Ericsson fourth quarter and full year 2012 report

Ericsson fourth quarter and full year 2012 report 
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%, 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. 


 
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                                                     Full       Full   Full
                       Q4    Q4    YoY    Q3    QoQ  year       year   year
 SEK b.             2012   2011 Change  2012 Change  2012       2011 Change
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 Net sales           66.9  63.7     5%  54.6    23% 227.8      226.9     0%
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 Of which Networks   35.3  33.3     6%  26.9    31% 117.3      132.4   -11%
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 Of which Global                                                        16%
 Services            28.0  27.0     4%  24.3    15%  97.0       83.9
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 Of which Support                                                       26%
 Solutions            3.6   3.4     6%   3.3     9%  13.5       10.6
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 Gross margin       31.1% 30.2%      - 30.4%      - 31.6%      35.1%      -
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 EBITA margin excl
 JVs and Sony
 Ericsson sale       8.8%  8.1%      -  8.7%      -  8.4%      11.6%      -
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 Operating income
 Excl JVs and Sony
 Ericsson sale       4.8   4.1    17%   3.7    30%  14.5       21.7   -33%
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 Operating margin
 Excl JVs and Sony
 Ericsson sale       7.1%  6.4%      -  6.7%      -  6.4%       9.6%      -
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 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%
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 Of which Support                                                         -
 Solutions             8%    0%      -   14%      -    9%        -5%
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 Operating income
 incl JVs            -3.8   2.2      -   3.1      -  10.5       17.9
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 Of which
 ST-Ericsson         -8.5  -0.8      -  -0.6      - -11.7       -2.7      -
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 Income after
 Financial items     -3.9   1.8      -   3.2      -  10.2       18.1
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 Net income          -6.3   1.5      -   2.2      -   5.9       12.6
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 EPS diluted, SEK   -1.99  0.36      -  0.67      -  1.78       3.77   -53%
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 EPS (Non-IFRS),                                                       -36%
 SEK(1))            -1.40  0.81      -  1.04      -  3.55       5.54
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 Cash flow from                                                        121%
 operations          15.7   5.5   187%   7.0   125%  22.0       10.0
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 Cash conversion     227%   79%      -  149%      -  116%        40%      -
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 Net cash, end of                                                       -2%
 period              38.5  39.5    -2%  29.0    33%  38.5       39.5
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 (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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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 secon
d 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. 
You find the complete report with tables in the attached PDF or by
following
this 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 the Ericsson Studio, Groenlandsgangen 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/broadcast_room 
Ericsson discloses the information provided herein pursuant to the
Securities
Markets Act. The information was submitted for publication
at 07.30 CET, on January 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 of
Thomson 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] 
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 
Asa Konnbjer
Director, Investor Relations
Phone: +46 10 713 3928
+46 730 825 928
E-mail: investor.relations@ericsson.com 
Stefan Jelvin
Director, Investor Relations
Phone: +46 10 714 2039
+46 709 860 227
E-mail: investor.relations@ericsson.com 
Rikard Tunedal
Director, Investor Relations
Phone: +46 10 714 5400
+46 761 005 400
E-mail: investor.relations@ericsson.com 
Media 
Ola Rembe
Vice President
Head of Corporate Communications & PR
Phone: +46 10 719 9727
+46 730 244 873
E-mail: media.relations@ericsson.com 
Corporate Communications & PR
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
 
 
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