0000717826 eric:BoardOfDirectorsMember 2020-01-01 2020-12-31
Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
FORM
20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 20212022
OR
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number
000-12033
TELEFONAKTIEBOLAGET LM ERICSSON
(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)charter)
LM ERICSSON TELEPHONE COMPANYCOMPANY
(Translation of Registrant’s name into English)
Kingdom of Sweden
(Jurisdiction of incorporation or organization)
SE-164
SE-
164
83 Stockholm, Sweden
(Address of principal executive offices)
Jonas Stringberg,
Stefan Salentin, Head of Group Controlling and External Reporting
Telephone: +46 10 719 0000, jonas.stringberg@ericsson.comstefan.salentin@ericsson.com
Torshamnsgatan 21,
SE-
164
,
SE-164 83 Stockholm,
,
Sweden
(Name, Telephone,
E-mail
and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
 
Title of Each Classeach class
 
Trading
symbol(s)
 
Name of Each Exchange each exchange
on which Registeredregistered
American Depositary Shares (each
(each representing one B share)
B Shares *
 
ERIC
 
The NASDAQ Stock Market LLC
*
Not for trading, but only in connection with the registration of the American Depositary Shares representing such B Shares pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
 
B shares (SEK 5.00 nominal value)
   3,072,395,752 
A shares (SEK 5.00 nominal value)
   261,755,983 
C shares (SEK 5.00 nominal value)
   0 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934.    Yes  ☐    No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer or an emerging growth company .company. See the definitions of “large accelerated filer” andfiler,” “accelerated filer”filer,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
Large accelerated filer ☒  Accelerated filer ☐
Non-accelerated
filer
 ☐  Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
 
☐  U.S. GAAP
 U.S. GAAP☒    International Financial Reporting Standards as issued by the
International Accounting Standards Board		 ☐  Other
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17  ☐    Item 18  ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).     Yes  ☐    No  ☒
 
 

Table of Contents

TABLE OF CONTENTS

      Page 

PART I INTRODUCTION

   1 

ITEM 1.

  
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
   12 

ITEM 2.

  
OFFER STATISTICS AND EXPECTED TIMETABLE
   12 

ITEM 3.

  
KEY INFORMATION
1
A
Selected Financial Data
1
B
Capitalization and Indebtedness
1
C
Reasons for the Offer and Use of Proceeds
1
D
Risk Factors
1
ITEM 4.
INFORMATION ON THE COMPANY
   2 
  A  
History and Development of the CompanyReserved
   2 
  B  
Business OverviewCapitalization and Indebtedness
   2 
  C  
Reasons for the Offer and Use of Proceeds
2
DRisk Factors2

ITEM 4.

INFORMATION ON THE COMPANY2
AHistory and Development of the Company2
BBusiness Overview3
COrganizational Structure   3 
  D  
Property, PlantPlants and Equipment
   5 

ITEM 4A.

  
UNRESOLVED STAFF COMMENTS
   5 

ITEM 5.

  
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
   5 
  A  
Operating Results
   5 
  B  
Liquidity and Capital Resources
6
C
Research and Development, Patents and Licenses
6
D
Trend Information
6
E
Off-Balance Sheet Arrangements
6
F
Tabular Disclosure of Contractual Obligations
6
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
7
A
Directors and Senior Management
7
B
Compensation
7
C
Board Practices
7
D
Employees
7
E
Share Ownership
8
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
8
A
Major Shareholders
8
B
Related Party Transactions
   8 
  C  
Interests of ExpertsResearch and Counsel.Development, Patents and Licenses, etc.
   8
ITEM 8.
FINANCIAL INFORMATION
89 
  AD  
Consolidated Statements and Other Financial Information.Trend Information
   89 
  BE  
Significant ChangesCritical Accounting Estimates
   89 

ITEM 9.6.

  
THE OFFERDIRECTORS, SENIOR MANAGEMENT AND LISTINGEMPLOYEES
   9 
  A  
OfferDirectors and Listing DetailsSenior Management
   9 
  B  
Plan of DistributionCompensation
9
C
Markets
9
D
Selling Shareholders
9
E
Dilution
9
F
Expenses of the Issue
9
ITEM 10.
ADDITIONAL INFORMATION
9
A
Share Capital
9
B
Memorandum and Articles of Association
9
C
Material Contracts
9
D
Exchange Controls
9
E
Taxation
   10 
  FC  
DividendsBoard Practices
10
DEmployees10
EShare Ownership11

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS11
AMajor Shareholders11
BRelated Party Transactions11
CInterests of Experts and Paying AgentsCounsel11

ITEM 8.

FINANCIAL INFORMATION11
AConsolidated Statements and Other Financial Information11
BSignificant Changes11

ITEM 9.

THE OFFER AND LISTING   12 
  GA  
Statement by ExpertsOffer and Listing Details
   12 
  HB  
Documents on DisplayPlan of Distribution
   12 
i
Table of Contents
  IC  
Subsidiary InformationMarkets
12
DSelling Shareholders12
EDilution12
FExpenses of the Issue   12 

ITEM 11.10.

  
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKADDITIONAL INFORMATION
   12 
ITEM 12.  
A
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESShare Capital12
BMemorandum and Articles of Association12
CMaterial Contracts12
DExchange Controls   13 
  AE  
Debt SecuritiesTaxation
   13 
  BF  
WarrantsDividends and RightsPaying Agents
   1315
GStatement by Experts15
HDocuments on Display15
ISubsidiary Information15
JAnnual Report to Security Holders15

i

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK15

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES17
ADebt Securities17
BWarrants and Rights17 
  C  
Other Securities
   1317 
  D  
American Depositary Shares
   1317 

PART II

   1418 

ITEM 13.

  
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
   1418 

ITEM 14.

  
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
   1418 

ITEM 15.

  
CONTROLS AND PROCEDURES
   1418 
  A  
Disclosure Controls and Procedures
   1418 
  B  
Management’s Annual Report on Internal Control Over Financial Reporting
   1418 
  C  
Attestation Report of the Registered Public Accounting Firm
   1418 
  D  
Changes in Internal Control Over Financial Reporting
   1418 

ITEM 16.

  
[RESERVED]
   1418 

ITEM 16A

  
AUDIT COMMITTEE FINANCIAL EXPERT
   1418 

ITEM 16B

  
CODE OF ETHICS
   1418 

ITEM 16C

  
PRINCIPAL ACCOUNTANT FEES AND SERVICES
   1418 

ITEM 16D

  
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
   1419 

ITEM 16E

  
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
   1519 

ITEM 16F

  
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
   1519 

ITEM 16G

  
CORPORATE GOVERNANCE
   1519 

ITEM 16H

  
MINE SAFETY DISCLOSURE
   1519 

ITEM 16I

  
DISCLOSURE REGARDING FOREIGN JURISDICTIONJURISDICTIONS THAT PREVENT INSPECTIONS
   1519

PART III

20 
PART III

ITEM 17.

  FINANCIAL STATEMENTS   1520 

ITEM 17.18.

  
FINANCIAL STATEMENTS
   1520 

ITEM 18.19.

  
FINANCIAL STATEMENTSEXHIBITS
   16
ITEM 19.
EXHIBITS
1620 

ii

ii
Table of Contents

PART I

INTRODUCTION

Unless otherwise indicated, all references herein to “Ericsson,” the “Company,” “the Group,” “we,” “us,” or “our” or “our company” are references to Telefonaktiebolaget LM Ericsson and its consolidated subsidiaries.

This document is our Annual Report on Form

20-F
for the year ended December 31, 20212022 (the “2021“2022 Form
20-F”).
Reference is made to the English version of our Swedish Annual Report for 2021,2022, with certain adjustments made to comply with U.S. requirements and the additional disclosure and updates made in the document due to subsequent events which is attached hereto as Exhibit 15.1 (the “2021“2022 Swedish Annual Report (adjusted version)”). Only (i) the information included in this 20212022 Form
20-F,
(ii) the information in the 20212022 Swedish Annual Report (adjusted version) that is incorporated by reference in this 20212022 Form
20-F,
and (iii) the exhibits to the 20212022 Form
20-F
that are required to be filed pursuant to the Form
20-F
shall be deemed to be filed with the Securities and Exchange Commission for any purpose, including incorporation by reference into the Registration Statement on Form
F-3
filed on March 26, 2021 (File
No.333-254736
)No.333-254736) and any other document filed by us pursuant to the Securities Act of 1933, as amended, which incorporates by reference the 20212022 Form
20-F.
Any information in the 20212022 Swedish Annual Report (adjusted version) that is not referenced in the 20212022 Form
20-F
or filed as an exhibit thereto shall not be deemed to be so incorporated by reference. Certain industry, technical and financial terms used in this 20212022 Form
20-F
are defined in the subsections entitled “Glossary” and “Financial Terminology” of the 20212022 Swedish Annual Report (adjusted version), which are incorporated herein by reference.

Market data and certain industry forecasts used herein were obtained from internal surveys, market research, publicly available information and industry publications. While we believe that the market research, publicly available information and industry publications we use are reliable, we have not independently verified market and industry data from third-party sources. Moreover, while we believe our internal surveys are reliable, they have not been verified by any independent source.

The information included on

http://www.ericsson.com
/www.ericsson.com/ and other websites that appear in this 20212022 Form
20-F
is not incorporated by reference herein. From time to time, we may use our website as a channel of distribution of material companyCompany information. Financial and other material information regarding our company is routinely posted on and accessible at
http://www.ericsson.com
/www.ericsson.com/.

Forward-Looking Statements

This 20212022 Form

20-F
includes forward-looking statements, including statements reflecting management’sthe Company’s current views relating to the growth of the market, future market conditions, future events, financial condition, and expected operational and financial performance, including, in particular the following:

Potential material additional costs and liability resulting from our ongoing future compliance with the terms of the DOJ Plea Agreement with the DOJ and extended monitorship

Potential to become a target for public scrutiny as a result of entering into the DOJ Plea Agreement with the DOJ, including incorrect misinterpretations of the resolution, complaints to regulatory agencies, negative media publicity and, interference from our competitors, all of which could damage our reputation and materially and adversely affect our business and prospects

––

Risks resulting from entering into the DOJ Plea Agreement including potential debarment from government contracting in the United States and elsewhere, reputational risk, as well as potential negative impact on commercial contracts, dealings with financial institutions, contracts with suppliers, primarily due to counter-party reluctance to continue business relationships

Potential material additional liability resulting from past conduct, including allegations of past conduct in Iraq or other locations that remains unresolved or unknown

Risks related to internal control and governance, including the potential to incur material liability in connection with internal controls surrounding payments made to third parties in connection with historical conduct in Iraq or other locations

Our goals, targets, strategies, planning assumptions and operational or financial performance expectations such as the investor day key messages and our targets and strategies as described in the introductory bullets, the CEO comments, the Segment descriptions and in Other information

•

Ongoing geopolitical and trade uncertainty, including challenging global economic conditions, market trends and pandemics such as COVID-19

––

Industry trends, future characteristics and development of the markets in which we operate

Our ability to comply with legal and regulatory requirements internationally

––

Our future liquidity, capital resources, capital expenditures, cost savings and profitability

––

The expected demand for our existing and new products and services as well as plans to launch new products and services including research and development expenditures

––

The ability to deliver on future plans and to realize potential for future growth

––

The expected operational or financial performance of strategic cooperation activities and joint ventures

––

The time until acquired entities and businesses will be integrated and accretive to income

––

Technology and industry trends including the regulatory and standardization environment in which we operate, competition and our customer structure.

The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “intend”, “likely”, “projects”, “may”, “could”, “plan”, “estimate”, “forecast”, “will”, “should”, “would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”, “might”,“believe,” “expect,” “foresee,” “anticipate,” “assume,” “intend,” “likely,” “projects,” “may,” “could,” “plan,” “estimate,” “forecast,” “will,” “should,” “would,” “predict,” “aim,” “ambition,” “seek,” “potential,” “target,” “might,” “continue”, or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements.

Any statement that refers to the Company’s strategy, future financial performance, expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-lookingforward looking statements.

Such statements are based on management’s expectations as of the date of this report, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable.

We caution investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond our control that could cause actual results to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements.

