Ericsson Lm Telephone Co 6-K, filed Jul 14, 2022
Ericsson Lm Telephone Co (ERIC)
About this 6-K
Ericsson Lm Telephone Co filed this 6-K on July 14, 2022.
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
July 14, 2022
Commission File Number 000-12033
LM ERICSSON TELEPHONE COMPANY
(Translation of registrant’s name into English)
Torshamnsgatan 21, Kista
SE-164 83, Stockholm, Sweden
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Announcement of LM Ericsson Telephone Company, July 14, 2022 regarding “Second quarter report 2022”.
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TELEFONAKTIEBOLAGET LM ERICSSON (publ) | ||
| By: | /s/ STELLA MEDLICOTT | |
| Stella Medlicott | ||
| Senior Vice President, | ||
| Chief Marketing and Communications Officer | ||
| By: | /s/ CARL MELLANDER | |
| Carl Mellander | ||
| Senior Vice President, Chief Financial Officer | ||
Date: July 14, 2022
Table of Contents
Second quarter report 2022
Stockholm, July 14, 2022
Second quarter highlights
| • | Group organic sales grew by 5% YoY driven primarily by Networks in North America and Europe. Reported sales were SEK 62.5 (54.9) b. |
| • | Reported gross income increased to SEK 26.3 (23.9) b. driven by higher sales. Gross margin was 42.1% (43.4%) impacted by lower IPR revenues of SEK 0.9 b YoY and supply chain cost, partly offset by timing of software sales in a large contract and underlying improvements. |
| • | Reported EBIT amounted to SEK 7.3 (5.8) b. as a result of higher sales and higher gross income. EBIT margin was 11.7% (10.6%). |
| • | Reported EBITA amounted to SEK 7.5 (6.1) b. with an EBITA margin of 12.0% (11.1%). EBITA margin rolling four quarters was 14%. |
| • | Networks reported EBIT margin was 19.2% (21.7%) impacted by lower IPR revenues, increased component and logistics costs, and proactive investments in supply chain resilience, partly offset by timing of software sales in a large contract. |
| • | Reported net income was SEK 4.7 (3.9) b. |
| • | Free cash flow before M&A was SEK 4.4 (4.1) b. Net cash on June 30, 2022, was SEK 70.3 b. compared with SEK 43.7 b. on June 30, 2021. |
| • | Planning for a Capital Markets Day December 15, 2022. |
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
Q1 2022 |
QoQ change |
Jan-Jun 2022 |
Jan-Jun 2021 |
YoY change |
||||||||||||||||||||||||
| Net sales |
62.5 | 54.9 | 14 | % | 55.1 | 13 | % | 117.5 | 104.7 | 12 | % | |||||||||||||||||||||
| Sales growth adj. for comparable units and currency ¹ |
— | — | 5 | % | — | — | — | — | 4 | % | ||||||||||||||||||||||
| Gross margin ¹ |
42.1 | % | 43.4 | % | — | 42.3 | % | — | 42.2 | % | 43.1 | % | — | |||||||||||||||||||
| EBIT |
7.3 | 5.8 | 26 | % | 4.7 | 54 | % | 12.1 | 11.1 | 9 | % | |||||||||||||||||||||
| EBIT margin ¹ |
11.7 | % | 10.6 | % | — | 8.6 | % | — | 10.3 | % | 10.6 | % | — | |||||||||||||||||||
| Net income |
4.7 | 3.9 | 19 | % | 2.9 | 60 | % | 7.6 | 7.1 | 7 | % | |||||||||||||||||||||
| EPS diluted, SEK |
1.35 | 1.10 | 23 | % | 0.88 | 53 | % | 2.23 | 2.06 | 8 | % | |||||||||||||||||||||
| Measures excl. restructuring charges ¹ |
||||||||||||||||||||||||||||||||
| Gross margin excluding restructuring charges |
42.2 | % | 43.4 | % | — | 42.3 | % | — | 42.2 | % | 43.2 | % | — | |||||||||||||||||||
| EBIT excluding restructuring charges |
7.4 | 5.8 | 26 | % | 4.8 | 54 | % | 12.1 | 11.2 | 9 | % | |||||||||||||||||||||
| EBIT margin excluding restructuring charges |
11.8 | % | 10.6 | % | — | 8.7 | % | — | 10.3 | % | 10.7 | % | — | |||||||||||||||||||
| Free cash flow before M & A |
4.4 | 4.1 | 9 | % | -1.7 | — | 2.8 | 5.6 | -51 | % | ||||||||||||||||||||||
| Net cash, end of period |
70.3 | 43.7 | 61 | % | 65.2 | 8 | % | 70.3 | 43.7 | 61 | % | |||||||||||||||||||||
| 1 | Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
| 1 Ericsson | Second quarter report 2022 | ||
Table of Contents
CEO comments
Strong business momentum continued during the second quarter. Rollout of 5G networks and market share gains resulted in a 5% organic sales1 growth in the quarter. We have adjusted our group structure to strengthen execution of our strategy to be a leading mobile infrastructure provider and to establish a focused enterprise business. Consumers, enterprises, and society will be digitalized through 5G in a way we have not seen before. With our strategy, we are in a position to capture these opportunities to enable further growth.
Technology leadership is a foundation for our growth strategy. Since 2017, our increased R&D investments have created significant value. The geopolitical situation has also required proactive investments to de-risk our supply chain and ensure that we can deliver on our strategy to gain footprint. The global supply chain situation remains challenging and inflationary pressures are strong. Combined, this results in cost increases which we work hard to mitigate as far as possible. As contracts expire, we aim to adjust pricing. However, we believe the best way to compensate for cost increases is the continued investment in technology to increase the cadence of bringing new innovative solutions to the market.
Fulfilling customer commitments under current challenging conditions, comes at a cost which dilutes gross margin. The increased costs have been largely absorbed through our investments in innovation and continuous improvements. Increased sales resulted in a gross income improvement in absolute terms of SEK 2.4 b. compared with Q2 last year, despite lower IPR revenues of SEK 0.9 b. YoY.
While 5G is the fastest scaling mobile technology, global penetration is still in an early phase. We foresee that the global 5G build-out will be larger and continue for longer than previous mobile generations. The build-out will include evolving consumer use cases, such as Fixed Wireless Access, mobile gaming and XR applications, in addition to new areas, such as enterprise and first responders.
Networks sales1 grew organically by 6% in Q2 underpinned by market share gains. Gross margin was 45.1% (47.9%), impacted by lower IPR revenues, increased component and logistics costs, and proactive investments in supply chain resilience, which enabled continued delivery performance in the quarter. We continue to invest in enhancing and expanding our offerings, and we increased R&D in the quarter primarily for Cloud RAN and acceleration of the next-generation Ericsson Silicon (ASICs).
Digital Services sales1 grew organically by 2% YoY with strong growth in cloud native 5G Core, and an EBIT of SEK -1.3 (-1.6) b. The accelerated 5G Core projects with initial deployment costs partly offset the margin improvement from increased software sales.
Managed Services sales1 were flat YoY with an EBIT margin of 11.2% (8.1%). With a 4Q rolling EBIT margin2 of 9.5%, we achieved our 2022 target two quarters ahead of plan.
The new group structure, to be reported from Q3, positions us well to execute on our strategy. Segment Cloud Software and Services is formed by merging Digital Services and Managed Services to create stronger customer propositions as our customers are moving towards
5G using cloud technologies and intelligent automation. The Digital Services business will leverage our technology leadership to accelerate customers’ transformation to cloud native networks. We are committed to turning around the business in support of the Group reaching the long-term targets.
Segment Enterprise includes Enterprise Wireless Solutions, combining Cradlepoint with Dedicated Networks to capture the growing needs for enterprise solutions. The Enterprise segment will also include the Global Network Platform, which we believe will create a paradigm shift in the industry as the full capabilities of the network will be exposed to the global developer communities and enterprises. This will inspire innovation with new opportunities for the operators to monetize network investments. The intended acquisition of Vonage is an important building block, and we are working to secure approval and close the transaction before end of July. The third element of the Enterprise segment is Technologies & New Businesses, previously within segment Emerging Business and Other.
IPR licensing revenues were affected by several expiring patent license agreements pending renewal and by 5G license negotiations in the quarter. We are confident in our strong 5G position and leading patent portfolio, positioning us well to conclude pending and future license renewals. With current contracts, revenues from IPR are estimated to be SEK 1.0–1.5 b. in Q3.
To secure deliveries we have pro-actively increased our buffer inventories. Additionally, unpredictable deliveries of components and site material led to increased inventory levels across our business. We were, however, able to partly offset the inventory increases with other working capital improvements, thereby delivering an improved free cash flow before M&A amounting to SEK 4.4 (4.1) b. Based on current visibility, we expect a gradual reduction in inventory towards the end of the year.
We continue to strengthen our governance, risk management, and compliance across the group and are fully committed to operating with integrity. We continue to engage with the Department of Justice and the Securities and Exchange Commission in relation to the 2019 Iraq investigation report and the DPA breach notices. The outcome of these matters cannot be assessed at this point in time. We are fully committed to cooperating with the US authorities.
Our strategy targets a higher growth trajectory as we aim to grow our core mobile infrastructure business and capitalize on the fast-growing enterprise market. With 5G, the world is experiencing the largest innovation platform to date, where anything that can go wireless, will go wireless. Ericsson is at the epicenter of this powerful trend, and we will continue to invest in technology leadership to ensure we capitalize on this position. EBITA margin2 rolling four quarters was 14% and we remain determined to reach our long-term target of an EBITA margin2 of 15–18% no later than in 2–3 years.
Börje Ekholm
President and CEO
| 1 | Sales adjusted for comparable units and currency |
| 2 | Excluding restructuring charges |
| 2 Ericsson | Second quarter report 2022 | CEO comments | |
Table of Contents
Financial highlights
Net sales development
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
YoY adj.¹ |
Q1 2022 |
Jan-Jun 2022 |
Jan-Jun 2021 |
YoY change |
YoY adj.¹ |
|||||||||||||||||||||||||||
| Networks |
46.0 | 39.9 | 15 | % | 6 | % | 40.7 | 86.7 | 76.1 | 14 | % | 5 | % | |||||||||||||||||||||||
| Digital Services |
8.7 | 7.9 | 10 | % | 2 | % | 7.2 | 15.9 | 14.8 | 7 | % | 0 | % | |||||||||||||||||||||||
| Managed Services |
5.4 | 5.1 | 6 | % | 0 | % | 4.9 | 10.4 | 10.0 | 4 | % | -2 | % | |||||||||||||||||||||||
| Emerging Business and Other |
2.4 | 2.1 | 17 | % | 7 | % | 2.2 | 4.6 | 3.8 | 21 | % | 11 | % | |||||||||||||||||||||||
| Total |
62.5 | 54.9 | 14 | % | 5 | % | 55.1 | 117.5 | 104.7 | 12 | % | 4 | % | |||||||||||||||||||||||
| 1 | Sales growth adjusted for comparable units and currency. Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
Group reported sales were SEK 62.5 (54.9) b. Sales adjusted for comparable units and currency increased by 5% YoY, with growth in four of the five market areas.
IPR licensing revenues decreased to SEK 1.4 (2.3) b. Q2 2021 was positively impacted by two quarters of revenue from a renewed patent license agreement.
Networks sales adjusted for comparable units and currency increased by 6% YoY. Sales growth was driven primarily by North America and Europe. Networks accounted for 73% (73%) of total sales.
Digital Services sales adjusted for comparable units and currency increased by 2% YoY, driven primarily by cloud native 5G Core. Digital Services share of total sales was 14% (14%).
Managed Services sales adjusted for comparable units and currency were stable. Managed Services share of total sales was 9% (9%).
Emerging Business and Other sales adjusted for comparable units and currency increased by 7% YoY driven by Cradlepoint and iconectiv. Emerging Business and Other share of total sales was 4% (4%).
Income and margin development
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
Q1 2022 |
QoQ change |
Jan-Jun 2022 |
Jan-Jun 2021 |
YoY change |
||||||||||||||||||||||||
| Net sales |
62.5 | 54.9 | 14 | % | 55.1 | 13 | % | 117.5 | 104.7 | 12 | % | |||||||||||||||||||||
| Gross income |
26.3 | 23.9 | 10 | % | 23.3 | 13 | % | 49.6 | 45.2 | 10 | % | |||||||||||||||||||||
| Gross margin |
42.1 | % | 43.4 | % | — | 42.3 | % | — | 42.2 | % | 43.1 | % | — | |||||||||||||||||||
| Research and development (R&D) expenses |
-11.5 | -10.5 | — | -10.7 | — | -22.2 | -20.1 | — | ||||||||||||||||||||||||
| Selling and administrative expenses |
-7.9 | -7.0 | — | -6.6 | — | -14.5 | -13.2 | — | ||||||||||||||||||||||||
| Impairment losses on trade receivables |
0.0 | 0.1 | -97 | % | -0.2 | — | -0.2 | -0.1 | — | |||||||||||||||||||||||
| Other operating income and expenses |
0.4 | -0.6 | — | -1.1 | — | -0.7 | -0.6 | — | ||||||||||||||||||||||||
| Share in earnings of JV and associated companies |
0.0 | -0.1 | — | 0.0 | — | 0.0 | -0.2 | — | ||||||||||||||||||||||||
| EBIT |
7.3 | 5.8 | 26 | % | 4.7 | 54 | % | 12.1 | 11.1 | 9 | % | |||||||||||||||||||||
| of which Networks |
8.8 | 8.6 | 2 | % | 6.7 | 31 | % | 15.6 | 15.9 | -2 | % | |||||||||||||||||||||
| of which Digital Services |
-1.3 | -1.6 | — | -1.4 | — | -2.7 | -3.1 | — | ||||||||||||||||||||||||
| of which Managed Services |
0.6 | 0.4 | 45 | % | 0.6 | 2 | % | 1.2 | 0.7 | 64 | % | |||||||||||||||||||||
| of which Emerging Business & Other |
-0.8 | -1.7 | — | -1.2 | — | -2.0 | -2.4 | — | ||||||||||||||||||||||||
| EBIT margin |
11.7 | % | 10.6 | % | — | 8.6 | % | — | 10.3 | % | 10.6 | % | — | |||||||||||||||||||
| Financial income and expenses, net |
-0.8 | -0.5 | — | -0.6 | — | -1.4 | -1.0 | — | ||||||||||||||||||||||||
| Income tax |
-1.9 | -1.5 | — | -1.2 | — | -3.1 | -3.0 | — | ||||||||||||||||||||||||
| Net income |
4.7 | 3.9 | 19 | % | 2.9 | 60 | % | 7.6 | 7.1 | 7 | % | |||||||||||||||||||||
| Restructuring charges |
0.0 | 0.0 | — | 0.0 | — | -0.1 | -0.1 | — | ||||||||||||||||||||||||
| Measures excl. restr. charges and other items affecting comparability ¹ |
||||||||||||||||||||||||||||||||
| Gross margin excluding restructuring charges |
42.2 | % | 43.4 | % | — | 42.3 | % | — | 42.2 | % | 43.2 | % | — | |||||||||||||||||||
| EBIT margin excluding restructuring charges |
11.8 | % | 10.6 | % | — | 8.7 | % | — | 10.3 | % | 10.7 | % | — | |||||||||||||||||||
| EBITA excluding restructuring charges |
7.5 | 6.1 | 23 | % | 5.0 | 51 | % | 12.5 | 11.7 | 6 | % | |||||||||||||||||||||
| EBITA margin excluding restructuring charges |
12.0 | % | 11.1 | % | — | 9.1 | % | — | 10.6 | % | 11.2 | % | — | |||||||||||||||||||
| 1 | Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
| 3 Ericsson | Second quarter report 2022 | Financial highlights | |
Table of Contents
Gross margin
Reported gross margin was 42.1% (43.4%). The margin was impacted by lower IPR revenues of SEK 0.9 b. YoY. Furthermore, increased component and logistics costs, and proactive investments in supply chain resilience in Networks impacted the margin negatively, but this impact was partly offset by timing of software sales in a large contract and underlying improvements. Gross margin increased in Digital Services and Managed Services YoY, while it declined in Networks and in Emerging Business and Other.
Sequentially, reported gross margin declined slightly to 42.1% from 42.3%, however with an increase in Networks.
Research and development (R&D) expenses
R&D expenses amounted to SEK -11.5 (-10.5) b. including a negative currency impact of SEK -0.4 b. R&D expenses increased primarily in Networks due to further investments in Cloud RAN and in Ericsson Silicon (ASICs).
Selling and administrative (SG&A) expenses
SG&A expenses were SEK -7.9 (-7.0) b. including a negative currency impact of SEK -0.3 b. The increase is mainly in legal and compliance related expenses.
Other operating income and expenses
Other operating income and expenses was SEK 0.4 (-0.6) b. Q2 2021 was negatively impacted by SEK -0.8 b. from a commercial settlement. There was a positive impact from Ericsson Ventures of SEK 0.1 b. in the quarter.
Restructuring charges
Restructuring charges amounted to SEK 0.0 (0.0) b.
EBIT
Reported EBIT increased to SEK 7.3 (5.8) b. driven by higher sales and higher gross income. EBIT improved across all segments. EBIT margin was 11.7% (10.6%).
Sequentially, reported EBIT increased to SEK 7.3 b. from SEK 4.7 b. as a result of seasonally higher sales and higher gross income.
Reported EBIT margin rolling four quarters was 13.4%.
EBITA
Reported EBITA increased to SEK 7.5 (6.1) b. corresponding to an EBITA margin of 12.0% (11.1%).
Reported EBITA margin rolling four quarters was 13.9%.
Financial income and expenses, net
Reported financial net was SEK -0.8 (-0.5) b. The strengthened USD to SEK resulted in a negative currency hedge effect of SEK -0.5 (0.1) b.
Sequentially, financial net decreased by SEK -0.1 b. to SEK -0.8 b. The currency hedge effect was SEK -0.5 b. in the quarter, versus SEK -0.2 b. in Q1 2022. The USD strengthened against the SEK between March 31, 2022 (SEK/USD rate 9.32) and June 30, 2022 (SEK/USD rate 10.31).
Income tax
Taxes were SEK -1.9 (-1.5) b. The effective tax rate in Q2 was 29%, unchanged from Q1 2022. Tax rate in Q2 2021 was 27%.
Net income
Net income improved to SEK 4.7 (3.9) b. and EPS diluted increased to SEK 1.35 (1.10).
Employees
The number of employees on June 30, 2022, was 101,459 compared with 101,067 on March 31, 2022. The increase is related mainly to R&D.
Financial highlights, year to date (Jan-June) development
Reported sales increased by 12%. Sales adjusted for comparable units and currency increased by 4% driven primarily by sales in market areas North America and Europe and Latin America. Networks sales adjusted for comparable units and currency increased by 5%, Emerging Business and Other grew by 11%, Digital Services sales were stable while Managed Services declined by -2%.
Reported gross income increased to SEK 49.6 (45.2) b. as a result of higher sales. Gross margin decreased to 42.2% (43.1%) impacted by investments in supply chain resilience in Networks as well as increased component and supply chain costs.
