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
July 17, 2020
Commission File Number 000-12033
LM ERICSSON TELEPHONE COMPANY
(Translation of registrants 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, July 17, 2020 regarding Second quarter report 2020.
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/ XAVIER DEDULLEN | |
Xavier Dedullen | ||
Senior Vice President, Chief Legal Officer | ||
By: | /s/ CARL MELLANDER | |
Carl Mellander | ||
Senior Vice President, Chief Financial Officer |
Date: July 17, 2020
Second quarter report 2020
Stockholm, July 17, 2020
Second quarter highlights
| Sales were SEK 55.6 (54.8) b. Sales adjusted for comparable units and currency were flat YoY. |
| Gross margin excluding restructuring charges improved to 38.2% (36.7%), including the earlier communicated inventory write-down related to Mainland China (SEK -0.9 b., which equals to -1.6 percentage points). |
| Operating income excluding restructuring charges improved to SEK 4.5 b. (8.2% operating margin) from SEK 3.9 b. (7.0% operating margin) driven by improvements in segment Digital Services. |
| Networks sales1 increased by 4% YoY. Networks operating margin excluding restructuring charges was 14.1% (15.0%) impacted by strategic contracts and the inventory write-down, partly compensated by operational leverage and a favorable business mix. |
| Digital Services operating income excluding restructuring charges was SEK -0.7 (-1.3) b. Gross margin improved driven mainly by higher software sales while sales1 declined by -5%. |
| Net income was SEK 2.6 (1.8) b. |
| Free cash flow before M&A was SEK 3.2 (1.6) b. Net cash June 30, 2020, was SEK 37.5 (33.8) b. |
| The Covid-19 pandemic had a limited impact on operating income and cash flow in the quarter. |
1 | Adjusted for comparable units and currency. |
Planning assumptions highlights (please see page 5 for complete planning assumptions)
| With current visibility Group financial targets for 2020 and 2022 are maintained. |
| R&D investments in Digital Services are accelerated to capture additional business opportunities. In combination with lower sales, this will likely cause a delay of some quarters in reaching the 2020 financial target. 2022 operating margin target of 10-12% remains firm. |
|
SEK b. |
Q2 2020 |
Q2 2019 |
YoY change |
Q1 2020 |
QoQ change |
Jan-Jun 2020 |
Jan-Jun 2019 |
YoY change |
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Net sales |
55.6 | 54.8 | 1 | % | 49.8 | 12 | % | 105.3 | 103.7 | 2 | % | |||||||||||||||||||||
Sales growth adj. for comparable units and currency |
| | 0 | % | | | | | -1 | % | ||||||||||||||||||||||
Gross margin |
37.6 | % | 36.6 | % | | 39.8 | % | | 38.6 | % | 37.5 | % | | |||||||||||||||||||
Operating income |
3.9 | 3.7 | 3 | % | 4.3 | -11 | % | 8.2 | 8.6 | -6 | % | |||||||||||||||||||||
Operating margin |
6.9 | % | 6.8 | % | | 8.7 | % | | 7.7 | % | 8.3 | % | | |||||||||||||||||||
Net income |
2.6 | 1.8 | 40 | % | 2.3 | 13 | % | 4.9 | 4.3 | 14 | % | |||||||||||||||||||||
EPS diluted, SEK |
0.74 | 0.51 | 45 | % | 0.65 | 14 | % | 1.39 | 1.21 | 15 | % | |||||||||||||||||||||
Measures excl. restructuring charges and other items affecting com parability¹ |
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Gross margin excluding restructuring charges |
38.2 | % | 36.7 | % | | 40.4 | % | | 39.3 | % | 37.5 | % | | |||||||||||||||||||
Operating income excl. restr. charges & items affecting com parability in 2019 ² |
4.5 | 3.9 | 18 | % | 4.6 | -2 | % | 9.1 | 7.4 | 24 | % | |||||||||||||||||||||
Operating margin excl. restr. charges & items affecting com parability in 2019 ² |
8.2 | % | 7.0 | % | | 9.3 | % | | 8.7 | % | 7.1 | % | | |||||||||||||||||||
Free cash flow before M&A |
3.2 | 1.6 | 102 | % | 2.3 | 40 | % | 5.6 | 5.1 | 10 | % | |||||||||||||||||||||
Net cash, end of period |
37.5 | 33.8 | 11 | % | 38.4 | -2 | % | 37.5 | 33.8 | 11 | % |
1 | Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report. |
2 | Excludes restructuring charges in all periods. No other adjustments made in 2020. Jan-Jun 2019 excludes a capital gain related to the divestment of 51% of MediaKind (SEK 0.7 b.), divestment of certain assets in Red Bee Media (SEK 0.1 b.) and a reversal of an earlier provision for impairment of trade receivables following customer payment (SEK 0.7 b.). |
1 Ericsson | Second quarter report 2020 |
CEO comments
2 Ericsson | Second quarter report 2020 | CEO comments |
Financial highlights
Net sales development
SEK b. |
Q2 2020 |
Q2 2019 |
YoY change |
YoY adj.¹ |
Q1 2020 |
QoQ change |
Jan-Jun 2020 |
Jan-Jun 2019 |
YoY change |
YoY adj.¹ |
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Net sales |
55.6 | 54.8 | 1 | % | 0 | % | 49.8 | 12 | % | 105.3 | 103.7 | 2 | % | -1 | % | |||||||||||||||||||||||||
of which Networks |
39.8 | 37.8 | 5 | % | 4 | % | 35.1 | 13 | % | 75.0 | 71.3 | 5 | % | 2 | % | |||||||||||||||||||||||||
of which Digital Services |
8.6 | 9.0 | -5 | % | -5 | % | 7.3 | 17 | % | 15.9 | 16.8 | -5 | % | -7 | % | |||||||||||||||||||||||||
of which Managed Services |
5.6 | 6.3 | -12 | % | -12 | % | 5.7 | -2 | % | 11.3 | 12.2 | -7 | % | -9 | % | |||||||||||||||||||||||||
of which Emerging Business and Other |
1.6 | 1.7 | -4 | % | -6 | % | 1.6 | 2 | % | 3.2 | 3.4 | -8 | % | -7 | % |
1 | Sales growth adjusted for comparable units and currency. Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report. |
Income and margin development
SEK b. |
Q2 2020 |
Q2 2019 |
YoY change |
Q1 2020 |
QoQ change |
Jan-Jun 2020 |
Jan-Jun 2019 |
YoY change |
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Net sales |
55.6 | 54.8 | 1 | % | 49.8 | 12 | % | 105.3 | 103.7 | 2 | % | |||||||||||||||||||||
Gross income |
20.9 | 20.1 | 4 | % | 19.8 | 6 | % | 40.7 | 38.9 | 5 | % | |||||||||||||||||||||
Gross margin |
37.6 | % | 36.6 | % | | 39.8 | % | | 38.6 | % | 37.5 | % | | |||||||||||||||||||
Research and development (R&D) expenses |
-10.0 | -9.5 | | -9.1 | | -19.2 | -18.7 | | ||||||||||||||||||||||||
Selling and administrative expenses |
-7.1 | -7.0 | | -6.2 | | -13.3 | -13.0 | | ||||||||||||||||||||||||
Impairment losses on trade receivables |
0.0 | 0.2 | -72 | % | -0.2 | | -0.1 | 0.7 | | |||||||||||||||||||||||
Other operating income and expenses |
0.1 | 0.1 | 98 | % | 0.1 | 47 | % | 0.2 | 0.8 | -74 | % | |||||||||||||||||||||
Operating income |
3.9 | 3.7 | 3 | % | 4.3 | -11 | % | 8.2 | 8.6 | -6 | % | |||||||||||||||||||||
of which Networks |
5.3 | 5.7 | -7 | % | 5.8 | -10 | % | 11.1 | 11.2 | -1 | % | |||||||||||||||||||||
of which Digital Services |
-0.7 | -1.4 | | -1.4 | | -2.1 | -3.2 | | ||||||||||||||||||||||||
of which Managed Services |
0.3 | 0.2 | 30 | % | 0.4 | -36 | % | 0.7 | 1.5 | -54 | % | |||||||||||||||||||||
of which Emerging Business & Other |
-1.0 | -0.7 | | -0.5 | | -1.5 | -0.8 | | ||||||||||||||||||||||||
Operating margin |
6.9 | % | 6.8 | % | | 8.7 | % | | 7.7 | % | 8.3 | % | | |||||||||||||||||||
Financial income and expenses, net |
0.3 | -0.4 | | -0.9 | | -0.6 | -1.0 | | ||||||||||||||||||||||||
Taxes |
-1.6 | -1.5 | | -1.1 | | -2.7 | -3.3 | | ||||||||||||||||||||||||
Net income |
2.6 | 1.8 | 40 | % | 2.3 | 13 | % | 4.9 | 4.3 | 14 | % | |||||||||||||||||||||
Restructuring charges |
-0.7 | -0.1 | | -0.3 | | -1.0 | -0.3 | | ||||||||||||||||||||||||
Measures excl. restructuring charges and other items affecting comparability¹ |
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Gross margin excluding restructuring charges |
38.2 | % | 36.7 | % | | 40.4 | % | | 39.3 | % | 37.5 | % | | |||||||||||||||||||
Operating income excl. restr. charges & items affecting com parability in 2019 ² |
4.5 | 3.9 | 18 | % | 4.6 | -2 | % | 9.1 | 7.4 | 24 | % | |||||||||||||||||||||
Operating margin excl. restr. charges & items affecting com parability in 2019 ² |
8.2 | % | 7.0 | % | | 9.3 | % | | 8.7 | % | 7.1 | % | | |||||||||||||||||||
Operating margin excluding restructuring charges |
8.2 | % | 7.0 | % | | 9.3 | % | | 8.7 | % | 8.6 | % | |
1 | Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report. |
2 | Excludes restructuring charges in all periods. No other adjustments made in 2020. Jan-Jun 2019 excludes a capital gain related to the divestment of 51% of MediaKind (SEK 0.7 b.), divestment of certain assets in Red Bee Media (SEK 0.1 b.) and a reversal of an earlier provision for impairment of trade receivables following customer payment (SEK 0.7 b.). |
3 Ericsson | Second quarter report 2020 | Financial highlights |
4 Ericsson | Second quarter report 2020 | Financial highlights |
5 Ericsson | Second quarter report 2020 | Financial highlights |
Market area sales
SEK b. |
Q2 2020 |
Q2 2019 |
YoY change |
Q1 2020 |
QoQ change |
Jan-Jun 2020 |
YoY change |
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South East Asia, Oceania and India |
6.6 | 7.0 | -5 | % | 5.9 | 11 | % | 12.5 | -5 | % | ||||||||||||||||||
North East Asia |
7.8 | 6.5 | 20 | % | 3.9 | 99 | % | 11.7 | 13 | % | ||||||||||||||||||
North America |
18.4 | 17.7 | 4 | % | 17.9 | 3 | % | 36.3 | 7 | % | ||||||||||||||||||
Europe and Latin America |
13.1 | 14.1 | -7 | % | 12.2 | 7 | % | 25.3 | -7 | % | ||||||||||||||||||
Middle East and Africa |
5.4 | 5.6 | -4 | % | 5.8 | -7 | % | 11.3 | 2 | % | ||||||||||||||||||
Other¹ |
4.3 | 3.9 | 10 | % | 3.9 | 9 | % | 8.3 | 1 | % | ||||||||||||||||||
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Total |
55.6 | 54.8 | 1 | % | 49.8 | 12 | % | 105.3 | 2 | % | ||||||||||||||||||
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1 | Market area Other includes primarily IPR licensing revenues and the major part of segment Emerging Business and Other. |
Sales breakdown by market area by segment is available in the back-end tables.
