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
January 29, 2021
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, January 29, 2021 regarding Fourth quarter and full-year 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: January 29, 2021
Fourth quarter and full-year report 2020
Stockholm, Jan 29, 2021
Fourth quarter highlights
| Sales adjusted for comparable units and currency grew by 13% YoY mainly driven by sales in North East Asia, Europe and North America. Reported sales were SEK 69.6 (66.4) b. |
| Gross margin excluding restructuring charges improved to 40.6% (37.1%) with margin improvements in all segments. Reported gross margin improved to 40.6% (36.8%). |
| Operating income excluding restructuring charges improved to SEK 11.0 b. (15.8% operating margin) from SEK 6.5 b. (9.7% operating margin) mainly driven by Networks. Reported operating income was SEK 11.0 (6.1) b. |
| Networks sales increased by 20% YoY, adjusted for comparable units and currency. Operating margin excluding restructuring charges was 21.5% (14.5%). |
| Reported net income was SEK 7.2 (4.5) b. |
| Free cash flow before M&A was SEK 12.8 (-1.9) b. Q4 2019 included a payment of SEK 10.1 b. related to the resolution of the US SEC and DOJ investigations. Net cash Dec 31, 2020, was SEK 41.9 (34.5) b. |
Full-year highlights
| Sales adj. for comp. units and currency grew by 5%, with Networks growing by 10%. Reported sales increased by 2% to SEK 232.4 b. |
| Gross margin excl. restructuring charges was 40.6% (37.5%), with improvements in all segments. |
| Reported operating income improved to SEK 27.8 (10.6) b. |
| Reported net income was SEK 17.6 (1.8) b. |
| Free cash flow before M&A amounted to SEK 22.3 (7.6) b. Full-year 2019 included a payment of SEK 10.1 b. related to the resolution of the US SEC and DOJ investigations. |
| The Board of Directors will propose a dividend for 2020 of SEK 2.00 (1.50) per share to the AGM. |
Planning assumptions highlights (please see page 6 for complete planning assumptions)
| Three-year average reported sales seasonality between Q4 and Q1 is -24%; however, the seasonal effect may be somewhat less pronounced due to 5G deployment in some of Ericssons markets. |
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
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Net sales |
69.6 | 66.4 | 5 | % | 57.5 | 21 | % | 232.4 | 227.2 | 2 | % | |||||||||||||||||||||
Sales growth adj. for comparable units and currency |
| | 13 | % | | | | | 5 | % | ||||||||||||||||||||||
Gross margin |
40.6 | % | 36.8 | % | | 43.1 | % | | 40.3 | % | 37.3 | % | | |||||||||||||||||||
Operating income (loss) |
11.0 | 6.1 | 80 | % | 8.6 | 27 | % | 27.8 | 10.6 | 163 | % | |||||||||||||||||||||
Operating margin |
15.8 | % | 9.2 | % | | 15.0 | % | | 12.0 | % | 4.6 | % | | |||||||||||||||||||
Net income (loss) |
7.2 | 4.5 | 60 | % | 5.6 | 29 | % | 17.6 | 1.8 | | ||||||||||||||||||||||
EPS diluted, SEK |
2.26 | 1.33 | 70 | % | 1.61 | 40 | % | 5.26 | 0.67 | | ||||||||||||||||||||||
Measures excl. restructuring charges and other items affecting comparability¹ |
||||||||||||||||||||||||||||||||
Gross margin excluding restructuring charges |
40.6 | % | 37.1 | % | | 43.2 | % | | 40.6 | % | 37.5 | % | | |||||||||||||||||||
Operating income excl.restr.charges & items affecting compar. in 2019 ² |
11.0 | 5.7 | 92 | % | 9.0 | 23 | % | 29.1 | 22.1 | 32 | % | |||||||||||||||||||||
Operating margin excl.restr.charges & items affecting compar. in 2019 ² |
15.8 | % | 8.6 | % | | 15.6 | % | | 12.5 | % | 9.7 | % | | |||||||||||||||||||
Free cash flow before M &A |
12.8 | -1.9 | | 3.9 | | 22.3 | 7.6 | 192 | % | |||||||||||||||||||||||
Net cash, end of period |
41.9 | 34.5 | 21 | % | 41.5 | 1 | % | 41.9 | 34.5 | 21 | % |
1 | Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
2 | Operating income excludes restructuring charges in all periods and cost provisions related to the resolution of the SEC and DOJ investigations of SEK -11.5 b. in Q3 2019 as well as a partial release of the same provision of SEK 0.7 b. in Q4 2019. |
1 Ericsson | Fourth quarter and full-year report 2020 |
CEO comments
2 Ericsson | Fourth quarter and full-year report 2020 | CEO comments |
Financial highlights
Net sales development
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
YoY adj.¹ |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
YoY adj.¹ |
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Netsales |
69.6 | 66.4 | 5 | % | 13 | % | 57.5 | 21 | % | 232.4 | 227.2 | 2 | % | 5 | % | |||||||||||||||||||||||||
of which Networks |
49.4 | 44.4 | 11 | % | 20 | % | 41.7 | 19 | % | 166.0 | 155.0 | 7 | % | 10 | % | |||||||||||||||||||||||||
of which Digital Services |
12.7 | 13.2 | -4 | % | 3 | % | 8.7 | 45 | % | 37.3 | 39.9 | -6 | % | -3 | % | |||||||||||||||||||||||||
of which Managed Services |
5.8 | 7.0 | -17 | % | -12 | % | 5.5 | 6 | % | 22.6 | 25.6 | -12 | % | -10 | % | |||||||||||||||||||||||||
of which Emerging Business and Other |
1.7 | 1.7 | 0 | % | -4 | % | 1.6 | 10 | % | 6.5 | 6.8 | -4 | % | -4 | % |
1 | Sales growth adjusted for comparable units and currency. Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
3 Ericsson | Fourth quarter and full-year report 2020 | Financial highlights |
Income and margin development
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
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Net sales |
69.6 | 66.4 | 5 | % | 57.5 | 21 | % | 232.4 | 227.2 | 2 | % | |||||||||||||||||||||
Gross income |
28.3 | 24.4 | 16 | % | 24.8 | 14 | % | 93.7 | 84.8 | 10 | % | |||||||||||||||||||||
Gross margin |
40.6 | % | 36.8 | % | | 43.1 | % | | 40.3 | % | 37.3 | % | | |||||||||||||||||||
Research and development (R&D) expenses |
-10.4 | -10.6 | | -10.1 | | -39.7 | -38.8 | | ||||||||||||||||||||||||
Selling and administrative expenses |
-7.4 | -8.2 | | -6.0 | | -26.7 | -26.1 | | ||||||||||||||||||||||||
Impairment losses on trade receivables |
0.3 | -0.2 | | | | 0.1 | 0.7 | -84 | % | |||||||||||||||||||||||
Other operating income and expenses |
0.4 | 0.8 | -50 | % | 0.1 | | 0.7 | -9.7 | | |||||||||||||||||||||||
Operating income |
11.0 | 6.1 | 80 | % | 8.6 | 27 | % | 27.8 | 10.6 | 163 | % | |||||||||||||||||||||
of which Networks |
10.6 | 6.4 | 66 | % | 9.2 | 16 | % | 30.9 | 24.8 | 25 | % | |||||||||||||||||||||
of which Digital Services |
0.5 | -0.2 | | -0.6 | | -2.2 | -4.0 | | ||||||||||||||||||||||||
of which Managed Services |
0.4 | 0.3 | 37 | % | 0.5 | -18 | % | 1.6 | 2.3 | -32 | % | |||||||||||||||||||||
of which Emerging Business & Other |
-0.5 | -0.4 | | -0.4 | | -2.4 | -12.5 | | ||||||||||||||||||||||||
Operating margin |
15.8 | % | 9.2 | % | | 15.0 | % | | 12.0 | % | 4.6 | % | | |||||||||||||||||||
Financial income and expenses, net |
-0.1 | -0.1 | | 0.1 | | -0.6 | -1.8 | | ||||||||||||||||||||||||
Taxes |
-3.7 | -1.6 | | -3.2 | | -9.6 | -6.9 | | ||||||||||||||||||||||||
Net income |
7.2 | 4.5 | 60 | % | 5.6 | 29 | % | 17.6 | 1.8 | | ||||||||||||||||||||||
Restructuring charges |
0.0 | -0.3 | | -0.3 | | -1.3 | -0.8 | | ||||||||||||||||||||||||
Measures excl.restructuring charges and other items affecting comparability¹ |
||||||||||||||||||||||||||||||||
Gross margin excluding restructuring charges |
40.6 | % | 37.1 | % | | 43.2 | % | | 40.6 | % | 37.5 | % | | |||||||||||||||||||
Operating income excl.restr.charges & items affecting compar. in 2019 ² |
11.0 | 5.7 | 92 | % | 9.0 | 23 | % | 29.1 | 22.1 | 32 | % | |||||||||||||||||||||
Operating margin excl.restr.charges & items affecting compar. in 2019 ² |
15.8 | % | 8.6 | % | | 15.6 | % | | 12.5 | % | 9.7 | % | | |||||||||||||||||||
Operating margin excluding restructuring charges |
15.8 | % | 9.7 | % | | 15.6 | % | | 12.5 | % | 5.0 | % | |
1 | Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. |
2 | Operating income excludes restructuring charges in all periods and cost provisions related to the resolution of the SEC and DOJ investigations of SEK -11.5 b. in Q3 2019 as well as a partial release of the same provision of SEK 0.7 b. in Q4 2019. |
Fourth quarter comments
4 Ericsson | Fourth quarter and full-year report 2020 | Financial highlights |
5 Ericsson | Fourth quarter and full-year report 2020 | Financial highlights |
6 Ericsson | Fourth quarter and full-year report 2020 | Planning assumptions |
Market area sales
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
YoY change |
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South EastAsia, Oceania and India |
9.7 | 9.2 | 6 | % | 7.8 | 25 | % | 30.0 | 1 | % | ||||||||||||||||||
North EastAsia |
12.8 | 9.7 | 32 | % | 8.8 | 45 | % | 33.3 | 26 | % | ||||||||||||||||||
North America |
19.1 | 17.4 | 10 | % | 18.4 | 4 | % | 73.8 | 5 | % | ||||||||||||||||||
Europe and Latin America |
17.1 | 17.5 | -2 | % | 13.3 | 29 | % | 55.7 | -6 | % | ||||||||||||||||||
Middle East and Africa |
6.5 | 8.4 | -23 | % | 5.5 | 18 | % | 23.3 | -9 | % | ||||||||||||||||||
Other¹ |
4.3 | 4.2 | 3 | % | 3.7 | 17 | % | 16.2 | -1 | % | ||||||||||||||||||
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Total |
69.6 | 66.4 | 5 | % | 57.5 | 21 | % | 232.4 | 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 at the end of this report.
7 Ericsson | Fourth quarter and full-year report 2020 | Market area sales |
Segment results
Segment Networks
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
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Net sales |
49.4 | 44.4 | 11 | % | 41.7 | 19 | % | 166.0 | 155.0 | 7 | % | |||||||||||||||||||||
Sales growth adj. for comparable units and FX |
| | 20 | % | | | | | 10 | % | ||||||||||||||||||||||
Gross income |
21.4 | 18.3 | 17 | % | 19.4 | 11 | % | 72.4 | 64.7 | 12 | % | |||||||||||||||||||||
Gross margin |
43.4 | % | 41.1 | % | | 46.5 | % | | 43.6 | % | 41.8 | % | | |||||||||||||||||||
Operating income |
10.6 | 6.4 | 66 | % | 9.2 | 16 | % | 30.9 | 24.8 | 25 | % | |||||||||||||||||||||
Operating margin |
21.5 | % | 14.4 | % | | 22.0 | % | | 18.6 | % | 16.0 | % | | |||||||||||||||||||
Restructuring charges |
0.0 | 0.0 | | -0.3 | | -0.7 | -0.1 | | ||||||||||||||||||||||||
Measures excl.restructuring charges |
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Gross margin excl.restructuring charges |
43.5 | % | 41.1 | % | | 46.7 | % | | 43.8 | % | 41.8 | % | | |||||||||||||||||||
Operating income excl.restructuring charges |
10.6 | 6.4 | 65 | % | 9.4 | 13 | % | 31.6 | 24.8 | 27 | % | |||||||||||||||||||||
Operating margin excl.restructuring charges |
21.5 | % | 14.5 | % | | 22.7 | % | | 19.0 | % | 16.0 | % | |
Breakdown of sales into products, services and IPR licensing is available in the back-end tables.
8 Ericsson | Fourth quarter and full-year report 2020 | Segment results |
Segment Digital Services
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
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Netsales |
12.7 | 13.2 | -4 | % | 8.7 | 45 | % | 37.3 | 39.9 | -6 | % | |||||||||||||||||||||
Sales growth adj. for comparable units and FX |
| | 3 | % | | | | | -3 | % | ||||||||||||||||||||||
Gross income |
5.2 | 4.9 | 6 | % | 3.8 | 37 | % | 15.6 | 14.8 | 5 | % | |||||||||||||||||||||
Gross margin |
40.9 | % | 37.2 | % | | 43.4 | % | | 41.9 | % | 37.2 | % | | |||||||||||||||||||
Operating income (loss) |
0.5 | -0.2 | | -0.6 | | -2.2 | -4.0 | | ||||||||||||||||||||||||
Operating margin |
3.9 | % | -1.2 | % | | -6.8 | % | | -5.9 | % | -10.1 | % | | |||||||||||||||||||
Restructuring charges |
0.0 | -0.2 | | -0.1 | | 0.0 | -0.6 | | ||||||||||||||||||||||||
Measures excl.restructuring charges |
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Gross margin excl.restructuring charges |
41.0 | % | 38.1 | % | | 43.5 | % | | 42.0 | % | 37.8 | % | | |||||||||||||||||||
Operating income (loss) excl.restructuring charges |
0.5 | 0.0 | | -0.5 | | -2.2 | -3.4 | | ||||||||||||||||||||||||
Operating margin excl.restructuring charges |
3.8 | % | 0.3 | % | | -5.8 | % | | -5.9 | % | -8.6 | % | |
Breakdown of sales into products, services and IPR licensing is available in the back-end tables.
