Welcome to Nokia's Second Quarter 2021 Conference Call. I'm David Mulholland, Head of Nokia's Investor Relations. Today we have Pekka Lundmark, our President and CEO along with our CFO, Marco Wiren connected with us via video and audio from our Escrow offices. During this call, we will be making forward-looking statements regarding our future business and financial performance and 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 as well as internal operating factors. We have identified such factors in the section titled, operating and financial review and prospects risk factors of our 2020 annual report on Form 20-F, as well as our other filings with the U.S. Securities and Exchange Commission. Within the presentation today, unless stated otherwise, references to growth rates will mostly be on a constant currency growth rate basis, and margins will be based on our comparable reporting. Please note that our results released the complete report with tables and the presentation on our website include comparable results information in addition to the reported results information. Our complete financial report with tables available on our website includes a detailed explanation of the content of the comparable information and a reconciliation between the comparable and the reported information. Today, stock exchange release and presentation can be found on our Investor Relations website. With that, I would now like to turn the call over to Pekka.

Thank you, David and hello, everyone. Thanks for joining the call. I hope you and your families remain safe and well. Great start to 2021 continued in Q2. And this has enabled us to increase our outlook for the full-year. My presentation today will include a brief overview of our financial performance, followed by an update on the progress we have made in each business group against the strategy we outlined earlier in the year. I will then hand over to Marco to go through the financial performance in more detail. As highlighted on the slide, in the second quarter, we delivered 9% constant currency net sales growth, that was primarily driven by network infrastructure with 20% growth in constant currency and strong performance across all product areas. We're benefiting from a robust end market dynamic particularly in fixed networks. But we're also achieving meaningful market share gains and there is strong demand for submarine networks. Nokia Technologies saw new deals in automotive and some one-off brand licensing deals. In addition, our underlying recurring royalty base expanded double-digits year-on-year. Positively, despite being in the reset phase of their strategy both mobile networks and cloud network services also delivered growth in constant currency. Profitability wise, our comparable gross margin expanded 270 basis points year-on-year. This benefited from a one-off software deal in mobile networks but we saw a strong underlying expanse and even excluding that deal. Comparable operating margin came in ahead of our expectations, a strong growth in network infrastructure and good cost discipline across businesses drove good operating leverage. This shows that the underlying potential of the business exists. But we still see headwinds into the second half of the year, which we will revisit later. Back in March, we announced our new three-phased strategy to achieve sustainable profitable…

Thank you, Pekka. And good morning, everyone from my side as well. I will now provide some more detail on our financial performance in the second quarter. As Pekka already mentioned, we continue to benefit from strengthening end-markets. We have also increased our forecast for addressable marketing 2021 and we now estimate that the total addressable market will grow by 5% in constant currency in 2021. And is up from the previous estimate of 3%. And the increase is primarily being driven by mobile networks. What we have seen rising investments in 5G. Note also that our forecast for mobile RAN growth in U.S. dollars would be consistent with estimates for 2021 from third-parties just like Dell'Oro. If we investigate the drivers of our revenue growth, all of our business groups grew in constant currency. We saw particularly strong growth again from network infrastructure, as Pekka explained earlier, and Nokia Technologies as we signed new automotive licenses. From regional perspective, the largest contributors in absolute terms in our growth were India and Latin America, up 75% and 57% respectively in constant currencies. And both regions benefited from stronger LTE deployments and demand for our fixed IP and optical products. In Europe, we saw significant growth in 5G deployments with re-silence in most other areas of the business. North America saw a robust performance despite the headwinds on market share and pricing based on the contracts negotiated in 2020. In Greater China, we saw continuation of the strong mobile networks capacity deployments that we saw in Q1. One area, we wanted to provide some more visibility on our progress this quarter is our gross margin. And this quarter has shown the importance of gross margin expansion in driving our overall financial performance. At the group level, our gross margin saw a…