Reported EBIT increased YoY to SEK 12.1 (11.1) b. The higher gross income was partly offset by higher operating expenses. R&D expenses increased by SEK -2.1 b. including a currency impact of SEK -0.8 b. R&D expenses increased primarily in Networks as a result of further investments in Cloud RAN and in Ericsson Silicon (ASICs). SG&A expenses increased by SEK -1.3 b. including a currency impact of SEK -0.6 b. The increase is mainly related to legal and compliance expenses.
Reported EBITA increased to SEK 12.4 (11.7) b. YoY, corresponding to an EBITA margin of 10.6% (11.1%).
Net income year to date improved to SEK 7.6 (7.1) b. where the improved EBIT more than offset a more negative financial net and slightly higher taxes.
| 4 Ericsson | Second quarter report 2022 | Financial highlights | |
Table of Contents
Market area sales
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
YoY adj.¹ |
Q1 2022 |
QoQ change |
Jan-Jun 2022 |
YoY change |
||||||||||||||||||||||||
| South East Asia, Oceania and India |
8.0 | 7.1 | 12 | % | 6 | % | 5.8 | 36 | % | 13.8 | 0 | % | ||||||||||||||||||||
| North East Asia |
7.3 | 7.1 | 3 | % | -1 | % | 5.4 | 35 | % | 12.7 | -6 | % | ||||||||||||||||||||
| North America |
22.8 | 18.0 | 27 | % | 12 | % | 20.7 | 10 | % | 43.6 | 24 | % | ||||||||||||||||||||
| Europe and Latin America |
15.3 | 14.0 | 9 | % | 4 | % | 15.3 | 0 | % | 30.6 | 15 | % | ||||||||||||||||||||
| Middle East and Africa |
5.2 | 4.5 | 17 | % | 8 | % | 4.3 | 21 | % | 9.5 | 8 | % | ||||||||||||||||||||
| Other² |
3.8 | 4.3 | -12 | % | — | 3.5 | 9 | % | 7.3 | 7 | % | |||||||||||||||||||||
| Total |
62.5 | 54.9 | 14 | % | 5 | % | 55.1 | 13 | % | 117.5 | 12 | % | ||||||||||||||||||||
| 1 | Sales growth adjusted for comparable units and currency. |
| 2 | Market area “Other” includes primarily IPR licensing revenues and the major part of segment Emerging Business and Other. |
Sales breakdown by market area by segment is available at the end of this report.
| • | Continued momentum in North America. |
| • | Continued Networks sales growth in Europe despite suspended business in Russia. |
| • | Organic growth in four of the five market areas. |
South East Asia, Oceania and India
Currency adjusted sales increased by 6% YoY. Networks sales grew, primarily driven by project milestones in several markets. Digital Services grew as a result of market share gains as well as project milestones. Managed Services sales increased mainly due to timing of variable sales and a new contract signed in the second half of 2021. Reported sales increased by 12% YoY.
North East Asia
Currency adjusted sales declined by -1% YoY. Sales in Networks declined, while sales in Digital Services increased as a result of project timing. Reported sales increased by 3% YoY.
North America
Currency adjusted sales increased by 12% YoY driven by strong demand for 5G solutions in Networks. Sales in Digital Services were stable. Reported sales increased by 27% YoY.
Europe and Latin America
Currency adjusted sales increased by 4% YoY with 4% growth in Europe and stable sales in Latin America. The invasion of Ukraine by Russia and the subsequent suspension of the affected business impacted sales by SEK -1.2 b. YoY. Sales in Networks showed double-digit growth as a result of market share gains. Sales in Digital Services declined due to suspension of affected business in Russia. Managed Services sales declined as a result of rescoping and renegotiations of contracts. Reported sales increased by 9% YoY.
Middle East and Africa
Currency adjusted sales increased by 8% YoY. Sales increased in Networks driven predominantly by 4G rollouts in Africa. Digital Services sales grew due to software upgrades in Africa. Reported sales increased by 17% YoY.
Other
IPR licensing revenues decreased to SEK 1.4 (2.3) b. impacted by expired patent license agreements pending renewal. Q2 2021 was positively impacted by two quarters of revenue from a renewed patent license agreement.
Sequentially, IPR licensing revenues were stable at SEK 1.4 b.
| 5 Ericsson | Second quarter report 2022 | Market area sales | |
Table of Contents
Segment results
Segment Networks
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
Q1 2022 |
||||||||||||
| Net sales |
46.0 | 39.9 | 15 | % | 40.7 | |||||||||||
| Of which IPR licensing revenues |
1.2 | 1.9 | -38 | % | 1.1 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | 6 | % | — | |||||||||||
| Gross income |
20.7 | 19.1 | 8 | % | 18.2 | |||||||||||
| Gross margin |
45.1 | % | 47.9 | % | — | 44.7 | % | |||||||||
| EBIT |
8.8 | 8.6 | 2 | % | 6.7 | |||||||||||
| EBIT margin |
19.2 | % | 21.7 | % | — | 16.6 | % | |||||||||
| Restructuring charges |
0.0 | 0.0 | — | 0.0 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
45.2 | % | 47.9 | % | — | 44.8 | % | |||||||||
| EBIT excl. restructuring charges |
8.9 | 8.7 | 2 | % | 6.8 | |||||||||||
| EBIT margin excl. restructuring charges |
19.3 | % | 21.7 | % | — | 16.6 | % | |||||||||
Breakdown of sales into products, services and IPR licensing is available in note 3.
| • | Sales adjusted for comparable units and currency grew by 6%. |
| • | Component prices and supply chain costs affected gross margin. |
| • | Continued increased investments in Cloud RAN and in Ericsson Silicon (ASICs) and supply chain. |
Net sales
Sales adjusted for comparable units and currency increased by 6% YoY with continued good momentum in 5G. Sales growth was driven primarily by North America and Europe. Reported sales increased by 15% YoY.
Sequentially, reported sales increased by 13%, with growth in four of the five market areas.
Gross margin
Reported gross margin decreased to 45.1% (47.9%). Gross margin was impacted by lower IPR licensing revenues, increased component and logistics costs, and proactive investments in supply chain resilience to secure deliveries to customers. These impacts were partly offset by the shift from Q1 to Q2 of software sales in a large contract as well as underlying improvements from new product introductions.
Reported gross margin increased QoQ due to timing of software sales in a large contract. The increase was partly offset by continued high component and supply chain costs.
EBIT
Reported EBIT increased to SEK 8.8 (8.6) b. with an EBIT margin of 19.2% (21.7%). EBIT margin was impacted by increased investments in R&D in Cloud RAN and in Ericsson Silicon (ASICs).
Sequentially, reported EBIT increased to SEK 8.8 b. from SEK 6.7 b. driven primarily by higher sales and gross income.
Net sales rolling four quarters were SEK 178.4 b. and reported EBIT margin rolling four quarters was 20.7%.
Segment Digital Services
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
Q1 2022 |
||||||||||||
| Net sales |
8.7 | 7.9 | 10 | % | 7.2 | |||||||||||
| Of which IPR licensing revenues |
0.3 | 0.4 | -38 | % | 0.3 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | 2 | % | — | |||||||||||
| Gross income |
3.5 | 3.0 | 16 | % | 3.1 | |||||||||||
| Gross margin |
39.9 | % | 37.9 | % | — | 42.9 | % | |||||||||
| EBIT (loss) |
-1.3 | -1.6 | — | -1.4 | ||||||||||||
| EBIT margin |
-15.3 | % | -19.9 | % | — | -19.7 | % | |||||||||
| Restructuring charges |
0.0 | 0.0 | — | 0.0 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
39.9 | % | 37.9 | % | — | 42.9 | % | |||||||||
| EBIT (loss) excl. restructuring charges |
-1.3 | -1.6 | — | -1.4 | ||||||||||||
| EBIT margin excl. restructuring charges |
-15.3 | % | -19.8 | % | — | -19.2 | % | |||||||||
Breakdown of sales into products, services and IPR licensing is available in note 3.
| • | Sales adjusted for comparable units and currency grew by 2%. |
| • | Double-digit growth in cloud native 5G Core. |
| • | Continued investments in cloud native 5G portfolio and service orchestration. |
Net sales
Sales adjusted for comparable units and currency increased by 2% YoY. Sales grew in constant currency in the Middle East and Africa, North East Asia and in South East Asia, Oceania and India. Reported sales increased by 10% YoY driven by cloud native 5G Core.
Sequentially, reported sales increased by 20%, with double-digit growth in all market areas.
Gross margin
Reported gross margin was 39.9% (37.9%). Gross margin in the quarter was impacted by initial deployment costs for the cloud native 5G Core portfolio, as well as by a lower share of IPR licensing revenues compared with Q2 2021. In Q2 2021 there was a negative impact of -3.6 percentage points on the gross margin due to a write-down of pre-commercial product investments for the Chinese market.
Reported gross margin decreased QoQ, due to initial deployment costs as cloud native 5G Core deployments are accelerating.
EBIT (loss)
Reported EBIT (loss) was SEK -1.3 (-1.6) b. with an EBIT margin of -15.3% (-19.9%). EBIT improved due to higher sales and higher gross margin. EBIT was impacted by continued investments in the cloud native 5G portfolio and in service orchestration. EBIT in Q2 2021 was impacted by a write-down of pre-commercial product investments for the Chinese market.
Sequentially, reported EBIT was SEK -1.3 b. compared to SEK -1.4 b. in Q1 driven by higher sales in the quarter.
Net sales rolling four quarters were SEK 37.2 b. and reported EBIT margin rolling four quarters was -8.8%.
| 6 Ericsson | Second quarter report 2022 | Segment results | |
Table of Contents
Segment Managed Services
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
Q1 2022 |
||||||||||||
| Net sales |
5.4 | 5.1 | 6 | % | 4.9 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | 0 | % | — | |||||||||||
| Gross income |
1.2 | 1.0 | 28 | % | 1.1 | |||||||||||
| Gross margin |
23.0 | % | 19.0 | % | — | 23.2 | % | |||||||||
| EBIT |
0.6 | 0.4 | 45 | % | 0.6 | |||||||||||
| EBIT margin |
11.2 | % | 8.1 | % | — | 12.0 | % | |||||||||
| Restructuring charges |
0.0 | 0.0 | — | 0.0 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
23.0 | % | 19.0 | % | — | 23.0 | % | |||||||||
| EBIT excl. restructuring charges |
0.6 | 0.4 | 45 | % | 0.6 | |||||||||||
| EBIT margin excl. restructuring charges |
11.1 | % | 8.1 | % | — | 11.8 | % | |||||||||
| • | Network Optimization sales growth in all market areas. |
| • | EBIT margin, excl. restructuring charges, rolling 4Q was 9.5%, reaching 2022 target early. |
| • | Continued investments in automation, analytics and AI offerings – supporting 5G and efficiency in service delivery. |
Net sales
Sales adjusted for comparable units and currency were stable YoY. Sales in Network Optimization showed growth in all market areas, and variable sales grew. Reported sales increased by 6% YoY.
Gross margin
Reported gross margin increased to 23.0% (19.0%) driven by increased variable sales and increased Network Optimization sales.
Reported gross margin decreased slightly to 23.0% from 23.2% QoQ.
EBIT
Reported EBIT increased to SEK 0.6 (0.4) b. with an EBIT margin of 11.2% (8.1%). The improvement was driven by increased gross margin.
Reported EBIT was flat at SEK 0.6 b. QoQ.
Net sales rolling four quarters were SEK 20.8 b. EBIT margin (excluding restructuring charges) rolling four quarters was 9.5%, reaching the 2022 EBIT target of 9–11% two quarters early.
Segment Emerging Business and Other
| SEK b. |
Q2 2022 |
Q2 2021 |
YoY change |
Q1 2022 |
||||||||||||
| Net sales |
2.4 | 2.1 | 17 | % | 2.2 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | 7 | % | — | |||||||||||
| Gross income |
0.9 | 0.8 | 10 | % | 0.8 | |||||||||||
| Gross margin |
35.8 | % | 37.9 | % | — | 38.1 | % | |||||||||
| EBIT (loss) |
-0.8 | -1.7 | — | -1.2 | ||||||||||||
| EBIT margin |
-33.1 | % | -81.1 | % | — | -53.8 | % | |||||||||
| Restructuring charges |
0.0 | 0.0 | — | 0.0 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
35.8 | % | 38.1 | % | — | 38.1 | % | |||||||||
| EBIT (loss) excl. restructuring charges |
-0.8 | -1.7 | — | -1.2 | ||||||||||||
| EBIT margin excl. restructuring charges |
-32.9 | % | -81.5 | % | — | -53.5 | % | |||||||||
| • | Cradlepoint and iconectiv drove sales growth. |
| • | Positive EBIT impact of SEK 0.1 b. from Ericsson Ventures investments. |
Net sales
Sales adjusted for comparable units and currency increased by 7% YoY driven by Cradlepoint and iconectiv. Reported sales increased by 17% YoY.
Gross margin
Reported gross margin decreased to 35.8% (37.9%). The decrease relates mainly to Cradlepoint, where Q2 2021 was positively impacted by SEK 0.1 b. from the changes between the preliminary and final PPA (Purchase Price Allocation), impacting net sales, gross margin and EBIT. Cradlepoint gross margin continues to be well above group average.
Reported gross margin decreased to 35.8% from 38.1% QoQ, with decline across several businesses.
EBIT (loss)
Reported EBIT (loss) was SEK -0.8 (-1.7) b.
Reported EBIT in the quarter was positively impacted by SEK 0.1 b. related to Ericsson Ventures investments. In Q2 2021, reported EBIT was negatively impacted by SEK -0.8 b. from a commercial settlement.
Reported EBIT (loss) decreased to SEK -0.8 b. from SEK -1.2 b. QoQ. In Q1 2022, reported EBIT was negatively impacted by SEK -0.3 b. from revaluation of Ericsson Ventures investments.
Net sales rolling four quarters were SEK 8.7 b. and reported EBIT margin rolling four quarters was -32.9%.
| 7 Ericsson | Second quarter report 2022 | Segment results | |
Table of Contents
Cash flow and financial position
| Free cash flow bridge, SEK b. |
Q2 2022 |
Q2 2021 |
Q1 2022 |
Jan-Jun 2022 |
Jan-Jun 2021 |
|||||||||||||||
| EBIT excl. restructuring charges |
7.4 | 5.8 | 4.8 | 12.1 | 11.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Depreciation, amortization and impairment losses |
2.2 | 2.1 | 2.1 | 4.4 | 4.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Restructuring charges |
0.0 | 0.0 | 0.0 | -0.1 | -0.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Changes in working capital1) |
-1.3 | 0.2 | -5.5 | -6.8 | -3.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest paid/received, taxes paid, and other |
-1.9 | -2.2 | -1.4 | -3.3 | -2.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from operating activities |
6.3 | 5.9 | 0.0 | 6.3 | 9.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Capex net and other investing activities |
-1.3 | -1.3 | -1.1 | -2.4 | -2.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Repayment of lease liabilities |
-0.6 | -0.6 | -0.6 | -1.2 | -1.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Free cash flow before M & A |
4.4 | 4.1 | -1.7 | 2.8 | 5.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| M & A |
0.1 | -0.1 | 0.0 | 0.2 | -0.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Free cash flow after M & A |
4.6 | 4.0 | -1.6 | 3.0 | 5.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from operating activities |
6.3 | 5.9 | 0.0 | 6.3 | 9.1 | |||||||||||||||
| Cash flow from investing activities |
21.9 | -7.1 | 14.4 | 36.4 | -8.1 | |||||||||||||||
| Cash flow from financing activities |
-14.5 | 4.3 | 7.8 | -6.7 | -1.9 | |||||||||||||||
| SEK b. |
Jun 30 2022 |
Jun 30 2021 |
Mar 31 2022 |
|||||||||
| Gross cash |
100.4 | 77.1 | 104.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| -Borrowings, current |
3.7 | 11.7 | 10.4 | |||||||||
| -Borrowings, non-current |
26.4 | 21.7 | 28.6 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net cash |
70.3 | 43.7 | 65.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Equity |
127.8 | 91.7 | 109.9 | |||||||||
| Total assets |
332.5 | 281.0 | 323.9 | |||||||||
| Capital turnover (times) |
1.2 | 1.3 | 1.2 | |||||||||
| Return on capital employed (% ) |
12.8 | % | 13.5 | % | 10.2 | % | ||||||
Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.
| 1 | Defined as Changes in operating net assets |
| • | Free cash flow before M&A was SEK 4.4 (4.1) b. |
| • | Net cash position increased to SEK 70.3 (43.7) b. |
| • | Bond repayment of USD -1.0 b. (SEK -10.0 b.). |
Cash flow from operating activities
Reported cash flow from operating activities was SEK 6.3 (5.9) b. Cash flow was supported by improved EBIT, partly offset by an increase in working capital. Inventory increased but was partly offset by higher customer collections. Q2 2021 was positively impacted by higher IPR payments. Taxes paid were SEK -1.0 b.
Free cash flow
Free cash flow before M&A was SEK 4.4 (4.1) b. Capex net and other investing activities were SEK -1.3 (-1.1) b. mainly related to investments in test equipment in Networks. Repayment of lease liabilities was stable at SEK -0.6 b. YoY. There were limited M&A activities in the quarter and free cash flow after M&A was SEK 4.6 (4.0) b.
Cash flow from investing activities
Reported cash flow from investing activities was SEK 21.9 (-7.1) b. mainly due to the disposal of interest-bearing securities.
Cash flow from financing activities
Reported cash flow from financing activities was SEK -14.5 (4.3) b. driven primarily by the repayment of a USD -1.0 b. (SEK -10.0 b.) bond and the first of two equal dividend payouts of SEK -4.2 b. The second payout of SEK 1.25 per share (SEK -4.2 b.) will be paid out in October.
Financial position
Gross cash declined by SEK -3.8 b. QoQ to SEK 100.4 b. The repayment of a USD -1.0 b. (SEK -10.0 b.) bond and the payout of the dividend to shareholders were partly offset by the positive free cash flow and positive FX effect on cash positions held in foreign currency. Net cash increased by SEK 5.2 b. QoQ, from SEK 65.2 b. to SEK 70.3 b. as a result of the positive free cash flow and FX effect on cash, partly offset by dividend paid to shareholders and increase in reported debt held in foreign currency.
The average maturity of long-term borrowings as of June 30, 2022, was 4.4 years, an increase from 4.0 years 12 months earlier.
Liabilities for post-employment benefits decreased to SEK 25.3 b. from SEK 30.6 b. in the quarter, due to significantly higher discount rates. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liability for post-employment benefits would have been approximately SEK 6.8 b. (SEK 18.5 b. lower than current DBO).
Return on capital employed (ROCE) was 12.8% (13.5%), where the decline was driven by an increase in capital employed, partly offset by improved EBIT.
| 8 Ericsson | Second quarter report 2022 | Cash flow and financial position | |
Table of Contents
Key data points
Market related
| • | The global RAN equipment market is estimated to grow by 5% (5%) in 2022. North America is expected to grow by 12% (8%), Europe by 5% (5%) and Mainland China by 4% (4%). |
Source: Dell’Oro Mobile RAN Quarterly report 1Q 22. Numbers in brackets from Dell’Oro Mobile RAN outlook report February 2022.