9 Ericsson | Fourth quarter and full-year report 2020 | Segment results |
Segment Managed Services
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
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Net sales |
5.8 | 7.0 | -17 | % | 5.5 | 6 | % | 22.6 | 25.6 | -12 | % | |||||||||||||||||||||
Sales growth adj. for comparable units and FX |
| | -12 | % | | | | | -10 | % | ||||||||||||||||||||||
Gross income |
1.0 | 1.0 | -1 | % | 1.1 | -6 | % | 4.0 | 4.0 | 1 | % | |||||||||||||||||||||
Gross margin |
17.7 | % | 14.8 | % | | 19.9 | % | | 17.8 | % | 15.6 | % | | |||||||||||||||||||
Operating income |
0.4 | 0.3 | 37 | % | 0.5 | -18 | % | 1.6 | 2.3 | -32 | % | |||||||||||||||||||||
Operating margin |
6.9 | % | 4.2 | % | | 8.9 | % | | 6.9 | % | 9.0 | % | | |||||||||||||||||||
Restructuring charges |
0.0 | 0.0 | | 0.0 | | -0.3 | 0.0 | | ||||||||||||||||||||||||
Measures excl.restructuring charges |
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Gross margin excl.restructuring charges |
17.7 | % | 15.4 | % | | 20.1 | % | | 18.9 | % | 15.8 | % | | |||||||||||||||||||
Operating income excl.restructuring charges |
0.4 | 0.3 | 20 | % | 0.5 | -20 | % | 1.8 | 2.4 | -23 | % | |||||||||||||||||||||
Operating margin excl.restructuring charges |
6.9 | % | 4.8 | % | | 9.1 | % | | 8.1 | % | 9.2 | % | |
10 Ericsson | Fourth quarter and full-year report 2020 | Segment results |
Segment Emerging Business and Other
SEK b. |
Q4 2020 |
Q4 2019 |
YoY change |
Q3 2020 |
QoQ change |
Jan-Dec 2020 |
Jan-Dec 2019 |
YoY change |
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Net sales |
1.7 | 1.7 | 0 | % | 1.6 | 10 | % | 6.5 | 6.8 | -4 | % | |||||||||||||||||||||
Of which Emerging Business and iconectiv |
1.3 | 1.1 | 12 | % | 1.0 | 20 | % | 4.5 | 4.3 | 5 | % | |||||||||||||||||||||
Of which Red Bee Media |
0.5 | 0.6 | -18 | % | 0.5 | -1 | % | 2.1 | 2.4 | -13 | % | |||||||||||||||||||||
Of which Media Solutions |
0.0 | 0.0 | | 0.0 | | -0.1 | 0.1 | | ||||||||||||||||||||||||
Sales growth adj. for comparable units and FX |
| | -4 | % | | | | | -4 | % | ||||||||||||||||||||||
Gross income |
0.6 | 0.2 | 164 | % | 0.5 | 21 | % | 1.7 | 1.3 | 30 | % | |||||||||||||||||||||
Gross margin |
35.3 | % | 13.4 | % | | 32.0 | % | | 25.6 | % | 18.9 | % | | |||||||||||||||||||
Operating income (loss) |
-0.5 | -0.4 | | -0.4 | | -2.4 | -12.5 | | ||||||||||||||||||||||||
Of which Em . Business, iconectiv, Cradlepoint & common costs |
-0.7 | -0.6 | | -0.3 | | -2.1 | -2.1 | | ||||||||||||||||||||||||
Of which Red Bee Media |
0.0 | 0.0 | | 0.0 | | 0.0 | 0.1 | | ||||||||||||||||||||||||
Of which Media Solutions |
0.2 | -0.3 | | -0.2 | | -0.3 | -0.3 | | ||||||||||||||||||||||||
Of which adjustments 2019 ¹ |
| 0.5 | | | | | -10.1 | | ||||||||||||||||||||||||
Operating margin |
-28.5 | % | -23.2 | % | | -26.7 | % | | -37.0 | % | -184.0 | % | | |||||||||||||||||||
Restructuring charges |
0.0 | 0.0 | | 0.0 | | -0.3 | -0.1 | | ||||||||||||||||||||||||
Measures excl.restructuring charges |
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Gross margin excl.restructuring charges |
33.8 | % | 15.1 | % | | 30.5 | % | | 28.0 | % | 19.6 | % | | |||||||||||||||||||
Operating income (loss) excl.restructuring charges |
-0.5 | -0.4 | | -0.5 | | -2.1 | -12.4 | | ||||||||||||||||||||||||
Operating margin excl.restructuring charges |
-29.3 | % | -21.4 | % | | -29.2 | % | | -32.6 | % | -183.0 | % | | |||||||||||||||||||
Op.income excl.restr.charges & item saffecting com p.¹ |
-0.5 | -0.8 | | -0.5 | | -2.1 | -2.3 | | ||||||||||||||||||||||||
Op.margin excl.restr.charges & item saffecting com p.¹ |
-29.3 | % | -47.8 | % | | -29.2 | % | | -32.6 | % | -34.3 | % | |
1 | Includes cost provisions of SEK -11.5 b. related to the resolution of the SEC and DOJ investigations in Q3 2019, and a partial release of the same provision of SEK 0.7 b. in Q4 2019. Includes winding down non-cash costs of the ST-Ericsson legal structure of SEK -0.3 b. in Q4 2019. Includes a social security cost refund of SEK 0.9 b. in Q3 2019. |
11 Ericsson | Fourth quarter and full-year report 2020 | Segment results |
Cash flow
SEK b. |
Q4 2020 |
Q4 2019 |
Q3 2020 |
Jan-Dec 2020 |
Jan-Dec 2019 |
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Net income adjusted for non-cash items |
12.5 | 8.0 | 9.7 | 32.5 | 14.1 | |||||||||||||||
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Working capital changes (net operating assets and liabilities) |
1.4 | -7.5 | -4.4 | -3.6 | 2.8 | |||||||||||||||
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Cash flow from operating activities |
13.9 | 0.5 | 5.3 | 28.9 | 16.9 | |||||||||||||||
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Capex (net) including product development |
-1.2 | -1.6 | -1.1 | -5.1 | -5.9 | |||||||||||||||
Other investing activities and lease liabilities |
0.0 | -0.8 | -0.3 | -1.6 | -3.3 | |||||||||||||||
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Free cash flow before M&A |
12.8 | -1.9 | 3.9 | 22.3 | 7.6 | |||||||||||||||
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Acquisitions/divestments, net1) |
-9.3 | -1.3 | -0.1 | -9.6 | -1.5 | |||||||||||||||
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Free cash flow |
3.5 | -3.2 | 3.8 | 12.7 | 6.1 | |||||||||||||||
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Cash flow from investing activities |
-8.6 | -4.8 | -1.1 | -15.2 | -3.5 | |||||||||||||||
Cash flow from financing activities |
-8.5 | 0.1 | -0.9 | -12.5 | -6.9 | |||||||||||||||
Net change in cash and cash equivalents |
-5.2 | -6.1 | 3.1 | -1.5 | 6.7 |
Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.
1 | Includes the acquisition of Cradlepoint of SEK -9.5 b. |
12 Ericsson | Fourth quarter and full-year report 2020 | Cash flow |
Financial position
SEK b. |
Dec 31 2020 |
Dec 31 2019 |
Sep 30 2020 |
|||||||||
Gross cash |
72.0 | 72.2 | 78.2 | |||||||||
|
|
|
|
|
|
|||||||
- Borrowings, current |
7.9 | 9.4 | 14.6 | |||||||||
- Borrowings, non-current |
22.2 | 28.3 | 22.1 | |||||||||
|
|
|
|
|
|
|||||||
Net cash |
41.9 | 34.5 | 41.5 | |||||||||
|
|
|
|
|
|
|||||||
Equity |
85.2 | 81.9 | 82.5 | |||||||||
Total assets |
271.5 | 276.4 | 277.2 | |||||||||
Capital turnover (times) |
1.4 | 1.4 | 1.3 | |||||||||
Return on capital employed (%) |
17.0 | % | 6.7 | % | 13.5 | % |
13 Ericsson | Fourth quarter and full-year report 2020 | Financial position |
Parent Company
14 Ericsson | Fourth quarter and full-year report 2020 | Parent Company |
Dividend, AGM and Annual Report
15 Ericsson | Fourth quarter and full-year report 2020 | Dividend, AGM and Annual Report |
Other information
16 Ericsson | Fourth quarter and full-year report 2020 | Other information |
Risk factors
17 Ericsson | Fourth quarter and full-year report 2020 | Risk factors |
Editors note
18 Ericsson | Fourth quarter and full-year report 2020 | Editors note |
Forward-looking statements
19 Ericsson | Fourth quarter and full-year report 2020 | Forward-looking statements |
Auditors Review Report
20 Ericsson | Fourth quarter and full-year report 2020 | Auditors Review Report |
Financial statements
and other information
21 Ericsson | Fourth quarter and full-year report 2020 | Financial statements and other information |
Financial statements (unaudited)
Condensed consolidated income statement
Q4 | Jan-Dec | |||||||||||||||||||||||
SEK million |
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||
Net sales |
69,590 | 66,373 | 5 | % | 232,390 | 227,216 | 2 | % | ||||||||||||||||
Cost of sales |
-41,333 | -41,939 | -1 | % | -138,666 | -142,392 | -3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross income |
28,257 | 24,434 | 16 | % | 93,724 | 84,824 | 10 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Research and development expenses |
-10,433 | -10,633 | -2 | % | -39,714 | -38,815 | 2 | % | ||||||||||||||||
Selling and administrative expenses |
-7,402 | -8,222 | -10 | % | -26,684 | -26,137 | 2 | % | ||||||||||||||||
Impairment losses on trade receivables |
264 | -173 | -253 | % | 118 | 737 | -84 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
-17,571 | -19,028 | -8 | % | -66,280 | -64,215 | 3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other operating income and expenses |
381 | 756 | -50 | % | 662 | -9,710 | -107 | % | ||||||||||||||||
Share in earnings of JV and associated companies |
-59 | -37 | 59 | % | -298 | -335 | -11 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss) |
11,008 | 6,125 | 80 | % | 27,808 | 10,564 | 163 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial income and expenses, net |
-95 | -71 | 34 | % | -596 | -1,802 | -67 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income after financial items |
10,913 | 6,054 | 80 | % | 27,212 | 8,762 | 211 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax |
-3,721 | -1,570 | 137 | % | -9,589 | -6,922 | 39 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income |
7,192 | 4,484 | 60 | % | 17,623 | 1,840 | 858 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||||||
Owners of the Parent Company |
7,522 | 4,430 | 17,483 | 2,223 | ||||||||||||||||||||
Non-controlling interests |
-330 | 54 | 140 | -383 | ||||||||||||||||||||
Other information |
||||||||||||||||||||||||
Average number of shares, basic (million) |
3,328 | 3,313 | 3,323 | 3,306 | ||||||||||||||||||||
Earnings (loss) per share, basic (SEK) ¹) |
2.26 | 1.34 | 5.26 | 0.67 | ||||||||||||||||||||
Earnings (loss) per share, diluted (SEK) ²) |
2.26 | 1.33 | 5.26 | 0.67 |
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)
Q4 | Jan-Dec | |||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) |
7,192 | 4,484 | 17,623 | 1,840 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (loss) |
||||||||||||||||
Items that will not be reclassified to profit or loss |
||||||||||||||||
Remeasurements of defined benefits pension plans incl. asset ceiling |
-716 | 1,984 | -4,618 | -6,182 | ||||||||||||
Revaluation of borrowings due to change in credit risk |
-325 | -197 | 99 | -651 | ||||||||||||
Tax on items that will not be reclassified to profit or loss |
173 | -523 | 880 | 1,363 | ||||||||||||
Items that have been or may be reclassified to profit or loss |
||||||||||||||||
Cash flow hedge reserve |
||||||||||||||||
Gains/losses arising during the period |
160 | 290 | 136 | -290 | ||||||||||||
Reclassification adjustments on gains/losses included in profit or loss |
70 | | 281 | | ||||||||||||
Changes in cumulative translation adjustments |
-2,888 | -1,708 | -5,254 | 1,979 | ||||||||||||
Share of other comprehensive income (loss) on JV and associated companies |
-55 | 17 | -81 | 131 | ||||||||||||
Tax on items that have been or may be reclassified to profit or loss |
-47 | -59 | -86 | 60 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income (loss), net of tax |
-3,628 | -196 | -8,643 | -3,590 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) |
3,564 | 4,288 | 8,980 | -1,750 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) attributable to: |
||||||||||||||||
Owners of the Parent Company |
3,823 | 4,253 | 8,786 | -1,403 | ||||||||||||
Non-controlling interests |
-259 | 35 | 194 | -347 |
22 Ericsson | Fourth quarter and full-year report 2020 | Financial statements |
Condensed consolidated balance sheet
Dec 31 | Sep 30 | Dec 31 | ||||||||||
SEK million |
2020 | 2020 | 2019 | |||||||||
Assets |
||||||||||||
Non-current assets |
||||||||||||
Intangible assets |
||||||||||||
Capitalized development expenses |
3,857 | 3,978 | 4,040 | |||||||||
Goodwill |
34,945 | 30,314 | 31,200 | |||||||||
Intellectual property rights, brands and other intangible assets |
4,805 | 2,091 | 2,491 | |||||||||
Property, plant and equipment |
13,383 | 13,882 | 13,850 | |||||||||
Right-of-use assets |
7,980 | 8,243 | 8,487 | |||||||||
Financial assets |
||||||||||||
Equity in JV and associated companies |
1,274 | 1,317 | 1,565 | |||||||||
Other investments in shares and participations |
1,519 | 1,420 | 1,432 | |||||||||
Customer finance, non-current |
1,221 | 1,269 | 2,262 | |||||||||
Interest-bearing securities, non-current |
21,613 | 23,898 | 20,354 | |||||||||
Other financial assets, non-current |
4,842 | 5,312 | 5,614 | |||||||||
Deferred tax assets |
26,296 | 29,726 | 31,174 | |||||||||
|
|
|
|
|
|
|||||||
121,735 | 121,450 | 122,469 | ||||||||||
|
|
|
|
|
|
|||||||
Current assets |
||||||||||||
Inventories |
28,097 | 32,804 | 30,863 | |||||||||
Contract assets |
11,273 | 11,468 | 12,171 | |||||||||
Trade receivables |
42,063 | 38,180 | 43,069 | |||||||||
Customer finance, current |
1,916 | 1,878 | 1,494 | |||||||||
Other current receivables |
16,014 | 17,081 | 14,479 | |||||||||
Interest-bearing securities, current |
6,820 | 5,552 | 6,759 | |||||||||
Cash and cash equivalents |
43,612 | 48,774 | 45,079 | |||||||||
|
|
|
|
|
|
|||||||
149,795 | 155,737 | 153,914 | ||||||||||
|
|
|
|
|
|
|||||||
Total assets |
271,530 | 277,187 | 276,383 | |||||||||
|
|
|
|
|
|
|||||||
Equity and liabilities |
||||||||||||
Equity |
||||||||||||
Stockholders equity |
86,674 | 82,830 | 82,559 | |||||||||
Non-controlling interest in equity of subsidiaries |
-1,497 | -345 | -681 | |||||||||
|
|
|
|
|
|
|||||||
85,177 | 82,485 | 81,878 | ||||||||||
|
|
|
|
|
|
|||||||
Non-current liabilities |
||||||||||||
Post-employment benefits |
37,353 | 36,515 | 35,817 | |||||||||
Provisions, non-current |
2,886 | 2,378 | 2,679 | |||||||||
Deferred tax liabilities |
1,089 | 1,102 | 1,224 | |||||||||
Borrowings, non-current |
22,218 | 22,132 | 28,257 | |||||||||
Lease liabilities, non-current |
7,104 | 7,426 | 7,595 | |||||||||
Other non-current liabilities |
1,383 | 1,759 | 2,114 | |||||||||
|
|
|
|
|
|
|||||||
72,033 | 71,312 | 77,686 | ||||||||||
|
|
|
|
|
|
|||||||
Current liabilities |
||||||||||||
Provisions, current |
7,580 | 8,544 | 8,244 | |||||||||
Borrowings, current |
7,942 | 14,587 | 9,439 | |||||||||
Lease liabilities, current |
2,196 | 2,257 | 2,287 | |||||||||
Contract liabilities |
26,440 | 29,393 | 29,041 | |||||||||
Trade payables |
