24 slides from Telefonaktiebolaget Lm Ericsson Class A's earnings presentation, Oct 15, 2024
Slide 1: Ericsson Third quarter 2024
Ericsson Third quarter 2024 October 15, 2024 © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024
Slide 2: Third quarter 2024 forward-looking statements
Third 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 b
Slide 3: Business Overview
Business Overview Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024
Slide 4: Q3 2024 – Key takeaways
Q3 2024 – Key takeaways ● Solid progress on strategic and operational priorities Organic1 sales YoY: – Programmable networks showing increased momentum – New JV to secure global supply of Network APIs -1% ● Sales starting to stabilize, declining by -1%1 YoY in Q3 – Strong sales growth in North Ameri
Slide 5: Sales development by market area and segment
Sales development by market area and segment Market area net sales Organic growth Networks Cloud Software Enterprise (Q3 2024, SEK b.) (Q3 2024 YoY) and Services 65% 24% 10% % of net sales FY 2023 North America 20.4 55% 22% Europe and 15.2 1% 25% Latin America South East Asia, 7.7 -43% 20% Oceania a
Slide 6: Progressing Enterprise strategic priorities
Progressing Enterprise strategic priorities Network APIs Joint Venture announced Ericsson Enterprise 5G ● JV agreed with 12 leading telecom operators, continuing ● New private 5G network portfolio and neutral host constructive discussions with further partners solutions ● JV will combine and sell ne
Slide 7: Financial Overview
Financial Overview Lars Sandström Chief Financial Officer © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024
Slide 8: Financial update Q3 2024
Financial update Q3 2024 Financial performance (adjusted) SEK b. Q3-24 Q3-23 YoY Q2-24 Organic sales growth : -1% YoY Net sales 61.8 64.5 -4% 59.8 • Strong growth in North America 55% • Slight growth in Europe, other markets declined Organic sales -1% Gross income 28.6 25.3 13% 26.3 Adjusted gross m
Slide 9: Key Financial trends
Key Financial trends 43% 42% 41% 40% 40% 40% 42% Sales 40% ● Gradual sales stabilization supported by North America Adjusted gross margin and adjusted EBITA 86.0 ● Positive development in adjusted gross margin and 71.9 62.6 64.4 64.5 61.8 adjusted EBITA 53.3 59.8 – Improved utilization of our supply
Slide 10: Mobile Networks Q3 2024
Mobile Networks Q3 2024 Networks Cloud Software and Services 22% 10% 20% 17% 15% 13% 14% 13% 4% 11% 3% 3% 1% -3% -2% -2% 58.6 42.5 42.4 41.5 45.0 33.7 37.7 40.0 20.2 13.4 15.1 15.6 19.6 13.0 15.2 15.0 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Net
Slide 11: Enterprise Q3 2024
Enterprise Q3 2024 Enterprise -9% -12% -12% -12% -13% -13% -14% -19% 6.3 6.0 6.4 6.7 6.7 6.0 6.5 6.3 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Net sales (SEK b.) Adjusted EBITA margin ● +7% organic sales growth in Enterprise Wireless Solutions ● -3% organic sales decline in Global Communicatio
Slide 12: Cash flow and financial position
Cash flow and financial position FCF before M&A Net cash (SEK) 15% 9% 16.9 12.5 4% 12.9 8% 6% 2% 7.6 -0.5 3.7 25.5 23.3 -5.0 13.6 -8.0 13.1 10.8 1% 7.8 0% 1.9 1.6 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 FCF (SEK b.) Rolling 12-month FCF/sales %
Slide 13: Outlook
Outlook1 Sales Networks Sales growth in Q4 is expected to be below average last three years seasonality Sales Sales growth in Q4 is expected to be below average last three years seasonality Cloud Software and Services Adj. gross margin Adjusted gross margin in Q4 is expected to be in the range 47%-4
Slide 14: Closing Remarks
Closing Remarks Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024
Slide 15: Summary
Summary ● Solid progress on strategic and operational priorities – Strengthen leadership in Mobile Networks – Focused expansion in Enterprise ● Maintaining technology leadership, while prudently managing our business ● Further progress to build out Global Network Platform for network APIs Focused on
Slide 16: Q&A
Q&A © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024
Slide 17: www.ericsson.com
www.ericsson.com © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024
Slide 18: Appendices
Appendices Appendix 1 – Adjusted gross margin and income development Appendix 2 – Adjusted EBITA development Appendix 3 – More information Appendix 4 – Ericsson Mobility Report, June 2024 | EHAJBOG Boglárka Hajdu | 2024-09-17 | Ericsson Internal | Page 18 of 24 © Telefonaktiebolaget LM Ericsson 2024
Slide 19: Appendix - Adjusted gross margin and income development
Appendix 1 - Adjusted gross margin and income development Adj. gross margin (%) (YoY change) 39.2% 48.7% 38.7% 52.4% 5.1% 46.3% + Adjusted gross income and (+8.9 p.p.) (+2.5 p.p.) (+3.6 p.p.) (+29.6 p.p.) margin increase in all segments + IPR licensing revenues Adj. gross income, SEK b. + Cost reduc
Slide 20: Appendix - Adjusted EBITA development
Appendix 2 - Adjusted EBITA development Adj. EBITA margin (%) (YoY change) 7.3% 20.3% 2.9% -12.4% -1.4% 12.6% + Adjusted gross income and (+7.7 p.p.) (+0.1 p.p.) (-3.5 p.p.) (+46.5 p.p.) margin increase in all segments + Cost reduction actions Adj. EBITA, SEK b. +3.0 0.0 -0.2 0.3 - Increased operati
Slide 21: Appendix - More information
Appendix 3 - More information Latest Event Sustainability and responsible business update June 18, 2024 Briefing session focused on sustainability and responsible business at Ericsson. Latest Information Third quarter 2024 Annual Report 2023 Ericsson Investor Relations homepage October 15, 2024 Eric
Slide 22: Appendix – Ericsson Mobility report, June 2024
Appendix 4 – Ericsson Mobility report, June 2024 Download the report here World population and mid-band coverage split by region (end of 2023) 35% ~20% Mid-band coverage Subscriptions are 5G. World 45% outside of China 1.7 billion 5G World 35% subscriptions Q1 2024 North America 85% Europe 30% Latin
Slide 23: 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 24: www.ericsson.com
www.ericsson.com © Telefonaktiebolaget LM Ericsson 2024 | Third quarter report 2024 | October 15, 2024