Form 6-K
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

July 24, 2009

 

 

LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

 

 

Torshamnsgatan 23, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No  x

 

 

Announcement of LM Ericsson Telephone Company, dated July 24, 2009 regarding “Ericsson reports second quarter results.”

 

 

 


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Ericsson reports

second quarter results

  

•        Sales SEK 52.1 (48.5) b, up 11% in comparable units, down 3% currency adjusted

 

•        Operating income1) before JVs SEK 6.9 (4.7) b, incl capital gains of SEK 0.8 (0.2) b

 

•        Operating margin1) before JVs 11.7% (9.3%), excl capital gains

 

•        Share in earnings from JVs SEK -2.1 (0.1) b

 

•        Income after financial items1) SEK 4.8 (4.7) b

 

•        Restructuring charges of SEK 3.6 (1.8) b, excl JV

 

•        Net income SEK 0.8 (2.0) b

 

•        Earnings per share SEK 0.26 (0.60)

 

•        Cash flow 2) SEK 9.9 (8.7) b

  

 

1)      Excluding restructuring charges

2)      Excluding cash outlays for restructuring of SEK 0.8 (0.2) b

   CEO COMMENTS

SALES BY QUARTER 2008

AND 2009 (SEK B)

 

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“There are different trends in the current market environment. The effects of the global economic climate on the mobile infrastructure market are now more notable, especially in markets with currencies under pressure and tougher credit environment,” said Carl-Henric Svanberg, President and CEO of Ericsson (NASDAQ:ERIC). “At the same time the consumer demand for new services and broadband capabilities are quickly accelerating and rollout of new technologies is ongoing in the world’s leading economies. There is also an increasing demand for professional services from operators across the world.

 

Network sales were down year-over-year currency adjusted, reflecting the present market environment. The continued strong acceleration of mobile data traffic is leading to high growth in sales of WCDMA and transmission as well as upgrades of IP networks. Meanwhile, GSM buildouts, primarily ongoing in emerging markets, have slowed and offset sales growth in other areas.

 

Services in total now represent 38% of sales, driven by strong Professional Services growth. Our leading position was confirmed by our first managed services contract in Africa with Zain and the network services contract with Sprint in the US. In the present economic climate, where operators focus on efficiency and cost reductions, Ericsson is benefiting from its sizeable services operation with both scale and global presence.

 

Our early decision to reduce costs is giving results and margins improved across all segments. Our target to reduce costs by SEK 10 b. from the second half of 2010 remains, and significant restructuring charges were made in the quarter. We continue to focus on our capital structure and have added long-term loans on favorable conditions. Our net cash position was further strengthened by a strong cash flow in the quarter,” concluded Carl-Henric Svanberg.

 

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FINANCIAL HIGHLIGHTS

Income statement and cash flow

 

     Second quarter     First quarter     Six months  

SEK b.

   2009     2008     Change     2009     Change     2009     2008     Change  

Net sales

   52.1      48.5      7   49.6      5   101.7      92.7      10

Net sales for comparable units

   52.1      47.1      11   49.6      5   101.7      89.6      14

Gross margin

   36.3   37.0   —        36.3   —        36.3   37.8   —     

EBITDA margin excl JVs

   16.8   14.8   —        13.2   —        15.1   13.8   —     

Operating income excl JVs

   6.9      4.7      49   4.7      47   11.6      8.0      45

Operating margin excl JVs

   13.3   9.6   —        9.5   —        11.4   8.7   —     

Income after financial items

   4.8      4.7      3   3.3      45   8.2      9.2      -11

Net income

   0.8      2.0      -61   1.8      -57   2.6      4.7      -44

EPS diluted, SEK

   0.26      0.59      -56   0.54      -52   0.79      1.42      -44

Adjusted cash flow1)

   9.9      8.7      —        -1.7      —        8.3      11.6      —     

Cash flow from operations

   9.1      8.5      —        -2.9      —        6.3      13.3      —     

 

All numbers, excl. EPS, Net income and Cash flow from operations excl. restructuring charges.

 

1) Cash flow from operations excl. restructuring cash outlays and in Q1 2008 a dividend from Sony Ericsson of SEK 2.2 b.

 

  

Sales in the quarter increased 11% year-over-year for comparable units, i.e. excluding Ericsson Mobile Platforms and PBX operations, but decreased 3% when adjusted for currency exchange rate effects and hedging.

 

In the quarter, gross margin, excluding restructuring charges, decreased year-over-year to 36.3% (37.0%), but was flat sequentially. Services sales have grown from 33% to 38% of total sales year-over-year. The margin decline is attributable to this mix shift and the transfer of Ericsson Mobile Platforms to ST-Ericsson.

 

Operating expenses amounted to SEK 13.6 (14.0) b. in the quarter, excluding restructuring charges. The year-over-year improvement is primarily a result of ongoing cost reduction activities, despite negative impact from currency exchange rate effects. Operating expenses as a percentage of sales declined to 26% (29%).

 

Operating income, excluding joint ventures, restructuring charges and capital gains of SEK 0.8 (0.2) b., amounted to SEK 6.1 (4.5) b. in the quarter resulting in an improved operating margin of 11.7% (9.3%). All three segments showed a positive margin development during the quarter. A weaker SEK affected income positively but was partly offset by a currency hedging loss.

 

Ericsson’s share in earnings from joint ventures in the quarter amounted to SEK -2.1 (0.1) b., including restructuring costs.

 

Financial net was SEK -0.1 (0.0) b. in the quarter, mainly resulting from negative effects of revaluation of financial assets and a lower interest net.

 

Net income amounted to SEK 0.8 (2.0) b. in the quarter and was negatively impacted by the losses in Sony Ericsson and ST-Ericsson.

 

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Adjusted cash flow amounted to SEK 9.9 (8.7) b., excluding cash outlays for restructuring of SEK 0.8 (0.2) b. The improvement in cash flow was mainly due to strong collections and improved working capital efficiency. Year-to-date cash conversion rate was 73%.

 

Trade receivables decreased sequentially due to strong collections. Despite this, days sales outstanding (DSO) remained high at 121 (124) days due to increased business activity and high invoicing in the later part of the quarter. There are also some effects from operators optimizing their cash situation in the tougher credit environment.

 

Balance sheet and other performance indicators   

SEK b.

   June 30
2009
    Mar 31
2009
    Dec 31
2008
 

Net cash

   27.9      22.9      34.7   

Interest-bearing liabilities and post-employment benefits

   47.6      41.2      40.4   

Trade receivables

   69.4      75.2      75.9   

Days sales outstanding

   121      124      106   

Inventory

   29.0      30.7      27.8   

Of which market unit inventory

   17.7      18.9      16.5   

Inventory days

   78      83      68   

Payable days

   59      65      55   

Customer financing, net

   3.1      2.8      2.8   

Return on capital employed

   5   7   11

Equity ratio

   51   52   50

 

  

Including dividend payment of SEK 6.0 b., the net cash position amounted to SEK 27.9 (22.9) b. Cash, cash equivalents and short-term investments amounted to SEK 75.5 (64.1) b.

 

In May, a USD 483 m. bond under the EMTN program matured and was paid. During the quarter, a 7-year long-term bilateral loan of USD 625 m. was signed with the Swedish Export Credit Corporation and in addition a EUR 600 m. 4-year bond was issued. These activities lengthen Ericsson’s average debt maturity profile and provide a more efficient capital structure. Of a total debt of SEK 39.5 b., SEK 3.6 b. mature in the next twelve months.

 

Customer financing remains low at a level of SEK 3.1 (2.8) b.

 

During the quarter, approximately SEK 2.0 b. of provisions were utilized, of which SEK 0.8 b. were related to restructuring. Additions of SEK 3.7 b. were made, of which SEK 1.8 b. related to restructuring. Reversals of SEK 0.1 b. were made.

 

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Cost reductions

 

In January, 2009, cost reduction activities were announced that target annual savings of SEK 10 b. from the second half of 2010, with an equal split between cost of sales and operating expenses. Restructuring charges are estimated to SEK 6-7 b. Restructuring charges related to activities launched in the second quarter amounted to SEK 3.6 b. At the end of the quarter, cash outlays of SEK 4.2 b. remain to be made.

 

Restructuring charges, SEK b.

   Second quarter
2009
   First quarter
2009
   Full year
2008

Cost of sales

   -1.3    -0.4    -2.5

Research and development expenses

   -1.7    -0.3    -2.7

Selling and administrative expenses

   -0.6    —      -1.5

Total

   -3.6    -0.7    -6.7

SEGMENT RESULTS

 

     Second quarter     First quarter     Six months  

SEK b.