31,988 | 30,704 | 30,403 | |||||||||
Other current liabilities |
38,174 | 37,905 | 37,405 | |||||||||
|
|
|
|
|
|
|||||||
114,320 | 123,390 | 116,819 | ||||||||||
|
|
|
|
|
|
|||||||
Total equity and liabilities |
271,530 | 277,187 | 276,383 | |||||||||
|
|
|
|
|
|
23 Ericsson | Fourth quarter and full-year report 2020 | Financial statements |
Condensed consolidated statement of cash flows
Q4 | Jan-Dec | |||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||
Operating activities |
||||||||||||||||
Net income |
7,192 | 4,484 | 17,623 | 1,840 | ||||||||||||
Adjustments for |
||||||||||||||||
Taxes |
2,946 | 949 | 6,123 | 1,652 | ||||||||||||
Earnings/ dividends in JV and associated companies |
115 | 33 | 374 | 406 | ||||||||||||
Depreciation, amortization and impairment losses |
2,293 | 2,290 | 8,674 | 9,089 | ||||||||||||
Other |
-9 | 197 | -256 | 1,079 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
12,537 | 7,953 | 32,538 | 14,066 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Changes in operating net assets |
||||||||||||||||
Inventories |
3,753 | 5,200 | 384 | 261 | ||||||||||||
Customer finance, current and non-current |
-119 | -66 | 370 | -858 | ||||||||||||
Trade receivables and contract assets |
-7,231 | -3,216 | -3,185 | 10,995 | ||||||||||||
Trade payables |
2,999 | 688 | 4,303 | -372 | ||||||||||||
Provisions and post-employment benefits |
199 | -10,509 | -2,669 | -3,729 | ||||||||||||
Contract liabilities |
-2,046 | -4,413 | -560 | -1,579 | ||||||||||||
Other operating assets and liabilities, net |
3,811 | 4,859 | -2,248 | -1,911 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,366 | -7,457 | -3,605 | 2,807 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flow from operating activities |
13,903 | 496 | 28,933 | 16,873 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Investing activities |
||||||||||||||||
Investments in property, plant and equipment |
-1,090 | -1,475 | -4,493 | -5,118 | ||||||||||||
Sales of property, plant and equipment |
104 | 206 | 254 | 744 | ||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net¹) |
-9,256 | -1,341 | -9,598 | -1,505 | ||||||||||||
Product development |
-177 | -329 | -817 | -1,545 | ||||||||||||
Other investing activities |
668 | -74 | 801 | -331 | ||||||||||||
Interest-bearing securities |
1,189 | -1,759 | -1,348 | 4,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flow from investing activities |
-8,562 | -4,772 | -15,201 | -3,541 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financing activities |
||||||||||||||||
Dividends paid |
-3,456 | -15 | -5,996 | -4,450 | ||||||||||||
Repayment of lease liabilities²) |
-636 | -711 | -2,417 | -2,990 | ||||||||||||
Other financing activities |
-4,387 | 834 | -4,079 | 540 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flow from financing activities |
-8,479 | 108 | -12,492 | -6,900 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Effect of exchange rate changes on cash |
-2,024 | -1,936 | -2,707 | 258 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net change in cash and cash equivalents |
-5,162 | -6,104 | -1,467 | 6,690 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents, beginning of period |
48,774 | 51,183 | 45,079 | 38,389 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents, end of period |
43,612 | 45,079 | 43,612 | 45,079 | ||||||||||||
|
|
|
|
|
|
|
|
1) | Includes acquisition of Cradlepoint of SEK -9.5 b. |
2) | Includes a repayment of a bilateral loan with the European Investment Bank (EIB) of SEK -5.8 b. |
24 Ericsson | Fourth quarter and full-year report 2020 | Financial statements |
Condensed consolidated statement of changes in equity
Jan-Dec | ||||||||
SEK million |
2020 | 2019 | ||||||
Opening balance |
81,878 | 87,770 | ||||||
Adjustment due to new accounting standards 1) |
| -249 | ||||||
|
|
|
|
|||||
Adjusted opening balance |
81,878 | 87,521 | ||||||
|
|
|
|
|||||
Total comprehensive income (loss) |
8,982 | -1,750 | ||||||
Sale/repurchase of own shares |
163 | 197 | ||||||
Long-term variable compensation plans |
150 | 377 | ||||||
Dividends to shareholders |
-5,996 | -4,450 | ||||||
Transactions with non-controlling interests |
| -17 | ||||||
|
|
|
|
|||||
Closing balance |
85,177 | 81,878 | ||||||
|
|
|
|
1) |
Opening balance adjustment in 2019 due to IFRS 16. |
Condensed consolidated income statement isolated quarters
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Cost of sales |
-41,333 | -32,710 | -34,661 | -29,962 | -41,939 | -35,587 | -34,739 | -30,127 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross income |
28,257 | 24,762 | 20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Research and development expenses |
-10,433 | -10,101 | -10,035 | -9,145 | -10,633 | -9,497 | -9,518 | -9,167 | ||||||||||||||||||||||||
Selling and administrative expenses |
-7,402 | -5,992 | -7,052 | -6,238 | -8,222 | -4,920 | -6,964 | -6,031 | ||||||||||||||||||||||||
Impairment losses on trade receivables |
264 | -28 | 42 | -160 | -173 | 200 | 151 | 559 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating expenses |
-17,571 | -16,121 | -17,045 | -15,543 | -19,028 | -14,217 | -16,331 | -14,639 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other operating income and expenses 1) |
381 | 61 | 131 | 89 | 756 | -11,305 | 66 | 773 | ||||||||||||||||||||||||
Share in earnings of JV and associated companies |
-59 | -59 | -152 | -28 | -37 | -214 | -67 | -17 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating income (loss) |
11,008 | 8,643 | 3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Financial income and expenses, net |
-95 | 109 | 292 | -902 | -71 | -685 | -441 | -605 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income after financial items |
10,913 | 8,752 | 4,143 | 3,404 | 6,054 | -4,881 | 3,298 | 4,291 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Taxes |
-3,721 | -3,186 | -1,558 | -1,124 | -1,570 | -2,013 | -1,451 | -1,888 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) |
7,192 | 5,566 | 2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||||||||||||||
Owners of the Parent Company |
7,522 | 5,353 | 2,452 | 2,156 | 4,430 | -6,229 | 1,705 | 2,317 | ||||||||||||||||||||||||
Non-controlling interests |
-330 | 213 | 133 | 124 | 54 | -665 | 142 | 86 | ||||||||||||||||||||||||
Other information |
||||||||||||||||||||||||||||||||
Average number of shares, basic (million) |
3,328 | 3,326 | 3,322 | 3,317 | 3,313 | 3,308 | 3,304 | 3,300 | ||||||||||||||||||||||||
Earnings (loss) per share, basic (SEK) 2) |
2.26 | 1.61 | 0.74 | 0.65 | 1.34 | -1.89 | 0.52 | 0.70 | ||||||||||||||||||||||||
Earnings (loss) per share, diluted (SEK) 3) |
2.26 | 1.61 | 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. |
25 Ericsson | Fourth quarter and full-year report 2020 | Financial statements |
Condensed consolidated statement of cash flows isolated quarters
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Operating activities |
||||||||||||||||||||||||||||||||
Net income (loss) |
7,192 | 5,566 | 2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||||||||
Adjustments for |
||||||||||||||||||||||||||||||||
Taxes |
2,946 | 2,465 | 1,132 | -420 | 949 | -411 | 310 | 804 | ||||||||||||||||||||||||
Earnings/ dividends in JV and associated companies |
115 | 74 | 155 | 30 | 33 | 278 | 71 | 24 | ||||||||||||||||||||||||
Depreciation, amortization and impairment losses |
2,293 | 2,105 | 2,156 | 2,120 | 2,290 | 2,199 | 2,274 | 2,326 | ||||||||||||||||||||||||
Other |
-9 | -541 | -440 | 734 | 197 | 508 | 450 | -76 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|||||||||||||||||
12,537 | 9,669 | 5,588 | 4,744 | 7,953 | -4,320 | 4,952 | 5,481 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Changes in operating net assets |
||||||||||||||||||||||||||||||||
Inventories |
3,753 | -1,578 | -1,253 | -538 | 5,200 | 1,077 | -3,065 | -2,951 | ||||||||||||||||||||||||
Customer finance, current and non-current |
-119 | -635 | 307 | 817 | -66 | -265 | 384 | -911 | ||||||||||||||||||||||||
Trade receivables and contract assets |
-7,231 | -1,513 | 0 | 5,559 | -3,216 | 6,528 | 3,338 | 4,345 | ||||||||||||||||||||||||
Trade payables |
2,999 | -624 | 4,104 | -2,176 | 688 | -2,913 | 1,833 | 20 | ||||||||||||||||||||||||
Provisions and post-employment benefits |
199 | -1,897 | -1,189 | 218 | -10,509 | 10,719 | -480 | -3,459 | ||||||||||||||||||||||||
Contract liabilities |
-2,046 | -1,501 | -1,000 | 3,987 | -4,413 | -3,988 | -1,641 | 8,463 | ||||||||||||||||||||||||
Other operating assets and liabilities, net |
3,811 | 3,358 | -1,108 | -8,309 | 4,859 | 151 | -1,698 | -5,223 | ||||||||||||||||||||||||
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|
|
|||||||||||||||||
1,366 | -4,390 | -139 | -442 | -7,457 | 11,309 | -1,329 | 284 | |||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash flow from operating activities |
13,903 | 5,279 | 5,449 | 4,302 | 496 | 6,989 | 3,623 | 5,765 | ||||||||||||||||||||||||
|
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|
|
|||||||||||||||||
Investing activities |
||||||||||||||||||||||||||||||||
Investments in property, plant and equipment |
-1,090 | -963 | -1,327 | -1,113 | -1,475 | -1,231 | -1,098 | -1,314 | ||||||||||||||||||||||||
Sales of property, plant and equipment |
104 | 55 | 69 | 26 | 206 | 122 | 184 | 232 | ||||||||||||||||||||||||
Acquisitions/divestments of subs. and other operations, net 1) |
-9,256 | -89 | -45 | -208 | -1,341 | -466 | 3 | 299 | ||||||||||||||||||||||||
Product development |
-177 | -167 | -211 | -262 | -329 | -313 | -446 | -457 | ||||||||||||||||||||||||
Other investing activities |
668 | 301 | -126 | -42 | -74 | -56 | -36 | -165 | ||||||||||||||||||||||||
Interest-bearing securities |
1,189 | -246 | 1,141 | -3,432 | -1,759 | -1,114 | 2,414 | 4,673 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash flow from investing activities |
-8,562 | -1,109 | -499 | -5,031 | -4,772 | -3,058 | 1,021 | 3,268 | ||||||||||||||||||||||||
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|||||||||||||||||
Financing activities |
||||||||||||||||||||||||||||||||
Dividends paid |
-3,456 | -42 | -2,489 | -9 | -15 | -141 | -3,308 | -986 | ||||||||||||||||||||||||
Repayment of lease liabilities |
-636 | -567 | -618 | -596 | -711 | -1,052 | -623 | -604 | ||||||||||||||||||||||||
Other financing activities2) |
-4,387 | -277 | -1,451 | 2,036 | 834 | 1,396 | -680 | -1,010 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash flow from financing activities |
-8,479 | -886 | -4,558 | 1,431 | 108 | 203 | -4,611 | -2,600 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Effect of exchange rate changes on cash |
-2,024 | -165 | -3,084 | 2,566 | -1,936 | 1,550 | 13 | 631 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net change in cash and cash equivalents |
-5,162 | 3,119 | -2,692 | 3,268 | -6,104 | 5,684 | 46 | 7,064 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash and cash equivalents, beginning of period |
48,774 | 45,655 | 48,347 | 45,079 | 51,183 | 45,499 | 45,453 | 38,389 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash and cash equivalents, end of period |
43,612 | 48,774 | 45,655 | 48,347 | 45,079 | 51,183 | 45,499 | 45,453 | ||||||||||||||||||||||||
|
|
|
|
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|
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|
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|
|
|
1) |
Includes acquisition of Cradlepoint of SEK -9.5 b. |
2) |
Includes a repayment of a bilateral loan with the European Investment Bank (EIB) of SEK -5.8 b. |
26 Ericsson | Fourth quarter and full-year report 2020 | Financial statements |
Condensed Parent Company income statement
Q4 | Jan-Dec | |||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net sales |
| | | | ||||||||||||
Cost of sales |
| | | | ||||||||||||
Gross income |
| | | | ||||||||||||
Operating expenses |
-383 | -499 | -1,378 | -1,531 | ||||||||||||
Other operating income and expenses 1) |
1,038 | 1,808 | 2,866 | -8,148 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income |
655 | 1,309 | 1,488 | -9,679 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial net |
3,946 | 4,984 | 6,845 | 6,610 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income after financial items |
4,601 | 6,293 | 8,333 | -3,069 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Transfers to (-)/from untaxed reserves |
-1,540 | -1,961 | -1,540 | -1,961 | ||||||||||||
Taxes |
103 | 352 | -408 | 87 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
3,164 | 4,684 | 6,385 | -4,943 | ||||||||||||
|
|
|
|
|
|
|
|
1) | Includes costs of SEK -10.7 billion in 2019 related to the resolution of the SEC and DOJ investigations. |
Condensed Parent Company statement of comprehensive income (loss)
Q4 | Jan-Dec | |||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) |
3,164 | 4,684 | 6,385 | -4,943 | ||||||||||||
Revaluation of borrowings due to change in credit risk |
-325 | -197 | 99 | -651 | ||||||||||||
Tax on items that will not be reclassified to profit or loss |
67 | 41 | -20 | 134 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income, net of tax |
-258 | -156 | 79 | -517 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) |
2,906 | 4,528 | 6,464 | -5,460 | ||||||||||||
|
|
|
|
|
|
|
|
27 Ericsson | Fourth quarter and full-year report 2020 | Financial highlights |
Condensed Parent Company balance sheet
Dec31 | Dec31 | |||||||
SEK million |
2020 | 2019 | ||||||
Assets |
||||||||
Fixed assets |
||||||||
Intangible assets |
26 | 58 | ||||||
Tangible assets |
460 | 303 | ||||||
Financial assets ¹) |
104,989 | 106,156 | ||||||
|
|
|
|
|||||
105,475 | 106,517 | |||||||
|
|
|
|
|||||
Current assets |
||||||||
Receivables |
30,230 | 23,166 | ||||||
Short-term investments |
6,621 | 6,328 | ||||||
Cash and cash equivalents |
28,775 | 29,800 | ||||||
|
|
|
|
|||||
65,626 | 59,294 | |||||||
|
|
|
|
|||||
Total assets |
171,101 | 165,811 | ||||||
|
|
|
|
|||||
Stockholders equity, provisions and liabilities |
