Form 6-K
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

January 31, 2013

 

 

LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

 

 

Torshamnsgatan 23, 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  x    Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes  ¨    No  x

Announcement of LM Ericsson Telephone Company, dated January 31, 2013 regarding “Ericsson fourth quarter and full year 2012 report

 

 

 


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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/ NINA MACPHERSON

  Nina Macpherson
  Senior Vice President and
  General Counsel
By:  

/s/ HELENA NORRMAN

  Helena Norrman
  Senior Vice President
  Corporate Communications

Date: January 31, 2013


Table of Contents

LOGO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTENTS

 

Financial Highlights

     3   

Segment Results

     7   

Regional Sales Overview

     11   

Market Data

     13   

Parent Company Information

     13   

Auditors’ Review Report

     17   

Editor’s Note

     18   

Financial Statements and Additional Information

     20   

Ericsson Fourth QUARTER and full year 2012 report

January 31, 2013

Fourth quarter highlights

 

   

Sales increased 5% YoY and 23% QoQ. Segment Networks sales increased 6% YoY driven mainly by North America. QoQ Networks sales grew 31%, primarily due to normal higher year-end business activity

 

   

Operating margin excl. JVs improved to 7.1% (6.4%) YoY mainly driven by increased Networks sales, offset by continued efficiency measures generating restructuring charges with a negative impact on operating margin of close to -3%-points (-1%)

 

   

Net income SEK -6.3 (1.5) b. negatively impacted by a non-cash charge related to ST-Ericsson of SEK -8.0 b. as previously communicated and a reduction of deferred tax assets of SEK -0.5 b. related to lowered corporate tax rate in Sweden

 

   

EPS diluted SEK -1.99 (0.36). EPS Non-IFRS and excluding ST-Ericsson charge SEK 1.07 (0.81)

 

   

Cash flow from operations increased to SEK 15.7 b. driven by reduced working capital.

Full year highlights

 

   

Sales were flat YoY with growth in Global Services and Support Solutions, while Networks sales declined partly due to the 40% decline of CDMA equipment sales

 

   

Operating margin, excluding JVs, was flat at 9.7% (9.6%). Excluding the gain related to the divestment of Sony Ericsson operating margin was 6.4%

 

   

Net income SEK 5.9 (12.6) b. impacted positively by the Sony Ericsson gain of SEK 7.7 b. and negatively by the ST-Ericsson charge of SEK -8.0 b.

 

   

EPS diluted SEK 1.78 (3.77). EPS Non-IFRS SEK 3.55 (5.54)

 

   

Cash flow from operations SEK 22.0 b. Full year cash conversion of 116%, above the target >70%

 

   

Dividend for 2012, proposed by board of Directors of SEK 2.75 (2.50) per share.

 

SEK b.

   Q4
2012
    Q4
2011
    YoY
Change
    Q3
2012
    QoQ
Change
    Full
year
2012
    Full
year
2011
    Full
year
Change
 

Net sales

     66.9        63.7        5     54.6        23     227.8        226.9        0

Of which Networks

     35.3        33.3        6     26.9        31     117.3        132.4        -11

Of which Global Services

     28.0        27.0        4     24.3        15     97.0        83.9        16

Of which Support Solutions

     3.6        3.4        6     3.3        9     13.5        10.6        26

Gross margin

     31.1     30.2     —          30.4     —          31.6     35.1     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITA margin excl JVs and Sony Ericsson sale

     8.8     8.1     —          8.7     —          8.4     11.6     —     

Operating income excl JVs and Sony Ericsson sale

     4.8        4.1        17     3.7        30     14.5        21.7        -33

Operating margin excl JVs and Sony Ericsson sale

     7.1     6.4     —          6.7     —          6.4     9.6     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITA margin excl JVs

     8.8     8.1     —          8.7     —          11.7     11.6     —     

Operating income excl JVs

     4.8        4.1        17     3.7        30     22.2        21.7        2

Operating margin excl JVs

     7.1     6.4     —          6.7     —          9.7     9.6     —     

Of which Networks

     8     8     —          5     —          6     13     —     

Of which Global Services

     6     6     —          8     —          6     7     —     

Of which Support Solutions

     8     0     —          14     —          9     -5     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income incl JVs

     -3.8        2.2        —          3.1        —          10.5        17.9     

Of which ST-Ericsson

     -8.5        -0.8        —          -0.6        —          -11.7        -2.7        —     

Income after financial items

     -3.9        1.8        —          3.2        —          10.2        18.1     

Net income

     -6.3        1.5        —          2.2        —          5.9        12.6     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EPS diluted, SEK

     -1.99        0.36        —          0.67        —          1.78        3.77        -53

EPS (Non-IFRS), SEK1)

     -1.40        0.81        —          1.04        —          3.55        5.54        -36

Cash flow from operations

     15.7        5.5        187     7.0        125     22.0        10.0        121

Cash conversion

     227     79     —          149     —          116     40     —     

Net cash, end of period

     38.5        39.5        -2     29.0        33     38.5        39.5        -2

 

1) 

EPS, diluted, excl. amortizations, write-downs of acquired intangible assets, restructuring Twelve months 2012 includes a gain from the divestment of Sony Ericsson of SEK 7.7 b.

 

 


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LOGO

 

COMMENTS FROM HANS VESTBERG, PRESIDENT AND CEO

“Our segments showed mixed developments during the year with strong growth in Global Services and Support Solutions, while Networks had a more challenging year. Support Solutions went from losses in 2011 into profitability and together with Global Services represented close to 50% of Group sales in 2012, compared to 42% in 2011,” says Hans Vestberg, President and CEO of Ericsson (NASDAQ:ERIC).

“During the year profitability was negatively impacted by operating losses in ST-Ericsson, the ongoing network modernization projects in Europe as well as the underlying business mix, with a higher share of coverage projects than capacity projects. With present visibility of customer demand, and with the current global economic development, underlying business mix is expected to gradually shift towards more capacity projects during the second half of 2013.

We ended the year with strong cash flow and a full-year cash conversion well above target. The Board of Directors proposes a dividend for 2012 of SEK 2.75 (2.50) per share, an increase by 10%.

Throughout 2012 North America was our strongest market, driven by continued mobile broadband investments and demand for services. However, regions such as South East Asia and Oceania and Sub-Saharan Africa gradually improved during the year.

In the fourth quarter Networks sales recovered, despite continued expected decline in CDMA. Profitability in Networks improved sequentially due to higher sales and a higher share of software sales. Sales and profitability for Global Services and Support Solutions remained stable.

The quarter was negatively impacted by a non-cash charge related to ST-Ericsson. Following the announcement of STMicroelectronics’ intention to exit as a shareholder, Ericsson will explore various strategic options for ST-Ericsson assets. We believe that the modem technology, which we originally contributed to the JV, has a strategic value to the wireless industry.

The work to leverage our strength in the growth areas mobile broadband, managed services and operations and business support systems (OSS/BSS) has continued during the year, with both selective acquisitions and divestments. In addition, we completed the divestment of Sony Ericsson and introduced a new strategy for Support Solutions. Improving profitability, reducing costs and working capital remain high on the agenda also for 2013. While the 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.

 

 

Ericsson Fourth Quarter Report 2012   2


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LOGO

 

LOGO

Financial Highlights – fourth quarter

Sales in the quarter increased 5% YoY and 23% QoQ. Sales for comparable units, adjusted for FX and hedging, increased 5% YoY. The acquired Telcordia operation added sales of SEK 1.1 b. in the quarter, split 50/50 between segments Global Services and Support Solutions.

Networks sales increased 6% YoY, primarily driven by North America where sales in the second half 2011 were slower. CDMA equipment sales were down -18% YoY to SEK 2.5 b. in the quarter. Networks sales increased 31% QoQ due to high year-end business activity. CDMA equipment sales increased 58% QoQ, primarily due to temporary capacity needs but are expected to continue to decline as North American operators continue their transition to LTE.

Global Services grew 4% YoY and 15% QoQ. Global Services represented 42% (42%) of Group sales in the quarter, compared to 45% in Q312.

Support Solutions sales grew 6% YoY and 9% QoQ. IPX was divested in Q312 impacting sales growth QoQ negatively. Q411, multimedia brokering (IPX) sales amounted to SEK 0.4 b.

Restructuring charges for the Group amounted to SEK 1.7 (0.7) b. This was mainly related to execution of the service delivery strategy, costs of SEK 0.3 b. related to the divestment of GPON assets as well as continued execution of efficiency measures.

Gross margin increased YoY to 31.1% (30.2%), and from 30.4% Q312. The YoY increase was driven by higher Networks sales. The QoQ improvement is due to increased software share and lower Global Services share.

The underlying business mix, with higher share of coverage projects than capacity projects, is expected to shift towards more capacity projects in the second half of 2013. The negative impact from the network modernization projects in Europe will continue to gradually decline during 2013.

Total operating expenses increased YoY by SEK 0.8 b. to SEK 16.4 (15.6) b. due to higher restructuring charges. QoQ expenses increased SEK 3.1 b. partly driven by restructuring charges. Excluding acquisitions and restructuring charges, total operating expenses amounted to SEK 14.9 b., down -3% YoY. R&D expenses amounted to SEK 9.2 (8.7) b. Selling and general administrative expenses (SG&A) increased YoY to SEK 7.1 (6.8) b. due to acquisitions.

Other operating income and expenses amounted to SEK 0.3 (0.4) b.

Operating income, excluding JVs, increased to SEK 4.8 (4.1) b. mainly due to higher sales in Networks. Operating margin was 7.1% (6.4%) compared to 6.7% in Q312. The YoY margin improvement was driven by increased Networks sales. This was partly offset by continued efficiency measures generating restructuring charges with a negative impact on operating margin by close to -3%-points (-1%). The QoQ margin improvement was mainly driven by higher sales in Networks and improved gross margin, partly offset by higher operating expenses and restructuring charges.

Ericsson’s share in ST-Ericsson’s income before tax was SEK -8.5 (-0.8) b. This includes the non-cash charge of SEK -8.0 b. for the write-down of all related investments, including provisions of SEK -3.3 b. related to the strategic options at hand for ST-Ericsson assets, as well as Ericsson’s share of ST-Ericsson Q412 operating loss of SEK -0.5 (-0.8) b.

Financial net amounted to SEK -0.1 (-0.3) b. and decreased QoQ from SEK 0.1 b.

 

 

Ericsson Fourth Quarter Report 2012   3


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LOGO

 

 

 

LOGO

Taxes were SEK -2.4 (-0.3) b. The effective tax rate was impacted by the write-down of investments and a provision related to ST-Ericsson of SEK 3.3 b. which are not subject to taxation. The corporate tax in Sweden was reduced from 26.3% to 22.0% as of January 1, 2013. This resulted in a reduction of deferred tax assets of SEK -0.5 b., which together with the market mix in the quarter impacted tax cost negatively.

Net income decreased to SEK -6.3 (1.5) b. negatively impacted by the ST-Ericsson charge of SEK -8.0 b.

EPS diluted was SEK -1.99 (0.36). EPS Non-IFRS, was SEK -1.40 (0.81). EPS Non-IFRS and excluding ST-Ericsson charge was SEK 1.07 (0.81).

