Shulou(Shulou.com)11/24 Report--

CTOnews.com January 25 news, Ericsson recently announced the fourth quarter of 2022 and 2022 full-year results. Ericsson achieved net sales of 86 billion Swedish kronor (currently about 56.9 billion yuan) in the quarter. Organic sales (adjusted in comparable units and currencies) increased by 1% year-on-year. In 2022, net sales were 271.5 billion Swedish kronor (currently about 179.7 billion yuan), and organic sales were up 3% from a year earlier.

Highlights of the fourth quarter results:

An IP agreement that resulted in total IPR revenues of SEK 6 billion (SEK 2.4 billion in the same period in 2021) and previously announced fees of SEK 4 billion, including DOJ reserves, Internet of things business transfers and cloud software and services contracts and product portfolio withdrawal, had an impact on the quarter.

The group's organic sales rose 1 per cent year-on-year, with intellectual property (IPR) revenue contributing 5 per cent. Reported sales of SEK 86 billion (SEK 73.1 billion for the same period in 2021), of which Vonage contributed SEK 4.1 billion.

Total revenue increased to SEK 35.6 billion (SEK 30.8 billion in the same period in 2021), while gross profit margin decreased to 41.4% (43.2% in the same period in 2021), mainly due to changes in the network business portfolio and previously announced contract exit fees. And cloud software and services portfolio adjustment.

Earnings before interest, tax, depreciation and amortisation (EBITA), excluding restructuring charges, reached SEK 9.3 billion (SEK 12.8 billion for the same period in 2021) and profit margin before interest, tax, depreciation and amortisation was 10.8 per cent (17.9 per cent for the same period in 2021). Earnings before interest, tax, depreciation and amortisation (EBITA) were affected by previously announced charges.

Driven by reduced inventories and high cash income, including intellectual property receipts, the free cash flow before mergers and acquisitions was SEK 16.9 billion (SEK 13.5 billion for the same period in 2021).

Affected by the decline in profit before interest and tax (EBIT), the rate of return on capital use was 15.4 per cent (26.6 per cent in the same period in 2021).

Key points of annual financial report for 2022:

Driven by 4% growth in the network business and 16% growth in the enterprise business, the group's organic sales increased by 3%. Reported sales of SEK 271.5 billion (SEK 232.3 billion for the same period in 2021).

Due to growth in networking, cloud software and services, and enterprise business, total revenue increased to SEK 113.3 billion (SEK 100.7 billion in the same period in 2021).

Profit before interest, tax, depreciation and amortisation (EBITA) reached SEK 29.1 billion (SEK 33.3 billion for the same period in 2021) and profit margin before interest, tax, depreciation and amortisation was 10.7 per cent (14.3 per cent for the same period in 2021). Profit before interest, tax, depreciation and amortisation (EBITA) was affected by the previously announced fee of SEK 5.5 billion, but was partially offset by an increase in revenue from intellectual property licensing.

EBIT, excluding restructuring charges, is 10.1% (13.9% for the same period in 2021). Excluding Vonage and previously announced fees, EBIT is 12.9%, reaching the target of 12-14% in 2022.

Net income is SEK 19.1 billion (SEK 23 billion for the same period in 2021). Diluted earnings per share (EPS) is SEK 5.62 (SEK 6.81 for the same period in 2021).

The free cash flow before mergers and acquisitions was SEK 22.2 billion (compared with SEK 32.1 billion for the same period in 2021). At the end of 2022, net cash was SEK 23.3 billion (compared with SEK 65.8 billion for the same period in 2021).

Due to higher capital use and lower earnings before interest and tax, the rate of return on capital use was 14.0% (18.4% for the same period in 2021).

The board of directors will recommend to the general meeting a dividend of SEK 2.70 per share for 2022 (SEK 2.50 for the same period in 2021).

B ö rje Ekholm, president and chief executive of Ericsson, said:

During the quarter, we signed a multi-year intellectual property patent licensing agreement with a major licensee. This positive result enables us to obtain more 5G patent licensing agreements in mobile phone manufacturers, as well as in new areas such as consumer electronics and the Internet of things. We expect IP revenue to grow significantly in the next 18-24 months.

Although supply chain challenges have eased this quarter, the inflationary environment remains. We still need to focus on overcoming the recent recession through business action and improving the company's cost-effectiveness. It is expected that our cost-saving action of SEK 9 billion will begin to take effect in the second quarter of 2023, and the profit margin of the network business in the first half of 2023 will decline due to changes in the business mix. Earnings before interest, tax, depreciation and amortisation (EBITA) in the first quarter will be slightly lower than last year, but will improve during the year.

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