||||||||
Equity |
||||||||
Restricted equity |
48,164 | 48,164 | ||||||
Non-restricted equity |
33,915 | 32,222 | ||||||
|
|
|
|
|||||
82,079 | 80,386 | |||||||
|
|
|
|
|||||
Provisions |
343 | 668 | ||||||
Non-current liabilities |
22,111 | 28,341 | ||||||
Current liabilities |
66,568 | 56,416 | ||||||
|
|
|
|
|||||
Total stockholders equity, provisions and liabilities |
171,101 | 165,811 | ||||||
|
|
|
|
|||||
¹) Of which interest-bearing securities, non-current |
21,597 | 20,354 |
28 Ericsson | Fourth quarter and full-year report 2020 | Financial highlights |
Net sales by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
49,366 | 41,659 | 39,827 | 35,126 | 44,448 | 39,261 | 37,819 | 33,481 | ||||||||||||||||||||||||
Of which Products |
37,523 | 30,992 | 28,966 | 24,748 | 31,159 | 27,500 | 26,698 | 23,765 | ||||||||||||||||||||||||
Of which Services |
11,843 | 10,667 | 10,861 | 10,378 | 13,289 | 11,761 | 11,121 | 9,716 | ||||||||||||||||||||||||
Digital Services |
12,671 | 8,733 | 8,575 | 7,345 | 13,168 | 9,881 | 8,991 | 7,817 | ||||||||||||||||||||||||
Of which Products |
7,430 | 4,621 | 4,598 | 3,798 | 7,338 | 5,594 | 4,611 | 3,937 | ||||||||||||||||||||||||
Of which Services |
5,241 | 4,112 | 3,977 | 3,547 | 5,830 | 4,287 | 4,380 | 3,880 | ||||||||||||||||||||||||
Managed Services |
5,815 | 5,498 | 5,573 | 5,714 | 7,027 | 6,359 | 6,323 | 5,856 | ||||||||||||||||||||||||
Emerging Business and Other |
1,738 | 1,582 | 1,603 | 1,565 | 1,730 | 1,626 | 1,677 | 1,752 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Sequential change, percent |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
19 | % | 5 | % | 13 | % | -21 | % | 13 | % | 4 | % | 13 | % | -20 | % | ||||||||||||||||
Of which Products |
21 | % | 7 | % | 17 | % | -21 | % | 13 | % | 3 | % | 12 | % | -20 | % | ||||||||||||||||
Of which Services |
11 | % | -2 | % | 5 | % | -22 | % | 13 | % | 6 | % | 14 | % | -18 | % | ||||||||||||||||
Digital Services |
45 | % | 2 | % | 17 | % | -44 | % | 33 | % | 10 | % | 15 | % | -40 | % | ||||||||||||||||
Of which Products |
61 | % | 1 | % | 21 | % | -48 | % | 31 | % | 21 | % | 17 | % | -47 | % | ||||||||||||||||
Of which Services |
27 | % | 3 | % | 12 | % | -39 | % | 36 | % | -2 | % | 13 | % | -30 | % | ||||||||||||||||
Managed Services |
6 | % | -1 | % | -2 | % | -19 | % | 11 | % | 1 | % | 8 | % | -15 | % | ||||||||||||||||
Emerging Business and Other |
10 | % | -1 | % | 2 | % | -10 | % | 6 | % | -3 | % | -4 | % | -23 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
21 | % | 3 | % | 12 | % | -25 | % | 16 | % | 4 | % | 12 | % | -23 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year over year change, percent |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
11 | % | 6 | % | 5 | % | 5 | % | 7 | % | 9 | % | 17 | % | 17 | % | ||||||||||||||||
Of which Products |
20 | % | 13 | % | 8 | % | 4 | % | 5 | % | 9 | % | 20 | % | 22 | % | ||||||||||||||||
Of which Services |
-11 | % | -9 | % | -2 | % | 7 | % | 12 | % | 11 | % | 10 | % | 6 | % | ||||||||||||||||
Digital Services |
-4 | % | -12 | % | -5 | % | -6 | % | 1 | % | 10 | % | 2 | % | 8 | % | ||||||||||||||||
Of which Products |
1 | % | -17 | % | 0 | % | -4 | % | -2 | % | 22 | % | 3 | % | 0 | % | ||||||||||||||||
Of which Services |
-10 | % | -4 | % | -9 | % | -9 | % | 5 | % | -3 | % | 0 | % | 17 | % | ||||||||||||||||
Managed Services |
-17 | % | -14 | % | -12 | % | -2 | % | 2 | % | -2 | % | -3 | % | -1 | % | ||||||||||||||||
Emerging Business and Other |
0 | % | -3 | % | -4 | % | -11 | % | -24 | % | -33 | % | -18 | % | 6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
5 | % | 1 | % | 1 | % | 2 | % | 4 | % | 6 | % | 10 | % | 13 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
165,978 | 116,612 | 74,953 | 35,126 | 155,009 | 110,561 | 71,300 | 33,481 | ||||||||||||||||||||||||
Of which Products |
122,229 | 84,706 | 53,714 | 24,748 | 109,122 | 77,963 | 50,463 | 23,765 | ||||||||||||||||||||||||
Of which Services |
43,749 | 31,906 | 21,239 | 10,378 | 45,887 | 32,598 | 20,837 | 9,716 | ||||||||||||||||||||||||
Digital Services |
37,324 | 24,653 | 15,920 | 7,345 | 39,857 | 26,689 | 16,808 | 7,817 | ||||||||||||||||||||||||
Of which Products |
20,447 | 13,017 | 8,396 | 3,798 | 21,480 | 14,142 | 8,548 | 3,937 | ||||||||||||||||||||||||
Of which Services |
16,877 | 11,636 | 7,524 | 3,547 | 18,377 | 12,547 | 8,260 | 3,880 | ||||||||||||||||||||||||
Managed Services |
22,600 | 16,785 | 11,287 | 5,714 | 25,565 | 18,538 | 12,179 | 5,856 | ||||||||||||||||||||||||
Emerging Business and Other |
6,488 | 4,750 | 3,168 | 1,565 | 6,785 | 5,055 | 3,429 | 1,752 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year over year change, percent |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
7 | % | 5 | % | 5 | % | 5 | % | 12 | % | 14 | % | 17 | % | 17 | % | ||||||||||||||||
Of which Products |
12 | % | 9 | % | 6 | % | 4 | % | 13 | % | 16 | % | 21 | % | 22 | % | ||||||||||||||||
Of which Services |
-5 | % | -2 | % | 2 | % | 7 | % | 10 | % | 9 | % | 9 | % | 6 | % | ||||||||||||||||
Digital Services |
-6 | % | -8 | % | -5 | % | -6 | % | 5 | % | 6 | % | 4 | % | 8 | % | ||||||||||||||||
Of which Products |
-5 | % | -8 | % | -2 | % | -4 | % | 5 | % | 9 | % | 2 | % | 0 | % | ||||||||||||||||
Of which Services |
-8 | % | -7 | % | -9 | % | -9 | % | 4 | % | 4 | % | 8 | % | 17 | % | ||||||||||||||||
Managed Services |
-12 | % | -9 | % | -7 | % | -2 | % | -1 | % | -2 | % | -2 | % | -1 | % | ||||||||||||||||
Emerging Business and Other |
-4 | % | -6 | % | -8 | % | -11 | % | -19 | % | -18 | % | -7 | % | 6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
2 | % | 1 | % | 2 | % | 2 | % | 8 | % | 9 | % | 11 | % | 13 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
Gross income by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
21,430 | 19,375 | 16,022 | 15,586 | 18,265 | 16,327 | 15,670 | 14,455 | ||||||||||||||||||||||||
Digital Services |
5,183 | 3,787 | 3,738 | 2,929 | 4,898 | 3,749 | 3,311 | 2,878 | ||||||||||||||||||||||||
Managed Services |
1,031 | 1,093 | 955 | 933 | 1,039 | 1,136 | 779 | 1,036 | ||||||||||||||||||||||||
Emerging Business and Other |
613 | 507 | 202 | 340 | 232 | 328 | 311 | 410 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
28,257 | 24,762 | 20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
72,413 | 50,983 | 31,608 | 15,586 | 64,717 | 46,452 | 30,125 | 14,455 | ||||||||||||||||||||||||
Digital Services |
15,637 | 10,454 | 6,667 | 2,929 | 14,836 | 9,938 | 6,189 | 2,878 | ||||||||||||||||||||||||
Managed Services |
4,012 | 2,981 | 1,888 | 933 | 3,990 | 2,951 | 1,815 | 1,036 | ||||||||||||||||||||||||
Emerging Business and Other |
1,662 | 1,049 | 542 | 340 | 1,281 | 1,049 | 721 | 410 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
93,724 | 65,467 | 40,705 | 19,788 | 84,824 | 60,390 | 38,850 | 18,779 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
10,604 | 9,165 | 5,255 | 5,827 | 6,399 | 7,216 | 5,680 | 5,472 | ||||||||||||||||||||||||
Digital Services |
499 | -591 | -697 | -1,417 | -164 | -660 | -1,405 | -1,798 | ||||||||||||||||||||||||
Managed Services |
401 | 491 | 263 | 408 | 292 | 562 | 203 | 1,252 | ||||||||||||||||||||||||
Emerging Business and Other |
-496 | -422 | -970 | -512 | -402 | -11,314 | -739 | -30 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
11,008 | 8,643 | 3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
30,851 | 20,247 | 11,082 | 5,827 | 24,767 | 18,368 | 11,152 | 5,472 | ||||||||||||||||||||||||
Digital Services |
-2,206 | -2,705 | -2,114 | -1,417 | -4,027 | -3,863 | -3,203 | -1,798 | ||||||||||||||||||||||||
Managed Services |
1,563 | 1,162 | 671 | 408 | 2,309 | 2,017 | 1,455 | 1,252 | ||||||||||||||||||||||||
Emerging Business and Other |
-2,400 | -1,904 | -1,482 | -512 | -12,485 | -12,083 | -769 | -30 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
27,808 | 16,800 | 8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
Net sales by market area by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
South East Asia, Oceania and India |
9,748 | 7,801 | 6,582 | 5,917 | 9,231 | 7,432 | 6,965 | 6,148 | ||||||||||||||||||||||||
North East Asia |
12,823 | 8,814 | 7,790 | 3,907 | 9,704 | 6,356 | 6,516 | 3,824 | ||||||||||||||||||||||||
North America |
19,101 | 18,356 | 18,407 | 17,911 | 17,368 | 18,985 | 17,699 | 16,171 | ||||||||||||||||||||||||
Europe and Latin America 1) 2) |
17,125 | 13,318 | 13,061 | 12,241 | 17,489 | 14,308 | 14,085 | 13,124 | ||||||||||||||||||||||||
Middle East and Africa |
6,518 | 5,520 | 5,431 | 5,829 | 8,426 | 6,046 | 5,641 | 5,412 | ||||||||||||||||||||||||
Other 1) 2) |
4,275 | 3,663 | 4,307 | 3,945 | 4,155 | 4,000 | 3,904 | 4,227 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1) Of which in Sweden |
363 | 249 | 284 | 227 | 235 | 13 | 149 | 192 | ||||||||||||||||||||||||
2) Of which in EU* |
8,874 | 7,090 | 7,278 | 6,259 | 10,572 | 8,815 | 8,385 | 7,957 | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Sequential change, percent |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
South East Asia, Oceania and India |
25 | % | 19 | % | 11 | % | -36 | % | 24 | % | 7 | % | 13 | % | -25 | % | ||||||||||||||||
North East Asia |
45 | % | 13 | % | 99 | % | -60 | % | 53 | % | -2 | % | 70 | % | -54 | % | ||||||||||||||||
North America |
4 | % | 0 | % | 3 | % | 3 | % | -9 | % | 7 | % | 9 | % | -10 | % | ||||||||||||||||
Europe and Latin America 1) 2) |
29 | % | 2 | % | 7 | % | -30 | % | 22 | % | 2 | % | 7 | % | -27 | % | ||||||||||||||||
Middle East and Africa |
18 | % | 2 | % | -7 | % | -31 | % | 39 | % | 7 | % | 4 | % | -21 | % | ||||||||||||||||
Other 1) 2) |
17 | % | -15 | % | 9 | % | -5 | % | 4 | % | 2 | % | -8 | % | -5 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
21 | % | 3 | % | 12 | % | -25 | % | 16 | % | 4 | % | 12 | % | -23 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1) Of which in Sweden |
46 | % | -12 | % | 25 | % | -3 | % | 1708 | % | -91 | % | -22 | % | -49 | % | ||||||||||||||||
2) Of which in EU* |
25 | % | -3 | % | 16 | % | -29 | % | 20 | % | 5 | % | 5 | % | -23 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year over year change, percent |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
South East Asia, Oceania and India |
6 | % | 5 | % | -5 | % | -4 | % | 12 | % | -7 | % | 0 | % | -4 | % | ||||||||||||||||
North East Asia |
32 | % | 39 | % | 20 | % | 2 | % | 16 | % | 10 | % | 37 | % | 13 | % | ||||||||||||||||
North America |
10 | % | -3 | % | 4 | % | 11 | % | -4 | % | 27 | % | 23 | % | 43 | % | ||||||||||||||||
Europe and Latin America 1) 2) |
-2 | % | -7 | % | -7 | % | -7 | % | -2 | % | -3 | % | 1 | % | 1 | % | ||||||||||||||||
Middle East and Africa |
-23 | % | -9 | % | -4 | % | 8 | % | 23 | % | 4 | % | -3 | % | -8 | % | ||||||||||||||||
Other 1) 2) |
3 | % | -8 | % | 10 | % | -7 | % | -6 | % | -13 | % | -1 | % | 21 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
5 | % | 1 | % | 1 | % | 2 | % | 4 | % | 6 | % | 10 | % | 13 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1) Of which in Sweden |
54 | % | 1815 | % | 91 | % | 18 | % | -37 | % | -97 | % | -75 | % | -79 | % | ||||||||||||||||
2) Of which in EU* |
1 | % | -4 | % | 5 | % | -4 | % | 2 | % | 4 | % | -3 | % | -7 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
South East Asia, Oceania and India |
30,048 | 20,300 | 12,499 | 5,917 | 29,776 | 20,545 | 13,113 | 6,148 | ||||||||||||||||||||||||
North East Asia |
33,334 | 20,511 | 11,697 | 3,907 | 26,400 | 16,696 | 10,340 | 3,824 | ||||||||||||||||||||||||
North America |
73,775 | 54,674 | 36,318 | 17,911 | 70,223 | 52,855 | 33,870 | 16,171 | ||||||||||||||||||||||||
Europe and Latin America 1) 2) |
55,745 | 38,620 | 25,302 | 12,241 | 59,006 | 41,517 | 27,209 | 13,124 | ||||||||||||||||||||||||
Middle East and Africa |
23,298 | 16,780 | 11,260 | 5,829 | 25,525 | 17,099 | 11,053 | 5,412 | ||||||||||||||||||||||||
Other 1) 2) |
16,190 | 11,915 | 8,252 | 3,945 | 16,286 | 12,131 | 8,131 | 4,227 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1) Of which in Sweden |
1,123 | 760 | 511 | 227 | 589 | 354 | 341 | 192 | ||||||||||||||||||||||||
2) Of which in EU* |
29,501 | 20,627 | 13,537 | 6,259 | 35,729 | 25,157 | 16,342 | 7,957 | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, year over year change, percent |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
South East Asia, Oceania and India |
1 | % | -1 | % | -5 | % | -4 | % | 1 | % | -4 | % | -2 | % | -4 | % | ||||||||||||||||
North East Asia |
26 | % | 23 | % | 13 | % | 2 | % | 18 | % | 20 | % | 27 | % | 13 | % | ||||||||||||||||
North America |
5 | % | 3 | % | 7 | % | 11 | % | 20 | % | 30 | % | 32 | % | 43 | % | ||||||||||||||||
Europe and Latin America 1) 2) |
-6 | % | -7 | % | -7 | % | -7 | % | -1 | % | 0 | % | 1 | % | 1 | % | ||||||||||||||||
Middle East and Africa |
-9 | % | -2 | % | 2 | % | 8 | % | 5 | % | -2 | % | -5 | % | -8 | % | ||||||||||||||||
Other 1) 2) |
-1 | % | -2 | % | 1 | % | -7 | % | -1 | % | 1 | % | 9 | % | 21 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
2 | % | 1 | % | 2 | % | 2 | % | 8 | % | 9 | % | 11 | % | 13 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1) Of which in Sweden |
91 | % | 115 | % | 50 | % | 18 | % | -75 | % | -82 | % | -77 | % | -79 | % | ||||||||||||||||
2) Of which in EU* |
0 | % | -1 | % | 1 | % | -4 | % | -1 | % | -2 | % | -5 | % | -7 | % |
*) | No sales to UK are included as from 2020. |
32 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
Net sales by market area by segment
Q4 2020 | Jan-Dec 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 |
7,227 | 1,394 | 1,119 | 8 | 9,748 | 21,464 | 4,329 | 4,219 | 36 | 30,048 | ||||||||||||||||||||||||||||||
North East Asia |
10,526 | 1,957 | 292 | 48 | 12,823 | 27,120 | 5,124 | 831 | 259 | 33,334 | ||||||||||||||||||||||||||||||
North America |
15,581 | 2,715 | 783 | 22 | 19,101 | 62,199 | 7,979 | 3,529 | 68 | 73,775 | ||||||||||||||||||||||||||||||
Europe and Latin America |