Cash flow from operations was positive SEK 15.7 (5.5) b., driven by reduced working capital. Cash outlays for restructuring amounted to SEK 0.3 (0.5) b. Cash outlays of SEK 1.2 b. remain to be made from the restructuring provision.

BALANCE SHEET AND OTHER PERFORMANCE INDICATORS – FOURTH QUARTER

Trade receivables increased QoQ to SEK 63.7 (61.6) b., driven by strong sales. This was partly offset by good collections and resulted in a decrease of days sales outstanding (DSO) from 101 to 86 days QoQ.

Inventory decreased QoQ to SEK 28.8 (32.4) b., positively impacted by higher sales. Inventory turnover days (ITO) improved from 82 to 73 days. Payable days have decreased from 59 to 57 days.

Cash, cash equivalents and short-term investments amounted to SEK 76.7 (68.8) b. The net cash position increased QoQ by SEK 9.6 b. to SEK 38.5 (29.0) b., mainly from improved operating cash flow. The net cash position was negatively impacted by SEK 5.0 b. due to converting loans from short-term investments to investments related to ST-Ericsson.

During the quarter, approximately SEK 1.0 b. of provisions were utilized, of which SEK 0.3 b. related to restructuring. Additions of SEK 4.6 b. were made, of which SEK 3.3 b. related to ST-Ericsson and SEK 0.6 b. related to restructuring. Reversals of SEK 0.2 b. were made.

The total number of employees at the end of the quarter increased to 110,255 (109,214). The increase is mainly due to addition of service professionals, primarily in India.

Financial Highlights – full year

Full year sales were SEK 227.8 b. and flat compared to 2011. Sales for comparable units, adjusted for FX and hedging, decreased by -2%. CDMA equipment sales declined by -40% to SEK 8.4 (14.0) b. The acquired Telcordia operation added sales of SEK 4.2 b., split 50/50 between segments Global Services and Support Solutions. Revenues for IPR and licensing were SEK 6.6 (6.2) b.

Software represented 23% (23%), hardware 35% (40%) and services 42% (37%) of total sales in 2012 reflecting the good momentum in Services throughout the year, the reduced CDMA infrastructure business as well as network modernization projects in Europe.

Restructuring charges for the Group amounted to SEK 3.4 (3.2) b., mainly related to continued execution of the service delivery strategy and other ongoing cost reduction measures. The ongoing redundancy process in Sweden is expected to be finalized in Q1 2013, pending closing of union negotiations.

 

 

Ericsson Fourth Quarter Report 2012   4


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LOGO

 

Gross margin was down for the full year to 31.6% (35.1%). The decrease is due to higher proportion of coverage projects than capacity projects, network modernization projects in Europe as well as the increased share of Global Services sales. Close to 50% of the gross margin decline is related to the increased services share.

Total operating expenses amounted to SEK 58.9 (59.3) b. Excluding acquisitions and restructuring charges, total operating expenses amounted to SEK 55.1 b. down -4%. R&D expenses amounted to SEK 32.8 (32.6) b. and increased due to higher restructuring charges and acquisitions. R&D expenses for the full year 2012 were estimated at SEK 30-32 b. Based on current portfolio and efficiencies in ways of working, R&D expenses for 2013 are expected to decrease somewhat. Selling and general administrative expenses (SG&A) amounted to SEK 26.0 (26.7) b. in 2012.

Other operating income and expenses were SEK 9.0 (1.3) b. of which the gain related to the divestment of Sony Ericsson amounted to SEK 7.7 b and Multimedia brokering (IPX) amounted to SEK 0.2 b.

Operating income, excluding JVs, increased slightly to SEK 22.2 (21.7) b. and operating margin was 9.7% (9.6%). Excluding the gain related to the divestment of Sony Ericsson operating margin was 6.4%, negatively impacted by the business mix, with higher share of coverage projects than capacity projects, and network modernization projects in Europe.

Ericsson’s share in earnings of JV and associated companies was SEK -11.7 (-3.8) b., negatively impacted by the ST-Ericsson charge. Financial net amounted to SEK -0.3 (0.2) b. mainly due to negative currency exchange revaluation effects on financial investments and liabilities.

The tax rate for 2012 was 42% (31%), negatively impacted by product and market mix, and the change in corporate tax rate in Sweden. The one time items related to the ST-Ericsson charge and the gain from the Sony Ericsson divestment had no impact on taxes.

Net income decreased to SEK 5.9 (12.6) b. due to lower contribution from Networks and the negative impact from ST-Ericsson of SEK -11.7 (-2.7) b. The gain related to the divestment of Sony Ericsson of SEK 7.7 b. had a positive effect on net income.

EPS diluted amounted to SEK 1.78 (3.77). EPS Non-IFRS amounted to SEK 3.55 (5.54).

The Board of Directors proposes a dividend for 2012 of SEK 2.75 (2.50), reflecting earnings and balance sheet structure in 2012, as well as coming years’ business plan and expected economic development, according to Ericsson’s dividend policy.

Cash flow from operations was positive at SEK 22.0 (10.0) b., driven by improved working capital.

 

 

Ericsson Fourth Quarter Report 2012   5


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LOGO

 

BALANCE SHEET AND OTHER PERFORMANCE INDICATORS – FULL YEAR

Compared to December 31, 2011, trade receivables decreased to SEK 63.7 (64.5) b. Days sales outstanding (DSO) decreased from 91 to 86 days.

Inventory decreased to SEK 28.8 (33.1) b., positively impacted by higher sales. Inventory turnover days (ITO) decreased from 78 to 73 days. Accounts payable days has decreased from 62 to 57 days.

During the year, Ericsson has performed the following refinancing activities to extend the average debt maturity profile and to further diversify funding sources:

 

   

Issued a USD denominated 1 b. 10-year bond

 

   

Borrowed EUR 150 million from the Nordic Investment Bank divided in two loans 7 and 9 years respectively

 

   

Signed a 7-year loan facility with the European Investment Bank of EUR 500 million, with disbursement within 18 months

 

   

Repurchased EUR 441 million of the 2013 and 2014 EMTN Eurobonds

 

   

Repaid SEK 3.5 b. of Swedish bonds.

Cash, cash equivalents and short-term investments amounted to SEK 76.7 (80.5) b. The net cash position decreased to SEK 38.5 (39.5) b.

For the full year, the net number of employees increased by 5,730 to 110,255 (104,525), of which 3,766 in services and 1,659 in R&D. In 2012, 4,552 people joined Ericsson through acquisitions and through managed services contracts.

 

 

Ericsson Fourth Quarter Report 2012   6


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LOGO

 

LOGO

Segment Results

NETWORKS

 

SEK b.

  Q4
2012
    Q4
2011
    YoY
Change
    Q3
2012
    QoQ
Change
    Full year
2012
    Full year
2011
    Change  

Network sales

    35.3        33.3        6     26.9        31     117.3        132.4        -11

EBITA margin 1)

    10     10     —          8     —          9     16     —     

Operating margin

    8     8     —          5     —          6     13     —     

 

1)

EBITA – Earnings before interest, tax, amortizations and write-downs of acquired intangibles.

FOURTH QUARTER

Sales for comparable units, adjusted for FX and hedging, increased 9% YoY. The increase is mainly related to high year-end business activity in North America and Japan, primarily within mobile broadband infrastructure. CDMA equipment sales declined -18% YoY to SEK 2.5 b. GSM sales in China continued to decline YoY. North America showed good development both YoY and QoQ. The sales increase QoQ of 31% is due to high year-end sales, 3G sales in China, LTE sales in South Korea and high project activity in parts of Western Europe. CDMA equipment sales grew by 58% QoQ due to temporary capacity needs. CDMA equipment sales are expected to continue to decline following North American operators’ transition to LTE.

Ericsson’s leading position in packet core has driven market demand for the Smart Services Router (SSR). 19 new contracts were signed in the quarter. Demand for microwave transport is regaining traction as mobile broadband continues to grow. In the quarter Ericsson also put the world’s first converged multi-standard radio base station for LTE FDD/TDD into commercial operation.

Operating margin was flat YoY. The positive effect from higher sales was partly offset by higher restructuring charges. The improved operating margin QoQ was primarily due to higher sales including temporary CDMA capacity business.

FULL YEAR

Organic and FX adjusted sales decreased -12%, primarily due to lower sales in China, Russia, India and South Korea. However, North America grew despite the -40% decline in CDMA equipment sales. During 2012 we saw good contribution from our IP portfolio, particularly packet core.

Operators’ focus on improving network performance and on service differentiation has been a main driver for mobile broadband investments throughout the year. The demand for IMS is increasing as operators are preparing for launching Voice over LTE (VoLTE). With increasing data traffic in the LTE networks the need for signaling capacity increases. The demand for circuit-switched core continues to decline.

Operating margin decreased to 6% (13%), adversely affected by lower sales, higher share of coverage than capacity projects and network modernization projects in Europe.

 

 

Ericsson Fourth Quarter Report 2012   7


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LOGO

 

LOGO

GLOBAL SERVICES

 

SEK b.

  Q4
2012
    Q4
2011
    YoY
Change
    Q3
2012
    QoQ
Change
    Full
year

2012
    Full
year

2011
    Change  

Global Services sales

    28.0        27.0        4     24.3        15     97.0        83.9        16

Of which Professional Services

    18.9        18.1        4     16.4        15     67.1        58.8        14

Of which Managed Services

    6.8        6.0        12     6.3        7     25.2        21.0        20

Of which Network Rollout

    9.2        8.9        3     7.9        16     30.0        25.1        20
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITA margin 1)

    7     6     —          8     —          7     7     —     

Of which Professional Services

    15     14     —          15     —          15     14     —     

Of which Network Rollout

    -10     -10     —          -5     —          -9     -8     —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating margin

    6     6     —          8     —          6     7     —     

Of which Professional Services

    15     14     —          14     —          14     13     —     

Of which Network Rollout

    -11     -10     —          -6     —          -10     -8     —     

 

1) 

EBITA – Earnings before interest, tax, amortizations and write-downs of acquired intangibles.

FOURTH QUARTER

Sales growth for comparable units, adjusted for FX and hedging, was 4% YoY, primarily driven by Managed Services and Consulting and Systems Integration. Operators continue to focus on increasing their operational efficiency and reducing operating expenses through transformation activities in the voice, IP and OSS/BSS domains, which drive demand for professional services. The QoQ sales growth of 15% was driven by Consulting and Systems Integration as well as Network Rollout.

Professional Services shows improved margin development due to continued efficiency gains and higher sales. The low margin in Network Rollout continued in the quarter and is related to network modernization projects in Europe and coverage projects.

FULL YEAR

Global Services sales grew by SEK 13.2 b. Sales growth for comparable units, adjusted for FX and hedging, was 12%. Growth in Global Services was driven by high Network Rollout sales and continued good momentum in Managed Services and Consulting and Systems Integration.

Global Services sales represented 43% (37%) of Group sales. Operating margin was 6% (7%). The decrease is due to Network Rollout where margins dropped to -10% (-8%) as a consequence of the European modernization projects. Professional Services operating margin was 14% (13%), driven by increased sales and efficiency improvements.

