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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
October 15, 2024
Commission File Number 000-12033
LM ERICSSON TELEPHONE COMPANY
(Translation of registrant’s name into English)
Torshamnsgatan 21, Kista
SE-164 83, Stockholm, Sweden
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Announcement of LM Ericsson Telephone Company, October 15, 2024 regarding “Third quarter report 2024”
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TELEFONAKTIEBOLAGET LM ERICSSON (publ) | ||
| By: | /s/ STELLA MEDLICOTT | |
| Stella Medlicott | ||
| Senior Vice President, | ||
| Chief Marketing and Communications Officer | ||
| By: | /s/ LARS SANDSTRÖM | |
| Lars Sandström | ||
| Senior Vice President, Chief Financial Officer | ||
Date: October 15, 2024
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Third quarter report 2024
Strategic highlights – solid progress on both strategic and operational priorities
| • | Increased momentum in programmable networks, mobile network contract wins in multiple markets. |
| • | Global supply of Network APIs secured with JV agreed between leading mobile network operators and Ericsson. |
| • | Further 5G patent licensing agreement signed in Q3, IPR revenues expected to reach at least SEK 13 b. in 2024. |
Financial highlights – strong growth in North America and continued gross margin expansion
| • | Sales declined by -1%* YoY, with strong growth in market area North America of 55%* offset by declines in most other market areas. Reported sales were SEK 61.8 (64.5) b. |
| • | Adjusted1 gross income increased to SEK 28.6 (25.3) b. driven by a strong expansion in Networks adjusted1 gross margin to 48.7% (39.9%). Reported gross income was SEK 28.2 (24.7) b. |
| • | Adjusted1 gross margin was 46.3% (39.2%) mainly due to market mix, commercial discipline, and cost actions. A customer settlement and increased IPR revenues also contributed. Reported gross margin was 45.6% (38.4%). |
| • | Adjusted1 EBITA was SEK 7.8 (4.7) b. with a 12.6% (7.3%) margin, benefiting from higher gross income and cost reduction actions, partly offset by targeted investments in R&D. EBITA was SEK 6.2 (3.8) b. |
| • | Net income was SEK 3.9 (-30.5) b. EPS diluted was SEK 1.14 (-9.21). |
| • | Free cash flow before M&A was SEK 12.9 (-0.5) b. benefiting from strong inventory management and market mix. |
Börje Ekholm, President and CEO, said: “Q3 marks a period of laser-focus on execution of our strategic plan. We see increasing customer momentum around programmable networks that deliver differentiated performance, and expect further traction, supported by the JV we have announced with 12 of the world’s largest telecom operators. The JV will aggregate network APIs, accelerating commercialization and generating new opportunities for network monetization.
We see signs that the overall market is stabilizing with North America, as an early adopter market, returning to growth. While the market development is ultimately in the hands of our customers, we are working to deliver operational excellence regardless of market conditions. Our Q3 results demonstrate our progress, with strong gross margin expansion and free cash flow, benefiting from our commercial discipline and operational efficiency actions.
We expect our Networks sales to stabilize year-on-year during Q4, driven by continued good growth in North America. However, we anticipate further near-term sales pressure in Enterprise as we focus on profitable segments. We launched a new private 5G enterprise product portfolio in Q3 to support performance improvement, which remains a key priority.”
SEK b. | Q3 2024 | Q3 2023 | YoY change | Q2 2024 | QoQ change | Jan-Sep 2024 | Jan-Sep 2023 | YoY change | ||||||||||||||||||||||||
Net sales | 61.8 | 64.5 | -4 | % | 59.8 | 3 | % | 175.0 | 191.5 | -9 | % | |||||||||||||||||||||
Organic sales growth ² | — | — | -1 | % | — | — | — | — | -7 | % | ||||||||||||||||||||||
Gross margin ² | 45.6 | % | 38.4 | % | — | 43.1 | % | — | 43.8 | % | 38.1 | % | — | |||||||||||||||||||
EBIT (loss) | 5.8 | -28.9 | — | -13.5 | — | -3.6 | -26.2 | — | ||||||||||||||||||||||||
EBIT margin ² | 9.3 | % | -44.8 | % | — | -22.6 | % | — | -2.1 | % | -13.7 | % | — | |||||||||||||||||||
EBITA ² | 6.2 | 3.8 | 62 | % | 2.4 | 156 | % | 13.5 | 8.2 | 65 | % | |||||||||||||||||||||
EBITA margin ² | 10.0 | % | 5.9 | % | — | 4.1 | % | — | 7.7 | % | 4.3 | % | — | |||||||||||||||||||
Net income (loss) | 3.9 | -30.5 | — | -11.0 | — | -4.5 | -29.5 | — | ||||||||||||||||||||||||
EPS diluted, SEK | 1.14 | -9.21 | — | -3.34 | — | -1.43 | -8.96 | — | ||||||||||||||||||||||||
Free cash flow before M&A ² | 12.9 | -0.5 | — | 7.6 | 70 | % | 24.2 | -13.5 | — | |||||||||||||||||||||||
Net cash, end of period ² | 25.5 | 1.6 | — | 13.1 | 94 | % | 25.5 | 1.6 | — | |||||||||||||||||||||||
| Adjusted financial measures ² | ||||||||||||||||||||||||||||||||
Adjusted gross margin | 46.3 | % | 39.2 | % | — | 43.9 | % | — | 44.4 | % | 39.1 | % | — | |||||||||||||||||||
Adjusted EBIT (loss) | 7.3 | -28.0 | — | -11.9 | — | -0.3 | -21.2 | — | ||||||||||||||||||||||||
Adjusted EBIT margin | 11.9 | % | -43.5 | % | — | -19.9 | % | — | -0.1 | % | -11.1 | % | — | |||||||||||||||||||
Adjusted EBIT excluding impairments ³ | 7.3 | 3.9 | 88 | % | 3.2 | 127 | % | 14.9 | 10.7 | 38 | % | |||||||||||||||||||||
Adjusted EBIT margin excluding impairments ³ | 11.9 | % | 6.0 | % | — | 5.4 | % | — | 8.5 | % | 5.6 | % | — | |||||||||||||||||||
Adjusted EBITA | 7.8 | 4.7 | 64 | % | 4.1 | 91 | % | 16.9 | 13.2 | 28 | % | |||||||||||||||||||||
Adjusted EBITA margin | 12.6 | % | 7.3 | % | — | 6.8 | % | — | 9.7 | % | 6.9 | % | — | |||||||||||||||||||
| * | Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations. |
| 1 | Adjusted metrics exclude restructuring charges. |
| 2 | Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statement. |
| 3 | Excluding the non-cash impairment recorded in the second quarter 2024, relating to the impairment of intangible assets mainly attributed to the Vonage acquisition. |
| 1 Ericsson | Third quarter report 2024. October 15, 2024. | ||
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Amounts marked with an ‘*’ in this document represent sales growth adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations, also named organic sales growth. These numbers present performance on a comparable basis to improve the comparability of results between periods. Organic sales growth figures are non-IFRS measures. ‘Adjusted’ metrics are adjusted to exclude restructuring charges and are non-IFRS measures. This is a change in nomenclature only. See ‘Financial statements and other information’ for Alternative performance measures.
Group results
SEK b. | Q3 2024 | Q3 2023 | YoY change | Q2 2024 | QoQ change | Jan-Sep 2024 | Jan-Sep 2023 | YoY change | ||||||||||||||||||||||||
Net sales | 61.8 | 64.5 | -4 | % | 59.8 | 3 | % | 175.0 | 191.5 | -9 | % | |||||||||||||||||||||
Organic sales growth ¹ | — | — | -1 | % | — | — | — | — | -7 | % | ||||||||||||||||||||||
Gross income | 28.2 | 24.7 | 14 | % | 25.8 | 9 | % | 76.7 | 73.0 | 5 | % | |||||||||||||||||||||
Gross margin | 45.6 | % | 38.4 | % | — | 43.1 | % | — | 43.8 | % | 38.1 | % | — | |||||||||||||||||||
Research and development (R&D) expenses | -13.1 | -11.9 | — | -14.9 | — | -39.6 | -37.6 | — | ||||||||||||||||||||||||
Selling and administrative expenses | -9.4 | -9.6 | — | -23.1 | — | -41.1 | -29.4 | — | ||||||||||||||||||||||||
Impairment losses on trade receivables | 0.1 | -0.1 | — | -0.1 | — | -0.3 | -0.5 | — | ||||||||||||||||||||||||
Other operating income and expenses | 0.0 | -32.0 | — | -1.3 | — | 0.7 | -31.7 | — | ||||||||||||||||||||||||
Share in earnings of JV´s and associated companies | 0.0 | 0.0 | 13 | % | 0.0 | -45 | % | 0.1 | 0.1 | -11 | % | |||||||||||||||||||||
EBIT (loss) | 5.8 | -28.9 | — | -13.5 | — | -3.6 | -26.2 | — | ||||||||||||||||||||||||
EBIT margin ¹ | 9.3 | % | -44.8 | % | — | -22.6 | % | — | -2.1 | % | -13.7 | % | — | |||||||||||||||||||
EBITA ¹ | 6.2 | 3.8 | 62 | % | 2.4 | 156 | % | 13.5 | 8.2 | 65 | % | |||||||||||||||||||||
EBITA margin ¹ | 10.0 | % | 5.9 | % | — | 4.1 | % | — | 7.7 | % | 4.3 | % | — | |||||||||||||||||||
Financial income and expenses, net | -0.5 | -0.7 | — | -0.4 | — | -1.3 | -2.1 | — | ||||||||||||||||||||||||
Income tax | -1.4 | -0.9 | — | 2.9 | — | 0.5 | -1.3 | — | ||||||||||||||||||||||||
Net income (loss) | 3.9 | -30.5 | — | -11.0 | — | -4.5 | -29.5 | — | ||||||||||||||||||||||||
Restructuring charges | -1.6 | -0.9 | — | -1.6 | — | -3.4 | -5.0 | — | ||||||||||||||||||||||||
Adjusted financial measures ¹ | ||||||||||||||||||||||||||||||||
Adjusted gross margin | 46.3 | % | 39.2 | % | — | 43.9 | % | — | 44.4 | % | 39.1 | % | — | |||||||||||||||||||
Adjusted EBIT (loss) | 7.3 | -28.0 | — | -11.9 | — | -0.3 | -21.2 | — | ||||||||||||||||||||||||
Adjusted EBIT margin | 11.9 | % | -43.5 | % | — | -19.9 | % | — | -0.1 | % | -11.1 | % | — | |||||||||||||||||||
Adjusted EBIT excluding impairments ² | 7.3 | 3.9 | 88 | % | 3.2 | 127 | % | 14.9 | 10.7 | 38 | % | |||||||||||||||||||||
Adjusted EBIT margin excluding impairments ² | 11.9 | % | 6.0 | % | — | 5.4 | % | — | 8.5 | % | 5.6 | % | — | |||||||||||||||||||
Adjusted EBITA | 7.8 | 4.7 | 64 | % | 4.1 | 91 | % | 16.9 | 13.2 | 28 | % | |||||||||||||||||||||
Adjusted EBITA margin | 12.6 | % | 7.3 | % | — | 6.8 | % | — | 9.7 | % | 6.9 | % | — | |||||||||||||||||||
| 1 | Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
| 2 | Excluding the non-cash impairment recorded in the second quarter 2024, relating to the impairment of intangible assets mainly attributed to the Vonage acquisition. |
Net sales
Sales declined by -1%* YoY, with Networks as well as Cloud Software and Services reporting a -1%* decrease. In Networks, strong growth in market area North America was offset by lower customer investment levels in other markets. Sales in segment Enterprise declined by -3%* due to lower sales in Global Communications Platform.
Reported Group sales decreased by -4% YoY, to SEK 61.8 (64.5) b.
A new 5G patent licensing agreement was signed in the quarter and IPR licensing revenues increased to SEK 3.5 (2.8) b., part of which related to retroactive revenue for unlicensed periods. 82% of IPR licensing revenues are reported in segment Networks, with the remainder in Cloud Software and Services.
Gross income and margin
Adjusted gross margin increased to 46.3% (39.2%). The increase was driven primarily by improved gross margin in Networks, resulting from a favorable market mix, cost-reduction actions and a competitive portfolio offering. Gross margin also increased in Cloud Software and Services, and in Enterprise, benefiting from cost-reduction actions and the prioritization of profitable market segments. In addition, gross margin was supported by higher IPR licensing revenues and a non-recurring benefit from a settlement of outstanding customer accounts receivable, as described in the Q2 2024 report. Adjusted gross income increased to SEK 28.6 (25.3) b., with the strong increase in gross margin partly offset by lower sales.
Reported gross income increased to SEK 28.2 (24.7) b., with a gross margin of 45.6% (38.4%).
Research and development (R&D) expenses
R&D expenses increased to SEK -13.1 (-11.9) b., including restructuring charges of SEK -1.0 (-0.2) b. Excluding restructuring charges, R&D expenses increased by SEK -0.5 b. YoY, reflecting the investments in R&D for technology leadership and operational resilience as well as lower rate of capitalization of development expenses in Enterprise. The impact from salary increases and higher variable incentive accruals was broadly offset by savings from cost-reduction actions.
Selling and administrative (SG&A) expenses
SG&A expenses decreased to SEK -9.4 (-9.6) b. including a SEK 0.4 b. benefit from lower amortization following the impairment of intangible assets in Q2 2024. SG&A expenses increased in segment Enterprise, reflecting investments to improve operational effectiveness. Salary increases and higher variable incentive accruals were offset by cost-reduction actions.
Other operating income and expenses
Other operating income and expenses were SEK 0.0 (-32.0) b. Q3 2023 was impacted by a non-cash impairment charge of SEK -31.9 b. related to the Vonage acquisition.
Restructuring charges
Restructuring charges amounted to SEK -1.6 (-0.9) b. mainly related to redundancy activities. Gross income included SEK -0.4 (-0.5) b. of restructuring charges, while operating expenses included restructuring charges of SEK -1.1 (-0.3) b.
| 2 Ericsson | Third quarter report 2024. October 15, 2024. | Group results | |
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EBITA
Adjusted EBITA increased to SEK 7.8 (4.7) b., as higher gross income was partly offset by increased operating expenses. The adjusted EBITA margin was 12.6% (7.3%).
EBITA increased to SEK 6.2 (3.8) b. corresponding to an EBITA margin of 10.0% (5.9%).
EBIT
Adjusted EBIT increased to SEK 7.3 (-28.0) b. The adjusted EBIT margin was 11.9% (-43.5%). Adjusted EBIT in Q3 2023 would have been SEK 3.9 b. excluding the impairment charge. Amortization impacted EBIT by SEK -0.4 (-0.9) b.
Reported EBIT increased to SEK 5.8 (-28.9) b. with an EBIT margin of 9.3% (-44.8%).
Financial income and expenses, net
Financial income and expenses were stable at SEK -0.5 (-0.7) b. The currency hedge effect was SEK 0.0 (0.0) b.
Income tax
Taxes were SEK -1.4 (-0.9) b. A tax rate of 28% is expected for the full year, excluding the tax impact for the SEK -15.1 b. impairment charge recorded in Q2 2024.
Net income
Net income increased to SEK 3.9 (-30.5) b. Net income in Q3 2023 would have been SEK 1.4 b. excluding the impairment charge of SEK -31.9 b. Diluted EPS increased to SEK 1.14 (-9.21).
Employees
The number of employees on September 30, 2024, was 95,984 compared with 97,985 on June 30, 2024.
Financial highlights, year-to-date (Jan-Sep) development
Sales decreased by -7%* mainly driven by a -10%* decline in Networks. Cloud Software and Services and Enterprise sales declined by -1%*.
Reported sales decreased by -9% to SEK 175.0 (191.5) b. mainly driven by a -12% sales decline in Networks to SEK 111.4 (126.4) b. Sales in Cloud Software and Services declined by -2% to SEK 43.2 (44.1) b. and Enterprise sales declined by -1% to SEK 18.8 (19.0) b.
Sales grew by 15%* in market area North America. Growth was offset by materially lower sales in market area South East Asia, Oceania and India, as investment levels in India have normalized after a record year in 2023. Sales also declined organically in the other market areas. Sales were supported by IPR licensing revenues of SEK 10.5 (8.4) b.
Adjusted gross income increased to SEK 77.7 (74.8) b. while gross margin increased to 44.4% (39.1%). The improvement in gross margin was driven by a more favorable market mix, cost-reduction initiatives, and increased IPR licensing revenues. Reported gross income was SEK 76.7 (73.0) b. with a gross margin of 43.8% (38.1%).
Adjusted EBITA increased to SEK 16.9 (13.2) b. with a margin of 9.7% (6.9%), supported by higher gross income despite lower sales. Increased operating expenses were more than offset by a one-time gain of SEK 1.9 b. in Q1 2024. EBITA increased to SEK 13.5 (8.2) b. and the EBITA margin was 7.7% (4.3%).
Adjusted EBIT (loss) was SEK -0.3 (-21.2) b. with a margin of -0.1% (-11.1%), including a SEK -15.1 (-31.9) b. impairment charge impact. Amortization of intangible assets was SEK -2.0 (-2.5) b. Reported EBIT (loss) was SEK -3.6 (-26.2) b., and the EBIT margin was -2.1% (-13.7%).
Net income (loss) was SEK -4.5 (-29.5) b. including a SEK -11.4 (-31.9) b. impairment charge impact and restructuring charges of SEK -3.4 (-5.0) b. The net income increase was also supported by SEK 1.8 b. lower taxes. Diluted EPS increased to SEK -1.43 (-8.96).
| 3 Ericsson | Third quarter report 2024. October 15, 2024. | Group results | |
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Market area sales
SEK b. | Q3 2024 | Q3 2023 | YoY change | YoY organic growth | Q2 2024 | QoQ change | Jan-Sep 2024 | Jan-Sep 2023 | YoY change | YoY organic growth | ||||||||||||||||||||||||||||||
North America | 20.4 | 13.5 | 51 | % | 55 | % | 16.6 | 23 | % | 50.9 | 44.8 | 14 | % | 15 | % | |||||||||||||||||||||||||
Europe and Latin America | 15.2 | 15.5 | -2 | % | 1 | % | 15.6 | -3 | % | 44.0 | 45.7 | -4 | % | -3 | % | |||||||||||||||||||||||||
South East Asia, Oceania and India | 7.7 | 13.8 | -44 | % | -43 | % | 7.7 | 0 | % | 24.0 | 41.5 | -42 | % | -41 | % | |||||||||||||||||||||||||
North East Asia | 3.7 | 5.4 | -31 | % | -29 | % | 4.6 | -19 | % | 11.7 | 14.8 | -21 | % | -16 | % | |||||||||||||||||||||||||
Middle East and Africa | 4.9 | 6.5 | -24 | % | -22 | % | 4.9 | -1 | % | 14.5 | 16.0 | -10 | % | -9 | % | |||||||||||||||||||||||||
Other | 10.0 | 9.9 | 1 | % | 4 | % | 10.4 | -4 | % | 30.0 | 28.7 | 5 | % | 6 | % | |||||||||||||||||||||||||
Of which IPR | 3.5 | 2.8 | 25 | % | — | 3.9 | -10 | % | 10.5 | 8.4 | 24 | % | — | |||||||||||||||||||||||||||
Total | 61.8 | 64.5 | -4 | % | -1 | % | 59.8 | 3 | % | 175.0 | 191.5 | -9 | % | -7 | % | |||||||||||||||||||||||||
Market Area North America
Sales increased by 55%* YoY. Networks sales increased by 80%* benefiting strongly from recent contract wins and selective network investments by some large customers. Cloud Software and Services sales declined by -4%* due to project delivery milestones in the prior year period. Reported sales increased by 51% YoY.
Market Area Europe and Latin America
Sales increased by 1%* YoY. Sales in Europe increased slightly, benefiting from strong deliveries in the quarter, despite a continued challenging market environment. In Latin America, sales decreased due to increased competition and lower customer network investments. Reported sales declined by -2% YoY.
Market Area South East Asia, Oceania and India
Sales decreased by -43%* YoY. Networks sales declined primarily due to normalized investment levels in India after a record year in 2023. Cloud Software and Services sales declined due to project delivery milestones in the prior year period and descoping of a managed services contract. Reported sales declined by -44% YoY.
Since the second quarter, Ericsson has been awarded major new contracts in multiple markets, including 4G and 5G deals with Vodafone Idea in India, and the majority share of Viettel’s nationwide 5G deployment in Vietnam.
Market Area North East Asia
Sales declined by -29%* YoY. Networks sales declined due to a slowdown in customer capex investments in some 5G front-runner markets, after significant deployment in recent years. Cloud Software and Services sales were stable. Reported sales declined by -31% YoY.
Market Area Middle East and Africa
Sales declined by -22%* YoY. Sales declined in Networks, primarily driven by macroeconomic headwinds and reduced customer capex investments. Cloud Software & Services sales were stable. Reported sales decreased by -24% YoY.
Market Area Other
Market area Other primarily includes IPR licensing revenues and almost all sales in segment Enterprise. Sales increased by 4%* YoY driven by IPR licensing revenues. Reported sales increased by 1% YoY.