10,183 | 4,209 | 2,632 | 101 | 17,125 | 33,257 | 11,954 | 10,168 | 367 | 55,745 | ||||||||||||||||||||||||||||||
Middle East and Africa |
3,588 | 1,935 | 989 | 6 | 6,518 | 13,281 | 6,144 | 3,854 | 19 | 23,298 | ||||||||||||||||||||||||||||||
Other |
2,261 | 461 | 0 | 1,553 | 4,275 | 8,657 | 1,794 | -1 | 5,739 | 16,190 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
49,366 | 12,671 | 5,815 | 1,738 | 69,590 | 165,978 | 37,324 | 22,600 | 6,488 | 232,390 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share of total |
71 | % | 18 | % | 8 | % | 3 | % | 100 | % | 71 | % | 16 | % | 10 | % | 3 | % | 100 | % |
Q4 2020 | ||||||||||||||||||||
Sequential change, percent |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | |||||||||||||||
South East Asia, Oceania and India |
30 | % | 28 | % | -3 | % | 167 | % | 25 | % | ||||||||||
North East Asia |
42 | % | 73 | % | 78 | % | -45 | % | 45 | % | ||||||||||
North America |
0 | % | 37 | % | 5 | % | 100 | % | 4 | % | ||||||||||
Europe and Latin America |
26 | % | 54 | % | 8 | % | 11 | % | 29 | % | ||||||||||
Middle East and Africa |
15 | % | 37 | % | | 100 | % | 18 | % | |||||||||||
Other |
20 | % | 18 | % | | 12 | % | 17 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
19 | % | 45 | % | 6 | % | 10 | % | 21 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Q4 2020 | Jan-Dec 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 |
6 | % | 2 | % | 7 | % | -53 | % | 6 | % | -2 | % | 7 | % | 10 | % | -37 | % | 1 | % | ||||||||||||||||||||
North East Asia |
43 | % | 1 | % | -13 | % | -45 | % | 32 | % | 33 | % | 5 | % | -19 | % | 46 | % | 26 | % | ||||||||||||||||||||
North America |
18 | % | -8 | % | -34 | % | 38 | % | 10 | % | 11 | % | -17 | % | -24 | % | -29 | % | 5 | % | ||||||||||||||||||||
Europe and Latin America |
2 | % | 3 | % | -21 | % | -7 | % | -2 | % | -2 | % | -5 | % | -16 | % | -9 | % | -6 | % | ||||||||||||||||||||
Middle East and Africa |
-27 | % | -19 | % | -11 | % | -54 | % | -23 | % | -9 | % | -12 | % | -1 | % | -24 | % | -9 | % | ||||||||||||||||||||
Other |
2 | % | 3 | % | | 4 | % | 3 | % | 2 | % | 3 | % | | -5 | % | -1 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
11 | % | -4 | % | -17 | % | 0 | % | 5 | % | 7 | % | -6 | % | -12 | % | -4 | % | 2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 | Jan-Dec | |||||||||||||||
Country, percentage of net sales1) |
2020 | 2019 | 2020 | 2019 | ||||||||||||
United States |
29 | % | 27 | % | 33 | % | 32 | % | ||||||||
China |
8 | % | 8 | % | 8 | % | 7 | % | ||||||||
Japan |
9 | % | 6 | % | 5 | % | 4 | % | ||||||||
Australia |
4 | % | 4 | % | 4 | % | 3 | % | ||||||||
Saudi Arabia |
3 | % | 5 | % | 3 | % | 3 | % |
1) | Based on the full year 2020. |
33 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
IPR licensing revenues by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
2,105 | 1,773 | 2,282 | 2,019 | 2,014 | 1,972 | 1,845 | 2,066 | ||||||||||||||||||||||||
Digital Services |
463 | 389 | 501 | 443 | 443 | 433 | 404 | 454 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
2,568 | 2,162 | 2,783 | 2,462 | 2,457 | 2,405 | 2,249 | 2,520 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
8,179 | 6,074 | 4,301 | 2,019 | 7,897 | 5,883 | 3,911 | 2,066 | ||||||||||||||||||||||||
Digital Services |
1,796 | 1,333 | 944 | 443 | 1,734 | 1,291 | 858 | 454 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
9,975 | 7,407 | 5,245 | 2,462 | 9,631 | 7,174 | 4,769 | 2,520 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Opening balance |
10,922 | 10,603 | 11,060 | 10,923 | 22,007 | 11,358 | 12,033 | 16,008 | ||||||||||||||||||||||||
Additions1) |
1,245 | 1,093 | 2,116 | 793 | 2,438 | 12,774 | 1,423 | 1,401 | ||||||||||||||||||||||||
Utilization/Cash out1) |
-761 | -475 | -2,066 | -673 | -12,529 | -2,151 | -2,084 | -1,676 | ||||||||||||||||||||||||
Of which restructuring |
-332 | -160 | -137 | -186 | -143 | -711 | -378 | -557 | ||||||||||||||||||||||||
Reversal of excess amounts |
-673 | -172 | -192 | -124 | -842 | -128 | -88 | -125 | ||||||||||||||||||||||||
Reclassification, translation difference and other |
-267 | -127 | -315 | 141 | -151 | 154 | 74 | -3,575 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Closing balance |
10,466 | 10,922 | 10,603 | 11,060 | 10,923 | 22,007 | 11,358 | 12,033 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Of which restructuring |
1,200 | 1,659 | 1,594 | 1,202 | 1,095 | 1,099 | 1,743 | 2,059 | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Opening balance |
10,923 | 10,923 | 10,923 | 10,923 | 16,008 | 16,008 | 16,008 | 16,008 | ||||||||||||||||||||||||
Additions |
5,247 | 4,002 | 2,909 | 793 | 7,172 | 15,598 | 2,824 | 1,401 | ||||||||||||||||||||||||
Utilization/Cash out |
-3,975 | -3,214 | -2,739 | -673 | -7,576 | -5,911 | -3,760 | -1,676 | ||||||||||||||||||||||||
Of which restructuring |
-815 | -483 | -323 | -186 | -1,789 | -1,646 | -935 | -557 | ||||||||||||||||||||||||
Reversal of excess amounts |
-1,161 | -488 | -316 | -124 | -1,183 | -341 | -213 | -125 | ||||||||||||||||||||||||
Reclassification, translation difference and other |
-568 | -301 | -174 | 141 | -3,498 | -3,347 | -3,501 | -3,575 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Closing balance |
10,466 | 10,922 | 10,603 | 11,060 | 10,923 | 22,007 | 11,358 | 12,033 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Of which restructuring |
1,200 | 1,659 | 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. |
34 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
There have been no changes to the classification of financial instruments or fair value hierarchy categorization from that presented in the latest 2019 Annual Report. Where Level 2 and Level 3 fair value hierarchies apply, the inputs and valuation methods used remained unchanged. The book values and fair values of financial instruments are as follows:
Dec 31 | Sep 30 | Dec 31 | ||||||||||
SEK million |
2020 | 2020 | 2019 | |||||||||
Financial assets at fair value through profit or loss |
57,781 | 64,402 | 57,040 | |||||||||
Financial assets at fair value through OCI |
42,063 | 38,180 | 43,069 | |||||||||
Financial assets at amortized costs |
4,457 | 4,361 | 4,519 | |||||||||
|
|
|
|
|
|
|||||||
Total financial assets |
104,301 | 106,943 | 104,628 | |||||||||
|
|
|
|
|
|
|||||||
Financial liabilities at fair value through profit or loss |
27,453 | 35,645 | 36,895 | |||||||||
Financial liabilities at amortized costs |
34,927 | 32,397 | 32,199 | |||||||||
|
|
|
|
|
|
|||||||
Total financial liabilities |
62,380 | 68,042 | 69,094 | |||||||||
|
|
|
|
|
|
Financial assets at fair value through profit or loss (FVTPL) are mainly interest bearing securities and cash equivalents, measured under both Level 1 and Level 2 (SEK 51,616 million at Dec 2020, SEK 58,210 million at Sep 2020 and SEK 50,543 million at Dec 2019). Cash equivalents (SEK 23,557 million at Dec 2020, SEK 29,230 million at Sep 2020 and SEK 23,934 million at Dec 2019) are Level 2 instruments valued using inputs such as quoted fixing rates, interest rate swaps, IBOR rates and FX forward rates.
Other FVTPL assets measured under Level 3 hierarchy are customer finance receivables (SEK 3,137 million at Dec 2020, SEK 3,147 million at Sep 2020 and SEK 3,756 million at Dec 2019) and other financial investments (SEK 1,505 million at Dec 2020, SEK 2,557 million at Sep 2020 and SEK 2,600 million at Dec 2019). Movements of customer finance receivables are as follows: additions of SEK 24,765 million, disposals and repayments of SEK 25,069 million and revaluation loss of SEK 66 million.
Financial assets at fair value through OCI consist of trade receivables, measured at gross values less impairment allowance for expected credit losses which is deemed to be equal to their fair values.
Financial liabilities at FVTPL are mainly parent company borrowings (SEK 27,221 million at Dec 2020, SEK 35,024 million at Sep 2020 and SEK 35,899 million at Dec 2019). Some borrowings are valued at quoted market prices (Level 1), whereas the carrying value of other borrowings not traded on the credit market (Level 2) reflects the effect in own credit spreads derived from quoted Credit Default Swap for Investment Grade companies.
Financial assets and liabilities at amortized costs comprise of some cash equivalents, borrowings and trade payables that are deemed to be equal to fair values.
Investments in assets subject to depreciation, amortization, impairment and write-downs
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||||||
Property, plant and equipment |
1,090 | 963 | 1,327 | 1,113 | 1,475 | 1,231 | 1,098 | 1,314 | ||||||||||||||||||||||||
Capitalized development expenses |
177 | 167 | 211 | 262 | 329 | 313 | 446 | 457 | ||||||||||||||||||||||||
IPR, brands and other intangible assets |
124 | | 97 | 1 | 1 | 2 | | 1 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
1,391 | 1,130 | 1,635 | 1,376 | 1,805 | 1,546 | 1,544 | 1,772 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Depreciation, amortization and impairment losses |
||||||||||||||||||||||||||||||||
Property, plant and equipment |
1,186 | 916 | 1,003 | 1,009 | 1,100 | 1,048 | 919 | 880 | ||||||||||||||||||||||||
Capitalized development expenses |
230 | 230 | 272 | 174 | 256 | 330 | 449 | 520 | ||||||||||||||||||||||||
Goodwill, IPR, brands and other intangible assets |
276 | 365 | 258 | 321 | 269 | 229 | 226 | 314 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
1,692 | 1,511 | 1,533 | 1,504 | 1,625 | 1,607 | 1,594 | 1,714 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||||||
Property, plant and equipment |
4,493 | 3,403 | 2,440 | 1,113 | 5,118 | 3,643 | 2,412 | 1,314 | ||||||||||||||||||||||||
Capitalized development expenses |
817 | 640 | 473 | 262 | 1,545 | 1,216 | 903 | 457 | ||||||||||||||||||||||||
IPR, brands and other intangible assets |
222 | 98 | 98 | 1 | 4 | 3 | 1 | 1 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
5,532 | 4,141 | 3,011 | 1,376 | 6,667 | 4,862 | 3,316 | 1,772 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Depreciation, amortization and impairment losses |
||||||||||||||||||||||||||||||||
Property, plant and equipment |
4,114 | 2,928 | 2,012 | 1,009 | 3,947 | 2,847 | 1,799 | 880 | ||||||||||||||||||||||||
Capitalized development expenses |
906 | 676 | 446 | 174 | 1,555 | 1,299 | 969 | 520 | ||||||||||||||||||||||||
Goodwill, IPR, brands and other intangible assets |
1,220 | 944 | 579 | 321 | 1,038 | 769 | 540 | 314 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
6,240 | 4,548 | 3,037 | 1,504 | 6,540 | 4,915 | 3,308 | 1,714 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
Q4 | Jan-Dec | |||||||||||||||
SEK million |
2020 | 2019 | 2020 | 2019 | ||||||||||||
Number of shares and earnings per share |
||||||||||||||||
Number of shares, end of period (million) |
3,334 | 3,334 | 3,334 | 3,334 | ||||||||||||
Of which class A-shares (million) |
262 | 262 | 262 | 262 | ||||||||||||
Of which class B-shares (million) |
3,072 | 3,072 | 3,072 | 3,072 | ||||||||||||
Number of treasury shares, end of period (million) |
6 | 20 | 6 | 20 | ||||||||||||
Number of shares outstanding, basic, end of period (million) |
3,328 | 3,314 | 3,328 | 3,314 | ||||||||||||
Numbers of shares outstanding, diluted, end of period (million) |
3,331 | 3,328 | 3,331 | 3,328 | ||||||||||||
Average number of treasury shares (million) |
6 | 22 | 11 | 28 | ||||||||||||
Average number of shares outstanding, basic (million) |
3,328 | 3,313 | 3,323 | 3,306 | ||||||||||||
Average number of shares outstanding, diluted (million) 1) |
3,331 | 3,326 | 3,326 | 3,320 | ||||||||||||
Earnings (loss) per share, basic (SEK) 2) |
2.26 | 1.34 | 5.26 | 0.67 | ||||||||||||
Earnings (loss) per share, diluted (SEK) 1) |
2.26 | 1.33 | 5.26 | 0.67 | ||||||||||||
Exchange rates used in the consolidation |
||||||||||||||||
SEK/EUR - closing rate |
| | 10.06 | 10.43 | ||||||||||||
SEK/USD - closing rate |
| | 8.19 | 9.32 | ||||||||||||
Other |
||||||||||||||||
Assets pledged as collateral |
| | 6,808 | 5,901 | ||||||||||||
Contingent liabilities |
| | 1,198 | 1,527 |
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. |
2020 | 2019 | |||||||||||||||||||||||||||||||
End of period |
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||||||||||
South East Asia, Oceania and India |
25,869 | 25,633 | 25,265 | 24,942 | 24,559 | 24,322 | 23,942 | 24,051 | ||||||||||||||||||||||||
North East Asia |
13,944 | 13,955 | 13,965 | 13,786 | 13,783 | 13,608 | 13,334 | 13,169 | ||||||||||||||||||||||||
North America |
10,175 | 9,537 | 9,785 | 9,718 | 9,643 | 9,487 | 9,342 | 9,246 | ||||||||||||||||||||||||
Europe and Latin America 1) |
46,580 | 46,495 | 46,521 | 46,402 | 47,135 | 44,150 | 43,846 | 43,833 | ||||||||||||||||||||||||
Middle East and Africa |
4,256 | 4,206 | 4,264 | 4,247 | 4,297 | 4,320 | 4,292 | 4,281 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
100,824 | 99,826 | 99,800 | 99,095 | 99,417 | 95,887 | 94,756 | 94,580 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1) Of which Sweden |
13,173 | 13,046 | 12,884 | 12,746 | 12,730 | 12,679 | 12,549 | 12,455 |
Preliminary allocation of purchase consideration
Acquisition of Cradlepoint |
||||
SEK billion |
||||
Total consideration incl. cash |
9.5 | |||
|
|
|||
Net assets acquired |
||||
Cash and cash equivalents |
0.3 | |||
Inventory |
0.6 | |||
Other current assets |
0.8 | |||
Other non-current assets |
0.2 | |||
Intangible assets |
3.3 | |||
Contract liabilities |
-0.8 | |||
Other current liabilities |
-0.6 | |||
Other non-current liabilities |
-1.3 | |||
|
|
|||
Total identifiable net assets |
2.4 | |||
|
|
|||
Goodwill |
7.1 | |||
|
|
|||
Total |
9.5 | |||
|
|
On November 1, 2020, Ericsson acquired 100 percent of the shares in Cradlepoint for SEK 9.5 billion in an all-cash transaction. Cradlepoint is the US market leader in Wireless WAN Edge 4G and 5G solutions for the enterprise market. Approximately 700 employees joined Ericsson as part of the transaction. Balances to facilitate the Purchase price allocation are preliminary.