   2009     2008     Change     2009     Change     2009     2008     Change  

Networks sales

   34.7      33.3      4   33.6      4   68.3      63.3      8

Of which network rollout

   5.9      4.8      24   4.7      27   10.6      9.3      14

EBITDA margin

   15   15   —        14   —        14   15   —     

Operating margin

   11   10   —        10   —        10   9   —     

Professional Services sales

   14.1      11.0      28   12.8      10   26.9      21.0      28

Of which managed services

   4.6      3.4      34   4.2      10   8.8      6.5      34

EBITDA margin

   17 %1)    16   —        17   —        17 %1)    16   —     

Operating margin

   16 %1)    14   —        15   —        15 %1)    14   —     

Multimedia sales2)

   3.3      2.7      23   3.2      3   6.5      5.3      24

EBITDA margin2)

   17   8   —        10   —        13   5   —     

Operating margin2)

   9   -1   —        2   —        5   -5   —     

Sales from divested and transferred businesses

   0.0      1.5      —        0.0      —        0.0      3.1      —     

Total sales

   52.1      48.5      7   49.6      5   101.7      92.7      10

 

All numbers exclude restructuring charges

 

1) Second quarter 2009 excludes a capital gain of SEK 0.8 b. from divestment of TEMS
2) 2008 and 2009 numbers for Multimedia excluding divested Ericsson Mobile Platforms and PBX operations.

 

SEGMENT SALES BY

QUARTER

2008 AND 2009 (SEK B)

 

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Networks

 

Networks sales increased in the quarter by 4% year-over-year but were down when adjusted for currency exchange rate effects. The EBITDA-margin of 15% was flat year-over-year despite the higher level of network rollout in the quarter, reflecting the cost improvement actions. The cost reduction activities announced at the beginning of this year are running according to plan.

 

WCDMA shows strong growth, reflecting the accelerating consumer demand for broadband services and the ongoing rollouts in China, Japan and the US. Meanwhile volumes of GSM equipment decreased from an all-time high in 2008, primarily as a result of operators’ increased cautiousness in several emerging markets.

 

In July, mobile broadband with MIMO technology enabling speeds of 28 Mbps, was commercially launched in Telecom Italia’s network. The continued traffic growth is driving upgrades of IP networks and transmission. As a result, SmartEdge, Packet Core and MiniLink products are all showing strong growth.

 

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Ericsson has completed the world’s largest upgrade of a live mobile network for Vodafone Essar India in record time. Ericsson replaced more than 10,500 GSM radio sites, reaching a peak rate of one site every minute. This was achieved in just 13 months, two months ahead of schedule.

 

Professional Services

 

Professional Services sales increased 28% year-over-year. Growth in local currencies amounted to 16% with managed services and systems integration growing the most. The demand for managed services is strong in the present economic environment and sales increased by 34% year-over-year.

 

EBITDA-margin in the quarter reached 17% (16%) as a result of continued efficiency gains. This excludes a capital gain of SEK 0.8 b. for the divested TEMS operation.

 

A groundbreaking 7-year services agreement has been made with Sprint in the US at a total value of USD 4.5 – 5 b. The contract includes the transfer of approximately 6,000 employees. The first major managed services contract in Africa was signed with Zain, Nigeria. Both contracts will commence during the third quarter and, as in previous large services contracts, there will be some transition and transformation costs which will impact margins. The agreement with 3 in Italy, signed 2005, has been renewed with a smaller scope which will impact sequential quarterly growth.

 

Including these contracts, the total number of subscribers in managed operations is now 350 million, of which 50% are in high-growth markets.

 

Multimedia

 

Multimedia sales increased by 23% year-over-year for comparable units, i.e. excluding the divested PBX operations and Ericsson Mobile Platforms. Revenue Management and multimedia brokering (IPX) continued to show good growth. EBITDA-margin in the quarter for comparable units was 17% (8%), reflecting a higher proportion of software license sales and positive effects from cost reduction activities. Margins may still vary between quarters.

 

Sony Ericsson Mobile Communications

 

     Second quarter     First quarter     Six months  

EUR m.

   2009     2008     Change     2009     Change     2009     2008     Change  

Number of units shipped (m.)

   13.8      24.4      -43   14.5      -5   28.3      46.7      -39

Average selling price (EUR)

   122      116      5   120      2   121      118      2

Net sales

   1,684      2,820      -40   1,736      -3   3,419      5,522      -38

Gross margin

   12   23   —        8   —        10   26   —     

Operating margin

   -16   0   —        -21   —        -19   3   —     

Income before taxes

   -283      8      —        -370      —        -653      201      —     

Income before taxes, excl restructuring charges

   -283      19      —        -358      —        -640      212      —     

Net income

   -213      6      —        -293      —        -505      139      —     

 

   Units shipped in the quarter were 13.8 million, a decrease of 43% year-over-year. Sales in the quarter were EUR 1,684 million, a decrease of 40% year-over-year. This was due to continued challenging market conditions in all regions, particularly in Latin American markets. Gross margin improved sequentially, despite lower volumes and sales, driven by a more favorable product mix and less significant write-off costs than the previous quarter.

 

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Income before taxes for the quarter, excluding restructuring charges, was a loss of EUR 283 (19) million. The lower loss, compared to the previous quarter, was due to the better gross margin, as well as reduced operating expenses that are a result of the ongoing cost savings program. As of June 30, 2009, Sony Ericsson retained a good net cash position of EUR 965 million.

 

Ericsson’s share in Sony Ericsson’s income before tax was SEK -1.5 (0.0) b. in the quarter.

 

ST-Ericsson            
     2009    2008

USD m.

   Second quarter    Feb-Mar    Proforma
first quarter
   Proforma
second quarter

Net sales

   666    391    562    966

Adjusted operating income1)

   -165    -78    -150    -69

Operating income before taxes

   -224    -98    -179    -94

Net income

   -213    -89    —      —  

 

1)      Operating loss adjusted for amortization of acquisition related intangibles and restructuring charges

 

  

Net sales in the quarter were higher than normal seasonal patterns and showed an increase of 18.5% sequentially. This was mainly due to higher demand in China, driven by TD-SCDMA, and in the rest of Asia-Pacific as well as alignment of inventory to demand levels across the handset supply chain.

 

Adjusted operating loss in the quarter was USD -165 (-69) m. The USD 250 m. cost synergies program, defined by ST-NXP Wireless in the third quarter 2008, is expected to be completed by year-end, according to schedule. The new restructuring plan of USD 230 m. cost synergies, announced at the end of April, has been initiated and is expected to be completed by the second quarter 2010.

 

ST-Ericsson is reported in US-GAAP. Ericsson’s share in ST-Ericsson’s income before tax, adjusted to IFRS, was SEK -0.6 b. in the quarter, including restructuring charges of SEK 0.1 b. Ericsson Mobile Platforms incurred a loss of SEK 0.5 b. in January 2009, which is added to the result in segment ST-Ericsson.

 

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REGIONAL OVERVIEW

 

     Second quarter     First quarter     Six months  

Sales, SEK b.

   2009    2008    Change     2009    Change     2009    2008    Change  

Western Europe

   11.4    12.1    -6   11.2    1   22.6    23.8    -5

Central and Eastern Europe, Middle East and Africa

   12.6    11.2    12   12.5    1   25.1    22.4    12

Asia Pacific

   17.4    15.8    10   16.3    7   33.7    28.7    17

Latin America

   4.8    5.0    -3   4.4    10   9.2    9.1    1

North America

   5.9    4.4    34   5.2    14   11.1    8.7    28

Total

   52.1    48.5    7   49.6    5   101.7    92.7    10

 

   Western Europe sales were up 4% year-over-year for comparable units, i.e. excluding Ericsson Mobile Platforms and the PBX operations. Italy and the Netherlands showed good growth while Spain remains weak. UK showed positive development driven by good growth in managed services.

REGIONAL SALES BY

QUARTER

2008 AND 2009 (SEK B)

 

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In Central and Eastern Europe, Middle East and Africa, sales increased by 12% year-over-year but with significant variations between countries reflecting the economic development. Several countries in Eastern Europe are weak although Russia improved in the quarter. Egypt, Saudi Arabia and Turkey showed good development, while sales in Middle East overall was slightly down.

 

Asia Pacific sales increased 10% year-over-year. China remains strong and was Ericsson’s largest market in the quarter. The ongoing nationwide 3G rollout is progressing well, with the first phase already completed. The activity in the Indian market remains high, even though sales were slightly lower year-over-year due to project phasing. Australia, Indonesia and Japan were also strong, while operators in Bangladesh and Pakistan have reduced investments dramatically due to tough local business conditions. Republic of Korea is another country signing up for LTE technology as part of a strategy to build an intelligent sustainable society.

 

Latin American sales were also affected by the economic slow-down and decreased by 3% year-over-year. Central America, Brazil and Mexico were weaker, while Chile and Argentina showed good growth.

 

North American sales increased by 34% year-over-year, driven by demand for mobile broadband and currency exchange rate effects. Ericsson signed its first network services deal in the region on July 9 with Sprint. Ericsson is now a strategic supplier to the four largest mobile operators in the US.

 

MARKET DEVELOPMENT

 

Growth rates are based on Ericsson and market estimates.

 

The global economic slowdown is affecting all parts of the society. However, we believe that the fundamentals for longer-term positive development for our industry remain solid. The need for telecommunication continues to grow and plays a vital role for the development of a sustainable and prosperous society. Ericsson is well positioned to drive and benefit from this development.

 

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There is continued growth in mobile subscriptions, although the current growth rate is lower than in 2008. Mobile subscriptions grew by some 149 million in the quarter to a total of 4.3 billion. The number of new WCDMA subscriptions is accelerating and grew by 40 million in the quarter to a total of 377 million. In the first quarter, fixed broadband connections grew to 408 million, adding 13 million subscribers.