IPR
A new 5G patent licensing agreement was signed in the quarter and IPR licensing revenues increased to SEK 3.5 (2.8) b, part of which related to retroactive revenue for unlicensed periods. IPR licensing revenues are expected to reach at least SEK 13 b. in 2024, and opportunities to further grow IPR licensing revenues remain.
| 4 Ericsson | Third quarter report 2024. October 15, 2024. | Market area sales | |
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Segment results
Mobile Networks – Segment Networks
SEK b. | Q3 2024 | Q3 2023 | YoY change | Q2 2024 | ||||||||||||
Net sales | 40.0 | 41.5 | -4 | % | 37.7 | |||||||||||
Of which IPR licensing revenues | 2.9 | 2.3 | 25 | % | 3.2 | |||||||||||
Organic sales growth | — | — | -1 | % | — | |||||||||||
Gross income | 19.3 | 16.1 | 20 | % | 17.1 | |||||||||||
Gross margin | 48.3 | % | 38.9 | % | — | 45.5 | % | |||||||||
EBIT | 7.5 | 4.6 | 62 | % | 4.8 | |||||||||||
EBIT margin | 18.7 | % | 11.1 | % | — | 12.6 | % | |||||||||
EBITA | 7.5 | 4.7 | 62 | % | 4.8 | |||||||||||
EBITA margin | 18.8 | % | 11.2 | % | — | 12.7 | % | |||||||||
Restructuring charges | -0.6 | -0.6 | — | -0.5 | ||||||||||||
Adjusted financial measures | ||||||||||||||||
Adjusted gross margin | 48.7 | % | 39.9 | % | — | 46.1 | % | |||||||||
Adjusted EBIT | 8.1 | 5.2 | 56 | % | 5.2 | |||||||||||
Adjusted EBIT margin | 20.2 | % | 12.5 | % | — | 13.9 | % | |||||||||
Adjusted EBITA | 8.1 | 5.2 | 56 | % | 5.3 | |||||||||||
Adjusted EBITA margin | 20.3 | % | 12.6 | % | — | 13.9 | % | |||||||||
Breakdown of sales into products, services and IPR licensing is available in note 3.
| • | Strong sales in North America. |
| • | Gross margin supported by business mix, cost initiatives and a competitive portfolio offering. |
| • | Leader1 in Omdia ‘RAN Vendors’ market report and in Gartner® ‘5G RAN’ Magic Quadrant™. |
Net sales
Sales decreased by -1%* YoY, as strong sales growth in market area North America was offset by declines in most other markets. Sales increased by 6% sequentially, ahead of average seasonality, driven by North America. Reported sales decreased by -4% YoY to SEK 40.0 (41.5) b.
Sales in market area North America increased by 80%* YoY, benefiting from contract wins and selective network investments by some large customers. Sales in the other market areas decreased, with a -49%* decline in market area South East Asia, Oceania and India as operator capex investments in India have normalized following a peak in 2023. Sales were supported by increased IPR licensing revenues, benefiting from new 5G licensing agreements signed in each of Q1-Q3 2024.
Gross income and margin
Adjusted gross margin increased to 48.7% (39.9%), as a result of a favorable business mix, continued cost-reduction initiatives and operational leverage in the supply chain. In addition, gross margin was supported by higher IPR licensing revenues and a non-recurring benefit from a settlement of outstanding customer accounts receivable. Adjusted gross income increased to SEK 19.5 (16.6) b.
EBITA
Adjusted EBITA increased to SEK 8.1 (5.2) b. and the EBITA margin was 20.3% (12.6%). The benefit of higher gross income and continued efficiency improvements was partly offset by increased R&D investments. These R&D investments support the strategy to build high-performing programmable networks, ensure continued technology leadership, and maintain a competitive portfolio.
Net sales rolling four quarters were SEK 156.4 b. and the adjusted EBITA margin rolling four quarters was 16.0%.
| 1 | Recognized 5G leader in the portfolio dimension in Omdia Market Landscape: RAN Vendors 2024 and in Gartner® Magic Quadrant™ Critical Capabilities for CSP 5G RAN Network Infrastructure Solutions report |
Mobile Networks – Segment Cloud Software and Services
SEK b. | Q3 2024 | Q3 2023 | YoY change | Q2 2024 | ||||||||||||
Net sales | 15.0 | 15.6 | -4 | % | 15.2 | |||||||||||
Of which IPR licensing revenues | 0.6 | 0.5 | 25 | % | 0.7 | |||||||||||
Organic sales growth | — | — | -1 | % | — | |||||||||||
Gross income | 5.5 | 5.5 | 1 | % | 5.4 | |||||||||||
Gross margin | 37.0 | % | 35.3 | % | — | 35.6 | % | |||||||||
EBIT (loss) | -0.4 | 0.1 | — | -0.7 | ||||||||||||
EBIT margin | -3.0 | % | 0.6 | % | — | -4.8 | % | |||||||||
EBITA (loss) | -0.4 | 0.1 | — | -0.7 | ||||||||||||
EBITA margin | -2.9 | % | 0.6 | % | — | -4.7 | % | |||||||||
Restructuring charges | -0.9 | -0.3 | — | -0.8 | ||||||||||||
Adjusted financial measures | ||||||||||||||||
Adjusted gross margin | 38.7 | % | 36.2 | % | — | 37.2 | % | |||||||||
Adjusted EBIT | 0.4 | 0.4 | 0 | % | 0.1 | |||||||||||
Adjusted EBIT margin | 2.8 | % | 2.7 | % | — | 0.6 | % | |||||||||
Adjusted EBITA | 0.4 | 0.4 | -1 | % | 0.1 | |||||||||||
Adjusted EBITA margin | 2.9 | % | 2.8 | % | — | 0.6 | % | |||||||||
Breakdown of sales into products, services and IPR licensing is available in note 3.
| • | Sales declined by -1%* YoY. |
| • | Gross margin improvement, driven by strategy execution. |
| • | Leader2 in Omdia ‘Core Vendors’ market report and in Gartner® ‘5G Core’ Magic Quadrant™. |
Net sales
Sales declined by -1%* YoY, with lower sales of services due to project delivery milestones. Sales decreased by -1% sequentially, with growth in market areas North America and Middle East and Africa offset by sequential declines in the other market areas. Reported sales decreased by -4% YoY to SEK 15.0 (15.6) b.
Sales grew by 4%* YoY in market area Europe and Latin America as a result of project delivery milestones but declined in other market areas. Sales were supported by increased IPR licensing revenues, benefiting from new 5G licensing agreements signed in each of Q1-Q3 2024.
Gross income and margin
Adjusted gross margin increased to 38.7% (36.2%) as a result of improved delivery performance, a favorable product mix and continued focus on commercial discipline. Gross margin was also supported by higher IPR licensing revenues and a non-recurring benefit from a settlement of outstanding customer accounts receivable. Adjusted gross income increased to SEK 5.8 (5.6) b.
EBITA
Adjusted EBITA was stable at SEK 0.4 (0.4) b. with an EBITA margin of 2.9% (2.8%). The improvement in gross income was offset by increased investments in the 5G portfolio as well as in resilience. Strategy execution continues, with a focus on commercial discipline, accelerating automation to reduce deployment and maintenance efforts.
Net sales rolling four quarters were SEK 62.7 b. and the adjusted EBITA margin rolling four quarters was 3.6%.
| 2 | Recognized 5G leader in Gartner® Magic Quadrant™ for CSP 5G Core Network Infrastructure Solutions, and leader for core portfolio in Omdia Market Landscape: Core Vendors 2024 |
| 5 Ericsson | Third quarter report 2024. October 15, 2024. | Segment results | |
Table of Contents
Enterprise – Segment Enterprise
SEK b. | Q3 2024 | Q3 2023 | YoY change | Q2 2024 | ||||||||||||
Net sales | 6.3 | 6.7 | -5 | % | 6.5 | |||||||||||
Of which Global Comms Platform (Vonage) | 3.8 | 4.2 | -9 | % | 3.8 | |||||||||||
Of which Enterprise Wireless Solutions | 1.3 | 1.2 | 5 | % | 1.2 | |||||||||||
Organic sales growth | — | — | -3 | % | — | |||||||||||
Gross income | 3.3 | 3.3 | 2 | % | 3.3 | |||||||||||
Gross margin | 52.3 | % | 48.7 | % | — | 51.0 | % | |||||||||
EBIT (loss) | -1.2 | -33.3 | — | -17.4 | ||||||||||||
EBIT margin | -19.0 | % | -499.1 | % | — | -268.7 | % | |||||||||
EBITA (loss) | -0.8 | -0.6 | — | -1.5 | ||||||||||||
EBITA margin | -13.0 | % | -9.0 | % | — | -23.3 | % | |||||||||
Restructuring charges | 0.0 | 0.0 | — | -0.3 | ||||||||||||
Adjusted financial measures | ||||||||||||||||
Adjusted gross margin | 52.4 | % | 48.84 | % | — | 51.1 | % | |||||||||
Global Comms Platform (Vonage) | 44.0 | % | 41.7 | % | — | 43.2 | % | |||||||||
Enterprise Wireless Solutions | 60.7 | % | 60.0 | % | — | 59.5 | % | |||||||||
Adjusted EBIT (loss) | -1.2 | -33.3 | — | -17.1 | ||||||||||||
Adjusted EBIT margin | -18.4 | % | -499.0 | % | — | -264.3 | % | |||||||||
Adjusted EBIT (loss) excluding impairments 1 | -1.2 | -1.4 | — | -2.0 | ||||||||||||
Adjusted EBIT margin excluding impairments 1 | -18.4 | % | -21.0 | % | — | -31.1 | % | |||||||||
Adjusted EBITA (loss) | -0.8 | -0.6 | — | -1.2 | ||||||||||||
Of which Global Comms Platform (Vonage) 2 | -0.4 | 0.0 | — | -0.7 | ||||||||||||
Of which Enterprise Wireless Solutions 2 | -0.5 | -0.7 | — | -0.7 | ||||||||||||
Adjusted EBITA margin | -12.4 | % | -8.9 | % | — | -18.9 | % | |||||||||
| 1 | Excluding the non-cash impairment recorded in the second quarter 2024, relating to the impairment of intangible assets mainly attributed to the Vonage acquisition. |
| 2 | Common costs are included at segment level only (not distributed within the segment). |
| • | Sales declined by -3%* YoY. |
| • | Refocusing activities on profitable markets and products. |
| • | Landmark JV for Network APIs announced. |
Net sales
Sales declined by -3%* YoY, as lower sales in Global Communications Platform were partly offset by growth in Enterprise Wireless Solutions. Reported sales decreased by -5% YoY to SEK 6.3 (6.7) b.
Sales in Global Communications Platform were negatively impacted, as expected, by the decision to focus on more profitable market segments and to reduce activities in some countries, as well as the earlier announced low-margin customer contract loss in Q4 2023. Sales growth in Enterprise Wireless Solutions slowed to 5% YoY, reflecting lower WWAN growth. These trends are expected to further impact Enterprise sales in the near term.
In the quarter, Ericsson Wireless Solutions unveiled new branding and a new product portfolio for enterprise-driven 5G network adoption, including private 5G and neutral host solutions to deliver business-critical connectivity for enterprise environments.
Gross income and margin
Adjusted gross margin increased to 52.4% (48.8%), benefiting from the decision to focus on more profitable markets and products in Global Communications Platform, and the timing of payments in Technologies and New Businesses. Adjusted gross income was stable at SEK 3.3 (3.3) b. reflecting the renewed focus on profitability.
EBITA (loss)
Adjusted EBITA (loss) was SEK -0.8 (-0.6) b. Investments to improve operational effectiveness and to build the Global Network Platform increased, broadly offset by lower variable incentive costs and lower rate of capitalization of development expenses. Adjusted EBITA margin was -12.4% (-8.9%).
Net sales rolling four quarters were SEK 25.5 b. and the adjusted EBITA margin rolling four quarters was -14.1%.
In the quarter, a new joint venture was announced together with 12 of the world’s largest telecom operators to combine and sell network APIs on a global scale. In addition, Vonage announced a collaboration on communication and network APIs with SAP.
Segment Other
SEK b. | Q3 2024 | Q3 2023 | YoY change | Q2 2024 | ||||||||||||
Net sales | 0.5 | 0.7 | -28 | % | 0.5 | |||||||||||
Organic sales growth | — | — | -26 | % | — | |||||||||||
Gross income | 0.0 | -0.2 | — | 0.0 | ||||||||||||
Gross margin | -1.8 | % | -23.6 | % | — | -8.1 | % | |||||||||
EBIT (loss) | -0.1 | -0.3 | — | -0.1 | ||||||||||||
EBIT margin | -14.6 | % | -45.6 | % | — | -23.2 | % | |||||||||
EBITA (loss) | -0.1 | -0.3 | — | -0.1 | ||||||||||||
EBITA margin | -14.6 | % | -45.6 | % | — | -23.0 | % | |||||||||
Restructuring charges | 0.1 | 0.3 | — | 0.0 | ||||||||||||
Adjusted financial measures | ||||||||||||||||
Adjusted gross margin | -5.1 | % | -24.5 | % | — | -7.5 | % | |||||||||
Adjusted EBIT (loss) | -0.0 | -0.3 | — | -0.1 | ||||||||||||
Adjusted EBIT margin | -1.4 | % | -47.9 | % | — | -14.1 | % | |||||||||
Adjusted EBITA (loss) | -0.0 | -0.3 | — | -0.1 | ||||||||||||
Adjusted EBITA margin | -1.4 | % | -47.9 | % | — | -13.9 | % | |||||||||
Net sales
Reported sales declined to SEK 0.5 (0.7) b., primarily due to the discontinuation of the IoT business.
Gross income and margin
Adjusted gross income increased to SEK 0.0 (-0.2) b. mainly reflecting a one-off impairment of assets in the Media Businesses in Q3 2023. Adjusted gross margin increased to 5.1% (-24.5%).
EBITA (loss)
Adjusted EBITA (loss) was SEK 0.0 (-0.3) b.
Net sales rolling four quarters were SEK 2.2 b.
| 6 Ericsson | Third quarter report 2024. October 15, 2024. | Segment results | |
Table of Contents
Cash flow and financial position
Free cash flow bridge, SEK b. | Q3 2024 | Q3 2023 | Q2 2024 | Jan-Sep 2024 | Jan-Sep 2023 | |||||||||||||||
Adjusted EBIT (loss) | 7.3 | -28.0 | -11.9 | -0.3 | -21.2 | |||||||||||||||
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Depreciation, amortization and impairment losses | 2.3 | 34.9 | 18.0 | 22.9 | 40.8 | |||||||||||||||
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Restructuring charges | -1.6 | -0.9 | -1.6 | -3.4 | -5.0 | |||||||||||||||
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Changes in working capital 1) | 7.8 | -3.1 | 6.5 | 15.0 | -18.6 | |||||||||||||||
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Interest paid/ received, taxes paid, and other | -1.5 | -1.5 | -1.7 | -5.5 | -3.4 | |||||||||||||||
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Cash flow from operating activities | 14.4 | 1.4 | 9.3 | 28.7 | -7.3 | |||||||||||||||
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Capex net and other investing activities | -0.8 | -1.3 | -1.0 | -2.7 | -4.2 | |||||||||||||||
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Repayment of lease liabilities | -0.6 | -0.7 | -0.7 | -1.9 | -2.1 | |||||||||||||||
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Free cash flow before M&A | 12.9 | -0.5 | 7.6 | 24.2 | -13.5 | |||||||||||||||
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M&A | -0.1 | -0.2 | 0.0 | -0.2 | -1.9 | |||||||||||||||
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Free cash flow after M&A | 12.9 | -0.7 | 7.5 | 24.0 | -15.5 | |||||||||||||||
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Cash flow from operating activities | 14.4 | 1.4 | 9.3 | 28.7 | -7.3 | |||||||||||||||
Cash flow from investing activities | -0.3 | -1.9 | -6.0 | -7.6 | -1.9 | |||||||||||||||
Cash flow from financing activities | -4.2 | 5.1 | -5.7 | -18.4 | -2.7 | |||||||||||||||
SEK b. | Sep 30 2024 | Sep 30 2023 | Jun 30 2024 | |||||||||
Gross cash | 62.2 | 40.5 | 53.7 | |||||||||
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- Borrowings, current | 3.1 | 18.8 | 8.1 | |||||||||
- Borrowings, non-current | 33.5 | 20.1 | 32.5 | |||||||||
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Net cash | 25.5 | 1.6 | 13.1 | |||||||||
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Equity | 85.4 | 105.4 | 82.5 | |||||||||
Total assets | 272.5 | 306.3 | 278.5 | |||||||||
Capital turnover (times) | 1.4 | 1.4 | 1.4 | |||||||||
Return on capital employed (%) | -2.9 | % | -18.7 | % | -11.3 | % | ||||||
Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.
| 1 | Defined as Changes in operating net assets. |
| • | Free cash flow before M&A was SEK 12.9 b. |
| • | Net cash increased by SEK 12.4 b. QoQ to SEK 25.5 b. |
| • | Average maturity of long-term borrowings 4.0 years. |
Cash flow
Free cash flow before M&A was SEK 12.9 (-0.5) b. benefiting from increased profitability and lower working capital. Working capital improved, as a result of a strong focus on inventory and supply chain management, as well as a favorable market mix.
Cash flow from financing activities was SEK -4.2 (5.1) b., primarily reflecting the repayment of a USD 281 m. loan and a USD 200 m. credit facility, partly offset by the drawdown of a new USD 108 m. loan.
Financial position
Gross cash increased sequentially by SEK 8.5 b. to SEK 62.2 b. Ericsson has unutilized committed credit facilities of SEK 30.3 b. (USD 3.0 b.).
The average maturity of long-term borrowings was 4.0 years as of September 30, 2024, compared with 3.3 years as of September 30, 2023.
Net cash increased sequentially by SEK 12.4 b. to SEK 25.5 b. driven by positive free cash flow after M&A.
Liabilities for post-employment benefits decreased to SEK 24.7 b. from SEK 26.1 b. due to higher discount rate in Sweden. 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 group liability for post-employment benefits would have been approximately SEK 14.9 b. (SEK 9.8 b. lower than current DBO).
| 7 Ericsson | Third quarter report 2024. October 15, 2024. | Cash flow and financial position | |
Table of Contents
Key data points
Market
Dell’Oro estimates that the global RAN equipment market will decline by -8% to -10% (-9%) in 2024. North America is expected to grow by 0% to 5% (3%), Europe to decline by -5% to -10% (-7%) and Mainland China to decline by -5% to -10% (-7%).
Source: Dell’Oro Mobile RAN quarterly report 2Q24, Aug 2024. Numbers in parenthesis are from the 2024 Dell’Oro Mobile RAN 5-year forecast, July 2024.
Ericsson
Net sales
Reported average seasonality last 3 years (2021–2023), %.
| Q4gQ1 | Q1gQ2 | Q2gQ3 | Q3gQ4 | |||||||||||||
Networks | -25 | % | +8 | % | +1 | % | +19 | % | ||||||||
Cloud Software and Services | -34 | % | +13 | % | +4 | % | +33 | % | ||||||||
Net sales may show large variations between quarters, including currency changes.
Currency exposure
Rule of thumb: A change by 10% of SEK to USD would have an impact of approximately 5% on net sales.
Amortization of intangible assets
Amortization of intangible assets is expected to be around SEK -0.5 b. per quarter, of which approximately SEK -0.4 b. related to segment Enterprise.
Restructuring charges
Restructuring charges for 2024 are expected to be around SEK 4 b.
Segments
Networks
Sales growth in Q4 is expected to be below average 3 years seasonality, reflecting a stronger than average Q3.
Adjusted gross margin in Q4 is expected to be in the range of 47%-49%.
Cloud Software and Services
Sales growth in Q4 is expected to be below average 3 years seasonality.
| 8 Ericsson | Third quarter report 2024. October 15, 2024. | Key data points | |
Table of Contents
Parent Company
Income after financial items January – September 2024, was SEK -4.0 (-14.7) b.
At the end of the quarter, gross cash (cash, cash equivalents plus interest-bearing securities, current and non-current) amounted to SEK 46.2 (25.6) b.
There was a decrease in intercompany lending of SEK 2.4 b. and an increase in intercompany borrowing of SEK 3.0 b. in the quarter.
At the end of the quarter, non-restricted equity amounted to SEK 13.9 (14.0) billion, and total equity amounted to SEK 62.1 (62.2) b.
The holding of treasury stock on September 30, 2024, was 15,579,561 Class B shares.
| 9 Ericsson | Third quarter report 2024. October 15, 2024. | Parent Company | |
Table of Contents
Other information
Legal proceedings not involving governmental authorities
On March 3, 2022, Telefonaktiebolaget LM Ericsson (together with its consolidated operating companies and all other subsidiaries, “Ericsson” or the “Company”) and certain officers of Ericsson were named as defendants in a putative class action filed on behalf of purchasers of Ericsson ADS in the United States, in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as a defendant. The amended complaint alleged violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq. On May 24, 2023, the court granted Ericsson’s motion to dismiss and dismissed the case with prejudice, concluding that Ericsson did not violate any disclosure obligation to investors. On June 23, 2023, plaintiff filed a notice of appeal to the United States Court of Appeals for the Second Circuit. Following the submission of appellate briefing over the second half of 2023, oral argument for the appeal was held on March 22, 2024. On September 3, 2024, the Second Circuit affirmed the dismissal.
In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. (collectively, the “Ericsson defendants”). The lawsuit was brought by US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against the Ericsson defendants under the US Anti-Terrorism Act alleging that the Ericsson defendants made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, the Ericsson defendants filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, including a plaintiff injured in Turkey, and also named Ericsson AB (collectively with the Ericsson defendants, the “Ericsson corporate defendants”), CEO Börje Ekholm and a former employee (who has not been served with process) as additional defendants and also asserted additional allegations and claims. In March 2023, the Ericsson corporate defendants and Mr. Ekholm filed motions to dismiss the amended complaint. Plaintiffs filed their oppositions to defendants’ motions to dismiss the amended complaint in June 2023, and defendants filed reply briefs in support of their motions to dismiss in July 2023. All briefing has been submitted, and resolution of the matter is pending with the District Court. All defendants will continue to vigorously defend this matter.
In February 2024, a second civil lawsuit also alleging violations of the US Anti-Terrorism Act was filed in the United States District Court for the District of Columbia. The lawsuit was filed by the same law firm and involves substantially similar factual allegations and claims as those made in the Anti-Terrorism Act lawsuit originally filed in August 2022, and similarly names the same Ericsson corporate defendants, CEO Börje Ekholm and a former employee as defendants. The new lawsuit was brought by additional US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan, Syria, Turkey, Niger, and France from 2005 to 2021, as well as by their family members. The District Court for the District of Columbia has stayed the proceedings in this matter pending its decision on the motions
to dismiss in the earlier-filed suit. The defendants will vigorously defend this matter.
