Lagos, Nigeria. February 2021: In a bid to enhance the capabilities of small and medium enterprises (SMEs) in Nigeria, leading consumer goods company, P&G, has partnered with the Federal Ministry of Industry, Trade and Investment, and the Bank of Industry (BoI) to launch the 2021 P&G – BoI SME Academy.
This year’s SME Academy – which aims to upskill hundreds of SMEs in Nigeria – will feature a webinar on Friday, February 12th, 2021, and an eight-module business training.
The Vice President of the Federal Republic of Nigeria, His Excellency, Professor Yemi Osinbajo, GCON, will deliver the keynote address at the program.
The SME Academy webinar will also feature senior government and private sector officials including
Otunba Adeniyi Adebayo – Honorable Minister of Industry, Trade, & Investment,
Mr. Omar Channawi – P&G Senior Vice President for Asia, Middle East & Africa,
Mr. Olukayode Pitan – Chief Executive Officer of the Bank of Industry,
Mrs. Bola Adesola – Senior Vice Chairman for Africa at Standard Chartered Bank,
Ms. Yewande Sadiku, the CEO of the Nigerian Investment Promotion Commission (NIPC),
Mr. Muhammad M. Nami, the Chairman of the Federal Inland Revenue Service (FIRS), and
Mrs. Tara Fela-Durotoye, the CEO of House of Tara amongst others.
As a force for growth and a force for good for over 28 years in Nigeria, Procter & Gamble has invested significantly in SME development, job creation and trusted, quality leadership brands for Nigerians. Similarly, the Bank of Industry has supported the growth and expansion of thousands of SMEs in Nigeria.
Through the SME Academy, both organizations will jointly train hundreds of local SMEs annually on basic business skills to improve their standards, ensure longevity and facilitate their integration into global value chains.
Speaking on the partnership, P&G Managing Director for Nigeria, Mr. Adil Farhat said,
“P&G is delighted to collaborate with the Federal Ministry of Industry, Trade & Investment and the Bank of Industry to develop the capacity of SMEs and aid their integration into the global value chain. We are honoured to support the government’s plan to create more jobs through SMEs and ensure that small scale businesses have the right skill set to grow, sustain their operations and contribute to the growth of Nigeria’s economy.”
Also commenting on the academy, the Minister for Industry, Trade and Investment, Otunba Adeniyi Adebayo said, “In line with the National Economic Sustainability Plan (NESP) of the government, it is important that skill acquisition forms the basis of SMEs operation as they contribute immensely to the economy of the country.
As a result, we will support their growth by upskilling and creating an enabling environment which allows them to thrive. The partnership with P&G is timely and we are glad that this public-private partnership will support the government’s plan to train SMEs and create more jobs.”
Remarking on the initiative, Mr. Olukayode Pitan, the Managing Director/ Chief Executive Officer of the Bank of Industry said,
“BoI is committed to impacting SMEs in Nigeria and we believe that this collaboration will drive growth in the nation’s economy. The SME Academy is focused on finding a sustainable solution to unlocking the efficient performance of these enterprises through advisory and skill development.”
As part of the two-day SME Academy and webinar, Procter & Gamble and the Bank of Industry will facilitate the delivery of structured virtual business classes for SME representatives. Some of the classes include tax compliance, access to international markets, procurement principles, business ethics, and corporate governance.
The recent demand witnessed in the FGN Bond market persisted for another consecutive trading session today, across the bond curve. The 2024s paper woke from its regular slumber today, as demand for the paper saw change hands at 6.10% levels.
At the belly, demand for the 2028s and 2029s papers were sustained with trades being crossed around 8.40%. The 2034s and 2049s bonds were the most active at the long end of the curve, trading at 10.00% and 10.10% levels respectively. Consequently, yields compressed further by c.4bps on the average across the benchmark curve.
We expect to sustained levels of trading activity in tomorrow’s session week, as demand is anticipated to continue to filter in at these levels against thin supply volumes.
The recent weakness seen in the OMO market cooled during today’s trading, as bids for the long-dated papers strengthened following a slight improvement in system liquidity. The January 2022 papers saw reduced selling pressure from offshore parties despite improved bids from local banks.
On the NTB aisle, we noted some wholesale demand for the October papers which traded close to the 1.00% mark. Yields remained unchanged across the benchmark bills curves D/D.
With supply expected from the CBN in form of OMO auctions for tomorrow, we expect a cautious market as participants look to see if the Apex bank makes a move to increase its stop rates in line with secondary market trading levels.
Money Markets
The interbank system liquidity improved slightly, opening 1.72% higher at c.N229.50Bn. Despite this, we saw OBB and OVN rates close higher at 11.25% and 11.50% respectively.
We expect rates to remain pressured as system outflows from the expected OMO and FX Retail Auctions deplete system liquidity.
FX Market
The FX market stayed very quiet for the most part of the trading session with rates staying unchanged across the different market segments except at the IEFX market where the Naira depreciated by 0.50k closing the day at N395.50/$ following a 26% drop D/D in traded volumes in that space.
Eurobonds
At NGERIA Sovereign space, we saw continued demand interests as global crude oil prices consolidated recent gains. Although the market had a pretty quiet session, we saw yields compressed slightly by an average of c.2bps across the curve.