Important factors that could affect whether and to what extent any of our forward-looking statements materialize include but are not limited to the factors described throughout this 2022 Form 20-F, including in the section Risk Factors.
These forward-looking statements also represent our estimates and assumptions only as of the date that they were made.made, and to the extent they represent third-party data, we have not undertaken to independently verify such third-party data and do not intend to do so. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this 2022 Form 20-F and in other documents we file from time to time with our regulators that disclose risks and uncertainties that may affect our business. Unless specifically indicated otherwise, the forward-looking statements in this 2022 Form 20-F do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed as of the date of this report. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this
2022 Form 20-F,
to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulation. We maintain website and external voluntary reports that may be referenced in this 2022 Form 20-F. The information on our website and in our external voluntary reports is not incorporated by reference in, or otherwise to be regarded as part of, this 2022 Form 20-F. We also report to more than one regulator, and our regulators have different definitions of what is or is not or may or may not be “material” for the purposes of our operations, financial statements and strategy. Given this, we may report certain matters to certain regulators and not to others. We may also use definitions of materiality in our voluntary reporting that are different from the definitions we use in our regulatory filings.

1

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

The selected financial data previously required this Item has been omitted in reliance on SEC Release
No. 33-10890,
Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information.
Reserved

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

The information set forth under the heading “Financial Reportreport – Risk Factors”factors” of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference.

1
Table of Contents

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

General facts on the company

Legal and commercial name of the Parent Company:

Telefonaktiebolaget LM Ericsson (publ).

Organization number:

556016-0680

Legal form of the Parent Company:

A Swedish limited liability company, organized under the Swedish Companies Act.

Country of incorporation:

Sweden.

Date of incorporation:

The Parent Company was incorporated on August 18, 1918, as a result of a merger between AB LM Ericsson & Co. and Stockholms Allmänna Telefon AB.

Domicile:

Our registered office is Telefonaktiebolaget LM Ericsson, SE–164 83 Stockholm, Sweden. Our headquarters are located at Torshamnsgatan 21, Kista, Sweden.

Telephone number:

+46 10 719 0000

Website:

www.ericsson.com
. The information included on our website is not incorporated herein by reference.

In addition, the SECU.S. Securities and Exchange Commission (the “SEC”) maintains an Internet sitea website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC:

http://www.sec.gov
.

Agent in the US:

Ericsson Inc., Vice President Legal Affairs, 6300 Legacy Drive, Plano, Texas 75024. Telephone number: +1 972 583 0000.

Shares:

Ericsson’s Class A and Class B shares are traded on Nasdaq Stockholm. In the US, our American Depository Shares (ADS), each representing one underlying Class B share, are traded on NASDAQ New York.

Parent companyCompany operations:

The business of the parent company,Parent Company, Telefonaktiebolaget LM Ericsson, consists mainly of corporate management, holding company functions and internal banking activities. Our parent companyParent Company operations also include customer credit management activities performed by Ericsson Credit AB on a commission basis.

Subsidiaries and associated companies:

For a list of our significant subsidiaries, please see “Item 4C. SharesItem 4.C. “Shares owned directly by the Parent Company”.Company.” We are engaged in a number of minor joint ventures and cooperative arrangements. For more information regarding risks associated with joint ventures, strategic alliances and third-party agreements, please see “Item 3D. Financial Report –3.D. Risk Factors”.
Factors.”

Company history and development

Innovating to empower people, business and society

Our origins date back to 1876 when Alexander Graham Bell filed a patent application in the United States for the telephone. The same year, Lars Magnus Ericsson opened a small workshop in Stockholm to repair telegraph instruments and sell his own telephone equipment.

Today, Ericsson enables communications service providers and enterprises to capture the full value of connectivity. The company’sCompany’s portfolio spans the following segments: Networks, Digital Services, ManagedCloud Software and Services and Emerging BusinessEnterprise (which includes Enterprise Wireless Solutions, Global Communications Platform, and Technologies and New Businesses). In addition, segment Other includes media businesses as well as other non-allocated business. Our portfolio is designed to help our customers go digital, increase efficiency and find new revenue streams. Ericsson’s innovation investments in innovation have delivered the benefits of telephonymobility and mobile broadband to billions of people around the world.

globally.

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

This is Ericsson

Business strategy – Creating long-term value

Business model – Customer focus and technology leadership

Board of Directors’ Reportreport

Business in 20212022

Financial Highlights - highlights—Capital expenditures

For capital expenditures we usuallytypically use available cash from operations.

Notes to the Consolidatedconsolidated financial statements

Note E2 – Business combinations

Note H6 – Events after the reporting period

2

B. Business Overview

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

This is Ericsson

Business strategy – Creating long-term value

Business model – Customer focus and technology leadership

Board of Directors’ report

Business in 20212022

Financial highlights – Research and development, patents and licensing

Financial highlights – Seasonality

Business results – Segments

2
Table of Contents

Business results – Market Areasareas

Sourcing and supply

Sustainability and Corporate Responsibility

Notes to the consolidated financial statements

Note B1 – Segment information

Risk factors

Risks related to business activities and industry

Risks related to Ericsson’s financial situationsituation+

Legal and regulatory risk

Internal control risk

Environmental, social and governancebusiness conduct risk

Corporate Governance Reportreport

Regulation and compliance

Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA)

Ericsson has conducted business in Iran/Persia since the late nineteenth century, opened an office in Iran in 1973 and later established a local subsidiary in the country. Ericsson strongly believes in enabling communication for all and believes that access to communications can enable the right to health, education and freedom of expression. Ericsson’s business activities in Iran principally involve the sale of communications infrastructure related products and services, including support, installation and maintenance services. Ericsson’s exports from the European Union (the “EU”) to Iran are performed under export licenses from the Swedish Inspectorate of Strategic Products and in compliance with applicable economic sanctions and export controls.
Due to its operations in Iran, and having staff permanently in the country, Ericsson has contacts with its local customers and retains certain local suppliers, including banks, and service providers. In addition, Ericsson has other dealings incidental to its local activities, such as making payments for taxes, customs related services, salaries, rents, utilities, local accommodation, transportation, office and similar supplies. As a result, Ericsson has contact with companies and public functions that may be owned or controlled by the government of Iran. While Ericsson seeks to obtain information regarding the actual business names and ownership of customers and other counterparties in Iran through its policies and procedures designed to ensure that Ericsson “knows its customers”, it is challenging to determine ownership and control with certainty, particularly with respect to determining whether an entity engaged in commercial activities is owned or controlled by the government.
Ericsson always strives to honor its engagements with existing customers in compliance with applicable export controls, sanctions and other laws, rules and regulations, carefully evaluates the implications of any sanctions and continues to monitor developments in this area as it relates to the ability to continue delivering products and services to customers. As a result of the US withdrawal from the Joint Comprehensive Plan of Action (the JCPOA) in 2018, Ericsson has reduced its business and organization in Iran significantly but still continues to provide critical services and support to its customers in order for their networks to function. As Ericsson provides such services and support, it may need to interact with other counterparties. Ericsson continues to explore, including with EU and US authorities, whether and how the last years’ disruptive impact on the overall ability to support its customers can be reduced and, by doing so endeavor to avoid undue impacts on the access of the people of Iran to humanitarian items/basic services such as telecommunications.

During 2021,2022, Ericsson recorded revenues relating to the sale of communications infrastructure related products and services in Iran to the following telecommunications companiescompany operating in the country: MTN Irancell. There are some transactions related to Mobile Communication Company of Iran (MCCI), primarily from internal clearing/accounting of pending old and MTN Irancell. The revenues relating to MCCI relate to sales conducted before 2021.minor items called as GR/IR (good receipt) clean up. During 2021,2022, Ericsson’s gross revenue (reported as net sales) related to sales to MCCI and MTN Irancell was approximately SEK 111106 million. In addition, Ericsson supplied network critical software capacities to MTN Irancell for a current value of approximately SEK 304 million during the year, which was not recorded as revenue as per the applied accounting policies, and thus Ericsson has not yet recorded any net revenues or net profits for these activities. Ericsson does not normally allocate net profit (reported as net income) on a

country-by-country
or
activity-by-activity
basis, other than as set forth in Ericsson’s consolidated financial statements prepared in accordance with IFRS as issued by the IASB. However, Ericsson has estimated that its operating income (income before taxes and financial net) from such sales was, after internal cost allocation, approximately SEK 2029 million during 2021.
Ericsson uses the local banks Saman Bank and Pasargad Bank for local transactions in local currency, cash management and deposits. 2022.

In some instances, Ericsson has previously had to arrange performance bonds or similar financial guarantees to secure Ericsson’s performance of obligations under the commercial agreements Ericsson hashad entered into relating to the business in Iran. In such instances, Ericsson usually engagesengaged its banks outside Iran, who in turn engageengaged local banks in the country. These local banks include Tejarat Bank, Melli Bank, Parsian Bank, Saman Bank and Saderat Bank. Although some bonds and guarantees are still in place, no new performance bonds or similar guarantees involving these five banks with respect to Ericsson’s business activities in Iran were issued during 2021.2022. During 2021,2022, existing bank guarantees issued by Maskan Bank, Parsian Bank, Post Bank of Iran, Bank Mellat and Tejarat Bank (local banks in Iran) to secure Iranian customer payment obligations to Ericsson were renewed. Further, some payments made to Ericsson’s local subsidiary and payments required to be made by the local subsidiary to suppliers involve banks that may be controlled by the government of Iran.

Since 2018, Ericsson has reduced its business engagement as well as its presence in Iran significantly but has continued to provide certain critical services and support to telecommunications networks and systems. However, as the complexity associated with operating in the country continues to increase, Ericsson is planning for an orderly wind down as soon as practicable.

C. Organizational Structure

The following list shows certain shareholdings owned directly and indirectly by our parent companyParent Company as of December 31, 2021.2022. A complete list of shareholdings, prepared in accordance with the Swedish Annual Accounts Act and filed with the Swedish Companies Registration Office (Bolagsverket), may be obtained upon request to: Telefonaktiebolaget LM Ericsson, External Reporting,

SE-164
83 Stockholm, Sweden.

3

3
Table of Contents

Shares owned directly by the Parent Company

Company
  
            Reg. No.            
   
        Domicile        
   
  Percentage of  

ownership
   
Par value in

    local currency,    

million
   
Carrying

value,

    SEK million    
 
Subsidiary companies
                         
Ericsson AB
   556056-6258    Sweden    100    50    20,731 
Ericsson Shared Services AB
   556251-3266    Sweden    100    361    2,216 
Ericsson Software Technology Holding AB
   559094-8963    Sweden    100    —    7 
Datacenter i Rosersberg AB
   556895-3748    Sweden    100    —    88 
Datacenter i Mjärdevi Aktiebolag
   556366-2302    Sweden    100    10    69 
AB Aulis
   556030-9899    Sweden    100    14    6 
Ericsson Credit AB
   556326-0552    Sweden    100    5    5 
Other (Sweden)
             —    —    1,142 
Ericsson Austria GmbH
        Austria    100    4    94 
Ericsson Danmark A/S
        Denmark    100    90    216 
Oy LM Ericsson Ab
        Finland    100    13    196 
Ericsson France SAS
        France    100    21    524 
Ericsson Antenna Technology Germany GmbH
        Germany    100    2    21 
Ericsson Germany GmbH
        Germany    100    1    2,844 
Ericsson Hungary Ltd.
        Hungary    100    1,301    120 
L M Ericsson Limited
        Ireland    100    4    34 
Ericsson Telecomunicazioni S.p.A.
        Italy    100    44    3,173 
Ericsson Holding International B.V.
        The Netherlands        100    222    2,983 
Ericsson A/S
        Norway    100    75    114 
Ericsson Television AS
        Norway    100    161    160 
Ericsson Corporatia AO
        Russia    100    5    5 
Ericsson España S.A.
        Spain    100    28    14 
Ericsson AG
        Switzerland    100    —    — 
Ericsson Holdings Ltd.
        United Kingdom    100    328    10 
Other (Europe, excluding Sweden)
             —    —    972 
Ericsson Holding II Inc.
        United States    100    —    30,281 
Ericsson Smart Factory Inc.
        United States    100    —    191 
Companía Ericsson S.A.C.I.
        Argentina    95
1)
    193    99 
Ericsson Canada Inc.
        Canada    100    —    51 
Belair Networks
        Canada    100    108    170 
Ericsson Telecom S.A. de C.V.
        Mexico    100    939    576 
Other (United States, Latin America)
             —    —    486 
Teleric Pty Ltd.
        Australia    100    20    100 
Ericsson Ltd.
        China    100    2    2 
Ericsson (China) Company Ltd.
        China    100    65    475 
P.T. Ericsson Indonesia
        Indonesia    95    9,531    614 
Ericsson India Global Services PVT. Ltd
        India    100    291    51 
Ericsson Kenya Limited
        Kenya    100    —    69 
Ericsson-LG
CO Ltd.
        Korea    75    285    2,279 
Ericsson (Malaysia) Sdn. Bhd.
        Malaysia    100    3    131 
Ericsson Telecommunications Pte. Ltd.
        Singapore    100    2    1 
Ericsson South Africa PTY. Ltd
        South Africa    70    —    135 
Ericsson Taiwan Ltd.
        Taiwan    90    270    36 
Ericsson (Thailand) Ltd.
        Thailand    49
2)
    90    17 
Other countries (the rest of the world)
             —    —    501 
Total
                      
 
72,009
 
Joint ventures and associated companies
                         
Concealfab Co
        USA    28    —    64 
Leone Media Inc.
        USA    49    134    790 
Ericsson Nikola Tesla d.d.
        Croatia    49    65    330 
Total
                      
 
1,184
 

Company

  Reg. No.   Domicile   Percentage of
ownership		  Par value in
local currency,
million		   Carrying
value,
SEK million		 

Subsidiary companies

         

Ericsson AB

   556056-6258    Sweden    100   50    20,731 

Ericsson Shared Services AB

   556251-3266    Sweden    100   361    2,216 

Ericsson Software Technology Holding AB

   559094-8963    Sweden    100   —      7 

Datacenter i Rosersberg AB

   556895-3748    Sweden    100   —      74 

Datacenter i Mjärdevi Aktiebolag

   556366-2302    Sweden    100   10    69 

Aktiebolaget Aulis

   556030-9899    Sweden    100   14    6 

Ericsson Credit AB

   556326-0552    Sweden    100   5    5 

Other (Sweden)

       —     —      1,257 

Ericsson Austria GmbH

     Austria    100   4    94 

Ericsson Danmark A/S

     Denmark    100   90    216 

Oy LM Ericsson Ab

     Finland    100   13    196 

Ericsson France SAS

     France    100   21    524 

Ericsson Antenna Technology Germany GmbH

     Germany    100   2    21 

Ericsson Germany GmbH

     Germany    100   1    2,844 

Ericsson Hungary Ltd.

