18 slides from Telefonaktiebolaget Lm Ericsson Class A's earnings presentation, Jan 20, 2023
Slide 1: Ericsson Fourth quarter 2022
Ericsson Fourth quarter 2022 Jan 20, 2023 © Telefonaktiebolaget LM Ericsson 2023 | Fourth quarter report 2022 | Jan 20, 2023
Slide 2: Fourth quarter 2022
Fourth quarter 2022 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 2023 | Fourth quarter report 2022 | Jan 20, 2023
Slide 4: 2022 Highlights
2022 Highlights ●On track to deliver on our long-term EBITA1 target of 15-18% by 2024 Organic sales YoY: ●Made significant progress against our strategic priorities: 3% –Strengthened leadership in mobile networks with market share gains –Committed to break even in Cloud Software and Services for ful
Slide 5: Q4 2022 Highlights
Q4 2022 Highlights ●Measurable progress towards achieving our strategic goals: Organic sales YoY: –Signed a multiyear IPR licensing agreement – foundation for future agreements –Limit subscale business in Cloud Software and Services 1% –Took important steps in Enterprise; announced divestment of los
Slide 6: Market update Q4 – Market share gains in India
Market update Q4 – Market share gains in India MANA 29% -7% MELA MNEA 24% 0% 10% -16% MMEA Market area ”Other” 9% -4% Share of Group sales MOAI 15% N/A Organic sales growth 13% 21% © Telefonaktiebolaget LM Ericsson 2023 | Fourth quarter report 2022 | Jan 20, 2023 This slide contains forward-looking
Slide 7: Financial overview
Financial overview Carl Mellander Chief Financial Officer © Telefonaktiebolaget LM Ericsson 2023 | Fourth quarter report 2022 | Jan 20, 2023
Slide 8: Q4 2022 in numbers
Q4 2022 in numbers Financial Performance Excluding restructuring charges ● Organic and FX adjusted: 1% YoY SEK b. 22Q4 21Q4 YoY 22Q3 – IPR contributed with 5 percentage points Net sales 86.0 71.3 21% 68.0 ● Gross income2 increased by SEK 4.6 b. YoY to SEK 35.7 b. Organic and FX adj. sales 1% – Impro
Slide 9: Segment summary
Segment summary Excluding restructuring charges Mobile Networks Enterprise Networks Cloud Software and Services Enterprise SEK b. 22Q4 21Q4 YoY 22Q3 SEK b. 22Q4 21Q4 YoY 22Q3 SEK b. 22Q4 21Q4 YoY 22Q3 Net sales 58.6 51.1 15% 48.1 Net sales 20.2 18.0 13% 14.2 Net sales 6.6 1.8 265% 5.2 Gross Inc. 26.
Slide 10: FY 2022 in numbers
FY 2022 in numbers Financial Performance Excluding restructuring charges SEK b. 2021 2022 Target ● Organic and FX adjusted sales: 3% YoY long term ● Gross margin 41.8% (43.5%)2 Net sales 232.3 271.5 – Networks: Increased component cost and Gross margin 43.5% 41.8% inflationary pressure R&D and SG&A
Slide 11: Gross margin
Gross margin Development since Q1 2020 Excluding restructuring charges ● Gross margin1 rolling 4Q: 41.8% ● Gross margin1 41.5% (43.5%) 43.2% 43.4% 44.0% 43.5% – Positive impact from new IPR agreement 42.9% 43.0% 41.8% – Networks: Business mix shift and higher share of 43.5% 40.4% 40.6% 42.4% 42.3% 4
Slide 12: Free cash flow and financial position
Free cash flow and financial position Financial Performance SEK b. Q4 FY ● Free cash flow before M&A of SEK 16.9 (13.5) b. 2022 2021 2022 2021 ● Support from working capital SEK 10.7 (2.7) b. EBIT excluding restructuring charges 8.1 12.3 27.4 32.3 – Reduction in inventory, high cash collection Depre
Slide 13: Outlook
Outlook Q4→Q1: Average seasonality last 3 years: -23% in Networks expected to be more pronounced in 2023, even when Sales adjusting for the retroactive IPR licensing revenues in Q4. Cloud Software and Services is expected to have a normal seasonality of -35%, adjusted for the retroactive IPR licensi
Slide 14: Summary
Summary ●Confident in long-term outlook given 5G’s potential –Well positioned to extend leadership in Networks with further market share gains –Expansion into Enterprise will gain speed across Enterprise Wireless and Global Communication Platform ●Prepared for near-term uncertainty –Expect reduction
Slide 15: © Telefonaktiebolaget LM Ericsson 2023 | Fourth quarter report 2022 | Jan 20, 2023
© Telefonaktiebolaget LM Ericsson 2023 | Fourth quarter report 2022 | Jan 20, 2023
Slide 16: Closing remarks
Closing remarks Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2023 | Fourth quarter report 2022 | Jan 20, 2023
Slide 17: W
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Slide 18: Forward-looking statements
Forward-looking statements This presentation includes forward-looking statements, including statements reflecting management’s current views relating to the growth of the market, future market conditions, future events, financial condition, and expected operational and financial performance, includi