Ericsson supports networks with more than 2.5 billion subscribers. The strategy to industrialize the service delivery continues and the number of services professionals increased with hiring of new employees mainly in the Global Service Centers.

 

Other information

  Q4
2012
    Q3
2012
    Q2
2012
    Q1
2012
    Full year
2012
    Full year
2011
 

No. of signed managed services contracts

    15        11        17        9        52        70   

Of which expansions/extensions

    5        5        5        4        19        32   

No. of signed significant consulting & systems integration contracts1)

    8        3        7        6        24        34   

Number of subscribers in networks managed by Ericsson, end of
period
2)

    ~ 950 m.        ~ 950 m.        > 900 m.        > 900 m.        ~ 950 m.        900 m.   

Of which in network operations contracts

    550 m.        550 m.        500 m.        500 m.        550 m.        500 m.   

Number of Ericsson services professionals, end of period

    60,000        59,000        57,000        57,000        60,000        56,000   

 

1) In the areas of OSS/BSS, IP, Service Delivery Platforms and data center build projects.
2) The figure includes network operations contracts and field operation contracts.
 

 

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SUPPORT SOLUTIONS

 

SEK b.

  Q4
2012
    Q4
2011
    YoY
Change
    Q3
2012
    QoQ
Change
    Full year
2012
    Full year
2011
    Change  

Support Solutions sales

    3.6        3.4        6     3.3        9     13.5        10.6        26

EBITA margin 1)

    12     6     —          19     —          14     2     —     

Operating margin

    8     0     —          14     —          9     -5     —     

 

1)

EBITA – Earnings before interest, tax, amortizations and write-downs of acquired intangibles.

FOURTH QUARTER

Sales growth for comparable units, adjusted for FX and hedging, was 4% YoY. The acquired Telcordia operation added sales of SEK 0.6 b. in the quarter. Multimedia brokering (IPX) was divested in Q312 which impacted sales negatively both YoY and QoQ. IPX sales amounted to SEK 0.4 b in Q411. Demand for OSS/BSS continued to be strong, driven by operators’ focus to improve efficiency and adapt to mobile broadband business requirements.

Operating margin increased YoY, positively impacted by portfolio streamlining and efficiencies. Operating margin declined QoQ, due to higher restructuring charges and a gain of SEK 0.2 b. in Q312 related to the divestment of IPX.

FULL YEAR

Sales growth for comparable units, adjusted for FX and hedging, was 9%. Increased sales and execution on the new strategy, announced in Q1 2012, as well as portfolio streamlining and efficiency improvements, generated an operating margin of 9% (-5%).

The number of subscriptions served by Ericsson’s charging and billing solutions was 2.0 billion at the end of the year.

 

 

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ST-ERICSSON

Ericsson Group asset overview ST-Ericsson

 

USD m.

  Q4
2012
    Q4
2011
    YoY
Change
    Q3
2012
    QoQ
Change
 

Net sales

    358        409        -12     359        0

Adjusted operating income 1)

    -133        -207        36     -148        10

Operating income 2)

    -169        -241        30     -174        3

 

1)

Operating income adjusted for amortization of acquired intangibles and restructuring charges.

2)

Q412 excluding USD 1,531 million gain from shareholders’ debt forgiveness and USD 1,060 million charges for impairment of goodwill and intangible assets.

ST-Ericsson sales were flat QoQ reflecting growth contribution from the NovaThor platform shipments as well as IP licensing. During the quarter, Ericsson and STMicroelectronics waived their credit of USD 1.5 b. under the parents’ loan facility. There was no remaining net debt at the end of the quarter. At the end of Q312 the net debt was USD 1.4 b. ST-Ericsson is reporting in US GAAP.

 

SEK m.

   March 31,
2012
     June 30,
2012
     Sep 30,
2012
     Dec 31,
2012
 

Investment in ST-Ericsson

     1,982         767         195         0   

Loans to ST-Ericsson

     3,241         4,311         4,538         0   

Total

     5,223         5,078         4,733         0   

On December 10, 2012, STMicroelectronics announced its intention to exit as a shareholder in ST-Ericsson. On December 20, 2012, Ericsson announced that it would take a non-cash charge in Q412 related to its 50% stake in ST-Ericsson. The charge includes write-down of investments to reflect the current best estimate of Ericsson’s share of the fair market value of the JV and provisions related to the strategic options at hand for ST-Ericsson assets. In total, Ericsson has made write-downs of SEK -4.7 b. of ST-Ericsson investments and taken a provision of SEK -3.3 b. In addition, Ericsson’s share in ST-Ericsson’s operating loss amounted to SEK -0.5 (-0.8) b.

As of December 31, 2012 there are no remaining investments related to ST-Ericsson on Ericsson’s balance sheet. Costs and cash related to implementation of strategic options at hand will be booked against provisions.

 

 

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Regional sales Overview

 

     Fourth quarter 2012     Growth     Full  year
2012
    Growth  

SEK b.

  Net-works     Global
Services
    Support
Solutions
    Total     YoY     QoQ      

North America

    9.4        6.8        0.8        17.0        51     21     56.7        16

Latin America

    2.9        3.2        0.4        6.5        -7     20     22.0        0

Northern Europe and Central Asia

    1.6        1.2        0.2        3.0        -21     11     11.3        -25

Western and Central Europe

    2.3        2.9        0.2        5.4        3     50     17.5        -8

Mediterranean

    2.8        4.1        0.3        7.1        -14     31     23.3        -2

Middle East

    2.5        2.1        0.5        5.1        -3     39     15.6        1

Sub-Saharan Africa

    2.0        1.2        0.3        3.6        11     27     11.3        12

India

    0.9        0.6        0.1        1.6        5     -8     6.5        -34

China and North East Asia

    6.5        3.6        0.1        10.2        -6     22     36.2        -5

South East Asia and Oceania

    2.5        1.9        0.1        4.5        13     29     15.1        9

Other1)

    2.0        0.4        0.6        3.0        -10     -10     12.3        15
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    35.3        28.0        3.6        66.9        5     23     227.8        0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1) 

Region “Other” includes licensing revenues, sales of cables, broadcast services, power modules and other businesses.

In the regional dimension, all of the Telcordia sales are reported in the Support Solutions segment except for North America where it is split 50/50 between Global Services and Support Solutions. The acquired Technicolor Broadcast Service Division is reported in region “Other”. Multimedia brokering (IPX) was previously reported in each region in segment Support Solutions. For the first three quarters 2012 it was part of region “Other”. Multimedia brokering (IPX) was divested end Q312.

North America. All segments grew both YoY and QoQ driven by continued high activity levels in coverage projects. CDMA sales continue to wind down, but at a slower pace in the quarter due to temporary capacity needs.

Coverage, consolidation and network evolution were market priorities throughout 2012, driving strong performance across all segments.

Latin America. Networks and Global Services business slowed down YoY due to low initial LTE deployment. Global Services sales increased QoQ driven by managed services and systems integration. The sequential increase in Networks was driven by 3G sales. OSS/BSS and IPTV contributed to the YoY growth in Support Solutions.

During 2012 all major operators decided on LTE suppliers, resulting in an estimated market share for Ericsson of more than 50%.

Northern Europe and Central Asia. Networks sales were basically flat both YoY and QoQ, with continued low investment levels in Russia. Global Services declined YoY mainly due to large 3G rollout in Russia during 2011. Global Services growth QoQ was driven by systems integration sales. Support Solutions grew YoY and QoQ mainly through Content Delivery Network deployments.

Throughout the year the trend of lower investments, primarily in Russia, continued to impact sales negatively.

Western and Central Europe. The QoQ growth in Networks was driven by high project activity and ongoing modernization projects. OSS/BSS and systems integration drove sales in Global Services and Support Solutions.

Cautious operator investments caused a decline for the full year.

 

 

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Mediterranean. The YoY decline was driven by current market and macroeconomic conditions. The modernization projects are progressing according to plan. The QoQ improvement was driven by growth in all segments.

2012 was impacted by weak macro economy in many countries and cautious operator investments.

Middle East. Networks sales grew QoQ after several quarters of lower activity. OSS/BSS developed favorably both YoY and QoQ, driven by operators’ focus on quality and operational efficiency. Managed services showed good growth in the quarter and for the full year.

The political unrest in some countries continues and has negatively impacted operator investments during the year, leading to a flat sales development in 2012.

Sub-Saharan Africa. The sales increase YoY is driven by operator investments in Nigeria and South Africa. While 3G is increasing, the majority of sales is still related to 2G. Data traffic is growing across the region and LTE deployments have started with three networks launched in Southern Africa.

Following a slow 2011, sales in all segments in the region grew during 2012.

India. Continued low activity levels with operator investments only in certain areas. Data traffic is growing from a low base as smartphones and tablets become more affordable. Growth in Support Solutions YoY was driven by Telcordia.

The full year decrease is mainly due to large initial 3G deployments in the first three quarters of 2011.

China and North East Asia. Networks declined YoY, driven by continued lower sales of GSM in China as well as lower 3G sales in South Korea as operators transition to LTE. Global Services growth continued mainly driven by turnkey projects in Japan. Sequentially Networks grew, mainly driven by LTE expansions in Japan and South Korea as well as by 3G expansions in China.

Sales grew in Japan in 2012, however, not fully offsetting the lower sales of GSM in China and 3G in South Korea.

South East Asia and Oceania. Positive development both YoY and QoQ driven by continued momentum for data traffic, particularly in Indonesia. Global Services sales were also driven by deployments in Australia.

Full-year growth was driven by sales in Indonesia, underpinned by the Global Services performance in Australia and network deployments in Thailand and the Philippines.

Other. Multimedia Brokering (IPX) was divested at the end of Q312. Licensing revenues continued to show stable development YoY. Sales of broadcast services, cables, power modules and other businesses are also included in “Other”.

The full-year growth was driven by licensing revenues which increased to SEK 6.6 (6.2) b., the acquired Technicolor Broadcast Service Division that was consolidated in Q312 and Multimedia brokering (IPX) that was reported in Region “Other” for the first three quarters of the year.

 

 

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Market data

GROWTH RATES ARE BASED ON ERICSSON AND MARKET ESTIMATES

 

     Q4      Q4            FULL YEAR      Ericsson
forecast
 
     2012      2011      Change     2010      2011      2012      2013  

Mobile subscriptions, billion

     ~6.3         5.8         ~9     5.1         5.8         ~6.3         ~6.8   

Net additions, million

     ~140         165         ~-15     650         650         ~550         ~500   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Mobile broadband, billion 1)

     ~1.5         1.0         ~50     0.6         1.0         ~1.5         ~2.1   

Net additions, million

     ~125         120         ~2     300         400         ~500         ~600   

 

1)

Mobile broadband includes handsets, tablets, mobile PCs and mobile routers for the following technologies: HSPA, LTE, CDMA2000 EV-DO, TD-SCDMA and WiMAX.

Note: due to continuous improvements in reported data from operators, historical subscriptions figures might have changed compared to those previously reported, affecting comparison of net additions and total figures. For India we have changed measurement to VLR-subscribers to better reflect underlying growth. All figures are approximate.

Parent Company Information

Income after financial items was SEK -4.9 (6.4) b.