 

The traffic in the mobile networks is accelerating, which creates need for new and expanded mobile networks and corresponding professional services. GSM/WCDMA/LTE is the dominating technology track. WCDMA is growing strongly and currently surpasses GSM in deliveries. The build-out of telecommunications in emerging markets continues, and although they represent less than one third of global GDP they represent significantly more of the market for mobile network equipment.

 

Data traffic, as part of operator revenues, continues to increase. Mobile operators’ data revenues have increased from 20% in the first quarter to some 25% of total revenues and in some markets mobile data is now more than 30% of total revenues. In addition to capacity enhancements, operators face the challenge of converting to all-IP broadband networks. This will include increased deployments of broadband access, routing and transmission equipment along with next-generation service delivery and revenue management systems.

 

There is continued strong growth in services, fueled by operators’ desire to reduce operating expenses and improve efficiency in network operation and maintenance. The move toward all-IP and increased network complexity will create further demand for systems integration and consulting.

 

PARENT COMPANY INFORMATION

 

Net sales for the six-month period amounted to SEK 0.3 (3.1) b. and income after financial items was SEK 5.2 (7.0) b. Effective January 1, 2009, the right to all license revenues from third parties related to patent licenses was transferred to Ericsson AB, a wholly owned subsidiary, and consequently net sales in 2009 will be insignificant compared to 2008. During the second quarter, the TEMS operations were sold with a capital gain of SEK 0.8 b.

 

Major changes in the Parent Company’s financial position for the six-month period include investments of SEK 8.4 b. in the joint venture ST-Ericsson, decreased current and non-current receivables from subsidiaries of SEK 6.6 b., decreased other current receivables of SEK 3.5 b. and increased cash, bank and short-term investments of SEK 3.1 b. During the second quarter, the dividend payment of SEK 5.9 b. decided by the Annual General Meeting was made. Notes and bond loans increased by SEK 11.1 b. through new borrowings of EUR 0.6 b. and USD 0.6 b., while current maturities of long-term borrowings decreased by SEK 3.7 b. at repayment of a USD 0.5 b. loan. Other current liabilities decreased by SEK 6.0 b. As per June 30, 2009, cash, bank and short-term investments amounted to SEK 62.3 (59.2) b.

 

In the second quarter, as decided by the Annual General Meeting 2009, a stock issue and a subsequent stock repurchase of 27,000,000 shares was carried out related to Ericsson’s Long-Term Variable Remuneration Program 2009 (LTV 2009). In accordance with the conditions of the Stock Purchase Plans and Option Plans for Ericsson employees, 1,577,990 shares from treasury stock were sold or distributed to employees during the second quarter. The holding of treasury stock at June 30, 2009, was 84,380,337 Class B shares.

 

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OTHER INFORMATION

New President and CEO appointed

On June 25, 2009, the Ericsson Board of Directors announced the appointment of Hans Vestberg as President and CEO as of January 1, 2010. Carl-Henric Svanberg has decided to leave as President and CEO of Ericsson and take on the position as Chairman of BP as of January 1, 2010. Svanberg remains as a member of the Ericsson Board of Directors.

Acquisition of Elcoteq’s operations in Tallinn

On June 17, 2009, Ericsson announced the purchase of Elcoteq’s manufacturing operation in Tallinn to secure manufacturing capacity. The purchase price was EUR 30 m., relating to inventory and some minor assets. The agreement includes transfer of about 1,200 employees.

Ericsson holds more than 95% of LHS shares

On July 3, 2009, Ericsson announced that it held shares representing more than 95% of the outstanding shares in LHS. Ericsson has informed LHS that it requests a squeeze-out resolution to be passed at next meeting of shareholders in LHS.

Increase in total number of votes

On June 30, 2009, Ericsson announced an increase in the number of votes caused by the Company having converted 27,000,000 newly issued Class C shares into Class B shares. This is in accordance with the resolution by the Annual General Meeting 2009 to expand the treasury stock as part of the financing of the long-term variable remuneration program. Shares held by the Company are not eligible for exercise of any voting rights.

Acquisition of systems integration company Bizitek in Turkey

On May 28, 2009, Ericsson announced that is has acquired all shares in Bizitek, the leading Turkish integrator of business support systems. All 116 employees will be transferred to Ericsson.

Assessment of risk environment

Ericsson’s operational and financial risk factors and uncertainties are described under “Risk factors Assessment of risk environment” in our Annual Report 2008.

Risk factors and uncertainties in focus during the forthcoming six-month period for the Parent Company and the Ericsson Group include:

 

   

potential negative effects of the continued uncertainty in the financial markets and the weak economic business environment on operators’ willingness to invest in network development as well as uncertainty regarding the financial stability of suppliers, for example due to lack of borrowing facilities, or reduced consumer telecom spending, or increased pressure on us to provide financing;

 

   

effects on gross margins and/or working capital of the product mix in the Networks segment between sales of software, upgrades and extensions and the proportion of new network build-outs and break-in contracts;

 

   

a volatile sales pattern in the Multimedia segment or variability in our overall sales seasonality could make it more difficult to forecast future sales;

 

   

results and capital needs of our two major joint ventures, Sony Ericsson and ST-Ericsson, which both are negatively affected to a larger extent than our three other segments by the current economic slowdown;

 

   

effects of the ongoing industry consolidation among our customers as well as between our largest competitors, e.g. intensified price competition;

 

   

changes in foreign exchange rates, in particular USD and EUR;

 

   

continued political unrest or instability in certain markets.

Ericsson conducts business in certain countries which are subject to trade restrictions or which are focused on by certain investors. We stringently follow all relevant regulations and trade embargos applicable to us in our dealings with customers operating in such

 

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countries. Moreover, Ericsson operates globally in accordance with Group level policies and directives for business ethics and conduct. In no way should our business activities in these countries be construed as supporting a particular political agenda or regime. We have activities in such countries mainly due to that certain customers with multi-country operations put demands on us to support them in all of their markets.

Please refer further to Ericsson’s Annual Report 2008, where we describe our risks and uncertainties along with our strategies and tactics to mitigate the risk exposures or limit unfavorable outcomes.

 

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BOARD ASSURANCE

The Board of Directors and the CEO certify that the financial report for the first six months gives a fair view of the performance of the business, position and profit or loss of the Company and the Group, and describes the principal risks and uncertainties that the Company and the companies in the Group face.

Stockholm, July 24, 2009

Telefonaktiebolaget LM Ericsson (publ)

Org. Nr. 556016-0680

 

Sverker Martin-Löf

Deputy chairman

  

Michael Treschow

Chairman

  

Marcus Wallenberg

Deputy chairman

Roxanne S. Austin

Member of the board

  

Sir Peter L. Bonfield

Member of the board

  

Anders Nyrén

Member of the board

Börje Ekholm

Member of the board

  

Ulf J. Johansson

Member of the board

  

Nancy McKinstry

Member of the board

Anna Guldstrand

Member of the board

  

Jan Hedlund

Member of the board

  

Karin Åberg

Member of the board

  

Carl-Henric Svanberg

Member of the board and

President and CEO

  

 

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AUDITORS’ REVIEW REPORT

We have reviewed this report for the period January 1 to June 30, 2009, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this financial information based on our review.

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by FAR SRS. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS, and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group and with the Swedish Annual Accounts Act regarding the Parent Company.

Stockholm, July 24, 2009

PricewaterhouseCoopers AB

Peter Clemedtson

Authorized Public Accountant

Date for next report: October 22, 2009

EDITOR’S NOTE

To read the complete report with tables, please go to:

www.ericsson.com/investors/financial_reports/2009/6month09-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson headquarters, Torshamnsgatan 23, Stockholm, at 09.00 (CET), July 24.

An analysts, investors and media conference call will begin at 14.00 (CET).

Live webcasts of the press conference and conference call as well as supporting slides will be available at www.ericsson.com/press and www.ericsson.com/investors.

 

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FOR FURTHER INFORMATION, PLEASE CONTACT

Henry Sténson, Senior Vice President, Communications

Phone: +46 10 719 4044

E-mail: investor.relations@ericsson.com or press.relations@ericsson.com

 

Investors

Gary Pinkham, Vice President,

Investor Relations

Phone: +46 10 719 0000

E-mail: investor.relations@ericsson.com

 

Susanne Andersson,

Investor Relations

Phone: +46 10 719 4631

E-mail: investor.relations@ericsson.com

 

Andreas Hedemyr,

Investor Relations

Phone: +46 10 714 3748

E-mail: investor.relations@ericsson.com

 

Telefonaktiebolaget LM Ericsson (publ)

Org. number: 556016-0680

Torshamnsgatan 23

SE-164 83 Stockholm

Phone: +46 10 719 0000

www.ericsson.com

  

Media

Åse Lindskog, Vice President,

Head of Media Relations

Phone: +46 10 719 9725, +46 730 244 872

E-mail: press.relations@ericsson.com

 

Ola Rembe, Vice President,

Phone: +46 10 719 9727, +46 730 244 873

E-mail: press.relations@ericsson.com

 

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Disclosure Pursuant to the Swedish Securities Markets Act

Ericsson discloses the information provided herein pursuant to the Securities Markets Act. The information was submitted for publication at 07.30 CET, on July 24, 2009.

