Ericsson Lm Telephone Co 6-K, filed Jul 14, 2023
Ericsson Lm Telephone Co (ERIC)
About this 6-K
Ericsson Lm Telephone Co filed this 6-K on July 14, 2023.
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, 2023
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, 2023 regarding “Second quarter report 2023”.
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, 2023
Table of Contents
Second quarter report 2023
Stockholm, July 14, 2023
Second quarter highlights – In line with expectations
| • | Group organic sales1 declined by -9% YoY. Segment Networks sales1 declined by -13%, while segment Enterprise sales1 grew by 20%. Reported sales was SEK 64.4 (62.5) b. |
| • | The sharp decline in sales in North America was partly offset by strong sales development in India. |
| • | Gross income excluding restructuring charges decreased to SEK 24.7 (26.3) b. as a result of lower sales and margins in Networks. Gross income increased in Enterprise, mainly driven by the consolidation of Vonage. Reported gross income was SEK 24.1 (26.3) b. |
| • | Gross margin excluding restructuring charges was 38.3% (42.2%) primarily impacted by changed business mix in Networks. Reported gross margin was 37.4% (42.1%). |
| • | EBITA excluding restructuring charges amounted to SEK 3.7 (7.5) b. with an EBITA margin of 5.7% (12.0%). Reported EBITA was SEK 0.5 (7.5) b. with restructuring charges amounting to SEK -3.1 (0.0) b. |
| • | Net loss was SEK -0.6 (4.7) b. primarily due to restructuring charges. EPS diluted was SEK -0.21 (1.35). |
| • | Free cash flow before M&A was SEK -5.0 (4.4) b., impacted by lower EBIT, payment to U.S. Department of Justice (DOJ) and increased working capital. Net cash on June 30, 2023, was SEK 1.9 b. compared with SEK 13.6 b. on March 31, 2023. |
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
Q1 2023 |
QoQ change |
Jan-Jun 2023 |
Jan-Jun 2022 |
YoY change |
||||||||||||||||||||||||
| Net sales |
64.4 | 62.5 | 3 | % | 62.6 | 3 | % | 127.0 | 117.5 | 8 | % | |||||||||||||||||||||
| Sales growth adj. for comparable units and currency ² |
— | — | -9 | % | — | — | — | — | -5 | % | ||||||||||||||||||||||
| Gross margin ² |
37.4 | % | 42.1 | % | — | 38.6 | % | — | 38.0 | % | 42.2 | % | — | |||||||||||||||||||
| EBIT |
-0.3 | 7.3 | — | 3.0 | — | 2.7 | 12.1 | -77 | % | |||||||||||||||||||||||
| EBIT margin ² |
-0.5 | % | 11.7 | % | — | 4.9 | % | — | 2.2 | % | 10.3 | % | — | |||||||||||||||||||
| EBITA ² |
0.5 | 7.5 | -93 | % | 3.8 | -86 | % | 4.4 | 12.4 | -65 | % | |||||||||||||||||||||
| EBITA margin ² |
0.8 | % | 12.0 | % | — | 6.2 | % | — | 3.5 | % | 10.6 | % | — | |||||||||||||||||||
| Net income (loss) |
-0.6 | 4.7 | — | 1.6 | — | 1.0 | 7.6 | -87 | % | |||||||||||||||||||||||
| EPS diluted, SEK |
-0.21 | 1.35 | — | 0.45 | — | 0.25 | 2.23 | -89 | % | |||||||||||||||||||||||
| Measures excl. restructuring charges ² |
||||||||||||||||||||||||||||||||
| Gross margin excluding restructuring charges |
38.3 | % | 42.2 | % | — | 39.8 | % | — | 39.0 | % | 42.2 | % | — | |||||||||||||||||||
| EBIT excluding restructuring charges |
2.8 | 7.4 | -62 | % | 4.0 | -30 | % | 6.8 | 12.1 | -44 | % | |||||||||||||||||||||
| EBIT margin excluding restructuring charges |
4.4 | % | 11.8 | % | — | 6.4 | % | — | 5.4 | % | 10.3 | % | — | |||||||||||||||||||
| EBITA excluding restructuring charges |
3.7 | 7.5 | -51 | % | 4.8 | -24 | % | 8.5 | 12.5 | -32 | % | |||||||||||||||||||||
| EBITA margin excluding restructuring charges |
5.7 | % | 12.0 | % | — | 7.7 | % | — | 6.7 | % | 10.6 | % | — | |||||||||||||||||||
| Free cash flow before M & A |
-5.0 | 4.4 | — | -8.0 | — | -13.0 | 2.8 | — | ||||||||||||||||||||||||
| Net cash, end of period |
1.9 | 70.3 | -97 | % | 13.6 | -86 | % | 1.9 | 70.3 | -97 | % | |||||||||||||||||||||
| 1 | Sales adjusted for comparable units and currency |
| 2 | Non-IFRS financial measures are reconciled at the end of this report to the most directly comparable IFRS measures. |
| 1 Ericsson | Second quarter report 2023 | ||
Table of Contents
CEO comments
|
Building on our strong position and despite challenging market conditions we delivered a solid quarter – meeting expectations. We continue to execute with discipline and focus without losing sight of the long term. We are leveraging our 5G technology, growing our enterprise business and driving our cultural transformation | |
| to accelerate our growth trajectory and shape the communications industry landscape. | ||
Q2 in line with our expectations
Performance in Q2 was in line with our expectations, despite the uncertain macro backdrop and significant changes in market mix. This is a testament to our strategy, the excellence of our portfolio, and our ability to adapt and execute.
Group organic sales declined by -9%, as a Networks decline of -13% was partly mitigated by a 20% organic growth in Enterprise. Group EBITA excluding restructuring charges was SEK 3.7 (7.5) b. or 5.7% (12.0%) of sales.
In Networks, we saw strong execution with record build-out speed in India, where we now have a leading market share. Sales growth in India partly offset the expected softening we saw in other markets, notably in North America, where build-out pace moderated and customer inventory levels were reduced. Despite the business mix change and several large rollout contracts, Networks had a gross margin2 of over 39%.
In Cloud Software and Services, we continue to execute on the turnaround, including exiting subscale business and improving delivery efficiency. We are on track to deliver an EBITA2 of at least break-even for the full year 2023.
In Enterprise we saw continued strong growth in Enterprise Wireless Solutions, and we recorded positive EBITA in the Global Communications Platform business.
We landed another important 5G licensing agreement with a device vendor, further validating our IPR portfolio strength, positioning us well for continued IPR growth as we license vendors previously unlicensed for 5G.
We are well on track to reduce our annual run rate by at least SEK 11 b. by year-end, which will positively impact the P&L over the coming quarters with full effect during 2024.
Free cash flow before M&A was SEK -5.0 (4.4) b. primarily driven by lower EBIT2 and increased working capital including the payment to the US Department of Justice. We expect an improvement in cash flow during the second part of the year and gradually move towards our long-term target of 9-12% of Net sales.
Driving execution of our strategy
Ericsson is shaping the industry landscape by leveraging the full value of 5G and creating the world’s most powerful innovation platform. We remain focused on three priorities: i) bolstering our leadership in mobile networks; ii) growing our enterprise business; and iii) driving our cultural transformation.
Leadership in mobile networks is the cornerstone of our success. Our competitive advantage is clear – we deliver leading performance, energy efficiency and cost optimization. Our radios carry about half of the world’s 5G traffic outside China.
Building on this position and our market leading technologies, we are expanding into the fast-growing enterprise segment, substantially increasing our addressable market and diversifying our portfolio. 5G offers advanced capabilities such as Quality of Service, speed, latency, and location, and our platform allows these capabilities to be monetized in new ways by exposing them through network APIs. Operators and enterprises are showing great interest, as our platform will enable operators to offer differentiated performance levels and allow developers to integrate these capabilities into both existing and innovative new use cases.
We continue our relentless focus on enhancing our ethics and compliance program. Our compliance program and controls have been significantly enhanced since 2019 and our monitorship is entering its final year. We conduct testing to ensure our compliance program is effective and fully embedded across the company.
Looking ahead
For Q3 we expect similar market mix and trends as in Q2. In addition, Q3 will benefit from an early impact of our strong focus on cost-out execution. Overall, we thus expect Q3 EBITA margin2 to be in line with or slightly higher than Q2, followed by a seasonally stronger Q4.
As we look ahead, a fundamental driver of network capex is the continued rapid data traffic growth. Average smartphone usage is expected to exceed 20 GB/month in 2023 with strong growth. 240 operators have launched 5G, bringing new revenue growth with pricing model innovation. We forecast 5G subscriptions to top 1.5 billion by end-2023 and reach 4.6 billion by 2028. Fixed Wireless Access (FWA) also grows quickly, driving further traffic growth.
Traffic growth and operators’ desire to meet expectations for network quality with cost and energy efficiency, will stimulate investments. We estimate 75% of all base station sites outside China are not yet updated with 5G mid-band, and migration to 5G standalone will continue in order to deliver on 5G’s full potential.
We are confident that the market will recover as a consequence of these factors, and Ericsson is well positioned to benefit from increased investments. The exact timing of these increased network investments is, of course, in the hands of our customers, but we expect that the market will see a gradual recovery in late 2023 and improve in 2024.
Our technology leadership, solid performance and growth potential, position us well for the future. We are navigating the current environment with discipline and focus, and we tackle areas within our control. We execute on the Cloud Software and Services turnaround, portfolio adjustments, enhanced R&D productivity, IPR growth and cost reductions. Based on the expected recovery of the mobile networks market towards the end of the year, we remain focused on reaching the lower end of the 15-18% EBITA margin2 long-term target range in 2024.
Börje Ekholm
President and CEO
| 1 | Sales adjusted for comparable units and currency |
| 2 | Excluding restructuring charges |
| 2 Ericsson | Second quarter report 2023 | CEO comments | |
Table of Contents
Financial highlights
Net sales Segments
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
YoY adj.¹ |
Q1 2023 |
QoQ change |
Jan-Jun 2023 |
Jan-Jun 2022 |
YoY change |
YoY adj.¹ |
||||||||||||||||||||||||||||||
| Networks |
42.4 | 46.0 | -8 | % | -13 | % | 42.5 | 0 | % | 84.9 | 86.7 | -2 | % | -8 | % | |||||||||||||||||||||||||
| Cloud Software and Services |
15.1 | 14.0 | 8 | % | 1 | % | 13.4 | 13 | % | 28.5 | 26.1 | 9 | % | 3 | % | |||||||||||||||||||||||||
| Enterprise |
6.4 | 1.7 | 275 | % | 20 | % | 6.0 | 6 | % | 12.4 | 3.3 | 275 | % | 20 | % | |||||||||||||||||||||||||
| Other |
0.5 | 0.8 | -32 | % | -18 | % | 0.7 | -25 | % | 1.2 | 1.4 | -15 | % | -8 | % | |||||||||||||||||||||||||
| Total |
64.4 | 62.5 | 3 | % | -9 | % | 62.6 | 3 | % | 127.0 | 117.5 | 8 | % | -5 | % | |||||||||||||||||||||||||
| 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 comparable IFRS measures. |
Net sales Market Areas
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
YoY adj.¹ |
Q1 2023 |
QoQ change |
Jan-Jun 2023 |
Jan-Jun 2022 |
YoY change |
YoY adj.¹ |
||||||||||||||||||||||||||||||
| South East Asia, Oceania and India |
13.8 | 8.0 | 74 | % | 71 | % | 13.9 | -1 | % | 27.8 | 13.8 | 101 | % | 97 | % | |||||||||||||||||||||||||
| North East Asia |
5.1 | 7.3 | -31 | % | -32 | % | 4.4 | 16 | % | 9.4 | 12.7 | -26 | % | -26 | % | |||||||||||||||||||||||||
| North America |
14.4 | 22.8 | -37 | % | -42 | % | 16.9 | -15 | % | 31.4 | 43.6 | -28 | % | -35 | % | |||||||||||||||||||||||||
| Europe and Latin America |
16.0 | 15.3 | 4 | % | -3 | % | 14.2 | 12 | % | 30.2 | 30.6 | -1 | % | -8 | % | |||||||||||||||||||||||||
| Middle East and Africa |
5.3 | 5.2 | 2 | % | -4 | % | 4.2 | 28 | % | 9.5 | 9.5 | 0 | % | -6 | % | |||||||||||||||||||||||||
| Other² |
9.8 | 3.8 | 158 | % | 38 | % | 8.9 | 9 | % | 18.7 | 7.3 | 157 | % | 33 | % | |||||||||||||||||||||||||
| Total |
64.4 | 62.5 | 3 | % | -9 | % | 62.6 | 3 | % | 127.0 | 117.5 | 8 | % | -5 | % | |||||||||||||||||||||||||
| 1 | Sales growth adjusted for comparable units and currency. |
| 2 | Market area “Other” includes primarily IPR licensing revenues and a major part of segment Enterprise. |
Sales breakdown by market area by segment is available at the end of this report.
Segments
Group sales increased by 3% to SEK 64.4 (62.5) b. Sales adjusted for comparable units and currency declined by -9%.
Networks sales adjusted for comparable units and currency declined by -13% YoY. Networks sales doubled in market area South East Asia, Oceania and India while it declined in the other market areas, especially in North America where customers have lowered their capex spend and reduced inventory levels following high investment levels in 2021 and 2022. Networks accounted for 66% (74%) of Group sales.
Cloud Software and Services sales adjusted for comparable units and currency grew by 1% YoY, including 10% sales growth in North America. Sales in the quarter were supported by higher sales of 5G and IPR licensing revenues. Cloud Software and Services accounted for 23% (22%) of Group sales.
Enterprise sales adjusted for comparable units and currency increased by 20% YoY driven by Enterprise Wireless Solutions. Global Communications Platform (the consolidation of Vonage) sales were SEK 4.2 (0.0) b. in the quarter. Enterprise accounted for 10% (3%) of Group sales.
IPR licensing revenues increased to SEK 3.2 (1.4) b YoY. The increase is primarily related to a contract signed in the fourth quarter 2022 and a new contract with a device vendor signed in the second quarter 2023. The new contract includes revenue for past unlicensed quarters.
Market Areas
Sales adjusted for comparable units and currency increased in market area South East Asia, Oceania and India, while sales declined in the other four market areas.
In market area South East Asia, Oceania and India, sales adjusted for comparable units and currency increased by 71% YoY primarily driven by 5G market share gains in India. Reported sales increased by 74% YoY.
In market area North America, sales adjusted for comparable units and currency declined by -42% YoY as a result of customers lowering their capex spend and reducing inventory levels following high investment levels in 2021 and 2022. Cloud Software and Services grew by 10% in constant currency, driven by 5G. Reported sales decreased by -37% YoY.
In market area Europe and Latin America, sales adjusted for comparable units and currency decreased by -3% YoY. Sales in Europe declined by -6% following high investment levels in 2022, while sales in Latin America increased by 3% mainly driven by 5G deployments. Reported sales increased by 4% YoY.
In market area North East Asia, sales adjusted for comparable units and currency declined by -32% YoY as investments declined in several 5G front-runner markets after elevated 5G investment levels in 2022. Reported sales declined by -31% YoY.
In market area Middle East and Africa, sales adjusted for comparable units and currency decreased by -4% YoY driven by the macro environment. Reported sales increased by 2% YoY.
Market area Other primarily includes IPR licensing revenues and the majority of sales from segment Enterprise. Sales adjusted for comparable units and currency increased by 38% YoY driven mainly by IPR licensing revenues and Enterprise Wireless Solutions.
| 3 Ericsson | Second quarter report 2023 | Financial highlights | |
Table of Contents
Income and margin development
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
Q1 2023 |
QoQ change |
Jan-Jun 2023 |
Jan-Jun 2022 |
YoY change |
||||||||||||||||||||||||
| Net sales |
64.4 | 62.5 | 3 | % | 62.6 | 3 | % | 127.0 | 117.5 | 8 | % | |||||||||||||||||||||
| Gross income |
24.1 | 26.3 | -8 | % | 24.2 | 0 | % | 48.3 | 49.6 | -3 | % | |||||||||||||||||||||
| Gross margin |
37.4 | % | 42.1 | % | — | 38.6 | % | — | 38.0 | % | 42.2 | % | — | |||||||||||||||||||
| Research and development (R&D) expenses |
-13.8 | -11.5 | — | -12.0 | — | -25.7 | -22.2 | — | ||||||||||||||||||||||||
| Selling and administrative expenses |
-10.6 | -7.9 | — | -9.1 | — | -19.8 | -14.5 | — | ||||||||||||||||||||||||
| Impairment losses on trade receivables |
-0.3 | 0.0 | — | 0.0 | — | -0.4 | -0.2 | — | ||||||||||||||||||||||||
| Other operating income and expenses |
0.3 | 0.4 | -33 | % | 0.0 | — | 0.3 | -0.7 | — | |||||||||||||||||||||||
| Share in earnings of JV´s and associated companies |
0.1 | 0.0 | — | 0.0 | — | 0.0 | 0.0 | — | ||||||||||||||||||||||||
| EBIT |
-0.3 | 7.3 | — | 3.0 | — | 2.7 | 12.1 | -77 | % | |||||||||||||||||||||||
| EBIT margin ¹ |
-0.5 | % | 11.7 | % | — | 4.9 | % | — | 2.2 | % | 10.3 | % | — | |||||||||||||||||||
| EBITA ¹ |
0.5 | 7.5 | -93 | % | 3.8 | -86 | % | 4.4 | 12.4 | -65 | % | |||||||||||||||||||||
| EBITA margin ¹ |
0.8 | % | 12.0 | % | — | 6.2 | % | 3.5 | % | 10.6 | % | |||||||||||||||||||||
| Financial income and expenses, net |
-0.4 | -0.8 | — | -0.9 | — | -1.3 | -1.4 | — | ||||||||||||||||||||||||
| Income tax |
0.1 | -1.9 | — | -0.6 | — | -0.4 | -3.1 | — | ||||||||||||||||||||||||
| Net income (loss) |
-0.6 | 4.7 | — | 1.6 | — | 1.0 | 7.6 | -87 | % | |||||||||||||||||||||||
| Restructuring charges |
-3.1 | 0.0 | — | -1.0 | — | -4.1 | -0.1 | — | ||||||||||||||||||||||||
| Measures excl. restr. charges and other items affecting comparability ¹ |
||||||||||||||||||||||||||||||||
| Gross margin excluding restructuring charges |
38.3 | % | 42.2 | % | — | 39.8 | % | — | 39.0 | % | 42.2 | % | — | |||||||||||||||||||
| EBIT excluding restructuring charges |
2.8 | 7.4 | -62 | % | 4.0 | -30 | % | 6.8 | 12.1 | -44 | % | |||||||||||||||||||||
| EBIT margin excluding restructuring charges |
4.4 | % | 11.8 | % | — | 6.4 | % | — | 5.4 | % | 10.3 | % | — | |||||||||||||||||||
| EBITA excluding restructuring charges |
3.7 | 7.5 | -51 | % | 4.8 | -24 | % | 8.5 | 12.5 | -32 | % | |||||||||||||||||||||
| EBITA margin excluding restructuring charges |
5.7 | % | 12.0 | % | — | 7.7 | % | — | 6.7 | % | 10.6 | % | — | |||||||||||||||||||
| 1 | Non-IFRS financial measures are reconciled at the end of this report to the most directly comparable IFRS measures. |
Gross income
Gross income decreased to SEK 24.1 (26.3) b. Gross income excluding restructuring charges decreased to SEK 24.7 (26.3) b. as a consequence of lower sales and lower gross margin in Networks. Gross margin excluding restructuring charges was 38.3% (42.2%).
Networks gross income and gross margin excluding restructuring charges decreased as a result of lower sales and changed business mix, partly mitigated by higher IPR revenues in the sales mix. Cloud Software and Services gross income and gross margin excluding restructuring charges increased, supported by higher sales and higher IPR revenues in the sales mix. Enterprise gross income excluding restructuring charges increased while gross margin excluding restructuring charges decreased as a result of changed business mix after the Vonage consolidation.
Research and development (R&D) expenses
R&D expenses amounted to SEK -13.8 (-11.5) b. including a negative currency effect of SEK -0.4 b. and restructuring charges of SEK -1.7 (0.0) b. R&D expenses increased in segment Enterprise through the acquisition of Vonage and increased investments to expand the Enterprise Wireless Solutions portfolio. R&D expenses decreased in Networks and segment Other.
Selling and administrative (SG&A) expenses
SG&A expenses were SEK -10.6 (-7.9) b. including a negative currency effect of SEK -0.2 b. and restructuring charges of SEK -0.9 (0.0) b. The increase is related to Enterprise where the acquisition of Vonage had an impact of SEK -2.0 b. (of which amortization of intangible assets amounted to SEK -0.7 b.). Furthermore, SG&A expenses increased due to continued investments in the go-to-market activities in Enterprise Wireless Solutions.
Other operating income and expenses
Other operating income and expenses was SEK 0.3 (0.4) b.
Restructuring charges
Restructuring charges amounted to SEK -3.1 (0.0) b. as a result of the ongoing cost-reduction activities, mainly redundancy costs. For full-year 2023, total restructuring charges are estimated to be SEK -7 b.