36 Ericsson | Fourth quarter and full-year report 2020 | Accounting policies and Explanatory notes |
Alternative performance measures (unaudited)
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 |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Reported net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Acquired business |
-206 | -415 | -422 | -319 | -96 | | | | ||||||||||||||||||||||||
Net FX impact |
5,472 | 4,304 | -326 | -1,654 | -2,748 | -2,457 | -2,538 | -2,932 | ||||||||||||||||||||||||
Comparable net sales, excluding FX impact |
74,856 | 61,361 | 54,830 | 47,777 | 63,529 | 54,670 | 52,272 | 45,974 | ||||||||||||||||||||||||
Comparable quarter net sales adj. for acq/div business 1) |
66,373 | 57,150 | 54,810 | 48,798 | 63,037 | 53,077 | 49,055 | 42,961 | ||||||||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
13 | % | 7 | % | 0 | % | -2 | % | 1 | % | 3 | % | 7 | % | 7 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, year over year change |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Reported net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
Acquired business |
-1,362 | -1,156 | -741 | -319 | -96 | | | | ||||||||||||||||||||||||
Net FX impact |
7,796 | 2,324 | -1,980 | -1,654 | -10,675 | -7,927 | -5,470 | -2,932 | ||||||||||||||||||||||||
Comparable net sales, excluding FX impact |
238,824 | 163,968 | 102,607 | 47,777 | 216,445 | 152,916 | 98,246 | 45,974 | ||||||||||||||||||||||||
Comparable quarter net sales adj. for acq/div business 1) |
227,132 | 160,758 | 103,608 | 48,798 | 208,130 | 145,093 | 92,016 | 42,961 | ||||||||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
5 | % | 2 | % | -1 | % | -2 | % | 4 | % | 5 | % | 7 | % | 7 | % |
1) | Adjusted for divestment of MediaKind in February 2019, acquisition of Kathrein in October 2019 and acquisition of Cradlepoint in November 2020. |
37 Ericsson | Fourth quarter and full-year 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 |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Gross income |
28,257 | 24,762 | 20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Gross margin (%) |
40.6 | % | 43.1 | % | 37.6 | % | 39.8 | % | 36.8 | % | 37.7 | % | 36.6 | % | 38.4 | % | ||||||||||||||||
Gross income |
28,257 | 24,762 | 20,917 | 19,788 | 24,434 | 21,540 | 20,071 | 18,779 | ||||||||||||||||||||||||
Restructuring charges included in cost of sales |
5 | 73 | 312 | 335 | 218 | 28 | 26 | 65 | ||||||||||||||||||||||||
Gross income excluding restructuring charges |
28,262 | 24,835 | 21,229 | 20,123 | 24,652 | 21,568 | 20,097 | 18,844 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Gross margin excluding restructuring charges (%) |
40.6 | % | 43.2 | % | 38.2 | % | 40.4 | % | 37.1 | % | 37.8 | % | 36.7 | % | 38.5 | % | ||||||||||||||||
Operating expenses |
-17,571 | -16,121 | -17,045 | -15,543 | -19,028 | -14,217 | -16,331 | -14,639 | ||||||||||||||||||||||||
Restructuring charges included in R&D expenses |
-21 | 244 | 227 | -39 | 79 | 98 | 49 | 118 | ||||||||||||||||||||||||
Restructuring charges included in selling and administrative expenses |
8 | 13 | 144 | 5 | 30 | 21 | 43 | 23 | ||||||||||||||||||||||||
Operating expenses excluding restructuring charges |
-17,584 | -15,864 | -16,674 | -15,577 | -18,919 | -14,098 | -16,239 | -14,498 | ||||||||||||||||||||||||
Operating income (loss) |
11,008 | 8,643 | 3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Operating margin (%) |
15.8 | % | 15.0 | % | 6.9 | % | 8.7 | % | 9.2 | % | -7.3 | % | 6.8 | % | 10.0 | % | ||||||||||||||||
Operating income (loss) |
11,008 | 8,643 | 3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||||||||
Total restructuring charges |
-8 | 330 | 683 | 301 | 327 | 147 | 118 | 206 | ||||||||||||||||||||||||
Operating income (loss) excluding restructuring charges |
11,000 | 8,973 | 4,534 | 4,607 | 6,452 | -4,049 | 3,857 | 5,102 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Operating margin excluding restructuring charges (%) |
15.8 | % | 15.6 | % | 8.2 | % | 9.3 | % | 9.7 | % | -7.1 | % | 7.0 | % | 10.4 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Gross income |
93,724 | 65,467 | 40,705 | 19,788 | 84,824 | 60,390 | 38,850 | 18,779 | ||||||||||||||||||||||||
Net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
Gross margin (%) |
40.3 | % | 40.2 | % | 38.6 | % | 39.8 | % | 37.3 | % | 37.5 | % | 37.5 | % | 38.4 | % | ||||||||||||||||
Gross income |
93,724 | 65,467 | 40,705 | 19,788 | 84,824 | 60,390 | 38,850 | 18,779 | ||||||||||||||||||||||||
Restructuring charges included in cost of sales |
725 | 720 | 647 | 335 | 337 | 119 | 91 | 65 | ||||||||||||||||||||||||
Gross income excluding restructuring charges |
94,449 | 66,187 | 41,352 | 20,123 | 85,161 | 60,509 | 38,941 | 18,844 | ||||||||||||||||||||||||
Net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
Gross margin excluding restructuring charges (%) |
40.6 | % | 40.7 | % | 39.3 | % | 40.4 | % | 37.5 | % | 37.6 | % | 37.5 | % | 38.5 | % | ||||||||||||||||
Operating expenses |
-66,280 | -48,709 | -32,588 | -15,543 | -64,215 | -45,187 | -30,970 | -14,639 | ||||||||||||||||||||||||
Restructuring charges included in R&D expenses |
411 | 432 | 188 | -39 | 344 | 265 | 167 | 118 | ||||||||||||||||||||||||
Restructuring charges included in selling and administrative expenses |
170 | 162 | 149 | 5 | 117 | 87 | 66 | 23 | ||||||||||||||||||||||||
Operating expenses excluding restructuring charges |
-65,699 | -48,115 | -32,251 | -15,577 | -63,754 | -44,835 | -30,737 | -14,498 | ||||||||||||||||||||||||
Operating income (loss) |
27,808 | 16,800 | 8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||||||||
Net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
Operating margin (%) |
12.0 | % | 10.3 | % | 7.7 | % | 8.7 | % | 4.6 | % | 2.8 | % | 8.3 | % | 10.0 | % | ||||||||||||||||
Operating income (loss) |
27,808 | 16,800 | 8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||||||||
Total restructuring charges |
1,306 | 1,314 | 984 | 301 | 798 | 471 | 324 | 206 | ||||||||||||||||||||||||
Operating income (loss) excluding restructuring charges |
29,114 | 18,114 | 9,141 | 4,607 | 11,362 | 4,910 | 8,959 | 5,102 | ||||||||||||||||||||||||
Net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
Operating margin excluding restructuring charges (%) |
12.5 | % | 11.1 | % | 8.7 | % | 9.3 | % | 5.0 | % | 3.1 | % | 8.6 | % | 10.4 | % |
38 Ericsson | Fourth quarter and full-year 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 |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Net income (loss) |
7,192 | 5,566 | 2,585 | 2,280 | 4,484 | -6,894 | 1,847 | 2,403 | ||||||||||||||||||||||||
Taxes |
3,721 | 3,186 | 1,558 | 1,124 | 1,570 | 2,013 | 1,451 | 1,888 | ||||||||||||||||||||||||
Financial income and expenses, net |
95 | -109 | -292 | 902 | 71 | 685 | 441 | 605 | ||||||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
276 | 365 | 258 | 321 | 269 | 229 | 226 | 314 | ||||||||||||||||||||||||
EBITA |
11,284 | 9,008 | 4,109 | 4,627 | 6,394 | -3,967 | 3,965 | 5,210 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
EBITA margin (%) |
16.2 | % | 15.7 | % | 7.4 | % | 9.3 | % | 9.6 | % | -6.9 | % | 7.2 | % | 10.7 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Net income (loss) |
17,623 | 10,431 | 4,865 | 2,280 | 1,840 | -2,644 | 4,250 | 2,403 | ||||||||||||||||||||||||
Taxes |
9,589 | 5,868 | 2,682 | 1,124 | 6,922 | 5,352 | 3,339 | 1,888 | ||||||||||||||||||||||||
Financial income and expenses, net |
596 | 501 | 610 | 902 | 1,802 | 1,731 | 1,046 | 605 | ||||||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
1,220 | 944 | 579 | 321 | 1,038 | 769 | 540 | 314 | ||||||||||||||||||||||||
EBITA |
29,028 | 17,744 | 8,736 | 4,627 | 11,602 | 5,208 | 9,175 | 5,210 | ||||||||||||||||||||||||
Net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
EBITA margin (%) |
12.5 | % | 10.9 | % | 8.3 | % | 9.3 | % | 5.1 | % | 3.2 | % | 8.8 | % | 10.7 | % |
Rolling four quarters of net sales and operating margin excluding restructuring charges (%)
Net sales, operating margin and restructuring charges as a sum of last four quarters.
2020 | 2019 | |||||||||||||||||||||||||||||||
Rolling four quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Net sales |
232,390 | 229,173 | 228,828 | 228,060 | 227,216 | 224,652 | 221,335 | 216,333 | ||||||||||||||||||||||||
Operating income (loss) |
27,808 | 22,925 | 10,086 | 9,974 | 10,564 | 2,587 | 10,024 | 6,450 | ||||||||||||||||||||||||
Restructuring charges |
1,306 | 1,641 | 1,458 | 893 | 798 | 4,882 | 5,287 | 7,049 | ||||||||||||||||||||||||
Operating income (loss) excl. restr. charges |
29,114 | 24,566 | 11,544 | 10,867 | 11,362 | 7,469 | 15,311 | 13,499 | ||||||||||||||||||||||||
Operating margin excl. restr. charges (%) |
12.5 | % | 10.7 | % | 5.0 | % | 4.8 | % | 5.0 | % | 3.3 | % | 6.9 | % | 6.2 | % |
39 Ericsson | Fourth quarter and full-year 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 |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Cash and cash equivalents |
43,612 | 48,774 | 45,655 | 48,347 | 45,079 | 51,183 | 45,498 | 45,453 | ||||||||||||||||||||||||
+ Interest-bearing securities, current |
6,820 | 5,552 | 5,739 | 7,834 | 6,759 | 5,866 | 6,367 | 3,183 | ||||||||||||||||||||||||
+ Interest-bearing securities, non-current |
21,613 | 23,898 | 24,025 | 23,335 | 20,354 | 19,157 | 17,091 | 23,022 | ||||||||||||||||||||||||
Gross cash, end of period |
72,045 | 78,224 | 75,419 | 79,516 | 72,192 | 76,206 | 68,956 | 71,658 | ||||||||||||||||||||||||
-Borrowings, current |
7,942 | 14,587 | 15,290 | 17,759 | 9,439 | 1,622 | 2,160 | 3,015 | ||||||||||||||||||||||||
-Borrowings, non-current |
22,218 | 22,132 | 22,581 | 23,381 | 28,257 | 37,153 | 33,040 | 32,533 | ||||||||||||||||||||||||
Net cash, end of period |
41,885 | 41,505 | 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 |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Total assets |
271,530 | 277,187 | 276,778 | 292,307 | 276,383 | 288,531 | 280,447 | 283,958 | ||||||||||||||||||||||||
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Non-interest-bearing provisions and liabilities |
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Provisions, non-current |
2,886 | 2,378 | 2,240 | 2,703 | 2,679 | 2,308 | 2,646 | 2,670 | ||||||||||||||||||||||||
Deferred tax liabilities |
1,089 | 1,102 | 1,164 | 1,060 | 1,224 | 857 | 1,178 | 792 | ||||||||||||||||||||||||
Other non-current liabilities |
1,383 | 1,759 | 1,813 | 2,178 | 2,114 | 2,163 | 2,160 | 2,118 | ||||||||||||||||||||||||
Provisions, current |
7,580 | 8,544 | 8,363 | 8,357 | 8,244 | 19,699 | 8,712 | 9,363 | ||||||||||||||||||||||||
Contract liabilities |
26,440 | 29,393 | 31,532 | 34,265 | 29,041 | 34,499 | 37,264 | 38,605 | ||||||||||||||||||||||||
Trade payables |
31,988 | 30,704 | 32,182 | 29,840 | 30,403 | 30,672 | 31,388 | 30,842 | ||||||||||||||||||||||||
Other current liabilities |
38,174 | 37,905 | 34,834 | 40,521 | 37,405 | 34,624 | 33,351 | 38,528 | ||||||||||||||||||||||||
Capital employed |
161,990 | 165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 |
Annualized net sales divided by average capital employed.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Net sales |
69,590 | 57,472 | 55,578 | 49,750 | 66,373 | 57,127 | 54,810 | 48,906 | ||||||||||||||||||||||||
Annualized net sales |
278,360 | 229,888 | 222,312 | 199,000 | 265,492 | 228,508 | 219,240 | 195,624 | ||||||||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||||||||||
Capital employed at beginning of period |
165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | 149,615 | ||||||||||||||||||||||||
Capital employed at end of period |
161,990 | 165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||||||||
Average capital employed |
163,696 | 165,026 | 169,017 | 169,328 | 164,491 | 163,729 | 162,394 | 155,328 | ||||||||||||||||||||||||
Capital turnover (times) |
1.7 | 1.4 | 1.3 | 1.2 | 1.6 | 1.4 | 1.4 | 1.3 | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Net sales |
232,390 | 162,800 | 105,328 | 49,750 | 227,216 | 160,843 | 103,716 | 48,906 | ||||||||||||||||||||||||
Annualized net sales |
232,390 | 217,067 | 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 | 165,273 | 165,273 | 149,615 | 149,615 | 149,615 | 149,615 | ||||||||||||||||||||||||
Capital employed at end of period |
161,990 | 165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||||||||
Average capital employed |
163,632 | 165,338 | 164,962 | 169,328 | 157,444 | 156,662 | 156,682 | 155,328 | ||||||||||||||||||||||||
Capital turnover (times) |
1.4 | 1.3 | 1.3 | 1.2 | 1.4 | 1.4 | 1.3 | 1.3 |
40 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
The annualized total of operating income (loss) as a percentage of average capital employed.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Operating income (loss) |
11,008 | 8,643 | 3,851 | 4,306 | 6,125 | -4,196 | 3,739 | 4,896 | ||||||||||||||||||||||||
Annualized operating income (loss) |
44,032 | 34,572 | 15,404 | 17,224 | 24,500 | -16,784 | 14,956 | 19,584 | ||||||||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||||||||||
Capital employed at beginning of period |
165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | 149,615 | ||||||||||||||||||||||||
Capital employed at end of period |
161,990 | 165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||||||||
Average capital employed |
163,696 | 165,026 | 169,017 | 169,328 | 164,491 | 163,729 | 162,394 | 155,328 | ||||||||||||||||||||||||
Return on capital employed (%) |
26.9 | % | 20.9 | % | 9.1 | % | 10.2 | % | 14.9 | % | -10.3 | % | 9.2 | % | 12.6 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Operating income (loss) |
27,808 | 16,800 | 8,157 | 4,306 | 10,564 | 4,439 | 8,635 | 4,896 | ||||||||||||||||||||||||
Annualized operating income (loss) |
27,808 | 22,400 | 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 | 165,273 | 165,273 | 149,615 | 149,615 | 149,615 | 149,615 | ||||||||||||||||||||||||
Capital employed at end of period |
161,990 | 165,402 | 164,650 | 173,383 | 165,273 | 163,709 | 163,748 | 161,040 | ||||||||||||||||||||||||
Average capital employed |
163,632 | 165,338 | 164,962 | 169,328 | 157,444 | 156,662 | 156,682 | 155,328 | ||||||||||||||||||||||||
Return on capital employed (%) |
17.0 | % | 13.5 | % | 9.9 | % | 10.2 | % | 6.7 | % | 3.8 | % | 11.0 | % | 12.6 | % |
Equity expressed as a percentage of total assets.
