, resulting in favoring

other vendors or in higher bargaining power versus Nokia due to

more alternative vendors. Our customers may prefer best-of-

breed from multiple vendors, a single vendor or turn to

alternative vendors to maintain end-to-end services.

Additionally, new competitors may enter the industry as a result

of acquisitions or shifts in technology. Furthermore, some

companies, including webscale companies, may drive a faster

pace of innovation in telecommunications infrastructure

through more collaborative approaches and open technologies

across access, backhaul, core and management.

We expect to generate a significant share of our growth from

new customers, including webscale companies and vertical

customers, for example in transportation & logistics, energy,

manufacturing, defense and public sector verticals. Each of

these sectors may face adverse industry developments, which

may significantly impact the size of investments addressable by

us and our ability to address these investments, in terms of

both having the right products available and being able to

obtain new customers and having the right go-to-market

capabilities and expertise to address the specific needs of these

sectors. Furthermore, there are various incumbent and new

actors competing with Nokia in these customer groups we

strategically target. With these types of customers, the nature

of competition and the required capabilities can be significantly

different from the telecommunication provider market,

including competition based on access network, core network,

cloud infrastructure, platforms, applications and devices, and

related services.

Competitive intensity remains high in the market as competitors

seek to take share in 5G rollouts, which is creating a risk of

persistent high price erosion in the industry. If domestic and

global economic conditions worsen, overall spending on 5G

infrastructure may be reduced or delayed, and spending in our

other network products and services might be even more

rapidly reduced to preserve the customer investment in 5G,

which would adversely impact demand for our products and

services in these markets. Further, any reduction in our market

share in 5G compared with our installed base in 4G due to

decisions to protect our profitability, inability to meet the

customers’ requirements or other reasons, may have a material

negative effect on our scale and profitability.

We are dependent on a limited number of big customers and

large multi-year agreements. The loss of a single customer or

contract, operator consolidation, unfavorable contract terms

or other issues related to a single agreement may have a

material adverse effect on our business and financial

condition.

A significant proportion of the net sales and profits that we

generate have historically been derived from a limited number

of customers. As consolidation among existing customers

continues, it is possible that an even greater portion of our net

sales will be attributable to a smaller number of large

telecommunication providers. These developments are also

likely to increase the impact on our net sales based on the

outcome of certain individual agreement tenders.

Telecommunication providers are also increasingly entering into

asset sharing arrangements, as well as joint procurement

agreements, which may reduce their investments and the

number of networks available for us to service. Furthermore,

procurement organizations of certain large telecommunication

providers sell consulting services to enhance the negotiating

position of small operators with their vendors.

As a result of the intense competition in the industry, we may

increasingly be required to agree to less favorable contractual

terms in order to remain competitive. Any unfavorable

developments in relation to, or any change in the agreement

terms applicable to, a major customer may have a material

adverse effect on our business, results of operations and

financial condition. Also, agreements in the networks business

are typically complex and long-term in nature and it is possible

that over time the contract terms of the agreement may prove

less favorable to us than originally expected, for instance due to

changes in costs and product portfolio decisions, and those may

be difficult to amend promptly to address new developments,

such as the recent period of accelerating inflation. Furthermore,

in particular given the bargaining power of our customers or

limited legal ability to deviate from the standard governmental

contract terms, we may be exposed to onerous terms and

liabilities in our customer contracts.

Loss of a single customer, its significant business or contract,

or other issues related to a single agreement, may have a

material adverse effect on our business and financial condition.

We have lost customers and contracts in the past and the same

may happen in the future. Furthermore, any suspension,

termination or non-performance by us under an agreement’s

terms may have a material adverse effect on us, for example

due to penalties for breaches, early termination or reduced

orders or customer footprint. In addition, we may lose existing

agreements, or we may be unable to renew or gain new

agreements, for instance due to customer policies that limit the

ability of customers to have one network provider exceeding a

certain threshold of business in a given market or as a result of

| 101 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

merger activity where the customer may decide to concentrate

their spending elsewhere.

The timing of sales and results of operations associated with

large multi-year agreements or turnkey projects may differ

significantly from expectations. For instance, recognition of

sales and related costs in network implementation projects are

often linked with achievement of customer acceptances, which

may delay for reasons that may or may not be attributable to

us. Moreover, such agreements often require dedication of

substantial amounts of working capital and other resources,

which may adversely affect our cash flow, particularly in the

early stages of an agreement’s term, or may require us to

continue to sell certain products and services, or to sell in

certain markets that would otherwise be discontinued or exited,

thereby diverting resources from developing more profitable or

strategically important products and services, or focusing on

more profitable or strategically important markets.

Furthermore, our customer agreements may involve complex

transformation of the networks as the customers deploy new

technologies and the related costs and scope of required

deliverables may differ from our expectations at the time we

enter into such agreements.

We may be adversely affected by developments with respect

to customer financing or extended payment terms that we

provide to our customers. Unwillingness of banks or other

institutions to provide guarantees or financing to our

customers or purchase our receivables could impair our

capability to enter agreements with new customers or

markets, to mitigate payment risk and to manage our liquidity.

Requests for customer financing and extended payment terms

are typical for our industry and uncertainty or lack of liquidity in

the financing markets, among other things, may result in

increased customer financing requests. In the event that export

credit agencies face constraints on their ability or willingness to

provide guarantees or financing to our customers, or there is

insufficient demand from banks or other financial institutions to

purchase receivables, such events could have a material adverse

effect on our business and financial condition. Furthermore,

reduced availability of credits by export credit agencies

supporting our sales could affect our ability to attract

customers and enter new markets thus facing the possibility of

reduced sales.

In certain cases, the amounts and duration of these financings

and trade credits, and the associated impact on our working

capital, may be significant. We have agreed to extended

payment terms for a number of our customers and may

continue to do so in the future. Extended payment terms may

result in a material aggregate amount of trade credits and even

when the associated risk is mitigated by a diversified customer

portfolio, defaults in the aggregate could have a material

adverse effect on us.

Our ability to manage our total customer financing and trade

credit exposure depends on a number of factors, including, but

not limited to, the market conditions affecting our customers,

the levels and terms of credit available to us and our customers,

the cooperation of export credit agencies and our ability to

mitigate exposure on acceptable terms. We may be

unsuccessful in managing the challenges associated with the

customer financing and trade credit exposure that we may face

from time to time, particularly in difficult financial conditions in

the market. While defaults under financings, guarantees and

trade credits to our customers resulting in impairment charges

and credit losses have not been significant for us in the past,

these may increase in the future. Further, commercial banks

may not continue to be able or willing to provide sufficient long-

term financing, even if backed by export credit agency

guarantees, due to their own constraints, and certain of our

competitors may also have greater access to such financing,

which could adversely affect our competitiveness. Additionally,

we have sold certain receivables to banks or other financial

institutions, and any significant change in our ability to continue

this practice could impair our capability to mitigate such

payment risk and to manage our liquidity.

Nokia also arranges bank guarantees and bonds in customers’

favor in relation to our business. In the event we are unable to

collect outstanding guarantees and bonds, this could limit our

possibilities to issue new guarantees and bonds, which are

required in customer agreements or practices. We also face a risk

that such commercial guarantees/bonds may be unfairly called.

Risks impacting our competitiveness

We may fail to invest effectively and profitably in new

competitive high-quality products, services, upgrades and

technologies or bring them to the market in a timely manner.

We also may fail to adapt to changing business models.

The industries in which we operate are characterized by rapidly

evolving technologies, frequent new technological requirements,

product feature introductions and evolving industry standards

impacting company competitive position. The participants in the

markets where we operate compete on the basis of product and

service offerings, technical capabilities and quality in addition to

price and affordability. As an example, virtualization and

cloudification of core and radio networks and the convergence

of IT and telecommunications may lower barriers of entry for IT

and webscale companies in the traditional telecommunications

industry, or they may build up tight strategic partnerships with

our traditional competitors or our telecommunication provider

customers. New AI-native companies or existing competitors

leveraging AI more effectively could challenge Nokia's market

share in various segments, including network automation,

software, and services.This enhanced competition may lead to

increased price competition and negatively affect our margins.

Virtualization and disaggregation might also affect other parts

of our portfolio and lead to changes in competitive landscape,

business models, and margin profile. Fast emergence of new

standards shortens technology cycles which may render current

products obsolete. Failure to integrate advanced AI capabilities

into Nokia's core products and solutions (e.g., 5G/6G , network

infrastructure and cloud, enterprise solutions) could render

them less competitive or outdated compared to AI-enhanced

alternatives. Also, reaching certain technology limits, for

example in Optical or in spectral efficiency gains in 6G, might

adversely change the demand pattern and competitive dynamics

for our products and services.

Our business performance and results of operations will depend

to a significant extent on our ability to succeed in the following

areas:

▪maintaining and developing a competitive product portfolio

and service capability that is attractive to our customers, for

instance by keeping pace with technological advances in our

industry and pursuing technologies that become

commercially accepted and price competitive, such as the

AI- nativity of networks;

▪maintaining compliance with regulatory requirements and

standards;

▪introducing new products, services and upgrades of current

products and doing so on a cost-efficient and timely basis;

| 102 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

▪developing new or enhancing existing processes and tools

for our service offerings;

▪optimizing the amount of customer or market-specific

technology, product and feature variants in our product

portfolio;

▪continuing to meet evolving expectations and enhancing the

quality of our products and services, complying with

emerging industry standards as well as introducing products

and services that have desired features and attributes, such

as energy efficiency;

▪maintaining and building up strategic partnerships in our

value creation chain (e.g., in product creation, project

delivery and go-to-market approach); and

▪leveraging our technological strengths and addressing

competing technological and product developments carried

out by competitors while keeping prices and costs at

competitive levels.

The R&D of new, innovative and technologically advanced

products and software, as well as upgrades to current products

and new generations of technologies, such as 5G-Advanced,

Open RAN, AI-native networks, 6G, co-packaged optics, data

center fabrics, next-generation broadband access and IoT, is a

complex and an uncertain process requiring high levels of

innovation and investment, including trying to accurately

anticipate technological, regulatory and market trends. We may

focus our resources on products and technologies that do not

become widely accepted or ultimately prove unviable.

Additionally, many of our current and planned products are

highly complex and may contain defects or errors that are, for

instance, detected only after deployment in

telecommunications networks. Even if we invest in new

competitive products, services, upgrades or technologies and

proactively manage the costs related to our portfolio of

products and services, including component sourcing,

manufacturing, logistics and other operations, we may still fail

to maintain or improve our market position, competitiveness or

scale, keep prices and costs at competitive levels or provide

high-quality products and services.

Certain of our competitors have significant resources to invest

in market exploration and may seek new monetization models

or drive industry development and capture value in areas

where we may not currently be competitive or do not have

similar resources available to us. These areas may include

monetization models linked to large amounts of consumer data,

large connected communities, home or other entertainment

services, alternative payment mechanisms or marketing

products. We also face competition from various companies

that may be able to develop technologies or products that

become preferred over those developed by us or result in

adverse effects on us through, for instance, developing

technological innovations that make our innovations less

relevant. In addition, reduced government funding and support

for our R&D activities could affect our ability to develop new

technology or products.

Inefficiencies, operational incidents, malfunctions or

disruptions of information technology systems and processes

could have a material adverse effect on our business and

results of operations. As our business operations, including

those we have outsourced, rely on complex IT core systems,

networks and related services, our reliance on the precautions

taken by us and external companies to ensure the reliability of

our own and third-party IT systems, networks and related

services is increasing. Consequently, certain disruptions in IT

systems and networks affecting us and our external providers

could also have a material adverse effect on our business.

All IT systems, networks and processes are potentially

vulnerable to damage, incidents, malfunction or interruption

from a variety of sources. Our own and customer-facing

operations rely on the efficient and uninterrupted operation of

complex and centralized IT systems, networks and processes,

which are integrated with those of third parties.

We are, to a significant extent, relying on third parties for the

provision of IT services. While we have outsourced certain

functions, we have also increased our dependence on the

reliability of external providers as well as on the security of

communication with them. We may experience disruptions if our

partners do not deliver as expected or if we are unable to

successfully manage systems and processes together with our

business partners. We will often need to use new service

providers and may, due to technical developments or choices

regarding technology, increase our reliance on certain new

technologies, such as cloud/SaaS, and certain other services

that are used over the internet rather than using a traditional

licensing model. Switching to new service providers and

introducing new technologies is inherently risky and may expose

us to an increased risk of disruptions in our operations, for

instance due to network inefficiency or outage, a cybersecurity

or a compliance incident, malfunctions, failure in disaster

recovery or IT service continuity or other disruptions resulting

from IT systems and processes.

We are committed to continuously enhancing the quality,

resilience, and security of our IT systems, supported by ongoing

investments, in-sourcing and robust risk-management

practices. However, despite precautions taken by us, we may fail

to successfully secure our IT. Our IT systems have in the past

and may in the future, be affected by external factors such as

telecommunications outages or evolving cybersecurity threats,

including malware or ransomware. Any malfunction or disruption

of our current or future systems, processes, networks or data

leakages, could have a material adverse effect on our business,

results of operations and brand value. A disruption of services

relying on our IT, for instance, could cause significant

discontent among customers and their end-users and may

result in claims, contractual penalties or deterioration of our

brand value. We are steadily modernizing our IT landscape as

part of our digital transformation strategy. However, the legacy

IT systems waiting for upgrades may be gradually more

vulnerable to malfunction, disruptions or security incidents than

the new IT systems replacing them.

We are exposed to risks related to information security. Our

business model relies on solutions for distribution of services

and software or data storage, which entail inherent risks relating

to applicable regulatory regimes, cybersecurity incidents and

other unauthorized access to network or data. Our business and

operations rely on data confidentiality and security incidents

may adversely affect privacy and/or our business.

Our business and operations rely on confidentiality of

proprietary and other sensitive information, for instance related

to our employees and our customers, including our government

customers. Our business models rely on certain centralized data

processing solutions and cloud or remote delivery-based

services for distribution of services and software or data

storage, accessible by our partners or subcontractors according

to the roles and responsibilities defined.

We, our service companies and joint ventures, products and

online services, marketing and developer sites and third parties

that we contract have been and may in the future be subject to

cybersecurity incidents, including hacking, ransomware, viruses,

| 103 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

worms and other malicious software, unauthorized

modifications, or other illegal activities that may cause potential

security risks and other harm to us, our customers or

consumers and other end-users of our products and services.

Information Technology is rapidly evolving, the techniques used

to obtain unauthorized access or sabotage systems change

frequently and the parties behind cyber-attacks and other types

of industrial espionage are sophisticated and have extensive

resources, and it is not commercially or technically feasible to

mitigate all known vulnerabilities in a timely manner or to

eliminate all risk of cyber-attacks and data breaches. The

widespread availability of artificial intelligence capabilities adds

an extra dimension to cyber threats resulting into more

sophisticated attack executed at scale. Additionally, we contract

with multiple third parties in various jurisdictions who collect

and use certain data on our behalf. Although we have processes

in place designed to ensure appropriate collection, handling and

use of such data, third parties may use the data inappropriately

or breach laws and agreements in collecting, handling or using

or leaking such data. Our business is also vulnerable to theft,

fraud or other forms of deception, sabotage and intentional

acts of vandalism and espionage by third parties and

employees. Further, compared to our fully integrated group

companies, our ability to mitigate and oversee risk of cyber-

attacks and data breaches may be more limited in our joint

venture companies and other group companies having their own

governance and system infrastructure, such as our local service

companies focusing on network field services.

Cybersecurity incidents can lead to lengthy and costly incident

response, remediation of the attack or breach, legal

proceedings and fines imposed on us, as well as adverse effects

to our reputation and brand value. Additionally, cyber-attacks

can be difficult to prevent, detect or contain. Certain cyber-

attacks have been and may in the future be successful and

evade our detection. We continue to invest in risk mitigating

actions to keep pace with the fast evolution of the threat

landscape; however, there can be no assurance that such

investments and actions will prevent, detect or contain future

cyber-attacks. Additionally, the cost and operational

consequences of implementing further information system

protection measures, especially if prescribed by national

authorities, could be significant. We may not be successful in

implementing such measures in due course, which could lead to

business disruptions and the implementation to be more

expensive, time-consuming and resource intensive. There are

increasing regulatory requirements globally mandating how

incidents should be managed and reported. Multi-faceted,

multi-jurisdictional reporting requirements may be difficult to

comply within the timescales required or regulation may have an

adverse impact on our ability to deal with the underlying event.

In connection with providing products and services to our

customers, certain data is collected, stored and processed

through us, either by us or by our business partners or

subcontractors in various jurisdictions. Loss, improper

disclosure or processing or leakage of any data collected by us,

or which is made available to us or our partners or

subcontractors or stored in or through our products and

services, could have a material adverse effect on us and harm

our reputation and brand. Additionally, governmental

authorities may seek to misuse our network products to access

the personal data of individuals without our involvement; for

example, through the generic lawful intercept capabilities of

network infrastructure, impairing our reputation.

We may face problems or disruptions in manufacturing, service

creation, delivery, logistics or supply chain. Such challenges

include securing availability of resources or components to

meet demand, ability to adapt supply, defects in products or

related software or services, and achieving required

efficiencies and flexibility.

We have an extensive supply network, including a geographically

dispersed manufacturing network consisting of both our own

manufacturing and contract manufacturing partners. We, or

third parties that we have outsourced manufacturing and

services delivery to, may experience difficulties in adapting

supply to meet fluctuating customer demand, ramping up and

down production, adjusting network implementation capabilities

as needed on a timely basis, maintaining an optimal inventory

level, adopting new manufacturing processes, finding the most

timely way to develop the best technical manufacturing

solutions for new products, managing the increasingly complex

manufacturing process, service creation and delivery process

and/or achieving required efficiencies and flexibility. In addition,

these operations are exposed to various risks and potential

liabilities, including those related to geopolitics, transition to a

low carbon economy, compliance with laws and regulations,

exposure to environmental non-compliance and liabilities and/

or other claims. In addition to operational complexity, these

factors may increase costs related to our supply chain.

Our manufacturing operations depend on obtaining sufficient

quantities of fully functional products, components, sub-

assemblies, software, services, energy, and other resources on

a timely basis. In certain cases, a particular component or

service may be available only from a limited number of suppliers

or from a single supplier in the supply chain. Suppliers have and

may, from time to time, extend lead times, limit supplies,

change their partner preferences, increase prices, provide poor

quality supplies or be unable to adapt to changes in demand due

to capacity constraints or other factors, which could adversely

affect our ability to deliver our products and services on a

timely basis or increase our costs. For example, the past global

semiconductor components shortage constrained our deliveries

and led to increase in procurement prices. Forecasts showing

extreme and rapidly accelerating demand for 800G pluggables,

as the market is shifting from 400G as the standard to 800G,

indicate that demand will outstrip supply in the coming years

while the supply chain suffers from long lead times for critical

components, single-source dependencies, and the complexities

of ramping up new product manufacturing and qualification.The

semiconductor supply chains are also highly interdependent and

sensitive to policy disruptions. The continuing concerns around

components and raw material availability, including postponed

restrictions set by the Chinese government to export of

computer chips containing rare earth materials, and potential

energy shortages in the market, if realized may have an impact

on our ability to deliver to our customers, as well as increase our

costs. We are working closely not only with our suppliers to

ensure component availability but also with our customers to

ensure we can meet their needs. We are also continuously

optimizing our critical material buffer to prepare for balancing

short-term disruptions. Many of our competitors and also

companies from other industries utilize the same contract

manufacturers, component suppliers and service vendors. If

they have purchased capacity or components ahead of us, or if

there is significant consolidation in the relevant supplier base,

this could prevent us from acquiring the required components

or services, which could limit our ability to supply our customers

and increase our costs. Our increasing involvement in defense

related projects may trigger the need to involve specialized and

unique suppliers. Disruptions in this specialized supply chain

may adversely impact our ability to fulfill contractual

obligations.

| 104 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Our products are highly complex and defects in their design,

manufacture and associated hardware, software, content and

installation have occurred in the past and may continue to occur

in the future. Quality issues may cause, for instance, delays in

deliveries, loss of intellectual property, liabilities for network

outages, court fees and fines due to breaches of significantly

increasing regulatory privacy requirements and related negative

publicity, and additional repair, product replacement or warranty

costs to us, and harm our reputation and our ability to sustain or

obtain business with our current and potential customers. With

respect to our services, quality issues may relate to the

challenges of having the services fully operational at the time

they are made available to our customers and maintaining them

on an ongoing basis. We may also be subject to damages due to

product liability claims arising from defective products and

components. We make provisions to cover our estimated

warranty costs for our products and pending liability claims. We

believe our provisions are appropriate, although the ultimate

outcome may materially differ from the provisions that are

provided for, which could have a material adverse effect on us.

Our suppliers and partners may fail to meet product quality,

health, safety or security requirements or comply with other

regulations or local laws, such as environmental, social or

labor laws.

A large proportion of our manufacturing, service creation and

delivery is carried out by third-party suppliers. These vary in size

and often engage a number of tiers of suppliers, which limits

our direct control. Suppliers may fail to meet our supplier

requirements or customer expectations, such as related to

product quality, safety and security. Certain suppliers may not

comply with local laws, including, among others, local labor law,

health and safety or environmental requirements. The activities

we manage or that are managed by third parties for us may also

be subject to negative publicity and purchasing boycotts, strikes

or other forms of social, political, economic or environmental

activism. These all can lead to exposure in the form of litigation,

product recalls or brand damage through association.

Adverse events, such as geopolitical disruptions, natural or

man-made disasters, civil unrest or health crises, have and

may continue to have an impact on our service delivery,

production sites and/or the production sites of our suppliers

and partners which are geographically concentrated.

Many of our production sites or the production sites of our

suppliers and partners are geographically concentrated, with a

majority of such suppliers and partners based in Asia. With

Infinera acquisition we gained ownership of semiconductor

manufacturing facilities in California. We rely on efficient

logistics chain elements, such as regional distribution hubs and

transport chain elements (main ports, streets and airways). In

the recent years, we have regionalized our supply network to

increase resilience. However, in the event that any of these

geographic areas are affected by any adverse conditions that

disrupt production or deliveries from our suppliers and partners,

which includes trade restrictions, severe impacts of

environmental events, geopolitical events such as tensions by

the Red Sea, man-made or natural disasters (for instance,

flooding, heavy rain, earthquakes, or extreme heat that climate

change is expected to further intensify), war, civil unrest or

health crises, our ability to deliver our products on a timely basis

could be adversely affected. In a similar manner, these adverse

conditions may also cause disruption to our service creation and

delivery, which, in either case, may lead to a material adverse

effect on our business and results of operations.

Competition for employees and leaders is increasing globally.

We may be unable to retain, motivate, develop, reskill and

recruit appropriately skilled employees or we may fail in

workforce balancing. Employees may face change fatigue or

reduction in motivation and energy as our efforts to evolve our

business and improve efficiency continue.

Our success in executing our strategy, to address opportunities

in new technologies, business models and customer segments

in particular, requires and is dependent on our ability to retain,

motivate, develop, reskill and recruit appropriately skilled

employees and, in particular, those with relevant technical

expertise. Competition for employees and leaders particularly in

some critical technology functions and niche markets such as

system-on-chip and artificial intelligence is increasing globally.

Our workforce has fluctuated over recent years as we have

introduced changes in our strategy to respond to our business

targets and endeavors. We continue with the strategic and

operational changes announced in October 2023. The related

program is expected to lead to a 72 000 to 77 000-employee

organization. Such changes and uncertainty may cause

disruption, fatigue and dissatisfaction among employees as our

efforts to evolve our business and maximize operational

efficiency continue. Employee motivation, energy, focus, morale

and productivity may be reduced, causing inefficiencies and

other problems across the organization and potentially resulting

in the loss of key employees and increased costs in resolving

and addressing such matters. The loss of key employees could

result in resource gaps, some of which may only be noticed after

a certain period of time or which negatively impact our

relationship with customers, vendors or other business partners.

Our efforts to rebalance our workforce as planned may fail, for

instance due to legal restrictions or collective bargaining

agreements, which may result in a non-optimal workforce,

larger than expected costs and not meeting our financial

targets for such plans. Our inability to negotiate successfully

with employee representatives or failures in our relationships

with such representatives could result in strikes and other

industrial actions by the employees which may in turn result in

significant disruption in our day-to-day operations and higher

ongoing labor costs. The market for skilled employees is

increasingly competitive, particularly given the similar

technology trends affecting various industries simultaneously

and increased remote working expanding the job market for

individual employees. We have encountered, and may in the

future encounter, shortages of appropriately skilled employees

or lose key employees or senior management. There can be no

assurances that we will be able to implement measures

successfully to retain or hire the employees we need. This may

require significant time, attention and resources from our

senior management and other key employees within our

organization and may result in increased costs or otherwise

have a material adverse effect on us.

Our continued transformation towards a high-performance,

technology-driven organization presents reputational and cultural

risks. If our initiatives in building the desired culture are deemed

aggressive, it may cause reputational harm and affect employer

brand and stakeholder perception. If these cultural changes are

not widely adopted or fully integrated into everyday business

practices, there is a risk of misalignment between strategic

objectives and employee behaviors. Insufficient engagement or

poor integration of the new cultural mindset could undermine

the progress of our business transformation efforts.

Risks associated with intellectual property

rights and licensing

Our patent licensing income and other intellectual property-

related revenues are subject to risks and uncertainties such as

our ability to maintain our existing sources of intellectual

property-related revenue, establish new sources of revenue

| 105 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

and protect our intellectual property from infringement. A

proportionally significant share of the current patent licensing

income is generated from the smartphone market, which is

rapidly changing and features a limited number of large vendors.

The continued strength of our intellectual property portfolios

depends on our ability to create new relevant technologies,

products and services through our R&D activities and to protect

and, where necessary, enforce our intellectual property rights

(IPR). If those technologies, products and services do not

become relevant, and therefore attractive to potential

licensees, the strength of our intellectual property portfolios

could be reduced. Despite the steps that we have taken to

protect our technology investments with IPR, we cannot be

certain that any rights or pending applications will be granted or

that the rights granted in connection with any future patents or

other IPR will be valid and sufficiently broad to protect our

innovations and maintain the relative strength of our portfolio.

Third parties may infringe our intellectual property relating to

our proprietary technologies or disregard their obligation to

seek necessary licenses under our patents or seek to pay less

than reasonable licensing fees. As a result, we may be unable to

continue to develop or protect our intellectual property-related

revenue or establish new sources of revenue.

Regulatory, geopolitical and other developments regarding

protection awarded to technology innovations, compensation

trends with respect to licensing and the underlying businesses

of our licensees, over which we have limited control, may impact

our ability to protect, monetize or divest our intellectual

property. Any patents or other IPR may be challenged,

invalidated or circumvented, and any right granted under our

patents may not provide competitive advantages for us. In the

technology sector generally, certain licensees are actively

avoiding concluding license agreements on fair and reasonable

commercial terms, or are withholding making license payments,

while some suggest that licensors may be able to collect

unreasonably high license payments, with both behaviors

attracting regulatory attention. Authorities in various countries

have increasingly monitored patent monetization and may aim

to influence the terms on which patent licensing arrangements

or patent divestments may be executed, which could

compromise control over or protection of our technology and

proprietary information. Such terms may be limited to a certain

country or region, which may, for example, lead to

fragmentation of the global framework for licensing of global

technology standards; however, authorities could potentially

seek to widen the scope and even impose global terms,

potentially resulting in further an adverse effect on our ability

to monetize our patent portfolios.

There is no assurance that past levels are indicative of future

levels of intellectual property-related revenue. Poor

performance by any of Nokia’s patent or technology licensees

may impact Nokia financially, for example, if a licensee’s ability

to pay is reduced, the licensee decides to divest or scale back a

particular part of its business or it becomes insolvent or

bankrupt. Additionally, poor performance of potential or current

licensees may limit a licensee’s motivation to seek new or renew

existing licensing arrangements with us. Furthermore, patent

license agreements can cover both past and future sales of

licensees, and the portion of the income that relates to

licensees’ past sales is not expected to have a recurring benefit.

Ongoing patent income from licensing is generally subject to

various factors (for instance, sales by the licensees) that we

have little or no control over, and it can vary considerably from

time to time based on factors such as the terms of agreements

we enter into with licensees.

We continue to expand the scope of our licensing activities to

other areas, in particular those that implement mobile

communications and multimedia technologies, such as the

automotive, consumer electronics, IoT, certain services and

multimedia. The actors in some of these industries may not

have traditionally paid intellectual property-related royalties

and the expansion of our licensing activities into such industries

may involve litigation. In addition, entering highly fragmented

markets or markets with a high volume of licensees may affect

our effectiveness and/or profitability.

We also enter into business agreements on behalf of our

business groups, which may grant certain licenses to our

patents. Some of these agreements may inadvertently grant

licenses to our patents with a broader scope than intended, or

they may otherwise make the licensing and enforcement of our

patents more difficult.

To renew existing license agreements and conclude new

license agreements with potential licensees, we may and have

engaged in legal actions to enforce our intellectual property

rights against unlawful infringement, the outcomes of which

are uncertain.

Although the majority of our license agreements are concluded

amicably, and while we strive to reach negotiated settlements of

any disputes in relation to license agreements with companies

using our intellectual property, sometimes it is necessary to

engage in litigation or arbitration in order to renew existing

license agreements which have expired or to conclude new

license agreements with unlicensed parties. In certain cases, we

have engaged in litigation or arbitration proceedings to enforce

our rights, for instance to enforce our patents or to establish

the terms of a patent license agreement. Due to the nature of

litigation and arbitration proceedings, there can be no

assurances as to the final outcome, timing or costs involved in

such litigation or arbitration proceedings or as to our ability to

renew existing license agreements or conclude new license

agreements with potential licensees on acceptable commercial

terms. Such litigation may also have an adverse effect on

customer relationships.

In other cases, other companies have commenced and may

continue to commence actions against us seeking to challenge

the validity of our intellectual property, including our patents, or

to contest our licensing practices or file competition law

complaints with courts or competition authorities. In the event

that one or more of our patents is challenged, a court may

invalidate the patent or determine that the patent is not

enforceable. The outcome of court proceedings is difficult to

predict and, consequently, our ability to use intellectual

property for revenue generation may from time to time depend

on favorable court rulings. Additionally, if any of our patents is

invalidated, or if the scope of the claims in any patents is limited

by a court decision, we could be prevented from using such

patents as a basis for product differentiation or from licensing

the invalidated or limited portion of our IPR. Even if such a

patent challenge is not successful, the related proceedings

could be expensive and time-consuming, divert the attention of

our management and technical experts from our business and

have an adverse effect on our reputation. Any diminution in the

protection of our IPR could cause us to lose certain benefits of

our R&D investments.

Our products, services and business models depend on

technologies that we have developed as well as technologies

that are licensed to us by certain third parties. As a result,

evaluating the rights related to the technologies we use or

intend to use is increasingly challenging, and we expect to

continue to face claims that we have allegedly infringed third

| 106 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

parties’ IPR. The use of these technologies may also result in

increased licensing costs for us, restrictions on our ability to

use certain technologies in our products and/or costly and

time-consuming litigation.

Our products and services include increasingly complex

technologies that we have developed or that have been licensed

to us by certain third parties. The amount of such proprietary

technologies and the number of parties claiming to own

relevant IPR continue to increase. The holders of patents and

other IPR potentially relevant to these complex technologies

may be unknown to us, may have different business models,

may refuse to grant licenses to their proprietary rights or may

otherwise make it difficult for us to acquire a license on

commercially acceptable terms. If licensing agreements are not

available on commercially acceptable terms, we could be

precluded from making and selling the affected products or

could face increased licensing costs. As new features are added

to our products, we may need to acquire further licenses,

including from new and sometimes unidentified owners of

intellectual property. The lack of availability of licenses for

copyrighted content, delayed negotiations or restrictive IPR

license terms may have a material adverse effect on the cost or

timing of content-related services and products offered by us,

mobile network operators or third-party service providers. The

cumulative costs of obtaining any necessary licenses are

difficult to predict and may be significant.

Additionally, although we endeavor to ensure that we and the

companies collaborating with us possess appropriate IPR or

licenses, we cannot fully avoid the risks of IPR infringement by

suppliers of components, processes and other various layers in

our products, or by companies with which we collaborate.

Similarly, we and our customers may face claims of

infringement in connection with the use of our products. Any

restrictions on our ability to sell our products due to expected

or alleged infringements of third-party IPR and any IPR claims,

regardless of merit, could result in a material loss of profits,

costly litigation, the obligation to pay damages and other

compensation, the diversion of the attention of our key

employees, product shipment delays or the need for us to

develop non-infringing technology or to enter into a licensing

agreement on unfavorable commercial terms.

In line with standard practice in our industry, we generally

indemnify our customers for certain intellectual property-

related infringement claims initiated by third parties relating to

products or services purchased from us. These may include

claims from non-practicing entities having no product or service

business. If such claims are made directly against our

customers, we may in certain cases have limited opportunities

to participate in the process addressing such claims including in

negotiations and in defenses, or to evaluate the outcomes and

resolutions in advance. All IPR indemnifications can result in

significant payment obligations for us that are difficult to

estimate in advance. Moreover, our indemnification

responsibilities typically arise whether or not the IPR assertions

against our customers have merit.

Since all technology standards that we use and rely on, including

mobile communication technologies such as the Universal

Mobile Telecommunications System (UMTS), Long-Term

Evolution (LTE) and 5G, or fixed line communication

technologies, include certain IPR, we cannot avoid risks of facing

claims for infringement of such rights due to our reliance on

such standards. We believe the number of third parties

declaring their patents to be potentially relevant to these

standards is increasing, which may increase the likelihood that

we will be subject to such claims in the future. As the number of

market entrants and the complexity of technologies increase, it

remains likely that we will need to obtain licenses with respect

to existing and new standards from other licensors. While we

believe most of such IPR actually found to be essential to a

particular standard carries an obligation to be licensed on fair,

reasonable and non-discriminatory terms, not all intellectual

property owners agree to apply such terms, nor do all owners

agree on what is fair, reasonable and non-discriminatory. As a

result, we have experienced costly and time-consuming

litigation proceedings against us and our customers or suppliers

over such issues, and we may continue to experience such

litigation in the future.

From time to time, certain existing patent licenses may expire

or otherwise become subject to renegotiation. The inability to

renew or finalize such arrangements or renew licenses with

acceptable commercial terms may result in litigation, which may

be expensive and time-consuming and divert the efforts of our

management and technical experts from our business and, if

decided against us, could result in unfavorable judgments or

restrictions on our ability to sell certain of our products or

require us to pay increased licensing fees, fines or other

penalties and expenses, and/or to enter into costly settlements.

Our patent license agreements may not cover all the future

businesses that we may enter, our existing business may not

necessarily be covered by our patent license agreements if

there are changes in our corporate structure or our subsidiaries,

or our newly acquired businesses may already have patent

license agreements with terms that differ from similar terms in

our patent license agreements. This may result in increased

costs, restrictions in the use of certain technologies or time-

consuming and costly disputes whenever there are changes in

our corporate structure or our subsidiaries, or whenever we

enter into new business areas or acquire new businesses.

We make accruals and provisions to cover our estimated total

direct IPR costs for our allegedly infringing products. Our

estimated total direct IPR costs take into account items such as

payments to licensors, accrued expenses under existing

agreements and provisions for potential liabilities. We believe

our accruals and provisions are at an appropriate level. The

ultimate outcome, however, may differ from the provided level,

which could have an adverse impact on us.

Risks stemming from geopolitical, legal,

regulatory and compliance environment

Current international trends show increased enforcement

activity in areas such as national security, competition law,

export control and sanctions, privacy, cybersecurity, climate

change, human rights and anti-corruption. Furthermore, we

have observed an increase in the adoption of surveillance, data

localization, national sourcing and national hiring requirements,

regulations and policies, as well as regulators’ increased interest

in regulatory reform and reorganization and their growing

appetite for tackling topics such as non-personal data, artificial

intelligence, open access and net neutrality.

We conduct our business globally, being subject to direct and

indirect regulation and exposed to geopolitical and regulatory

risks, such as complex regulatory frameworks, unfavorable or

unpredictable treatment in relation to trade sanctions, tariffs,

tax matters and export controls (such as the changes in the

U.S. and multilateral trade policies, including the export and

import controls and laws, particularly with regard to China,

Mexico, Canada and the EU), exchange controls and other

restrictions. We are also exposed to geopolitical conflicts and

military actions, labor unrest, civil unrest, and public security

and safety threats. These all could have a material adverse

effect on us and our supply chain and our ability to sell or

| 107 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

supply products and services, including network infrastructure

equipment and components manufactured in such countries.

We have witnessed political unrest and open conflicts in the

past in various markets in which we conduct business or in which

we have operations, which have adversely affected our sales,

profitability or operations in these markets, including the safety

and security of our employees, and also in certain cases

affected us outside these countries or regions. Any recurrence

or escalation of such unrest could have a further material

adverse effect on our people, sales or results of operations. For

instance, an expansion of the current tensions in the Middle

East with open conflict in the region or any further deterioration

of the security situation in countries in the Sahel and West

Africa, could impact our business on multiple levels such as

market access over supply chain, general economic

developments, security and safety of our operations in

concerned countries, potential sanctions or boycotts, and

reputational impacts. Escalating tensions in Venezuela, East Asia

and territorial disputes by the South China Sea could lead to

various risks, including short- or long-term supply chain

disruptions from Taiwan. Should we decide to exit or otherwise

alter our presence in a particular market, this may have an

adverse effect on us through, for example, disruption to our

operations in the event we need to relocate significant parts of

our operations, triggered investigations, tax audits by

authorities, claims by contracting parties or reputational

damage.

At Nokia, we make our sales in a transparent, regulated and

compliant manner and in accordance with applicable laws and

regulations. Notwithstanding our compliance measures, there

exists a risk that the equipment we sell may subsequently be

misused, relocated or resold without our knowledge or consent.

The results and costs of investigations or claims against our

international operations may be difficult to predict and could

lead to lengthy disputes, fines or fees, indemnities or costly

settlements.

The regulatory, trade controls and sanctions legal environment

can be difficult to navigate for companies with global

operations, impacting ability to grow or maintain business in

specific markets or enter new markets. As a global operator,

Nokia conducts business subject to export controls regulations

and in countries subject to various sanctions and our business

may be impacted by new, existing or tightened export control

regulations, sanctions, embargoes or other forms of economic

and trade restrictions imposed on certain countries, regions and

entities. Although we strive to conduct all operations of Nokia,

and in particular any operations undertaken in countries

targeted by sanctions, in accordance with our compliance

program, we cannot ensure that breaches will not occur.

Export controls, tariffs or other fees or levies imposed on our

products and environmental, health, product safety, data

protection and security, consumer protection, money

laundering and other regulations that adversely affect the

export, import, technical design, pricing or costs of our

products could adversely affect our sales and results of

operations. Further, we rely on multilateral trade regimes to

help ensure a balanced playing field. Conflicts between

countries and geopolitical tensions may lead to implementation

of multiple and possibly conflicting unilateral measures or

uncertainties impacting trade of products and services and

which may also affect our customers’ ability or willingness to

invest in capital expenditures and increase our costs or have

adverse impacts on our operations and supply chain. For

instance, we use products, components and sub-assemblies

that are sourced from China, Mexico and Canada and are

therefore subject to risks associated with international trade

conflicts including between the U.S. and such countries,

particularly with respect to export and import controls and laws,

such as additional tariffs on foreign products implemented by

the U.S. government. Increasing tariffs could impact raw

material prices, the cost of component parts and

transportation. Any of the foregoing could have an adverse

effect on our business, prospects, financial condition and

results of operations.

We have a significant presence in emerging markets in which the

political, economic, legal and regulatory systems are less

predictable than in countries with more developed institutions.

These markets represent a significant portion of our total sales,

and a significant portion of expected future industry growth.

Most of our suppliers are located in, and our products are

manufactured and assembled in, emerging markets, particularly

in Asia. Our business and investments in these markets may be

subject to risks and uncertainties, including unfavorable or

unpredictable treatment in relation to tax matters, exchange

controls, restrictions affecting our ability to make cross-border

transfers of funds, regulatory proceedings, unsound or

unethical business practices, challenges in protecting our IPR,

information security, nationalization, inflation, currency

fluctuations or the absence of or unexpected changes in

regulation, as well as other unforeseeable operational risks.

Our business and results of operations may be adversely

affected by regulation favoring the local industry participants,

as well as other measures with potentially protectionist

objectives or outcomes that host governments in various

countries may take, including the introduction of local technical

standards that divert from the globally adopted standards.

Governments and regulators, particularly after changes in

political regimes, may make legal and regulatory changes, slow

down or reverse the adoption of favorable policy measures, or

interpret and apply existing laws in ways that make our products

and services less appealing to customers or require us to incur

substantial costs, change our business practices or prevent us

from offering our products and services. In particular, there is a

growing trend in many countries to require minimum local

content in products and/or services, and we may be required to

invest in certain movement of operations or joint ventures to

retain market share. Restrictive government policies or actions

or limitations on visas or work permits for certain foreign

workers, may make it difficult for us to move our employees

into and out of these jurisdictions. Our operations as well as

employee recruitment and retention depend on our ability to

obtain the necessary visas and work permits for our employees

to travel and work in the jurisdictions in which we operate. The

impact of changes in or uncertainties related to general

regulation and trade policies could adversely affect our business

and results of operations even in cases where the regulations do

not directly apply to us or our products and services.

Changes in various existing regulations or in their application

and emerging new regulation in areas such as security, privacy,

artificial intelligence, digital economy and sustainability,

including rolling back, variation and divergence of certain

legislative acts, impacting current or new technologies, products

or telecommunications and technology sectors in general, may

adversely affect our operations and business results.

We develop our products based on existing regulations and

technical standards. In the case of new technology, we must

often rely on our predictions for and interpretation of

unfinished technical standards and upcoming or draft

regulations or, in certain cases, have products developed in the

absence of applicable regulations and standards. Fragmentation

of rules, lengthy legislative processes and unpredictability of

regulatory changes present a particular challenge. Due in part to

| 108 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

this fragmentation, we face a risk in the inability to meet

regulatory or market expectations, such as on security and

privacy in our products and services, and perceived or actual

breaches of our information systems or customer information

systems if fault is attributable to Nokia. The regulatory

simplification effort launched in 2025 by the European

Commission in the field of sustainability and the digital

economy could fail to find the right balance between political

ambitions and practical considerations, which might negatively

affect Nokia due to volatility, lack of harmonization and

conflicting regulatory requirements. From a spectrum policy

perspective, unrealistic spectrum pricing, failure to enable

access to additional spectrum in various bands and/or failure to

achieve frequency band harmonization could also adversely

impact Nokia’s customers and Nokia itself.