6 Ericsson | Second quarter report 2020 | Market area sales |
Segment results
7 Ericsson | Second quarter report 2020 | Segment results |
8 Ericsson | Second quarter report 2020 | Segment results |
Cash flow and financial position
SEK b. |
Q2 2020 |
Q2 2019 |
Q1 2020 |
Jan-Jun 2020 |
Jan-Jun 2019 |
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Net income adjusted for non-cash items |
5.6 | 5.0 | 4.7 | 10.3 | 10.4 | |||||||||||||||
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Working capital changes (net operating assets and liabilities) |
-0.1 | -1.3 | -0.4 | -0.6 | -1.0 | |||||||||||||||
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Cash flow from operating activities |
5.4 | 3.6 | 4.3 | 9.8 | 9.4 | |||||||||||||||
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Capex (net) including product development |
-1.5 | -1.4 | -1.3 | -2.8 | -2.9 | |||||||||||||||
Other investing activities and lease liabilities |
-0.7 | -0.7 | -0.6 | -1.4 | -1.4 | |||||||||||||||
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Free cash flow before M&A |
3.2 | 1.6 | 2.3 | 5.6 | 5.1 | |||||||||||||||
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Acquisitions/divestments, net |
0.0 | 0.0 | -0.2 | -0.3 | 0.3 | |||||||||||||||
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Free cash flow |
3.2 | 1.6 | 2.1 | 5.3 | 5.4 | |||||||||||||||
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Cash flow from investing activities |
-0.5 | 1.0 | -5.0 | -5.5 | 4.3 | |||||||||||||||
Cash flow from financing activities |
-4.6 | -4.6 | 1.4 | -3.1 | -7.2 | |||||||||||||||
Net change in cash and cash equivalents |
-2.7 | 0.0 | 3.3 | 0.6 | 7.1 |
SEK b. |
Jun 30 2020 |
Jun 30 2019 |
Mar 31 2020 |
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Gross cash |
75.4 | 69.0 | 79.5 | |||||||||
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Borrowings, current |
15.3 | 2.2 | 17.8 | |||||||||
Borrowings, non-current |
22.6 | 33.0 | 23.4 | |||||||||
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Net cash |
37.5 | 33.8 | 38.4 | |||||||||
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Equity |
78.5 | 84.5 | 79.1 | |||||||||
Total assets |
276.8 | 280.4 | 292.3 | |||||||||
Capital turnover (times) |
1.3 | 1.3 | 1.2 | |||||||||
Return on capital employed (%) |
9.9 | % | 11.0 | % | 10.2 | % |
Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report.
9 Ericsson | Second quarter report 2020 | Cash flow |
Parent Company
10 Ericsson | Second quarter report 2020 | Parent Company |
Other information
11 Ericsson | Second quarter report 2020 | Other information |
Risk factors
12 Ericsson | Second quarter report 2020 | Risk factors |
Board assurance
The Board of Directors and the CEO certify that the financial report for the six months gives a fair view of the performance of the business, position and profit or loss of the Company and the Group, and describes the principal risks and uncertainties that the Company and the companies in the Group face.
Stockholm, July 17, 2020
Telefonaktiebolaget LM Ericsson (publ)
Org. Nr. 556016-0680
Helena Stjernholm | Ronnie Leten | Jacob Wallenberg | ||
Deputy Chair | Chair | Deputy Chair | ||
Jon Fredrik Baksaas | Jan Carlson | Nora Denzel | ||
Member of the Board | Member of the Board | Member of the Board | ||
Eric A. Elzvik | Kurt Jofs | Kristin S. Rinne | ||
Member of the Board | Member of the Board | Member of the Board | ||
Börje Ekholm | ||||
President, CEO and member of the Board | ||||
Torbjörn Nyman | Kjell-Åke Soting | Roger Svensson | ||
Member of the Board | Member of the Board | Member of the Board |
13 Ericsson | Second quarter report 2020 | Board assurance |
Editors note
14 Ericsson | Second quarter report 2020 | Editors note |
Forward-looking statements
15 Ericsson | Second quarter report 2020 | Forward-looking statements |
Financial statements
and other information
16 Ericsson | Second quarter report 2020 | Financial statements and other information |
Condensed consolidated income statement
Q2 | Jan-Jun | |||||||||||||||||||||||
SEK million |
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||
Net sales |
55,578 | 54,810 | 1 | % | 105,328 | 103,716 | 2 | % | ||||||||||||||||
Cost of sales |
-34,661 | -34,739 | 0 | % | -64,623 | -64,866 | 0 | % | ||||||||||||||||
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Gross income |
20,917 | 20,071 | 4 | % | 40,705 | 38,850 | 5 | % | ||||||||||||||||
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Gross margin (%) |
37.6 | % | 36.6 | % | 38.6 | % | 37.5 | % | ||||||||||||||||
Research and development expenses |
-10,035 | -9,518 | 5 | % | -19,180 | -18,685 | 3 | % | ||||||||||||||||
Selling and administrative expenses |
-7,052 | -6,964 | 1 | % | -13,290 | -12,995 | 2 | % | ||||||||||||||||
Impairment losses on trade receivables |
42 | 151 | -72 | % | -118 | 710 | -117 | % | ||||||||||||||||
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Operating expenses |
-17,045 | -16,331 | 4 | % | -32,588 | -30,970 | 5 | % | ||||||||||||||||
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Other operating income and expenses |
131 | 66 | 98 | % | 220 | 839 | -74 | % | ||||||||||||||||
Shares in earnings of JV and associated companies |
-152 | -67 | 127 | % | -180 | -84 | 114 | % | ||||||||||||||||
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Operating income |
3,851 | 3,739 | 3 | % | 8,157 | 8,635 | -6 | % | ||||||||||||||||
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Financial income and expenses, net |
292 | -441 | -166 | % | -610 | -1,046 | -42 | % | ||||||||||||||||
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Income after financial items |
4,143 | 3,298 | 26 | % | 7,547 | 7,589 | -1 | % | ||||||||||||||||
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Income tax |
-1,558 | -1,451 | 7 | % | -2,682 | -3,339 | -20 | % | ||||||||||||||||
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Net income |
2,585 | 1,847 | 40 | % | 4,865 | 4,250 | 14 | % | ||||||||||||||||
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Net income attributable to: |
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Owners of the Parent Company |
2,452 | 1,705 | 4,608 | 4,022 | ||||||||||||||||||||
Non-controlling interests |
133 | 142 | 257 | 228 | ||||||||||||||||||||
Other information |
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Average number of shares, basic (million) |
3,322 | 3,304 | 3,320 | 3,302 | ||||||||||||||||||||
Earnings (loss) per share, basic (SEK) ¹) |
0.74 | 0.52 | 1.39 | 1.22 | ||||||||||||||||||||
Earnings (loss) per share, diluted (SEK) ²) |
0.74 | 0.51 | 1.39 | 1.21 |
1) | Based on net income (loss) attributable to owners of the Parent Company. |
2) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
Condensed statement of comprehensive income (loss)
Q2 | Jan-Jun | |||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) |
2,585 | 1,847 | 4,865 | 4,250 | ||||||||||||
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Other comprehensive income (loss) |
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Items that will not be reclassified to profit or loss |
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Remeasurements of defined benefits pension plans incl. asset ceiling |
1,482 | -2,624 | -3,201 | -5,450 | ||||||||||||
Revaluation of borrowings due to change in credit risk |
-1,032 | -108 | 693 | -535 | ||||||||||||
Tax on items that will not be reclassified to profit or loss |
-146 | 601 | 559 | 1,257 | ||||||||||||
Items that have been or may be reclassified to profit or loss |
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Cash flow hedge reserve |
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Gains/ losses arising during the period |
146 | -37 | -95 | -206 | ||||||||||||
Reclassification adjustments on gains/ losses included in profit or loss |
71 | | 141 | | ||||||||||||
Changes in cumulative translation adjustments |
-3,690 | 188 | -1,479 | 1,595 | ||||||||||||
Share of other comprehensive income on JV and associated companies |
-90 | 8 | -2 | 46 | ||||||||||||
Tax on items that have been or may be reclassified to profit or loss |
-44 | 7 | -9 | 42 | ||||||||||||
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Total other comprehensive income (loss), net of tax |
-3,303 | -1,965 | -3,393 | -3,251 | ||||||||||||
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Total comprehensive income (loss) |
-718 | -118 | 1,472 | 999 | ||||||||||||
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Total comprehensive income (loss) attributable to: |
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Owners of the Parent Company |
-916 | -257 | 1,246 | 753 | ||||||||||||
Non-controlling interests |
198 | 139 | 226 | 246 |
17 Ericsson | Second quarter report 2020 | Financial statements |
Condensed consolidated balance sheet
Jun 30 | Mar 31 | Dec 31 | ||||||||||
SEK million |
2020 | 2020 | 2019 | |||||||||
Assets |
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Non-current assets |
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Intangible assets |
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Capitalized development expenses |
4,078 | 4,217 | 4,040 | |||||||||
Goodwill |
31,130 | 33,082 | 31,200 | |||||||||
Intellectual property rights, brands and other intangible assets |
2,189 | 2,583 | 2,491 | |||||||||
Property, plant and equipment |
13,996 | 14,244 | 13,850 | |||||||||
Right-of-use assets |
8,251 | 8,589 | 8,487 | |||||||||
Financial assets |
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Equity in JV and associated companies |
1,415 | 1,618 | 1,565 | |||||||||
Other investments in shares and participations |
1,472 | 1,410 | 1,432 | |||||||||
Customer finance, non-current |
1,553 | 1,843 | 2,262 | |||||||||
Interest-bearing securities, non-current |
24,025 | 23,335 | 20,354 | |||||||||
Other financial assets, non-current |
5,944 | 7,682 | 5,614 | |||||||||
Deferred tax assets |
31,082 | 31,611 | 31,174 | |||||||||
|
|
|
|
|
|
|||||||
125,135 | 130,214 | 122,469 | ||||||||||
|
|
|
|
|
|
|||||||
Current assets |
||||||||||||
Inventories |
31,917 | 32,588 | 30,863 | |||||||||
Contract assets |
10,971 | 10,256 | 12,171 | |||||||||
Trade receivables |
38,325 | 42,572 | 43,069 | |||||||||
Customer finance, current |
1,001 | 1,113 | 1,494 | |||||||||
Other current receivables |
18,035 | 19,383 | 14,479 | |||||||||
Interest-bearing securities, current |
5,739 | 7,834 | 6,759 | |||||||||
Cash and cash equivalents |
45,655 | 48,347 | 45,079 | |||||||||
|
|
|
|
|
|
|||||||
151,643 | 162,093 | 153,914 | ||||||||||
|
|
|
|
|
|
|||||||
Total assets |
276,778 | 292,307 | 276,383 | |||||||||
|
|
|
|
|
|
|||||||
Equity and liabilities |
||||||||||||
Equity |
||||||||||||
Stockholders equity |
79,005 | 79,841 | 82,559 | |||||||||
Non-controlling interest in equity of subsidiaries |
-533 | -728 | -681 | |||||||||
|
|
|
|
|
|
|||||||
78,472 | 79,113 | 81,878 | ||||||||||
|
|
|
|
|
|
|||||||
Non-current liabilities |
||||||||||||
Post-employment benefits |
38,605 | 43,029 | 35,817 | |||||||||
Provisions, non-current |
2,240 | 2,703 | 2,679 | |||||||||
Deferred tax liabilities |
1,164 | 1,060 | 1,224 | |||||||||
Borrowings, non-current |
22,581 | 23,381 | 28,257 | |||||||||
Lease liabilities, non-current |
7,400 | 7,705 | 7,595 | |||||||||
Other non-current liabilities |
1,813 | 2,178 | 2,114 | |||||||||
|
|
|
|
|
|
|||||||
73,803 | 80,056 | 77,686 | ||||||||||
|
|
|
|
|
|
|||||||
Current liabilities |
||||||||||||
Provisions, current |
8,363 | 8,357 | 8,244 | |||||||||
Borrowings, current |
15,290 | 17,759 | 9,439 | |||||||||
Lease liabilities, current |