2020 | 2019 | |||||||||||||||||||||||||||||||
SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Total equity |
85,177 | 82,485 | 78,472 | 79,113 | 81,878 | 77,475 | 84,533 | 84,532 | ||||||||||||||||||||||||
Total assets |
271,530 | 277,187 | 276,778 | 292,307 | 276,383 | 288,531 | 280,447 | 283,958 | ||||||||||||||||||||||||
Equity ratio (%) |
31.4 | % | 29.8 | % | 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.
Annualization factor of four is used for isolated quarter.
Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Net income (loss) attributable to owners of the Parent Company |
7,522 | 5,353 | 2,452 | 2,156 | 4,430 | -6,229 | 1,705 | 2,317 | ||||||||||||||||||||||||
Annualized |
30,088 | 21,412 | 9,808 | 8,624 | 17,720 | -24,916 | 6,820 | 9,268 | ||||||||||||||||||||||||
Average stockholders equity |
||||||||||||||||||||||||||||||||
Stockholders equity, beginning of period |
82,830 | 79,005 | 79,841 | 82,559 | 78,200 | 84,488 | 84,619 | 86,978 | ||||||||||||||||||||||||
Stockholders equity, end of period |
86,674 | 82,830 | 79,005 | 79,841 | 82,559 | 78,200 | 84,488 | 84,619 | ||||||||||||||||||||||||
Average stockholders equity |
84,752 | 80,918 | 79,423 | 81,200 | 80,380 | 81,344 | 84,554 | 85,799 | ||||||||||||||||||||||||
Return on equity (%) |
35.5 | % | 26.5 | % | 12.3 | % | 10.6 | % | 22.0 | % | -30.6 | % | 8.1 | % | 10.8 | % | ||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Net income (loss) attributable to owners of the Parent Company |
17,483 | 9,961 | 4,608 | 2,156 | 2,223 | -2,207 | 4,022 | 2,317 | ||||||||||||||||||||||||
Annualized |
17,483 | 13,281 | 9,216 | 8,624 | 2,223 | -2,943 | 8,044 | 9,268 | ||||||||||||||||||||||||
Average stockholders equity |
||||||||||||||||||||||||||||||||
Stockholders equity, beginning of period |
82,559 | 82,559 | 82,559 | 82,559 | 86,978 | 86,978 | 86,978 | 86,978 | ||||||||||||||||||||||||
Stockholders equity, end of period |
86,674 | 82,830 | 79,005 | 79,841 | 82,559 | 78,200 | 84,488 | 84,619 | ||||||||||||||||||||||||
Average stockholders equity |
84,617 | 82,695 | 80,782 | 81,200 | 84,769 | 82,589 | 85,733 | 85,799 | ||||||||||||||||||||||||
Return on equity (%) |
20.7 | % | 16.1 | % | 11.4 | % | 10.6 | % | 2.6 | % | -3.6 | % | 9.4 | % | 10.8 | % |
41 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
Adjusted earnings (loss) per share (non-IFRS)
Adjusted earnings (loss) per share, diluted, excluding amortizations and write-down of acquired intangible assets and excluding restructuring charges.
The APM has been renamed. It was earlier referred to as Earnings (loss) per share (non-IFRS).
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Earnings (loss) per share, diluted |
2.26 | 1.61 | 0.74 | 0.65 | 1.33 | -1.89 | 0.51 | 0.70 | ||||||||||||||||||||||||
Restructuring charges |
0.01 | 0.08 | 0.14 | 0.07 | 0.07 | 0.04 | 0.02 | 0.05 | ||||||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
0.06 | 0.08 | 0.06 | 0.07 | 0.06 | 0.05 | 0.06 | 0.05 | ||||||||||||||||||||||||
Adjusted earnings (loss) per share (non-IRFS) |
2.33 | 1.77 | 0.94 | 0.79 | 1.46 | -1.80 | 0.59 | 0.80 | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Earnings (loss) per share, diluted |
5.26 | 3.00 | 1.39 | 0.65 | 0.67 | -0.67 | 1.21 | 0.70 | ||||||||||||||||||||||||
Restructuring charges |
0.30 | 0.29 | 0.21 | 0.07 | 0.18 | 0.11 | 0.07 | 0.05 | ||||||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
0.27 | 0.21 | 0.13 | 0.07 | 0.22 | 0.16 | 0.11 | 0.05 | ||||||||||||||||||||||||
Adjusted earnings (loss) per share (non-IRFS) |
5.83 | 3.50 | 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 |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Cash flow from operating activities |
13,903 | 5,279 | 5,449 | 4,302 | 496 | 6,989 | 3,623 | 5,765 | ||||||||||||||||||||||||
Net capital expenditures and other investments (excl M&A) |
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Investments in property, plant and equipment |
-1,090 | -963 | -1,327 | -1,113 | -1,475 | -1,231 | -1,098 | -1,314 | ||||||||||||||||||||||||
Sales of property, plant and equipment |
104 | 55 | 69 | 26 | 206 | 122 | 184 | 232 | ||||||||||||||||||||||||
Product development |
-177 | -167 | -211 | -262 | -329 | -313 | -446 | -457 | ||||||||||||||||||||||||
Other investing activities |
668 | 301 | -126 | -42 | -74 | -56 | -36 | -165 | ||||||||||||||||||||||||
Repayment of lease liabilities |
-636 | -567 | -618 | -596 | -711 | -1,052 | -623 | -604 | ||||||||||||||||||||||||
Free cash flow before M&A |
12,772 | 3,938 | 3,236 | 2,315 | -1,887 | 4,459 | 1,604 | 3,457 | ||||||||||||||||||||||||
Acquisitions/divestments of subs and other operations, net |
-9,256 | -89 | -45 | -208 | -1,341 | -466 | 3 | 299 | ||||||||||||||||||||||||
Free cash flow |
3,516 | 3,849 | 3,191 | 2,107 | -3,228 | 3,993 | 1,607 | 3,756 | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Cash flow from operating activities |
28,933 | 15,030 | 9,751 | 4,302 | 16,873 | 16,377 | 9,388 | 5,765 | ||||||||||||||||||||||||
Net capital expenditures and other investments (excl M&A) |
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Investments in property, plant and equipment |
-4,493 | -3,403 | -2,440 | -1,113 | -5,118 | -3,643 | -2,412 | -1,314 | ||||||||||||||||||||||||
Sales of property, plant and equipment |
254 | 150 | 95 | 26 | 744 | 538 | 416 | 232 | ||||||||||||||||||||||||
Product development |
-817 | -640 | -473 | -262 | -1,545 | -1,216 | -903 | -457 | ||||||||||||||||||||||||
Other investing activities |
801 | 133 | -168 | -42 | -331 | -257 | -201 | -165 | ||||||||||||||||||||||||
Repayment of lease liabilities |
-2,417 | -1,781 | -1,214 | -596 | -2,990 | -2,279 | -1,227 | -604 | ||||||||||||||||||||||||
Free cash flow before M&A |
22,261 | 9,489 | 5,551 | 2,315 | 7,633 | 9,520 | 5,061 | 3,457 | ||||||||||||||||||||||||
Acquisitions/divestments of subs and other operations, net |
-9,598 | -342 | -253 | -208 | -1,505 | -164 | 302 | 299 | ||||||||||||||||||||||||
Free cash flow |
12,663 | 9,147 | 5,298 | 2,107 | 6,128 | 9,356 | 5,363 | 3,756 |
42 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
Sales growth by segment adjusted for comparable units and currency
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarter, year over year change, percent |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks 1) |
20 | % | 13 | % | 4 | % | 0 | % | 2 | % | 4 | % | 11 | % | 10 | % | ||||||||||||||||
Digital Services |
3 | % | -5 | % | -5 | % | -9 | % | -3 | % | 5 | % | -3 | % | 0 | % | ||||||||||||||||
Managed Services |
-12 | % | -9 | % | -12 | % | -5 | % | -1 | % | -5 | % | -6 | % | -5 | % | ||||||||||||||||
Emerging Business and Other 2) |
-4 | % | 2 | % | -6 | % | -8 | % | 9 | % | -7 | % | 24 | % | 38 | % | ||||||||||||||||
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Total 1) 2) |
13 | % | 7 | % | 0 | % | -2 | % | 1 | % | 3 | % | 7 | % | 7 | % | ||||||||||||||||
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2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, year over year change, percent |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks 1) |
10 | % | 6 | % | 2 | % | 0 | % | 6 | % | 8 | % | 11 | % | 10 | % | ||||||||||||||||
Digital Services |
-3 | % | -6 | % | -7 | % | -9 | % | -1 | % | 1 | % | -2 | % | 0 | % | ||||||||||||||||
Managed Services |
-10 | % | -9 | % | -9 | % | -5 | % | -4 | % | -5 | % | -6 | % | -5 | % | ||||||||||||||||
Emerging Business and Other 2) |
-4 | % | -4 | % | -7 | % | -8 | % | 14 | % | 15 | % | 30 | % | 38 | % | ||||||||||||||||
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Total 1) 2) |
5 | % | 2 | % | -1 | % | -2 | % | 4 | % | 5 | % | 7 | % | 7 | % | ||||||||||||||||
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1) | Adjusted for Kathrein acquisition in October 2019. |
2) | Adjusted for MediaKind divestment in February 2019. |
Gross margin by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
43.4 | % | 46.5 | % | 40.2 | % | 44.4 | % | 41.1 | % | 41.6 | % | 41.4 | % | 43.2 | % | ||||||||||||||||
Digital Services |
40.9 | % | 43.4 | % | 43.6 | % | 39.9 | % | 37.2 | % | 37.9 | % | 36.8 | % | 36.8 | % | ||||||||||||||||
Managed Services |
17.7 | % | 19.9 | % | 17.1 | % | 16.3 | % | 14.8 | % | 17.9 | % | 12.3 | % | 17.7 | % | ||||||||||||||||
Emerging Business and Other |
35.3 | % | 32.0 | % | 12.6 | % | 21.7 | % | 13.4 | % | 20.2 | % | 18.5 | % | 23.4 | % | ||||||||||||||||
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Total |
40.6 | % | 43.1 | % | 37.6 | % | 39.8 | % | 36.8 | % | 37.7 | % | 36.6 | % | 38.4 | % | ||||||||||||||||
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|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
43.6 | % | 43.7 | % | 42.2 | % | 44.4 | % | 41.8 | % | 42.0 | % | 42.3 | % | 43.2 | % | ||||||||||||||||
Digital Services |
41.9 | % | 42.4 | % | 41.9 | % | 39.9 | % | 37.2 | % | 37.2 | % | 36.8 | % | 36.8 | % | ||||||||||||||||
Managed Services |
17.8 | % | 17.8 | % | 16.7 | % | 16.3 | % | 15.6 | % | 15.9 | % | 14.9 | % | 17.7 | % | ||||||||||||||||
Emerging Business and Other |
25.6 | % | 22.1 | % | 17.1 | % | 21.7 | % | 18.9 | % | 20.8 | % | 21.0 | % | 23.4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
40.3 | % | 40.2 | % | 38.6 | % | 39.8 | % | 37.3 | % | 37.5 | % | 37.5 | % | 38.4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
21.5 | % | 22.0 | % | 13.2 | % | 16.6 | % | 14.4 | % | 18.4 | % | 15.0 | % | 16.3 | % | ||||||||||||||||
Digital Services |
3.9 | % | -6.8 | % | -8.1 | % | -19.3 | % | -1.2 | % | -6.7 | % | -15.6 | % | -23.0 | % | ||||||||||||||||
Managed Services |
6.9 | % | 8.9 | % | 4.7 | % | 7.1 | % | 4.2 | % | 8.8 | % | 3.2 | % | 21.4 | % | ||||||||||||||||
Emerging Business and Other |
-28.5 | % | -26.7 | % | -60.5 | % | -32.7 | % | -23.2 | % | -695.8 | % | -44.1 | % | -1.7 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
15.8 | % | 15.0 | % | 6.9 | % | 8.7 | % | 9.2 | % | -7.3 | % | 6.8 | % | 10.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
18.6 | % | 17.4 | % | 14.8 | % | 16.6 | % | 16.0 | % | 16.6 | % | 15.6 | % | 16.3 | % | ||||||||||||||||
Digital Services |
-5.9 | % | -11.0 | % | -13.3 | % | -19.3 | % | -10.1 | % | -14.5 | % | -19.1 | % | -23.0 | % | ||||||||||||||||
Managed Services |
6.9 | % | 6.9 | % | 5.9 | % | 7.1 | % | 9.0 | % | 10.9 | % | 11.9 | % | 21.4 | % | ||||||||||||||||
Emerging Business and Other |
-37.0 | % | -40.1 | % | -46.8 | % | -32.7 | % | -184.0 | % | -239.0 | % | -22.4 | % | -1.7 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
12.0 | % | 10.3 | % | 7.7 | % | 8.7 | % | 4.6 | % | 2.8 | % | 8.3 | % | 10.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
Restructuring charges by function
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Cost of sales |
-5 | -73 | -312 | -335 | -218 | -28 | -26 | -65 | ||||||||||||||||||||||||
Research and development expenses |
21 | -244 | -227 | 39 | -79 | -98 | -49 | -118 | ||||||||||||||||||||||||
Selling and administrative expenses |
-8 | -13 | -144 | -5 | -30 | -21 | -43 | -23 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
8 | -330 | -683 | -301 | -327 | -147 | -118 | -206 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Cost of sales |
-725 | -720 | -647 | -335 | -337 | -119 | -91 | -65 | ||||||||||||||||||||||||
Research and development expenses |
-411 | -432 | -188 | 39 | -344 | -265 | -167 | -118 | ||||||||||||||||||||||||
Selling and administrative expenses |
-170 | -162 | -149 | -5 | -117 | -87 | -66 | -23 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
-1,306 | -1,314 | -984 | -301 | -798 | -471 | -324 | -206 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges by segment
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
-19 | -272 | -380 | -75 | -48 | -5 | -5 | -10 | ||||||||||||||||||||||||
of which cost of sales |
-20 | -79 | -110 | -72 | -24 | 12 | 9 | -3 | ||||||||||||||||||||||||
of which operating expenses |
1 | -193 | -270 | -3 | -24 | -17 | -14 | -7 | ||||||||||||||||||||||||
Digital Services |
14 | -87 | 34 | 20 | -206 | -128 | -93 | -187 | ||||||||||||||||||||||||
of which cost of sales |
-10 | -8 | 3 | -16 | -125 | -32 | -27 | -60 | ||||||||||||||||||||||||
of which operating expenses |
24 | -79 | 31 | 36 | -81 | -96 | -66 | -127 | ||||||||||||||||||||||||