     Hungary    100   1,301    120 

L M Ericsson Limited

     Ireland    100   4    34 

Ericsson Telecomunicazioni S.p.A.

     Italy    100   44    2,429 

Ericsson Holding International B.V.

     The Netherlands    100   222    2,983 

Ericsson A/S

     Norway    100   75    114 

Ericsson Television AS

     Norway    100   161    160 

Ericsson Corporatia AO

     Russia    100   5    5 

Ericsson España S.A.

     Spain    100   28    14 

Ericsson AG

     Switzerland    100   —      —   

Ericsson Holdings Ltd.

     United Kingdom    100   328    10 

Ericsson Ltd.

     United Kingdom    100   53    1,957 

Other (Europe, excluding Sweden)

       —     —      974 

Ericsson Holding II Inc.

     United States    100   —      34,295 

Ericsson Smart Factory Inc.

     United States    100   —      424 

Ericsson Global Network Platform Holding Inc.

     United States    100   —      51,298 

Companía Ericsson S.A.C.I.

     Argentina    951)   193    99 

Ericsson Canada Inc.

     Canada    100   —      221 

Ericsson Del Paraguay S.A.

     Paraguay    951)   42,647    53 

Ericsson Telecom S.A. de C.V.

     Mexico    100   1,439    576 

Other (United States, Latin America)

       —     —      389 

Teleric Pty Ltd.

     Australia    100   20    100 

Ericsson Ltd.

     China    100   2    2 

Ericsson (China) Company Ltd.

     China    100   65    475 

P.T. Ericsson Indonesia

     Indonesia    95   9,531    614 

Ericsson India Global Services PVT. Ltd

     India    100   291    51 

Ericsson Kenya Limited

     Kenya    100   —      46 

Ericsson-LG CO Ltd.

     Korea    75   285    2,279 

Ericsson (Malaysia) Sdn. Bhd.

     Malaysia    100   3    131 

Ericsson Telecommunications Pte. Ltd.

     Singapore    100   2    1 

Ericsson South Africa PTY. Ltd

     South Africa    70   —      135 

Ericsson Taiwan Ltd.

     Taiwan    90   270    36 

Ericsson (Thailand) Ltd.

     Thailand    492)   90    17 

Other countries (the rest of the world)

       —     —      336 

Total

          128,638 

Joint ventures and associated companies

         

Concealfab Co

     United States    36   —      298 

Leone Media Inc.

     United States    46   134    —   

Ericsson Nikola Tesla d.d.

     Croatia    49   65    330 

Total

          628 

1)

Through subsidiary holdings, total holdings amount to 100% of Compania Ericsson S.A.C.I.

and Ericsson Del Paraguay S.A.

2)

Through subsidiary holdings, total holdings amount to 74% of Ericsson (Thailand) Ltd.

4

4
Table of Contents

Shares owned by subsidiary companies

Company

  
Reg. No.
   
Domicile
   
Percentage

of ownership
 

Subsidiary companies

Ericsson Cables Holding AB

   
Ericsson Cables Holding AB
556044-9489    Sweden    100 

Emodo Inc.

     United States    100 

Ericsson Telekommunikation GmbH

     Germany    100 

Ericsson GmbH

     Germany    100 

Ericsson Telecommunicatie B.V.

   The Netherlands    100 

Ericsson Telekomunikasyon A.S.

     Turkey    100 

Ericsson Ltd.

Inc.

  United Kingdom100
Creative Broadcast Services Holdings Ltd.
United Kingdom100
Ericsson Inc.
   United States    100 
Ericsson Wireless Office Inc.

Vonage Holdings Corp.

     United States    100 
Cradlepoint

Ericsson Wireless Office Inc.

     United States    100 
Iconectiv, LLC.

Cradlepoint Inc.

United States    100

Iconectiv, LLC.

   United States    83 

Ericsson Telecomunicações S.A.

     Brazil    100 

Ericsson Australia Pty. Ltd.

     Australia    100 

Ericsson (China) Communications Co. Ltd.

     China    100 

Nanjing Ericsson Panda Communication Co. Ltd.

     China    51 

Ericsson Japan K.K.

     Japan    100 
Ericsson Communication Solutions Pte Ltd.
Singapore100

D. Property, PlantPlants and Equipment

Primary manufacturing and assembly facilities

We continuously adjust our production capacity to meet expected customer demand. During 2021,2022, our overall capacity utilization** was 63%53%.

The table below summarizes where we have major sites and the total floor space at

year-end.
All facilities are leased, other than Nanjing (China). The majority of the floor space within our production facilities is used for assembly and test.
   
2021
   
2020
   
2019
 
   
      Sites      
   
Thousands

            of sq meters*            
   
      Sites      
   
Thousands

            of sq meters*            
   
      Sites      
   
Thousands

            of sq meters*            
 
Sweden
   1    5    1    5    1    5 
China
   1    13.9    1    13.9    1    13.9 
Estonia
   1    9    1    9    1    9 
Brazil
   1    6.5    1    6.5    1    6.7 
USA
   1    6    1    6    0    0 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
 
5
 
  
 
40.4
 
  
 
5
 
  
 
40.4
 
  
 
4
 
  
 
34.6
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 

   2022   2021   2020 
   Sites   Thousands
of sq meters**		   Sites   Thousands
of sq meters**		   Sites   Thousands
of sq meters**		 

Sweden

   1    5    1    5    1    5 

China

   1    13.9    1    13.9    1    13.9 

Estonia

   1    9    1    9    1    9 

Brazil

   1    6.5    1    6.5    1    6.5 

United States

   1    6    1    6    1    6 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   5    40.4    5    40.4    5    40.4 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

*

Test capacity utilization.

**

Floor space in square meters does not include any warehouses or transportation areas.

**
Test capacity utilization.

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report

Financial highlights – Capital expenditures

Notes to the consolidated financial statements

Note C2 – Property, plant and equipment

Note C3 – Leases

Risk factors

Legal and regulatory risk

Environmental, social and governancebusiness conduct risk

ITEM 4A. Unresolved Staff Comments

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Year-to-year
comparisons between 2020 and 2019 have been omitted from this 2021 Form
20-F
but may be found in “Item 5. Operating and Financial Review and Prospects” in our Form
20-F
for the fiscal year ended December 31, 2020, which discussion is incorporated herein by reference.
https://www.sec.gov/Archives/edgar/data/0000717826/000119312521094445/d52839d20f.htm

A. Operating Results

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

This is Ericsson

Business strategy – Creating long-term value

Business model – Customer focus and technology leadership

Board of Directors’ report

5
Table of Contents

Business in 20212022

Financial highlights

Business results – Segments

Business results – Market Areasareas

Risk management

Notes to the consolidated financial statements

Note A1 – Significant accounting policies

Note F1 – Financial risk management– Foreign exchange riskmanagement

Risk Factors

5

Risk Factors
Five-year summary – Financial information
Five-year summary –
Non-Financial
information

Alternative performance measures

Corporate Governance report

Regulation and compliance

As announced in May 2022, we began to report financial information according to our new segment structure as of the third quarter 2022. Accordingly, below we provide a discussion of our operating results for 2021 compared 2020 using financial information that has been restated to reflect

the new segment structure.

2021 highlights

•

Reported sales were stable at SEK 232.3 billion. Group sales growth adjusted for comparable units and currency was 4%, with an increase in Networks of 7%. The loss of market share in Mainland China impacted sales by SEK -7.7 billion. and the growth rate by -3 percentage points, meaning that excluding Mainland China, sales growth adjusted for comparable units and currency was 8%.

Reported net income improved to SEK 23.0 (17.6) billion. Earnings per share (EPS) diluted was SEK 6.81 (5.26).

Gross income was SEK 100.7 (93.7) billion, driven by strengthened operation leverage in Networks. Reported gross margin was 43.4% (40.3%).

Reported EBIT improved to SEK 31.8 (27.8) billion while the EBIT margin improved to 13.7% (12.0%).

EBIT margin excluding restructuring charges improved to 13.9% (12.5%), reaching the 2022 group target already in 2021.

Cash flow from operating activities was SEK 39.1 (28.9) billion. Free cash flow before M&A amounted to SEK 32.1 (22.3) billion. Cash and cash equivalents were SEK 54.1 (43.6) billion on December 31, 2021. Net cash was SEK 65.8 (41.9) billion on December 31, 2021.

The Board of Directors proposed a dividend for 2021 of SEK 2.50 (2.00) per share to the AGM.

Business in 2021

In 2021, reported sales were stable at SEK 232.3 billion. A stronger Swedish krona (SEK) had a negative impact on reported sales in all segments. Sales growth adjusted for comparable units and currency was 4%, mainly driven by growth in Networks. Networks reported sales grew by 1%, while sales growth adjusted for comparable units and currency was 7%, primarily supported by increased product sales as a result of continued market share gains. From a geographical point of view, sales growth was primarily underpinned by North America, Europe and Latin America as well as in some North East Asia markets. The sales in Mainland China declined by SEK -7.7 billion, due to reduced market share, impacting Group organic growth rate by -3 percentage points.

Reported sales decreased in Cloud Software and Services by -6%, mainly due to reduced variable sales in network managed services in a large contract in North America, after the merger between two operators. Contract rescoping and planned exits also contributed to the sales decline. IPR licensing revenues decreased to SEK 8.1 (10.0) billion, mainly due to lower volumes with one licensee.

Reported gross margin improved to 43.4% (40.3%), primarily driven by strengthened operational leverage in Networks. A higher share of product revenues in the sales mix had a positive impact on the gross margin. Cloud Software and Services gross margin improved to 33.5% (32.7%) mainly as an effect of efficiency gains. Gross margin in Enterprise increased, driven by the acquired Cradlepoint business, which has a higher average gross margin than the other businesses in the Enterprise segment.

Operating expenses increased to SEK -69.1 (-66.3) billion. Research and development (R&D) expenses increased in Networks, Cloud Software and Services and Enterprise. Selling and administrative (SG&A) expenses increased to SEK -27.0 (-26.7) billion through investments in the acquired Cradlepoint business.

Restructuring charges decreased to SEK -0.5 (-1.3) billion. The restructuring charges in 2021 were mainly related to Mainland China.

EBIT was SEK 31.8 (27.8) billion. The improvement was driven by improved gross income in segment Networks.

The number of employees increased to 101,322 (100,824). The increase was mainly due to Research and Development, which increased by 1,210 employees.

Cash flow from operating activities was SEK 39.1 (28.9) billion. Free cash flow before M&A amounted to SEK 32.1 (22.3) billion. The improvement was driven by improved profitability. Cash and cash equivalents were SEK 54.1 (43.6) billion on December 31, 2022. Net cash at December 31, 2021 was SEK 65.8 (41.9) billion.

Financial highlights

Net sales

Reported sales were stable at SEK 232.3 (232.4) billion. Sales in Mainland China declined by SEK -7.7 billion, impacting Group sales growth adjusted for comparable units and currency by -3 percentage points.

