Fourth quarter highlights
* Sales of SEK 67.0 b., flat YoY.
* Sales for comparable units and adjusted for FX, increased 4% YoY.
* Operating income incl. JV of SEK 9.1 (-3.8) b. with operating margin of
13.5% (-5.7%), including a one-time charge of SEK -0.4 b. related to the
acquisition of Airvana
* Net income SEK 6.4 (-6.3) b.
* Successfully closed an IPR cross license agreement with Samsung on FRAND
terms. Impact on net sales of SEK 4.2 b., on operating income of SEK 4.2 b.
and on net income of SEK 3.3 b. included in all numbers.
* EPS diluted SEK 1.97 (-1.99). EPS Non-IFRS SEK 2.42 (-1.40).
* Cash flow from operating activities of SEK 14.6 (15.7) b.
* Segment Modems was consolidated as of October 1, 2013
Full year highlights
* Sales of SEK 227.4 b., flat YoY.
* Sales for comparable units and adjusted for FX, up 5% YoY.
* Operating income incl. JV was SEK 17.8 (10.5) b. with an operating margin of
7.8% (4.6%).
* Net income SEK 12.2 (5.9) b.
* All numbers include effects of the IPR cross license agreement with Samsung
with impact on net sales of SEK 4.2 b., on operating income of SEK 4.2 b.
and on net income of SEK 3.3 b.
* EPS diluted SEK 3.69 (1.78). EPS Non-IFRS SEK 5.62 (3.55).
* Cash flow from operating activities of SEK 17.4 (22.0) b.
* Proposed dividend for 2013 of SEK 3.00 (2.75) per share.
-------------------------------------------------------------------------------
Full Full
Q4 Q4 YoY Q3 QoQ year Full year year
SEK b. 2013 2012 Change 2013 Change 2013 2012(2)) Change
-------------------------------------------------------------------------------
Net sales 67.0 66.9 0% 53.0 27% 227.4 227.8 0%
-------------------------------------------------------------------------------
Of which
Networks 34.8 35.3 -1% 26.7 30% 117.7 117.3 0%
-------------------------------------------------------------------------------
Of which
Global
Services 27.2 28.0 -3% 24.0 13% 97.4 97.0 0%
-------------------------------------------------------------------------------
Of which
Support
Solutions 5.1 3.6 41% 2.4 117% 12.2 13.5 -9%
-------------------------------------------------------------------------------
Of which
Modems 0.0 - - - - 0.0 - -
-------------------------------------------------------------------------------
Gross margin 37.1% 31.1% - 32.0% - 33.6% 31.6% -
-------------------------------------------------------------------------------
Operating
income excl
JV 9.1 4.8 90% 4.3 112% 18.0 22.2 -19%
-------------------------------------------------------------------------------
Operating
margin excl
JV 13.5% 7.1% - 8.1% - 7.9% 9.7% -
-------------------------------------------------------------------------------
Networks 17% 8% - 10% - 10% 6% -
-------------------------------------------------------------------------------
Global
Services 8% 6% - 8% - 6% 6% -
-------------------------------------------------------------------------------
Support
Solutions 37% 8% - -5% - 12% 9% -
-------------------------------------------------------------------------------
Operating
income incl
JV 9.1 -3.8(3)) - 4.2 115% 17.8 10.5(3)) 71%
-------------------------------------------------------------------------------
Operating
margin incl
JV 13.5% -5.7% - 8.0% - 7.8% 4.6% -
-------------------------------------------------------------------------------
Net income 6.4 -6.3(3)) - 3.0 114% 12.2 5.9(3)) 105%
-------------------------------------------------------------------------------
EPS diluted,
SEK 1.97 -1.99 - 0.90 119% 3.69 1.78 107%
-------------------------------------------------------------------------------
EPS (Non-
IFRS),
SEK(1)) 2.42 -1.40 - 1.31 85% 5.62 3.55 58%
-------------------------------------------------------------------------------
Cash flow
from
operating
activities 14.6 15.7 -7% 1.5 - 17.4 22.0 -21%
-------------------------------------------------------------------------------
Net cash, end
of period 37.8 38.5 -2% 24.7 53% 37.8 38.5 -2%
-------------------------------------------------------------------------------
(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
(3)) Including a charge related to ST-Ericsson of SEK -8.0 b
-------------------------------------------------------------------------------
Comments from Hans Vestberg, President and CEO
"Ericsson's sales for comparable units, adjusted for FX, grew 5% for the full
year. I am pleased that we have successfully closed the IPR cross-licensing
agreement with Samsung. Our industry is built on scale and a strong tradition of
sharing technologies through licensing on fair, reasonable and non-
discriminatory (FRAND) terms. The agreement shows the value of our R&D
investments and enables both companies to continue to innovate and bring new
technologies to the market," says Hans Vestberg, President and CEO of Ericsson
(NASDAQ:ERIC).
"Our focus on profitability started to pay off and operating margin for the
group gradually improved in 2013, despite significant currency headwind, driven
primarily by improvements in Networks and Network Rollout.
The business mix, with a higher share of coverage projects than capacity
projects, started to shift towards more capacity during the year. As
anticipated, sales came under some pressure during the quarter. As previously
communicated, the major reason behind this development is the two large mobile
broadband coverage projects, which peaked in North America in the first half of
2013 and the impact from reduced activity in Japan.
While executing on the large rollout projects in the US, we have also
strengthened our professional services position and capabilities. For the full
year Global Services accounted for the majority of the region's sales and we are
today the market leader in both telecom services and mobile infrastructure in
one of the world's most advanced and dynamic ICT markets.
The LTE tenders in China continue and so far the two major operators that have
made their vendor selections have chosen Ericsson. During the quarter, sales in
China improved as a result of deliveries to the ongoing mobile broadband
coverage projects.
In the fourth quarter Ericsson continued to grow in some of its European key
markets. During the last years we have strengthened our position in Europe
through the network modernization projects. These projects have been delivered
according to plan and the major part of the negative margin impact from these
projects is now behind us. Over time, we expect the telecom industry in Europe
to improve driven by macroeconomic development and a recent investment
announcement made by one of the large operators.
During 2013 Ericsson executed on a number of strategic initiatives to both
manage the ongoing technology transition in the industry and to transform the
company for future business opportunities. We have solidified our core business
as well as taken important steps to build a leadership position in new and
targeted key areas. This includes consolidating the modems business and the
acquisition of the IPTV business Mediaroom from Microsoft. We will gradually
increase resource and capital allocation in these areas as well as in IP, Cloud,
OSS and BSS.
The long-term fundamentals in the industry remain attractive and with our
ongoing strategic initiatives we are well positioned to continue to support our
customers in a transforming ICT market.
We have worked diligently to improve working capital and we ended the year with
a strong cash flow of SEK 17.4 (22.0) b. and a full-year cash conversion of
79%, above the target of 70%, giving Ericsson a solid balance sheet to continue
to execute on our strategy. The Board of Directors proposes a dividend for 2013
of SEK 3.00 (2.75) per share, an increase by 9%," 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/2013/12month13-en.pdf or go to:
www.ericsson.com/investors
Ericsson invites media, investors and analysts to a press conference at the
Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), January
30, 2014. 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
Stefan Jelvin, Director, Investor Relations
Phone: +46 10 714 20 39
E-mail: stefan.jelvin@ericsson.com
Rikard Tunedal, Director, Investor Relations
Phone: +46 10 714 54 00
E-mail: rickard.tunedal@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
January 30, 2014.
[HUG#1757959]