Managed Services |
0 | -11 | -2 | -245 | -42 | -2 | 1 | -2 | ||||||||||||||||||||||||
of which cost of sales |
0 | -11 | -2 | -245 | -40 | -2 | 3 | -1 | ||||||||||||||||||||||||
of which operating expenses |
0 | 0 | 0 | 0 | -2 | 0 | -2 | -1 | ||||||||||||||||||||||||
Emerging Business and Other |
13 | 40 | -335 | -1 | -31 | -12 | -21 | -7 | ||||||||||||||||||||||||
of which cost of sales |
25 | 25 | -203 | -2 | -29 | -6 | -11 | -1 | ||||||||||||||||||||||||
of which operating expenses |
-12 | 15 | -132 | 1 | -2 | -6 | -10 | -6 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
8 | -330 | -683 | -301 | -327 | -147 | -118 | -206 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
-746 | -727 | -455 | -75 | -68 | -20 | -15 | -10 | ||||||||||||||||||||||||
of which cost of sales |
-281 | -261 | -182 | -72 | -6 | 18 | 6 | -3 | ||||||||||||||||||||||||
of which operating expenses |
-465 | -466 | -273 | -3 | -62 | -38 | -21 | -7 | ||||||||||||||||||||||||
Digital Services |
-19 | -33 | 54 | 20 | -614 | -408 | -280 | -187 | ||||||||||||||||||||||||
of which cost of sales |
-31 | -21 | -13 | -16 | -244 | -119 | -87 | -60 | ||||||||||||||||||||||||
of which operating expenses |
12 | -12 | 67 | 36 | -370 | -289 | -193 | -127 | ||||||||||||||||||||||||
Managed Services |
-258 | -258 | -247 | -245 | -45 | -3 | -1 | -2 | ||||||||||||||||||||||||
of which cost of sales |
-258 | -258 | -247 | -245 | -40 | 0 | 2 | -1 | ||||||||||||||||||||||||
of which operating expenses |
0 | 0 | 0 | 0 | -5 | -3 | -3 | -1 | ||||||||||||||||||||||||
Emerging Business and Other |
-283 | -296 | -336 | -1 | -71 | -40 | -28 | -7 | ||||||||||||||||||||||||
of which cost of sales |
-155 | -180 | -205 | -2 | -47 | -18 | -12 | -1 | ||||||||||||||||||||||||
of which operating expenses |
-128 | -116 | -131 | 1 | -24 | -22 | -16 | -6 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
-1,306 | -1,314 | -984 | -301 | -798 | -471 | -324 | -206 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
Gross income and gross margin excluding restructuring charges by segment
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
21,450 | 19,454 | 16,132 | 15,658 | 18,289 | 16,315 | 15,661 | 14,458 | ||||||||||||||||||||||||
Digital Services |
5,193 | 3,795 | 3,735 | 2,945 | 5,023 | 3,781 | 3,338 | 2,938 | ||||||||||||||||||||||||
Managed Services |
1,031 | 1,104 | 957 | 1,178 | 1,079 | 1,138 | 776 | 1,037 | ||||||||||||||||||||||||
Emerging Business and Other |
588 | 482 | 405 | 342 | 261 | 334 | 322 | 411 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
28,262 | 24,835 | 21,229 | 20,123 | 24,652 | 21,568 | 20,097 | 18,844 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
43.5 | % | 46.7 | % | 40.5 | % | 44.6 | % | 41.1 | % | 41.6 | % | 41.4 | % | 43.2 | % | ||||||||||||||||
Digital Services |
41.0 | % | 43.5 | % | 43.6 | % | 40.1 | % | 38.1 | % | 38.3 | % | 37.1 | % | 37.6 | % | ||||||||||||||||
Managed Services |
17.7 | % | 20.1 | % | 17.2 | % | 20.6 | % | 15.4 | % | 17.9 | % | 12.3 | % | 17.7 | % | ||||||||||||||||
Emerging Business and Other |
33.8 | % | 30.5 | % | 25.3 | % | 21.9 | % | 15.1 | % | 20.5 | % | 19.2 | % | 23.5 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
40.6 | % | 43.2 | % | 38.2 | % | 40.4 | % | 37.1 | % | 37.8 | % | 36.7 | % | 38.5 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
72,694 | 51,244 | 31,790 | 15,658 | 64,723 | 46,434 | 30,119 | 14,458 | ||||||||||||||||||||||||
Digital Services |
15,668 | 10,475 | 6,680 | 2,945 | 15,080 | 10,057 | 6,276 | 2,938 | ||||||||||||||||||||||||
Managed Services |
4,270 | 3,239 | 2,135 | 1,178 | 4,030 | 2,951 | 1,813 | 1,037 | ||||||||||||||||||||||||
Emerging Business and Other |
1,817 | 1,229 | 747 | 342 | 1,328 | 1,067 | 733 | 411 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
94,449 | 66,187 | 41,352 | 20,123 | 85,161 | 60,509 | 38,941 | 18,844 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
43.8 | % | 43.9 | % | 42.4 | % | 44.6 | % | 41.8 | % | 42.0 | % | 42.2 | % | 43.2 | % | ||||||||||||||||
Digital Services |
42.0 | % | 42.5 | % | 42.0 | % | 40.1 | % | 37.8 | % | 37.7 | % | 37.3 | % | 37.6 | % | ||||||||||||||||
Managed Services |
18.9 | % | 19.3 | % | 18.9 | % | 20.6 | % | 15.8 | % | 15.9 | % | 14.9 | % | 17.7 | % | ||||||||||||||||
Emerging Business and Other |
28.0 | % | 25.9 | % | 23.6 | % | 21.9 | % | 19.6 | % | 21.1 | % | 21.4 | % | 23.5 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
40.6 | % | 40.7 | % | 39.3 | % | 40.4 | % | 37.5 | % | 37.6 | % | 37.5 | % | 38.5 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
Operating income (loss) and operating margin excluding restructuring charges by segment
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
10,623 | 9,437 | 5,635 | 5,902 | 6,447 | 7,221 | 5,685 | 5,482 | ||||||||||||||||||||||||
Digital Services |
485 | -504 | -731 | -1,437 | 42 | -532 | -1,312 | -1,611 | ||||||||||||||||||||||||
Managed Services |
401 | 502 | 265 | 653 | 334 | 564 | 202 | 1,254 | ||||||||||||||||||||||||
Emerging Business and Other |
-509 | -462 | -635 | -511 | -371 | -11,302 | -718 | -23 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
11,000 | 8,973 | 4,534 | 4,607 | 6,452 | -4,049 | 3,857 | 5,102 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
21.5 | % | 22.7 | % | 14.1 | % | 16.8 | % | 14.5 | % | 18.4 | % | 15.0 | % | 16.4 | % | ||||||||||||||||
Digital Services |
3.8 | % | -5.8 | % | -8.5 | % | -19.6 | % | 0.3 | % | -5.4 | % | -14.6 | % | -20.6 | % | ||||||||||||||||
Managed Services |
6.9 | % | 9.1 | % | 4.8 | % | 11.4 | % | 4.8 | % | 8.9 | % | 3.2 | % | 21.4 | % | ||||||||||||||||
Emerging Business and Other |
-29.3 | % | -29.2 | % | -39.6 | % | -32.7 | % | -21.4 | % | -695.1 | % | -42.8 | % | -1.3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
15.8 | % | 15.6 | % | 8.2 | % | 9.3 | % | 9.7 | % | -7.1 | % | 7.0 | % | 10.4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
31,597 | 20,974 | 11,537 | 5,902 | 24,835 | 18,388 | 11,167 | 5,482 | ||||||||||||||||||||||||
Digital Services |
-2,187 | -2,672 | -2,168 | -1,437 | -3,413 | -3,455 | -2,923 | -1,611 | ||||||||||||||||||||||||
Managed Services |
1,821 | 1,420 | 918 | 653 | 2,354 | 2,020 | 1,456 | 1,254 | ||||||||||||||||||||||||
Emerging Business and Other |
-2,117 | -1,608 | -1,146 | -511 | -12,414 | -12,043 | -741 | -23 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
29,114 | 18,114 | 9,141 | 4,607 | 11,362 | 4,910 | 8,959 | 5,102 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
19.0 | % | 18.0 | % | 15.4 | % | 16.8 | % | 16.0 | % | 16.6 | % | 15.7 | % | 16.4 | % | ||||||||||||||||
Digital Services |
-5.9 | % | -10.8 | % | -13.6 | % | -19.6 | % | -8.6 | % | -12.9 | % | -17.4 | % | -20.6 | % | ||||||||||||||||
Managed Services |
8.1 | % | 8.5 | % | 8.1 | % | 11.4 | % | 9.2 | % | 10.9 | % | 12.0 | % | 21.4 | % | ||||||||||||||||
Emerging Business and Other |
-32.6 | % | -33.9 | % | -36.2 | % | -32.7 | % | -183.0 | % | -238.2 | % | -21.6 | % | -1.3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
12.5 | % | 11.1 | % | 8.7 | % | 9.3 | % | 5.0 | % | 3.1 | % | 8.6 | % | 10.4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rolling four quarters of net sales by segment
2020 | 2019 | |||||||||||||||||||||||||||||||
Rolling four quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
165,978 | 161,060 | 158,662 | 156,654 | 155,009 | 152,202 | 148,875 | 143,449 | ||||||||||||||||||||||||
Digital Services |
37,324 | 37,821 | 38,969 | 39,385 | 39,857 | 39,696 | 38,802 | 38,644 | ||||||||||||||||||||||||
Managed Services |
22,600 | 23,812 | 24,673 | 25,423 | 25,565 | 25,419 | 25,525 | 25,730 | ||||||||||||||||||||||||
Emerging Business and Other |
6,488 | 6,480 | 6,524 | 6,598 | 6,785 | 7,335 | 8,133 | 8,510 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
232,390 | 229,173 | 228,828 | 228,060 | 227,216 | 224,652 | 221,335 | 216,333 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rolling four quarters of operating margin excluding restructuring by segment (%)
2020 | 2019 | |||||||||||||||||||||||||||||||
Rolling four quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
19 | % | 17 | % | 16 | % | 16 | % | 16 | % | 17 | % | 16 | % | 16 | % | ||||||||||||||||
Digital Services |
-6 | % | -7 | % | -7 | % | -8 | % | -9 | % | -18 | % | -20 | % | -21 | % | ||||||||||||||||
Managed Services |
8 | % | 7 | % | 7 | % | 7 | % | 9 | % | 9 | % | 9 | % | 10 | % | ||||||||||||||||
Emerging Business and Other |
-33 | % | -31 | % | -196 | % | -196 | % | -183 | % | -185 | % | -40 | % | -44 | % | ||||||||||||||||
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Total |
13 | % | 11 | % | 5 | % | 5 | % | 5 | % | 3 | % | 7 | % | 6 | % | ||||||||||||||||
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46 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |
EBITA and EBITA margin by segment by quarter
2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
10,636 | 9,347 | 5,321 | 5,957 | 6,447 | 7,253 | 5,716 | 5,552 | ||||||||||||||||||||||||
Digital Services |
625 | -461 | -563 | -1,283 | -23 | -521 | -1,268 | -1,638 | ||||||||||||||||||||||||
Managed Services |
403 | 492 | 264 | 409 | 293 | 563 | 205 | 1,253 | ||||||||||||||||||||||||
Emerging Business and Other |
-380 | -370 | -913 | -456 | -323 | -11,262 | -688 | 43 | ||||||||||||||||||||||||
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Total |
11,284 | 9,008 | 4,109 | 4,627 | 6,394 | -3,967 | 3,965 | 5,210 | ||||||||||||||||||||||||
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2020 | 2019 | |||||||||||||||||||||||||||||||
Isolated quarters, as percentage of net sales |
Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||||
Networks |
21.5 | % | 22.4 | % | 13.4 | % | 17.0 | % | 14.5 | % | 18.5 | % | 15.1 | % | 16.6 | % | ||||||||||||||||
Digital Services |
4.9 | % | -5.3 | % | -6.6 | % | -17.5 | % | -0.2 | % | -5.3 | % | -14.1 | % | -21.0 | % | ||||||||||||||||
Managed Services |
6.9 | % | 8.9 | % | 4.7 | % | 7.2 | % | 4.2 | % | 8.9 | % | 3.2 | % | 21.4 | % | ||||||||||||||||
Emerging Business and Other |
-21.9 | % | -23.4 | % | -57.0 | % | -29.1 | % | -18.7 | % | -692.6 | % | -41.0 | % | 2.5 | % | ||||||||||||||||
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Total |
16.2 | % | 15.7 | % | 7.4 | % | 9.3 | % | 9.6 | % | -6.9 | % | 7.2 | % | 10.7 | % | ||||||||||||||||
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2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
31,261 | 20,625 | 11,278 | 5,957 | 24,968 | 18,521 | 11,268 | 5,552 | ||||||||||||||||||||||||
Digital Services |
-1,682 | -2,307 | -1,846 | -1,283 | -3,450 | -3,427 | -2,906 | -1,638 | ||||||||||||||||||||||||
Managed Services |
1,568 | 1,165 | 673 | 409 | 2,314 | 2,021 | 1,458 | 1,253 | ||||||||||||||||||||||||
Emerging Business and Other |
-2,119 | -1,739 | -1,369 | -456 | -12,230 | -11,907 | -645 | 43 | ||||||||||||||||||||||||
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Total |
29,028 | 17,744 | 8,736 | 4,627 | 11,602 | 5,208 | 9,175 | 5,210 | ||||||||||||||||||||||||
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2020 | 2019 | |||||||||||||||||||||||||||||||
Year to date, as percentage of net sales |
Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | ||||||||||||||||||||||||
Networks |
18.8 | % | 17.7 | % | 15.0 | % | 17.0 | % | 16.1 | % | 16.8 | % | 15.8 | % | 16.6 | % | ||||||||||||||||
Digital Services |
-4.5 | % | -9.4 | % | -11.6 | % | -17.5 | % | -8.7 | % | -12.8 | % | -17.3 | % | -21.0 | % | ||||||||||||||||
Managed Services |
6.9 | % | 6.9 | % | 6.0 | % | 7.2 | % | 9.1 | % | 10.9 | % | 12.0 | % | 21.4 | % | ||||||||||||||||
Emerging Business and Other |
-32.7 | % | -36.6 | % | -43.2 | % | -29.1 | % | -180.3 | % | -235.5 | % | -18.8 | % | 2.5 | % | ||||||||||||||||
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Total |
12.5 | % | 10.9 | % | 8.3 | % | 9.3 | % | 5.1 | % | 3.2 | % | 8.8 | % | 10.7 | % | ||||||||||||||||
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Q4 | Jan-Dec | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Days sales outstanding |
| | 69 | 75 | ||||||||||||
Inventory turnover days |
86 | 73 | 78 | 77 | ||||||||||||
Payable days |
69 | 66 | 82 | 77 |
47 Ericsson | Fourth quarter and full-year report 2020 | Alternative performance measures |