Networks sales increased by SEK 1.9 billion, or 1%, to SEK 167.8 billion, with a negative impact of SEK -6.4 billion from reduced market share in Mainland China. Cloud Software and Services sales decreased by SEK -3.4 billion, or -6%, to SEK 56.2 billion, with an impact of SEK -1.3 billion due to the reduced market share in Mainland China. Enterprise sales increased by SEK 1.4 billion, or 30%, to SEK 6.2 billion, driven mainly by Cradlepoint which has a higher average gross margin than the other businesses in the Enterprise segment. Group sales growth adjusted for comparable units and currency increased by 4%, while excluding Mainland China, organic sales growth was 8%.

IPR licensing revenues declined to SEK 8.1 (10.0) billion, mainly due to lower volumes with one licensee.

Networks sales growth adjusted for comparable units and currency increased by 7%. Sales growth was primarily driven by North America, Europe and Latin America. Networks accounted for 72% (71%) of Group sales.

Reported sales in Cloud Software and Services sales declined by -6% mainly due to reduced variable sales in network managed services in a large contract in North America, after the merger between two operators. Contract rescoping and planned exits also contributed to the sales decline. Cloud Software and Services accounted for 24% (26%) of Group sales.

Reported sales in Enterprise grew by 30%, primarily driven by Cradlepoint. Enterprise accounted for 3% (2%) of Group sales.

In the market area dimension, sales growth was driven by North America, and Europe and Latin America.

The sales mix by commodity was: hardware 46% (41%), software 20% (22%) and services 34% (37%).

Gross margin

Reported gross margin increased to 43.4% (40.3%). Gross margin excluding restructuring charges improved to 43.5% (40.6%) driven primarily by strengthened operational leverage in Networks.

Research and development (R&D) expenses

Reported R&D expenses increased to SEK -42.1 (-39.7) billion. R&D expenses increased in Networks and Cloud Software and Services due to increased investments in the segments’ 5G portfolios and in Enterprise as a result of the acquired Cradlepoint business.

Selling and administrative (SG&A) expenses

SG&A expenses increased to SEK -27.0 (-26.7) billion. Selling expenses increased through investments in expanding the sales force in the acquired Cradlepoint business. Revaluation of customer financing was SEK 0.4 (-0.3) billion.

Impairment losses on trade receivables

Reversal of impairment losses on trade receivables was SEK 0.0 (0.1) billion.

6

Other operating income and expenses

Other operating income and expenses was SEK 0.4 (0.7) billion. Share in earnings of JVs and associated companies was SEK -0.3 (-0.3) billion.

Restructuring charges

Restructuring charges decreased to SEK -0.5 (-1.3) billion. Restructuring charges in 2021 were mainly related to Mainland China.

Earning before financial items and income taxes (EBIT)

Reported EBIT improved to SEK 31.8 (27.8) billion with an EBIT margin of 13.7% (12.0%). EBIT excluding restructuring charges improved to SEK 32.3 (29.1) billion with an EBIT margin excluding restructuring charges of 13.9% (12.5%). The improvement was driven by improved gross income in segment Networks.

Net income

Net income improved to SEK 23.0 (17.6) billion, driven by improved EBIT and lower reported taxes. Earnings per share (EPS) diluted was SEK 6.81 (5.26) and Adjusted EPS was SEK 7.26 (5.83).

EBITA

EBITA improved to SEK 33.3 (29.0) billion with an EBITA margin of 14.3% (12.5%). EBITA excluding restructuring charges increased to SEK 33.8 (30.3) billion corresponding to an EBITA margin excluding restructuring charges of 14.6% (13.1%).

Financial income and expenses, net

Financial income and expenses, net declined to SEK -2.5 (-0.6) billion, mainly due to impact from the currency hedge. The currency hedge effect impacted financial income and expenses, net by SEK -0.8 (1.0) billion. The USD strengthened against the SEK between December 31, 2020 (SEK/USD rate 8.19) and December 31, 2021 (SEK/USD rate 9.05).

Taxes

Taxes were SEK -6.3 (-9.6) billion, positively impacted by utilization of impaired withholding tax assets in Sweden. The effective tax rate in 2021 was 21%, while the effective 2020 tax rate was approximately 35%. Effective tax rate excluding utilization of impaired withholding tax assets in Sweden would have been 25%.

Employees

The number of employees on December 31, 2021 was 101,322, an increase of 498 employees compared with December 31, 2020. In Research and Development, the number of employees increased by 1,210.

Cash flow

Cash flow from operating activities

Reported cash flow from operating activities was SEK 39.1 (28.9) billion. The improvement was attributed to both improved EBIT and decreased operating net assets. Cash flow from operating activities in 2020 was impacted by payments of SEK -3.0 billion into the Swedish Pension Trust. Operating net assets decreased for the full year with a positive impact on cash flow from operating activities of SEK 4.0 billion. Key movements include a negative impact of SEK -5.6 billion related to an increase in inventory, mainly driven by the decision to strengthen the supply chain resilience within Networks. The negative impact was partly offset by a positive impact of SEK 1.4 billion from an increase in trade payables. Cash flow from operating activities was also positively impacted by SEK 4.0 billion from an increase in contract liabilities. Provisions of SEK 4.2 (4.0) billion were utilized, of which SEK 0.8 (0.8) billion related to restructuring charges. Taxes paid were SEK -4.1 billion.

Accounts receivable days of sales outstanding increased to 71 (69) days and working capital days were stable at 65 (65) days.

Free cash flow

Free cash flow before M&A was SEK 32.1 (22.3) billion, or 13.8% (9.6%), in relation to net sales, compared with the long-term target of 9-12%. Capex net and other investing activities were SEK -4.6 (-4.3) billion. Repayment of lease liabilities was SEK -2.4 (-2.4) billion. There were few M&A transactions settled in 2021, and free cash flow after M&A was SEK 32.1 (12.7) billion.

Cash flow from investing activities

Reported cash flow from investing activities was SEK -19.9 (-15.2) billion as a result of purchases of interest-bearing securities.

Cash flow from financing activities

Reported cash flow from financing activities was SEK -9.3 (-12.5) billion including repayment of lease liabilities. During the year, dividends of SEK -6.9 (-6.0) billion were paid to shareholders and the net impact on cash flow from issuance and repayment of long-term debt was SEK 2.1 billion.

Financial position

Gross cash was SEK 97.6 (72.0) billion as a result of the positive free cash flow from operating activities and a SEK 2.6 billion loan with the European Investment Bank (EIB), partly offset by SEK -6.9 (-6.0) billion of dividends paid to shareholders. Net cash was SEK 65.8 (41.9) billion.

Liabilities for post-employment benefits decreased to SEK 36.1 (37.4) billion, primarily due to positive asset returns. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liability for post-employment benefits would have been approximately SEK 17.3 billion (SEK 18.8 billion lower than current DBO).

The average maturity of long-term borrowings was 3.5 years as of December 31, 2021, an increase from 2.7 years 12 months earlier. In March 2021, Ericsson repaid its EUR -0.5 billion (SEK -5.1 billion) bond, and in May 2021, Ericsson issued a EUR 0.5 billion (SEK 5.0 billion) senior unsecured eight-year bond.

In September 2021, Ericsson renewed its existing USD 2.0 billion revolving credit facility, linked to two of Ericsson’s long-term sustainability goals. The facility has a five-year tenure with two one-year extension options and is undrawn.

Standard & Poor’s and Fitch have a long-term BBB- rating on Ericsson with stable outlook. Moody’s has a Ba1 rating with stable outlook.

The capital turnover decreased to 1.3 (1.4) times, while Return on capital employed (ROCE) improved to 18.4% (17.0%) driven by improved EBIT.

Research and development, patents and licensing

In 2021, R&D expenses amounted to SEK -42.1 (-39.7) billion. R&D expenses were impacted by SEK -0.1 (-0.4) billion of restructuring charges. The number of R&D resources increased to 27,379 (26,169) and the number of patents continued to increase and amounted to more than 60,000 (57,000) granted patents by end of 2021.

Seasonality

The Company’s sales, income and cash flow from operating activities vary between quarters and are generally lowest in the first quarter of the year and highest in the fourth quarter. This is mainly a result of the seasonal purchase patterns of telecom operators.

Off-balance sheet arrangements

There were no off-balance sheet arrangements that have, or would be reasonably likely to have, a current or anticipated material effect on the Company’s financial condition, revenues, expenses, result of operations, liquidity, capital expenditures or capital resources.

7

Capital expenditures

For 2021, capital expenditures were SEK 3.7 (4.5) billion, representing 1.6% of sales. Expenditures are largely related to test sites and equipment for R&D, network operation centers and manufacturing and repair operations.

Annual capital expenditures are normally around 2% of sales. This corresponds to the needs for keeping and maintaining the current capacity level. The Board of Directors reviews the Company’s investment plans and proposals. As of December 31, 2021, no material land, buildings, machinery or equipment were pledged as collateral for outstanding indebtedness.

Capitalized development expenses

Capitalized development expenses increased to SEK -1.0 (-0.8) billion due to 5G development projects. The net effect on operating income of capitalized and amortized development expenses was SEK -0.1 (0.2) billion.

Business results – Segments

Networks

Networks represented 72% (71%) of Group net sales in 2021. Networks offers multi-technology capable Radio Access Network (RAN) solutions for all network spectrum bands, including integrated high-performing hardware and software. The offering also includes a cloud-native RAN portfolio, a transport portfolio, passive and active antenna solutions and a complete service portfolio covering network deployment and support.

Net sales

Reported sales increased by 1% in 2021 to SEK 167.8 (166.0) billion. Growth was driven primarily by increased product sales as a result of continued market share gains. Sales growth adjusted for comparable units and currency increased by 7%. Sales growth was underpinned by increased sales in North America and in Europe and Latin America as well as in some North East Asian markets. Sales declined by SEK -6.4 billion year-over-year in Mainland China, impacting the growth rate adjusted for comparable units and currency by -4 percentage points.

Gross margin

Reported gross margin increased to 47.0% (43.6%), as a result of continued strengthening of operational leverage and a higher share of product revenues in the sales mix.

EBIT

Reported EBIT increased to SEK 37.3 (30.9) billion with an increase in EBIT margin to 22.2% (18.6%). EBIT excluding restructuring charges improved to SEK 37.5 (31.6) billion with an EBIT margin excluding restructuring charges of 22.4% (19.0%) driven by sales growth and improved gross margin. R&D investments in the 5G portfolio increased during the year, while selling and administrative expenses decreased.

Cloud Software and Services

Cloud Software and Services represented 24% (26%) of Group net sales in 2021. Cloud Software and Services provides solutions for core networks, business and operational support systems, network design and optimization, and network managed services. The focus is to enable communications service providers to succeed in their transition to cloud native, intelligent and automated networks and operations.

Net sales

Reported sales decreased by -6% to SEK 56.2 (59.6) billion in 2021, mainly due to reduced variable sales in network managed services in a large contract in North America, after the merger between two operators. Sales in Mainland China decreased by SEK -1.3 billion year-over-year.

Gross margin

Reported gross margin increased to 33.5% (32.7%), while gross margin excluding restructuring charges increased to 33.9% (33.2%), mainly as a result of efficiency gains, partially offset by the negative impact of initial 5G Core deployment costs.

EBIT (loss) Reported EBIT (loss) was SEK -2.2 (-0.8) billion. EBIT excluding restructuring charges was SEK -2.0 (-0.5) billion.

Enterprise

Segment Enterprise represented 3% (2%) of Group net sales in 2021. The segment comprises of three Business Areas offering solutions primarily to Enterprise: Global Communications Platform (Vonage) including cloud-based Unified Communications as a Service (UCaaS), Contact Center as a Service (CCaaS) and Communications Platform as a Service (CPaaS); Enterprise Wireless Solutions including private wireless networks and wireless WAN (Cradlepoint) pre-packaged solutions; Technologies and New Businesses including mobile financial services, security solutions and advertising services.

Net sales

Reported sales increased by 30% to SEK 6.2 (4.8) billion, driven by the acquired Cradlepoint business. Cradlepoint saw increasing demand for the 5G portfolio during the year. Reported sales and margins for Cradlepoint were in line with the acquisition plan.

Gross margin

Reported gross margin increased to 46.4% (36.9%), while gross margin excluding restructuring charges increased to 46.4% (39.8%) driven by Cradlepoint. Cradlepoint has a higher average gross margin that the other business in the Enterprise segment.

EBIT (loss)

Reported EBIT (loss) was SEK -3.0 (-1.9), while EBIT excluding restructuring charges was SEK -2.9 (-1.7) billion driven by the acquired Cradlepoint business.