The NGERIA Corps also had a quiet session, while the only movement seen amongst the tracked papers was on ACCESS 2021s and UBANL 2022s which weakened by c.25bps and c.100bps respectively.
Available in South Africa, Ethiopia and Kenya, Nigeria joins the growing list of countries where people can simply tap on the Marketplace icon or visit www.facebook.com/marketplaceto browse and search for items, sort based on distance or category.
Commenting, Adaora Ikenze, Head of Public Policy for Anglophone West Africa, said:
“The launch of Marketplace in Nigeria further highlights our ongoing efforts in helping to boost buying and selling in Nigeria and connecting communities. This comes at a crucial time as the effects of the COVID-19 pandemic continues to impact people and businesses, and with many people buying and selling on Facebook, this will provide people with a convenient destination where they can discover new products, shop for things they want or find buyers for the things they are ready to part with.”
How selling works on Facebook Marketplace
When a seller lists an item on Marketplace, they create a public listing that can be seen by anyone on Facebook. This includes people on Marketplace, News Feed, Facebook search, Facebook Groups or search engines. Sellers can simply take a photo of an item, enter a product name, description and price, confirm their location, select a category, and post.
Commerce Policy: Items, products or services sold on Facebook must comply with ourCommunity Standards, as well as theCommerce Policies. Sellers and Merchants are responsible for complying with all applicable laws and regulations.
Verify the item: For high-value items (example: watches, luxury bags), consider requesting a certificate of authenticity or proof of purchase. If you’re not satisfied with an item’s condition or have doubts about its authenticity, you can decline to complete the purchase. If the seller offers to ship the item rather than exchanging it in person, keep in mind that you may not have the opportunity to verify the item before completing your purchase.
Meet in a public location: If you are meeting, ensure this is in a public place. Don’t invite buyers or sellers into your home. Before going to the agreed location, tell a family member or a friend the exact location where you will meet, bring your cell phone, and consider asking another adult to come with you. If the value of the item you intend to buy or sell requires a significant amount of cash, you might consider using a person-to-person payment method. Please follow local guidelines for how to stay healthy and help prevent the spread of coronavirus (COVID-19) while buying and selling.
Use cash, COD, or person-to-person payment methods: Buyers and sellers may offer or accept cash, Cash on Delivery (COD) or person-to-person (P2P) payments. If you choose to pay electronically using bank transfer or money order solutions, avoid payment links and log in directly through the payment method’s website. Keep in mind that personal checks or bank drafts can be counterfeit. Transactions are between the buyer and seller only, and no third-party guarantee should be involved.
Protect your privacy: Don’t share your financial account information (example: Payment login and password, bank account info) with buyers or sellers. Additionally, make sure yourFacebook Privacy Settings are up-to-date. These settings help limit what other people can see (example: status updates, location, photos) on your profile page and what you share on Facebook.
Report a seller or listing: If you think a seller or product violates our Commerce Policies, you can report them.
Watch out for potential scams: For example, be wary of sellers who express urgency or claim to be in rush. Always take the time to verify the product meets your needs before making a final decision. Also, be wary of people who pretend to be employees of Facebook and ask for your account information and personal details or suggest using any kind of services to complete a transaction.
Strong full-year results demonstrate Unilever’s resilience and agility
Today, Unilever announced its results for the full year 2020, which show the underlying sales growth of 1.9%. The company focused on driving competitive growth through an execution against its five growth fundamentals and delivered a step up in competitive performance.
Underlying sales growth was 1.9%, with 1.6% volume and 0.3% price
Turnover decreased by 2.4%
Underlying operating profit decreased by 5.8%, but increased by 0.7% at constant exchange rates
Underlying earnings per share decreased 2.4%, but increased 4.1% at constant exchange rates
“In a volatile and unpredictable year, we have demonstrated Unilever’s resilience and agility through the Covid-19 pandemic. I would like to thank the Unilever team, whose dedication and hard work has delivered a strong set of results under the most difficult of circumstances.
“Early in the year, we refocused the business on competitive growth, and the delivery of profit and cash as the best way to maximise value. We have delivered a step change in operational excellence through our focus on the fundamentals of growth. As a result, we are winning market share in over 60% of our business in the last quarter, on the basis of measurable markets. The business also generated underlying operating profit of €9.4 billion and free cash flow of €7.7 billion, an increase of €1.5 billion.
“We progressed our strategic agenda, building on our existing sustainability commitments with ambitious new targets and actions, most recently with our plans to help build a more equitable and inclusive society. We completed the unification of our legal structure under a single parent company and we continue to work on separating out the tea business as we evolve our portfolio.
“Today we are setting out our plans to drive long term growth through the strategic choices we are making and outlining our multi-year financial framework. While volatility and unpredictability will continue throughout 2021, we begin the year in good shape and are confident in our ability to adapt to a rapidly changing environment.”
Future strategy and multi-year financial framework
As one of the world’s largest consumer goods businesses, Unilever serves consumers through our purposeful brands. Our vision is to be the global leader in sustainable business. We will demonstrate how our purpose-led, future-fit business model drives superior performance, consistently delivering financial results in the top third of our industry.