Ericsson related
Group long-term financial targets
| • | EBITA margin, excluding restructuring: 15–18%. |
| • | Free Cash flow (before M&A): 9–12% of sales. |
Net sales
Reported average seasonality last 3 years (2019–2021), %
| Q4gQ1 | Q1gQ2 | Q2gQ3 | Q3gQ4 | |||||||||||||
| Ericsson Group |
-26 | % | +11 | % | +3 | % | +21 | % | ||||||||
| Networks |
-22 | % | +12 | % | +3 | % | +19 | % | ||||||||
| Digital Services |
-43 | % | +15 | % | +7 | % | +42 | % | ||||||||
Net sales may show large variations between quarters.
Sales to Russia amounted to SEK 4.1 b. in 2021.
Operating expenses excluding restructuring
Reported average seasonality last 3 years (2019–2021), SEK b.
Positive numbers = decrease in operating expenses.
Negative numbers = increase in operating expenses.
| Q4gQ1 | Q1gQ2 | Q2gQ3 | Q3gQ4 | |||||||||||||
| Ericsson Group |
+3.2 | -1.4 | +1.3 | -3.1 | ||||||||||||
Operating expenses may show large variations between quarters.
M&A
Working to secure approval and close the Vonage transaction before end of July 2022.
Currency exposure
| • | Rule of thumb: A change by 10% of SEK to USD would have an impact of approximately +/-5% on net sales and approximately +/-1 percentage point on EBIT margin. |
| 9 Ericsson | Second quarter report 2022 | Key data points | |
Table of Contents
Parent Company
Income after financial items January–June 2022, was SEK 18.0 (5.7) b.
At the end of the quarter, gross cash (cash, cash equivalents, short-term investments and interest-bearing securities, non-current) amounted to SEK 85.1 (62.9) b.
There was a decrease in intercompany lending of SEK 3.7 b. and in intercompany borrowing of SEK 0.8 b. in the second quarter.
The Parent Company has recognized dividends from subsidiaries of SEK 16.7 (0.6) b. in the quarter.
The holding of treasury stock on June 30, 2022, was 4,009,306 Class B shares.
| 10 Ericsson | Second quarter report 2022 | Parent Company | |
Table of Contents
Other information
Legal proceedings
On October 4, 2021, Ericsson asked the U.S. District Court for the Eastern District of Texas for a declaration that Ericsson has, in its negotiations with Apple, complied with its FRAND commitment and all other applicable laws and policies that would affect the terms of Ericsson’s and Apple’s prospective license. On December 17, 2021, Apple filed a responsive case against Ericsson in the U.S. District Court for the Eastern District of Texas alleging, among other things, that Ericsson breached obligations associated with the licensing of its standard essential patents under FRAND terms.
Ericsson and Apple were not able to renew the now expired patent license agreement between the parties in a timely manner. On January 18, 2022, Ericsson filed three complaints with the US International Trade Commission (ITC) alleging infringement of 12 patents by certain Apple products. In addition, Ericsson filed companion lawsuits in the Western District of Texas alleging infringement of the same 12 patents. On January 19, 2022 Apple responded by filing a complaint against Ericsson in the ITC alleging that certain Ericsson products infringe three Apple patents.
In January of 2022, Ericsson also filed lawsuits in several jurisdictions in Europe (Germany, the Netherlands, and Belgium) and South America (Brazil and Colombia) alleging that certain Apple products infringe Ericsson patents. Apple likewise filed lawsuits in Germany and China alleging that certain Ericsson products infringe Apple patents and utility models. In the following months, Ericsson made further filings in the United Kingdom, the Netherlands, and Brazil alleging Apple products infringe additional Ericsson patents. Apple filed further lawsuits in Germany alleging Ericsson products infringe additional Apple patents.
PRESS RELEASES
April 20, 2022 | Ericsson’s Nomination Committee appointed
On April 20, 2022, Ericsson’s Nomination Committee for the Annual General Meeting 2023 has been appointed in accordance with the Instruction for the Nomination Committee resolved by the Annual General Meeting 2012.
The Nomination Committee consists of:
| • | Johan Forssell, Investor AB; |
| • | Karl Åberg, AB Industrivärden; |
| • | Anders Oscarsson, AMF – Tjänstepension och Fonder; |
| • | Jonas Synnergren, Cevian Capital Partners Limited; and |
| • | Ronnie Leten, the Chair of the Board of Directors. |
Johan Forssell is the Chair of the Nomination Committee.
Shareholders who wish to submit proposals to the Nomination Committee are welcome to contact the Nomination Committee. Proposals must be received in due time before the Annual General Meeting to ensure that the proposals can be considered by the Nomination Committee.
CONTACT THE NOMINATION COMMITTEE:
Telefonaktiebolaget LM Ericsson
The Nomination Committee
c/o The Board of Directors Secretariat
SE-164 83 Stockholm
Sweden
E-mail: nomination.committee@ericsson.com
https://www.ericsson.com/en/press-releases/2022/4/ericssons-nomination-committee-appointed
May 18, 2022 | Ericsson changes Group structure and Executive Team to execute on growth strategy
Ericsson’s strategy is to be a leader in mobile infrastructure and to establish an enterprise business. Today, Ericsson announces changes to the group structure and Executive Team to position itself to execute on its strategy and growth ambitions while continuing to invest in R&D to maintain its technology leadership. The new Executive Team roles and the new organization will take effect June 1, 2022.
Business Area Cloud Software and Services
To lead in the mobile infrastructure business, a Business Area Cloud Software and Services is created by merging Business Area Digital Services and Business Area Managed Services. This will enable Ericsson to capitalize on the convergence of cloud, software and services. Through the new structure, Ericsson will be able to leverage investments in R&D, increase cloud native expertise and build its combined offerings for automation and AI for service delivery. This will allow Ericsson to build on the success in recent years which includes strong development in the cloud native 5G core portfolio where 16 out of the 20 largest operators globally have chosen Ericsson. Managed Services has undergone a significant transformation in recent years with the introduction of the AI-driven Ericsson Operation Engine, enabling proactive and predictive network and IT operations and optimization, and a shift towards a more software-driven offering.
Per Narvinger is appointed Senior Vice President and head of Business Area Cloud Software and Services and will be a member of the Ericsson Executive Team. Narvinger is currently Head of Product Area Networks within Business Area Networks.
Jan Karlsson, currently head of Business Area Digital Services, will leave the Executive Team and instead drive the development of the Global Network Platform, reporting to CEO Börje Ekholm. As previously communicated, Peter Laurin, currently head of Business Area Managed Services will leave Ericsson for opportunities outside Ericsson.
“Through the new Business Area Cloud Software and Services we provide solutions that will help our customers automate the increasingly complex networks for cost advantages and speed to market. By combining the two business areas we can coordinate our investments in orchestration and AI solutions leveraging insight from our network operations. This will allow us to remain a technology leader in a constantly evolving market. I look forward to working with Per as we take the next steps in reaching Ericsson’s growth ambitions. I also want to thank Jan and Peter for their contributions to the Executive Team. They have both been instrumental in executing on our focused strategy and Ericsson’s turnaround”, says Börje Ekholm.
Business Area Enterprise Wireless Solutions
A new Business Area Enterprise Wireless Solutions, comprised of the current Cradlepoint business and Dedicated Networks, is created to take full accountability and focus to develop solutions to meet the growing needs of enterprises and create a dedicated go-to-market organization for enterprise customers including leveraging the established relationship with service providers. The new Business Area will enable Ericsson to build on recent success which includes strong growth for Cradlepoint as 5G coverage increases on the US C-band and the launch of Ericsson Private 5G (EP5G) in several leading markets.
| 11 Ericsson | Second quarter report 2022 | Other information | |
Table of Contents
George Mulhern is appointed Senior Vice President and head of Business Area Enterprise Wireless Solutions and will be a member of the Ericsson Executive Team. Mulhern is currently CEO of Cradlepoint.
Åsa Tamsons will continue in her role as Senior Vice President and head of Business Area Technologies & New Businesses which will continue to focus on developing new business solutions to accelerate growth across Ericsson’s core and enterprise businesses – building on the successful model established to incubate new growth businesses, such as Dedicated Networks and Cradlepoint.
“With this change we are taking important steps in our journey to execute on our strategy. The new Business Area Enterprise Wireless Solutions will provide the focus and conditions we need to thrive in the enterprise market and secure the next wave of success for this business. We are also excited to continue to invest in new businesses for our long-term growth through the proven model established in Business Area Technologies & New Businesses. I want to extend a warm welcome to George as he joins Ericsson’s Executive Team“, says Börje Ekholm.
Group Function Global Operations
The company is also changing its group function structure by adding a Group Function Global Operations. This function will combine the many support functions that are currently spread across the Company, including Sourcing, IT, Digital Transformation, Group Sales, Real Estate and the operations parts of the People and Finance Functions. By creating a global operations function, Ericsson will be able to run its global operations more effectively and consistently across the organization.
Moti Gyamlani is appointed Senior Vice President and head of Group Function Global Operations and will be a member of the Ericsson Executive Team. Moti is currently working as Head of Group Sourcing.
“Global Operations is created to achieve best-in class customer and employee experience by simplifying and digitalizing end-to-end process flows in the company. By creating this function, we will be able to better serve the needs of our customers and better support our people, making us more agile and more competitive. It is great to welcome Moti to the Executive Team and look forward to working together with him to create a world class global operations function”, says Börje Ekholm.
Executive Team changes
Arun Bansal, currently Executive Vice President and Head of Market Area Europe and Latin America, will leave the company to pursue other opportunities and will therefore step down from his EVP role with immediate effect. He has been with Ericsson since 1995 and has been in his current role for the last five years. The Acting Head of Market Area Europe and Latin America will be announced separately.
“Arun has been leading our Market Area Europe and Latin America for the last five years and has been instrumental in driving change across the organization, and in establishing and nurturing some of our most important customer relationships. I wish Arun all the best in his future endeavors”, says Börje Ekholm.
“After turning around the company, Ericsson is entering a new phase of growth. The changed group structure that we announce today represents exciting opportunities for our people, our customers and our business and will allow us to continue to grow our core mobile infrastructure business and capitalize on the fast-growing enterprise market. Within 2-3 years, we want to achieve our long-term goal of growing faster than the market and an EBITA margin (excluding restructuring costs) of 15-18% for the Group. I look forward to working together with the new Executive Team, and the whole Ericsson team, as we accelerate our work to execute on our strategy, strengthen our company culture and continue to grow the company with increased profitability”, concludes Ekholm.
Reporting segments
Following the new group structure, Ericsson will have the following reporting segments:
| • | Segment Networks (unchanged) |
| • | Segment Cloud Software and Services (corresponding to former Digital Services and Managed Services) |
| • | Segment Enterprise (Enterprise Wireless Solutions and Technologies & New Businesses). On completion of the acquisition, Vonage will form a separate Business Area included in this segment. |
| • | Segment Other (including media businesses and one-offs) The new segment reporting structure will be applied from Q3 2022. Restated financials for new segments for 2020 – 2022 will be published in September 2022 ahead of the Q3 quarterly report. |
https://www.ericsson.com/en/press-releases/2022/5/ericsson-changes-group-structure-and-executive-team-to-execute-on-growth-strategy
June 9, 2022 | Update on Ericsson engagement with U.S. authorities
As previously announced, Ericsson has been engaged with authorities regarding the review and investigation of the Company’s conduct in Iraq. The United States Securities and Exchange Commission (SEC) has notified the Company that it has opened an investigation concerning the matters described in the company’s 2019 Iraq investigation report. It is too early to determine or predict the outcome of the investigation, but Ericsson is fully cooperating with the SEC.
https://www.ericsson.com/en/press-releases/2022/6/update-on-ericsson-engagement-with-u.s.-authorities
June 28, 2022 | Update on Ericsson’s proposed acquisition of Vonage
Ericsson continues to work closely with the Committee on Foreign Investment in the United States as it reviews its proposed acquisition of Vonage Holdings Corp. The merger has cleared all other requisite foreign and US regulatory approval requirements, and the parties are working to conclude the regulatory process as expeditiously as possible. Ericsson and Vonage remain fully committed to this transaction and are working towards closing before end of July, 2022.
https://www.ericsson.com/en/press-releases/2022/6/update-on-ericssons-proposed-acquisition-of-vonage
| 12 Ericsson | Second quarter report 2022 | Other information | |
Table of Contents
Risk factors
Ericsson is exposed to a number of risks in its activities. To stimulate identification and support cross-functional treatment within the Ericsson Group, risks are grouped in a number of categories, including for example risks relating to technology, IPR, compliance, project execution, operations, products and services, treasury and accounting, the geopolitical environment, M&A, cyber security and occupational health and safety.
Ericsson’s risk management is embedded into strategy development and operational processes and is a part of the Ericsson Group Management System to ensure accountability, effectiveness, efficiency, business continuity and compliance. Risks are defined in both a short-term and long-term perspective and are related to long-term objectives as per the strategic direction as well as to short-term objectives.
Risk factors and uncertainties of relevance to Ericsson are described in the Annual Report 2021 and in the Annual Report on Form 20-F 2021 (in the following the “Annual Report 2021”). Updates to these risk factors and uncertainties observed by Ericsson that are deemed of short-term relevance include, but are not limited to, the following risks described below:
Deferred Prosecution Agreement with the United States Department of Justice
On December 6, 2019, Ericsson entered into a Deferred Prosecution Agreement (DPA) with the United States Department of Justice (DOJ). In October 2021, Ericsson received correspondence from the DOJ stating its determination that the Company had breached its obligations under its DPA by failing to provide certain documents and factual information. On March 1, 2022, the DOJ informed Ericsson that the disclosure made by the Company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient. Furthermore, it determined that the Company breached the DPA by failing to make subsequent disclosure related to the investigation post-DPA. As mentioned in the Annual Report 2021, the Company is in communication with the DOJ regarding the facts and circumstances of the breach determinations and is committed to co-operating with the DOJ to resolve the matters. While the length of the process cannot be determined, the resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated. Accordingly, no provisions have been recorded for such potential exposure.
Business in Russia
As mentioned in the Annual Report 2021, including in the risk factor 1.1 and 3.2, conducting business throughout the world makes Ericsson subject to the effects of general global economic conditions as well as conditions unique to specific countries or regions. In addition to the risk factors described in the Annual Report 2021 and the provision recorded by the Company in Q1 2022, the large uncertainties relating to the Russian market, including the applicable and changed sanctions landscape, lead to large uncertainties relating to other potential costs and consequences that may follow. All of the above could have a material adverse effect on the Company, including its reputation, business, financial condition, results of operations (EBIT), cash flows, or prospects.
We are subject to certain US and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations. Ericsson may be subject to further adverse consequences under the DPA with the DOJ and the injunction issued in connection with the settlement with the SEC, both from 2019, and other investigations by the DOJ and SEC
As mentioned in the Annual Report 2021, including in the risk factor 3.3, in February 2022, the Company publicly disclosed a 2019 internal investigation that included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period 2011–2019. The Company is responding to investigative inquiries from the DOJ and SEC about the matters described in the Iraq investigation report, including allegations relating to illegal financing of terrorism and bribery.
Ericsson is involved in lawsuits, legal proceedings and investigations which, if determined unfavorably, could require the Company to pay substantial damages, fines and/or penalties
As previously disclosed, on March 3, 2022, Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed on behalf of investors in Ericsson securities in the United States District Court for the Eastern District of New York. The complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and disclosure policies and obligations and the conduct of its business in Iraq.
This report has not been reviewed by Telefonaktiebolaget LM Ericsson auditors
Date for next report: October 20, 2022
| 13 Ericsson | Second quarter report 2022 | Risk factors | |
Table of Contents
Board assurance
The Board of Directors and the President and CEO certify that the financial report for the six months gives a fair view of the performance of the business, position and profit or loss of the Company and the Group, and describes the principal risks and uncertainties that the Company and the companies in the Group face.
Stockholm, July 14, 2022
Telefonaktiebolaget LM Ericsson (publ)
Org. Nr. 556016-0680
| Helena Stjernholm | Ronnie Leten | Jacob Wallenberg | ||
| Deputy Chair | Chair | Deputy Chair | ||
| Jon Fredrik Baksaas | Jan Carlson | Nora Denzel | ||
| Member of the Board | Member of the Board | Member of the Board | ||
| Carolina Dybeck Happe | Eric A. Elzvik | Kurt Jofs | ||
| Member of the Board | Member of the Board | Member of the Board | ||
| Kristin S. Rinne | Börje Ekholm | |||
| Member of the Board | President, CEO and member of the Board | |||
| Torbjörn Nyman | Anders Ripa | Kjell-Åke Soting | ||
| Member of the Board | Member of the Board | Member of the Board | ||
| 14 Ericsson | Second quarter report 2022 | Board assurance | |
Table of Contents
Editor’s note
Media and analyst briefing
Ericsson invites media, investors and analysts to a conference call and live video webcast at 9:00 AM CEST on July 14, 2022.
Link to the webcast, dial-in to audio conference, supporting material and replay will be available at:
www.ericsson.com/investors and
www.ericsson.com/newsroom
For further information, please contact:
Carl Mellander, Senior Vice President, Chief Financial Officer
Phone: +46 72 583 88 70
E-mail: investor.relations@ericsson.com or
media.relations@ericsson.com
Stella Medlicott, Senior Vice President, Chief Marketing and Communications Officer
Phone: +46 73 095 65 39
E-mail: investor.relations@ericsson.com or
media.relations@ericsson.com
Telefonaktiebolaget LM Ericsson
Org. number: 556016-0680
Torshamnsgatan 21
SE-164 83 Stockholm
Phone: +46 10 719 00 00
www.ericsson.com
Investors
Peter Nyquist, Vice President,
Head of Investor Relations
Phone: +46 70 575 29 06
E-mail: peter.nyquist@ericsson.com
Lena Häggblom, Director,
Investor Relations
Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Stefan Jelvin, Director,
Investor Relations
Phone: +46 70 986 02 27
E-mail: stefan.jelvin@ericsson.com
Media
Kristoffer Edshage, Director of Corporate Media
Phone: +46 72 220 44 46
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
| 15 Ericsson | Second quarter report 2022 | Editor’s note | |
Table of Contents
Forward-looking statements
This report includes forward-looking statements, including statements reflecting management’s current views relating to the growth of the market, future market conditions, future events, financial condition, and expected operational and financial performance, including, the following:
| • | Our goals, targets, strategies, planning assumptions and operational or financial performance expectations, such as the investor day key messages and our targets and strategies as described in the introductory bullets, the CEO comments, the Segment descriptions and in Other information |
| • | Industry trends, future characteristics and development of the markets in which we operate |
| • | Our future liquidity, capital resources, capital expenditures, cost savings and profitability |
| • | The expected demand for our existing and new products and services as well as plans to launch new products and services including research and development expenditures |
| • | The ability to deliver on future plans and to realize potential for future growth |
| • | The expected operational or financial performance of strategic cooperation activities and joint ventures |
| • | The time until acquired entities and businesses will be integrated and accretive to income |
| • | Technology and industry trends including the regulatory and standardization environment in which we operate, competition and our customer structure. |
The words “believe,” “expect,” “foresee,” “anticipate,” “assume,” “intend,” “likely,” “projects,” “may,” “could,” “plan,” “estimate,” “forecast,” “will,” “should,” “would,” “predict,” “aim,” “ambition,” “seek,” “potential,” “target,” “might,” “continue,” or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.
We caution investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond our control that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.