Other

Segment Other represented 1% (1%) of Group net sales in 2021. Segment Other includes media businesses as well as other non-allocated business.

Net sales

Reported sales was stable at SEK 2.0 billion.

Gross margin

Reported gross margin was 7.9% (2.4%), while gross margin excluding restructuring charges was 8.3% (3.0%).

EBIT (loss)

Reported EBIT (loss) was SEK -0.3 (-0.3) billion. The 2021 result was impacted by the Nokia settlement related to the 2019 resolution with the U.S. authorities and impairment write-off. EBIT was positively impacted by SEK 1 billion through a positive revaluation of Ericsson investments and data center divestment.

B. Liquidity and Capital Resources

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report

8

Financial highlights – Cash flow

Financial highlights – Financial position

Financial highlights – Seasonality

•

Financial highlights – Off-balance sheet arrangements

Financial highlights – Capital expenditures

Notes to the consolidated financial statements

Note B9 – Other current liabilities

Note D1—Provisions

Note D2 – Contingent liabilities

Note D4—Contractual obligations

Note F1 – Financial risk management

Note F4 – Interest-bearing liabilities

Note H3 – Statement of cash flows

See “ItemItem 8.B. Financial“Financial Information – Significant Changes” herein.

C. Research and Development, Patents and Licenses,

etc.

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Business Strategy – Creating long-term valuestrategy

Business model – Customer focus and technology leadership
Board of Director’s - Research and development, patents and licensing

Risk factors – Risks related to business activities and industry

Board of Directors’ report

Financial highlights – Research and development, patents and licensing

Ericsson has a policy of strong commitment to research and development (R&D) with substantial contributions to cutting-edge open standards and technologies, leading the development of cellular technology – from 2G to 5G and beyond. Our strong R&D investments position us to further extend our technology leadership for cost performance and sustainability. It is Ericsson’s policy to protect and capitalize on our R&D investments by creating, securing, protecting, and licensing a portfolio of patents in support of our overall business goals. Our patent portfolio comprises more than 60,000 granted patents, which are licensed globally on FRAND terms to the users of our technology. Ericsson is one of the largest contributors to O-RAN, driving the alignment between 3GPP and Open RAN and investing heavily in Cloud RAN to ensure long-term competitiveness. Within Enterprise, Ericsson is increasing investments in developing the network APIs. Other areas of focus in R&D include the capability of networks to handle gigabytes per second more efficiently, using more automation, using Artificial Intelligence to improve network performance and reducing energy consumption, while securing sustainability leadership to support customers to lower the total cost of ownership and meet net zero requirements.

Research and Development and Patent Information

   2022   2021   2020 

R&D employees

   29,304    27,379    26,169 

R&D expenses SEK bn

   47.3    42.1    39.7 

Patents

   over 60,000    over 60,000    over 57,000 

D. Trend Information

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

CEO Comment

Board of Directors’ Reportreport

Business in 20212022

Financial highlights – Seasonality

Business results – Segments

Business results – Market Areasareas

See “ItemItem 8.B. Financial“Financial Information – Significant Changes” herein.

E. Critical accounting estimates

E.
Off-Balance
Sheet Arrangements
The information set forth under the following headings of the 2021 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report
Financial highlights -
Off-balance
sheet arrangements

Notes to the consolidated financial statements

Note A1 - SignificantA2—Critical accounting policiesestimates and judgments

Note F1 – Financial Risk Management
Note D2 – Contingent liabilities
F. Tabular Disclosure of Contractual Obligations
Financial Report
Notes to the consolidated financial statements
Note D4 – Contractual obligations
6
Table of Contents

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Corporate Governance Reportreport

Members of the Board of Directors

Members of the Executive Team

Board Diversity

The table below provides certain information regarding the diversity of our board of directors. Each of the categories listed in the table has the meaning ascribed to it in NASDAQ Listing Rule 5605(f).

9

 
Board Diversity Matrix (as of 24 March, 2022)
  
Country of Principal Executive Offices: Sweden
  
Foreign Private Issuer Yes
  
Disclosure Prohibited under Home Country Law Yes
  
Total Number of Directors 13
     
   
            Female            
 
            Male            
 
          Non-Binary          
 
      Did Not Disclose      
Gender
  
Part I: Gender Identity
  
     
Directors 3 10 0 0
  
Part II: Demographic Background
  
  
Underrepresented Individual in Home Country Jurisdiction -
  
LGBTQ+ -
  
Did Not Disclose Demographic Background -
See “Item 8.B. Financial Information – Significant Changes” herein.
B. Compensation
Board Diversity Matrix (as of March 15, 2023)
Country of Principal Executive Offices: Sweden
  
Foreign Private Issuer Yes
  
Disclosure Prohibited under Home Country Law Yes
  
Total Number of Directors 11
     
  Female  Male  Non-Binary  Did Not Disclose Gender
  
Part I: Gender Identity  
     
Directors 4  7  0  0
  
Part II: Demographic Background  
  
Underrepresented Individual in Home Country Jurisdiction —  
  
LGBTQ+ —  
  
Did Not Disclose Demographic Background —  

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial report

Notes to the consolidated financial statements

Note G3 – Share-based compensation

See Item 8.B. “Financial Information – Significant Changes” herein.

B. Compensation

The information set forth under the following headings of the 2022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial report

Board of Directors’ report

Corporate governance – Remuneration

Guidelines for Remuneration to Group Management

Notes to the consolidated financial statements

Note G1 – Post-employment benefits

Note G2 – Information regarding members of the Board of Directors and Group management

Note G3 – Share-based compensation

Corporate Governance Reportreport

Remuneration to Board members

Remuneration report

Remuneration report 20212022

See “ItemItem 8.B. Financial“Financial Information – Significant Changes” herein.

C. Board Practices

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Notes to the consolidated financial statements

Note G2 – Information regarding members of the Board of Directors and Group management–management – Comments to the table

Corporate Governance Reportreport

Board of Directors – Composition of the Board of Directors and diversity

Committees of the Board of Directors – Audit and Compliance Committee

Committees of the Board of Directors – Remuneration Committee

See “ItemItem 8.B. Financial“Financial Information – Significant Changes” herein.

D. Employees

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report

Financial Highlights – Employees

Notes to the Consolidated financial statements

Note G4 – Employee Information

Five-year summary – Financial information - Statistical data,
year-end
Five-year summary –
Non-financial
information - Statistical data,
year-end
7
Table of Contents

We consider that our relationship with the labor unions that represent our employees is good.

10

Number of employees by market area at

year-end
   
2021
   
2020
   
2019
 
South East Asia, Oceania and India
   26,369    25,869    24,559 
North East Asia
   13,091    13,944    13,783 
North America
   10,344    10,175    9,643 
Europe and Latin America
1)
   47,064    46,580    47,135 
Middle East and Africa
   4,454    4,256    4,297 
   
 
 
   
 
 
   
 
 
 
Total
  
 
            101,322
 
  
 
            100,824
 
  
 
              99,417
 
   
 
 
   
 
 
   
 
 
 
1) Of which in Sweden
  
 
14,183
 
  
 
13,173
 
  
 
12,730
 

   2022   2021   2020 

South East Asia, Oceania and India

   27,761    26,369    25,869 

North East Asia

   13,207    13,091    13,944 

North America

   11,993    10,344    10,175 

Europe and Latin America 1)

   48,023    47,064    46,580 

Middle East and Africa

   4,545    4,454    4,256 
  

 

 

   

 

 

   

 

 

 

Total

   105,529    101,322    100,824 
  

 

 

   

 

 

   

 

 

 

1) Of which in Sweden

   14,481    14,183    13,173 

E. Share Ownership

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

The Ericsson share - share—Shareholders

Notes to the consolidated financial statements

Notes

Note G2 – Information regarding members of the Board of Directors and Group Managementmanagement

Corporate Governance Reportreport

Members of the Board of Directors

Members of the Executive Team

Remuneration report

Remuneration report 20212022

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

The Ericsson Share - Share—Shareholders

Corporate Governance Reportreport

Governance structure - structure—Ownership structure

B. Related Party Transactions

The information set forth under the following heading of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference.

Financial Report

Notes to the consolidated financial statements

Note H4 – Related party transactions

Note G2 – Information regarding members of the Board of Directors and Group management

C. Interests of Experts and Counsel.

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information.

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report

Legal proceedings

Parent Company – Proposed disposition of earnings

Consolidated financial statements

Notes to the consolidated financial statements

Reports of independent registered public accounting firm

Five-year summary – Financial information - Statistical data,
year-end

See “ItemItem 8.B. Financial“Financial Information – Significant Changes”, “ItemChanges,” Item 10.B. “Additional Information—Memorandum and Articles of Association – Dividends”Association” and “ItemItem 17. Financial“Financial Statements”, herein.

Refer also to item 8.B herein

B. Significant Changes

Legal proceedings
Ericsson and Apple were not able to renew

Proposals from the now expired patent license agreement between the parties in a timely manner. Nomination Committee

On January 18, 2022, Ericsson filed three complaints with the U.S. International Trade Commission (ITC) alleging infringement of 12 patents by certain Apple products. In addition, Ericsson filed companion lawsuits in the Western District of Texas alleging infringement of the same 12 patents. Also, in January 2022 Ericsson filed complaints in several jurisdictions in Europe (Germany, Netherlands, Belgium) and South America (Brazil, Colombia) alleging that certain Apple products infringe Ericsson patents. On January 19, 2022 Apple filed a complaint against Ericsson in the ITC alleging infringement of three Apple patents by certain Ericsson products. Apple also filed a complaint in Germany at the District court of Düsseldorf alleging infringement of a German utility model and another complaint at the District court of Mannheim alleging infringement of an Apple patent by certain Ericsson products. The filing of lawsuits,

8
Table of Contents
complaints and other proceedings, when parties take legal action over a patent license agreement renewal, is standard and consequently additional lawsuits, complaints and other proceedings, may follow.
Euro Medium Term Note program
On February 8, 2022, the Company issued new EUR 750 million notes under the Euro Medium Term Note (EMTN) program, with maturity in February 2027.
Vonage
In November 2021,11, 2023, Ericsson announced the entering into of an agreementNomination Committee’s proposal that the shareholders elect at the Annual General Meeting 2023 ten ordinary board members with no deputy directors. The Nomination Committee proposed that the following persons be elected as board members:

•

Jan Carlson, Chairman (re-election as director, new election as Chairman)

•

Helena Stjernholm (re-election)

•

Jacob Wallenberg (re-election)

•

Jon Fredrik Baksaas (re-election)

•

Carolina Dybeck Happe (re-election)

•

Börje Ekholm (re-election)

•

Eric A. Elzvik (re-election)

•

Kristin S. Rinne (re-election)

Christy Wyatt (new election)

Jonas Synnergren (new election)

11

In addition, the Nomination Committee informed the Company that the current chairman, Ronnie Leten, and board members Kurt Jofs and Nora Denzel had informed the Nomination Committee that they will not stand for re-election at the Annual General Meeting 2023. The Company expects to acquire Vonage Holdings Corp. for a total acquisition price of approximately USD 6.2 billion. Since then, Vonage shareholder approval has been obtainedhold its Annual General Meeting on March 29, 2023, and all requisite foreignthe Nomination Committee’s complete proposals and U.S. regulatory requirements for closing have been satisfied, except for receipt of clearance frommotivated statement are available on the Committee on Foreign Investment in the United States. If the agreement were to terminate under specified circumstances where we have failed to obtain such clearance, we may have to pay a USD 200 million termination fee to Vonage. Ericsson and Vonage continue to work toward closing this acquisition during the first half of 2022, on and subject to the terms of the merger agreement and subject to receiving regulatory approval.

Company’s website www.ericsson.com.

Update on Deferred Prosecution Agreement

On December 6,

In 2019, Ericsson entered into a Deferred Prosecution Agreementdeferred prosecution agreement (DPA) with the United States Department of Justice (DOJ). On in order to resolve past (prior to 2017) Foreign Corrupt Practices Act (FCPA) violations relating to misconduct in certain countries. The DPA provided that, in the event of any breach of its ongoing DPA obligations, the Company could be prosecuted for the historical FCPA violations covered by the DPA.

As announced in October 2021 and March 1, 2022, the DOJ informednotified Ericsson that it failed to provide certain documents and information to the disclosureDOJ in a timely manner and did not adequately report to the DOJ certain information relating to the 2019 internal Iraq investigation. The DOJ has not alleged or charged Ericsson with any new criminal misconduct since the start of the DPA.

The Company’s internal investigation and its cooperation with authorities in relation to the matters discussed in a 2019 internal Iraq investigation report remain open and ongoing. With respect to the matters described in the 2019 internal Iraq investigation report, the Company continues to thoroughly investigate the matters in full cooperation with the DOJ and the SEC.