Thank you, Marco. Given the strong Q2 and first half results, we have today revised our full-year 2021 outlook upwards. From a net sales perspective, we now expect to land between €21.7 billion and €22.7 billion, as we're now assuming actual currency rates for the first half, and that the end of June rate continues into the second half. We have also revised our comparable operating margin outlook now expecting it to be in the range of 10% to 12%. While our first half results provide a strong foundation for the rest of the year, we still expect the earlier communicated headwinds to impact us in the second half. More specifically, this is related to market share and pricing in North America in regards to contracts made in 2020. Therefore, we still expect typical quarterly earnings seasonality to be less pronounced in 2021. In addition, we continue to accelerate R&D investments. And of course, we're also monitoring the component situation, working very closely with our suppliers to ensure we can meet the strong customer demand we're seeing. We have also adjusted our free cash flow and comparable return on invested capital guidance today based on our first half results. So in summary, I'm pleased with our strong performance in the first half of the year, our team has done a great job in establishing such a firm foundation. But as we have said, it is important to bear in mind that our results benefited from some one-offs and we have a lot of work ahead of us. We're still only in the first phase of our strategy execution. But with a good start for the year, we're confident that we're on the right track to achieve our long-term targets. Thank you.

Thank you, Pekka. We'll now move over to the Q&A session. As a courtesy to everyone in the queue, we would ask that you kindly limit yourself to one question and one brief follow-up. With that, I'll hand over to the operator Rachel who will give the instructions.

Thank you. We'll now begin the question-and-answer session. [Operator Instructions] Your first question comes from Dominik Olszewski from Morgan Stanley. Please go ahead.

Good morning everyone. Thank you for taking the question. So the main question would be whether you could discuss the puts and takes around the outlook for 2023 obviously very strong performance in the first half of this year and improved guidance for this year, could you just talk about the puts and takes for 2023 obviously no change to the midterm outlooks that's the main question. And then the follow-up is just around the gross margin bridge you gave showing the fixed business and the submarine networks business was a drag on gross margin. So, given you feel confident in those businesses going forward in terms of backlogs, can you talk about whether those become less of a headwind going forward? Thank you.

Okay, thank you. If I take the first one and Marco, if you take the gross margin question. Hey look, we're still in the early stages of executing on our strategy. Of course, we're really happy with the H1 results. But there were also some one-offs that were helping us there. And then we have the earlier communicated headwinds in the second half of the year. So H1 provides a very good foundation. But it's only four months since we announced our 2023 outlook. So we do not see a reason to change it today.

And what counts to the mix changes and their impact our cross margins, mixes are going up and down quarter-by-quarter. And that's why we believe that it's better to look in a longer-term the business. Of course, if we have continuation of a strong growth in a lower margin businesses that will hit and our future gross margins and whatever mixes we see, those have been already taken into account in our guidance for '21 as well. So I would say that there's that puts and takes in all of our businesses, not only with these two.

Thank you, Dom. Rachel, next question, please.

Thank you. Your next question comes from Alex Duval from Goldman Sachs. Please go ahead.

Yes, good morning everyone, and thanks for question. Firstly, your gross margins are obviously very strong. You've quantified the product mix benefits in wireless. But it'd be interesting to know a bit more about the extent to which customers now reward you with better prices for mobile products and the extent to which mobile gross margins have further to expand in coming quarters or years if you make further improvements on the wireless side. And then my quick follow-up would just be on network infrastructure revenues, you referenced the strength and the growth there. I wonder to what extent you see that as sustainable given you did reference work from home demand being a booster, which arguably could start to run to hard comps at some point. I'm wondering if there key product cycles you could point us to or whether you're seeing sustainable demand driven by digitalization more broadly, many thanks.