2,302 | 2,396 | 2,287 | |||||||||
Contract liabilities |
31,532 | 34,265 | 29,041 | |||||||||
Trade payables |
32,182 | 29,840 | 30,403 | |||||||||
Other current liabilities |
34,834 | 40,521 | 37,405 | |||||||||
|
|
|
|
|
|
|||||||
124,503 | 133,138 | 116,819 | ||||||||||
|
|
|
|
|
|
|||||||
Total equity and liabilities |
276,778 | 292,307 | 276,383 | |||||||||
|
|
|
|
|
|
|||||||
Assets pledged as collateral |
6,805 | 5,866 | 5,901 | |||||||||
Contingent liabilities |
1,164 | 1,446 | 1,527 |
18 Ericsson | Second quarter report 2020 | Financial statements |
Condensed consolidated statement of cash flows
Q2 | Jan-Jun | Jan-Dec 2019 |
||||||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Operating activities |
||||||||||||||||||||
Net income |
2,585 | 1,847 | 4,865 | 4,250 | 1,840 | |||||||||||||||
Adjustments to reconcile net income to cash |
||||||||||||||||||||
Taxes |
1,132 | 310 | 712 | 1,114 | 1,652 | |||||||||||||||
Earnings/dividends in JV and associated companies |
155 | 71 | 185 | 95 | 406 | |||||||||||||||
Depreciation, amortization and impairment losses |
2,156 | 2,274 | 4,276 | 4,600 | 9,089 | |||||||||||||||
Other |
-440 | 450 | 294 | 374 | 1,079 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
5,588 | 4,952 | 10,332 | 10,433 | 14,066 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Changes in operating net assets |
||||||||||||||||||||
Inventories |
-1,253 | -3,065 | -1,791 | -6,016 | 261 | |||||||||||||||
Customer finance, current and non-current |
307 | 384 | 1,124 | -527 | -858 | |||||||||||||||
Trade receivables and contract assets |
0 | 3,338 | 5,559 | 7,683 | 10,995 | |||||||||||||||
Trade payables |
4,104 | 1,833 | 1,928 | 1,853 | -372 | |||||||||||||||
Provisions and post-employment benefits |
-1,189 | -480 | -971 | -3,939 | -3,729 | |||||||||||||||
Contract liabilities |
-1,000 | -1,641 | 2,987 | 6,822 | -1,579 | |||||||||||||||
Other operating assets and liabilities, net |
-1,108 | -1,698 | -9,417 | -6,921 | -1,911 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
-139 | -1,329 | -581 | -1,045 | 2,807 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flow from operating activities |
5,449 | 3,623 | 9,751 | 9,388 | 16,873 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Investing activities |
||||||||||||||||||||
Investments in property, plant and equipment |
-1,327 | -1,098 | -2,440 | -2,412 | -5,118 | |||||||||||||||
Sales of property, plant and equipment |
69 | 184 | 95 | 416 | 744 | |||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-45 | 3 | -253 | 302 | -1,505 | |||||||||||||||
Product development |
-211 | -446 | -473 | -903 | -1,545 | |||||||||||||||
Other investing activities |
-126 | -36 | -168 | -201 | -331 | |||||||||||||||
Interest-bearing securities |
1,141 | 2,414 | -2,291 | 7,087 | 4,214 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flow from investing activities |
-499 | 1,021 | -5,530 | 4,289 | -3,541 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flow before financing activities |
4,950 | 4,644 | 4,221 | 13,677 | 13,332 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Financing activities |
||||||||||||||||||||
Dividends paid |
-2,489 | -3,308 | -2,498 | -4,294 | -4,450 | |||||||||||||||
Repayment of lease liabilities |
-618 | -623 | -1,214 | -1,227 | -2,990 | |||||||||||||||
Other financing activities |
-1,451 | -680 | 585 | -1,690 | 540 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flow from financing activities |
-4,558 | -4,611 | -3,127 | -7,211 | -6,900 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Effect of exchange rate changes on cash |
-3,084 | 13 | -518 | 644 | 258 | |||||||||||||||
Net change in cash and cash equivalents |
-2,692 | 46 | 576 | 7,110 | 6,690 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents, beginning of period |
48,347 | 45,453 | 45,079 | 38,389 | 38,389 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents, end of period |
45,655 | 45,499 | 45,655 | 45,499 | 45,079 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
19 Ericsson | Second quarter report 2020 | Financial statements |
Condensed consolidated statement of changes in equity
Jan-Jun | Jan-Dec 2019 |
|||||||||||
SEK million |
2020 | 2019 | ||||||||||
Opening balance |
81,878 | 87,770 | 87,770 | |||||||||
Adjustment due to new accounting standards 1) |
| -249 | -249 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted opening balance |
81,878 | 87,521 | 87,521 | |||||||||
|
|
|
|
|
|
|||||||
Total comprehensive income (loss) |
1,472 | 999 | -1,750 | |||||||||
Sale/repurchase of own shares |
81 | 86 | 197 | |||||||||
Long-term variable compensation plans |
97 | 221 | 377 | |||||||||
Dividends to shareholders 2) |
-5,056 | -4,294 | -4,450 | |||||||||
Transactions with non-controlling interests |
| | -17 | |||||||||
|
|
|
|
|
|
|||||||
Closing balance |
78,472 | 84,533 | 81,878 | |||||||||
|
|
|
|
|
|
1) | Opening balance adjustment in 2019 due to IFRS 16. |
2) | SEK 0.75 per share of the dividend decided by the AGM in April will be paid out in Q3 2020. |
Condensed consolidated income statement isolated quarters
2020 |
2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Cost of sales |
-34,661 | -29,962 | -41,939 | -35,587 | -34,739 | -30,127 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross income |
20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross margin (% ) |
37.6 | % | 39.8 | % | 36.8 | % | 37.7 | % | 36.6 | % | 38.4 | % | ||||||||||||
Research and development expenses |
-10,035 | -9,145 | -10,633 | -9,497 | -9,518 | -9,167 | ||||||||||||||||||
Selling and administrative expenses |
-7,052 | -6,238 | -8,222 | -4,920 | -6,964 | -6,031 | ||||||||||||||||||
Impairment losses on trade receivables |
42 | -160 | -173 | 200 | 151 | 559 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
-17,045 | -15,543 | -19,028 | -14,217 | -16,331 | -14,639 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other operating income and expenses 1) |
131 | 89 | 756 | -11,305 | 66 | 773 | ||||||||||||||||||
Shares in earnings of JV and associated companies |
-152 | -28 | -37 | -214 | -67 | -17 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) |
3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial income and expenses, net |
292 | -902 | -71 | -685 | -441 | -605 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income after financial items |
4,143 | 3,404 | 6,054 | -4,881 | 3,298 | 4,291 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Taxes |
-1,558 | -1,124 | -1,570 | -2,013 | -1,451 | -1,888 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) |
2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||||||
Owners of the Parent Company |
2,452 | 2,156 | 4,430 | -6,229 | 1,705 | 2,317 | ||||||||||||||||||
Non-controlling interests |
133 | 124 | 54 | -665 | 142 | 86 | ||||||||||||||||||
Other information |
||||||||||||||||||||||||
Average number of shares, basic (million) |
3,322 | 3,317 | 3,313 | 3,308 | 3,304 | 3,300 | ||||||||||||||||||
Earnings (loss) per share, basic (SEK) 2) |
0.74 | 0.65 | 1.34 | -1.89 | 0.52 | 0.70 | ||||||||||||||||||
Earnings (loss) per share, diluted (SEK) 3) |
0.74 | 0.65 | 1.33 | -1.89 | 0.51 | 0.70 |
1) | Includes cost provisions related to the resolution of the SEC and DOJ investigations of SEK -11.5 b. in Q3 2019 and a partial release of the same provision of SEK 0.7 b. in Q4 2019. |
2) | Based on net income (loss) attributable to owners of the Parent Company. |
3) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
20 Ericsson | Second quarter report 2020 | Financial statements |
Condensed consolidated statement of cash flows isolated quarters
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Operating activities |
||||||||||||||||||||||||
Net income (loss) |
2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||
Adjustments to reconcile net income to cash |
||||||||||||||||||||||||
Taxes |
1,132 | -420 | 949 | -411 | 310 | 804 | ||||||||||||||||||
Earnings/ dividends in JV and associated companies |
155 | 30 | 33 | 278 | 71 | 24 | ||||||||||||||||||
Depreciation, amortization and impairment losses |
2,156 | 2,120 | 2,290 | 2,199 | 2,274 | 2,326 | ||||||||||||||||||
Other |
-440 | 734 | 197 | 508 | 450 | -76 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
5,588 | 4,744 | 7,953 | -4,320 | 4,952 | 5,481 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Changes in operating net assets |
||||||||||||||||||||||||
Inventories |
-1,253 | -538 | 5,200 | 1,077 | -3,065 | -2,951 | ||||||||||||||||||
Customer finance, current and non-current |
307 | 817 | -66 | -265 | 384 | -911 | ||||||||||||||||||
Trade receivables and contract assets |
0 | 5,559 | -3,216 | 6,528 | 3,338 | 4,345 | ||||||||||||||||||
Trade payables |
4,104 | -2,176 | 688 | -2,913 | 1,833 | 20 | ||||||||||||||||||
Provisions and post-em ployment benefits |
-1,189 | 218 | -10,509 | 10,719 | -480 | -3,459 | ||||||||||||||||||
Contractliabilities |
-1,000 | 3,987 | -4,413 | -3,988 | -1,641 | 8,463 | ||||||||||||||||||
Other operating assets and liabilities, net |
-1,108 | -8,309 | 4,859 | 151 | -1,698 | -5,223 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
-139 | -442 | -7,457 | 11,309 | -1,329 | 284 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow from operating activities |
5,449 | 4,302 | 496 | 6,989 | 3,623 | 5,765 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investing activities |
||||||||||||||||||||||||
Investments in property, plant and equipment |
-1,327 | -1,113 | -1,475 | -1,231 | -1,098 | -1,314 | ||||||||||||||||||
Sales of property, plant and equipment |
69 | 26 | 206 | 122 | 184 | 232 | ||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-45 | -208 | -1,341 | -466 | 3 | 299 | ||||||||||||||||||
Product development |
-211 | -262 | -329 | -313 | -446 | -457 | ||||||||||||||||||
Other investing activities |
-126 | -42 | -74 | -56 | -36 | -165 | ||||||||||||||||||
Interest-bearing securities |
1,141 | -3,432 | -1,759 | -1,114 | 2,414 | 4,673 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow from investing activities |
-499 | -5,031 | -4,772 | -3,058 | 1,021 | 3,268 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow before financing activities |
4,950 | -729 | -4,276 | 3,931 | 4,644 | 9,033 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financing activities |
||||||||||||||||||||||||
Dividends paid |
-2,489 | -9 | -15 | -141 | -3,308 | -986 | ||||||||||||||||||
Repayment of lease liabilities |
-618 | -596 | -711 | -1,052 | -623 | -604 | ||||||||||||||||||
Other financing activities |
-1,451 | 2,036 | 834 | 1,396 | -680 | -1,010 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow from financing activities |
-4,558 | 1,431 | 108 | 203 | -4,611 | -2,600 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Effect of exchange rate changes on cash |
-3,084 | 2,566 | -1,936 | 1,550 | 13 | 631 | ||||||||||||||||||
Net change in cash and cash equivalents |
-2,692 | 3,268 | -6,104 | 5,684 | 46 | 7,064 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents, beginning of period |
48,347 | 45,079 | 51,183 | 45,499 | 45,453 | 38,389 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash and cash equivalents, end of period |
45,655 | 48,347 | 45,079 | 51,183 | 45,499 | 45,453 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
21 Ericsson | Second Quarter Report 2020 | Financial statements |
Condensed Parent Company income statement
Q2 | Jan-Jun | Jan-Dec | ||||||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | 2019 | |||||||||||||||
Net sales |
| | | | | |||||||||||||||
Cost of sales |
| | | | | |||||||||||||||
Gross income |
| | | | | |||||||||||||||
Operating expenses |