New developments and changes in applicable non-personal data

and privacy-related regulatory frameworks, such as the EU

General Data Protection Regulation (GDPR), the EU Data Act and

the recent adoption of EU AI Act, and similar regulations in other

jurisdictions could have a significant impact on our business.

This includes possible changes that increase operational costs,

limit or restrict possibilities to offer products or services, or

reduce or could be seen to reduce the data protection aspects

of our offerings. For instance, data use rights and restrictions

are increasingly country and customer specific requiring

bespoke operational support and creating a risk of contractual

or regulatory non-compliance. Due to geopolitical tensions,

more customers are requiring extensive information about

supply chain personnel for background checks, creating a risk of

privacy law breach. Also, countries could require governmental

interception capabilities or issue regulations aimed at allowing

direct government access to data for the products and services

we offer diminishing our privacy assurances and potentially

limiting our ability to use components, products or software

that we have developed or sourced from other companies. We

may also be adversely affected if we decide to reduce our sales

to such markets.

Our current business models and operations rely on certain

centralized data processing solutions and cloud or remote

delivery-based services for distribution of services and software

or data storage, which have certain inherent risks, including

those stemming from applicable regulatory regimes, including

data protection or data localization, that may cause limitations

in implementing such business models or conducting business.

An increase in the protectionist stances of governments around

the world, which impact the free flow of data across borders,

has already affected and may further affect our global service

delivery model. Furthermore, we observe that enforcement

actions and investigations by regulatory authorities related to

data security incidents and privacy violations continue to

increase. Unauthorized disclosure, transfer or loss of sensitive

or confidential data, whether through systems failure, employee

negligence, fraud or misappropriation, by us, our vendors or

other parties with whom we do business (if they fail to meet the

standards we impose) could subject us to significant litigation,

monetary damages, regulatory enforcement actions, fines and

criminal prosecution in one or more jurisdictions. In addition,

our involvement in defense related projects results in the

applicability of defense industry regulations.

In addition to the existing data protection regulations, we

recognize the increasing importance of security regulations that

impact various aspects of our operations. These regulations are

not limited to data protection but also encompass network

security, product compliance, and associated costs. Current and

future regulatory moves in various jurisdictions highlight the need

for compliance with security standards that affect our product

lines and operational decisions. These regulations may lead to

increased costs and complexities due to the lack of harmonization

across different jurisdictions. While these regulations may not

directly impact us at present, they have indirect effects on our

business operations and strategic planning.

Artificial intelligence has the potential to revolutionize our

operations by providing valuable tools that augment our

capabilities and enable the delivery of higher-performing

products and services. By leveraging AI, we can efficiently and

reliably process large volumes of data, automate tasks that are

too complex or time-consuming to perform manually, and

unlock new insights that inform our decision making. While AI

adoption offers numerous benefits, it also presents several

risks and challenges. One of the main risks is the potential for

non-responsible use of AI, which could lead to non-compliance

with relevant regulations, such as the new EU AI Act, loss of

sensitive data or intellectual property, or inadvertent

infringement of third-party rights. Additionally, careless use of

AI or poor governance of underlying data can lead to accidental

use of personal or sensitive data, misuse of proprietary or

confidential inputs, errors in work product and create new

vulnerabilities in our systems, which could be exploited by

malicious actors, leading to data breaches or other security

incidents. Another risk associated with AI is the potential for

bias in AI decision making. AI systems can perpetuate existing

biases and discriminatory practices, which could lead to unfair

treatment of customers or employees. Furthermore, the

regulatory landscape around artificial intelligence is evolving

and there is a risk that regulation outside the EU may be less

robust and more permissive, which could reduce our innovative

agility and competitiveness. Governments that are seeking

national control of AI and digital systems are causing

fragmented operations and reducing global scale.

Despite the perceived simplification and de-prioritization of

sustainability by the EU and the U.S. governing authorities, we

are still seeing an increase in climate and other sustainability-

related regulations and customer requirements globally and an

increase in related litigation by affected stakeholders. Even with

simplification of regulatory requirements, expectations for

Nokia as a large multinational remain high and are increasingly

tied to financing and operating permissions. For instance, In the

EU the December 2025 Omnibus deal simplifies the Corporate

Sustainability Reporting Directive and the Corporate

Sustainability Due Diligence Directive by raising applicability

thresholds but does not remove obligations for large companies

like Nokia maintaining the due diligence expectations across

global value chains.

The adoption of the ISSB issued sustainability reporting

standards by a large number of jurisdictions around the world is

resulting in a patchwork of different national reporting

requirements in several jurisdictions relevant to Nokia. The

regulatory environment around sustainability remains highly

volatile and the uncertainty is only increasing given the divergent

views of the U.S. (including between the states inside the U.S.)

and the EU. Irrespective of that, Nokia is required to fulfill its

legal obligations in the countries where it does business, with

sustainability reporting being still a major compliance focus.

Changes to existing regulation related to sustainable finance,

such as the EU Taxonomy Regulation and its delegated acts, the

California Corporate Data Accountability Act, the Climate Related

Financial Risk Act and the Australian mandatory climate risk

reporting laws will lead to increased reporting obligations,

controls and documentation requirements.

| 109 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

We operate in many jurisdictions around the world, and we are

subject to various legal frameworks addressing corruption,

fraud, competition, privacy, security, trade policies,

environment, human rights, supply chains and other risk areas.

At any given time, we may be subject to inspections,

investigations, claims, and government proceedings, and the

extent and outcome of such proceedings may be difficult to

estimate with any certainty. We may be subject to material fines,

penalties and other sanctions as a result of such investigations.

Bribery and anti-corruption laws in effect in many countries

prohibit companies and their intermediaries from making

improper payments to public officials or private individuals for

the purpose of obtaining new business, maintaining existing

business relationships or gaining any business advantage.

Certain anti-corruption laws such as the United States Foreign

Corrupt Practices Act (FCPA) also require the maintenance of

proper books and records, and the implementation of controls

and procedures in order to ensure that a company’s operations

do not involve corrupt payments. Since we operate throughout

the world and given that some of our customers are

government-owned entities and that our projects and

agreements often require approvals from public officials, there

is a risk that our employees, suppliers or commercial third-party

representatives may take actions that are in violation of our

compliance policies and of applicable anti-corruption laws.

In many parts of the world where we operate, local practices and

customs may be inconsistent with our policies, including the Nokia

Code of Conduct, and could violate anti-corruption laws, including

the FCPA and the UK Bribery Act 2010, and applicable European

Union regulations, as well as applicable economic sanctions,

embargoes and applicable competition and privacy laws. Our

employees, or other parties acting on our behalf, could violate

policies and procedures intended to promote compliance with

anti-corruption laws, economic sanctions, competition or privacy

laws or other applicable regulations. Violations of these laws by

our employees or other parties acting on our behalf, regardless

of whether we had participated in such acts or had knowledge of

such acts, could result in us or our employees becoming subject to

criminal or civil enforcement actions, including fines or penalties,

disgorgement of profits and suspension or disqualification of

sales. Additionally, violations of law or allegations of violations,

such as against human rights, may result in reputational harm and

loss of business and adversely affect our brand and reputation.

Detecting, investigating and resolving such situations may also

result in significant costs, including the need to engage external

advisers, and consume significant time, attention and resources

from our management and other key employees. The results and

costs of such investigations or claims may be difficult to predict

and could lead to, for instance, lengthy disputes, fines, fees or

indemnities, costly settlement or the deterioration of the Nokia

brand. Furthermore, even without allegations of misconduct

against us, our employees or other parties acting on our behalf,

we may face loss of business as a result of improper conduct or

alleged improper conduct by our competitors.

As part of mergers and acquisitions, we may be subject to

claims, fines, investigations or assessments for conduct that we

failed to or were unable to discover or identify in the course of

performing our due diligence, including unknown or unasserted

liabilities and issues relating to fraud, trade compliance, non-

compliance with applicable laws and regulations, improper

accounting policies or other improper activities.

We are subject to litigation proceedings, which may be

disruptive and expensive. In addition, an unfavorable outcome

of litigation, arbitration, agreement-related disputes or

product liability-related allegations against our business could

have a material adverse effect on us.

We are a party to lawsuits, arbitration proceedings, agreement-

related disputes and product liability-related allegations in the

normal course of our business. Litigation, arbitration or

agreement-related disputes can be expensive, lengthy and

disruptive to normal business operations and divert the efforts

of our management. Moreover, the outcomes of complex legal

proceedings or agreement-related disputes are difficult to

predict. An unfavorable resolution of a particular lawsuit,

arbitration proceeding or agreement-related dispute could have

a material adverse effect on us.

Although our products are designed to meet all relevant safety

standards and other recommendations and regulatory

requirements globally, we cannot guarantee we will not become

subject to product liability claims or be held liable for such

claims, which could have a material adverse effect on us. Even a

perceived risk of adverse health effects connected to our

products could have a material adverse effect on us, for

instance, through a reduction in the demand for mobile networks

or increased difficulty in obtaining sites for base stations.

We record provisions for pending claims when we determine

that an unfavorable outcome is likely and the loss can

reasonably be estimated. Although we believe our provisions for

pending claims are appropriate, due to the inherent uncertain

nature of legal proceedings, the ultimate outcome or actual

cost of settlement may materially differ from estimates.

For a more detailed discussion of litigation to which we are a

party, refer to Note 6.1. Commitments, contingencies and legal

proceedings, in our consolidated financial statements.

Our governance, internal controls and compliance processes

could fail to detect errors or wrongdoings and to prevent

regulatory penalties at corporate level, in operating

subsidiaries and joint ventures.

Nokia is a publicly listed company and, as such, subject to various

securities, reporting and accounting rules and regulations. For

instance, we must monitor and assess our internal control over

financial and sustainability reporting and the compliance of those

with the applicable rules and regulations. Furthermore, the maturity

of our internal control over sustainability reporting is still to reach

the maturity level of internal control over financial reporting. A

failure of our corporate functions, our business groups, our

operating subsidiaries or our joint ventures to maintain effective

internal control over financial and sustainability reporting, or to

comply with the applicable securities, reporting and accounting

rules and regulations, could adversely affect the accuracy and

timeliness of our financial reporting, which could result, for instance,

in loss of confidence in us or in the accuracy and completeness

of our financial reports and the Sustainability Statement, or

otherwise in the imposition of fines or other regulatory

measures, which could have a material adverse effect on us.

Integrity and high ethical standards are an essential part of our

culture. However, despite our Group-wide compliance measures,

including ethical business trainings and other actions (including

towards our suppliers and other parties with which we conduct

business), we may not be able to prevent breaches of law or

governance standards within our business, subsidiaries, joint

ventures or in our supply chain. If we fail to or are unable to comply

with applicable law and regulations, we could experience penalties

and adverse rulings in enforcement and other proceedings.

We are involved in joint ventures and other affiliated companies

with their own governance and system infrastructure and are

exposed to risks inherent to companies under joint

management or not having direct management control.

We have a number of joint ventures, including those where Nokia is

the minority partner, and other affiliated companies with their own

| 110 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

governance and system infrastructure where Nokia does not have

direct management control. The agreements related to our joint

ventures may require unanimous consent or the affirmative vote of

a qualified majority of the shareholders to take certain actions,

thereby possibly slowing down the decision-making process or

impairing our ability to implement our key policies and practices,

such as our compliance processes and culture, in a comprehensive

or timely manner. In addition, joint venture companies and other

affiliated companies having their own governance and system

infrastructure, such as our local service companies focusing on

networks field services, involve inherent risks such as those

associated with a complex corporate governance structure, lack of

transparency or uniform controls and procedures and consequent

risks of compliance breaches or other similar issues, or issues in

dissolving such entities or divesting their shareholdings, assets and

liabilities, and may also involve negative public perceptions caused

by the joint venture partner that are adverse to us.

Financial and tax-related uncertainties

We have operations in many countries with different tax laws

and rules, which may result in complex tax issues and disputes.

Taxation or other fees collected by governments or

governmental agencies may result in unexpected payment

obligations, and in response to prevailing difficult economic

conditions in the public sector, coupled with already enacted

and proposed fundamental changes in international tax

regulations, there may be an increased aggressiveness in

collecting such fees or taxes. We may be obliged to pay

additional taxes for past periods as a result of changes in law, or

changes of tax authority practice or interpretation (possibly

with retroactive effect in certain cases), or inaccurate

interpretations of tax laws by us resulting potentially in a

material adverse effect on our cash flow and financial position.

In particular, potential changes in reallocation of taxing rights

and other fundamental international tax principles, the OECD

Pillar project and digital business-related initiatives, our wide

geographical footprint of operations and activities and changes

in tax laws or global laws regarding transfer pricing could

adversely impact our business, operating results and overall tax

burden. There may also be unforeseen tax expenses that turn

out to have an unfavorable impact on us, adverse tax

consequences related to past acquisitions and divestments, and

potential tax liabilities that we are currently not aware of. As a

result, and given the inherently unpredictable nature of

taxation, our tax rate may change from its current level and our

cash flows regarding taxes may not be stable.

As a company with global operations, we are subject to tax

investigations in various jurisdictions, and such proceedings can

be lengthy, involve actions that can hinder local operations and

affect unrelated parts of our business, and the outcome of such

proceedings is difficult to predict. While we have made

provisions for certain tax issues, the provisions we have made

may not be adequate to cover such increases.

In the context of our sale of the Devices & Services business to

Microsoft, we are required to indemnify Microsoft for certain

tax liabilities, including (i) tax liabilities of the Nokia entities

acquired by Microsoft in connection with the closing of the sale

of the Devices & Services business; (ii) tax liabilities associated

with the assets acquired by Microsoft and attributable to tax

periods ending on or prior to the closing date of the sale of the

Devices & Services business; and (iii) tax liabilities relating to the

pre-closing portion of any taxable period that includes the

closing date of the sale of the Devices & Services business.

Our actual or anticipated performance, among other factors,

could reduce our ability to utilize our tax attributes and

deferred tax assets.

Deferred tax assets recognized on tax losses, unused tax

credits and tax-deductible temporary differences are

dependent on our ability to offset such items against future

taxable income within the relevant tax jurisdiction. Such

deferred tax assets are also based on our assumptions on

future taxable earnings, and these may not be realized as

expected which may cause the deferred tax assets to be

materially reduced. Any such reduction could have a material

effect on us. As an example, Nokia derecognized EUR 2.9 billion

deferred tax assets related to Finland in 2020 and

re-recognized EUR 2.5 billion of deferred tax assets related to

Finland in 2022. Additionally, our earnings have been

unfavorably affected in the past, and may continue to be in the

future, in the event that no tax benefits are recognized for

certain deferred tax items.

We may not have access to sources of funding on favorable

terms, or at all.

In periods when the capital and credit markets experience

significant volatility, the amounts, sources and cost of capital

available to us may be adversely affected. Deteriorating

economic conditions or financial uncertainty in any of the

markets in which we sell our products could reduce business

confidence and adversely impact spending patterns, and thereby

could adversely affect the amounts, sources and cost of capital

available to us. Our business requires a significant amount of

cash as we continue to invest in our R&D and other future

capabilities. We rely on multiple sources of funding for short-

term and long-term capital and aim to minimize the liquidity risk

by maintaining a sufficient cash position and having committed

credit lines in place. However, if economic conditions deteriorate

or the credit market tightens, there can be no assurances that

we will be able to generate sufficient amounts of capital or to

maintain an efficient capital structure from time to time.

We also may not be able to have access to additional sources of

funds that we may need from time to time with reasonable

terms, or at all. If we cannot access capital or sell receivables on

a commercially viable basis, our business, financial condition

and cash flow could materially suffer.

We may not be able to maintain our investment grade credit

ratings

Credit rating agencies, such as Moody’s, S&P Global Ratings and

Fitch have assigned credit ratings to us. Our goal is to maintain

our investment grade credit ratings. However, there can be no

assurances that we will be able to maintain our current

investment grade credit ratings.

In the event our credit rating is downgraded, it could have a

material adverse effect, for instance, on our cost of funds and

related margins, our business and results of operations,

financial condition, liquidity, or access to capital markets.

Due to our global operations, our net sales, costs and results

of operations, as well as the US dollar value of our dividends

and market price of our ADSs, are affected by exchange

rate fluctuations.

We operate globally and are therefore exposed to foreign exchange

risks in the form of both transaction risks and translation risks. Our

policy is to monitor and hedge foreign exchange rate exposures

within defined exposure identification horizons. We manage our

operations to mitigate, but not to eliminate, the impacts of

exchange rate fluctuations and our hedging activities may prove

unsuccessful in mitigating the potentially negative impact of

exchange rate fluctuations. Additionally, significant volatility in the

relevant exchange rates and interest rates may increase our

hedging costs, as well as limit our ability to hedge our exchange rate

exposures including, in particular certain emerging market

| 111 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

currencies. Furthermore, exchange rate fluctuations may have an

adverse effect on our net sales, costs and results of operations, as

well as our competitive position, through their impact on our

customers, suppliers and competitors.

We also experience other financial market-related risks,

including changes in interest rates and in prices of marketable

securities that we own. We may use derivative financial

instruments to reduce certain of these risks. If our strategies to

reduce such risks are not successful, our financial condition and

results of operations may be harmed.

Additionally, exchange rate fluctuations may materially affect

the US dollar value of any dividends or other distributions that

are paid in euro, as well as the market price of our ADSs.

Our pension and other post-employment benefit obligations

are subject to numerous factors that could result in a need for

increased funding, adversely affecting our results of

operations and cash flow.

We are exposed to various employee cost-related risks,

including those related to pension, and other post-employment

benefits (OPEB). In the US, we maintain significant employee

pension benefit plans and a significant retiree welfare benefit

plan (providing post-employment healthcare benefits and post-

employment life insurance coverage). Outside the US, we

contribute to pension schemes for large numbers of current

and former employees. The US and non-US plans and schemes

have funding requirements that depend on, among other things,

various legal requirements, how assets set aside to pay for

those obligations are invested, the performance of financial

markets, interest rates, assumptions regarding the life

expectancy of covered employees and retirees, and medical

cost inflation and medical care utilization. To the extent that

any of those variables change, the funding required for those

plans and schemes may increase, adversely affecting our results

of operations and cash flow.

The most significantly underfunded plans are in Germany which

do not currently have minimum regulatory funding

requirements. With respect to other significantly underfunded

plans, there are the OPEB plans in the US where Nokia is able to

fund the liabilities by utilizing IRC Section 420 transfers from

the US pension surplus up until 2032. More details about these

plans can be found in Note 3.4. Pensions and other post-

employment benefits in our consolidated financial statements.

The carrying amount of our goodwill may not be recoverable.

We assess the carrying amount of goodwill annually, or more

frequently if events or changes in circumstances indicate that such

carrying amount may not be recoverable. We assess the carrying

amount of other identifiable assets if events or changes in

circumstances indicate that their carrying amounts may not be

recoverable, for instance, if we would not generate revenues from

our businesses as anticipated, or if our businesses would not

generate sufficient positive operating cash flows. These, or other

factors, may lead to a decrease in the value of our assets, including

intangible assets and the goodwill attributed to our businesses,

resulting in impairment charges that may adversely affect our net

profit for the year. While we believe the estimated recoverable

values are reasonable, actual performance in the short- and long-

term and our assumptions on which we base our calculations could

materially differ from our forecasts, which could impact future

estimates of our businesses’ recoverable values, and may result

in impairment charges.

Risks associated with ownership of our shares

The amount of dividend and/or repayment of capital and other

profit distributions such as share buybacks to shareholders for

each financial period is uncertain.

As announced on 29 January 2026, our Board proposes that the

Annual General Meeting 2026 authorizes the Board to resolve

on the distribution of an aggregate maximum of EUR 0.14 per

share as dividend from the retained earnings and/or as assets

from the reserve for invested unrestricted equity in respect of

financial year 2025.

Our Annual General Meeting 2025, held on 29 April 2025,

authorized the Board to resolve on the distribution of an

aggregate maximum of EUR 0.14 per share as dividend from the

retained earnings and/or as assets from the reserve for invested

unrestricted equity in respect of the financial year 2024.

Furthermore, in November 2024, the Board initiated a share

buyback program under the authorization granted by the Annual

General Meeting 2024 to offset the dilutive effect of the Infinera

acquisition. The program targeted to repurchase 150 million shares

for an aggregate purchase price not exceeding EUR 900 million. The

repurchases commenced in November 2024 and the program was

completed in April 2025 reducing the company’s unrestricted

equity by approximately EUR 703 million.

We cannot assure that we will distribute dividends and/or capital

repayments on the shares issued by us, nor is there any

assurance as to the amount of any dividend and/or repayment

of capital we may pay, including but not limited to situations

where we make commitments to increase our dividends. Neither

can we guarantee that we finalize the announced share buyback

program. The payment and the amount of any dividend and/or

repayment of capital as well as additional share buyback

programs is subject to the discretion of the general meeting of

our shareholders and our Board, and will depend on available

cash balances, expected cash flow generation, anticipated cash

needs, retained earnings, the results of our operations and our

financial condition and terms of outstanding indebtedness, as

well as other relevant factors such as restrictions, prohibitions

or limitations imposed by applicable laws. Further, even if any

conditions or factors covering the issuance or distribution of

dividends are met, the Board or the shareholders have in the

past decided, and may going forward decide, not to issue or

distribute dividends or initiate additional buyback programs.

Our share and/or ADS price may be volatile and subject to

fluctuations.

Our share and/or ADS price may be volatile and could be subject to

fluctuations in response to various factors, some of which are

beyond our control. In addition to the factors described in this “Risk

Factors” section, other factors that could cause fluctuations in our

share price include, among others, high volatility in the securities

markets generally and volatility in telecommunications and

technology companies’ securities in particular, trading volumes,

speculation in the media or retail or institutional investment

communities regarding the Company and our prospects, future

developments in our industry and competitors, our financial results

and the expectations of financial analysts, as well as the timing or

content of any public communications, including reports of

operating results, by us or our competitors. Further, factors in the

public trading market for our stock may produce price movements

that may or may not comport with macro, industry or company-

specific fundamentals, including, without limitation, the sentiment

of retail investors (including as may be expressed on financial

trading and other social media sites and online forums), the direct

access by retail investors to broadly available trading platforms, the

amount and status of short interest in our securities, access to

margin debt, trading in options and other derivatives on our

common stock and any related hedging and other trading factors.

| 112 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

The capital markets have experienced extreme volatility that

has often been unrelated to the operating performance of

particular companies. In addition, in the past, following periods

of volatility in the market price of a company’s securities,

stockholders often institute securities class action litigation

against that company. This type of litigation could result in

substantial costs and divert our management’s attention and

resources, which could have a material adverse effect on our

cash flows, our ability to execute our business strategy and our

ability to make distributions to our stockholders.

Requirement for non-Finnish shareholders to provide detailed

information to obtain advantageous withholding tax treatment

for dividends.

As described in more detail under “General facts on Nokia–

Taxation”, non-Finnish shareholders are required to provide

certain information in order to benefit from the reduced

dividend withholding tax rates set out in the applicable tax

treaties. Furthermore, custodians are required to fulfill certain

strict requirements, take over certain responsibilities and

assume liability for incorrectly applied withholding tax, or a

higher withholding tax rate will apply. Such requirements will

likely impose an additional administrative burden on

shareholders or result in the higher withholding rate becoming

applicable for non-Finnish shareholders.

| 113 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors •Significant subsequent events General facts on Nokia Financial statements Other information | | --- |

Significant subsequent events

Nokia to operate with two primary operating segments

Nokia announced on 19 November 2025, together with its new

strategy, that it will reorganize its business into two primary

operating segments to better align to customer needs and

accelerate innovation as the AI supercycle increases demand for

advanced connectivity. This reorganization took effect as of 1

January 2026.

The reorganization recognizes Network Infrastructure as a

growth segment, positioned to capitalize on the rapid, global AI

and data center build-out while continuing to innovate for its

telecommunications customer base. The segment consists of

three business units Optical Networks, IP Networks and Fixed

Networks and is led by David Heard.

The new Mobile Infrastructure segment brings together Nokia’s

Core Networks portfolio, Radio Networks portfolio and

Technology Standards (formerly Nokia Technologies). It is

positioned for core and radio network technology and services

leadership to lead the industry to AI-native networks and 6G.

The new segment brings together a portfolio whose value

creation is founded on mobile communication technologies

based on 3GPP standards with a strong cash flow position

underpinned by IP licensing. It is led by Justin Hotard on an

interim basis and consists of three business units Core

Software, Radio Networks and Technology Standards.

In addition, as part of its strategy work, Nokia identified several

units which are not seen as core to the future of the company’s

strategy. These units were moved into a dedicated operating

segment called Portfolio Businesses while the company

assesses the best value creating opportunity for them. The

units moved were:

▪Fixed Wireless Access CPE (previously in Fixed Networks in

Network Infrastructure)

▪Site Implementation and Outside Plant (previously in Fixed

Networks in Network Infrastructure)

▪Enterprise Campus Edge (previously in Cloud and Network

Services)

▪Microwave Radio (previously in Mobile Networks)

114	Nokia Annual Report on Form 20-F 2025

General facts

on Nokia

American Depositary Shares	115
Controls and procedures	115
Government regulation	116
Sales in United States-sanctioned countries	116
Taxation	117
Key ratios	120
Alternative performance measures	121

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American Depositary Shares

Fees and charges

ADS holders may have to pay the following service fees to the

Depositary:

Service	Fees, USD
Issuance of ADSs	Up to 5 cents per ADS(1)
Cancellation of ADSs	Up to 5 cents per ADS(1)
Distribution of cash dividends or other<br><br>cash distributions	Up to 2 cents per ADS
Distribution of ADSs pursuant to (i) stock<br><br>dividends, free stock distributions or<br><br>(ii) exercises of rights to purchase<br><br>additional ADSs	Up to 5 cents per ADS
Distribution of securities other than ADSs<br><br>or rights to purchase additional ADSs	Up to 5 cents per ADS(1)
ADS transfer fee	1.50 cents per transfer(1)

(1)These fees are typically paid to the Depositary by the brokers on behalf of their

clients receiving the newly issued ADSs from the Depositary and by the brokers on

behalf of their clients delivering the ADSs to the Depositary for cancellation. The

brokers in turn charge these transaction fees to their clients.

Additionally, ADS holders are responsible for certain fees and

expenses incurred by the Depositary on their behalf and certain

governmental charges such as taxes and registration fees,

transmission and delivery expenses, conversion of foreign

currency and fees relating to compliance with exchange control

regulations. The fees and charges may vary over time.

In the event of refusal to pay the depositary fees, the

Depositary may, under the terms of the deposit agreement,

refuse the requested service until payment is received or may

set off the amount of the depositary fees from any distribution

to be made to the ADS holder.

Payments

In 2025, our Depositary made the following payments on our

behalf in relation to our ADS program:

Category	Payment, USD
Settlement infrastructure fees (including<br><br>the Depositary Trust Company fees)	1 091 650.64
Proxy process expenses (including<br><br>printing, postage and distribution)	1 411 882.51
Legal fees	159 427.50
NYSE listing fees	500 000.00
Investor relations expenses	569 933.72
Total	3 732 894.37

Additionally for 2025, our Depositary reimbursed us

USD 11 500 000 mainly related to contributions towards our

investor relations activities, including investor meetings and

conferences and fees of investor relations service vendors, and

other miscellaneous expenses related to the listing of our ADSs

in the United States.

Controls and procedures

Our management, with the participation of our President and

CEO and our Chief Financial Officer, conducted an evaluation

pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities

Exchange Act of 1934, as amended (the Exchange Act), of the

effectiveness of our disclosure controls and procedures at 31

December 2025. Based on such evaluation, our President and

CEO and our Chief Financial Officer have concluded that our

disclosure controls and procedures were effective.

Disclosure controls and procedures mean controls and other

procedures that are designed to ensure that information

required to be disclosed by us in the reports that we file or

submit under the Exchange Act is recorded, processed,

summarized and reported, within the time periods specified in

the Commission’s rules and forms, and that such information

required to be disclosed by us in the reports that we file or

submit under the Exchange Act is accumulated and

communicated to our management, including our President and

CEO and our Chief Financial Officer, or persons performing

similar functions, as appropriate to allow timely decisions

regarding required disclosures.

Management’s annual report on internal control

over financial reporting

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting

for Nokia. Our internal control over financial reporting is

designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation and fair

presentation of published financial statements. Because of its

inherent limitations, internal control over financial reporting

may not prevent or detect misstatements. Also, projections of

any evaluation of effectiveness to future periods are subject to

the risk that controls may become inadequate because of

changes in conditions, or that the degree of compliance with the

policies or procedures may deteriorate.

Our management evaluated the effectiveness of our internal

control over financial reporting using the criteria described in

Internal Control – Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway

Commission (COSO). Based on this evaluation, our management

has assessed the effectiveness of Nokia’s internal control over

financial reporting at 31 December 2025 and concluded that

such internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting

at 31 December 2025 has been audited by Deloitte Oy, an

independent registered public accounting firm. Refer to section

“Reports of independent registered public accounting firm”.

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Changes in internal control over financial

reporting

There have been no changes in our internal control over

financial reporting during 2025 that have materially affected, or

are reasonably likely to materially affect, our internal control

over financial reporting.

Attestation report of the registered public

accounting firm

Refer to section ‘Reports of independent registered public

accounting firm’.

Exchange controls

There are currently no Finnish laws that may affect the import

or export of capital, or the remittance of dividends, interest or

other payments.

Government regulation

Nokia and its businesses are subject to direct and indirect

regulation in each of the countries in which we and our customers

do business. As a result, changes in or uncertainties related to

various types of regulations applicable to current or new

technologies, intellectual property, products, services, company

operations and business environment (e.g., labor laws, taxation)

could affect our business adversely. Moreover, the implementation

of technological or legal requirements could impact our products

and services, technology and patent licensing activities,

manufacturing and distribution processes, and could affect the

timing of product and services introductions and the cost of our

production, products and services, as well as their commercial

success. Also, our business is subject to the impacts of changes in

economic and trade policies. Export control, tariffs or other fees or

levies imposed on our products and services and environmental,

product safety and security and other regulations that adversely

affect the export, import, pricing or costs of our products and

services, as well as export prohibitions (sanctions) enacted by the

EU, the United States or other countries or regions could adversely

affect our net sales and results of operations. Further, potential

governmental intervention in supply chain (e.g., prohibiting imports

from certain geographies or imposing certain criteria on selection

of suppliers) may impact Nokia’s operations.

For example, depending on the geography, our products and

services are subject to a wide range of government regulations that

might have a direct impact on our business, including, but not limited

to, regulation related to product certification, standards, spectrum

management, provision of telecommunications services, privacy and

data protection, competition and sustainability. The EU-level or local

member state regulation has a direct impact on many areas of our

business, markets and customers within the EU. The European

regulation influences, for example, conditions for innovation for

telecommunications infrastructure and internet and related services,

as well as technology and patent licensing, investment in fixed and

wireless broadband communication infrastructure and operation of

global data flows. Additionally, with respect to certain developing

market countries, the business environment we operate in can be

affected by localization requirements.

We proactively exchange views and address the impact of any

planned changes to the regulatory environment on our business

activities with state agencies, regulators and other decision-

makers either through our government relations

representatives in various geographies and through our experts,

or indirectly through memberships in industry associations.

Sales in United States-sanctioned

countries

General

We are a global company and have sales in most countries of the

world. Nokia is committed to the highest standards of ethical

conduct, and adheres to all applicable national and international

trade-related laws. As a leading international telecommunications

company with global operations, Nokia has a presence also in

countries subject to international sanctions. All operations of

Nokia, and in particular any operations undertaken in countries

targeted by sanctions, are conducted in accordance with our

comprehensive and robust internal compliance program to

ensure that they are in full compliance with all applicable laws and

regulations. In addition, we continuously monitor international

developments and assess the appropriateness of our presence

and business in these, and all, markets. Nevertheless, business in

these markets is marked by complexity and uncertainty.

We cannot exclude the possibility that third parties may

unlawfully divert our products to these countries from other

countries in which we sell them, or that, for services distributed

through the internet, third parties could have accessed them in

markets or countries for which they are not intended by

circumventing the industry standard protective mechanisms,

such as IP address blocks, despite our efforts in implementing

measures to prevent such actions.

Disclosure pursuant to Section 219 of the Iran

Threat Reduction and Syria Human Rights Act

of 2012

We operate in Iran in compliance with applicable economic

sanctions and other trade-related laws. We ceased providing

telecommunications equipment and services to any of our

former customers including but not limited to network operator

customers and internet service providers. We never delivered

equipment and services to Iran for military purposes, or for the

purpose of limiting political discourse, blocking legitimate forms

of free speech or conducting surveillance of individuals.

In connection with the activities relating to Iran, we have a local

office in Iran that employed one employee at the end of 2025

through a branch of a Finnish subsidiary. Nokia is the controlling

shareholder in Pishahang Communications Network

Development Company (Pishahang). The other minority

shareholder in Pishahang is Information Technology Application

Development TACFAM Company (Tacfam).

We continue to maintain routine contacts with governmental

agencies in Iran as required, for example, to maintain a legal

presence and office facilities in Iran, pay taxes and employ an

Iranian national.

In 2025, we had no sale activity in Iran.

Although it is difficult to evaluate with any reasonable degree of

certainty, we have concluded that we cannot exclude the

possibility that Tacfam is owned or controlled, directly or

indirectly, by the government of Iran. None of our activities involve

US affiliates of Nokia, or any persons from the United States.

Nokia does not normally allocate net profit on a country-by-

country or activity-by-activity basis, other than as set forth in

Nokia’s consolidated financial statements prepared in

accordance with IFRS. Therefore, for this exercise in the past,

Nokia reflected its sales margin in lieu of the net profit/loss. In

2025, we recognized no sales or sales margin from any customer.

Although we evaluate our business activities on an ongoing

basis, we intend to continue not accepting any new business

in Iran in 2026.

| 117 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries •Taxation Key ratios Alternative performance measures Financial statements Other information | | --- |

Taxation

General

The statements of the United States and Finnish tax laws set

out below are based on the laws in force as of the date of this

report and may be subject to any changes in US or Finnish law,

and in any double taxation convention or treaty between the

United States and Finland, occurring after that date, possibly

with retroactive effect.

For purposes of this discussion, “US Holders” are beneficial

owners of ADSs that: (i) hold the ADSs as capital assets; (ii) are

citizens or residents of the United States, corporations created

in or organized under US law, estates whose income is subject

to US federal income tax, or trusts that elect to be treated as a

US person or are both subject to the primary supervision of a

US court and controlled by a US person; and (iii) in each case,

are considered residents of the United States for purposes of

the current income tax convention between the United States

and Finland, referred to as the “Treaty”, and the limitation on

benefits provisions therein. Special rules apply to US Holders

that are also residents of Finland and to citizens or residents of

the United States that do not maintain a substantial presence,

permanent home or habitual abode in the United States. For

purposes of this discussion, it is assumed that the Depositary

and its custodian will perform all actions as required by the

deposit agreement with the Depositary and other related

agreements between the Depositary and Nokia.

If a partnership holds ADSs (including for this purpose any entity

or arrangement treated as a partnership for US federal income

tax purposes), the tax treatment of a partner will depend upon

the status of the partner and activities of the partnership. If a

US Holder is a partnership or a partner in a partnership that

holds ADSs, the holder is urged to consult its own tax adviser

regarding the specific tax consequences of owning and

disposing of its ADSs.

Because this summary is not exhaustive of all possible tax

considerations – such as situations involving financial

institutions, banks, tax-exempt entities, pension funds, US

expatriates, real estate investment trusts, persons that are

dealers in securities, persons who own (directly, indirectly or by

attribution) 10% or more of the share capital or voting stock of

Nokia, persons who acquired their ADSs pursuant to the

exercise of employee stock options or otherwise as

compensation, or US Holders whose functional currency is not

the US dollar, who may be subject to special rules that are not

discussed herein – holders of shares or ADSs that are US

Holders are advised to satisfy themselves as to the overall US

federal, state and local tax consequences, as well as to the

overall Finnish and other applicable non-US tax consequences,

of their ownership of ADSs and the underlying shares by

consulting their own tax advisers. This summary does not

discuss the treatment of ADSs that are held in connection with a

permanent establishment or fixed base in Finland, and it does

not address the US Medicare tax on certain investment income.

For the purposes of both the Treaty and the US Internal

Revenue Code of 1986, as amended, referred to as the “Code”,

US Holders of ADSs will be treated as the owners of the

underlying shares that are represented by those ADSs.

Accordingly, the following discussion, except where otherwise

expressly noted, applies equally to US Holders of ADSs, on the

one hand, and to shares on the other.

The holders of ADSs will, for Finnish tax purposes, be treated as

the owners of the shares that are represented by the ADSs. The

Finnish tax consequences for the holders of shares, as

discussed below, also apply to the holders of ADSs.

US taxation of cash dividends

For US federal income tax purposes, the gross amount of

dividends paid to US Holders of shares or ADSs out of our current

or accumulated earnings and profits, including any related

Finnish withholding tax, generally will be included in gross income

as foreign source dividend income. We do not expect to maintain

calculations of our earnings and profits under US federal income

tax principles; therefore, US Holders should expect that the

entire amount of any distribution generally will be reported as

dividend income. Dividends will not be eligible for the dividends

received deduction allowed to corporations under the Code. The

amount includible in income (including any Finnish withholding

tax) will equal the US dollar value of the payment, determined at

the time such payment is received by the Depositary (in the case

of ADSs) or by the US Holder (in the case of shares), regardless of

whether the payment is in fact converted into US dollars.

Generally, any gain or loss resulting from currency exchange

rate fluctuations during the period between the time such

payment is received and the date the dividend payment is

converted into US dollars will be treated as US source ordinary

income or loss to a US Holder.

Special rules govern and specific elections are available to

accrual method taxpayers to determine the US dollar amount

includible in income in the case of a dividend paid (and taxes

withheld) in foreign currency. Accrual basis taxpayers are urged

to consult their own tax advisers regarding the requirements

and elections applicable in this regard.

Dividends received generally will constitute foreign source

“passive category income” for foreign tax credit purposes.

Subject to certain limitations, Finnish taxes withheld may be

eligible for credit (not in excess of the applicable Treaty rate)

against a US Holder’s US federal income tax liability.

Additionally, if Nokia makes a distribution from its reserve for

invested unrestricted equity when it does not have current or

accumulated earnings and profits, a US Holder may not be able

to claim such credit.

In lieu of a credit, a US Holder may elect to claim a deduction in

respect of its Finnish income taxes provided the deduction is

claimed for all of the foreign taxes paid by the US Holder in that

particular taxable year. A deduction does not reduce US tax on a

dollar-for-dollar basis like a tax credit. The deduction, however,

is not subject to the limitations applicable to foreign tax credits.

Provided that certain holding period and other requirements are

met, individuals and certain other non-corporate US Holders are

eligible for reduced rates of US federal income tax at a

maximum rate of 20% in respect of “qualified dividend income”.

Dividends that Nokia pays with respect to its shares and ADSs

generally will be qualified dividend income if certain holding

periods are met and Nokia was neither a passive foreign

investment company (PFIC) in the taxable year prior to the year

in which the dividend was paid nor in the taxable year in which

the dividend is paid. Nokia currently believes that dividends it

pays with respect to its shares and ADSs will constitute qualified

dividend income for US federal income tax purposes; however,

this is a factual matter and is subject to change. Nokia

anticipates that its dividends will be reported as qualified

dividends on Forms 1099-DIV delivered to US Holders. US

Holders of shares or ADSs are urged to consult their own tax

advisers regarding the availability to them of the reduced

dividend tax rate in light of their own particular situation and the

computations of their foreign tax credit limitation with respect

to any qualified dividends paid to them, as applicable.

| 118 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries •Taxation Key ratios Alternative performance measures Financial statements Other information | | --- |

We believe we should not be classified as a PFIC for US federal

income tax purposes for the taxable year ended 31 December

2024 and we do not expect to become a PFIC in the foreseeable

future. US Holders are advised, however, that this conclusion is

a factual determination that must be made annually and thus

may be subject to change. If we were to be classified as a PFIC,

the tax on distributions on our shares or ADSs and on any gains

realized upon the disposition of our shares or ADSs generally

would be less favorable than as described herein. Dividends paid

by a PFIC are not “qualified dividend income” and are not

eligible for reduced rates of taxation. Additionally, US persons

who are shareholders in a PFIC generally will be required to file

an annual report disclosing the ownership of such shares and

certain other information. US Holders should consult their own

tax advisers regarding the application of the PFIC rules,

including the related reporting requirements, to their ownership

of our shares or ADSs.

Finnish withholding taxes on cash dividends

Under the Finnish Income Tax Act and Act on Taxation of

Non-residents’ Income, non-residents of Finland are generally

subject to a withholding tax at a rate of 30% on dividends paid

by a Finnish resident company. Further, under the Finnish

Prepayment Act, 50% preliminary tax must be withheld on

dividends paid in certain situations. However, pursuant to the

Treaty, dividends paid to US Holders are generally subject to

Finnish withholding tax at reduced rates. Under the Finnish

Income Tax Act and tax court practice, the distribution of funds

from reserves for invested unrestricted equity by a listed

company such as Nokia is taxed as a distribution of a dividend.

As of 1 January 2021, nominee-registered shares are generally

subject to a withholding tax at a rate of 35% on dividends paid

by Nokia. This withholding tax regime is based on OECD’s TRACE

(Treaty Relief and Compliance Enhancement) model. Under the

rules, the 35% withholding tax will generally be applied on

dividend distributions on nominee-registered shares by listed

companies such as Nokia, unless custodians fulfill certain strict

requirements and are willing to take over certain responsibilities

(e.g., registration with the Finnish Tax Administration (so-called

authorized intermediary), identification of the beneficial owner

of the dividend and collecting and submitting detailed recipient

information to the Finnish Tax Administration using specific

filing procedures). Furthermore, application of reduced

withholding tax rates at source require that the custodian and

dividend distributor are willing to assume liability of incorrectly

applied withholding tax. If the custodian only registers with the

Finnish Tax Administration and submits (or undertakes to

submit) the detailed recipient details to the Finnish Tax

Administration, the 30% withholding tax rate can be applied,

instead of 35%.