EBITA
EBITA decreased to SEK 0.5 (7.5) b. corresponding to an EBITA margin of 0.8% (12.0%). EBITA excluding restructuring charges declined by SEK -3.8 b. YoY to SEK 3.7 b. In addition to the decrease in gross income driven by Networks, operating expenses excluding amortization of intangible assets and restructuring charges increased by SEK -2.1 b., mainly due to the consolidation of Vonage in segment Enterprise. EBITA margin excluding restructuring charges was 5.7% (12.0%).
EBITA margin excluding restructuring charges rolling four quarters was 9.1%.
EBIT
EBIT decreased to SEK -0.3 (7.3) b. with an EBIT margin of -0.5% (11.7%). EBIT excluding restructuring charges decreased by SEK -4.5 b. to SEK 2.8 b. The result includes an increase in amortization of intangible assets of SEK -0.7 b., mainly related to the acquisition of Vonage in 2022. EBIT margin excluding restructuring charges was 4.4% (11.8%).
| 4 Ericsson | Second quarter report 2023 | Financial highlights | |
Table of Contents
Financial income and expenses, net
Financial income and expenses was SEK -0.4 (-0.8) b. The currency hedge effect was SEK -0.1 (-0.5) b. YoY. The USD strengthened against the SEK between March 31, 2023 (SEK/USD 10.37) and June 30, 2023 (SEK/USD 10.88).
Income tax
Taxes were SEK 0.1 (-1.9) b. The reported positive tax is a result of the negative income after financial items. A tax rate of 30% is estimated for the full year.
Net income (loss)
Net income declined to a loss of SEK -0.6 (4.7) b. impacted by restructuring charges of SEK -3.1 (0.0) b., lower gross income excluding restructuring charges of SEK -1.7 b. YoY as well as increased operating expenses excluding restructuring charges of SEK -2.8 b. YoY. The decline was partly mitigated by lower tax impact of SEK 2.0 b. YoY. EPS diluted decreased to SEK -0.21 (1.35).
Employees
The number of employees on June 30, 2023, was 103,890 compared with 104,931 on March 31, 2023. The impact from the cost-reduction activities will be increasingly visible over coming quarters.
Financial highlights, year-to-date (Jan-June) development
Reported sales increased by SEK 9.5 b. or 8% to SEK 127.0 b. Reported sales declined by -2% to SEK 84.9 b. in Networks, sales in Cloud Software and Services grew by 9% to SEK 28.5 b., while Enterprise grew by 275% to SEK 12.4 b. on the back of the acquisition of Vonage.
Sales adjusted for comparable units and currency decreased by -5%. Sales doubled in market area South East Asia, Oceania and India, while sales declined in the other market areas. Sales were supported by increased IPR licensing revenues. Networks sales adjusted for comparable units and currency decreased by -8%, Cloud Software and Services sales grew by 3% and Enterprise sales grew by 20%.
Reported gross income decreased to SEK 48.3 (49.6) b. with a gross margin of 38.0% (42.2%). Gross income excluding restructuring charges was stable at SEK 49.6 (49.6) b., with Global Communications Platform (the consolidation of Vonage) contributing SEK 3.4 b., resulting in a gross margin of 39.0% (42.2%). Gross income and gross margin were impacted by lower sales and gross margin in Networks as a result of reduction in capex spend by several operators and business mix shift from front-runner markets to large deployment in other geographies.
Reported EBITA decreased to SEK 4.4 (12.4) b. corresponding to an EBITA margin of 3.5% (10.6%). EBITA excluding restructuring charges decreased to SEK 8.5 (12.5) b. with an EBITA margin of 6.7% (10.6%). While gross income excluding restructuring charges was stable, operating expenses excluding amortization and restructuring charges increased by SEK -5.0 b. including a negative currency effect of SEK -1.2 b. The increase in operating expenses was driven by the Enterprise segment through the acquisition of Vonage as well as continued investments in R&D and the go-to-market activities in Enterprise Wireless Solutions.
Reported EBIT decreased to SEK 2.7 (12.1) b. YoY, corresponding to an EBIT margin of 2.2% (10.3%). EBIT excluding restructuring charges decreased to SEK 6.8 (12.1) b. YoY with an EBIT margin of 5.4% (10.3%).
Net income year to date declined to SEK 1.0 (7.6) b. impacted by restructuring charges of SEK -4.1 (-0.1) b. and higher operating expenses excluding restructuring charges of SEK -6.3 b. YoY, primarily in segment Enterprise through the consolidation of Vonage with an impact from amortization of intangible assets of SEK -1.3 b. This result was partly mitigated by lower tax impact of SEK 2.7 b. YoY. EPS diluted decreased to SEK 0.25 (2.23).
| 5 Ericsson | Second quarter report 2023 | Financial highlights | |
Table of Contents
Segment results
Mobile networks – Segment Networks
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
Q1 2023 |
||||||||||||
| Net sales |
42.4 | 46.0 | -8 | % | 42.5 | |||||||||||
| Of which IPR licensing revenues |
2.6 | 1.2 | 119 | % | 2.0 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | -13 | % | — | |||||||||||
| Gross income |
16.3 | 20.7 | -21 | % | 16.9 | |||||||||||
| Gross margin |
38.4 | % | 45.1 | % | — | 39.7 | % | |||||||||
| EBIT |
2.6 | 8.9 | -70 | % | 6.0 | |||||||||||
| EBIT margin |
6.2 | % | 19.3 | % | — | 14.2 | % | |||||||||
| EBITA |
2.7 | 8.9 | -70 | % | 6.0 | |||||||||||
| EBITA margin |
6.3 | % | 19.3 | % | — | 14.2 | % | |||||||||
| Restructuring charges |
-2.2 | 0.0 | — | -0.4 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
39.3 | % | 45.2 | % | — | 40.6 | % | |||||||||
| EBIT excl. restructuring charges |
4.8 | 8.9 | -46 | % | 6.4 | |||||||||||
| EBIT margin excl. restructuring charges |
11.3 | % | 19.4 | % | — | 15.1 | % | |||||||||
| EBITA excluding restructuring charges |
4.9 | 8.9 | -46 | % | 6.4 | |||||||||||
| EBITA margin excl. restructuring charges |
11.4 | % | 19.4 | % | — | 15.2 | % | |||||||||
Breakdown of sales into products, services and IPR licensing is available in note 3.
| • | Continued momentum in India, now Ericsson’s 2nd largest market. |
| • | Network traffic growth continues with new use cases like FWA. |
| • | Organic sales in North America declined by -50%. |
| • | Building next-generation smart manufacturing and technology hub in Estonia. |
Net sales
Sales adjusted for comparable units and currency decreased by -13% YoY, primarily driven by a -50% sales drop in North America with operators reducing their capex spend and adjusting inventories. Sales in market area South East Asia, Oceania and India doubled, as a result of market share gains in India, with high deployment levels. Networks reported sales decreased by -8%.
Gross income
Gross income decreased by SEK -4.4 b. to SEK 16.3 b. resulting in a gross margin of 38.4% (45.1%). Gross income excluding restructuring charges decreased to SEK 16.7 (20.8) b., with a gross margin of 39.3% (45.2%). As expected, the gross margin was impacted by a business mix shift caused by a slowdown in investments in 5G front-runner markets, combined with large deployments with an initial dilutive effect on the margins in other geographies. Adjustments of the supply chain continue, with focus on adaptability to demand changes and geopolitical requirements, impacting gross margin negatively. The increase in IPR licensing revenues, also including retroactive revenues, had a positive impact on the margin in the quarter.
Gross margin in Q3 is estimated to be 38-40%, with a negative impact from business mix shift partly offset by cost optimization.
EBIT and EBITA
EBIT excluding restructuring charges decreased to SEK 4.8 (8.9) b. with an EBIT margin of 11.3% (19.4%). EBITA excluding restructuring charges declined to SEK 4.9 (8.9) b. as a result of a lower gross income due to lower sales as well as a margin impact due to business mix shift. EBITA margin excluding restructuring charges was 11.4% (19.4%).
Reported EBIT declined to SEK 2.6 (8.9) b. while reported EBITA declined to SEK 2.7 (8.9) b. In addition to the lower gross income, EBIT and EBITA were impacted by restructuring charges of SEK -2.2 (0.0) b.
Net sales rolling four quarters were SEK 191.7 b. and the EBITA margin excluding restructuring charges rolling four quarters was 17.5%.
Mobile networks – Segment Cloud Software and Services
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
Q1 2023 |
||||||||||||
| Net sales |
15.1 | 14.0 | 8 | % | 13.4 | |||||||||||
| Of which IPR licensing revenues |
0.6 | 0.3 | 119 | % | 0.4 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | 1 | % | — | |||||||||||
| Gross income |
4.9 | 4.7 | 5 | % | 4.5 | |||||||||||
| Gross margin |
32.7 | % | 33.5 | % | — | 33.4 | % | |||||||||
| EBIT (loss) |
-1.2 | -0.7 | — | -0.9 | ||||||||||||
| EBIT margin |
-7.9 | % | -5.2 | % | — | -7.0 | % | |||||||||
| EBITA (loss) |
-1.2 | -0.7 | — | -0.9 | ||||||||||||
| EBITA margin |
-7.9 | % | -5.1 | % | — | -6.9 | % | |||||||||
| Restructuring charges |
-0.9 | 0.0 | — | -0.5 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
33.9 | % | 33.5 | % | — | 36.1 | % | |||||||||
| EBIT (loss) excl. restructuring charges |
-0.3 | —0.7 | — | -0.4 | ||||||||||||
| EBIT margin excl. restructuring charges |
-1.9 | % | -5.2 | % | — | -3.3 | % | |||||||||
| EBITA (loss) excluding restructuring charges |
-0.3 | —0.7 | — | -0.4 | ||||||||||||
| EBITA margin excl. restructuring charges |
-1.9 | % | -5.1 | % | — | -3.2 | % | |||||||||
Breakdown of sales into products, services and IPR licensing is available in note 3.
| • | Sales increased by 1% adjusted for comparable units and currency. |
| • | EBITA excl. restructuring charges improved YoY to SEK -0.3 (-0.7) b. |
| • | On track to reach break-even for full-year 2023. |
Net sales
Sales adjusted for comparable units and currency increased by 1% YoY, primarily driven by 5G sales in North America, while sales decreased in managed services. Reported sales increased by 8% YoY.
Gross income
Gross income increased by SEK 0.3 b. to SEK 4.9 b. with a gross margin of 32.7% (33.5%). Gross income excluding restructuring charges was SEK 5.1 (4.7) b. resulting in a gross margin of 33.9% (33.5%). The increase in IPR licensing revenues in the sales mix as well as improved delivery performance had a positive impact on the margin YoY.
EBIT (loss) and EBITA (loss)
EBIT (loss) and EBITA (loss) excluding restructuring charges were SEK -0.3 (-0.7) b. with an EBIT margin excluding restructuring charges of -1.9% (-5.2%) and an EBITA margin excluding restructuring charges of -1.9% (-5.1%). The improvement is driven by higher gross income as a result of improved operational performance including exiting subscale business and improving delivery efficiency.
Reported EBIT (loss) and EBITA (loss) were both SEK -1.2 (-0.7) b. with an EBIT margin of -7.9% (-5.2%) and an EBITA margin of -7.9% (-5.1%). A higher gross income was offset by restructuring charges of SEK -0.9 (0.0) b.
The EBITA excluding restructuring charges for Cloud Software and Services is expected to reach at least break-even for full-year 2023. Strategy execution continues, by limiting subscale software development, accelerating automation to reduce deployment and maintenance efforts, and changing the focus from market share gains to profitable business. Results will vary between quarters. EBITA excluding restructuring charges in Q3 is expected to be in line with Q2.
Net sales rolling four quarters were SEK 62.9 b. and the EBITA margin excluding restructuring charges rolling four quarters was -1.1%.
| 6 Ericsson | Second quarter report 2023 | Segment results | |
Table of Contents
Enterprise – Segment Enterprise
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
Q1 2023 1 |
||||||||||||
| Net sales |
6.4 | 1.7 | 275 | % | 6.0 | |||||||||||
| Of which Global Comms Platform (Vonage) |
4.2 | — | — | 3.9 | ||||||||||||
| Of which Enterprise Wireless Solutions |
1.0 | 0.6 | 69 | % | 0.8 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | 20 | % | — | |||||||||||
| Gross income |
3.0 | 0.9 | 228 | % | 2.8 | |||||||||||
| Gross margin |
46.3 | % | 52.8 | % | — | 47.4 | % | |||||||||
| EBIT (loss) |
-1.7 | -0.6 | — | -1.7 | ||||||||||||
| EBIT margin |
-26.3 | % | -34.8 | % | — | -28.6 | % | |||||||||
| EBITA (loss) |
-0.9 | -0.5 | — | -0.9 | ||||||||||||
| EBITA margin |
-14.0 | % | -28.5 | % | — | -15.8 | % | |||||||||
| Restructuring charges |
-0.1 | 0.0 | — | -0.1 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
46.3 | % | 52.8 | % | — | 47.6 | % | |||||||||
| Global Comms Platform (Vonage) |
40.7 | % | — | — | 43.5 | % | ||||||||||
| Enterprise Wireless Solutions |
58.2 | % | 52.9 | % | — | 56.7 | % | |||||||||
| EBIT (loss) excl. restructuring charges² |
-1.6 | -0.6 | — | -1.6 | ||||||||||||
| EBIT margin excl. restructuring charges² |
-25.5 | % | -34.6 | % | — | -27.1 | % | |||||||||
| EBITA (loss) excluding restructuring charges² |
-0.8 | -0.5 | — | -0.9 | ||||||||||||
| Of which Global Comms Platform (Vonage) |
0.0 | — | — | 0.0 | ||||||||||||
| Of which Enterprise Wireless Solutions |
-0.9 | -0.5 | — | -0.8 | ||||||||||||
| EBITA margin excl. restructuring charges² |
-13.2 | % | -28.3 | % | — | -14.3 | % | |||||||||
| 1 | Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. |
| 2 | Common costs are included at segment level only (not distributed within the segment). |
| • | Reported sales growth driven by the Vonage acquisition. |
| • | Organic sales growth driven by Enterprise Wireless Solutions. |
| • | Increased gross income excl. restructuring charges to SEK 3.0 (0.9) b. |
| • | Global Communications Platform was EBITA positive. |
Net sales
Reported sales were SEK 6.4 (1.7) b. The increase of SEK 4.7 b. YoY was driven primarily by Global Communications Platform (the consolidation of Vonage) which contributed SEK 4.2 b. Sales adjusted for comparable units and currency increased by 20%, driven by Enterprise Wireless Solutions. Enterprise Wireless Solutions reported sales of SEK 1.0 (0.6) b. representing a sales growth of 69%.
Vonage was not consolidated in Q2 2022, however when comparing the pre- and post-acquisition figures, the Vonage Communications Platform (VCP) sales grew by 12% in USD YoY, while sales from the current communications API offerings grew by 19%.
Investments continue in line with the strategic imperative to build the Global Network Platform (network APIs).
Gross income
Gross income was SEK 3.0 (0.9) b. with a gross margin of 46.3% (52.8%). Gross income excluding restructuring charges was SEK 3.0 (0.9) b. driven mainly by Global Communications Platform (the consolidation of Vonage) and Enterprise Wireless Solutions. Gross margin excluding restructuring charges declined to 46.3% (52.8%) due to the consolidation of Vonage with lower gross margin than the remaining part of the Enterprise segment.
EBITA (loss)
EBITA (loss) was SEK -0.9 (-0.5) b. EBITA (loss) excluding restructuring charges was SEK -0.8 (-0.5) b., where the decline was mainly driven by Enterprise Wireless Solutions, due to increased growth investments in R&D and go-to market activities. In addition, operating expenses were higher due to the consolidation of all costs for Private Cellular Networks (Dedicated Networks). Technologies and New Businesses reported a positive EBITA. The segment’s operating expenses were impacted by a negative currency effect. EBITA margin excluding restructuring charges was -13.2% (-28.3%).
EBIT (loss)
EBIT (loss) was SEK -1.7 (-0.6) b. EBIT (loss) excluding restructuring charges was SEK -1.6 (-0.6) b. impacted by amortization of intangible assets of SEK -0.8 b., from acquired businesses.
Segment Other
| SEK b. |
Q2 2023 |
Q2 2022 |
YoY change |
Q1 2023 1 |
||||||||||||
| Net sales |
0.5 | 0.8 | -32 | % | 0.7 | |||||||||||
| Sales growth adj. for comparable units and FX |
— | — | -18 | % | — | |||||||||||
| Gross income |
-0.1 | 0.0 | — | 0.0 | ||||||||||||
| Gross margin |
-22.2 | % | -3.3 | % | — | -2.6 | % | |||||||||
| EBIT (loss) |
-0.1 | -0.2 | — | -0.3 | ||||||||||||
| EBIT margin |
-10.8 | % | -29.7 | % | — | -46.3 | % | |||||||||
| EBITA (loss) |
-0.1 | -0.2 | — | -0.3 | ||||||||||||
| EBITA margin |
-10.6 | % | -29.7 | % | — | -46.3 | % | |||||||||
| Restructuring charges |
0.0 | 0.0 | — | 0.0 | ||||||||||||
| Measures excl. restructuring charges |
||||||||||||||||
| Gross margin excl. restructuring charges |
-22.6 | % | -3.3 | % | — | -2.6 | % | |||||||||
| EBIT (loss) excl. restructuring charges |
-0.1 | -0.2 | — | -0.3 | ||||||||||||
| EBIT margin excl. restructuring charges |
-11.2 | % | -29.7 | % | — | -48.2 | % | |||||||||
| EBITA (loss) excluding restructuring charges |
-0.1 | -0.2 | — | -0.3 | ||||||||||||
| EBITA margin excl. restructuring charges |
-11.0 | % | -29.7 | % | — | -48.2 | % | |||||||||
| 1 | Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. |
Net sales
Reported sales declined to SEK 0.5 (0.8) b. mainly related to the divestment of the IoT business in Q1 2023.
Gross income
Gross income and gross income excluding restructuring charges were both SEK -0.1 (0.0) b. Gross margin was -22.2% (-3.3%) while gross margin excluding restructuring charges was -22.6% (-3.3%).
EBITA (loss)
EBITA (loss) and EBITA (loss) excluding restructuring charges were both SEK -0.1 (-0.2) b. EBITA margin was -10.6% (-29.7%). EBITA margin excluding restructuring charges was -11.0% (-29.7%).
EBITA improved mainly due to the divestment of the IoT business.
EBIT (loss)
EBIT (loss) and EBIT (loss) excluding restructuring charges were both SEK -0.1 (-0.2) b. EBIT margin was -10.8% (-29.7%). EBIT margin excluding restructuring charges was -11.2% (-29.7%).
| 7 Ericsson | Second quarter report 2023 | Segment results | |
Table of Contents
Cash flow and financial position
| Free cash flow bridge, SEK b. |
Q2 2023 |
Q2 2022 |
Q1 2023 |
Jan-Jun 2023 |
Jan-Jun 2022 |
|||||||||||||||
| EBIT excl. restructuring charges |
2.8 | 7.4 | 4.0 | 6.8 | 12.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Depreciation, amortization and impairment losses |
2.8 | 2.2 | 3.1 | 5.9 | 4.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Restructuring charges |
-3.1 | 0.0 | -1.0 | -4.1 | -0.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Changes in working capital 1) |
-3.7 | -1.3 | -11.8 | -15.5 | -6.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest paid/received, taxes paid, and other |
-1.7 | -1.9 | -0.2 | -1.9 | -3.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from operating activities |
-2.9 | 6.3 | -5.8 | -8.7 | 6.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Capex net and other investing activities |
-1.4 | -1.3 | -1.5 | -2.9 | -2.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Repayment of lease liabilities |
-0.7 | -0.6 | -0.7 | -1.4 | -1.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Free cash flow before M&A |
-5.0 | 4.4 | -8.0 | -13.0 | 2.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| M&A |
-0.9 | 0.1 | -0.8 | -1.8 | 0.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Free cash flow after M&A |
-5.9 | 4.6 | -8.9 | -14.8 | 3.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from operating activities |
-2.9 | 6.3 | -5.8 | -8.7 | 6.3 | |||||||||||||||
| Cash flow from investing activities |
-2.4 | 21.9 | 2.4 | 0.0 | 36.4 | |||||||||||||||
| Cash flow from financing activities |
-7.1 | -14.5 | -0.8 | -7.8 | -6.7 | |||||||||||||||
| SEK b. |
Jun 30 2023 |
Jun 30 2022 |
Mar 31 2023 |
|||||||||
| Gross cash |
35.7 | 100.4 | 47.3 | |||||||||
|
|
|
|
|
|
|
|||||||
| -Borrowings, current |
10.4 | 3.7 | 11.6 | |||||||||
| -Borrowings, non-current |
23.5 | 26.4 | 22.2 | |||||||||
|
|
|
|
|
|
|
|||||||
| Net cash |
1.9 | 70.3 | 13.6 | |||||||||
|
|
|
|
|
|
|
|||||||
| Equity |
132.4 | 127.8 | 125.8 | |||||||||
| Total assets |
343.4 | 332.5 | 345.7 | |||||||||
| Capital turnover (times) |
1.3 | 1.2 | 1.3 | |||||||||
| Return on capital employed (%) |
2.7 | % | 12.8 | % | 6.1 | % | ||||||
Non-IFRS financial measures are reconciled at the end of this report to the most directly comparable IFRS measures.
| 1 | Defined as Changes in operating net assets. |
| • | Free cash flow before M&A was SEK -5.0 (4.4) b. |
| • | Net cash decreased by SEK -11.7 b. QoQ to SEK 1.9 b. |
| • | A new revolving credit facility of USD 0.5 b. was established. |
Cash flow from operating activities
Cash flow from operating activities decreased to SEK -2.9 (6.3) b. due to lower EBIT and increased working capital YoY. Working capital increased in the quarter following the current business mix shift including large rollout projects with longer order-to-cash cycle. Cash flow was also impacted by payment of the earlier provisioned USD -0.2 b. (SEK -2.1 b.) fine to the U.S. Department of Justice (DOJ) regarding non-criminal breaches of the 2019 Deferred Prosecution Agreement (DPA). Taxes paid were SEK -1.5 (-1.0) b.