Okay. Thanks, Alex. So, if I take the network infrastructure, Marco continues to be our gross margin expert, right. So, network infrastructure, of course, I mean, hey look 20% growth in the quarter and you saw even some higher numbers in the individual businesses. We do believe that there is some kind of structural underlying changes in the market especially, especially the home connectivity, home broadband connectivity, and then actually, we're starting to see the effects of the 5G deployment also when you need connectivity for base stations and all that capacity that is there needed is then also boosting, boosting the IP and optical networks market. And there are reasons to believe that that this trend will continue and when you then move to the next phase of the mobile network development, when the small cells and millimeter wave radio start to get more common, you will need even more capacity in base station connectivity. So we're optimistic about the structural development of this market. But just to be realistic on numbers, we'll already in the second half start facing tougher comparables, so don't just automatically assume that these percentages will continue but structurally good market going forward.

And what comes to the gross margin as you saw in the Preachers Wall, we have regional mixes that are impacted positively volume and of course the cost and but in the mobile networks, we have also of course the 5G ReefShark that is impacting but also within that, there's a cost elements that we have been able to improve and also in the mobile networks services part is improving our gross margin in the quarter as well, and as they've been cleaning up the portfolio and agreements as well. So there are different elements that that are impacting how that will continue in the future, that we will get back to you in our guidance and of course our ambition is that, we will be as good as we can and customers actually expecting as well that that we have to show cost improvements in our products.

Thank you, Alex. Rachel, next question, please.

Thank you. The next question is from Sandeep Deshpande from JPMorgan. Please go ahead.

Yes, hi thanks for letting me on. Two quick questions, if I may. Firstly, whether you're showing progress now in China, you've taken some share in China in the most recent auctions. Have you seen any progress with your updated product in the United States which is the other region where you had a significant change in market share over the last few years? And then secondly, on the gross margin in the mobile business, there clearly is a dent, there's a hysteresis between your shipment of your ReefShark product, and your revenue recognition of that ReefShark product. So having given that you're saying your - given where you are today in terms of shipping ReefShark based products within your mobile business, where are you in terms of recognizing them in terms of your gross margin today?

Yes, thank you. Thank you, Sandeep. Yes, we will take the gross margin and yes, the U.S. market, I mean the good news is that, that this much discussed headwinds in terms of market share and pricing. They have been quite well understood already since October last year when we for the first time started to talk about them, because they relate to earlier things, earlier contracts 2020 matters, we're actually pretty confident on the U.S. market situation we have signed as you have seen five year 5G deals now with both T-Mobile and AT&T. And we also have to remember that Verizon continues to be a very big and important customer to us in many segments. And then the U.S. market is actually a lot more than these three large operators, there is a significant number of smaller operators that we're working with. And we're fairly confident in our position there. And on top of all of this, there is a growing enterprise market private wireless market and now as we have recently seen, there is a high likelihood that also the government driven programs in terms of connectivity will increase going forward. So we have every reason to be optimistic about the U.S. market.

And what comes to the mobile networks gross margin before I touch upon the ReefShark and shipments versus revenues, I just want to highlight once more that remember, there are other factors as well that are important for the gross margin expansion and improvement that we've seen in the first half. And if we look at what Tommy and his team in mobile networks have done in 5G, the way we're producing and developing 5G is much more efficient today than it was just a year ago, then of course, when we see the volumes are increasing, that will also impact our ability to improve the cost base in that product area. In addition that we have other areas in mobile networks, just like I mentioned about the services that are impacting as well, what comes to the ReefShark, that's one part of the improvement and we've seen that, there's about six months delay between the shipment until we recognize that in our P&L and I would say that that's about the same today and it was a year-ago. So you can use it as a rule of thumb and see about what is the relationship between shipments and revenue recognition on ReefShark based products.

Thank you, Sandeep. Rachel, next question, please.

Thank you. The next question is from Sami Sarkamies from Nordea Markets. Please go ahead.