A write-down of the original investment in ST-Ericsson of SEK 8.6 b. was made during the quarter. This write-down does not have any impact on Group level. Another write-down was made including the short-term credit facility to ST-Ericsson of SEK 5.0 b. and a provision of SEK 3.3 b. relating to the strategic options at hand for ST-Ericsson assets. The total write-downs and provision relating to ST-Ericsson in the quarter amount to SEK 17.0 b.

Major changes in the Parent Company’s financial position for the year were; lower cash, cash equivalents and short-term investments of SEK 1.5 b., and increased current and non-current receivables from subsidiaries of SEK 7.2 b. At the end of the quarter, cash, cash equivalents and short-term investments amounted to SEK 57.4 (58.9) b.

In accordance with the conditions of the long-term variable remuneration program (LTV) for Ericsson employees, 2,419,296 shares from treasury stock were sold or distributed to employees during the fourth quarter. The holding of treasury stock at December 31, 2012, was 84,798,095 Class B shares.

DIVIDEND PROPOSAL

The Board of Directors will propose to the Annual General Meeting a dividend of SEK 2.75 (2.50) per share, representing some SEK 9.1 (8.2) b., and April 12, 2013, as the record day for payment of dividend. The dividend is reflecting 2012 year’s earnings and balance sheet structure, as well as coming years’ business plans and expected economic development.

Ericsson annual general meeting

The Annual General Meeting of shareholders will be held on April 9, 2013, 15.00 (CET) at Kistamässan in Kista, Stockholm, Sweden.

ANNUAL REPORT

The annual report will be made available on our website www.ericsson.com and at the Ericsson headquarters, Torshamnsgatan 23, Kista, Stockholm, Sweden, during the first weeks of March.

 

 

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Other Information

SAMSUNG LITIGATION

On November 27, 2012, Ericsson filed two patent infringement lawsuits in the US District Court for the Eastern District of Texas against Samsung. Ericsson seeks damages and an injunction. Ericsson also asked the Court to adjudge that Samsung breached its commitment to license any standard-essential patents it owns on fair, reasonable, and non-discriminatory terms and to declare Samsung’s allegedly standard essential patents to be unenforceable.

On November 30, 2012, Ericsson filed a complaint with the US International Trade Commission (ITC) seeking an exclusion order blocking Samsung from importing certain products into the US. The ITC instituted an investigation of Ericsson’s complaint on January 3, 2013.

On December 21, 2012, Samsung filed a complaint with the US International Trade Commission (ITC) seeking an exclusion order blocking Ericsson from importing certain products into the US. The ITC instituted an investigation of Samsung’s complaint on January 25, 2013.

REDUCTION OF NUMBER OF EMPLOYEES IN SWEDEN

On November 7, 2012, Ericsson informed its employees in Sweden about the plan to reduce its operations in Sweden by including a reduction of an estimated 1,550 positions. Union negotiations are ongoing and affected employees are expected to be informed during March 2013.

ON NEW POSITIONS

On November 19, 2012, Sara Mazur assumed the position as Vice President and Head of Ericsson Research. Prior to this Sara Mazur held the position as Head of Systems Management at Business Unit Networks.

On January 1, 2013, Mats H Olsson assumed the role as Senior Vice President Asia-Pacific. In this role he will continue to report to President and CEO Hans Vestberg and be a member of the Executive Leadership Team. Prior to this Mats H Olsson held the position as Head of region China and North East Asia.

On January 1, 2013, Rima Qureshi assumed the position as Senior Vice President Strategic Projects. In this role she will continue to report to President and CEO Hans Vestberg and be a member of the Executive Leadership Team. Rima Qureshi previously held the position as Head of Business Unit CDMA Mobile Systems which was transited into business unit Networks on January 1, 2013.

Effective April 1, 2013, Fredrik Jejdling will assume the position as head of region Sub-Saharan Africa. In this position Fredrik Jejdling will remain member of the Global Leadership Team. Fredrik Jejdling currently holds the position as head of region India.

 

 

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Post-closing events

SALE OF PATENTS TO UNWIRED PLANET

On January 10, 2013, Ericsson entered into an agreement with Unwired Planet whereby Ericsson will transfer 2,185 issued patents and patent applications to Unwired Planet. Ericsson will also contribute 100 additional patent assets annually to Unwired Planet commencing in 2014 through 2018. Unwired Planet will compensate Ericsson with certain ongoing rights in future revenues generated from the enlarged patent portfolio. Unwired Planet will also grant Ericsson a license to its patent portfolio.

ACQUISITION OF DEVOTEAM

On January 21, 2013, Ericsson announced its intention to acquire Devoteam Telecom & Media operations in France. Devoteam is a leader in Information and Communications Technology consulting with 5,000 employees in Europe, Middle East and Africa.

The acquisition is in line with Ericsson’s services strategy to broaden its IT capabilities.

 

 

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Assessment of risk environment

Ericsson’s operational and financial risk factors and uncertainties along with our strategies and tactics to mitigate risk exposures or limit unfavorable outcomes are described in our Annual Report 2011. Compared to the risks described in the Annual Report 2011, no material, new or changed risk factors or uncertainties have been identified in the quarter.

Risk factors and uncertainties in focus short-term for the Parent Company and the Ericsson Group include:

 

   

Potential negative effects on operators’ willingness to invest in network development due to uncertainty in the financial markets and a weak economic business environment, or reduced consumer telecom spending, or increased pressure on us to provide financing;

 

   

Uncertainty regarding the financial stability of suppliers, for example due to lack of financing;

 

   

Effects on gross margins and/or working capital of the product mix in the Networks segment between sales of upgrades and expansions (mainly software) and new build-outs of coverage (mainly hardware);

 

   

Effects on gross margins of the product mix in the Global Services segment including proportion of new network build-outs and share of new managed services deals with initial transition costs;

 

   

A continued volatile sales pattern in the Support Solutions segment or variability in our overall sales seasonality could make it more difficult to forecast future sales;

 

   

Effects of the ongoing industry consolidation among our customers as well as between our largest competitors, e.g. with postponed investments and intensified price competition as a consequence;

 

   

Implementation of the strategic options at hand for our joint venture ST-Ericsson and related capital need;

 

   

Changes in foreign exchange rates, in particular USD and EUR;

 

   

Political unrest or instability in certain markets;

 

   

Effects on production and sales from restrictions with respect to timely and adequate supply of materials, components and production capacity and other vital services on competitive terms;

 

   

Natural disasters and other events, affecting business, production, supply and transportation.

Ericsson stringently monitors the compliance with all relevant trade regulations and trade embargos applicable to dealings with customers operating in countries where there are trade restrictions or trade restrictions are discussed. Moreover, Ericsson operates globally in accordance with Group policies and directives for business ethics and conduct.

Stockholm, January 31, 2013

Telefonaktiebolaget LM Ericsson (publ)

Hans Vestberg, President and CEO

Org. Nr. 556016-0680

Date for next report: April 24, 2013

 

 

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Auditors’ Review Report

We have reviewed this report for the period January 1, 2012, to December 31, 2012, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this financial information based on our review.

We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, January 31, 2013

PricewaterhouseCoopers AB

 

Peter Nyllinge    Johan Engstam

Authorized Public Accountant

Auditor in Charge

   Authorized Public Accountant
 

 

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Editor’s Note

To read the complete report with tables, please go to: www.ericsson.com/res/investors/docs/q-reports/2012/12month12-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), January 31, 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/press

FOR FURTHER INFORMATION, PLEASE CONTACT

Helena Norrman, Senior Vice President, Communications

Phone: +46 10 719 3472

E-mail: investor.relations@ericsson.com or media.relations@ericsson.com

 

INVESTORS

  MEDIA

Stefan Jelvin, Director,

Investor Relations

Phone: +46 10 714 2039

+46 709 860 227

E-mail: investor.relations@ericsson.com

 

Ola Rembe, Vice President,

Head of Corporate Communications & PR

Phone: +46 10 719 9727

+46 730 244 873

E-mail: media.relations@ericsson.com

Åsa Konnbjer, Director,

Investor Relations

Phone: +46 10 713 3928

+46 730 825 928

E-mail: investor.relations@ericsson.com

 

Corporate Communications & PR

Phone: +46 10 719 69 92

E-mail: media.relations@ericsson.com

Rikard Tunedal, Director,

Investor Relations

Phone: +46 10 714 5400

+46 761 005 400

E-mail: investor.relations@ericsson.com

Telefonaktiebolaget LM Ericsson (publ)

Org. number: 556016-0680

Torshamnsgatan 23

SE-164 83 Stockholm

Phone: +46 10 719 0000

www.ericsson.com

 

 

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Safe Harbor Statement of Ericsson under the US Private Securities Litigation Reform Act of 1995;

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans to launch new products and services; (xiii) assessments of risks; (xiv) integration of acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements of intellectual property rights of others.

In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for Ericsson include, but are not limited to: (i) material adverse changes in the markets in which we operate or in global economic conditions; (ii) increased product and price competition; (iii) reductions in capital expenditure by network operators; (iv) the cost of technological innovation and increased expenditure to improve quality of service; (v) significant changes in market share for our principal products and services; (vi) foreign exchange rate or interest rate fluctuations; and (vii) the successful implementation of our business and operational initiatives.

 

 

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Financial Statements and Additional Information

 

     Page  

Financial statements

  

Consolidated income statement

     21   

Statement of comprehensive income

     21   

Consolidated balance sheet

     22   

Consolidated statement of cash flows

     23   

Consolidated statement of changes in equity

     24   

Consolidated income statement - isolated quarters

     25   

Consolidated statement of cash flows - isolated quarters

     26   

Parent Company income statement

     27   

Parent Company balance sheet

     27   
     Page  

Additional information

  

Accounting policies

     27   

Net sales by segment by quarter

     28   

Sales growth for comparable units, adjusted for currency effects and hedging

     29   

Operating income by segment by quarter

     29   

Operating margin by segment by quarter

     29   

EBITA by segment by quarter

     31   

EBITA margin by segment by quarter

     31   

Net sales by region by quarter

     30   

Net sales by region by quarter (cont.)