As previously disclosed, the Company’s 2019 investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization and significant further investigation over the course of 2022 has not altered this conclusion. Since 2019, Ericsson has taken significant remedial measures, overseen by the Board of Directors. These include enhancing its group-wide approach to risk management and strengthening its compliance program and internal controls. The Company prioragreed in December 2022 to extend its independent compliance monitorship with one year, until June 2024, to further our efforts to embed best-in-class compliance, risk management and internal controls across the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient. Furthermore, it determined thatorganization. On March 2, 2023, the Company breached the DPA by failing to make subsequent disclosure related to the investigation

post-DPA.
The Company is in communicationreached a resolution (DOJ Plea Agreement) with the DOJ regarding non-criminal breaches under its DPA. Under the facts and circumstancesDOJ Plea Agreement, Ericsson will plead guilty to previously deferred charges relating to conduct prior to 2017. In addition, Ericsson has agreed to pay a fine of USD 206,728,848. The entry of the breach determination and is committed to
co-operating
with the DOJ to resolve the matter. At this stage it is premature to predict the outcome of this matter. DOJ has sole discretion underPlea Agreement will bring the DPA to determine whetheran end. In the fourth quarter of 2022, the Company made a breach has occurred.
Legal proceedings
Afterprovision of SEK 2.3 billion (approx. USD 220 million) in relation to the 2021 Swedish Annual Report was finalized on March 3, 2022, Ericsson learned that Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed in the United States District CourtDOJ Plea Agreement, including estimated expenses (SEK 0.1 billion) for the Eastern District of New York. The complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerningextended compliance monitorship.

Ericsson announces changes to the Company’s adherence with its compliance and disclosure policies and obligations and the conduct of its business in Iraq.

Ericsson appoints Scott Dresser as Chief Legal Officer
Executive Team

On March 16, 2022,January 25, 2023, Ericsson announced the appointment of Scott Dresser to the company’s Executive Teamthat Jenny Lindqvist has been appointed as Senior Vice President, Chief Legal Officer and Head of Group Function Legal AffairsMarket Area Europe & Compliance. ScottLatin America, as of February 1, 2023. Effective the same date she will become member of the Ericsson Executive Team, reporting to the CEO. Jenny Lindqvist has joineda Master of Science in Business & Economics from Stockholm School of Economics. Previous management positions within Ericsson on 21 March 2022Business Area and is basedMarket Area organizations include Head of Global Customer Unit Telia Company, Head of Solution Line Intelligent Transport Systems, Key Account Manager Telenor, Managed Services Engagement Lead and Business Manager Multimedia. Previous positions outside Ericsson include roles in management consulting in France and Sweden, as well as in Pharmaceuticals in the US. Scott Dresser replaces Xavier Dedullen,Philippines.

As a member of Ericsson’s Executive Leadership Team, Jenny Lindqvist succeeds Stefan Koetz who resigned fromhas been acting in this role as of the same date.

June 1, 2022. Stefan will take on a new role as Head of Strategic Projects for Market Area Europe & Latin America.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

The information set forth in Exhibit 2.3, “Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.”1934” is incorporated herein by reference.

B. Plan of Distribution

Not applicable.

C. Markets

The information set forth in Exhibit 2.3, “Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.”1934” is incorporated herein by reference.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not applicable.

B. Memorandum and Articles of Association

The information set forth in Exhibit 2. 3, “Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.” is incorporated herein by reference.

C. Material Contracts

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report

Material contracts

Notes to the consolidated financial statements

Note E2 – Business combinations

12

Vonage Merger Agreement

On November 22, 2021, Ericsson, Vonage Holdings Corp. (“Vonage”) and Ericsson Muon Holding Inc. (“Ericsson Muon”) entered into an Agreement and Plan of Merger (the “Vonage Merger Agreement”) providing for the acquisition of Vonage by Ericsson.

The Vonage Merger Agreement provides that, among other things, upon the terms and subject to the conditions set forth in the Vonage Merger Agreement, Ericsson Muon will merge with and into Vonage, with Vonage continuing as the surviving corporation and an indirect wholly owned subsidiary of Ericsson. Pursuant to the Vonage Merger Agreement, each share of common stock, par value $0.001 USD per share, of Vonage prior to the effective time of the merger (other than specific exceptions noted in the Vonage Merger Agreement) were converted into the right to receive $21.00 USD per share in cash, without interest.

The Vonage Merger Agreement was subject to customary representations and warranties, and customary covenants and agreements. On July 21, 2022, Ericsson completed the acquisition of Vonage through an all cash transaction for approximately $6.2 billion USD.

Cradlepoint Merger Plan Agreement

On September 18, 2020, Ericsson and Cradlepoint Inc. (“Cradlepoint”), a US company providing wireless WAN Edge 4G and 5G solutions, entered into an agreement and plan of merger (the “Cradlepoint Merger Plan Agreement”). Pursuant to the Cradlepoint Merger Plan Agreement, Ericsson acquired all of the shares of Cradlepoint, and Cradlepoint became an indirect wholly owned subsidiary of Ericsson while continuing to operate under its existing brand, for a purchase price of SEK 9.5 billion (approximately $1.1 billion USD).

The Cradlepoint Merger Plan Agreement was subject to customary representations and warranties, and customary covenants and agreements. On November 2, 2020, Ericsson completed the acquisition of Cradlepoint.

D. Exchange Controls

There is no Swedish legislation affecting the import or export of capital or the remittance of dividends, interest or other payments to

non-resident
holders of our securities, except that, subject to the provisions in any tax treaty, dividends are subject to withholding tax.
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Table of Contents

E. Taxation

General

The taxation discussion set forth below does not purport to be a complete analysis or listing of all potential tax effects relevant to the acquisition, ownership or disposition of Class B shares or ADSs. The statements of United States and Swedish tax laws set forth below are based on the laws in force as of the date of this report and may be subject to any changes in United States or Swedish law, and in any double taxation convention or treaty between the United States and Sweden, occurring after that date, which changes may then have a retroactive effect.

Specific tax provisions may apply for certain categories of taxpayers. Your tax treatment if you are a holder of Class B shares or ADSs depends in part on your particular situation. If you are a holder of Class B shares or ADSs, you should, therefore, consult a tax advisor as to the tax consequences relating to your particular circumstances resulting from the ownership of Class B shares or ADSs.

The tax consequences to holders of ADSs, as discussed below, apply equally to holders of Class B shares.

Certain Swedish Tax Considerations

This section describes the material Swedish income and net wealth tax consequences for a holder of ADSs or Class B shares who is not considered to be a Swedish resident for Swedish tax purposes. This section applies to you only if you are a holder of portfolio investments representing less than 10% of capital and votes and is not applicable if the ADSs or Class B shares pertain to a permanent establishment or fixed place of business in Sweden.

Taxation on Capital Gains

Generally,

non-residents
of Sweden are not liable for Swedish capital gains taxation with respect to the sale of ADSs or Class B shares. However, under Swedish tax law, capital gains from the sale of shares in Swedish companies and certain other securities by an individual may be taxed in Sweden at a rate of 30% if the seller has been a resident of Sweden or has lived permanently in Sweden at any time during the year of the sale or the 10 calendar years preceding the year of the sale (absent treaty provisions to the contrary). The provision is applicable to ADSs or Class B shares. From January 1, 2008, the rule has been extended so that it also applies to shares in foreign companies, provided that the shares were acquired during the time that the person was liable to tax in Sweden.

This provision may, however, be limited by tax treaties that Sweden has concluded with other countries. Under the tax treaty between Sweden and the United States (the “U.S. Tax Treaty”), this provision applies for ten years from the date the individual became a

non-resident
of Sweden.

Taxation on Dividends

A Swedish dividend withholding tax at a rate of 30% is imposed on dividends paid by a Swedish corporation, such as us, to

non-residents
of Sweden. The same withholding tax applies to certain other payments made by a Swedish corporation, including payments as a result of redemption of shares and repurchase of stock through an offer directed to its shareholders. Exemption from the withholding tax or a lower tax rate may apply by virtue of a tax treaty. Under the U.S. Tax Treaty, the withholding tax on dividends paid on portfolio investments to eligible U.S. holders is reduced to 15%.

Under all Swedish tax treaties, except the tax treaty with Switzerland, withholding tax at the applicable treaty rate should be withheld by the payer of the dividends. With regard to dividends paid from shares in corporations registered with the Euroclear Sweden (such as our shares), a reduced rate of dividend withholding tax under a tax treaty is generally applied at the source by the Euroclear Sweden or, if the shares are registered with a nominee, the nominee, as long as the person entitled to the dividend is registered as a

non-resident
and sufficient information regarding the tax residency of the beneficial owner is available to the Euroclear Sweden or the nominee.

In those cases where Swedish withholding tax is withheld at the rate of 30% and the person who received the dividends is entitled to a reduced rate of withholding tax under a tax treaty, a refund may be claimed from the Swedish tax authorities before the end of the fifth calendar year following the year that the distribution was made.

Taxation on Interest
No Swedish withholding tax is payable on interest paid to
non-residents
of Sweden.
Net Wealth Taxation
The Swedish net wealth tax has been abolished from January 1, 2007.

Certain United States Federal Income Tax Consequences

The following discussion is a summary of the material United States federal income tax consequences relevant to the ownership and disposition of ADSs or Class B shares. This discussion is based on the tax laws of the United States (including the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed U.S. Treasury regulations thereunder, published rulings and court decisions) as in effect on the date hereof, all of which are subject to change, possibly with retroactive effect. The discussion is not a full discussion of all tax considerations that may be relevant to the ownership and disposition of ADSs or Class B shares, and does not address the Medicare tax on net investment income or the effects of any state, local or foreignnon-U.S. tax laws. The discussion applies only if you will hold the ADSs and/or the Class B shares as capital assets and you use the USD as your functional currency. It does not deal with the tax treatment of investors subject to special rules, such as grantor trusts, real estate investment trusts, regulated investment companies, banks, brokers or dealers in securities or currencies, traders in securities that elect to use a

mark-to-market
method of recording for their securities holdings, financial institutions, insurance companies, persons required to accelerate the recognition of any item of gross income with respect to our ADSs or Class B shares as a result of such income being recognized on an applicable financial statement,
tax-exempt
entities, investors liable for alternative minimum tax, holders (either actually or constructively) of 10% or more of the voting power or the value of our shares, persons holding ADSs and/or Class B shares as part of a hedging, straddle, conversion or constructive sale transaction and persons who are resident or ordinarily resident in Sweden. In addition, investors holding ADSs and/or Class B shares indirectly through partnerships are subject to special rules not discussed below. You should consult your own tax advisors about the United States federal, state, local and foreignnon-U.S. tax consequences to you of the ownership and disposition of the ADSs or Class B shares.

13

The discussion below is not binding on the U.S. Internal Revenue Service (the “IRS”) or any court. Therefore, we can provide no assurance that the United States federal income tax consequences discussed below will not be challenged by the IRS or will be sustained by a court if challenged by the IRS.

The discussion below applies to you only if you are a beneficial owner of ADSs and/or Class B shares not resident in Sweden for purposes of the U.S. Tax Treaty and you are, for United States federal income tax purposes, (1) a citizen or resident of the United States, (2) a corporation or any other entity treated as a corporation that is organized in or under the laws of the United States or its political subdivisions, including the District of Columbia, (3) a trust if all of the trust’s substantial decisions are subject to the control of one or more United States persons and the primary supervision of the trust is subject to a United States court, or if a valid election is in effect with respect to the trust to be taxed as a United States person, or (4) an estate the income of which is subject to United States federal income taxation regardless of its source.

The discussion below assumes that the representations contained in the deposit agreement governing the ADSs are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with the terms. If you hold ADSs, you willare expected to be treated as the holder of the underlying Class B shares represented by those ADSs for United States federal income tax purposes.

The remainder of this discussion assumes that a holder of ADSs will be treated in this manner.

Dividends

Subject to the passive foreign investment company rules discussed below, the gross amount of dividendsdistributions paid (before reduction for any Swedish withholding taxes) with respect to the ADSs or Class B shares generally will be included in your gross income as ordinary income from foreign sources to

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the extent paid out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes). Distributions in excess of earnings and profits will be treated as a
non-taxable
return of capital to the extent of your adjusted tax basis in the ADSs or Class B shares and thereafter as capital gain. Because we do not maintain calculations of our earning and profits under United States federal income tax principles, you should expect all distributions will be reported as dividends for United States federal income tax purposes. The dividends will not be eligible for the dividends received deduction available to corporations in respect of dividends received from other U.S. corporations. The amount of any dividenddistribution paid in SEK will be the USD value of the dividenddistribution payment based on the spot rate of exchange rate in effect on the date of receipt (or constructive receipt) by you, in the case of Class B shares, or by the depositary, in the case of ADSs, whether or not the payment is converted into USD at that time. Your tax basis in the SEK received will equal such USD amount. Gain or loss, if any, recognized on a subsequent sale or conversion of the SEK will be U.S. source ordinary income or loss.