Important factors that could affect whether and to what extent any of our forward-looking statements materialize include, but are not limited to, the factors described in the section “Risk Factors”, and in “Risk Factors” in the Annual Report 2021.
These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this report, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulation.
| 16 Ericsson | Second quarter report 2022 | Forward-looking statements | |
Table of Contents
Financial statements and other information
| 17 Ericsson | Second quarter report 2022 | Financial statements and other information | |
Table of Contents
Financial statements (unaudited)
Condensed consolidated income statement
| Q2 | Jan-Jun | |||||||||||||||||||||||
| SEK million |
Note | 2022 | 2021 | Change | 2022 | 2021 | ||||||||||||||||||
| Net sales |
3 | 62,465 | 54,941 | 14 | % | 117,526 | 104,719 | |||||||||||||||||
| Cost of sales |
-36,163 | -31,084 | 16 | % | -67,935 | -59,567 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross income |
3 | 26,302 | 23,857 | 10 | % | 49,591 | 45,152 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Research and development expenses |
-11,496 | -10,480 | 10 | % | -22,201 | -20,056 | ||||||||||||||||||
| Selling and administrative expenses |
-7,872 | -6,972 | 13 | % | -14,460 | -13,160 | ||||||||||||||||||
| Impairment losses on trade receivables |
3 | 100 | -97 | % | -177 | -112 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating expenses |
-19,365 | -17,352 | 12 | % | -36,838 | -33,328 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Other operating income and expenses ¹) |
393 | -579 | -168 | % | -672 | -566 | ||||||||||||||||||
| Share in earnings of JV and associated companies |
-22 | -103 | -79 | % | -29 | -174 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Earnings before financial items and income tax (EBIT) |
3 | 7,308 | 5,823 | 26 | % | 12,052 | 11,084 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Financial income and expenses, net |
-759 | -454 | 67 | % | -1,402 | -987 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income after financial items |
6,549 | 5,369 | 22 | % | 10,650 | 10,097 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income tax |
-1,899 | -1,469 | 29 | % | -3,088 | -3,029 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income |
4,650 | 3,900 | 19 | % | 7,562 | 7,068 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income attributable to: |
||||||||||||||||||||||||
| Owners of the Parent Company |
4,504 | 3,679 | 7,444 | 6,866 | ||||||||||||||||||||
| Non-controlling interests |
146 | 221 | 118 | 202 | ||||||||||||||||||||
| Other information |
||||||||||||||||||||||||
| Average number of shares, basic (million) |
8 | 3,330 | 3,329 | 3,330 | 3,329 | |||||||||||||||||||
| Earnings per share, basic (SEK) ²) |
1.36 | 1.10 | 2.24 | 2.06 | ||||||||||||||||||||
| Earnings per share, diluted (SEK) ³) |
1.35 | 1.10 | 2.23 | 2.06 | ||||||||||||||||||||
| 1) | Jan-June 2022 includes a provision of SEK -0.9 billion (-0.9 b. in Q1) for impairment of assets and other one-time costs due to the suspension of affected business in Russia, and the impact of Ericsson Ventures investments of SEK -0.2 billion (-0.3 b. in Q1 and 0.1 b. in Q2). |
| 2) | Based on net income attributable to owners of the Parent Company. |
| 3) | Potential ordinary shares are not considered when their conversion to ordinary shares would improve earnings per share. |
Condensed statement of comprehensive income (loss)
| Q2 | Jan-Jun | |||||||||||||||
| SEK million |
2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income |
4,650 | 3,900 | 7,562 | 7,068 | ||||||||||||
| Other comprehensive income |
||||||||||||||||
| Items that will not be reclassified to profit or loss |
||||||||||||||||
| Remeasurements of defined benefits pension plans incl. asset ceiling |
7,543 | 595 | 14,469 | 6,641 | ||||||||||||
| Revaluation of borrowings due to change in credit risk |
1,064 | 39 | 1,980 | -16 | ||||||||||||
| Cash flow hedge reserve - gains/losses arising during the year |
3,893 | — | 4,351 | — | ||||||||||||
| Tax on items that will not be reclassified to profit or loss |
-2,431 | -93 | -4,192 | -1,326 | ||||||||||||
| Items that have been or may be reclassified to profit or loss |
||||||||||||||||
| Cash flow hedge reserve |
||||||||||||||||
| Gains/losses arising during the period |
-1,295 | -123 | -1,174 | -154 | ||||||||||||
| Reclassification adjustments on gains/ losses included in profit or loss |
43 | -24 | 85 | -48 | ||||||||||||
| Translation reserves |
||||||||||||||||
| Changes in translation reserves |
4,167 | -476 | 5,752 | 1,245 | ||||||||||||
| Reclassification to profit and loss |
-26 | -9 | -34 | -9 | ||||||||||||
| Share of other comprehensive income (loss) of JV and associated companies |
41 | -4 | 40 | 31 | ||||||||||||
| Tax on items that have been or may be reclassified to profit or loss |
258 | 31 | 224 | 42 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other comprehensive income (loss), net of tax |
13,257 | -64 | 21,501 | 6,406 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total comprehensive income |
17,907 | 3,836 | 29,063 | 13,474 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total comprehensive income attributable to: |
||||||||||||||||
| Owners of the Parent Company |
17,896 | 3,597 | 29,133 | 13,352 | ||||||||||||
| Non-controlling interests |
11 | 239 | -70 | 122 | ||||||||||||
| 18 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Condensed consolidated balance sheet
| Jun 30 | Dec 31 | |||||||||||
| SEK million |
Note | 2022 | 2021 | |||||||||
| Assets |
||||||||||||
| Non-current assets |
||||||||||||
| Intangible assets |
||||||||||||
| Capitalized development expenses |
3,358 | 3,528 | ||||||||||
| Goodwill |
42,210 | 38,204 | ||||||||||
| Intellectual property rights, brands and other intangible assets |
3,911 | 3,830 | ||||||||||
| Property, plant and equipment |
13,942 | 13,580 | ||||||||||
| Right-of-use assets |
7,951 | 7,948 | ||||||||||
| Financial assets |
||||||||||||
| Equity in JV and associated companies |
1,071 | 941 | ||||||||||
| Other investments in shares and participations |
5 | 1,867 | 2,258 | |||||||||
| Customer finance, non-current |
5 | 379 | 568 | |||||||||
| Interest-bearing securities, non-current |
5 | 3,061 | 30,626 | |||||||||
| Other financial assets, non-current |
5 | 8,363 | 6,217 | |||||||||
| Deferred tax assets |
22,982 | 23,109 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 109,095 | 130,809 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Current assets |
||||||||||||
| Inventories |
47,866 | 35,164 | ||||||||||
| Contract assets |
10,186 | 10,506 | ||||||||||
| Trade receivables |
5 | 47,156 | 45,399 | |||||||||
| Customer finance, current |
5 | 3,221 | 2,719 | |||||||||
| Current tax assets |
7,299 | 6,379 | ||||||||||
| Other current receivables |
10,297 | 7,656 | ||||||||||
| Interest-bearing securities, current |
5 | 3,715 | 12,932 | |||||||||
| Cash and cash equivalents |
5 | 93,618 | 54,050 | |||||||||
|
|
|
|
|
|
|
|||||||
| 223,358 | 174,805 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
332,453 | 305,614 | ||||||||||
|
|
|
|
|
|
|
|||||||
| Equity and liabilities |
||||||||||||
| Equity |
||||||||||||
| Stockholders’ equity |
129,620 | 108,775 | ||||||||||
| Non-controlling interest in equity of subsidiaries |
-1,821 | -1,676 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 127,799 | 107,099 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Non-current liabilities |
||||||||||||
| Post-employment benefits |
25,326 | 36,050 | ||||||||||
| Provisions, non-current |
4 | 4,020 | 3,722 | |||||||||
| Deferred tax liabilities |
1,250 | 884 | ||||||||||
| Borrowings, non-current |
5 | 26,363 | 22,241 | |||||||||
| Lease liabilities, non-current |
7,086 | 7,079 | ||||||||||
| Other non-current liabilities |
762 | 1,587 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 64,807 | 71,563 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Current liabilities |
||||||||||||
| Provisions, current |
4 | 5,648 | 5,782 | |||||||||
| Borrowings, current |
5 | 3,686 | 9,590 | |||||||||
| Lease liabilities, current |
2,378 | 2,224 | ||||||||||
| Contract liabilities |
41,547 | 32,834 | ||||||||||
| Trade payables |
5 | 39,539 | 35,684 | |||||||||
| Current tax liabilities |
6,703 | 2,917 | ||||||||||
| Other current liabilities |
40,346 | 37,921 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 139,847 | 126,952 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Total equity and liabilities |
332,453 | 305,614 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 19 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Condensed consolidated statement of cash flows
| Q2 | Jan-Jun | |||||||||||||||||||
| SEK million |
Note | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Operating activities |
||||||||||||||||||||
| Net income |
4,650 | 3,900 | 7,562 | 7,068 | ||||||||||||||||
| Adjustments for |
||||||||||||||||||||
| Taxes |
1,751 | 1,230 | 2,772 | 2,814 | ||||||||||||||||
| Earnings/ dividends in JV and associated companies |
88 | 112 | 96 | 188 | ||||||||||||||||
| Depreciation, amortization and impairment losses |
6 | 2,224 | 2,097 | 4,370 | 4,032 | |||||||||||||||
| Other |
345 | 631 | 1,244 | 816 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 9,058 | 7,970 | 16,044 | 14,918 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Changes in operating net assets |
||||||||||||||||||||
| Inventories |
-4,728 | -701 | -10,074 | -1,936 | ||||||||||||||||
| Customer finance, current and non-current |
134 | 454 | 11 | 673 | ||||||||||||||||
| Trade receivables and contract assets |
3,350 | -4,034 | 4,251 | -2,055 | ||||||||||||||||
| Trade payables |
1,324 | 744 | -47 | -3,368 | ||||||||||||||||
| Provisions and post-employment benefits |
-321 | -1,461 | 648 | -938 | ||||||||||||||||
| Contract liabilities |
-721 | 4,603 | 5,539 | 9,057 | ||||||||||||||||
| Other operating assets and liabilities, net |
-333 | 608 | -7,100 | -5,073 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| -1,295 | 213 | -6,772 | -3,640 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest received |
-17 | 2 | 61 | 70 | ||||||||||||||||
| Interest paid |
-437 | -384 | -648 | -544 | ||||||||||||||||
| Taxes paid |
-1,022 | -1,861 | -2,368 | -1,659 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from operating activities |
6,287 | 5,940 | 6,317 | 9,145 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investing activities |
||||||||||||||||||||
| Investments in property, plant and equipment |
6 | -1,053 | -1,007 | -1,871 | -1,922 | |||||||||||||||
| Sales of property, plant and equipment |
61 | 17 | 99 | 41 | ||||||||||||||||
| Acquisitions/divestments of subsidiaries and other operations, net |
123 | -69 | 169 | -64 | ||||||||||||||||
| Product development |
6 | -301 | -266 | -589 | -470 | |||||||||||||||
| Purchase of interest-bearing securities |
-1,037 | -13,207 | -1,037 | -16,887 | ||||||||||||||||
| Sale of interest-bearing securities |
22,747 | 7,408 | 38,774 | 11,249 | ||||||||||||||||
| Other investing activities |
1,384 | — | 805 | -5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from investing activities |
21,924 | -7,124 | 36,350 | -8,058 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Financing activities |
||||||||||||||||||||
| Proceeds from issuance of long-term debt |
— | 7,804 | 7,788 | 7,881 | ||||||||||||||||
| Repayment of long-term debt |
-9,993 | -510 | -9,993 | -5,752 | ||||||||||||||||
| Dividends paid |
-4,164 | -3,328 | -4,164 | -3,333 | ||||||||||||||||
| Repayment of lease liabilities |
-577 | -617 | -1,170 | -1,165 | ||||||||||||||||
| Other financing activities |
243 | 940 | 812 | 491 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from financing activities |
-14,491 | 4,289 | -6,727 | -1,878 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Effect of exchange rate changes on cash |
3,042 | -375 | 3,628 | 452 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net change in cash and cash equivalents |
16,762 | 2,730 | 39,568 | -339 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash and cash equivalents, beginning of period |
76,856 | 40,543 | 54,050 | 43,612 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash and cash equivalents, end of period |
93,618 | 43,273 | 93,618 | 43,273 | ||||||||||||||||
| 20 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Condensed consolidated statement of changes in equity
| Jan-Jun | ||||||||
| SEK million |
2022 | 2021 | ||||||
| Opening balance |
107,099 | 85,177 | ||||||
| Total comprehensive income |
29,063 | 13,474 | ||||||
| Sale/repurchase of own shares |
— | — | ||||||
| Long-term variable compensation plans |
46 | 43 | ||||||
| Dividends to shareholders1) |
-8,410 | -6,873 | ||||||
| Transactions with non-controlling interests |
1 | -126 | ||||||
|
|
|
|
|
|||||
| Closing balance |
127,799 | 91,695 | ||||||
|
|
|
|
|
|||||
| 1) | Includes accrual of SEK 4,173 (3,335) million in Jan-Jun for the dividend approved by the Annual General Meeting on March 29, 2022. SEK 1.25 per share of the total SEK 2.50 per share of the dividend will be paid out in Q4 2022. |
Condensed consolidated income statement – isolated quarters
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| Cost of sales |
-36,163 | -31,772 | -40,511 | -31,487 | -31,084 | -28,483 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross income |
26,302 | 23,289 | 30,821 | 24,776 | 23,857 | 21,295 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Research and development expenses |
-11,496 | -10,705 | -11,863 | -10,155 | -10,480 | -9,576 | ||||||||||||||||||
| Selling and administrative expenses |
-7,872 | -6,588 | -7,620 | -6,177 | -6,972 | -6,188 | ||||||||||||||||||
| Impairment losses on trade receivables |
3 | -180 | 99 | -27 | 100 | -212 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating expenses |
-19,365 | -17,473 | -19,384 | -16,359 | -17,352 | -15,976 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Other operating income and expenses1) |
393 | -1,065 | 428 | 500 | -579 | 13 | ||||||||||||||||||
| Share in earnings of JV and associated companies |
-22 | -7 | -4 | -82 | -103 | -71 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Earnings before financial items and income tax (EBIT) |
7,308 | 4,744 | 11,861 | 8,835 | 5,823 | 5,261 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Financial income and expenses, net |
-759 | -643 | -945 | -598 | -454 | -533 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income after financial items |
6,549 | 4,101 | 10,916 | 8,237 | 5,369 | 4,728 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income tax |
-1,899 | -1,189 | -770 | -2,471 | -1,469 | -1,560 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income |
4,650 | 2,912 | 10,146 | 5,766 | 3,900 | 3,168 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) attributable to: |
||||||||||||||||||||||||
| Owners of the Parent Company |
4,504 | 2,940 | 10,076 | 5,752 | 3,679 | 3,187 | ||||||||||||||||||
| Non-controlling interests |
146 | -28 | 70 | 14 | 221 | -19 | ||||||||||||||||||
| Other information |
||||||||||||||||||||||||
| Average number of shares, basic (million) |
3,330 | 3,330 | 3,330 | 3,330 | 3,329 | 3,328 | ||||||||||||||||||
| Earnings per share, basic (SEK)2) |
1.36 | 0.88 | 3.03 | 1.73 | 1.10 | 0.96 | ||||||||||||||||||
| Earnings per share, diluted (SEK)3) |
1.35 | 0.88 | 3.02 | 1.73 | 1.10 | 0.96 | ||||||||||||||||||
| 1) | Q2 2022 includes revaluation/disposals of Ericsson Ventures investments of SEK 0.1 billion. Q1 2022 includes a provision of SEK -0.9 billion for impairment of assets and other one-time costs due to the suspension of the affected business in Russia, and revaluation of Ericsson Venture investments of SEK -0.3 billion. Q4 2021 includes a gain from divestment of a data center and revaluation of Ericsson Ventures investments of SEK 0.4 billion. Q3 2021 includes an Ericsson Ventures investment revaluation of SEK 0.5 billion. Q2 2021 includes cost of SEK -0.8 billion as a result of the Nokia settlement related to the 2019 resolutions with SEC and DOJ. |
| 2) | Based on net income attributable to owners of the Parent Company. |
| 3) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
| 21 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Condensed consolidated statement of cash flows – isolated quarters
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Operating activities |
||||||||||||||||||||||||
| Net income |
4,650 | 2,912 | 10,146 | 5,766 | 3,900 | 3,168 | ||||||||||||||||||
| Adjustments for |
||||||||||||||||||||||||
| Taxes |
1,751 | 1,021 | 938 | 2,824 | 1,230 | 1,584 | ||||||||||||||||||
| Earnings/ dividends in JV and associated companies |
88 | 8 | 13 | 159 | 112 | 76 | ||||||||||||||||||
| Depreciation, amortization and impairment losses |
2,224 | 2,146 | 2,552 | 2,385 | 2,097 | 1,935 | ||||||||||||||||||
| Other |
345 | 899 | 398 | 24 | 631 | 185 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 9,058 | 6,986 | 14,047 | 11,158 | 7,970 | 6,948 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Changes in operating net assets |
||||||||||||||||||||||||
| Inventories |
-4,728 | -5,346 | 248 | -3,877 | -701 | -1,235 | ||||||||||||||||||
| Customer finance, current and non-current |
134 | -123 | 780 | -1,419 | 454 | 219 | ||||||||||||||||||
| Trade receivables and contract assets |
3,350 | 901 | -5,227 | 8,833 | -4,034 | 1,979 | ||||||||||||||||||
| Trade payables |
1,324 | -1,371 | 3,020 | 1,733 | 744 | -4,112 | ||||||||||||||||||
| Provisions and post-employment benefits |
-321 | 969 | 950 | -130 | -1,461 | 523 | ||||||||||||||||||
| Contract liabilities |
-721 | 6,260 | -1,655 | -3,388 | 4,603 | 4,454 | ||||||||||||||||||
| Other operating assets and liabilities, net |
-333 | -6,767 | 4,606 | 3,168 | 608 | -5,681 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| -1,295 | -5,477 | 2,722 | 4,920 | 213 | -3,853 | |||||||||||||||||||
| Interest received |
-17 | 78 | -104 | 42 | 2 | 68 | ||||||||||||||||||
| Interest paid |
-437 | -211 | -310 | -120 | -384 | -160 | ||||||||||||||||||
| Taxes paid/received |
-1,022 | -1,346 | -1,159 | -1,276 | -1,861 | 202 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash flow from operating activities |
6,287 | 30 | 15,196 | 14,724 | 5,940 | 3,205 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Investing activities |
||||||||||||||||||||||||
| Investments in property, plant and equipment |
-1,053 | -818 | -701 | -1,040 | -1,007 | -915 | ||||||||||||||||||
| Sales of property, plant and equipment |
61 | 38 | 34 | 40 | 17 | 24 | ||||||||||||||||||
| Acquisitions/divestments of subs. and other operations, net |
123 | 46 | 178 | -55 | -69 | 5 | ||||||||||||||||||
| Product development |
-301 | -288 | -302 | -190 | -266 | -204 | ||||||||||||||||||
| Purchase of interest-bearing securities |
-1,037 | — | -8,858 | -9,670 | -13,207 | -3,680 | ||||||||||||||||||
| Sale of interest-bearing securities |
22,747 | 16,027 | 7,064 | 1,801 | 7,408 | 3,841 | ||||||||||||||||||
| Other investing activities |
1,384 | -579 | -122 | -4 | — | -5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash flow from investing activities |
21,924 | 14,426 | -2,707 | -9,118 | -7,124 | -934 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Financing activities |
||||||||||||||||||||||||
| Proceeds from issuance of long-term debt |
— | 7,788 | 1 | — | 7,804 | 77 | ||||||||||||||||||
| Repayment of long-term debt |
-9,993 | — | -39 | — | -510 | -5,242 | ||||||||||||||||||
| Dividends paid |
-4,164 | — | -3,395 | -161 | -3,328 | -5 | ||||||||||||||||||
| Repayment of lease liabilities |
-577 | -593 | -623 | -580 | -617 | -548 | ||||||||||||||||||
| Other financing activities |
243 | 569 | -825 | -1,807 | 940 | -449 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash flow from financing activities |
-14,491 | 7,764 | -4,881 | -2,548 | 4,289 | -6,167 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Effect of exchange rate changes on cash |
3,042 | 586 | -34 | 145 | -375 | 827 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net change in cash and cash equivalents |
16,762 | 22,806 | 7,574 | 3,203 | 2,730 | -3,069 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash and cash equivalents, beginning of period |
76,856 | 54,050 | 46,476 | 43,273 | 40,543 | 43,612 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash and cash equivalents, end of period |
93,618 | 76,856 | 54,050 | 46,476 | 43,273 | 40,543 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 22 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Condensed Parent Company income statement
| Q2 | Jan-Jun | |||||||||||||||
| SEK million |
2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net sales |
— | — | — | — | ||||||||||||
| Cost of sales |
— | — | — | — | ||||||||||||
| Gross income |
— | — | — | — | ||||||||||||
| Operating expenses |
-210 | -172 | -565 | -345 | ||||||||||||
| Other operating income and expenses |
644 | -178 | 1,253 | 436 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBIT |
434 | -350 | 688 | 91 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Financial net |
17,475 | 5,241 | 17,306 | 5,593 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income after financial items |
17,909 | 4,891 | 17,994 | 5,684 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Transfers to (-) / from untaxed reserves |
— | — | — | — | ||||||||||||
| Income tax |
-213 | -137 | -300 | -263 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
17,696 | 4,754 | 17,694 | 5,421 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Condensed Parent Company statement of comprehensive income (loss)
| Q2 | Jan-Jun | |||||||||||||||
| SEK million |
2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net income |
17,696 | 4,754 | 17,694 | 5,421 | ||||||||||||
| Revaluation of borrowings due to change in credit risk |
1,064 | 39 | 1,980 | -16 | ||||||||||||
| Cash flow hedge reserve-gains/losses arising during the period |
3,893 | — | 4,351 | — | ||||||||||||
| Tax on items that will not be reclassified to profit or loss |
-1,021 | -8 | -1,299 | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income, net of tax |
3,936 | 31 | 5,032 | -13 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total comprehensive income |
21,632 | 4,785 | 22,726 | 5,408 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 23 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Condensed Parent Company balance sheet
| Jun 30 | Dec 31 | |||||||
| SEK million |
2022 | 2021 | ||||||
| Assets |
||||||||
| Fixed assets |
||||||||
| Intangible assets |
6 | 8 | ||||||
| Tangible assets |
409 | 413 | ||||||
| Financial assets¹) |
97,514 | 120,605 | ||||||
|
|
|
|
|
|||||
| 97,929 | 121,026 | |||||||
|
|
|
|
|
|||||
| Current assets |
||||||||
| Receivables |
27,970 | 27,364 | ||||||
| Short-term investments |
3,433 | 12,722 | ||||||
| Cash and cash equivalents |
78,663 | 37,128 | ||||||
|
|
|
|
|
|||||
| 110,066 | 77,214 | |||||||
|
|
|
|
|
|||||
| Total assets |
207,995 | 198,240 | ||||||
|
|
|
|
|
|||||
| Stockholders’ equity, provisions and liabilities |
||||||||
| Equity |
||||||||
| Restricted equity |
48,164 | 48,164 | ||||||
| Non-restricted equity |
49,407 | 34,984 | ||||||
|
|
|
|
|
|||||
| 97,571 | 83,148 | |||||||
|
|
|
|
|
|||||
| Provisions |
236 | 293 | ||||||
| Non-current liabilities |
26,247 | 22,406 | ||||||
| Current liabilities |
83,941 | 92,393 | ||||||
|
|
|
|
|
|||||
| Total stockholders’ equity, provisions and liabilities |
207,995 | 198,240 | ||||||
|
|
|
|
|
|||||
| 1) Of which interest-bearing securities, non-current |
3,033 | 30,615 | ||||||
| 24 Ericsson | Second quarter report 2022 | Financial statements | |
Table of Contents
Accounting policies and Explanatory notes (unaudited)
The group
This condensed consolidated interim financial report for the quarterly reporting period ended June 30, 2022, has been prepared in accordance with International Accounting Standard, IAS 34 “Interim Financial Reporting”. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and IFRS Interpretations Committee (IFRIC). The accounting policies adopted are consistent with those of the annual report for the year ended December 31, 2021 and should be read in conjunction with that annual report. There are no amendments of IFRS during 2022 that are estimated to have a material impact on the result and financial position of the Company.
