Good morning. My name is Stephanie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Nokia First Quarter 2016 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Mr. Matt Shimao, Head of Investor Relations. You may begin.

Ladies and gentlemen, welcome to Nokia's first quarter 2016 conference call. I'm Matt Shimao, Head of Nokia Investor Relations. Rajeev Suri, President and CEO of Nokia is joining us today from New York. Timo Ihamuotila, CFO of Nokia, is here in Esbo with me today. During this call, we'll be making forward-looking statements regarding the future business and financial performance of Nokia and its industry. These statements are predictions that involve risks and uncertainties. Actual results may therefore differ materially from the results we currently expect. Factors that could cause such differences can be both external, such as general economic and industry conditions, as well as internal operating factors. We have identified such risks in more detail on pages 69 through 87 of our 2015 Annual Report on Form 20-F, our interim report for Q1 2016 issued today, as well as our other filings with the U.S. Securities and Exchange Commission. Please note that our results release, the complete interim report with tables and the presentation on our website include non-IFRS results information in addition to the reported results information. Our complete results reports with tables available on our website include a detailed explanation of the content of the non-IFRS information and a reconciliation between the non-IFRS and the reported information. With that, Rajeev, over to you.

Thank you. Matt, and thanks to all of you for joining. As you are all aware, today is the first time we are reporting results for the combined operations of Nokia and Alcatel-Lucent since we came together as one company in early January. As I go through my remarks, whenever I talk about year-on-year comparison, I will be using the recast combined company results for 2015 that include Alcatel-Lucent unless I note differently. Those recast figures were released on April 22 and can be found on our website. So, to the quarter, which I would characterize as solid, given that Q1 is typically seasonably weak, market conditions remain difficult and we are in the midst of the complex integration of Alcatel-Lucent. Despite these conditions, we were able to deliver a 25% year-on-year increase in Nokia-level non-IFRS operating profit. Our combined non-IFRS diluted earnings per share was down from Nokia's standalone EPS from one year ago. The decline was driven by multiple factors, including a higher share count and higher tax. From a top line perspective, we saw a Nokia level net sales decline from €6.1 billion last year to €5.6 billion this year. This 9% deterioration is a disappointing result, even if not surprising, and I will come back to this topic when I discuss Mobile Networks where we saw the majority of that decline. Looking beyond financial performance, I am confident that our integration work is proceeding well, that we continue to innovate and target new areas of future growth, and that we are executing well against our strategy for our Networks business as well as for Nokia Technologies. Given the progress we are making, we now have the confidence to say that we expect to deliver a full-year 2016 non-IFRS operating margin in our Networks business of more…

Thank you, Rajeev. I would like to start my remarks today by recapping the progress we have made around the Alcatel-Lucent transaction. I'll then walk you through Nokia's new reporting structure, along with financial commentary on Nokia Technologies and Group Common and Other in Q1. I will then turn to my typical discussion on our cash performance in the quarter, and lastly, I will spend a few minutes covering our outlook for 2016. Starting with the progress we have made around Alcatel-Lucent transaction since our previous earnings call. As you know, through the initial and reopened public exchange offer for Alcatel-Lucent Securities, and following the conversion of all of the OCEANE extended into the offer, Nokia attained approximately 91.5% ownership of the share capital and voting rights of Alcatel-Lucent. We have been working our way towards the squeeze-out threshold, enabling Nokia to squeeze out the remaining Alcatel-Lucent Securities. The Alcatel-Lucent ADR program was terminated on February 25, which enabled us to acquire a significant number of Alcatel-Lucent shares. As a result, Nokia now owns approximately 94.6% of share capital and voting rights of Alcatel-Lucent. This corresponds to approximately 91.6% of Alcatel-Lucent shares on a fully diluted basis. While we are not yet at the squeeze-out threshold, we remain confident that we'll reach this target. As I mentioned last quarter, we have a number of options available to us in order to reach out to the squeeze-out threshold, which we have detailed in the documentation for the public exchange offer. Given the obvious importance of this and to avoid any unnecessary distractions, we will not specify our next steps more explicitly at this stage. Moving then to our new reporting structure, we published the comparable combined company historicals in our new reporting structure for the new Nokia last month. The structure…

I'm sorry for the interruption. We are currently experiencing technical difficulties, so one moment while we resume.

Okay. Are we good to go?

