SECOND QUARTER HIGHLIGHTS
-
Reported sales increased by 11% YoY. Sales,
adjusted for comparable units and currency, decreased by -6%
YoY.
-
The mobile broadband business in North America
stabilized in the quarter, but remained at a lower level than a
year ago.
-
Professional Services continued to deliver
strong sales growth YoY.
-
Sales in segment Networks recovered and showed a
growth QoQ of 18%.
-
Gross margin decreased YoY to 33.2% (36.4%).
Excluding restructuring charges, gross margin was 35.1% (36.6%) due
to lower capacity business in North America and continued 4G
coverage deployments in Mainland China, lower IPR revenues and
higher share of services sales.
-
The global cost and efficiency program is
progressing according to plan and restructuring charges in the
quarter were SEK 2.7 (0.2) b., mainly related to the reductions in
Sweden.
-
Operating income, excluding restructuring
charges, improved in all segments YoY to SEK 6.3 (4.2) b. and
segment Networks operating margin recovered from last
quarter.
-
Cash flow from operating activities recovered to
SEK 3.1 (2.1) b., after a weak first quarter.
SEK b. |
Q2
2015 |
Q2
2014 |
YoY
change |
Q1
2015 |
QoQ
change |
Six months
2015 |
Six months
2014 |
Net sales |
60.7 |
54.8 |
11% |
53.5 |
13% |
114.2 |
102.4 |
Sales growth adj. for comparable
units and currency |
- |
- |
-6% |
- |
12% |
-6% |
-4% |
Gross margin |
33.2% |
36.4% |
- |
35.4% |
- |
34.2% |
36.4% |
Gross margin excluding
restructuring charges |
35.1% |
36.6% |
- |
36.3% |
- |
35.7% |
36.6% |
Operating income |
3.6 |
4.0 |
-11% |
2.1 |
67% |
5.7 |
6.6 |
Operating income excluding
restructuring charges |
6.3 |
4.2 |
49% |
2.7 |
129% |
9.1 |
7.0 |
Operating margin |
5.9% |
7.3% |
- |
4.0% |
- |
5.0% |
6.5% |
Operating margin excluding
restructuring charges |
10.4% |
7.7% |
- |
5.1% |
- |
7.9% |
6.8% |
Net income |
2.1 |
2.7 |
-20% |
1.5 |
46% |
3.6 |
4.4 |
EPS diluted, SEK |
0.64 |
0.79 |
-19% |
0.40 |
60% |
1.04 |
1.44 |
EPS (Non-IFRS), SEK 1) |
1.45 |
1.07 |
36% |
0.77 |
88% |
2.22 |
1.98 |
Cash flow from operating activities |
3.1 |
2.1 |
50% |
-5.9 |
-152% |
-2.8 |
11.5 |
Net cash, end of period |
3.5 |
32.5 |
-89% |
15.6 |
-78% |
3.5 |
32.5 |
1) EPS, diluted, excl. amortizations and write-downs of
acquired intangible assets, and restructuring. |
Comments from Hans Vestberg,
President and CEO of Ericsson (NASDAQ:ERIC)
Reported sales increased by 11%. Sales, adjusted
for comparable units and currency, decreased by -6% YoY, mainly
impacted by less capacity business in North America. Profitability
improved sequentially, driven by a strong development in segment
Networks.
Business
The mobile broadband business in North America stabilized in the
quarter, but remained at a lower level than a year ago. The YoY
decline in North America was partly offset by an increased pace of
4G deployments in Mainland China. Sales growth was strong in the
Middle East, India and South East Asia, while it continued to be
weak in Japan. Professional Services sales increased YoY with
continued strong global demand and growth in all ten regions.
The OSS & BSS business had a favorable
development YoY, contributing to sales both in Professional
Services and segment Support Solutions.
Segment Networks sales increased by 18%
sequentially, supported by the stabilized mobile broadband sales in
North America.
Profitability
Operating income, excluding restructuring charges,
increased YoY by almost 50%, with improvements in all segments.
After a weak first quarter, segment Networks profitability
recovered, driven by increased sales and a positive currency hedge
effect.
IPR revenues
Reported IPR revenues were slightly down YoY despite a positive
currency effect as a majority of the licenses contracts are in USD.
The decline was primarily due to the ongoing dispute with a major
customer.
Cost and efficiency
program
The global cost and efficiency program is progressing according to
plan. The target, to achieve savings of approximately SEK 9 b.
during 2017 relative to 2014, remains. During the quarter, numerous
activities were implemented globally including a reduction of 2,100
positions in Sweden, resulting in higher than normal restructuring
charges. Savings related to the activities will start to impact
results towards the end of this year.
Cash flow
After a weak first quarter, cash flow from operating activities was
positive in the quarter. As cash flow is volatile between quarters
it should be viewed on a full-year basis. Our full-year cash
conversion target of more than 70% remains.
Targeted growth
areas
Our growth strategy builds on a combination of excelling in our
core business and establishing leadership in targeted growth areas.
We see good progress in the targeted areas and sales continued its
strong development from the first quarter. This was mainly driven
by a solid sales development in OSS & BSS.
The consolidation in the industry continues, both
among vendors and customers, creating opportunities and challenges.
Therefore we have, during the first half of 2015, accelerated our
transformation journey towards becoming a true ICT company. With
our ongoing strategic initiatives we are well positioned to
continue to create value for our customers in a transforming
market.
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/2015/06month15-en.pdf
or on www.ericsson.com/investors
Ericsson invites media, investors and analysts to
a briefing at the Ericsson Studio, Grönlandsgången 4, Stockholm, at
09.00 (CET), July 17, 2015.
A conference call for analysts, investors and media will begin at
14.00 (CET).
Live webcast of the briefing 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/press
FOR FURTHER INFORMATION, PLEASE CONTACT
Helena Norrman, Senior Vice President, Marketing
and Communications
Phone: +46 10 719 34 72
E-mail: media.relations@ericsson.com
Investors
Peter Nyquist, Head of Investor
Relations
Phone: +46 10 714 64 49
E-mail: peter.nyquist@ericsson.com
Åsa Konnbjer, Director, Investor
Relations
Phone: +46 10 713 39 28
E-mail: asa.konnbjer@ericsson.com
Stefan Jelvin, Director, Investor
Relations
Phone: +46 10 714 20 39
E-mail: stefan.jelvin@ericsson.com
Rikard Tunedal, Director, Investor
Relations
Phone: +46 10 714 54 00
E-mail: rikard.tunedal@ericsson.com
Media
Ola Rembe, Vice President, Head of External
Communications
Phone: +46 10 719 97 27
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 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 July 17, 2015.
Ericsson second quarter report
2015
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ericsson via Globenewswire
HUG#1939509
Ericsson (NASDAQ:ERIC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ericsson (NASDAQ:ERIC)
Historical Stock Chart
From Apr 2023 to Apr 2024