Any tax withheld in excess can be reclaimed after the calendar

year of the dividend payment by submitting a refund application

to the Finnish Tax Administration no later than by the end of the

third calendar year following the dividend payment year. During

the year of dividend payment, the refund can be processed if

custodians and dividend distributor fulfill the above-mentioned

requirements laid down for actual dividend distribution.

It is exceptionally also possible that any tax not withheld at

source is later assessed directly to the shareholder by the

Finnish Tax Administration, in cases where the failure to

withhold tax at source is not due to negligence of the custodian

or the dividend distributor.

Holders of shares or ADSs are urged to consult their own

custodian regarding the availability of reduced withholding tax

rates in light of their own particular situation and approach their

custodian in terms of their responsibilities, as well as consult

their own tax advisers regarding the availability to them of the

tax credit from dividend withholding tax.

US and Finnish tax on sale or other disposition

A US Holder generally will recognize taxable capital gain or loss

on the sale or other disposition of ADSs in an amount equal to

the difference between the US dollar value of the amount

realized and the adjusted tax basis (determined in US dollars) in

the ADSs. If the ADSs are held as a capital asset, this gain or loss

generally will be long-term capital gain or loss if, at the time of

the sale, the ADSs have been held for more than one year. Any

capital gain or loss, for foreign tax credit purposes, generally

will constitute US source gain or loss. In the case of a US Holder

that is an individual, long-term capital gain generally is subject

to US federal income tax at preferential rates. The deductibility

of capital losses is subject to significant limitations.

The deposit or withdrawal by a US Holder of shares in exchange

for ADSs or of ADSs for shares under the deposit agreement

generally will not be subject to US federal income tax or Finnish

income tax.

The sale by a US Holder of the ADSs or the underlying shares,

other than an individual who, by reason of his residence in

Finland for a period exceeding six months, is or becomes liable

for Finnish income tax according to the relevant provisions of

Finnish tax law, generally will not be subject to income tax in

Finland, in accordance with Finnish tax law and the Treaty.

Finnish transfer tax

The transfer of our shares and ADSs for cash through a broker

or other appropriate intermediary is generally not subject to

Finnish transfer tax. Non-brokered transfers will generally be

exempted from the transfer tax if the transferee has been

approved as a trading party in the market where the transfer is

executed, or other conditions are met. Transfers of ADSs on the

New York Stock Exchange are exempt. Where the transfer does

not fulfill the above requirements, and either the buyer or the

seller is a Finnish resident or a Finnish branch office of a

specified foreign financial service provider, the buyer is liable to

pay transfer tax of 1.5% of the transaction price where the

resulting tax is at least EUR 10. Selling shareholders should

consult their tax advisers regarding the specific tax

considerations of a sale of our shares or ADSs.

Finnish inheritance and gift taxes

A transfer of an underlying share by gift or by reason of the

death of a US Holder and the transfer of an ADS are not subject

to Finnish gift or inheritance tax, provided that none of the

deceased person, the donor, the beneficiary of the deceased

person or the recipient of the gift is resident in Finland.

| 119 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries •Taxation Key ratios Alternative performance measures Financial statements Other information | | --- |

Non-residents of the United States

Beneficial owners of ADSs that are not US Holders will not be

subject to US federal income tax on dividends received with

respect to ADSs unless such dividend income is effectively

connected with the conduct of a trade or business within the

United States. Similarly, non-US Holders generally will not be

subject to US federal income tax on any gain realized on the sale

or other disposition of ADSs, unless (a) the gain is effectively

connected with the conduct of a trade or business in the United

States or (b) in the case of an individual, that individual is

present in the United States for 183 days or more in the taxable

year of the disposition and other conditions are met.

The United States information reporting and

backup withholding

Dividend payments with respect to shares or ADSs and

proceeds from the sale or other disposition of shares or ADSs

may be subject to information reporting to the Internal Revenue

Service and possible US backup withholding. Backup withholding

will not apply to a holder if the holder furnishes a correct

taxpayer identification number or certificate of foreign status

and makes any other required certification in connection

therewith, or if it is a recipient otherwise exempt from backup

withholding (such as a corporation). Any US persons required to

establish their exempt status generally must furnish a duly

completed IRS Form W-9 (Request for Taxpayer Identification

Number and Certification). Non-US holders generally are not

subject to US information reporting or backup withholding.

However, such holders may be required to provide certification

of non-US status (generally on IRS Form W-8BEN for individuals

and Form W-8BEN-E for corporations) in connection with

payments received in the United States or through certain

US-related financial intermediaries. Backup withholding is not

an additional tax. Amounts withheld as backup withholding may

be credited against a holder’s US federal income tax liability,

and the holder may obtain a refund of any excess amounts

withheld under the backup withholding rules by timely filing the

appropriate claim for refund with the Internal Revenue Service

and furnishing the proper required information.

| 120 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation •Key ratios Alternative performance measures Financial statements Other information | | --- |

Key ratios

Earnings per share (basic)

Profit/(loss) attributable to equity holders of the parent

Weighted average number of shares outstanding during the year

Earnings per share (diluted)

Profit/(loss) attributable to equity holders of the parent adjusted for the effect of dilution

Adjusted weighted average number of shares during the year

P/E ratio

Closing share price at 31 December

Earnings per share (basic) for continuing operations

Payout ratio

Proposed dividend per share

Earnings per share (basic) for continuing operations

Dividend yield %

Proposed dividend per share

Closing share price at 31 December

Shareholders’ equity per share

Capital and reserves attributable to equity holders of the parent

Number of shares at 31 December – number of treasury shares at 31 December

Market capitalization

(Number of shares at 31 December – number of treasury shares at 31 December) x closing share price at 31 December

Share turnover %

Number of shares traded during the year

Average number of shares during the year

| 121 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation Key ratios •Alternative performance measures Financial statements Other information | | --- |

Alternative performance measures

Certain financial measures presented in this report are not measures of financial performance,

financial position or cash flows defined in IFRS Accounting Standards. As these measures are not

defined in IFRS Accounting Standards, they may not be directly comparable with financial measures

used by other companies, including those in the same industry. The primary rationale for

presenting these measures is that the management uses these measures in assessing the financial

performance of Nokia and believes that these measures provide meaningful supplemental

information on the underlying business performance of Nokia. These financial measures should not

be considered in isolation from, or as a substitute for, financial information presented in

compliance with IFRS Accounting Standards.

Return on capital employed %

Definition

Return on capital employed is defined as (Profit before tax + Interest expense on interest-bearing

liabilities) / (Average capital and reserves attributable to equity holders of the parent + average

non-controlling interests + average interest-bearing liabilities).

Purpose

Return on capital employed indicates how efficiently Nokia uses its capital to generate profits.

Composition of return on capital employed %:

EURm	2025	2024	2023
Profit before tax	915	2 091	1 469
Interest expense on interest-bearing liabilities	141	209	201
Total	1 056	2 300	1 670
Average capital and reserves attributable to equity holders of the parent(1)	20 812	20 597	20 935
Average non-controlling interests(1)	91	91	92
Average interest-bearing liabilities(1)	3 650	4 040	4 334
Total capital employed	24 553	24 728	25 361
Return on capital employed %	4.3%	9.3%	6.6%

(1)Calculated as the average of opening and closing balance for the year as presented in the consolidated statement of financial

position. Refer to the consolidated financial statements.

Return on shareholders’ equity %

Definition

Return on shareholders’ equity is defined as Profit/(loss) for the year attributable to equity holders

of the parent / Average capital and reserves attributable to equity holders of the parent.

Purpose

Return on shareholders’ equity indicates how efficiently Nokia uses the capital invested by its

shareholders to generate profits.

Composition of return on shareholders’ equity %:

EURm	2025	2024	2023
Profit for the year attributable to equity holders of the parent	651	1 277	665
Average capital and reserves attributable to equity holders of the parent(1)	20 812	20 597	20 935
Return on shareholders’ equity %	3.1%	6.2%	3.2%

(1)Calculated as the average of opening and closing balance for the year as presented in the consolidated statement of financial

position. Refer to the consolidated financial statements.

Equity ratio %

Definition

Equity ratio % is defined as (Total capital and reserves attributable to equity holders of the parent

non-controlling interests) / Total assets.

Purpose

Equity ratio indicates the proportion of assets financed by the capital provided by the equity

holders of the parent to the total assets of Nokia.

Composition of equity ratio %:

EURm	2025	2024	2023
Total capital and reserves attributable to equity holders of the parent	20 967	20 657	20 537
Non-controlling interests	91	90	91
Shareholders’ equity	21 058	20 747	20 628
Total assets	37 597	39 149	39 860
Equity ratio %	56.0%	53.0%	51.8%

| 122 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation Key ratios •Alternative performance measures Financial statements Other information | | --- |

Total cash and interest-bearing financial investments

Definition

Total cash and interest-bearing financial investments consist of cash and cash equivalents, current

interest-bearing financial investments and non-current interest-bearing financial investments.

Purpose

Total cash and interest-bearing financial investments is used to indicate funds available to Nokia to

run its current and invest in future business activities as well as provide return for security holders.

Composition of total cash and interest-bearing financial investments:

EURm	2025	2024	2023
Cash and cash equivalents	5 462	6 623	6 234
Current interest-bearing financial investments	961	1 661	1 565
Non-current interest-bearing financial investments	368	457	715
Total cash and interest-bearing financial investments	6 791	8 741	8 514

Net cash and interest-bearing financial investments

Definition

Net cash and interest-bearing financial investments equals total cash and interest-bearing financial

investments less long-term and short-term interest-bearing liabilities.

Purpose

Net cash and interest-bearing financial investments is used to indicate Nokia’s liquidity position

after cash required to settle the interest-bearing liabilities.

Composition of net cash and interest-bearing financial investments:

EURm	2025	2024	2023
Total cash and interest-bearing financial investments
Cash and cash equivalents	5 462	6 623	6 234
Current interest-bearing financial investments	961	1 661	1 565
Non-current interest-bearing financial investments	368	457	715
Interest-bearing liabilities
Long-term interest-bearing liabilities	(2 329)	(2 918)	(3 637)
Short-term interest-bearing liabilities	(1 084)	(969)	(554)
Net cash and interest-bearing financial investments	3 378	4 854	4 323

Net debt to equity (gearing) %

Definition

Net debt to equity (gearing) % is defined as Interest-bearing liabilities less Total cash and interest-

bearing financial investments / (Total capital and reserves attributable to the equity holders of the

parent + Non-controlling interests).

Purpose

Net debt to equity ratio presents the relative proportion of shareholders’ equity and interest-

bearing liabilities used to finance Nokia’s assets and indicates the leverage of Nokia’s business.

Composition of net debt to equity (gearing) %:

EURm	2025	2024	2023
Interest-bearing liabilities
Long-term interest-bearing liabilities	2 329	2 918	3 637
Short-term interest-bearing liabilities	1 084	969	554
Total cash and interest-bearing financial investments
Cash and cash equivalents	(5 462)	(6 623)	(6 234)
Current interest-bearing financial investments	(961)	(1 661)	(1 565)
Non-current interest-bearing financial investments	(368)	(457)	(715)
Net debt	(3 378)	(4 854)	(4 323)
Total capital and reserves attributable to equity holders of the parent	20 967	20 657	20 537
Non-controlling interests	91	90	91
Shareholders’ equity	21 058	20 747	20 628
Net debt to equity (gearing) %	(16.0)%	(23.4)%	(21.0)%

Free cash flow

Definition

Free cash flow is defined as Net cash flows from operating activities less purchases of property,

plant and equipment and intangible assets (capital expenditures).

Purpose

Free cash flow is the cash that Nokia generates after investments in property, plant and equipment

and intangible assets, and we believe it provides meaningful supplemental information as it

represents the cash available to service and repay interest-bearing financial liabilities, including

lease liabilities, make investments to grow business and distribute funds to shareholders. It is a

measure of cash generation, working capital efficiency and capital discipline of the business.

Composition of free cash flow:

EURm	2025	2024	2023
Net cash flows from operating activities	2 071	2 493	1 317
Purchase of property, plant and equipment and intangible assets (capital<br><br>expenditures)	(606)	(472)	(652)
Free cash flow	1 465	2 021	665

| 123 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation Key ratios •Alternative performance measures Financial statements Other information | | --- |

Capital expenditure

Definition

Purchases of property, plant and equipment and intangible assets (excluding assets acquired under

business combinations).

Purpose

Capital expenditure is used to describe investments in future profit-generating activities.

Composition of capital expenditure:

EURm	2025	2024	2023
Purchase of property, plant and equipment and intangible assets	(606)	(472)	(652)
Capital expenditure	(606)	(472)	(652)

Comparable operating profit

Definition

Comparable operating profit excludes intangible asset amortization and other purchase price fair

value adjustments, goodwill impairments, restructuring-related charges, transaction and related

costs, including integration costs, and certain other items affecting comparability.

Purpose

We believe that the comparable operating profit provides meaningful supplemental information

to both management and investors regarding Nokia’s underlying business performance by

excluding certain items of income and expenses that may not be indicative of Nokia’s business

operating results. Comparable operating profit is used also in determining management

remuneration.

Composition of comparable operating profit:

EURm	2025	2024	2023
Operating profit(1)	885	1 970	1 733
Restructuring and associated charges	478	445	356
Amortization and depreciation of acquired intangible assets and<br><br>property, plant and equipment	444	314	341
Release of acquisition-related fair value adjustments to deferred<br><br>revenue and inventory	88	—	—
Provision for contractual claims	66	—	—
Transaction and related costs, including integration costs	33	23	—
Loss on defined benefit plan amendment	24	—	—
Disposal of businesses	6	(67)	(20)
Divestment of associates	—	(190)	—
Impairment and write-off of assets, net of reversals	—	89	25
Costs associated with country exit	—	—	(49)
Other⁽¹⁾	—	—	23
Comparable operating profit(1)	2 024	2 584	2 409

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and

administrative expenses and other operating income to financial income. The comparative amounts for 2024 and 2023 have been

recast accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.

Comparable operating margin %

Definition

Comparable operating margin is defined as Comparable operating profit / Net sales.

Purpose

Comparable operating margin is used as a measure of Nokia’s operating profitability as a

percentage of net sales excluding intangible asset amortization and other purchase price fair value

adjustments, goodwill impairments, restructuring-related charges, transaction and related costs,

including integration costs and certain other items affecting comparability.

As with comparable operating profit, we believe that the comparable operating margin provides

meaningful supplemental information to both management and investors regarding Nokia’s

underlying business performance by excluding certain items of income and expenses that may not

be indicative of Nokia’s business operating results.

Composition of comparable operating margin:

EURm	2025	2024	2023
Comparable operating profit(1)	2 024	2 584	2 409
Net sales	19 889	19 220	21 138
Comparable operating margin %	10.2%	13.4%	11.4%

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and

administrative expenses and other operating income to financial income. The comparative amounts for 2024 and 2023 have been

recast accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.

124	Nokia Annual Report on Form 20-F 2025

Consolidated financial statements	125
Consolidated income statement	125
Consolidated statement of comprehensive<br><br>income	126
Consolidated statement of financial position	127
Consolidated statement of cash flows	128
Consolidated statement of changes in<br><br>shareholders’ equity	129
Notes to the consolidated<br><br>financial statements	130
Section 1:<br><br>Basis of preparation	130
1.1. Corporate information	130
1.2. General accounting policies	130
1.3. Use of estimates and critical accounting<br><br>judgments	131
1.4. New and amended standards and<br><br>interpretations	131	Section 2:<br><br>Results for the year	133
---	---
2.1. Net sales	133
2.2. Segment information	136
2.3. Operating expenses and other operating<br><br>income	139
2.4. Financial income and expenses	139
2.5. Income taxes	140
2.6. Discontinued operations	143
2.7. Earnings per share	144
Section 3:<br><br>Compensation and benefits	145
3.1. Summary of personnel expenses	145
3.2. Remuneration of key management	145
3.3. Share-based payments	147
3.4. Pensions and other post-employment<br><br>benefits	149	Section 4:<br><br>Operating assets and liabilities	156
---	---
4.1. Goodwill and intangible assets	156
4.2. Property, plant and equipment	159
4.3. Leases	160
4.4. Inventories	161
4.5. Trade receivables and other customer-<br><br>related balances	161
4.6. Other receivables and liabilities	163
4.7. Provisions	164
Section 5:<br><br>Capital and financial instruments	165
5.1. Equity	165
5.2. Financial assets and liabilities	169
5.3. Derivative asset and liabilities	173
5.4. Financial risk management	176	Section 6:<br><br>Other information	183
---	---
6.1. Commitments, contingencies and legal<br><br>proceedings	183
6.2. Acquisitions	184
6.3. Principal Group companies	186
6.4. Related party transactions	187
6.5. Subsequent events	187
Reports of independent registered public<br><br>accounting firm (PCAOB ID1131)	188

| 125 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Consolidated financial

statements

Consolidated income statement

For the year ended 31 December

EURm	Note	2025	2024	2023
Net sales	2.1, 2.2	19 889	19 220	21 138
Cost of sales	2.2, 2.3	(11 230)	(10 356)	(12 592)
Gross profit		8 659	8 864	8 546
Research and development expenses	2.2, 2.3	(4 855)	(4 512)	(4 277)
Selling, general and administrative expenses(1)	2.2, 2.3	(3 073)	(2 872)	(2 863)
Other operating income(1)	2.2, 2.3	42	385	224
Other operating expenses	2.2, 2.3	112	105	103
Operating profit⁽¹⁾		885	1 970	1 733
Share of results of associates and joint ventures	2.2, 6.4	19	7	(39)
Financial income(1)	2.2, 2.4	257	434	354
Financial expenses	2.2, 2.4	(246)	(320)	(579)
Profit before tax		915	2 091	1 469
Income tax expense	2.5	(277)	(380)	(820)
Profit from continuing operations		638	1 711	649
Profit/(loss) from discontinued operations	2.6	22	(427)	30
Profit for the year		660	1 284	679
Attributable to:
Equity holders of the parent		651	1 277	665
Non-controlling interests		9	7	14
Earnings per share attributable to equity holders of the parent	2.7	EUR	EUR	EUR
Basic
Profit from continuing operations		0.12	0.31	0.11
Profit for the year		0.12	0.23	0.12
Diluted
Profit from continuing operations		0.11	0.31	0.11
Profit for the year		0.12	0.23	0.12

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and administrative expenses and other operating income to

financial income. The comparative amounts for 2024 and 2023 have been recast accordingly. For more information, refer to Note 1.2. General accounting policies.

The notes are an integral part of these consolidated financial statements.

| 126 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Consolidated statement of comprehensive income

For the year ended 31 December

EURm	Note	2025	2024	2023
Profit for the year		660	1 284	679
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans		(24)	408	(343)
Income tax related to items that will not be reclassified to profit or loss	2.5	7	(85)	61
Total of items that will not be reclassified to profit or loss		(17)	323	(282)
Items that may be reclassified to profit or loss
Translation differences
Exchange differences on translating foreign operations		(1 625)	615	(554)
Transfer to income statement		(2)	(78)	19
Net investment hedges
Net fair value gains/(losses)		111	(40)	135
Cash flow and other hedges
Net fair value gains/(losses)		65	23	(24)
Transfer to income statement		(64)	(2)	(37)
Financial assets at fair value through other comprehensive income
Net fair value gains/(losses)		32	83	(110)
Transfer to income statement		(23)	(64)	120
Other increase/(decrease), net		7	3	(4)
Income tax related to items that may be reclassified to profit or loss	2.5	(28)	8	(10)
Total of items that may be reclassified to profit or loss		(1 527)	548	(465)
Other comprehensive (loss)/income, net of tax		(1 544)	871	(747)
Total comprehensive (loss)/income for the year, net of tax		(884)	2 155	(68)
Attributable to:
Equity holders of the parent
Continuing operations		(911)	2 624	(91)
Discontinued operations		22	(477)	13
Total		(889)	2 147	(78)
Non-controlling interests		5	8	10

The notes are an integral part of these consolidated financial statements.

| 127 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Consolidated statement of financial position

At 31 December

EURm	Note	2025	2024
ASSETS
Non-current assets
Goodwill	4.1	5 996	5 736
Other intangible assets	4.1	1 399	802
Property, plant and equipment	4.2	1 570	1 362
Right-of-use assets	4.3	920	758
Investments in associated companies and joint ventures	6.4	180	124
Non-current interest-bearing financial investments	5.2, 5.4	368	457
Other non-current financial assets	5.2, 5.4	1 072	1 182
Defined benefit pension assets	3.4	6 380	6 932
Deferred tax assets	2.5	3 643	3 599
Other non-current receivables	4.6	277	210
Total non-current assets		21 805	21 162
Current assets
Inventories	4.4	2 209	2 163
Trade receivables	4.5, 5.2, 5.4	4 975	5 248
Contract assets	4.5	805	694
Current income tax assets	2.5	256	202
Other current receivables	4.6	784	767
Current interest-bearing financial investments	5.2, 5.4	961	1 661
Other current financial assets	5.2, 5.3, 5.4	340	629
Cash and cash equivalents	5.2, 5.4	5 462	6 623
Total current assets		15 792	17 987
Total assets		37 597	39 149	EURm	Note	2025	2024
---	---	---	---
SHAREHOLDERS’ EQUITY AND LIABILITIES
Equity
Share capital		246	246
Share premium		870	734
Treasury shares		(352)	(431)
Translation differences		(1 272)	263
Fair value and other reserves		3 955	3 963
Reserve for invested unrestricted equity		15 663	13 926
Retained earnings		1 857	1 956
Total shareholders’ equity		20 967	20 657
Non-controlling interests		91	90
Total equity	5.1	21 058	20 747
Non-current liabilities
Long-term interest-bearing liabilities	5.2, 5.3, 5.4	2 329	2 918
Long-term lease liabilities	5.4	797	664
Defined benefit pension and post-employment liabilities	3.4	1 947	2 083
Deferred tax liabilities	2.5	392	562
Contract liabilities	4.5	286	185
Other non-current liabilities	4.6	147	117
Provisions	4.7	637	479
Total non-current liabilities		6 535	7 008
Current liabilities
Short-term interest-bearing liabilities	5.2, 5.3, 5.4	1 084	969
Short-term lease liabilities	5.4	203	199
Other financial liabilities	5.2, 5.3, 5.4	316	1 668
Contract liabilities	4.5	1 562	1 506
Current income tax liabilities	2.5	344	207
Trade payables	5.2, 5.4	2 978	3 213
Other current liabilities	4.6	2 738	2 883
Provisions	4.7	779	749
Total current liabilities		10 004	11 394
Total liabilities		16 539	18 402
Total shareholders’ equity and liabilities		37 597	39 149

The notes are an integral part of these consolidated financial statements.

| 128 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Consolidated statement of cash flows

For the year ended 31 December

EURm	Note	2025	2024	2023
Cash flow from operating activities
Profit for the year		660	1 284	679
Adjustments, total(1)		2 065	2 157	2 559
Change in net working capital(2)		(209)	(569)	(1 282)
Cash flows from operations		2 516	2 872	1 956
Interest received		163	226	178
Interest paid	4.3, 5.2	(212)	(263)	(241)
Income taxes paid, net		(396)	(342)	(576)
Net cash flows from operating activities		2 071	2 493	1 317
Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets		(606)	(472)	(652)
Proceeds from sale of property, plant and equipment and intangible assets		28	97	189
Acquisition of businesses, net of cash acquired	6.2	(1 730)	(37)	(19)
Purchase of shares in associated companies		(50)	—	—
Proceeds from disposal of businesses, net of cash disposed	2.6	40	(29)	17
Proceeds from disposal of shares in associated companies		—	259	8
Purchase of interest-bearing financial investments		(337)	(924)	(1 855)
Proceeds from interest-bearing financial investments		1 102	1 138	3 382
Purchase of other financial assets		(117)	(280)	(83)
Proceeds from other financial assets		186	70	34
Other		88	61	22
Net cash flows (used in)/from investing activities		(1 396)	(117)	1 043
Cash flow from financing activities
Proceeds from issuance of shares	5.1	859	—	—
Acquisition of treasury shares	5.1	(624)	(680)	(300)
Purchase of equity instruments of subsidiaries	5.2	(501)	—	—
Proceeds from long-term borrowings	5.4	151	101	496
Repayment of long-term borrowings	5.4	(875)	(462)	(798)
(Repayment of)/proceeds from short-term borrowings	5.4	360	(6)	(40)
Payment of principal portion of lease liabilities	4.3, 5.4	(221)	(233)	(239)
Dividends paid	5.1	(759)	(723)	(621)
Net cash flows used in financing activities		(1 610)	(2 003)	(1 502)
Translation differences		(226)	16	(91)
Net (decrease)/increase in cash and cash equivalents		(1 161)	389	767
Cash and cash equivalents at 1 January		6 623	6 234	5 467
Cash and cash equivalents at 31 December		5 462	6 623	6 234

The consolidated statement of cash flows combines cash flows from both continuing and discontinued operations.

The notes are an integral part of these consolidated financial statements.

(1) Adjustments
EURm	2025	2024	2023
Depreciation and amortization	1 119	1 014	1 087
Share-based payments	337	241	202
Impairment charges	18	611	25
Restructuring charges(1)	391	388	316
Gain on sale of businesses and associated<br><br>companies	(23)	(286)	(19)
Gain on sale of property, plant and<br><br>equipment	(22)	(94)	(143)
Financial income and expenses(2)	(11)	(107)	220
Income tax expense	277	385	825
Other adjustments, net(2)	(21)	5	46
Total	2 065	2 157	2 559

(1)Restructuring charges in adjustments represent the non-cash portion recognized

in the consolidated income statement.

(2)In 2025, Nokia changed the presentation of gains and losses from venture fund

investments which resulted in reclassifications in adjustments. The comparative

amounts for 2024 and 2023 have been recast accordingly. For more information,

refer to Note 1.2. General accounting policies.

(2) Change in net working capital
EURm	2025	2024	2023
(Increase)/decrease in receivables	(25)	(364)	304
Decrease in inventories	149	404	443
Decrease in non-interest-bearing<br><br>liabilities	(333)	(609)	(2 029)
Total	(209)	(569)	(1 282)

| 129 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Consolidated statement of changes in shareholders’ equity

EURm	Note	Share capital	Share premium	Treasury<br><br>shares	Translation<br><br>differences	Fair value and<br><br>other reserves	Reserve for<br><br>invested<br><br>unrestricted<br><br>equity	Retained<br><br>earnings	Total<br><br>shareholders’<br><br>equity	Non-controlling<br><br>interests	Total equity
1 January 2023		246	503	(352)	169	3 905	15 487	1 375	21 333	93	21 426
Profit for the year								665	665	14	679
Other comprehensive loss	5.1				(418)	(300)		(25)	(743)	(4)	(747)
Total comprehensive income for the year		—	—	—	(418)	(300)	—	640	(78)	10	(68)
Share-based payments			202						202		202
Settlement of share-based payments			(77)				59		(18)		(18)
Acquisition of treasury shares	5.1			(303)			12		(291)		(291)
Cancellation of treasury shares	5.1			303			(303)		—		—
Disposal of subsidiaries									—	(2)	(2)
Dividends	5.1							(611)	(611)	(10)	(621)
Total transactions with owners		—	125	—	—	—	(232)	(611)	(718)	(12)	(730)
31 December 2023		246	628	(352)	(249)	3 605	15 255	1 404	20 537	91	20 628
Profit for the year								1 277	1 277	7	1 284
Other comprehensive income	5.1				512	358			870	1	871
Total comprehensive loss for the year		—	—	—	512	358	—	1 277	2 147	8	2 155
Share-based payments			241						241		241
Settlement of share-based payments			(135)				99		(36)		(36)
Acquisition of treasury shares	5.1			(686)			(821)		(1 507)		(1 507)
Cancellation of treasury shares	5.1			607			(607)		—		—
Adjustment to financial liability to acquire non-controlling interest								(11)	(11)		(11)
Dividends	5.1							(714)	(714)	(9)	(723)
Total transactions with owners		—	106	(79)	—	—	(1 329)	(725)	(2 027)	(9)	(2 036)
31 December 2024		246	734	(431)	263	3 963	13 926	1 956	20 657	90	20 747
Profit for the year								651	651	9	660
Other comprehensive (loss)/income	5.1				(1 535)	(8)		3	(1 540)	(4)	(1 544)
Total comprehensive income for the year		—	—	—	(1 535)	(8)	—	654	(889)	5	(884)
Share-based payments			337						337		337
Settlement of share-based payments			(262)				176		(86)		(86)
Acquisition of treasury shares(1)	5.1			(624)			830		206		206
Cancellation of treasury shares	5.1			703			(703)		—		—
Directed share issue	5.1						850		850		850
Acquisitions through business combinations	5.1		61				584		645	2	647
Dividends	5.1							(753)	(753)	(6)	(759)
Total transactions with owners		—	136	79	—	—	1 737	(753)	1 199	(4)	1 195
31 December 2025		246	870	(352)	(1 272)	3 955	15 663	1 857	20 967	91	21 058

(1)In November 2024, Nokia launched a new share buyback program to offset the dilutive effect of the acquisition of Infinera. At 31 December 2024, Nokia recorded a liability and a reduction of reserve for invested unrestricted equity of EUR 821 million to reflect Nokia’s

commitment under the agreement with a third-party broker conducting the share repurchases on Nokia’s behalf. The liability and reduction of reserve for invested unrestricted equity were reversed in 2025 when the program was completed. For more information on Nokia’s

share buyback programs, refer to Note 5.1. Equity.

The notes are an integral part of these consolidated financial statements.

| 130 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Notes to the consolidated financial statements

Section 1

Basis of

preparation

This section describes the general

accounting policies applied in

preparation of these consolidated

financial statements, including the

basis of presentation and key

consolidation principles. This

section also summarizes the

accounting matters that involve

most judgment or estimation

uncertainty. The specific

accounting policies as well as

details of key accounting estimates

and judgments are provided in the

related notes.

1.1. 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

(together Nokia or the Group). Nokia’s operational headquarters

are located in Espoo, Finland. The shares of Nokia Corporation

are listed on the Nasdaq Helsinki Stock Exchange and the New

York Stock Exchange.

Nokia is a global provider of critical network infrastructure across

fixed, mobile and transport networks, delivering the performance

and security its customers need to meet the demands of an AI-

enabled future. Nokia’s solution offerings combine hardware,

software and services, as well as licensing of intellectual

property, including patents, technologies and the Nokia brand.

These consolidated financial statements for the year ended 31

December 2025 were authorized for issuance and filing by the

Board of Directors on 5 March 2026.

1.2. General accounting policies

Basis of presentation and statement of

compliance

The consolidated financial statements are prepared in accordance

with IFRS® Accounting Standards as issued by the International

Accounting Standards Board (IASB) and as adopted by the

European Union (EU). The consolidated financial statements also

conform to Finnish accounting and company legislation.

The consolidated financial statements are presented in millions

of euros (EURm), except when otherwise noted, and are prepared

under the historical cost convention, except when otherwise

disclosed in the accounting policies in the specific notes.

Other information

Presentation of the results of venture fund investments

In 2025, Nokia completed a strategic review of its venture fund

investment activities. As a result, Nokia no longer views broad-

based venture fund investments as having a strategic role and

has initiated a process to scale down these investments.

Consequently, the presentation of the results of venture fund

investments as operating activities is no longer considered

relevant, and therefore beginning from 2025, Nokia is

presenting the gains and losses from venture fund investments,

including the changes in fair value and the fund management

fees, as financial income. For the segment reporting purposes,

the results of venture fund investments had previously been

included in the operating results of Group Common and Other.

The comparative financial information for 2024 and 2023 has

been recast accordingly.

As a result of the recast, in 2024, selling, general and

administrative costs decreased by EUR 18 million, other

operating income decreased by EUR 47 million and financial

income increased by EUR 29 million. In 2023, selling, general

and administrative costs decreased by EUR 15 million, other

operating income increased by EUR 57 million and financial

income decreased by EUR 72 million.

Additionally, in 2024 and 2023, EUR 29 million and EUR 72 million,

respectively, was reclassified to financial income and expenses

from gain/loss from other financial assets and other adjustments,

net within adjustments in the statement of cash flows.

Statutory reporting requirement in Germany

The fully consolidated German subsidiary, Nokia Solutions and

Networks GmbH & Co. KG, registered in the commercial register

of Munich under HRA 88537, has made use of the exemption

available under § 264b and § 291 of the German Commercial

Code (HGB).

Principles of consolidation

The consolidated financial statements comprise the financial

statements of the Parent Company, and each company over

which it exercises control. Control over an entity exists when

Nokia is exposed, or has rights, to variable returns from its

involvement with the entity and has the ability to affect those

returns through its power over the entity. Presumption is that a

majority of voting rights results in control. To support this

presumption, Nokia considers all relevant facts and

circumstances when assessing if it has power over the entity

including voting rights and potential voting rights, rights to

appoint key management personnel and rights arising from

other contractual arrangements. Consolidation of a subsidiary

begins when control over it is obtained, and it ceases when the

control is lost.

All intercompany transactions are eliminated in the

consolidation process. Non-controlling interest represents the

proportion of net profit or loss, other comprehensive income

and net assets in subsidiaries that is not attributable to the

equity holders of the Parent.

| 131 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Investments in associates and joint ventures

An associate is an entity over which Nokia exercises significant

influence. A joint venture is a type of joint arrangement whereby

the parties that have joint control of the arrangement have

rights to the net assets of the arrangement.

Nokia’s investments in associates and joint ventures are

accounted for using the equity method. Under the equity

method, the investment in an associate or joint venture is

initially recognized at cost. The carrying amount of the

investment is adjusted to recognize changes in Nokia’s share of

net assets of the associate or joint venture since the acquisition

date. Nokia’s share of profits and losses of associates and joint

ventures is reflected in the consolidated income statement. Any

change in other comprehensive income of associates and joint

ventures is presented as part of Nokia’s other comprehensive

income.

Foreign currency translation

Functional and presentation currency

The consolidated financial statements are presented in euro,

the functional and presentation currency of the Parent

Company. The financial statements of all Group companies are

measured using the functional currency, which is the currency

of the primary economic environment in which the entity

operates.

Transactions in foreign currencies

Transactions in foreign currencies are recorded at exchange

rates prevailing at the date of the transaction. For practical

reasons, a rate that approximates the actual rate at the date of

the transaction is often used. Monetary assets and liabilities

denominated in foreign currency are translated at the exchange

rates prevailing at the end of the reporting period.

Foreign exchange gains and losses arising from monetary

assets and liabilities as well as fair value changes of related

hedging instruments are recognized in financial income and

expenses. Foreign exchange gains and losses related to non-

monetary non-current financial investments are included in the

fair value measurement of these investments and recognized in

other financial income.

Foreign Group companies

On consolidation, the assets and liabilities of foreign operations

whose functional currency is other than euro are translated into

euro at the exchange rates prevailing at the end of the

reporting period.

The income and expenses of these foreign operations are

translated into euro at the average exchange rates for the

reporting period. The exchange differences arising from

translation for consolidation are recognized as translation

differences in other comprehensive income. On disposal of a

foreign operation, the cumulative amount of translation

differences relating to that foreign operation is reclassified to

profit or loss.

1.3. 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 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. 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 subsequent periods.

The accounting matters listed below are determined to involve

the most difficult, subjective or complex judgments, or are

considered as major sources of estimation uncertainty that may

have a significant risk of resulting in a material adjustment to

the carrying amounts of assets and liabilities within the next

financial year. Please refer to the specific notes for further

information on the key accounting estimates and judgments.

Key accounting<br><br>estimates and judgments	Note
Judgment related to recognition<br><br>of deferred tax assets	2.5. Income taxes
Judgment related to classification<br><br>of Submarine Networks as a<br><br>discontinued operation	2.6. Discontinued<br><br>operations
Estimate of pension and other<br><br>post-employment benefit<br><br>obligations	3.4. Pensions and other<br><br>post-employment benefits
Judgment related to the<br><br>determination and fair value<br><br>measurement of intangible assets<br><br>in business combination	6.2. Acquisitions

1.4. New and amended standards and

interpretations

On 1 January 2025, Nokia adopted the following amendments

to the accounting standards issued by the IASB and endorsed by

the EU:

▪Amendments to IAS 21 The Effects of Changes in Foreign

Exchange Rates: Lack of Exchangeability

The amendments had no material impact on the measurement,

recognition or presentation of any items in Nokia’s consolidated

financial statements for 2025.

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, except for IFRS 18 Presentation and

Disclosure in Financial Statements.

| 132 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

IFRS 18, which was published in April 2024 and will be effective

for annual periods beginning on or after 1 January 2027, will

replace IAS 1 Presentation of Financial Statements.

The objective of IFRS 18 is to enhance the comparability of

financial statements, particularly the income statement,

between companies, improve the transparency and

understandability of non-GAAP measures, and ensure useful

disaggregation of information in the financial statements. To

enable this, IFRS 18 introduces new requirements for

presentation within the income statement, including specified

totals and subtotals and classification of all income and

expenses into one of five categories: operating, investing,

financing, income taxes and discontinued operations, whereof

the first three are new.

Furthermore, the standard requires disclosure of newly defined

management-defined performance measures and aggregation

and disaggregation of financial information based on the

identified ‘roles’ of the primary financial statements and the

notes. In conjunction with the issue of IFRS 18, narrow-scope

amendments have been made to IAS 7 Statement of Cash Flows,

including changing the starting point for determining cash flows

from operations under the indirect method, from ‘profit or loss’

to ‘operating profit or loss’.

Even though IFRS 18 is not changing the recognition and

measurement requirements, the standard is expected to

significantly change how Nokia presents its consolidated

financial statements, particularly the income statement,

statement of cash flows, and notes to the financial statements.

Nokia is currently assessing the impact the adoption will have on

its consolidated financial statements. To date, the following

potential impacts have been identified:

▪Although the adoption of IFRS 18 will have no impact on its

net profit, Nokia expects that grouping items of income and

expenses in the income statement into the new categories

will impact how operating profit is determined. Foreign

exchange differences as well as interest income and

expenses currently aggregated in financial income and

expenses will need to be disaggregated, with some gains or

losses to be presented within the operating category.

Foreign exchange gains and losses as well as interest income

and expenses will be classified in the category where the

related income and expense from the underlying item is

classified.

▪The line items presented on the primary financial

statements might change as a result of the application of

the concept of “useful structured summary” and the

enhanced principles on aggregation and disaggregation.

Nokia does not expect there to be a significant change in the

information that is currently disclosed in the notes because

the requirement to disclose material information remains

unchanged; however, the way in which the information is

grouped might change as a result of the refined

aggregation/disaggregation principles.

▪New disclosures for management-defined performance

measures (MPMs) will be added. In brief, an MPM refers to a

subtotal of income and expenses an entity uses in its

financial communications outside financial statements which

has not been defined in IFRS Accounting Standards. To

improve transparency around these measures, IFRS 18

requires entities to disclose information about all of its

MPMs in a single note, including how the measure is

calculated, how it provides useful information and a

reconciliation to the most comparable subtotal specified by

IFRS Accounting Standards.

▪From the statement of cash flows perspective, the starting

point for calculating cash flows from operating activities will

change to operating profit. Additionally, there will be

changes to how interest received and interest paid are

presented. Interest paid will be presented as financing cash

flows and interest received as investing cash flows, which is

a change from current presentation as part of operating

cash flows.

Nokia will apply IFRS 18 from its mandatory effective date of

1 January 2027. As retrospective application is required, the

comparative information for 2025 and 2026 will be restated

accordingly.

| 133 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Section 2 | | --- |

Results for

the year

This section provides details of

items presented in the income

statement including disaggregation

of net sales by region and

customer type, results of Nokia’s

operating segments, and

information on operating expenses

and other operating income.

Additionally, this section contains

details of financial income and

expenses and income taxes, as well

as the results of discontinued

operations. The calculation of

earnings per share is presented at

the end of this section.

2.1. Net sales

Accounting policies

Nokia accounts for a contract with a customer when the

contract has been approved in writing, which is generally

when both parties are committed to perform their respective

obligations, the rights, including payment terms, regarding

the goods and services to be transferred can be identified,

the contract has commercial substance, and collection of the

consideration to which Nokia expects to be entitled is

probable. Management considers only legally enforceable

rights in evaluating the accounting for contracts with

customers. As such, frame agreements that do not create

legally enforceable rights and obligations are accounted for

upon issuance of subsequent legally binding purchase orders

under the frame agreements.

A contract modification or a purchase order is accounted for

as a separate contract if the scope of the contract increases

by additional distinct goods or services, and the price of the

contract increases by an amount that reflects the standalone

selling price of those additional goods or services. If the

additional goods or services are distinct but not sold at a

standalone selling price, the contract modification is

accounted for prospectively. If the additional goods or

services are not distinct, the modification is accounted for

through a cumulative catch-up adjustment.

Nokia recognizes revenue from contracts with customers to

reflect the transfer of promised goods and services to

customers for amounts that reflect the consideration to

which Nokia expects to be entitled in exchange for those

goods and services. The consideration may include variable

amounts, such as volume discounts and sales-based or

usage-based royalties, which Nokia estimates based on the

most likely amount. Nokia includes variable consideration into

the transaction price only to the extent that it is highly

probable that a significant revenue reversal will not occur.

The transaction price also excludes amounts collected on

behalf of third parties.

If the timing of payments provides either the customer or

Nokia with a significant benefit of financing, the transaction

price is adjusted for the effect of financing and the related

interest revenue or interest expense is presented separately

from revenue. As a practical expedient, Nokia does not

account for financing components if, at contract inception,

the consideration is expected to be received within one year

before or after the goods or services have been transferred

to the customer.

Nokia enters into contracts with customers consisting of any

combination of hardware, services and intellectual property.

Hardware and software sold by Nokia includes warranty, which

can either be assurance-type for repair of defects and

replacement of hardware recognized as a centralized

warranty provision, or service-type for scope beyond the

repair of defects or for a time period beyond the standard

assurance-type warranty period and considered as a separate

performance obligation within the context of the contract.

The associated revenue recognized for such contracts

depends on the nature of the underlying goods and services

provided. The promised goods or services in the contract

might include sale of goods, license of intellectual property

and grant of options to purchase additional goods or services

that may provide the customer with a material right. Nokia

conducts an assessment at contract inception to determine

which promised goods and services in a customer contract

are distinct and accordingly identified as performance

obligations.