Hi, thanks. My question would be on mobile networks, where you're material upgrading your margin assumptions. Can you explain what has surprised you on the upside this year, and also why you have chosen not to move the goalpost for '23 even though you will still materially benefit from our system on chip transition. And then may be a follow-up, any reason why you couldn't get to Ericsson gross margin levels in mobile networks, once you have completed the system-on-chip translation, I think they are 44%, excluding IPR revenues. Thanks.

Thank you, Sami. If I start with that 2023, I think I actually already answered that question. Of course, we're pleased with our H1 even excluding the effect of some of the one-offs, we've been talking about the issues that are going to face us in the second half of the year, meaning that the typical seasonality that we have seen will be less pronounced this year. And this is only four months, since we published the '23 targets. So we do not feel that today is the right time to revisit them, then when it comes to the mobile networks, surprises and Marco, Marco, you can then go deeper into the margins if needed. But of course, one thing that that has clearly changed in the last few months is the market itself, very strong demand on the market, we have as you saw, we upgraded also our market size, market growth forecast this year, our product execution has been faster, we've been able to speed up there, as Marco explained and then on top of that, very good operational cost control. And here, I would say that the simplification of the operational model that we did were in the earlier setup, we had actually multiple sometimes even five management team members being partially responsible for one mobile network deal. Now it's all in the mobile network business. And Tommy is fully responsible for that. So that is already showing its effects, positive effects.

And just building on that, it would come to the new operational model. It's extremely nice to see that that each of the businesses have really taken that responsibility and focusing on costs, but also on a top line, and seeing how can we improve the business and we have totally different discussions today than we had before the new operational model. So I'm very pleased to see as well how that has landed.

Thank you, Sami. Rachel, next question please.

Thank you. The next question comes from Simon Leopold from Raymond James. Please go ahead.

Thanks for taking a question. I want to ask two, one I think is a quick one, the other one's a little bit more strategic. In terms of the quick one with the award of the Chinese 700 megahertz project, I presume that a little bit of a gross margin headwind, could you help us understand how that particular project factors into your overall thinking? And if in fact, the assumption is correct. And then in terms of the strategic question, I want to get an understanding of your priorities specifically in your optical business, given that you currently lag the sector leaders in technology and profitability, how do you address or solve those problems is your priority to close the product gap or the profitability gap, how can you do both? Thank you.

Okay. Just quickly the China question the effect on volumes and margins. This year will be - will not be material, we do not comment on margins, on individual deals, but it is of course known that the Chinese market is highly competitive and typical in this type of deals, the margin is lower in the beginning and then there is an opportunity to increase over time, but of course 4%, this 4% is not more, it's 19,200 base stations. So you have to put it into perspective. So it is not really material. Then I mean we're right now moving to the fifth generation of optical coherent technologies with the PSE-V architecture. We're seeing our technology competitiveness clearly increased with this technology, we have optimized in a way the cost to performance ratio for the sweet spot of 400 gig and sometimes 600 gig connectivity in Metro, Metro regional enable long distance networks, 800 gig can be implemented by two times 400 line card, but that's only a very small part, maybe 2% to 3% of the total demand at the moment. And that's why the full portfolio that we are now having launched PSE-V has greatly increased in competitiveness. And if and when there is then a phase where 800 with the direct implementation would become a mass market, we will certainly be there at the right time as well.

Thank you, Simon. Rachel, next question please.

Thank you. The next question is from François Bouvignies from UBS. Please go ahead. François Bouvignies: Hi, everyone. I have a follow-up on the 2023. So, I not understand the bigger that you don't want to increase now, because it's been only four months and I totally understand that. I just wanted to understand the moving path. So if we look at the full-year '21, you already will have 10% to 12%, '23 you have 10% to 13%. If we look at, these 10% to 12% already increase the headwinds of pricing of Verizon. So something that possibly will be less of a headwind in the next two years. And then you have this scale ReefShark, benefit that would probably increase your cost - improve your cost, strong network infrastructure with structural demand with a positive mix. If we look at your full-year '23 guidance for operating margin for this division, and then you have the C-band in the U.S. which possibly is a good geographic mix. So my question is, what - is there anything that I miss or what kind of a headwind we should expect in next two years that would offset negatively these drivers? Just trying to understand the moving paths, please.