Beginning on August 4, 2023, a number of civil lawsuits have been filed against Telefonaktiebolaget LM Ericsson in Solna District Court, Sweden. As of October 15, 2024, 93 claimants have filed suit, which are coordinated and financed by a UK-based litigation funder. The claimants consist of a group of non-Swedish funds and financial institutions that allegedly are or have been shareholders of the Company. Their damages claims are primarily based on alleged inadequate disclosure of the contents of the Company’s 2019 internal Iraq investigation report. Ericsson filed its statement of defense on March 15, 2024, and will continue to vigorously defend this matter.
On October 11, 2023, Ericsson commenced patent infringement proceedings against certain Lenovo entities (together “Lenovo”) in the Eastern District of North Carolina (“EDNC”). In the course of the proceedings, Ericsson seeks declarations that Ericsson has complied with its FRAND commitments and with the ETSI IPR Policy and that Lenovo has infringed Ericsson patents. Ericsson has also commenced patent infringement proceedings against Lenovo at the United States International Trade Commission (“ITC”) and in other jurisdictions (Brazil and Colombia). In return, Lenovo has filed lawsuits against Ericsson in the High Court of Justice in the UK, at the Unified Patent Court, at the ITC, in the EDNC, and has applied for an anti-suit injunction in the EDNC. On February 14, 2024, the EDNC denied the anti-suit injunction. This decision has been appealed. This is a global dispute, and additional lawsuits and other legal actions may be initiated by the parties.
The Company actively manages its IPR portfolio and its need for third party licenses and is involved from time to time, in the ordinary course of business, in litigation related thereto, as plaintiff, defendant and other capacities.
In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, lawsuits, claims (including claims by third parties we have indemnified against infringement liability) and proceedings incidental to the ordinary course of business.
Legal proceedings involving governmental authorities
In February 2022, Ericsson publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period between 2011 to 2019. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. The Company’s 2019 internal investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization.
In March 2022, the United States Department of Justice (“DOJ”) informed Ericsson it had determined that, before entering into the Deferred Prosecution Agreement (“DPA”), the Company provided insufficient information to the DOJ about the Company’s 2019 internal investigation into conduct in Iraq. The DOJ also determined that the Company breached the DPA by failing to inform the DOJ about the investigation after entering into the DPA.
On March 2, 2023, the Company reached a resolution (“Plea Agreement”) with the DOJ regarding the non-criminal breaches of
| 10 Ericsson | Third quarter report 2024. October 15, 2024. | Other information | |
Table of Contents
the DPA. Under the Plea Agreement, Ericsson pleaded guilty to previously deferred charges relating to conduct that occurred prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206.7 million. The entry of the Plea Agreement brought the DPA to an end.
On June 3, 2024, Ericsson announced the conclusion of the work and term of the independent compliance monitor originally appointed by the DOJ in June 2020 in connection with the DPA. The monitorship and Plea Agreement concluded on June 2, 2024.
With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to investigate these matters and related matters in full cooperation with the DOJ. As additional information continues to be identified and evaluated during the ongoing investigations in continued cooperation with the DOJ, it is expected that there will not be any conclusive determinations on the outcome until the investigation is completed. The scope and duration of the investigation remains uncertain.
In June 2022, the US Securities and Exchange Commission (“SEC”) informed Ericsson that it opened an investigation concerning matters described in the Company’s 2019 internal Iraq investigation report. Under Ericsson’s consent judgment with the SEC, Ericsson is permanently enjoined from violating the anti-bribery, books and records and internal controls provisions in the Foreign Corrupt Practices Act (“FCPA”). Violations of the injunction, consent judgment or securities law could subject the Company to new civil and criminal penalties as well as new enforcement actions. On September 26, 2024, the SEC Staff informed Ericsson that it had concluded its investigation into Ericsson and that based on the information the SEC Staff has to date, the SEC Staff does not intend to recommend an enforcement action by the SEC against Ericsson.
As part of its defense to a now settled patent infringement lawsuit filed by Ericsson in 2013 in the Delhi High Court against Indian handset company Micromax, Micromax filed a complaint against Ericsson with the Competition Commission of India (“CCI”). The CCI decided to refer the case to the Director General’s Office for an in-depth investigation. The CCI opened similar investigations against Ericsson in January 2014 based on claims made by Intex Technologies (India) Limited and, in 2015, based on a now settled claim from iBall. Ericsson has challenged CCI’s jurisdiction in these cases before the Delhi High Court. On July 13, 2023, the Division Bench of the Delhi High Court found that in this instance the CCI has no power to conduct the pending investigations against Ericsson. The CCI has appealed this order to the Supreme Court of India.
In April 2019, Ericsson was informed by China’s State Administration for Market Regulations (“SAMR”) Anti-monopoly bureau that SAMR has initiated an investigation into Ericsson’s patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact-finding and meetings with SAMR in order to facilitate the authority’s assessment and conclusions. In case of adverse findings, SAMR has the power to impose behavioral and financial remedies.
PRESS RELEASES
| Aug 16, 2024 | Ericsson announces sale of iconectiv | |
| Sep 12, 2024 | Global telecom leaders join forces to redefine the industry with network APIs | |
| Sep 20, 2024 | Carolina Dybeck Happe resigns from Ericsson’s Board of Directors |
| 11 Ericsson | Third quarter report 2024. October 15, 2024. | Other information | |
Table of Contents
Risk factors
Ericsson is exposed to a number of risks in its activities. To stimulate identification and support cross-functional treatment within the Ericsson Group, risks are grouped in a number of categories, including, for example, risks relating to technology, IPR, compliance, project execution, operations, products and services, treasury and accounting, the geopolitical environment, M&A, cybersecurity and occupational health and safety. Ericsson’s risk management is embedded into strategy development and operational processes and material Group risks are regularly assessed and reviewed by executives as required by Ericsson’s Material Group Risk Protocol to ensure accountability, effectiveness, efficiency, business continuity and compliance. Risks are defined in both a short-term and long-term perspective and are related to long-term objectives and strategic direction as well as to short-term objectives. Risk factors and uncertainties of relevance to Ericsson are described in the Ericsson Annual Report 2023 and in the Annual Report on Form 20-F for the year ended December 31, 2023 (in the following, the “Annual Report 2023”), as well as in Ericsson’s quarterly reports. Updates to these risk factors and uncertainties observed by Ericsson that are deemed of short-term relevance include, but are not limited to, the following risks described below. See also the risks set out in the section titled “Forward-Looking Statements.”
Ericsson’s ability to benefit from intellectual property rights (IPRs), which are critical to the Company’s business, may be limited by changes in regulation relating to patents, inability to prevent infringement, the loss of licenses to or from third parties, infringement claims brought against the Company by competitors and others and changes in the area of open standards when it comes to licensing of open standard essential patents.
As mentioned in the Annual Report 2023, including in the risk factor 1.12, there can be no assurance that the Company’s patents will not be challenged, invalidated, or circumvented, or that any rights granted in relation to Ericsson’s patents will in fact provide the Company with competitive advantages.
Ericsson’s use of a combination of trade secrets, confidentiality policies, and nondisclosure and other contractual arrangements, in addition to relying on patent, copyright and trademark laws to protect Ericsson’s IPRs, may not be adequate to prevent or deter infringement or other misappropriation. In addition, Ericsson relies on many software patents, and limitations on the patentability of software may materially affect Ericsson’s business.
Moreover, the Company may not be able to detect unauthorized use or take appropriate and timely steps to establish and enforce Ericsson’s proprietary rights. In fact, existing legal systems of some countries in which Ericsson conducts business offer limited, if any, protection of IPRs. The Company’s solutions may also require it to license technologies from third parties. It may be necessary in the future to seek or renew licenses, and there can be no assurance that they will be available on acceptable terms, or at all. Moreover, the inclusion in Ericsson’s products of software or other intellectual property licensed from third parties on a non-exclusive basis could limit the Company’s ability to protect proprietary rights in Ericsson’s products.
Many key aspects of telecommunications and data network technology are governed by industry-wide standards usable by all market participants. As the number of market entrants and the complexity of technology increases, the possibility of functional overlap and inadvertent infringement of IPRs also increases, which
has been the case with the introduction of 5G technology. In addition to industry-wide standards, other key industry-wide software solutions are currently developed by market participants as free and open-source software. Contributing to the development and distribution of software developed as free and open-source software may limit Ericsson’s ability to enforce applicable patents in the future.
Third parties have asserted, and may assert in the future, claims directly against Ericsson or against Ericsson’s customers, alleging infringement of their IPRs. Defending such claims may be expensive, time-consuming and divert the efforts of Ericsson’s management and/or technical personnel. IPR disputes are complex and often take many years to resolve, with parties pursuing remedies across multiple forums and jurisdictions. Interim judgements and verdicts are common and not necessarily indicative of the ultimate outcome. As a result of litigation, Ericsson could be required to pay damages and other compensation directly or to indemnify Ericsson’s customers for such damages and other compensation, develop non-infringing products/technology or enter into royalty or licensing agreements. However, the Company cannot be certain that such licenses will be available to the Company on commercially reasonable terms or at all, and such judgments could have a material adverse effect on Ericsson’s business, reputation, operating results and financial condition. Using free and open-source software may allow third parties to further investigate the Company’s software due to the accessibility of source code. This may in turn make this software more prone to assertions from third parties.
Investigations held by antitrust authorities, court judgments and legislative change could potentially affect Ericsson’s ability to benefit from its patent portfolio when licensing patents necessary to conduct an open standard (e.g. 4G and 5G technology), which could have a material adverse effect on Ericsson’s business, reputation, operating results and financial condition. Ericsson holds a leading patent portfolio in open standards, and possible changes regarding such a portfolio may materially affect Ericsson’s reputation, business, operating results and financial condition.
Ericsson’s ability to benefit from IPRs may be limited by the loss of patent licenses to or from third parties. Patent licensing agreements are generally multi-year and term based and the process for renewal of these licenses normally requires negotiations, particularly in conjunction with technology shifts and the introduction of new standards, such as 5G. Such renewals and negotiations may take time to resolve, sometimes involve litigation and may have material adverse impacts on Ericsson’s business and financial position, including on the timing for and level of revenues from the IPR licensing contract portfolio.
Challenging global economic conditions and political unrest and uncertainty, geopolitical risks and trade frictions may increase the uncertainty around the direction of the global cellular eco-systems and standards, which could have adverse effects on Ericsson’s IPR licensing revenues as well as on the ability to acquire licenses.
| 12 Ericsson | Third quarter report 2024. October 15, 2024. | Risk factors | |
Table of Contents
Ericsson is subject to certain US, UK and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations and other regulatory requirements or conditions in other jurisdictions, or imposed as a result of foreign direct investment reviews and decisions. Ericsson may be subject to further adverse consequences under the injunction issued in connection with the 2019 settlement with the SEC, as well as other investigations by governmental authorities.
As mentioned in the Annual Report 2023, including in the risk factor 3.3, Ericsson is, from time to time, involved in legal proceedings and regulatory investigations, and is subject to certain other regulatory requirements, conditions and agreements. If any of these lawsuits or legal proceedings are determined unfavorably against the Company or it is determined that the Company is not in compliance with any of these regulatory requirements, conditions or agreements, the Company could be required to pay substantial damages, fines and/or penalties, be subject to public scrutiny, negative reputational consequences, or become subject to additional enforcement actions, regulatory review and/or adverse decisions. Ericsson could face potential debarment from government contracting in the United States and elsewhere, reputational risk, as well as potential counterparty reluctance to continue business relationships. In addition, these ongoing matters and investigations require significant resources and costs for investigation, compliance and remediation that could lead to adverse financial and reputational consequences.
For example, in connection with the acquisition of Vonage by Ericsson, and as a condition to Committee on Foreign Investment in the United States’ (“CFIUS”) approval of the acquisition, Vonage, Ericsson and the DOJ and the US Department of the Treasury, in their capacity as CFIUS monitoring agencies (“CMAs”), entered into a National Security Agreement (“NSA”) in July 2022, which imposes restrictions on access to certain types of sensitive data, equipment and systems. Vonage and Ericsson are engaged and cooperating with the CMAs in relation to ongoing compliance with the NSA restrictions, related remediation efforts to address concerns raised by the CMAs regarding such access, and the CMAs’ requests for information. The ongoing compliance efforts and related remediation have required changes to the Vonage business, including reduction and cessation of operations in certain jurisdictions. Further changes may be required which could adversely affect the Vonage business, including changes to business structure and additional compliance measures with associated costs. The CMAs review of integrations and connections of Ericsson and Vonage technologies could also increase our time to market. Vonage and Ericsson continue to cooperate with the CMAs in investigating historic and ongoing compliance with the terms of the NSA. The ultimate outcome of these investigations remains uncertain. Violations of a CFIUS mitigation agreement, such as the NSA, can result in an enforcement action imposing monetary penalties or other remedies. CFIUS has increased its resources and focus on enforcement and has recently imposed major financial penalties for violations of mitigation agreements involving unauthorized access to sensitive data and failure to report such incidents promptly to CFIUS.
As previously reported, the Company reached a resolution (Plea Agreement) in March 2023 with the DOJ regarding the non-criminal breaches of its DPA. Under the Plea Agreement, Ericsson pleaded guilty to previously deferred charges relating to conduct prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206.7 million. The entry of the Plea Agreement brought the DPA to an end. On June 3, 2024, Ericsson announced the conclusion of the work and term of the independent compliance monitor originally appointed by the DOJ in June of 2020 in connection with the DPA. The monitorship and Plea Agreement concluded on June 2, 2024.
In addition, as previously reported, in June 2022, the SEC informed Ericsson that it opened an investigation concerning matters described in the Company’s 2019 internal Iraq investigation
report. Under Ericsson’s consent judgment with the SEC, Ericsson is permanently enjoined from violating the anti-bribery, books and records and internal controls provisions in the FCPA. Violations of the injunction, consent judgment or securities law could subject the Company to new civil and criminal penalties as well as new enforcement actions. On September 26, 2024, the SEC Staff informed Ericsson that it had concluded its investigation into Ericsson and that based on the information the SEC Staff has to date, the SEC Staff does not intend to recommend an enforcement action by the SEC against Ericsson.
The Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization. With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to investigate these matters and related matters in full cooperation with the DOJ. As additional information continues to be identified and evaluated during the ongoing investigations in continued cooperation with the DOJ, it is expected that there will not be any conclusive determinations on the outcome until the investigation is completed. The scope and duration of the investigation remains uncertain.
Ericsson is required to comply with anti-corruption and anti-bribery laws in the jurisdictions in which it operates, including the FCPA, the UK Bribery Act (the “Bribery Act”) and other similar laws in other countries in which the Company does business. As a result of doing business in foreign countries, including through channel partners and agents, Ericsson is exposed to risks of violating anti-corruption laws. As a company that operates in certain regulated sectors, Ericsson deals with both governments and state-owned business enterprises, the employees of which are often considered foreign officials for purposes of the FCPA and other applicable anti-bribery legislation. Some of the international locations in which Ericsson operates have developing legal systems and may have higher levels of corruption than more developed jurisdictions. Actual or alleged non-compliance with anti-corruption laws and other laws governing the conduct of business with government entities and/or officials (including local laws) could subject Ericsson to criminal and civil penalties and other remedial measures, which could have a material adverse effect on Ericsson, including its reputation, business, financial condition, operating results, cash flows or prospects.
For additional information regarding certain of the legal proceedings and inquiries in which Ericsson is involved, see “Legal proceedings” in the Board of Directors’ Report in the Ericsson Annual Report 2023.
Stockholm, October 15, 2024
Telefonaktiebolaget LM Ericsson
Börje Ekholm, President and CEO
Org. No. 556016-0680
Date for next report: January 24, 2025
| 13 Ericsson | Third quarter report 2024. October 15, 2024. | Risk factors | |
Table of Contents
Editor’s note
Media and analyst briefing
Ericsson invites media, investors and analysts to a conference call and live video webcast at 09:00 AM CEST on October 15, 2024.
Link to the webcast, dial-in to audio conference, supporting material and replay will be available at:
www.ericsson.com/investors and
www.ericsson.com/newsroom
For further information, please contact:
Lars Sandström, Senior Vice President, Chief Financial Officer
Phone: +46 72 161 20 04
E-mail: investor.relations@ericsson.com
Stella Medlicott, Senior Vice President, Chief Marketing and Communications Officer
Phone: +46 73 095 65 39
E-mail: media.relations@ericsson.com
Telefonaktiebolaget LM Ericsson
Org. number: 556016-0680
Torshamnsgatan 21
SE-164 83 Stockholm
Phone: +46 10 719 00 00
www.ericsson.com
Investors
Daniel Morris, Vice President,
Head of Investor Relations
Phone: +44 7386 657217
E-mail: investor.relations@ericsson.com
Lena Häggblom, Director,
Investor Relations
Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Alan Ganson, Director,
Investor Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@ericsson.com
Media
Ralf Bagner, Head of Media Relations
Phone: + 46 76 128 47 89
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
| 14 Ericsson | Third quarter report 2024. October 15, 2024. | Editor’s Note | |
Table of Contents
Forward-looking statements
This report includes forward-looking statements. All statements other than statements of historical fact are forward-looking statements. 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,” “continue,” or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking statements, including, in particular the following:
| • | Potential material additional liability resulting from past conduct, including allegations of past conduct that remains unresolved or unknown in multiple jurisdictions including Iraq, which remains the subject of ongoing investigations by Ericsson and US governmental authorities |
| • | Risks related to internal controls and governance, including the potential to incur material liability in connection with internal controls surrounding payments made to third parties in connection with past conduct in multiple jurisdictions including Iraq which remains the subject of ongoing investigations by Ericsson and US governmental authorities |
| • | The risk that the ongoing investigations by Ericsson and US governmental authorities result in a conclusion by Ericsson or US governmental authorities that the Company’s past conduct included making or having responsibility for making payments to a terrorist organization or other improper payments, which could lead to material additional liability |
| • | Risks related to our ongoing compliance with obligations under the NSA entered into in connection with Ericsson’s acquisition of Vonage, which may adversely affect the Vonage business and subject the Company to additional liabilities |
| • | Our goals, strategies, planning assumptions and operational or financial performance expectations |
| • | Macroeconomic conditions, including inflationary pressures and effects on customer investments, market recovery and growth |
| • | Ongoing geopolitical and trade uncertainty, including challenging global economic conditions, market trends and pandemics such as COVID-19 |
| • | Risks related to cybersecurity and privacy |
| • | 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 |
| • | Our ability to deliver on future plans and achieve future growth |
| • | The expected operational or financial performance of strategic cooperation activities and joint ventures |
| • | Risks related to acquisitions and divestments, including our ability to successfully consummate such transactions, protect the value of acquisitions during integration, or achieve the value anticipated with an acquisition |
| • | Extent of impairment impacts on cash flow and dividend capacity in future periods, which is assessed based on full- year performance and is impacted by a variety of factors, including earnings, business outlook and financial position |
| • | Trends related to our industry, including our regulatory environment, competition and customer structure |
| • | Other factors included in our filings with the SEC, including the factors described throughout this report, included in the section Risk Factors, and in “Risk Factors” in the Annual Report 2023, as updated by subsequent reports filed with the SEC. |
These forward-looking statements also represent our estimates, assumptions and expectations only as of the date that they were 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 and are urged to carefully review and consider the various disclosures made in this report and in other documents we file from time to time with our regulators that disclose risks and uncertainties that may affect our business. 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 report, except as required by applicable law or stock exchange regulations.
| 15 Ericsson | Third quarter report 2024. October 15, 2024. | Forward-looking statements | |
Table of Contents
Auditors’ Review Report
Introduction
We have reviewed the condensed interim financial information (interim report) of Telefonaktiebolaget LM Ericsson (publ.) as of September 30, 2024, and the nine months period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity.