If you are a

non-corporate
holder of ADSs or Class B shares, dividends you receive on the ADSs or Class B shares may be taxed at the lower applicable long-term capital gains rate provided that (1) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend was paid or the preceding taxable year, (2) certain holding period requirements are met, (3) you are not under any obligation to make related payments with respect to substantially similar or related property and (4) either (a) in the case of ADSs our ADSs continue to be listed on the NasdaqNASDAQ Stock Market (or a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934, as amended) or (b) we are eligible for the benefits of the U.S. Tax Treaty. You should consult your own tax advisors regarding the availability of the lower rate for dividends paid with respect to ADSs or Class B shares.

Subject to certain limitations, you will generally be entitled to receive credit against your United States federal income tax liability (or a deduction against your United States federal taxable income) with respect to any Swedish tax withheld in accordance with the U.S. Tax Treaty and paid over to Sweden. If a refund of the tax withheld is available to you under the laws of Sweden or under the U.S. Tax Treaty, the amount of tax withheld that is refundable will not be eligible for such credit against your United States federal income tax liability (and will not be eligible for the deduction in computing your United States federal taxable income). For foreign tax credit limitation purposes, dividends will be income from sources without the United States, and will generally be treated as “passive category income” (or, in the case of certain holders, “general category income”).

There are significant and complex limits on your ability to claim foreign tax credits, and recently issued U.S. Treasury regulations that apply to non-U.S. income taxes paid or accrued in taxable years beginning on or after December 28, 2021 further restrict the availability of any such credit based on the nature of the withholding tax imposed by the non-U.S. jurisdiction, such as Sweden. You should consult your tax advisors regarding the creditability or deductibility of any withholding taxes.

Sale or Exchange of ADSs or Class B shares

Subject to the passive foreign investment company rules discussed below, you will generally recognize capital gain or loss on the sale or other disposition of the ADSs or Class B shares equal to the difference between the USD value of the amount realized and your adjusted tax basis (determined in USD) in the ADSs or Class B shares. Such gain or loss will generally be long-term capital gain or loss if you have held the ADSs or Class B shares for more than one year, and will generally be treated as arising from U.S. sources for foreign tax credit limitation purposes. If you are a

non-corporate
holder of ADSs or Class B Shares, long-term capital gains are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

The amount realized on a disposition of ADSs or Class B shares for cash will generally be the amount of cash you receive for the ADSs or Class B shares (which, in the case of payment in a

non-U.S.
currency, will equal the USD value of the payment received generally determined on (a) the date of receipt of payment if you are a cash basis taxpayer and (b) the date of disposition if you are an accrual basis taxpayer)disposition). If the ADSs or Class B shares are treated as traded on an “established securities market” for United States federal income tax purposes and you are a cash basis taxpayer (or, if you areor an accrual basis taxpayer if you so elect)making a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), you will determine the USD value of the amount realized by translating the amount received at the spot rate of exchange on the settlement date of the sale.
You

If you are an accrual basis taxpayer and do not make the special election, you will have a tax basis in any foreign currency received equal to the USD value thereof on the date of receipt. Anyrecognize exchange gain or loss you realizeto the extent attributable to the difference between the exchange rates on a subsequent salethe trade date and the settlement date, and such exchange gain or conversion of foreign currencyloss will be U.S. source ordinary income or loss.

Your initial tax basis in ADSs or Class B shares generally will equal the cost of such ADSs or Class B shares. If you used non-U.S. currency to purchase ADSs or Class B shares, the cost of such ADSs or Class B shares generally will be the USD value of the non-U.S. currency purchase price on the date of purchase, translated at the spot rate of exchange on that date. If ADSs or Class B shares are treated as traded on an “established securities market” for United States federal income tax purposes and you are a cash basis taxpayer or an accrual basis taxpayer making a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), you will determine the USD value of the cost of such ADSs or Class B shares by translating the amount paid at the spot rate of exchange on the settlement date of purchase.

Passive Foreign Investment Company Status

A

non-U.S.
corporation is a passive foreign investment company (a “PFIC”) in any taxable year in which, after taking into account the income and assets of certain subsidiaries, either (a) at least 75% of its gross income is passive income or (b) at least 50% of the quarterly average value of its assets is attributable to assets that produce or are held to produce passive income. For this purpose, passive income includes interest, dividends, gains from transactions in commodities (other than certain active business gains from the sale of commodities) and other investment income, with certain exceptions. The PFIC rules also contain a look-through rule whereby we will be treated as owning our proportionate share of the gross assets and earning our proportionate share of the gross income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock. Based on the market value of our shares, the composition of our assets and income and our operations, we believe we were not a PFIC during the year 2021.2022. However, whether or not we will be considered a PFIC will depend on the nature and source of our income and the composition and value of our assets, as determined from time to time. There can be no assurance that we will not be a PFIC for current or future taxable years. If we are treated as a PFIC, we will not provide information necessary for the “qualified electing fund” election as the term is defined in the relevant provisions of the Code. You should consult your own tax advisors about the consequences of our potential classification as a PFIC.

14

If we were classified as a PFIC with respect to your ADSs or Class B shares for any taxable year, we would generally continue to be a PFIC (unless certain conditions are met), and you would be subject to special rules with respect to:

any gain realized on the sale or other disposition of ADSs or Class B shares; or

any other “excess distribution” made to you (generally, any distributions to you in respect of ADSs or Class B shares during a single taxable year that are, in the aggregate, greater than 125% of the average annual distributions received by you in respect of ADSs or Class B shares during the three preceding taxable years or, if shorter, your holding period for ADSs or Class B shares).

Under these rules:

the gain or any other excess distribution would be allocated ratably over your holding period for ADSs or Class B shares;

the amount allocated to the taxable year in which the gain or excess distribution was realized and any year before we became a PFIC would be taxable as ordinary income;

the amount allocated to each prior year, other than the current year and any taxable year prior to the first taxable year in which we were a PFIC, would be subject to tax at the highest applicable marginal tax rate in effect for each such year; and

an interest charge would be imposed.

If we are a PFIC for any taxable year, you will also be deemed to own shares in any of our subsidiaries that are also PFICs in such a year. As an alternative to the special rules described above, holders of “marketable stock” in a PFIC may elect

mark-to-market
treatment with respect to their ADSs or Class B shares. ADSs or Class B shares will not be considered marketable stock unless they are regularly traded on a qualified exchange or other market. If the
mark-to-market
election is available and you elect
mark-to-market
treatment you will, in general, include as ordinary income each year an amount equal to the increase in value of your ADSs or Class B shares for that year (measured at the close of your taxable year) and will generally be allowed a deduction for any decrease in the value of your ADSs or Class B shares for the year but only to the extent of previously included
mark-to-market
income. In addition, any gain you recognize upon the sale or other disposition of the ADSs or Class B shares will be treated as ordinary income and any loss will be treated as ordinary loss but only to the extent of previously included
mark-to-market
income. Any loss in excess of previously included
mark-to-market
income will be treated as a capital loss. However, a
mark-to-market
election would likely be unavailable with respect to your proportionate share in any of our subsidiaries that are PFICs.

If you own ADSs or Class B shares during any year in which we are a PFIC, you will generally be required to make an annual return on IRS Form 8621.

Information Reporting and Backup Withholding

In general, information reporting requirements will apply to dividends paid in respect of ADSs or Class B shares and the proceeds received on the sale or exchange of the ADSs or Class B shares within the United States or by a broker with certain United States connections. Backup withholding may apply to payments to you of dividends paid in respect of ADSs or Class B shares or the proceeds of a sale or other disposition of ADSs or Class B shares if you fail to provide an accurate taxpayer identification number (certified on IRS Form W–9) or, upon request, to certify that you are not subject to backup withholding or otherwise to comply with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. The amount of any backup withholding from a

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payment to you will be allowed as a credit against your United States federal income tax liability, and a refund of any excess amount withheld under the backup withholding rules may be obtained by filing the appropriate claim for refund with the Internal Revenue Service and furnishing any required information.

Additional Reporting Requirements

Certain holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may beinclude ADSs and/or Class B shares) are required to report information relating to an interest in ADSs or Class B shares,such assets, subject to certain exceptions (including an exception for ADSs or Class B shares held in accounts maintained by certain financial institutions). HoldersSubstantial penalties can apply if you are such a holder and fail to satisfy such reporting requirements. You should consult theiryour tax advisors regarding the effects, if any, of these requirements on theiryour ownership and disposition of ADSs or Class B shares.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

Annual reports and other information are filed with, or furnished to, the SEC in the United States, pursuant to the rules and regulations that apply to foreign private issuers. Electronic access to these documents may be obtained from the SEC’s website, www.sec.gov where they are stored in the EDGAR database.

I. Subsidiary Information

See “Item 4.C. InformationItem “4.C. “Information on the Company - Company—Organizational Structure.”

J. Annual Report to Security Holders Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A. Quantitative informationInformation about market risk

Market Risk

The information set forth under the following heading of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference.

reference:

Financial Reportreport

Board of Directors’ report

Risk management

Notes to the consolidated financial statements

Note F1 – Financial risk management

15

B. Qualitative informationInformation about market risk

Market Risk

The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:

Financial Reportreport

Board of Directors’ report

Risk management

Notes to the consolidated financial statements

Note F1 – Financial risk management

Corporate Governance Reportreport

Management

Management

Risk management

C. Interim periods

Periods

Not applicable.

D. Safe harbor

Harbor

Not applicable.

E. Small business issuers

Smaller Reporting Companies

Not applicable.

16

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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

D. American Depositary Shares

Depositary fees, charges and payments

During 2021,2022, an annual service fee of $0.02 was charged per ADS, for the operation and maintenance costs in administering the ADS program. The Depositary, Deutsche Bank Trust Company Americas (“Deutsche Bank”), established October 20, 20212022 as the record date for payment of annual servicing fees. During 2021,2022, an annual dividend fee of $0.01 was charged per ADS. The Depositary, Deutsche Bank, established April 1, 2021March 31, 2022 and October 1, 2021September 30, 2022 as the record dates for payments of the dividend fee.

Fees and charges payable by ADS holders

   

Service

  

Rate

  

By whom paid

1)  
Deposit of shares and issuance of receipts
  
Up to USD 5 per 100 American Depositary Shares or fraction thereof
  
Party to whom receipts are issued
2)  
Delivery of deposited shares against surrender of receipts
  
Up to USD 5 per 100 American Depositary Shares or fraction thereof
  
Party surrendering receipts
3)  
DistributionProcessing of Cash Dividendsdistribution of cash dividends and Cash Proceeds processing
cash proceeds		  
Up to USD 3 per 100 American Depositary Shares
  
All ADS holders of American Depositary Shares
4)  
Administration of the ADSs
  
Up to USD 3 per 100 American Depositary Shares per annum
  
All ADS holders of American Depositary Shares

In addition to the fees of the Depositary enumerated above, ADS holders are required under the terms of the Deposit Agreementdeposit agreement to bear the following: (i) taxes and other governmental charges, (ii) share transfer registration fees on deposits, (iii) certain cable and facsimile transmission and delivery charges, and (iv) such expenses as are incurred by Deutsche Bank in the conversion of foreign currency into dollars.

Fees payable by the Depositary to the Issuer

Company

Effective January 2019, Deutsche Bank agreed to pay Ericsson an amount equal to a fixed percentage of the net revenues, if any, collected by it as a result of charging ADS holders issuance and cancellation fees, and dividend processing and annual servicing fees. In 2021,2022, such amount totaled approximately USD 11.611.9 million.

Effective January 2019, Deutsche Bank waived the cost of providing the ADS program administrative and reporting services to the extent provided by Deutsche Bank, and has agreed to bear the cost of certain third-party

out-of-pocket
costs related to the ADS program up to USD 50,000 per year. These costs include costs for the local custodian’s administration of matters relating to meetings of shareholders and costs of certain transfer agent administration services, such as the registration and transfer of depositary receipts. In 2021,2022, such amount totaled approximately USD 73,500.
75,000.