Our differentiating strengths
Unilever’s success over the last 130 years and its future success are shaped by the strengths that give us competitive advantage. We have a powerful portfolio of leading category and brand positions, with 2.5 billion people using our products every day. We have a strong presence in the markets that will drive global growth in the years ahead and our global leadership in sustainability and commitment to sustainable business is widely recognised.
Our strategic choices
We have made five strategic choices that we believe will support our future growth and help us realise the potential of the business.
Develop our portfolio into high growth spaces, positioning Unilever in the categories that will drive future growth. This will be our guiding strategy behind the choices we make for organic investment and for our acquisitions and disposals.
Win with our brands as a force for good, powered by purpose and innovation. Purpose-led brands have been at the heart of Unilever throughout our history and purpose continues to dominate our thinking and our portfolio today as it becomes even more relevant to consumers. We will underpin our focus on purpose with differentiated science and technology that ensures our brands and products have superior quality and efficacy.
Accelerate in the US, India and China and leverage the strength of our emerging market. Unilever has strong brand and category leadership positions in the US, India and China, with around 35% of our turnover coming from those three countries alone, and we believe we can bring sharper focus in those geographies and build even stronger positions. There is also significant opportunity beyond these markets and we will continue to build on our strong operating businesses in the world’s fastest-growing economies.
Lead in the channels of the future. Position our business for success in the channels of the future, focusing particularly on e-commerce and digitising the distributed trade, underpinned by advanced shopper insight as the consumer and customer landscape continues to evolve.
Build a purpose-led, future-fit organisation and growth culture. Driving growth through capacity, capability and culture, while continuing to generate fuel for growth.
Multi-year financial framework
We will deliver long term value creation by continuing to evolve our portfolio and driving earnings growth, a strong cash flow and a growing dividend.
Underlying sales growth ahead of our markets, delivering USG in the range of 3% to 5%
Profit growth ahead of sales growth, on a comparable basis
Sustained strong cash flow over the long term
Savings of €2 billion per annum from our well-established ‘Fuel for Growth’ savings programmes
Restructuring investment of around €1 billion for 2021 and 2022; lower thereafter
ROIC in the mid-to-high teens
Net Debt to Underlying EBITDA at around 2x
Our markets
The operating environment in our markets has been volatile since the Covid-19 pandemic began in early 2020. In the fourth quarter, we continued to see changes in consumer behaviour and channel dynamics.
Strict lock-downs in China and India led to market declines in the first and second quarters respectively, with both markets subsequently returning to growth during the year. China has normalised in many categories, while economic activity in India picked up particularly in the final quarter.
In North America and Europe, elevated demand for food consumed at home has continued to drive market growth, whilst consumer usage of most beauty and personal care categories remains subdued. In Latin America markets were broadly flat for the year and several South East Asian markets contracted.
Unilever overall performance
We focused on driving competitive growth through execution against our five growth fundamentals, responding with agility to changing dynamics driven by the pandemic, and delivered a step up in competitive performance.
For the full year we grew underlying sales by 1.9%, with volumes growing 1.6% and 0.3% from price. In the fourth quarter underlying sales growth was 3.5%, with volumes of 3.3% and 0.2% from price.
Growth was driven by hand and home hygiene products, laundry and in-home food and refreshments. Food solutions and out of home ice cream sales declined, impacted by channel closures. As people stayed at home and had fewer opportunities to socialise, they spent less time on personal grooming which impacted sales in much of the Beauty & Personal Care business, except for hygiene products where demand was high.
Category demand patterns varied throughout the year and by market, driven by the differing status of lock-down restrictions. E-commerce grew by 61%, as we captured demand in online channels, and is now 9% of Unilever.
Emerging markets grew 1.2% as China and India returned to growth, after strict lock-downs in the first half of the year. China returned to growth in the second quarter as restrictions were eased, delivering high single digit growth in the second half. Latin America grew mid-single digit and Indonesia grew slightly, though declined in the final quarter. Developed markets grew 2.9%, led by strength in North American in-home foods. Europe declined for the full year but grew in the final quarter.
Turnover decreased 2.4%, including a positive impact of 1.2% from acquisitions net of disposals and a negative impact of 5.4% from currency movements.
Underlying operating profit was €9.4 billion, a decrease of 5.8% including a negative impact from currency of 6.5%. Underlying operating margin decreased by 60bps. Gross margin reduced by 50bps, including a negative impact of 90bps from additional costs needed to adapt and run our supply chain and adverse mix from Covid-19.
While brand and marketing investment was conserved in the first half during the early lock-down periods, we invested strongly behind our brands in the second half and, for the full year, brand and marketing investment was up €160 million at constant exchange rates. Overheads increased by 10bps, reflecting adverse currency mix and turnover growth.
We delivered free cash flow of €7.7 billion, an increase of €1.5 billion driven by favourable working capital movement, as we increased focus on receivables and re-phased capital expenditure in light of Covid-19.
Beauty & Personal Care
Beauty & Personal Care underlying sales grew 1.2% driven by volume, with flat price.
Skin cleansing saw mid-teens volume-led growth for the year, driven by the important role of hand hygiene in combatting the spread of Covid-19. Our Lifebuoy hygiene brand grew by over 50%, launching H for Handwashing, an educational campaign to teach children the importance of handwashing with soap.