The standalone selling price of each performance obligation is

determined by considering factors such as the price of the

performance obligation if sold on a standalone basis and the

expected cost of the performance obligation plus a

reasonable margin when price references are not available.

The portion of the transaction price allocated to each

performance obligation is recognized when the revenue

recognition criteria for that performance obligation have

been met.

| 134 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Nokia allocates the transaction price to each distinct

performance obligation on the basis of their standalone

selling prices, relative to the overall transaction price. If a

standalone selling price is not observable, it is estimated. The

transaction price may include a discount or a variable amount

of consideration that is generally allocated proportionately to

all performance obligations in the contract unless Nokia has

observable evidence that the entire discount relates to only

one or more, but not all, performance obligations in a

contract. The amount of revenue recognized is the amount

allocated to the satisfied performance obligation based on

the relative standalone selling prices. A performance

obligation may be satisfied at a point in time or over time.

As described in Note 4.5. Trade receivables and other

customer-related balances, Nokia presents its customer

contracts in the statement of financial position as either a

contract asset or a contract liability, depending on the

relationship between Nokia’s performance and the

customer’s payment for each individual contract.

Sale of products

Nokia manufactures and sells a range of networking

equipment, covering the requirements of network operators.

Revenue for these products is recognized when control of the

products has transferred, the determination of which may

require judgment. Typically, for standard equipment sales,

control transfers upon delivery. For more complex solutions,

control generally transfers upon acceptance.

In some arrangements, mainly within the Submarine Networks

business which is presented as a discontinued operation and was

sold in 2024, Nokia’s performance does not create an asset with

an alternative use and Nokia recognizes revenue over time using

the output method, which faithfully depicts the manner in which

the asset is transferred to the customer as well as Nokia’s

enforceable rights to payment for the work completed to date,

including margin. The output measure selected by Nokia for each

contract may vary depending on the nature of the contract.

Sale of services

Nokia provides services related to the provision of networking

equipment, ranging from managing a customer’s network and

product maintenance services to network installation,

integration and optimization. Revenue for each separate service

performance obligation is recognized as or when the customer

obtains the benefits of Nokia’s performance. Service revenue is

recognized over time for managed and maintenance services, as

in these cases Nokia performs throughout a fixed contract term

and the customer simultaneously receives and consumes the

benefits as Nokia performs. In some cases, Nokia performs

services that are subject to customer acceptance where revenue

is recognized when the customer acceptance is obtained.

Sale of intellectual property licenses

Nokia provides its customers with licenses to intellectual

property (IP) owned by Nokia by granting software licenses and

rights to benefit from Nokia’s IP in their products. When a

software license is sold, revenue is recognized upon delivery or

acceptance of the software, as Nokia has determined that each

software release is distinct, and the license is granted for

software as it exists when the control transfers to the customer.

When Nokia grants customers a license to use IP owned by

Nokia, the associated license fee revenue is recognized in

accordance with the substance of the relevant agreements. In

the majority of contracts, Nokia retains obligations to

continue to develop and make available to the customer the

latest IP in the licensed assets during the contract term, and

therefore revenue is recognized on a straight-line basis over

the period during which Nokia is expected to perform.

Recognition of the revenue on a straight-line basis over the

term of the license is considered the most faithful depiction of

Nokia’s satisfaction of the performance obligation as the IP

being licensed towards the customer includes new inventions

patented by Nokia that are highly interdependent and

interrelated and created through the course of continuous

research and development (R&D) efforts that are relatively

stable throughout the year. In some contracts, Nokia has no

remaining obligations to perform after granting a license to the

initial IP, and licensing fees are non-refundable. In these cases,

revenue is recognized at the beginning of the license term.

| 135 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Revenue disaggregation

Management has determined that Nokia’s geographic areas are

considered as the primary determinants to depict how the

nature, amount, timing and uncertainty of revenue and cash

flows are affected by economic factors. Nokia’s primary

customer base consists of companies that operate on a

country-specific or a regional basis. Although Nokia’s

technology cycle is similar around the world, different countries

and regions are inherently in a different stage of that cycle,

often influenced by macroeconomic conditions specific to those

countries and regions. In addition to Net sales to external

customers by region, the chief operating decision-maker, as

described in Note 2.2. Segment information, also reviews

Segment net sales by aggregated regions and Net sales by

customer type disclosed in this note.

Each reportable segment, as described in Note 2.2. Segment

information, consists of customers that operate in all

geographic areas. No reportable segment has a specific revenue

concentration in any geographic area other than Nokia

Technologies, which is included within Europe.

Net sales to external customers by region

Net sales to external customers by region are based on the

location of the customer, except for Nokia Technologies IPR and

licensing net sales which are allocated to Europe.

EURm	2025	2024	2023
Americas	6 985	6 276	6 779
Latin America	784	895	1 046
North America	6 201	5 381	5 733
APAC	4 639	4 549	6 436
Greater China	913	1 134	1 303
India	1 534	1 373	2 842
Rest of APAC	2 192	2 042	2 291
EMEA	8 265	8 395	7 923
Europe	6 165	6 362	5 873
Middle East & Africa	2 100	2 033	2 050
Total	19 889	19 220	21 138

Segment net sales by region

EURm	2025	2024	2023
Network Infrastructure	7 986	6 518	6 917
Americas	3 688	2 726	2 813
APAC	1 648	1 426	1 580
EMEA	2 650	2 366	2 524
Cloud and Network Services(1)	2 606	2 589	2 728
Americas	1 120	1 153	1 263
APAC	529	517	511
EMEA	957	919	954
Mobile Networks(1)	7 806	8 158	10 289
Americas	2 182	2 396	2 661
APAC	2 464	2 593	4 322
EMEA	3 160	3 169	3 306
Nokia Technologies	1 501	1 928	1 085
Group Common and Other(2)	(10)	27	119
Total	19 889	19 220	21 138

(1)In 2025, Managed Services business was moved from Cloud and Network Services

segment into Mobile Networks segment. Comparative financial information for

2024 and 2023 has been recast accordingly. Refer to Note 2.2. Segment

information.

(2)Includes eliminations of inter-segment revenues.

Net sales by customer type

EURm	2025	2024	2023
Telecom providers	15 313	15 085	17 652
AI & Cloud and Mission Critical<br><br>Enterprise & Defense	3 085	2 180	2 282
Licensees	1 501	1 928	1 085
Other(1)	(10)	27	119
Total	19 889	19 220	21 138

(1)In 2025, includes eliminations of inter-segment revenues, unallocated items and

certain other items. In 2024 and 2023, includes net sales of Radio Frequency

Systems (RFS), which was managed as a separate entity, and certain other items,

such as eliminations of inter-segment revenues. RFS net sales also include

revenue from telecom providers and AI & Cloud and Mission Critical Enterprise &

Defense.

Order backlog

At 31 December 2025, the aggregate amount of the transaction

price allocated to partially or wholly unsatisfied performance

obligations arising from fixed contractual commitments

amounted to EUR 19.5 billion (EUR 20.0 billion in 2024).

Management has estimated that these unsatisfied performance

obligations will be recognized as revenue as follows:

	2025	2024
Within 1 year	57%	53%
2-3 years	28%	27%
More than 3 years	15%	20%
Total	100%	100%

The estimated timing of the satisfaction of these performance

obligations is subject to change owing to factors beyond Nokia’s

control such as customer and network demand, market

conditions and, in some cases, restrictions imposed by the

weather or other factors impacting project logistics. Revenue

recognized in the reporting period from performance

obligations satisfied (or partially satisfied) in previous periods

(for example, due to changes in transaction price) was not

material.

| 136 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

2.2. Segment information

Accounting policies

Nokia has four operating and reportable segments for

financial reporting purposes: (1) Network Infrastructure,

(2) Cloud and Network Services, (3) Mobile Networks and

(4) Nokia Technologies. In addition, Nokia provides net

sales disclosure for the following business units within the

Network Infrastructure segment: (i) Optical Networks, (ii) IP

Networks and (iii) Fixed Networks.

The President and CEO is the chief operating decision-

maker monitoring the operating results of segments for

the purpose of assessing performance and making

decisions about resource allocation. Key financial

performance measures of the segments comprise

primarily net sales and segment operating profit. The

evaluation of segment performance and allocation of

resources is primarily based on segment operating profit

which the management believes is the most relevant

measure for this purpose. Segment operating profit

excludes intangible asset amortization and other purchase

price fair value adjustments, goodwill impairments,

restructuring-related charges and certain other items of

income and expenses that may not be indicative of the

business operating results.

Accounting policies of the segments are the same as

those for the Group except for the aforementioned items

of income and expenses that are not allocated to the

segments. Inter-segment revenues and transfers are

accounted for as if the revenues were to third parties, that

is, at current market prices.

Segment descriptions

Network Infrastructure

The Network Infrastructure segment serves AI & Cloud

customers, telecommunications providers and mission critical

enterprises globally. It comprises the following business units:

(i) Optical Networks, which provides optical transport networks

for metro, regional and long-haul application; (ii) IP Networks,

which provides IP routing and data center switching; (iii) Fixed

Networks, which features solutions in fiber broadband, optical

LAN, automation and AI, in-home Wi-Fi and related software

solutions and professional services.

On 28 February 2025, Nokia completed the acquisition of

Infinera, a San Jose based global supplier of innovative open

optical networking solutions and advanced optical

semiconductors. Nokia has reported the acquired business as

part of its Optical Networks business unit in its Network

Infrastructure segment as of the closing of the transaction.

Refer to Note 6.2. Acquisitions for more information on the

acquisition and its impact on Nokia’s financial position and

performance.

Cloud and Network Services

Cloud and Network Services segment provides open, fully

automated, and scalable software and solutions that accelerate

the journey of telecom providers and AI & Cloud and mission

critical enterprises to autonomous networks and new value

creation.

Cloud and Network Services segment invests in technologies

that are critical to our customers’ growth: 5G core, secure

autonomous networks, private wireless and industrial edge, and

network APIs. Delivered in a secure, Software-as-a-Service first

model, these solutions help customers capture the

opportunities of digitalization, AI & Cloud.

Mobile Networks

The Mobile Networks segment creates products and services

covering all mobile technology generations. Its portfolio

includes products for radio access networks (RAN) and

microwave radio (MWR) links for transport networks, and

solutions for network management, as well as network planning,

optimization, network deployment and technical support

services.

Nokia Technologies

Nokia Technologies segment conducts cellular, multimedia and

WiFi research and standardization, protects Nokia’s innovation

by securing patents and managing Nokia’s patent portfolio and

monetizes Nokia’s innovation through patent licensing. The

majority of net sales and related costs and expenses

attributable to licensing and patenting is recorded in Nokia

Technologies, while each segment separately records its own

research and development expenses.

Group Common and Other

Despite not being a reportable segment, Nokia also provides

segment-level information for Group Common and Other.

Group Common and Other includes certain corporate-level and

centrally managed expenses and revenues. Radio Frequency

Systems, which was managed as a separate entity, was included

in Group Common and Other until it was substantially divested

in 2024.

Changes in reporting structure in 2025

In 2025, Nokia made the following changes to its reporting

structure.

Managed Services business was moved from Cloud and Network

Services segment into Mobile Networks segment. The Managed

Services business provides outsourced network management of

multi-vendor RAN networks for operators. As the Cloud and

Network Services segment is increasingly transitioning towards

cloud-native software sales, “as-a-service” product offerings

and helping customers to monetize networks through API's,

Nokia believes that Managed Services is more aligned and fits

better with its Mobile Networks segment. Comparative financial

information has been recast accordingly.

Nokia changed the presentation of gains and losses from

venture fund investments, including the changes in fair value

and the fund management fees, from selling, general and

administrative expenses and other operating income to financial

income. The comparative financial information for the Nokia

Group, and Group Common and Other where the results of

venture fund investments had previously been included, has

been recast accordingly.

| 137 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Segment results | Cloud and Network Services | Mobile Networks | Nokia Technologies | Group Common and Other | Eliminations and unallocated items(2) | Nokia Group | | --- | --- | --- | --- | --- | --- | --- | | m | | | | | | | | 2025 | | | | | | | | Net sales to external customers | 2 606 | 7 800 | 1 501 | 17 | (15) | 19 889 | | Net sales to other segments | — | 6 | — | — | (12) | — | | Cost of sales | (1 307) | (4 914) | — | (21) | (288) | (11 230) | | Research and development expenses | (567) | (2 076) | (309) | (126) | (241) | (4 855) | | Selling, general and administrative expenses | (421) | (687) | (149) | (243) | (588) | (3 073) | | Other operating income and expenses | 27 | 91 | 16 | — | 5 | 154 | | Operating profit/(loss) | 338 | 220 | 1 059 | (373) | (1 139) | 885 | | Share of results of associated companies and joint ventures | — | 8 | 3 | — | — | 19 | | Financial income and expenses | | | | | | 11 | | Profit before tax | | | | | | 915 | | Other segment items | | | | | | | | Depreciation and amortization | (64) | (346) | (40) | (18) | (445) | (1 119) | | 2024 | | | | | | | | Net sales to external customers | 2 588 | 8 154 | 1 928 | 33 | — | 19 220 | | Net sales to other segments | 1 | 4 | — | 1 | (7) | — | | Cost of sales | (1 432) | (4 939) | (2) | (29) | (173) | (10 356) | | Research and development expenses | (550) | (2 160) | (250) | (131) | (214) | (4 512) | | Selling, general and administrative expenses | (444) | (756) | (163) | (227) | (467) | (2 872) | | Other operating income and expenses | 43 | 149 | 1 | 4 | 247 | 490 | | Operating profit/(loss) | 206 | 452 | 1 514 | (349) | (614) | 1 970 | | Share of results of associated companies and joint ventures | 7 | 1 | (1) | — | — | 7 | | Financial income and expenses | | | | | | 114 | | Profit before tax | | | | | | 2 091 | | Other segment items | | | | | | | | Depreciation and amortization | (67) | (377) | (32) | (16) | (314) | (973) | | 2023 | | | | | | | | Net sales to external customers | 2 727 | 10 283 | 1 085 | 124 | — | 21 138 | | Net sales to other segments | 1 | 6 | — | 6 | (11) | — | | Cost of sales | (1 546) | (6 762) | — | (136) | (141) | (12 592) | | Research and development expenses | (572) | (2 016) | (224) | (119) | (134) | (4 277) | | Selling, general and administrative expenses | (466) | (850) | (140) | (201) | (431) | (2 863) | | Other operating income and expenses | 50 | 122 | 13 | 8 | 41 | 327 | | Operating profit/(loss) | 194 | 783 | 734 | (318) | (676) | 1 733 | | Share of results of associated companies and joint ventures | 7 | (30) | 12 | — | (28) | (39) | | Financial income and expenses | | | | | | (225) | | Profit before tax | | | | | | 1 469 | | Other segment items | | | | | | | | Depreciation and amortization | (74) | (373) | (39) | (14) | (341) | (1 012) |

All values are in Euros.

(1)In 2025, includes Optical Networks net sales of EUR 3 019 million (EUR 1 636 million in 2024 and EUR 1 942 million in 2023), IP Networks net sales of EUR 2 594 million (EUR 2 583 million in 2024 and EUR 2 606 million in 2023) and Fixed Networks net sales of EUR 2 373 million

(EUR 2 299 million in 2024 and EUR 2 369 million in 2023).

(2)For details of unallocated items, refer to the Reconciliation of total segment financial information to the Group financial information table in this note.

| 138 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Reconciliation of total segment financial information to the Group financial information

EURm	Net sales	Cost of sales	Research and<br><br>development<br><br>expenses	Selling, general<br><br>and administrative<br><br>expenses	Other operating<br><br>income and<br><br>expenses	Operating<br><br>profit
2025
Total segments(1)	19 916	(10 942)	(4 614)	(2 485)	149	2 024
Restructuring and associated charges	—	(148)	(137)	(191)	(2)	(478)
Amortization and depreciation of acquired intangible assets<br><br>and property, plant and equipment	—	(5)	(81)	(358)	—	(444)
Release of acquisition-related fair value adjustments to<br><br>deferred revenue and inventory	(15)	(73)	—	—	—	(88)
Provision for contractual claims	—	(66)	—	—	—	(66)
Other(2)	(12)	4	(23)	(39)	7	(63)
Total reconciling items	(27)	(288)	(241)	(588)	5	(1 139)
Total Group	19 889	(11 230)	(4 855)	(3 073)	154	885
2024
Total segments(1)	19 227	(10 183)	(4 298)	(2 405)	243	2 584
Restructuring and associated charges	—	(155)	(135)	(145)	(10)	(445)
Amortization of acquired intangible assets	—	—	(20)	(294)	—	(314)
Divestment of associates	—	—	—	—	190	190
Impairment and write-off of assets, net of reversals	—	(25)	(58)	(6)	—	(89)
Disposal of businesses	—	—	—	—	67	67
Other(2)	(7)	7	(1)	(22)	—	(23)
Total reconciling items	(7)	(173)	(214)	(467)	247	(614)
Total Group	19 220	(10 356)	(4 512)	(2 872)	490	1 970
2023
Total segments(1)	21 149	(12 451)	(4 143)	(2 432)	286	2 409
Restructuring and associated charges	—	(151)	(61)	(138)	(6)	(356)
Amortization of acquired intangible assets	—	—	(49)	(292)	—	(341)
Other(2)	(11)	10	(24)	(1)	47	21
Total reconciling items	(11)	(141)	(134)	(431)	41	(676)
Total Group	21 138	(12 592)	(4 277)	(2 863)	327	1 733

(1)Segments’ net sales and cost of sales include inter-segment net sales and cost of sales.

(2)Includes elimination of inter-segment net sales and cost of sales.

Information by geographies and customer

concentration

Net sales to external customers by country

EURm	2025	2024	2023
Finland	1 615	2 060	1 192
United States	5 871	5 032	5 328
India	1 528	1 366	2 832
Great Britain	683	635	757
Other	10 192	10 127	11 029
Total	19 889	19 220	21 138

Net sales to external customers by country are based on the

location of the customer, except for Nokia Technologies IPR and

licensing net sales which are allocated to Finland.

Major customers

In 2025, 2024 and 2023 no single customer represented more

than 10% of net sales.

Non-current assets by country

EURm	2025	2024
Finland	1 658	1 476
United States	5 736	4 493
France	1 504	1 647
Other	987	1 042
Total	9 885	8 658

Non-current assets consists of goodwill, other intangible assets,

property, plant and equipment and right-of-use assets.

| 139 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

2.3. Operating expenses and other

operating income

Accounting policies

Nokia presents its income statement based on the

function of expenses as it considers this to provide more

relevant information about its financial performance.

Information about the nature of expenses is provided in

the notes. Certain items of income and expenses that

Nokia considers to be related to its operating activities but

not belonging to any specific functions, are presented as

other operating income and expenses.

Government grants received as compensation for

expenses incurred are recognized as a reduction of the

related expenses except for certain non-recurring grants

that are recognized as other operating income.

Government grants received in the form of R&D tax credits

are recognized as a reduction of R&D expenses if the tax

credit relates to the R&D expenditures incurred by Nokia

and the tax credit is reimbursed in cash by the government

in cases where Nokia is not able to offset it against its

income tax payable. R&D tax credits that do not meet both

conditions are recognized as income tax benefit.

Operating expenses by nature

EURm	2025	2024	2023
Personnel expenses	7 831	7 563	7 294
Material and customer contract<br><br>related expenses	8 609	7 660	9 947
Depreciation and amortization	1 119	973	1 012
IT services	370	370	388
Impairment charges	18	97	24
Other(1)	1 099	972	964
Total	19 046	17 635	19 629

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund

investments from selling, general and administrative expenses and other

operating income to financial income. The comparative amounts for 2024 and

2023 have been recast accordingly.

Operating expenses include government grant income and R&D

tax credits of EUR 186 million (EUR 160 million in 2024 and

EUR 160 million in 2023) most of which have been recognized as

a deduction against research and development expenses.

Other operating income (1)

EURm	2025	2024	2023
Gain on sale of property, plant<br><br>and equipment	22	95	139
Gain on sale of associated<br><br>companies	—	192	—
Gain on sale of businesses	—	70	29
Other	20	28	56
Total	42	385	224

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund

investments from selling, general and administrative expenses and other

operating income to financial income. The comparative amounts for 2024 and

2023 have been recast accordingly.

Other operating expenses

EURm	2025	2024	2023
Changes in provisions	4	(8)	37
Expected credit losses on trade<br><br>receivables(1)	45	122	(5)
Foreign exchange gains on<br><br>hedging forecasted sales and<br><br>purchases	81	23	94
Other	(18)	(32)	(23)
Total	112	105	103

(1)In 2024, includes a decrease in loss allowance of EUR 111 million related to credit-

impaired trade receivables for which payments were received. Refer to Note 4.5.

Trade receivables and other customer-related balances.

2.4. Financial income and expenses

Financial income

EURm	2025	2024	2023
Interest income on financial<br><br>investments	134	269	199
Interest income on financing<br><br>components of other contracts	17	31	21
Net interest income on defined<br><br>benefit plans	203	176	188
(Losses)/gains from venture<br><br>funds⁽¹⁾	(66)	29	(72)
Other financial income(2)(3)	(31)	(71)	18
Total	257	434	354

(1)In 2025, Nokia changed the presentation of gains and losses from venture fund

investments from selling, general and administrative expenses and other

operating income to financial income. The comparative amounts for 2024 and

2023 have been recast accordingly.

(2)In 2025, includes an expense of EUR 49 million (expense of EUR 5 million in 2024

and expense of EUR 2 million in 2023) due to a change in the fair value of the

financial liability related to Nokia Shanghai Bell that was extinguished in 2025.

Refer to Note 5.2. Financial assets and liabilities.

(3)In 2025, includes EUR 3 million (EUR 79 million in 2024 and EUR 0 million in 2023)

fair value loss on equity investment in Vodafone Idea that was sold in April 2025.

Financial expenses

EURm	2025	2024	2023
Interest expense on interest-<br><br>bearing liabilities	(141)	(209)	(201)
Interest expense on financing<br><br>components of other contracts(1)	(43)	(86)	(126)
Interest expense on lease<br><br>liabilities	(35)	(31)	(27)
Net fair value losses on hedged<br><br>items under fair value hedge<br><br>accounting	(31)	(13)	(93)
Net fair value gains on hedging<br><br>instruments under fair value<br><br>hedge accounting	34	10	89
Net foreign exchange gains/<br><br>(losses)	2	16	(192)
Other financial expenses(2)	(32)	(7)	(29)
Total	(246)	(320)	(579)

(1)In 2025, includes EUR 22 million (EUR 63 million in 2024 and EUR 106 million in

2023) related to the sale of receivables.

(2)In 2025, there was no change in loss allowance (decrease in loss allowance of EUR

7 million in 2024 and increase in loss allowance of EUR 9 million in 2023) related to

credit-impaired customers financing-related loan receivables.

| 140 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

2.5. Income taxes

Accounting policies

Income tax expense comprises current tax and deferred tax.

Tax is recognized in the income statement except to the

extent that it relates to items recognized in other

comprehensive income, or directly in equity, in which case the

related tax is recognized in other comprehensive income or

equity, respectively.

Current taxes are calculated based on the results of the

Group companies in accordance with local tax laws and using

tax rates that are enacted or substantively enacted at the

reporting date. Corporate taxes withheld at the source of the

income on behalf of Group companies are accounted for as

income taxes when determined to represent a tax on net

income.

Deferred tax assets and liabilities are determined using the

balance sheet liability method for all temporary differences

arising between the tax bases of assets and liabilities and

their carrying amounts in the statement of financial position.

Deferred tax assets are recognized to the extent it is

probable that future taxable profit will be available against

which the unused tax losses, unused tax credits and

deductible temporary differences can be utilized in the

relevant jurisdictions. Deferred tax assets are assessed for

realizability at each reporting date. When facts and

circumstances indicate it is no longer probable that deferred

tax assets will be utilized, adjustments are made as

necessary.

Deferred tax liabilities are recognized for taxable temporary

differences, and for temporary differences that arise

between the fair value and the tax base of identifiable net

assets acquired in business combinations. Deferred tax

liabilities are not recognized if they arise from the initial

recognition of goodwill. Deferred tax liabilities are recognized

on taxable temporary differences associated with

investments in subsidiaries, associates and joint

arrangements, unless the timing of the reversal of the

temporary difference is controlled by Nokia, and it is probable

that the temporary difference will not reverse in the

foreseeable future.

Nokia applies the exception to recognizing and disclosing

information about deferred tax assets and liabilities related

to Pillar Two income taxes, as provided in the amendments to

IAS 12 issued in May 2023.

Deferred tax assets and deferred tax liabilities are measured

using the enacted or substantively enacted tax rates at the

reporting date that are expected to apply in the period when

the asset is realized or the liability is settled. Deferred tax

assets and liabilities are not discounted.

Deferred tax assets and deferred tax liabilities are offset for

presentation purposes when there is a legally enforceable

right to set off current tax assets against current tax

liabilities, and the deferred tax assets and deferred tax

liabilities relate to income taxes levied by the same taxation

authority on either the same taxable entity or different

taxable entities which intend either to settle current tax

liabilities and assets on a net basis, or realize the assets and

settle the liabilities simultaneously in each future period in

which significant amounts of deferred tax liabilities or

deferred tax assets are expected to be settled or recovered.

Nokia periodically evaluates positions taken in tax returns in

situations where applicable tax regulation is subject to

interpretation. The amounts of current and deferred tax

assets and liabilities are adjusted when it is considered

probable, i.e. more likely than not, that certain tax positions

may not be fully sustained upon review by tax authorities.

The amounts recorded are based on the most likely amount

or the expected value, depending on which method Nokia

expects to better predict the resolution of the uncertainty, at

each reporting date.

Critical accounting judgment

Nokia is subject to income taxes in the jurisdictions in

which it operates. Judgment is required in determining

current tax expense, uncertain tax positions, deferred tax

assets and deferred tax liabilities; and the extent to which

deferred tax assets can be recognized.

Estimates related to the recoverability of deferred tax

assets are based on forecast future taxable income and

tax planning strategies. Based on these estimates and

assumptions, at 31 December 2025, Nokia has

EUR 21 918 million (EUR 21 853 million in 2024) of unused

tax losses, unused tax credits and deductible temporary

differences for which no deferred tax assets are

recognized due to uncertainty of utilization. The majority

of the unrecognized deferred tax assets relate to France.

The utilization of deferred tax assets is dependent on

future taxable profit in excess of the profit arising from

the reversal of existing taxable temporary differences. The

recognition of deferred tax assets is based on the

assessment of whether it is probable that sufficient

taxable profit will be available in the future to utilize the

unused tax losses, unused tax credits and deductible

temporary differences before the unused tax losses and

unused tax credits expire. Recognition of deferred tax

assets involves judgment regarding the future financial

performance of the particular legal entity or tax group

that has recognized the deferred tax asset.

| 141 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Components of the income tax expense/benefit

EURm	2025	2024	2023
Current tax expense	(478)	(439)	(429)
Deferred tax benefit/(expense)	201	59	(391)
Total	(277)	(380)	(820)

Income tax reconciliation

Reconciliation of the difference between income tax computed at the statutory rate in Finland of

20% and income tax recognized in the income statement:

EURm	2025	2024	2023
Income tax expense at statutory rate	(183)	(418)	(294)
Permanent differences	51	149	146
Non-creditable withholding taxes	(39)	(44)	(38)
Income taxes for prior years	1	10	23
Effect of different tax rates of subsidiaries operating in other jurisdictions	(28)	(46)	(143)
Effect of deferred tax assets not recognized(1)	(58)	(44)	(533)
Benefit arising from previously unrecognized deferred tax assets	14	81	25
Net increase in uncertain tax positions	(23)	(29)	(15)
Change in income tax rates	(52)	(27)	32
Income taxes on undistributed earnings	40	(12)	(23)
Total	(277)	(380)	(820)

(1)In 2023, Nokia recognized a deferred tax expense and a decrease in deferred tax assets of EUR 0.4 billion due to an internal

transaction related to an operating model change that led to a remeasurement of deferred tax assets in Finland and the United

States.

Income tax liabilities and assets include a net liability of EUR 318 million (EUR 207 million in 2024)

relating to uncertain tax positions with inherently uncertain timing of cash outflows.

Prior period income tax returns for certain Group companies are under examination by local tax

authorities. Nokia has ongoing tax investigations in various jurisdictions, including Australia, Brazil,

China, France, India, Kenya, Mexico and United States. Nokia’s business and investments, especially

in emerging market countries, may be subject to uncertainties, including unfavorable or

unpredictable tax treatment. Management judgment and a degree of estimation are required in

determining the tax expense or benefit. Even though management does not expect that any

significant additional taxes in excess of those already provided for will arise as a result of these

examinations, the outcome or actual cost of settlement may vary materially from estimates.

Deferred tax assets and liabilities

Deferred tax assets and liabilities relate to the following:

	2025			2024
	Deferred	Deferred	Net	Deferred	Deferred	Net
EURm	tax assets	tax liabilities	balance	tax assets	tax liabilities	balance
Tax losses carried forward and<br><br>unused tax credits	1 034	—		1 019	—
Undistributed earnings	—	(167)		—	(213)
Intangible assets and property,<br><br>plant and equipment	2 968	(294)		2 957	(152)
Right-of-use assets	—	(194)		—	(131)
Defined benefit pension assets	—	(1 913)		—	(2 106)
Other non-current assets	20	(12)		24	(17)
Inventories	198	(5)		148	(12)
Other current assets	128	(37)		160	(69)
Lease liabilities	188	—		137	—
Defined benefit pension and<br><br>other post-employment<br><br>liabilities	781	—		917	—
Other non-current liabilities	7	(1)		8	—
Provisions	330	(47)		254	(75)
Other current liabilities	335	(84)		287	(106)
Other temporary differences	39	(23)		34	(27)
Total before netting	6 028	(2 777)	3 251	5 945	(2 908)	3 037
Netting of deferred tax assets<br><br>and liabilities	(2 385)	2 385	—	(2 346)	2 346	—
Total after netting	3 643	(392)	3 251	3 599	(562)	3 037

Nokia has undistributed earnings of EUR 433 million (EUR 377 million in 2024) for which a deferred

tax liability has not been recognized as these earnings will not be distributed in the foreseeable

future.

The Finnish Government announced changes to the corporate income tax regime that could see the

corporate income tax rate reduce from 20% to 18% starting from 1 January 2027. On the date of

issuing the financial statements, the legislation has not yet been enacted or substantively enacted.

If the legislative change is enacted as proposed, the change in the corporate income tax rate would

decrease Nokia's net deferred tax assets approximately by EUR 300 million resulting in

corresponding impact on income tax expense. The estimated impact of the proposed change is

based on temporary differences recognized at 31 December 2025.

Nokia continues to monitor the legislative process and will reflect the impact of the tax rate change

in the period in which it becomes substantively enacted.

| 142 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Movements in the net deferred tax balance during the year:

EURm	2025	2024	2023
1 January	3 037	3 148	3 502
Recognized in income statement, continuing operations	201	59	(391)
Recognized in income statement, discontinued operations	—	—	(3)
Recognized in other comprehensive income	(21)	(77)	51
Acquisitions through business combinations(1)	45	2	—
Disposals	—	(75)	—
Other	—	—	(3)
Translation differences	(11)	(20)	(8)
31 December	3 251	3 037	3 148

(1)In 2025, acquisitions through business combinations relates to the acquisition of Infinera. For more information, refer to Note 6.2.

Acquisitions.

In addition, at 31 December 2025, Nokia has unrecognized deferred tax assets of which the

majority relate to France. These deferred tax assets have not been recognized due to uncertainty

regarding their utilization. A significant portion of the French unrecognized deferred tax assets are

indefinite in nature and available against future French tax liabilities, subject to a limitation of 50%

of annual taxable profits.

The amount of temporary differences, tax losses carried forward and tax credits for which no

deferred tax asset was recognized due to uncertainty of utilization:

EURm	2025	2024
Temporary differences	2 071	1 810
Tax losses carried forward	19 530	19 770
Tax credits	317	273
Total	21 918	21 853

Expiry of tax losses carried forward and unused tax credits:

	2025			2024
EURm	Recognized	Unrecognized	Total	Recognized	Unrecognized	Total
Tax losses carried forward
Within 10 years	1 372	924	2 296	1 356	1 022	2 378
Thereafter	50	83	133	74	—	74
No expiry	1 870	18 523	20 393	1 972	18 748	20 720
Total	3 292	19 530	22 822	3 402	19 770	23 172
Tax credits
Within 10 years	130	295	425	126	254	380
Thereafter	167	9	176	45	4	49
No expiry	122	13	135	153	15	168
Total	419	317	736	324	273	597

Nokia continually evaluates the probability of utilizing its deferred tax assets and considers both

positive and negative evidence in its assessment. As the majority of the recognized deferred tax

assets relates to Finland, Nokia has considered the following factors in the assessment:

▪The recent years’ cumulative accounting and taxable profit in Finland;

▪Expectations regarding future financial performance in Finland; and

▪The relevant attributes underlying the deferred tax assets are generally not subject to expiry.

Nokia has established the pattern of material taxable and accounting profits in Finland and

continued to recognize deferred tax assets related to Finland. In its assessment, Nokia has not

applied any cut-off period, other than expiry under the relevant tax legislation. A significant portion

of the tax attributes for which the deferred tax assets relate to are indefinite in nature and

available fully against future Finnish tax liabilities. Due to the non-expiry of these assets, the

sensitivity of future profit projections affects mainly the period over which the deferred tax assets

are expected to be utilized. Nokia will continue to monitor the above factors related to Finland,

including in particular its actual profit record, in upcoming periods.

Income tax related to items of other comprehensive income

	2025			2024			2023
EURm	Gross	Tax	Net	Gross	Tax	Net	Gross	Tax	Net
Remeasurements of defined<br><br>benefit plans	(24)	7	(17)	408	(85)	323	(343)	61	(282)
Translation differences	(1 627)	(3)	(1 630)	537	8	545	(535)	7	(528)
Net investment hedges	111	(22)	89	(40)	8	(32)	135	(27)	108
Cash flow and other hedges	1	—	1	21	(3)	18	(61)	10	(51)
Financial assets at fair value<br><br>through other comprehensive<br><br>income	9	(2)	7	19	(5)	14	10	—	10
Other increase/(decrease), net	7	(1)	6	3	—	3	(4)	—	(4)
Total	(1 523)	(21)	(1 544)	948	(77)	871	(798)	51	(747)

OECD Pillar Two model rules

Nokia is within the scope of the OECD Pillar Two model rules, which introduced a global minimum

tax rate of 15% per jurisdiction. Pillar Two legislation has been enacted in Finland, the jurisdiction in

which Nokia is incorporated, and is effective from 1 January 2024.

Nokia has performed an analysis of the impact of the Pillar Two legislation and based on this

analysis, in 2025, the impact on income tax expense is immaterial. The main elements of this

analysis were the following:

▪Current understanding of the interpretation of the rules.

▪Applicability of the safe harbors provided for in the Pillar Two legislation.

▪Analysis and calculations of potential income tax expense in respect of jurisdictions not meeting

safe harbor tests.

| 143 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

2.6. Discontinued operations

Accounting policies

Non-current assets or disposal groups are classified as held for sale if their carrying amounts

will be recovered principally through a sale transaction rather than through continuing use. Non-

current assets or disposal groups classified as held for sale are measured at the lower of their

carrying amount and fair value less costs to sell. Non-current assets classified as held for sale,

or included in a disposal group classified as held for sale, are not depreciated or amortized.

Discontinued operation is reported when a component of Nokia, comprising operations and

cash flows that can be clearly distinguished both operationally and for financial reporting

purposes from the rest of Nokia, has been disposed of or is classified as held for sale, and that

component represents a major line of business or geographical area of operations or is part of

a single coordinated plan to dispose of a separate major line of business or geographical area

of operations. Profit or loss from discontinued operations is reported separately from income

and expenses from continuing operations in the consolidated income statement, with prior

periods presented on a comparative basis. Intra-group revenues and expenses between

continuing and discontinued operations are eliminated.

In June 2024, Nokia entered into an agreement to sell its wholly owned subsidiary Alcatel

Submarine Networks (ASN) to the French State. As a result, Nokia classified the assets and liabilities

of ASN as held for sale and recorded an impairment loss of EUR 514 million on the measurement of

ASN's net assets to fair value less costs to sell. Concurrently, the Submarine Networks business,

which was previously reported as part of Network Infrastructure operating segment, was classified

as a discontinued operation.

The sale was completed on 31 December 2024. Upon completion, Nokia recorded a gain of EUR 29

million related to the sale and received a cash consideration of EUR 98 million from the sale. In

2025, Nokia recorded an additional gain on sale of EUR 22 million related to purchase price

adjustments and ASN meeting certain financial targets, and received an additional cash

consideration from the sale amounting to EUR 40 million.

Nokia retained a 20% shareholding in ASN with board representation to ensure a smooth transition

until targeted exit, at which point it is planned for the French State to acquire Nokia’s remaining

interest. Nokia accounts for its remaining interest in ASN as an investment in an associated company.

Critical accounting judgment

Nokia classified its non-core standalone Submarine Networks business, a global provider of

submarine communication networks, as held-for-sale and a discontinued operation following

the announcement of its sale on 27 June 2024. For financial reporting purposes the

Submarine Networks business had been a separate cash-generating unit within the Network

Infrastructure reportable segment. Judgment was applied in determining that the Submarine

Networks business is a component of Nokia that represents a separate major line of business

which should be presented as a discontinued operation.

Results of discontinued operations

EURm	2025	2024	2023
Net sales	—	1 059	1 120
Expenses	—	(989)	(1 090)
Operating profit	—	70	30
Financial income and expenses	—	(7)	5
Impairment loss recognized on the remeasurement to fair value less<br><br>costs to sell	—	(514)	—
Gain on sale	22	29	—
Profit/(loss) from discontinued operations before tax	22	(422)	35
Income tax expense	—	(5)	(5)
Profit/(loss) from discontinued operations(1)	22	(427)	30

(1)Profit/loss from discontinued operations is attributable to the equity holders of the parent in its entirety.

Cash flows from discontinued operations

EURm	2025	2024	2023
Net cash flows from/(used in) operating activities	—	193	(44)
Net cash flows from/(used in) investing activities(1)	40	(188)	(59)
Net cash flows used in financing activities	—	(18)	(14)
Net cash flows from/(used in) discontinued operations	40	(13)	(117)

(1)Cash proceeds from the disposal of the Submarine Networks business, net of cash disposed of, are included in net cash flows

from/used in investing activities of discontinued operations.

| 144 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Reconciliation of gain on sale of Submarine Networks business

EURm	31 December 2024
Cash proceeds	98
Deferred cash consideration	30
Total consideration	128
Carrying amount of net assets on disposal	(170)
Cumulative other comprehensive income	64
Transaction costs	(25)
Fair value of retained interest in associate	32
Gain on sale before tax	29
Income tax	—
Gain on sale after tax	29

Carrying amount of assets and liabilities on disposal

EURm	31 December 2024
ASSETS
Property, plant and equipment	102
Deferred tax assets	80
Inventories	147
Trade receivables	99
Contract assets	293
Other current financial and firm commitment assets	98
Other assets	89
Cash and cash equivalents	227
Total assets	1 135
LIABILITIES
Lease liabilities	36
Provisions	46
Other financial and firm commitment liabilities	50
Trade payables	93
Contract liabilities	347
Accrued expenses related to customer projects	184
Other liabilities	209
Total liabilities	965
Net assets on disposal	170

2.7. Earnings per share

Accounting policies

Basic earnings per share is calculated by dividing the profit or loss attributable to equity

holders of the parent by the weighted average number of shares outstanding during the year.

Diluted earnings per share is calculated by adjusting the profit or loss attributable to equity

holders of the parent, and the weighted average number of shares outstanding, for the

effects of all dilutive potential ordinary shares. Potential ordinary shares are excluded from

the calculation of diluted earnings per share when they are determined to be antidilutive.

m	2024	2023
Profit or loss attributable to equity holders of the parent
Continuing operations	1 704	635
Discontinued operations	(427)	30
Profit for the year	1 277	665
Number of shares (000s)
Weighted average number of shares outstanding	5 475 817	5 549 468
Effect of potentially dilutive shares
Performance shares	1 118	8 190
Restricted shares and other(1)	53 668	28 265
Total effect of potentially dilutive shares	54 786	36 455
Adjusted weighted average number of shares	5 530 603	5 585 923
(1)Includes the matching shares related to the employee share purchase plan.
Earnings per share,
Basic earnings per share
Continuing operations	0.31	0.11
Discontinued operations	(0.08)	0.01
Profit for the year	0.23	0.12
Diluted earnings per share
Continuing operations	0.31	0.11
Discontinued operations	(0.08)	0.01
Profit for the year	0.23	0.12

All values are in Euros.

| 145 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Section 3 | | --- |

Compensation

and benefits

This section provides information

on Nokia’s employee benefits

including remuneration of the

management and Board of

Directors. Employee benefits

comprise salaries and wages,

short-term cash incentives and

share-based payments, as well as

post-employment benefits in

accordance with the local

conditions and practices in the

countries in which Nokia operates.

Information about the

remuneration of the President and

CEO and Board of Directors is

provided in compliance with Finnish

Accounting Standards.

3.1. Summary of personnel expenses

EURm	2025	2024	2023
Salaries and wages(1)	6 269	6 163	5 859
Pensions and other post-<br><br>employment benefits
Defined contribution plans	261	242	249
Defined benefit plans(2)	167	157	155
Share-based payments	337	239	201
Social security costs	797	762	830
Total	7 831	7 563	7 294

(1)Includes termination benefits.

(2)Excludes amounts presented in financial income, refer to Note 3.4. Pensions and

Termination terms of President and CEO’s service agreement

The President and CEO, Justin Hotard, may terminate the

service agreement with 12 months’ notice, receiving salary and

benefits during the notice period or a lump sum equivalent, plus

any incentives vesting during the notice. As a general rule,

unvested equity awards are forfeited unless the Board decides

otherwise. If termination occurs due to Nokia’s material breach

of the agreement, the notice period may be reduced to two

months, and the CEO is entitled to severance equal to 12

months’ compensation including the notice period. In addition,

all his equity incentives vest, subject to any applicable

performance criteria, prorated until the expiry of the

agreement.