-241 | -236 | -492 | -757 | -1,531 | |||||||||||||||
Other operating income and expenses¹) |
354 | 518 | 934 | 969 | -8,148 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income |
113 | 282 | 442 | 212 | -9,679 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Financial net |
1,140 | 649 | 1,833 | 596 | 6,610 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
income after financial items |
1,253 | 931 | 2,275 | 808 | -3,069 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Transfers to (-)/from untaxed reserves |
| | | | -1,961 | |||||||||||||||
Taxes |
-144 | -45 | -318 | -76 | 87 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) |
1,109 | 886 | 1,957 | 732 | -4,943 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
1) | Includes costs of SEK -10.7 billion in Jan-Dec 2019 related to the resolution of the SEC and DOJ investigations. |
Condensed Parent Company statement of comprehensive income (loss)
Q2 | Jan-Jun | Jan-Dec | ||||||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | 2019 | |||||||||||||||
Net income (loss) |
1,109 | 886 | 1,957 | 732 | -4,943 | |||||||||||||||
Revaluation of borrowings due to change in credit risk |
-1,032 | -108 | 693 | -535 | -651 | |||||||||||||||
Tax on items that will not be reclassified to profit or loss |
212 | 22 | -143 | 110 | 134 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other comprehensive income, net of tax |
-820 | -86 | 550 | -425 | -517 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive income (loss) |
289 | 800 | 2,507 | 307 | -5,460 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
22 Ericsson | Second Quarter Report 2020 | Financial statements |
Condensed Parent Company balance sheet
Jun 30 | Dec 31 | |||||||
SEK million |
2020 | 2019 | ||||||
Assets |
||||||||
Fixed assets |
||||||||
Intangible assets |
41 | 58 | ||||||
Tangible assets |
369 | 303 | ||||||
Financial assets1) |
111,319 | 106,156 | ||||||
|
|
|
|
|||||
111,729 | 106,517 | |||||||
|
|
|
|
|||||
Current assets |
||||||||
Inventories |
| | ||||||
Receivables |
25,863 | 23,166 | ||||||
Short-term investments |
5,508 | 6,328 | ||||||
Cash and cash equivalents |
33,813 | 29,800 | ||||||
|
|
|
|
|||||
65,184 | 59,294 | |||||||
|
|
|
|
|||||
Total assets |
176,913 | 165,811 | ||||||
|
|
|
|
|||||
Stockholders equity, provisions and liabilities |
||||||||
Equity |
||||||||
Restricted equity |
48,164 | 48,164 | ||||||
Non-restricted equity |
29,861 | 32,222 | ||||||
|
|
|
|
|||||
78,025 | 80,386 | |||||||
|
|
|
|
|||||
Provisions |
630 | 668 | ||||||
Non-current liabilities |
22,803 | 28,341 | ||||||
Current liabilities |
75,455 | 56,416 | ||||||
|
|
|
|
|||||
Total stockholders equity, provisions and liabilities |
176,913 | 165,811 | ||||||
|
|
|
|
|||||
1) Of which interest-bearing securities, non-current |
24,025 | 20,354 | ||||||
|
|
|
|
23 Ericsson | Second quarter report 2020 | Financial statements |
Net sales by segment by quarter
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
39,827 | 35,126 | 44,448 | 39,261 | 37,819 | 33,481 | ||||||||||||||||||
Of which Products |
28,966 | 24,748 | 31,159 | 27,500 | 26,698 | 23,765 | ||||||||||||||||||
Of which Services |
10,861 | 10,378 | 13,289 | 11,761 | 11,121 | 9,716 | ||||||||||||||||||
Digital Services |
8,575 | 7,345 | 13,168 | 9,881 | 8,991 | 7,817 | ||||||||||||||||||
Of which Products |
4,598 | 3,798 | 7,338 | 5,594 | 4,611 | 3,937 | ||||||||||||||||||
Of which Services |
3,977 | 3,547 | 5,830 | 4,287 | 4,380 | 3,880 | ||||||||||||||||||
Managed Services |
5,573 | 5,714 | 7,027 | 6,359 | 6,323 | 5,856 | ||||||||||||||||||
Emerging Business and Other |
1,603 | 1,565 | 1,730 | 1,626 | 1,677 | 1,752 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Sequential change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
13 | % | -21 | % | 13 | % | 4 | % | 13 | % | -20 | % | ||||||||||||
Of which Products |
17 | % | -21 | % | 13 | % | 3 | % | 12 | % | -20 | % | ||||||||||||
Of which Services |
5 | % | -22 | % | 13 | % | 6 | % | 14 | % | -18 | % | ||||||||||||
Digital Services |
17 | % | -44 | % | 33 | % | 10 | % | 15 | % | -40 | % | ||||||||||||
Of which Products |
21 | % | -48 | % | 31 | % | 21 | % | 17 | % | -47 | % | ||||||||||||
Of which Services |
12 | % | -39 | % | 36 | % | -2 | % | 13 | % | -30 | % | ||||||||||||
Managed Services |
-2 | % | -19 | % | 11 | % | 1 | % | 8 | % | -15 | % | ||||||||||||
Emerging Business and Other |
2 | % | -10 | % | 6 | % | -3 | % | -4 | % | -23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
12 | % | -25 | % | 16 | % | 4 | % | 12 | % | -23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
5 | % | 5 | % | 7 | % | 9 | % | 17 | % | 17 | % | ||||||||||||
Of which Products |
8 | % | 4 | % | 5 | % | 9 | % | 20 | % | 22 | % | ||||||||||||
Of which Services |
-2 | % | 7 | % | 12 | % | 11 | % | 10 | % | 6 | % | ||||||||||||
Digital Services |
-5 | % | -6 | % | 1 | % | 10 | % | 2 | % | 8 | % | ||||||||||||
Of which Products |
0 | % | -4 | % | -2 | % | 22 | % | 3 | % | 0 | % | ||||||||||||
Of which Services |
-9 | % | -9 | % | 5 | % | -3 | % | 0 | % | 17 | % | ||||||||||||
Managed Services |
-12 | % | -2 | % | 2 | % | -2 | % | -3 | % | -1 | % | ||||||||||||
Emerging Business and Other |
-4 | % | -11 | % | -24 | % | -33 | % | -18 | % | 6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
1 | % | 2 | % | 4 | % | 6 | % | 10 | % | 13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
74,953 | 35,126 | 155,009 | 110,561 | 71,300 | 33,481 | ||||||||||||||||||
Of which Products |
53,714 | 24,748 | 109,122 | 77,963 | 50,463 | 23,765 | ||||||||||||||||||
Of which Services |
21,239 | 10,378 | 45,887 | 32,598 | 20,837 | 9,716 | ||||||||||||||||||
Digital Services |
15,920 | 7,345 | 39,857 | 26,689 | 16,808 | 7,817 | ||||||||||||||||||
Of which Products |
8,396 | 3,798 | 21,480 | 14,142 | 8,548 | 3,937 | ||||||||||||||||||
Of which Services |
7,524 | 3,547 | 18,377 | 12,547 | 8,260 | 3,880 | ||||||||||||||||||
Managed Services |
11,287 | 5,714 | 25,565 | 18,538 | 12,179 | 5,856 | ||||||||||||||||||
Emerging Business and Other |
3,168 | 1,565 | 6,785 | 5,055 | 3,429 | 1,752 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
5 | % | 5 | % | 12 | % | 14 | % | 17 | % | 17 | % | ||||||||||||
Of which Products |
6 | % | 4 | % | 13 | % | 16 | % | 21 | % | 22 | % | ||||||||||||
Of which Services |
2 | % | 7 | % | 10 | % | 9 | % | 9 | % | 6 | % | ||||||||||||
Digital Services |
-5 | % | -6 | % | 5 | % | 6 | % | 4 | % | 8 | % | ||||||||||||
Of which Products |
-2 | % | -4 | % | 5 | % | 9 | % | 2 | % | 0 | % | ||||||||||||
Of which Services |
-9 | % | -9 | % | 4 | % | 4 | % | 8 | % | 17 | % | ||||||||||||
Managed Services |
-7 | % | -2 | % | -1 | % | -2 | % | -2 | % | -1 | % | ||||||||||||
Emerging Business and Other |
-8 | % | -11 | % | -19 | % | -18 | % | -7 | % | 6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
2 | % | 2 | % | 8 | % | 9 | % | 11 | % | 13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
25 Ericsson | Second quarter report 2020 | Additional information |
Sales growth adjusted for comparable units and currency
2020 | 2019 | |||||||||||||||||||||||
Isolated quarter, year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks 1) |
4 | % | 0 | % | 2 | % | 4 | % | 11 | % | 10 | % | ||||||||||||
Digital Services |
-5 | % | -9 | % | -3 | % | 5 | % | -3 | % | 0 | % | ||||||||||||
Managed Services |
-12 | % | -5 | % | -1 | % | -5 | % | -6 | % | -5 | % | ||||||||||||
Emerging Business and Other 2) |
-6 | % | -8 | % | 9 | % | -7 | % | 24 | % | 38 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total 1)2) |
0 | % | -2 | % | 1 | % | 3 | % | 7 | % | 7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
2 | % | 0 | % | 6 | % | 8 | % | 11 | % | 10 | % | ||||||||||||
Digital Services |
-7 | % | -9 | % | -1 | % | 1 | % | -2 | % | 0 | % | ||||||||||||
Managed Services |
-9 | % | -5 | % | -4 | % | -5 | % | -6 | % | -5 | % | ||||||||||||
Emerging Business and Other 1) |
-7 | % | -8 | % | 14 | % | 15 | % | 30 | % | 38 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total 1)2) |
-1 | % | -2 | % | 4 | % | 5 | % | 7 | % | 7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
1) | Adjusted for Kathrein acquisition made in October 2019. |
2) | Adjusted for MediaKind divestment in February 2019. |
Gross income and gross margin by segment by quarter
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
16,022 | 15,586 | 18,265 | 16,327 | 15,670 | 14,455 | ||||||||||||||||||
Digital Services |
3,738 | 2,929 | 4,898 | 3,749 | 3,311 | 2,878 | ||||||||||||||||||
Managed Services |
955 | 933 | 1,039 | 1,136 | 779 | 1,036 | ||||||||||||||||||
Emerging Business and Other |
202 | 340 | 232 | 328 | 311 | 410 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
40.2 | % | 44.4 | % | 41.1 | % | 41.6 | % | 41.4 | % | 43.2 | % | ||||||||||||
Digital Services |
43.6 | % | 39.9 | % | 37.2 | % | 37.9 | % | 36.8 | % | 36.8 | % | ||||||||||||
Managed Services |
17.1 | % | 16.3 | % | 14.8 | % | 17.9 | % | 12.3 | % | 17.7 | % | ||||||||||||
Emerging Business and Other |
12.6 | % | 21.7 | % | 13.4 | % | 20.2 | % | 18.5 | % | 23.4 | % | ||||||||||||
Total |
37.6 | % | 39.8 | % | 36.8 | % | 37.7 | % | 36.6 | % | 38.4 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
31,608 | 15,586 | 64,717 | 46,452 | 30,125 | 14,455 | ||||||||||||||||||
Digital Services |
6,667 | 2,929 | 14,836 | 9,938 | 6,189 | 2,878 | ||||||||||||||||||
Managed Services |
1,888 | 933 | 3,990 | 2,951 | 1,815 | 1,036 | ||||||||||||||||||
Emerging Business and Other |
542 | 340 | 1,281 | 1,049 | 721 | 410 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
40,705 | 19,788 | 84,824 | 60,390 | 38,850 | 18,779 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
42.2 | % | 44.4 | % | 41.8 | % | 42.0 | % | 42.3 | % | 43.2 | % | ||||||||||||
Digital Services |
41.9 | % | 39.9 | % | 37.2 | % | 37.2 | % | 36.8 | % | 36.8 | % | ||||||||||||
Managed Services |
16.7 | % | 16.3 | % | 15.6 | % | 15.9 | % | 14.9 | % | 17.7 | % | ||||||||||||
Emerging Business and Other |
17.1 | % | 21.7 | % | 18.9 | % | 20.8 | % | 21.0 | % | 23.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
38.6 | % | 39.8 | % | 37.3 | % | 37.5 | % | 37.5 | % | 38.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
26 Ericsson | Second quarter report 2020 | Additional information |
Operating income (loss) and operating margin by segment by quarter
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
5,255 | 5,827 | 6,399 | 7,216 | 5,680 | 5,472 | ||||||||||||||||||
Digital Services |
-697 | -1,417 | -164 | -660 | -1,405 | -1,798 | ||||||||||||||||||
Managed Services |
263 | 408 | 292 | 562 | 203 | 1,252 | ||||||||||||||||||
Emerging Business and Other |
-970 | -512 | -402 | -11,314 | -739 | -30 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
13.2 | % | 16.6 | % | 14.4 | % | 18.4 | % | 15.0 | % | 16.3 | % | ||||||||||||
Digital Services |
-8.1 | % | -19.3 | % | -1.2 | % | -6.7 | % | -15.6 | % | -23.0 | % | ||||||||||||
Managed Services |
4.7 | % | 7.1 | % | 4.2 | % | 8.8 | % | 3.2 | % | 21.4 | % | ||||||||||||
Emerging Business and Other |
-60.5 | % | -32.7 | % | -23.2 | % | -695.8 | % | -44.1 | % | -1.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
6.9 | % | 8.7 | % | 9.2 | % | -7.3 | % | 6.8 | % | 10.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
11,082 | 5,827 | 24,767 | 18,368 | 11,152 | 5,472 | ||||||||||||||||||
Digital Services |
-2,114 | -1,417 | -4,027 | -3,863 | -3,203 | -1,798 | ||||||||||||||||||
Managed Services |
671 | 408 | 2,309 | 2,017 | 1,455 | 1,252 | ||||||||||||||||||
Emerging Business and Other |
-1,482 | -512 | -12,485 | -12,083 | -769 | -30 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