A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed
in a review do not enable us to obtain assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, October 15, 2024
Deloitte AB
Thomas Strömberg
Authorized Public Accountant
| 16 Ericsson | Third quarter report 2024. October 15, 2024. | Auditors’ Review Report | |
Table of Contents
Financial statements and other information
| 17 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements and other information | |
Table of Contents
Financial statements (unaudited)
Condensed consolidated income statement
| Q3 | Jan-Sep | |||||||||||||||||||||||
SEK million | Note | 2024 | 2023 | Change | 2024 | 2023 | ||||||||||||||||||
Net sales | 2 | 61,794 | 64,473 | -4 | % | 174,967 | 191,470 | |||||||||||||||||
Cost of sales | -33,609 | -39,745 | -15 | % | -98,309 | -118,473 | ||||||||||||||||||
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Gross income | 2 | 28,185 | 24,728 | 14 | % | 76,658 | 72,997 | |||||||||||||||||
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Research and development expenses 1) | 10 | -13,140 | -11,897 | 10 | % | -39,637 | -37,646 | |||||||||||||||||
Selling and administrative expenses 1) | 10 | -9,380 | -9,617 | -2 | % | -41,145 | -29,378 | |||||||||||||||||
Impairment losses on trade receivables | 78 | -115 | -168 | % | -263 | -477 | ||||||||||||||||||
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Operating expenses | -22,442 | -21,629 | 4 | % | -81,045 | -67,501 | ||||||||||||||||||
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Other operating income and expenses 2) | 10 | 4 | -32,031 | -100 | % | 680 | -31,740 | |||||||||||||||||
Share of earnings of JV and associated companies | 27 | 24 | 13 | % | 62 | 70 | ||||||||||||||||||
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Earnings (loss) before financial items and income tax (EBIT) | 2 | 5,774 | -28,908 | -120 | % | -3,645 | -26,174 | |||||||||||||||||
Financial income and expenses, net | 3 | -501 | -719 | -30 | % | -1,333 | -2,055 | |||||||||||||||||
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Income (loss) after financial items | 5,273 | -29,627 | -118 | % | -4,978 | -28,229 | ||||||||||||||||||
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Income tax 1) | -1,392 | -864 | 61 | % | 473 | -1,284 | ||||||||||||||||||
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Net income (loss) | 3,881 | -30,491 | -113 | % | -4,505 | -29,513 | ||||||||||||||||||
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Net income (loss) attributable to: | ||||||||||||||||||||||||
Owners of the Parent Company | 3,814 | -30,670 | -4,759 | -29,840 | ||||||||||||||||||||
Non-controlling interests | 67 | 179 | 254 | 327 | ||||||||||||||||||||
Other information | ||||||||||||||||||||||||
Average number of shares, basic (million) | 8 | 3,333 | 3,330 | 3,332 | 3,330 | |||||||||||||||||||
Earnings (loss) per share, basic (SEK) 3) | 8 | 1.14 | -9.21 | -1.43 | -8.96 | |||||||||||||||||||
Earnings (loss) per share, diluted (SEK) 3) 4) | 8 | 1.14 | -9.21 | -1.43 | -8.96 | |||||||||||||||||||
| 1) | Jan-Sep 2024 includes an impairment of intangible assets reported in the second quarter, of which R&D expenses SEK -1.2 billion, SG&A expenses SEK -12.6 billion and Income tax SEK 3.7 billion. |
| 2) | Jan-Sep 2024 includes a goodwill impairment of SEK -1.3 billion reported in the second quarter, and a one-time gain of SEK 1.9 billion reported in the first quarter from the resolution of a commercial dispute. Jan-Sep 2023 includes write-down of goodwill of SEK -31.9 billion reported in the third quarter. |
| 3) | Based on net income attributable to owners of the Parent Company. |
| 4) | Potential ordinary shares are not considered when their conversion to ordinary shares would improve earnings per share. |
Condensed statement of comprehensive income (loss)
| Q3 | Jan-Sep | |||||||||||||||
| SEK million | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income (loss) | 3,881 | -30,491 | -4,505 | -29,513 | ||||||||||||
Other comprehensive income | ||||||||||||||||
Items that will not be reclassified to profit or loss | ||||||||||||||||
Remeasurements of defined benefit pension plans | 1,103 | 5,458 | 1,248 | 9,365 | ||||||||||||
Revaluation of credit risk on borrowings | 109 | 29 | -439 | -442 | ||||||||||||
Tax on items that will not be reclassified to profit or loss | -365 | -937 | -169 | -1,619 | ||||||||||||
Items that have been or may be reclassified to profit or loss | ||||||||||||||||
Cash flow hedge reserve | ||||||||||||||||
Gains/ losses arising during the period | 1,521 | 194 | -764 | -2,504 | ||||||||||||
Reclassification adjustments on gains/ losses included in profit or loss | 222 | 246 | 476 | 690 | ||||||||||||
Translation reserves | ||||||||||||||||
Changes in translation reserves | -3,247 | -1,416 | 1,273 | 4,751 | ||||||||||||
Reclassification to profit or loss | 22 | 72 | -82 | 61 | ||||||||||||
Share of other comprehensive income of associates | -16 | -12 | 11 | 29 | ||||||||||||
Tax on items that have been or may be reclassified to profit or loss | -359 | -90 | 59 | 374 | ||||||||||||
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Total other comprehensive income (loss), net of tax | -1,010 | 3,544 | 1,613 | 10,705 | ||||||||||||
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Total comprehensive income (loss) | 2,871 | -26,947 | -2,892 | -18,808 | ||||||||||||
Total comprehensive income (loss) attributable to: | ||||||||||||||||
Owners of the Parent Company | 2,764 | -27,119 | -3,104 | -19,099 | ||||||||||||
Non-controlling interests | 107 | 172 | 212 | 291 | ||||||||||||
| 18 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Condensed consolidated balance sheet
| Sep 30 | Dec 31 | |||||||||||
SEK million | Note | 2024 | 2023 | |||||||||
Assets | ||||||||||||
Non-current assets | ||||||||||||
Intangible assets | ||||||||||||
Capitalized development expenses | 4,626 | 4,678 | ||||||||||
Goodwill | 10 | 52,227 | 52,944 | |||||||||
Customer relationships, IPR and other intangible assets | 10 | 7,735 | 22,667 | |||||||||
Property, plant and equipment | 10,786 | 12,195 | ||||||||||
Right-of-use assets | 5,916 | 6,320 | ||||||||||
Financial assets | ||||||||||||
Equity in JV and associated companies | 1,072 | 1,150 | ||||||||||
Other investments in shares and participations | 5 | 1,970 | 2,091 | |||||||||
Customer finance, non-current | 5 | 221 | 1,347 | |||||||||
Interest-bearing securities, non-current | 5 | 14,806 | 9,931 | |||||||||
Other financial assets, non-current | 5 | 6,166 | 6,350 | |||||||||
Deferred tax assets | 25,012 | 22,375 | ||||||||||
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| 130,537 | 142,048 | |||||||||||
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Current assets | ||||||||||||
Inventories | 29,004 | 36,073 | ||||||||||
Contract assets | 7,568 | 7,999 | ||||||||||
Trade receivables | 5 | 38,018 | 42,215 | |||||||||
Customer finance, current | 5 | 3,843 | 5,570 | |||||||||
Current tax assets | 5,799 | 6,395 | ||||||||||
Other current receivables | 5 | 10,295 | 11,962 | |||||||||
Interest-bearing securities, current | 5 | 10,063 | 9,584 | |||||||||
Cash and cash equivalents | 5 | 37,323 | 35,190 | |||||||||
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| 141,913 | 154,988 | |||||||||||
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Total assets | 272,450 | 297,036 | ||||||||||
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Equity and liabilities | ||||||||||||
Equity | ||||||||||||
Stockholders’ equity | 86,630 | 98,673 | ||||||||||
Non-controlling interest in equity of subsidiaries | -1,275 | -1,265 | ||||||||||
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| 85,355 | 97,408 | |||||||||||
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Non-current liabilities | ||||||||||||
Post-employment benefits | 24,733 | 26,229 | ||||||||||
Provisions, non-current | 4 | 3,036 | 4,927 | |||||||||
Deferred tax liabilities | 1,255 | 3,880 | ||||||||||
Borrowings, non-current | 5 | 33,524 | 29,218 | |||||||||
Lease liabilities, non-current | 4,767 | 5,220 | ||||||||||
Other non-current liabilities | 889 | 755 | ||||||||||
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| 68,204 | 70,229 | |||||||||||
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Current liabilities | ||||||||||||
Provisions, current | 4 | 7,508 | 6,779 | |||||||||
Borrowings, current | 5 | 3,134 | 17,655 | |||||||||
Lease liabilities, current | 2,097 | 2,235 | ||||||||||
Contract liabilities | 39,540 | 34,416 | ||||||||||
Trade payables | 5 | 25,888 | 27,768 | |||||||||
Current tax liabilities | 3,821 | 3,561 | ||||||||||
Other current liabilities | 5 | 36,903 | 36,985 | |||||||||
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| 118,891 | 129,399 | |||||||||||
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Total equity and liabilities | 272,450 | 297,036 | ||||||||||
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| 19 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Condensed consolidated statement of cash flows
| Q3 | Jan-Sep | |||||||||||||||||||
SEK million | Note | 2024 | 2023 | 2024 | 2023 | |||||||||||||||
Operating activities | ||||||||||||||||||||
Net income (loss) | 3,881 | -30,491 | -4,505 | -29,513 | ||||||||||||||||
Adjustments for | ||||||||||||||||||||
Taxes | 1,397 | 1,033 | -23 | 1,887 | ||||||||||||||||
Earnings/ dividends in JV and associated companies | 110 | 27 | 72 | -12 | ||||||||||||||||
Depreciation, amortization and impairment losses | 6 | 2,292 | 34,901 | 22,919 | 40,806 | |||||||||||||||
Other | 592 | 1,021 | 1,356 | 3,273 | ||||||||||||||||
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| 8,272 | 6,491 | 19,819 | 16,441 | |||||||||||||||||
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Changes in operating net assets | ||||||||||||||||||||
Inventories | 1,358 | 2,098 | 7,332 | 2,420 | ||||||||||||||||
Customer finance, current and non-current | 1,211 | -4,702 | 2,980 | -7,428 | ||||||||||||||||
Trade receivables and contract assets | 3,524 | 6,469 | 5,617 | 8,422 | ||||||||||||||||
Trade payables | -3 | -4,367 | -2,084 | -9,071 | ||||||||||||||||
Provisions and post-employment benefits | 955 | 379 | -1,011 | 257 | ||||||||||||||||
Contract liabilities | -117 | -2,616 | 5,005 | -2,267 | ||||||||||||||||
Other operating assets and liabilities, net | 859 | -350 | -2,851 | -10,912 | ||||||||||||||||
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|
| |||||||||||||
| 7,787 | -3,089 | 14,988 | -18,579 | |||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Interest received | 506 | 284 | 1,282 | 962 | ||||||||||||||||
Interest paid | -526 | -599 | -2,500 | -1,737 | ||||||||||||||||
Taxes paid | -1,642 | -1,685 | -4,841 | -4,392 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Cash flow from operating activities | 14,397 | 1,402 | 28,748 | -7,305 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Investing activities | ||||||||||||||||||||
Investments in property, plant and equipment | 6 | -540 | -817 | -1,673 | -2,577 | |||||||||||||||
Sales of property, plant and equipment | 36 | 51 | 102 | 126 | ||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net | -62 | -160 | -216 | -1,915 | ||||||||||||||||
Product development | 6 | -264 | -485 | -977 | -1,622 | |||||||||||||||
Purchase of interest-bearing securities | -5,517 | -1,854 | -12,980 | -3,986 | ||||||||||||||||
Sales of interest-bearing securities | 4,937 | 2,847 | 8,642 | 10,623 | ||||||||||||||||
Other investing activities | 6 | 1,113 | -1,445 | -523 | -2,555 | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Cash flow from investing activities | -297 | -1,863 | -7,625 | -1,906 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Financing activities | ||||||||||||||||||||
Proceeds from issuance of borrowings | 1,161 | 6,097 | 3,130 | 8,150 | ||||||||||||||||
Repayment of borrowings | -5,127 | -2,306 | -15,544 | -6,218 | ||||||||||||||||
Dividends paid | -8 | -9 | -4,719 | -4,600 | ||||||||||||||||
Repayment of lease liabilities | -607 | -691 | -1,866 | -2,074 | ||||||||||||||||
Other financing activities | 356 | 2,029 | 581 | 2,023 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Cash flow from financing activities | -4,225 | 5,120 | -18,418 | -2,719 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Effect of exchange rate changes on cash | -1,288 | -90 | -572 | 481 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Net change in cash and cash equivalents | 8,587 | 4,569 | 2,133 | -11,449 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents, beginning of period | 28,736 | 22,331 | 35,190 | 38,349 | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents, end of period | 37,323 | 26,900 | 37,323 | 26,900 | ||||||||||||||||
| 20 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Condensed consolidated statement of changes in equity
| Jan-Sep | ||||||||
SEK million | 2024 | 2023 | ||||||
Opening balance | 97,408 | 133,304 | ||||||
Total comprehensive income (loss) | -2,892 | -18,808 | ||||||
Sale/repurchase of own shares | -21 | -50 | ||||||
Share issue, net | 21 | 50 | ||||||
Long-term variable compensation plans | 58 | 66 | ||||||
Dividends to shareholders ¹ | -9,219 | -9,095 | ||||||
Transactions with non-controlling interests | — | -32 | ||||||
|
|
|
| |||||
Closing balance | 85,355 | 105,435 | ||||||
|
|
|
| |||||
| 1) | Jan-Sep includes SEK 4,498 (4,507) million of dividend approved by the Annual General Meeting on April 3, 2024 (March 29, 2023) which was paid on 7 October 2024. |
Condensed consolidated income statement – isolated quarters
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Cost of sales | -33,609 | -34,033 | -30,667 | -43,276 | -39,745 | -40,343 | -38,385 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Gross income | 28,185 | 25,815 | 22,658 | 28,605 | 24,728 | 24,101 | 24,168 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Research and development expenses ¹) | -13,140 | -14,926 | -11,571 | -13,018 | -11,897 | -13,777 | -11,972 | |||||||||||||||||||||
Selling and administrative expenses ¹) | -9,380 | -23,074 | -8,691 | -9,877 | -9,617 | -10,643 | -9,118 | |||||||||||||||||||||
Impairment losses on trade receivables | 78 | -84 | -257 | 209 | -115 | -313 | -49 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Operating expenses | -22,442 | -38,084 | -20,519 | -22,686 | -21,629 | -24,733 | -21,139 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Other operating income and expenses ²) | 4 | -1,299 | 1,975 | -125 | -32,031 | 264 | 27 | |||||||||||||||||||||
Share of earnings of JV and associated companies | 27 | 49 | -14 | 54 | 24 | 56 | -10 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Earnings before financial items and income tax (EBIT) | 5,774 | -13,519 | 4,100 | 5,848 | -28,908 | -312 | 3,046 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Financial income and expenses, net | -501 | -361 | -471 | -938 | -719 | -419 | -917 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Income after financial items | 5,273 | -13,880 | 3,629 | 4,910 | -29,627 | -731 | 2,129 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Income tax ¹) | -1,392 | 2,881 | -1,016 | -1,501 | -864 | 134 | -554 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net income (loss) | 3,881 | -10,999 | 2,613 | 3,409 | -30,491 | -597 | 1,575 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net income (loss) attributable to: | ||||||||||||||||||||||||||||
Owners of the Parent Company | 3,814 | -11,132 | 2,559 | 3,394 | -30,670 | -686 | 1,516 | |||||||||||||||||||||
Non-controlling interests | 67 | 133 | 54 | 15 | 179 | 89 | 59 | |||||||||||||||||||||
Other information | ||||||||||||||||||||||||||||
Average number of shares, basic (million) | 3,333 | 3,332 | 3,331 | 3,330 | 3,330 | 3,330 | 3,330 | |||||||||||||||||||||
Earnings (loss) per share, basic (SEK) ³) | 1.14 | -3.34 | 0.77 | 1.02 | -9.21 | -0.21 | 0.46 | |||||||||||||||||||||
Earnings (loss) per share, diluted (SEK) ³) 4) | 1.14 | -3.34 | 0.77 | 1.02 | -9.21 | -0.21 | 0.45 | |||||||||||||||||||||
| 1) | Q2 2024 includes an impairment of intangible assets, of which R&D expenses SEK -1.2 billion, SG&A expenses SEK -12.6 billion and Income tax SEK 3.7 billion. |
| 2) | Q2 2024 includes a goodwill impairment of SEK -1.3 billion. Q1 2024 includes a one-time gain of SEK 1.9 billion from the resolution of a commercial dispute. Q3 2023 includes a goodwill impairment of SEK -31.9 billion. |
| 3) | Based on net income attributable to owners of the Parent Company. |
| 4) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
| 21 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Condensed consolidated statement of cash flows – isolated quarters
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Operating activities | ||||||||||||||||||||||||||||
Net income (loss) | 3,881 | -10,999 | 2,613 | 3,409 | -30,491 | -597 | 1,575 | |||||||||||||||||||||
Adjustments for | ||||||||||||||||||||||||||||
Taxes | 1,397 | -2,693 | 1,273 | 1,302 | 1,033 | -215 | 1,069 | |||||||||||||||||||||
Earnings/ dividends in JV and associated companies | 110 | -41 | 3 | -46 | 27 | -48 | 9 | |||||||||||||||||||||
Depreciation, amortization and impairment losses | 2,292 | 18,015 | 2,612 | 3,083 | 34,901 | 2,813 | 3,092 | |||||||||||||||||||||
Other | 592 | 424 | 340 | 1,417 | 1,021 | 606 | 1,646 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 8,272 | 4,706 | 6,841 | 9,165 | 6,491 | 2,559 | 7,391 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Changes in operating net assets | ||||||||||||||||||||||||||||
Inventories | 1,358 | 3,239 | 2,735 | 6,884 | 2,098 | 382 | -60 | |||||||||||||||||||||
Customer finance, current and non-current | 1,211 | -365 | 2,134 | 5,720 | -4,702 | 558 | -3,284 | |||||||||||||||||||||
Trade receivables and contract assets | 3,524 | 1,857 | 236 | -2,089 | 6,469 | 1,753 | 200 | |||||||||||||||||||||
Trade payables | -3 | 1,941 | -4,022 | -966 | -4,367 | -597 | -4,107 | |||||||||||||||||||||
Provisions and post-employment benefits | 955 | 304 | -2,270 | 1,051 | 379 | 841 | -963 | |||||||||||||||||||||
Contract liabilities | -117 | -1,398 | 6,520 | -4,821 | -2,616 | -5,204 | 5,553 | |||||||||||||||||||||
Other operating assets and liabilities, net | 859 | 890 | -4,600 | 801 | -350 | -1,457 | -9,105 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 7,787 | 6,468 | 733 | 6,580 | -3,089 | -3,724 | -11,766 | ||||||||||||||||||||||
Interest received | 506 | 385 | 391 | 256 | 284 | 283 | 395 | |||||||||||||||||||||
Interest paid | -526 | -677 | -1,297 | -543 | -599 | -549 | -589 | |||||||||||||||||||||
Taxes paid | -1,642 | -1,606 | -1,593 | -976 | -1,685 | -1,451 | -1,256 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Cash flow from operating activities | 14,397 | 9,276 | 5,075 | 14,482 | 1,402 | -2,882 | -5,825 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Investing activities | ||||||||||||||||||||||||||||
Investments in property, plant and equipment | -540 | -699 | -434 | -720 | -817 | -806 | -954 | |||||||||||||||||||||
Sales of property, plant and equipment | 36 | 42 | 24 | 37 | 51 | 42 | 33 | |||||||||||||||||||||
Acquisitions/divestments of subs. and other operations, net | -62 | -48 | -106 | -225 | -160 | -911 | -844 | |||||||||||||||||||||
Product development | -264 | -327 | -386 | -551 | -485 | -562 | -575 | |||||||||||||||||||||
Purchase of interest-bearing securities | -5,517 | -5,845 | -1,618 | -11,318 | -1,854 | -2,132 | — | |||||||||||||||||||||
Sales of interest-bearing securities | 4,937 | 1,501 | 2,204 | 1,116 | 2,847 | 4,072 | 3,704 | |||||||||||||||||||||
Other investing activities | 1,113 | -611 | -1,025 | 4,854 | -1,445 | -2,116 | 1,006 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Cash flow from investing activities | -297 | -5,987 | -1,341 | -6,807 | -1,863 | -2,413 | 2,370 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Financing activities | ||||||||||||||||||||||||||||
Proceeds from issuance of borrowings | 1,161 | 2 | 1,967 | 11,578 | 6,097 | 1,026 | 1,027 | |||||||||||||||||||||
Repayment of borrowings | -5,127 | -16 | -10,401 | -1,666 | -2,306 | -2,832 | -1,080 | |||||||||||||||||||||
Dividends paid | -8 | -4,711 | — | -4,504 | -9 | -4,591 | — | |||||||||||||||||||||
Repayment of lease liabilities | -607 | -658 | -601 | -783 | -691 | -690 | -693 | |||||||||||||||||||||
Other financing activities | 356 | -313 | 538 | -899 | 2,029 | 18 | -24 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Cash flow from financing activities | -4,225 | -5,696 | -8,497 | 3,726 | 5,120 | -7,069 | -770 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Effect of exchange rate changes on cash | -1,288 | -705 | 1,421 | -3,111 | -90 | 562 | 9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Net change in cash and cash equivalents | 8,587 | -3,112 | -3,342 | 8,290 | 4,569 | -11,802 | -4,216 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Cash and cash equivalents, beginning of period | 28,736 | 31,848 | 35,190 | 26,900 | 22,331 | 34,133 | 38,349 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Cash and cash equivalents, end of period | 37,323 | 28,736 | 31,848 | 35,190 | 26,900 | 22,331 | 34,133 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 22 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Condensed Parent Company income statement
| Q3 | Jan-Sep | |||||||||||||||
SEK million | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net sales | — | — | — | — | ||||||||||||
Cost of sales | — | — | — | — | ||||||||||||
Gross income | — | — | — | — | ||||||||||||
Operating expenses | -252 | -177 | -983 | -1,376 | ||||||||||||
Other operating income and expenses | 747 | 973 | 4,245 | 2,903 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EBIT | 495 | 796 | 3,262 | 1,527 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Financial net | 2,630 | -31,895 | -7,273 | -16,179 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income (loss) after financial items | 3,125 | -31,099 | -4,011 | -14,652 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Transfers to (-) / from untaxed reserves | — | — | — | — | ||||||||||||
Income tax | -159 | -98 | -668 | -113 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income (loss) | 2,966 | -31,197 | -4,679 | -14,765 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Condensed Parent Company statement of comprehensive income (loss)
| Q3 | Jan-Sep | |||||||||||||||
SEK million | 2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income (loss) | 2,966 | -31,197 | -4,679 | -14,765 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Other comprehensive income (loss), net of tax | — | — | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income (loss) | 2,966 | -31,197 | -4,679 | -14,765 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| 23 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Condensed Parent Company balance sheet
SEK million | Sep 30 2024 | Dec 31 2023 | ||||||
Assets | ||||||||
Fixed assets | ||||||||
Intangible assets | 4 | — | ||||||
Tangible assets | 326 | 344 | ||||||
Financial assets ¹) | 120,845 | 126,523 | ||||||
|
|
|
| |||||
| 121,175 | 126,867 | |||||||
|
|
|
| |||||
Current assets | ||||||||
Receivables | 16,949 | 22,433 | ||||||
Short-term investments | 9,887 | 9,355 | ||||||
Cash and cash equivalents | 21,649 | 15,640 | ||||||
|
|
|
| |||||
| 48,485 | 47,428 | |||||||
|
|
|
| |||||
Total assets | 169,660 | 174,295 | ||||||
|
|
|
| |||||
Stockholders’ equity, provisions and liabilities | ||||||||
Equity | ||||||||
Restricted equity | 48,235 | 48,214 | ||||||
Non-restricted equity | 13,908 | 27,584 | ||||||
|
|
|
| |||||
| 62,143 | 75,798 | |||||||
|
|
|
| |||||
Provisions | 130 | 275 | ||||||
Non-current liabilities | 33,484 | 29,150 | ||||||
Current liabilities | 73,903 | 69,072 | ||||||
|
|
|
| |||||
Total stockholders’ equity, provisions and liabilities | 169,660 | 174,295 | ||||||
|
|
|
| |||||
¹) Of which interest-bearing securities, non-current | 14,806 | 9,930 | ||||||
| 24 Ericsson | Third quarter report 2024. October 15, 2024. | Financial statements | |
Table of Contents
Accounting policies and Explanatory notes (unaudited)
The Group
This condensed consolidated interim financial report for the reporting period ended September 30, 2024, has been prepared in accordance with International Accounting Standard IAS 34 “Interim Financial Reporting”. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and IFRS Interpretations Committee (IFRIC). The accounting policies adopted are consistent with those of the annual report for the year ended December 31, 2023, and should be read in conjunction with that annual report. Amendments to IFRS standards that became effective during 2024 do not have a material impact on the result and financial position of the Company.