Free cash flow
Free cash flow before M&A was SEK -5.0 (4.4) b. due to lower cash flow from operating activities. Capex net and other investing activities increased to SEK -1.4 (-1.3) b., primarily driven by increased product development, partly offset by decreased investment in property, plant and equipment. Repayment of lease liabilities was SEK -0.7 (-0.6) b. YoY, mainly related to property leases. M&A activities of SEK -0.9 b. were primarily related to an acquisition within Enterprise Wireless Solutions. Free cash flow after M&A was SEK -5.9 (4.6) b. Free cash flow before M&A rolling four quarters was SEK 6.4 b., or 2.3% in relation to sales.
Cash flow from investing activities
Cash flow from investing activities was SEK -2.4 (21.9) b. In Q2 2022, Ericsson disposed of interest-bearing securities of SEK 22.7 b.
Cash flow from financing activities
Cash flow from financing activities was SEK -7.1 (-14.5) b. The YoY change was mainly driven by repayment of a USD -1.0 b. (SEK -10.0 b.) bond in Q2 2022. Dividends of SEK -4.6 b. were paid out in the quarter, and an additional SEK 1.35 per share (totaling SEK -4.5 b.) will be paid out in October. Furthermore, Ericsson repaid borrowing of SEK -2.8 b., and borrowed SEK 1.0 b. under its commercial paper program.
Financial position
Sequentially, gross cash decreased by SEK -11.6 b. to SEK 35.7 b. and net cash decreased by SEK -11.7 b. to SEK 1.9 b. The sequential change was a result of the negative free cash flow after M&A and the dividend paid to shareholders. In addition, gross cash was affected by repayment of borrowings.
Ericsson has an unutilized revolving credit facility of USD 2.0 b., linked to two of Ericsson’s long-term sustainability goals. The facility is set to expire in 2027 with a one-year extension option. In addition to this facility, Ericsson has signed a new unutilized revolving credit facility of USD 0.5 b. for general corporate purposes.
The average maturity of long-term borrowings was 3.6 years as of June 30, 2023, a decrease from 4.4 years 12 months earlier.
Liabilities for post-employment benefits decreased to SEK 22.8 b. from SEK 26.8 b. due to changes in financial assumptions. 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 9.0 b. (SEK 13.8 b. lower than current DBO).
Return on capital employed (ROCE) was 2.7% (12.8%) as a result of lower EBIT and higher capital employed.
| 8 Ericsson | Second quarter report 2023 | Cash flow and financial position | |
Table of Contents
Key data points
Market
The global RAN equipment market is estimated to be stable at 0% (1%) in 2023. North America is expected to decline by -13% (-7%), Europe by 0% (0%) and China by -4% (-4%).
Source: Dell’Oro Mobile RAN 5-year forecast, July 2023. Numbers in parenthesis are from Dell’Oro Mobile RAN Quarterly Report 1Q23, May 2023.
Ericsson
Net sales
Reported average seasonality last 3 years (2020–2022), %
| Q4gQ1 | Q1gQ2 | Q2gQ3 | Q3gQ4 | |||||||||||||
| Networks |
-23 | % | +12 | % | +4 | % | +22 | % | ||||||||
| Cloud Software and Services |
-35 | % | +12 | % | +2 | % | +35 | % | ||||||||
Net sales may show large variations between quarters, including currency changes.
Operating expenses excluding Global Communications Platform (consolidation of Vonage) and restructuring charges
Reported average seasonality last 3 years (2020–2022), SEK b.
Positive numbers = decrease in operating expenses.
Negative numbers = increase in operating expenses.
| Q4gQ1 | Q1gQ2 | Q2gQ3 | Q3gQ4 | |||||||||||||
| Ericsson Group |
+3.3 | -1.5 | +0.7 | -2.4 | ||||||||||||
Operating expenses may show large variations between quarters, including currency changes.
EBITA
The Q3 EBITA margin excluding restructuring charge is expected to be in line with, or slightly better than Q2, with similar trends and business mix and early benefits of cost-out execution, followed by a seasonally stronger Q4.
Currency exposure
Rule of thumb: A change by 10% of SEK to USD would have an impact of approximately +/-5% on net sales.
Amortization of intangible assets
Amortization of intangible assets is expected to continue to be around SEK -0.9 b. per quarter of which approximately SEK -0.8 b. related to segment Enterprise.
Restructuring charges
Restructuring charges is expected to be around SEK 7 b. for the full year. For 2024, restructuring charges are expected to normalize at about 0.5% of sales.
Segments
Networks
Gross margin excluding restructuring charges is estimated to be in the range of 38-40% in Q3.
Cloud Software and Services
EBITA excluding restructuring charges in Q3 is expected to be in line with Q2.
The EBITA excluding restructuring charges is expected to reach at least break-even for full-year 2023.
Enterprise
Amortization of intangible assets is expected to be approximately SEK -0.8 b. per quarter.
| 9 Ericsson | Second quarter report 2023 | Key data points | |
Table of Contents
Parent Company
Income after financial items January–June 2023, was SEK 16.4 (20.0) b.
At the end of the quarter, gross cash (cash, cash equivalents plus interest-bearing securities, current and non-current) amounted to SEK 20.8 (85.1) b.
There was a decrease in intercompany lending of SEK 2.4 b. and an increase in intercompany borrowing of SEK 2.5 b. in the quarter.
The Parent Company has recognized dividends from subsidiaries of SEK 16.1 (16.7) b. in the quarter.
The holding of treasury stock on June 30, 2023, was 14,009,306 Class B shares.
| 10 Ericsson | Second quarter report 2023 | Parent Company | |
Table of Contents
Other information
Legal proceedings not involving governmental authorities
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 purchasers of Ericsson ADS in the United States, in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as a defendant. The amended complaint alleged violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq. On May 24, 2023, the court granted Ericsson’s motion to dismiss and dismissed the case with prejudice, concluding that Ericsson did not violate any disclosure obligation to investors. On June 23, 2023, plaintiff filed a notice of appeal. Ericsson will continue to vigorously defend this matter.
In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. The lawsuit was brought by US military service members and employees of US government contractors who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against Ericsson under the US Anti-Terrorism Act alleging that Ericsson made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, Ericsson filed a motion to dismiss the complaint.
On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, including a plaintiff injured in Turkey, named Ericsson AB, CEO Börje Ekholm and a former employee as additional defendants and also asserted additional allegations and claims. In March 2023, the Ericsson corporate defendants and Mr. Ekholm filed motions to dismiss the amended complaint. On June 2, 2023, plaintiffs filed an opposition to defendants’ motion to dismiss the amended complaint. Defendants’ reply brief in support of their motion to dismiss was filed on July 12, 2023.
In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, lawsuits, claims and proceedings incidental to the ordinary course of business.
Legal proceedings involving governmental authorities
In February 2022, the Company publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period between 2011 to 2019. The investigation found serious breaches of compliance rules and the Company’s Code of Business Ethics, and identified evidence of corruption related misconduct and other serious violations, including payments to intermediaries and the potential use of alternate transport routes in connection with circumventing Iraqi Customs at a time when terrorist organizations, including ISIS, controlled some transport routes. The investigation also identified payment schemes and cash transactions that potentially created the risk of money laundering. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. In March 2022, the DOJ informed Ericsson it had determined that, before entering into the DPA, the Company provided insufficient information to the DOJ about the Company’s 2019 internal investigation into conduct in Iraq. The DOJ also determined that the Company breached the DPA by failing to inform the DOJ about the investigation after entering into the DPA.
In June 2022, the SEC informed Ericsson that it opened an investigation concerning matters described in the Company’s 2019 Iraq investigation report. Under Ericsson’s consent judgment with the SEC, Ericsson is permanently enjoined from violating the antibribery, books and records and internal controls provisions in the Foreign Corrupt Practices Act (FCPA). Violations of the injunction, consent judgment or securities law could subject the Company to new civil and criminal penalties as well as new enforcement actions.
On March 2, 2023, the Company reached a resolution (Plea Agreement) with the DOJ regarding the non-criminal breaches of the DPA. Under the Plea Agreement, Ericsson pleaded guilty to previously deferred charges relating to conduct that occurred prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206,728,848. The entry of the Plea Agreement brought the DPA to an end. The Company’s internal investigation and its cooperation with authorities in relation to the matters discussed in the 2019 internal Iraq investigation report remain open and ongoing and are not covered by the Plea Agreement.
On May 24, 2023, Nasdaq Stockholm concluded its review of Ericsson’s public disclosure obligations concerning its 2019 Iraq internal investigation report and dismissed the matter, stating that Nasdaq could not conclude that a reasonable investor would have used the content of the report as part of an investment decision. After having reviewed Nasdaq Stockholm’s investigation and conclusion, on June 8, 2023, the Swedish Financial Supervisory Authority also decided to formally close its review of Ericsson’s prior disclosures relating to the 2019 Iraq internal investigation report.
As previously disclosed, the Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization. With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to investigate in full cooperation with the DOJ and the SEC. This includes a comprehensive review of the 2019 investigation and further investigation of matters relating to historical operations in Iraq. As additional information continues to be identified and evaluated during the ongoing investigation, we expect that we will continue our cooperation with the DOJ and the SEC and that we will be unable to make conclusive determinations on the outcome of any such investigation until all pertinent information has been identified. The scope and duration of the remaining process are currently uncertain.
As part of its defense to a now settled patent infringement lawsuit filed by Ericsson in 2013 in the Delhi High Court against Indian handset company Micromax, Micromax filed a complaint against Ericsson with the Competition Commission of India (CCI). The CCI decided to refer the case to the Director General’s Office for an in-depth investigation. The CCI opened similar investigations against Ericsson in January 2014 based on claims made by Intex Technologies (India) Limited and, in 2015, based on a now settled claim from iBall. Ericsson has challenged CCI’s jurisdiction in these cases before the Delhi High Court. On July 13 2023, the Division Bench of the Delhi High Court found that in this instance the CCI has no power to conduct the pending investigations against Ericsson. This order may be further appealed to Supreme Court of India by the CCI (which has an initial 90-day period to appeal subject to further extensions which can be granted by the Court).
PRESS RELEASES
Apr 05, 2023 | Acquisition of cloud-based security specialist Ericom by Cradlepoint, part of Ericsson
| 11 Ericsson | Second quarter report 2023 | Other information | |
Table of Contents
The Cradlepoint acquisition of Ericom strengthens Ericsson’s global enterprise ambitions.
Ericom’s zero-trust and cloud-based security solutions will form the basis of the new Cradlepoint NetCloud Threat Defense cloud service, expanding the company’s mobile-capable and router-integrated SASE (secure access service edge) and zero-trust portfolio of solutions for fixed-site, remote worker, in-vehicle and IoT use cases.
Link to Cradlepoint’s press release (Apr 04, 2023):
https://cradlepoint.com/press-release/cradlepoint-acquires
-ericom-and-its-cloud-based-enterprise-security-solution/
Apr 20, 2023 | Ericsson’s Nomination Committee appointed
Ericsson’s (NASDAQ:ERIC) Nomination Committee for the Annual General Meeting 2024 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 & AMF Fonder; |
| • | Christer Gardell, Cevian Capital Partners Limited; and |
| • | Jan Carlson, 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/2023/4/ericssons-nomination-committee-appointed
May 02, 2023 | Ericsson resolves on an acquisition offer for C shares for LTV II 2023, LTV 2022 and LTV 2021
In accordance with the resolutions by the Annual General Meeting 2023, Ericsson (NASDAQ:ERIC) expands its treasury stock in order to provide shares for the Long-Term Variable Compensation Programs LTV II 2023, LTV 2022 and LTV 2021 for Ericsson’s executive team and other executives.
The Board of Directors of Ericsson has today resolved, by virtue of authorizations given by the Annual General Meeting on March 29, 2023 (the “AGM 2023”), to direct an acquisition offer to all holders of C shares to acquire these shares. The acquisition shall be made during the period May 11 – May 25, 2023, and payment for acquired shares shall be made in cash with approximately SEK 5 per share (corresponding to the quota value of the Ericsson share).
The offer is part of the financing of Ericsson’s Long-Term Variable Compensation Programs LTV II 2023, LTV 2022 and LTV 2021 and includes all 10 million C shares which the AGM 2023 resolved to issue to Investor AB for these programs. Investor AB have today subscribed for all 10 million C shares and informed Ericsson that they intend to accept the acquisition offer.
Once all 10 million C shares have been acquired by Ericsson, the Board intends to convert them to B shares. After the conversion, the total number of shares in Ericsson will amount to 3,344,151,735, of which 261,755,983 are A shares and 3,082,395,752 are B shares. Ericsson currently holds 4,009,306 B shares as treasury stock.
https://www.ericsson.com/en/press-releases/2023/5/ericsson
-resolves-on-an-acquisition-offer-for-c-shares-for-ltv-ii-2023-ltv-2022-and-ltv-2021
May 24, 2023 | Nasdaq Stockholm closes review of 2019 Iraq report disclosures
Nasdaq Stockholm has concluded its review of Ericsson’s (NASDAQ: ERIC) public disclosure obligations concerning its 2019 Iraq internal investigation report.
In dismissing the matter, Nasdaq stated that it “cannot come to the conclusion that the content of the report was such that a reasonable investor would have used such information as part of his/her investment decision.”
Ericsson has previously addressed Nasdaq Stockholm’s review (including previous responses to the Swedish Shareholders Association).
https://www.ericsson.com/en/press-releases/2023/5/nasdaq
-stockholm-closes-review-of-2019-iraq-report-disclosures
May 25, 2023 | U.S. District Court dismisses securities claim against Ericsson
Yesterday, the U.S. District Court for the Eastern District of New York dismissed with prejudice the securities litigation against Ericsson (NASDAQ: ERIC) brought by certain shareholders.
In its ruling, the court rejected in full the plaintiff’s claims that Ericsson misled investors and concluded that Ericsson did not violate any disclosure obligation to investors.
The motion to dismiss decision is subject to appeal from the plaintiff. Ericsson will continue to vigorously defend this matter if appealed.
Ericsson has also announced this week that Nasdaq Stockholm has formally closed its review into Ericsson’s public disclosure concerning the 2019 Iraq report (read more). Nasdaq, in closing the case, stated that it: “cannot come to the conclusion that the content of the report was such that a reasonable investor would have used such information as part of his/her investment decision”.
https://www.ericsson.com/en/press-releases/2023/5/u.s.
-district-court-dismisses-securities-claim-against-ericsson
May 31, 2023 | New number of shares and votes in Telefonaktiebolaget LM Ericsson
The total number of shares in Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) as of May 31, 2023, amounts to 3,344,151,735, of which 261,755,983 are A shares and 3,082,395,752 are B shares.
The total number of votes is 569,995,558.2, of which the A shares represent 261,755,983 votes and the B shares represent 308,239,575.2 votes.
The increase in the number of shares and votes is a result of the company’s issue of 10 million C shares completed in May 2023. The C shares have subsequently been repurchased by the company and converted into B shares by virtue of a conversion clause in the articles of association. This is in accordance with the resolution by the AGM 2023 to expand the treasury stock as part of the financing of the Long-Term Variable Compensation Programs LTV II 2023, LTV 2022 and LTV 2021 for the company’s executive team and other executives. The company currently holds 14,009,306 B shares as treasury stock.
https://www.ericsson.com/en/press-releases/2023/5/new
-number-of-shares-and-votes-in-telefonaktiebolaget-lm-ericsson
| 12 Ericsson | Second quarter report 2023 | Other information | |
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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 material group risks are regularly assessed and reviewed by executives as required by Ericsson’s Material Group Risk Protocol 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 2022 and in the Annual Report on Form 20-F 2022 (in the following, the “Annual Report 2022”). 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. See also the risks set out in the section titled “Forward-Looking Statements.”
Ericsson relies on a limited number of suppliers of components, production capacity and R&D and IT services, which exposes the Company to supply disruptions and cost increases.
As described in the Annual Report 2022, including in the risk factor 1.14, Ericsson’s ability to deliver according to market demands and contractual commitments depends significantly on obtaining a timely and adequate supply of materials, components, production capacity and other vital services on competitive terms, including on occasion from single-source suppliers, or in the case of the development and supply of for example key ASIC and FPGA components, printed circuit boards, standard electronics or semiconductors (including foundry node availability) from very few suppliers, on which Ericsson depends. Some of these suppliers have in addition very limited geographical redundancy, making them vulnerable to natural disasters, conflicts or other potentially disruptive events. Due to the current tensions between the US and China, and the tense cross strait relations, this risk has increased. Accordingly, there is a risk that the Company will be unable to obtain key supplies it needs to produce Ericsson’s products and provide Ericsson’s services on commercially reasonable terms, in time, or at all. This is particularly critical in connection with large projects like the current 5G rollout in India. Failure by the Company or any of the Company’s suppliers could delay or interrupt Ericsson’s products or services supply or operations and significantly limit sales or increase Ericsson’s costs, for example through damages. To find an alternative supplier or redesign products to replace components may take significant time, which could cause significant delays or interruptions in the delivery of Ericsson’s products and services and result in a reduction in sales. Ericsson has from time to time experienced interruptions of supply, and the Company may experience such interruptions in the future.
Furthermore, the Company’s procurement of supplies requires Ericsson to predict future customer demands. If Ericsson fails to anticipate customer demand properly, an over or under supply of components and production capacity could occur. In many cases, some of Ericsson’s competitors utilize the same manufacturers, and if they have purchased capacity ahead of Ericsson, the Company could be blocked from acquiring the needed products. This factor could limit Ericsson’s ability to supply its customers and increase costs. At the
same time, Ericsson commits to certain capacity levels or component quantities, which, if unused, will result in charges for unused capacity, unrecoverable costs or the scrapping of costs used to procure such components. The Company is also exposed to financial counterpart risks to suppliers when Ericsson pays in advance for supplies. Such supply disruptions and cost increases may negatively affect the Company’s business, operating results and financial condition.
Ericsson is subject to certain US and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations and other regulatory requirements or conditions imposed as a result of foreign direct investment reviews and decisions. Ericsson may be subject to further adverse consequences under the Plea Agreement with the United States Department of Justice (DOJ) and the injunction issued in connection with the 2019 settlement with the U.S. Securities and Exchange Commission (SEC), as well as other ongoing investigations by governmental authorities.
As described in the Annual Report 2022, including in the risk factor 3.3, on January 12, 2023, the Company made a provision in the fourth quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation to the breaches of the Company’s 2019 deferred prosecution agreement (DPA) with the DOJ. The provision also included estimated expenses (SEK 0.1 billion) for the previously announced extended compliance monitorship. On March 2, 2023, the Company reached a resolution (Plea Agreement) with the DOJ regarding the non-criminal breaches of its DPA. Under the Plea Agreement, Ericsson pleaded guilty to previously deferred charges relating to conduct prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206,728,848. The entry of the Plea Agreement brought the DPA to an end. As set forth in the Plea Agreement, Ericsson has certain continuing obligations through June 2024, including cooperation, reporting evidence or allegations of potential Foreign Corrupt Practices Act (FCPA) violations, continuing to engage an independent compliance monitor and continuing to improve its compliance program and internal controls. If Ericsson fails to meet those obligations and is found to have breached the Plea Agreement, the Company could face further adverse consequences, including prosecution for additional federal criminal violations. Ericsson may also be subject to other adverse consequences as a result of entering into the Plea Agreement, including potential debarment from government contracting in the United States and elsewhere, reputational risk, and reluctance by other counterparties to continue business relationships, including customers, suppliers, financial institutions and insurers.
On May 24, 2023, Nasdaq Stockholm concluded its review of Ericsson’s public disclosure obligations concerning its 2019 Iraq internal investigation report and dismissed the matter, stating that Nasdaq could not conclude that a reasonable investor would have used the content of the report as part of an investment decision. After having reviewed Nasdaq Stockholm’s investigation and conclusion, on June 8, 2023, the Swedish Financial Supervisory Authority also decided to formally close its review of Ericsson’s prior disclosures relating to the 2019 Iraq internal investigation report.