Nokia may terminate for cause without notice, with no

additional pay and forfeiture of unvested equity awards. For

termination without cause, the CEO receives 12 months’

compensation (incl. benefits and short-term incentives), with

unvested equity awards forfeited after the termination of the

agreement unless the Board decides otherwise. If termination

occurs within three months before or six months after a change

of control, the notice period may be reduced to three months

and the CEO receives 12 months’ remuneration and all his

equity incentives vest subject to performance and time

proration until the expiry of the agreement.

| 146 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Remuneration of the Board of Directors

The annual remuneration paid to the members of the Board of Directors, as decided by the Annual General Meetings in the respective years:

	2025			2024			2023
	Annual fee(1)<br><br>EUR	Meeting fees(2)<br><br>EUR	Shares received(3)<br><br>number	Annual fee(1)<br><br>EUR	Meeting fees(2)<br><br>EUR	Shares received(3)<br><br>number	Annual fee(1)<br><br>EUR	Meeting fees(2)<br><br>EUR	Shares received(3)<br><br>number
Sari Baldauf, Chair (4)(5)	465 000	10 000	41 478	465 000	10 000	52 993	465 000	10 000	47 427
Timo Ihamuotila, Vice Chair(5)	220 000	9 000	19 624	—	—	—	—	—	—
Søren Skou	—	2 000	—	220 000	14 000	25 072	225 000	14 000	22 948
Timo Ahopelto(4)(6)	210 000	10 000	18 732	210 000	10 000	23 932	210 000	10 000	21 418
Bruce Brown	—	—	—	—	—	—	—	5 000	—
Elizabeth Crain(4)(5)	220 000	12 000	19 624	220 000	12 000	25 072	215 000	15 000	21 928
Thomas Dannenfeldt(4)(7)	245 000	14 000	21 854	240 000	14 000	27 351	230 000	9 000	23 458
Pernille Erenbjerg(7)	200 000	—	17 840	—	—	—	—	—	—
Lisa Hook(5)(7)	210 000	12 000	18 732	210 000	14 000	23 932	200 000	17 000	20 399
Jeanette Horan	—	—	—	—	—	—	210 000	10 000	21 418
Edward Kozel	—	—	—	—	—	—	—	5 000	—
Mike McNamara (6)(7)	210 000	14 000	18 732	210 000	14 000	23 932	—	—	—
Thomas Saueressig(6)	195 000	14 000	17 394	195 000	14 000	22 223	195 000	14 000	19 889
Carla Smits-Nusteling	—	2 000	—	215 000	9 000	24 502	215 000	14 000	21 928
Kai Öistämö(5)(6)	215 000	10 000	19 178	205 000	10 000	23 362	205 000	10 000	20 908
Total	2 390 000	109 000		2 390 000	121 000		2 370 000	133 000

(1)Annual fees consist of Board member fees and Committee chair and member fees.

(2)Meeting fees include all meeting fees paid during the reported year.

(3)Approximately 40% of each Board member’s annual compensation is paid in Nokia shares purchased from the market, and the remaining approximately 60% is paid in cash.

(4)Annual fees in 2025 include EUR 30 000 for Thomas Dannenfeldt as Chair and EUR 15 000 for Timo Ahopelto, Sari Baldauf and Elizabeth Crain as members of the Personnel Committee.

(5)Annual fees in 2025 include EUR 20 000 for Elizabeth Crain as Chair and EUR 10 000 for Sari Baldauf, Lisa Hook, Timo Ihamuotila, and Kai Öistämö as members of the Strategy Committee.

(6)Annual fees in 2025 include EUR 20 000 for Kai Öistämö as Chair and EUR 10 000 for Timo Ahopelto, Mike McNamara and Thomas Saueressig as members of the Technology Committee.

(7)Annual fees in 2025 include EUR 30 000 for Thomas Dannenfeldt as Chair and EUR 15 000 for Pernille Erenbjerg, Lisa Hook and Mike McNamara as members of the Audit Committee.

| 147 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

3.3. Share-based payments

Accounting policies

Nokia offers three types of global share-based

compensation plans for employees: performance shares,

restricted shares and the employee share purchase plan.

All plans are equity-settled.

Employee services received and the corresponding

increase in equity are measured by reference to the fair

value of the equity instruments at the grant date,

excluding the impact of any non-market vesting

conditions. Plans that apply tranched vesting are

accounted for under the graded vesting model. Share-

based compensation plans are generally conditional on

continued employment as well as the fulfillment of any

performance conditions specified in the award terms. Until

the Nokia shares are delivered, the participants do not

have any shareholder rights, such as voting or dividend

rights, associated with the shares. The share grants are

generally forfeited if the employment relationship with

Nokia terminates prior to vesting. Share-based

compensation is recognized as an expense over the

relevant service periods.

Share-based payment expense

In 2025, the share-based payment expense recognized in the

income statement for continuing operations for all share-based

compensation plans amounted to EUR 337 million (EUR 239

million in 2024 and EUR 201 million in 2023).

Performance shares

In 2025, Nokia had outstanding performance shares from

grants made in 2022, 2023, 2024 and 2025. Grants made for

performance shares are targeted on a limited basis to senior

level employees and executives.

Performance share plans at 31 December 2025:

Plan	Performance<br><br>shares<br><br>outstanding<br><br>at target	Confirmed<br><br>payout<br><br>(% of target)	Performance<br><br>period	Settlement year
2022	—	0%	2022-2024	2025/2026
2023	12 529 600	110%	2023–2025	2026/2027
2024	17 534 756	—	2024–2026	2027/2028
2025	10 681 505	—	2025–2027	2028/2029

The 2022 Performance share grants have a three-year vesting

period where Nokia’s actual total shareholder return (ATSR) is

compared to the target total shareholder return to determine

the number of Nokia shares that will be delivered at settlement.

The 2022 Performance share grants do not include a minimum

payout guarantee.

The 2023 Performance share grants apply the ATSR

performance metric to two-thirds of the grant. For the

remaining one-third of the granted shares, the metrics are

either a service condition alone or a relative total shareholder

return (RTSR). RTSR grants measure Nokia’s share performance

against its peer group companies where minimum payout for

this metric requires Nokia to be at least in the 25th percentile

when compared with the peer group.

The 2024 and 2025 Performance share grants apply the

performance metrics to two-thirds of the grant. For the

remaining one-third of the granted shares, the metrics are

either a service condition or performance metrics. The

performance metrics of the 2024 and 2025 Performance share

grants are 50% RTSR, 40% Cumulative EPS targets adjusted for

non-recurring events, and 10% carbon emissions targets.

Restricted shares

In 2025, there were outstanding restricted shares from grants

made in 2022, 2023, 2024 and 2025. Nokia grants restricted

shares to selected employees as the primary method of equity

compensation. Restricted shares are Nokia shares that will be

delivered to eligible participants at a future point in time,

subject to the fulfillment of predetermined service conditions.

Restricted shares will either vest on the third anniversary of the

award or follow a tranche vesting schedule whereby each plan

vests in one or more tranches determined at the award date.

The restricted share grants are generally forfeited if the

employment relationship with Nokia terminates prior to vesting

of the applicable tranche or tranches.

Employee share purchase plan

Nokia offers a voluntary Employee Share Purchase Plan (ESPP)

to its employees. Participating employees make contributions

from their net salary to purchase Nokia shares on a monthly

basis during a 12-month savings period. Nokia delivers one

matching share for every two purchased shares the employee

holds at the end of the plan cycle. In 2025, 5 578 417 matching

shares were issued as a settlement to the participants of the

ESPP 2024 (7 455 343 matching shares issued under the 2023

Plan in 2024, and 6 726 190 matching shares issued under the

2022 Plan in 2023).

| 148 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Share-based payment plans by instrument

	Performance shares		Restricted shares
	Number of shares<br><br>outstanding at target	Weighted average grant<br><br>date fair value (EUR)	Number of shares<br><br>outstanding	Weighted average grant<br><br>date fair value (EUR)
1 January 2023	63 747 848		54 527 628
Granted	15 207 400	3.10	45 322 400	3.36
Forfeited	(3 916 744)		(1 998 801)
Vested(1)	(31 691 700)		(3 175 287)
31 December 2023	43 346 804		94 675 940
Granted	19 202 484	3.65	57 602 936	3.48
Forfeited	(3 589 329)		(5 471 235)
Vested(1)	(15 223 017)		(23 834 342)
31 December 2024	43 736 942		122 973 299
Granted(2)	10 818 188	4.73	97 037 127	4.37
Forfeited	(2 803 610)		(7 901 371)
Vested(1)	(11 005 659)		(62 570 770)
31 December 2025	40 745 861		149 538 285

(1)Vested performance shares at target are to be multiplied by the confirmed payout (% of target) to calculate the total number of Nokia shares settled.

(2)Number of granted restricted shares includes 39.4 million replacement share awards granted as part of the acquisition of Infinera. For more information on the replacement

awards as part of the purchase consideration, refer to Note 6.2. Acquisitions.

Estimation of grant date fair values

Plan	Grant date fair value
ATSR	Estimated considering the dividend-adjusted Nokia share price at the end of the performance period of the plan and the target payout<br><br>levels set for the plan.
RTSR	Estimated considering a combination of the dividend-adjusted Nokia share price compared with benchmark companies’ share prices at<br><br>the end of the performance period of the plan and the target payout levels set for the plan.
Restricted<br><br>Shares	Estimated using the grant date market price of the Nokia share less the present value of dividends expected to be paid during the<br><br>vesting period.

| 149 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

3.4. Pensions and other post-employment benefits

Accounting policies

Nokia has various post-employment plans in accordance with the local conditions and

practices in the countries in which it operates. Nokia’s defined benefit plans comprise pension

schemes as well as other benefit plans providing post-employment healthcare and life

insurance coverage to certain employee groups. Defined benefit plans expose Nokia to

various risks such as investment risk, interest rate risk, life expectancy risk, and regulatory/

compliance risk. The characteristics and extent of these risks vary depending on the legal,

fiscal and economic requirements in each country as well as the impact of global events. The

plans are generally funded through payments to insurance companies or contributions to

trustee-administered funds as determined by periodic actuarial calculations.

The costs of defined benefit plans are assessed using the projected unit credit method. The

defined benefit obligation is measured as the present value of the estimated future cash

outflows using interest rates on high-quality corporate bonds or government bonds with

maturities most closely matching expected payouts of benefits. The plan assets are measured

at fair value at the reporting date. Qualifying insurance contracts included within pension plan

assets are measured at fair value based upon the actuarial valuation of the underlying insured

liability. The liability or asset recognized in the statement of financial position is the present

value of the defined benefit obligation at the reporting date less the fair value of plan assets

adjusted for effects of any asset ceiling.

Actuarial valuations for defined benefit plans are performed annually or when a material plan

amendment, curtailment or settlement occurs. Service cost related to employees’ service in

the current period and past service cost resulting from plan amendments and curtailments, as

well as gains and losses on settlements, are presented in cost of sales, research and

development expenses or selling, general and administrative expenses. Net interest and

pension plan administration costs that are not considered in determining the return on plan

assets are presented in financial income and expenses. Remeasurements, comprising actuarial

gains and losses, the effect of the asset ceiling and the return on plan assets, excluding

amounts recognized in net interest, are recognized in other comprehensive income.

Remeasurements are not reclassified to profit or loss in subsequent periods.

In a defined contribution plan, Nokia’s legal or constructive obligation is limited to the amount

that it agrees to contribute to the plan. Nokia’s contributions to defined contribution plans,

multi-employer and insured plans are recognized in the income statement in the period to

which the contributions relate. If a pension plan is funded through an insurance contract

where Nokia does not retain any legal or constructive obligations, the plan is treated as a

defined contribution plan. All arrangements that do not fulfill these conditions are considered

defined benefit plans.

Defined benefit plans

Nokia’s most significant defined benefit plans are in the United States, Germany, and the United

Kingdom. Together, they account for 91% of Nokia’s total defined benefit obligation (92% in 2024)

and 89% of Nokia’s total fair value of plan assets (91% in 2024).

Summary of defined benefit balances at 31 December

EURm	Defined benefit<br><br>obligation	Fair value of<br><br>plan assets	Effects of<br><br>asset ceiling	Net defined<br><br>benefit balance
2025
United States, Pension	(8 971)	13 748	—	4 777
United States, OPEB	(1 228)	600	—	(628)
Germany	(1 891)	1 292	—	(599)
United Kingdom	(494)	697	—	203
Other	(1 209)	1 978	(89)	680
Total	(13 793)	18 315	(89)	4 433
2024
United States, Pension	(10 688)	16 188	—	5 500
United States, OPEB	(1 393)	701	—	(692)
Germany	(1 959)	1 240	—	(719)
United Kingdom	(529)	736	—	207
Other	(1 220)	1 858	(85)	553
Total	(15 789)	20 723	(85)	4 849

Funded status of defined benefit obligation:

EURm	2025	2024
Wholly funded	10 834	12 665
Partly funded	2 142	2 252
Unfunded	817	872
Total	13 793	15 789

| 150 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

United States

Nokia has significant defined benefit pension plans and a significant post-employment welfare

benefit plan (OPEB) providing post-employment healthcare benefits and life insurance coverage in

the United States.

Defined Benefit Pension Plans

The defined benefit pension plans include both traditional service-based programs and cash-

balance plans. Salaried, non-union-represented employees are covered by a cash-balance program.

All other legacy programs, including legacy service-based programs, were frozen by 31 December

For former employees who, when actively employed, were represented by a union, Nokia

maintained two defined benefit pension plans, both of which are traditional service-based

programs. On 31 December 2021, these two plans were merged. On 31 December 2025, the

remaining service-based plan for former union-represented employees was merged into the

service-based plan for non-union-represented employees.

Germany

Nokia maintains two primary plans in Germany which cover the majority of active employees: the

cash-balance plan Beitragsorientierter Altersversorgungs Plan (BAP) for the Group’s Nokia

employees and a similar cash-balance program (AVK Basis-/Matchingkonto) for the Group’s former

Alcatel-Lucent employees. Individual benefits are generally dependent on eligible compensation

levels, ranking within the Group and years of service. These plans are partially funded defined

benefit pension plans, the benefits being subject to a minimum return guaranteed by the Group.

The funding vehicle for the BAP is the NSN Pension Trust e.V. The trust is legally separate from the

Group and manages the plan assets in accordance with the respective trust agreements.

All other plans have been frozen or closed in prior years and replaced by the cash-balance plans.

Benefits are paid in annual installments, as monthly retirement pension, or as a lump sum on

retirement in an amount equal to accrued pensions and guaranteed interest.

United Kingdom

Nokia maintains one primary plan in the UK, “Nokia Retirement Plan for former NSN & ALU

employees”, which is the result of the 2019 merger of the legacy Nokia plan where the plan was

merged and members’ benefits were transferred to the legacy Alcatel-Lucent plan. The combined

plan consists of both money purchase sections with Guaranteed Minimum Pension (GMP) underpin

and final salary sections. All final salary sections are closed to future benefit accrual: the legacy

Nokia plan closed on 30 April 2012 and the legacy Alcatel-Lucent plan on 30 April 2018. Individual

benefits for final salary sections are dependent on eligible compensation levels and years of

service. For the money purchase sections with GMP underpin, individual benefits are dependent on

the greater of the value of GMP at retirement date and the pension value resulting from the

individual’s invested funds. Nokia engages the services of an external trustee service provider to

manage all investments for the combined pension plan. During 2024, Nokia completed a risk

transfer buy-out in the amount of EUR 178 million, with insurer Aviva, for certain beneficiaries

whose liability was covered by an existing insurance agreement.

In June 2025, the UK Government announced it would legislate a remedy for affected defined

benefit pension schemes, with regard to the implications of the ruling by the High Court in June

2023, and the dismissal of appeal by the Court of Appeal in July 2024, in the case of Virgin Media

Limited v NTL Pension Trustees II Ltd. Nokia’s UK Pension Trustee awaits further developments that

may impact this position from pending cases in UK courts that are expected in 2026. As of 31

December 2025, management has not identified any benefit uncertainties for which the potential

impact would need to be considered.

| 151 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Movements in the defined benefit obligation, fair value of plan assets and the impact of the asset ceiling limitation for the years ended 31 December

Defined benefit obligation	2025				2024
EURm	United States<br><br>pension	United States<br><br>OPEB	Other pension	Total	United States<br><br>pension	United States<br><br>OPEB	Other pension	Total
1 January	(10 688)	(1 393)	(3 708)	(15 789)	(11 325)	(1 471)	(4 072)	(16 868)
Current service cost	(80)	—	(59)	(139)	(86)	—	(62)	(148)
Interest expense	(483)	(66)	(134)	(683)	(509)	(67)	(142)	(718)
Past service cost	(6)	—	(22)	(28)	(12)	—	7	(5)
Settlements(1)	—	—	—	—	—	—	178	178
Total	(569)	(66)	(215)	(850)	(607)	(67)	(19)	(693)
Remeasurements:
(Loss)/gain from change in demographic assumptions	—	—	(2)	(2)	114	17	32	163
(Loss)/gain from change in financial assumptions	(217)	(31)	148	(100)	463	62	88	613
Experience gain/(loss)	48	(10)	(6)	32	94	27	(13)	108
Total	(169)	(41)	140	(70)	671	106	107	884
Translation differences	1 227	161	62	1 450	(664)	(87)	(32)	(783)
Contributions from plan participants	—	(78)	(4)	(82)	—	(76)	(4)	(80)
Benefits paid	1 228	200	215	1 643	1 237	212	272	1 721
Acquisitions through business combinations	—	—	(84)	(84)	—	—	—	—
Other	—	(11)	—	(11)	—	(10)	40	30
Total	2 455	272	189	2 916	573	39	276	888
31 December	(8 971)	(1 228)	(3 594)	(13 793)	(10 688)	(1 393)	(3 708)	(15 789)
Weighted average duration of the defined benefit obligation (in years)	7.3	8.0	9.5	7.9	9.1	10.3	10.1	9.5

(1)In 2024, the settlement relates to the transfer of a liability in the amount of EUR 178 million to insurer Aviva as part of a buy-out transaction in the UK.

| 152 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Fair value of plan assets | 2025 | | | | 2024 | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | EURm | United States pension | United States OPEB | Other pension | Total | United States pension | United States OPEB | Other pension | Total | | 1 January | 16 188 | 701 | 3 834 | 20 723 | 16 285 | 675 | 3 954 | 20 914 | | Interest income | 743 | 32 | 138 | 913 | 755 | 30 | 133 | 918 | | Administrative expenses and interest on asset ceiling | (21) | — | (5) | (26) | (18) | — | (5) | (23) | | Settlements(1) | — | — | — | — | — | — | (183) | (183) | | Total | 722 | 32 | 133 | 887 | 737 | 30 | (55) | 712 | | Remeasurements: | | | | | | | | | | Return on plan assets, excluding amounts included in interest income | (65) | 28 | 85 | 48 | (576) | 50 | 44 | (482) | | Total | (65) | 28 | 85 | 48 | (576) | 50 | 44 | (482) | | Translation differences | (1 859) | (79) | (47) | (1 985) | 990 | 41 | 41 | 1 072 | | Contributions: | | | | | | | | | | Employers | 25 | 4 | 26 | 55 | 27 | 3 | 25 | 55 | | Plan participants | — | 78 | 4 | 82 | — | 76 | 4 | 80 | | Benefits paid | (1 228) | (200) | (143) | (1 571) | (1 237) | (212) | (179) | (1 628) | | Acquisitions through business combinations | — | — | 73 | 73 | — | — | — | — | | Section 420 transfer(2) | (35) | 35 | — | — | (38) | 38 | — | — | | Other | — | 1 | 2 | 3 | — | — | — | — | | Total | (3 097) | (161) | (85) | (3 343) | (258) | (54) | (109) | (421) | | 31 December | 13 748 | 600 | 3 967 | 18 315 | 16 188 | 701 | 3 834 | 20 723 |

(1)In 2024, the settlement primarily relates to transfer of assets in the amount of EUR 178 million to insurer Aviva as part of a buy-out transaction in the UK.

(2)Refer to the Future cash flows section below for description of Section 420 transfers.

The impact of the asset ceiling limitation	2025				2024
EURm	United States<br><br>pension	United States<br><br>OPEB	Other pension	Total	United States<br><br>pension	United States<br><br>OPEB	Other pension	Total
1 January	—	—	(85)	(85)	—	—	(87)	(87)
Interest expense	—	—	(1)	(1)	—	—	(1)	(1)
Remeasurements:
Change in asset ceiling, excluding amounts included in interest expense	—	—	(2)	(2)	—	—	6	6
Translation differences	—	—	(1)	(1)	—	—	(3)	(3)
31 December	—	—	(89)	(89)	—	—	(85)	(85)	Net balances	2025	2024
---	---	---	---	---	---	---	---	---
EURm	United States<br><br>pension	United States<br><br>OPEB	Other pension	Total	United States<br><br>pension	United States<br><br>OPEB	Other pension	Total
31 December	4 777	(628)	284	4 433	5 500	(692)	41	4 849
Consisting of:
Net pension assets	4 993	—	1 387	6 380	5 749	—	1 183	6 932
Net pension liabilities	(216)	(628)	(1 103)	(1 947)	(249)	(692)	(1 142)	(2 083)

| 153 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Recognized in the income statement(1)

EURm	2025	2024	2023
Current service cost(2)	139	148	157
Past service cost(2)	28	5	6
Net interest(3)	(203)	(176)	(187)
Settlements(2)	—	5	(7)
Total	(36)	(18)	(31)

(1)In 2024 and 2023, amounts comprise both continuing and discontinued operations.

(2)Amounts related to continuing operations are presented in operating expenses within the income statement.

(3)Amounts related to continuing operations are presented in financial income within the income statement.

Recognized in other comprehensive income

EURm	2025	2024	2023
Return on plan assets, excluding amounts included in interest income	48	(482)	(76)
(Loss)/gain from change in demographic assumptions	(2)	163	55
(Loss)/gain from change in financial assumptions	(100)	613	(301)
Experience gain/(loss)	32	108	(26)
Change in asset ceiling, excluding amounts included in interest expense	(2)	6	5
Total	(24)	408	(343)

Actuarial assumptions and sensitivity analysis

Actuarial assumptions

The discount rates and mortality tables used for the significant plans:

	Discount rate		Mortality table
	2025	2024	2025
United States(1)	5.0%	5.3%	Pri-2012 w/MP-2020<br><br>Mortality projection scale
Germany	3.9%	3.4%	Heubeck 2018G
United Kingdom(2)	5.7%	5.6%	CMI 2023
Total weighted average for all countries	4.8%	4.9%

(1)Mortality tables remain unchanged in the US. 2024 and 2025 mortality assumption includes an adjustment based upon actual

experience.

(2)Mortality tables for United Kingdom have been adjusted with 1.5% long-term rate of improvement.

Assumptions regarding future mortality are set based on actuarial advice in accordance with

published statistics and experience in each country.

The principal actuarial weighted average assumptions used for determining the defined benefit

obligation and sensitivity of the defined benefit obligation to changes in these assumptions:

	2025	2024	Change in<br><br>assumption	Increase in<br><br>assumption(1)<br><br>EURm	Decrease in<br><br>assumption(1)<br><br>EURm
Discount rate for determining<br><br>present values	4.8%	4.9%	1.0%	990	(1 154)
Pension growth rate	2.1%	2.1%	1.0%	(206)	167
Inflation rate	2.3%	2.0%	1.0%	(222)	203
Life expectancy	87-88 yrs	86-88 yrs	1 year	(555)	524

(1)Positive movement indicates a reduction in the defined benefit obligation; a negative movement indicates an increase in the

defined benefit obligation.

Sensitivity analysis

When calculating the sensitivity of the defined benefit obligation to significant actuarial

assumptions, the present value of the defined benefit obligation is calculated using the projected

unit credit method. The sensitivity analyses are based on a change in an assumption while holding

all other assumptions constant and may not be representative of the actual impact of changes. If

more than one assumption is changed simultaneously, the combined impact of changes would not

necessarily be the same as the sum of the individual changes. If the assumptions change to a

different level compared with that presented, the effect on the defined benefit obligation may not

be linear. Increases and decreases in the principal assumptions, which are used in determining the

defined benefit obligation, do not have a symmetrical effect on the defined benefit obligation

primarily due to the compound interest effect created when determining the net present value of

the future benefit.

Key source of estimation uncertainty

The determination of pension and other post-employment benefit obligations and expenses

for defined benefit plans is dependent on a number of estimates and assumptions, including

the discount rate, future mortality rate, annual rate of increase in future compensation levels,

and healthcare costs trend rates and usage of services in the United States where the

majority of Nokia’s post-employment healthcare plans are maintained. Changes in

assumptions and actuarial estimates may materially affect the benefit obligation, future

expense and future cash flow.

| 154 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Investment strategies

The overall pension investment objective of Nokia is to preserve or enhance the defined benefit

pension plans’ funded status through the implementation of an investment strategy that

maximizes return within the context of minimizing funded status risk. In formulating the asset

allocation for the plans, multiple factors are considered, including, but not limited to, the long-term

risk and return expectations for a variety of asset classes as well as current and multi-year

projections of the defined benefit pension plans’ demographics, benefit payments, contributions

and funded status. Local trustee boards are responsible for conducting Asset-Liability Management

(ALM) studies, when appropriate; overseeing the investment of plan assets; and monitoring and

managing associated risks under company oversight and in accordance with local law. The results

of the ALM framework are implemented on a plan level.

Nokia’s pension investment managers may use derivative financial instruments including futures

contracts, forward contracts, options and interest rate swaps to manage market risk. The

performance and risk profile of investments is regularly monitored on a standalone basis as well as

in the broader portfolio context. One risk is a decline in the plan’s funded status as a result of the

adverse performance of plan assets and/or defined benefit obligations. The application of the ALM

study focuses on minimizing such risks.

United States plan assets

The majority of Nokia’s United States pension plan assets are held in a master pension trust. The

OPEB plan assets are held in two separate trusts. The Pension & Benefits Investment Committee

formally approves the target asset allocation following the proposal by Nokia’s OCIO provider. The

overall United States pension plan asset portfolio, at 31 December 2025, reflects a balance of

investments split of approximately 63% insurance contracts, 32% short-term investments and 5%

other assets.

In November 2025, the Group entered into a buy-in transaction with a third party insurer to de-risk

EUR 8.9 billion of pension exposure in the US defined benefit pension scheme. The transaction was

fully funded from existing assets with no additional employer contributions required. Nokia retains

the pension liability, however this transaction transfers certain investment and longevity risks to

the insurer, enhancing the stability of the funding status and protection of Nokia US pension plan

member benefits further securing the plan’s ability to meet its future liabilities to plan participants.

The recognition of the insurance policy as a qualifying plan asset resulted in a gain of approximately

EUR 236 million recognized in other comprehensive income.

Disaggregation of plan assets

	2025				2024
EURm	Quoted	Unquoted	Total	% of total<br><br>assets	Quoted	Unquoted	Total	% of total<br><br>assets
Equity securities	1 097	—	1 097	6%	1 055	—	1 055	5%
Fixed income<br><br>securities	2 101	145	2 246	13%	14 721	142	14 863	72%
Insurance contracts(1)	—	9 211	9 211	50%	—	648	648	3%
Real estate	—	528	528	3%	—	860	860	4%
Short-term<br><br>investments	4 801	—	4 801	26%	945	—	945	5%
Private equity and<br><br>other	106	326	432	2%	103	2 249	2 352	11%
Total	8 105	10 210	18 315	100%	16 824	3 899	20 723	100%

(1)In 2025, insurance contracts include a EUR 8.7 billion qualifying insurance contract related to the US buy-in transaction.

Most short-term investments including cash, equities and fixed-income securities have quoted

market prices in active markets. Equity securities represent investments in equity funds and direct

investments, which have quoted market prices in an active market. Fixed income securities

represent direct investments in government and corporate bonds, as well as investments in bond

funds, which have quoted market prices in an active market. Insurance contracts are customary

pension insurance contracts structured under domestic law in the respective countries. Real estate

investments are investments in commercial properties or real estate funds, which invest in a

diverse range of real estate properties. Private equity and other investments include investments in

private equity limited partnerships and absolute return investments in hedge funds.

Short-term investments are liquid assets or cash, which are being held for a short period of time,

with the primary purpose of controlling the tactical asset allocation. Private equity net asset values

(NAVs) are determined by the asset managers based on inputs such as operating results,

discounted future cash flows and market-based comparable data. Assets invested in alternative

asset classes such as private equity, real estate and absolute return are measured using latest

available valuations provided by the asset managers, reviewed by Nokia and adjusted for

subsequent cash flows.

| 155 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Future cash flows

Contributions

Group contributions to the pension and other post-employment benefit plans are made to facilitate

future benefit payments to plan participants. The funding policy is to meet minimum funding

requirements as set forth in the employee benefit and tax laws, as well as any such additional

amounts as Nokia may determine appropriate. Contributions are made to benefit plans for the sole

benefit of plan participants. Employer contributions expected to be paid in 2026 total EUR 54

million.

United States

Funding methods

Funding requirements for the United States qualified defined benefit pension plan is determined by

the applicable statutes, namely the Employee Retirement Income Security Act of 1974 (ERISA), the

Internal Revenue Code of 1986, and regulations issued by the Internal Revenue Service (IRS). In

determining funding requirements, ERISA allows assets to be either fair value or an average value

over a period of time; and liabilities to be based on spot interest rates or average interest rates

over a period of time. For the non-represented and formerly represented defined benefit pension

plan, Nokia does not foresee any future funding requirement for regulatory funding purposes,

given the plan asset allocation and the level of assets compared to liabilities.

Post-employment healthcare benefits for both non-represented and formerly union represented

retirees are capped for those who retired after 28 February 1990. The benefit obligation

associated with this group of retirees is 96% of the total United States retiree healthcare

obligation at 31 December 2025. The US government’s Medicare program is the primary payer for

those aged 65 and older.

Section 420 transfers

Section 420 of the U.S. Internal Revenue Code (Section 420) allows for the transfer of pension

assets in excess of specified thresholds above the plan’s funding obligation (excess pension assets)

to a retiree health benefits account, a retiree life insurance account, or both, maintained within the

pension plan and to use the assets in such accounts to pay for, or to reimburse the employer for

the cost of providing applicable health or life insurance benefits, each as defined in Section 420, for

retired employees, and with respect to health benefits, their spouses and dependents. Employers

making such transfers are required to continue to provide healthcare benefits or life insurance

coverage, as the case may be, for a certain period of time (cost maintenance period) at levels

prescribed by regulations. Pursuant to Section 420, Nokia has transferred EUR 35 million during

2025 (EUR 38 million in 2024). Section 420 is currently set to expire on 31 December 2032.

Benefit payments

The following table summarizes expected benefit payments from the defined benefit pension plans

and other post-employment benefit plans until 2035. Actual benefit payments may differ from

expected benefit payments.

	US Pension			US OPEB		Other<br><br>countries	Total
EURm	Management	Occupational	Supplemental<br><br>plans	Formerly<br><br>union<br><br>represented	Non-union<br><br>represented
2026	1 057	—	23	41	55	344	1 520
2027	990	—	23	38	55	315	1 421
2028	928	—	22	77	55	320	1 402
2029	868	—	21	70	55	436	1 450
2030	812	—	20	63	56	348	1 299
2031–2035	3 288	—	86	230	272	1 826	5 702

Benefits are paid from plan assets where there is sufficient funding available to the plan to cover

the benefit obligation. Any payments in excess of the plan assets are paid directly by Nokia. Direct

benefit payments expected to be paid in 2026 total EUR 103 million.

| 156 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Section 4 | | --- |

Operating

assets and

liabilities

This section provides detailed

information on Nokia’s assets and

liabilities related to its operating

activities, such as tangible and

intangible fixed assets, leases,

inventories, trade receivables and

other customer related balances,

and provisions.

4.1. Goodwill and intangible assets

Accounting policies

Intangible assets acquired separately are measured on initial

recognition at cost. Internally generated intangibles, except

for development costs that may be capitalized, are expensed

as incurred. Development costs are capitalized only if Nokia

has the technical feasibility to complete the asset; has an

ability and intention to use or sell the asset; can demonstrate

that the asset will generate future economic benefits; has

resources available to complete the asset; and has the ability

to measure reliably the expenditure during development.

The useful life of Nokia’s intangible assets, other than

goodwill, is finite. Following initial recognition, finite intangible

assets are carried at cost less accumulated amortization and

accumulated impairment losses. Intangible assets are

amortized over their useful lives, generally three years to

twelve years, using the straight-line method, which is

considered to best reflect the pattern in which the asset’s

future economic benefits are expected to be consumed.

Depending on the nature of the intangible asset, the

amortization charges for continuing operations are included

in cost of sales, research and development expenses or

selling, general and administrative expenses.

Goodwill is allocated to the groups of cash-generating units

that are expected to benefit from the synergies of the

related business combination and that reflect the lowest level

at which goodwill is monitored for internal management

purposes. A cash-generating unit, as determined for the

purposes of Nokia’s goodwill impairment testing, is the

smallest group of assets generating cash inflows that are

largely independent of the cash inflows from other assets or

groups of assets. The carrying values of the groups of cash-

generating units include their share of relevant corporate

assets allocated to them on a reasonable and consistent

basis. When the composition of one or more groups of cash-

generating units to which goodwill has been allocated is

changed, the goodwill is reallocated based on the relative

value of the affected groups of cash-generating units.

Nokia tests the carrying value of goodwill for impairment

annually. In addition, Nokia assesses the recoverability of the

carrying value of goodwill and intangible assets if events

or changes in circumstances indicate that the carrying value

may be impaired. Factors that Nokia considers when it

reviews indications of impairment include, but are not limited

to, underperformance of the asset relative to its historical or

projected future results, significant changes in the manner of

using the asset or the strategy for the overall business, and

significant negative industry or economic trends.

Nokia conducts its impairment testing by determining the

recoverable amount for an asset, a cash-generating unit or

groups of cash-generating units. The recoverable amount of

an asset, a cash-generating unit or groups of cash-generating

units is the higher of its fair value less costs of disposal and

its value-in-use. The recoverable amount is compared to the

asset’s, cash-generating unit’s or groups of cash-generating

units’ carrying value. If the recoverable amount for the asset,

cash-generating unit or groups of cash-generating units is

less than its carrying value, the asset is considered impaired

and is written down to its recoverable amount. Impairment

losses are presented in cost of sales, research and

development expenses or selling, general and administrative

expenses, except for impairment losses on goodwill, which

are presented in other operating expenses.

| 157 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | EURm | Goodwill | Intangible assets | Total | | --- | --- | --- | --- | | 2025 | | | | | Acquisition cost at 1 January | 6 873 | 9 793 | 16 666 | | Additions | — | 161 | 161 | | Acquisitions through business combinations(1) | 833 | 1 111 | 1 944 | | Disposals and retirements | — | (14) | (14) | | Translation differences | (596) | (607) | (1 203) | | Acquisition cost at 31 December | 7 110 | 10 444 | 17 554 | | Accumulated amortization and impairment charges at 1 January | (1 137) | (8 991) | (10 128) | | Amortization | — | (521) | (521) | | Impairment | — | (18) | (18) | | Disposals and retirements | — | 12 | 12 | | Translation differences | 23 | 473 | 496 | | Accumulated amortization and impairment charges at 31 December | (1 114) | (9 045) | (10 159) | | Net book value at 1 January | 5 736 | 802 | 6 538 | | Net book value at 31 December | 5 996 | 1 399 | 7 395 | | 2024 | | | | | Acquisition cost at 1 January | 6 629 | 9 893 | 16 522 | | Additions | — | 97 | 97 | | Acquisitions through business combinations | 33 | — | 33 | | Assets held for sale | (38) | (170) | (208) | | Disposals and retirements | (11) | (282) | (293) | | Translation differences | 260 | 255 | 515 | | Acquisition cost at 31 December | 6 873 | 9 793 | 16 666 | | Accumulated amortization and impairment charges at 1 January | (1 125) | (8 807) | (9 932) | | Amortization | — | (390) | (390) | | Assets held for sale | — | 165 | 165 | | Disposals and retirements | — | 278 | 278 | | Translation differences | (12) | (237) | (249) | | Accumulated amortization and impairment charges at 31 December | (1 137) | (8 991) | (10 128) | | Net book value at 1 January | 5 504 | 1 086 | 6 590 | | Net book value at 31 December | 5 736 | 802 | 6 538 |

(1)In 2025, acquisitions through business combinations relates to the acquisition of Infinera. For more information, refer to Note 6.2. Acquisitions.

Net book value of intangible assets by type of

asset

EURm	2025	2024
Customer relationships	548	317
Patents and licenses	341	304
Technologies and IPR&D	269	12
Tradenames and other	98	51
Intangible assets under construction	143	118
Total	1 399	802

Weighted average remaining amortization

period

Years	31 December 2025
Customer relationships	11
Patents and licenses	7
Technologies and IPR&D	3
Tradenames and other	2

| 158 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Goodwill

Nokia has allocated goodwill to its operating segments corresponding to groups of cash-generating

units (CGUs) that are expected to benefit from goodwill. Refer to Note 2.2. Segment information.

Allocation of goodwill

The following table presents the allocation of goodwill to groups of CGUs at 31 December:

EURm	2025	2024
Network Infrastructure	3 323	2 831
Cloud and Network Services(1)	440	559
Mobile Networks(1)	2 233	2 346

(1)In 2025, includes EUR 79 million of goodwill reallocation from Cloud and Network Services to Mobile Networks related to the

transfer of Managed Services

Recoverable amounts

The recoverable amounts of the groups of CGUs in 2025 were based on value-in-use that was

determined using a discounted cash flow calculation. The cash flow projections approved by

management were based on financial plans covering a forecast period of five years that reflects

management’s expectations of recovery from the market-driven mid-term decrease in sales and

market cyclicality, especially in the Mobile Networks segment and accelerated growth in Network

Infrastructure segment, followed by a five-year period that then converge to the steady state cash

flow projection modelled in the terminal year. The terminal growth rate assumptions do not exceed

long-term average growth rates for the industries and economies in which the groups of CGUs

operate.

The discount rates reflect current assessments of the time value of money and relevant market risk

premiums considering risks and uncertainties for which the future cash flow estimates have not been

adjusted. Discounted cash flow projections are based on post-tax cash flows and post-tax discount

rates, which do not materially differ from the pre-tax basis discounted cash flow projections.

Terminal growth rate and post-tax discount rate applied in the impairment test for the groups of

CGUs:

	Terminal growth rate		Post-tax discount rate
Key assumption %	2025	2024	2025	2024
Network Infrastructure	2.0%	1.5%	9.5%	9.4%
Cloud and Network Services	1.0%	1.5%	7.6%	8.0%
Mobile Networks	1.0%	1.0%	7.8%	8.4%

Other key variables in future cash flow projections include assumptions on estimated sales growth,

gross margin and operating margin. Sales growth and gross margin assumptions reflect

management expectations of addressable market growth, market share and competitive position,

as well as Nokia’s strategy and long-term business outlook. Gross margin and operating margin

assumptions include the impact of the ongoing efficiency, investment discipline and cost savings

initiatives, which are expected to reduce cost base and increase operational leverage throughout

the operating segments.

The results of the impairment testing indicate adequate headroom for each group of CGUs in 2025.

| 159 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

4.2. Property, plant and equipment

Accounting policies

Property, plant and equipment are stated at cost less

accumulated depreciation and accumulated impairment

losses. Depreciation is recorded on a straight-line basis

over the expected useful lives of the assets as follows:

Buildings and constructions
Buildings and constructions	20–33 years
Light buildings and constructions	3–20 years
Machinery and equipment
Production machinery and measuring<br><br>and test equipment	1–10 years
Other machinery and equipment	3–10 years

Land and water areas are not depreciated.

Maintenance, repairs and renewals are generally expensed

in the period in which they are incurred. However, major

renovations are capitalized and included in the carrying

amount of the asset when it is probable that future

economic benefits in excess of the originally assessed

standard of performance of the existing asset will flow to

Nokia. Major renovations are depreciated over the

remaining useful life of the related asset. Leasehold

improvements are depreciated over the shorter of the

lease term and the useful life. Gains and losses on the

disposal of property, plant and equipment are included in

other operating income or expenses.

EURm	Land, buildings<br><br>and<br><br>constructions	Machinery,<br><br>equipment and<br><br>other	Assets under<br><br>construction	Total
2025
Acquisition cost at 1 January	946	3 390	126	4 462
Additions	11	205	244	460
Acquisitions through business combinations	24	123	94	241
Reclassifications	47	75	(122)	—
Disposals and retirements	(50)	(148)	(4)	(202)
Translation differences	(88)	(95)	(19)	(202)
Acquisition cost at 31 December	890	3 550	319	4 759
Accumulated depreciation at 1 January	(518)	(2 582)	—	(3 100)
Depreciation	(57)	(326)	—	(383)
Disposals and retirements	42	143	—	185
Translation differences	57	52	—	109
Accumulated depreciation at 31 December	(476)	(2 713)	—	(3 189)
Net book value at 1 January	428	808	126	1 362
Net book value at 31 December	414	837	319	1 570
2024
Acquisition cost at 1 January	1 434	3 547	167	5 148
Additions	22	230	115	367
Reclassifications	50	55	(105)	—
Disposals and retirements	(51)	(199)	(4)	(254)
Assets held for sale	(548)	(306)	(50)	(904)
Translation differences	39	63	3	105
Acquisition cost at 31 December	946	3 390	126	4 462
Accumulated depreciation at 1 January	(569)	(2 628)	—	(3 197)
Depreciation	(80)	(321)	—	(401)
Impairment	(55)	—	—	(55)
Disposals and retirements	40	190	—	230
Assets held for sale	171	223	—	394
Translation differences	(25)	(46)	—	(71)
Accumulated depreciation at 31 December	(518)	(2 582)	—	(3 100)
Net book value at 1 January	865	919	167	1 951
Net book value at 31 December	428	808	126	1 362

| 160 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

4.3. Leases

Accounting policies

In the majority of its lease agreements, Nokia is acting as a

lessee. Nokia’s leased assets relate mostly to commercial

and industrial properties such as R&D, production and

office facilities. Nokia also leases vehicles provided as

employee benefits and service vehicles. There are only

minor lease contracts, mainly concerning subleases of

vacant leasehold or freehold facilities, where Nokia is

acting as a lessor.