Stephanie, can we continue?

You're back on the line.

Okay. I will continue on the cash flow section. So, in addition, Nokia had cash outflows of approximately €130 million related to income taxes and cash outflows of approximately €170 million related to net interest. And lastly, foreign exchanges had an approximately €110 million positive impact on Nokia's net cash in the quarter. Looking further into 2016, the bonuses paid under the incentive programs of both Nokia and Alcatel-Lucent will have a negative impact on Nokia's cash flow in Q2. Please note that, due to the later timing of our Annual General Meeting this year, the dividend payout is expected to take place in early July, impacting our cash flows only in Q3. In addition, we expect the restructuring related cash outflows to become more material as our restructuring progresses. Moving then to a detailed overview of our guidance for the year, starting with Nokia's Networks business. In February, when we reported the Q4 2015 earnings, we felt that the acquisition of Alcatel-Lucent was too recent to provide annual operating margin targets for the Networks business. Now that we have had a few months of operational and integration experience as a combined company, we feel more comfortable to comment on the full year. As Rajeev said in his remarks, we are expecting a transition year ahead. In addition to a challenging market environment, we are focusing significantly on the integration of Alcatel-Lucent in 2016, particularly in the first half of the year. While our visibility into the year is still not as good as we would like, we believe Nokia's Networks business will be able to deliver non-IFRS operating margin above 7% for the full year 2016. Then on Nokia Technologies. As we said last quarter, we don't see that it would be appropriate to provide annual targets for net…

Thank you, Timo. For the Q&A session, please limit yourself to one question only. Stephanie, please go ahead.

Certainly. Our first question comes from the line of Sandeep Deshpande with JPMorgan. Your line is open.

Yeah, hi, Rajeev. My question is regarding this decline in sales in Q1 in the wireless business. There was a comment from Timo as well as from somebody at Alcatel, which said that there is some level of one-off element in these sales because there will be aggregation of portfolio from Nokia and Alcatel. Do you expect to see some of these sales come back later in the year? And if the sales don't come back later in the year, can we, under your cost-cutting plan, expect to go to that kind of 10% sort of margin that Nokia Networks used to have? Thank you.

Thank you Sandeep. So the decline in Mobile Networks sales is largely attributed to the transition issue that we are facing, particularly in the first half, because we have moved really fast on the portfolio migration plans, better than we expected, in the first instance and in negotiating and discussing this with large customers. So we've seen that in North America, and to a certain extent also in China where the overlap is there. It is important to note that there is no loss of footprint, and, of course, we are squarely focused on the fact that there should be no loss of footprint as we migrate to the future portfolio. And then we'll also have seen in North America that one customer that was pending in TD-LTE compared to a year ago on both Alcatel-Lucent and Nokia footprint are not spending the same amount sort of this year. So it is reasonable to expect if we don't have a loss of footprint when we migrate to the future portfolio that that market share will be retained, and that is an important goal that we are focused on. On the cost plans, naturally, our synergy we have said that we expect above €900 million. We're tracking quite well. I gave a comprehensive update on where integration is and our synergies are progressing, so we continue to see better visibility on cost opportunities as we move forward.

(41:03) the 10% margin question, which I wasn't quite sure if it's related to sort of this year or some longer term, but on the margin, first of all, we have now guided that we expect the non-IFRS operating margin for the Networks business to be above 7% for 2016. We think that that's a realistic number, given our current visibility and also believe we can come above 7% with solid execution. Now, then, if the question was more sort of related to long term, we are simply not kind of like saying anything else that this 7% is really related to 2016 which we see is a transition year with lot of integration ongoing, and we don't feel that that should be used as a basis for any kind of longer-term margin analysis.

Thank you, Sandeep. Stephanie, we'll take our next question, please. Please limit yourself to one question only.

Your next question comes from the line of Achal Sultania with Credit Suisse. Your line is open. Achal Sultania - Credit Suisse Securities (Europe) Ltd.: Hi, thanks. And just a couple of questions. First one, you're talking about sub-seasonal improvement in the business in Q2, and basically it's related to the demand situation and potential integration issues ahead. But at the same time you are also increasing the cost synergies target. So I'm just trying to think, is the incremental savings beyond €900 million, should we assume this to be a minor number, or the integration issues in Q2, like the cost of swaps out or the top line is something which is creating uncertainty around Q2 profitability? And then I have a follow-up as well.

