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Ericsson fourth quarter and full year 2012 report

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STOCKHOLM, SWEDEN -- (Marketwire) -- 01/31/13 --


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%, primarilydue to normal higher year-end business activity

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

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

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

* Cash flow from operations increased to SEK 15.7 b. driven by reducedworking 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 CDMAequipment sales

* Operating margin, excluding JVs, was flat at 9.7% (9.6%). Excluding thegain 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 Ericssongain 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) pershare.


--------------------------------------------------------------------------- Full Full Full Q4 Q4 YoY Q3 QoQ year year year SEK b. 2012 2011 Change 2012 Change 2012 2011 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 16% Services 28.0 27.0 4% 24.3 15% 97.0 83.9--------------------------------------------------------------------------- Of which Support 26% Solutions 3.6 3.4 6% 3.3 9% 13.5 10.6--------------------------------------------------------------------------- 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 2% JVs 4.8 4.1 17% 3.7 30% 22.2 21.7--------------------------------------------------------------------------- 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), -36% SEK(1)) -1.40 0.81 - 1.04 - 3.55 5.54--------------------------------------------------------------------------- Cash flow from 121% operations 15.7 5.5 187% 7.0 125% 22.0 10.0--------------------------------------------------------------------------- Cash conversion 227% 79% - 149% - 116% 40% ---------------------------------------------------------------------------- Net cash, end of -2% period 38.5 39.5 -2% 29.0 33% 38.5 39.5--------------------------------------------------------------------------- (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.---------------------------------------------------------------------------




Comments from Hans Vestberg, President and CEO

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

"During the year profitability was negatively impacted by operating lossesinST-Ericsson, the ongoing network modernization projects in Europe as wellas theunderlying business mix, with a higher share of coverage projects thancapacityprojects. With present visibility of customer demand, and with the currentglobal economic development, underlying business mix is expected tograduallyshift towards more capacity projects during the second half of 2013.

We ended the year with strong cash flow and a full-year cash conversionwellabove target. The Board of Directors proposes a dividend for 2012 of SEK2.75(2.50) per share, an increase by 10%.

Throughout 2012 North America was our strongest market, driven by continuedmobile broadband investments and demand for services. However, regions suchasSouth East Asia and Oceania and Sub-Saharan Africa gradually improvedduring theyear.

In the fourth quarter Networks sales recovered, despite continued expecteddecline in CDMA. Profitability in Networks improved sequentially due tohighersales and a higher share of software sales. Sales and profitability forGlobalServices and Support Solutions remained stable.

The quarter was negatively impacted by a non-cash chargerelated to ST-Ericsson. Following the announcement of STMicroelectronics'intention to exit as ashareholder, Ericsson will explore various strategicoptions for ST-Ericsson assets. We believe that the modem technology, whichwe originally contributed tothe JV, has a strategic value to the wireless industry.

The work to leverage our strength in the growth areas mobile broadband,managedservices and operations and business support systems (OSS/BSS) hascontinuedduring the year, with both selective acquisitions and divestments. Inaddition,we completed the divestment of Sony Ericsson and introduced a new strategyforSupport Solutions. Improving profitability, reducing costs and workingcapitalremain high on the agenda also for 2013. While the macroeconomic andpoliticaluncertainty continues in certain regions the long-term fundamentals in theindustry remain attractive and we are well positioned to continue tosupport ourcustomers in a transforming ICT market," concludes Vestberg.

You find the complete report with tables in the attached PDF or byfollowingthis link:www.ericsson.com/res/investors/docs/q-reports/2012/12month12-en.pdf

Editor's note

To read the complete report with tables, please go to:

www.ericsson.com/thecompany/investors/financial-reports/interim-reports/Q4-report-2012

Ericsson invites media, investors and analysts to a press conference at theEricsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET),January31, 2013. An analysts, investors and media conference call will begin at14.00(CET).

Live webcast of the press conference and conference call as well assupportingslides will be available at www.ericsson.com/press andwww.ericsson.com/investors

Video material will be published during the day onwww.ericsson.com/broadcast_room

Ericsson discloses the information provided herein pursuant to theSecuritiesMarkets Act. The information was submitted for publication at 07.30 CET, onJanuary 31, 2013.

Ericsson fourth quarter and full year 2012:

http://hugin.info/1061/R/1674425/545208.pdf

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ericsson via Thomson Reuters ONE

[HUG#1674425]



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