14.8 | % | 16.6 | % | 16.0 | % | 16.6 | % | 15.6 | % | 16.3 | % | ||||||||||||
Digital Services |
-13.3 | % | -19.3 | % | -10.1 | % | -14.5 | % | -19.1 | % | -23.0 | % | ||||||||||||
Managed Services |
5.9 | % | 7.1 | % | 9.0 | % | 10.9 | % | 11.9 | % | 21.4 | % | ||||||||||||
Emerging Business and Other |
-46.8 | % | -32.7 | % | -184.0 | % | -239.0 | % | -22.4 | % | -1.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
7.7 | % | 8.7 | % | 4.6 | % | 2.8 | % | 8.3 | % | 10.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
27 Ericsson | Second quarter report 2020 | Additional information |
EBITA and EBITA margin by segment by quarter
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
5,321 | 5,957 | 6,447 | 7,253 | 5,716 | 5,552 | ||||||||||||||||||
Digital Services |
-563 | -1,283 | -23 | -521 | -1,268 | -1,638 | ||||||||||||||||||
Managed Services |
264 | 409 | 293 | 563 | 205 | 1,253 | ||||||||||||||||||
Emerging Business and Other |
-913 | -456 | -323 | -11,262 | -688 | 43 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
4,109 | 4,627 | 6,394 | -3,967 | 3,965 | 5,210 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
13.4 | % | 17.0 | % | 14.5 | % | 18.5 | % | 15.1 | % | 16.6 | % | ||||||||||||
Digital Services |
-6.6 | % | -17.5 | % | -0.2 | % | -5.3 | % | -14.1 | % | -21.0 | % | ||||||||||||
Managed Services |
4.7 | % | 7.2 | % | 4.2 | % | 8.9 | % | 3.2 | % | 21.4 | % | ||||||||||||
Emerging Business and Other |
-57.0 | % | -29.1 | % | -18.7 | % | -692.6 | % | -41.0 | % | 2.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
7.4 | % | 9.3 | % | 9.6 | % | -6.9 | % | 7.2 | % | 10.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
11,278 | 5,957 | 24,968 | 18,521 | 11,268 | 5,552 | ||||||||||||||||||
Digital Services |
-1,846 | -1,283 | -3,450 | -3,427 | -2,906 | -1,638 | ||||||||||||||||||
Managed Services |
673 | 409 | 2,314 | 2,021 | 1,458 | 1,253 | ||||||||||||||||||
Emerging Business and Other |
-1,369 | -456 | -12,230 | -11,907 | -645 | 43 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
8,736 | 4,627 | 11,602 | 5,208 | 9,175 | 5,210 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
15.0 | % | 17.0 | % | 16.1 | % | 16.8 | % | 15.8 | % | 16.6 | % | ||||||||||||
Digital Services |
-11.6 | % | -17.5 | % | -8.7 | % | -12.8 | % | -17.3 | % | -21.0 | % | ||||||||||||
Managed Services |
6.0 | % | 7.2 | % | 9.1 | % | 10.9 | % | 12.0 | % | 21.4 | % | ||||||||||||
Emerging Business and Other |
-43.2 | % | -29.1 | % | -180.3 | % | -235.5 | % | -18.8 | % | 2.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
8.3 | % | 9.3 | % | 5.1 | % | 3.2 | % | 8.8 | % | 10.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
28 Ericsson | Second quarter report 2020 | Additional information |
Net sales by market area by quarter
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
South East Asia, Oceania and India |
6,582 | 5,917 | 9,231 | 7,432 | 6,965 | 6,148 | ||||||||||||||||||
North East Asia |
7,790 | 3,907 | 9,704 | 6,356 | 6,516 | 3,824 | ||||||||||||||||||
North America |
18,407 | 17,911 | 17,368 | 18,985 | 17,699 | 16,171 | ||||||||||||||||||
Europe and Latin America 1)2) |
13,061 | 12,241 | 17,489 | 14,308 | 14,085 | 13,124 | ||||||||||||||||||
Middle East and Africa |
5,431 | 5,829 | 8,426 | 6,046 | 5,641 | 5,412 | ||||||||||||||||||
Other 1)2) |
4,307 | 3,945 | 4,155 | 4,000 | 3,904 | 4,227 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1) Of which in Sweden |
284 | 227 | 235 | 13 | 149 | 192 | ||||||||||||||||||
2) Of which in EU* |
7,278 | 6,259 | 10,572 | 8,815 | 8,385 | 7,957 | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Sequential change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
South East Asia, Oceania and India |
11 | % | -36 | % | 24 | % | 7 | % | 13 | % | -25 | % | ||||||||||||
North East Asia |
99 | % | -60 | % | 53 | % | -2 | % | 70 | % | -54 | % | ||||||||||||
North America |
3 | % | 3 | % | -9 | % | 7 | % | 9 | % | -10 | % | ||||||||||||
Europe and Latin America 1)2) |
7 | % | -30 | % | 22 | % | 2 | % | 7 | % | -27 | % | ||||||||||||
Middle East and Africa |
-7 | % | -31 | % | 39 | % | 7 | % | 4 | % | -21 | % | ||||||||||||
Other 1)2) |
9 | % | -5 | % | 4 | % | 2 | % | -8 | % | -5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
12 | % | -25 | % | 16 | % | 4 | % | 12 | % | -23 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1) Of which in Sweden |
25 | % | -3 | % | 1708 | % | -91 | % | -22 | % | -49 | % | ||||||||||||
2) Of which in EU* |
16 | % | -29 | % | 20 | % | 5 | % | 5 | % | -23 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year over year change, percent |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
South East Asia, Oceania and India |
-5 | % | -4 | % | 12 | % | -7 | % | 0 | % | -4 | % | ||||||||||||
North East Asia |
20 | % | 2 | % | 16 | % | 10 | % | 37 | % | 13 | % | ||||||||||||
North America |
4 | % | 11 | % | -4 | % | 27 | % | 23 | % | 43 | % | ||||||||||||
Europe and Latin America 1)2) |
-7 | % | -7 | % | -2 | % | -3 | % | 1 | % | 1 | % | ||||||||||||
Middle East and Africa |
-4 | % | 8 | % | 23 | % | 4 | % | -3 | % | -8 | % | ||||||||||||
Other 1)2) |
10 | % | -7 | % | -6 | % | -13 | % | -1 | % | 21 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
1 | % | 2 | % | 4 | % | 6 | % | 10 | % | 13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1) Of which in Sweden |
91 | % | 18 | % | -37 | % | -97 | % | -75 | % | -79 | % | ||||||||||||
2) Of which in EU* |
5 | % | -4 | % | 2 | % | 4 | % | -3 | % | -7 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
South East Asia, Oceania and India |
12,499 | 5,917 | 29,776 | 20,545 | 13,113 | 6,148 | ||||||||||||||||||
North East Asia |
11,697 | 3,907 | 26,400 | 16,696 | 10,340 | 3,824 | ||||||||||||||||||
North America |
36,318 | 17,911 | 70,223 | 52,855 | 33,870 | 16,171 | ||||||||||||||||||
Europe and Latin America 1)2) |
25,302 | 12,241 | 59,006 | 41,517 | 27,209 | 13,124 | ||||||||||||||||||
Middle East and Africa |
11,260 | 5,829 | 25,525 | 17,099 | 11,053 | 5,412 | ||||||||||||||||||
Other 1)2) |
8,252 | 3,945 | 16,286 | 12,131 | 8,131 | 4,227 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1) Of which in Sweden |
511 | 227 | 589 | 354 | 341 | 192 | ||||||||||||||||||
2) Of which in EU* |
13,537 | 6,259 | 35,729 | 25,157 | 16,342 | 7,957 | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, year over year change, percent |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
South East Asia, Oceania and India |
-5 | % | -4 | % | 1 | % | -4 | % | -2 | % | -4 | % | ||||||||||||
North East Asia |
13 | % | 2 | % | 18 | % | 20 | % | 27 | % | 13 | % | ||||||||||||
North America |
7 | % | 11 | % | 20 | % | 30 | % | 32 | % | 43 | % | ||||||||||||
Europe and Latin America 1)2) |
-7 | % | -7 | % | -1 | % | 0 | % | 1 | % | 1 | % | ||||||||||||
Middle East and Africa |
2 | % | 8 | % | 5 | % | -2 | % | -5 | % | -8 | % | ||||||||||||
Other 1)2) |
1 | % | -7 | % | -1 | % | 1 | % | 9 | % | 21 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
2 | % | 2 | % | 8 | % | 9 | % | 11 | % | 13 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1) Of which in Sweden |
50 | % | 18 | % | -75 | % | -82 | % | -77 | % | -79 | % | ||||||||||||
2) Of which in EU* |
1 | % | -4 | % | -1 | % | -2 | % | -5 | % | -7 | % |
*) | No sales to UK are included as from 2020. |
29 Ericsson | Second quarter report 2020 | Additional information |
Q2 | Jan-Jun | |||||||||||||||
Country, percentage of net sales |
2020 | 2019 | 2020 | 2019 | ||||||||||||
United States |
35 | % | 33 | % | 36 | % | 34 | % | ||||||||
China |
9 | % | 7 | % | 7 | % | 6 | % | ||||||||
Japan |
3 | % | 3 | % | 4 | % | 3 | % | ||||||||
Australia |
4 | % | 3 | % | 4 | % | 3 | % | ||||||||
Saudi Arabia |
3 | % | 2 | % | 4 | % | 3 | % |
Net sales by market area by segment
Q2 2020 | Jan-Jun 2020 | |||||||||||||||||||||||||||||||||||||||
SEK million |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | ||||||||||||||||||||||||||||||
South East Asia, Oceania and India |
4,468 | 1,078 | 1,028 | 8 | 6,582 | 8,677 | 1,850 | 1,947 | 25 | 12,499 | ||||||||||||||||||||||||||||||
North East Asia |
6,381 | 1,180 | 172 | 57 | 7,790 | 9,162 | 2,037 | 375 | 123 | 11,697 | ||||||||||||||||||||||||||||||
North America |
15,772 | 1,733 | 879 | 23 | 18,407 | 31,002 | 3,280 | 2,001 | 35 | 36,318 | ||||||||||||||||||||||||||||||
Europe and Latin America |
7,813 | 2,633 | 2,526 | 89 | 13,061 | 15,018 | 5,017 | 5,092 | 175 | 25,302 | ||||||||||||||||||||||||||||||
Middle East and Africa |
3,009 | 1,450 | 969 | 3 | 5,431 | 6,585 | 2,793 | 1,872 | 10 | 11,260 | ||||||||||||||||||||||||||||||
Other |
2,384 | 501 | -1 | 1,423 | 4,307 | 4,509 | 943 | 0 | 2,800 | 8,252 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
39,827 | 8,575 | 5,573 | 1,603 | 55,578 | 74,953 | 15,920 | 11,287 | 3,168 | 105,328 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share of total |
72 | % | 15 | % | 10 | % | 3 | % | 100 | % | 71 | % | 15 | % | 11 | % | 3 | % | 100 | % |
Q2 2020 | ||||||||||||||||||||
Sequential change, percent |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | |||||||||||||||
South East Asia, Oceania and India |
6 | % | 40 | % | 12 | % | -53 | % | 11 | % | ||||||||||
North East Asia |
129 | % | 38 | % | -15 | % | -14 | % | 99 | % | ||||||||||
North America |
4 | % | 12 | % | -22 | % | 92 | % | 3 | % | ||||||||||
Europe and Latin America |
8 | % | 10 | % | -2 | % | 3 | % | 7 | % | ||||||||||
Middle East and Africa |
-16 | % | 8 | % | 7 | % | -57 | % | -7 | % | ||||||||||
Other |
12 | % | 13 | % | -200 | % | 3 | % | 9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
13 | % | 17 | % | -2 | % | 2 | % | 12 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Q2 2020 | Jan-Jun 2020 | |||||||||||||||||||||||||||||||||||||||
Year over year change, percent |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | ||||||||||||||||||||||||||||||
South East Asia, Oceania and India |
-11 | % | 17 | % | -1 | % | -47 | % | -5 | % | -9 | % | 7 | % | 7 | % | -7 | % | -5 | % | ||||||||||||||||||||
North East Asia |
19 | % | 28 | % | -16 | % | 90 | % | 20 | % | 12 | % | 25 | % | -20 | % | 76 | % | 13 | % | ||||||||||||||||||||
North America |
11 | % | -22 | % | -27 | % | -28 | % | 4 | % | 13 | % | -19 | % | -12 | % | -35 | % | 7 | % | ||||||||||||||||||||
Europe and Latin America |
-4 | % | -10 | % | -14 | % | -2 | % | -7 | % | -4 | % | -9 | % | -12 | % | -5 | % | -7 | % | ||||||||||||||||||||
Middle East and Africa |
-3 | % | -8 | % | 1 | % | 200 | % | -4 | % | 6 | % | -8 | % | 3 | % | 233 | % | 2 | % | ||||||||||||||||||||
Other |
20 | % | 24 | % | -200 | % | -6 | % | 10 | % | 8 | % | 10 | % | -100 | % | -9 | % | 1 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
5 | % | -5 | % | -12 | % | -4 | % | 1 | % | 5 | % | -5 | % | -7 | % | -8 | % | 2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 Ericsson | Second quarter report 2020 | Additional information |
IPR licensing revenues by segment by quarter
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
2,282 | 2,019 | 2,014 | 1,972 | 1,845 | 2,066 | ||||||||||||||||||
Digital Services |
501 | 443 | 443 | 433 | 404 | 454 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
2,783 | 2,462 | 2,457 | 2,405 | 2,249 | 2,520 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
4,301 | 2,019 | 7,897 | 5,883 | 3,911 | 2,066 | ||||||||||||||||||
Digital Services |
944 | 443 | 1,734 | 1,291 | 858 | 454 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
5,245 | 2,462 | 9,631 | 7,174 | 4,769 | 2,520 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Opening balance |