Safe Harbor Statement of Ericsson under the US Private Securities Litigation Reform Act of 1995;

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans to launch new products and services; (xiii) assessments of risks; (xiv) integration of acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements of intellectual property rights of others.

In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for Ericsson include, but are not limited to: (i) material adverse changes in the markets in which we operate or in global economic conditions; (ii) increased product and price competition; (iii) reductions in capital expenditure by network operators; (iv) the cost of technological innovation and increased expenditure to improve quality of service; (v) significant changes in market share for our principal products and services; (vi) foreign exchange rate or interest rate fluctuations; and (vii) the successful implementation of our business and operational initiatives.

 

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FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION

 

     Page

Financial statements

  

Consolidated income statement and statement of comprehensive income

   16

Consolidated balance sheet

   17

Consolidated statement of cash flows

   18

Consolidated statement of changes in equity

   19

Consolidated income statement - isolated quarters

   20

Consolidated statement of cash flows - isolated quarters

   21

Parent Company income statement

   22

Parent Company balance sheet

   22
     Page

Additional information

  

Accounting policies

   23

Net sales by segment by quarter

   24

Operating income by segment by quarter

   25

Operating margin by segment by quarter

   25

EBITDA by segment by quarter

   26

EBITDA margin by segment by quarter

   26

Net sales by market area by quarter

   27

External net sales by market area by segment

   28

Top 15 markets in sales

   28

Provisions

   29

Number of employees

   29

Information on investments in assets subject to depreciation, amortization and impairment

   29

Other information

   30

Ericsson planning assumptions for year 2009

   30

Consolidated operating income, excluding restructuring charges

   31

Restructuring charges by function

   31

Restructuring charges by segment

   31

Operating income by segment, excluding restructuring charges

   32

Operating margin by segment, excluding restructuring charges

   32

EBITDA by segment, excluding restructuring charges

   32

EBITDA margin by segment, excluding restructuring charges

   32

 

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Consolidated Income Statement

 

     Apr - Jun           Jan - Jun        

SEK million

   2009     2008     Change     2009     2008     Change  

Net sales

   52,142      48,532      7   101,711      92,707      10

Cost of sales

   -34,531      -31,206      11   -66,488      -58,562      14
                                    

Gross income

   17,611      17,326      2   35,223      34,145      3

Gross margin %

   33.8   35.7     34.6   36.8  

Research and development expenses

   -8,451      -8,932      -5   -15,531      -17,498      -11

Selling and administrative expenses

   -7,443      -6,271      19   -14,306      -12,377      16
                                    

Operating expenses

   -15,894      -15,203      5   -29,837      -29,875      0

Other operating income and expenses

   1,640      704      133   1,982      1,143      73
                                    

Operating income before shares in earnings of JV and associated companies

   3,357      2,827      19   7,368      5,413      36

Operating margin % before shares in earnings of JV and associated companies

   6.4   5.8     7.2   5.8  

Shares in earnings of JV and associated companies

   -2,144      62        -4,380      973     
                                    

Operating income

   1,213      2,889      -58   2,988      6,386      -53

Financial income

   4      503        1,264      1,168     

Financial expenses

   -79      -511        -536      -984     
                                    

Income after financial items

   1,138      2,881      -60   3,716      6,570      -43

Taxes

   -341      -835        -1,086      -1,905     
                                    

Net income

   797      2,046      -61   2,630      4,665      -44
                                    

Net income attributable to:

            

- stockholders of the Parent Company

   831      1,901        2,548      4,546     

- minority interests

   -34      145        82      119     

Other information

            

Average number of shares, basic (million) 1)

   3,188      3,183        3,188      3,182     

Earnings per share, basic (SEK) 1) 2)

   0.26      0.60        0.80      1.43     

Earnings per share, diluted (SEK) 1) 2)

   0.26      0.59        0.79      1.42     

Statement of Comprehensive Income

 

     Apr - Jun    Jan - Jun

SEK million

   2009    2008    2009    2008

Net income

   797    2,046    2,630    4,665

Actuarial gains and losses related to pensions

   902    -277    -282    -1,079

Revaluation of other investments in shares and participations Fair value remeasurement reported in equity

   —      892    -1    886

Cash flow hedges

           

Gains(+)/losses(-) arising during the period

   1,682    26    -904    1,187

Less: Reclassification adjustments for gains(-)/losses(+) included in profit or loss

   1,042    -788    5,444    -1,016

Less: Adjustments for amounts transferred to initial carrying amount of hegded items

   —      —      -1,261    —  

Changes in cumulative translation adjustments

   -1,593    1,250    1,867    -2,006

Tax on items reported directly in or transferred from equity

   -870    323    -1,026    234
                   

Other comprehensive income

   1,163    1,426    3,837    -1,794
                   

Total comprehensive income

   1,960    3,472    6,467    2,871
                   

Total Comprehensive Income attributable to:

           

- Stockholders of the Parent Company

   2,054    3,307    6,380    2,774

- Minority interests

   -94    165    87    97

 

1)

A reverse split 1:5 was made in June 2008. Comparative figures are restated accordingly.

2)

Based on Net income attributable to stockholders of the Parent Company

 

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Consolidated Balance Sheet

 

     Jun 30    Mar 31    Dec 31

SEK million

   2009    2009    2008

ASSETS

        

Non-current assets

        

Intangible assets

        

Capitalized development expenses

   1,601    1,449    2,782

Goodwill

   25,241    26,230    24,877

Intellectual property rights, brands and other intangible assets

   17,776    20,171    20,587

Property, plant and equipment

   10,161    10,107    9,995

Financial assets

        

Equity in JV and associated companies

   14,661    16,499    7,988

Other investments in shares and participations

   306    310    309

Customer financing, non-current

   987    991    846

Other financial assets, non-current

   4,071    4,310    4,917

Deferred tax assets

   13,676    14,571    14,858
              
   88,480    94,638    87,159

Current assets

        

Inventories

   29,036    30,703    27,836

Trade receivables

   69,374    75,202    75,891

Customer financing, current

   2,161    1,856    1,975

Other current receivables

   16,744    16,062    17,818

Short-term investments

   38,556    39,707    37,192

Cash and cash equivalents

   36,963    24,348    37,813
              
   192,834    187,878    198,525

Total assets

   281,314    282,516    285,684
              

EQUITY AND LIABILITIES

        

Equity

        

Stockholders’ equity

   141,658    145,381    140,823

Minority interests in equity of subsidiaries

   1,286    1,442    1,261
              
   142,944    146,823    142,084

Non-current liabilities

        

Post-employment benefits

   8,065    8,941    9,873

Provisions, non-current

   460    452    311

Deferred tax liabilities

   2,517    2,785    2,738

Borrowings, non-current

   35,949    25,061    24,939

Other non-current liabilities

   1,904    1,755    1,622
              
   48,895    38,994    39,483

Current liabilities

        

Provisions, current

   13,497    12,140    14,039

Borrowings, current

   3,573    7,157    5,542

Trade payables

   19,722    21,888    23,504

Other current liabilities

   52,683    55,514    61,032
              
   89,475    96,699    104,117

Total equity and liabilities

   281,314    282,516    285,684
              

Of which interest-bearing liabilities and post-employment benefits

   47,587    41,159    40,354

Net cash

   27,932    22,896    34,651

Assets pledged as collateral

   429    430    416

Contingent liabilities

   931    1,012    1,080

 

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Consolidated Statement of Cash Flows

 

     Apr - Jun    Jan - Jun    Jan - Dec
2008

SEK million

   2009    2008    2009    2008   

Operating activities

              

Net income

   797    2,046    2,630    4,665    11,667

Adjustments to reconcile net income to cash

              

Taxes

   -640    -278    -1,268    -590    1,032

Earnings/dividends in JV and associated companies

   1,718    -41    3,482    1,695    4,154

Depreciation, amortization and impairment losses

   3,112    2,529    4,964    4,743    8,674

Other

   -643    169    -1,266    -420    458
                        

Net income affecting cash

   4,344    4,425    8,542    10,093    25,985

Changes in operating net assets

              

Inventories

   1,606    -1,906    -756    -4,817    -3,927

Customer financing, current and non-current

   -267    371    -268    1,031    549

Trade receivables

   5,017    -356    6,827    1,926    -11,434

Trade payables

   -1,863    1,833    -3,223    1,227    4,794

Provisions and post-employment benefits

   1,532    967    -1,733    1,538    3,830

Other operating assets and liabilities, net

   -1,238    3,210    -3,116    2,276    4,203
                        
   4,787    4,119    -2,269    3,181    -1,985

Cash flow from operating activities

   9,131    8,544    6,273    13,274    24,000

Investing activities

              

Investments in property, plant and equipment

   -1,189    -893    -2,207    -1,839    -4,133

Sales of property, plant and equipment

   114    108    139    317    1,373

Acquisitions/divestments of subsidiaries and other operations, net

   981    602    -8,510    609    1,836

Product development

   -327    -422    -536    -755    -1,409

Other investing activities

   886    12    -531    216    944

Short-term investments

   522    -1,392    98    2,667    -7,155
                        

Cash flow from investing activities

   987    -1,985    -11,547    1,215    -8,544

Cash flow before financing activities

   10,118    6,559    -5,274    14,489    15,456

Financing activities

              