Lock-downs and restricted living in our markets led to lower demand for skin care, deodorants and hair care, which each saw volume and price declines, most significantly in the second quarter. Skin care declined high-single digit and deodorants declined mid-single digit. In hair care, growth in wash and care partially offset a decline in styling products, leading to a low-single digit decline overall.
Oral care grew with price growth more than offsetting negative volumes driven by supply disruption related to lock-downs in key markets in the second quarter.
Our Prestige Beauty business was impacted by door closures in the health and beauty channel, but achieved a shift to over 50% e-commerce, overall declining low-single digit.
Underlying operating margin in Beauty & Personal Care declined by 100bps, with a reduction in gross margin driven by adverse mix and additional costs related to Covid-19. This was partially offset by a reduction in brand and marketing investment, as we conserved spend during lock-down periods, before significantly stepping up investment in the second half.
Home Care
Home Care underlying sales grew 4.5%, with 5.1% from volume and negative pricing of 0.6%.
Our home and hygiene brands delivered high-teens volume-led underlying sales growth. Demand for products with germ-killing and antibacterial benefits has been elevated throughout the year. Domestos grew over 25% as we launched the brand in China and introduced spray and wipe formats.
Our living hygiene range of local brands grew over 50%, led by Lysoform’s educational campaigns in Italy. Within the fabric category, fabric solutions declined slightly, driven by lower consumer prices as we passed on some of the benefits of reduced commodity costs in the second half of the year. Capsules and liquids continued to grow. Low-single digit growth in fabric sensations was led by Indonesia and by Turkey, where our relaunched Snuggle (Yumos) brand performed well.
Underlying operating margin in Home Care declined by 30bps, driven by increased brand and marketing investment as we invested strongly behind our brands in the second half of the year. Overheads and gross margin improved, helped by lower material costs, despite Covid-19 related costs and negative price.
Foods & Refreshment
Foods & Refreshment underlying sales grew 1.3%, with 0.1% from volume and 1.1% from price.
Our retail foods business grew double digit, as restricted living led to more in-home eating occasions for consumers. Food solutions declined by 30% as out of home channels remained closed for much of the year.
Hellmann’s grew high-single digit, supported by its Stay In(spired) campaign, and our plant-based brand The Vegetarian Butcher grew over 70%. Despite significant decline in the out of home business due to channel closures, ice cream grew slightly overall as we rapidly shifted resources towards the in-home business. Ben and Jerry’s performed strongly, teaming up with Netflix on its new ‘Netflix and Chill’d’ variant. Tea grew low single digit.
Underlying operating margin in Foods & Refreshment declined by 50bps. The decline was driven by lower gross margin, due to adverse mix impacts from out of home channel closures, costs related to Covid-19 and higher commodity costs in the second half of the year.
Strong demand for home computers, tablets and games consoles helped consumer electronics trade revenues reach $358.5Bn in 2020, an increase of 7% over 2019, according to the latest research from Strategy Analytics.
According to the report, Global Consumer Electronics Market Forecasts 2014-2024, shipments of home computers and tablets rose 11% to 396 million units last year, while revenues increased by 17% to $199Bn, as millions found themselves needing new devices for working and learning from home.
Photo by Aaron Burden
Games console revenues rose 18% to $11.9Bn, driven by the launch of new consoles as well as lockdowns. Not every category was successful – sales of wireless speakers (including smart speakers) fell by 3% to 240 million units. TV sales were also down slightly (-2%) but this was a significant improvement on industry expectations earlier in 2020.
Figure 1. Global Electronics Revenue Trade Value in $Billions (Graphic: Business Wire)
The 2020 outcome represents a substantial improvement overall compared to many projections made after the pandemic began. Strategy Analytics’ early 2020 forecasts had suggested a broadly flat market overall, but many vendors were bracing themselves for significant sales declines as anti-COVID19 measures were implemented in Q1 and Q2.
While there were short-term disruptions in some categories, demand recovered in the second half of 2020. Government financial support measures played an important role, and there were even signs towards the end of the year that vendors were unable to meet demand.
“No one needs reminding that 2020 was an unusual year,” comments Eric Smith, Director, Connected Computing Devices. “Supply chains were initially thrown into disarray but recovered remarkably well to meet stronger-than-expected demand. Against all expectations the industry still faced some supply constraints as 2020 came to an end, suggesting that WFH and LFH are still providing demand impetus as we enter 2021.”
“Looking at this data you would be forgiven for thinking 2020 was another normal year,” says David Watkins, Director, Connected Home Devices.
“In contrast to doomladen predictions of economic collapse made as the pandemic took hold, consumers continued to find the budget for technology which helped them through the crisis. Home entertainment has rarely been as important in people’s lives, and vendors of smart TVs, video streamers and games consoles stepped up to the plate.”