11,060 | 10,923 | 22,007 | 11,358 | 12,033 | 16,008 | ||||||||||||||||||
Additions¹) |
2,116 | 793 | 2,438 | 12,774 | 1,423 | 1,401 | ||||||||||||||||||
Utilization/Cash out¹) |
-2,066 | -673 | -12,529 | -2,151 | -2,084 | -1,676 | ||||||||||||||||||
Of which restructuring |
-137 | -186 | -143 | -711 | -378 | -557 | ||||||||||||||||||
Reversal of excess amounts |
-192 | -124 | -842 | -128 | -88 | -125 | ||||||||||||||||||
Reclassification, translation difference and other |
-315 | 141 | -151 | 154 | 74 | -3,575 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Closing balance |
10,603 | 11,060 | 10,923 | 22,007 | 11,358 | 12,033 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Of which restructuring |
1,594 | 1,202 | 1,095 | 1,099 | 1,743 | 2,059 | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Opening balance |
10,923 | 10,923 | 16,008 | 16,008 | 16,008 | 16,008 | ||||||||||||||||||
Additions |
2,909 | 793 | 7,172 | 15,598 | 2,824 | 1,401 | ||||||||||||||||||
Utilization/Cash out |
-2,739 | -673 | -7,576 | -5,911 | -3,760 | -1,676 | ||||||||||||||||||
Of which restructuring |
-323 | -186 | -1,789 | -1,646 | -935 | -557 | ||||||||||||||||||
Reversal of excess amounts |
-316 | -124 | -1,183 | -341 | -213 | -125 | ||||||||||||||||||
Reclassification, translation difference and other |
-174 | 141 | -3,498 | -3,347 | -3,501 | -3,575 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Closing balance |
10,603 | 11,060 | 10,923 | 22,007 | 11,358 | 12,033 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Of which restructuring |
1,594 | 1,202 | 1,095 | 1,099 | 1,743 | 2,059 |
1) | Includes additions of cost provisions related to the resolution of the SEC and DOJ investigations of SEK -11.5 b. in Q3 2019. Includes payment of SEK 10.1 b. to SEC and DOJ in Q4 2019. |
31 Ericsson | Second quarter report 2020 | Additional information |
Investments in assets subject to depreciation, amortization, impairment and write-downs
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Additions |
||||||||||||||||||||||||
Property, plant and equipment |
1,327 | 1,113 | 1,475 | 1,231 | 1,098 | 1,314 | ||||||||||||||||||
Capitalized development expenses |
211 | 262 | 329 | 313 | 446 | 457 | ||||||||||||||||||
IPR, brands and other intangible assets |
97 | 1 | 1 | 2 | | 1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
1,635 | 1,376 | 1,805 | 1,546 | 1,544 | 1,772 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Depreciation, amortization and impairment losses |
||||||||||||||||||||||||
Property, plant and equipment |
1,003 | 1,009 | 1,100 | 1,048 | 919 | 880 | ||||||||||||||||||
Capitalized development expenses |
272 | 174 | 256 | 330 | 449 | 520 | ||||||||||||||||||
Goodwill, IPR, brands and other intangible assets |
258 | 321 | 269 | 229 | 226 | 314 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
1,533 | 1,504 | 1,625 | 1,607 | 1,594 | 1,714 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Additions |
||||||||||||||||||||||||
Property, plant and equipment |
2,440 | 1,113 | 5,118 | 3,643 | 2,412 | 1,314 | ||||||||||||||||||
Capitalized development expenses |
473 | 262 | 1,545 | 1,216 | 903 | 457 | ||||||||||||||||||
IPR, brands and other intangible assets |
98 | 1 | 4 | 3 | 1 | 1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
3,011 | 1,376 | 6,667 | 4,862 | 3,316 | 1,772 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Depreciation, amortization and impairment losses |
||||||||||||||||||||||||
Property, plant and equipment |
2,012 | 1,009 | 3,947 | 2,847 | 1,799 | 880 | ||||||||||||||||||
Capitalized development expenses |
446 | 174 | 1,555 | 1,299 | 969 | 520 | ||||||||||||||||||
Goodwill, IPR, brands and other intangible assets |
579 | 321 | 1,038 | 769 | 540 | 314 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
3,037 | 1,504 | 6,540 | 4,915 | 3,308 | 1,714 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
32 Ericsson | Second quarter report 2020 | Additional information |
Q2 | Jan-Jun | Jan-Dec | ||||||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | 2019 | |||||||||||||||
Number of shares and earnings per share |
||||||||||||||||||||
Number of shares, end of period (million) |
3,334 | 3,334 | 3,334 | 3,334 | 3,334 | |||||||||||||||
Of which class A-shares (million) |
262 | 262 | 262 | 262 | 262 | |||||||||||||||
Of which class B-shares (million) |
3,072 | 3,072 | 3,072 | 3,072 | 3,072 | |||||||||||||||
Number of treasury shares, end of period (million) |
11 | 29 | 11 | 29 | 20 | |||||||||||||||
Number of shares outstanding, basic, end of period (million) |
3,324 | 3,305 | 3,324 | 3,305 | 3,314 | |||||||||||||||
Numbers of shares outstanding, diluted, end of period (million) |
3,330 | 3,327 | 3,330 | 3,327 | 3,328 | |||||||||||||||
Average number of treasury shares (million) |
12 | 30 | 15 | 32 | 28 | |||||||||||||||
Average number of shares outstanding, basic (million) |
3,322 | 3,304 | 3,320 | 3,302 | 3,306 | |||||||||||||||
Average number of shares outstanding, diluted (million) ¹) |
3,329 | 3,325 | 3,326 | 3,324 | 3,320 | |||||||||||||||
Earnings (loss) per share, basic (SEK) ²) |
0.74 | 0.52 | 1.39 | 1.22 | 0.67 | |||||||||||||||
Earnings (loss) per share, diluted (SEK) ¹) |
0.74 | 0.51 | 1.39 | 1.21 | 0.67 | |||||||||||||||
Earnings (loss) per share (non-IFRS), diluted (SEK) ³) |
0.94 | 0.59 | 1.74 | 1.39 | 1.07 | |||||||||||||||
Ratios |
||||||||||||||||||||
Days sales outstanding |
| | 80 | 95 | 75 | |||||||||||||||
Inventory turnover days |
85 | 91 | 89 | 92 | 77 | |||||||||||||||
Payable days |
82 | 82 | 88 | 86 | 77 | |||||||||||||||
Alternative Performance Measures (APMs) |
||||||||||||||||||||
Equity ratio (%) |
| | 28.4 | % | 30.1 | % | 29.6 | % | ||||||||||||
Return on equity (%) |
12.3 | % | 8.1 | % | 11.4 | % | 9.4 | % | 2.6 | % | ||||||||||
Return on capital employed (%) |
9.1 | % | 9.2 | % | 9.9 | % | 11.0 | % | 6.7 | % | ||||||||||
Capital turnover (times) |
1.3 | 1.4 | 1.3 | 1.3 | 1.4 | |||||||||||||||
Free cash flow |
3,191 | 1,607 | 5,298 | 5,363 | 6,128 | |||||||||||||||
Free cash flow before M&A |
3,236 | 1,604 | 5,551 | 5,061 | 7,633 | |||||||||||||||
Exchange rates used in the consolidation |
||||||||||||||||||||
SEK/EUR - closing rate |
| | 10.50 | 10.55 | 10.43 | |||||||||||||||
SEK/USD - closing rate |
| | 9.37 | 9.27 | 9.32 | |||||||||||||||
Other |
||||||||||||||||||||
Market area inventory, end of period |
18,183 | 21,205 | 18,183 | 21,205 | 17,530 | |||||||||||||||
Export sales from Sweden |
30,178 | 28,356 | 57,580 | 50,842 | 120,822 |
1) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
2) | Based on net income (loss) attributable to owners of the Parent Company. |
3) | Excluding amortizations and write-downs of acquired intangibles and restructuring charges. |
2020 | 2019 | |||||||||||||||||||||||
End of period |
Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||||
South East Asia, Oceania and India |
25,265 | 24,942 | 24,559 | 24,322 | 23,942 | 24,051 | ||||||||||||||||||
North East Asia |
13,965 | 13,786 | 13,783 | 13,608 | 13,334 | 13,169 | ||||||||||||||||||
North America |
9,785 | 9,718 | 9,643 | 9,487 | 9,342 | 9,246 | ||||||||||||||||||
Europe and Latin America ¹) |
46,521 | 46,402 | 47,135 | 44,150 | 43,846 | 43,833 | ||||||||||||||||||
Middle East and Africa |
4,264 | 4,247 | 4,297 | 4,320 | 4,292 | 4,281 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
99,800 | 99,095 | 99,417 | 95,887 | 94,756 | 94,580 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
¹) Of which Sweden |
12,884 | 12,746 | 12,730 | 12,679 | 12,549 | 12,455 |
33 Ericsson | Second quarter report 2020 | Additional information |
Items excluding restructuring charges
Restructuring charges by function
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Cost of sales |
-312 | -335 | -218 | -28 | -26 | -65 | ||||||||||||||||||
Research and development expenses |
-227 | 39 | -79 | -98 | -49 | -118 | ||||||||||||||||||
Selling and administrative expenses |
-144 | -5 | -30 | -21 | -43 | -23 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
-683 | -301 | -327 | -147 | -118 | -206 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Cost of sales |
-647 | -335 | -337 | -119 | -91 | -65 | ||||||||||||||||||
Research and development expenses |
-188 | 39 | -344 | -265 | -167 | -118 | ||||||||||||||||||
Selling and administrative expenses |
-149 | -5 | -117 | -87 | -66 | -23 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
-984 | -301 | -798 | -471 | -324 | -206 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges by segment
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
-380 | -75 | -48 | -5 | -5 | -10 | ||||||||||||||||||
of which cost of sales |
-110 | -72 | -24 | 12 | 9 | -3 | ||||||||||||||||||
of which operating expenses |
-270 | -3 | -24 | -17 | -14 | -7 | ||||||||||||||||||
Digital Services |
34 | 20 | -206 | -128 | -93 | -187 | ||||||||||||||||||
of which cost of sales |
3 | -16 | -125 | -32 | -27 | -60 | ||||||||||||||||||
of which operating expenses |
31 | 36 | -81 | -96 | -66 | -127 | ||||||||||||||||||
Managed Services |
-2 | -245 | -42 | -2 | 1 | -2 | ||||||||||||||||||
of which cost of sales |
-2 | -245 | -40 | -2 | 3 | -1 | ||||||||||||||||||
of which operating expenses |
0 | 0 | -2 | 0 | -2 | -1 | ||||||||||||||||||
Emerging Business and Other |
-335 | -1 | -31 | -12 | -21 | -7 | ||||||||||||||||||
of which cost of sales |
-203 | -2 | -29 | -6 | -11 | -1 | ||||||||||||||||||
of which operating expenses |
-132 | 1 | -2 | -6 | -10 | -6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
-683 | -301 | -327 | -147 | -118 | -206 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
-455 | -75 | -68 | -20 | -15 | -10 | ||||||||||||||||||
of which cost of sales |
-182 | -72 | -6 | 18 | 6 | -3 | ||||||||||||||||||
of which operating expenses |
-273 | -3 | -62 | -38 | -21 | -7 | ||||||||||||||||||
Digital Services |
54 | 20 | -614 | -408 | -280 | -187 | ||||||||||||||||||
of which cost of sales |
-13 | -16 | -244 | -119 | -87 | -60 | ||||||||||||||||||
of which operating expenses |
67 | 36 | -370 | -289 | -193 | -127 | ||||||||||||||||||
Managed Services |
-247 | -245 | -45 | -3 | -1 | -2 | ||||||||||||||||||
of which cost of sales |
-247 | -245 | -40 | 0 | 2 | -1 | ||||||||||||||||||
of which operating expenses |
0 | 0 | -5 | -3 | -3 | -1 | ||||||||||||||||||
Emerging Business and Other |
-336 | -1 | -71 | -40 | -28 | -7 | ||||||||||||||||||
of which cost of sales |
-205 | -2 | -47 | -18 | -12 | -1 | ||||||||||||||||||
of which operating expenses |
-131 | 1 | -24 | -22 | -16 | -6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
-984 | -301 | -798 | -471 | -324 | -206 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
34 Ericsson | Second quarter report 2020 | Items excluding restructuring charges |
Gross income and gross margin excluding restructuring charges by segment
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
16,132 | 15,658 | 18,289 | 16,315 | 15,661 | 14,458 | ||||||||||||||||||
Digital Services |
3,735 | 2,945 | 5,023 | 3,781 | 3,338 | 2,938 | ||||||||||||||||||
Managed Services |
957 | 1,178 | 1,079 | 1,138 | 776 | 1,037 | ||||||||||||||||||
Emerging Business and Other |
405 | 342 | 261 | 334 | 322 | 411 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
21,229 | 20,123 | 24,652 | 21,568 | 20,097 | 18,844 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
40.5 | % | 44.6 | % | 41.1 | % | 41.6 | % | 41.4 | % | 43.2 | % | ||||||||||||
Digital Services |
43.6 | % | 40.1 | % | 38.1 | % | 38.3 | % | 37.1 | % | 37.6 | % | ||||||||||||
Managed Services |
17.2 | % | 20.6 | % | 15.4 | % | 17.9 | % | 12.3 | % | 17.7 | % | ||||||||||||
Emerging Business and Other |
