Ericsson reports fourth quarter and full year results 2013

Ericsson reports fourth quarter and full year results 2013

STOCKHOLM, Sweden, Jan. 30, 2014 (GLOBE NEWSWIRE) -- Fourth quarter highlights

  *Sales of SEK 67.0 b., flat YoY.
  *Sales for comparable units and adjusted for FX, increased 4% YoY.
  *Operating income incl. JV of SEK 9.1 (-3.8) b. with operating margin of
    13.5% (-5.7%), including a one-time charge of SEK -0.4 b. related to the
    acquisition of Airvana
  *Net income SEK 6.4 (-6.3) b.
  *Successfully closed an IPR cross license agreement with Samsung on FRAND
    terms. Impact on net sales of SEK 4.2 b., on operating income of SEK 4.2
    b. and on net income of SEK 3.3 b. included in all numbers.
  *EPS diluted SEK 1.97 (-1.99). EPS Non-IFRS SEK 2.42 (-1.40).
  *Cash flow from operating activities of SEK 14.6 (15.7) b.
  *Segment Modems was consolidated as of October 1, 2013

Full year highlights

  *Sales of SEK 227.4 b., flat YoY.
  *Sales for comparable units and adjusted for FX, up 5% YoY.
  *Operating income incl. JV was SEK 17.8 (10.5) b. with an operating margin
    of 7.8% (4.6%).
  *Net income SEK 12.2 (5.9) b.
  *All numbers include effects of the IPR cross license agreement with
    Samsung with impact on net sales of SEK 4.2 b., on operating income of SEK
    4.2 b. and on net income of SEK 3.3 b.
  *EPS diluted SEK 3.69 (1.78). EPS Non-IFRS SEK 5.62 (3.55).
  *Cash flow from operating activities of SEK 17.4 (22.0) b.
  *Proposed dividend for 2013 of SEK 3.00 (2.75) per share.

                                                      Full             Full
SEK b.              Q4    Q4      YoY    Q3    QoQ    year   Full year year
                    2013  2012   Change 2013  Change        2012^2)   Change
                                                      2013
Net sales           67.0  66.9    0%     53.0  27%    227.4  227.8     0%
  Of which       34.8  35.3    -1%    26.7  30%    117.7  117.3     0%
Networks
  Of which       27.2  28.0    -3%    24.0  13%    97.4   97.0      0%
Global Services
  Of which       5.1   3.6     41%    2.4   117%   12.2   13.5      -9%
Support Solutions
  Of which       0.0   -       -      -     -      0.0    -         -
Modems
Gross margin        37.1% 31.1%   -      32.0% -      33.6%  31.6%     -
Operating income    9.1   4.8     90%    4.3   112%   18.0   22.2      -19%
excl JV
Operating margin    13.5% 7.1%    -      8.1%  -      7.9%   9.7%      -
excl JV
  Networks       17%   8%      -      10%   -      10%    6%        -
  Global         8%    6%      -      8%    -      6%     6%        -
Services
  Support        37%   8%      -      -5%   -      12%    9%        -
Solutions
Operating income    9.1   -3.8^3) -      4.2   115%   17.8   10.5^3)   71%
incl JV
Operating margin    13.5% -5.7%   -      8.0%  -      7.8%   4.6%      -
incl JV
Net income          6.4   -6.3^3) -      3.0   114%   12.2   5.9^3)    105%
EPS diluted, SEK    1.97  -1.99   -      0.90  119%   3.69   1.78      107%
EPS (Non-IFRS),     2.42  -1.40   -      1.31  85%    5.62   3.55      58%
SEK^1)
Cash flow from
operating           14.6  15.7    -7%    1.5   -      17.4   22.0      -21%
activities
Net cash, end of    37.8  38.5    -2%    24.7  53%    37.8   38.5      -2%
period
^1) EPS, diluted, excl. restructuring, amortizations and write-downs of
acquired intangible assets

^2) Including gain from divestment of Sony Ericsson of SEK 7.7 b

^3) Including a charge related to ST-Ericsson of SEK -8.0 b

Comments from Hans Vestberg, President and CEO

"Ericsson's sales for comparable units, adjusted for FX, grew 5% for the full
year. I am pleased that we have successfully closed the IPR cross-licensing
agreement with Samsung. Our industry is built on scale and a strong tradition
of sharing technologies through licensing on fair, reasonable and
non-discriminatory (FRAND) terms. The agreement shows the value of our R&D
investments and enables both companies to continue to innovate and bring new
technologies to the market," says Hans Vestberg, President and CEO of Ericsson
(NASDAQ:ERIC).