5% year-on-year decrease in reported net sales in Q4, primarily due to Mobile Access, as declines in network deployment and planning services were partially offset by growth in radio access products
1% growth in constant currency net sales in Q4
Continued improvements in our Mobile Access portfolio; strengthening roadmaps, reducing product costs and improving product performance; commitment to invest in R&D to drive product leadership
Increase in Mobile Access gross margin in Q4, primarily driven by improved 5G gross margin, partially offset by a project-related loss provision
Positive operating profit, on a reported basis, in Q4 and full year 2020
Non-IFRS operating profit in Q4 benefited by approximately EUR 250 million, due to the timing of revenue recognition and a net positive fluctuation in Nokia’s venture fund investments
Strong free cash flow in Q4 and full year 2020 benefited from an early customer payment of approximately EUR 0.5 billion, which was expected in Q1 2021
Derecognized EUR 2.9 billion of Finnish deferred tax assets, which are not lost
Reiterated outlook for 2021 comparable operating margin of 7-10% and provided new outlook for net sales and free cash flow
Board does not propose a dividend or dividend authorization for the financial year 2020
This is a summary of the Nokia Corporation financial report for Q4 and full-year 2020 published today. The complete financial report for Q4 and full-year 2020 with tables is available at www.nokia.com/financials. Investors should not rely on summaries of our financial reports only, but should review the complete financial reports with tables.
PEKKA LUNDMARK, PRESIDENT AND CEO, ON Q4 AND FULL YEAR 2020 RESULTS
PEKKA LUNDMARK, PRESIDENT AND CEO (NOKIA) | www.brandspurng.com
Nokia delivered a solid Q4 to end 2020 at the high end of our Outlook range. We saw healthy gross margin and operating margin performance for both Q4 and full-year 2020, supported by a regional mix shift towards the higher-margin North America region and by our ongoing R&D efforts to enhance product quality and cost competitiveness.
From a business group perspective, in Q4 and full-year 2020, our gross margin improvement was primarily driven by Networks, as was our full-year operating margin performance. In Q4, our operating profit performance benefited by approximately EUR 250 million from two unexpected, yet significant drivers: a timing benefit of approximately EUR 150 million as we recognized net sales at the very end of the quarter, which we had expected in 2021; and we had a net positive fluctuation in Nokia’s venture fund investments of approximately EUR 100 million.
The healthy close to the year does not change our earlier communicated view for Nokia-level operating margin expected in 2021.
Net sales for Q4 were down 5% on a reported basis and up 1% in constant currency and for full-year 2020 they were down 6% on a reported basis and down 4% in constant currency.
Nokia delivered strong cash performance in Q4 and full-year 2020, benefitting from a large customer payment that had been expected in Q1 2021, marking the third consecutive quarter of positive free cash flow. Additionally, our liquidity position continues to be solid.
Financial improvement in Mobile Access was clear in both Q4 and full-year 2020 results, reflecting our ongoing efforts to strengthen the competitiveness and cost position of our mobile radio products. Overall, we saw growth in radio access products in Q4 and full-year 2020, with growth in 5G partially offset by decreases in legacy radio access products.
5G gross margin increased due to product cost reduction, partly helped by higher ReefShark shipment volumes. Our aim was to be above 35% for our KPI on shipments of our “5G Powered by ReefShark” portfolio; we ended the year at 43% and we remain on track to realize 70% by the end of 2021. This underlines the ongoing progress with our Mobile Networks turnaround and, as I said in Q3, we will invest whatever it takes to win in 5G. Completing the turnaround in Mobile Networks remains our top priority for 2021, and these visible signs of progress give me confidence that we are on the right track but there is still work to be done.
Our Enterprise business delivered another good set of results giving a solid foundation to build on. Q4 Enterprise net sales were up 1% in reported and 5% in constant currency. For full-year 2020, they were up 11% in reported and 14% in constant currency, reflecting our leadership position in many areas, including in private wireless. We announced key partnerships with AT&T and Verizon for private wireless and won 79 new customers in Q4. We now have 260 private wireless customers. Public sector demand remains robust and we announced a US federal government cyber deal after the quarter end in mid-January.
At the end of 2020, we announced a new operating model to better align us with the needs of our customers and to better maintain and achieve technology leadership in the areas where we choose to compete.
Pleasingly we already have strong technology leadership positions in many key areas of our new business groups. In-Network Infrastructure we have industry-leading FP4-based products and in Cloud and Network Services we are jointly developing transformational cloud-native 5G core solutions for CSPs and Enterprise customers. In our Mobile Networks business, together with Elisa and Qualcomm, we hold the worldwide 5G speed record.
These are encouraging results, however, as I said in Q3, we expect 2021 to be challenging, a year of transition, with meaningful headwinds due to market share loss and price erosion in North America.
Additionally, as I said, delivering on our new operating model for a strong and sustainable long-term business requires us to make further 5G R&D investments in 2021, meaning we will sacrifice some short-term margin to ensure leadership in 5G.
Considering these elements, we maintain our comparable operating margin outlook for 2021 and – as new items – give an outlook for net sales and free cash flow for 2021. As previously stated, we intend to provide long-term outlook latest at Capital Markets Day on March 18.
Regarding dividend, we are pleased with Nokia’s recent operational performance and satisfied that we have strengthened our cash position. However, with the focus on increased investments in 5G and strategic areas, while continuing to establish a track record of sustainable cash generation, the Board does not propose a dividend or dividend authorization for the financial year 2020. We intend to provide an update on our dividend policy latest at Capital Markets Day.
We took important steps in 2020 to accelerate roadmaps, improve execution and create a new way of working, which will enable Nokia to return to a sustainable long-term financial performance. We know we have our work cut out for us in 2021, but the new Group Leadership Team has hit the ground running. As announced earlier, we will go deep into each of our business groups at our Capital Markets Day to discuss specific targets and action plans.