     31   

Top 5 countries in sales

     31   

Net sales by region by segment

     32   

Provisions

     33   

Number of employees

     33   

Information on investments in assets subject to depreciation, amortization and impairment and write-downs

     33   

Other information

     34   

Restructuring charges by function

     35   

Restructuring charges by segment

     35   
 

 

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CONSOLIDATED INCOME STATEMENT

 

     Oct - Dec           Jan - Dec        

SEK million

   2011     2012     Change     2011     2012     Change  

Net sales

     63,667        66,936        5     226,921        227,779        0

Cost of sales

     -44,463        -46,133        4     -147,200        -155,699        6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross income

     19,204        20,803        8     79,721        72,080        -10

Gross margin (%)

     30.2     31.1       35.1     31.6  

Research and development expenses

     -8,715        -9,247        6     -32,638        -32,833        1

Selling and administrative expenses

     -6,837        -7,139        4     -26,683        -26,023        -2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     -15,552        -16,386        5     -59,321        -58,856        -1

Other operating income and expenses 1)

     403        345          1,278        8,965     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income before shares in earnings of JV and associated companies

     4,055        4,762        17     21,678        22,189        2

Operating margin before shares in earnings of JV and associated companies (%)

     6.4     7.1       9.6     9.7  

Shares in earnings of JV and associated companies

     -1,899        -8,565        351     -3,778        -11,731        211
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     2,156        -3,803        -276     17,900        10,458        -42

Financial income

     405        438          2,882        1,708     

Financial expenses

     -732        -512          -2,661        -1,984     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income after financial items

     1,829        -3,877        -312     18,121        10,182        -44

Taxes

     -338        -2,378          -5,552        -4,244     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     1,491        -6,255        -520     12,569        5,938        -53
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

            

- Stockholders of the Parent Company

     1,154        -6,462          12,194        5,775     

- Non-controlling interests

     337        207          375        163     

Other information

            

Average number of shares, basic (million)

     3,209        3,219          3,206        3,216     

Earnings per share, basic (SEK) 2)

     0.36        -2.01          3.80        1.80     

Earnings per share, diluted (SEK) 2)

     0.36        -1.99          3.77        1.78     
STATEMENT OF COMPREHENSIVE INCOME            
     Oct - Dec      Jan - Dec  

SEK million

   2011      2012      2011      2012  

Net income

     1,491         -6,255         12,569         5,938   

Other comprehensive income

           

Actuarial gains and losses, and the effect of the asset ceiling, related to pensions

     211         800         -6,963         -451   

Revaluation of other investments in shares and participations

           

Fair value remeasurement

     1         4         —           6   

Cash flow hedges

           

Gains/losses arising during the period

     116         602         996         1,668   

Reclassification adjustments for gains/losses included in profit or loss

     355         -353         -2,028         -568   

Adjustments for amounts transferred to initial carrying amount of hedged items

     —           —           —           92   

Changes in cumulative translation adjustments

     -538         143         -964         -3,947   

Share of other comprehensive income on JV and associated companies

     -85         -463         -262         -486   

Tax on items relating to components of other comprehensive income

     95         -548         2,158         -422   

Total other comprehensive income

     155         185         -7,063         -4,108   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total comprehensive income

     1,646         -6,070         5,506         1,830   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total comprehensive income attributable to:

           

Stockholders of the Parent Company

     1,282         -6,284         5,081         1,716   

Non-controlling interests

     364         214         425         114   

 

1) 

Includes gain on sale of Sony Ericsson SEK 7.7 b. in Q1 2012

2) 

Based on Net income attributable to stockholders of the Parent Company

 

Ericsson Fourth Quarter Report 2012    21


Table of Contents

CONSOLIDATED BALANCE SHEET

 

     Dec 31     Sep 30     Dec 31  

SEK million

   2011     2012     2012  

ASSETS

      

Non-current assets

      

Intangible assets

      

Capitalized development expenses

     3,523        3,964        3,840   

Goodwill

     27,438        30,319        30,404   

Intellectual property rights, brands and other intangible assets

     13,083        16,125        15,202   

Property, plant and equipment

     10,788        11,559        11,493   

Financial assets

      

Equity in JV and associated companies

     5,965        1,526        2,842   

Other investments in shares and participations

     2,199        2,010        386   

Customer financing, non-current

     1,400        1,331        1,290   

Other financial assets, non-current

     4,117        3,704        3,964   

Deferred tax assets

     13,020        13,506        12,321   
  

 

 

   

 

 

   

 

 

 
     81,533        84,044        81,742   

Current assets

      

Inventories

     33,070        32,424        28,802   

Trade receivables

     64,522        61,562        63,660   

Customer financing, current

     2,845        2,703        4,019   

Other current receivables

     17,837        23,417        20,065   

Short-term investments

     41,866 1)      35,976 1)      32,026   

Cash and cash equivalents

     38,676        32,845        44,682   
  

 

 

   

 

 

   

 

 

 
     198,816        188,927        193,254   

Total assets

     280,349        272,971        274,996   
  

 

 

   

 

 

   

 

 

 

EQUITY AND LIABILITIES

      

Equity

      

Stockholders’ equity

     143,105        143,079        136,883   

Non-controlling interest in equity of subsidiaries

     2,165        1,463        1,600   
  

 

 

   

 

 

   

 

 

 
     145,270        144,542        138,483   

Non-current liabilities

      

Post-employment benefits

     10,016        9,732        9,503   

Provisions, non-current

     280        196        211   

Deferred tax liabilities

     2,250        3,604        3,120   

Borrowings, non-current

     23,256        22,910        23,898   

Other non-current liabilities

     2,248        2,513        2,377   
  

 

 

   

 

 

   

 

 

 
     38,050        38,955        39,109   

Current liabilities

      

Provisions, current

     5,985        5,047        8,427   

Borrowings, current

     7,765        7,196        4,769   

Trade payables

     25,309        21,968        23,100   

Other current liabilities

     57,970        55,263        61,108   
  

 

 

   

 

 

   

 

 

 
     97,029        89,474        97,404   

Total equity and liabilities

     280,349        272,971        274,996   
  

 

 

   

 

 

   

 

 

 

Of which interest-bearing liabilities and post-employment benefits

     41,037        39,838        38,170   

Of which net cash

     39,505        28,983        38,538   

Assets pledged as collateral

     452        538        520   

Contingent liabilities

     609        548        613   

 

1) 

Including loan to ST-Ericsson of SEK 2,759 million as of December 31, 2011, SEK 4,538 million as of September 30, 2012

 

Ericsson Fourth Quarter Report 2012    22


Table of Contents

CONSOLIDATED STATEMENT OF CASH FLOWS

 

     Oct - Dec      Jan - Dec  

SEK million

   2011      2012      2011      2012  

Operating activities

           

Net income

     1,491         -6,255         12,569         5,938   

Adjustments to reconcile net income to cash

           

Taxes

     752         2,049         1,994         -1,140   

Earnings/dividends in JV and associated companies

     1,817         8,707         3,710         11,769   

Depreciation, amortization and impairment losses

     2,428         2,779         9,036         9,889   

Other

     472         -366         -2,127         -7,441   
  

 

 

    

 

 

    

 

 

    

 

 

 
     6,960         6,914         25,182         19,015   

Changes in operating net assets

           

Inventories

     5,208         3,418         -3,243         2,752   

Customer financing, current and non-current

     290         -1,377         74         -1,259   

Trade receivables

     565         -2,280         -1,700         -1,103   

Trade payables

     246         1,140         -1,648         -1,311   

Provisions and post-employment benefits

     -2,278         379         -5,695         -1,920   

Other operating assets and liabilities, net

     -5,524         7,497         -2,988         5,857   
  

 

 

    

 

 

    

 

 

    

 

 

 
     -1,493         8,777         -15,200         3,016   

Cash flow from operating activities

     5,467         15,691         9,982         22,031   

Investing activities

           

Investments in property, plant and equipment

     -1,524         -1,326         -4,994         -5,429   

Sales of property, plant and equipment

     172         252         386         568   

Acquisitions/divestments of subsidiaries and other operations, net 1)

     -235         120         -3,128         -2,077   

Product development

     -560         -430         -1,515         -1,641   

Other investing activities

     -210         213         -900         1,540   

Short-term investments

     -1,533         -1,045         14,692         2,151   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash flow from investing activities

     -3,890         -2,216         4,541         -4,888   

Cash flow before financing activities

     1,577         13,475         14,523         17,143   

Financing activities

           

Dividends paid

     -5         1         -7,455         -8,632   

Other financing activities

     828         -1,609         961         -753   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash flow from financing activities

     823         -1,608         -6,494         -9,385   

Effect of exchange rate changes on cash

     14         -30         -217         -1,752   

Net change in cash

     2,414         11,837         7,812         6,006   

Cash and cash equivalents, beginning of period

     36,262         32,845         30,864         38,676   

Cash and cash equivalents, end of period

     38,676         44,682         38,676         44,682   

 

1) 

Includes payment of external loan of SEK -6.2 b. attributable to the acquisition of Telcordia in Q1 2012

 

Ericsson Fourth Quarter Report 2012    23


Table of Contents

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

     Jan - Dec      Jan - Dec  

SEK million

   2011      2012  

Opening balance

     146,785         145,270   

Total comprehensive income

     5,506         1,830   

Sale/Repurchase of own shares

     92         -93   

Stock issue

     —           159   

Stock Purchase Plan

     413         405   

Dividends paid

     -7,455         -8,632   

Transactions with non-controlling interests

     -71         -456   
  

 

 

    

 

 

 

Closing balance

     145,270         138,483   
  

 

 

    

 

 

 

 

Ericsson Fourth Quarter Report 2012    24


Table of Contents

CONSOLIDATED INCOME STATEMENT – ISOLATED QUARTERS

 

     2011     2012  

Isolated quarters, SEK million

   Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

Net sales

     52,966        54,770        55,518        63,667        50,974        55,319        54,550        66,936   

Cost of sales

     -32,578        -34,064        -36,095        -44,463        -33,985        -37,611        -37,970        -46,133   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross income

     20,388        20,706        19,423        19,204        16,989        17,708        16,580        20,803   

Gross margin (%)

     38.5     37.8     35.0     30.2     33.3     32.0     30.4     31.1

Research and development expenses

     -7,991        -8,108        -7,824        -8,715        -8,016        -8,097        -7,473        -9,247   

Selling and administrative expenses

     -6,441        -7,741        -5,664        -6,837        -6,232        -6,855        -5,797        -7,139   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     -14,432        -15,849        -13,488        -15,552        -14,248        -14,952        -13,270        -16,386   

Other operating income and expenses 1)

     343        166        366        403        7,749        530        341        345   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income before shares in earnings of JV and associated companies

     6,299        5,023        6,301        4,055        10,490        3,286        3,651        4,762   

Operating margin before shares in earnings of JV and associated companies (%)

     11.9     9.2     11.3     6.4     20.6     5.9     6.7     7.1

Shares in earnings of JV and associated companies

     -468        -771        -640        -1,899        -1,403        -1,208        -555        -8,565   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     5,831        4,252        5,661        2,156        9,087        2,078        3,096        -3,803   

Financial income

     302        977        1,198        405        262        618        390        438   

Financial expenses

     -306        -636        -987        -732        -273        -924        -275        -512   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income after financial items

     5,827        4,593        5,872        1,829        9,076        1,772        3,211        -3,877   

Taxes

     -1,747        -1,377        -2,090        -338        -272        -567        -1,027        -2,378   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     4,080        3,216        3,782        1,491        8,804        1,205        2,184        -6,255   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

                

- Stockholders of the Parent Company

     4,103        3,116        3,821        1,154        8,950        1,110        2,177        -6,462   

- Non-controlling interests

     -23        100        -39        337        -146        95        7        207   

Other information

                

Average number of shares, basic (million)

     3,202        3,204        3,207        3,209        3,212        3,215        3,217        3,219   

Earnings per share, basic (SEK) 2)

     1.28        0.97        1.19        0.36        2.79        0.35        0.68        -2.01   

Earnings per share, diluted (SEK) 2)

     1.27        0.96        1.18        0.36        2.76        0.34        0.67        -1.99   

 

1)

Includes gain on sale of Sony Ericsson SEK 7.7 b. in Q1 2012

2) 

Based on Net income attributable to stockholders of the Parent Company

 

