In these areas, we see a promising pipeline to increase our licensing net sales run rate. So to conclude, while the market weakness remains, we do see improving order trends giving us confidence that we will return to growth in the second-half of the year, particularly in network infrastructure. We have now concluded the smartphone renewal cycle which allows Nokia Technologies to enter a period of stability, and can therefore focus its efforts on the expansion areas we discussed. The deals signed also contributed to the strong cash generation we saw in Q1. In the meantime, we will continue to execute on our cost savings plans to optimize margins during this weaker environment, while maintaining our commitment to R&D investment. These cost actions, along with the expected improvements in net sales into the second-half of the year give us confidence that we are solidly on track to deliver our outlook for 2024.
So, with that, let me pass you back to David, who will introduce the Q&A section of the call.
David Mulholland: Thank you, Pekka and Marcus, for the presentations. For the Q&A session, as a courtesy to others in the queue, please limit yourself to one question and a brief follow-up. George, could you please give the instructions.
Operator: We will now begin the question-and-answer session. [Operator Instructions] I will now hand the call back to Mr. David Mulholland.
David Mulholland: Thanks, George. We’ll take our first question today from Artem Beletski from SEB. Artem, please go ahead.
Artem Beletski: Yes, hi, and thank you for taking my question. I actually would like to pick some further thoughts from you regarding full-year guidance. So, looking at Q1 development, I think it’s fair to say that the — when it comes to network segments, so there has been a bit steeper declines than what you have suggested initially, but at the same time you are quite positive [for control the] (ph) situation. Could you maybe comment on balance, are you more confident when it comes to full-year guidance and outlook versus previously, for example, in accordance with Q4 result? Thank you.
Pekka Lundmark: Thank you, Artem. Well, first of all, as I already said, we saw some positive order trends already in Q4, especially Network Infrastructure. And we were pleased to see that those trends continued in Q1. And then, in addition to NI, we also commented that order trends in CNS were positive in Q1. And this is not only orders that we have them, but this also led it to the pipeline of new opportunities that we are seeing. So, obviously, it’s hard to give a simple answer on the confidence level, but nothing has really changed. I mean, we remain confident on the full-year forecast. We are obviously three months into the year, and the trends are largely playing out from order intake perspective as we would have hoped. There is always some variability between quarters. And in NI, you saw that our comments, we’re now a bit more positive on Fixed Networks, and a bit more cautious on Optical Networks. But as a whole, nothing has changed from Q4.
David Mulholland: Did you have a follow-up, Artem?
Artem Beletski: Yes, indeed. And the quick follow-up is, indeed, related to Fixed Networks. And as you mentioned, the outlook for this year has improved. Could you maybe elaborate a bit where from it is coming? Is it the BEAD program, more broad-based, the inventory situation as you see it right now, and so on?
Pekka Lundmark: It’s actually a combination of those. I mean, the outlook in North America is looking more positive. Now, we have some exciting fixed wireless access developments in Asia-Pacific. It’s fairly broad-based. And when it comes to BEAD, of course, I mean that is a long-term development. So, you will see some benefit from that in the second-half of the year, but then even more into ’25 and ’26.
David Mulholland: Thanks, Artem. We’ll take our next question from Daniel Djurberg from Handelsbanken. Daniel, please go ahead.
Daniel Djurberg: Thank you, David, and good morning, Marco and Pekka. I will have a question little bit on the organization’s changes you did, starting from Q4, but that took place officially from start of the year. A little bit of reshuffling, I guess, and also in C-level managers, et cetera. How has this impacted the operations in Q1, and should we expect this to, if it has, is it now settled and so the focus can be on customer going forward? Thanks.
Pekka Lundmark: Yes, thank you, Daniel. Good morning. The reshuffling of the organization has been completed. We did it very quickly. Quickly, it was put into force in the beginning of the year. We basically used Q4 for planning. The old organization remained in place over Q4. And then, overnight, on January 1, the new organization was put in place. Obviously, there is — when you do this type of a reshuffle, of course there is a period of instability. But we are already behind that. And now, we are seeing the new organization has started to accumulate speed and get a more — gain more and more traction. What I do want to emphasize is that when we talk about the business groups being more autonomous and also running sales, a very important principle also in the new model is that for all key customers there is always an account executive that is responsible for our overall strategy and relationship with the customer being one part of the role, and then, the second part of the role being the coordination of all multi-business group topics for that customer.
So, this is important to note, that we are not approaching these customers in silos. The purpose of this whole thing, as I communicated also earlier, is to really bring the customers closer to the decision-makers of our businesses, and the people that make decisions on the solutions that we bring to the market, and people that sit on the crucial R&D resources, we want to shorten the distance between the customer and the business decision-markers, and really place highly empowered teams in front of the customer.
David Mulholland: Do you have follow-up, Daniel?