Dividends paid

   -5,956    -8,008    -5,956    -8,014    -8,240

Other financing activities

   8,012    -3,581    9,886    -4,607    1,032
                        

Cash flow from financing activities

   2,056    -11,589    3,930    -12,621    -7,208

Effect of exchange rate changes on cash

   441    308    494    517    1,255

Net change in cash

   12,615    -4,722    -850    2,385    9,503

Cash and cash equivalents, beginning of period

   24,348    35,417    37,813    28,310    28,310

Cash and cash equivalents, end of period

   36,963    30,695    36,963    30,695    37,813

 

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Consolidated Statement of Changes in Equity

 

SEK million

   Jan - Jun
2009
   Jan - Jun
2008
   Jan - Dec
2008

Opening balance

   142,084    135,052    135,052

Total comprehensive income

   6,467    2,871    14,615

Stock issue

   135    —      100

Sale of own shares

   -107    71    -12

Repurchase of own shares

   —      —      —  

Stock purchase and stock option plans

   324    225    589

Dividends paid

   -5,956    -8,014    -8,240

Business combinations

   -3    —      -20
              

Closing balance

   142,944    130,205    142,084
              

 

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Consolidated Income Statement – Isolated Quarters

 

     2009     2008  

SEK million

   Q2     Q1     Q4     Q3     Q2     Q1  

Net sales

   52,142      49,569      67,025      49,198      48,532      44,175   

Cost of sales

   -34,531      -31,957      -44,522      -31,577      -31,206      -27,356   
                                    

Gross income

   17,611      17,612      22,503      17,621      17,326      16,819   

Gross margin %

   33.8   35.5   33.6   35.8   35.7   38.1

Research and development expenses

   -8,451      -7,080      -8,227      -7,859      -8,932      -8,566   

Selling and administrative expenses

   -7,443      -6,863      -8,293      -6,304      -6,271      -6,106   
                                    

Operating expenses

   -15,894      -13,943      -16,520      -14,163      -15,203      -14,672   

Other operating income and expenses

   1,640      342      1,502      332      704      439   
                                    

Operating income before shares in earnings of JV and associated companies

   3,357      4,011      7,485      3,790      2,827      2,586   

Operating margin % before shares in earnings of JV and associated companies

   6.4   8.1   11.2   7.7   5.8   5.9

Shares in earnings of JV and associated companies

   -2,144      -2,236      -1,278      -131      62      911   
                                    

Operating income

   1,213      1,775      6,207      3,659      2,889      3,497   

Financial income

   4      1,260      1,191      1,099      503      665   

Financial expenses

   -79      -457      -882      -618      -511      -473   
                                    

Income after financial items

   1,138      2,578      6,516      4,140      2,881      3,689   

Taxes

   -341      -745      -2,452      -1,202      -835      -1,070   
                                    

Net income

   797      1,833      4,064      2,938      2,046      2,619   
                                    

Net income attributable to:

            

- Stockholders of the Parent Company

   831      1,717      3,885      2,842      1,901      2,645   

- Minority interests

   -34      116      179      96      145      -26   

Other information

            

Average number of shares, basic (million) 1)

   3,188      3,187      3,185      3,184      3,183      3,181   

Earnings per share, basic (SEK) 1) 2)

   0.26      0.54      1.22      0.89      0.60      0.83   

Earnings per share, diluted (SEK) 1) 2)

   0.26      0.54      1.21      0.89      0.59      0.83   

 

1)

A reverse split 1:5 was made in June 2008. Comparative figures are restated accordingly.

2)

Based on Net income attributable to stockholders of the Parent Company.

 

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Consolidated Statement of Cash Flows – Isolated Quarters

 

     2009    2008

SEK million

   Q2    Q1    Q4    Q3    Q2    Q1

Operating activities

                 

Net income

   797    1,833    4,064    2,938    2,046    2,619

Adjustments to reconcile net income to cash

                 

Taxes

   -640    -628    1,965    -343    -278    -311

Earnings/dividends in JV and associated companies

   1,718    1,764    1,550    909    -41    1,736

Depreciation, amortization and impairment losses

   3,112    1,852    2,059    1,872    2,529    2,214

Other

   -643    -623    -379    1,257    169    -589
                             

Net income affecting cash

   4,344    4,198    9,259    6,633    4,425    5,669

Changes in operating net assets

                 

Inventories

   1,606    -2,362    2,768    -1,878    -1,906    -2,912

Customer financing, current and non-current

   -267    -1    -619    137    371    660

Trade receivables

   5,017    1,810    -9,584    -3,776    -356    2,282

Trade payables

   -1,863    -1,360    2,164    1,403    1,833    -606

Provisions and post-employment benefits

   1,532    -3,265    672    1,620    967    571

Other operating assets and liabilities, net

   -1,238    -1,878    2,303    -376    3,210    -934
                             
   4,787    -7,056    -2,296    -2,870    4,119    -939

Cash flow from operating activities

   9,131    -2,858    6,963    3,763    8,544    4,730

Investing activities

                 

Investments in property, plant and equipment

   -1,189    -1,018    -1,297    -997    -893    -946

Sales of property, plant and equipment

   114    25    628    428    108    209

Acquisitions/divestments of subsidiaries and other operations, net

   981    -9,491    1,113    114    602    7

Product development

   -327    -209    -393    -261    -422    -333

Other investing activities

   886    -1,417    884    -156    12    204

Short-term investments

   522    -424    -5,216    -4,606    -1,392    4,059
                             

Cash flow from investing activities

   987    -12,534    -4,281    -5,478    -1,985    3,200

Cash flow before financing activities

   10,118    -15,392    2,682    -1,715    6,559    7,930

Financing activities

                 

Dividends paid

   -5,956    —      -38    -188    -8,008    -6

Other financing activities

   8,012    1,874    856    4,783    -3,581    -1,026
                             

Cash flow from financing activities

   2,056    1,874    818    4,595    -11,589    -1,032

Effect of exchange rate changes on cash

   441    53    611    127    308    209

Net change in cash

   12,615    -13,465    4,111    3,007    -4,722    7,107

Cash and cash equivalents, beginning of period

   24,348    37,813    33,702    30,695    35,417    28,310

Cash and cash equivalents, end of period

   36,963    24,348    37,813    33,702    30,695    35,417

 

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Parent Company Income Statement

 

     Apr - Jun    Jan - Jun

SEK million

       2009            2008        2009    2008

Net sales

   26    1,160    264    3,129

Cost of sales

   -13    -112    9    -488
                   

Gross income

   13    1,048    273    2,641

Operating expenses

   -870    -708    -1,583    -1,221

Other operating income and expenses

   728    726    1,473    1,355
                   

Operating income

   -129    1,066    163    2,775

Financial net

   3,929    1,517    5,056    4,230
                   

Income after financial items

   3,800    2,583    5,219    7,005

Transfers to (-) / from untaxed reserves

   —      —      —      —  

Taxes

   -2    -347    -372    -886
                   

Net income

   3,798    2,236    4,847    6,119
                   
Parent Company Balance Sheet

SEK million

             Jun 30
2009
   Dec 31
2008

ASSETS

           

Fixed assets

           

Intangible assets

         2,411    2,604

Tangible assets

         696    695

Financial assets

         103,190    98,837
               
         106,297    102,136

Current assets

           

Inventories

         73    80

Receivables

         25,479    31,124

Cash, bank and short-term investments

         62,362    59,214
               
         87,914    90,418

Total assets

         194,211    192,554
               

STOCKHOLDERS’ EQUITY, PROVISIONS AND LIABILITIES

           

Equity

           

Restricted equity

         47,859    47,724

Non-restricted equity

         40,262    41,954
               
         88,121    89,678

Untaxed reserves

         1,817    1,817

Provisions

         1,214    1,059

Non-current liabilities

         63,314    50,994

Current liabilities

         39,745    49,006

Total stockholders’ equity, provisions and liabilities

         194,211    192,554
               

Assets pledged as collateral

         429    414

Contingent liabilities

         13,505    13,029

 

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Accounting Policies

The Group

This interim report is prepared in accordance with IAS 34. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC).

As from January 1, 2009, the Company has applied the following new or amended IFRS:

 

   

IAS 1 (Revised), “Presentation of Financial Statements”. The revised standard requires all non-owner changes in equity to be shown in a performance statement. The Company therefore presents two statements, the Income Statement and a Statement of Comprehensive Income. Also, to improve the understanding of the Company’s financial performance, a new subtotal line has been added in the Income Statement, “Operating income before share in earnings of JV and associated companies”. This is to distinguish between operating income from operations consolidated and from shares in earnings of JV and associated companies accounted for using the equity method. In the interim report text, this line item is for simplicity referred to as “Operating income before joint ventures”.

 

   

IFRS 8 “Operating Segments”. This standard replaces IAS 14 “Segment Reporting” and requires a “management approach”, under which segment information is presented on the same basis as that used for internal reporting to the Chief Operating Decision Maker (CODM). In Ericsson, the Group Management Team is defined as the CODM function. The new standard has not resulted in any changes of the reportable segments.

The new joint venture, ST-Ericsson, established in February 2009, is presented as a new reportable segment. Segment Phones has been renamed to Sony Ericsson. No other changes have been made in relation to this reported segment.