Thank you and I don't disagree with your fact, but again H1 strong foundation boosted by certain one-offs. The component market situation will remain tight, there could be always surprises there, this will continue well into 2022. Some analysts are even saying this is not necessarily our estimate, but some are even saying that it will continue into 2023. So there is also - even though we are seeing strong demand, there is also uncertainties there. So we just feel that this is not the right time. We are only four months into the execution of the strategy. We are still in the reset phase. And let's now focus on the day-to-day hard work and we do not want to speculate anything more on 2023.

Thank you, François. Rachel, next question, please.

Thank you. The next question is from Aleksander Peterc from Societe Generale, CIB. Please go ahead.

Hi, and thanks for taking the question. Good morning to all. Firstly, just on network infrastructure. If you look at the underlying businesses and their growth rate so far this year, could you comment whether you're gaining share in IP or in optical and in fixed access? And the second is a just a small follow-up just on the component situation. Can you confirm that despite the tightness, you don't see any top-line headwinds in the current year from the [indiscernible] situation, i.e. and those are really held back by the shortages? Thanks a lot.

Okay. Thank you. If I take the component question and Marco, if you take the NI growth prospect question. I mean, as we have said the component market is tight. And I think I said in - after Q1 that, that you had to fight for your share every day. And that situation continues. We are on daily calls with many, many suppliers. We have been for the most parts able to deal very well with this situation. But it actually is interestingly, that we could grow even faster if there were more components available. But all this is included and assumed in our guidance. And of course, if it's any comfort as to regarding our ability to deal with the situation, as you saw, we upgraded our top-line guidance by roughly €1 billion. So it just shows that yes, we are able to deliver. Then on top of that, I'm saying that it could even have been a bit more if there were more components available.

And what comes to the IP and fixed networks. These are the two areas actually we'll be having a technological advantage. We have - in the IP side, we've been gaining market shares in certain regions. And we see that we are actually taking - getting closer to number one. In certain areas like Europe, we are number one already. And definitely the technological leadership is extremely important here. And these are one reason why we believe that in a tech high-tech industry you have to have a very good focus on technology and securing that you are absolutely top notch on technology side. And that's why we invest in R&D. The same actually goes for fixed network. So if you look, we are the only one that can offer 25 gig solutions in a fixed networks. And this has definitely shown as a very good sales pitch towards our customers and especially when we see that in the connectivity, demand is increasing very heavily, not only because of the 5G, but also because of the COVID situation and remote and flexible working solutions. So I would say that in both those areas, we are definitely seeing a positive development.

And maybe just to add, I mean, just looking purely at number. So first half, your top-line growth in IP networks is 15%, in optical networks 10% and fixed networks 37%. We are saying that, that the market growth is maybe 4% or something like that there could be faster growing pockets. Yes, but with these numbers, I think it's absolutely clear that we have taking market share.

Thank you, Alex. Rachel, next question, please.

Thank you. The next question is from Andrew Gardiner from Barclays. Please go ahead.

Good morning. Thank you for taking the question. So follow-up to that last one really on network infrastructure. Just to the points that you were making, really, I mean, you're talking about the 4% growth in the TAM for NI this year, yet qualitatively you're sounding very bullish. And yet you haven't upgraded to TAM, I think I can see. As you guys have said, are you're clearly gaining market share. It's a two part question. One, why is there not a bit more upside to that TAM given the end-market trends you're seeing? And in terms of market share, you guys are showing real strength in fixed in terms of the year-on-year growth submarine as well. Perhaps to a slightly lesser extent in optical, but still good growth. Clearly, you've got a major competitor there or in Huawei. Can you talk about the trade will backdrop and how that this has been sort of, obviously ongoing for a number of years now? Do you feel like the share gains that you're seeing now are up? You're being boosted by that effect in many of these markets particularly outside of China? Thank you.