I want to conclude by thanking everyone at Nokia. This has been a year of incredible change where our personal resilience, as well as technology, has been tested like never before. I am extremely proud of our team, their commitment and their achievements. Thank you.
Net sales
In Q4 2020, reported net sales decreased 5%, primarily driven by lower net sales in Mobile Access, where a decline in network deployment and planning services was partially offset by growth in 5G radio access products. On a constant currency basis, Nokia net sales increased 1% in Q4 2020. In full year 2020, reported net sales decreased 6%, primarily due to network deployment and planning services in Mobile Access. In Nokia Enterprise, we continued to make great progress in full year 2020 and delivered 11% year-on-year growth in reported net sales. On a constant currency basis, Nokia net sales decreased 4% in full year 2020.
Gross margin
Reported gross margin in Q4 2020 was 39.2%, compared to 38.5% in Q4 2019. Non-IFRS gross margin was 41.8%, compared to 40.0% in Q4 2019. The improvement in gross margin was primarily driven by Mobile Access, where strong 5G gross margin expansion was partially offset by a project-related loss provision. To a lesser extent, our Q4 2020 gross margin performance was affected by mix shifts, with a higher proportion of Group Common and Other, as well as a decline in Nokia Software. In full year 2020, reported gross margin was 37.6%, compared to 35.4% in full year 2019. Non-IFRS gross margin was 39.0%, compared to 36.5% in full year 2019.
Operating profit
In Q4 2020, our non-IFRS and reported operating profit performance was positively affected by approximately EUR 250 million from two significant drivers: a timing benefit, as we recognized net sales at the very end of the quarter, which we had expected in 2021, and a net positive fluctuation in Nokia’s venture fund investments. Our non-IFRS and reported diluted EPS benefited by approximately EUR 0.035 from these items.
Earnings per share
Non-IFRS diluted EPS in Q4 2020 was EUR 0.14, compared to EUR 0.15 in Q4 2019, primarily due to lower operating profit, partially offset by a net positive fluctuation in financial income and expenses. In full year 2020, non-IFRS diluted EPS was EUR 0.26, compared to 0.22 in full year 2019.
Reported diluted EPS in Q4 2020 was negative EUR 0.46, compared to EUR 0.10 in Q4 2019. The change was primarily driven by a net negative fluctuation in income taxes related to the EUR 2.9 billion derecognition of Finnish deferred tax assets and, to a lesser extent, lower operating profit, partially offset by a net positive fluctuation in financial income and expenses. In full year 2020, reported diluted EPS was negative EUR 0.43, compared to 0.00 in full year 2019. The derecognition was required due to a regular assessment of our ability to utilize the tax assets in Finland in the foreseeable future that is done primarily based on our historical performance. These tax assets are not lost, and the derecognition can be reversed. They can still be utilized in the taxation and the derecognition is not expected to affect the overall taxation of the Nokia Group or its cash taxes. For further details on the derecognition of Finnish deferred tax assets, please refer to note 6, “Deferred taxes” in the “Financial statement information” section in Nokia Corporation Financial Report for Q4 and full year 2020.
Cash performance
Q4 2020 was the third quarter in a row of positive free cash flow. During Q4 2020, net cash increased by approximately EUR 0.6 billion, resulting in an end-of-quarter net cash balance of approximately EUR 2.5 billion. During Q4 2020, total cash increased by approximately EUR 0.4 billion, resulting in an end-of-quarter total cash balance of approximately EUR 8.1 billion. Strong cash performance in Q4 and full year 2020 benefited from an early customer payment of approximately EUR 0.5 billion, which was expected in Q1 2021.
COVID-19
COVID-19 resulted in a net sales impact of approximately EUR 200 million in full year 2020, with the majority of these net sales expected to be shifted to future periods, rather than being lost. In addition, we had a temporary benefit of approximately EUR 250 million due to lower travel and personnel expenses related to COVID-19.
DIVIDEND
Beginning with the distribution for the financial year 2018, Nokia started paying dividends in quarterly instalments. On October 24, 2019, the Board resolved to pause dividend distributions, in order to: a) guarantee Nokia’s ability to increase 5G investments, b) continue investing in growth in strategic focus areas of enterprise and software and c) strengthen Nokia’s cash position. This was done in accordance with Nokia’s dividend policy, which states that dividend decisions are made taking into account Nokia’s cash position and expected cash flow generation.
The Board is pleased with Nokia’s recent operational performance and the track record of sustainable cash generation that Nokia is starting to build. The Board is satisfied that Nokia has strengthened its cash position. However, the Board continues to focus on ensuring Nokia’s ability to increase investments in 5G and strategic areas, while continuing to establish a track record of sustainable cash generation. Therefore, the Board does not propose a dividend or dividend authorization for the financial year 2020. After Q4 2021, the Board will assess the possibility of proposing a dividend distribution for the financial year 2021, taking into account the net cash position, as well as the outlook for 2022.
COVID-19
The COVID-19 pandemic has made vividly clear the critical importance of connectivity to keep society functioning. We believe we have a resilient customer base, and we feel a sense of duty to our customers and the communities they serve.
