First quarter highlights
* Sales in the quarter were SEK 52.0 b. For comparable units and adjusted for
FX and hedging, sales increased 7% YoY and declined -19% QoQ.
* Operating income incl. JV was SEK 2.1 b. with an operating margin of 4.0%.
Excluding the restructuring charges related to the reduction of operations
in Sweden of SEK 1.4 b. the margin amounted to 6.7%. Last year's margin of
17.8% was positively impacted by a gain of SEK 7.7 b. from the divestment of
Sony Ericsson.
* Net income was SEK 1.2 (8.8) b.
* EPS diluted was SEK 0.37 (2.76). EPS Non-IFRS was SEK 0.99 (3.14).
* Cash flow from operating activities was SEK -3.0 b. primarily driven by
higher working capital.
* Net cash decreased by SEK -6.3 b. QoQ to SEK 32.2 b. mainly due to negative
operating cash flow and reclassification of Swedish special payroll taxes of
SEK 1.8 b. from Other current liabilities to Pension liabilities.
-------------------------------------------------------------------------------
Q1 Q1 YoY Q4 QoQ
SEK b. 2013 2012(2)) Change 2012 Change
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Net sales 52.0 51.0 2% 66.9 -22%
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Of which Networks 28.1 27.3 3% 35.3 -20%
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Of which Global Services 21.5 20.6 4% 28.0 -24%
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Of which Support Solutions 2.4 3.0 -19% 3.6 -33%
-------------------------------------------------------------------------------
Gross margin 32.0% 33.3% - 31.1% -
-------------------------------------------------------------------------------
Operating income excl JV 2.1 10.5 -80% 4.8 -55%
-------------------------------------------------------------------------------
Operating margin excl JV 4.1% 20.6% - 7.1% -
-------------------------------------------------------------------------------
Of which Networks 6% 6% - 8% -
-------------------------------------------------------------------------------
Of which Global Services 3% 6% - 6% -
-------------------------------------------------------------------------------
Of which Support Solutions -1% -1% - 8% -
-------------------------------------------------------------------------------
Operating income incl JV 2.1 9.1 -77% -3.8 -
-------------------------------------------------------------------------------
Operating margin incl JV 4.0% 17.8% - -5.7% -
-------------------------------------------------------------------------------
Net income 1.2 8.8 -86% -6.3 -
-------------------------------------------------------------------------------
EPS diluted, SEK 0.37 2.76 -87% -1.99 -
-------------------------------------------------------------------------------
EPS (Non-IFRS), SEK(1)) 0.99 3.14 -68% -1.40 -
-------------------------------------------------------------------------------
Cash flow from operating
activities -3.0 0.7 - 15.7 -
-------------------------------------------------------------------------------
Net cash, end of period 32.2 37.1 -13% 38.5 -16%
-------------------------------------------------------------------------------
(1)) EPS, diluted, excl. amortizations, write-downs of acquired intangible
assets, and restructuring
(2)) Q1 2012 includes a gain from the divestment of Sony Ericsson of SEK 7.7
b.
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COMMENTS FROM HANS VESTBERG, PRESIDENT AND CEO
"Sales showed positive development in the quarter with a growth of 2% YoY,
despite currency headwind. Sales for comparable units, adjusted for FX and
hedging, grew 7%," said Hans Vestberg, President and CEO of Ericsson
(NASDAQ:ERIC).
"The sales increase was primarily driven by Networks and rollout services,
following high project activities primarily in Europe and North America. North
America remained the strongest region and showed a growth of 23% despite the
decline in CDMA. North East Asia had a challenging quarter with lower sales in
South Korea, which remains one of the most advanced LTE markets but without
parallel 3G deployments as in Q112, continued structural decline in GSM
investments in China and FX effects in Japan.
Looking at the areas of portfolio momentum, we see continued good development in
Managed Services with 21 new contracts signed during the quarter. Within the
Mobile Broadband area, the vendor selection processes for 4G/LTE in Russia and
China have been initiated. We also see continued momentum for our SSR routing
platform with 12 new contracts in the quarter. Within OSS and BSS demand
continued to be strong.
At the Mobile World Congress (MWC) in Barcelona the trends in focus verify our
belief that the Networked Society is coming to life. The growth in data traffic
and video in the networks drives demand for mobile broadband and OSS and BSS.
Other key topics at the MWC were software defined networks, cloud and machine-
to-machine communications that will all be part of shaping the industry for the
coming years.
Profitability improved YoY, adjusted for the restructuring charges related to
the reduction of operations in Sweden concluded in Q1 and last year's gain from
the divestment of Sony Ericsson. The improvement is mainly due to higher sales
in Networks and a continued reduction in operating expenses, offset by negative
operating income in Network Rollout and negative FX effects.
The underlying business mix, with a higher share of coverage projects than
capacity projects, continued as anticipated during the quarter. With present
visibility of customer demand, and current global economic development, we
continue to believe that the underlying business mix will start to gradually
shift towards more capacity projects during the second half of 2013.
We continue to execute on our strategy. During the quarter we announced the way
forward for our JV ST-Ericsson and in April 2013 we announced our intention to
acquire Microsoft's Mediaroom to strengthen our media position.
While macroeconomic and political uncertainty continues in certain regions, 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.
You find the complete report with tables in the attached PDF or by following
this link:
www.ericsson.com/res/investors/docs/q-reports/2013/03month13-en.pdf or go to:
www.ericsson.com/res/investors
NOTES TO EDITORS
Ericsson invites media, investors and analysts to a press conference at the
Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), April 24, 2013.
An analysts, investors and media conference call will begin at 14.00 (CET).
Live webcast of the press conference and conference call 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
Åsa Konnbjer, Director, Investor Relations
Phone: +46 10 713 39 28
E-mail: investor.relations@ericsson.com
Stefan Jelvin, Director, Investor Relations
Phone: +46 10 714 20 39
E-mail: investor.relations@ericsson.com
Rikard Tunedal, Director, Investor Relations
Phone: +46 10 714 54 00
E-mail: investor.relations@ericsson.com
Media
Ola Rembe, Vice President, Head of External Communications
Phone: +46 10 719 97 27
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
Ericsson discloses the information provided herein pursuant to the Securities
Markets Act. The information was submitted for publication at 07.30 CET, on
April 24, 2013.
[HUG#1695632]
