FOURTH QUARTER REPORT

What did the positive impact of the sales on copyright Telefon AB LM Ericsson 2009?
What year did Sony Ericsson's sales growth?
What was the name of the amount of money Sony Ericsson made in 2008?

Transcription

3 FOURTH QUARTER REPORT 2008 This presentation contains forward looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our earnings reports and our most recent annual report for a better understanding of these risks and uncertainties. Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

5 Telecom in billion mobile subscriptions A significant milestone Mobile broadband breakthrough New set of smart phones and players HSPA PC modules new standard Accelerated focus on all-ip convergence Enables new services and reduces cost Financial crisis in focus Long-term positive fundamentals remains The mobile phone is the single most transformational tool for development in Africa J. Sachs, special advisor to UN Secretary General Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

6 Ericsson in 2008 Sales of SEK (187.8) b, up 11% Operating income SEK 23.5 (23.5) b, excl Sony Ericsson Cash flow of SEK 24.0 (19.2) b, cash conversion 92% (66%) Net cash position SEK 34.7 (24.3) b Restructuring charges of SEK 6.7 b Board to propose dividend of SEK 1.85 per share Sony Ericsson significantly affected by economic slowdown Numbers exclude restructuring charges and Sony Ericsson Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

7 The global economic slowdown Financially strong operators, loaded networks, growing traffic Effects on the mobile network market should not be that significant So far hardly any effects on mobile network investments Unreasonable that this will continue throughout 2009 Handset market clearly affected Replacements affected but not usage This slide contains forward looking statements Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

8 Cost reductions 2008 completed Initial target of SEK 4.0 b, savings and charges Actual savings of SEK 6.5 b and charges of SEK 6.7 b Charges in Q4 of SEK 2.3 b Full savings effect from year-end 2008 Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

9 Continued cost reductions in 2009 Further restructuring charges of SEK 6-7 b Targeting savings of SEK 10 b by second half /50 split of cost of sales and operating expenses Technology synergies and IP transformation Fewer software platforms and increased hardware reuse Strategy and capabilities to remain intact Consolidation of R&D sites, layoffs and fewer consultants Some 5,000 employees globally across all functions Of which some 1,000 employees in Sweden Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

10 Q4 in summary Strong fourth quarter sales SEK 67.0 (54.5) b Positive exchange rate effect Strong ending of the year in all regions Operating income SEK 9.2 (7.6) b Contribution from Sony Ericsson SEK -0.6 (2.3) b Capital gain of SEK 0.8 b from divestment of Symbian shares Cash flow SEK 7.0 (12.0) b All numbers exclude restructing charges Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

11 Regional Q4 comments Western Europe sales 5% YoY, -2% FY SEK m Growing demand for mobile broadband Services close to 50% of sales focus on managed services Strong performance in Germany, Denmark and Italy Positive currency impact Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

12 Regional Q4 comments Central Europe, Middle East, Africa sales 24% YoY, 9% FY SEK m High business activities has translated into sales growth Strong performance in Nigeria, Saudi Arabia, South Africa, Russia 2G as well as 3G rollouts and expansions Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

13 Regional Q4 comments Asia Pacific sales 49% YoY, 16% FY SEK m India Ericsson s largest and fastest growing market Japan and Indonesia strong, fifth and sixth largest markets 3G licenses issued in China rollout to start soon Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

14 Regional Q4 comments Latin America sales 16% YoY, 25% FY SEK m A good year with 3G as well as 2G expansions Mexico and Brazil strong development no financial effects yet 3G now established across region Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

15 Regional Q4 comments North America sales 13% YoY, 34% FY SEK m Consumer breakthrough for mobile broadband Continued HSPA rollouts and expansions Positive currency effects Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