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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
A. Disclosure Controls and Procedures
The information set forth under the following heading of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:
 
Corporate Governance Reportreport
 
Internal control over financial reporting – Disclosure controls and procedures
B. Management’s Annual Report on Internal Control Over Financial Reporting
The information set forth under the section “Financial Reportreport – Management’s report on internal control over financial reporting” of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference.
C. Attestation Report of the Registered Public Accounting Firm
The information set forth under the section “Financial Reportreport – Report of independent registered public accounting firm” of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference.
D. Changes in Internal Control Over Financial Reporting
The information set forth under the following headingsection “Financial report – Management’s report on internal control over financial reporting – Changes in internal control over financial reporting” of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:reference.
Corporate Governance Report
Internal control over financial reporting – Internal control over financial reporting
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The information set forth under the following heading of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:
 
Corporate Governance Reportreport
 
Committees of the Board of Directors
 
Audit and Compliance Committee – Members of the Audit and Compliance Committee
ITEM 16B. CODE OF ETHICS
We have adopted a Code of Business Ethics applicable to executive officers, directors and all other employees. Our Code of Business Ethics is available on our website at
https://www.ericsson.com/en/about-us/corporate-governance/code-of-ethics
. The Company will promptly disclose to our shareholders, if required by applicable laws or stock exchange requirements, any amendments to or waivers from the Code of Business Ethics applicable to our directors or officers by posting such information on our website at
https://www.ericsson.com/en/about-us/corporate-governance/code-of-ethics
.
The information set forth under the following headings of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference:
 
Corporate Governance Reportreport
 
Regulation and Compliance – Code of business ethicsEthics & Compliance Program
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information set forth under the Section “Financial Report - Report—Notes to the consolidated financial statements - statements—Note H5 – Fees to auditors” of the 20212022 Swedish Annual Report (adjusted version) is incorporated herein by reference.
Audit and Compliance Committee
Pre-Approval
Policies and Procedures
The Audit and Compliance Committee reviews and approves the scope and execution of audits to be performed by external and internal auditors and analyzes their resultsthe result and costs.costs of the audits performed. The Audit and Compliance Committee keeps the Board of Directors informed aboutregarding the external and internal audit results, the reliability of the Company’s financial reporting and the auditors’ performance. It also makes recommendations to the Nomination Committee regarding the appointment of the external auditor’s electionauditor by the Annual General Meeting and fees.auditor remuneration. In order to ensure the external auditor’s independence, the Audit and Compliance Committee has established
pre-approval
policies and procedures for audit and
non-audit
related services to be performed by the external auditor.
Pre-approval
authority may not be delegated to management. The policies and procedures include a list of prohibited services, and audit and
non-audit
services that require
pre-approval
by the Audit and Compliance Committee. Such services fall into two broad categories:
 
General
pre-approval
– certain services regarding taxes, transactions, risk management, business improvement, attestation and accounting services and the so called
so-called
general services (other than prohibited services) have received general
pre-approval
by the Audit and Compliance Committee, provided that the estimated fee for each project does not exceed SEK 1 million. In addition,
non-audit
services provided to the Group shall not exceed 70% of the average of the fees paid in the last three consecutive financial years for the statutory audits of the Group. The external auditor must advise the Audit and Compliance Committee with a quarterly summary of ongoing projects related to audit and
non-audit
services and an annual report of fees and expenses for all audit and
non-audit
services.
 
Specific
pre-approval
– all other
non-audit
services and services subject to general
pre-approval
exceeding SEK 1 million must receive specific
pre-approval.
The external auditor submits an application in writing to the Parent Company for final approval by the Audit and Compliance Committee, including a statement as to whether, in the view of the external auditor, the contemplated services are consistent with applicable rules on their independence. The Audit and Compliance Committee Chairman has the delegated authority for specific
pre-approval
in between Committee meetings, provided that the estimated fee in each case does not exceed SEK 2.5 million. The Chairman reports any
pre-approval
to the Audit and Compliance Committee at its next meeting.
All services provided in 20212022 by the independent auditors were
pre-approved
in accordance with the
pre-approval
policies and procedures described above.
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ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
All members of the Audit Committee of a NASDAQ New York-listed company must be independent in accordance with NASDAQ New York and SEC rules. SEC Rule
10A-3(b)(1)(iv)(C)
under the Exchange Act includes a specific exemption from these independence requirements for Audit Committee
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members of foreign private issuers who are
non-executive
employee representatives appointed to the Audit Committee pursuant to local law. The Company relies on this exemption, and does not consider that such reliance materially adversely affects the ability of the Audit and Compliance Committee to act independently or to satisfy other SEC requirements applicable to Audit Committees.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
Ericsson, as a company whose shares are listed on NASDAQ New York, is subject to the listing requirements and certain of the corporate governance requirements of NASDAQ New York and to certain rules of the SEC.
Under NASDAQ New York rules, all members of the audit committee of a NASDAQ New York- listed company must be independent in accordance with SEC rules. SEC rules include a specific exemption from these independence requirements for an employee of a foreign private issuer who is not an executive officer if the employee is elected or named to the board of directors or audit committee pursuant to the issuer’s governing law or documents, or other home country legal or listing requirements
.
The Company relies on this exemption and does not consider that such reliance materially adversely affects the ability of the Audit and Compliance Committee to act independently or to satisfy other SEC requirements applicable to audit committees.
Under NASDAQ New York rules, Ericsson is permitted to follow home country practices in lieu of certain NASDAQ corporate governance requirements that would apply to US companies listed on NASDAQ New York. The rules require disclosures regarding the ways in which Ericsson’s corporate governance practices differ from those required of US companies under the rules of NASDAQ New York.
These differences include the following:
 
Employee representatives are appointed to Ericsson’s Board of Directors and serve on Committees (including the Audit and Compliance Committee and the Remuneration Committee) in accordance with Swedish law.
 
Employee representatives on the Ericsson Board and committees may attend all meetings of the Board and committees on which they serve (including those of the Audit and Compliance Committee and the Remuneration Committee) in accordance with Swedish law.
 
In accordance with Swedish market practices, the Nomination Committee is not fully comprised of Board members. In addition to the Chair of the Board, representatives of the four largest shareholders are members of the current Nomination Committee of Ericsson.
 
The determination regarding independence of Board members is made by the Nomination Committee (instead of the Board) prior to the Annual General Meeting of Shareholders (“AGM”). Before the AGM 2021,2022, the Nomination Committee determined that the following Board members were independent under all applicable independence requirements, including the NASDAQ New York rules: Jon Fredrik Baksaas, Jan Carlson, Nora Denzel, Carolina Dybeck Happe, Eric A. Elzvik, Kurt Jofs and Kristin S. Rinne. When appointing members to the committees of the Board, the Board makes determinations regarding committee member independence.
 
The Board holds
non-executive
directors’ sessions but does not have regularly scheduled meetings with only independent directors present.
 
Under applicable Swedish rules, Ericsson is not required to publicly disclose the material terms of all agreements and arrangements between its directors or nominees for director and any person or entity (other than Ericsson) relating to compensation or other payment in connection with such person’s candidacy or service as a director of the company.
 
The external auditor is elected by the shareholders and is proposed by the Nomination Committee upon recommendation from the Audit and Compliance Committee.
 
NASDAQ New York rules applicable to US companies require the consideration of six factors relating to the independence of compensation consultants, legal counsel or other advisers retained by compensation or remuneration committees. Consistent with Swedish practices, the Remuneration Committee’s procedures addressing independence of advisers do not expressly require the consideration of those six factors.
 
Ericsson does not solicit proxies for shareholder meetings, which is in accordance with Swedish practices and rules. However, the Board may collect proxies in accordance with the Articles of Association.
 
There are no minimum quorum requirements for shareholder meetings under Swedish law, except under certain limited circumstances. Certain resolutions requiring special quorums and majorities are described under Memorandum and Articles of Association.Exhibit 2.3.
 
Some of the requirements addressed by NASDAQ New York rules are included in the Swedish Corporate Governance Code or the work procedure for the Board instead of committee charters. The work procedure establishes the attribution of various responsibilities among the Board, its committees and the President and CEO. The work procedure for the Board is reviewed, evaluated and amended as required or appropriate, and adopted by the Board at least once a year.
See “Item 8.B. Financial Information – Significant Changes” herein.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 17. FINANCIAL STATEMENTS
See our consolidated financial statements and accompanying notes of the 20212022 Swedish Annual Report (adjusted version).
 
Consolidated income statement and Consolidated statement of comprehensive income (loss)
 
Consolidated balance sheet
 
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Consolidated statement of cash flows
 
Consolidated statement of changes in equity
 
Notes to the consolidated financial statements
 
Reports of independent registered public accounting firm (Deloitte PCAOB Id: 1126 ; PwC PCAOB Id: 1419)ID: 1126)
ITEM 18. FINANCIAL STATEMENTS
Not applicable.
ITEM 19. EXHIBITS
 
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EXHIBIT INDEX

The agreements and other documents filed as exhibits to this 20212022 Form

20-F
are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by the registrant in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Securities Exhibit

Exhibit

Number

 
Description
1
 
Articles of Association of Telefonaktiebolaget LM Ericsson (amended March 2021)
2.1
 
Second Amended and Restated Deposit Agreement Among Telefonaktiebolaget LM Ericsson (publ) and Deutsche Bank Trust Company Americas, as depositary, and holders of American Depositary Receipts, dated as of January 7, 2014 (incorporated herein by reference to Exhibit 2 to the Annual Report on Form 20-F for the year ended December 31, 2014 filed by the registrant on March 31, 2015 (File No. 000-12033))
2.2
 
Amendment No. 1, dated as of October 24, 2016, to the Second Amended and Restated Deposit Agreement Among Telefonaktiebolaget LM Ericsson (publ) and Deutsche Bank Trust Company Americas, as depositary, and holders of American Depositary Receipts, dated as of January 7, 2014 (incorporated herein by reference to Exhibit 2.2 to the Annual Report on Form 20-F for the year ended December 31, 2016 filed by the registrant on April 26, 2017 (File No. 000-12033))
2.3
 
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
4.1
2.4		 
Specimen certificate representing Non-restricted B Shares of the Company (incorporated herein by reference to Exhibit 4.1 to the registrant’s Registration Statement on Form F-1 (File No. 2-82969)).
4.1Agreement and plan of merger among Vonage Holdings Corp. and Telefonaktiebolaget LM Ericsson, dated as of November 22, 2021. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on November 22, 2021 by Vonage Holdings Corp. (File No: 001-32887))
6
4.2		 See “Financials – NotesEricsson Share Purchase Plan (incorporated herein by reference to Exhibit 4.2 to the consolidated financial statements – Note A1—Significant accounting policies” ofRegistration Statement on Form S-8 filed by the 2021 Swedish Annual Report (adjusted version)registrant on January 10, 2022 (File No. 333-262071))
7
8		 For definitions of certain ratios used in this report, see the section of the 2021 Swedish Annual Report (adjusted version) entitled “Financial Terminology”See Item 4.C. Organizational Structure
8
12.1		 See Item 4.C. Organizational Structure
11
Code of Ethics (amended June 2021, available on our website at
https://www.ericsson.com/en/about-us/corporate-governance/code-of-ethics)
12.1
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2
 
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*
 
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2*
 
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1**
 
Swedish Annual Report for 20212022 in English (adjusted version)
15.2
 
Consent of Deloitte AB
15.3
Consent of PricewaterhouseCoopers AB
101**
*		 XBRL Instance Document and related items

21

17

Table of Contents

Exhibit

Number

 
Description
101.INS***
 Inline XBRL Instance Document. TheDocument -The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH***
 Inline XBRL Taxonomy Extension Schema Document.
101.CAL***
 Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF***
 Inline XBRL Taxonomy Definition Linkbase Document.
101.LAB***
 Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE***
 Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
 Cover Page Interactive Data File (embedded within the inline XBRL document).

*

This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. §78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

**

Certain of the information included in Exhibit 15.1 is incorporated by reference into this 20212022 Form

20-F,
as specified elsewhere in this report, in accordance with Rule
12b-23(a)(3)
of the Securities Exchange Act of 1934, as amended. With the exception of the items so specified, the 20202021 Swedish Annual Report is not deemed to be filed as part of this 20212022 Form
20-F.

***

In accordance with Rule 406T(b)(2) of Regulation

S-T,
such XBRL information will be furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, will be deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise will not be subject to liability under those sections.

22

18
Table of Contents

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form

20-F
and that it has duly caused and authorized the undersigned to sign this Annual Report on Form
20-F
on its behalf.

TELEFONAKTIEBOLAGET LM ERICSSON
By: 
/s/ JONAS STRINGBERG
STEFAN SALENTIN
Name: Jonas StringbergStefan Salentin
Title: Head of Group Controlling and External Reporting

By: 
/s/ CARL MELLANDER
Name: Carl Mellander
Title: ExecutiveSenior Vice President and Chief Financial Officer

Date March 2

5
, 202215, 2023

23

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