25.3 | % | 21.9 | % | 15.1 | % | 20.5 | % | 19.2 | % | 23.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
38.2 | % | 40.4 | % | 37.1 | % | 37.8 | % | 36.7 | % | 38.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
31,790 | 15,658 | 64,723 | 46,434 | 30,119 | 14,458 | ||||||||||||||||||
Digital Services |
6,680 | 2,945 | 15,080 | 10,057 | 6,276 | 2,938 | ||||||||||||||||||
Managed Services |
2,135 | 1,178 | 4,030 | 2,951 | 1,813 | 1,037 | ||||||||||||||||||
Emerging Business and Other |
747 | 342 | 1,328 | 1,067 | 733 | 411 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
41,352 | 20,123 | 85,161 | 60,509 | 38,941 | 18,844 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
42.4 | % | 44.6 | % | 41.8 | % | 42.0 | % | 42.2 | % | 43.2 | % | ||||||||||||
Digital Services |
42.0 | % | 40.1 | % | 37.8 | % | 37.7 | % | 37.3 | % | 37.6 | % | ||||||||||||
Managed Services |
18.9 | % | 20.6 | % | 15.8 | % | 15.9 | % | 14.9 | % | 17.7 | % | ||||||||||||
Emerging Business and Other |
23.6 | % | 21.9 | % | 19.6 | % | 21.1 | % | 21.4 | % | 23.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
39.3 | % | 40.4 | % | 37.5 | % | 37.6 | % | 37.5 | % | 38.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
35 Ericsson | Second quarter report 2020 | Items excluding restructuring charges |
Operating income (loss) and operating margin excluding restructuring charges by segment
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
5,635 | 5,902 | 6,447 | 7,221 | 5,685 | 5,482 | ||||||||||||||||||
Digital Services |
-731 | -1,437 | 42 | -532 | -1,312 | -1,611 | ||||||||||||||||||
Managed Services |
265 | 653 | 334 | 564 | 202 | 1,254 | ||||||||||||||||||
Emerging Business and Other |
-635 | -511 | -371 | -11,302 | -718 | -23 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
4,534 | 4,607 | 6,452 | -4,049 | 3,857 | 5,102 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Networks |
14.1 | % | 16.8 | % | 14.5 | % | 18.4 | % | 15.0 | % | 16.4 | % | ||||||||||||
Digital Services |
-8.5 | % | -19.6 | % | 0.3 | % | -5.4 | % | -14.6 | % | -20.6 | % | ||||||||||||
Managed Services |
4.8 | % | 11.4 | % | 4.8 | % | 8.9 | % | 3.2 | % | 21.4 | % | ||||||||||||
Emerging Business and Other |
-39.6 | % | -32.7 | % | -21.4 | % | -695.1 | % | -42.8 | % | -1.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
8.2 | % | 9.3 | % | 9.7 | % | -7.1 | % | 7.0 | % | 10.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
11,537 | 5,902 | 24,835 | 18,388 | 11,167 | 5,482 | ||||||||||||||||||
Digital Services |
-2,168 | -1,437 | -3,413 | -3,455 | -2,923 | -1,611 | ||||||||||||||||||
Managed Services |
918 | 653 | 2,354 | 2,020 | 1,456 | 1,254 | ||||||||||||||||||
Emerging Business and Other |
-1,146 | -511 | -12,414 | -12,043 | -741 | -23 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
9,141 | 4,607 | 11,362 | 4,910 | 8,959 | 5,102 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Networks |
15.4 | % | 16.8 | % | 16.0 | % | 16.6 | % | 15.7 | % | 16.4 | % | ||||||||||||
Digital Services |
-13.6 | % | -19.6 | % | -8.6 | % | -12.9 | % | -17.4 | % | -20.6 | % | ||||||||||||
Managed Services |
8.1 | % | 11.4 | % | 9.2 | % | 10.9 | % | 12.0 | % | 21.4 | % | ||||||||||||
Emerging Business and Other |
-36.2 | % | -32.7 | % | -183.0 | % | -238.2 | % | -21.6 | % | -1.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
8.7 | % | 9.3 | % | 5.0 | % | 3.1 | % | 8.6 | % | 10.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
36 Ericsson | Second quarter report 2020 | Items excluding restructuring charges |
Alternative performance measures
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.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, year over year change |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Reported net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Acquired business |
-422 | -319 | -96 | | | | ||||||||||||||||||
Net FX impact |
-326 | -1,654 | -2,748 | -2,457 | -2,538 | -2,932 | ||||||||||||||||||
Comparable net sales, excluding FX impact |
54,830 | 47,777 | 63,529 | 54,670 | 52,272 | 45,974 | ||||||||||||||||||
Comparable quarter net sales adj. for acq/div business 1) |
54,810 | 48,798 | 63,037 | 53,077 | 49,055 | 42,961 | ||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
0 | % | -2 | % | 1 | % | 3 | % | 7 | % | 7 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, year over year change |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Reported net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
Acquired business |
-741 | -319 | -96 | | | | ||||||||||||||||||
Net FX impact |
-1,980 | -1,654 | -10,675 | -7,927 | -5,470 | -2,932 | ||||||||||||||||||
Comparable net sales, excluding FX impact |
102,607 | 47,777 | 216,445 | 152,916 | 98,246 | 45,974 | ||||||||||||||||||
Comparable quarter net sales adj. for acq/div business 1) |
103,608 | 48,798 | 208,130 | 145,093 | 92,016 | 42,961 | ||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
-1 | % | -2 | % | 4 | % | 5 | % | 7 | % | 7 | % |
1) | Adjusted for divestment of MediaKind in February 2019 and acquisition of Kathrein in October 2019. |
37 Ericsson | Second quarter report 2020 | Alternative performance measures |
Items excluding restructuring charges
Gross income, operating expenses, and operating income (loss) are presented excluding restructuring charges and, for certain measures, as a percentage of net sales.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Gross income |
20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Gross margin (%) |
37.6 | % | 39.8 | % | 36.8 | % | 37.7 | % | 36.6 | % | 38.4 | % | ||||||||||||
Gross income |
20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||
Restructuring charges included in cost of sales |
312 | 335 | 218 | 28 | 26 | 65 | ||||||||||||||||||
Gross income excluding restructuring charges |
21,229 | 20,123 | 24,652 | 21,568 | 20,097 | 18,844 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Gross margin excluding restructuring charges (%) |
38.2 | % | 40.4 | % | 37.1 | % | 37.8 | % | 36.7 | % | 38.5 | % | ||||||||||||
Operating expenses |
-17,045 | -15,543 | -19,028 | -14,217 | -16,331 | -14,639 | ||||||||||||||||||
Restructuring charges included in R&D expenses |
227 | -39 | 79 | 98 | 49 | 118 | ||||||||||||||||||
Restructuring charges included in selling and administrative expenses |
144 | 5 | 30 | 21 | 43 | 23 | ||||||||||||||||||
Operating expenses excluding restructuring charges |
-16,674 | -15,577 | -18,919 | -14,098 | -16,239 | -14,498 | ||||||||||||||||||
Operating income (loss) |
3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Operating margin (%) |
6.9 | % | 8.7 | % | 9.2 | % | -7.3 | % | 6.8 | % | 10.0 | % | ||||||||||||
Operating income (loss) |
3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||
Total restructuring charges |
683 | 301 | 327 | 147 | 118 | 206 | ||||||||||||||||||
Operating income (loss) excluding restructuring charges |
4,534 | 4,607 | 6,452 | -4,049 | 3,857 | 5,102 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Operating margin excluding restructuring charges (%) |
8.2 | % | 9.3 | % | 9.7 | % | -7.1 | % | 7.0 | % | 10.4 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Gross income |
40,705 | 19,788 | 84,824 | 60,390 | 38,850 | 18,779 | ||||||||||||||||||
Net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
Gross margin (%) |
38.6 | % | 39.8 | % | 37.3 | % | 37.5 | % | 37.5 | % | 38.4 | % | ||||||||||||
Gross income |
40,705 | 19,788 | 84,824 | 60,390 | 38,850 | 18,779 | ||||||||||||||||||
Restructuring charges included in cost of sales |
647 | 335 | 337 | 119 | 91 | 65 | ||||||||||||||||||
Gross income excluding restructuring charges |
41,352 | 20,123 | 85,161 | 60,509 | 38,941 | 18,844 | ||||||||||||||||||
Net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
Gross margin excluding restructuring charges (%) |
39.3 | % | 40.4 | % | 37.5 | % | 37.6 | % | 37.5 | % | 38.5 | % | ||||||||||||
Operating expenses |
-32,588 | -15,543 | -64,215 | -45,187 | -30,970 | -14,639 | ||||||||||||||||||
Restructuring charges included in R&D expenses |
188 | -39 | 344 | 265 | 167 | 118 | ||||||||||||||||||
Restructuring charges included in selling and administrative expenses |
149 | 5 | 117 | 87 | 66 | 23 | ||||||||||||||||||
Operating expenses excluding restructuring charges |
-32,251 | -15,577 | -63,754 | -44,835 | -30,737 | -14,498 | ||||||||||||||||||
Operating income (loss) |
8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||
Net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
Operating margin (%) |
7.7 | % | 8.7 | % | 4.6 | % | 2.8 | % | 8.3 | % | 10.0 | % | ||||||||||||
Operating income (loss) |
8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||
Total restructuring charges |
984 | 301 | 798 | 471 | 324 | 206 | ||||||||||||||||||
Operating income (loss) excluding restructuring charges |
9,141 | 4,607 | 11,362 | 4,910 | 8,959 | 5,102 | ||||||||||||||||||
Net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
Operating margin excluding restructuring charges (%) |
8.7 | % | 9.3 | % | 5.0 | % | 3.1 | % | 8.6 | % | 10.4 | % |
38 Ericsson | Second quarter report 2020 | Alternative performance measures |
Earnings (loss) before interest, taxes, amortization and write-downs of acquired intangibles, also expressed as a percentage of net sales.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Net income (loss) |
2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||
Taxes |
1,558 | 1,124 | 1,570 | 2,013 | 1,451 | 1,888 | ||||||||||||||||||
Financial income and expenses, net |
-292 | 902 | 71 | 685 | 441 | 605 | ||||||||||||||||||
Amortization and write-downs of acquired intangibles |
258 | 321 | 269 | 229 | 226 | 314 | ||||||||||||||||||
EBITA |
4,109 | 4,627 | 6,394 | -3,967 | 3,965 | 5,210 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
EBITA margin (%) |
7.4 | % | 9.3 | % | 9.6 | % | -6.9 | % | 7.2 | % | 10.7 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Net income (loss) |
4,865 | 2,280 | 1,840 | -2,644 | 4,250 | 2,403 | ||||||||||||||||||
Taxes |
2,682 | 1,124 | 6,922 | 5,352 | 3,339 | 1,888 | ||||||||||||||||||
Financial income and expenses, net |
610 | 902 | 1,802 | 1,731 | 1,046 | 605 | ||||||||||||||||||
Amortization and write-downs of acquired intangibles |
579 | 321 | 1,038 | 769 | 540 | 314 | ||||||||||||||||||
EBITA |
8,736 | 4,627 | 11,602 | 5,208 | 9,175 | 5,210 | ||||||||||||||||||
Net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
EBITA margin (%) |
8.3 | % | 9.3 | % | 5.1 | % | 3.2 | % | 8.8 | % | 10.7 | % |
Cash flow from operating activities divided by the sum of net income (loss) and adjustments to reconcile net income to cash, expressed as a percentage.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Net income (loss) |
2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||
Net income reconciled to cash |
5,588 | 4,744 | 7,953 | -4,320 | 4,952 | 5,481 | ||||||||||||||||||
Cash flow from operating activities |
5,449 | 4,302 | 496 | 6,989 | 3,623 | 5,765 | ||||||||||||||||||
Cash conversion (%) |
97.5 | % | 90.7 | % | 6.2 | % | -161.8 | % | 73.2 | % | 105.2 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Net income (loss) |
4,865 | 2,280 | 1,840 | -2,644 | 4,250 | 2,403 | ||||||||||||||||||
Net income reconciled to cash |
10,332 | 4,744 | 14,066 | 6,113 | 10,433 | 5,481 | ||||||||||||||||||
Cash flow from operating activities |
9,751 | 4,302 | 16,873 | 16,377 | 9,388 | 5,765 | ||||||||||||||||||
Cash conversion (%) |
94.4 | % | 90.7 | % | 120.0 | % | 267.9 | % | 90.0 | % | 105.2 | % |
39 Ericsson | Second quarter report 2020 | Alternative performance measures |
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).