"Our focus on profitability started to pay off and operating margin for the
group gradually improved in 2013, despite significant currency headwind,
driven primarily by improvements in Networks and Network Rollout.

The business mix, with a higher share of coverage projects than capacity
projects, started to shift towards more capacity during the year. As
anticipated, sales came under some pressure during the quarter. As previously
communicated, the major reason behind this development is the two large mobile
broadband coverage projects, which peaked in North America in the first half
of 2013 and the impact from reduced activity in Japan.

While executing on the large rollout projects in the US, we have also
strengthened our professional services position and capabilities. For the full
year Global Services accounted for the majority of the region's sales and we
are today the market leader in both telecom services and mobile infrastructure
in one of the world's most advanced and dynamic ICT markets.

The LTE tenders in China continue and so far the two major operators that have
made their vendor selections have chosen Ericsson. During the quarter, sales
in China improved as a result of deliveries to the ongoing mobile broadband
coverage projects.

In the fourth quarter Ericsson continued to grow in some of its European key
markets. During the last years we have strengthened our position in Europe
through the network modernization projects. These projects have been delivered
according to plan and the major part of the negative margin impact from these
projects is now behind us. Over time, we expect the telecom industry in Europe
to improve driven by macroeconomic development and a recent investment
announcement made by one of the large operators.

During 2013 Ericsson executed on a number of strategic initiatives to both
manage the ongoing technology transition in the industry and to transform the
company for future business opportunities. We have solidified our core
business as well as taken important steps to build a leadership position in
new and targeted key areas. This includes consolidating the modems business
and the acquisition of the IPTV business Mediaroom from Microsoft. We will
gradually increase resource and capital allocation in these areas as well as
in IP, Cloud, OSS and BSS.

The long-term fundamentals in the industry remain attractive and with our
ongoing strategic initiatives we are well positioned to continue to support
our customers in a transforming ICT market.

We have worked diligently to improve working capital and we ended the year
with a strong cash flow of SEK 17.4 (22.0) b. and a full-year cash conversion
of 79%, above the target of 70%, giving Ericsson a solid balance sheet to
continue to execute on our strategy. The Board of Directors proposes a
dividend for 2013 of SEK 3.00 (2.75) per share, an increase by 9%," concludes
Vestberg.

NOTES TO EDITORS

You find the complete report with tables in the attached PDF or by following
this link:
www.ericsson.com/res/investors/docs/q-reports/2013/12month13-en.pdf or go to:
www.ericsson.com/investors

Ericsson invites media, investors and analysts to a press conference at the
Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), January 30,
2014. An analysts, investors and media conference call will begin at 14.00
(CET).

Live webcast of the press conference and conference call details, 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

FOR FURTHER INFORMATION, PLEASE CONTACT

Helena Norrman, Senior Vice President, Communications
Phone: +4610719 3472
E-mail: media.relations@ericsson.com

Investors

Peter Nyquist, Head of Investor Relations
Phone: +46 10714 64 49
E-mail: peter.nyquist@ericsson.com

Åsa Konnbjer, Director, Investor Relations
Phone: +46 10713 39 28
E-mail: asa.konnbjer@ericsson.com

Stefan Jelvin, Director, Investor Relations
Phone: +46 10714 20 39
E-mail: stefan.jelvin@ericsson.com

Rikard Tunedal, Director, Investor Relations
Phone: +46 10714 54 00
E-mail: rickard.tunedal@ericsson.com

Media

Ola Rembe, Vice President, Head of External Communications
Phone: +46 107199727
E-mail: media.relations@ericsson.com

Corporate Communications
Phone: +46 10719 69 92
E-mail: media.relations@ericsson.com

Ericsson discloses the information provided herein pursuant to the Securities
Markets Act. The information was submitted for publication at 07.30 CET, on
January 30, 2014.

Fourth quarter and full year report 2013
http://hugin.info/1061/R/1757959/594255.pdf

HUG#1757959
 
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