Yes, I don't think those things that you refer to that they would have at least so far been a big needle mover in IP optical or fixed networks. There has been occasional tenders or occasional suggestions where that could have played into it but not in any big way. This really comes from our technology, competitiveness, that is it. And then when it comes to the market size estimates. I think your question is fair, we have not yet seen what the market analyst houses are saying about Q2, we don't have those numbers available yet. So let's see what they are saying then we have to see if we keep this or if there is reason to change, but we are clearly seeing strength in this market.

Thanks, Andre. Rachel, next question please.

Thank you. The next question is from Daniel Djurberg from Handelsbanken. Please go ahead.

Thank you, operator for take my question. And then congrats to solid report. My question was mainly been asked already, but I could ask you about Japan, perhaps I think you mentioned in Q1 that it was a little bit product, temporary product differences to your key component or Ericsson but have super strong first-half. Can you comment a little bit on the Japanese market outlook? And also, I guess, we saw APAC ex-Greater China and India was down 4% in the quarter?

Yes, that was really APAC and Japan was the only market, which were slightly down. We had six or seven markets where were growing. The primary country that that affective that slightly negative number. Remember, it was only slightly negative, it was Korea. It was not Japan. The picture in Japan remains strong and the same statement that we made after Q1 remains that there seems to be certain timing differences between in operators plans between our in a way our regions in 5G and then in some of our competitors regions, and that is our understanding as to why you may have seen some differences in statements about growth in Japan.

And just building on that. Remember that we are a customer or supplier to all top CSPs in Japan as well.

Thanks Daniel. Rachel, next question please.

Thank you. The next question is from Robert Sanders from Georgia Bank. Please go ahead.

Yes, good morning. Just really one question, which is just about your commentary around North America on share loss and price erosion in the second half. I was just wondering if you thought that might continue into the first half, because obviously where do you saying a lot of the first half is temporary a one-time effects, that could be a difficult comparison into the first half of '22. So I just want to be certain that you're still on a growth path in the first half of '22, based on what you can see today? Thanks.

Yes, thank you. I mean, as I said, those things are related to mostly events before this year. So the effect on the second half will be stronger than in the first half. But that should really then be it for the most parts, but we have not given of course 2022 guidance. I refer to what I said earlier that we remain kind of overall optimistic and confident on the North American market. There are no new headwinds, if you will that would have surfaced after we first started to talk about this thing in October last year.

Thank you, Rob. Rachel, next question please.

Thank you. The next question is from Richard Kramer from Arete Research. Please go ahead.

Thanks very much. One for Pekka and one for Marco. Pekka, you talked about your conversion rate, and people have asked you about market share. But inside your installed base, clearly a lot of customers were shared with Huawei. So I'd like to know and I'm certain that something you tracked. What extent do you think your share gains are some sort of dividends, which is coming in the wake of various carriers being obliged to exclude Huawei from many markets? How much do you think the market share gains have come directly as a result of that? And then for Marco, maybe you could give us a little insight into the licensing pipeline. Was the renewal with Samsung including cellular standard essential patents, because it's not entirely clear from that? And do you have any material renewals coming up in the next year or two that could change the outlook in terms of the run rate you've laid out for the licensing business? Thank you.

Yes, thank you. When we look at the mobile network market share, our estimate continues to be for this year that it would be 25% to 27% excluding China that is slightly lower than what we had last year. And as we said, we now expect and target that the conversion rate would stabilize indicating that there would not be further market share losses and hopefully, we would then start winning back customers and we have already done that now in China and in Canada. So, there is - there are cases as you know and as we have discussed where operators for various sometimes politically driven reasons have decided to change supply switch suppliers and we have already estimated and I can confirm that that we have won approximately 50% of such opportunities, but we are not publicly quantifying that, how much that would be in terms of revenue or margin.