Note 2 – Critical accounting estimates and judgements
Russia
In late February, Ericsson suspended all deliveries to customers in Russia. In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely. Ericsson is engaging with customers and partners regarding the indefinite suspension of the affected business. The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave.
As a consequence, Ericsson recorded a SEK 0.9 billion provision in the first quarter 2022 for impairment of assets and other exceptional costs. No staff redundancy cost is included. The provision was recorded in Other operating expenses in Segment Networks. Around one third of this amount will impact cash flow.
| 25 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by segment by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
45,983 | 40,712 | 51,097 | 40,592 | 39,875 | 36,274 | ||||||||||||||||||
| Of which Products |
35,299 | 31,131 | 39,963 | 31,079 | 30,414 | 27,495 | ||||||||||||||||||
| Of which Services |
10,684 | 9,581 | 11,134 | 9,513 | 9,461 | 8,779 | ||||||||||||||||||
| Digital Services |
8,662 | 7,214 | 12,736 | 8,630 | 7,887 | 6,898 | ||||||||||||||||||
| Of which Products |
4,641 | 3,634 | 7,157 | 4,601 | 3,989 | 3,581 | ||||||||||||||||||
| Of which Services |
4,021 | 3,580 | 5,579 | 4,029 | 3,898 | 3,317 | ||||||||||||||||||
| Managed Services |
5,416 | 4,946 | 5,354 | 5,041 | 5,119 | 4,865 | ||||||||||||||||||
| Emerging Business and Other |
2,404 | 2,189 | 2,145 | 2,000 | 2,060 | 1,741 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Sequential change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
13 | % | -20 | % | 26 | % | 2 | % | 10 | % | -27 | % | ||||||||||||
| Of which Products |
13 | % | -22 | % | 29 | % | 2 | % | 11 | % | -27 | % | ||||||||||||
| Of which Services |
12 | % | -14 | % | 17 | % | 1 | % | 8 | % | -26 | % | ||||||||||||
| Digital Services |
20 | % | -43 | % | 48 | % | 9 | % | 14 | % | -46 | % | ||||||||||||
| Of which Products |
28 | % | -49 | % | 56 | % | 15 | % | 11 | % | -52 | % | ||||||||||||
| Of which Services |
12 | % | -36 | % | 38 | % | 3 | % | 18 | % | -37 | % | ||||||||||||
| Managed Services |
10 | % | -8 | % | 6 | % | -2 | % | 5 | % | -16 | % | ||||||||||||
| Emerging Business and Other |
10 | % | 2 | % | 7 | % | -3 | % | 18 | % | 0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
13 | % | -23 | % | 27 | % | 2 | % | 10 | % | -28 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
15 | % | 12 | % | 4 | % | -3 | % | 0 | % | 3 | % | ||||||||||||
| Of which Products |
16 | % | 13 | % | 7 | % | 0 | % | 5 | % | 11 | % | ||||||||||||
| Of which Services |
13 | % | 9 | % | -6 | % | -11 | % | -13 | % | -15 | % | ||||||||||||
| Digital Services |
10 | % | 5 | % | 1 | % | -1 | % | -8 | % | -6 | % | ||||||||||||
| Of which Products |
16 | % | 1 | % | -4 | % | 0 | % | -13 | % | -6 | % | ||||||||||||
| Of which Services |
3 | % | 8 | % | 6 | % | -2 | % | -2 | % | -6 | % | ||||||||||||
| Managed Services |
6 | % | 2 | % | -8 | % | -8 | % | -8 | % | -15 | % | ||||||||||||
| Emerging Business and Other |
17 | % | 26 | % | 23 | % | 26 | % | 29 | % | 11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
14 | % | 11 | % | 3 | % | -2 | % | -1 | % | 0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
86,695 | 40,712 | 167,838 | 116,741 | 76,149 | 36,274 | ||||||||||||||||||
| Of which Products |
66,430 | 31,131 | 128,951 | 88,988 | 57,909 | 27,495 | ||||||||||||||||||
| Of which Services |
20,265 | 9,581 | 38,887 | 27,753 | 18,240 | 8,779 | ||||||||||||||||||
| Digital Services |
15,876 | 7,214 | 36,151 | 23,415 | 14,785 | 6,898 | ||||||||||||||||||
| Of which Products |
8,275 | 3,634 | 19,328 | 12,171 | 7,570 | 3,581 | ||||||||||||||||||
| Of which Services |
7,601 | 3,580 | 16,823 | 11,244 | 7,215 | 3,317 | ||||||||||||||||||
| Managed Services |
10,362 | 4,946 | 20,379 | 15,025 | 9,984 | 4,865 | ||||||||||||||||||
| Emerging Business and Other |
4,593 | 2,189 | 7,946 | 5,801 | 3,801 | 1,741 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
14 | % | 12 | % | 1 | % | 0 | % | 2 | % | 3 | % | ||||||||||||
| Of which Products |
15 | % | 13 | % | 5 | % | 5 | % | 8 | % | 11 | % | ||||||||||||
| Of which Services |
11 | % | 9 | % | -11 | % | -13 | % | -14 | % | -15 | % | ||||||||||||
| Digital Services |
7 | % | 5 | % | -3 | % | -5 | % | -7 | % | -6 | % | ||||||||||||
| Of which Products |
9 | % | 1 | % | -5 | % | -6 | % | -10 | % | -6 | % | ||||||||||||
| Of which Services |
5 | % | 8 | % | 0 | % | -3 | % | -4 | % | -6 | % | ||||||||||||
| Managed Services |
4 | % | 2 | % | -10 | % | -10 | % | -12 | % | -15 | % | ||||||||||||
| Emerging Business and Other |
21 | % | 26 | % | 22 | % | 22 | % | 20 | % | 11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
12 | % | 11 | % | 0 | % | -1 | % | -1 | % | 0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 26 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Gross income by segment by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
20,735 | 18,211 | 23,643 | 19,401 | 19,111 | 16,714 | ||||||||||||||||||
| Digital Services |
3,460 | 3,097 | 5,456 | 3,644 | 2,990 | 3,002 | ||||||||||||||||||
| Managed Services |
1,247 | 1,148 | 974 | 944 | 975 | 942 | ||||||||||||||||||
| Emerging Business and Other |
860 | 833 | 748 | 787 | 781 | 637 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
26,302 | 23,289 | 30,821 | 24,776 | 23,857 | 21,295 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
38,946 | 18,211 | 78,869 | 55,226 | 35,825 | 16,714 | ||||||||||||||||||
| Digital Services |
6,557 | 3,097 | 15,092 | 9,636 | 5,992 | 3,002 | ||||||||||||||||||
| Managed Services |
2,395 | 1,148 | 3,835 | 2,861 | 1,917 | 942 | ||||||||||||||||||
| Emerging Business and Other |
1,693 | 833 | 2,953 | 2,205 | 1,418 | 637 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
49,591 | 23,289 | 100,749 | 69,928 | 45,152 | 21,295 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBIT (loss) by segment by quarter
| ` | 2022 | 2021 | ||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
8,822 | 6,747 | 11,757 | 9,624 | 8,645 | 7,240 | ||||||||||||||||||
| Digital Services |
-1,323 | -1,418 | 304 | -822 | -1,567 | -1,519 | ||||||||||||||||||
| Managed Services |
605 | 592 | 353 | 386 | 416 | 313 | ||||||||||||||||||
| Emerging Business and Other |
-796 | -1,177 | -553 | -353 | -1,671 | -773 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
7,308 | 4,744 | 11,861 | 8,835 | 5,823 | 5,261 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
15,569 | 6,747 | 37,266 | 25,509 | 15,885 | 7,240 | ||||||||||||||||||
| Digital Services |
-2,741 | -1,418 | -3,604 | -3,908 | -3,086 | -1,519 | ||||||||||||||||||
| Managed Services |
1,197 | 592 | 1,468 | 1,115 | 729 | 313 | ||||||||||||||||||
| Emerging Business and Other |
-1,973 | -1,177 | -3,350 | -2,797 | -2,444 | -773 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
12,052 | 4,744 | 31,780 | 19,919 | 11,084 | 5,261 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 27 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by market area by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
7,962 | 5,836 | 8,604 | 6,450 | 7,099 | 6,676 | ||||||||||||||||||
| North East Asia |
7,319 | 5,421 | 9,816 | 5,691 | 7,123 | 6,491 | ||||||||||||||||||
| North America |
22,849 | 20,727 | 22,264 | 20,161 | 17,950 | 17,081 | ||||||||||||||||||
| Europe and Latin America1)2) |
15,325 | 15,290 | 19,236 | 14,378 | 14,011 | 12,647 | ||||||||||||||||||
| Middle East and Africa |
5,223 | 4,301 | 6,948 | 4,985 | 4,459 | 4,393 | ||||||||||||||||||
| Other1)2) |
3,787 | 3,486 | 4,464 | 4,598 | 4,299 | 2,490 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 1) Of which in Sweden |
950 | 678 | 1,078 | 478 | 404 | 389 | ||||||||||||||||||
| 2) Of which in EU |
8,511 | 8,611 | 10,181 | 7,069 | 7,256 | 6,801 | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Sequential change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
36 | % | -32 | % | 33 | % | -9 | % | 6 | % | -32 | % | ||||||||||||
| North East Asia |
35 | % | -45 | % | 72 | % | -20 | % | 10 | % | -49 | % | ||||||||||||
| North America |
10 | % | -7 | % | 10 | % | 12 | % | 5 | % | -11 | % | ||||||||||||
| Europe and Latin America1)2) |
0 | % | -21 | % | 34 | % | 3 | % | 11 | % | -26 | % | ||||||||||||
| Middle East and Africa |
21 | % | -38 | % | 39 | % | 12 | % | 2 | % | -33 | % | ||||||||||||
| Other1)2) |
9 | % | -22 | % | -3 | % | 7 | % | 73 | % | -42 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
13 | % | -23 | % | 27 | % | 2 | % | 10 | % | -28 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 1) Of which in Sweden |
40 | % | -37 | % | 126 | % | 18 | % | 4 | % | 7 | % | ||||||||||||
| 2) Of which in EU |
-1 | % | -15 | % | 44 | % | -3 | % | 7 | % | -23 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
12 | % | -13 | % | -12 | % | -17 | % | 8 | % | 13 | % | ||||||||||||
| North East Asia |
3 | % | -16 | % | -23 | % | -35 | % | -9 | % | 66 | % | ||||||||||||
| North America |
27 | % | 21 | % | 17 | % | 10 | % | -2 | % | -5 | % | ||||||||||||
| Europe and Latin America1)2) |
9 | % | 21 | % | 12 | % | 8 | % | 7 | % | 3 | % | ||||||||||||
| Middle East and Africa |
17 | % | -2 | % | 7 | % | -10 | % | -18 | % | -25 | % | ||||||||||||
| Other1)2) |
-12 | % | 40 | % | 4 | % | 26 | % | 0 | % | -37 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
14 | % | 11 | % | 3 | % | -2 | % | -1 | % | 0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 1) Of which in Sweden |
135 | % | 74 | % | 197 | % | 92 | % | 42 | % | 71 | % | ||||||||||||
| 2) Of which in EU |
17 | % | 27 | % | 15 | % | 0 | % | 0 | % | 9 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| South East Asia, Oceania and India |
13,798 | 5,836 | 28,829 | 20,225 | 13,775 | 6,676 | ||||||||||||||||||
| North East Asia |
12,740 | 5,421 | 29,121 | 19,305 | 13,614 | 6,491 | ||||||||||||||||||
| North America |
43,576 | 20,727 | 77,456 | 55,192 | 35,031 | 17,081 | ||||||||||||||||||
| Europe and Latin America1)2) |
30,615 | 15,290 | 60,272 | 41,036 | 26,658 | 12,647 | ||||||||||||||||||
| Middle East and Africa |
9,524 | 4,301 | 20,785 | 13,837 | 8,852 | 4,393 | ||||||||||||||||||
| Other1)2) |
7,273 | 3,486 | 15,851 | 11,387 | 6,789 | 2,490 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 1) Of which in Sweden |
1,628 | 678 | 2,349 | 1,271 | 793 | 389 | ||||||||||||||||||
| 2) Of which in EU |
17,122 | 8,611 | 31,307 | 21,126 | 14,057 | 6,801 | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| South East Asia, Oceania and India |
0 | % | -13 | % | -4 | % | 0 | % | 10 | % | 13 | % | ||||||||||||
| North East Asia |
-6 | % | -16 | % | -13 | % | -6 | % | 16 | % | 66 | % | ||||||||||||
| North America |
24 | % | 21 | % | 5 | % | 1 | % | -4 | % | -5 | % | ||||||||||||
| Europe and Latin America1)2) |
15 | % | 21 | % | 8 | % | 6 | % | 5 | % | 3 | % | ||||||||||||
| Middle East and Africa |
8 | % | -2 | % | -11 | % | -18 | % | -21 | % | -25 | % | ||||||||||||
| Other1)2) |
7 | % | 40 | % | -2 | % | -4 | % | -18 | % | -37 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
12 | % | 11 | % | 0 | % | -1 | % | -1 | % | 0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 1) Of which in Sweden |
105 | % | 74 | % | 109 | % | 67 | % | 55 | % | 71 | % | ||||||||||||
| 2) Of which in EU |
22 | % | 27 | % | 6 | % | 2 | % | 4 | % | 9 | % | ||||||||||||
| 28 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by market area by segment
| Q2 2022 | Jan-Jun 2022 | |||||||||||||||||||||||||||||||||||||||
| SEK million |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | ||||||||||||||||||||||||||||||
| South East Asia, Oceania and India |
5,723 | 997 | 1,231 | 11 | 7,962 | 9,633 | 1,793 | 2,355 | 17 | 13,798 | ||||||||||||||||||||||||||||||
| North East Asia |
6,210 | 825 | 231 | 53 | 7,319 | 10,751 | 1,507 | 373 | 109 | 12,740 | ||||||||||||||||||||||||||||||
| North America |
19,871 | 2,104 | 858 | 16 | 22,849 | 38,080 | 3,793 | 1,664 | 39 | 43,576 | ||||||||||||||||||||||||||||||
| Europe and Latin America |
10,150 | 2,910 | 2,155 | 110 | 15,325 | 20,775 | 5,472 | 4,151 | 217 | 30,615 | ||||||||||||||||||||||||||||||
| Middle East and Africa |
2,713 | 1,560 | 941 | 9 | 5,223 | 4,899 | 2,793 | 1,819 | 13 | 9,524 | ||||||||||||||||||||||||||||||
| Other1) |
1,316 | 266 | 0 | 2,205 | 3,787 | 2,557 | 518 | 0 | 4,198 | 7,273 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
45,983 | 8,662 | 5,416 | 2,404 | 62,465 | 86,695 | 15,876 | 10,362 | 4,593 | 117,526 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Share of total |
73 | % | 14 | % | 9 | % | 4 | % | 100 | % | 74 | % | 13 | % | 9 | % | 4 | % | 100 | % | ||||||||||||||||||||
| 1) | Includes IPR licensing revenues. |
| Q2 2022 | ||||||||||||||||||||
| Sequential change, percent |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | |||||||||||||||
| South East Asia, Oceania and India |
46 | % | 25 | % | 10 | % | 83 | % | 36 | % | ||||||||||
| North East Asia |
37 | % | 21 | % | 63 | % | -5 | % | 35 | % | ||||||||||
| North America |
9 | % | 25 | % | 6 | % | -30 | % | 10 | % | ||||||||||
| Europe and Latin America |
-4 | % | 14 | % | 8 | % | 3 | % | 0 | % | ||||||||||
| Middle East and Africa |
24 | % | 27 | % | 7 | % | 125 | % | 21 | % | ||||||||||
| Other |
6 | % | 6 | % | — | 11 | % | 9 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
13 | % | 20 | % | 10 | % | 10 | % | 13 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Q2 2022 | Jan-Jun 2022 | |||||||||||||||||||||||||||||||||||||||
| Year over year change, percent |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | ||||||||||||||||||||||||||||||
| South East Asia, Oceania and India |
11 | % | 15 | % | 16 | % | -21 | % | 12 | % | -4 | % | 10 | % | 11 | % | -19 | % | 0 | % | ||||||||||||||||||||
| North East Asia |
0 | % | 18 | % | 45 | % | 2 | % | 3 | % | -7 | % | -3 | % | 13 | % | -11 | % | -6 | % | ||||||||||||||||||||
| North America |
29 | % | 15 | % | 20 | % | -52 | % | 27 | % | 26 | % | 15 | % | 23 | % | -15 | % | 24 | % | ||||||||||||||||||||
| Europe and Latin America |
