Telefonaktiebolaget Lm Ericsson Class A · OMXSTO:ERIC_A
Telefonaktiebolaget Lm Ericsson Class A — Ericsson — Q4 2024 Earnings Presentation
25 slides from Telefonaktiebolaget Lm Ericsson Class A's earnings presentation, Jan 23, 2025
Slide 1: Ericsson Fourth quarter 2024
Ericsson Fourth quarter 2024 January 24, 2025 © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025
Slide 2: Fourth quarter 2024 forward-looking statements
Fourth quarter 2024 This presentation contains forward-looking statements. Such statements are based on our current expectations and are subject to risks and uncertainties that could materially affect our business and results. Please read our earnings reports and our most recent annual report for a
Slide 3: Business Overview
Business Overview Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025
Slide 4: Key takeaways
Key takeaways Fourth Quarter Full Year ● Continued progress on strategic initiatives Organic1 sales YoY: Organic1 sales YoY: – Maintaining leadership in programmable networks – 5G Advanced portfolio enhancements 2% -5% – Momentum building for network APIs ● Market development Adjusted2 gross margin:
Slide 5: Q4 sales development by market area and segment
Q4 sales development by market area and segment Market area net sales Organic growth Networks Cloud Software Enterprise (Q4 2024, SEK b.) (Q4 2024 YoY) and Services 64% 25% 10% % of net sales FY 2024 North America 22.0 54% 29% Europe and 19.4 2% 26% Latin America South East Asia, 8.4 -28% 13% Oceani
Slide 6: Financial Overview
Financial Overview Lars Sandström Chief Financial Officer © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025
Slide 7: Financial update Q4 2024
Financial update Q4 2024 Financial performance (adjusted) SEK b. Q4-24 Q4-23 YoY Q3-24 Organic sales growth : 2% YoY Net sales 72.9 71.9 1% 61.8 • Growth in North America of 54% • Slight growth in Europe, other markets declined Organic sales growth 2% Gross income 33.7 29.6 14% 28.6 Adjusted gross m
Slide 8: Financial update FY 2024
Financial update FY 2024 Financial performance (adjusted) SEK b. 2024 2023 YoY 20242 20233 Organic sales growth : -5% YoY ex impairment ex impairment • Growth in North America of 24% with declines Net sales 247.9 263.4 -6% elsewhere Organic sales growth -5% Adjusted gross margin: 44.9% Gross income
Slide 9: IPR licensing update
IPR licensing update IPR licensing revenue (SEK b.) Ericsson licensing progress (end 2024) 26% Smartphones Cellular IoT Media Services (OTT) Automotive Consumer Electronics 8.1 10.4 11.1 14.0 2021 2022 2023 2024 • Continued good growth benefiting from another IPR • Most major smartphone vendors now
Slide 10: Key financial trends Q4 2024
Key financial trends Q4 2024 43% 45% 41% 40% 40% 42% 40% 40% Sales ● Signs that the overall RAN market is stabilizing, with strong growth in market area North America Adjusted gross margin and adjusted EBITA ● Growth in adjusted gross margin and adjusted EBITA 71.9 72.9 64.5 61.8 – IPR Growth 62.6 6
Slide 11: Mobile Networks Q4 2024
Mobile Networks Q4 2024 Networks Cloud Software and Services 22% 10% 20% 9% 17% 15% 14% 13% 13% 3% 3% 11% 1% -2% -2% -3% 42.5 42.4 41.5 45.0 33.7 37.7 40.0 46.8 13.4 15.1 15.6 19.6 13.0 15.2 15.0 19.5 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Net
Slide 12: Enterprise Q4 2024
Enterprise Q4 2024 Enterprise -9% -12% -12% -13% -13% -14% -19% -19% 6.0 6.4 6.7 6.7 6.0 6.5 6.3 6.1 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Net sales (SEK b.) Adjusted EBITA % ● 19% reported sales growth in Enterprise Wireless Solutions ● -17% reported sales decline in Global Communications
Slide 13: Cash flow and financial position
Cash flow and financial position FCF before M&A Net cash (SEK b.) 16% 15% 9% 15.8 12.5 12.9 37.8 6% 7.6 -0.5 3.7 25.5 -5.0 4% -8.0 1% 13.6 13.1 10.8 2% 7.8 0% 1.9 1.6 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 FCF (SEK b.) Rolling 12-month FCF/sal
Slide 14: Outlook
Outlook1 Sales Sales growth in Q1 2025 is expected to be broadly similar to 3-year average Networks seasonality Sales Sales growth in Q1 2025 is expected to be broadly similar to 3-year average Cloud Software and Services seasonality Adjusted gross margin Adjusted gross margin in Q1 is expected to b
Slide 15: Closing Remarks
Closing Remarks Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025
Slide 16: Summary
Summary ● Positive signs of RAN market stabilization – Customer interest in programmable networks increasing – Customer networks require further investment ● Continue to focus on strategy execution – Strengthen leadership in Mobile Networks – Focused expansion in Enterprise Continue to focus on stra
Slide 17: Q&A
Q&A © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025
Slide 18: www.ericsson.com
www.ericsson.com © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025
Slide 19: Appendices
Appendices Appendix 1 – Adjusted gross margin and income development Appendix 2 – Adjusted EBITA development Appendix 3 – More information Appendix 4 – Ericsson Mobility Report, November 2024 | EHAJBOG Boglárka Hajdu | 2024-09-17 | Ericsson Internal | Page 19 of 25 © Telefonaktiebolaget LM Ericsson
Slide 20: Appendix 1 – Adjusted gross margin and income development
Appendix 1 – Adjusted gross margin and income development Adj. gross margin (%) (YoY change) + Adjusted gross income and 41.1% 49.1% 39.0% 54.3% -22.7% 46.3% margin increase (+5.9 p.p.) (+1.7 p.p.) (+10.0 p.p.) (0.0 p.p.) + Favorable product and market mix Adj. gross income, SEK b. + Cost actions +4
Slide 21: Appendix 2 – Adjusted EBITA development
Appendix 2 – Adjusted EBITA development Adj. EBITA margin (%) (YoY change) 11.4% 21.6% 9.3% -19.3% -85.8% 14.1% + Adjusted gross income and (+5.1 p.p.) (-1.1 p.p.) (-7.3 p.p.) (-16.0 p.p.) margin increase + Cost actions Adj. EBITA, SEK b. + IPR licensing revenues +2.0 -0.2 -0.4 -0.1 2.7 - Variable i
Slide 22: Appendix 3 – More information
Appendix 3 – More information Latest Event Capture value with 5G Fixed Wireless Access in a world of opportunities January 21, 2025 With millions waiting for reliable home broadband, Fixed Wireless Access offers an efficient and scalable alternative to wired connections. Learn more about the technol
Slide 23: Appendix 4 – Ericsson Mobility report, Nov 2024
Appendix 4 – Ericsson Mobility report, Nov 2024 Download the report here World population and mid-band coverage split by region (end of 2024) 5G total 5G mid-band 40% 6.3 B End 2024, 5G mid-band Global 5G mobile World population coverage subscriptions are World (without mainland China) outside of ma
Slide 24: Forward-looking statements
Forward-looking statements This report includes forward-looking statements. All statements other than statements of historical fact are forward-looking statements. The words “believe,” “expect,” “foresee,” “anticipate,” “assume,” “intend,” “likely,” “projects,” “may,” “could,” “plan,” “estimate,” “f
Slide 25: www.ericsson.com
www.ericsson.com © Telefonaktiebolaget LM Ericsson 2025 | Fourth quarter report 2024 | January 24, 2025