Okay, so Timo here. Thanks, Achal. Maybe I'll start this. So, I would really decouple the Q2 from the higher synergy estimates which we gave today. Of course, we are now in the midst of planning of getting the synergy benefits out, and as Rajeev said, we have a lot better plans now ongoing, but of course, executability of this has started after Q1. We are just going to see maybe the first personnel reductions during later part of Q2, maybe in some countries a little earlier. And so that €900 million is not really having much impact on Q2. What we are talking about Q2 really here is that the transition will continue and we will have likely some of the similar characteristics as we are having in Q1, and that simply means that we have called – that we are not expecting kind of like the more normal seasonal pattern where Q2 would be clearly higher both on top line and margin than Q1.

Thank you, Achal. We'll take your follow-ups off line. Stephanie, next question, please.

Your next question comes from the line of Gareth Jenkins with UBS. Your line is open.

Yeah. Thanks. I appreciate that you're not setting revenue targets for the year, but I think in the past, Rajeev, you've talked about a declining RAN market being offset by fixed assets that you've acquired. Is that commentary still valid for the year? Do you feel that you can get back to a position of stability by year-end in the business given what you're seeing in radio access in terms of swap outs et cetera? Thank you.

Thanks Gareth. So we have said consistently that we expect the wireless market to be softer this year, in particular in radio, and that we continue to maintain. Now, you take a long term view of our opportunity given the expanded sight of the portfolio, the end-to-end nature of the company, clearly there are segments such as Applications and Analytics, IP and Optical, and even Fixed, which is going through a secular trend due to the ability particularly in areas such as Europe to supercharge copper on the back of DSL deployments with G.fast and XG-FAST. So there are businesses that have multi-year growth opportunities, and there are others that would be sort of managed more for efficiency yet within those such as public safety and LTE, small cells, there are opportunities of growth even within Mobile Networks, as densification starts to take hold before LTE evolution or 4.5G, before 5G comes around. So that's the way I see it. But when it comes to maintaining share, that's something we're focused on, but we will not try to grow top line for the sake of top line by sacrificing gross margin in a competitive environment.

Thank you, Gareth. Stephanie next question, please.

Your next question comes from the line of Francois Meunier with Morgan Stanley. Your line is open. Francois A. Meunier - Morgan Stanley & Co. International Plc: Yes, thank you. I'm quite amazed actually by the performance in Networks regarding the gross margins. So volumes went down, but gross margin is up 340 bps year-on-year that's extremely remarkable given the industry conditions and what's going on. So maybe could you quantify what happened between Q1 this year and Q1 last year? Is it because you had more software sales this year, maybe less reselling of low margin Juniper product? Or is it just because maybe pricing improved a bit or you've done some operational improvement? I just would like to understand a bit this large positive move. Thank you.

Thank you, Francois, for the question. So first we saw Mobile Networks. We saw higher software sales compared to Nokia's standalone results in Q1 2015. We saw higher gross profit from the Fixed business within the Ultra Broadband Networks segment. Yes, we did see less third party router sales which come with lower gross margins, so the impact of that (47:18) improved gross margin for the IP/Optical Networks business group, but we saw also both IP/Optical Networks as well as Applications and Analytics have increased gross profit compared to last year. And then within Mobile Networks, you know that we have talked previously about our smarter transformation plans, which is an ongoing cost improvement, continuous improvement plan in products and services that affect COGS, including purchasing benefit COGS as well. So I think all of these are buckets that contributed to better gross margin in Q1. I will say that we are more of a software company than we were even previously, given that Applications and Analytics is largely a software business.

And maybe one quick note, Rajeev, from my side, on this side of the pond. So basically, when we look at the proportionate size of these businesses and when you have the Ultra Broadband declining and the IP and Applications going up, and IP and Applications having clearly higher, like 8, 9 points high gross margin, that's also, of course, having an impact on the total.

Thank you, Francois. Stephanie, we will take our next question, please.

Your next question comes from the line of Robert Sanders with Deutsche Bank. Your line is open.

Yeah, hi. Thanks for taking my question. Maybe if we could just deep dive a bit more on the routing business, what is your outlook for the year? I know you touched on it a bit earlier, but clearly the decline was a bit of a disappointment relative to my expectations at least, even with Juniper's warning. So if you could just talk a bit about the outlook for the year that would be great. Thank you.