As previously disclosed, the Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization. With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to investigate in full cooperation with the DOJ and the SEC. This includes a comprehensive review of the 2019 investigation and further investigation of matters relating to historical
| 13 Ericsson | Second quarter report 2023 | Risk factors | |
Table of Contents
operations in Iraq. As additional information continues to be identified and evaluated during the ongoing investigation, we expect that we will continue our cooperation with the DOJ and the SEC and that we will be unable to make conclusive determinations on the outcome of any such investigation until all pertinent information has been identified. The scope and duration of the remaining process are currently uncertain.
Ericsson is, from time to time, involved in lawsuits, legal proceedings and regulatory investigations, and is subject to certain other regulatory requirements, conditions and agreements, including a National Security Agreement entered into with the U.S. Government in connection with the acquisition of Vonage by Ericsson, and approval of the transaction by the Committee on Foreign Investment in the United States. If any of these lawsuits or legal proceedings are determined unfavorably against the Company or it is determined that the Company is not in compliance with any of these regulatory requirements, conditions or agreements, this could result in the Company being required to pay substantial damages, fines and/or penalties or becoming subject to additional enforcement actions, regulatory review and/or adverse decisions.
As mentioned in the Annual Report 2022, including in the risk factor 3.4, in April 2019, Ericsson was informed by China’s State Administration for Market Regulations (SAMR) Anti-monopoly bureau that SAMR has initiated an investigation into Ericsson’s patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact-finding and meetings with SAMR in order to facilitate the authority’s assessment and conclusions. In case of adverse findings, SAMR has the power to impose behavioral and financial remedies, which may have material adverse effects on Ericsson’s business, financial condition and operating results.
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 purchasers of Ericsson ADS in the United States, in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as a defendant. The amended complaint alleged violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq.
On May 24, 2023, the court granted Ericsson’s motion to dismiss and dismissed the case with prejudice, concluding that Ericsson did not violate any disclosure obligation to investors. On June 23, 2023, plaintiff filed a notice of appeal. Ericsson will continue to vigorously defend this matter.
In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. The lawsuit was brought by US military service members and employees of US government contractors who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against Ericsson under the US Anti-Terrorism Act alleging that Ericsson made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, the Company filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, named Ericsson AB, CEO Börje Ekholm and a former employee as additional defendants and asserted additional allegations and claims. In March 2023, the Ericsson corporate defendants and Mr. Ekholm filed motions to dismiss the amended complaint. On June 2, 2023, plaintiffs filed an opposition to defendants’ motion to dismiss the amended complaint. Defendants’ reply brief in support of their motion to dismiss was filed on July 12, 2023.
This report has not been reviewed by Telefonaktiebolaget LM Ericsson auditors.
Date for next report: 17 October 2023
| 14 Ericsson | Second quarter report 2023 | Risk factors | |
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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, 2023
Telefonaktiebolaget LM Ericsson (publ)
Org. Nr. 556016-0680
| Jan Carlson | Jacob Wallenberg | Jon Fredrik Baksaas | ||
| Chair | Deputy Chair | Member of the Board | ||
| Carolina Dybeck Happe | Börje Ekholm | Eric A. Elzvik | ||
| Member of the Board | President, CEO and member of the Board | Member of the Board | ||
| Kristin S. Rinne | Helena Stjernholm | Jonas Synnergren | ||
| Member of the Board | Member of the Board | Member of the Board | ||
| Christy Wyatt | ||||
| Member of the Board | ||||
| Torbjörn Nyman | Ulf Rosberg | Kjell-Åke Soting | ||
| Member of the Board | Member of the Board | Member of the Board | ||
| 15 Ericsson | Second quarter report 2023 | 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, 2023.
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
Alan Ganson, Director,
Investor Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@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
| 16 Ericsson | Second quarter report 2023 | Editor’s note | |
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Forward-looking statements
This report includes forward-looking statements. All statements other than statements of historical fact are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “likely,” “may,” “could,” “plan,” “estimate,” “forecast,” “will,” “should,” “would,” “predict,” “aim,” “seek,” “potential,” “target,” “might,” “continue” and similar words or expressions are used to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking statements, including, in particular the following:
| • | Potential material additional costs and liability resulting from our ongoing compliance with the terms of the Plea Agreement with the DOJ and extended monitorship |
| • | Potential to become a target for public scrutiny as a result of entering into the Plea Agreement with the DOJ, which could damage our reputation and materially and adversely affect our business and prospects |
| • | Risks resulting from entering into the Plea Agreement, including potential debarment from government contracting in the United States and elsewhere, reputational risk, as well as potential counterparty reluctance to continue business relationships |
| • | Potential material additional liability resulting from past conduct, including allegations of past conduct that remains unresolved or unknown in multiple jurisdictions including Iraq, which remains the subject of ongoing investigations by Ericsson and US governmental authorities |
| • | Risks related to internal controls and governance, including the potential to incur material liability in connection with internal controls surrounding payments made to third parties in connection with past conduct in multiple jurisdictions including Iraq which remains the subject of ongoing investigations by Ericsson and US governmental authorities |
| • | The risk that the ongoing investigations by Ericsson and US governmental authorities result in a conclusion by Ericsson or US governmental authorities that the Company’s past conduct included making or having responsibility for making payments to a terrorist organization or other improper payments, which could lead to material additional liability |
| • | Our goals, strategies, planning assumptions and operational or financial performance expectations |
| • | Ongoing geopolitical and trade uncertainty, including challenging global economic conditions, market trends and pandemics such as COVID-19 |
| • | Industry trends, future characteristics and development of the markets in which we operate |
| • | Our ability to comply with legal and regulatory requirements internationally |
| • | Risks related to cybersecurity and privacy |
| • | 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 |
| • | Our ability to deliver on future plans and achieve 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 |
| • | Trends related to our industry, including our regulatory environment, competition and customer structure |
| • | Other factors included in our filings with the U.S. Securities and Exchange Commission (the “SEC”), including the factors described throughout this report, included in the section Risk Factors, and in “Risk Factors” in the Annual Report 2022, as updated by subsequent reports filed with the SEC. |
These forward-looking statements also represent our estimates, assumptions and expectations only as of the date that they were made, and to the extent they represent third-party data, we have not undertaken to independently verify such third-party data and do not intend to do so. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements and are urged to carefully review and consider the various disclosures made in this report and in other documents we file from time to time with our regulators that disclose risks and uncertainties that may affect our business. 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, except as required by applicable law or stock exchange regulations.
| 17 Ericsson | Second quarter report 2023 | Forward-looking statements | |
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Financial statements and other information
| 18 Ericsson | Second quarter report 2023 | Financial statements and other information | |
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Financial statements (unaudited)
Condensed consolidated income statement
| Q2 | Jan-Jun | |||||||||||||||||||||||
| SEK million |
Note | 2023 | 2022 | Change | 2023 | 2022 | ||||||||||||||||||
| Net sales |
2 | 64,444 | 62,465 | 3 | % | 126,997 | 117,526 | |||||||||||||||||
| Cost of sales |
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-40,343 | -36,163 | 12% | -78,728 | -67,935 | |||||||||||||||||
| Gross income |
2 | 24,101 | 26,302 | -8 | % | 48,269 | 49,591 | |||||||||||||||||
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| Research and development expenses |
-13,777 | -11,496 | 20 | % | -25,749 | -22,201 | ||||||||||||||||||
| Selling and administrative expenses |
-10,643 | -7,872 | 35 | % | -19,761 | -14,460 | ||||||||||||||||||
| Impairment losses on trade receivables |
-313 | 3 | — | -362 | -177 | |||||||||||||||||||
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| Operating expenses |
-24,733 | -19,365 | 28 | % | -45,872 | -36,838 | ||||||||||||||||||
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| Other operating income and expenses |
264 | 393 | -33 | % | 291 | -672 | ||||||||||||||||||
| Share of earnings of JV and associated companies |
|
56 | -22 | -355 | % | 46 | -29 | |||||||||||||||||
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| Earnings before financial items and income tax (EBIT) |
2 | -312 | 7,308 | -104 | % | 2,734 | 12,052 | |||||||||||||||||
| Financial income and expenses, net |
3 | -419 | -759 | -45 | % | -1,336 | -1,402 | |||||||||||||||||
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| Income after financial items |
-731 | 6,549 | -111 | % | 1,398 | 10,650 | ||||||||||||||||||
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|||||||||||||
| Income tax |
134 | -1,899 | -107 | % | -420 | -3,088 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) |
-597 | 4,650 | -113 | % | 978 | 7,562 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) attributable to: |
||||||||||||||||||||||||
| Owners of the Parent Company |
-686 | 4,504 | 830 | 7,444 | ||||||||||||||||||||
| Non-controlling interests |
89 | 146 | 148 | 118 | ||||||||||||||||||||
| Other information |
||||||||||||||||||||||||
| Average number of shares, basic (million) |
8 | 3,330 | 3,330 | 3,330 | 3,330 | |||||||||||||||||||
| Earnings (loss) per share, basic (SEK) ¹) |
-0.21 | 1.36 | 0.25 | 2.24 | ||||||||||||||||||||
| Earnings (loss) per share, diluted (SEK) 2) |
-0.21 | 1.35 | 0.25 | 2.23 | ||||||||||||||||||||
| 1) | Based on net income attributable to owners of the Parent Company. |
| 2) | Potential ordinary shares are not considered when their conversion to ordinary shares would improve earnings per share. |
Condensed statement of comprehensive income
| Q2 | Jan-Jun | |||||||||||||||
| SEK million |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income (loss) |
-597 | 4,650 | 978 | 7,562 | ||||||||||||
| Other comprehensive income |
||||||||||||||||
| Items that will not be reclassified to profit or loss |
||||||||||||||||
| Remeasurements of defined benefits pension plans incl. asset ceiling |
4,078 | 7,543 | 3,907 | 14,469 | ||||||||||||
| Revaluation of borrowings due to change in credit risk |
-246 | 1,064 | -471 | 1,980 | ||||||||||||
| 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 |
-784 | -2,431 | -682 | -4,192 | ||||||||||||
| Items that have been or may be reclassified to profit or loss |
||||||||||||||||
| Cash flow hedge reserve |
||||||||||||||||
| Gains/losses arising during the period |
-2,402 | -1,295 | -2,698 | -1,174 | ||||||||||||
| Reclassification adjustments on gains/losses included in profit or loss |
236 | 43 | 444 | 85 | ||||||||||||
| Translation reserves |
||||||||||||||||
| Changes in translation reserves |
5,776 | 4,167 | 6,167 | 5,752 | ||||||||||||
| Reclassification to profit or loss |
-4 | -26 | -11 | -34 | ||||||||||||
| Share of other comprehensive income of JV and associated companies |
36 | 41 | 41 | 40 | ||||||||||||
| Tax on items that have been or may be reclassified to profit or loss |
446 | 258 | 464 | 224 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other comprehensive income, net of tax |
7,136 | 13,257 | 7,161 | 21,501 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total comprehensive income |
6,539 | 17,907 | 8,139 | 29,063 | ||||||||||||
| Total comprehensive income (loss) attributable to: |
||||||||||||||||
| Owners of the Parent Company |
6,455 | 17,896 | 8,020 | 29,133 | ||||||||||||
| Non-controlling interests |
84 | 11 | 119 | -70 | ||||||||||||
| 19 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Condensed consolidated balance sheet
| Jun 30 | Dec 31 | |||||||||||
| SEK million |
Note | 2023 | 2022 | |||||||||
| Assets |
||||||||||||
| Non-current assets |
||||||||||||
| Intangible assets |
||||||||||||
| Capitalized development expenses |
4,228 | 3,705 | ||||||||||
| Goodwill |
89,068 | 84,570 | ||||||||||
| Customer relationships, IPR and other intangible assets |
26,453 | 26,340 | ||||||||||
| Property, plant and equipment |
13,946 | 14,236 | ||||||||||
| Right-of-use assets |
7,238 | 7,870 | ||||||||||
| Financial assets |
||||||||||||
| Equity in JV and associated companies |
1,193 | 1,127 | ||||||||||
| Other investments in shares and participations |
5 | 2,353 | 2,074 | |||||||||
| Customer finance, non-current |
5 | 1,574 | 415 | |||||||||
| Interest-bearing securities, non-current |
5 | 4,878 | 9,164 | |||||||||
| Other financial assets, non-current |
5 | 7,158 | 6,839 | |||||||||
| Deferred tax assets |
22,443 | 19,394 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 180,532 | 175,734 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Current assets |
||||||||||||
| Inventories |
47,382 | 45,846 | ||||||||||
| Contract assets |
9,784 | 9,843 | ||||||||||
| Trade receivables |
5 | 49,191 | 48,413 | |||||||||
| Customer finance, current |
5 | 7,009 | 4,955 | |||||||||
| Current tax assets |
7,036 | 7,973 | ||||||||||
| Other current receivables |
11,580 | 9,688 | ||||||||||
| Interest-bearing securities, current |
5 | 8,513 | 8,736 | |||||||||
| Cash and cash equivalents |
5 | 22,331 | 38,349 | |||||||||
|
|
|
|
|
|
|
|||||||
| 162,826 | 173,803 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
343,358 | 349,537 | ||||||||||
|
|
|
|
|
|
|
|||||||
| Equity and liabilities |
||||||||||||
| Equity |
||||||||||||
| Stockholders’ equity |
133,869 | 134,814 | ||||||||||
| Non-controlling interest in equity of subsidiaries |
-1,514 | -1,510 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 132,355 | 133,304 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Non-current liabilities |
||||||||||||
| Post-employment benefits |
22,785 | 27,361 | ||||||||||
| Provisions, non-current |
4 | 5,263 | 3,959 | |||||||||
| Deferred tax liabilities |
4,887 | 4,784 | ||||||||||
| Borrowings, non-current |
5 | 23,476 | 26,946 | |||||||||
| Lease liabilities, non-current |
6,090 | 6,818 | ||||||||||
| Other non-current liabilities |
788 | 745 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 63,289 | 70,613 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Current liabilities |
||||||||||||
| Provisions, current |
4 | 6,742 | 7,629 | |||||||||
| Borrowings, current |
5 | 10,354 | 5,984 | |||||||||
| Lease liabilities, current |
2,616 | 2,486 | ||||||||||
| Contract liabilities |
44,237 | 42,251 | ||||||||||
| Trade payables |
5 | 35,463 | 38,437 | |||||||||
| Current tax liabilities |
2,665 | 2,640 | ||||||||||
| Other current liabilities |
45,637 | 46,193 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 147,714 | 145,620 | |||||||||||
|
|
|
|
|
|
|
|||||||
| Total equity and liabilities |
343,358 | 349,537 | ||||||||||
|
|
|
|
|
|
|
|||||||
| 20 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Condensed consolidated statement of cash flows
| Q2 | Jan-Jun | |||||||||||||||||||
| SEK million |
Note | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
| Operating activities |
||||||||||||||||||||
| Net income (loss) |
-597 | 4,650 | 978 | 7,562 | ||||||||||||||||
| Adjustments for |
||||||||||||||||||||
| Taxes |
-215 | 1,751 | 854 | 2,772 | ||||||||||||||||
| Earnings/ dividends in JV and associated companies |
-48 | 88 | -39 | 96 | ||||||||||||||||
| Depreciation, amortization and impairment losses |
6 | 2,813 | 2,224 | 5,905 | 4,370 | |||||||||||||||
| Other |
606 | 345 | 2,252 | 1,244 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 2,559 | 9,058 | 9,950 | 16,044 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Changes in operating net assets |
||||||||||||||||||||
| Inventories |
382 | -4,728 | 322 | -10,074 | ||||||||||||||||
| Customer finance, current and non-current |
558 | 134 | -2,726 | 11 | ||||||||||||||||
| Trade receivables and contract assets |
1,753 | 3,350 | 1,953 | 4,251 | ||||||||||||||||
| Trade payables |
-597 | 1,324 | -4,704 | -47 | ||||||||||||||||
| Provisions and post-employment benefits |
841 | -321 | -122 | 648 | ||||||||||||||||
| Contract liabilities |
-5,204 | -721 | 349 | 5,539 | ||||||||||||||||
| Other operating assets and liabilities, net |
-1,457 | -333 | -10,562 | -7,100 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| -3,724 | -1,295 | -15,490 | -6,772 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Interest received |
283 | -17 | 678 | 61 | ||||||||||||||||
| Interest paid |
-549 | -437 | -1,138 | -648 | ||||||||||||||||
| Taxes paid |
-1,451 | -1,022 | -2,707 | -2,368 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from operating activities |
-2,882 | 6,287 | -8,707 | 6,317 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investing activities |
||||||||||||||||||||
| Investments in property, plant and equipment |
6 | -806 | -1,053 | -1,760 | -1,871 | |||||||||||||||
| Sales of property, plant and equipment |
42 | 61 | 75 | 99 | ||||||||||||||||
| Acquisitions/divestments of subsidiaries and other operations, net |
-911 | 123 | -1,755 | 169 | ||||||||||||||||
| Product development |
6 | -562 | -301 | -1,137 | -589 | |||||||||||||||
| Purchase of interest-bearing securities |
-2,132 | -1,037 | -2,132 | -1,037 | ||||||||||||||||
| Sale of interest-bearing securities |
4,072 | 22,747 | 7,776 | 38,774 | ||||||||||||||||
| Other investing activities |
-2,116 | 1,384 | -1,110 | 805 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from investing activities |
-2,413 | 21,924 | -43 | 36,350 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Financing activities |
||||||||||||||||||||
| Proceeds from issuance of borrowings |
1,026 | — | 2,053 | 7,788 | ||||||||||||||||
| Repayment of borrowings |
-2,832 | -9,993 | -3,912 | -9,993 | ||||||||||||||||
| Dividends paid |
-4,591 | -4,164 | -4,591 | -4,164 | ||||||||||||||||
| Repayment of lease liabilities |
-690 | -577 | -1,383 | -1,170 | ||||||||||||||||
| Other financing activities |
18 | 243 | -6 | 812 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flow from financing activities |
-7,069 | -14,491 | -7,839 | -6,727 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Effect of exchange rate changes on cash |
