Slide title 70 pt President and CEO CAPITALS Slide subtitle minimum 30 pt

Transcription

1 President and CEO

2 Agenda Execution Ericsson beyond 2015 Strategic priorities Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 2

3 Performance YTD LONG TERM AMBITION PERFORMANCE YTD EXECUTIVE STOCK PERFORMANCE PLAN Grow faster than the market 203-2% % 161-1% 4-10% 2-8% Operating income growth - Best in class margins - Growth in JV earnings 23.7* +28% % % 5-15% 5-15% Strong cash conversion 112% 40% 52% >70% >70% Growing faster than the market but profitability not satisfactory Targets revised yearly and approved by Annual General Meeting. Targets for 2013 ( ) will be communicated in the AGM invitation. Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 3 *2010 excluding restructuring charges.

4 Ericsson 2012 OUR MARKET OUR CUSTOMERS OPERATORS TV & MEDIA PUBLIC SAFETY UTILITIES HANDSET & DEVICES OUR BUSINESSES MOBILE NETWORKS IP NETWORKS GLOBAL SERVICES SUPPORT SOLUTIONS PATENTS & LICENSING PLATFORMS OUR STRUCTURE NETWORKS GLOBAL SERVICES SUPPORT SOLUTIONS PATENTS & LICENSING ST-ERICSSON OUR ASSETS GLOBAL SCALE AND SKILL TECHNOLOGY LEADERSHIP SERVICES LEADERSHIP Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 4

5 Competition overview OUR BUSINESSES MOBILE NETWORKS IP NETWORKS GLOBAL SERVICES SUPPORT SOLUTIONS PATENTS & LICENSING PLATFORMS OUR POSITION & ADVANTAGE #1 #4-5 #1 #1-3 #1-2 #3-5 Technology, Performance & R&D scale Bring mobility expertise to IP One-to-many, Tools & Capabilities R&D scale & complete portfolio (Activation, Ops, Billing) #1 2G/3G/4G Patent Portfolio Modem & mobility expertise COMPETITORS Telecom Infrastructure vendors Telecom Infrastructure vendors Networking equipment manufacturers Telecom Infrastructure vendors Global IT & Consulting players Local companies Telecom Infrastructure vendors Global IT & Consulting players Local companies Telecom Infrastructure vendors Chipset vendors Chipset vendors Leading position in 4 out of 6 areas Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 5

6 St-ericsson Strategic position to enable device ecosystem Parent companies continously reviewing strategy and business case Still challenging situation despite improved performance 3Q12 sales up 4% QoQ ST-Ericsson is focusing on successful execution in transforming the company to lower its break-even point Reduced losses since 1Q 2012 Ericsson s share amount to SEK -3.2 (-2.0) b in 2012YTD Sales USD m ST-Ericsson sales Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Ericsson s share in ST-Ericsson earnings SEK b SEK m. March June Sep Investment in ST-Ericsson 1, Loans to ST-Ericsson 3,241 4,311 4,538 Total 5,223 5,078 4, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 6 Numbers include restructuring charges, numbers exclude restructuring charges

7 Growth levers progress Portfolio momentum + Market share + M&A and partnering Objective Mobile broadband Managed services OSS/BSS Build presence in large markets Win share in technology shift Increase share of operator capex/opex Consolidate market position Fill portfolio gaps New growth areas Progress Mobile broadband Driving broad portfolio (e.g., RAN, IP router, packet core, microwave and services) Managed services Growth 24% YTD Contracts 161 (72) since 2010 Expansion (e.g., TV play out) OSS/BSS Tiered pricing: 83 contracts in data charging, of which 22 YTD m-commerce Market share gains (2011) Networks (32% to 38%) Services (11% to 12%) Mega cities (>40%) Capturing shift to 4G/LTE 100% conversion of CDMA footprint to LTE LTE market share >50% Consolidate market position LG-Nortel, Nortel Patents, Telcordia Fill portfolio gaps BelAir, Pride, InCode, Optimi, Concept Wave New growth areas Technicolor, Telenor Connexion Platform Divestments Sony Ericsson, GPON, IPX Strengthened portfolio and increased footprint in past 2 years Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 7

8 Go-to-market changes REGION Mobile Broaband Comm. Services FBB & Convergence Managed Services OSS/ BSS TV & Media Competence domains REGIONS INDUSTRY VERTICALS IPR Customer Units TV & Media Public Safety Utilities * * 2011 Changes in regions One Common core Rationale Solutions led go-to-market Optimize resources (existing and new areas) Best practices and re-use Evolving towards solution led company Achievements 23 deals in 2011 Continued stepwise approach Establish first case Build best practice Replicate and scale Expanding into new customer segment Growth in licensing revenues, with smartphone uptake a key driver Executing strategy (based on FRAND) communicated in 2011 New licensing negotiations and business models on-going 24 new licensing contracts signed in 2012 Further monetizing our R&D investments Evolving to capture opportunities in the Networked Society Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 8 Note: * Include one-off patent sale.

9 operational changes EXECUTIVE LEADERSHIP TEAM OPERATIONAL UNITS PROCESS & EFFICIENCY Females 29% 8% Non-Swedes 29% 0% External 21% 8% BU Networks BU Global Services BU Support Solutions Regions IPR & Licensing SEK b. 32 R&D 27 SG&A ST-Ericsson YTD New executive team in place New roles New external expertise Diverse team International team 4 non-swedes 3 based in North America 1 based in China New team in place New units focusing on growth IPR & Licensing: direct report to CEO BU Multimedia to Support Solutions TV Play-out: separate unit within Global services Units closed or merged SonyEricsson divestment BU Networks & BU CDMA Systems Sustainability direct reporting to CEO New units focused on growth Efficiency in R&D & Supply Component based architecture Lean & Agile Service delivery industrialization Global service centers Tools and automation SG&A reductions Commercial mngt & pricing Common functions Continuous improvements Opex down 4% YTD Continued improvements to optimize and strengthen the business Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 9

10 Agenda Execution Ericsson beyond 2015 Strategic priorities Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 10

11 Market trends Mass market adoption of smartphones Life changes with mobility and cloud Subscriber base expands Smartphone uptake accelerates Innovation, collaboration and new business models unlock value of networks Growth and efficiency driving transformation and outsourcing of OSS/BSS and networks Focus on high performance mobile broadband networks Data traffic grows Mobile broadband adoption increases Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 11 This slide contains forward-looking statements. Actual result may be materially different.