Thanks, Robert. We are not giving outlook per se for the year for the IP business. We saw strong growth in Optical. We saw IP routing grow with the exception of the Juniper, the third party routers sales coming off, and that's by design. That is a strategy. We have our own portfolio and we want to substitute with our own portfolio. So what happens is you start to exit some of the deals of the third party routers, and then it takes some time to transition to the inflection point when we get our own routers in place in some of those deals, which we are focused on. So I will say long term I see that IP/Optical Networks is a growth opportunity for Nokia. IP routing also is a growth opportunity for Nokia. And remember that while we've done quite well in the past in edge routing, in core routing, we continue to win deals and that's somewhere where we can continue to take share based on our solid platform.

Thank you, Rob. Stephanie, next question, please.

Your next question comes from the line of Kai Korschelt with Merrill Lynch. Your line is open.

Yeah. Afternoon. Thanks for taking my question. So I just had a slightly high level question. So it looks like your Networks revenue will be down a few percent this year. I reckon that will cost you a few hundred million euros in profit. So there is obviously risks that it starts to neutralize some of the deal synergies that you were planning last year when you announced the deal, and back then you probably weren't expecting such a decline in demand. So, I just really want to clarify the net synergy number that you give us. Should we think about it as the starting point being last year? We had the 10% operating margins. Or this year where we're probably going to be somewhat below because it obviously doesn't make quite a difference in terms of the margin and profit target that you're aspiring to on a 2018, 2019 basis? Thank you.

Yeah, thanks, Kai. Timo here. So, Kai, as I said in the previous, one of the previous questions, first of all, I said specifically that this above 7% is something which we see as 2016-specific number, and in that sense, we don't feel that that should be used as a basis for any kind of longer-term analysis. As you well know, we have not really given a long term guidance. So I can't sort of go here and say that this is our target base number, but as I said, the 7%, or above 7%, should not be really used for that, but I don't think there is much else we can give here.

Thank you, Kai. Stephanie next question, please.

Your next question comes from the line of Avi Silver with CLSA. Your line is open.

Hi, good morning. Thanks for taking my question. Given the weaker Networks guidance for margin, how much of the operating margin pressure, on a year-on-year basis, is going to come from gross margin versus OpEx? As part of that, can you help bridge the difference between the 10.1% Networks margin last year and the 7%, above 7% for this year, and also, how much of the impact is coming from swaps that some of your customers seem to be asking for? Thank you.

Okay, thanks. So why don't I talk a little bit about the puts and takes here. So first of all, the 10.1% number, of course, was a, I would say, super strong number which was partly impacted by, at least somewhat, over-strong fourth quarter in the Alcatel-Lucent and in their Mobile Networks business. So I don't think that 10.1% is maybe like a – let's call it like a total going concern comparable. And then, when we look at the market dynamics for this year, so I said we are seeing mobile networks market down. So that is going to cause some decrease in operating leverage. At this point in time, we are not seeing any massive change in competitive environment, but we are building into our outlook, let's say, a bit of cautiousness on that as well, because sometimes or often, when the market is down, there can be a bit more pressure on the deals, and that could impact the gross margin. So those are really the main points, what we are thinking about here when we are talking about that above 7% overall guidance for 2016. I also think it's fair to say that we have a totally new sales setup. We have a new systems (54:00) environment with which we are bringing the estimates for the two companies together really, and our visibility is not as good, of course, as we would like it to be, and it's not kind of yet on an, I'll say, overall going concern level, which is having a bit of an impact as well here.

Thanks, Avi. Stephanie, next question, please.

Your next question comes from the line of Pierre Ferragu with Bernstein. Your line is open. Pierre C. Ferragu - Sanford C. Bernstein & Co. LLC: Hey, thank you for taking my question. I have a question on your guidance. So you have like a very unusual way of guiding with open-ended ranges, more than 7% instead of a range, and decline instead of a range as well for currency, and I was trying to understand the rationale behind that, if you say (54:50) it's difficult to interpret the reason for that. I could imagine you don't expect margins to be way above 7%, or the revenue decline to be like in double-digits or something like that, so why not a range, more than this open-ended approach? And then very quickly, on synergies, did you ever comment on how much of that would come from OpEx and how much would come from (55:11) That would be helpful. Thanks.

