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

Thanks to CTOnews.com netizen knsgccxr for the clue delivery! CTOnews.com April 19, Ericsson released its first quarter 2023 results. Total sales rose to 62.6 billion Swedish kronor (about 41.74 billion yuan) in the first quarter, up 14% from a year earlier, according to the financial report. Net sales (organic sales), adjusted in comparable units and currencies, were flat year-on-year. The gross profit margin excluding restructuring charges reached 39.8% in the first quarter, mainly affected by changes in the network business portfolio. The reported gross profit margin is 38.6%. In the first quarter of 2023, Ericsson made a net profit of 1.6 billion Swedish kronor (CTOnews.com), down 46 per cent from a year earlier. Due to the increase in operating costs, the free cash flow before mergers and acquisitions is-8 billion Swedish kronor (about-5.33 billion yuan).

The main points of the first quarter results are as follows:

The group's organic sales are the same as those in the same period last year. As expected, lower operators' capital expenditure and inventory optimization led to a 2% drop in organic sales in the network business. But the decline was offset by growth in other businesses. The overall sales report increased to 62.6 billion Swedish kronor.

Total revenue, excluding restructuring charges, increased to SEK 24.9 billion over the same period last year, mainly driven by enterprise business, cloud software and services businesses. Total revenue was reported to have increased slightly over the same period last year to SEK 24.2 billion.

The gross profit margin excluding restructuring costs reached 39.8%, which is mainly affected by changes in the network business portfolio. The reported gross profit margin is 38.6%.

Profit before interest, tax, depreciation and amortisation (EBITA) excluding restructuring charges is SEK 4.8 billion. Earnings before interest, tax, depreciation and amortisation (EBITA) reached SEK 3.8 billion.

Net income is 1.6 billion Swedish kronor. Diluted earnings per share (EPS) is SEK 0.45.

Excluding mergers and acquisitions, free cash flow is-8 billion Swedish kronor. Cash flow is affected by an increase in working capital. Net cash as at 31 March 2023 was SEK 13.6 billion, compared with SEK 23.3 billion as at 31 December 2022.

Ericsson said it was already accelerating its cost-saving program while identifying opportunities for additional savings of SEK 2 billion, which is expected to reduce costs by SEK 11 billion by the end of the year. Taking into account the expanded scope and increased costs of European projects, it is initially estimated that the annual restructuring cost may be about SEK 7 billion, more than half of which may be included in the cost in the second quarter. By 2024, restructuring costs are expected to return to normal, accounting for about 0.5 per cent of sales.

By the end of the first quarter, Ericsson had completed the sale of the Internet of things platform business, reducing quarterly losses by about SEK 250 million.

For the second quarter, Ericsson expects group profit margins before interest, tax, depreciation and amortisation to reach medium single digits. A gradual recovery is expected in the second half of 2023, mainly because the company expects inventory adjustments to be completed and cost-saving measures will begin to have an effect on the income statement.

With the expected recovery of the mobile network market by 2024, the turnaround of cloud software and services, the adjustment of product mix, the increase of R & D productivity, the increase of intellectual property revenue and the reduction of costs, Ericsson is expected to reach the target range of 15-18% of profit before long-term interest, tax, depreciation and amortization by 2024.

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