As a lessee, Nokia recognizes a right-of-use asset and a

lease liability at the commencement date of the lease.

Right-of-use assets are measured at cost less

accumulated depreciation and impairment losses, and

adjusted for any remeasurements of the lease liabilities.

Right-of-use assets are depreciated on a straight-line

basis over the lease term as follows:

Buildings	3–22 years
Other	3–5 years

Lease liabilities are initially measured at the present value

of the lease payments made over the lease term. Nokia

uses its incremental borrowing rate to calculate the

present value as the interest rate implicit in the lease is

not readily determinable. Subsequently, lease liabilities are

measured on an amortized cost basis using the effective

interest method. In addition, lease liabilities are

remeasured if there is a lease modification, a change in

the lease term or a change in the future lease payments.

The interest component of the lease payments is

recognized as interest expense in financial expenses.

Nokia applies practical expedients whereby the payments

for short-term leases and leases of low-value assets are

recognized as an operating expense on a straight-line

basis over the lease term. In addition, Nokia does not

separate certain non-lease components from lease

components but instead accounts for each lease

component and associated non-lease component as a

single lease component.

Right-of-use assets

EURm	Buildings	Other	Total
2025
Acquisition cost at 1 January	1 422	286	1 708
Additions(1)	280	83	363
Acquisitions through business<br><br>combinations	57	—	57
Retirements	(50)	(59)	(109)
Translation differences	(76)	(9)	(85)
Acquisition cost at 31 December	1 633	301	1 934
Accumulated depreciation at<br><br>1 January	(813)	(137)	(950)
Depreciation	(133)	(82)	(215)
Retirements	50	55	105
Translation differences	42	4	46
Accumulated depreciation at<br><br>31 December	(854)	(160)	(1 014)
Net book value at 1 January	609	149	758
Net book value at 31 December	779	141	920
2024
Acquisition cost at 1 January	1 434	275	1 709
Additions(1)	36	95	131
Assets held for sale	(25)	(47)	(72)
Retirements	(48)	(38)	(86)
Translation differences	25	1	26
Acquisition cost at 31 December	1 422	286	1 708
Accumulated depreciation at<br><br>1 January	(677)	(126)	(803)
Depreciation	(135)	(88)	(223)
Impairment	(43)	—	(43)
Assets held for sale	4	40	44
Retirements	48	38	86
Translation differences	(10)	(1)	(11)
Accumulated depreciation at<br><br>31 December	(813)	(137)	(950)
Net book value at 1 January	757	149	906
Net book value at 31 December	609	149	758

(1)Additions comprise new lease contracts as well as modifications and

remeasurements of existing lease contracts.

Amounts recognized in the income statement

EURm	2025	2024	2023
Depreciation of right-of-use<br><br>assets(1)	(215)	(223)	(216)
Interest expense on lease<br><br>liabilities(1)	(35)	(33)	(28)
Impairment charges, net of<br><br>reversals	—	(43)	2
Total	(250)	(299)	(242)

(1)In 2024 and 2023, amounts comprise both continuing and discontinued

operations.

Amounts recognized in the income statement presented above

exclude expenses relating to short-term leases and leases of

low-value assets and income from subleasing right-of-use

assets as these are immaterial.

Amounts reported in the statement of cash

flows

EURm	2025	2024	2023
Payment of principal portion of<br><br>lease liabilities(1)	(221)	(233)	(239)
Interest paid on lease liabilities(1)	(35)	(33)	(28)
Total	(256)	(266)	(267)

(1)In 2024 and 2023, amounts comprise both continuing and discontinued

operations.

Amounts reported in the statement of cash flows exclude

payments for short-term leases and leases of low-value assets.

The maturity analysis of lease liabilities is presented in Note 5.4.

Financial risk management. Commitments related to future

lease contracts are presented in Note 6.1. Commitments,

contingencies and legal proceedings.

| 161 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

4.4. Inventories

Accounting policies

Inventories are measured at the lower of cost and net

realizable value. Cost is determined using standard cost,

which approximates actual cost on a first-in first-out (FIFO)

basis. In addition to the cost of materials and direct labor,

an appropriate proportion of production overheads is

allocated to the cost of inventory. Net realizable value is the

estimated selling price in the ordinary course of business

less the estimated costs necessary to make the sale.

Contract work in progress comprises costs incurred to

date for customer contracts where the contractual

performance obligations are not yet satisfied. Contract

work in progress will be recognized as cost of sales when

the corresponding revenue is recognized.

EURm	2025	2024
Raw materials and semi-finished goods	583	708
Finished goods	1 088	930
Contract work in progress	538	525
Total	2 209	2 163

Inventories recognized as an expense during the year in respect

of continuing operations was EUR 5 728 million in 2025

(EUR 5 050 million in 2024 and EUR 7 115 million in 2023).

During the year write-downs of inventories to net realizable

value totaled EUR 142 million (EUR 259 million in 2024 and

EUR 287 million in 2023) and reversals of previous inventory

write-downs totaled EUR 41 million (EUR 54 million in 2024 and

EUR 88 million in 2023). The write-downs and reversals of

previous write-downs have been included in cost of sales.

Previous write-downs have been reversed primarily as a result

of changes in estimated customer demand.

The amount of inventories expected to be recovered after more

than 12 months was EUR 561 million at 31 December 2025 (EUR

464 million in 2024).

4.5. Trade receivables and other customer-related balances

Accounting policies

Customer contracts

Nokia presents its customer contracts in the statement of

financial position as either a contract asset or a contract

liability, depending on the relationship between Nokia’s

performance and the customer’s payment for each individual

contract. On a net basis, a contract asset position represents

where Nokia has performed by transferring goods or services

to a customer before the customer has provided the

associated consideration or before payment is due.

Conversely, a contract liability position represents where a

customer has paid consideration or payment is due, but

Nokia has not yet transferred goods or services to the

customer. Contract assets presented in the statement of

financial position are current in nature while contract

liabilities can be either current or non-current.

Invoices are generally issued as control transfers and/or as

services are rendered. Invoiced receivables represent an

unconditional right to receive the consideration and only the

passage of time is required before the consideration is

received. Invoiced receivables are presented separately from

contract assets as trade receivables in the statement of

financial position. Trade receivables may be converted to

customer loan receivables in certain cases where extended

payment terms are requested. From time to time Nokia may

also extend loans to other third parties and these loans are

accounted for similarly as customer loan receivables. Nokia

sells trade receivables and customer loan receivables to

various financial institutions primarily without recourse in the

normal course of business, in order to manage credit risk and

working capital cycle.

The business model for managing trade receivables and

customer loan receivables is holding receivables to collect

contractual cash flows and selling receivables. Trade

receivables and customer loan receivables are initially

recognized and subsequently remeasured at fair value using

the discounted cash flow method.

The changes in fair value are recognized in the fair value

reserve through other comprehensive income. Interest

calculated using the effective interest method as well as

foreign exchange gains and losses are recognized in financial

income and expenses.

Discounts without performance obligations presented on the

statement of financial position in other current liabilities

relate to discounts given to customers which will be

executable upon satisfying specific criteria. As these

discounts become executable, they are netted against

related trade receivables or customer loan receivables.

Expected Credit Losses

Loss allowance for expected credit losses (ECL) is recognized

on financial assets measured at amortized cost and financial

assets measured at fair value through other comprehensive

income, as well as on financial guarantee contracts and loan

commitments. Nokia continuously assesses its financial

instruments on a forward-looking basis and accounts for the

changes in ECL on a quarterly basis using the following method:

▪ECL = PD x LGD x EAD

▪Probability of Default (PD) is based on the credit rating

profile of the counterparties as well as specific local

circumstances as applicable, unless there are specific

events that would indicate that the credit rating would

not be an appropriate basis for estimating credit risk at

the reporting date.

▪For Loss Given Default (LGD), the recovery rate is based

on the type of receivable, specific local circumstances as

applicable and related collateral arrangements, if any.

▪Exposure at Default (EAD) is normally the nominal value of

the receivable.

| 162 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Nokia applies a simplified approach to recognize a loss

allowance based on lifetime ECL on trade receivables and

contract assets without significant financing components.

Based on quantitative and qualitative analysis, Nokia has

determined that the credit risk exposure arising from its

trade receivables is low risk. Quantitative analysis focuses

on historical loss rates, historic and projected sales and

the corresponding trade receivables, and overdue trade

receivables including indicators of any deterioration in the

recovery expectation. Qualitative analysis focuses on all

relevant conditions, including customer and country credit

rating, to improve the accuracy of estimating lifetime ECL.

For customer loan receivables, the ECL is calculated

separately for each significant counterparty using the

method described above, including the impact of any

collateral arrangements or other credit enhancements to

LGD. The estimate is based on 12-month ECL unless there

has been a significant increase in credit risk for the specific

counterparty since the initial recognition, in which case

lifetime ECL is estimated. Breaches of contract, credit

rating downgrades and other credit measures are typical

indicators that Nokia takes into consideration when

assessing whether the credit risk on a financial instrument

has increased significantly since initial recognition. Nokia

considers additional indicators to determine if a financial

asset is credit-impaired including whether the

counterparty is in significant financial difficulties and

whether it is becoming probable that the customer will

enter bankruptcy or financial reorganization. Typically

customer loan credit risk is higher than credit risk of trade

receivables and contract assets on average.

The change in the amount of ECL for trade receivables and

contract assets is recognized in other operating expenses

and for customer loan receivables in financial expenses.

For customer loan receivables, the loss allowance is

recorded as an adjustment in other comprehensive

income instead of adjusting the carrying amount that has

already been recorded at fair value. If trade receivables

and customer loan receivables are sold, the impact of ECL

is reversed and the difference between the carrying

amount derecognized and the consideration received is

recognized in financial expenses.

Customer-related balances

Nokia aims to ensure the highest possible quality in trade receivables and contract assets, as well as customer loan receivables. The

Credit Risk Management Standard Operating Procedure (CRMSOP), approved by Nokia’s Chief Financial Officer, lays out the framework

for the management of business-related credit risks. The CRMSOP sets out that credit decisions are based on credit evaluation in each

business, including credit rating and limits for larger exposures, according to defined principles. Group level limit approvals are

required for material credit exposures. Credit risks are monitored in each business and, where appropriate, mitigated on a case-by-

case basis with the use of letters of credit, collaterals, sponsor guarantees, credit insurance and sale of selected receivables.

Aging of trade receivables, contract assets, and customer financing-related loan receivables at 31 December

		Past due
EURm	Current	1-30 days	31-180 days	> 180 days	Total
2025
Trade receivables(1)	4 710	113	167	161	5 151
Contract assets	805	—	—	—	805
Customer financing-related loan receivables	62	—	—	—	62
Total gross receivables	5 577	113	167	161	6 018
Expected credit loss allowance	(81)	(4)	(30)	(68)	(183)
Total net receivables	5 496	109	137	93	5 835
2024
Trade receivables(1)	4 894	163	195	213	5 465
Contract assets	694	—	—	—	694
Customer financing-related loan receivables	70	—	—	—	70
Total gross receivables	5 658	163	195	213	6 229
Expected credit loss allowance	(78)	(9)	(31)	(108)	(226)
Total net receivables	5 580	154	164	105	6 003

(1)Nokia’s payment terms are 80 days (89 days in 2024) on average.

The reversal of ECL credited to the income statement was EUR 50 million (EUR 137 million 2024 and EUR 16 million in 2023).

At 31 December 2025, the total ECL related to credit-impaired assets amounted to EUR 30 million (EUR 62 million in 2024 and EUR 396

million in 2023). In 2024, the reduction of ECL related to credit-impaired assets of EUR 334 million includes releases of EUR 233 million

related to assets that were written off during the year and EUR 111 million related to assets for which payments were received.

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Credit risk exposure by customer and country

Credit exposure is measured as the total of trade receivables, contract assets and loans

outstanding from customers and committed credits. Trade receivables do not include any major

concentrations of credit risk by customer.

Credit risk exposure by customer and country as % of total trade receivables and contract assets

as well as loans and loan commitments to customers:

Customer	2025	2024
Customer 1	4.8%	7.5%
Customer 2	4.2%	4.9%
Customer 3	3.2%	4.7%
Total	12.2%	17.1%
Country	2025	2024
United States	20.3%	21.5%
Country 2	7.1%	10.6%
Country 3	6.0%	5.8%
Total	33.4%	37.9%

Contract assets and contract liabilities

Contract asset balances decrease upon reclassification to trade receivables when Nokia’s right to

payment becomes unconditional. Contract liability balances decrease when Nokia satisfies the

related performance obligations and revenue is recognized. There were no material cumulative

adjustments to revenue recognized arising from changes in transaction prices, changes in

measures of progress or changes in estimated variable consideration.

During the year, Nokia recognized EUR 1.0 billion (EUR 1.5 billion in 2024 of which EUR 0.1 billion

related to discontinued operations sold in 2024) of revenue that was included in the current

contract liability balance at the beginning of the period.

4.6. Other receivables and liabilities

Other non-current receivables

EURm	2025	2024
R&D tax credits	152	144
Indirect tax receivables	14	27
Other	111	39
Total	277	210

Other current receivables

EURm	2025	2024
VAT and other indirect tax receivables	311	300
Prepayments related to contract manufacturing	101	126
IT-related prepaid expenses	42	47
R&D tax credits and grant receivables	51	43
Divestment-related receivables	23	23
Other	256	228
Total	784	767

Other non-current liabilities

EURm	2025	2024
Salaries, wages and social charges	39	30
Other	108	87
Total	147	117

Other current liabilities

EURm	2025	2024
Salaries, wages and social charges	1 591	1 531
Accrued expenses related to customer projects	190	245
Discounts without performance obligations	294	380
VAT and other indirect tax payables	285	314
Other(1)	378	413
Total	2 738	2 883

(1)Includes accrued logistics, R&D and IT expenses.

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4.7. Provisions

Accounting policies

Provision is recognized when Nokia has a present legal or

constructive obligation as a result of past events, it is

probable that an outflow of resources will be required to

settle the obligation and a reliable estimate of the amount

can be made. Management judgment may be required in

determining whether it is probable that an outflow of

economic benefits will be required to settle the obligation.

The amount recognized as a provision is based on the best

estimate of unavoidable costs required to settle the

obligation at the end of the reporting period.

When estimating the amount of unavoidable costs,

management may be required to consider a range of

possible outcomes and their associated probabilities, risks

and uncertainties surrounding the events and

circumstances, as well as making assumptions about the

timing of payment. Changes in estimates of timing or

amounts of costs required to settle the obligation may

become necessary as time passes and/or more accurate

information becomes available. Nokia assesses the

adequacy of its existing provisions and adjusts the

amounts as necessary based on actual experience and

changes in facts and circumstances at each reporting date.

EURm	Restructuring	Litigation and<br><br>environmental(1)	Warranty	Material liability	Other	Total
1 January 2025	219	242	230	145	392	1 228
Business combinations	1	—	29	1	12	43
Charged to income statement
Additions(2)	397	165	295	109	72	1 038
Reversals	(6)	(18)	(56)	(115)	(106)	(301)
Total charged/(credited) to income statement	391	147	239	(6)	(34)	737
Utilized during year(3)	(239)	(78)	(118)	(39)	(28)	(502)
Translation differences and other	(1)	(22)	(3)	(13)	(51)	(90)
31 December 2025	371	289	377	88	291	1 416
Non-current	135	148	120	—	234	637
Current	236	141	257	88	57	779

(1)Environmental provision was EUR 130 million at 31 December 2025 (EUR 152 million at 31 December 2024).

(2)Additions to warranty provision are primarily due to a contract settlement related to a customer specific project that started in 2019.

(3)The utilization of restructuring provision includes items transferred to accrued expenses. A total of EUR 60 million of these remained in accrued expenses at 31 December 2025.

Restructuring provision

Nokia provides for the estimated cost to restructure when a detailed formal plan of restructuring has been completed, approved by

management, and announced. Restructuring costs consist primarily of personnel restructuring charges. The other main components are

costs associated with exiting real estate locations, and costs of terminating certain other contracts directly linked to the restructuring.

At 31 December 2025, the restructuring provision consists primarily of amounts related to the announcements made by Nokia on 16

March 2021 and 19 October 2023. The majority of the restructuring cash outflows is expected to occur over the next two years.

Litigation and environmental provisions

Nokia provides for the estimated future settlements related to legal proceedings based on the probable outcome of the claims. Nokia

also provides for environmental remediation when Nokia becomes obliged, legally or constructively, to rectify environmental damage

relating to soil, groundwater, surface water or sediment contamination. Cash outflows related to the litigation and environmental

liabilities are inherently uncertain and generally occur over several periods. For a presentation of legal matters potentially affecting

Nokia, refer to Note 6.1. Commitments, contingencies and legal proceedings.

Warranty provision

Nokia provides for the estimated liability to repair or replace products under standard warranty at the time revenue is recognized. The

provision estimate is based on historical experience of the level of repairs and replacements. Cash outflows related to the warranty

provision are generally expected to occur in the next 18 months.

Material liability provision

Nokia recognizes the estimated liability for non-cancellable purchase commitments for inventory in excess of forecasted requirements

at each reporting date. Cash outflows related to the material liability provision are expected to occur over the next 12 months.

Other provisions

Nokia provides for various legal and constructive obligations such as project losses, indirect tax provisions, divestment-related

provisions, certain employee-related provisions other than restructuring provisions and asset retirement obligations. Cash outflows

related to other provisions are generally expected to occur over the next two years.

| 165 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Section 5 | | --- |

Capital and

financial

instruments

This section provides information

on shareholders’ equity,

shareholders’ remuneration and

Nokia’s capital management

objectives. Furthermore, this

section comprises the policies and

disclosures related to Nokia’s

financial assets and liabilities and

hedge accounting, as well as

information on Nokia’s financial

risks and financial risk

management principles

and objectives.

5.1. Equity

Shares and share capital

Share capital

Nokia Corporation has one class of shares. Each share entitles

the holder to one vote at general meetings. The shares have no

par value nor is there a minimum or maximum share capital or

number of shares under the Articles of Association of Nokia

Corporation. The share capital amounted to

EUR 245 896 461.96 at 31 December 2025 and 2024, and

consisted of 5 742 239 696 (5 605 850 345 in 2024) issued and

fully paid shares.

In 2025, Nokia Corporation issued 166 389 351 new shares at

the subscription price of USD 6.01 per share, corresponding to

EUR 5.16 per share, in a directed share issue to NVIDIA

Corporation. The total proceeds of USD 1 000 million (EUR 850

million, net of the share issuance costs) were recognized in the

reserve for invested unrestricted equity. Nokia will use the

proceeds from the issuance to accelerate its strategic plans to

advance trusted connectivity for the AI supercycle and other

general corporate purposes.

In addition, Nokia Corporation issued in a directed share issue

120 000 000 (150 000 000 in 2024) new shares to itself without

consideration and canceled 150 000 000 (157 646 220 in 2024

related to the share buyback program announced in January

2024) shares it had repurchased under the share buyback

program announced in November 2024.

Share premium

Share premium reserve includes the Parent Company’s share

premium account and the equity impact of employee services

related to equity-settled share-based compensation plans.

Treasury shares

At 31 December 2025, the number of Nokia shares held by the

Group companies was 159 705 525 (232 700 997 in 2024)

representing 2.8% (4.2% in 2024) of the share capital and total

voting rights.

In 2025, Nokia repurchased 130 813 954 shares under its share

buyback program announced in November 2024 (176 832 266

shares in 2024 under the share buyback programs announced in

January and November 2024). The shares repurchased under

the November 2024 program were canceled in April 2025.

On 28 February 2025, Nokia completed the acquisition of

Infinera. The aggregated consideration transferred included

127 434 986 Nokia shares held by Nokia Corporation. Refer to

Note 6.2. Acquisitions for more information.

Additionally in 2025, Nokia Corporation transferred without

consideration 46 374 440 (24 380 761 in 2024) shares held by

the Company to employees, including certain members of the

Group Leadership Team, as settlement of the Group’s equity-

based incentive plans and the employee share purchase plan.

Number of shares outstanding at the beginning and at the end

of the period

Number of shares 000s	2025	2024	2023
1 January	5 373 149	5 525 601	5 587 016
Settlement of share-based<br><br>payments	46 375	24 380	16 886
Shares issued as consideration<br><br>for business combinations	127 435	—	—
Directed share issue	166 389	—	—
Acquisition of treasury shares	(130 814)	(176 832)	(78 301)
31 December	5 582 534	5 373 149	5 525 601

Nature and purpose of other equity reserves

Translation differences

Translation differences consist of foreign exchange differences

arising from translation of foreign operations into euro, the

presentation currency of the consolidated financial statements,

as well as gains and losses related to hedging of net

investments in foreign operations.

Fair value and other reserves

Pension remeasurements

Pension remeasurements reserve includes actuarial gains and

losses as well as return on plan assets and changes in the effect

of the asset ceiling, excluding amounts recognized in net

interest, related to Nokia’s defined benefit plans.

Hedging reserve

Hedging reserve includes the change in fair value that reflects

the change in spot exchange rates for certain foreign exchange

forward contracts and foreign exchange options, as well as the

part of cross-currency swaps that is designated as a cash flow

hedge to the extent that the hedges are effective.

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Cost of hedging reserve

Cost of hedging reserve includes the forward element of foreign

exchange forward contracts and the time value of foreign

exchange options related to cash flow hedging of forecast

foreign currency sale and purchase transactions. Additionally,

cost of hedging reserve includes the difference between the

change in fair value of the forward element of foreign exchange

forward contracts and the time value of option contracts and

the amortization of the forward element of foreign exchange

forward contracts and time value of option contracts related to

net investment hedging. Cost of hedging reserve also includes

changes in fair value from foreign currency basis spread related

to fair value hedging of foreign currency denominated bonds.

Fair value reserve

Fair value reserve includes the changes in fair value of financial

instruments that are managed in a portfolio with a business

model of holding financial instruments to collect contractual

cash flows including principal and interest, as well as selling

financial instruments. The fair value changes recorded in fair

value reserve for these instruments are reduced by amounts of

loss allowances.

Reserve for invested unrestricted equity

The reserve for invested unrestricted equity includes that part

of the subscription price of issued shares that according to the

share issue decision is not to be recorded to the share capital as

well as other equity inputs that are not recorded to some other

reserve. The amount received for treasury shares is recorded to

the reserve for invested unrestricted equity, unless it is

provided in the share issue decision that it is to be recorded in

full or in part to the share capital. The Nokia shares repurchased

under the 2022, January 2024 and November 2024 share

buyback programs were funded using funds in the reserve for

invested unrestricted equity.

Changes in other comprehensive income by component of equity

		Fair value and other reserves
EURm	Translation<br><br>differences(1)	Pension<br><br>remeasurements	Hedging reserve	Cost of hedging<br><br>reserve	Fair value<br><br>reserve
1 January 2023	169	3 893	78	(18)	(48)
Foreign exchange translation differences	(547)	—	—	—	—
Net investment hedging gains	105	—	—	3	—
Remeasurements of defined benefit plans	—	(261)	—	—	—
Net fair value gains/(losses)	—	—	2	(25)	(87)
Transfer to income statement	19	—	(66)	38	96
Movement attributable to non-controlling interests	5	—	—	—	—
31 December 2023	(249)	3 632	14	(2)	(39)
Foreign exchange translation differences	623	—	—	—	—
Net investment hedging losses	(31)	—	—	(1)	—
Remeasurements of defined benefit plans	—	326	—	—	—
Net fair value gains/(losses)	—	—	20	(1)	66
Transfer to income statement	(78)	—	(19)	19	(52)
Movement attributable to non-controlling interests	(2)	—	—	—	—
31 December 2024	263	3 958	15	15	(25)
Foreign exchange translation differences	(1 626)	—	—	—	—
Net investment hedging gains	89	—	—	—	—
Remeasurements of defined benefit plans	—	(17)	—	—	—
Net fair value gains/(losses)	—	—	79	(27)	26
Transfer to income statement	(2)	—	(63)	11	(19)
Other increase	—	2	—	—	—
Movement attributable to non-controlling interests	4	—	—	—	—
31 December 2025	(1 272)	3 943	31	(1)	(18)

(1)At 31 December 2025, translation differences include a EUR 244 million gain related to net investment hedging (EUR 154 million gain in 2024 and EUR 186 million gain in 2023).

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Capital management

For capital management purposes Nokia defines capital as total

equity and interest-bearing liabilities less cash and cash

equivalents, current interest-bearing financial investments and

non-current interest-bearing financial investments.

The main objectives of Nokia’s capital management are to

maintain a solid overall financial position and to ensure

sufficient financial flexibility to execute Nokia’s long-term

business strategy and to provide returns to shareholders. From

a cash perspective, Nokia aims to maintain the balance of its

cash and cash equivalents and interest-bearing financial

investments less interest-bearing liabilities at 10-15% of annual

net sales over time. To support these objectives, Nokia aims to

maintain investment grade credit ratings. At 31 December

2025, Nokia’s long-term credit ratings are BBB- (stable) by

Fitch, Ba1 (positive) by Moody’s, and BBB- (stable) by S&P

Global.

With regards to shareholder remuneration, Nokia targets

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.

Nokia may also use share repurchases as a tool to manage its

capital structure through the reduction of capital and distribute

excess cash to the shareholders.

Distribution of funds

Nokia distributes funds to its shareholders in two ways: a) as

dividends from retained earnings and/or as assets from the

reserve for invested unrestricted equity, and b) by repurchasing

shares using funds in the unrestricted equity. The amount of

any distribution is limited to the Parent Company's distributable

funds and subject to its solvency, and may not exceed the

amount proposed by the Board of Directors.

Dividend and/or assets from the reserve for unrestricted

invested equity

For the financial year 2025

Nokia’s Board of Directors proposes to the Annual General

Meeting 2026 that no dividend is distributed by a resolution of

the AGM for the financial year ended on 31 December 2025.

Instead, the Board proposes to be authorized to decide, in its

discretion, on the distribution of an aggregate maximum of EUR

0.14 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 period of validity of the authorization

unless the Board decides otherwise for a justified reason.

Distributions of dividend and/or assets from the reserve for

invested unrestricted equity are recognized as a reduction of

equity and a liability when the Board has decided on the

distribution. On the date of issuing the financial statements for

2025, the total number of Nokia shares is 5 742 239 696, based

on which the total amount of distribution would be EUR 804

million. The total number of shares includes the shares held by

the Parent Company which are not entitled to a distribution.

For the financial year 2024

The AGM in 2025 resolved to authorize the Board of Directors

to decide on the distribution of an aggregate maximum

of EUR 0.14 per share as dividend from the retained earnings

and/or as assets from the reserve of invested unrestricted

equity for the financial year 2024. The authorization was used

to distribute a dividend in four installments. During 2025, three

installments of dividend were distributed amounting to EUR

0.11 per share and EUR 593 million in total. The fourth

installment of EUR 0.03 per share and EUR 168 million in total

was paid in February 2026. The total amount of dividend paid

for the financial year 2024 was EUR 761 million.

For the financial year 2023

For the financial year 2023, a total dividend of EUR 709 million,

corresponding to EUR 0.13 per share, was paid.

Share buyback programs

November 2024 program

In November 2024, Nokia launched a share buyback program to

offset the dilutive effect of the acquisition of Infinera

completed on 28 February 2025. The repurchases commenced

on 25 November 2024 and ended on 2 April 2025. Nokia

repurchased in total 150 000 000 shares under the program of

which 130 813 954 shares were purchased in 2025. The

aggregate purchase price of all shares acquired under the

program was EUR 703 million, and the average price per share

was EUR 4.69.

The repurchases were funded using funds in the reserve for

invested unrestricted equity in accordance with the

authorization given to the Board of Directors by the AGM, and

hence the repurchases reduced Nokia's total unrestricted

equity. The repurchased shares were canceled in April 2025.

January 2024 program

In January 2024, Nokia’s Board of Directors initiated a share

buyback program targeting to return up to EUR 600 million of

cash to shareholders in tranches over a period of two years.

The purchases under the first phase of the program

commenced on 20 March 2024. In July 2024, Nokia announced

it had decided to accelerate the repurchases in a way that the

whole share buyback program would be completed by the end

of 2024. During the program, which ended on 21 November

2024, Nokia repurchased 157 646 220 shares. The aggregate

purchase price of all shares acquired was EUR 600 million, and

the average price per share was EUR 3.81.

The repurchases were funded using funds in the reserve for

invested unrestricted equity, and hence the repurchases

reduced Nokia’s total unrestricted equity. The repurchased

shares were canceled in December 2024.

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The 2022 program

In February 2022, Nokia’s Board of Directors initiated a share

buyback program targeting to return up to EUR 600 million of

cash to shareholders in tranches over a period of two years.

In the first phase of the program, which was launched on

11 February 2022 and which ended on 11 November 2022,

Nokia repurchased 63 963 583 shares. The aggregate purchase

price of all shares acquired in the first phase was EUR 300

million, and the average price per share was EUR 4.69. The

repurchased shares were canceled in December 2022.

In the second phase of the program, which was launched on

2 January 2023 and which ended on 10 November 2023, Nokia

repurchased 78 301 011 shares. The aggregate purchase price

of all shares acquired under the second phase of the program

was EUR 300 million, and the average price per share was EUR

3.83. The repurchased shares were canceled in November 2023.

The repurchases were funded using funds in the reserve for

invested unrestricted equity, and hence the repurchases

reduced Nokia’s total unrestricted equity.

Authorizations given to the Board of Directors

The following authorizations related to the issue and

repurchase of shares were given to the Board of Directors at

the AGM held on 29 April 2025.

Authorization to issue shares and special rights entitling to

The shareholders authorized the Board to issue a maximum of

530 million shares, corresponding to less than 10% of the total

number of Nokia’s shares, through issuance of shares or special

rights entitling to shares in one or more issues during the

effective period of the authorization. The Board is authorized to

issue either new shares or shares held by Nokia. Shares and

special rights entitling to shares may be issued in deviation

from the shareholders’ pre-emptive rights within the limits set

by law. The authorization may be used to develop Nokia’s

capital structure, diversify the shareholder base, finance or

carry out acquisitions or other arrangements, settle Nokia’s

equity-based incentive plans or for other purposes resolved by

the Board of Directors.

The authorization is effective until 28 October 2026, and it

terminated the previous authorizations to issue shares and

special rights entitling to shares.

Authorization to repurchase shares

The shareholders authorized the Board to repurchase a

maximum of 530 million shares, corresponding to less than

10% of the total number of Nokia’s shares, using funds in the

unrestricted equity, which means that the repurchases will

reduce Nokia’s distributable funds. The price paid for the shares

under the authorization shall be based on the market price of

Nokia shares on the securities markets on the date of the

repurchase or a price otherwise formed in a competitive

process. Shares may be repurchased to be cancelled, held to be

reissued, transferred further or for other purposes resolved by

the Board of Directors. The Company may enter into derivative,

share lending or other arrangements customary in capital

market practice. The shares may be repurchased otherwise than

in proportion to the shares held by the shareholders. The Board

shall resolve on all other matters related to the repurchase of

Nokia shares.

The authorization is effective until 28 October 2026, and it

terminated the previous authorization to repurchase shares to

the extent that the Board has not previously resolved to

repurchase shares based on such authorization.

| 169 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

5.2. Financial assets and liabilities

Accounting policies

Fair value

Fair value is the price that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between

market participants at the measurement date. Financial

assets and liabilities measured at fair value are categorized

based on the availability of observable inputs used to

measure their fair value. Three hierarchical levels are based

on an increasing amount of judgment associated with the

inputs used to derive fair valuation for these assets and

liabilities, Level 1 being market values for exchange traded

products, Level 2 being primarily based on publicly available

market information and Level 3 requiring most management

judgment.

The fair value of an asset or a liability is measured using the

assumptions that market participants would use when pricing

the asset or liability, assuming that market participants act in

their economic best interest, by using quoted market rates,

discounted cash flow analyses and other appropriate

valuation models. Nokia uses valuation techniques that are

appropriate in the circumstances and for which sufficient

data is available to measure fair value, maximizing the use of

relevant observable inputs and minimizing the use of

unobservable inputs. At the end of each reporting period, all

financial assets and liabilities, that are either measured at fair

value on a recurring basis or for which fair values are

disclosed in the financial statements, are categorized within

the fair value hierarchy based on the lowest level input that is

significant to the fair value measurement as a whole.

Classification and measurement

Financial assets

Nokia classifies its financial assets that are debt instruments

in the following three categories: financial assets measured at

amortized cost, financial assets measured at fair value

through other comprehensive income, and financial assets

measured at fair value through profit and loss. The selection

of the appropriate category is made based on both Nokia’s

business model for managing the financial asset and on the

contractual cash flow characteristics of the asset. Equity

instruments and derivative financial assets are measured at

fair value through profit and loss.

Nokia’s business model for managing financial assets is defined

on a portfolio level. The business model must be observable on a

practical level by the way the business is managed. The cash

flows of financial assets measured at amortized cost are solely

payments of principal and interest. These assets are held within

a business model that has an objective to hold assets to collect

contractual cash flows. Financial assets measured at fair value

through other comprehensive income have cash flows that are

solely payments of principal and interest, and these assets are

held within a business model that has an objective that is

achieved both by holding financial assets to collect contractual

cash flows and selling financial assets. For these categories, a

loss allowance is calculated on a quarterly basis based on a

review of collectability (probability of default) and available

collateral (loss given default) for the asset, recorded as an

adjustment to the carrying amount of the asset and recognized

in other financial expenses in the income statement.

Financial assets measured at fair value through profit and loss

are assets that do not fall in either of the categories in the

paragraph above. Additionally, the accounting for financial assets

depends on whether the financial asset is part of a hedging

relationship (refer to Note 5.3. Derivative assets and liabilities).

All purchases and sales of financial assets are recorded on the

trade date, i.e. when Nokia commits to purchase or sell the

asset. All financial assets are initially measured at fair value and

subsequently remeasured according to their classification.

Subsequently, instruments classified as fair value through profit

or loss and instruments classified as fair value through other

comprehensive income are remeasured at fair value, while

instruments classified as amortized cost are remeasured using

the effective interest rate method. For instruments classified as

fair value through profit or loss, the fair value adjustments and

foreign exchange gains and losses are recognized in the income

statement either in other operating income and expenses or

financial income and expenses as determined by the purpose of

the instruments. For instruments classified as fair value through

other comprehensive income, changes in fair value are

recognized in the fair value reserve through other

comprehensive income (refer to Note 5.1. Equity).

For instruments classified as amortized cost, interest

calculated using the effective interest method, as well as

foreign exchange gains and losses, are recognized in financial

income and expenses in the income statement.

A financial asset is derecognized when substantially all the

risks and rewards related to the financial asset have been

transferred to a third party that assumes control of the

asset. On derecognition of a financial asset, the difference

between the carrying amount and the consideration received

is recognized in the income statement either in other

operating income and expenses or financial income and

expenses as determined by the purpose of the instrument.

The FIFO method is used to determine the cost basis of

financial assets at amortized cost that are disposed of.

Financial liabilities

Nokia classifies its financial liabilities as financial liabilities

measured at amortized cost except for derivative liabilities

and the conditional obligation related to Nokia Shanghai Bell,

which are classified as financial liabilities at fair value through

profit and loss.

All financial liabilities are initially recognized at fair value and,

in the case of borrowings and payables, net of transaction

costs. Financial liabilities are subsequently remeasured

according to their classification.

For financial liabilities measured at amortized cost, interest

calculated using the effective interest method, as well as

foreign exchange gains and losses, are recognized in financial

income and expenses in the income statement.

Financial liabilities are derecognized when the related

obligation is discharged, canceled or expired. Additionally, a

substantial modification of the terms of an existing financial

liability is accounted for as a derecognition of the original

financial liability and the recognition of a new financial liability.

On derecognition of a financial liability, the difference

between the carrying amount extinguished and the

consideration paid is recognized in financial income or

expenses in the income statement.

| 170 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Fair value of financial instruments

	2025							2024
	Carrying amounts						Fair value(1)	Carrying amounts						Fair value(1)
		Fair value through profit or loss			Fair value<br><br>through other<br><br>comprehensive<br><br>income(2)				Fair value through profit or loss			Fair value<br><br>through other<br><br>comprehensive<br><br>income(2)
EURm	Amortized cost	Level 1	Level 2	Level 3	Level 2	Total	Total	Amortized cost	Level 1	Level 2	Level 3	Level 2	Total	Total
Non-current interest-bearing financial investments	368	—	—	—	—	368	377	457	—	—	—	—	457	466
Venture funds and similar equity investments	—	—	—	857	—	857	857	—	—	—	865	—	865	865
Other non-current financial assets	96	—	82	—	37	215	215	179	—	97	—	40	316	316
Other current financial assets	231	—	—	—	17	248	248	315	92	—	—	25	432	432
Derivative assets(3)	—	—	127	—	—	127	127	—	—	197	—	—	197	197
Trade receivables(4)	—	—	—	—	4 975	4 975	4 975	—	—	—	—	5 248	5 248	5 248
Current interest-bearing financial investments	323	—	638	—	—	961	962	486	—	1 175	—	—	1 661	1 661
Cash and cash equivalents	4 647	—	815	—	—	5 462	5 462	5 251	—	1 372	—	—	6 623	6 623
Total financial assets	5 665	—	1 662	857	5 029	13 213	13 223	6 688	92	2 841	865	5 313	15 799	15 808
Long-term interest-bearing liabilities	2 329	—	—	—	—	2 329	2 401	2 918	—	—	—	—	2 918	2 986
Other long-term financial liabilities	28	—	—	31	—	59	59	33	—	—	45	—	78	78
Short-term interest-bearing liabilities	1 084	—	—	—	—	1 084	1 083	969	—	—	—	—	969	969
Other short-term financial liabilities(5)	46	—	—	6	—	52	52	883	—	—	488	—	1 371	1 371
Derivative liabilities(3)	—	—	266	—	—	266	266	—	—	299	—	—	299	299
Discounts without performance obligations(4)	294	—	—	—	—	294	294	380	—	—	—	—	380	380
Trade payables	2 978	—	—	—	—	2 978	2 978	3 213	—	—	—	—	3 213	3 213
Total financial liabilities	6 759	—	266	37	—	7 062	7 133	8 396	—	299	533	—	9 228	9 296

(1)The following fair value measurement methods are used for items not carried at fair value: The fair values of long-term interest-bearing liabilities, including current portion, are primarily based on publicly available market information (level 2). The fair values of other assets

and liabilities, including loan receivables and loans payable, are primarily based on discounted cash flow analysis (level 2). The fair value is estimated to equal the carrying amount for short-term financial assets and financial liabilities due to limited credit risk and short time to

maturity.

(2)No financial instruments measured at fair value through other comprehensive income are categorized in fair value hierarchy level 1 or level 3.

(3)For further information on derivative assets and liabilities, refer to Note 5.3. Derivative assets and liabilities.

(4)For further information on trade receivables and discounts without performance obligation, refer to Note 4.5. Trade receivables and other customer-related balances.

(5)In 2024, other financial liabilities included a liability related to Nokia's share buyback program reflecting Nokia’s commitment under the agreement with a third-party broker conducting the share repurchases on Nokia’s behalf.

| 171 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Financial assets

Interest-bearing financial investments

Nokia invests a portion of the corporate cash needed to cover

the projected cash outflows of its ongoing business operations

in highly liquid, interest-bearing investments. Interest-bearing

financial investments may include investments measured at

amortized cost and investments measured at fair value through

profit and loss.

Non-current interest-bearing financial investments are

investments in highly liquid corporate bonds that are long-term

in nature based on their initial maturity and are measured at

amortized cost using the effective interest method.

Current interest-bearing financial investments in bank deposits,

as well as fixed income and money market securities with an

initial maturity or put feature longer than three months, that

have characteristics of solely payments of principal and interest

and are not part of structured investments, are managed in a

portfolio with a business model of holding investments to

collect principal and interest and are measured at amortized

cost using the effective interest method. These investments are

executed with the main purpose of collecting contractual cash

flows and principal repayments. However, investments are sold

from time to time for liquidity management and market risk

mitigation purposes.

Current interest-bearing financial investments may also include

money market funds that do not qualify as cash equivalents,

investments acquired for trading purposes, investment

structures consisting of securities traded in combination with

derivatives with complementing and typically offsetting risk

factors and other investments that have cash flows not being

solely payments of principal and interest. These investments

are executed for capital appreciation and other investment

returns and can be sold at any time. These investments are

classified as fair value through profit or loss, with fair value

adjustments, foreign exchange gains and losses and realized

gains and losses recognized in financial income and expenses in

the income statement. The fair values of these investments are

based on publicly available market information.

Corporate cash investments in bank deposits used as collateral

for derivative transactions are measured at amortized cost

using the effective interest method.

Other financial assets

Other non-current financial assets include unlisted private

equity and unlisted venture fund investments, including

investments managed by NGP Capital which specializes in

growth-stage investing. These investments do not fulfill the

criteria of being solely payments of principal and interest and

they are classified as investments at fair value through profit

and loss. The fair value of these level 3 investments is

determined using one or more valuation techniques where the

use of the market approach generally consists of using

comparable market transactions, while the use of the income

approach generally consists of calculating the net present value

of expected future cash flows.

For unlisted funds, the selection of appropriate valuation

techniques by the fund managing partner may depend on the

availability and reliability of relevant inputs. In some cases, one

valuation technique may provide the best indication of fair value

while in other circumstances multiple valuation techniques may

be appropriate.

Inputs generally considered include the original transaction

price, recent transactions in the same or similar instruments,

completed or pending third-party transactions in the underlying

investment or comparable issuers, subsequent rounds of

financing, recapitalizations or other transactions undertaken by

the issuer, offerings in the equity or debt capital markets, and

changes in financial ratios or cash flows, adjusted as

appropriate for liquidity, credit, market and/or other risk

factors. The fair value may be adjusted to reflect illiquidity and/

or non-transferability, with the amount of such discount

estimated by the managing partner in the absence of market

information.

Level 3 investments are remeasured at each reporting date

taking into consideration any changes in estimates, projections

and assumptions, as well as any changes in economic and other

relevant conditions. These investments include approximately

50 separate venture funds investing in hundreds of individual

companies in various sectors and geographies, focusing on AI,

data infrastructure, digital health, software and enterprise

sectors.

Hence, specific estimates and assumptions used in the absence

of observable inputs do impact the fair value of individual

investments, but no individual input has a significant impact on

the aggregated fair value of level 3 investments.