562 | 3,042 | 571 | 3,628 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net change in cash and cash equivalents |
-11,802 | 16,762 | -16,018 | 39,568 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash and cash equivalents, beginning of period |
34,133 | 76,856 | 38,349 | 54,050 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash and cash equivalents, end of period |
22,331 | 93,618 | 22,331 | 93,618 | ||||||||||||||||
| 21 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Condensed consolidated statement of changes in equity
| Jan-Jun | ||||||||
| SEK million |
2023 | 2022 | ||||||
| Opening balance |
133,304 | 107,099 | ||||||
| Total comprehensive income |
8,139 | 29,063 | ||||||
| Sale/repurchase of own shares |
-50 | — | ||||||
| Share issue, net |
50 | — | ||||||
| Long-term variable compensation plans |
37 | 46 | ||||||
| Dividends to shareholders¹) |
-9,097 | -8,410 | ||||||
| Transactions with non-controlling interests |
— | 1 | ||||||
|
|
|
|
|
|||||
| Closing balance |
132,355 | 127,799 | ||||||
|
|
|
|
|
|||||
| 1) | Jan-Jun includes accrual of SEK 4,507 (4,173) million for the dividend approved by the Annual General Meeting on March 29, 2023. |
Condensed consolidated income statement – isolated quarters
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| Cost of sales |
-40,343 | -38,385 | -50,411 | -39,905 | -36,163 | -31,772 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross income |
24,101 | 24,168 | 35,569 | 28,135 | 26,302 | 23,289 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Research and development expenses |
-13,777 | -11,972 | -13,217 | -11,880 | -11,496 | -10,705 | ||||||||||||||||||
| Selling and administrative expenses |
-10,643 | -9,118 | -11,791 | -9,441 | -7,872 | -6,588 | ||||||||||||||||||
| Impairment losses on trade receivables |
-313 | -49 | 99 | 38 | 3 | -180 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating expenses |
-24,733 | -21,139 | -24,909 | -21,283 | -19,365 | -17,473 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Other operating income and expenses1) |
264 | 27 | -2,824 | 234 | 393 | -1,065 | ||||||||||||||||||
| Share of earnings of JV and associated companies |
56 | -10 | 17 | 29 | -22 | -7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Earnings before financial item s and income tax (EBIT) |
-312 | 3,046 | 7,853 | 7,115 | 7,308 | 4,744 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Financial income and expenses, net |
-419 | -917 | -474 | -535 | -759 | -643 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income after financial items |
-731 | 2,129 | 7,379 | 6,580 | 6,549 | 4,101 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income tax |
134 | -554 | -1,189 | -1,220 | -1,899 | -1,189 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) |
-597 | 1,575 | 6,190 | 5,360 | 4,650 | 2,912 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) attributable to: |
-686 | 1,516 | 6,066 | 5,214 | 4,504 | 2,940 | ||||||||||||||||||
| Owners of the Parent Company |
||||||||||||||||||||||||
| Non-controlling interests |
89 | 59 | 124 | 146 | 146 | -28 | ||||||||||||||||||
| Other information |
3,330 | 3,330 | 3,330 | 3,330 | 3,330 | 3,330 | ||||||||||||||||||
| Average number of shares, basic (million) |
||||||||||||||||||||||||
| Earnings (loss) per share, basic (SEK)²) |
-0.21 | 0.46 | 1.82 | 1.56 | 1.36 | 0.88 | ||||||||||||||||||
| Earnings (loss) per share, diluted (SEK)³) |
-0.21 | 0.45 | 1.82 | 1.56 | 1.35 | 0.88 | ||||||||||||||||||
| 1) | Q4 2022 includes a provision of SEK -2.3 billion in relation to a potential resolution with the United States Department of Justice regarding previously announced, non-criminal, alleged breaches under the deferred prosecution agreement (DPA), including estimated expenses for the extended compliance monitorship, noting that the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and agreed to pay a fine of approximately SEK 2.2 billion. Q3 2022 includes revaluation of Ericsson Ventures investments of SEK 0.2 billion. 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. |
| 2) | Based on net income (loss) 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. |
| 22 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Condensed consolidated statement of cash flows – isolated quarters
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Operating activities |
||||||||||||||||||||||||
| Net income (loss) |
-597 | 1,575 | 6,190 | 5,360 | 4,650 | 2,912 | ||||||||||||||||||
| Adjustments for |
-215 | 1,069 | 1,304 | 1,307 | 1,751 | 1,021 | ||||||||||||||||||
| Taxes |
||||||||||||||||||||||||
| Earnings/ dividends in JV and associated companies |
-48 | 9 | -24 | -17 | 88 | 8 | ||||||||||||||||||
| Depreciation, amortization and impairment losses |
2,813 | 3,092 | 3,535 | 2,638 | 2,224 | 2,146 | ||||||||||||||||||
| Other |
606 | 1,646 | 432 | -19 | 345 | 899 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2,559 | 7,391 | 11,437 | 9,269 | 9,058 | 6,986 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Changes in operating net assets |
||||||||||||||||||||||||
| Inventories |
382 | -60 | 5,898 | -3,564 | -4,728 | -5,346 | ||||||||||||||||||
| Customer finance, current and non-current |
558 | -3,284 | -871 | -872 | 134 | -123 | ||||||||||||||||||
| Trade receivables and contract assets |
1,753 | 200 | -4,080 | 4,595 | 3,350 | 901 | ||||||||||||||||||
| Trade payables |
-597 | -4,107 | -131 | -1,817 | 1,324 | -1,371 | ||||||||||||||||||
| Provisions and post-employment benefits |
841 | -963 | 1,749 | -58 | -321 | 969 | ||||||||||||||||||
| Contract liabilities |
-5,204 | 5,553 | 2,878 | -2,623 | -721 | 6,260 | ||||||||||||||||||
| Other operating assets and liabilities, net |
-1,457 | -9,105 | 5,235 | 1,052 | -333 | -6,767 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| -3,724 | -11,766 | 10,678 | -3,287 | -1,295 | -5,477 | |||||||||||||||||||
| Interest received |
283 | 395 | 127 | 156 | -17 | 78 | ||||||||||||||||||
| Interest paid |
-549 | -589 | -406 | -196 | -437 | -211 | ||||||||||||||||||
| Taxes paid/received |
-1,451 | -1,256 | -1,941 | -1,291 | -1,022 | -1,346 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash flow from operating activities |
-2,882 | -5,825 | 19,895 | 4,651 | 6,287 | 30 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Investing activities |
||||||||||||||||||||||||
| Investments in property, plant and equipment |
-806 | -954 | -1,502 | -1,104 | -1,053 | -818 | ||||||||||||||||||
| Sales of property, plant and equipment |
42 | 33 | 76 | 74 | 61 | 38 | ||||||||||||||||||
| Acquisitions/divestments of subs. and other operations, net |
-911 | -844 | -445 | -51,412 | 123 | 46 | ||||||||||||||||||
| Product development |
-562 | -575 | -717 | -414 | -301 | -288 | ||||||||||||||||||
| Purchase of interest-bearing securities |
-2,132 | — | -12,108 | -437 | -1,037 | — | ||||||||||||||||||
| Sale of interest-bearing securities |
4,072 | 3,704 | 789 | 978 | 22,747 | 16,027 | ||||||||||||||||||
| Other investing activities |
-2,116 | 1,006 | 2,012 | -6,537 | 1,384 | -579 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash flow from investing activities |
-2,413 | 2,370 | -11,895 | -58,852 | 21,924 | 14,426 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Financing activities |
||||||||||||||||||||||||
| Proceeds from issuance of borrowings |
1,026 | 1,027 | 1,301 | 1,666 | — | 7,788 | ||||||||||||||||||
| Re payment of borrowings |
-2,832 | -1,080 | -121 | -5,915 | -9,993 | — | ||||||||||||||||||
| Dividends paid |
-4,591 | — | -4,172 | -79 | -4,164 | — | ||||||||||||||||||
| Re payment of lease liabilities |
-690 | -693 | -765 | -658 | -577 | -593 | ||||||||||||||||||
| Other financing activities |
18 | -24 | -183 | -277 | 243 | 569 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash flow from financing activities |
-7,069 | -770 | -3,940 | -5,263 | -14,491 | 7,764 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Effect of exchange rate changes on cash |
562 | 9 | -2,460 | 2,595 | 3,042 | 586 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net change in cash and cash equivalents |
-11,802 | -4,216 | 1,600 | -56,869 | 16,762 | 22,806 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash and cash equivalents, beginning of period |
34,133 | 38,349 | 36,749 | 93,618 | 76,856 | 54,050 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Cash and cash equivalents, end of period |
22,331 | 34,133 | 38,349 | 36,749 | 93,618 | 76,856 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 23 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Condensed Parent Company income statement
| Q2 | Jan-Jun | |||||||||||||||
| SEK million |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net sales |
— | — | — | — | ||||||||||||
| Cost of sales |
— | — | — | — | ||||||||||||
| Gross income |
— | — | — | — | ||||||||||||
| Operating expenses |
-844 | -210 | -1,199 | -565 | ||||||||||||
| Other operating income and expenses |
1,076 | 644 | 1,930 | 1,253 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBIT |
232 | 434 | 731 | 688 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Financialnet¹) |
15,890 | 18,539 | 15,716 | 19,286 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income after financial items |
16,122 | 18,973 | 16,447 | 19,974 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Transfers to (-) / from untaxed reserves |
— | — | — | — | ||||||||||||
| Income tax¹) |
29 | -432 | -15 | -708 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
16,151 | 18,541 | 16,432 | 19,266 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 1) | Jan-June 2022 restated in accordance with the change in accounting described in Q4 2022 financial statements. |
Condensed Parent Company statement of comprehensive income
| Q2 | Jan-Jun | |||||||||||||||
| SEK million |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income (loss) |
16,151 | 18,541 | 16,432 | 19,266 | ||||||||||||
| Cash flow hedge reserve |
||||||||||||||||
| Gains/losses arising during the period |
— | 3,893 | — | 4,351 | ||||||||||||
| Transfer to investments |
— | — | — | — | ||||||||||||
| Tax on items that will not be reclassified to profit or loss |
— | -802 | — | -891 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income, net of tax |
— | 3,091 | — | 3,460 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total comprehensive income |
16,151 | 21,632 | 16,432 | 22,726 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 24 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Condensed Parent Company balance sheet
| Jun 30 | Dec 31 | |||||||
| SEK million |
2023 | 2022 | ||||||
| Assets |
||||||||
| Fixed assets |
||||||||
| Intangible assets |
2 | 4 | ||||||
| Tangible assets |
380 | 380 | ||||||
| Financial assets ¹) |
162,821 | 156,720 | ||||||
|
|
|
|
|
|||||
| 163,203 | 157,104 | |||||||
|
|
|
|
|
|||||
| Current assets |
||||||||
| Receivables |
24,319 | 27,664 | ||||||
| Short-term investments |
8,282 | 8,540 | ||||||
| Cash and cash equivalents |
7,608 | 23,731 | ||||||
|
|
|
|
|
|||||
| 40,209 | 59,935 | |||||||
|
|
|
|
|
|||||
| Total assets |
203,412 | 217,039 | ||||||
|
|
|
|
|
|||||
| Stockholders’ equity, provisions and liabilities |
||||||||
| Equity |
||||||||
| Restricted equity |
48,214 | 48,164 | ||||||
| Non-restricted equity |
45,156 | 37,753 | ||||||
|
|
|
|
|
|||||
| 93,370 | 85,917 | |||||||
|
|
|
|
|
|||||
| Provisions |
324 | 2,435 | ||||||
| Non-current liabilities |
23,352 | 26,835 | ||||||
| Current liabilities |
86,366 | 101,852 | ||||||
|
|
|
|
|
|||||
| Total stockholders’ equity, provisions and liabilities |
203,412 | 217,039 | ||||||
|
|
|
|
|
|||||
| ¹) Of which interest-bearing securities, non-current |
4,873 | 9,157 | ||||||
| 25 Ericsson | Second quarter report 2023 | Financial statements | |
Table of Contents
Accounting policies and Explanatory notes (unaudited)
The group
This condensed consolidated interim financial report for the reporting period ended June 30, 2023, has been prepared in accordance with 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, 2022 and should be read in conjunction with that annual report. There are no amendments of IFRS during 2023 that are effective for the interim period that are estimated to have a material impact on the result and financial position of the Company.
Changes applied as from Q1 2023
- IoT business reported in segment Other
The IoT business was divested in Q1 2023. As previously announced in Q4 2022 the IoT business has been transferred from segment Enterprise to segment Other in Q1 2023. In order to reflect the change all prior quarters in 2022 have been restated where applicable.
| 26 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Note 2 – Segment information*)
Net sales by segment by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
42,440 | 42,467 | 58,626 | 48,147 | 45,983 | 40,712 | ||||||||||||||||||
| Of which Products |
32,774 | 32,175 | 45,804 | 35,763 | 35,299 | 31,131 | ||||||||||||||||||
| Of which Services |
9,666 | 10,292 | 12,822 | 12,384 | 10,684 | 9,581 | ||||||||||||||||||
| Cloud Software and Services |
15,108 | 13,400 | 20,210 | 14,213 | 14,014 | 12,087 | ||||||||||||||||||
| Of which Products |
5,161 | 4,455 | 8,047 | 4,752 | 4,675 | 3,631 | ||||||||||||||||||
| Of which Services |
9,947 | 8,945 | 12,163 | 9,461 | 9,339 | 8,456 | ||||||||||||||||||
| Enterprise |
6,379 | 5,995 | 6,314 | 4,981 | 1,703 | 1,599 | ||||||||||||||||||
| Other |
517 | 691 | 830 | 699 | 765 | 663 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Sequential change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
0 | % | -28 | % | 22 | % | 5 | % | 13 | % | -20 | % | ||||||||||||
| Of which Products |
2 | % | -30 | % | 28 | % | 1 | % | 13 | % | -22 | % | ||||||||||||
| Of which Services |
-6 | % | -20 | % | 4 | % | 16 | % | 12 | % | -14 | % | ||||||||||||
| Cloud Software and Services |
13 | % | -34 | % | 42 | % | 1 | % | 16 | % | -33 | % | ||||||||||||
| Of which Products |
16 | % | -45 | % | 69 | % | 2 | % | 29 | % | -49 | % | ||||||||||||
| Of which Services |
11 | % | -26 | % | 29 | % | 1 | % | 10 | % | -22 | % | ||||||||||||
| Enterprise |
6 | % | -5 | % | 27 | % | 192 | % | 7 | % | 0 | % | ||||||||||||
| Other |
-25 | % | -17 | % | 19 | % | -9 | % | 15 | % | -3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3 | % | -27 | % | 26 | % | 9 | % | 13 | % | -23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
-8 | % | 4 | % | 15 | % | 19 | % | 15 | % | 12 | % | ||||||||||||
| Of which Products |
-7 | % | 3 | % | 15 | % | 15 | % | 16 | % | 13 | % | ||||||||||||
| Of which Services |
-10 | % | 7 | % | 15 | % | 30 | % | 13 | % | 9 | % | ||||||||||||
| Cloud Software and Services |
8 | % | 11 | % | 13 | % | 4 | % | 8 | % | 3 | % | ||||||||||||
| Of which Products |
10 | % | 23 | % | 13 | % | 4 | % | 18 | % | 2 | % | ||||||||||||
| Of which Services |
7 | % | 6 | % | 12 | % | 5 | % | 4 | % | 4 | % | ||||||||||||
| Enterprise |
275 | % | 275 | % | 295 | % | 256 | % | 20 | % | 47 | % | ||||||||||||
| Other |
-32 | % | 4 | % | 22 | % | 5 | % | 11 | % | -6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3 | % | 14 | % | 21 | % | 21 | % | 14 | % | 11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
84,907 | 42,467 | 193,468 | 134,842 | 86,695 | 40,712 | ||||||||||||||||||
| Of which Products |
64,949 | 32,175 | 147,997 | 102,193 | 66,430 | 31,131 | ||||||||||||||||||
| Of which Services |
19,958 | 10,292 | 45,471 | 32,649 | 20,265 | 9,581 | ||||||||||||||||||
| Cloud Software and Services |
28,508 | 13,400 | 60,524 | 40,314 | 26,101 | 12,087 | ||||||||||||||||||
| Of which Products |
9,616 | 4,455 | 21,105 | 13,058 | 8,306 | 3,631 | ||||||||||||||||||
| Of which Services |
18,892 | 8,945 | 39,419 | 27,256 | 17,795 | 8,456 | ||||||||||||||||||
| Enterprise |
12,374 | 5,995 | 14,597 | 8,283 | 3,302 | 1,599 | ||||||||||||||||||
| Other |
1,208 | 691 | 2,957 | 2,127 | 1,428 | 663 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
-2 | % | 4 | % | 15 | % | 16 | % | 14 | % | 12 | % | ||||||||||||
| Of which Products |
-2 | % | 3 | % | 15 | % | 15 | % | 15 | % | 13 | % | ||||||||||||
| Of which Services |
-2 | % | 7 | % | 17 | % | 18 | % | 11 | % | 9 | % | ||||||||||||
| Cloud Software and Services |
9 | % | 11 | % | 8 | % | 5 | % | 6 | % | 3 | % | ||||||||||||
| Of which Products |
16 | % | 23 | % | 10 | % | 8 | % | 10 | % | 2 | % | ||||||||||||
| Of which Services |
6 | % | 6 | % | 7 | % | 4 | % | 4 | % | 4 | % | ||||||||||||
| Enterprise |
275 | % | 275 | % | 165 | % | 112 | % | 31 | % | 47 | % | ||||||||||||
| Other |
-15 | % | 4 | % | 8 | % | 3 | % | 2 | % | -6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
8 | % | 14 | % | 17 | % | 15 | % | 12 | % | 11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| *) | Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. |
| 27 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Gross income by segment by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
16,318 | 16,869 | 26,056 | 21,366 | 20,735 | 18,211 | ||||||||||||||||||
| Cloud Software and Services |
4,944 | 4,476 | 6,664 | 4,516 | 4,692 | 4,234 | ||||||||||||||||||
| Enterprise |
2,954 | 2,841 | 2,885 | 2,429 | 900 | 882 | ||||||||||||||||||
| Other |
-115 | -18 | -36 | -176 | -25 | -38 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
24,101 | 24,168 | 35,569 | 28,135 | 26,302 | 23,289 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
33,187 | 16,869 | 86,368 | 60,312 | 38,946 | 18,211 | ||||||||||||||||||
| Cloud Software and Services |
9,420 | 4,476 | 20,106 | 13,442 | 8,926 | 4,234 | ||||||||||||||||||
| Enterprise |
5,795 | 2,841 | 7,096 | 4,211 | 1,782 | 882 | ||||||||||||||||||
| Other |
-133 | -18 | -275 | -239 | -63 | -38 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
48,269 | 24,168 | 113,295 | 77,726 | 49,591 | 23,289 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBIT (loss) by segment by quarter
| 2023 |
|
2022 |
|
|
||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
2,623 | 6,020 | 12,453 | 9,597 | 8,861 | 7,601 | ||||||||||||||||||
| Cloud Software and Services |
-1,200 | -942 | 673 | -792 | -733 | -837 | ||||||||||||||||||
| Enterprise |
-1,679 | -1,712 | -1,893 | -1,456 | -593 | -531 | ||||||||||||||||||
| Other |
-56 | -320 | -3,380 | -234 | -227 | -1,489 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-312 | 3,046 | 7,853 | 7,115 | 7,308 | 4,744 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 |
|
2022 |
|
|
||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
8,643 | 6,020 | 38,512 | 26,059 | 16,462 | 7,601 | ||||||||||||||||||
| Cloud Software and Services |
-2,142 | -942 | -1,689 | -2,362 | -1,570 | -837 | ||||||||||||||||||
| Enterprise |
-3,391 | -1,712 | -4,473 | -2,580 | -1,124 | -531 | ||||||||||||||||||
| Other |
-376 | -320 | -5,330 | -1,950 | -1,716 | -1,489 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,734 | 3,046 | 27,020 | 19,167 | 12,052 | 4,744 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| *) | Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. |
| 28 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by market area by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
13,839 | 13,911 | 11,239 | 7,914 | 7,962 | 5,836 | ||||||||||||||||||
| North East Asia |
5,062 | 4,363 | 8,396 | 5,597 | 7,319 | 5,421 | ||||||||||||||||||
| North America |
14,443 | 16,927 | 25,301 | 26,517 | 22,849 | 20,727 | ||||||||||||||||||
| Europe and Latin America ¹) 2) |
15,972 | 14,219 | 20,877 | 15,298 | 15,325 | 15,290 | ||||||||||||||||||
| Middle East and Africa |
5,348 | 4,186 | 7,379 | 5,668 | 5,223 | 4,301 | ||||||||||||||||||
| Other¹) 2) |
9,780 | 8,947 | 12,788 | 7,046 | 3,787 | 3,486 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ¹) Of which in Sweden |
370 | 611 | 778 | 833 | 950 | 678 | ||||||||||||||||||
| ²) Of which in EU |
8,054 | 8,205 | 10,495 | 8,242 | 8,511 | 8,611 | ||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Sequential change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
-1 | % | 24 | % | 42 | % | -1 | % | 36 | % | -32 | % | ||||||||||||
| North East Asia |
16 | % | -48 | % | 50 | % | -24 | % | 35 | % | -45 | % | ||||||||||||