| 25 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 40,016 | 37,679 | 33,715 | 44,998 | 41,537 | 42,440 | 42,467 | |||||||||||||||||||||
Of which Products | 31,242 | 28,583 | 25,397 | 34,704 | 31,740 | 32,774 | 32,175 | |||||||||||||||||||||
Of which Services | 8,774 | 9,096 | 8,318 | 10,294 | 9,797 | 9,666 | 10,292 | |||||||||||||||||||||
Cloud Software and Services | 14,953 | 15,180 | 13,045 | 19,558 | 15,564 | 15,108 | 13,400 | |||||||||||||||||||||
Of which Products | 5,240 | 4,814 | 4,529 | 7,046 | 5,010 | 5,161 | 4,455 | |||||||||||||||||||||
Of which Services | 9,713 | 10,366 | 8,516 | 12,512 | 10,554 | 9,947 | 8,945 | |||||||||||||||||||||
Enterprise | 6,319 | 6,484 | 5,970 | 6,698 | 6,673 | 6,379 | 5,995 | |||||||||||||||||||||
Other | 506 | 505 | 595 | 627 | 699 | 517 | 691 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Sequential change, percent | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 6 | % | 12 | % | -25 | % | 8 | % | -2 | % | 0 | % | -28 | % | ||||||||||||||
Of which Products | 9 | % | 13 | % | -27 | % | 9 | % | -3 | % | 2 | % | -30 | % | ||||||||||||||
Of which Services | -4 | % | 9 | % | -19 | % | 5 | % | 1 | % | -6 | % | -20 | % | ||||||||||||||
Cloud Software and Services | -1 | % | 16 | % | -33 | % | 26 | % | 3 | % | 13 | % | -34 | % | ||||||||||||||
Of which Products | 9 | % | 6 | % | -36 | % | 41 | % | -3 | % | 16 | % | -45 | % | ||||||||||||||
Of which Services | -6 | % | 22 | % | -32 | % | 19 | % | 6 | % | 11 | % | -26 | % | ||||||||||||||
Enterprise | -3 | % | 9 | % | -11 | % | 0 | % | 5 | % | 6 | % | -5 | % | ||||||||||||||
Other | 0 | % | -15 | % | -5 | % | -10 | % | 35 | % | -25 | % | -17 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 3 | % | 12 | % | -26 | % | 11 | % | 0 | % | 3 | % | -27 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year over year change, percent | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | -4 | % | -11 | % | -21 | % | -23 | % | -14 | % | -8 | % | 4 | % | ||||||||||||||
Of which Products | -2 | % | -13 | % | -21 | % | -24 | % | -11 | % | -7 | % | 3 | % | ||||||||||||||
Of which Services | -10 | % | -6 | % | -19 | % | -20 | % | -21 | % | -10 | % | 7 | % | ||||||||||||||
Cloud Software and Services | -4 | % | 0 | % | -3 | % | -3 | % | 10 | % | 8 | % | 11 | % | ||||||||||||||
Of which Products | 5 | % | -7 | % | 2 | % | -12 | % | 5 | % | 10 | % | 23 | % | ||||||||||||||
Of which Services | -8 | % | 4 | % | -5 | % | 3 | % | 12 | % | 7 | % | 6 | % | ||||||||||||||
Enterprise | -5 | % | 2 | % | 0 | % | 6 | % | 34 | % | 275 | % | 275 | % | ||||||||||||||
Other | -28 | % | -2 | % | -14 | % | -24 | % | 0 | % | -32 | % | 4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -4 | % | -7 | % | -15 | % | -16 | % | -5 | % | 3 | % | 14 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 111,410 | 71,394 | 33,715 | 171,442 | 126,444 | 84,907 | 42,467 | |||||||||||||||||||||
Of which Products | 85,222 | 53,980 | 25,397 | 131,393 | 96,689 | 64,949 | 32,175 | |||||||||||||||||||||
Of which Services | 26,188 | 17,414 | 8,318 | 40,049 | 29,755 | 19,958 | 10,292 | |||||||||||||||||||||
Cloud Software and Services | 43,178 | 28,225 | 13,045 | 63,630 | 44,072 | 28,508 | 13,400 | |||||||||||||||||||||
Of which Products | 14,583 | 9,343 | 4,529 | 21,672 | 14,626 | 9,616 | 4,455 | |||||||||||||||||||||
Of which Services | 28,595 | 18,882 | 8,516 | 41,958 | 29,446 | 18,892 | 8,945 | |||||||||||||||||||||
Enterprise | 18,773 | 12,454 | 5,970 | 25,745 | 19,047 | 12,374 | 5,995 | |||||||||||||||||||||
Other | 1,606 | 1,100 | 595 | 2,534 | 1,907 | 1,208 | 691 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year over year change, percent | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | -12 | % | -16 | % | -21 | % | -11 | % | -6 | % | -2 | % | 4 | % | ||||||||||||||
Of which Products | -12 | % | -17 | % | -21 | % | -11 | % | -5 | % | -2 | % | 3 | % | ||||||||||||||
Of which Services | -12 | % | -13 | % | -19 | % | -12 | % | -9 | % | -2 | % | 7 | % | ||||||||||||||
Cloud Software and Services | -2 | % | -1 | % | -3 | % | 5 | % | 9 | % | 9 | % | 11 | % | ||||||||||||||
Of which Products | 0 | % | -3 | % | 2 | % | 3 | % | 12 | % | 16 | % | 23 | % | ||||||||||||||
Of which Services | -3 | % | 0 | % | -5 | % | 6 | % | 8 | % | 6 | % | 6 | % | ||||||||||||||
Enterprise | -1 | % | 1 | % | 0 | % | 76 | % | 130 | % | 275 | % | 275 | % | ||||||||||||||
Other | -16 | % | -9 | % | -14 | % | -14 | % | -10 | % | -15 | % | 4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -9 | % | -11 | % | -15 | % | -3 | % | 3 | % | 8 | % | 14 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 26 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Gross income by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 19,332 | 17,139 | 14,851 | 18,626 | 16,146 | 16,318 | 16,869 | |||||||||||||||||||||
Cloud Software and Services | 5,537 | 5,407 | 4,834 | 7,174 | 5,494 | 4,944 | 4,476 | |||||||||||||||||||||
Enterprise | 3,307 | 3,310 | 2,865 | 2,968 | 3,253 | 2,954 | 2,841 | |||||||||||||||||||||
Other | 9 | -41 | 108 | -163 | -165 | -115 | -18 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 28,185 | 25,815 | 22,658 | 28,605 | 24,728 | 24,101 | 24,168 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 51,322 | 31,990 | 14,851 | 67,959 | 49,333 | 33,187 | 16,869 | |||||||||||||||||||||
Cloud Software and Services | 15,778 | 10,241 | 4,834 | 22,088 | 14,914 | 9,420 | 4,476 | |||||||||||||||||||||
Enterprise | 9,482 | 6,175 | 2,865 | 12,016 | 9,048 | 5,795 | 2,841 | |||||||||||||||||||||
Other | 76 | 67 | 108 | -461 | -298 | -133 | -18 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 76,658 | 48,473 | 22,658 | 101,602 | 72,997 | 48,269 | 24,168 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
EBIT (loss) by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 7,492 | 4,750 | 4,156 | 6,112 | 4,627 | 2,623 | 6,020 | |||||||||||||||||||||
Cloud Software and Services | -443 | -728 | -363 | 1,836 | 86 | -1,200 | -942 | |||||||||||||||||||||
Enterprise | -1,201 | -17,424 | -1,582 | -1,643 | -33,302 | -1,679 | -1,712 | |||||||||||||||||||||
Other | -74 | -117 | 1,889 | -457 | -319 | -56 | -320 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 5,774 | -13,519 | 4,100 | 5,848 | -28,908 | -312 | 3,046 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 16,398 | 8,906 | 4,156 | 19,382 | 13,270 | 8,643 | 6,020 | |||||||||||||||||||||
Cloud Software and Services | -1,534 | -1,091 | -363 | -220 | -2,056 | -2,142 | -942 | |||||||||||||||||||||
Enterprise | -20,207 | -19,006 | -1,582 | -38,336 | -36,693 | -3,391 | -1,712 | |||||||||||||||||||||
Other | 1,698 | 1,772 | 1,889 | -1,152 | -695 | -376 | -320 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -3,645 | -9,419 | 4,100 | -20,326 | -26,174 | 2,734 | 3,046 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 27 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by market area by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
North America | 20,360 | 16,588 | 13,944 | 14,404 | 13,456 | 14,443 | 16,927 | |||||||||||||||||||||
Europe and Latin America 1) 2) | 15,150 | 15,639 | 13,229 | 19,218 | 15,475 | 15,972 | 14,219 | |||||||||||||||||||||
South East Asia, Oceania and India | 7,702 | 7,694 | 8,565 | 11,804 | 13,764 | 13,839 | 13,911 | |||||||||||||||||||||
North East Asia | 3,686 | 4,561 | 3,424 | 9,129 | 5,378 | 5,062 | 4,363 | |||||||||||||||||||||
Middle East and Africa | 4,883 | 4,941 | 4,633 | 7,750 | 6,455 | 5,348 | 4,186 | |||||||||||||||||||||
Other1) 2) | 10,013 | 10,425 | 9,530 | 9,576 | 9,945 | 9,780 | 8,947 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1) Of which in Sweden | 432 | 583 | 729 | 339 | 454 | 370 | 611 | |||||||||||||||||||||
2) Of which in EU | 8,157 | 8,606 | 7,566 | 10,148 | 7,850 | 8,054 | 8,205 | |||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Sequential change, percent | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
North America | 23 | % | 19 | % | -3 | % | 7 | % | -7 | % | -15 | % | -33 | % | ||||||||||||||
Europe and Latin America 1) 2) | -3 | % | 18 | % | -31 | % | 24 | % | -3 | % | 12 | % | -32 | % | ||||||||||||||
South East Asia, Oceania and India | 0 | % | -10 | % | -27 | % | -14 | % | -1 | % | -1 | % | 24 | % | ||||||||||||||
North East Asia | -19 | % | 33 | % | -62 | % | 70 | % | 6 | % | 16 | % | -48 | % | ||||||||||||||
Middle East and Africa | -1 | % | 7 | % | -40 | % | 20 | % | 21 | % | 28 | % | -43 | % | ||||||||||||||
Other1) 2) | -4 | % | 9 | % | 0 | % | -4 | % | 2 | % | 9 | % | -30 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 3 | % | 12 | % | -26 | % | 11 | % | 0 | % | 3 | % | -27 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1) Of which in Sweden | -26 | % | -20 | % | 115 | % | -25 | % | 23 | % | -39 | % | -21 | % | ||||||||||||||
2) Of which in EU | -5 | % | 14 | % | -25 | % | 29 | % | -3 | % | -2 | % | -22 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year over year change, percent | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
North America | 51 | % | 15 | % | -18 | % | -43 | % | -49 | % | -37 | % | -18 | % | ||||||||||||||
Europe and Latin America 1) 2) | -2 | % | -2 | % | -7 | % | -8 | % | 1 | % | 4 | % | -7 | % | ||||||||||||||
South East Asia, Oceania and India | -44 | % | -44 | % | -38 | % | 5 | % | 74 | % | 74 | % | 138 | % | ||||||||||||||
North East Asia | -31 | % | -10 | % | -22 | % | 9 | % | -4 | % | -31 | % | -20 | % | ||||||||||||||
Middle East and Africa | -24 | % | -8 | % | 11 | % | 5 | % | 14 | % | 2 | % | -3 | % | ||||||||||||||
Other1) 2) | 1 | % | 7 | % | 7 | % | -25 | % | 41 | % | 158 | % | 157 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -4 | % | -7 | % | -15 | % | -16 | % | -5 | % | 3 | % | 14 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1) Of which in Sweden | -5 | % | 58 | % | 19 | % | -56 | % | -45 | % | -61 | % | -10 | % | ||||||||||||||
2) Of which in EU | 4 | % | 7 | % | -8 | % | -3 | % | -5 | % | -5 | % | -5 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
North America | 50,892 | 30,532 | 13,944 | 59,230 | 44,826 | 31,370 | 16,927 | |||||||||||||||||||||
Europe and Latin America 1) 2) | 44,018 | 28,868 | 13,229 | 64,884 | 45,666 | 30,191 | 14,219 | |||||||||||||||||||||
South East Asia, Oceania and India | 23,961 | 16,259 | 8,565 | 53,318 | 41,514 | 27,750 | 13,911 | |||||||||||||||||||||
North East Asia | 11,671 | 7,985 | 3,424 | 23,932 | 14,803 | 9,425 | 4,363 | |||||||||||||||||||||
Middle East and Africa | 14,457 | 9,574 | 4,633 | 23,739 | 15,989 | 9,534 | 4,186 | |||||||||||||||||||||
Other1) 2) | 29,968 | 19,955 | 9,530 | 38,248 | 28,672 | 18,727 | 8,947 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1) Of which in Sweden | 1,744 | 1,312 | 729 | 1,774 | 1,435 | 981 | 611 | |||||||||||||||||||||
2) Of which in EU | 24,329 | 16,172 | 7,566 | 34,257 | 24,109 | 16,259 | 8,205 | |||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, year over year change, percent | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
North America | 14 | % | -3 | % | -18 | % | -38 | % | -36 | % | -28 | % | -18 | % | ||||||||||||||
Europe and Latin America 1) 2) | -4 | % | -4 | % | -7 | % | -3 | % | -1 | % | -1 | % | -7 | % | ||||||||||||||
South East Asia, Oceania and India | -42 | % | -41 | % | -38 | % | 62 | % | 91 | % | 101 | % | 138 | % | ||||||||||||||
North East Asia | -21 | % | -15 | % | -22 | % | -10 | % | -19 | % | -26 | % | -20 | % | ||||||||||||||
Middle East and Africa | -10 | % | 0 | % | 11 | % | 5 | % | 5 | % | 0 | % | -3 | % | ||||||||||||||
Other1) 2) | 5 | % | 7 | % | 7 | % | 41 | % | 100 | % | 157 | % | 157 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -9 | % | -11 | % | -15 | % | -3 | % | 3 | % | 8 | % | 14 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1) Of which in Sweden | 22 | % | 34 | % | 19 | % | -45 | % | -42 | % | -40 | % | -10 | % | ||||||||||||||
2) Of which in EU | 1 | % | -1 | % | -8 | % | -4 | % | -5 | % | -5 | % | -5 | % | ||||||||||||||
| 28 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Net sales by market area by segment
| Q3 2024 | Jan-Sep 2024 | |||||||||||||||||||||||||||||||||||||||
SEK million | Networks | Cloud Software and Services | Enterprise | Other | Total | Networks | Cloud Software and Services | Enterprise | Other | Total | ||||||||||||||||||||||||||||||
North America | 16,746 | 3,467 | 146 | 1 | 20,360 | 40,623 | 9,842 | 340 | 87 | 50,892 | ||||||||||||||||||||||||||||||
Europe and Latin America | 9,955 | 5,117 | 78 | 0 | 15,150 | 28,497 | 15,315 | 206 | 0 | 44,018 | ||||||||||||||||||||||||||||||
South East Asia, Oceania and India | 5,549 | 2,149 | 5 | -1 | 7,702 | 17,539 | 6,401 | 21 | 0 | 23,961 | ||||||||||||||||||||||||||||||
North East Asia | 2,834 | 828 | 4 | 20 | 3,686 | 8,921 | 2,635 | 10 | 105 | 11,671 | ||||||||||||||||||||||||||||||
Middle East and Africa | 2,115 | 2,606 | 161 | 1 | 4,883 | 7,258 | 6,720 | 491 | -12 | 14,457 | ||||||||||||||||||||||||||||||
Other¹) | 2,817 | 786 | 5,925 | 485 | 10,013 | 8,572 | 2,265 | 17,705 | 1,426 | 29,968 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 40,016 | 14,953 | 6,319 | 506 | 61,794 | 111,410 | 43,178 | 18,773 | 1,606 | 174,967 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Share of total | 65 | % | 24 | % | 10 | % | 1 | % | 100 | % | 63 | % | 25 | % | 11 | % | 1 | % | 100 | % | ||||||||||||||||||||
| 1) | Includes primarily IPR licensing revenues and a major part of segment Enterprise. |
| Q3 2024 | ||||||||||||||||||||
Sequential change, percent | Networks | Cloud Software and Services | Enterprise | Other | Total | |||||||||||||||
North America | 28 | % | 4 | % | 8 | % | -200 | % | 23 | % | ||||||||||
Europe and Latin America | -2 | % | -6 | % | 11 | % | - | -3 | % | |||||||||||
South East Asia, Oceania and India | 6 | % | -12 | % | -17 | % | -200 | % | 0 | % | ||||||||||
North East Asia | -21 | % | -10 | % | 300 | % | -53 | % | -19 | % | ||||||||||
Middle East and Africa | -14 | % | 16 | % | -36 | % | -108 | % | -1 | % | ||||||||||
Other | -10 | % | -2 | % | -2 | % | 2 | % | -4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 6 | % | -1 | % | -3 | % | 0 | % | 3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
| Q3 2024 | Jan-Sep 2024 | |||||||||||||||||||||||||||||||||||||||
Year over year change, percent | Networks | Cloud Software and Services | Enterprise | Other | Total | Networks | Cloud Software and Services | Enterprise | Other | Total | ||||||||||||||||||||||||||||||
North America | 75 | % | -6 | % | 49 | % | -99 | % | 51 | % | 18 | % | -3 | % | 86 | % | 10 | % | 14 | % | ||||||||||||||||||||
Europe and Latin America | -4 | % | 1 | % | 1 | % | - | -2 | % | -5 | % | 0 | % | 20 | % | -100 | % | -4 | % | |||||||||||||||||||||
South East Asia, Oceania and India | -50 | % | -18 | % | -55 | % | - | -44 | % | -49 | % | -10 | % | -25 | % | -100 | % | -42 | % | |||||||||||||||||||||
North East Asia | -36 | % | -4 | % | -75 | % | -76 | % | -31 | % | -24 | % | -11 | % | -66 | % | -25 | % | -21 | % | ||||||||||||||||||||
Middle East and Africa | -43 | % | -3 | % | 118 | % | -200 | % | -24 | % | -16 | % | -5 | % | 87 | % | -1300 | % | -10 | % | ||||||||||||||||||||
Other | 19 | % | 26 | % | -7 | % | -11 | % | 1 | % | 19 | % | 51 | % | -4 | % | -11 | % | 5 | % | ||||||||||||||||||||
|
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|
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|
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|
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|
|
|
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|
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| |||||||||||||||||||||
Total | -4 | % | -4 | % | -5 | % | -28 | % | -4 | % | -12 | % | -2 | % | -1 | % | -16 | % | -9 | % | ||||||||||||||||||||
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| 29 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Top 5 countries in sales
| Q3 | Jan-Sep | |||||||||||||||
Country, percentage of net sales 1) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
United States | 44 | % | 31 | % | 40 | % | 33 | % | ||||||||
India | 5 | % | 15 | % | 7 | % | 13 | % | ||||||||
China | 3 | % | 4 | % | 4 | % | 4 | % | ||||||||
United Kingdom | 4 | % | 4 | % | 3 | % | 3 | % | ||||||||
Japan | 3 | % | 3 | % | 3 | % | 3 | % | ||||||||
| 1) | Based on Jan-Sep 2024. Includes IPR licensing revenues. |
IPR licensing revenues by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 2,853 | 3,187 | 2,539 | 2,176 | 2,283 | 2,603 | 2,041 | |||||||||||||||||||||
Cloud Software and Services | 626 | 700 | 557 | 478 | 500 | 572 | 448 | |||||||||||||||||||||
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| |||||||||||||||
Total | 3,479 | 3,887 | 3,096 | 2,654 | 2,783 | 3,175 | 2,489 | |||||||||||||||||||||
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| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 8,579 | 5,726 | 2,539 | 9,103 | 6,927 | 4,644 | 2,041 | |||||||||||||||||||||
Cloud Software and Services | 1,883 | 1,257 | 557 | 1,998 | 1,520 | 1,020 | 448 | |||||||||||||||||||||
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| |||||||||||||||
Total | 10,462 | 6,983 | 3,096 | 11,101 | 8,447 | 5,664 | 2,489 | |||||||||||||||||||||
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Note 3 – Financial income and expenses, net
Financial income and expenses, net
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Financial income | 724 | 742 | 681 | 518 | 471 | 639 | 517 | |||||||||||||||||||||
Financial expenses | -991 | -1,029 | -1,099 | -1,287 | -1,024 | -942 | -865 | |||||||||||||||||||||
Net foreign exchange gains/ losses | -234 | -74 | -53 | -169 | -166 | -116 | -569 | |||||||||||||||||||||
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| |||||||||||||||
Total | -501 | -361 | -471 | -938 | -719 | -419 | -917 | |||||||||||||||||||||
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| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Financial income | 2,147 | 1,423 | 681 | 2,145 | 1,627 | 1,156 | 517 | |||||||||||||||||||||
Financial expenses | -3,119 | -2,128 | -1,099 | -4,118 | -2,831 | -1,807 | -865 | |||||||||||||||||||||
Net foreign exchange gains/ losses | -361 | -127 | -53 | -1,020 | -851 | -685 | -569 | |||||||||||||||||||||
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|
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| |||||||||||||||
Total | -1,333 | -832 | -471 | -2,993 | -2,055 | -1,336 | -917 | |||||||||||||||||||||
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| 30 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Provisions
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Opening balance | 10,200 | 10,065 | 11,706 | 11,535 | 12,005 | 10,541 | 11,588 | |||||||||||||||||||||
Additions 1) | 2,761 | 2,472 | 783 | 2,556 | 1,462 | 4,760 | 1,699 | |||||||||||||||||||||
Utilization | -1,872 | -1,448 | -2,140 | -1,728 | -1,422 | -2,953 | -2,463 | |||||||||||||||||||||
Of which restructuring | -1,286 | -755 | -932 | -1,175 | -994 | -423 | -274 | |||||||||||||||||||||
Reversal of excess amounts | -333 | -411 | -364 | -368 | -384 | -564 | -224 | |||||||||||||||||||||
Reclassification, translation difference and other | -212 | -478 | 80 | -289 | -126 | 221 | -59 | |||||||||||||||||||||
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| |||||||||||||||
Closing balance | 10,544 | 10,200 | 10,065 | 11,706 | 11,535 | 12,005 | 10,541 | |||||||||||||||||||||
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|
| |||||||||||||||
Of which restructuring | 3,897 | 3,757 | 2,953 | 3,720 | 4,235 | 4,413 | 1,096 | |||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Opening balance | 11,706 | 11,706 | 11,706 | 11,588 | 11,588 | 11,588 | 11,588 | |||||||||||||||||||||
Additions 1) | 6,016 | 3,255 | 783 | 10,477 | 7,921 | 6,459 | 1,699 | |||||||||||||||||||||
Utilization | -5,460 | -3,588 | -2,140 | -8,566 | -6,838 | -5,416 | -2,463 | |||||||||||||||||||||
Of which restructuring | -2,973 | -1,687 | -932 | -2,866 | -1,691 | -697 | -274 | |||||||||||||||||||||
Reversal of excess amounts | -1,108 | -775 | -364 | -1,540 | -1,172 | -788 | -224 | |||||||||||||||||||||
Reclassification, translation difference and other | -610 | -398 | 80 | -253 | 36 | 162 | -59 | |||||||||||||||||||||
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| |||||||||||||||
Closing balance | 10,544 | 10,200 | 10,065 | 11,706 | 11,535 | 12,005 | 10,541 | |||||||||||||||||||||
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| |||||||||||||||
Of which restructuring | 3,897 | 3,757 | 2,953 | 3,720 | 4,235 | 4,413 | 1,096 | |||||||||||||||||||||