Fair value adjustments, foreign exchange gains and losses, and

realized gains and losses from the disposal of these

investments are recognized in financial income.

From time to time Nokia may have investments in listed equity

shares classified as level 1 investments. These are exchange

traded products with quoted prices readily and regularly

available from an exchange representing actual and regularly

occurring market transactions on an arm’s length basis.

Other non-current financial assets also include restricted assets

and other receivables, customer financing-related loan

receivables (refer to Note 4.5. Trade receivables and other

customer-related balances) and certain other financial assets of

a long-term nature.

Restricted assets and other receivables include restricted bank

deposits primarily related to employee benefits as well as other

loan receivables measured at amortized cost using the effective

interest method.

The cash flows of certain other financial assets of a long-term

nature do not fulfill the criteria of being solely payments of

principal and interest. These investments are measured at fair

value using quoted market rates, discounted cash flow models

or other appropriate valuation methods as of the reporting date.

Fair value adjustments, foreign exchange gains and losses, and

realized gains and losses from the disposal of these investments

are mainly recognized in financial income and expenses.

Other current financial assets include the current part of other

non-current financial assets as well as short-term loan

receivables measured at amortized cost using the effective

interest method.

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand as

well as highly liquid, fixed income and money market

investments that are readily convertible to known amounts of

cash with maturities at acquisition of three months or less, as

well as bank deposits with maturities or contractual call periods

at acquisition of three months or less. Due to the high credit

quality and short-term nature of these investments, there is an

insignificant risk of change in value. Investments in money

market funds that have a risk profile consistent with the

aforementioned criteria are also classified as cash equivalents.

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Investments that have cash flows that are solely payments of

principal and interest are measured at amortized cost using the

effective interest method whereas all other investments are

classified as fair value through profit and loss, with fair value

adjustments and foreign exchange gains and losses recognized

in financial income and expenses. The fair values of these

investments are based on publicly available market information.

Financial liabilities

Interest-bearing liabilities

Interest-bearing liabilities are measured at amortized cost using

the effective interest method. Long-term and short-term

interest-bearing liabilities include issued bonds and other

borrowings. Short-term interest-bearing liabilities also include

the current portion of long-term interest-bearing liabilities and

collaterals for derivative transactions.

Other financial liabilities

In 2024, other financial liabilities included a liability related to

Nokia's share buyback program.

In 2024, other financial liabilities also included a liability related

to a contractual arrangement Nokia entered into with China

Huaxin Post & Telecommunication Economy Development

Center (China Huaxin), the non-controlling shareholder in Nokia

Shanghai Bell (NSB), in 2017. The arrangement provided China

Huaxin with the right to fully transfer its ownership interest in

NSB to Nokia and Nokia with the right to purchase China

Huaxin’s ownership interest in NSB. To reflect this, Nokia

derecognized the non-controlling interest in NSB and

recognized a level 3 financial liability.

This financial liability was measured based on the expected cash

settlement with any changes recorded in financial income and

expenses. The measurement of the financial liability involved

estimation of the acquisition price and the distribution of

excess cash balances. Unobservable valuation inputs included

certain financial performance metrics of NSB. No individual

input had a significant impact on the total fair value.

Trade payables

Trade payables are carried at invoiced amount in the statement

of financial position. Trade payables include balances payable to

suppliers under reverse factoring arrangements with financial

institutions. The related payments are classified as cash flows

from operating activities (refer to Note 5.4. Financial risk

management).

Interest-bearing loans and other borrowings

All borrowings presented in the table below are senior unsecured and have no financial covenants.

					Carrying amount m(1)
Issuer/borrower	Instrument	Currency	Nominal (million)	Final maturity	2025
Nokia Corporation	EIB R&D Loan	EUR	500	2/2025	—
Nokia Corporation	NIB R&D Loan	EUR	83	5/2025	—
Nokia Corporation	2.375% Senior Notes	EUR	292	5/2025	—
Nokia Corporation	2.00% Senior Notes	EUR	630	3/2026	630
Nokia Corporation	4.375% Senior Notes	USD	500	6/2027	418
Nokia of America Corporation	6.50% Senior Notes	USD	74	1/2028	63
Nokia Corporation	3.125% Senior Notes	EUR	500	5/2028	490
Nokia of America Corporation	6.45% Senior Notes	USD	206	3/2029	176
Nokia Corporation	4.375% Sustainability-linked Senior Notes(2)	EUR	500	8/2031	503
Nokia Corporation	NIB R&D Loan(3)	EUR	250	10/2032	250
Nokia Corporation	6.625% Senior Notes	USD	500	5/2039	417
Various Group companies	Other borrowings(4)				466
Total					3 413

All values are in Euros.

(1)Carrying amount includes EUR 15 million of fair value losses (EUR 46 million in 2024) related to fair value hedge accounting relationships, including EUR 120 million of fair value

gains (EUR 137 million in 2024) related to discontinued fair value hedge accounting relationships that are amortized over the life of the respective senior notes.

(2)The bond has a one-time redemption premium at maturity of EUR 4 million in case Nokia does not meet its commitment to reduce its greenhouse gas (GHG) emissions (in tCO2e)

across its value chain (Scope 1, 2, and 3) by 50% between 2019 and 2030. This target is one of Nokia’s key sustainability targets and has been selected to be the Sustainability

Performance Target in Nokia’s Sustainable Finance Framework that enables the issuance of sustainability-linked financing instruments.

(3)The loan from Nordic Investment Bank (NIB) is repayable in two installments in 2031 and 2032.

(4)At 31 December 2025, other borrowings contained the M&A loan of EUR 399 million, which was drawn to acquire China Huaxin's ownership interest in Nokia Shanghai Bell (NSB).

The loan has been fully repaid during January 2026.

Changes in level 3 financial assets and liabilities measured at fair value

	2025		2024
EURm	Financial assets	Financial liabilities	Financial assets	Financial liabilities
1 January	865	(533)	779	(499)
Net (losses)/gains in income statement	(66)	(5)	40	(25)
Additions(1)	111	—	96	(13)
Deductions(1)	(52)	501	(45)	16
Transfers out of level 3	—	—	(5)	—
Other movements	(1)	—	—	(12)
31 December	857	(37)	865	(533)

(1)For level 3 financial assets, additions mainly include capital contributions to venture funds and deductions mainly include distributions from venture funds.

A net loss of EUR 70 million (net gain of EUR 17 million in 2024) related to level 3 financial instruments held at 31 December 2025 was

included in the profit and loss during 2025. In 2025, deductions in level 3 financial liabilities primarily relate to the purchase of China

Huaxin’s non-controlling ownership interest in NSB. Nokia had exercised its call option, outlined in NSB’s shareholders' agreement, in

2024, to initiate the process to become the sole shareholder in NSB. The purchase was completed in December 2025 with the cash

settlement amounting to EUR 501 million (the financial liability representing the estimated cash settlement was EUR 487 million in

2024).

| 173 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

5.3. Derivative assets and liabilities

Accounting policies

Fair value

All derivatives are recognized initially at fair value on the date

a derivative contract is entered into and subsequently

remeasured at fair value. The method of recognizing the

resulting gain or loss varies according to whether the

derivatives are designated and qualify under hedge accounting.

Foreign exchange forward contracts are valued at market-

forward exchange rates. Changes in fair value are measured

by comparing these rates with the original contract-forward

rate. Currency options are valued at each reporting date by

using the Garman & Kohlhagen option valuation model.

Interest rate swaps and cross-currency swaps are valued

using the discounted cash flow method.

Hedge accounting

Nokia applies hedge accounting on certain foreign exchange

forward contracts, options or option strategies, and interest

rate derivatives. Qualifying options and option strategies

have zero net premium, or a net premium paid. For option

structures, the critical terms of the purchased and written

options are the same and the notional amount of the written

option component is not greater than that of the purchased

option.

In the fair valuation of foreign exchange forward contracts,

Nokia separates the forward element and considers it to be

the cost of hedging for foreign exchange forward contracts.

In the fair valuation of foreign exchange option contracts,

Nokia separates the time value and considers it to be the cost

of hedging for foreign exchange option contracts. In the fair

valuation of cross-currency swaps, Nokia separates the

foreign currency basis spread and considers it to be the cost

of hedging for cross-currency swaps.

Hedge effectiveness is assessed at inception and

subsequently on a quarterly basis during the hedge

relationship to ensure that an economic relationship exists.

As Nokia only enters in hedge relationships where the critical

terms match, the assessment of effectiveness is done on a

qualitative basis with no significant ineffectiveness expected.

Presentation in the statement of cash flows

The cash flows of a hedge are classified as cash flows from

operating activities in cases where the underlying hedged items

relate to Nokia’s operating activities. When a derivative contract

is accounted for as a hedge of an identifiable position relating to

financing or investing activities, the cash flows of the contract

are classified in the same way as the cash flows of the position

being hedged. Cash flows of derivatives used in hedging the

foreign exchange risk of Nokia’s cash position are presented in

cash flows from investing activities.

Cash flow hedges: hedging of forecast foreign currency

denominated sales and purchases

Nokia applies cash flow hedge accounting primarily to foreign

exchange exposure that arises from highly probable forecast

operative business transactions. The risk management strategy

is to hedge material net exposures (identified standard net sales

exposure minus identified standard costs exposure) by using

foreign exchange forwards and foreign exchange options in a

layered hedging style that follows defined hedging level ranges

and hedge maturities in quarterly time buckets. The hedged item

must be highly probable and present an exposure to variations in

cash flows that could ultimately affect profit or loss.

For qualifying foreign exchange forwards and foreign exchange

options, the change in fair value that reflects the change in spot

exchange rates on a discounted basis is recognized in hedging

reserve through other comprehensive income (refer to Note 5.1.

Equity). The changes in the forward element of the foreign

exchange forwards and the time value of the options that relate

to hedged items are deferred in the cost of hedging reserve

through other comprehensive income (refer to Note 5.1. Equity)

and are subsequently accounted for in the same way as the spot

element or intrinsic value.

In each quarter, Nokia evaluates whether the forecast sales and

purchases are still expected to occur. If a portion of the hedged

cash flow is no longer expected to occur, the hedge accounting

criteria are no longer met and all related deferred gains or losses

are derecognized from fair value and other reserves and

recognized in other operating income and expenses in the

income statement.

If the hedged cash flow ceases to be highly probable, but is

still expected to occur, accumulated gains and losses remain

in fair value and other reserves until the hedged cash flow

affects profit or loss.

Nokia’s risk management objective is to hedge forecast cash

flows until the related revenue has been recognized. Each

hedge relationship is discontinued during the quarter when

the hedge matures, which is also the quarter that it had been

designated to hedge. At this point, the accumulated gain or

loss of cash flow hedges is reclassified to other operating

income and expenses in the income statement. In cases

where the forecast amount of revenue is not recognized

during a quarter, the full accumulated gain or loss of cash

flow hedges designated for said quarter is still reclassified

and the portion related to forecast revenue that was not

recognized is disclosed as hedge ineffectiveness.

As cash flow hedges primarily mature in the same quarter as

the hedged item, there is no significant ineffectiveness

resulting from the time value of money. Nokia will validate the

magnitude of the impact of discounting related to the

amount of gain or loss recognized in fair value and other

reserves on a quarterly basis.

Cash flow and fair value hedges: hedging of foreign

exchange risk of future interest cash flows

Nokia also applies cash flow hedging to future interest cash

flows in foreign currency related to issued bonds. These

future interest cash flows are hedged with cross-currency

swaps that have been bifurcated and designated partly as fair

value hedges (see Fair value hedges: hedging of interest rate

exposure below) to hedge both the foreign exchange and

interest rate benchmark risk component of the issued bond,

and partly as cash flow hedges to hedge the foreign exchange

risk related to the remaining portion of interest cash flows on

the issued bond. The accumulated gain or loss for the part of

these cross-currency swaps designated as cash flow hedges

is initially recorded in hedging reserve through other

comprehensive income and reclassified to profit or loss at

the time when the related interest cash flows are settled.

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Fair value hedges: hedging of interest rate exposure

Nokia applies fair value hedge accounting to reduce exposure

to fair value fluctuations of interest-bearing liabilities due to

changes in interest rates and foreign exchange rates. Nokia

uses interest rate swaps and cross-currency swaps aligned

with the hedged items to hedge interest rate risk and

associated foreign exchange risk.

Nokia has entered into long-term borrowings mainly at fixed

rates and has swapped most of them into floating rates in

line with a defined target interest profile. Nokia aims to

mitigate the adverse impacts from interest rate fluctuations

by continuously managing net interest exposure resulting

from financial assets and liabilities by setting appropriate risk

management benchmarks and risk limits. The hedged item is

identified as a proportion of the outstanding loans up to the

notional amount of the swaps as appropriate to achieve the

risk management objective. Nokia enters into interest rate

swaps that have similar critical terms to the hedged item,

such as reference rate, reset dates, payment dates,

maturities and notional amount and hence Nokia expects that

there will be no significant ineffectiveness. Nokia has not

entered into interest rate swaps where it would be paying

fixed rates.

Nokia’s borrowings are carried at amortized cost. Changes in

the fair value of derivatives designated and qualifying as fair

value hedges, together with any changes in the fair value of

hedged liabilities attributable to the hedged risk, are recorded

in financial income and expenses in the income statement.

Nokia separates the foreign currency basis spread from cross-

currency swaps and excludes it from the hedged risk as cost

of hedging that is initially recognized and subsequently

measured at fair value and recorded in the cost of hedging

reserve through other comprehensive income. If a hedge

relationship no longer meets the criteria for hedge

accounting, hedge accounting ceases, the cost of hedging

recorded in the cost of hedging reserve is immediately

expensed and any fair value adjustments made to the carrying

amount of the hedged item while the hedge was effective are

recognized in financial income and expenses in the income

statement based on the effective interest method.

Hedges of net investments in foreign operations

Nokia applies hedge accounting for its foreign currency hedging

of selected net investments. The hedged item can be an amount

equal to or less than the carrying amount of the net assets of

the foreign operation in the statement of financial position. The

risk management strategy is to protect the euro counter value

of the portion of this exposure expected to materialize as non-

euro cash repatriation in the foreseeable future.

For qualifying foreign exchange forwards, foreign exchange

options and option strategies, the change in fair value that

reflects the change in spot exchange rates is recognized in

translation differences in shareholders’ equity (refer to Note 5.1.

Equity). The changes in the forward element of foreign exchange

forwards as well as the changes in the time value of options

(collectively known as the “cost of hedging”) is recognized in the

cost of hedging reserve through other comprehensive income.

The cost of hedging at the date of designation of the foreign

exchange forward or option contract as a hedging instrument is

amortized to financial income and expenses in the income

statement over the duration of the contract. Hence, in each

reporting period, the change in fair value of the forward element

of the foreign exchange forward contract or the time value of the

option contract is recorded in the cost of hedging reserve through

other comprehensive income, while the amortization amount is

reclassified from the cost of hedging reserve to profit or loss.

The cumulative amount or proportionate share of changes in

the fair value of qualifying hedges deferred in translation

differences is recognized as gain or loss on disposal of all or part

of a foreign subsidiary.

Derivatives not designated in hedge accounting

relationships carried at fair value through profit and loss

For derivatives not designated under hedge accounting, but

hedging identifiable forecast exposures such as anticipated

foreign currency denominated sales and purchases, the gains

and losses are recognized in other operating income and

expenses in the income statement. The gains and losses on

all other derivatives not designated under hedge accounting

are recognized in financial income and expenses.

Embedded derivatives included in contracts are identified and

monitored by Nokia. For host contracts that are not financial

assets containing embedded derivatives that are not closely

related, the embedded derivatives are separated and

measured at fair value at each reporting date with changes in

fair value recognized in financial income and expenses in the

income statement. For host contracts that are financial

assets containing embedded derivatives, the whole contract

is measured at fair value at each reporting date with changes

in fair value recognized in financial income and expenses in

the income statement.

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Derivatives

	2025				2024
	Assets		Liabilities		Assets		Liabilities
EURm	Fair value(1)	Notional(2)	Fair value(1)	Notional(2)	Fair value(1)	Notional(2)	Fair value(1)	Notional(2)
Cash flow hedges
Foreign exchange forward contracts	30	807	(5)	351	7	381	(19)	733
Currency options bought	4	563	—	—	—	90	—	—
Cash flow and fair value hedges(3)
Cross-currency swaps	—	—	(178)	851	15	241	(97)	722
Fair value hedges
Interest rate swaps	22	1 255	(3)	375	28	1 130	(10)	792
Hedges on net investment in foreign subsidiaries
Foreign exchange forward contracts	1	88	(2)	460	3	527	(8)	971
Derivatives not designated in hedge accounting relationships carried at fair value through profit and loss
Foreign exchange forward contracts	65	5 184	(70)	3 815	110	7 129	(165)	6 124
Currency options bought	—	—	—	—	15	770	—	—
Embedded derivatives(4)	5	311	(8)	183	19	996	—	—
Total	127	8 208	(266)	6 035	197	11 264	(299)	9 342

(1)Included in other current financial assets and other financial liabilities in the statement of financial position.

(2)Includes the gross amount of all notional values for contracts that have not yet been settled or canceled. The amount of notional value outstanding is not necessarily a measure or indication of market risk as the exposure of certain contracts may be offset by that of other

contracts.

(3)Cross-currency swaps have been designated partly as fair value hedges and partly as cash flow hedges.

(4)Embedded derivatives are related to customer contracts.

To manage interest rate and foreign exchange risks related to Nokia’s interest-bearing liabilities, Nokia has designated the following cross-currency swaps as hedges under both fair value hedge accounting

and cash flow hedge accounting, and interest rate swaps as hedges under fair value hedge accounting at 31 December:

				Notional (million in currency)		Fair value m
Entity	Instrument	Currency	Maturity	2025	2024	2025
Nokia Corporation	Interest rate swaps	EUR	5/2025	—	292	—
Nokia Corporation	Interest rate swaps	EUR	3/2026	630	630	8
Nokia Corporation	Cross-currency swaps	USD	6/2027	500	500	(29)
Nokia Corporation	Interest rate swaps	EUR	5/2028	500	500	(2)
Nokia Corporation	Interest rate swaps	EUR	8/2031	500	500	13
Nokia Corporation	Cross-currency swaps	USD	5/2039	500	500	(149)
Total						(159)

All values are in Euros.

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5.4. Financial risk management

General risk management principles

Nokia has a systematic and structured approach to risk

management. Key risks and opportunities are primarily

identified against business targets either in business operations

or as an integral part of strategy and financial planning. Risk

management covers strategic, operational, financial, compliance

and reputational risks. Key risks and opportunities are analyzed,

managed and monitored as part of business performance

management. The principles documented in the Nokia

Enterprise Risk Management Policy, which is approved by the

Audit Committee of the Board, require risk management and its

elements to be integrated into key processes. One of the core

principles is that the business or function head is also the risk

owner, although all employees are responsible for identifying,

analyzing and managing risks, as appropriate, given their roles

and duties. Nokia’s overall risk management concept is based on

managing the key risks that would prevent Nokia from meeting

its objectives, rather than focusing on eliminating risks. In

addition to the principles defined in the Nokia Enterprise Risk

Management Policy, other key policies and operating

procedures reflect the implementation of specific aspects of

risk management, including financial risk management.

Financial risks

The objective for treasury activities is to guarantee sufficient

funding at all times and to identify, evaluate and manage

financial risks. Treasury activities support this aim by mitigating

the adverse effects on the profitability of the underlying

business caused by fluctuations in the financial markets, and by

managing the capital structure by balancing the levels of liquid

assets and financial borrowings. Treasury activities are

governed by the Nokia Treasury Policy approved by the

President and CEO, which provides principles for overall

financial risk management and determines the allocation of

responsibilities for financial risk management activities.

Operating procedures approved by the Chief Financial Officer

(CFO) cover specific areas such as foreign exchange risk,

interest rate risk, credit risk and liquidity risk, as well as the use

of derivative financial instruments in managing these risks.

Nokia is risk averse in its treasury activities.

Financial risks are divided into market risk covering foreign

exchange risk and interest rate risk, financial credit risk, and

liquidity risk.

Market risk

Foreign exchange risk

Nokia operates globally and is exposed to transaction and

translation foreign exchange risks. The objective of foreign

exchange risk management is to mitigate adverse impacts from

foreign exchange fluctuations on Nokia’s profitability and cash

flows. Treasury applies a global portfolio approach to manage

foreign exchange risks within approved guidelines and limits.

Transaction risk arises from foreign currency denominated

assets and liabilities together with foreign currency denominated

future cash flows. Transaction exposures are managed in the

context of various functional currencies of Group companies.

Material transactional foreign exchange exposures are hedged,

unless hedging would be uneconomical due to market liquidity

and/or hedging cost. Exposures are defined using transaction

nominal values. Exposures are mainly hedged with derivative

financial instruments, such as foreign exchange forward

contracts and foreign exchange options with most of the

hedging instruments having a duration of less than a year.

A layered hedging approach is typically used for hedging of

highly probable forecast foreign currency denominated cash

flows with quarterly hedged items defined based on set hedge

ratio ranges for each successive quarter. Hedged items defined

for successive quarters are hedged with foreign exchange

forward contracts and foreign exchange options with a hedge

ratio of 1:1. Hedging level ranges are adjusted on a monthly

basis including hedging instrument designation and

documentation as appropriate. In cases where hedges exceed

the hedge ratio range for any specific quarter, the hedge

portfolio for that specific quarter is adjusted accordingly.

As Nokia has entities where the functional currency is other than

the euro, the shareholders’ equity is exposed to fluctuations in

foreign exchange rates. Changes in shareholders’ equity caused

by movements in foreign exchange rates are shown as currency

translation differences in the consolidated financial statements.

The risk management strategy is to protect the euro counter

value of the portion of this exposure expected to materialize as

foreign currency repatriation cash flows in the foreseeable

future. Exposures are mainly hedged with derivative financial

instruments, such as foreign exchange forward contracts and

foreign exchange options with most of the hedging instruments

having a duration of less than a year. Hedged items are defined

based on conservative expectations of repatriation cash flows

based on a range of considerations. Net investment exposures

are reviewed, hedged items designated, and hedging levels

adjusted at minimum on a quarterly basis with a hedge ratio of

1:1. Additionally, hedging levels are adjusted whenever there are

significant events impacting expected repatriation cash flows.

The foreign exchange risk arising from foreign currency

denominated interest-bearing liabilities is primarily hedged

using cross-currency swaps that are also used to manage

Nokia’s interest rate profile (refer to the interest rate risk

section below).

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Notional amounts in currencies that represent a significant portion of the currency mix in outstanding financial instruments and other hedged items at 31 December:

	2025				2024
EURm	USD(1)	CNY	INR	JPY	USD(1)	CNY	INR	GBP
Foreign exchange exposure designated as hedged item for cash flow hedging, net(2)	1 138	(201)	(215)	252	450	(220)	(175)	222
Foreign exchange exposure designated as hedged item for net investment hedging(3)	—	218	25	—	135	783	208	152
Foreign exchange exposure from interest-bearing liabilities(4)	(723)	—	—	—	(786)	—	—	—
Foreign exchange exposure from items on the statement of financial position, excluding interest-bearing liabilities, net	1 460	(229)	(673)	189	1 296	(822)	(718)	(100)
Other foreign exchange derivatives, carried at fair value through profit and loss, net(5)	(940)	191	341	(232)	676	813	200	83

(1)Includes foreign exchange exposures from US dollar pegged currencies.

(2)Includes foreign exchange exposures from forecast cash flows related to sales and purchases. In some currencies, especially the US dollar, Nokia has substantial foreign exchange exposures in both estimated cash inflows and outflows. These underlying exposures have been

hedged.

(3)Includes net investment exposures in foreign operations. These underlying exposures have been hedged.

(4)Includes interest-bearing liabilities that have been hedged with cross-currency swaps and foreign exchange forwards. Refer to Note 5.3. Derivative assets and liabilities.

(5)Items on the statement of financial position are hedged by a portion of foreign exchange derivatives not designated in a hedge relationship and carried at fair value through profit and loss. Embedded derivatives are included in this line item.

Effects of hedge accounting on the financial position and performance

Nokia is using several types of hedge accounting programs to manage its foreign exchange and interest rate risk exposures; refer to Note 5.3. Derivative assets and liabilities. The effect of these programs

on Nokia’s financial position and performance at 31 December:

EURm	Cash flow hedges(1)	Net investment hedges(1)	Fair value and cash flow hedges(1)
2025
Carrying amount of hedging instruments	29	(2)	(180)
Notional amount of hedging instruments	(1 594)	(547)	2 481
Notional amount of hedged items	1 594	547	(2 481)
Change in intrinsic value of hedging instruments since 1 January	120	112	34
Change in value of hedged items used to determine hedge effectiveness	(116)	(112)	(31)
2024
Carrying amount of hedging instruments	(12)	(5)	(88)
Notional amount of hedging instruments	(1 043)	(1 498)	2 885
Notional amount of hedged items	1 043	1 498	(2 885)
Change in intrinsic value of hedging instruments since 1 January	(3)	(39)	10
Change in value of hedged items used to determine hedge effectiveness	6	39	(13)

(1)No significant ineffectiveness has been recorded during the periods presented and economic relationships have been fully effective.

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The methodology for assessing foreign exchange risk

exposures: Value-at-Risk

Nokia uses the Value-at-Risk (VaR) methodology to assess

exposures to foreign exchange risks. The VaR-based

methodology provides estimates of potential fair value losses in

market risk-sensitive instruments as a result of adverse

changes in specified market factors, at a specified confidence

level over a defined holding period. Nokia calculates the foreign

exchange VaR using the Monte Carlo method, which simulates

random values for exchange rates in which Nokia has exposures

and takes the non-linear price function of certain derivative

instruments into account. The VaR is determined using

volatilities and correlations of rates and prices estimated from a

sample of historical market data, at a 95% confidence level,

using a one-month holding period. To put more weight on

recent market conditions, an exponentially weighted moving

average is performed on the data with an appropriate decay

factor. This model implies that, within a one-month period, the

potential loss will not exceed the VaR estimate in 95% of

possible outcomes.

In the remaining 5% of possible outcomes, the potential loss

will be at minimum equal to the VaR figure and, on average,

substantially higher. The VaR methodology relies on a number

of assumptions, which include the following: risks are measured

under average market conditions, changes in market risk

factors follow normal distributions, future movements in

market risk factors are in line with estimated parameters and

the assessed exposures do not change during the holding

period. Thus, it is possible that, for any given month, the

potential losses at a 95% confidence level are different and

could be substantially higher than the estimated VaR.

The VaR calculation includes foreign currency denominated

monetary financial instruments, such as current financial

investments, loans and trade receivables, cash, and loans and

trade payables; foreign exchange derivatives carried at fair

value through profit and loss that are not in a hedge

relationship and are mostly used to hedge the statement of

financial position foreign exchange exposure, as well as

embedded derivatives; and foreign exchange derivatives

designated as forecast cash flow hedges, fair value hedges and

net investment hedges as well as the exposures designated, as

hedged items for these hedge relationships.

The VaR risk measures for Nokia’s sensitivity to foreign exchange risks are presented in the Total VaR column and the simulated

impact to financial statements is presented in the profit, other comprehensive income (OCI) and cumulative translation adjustment

(CTA) columns in the table below.

	2025				2024
		Simulated impact on financial statements				Simulated impact on financial statements
EURm	Total VaR	Profit	OCI	CTA	Total VaR	Profit	OCI	CTA
31 December	12	10	15	—	36	40	23	—
Average for the year	25	19	37	—	19	15	21	—
Range for the year	12-41	10-34	13-56	0-0	8-36	9-40	11-25	0-0

The most significant foreign exchange hedging instruments under cash flow, net investment and fair value hedge accounting at 31

December:

					Maturity breakdown of notional amounts (m)(1)
	Currency	Fair value<br><br>(EURm)	Weighted<br><br>average hedged<br><br>rate	Total	Within 3 months
2025
Cash flow hedge accounting	GBP	—	0.8654	(151)	(38)
	JPY	15	171.7178	(169)	(27)
	USD	9	1.1599	(1 125)	(266)
Net investment hedge accounting	CNY	(1)	8.2658	(218)	(218)
2024
Cash flow hedge accounting	GBP	(5)	0.8423	(222)	(69)
	USD	(11)	1.0670	(459)	(170)
Net investment hedge accounting	CNY	(6)	7.6474	(783)	(783)
	INR	—	88.8518	(208)	(186)

All values are in Euros.

(1) Negative notional amounts indicate that hedges sell currency, and positive notional amounts indicate that hedges buy currency.

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Interest rate risk

Nokia is exposed to interest rate risk either through market

value fluctuations of items on the statement of financial

position (price risk) or through changes in interest income or

expenses (refinancing or reinvestment risk). Interest rate risk

mainly arises through interest-bearing liabilities and assets.

Estimated future changes in cash flows and the structure of the

statement of financial position also expose Nokia to interest

rate risk.

The objective of interest rate risk management is to mitigate

adverse impacts arising from interest rate fluctuations on the

income statement, cash flow and financial assets and liabilities

while taking into consideration Nokia’s target capital structure

and the resulting net interest rate exposure. Nokia has entered

into long-term borrowings mainly at fixed rates and swapped

most of them into floating rates, in line with a defined target

interest profile. Nokia has not entered into interest rate swaps

where it would be paying fixed rates. Nokia aims to mitigate the

adverse impacts from interest rate fluctuations by continuously

managing net interest rate exposure arising from financial

assets and liabilities, by setting appropriate risk management

benchmarks and risk limits.

Treasury monitors and manages interest rate exposure centrally.

Nokia uses selective sensitivity analyses to assess and measure

interest rate exposure arising from interest-bearing assets,

interest-bearing liabilities and related derivatives. Sensitivity

analysis determines an estimate of potential fair value changes

in market risk-sensitive instruments by varying interest rates in

currencies in which Nokia has material amounts of financial

assets and liabilities while keeping all other variables constant.

Sensitivities to credit spreads are not reflected in the sensitivity

analysis.

Interest rate profile of items under interest rate risk management at 31 December:

	2025		2024
EURm	Fixed rate	Floating rate(1)	Fixed rate	Floating rate(1)
Non-current interest-bearing financial investments	368	—	457	—
Current interest-bearing financial investments	172	789	133	1 528
Cash and cash equivalents	55	5 407	54	6 569
Interest-bearing liabilities	(3 145)	(268)	(3 150)	(737)
Financial assets and liabilities before derivatives	(2 550)	5 928	(2 506)	7 360
Interest rate derivatives	2 322	(2 322)	2 820	(2 820)
Financial assets and liabilities after derivatives	(228)	3 606	314	4 540

(1)All cash equivalents and derivative transaction-related collaterals with initial maturity of three months or less are considered floating rate for the purposes of interest rate risk

management.

Nokia’s sensitivity to interest rate exposure in the investment and debt portfolios is presented in the fair value column in the table

below with simulated impact to the financial statements presented in the profit and other comprehensive income (OCI) columns.

	2025			2024
	Impact on	Impact on	Impact on	Impact on	Impact on	Impact on
EURm	fair value	profit	OCI	fair value	profit	OCI
Interest rates - increase by 100 basis points	9	3	1	3	4	—
Interest rates - decrease by 100 basis points	(9)	(3)	(1)	(2)	(5)	—

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Credit risk

Credit risk refers to the risk that a counterparty will default on

its contractual obligations resulting in financial loss to Nokia.

Credit risk arises from credit exposures to customers, including

outstanding receivables, financial guarantees and committed

transactions, as well as financial institutions, including bank and

cash, fixed income and money market investments, and

derivative financial instruments. Credit risk is managed

separately for business-related and financial credit exposures.

Financial instruments contain an element of risk resulting from

changes in the market price due to counterparties becoming

less creditworthy or risk of loss due to counterparties being

unable to meet their obligations. Financial credit risk is

measured and monitored centrally by Treasury. Financial credit

risk is managed actively by limiting counterparties to a

sufficient number of major banks and financial institutions, and

by monitoring the creditworthiness and the size of exposures

continuously. Additionally, Nokia enters into netting

arrangements with all major counterparties, which give the right

to offset in the event that the counterparty would not be able to

fulfill its obligations. Nokia enters into collateral agreements

with most counterparties, which require counterparties to post

collateral against derivative receivables.

Investment decisions are based on strict creditworthiness and

maturity criteria as defined in the Treasury-related policies and

procedures. As a result of this investment policy approach and

active management of outstanding investment exposures,

Nokia has not been subject to any material credit losses in its

financial investments in the years presented. Due to the high

credit quality of Nokia’s financial investments, the expected

credit loss for these investments is deemed insignificant based

on 12 months’ expected credit losses at 31 December 2025. For

information on expected credit losses for customer-related

balances, refer to Note 4.5. Trade receivables and other

customer-related balances.

Nokia has restricted bank deposits primarily related to employee

benefits of EUR 61 million (EUR 114 million in 2024) that are

presented in other non-current financial assets. Nokia has

assessed the counterparty credit risk for these financial assets

and concluded that expected credit losses are not significant.

Outstanding non-current and current interest-bearing financial investments, cash equivalents and cash classified by credit rating

grades ranked in line with S&P Global Ratings categories at 31 December:

			Cash equivalents and interest-bearing financial investments
EURm	Rating(1)	Cash	Due within 3<br><br>months	Due between 3<br><br>and 12 months	Due between 1<br><br>and 3 years	Due between 3<br><br>and 5 years	Due beyond 5<br><br>years	Total(2)(3)
2025	AAA	—	789	—	11	—	—	800
	AA+ – AA-	938	273	—	34	6	—	1 251
	A+ – A-	1 654	1 874	106	365	57	303	4 359
	BBB+ – BBB-	104	69	8	64	3	—	248
	Other	120	13	—	—	—	—	133
Total		2 816	3 018	114	474	66	303	6 791
2024	AAA	—	1 496	—	8	—	—	1 504
	AA+ – AA-	720	727	12	27	6	—	1 492
	A+ – A-	2 004	2 346	380	241	157	102	5 230
	BBB+ – BBB-	48	244	15	63	26	—	396
	Other	117	2	—	—	—	—	119
Total		2 889	4 815	407	339	189	102	8 741

(1)Bank Parent Company ratings are used here for bank groups. Actual bank subsidiary ratings may differ from the Bank Parent Company rating.

(2)Non-current and current interest-bearing financial investments and cash equivalents include bank deposits, structured deposits, investments in money market funds and

investments in fixed income instruments.

(3)Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 495 million (EUR 306

million in 2024) of instruments that have a call period of less than three months.

The following table sets out financial assets and liabilities subject to offsetting under enforceable master netting agreements and

similar arrangements at 31 December. To reconcile the items presented to the statement of financial position, items that are not

subject to offsetting would need to be included, refer to Note 5.3. Derivative assets and liabilities.

		Related amounts not set off in the statement of financial position
EURm	Net amounts of financial assets/<br><br>(liabilities) presented in the<br><br>statement of financial position	Financial instruments<br><br>assets/(liabilities)	Cash collateral<br><br>(received)/pledged	Net amount
2025
Derivative assets	121	(103)	(17)	1
Derivative liabilities	(258)	103	148	(7)
Total	(137)	—	131	(6)
2024
Derivative assets	178	(143)	(33)	2
Derivative liabilities	(296)	143	147	(6)
Total	(118)	—	114	(4)

The financial instruments subject to enforceable master netting agreements and similar arrangements are not offset in the statement

of financial position as there is no intention to settle net or realize the asset and settle the liability simultaneously.

| 181 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

Liquidity risk

Liquidity risk is defined as financial distress or extraordinarily

high financing costs arising from a shortage of liquid funds in a

situation where outstanding debt needs to be refinanced or

where business conditions unexpectedly deteriorate and require

financing. Transactional liquidity risk is defined as the risk of

executing a financial transaction below fair market value or not

being able to execute the transaction at all within a specific

period of time. The objective of liquidity risk management is to

maintain sufficient liquidity, and to ensure that it is readily

available without endangering its value in order to avoid

uncertainty related to financial distress at all times.

Nokia aims to secure sufficient liquidity at all times through

efficient cash management and by investing primarily in highly

liquid money market investments. Depending on its overall

liquidity position, Nokia may pre-finance or refinance upcoming

debt maturities before contractual maturity dates. The

transactional liquidity risk is minimized by entering into

transactions where proper two-way quotes can be obtained

from the market. Nokia aims to ensure flexibility in funding by

maintaining committed and uncommitted credit lines.

Nokia's trade payables include balances payable to suppliers

under reverse factoring arrangements with financial

institutions. These balances are classified as trade payables

since the payments are made to the banks on very similar terms

as to suppliers. Possible extensions to payment terms beyond

the due dates agreed with suppliers are insignificant and there

are no special guarantees securing the payments to be made.

These arrangements do not result in a significant liquidity risk

given the limited amount of liabilities subject to supplier finance

arrangements and Nokia's access to other sources of finance.

Liabilities under supplier finance arrangements at 31 December:

Carrying amount of liabilities (EURm)	2025	2024
Presented within trade payables	861	564
Of which suppliers have received payment	241	250
Range of payment due dates after invoice date (days)	2025	2024
Liabilities that are part of the arrangements	60-120	60-90
Comparable trade payables that are not part of<br><br>an arrangement	30-120	30-120

Nokia’s significant credit facilities and funding programs at 31 December:

				Utilized (million)
Committed/uncommitted	Financing arrangement	Currency	Nominal (million)	2025	2024
Committed	Revolving Credit Facility(1)	EUR	2 000	—	—
Committed	EIB R&D Loan Facility(2)	EUR	435	—	—
Uncommitted	Finnish Commercial Paper Programme	EUR	750	—	—
Uncommitted	Euro-Commercial Paper Programme	EUR	1 500	—	—
Uncommitted	Euro Medium Term Note Programme(3)	EUR	5 000	1 630	1 922
Total				1 630	1 922

(1)At 31 December 2025, Nokia had committed Revolving Credit Facilities (RCF) with nominal values of EUR 1 500 million maturing in June 2030 (with two one-year extension options)

and EUR 500 million maturing in March 2027 (with a one-year extension options). On 3 March 2026, Nokia voluntarily canceled the EUR 500 million RCF with the effective date of 6

March 2026.

(2)The availability period of the loan facility ends in December 2027.

(3)All euro-denominated bonds have been issued under the Euro Medium Term Note Programme.

Certain changes in financial liabilities do not have a direct impact on Nokia’s liquidity position. A disaggregation of cash and non-cash

changes in lease liabilities, interest-bearing liabilities and associated derivatives arising from financing activities has been presented in

the table below.

EURm	Long-term<br><br>interest-bearing<br><br>liabilities	Short-term<br><br>interest-bearing<br><br>liabilities	Derivatives held to<br><br>hedge long-term<br><br>borrowings(1)	Lease liabilities(2)	Total
1 January 2025	2 918	969	88	863	4 838
Cash flows	(724)	360	—	(221)	(585)
Non-cash changes:
Acquisitions through business combinations	—	6	—	57	63
Changes in foreign exchange rates	(124)	(3)	99	(41)	(69)
Changes in fair value	13	—	(7)	—	6
Reclassification between long-term and short-term	246	(246)	—	—	—
Additions(3)	—	—	—	342	342
Other	—	(2)	—	—	(2)
31 December 2025	2 329	1 084	180	1 000	4 593
1 January 2024	3 637	554	174	997	5 362
Cash flows	(361)	(6)	—	(225)	(592)
Non-cash changes:
Changes in foreign exchange rates	64	2	(49)	15	32
Changes in fair value	(5)	—	(37)	—	(42)
Reclassification between long-term and short-term	(417)	417	—	—	—
Liabilities associated with assets held for sale	—	—	—	(30)	(30)
Additions(3)	—	—	—	117	117
Other	—	2	—	(11)	(9)
31 December 2024	2 918	969	88	863	4 838

(1)Includes derivatives designated in fair value and cash flow hedge accounting relationships as well as derivatives not designated in hedge accounting relationship but hedging

identifiable long-term borrowing exposures.

(2)Includes non-current and current lease liabilities. In 2024, cash flows exclude Submarine Networks’ cash flows after it was classified as held for sale and a discontinued operation.

(3)Includes new lease contracts, modifications and remeasurements of existing lease contracts as well as impacts from early terminations of lease contracts.

| 182 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- |

The following table presents an undiscounted, contractual cash flow analysis for lease liabilities, financial liabilities and financial assets presented on the statement of financial position as well as loan

commitments given and obtained. The line-by-line analysis does not directly reconcile with the statement of financial position.

	2025						2024
	Due						Due
EURm	within 3<br><br>months	between 3<br><br>and 12<br><br>months	between 1<br><br>and 3 years	between 3<br><br>and 5 years	beyond 5<br><br>years	Total	within 3<br><br>months	between 3<br><br>and 12<br><br>months	between 1<br><br>and 3 years	between 3<br><br>and 5 years	beyond 5<br><br>years	Total
Non-current financial assets
Non-current interest-bearing financial investments	2	4	373	17	—	396	3	5	359	129	—	496
Other non-current financial assets(1)	—	—	46	1	43	90	—	—	57	8	48	113
Current financial assets
Other current financial assets excluding derivatives(1)	140	90	—	—	—	230	318	99	—	—	—	417
Current interest-bearing financial investments(2)	870	93	—	—	—	963	1 390	279	—	—	—	1 669
Cash and cash equivalents(2)	4 989	134	145	10	244	5 522	6 351	114	80	83	25	6 653
Cash flows related to derivative financial assets net settled:
Derivative contracts – receipts	2	9	9	8	8	36	(6)	3	(1)	(1)	4	(1)
Cash flows related to derivative financial assets gross settled:
Derivative contracts – receipts	4 543	1 792	352	—	—	6 687	5 492	2 471	1 081	114	—	9 158
Derivative contracts – payments	(4 505)	(1 773)	(341)	—	—	(6 619)	(5 428)	(2 416)	(1 017)	(106)	—	(8 967)
Trade receivables	4 275	864	39	—	—	5 178	4 529	933	39	—	—	5 501
Non-current financial and lease liabilities
Long-term interest-bearing liabilities	(8)	(101)	(1 181)	(301)	(1 454)	(3 045)	(21)	(103)	(1 345)	(926)	(1 441)	(3 836)
Long-term lease liabilities	—	—	(315)	(205)	(467)	(987)	—	—	(294)	(172)	(266)	(732)
Other non-current financial liabilities	(11)	—	(9)	(8)	—	(28)	(12)	—	(23)	(10)	—	(45)
Current financial and lease liabilities
Short-term interest-bearing liabilities	(1 095)	(3)	—	—	—	(1 098)	(603)	(386)	—	—	—	(989)
Short-term lease liabilities	(71)	(169)	—	—	—	(240)	(64)	(175)	—	—	—	(239)
Other financial liabilities excluding derivatives(3)	(3)	(7)	—	—	—	(10)	(490)	(2)	—	—	—	(492)
Cash flows related to derivative financial liabilities net settled:
Derivative contracts – payments	(4)	1	1	—	—	(2)	(2)	(14)	(10)	3	—	(23)
Cash flows related to derivative financial liabilities gross settled:
Derivative contracts – receipts	3 635	711	801	56	665	5 868	5 517	1 400	965	160	784	8 826
Derivative contracts – payments	(3 675)	(727)	(835)	(59)	(705)	(6 001)	(5 635)	(1 458)	(1 013)	(174)	(777)	(9 057)
Discounts without performance obligations	(124)	(145)	(20)	—	(5)	(294)	(222)	(149)	(6)	(3)	—	(380)
Trade payables	(2 841)	(102)	(35)	—	—	(2 978)	(3 049)	(126)	(25)	(12)	(1)	(3 213)
Commitments given and obtained
Loan commitments given undrawn(4)	(4)	(3)	—	—	—	(7)	(5)	(6)	—	—	—	(11)
Loan commitments obtained undrawn(5)	(1)	(3)	928	1 496	—	2 420	(1)	148	1 410	—	—	1 557
Investment commitments given undrawn(6)	(221)	—	—	—	—	(221)	(306)	—	—	—	—	(306)

(1)Other non-current financial assets and other current financial assets excluding derivatives mainly include financial receivables from customers and suppliers.