None of the following new or amended standards and interpretations have had any significant impact on the financial result or position of the Company:

 

   

IFRS 2 (Amendment), “Share-Based Payments”. The amended standard deals with vesting conditions and cancellations.

 

   

Revised IAS 23, “Borrowing Costs” and “Improvements to IFRSs”, published in May 2008, in relation to IAS 23.

 

   

IAS 32 and IAS 1 (Amendments), “Puttable Financial Instruments” and “Obligations Arising on Liquidation”.

 

   

“Improvements to IFRSs”, published in May 2008. These are improvements to twenty two already effective IFRSs.

 

   

IFRIC 12, “Service Concession Arrangements”

 

   

IFRIC 13, “Customer Loyalty Programmes”

 

   

IFRIC 16, “Hedges of a Net Investment on A Foreign Operation”

The Company has not yet applied the following interpretations and amendments since these are still subject to EU endorsement:

 

   

IFRC15, “Agreements for Construction of Real Estate”

 

   

“Amendment to IAS39: Effective Date and Transition”

 

   

“Amendments to IFRS 7 Improving Disclosures about Financial Instruments”

 

   

“Amendments to IFRIC 9 and IAS 39 Embedded Derivatives”

However, none of the interpretations and amendments is expected to have any significant impact on the Company’s financial statements.

Company amendment of key ratio “Inventory turnover”

Prior to 2009, this key ratio disclosed the number of times the inventory was turned over per year.

As from January 1, 2009, the inventory turnover key ratio has been amended by the Company to disclose the number of turnover days of inventory.

 

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Net Sales by Segment by Quarter

Since the segments Sony Ericsson and ST-Ericsson are reported in accordance with the equity method, their sales are not included below. Net sales related to these segments are disclosed under SEGMENT RESULTS. Net sales related to other segments are set out below.

 

     2009     2008  

Isolated quarters, SEK million

   Q2     Q1     Q4     Q3     Q2     Q1  

Networks

   34,737      33,529      45,767      33,017      33,274      29,992   

Of which Network rollout

   5,942      4,687      7,555      4,679      4,776      4,520   

Professional Services

   14,077      12,799      16,199      11,750      11,018      10,011   

Of which Managed services

   4,587      4,178      4,270      3,458      3,416      3,112   

Multimedia

   3,328      3,241      5,059      4,431      4,240      4,172   

Of which PBX and Mobile Platforms

   —        —        1,147      951      1,532      1,586   

Multimedia excluding PBX and Mobile Platforms

   3,328      3,241      3,912      3,480      2,708      2,586   
                                    

Total

   52,142      49,569      67,025      49,198      48,532      44,175   
                                    
     2009     2008  

Sequential change, percent

   Q2     Q1     Q4     Q3     Q2     Q1  

Networks

   4   -27   39   -1   11   -20

Of which Network rollout

   27   -38   61   -2   6   -30

Professional Services

   10   -21   38   7   10   -17

Of which Managed services

   10   -2   23   1   10   -6

Multimedia

   3   -36   14   5   2   -14

Of which PBX and Mobile Platforms

   —        —        21   -38   -3   —     

Multimedia excluding PBX and Mobile Platforms

   3   -17   12   29   5   —     
                                    

Total

   5   -26   36   1   10   -19
                                    
     2009     2008  

Year over year change, percent

   Q2     Q1     Q4     Q3     Q2     Q1  

Networks

   4   12   22   16   -1   2

Of which Network rollout

   24   4   17   17   11   20

Professional Services

   28   28   34   7   7   5

Of which Managed services

   34   34   29   3   17   20

Multimedia

   -22   -22   4   10   16   24

Of which PBX and Mobile Platforms

   —        —        —        —        —        —     

Multimedia excluding PBX and Mobile Platforms

   23   25   —        —        —        —     
                                    

Total

   7   12   23   13   2   5
                                    
     2009     2008  

Year to date, SEK million

   Jan-Jun     Jan-Mar     Jan-Dec     Jan-Sep     Jan-Jun     Jan-Mar  

Networks

   68,266      33,529      142,050      96,283      63,266      29,992   

Of which Network rollout

   10,629      4,687      21,530      13,975      9,296      4,520   

Professional Services

   26,876      12,799      48,978      32,779      21,029      10,011   

Of which Managed services

   8,765      4,178      14,256      9,986      6,528      3,112   

Multimedia

   6,569      3,241      17,902      12,843      8,412      4,172   

Of which PBX and Mobile Platforms

   —        —        5,216      4,069      3,118      1,586   

Multimedia excluding PBX and Mobile Platforms

   6,569      3,241      12,686      8,774      5,294      2,586   
                                    

Total

   101,711      49,569      208,930      141,905      92,707      44,175   
                                    
Year to date,    2009     2008  

year over year change, percent

   Jan-Jun     Jan-Mar     Jan-Dec     Jan-Sep     Jan-Jun     Jan-Mar  

Networks

   8   12   10   5   0   2

Of which Network rollout

   14   4   16   16   15   20

Professional Services

   28   28   14   7   6   5

Of which Managed services

   34   34   17   13   19   20

Multimedia

   -22   -22   13   16   20   24

Of which PBX and Mobile Platforms

   —        —        —        —        —        —     

Multimedia excluding PBX and Mobile Platforms

   24   25   —        —        —        —     
                                    

Total

   10   12   11   6   3   5
                                    

 

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Operating Income by Segment by Quarter

 

     2009    2008

Isolated quarters, SEK million

   Q2    Q1    Q4    Q3    Q2    Q1

Networks

   1,248    2,838    4,943    2,454    1,803    1,945

Professional Services

   2,266    1,749    2,226    1,509    1,337    1,274

Multimedia

   18    44    554    9    -172    -509

Multimedia excluding PBX and Mobile Platforms

   —      —      679    179    -161    -251

Unallocated 1)

   -323    -77    -236    -171    -103    -108
                             

Subtotal Segments excluding Sony Ericsson and ST-Ericsson

   3,209    4,554    7,487    3,801    2,865    2,602

Sony Ericsson

   -1,543    -2,070    -1,280    -142    24    895

ST-Ericsson 2)

   -453    -709    —      —      —      —  
                             

Subtotal Sony Ericsson and ST-Ericsson

   -1,996    -2,779    -1,280    -142    24    895
                             

Total

   1,213    1,775    6,207    3,659    2,889    3,497
                             
     2009    2008

Year to date, SEK million

   Jan-Jun    Jan-Mar    Jan-Dec    Jan-Sep    Jan-Jun    Jan-Mar

Networks

   4,086    2,838    11,145    6,202    3,748    1,945

Professional Services

   4,015    1,749    6,346    4,120    2,611    1,274

Multimedia

   62    44    -118    -672    -681    -509

Multimedia excluding PBX and Mobile Platforms

   —      —      446    -233    -412    -251

Unallocated 1)

   -400    -77    -618    -382    -211    -108
                             

Subtotal Segments excluding Sony Ericsson and ST-Ericsson

   7,763    4,554    16,755    9,268    5,467    2,602

Sony Ericsson

   -3,613    -2,070    -503    777    919    895

ST-Ericsson 2)

   -1,162    -709    —      —      —      —  
                             

Subtotal Sony Ericsson and ST-Ericsson

   -4,775    -2,779    -503    777    919    895
                             

Total

   2,988    1,775    16,252    10,045    6,386    3,497
                             

 

1)

“Unallocated” consists mainly of costs for corporate staffs, non-operational capital gains and losses.

2)

First quarter 2009 includes a loss of SEK 0.5 b for January for Ericsson Mobile Platforms operations which as from February 1, 2009, are reported in ST-Ericsson. Second quarter 2009 includes a capital gain of SEK 0.1 b related to Ericsson Mobile Platforms.

Operating Margin by Segment by Quarter

 

As percentage of net sales,

isolated quarters

   2009     2008  
   Q2     Q1     Q4     Q3     Q2     Q1  

Networks

   4   8   11   7   5   7

Professional Services

   16   14   14   13   12   13

Multimedia

   1   1   11   0   -4   -12

Multimedia excluding PBX and Mobile Platforms

   —        —        17   5   -6   -10
                                    

Subtotal excluding Sony Ericsson and
ST-Ericsson

   6   9   11   8   6   6
                                    

As percentage of net sales,

Year to date

   2009     2008  
   Jan-Jun     Jan-Mar     Jan-Dec     Jan-Sep     Jan-Jun     Jan-Mar  

Networks

   6   8   8   6   6   7

Professional Services

   15   14   13   13   12   13

Multimedia

   1   1   -1   -5   -8   -12

Multimedia excluding PBX and Mobile Platforms

   —        —        4   -3   -8   -10
                                    

Subtotal excluding Sony Ericsson and
ST-Ericsson

   8   9   8   7   6   6
                                    

 

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EBITDA by Segment by Quarter

 

     2009    2008

Isolated quarters, SEK million

   Q2    Q1    Q4    Q3    Q21)    Q1

Networks

   3,909    4,153    6,417    3,628    3,510    3,690

Professional Services

   2,464    1,977    2,365    1,811    1,589    1,480

Multimedia

   273    306    1,001    403    400    -246

Multimedia excluding PBX and Mobile Platforms

   —      —      963    425    80    14

Unallocated 2)

