Third quarter highlights
* Sales amounted to SEK 53.0 b, down -3% YoY.
* For comparable units and adjusted for FX, sales increased 3% YoY.
* Operating income incl. JV was SEK 4.2 (3.1) b. with an operating margin of
8.0% (5.7%).
* Net income was SEK 3.0 (2.2) b.
* EPS diluted was SEK 0.90 (0.67). EPS Non-IFRS was SEK 1.31 (1.04).
* Cash flow from operating activities was SEK 1.5 (7.0) b.
-------------------------------------------------------------------------------
Q3 Q3 YoY Q2 QoQ 9 months 9 months
SEK b. 2013 2012 Change 2013 Change 2013 2012(2))
-------------------------------------------------------------------------------
Net sales 53.0 54.6 -3% 55.3 -4% 160.3 160.8
-------------------------------------------------------------------------------
Of which
Networks 26.7 26.9 -1% 28.1 -5% 82.9 82.0
-------------------------------------------------------------------------------
Of which
Global Services 24.0 24.3 -1% 24.9 -4% 70.3 69.0
-------------------------------------------------------------------------------
Of which
Support Solutions 2.4 3.3 -29% 2.3 1% 7.1 9.8
-------------------------------------------------------------------------------
Gross margin 32.0% 30.4% - 32.4% - 32.1% 31.9%
-------------------------------------------------------------------------------
Operating income
excl JV 4.3 3.7 17% 2.5 71% 8.9 17.4
-------------------------------------------------------------------------------
Operating margin
excl JV 8.1% 6.7% - 4.5% - 5.6% 10.8%
-------------------------------------------------------------------------------
Networks 10% 5% - 5% - 7% 5%
-------------------------------------------------------------------------------
Global
Services 8% 8% - 6% - 6% 6%
-------------------------------------------------------------------------------
Support
Solutions -5% 14% - -12% - -6% 9%
-------------------------------------------------------------------------------
Operating income
incl JV 4.2 3.1 36% 2.5 71% 8.8 14.3
-------------------------------------------------------------------------------
Operating margin 8.9%
incl JV 8.0% 5.7% - 4.5% - 5.5%
-------------------------------------------------------------------------------
Net income 3.0 2.2 38% 1.5 99% 5.7 12.2
-------------------------------------------------------------------------------
EPS diluted, SEK 0.90 0.67 34% 0.45 100% 1.72 3.77
-------------------------------------------------------------------------------
EPS (Non-IFRS),
SEK(1)) 1.31 1.04 26% 0.88 49% 3.19 4.96
-------------------------------------------------------------------------------
Cash flow from
operating
activities 1.5 7.0 -79% 4.3 -66% 2.8 6.3
-------------------------------------------------------------------------------
Net cash, end of 29.0
period 24.7 29.0 -15% 27.4 -10% 24.7
-------------------------------------------------------------------------------
(1)) EPS, diluted, excl. restructuring, amortizations and write-downs of
acquired intangible assets
(2)) Including gain from divestment of Sony Ericsson of SEK 7.7 b
-------------------------------------------------------------------------------
Comments from Hans Vestberg, President and CEO
"Sales for comparable units, adjusted for FX, grew 3%. Reported sales were
slightly down YoY, primarily due to continued currency headwind," said Hans
Vestberg, President and CEO of Ericsson (NASDAQ:ERIC).
"We are currently seeing sales coming under some pressure. In addition to FX,
the major drivers for this development are the two large mobile broadband
coverage projects, which peaked in North America in the first half of 2013. We
also saw impact from reduced activity in Japan where we are getting closer to
completion of a major project.
The 4G/LTE tenders in China continue and so far two of the major operators have
made their choices. Despite having insignificant market share for 3G, Ericsson
has been named technology partner for both these operators and we will now build
on this initial footprint.
The pace is picking up in the European market with continued WCDMA/LTE
investments and a major investment announcement by one of the large operators.
Ericsson now sees growth in several European markets and margins are also
improving as the network modernization projects gradually come to an end and we
engage more in new capacity and LTE business.
The momentum for Professional Services continued with stable earnings and 59
signed managed services contracts year to date. As a result of our continuous
work to implement global processes, methods and tools to increase efficiency,
Global Services margins improved during the quarter.
Profitability for the group continued to improve YoY, partly offset by currency
headwind. The improvement was driven by higher gross margin due to less dilutive
impact from European network modernization and somewhat improved business mix.
During the quarter Ericsson has continued to strengthen its market leadership.
In September we launched a small-cell product, the Ericsson Radio Dot System,
for indoor coverage. The new product opens up new revenue opportunities for
operators and initial customer response has been very positive. In addition, we
closed the acquisition of Mediaroom which places Ericsson as the world's largest
IPTV player, by market share.
The macroeconomic climate has stabilized in many OECD markets. However,
uncertainty still remains in certain parts of the world. The long-term
fundamentals in the industry remain attractive and we are well positioned to
continue to support our customers in a transforming ICT market," concludes
Vestberg.
NOTES TO EDITORS
You find the complete report with tables in the attached PDF or by following
this link:
www.ericsson.com/res/investors/docs/q-reports/2013/09month13-en.pdf or go to:
www.ericsson.com/res/investors
Ericsson invites media, investors and analysts to a press conference at the
Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), October
24, 2013. An analysts, investors and media conference call will begin at 14.00
(CET).
Live webcast of the press conference and conference call details, as well as
supporting slides, will be available at www.ericsson.com/press and
www.ericsson.com/investors
Video material will be published during the day on
www.ericsson.com/broadcast_room
FOR FURTHER INFORMATION, PLEASE CONTACT
Helena Norrman, Senior Vice President, Communications
Phone: +46 10 719 34 72
E-mail: media.relations@ericsson.com
Investors
Peter Nyquist, Head of Investor Relations
Phone: +46 10 714 64 49
E-mail: peter.nyquist@ericsson.com
Åsa Konnbjer, Director, Investor Relations
Phone: +46 10 713 39 28
E-mail: asa.konnbjer@ericsson.com
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Phone: +46 10 714 20 39
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E-mail: rickard.tunedal@ericsson.com
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Ericsson discloses the information provided herein pursuant to the Securities
Markets Act. The information was submitted for publication at 07.30 CET, on
October 24, 2013.
[HUG#1737828]