Ericsson Fourth Quarter Report 2012    25


Table of Contents

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

     2011      2012  

Isolated quarters, SEK million

   Q1      Q2      Q3      Q4      Q1      Q2      Q3      Q4  

Operating activities

                       

Net income

     4,080         3,216         3,782         1,491         8,804         1,205         2,184         -6,255   

Adjustments to reconcile net income to cash

                       

Taxes

     721         -29         550         752         -1,118         -1,185         -886         2,049   

Earnings/dividends in JV and associated companies

     452         783         658         1,817         1,290         1,193         579         8,707   

Depreciation, amortization and impairment losses

     2,209         2,172         2,227         2,428         2,315         2,401         2,394         2,779   

Other

     -1,201         -1,107         -291         472         -7,022         -466         413         -366   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     6,261         5,035         6,926         6,960         4,269         3,148         4,684         6,914   

Changes in operating net assets

                       

Inventories

     -3,462         -2,370         -2,619         5,208         -59         43         -650         3,418   

Customer financing, current and non-current

     196         195         -607         290         282         —           -164         -1,377   

Trade receivables

     -1,610         2,114         -2,769         565         3,722         -5,427         2,882         -2,280   

Trade payables

     -255         -834         -805         246         -2,713         1,717         -1,455         1,140   

Provisions and post-employment benefits

     -752         -485         -2,180         -2,278         -1,771         -353         -175         379   

Other operating assets and liabilities, net

     -3,284         2,126         3,694         -5,524         -2,999         -492         1,851         7,497   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     -9,167         746         -5,286         -1,493         -3,538         -4,512         2,289         8,777   

Cash flow from operating activities

     -2,906         5,781         1,640         5,467         731         -1,364         6,973         15,691   

Investing activities

                       

Investments in property, plant and equipment

     -980         -1,196         -1,294         -1,524         -1,648         -994         -1,461         -1,326   

Sales of property, plant and equipment

     97         58         59         172         309         -10         17         252   

Acquisitions/divestments of subsidiaries and other operations, net 1)

     -455         -507         -1,931         -235         -1,730         -110         -357         120   

Product development

     -269         -429         -257         -560         -251         -525         -435         -430   

Other investing activities

     179         -100         -769         -210         195         -520         1,652         213   

Short-term investments

     3,706         3,196         9,323         -1,533         -3,999         8,133         -938         -1,045   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash flow from investing activities

     2,278         1,022         5,131         -3,890         -7,124         5,974         -1,522         -2,216   

Cash flow before financing activities

     -628         6,803         6,771         1,577         -6,393         4,610         5,451         13,475   

Financing activities

                       

Dividends paid

     —           -7,209         -241         -5         —           -8,252         -381         1   

Other financing activities

     1,240         -1,097         -10         828         -1,318         1,112         1,062         -1,609   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cash flow from financing activities

     1,240         -8,306         -251         823         -1,318         -7,140         681         -1,608   

Effect of exchange rate changes on cash

     -720         211         278         14         -327         599         -1,994         -30   

Net change in cash

     -108         -1,292         6,798         2,414         -8,038         -1,931         4,138         11,837   

Cash and cash equivalents, beginning of period

     30,864         30,756         29,464         36,262         38,676         30,638         28,707         32,845   

Cash and cash equivalents, end of period

     30,756         29,464         36,262         38,676         30,638         28,707         32,845         44,682   

 

1) 

Includes payment of external loan of SEK -6.2 b. attributable to the acquisition of Telcordia in Q1 2012

 

Ericsson Fourth Quarter Report 2012    26


Table of Contents

Accounting Policies

The Group

This interim report is prepared in accordance with IAS 34. 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, 2011, and should be read in conjunction with that annual report.

As from January 1, 2012, the Company has applied the following new or amended IFRSs and IFRICs:

 

   

Amendment to IAS 12 Income taxes: Deferred tax: Recovery of underlying assets

 

   

Amendments to IFRS 7 Financial instruments disclosures: Transfers of financial Assets

None of the new or amended standards and interpretations has had any significant impact on the financial result or position of the Company. There is no difference between IFRS effective as per December 31, 2012 and IFRS as endorsed by the EU.

Estimated impact due to amendment of IAS 19 Employee Benefits as from January 1st, 2013

The main amendment of IAS 19 is that the corridor method is eliminated. The Company implemented on January 1st 2006 the immediate and full recognition of actuarial gains/losses in other comprehensive income (OCI) meaning that the corridor method has not been applied by the Company as from that date.

Other main amendments of IAS 19 which impact the Company relate to:

- The implementation of the net interest expense/(income), which integrates the interest cost and expected return on assets to be based on the discount rate used to calculate the defined benefit obligation. An analysis of fiscal year 2012 in relation to this amendment indicates an impact on pension costs for 2012 with an increase of approximately SEK0.4 (-0,1) billion.

- The taxes to be incorporated into the defined benefit obligation and plan assets. This amendment relates to the Swedish special payroll taxes to be reclassified from other current liabilities to post-employment benefits with an estimated amount of SEK 1.8 (1.8) billion as per 2012-12-31.

 

Ericsson Fourth Quarter Report 2012    27


Table of Contents

NET SALES BY SEGMENT BY QUARTER

Segments Sony Ericsson and ST-Ericsson are reported in accordance with the equity method, thus their sales are not included.

 

     2011     2012  

Isolated quarters, SEK million

   Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

Networks

     33,249        33,360        32,506        33,280        27,314        27,766        26,939        35,266   

Global Services

     17,435        19,036        20,438        26,975        20,631        24,074        24,296        28,042   

Of which Professional Services

     12,571        13,463        14,719        18,081        14,884        16,947        16,388        18,873   

Of which Managed Services

     4,924        4,724        5,304        6,046        5,708        6,468        6,306        6,752   

Of which Network Rollout

     4,864        5,573        5,719        8,894        5,747        7,127        7,908        9,169   

Support Solutions

     2,282        2,374        2,574        3,412        3,029        3,479        3,315        3,628   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     52,966        54,770        55,518        63,667        50,974        55,319        54,550        66,936   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2011     2012  

Sequential change, percent

   Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

Networks

     -9     0     -3     2     -18     2     -3     31

Global Services

     -24     9     7     32     -24     17     1     15

Of which Professional Services

     -25     7     9     23     -18     14     -3     15

Of which Managed Services

     -8     -4     12     14     -6     13     -3     7

Of which Network Rollout

     -21     15     3     56     -35     24     11     16

Support Solutions

     -34     4     8     33     -11     15     -5     9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -16     3     1     15     -20     9     -1     23
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2011     2012  

Year over year change, percent

   Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

Networks

     35     31     25     -9     -18     -17     -17     6

Global Services

     -4     -5     7     18     18     26     19     4

Of which Professional Services

     -5     -9     7     8     18     26     11     4

Of which Managed Services

     1     -16     1     13     16     37     19     12

Of which Network Rollout

     0     6     7     44     18     28     38     3

Support Solutions

     -1     -2     11     -2     33     47     29     6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     17     14     17     1     -4     1     -2     5
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2011     2012  

Year to date, SEK million

   Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec     Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec  

Networks

     33,249        66,609        99,115        132,395        27,314        55,080        82,019        117,285   

Global Services

     17,435        36,471        56,909        83,884        20,631        44,705        69,001        97,043   

Of which Professional Services

     12,571        26,034        40,753        58,834        14,884        31,830        48,219        67,092   

Of which Managed Services

     4,924        9,648        14,952        20,998        5,708        12,176        18,482        25,234   

Of which Network Rollout

     4,864        10,437        16,156        25,050        5,747        12,875        20,782        29,951   

Support Solutions

     2,282        4,656        7,230        10,642        3,029        6,508        9,823        13,451   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     52,966        107,736        163,254        226,921        50,974        106,293        160,843        227,779   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Year to date,    2011     2012  

year over year change, percent

   Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec     Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec  

Networks

     35     33     30     17     -18     -17     -17     -11

Global Services

     -4     -4     -1     5     18     23     21     16

Of which Professional Services

     -5     -7     -3     1     18     22     18     14

Of which Managed Services

     1     -8     -5     -1     16     26     24     20

Of which Network Rollout

     0     3     5     16     18     23     29     20

Support Solutions

     -1     -2     3     1     33     40     36     26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     17     16     16     12     -4     -1     -1     0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Ericsson Fourth Quarter Report 2012    28


Table of Contents

OPERATING INCOME BY SEGMENT BY QUARTER

 

    2011     2012  

Isolated quarters, SEK million

  Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

Networks

    5,744        4,599        4,277        2,675        1,649        1,255        1,341        2,812   

Global Services

    1,146        1,030        1,757        1,611        1,267        1,362        1,835        1,762   

Of which Professional Services

    1,486        1,661        2,023        2,498        1,908        2,142        2,293        2,768   

Of which Network Rollout

    -340        -631        -266        -887        -641        -780        -458        -1,006   

Support Solutions

    -338        -267        90        11        -28        420        480        278   

Unallocated 1)

    -228        -204        164        -233        -97        -43        6        -133   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal Segments excluding Sony Ericsson and ST-Ericsson

    6,324        5,158        6,288        4,064        2,791        2,994        3,662        4,719   

Sony Ericsson 2)

    71        -208        75        -1,137        7,691        347        -1        -11   

ST-Ericsson

    -564        -698        -702        -771        -1,395        -1,263        -565        -8,511   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal Sony Ericsson and ST-Ericsson

    -493        -906        -627        -1,908        6,296        -916        -566        -8,522   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    5,831        4,252        5,661        2,156        9,087        2,078        3,096        -3,803   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    2011     2012  

Year to date, SEK million

  Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec     Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec  

Networks

    5,744        10,343        14,620        17,295        1,649        2,904        4,245        7,057   

Global Services

    1,146        2,176        3,933        5,544        1,267        2,629        4,464        6,226   

Of which Professional Services

    1,486        3,147        5,170        7,668        1,908        4,050        6,343        9,111   

Of which Network Rollout

    -340        -971        -1,237        -2,124        -641        -1,421        -1,879        -2,885   

Support Solutions

    -338        -605        -515        -504        -28        392        872        1,150   

Unallocated 1)

    -228        -432        -268        -501        -97        -140        -134        -267   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal Segments excluding Sony Ericsson and ST-Ericsson

    6,324        11,482        17,770        21,834        2,791        5,785        9,447        14,166   

Sony Ericsson 2)

    71        -137        -62        -1,199        7,691        8,038        8,037        8,026   

ST-Ericsson

    -564        -1,262        -1,964        -2,735        -1,395        -2,658        -3,223        -11,734   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal Sony Ericsson and ST-Ericsson

    -493        -1,399        -2,026        -3,934        6,296        5,380        4,814        -3,708   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    5,831        10,083        15,744        17,900        9,087        11,165        14,261        10,458   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
OPERATING MARGIN BY SEGMENT BY QUARTER           
    2011     2012  

As percentage of net sales, isolated quarters

  Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

Networks

    17     14     13     8     6     5     5     8

Global Services

    7     5     9     6     6     6     8     6

Of which Professional Services

    12     12     14     14     13     13     14     15

Of which Network Rollout

    -7     -11     -5     -10     -11     -11     -6     -11

Support Solutions

    -15     -11     3     0     -1     12     14     8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal excluding Sony Ericsson and ST-Ericsson