Due to significant uncertainties and risks in estimating the impact of customer-related delivery and implementation challenges, we are now focusing our COVID-19 disclosure on the impact of factory closures, which have had a net sales impact of approximately EUR 200 million in full year 2020, with the majority of these net sales expected to be shifted to future periods, rather than being lost. The EUR 200 million of negative impact in full year 2020 relates primarily to Alcatel Submarine Networks in Group Common and Other, which experienced temporary factory closures that particularly impacted Q1 2020 and Q2 2020.
COVID-19 also affected our operational costs (for example, temporary lower travel), capital expenditures (temporary delays), and cash outflows related to taxes (tax relief). In full year 2020, we had a temporary benefit of approximately EUR 250 million due to lower travel and personnel expenses related to COVID-19, of which approximately EUR 150 million benefited operating expenses and approximately EUR 100 million benefited cost of sales. In full year 2021, based on our current understanding of the COVID-19-related developments, we expect a temporary benefit of approximately EUR 150 million due to lower travel and personnel expenses related to COVID-19, of which approximately EUR 100 million is expected to benefit operating expenses and approximately EUR 50 million is expected to benefit cost of sales.
Potential risks and uncertainties continue to exist related to the scope and duration of the COVID-19 impact and the pace and shape of the economic recovery following the pandemic and it is impossible to predict with accuracy the precise impact of such risks on us, our operations and our business.
During the COVID-19 pandemic, we have continued to advance our 5G roadmap and product evolution, as planned, and we believe that our COVID-19 mitigation actions in R&D have been successful.
Health and safety
Naturally, Nokia’s first focus during the COVID-19 pandemic is to our employees. We have in place strict protocols for Nokia facilities and provided clear advice to our employees about how they can mitigate the risks of COVID-19 in situations where they have to go about critical work. We have taken a range of steps, including banning international travel for Nokia employees, except for strictly-defined ‘critical’ reasons; closing all our facilities to all visitors, with the exception of people engaged in essential maintenance and services, and asking our staff to work from home wherever possible. We started implementing these measures in some regions already in January 2020 and have updated guidance as the situation has developed.
As the overwhelming majority of Nokia employees continue working remotely, we are providing guidance on how staff can maintain a healthy work-life balance and look after their physical and mental well-being.
Supporting the essential services our customers provide
The products and services that we provide have never been more critical in enabling the world to continue to function in an orderly way. We continue to work closely with all our customers, to ensure that the changing needs and requirements at this time are well understood and that we respond appropriately to them.
In Q4 2020, connectivity continued to bring together people isolated from each other by the COVID-19 pandemic. Remote working and schooling, robust delivery of basic services and smart deliveries are just some examples that have been enabled by our connectivity solutions. In December, we announced that, together with Vodafone India Foundation, we have deployed a Smart Agriculture solution that aims to improve the productivity of farmers in India. The pilot project is being implemented in 100 locations in the states of Madhya Pradesh and Maharashtra and will benefit over 50 000 farmers in the region by enhancing their productivity and income.
Nokia has a global manufacturing footprint designed for optimized global supply, and to mitigate against risks such as local disruptive events, transportation capacity problems, and political risks. Our supply network consists of 25 factories around the globe and six hubs for customer fulfillment. As a result, at the Nokia level, we are not dependent on one location or entity. We have also established a global command center to manage the supply chain challenges arising from the outbreak; and we are ready to activate relevant business continuity plans should the situation in any part of our organization require this.
These actions demonstrate our strong commitment to supporting global efforts to end the pandemic and overcoming the disruption and challenges we currently face.
The outbreak of the Covid-19 pandemic may have affected some businesses in Nigeria, but for the likes of Mikano International Limited, it has been about strategic positioning and planning.
In an exclusive interview with the Public Relations Officer of Mikano, David Fakuade, on the state of the company both during and after lockdown, he disclosed that they were able to pull through due to strong financial reserve.
David Fakuade, Public Relations Officer, Mikano international | www.brandspurng.com
He went on to add that Mikano despite observing the various government protocols on Covid-19, was able to maintain a large number of its staff as extra money was added to those that did exceptionally well during the tough period.
Fakuade noted that as a company, it is important to always plan well and think outside the box, which is what has helped Mikano stand as a company as they were also able to diversify into other sectors like foods (chocolates, wafers), medical masks, Mikano sanitizing machine, Mikano Sanitizing Frames, Mikano Sanitizing Tunnel and recently launched Mikano Automobile.
The PRO explained that the company is not slowing down as they plan to go into the manufacturing of syringes and other medical products anytime soon.
“We are also planning on going into things like syringes and other medical products,” he disclosed.
Analysts at the Financial Derivatives Company (FDC) envisage another jump in headline inflation rate to 16.2% in January 2021. This will be 0.45% higher than the December 2020 numbers. It is likely to be the 17th consecutive monthly increase and the highest level in nearly 4 years.
Typically, commodity prices fall in January due to post-Christmas blues and dwindling purchasing power and liquidity. January is also the month of tuition fees. However in January 2021, like no other year, prices have spiked. This is partly because of import restrictions, shortages and cost-push factors (currency devaluation effect and higher energy costs).
Wempco Road, Nigeria | www.brandspurng.com
The MPC, at its last meeting, was of the opinion that the economy will recover i.e. return to the positive growth rate in Q1’21. The Q4’20 GDP growth numbers are scheduled for release on February 22. Analysts are estimating a range of –3.0% to –5.1%.
