17 slides from Telefonaktiebolaget Lm Ericsson Class A's earnings presentation, Jul 16, 2021
Slide 1: Ericsson Second quarter 2021
Ericsson Second quarter 2021 July 16, 2021
Slide 2: Welcome
Welcome Peter Nyquist Vice President Investor Relations
Slide 3: Forward-looking statements notice
Second quarter 2021 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 4: Business overview
Business overview Börje Ekholm President and CEO
Slide 5: Strategy execution
Strategy execution ●Cloud RAN portfolio strengthened ●Two significant contracts signed in the US ●New IPR agreement reaffirms the value of our patent portfolio ●Prudent to forecast a materially lower market share in China for Networks and Digital Services ●Continuing to invest in compliance 5G Trans
Slide 6: Market Area Development
Market Area Development Net sales bridge Middle East & Africa: Sales SEK 4.5 (5.4) b. FX adjusted ● Sales declined in Networks and Digital Services due to lower 5G 14% investments in Middle East and macro impact in Africa 14% North East Asia: Sales SEK 7.1 (7.8) b. ● Lower 5G volumes in Mainland Chi
Slide 7: Good market momentum
Good market momentum Sales and gross margin Excluding restructuring charges Networks Group and segments 21Q2 20Q2 YoY Organic • Largest customer contract signed: SEK 71 b. for 5 years Ericsson Group 54.9 55.6 -1% 8% Gross margin 43.4% 38.2% Digital Services Networks 39.9 39.8 0% 11% • Write-down of
Slide 8: Financial overview
Financial overview Carl Mellander Chief Financial Officer © Telefonaktiebolaget LM Ericsson 2021 | Second quarter report 2021 | July 16, 2021 | Page 8
Slide 9: Operating leverage continued
Operating leverage continued Financial Performance Excluding restructuring charges ●Organic and FX adjusted sales: 8% YoY SEK b. 21Q2 20Q2 YoY 21Q1 ●Negative impact in China Net sales 54.9 55.6 -1% 49.8 Organic and FX adj. growth 8% ●Gross margin improvement mainly driven by Gross margin 43.4% 38.2%
Slide 10: Free cash flow and financial position
Free cash flow and financial position Financial Performance SEK b. Q221 Q220 ●Cash flow from operating activities SEK 5.9 (5.4) b. ● Higher incoming IPR payments EBIT excluding restructuring charges 5.8 4.5 Depreciation, amortization & impairment losses 2.1 2.2 ●Working capital stable despite sequen
Slide 11: IPR Portfolio Development
IPR Portfolio Development IPR bridge in SEK b. Illustrative Revenues from current IPR licensing contract portfolio 12 SEK ~7 b. on an annual basis 10 SEK 10.0 b. ● High activity in IPR renewal negotiations ● Lower volumes with one licensee 8 USD weakness ● One additional agreement was signed in July
Slide 12: Planning assumptions highlights
Planning assumptions highlights Please see the Q2 report for complete planning assumptions Market related ●Global RAN equipment market estimated to grow by 10% (3%) FY 2021. China is expected to grow by 11% (4%), North America by 12% (2%), Europe by 9% (3%). Source: Dell’Oro RAN report, May 2021 Eri
Slide 13: Summary
Summary Börje Ekholm President and CEO © Telefonaktiebolaget LM Ericsson 2021 | Second quarter report 2021 | July 16, 2021 | Page 13
Slide 14: Long-term growth opportunities
Long-term growth opportunities ●Well positioned to take advantage of continued market momentum ●Supply chain resilience to secure future customer demand ●Enterprise creates a long-term growth platform for 5G ●Highly dynamic North American market ●Committed to the group 2022 target © Telefonaktiebola
Slide 15: © Telefonaktiebolaget LM Ericsson 2021 | Second quarter report 2021 | July 16, 2021
© Telefonaktiebolaget LM Ericsson 2021 | Second quarter report 2021 | July 16, 2021 | Page 15
Slide 16: W
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Slide 17: 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