Okay. Thanks, Pierre. So, as I said, we think that the 7% is a realistic number, and naturally, we believe we can come above 7% with a solid execution. So that's our thinking. But why we are sort of giving a floor is exactly the point that, again, as I said earlier, we don't have quite the visibility, at least I would like to have at this point, on the overall setup we have, two very different system environments which we are integrating, and it will simply take time to get sort of proper going concern estimation, visibility. We are like three months, four months into the integration here, and I, of course, appreciate that everybody would like to be in a situation where you can give sort of full solid range type of guidance. We felt that this was the right way to go for us (56:08) at this point in time ,and we will continue to evaluate during the year when we learn more. And then, regarding the €900 million, or above €900 million synergy target, we have actually not split it between OpEx and other items, because I said this is a net number, and our plan is then to give more granular information on this, hopefully after Q2, where we can then start to talk about how big would be the charges, when we would take them, how big would be the expected cash outflows and so forth.

Okay. Thank you, and we have time for one last question, Stephanie.

Your last question comes from the line of Vincent Maulay with Oddo. Your line is open. Vincent Maulay - Oddo & Cie SCA (Broker): Yeah, thanks. (56:57) how to read the discrepancy between Alcatel-Lucent and Nokia Newco growth in China in Q1, both quarter-on-quarter and year-on-year? Does it mean the Newco doesn't lose any market share, but you already swapped former Alcatel-Lucent hardware? In this case, do we have to expect the negative drag on operating profit still pending?

Thanks, Vincent. So, I think your question is related to China decline, particularly in the former Alcatel-Lucent sales. And again, as we said, this is related to our transition. So if you step back, we have moved quite fast on our migration plans. We've agreed this with the majority of customers where there is overlap, particularly in North America and China, but also beyond, where there are other customers that they (57:55) smaller level of overlap. And this is a huge achievement in the first quarter itself, and within this quarter, we expect to nail down these agreements. That means that there a pause in purchasing related to the older portfolio simply because customers expect that you are going to move fast to the new portfolio. And that, I think, makes sense because they wouldn't sink money into an old portfolio which only have to be sort of swapped or relegated in the future. Now, having said that, let's also remember that when we talk about swaps, we have been able to prove that the vision of CPRI has come true. So we are not going to be swapping radio units. We are going to be swapping only baseband units, which is a lower level of swap compared to the massive swap that we have to undertake without the CPRI interface, even though we see a little bit of elevated level of swaps where value creation can be there in a quick point of time. So I think it's all related to transition, and it's particularly in the first half of this year.

Yeah, maybe, Rajeev, if you allow sort of a higher level comment on the same topic. So, overall, I would say that our integration of the two roadmaps is going faster than we expected. We are integrating and getting on the road by faster than expected, thus, it is also having maybe a bit quicker impact on the transition top line during this early integration period which we have discussed that 2016 is a transition year, and, in particular, the first half of 2016. But I think on the other side of that, there is a massive amount of very well done work on really getting to common plans for all of these key customers. I don't know, Rajeev, if you...

Yeah, absolutely.

So thank you, Vincent, and thank you all for your questions. With that, I'd like to turn the call back to Rajeev for closing remarks.

Thanks Matt and Timo and thanks again to all of you for joining. I'd like to close with a few words. There is no doubt that 2016 is a year of transition. Not only are we in the midst of a major integration but we're also seeing market headwinds, particularly in Mobile Networks. Despite these challenges, however, I remain confident that we are doing the right things in the right way. Retaining our operational discipline by targeting new opportunities in IP and technology licensing, enterprise, the Internal of Things, digital health and digital media. And all this will give us the right platform for the future, a platform that we fully intend to use to create further shareholder value. With that, thanks for your time, for your questions, and thanks for your attention. Matt, back to you.

Ladies and gentlemen, this concludes our conference call. I would like to remind you that during the conference call today, we have made a number of forward-looking statements that involve risks and uncertainties. Actual results may, therefore, differ materially from the results currently expected. Factors that could cause such differences can be both external, such as general economic and industry conditions, as well as internal operating factors. We have identified these in more detail on pages 69 through 87 of our 2015 Annual Report on Form 20-F. A report for Q1 2016 issued today as well as our filings with the U.S. Securities and Exchange Commission. Thank you.

This concludes today's conference call. You may now disconnect.