    12     9     11     6     5     5     7     7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    2011     2012  

As percentage of net sales, Year to date

  Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec     Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec  

Networks

    17     16     15     13     6     5     5     6

Global Services

    7     6     7     7     6     6     6     6

Of which Professional Services

    12     12     13     13     13     13     13     14

Of which Network Rollout

    -7     -9     -8     -8     -11     -11     -9     -10

Support Solutions

    -15     -13     -7     -5     -1     6     9     9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal excluding Sony Ericsson and ST-Ericsson

    12     11     11     10     5     5     6     6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1) 

“Unallocated” consists mainly of costs for corporate staff, non-operational capital gains and losses

2) 

Includes gain on sale of Sony Ericsson SEK 7.7 b. in Q1 2012

 

Ericsson Fourth Quarter Report 2012    29


Table of Contents

NET SALES BY REGION BY QUARTER

 

    2011     2012  

Isolated quarters, SEK million

  Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

North America

    13,162        12,324        12,096        11,203        12,775        12,987        14,037        16,950   

Latin America

    4,015        4,927        6,012        7,028        4,822        5,243        5,424        6,517   

Northern Europe & Central Asia 1) 2)

    3,365        4,552        3,527        3,781        2,292        3,358        2,697        2,998   

Western & Central Europe 2)

    4,806        4,342        4,612        5,270        4,306        4,094        3,630        5,448   

Mediterranean 2)

    4,799        5,543        5,225        8,240        4,620        6,214        5,401        7,064   

Middle East

    3,070        3,546        3,650        5,195        3,157        3,701        3,637        5,061   

Sub Saharan Africa

    2,212        2,214        2,519        3,218        2,200        2,791        2,800        3,558   

India

    3,169        2,798        2,273        1,522        1,421        1,700        1,737        1,602   

China & North East Asia

    8,633        9,025        9,662        10,889        9,154        8,423        8,373        10,246   

South East Asia & Oceania

    3,108        3,033        3,720        4,009        3,374        3,674        3,505        4,515   

Other 1) 2)

    2,627        2,466        2,222        3,312        2,853        3,134        3,309        2,977   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    52,966        54,770        55,518        63,667        50,974        55,319        54,550        66,936   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

1)     Of which Sweden

    927        1,103        944        908        834        1,282        1,649        1,268   

2)     Of which EU

    10,020        10,317        10,195        13,428        9,502        11,201        10,604        12,923   
    2011     2012  

Sequential change, percent

  Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

North America

    -6     -6     -2     -7     14     2     8     21

Latin America

    -34     23     22     17     -31     9     3     20

Northern Europe & Central Asia 1) 2)

    -30     35     -23     7     -39     47     -20     11

Western & Central Europe 2)

    -19     -10     6     14     -18     -5     -11     50

Mediterranean 2)

    -31     16     -6     58     -44     35     -13     31

Middle East

    -34     16     3     42     -39     17     -2     39

Sub Saharan Africa

    9     0     14     28     -32     27     0     27

India

    11     -12     -19     -33     -7     20     2     -8

China & North East Asia

    -9     5     7     13     -16     -8     -1     22

South East Asia & Oceania

    -21     -2     23     8     -16     9     -5     29

Other 1) 2)

    25     -6     -10     49     -14     10     6     -10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    -16     3     1     15     -20     9     -1     23
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

1)     Of which Sweden

    -21     19     -14     -4     -8     54     29     -23

2)     Of which EU

    -20     3     -1     32     -29     18     -5     22
    2011     2012  

Year-over-year change, percent

  Q1     Q2     Q3     Q4     Q1     Q2     Q3     Q4  

North America

    39     -6     -6     -20     -3     5     16     51

Latin America

    1     17     64     16     20     6     -10     -7

Northern Europe & Central Asia 1) 2)

    46     70     49     -22     -32     -26     -24     -21

Western & Central Europe 2)

    -8     -2     7     -11     -10     -6     -21     3

Mediterranean 2)

    -5     -2     4     19     -4     12     3     -14

Middle East

    -22     -7     34     12     3     4     0     -3

Sub Saharan Africa

    -9     -25     40     59     -1     26     11     11

India

    38     107     7     -46     -55     -39     -24     5

China & North East Asia

    74     96     39     15     6     -7     -13     -6

South East Asia & Oceania

    -12     -17     -3     2     9     21     -6     13

Other 1) 2)

    37     49     19     57     9     27     49     -10
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    17     14     17     1     -4     1     -2     5
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

1)     Of which Sweden

    -11     11     -8     -22     -10     16     75     40

2)     Of which EU

    -9     -1     5     7     -5     9     4     -4

 

Ericsson Fourth Quarter Report 2012    30


Table of Contents

NET SALES BY REGION BY QUARTER (continued)

 

     2011     2012  

Year to date, SEK million

   Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec     Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec  

North America

     13,162        25,486        37,582        48,785        12,775        25,762        39,799        56,749   

Latin America

     4,015        8,942        14,954        21,982        4,822        10,065        15,489        22,006   

Northern Europe & Central Asia 1) 2)

     3,365        7,917        11,444        15,225        2,292        5,650        8,347        11,345   

Western & Central Europe 2)

     4,806        9,148        13,760        19,030        4,306        8,400        12,030        17,478   

Mediterranean 2)

     4,799        10,342        15,567        23,807        4,620        10,834        16,235        23,299   

Middle East

     3,070        6,616        10,266        15,461        3,157        6,858        10,495        15,556   

Sub Saharan Africa

     2,212        4,426        6,945        10,163        2,200        4,991        7,791        11,349   

India

     3,169        5,967        8,240        9,762        1,421        3,121        4,858        6,460   

China & North East Asia

     8,633        17,658        27,320        38,209        9,154        17,577        25,950        36,196   

South East Asia & Oceania

     3,108        6,141        9,861        13,870        3,374        7,048        10,553        15,068   

Other 1) 2)

     2,627        5,093        7,315        10,627        2,853        5,987        9,296        12,273   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     52,966        107,736        163,254        226,921        50,974        106,293        160,843        227,779   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

1)        Of which Sweden

     927        2,030        2,974        3,882        834        2,116        3,765        5,033   

2)        Of which EU

     10,020        20,337        30,532        43,960        9,502        20,703        31,307        44,230   
Year to date,    2011     2012  

year-over-year change, percent

   Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec     Jan - Mar     Jan - Jun     Jan - Sep     Jan - Dec  

North America

     39     13     6     -1     -3     1     6     16

Latin America

     1     10     26     23     20     13     4     0

Northern Europe & Central Asia 1) 2)

     46     59     56     25     -32     -29     -27     -25

Western & Central Europe 2)

     -8     -5     -1     -4     -10     -8     -13     -8

Mediterranean 2)

     -5     -3     -1     5     -4     5     4     -2

Middle East

     -22     -15     -2     2     3     4     2     1

Sub Saharan Africa

     -9     -18     -3     11     -1     13     12     12

India

     38     63     42     13     -55     -48     -41     -34

China & North East Asia

     74     85     66     47     6     0     -5     -5

South East Asia & Oceania

     -12     -14     -10     -7     9     15     7     9

Other1) 2)

     37     43     35     41     9     18     27     15
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     17     16     16     12     -4     -1     -1     0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

1)        Of which Sweden

     -11     -1     -3     -8     -10     4     27     30

2)        Of which EU

     -9     -5     -2     1     -5     2     3     1
TOP 5 COUNTRIES IN SALES         
     Q4     Jan - Dec  

Country

   2011     2012     2011     2012  

UNITED STATES

     17     26     21     25

JAPAN

     5     7     6     8

CHINA

     10     6     8     6

ITALY

     5     4     4     4

BRAZIL

     4     3     3     3

 

Ericsson Fourth Quarter Report 2012    31


Table of Contents

NET SALES BY REGION BY SEGMENT

Since the segment ST-Ericsson is reported in accordance with the equity method, their sales are not included below. Net sales related to these segments are disclosed under SEGMENT RESULTS. Net sales related to other segments are set out below.

Revenue from Telcordia is reported 50/50 between Segments Global Services and Support Solutions. In the regional dimension, all of Telcordia sales is reported in Support Solutions, except for North America where it is split 50/50. Multimedia brokering (IPX) was previously reported in each region in Segment Support Solutions. From Q1 2012 it is part of region “Other” in Segment Support Solutions.

 

     Q4 2012, SEK million     Jan - Dec 2012, SEK million  
     Net-
works
    Global
Services
    Support
Solutions
    Total     Net-
works
    Global
Services
    Support
Solutions
    Total  

North America

     9,351        6,794        805        16,950        30,508        23,508        2,733        56,749   

Latin America

     2,881        3,237        399        6,517        9,762        10,601        1,643        22,006   

Northern Europe & Central Asia

     1,561        1,230        207        2,998        6,326        4,543        476        11,345   

Western & Central Europe

     2,342        2,929        177        5,448        6,156        10,614        708        17,478   

Mediterranean

     2,752        4,057        255        7,064        9,508        13,012        779        23,299   

Middle East

     2,465        2,066        530        5,061        6,752        7,336        1,468        15,556   

Sub Saharan Africa

     2,038        1,236        284        3,558        6,431        3,907        1,011        11,349   

India

     895        580        127        1,602        3,542        2,457        461        6,460   

China & North East Asia

     6,477        3,642        127        10,246        22,412        13,268        516        36,196   

South East Asia & Oceania

     2,540        1,881        94        4,515        7,992        6,569        507        15,068   

Other

     1,964        390        623        2,977        7,896        1,228        3,149        12,273   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     35,266        28,042        3,628        66,936        117,285        97,043        13,451        227,779   

Share of Total

     53     42     5     100     51     43     6     100
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Q4 2012  

Sequential change, percent

   Net-
works
    Global
Services
    Support
Solutions
    Total  

North America

     24     16     33     21

Latin America

     14     39     -29     20

Northern Europe & Central Asia

     3     13     111     11

Western & Central Europe

     151     16     6     50

Mediterranean

     38     26     38     31

Middle East

     75     13     31     39

Sub Saharan Africa

     29     32     1     27

India

     -15     -5     65     -8

China & North East Asia

     44     -3     -2     22

South East Asia & Oceania

     45     16     -32     29

Other

     -8     -24     -6     -10
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     31     15     9     23
  

 

 

   

 

 

   

 

 

   

 

 

 
     Q4 2012  

Year over year change, percent

   Net-
works
    Global
Services
    Support
Solutions
    Total  

North America

     86     19     76     51

Latin America

     -12     -6     25     -7

Northern Europe & Central Asia

     -3     -40     59     -21

Western & Central Europe

     10     3     -39     3

Mediterranean

     -26     2     -52     -14

Middle East

     3     -11     8     -3

Sub Saharan Africa

     6     16     22     11

India

     38     -28     98     5

China & North East Asia

     -12     10     -45     -6

South East Asia & Oceania

     16     17     -56     13

Other

     -35     -369     39     -10
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     6     4     6     5
  

 

 

   

 

 

   

 

 

   

 

 

