Présentation des résultats financiers Ericsson (Q2 2009)

Slide title
36 pt

e subtitle
24 pt

Text
SECOND QUARTER REPORT
22 pt
level 2-5
18 pt
2009

© Copyright Telefon AB LM Ericsson 2009. All rights reserved SECOND QUARTER REPORT 2009 1 2009-07-24

Slide title
36 pt

e subtitle
24 pt

Text
HENRY STÉNSON
22 pt Senior Vice President Communications
level 2-5
18 pt


Slide title
36 pt

e subtitle
24 pt

Text
22 pt
level 2-5
18 pt
2009

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 better understanding of these
risks and uncertainties.


Slide title
36 pt

e subtitle
24 pt

Text
CARL-HENRIC SVANBERG
22 pt President and CEO
level 2-5
18 pt


Q2 in summary – different trends
Slide title
36 pt

e subtitle
24 pt Opportunities as well as challenges
Text
22 pt  Major rollouts of new technologies in world’s leading economies
level 2-5 – 3G up 60%, now larger than GSM
18 pt
 Decreased networks investments in certain emerging markets
– Political uncertainties and financial constraints
 Services strong, 38% (33%) of total sales
– Group leading margins, all areas show strong growth
 Margins up 2.4% year-over-year
– Restructuring on plan, charges of SEK 3.6 b in the quarter
 Cash flow SEK 9.9 (8.7) b
– Net cash up SEK 5 b despite SEK 6 b dividend

Longer-term positive industry fundamentals remain solid
This slide contains forward looking statements


Major advances in services
Slide title
36 pt

e subtitle
24 pt

 Breakthrough contract in North America with Sprint, US
Text – Seven-year contract, USD 4.5-5 b
22 pt
level 2-5 – Wireline and wireless - 6,000 employees
18 pt
 First managed services deal in Africa with Zain
– Nigeria, five-year agreement, 450 employees
– Paves the way for further deals in sub-Sahara
 Key services deal with Telefónica O2 UK
– Major part of UK services market now covered

World leader in services, benefiting from scale and global presence


Regional Q2 comments
Slide title
36 pt

e subtitle
24 pt Western Europe sales -6% year-over-year
Text
22 pt
level 2-5
18 pt

 Sales slightly up for comparable units
 Strong mobile data growth drives 3G upgrades – offsetting GSM decline
 Good growth in UK, Italy and the Netherlands – Spain remains weak
 28 Mbps MIMO network launched with Telecom Italia


Slide title
36 pt

e subtitle
24 pt
Central Europe, Middle East, Africa sales up 12% year-over-year

Text
22 pt
level 2-5
18 pt

 Large region with significant variations
– Need for telephony, strong demand for data services, effects from global crisis
 Several countries in Eastern Europe still weak – Russia improved
 First managed services deal in Africa with Zain, Nigeria


Slide title
36 pt

e subtitle
24 pt Asia Pacific sales up 10% year-over-year
Text
22 pt
level 2-5
18 pt

 China remains strong – largest market in the quarter
 India sales still high – lower due to project phasing
 Strong development in Japan, Indonesia and Australia
 No recovery yet in Bangladesh and Pakistan


Slide title
36 pt

e subtitle
24 pt Latin America sales -3% year-over-year
Text
22 pt
level 2-5
18 pt

 Several markets affected by currency depreciation
 Strong consumer demand for mobile broadband
 Central America, Brazil, Mexico weaker – good growth in Chile, Argentina


Slide title
36 pt

e subtitle
24 pt North America sales up 34% year-over-year
Text
22 pt
level 2-5
18 pt

 High activity in telecom segment despite economic slowdown
– Quickly growing consumer demand for broadband services
 Good growth, despite currency impacts
 Break-in services deal with Sprint


Slide title
36 pt

e subtitle
24 pt

Text
HANS VESTBERG
22 pt Executive Vice President and CFO
level 2-5
18 pt


Q2 financial highlights
Slide title
36 pt

e subtitle
24 pt Second quarter First quarter
SEK b. 2009 2008 % 2009 %
Text Net sales 52.1 48.5 7% 49.6 5%
22 pt
level 2-5 Gross margin 36.3% 37.0% - 36.3% -
18 pt Operating income before JVs 6.9 4.7 49% 4.7 47 %
Operating margin before JVs 13.3% 9.6% - 9.5% -

 Net sales up 7% YoY, -3% in constant currencies, comparable units
 Stable gross margin despite increasing services and transfer of EMP
 Opex decreased due to cost reductions
 Improved operating margin in all segments
 Capital gain SEK 0.8 b from divestiture of TEMS

All numbers excluding restructuring charges


Q2 financial highlights
Slide title
36 pt

e subtitle
SEK b. 2009 2008 % 2009 %
Text
Share of earnings in JVs -2.0 0.1 - -2.2 -
22 pt
level 2-5 Income after financial items 4.8 4.7 3% 3.3 45%
18 pt
Net income 0.8 2.0 -61% 1.8 -57%
EPS diluted, SEK 0.26 0.59 -56% 0.54 -52%

Adjusted cash flow 9.9 8.7 - -1.7 -

 Financial net SEK -0.1 (0.0) b
 Restructuring charges of SEK 3.6 (1.8) b
 Good cash flow due to strong collections and improved working capital
– Some effects from operators optimizing cash situation

All numbers, excluding EPS and net income, have been adjusted for restructuring charges
EPS excluding minority interests


Slide title
36 pt Change in Gross cash 2009 Q2
e subtitle
24 pt
Dividends -6 b
Refinancing +8 b

Text
22 pt SEK b. Operating cash flow 9.1 b b Investing -0.2 b b Financial 2.1 b b FX 0.4 b b

level 2-5 85

18 pt 80
+5.6 -0.8
75

+4.3
70 76
65

60 64 Adjusted cash flow SEK 9.9 b
55

Change in gross cash SEK +12 b.
50

45

40
G r o s s casha s hNettincome mChange inin R e s t r u c t u r i n g n v e s t i n g F Investing g FX on cashG r o s s casha s h
Gross C Ne I n c o Change
e Net NetPension Restructuring
I inancin Financing Gross C
0 9 0 3 A reconciled
0903A reconciled to t o p e r a t i n g
operating a c t i v i t i e s activities
activities activities 0906A
0906A
cash h
cas a s s e t s (excl.e x c l .
assets ( (STE)
r pension and i n g )
estructur
restructuring)

Change in Net cash SEK +5 b. (from SEK 23 to 28 b.)