17 Q4 financial highlights 1) Fourth quarter Third quarter Full year SEK b ) 2007 % ) % ) 2007 % Net sales % % % Gross margin 35.2% 36.1% % % 39.3% - Operating income % % % Operating margin 13.7% 14.0% % % 16.3% - Operating margin ex Sony Ericsson 14.6% 9.8% % % 12.5% - Net sales up 11% year-over-year, limited currency impact Slight gross margin decline due to high completion of large buildouts Opex cost reductions offset by negative currency effects YoY 1) Excluding restructuring charges of SEK 3.0 b. Q4 2008, SEK 2.0 b. Q3, SEK 1.8 b. Q2 and SEK 0.8 b. Q1 Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

18 Q4 financial highlights Fourth quarter Third quarter Full year SEK b % 2008 % % Income after financial items 9.5 1) % 6.2 1) 54% ) % Net income 3) 3.9 2) % 2.8 2) 37% ) % EPS, SEK 3) ) % ) 36% ) % Cash flow from operating activities Continued positive cash flow development, SEK 24.0 (19.2) b YTD Cash conversion of 92% (66%) YTD Net income SEK 3.9 b - Restructuring charges of SEK 6.7 b - Negative contribution from Sony Ericsson SEK -1.3 (2.3) b 1) Excluding restructuring charges of SEK 3.0 b. Q4 2008, SEK 2.0 b. Q3, SEK 1.8 b. Q2 and SEK 0.8 b. Q1 2) Including restructuring charges 3) Attributable to stockholders of the Parent Company, excluding minority interest Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

21 Networks Fourth quarter Third quarter Full year SEK b ) 2007 % ) % ) 2007 % Net sales % % % Of which network rollout % % % EBITDA margin 17% 15% - 15% - 16% 19% - Operating margin 14% 10% - 11% - 11% 13% - Strong ending of the year continued market share gains Record deliveries for GSM 3G licenses in China and India Encouraging firsts in IP broadband portfolio Clear leadership in softswitch and blade cluster 1) Excluding effects from restructuring. Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

22 Multimedia Fourth quarter Third quarter Full year SEK b ) 2007 % ) % ) 4) 2007 % Net sales % % % EBITDA margin 21% -3% - 12% 2) - 11% 4% - Operating margin 12% 3) -9% - 3% - 1% -1% - 21% growth year-over-year for comparable units in Q4 Economic slowdown impacting mobile platforms Good growth in Tandberg Television and revenue management Capital gain of SEK 0.8 b from sale of Symbian shares 1) Excluding effects from restructuring. 2)Affected by SEK 0.2 b due to changed allocation of capitalized development expenses in Q2 3) Including effects of divestment of shares in Symbian of SEK 0.8 b. 4) First quarter 2008 is restated for the transfer of the IPX operation from Professional Services to Multimedia Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

23 Professional Services Fourth quarter Third quarter Full year SEK b ) 2007 % ) % ) 2) 2007 % Net sales % % % Of which managed services % % % EBITDA margin 19% 16 % - 19 % - 17 % 16 % - Operating margin 18 % 15 % - 16 % - 16 % 15 % - Strong growth across portfolio 11 new managed services contracts world leading position 250 m subscribers in managed operations - 60% in high-growth markets Healthy margins with positive effects from cost efficiency activities Leveraging scale in managed operations 1) Excluding effects from restructuring. 2) First quarter 2008 is restated for the transfer of the IPX operation from Professional Services to Multimedia. Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

24 Sony Ericsson Q4 Global economic slowdown leads to contracting consumer demand Sales of EUR 2,914 (3,771) m, down 23% year-over-year Income before taxes of EUR -133 (501) m Announced EUR 300 m opex reductions increased to EUR 480 m Successful rollout of Xperia, Cybershot C905 phones and PlayNow W595 W902 W302 G705 C905 F305 S302 X1 W705 Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

25 Management focus for 2009 Stay close to customers Prepare cost for tougher times Focus on margins and cash generation Tight operational governance Take advantage of opportunities to extend leadership Copyright Telefon AB LM Ericsson All rights reserved FOURTH QUARTER REPORT

27 Copyright Copyright Telefon Telefon AB AB LM LM Ericsson Ericsson All All rights rights reserved reserved FOURTH THIRD QUARTER REPORT