 
     Jan - Dec 2012  

Year over year change, percent

   Net-
works
    Global
Services
    Support
Solutions
    Total  

North America

     6     27     103     16

Latin America

     -15     12     65     0

Northern Europe & Central Asia

     -35     -10     -6     -25

Western & Central Europe

     -21     3     -27     -8

Mediterranean

     -11     10     -42     -2

Middle East

     -9     7     24     1

Sub Saharan Africa

     10     14     16     12

India

     -42     -22     -14     -34

China & North East Asia

     -19     34     0     -5

South East Asia & Oceania

     6     18     -29     9

Other

     -14     -844     90     15
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     -11     16     26     0
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Ericsson Fourth Quarter Report 2012    32


Table of Contents

PROVISIONS

 

     2011      2012  

Isolated quarters, SEK million

   Q1      Q2      Q3      Q4      Q1      Q2      Q3      Q4  

Opening balance

     9,744         9,529         9,335         8,065         6,265         5,930         5,318         5,243   

Additions

     1,304         2,032         633         838         1,003         616         810         4,582   

Utilization/Cash out

     -1,091         -1,908         -1,464         -1,524         -980         -850         -664         -981   

Of which restructuring

     -762         -1,220         -747         -494         -401         -342         -160         -267   

Reversal of excess amounts

     -88         -451         -556         -824         -370         -453         -95         -155   

Reclassification, translation difference and other

     -340         133         117         -290         12         75         -126         -51   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Closing balance

     9,529         9,335         8,065         6,265         5,930         5,318         5,243         8,638   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2011      2012  

Year to date, SEK million

   Jan - Mar      Jan - Jun      Jan - Sep      Jan - Dec      Jan - Mar      Jan - Jun      Jan - Sep      Jan - Dec  

Opening balance

     9,744         9,744         9,744         9,744         6,265         6,265         6,265         6,265   

Additions

     1,304         3,336         3,969         4,807         1,003         1,619         2,429         7,011   

Utilization/Cash out

     -1,091         -2,999         -4,463         -5,987         -980         -1,830         -2,494         -3,475   

Of which restructuring

     -762         -1,982         -2,729         -3,223         -401         -743         -903         -1,170   

Reversal of excess amounts

     -88         -539         -1,095         -1,919         -370         -823         -918         -1,073   

Reclassification, translation difference and other

     -340         -207         -90         -380         12         87         -39         -90   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Closing balance

     9,529         9,335         8,065         6,265         5,930         5,318         5,243         8,638   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
NUMBER OF EMPLOYEES                        
     2011      2012  

End of period

   Mar 31      Jun 30      Sep 30      Dec 31      Mar 31      Jun 30      Sep 30      Dec 31  

North America

     13,531         14,553         14,782         14,801         16,281         15,872         15,486         15,501   

Latin America

     7,394         9,875         10,315         11,191         11,538         11,176         10,920         11,219   

Northern Europe & Central Asia 1)

     21,339         21,451         21,083         20,987         21,341         21,457         21,334         21,211   

Western & Central Europe

     10,629         10,518         10,601         10,806         10,900         10,837         11,897         11,257   

Mediterranean

     10,907         11,069         11,521         11,645         11,858         11,986         12,321         12,205   

Middle East

     4,057         4,160         4,304         4,336         4,361         4,231         4,065         3,992   

Sub Saharan Africa

     1,644         1,637         1,891         2,283         2,317         2,277         1,669         2,014   

India

     7,448         8,563         9,672         11,535         12,567         12,644         13,269         14,303   

China & North East Asia

     10,111         11,601         12,313         12,567         13,016         13,233         13,853         14,157   

South East Asia & Oceania

     4,486         4,502         4,408         4,374         4,372         4,382         4,400         4,396   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     91,546         97,929         100,890         104,525         108,551         108,095         109,214         110,255   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

1)        Of which Sweden

     17,771         17,930         17,588         17,500         17,767         17,890         17,768         17,712   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

INFORMATION ON INVESTMENTS IN ASSETS SUBJECT TO DEPRECIATION, AMORTIZATION, IMPAIRMENT AND WRITE-DOWNS

 

     2011      2012  

Isolated quarters, SEK million

   Q1      Q2      Q3      Q4      Q1      Q2      Q3      Q4  

Additions

                       

Property, plant and equipment

     980         1,196         1,294         1,524         1,648         994         1,461         1,326   

Capitalized development expenses

     269         429         257         560         251         525         435         430   

IPR, brands and other intangible assets

     359         29         488         97         5,570         992         341         409   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,608         1,654         2,039         2,181         7,469         2,511         2,237         2,165   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Depreciation, amortization and impairment losses

                       

Property, plant and equipment

     841         821         827         1,057         914         982         1,035         1,081   

Capitalized development expenses

     232         240         263         267         245         259         265         555   

IPR, brands and other intangible assets, etc.

     1,136         1,111         1,137         1,104         1,156         1,160         1,094         1,143   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     2,209         2,172         2,227         2,428         2,315         2,401         2,394         2,779   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Ericsson Fourth Quarter Report 2012    33


Table of Contents

OTHER INFORMATION

 

     Oct - Dec      Jan - Dec  
     2011      2012      2011     2012  

Number of shares and earnings per share

          

Number of shares, end of period (million)

     3,273         3,305         3,273        3,305   

Of which class A-shares (million)

     262         262         262        262   

Of which class B-shares (million)

     3,011         3,043         3,011        3,043   

Number of treasury shares, end of period (million)

     63         85         63        85   

Number of shares outstanding, basic, end of period (million)

     3,211         3,220         3,211        3,220   

Numbers of shares outstanding, diluted, end of period (million)

     3,238         3,251         3,238        3,251   

Average number of treasury shares (million)

     64         86         68        76   

Average number of shares outstanding, basic (million)

     3,209         3,219         3,206        3,216   

Average number of shares outstanding, diluted (million) 1)

     3,237         3,251         3,233        3,247   

Earnings per share, basic (SEK)

     0.36         -2.01         3.80        1.80   

Earnings per share, diluted (SEK) 1)

     0.36         -1.99         3.77        1.78   

1)        Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share

           

Ratios

          

Days sales outstanding

     —           —           91        86   

Inventory turnover days

     74         61         78        73   

Payable days

     52         45         62        57   

Equity ratio (%)

     —           —           51.8     50.4

Capital turnover (times)

     1.4         1.5         1.2        1.3   

Payment readiness, end of period

     —           —           86,570        84,951   

Payment readiness, as percentage of sales

     —           —           38.1     37.3
  

 

 

    

 

 

    

 

 

   

 

 

 

Exchange rates used in the consolidation

          

SEK/EUR - average rate

     —           —           9.02        8.70   

        - closing rate

     —           —           8.92        8.58   

SEK/USD - average rate

     —           —           6.48        6.73   

        - closing rate

     —           —           6.90        6.51   
  

 

 

    

 

 

    

 

 

   

 

 

 

Other

          

Regional inventory, end of period,

     19,921         19,353         19,921        19,353   

Export sales from Sweden

     25,060         30,201         116,507        106,997   
  

 

 

    

 

 

    

 

 

   

 

 

 

 

Ericsson Fourth Quarter Report 2012    34


Table of Contents

RESTRUCTURING CHARGES BY FUNCTION

 

     2011      2012  

Isolated quarters, SEK million

   Q1      Q2      Q3      Q4      Q1      Q2      Q3      Q4  

Cost of sales

     -185         -257         -283         -506         -496         -389         -455         -885   

Research and development expenses

     -180         -208         -115         -58         -19         -107         -33         -693   

Selling and administrative expenses

     -8         -1,236         22         -170         -54         -98         -82         -136   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson

     -373         -1,701         -376         -734         -569         -594         -570         -1,714   

Share in Sony Ericsson charges

     —           —           —           -419         —           —           —           —     

Share in ST-Ericsson charges

     -15         -77         -17         -31         -30         -190         -46         -46   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Sony Ericsson and ST-Ericsson

     -15         -77         -17         -450         -30         -190         -46         -46   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     -388         -1,778         -393         -1,184         -599         -784         -616         -1,760   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2011      2012  

Year to date, SEK million

   Jan - Mar      Jan - Jun      Jan - Sep      Jan - Dec      Jan - Mar      Jan - Jun      Jan - Sep      Jan - Dec  

Cost of sales

     -185         -442         -725         -1,231         -496         -885         -1,340         -2,225   

Research and development expenses

     -180         -388         -503         -561         -19         -126         -159         -852   

Selling and administrative expenses

     -8         -1,244         -1,222         -1,392         -54         -152         -234         -370   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson

     -373         -2,074         -2,450         -3,184         -569         -1,163         -1,733         -3,447   

Share in Sony Ericsson charges

     —           —           —           -419         —           —           —           —     

Share in ST-Ericsson charges

     -15         -92         -109         -140         -30         -220         -266         -312   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Sony Ericsson and ST-Ericsson

     -15         -92         -109         -559         -30         -220         -266         -312   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     -388         -2,166         -2,559         -3,743         -599         -1,383         -1,999         -3,759   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
RESTRUCTURING CHARGES BY SEGMENT   
     2011      2012  

Isolated quarters, SEK million

   Q1      Q2      Q3      Q4      Q1      Q2      Q3      Q4  

Networks

     -205         -1,039         -121         -235         -87         -167         -94         -905   

Global Services

     -166         -487         -254         -456         -473         -415         -441         -601   

Of which Professional Services

     -145         -361         -225         -264         -358         -302         -305         -371   

Of which Network Rollout

     -21         -126         -29         -192         -115         -113         -136         -230   

Support Solutions

     -2         -119         -6         -16         -9         -12         -29         -196   

Unallocated

     —           -56         5         -27         —           —           -6         -12   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson

     -373         -1,701         -376         -734         -569         -594         -570         -1,714   

Sony Ericsson

     —           —           —           -419         —           —           —           —     

ST-Ericsson

     -15         -77         -17         -31         -30         -190         -46         -46   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Sony Ericsson and ST-Ericsson

     -15         -77         -17         -450         -30         -190         -46         -46   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     -388         -1,778         -393         -1,184         -599         -784         -616         -1,760   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2011      2012  

Year to date, SEK million

   Jan - Mar      Jan - Jun      Jan - Sep      Jan - Dec      Jan - Mar      Jan - Jun      Jan - Sep      Jan - Dec  

Networks

     -205         -1,244         -1,365         -1,600         -87         -254         -348         -1,253   

Global Services

     -166         -653         -907         -1,363         -473         -888         -1,329         -1,930   

Of which Professional Services

     -145         -506         -731         -995         -358         -660         -965         -1,336   

Of which Network Rollout

     -21         -147         -176         -368         -115         -228         -364         -594   

Support Solutions

     -2         -121         -127         -143         -9         -21         -50         -246   

Unallocated

     —           -56         -51         -78         —           —           -6         -18   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson

     -373         -2,074         -2,450         -3,184         -569         -1,163         -1,733         -3,447   

Sony Ericsson

     —           —           —           -419         —           —           —           —     

ST-Ericsson

     -15         -92         -109         -140         -30         -220         -266         -312   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Sony Ericsson and ST-Ericsson

     -15         -92         -109         -559         -30         -220         -266         -312   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     -388         -2,166         -2,559         -3,743         -599         -1,383         -1,999         -3,759   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Ericsson Fourth Quarter Report 2012    35