21 slides from Telefonaktiebolaget Lm Ericsson Class A's earnings presentation, Jul 12, 2024
Slide 1: Ericsson Second quarter 2024
Ericsson Second quarter 2024 July 12, 2024 © Telefonaktiebolaget LM Ericsson 2024 | Second quarter report 2024 | July 12, 2024
Slide 2: Second quarter 2024 forward-looking statements
Second 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 2024 | Second quarter report 2024 | July 12, 2024
Slide 4: Q2 2024 – Key takeaways
Q2 2024 – Key takeaways Organic1 sales YoY: ● Delivering on network technology leadership strategy; externally recognized as 5G leader for 4th consecutive year -7% ● Further progress to build out Global Network Platform for network APIs; Twelve partnerships already announced, two additional in Q2 Ad
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 (Q2 2024, SEK b.) (Q2 2024 YoY) and Services 65% 24% 10% % of net sales FY 2023 North America 16.6 14% 22% Europe and 15.6 -3% 25% Latin America South East Asia, 7.7 -44% 20% Oceania
Slide 6: Financial Overview
Financial Overview Lars Sandström Chief Financial Officer © Telefonaktiebolaget LM Ericsson 2024 | Second quarter report 2024 | July 12, 2024
Slide 7: Financial update Q2 2024
Financial update Q2 2024 Financial performance Adjusted SEK b. Q2-24 Q2-242 Q2-23 YoY Q1-24 ● Organic sales : -7% YoY Ex impairment Net sales 59.8 64.4 -7% 53.3 – Organic sales in North America grew by 14% Organic sales -7% ● Adjusted gross margin: 43.9% Gross income 26.3 24.7 7% 22.8 Gross margin 4
Slide 8: Financial trends Q2 2024
Financial trends Q2 2024 Net sales, adjusted EBITA, adjusted gross margin and adjusted EBITA margin 100 42.7% 43.9% 45 ● Reduced operator investment 42.2% 41.5% 41.1% 90 41.4% 39.8% 39.2% levels across most 38.3% 40 geographies 80 35 ● Strong adjusted gross margin 70 30 of 43.9%, supported by 60 25
Slide 9: Mobile Networks
Mobile Networks Highlights Segment Networks 70 25% ● Networks 60 50 20% – Reduced operator investment levels across most 40 15% geographies 30 10% 20 5% – Organic sales growth in North America of 20% YoY 10 0 0% – Strong adjusted gross margin of 46.1% Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24
Slide 10: Enterprise
Enterprise Highlights ● Organic sales stable YoY in Q2 Segment Enterprise – Growth in Enterprise Wireless Solutions and 8 0% Technologies and New Businesses 7 -5% – Sales in Global Communications Platform 6 -10% impacted by decision to reduce activities in some 5 4 -15% countries and Q4 2023 low mar
Slide 11: Cash flow and financial position
Cash flow and financial position First quarter highlights Free cash flow before M&A (SEK b.) Net cash (SEK b.) 20 14% 80 12% 70 15 FCF/Sales long-term target 9%-12% 10% 60 10 8% 50 5 6% 40 4% 0 2% 30 -5 0% 20 -10 -2% 10 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 0 FCF (SEK b.) Rolling 12-
Slide 12: Outlook
Outlook1 Sales Average seasonality between Q2 and Q3 last 3 years: +1% Networks Sales Cloud Software and Average seasonality between Q2 and Q3 last 3 years: +4% Services Adj. gross margin Adjusted gross margin in Q3 is expected to be in the range of 45-47% Networks Amortization ’Around’ SEK -0.5 b.
Slide 13: Closing Remarks
Closing Remarks Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2024 | Second quarter report 2024 | July 12, 2024
Slide 14: Summary
Summary ● Fully focused on strategy execution, in challenging environment – 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 O
Slide 15: Q&A
Q&A © Telefonaktiebolaget LM Ericsson 2024 | Second quarter report 2024 | July 12, 2024 This slide contains forward-looking statements. Actual result may be materially different. See the last page in this presentation for further information about forward-looking statements.
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Slide 17: Appendices
Appendices ● Appendix 1 – More information ● Appendix 2 – Ericsson Mobility Report, June 2024 © Telefonaktiebolaget LM Ericsson 2024 | Second quarter report 2024 | July 12, 2024
Slide 18: Appendix - More information
Appendix 1 - More information Latest Sustainability and responsible business update June 18, 2024 Event Briefing session focused on sustainability and responsible business at Ericsson. Latest Information Second quarter 2024 Annual Report 2023 Ericsson Investor Relations homepage July 12, 2024 Ericss
Slide 19: Appendix – Ericsson Mobility report, June 2024
Appendix 2 – Ericsson Mobility report, June 2024 Download the report here World population and mid-band coverage split by region (end of 2023) World 45% 35% ~20% Mid-band coverage Subscriptions are 5G. World 1 35% outside of China 1.7 billion 5G North America 85% subscriptions Q1 2024 Europe 30% Lat
Slide 20: 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
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