| 1) | Additions in 2023 and 2024 mainly relates to restructuring provisions for the cost-reduction activities. In Q1 2023 the Company entered into the DOJ Plea Agreement with the DOJ and the provision of SEK -2.3 billion (including estimated expenses for the extended compliance monitorship) made in Q4 2022 was utilized in Q2 2023. |
| 31 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Note 5 – Financial risk management
There have been no changes to the fair value hierarchy categorization from that presented in the latest Annual Report. Where Level 2 and Level 3 fair value hierarchies apply, the inputs and valuation methods used remained unchanged. The book values and fair values of financial instruments are as follows:
Financial instruments
SEK billion | Sep 30 2024 | Dec 31 2023 | ||||||||||||||||||||||||||||||
| Fair value hierarchy level | Fair value hierarchy level | |||||||||||||||||||||||||||||||
| Carrying value | Level 1 | Level 2 | Level 3 | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Assets at fair value through profit or loss | ||||||||||||||||||||||||||||||||
Customer finance 1) | 4.1 | — | — | 4.1 | 6.9 | — | — | 6.9 | ||||||||||||||||||||||||
Interest-bearing securities | 24.6 | 23.4 | 1.2 | — | 19.1 | 18.6 | 0.5 | — | ||||||||||||||||||||||||
Cash equivalents 2) | 19.4 | 0.3 | 19.1 | — | 17.5 | 0.8 | 16.7 | — | ||||||||||||||||||||||||
Other financial assets | 2.8 | 0.9 | — | 1.9 | 2.1 | 0.1 | — | 2.0 | ||||||||||||||||||||||||
Other current assets | 1.2 | — | 1.2 | — | 1.9 | — | 1.9 | — | ||||||||||||||||||||||||
Assets at fair value through OCI | ||||||||||||||||||||||||||||||||
Trade receivables | 38.0 | — | — | 38.0 | 42.2 | — | — | 42.2 | ||||||||||||||||||||||||
Assets at amortized costs | ||||||||||||||||||||||||||||||||
Interest-bearing securities | 0.3 | — | — | — | 0.4 | — | — | — | ||||||||||||||||||||||||
Other financial assets | 0.6 | — | — | — | 0.6 | — | — | — | ||||||||||||||||||||||||
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|
|
| |||||||||||||||||
Total financial assets | 91.0 | 90.7 | ||||||||||||||||||||||||||||||
|
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|
|
|
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|
|
| |||||||||||||||||
Financial liabilities at designated FVTPL | ||||||||||||||||||||||||||||||||
Parent company borrowings | -34.0 | -19.2 | -14.8 | — | -38.0 | -23.7 | -14.3 | — | ||||||||||||||||||||||||
Financial liabilities at FVTPL | ||||||||||||||||||||||||||||||||
Other current liabilities | -0.8 | — | -0.8 | — | -1.8 | — | -1.8 | — | ||||||||||||||||||||||||
Liabilities at amortized cost | ||||||||||||||||||||||||||||||||
Trade payables | -25.9 | — | — | — | -27.8 | — | — | — | ||||||||||||||||||||||||
Borrowings | -2.7 | — | — | — | -8.9 | — | — | — | ||||||||||||||||||||||||
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|
| |||||||||||||||||
Total financial liabilities | -63.4 | -76.4 | ||||||||||||||||||||||||||||||
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| |||||||||||||||||
| 1) | Year to date movements of customer finance receivables are as follows: additions of SEK 15.4 billion, disposals and repayments of SEK 18.7 billion and revaluation gain of SEK 0.1 billion. |
| 2) | Total Cash and cash equivalent is SEK 37.3 (35.2 on Dec 31, 2023) billion, of which SEK 19.4 (17.5 on Dec 31, 2023) billion relating to Cash equivalents are presented in the table above. |
Exchange rates used in the consolidation
| Jan-Sep | Jan-Dec | |||||||||||
| 2024 | 2023 | 2023 | ||||||||||
EUR/SEK -closing rate | 11.31 | 11.48 | 11.09 | |||||||||
USD/SEK -closing rate | 10.11 | 10.82 | 10.01 | |||||||||
| 32 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Information on investments
Investments in assets subject to depreciation, amortization, impairment and write-downs
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Additions | ||||||||||||||||||||||||||||
Property, plant and equipment | 540 | 699 | 434 | 720 | 817 | 806 | 954 | |||||||||||||||||||||
Capitalized development expenses | 264 | 327 | 386 | 551 | 485 | 562 | 575 | |||||||||||||||||||||
IPR, brands and other intangible assets | 78 | 45 | 1 | 1 | — | 94 | 2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 882 | 1,071 | 821 | 1,272 | 1,302 | 1,462 | 1,531 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Depreciation, amortization and impairment losses | ||||||||||||||||||||||||||||
Property, plant and equipment | 924 | 1,161 | 941 | 1,354 | 1,331 | 1,066 | 1,183 | |||||||||||||||||||||
Capitalized development expenses | 410 | 349 | 312 | 274 | 222 | 244 | 397 | |||||||||||||||||||||
Goodwill, IPR, brands and other intangible assets | 429 | 15,945 | 793 | 846 | 32,735 | 853 | 803 | |||||||||||||||||||||
Right-of-use assets | 529 | 560 | 566 | 609 | 613 | 650 | 709 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 2,292 | 18,015 | 2,612 | 3,083 | 34,901 | 2,813 | 3,092 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Additions | ||||||||||||||||||||||||||||
Property, plant and equipment | 1,673 | 1,133 | 434 | 3,297 | 2,577 | 1,760 | 954 | |||||||||||||||||||||
Capitalized development expenses | 977 | 713 | 386 | 2,173 | 1,622 | 1,137 | 575 | |||||||||||||||||||||
IPR, brands and other intangible assets | 124 | 46 | 1 | 97 | 96 | 96 | 2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 2,774 | 1,892 | 821 | 5,567 | 4,295 | 2,993 | 1,531 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Depreciation, amortization and impairment losses | ||||||||||||||||||||||||||||
Property, plant and equipment | 3,026 | 2,102 | 941 | 4,934 | 3,580 | 2,249 | 1,183 | |||||||||||||||||||||
Capitalized development expenses | 1,071 | 661 | 312 | 1,137 | 863 | 641 | 397 | |||||||||||||||||||||
Goodwill, IPR, brands and other intangible assets | 17,167 | 16,738 | 793 | 35,237 | 34,391 | 1,656 | 803 | |||||||||||||||||||||
Right-of-use assets | 1,655 | 1,126 | 566 | 2,581 | 1,972 | 1,359 | 709 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 22,919 | 20,627 | 2,612 | 43,889 | 40,806 | 5,905 | 3,092 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Note 7 – Contingent liabilities and Assets pledged as collateral
Contingent liabilities and Assets pledged as collateral
SEK million | Sep 30 2024 | Dec 31 2023 | ||||||
Contingent liabilities | 3,578 | 3,037 | ||||||
Assets pledged as collateral | 9,055 | 8,501 | ||||||
| 33 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Number of shares and earnings per share
| Q3 | Jan-Sep | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
Number of shares, end of period (million) | 3,348 | 3,344 | 3,348 | 3,344 | ||||||||||||
Of which class A-shares (million) | 262 | 262 | 262 | 262 | ||||||||||||
Of which class B-shares (million) | 3,086 | 3,082 | 3,086 | 3,082 | ||||||||||||
Number of treasury shares, end of period (million) | 16 | 14 | 16 | 14 | ||||||||||||
Number of shares outstanding, basic, end of period (million) | 3,333 | 3,330 | 3,333 | 3,330 | ||||||||||||
Numbers of shares outstanding, diluted, end of period (million) | 3,339 | 3,337 | 3,339 | 3,337 | ||||||||||||
Average number of treasury shares (million) | 16 | 14 | 14 | 10 | ||||||||||||
Average number of shares outstanding, basic (million) | 3,333 | 3,330 | 3,332 | 3,330 | ||||||||||||
Average number of shares outstanding, diluted (million)1) | 3,339 | 3,337 | 3,339 | 3,337 | ||||||||||||
Earnings (loss) per share, basic (SEK)2) | 1.14 | -9.21 | -1.43 | -8.96 | ||||||||||||
Earnings (loss) per share, diluted (SEK)3) | 1.14 | -9.21 | -1.43 | -8.96 | ||||||||||||
| 1) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
| 2) | Based on net income attributable to owners of the Parent Company. |
The proposed dividend of SEK 2.70 per share was approved by the AGM on 3 April 2024. The first of two equal dividend payments of SEK 1.35 per share was paid on 10 April 2024, and the second was paid on 7 October 2024.
Number of employees
| 2024 | 2023 | |||||||||||||||||||||||||||
End of period | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||||||||
North America | 10,272 | 10,373 | 10,498 | 10,744 | 10,860 | 11,518 | 11,765 | |||||||||||||||||||||
Europe and Latin America1) | 44,133 | 45,085 | 45,143 | 45,380 | 45,821 | 47,521 | 47,500 | |||||||||||||||||||||
South East Asia, Oceania and India | 26,327 | 26,558 | 27,016 | 27,016 | 27,648 | 27,726 | 27,981 | |||||||||||||||||||||
North East Asia | 11,110 | 11,619 | 12,084 | 12,331 | 12,535 | 12,602 | 13,136 | |||||||||||||||||||||
Middle East and Africa | 4,142 | 4,350 | 4,399 | 4,481 | 4,487 | 4,523 | 4,549 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 95,984 | 97,985 | 99,140 | 99,952 | 101,351 | 103,890 | 104,931 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
1)Of which in Sweden | 13,633 | 14,109 | 13,849 | 13,977 | 14,109 | 14,713 | 14,384 | |||||||||||||||||||||
Note 10 – Goodwill and Customer relationships, IPR and other intangible assets
Goodwill and Customer relationships, IPR and other intangible assets
| Jan-Sep 2024 | Jan-Dec 2023 | |||||||||||||||
Year to date, SEK million | Goodwill | Intangible assets | Goodwill | Intangible assets | ||||||||||||
Opening balance | 52,944 | 22,667 | 84,570 | 26,340 | ||||||||||||
Additions | — | 124 | — | 97 | ||||||||||||
Acquired business | — | — | 348 | 306 | ||||||||||||
Amortizations | — | -2,047 | — | -3,321 | ||||||||||||
Impairment losses | -1,260 | -13,860 | -31,897 | -19 | ||||||||||||
Translation differences | 543 | 851 | -77 | -736 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Closing balance | 52,227 | 7,735 | 52,944 | 22,667 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
The second quarter 2024 includes an impairment loss mainly attributed to the Vonage acquisition of SEK -15.1 (-31.9) billion. The net income impact after tax is SEK -11.4 (-31.9) billion and reported in segment Enterprise. Of the total impairment losses SEK -1.3 (-31.9) billion impacts goodwill, reported on the line-item Other operating income and expenses, and SEK -13.9 (0.0) billion impacts intangible assets, reported on the line-item Research and development expenses of SEK -1.2 billion and Selling and administrative expenses of SEK -12.6 billion.
The impairment charge in the Vonage CGU is a result of the lower market growth outlook. A change in the EBITA assumptions remains the most sensitive to a possible change.
| 34 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Note 11 – Information on future divestment
The company has entered into a binding agreement in relation to the sale of iconectiv, which is an acquired US subsidiary (83.3% ownership) forming part of Segment Enterprise and is a provider of network number portability solutions and data exchange services. The sale, which is subject to the customary closing conditions including regulatory approvals, is expected to be completed during the first half of 2025. The company expects to record a profit on sale of the company. Ericsson’s cash benefit from the transaction, after the settlement of anticipated taxes, transaction expenses, and other liabilities, is expected to be approximately SEK 10.6 billion1) (USD 1.0 billion). The assets and liabilities for iconectiv, which are included in the consolidated balance sheet, are shown in the table below.
| 1) | Assuming a USD/SEK exchange rate of 10.56. Realized exchange rate to be determined on closing. |
Goodwill | 1,089 | |||
Customer relationships, IPR and other intangible assets | 90 | |||
Property, plant and equipment | 179 | |||
Right-of-use assets | 163 | |||
Trade receivables | 335 | |||
Cash and cash equivalents | 657 | |||
Other assets | 158 | |||
|
| |||
Total assets | 2,671 | |||
|
|
Lease liabilities | 169 | |||
Contract liabilities | 297 | |||
Current tax liabilities | 110 | |||
Other liabilities | 270 | |||
|
| |||
Total liabilities | 846 | |||
|
|
| 35 Ericsson | Third quarter report 2024. October 15, 2024. | Accounting policies and Explanatory notes | |
Table of Contents
Alternative performance measures (unaudited)
In this section, the Company presents its Alternative Performance Measures (APMs), which are not recognized measures of financial performance under IFRS. The presentation of APMs has limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS.
APMs are presented to enhance an investor’s evaluation of ongoing operating results, to aid in forecasting future periods and to facilitate meaningful comparison of results between periods.
Management uses these APMs to, among other things, evaluate ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of certain performance-based compensation. APMs should not be viewed as
substitutes for income statement or cash flow items computed in accordance with IFRS.
This section also includes a reconciliation of the APMs to the most directly reconcilable line items in the financial statements. For more information about non-IFRS key operating measures, see Ericsson Annual Report 2023.
As from the second quarter some of the APMs have been renamed and the use of “Adjusted” replaces “excluding restructuring charges.” This is a change in nomenclature only. The calculation methodology and reconciliation are the same.
Rolling four quarters of EBIT has been removed and is replaced by Rolling four quarters of EBITA. The main reason for the update is to align with the targets set for the Group on EBITA.
Sales growth adjusted for comparable units and currency
Sales growth adjusted for the impact of acquisitions and divestments as well as the effects of foreign currency fluctuations. Also named organic sales growth.
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, year over year change | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Reported net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Acquired business | — | — | — | — | -1,000 | -4,154 | -3,894 | |||||||||||||||||||||
Net FX impact | 1,832 | 22 | 740 | -111 | -2,052 | -3,662 | -3,596 | |||||||||||||||||||||
Comparable net sales, excluding FX impact | 63,626 | 59,870 | 54,065 | 71,770 | 61,421 | 56,628 | 55,063 | |||||||||||||||||||||
Comparable quarter net sales adj. for acq/div business | 64,473 | 64,444 | 62,553 | 85,980 | 68,040 | 62,292 | 55,061 | |||||||||||||||||||||
Organic sales growth (%) | -1 | % | -7 | % | -14 | % | -17 | % | -10 | % | -9 | % | 0 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, year over year change | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Reported net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Acquired business | — | — | — | -9,048 | -9,048 | -8,048 | -3,894 | |||||||||||||||||||||
Net FX impact | 2,594 | 762 | 740 | -9,421 | -9,310 | -7,258 | -3,596 | |||||||||||||||||||||
Comparable net sales, excluding FX impact | 177,561 | 113,935 | 54,065 | 244,882 | 173,112 | 111,691 | 55,063 | |||||||||||||||||||||
Comparable quarter net sales adj. for acq/div business | 191,470 | 126,997 | 62,553 | 271,373 | 185,393 | 117,353 | 55,061 | |||||||||||||||||||||
Organic sales growth (%) | -7 | % | -10 | % | -14 | % | -10 | % | -7 | % | -5 | % | 0 | % | ||||||||||||||
| 36 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Items excluding restructuring charges and impairments of goodwill and intangible assets
Gross income, operating expenses, and EBIT are presented excluding restructuring charges, and for certain measures, as a percentage of net sales. EBIT is also presented excluding restructuring charges and impairments of goodwill and intangible assets.
| 2024 |
| 2023 | ||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Gross income | 28,185 | 25,815 | 22,658 | 28,605 | 24,728 | 24,101 | 24,168 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Gross margin (%) | 45.6 | % | 43.1 | % | 42.5 | % | 39.8 | % | 38.4 | % | 37.4 | % | 38.6 | % | ||||||||||||||
Gross income | 28,185 | 25,815 | 22,658 | 28,605 | 24,728 | 24,101 | 24,168 | |||||||||||||||||||||
Restructuring charges included in cost of sales | 424 | 466 | 122 | 956 | 548 | 552 | 746 | |||||||||||||||||||||
Adjusted gross income | 28,609 | 26,281 | 22,780 | 29,561 | 25,276 | 24,653 | 24,914 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Adjusted gross margin (%) | 46.3 | % | 43.9 | % | 42.7 | % | 41.1 | % | 39.2 | % | 38.3 | % | 39.8 | % | ||||||||||||||
Operating expenses | -22,442 | -38,084 | -20,519 | -22,686 | -21,629 | -24,733 | -21,139 | |||||||||||||||||||||
Restructuring charges included in R&D expenses | 966 | 805 | -10 | 484 | 197 | 1,659 | 91 | |||||||||||||||||||||
Restructuring charges included in selling and administrative expenses | 163 | 357 | 93 | 80 | 143 | 922 | 143 | |||||||||||||||||||||
Operating expenses excluding restructuring charges | -21,313 | -36,922 | -20,436 | -22,122 | -21,289 | -22,152 | -20,905 | |||||||||||||||||||||
EBIT (loss) | 5,774 | -13,519 | 4,100 | 5,848 | -28,908 | -312 | 3,046 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
EBIT margin (%) | 9.3 | % | -22.6 | % | 7.7 | % | 8.1 | % | -44.8 | % | -0.5 | % | 4.9 | % | ||||||||||||||
EBIT (loss) | 5,774 | -13,519 | 4,100 | 5,848 | -28,908 | -312 | 3,046 | |||||||||||||||||||||
Total restructuring charges | 1,553 | 1,628 | 205 | 1,520 | 888 | 3,133 | 980 | |||||||||||||||||||||
Adjusted EBIT (loss) | 7,327 | -11,891 | 4,305 | 7,368 | -28,020 | 2,821 | 4,026 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Adjusted EBIT margin (%) | 11.9 | % | -19.9 | % | 8.1 | % | 10.3 | % | -43.5 | % | 4.4 | % | 6.4 | % | ||||||||||||||
Adjusted EBIT (loss) | 7,327 | -11,891 | 4,305 | 7,368 | -28,020 | 2,821 | 4,026 | |||||||||||||||||||||
Impairment of goodwill and intangible assets | — | 15,120 | — | — | 31,916 | — | — | |||||||||||||||||||||
Adjusted EBIT excluding impairments of goodwill and intangible assets | 7,327 | 3,229 | 4,305 | 7,368 | 3,896 | 2,821 | 4,026 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Adjusted EBIT margin excluding impairments of goodwill and intangible assets (%) | 11.9 | % | 5.4 | % | 8.1 | % | 10.3 | % | 6.0 | % | 4.4 | % | 6.4 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Gross income | 76,658 | 48,473 | 22,658 | 101,602 | 72,997 | 48,269 | 24,168 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Gross margin (%) | 43.8 | % | 42.8 | % | 42.5 | % | 38.6 | % | 38.1 | % | 38.0 | % | 38.6 | % | ||||||||||||||
Gross income | 76,658 | 48,473 | 22,658 | 101,602 | 72,997 | 48,269 | 24,168 | |||||||||||||||||||||
Restructuring charges included in cost of sales | 1,012 | 588 | 122 | 2,802 | 1,846 | 1,298 | 746 | |||||||||||||||||||||
Adjusted gross income | 77,670 | 49,061 | 22,780 | 104,404 | 74,843 | 49,567 | 24,914 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Adjusted gross margin (%) | 44.4 | % | 43.4 | % | 42.7 | % | 39.6 | % | 39.1 | % | 39.0 | % | 39.8 | % | ||||||||||||||
Operating expenses | -81,045 | -58,603 | -20,519 | -90,187 | -67,501 | -45,872 | -21,139 | |||||||||||||||||||||
Restructuring charges included in R&D expenses | 1,761 | 795 | -10 | 2,431 | 1,947 | 1,750 | 91 | |||||||||||||||||||||
Restructuring charges included in selling and administrative expenses | 613 | 450 | 93 | 1,288 | 1,208 | 1,065 | 143 | |||||||||||||||||||||
Operating expenses excluding restructuring charges | -78,671 | -57,358 | -20,436 | -86,468 | -64,346 | -43,057 | -20,905 | |||||||||||||||||||||
EBIT (loss) | -3,645 | -9,419 | 4,100 | -20,326 | -26,174 | 2,734 | 3,046 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
EBIT margin (%) | -2.1 | % | -8.3 | % | 7.7 | % | -7.7 | % | -13.7 | % | 2.2 | % | 4.9 | % | ||||||||||||||
EBIT (loss) | -3,645 | -9,419 | 4,100 | -20,326 | -26,174 | 2,734 | 3,046 | |||||||||||||||||||||
Total restructuring charges | 3,386 | 1,833 | 205 | 6,521 | 5,001 | 4,113 | 980 | |||||||||||||||||||||
Adjusted EBIT (loss) | -259 | -7,586 | 4,305 | -13,805 | -21,173 | 6,847 | 4,026 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Adjusted EBIT margin (%) | -0.1 | % | -6.7 | % | 8.1 | % | -5.2 | % | -11.1 | % | 5.4 | % | 6.4 | % | ||||||||||||||
Adjusted EBIT | -259 | -7,586 | 4,305 | -13,805 | -21,173 | 6,847 | 4,026 | |||||||||||||||||||||
Impairment of goodwill and intangible assets | 15,120 | 15,120 | — | 31,916 | 31,916 | — | — | |||||||||||||||||||||
Adjusted EBIT excluding impairments of goodwill and intangible assets | 14,861 | 7,534 | 4,305 | 18,111 | 10,743 | 6,847 | 4,026 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Adjusted EBIT margin excluding impairments of goodwill and intangible assets (%) | 8.5 | % | 6.7 | % | 8.1 | % | 6.9 | % | 5.6 | % | 5.4 | % | 6.4 | % | ||||||||||||||
| 37 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
EBITA and EBITA margin / Adjusted EBITA and EBITA margin
Earnings before interest, income tax, amortizations and write-downs of acquired intangibles (including goodwill) also expressed as a percentage of net sales.