   -323    -77    -236    -171    -103    -108
                             

Subtotal Segments excluding Sony Ericsson and ST-Ericsson

   6,323    6,359    9,547    5,671    5,396    4,816

Sony Ericsson

   -1,543    -2,070    -1,280    -142    24    895

ST-Ericsson 3)

   -453    -663    —      —      —      —  
                             

Subtotal Sony Ericsson and ST-Ericsson

   -1,996    -2,733    -1,280    -142    24    895
                             

Total

   4,327    3,626    8,267    5,529    5,420    5,711
                             
     2009    2008

Year to date, SEK million

   Jan-Jun    Jan-Mar    Jan-Dec    Jan-Sep    Jan-Jun1)    Jan-Mar

Networks

   8,062    4,153    17,245    10,828    7,200    3,690

Professional Services

   4,441    1,977    7,245    4,880    3,069    1,480

Multimedia

   579    306    1,558    557    154    -246

Multimedia excluding PBX & Mobile Platforms

   —      —      1,482    519    94    14

Unallocated 2)

   -400    -77    -618    -382    -211    -108
                             

Subtotal Segments excluding Sony Ericsson and ST-Ericsson

   12,682    6,359    25,430    15,883    10,212    4,816

Sony Ericsson

   -3,613    -2,070    -503    777    919    895

ST-Ericsson 3)

   -1,116    -663    —      —      —      —  
                             

Subtotal Sony Ericsson and ST-Ericsson

   -4,729    -2,733    -503    777    919    895
                             

Total

   7,953    3,626    24,927    16,660    11,131    5,711
                             

 

1)

Second quarter 2008 for Multimedia was affected by SEK 156 m. due to changed allocation of capitalized development expenses.

2)

“Unallocated” consists mainly of costs for corporate staffs, non-operational capital gains and losses.

3)

First quarter 2009 includes a loss of SEK 0.5 b for January for Ericsson Mobile Platforms operations which as from February 1, 2009, are reported in ST-Ericsson. Second quarter 2009 includes a capital gain of SEK 0.1 b related to Ericsson Mobile Platforms.

EBITDA Margin by Segment by Quarter

 

As percentage of net sales,

isolated quarters

   2009     2008  
   Q2     Q1     Q4     Q3     Q21)     Q1  

Networks

   11   12   14   11   11   12

Professional Services

   18   15   15   15   14   15

Multimedia

   8   9   20   9   9   -6

Multimedia excluding PBX & Mobile Platforms

   —        —        25   12   3   1
                                    

Subtotal excluding Sony Ericsson and
ST-Ericsson

   12   13   14   12   11   11
                                    

As percentage of net sales,

Year to date

   2009     2008  
   Jan-Jun     Jan-Mar     Jan-Dec     Jan-Sep     Jan-Jun1)     Jan-Mar  

Networks

   12   12   12   11   11   12

Professional Services

   17   15   15   15   15   15

Multimedia

   9   9   9   4   2   -6

Multimedia excluding PBX & Mobile Platforms

   —        —        12   6   2   1
                                    

Subtotal excluding Sony Ericsson and
ST-Ericsson

   12   13   12   11   11   11
                                    

 

1)

Second quarter 2008 for Multimedia was affected by SEK 156 m. due to changed allocation of capitalized development expenses.

 

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Net Sales by Market Area by Quarter

 

     2009     2008  

Isolated quarters, SEK million

   Q2     Q1     Q4     Q3     Q2     Q1  

Western Europe 1)

   11,365      11,203      16,135      11,629      12,125      11,681   

Central & Eastern Europe, Middle East & Africa

   12,647      12,485      17,635      13,069      11,253      11,123   

Asia Pacific

   17,396      16,282      20,500      14,114      15,785      12,908   

Latin America

   4,801      4,381      7,855      6,083      4,956      4,154   

North America

   5,933      5,218      4,900      4,303      4,413      4,309   
                                    

Total 2)

   52,142      49,569      67,025      49,198      48,532      44,175   
                                    

 

            

1)       Of which Sweden

   1,091      1,197      2,384      2,191      2,308      1,993   

2)       Of which EU

   12,595      12,604      18,371      13,059      13,427      12,744   
     2009     2008  

Sequential change, percent

   Q2     Q1     Q4     Q3     Q2     Q1  

Western Europe 1)

   1   -31   39   -4   4   -24

Central & Eastern Europe, Middle East & Africa

   1   -29   35   16   1   -22

Asia Pacific

   7   -21   45   -11   22   -6

Latin America

   10   -44   29   23   19   -38

North America

   14   6   14   -2   2   0
                                    

Total 2)

   5   -26   36   1   10   -19
                                    

 

            

1)       Of which Sweden

   -9   -50   9   -5   16   -19

2)       Of which EU

   0   -31   41   -3   5   -27
     2009     2008  

Year-over-year change, percent

   Q2     Q1     Q4     Q3     Q2     Q1  

Western Europe 1)

   -6   -4   5   -6   -3   -7

Central & Eastern Europe, Middle East & Africa

   12   12   24   9   -2   1

Asia Pacific

   10   26   49   17   -5   5

Latin America

   -3   5   16   43   21   25

North America

   34   21   13   44   47   39
                                    

Total 2)

   7   12   23   13   2   5
                                    

 

            

1)       Of which Sweden

   -53   -40   -3   13   12   3

2)       Of which EU

   -6   -1   5   -4   -4   -8
     2009     2008  

Year to date, SEK million

   Jan-Jun     Jan-Mar     Jan-Dec     Jan-Sep     Jan-Jun     Jan-Mar  

Western Europe 1)

   22,568      11,203      51,570      35,435      23,806      11,681   

Central & Eastern Europe, Middle East & Africa

   25,132      12,485      53,080      35,445      22,376      11,123   

Asia Pacific

   33,678      16,282      63,307      42,807      28,693      12,908   

Latin America

   9,182      4,381      23,048      15,193      9,110      4,154   

North America

   11,151      5,218      17,925      13,025      8,722      4,309   
                                    

Total 2)

   101,711      49,569      208,930      141,905      92,707      44,175   
                                    

 

            

1)       Of which Sweden

   2,288      1,197      8,876      6,492      4,301      1,993   

2)       Of which EU

   25,199      12,604      57,601      39,230      26,171      12,744   
Year to date,    2009     2008  

year-over-year change, percent

   Jan-Jun     Jan-Mar     Jan-Dec     Jan-Sep     Jan-Jun     Jan-Mar  

Western Europe 1)

   -5   -4   -2   -5   -5   -7

Central & Eastern Europe, Middle East & Africa

   12   12   9   3   0   1

Asia Pacific

   17   26   16   5   -1   5

Latin America

   1   5   25   31   23   25

North America

   28   21   34   43   43   39
                                    

Total 2)

   10   12   11   6   3   5
                                    

 

            

1)       Of which Sweden

   -47   -40   6   9   8   3

2)       Of which EU

   -4   -1   -2   -5   -6   -8

 

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External Net Sales by Market Area by Segment

Since the segments Sony Ericsson and ST-Ericsson are reported in accordance with the equity method, their sales are not included below. Net sales related to these segments are disclosed under SEGMENT RESULTS. Net sales related to other segments are set out below.

 

Isolated quarter, SEK million

Q2 2009

   Networks     Professional
Services
    Multimedia     Total  

Western Europe

   5,623      5,101      641      11,365   

Central & Eastern Europe, Middle East & Africa

   8,200      3,096      1,351      12,647   

Asia Pacific

   13,666      3,002      728      17,396   

Latin America

   2,985      1,513      303      4,801   

North America

   4,263      1,365      305      5,933   
                        

Total

   34,737      14,077      3,328      52,142   
                        

Share of Total

   67   27   6   100

Year to date, SEK million

Jan - Jun 2009

   Networks     Professional
Services
    Multimedia     Total  

Western Europe

   11,375      9,929      1,264      22,568   

Central & Eastern Europe, Middle East & Africa

   16,832      5,814      2,486      25,132   

Asia Pacific

   26,409      5,730      1,539      33,678   

Latin America

   5,721      2,946      515      9,182   

North America

   7,929      2,457      765      11,151   
                        

Total

   68,266      26,876      6,569      101,711   
                        

Share of Total

   67   26   7   100

Top 15 Markets in Sales

 

Market

   Jan - Jun
2009
    Jan - Jun
2008
    Q2
2009
    Q2
2008
 

United States

   9   7   10   7

China

   9   8   11   9

India

   8   7   7   8

Italy

   5   5   5   5

Indonesia

   4   4   4   4

United Kingdom

   4   3   4   3

Japan

   3   2   2   2

Spain

   3   4   3   4

Brazil

   3   3   3   3

Australia

   2   2   3   2

Sweden

   2   5   2   5

Nigeria

   2   2   2   2

Germany

   2   2   2   2

Turkey

   2   1   2   1

Canada

   2   3   1   2

 

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Provisions

 