2020 | 2019 | |||||||||||||||||||||||
SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Cash and cash equivalents |
45,655 | 48,347 | 45,079 | 51,183 | 45,498 | 45,453 | ||||||||||||||||||
+ Interest-bearing securities, current |
5,739 | 7,834 | 6,759 | 5,866 | 6,367 | 3,183 | ||||||||||||||||||
+ Interest-bearing securities, non-current |
24,025 | 23,335 | 20,354 | 19,157 | 17,091 | 23,022 | ||||||||||||||||||
Gross cash, end of period |
75,419 | 79,516 | 72,192 | 76,206 | 68,956 | 71,658 | ||||||||||||||||||
- Borrowings, current |
15,290 | 17,759 | 9,439 | 1,622 | 2,160 | 3,015 | ||||||||||||||||||
- Borrowings, non-current |
22,581 | 23,381 | 28,257 | 37,153 | 33,040 | 32,533 | ||||||||||||||||||
Net cash, end of period |
37,548 | 38,376 | 34,496 | 37,431 | 33,756 | 36,110 |
Total assets less non-interest-bearing provisions and liabilities.
2020 | 2019 | |||||||||||||||||||||||
SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Total assets |
276,778 | 292,307 | 276,383 | 288,531 | 280,447 | 283,958 | ||||||||||||||||||
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Non-interest-bearing provisions and liabilities |
||||||||||||||||||||||||
Provisions, non-current |
2,240 | 2,703 | 2,679 | 2,308 | 2,646 | 2,670 | ||||||||||||||||||
Deferred tax liabilities |
1,164 | 1,060 | 1,224 | 857 | 1,178 | 792 | ||||||||||||||||||
Other non-current liabilities |
1,813 | 2,178 | 2,114 | 2,163 | 2,160 | 2,118 | ||||||||||||||||||
Provisions, current |
8,363 | 8,357 | 8,244 | 19,699 | 8,712 | 9,363 | ||||||||||||||||||
Contract liabilities |
31,532 | 34,265 | 29,041 | 34,499 | 37,264 | 38,605 | ||||||||||||||||||
Trade payables |
32,182 | 29,840 | 30,403 | 30,672 | 31,388 | 30,842 | ||||||||||||||||||
Other current liabilities |
34,834 | 40,521 | 37,405 | 34,624 | 33,351 | 38,528 | ||||||||||||||||||
Capital employed |
164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 |
Annualized net sales divided by average capital employed.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Net sales |
55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||
Annualized net sales |
222,312 | 199,000 | 265,492 | 228,508 | 219,240 | 195,624 | ||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||
Capital employed at beginning of period |
173,383 | 165,273 | 163,709 | 163,748 | 161,040 | 149,615 | ||||||||||||||||||
Capital employed at end of period |
164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||
Average capital employed |
169,017 | 169,328 | 164,491 | 163,729 | 162,394 | 155,328 | ||||||||||||||||||
Capital turnover (times) |
1.3 | 1.2 | 1.6 | 1.4 | 1.4 | 1.3 | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Net sales |
105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||
Annualized net sales |
210,656 | 199,000 | 227,216 | 214,457 | 207,432 | 195,624 | ||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||
Capital employed at beginning of period |
165,273 | 165,273 | 149,615 | 149,615 | 149,615 | 149,615 | ||||||||||||||||||
Capital employed at end of period |
164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||
Average capital employed |
164,962 | 169,328 | 157,444 | 156,662 | 156,682 | 155,328 | ||||||||||||||||||
Capital turnover (times) |
1.3 | 1.2 | 1.4 | 1.4 | 1.3 | 1.3 |
40 Ericsson | Second quarter report 2020 | Alternative performance measures |
The annualized total of operating income (loss) as a percentage of average capital employed.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Operating income (loss) |
3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||
Annualized operating income (loss) |
15,404 | 17,224 | 24,500 | -16,784 | 14,956 | 19,584 | ||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||
Capital employed at beginning of period |
173,383 | 165,273 | 163,709 | 163,748 | 161,040 | 149,615 | ||||||||||||||||||
Capital employed at end of period |
164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||
Average capital employed |
169,017 | 169,328 | 164,491 | 163,729 | 162,394 | 155,328 | ||||||||||||||||||
Return on capital employed (%) |
9.1 | % | 10.2 | % | 14.9 | % | -10.3 | % | 9.2 | % | 12.6 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Operating income (loss) |
8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||
Annualized operating income (loss) |
16,314 | 17,224 | 10,564 | 5,919 | 17,270 | 19,584 | ||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||
Capital employed at beginning of period |
165,273 | 165,273 | 149,615 | 149,615 | 149,615 | 149,615 | ||||||||||||||||||
Capital employed at end of period |
164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||
Average capital employed |
164,962 | 169,328 | 157,444 | 156,662 | 156,682 | 155,328 | ||||||||||||||||||
Return on capital employed (%) |
9.9 | % | 10.2 | % | 6.7 | % | 3.8 | % | 11.0 | % | 12.6 | % |
Equity expressed as a percentage of total assets.
2020 | 2019 | |||||||||||||||||||||||
SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Total equity |
78,472 | 79,113 | 81,878 | 77,475 | 84,533 | 84,532 | ||||||||||||||||||
Total assets |
276,778 | 292,307 | 276,383 | 288,531 | 280,447 | 283,958 | ||||||||||||||||||
Equity ratio (%) |
28.4 | % | 27.1 | % | 29.6 | % | 26.9 | % | 30.1 | % | 29.8 | % |
Annualized net income (loss) attributable to owners of the Parent Company as a percentage of average stockholders equity.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Net income (loss) attributable to owners of the Parent Company |
2,452 | 2,156 | 4,430 | -6,229 | 1,705 | 2,317 | ||||||||||||||||||
Annualized |
9,808 | 8,624 | 17,720 | -24,916 | 6,820 | 9,268 | ||||||||||||||||||
Average stockholders equity |
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Stockholders equity, beginning of period |
79,841 | 82,559 | 78,200 | 84,488 | 84,619 | 86,978 | ||||||||||||||||||
Stockholders equity, end of period |
79,005 | 79,841 | 82,559 | 78,200 | 84,488 | 84,619 | ||||||||||||||||||
Average stockholders equity |
79,423 | 81,200 | 80,380 | 81,344 | 84,554 | 85,799 | ||||||||||||||||||
Return on equity (%) |
12.3 | % | 10.6 | % | 22.0 | % | -30.6 | % | 8.1 | % | 10.8 | % | ||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Net income (loss) attributable to owners of the Parent Company |
4,608 | 2,156 | 2,223 | -2,207 | 4,022 | 2,317 | ||||||||||||||||||
Annualized |
9,216 | 8,624 | 2,223 | -2,943 | 8,044 | 9,268 | ||||||||||||||||||
Average stockholders equity |
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Stockholders equity, beginning of period |
82,559 | 82,559 | 86,978 | 86,978 | 86,978 | 86,978 | ||||||||||||||||||
Stockholders equity, end of period |
79,005 | 79,841 | 82,559 | 78,200 | 84,488 | 84,619 | ||||||||||||||||||
Average stockholders equity |
80,782 | 81,200 | 84,769 | 82,589 | 85,733 | 85,799 | ||||||||||||||||||
Return on equity (%) |
11.4 | % | 10.6 | % | 2.6 | % | -3.6 | % | 9.4 | % | 10.8 | % |
41 Ericsson | Second quarter report 2020 | Alternative performance measures |
Earnings (loss) per share (non-IFRS)
Earnings (loss) per share, diluted, excluding amortizations and write-down of acquired intangible assets and excluding restructuring charges.
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Earnings (loss) per share, diluted |
0.74 | 0.65 | 1.33 | -1.89 | 0.51 | 0.70 | ||||||||||||||||||
Restructuring charges |
0.14 | 0.07 | 0.07 | 0.04 | 0.02 | 0.05 | ||||||||||||||||||
Amortization and write-downs of acquired intangibles |
0.06 | 0.07 | 0.06 | 0.05 | 0.06 | 0.05 | ||||||||||||||||||
Earnings (loss) per share (non-IRFS) |
0.94 | 0.79 | 1.46 | -1.80 | 0.59 | 0.80 | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Earnings (loss) per share, diluted |
1.39 | 0.65 | 0.67 | -0.67 | 1.21 | 0.70 | ||||||||||||||||||
Restructuring charges |
0.21 | 0.07 | 0.18 | 0.11 | 0.07 | 0.05 | ||||||||||||||||||
Amortization and write-downs of acquired intangibles |
0.13 | 0.07 | 0.22 | 0.16 | 0.11 | 0.05 | ||||||||||||||||||
Earnings (loss) per share (non-IRFS) |
1.73 | 0.79 | 1.07 | -0.40 | 1.39 | 0.80 |
Free cash flow and free cash flow before M&A
Free cash flow: Cash flow from operating activities less net capital expenditures and other investments.
Free cash flow before M&A: Cash flow from operating activities less net capital expenditures and other investments (excluding M&A).
2020 | 2019 | |||||||||||||||||||||||
Isolated quarters, SEK million |
Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||
Cash flow from operating activities |
5,449 | 4,302 | 496 | 6,989 | 3,623 | 5,765 | ||||||||||||||||||
Net capital expenditures and other investments (excluding M&A) |
||||||||||||||||||||||||
Investments in property, plant and equipment |
-1,327 | -1,113 | -1,475 | -1,231 | -1,098 | -1,314 | ||||||||||||||||||
Sales of property, plant and equipment |
69 | 26 | 206 | 122 | 184 | 232 | ||||||||||||||||||
Product development |
-211 | -262 | -329 | -313 | -446 | -457 | ||||||||||||||||||
Other investing activities |
-126 | -42 | -74 | -56 | -36 | -165 | ||||||||||||||||||
Repayment of lease liabilities |
-618 | -596 | -711 | -1,052 | -623 | -604 | ||||||||||||||||||
Free cash flow before M&A |
3,236 | 2,315 | -1,887 | 4,459 | 1,604 | 3,457 | ||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-45 | -208 | -1,341 | -466 | 3 | 299 | ||||||||||||||||||
Free cash flow |
3,191 | 2,107 | -3,228 | 3,993 | 1,607 | 3,756 | ||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
Year to date, SEK million |
Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||
Cash flow from operating activities |
9,751 | 4,302 | 16,873 | 16,377 | 9,388 | 5,765 | ||||||||||||||||||
Net capital expenditures and other investments (excluding M&A) |
||||||||||||||||||||||||
Investments in property, plant and equipment |
-2,440 | -1,113 | -5,118 | -3,643 | -2,412 | -1,314 | ||||||||||||||||||
Sales of property, plant and equipment |
95 | 26 | 744 | 538 | 416 | 232 | ||||||||||||||||||
Product development |
-473 | -262 | -1,545 | -1,216 | -903 | -457 | ||||||||||||||||||
Other investing activities |
-168 | -42 | -331 | -257 | -201 | -165 | ||||||||||||||||||
Repayment of lease liabilities |
-1,214 | -596 | -2,990 | -2,279 | -1,227 | -604 | ||||||||||||||||||
Free cash flow before M&A |
5,551 | 2,315 | 7,633 | 9,520 | 5,061 | 3,457 | ||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-253 | -208 | -1,505 | -164 | 302 | 299 | ||||||||||||||||||
Free cash flow |
5,298 | 2,107 | 6,128 | 9,356 | 5,363 | 3,756 |
42 Ericsson | Second quarter report 2020 | Alternative performance measures |