Slide title
36 pt Loan maturities in 2009 and 2010 refinanced in Q2
e subtitle
24 pt

Text
22 pt
level 2-5 SEK b.
18 pt

Notes and Bonds Other financial liabilities

Undrawn available committed facilities amount to USD 2 b and matures in June 2014. Not shown in this chart.


Slide title
e subtitle
24 pt
 USD 483 m bond repaid in May 2009
Text
22 pt
level 2-5 SEK b.
18 pt




Slide title
e subtitle
24 pt
 USD 483 m bond repaid in May 2009
Text
 New USD 625 m bilateral loan with SEK, matures 2016
22 pt  New EUR 600 m bond issue, maturity 2013
level 2-5 SEK b.
18 pt




Slide title
36 pt
Cost reductions on track
e subtitle
24 pt
 Targeting savings of SEK 10 b from 2H 2010
Text – Main part of activities initiated, program on track
22 pt
level 2-5
– 50/50 split of cost of sales and operating expenses
18 pt – SEK 6-7 b estimated restructuring charges

SEK b. 2009
Q2 Q1
Restructuring charges 3.6 0.7
Cash out 0.8 1.2
Remains to be paid 4.2 3.3

Please note that not all restructuring charges lead to cash out


Networks
Slide title
36 pt

e subtitle
SEK b. 2009 2008 % 2009 %
Text
Net sales 34.7 33.3 4% 33.6 4%
22 pt
level 2-5 Of which network rollout 5.9 4.8 24% 4.7 27%
18 pt
EBITDA margin 15% 15% - 14% -
Operating margin 11% 10% - 10% -
Excluding restructuring charges

 Sales down currency adjusted – positive margin development
 Different market trends
– Major technology driven rollouts in China, Japan, US
– Notable impact of economic climate on certain emerging markets
 WCDMA volumes higher than GSM
 Data traffic drives upgrades of IP network and transmission
– SmartEdge, Packet core and MiniLink growing strongly


Professional Services
Slide title
36 pt

e subtitle
SEK b. 2009 2008 % 2009 %
Text Net sales 14.1 11.0 28% 12.8 10%
22 pt
level 2-5 Of which managed services 4.6 3.4 34% 4.2 10%
18 pt
EBITDA margin 17%1) 16% - 17% -
Operating margin 16%1) 14% - 15% -
Excluding restructuring charges
1) Q209 excludes a capital gain of SEK 0.8 b

 Growth of 16% in local currencies
 Fast growing Consulting & Systems Integration, 7,000 employees
– Acquisition of Bizitek – leading Turkish systems integrator
 Managed services up 34% YoY – operators focus on cost
– Six new contracts, first contract in Africa, Zain and North America, Sprint


Multimedia
Slide title
36 pt

e subtitle
SEK b. 2009 2008 % 2009 %
Text Net sales 3.3 2.7 23% 3.2 3%
22 pt
level 2-5 EBITDA margin 17% 8% - 10% -
18 pt
Operating margin 9% -1% - 2% -
All numbers adjusted for comparable units and excluding restructuring charges

 Strong growth in comparable units, up 23%
– Revenue management (prepaid and LHS in postpaid)
– Multimedia brokering (IPX)
 Continued margin improvement – may still vary between quarters
– Favorable mix - higher portion of software license expansion sales
– Cost savings giving effects


Joint ventures in Q2
Slide title
36 pt

e subtitle
24 pt

 Challenging device market
Text
22 pt  Sony Ericsson
level 2-5 – Sales of EUR 1,684 (2,820) m, NIBT EUR -283 (19) m
18 pt
– Cost reductions to restore profitability on track
– Aino, Satio, Yari – new communication entertainment portfolio in Q4

 ST-Ericsson in operation since February, 2009
– Sales of USD 666 m, adjusted operating income USD -165 m
– Cost reductions of USD 480 m to leverage on synergies and
restore profitability
– Medium-term uncertain business environment


Summary
Slide title
36 pt

e subtitle
24 pt

 Market with different trends - opportunities as well as challenges
Text – More notable impacts from economic environment in certain countries
22 pt
level 2-5 – Accelerating demand for mobile internet, major technology rollouts
18 pt
 Cost reductions on plan
– Increased margins in all segments
 Services an increasing part of our business
– Fastest growing – highest margins

Focus on cost and customers key to success


Slide title
36 pt

e subtitle
24 pt

Text
22 pt
level 2-5
18 pt
2009

Q&A


Présentation des résultats financiers Ericsson (Q2 2009)

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (16)

Similar to Présentation des résultats financiers Ericsson (Q2 2009)

Similar to Présentation des résultats financiers Ericsson (Q2 2009) (20)

More from Ericsson France

More from Ericsson France (20)

Recently uploaded

Recently uploaded (20)

Présentation des résultats financiers Ericsson (Q2 2009)