And when it comes to the pipeline in technologies. We basically have renewals continuously in different scales and most of our agreements, and what comes to also when the renewal is happening, or confidential. But you could calculate that, we have always a handful of renewals every year that that we negotiate with, just like you've seen now that OPPO is at the moment on table. So these are coming continuously and this is normal business for technologies. So yes, and what comes Samsung deal we signed with them it is covering wide area of video systems and so forth. And we're quite happy with that system or the agreement as well.

Thank you, Richard. Rachel, next question please.

Thank you. The next question is from Frank Maaø from DnB. Please go ahead. Frank Maaø: Hi, good morning all and congrats on a great quarter here. Most of my questions have been answered. But I want to just follow-up on the market share situation especially in mobile networks outside of the U.S. Now, one thing is, of course that some - in some countries operators have been legally obliged to exclude Huawei or the Chinese vendors in general. But also there's a quite difficult chip supply situation for the market leader potentially leading to inevitable loss of competitiveness. And as we've seen Ericsson are also starting to win contracts in Chinese lenders, strongholds such as Malaysia for 5G and the National Network there, that is not due to legal obligations to exclude Huawei. Now, to what extent are you seeing pipeline boosts or contract wins that give you confidence with regards to being able to grow faster than the market also on mobile networks, especially in the light of these developments? Thank you.

Yes, look, as I said, we are estimating 25% to 27% excluding China this year and the market share decline seems now have - to have been stopped. And as I said earlier, we have on the swap cases we have won approximately 50%. There have been occasional cases where some of our competitors have had delivery difficulties, because of various reasons. I think I said earlier that they have not been, I think I commented network infrastructure business, I said that they would not have been kind of big needle movers the same thing in mobile network. So we do not want to speculate on our competitors ability to buy components they have. Each and every one of us have to comment our own business. We do not want to comment our competitors. We focus on our products and we are highly confident that after - especially after the recent launches, we have 3K so much of our product competitiveness that that we are able to take care of our market share.

And now we have the conversion rate that we publish this now slightly above 90% done and we also stated that we are optimistic about the development there and we could see some improvements there going forward.

Thank you, Frank. Rachel, we can now take our last question please.

Thank you. The final question comes from Stefan Slowinski from Exane BNP Paribas. Please go ahead.

Yes, great. Thanks. Good morning. Thanks for taking the question. Marco, just a question for you on cash flow. If I look at the last four quarters, you had €2.3 billion of cashflow positive each quarter, despite presumably some headwinds, in terms of unwinding of factoring and the lower gross margins. Were there any significant one-offs within those 12 months that benefit - benefited free cash flow. And when we look forward, and we look at the improvements that are still to come in terms of gross margins and renewing some of those licensing deals. Shouldn't we see that cash generation improve?

Thank you. Yes, you're totally correct. We have had very good cash collection and if you look specially quarter one that we had extremely good cash collection and came from accounts receivables. And that always when you have a big swings in working capital, these are a little bit like one-offs because you get to new level. And this is exactly what happened. So and that's why the ProLink 12 is very good, because we're comparing very, quite good second half last year and very good first half of this year. Working capital is always a swing factor. And now we've sent going forward that we are aiming to increase our inventories specifically on the semiconductor side as we've seen that supply is quite tight and it's good to have a little bit more buffers here. Otherwise in longer-term. Of course, I would say that all our EBIT is pretty good, good measurement where our cash flow should land, because our depreciations and CapEx are quite close to each other. And of course, when you have big hikes in net sales, like we normally have seen in the past in the fourth quarter, that will also increase your accounts receivables. But normal development is basically based on what is our profit development.

That's great. Thank you, Stefan. And thank you to Marco and Pekka. Thank you everyone for your question today. Ladies and gentlemen, this does conclude today's call. I would like to remind you that during the call, 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 as well as internal operating factors. We have identified these risks in more detail.