Ericsson

Strategic highlights – taking proactive action in a challenging market environment 

• Delivering on network technology leadership strategy; externally recognized as 5G leader for 4th consecutive year.  

• Further progress to build out Global Network Platform for network APIs; two additional partnerships in Q2.  

• New 5G patent licensing agreement signed; on track to deliver the SEK 12-13 b. IPR revenue target for 2024. 

Financial highlights – strong gross margin expansion, partly offset by targeted R&D investments   

• Sales declined -7%* YoY, but market area North America grew by 14%*. Reported sales were SEK 59.8 (64.4) b.  

• Adjusted[1] gross income increased to SEK 26.3 (24.7) b. driven by strong gross margin expansion. Reported gross income was SEK 25.8 (24.1) b.  

• Adjusted[1] gross margin was 43.9% (38.3%) supported by higher IPR licensing revenue and cost actions. Networks adjusted gross margin was 46.1% (39.3%). Reported gross margin was 43.1% (37.4%).  

• Adjusted[1] EBITA was SEK 4.1 (3.7) b. with a 6.8% (5.7%) margin, with higher gross income partly offset by increased R&D investments in Networks for technology leadership. EBITA was SEK 2.4 (0.5) b.   

• Net income (loss) was SEK -11.0 (-0.6) b., including a SEK -11.4 b. impairment impact. EPS diluted was SEK -3.34 (-0.21).  

• Free cash flow before M&A was SEK 7.6 (-5.0) b. benefiting from a strong improvement in working capital. 

Börje Ekholm, President and CEO, said: “In Q2, we maintained our leading market position, returned to growth in North America, and delivered strong gross margin expansion and free cash flow. We remained focused on matters in our control, to optimize our business amid a challenging market environment, with industry investment levels unsustainably low.  

Vonage remains foundational to build out a global platform for network APIs. This is critical for the digitalization of enterprises and society, and will drive future growth in the telecoms industry. We recorded an impairment charge in Q2, as market growth in the current business has slowed, and we must now refocus on improving performance.  

Our results highlight our competitiveness, and we will continue to take proactive steps to position the business for longer-term success. We expect market conditions to remain challenging this year, as the pace of India investments slow, however our sales will benefit during the second half from contract deliveries in North America.” 

*Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations. 
[1] Adjusted metrics are adjusted to exclude restructuring charges. This is a change in nomenclature only, compared with previous reports.
[2] Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statement.
[3] Excluding the non-cash impairment recorded in the second quarter 2024, relating to the impairment of intangible assets mainly attributed to the Vonage acquisition. 

NOTES TO EDITORS 

You find the complete report with tables in the attached PDF or on https://www.ericsson.com/en/investors/financial-reports/interim-reports

Video webcast for analysts, investors and journalists 
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FOR FURTHER INFORMATION, PLEASE CONTACT 

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E-mail: investor.relations@ericsson.com

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Investors 
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Alan Ganson, Director, Investor Relations 
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E-mail: alan.ganson@ericsson.com

Media 
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This is information that Telefonaktiebolaget LM Ericsson is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:00 CEST on July 12, 2024.