STOCKHOLM, July 12,
2024 /PRNewswire/ --
Strategic highlights – taking proactive action in a
challenging market environment
- Delivering on network technology leadership strategy;
externally recognized as 5G leader for 4th consecutive
year.
- Further progress to build out Global Network Platform for
network APIs; two additional partnerships in Q2.
- New 5G patent licensing agreement signed; on track to deliver
the SEK 12-13
b. IPR revenue target for 2024.
Financial highlights – strong gross margin expansion, partly
offset by targeted R&D investments
- Sales declined -7%* YoY, but market area North America grew by 14%*. Reported sales
were SEK 59.8 (64.4) b.
- Adjusted[1] gross income increased to SEK 26.3 (24.7) b.
driven by strong gross margin expansion. Reported gross income was
SEK 25.8 (24.1) b.
- Adjusted[1] gross margin was 43.9% (38.3%) supported
by higher IPR licensing revenue and cost actions. Networks adjusted
gross margin was 46.1% (39.3%). Reported gross margin was 43.1%
(37.4%).
- Adjusted[1] EBITA was SEK
4.1 (3.7) b. with a 6.8%
(5.7%) margin, with higher gross income partly offset by increased
R&D investments in Networks for technology leadership. EBITA
was SEK 2.4 (0.5) b.
- Net income (loss) was SEK -11.0
(-0.6) b., including a SEK -11.4 b. impairment impact. EPS diluted was
SEK -3.34 (-0.21).
- Free cash flow before M&A was SEK
7.6 (-5.0) b. benefiting from
a strong improvement in working capital.
Börje Ekholm, President and CEO, said: "In Q2, we maintained
our leading market position, returned to growth in North America, and delivered strong gross
margin expansion and free cash flow. We remained focused on matters
in our control, to optimize our business amid a challenging market
environment, with industry investment levels unsustainably
low.
Vonage remains foundational to build out a global platform
for network APIs. This is critical for the digitalization of
enterprises and society, and will drive future growth in the
telecoms industry. We recorded an impairment charge in Q2, as
market growth in the current business has slowed, and we must now
refocus on improving performance.
Our results highlight our competitiveness, and we will
continue to take proactive steps to position the business for
longer-term success. We expect market conditions to remain
challenging this year, as the pace of India investments slow, however our sales will
benefit during the second half from contract deliveries in
North America."
|
SEK b.
|
Q2
2024
|
Q2
2023
|
YoY
change
|
Q1
2024
|
QoQ
change
|
Jan-Jun
2024
|
Jan-Jun
2023
|
YoY
change
|
|
Net sales
|
59.848
|
64.444
|
-7 %
|
53.325
|
12 %
|
113.173
|
126.997
|
-11 %
|
|
Organic sales
growth[2]
|
-
|
-
|
-7 %
|
-
|
-
|
-
|
-
|
-10 %
|
|
Gross
margin[2]
|
43.1 %
|
37.4 %
|
-
|
42.5 %
|
-
|
42.8 %
|
38.0 %
|
-
|
|
EBIT
(loss)
|
-13.519
|
-0.312
|
-
|
4.100
|
-
|
-9.419
|
2.734
|
-
|
|
EBIT
margin[2]
|
-22.6 %
|
-0.5 %
|
-
|
7.7 %
|
-
|
-8.3 %
|
2.2 %
|
-
|
|
EBITA[2]
|
2.426
|
0.542
|
348 %
|
4.893
|
-50 %
|
7.319
|
4.390
|
67 %
|
|
EBITA
margin[2]
|
4.1 %
|
0.8 %
|
-
|
9.2 %
|
-
|
6.5 %
|
3.5 %
|
-
|
|
Net income
(loss)
|
-10.999
|
-0.597
|
-
|
2.613
|
-
|
-8.386
|
0.978
|
-
|
|
EPS diluted,
SEK
|
-3.34
|
-0.21
|
-
|
0.77
|
-
|
-2.57
|
0.25
|
-
|
|
Free cash flow before
M&A
|
7.595
|
-4.992
|
-
|
3.671
|
107 %
|
11.266
|
-13.008
|
-
|
|
Net cash, end of
period
|
13.133
|
1.892
|
-
|
10.807
|
22 %
|
13.133
|
1.892
|
-
|
|
Adjusted financial measures[2]
|
|
Adjusted gross
margin
|
43.9 %
|
38.3 %
|
-
|
42.7 %
|
-
|
43.4 %
|
39.0 %
|
-
|
|
Adjusted EBIT
(loss)
|
-11.891
|
2.821
|
-
|
4.305
|
-
|
-7.586
|
6.847
|
-
|
|
Adjusted EBIT
margin
|
-19.9 %
|
4.4 %
|
-
|
8.1 %
|
-
|
-6.7 %
|
5.4 %
|
-
|
|
Adjusted EBIT excluding
impairments[3]
|
3.229
|
2.821
|
14 %
|
4.305
|
-25 %
|
7.534
|
6.847
|
10 %
|
|
Adjusted EBIT margin
excluding impairments[3]
|
5.4 %
|
4.4 %
|
-
|
8.1 %
|
-
|
6.7 %
|
5.4 %
|
-
|
|
Adjusted
EBITA
|
4.054
|
3.675
|
10 %
|
5.10
|
-20 %
|
9.152
|
8.503
|
8 %
|
|
Adjusted EBITA
margin
|
6.8 %
|
5.7 %
|
-
|
9.6 %
|
-
|
8.1 %
|
6.7 %
|
-
|
|
*Sales adjusted for the
impact of acquisitions and divestments and effects of foreign
currency fluctuations.
[1] Adjusted metrics
are adjusted to exclude restructuring charges. This is a change in
nomenclature only, compared with previous reports.
[2] Non-IFRS financial
measures are reconciled at the end of this report to the most
directly reconcilable line items in the financial
statement.
[3] Excluding the
non-cash impairment recorded in the second quarter 2024, relating
to the impairment of intangible assets mainly attributed to the
Vonage acquisition.
|
NOTES TO EDITORS
You find the complete report with tables in the attached PDF or
on https://www.ericsson.com/en/investors/financial-reports/interim-reports
Video webcast for analysts, investors and
journalists
President and CEO Börje Ekholm and CFO Lars Sandström will comment on the report and
take questions at a video webcast at 10:00
AM CEST (9:00 AM BST London,
4:00 AM EDT New York).
Join the webcast or please go to www.ericsson.com/investors
To ask a question: Access dial-in information here
The webcast will be available on-demand after the event and can
be viewed at www.ericsson.com/investors.
FOR FURTHER INFORMATION, PLEASE CONTACT
Contact person
Daniel
Morris, Head of Investor Relations
Phone: +44 7386657217
E-mail: investor.relations@ericsson.com
Additional contacts
Stella Medlicott, Senior Vice
President, Marketing and Corporate Relations
Phone: +46 730 95 65 39
E-mail: media.relations@ericsson.com
Investors
Lena Häggblom, Director, Investor
Relations
Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Alan Ganson, Director, Investor
Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@ericsson.com
Media
Ralf Bagner,
Head of Media Relations
Phone: +46 76 128 47 89
E-mail: ralf.bagner@ericsson.com
Media relations
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
This is information that Telefonaktiebolaget LM Ericsson is
obliged to make public pursuant to the EU Market Abuse Regulation
and the Swedish Securities Markets Act. The information was
submitted for publication, through the agency of the contact person
set out above, at 07:00 CEST on
July 12, 2024.
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SOURCE Ericsson