12 Networked society Driving forces MOBILITY BROADBAND CLOUD Fundamentals for longer-term positive development for the industry remain solid Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 12 This slide contains forward-looking statements. Actual result may be materially different.

13 Networked society implications Development Inclusion Transparency SOCIETY Convenience Empowerment Engagement PEOPLE Efficiency Experience Innovation BUSINESS Technology improving quality of life, productivity and sustainability Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 13 This slide contains forward-looking statements. Actual result may be materially different.

14 operator positioning Offerings Operations Service enabler Service creator Systems Network developer Networks Performance & QoS Price Enablers (e.g., M2M, APIs) Partnerships Offering (content, application, services) Differentiation: assets, capabilities and value chain position Operators evolving to different positions in the networked society Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 14 This slide contains forward-looking statements. Actual result may be materially different.

15 Networked society opportunities Innovation & revenue growth OSS/BSS & process transformation Network evolution Network developer Service enabler Service creator Ericsson s portfolio meeting customers evolving strategies Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 15 This slide contains forward-looking statements. Actual result may be materially different.

16 Expansion adjacencies New Telecom operators IP Consulting & Systems Integration M2M Cloud services PORTFOLIO Existing Telecom operators Networks Global Services Support Solutions Handset manufacturers IPR Platforms (ST-Ericsson) IPR & Platforms Consumer electronics Other connected devices Industry verticals TV & Media Utilities Public Satefy Existing CUSTOMERS New Majority of business with existing customers innovating to capture adjacencies Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 16 This slide contains forward-looking statements. Actual result may be materially different.

17 Business evolution OTHER (e.g., IPR, M2M, Consulting) Leading Mobile Infrastructure Vendor OSS/BSS (SW & Services) Leading ICT Solution Provider in Telecoms MANAGED SERVICES NETWORK INFRASTRUCTURE Evolving from strong position in network infrastructure Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 17 This slide contains forward-looking statements. Actual result may be materially different.

18 Leveraging competitive assets SERVICES LEADERSHIP Centralization Industrialization Automation Leading Mobile Infrastructure Vendor GLOBAL SCALE & SKILL Installed base Local presence One Ericsson Leading ICT Solution Provider in Telecoms TECHNOLOGY LEADERSHIP Superior network performance 1 st to market where it matters Patent portfolio Competitors in Telecom (Many) Competitors in ICT (New) Investment in R&D and capabilities a key source of competitive advantage Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 18 This slide contains forward-looking statements. Actual result may be materially different.

19 Agenda Execution Ericsson Beyond 2015 Strategic Priorities Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 19

20 [USD b.] Market outlook Support Solutions CAGR % 5-7% Telecom Services Networks Equipment Other Key segments Other Key segments Other Key segments Total Networks Equipment 3-5% (higher in key segments) Source: Ericsson Growth unevenly distributed over the years 2011 was a strong year Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 20 This slide contains forward-looking statements. Actual result may be materially different.

21 Growth going forward Portfolio momentum + Market share + M&A and partnering Objective Mobile broadband Managed services OSS/BSS Build presence in large markets Win share in technology shift Increase share of operator capex/opex Consolidate market position Fill portfolio gaps New growth areas Focus going forward Maintain & expand #1 position Mobile broadband Managed services OSS/BSS Establish a leading position IP Systems integration M2M, M-Commerce Selective approach on market share investments Key markets Deliver modernization projects better than business case Monetize the footprint Focus on organic growth Selective acquisitions Fill gaps in areas of portfolio momentum New growth areas Growth weighting High Low Focus on profitable growth driven by portfolio momentum Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 21 This slide contains forward-looking statements. Actual result may be materially different.

22 Cost & efficiency Margin Expansion Increase share of IPR and SW sales in IP, Core and OSS/BSS Continue to industrialize services with centralization and automation Focus on commercial management Reduce costs in R&D, SG&A and Cost of Sales Full potential of go-to-market model Centralization, standardization and lean & agile Turnaround ST-Ericsson Capital Efficiency Process and efficiency and reduce cycle time Re-design order-to-cash process Continuous improvements in supply Execute plans to gradually improve terms & conditions Improved business mix Optimize capex and debt management Taking measures on what we can control Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 22 This slide contains forward-looking statements. Actual result may be materially different.

23 summary Executive Performance Stock Plan Fundamentals for longer-term development for the industry remain solid drivers for the networked society Net sales growth in SEK, organic 2-8% CAGR Operating income growth 5-15% CAGR Cash conversion Above 70%, annually Our long-term goal is to create value by becoming a leading ICT solutions provider in telecoms Our short-term goals is to improve value creation by focusing on profitable growth and leveraging footprint Proactive measures in execution to improve profitability and capital efficiency The Board of Directors will consider the impact of larger acquisitions, divestitures, the creation of joint ventures and any other significant capital event on the three targets on a case by case basis Telefonaktiebolaget LM Ericsson 2012 Ericsson Investor Day 2012 Page 23 This slide contains forward-looking statements. Actual result may be materially different.

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