16 | % | 1 | % | -6 | % | 4 | % | 9 | % | 24 | % | 2 | % | -6 | % | 6 | % | 15 | % | ||||||||||||||||||||
| Middle East and Africa |
15 | % | 31 | % | 4 | % | 200 | % | 17 | % | 4 | % | 19 | % | 2 | % | 86 | % | 8 | % | ||||||||||||||||||||
| Other |
-35 | % | -37 | % | — | 19 | % | -12 | % | -9 | % | -11 | % | — | 23 | % | 7 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
15 | % | 10 | % | 6 | % | 17 | % | 14 | % | 14 | % | 7 | % | 4 | % | 21 | % | 12 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| 29 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Top 5 countries in sales
| Q2 | Jan-Jun | |||||||||||||||
| Country, percentage of net sales1) |
2022 | 2021 | 2022 | 2021 | ||||||||||||
| United States |
38 | % | 34 | % | 38 | % | 35 | % | ||||||||
| China |
5 | % | 3 | % | 5 | % | 3 | % | ||||||||
| United Kingdom |
4 | % | 3 | % | 4 | % | 3 | % | ||||||||
| Japan |
4 | % | 5 | % | 4 | % | 7 | % | ||||||||
| South Korea |
3 | % | 4 | % | 3 | % | 2 | % | ||||||||
| 1) | Based on Jan-June 2022. Includes IPR licensing revenues. |
IPR licensing revenues by segment by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
1,186 | 1,142 | 1,949 | 2,146 | 1,904 | 671 | ||||||||||||||||||
| Digital Services |
261 | 250 | 428 | 471 | 418 | 147 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
1,447 | 1,392 | 2,377 | 2,617 | 2,322 | 818 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
2,328 | 1,142 | 6,670 | 4,721 | 2,575 | 671 | ||||||||||||||||||
| Digital Services |
511 | 250 | 1,464 | 1,036 | 565 | 147 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,839 | 1,392 | 8,134 | 5,757 | 3,140 | 818 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Provisions
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Opening balance |
10,197 | 9,504 | 8,813 | 9,232 | 11,045 | 10,466 | ||||||||||||||||||
| Additions |
547 | 1,583 | 1,738 | 316 | 616 | 1,753 | ||||||||||||||||||
| Utilization |
-893 | -1,173 | -643 | -408 | -2,179 | -979 | ||||||||||||||||||
| Of which restructuring |
-51 | -67 | -193 | -95 | -161 | -336 | ||||||||||||||||||
| Reversal of excess amounts |
-316 | -452 | -603 | -66 | -170 | -339 | ||||||||||||||||||
| Reclassification, translation difference and other |
133 | 735 | 199 | -261 | -80 | 144 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Closing balance |
9,668 | 10,197 | 9,504 | 8,813 | 9,232 | 11,045 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Of which restructuring |
579 | 604 | 637 | 732 | 807 | 950 | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Opening balance |
9,504 | 9,504 | 10,466 | 10,466 | 10,466 | 10,466 | ||||||||||||||||||
| Additions |
2,130 | 1,583 | 4,423 | 2,685 | 2,369 | 1,753 | ||||||||||||||||||
| Utilization/Cash out |
-2,066 | -1,173 | -4,209 | -3,566 | -3,158 | -979 | ||||||||||||||||||
| Of which restructuring |
-118 | -67 | -785 | -592 | -497 | -336 | ||||||||||||||||||
| Reversal of excess amounts |
-768 | -452 | -1,178 | -575 | -509 | -339 | ||||||||||||||||||
| Reclassification, translation difference and other |
868 | 735 | 2 | -197 | 64 | 144 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Closing balance |
9,668 | 10,197 | 9,504 | 8,813 | 9,232 | 11,045 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Of which restructuring |
579 | 604 | 637 | 732 | 807 | 950 | ||||||||||||||||||
| 30 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Note 5 – Financial risk management
There have been no changes to the classification of financial instruments or fair value hierarchy categorization from that presented in the latest Annual Report. Where Level 2 and Level 3 fair value hierarchies apply, the inputs and valuation methods used remained unchanged. The book values and fair values of financial instruments are as follows:
Financial instruments
| SEK billion |
Jun 30 2022 | Dec 31 2021 | ||||||||||||||||||||||||||||||
| Fair value hierarchy level | Fair value hierarchy level | |||||||||||||||||||||||||||||||
| Carrying value |
Level 1 | Level 2 | Level 3 | Carrying value |
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
| Assets at fair value through profit or loss |
||||||||||||||||||||||||||||||||
| Customer finance¹) |
3.6 | — | — | 3.6 | 3.3 | — | — | 3.3 | ||||||||||||||||||||||||
| Interest-bearing securities |
6.2 | 6.2 | — | — | 43.3 | 43.3 | — | — | ||||||||||||||||||||||||
| Cash equivalents²) |
29.7 | — | 29.7 | — | 26.0 | — | 26.0 | — | ||||||||||||||||||||||||
| Other financial assets |
1.9 | 0.1 | — | 1.7 | 2.3 | 0.6 | — | 1.7 | ||||||||||||||||||||||||
| Other current assets |
1.8 | — | 1.8 | — | 0.3 | — | 0.3 | — | ||||||||||||||||||||||||
| Assets at fair value through OCI |
||||||||||||||||||||||||||||||||
| Trade receivables |
47.2 | — | — | 47.2 | 45.4 | — | — | 45.4 | ||||||||||||||||||||||||
| Assets at amortized costs |
||||||||||||||||||||||||||||||||
| Interest-bearing securities |
0.5 | — | — | — | 0.3 | — | — | — | ||||||||||||||||||||||||
| Cash equivalents²) |
4.1 | — | — | — | 4.0 | — | — | — | ||||||||||||||||||||||||
| Other financial assets |
0.6 | — | — | — | 0.5 | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total financial assets |
95.6 | 125.4 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Financial liabilities at designated FVTPL |
||||||||||||||||||||||||||||||||
| Parent company borrowings |
-28.8 | -16.1 | -12.7 | — | -31.4 | -19.5 | -11.9 | — | ||||||||||||||||||||||||
| Financial liabilities at FVTPL |
||||||||||||||||||||||||||||||||
| Other current liabilities |
-3.1 | — | -3.1 | — | -0.8 | — | -0.8 | — | ||||||||||||||||||||||||
| Liabilities at amortized cost |
||||||||||||||||||||||||||||||||
| Trade payables |
-39.5 | — | — | — | -35.7 | — | — | — | ||||||||||||||||||||||||
| Borrowings |
-1.3 | — | — | — | -0.4 | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total financial liabilities |
-72.7 | -68.3 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 1) | Year to date movements of customer finance receivables are as follows: additions of SEK 13.4 billion, disposals and repayments of SEK 13.6 billion and revaluation gain of SEK 0.5 billion. |
| 2) | Total Cash and cash equivalent is SEK 93.6 (54.1) billion, of which SEK 33.8 (30.0) billion relating to Cash equivalents are presented in the table above. |
Exchange rates used in the consolidation
| Jan-Jun | Jan-Dec | |||||||||||
| 2022 | 2021 | 2021 | ||||||||||
| SEK/EUR -closing rate |
10.73 | 10.11 | 10.24 | |||||||||
| SEK/USD -closing rate |
10.31 | 8.51 | 9.05 | |||||||||
| 31 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Information on investments
Investments in assets subject to depreciation, amortization, impairment and write-downs
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Additions |
||||||||||||||||||||||||
| Property, plant and equipment |
1,053 | 818 | 701 | 1,040 | 1,007 | 915 | ||||||||||||||||||
| Capitalized development expenses |
301 | 288 | 302 | 190 | 266 | 204 | ||||||||||||||||||
| IPR, brands and other intangible assets |
2 | 2 | 123 | 3 | 1 | 4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
1,356 | 1,108 | 1,126 | 1,233 | 1,274 | 1,123 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Depreciation, amortization and impairment losses |
||||||||||||||||||||||||
| Property, plant and equipment |
1,074 | 964 | 1,134 | 954 | 910 | 874 | ||||||||||||||||||
| Capitalized development expenses |
403 | 401 | 396 | 394 | 329 | 224 | ||||||||||||||||||
| Goodwill, IPR, brands and other intangible assets |
159 | 198 | 435 | 464 | 294 | 283 | ||||||||||||||||||
| Right-of-use assets |
588 | 583 | 587 | 572 | 564 | 554 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,224 | 2,146 | 2,552 | 2,384 | 2,097 | 1,935 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Additions |
||||||||||||||||||||||||
| Property, plant and equipment |
1,871 | 818 | 3,663 | 2,962 | 1,922 | 915 | ||||||||||||||||||
| Capitalized development expenses |
589 | 288 | 962 | 660 | 470 | 204 | ||||||||||||||||||
| IPR, brands and other intangible assets |
4 | 2 | 131 | 8 | 5 | 4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,464 | 1,108 | 4,756 | 3,630 | 2,397 | 1,123 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Depreciation, amortization and impairment losses |
||||||||||||||||||||||||
| Property, plant and equipment |
2,038 | 964 | 3,872 | 2,738 | 1,784 | 874 | ||||||||||||||||||
| Capitalized development expenses |
804 | 401 | 1,343 | 947 | 553 | 224 | ||||||||||||||||||
| Goodwill, IPR, brands and other intangible assets |
357 | 198 | 1,477 | 1,041 | 577 | 283 | ||||||||||||||||||
| Right-of-use assets |
1,171 | 583 | 2,277 | 1,690 | 1,118 | 554 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
4,370 | 2,146 | 8,969 | 6,416 | 4,032 | 1,935 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Note 7 – Contingent liabilities and Assets pledged as collateral
Contingent liabilities and Assets pledged as collateral
| SEK million |
Jun 30 2022 |
Dec 31 2021 |
||||||
| Contingent liabilities |
2,549 | 1,614 | ||||||
| Assets pledged as collateral |
7,310 | 6,873 | ||||||
On December 6, 2019, Ericsson entered into a Deferred Prosecution Agreement (DPA) with the United States Department of Justice (DOJ). In October 2021, Ericsson received correspondence from the DOJ stating its determination that the Company had breached its obligations under its DPA by failing to provide certain documents and factual information. On March 1, 2022, the DOJ informed Ericsson that the disclosure made by the Company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient. Furthermore, it determined that the Company breached the DPA by failing to make subsequent disclosure related to the investigation post-DPA. As mentioned in the Annual Report 2021, the Company is in communication with the DOJ regarding the facts and circumstances of the breach determinations and is committed to co-operating with the DOJ to resolve the matters. While the length of the process cannot be determined, the resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated. Accordingly, no provisions have been recorded for such potential exposure.
On March 3, 2022, Ericsson learned that Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed in the United States District Court for the Eastern District of New York. The complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and disclosure policies and obligations and the conduct of its business in Iraq. At this stage it is premature to predict the outcome of this matter. Hence it is not possible to reliably estimate potential future cash outflows in resolving the matter.
| 32 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Number of shares and earnings per share
| Q2 | Jan-Jun | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Number of shares, end of period (million) |
3,334 | 3,334 | 3,334 | 3,334 | ||||||||||||
| Of which class A-shares (million) |
262 | 262 | 262 | 262 | ||||||||||||
| Of which class B-shares (million) |
3,072 | 3,072 | 3,072 | 3,072 | ||||||||||||
| Number of treasury shares, end of period (million) |
4 | 4 | 4 | 4 | ||||||||||||
| Number of shares outstanding, basic, end of period (million) |
3,330 | 3,330 | 3,330 | 3,330 | ||||||||||||
| Numbers of shares outstanding, diluted, end of period (million) |
3,334 | 3,333 | 3,334 | 3,333 | ||||||||||||
| Average number of treasury shares (million) |
4 | 5 | 4 | 5 | ||||||||||||
| Average number of shares outstanding, basic (million) |
3,330 | 3,329 | 3,330 | 3,329 | ||||||||||||
| Average number of shares outstanding, diluted (million)1) |
3,334 | 3,332 | 3,334 | 3,332 | ||||||||||||
| Earnings per share, basic (SEK)2) |
1.36 | 1.10 | 2.24 | 2.06 | ||||||||||||
| Earnings per share, diluted (SEK)1) |
1.35 | 1.10 | 2.23 | 2.06 | ||||||||||||
| 1) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
| 2) | Based on net income attributable to owners of the Parent Company. |
The proposed dividend of SEK 2.50 per share was approved by the AGM on March 29, 2022. The dividend will be paid in two equal installments; SEK 1.25 per share was paid out in Q2 and SEK 1.25 per share will be paid out in Q4.
Number of employees
| 2022 | 2021 | |||||||||||||||||||||||
| End of period |
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||||
| South East Asia, Oceania and India |
26,127 | 26,255 | 26,369 | 26,363 | 26,325 | 26,123 | ||||||||||||||||||
| North East Asia |
13,077 | 12,999 | 13,091 | 14,111 | 14,043 | 14,033 | ||||||||||||||||||
| North America |
10,501 | 10,327 | 10,344 | 10,371 | 10,256 | 10,161 | ||||||||||||||||||
| Europe and Latin America1) |
47,240 | 46,994 | 47,064 | 46,903 | 46,616 | 46,482 | ||||||||||||||||||
| Middle East and Africa |
4,514 | 4,492 | 4,454 | 4,455 | 4,384 | 4,314 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
101,459 | 101,067 | 101,322 | 102,203 | 101,624 | 101,113 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 1) Of which in Sweden |
14,564 | 14,195 | 14,183 | 13,908 | 13,626 | 13,379 | ||||||||||||||||||
| 33 Ericsson | Second quarter report 2022 | Accounting policies and Explanatory notes | |
Table of Contents
Alternative performance measures (unaudited)
In this section, the Company presents its Alternative Performance Measures (APMs), which are not recognized measures of financial performance under IFRS. The presentation of APMs has limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS.
APMs are presented to enhance an investor’s evaluation of ongoing operating results, to aid in forecasting future periods and to facilitate meaningful comparison of results between periods.
Management uses these APMs to, among other things, evaluate ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of certain performance-based compensation. APM’s should not be viewed as substitutes for income statement or cash flow items computed in accordance with IFRS.
This section also includes a reconciliation of the APMs to the most directly reconcilable line items in the financial statements. For more information about non-IFRS key operating measures, see Ericsson Annual Report 2021.