Adjusted EBITA also expressed as a percentage of net sales.
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net income (loss) | 3,881 | -10,999 | 2,613 | 3,409 | -30,491 | -597 | 1,575 | |||||||||||||||||||||
Income tax | 1,392 | -2,881 | 1,016 | 1,501 | 864 | -134 | 554 | |||||||||||||||||||||
Financial income and expenses, net | 501 | 361 | 471 | 938 | 719 | 419 | 917 | |||||||||||||||||||||
Amortizations and write-downs of acquired intangibles | 429 | 15,945 | 793 | 846 | 32,736 | 854 | 802 | |||||||||||||||||||||
Of which segment Enterprise | 378 | 15,916 | 762 | 813 | 32,702 | 788 | 767 | |||||||||||||||||||||
EBITA | 6,203 | 2,426 | 4,893 | 6,694 | 3,828 | 542 | 3,848 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
EBITA margin (%) | 10.0 | % | 4.1 | % | 9.2 | % | 9.3 | % | 5.9 | % | 0.8 | % | 6.2 | % | ||||||||||||||
Restructuring charges | 1,553 | 1,628 | 205 | 1,520 | 888 | 3,133 | 980 | |||||||||||||||||||||
Adjusted EBITA | 7,756 | 4,054 | 5,098 | 8,214 | 4,716 | 3,675 | 4,828 | |||||||||||||||||||||
Adjusted EBITA margin (%) | 12.6 | % | 6.8 | % | 9.6 | % | 11.4 | % | 7.3 | % | 5.7 | % | 7.7 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net income (loss) | -4,505 | -8,386 | 2,613 | -26,104 | -29,513 | 978 | 1,575 | |||||||||||||||||||||
Income tax | -473 | -1,865 | 1,016 | 2,785 | 1,284 | 420 | 554 | |||||||||||||||||||||
Financial income and expenses, net | 1,333 | 832 | 471 | 2,993 | 2,055 | 1,336 | 917 | |||||||||||||||||||||
Amortizations and write-downs of acquired intangibles | 17,167 | 16,738 | 793 | 35,238 | 34,392 | 1,656 | 802 | |||||||||||||||||||||
Of which segment Enterprise | 17,056 | 16,678 | 762 | 35,070 | 34,257 | 1,555 | 767 | |||||||||||||||||||||
EBITA | 13,522 | 7,319 | 4,893 | 14,912 | 8,218 | 4,390 | 3,848 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
EBITA margin (%) | 7.7 | % | 6.5 | % | 9.2 | % | 5.7 | % | 4.3 | % | 3.5 | % | 6.2 | % | ||||||||||||||
Restructuring charges | 3,386 | 1,833 | 205 | 6,521 | 5,001 | 4,113 | 980 | |||||||||||||||||||||
Adjusted EBITA | 16,908 | 9,152 | 5,098 | 21,433 | 13,219 | 8,503 | 4,828 | |||||||||||||||||||||
Adjusted EBITA margin (%) | 9.7 | % | 8.1 | % | 9.6 | % | 8.1 | % | 6.9 | % | 6.7 | % | 7.7 | % | ||||||||||||||
Additionally, Ericsson provides forward-looking targets for adjusted EBITA margin and Free cash flow before M&A, which are non-IFRS financial measures. Ericsson has not provided quantitative reconciliation of these targets to the most directly comparable IFRS measures because certain information needed to reconcile these non-IFRS financial measures to the most comparable IFRS financial measures are dependent on specific items or impacts that are not yet determined, are subject to incarcerating and variability in timing and amount due to their nature, are outside of Ericsson’s control or cannot be predicted, including items and impacts such as currency exchange rate changes, acquisitions and disposals, and charges such as impairments or acquisition related charges. Accordingly, reconciliation of these non-IFRS forward-looking financial measures to the most directly comparable IFRS financial measures are not available without unreasonable efforts. Such unavailable reconciling items could significantly impact our results of operations and financial condition.
Rolling four quarters of net sales and adjusted EBITA margin (%)
Net sales, EBITA margin and restructuring charges as a sum of last four quarters.
| 2024 | 2023 | |||||||||||||||||||||||||||
Rolling four quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net sales | 246,848 | 249,527 | 254,123 | 263,351 | 277,450 | 281,017 | 279,038 | |||||||||||||||||||||
EBITA | 20,216 | 17,841 | 15,957 | 14,912 | 17,267 | 21,052 | 27,976 | |||||||||||||||||||||
Restructuring charges | 4,906 | 4,241 | 5,746 | 6,521 | 5,229 | 4,422 | 1,338 | |||||||||||||||||||||
Adjusted EBITA | 25,122 | 22,082 | 21,703 | 21,433 | 22,496 | 25,474 | 29,314 | |||||||||||||||||||||
Adjusted EBITA margin (%) | 10.2 | % | 8.8 | % | 8.5 | % | 8.1 | % | 8.1 | % | 9.1 | % | 10.5 | % | ||||||||||||||
| 38 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Gross cash and net cash, end of period
Gross cash: Cash and cash equivalents plus interest-bearing securities (current and non-current).
Net cash: Cash and cash equivalents plus interest-bearing securities (current and non-current) less borrowings (current and non-current).
| 2024 | 2023 | |||||||||||||||||||||||||||
SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Cash and cash equivalents | 37,323 | 28,736 | 31,848 | 35,190 | 26,900 | 22,331 | 34,133 | |||||||||||||||||||||
+ Interest-bearing securities, current | 10,063 | 13,838 | 8,948 | 9,584 | 9,553 | 8,513 | 9,259 | |||||||||||||||||||||
+ Interest-bearing securities, non-current | 14,806 | 11,146 | 11,177 | 9,931 | 4,032 | 4,878 | 3,925 | |||||||||||||||||||||
Gross cash, end of period | 62,192 | 53,720 | 51,973 | 54,705 | 40,485 | 35,722 | 47,317 | |||||||||||||||||||||
- Borrowings, current | 3,134 | 8,067 | 8,491 | 17,655 | 18,772 | 10,354 | 11,577 | |||||||||||||||||||||
- Borrowings, non-current | 33,524 | 32,520 | 32,675 | 29,218 | 20,103 | 23,476 | 22,167 | |||||||||||||||||||||
Net cash, end of period | 25,534 | 13,133 | 10,807 | 7,832 | 1,610 | 1,892 | 13,573 | |||||||||||||||||||||
Total assets less non-interest-bearing provisions and liabilities (which includes non-current provisions, deferred tax liabilities, contract liabilities, other non-current liabilities, current provisions, trade payables, current tax liabilities and other current liabilities).
| 2024 | 2023 | |||||||||||||||||||||||||||
SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Total assets | 272,450 | 278,486 | 299,523 | 297,036 | 306,349 | 343,358 | 345,658 | |||||||||||||||||||||
Non-interest-bearing provisions and liabilities | ||||||||||||||||||||||||||||
Provisions, non-current | 3,036 | 2,642 | 3,952 | 4,927 | 5,190 | 5,263 | 4,119 | |||||||||||||||||||||
Deferred tax liabilities | 1,255 | 1,295 | 3,999 | 3,880 | 4,343 | 4,887 | 4,986 | |||||||||||||||||||||
Other non-current liabilities | 889 | 865 | 839 | 755 | 812 | 788 | 716 | |||||||||||||||||||||
Provisions, current | 7,508 | 7,558 | 6,113 | 6,779 | 6,345 | 6,742 | 6,422 | |||||||||||||||||||||
Contract liabilities | 39,540 | 40,704 | 42,538 | 34,416 | 41,234 | 44,237 | 47,916 | |||||||||||||||||||||
Trade payables | 25,888 | 26,731 | 25,305 | 27,768 | 30,629 | 35,463 | 34,554 | |||||||||||||||||||||
Current tax liabilities | 3,821 | 3,710 | 3,810 | 3,561 | 3,029 | 2,665 | 2,478 | |||||||||||||||||||||
Other current liabilities | 36,903 | 38,485 | 35,786 | 36,985 | 43,841 | 45,637 | 49,064 | |||||||||||||||||||||
Capital employed | 153,610 | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | |||||||||||||||||||||
Annualized net sales divided by average capital employed.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Annualized net sales | 247,176 | 239,392 | 213,300 | 287,524 | 257,892 | 257,776 | 250,212 | |||||||||||||||||||||
Average capital employed | ||||||||||||||||||||||||||||
Capital employed at beginning of period | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | 202,899 | |||||||||||||||||||||
Capital employed at end of period | 153,610 | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | |||||||||||||||||||||
Average capital employed | 155,053 | 166,839 | 177,573 | 174,446 | 184,301 | 196,540 | 199,151 | |||||||||||||||||||||
Capital turnover (times) | 1.6 | 1.4 | 1.2 | 1.6 | 1.4 | 1.3 | 1.3 | |||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Annualized net sales | 233,289 | 226,346 | 213,300 | 263,351 | 255,293 | 253,994 | 250,212 | |||||||||||||||||||||
Average capital employed | ||||||||||||||||||||||||||||
Capital employed at beginning of period | 177,965 | 177,965 | 177,965 | 202,899 | 202,899 | 202,899 | 202,899 | |||||||||||||||||||||
Capital employed at end of period | 153,610 | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | |||||||||||||||||||||
Average capital employed | 165,788 | 167,231 | 177,573 | 190,432 | 186,913 | 200,288 | 199,151 | |||||||||||||||||||||
Capital turnover (times) | 1.4 | 1.4 | 1.2 | 1.4 | 1.4 | 1.3 | 1.3 | |||||||||||||||||||||
| 39 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
The annualized total of EBIT as a percentage of average capital employed.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
EBIT (loss) | 5,774 | -13,519 | 4,100 | 5,848 | -28,908 | -312 | 3,046 | |||||||||||||||||||||
Annualized EBIT (loss) | 23,096 | -54,076 | 16,400 | 23,392 | -115,632 | -1,248 | 12,184 | |||||||||||||||||||||
Average capital employed | ||||||||||||||||||||||||||||
Capital employed at beginning of period | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | 202,899 | |||||||||||||||||||||
Capital employed at end of period | 153,610 | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | |||||||||||||||||||||
Average capital employed | 155,053 | 166,839 | 177,573 | 174,446 | 184,301 | 196,540 | 199,151 | |||||||||||||||||||||
Return on capital employed (%) | 14.9 | % | -32.4 | % | 9.2 | % | 13.4 | % | -62.7 | % | -0.6 | % | 6.1 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
EBIT (loss) | -3,645 | -9,419 | 4,100 | -20,326 | -26,174 | 2,734 | 3,046 | |||||||||||||||||||||
Annualized EBIT (loss) | -4,860 | -18,838 | 16,400 | -20,326 | -34,899 | 5,468 | 12,184 | |||||||||||||||||||||
Average capital employed | ||||||||||||||||||||||||||||
Capital employed at beginning of period | 177,965 | 177,965 | 177,965 | 202,899 | 202,899 | 202,899 | 202,899 | |||||||||||||||||||||
Capital employed at end of period | 153,610 | 156,496 | 177,181 | 177,965 | 170,926 | 197,676 | 195,403 | |||||||||||||||||||||
Average capital employed | 165,788 | 167,231 | 177,573 | 190,432 | 186,913 | 200,288 | 199,151 | |||||||||||||||||||||
Return on capital employed (%) | -2.9 | % | -11.3 | % | 9.2 | % | -10.7 | % | -18.7 | % | 2.7 | % | 6.1 | % | ||||||||||||||
Equity expressed as a percentage of total assets.
| 2024 | 2023 | |||||||||||||||||||||||||||
SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Total equity | 85,355 | 82,467 | 107,639 | 97,408 | 105,435 | 132,355 | 125,832 | |||||||||||||||||||||
Total assets | 272,450 | 278,486 | 299,523 | 297,036 | 306,349 | 343,358 | 345,658 | |||||||||||||||||||||
Equity ratio (%) | 31.3 | % | 29.6 | % | 35.9 | % | 32.8 | % | 34.4 | % | 38.5 | % | 36.4 | % | ||||||||||||||
Annualized net income attributable to owners of the Parent Company as a percentage of average stockholders’ equity.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net income (loss) attributable to owners of the Parent Company | 3,814 | -11,132 | 2,559 | 3,394 | -30,670 | -686 | 1,516 | |||||||||||||||||||||
Annualized | 15,256 | -44,528 | 10,236 | 13,576 | -122,680 | -2,744 | 6,064 | |||||||||||||||||||||
Average stockholders’ equity | ||||||||||||||||||||||||||||
Stockholders’ equity, beginning of period | 83,840 | 109,137 | 98,673 | 106,791 | 133,869 | 127,396 | 134,814 | |||||||||||||||||||||
Stockholders’ equity, end of period | 86,630 | 83,840 | 109,137 | 98,673 | 106,791 | 133,869 | 127,396 | |||||||||||||||||||||
Average stockholders’ equity | 85,235 | 96,489 | 103,905 | 102,732 | 120,330 | 130,633 | 131,105 | |||||||||||||||||||||
Return on equity (%) | 17.9 | % | -46.1 | % | 9.9 | % | 13.2 | % | -102.0 | % | -2.1 | % | 4.6 | % | ||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net income (loss) attributable to owners of the Parent Company | -4,759 | -8,573 | 2,559 | -26,446 | -29,840 | 830 | 1,516 | |||||||||||||||||||||
Annualized | -6,345 | -17,146 | 10,236 | -26,446 | -39,787 | 1,660 | 6,064 | |||||||||||||||||||||
Average stockholders’ equity | ||||||||||||||||||||||||||||
Stockholders’ equity, beginning of period | 98,673 | 98,673 | 98,673 | 134,814 | 134,814 | 134,814 | 134,814 | |||||||||||||||||||||
Stockholders’ equity, end of period | 86,630 | 83,840 | 109,137 | 98,673 | 106,791 | 133,869 | 127,396 | |||||||||||||||||||||
Average stockholders’ equity | 92,652 | 91,257 | 103,905 | 116,744 | 120,803 | 134,342 | 131,105 | |||||||||||||||||||||
Return on equity (%) | -6.8 | % | -18.8 | % | 9.9 | % | -22.7 | % | -32.9 | % | 1.2 | % | 4.6 | % | ||||||||||||||
| 40 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Free cash flow before M&A / Free cash flow after M&A / Free cash flow before M&A (% of net sales)
Free cash flow before M&A: Cash flow from operating activities less net capital expenditures, other investments (excluding M&A) and repayment of lease liabilities.
Free cash flow after M&A: Cash flow from operating activities less net capital expenditures, other investments and repayment of lease liabilities.
Free cash flow before M&A (% of net sales): Free cash flow before M&A as a percentage of net sales.