| North America |
-15 | % | -33 | % | -5 | % | 16 | % | 10 | % | -7 | % | ||||||||||||
| Europe and Latin America ¹) 2) |
12 | % | -32 | % | 36 | % | 0 | % | 0 | % | -21 | % | ||||||||||||
| Middle East and Africa |
28 | % | -43 | % | 30 | % | 9 | % | 21 | % | -38 | % | ||||||||||||
| Other¹) 2) |
9 | % | -30 | % | 81 | % | 86 | % | 9 | % | -22 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3 | % | -27 | % | 26 | % | 9 | % | 13 | % | -23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ¹) Of which in Sweden |
-39 | % | -21 | % | -7 | % | -12 | % | 40 | % | -37 | % | ||||||||||||
| ²) Of which in EU |
-2 | % | -22 | % | 27 | % | -3 | % | -1 | % | -15 | % | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
74 | % | 138 | % | 31 | % | 23 | % | 12 | % | -13 | % | ||||||||||||
| North East Asia |
-31 | % | -20 | % | -14 | % | -2 | % | 3 | % | -16 | % | ||||||||||||
| North America |
-37 | % | -18 | % | 14 | % | 32 | % | 27 | % | 21 | % | ||||||||||||
| Europe and Latin America ¹) 2) |
4 | % | -7 | % | 9 | % | 6 | % | 9 | % | 21 | % | ||||||||||||
| Middle East and Africa |
2 | % | -3 | % | 6 | % | 14 | % | 17 | % | -2 | % | ||||||||||||
| Other¹) 2) |
158 | % | 157 | % | 186 | % | 53 | % | -12 | % | 40 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3 | % | 14 | % | 21 | % | 21 | % | 14 | % | 11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ¹) Of which in Sweden |
-61 | % | -10 | % | -28 | % | 74 | % | 135 | % | 74 | % | ||||||||||||
| ²) Of which in EU |
-5 | % | -5 | % | 3 | % | 17 | % | 17 | % | 27 | % | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| South East Asia, Oceania and India |
27,750 | 13,911 | 32,951 | 21,712 | 13,798 | 5,836 | ||||||||||||||||||
| North East Asia |
9,425 | 4,363 | 26,733 | 18,337 | 12,740 | 5,421 | ||||||||||||||||||
| North America |
31,370 | 16,927 | 95,394 | 70,093 | 43,576 | 20,727 | ||||||||||||||||||
| Europe and Latin America ¹) 2) |
30,191 | 14,219 | 66,790 | 45,913 | 30,615 | 15,290 | ||||||||||||||||||
| Middle East and Africa |
9,534 | 4,186 | 22,571 | 15,192 | 9,524 | 4,301 | ||||||||||||||||||
| Other¹) 2) |
18,727 | 8,947 | 27,107 | 14,319 | 7,273 | 3,486 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ¹) Of which in Sweden |
981 | 611 | 3,239 | 2,461 | 1,628 | 678 | ||||||||||||||||||
| ²) Of which in EU |
16,259 | 8,205 | 35,859 | 25,364 | 17,122 | 8,611 | ||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| 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 |
101 | % | 138 | % | 14 | % | 7 | % | 0 | % | -13 | % | ||||||||||||
| North East Asia |
-26 | % | -20 | % | -8 | % | -5 | % | -6 | % | -16 | % | ||||||||||||
| North America |
-28 | % | -18 | % | 23 | % | 27 | % | 24 | % | 21 | % | ||||||||||||
| Europe and Latin America ¹) 2) |
-1 | % | -7 | % | 11 | % | 12 | % | 15 | % | 21 | % | ||||||||||||
| Middle East and Africa |
0 | % | -3 | % | 9 | % | 10 | % | 8 | % | -2 | % | ||||||||||||
| Other¹) 2) |
157 | % | 157 | % | 71 | % | 26 | % | 7 | % | 40 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
8 | % | 14 | % | 17 | % | 15 | % | 12 | % | 11 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ¹) Of which in Sweden |
-40 | % | -10 | % | 38 | % | 94 | % | 105 | % | 74 | % | ||||||||||||
| ²) Of which in EU |
-5 | % | -5 | % | 15 | % | 20 | % | 22 | % | 27 | % | ||||||||||||
| 29 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by market area by segment
| Q2 2023 | Jan-Jun 2023 | |||||||||||||||||||||||||||||||||||||||
| SEK million |
Networks | Cloud Software and Services |
Enterprise | Other | Total | Networks | Cloud Software and Services |
Enterprise | Other | Total | ||||||||||||||||||||||||||||||
| South East Asia, Oceania and India |
11,675 | 2,154 | 9 | 1 | 13,839 | 23,212 | 4,512 | 17 | 9 | 27,750 | ||||||||||||||||||||||||||||||
| North East Asia |
3,980 | 1,072 | 5 | 5 | 5,062 | 7,253 | 2,103 | 13 | 56 | 9,425 | ||||||||||||||||||||||||||||||
| North America |
10,820 | 3,575 | 47 | 1 | 14,443 | 24,850 | 6,425 | 85 | 10 | 31,370 | ||||||||||||||||||||||||||||||
| Europe and Latin America |
10,445 | 5,454 | 73 | 0 | 15,972 | 19,827 | 10,200 | 94 | 70 | 30,191 | ||||||||||||||||||||||||||||||
| Middle East and Africa |
2,843 | 2,427 | 84 | -6 | 5,348 | 4,948 | 4,396 | 188 | 2 | 9,534 | ||||||||||||||||||||||||||||||
| Other¹) |
2,677 | 426 | 6,161 | 516 | 9,780 | 4,817 | 872 | 11,977 | 1,061 | 18,727 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
42,440 | 15,108 | 6,379 | 517 | 64,444 | 84,907 | 28,508 | 12,374 | 1,208 | 126,997 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Share of total |
66 | % | 23 | % | 10 | % | 1 | % | 100 | % | 67 | % | 22 | % | 10 | % | 1 | % | 100 | % | ||||||||||||||||||||
| 1) | Includes primarily IPR licensing revenues and a major part of segment Enterprise. |
| Q2 2023 | ||||||||||||||||||||
| Sequential change, percent |
Networks | Cloud Software and Services |
Enterprise | Other | Total | |||||||||||||||
| South East Asia, Oceania and India |
1 | % | -9 | % | 13 | % | -88 | % | -1 | % | ||||||||||
| North East Asia |
22 | % | 4 | % | -38 | % | -90 | % | 16 | % | ||||||||||
| North America |
-23 | % | 25 | % | 24 | % | -89 | % | -15 | % | ||||||||||
| Europe and Latin America |
11 | % | 15 | % | 248 | % | -100 | % | 12 | % | ||||||||||
| Middle East and Africa |
35 | % | 23 | % | -19 | % | -175 | % | 28 | % | ||||||||||
| Other |
25 | % | -4 | % | 6 | % | -5 | % | 9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
0 | % | 13 | % | 6 | % | -25 | % | 3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Q2 2023 | Jan-Jun 2023 | |||||||||||||||||||||||||||||||||||||||
| Year over year change, percent |
Networks | Cloud Software and Services |
Enterprise | Other | Total | Networks | Cloud Software and Services |
Enterprise | Other | Total | ||||||||||||||||||||||||||||||
| South East Asia, Oceania and India |
104 | % | -3 | % | 200 | % | -88 | % | 74 | % | 141 | % | 9 | % | 240 | % | -25 | % | 101 | % | ||||||||||||||||||||
| North East Asia |
-36 | % | 2 | % | 150 | % | -90 | % | -31 | % | -33 | % | 12 | % | 225 | % | -47 | % | -26 | % | ||||||||||||||||||||
| North America |
-46 | % | 21 | % | 840 | % | -92 | % | -37 | % | -35 | % | 18 | % | 400 | % | -57 | % | -28 | % | ||||||||||||||||||||
| Europe and Latin America |
3 | % | 8 | % | 329 | % | -100 | % | 4 | % | -5 | % | 6 | % | 176 | % | -62 | % | -1 | % | ||||||||||||||||||||
| Middle East and Africa |
5 | % | 0 | % | 27 | % | -186 | % | 2 | % | 1 | % | -2 | % | 36 | % | -80 | % | 0 | % | ||||||||||||||||||||
| Other |
103 | % | 59 | % | 283 | % | -13 | % | 158 | % | 88 | % | 68 | % | 286 | % | -3 | % | 157 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total |
-8 | % | 8 | % | 275 | % | -32 | % | 3 | % | -2 | % | 9 | % | 275 | % | -15 | % | 8 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| 30 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Top 5 countries in sales
| Q2 | Jan-Jun | |||||||||||||||
| Country, percentage of net sales 1) |
2023 | 2022 | 2023 | 2022 | ||||||||||||
| United States |
32 | % | 38 | % | 35 | % | 38 | % | ||||||||
| India |
14 | % | 3 | % | 12 | % | 3 | % | ||||||||
| China |
5 | % | 5 | % | 3 | % | 5 | % | ||||||||
| United Kingdom |
3 | % | 4 | % | 3 | % | 4 | % | ||||||||
| Japan |
2 | % | 4 | % | 3 | % | 4 | % | ||||||||
| 1) | Based on Jan-Jun 2023. Includes IPR licensing revenues. |
IPR licensing revenues by segment by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
2,603 | 2,041 | 4,917 | 1,282 | 1,186 | 1,142 | ||||||||||||||||||
| Cloud Software and Services |
572 | 448 | 1,080 | 281 | 261 | 250 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3,175 | 2,489 | 5,997 | 1,563 | 1,447 | 1,392 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
4,644 | 2,041 | 8,527 | 3,610 | 2,328 | 1,142 | ||||||||||||||||||
| Cloud Software and Services |
1,020 | 448 | 1,872 | 792 | 511 | 250 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
5,664 | 2,489 | 10,399 | 4,402 | 2,839 | 1,392 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Note 3 – Financial income and expenses, net
Financial income and expenses, net
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Financial income |
639 | 517 | 283 | 319 | 117 | 59 | ||||||||||||||||||
| Financial expenses |
-942 | -865 | -757 | -428 | -452 | -293 | ||||||||||||||||||
| Net foreign exchange gains/losses |
-116 | -569 | — | -426 | -424 | -409 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-419 | -917 | -474 | -535 | -759 | -643 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Financial income |
1,156 | 517 | 778 | 495 | 176 | 59 | ||||||||||||||||||
| Financial expenses |
-1,807 | -865 | -1,930 | -1,173 | -745 | -293 | ||||||||||||||||||
| Net foreign exchange gains/losses |
-685 | -569 | -1,259 | -1,259 | -833 | -409 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-1,336 | -917 | -2,411 | -1,937 | -1,402 | -643 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 31 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Provisions
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Opening balance |
10,541 | 11,588 | 10,562 | 9,668 | 10,197 | 9,504 | ||||||||||||||||||
| Additions 1) |
4,760 | 1,699 | 4,304 | 351 | 547 | 1,583 | ||||||||||||||||||
| Utilization |
-2,953 | -2,463 | -1,974 | -533 | -893 | -1,173 | ||||||||||||||||||
| Of which restructuring |
-423 | -274 | -150 | -70 | -51 | -67 | ||||||||||||||||||
| Reversal of excess amounts |
-564 | -224 | -1,034 | -236 | -316 | -452 | ||||||||||||||||||
| Reclassification, translation difference and other |
221 | -59 | -270 | 1,312 | 133 | 735 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Closing balance |
12,005 | 10,541 | 11,588 | 10,562 | 9,668 | 10,197 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Of which restructuring |
4,413 | 1,096 | 668 | 595 | 579 | 604 | ||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Opening balance |
11,588 | 11,588 | 9,504 | 9,504 | 9,504 | 9,504 | ||||||||||||||||||
| Additions 1) |
6,459 | 1,699 | 6,785 | 2,481 | 2,130 | 1,583 | ||||||||||||||||||
| Utilization |
-5,416 | -2,463 | -4,573 | -2,599 | -2,066 | -1,173 | ||||||||||||||||||
| Of which restructuring |
-697 | -274 | -338 | -188 | -118 | -67 | ||||||||||||||||||
| Reversal of excess amounts |
-788 | -224 | -2,038 | -1,004 | -768 | -452 | ||||||||||||||||||
| Reclassification, translation difference and other |
162 | -59 | 1,910 | 2,180 | 868 | 735 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Closing balance |
12,005 | 10,541 | 11,588 | 10,562 | 9,668 | 10,197 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Of which restructuring |
4,413 | 1,096 | 668 | 595 | 579 | 604 | ||||||||||||||||||
| 1) | Q2 2023 mainly relates to restructuring provisions for the cost-reduction activities. Q4 2022 includes a provision of SEK -2.3 billion in relation to a potential resolution with the United States Department of Justice regarding previously announced, non-criminal, alleged breaches under the deferred prosecution agreement (DPA), including estimated expenses for the extended compliance monitorship, noting that the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and the provision was utilized in Q2 2023. |
| 32 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Note 5 – Financial risk management
Since Q1, liquidity portfolios in some subsidiaries have been managed globally on a fair value basis, therefore deposits (cash equivalents) held in these portfolios are classified as fair value through P&L (previously classified as amortized costs). In Q2, the Company issued Commercial Papers for short term liquidity purposes, therefore these are classified as amortized costs liability. There have been no changes to the 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 2023 | Dec 31 2022 | ||||||||||||||||||||||||||||||
| 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 finance 1) |
8.6 | — | — | 8.6 | 5.4 | — | — | 5.4 | ||||||||||||||||||||||||
| Interest-bearing securities |
12.8 | 12.8 | — | — | 17.5 | 17.5 | — | — | ||||||||||||||||||||||||
| Cash equivalents 2) |
5.8 | — | 5.8 | — | 15.7 | — | 15.7 | — | ||||||||||||||||||||||||
| Other financial assets |
2.4 | 0.1 | — | 2.2 | 2.1 | 0.1 | — | 2.0 | ||||||||||||||||||||||||
| Other current assets |
0.5 | — | 0.5 | — | 1.1 | — | 1.1 | — | ||||||||||||||||||||||||
| Assets at fair value through OCI |
||||||||||||||||||||||||||||||||
| Trade receivables |
49.2 | — | — | 49.1 | 48.4 | — | — | 48.4 | ||||||||||||||||||||||||
| Assets at amortized costs |
||||||||||||||||||||||||||||||||
| Interest-bearing securities |
0.6 | — | — | — | 0.4 | — | — | — | ||||||||||||||||||||||||
| Cash equivalents 2) |
— | — | — | — | 2.9 | — | — | — | ||||||||||||||||||||||||
| Other financial assets |
0.6 | — | — | — | 0.6 | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total financial assets |
80.5 | 94.1 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Financial liabilities at designated FVTPL |
||||||||||||||||||||||||||||||||
| Parent company borrowings |
-28.6 | -18.4 | -10.3 | — | -29.6 | -16.7 | -12.9 | — | ||||||||||||||||||||||||
| Financial liabilities at FVTPL |
||||||||||||||||||||||||||||||||
| Other current liabilities |
-3.8 | — | -3.8 | — | -2.6 | — | -2.6 | — | ||||||||||||||||||||||||
| Liabilities at amortized cost |
||||||||||||||||||||||||||||||||
| Trade payables |
-35.5 | — | — | — | -38.4 | — | — | — | ||||||||||||||||||||||||
| Borrowings |
-5.2 | — | — | — | -3.3 | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total financial liabilities |
-73.1 | -73.9 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 1) | Year to date movements of customer finance receivables are as follows: additions of SEK 23.0 billion, disposals and repayments of SEK 20.0 billion and revaluation gain of SEK 0.1 billion. |
| 2) | Total Cash and cash equivalent is SEK 22.3 (38.3 on Dec 31, 2022) billion, of which SEK 5.8 (18.6 on Dec 31, 2022) billion relating to Cash equivalents are presented in the table above. |
Exchange rates used in the consolidation
| Jan-Jun | Jan-Dec | |||||||||||
| 2023 | 2022 | 2022 | ||||||||||
| SEK/EUR -closing rate |
11.81 | 10.73 | 11.08 | |||||||||
| SEK/USD -closing rate |
10.88 | 10.31 | 10.38 | |||||||||
| 33 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Information on investments
Investments in assets subject to depreciation, amortization, impairment and write-downs
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Additions |
||||||||||||||||||||||||
| Property, plant and equipment |
806 | 954 | 1,502 | 1,104 | 1,053 | 818 | ||||||||||||||||||
| Capitalized development expenses |
562 | 575 | 717 | 414 | 301 | 288 | ||||||||||||||||||
| IPR, brands and other intangible assets |
94 | 2 | 120 | 2 | 2 | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
1,462 | 1,531 | 2,339 | 1,520 | 1,356 | 1,108 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Depreciation, amortization and impairment losses |
||||||||||||||||||||||||
| Property, plant and equipment |
1,066 | 1,183 | 1,250 | 1,100 | 1,074 | 964 | ||||||||||||||||||
| Capitalized development expenses |
244 | 397 | 395 | 387 | 403 | 401 | ||||||||||||||||||
| Goodwill, IPR, brands and other intangible assets |
853 | 803 | 1,196 | 499 | 159 | 198 | ||||||||||||||||||
| Right-of-use assets |
650 | 709 | 694 | 652 | 588 | 583 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,813 | 3,092 | 3,535 | 2,638 | 2,224 | 2,146 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Additions |
||||||||||||||||||||||||
| Property, plant and equipment |
1,760 | 954 | 4,477 | 2,975 | 1,871 | 818 | ||||||||||||||||||
| Capitalized development expenses |
1,137 | 575 | 1,720 | 1,003 | 589 | 288 | ||||||||||||||||||
| IPR, brands and other intangible assets |
96 | 2 | 126 | 6 | 4 | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,993 | 1,531 | 6,323 | 3,984 | 2,464 | 1,108 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Depreciation, amortization and impairment losses |
||||||||||||||||||||||||
| Property, plant and equipment |
2,249 | 1,183 | 4,388 | 3,138 | 2,038 | 964 | ||||||||||||||||||
| Capitalized development expenses |
641 | 397 | 1,586 | 1,191 | 804 | 401 | ||||||||||||||||||
| Goodwill, IPR, brands and other intangible assets |
1,656 | 803 | 2,052 | 856 | 357 | 198 | ||||||||||||||||||
| Right-of-use assets |
1,359 | 709 | 2,517 | 1,823 | 1,171 | 583 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
5,905 | 3,092 | 10,543 | 7,008 | 4,370 | 2,146 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Note 7 – Contingent liabilities and Assets pledged as collateral
Contingent liabilities and Assets pledged as collateral
| SEK million |
Jun 30 2023 |
Dec 31 2022 |
||||||
| Contingent liabilities |
3,450 | 3,322 | ||||||
| Assets pledged as collateral |
7,964 | 7,226 | ||||||
| 34 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
Number of shares and earnings per share
| Q2 | Jan-Jun | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Number of shares, end of period (million) |
3,344 | 3,334 | 3,344 | 3,334 | ||||||||||||
| Of which class A-shares (million) |
262 | 262 | 262 | 262 | ||||||||||||
| Of which class B-shares (million) |
3,082 | 3,072 | 3,082 | 3,072 | ||||||||||||
| Number of treasury shares, end of period (million) |
14 | 4 | 14 | 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) |
3,337 | 3,334 | 3,337 | 3,334 | ||||||||||||
| Average number of treasury shares (million) |
11 | 4 | 7 | 4 | ||||||||||||
| Average number of shares outstanding, basic (million) |
3,330 | 3,330 | 3,330 | 3,330 | ||||||||||||
| Average number of shares outstanding, diluted (million)¹) |
3,337 | 3,334 | 3,337 | 3,334 | ||||||||||||
| Earnings(loss) per share, basic (SEK)²) |
-0.21 | 1.36 | 0.25 | 2.24 | ||||||||||||
| Earnings(loss) per share, diluted (SEK)¹) |
-0.21 | 1.35 | 0.25 | 2.23 | ||||||||||||
| 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 2.70 per share was approved by the AGM on March 29, 2023. The first of two equal dividend payouts were made in the first week of April 2023. The second payout will be in October 2023.
The increased number of B-shares is a result of a shareholder resolution to issue C-shares and convert to B-shares. The offer is part of the financing of Ericsson’s Long-Term Variable Compensation Programs LTV II 2023, LTV 2022 and LTV 2021 and includes 10 million C-shares which the AGM 2023 resolved to issue to Investor AB for these programs. The 10 million acquired C-shares have been converted to B-shares. After the conversion, the total number of shares in Ericsson amount to 3,344,151,735, of which 261,755,983 are A shares and 3,082,395,752 are B-shares.
Number of employees
| 2023 | 2022 | |||||||||||||||||||||||
| End of period |
Jun 30 | Mar31 | Dec31 | Sep 30 | Jun 30 | Mar31 | ||||||||||||||||||
| South East Asia, Oceania and India |
27,726 | 27,981 | 27,761 | 26,844 | 26,127 | 26,255 | ||||||||||||||||||
| North East Asia |
12,602 | 13,136 | 13,207 | 13,219 | 13,077 | 12,999 | ||||||||||||||||||
| North America |
11,518 | 11,765 | 11,993 | 11,706 | 10,501 | 10,327 | ||||||||||||||||||
| Europe and Latin America¹) |
47,521 | 47,500 | 48,023 | 48,144 | 47,240 | 46,994 | ||||||||||||||||||
| Middle East and Africa |
4,523 | 4,549 | 4,545 | 4,577 | 4,514 | 4,492 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
103,890 | 104,931 | 105,529 | 104,490 | 101,459 | 101,067 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| ¹)Of which in Sweden |
14,713 | 14,384 | 14,481 | 14,444 | 14,564 | 14,195 | ||||||||||||||||||
Note 10 – Business combinations
On April 3, 2023, Cradlepoint, a part of Ericsson, made a small acquisition and acquired 100% of the shares in Israel-based Ericom Software Limited in an all cash transaction. Ericom, with their advanced enterprise cloud security platform, will solidify Cradlepoint’s SASE (secure access service edge) and zero trust offerings for hybrid 5G and wireline environments. Goodwill in this transaction represents future technology and technology synergies and is not expected to be deductible for tax purposes. Balances to facilitate the purchase price allocation are preliminary.
| 35 Ericsson | Second quarter report 2023 | 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 2022.