Sales growth adjusted for comparable units and currency
Sales growth adjusted for the impact of acquisitions and divestments as well as the effects of foreign currency fluctuations. Also named organic sales.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, year over year change |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Reported net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| Acquired business |
— | — | -124 | -402 | -450 | -225 | ||||||||||||||||||
| Net FX impact |
-5,034 | -4,008 | -385 | 1,196 | 5,455 | 5,341 | ||||||||||||||||||
| Comparable net sales, excluding FX impact |
57,431 | 51,053 | 70,823 | 57,057 | 59,946 | 54,894 | ||||||||||||||||||
| Comparable quarter net sales adj. for acq/div business |
54,941 | 49,778 | 69,590 | 57,472 | 55,578 | 49,750 | ||||||||||||||||||
| Sales growth adjusted for comparable units and currency (%) |
5 | % | 3 | % | 2 | % | -1 | % | 8 | % | 10 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, year over year change |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Reported net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| Acquired business |
— | — | -1,201 | -1,077 | -675 | -225 | ||||||||||||||||||
| Net FX impact |
-9,042 | -4,008 | 11,607 | 11,992 | 10,796 | 5,341 | ||||||||||||||||||
| Comparable net sales, excluding FX impact |
108,484 | 51,053 | 242,720 | 171,897 | 114,840 | 54,894 | ||||||||||||||||||
| Comparable quarter net sales adj. for acq/div business |
104,719 | 49,778 | 232,390 | 162,800 | 105,328 | 49,750 | ||||||||||||||||||
| Sales growth adjusted for comparable units and currency (%) |
4 | % | 3 | % | 4 | % | 6 | % | 9 | % | 10 | % | ||||||||||||
| 34 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Items excluding restructuring charges
Gross income, operating expenses, and EBIT are presented excluding restructuring charges and, for certain measures, as a percentage of net sales.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Gross income |
26,302 | 23,289 | 30,821 | 24,776 | 23,857 | 21,295 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| Gross margin (%) |
42.1 | % | 42.3 | % | 43.2 | % | 44.0 | % | 43.4 | % | 42.8 | % | ||||||||||||
| Gross income |
26,302 | 23,289 | 30,821 | 24,776 | 23,857 | 21,295 | ||||||||||||||||||
| Restructuring charges included in cost of sales |
42 | 2 | 199 | 6 | 6 | 62 | ||||||||||||||||||
| Gross income excluding restructuring charges |
26,344 | 23,291 | 31,020 | 24,782 | 23,863 | 21,357 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| Gross margin excluding restructuring charges (%) |
42.2 | % | 42.3 | % | 43.5 | % | 44.0 | % | 43.4 | % | 42.9 | % | ||||||||||||
| Operating expenses |
-19,365 | -17,473 | -19,384 | -16,359 | -17,352 | -15,976 | ||||||||||||||||||
| Restructuring charges included in R&D expenses |
4 | 33 | 140 | -2 | -1 | — | ||||||||||||||||||
| Restructuring charges included in selling and administrative expenses |
3 | 6 | 124 | 1 | -1 | 15 | ||||||||||||||||||
| Operating expenses excluding restructuring charges |
-19,358 | -17,434 | -19,120 | -16,360 | -17,354 | -15,961 | ||||||||||||||||||
| EBIT |
7,308 | 4,744 | 11,861 | 8,835 | 5,823 | 5,261 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| EBIT margin (%) |
11.7 | % | 8.6 | % | 16.6 | % | 15.7 | % | 10.6 | % | 10.6 | % | ||||||||||||
| EBIT |
7,308 | 4,744 | 11,861 | 8,835 | 5,823 | 5,261 | ||||||||||||||||||
| Total restructuring charges |
49 | 41 | 463 | 5 | 4 | 77 | ||||||||||||||||||
| EBIT excluding restructuring charges |
7,357 | 4,785 | 12,324 | 8,840 | 5,827 | 5,338 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| EBIT margin excluding restructuring charges (%) |
11.8 | % | 8.7 | % | 17.3 | % | 15.7 | % | 10.6 | % | 10.7 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Gross income |
49,591 | 23,289 | 100,749 | 69,928 | 45,152 | 21,295 | ||||||||||||||||||
| Net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| Gross margin (%) |
42.2 | % | 42.3 | % | 43.4 | % | 43.4 | % | 43.1 | % | 42.8 | % | ||||||||||||
| Gross income |
49,591 | 23,289 | 100,749 | 69,928 | 45,152 | 21,295 | ||||||||||||||||||
| Restructuring charges included in cost of sales |
44 | 2 | 273 | 74 | 68 | 62 | ||||||||||||||||||
| Gross income excluding restructuring charges |
49,635 | 23,291 | 101,022 | 70,002 | 45,220 | 21,357 | ||||||||||||||||||
| Net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| Gross margin excluding restructuring charges (%) |
42.2 | % | 42.3 | % | 43.5 | % | 43.5 | % | 43.2 | % | 42.9 | % | ||||||||||||
| Operating expenses |
-36,838 | -17,473 | -69,071 | -49,687 | -33,328 | -15,976 | ||||||||||||||||||
| Restructuring charges included in R&D expenses |
37 | 33 | 137 | -3 | -1 | — | ||||||||||||||||||
| Restructuring charges included in selling and administrative expenses |
9 | 6 | 139 | 15 | 14 | 15 | ||||||||||||||||||
| Operating expenses excluding restructuring charges |
-36,792 | -17,434 | -68,795 | -49,675 | -33,315 | -15,961 | ||||||||||||||||||
| EBIT |
12,052 | 4,744 | 31,780 | 19,919 | 11,084 | 5,261 | ||||||||||||||||||
| Net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| EBIT margin (%) |
10.3 | % | 8.6 | % | 13.7 | % | 12.4 | % | 10.6 | % | 10.6 | % | ||||||||||||
| EBIT |
12,052 | 4,744 | 31,780 | 19,919 | 11,084 | 5,261 | ||||||||||||||||||
| Total restructuring charges |
90 | 41 | 549 | 86 | 81 | 77 | ||||||||||||||||||
| EBIT excluding restructuring charges |
12,142 | 4,785 | 32,329 | 20,005 | 11,165 | 5,338 | ||||||||||||||||||
| Net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| EBIT margin excluding restructuring charges (%) |
10.3 | % | 8.7 | % | 13.9 | % | 12.4 | % | 10.7 | % | 10.7 | % | ||||||||||||
| 35 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges
Earnings before interest, taxes, amortizations, write-downs of acquired intangibles and excluding restructuring charges also expressed as a percentage of net sales.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net income |
4,650 | 2,912 | 10,146 | 5,766 | 3,900 | 3,168 | ||||||||||||||||||
| Income tax |
1,899 | 1,189 | 770 | 2,471 | 1,469 | 1,560 | ||||||||||||||||||
| Financial income and expenses, net |
759 | 643 | 945 | 598 | 454 | 533 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles |
158 | 199 | 436 | 464 | 294 | 283 | ||||||||||||||||||
| EBITA |
7,466 | 4,943 | 12,297 | 9,299 | 6,117 | 5,544 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| EBITA margin (%) |
12.0 | % | 9.0 | % | 17.2 | % | 16.5 | % | 11.1 | % | 11.1 | % | ||||||||||||
| Restructuring charges |
49 | 41 | 463 | 5 | 4 | 77 | ||||||||||||||||||
| EBITA excluding restructuring charges |
7,515 | 4,984 | 12,760 | 9,304 | 6,121 | 5,621 | ||||||||||||||||||
| EBITA margin excluding restructuring charges (%) |
12.0 | % | 9.1 | % | 17.9 | % | 16.5 | % | 11.1 | % | 11.3 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Net income |
7,562 | 2,912 | 22,980 | 12,834 | 7,068 | 3,168 | ||||||||||||||||||
| Income tax |
3,088 | 1,189 | 6,270 | 5,500 | 3,029 | 1,560 | ||||||||||||||||||
| Financial income and expenses, net |
1,402 | 643 | 2,530 | 1,585 | 987 | 533 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles |
357 | 199 | 1,477 | 1,041 | 577 | 283 | ||||||||||||||||||
| EBITA |
12,409 | 4,943 | 33,257 | 20,960 | 11,661 | 5,544 | ||||||||||||||||||
| Net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| EBITA margin (%) |
10.6 | % | 9.0 | % | 14.3 | % | 13.0 | % | 11.1 | % | 11.1 | % | ||||||||||||
| Restructuring charges |
90 | 41 | 549 | 86 | 81 | 77 | ||||||||||||||||||
| EBITA excluding restructuring charges |
12,499 | 4,984 | 33,806 | 21,046 | 11,742 | 5,621 | ||||||||||||||||||
| EBITA margin excluding restructuring charges (%) |
10.6 | % | 9.1 | % | 14.6 | % | 13.1 | % | 11.2 | % | 11.3 | % | ||||||||||||
Rolling four quarters of net sales and EBIT margin excluding restructuring charges (%)
Net sales, EBIT margin and restructuring charges as a sum of last four quarters.
| 2022 | 2021 | |||||||||||||||||||||||
| Rolling four quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net sales |
245,121 | 237,597 | 232,314 | 230,572 | 231,781 | 232,418 | ||||||||||||||||||
| EBIT |
32,748 | 31,263 | 31,780 | 30,927 | 30,735 | 28,763 | ||||||||||||||||||
| Restructuring charges |
558 | 513 | 549 | 78 | 403 | 1,082 | ||||||||||||||||||
| EBIT excl.restr. charges |
33,306 | 31,776 | 32,329 | 31,005 | 31,138 | 29,845 | ||||||||||||||||||
| EBIT margin excl.restr. charges (%) |
13.6 | % | 13.4 | % | 13.9 | % | 13.4 | % | 13.4 | % | 12.8 | % | ||||||||||||
| 36 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Gross cash and net cash, end of period
Gross cash: Cash and cash equivalents plus interest-bearing securities (current and non-current).
Net cash: Cash and cash equivalents plus interest-bearing securities (current and non-current) less borrowings (current and non-current).
| 2022 | 2021 | |||||||||||||||||||||||
| SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Cash and cash equivalents |
93,618 | 76,856 | 54,050 | 46,476 | 43,273 | 40,543 | ||||||||||||||||||
| + Interest-bearing securities, current |
3,715 | 12,292 | 12,932 | 15,016 | 12,855 | 4,599 | ||||||||||||||||||
| + Interest-bearing securities, non-current |
3,061 | 15,022 | 30,626 | 26,668 | 20,998 | 23,477 | ||||||||||||||||||
| Gross cash, end of period |
100,394 | 104,170 | 97,608 | 88,160 | 77,126 | 68,619 | ||||||||||||||||||
| -Borrowings, current |
3,686 | 10,403 | 9,590 | 10,155 | 11,737 | 2,353 | ||||||||||||||||||
| -Borrowings, non-current |
26,363 | 28,599 | 22,241 | 22,282 | 21,673 | 23,299 | ||||||||||||||||||
| Net cash, end of period |
70,345 | 65,168 | 65,777 | 55,723 | 43,716 | 42,967 | ||||||||||||||||||
Total assets less non-interest-bearing provisions and liabilities.
| 2022 | 2021 | |||||||||||||||||||||||
| SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Total assets |
332,453 | 323,935 | 305,614 | 290,527 | 281,045 | 270,319 | ||||||||||||||||||
| Non-interest-bearing provisions and liabilities |
||||||||||||||||||||||||
| Provisions, non-current |
4,020 | 4,498 | 3,722 | 2,471 | 1,922 | 2,337 | ||||||||||||||||||
| Deferred tax liabilities |
1,250 | 1,012 | 884 | 909 | 975 | 1,049 | ||||||||||||||||||
| Other non-current liabilities |
762 | 1,070 | 1,587 | 1,605 | 1,596 | 1,326 | ||||||||||||||||||
| Provisions, current |
5,648 | 5,699 | 5,782 | 6,342 | 7,310 | 8,708 | ||||||||||||||||||
| Contract liabilities |
41,547 | 39,875 | 32,834 | 33,869 | 36,621 | 32,054 | ||||||||||||||||||
| Trade payables |
39,539 | 35,316 | 35,684 | 31,877 | 29,638 | 29,135 | ||||||||||||||||||
| Current tax liabilities |
6,703 | 5,701 | 2,917 | 5,409 | 4,676 | 4,761 | ||||||||||||||||||
| Other current liabilities |
40,346 | 41,919 | 37,921 | 36,025 | 32,477 | 35,761 | ||||||||||||||||||
| Capital employed |
192,638 | 188,845 | 184,283 | 172,020 | 165,830 | 155,188 | ||||||||||||||||||
Annualized net sales divided by average capital employed.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net sales |
62,465 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| Annualized net sales |
249,860 | 220,244 | 285,328 | 225,052 | 219,764 | 199,112 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
188,845 | 184,283 | 172,020 | 165,830 | 155,188 | 161,990 | ||||||||||||||||||
| Capital employed at end of period |
192,638 | 188,845 | 184,283 | 172,020 | 165,830 | 155,188 | ||||||||||||||||||
| Average capital employed |
190,742 | 186,564 | 178,152 | 168,925 | 160,509 | 158,589 | ||||||||||||||||||
| Capital turnover (times) |
1.3 | 1.2 | 1.6 | 1.3 | 1.4 | 1.3 | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Net sales |
117,526 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| Annualized net sales |
235,052 | 220,244 | 232,314 | 214,643 | 209,438 | 199,112 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
184,283 | 184,283 | 161,990 | 161,990 | 161,990 | 161,990 | ||||||||||||||||||
| Capital employed at end of period |
192,638 | 188,845 | 184,283 | 172,020 | 165,830 | 155,188 | ||||||||||||||||||
| Average capital employed |
188,461 | 186,564 | 173,137 | 167,005 | 163,910 | 158,589 | ||||||||||||||||||
| Capital turnover (times) |
1.2 | 1.2 | 1.3 | 1.3 | 1.3 | 1.3 | ||||||||||||||||||
| 37 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
The annualized total of EBIT as a percentage of average capital employed.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| EBIT |
7,308 | 4,744 | 11,861 | 8,835 | 5,823 | 5,261 | ||||||||||||||||||
| Annualized EBIT |
29,232 | 18,976 | 47,444 | 35,340 | 23,292 | 21,044 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
188,845 | 184,283 | 172,020 | 165,830 | 155,188 | 161,990 | ||||||||||||||||||
| Capital employed at end of period |
192,638 | 188,845 | 184,283 | 172,020 | 165,830 | 155,188 | ||||||||||||||||||
| Average capital employed |
190,742 | 186,564 | 178,152 | 168,925 | 160,509 | 158,589 | ||||||||||||||||||
| Return on capital employed (%) |
15.3 | % | 10.2 | % | 26.6 | % | 20.9 | % | 14.5 | % | 13.3 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| EBIT |
12,052 | 4,744 | 31,780 | 19,919 | 11,084 | 5,261 | ||||||||||||||||||
| Annualized EBIT |
24,104 | 18,976 | 31,780 | 26,559 | 22,168 | 21,044 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
184,283 | 184,283 | 161,990 | 161,990 | 161,990 | 161,990 | ||||||||||||||||||
| Capital employed at end of period |
192,638 | 188,845 | 184,283 | 172,020 | 165,830 | 155,188 | ||||||||||||||||||
| Average capital employed |
188,461 | 186,564 | 173,137 | 167,005 | 163,910 | 158,589 | ||||||||||||||||||
| Return on capital employed (% ) |
12.8 | % | 10.2 | % | 18.4 | % | 15.9 | % | 13.5 | % | 13.3 | % | ||||||||||||
Equity expressed as a percentage of total assets.
| 2022 | 2021 | |||||||||||||||||||||||
| SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Total equity |
127,799 | 109,879 | 107,099 | 95,628 | 91,695 | 88,124 | ||||||||||||||||||
| Total assets |
332,453 | 323,935 | 305,614 | 290,527 | 281,045 | 270,319 | ||||||||||||||||||
| Equity ratio (% ) |
38.4 | % | 33.9 | % | 35.0 | % | 32.9 | % | 32.6 | % | 32.6 | % | ||||||||||||
Annualized net income attributable to owners of the Parent Company as a percentage of average stockholders’ equity.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net income attributable to owners of the Parent Company |
4,504 | 2,940 | 10,076 | 5,752 | 3,679 | 3,187 | ||||||||||||||||||
| Annualized |
18,016 | 11,760 | 40,304 | 23,008 | 14,716 | 12,748 | ||||||||||||||||||
| Average stockholders’ equity |
||||||||||||||||||||||||
| Stockholders’ equity, beginning of period |
111,701 | 108,775 | 97,323 | 93,331 | 89,782 | 86,674 | ||||||||||||||||||
| Stockholders’ equity, end of period |
129,620 | 111,701 | 108,775 | 97,323 | 93,331 | 89,782 | ||||||||||||||||||
| Average stockholders’ equity |
120,661 | 110,238 | 103,049 | 95,327 | 91,557 | 88,228 | ||||||||||||||||||
| Return on equity (%) |
14.9 | % | 10.7 | % | 39.1 | % | 24.1 | % | 16.1 | % | 14.4 | % | ||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Net income attributable to owners of the Parent Company |
7,444 | 2,940 | 22,694 | 12,618 | 6,866 | 3,187 | ||||||||||||||||||
| Annualized |
14,888 | 11,760 | 22,694 | 16,824 | 13,732 | 12,748 | ||||||||||||||||||
| Average stockholders’ equity |
||||||||||||||||||||||||
| Stockholders’ equity, beginning of period |
108,775 | 108,775 | 86,674 | 86,674 | 86,674 | 86,674 | ||||||||||||||||||
| Stockholders’ equity, end of period |
129,620 | 111,701 | 108,775 | 97,323 | 93,331 | 89,782 | ||||||||||||||||||
| Average stockholders’ equity |
119,198 | 110,238 | 97,725 | 91,999 | 90,003 | 88,228 | ||||||||||||||||||
| Return on equity (%) |
12.5 | % | 10.7 | % | 23.2 | % | 18.3 | % | 15.3 | % | 14.4 | % | ||||||||||||
| 38 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Adjusted earnings per share, diluted, excluding amortizations and write-downs of acquired intangible assets and excluding restructuring charges.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Earnings per share, diluted |
1.35 | 0.88 | 3.02 | 1.73 | 1.10 | 0.96 | ||||||||||||||||||
| Restructuring charges |
0.01 | 0.01 | 0.11 | 0.00 | 0.00 | 0.02 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles |
0.03 | 0.05 | 0.10 | 0.09 | 0.07 | 0.06 | ||||||||||||||||||
| Adjusted earnings per share |
1.39 | 0.94 | 3.23 | 1.82 | 1.17 | 1.04 | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Earnings per share, diluted |
2.23 | 0.88 | 6.81 | 3.79 | 2.06 | 0.96 | ||||||||||||||||||
| Restructuring charges |
0.02 | 0.01 | 0.13 | 0.02 | 0.02 | 0.02 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles |
0.08 | 0.05 | 0.32 | 0.22 | 0.13 | 0.06 | ||||||||||||||||||
| Adjusted earnings per share |
2.33 | 0.94 | 7.26 | 4.03 | 2.21 | 1.04 | ||||||||||||||||||
Free cash flow before M&A / Free cash flow after M&A
Free cash flow before M&A: Cash flow from operating activities less net capital expenditures, other investments (excluding M&A) and repayment of lease liabilities.
Free cash flow after M&A: Cash flow from operating activities less net capital expenditures, other investments and repayment of lease liabilities.