(2)Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 495 million (EUR 306 million in 2024) of instruments that have a call period of less than three months.

(3)In 2024, Other financial liabilities excluding derivatives included a conditional obligation to China Huaxin presented in the earliest period as the exercise period was open.

(4)Loan commitments given undrawn have been included in the earliest period in which they could be drawn or called.

(5)Loan commitments obtained undrawn have been included based on the period in which they expire. These amounts include related commitment fees.

(6)The timing of draw downs for these commitments are dependent on investment decisions of various venture funds and these are typically spread over a time period of several years. For further information on venture fund commitments, refer to Note 6.1. Commitments,

contingencies and legal proceedings.

| 183 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information | | --- | | Section 6 | | --- |

Other

information

This section contains information

on Nokia’s off-balance sheet

commitments and contingencies,

business combinations, Group

structure and related party

transactions, as well as events

after the reporting period.

6.1. Commitments, contingencies and

legal proceedings

Contractual obligations

EURm	Within 1 year	1-5 years	More than 5<br><br>years
2025
Purchase obligations	4 264	617	15
Lease commitments(1)	—	101	731
2024
Purchase obligations	2 538	697	3
Lease commitments(1)	9	86	573

(1)Relates to lease contracts that had not yet commenced as at the reporting date.

At 31 December 2025, Nokia has potential undiscounted future

lease payments of EUR 906 million (EUR 812 million in 2024)

relating to extension options not expected to be exercised and

EUR 97 million (EUR 58 million in 2024) relating to termination

options expected to be exercised that are not included in the

lease liability.

Guarantees and financing commitments

The contingent liabilities in the table below represent the

maximum principal amount of guarantees and financing

commitments, and do not reflect management’s expected

outcomes.

EURm	2025	2024
Guarantees on behalf of Group companies
Guarantees issued by financial institutions
Commercial guarantees(1)	943	964
Non-commercial guarantees	431	498
Corporate guarantees(2)
Commercial guarantees(1)	275	263
Non-commercial guarantees	37	33
Financing commitments
Customer finance commitments(3)	7	11
Investment commitments(4)	221	306

(1)Commercial guarantees are guarantees that are issued in the normal course of

business to Nokia’s customers for the performance of Nokia’s obligations under

supply agreements; these include tender bonds, performance bonds and warranty

bonds.

(2)Corporate guarantees are guarantees with a primary obligation that are issued to

Nokia’s customers and other third parties.

(3)Customer finance commitments are available under customer loan facilities.

Availability of the facility depends on the borrower’s continuing compliance with

the agreed financial and operational covenants, and other administrative terms of

the facility. The loan facilities are primarily available to fund purchases of network

infrastructure equipment and services. Refer to Note 4.5. Trade receivables and

other customer-related balances.

(4)As a limited partner in NGP Capital and certain other funds making technology-

related investments, Nokia is committed to capital contributions and entitled to

cash distributions according to the respective partnership agreements and

underlying fund activities.

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Legal matters

Accounting policies

Nokia discloses ongoing legal matters that relate to possible obligations whose existence will

be confirmed by the occurrence or non-occurrence of one or more uncertain future events

not wholly within the control of Nokia. These matters are assessed continually to determine

whether an outflow of resources embodying economic benefits has become probable so as to

recognize a provision.

Nokia is and will likely continue to be subject to various legal proceedings that arise from time to

time, including proceedings related to intellectual property, antitrust, commercial disputes, product

liability, environmental issues, tax, health and safety, employment and wrongful discharge, sales

and marketing practices, international trade, securities, privacy matters and compliance. While

management does not expect any of the legal proceedings it is currently aware of to have a

material adverse effect on Nokia’s financial position, litigation is inherently unpredictable, and

Nokia may in the future receive judgments or enter into settlements that could have a material

adverse effect on its results or cash flows.

Litigation and proceedings

Mass labor litigation in Brazil

Nokia is defending against a number of labor claims in various Brazilian labor courts. Plaintiffs are

former employees whose contracts were terminated after Nokia exited from certain managed services

contracts. The claims mainly relate to payments made under, or in connection with, the terminated

labor contracts. Nokia has closed the majority of the court cases through settlement or judgment.

Asbestos litigation in the United States

Nokia is defending approximately 250 asbestos-related matters, at various stages of litigation. The

claims are based on premises liability, products liability, and contractor liability. The claims also

involve plaintiffs allegedly diagnosed with various diseases, including but not limited to asbestosis,

lung cancer, and mesothelioma.

Intellectual property rights litigation

Litigations concluded during the year

In 2023, Nokia commenced patent infringement proceedings against Amazon in several countries in

relation to patents covering video-related technologies implemented in Amazon’s services and

devices. In March 2025, Nokia announced it had signed a patent agreement with Amazon. The

agreement resolves all pending patent litigation between the parties.

6.2. Acquisitions

Accounting policies

Business combinations are accounted for using the acquisition method. At the acquisition

date the consideration transferred, comprising the sum of assets transferred, liabilities

assumed and equity interests issued, is generally measured at fair value. The consideration

transferred is allocated to the separately identifiable assets acquired and liabilities assumed,

including assets and liabilities that were not recognized on the statement of financial position

of the acquiree, such as certain intangible assets or contingent liabilities. The total amount of

consideration transferred and non-controlling interests in the acquiree, if any, exceeding the

net of all identifiable assets acquired and liabilities assumed is recognized as goodwill. The

acquisition-related costs are recognized as expenses in the periods incurred, except for the

costs related to issuing debt or equity securities. The results of businesses acquired are

consolidated in the results of Nokia from the acquisition date.

Acquisition of Infinera

On 28 February 2025, Nokia completed the acquisition of Infinera Corporation (Infinera), pursuant

to the definitive agreement announced on 27 June 2024. Infinera, the San Jose based global

supplier of innovative open optical networking solutions and advanced optical semiconductors,

became part of the Nokia Group effective as of the closing, with Nokia holding 100% of its equity

and voting rights. The acquisition is expected to significantly improve Nokia’s scale and profitability

in optical networks, and accelerate Nokia’s growth strategy in data centers and strengthen its

presence both in North America and with hyperscalers. Nokia is reporting the acquired business as

part of its Network Infrastructure segment.

Purchase consideration

The purchase consideration transferred to the Infinera shareholders comprised cash and

127 434 986 Nokia shares in the form of American Depository Shares (ADSs). The fair value of

Nokia shares issued was determined with reference to the closing price of Nokia ADSs in the New

York Stock Exchange on 28 February 2025. The total purchase consideration also included the fair

value of the portion of Infinera’s performance and restricted shares attributable to pre-

combination services that were replaced with Nokia’s share-based payment awards, and the fair

value of Infinera's convertible senior notes as described below.

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The acquisition resulted in a conversion event and a “make whole fundamental change” for

Infinera’s convertible senior notes in accordance with relevant indentures. The fair value of

convertible notes included in the purchase consideration was determined with regards to the

pricing mechanism of the “make whole fundamental change” in accordance with the bond terms.

The pricing formula included a component which was dependent on the performance of Nokia ADSs

40 trading days after conversion notice from each individual bondholder. The fair value of

convertible notes included as part of the purchase consideration was determined based on the

closing price of Nokia ADSs in the New York Stock Exchange at the date of acquisition. Conversion

elections expired on 19 March 2025 with all bondholders surrendering their notes. The surrendered

notes were settled in cash in May 2025. Nokia recognized EUR 23 million loss in the financial

expenses in the consolidated income statement for the change in the fair value of convertible

notes between the acquisition date and the subsequent settlement date.

EURm	28 February 2025
Cash	1 066
Infinera's convertible notes	785
Nokia shares issued	584
Portion of the replacement equity awards attributable to pre-combination service	61
Total purchase consideration	2 496

Fair value of net assets acquired and goodwill

EURm	28 February 2025
ASSETS
Intangible assets	1 111
Property, plant and equipment	241
Deferred tax assets	82
Inventories	337
Trade receivables(1)	349
Other assets	207
Cash and cash equivalents	78
Assets acquired	2 405
LIABILITIES
Deferred tax liabilities	37
Trade payables	230
Contract liabilities	184
Other liabilities	291
Liabilities assumed	742
Net identifiable assets acquired	1 663
Goodwill	833
Net assets acquired	2 496

(1)The gross amount of trade receivables does not materially differ from their fair value, and it is expected that the full contractual

amounts can be collected.

Goodwill arising from the acquisition of Infinera amounts to EUR 833 million and is primarily

attributable to the acquired workforce, as well as anticipated synergies and economies of scale.

Goodwill is allocated in its entirety to the Network Infrastructure segment and is expected not to be

deductible for income tax purposes.

Fair values of intangible assets acquired

	Fair value (EURm)	Useful life (years)
Customer relationships	646	12
Technologies	380	3-4
Tradenames and other	85	3-4
Total	1 111

Critical accounting judgment

The determination and fair value measurement of intangible assets recognized separately

from goodwill are dependent on management estimations and assumptions, including value

drivers and synergies of the acquisition, and revenue growth, profitability and cash flow

projections, useful lives and other characteristics of the intangible assets, as well as discount

rates, as of the acquisition date. Assumptions and estimations have material impact on the

carrying value of the intangible assets at initial recognition, and on the subsequent

amortization expense.

Acquisition-related costs amounted to EUR 41 million of which EUR 21 million is recorded in 2025.

Acquisition-related costs are presented in selling, general and administrative expenses in the

consolidated income statement, and in operating cash flows in the consolidated statement of

cash flows.

From 28 February to 31 December 2025 the acquired business contributed net sales of EUR 1 258

million and an operating loss of EUR 215 million to the consolidated income statement. Nokia

Group net sales and operating profit in 2025 would have been EUR 20 092 million and EUR 846

million, respectively, had the acquisition been completed on 1 January 2025. The information

regarding the combined entity’s net sales and operating profit as of the beginning of 2025 is

unaudited and for illustrative purposes only, and is calculated by using the subsidiary’s results for

January-February 2025 adjusted for the impacts of accounting policy alignment and release of

purchase price allocation adjustments.

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6.3. Principal Group companies

Principal Group companies at 31 December 2025:

Company name	Domicile	Parent holding %	Group ownership<br><br>interest %
Nokia Solutions and Networks Oy	Finland	100.0	100.0
Nokia of America Corporation	United States	—	100.0
Nokia Solutions and Networks B.V.	Netherlands	—	100.0
Nokia Technologies Oy	Finland	100.0	100.0
Nokia Participations	France	—	100.0
Nokia Networks France	France	—	100.0
Nokia Solutions and Networks India Private Limited	India	—	100.0
Nokia Solutions and Networks Japan G.K.	Japan	—	100.0
Nokia Solutions and Networks Branch Operations Oy	Finland	—	100.0
Infinera Corporation	United States	—	100.0
Nokia Arabia Limited	Saudi Arabia	—	100.0
Nokia Shanghai Bell Co., Ltd.(1)	China	—	100.0
Nokia Solutions and Networks do Brasil Telecomunicações Ltda.	Brazil	—	100.0
Nokia Solutions and Networks Taiwan Co., Ltd.	Taiwan	—	100.0
Nokia Spain, S.A.	Spain	—	100.0
Nokia UK Limited	United Kingdom	—	100.0
Nokia Canada Inc.	Canada	—	100.0
Nokia Solutions and Networks Italia S.p.A.	Italy	—	100.0
Nokia Solutions and Networks Australia Pty Ltd	Australia	—	100.0
(1)In December 2025, Nokia completed the purchase of China Huaxin’s approximately 50% share in Nokia Shanghai Bell. Refer to Note 5.2. Financial assets and liabilities.

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6.4. Related party transactions

Nokia has related party transactions with its subsidiaries, associated companies, joint ventures and

pension funds as well as the management and the Board of Directors. Transactions and balances

between Group companies are eliminated on consolidation. For more information on principles of

consolidation and principal Group companies, refer to Note 1.2. General accounting policies, and

Note 6.3. Principal Group companies, respectively.

Transactions and balances with associated companies and joint ventures

EURm	2025	2024	2023
Sales	33	36	46
Purchases	(154)	(147)	(141)
Trade and other receivables	20	73	18
Trade and other payables	(32)	(35)	(31)

Investments in associated companies and joint ventures are individually immaterial. The aggregate

carrying amount for the investments in associated companies and joint ventures was EUR 180

million in 2025 (EUR 124 million in 2024).

In 2024, Nokia completed the sale of Alcatel Submarine Networks (ASN) to the French State. Nokia

retained a 20% shareholding with board representation to ensure a smooth transition until

targeted exit, at which point it is planned for the French State to acquire Nokia’s remaining interest.

The retained interest is accounted for as an investment in an associate. Refer to Note 2.6.

Discontinued operations for more information on disposal of the Submarine Networks business.

Nokia holds a 51% ownership interest in TD Tech Holding Limited (“TD Tech HK”), a Hong Kong

based joint venture holding company which Nokia has accounted for as an investment in associated

companies and joint ventures. In 2024, TD Tech HK completed the divestment of the entire

business of the joint venture through the sale of its operating subsidiaries to a consortium

consisting of Huawei Technologies, Chengdu High-tech Investment Group and other buyers.

Following the divestment, Nokia is in the process of exiting from its shareholding in the parent

company TD Tech HK. Nokia considered the transactions as a sale of associated companies and

joint ventures, recorded a gain of EUR 191 million related to the sale and received a cash

consideration of EUR 248 million from the sale in 2024.

In 2016, Nokia entered into a strategic agreement with HMD Global Oy (HMD) granting HMD an

exclusive global license to create Nokia branded mobile phones and tablets for 10 years. Under the

agreement, Nokia receives royalty payments from HMD for sales of Nokia branded mobile phones

and tablets, covering both brand and patent licensing. In August 2023, Nokia and HMD amended

the licensing agreement so that HMD’s exclusive license to create Nokia branded devices would

expire by March 2026. In October 2025, Nokia and HMD agreed to extend the license period for the

Nokia-branded feature phones until March 2029 for limited countries. Nokia has held an ownership

interest in HMD since 2020 which it has accounted for as an investment in associate. In 2023, Nokia

recorded an impairment loss of EUR 28 million related to its investment in HMD in the share of

result of associates and joint ventures.

Transactions with pension funds

Nokia has borrowings of EUR 34 million (EUR 35 million in 2024) from Nokia’s German pension fund,

a separate legal entity. The indefinite loan bears 6% annual interest and can be terminated by

either party with a 90-day notice. The loan is included in short-term interest-bearing liabilities in

the statement of financial position. For more information on Nokia’s post-employment benefit

plans, refer to Note 3.4. Pensions and other post-employment benefits.

Transactions with the Group Leadership Team and the Board of Directors

No loans were granted to the members of the Group Leadership Team and the Board of Directors in

2025, 2024 or 2023. For information on remuneration of Nokia’s key management personnel, refer

to Note 3.2. Remuneration of key management.

6.5. Subsequent events

Non-adjusting events after the reporting period

Nokia to operate with two primary operating segments

Nokia announced on 19 November 2025, together with its new strategy, that it will reorganize its

business into two primary operating segments to better align to customer needs and accelerate

innovation as the AI supercycle increases demand for advanced connectivity. This reorganization

took effect as of 1 January 2026.

The reorganization recognizes Network Infrastructure as a growth segment, positioned to

capitalize on the rapid, global AI and data center build-out while continuing to innovate for its

telecommunications customer base. The segment consists of three business units Optical

Networks, IP Networks and Fixed Networks and is led by David Heard.

The new Mobile Infrastructure segment brings together Nokia’s Core Networks portfolio, Radio

Networks portfolio and Technology Standards (formerly Nokia Technologies). It is positioned for

core and radio network technology and services leadership to lead the industry to AI-native

networks and 6G. The new segment brings together a portfolio whose value creation is founded on

mobile communication technologies based on 3GPP standards with a strong cash flow position

underpinned by IP licensing. It is led by Justin Hotard on an interim basis and consists of three

business units Core Software, Radio Networks and Technology Standards.

In addition, as part of its strategy work, Nokia identified several units which are not seen as core to

the future of the company’s strategy. These units were moved into a dedicated operating segment

called Portfolio Businesses while the company assesses the best value creating opportunity for

them. The units moved were:

▪Fixed Wireless Access CPE (previously in Fixed Networks in Network Infrastructure)

▪Site Implementation and Outside Plant (previously in Fixed Networks in Network Infrastructure)

▪Enterprise Campus Edge (previously in Cloud and Network Services)

▪Microwave Radio (previously in Mobile Networks)

| 188 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Report of

independent

registered

public

accounting firm

To the shareholders and the Board of Directors of Nokia

Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of

financial position of Nokia Corporation and subsidiaries (the

"Company") as of December 31, 2025 and 2024, and the

related consolidated income statements, consolidated

statements of comprehensive income, consolidated statements

of changes in shareholders’ equity and consolidated statements

of cash flows for each of the three years in the period ended

December 31, 2025, and the related notes (collectively referred

to as the "financial statements"). In our opinion, the financial

statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2025 and 2024,

and the results of its operations and its cash flows for each of

the three years in the period ended December 31, 2025, in

conformity with IFRS Accounting Standards as issued by the

International Accounting Standards Board (IASB) and as adopted

by the European Union.

We have also audited, in accordance with the standards of the

Public Company Accounting Oversight Board (United States)

(PCAOB), the Company's internal control over financial reporting

as of December 31, 2025, based on criteria established in

Internal Control — Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway

Commission and our report dated March 5, 2026, expressed an

unqualified opinion on the Company's internal control over

financial reporting.

Basis for Opinion

These financial statements are the responsibility of the

Company's management. Our responsibility is to express an

opinion on the Company's financial statements based on our

audits. We are a public accounting firm registered with the

PCAOB and are required to be independent with respect to the

Company in accordance with the U.S. federal securities laws and

the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of

the PCAOB. Those standards require that we plan and perform

the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, whether

due to error or fraud. Our audits included performing

procedures to assess the risks of material misstatement of the

financial statements, whether due to error or fraud, and

performing procedures that respond to those risks. Such

procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial

statements. Our audits also included evaluating the accounting

principles used and significant estimates made by management,

as well as evaluating the overall presentation of the financial

statements. We believe that our audits provide a reasonable

basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising

from the current-period audit of the financial statements that

was communicated or required to be communicated to the audit

committee and that (1) relates to accounts or disclosures that

are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments. The

communication of critical audit matters does not alter in any

way our opinion on the financial statements, taken as a whole,

and we are not, by communicating the critical audit matter

below, providing a separate opinion on the critical audit matter

or on the accounts or disclosures to which it relates.

Revenue recognition – Accounting for

significant and complex contracts — Refer to

Note 2.1 to the financial statements

Critical Audit Matter Description

The Company enters into multi-year framework agreements

with customers, which together with purchase orders for

hardware, software and services, represent revenue contracts.

Certain revenue contracts are particularly significant in value

and contain highly complex terms and conditions which impact

revenue recognition. Accounting complexities for such revenue

contracts include the assessment of contractual settlements,

contract combinations and subsequent contract modifications,

and other factors occurring during the period that materially

impact revenue recognition.

Given the level of complexity in performing such accounting

assessments for these significant and complex revenue

contracts, our audit procedures to evaluate the reasonableness

of these accounting judgements require a high degree of

auditor judgement.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination of the

appropriateness of the revenue recognition for these significant

and complex revenue contracts included the following, amongst

others:

▪We tested the effectiveness of controls over the

determination of accounting treatment for significant and

complex revenue contracts;

▪We utilised data analytics to identify revenue contracts that

were significant in value and contained complexities;

▪We analysed the significant and complex revenue contracts

entered into or modified during the current period, to identify

all terms and conditions relevant to revenue recognition; and

▪We assessed whether management’s accounting conclusions

in relation to the areas of complexity identified in significant

and complex revenue contracts were in accordance with IFRS

15 Revenue from Contracts with Customers.

/s/ Deloitte Oy

Helsinki, Finland

March 5, 2026

We have served as the Company’s auditor since 2020.

| 189 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements Notes to the consolidated financial statements Other information | | --- |

Report of

independent

registered

public

accounting firm

To the shareholders and the Board of Directors of Nokia

Corporation

Opinion on Internal Control over Financial

Reporting

We have audited the internal control over financial reporting of

Nokia Corporation and subsidiaries (the “Company”) as of

December 31, 2025, based on criteria established in Internal

Control — Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway

Commission (COSO). In our opinion, the Company maintained, in

all material respects, effective internal control over financial

reporting as of December 31, 2025, based on criteria

established in Internal Control — Integrated Framework (2013)

issued by COSO.

We have also audited, in accordance with the standards of the

Public Company Accounting Oversight Board (United States)

(PCAOB), the financial statements as of and for the year ended

December 31, 2025, of the Company and our report dated

March 5, 2026, expressed an unqualified opinion on those

financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining

effective internal control over financial reporting and for its

assessment of the effectiveness of internal control over

financial reporting, included in the accompanying Management’s

annual report on internal control over financial reporting. Our

responsibility is to express an opinion on the Company’s

internal control over financial reporting based on our audit. We

are a public accounting firm registered with the PCAOB and are

required to be independent with respect to the Company in

accordance with the U.S. federal securities laws and the

applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

We conducted our audit in accordance with the standards of the

PCAOB. Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether effective

internal control over financial reporting was maintained in all

material respects. Our audit included obtaining an

understanding of internal control over financial reporting,

assessing the risk that a material weakness exists, testing and

evaluating the design and operating effectiveness of internal

control based on the assessed risk, and performing such other

procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our

opinion.

Definition and Limitations of Internal Control

over Financial Reporting

A company’s internal control over financial reporting is a

process designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with

generally accepted accounting principles. A company’s internal

control over financial reporting includes those policies and

procedures that (1) pertain to the maintenance of records that,

in reasonable detail, accurately and fairly reflect the

transactions and dispositions of the assets of the company; (2)

provide reasonable assurance that transactions are recorded as

necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and

that receipts and expenditures of the company are being made

only in accordance with authorizations of management and

directors of the company; and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized

acquisition, use, or disposition of the company’s assets that

could have a material effect on the financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become

inadequate because of changes in conditions, or that the

degree of compliance with the policies or procedures may

deteriorate.

/s/ Deloitte Oy

Helsinki, Finland

March 5, 2026

190	Nokia Annual Report on Form 20-F 2025
Exhibits	191
---	---
Glossary	192
Investor information	195
Signatures	196

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Exhibits

1	Articles of Association of Nokia Corporation (English Translation of the Finnish original)<br><br>(incorporated by reference to Exhibit 1 of our Annual Report on Form 20-F filed with the<br><br>Securities and Exchange Commission on 13 March 2025 (File No. 001-13202)).
8	Refer to Note 6.3. Principal Group companies, in our consolidated financial statements<br><br>for more information on our significant subsidiaries.
11.1	Code of Ethics (incorporated by reference to Exhibit 11.1 of our Annual Report on Form<br><br>20-F filed with the Securities and Exchange Commission on 13 March 2025 (File No.<br><br>001-13202))
11.2	Insider Trading Policy (incorporated by reference to Exhibit 11.2 of our Annual Report on<br><br>Form 20-F filed with the Securities and Exchange Commission on 13 March 2025 (File No.<br><br>001-13202)).
12.1	Certification of Justin Hotard, President and Chief Executive Officer of Nokia<br><br>Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2	Certification of Marco Wirén, Group Chief Financial Officer of Nokia Corporation,<br><br>pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13	Certification, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of<br><br>the Sarbanes-Oxley Act of 2002.
15.1	Consent of Deloitte Oy.
97.1	Executive Officer Clawback Policy (incorporated by reference to Exhibit 97.1 of our<br><br>Annual Report on Form 20-F filed with the Securities and Exchange Commission on 29<br><br>February 2024 (File No. 001-13202)).
101	Interactive Data Files (Inline XBRL – Related Documents).
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

| 192 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits •Glossary Investor information Signatures | | --- |

Glossary

2G (Second Generation Mobile Communications): Also known as

GSM (Global System for Mobile Communications): A digital

system for mobile communications that is based on a widely-

accepted standard and typically operates in the 900 MHz,

1800 MHz and 1900 MHz frequency bands.

3G (Third Generation Mobile Communications): The third

generation of mobile communications standards designed for

carrying both voice and data generally using WCDMA or close

variants. See also WCDMA.

3GPP (The Third Generation Partnership Project): A consortium

comprising several standards organizations which develop

protocols for mobile telecommunications. The initial goal was to

develop a global technical specification for a 3G mobile phone

system. Since then, the operations have been extended and

today the main focus is on 5G networks.

4G (Fourth Generation Mobile Communications): The fourth

generation of mobile communications standards based on LTE,

offering IP data connections only and providing true broadband

internet access for mobile devices. See also LTE.

5G (Fifth Generation Mobile Communications): The next major

phase of mobile telecommunications standards. 5G is a

complete redesign of network architecture with the flexibility

and agility to support upcoming service opportunities. It

delivers higher speeds, higher capacity, extremely low latency

and greater reliability.

6G (Sixth Generation Mobile Communications): The cellular

industry introduces a new generation about every ten years. The

next generation of technology is expected to be introduced by

2030 and is generally referred to as 6G.

Access network: A telecommunications network between a local

exchange and the subscriber station.

AI & Cloud: One of Nokia's customer segments.

AI-RAN: AI-RAN is the fusion of innovation in AI and radio access

networks (RAN) to the mutual benefit of both.

AirScale Radio Access: A 5G-ready complete radio access

generation that helps operators address the increasing

demands of today and tomorrow. The solution comprises: Nokia

AirScale Base Station with multiband radio frequency elements

and system modules; Nokia AirScale Active Antennas; Cloud RAN

with Nokia AirScale Cloud Base Station Server and the cloud-

based AirScale RNC (Radio Network Controller) for 3G; Nokia

AirScale Wi-Fi; common software; and services which use

intelligent analytics and extreme automation to maximize the

performance of hybrid networks.

Alcatel-Lucent: Alcatel-Lucent Group, that has been part of the

Nokia Group since 2016.

Annual revenue run-rate: A financial projection that takes

Nokia's current revenue and extrapolates it over a full year,

assuming current performance remains constant.

Artificial Intelligence (AI): Autonomous and adaptive intelligence

of machines, where machines have the ability to perform tasks

in complex environments without constant guidance by a user

and have the ability to improve performance by learning from

experience.

Bandwidth: The width of a communication channel, which

affects transmission speeds over that channel.

Base station: A network element in a mobile network

responsible for radio transmission and reception to or from the

mobile station.

Broadband: The delivery of higher bandwidth by using

transmission channels capable of supporting data rates greater

than the primary rate of 9.6 Kbps.

Churn: A measure of the number of customers or subscribers

who leave their service provider, e.g., a mobile operator, during

a given time period.

Cloud: Cloud computing is a model for enabling ubiquitous,

convenient, on-demand network access to a shared pool of

configurable computing resources (e.g., networks, servers,

storage, applications and services) that can be rapidly

provisioned and released with minimal management effort.

Cloud and Network Services: Our Cloud and Network Services

business group enables telecommunication providers and

enterprises to deploy and monetize 5G, cloud-native software

and as-a-Service delivery models.

Cloud RAN: Cloud RAN refers to all or some of the baseband

functions being run on a commercial off-the-shelf (COTS)

computing platform rather than purpose-built hardware.

Convergence: The coming together of two or more disparate

disciplines or technologies. Convergence types are, for example,

IP convergence, fixed-mobile convergence and device

convergence.

Core network: A combination of exchanges and the basic

transmission equipment that together form the basis for

network services.

Digital: A signaling technique in which a signal is encoded into

digits for transmission.

Discontinued operations: Submarine Networks business, which

was previously reported as part of Network Infrastructure

operating segment, was sold in 2024 and is presented as a

discontinued operation.

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.

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.

GSM (Global System for Mobile Communications): A digital

system for mobile communications that is based on a widely

accepted standard and typically operates in the 900 MHz,

1800 MHz and 1900 MHz frequency bands. See also 2G.

Hexa-X: European Commission’s flagship 6G initiative for

research into the next generation of wireless networks. The

initiative began in January 2021 with Nokia as project lead,

working closely with a strong consortium of European partners.

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Hyperscalers: One of Nokia’s customer segments. Hyperscaler

refers to companies like Alphabet (Google), Amazon (Amazon

Web Services), Microsoft and Meta Platforms (Facebook) that

provide cloud solutions at a global scale leveraging massive

connected data centers.

Infinera: Infinera Corporation, a global supplier of innovative

open optical networking solutions and advanced optical

semiconductors. In 2024, Nokia announced its plans to acquire

the company and the acquisition of Infinera was closed in

February 2025.

Internet of Things (IoT): All things such as cars, the clothes we

wear, household appliances and machines in factories

connected to the internet and able to automatically learn and

organize themselves.

IP (Internet Protocol): A network layer protocol that offers a

connectionless internet work service and forms part of the

(Transmission Control Protocol) TCP/IP protocol.

IP (Intellectual Property): Intellectual property results from original

creative thought, covering items such as patents, copyright

material and trademarks, as well as business models and plans.

IPR (Intellectual Property Rights): Legal rights protecting the

economic exploitation of intellectual property, a generic term

used to describe products of human intellect, for example

patents, that have an economic value.

IPR licensing: Generally, an agreement or an arrangement where

a company allows another company to use its intellectual

property (such as patents, trademarks or copyrights) under

certain terms.

LTE (Long-Term Evolution): 3GPP radio technology evolution

architecture and a standard for wireless communication of high-

speed data. Also referred to as 4G.

Massive MIMO (Multiple Input Multiple Output) radios:

Advanced technology, which extends the MIMO concept by

using a large array of transmit and receive antennas. Nokia

provides an extensive portfolio of Massive MIMO radios to

deliver high-performance 5G with optimized capacity, coverage

and energy efficiency.

Mission critical enterprise & Defense: One of Nokia's customer

segments.

Mission critical networks/communications: One of the key

elements of 5G. Mission critical communications meets the

needs of emergency responders such as emergency operations

centers, fire departments, emergency vehicles, police, and

search and rescue services, replacing traditional radio with new

communications capabilities available to smartphone users.

Mobile broadband: Refers to high-speed wireless internet

connections and services designed to be used from multiple

locations.

Mobile Infrastructure: One of Nokia's primary operating

segments effective 1 January 2026. The Mobile Infrastructure

segment brings together Nokia’s Core Software portfolio, Radio

Networks portfolio and Technology Standards.

Mobile Networks: Our Mobile Networks business group offers

products and services for radio access networks covering

technologies from 2G to 5G, and microwave radio links for

transport networks.

Network Infrastructure: Our Network Infrastructure business

group provides fiber, copper, fixed wireless access

technologies, IP routing, data center, subsea and terrestrial

optical networks – along with related services – to customers

including communications service providers, webscales

(including hyperscalers), digital industries and governments.

NVIDIA: NVIDIA Corporation, a world leader in AI and accelerated

computing.

Nokia Bell Labs: Our research arm engaged in discovering and

developing the technological shifts needed for the next phase

of human existence as well as exploring and solving complex

problems to radically redefine networks.

Nokia Technologies: Our Nokia Technologies business group is

responsible for managing Nokia’s patent portfolio and

monetizing Nokia’s intellectual property, including patents,

technologies and the Nokia brand.

Operating System (OS): Software that controls the basic

operation of a computer or a mobile device, such as managing

the processor and memory. The term is also often used to refer

more generally to the software within a device, for example, the

user interface.

Platform: Software platform is a term used to refer to an

operating system or programming environment, or a

combination of the two.

PON (Passive Optical Network): A fiber access architecture in

which unpowered fiber optic splitters are used to enable a single

optical fiber to serve multiple endpoints without having to

provide individual fibers between the hub and customer.

Portfolio Business: One of Nokia's segments effective 1

January 2026. The Portfolio Business segment include Fixed

Wireless Access CPE, Site Implementation and Outside Plant

Services, Enterprise Campus Edge, and Microwave Radio.

Private wireless network: Private wireless is a standalone

network focused on industrial operational assets and users. A

private wireless network provides broadband connectivity,

similar to a public wireless network, but is owned and controlled

by the organization that built or purchased it.

RAN (radio access networks): A mobile telecommunications

system consisting of radio base stations and transmission

equipment.

SEP (Standard-Essential Patent): Generally, patents needed to

produce products which work on a standard which companies

declare as essential and agree to license on Fair, Reasonable

and Non-Discriminatory (FRAND) terms. Can also be referred to

as essential patent.

Standalone (SA): Network architecture that allows independent

operation of a 5G service without interaction with an existing 4G

core and 4G radio network.

Submarine Networks: In 2024, Nokia sold its wholly owned

subsidiary, Alcatel Submarine Networks (ASN), a global

submarine communication networks leader, to the French State.

The business unit was previously reported as part of Nokia’s

Network Infrastructure business groups segment and is now

presented as a discontinued operation.

Technology licensing: Generally, refers to an agreement or

arrangement where under certain terms a company provides

another company with its technology and possibly know-how,

whether protected by intellectual property or not, for use in

products or services offered by the other company.

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Telco cloud: Applying cloud computing, SDN and NFV principles

in telecommunications environment, for example separating

application software from underlying hardware with automated,

programmable interfaces while still retaining

telecommunications requirements such as high availability and

low latency.

Telecommunication providers: One of Nokia's customer

segments

Transmission: The action of conveying signals from one point

to one or more other points.

Virtual Reality (VR): The simulation of a three-dimensional

image or environment that can be interacted with in a seemingly

real or physical way by a person using special electronic

equipment, such as a helmet with a screen inside or gloves

fitted with sensors.

WCDMA (Wideband Code Division Multiple Access): A third-

generation mobile wireless technology that offers high data

speeds to mobile and portable wireless devices. Also referred to

as 3G.

Webscale companies: Companies which are investing in cloud

technology and network infrastructure on an increasing scale to

fulfill their needs for massive, mission critical networks.

XGS-PON (10Gbps Symmetrical Passive Optical Network): A

high-speed optical network technology that enables both

upstream and downstream gigabit and multigigabit services. Its

adoption is accelerating, helping operators improve

competitiveness, revenue, and network efficiency, while

meeting the growing demand for bandwidth from video, online

gaming, and emerging applications like virtual reality.

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Investor

information

Information on the internet

www.nokia.com

Available on the internet: financial reports, information on members of the Group Leadership Team,

other investor-related materials and information on events, and press releases as well as

environmental and social information, Code of Conduct, Corporate Governance Statement and

Remuneration Statement.

SEC maintains an internet site that contains reports, proxy and information statements, and other

information regarding issuers that file electronically with the SEC (http://www.sec.gov).

Investor Relations contacts

investor.relations@nokia.com

Annual General Meeting

Date:9 April 2026

Place:Helsinki, Finland

Dividend

The Board proposes to the Annual General Meeting 2026 to be authorized to decide, in its

discretion, on the distribution of an aggregate maximum of EUR 0.14 per share as dividend from

the retained earnings and/or as assets from the reserve for invested unrestricted equity.

Financial reporting

Our interim reports in 2026 are planned to be published on 23 April 2026, 23 July 2026 and

22 October 2026. The full-year 2026 results are planned to be published in January 2027.

Information published in 2025

All our global press releases and statements published in 2025 are available on the internet at

www.nokia.com/newsroom.

Stock exchanges

The Nokia Corporation share is quoted on the following stock exchanges:

	Symbol	Trading currency
Nasdaq Helsinki (since 1915)	NOKIA	EUR
New York Stock Exchange (since 1994)	NOK	USD

In 2025, Nokia also maintained a listing on Euronext Paris Stock Exchange (since 2015) but decided

to apply for delisting in November 2025. The final day of trading of Nokia’s shares on Euronext

Paris was 30 December 2025.

Documents on display

The documents referred to in this Annual Report on Form 20-F can be read at the Securities and

Exchange Commission’s internet site at http://www.sec.gov.

Contact information

Nokia Head Office

Karakaari 7

FI-02610 Espoo

Finland

Tel. +358 (0) 10 44 88 000

Fax +358 (0) 10 44 81 002

| 196 | Nokia Annual Report on Form 20-F 2025 | | --- | --- || Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits Glossary Investor information •Signatures | | --- |

Signatures

The registrant hereby certifies that it meets all of the

requirements for filing on Form 20-F and that it has duly caused

and authorized the undersigned to sign this Annual Report on

Form 20-F on its behalf.

Nokia Corporation

By:/S/ STEPHAN PROSI

Name:Stephan Prosi

Title:Vice President, Corporate Controlling and Accounting

By:/S/ JOHANNA MANDELIN

Name:Johanna Mandelin

Title:Vice President, Corporate Legal

5 March 2026

Copyright © 2026 Nokia Corporation. All<br><br>rights reserved. Nokia is a registered<br><br>trademark of Nokia Corporation.
www.nokia.com

Document

Exhibit 12.1

CERTIFICATION

I, JUSTIN HOTARD, certify that:

1. I have reviewed this annual report on Form 20-F of Nokia Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: 5 March 2026

/s/ JUSTIN HOTARD
JUSTIN HOTARD<br><br>President and Chief Executive Officer

Document

Exhibit 12.2

CERTIFICATION

I, MARCO WIRÉN, certify that:

1. I have reviewed this annual report on Form 20-F of Nokia Corporation;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: 5 March 2026
	/s/ MARCO WIRÉN
	MARCO WIRÉN
	Chief Financial Officer

Document

Exhibit 13

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 20-F of Nokia Corporation (the “Company”) for the period ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned hereby certify that, to the best of our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: 5 March 2026

/s/ JUSTIN HOTARD
Name	JUSTIN HOTARD
Title:	President and Chief Executive Officer
/s/ MARCO WIRÉN
Name	MARCO WIRÉN
Title:	Chief Financial Officer

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Document

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-285400, 333-277627 and 333-253253 on Form S-8 of our reports dated March 5, 2026, relating to the financial statements of Nokia Corporation and the effectiveness of Nokia Corporation’s internal control over financial reporting appearing in this Annual Report on Form 20-F for the year ended December 31, 2025.

/s/ Deloitte Oy
Deloitte Oy
Helsinki, Finland
March 5, 2026

Nokia’s Global Anti-Corruption Program
	Nokia’s Code of Conduct	Policies supporting the anti-corruption program
	Covers the following topics:<br><br>▪Dealing with Government Officials<br><br>▪Improper Payments<br><br>▪Working with Third Parties<br><br>▪Controllership<br><br>▪Speaking up (our whistleblowing program)	Various policies are available to all employees on Nokia’s<br><br>intranet site, including the following:<br><br>▪Anti-Corruption Policy<br><br>▪Conflict of Interest Policy<br><br>▪No PO/No Pay Policy<br><br>▪Travel Policy<br><br>▪Dealing with Government Officials contained in our Code<br><br>of Conduct<br><br>▪Controllership contained in our Code of Conduct<br><br>▪Working With Third Parties contained in our Code of<br><br>Conduct<br><br>▪Improper payments contained in our Code of Conduct<br><br>▪Corporate Hospitality and Gift SOP<br><br>▪Global Donations, Other Contributions and Sponsorships<br><br>SOP<br><br>▪Third-Party Risk Management SOP<br><br>▪Prohibition of Facilitation Payments SOP<br><br>▪Site Acquisition Permitting and Site Access Fees SOP
	Third party code of conduct
	▪Includes Nokia’s expectations relating to anti-<br><br>corruption and bribery
	Training specific to anti-corruption and bribery
	▪Included in Nokia’s annual mandatory Ethical Business<br><br>Training required of all employees<br><br>▪Focused training on anti-corruption and bribery that<br><br>is assigned to high-risk employee populations, such<br><br>as training for employees involved in projects<br><br>requiring site acquisition and customer-facing sales<br><br>teams

Number of employees	2025	2024	2023
Continued Operations	78 005	78 434	84 795
Discontinued Operations	—	1 927	1 894
Total	78 005	80 361	86 689

EURm	2025	2024	2023
Short-term benefits	22	14	13
Post-employment benefits(1)	1	1	1
Share-based payments	17	12	13
Termination benefits(2)	13	4	—
Total	53	31	27

	2025		2024	2023
EUR	Justin Hotard,<br><br>from 1 April	Pekka<br><br>Lundmark,<br><br>until 31 March	Pekka<br><br>Lundmark	Pekka<br><br>Lundmark
Base salary	1 057 875	352 625	1 410 500	1 322 750
Cash incentive<br><br>payments	1 703 840	567 947	1 824 834	1 079 695
Share-based<br><br>payment<br><br>expenses(1)	3 907 501	979 128	3 117 360	5 041 885
Pension<br><br>expenses	490 275	39 291	310 937	422 274
Other<br><br>benefits(2)	3 584 877	5 239 650	55 044	95 756
Total	10 744 368	7 178 641	6 718 675	7 962 360