Leading the Transformation (Jean-Francois Baril) (2007) (407.13 KB)

1 © 2007 Nokia Capital Markets Day 2007

Leading the TransformationJean-Francois Baril

Senior Vice President Sourcing

2 © 2007 Nokia Capital Markets Day 2007

Enabling devices increased

margins

and market share

3 © 2007 Nokia Capital Markets Day 2007

(M)

2007200620052004

20

40

60

80

100

120

20032002

Pull-driven Supply Chain

Terminal Vendor Shipments (m) Operating Margins (%)

0%

5%

10%

15%

20%

25%

Q304Q404Q105Q205Q305Q405Q106Q206Q306Q406Q107Q207Q307

Source: NokiaNokia Motorola SonyEricssonSamsung LG

4 © 2007 Nokia Capital Markets Day 2007

The results are visible in the Top Line…

Product Sales Volume vs

Plan

-120% -80% -40% 0% +40% +80% +120%

Supply flexibility management & Product introduction

Market share opportunity captured:

~10’s of millions unitsRevenue opportunity captured:

~Billions €

Source: Nokia

5 © 2007 Nokia Capital Markets Day 2007

Bottom Line…

Cost of goods sold per unit

Economies of scale and product cost management

Gross Margin opportunity captured:

~100’s of millions €

Gross Margin

Q306 Q406 Q107 Q207 Q307

Gross Margin %

Source: Nokia

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1999 2000 2001 2002 2003 2004 2005 2006

…and Balance Sheet

Component Inventory Value

Revenue

Inventory management

Cash flow opportunity captured:

~100’s of millions €

Source: Nokia

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Supplier Survey

Excellent Unacceptable

0% 20% 40% 60% 80% 100%

Doing business with Nokia

Planning and execution

Quality practices

Relationship management

Collaboration

Corporate responsibility

Source: Nokia

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Research criteria• Financial performance • AMR expert evaluation• Peer assessment

1. Nokia2. Apple3. Procter & Gamble4. IBM5. Toyota Motor

World number one Supply Chain

Source: AMR Research Supply Chain Top 25 for 2007

(http://www.amrresearch.com/supplychaintop25/)

“As a pioneer in value chain strategy, Nokia has led in supplier development, sales & operations planning, and collaborative product development”

9 © 2007 Nokia Capital Markets Day 2007

But this is not ENOUGH !

10 © 2007 Nokia Capital Markets Day 2007

Transforming mobility and the internet

SUPERIOR and PROFESSIONAL EXECUTIONin Technology Planning, Quality, Supply and Cost

Capturing fast benefits of new business models

Working only with the best suppliers

Enhanced collaboration

Way ofWorking

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Technology management modes for future growth

Key software assets

Interfaces Scale advantage Open Source software

Trend

Focus

USE & CONTRIBUTEBUYSPECIFYMAKE

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Working only with the best suppliers..

Leadership and

values

Investment Capability

LowestTotal Cost

ProductPerformance Time to

Market

..and Supplier Portfolio# of Suppliers

HWSW & content

3

2

1

13 © 2007 Nokia Capital Markets Day 2007

Enhanced collaboration

Passion and TrustCo-creation

RewardsRisk Management

Human and business leadership

Nokia• Technology

planning• Product• Logistics

Supplier• Capabilities• Scale• Innovation

14 © 2007 Nokia Capital Markets Day 2007

Thank you.