| 36 Ericsson | Second quarter report 2023 | Accounting policies and Explanatory notes | |
Table of Contents
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.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, year over year change |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Reported net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| Acquired business |
-4,154 | -3,894 | -4,090 | -2,925 | — | — | ||||||||||||||||||
| Net FX impact |
-3,662 | -3,596 | -9,489 | -7,437 | -5,034 | -4,008 | ||||||||||||||||||
| Comparable net sales, excluding FX impact |
56,628 | 55,063 | 72,401 | 57,678 | 57,431 | 51,053 | ||||||||||||||||||
| Comparable quarter net sales adj. for acq/div business |
62,292 | 55,061 | 71,332 | 56,263 | 54,941 | 49,778 | ||||||||||||||||||
| Sales growth adjusted for comparable units and currency (%) |
-9 | % | 0 | % | 1 | % | 3 | % | 5 | % | 3 | % | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, year over year change |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Reported net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| Acquired business |
-8,048 | -3,894 | -7,015 | -2,925 | — | — | ||||||||||||||||||
| Net FX impact |
-7,258 | -3,596 | -25,968 | -16,479 | -9,042 | -4,008 | ||||||||||||||||||
| Comparable net sales, excluding FX impact |
111,691 | 55,063 | 238,563 | 166,162 | 108,484 | 51,053 | ||||||||||||||||||
| Comparable quarter net sales adj. for acq/div business |
117,353 | 55,061 | 232,314 | 160,982 | 104,719 | 49,778 | ||||||||||||||||||
| Sales growth adjusted for comparable units and currency (%) |
-5 | % | 0 | % | 3 | % | 3 | % | 4 | % | 3 | % | ||||||||||||
| 37 Ericsson | Second quarter report 2023 | 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.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Gross income |
24,101 | 24,168 | 35,569 | 28,135 | 26,302 | 23,289 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| Gross margin (%) |
37.4 | % | 38.6 | % | 41.4 | % | 41.4 | % | 42.1 | % | 42.3 | % | ||||||||||||
| Gross income |
24,101 | 24,168 | 35,569 | 28,135 | 26,302 | 23,289 | ||||||||||||||||||
| Restructuring charges included in cost of sales |
552 | 746 | 96 | 55 | 42 | 2 | ||||||||||||||||||
| Gross income excluding restructuring charges |
24,653 | 24,914 | 35,665 | 28,190 | 26,344 | 23,291 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| Gross margin excluding restructuring charges (%) |
38.3 | % | 39.8 | % | 41.5 | % | 41.4 | % | 42.2 | % | 42.3 | % | ||||||||||||
| Operating expenses |
-24,733 | -21,139 | -24,909 | -21,283 | -19,365 | -17,473 | ||||||||||||||||||
| Restructuring charges included in R&D expenses |
1,659 | 91 | 10 | 7 | 4 | 33 | ||||||||||||||||||
| Restructuring charges included in selling and administrative expenses |
922 | 143 | 122 | 19 | 3 | 6 | ||||||||||||||||||
| Operating expenses excluding restructuring charges |
-22,152 | -20,905 | -24,777 | -21,257 | -19,358 | -17,434 | ||||||||||||||||||
| EBIT (loss) |
-312 | 3,046 | 7,853 | 7,115 | 7,308 | 4,744 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| EBIT margin (%) |
-0.5 | % | 4.9 | % | 9.1 | % | 10.5 | % | 11.7 | % | 8.6 | % | ||||||||||||
| EBIT (loss) |
-312 | 3,046 | 7,853 | 7,115 | 7,308 | 4,744 | ||||||||||||||||||
| Total restructuring charges |
3,133 | 980 | 228 | 81 | 49 | 41 | ||||||||||||||||||
| EBIT excluding restructuring charges |
2,821 | 4,026 | 8,081 | 7,196 | 7,357 | 4,785 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| EBIT margin excluding restructuring charges (%) |
4.4 | % | 6.4 | % | 9.4 | % | 10.6 | % | 11.8 | % | 8.7 | % | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Gross income |
48,269 | 24,168 | 113,295 | 77,726 | 49,591 | 23,289 | ||||||||||||||||||
| Net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| Gross margin (%) |
38.0 | % | 38.6 | % | 41.7 | % | 41.9 | % | 42.2 | % | 42.3 | % | ||||||||||||
| Gross income |
48,269 | 24,168 | 113,295 | 77,726 | 49,591 | 23,289 | ||||||||||||||||||
| Restructuring charges included in cost of sales |
1,298 | 746 | 195 | 99 | 44 | 2 | ||||||||||||||||||
| Gross income excluding restructuring charges |
49,567 | 24,914 | 113,490 | 77,825 | 49,635 | 23,291 | ||||||||||||||||||
| Net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| Gross margin excluding restructuring charges (%) |
39.0 | % | 39.8 | % | 41.8 | % | 41.9 | % | 42.2 | % | 42.3 | % | ||||||||||||
| Operating expenses |
-45,872 | -21,139 | -83,030 | -58,121 | -36,838 | -17,473 | ||||||||||||||||||
| Restructuring charges included in R&D expenses |
1,750 | 91 | 54 | 44 | 37 | 33 | ||||||||||||||||||
| Restructuring charges included in selling and administrative expenses |
1,065 | 143 | 150 | 28 | 9 | 6 | ||||||||||||||||||
| Operating expenses excluding restructuring charges |
-43,057 | -20,905 | -82,826 | -58,049 | -36,792 | -17,434 | ||||||||||||||||||
| EBIT |
2,734 | 3,046 | 27,020 | 19,167 | 12,052 | 4,744 | ||||||||||||||||||
| Net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| EBIT margin (%) |
2.2 | % | 4.9 | % | 10.0 | % | 10.3 | % | 10.3 | % | 8.6 | % | ||||||||||||
| EBIT |
2,734 | 3,046 | 27,020 | 19,167 | 12,052 | 4,744 | ||||||||||||||||||
| Total restructuring charges |
4,113 | 980 | 399 | 171 | 90 | 41 | ||||||||||||||||||
| EBIT excluding restructuring charges |
6,847 | 4,026 | 27,419 | 19,338 | 12,142 | 4,785 | ||||||||||||||||||
| Net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| EBIT margin excluding restructuring charges (%) |
5.4 | % | 6.4 | % | 10.1 | % | 10.4 | % | 10.3 | % | 8.7 | % | ||||||||||||
| 38 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges
Earnings before interest, taxes, amortizations and write-downs of acquired intangibles also expressed as a percentage of net sales.
EBITA excluding restructuring charges also expressed as a percentage of net sales.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net income (loss) |
-597 | 1,575 | 6,190 | 5,360 | 4,650 | 2,912 | ||||||||||||||||||
| Income tax |
-134 | 554 | 1,189 | 1,220 | 1,899 | 1,189 | ||||||||||||||||||
| Financial income and expenses, net |
419 | 917 | 474 | 535 | 759 | 643 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles¹) |
854 | 802 | 1,196 | 498 | 158 | 199 | ||||||||||||||||||
| EBITA |
542 | 3,848 | 9,049 | 7,613 | 7,466 | 4,943 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| EBITA margin (%) |
0.8 | % | 6.2 | % | 10.5 | % | 11.2 | % | 12.0 | % | 9.0 | % | ||||||||||||
| Restructuring charges |
3,133 | 980 | 228 | 81 | 49 | 41 | ||||||||||||||||||
| EBITA excluding restructuring charges |
3,675 | 4,828 | 9,277 | 7,694 | 7,515 | 4,984 | ||||||||||||||||||
| EBITA margin excluding restructuring charges (%) |
5.7 | % | 7.7 | % | 10.8 | % | 11.3 | % | 12.0 | % | 9.1 | % | ||||||||||||
| 1) | Of which segment Enterprise 788 in Q2 2023, 767 in Q1 2023, 1,062 in Q4 2022, 447 in Q3 2022, 107 in Q2 2022 and 117 in Q1 2022. |
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Net income |
978 | 1,575 | 19,112 | 12,922 | 7,562 | 2,912 | ||||||||||||||||||
| Income tax |
420 | 554 | 5,497 | 4,308 | 3,088 | 1,189 | ||||||||||||||||||
| Financial income and expenses, net |
1,336 | 917 | 2,411 | 1,937 | 1,402 | 643 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles¹) |
1,656 | 802 | 2,051 | 855 | 357 | 199 | ||||||||||||||||||
| EBITA |
4,390 | 3,848 | 29,071 | 20,022 | 12,409 | 4,943 | ||||||||||||||||||
| Net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| EBITA margin (%) |
3.5 | % | 6.2 | % | 10.7 | % | 10.8 | % | 10.6 | % | 9.0 | % | ||||||||||||
| Restructuring charges |
4,113 | 980 | 399 | 171 | 90 | 41 | ||||||||||||||||||
| EBITA excluding restructuring charges |
8,503 | 4,828 | 29,470 | 20,193 | 12,499 | 4,984 | ||||||||||||||||||
| EBITA margin excluding restructuring charges (%) |
6.7 | % | 7.7 | % | 10.9 | % | 10.9 | % | 10.6 | % | 9.1 | % | ||||||||||||
| 1) | Of which segment Enterprise 1,555 in Jan-Jun, 767 in Jan-Mar 2023, 1,733 in Jan-Dec 2022, 671 in Jan-Sep 2022, 224 in Jan-Jun 2022 and 117 in Jan-Mar 2022. |
Additionally, Ericsson provides forward-looking targets for EBITA margin excluding restructuring charges and free cash flow before M&A, which are non-IFRS financial measures. Ericsson has not provided quantitative reconciliation of these targets to the most directly comparable IFRS measures because certain information needed to reconcile these non-IFRS financial measures to the most comparable IFRS financial measures are dependent on specific items or impacts that are not yet determined, are subject to incarcerating and variability in timing and amount due to their nature, are outside of Ericsson’s control or cannot be predicted, including items and impacts such as currency exchange rate changes, acquisitions and disposals, and charges such as impairments or acquisition related charges. Accordingly, reconciliation of these non-IFRS forward-looking financial measures to the most directly comparable IFRS financial measures are not available without unreasonable efforts. Such unavailable reconciling items could significantly impact our results of operations and financial condition.
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.
| 2023 | 2022 | |||||||||||||||||||||||
| Rolling four quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net sales |
281,017 | 279,038 | 271,546 | 256,898 | 245,121 | 237,597 | ||||||||||||||||||
| EBIT |
17,702 | 25,322 | 27,020 | 31,028 | 32,748 | 31,263 | ||||||||||||||||||
| Restructuring charges |
4,422 | 1,338 | 399 | 634 | 558 | 513 | ||||||||||||||||||
| EBIT excl. restr. charges |
22,124 | 26,660 | 27,419 | 31,662 | 33,306 | 31,776 | ||||||||||||||||||
| EBIT margin excl. restr. charges (% ) |
7.9 | % | 9.6 | % | 10.1 | % | 12.3 | % | 13.6 | % | 13.4 | % | ||||||||||||
| 39 Ericsson | Second quarter report 2023 | 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).
| 2023 | 2022 | |||||||||||||||||||||||
| SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Cash and cash equivalents |
22,331 | 34,133 | 38,349 | 36,749 | 93,618 | 76,856 | ||||||||||||||||||
| + Interest-bearing securities, current |
8,513 | 9,259 | 8,736 | 6,640 | 3,715 | 12,292 | ||||||||||||||||||
| + Interest-bearing securities, non-current |
4,878 | 3,925 | 9,164 | 2,423 | 3,061 | 15,022 | ||||||||||||||||||
| Gross cash, end of period |
35,722 | 47,317 | 56,249 | 45,812 | 100,394 | 104,170 | ||||||||||||||||||
| -Borrowings, current |
10,354 | 11,577 | 5,984 | 5,437 | 3,686 | 10,403 | ||||||||||||||||||
| -Borrowings, non-current |
23,476 | 22,167 | 26,946 | 26,994 | 26,363 | 28,599 | ||||||||||||||||||
| Net cash, end of period |
1,892 | 13,573 | 23,319 | 13,381 | 70,345 | 65,168 | ||||||||||||||||||
Total assets less non-interest-bearing provisions and liabilities (which includes non-current provisions, deferred tax liabilities, contract liabilities, other non-current liabilities, current provisions, trade payables, current tax liabilities and other current liabilities).
| 2023 | 2022 | |||||||||||||||||||||||
| SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Total assets |
343,358 | 345,658 | 349,537 | 361,166 | 332,453 | 323,935 | ||||||||||||||||||
| Non-interest-bearing provisions and liabilities |
||||||||||||||||||||||||
| Provisions, non-current |
5,263 | 4,119 | 3,959 | 4,511 | 4,020 | 4,498 | ||||||||||||||||||
| Deferred tax liabilities |
4,887 | 4,986 | 4,784 | 8,025 | 1,250 | 1,012 | ||||||||||||||||||
| Other non-current liabilities |
788 | 716 | 745 | 791 | 762 | 1,070 | ||||||||||||||||||
| Provisions, current |
6,742 | 6,422 | 7,629 | 6,051 | 5,648 | 5,699 | ||||||||||||||||||
| Contract liabilities |
44,237 | 47,916 | 42,251 | 41,105 | 41,547 | 39,875 | ||||||||||||||||||
| Trade payables |
35,463 | 34,554 | 38,437 | 40,864 | 39,539 | 35,316 | ||||||||||||||||||
| Current tax liabilities |
2,665 | 2,478 | 2,640 | 5,008 | 6,703 | 5,701 | ||||||||||||||||||
| Other current liabilities |
45,637 | 49,064 | 46,193 | 50,554 | 40,346 | 41,919 | ||||||||||||||||||
| Capital employed |
197,676 | 195,403 | 202,899 | 204,257 | 192,638 | 188,845 | ||||||||||||||||||
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.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net sales |
64,444 | 62,553 | 85,980 | 68,040 | 62,465 | 55,061 | ||||||||||||||||||
| Annualized net sales |
257,776 | 250,212 | 343,920 | 272,160 | 249,860 | 220,244 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
195,403 | 202,899 | 204,257 | 192,638 | 188,845 | 184,283 | ||||||||||||||||||
| Capital employed at end of period |
197,676 | 195,403 | 202,899 | 204,257 | 192,638 | 188,845 | ||||||||||||||||||
| Average capital employed |
196,540 | 199,151 | 203,578 | 198,448 | 190,742 | 186,564 | ||||||||||||||||||
| Capital turnover (times) |
1.3 | 1.3 | 1.7 | 1.4 | 1.3 | 1.2 | ||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Net sales |
126,997 | 62,553 | 271,546 | 185,566 | 117,526 | 55,061 | ||||||||||||||||||
| Annualized net sales |
253,994 | 250,212 | 271,546 | 247,421 | 235,052 | 220,244 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
202,899 | 202,899 | 184,283 | 184,283 | 184,283 | 184,283 | ||||||||||||||||||
| Capital employed at end of period |
197,676 | 195,403 | 202,899 | 204,257 | 192,638 | 188,845 | ||||||||||||||||||
| Average capital employed |
200,288 | 199,151 | 193,591 | 194,270 | 188,461 | 186,564 | ||||||||||||||||||
| Capital turnover (times) |
1.3 | 1.3 | 1.4 | 1.3 | 1.2 | 1.2 | ||||||||||||||||||
| 40 Ericsson | Second quarter report 2023 | 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.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| EBIT (loss) |
-312 | 3,046 | 7,853 | 7,115 | 7,308 | 4,744 | ||||||||||||||||||
| Annualized EBIT (loss) |
-1,248 | 12,184 | 31,412 | 28,460 | 29,232 | 18,976 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
195,403 | 202,899 | 204,257 | 192,638 | 188,845 | 184,283 | ||||||||||||||||||
| Capital employed at end of period |
197,676 | 195,403 | 202,899 | 204,257 | 192,638 | 188,845 | ||||||||||||||||||
| Average capital employed |
196,540 | 199,151 | 203,578 | 198,448 | 190,742 | 186,564 | ||||||||||||||||||
| Return on capital employed (%) |
-0.6 | % | 6.1 | % | 15.4 | % | 14.3 | % | 15.3 | % | 10.2 | % | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| EBIT |
2,734 | 3,046 | 27,020 | 19,167 | 12,052 | 4,744 | ||||||||||||||||||
| Annualized EBIT |
5,468 | 12,184 | 27,020 | 25,556 | 24,104 | 18,976 | ||||||||||||||||||
| Average capital employed |
||||||||||||||||||||||||
| Capital employed at beginning of period |
202,899 | 202,899 | 184,283 | 184,283 | 184,283 | 184,283 | ||||||||||||||||||
| Capital employed at end of period |
197,676 | 195,403 | 202,899 | 204,257 | 192,638 | 188,845 | ||||||||||||||||||
| Average capital employed |
200,288 | 199,151 | 193,591 | 194,270 | 188,461 | 186,564 | ||||||||||||||||||
| Return on capital employed (%) |
2.7 | % | 6.1 | % | 14.0 | % | 13.2 | % | 12.8 | % | 10.2 | % | ||||||||||||
Equity expressed as a percentage of total assets.
| 2023 | 2022 | |||||||||||||||||||||||
| SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Total equity |
132,355 | 125,832 | 133,304 | 136,820 | 127,799 | 109,879 | ||||||||||||||||||
| Total assets |
343,358 | 345,658 | 349,537 | 361,166 | 332,453 | 323,935 | ||||||||||||||||||
| Equity ratio (% ) |
38.5 | % | 36.4 | % | 38.1 | % | 37.9 | % | 38.4 | % | 33.9 | % | ||||||||||||
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.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Net income (loss) attributable to owners of the Parent Company |
-686 | 1,516 | 6,066 | 5,214 | 4,504 | 2,940 | ||||||||||||||||||
| Annualized |
-2,744 | 6,064 | 24,264 | 20,856 | 18,016 | 11,760 | ||||||||||||||||||
| Average stockholders’ equity |
||||||||||||||||||||||||
| Stockholders’ equity, beginning of period |
127,396 | 134,814 | 138,607 | 129,620 | 111,701 | 108,775 | ||||||||||||||||||
| Stockholders’ equity, end of period |
133,869 | 127,396 | 134,814 | 138,607 | 129,620 | 111,701 | ||||||||||||||||||
| Average stockholders’ equity |
130,633 | 131,105 | 136,711 | 134,114 | 120,661 | 110,238 | ||||||||||||||||||
| Return on equity (%) |
-2.1 | % | 4.6 | % | 17.7 | % | 15.6 | % | 14.9 | % | 10.7 | % | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| 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 |
830 | 1,516 | 18,724 | 12,658 | 7,444 | 2,940 | ||||||||||||||||||
| Annualized |
1,660 | 6,064 | 18,724 | 16,877 | 14,888 | 11,760 | ||||||||||||||||||
| Average stockholders’ equity |
||||||||||||||||||||||||
| Stockholders’ equity, beginning of period |
134,814 | 134,814 | 108,775 | 108,775 | 108,775 | 108,775 | ||||||||||||||||||
| Stockholders’ equity, end of period |
133,869 | 127,396 | 134,814 | 138,607 | 129,620 | 111,701 | ||||||||||||||||||
| Average stockholders’ equity |
134,342 | 131,105 | 121,795 | 123,691 | 119,198 | 110,238 | ||||||||||||||||||
| Return on equity (%) |
1.2 | % | 4.6 | % | 15.4 | % | 13.6 | % | 12.5 | % | 10.7 | % | ||||||||||||
| 41 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
Earnings (loss) per share (EPS), diluted, excluding amortizations and write-downs of acquired intangible assets and excluding restructuring charges.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Earnings (loss) per share, diluted |
-0.21 | 0.45 | 1.82 | 1.56 | 1.35 | 0.88 | ||||||||||||||||||
| Restructuring charges |
0.73 | 0.24 | 0.05 | 0.02 | 0.01 | 0.01 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles |
0.19 | 0.18 | 0.26 | 0.12 | 0.03 | 0.05 | ||||||||||||||||||
| Adjusted earnings per share |
0.71 | 0.87 | 2.13 | 1.70 | 1.39 | 0.94 | ||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Earnings per share, diluted |
0.25 | 0.45 | 5.62 | 3.80 | 2.23 | 0.88 | ||||||||||||||||||
| Restructuring charges |
0.97 | 0.24 | 0.09 | 0.04 | 0.02 | 0.01 | ||||||||||||||||||
| Amortizations and write-downs of acquired intangibles |
0.37 | 0.18 | 0.45 | 0.19 | 0.08 | 0.05 | ||||||||||||||||||
| Adjusted earnings per share |
1.59 | 0.87 | 6.16 | 4.03 | 2.33 | 0.94 | ||||||||||||||||||
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 and repayment of lease liabilities (excluding M&A).
Free cash flow after M&A: Cash flow from operating activities less net capital expenditures, other investments, repayment of lease liabilities and, acquisitions/divestments of subsidiaries and other operations, net.