If the numbers disappoint to the downside, the CBN will not wait for an MPC meeting to intervene in tinkering with the general level of interest rates. We also expect the FG debt securitization to increase the supply of fixed income instruments in the market and push up interest rates.
Food crisis looms as herdsmen invade farmlands
Nigeria may be on the cusp of a food crisis as the food cultivating region is enmeshed in crisis. The incessant attacks on farmers and farmlands have prevented farmers from operating at optimal capacity.
Food accounts for approximately 51% of the inflation basket. Food inflation crossed the 19% mark in December 2020 (19.56%) and is projected to rise to 20.9% in January 2021 due to supply chain disruptions and exchange rate pass-through effect.
Core inflation to rise to 11.5% due to cost-push factors
Based on our forecast, core inflation (inflation fewer seasonalities) is expected to increase by 0.13% to 11.5% in January 2021. This reflects the transmission effect of higher PMS price and electricity tariff hike on commodity prices.
Inflation across SSA more to the upside
Inflation generally increased across Sub-Saharan Africa (SSA). With the exception of South Africa, all the SSA countries under our review reported an increase in inflation.
This was largely driven by food price pressures and currency weakness. The monetary policy authorities left their policy rates unchanged at their last meetings.
Concluding thoughts
Inflationary pressures will continue to mount. We expect the GDP numbers to be released on February 22.
The consensus is that real GDP growth will contract by –4.6%. If the GDP numbers disappoint to the downside, and inflation crosses the 16% threshold, the dilemma between supporting output growth and tapering inflationary pressures will be more critical.
The CBN is unlikely to wait till the next MPC meeting before intervening to tinker with the general level of interest rates.
This was confirmed in a list released by the Academy on Thursday showing all eligible films from 93 countries in the IFF category.
The Nigerian Official Selection Committee (NOSC) had submitted ‘The Milkmaid’ to the Academy in December 2020.
The official acceptance of the film by the Academy is a first-time feat for Nigeria at the Oscars, having disqualified “Lionheart”, the country’s first submission in 2019 on the basis of language defect.
The first shortlist of 15 films in the IFF category will be announced on February 9, 2021. Another shortlist is expected to be released in March, ahead of the 93rd Academy Awards ceremony on April 25, 2021.
Written, produced and directed by Desmond Ovbiagele, “The Milkmaid” is a Hausa language-based thriller on insurgency, especially as it affects women and children in Sub-Saharan Africa. Inspired by the image on Nigeria’s 10 Naira note, the film tells the story of a Fulani milkmaid who confronts extremists in a rural African community, in a quest to locate her missing sister, and how efforts to recapture her disrupted past prove complicated.
Reacting to the official acceptance of ‘The Milkmaid’ by the Academy, Chairperson of the NOSC said, “It is heart-warming that the decision of the NOSC has been ratified by the Executive Committee of the IFF”, noting that “the feat underscores our strict adherence to the rules of the biggest film awards scheme in the world.”
Expressing great excitement, Anyaene-Abonyi said: “Having sailed through the eligibility stage in the IFF’s selection process, there is no looking back for us at the NOSC. I commend the great effort of every member of the committee. This is a job well done. And while we wish “The Milkmaid” and indeed our country further success in the remaining journey towards the 93rd Academy Awards in April, we look further into the years ahead with greater determination to continue to play on this global stage. If we have done anything to get Nigeria to the present feat, rest assured that the NOSC will do even more in the coming years of the Oscars.”
Sporting behemoth Nike continues to grow its influence as its brand value continues to increase by the billions. It’s dominance over its main competitor Adidas, is clear especially in the North American region where Nike generates 43% of its total revenue.
According to data presented by Safe Betting Sites, Nike’s brand value increased by 151% in 10 years, increasing for the fifth year in a row to $34.4B.
Nike One of the Most Valuable Brands, Sees 151% Growth in 10 Years
Nike was founded in 1964 and since then has become one of the biggest brands in the world. In 2020 Nike’s brand value increased by 6% compared to 2019 to $34.4B making them the 15th most valuable brand worldwide. This is a 151% increase from its brand value of $13.7B in 2010.
This is a difference of 96% compared to the brand value of its main competitor, Adidas, which was at $12.1B in 2020. However, Adidas’ brand value also saw a dramatic increase in the last decade with an increase of 120% from 2010 to 2020.
Nike Dominates North America while Asia-Pacific is Adidas Territory
In the first half of 2020, Nike recorded over 43% of its revenue from North America which totalled $14.5B the largest out of their distribution regions. The second-largest region for Nike was Europe, the Middle East, and Africa with revenues that amounted to around $9.35B.
Photo by Andre Hunter on Unsplash
Greater China alone was their third largest region with revenue of close to $6.7B. Its smallest source of revenue is the Asia Pacific & Latin American region where Nike recorded revenue of $5B.
Adidas meanwhile only received 24% of their revenue from North America compared to 34% from Asia-Pacific. Revenue from the Asia Pacific region amounted to almost $2.8B in the 1st half of 2020 which is the largest out of all their operating regions.
Its next largest source of revenue is Europe with almost $2.3B or 28% of their total revenue. Revenue from North America is only Adidas’ third-largest source of revenue with almost $2B in the first half of 2020.
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