Telefonaktiebolaget LM Ericsson Class A · OMXSTO:ERIC_A
Telefonaktiebolaget LM Ericsson Class A — Ericsson — Q1 2011 Earnings Presentation
22 slides from Telefonaktiebolaget LM Ericsson Class A's earnings presentation, Apr 27, 2011
Slide 1: First Quarter 2011
First QUARTER 2011 27 april 2011
Slide 2: Henry Sténson, Senior Vice President Communications
HENRY STÉNSON SENIOR VICE PRESIDENT COMMUNICATIONS
Slide 3: First Quarter 2011 forward-looking statements
First QUARTER 2011 THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE BASED ON OUR CURRENT EXPECTATIONS AND ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD NEGATIVELY AFFECT OUR BUSINESS. PLEASE READ OUR EARNINGS REPORTS AND OUR MOST RECENT ANNUAL REPORT FOR A BETTE
Slide 4: Hans Vestberg, President and CEO
HANS VESTBERG PRESIDENT AND CEO
Slide 5: 1Q in Summary
1Q in Summary Sales SEK 53.0 (45.1) b - Strong sales of mobile broadband Net income SEK 4.1 (1.3) b - Increased volumes, improved profitability in Networks Adjusted cash flow SEK -2.1 (3.0) b - Higher level of work in progress in regions, continued ramp up of production © Telefonaktiebolaget LM Eric
Slide 6: Net Sales
NET SALES › Sales +17% YoY SEK b • Growth in five out of ten regions • 25% organic growth, currency adjusted › Networks +35% • Strong sales of mobile broadband • GSM/EDGE capacity expansions in China › Global Services -4% • FX impact Q1 Q1 Q1 Q1 Q1 2007 2008 2009 2010 2011 • Professional Services +3
Slide 7: Profitability
profitability › Higher volumes and increased profitability in SEK b Networks › Partly impacted by network modernization projects › Less restructuring Net income Net income EPS, diluted 1Q11 SEK 4.1 Y/Y 220% Q/Q -7% © Telefonaktiebolaget LM Ericsson 2011 | FIRST QUARTER REPORT 2011 | April 27, 2011
Slide 8: Regional sales
Regional sales North America 1Q11 SEK 13.2 b Mediterranean 1Q11 SEK 4.8 b China and 1Q11 SEK 8.6 b Y/Y +39% Y/Y -5% North East Asia Y/Y +74% Q/Q -6%+ Q/Q -31% Q/Q -9% • Capacity expansions • Unrest in North Africa and upgrades • Greece, Portugal, Spain • Mobile broadband • LTE devices in 2011 still
Slide 9: Japan and global supply chain
Japan and global supply chain › No impact on sales in Q1 › Our global component supply chain partly dependent on Japan • Delays in delivery of certain products estimated › Mitigating activities initiated immediately • Finding and integrating alternative components • Increase volumes with second sour
Slide 10: Mitigating actions Japan
Mitigating actions japan Production volume Japan earthquake Stock Spot Alternative Re- Japan Normal market source design recovery Time © Telefonaktiebolaget LM Ericsson 2011 | FIRST QUARTER REPORT 2011 | April 27, 2011
Slide 11: Segments
s a ERICSSON
Slide 12: Networks
networks › +35% YoY SEK b • High sales of RBS 6000, packet-core, IP- routers, microwave backhaul • GSM and CDMA showed good growth • GSM/EDGE in China as fall back for mobile broadband • LG-Ericsson performed well › Margins • Positive volume effects Q1 Q1 Q1 Q1 • Business mix – expansions and upgrad
Slide 13: Global Services
global services SEK b › Professional Services sales +3% YoY in local currencies • Managed Services +11% YoY currency adjusted • 9 new managed services contracts of which 5 extensions or expansions • Low level of integration projects › Network Rollout sales flat YoY • Delayed project implementations
Slide 14: Multimedia
multimedia › Good sales of multimedia brokering SEK b (IPX) and revenue management › Sales for TV solutions weaker › EBITA negative due to lower volumes and product mix • Partly offset by lower operating expenses Q1 Q1 Q1 2009 2010 2011 Sales EBITA margin 1Q11 SEK 2.3 b 1Q11 -7% Y/Y -1% 1Q10 -5% Q/Q
Slide 15: 1Q joint ventures
1Q joint ventures Sales EUR m Sony Ericsson Fifth consecutive quarter of profit with high ASP Good market response to new portfolio Q1 Q1 Q1 Q1 2008 2009 2010 2011 Sales USD m ST-Ericsson Shift from legacy to new products Additional actions to improve internal efficiencies Ericsson committed to supp
Slide 16: Jan Frykhammar, CFO and Executive Vice President
JAN FRYKHAMMAR CFO AND EXECUTIVE VICE PRESIDENT
Slide 17: Profitability 1Q
Profitability 1q Gross margin: 38.5% (38.5%) Positive: strong Networks sales, business mix with expansions and upgrades, efficiency gains, one-off IPR sale of SEK 0.3 b Negative: High 3G volumes in India, network modernization projects partly materialized SEK b Operating expenses SEK 14.4 (13.1) b R
Slide 18: Profitability 1Q
Profitability 1q SEK b Operating margin excl JVs 11.9% (10.1%) Restructuring of SEK 0.4 b in 1Q 2011 included in reported numbers Restructuring of SEK 2.2 b in 1Q 2010 excluded from reported numbers Operating income EBITA margin excl JVs Operating margin excl JVs SEK b SEK Net income SEK 4.1 (1.3) b
Slide 19: Balance sheet ratios
Balance sheet ratios › DSO decreased year-over-year due to higher › Capital efficiency remains top of agenda sales and strong collections › Inventory days increased due to higher level of work in progress in regions and continued ramp up of production Days DSO target <90 days Inventory days target <
Slide 20: Change in Gross Cash 1Q 2011
Change in Gross Cash 1Q 2011 Operating cash flow Investing Financing FX on cash -2.9 b (excl short term investments) -1.7 b (incl dividend) 1.2 b -0.7 b SEK b Adjusted cash flow SEK -2.1 Gross cash is defined as cash, cash equivalents and short term investments. Cash, as presented in the balance she
Slide 21: First Quarter 2011
First QUARTER 2011 27 april 2011
Slide 22: Ericsson
ERICSSON