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Cash flow from operating activities |
6,287 | 30 | 15,196 | 14,724 | 5,940 | 3,205 | ||||||||||||||||||
| Net capital expenditures and other investments (excl M&A) |
||||||||||||||||||||||||
| Investments in property, plant and equipment |
-1,053 | -818 | -701 | -1,040 | -1,007 | -915 | ||||||||||||||||||
| Sales of property, plant and equipment |
61 | 38 | 34 | 40 | 17 | 24 | ||||||||||||||||||
| Product development |
-301 | -288 | -302 | -190 | -266 | -204 | ||||||||||||||||||
| Other investments1) |
23 | -27 | -122 | -4 | — | -5 | ||||||||||||||||||
| Repayment of lease liabilities |
-577 | -593 | -623 | -580 | -617 | -548 | ||||||||||||||||||
| Free cash flow before M&A |
4,440 | -1,658 | 13,482 | 12,950 | 4,067 | 1,557 | ||||||||||||||||||
| Acquisitions/divestments of subs and other operations, net |
123 | 46 | 178 | -55 | -69 | 5 | ||||||||||||||||||
| Free cash flow after M&A |
4,563 | -1,612 | 13,660 | 12,895 | 3,998 | 1,562 | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Cash flow from operating activities |
6,317 | 30 | 39,065 | 23,869 | 9,145 | 3,205 | ||||||||||||||||||
| Net capital expenditures and other investments (excl M&A) |
||||||||||||||||||||||||
| Investments in property, plant and equipment |
-1,871 | -818 | -3,663 | -2,962 | -1,922 | -915 | ||||||||||||||||||
| Sales of property, plant and equipment |
99 | 38 | 115 | 81 | 41 | 24 | ||||||||||||||||||
| Product development |
-589 | -288 | -962 | -660 | -470 | -204 | ||||||||||||||||||
| Other investments1) |
-4 | -27 | -131 | -9 | -5 | -5 | ||||||||||||||||||
| Repayment of lease liabilities |
-1,170 | -593 | -2,368 | -1,745 | -1,165 | -548 | ||||||||||||||||||
| Free cash flow before M&A |
2,782 | -1,658 | 32,056 | 18,574 | 5,624 | 1,557 | ||||||||||||||||||
| Acquisitions/divestments of subs and other operations, net |
169 | 46 | 59 | -119 | -64 | 5 | ||||||||||||||||||
| Free cash flow after M&A |
2,951 | -1,612 | 32,115 | 18,455 | 5,560 | 1,562 | ||||||||||||||||||
| 1) | Other investments is part of the line item Other investing activities in the Consolidated cash flow statement. The differences are movements in other interest-bearing assets and the cash flow hedge reserve gain, which are not to be part of the definition of Free cash flow. |
| 39 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Sales growth by segment adjusted for comparable units and currency
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarter, year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
6 | % | 4 | % | 3 | % | 0 | % | 11 | % | 15 | % | ||||||||||||
| Digital Services |
2 | % | -2 | % | 0 | % | 1 | % | 0 | % | 3 | % | ||||||||||||
| Managed Services |
0 | % | -5 | % | -8 | % | -7 | % | -2 | % | -8 | % | ||||||||||||
| Emerging Business and Other |
7 | % | 15 | % | 16 | % | 4 | % | 13 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
5 | % | 3 | % | 2 | % | -1 | % | 8 | % | 10 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
5 | % | 4 | % | 7 | % | 8 | % | 13 | % | 15 | % | ||||||||||||
| Digital Services |
0 | % | -2 | % | 1 | % | 1 | % | 1 | % | 3 | % | ||||||||||||
| Managed Services |
-2 | % | -5 | % | -6 | % | -5 | % | -5 | % | -8 | % | ||||||||||||
| Emerging Business and Other |
11 | % | 15 | % | 11 | % | 9 | % | 11 | % | 9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
4 | % | 3 | % | 4 | % | 6 | % | 9 | % | 10 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sales growth by market area adjusted for comparable units and currency
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarter, year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
6 | % | -17 | % | -13 | % | -16 | % | 14 | % | 21 | % | ||||||||||||
| North East Asia |
-1 | % | -20 | % | -22 | % | -33 | % | 1 | % | 78 | % | ||||||||||||
| North America |
12 | % | 9 | % | 15 | % | 13 | % | 11 | % | 10 | % | ||||||||||||
| Europe and Latin America |
4 | % | 15 | % | 12 | % | 9 | % | 14 | % | 12 | % | ||||||||||||
| Middle East and Africa |
8 | % | -9 | % | 5 | % | -8 | % | -10 | % | -16 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
5 | % | 3 | % | 2 | % | -1 | % | 8 | % | 10 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| South East Asia, Oceania and India |
-5 | % | -17 | % | -1 | % | 4 | % | 17 | % | 21 | % | ||||||||||||
| North East Asia |
-10 | % | -20 | % | -8 | % | 1 | % | 27 | % | 78 | % | ||||||||||||
| North America |
10 | % | 9 | % | 12 | % | 11 | % | 11 | % | 10 | % | ||||||||||||
| Europe and Latin America |
9 | % | 15 | % | 12 | % | 12 | % | 13 | % | 12 | % | ||||||||||||
| Middle East and Africa |
0 | % | -9 | % | -7 | % | -12 | % | -13 | % | -16 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
4 | % | 3 | % | 4 | % | 6 | % | 9 | % | 10 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 40 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Gross margin by segment by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
45.1 | % | 44.7 | % | 46.3 | % | 47.8 | % | 47.9 | % | 46.1 | % | ||||||||||||
| Digital Services |
39.9 | % | 42.9 | % | 42.8 | % | 42.2 | % | 37.9 | % | 43.5 | % | ||||||||||||
| Managed Services |
23.0 | % | 23.2 | % | 18.2 | % | 18.7 | % | 19.0 | % | 19.4 | % | ||||||||||||
| Emerging Business and Other |
35.8 | % | 38.1 | % | 34.9 | % | 39.4 | % | 37.9 | % | 36.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
42.1 | % | 42.3 | % | 43.2 | % | 44.0 | % | 43.4 | % | 42.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
44.9 | % | 44.7 | % | 47.0 | % | 47.3 | % | 47.0 | % | 46.1 | % | ||||||||||||
| Digital Services |
41.3 | % | 42.9 | % | 41.7 | % | 41.2 | % | 40.5 | % | 43.5 | % | ||||||||||||
| Managed Services |
23.1 | % | 23.2 | % | 18.8 | % | 19.0 | % | 19.2 | % | 19.4 | % | ||||||||||||
| Emerging Business and Other |
36.9 | % | 38.1 | % | 37.2 | % | 38.0 | % | 37.3 | % | 36.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
42.2 | % | 42.3 | % | 43.4 | % | 43.4 | % | 43.1 | % | 42.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBIT margin by segment by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
19.2 | % | 16.6 | % | 23.0 | % | 23.7 | % | 21.7 | % | 20.0 | % | ||||||||||||
| Digital Services |
-15.3 | % | -19.7 | % | 2.4 | % | -9.5 | % | -19.9 | % | -22.0 | % | ||||||||||||
| Managed Services |
11.2 | % | 12.0 | % | 6.6 | % | 7.7 | % | 8.1 | % | 6.4 | % | ||||||||||||
| Emerging Business and Other |
-33.1 | % | -53.8 | % | -25.8 | % | -17.7 | % | -81.1 | % | -44.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
11.7 | % | 8.6 | % | 16.6 | % | 15.7 | % | 10.6 | % | 10.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
18.0 | % | 16.6 | % | 22.2 | % | 21.9 | % | 20.9 | % | 20.0 | % | ||||||||||||
| Digital Services |
-17.3 | % | -19.7 | % | -10.0 | % | -16.7 | % | -20.9 | % | -22.0 | % | ||||||||||||
| Managed Services |
11.6 | % | 12.0 | % | 7.2 | % | 7.4 | % | 7.3 | % | 6.4 | % | ||||||||||||
| Emerging Business and Other |
-43.0 | % | -53.8 | % | -42.2 | % | -48.2 | % | -64.3 | % | -44.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
10.3 | % | 8.6 | % | 13.7 | % | 12.4 | % | 10.6 | % | 10.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 41 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Restructuring charges by function
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Cost of sales |
-42 | -2 | -199 | -6 | -6 | -62 | ||||||||||||||||||
| Research and development expenses |
-4 | -33 | -140 | 2 | 1 | 0 | ||||||||||||||||||
| Selling and administrative expenses |
-3 | -6 | -124 | -1 | 1 | -15 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-49 | -41 | -463 | -5 | -4 | -77 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Cost of sales |
-44 | -2 | -273 | -74 | -68 | -62 | ||||||||||||||||||
| Research and development expenses |
-37 | -33 | -137 | 3 | 1 | 0 | ||||||||||||||||||
| Selling and administrative expenses |
-9 | -6 | -139 | -15 | -14 | -15 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-90 | -41 | -549 | -86 | -81 | -77 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring charges by segment
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
-45 | -10 | -278 | 1 | -9 | 24 | ||||||||||||||||||
| of which cost of sales |
-44 | -10 | -77 | 1 | -1 | 24 | ||||||||||||||||||
| of which operating expenses |
-1 | 0 | -201 | 0 | -8 | 0 | ||||||||||||||||||
| Digital Services |
-2 | -33 | -115 | -4 | -3 | -8 | ||||||||||||||||||
| of which cost of sales |
0 | 0 | -76 | -6 | -2 | -3 | ||||||||||||||||||
| of which operating expenses |
-2 | -33 | -39 | 2 | -1 | -5 | ||||||||||||||||||
| Managed Services |
2 | 8 | -43 | -1 | -1 | -79 | ||||||||||||||||||
| of which cost of sales |
2 | 8 | -40 | -1 | 0 | -79 | ||||||||||||||||||
| of which operating expenses |
0 | 0 | -3 | 0 | -1 | 0 | ||||||||||||||||||
| Emerging Business and Other |
-4 | -6 | -27 | -1 | 9 | -14 | ||||||||||||||||||
| of which cost of sales |
0 | 0 | -6 | 0 | -3 | -4 | ||||||||||||||||||
| of which operating expenses |
-4 | -6 | -21 | -1 | 12 | -10 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-49 | -41 | -463 | -5 | -4 | -77 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
-55 | -10 | -262 | 16 | 15 | 24 | ||||||||||||||||||
| of which cost of sales |
-54 | -10 | -53 | 24 | 23 | 24 | ||||||||||||||||||
| of which operating expenses |
-1 | 0 | -209 | -8 | -8 | 0 | ||||||||||||||||||
| Digital Services |
-35 | -33 | -130 | -15 | -11 | -8 | ||||||||||||||||||
| of which cost of sales |
0 | 0 | -87 | -11 | -5 | -3 | ||||||||||||||||||
| of which operating expenses |
-35 | -33 | -43 | -4 | -6 | -5 | ||||||||||||||||||
| Managed Services |
10 | 8 | -124 | -81 | -80 | -79 | ||||||||||||||||||
| of which cost of sales |
10 | 8 | -120 | -80 | -79 | -79 | ||||||||||||||||||
| of which operating expenses |
0 | 0 | -4 | -1 | -1 | 0 | ||||||||||||||||||
| Emerging Business and Other |
-10 | -6 | -33 | -6 | -5 | -14 | ||||||||||||||||||
| of which cost of sales |
0 | 0 | -13 | -7 | -7 | -4 | ||||||||||||||||||
| of which operating expenses |
-10 | -6 | -20 | 1 | 2 | -10 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-90 | -41 | -549 | -86 | -81 | -77 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 42 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
Gross income and gross margin excluding restructuring charges by segment
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
20,779 | 18,221 | 23,720 | 19,400 | 19,112 | 16,690 | ||||||||||||||||||
| Digital Services |
3,460 | 3,097 | 5,532 | 3,650 | 2,992 | 3,005 | ||||||||||||||||||
| Managed Services |
1,245 | 1,140 | 1,014 | 945 | 975 | 1,021 | ||||||||||||||||||
| Emerging Business and Other |
860 | 833 | 754 | 787 | 784 | 641 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
26,344 | 23,291 | 31,020 | 24,782 | 23,863 | 21,357 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
45.2 | % | 44.8 | % | 46.4 | % | 47.8 | % | 47.9 | % | 46.0 | % | ||||||||||||
| Digital Services |
39.9 | % | 42.9 | % | 43.4 | % | 42.3 | % | 37.9 | % | 43.6 | % | ||||||||||||
| Managed Services |
23.0 | % | 23.0 | % | 18.9 | % | 18.7 | % | 19.0 | % | 21.0 | % | ||||||||||||
| Emerging Business and Other |
35.8 | % | 38.1 | % | 35.2 | % | 39.4 | % | 38.1 | % | 36.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
42.2 | % | 42.3 | % | 43.5 | % | 44.0 | % | 43.4 | % | 42.9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
39,000 | 18,221 | 78,922 | 55,202 | 35,802 | 16,690 | ||||||||||||||||||
| Digital Services |
6,557 | 3,097 | 15,179 | 9,647 | 5,997 | 3,005 | ||||||||||||||||||
| Managed Services |
2,385 | 1,140 | 3,955 | 2,941 | 1,996 | 1,021 | ||||||||||||||||||
| Emerging Business and Other |
1,693 | 833 | 2,966 | 2,212 | 1,425 | 641 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
49,635 | 23,291 | 101,022 | 70,002 | 45,220 | 21,357 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
45.0 | % | 44.8 | % | 47.0 | % | 47.3 | % | 47.0 | % | 46.0 | % | ||||||||||||
| Digital Services |
41.3 | % | 42.9 | % | 42.0 | % | 41.2 | % | 40.6 | % | 43.6 | % | ||||||||||||
| Managed Services |
23.0 | % | 23.0 | % | 19.4 | % | 19.6 | % | 20.0 | % | 21.0 | % | ||||||||||||
| Emerging Business and Other |
36.9 | % | 38.1 | % | 37.3 | % | 38.1 | % | 37.5 | % | 36.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
42.2 | % | 42.3 | % | 43.5 | % | 43.5 | % | 43.2 | % | 42.9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 43 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
EBIT and EBIT margin excluding restructuring charges by segment
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
8,867 | 6,757 | 12,035 | 9,623 | 8,653 | 7,217 | ||||||||||||||||||
| Digital Services |
-1,321 | -1,385 | 419 | -818 | -1,565 | -1,510 | ||||||||||||||||||
| Managed Services |
603 | 584 | 396 | 387 | 417 | 392 | ||||||||||||||||||
| Emerging Business and Other |
-792 | -1,171 | -526 | -352 | -1,678 | -761 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
7,357 | 4,785 | 12,324 | 8,840 | 5,827 | 5,338 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
19.3 | % | 16.6 | % | 23.6 | % | 23.7 | % | 21.7 | % | 19.9 | % | ||||||||||||
| Digital Services |
-15.3 | % | -19.2 | % | 3.3 | % | -9.5 | % | -19.8 | % | -21.9 | % | ||||||||||||
| Managed Services |
11.1 | % | 11.8 | % | 7.4 | % | 7.7 | % | 8.1 | % | 8.1 | % | ||||||||||||
| Emerging Business and Other |
-32.9 | % | -53.5 | % | -24.5 | % | -17.6 | % | -81.5 | % | -43.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
11.8 | % | 8.7 | % | 17.3 | % | 15.7 | % | 10.6 | % | 10.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
15,624 | 6,757 | 37,528 | 25,493 | 15,870 | 7,217 | ||||||||||||||||||
| Digital Services |
-2,706 | -1,385 | -3,474 | -3,893 | -3,075 | -1,510 | ||||||||||||||||||
| Managed Services |
1,187 | 584 | 1,592 | 1,196 | 809 | 392 | ||||||||||||||||||
| Emerging Business and Other |
-1,963 | -1,171 | -3,317 | -2,791 | -2,439 | -761 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
12,142 | 4,785 | 32,329 | 20,005 | 11,165 | 5,338 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
18.0 | % | 16.6 | % | 22.4 | % | 21.8 | % | 20.8 | % | 19.9 | % | ||||||||||||
| Digital Services |
-17.0 | % | -19.2 | % | -9.6 | % | -16.6 | % | -20.8 | % | -21.9 | % | ||||||||||||
| Managed Services |
11.5 | % | 11.8 | % | 7.8 | % | 8.0 | % | 8.1 | % | 8.1 | % | ||||||||||||
| Emerging Business and Other |
-42.7 | % | -53.5 | % | -41.7 | % | -48.1 | % | -64.2 | % | -43.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
10.3 | % | 8.7 | % | 13.9 | % | 12.4 | % | 10.7 | % | 10.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Rolling four quarters of net sales by segment
| 2022 |
2021 | |||||||||||
| Rolling four quarters, SEK million |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 | ||||||
| Networks |
178,384 | 172,276 | 167,838 | 166,107 | 167,174 | 167,126 | ||||||
| Digital Services |
37,242 | 36,467 | 36,151 | 36,086 | 36,189 | 36,877 | ||||||
| Managed Services |
20,757 | 20,460 | 20,379 | 20,840 | 21,297 | 21,751 | ||||||
| Emerging Business and Other |
8,738 | 8,394 | 7,946 | 7,539 | 7,121 | 6,664 | ||||||
|
|
|
|
|
|
| |||||||
| Total |
245,121 | 237,597 | 232,314 | 230,572 | 231,781 | 232,418 | ||||||
|
|
|
|
|
|
| |||||||
Rolling four quarters of EBIT margin excluding restructuring charges by segment (%)
| 2022 | 2021 | |||||||||||||||||||||||
| Rolling four quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
20.9 | % | 21.5 | % | 22.4 | % | 21.7 | % | 21.5 | % | 19.7 | % | ||||||||||||
| Digital Services |
-8.3 | % | -9.2 | % | -9.6 | % | -9.4 | % | -8.5 | % | -6.1 | % | ||||||||||||
| Managed Services |
9.5 | % | 8.7 | % | 7.8 | % | 7.7 | % | 8.0 | % | 7.2 | % | ||||||||||||
| Emerging Business and Other |
-32.5 | % | -44.4 | % | -41.7 | % | -43.8 | % | -47.9 | % | -35.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
13.6 | % | 13.4 | % | 13.9 | % | 13.4 | % | 13.4 | % | 12.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 44 Ericsson | Second quarter report 2022 | Alternative performance measures | |
Table of Contents
EBITA and EBITA margin by segment by quarter
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
8,850 | 6,775 | 11,787 | 9,643 | 8,679 | 7,274 | ||||||||||||||||||
| Digital Services |
-1,306 | -1,369 | 569 | -701 | -1,445 | -1,400 | ||||||||||||||||||
| Managed Services |
611 | 597 | 359 | 396 | 417 | 314 | ||||||||||||||||||
| Emerging Business and Other |
-689 | -1,060 | -418 | -39 | -1,534 | -644 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
7,466 | 4,943 | 12,297 | 9,299 | 6,117 | 5,544 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
19.2 | % | 16.6 | % | 23.1 | % | 23.8 | % | 21.8 | % | 20.1 | % | ||||||||||||
| Digital Services |
-15.1 | % | -19.0 | % | 4.5 | % | -8.1 | % | -18.3 | % | -20.3 | % | ||||||||||||
| Managed Services |
11.3 | % | 12.1 | % | 6.7 | % | 7.9 | % | 8.1 | % | 6.5 | % | ||||||||||||
| Emerging Business and Other |
-28.7 | % | -48.4 | % | -19.5 | % | -2.0 | % | -74.5 | % | -37.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
12.0 | % | 9.0 | % | 17.2 | % | 16.5 | % | 11.1 | % | 11.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
15,625 | 6,775 | 37,383 | 25,596 | 15,953 | 7,274 | ||||||||||||||||||
| Digital Services |
-2,675 | -1,369 | -2,977 | -3,546 | -2,845 | -1,400 | ||||||||||||||||||
| Managed Services |
1,208 | 597 | 1,486 | 1,127 | 731 | 314 | ||||||||||||||||||
| Emerging Business and Other |
-1,749 | -1,060 | -2,635 | -2,217 | -2,178 | -644 | ||||||||||||||||||
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| Total |
12,409 | 4,943 | 33,257 | 20,960 | 11,661 | 5,544 | ||||||||||||||||||
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| 2022 | 2021 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
18.0 | % | 16.6 | % | 22.3 | % | 21.9 | % | 20.9 | % | 20.1 | % | ||||||||||||
| Digital Services |
-16.8 | % | -19.0 | % | -8.2 | % | -15.1 | % | -19.2 | % | -20.3 | % | ||||||||||||
| Managed Services |
11.7 | % | 12.1 | % | 7.3 | % | 7.5 | % | 7.3 | % | 6.5 | % | ||||||||||||
| Emerging Business and Other |
-38.1 | % | -48.4 | % | -33.2 | % | -38.2 | % | -57.3 | % | -37.0 | % | ||||||||||||
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| Total |
10.6 | % | 9.0 | % | 14.3 | % | 13.0 | % | 11.1 | % | 11.1 | % | ||||||||||||
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| Q2 | Jan-Jun | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Days sales outstanding |
— | — | 83 | 94 | ||||||||||||
| Inventory turnover days |
112 | 89 | 112 | 90 | ||||||||||||
| Payable days |
94 | 86 | 101 | 94 | ||||||||||||
| 45 Ericsson | Second quarter report 2022 | Alternative performance measures | |