     2009    2008

Isolated quarters, SEK million

   Q2    Q1    Q4    Q3    Q2    Q1

Opening balance

   12,592    14,350    12,995    11,106    10,056    9,726

Additions

   3,710    1,672    3,800    3,418    2,724    2,019

Utilization/Cash out

   -1,982    -3,052    -2,321    -1,595    -1,343    -781

of which restructuring

   -753    -1,179    -956    -303    -196    -301

Reversal of excess amounts

   -146    -287    -832    -117    -244    -622

Reclassification, translation difference and other

   -217    -91    708    183    -87    -286
                             

Closing balance

   13,957    12,592    14,350    12,995    11,106    10,056
                             
     2009    2008

Year to date, SEK million

   Jan-Jun    Jan-Mar    Jan-Dec    Jan-Sep    Jan-Jun    Jan-Mar

Opening balance

   14,350    14,350    9,726    9,726    9,726    9,726

Additions

   5,382    1,672    11,961    8,161    4,743    2,019

Utilization/Cash out

   -5,034    -3,052    -6,040    -3,719    -2,124    -781

of which restructuring

   -1,932    -1,179    -1,756    -800    -497    -301

Reversal of excess amounts

   -433    -287    -1,815    -983    -866    -622

Reclassification, translation difference and other

   -308    -91    518    -190    -373    -286
                             

Closing balance

   13,957    12,592    14,350    12,995    11,106    10,056
                             

 

Number of Employees

 

     2009    2008

End of period

   Jun 30    Mar 31    Dec 31    Sep 30    Jun 30    Mar 31

Western Europe 1)

   38,350    38,550    41,600    41,800    42,000    42,100

Central & Eastern Europe, Middle East & Africa

   9,800    9,550    8,000    7,650    7,300    7,000

Asia Pacific

   15,950    15,350    15,150    14,800    14,400    14,150

Latin America

   7,850    8,000    8,250    7,450    6,600    6,250

North America

   5,300    5,450    5,750    5,650    5,500    5,500
                             

Total

   77,250    76,900    78,750    77,350    75,800    75,000
                             

 

                 

1)       Of which Sweden

   18,600    18,800    20,150    20,250    20,250    20,200

 

Information on investments in assets subject to depreciation, amortization and impairment

 

     2009    2008

SEK million

   Q2    Q1    Q4    Q3    Q2    Q1

Additions

                 

Property, plant and equipment

   1,189    1,018    1,297    997    893    946

Capitalized development expenses

   327    209    393    261    422    333

IPR, brands and other intangible assets

   50    7    20    —      —      —  
                             

Total

   1,566    1,234    1,710    1,258    1,315    1,279
                             

Depreciation, amortization and impairment losses

                 

Property, plant and equipment

   844    817    901    787    713    704

Capitalized development expenses

   173    202    286    279    1,034    689

IPR, brands and other intangible assets

   2,095    833    872    806    782    821
                             

Total

   3,112    1,852    2,059    1,872    2,529    2,214
                             

 

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Other Information

 

     Apr - Jun     Jan - Jun     Jan - Dec
2008
 
     2009     2008     2009     2008    

Number of shares and earnings per share 1)

          

Number of shares, end of period (million)

   3,273      3,226      3,273      3,226      3,246   

of which A-shares (million)

   262      262      262      262      262   

of which B-shares (million)

   3,011      2,964      3,011      2,964      2,984   

Number of treasury shares, end of period (million)

   84      43      84      43      61   

Number of shares outstanding, basic, end of period (million)

   3,189      3,183      3,189      3,183      3,185   

Numbers of shares outstanding, diluted, end of period (million)

   3,210      3,199      3,210      3,199      3,205   

Average number of treasury shares (million)

   76      44      68      45      52   

Average number of shares outstanding, basic (million)

   3,188      3,183      3,188      3,182      3,183   

Average number of shares outstanding, diluted (million)2)

   3,210      3,199      3,209      3,198      3,202   

Earnings per share, basic (SEK)

   0.26      0.60      0.80      1.43      3.54   

Earnings per share, diluted (SEK)2)

   0.26      0.59      0.79      1.42      3.52   

 

1)       A reverse split 1:5 was made in June 2008. Comparative figures are restated accordingly.

2)       Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

          

          

Ratios

          

Days sales outstanding

   —        —        121      107      106   

Inventory turnover days

   79      75      78      76      68   

Payable days

   55      51      59      56      55   

Equity ratio, percent

   —        —        50.8   54.6   49.7

Return on equity, percent

   2.3   5.8   3.6   6.9   8.2

Return on capital employed, percent

   2.6   8.3   4.6   9.2   11.3

Capital turnover (times)

   1.1      1.2      1.1      1.1      1.2   

Payment readiness, end of period

   —        —        87,270      64,892      84,917   

Payment readiness, as percentage of sales

   —        —        42.9   35.0   40.6

Exchange rates used in the consolidation

          

SEK / EUR - average rate

   —        —        10.89      9.41      9.67   

          - closing rate

   —        —        10.82      9.46      10.95   

SEK / USD - average rate

   —        —        8.09      6.14      6.61   

          - closing rate

   —        —        7.66      6.00      7.73   

Other

          

Export sales from Sweden

   25,698      26,380      48,014      52,436      109,254   

Ericsson Planning Assumptions for Year 2009

Research and development expenses

We estimate R&D expenses for the full year 2009 to be at around SEK 27-28 b. The estimate includes amortizations/write-downs of intangible assets related to major acquisitions previously made and excludes Ericsson Mobile Platforms and restructuring charges. However, currency effects may cause this to change.

Capital expenditures

Excluding acquisitions, the capital expenditures in relation to sales are not expected to be significantly different in 2009, remaining at roughly two percent of sales.

Utilization of provisions

The expected utilization of provisions for year 2009 is stated in Note C 18 in the Annual Report 2008.

 

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Consolidated Operating Income excl. Restructuring Charges

 

     2009     2008  

SEK million

   Q2     Q1     Q4     Q3     Q2     Q1  

Net sales

   52,142      49,569      67,025      49,198      48,532      44,175   

Cost of sales

   -33,215      -31,585      -43,410      -31,001      -30,595      -27,115   
                                    

Gross income

   18,927      17,984      23,615      18,197      17,937      17,060   

Gross margin %

   36.3   36.3   35.2   37.0   37.0   38.6

Research and development expenses

   -6,761      -6,802      -7,539      -7,527      -7,839      -8,031   

Selling and administrative expenses

   -6,886      -6,809      -7,803      -5,359      -6,148      -6,092   
                                    

Operating expenses

   -13,647      -13,611      -15,342      -12,886      -13,987      -14,123   

Other operating income and expenses

   1,640      342      1,502      332      704      439   
                                    

Operating income before share in earnings of JV and associated companies

   6,920      4,715      9,774      5,643      4,654      3,377   

Operating margin % before share in earnings of JV and associated companies

   13.3   9.5   14.6   11.5   9.6   7.6

Share in earnings of JV and associated companies

   -1,997      -2,170      -597      34      62      911   
                                    

Operating income

   4,923      2,545      9,177      5,677      4,716      4,288   

Earnings per share, basic (SEK) excl. JV’s and ass. comp

   1.53      1.19      2.02      1.34      0.99      0.80   

Earnings per share, diluted (SEK)1) excl. JV’s and ass. comp

   1.52      1.19      2.00      1.33      0.99      0.80   

 

1)        Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

          

Restructuring Charges by Function   

SEK million

   2009     2008  
   Q2     Q1     Q4     Q3     Q2     Q1  

Cost of sales

   -1,317      -371      -1,112      -576      -611      -241   

Research and development expenses

   -1,690      -278      -688      -332      -1,093      -535   

Selling and administrative expenses

   -558      -53      -490      -945      -123      -14   
                                    

Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson

   -3,565      -702      -2,290      -1,853      -1,827      -790   

Share in Sony Ericsson charges

   -5      -66      -681      -165      —        —     

Share in ST-Ericsson charges

   -140      -2      —        —        —        —     
                                    

Subtotal Sony Ericsson and ST-Ericsson

   -145      -68      -681      -165      —        —     
                                    

Total

   -3,710      -770      -2,971      -2,018      -1,827      -790   
                                    
Restructuring Charges by Segment   
      2009     2008  

SEK million

   Q2     Q1     Q4     Q3     Q2     Q1  

Networks

   -2,498      -517      -1,590      -1,330      -1,519      -692   

Professional Services

   -767      -175      -640      -374      -170      -88   

Multimedia

   -277      -10      -48      -141      -138      -10   

Multimedia excluding PBX & Mobile Platforms

   —        —        -26      —        —        —     

Unallocated

   -23      —        -12      -8      —        —     
                                    

Subtotal Ericsson excluding Sony Ericsson and ST-Ericsson

   -3,565      -702      -2,290      -1,853      -1,827      -790   

Sony Ericsson

   -5      -66      -681      -165      —        —     

ST-Ericsson

   -140      -2           
                                    

Subtotal Sony Ericsson and ST-Ericsson

   -145      -68      -681      -165      —        —     
                                    

Total

   -3,710      -770      -2,971      -2,018      -1,827      -790   
                                    

 

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Operating Income by Segment excl. Restructuring Charges

 

     2009     2008  

Isolated quarters, SEK million

   Q2     Q1     Q4     Q3     Q2     Q1  

Networks

   3,747      3,355      6,532      3,785      3,322      2,637   

Professional Services

   3,032      1,924      2,867      1,882      1,507      1,362   

Multimedia

   295      54      602      150      -34      -498   

Multimedia excluding PBX & Mobile Platforms

   —        —        705      320      -23      -240   

Unallocated