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Cash flow from operating activities | 14,397 | 9,276 | 5,075 | 14,482 | 1,402 | -2,882 | -5,825 | |||||||||||||||||||||
Net capital expenditures and other investments (excl. M&A) | ||||||||||||||||||||||||||||
Investments in property, plant and equipment | -540 | -699 | -434 | -720 | -817 | -806 | -954 | |||||||||||||||||||||
Sales of property, plant and equipment | 36 | 42 | 24 | 37 | 51 | 42 | 33 | |||||||||||||||||||||
Product development | -264 | -327 | -386 | -551 | -485 | -562 | -575 | |||||||||||||||||||||
Other investments ¹ | -78 | -39 | -7 | -1 | 0 | -94 | -2 | |||||||||||||||||||||
Repayment of lease liabilities | -607 | -658 | -601 | -783 | -691 | -690 | -693 | |||||||||||||||||||||
Free cash flow before M&A | 12,944 | 7,595 | 3,671 | 12,464 | -540 | -4,992 | -8,016 | |||||||||||||||||||||
Acquisitions/ divestments of subs and other operations, net | -62 | -48 | -106 | -225 | -160 | -911 | -844 | |||||||||||||||||||||
Free cash flow after M&A | 12,882 | 7,547 | 3,565 | 12,239 | -700 | -5,903 | -8,860 | |||||||||||||||||||||
Net sales | 61,794 | 59,848 | 53,325 | 71,881 | 64,473 | 64,444 | 62,553 | |||||||||||||||||||||
Free cash flow before M&A (% of net sales) | 20.9 | % | 12.7 | % | 6.9 | % | 17.3 | % | -0.8 | % | -7.7 | % | -12.8 | % | ||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Cash flow from operating activities | 28,748 | 14,351 | 5,075 | 7,177 | -7,305 | -8,707 | -5,825 | |||||||||||||||||||||
Net capital expenditures and other investments (excl. M&A) | ||||||||||||||||||||||||||||
Investments in property, plant and equipment | -1,673 | -1,133 | -434 | -3,297 | -2,577 | -1,760 | -954 | |||||||||||||||||||||
Sales of property, plant and equipment | 102 | 66 | 24 | 163 | 126 | 75 | 33 | |||||||||||||||||||||
Product development | -977 | -713 | -386 | -2,173 | -1,622 | -1,137 | -575 | |||||||||||||||||||||
Other investments ¹ | -124 | -46 | -7 | -97 | -96 | -96 | -2 | |||||||||||||||||||||
Repayment of lease liabilities | -1,866 | -1,259 | -601 | -2,857 | -2,074 | -1,383 | -693 | |||||||||||||||||||||
Free cash flow before M&A | 24,210 | 11,266 | 3,671 | -1,084 | -13,548 | -13,008 | -8,016 | |||||||||||||||||||||
Acquisitions/ divestments of subs and other operations, net | -216 | -154 | -106 | -2,140 | -1,915 | -1,755 | -844 | |||||||||||||||||||||
Free cash flow after M&A | 23,994 | 11,112 | 3,565 | -3,224 | -15,463 | -14,763 | -8,860 | |||||||||||||||||||||
Net sales | 174,967 | 113,173 | 53,325 | 263,351 | 191,470 | 126,997 | 62,553 | |||||||||||||||||||||
Free cash flow before M&A (% of net sales) | 13.8 | % | 10.0 | % | 6.9 | % | -0.4 | % | -7.1 | % | -10.2 | % | -12.8 | % | ||||||||||||||
| 1) | Other investments is part of the line item Other investing activities in the Consolidated cash flow statement. The differences are movements in other interest-bearing assets and the cash flow hedge reserve gain, which are not to be part of the definition of Free cash flow. |
| 41 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Sales growth by segment adjusted for comparable units and currency
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarter, year over year change, percent | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | -1 | % | -11 | % | -19 | % | -23 | % | -16 | % | -13 | % | -2 | % | ||||||||||||||
Cloud Software and Services | -1 | % | 0 | % | -2 | % | -4 | % | 5 | % | 1 | % | 5 | % | ||||||||||||||
Enterprise | -3 | % | 0 | % | 1 | % | 7 | % | 11 | % | 20 | % | 19 | % | ||||||||||||||
Other | -26 | % | -5 | % | -14 | % | -27 | % | -8 | % | -18 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -1 | % | -7 | % | -14 | % | -17 | % | -10 | % | -9 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, year over year change, percent | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | -10 | % | -15 | % | -19 | % | -15 | % | -11 | % | -8 | % | -2 | % | ||||||||||||||
Cloud Software and Services | -1 | % | -1 | % | -2 | % | 1 | % | 4 | % | 3 | % | 5 | % | ||||||||||||||
Enterprise | -1 | % | 1 | % | 1 | % | 11 | % | 14 | % | 20 | % | 19 | % | ||||||||||||||
Other | -16 | % | -10 | % | -14 | % | -14 | % | -8 | % | -8 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -7 | % | -10 | % | -14 | % | -10 | % | -7 | % | -5 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Sales growth by market area adjusted for comparable units and currency
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarter, year over year change, percent | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
North America | 55 | % | 14 | % | -17 | % | -43 | % | -51 | % | -42 | % | -26 | % | ||||||||||||||
Europe and Latin America | 1 | % | -3 | % | -8 | % | -12 | % | -6 | % | -3 | % | -12 | % | ||||||||||||||
South East Asia, Oceania and India | -43 | % | -44 | % | -37 | % | 7 | % | 74 | % | 71 | % | 132 | % | ||||||||||||||
North East Asia | -29 | % | -3 | % | -16 | % | 11 | % | -2 | % | -32 | % | -19 | % | ||||||||||||||
Middle East and Africa | -22 | % | -8 | % | 11 | % | 4 | % | 10 | % | -4 | % | -8 | % | ||||||||||||||
Other | 4 | % | 7 | % | 9 | % | -24 | % | 21 | % | 38 | % | 28 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -1 | % | -7 | % | -14 | % | -17 | % | -10 | % | -9 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, year over year change, percent | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
North America | 15 | % | -3 | % | -17 | % | -41 | % | -41 | % | -35 | % | -26 | % | ||||||||||||||
Europe and Latin America | -3 | % | -5 | % | -8 | % | -9 | % | -7 | % | -8 | % | -12 | % | ||||||||||||||
South East Asia, Oceania and India | -41 | % | -41 | % | -37 | % | 61 | % | 88 | % | 97 | % | 132 | % | ||||||||||||||
North East Asia | -16 | % | -9 | % | -16 | % | -9 | % | -19 | % | -26 | % | -19 | % | ||||||||||||||
Middle East and Africa | -9 | % | 0 | % | 11 | % | 1 | % | 0 | % | -6 | % | -8 | % | ||||||||||||||
Other | 6 | % | 8 | % | 9 | % | 3 | % | 27 | % | 33 | % | 28 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -7 | % | -10 | % | -14 | % | -10 | % | -7 | % | -5 | % | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Rolling four quarters of net sales by segment
| 2024 | 2023 | |||||||||||||||||||||||||||
Rolling four quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 156,408 | 157,929 | 162,690 | 171,442 | 185,070 | 191,680 | 195,223 | |||||||||||||||||||||
Cloud Software and Services | 62,736 | 63,347 | 63,275 | 63,630 | 64,282 | 62,931 | 61,837 | |||||||||||||||||||||
Enterprise | 25,471 | 25,825 | 25,720 | 25,745 | 25,361 | 23,669 | 18,993 | |||||||||||||||||||||
Other | 2,233 | 2,426 | 2,438 | 2,534 | 2,737 | 2,737 | 2,985 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 246,848 | 249,527 | 254,123 | 263,351 | 277,450 | 281,017 | 279,038 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 42 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Gross margin by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 48.3 | % | 45.5 | % | 44.0 | % | 41.4 | % | 38.9 | % | 38.4 | % | 39.7 | % | ||||||||||||||
Cloud Software and Services | 37.0 | % | 35.6 | % | 37.1 | % | 36.7 | % | 35.3 | % | 32.7 | % | 33.4 | % | ||||||||||||||
Enterprise | 52.3 | % | 51.0 | % | 48.0 | % | 44.3 | % | 48.7 | % | 46.3 | % | 47.4 | % | ||||||||||||||
Other | 1.8 | % | -8.1 | % | 18.2 | % | -26.0 | % | -23.6 | % | -22.2 | % | -2.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 45.6 | % | 43.1 | % | 42.5 | % | 39.8 | % | 38.4 | % | 37.4 | % | 38.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, as percentage of net sales | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 46.1 | % | 44.8 | % | 44.0 | % | 39.6 | % | 39.0 | % | 39.1 | % | 39.7 | % | ||||||||||||||
Cloud Software and Services | 36.5 | % | 36.3 | % | 37.1 | % | 34.7 | % | 33.8 | % | 33.0 | % | 33.4 | % | ||||||||||||||
Enterprise | 50.5 | % | 49.6 | % | 48.0 | % | 46.7 | % | 47.5 | % | 46.8 | % | 47.4 | % | ||||||||||||||
Other | 4.7 | % | 6.1 | % | 18.2 | % | -18.2 | % | -15.6 | % | -11.0 | % | -2.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 43.8 | % | 42.8 | % | 42.5 | % | 38.6 | % | 38.1 | % | 38.0 | % | 38.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
EBIT margin by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 18.7 | % | 12.6 | % | 12.3 | % | 13.6 | % | 11.1 | % | 6.2 | % | 14.2 | % | ||||||||||||||
Cloud Software and Services | -3.0 | % | -4.8 | % | -2.8 | % | 9.4 | % | 0.6 | % | -7.9 | % | -7.0 | % | ||||||||||||||
Enterprise | -19.0 | % | -268.7 | % | -26.5 | % | -24.5 | % | -499.1 | % | -26.3 | % | -28.6 | % | ||||||||||||||
Other | -14.6 | % | -23.2 | % | 317.5 | % | -72.9 | % | -45.6 | % | -10.8 | % | -46.3 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 9.3 | % | -22.6 | % | 7.7 | % | 8.1 | % | -44.8 | % | -0.5 | % | 4.9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, as percentage of net sales | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 14.7 | % | 12.5 | % | 12.3 | % | 11.3 | % | 10.5 | % | 10.2 | % | 14.2 | % | ||||||||||||||
Cloud Software and Services | -3.6 | % | -3.9 | % | -2.8 | % | -0.3 | % | -4.7 | % | -7.5 | % | -7.0 | % | ||||||||||||||
Enterprise | -107.6 | % | -152.6 | % | -26.5 | % | -148.9 | % | -192.6 | % | -27.4 | % | -28.6 | % | ||||||||||||||
Other | 105.7 | % | 161.1 | % | 317.5 | % | -45.5 | % | -36.4 | % | -31.1 | % | -46.3 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -2.1 | % | -8.3 | % | 7.7 | % | -7.7 | % | -13.7 | % | 2.2 | % | 4.9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 43 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
EBITA and EBITA margin by segment by quarter
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 7,536 | 4,771 | 4,179 | 6,135 | 4,651 | 2,678 | 6,042 | |||||||||||||||||||||
Cloud Software and Services | -436 | -721 | -355 | 1,846 | 96 | -1,190 | -929 | |||||||||||||||||||||
Enterprise | -823 | -1,508 | -820 | -830 | -600 | -891 | -945 | |||||||||||||||||||||
Other | -74 | -116 | 1,889 | -457 | -319 | -55 | -320 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 6,203 | 2,426 | 4,893 | 6,694 | 3,828 | 542 | 3,848 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 18.8 | % | 12.7 | % | 12.4 | % | 13.6 | % | 11.2 | % | 6.3 | % | 14.2 | % | ||||||||||||||
Cloud Software and Services | -2.9 | % | -4.7 | % | -2.7 | % | 9.4 | % | 0.6 | % | -7.9 | % | -6.9 | % | ||||||||||||||
Enterprise | -13.0 | % | -23.3 | % | -13.7 | % | -12.4 | % | -9.0 | % | -14.0 | % | -15.8 | % | ||||||||||||||
Other | -14.6 | % | -23.0 | % | 317.5 | % | -72.9 | % | -45.6 | % | -10.6 | % | -46.3 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 10.0 | % | 4.1 | % | 9.2 | % | 9.3 | % | 5.9 | % | 0.8 | % | 6.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 16,486 | 8,950 | 4,179 | 19,506 | 13,371 | 8,720 | 6,042 | |||||||||||||||||||||
Cloud Software and Services | -1,512 | -1,076 | -355 | -177 | -2,023 | -2,119 | -929 | |||||||||||||||||||||
Enterprise | -3,151 | -2,328 | -820 | -3,266 | -2,436 | -1,836 | -945 | |||||||||||||||||||||
Other | 1,699 | 1,773 | 1,889 | -1,151 | -694 | -375 | -320 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 13,522 | 7,319 | 4,893 | 14,912 | 8,218 | 4,390 | 3,848 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 |
| 2023 | ||||||||||||||||||||||||||
Year to date, as percentage of net sales | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 14.8 | % | 12.5 | % | 12.4 | % | 11.4 | % | 10.6 | % | 10.3 | % | 14.2 | % | ||||||||||||||
Cloud Software and Services | -3.5 | % | -3.8 | % | -2.7 | % | -0.3 | % | -4.6 | % | -7.4 | % | -6.9 | % | ||||||||||||||
Enterprise | -16.8 | % | -18.7 | % | -13.7 | % | -12.7 | % | -12.8 | % | -14.8 | % | -15.8 | % | ||||||||||||||
Other | 105.8 | % | 161.2 | % | 317.5 | % | -45.4 | % | -36.4 | % | -31.0 | % | -46.3 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 7.7 | % | 6.5 | % | 9.2 | % | 5.7 | % | 4.3 | % | 3.5 | % | 6.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 44 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Restructuring charges by function
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Cost of sales | -424 | -466 | -122 | -956 | -548 | -552 | -746 | |||||||||||||||||||||
Research and development expenses | -966 | -805 | 10 | -484 | -197 | -1,659 | -91 | |||||||||||||||||||||
Selling and administrative expenses | -163 | -357 | -93 | -80 | -143 | -922 | -143 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -1,553 | -1,628 | -205 | -1,520 | -888 | -3,133 | -980 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Cost of sales | -1,012 | -588 | -122 | -2,802 | -1,846 | -1,298 | -746 | |||||||||||||||||||||
Research and development expenses | -1,761 | -795 | 10 | -2,431 | -1,947 | -1,750 | -91 | |||||||||||||||||||||
Selling and administrative expenses | -613 | -450 | -93 | -1,288 | -1,208 | -1,065 | -143 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -3,386 | -1,833 | -205 | -6,521 | -5,001 | -4,113 | -980 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Restructuring charges by segment
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | -585 | -481 | -95 | -1,292 | -564 | -2,177 | -404 | |||||||||||||||||||||
of which cost of sales | -163 | -214 | -68 | -816 | -408 | -376 | -367 | |||||||||||||||||||||
of which operating expenses | -422 | -267 | -27 | -476 | -156 | -1,801 | -37 | |||||||||||||||||||||
Cloud Software and Services | -863 | -816 | -60 | -183 | -335 | -906 | -500 | |||||||||||||||||||||
of which cost of sales | -243 | -246 | -49 | -119 | -143 | -177 | -367 | |||||||||||||||||||||
of which operating expenses | -620 | -570 | -11 | -64 | -192 | -729 | -133 | |||||||||||||||||||||
Enterprise | -38 | -285 | -38 | -27 | -5 | -52 | -89 | |||||||||||||||||||||
of which cost of sales | -1 | -3 | -5 | 0 | -3 | -1 | -12 | |||||||||||||||||||||
of which operating expenses | -37 | -282 | -33 | -27 | -2 | -51 | -77 | |||||||||||||||||||||
Other | -67 | -46 | -12 | -18 | 16 | 2 | 13 | |||||||||||||||||||||
of which cost of sales | -17 | -3 | 0 | -21 | 6 | 2 | 0 | |||||||||||||||||||||
of which operating expenses | -50 | -43 | -12 | 3 | 10 | 0 | 13 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -1,553 | -1,628 | -205 | -1,520 | -888 | -3,133 | -980 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | -1,161 | -576 | -95 | -4,437 | -3,145 | -2,581 | -404 | |||||||||||||||||||||
of which cost of sales | -445 | -282 | -68 | -1,967 | -1,151 | -743 | -367 | |||||||||||||||||||||
of which operating expenses | -716 | -294 | -27 | -2,470 | -1,994 | -1,838 | -37 | |||||||||||||||||||||
Cloud Software and Services | -1,739 | -876 | -60 | -1,924 | -1,741 | -1,406 | -500 | |||||||||||||||||||||
of which cost of sales | -538 | -295 | -49 | -806 | -687 | -544 | -367 | |||||||||||||||||||||
of which operating expenses | -1,201 | -581 | -11 | -1,118 | -1,054 | -862 | -133 | |||||||||||||||||||||
Enterprise | -361 | -323 | -38 | -173 | -146 | -141 | -89 | |||||||||||||||||||||
of which cost of sales | -9 | -8 | -5 | -16 | -16 | -13 | -12 | |||||||||||||||||||||
of which operating expenses | -352 | -315 | -33 | -157 | -130 | -128 | -77 | |||||||||||||||||||||
Other | -125 | -58 | -12 | 13 | 31 | 15 | 13 | |||||||||||||||||||||
of which cost of sales | -20 | -3 | 0 | -13 | 8 | 2 | 0 | |||||||||||||||||||||
of which operating expenses | -105 | -55 | -12 | 26 | 23 | 13 | 13 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -3,386 | -1,833 | -205 | -6,521 | -5,001 | -4,113 | -980 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 45 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Adjusted gross income and gross margin by segment
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 19,495 | 17,353 | 14,919 | 19,443 | 16,554 | 16,694 | 17,236 | |||||||||||||||||||||
Cloud Software and Services | 5,780 | 5,653 | 4,883 | 7,293 | 5,637 | 5,121 | 4,843 | |||||||||||||||||||||
Enterprise | 3,308 | 3,313 | 2,870 | 2,968 | 3,256 | 2,955 | 2,853 | |||||||||||||||||||||
Other | 26 | -38 | 108 | -143 | -171 | -117 | -18 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 28,609 | 26,281 | 22,780 | 29,561 | 25,276 | 24,653 | 24,914 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| �� | 2024 | 2023 | ||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 48.7 | % | 46.1 | % | 44.3 | % | 43.2 | % | 39.9 | % | 39.3 | % | 40.6 | % | ||||||||||||||
Cloud Software and Services | 38.7 | % | 37.2 | % | 37.4 | % | 37.3 | % | 36.2 | % | 33.9 | % | 36.1 | % | ||||||||||||||
Enterprise | 52.4 | % | 51.1 | % | 48.1 | % | 44.3 | % | 48.8 | % | 46.3 | % | 47.6 | % | ||||||||||||||
Other | 5.1 | % | -7.5 | % | 18.2 | % | -22.8 | % | -24.5 | % | -22.6 | % | -2.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 46.3 | % | 43.9 | % | 42.7 | % | 41.1 | % | 39.2 | % | 38.3 | % | 39.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 51,767 | 32,272 | 14,919 | 69,927 | 50,484 | 33,930 | 17,236 | |||||||||||||||||||||
Cloud Software and Services | 16,316 | 10,536 | 4,883 | 22,894 | 15,601 | 9,964 | 4,843 | |||||||||||||||||||||
Enterprise | 9,491 | 6,183 | 2,870 | 12,032 | 9,064 | 5,808 | 2,853 | |||||||||||||||||||||
Other | 96 | 70 | 108 | -449 | -306 | -135 | -18 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 77,670 | 49,061 | 22,780 | 104,404 | 74,843 | 49,567 | 24,914 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, as percentage of net sales | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 46.5 | % | 45.2 | % | 44.3 | % | 40.8 | % | 39.9 | % | 40.0 | % | 40.6 | % | ||||||||||||||
Cloud Software and Services | 37.8 | % | 37.3 | % | 37.4 | % | 36.0 | % | 35.4 | % | 35.0 | % | 36.1 | % | ||||||||||||||
Enterprise | 50.6 | % | 49.6 | % | 48.1 | % | 46.7 | % | 47.6 | % | 46.9 | % | 47.6 | % | ||||||||||||||
Other | 6.0 | % | 6.4 | % | 18.2 | % | -17.7 | % | -16.0 | % | -11.2 | % | -2.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 44.4 | % | 43.4 | % | 42.7 | % | 39.6 | % | 39.1 | % | 39.0 | % | 39.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 46 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Adjusted EBIT (loss) and EBIT margin by segment
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 8,077 | 5,231 | 4,251 | 7,404 | 5,191 | 4,800 | 6,424 | |||||||||||||||||||||
Cloud Software and Services | 420 | 88 | -303 | 2,019 | 421 | -294 | -442 | |||||||||||||||||||||
Enterprise | -1,163 | -17,139 | -1,544 | -1,616 | -33,297 | -1,627 | -1,623 | |||||||||||||||||||||
Other | -7 | -71 | 1,901 | -439 | -335 | -58 | -333 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 7,327 | -11,891 | 4,305 | 7,368 | -28,020 | 2,821 | 4,026 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 20.2 | % | 13.9 | % | 12.6 | % | 16.5 | % | 12.5 | % | 11.3 | % | 15.1 | % | ||||||||||||||
Cloud Software and Services | 2.8 | % | 0.6 | % | -2.3 | % | 10.3 | % | 2.7 | % | -1.9 | % | -3.3 | % | ||||||||||||||
Enterprise | -18.4 | % | -264.3 | % | -25.9 | % | -24.1 | % | -499.0 | % | -25.5 | % | -27.1 | % | ||||||||||||||
Other | -1.4 | % | -14.1 | % | 319.5 | % | -70.0 | % | -47.9 | % | -11.2 | % | -48.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 11.9 | % | -19.9 | % | 8.1 | % | 10.3 | % | -43.5 | % | 4.4 | % | 6.4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 17,559 | 9,482 | 4,251 | 23,819 | 16,415 | 11,224 | 6,424 | |||||||||||||||||||||
Cloud Software and Services | 205 | -215 | -303 | 1,704 | -315 | -736 | -442 | |||||||||||||||||||||
Enterprise | -19,846 | -18,683 | -1,544 | -38,163 | -36,547 | -3,250 | -1,623 | |||||||||||||||||||||
Other | 1,823 | 1,830 | 1,901 | -1,165 | -726 | -391 | -333 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -259 | -7,586 | 4,305 | -13,805 | -21,173 | 6,847 | 4,026 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, as percentage of net sales | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 15.8 | % | 13.3 | % | 12.6 | % | 13.9 | % | 13.0 | % | 13.2 | % | 15.1 | % | ||||||||||||||
Cloud Software and Services | 0.5 | % | -0.8 | % | -2.3 | % | 2.7 | % | -0.7 | % | -2.6 | % | -3.3 | % | ||||||||||||||
Enterprise | -105.7 | % | -150.0 | % | -25.9 | % | -148.2 | % | -191.9 | % | -26.3 | % | -27.1 | % | ||||||||||||||
Other | 113.5 | % | 166.4 | % | 319.5 | % | -46.0 | % | -38.1 | % | -32.4 | % | -48.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | -0.1 | % | -6.7 | % | 8.1 | % | -5.2 | % | -11.1 | % | 5.4 | % | 6.4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Rolling four quarters of adjusted EBITA margin by segment (%)
| 2024 | 2023 | |||||||||||||||||||||||||||
Rolling four quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 16.0 | % | 14.0 | % | 13.4 | % | 14.0 | % | 15.7 | % | 17.5 | % | 19.3 | % | ||||||||||||||
Cloud Software and Services | 3.6 | % | 3.6 | % | 3.0 | % | 2.7 | % | 0.7 | % | -1.1 | % | -1.8 | % | ||||||||||||||
Enterprise | -14.1 | % | -13.2 | % | -11.7 | % | -12.0 | % | -12.1 | % | -14.7 | % | -16.4 | % | ||||||||||||||
Other | 62.0 | % | 43.6 | % | 43.9 | % | -45.9 | % | -146.4 | % | -142.7 | % | -136.5 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 10.2 | % | 8.8 | % | 8.5 | % | 8.1 | % | 8.1 | % | 9.1 | % | 10.5 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 47 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |
Table of Contents
Adjusted EBITA and EBITA margin by segment
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, SEK million | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 8,121 | 5,252 | 4,274 | 7,427 | 5,215 | 4,855 | 6,446 | |||||||||||||||||||||
Cloud Software and Services | 427 | 95 | -295 | 2,029 | 431 | -284 | -429 | |||||||||||||||||||||
Enterprise | -785 | -1,223 | -782 | -803 | -595 | -839 | -856 | |||||||||||||||||||||
Other | -7 | -70 | 1,901 | -439 | -335 | -57 | -333 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 7,756 | 4,054 | 5,098 | 8,214 | 4,716 | 3,675 | 4,828 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks | 20.3 | % | 13.9 | % | 12.7 | % | 16.5 | % | 12.6 | % | 11.4 | % | 15.2 | % | ||||||||||||||
Cloud Software and Services | 2.9 | % | 0.6 | % | -2.3 | % | 10.4 | % | 2.8 | % | -1.9 | % | -3.2 | % | ||||||||||||||
Enterprise | -12.4 | % | -18.9 | % | -13.1 | % | -12.0 | % | -8.9 | % | -13.2 | % | -14.3 | % | ||||||||||||||
Other | -1.4 | % | -13.9 | % | 319.5 | % | -70.0 | % | -47.9 | % | -11.0 | % | -48.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 12.6 | % | 6.8 | % | 9.6 | % | 11.4 | % | 7.3 | % | 5.7 | % | 7.7 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, SEK million | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 17,647 | 9,526 | 4,274 | 23,943 | 16,516 | 11,301 | 6,446 | |||||||||||||||||||||
Cloud Software and Services | 227 | -200 | -295 | 1,747 | -282 | -713 | -429 | |||||||||||||||||||||
Enterprise | -2,790 | -2,005 | -782 | -3,093 | -2,290 | -1,695 | -856 | |||||||||||||||||||||
Other | 1,824 | 1,831 | 1,901 | -1,164 | -725 | -390 | -333 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 16,908 | 9,152 | 5,098 | 21,433 | 13,219 | 8,503 | 4,828 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||
Year to date, as percentage of net sales | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks | 15.8 | % | 13.3 | % | 12.7 | % | 14.0 | % | 13.1 | % | 13.3 | % | 15.2 | % | ||||||||||||||
Cloud Software and Services | 0.5 | % | -0.7 | % | -2.3 | % | 2.7 | % | -0.6 | % | -2.5 | % | -3.2 | % | ||||||||||||||
Enterprise | -14.9 | % | -16.1 | % | -13.1 | % | -12.0 | % | -12.0 | % | -13.7 | % | -14.3 | % | ||||||||||||||
Other | 113.6 | % | 166.5 | % | 319.5 | % | -45.9 | % | -38.0 | % | -32.3 | % | -48.2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Total | 9.7 | % | 8.1 | % | 9.6 | % | 8.1 | % | 6.9 | % | 6.7 | % | 7.7 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| Q3 | Jan-Sep | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
Days sales outstanding | — | — | 66 | 72 | ||||||||||||
Inventory turnover days | 81 | 106 | 91 | 104 | ||||||||||||
Payable days | 71 | 76 | 75 | 80 | ||||||||||||
| 48 Ericsson | Third quarter report 2024. October 15, 2024. | Alternative performance measures | |