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Cash flow from operating activities |
-2,882 | -5,825 | 19,895 | 4,651 | 6,287 | 30 | ||||||||||||||||||
| Net capital expenditures and other investments (excl M&A) |
||||||||||||||||||||||||
| Investments in property, plant and equipment |
-806 | -954 | -1,502 | -1,104 | -1,053 | -818 | ||||||||||||||||||
| Sales of property, plant and equipment |
42 | 33 | 76 | 74 | 61 | 38 | ||||||||||||||||||
| Product development |
-562 | -575 | -717 | -414 | -301 | -288 | ||||||||||||||||||
| Other investments ¹) |
-94 | -2 | -121 | -1 | 23 | -27 | ||||||||||||||||||
| Repayment of lease liabilities |
-690 | -693 | -765 | -658 | -577 | -593 | ||||||||||||||||||
| Free cash flow before M&A |
-4,992 | -8,016 | 16,866 | 2,548 | 4,440 | -1,658 | ||||||||||||||||||
| Acquisitions/divestments of subs and other operations, net |
-911 | -844 | -445 | -51,412 | 123 | 46 | ||||||||||||||||||
| Free cash flow after M&A |
-5,903 | -8,860 | 16,421 | -48,864 | 4,563 | -1,612 | ||||||||||||||||||
|
2023 |
2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Cash flow from operating activities |
-8,707 | -5,825 | 30,863 | 10,968 | 6,317 | 30 | ||||||||||||||||||
| Net capital expenditures and other investments (excl M&A) |
||||||||||||||||||||||||
| Investments in property, plant and equipment |
-1,760 | -954 | -4,477 | -2,975 | -1,871 | -818 | ||||||||||||||||||
| Sales of property, plant and equipment |
75 | 33 | 249 | 173 | 99 | 38 | ||||||||||||||||||
| Product development |
-1,137 | -575 | -1,720 | -1,003 | -589 | -288 | ||||||||||||||||||
| Other investments ¹) |
-96 | -2 | -126 | -5 | -4 | -27 | ||||||||||||||||||
| Repayment of lease liabilities |
-1,383 | -693 | -2,593 | -1,828 | -1,170 | -593 | ||||||||||||||||||
| Free cash flow before M&A |
-13,008 | -8,016 | 22,196 | 5,330 | 2,782 | -1,658 | ||||||||||||||||||
| Acquisitions/divestments of subs and other operations, net |
-1,755 | -844 | -51,688 | -51,243 | 169 | 46 | ||||||||||||||||||
| Free cash flow after M&A |
-14,763 | -8,860 | -29,492 | -45,913 | 2,951 | -1,612 | ||||||||||||||||||
| 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. |
| 42 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
Sales growth by segment adjusted for comparable units and currency*)
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarter, year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
-13 | % | -2 | % | 1 | % | 4 | % | — | — | ||||||||||||||
| Cloud Software and Services |
1 | % | 5 | % | 2 | % | -5 | % | — | — | ||||||||||||||
| Enterprise |
20 | % | 19 | % | 15 | % | 21 | % | — | — | ||||||||||||||
| Other |
-18 | % | 0 | % | 10 | % | -1 | % | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-9 | % | 0 | % | 1 | % | 3 | % | 5 | % | 3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
-8 | % | -2 | % | 4 | % | 5 | % | — | — | ||||||||||||||
| Cloud Software and Services |
3 | % | 5 | % | -1 | % | -3 | % | — | — | ||||||||||||||
| Enterprise |
20 | % | 19 | % | 16 | % | 17 | % | — | — | ||||||||||||||
| Other |
-8 | % | 0 | % | 3 | % | 0 | % | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-5 | % | 0 | % | 3 | % | 3 | % | 4 | % | 3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| *) | Sales growth by segment adjusted for comparable units and currency has not been restated by segment for the first two quarters of 2022 due to the re-organization in 2022. |
Sales growth by market area adjusted for comparable units and currency
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarter, year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| South East Asia, Oceania and India |
71 | % | 132 | % | 21 | % | 13 | % | 6 | % | -17 | % | ||||||||||||
| North East Asia |
-32 | % | -19 | % | -16 | % | -6 | % | -1 | % | -20 | % | ||||||||||||
| North America |
-42 | % | -26 | % | -7 | % | 9 | % | 12 | % | 9 | % | ||||||||||||
| Europe and Latin America |
-3 | % | -12 | % | 0 | % | 0 | % | 4 | % | 15 | % | ||||||||||||
| Middle East and Africa |
-4 | % | -8 | % | -4 | % | 3 | % | 8 | % | -9 | % | ||||||||||||
| Other |
38 | % | 28 | % | 60 | % | -21 | % | -24 | % | 31 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-9 | % | 0 | % | 1 | % | 3 | % | 5 | % | 3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| 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 |
97 | % | 132 | % | 7 | % | 1 | % | -5 | % | -17 | % | ||||||||||||
| North East Asia |
-26 | % | -19 | % | -11 | % | -9 | % | -10 | % | -20 | % | ||||||||||||
| North America |
-35 | % | -26 | % | 5 | % | 10 | % | 10 | % | 9 | % | ||||||||||||
| Europe and Latin America |
-8 | % | -12 | % | 4 | % | 6 | % | 9 | % | 15 | % | ||||||||||||
| Middle East and Africa |
-6 | % | -8 | % | -1 | % | 1 | % | 0 | % | -9 | % | ||||||||||||
| Other |
33 | % | 28 | % | 9 | % | -11 | % | -4 | % | 31 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-5 | % | 0 | % | 3 | % | 3 | % | 4 | % | 3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 43 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
Gross margin by segment by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
38.4 | % | 39.7 | % | 44.4 | % | 44.4 | % | 45.1 | % | 44.7 | % | ||||||||||||
| Cloud Software and Services |
32.7 | % | 33.4 | % | 33.0 | % | 31.8 | % | 33.5 | % | 35.0 | % | ||||||||||||
| Enterprise |
46.3 | % | 47.4 | % | 45.7 | % | 48.8 | % | 52.8 | % | 55.2 | % | ||||||||||||
| Other |
-22.2 | % | -2.6 | % | -4.3 | % | -25.2 | % | -3.3 | % | -5.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
37.4 | % | 38.6 | % | 41.4 | % | 41.4 | % | 42.1 | % | 42.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
39.1 | % | 39.7 | % | 44.6 | % | 44.7 | % | 44.9 | % | 44.7 | % | ||||||||||||
| Cloud Software and Services |
33.0 | % | 33.4 | % | 33.2 | % | 33.3 | % | 34.2 | % | 35.0 | % | ||||||||||||
| Enterprise |
46.8 | % | 47.4 | % | 48.6 | % | 50.8 | % | 54.0 | % | 55.2 | % | ||||||||||||
| Other |
-11.0 | % | -2.6 | % | -9.3 | % | -11.2 | % | -4.4 | % | -5.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
38.0 | % | 38.6 | % | 41.7 | % | 41.9 | % | 42.2 | % | 42.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBIT margin by segment by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
6.2 | % | 14.2 | % | 21.2 | % | 19.9 | % | 19.3 | % | 18.7 | % | ||||||||||||
| Cloud Software and Services |
-7.9 | % | -7.0 | % | 3.3 | % | -5.6 | % | -5.2 | % | -6.9 | % | ||||||||||||
| Enterprise |
-26.3 | % | -28.6 | % | -30.0 | % | -29.2 | % | -34.8 | % | -33.2 | % | ||||||||||||
| Other |
-10.8 | % | -46.3 | % | -407.2 | % | -33.5 | % | -29.7 | % | -224.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-0.5 | % | 4.9 | % | 9.1 | % | 10.5 | % | 11.7 | % | 8.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
10.2 | % | 14.2 | % | 19.9 | % | 19.3 | % | 19.0 | % | 18.7 | % | ||||||||||||
| Cloud Software and Services |
-7.5 | % | -7.0 | % | -2.8 | % | -5.9 | % | -6.0 | % | -6.9 | % | ||||||||||||
| Enterprise |
-27.4 | % | -28.6 | % | -30.6 | % | -31.1 | % | -34.0 | % | -33.2 | % | ||||||||||||
| Other |
-31.1 | % | -46.3 | % | -180.3 | % | -91.7 | % | -120.2 | % | -224.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2.2 | % | 4.9 | % | 10.0 | % | 10.3 | % | 10.3 | % | 8.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 44 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
Restructuring charges by function
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Cost of sales |
-552 | -746 | -96 | -55 | -42 | -2 | ||||||||||||||||||
| Research and development expenses |
-1,659 | -91 | -10 | -7 | -4 | -33 | ||||||||||||||||||
| Selling and administrative expenses |
-922 | -143 | -122 | -19 | -3 | -6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-3,133 | -980 | -228 | -81 | -49 | -41 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Cost of sales |
-1,298 | -746 | -195 | -99 | -44 | -2 | ||||||||||||||||||
| Research and development expenses |
-1,750 | -91 | -54 | -44 | -37 | -33 | ||||||||||||||||||
| Selling and administrative expenses |
-1,065 | -143 | -150 | -28 | -9 | -6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-4,113 | -980 | -399 | -171 | -90 | -41 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Restructuring charges by segment
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
-2,177 | -404 | -65 | -26 | -45 | -10 | ||||||||||||||||||
| of which cost of sales |
-376 | -367 | -69 | -3 | -44 | -10 | ||||||||||||||||||
| of which operating expenses |
-1,801 | -37 | 4 | -23 | -1 | 0 | ||||||||||||||||||
| Cloud Software and Services |
-906 | -500 | -16 | -55 | 0 | -25 | ||||||||||||||||||
| of which cost of sales |
-177 | -367 | 1 | -52 | 2 | 8 | ||||||||||||||||||
| of which operating expenses |
-729 | -133 | -17 | -3 | -2 | -33 | ||||||||||||||||||
| Enterprise |
-52 | -89 | -60 | 0 | -4 | -1 | ||||||||||||||||||
| of which cost of sales |
-1 | -12 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| of which operating expenses |
-51 | -77 | -60 | 0 | -4 | -1 | ||||||||||||||||||
| Other |
2 | 13 | -87 | 0 | 0 | -5 | ||||||||||||||||||
| of which cost of sales |
2 | 0 | -28 | 0 | 0 | 0 | ||||||||||||||||||
| of which operating expenses |
0 | 13 | -59 | 0 | 0 | -5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-3,133 | -980 | -228 | -81 | -49 | -41 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
-2,581 | -404 | -146 | -81 | -55 | -10 | ||||||||||||||||||
| of which cost of sales |
-743 | -367 | -126 | -57 | -54 | -10 | ||||||||||||||||||
| of which operating expenses |
-1,838 | -37 | -20 | -24 | -1 | 0 | ||||||||||||||||||
| Cloud Software and Services |
-1,406 | -500 | -96 | -80 | -25 | -25 | ||||||||||||||||||
| of which cost of sales |
-544 | -367 | -41 | -42 | 10 | 8 | ||||||||||||||||||
| of which operating expenses |
-862 | -133 | -55 | -38 | -35 | -33 | ||||||||||||||||||
| Enterprise |
-141 | -89 | -65 | -5 | -5 | -1 | ||||||||||||||||||
| of which cost of sales |
-13 | -12 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| of which operating expenses |
-128 | -77 | -65 | -5 | -5 | -1 | ||||||||||||||||||
| Other |
15 | 13 | -92 | -5 | -5 | -5 | ||||||||||||||||||
| of which cost of sales |
2 | 0 | -28 | 0 | 0 | 0 | ||||||||||||||||||
| of which operating expenses |
13 | 13 | -64 | -5 | -5 | -5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
-4,113 | -980 | -399 | -171 | -90 | -41 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 45 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
Gross income and gross margin excluding restructuring charges by segment
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
16,694 | 17,236 | 26,125 | 21,369 | 20,779 | 18,221 | ||||||||||||||||||
| Cloud Software and Services |
5,121 | 4,843 | 6,663 | 4,568 | 4,690 | 4,226 | ||||||||||||||||||
| Enterprise |
2,955 | 2,853 | 2,885 | 2,429 | 900 | 882 | ||||||||||||||||||
| Other |
-117 | -18 | -8 | -176 | -25 | -38 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
24,653 | 24,914 | 35,665 | 28,190 | 26,344 | 23,291 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
39.3 | % | 40.6 | % | 44.6 | % | 44.4 | % | 45.2 | % | 44.8 | % | ||||||||||||
| Cloud Software and Services |
33.9 | % | 36.1 | % | 33.0 | % | 32.1 | % | 33.5 | % | 35.0 | % | ||||||||||||
| Enterprise |
46.3 | % | 47.6 | % | 45.7 | % | 48.8 | % | 52.8 | % | 55.2 | % | ||||||||||||
| Other |
-22.6 | % | -2.6 | % | -1.0 | % | -25.2 | % | -3.3 | % | -5.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
38.3 | % | 39.8 | % | 41.5 | % | 41.4 | % | 42.2 | % | 42.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
33,930 | 17,236 | 86,494 | 60,369 | 39,000 | 18,221 | ||||||||||||||||||
| Cloud Software and Services |
9,964 | 4,843 | 20,147 | 13,484 | 8,916 | 4,226 | ||||||||||||||||||
| Enterprise |
5,808 | 2,853 | 7,096 | 4,211 | 1,782 | 882 | ||||||||||||||||||
| Other |
-135 | -18 | -247 | -239 | -63 | -38 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
49,567 | 24,914 | 113,490 | 77,825 | 49,635 | 23,291 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
40.0 | % | 40.6 | % | 44.7 | % | 44.8 | % | 45.0 | % | 44.8 | % | ||||||||||||
| Cloud Software and Services |
35.0 | % | 36.1 | % | 33.3 | % | 33.4 | % | 34.2 | % | 35.0 | % | ||||||||||||
| Enterprise |
46.9 | % | 47.6 | % | 48.6 | % | 50.8 | % | 54.0 | % | 55.2 | % | ||||||||||||
| Other |
-11.2 | % | -2.6 | % | -8.4 | % | -11.2 | % | -4.4 | % | -5.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
39.0 | % | 39.8 | % | 41.8 | % | 41.9 | % | 42.2 | % | 42.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 46 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
EBIT (loss) and EBIT margin excluding restructuring charges by segment
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
4,800 | 6,424 | 12,518 | 9,623 | 8,906 | 7,611 | ||||||||||||||||||
| Cloud Software and Services |
-294 | -442 | 689 | -737 | -733 | -812 | ||||||||||||||||||
| Enterprise |
-1,627 | -1,623 | -1,833 | -1,456 | -589 | -530 | ||||||||||||||||||
| Other |
-58 | -333 | -3,293 | -234 | -227 | -1,484 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
2,821 | 4,026 | 8,081 | 7,196 | 7,357 | 4,785 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
11.3 | % | 15.1 | % | 21.4 | % | 20.0 | % | 19.4 | % | 18.7 | % | ||||||||||||
| Cloud Software and Services |
-1.9 | % | -3.3 | % | 3.4 | % | -5.2 | % | -5.2 | % | -6.7 | % | ||||||||||||
| Enterprise |
-25.5 | % | -27.1 | % | -29.0 | % | -29.2 | % | -34.6 | % | -33.1 | % | ||||||||||||
| Other |
-11.2 | % | -48.2 | % | -396.7 | % | -33.5 | % | -29.7 | % | -223.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
4.4 | % | 6.4 | % | 9.4 | % | 10.6 | % | 11.8 | % | 8.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
11,224 | 6,424 | 38,658 | 26,140 | 16,517 | 7,611 | ||||||||||||||||||
| Cloud Software and Services |
-736 | -442 | -1,593 | -2,282 | -1,545 | -812 | ||||||||||||||||||
| Enterprise |
-3,250 | -1,623 | -4,408 | -2,575 | -1,119 | -530 | ||||||||||||||||||
| Other |
-391 | -333 | -5,238 | -1,945 | -1,711 | -1,484 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
6,847 | 4,026 | 27,419 | 19,338 | 12,142 | 4,785 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
13.2 | % | 15.1 | % | 20.0 | % | 19.4 | % | 19.1 | % | 18.7 | % | ||||||||||||
| Cloud Software and Services |
-2.6 | % | -3.3 | % | -2.6 | % | -5.7 | % | -5.9 | % | -6.7 | % | ||||||||||||
| Enterprise |
-26.3 | % | -27.1 | % | -30.2 | % | -31.1 | % | -33.9 | % | -33.1 | % | ||||||||||||
| Other |
-32.4 | % | -48.2 | % | -177.1 | % | -91.4 | % | -119.8 | % | -223.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
5.4 | % | 6.4 | % | 10.1 | % | 10.4 | % | 10.3 | % | 8.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Rolling four quarters of net sales by segment
| 2023 | 2022 | |||||||||||||||||||||||
| Rolling four quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
191,680 | 195,223 | 193,468 | 185,939 | 178,383 | 172,276 | ||||||||||||||||||
| Cloud Software and Services |
62,931 | 61,837 | 60,524 | 58,269 | 57,666 | 56,601 | ||||||||||||||||||
| Enterprise * |
23,669 | 18,993 | 14,597 | — | — | — | ||||||||||||||||||
| Other * |
2,737 | 2,985 | 2,957 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
281,017 | 279,038 | 271,546 | 256,898 | 245,121 | 237,597 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| *) | Rolling four quarters of net sales by segment for segments Enterprise and Other have not been restated for the first three quarters of 2022. |
Rolling four quarters of EBIT margin excluding restructuring charges by segment (%)
| 2023 | 2022 | |||||||||||||||||||||||
| Rolling four quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
17.4 | % | 19.2 | % | 20.0 | % | 20.5 | % | 21.4 | % | 22.0 | % | ||||||||||||
| Cloud Software and Services |
-1.2 | % | -2.0 | % | -2.6 | % | -2.6 | % | -2.2 | % | -2.9 | % | ||||||||||||
| Enterprise * |
-27.6 | % | -29.0 | % | -30.2 | % | — | — | — | |||||||||||||||
| Other * |
-143.1 | % | -136.9 | % | -177.1 | % | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
7.9 | % | 9.6 | % | 10.1 | % | 12.3 | % | 13.6 | % | 13.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| *) | Rolling four quarters of EBIT margin excluding restructuring charges by segment for segment Enterprise and segment Other have not been restated for the first three quarters of 2022. |
| 47 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
EBITA (loss) and EBITA margin by segment by quarter
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
2,678 | 6,042 | 12,555 | 9,624 | 8,889 | 7,629 | ||||||||||||||||||
| Cloud Software and Services |
-1,190 | -929 | 695 | -769 | -710 | -783 | ||||||||||||||||||
| Enterprise |
-891 | -945 | -831 | -1,009 | -486 | -414 | ||||||||||||||||||
| Other |
-55 | -320 | -3,370 | -233 | -227 | -1,489 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
542 | 3,848 | 9,049 | 7,613 | 7,466 | 4,943 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
6.3 | % | 14.2 | % | 21.4 | % | 20.0 | % | 19.3 | % | 18.7 | % | ||||||||||||
| Cloud Software and Services |
-7.9 | % | -6.9 | % | 3.4 | % | -5.4 | % | -5.1 | % | -6.5 | % | ||||||||||||
| Enterprise |
-14.0 | % | -15.8 | % | -13.2 | % | -20.3 | % | -28.5 | % | -25.9 | % | ||||||||||||
| Other |
-10.6 | % | -46.3 | % | -406.0 | % | -33.3 | % | -29.7 | % | -224.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
0.8 | % | 6.2 | % | 10.5 | % | 11.2 | % | 12.0 | % | 9.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
8,720 | 6,042 | 38,697 | 26,142 | 16,518 | 7,629 | ||||||||||||||||||
| Cloud Software and Services |
-2,119 | -929 | -1,567 | -2,262 | -1,493 | -783 | ||||||||||||||||||
| Enterprise |
-1,836 | -945 | -2,740 | -1,909 | -900 | -414 | ||||||||||||||||||
| Other |
-375 | -320 | -5,319 | -1,949 | -1,716 | -1,489 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
4,390 | 3,848 | 29,071 | 20,022 | 12,409 | 4,943 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
10.3 | % | 14.2 | % | 20.0 | % | 19.4 | % | 19.1 | % | 18.7 | % | ||||||||||||
| Cloud Software and Services |
-7.4 | % | -6.9 | % | -2.6 | % | -5.6 | % | -5.7 | % | -6.5 | % | ||||||||||||
| Enterprise |
-14.8 | % | -15.8 | % | -18.8 | % | -23.0 | % | -27.3 | % | -25.9 | % | ||||||||||||
| Other |
-31.0 | % | -46.3 | % | -179.9 | % | -91.6 | % | -120.2 | % | -224.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3.5 | % | 6.2 | % | 10.7 | % | 10.8 | % | 10.6 | % | 9.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 48 Ericsson | Second quarter report 2023 | Alternative performance measures | |
Table of Contents
EBITA (loss) and EBITA margin excluding restructuring charges by segment
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
4,855 | 6,446 | 12,620 | 9,650 | 8,934 | 7,639 | ||||||||||||||||||
| Cloud Software and Services |
-284 | -429 | 711 | -714 | -710 | -758 | ||||||||||||||||||
| Enterprise |
-839 | -856 | -771 | -1,009 | -482 | -413 | ||||||||||||||||||
| Other |
-57 | -333 | -3,283 | -233 | -227 | -1,484 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
3,675 | 4,828 | 9,277 | 7,694 | 7,515 | 4,984 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
| Networks |
11.4 | % | 15.2 | % | 21.5 | % | 20.0 | % | 19.4 | % | 18.8 | % | ||||||||||||
| Cloud Software and Services |
-1.9 | % | -3.2 | % | 3.5 | % | -5.0 | % | -5.1 | % | -6.3 | % | ||||||||||||
| Enterprise |
-13.2 | % | -14.3 | % | -12.2 | % | -20.3 | % | -28.3 | % | -25.8 | % | ||||||||||||
| Other |
-11.0 | % | -48.2 | % | -395.5 | % | -33.3 | % | -29.7 | % | -223.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
5.7 | % | 7.7 | % | 10.8 | % | 11.3 | % | 12.0 | % | 9.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
11,301 | 6,446 | 38,843 | 26,223 | 16,573 | 7,639 | ||||||||||||||||||
| Cloud Software and Services |
-713 | -429 | -1,471 | -2,182 | -1,468 | -758 | ||||||||||||||||||
| Enterprise |
-1,695 | -856 | -2,675 | -1,904 | -895 | -413 | ||||||||||||||||||
| Other |
-390 | -333 | -5,227 | -1,944 | -1,711 | -1,484 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
8,503 | 4,828 | 29,470 | 20,193 | 12,499 | 4,984 | ||||||||||||||||||
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| 2023 | 2022 | |||||||||||||||||||||||
| Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
| Networks |
13.3 | % | 15.2 | % | 20.1 | % | 19.4 | % | 19.1 | % | 18.8 | % | ||||||||||||
| Cloud Software and Services |
-2.5 | % | -3.2 | % | -2.4 | % | -5.4 | % | -5.6 | % | -6.3 | % | ||||||||||||
| Enterprise |
-13.7 | % | -14.3 | % | -18.3 | % | -23.0 | % | -27.1 | % | -25.8 | % | ||||||||||||
| Other |
-32.3 | % | -48.2 | % | -176.8 | % | -91.4 | % | -119.8 | % | -223.8 | % | ||||||||||||
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| Total |
6.7 | % | 7.7 | % | 10.9 | % | 10.9 | % | 10.6 | % | 9.1 | % | ||||||||||||
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| Q2 | Jan-Jun | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Days sales outstanding |
— | — | 82 | 83 | ||||||||||||
| Inventory turnover days |
106 | 112 | 108 | 112 | ||||||||||||
| Payable days |
79 | 94 | 86 | 101 | ||||||||||||
| 49 Ericsson | Second quarter report 2023 | Alternative performance measures | |