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 20, 2015
Commission File Number 000-12033
LM ERICSSON TELEPHONE COMPANY
(Translation of registrants name into English)
Torshamnsgatan 21, 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 if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM F-3 (NO. 333-203977) AND ON FORM S-8 (Nos. 333-196453, 333-161683 AND 333-161684 ) OF TELEFONAKTIEBOLAGET LM ERICSSON (PUBL.) AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED WITH OR FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TELEFONAKTIEBOLAGET LM ERICSSON (publ) | ||
By: | /S/ NINA MACPHERSON | |
Nina Macpherson | ||
Senior Vice President and | ||
General Counsel | ||
By: | /S/ HELENA NORRMAN | |
Helena Norrman | ||
Senior Vice President | ||
Corporate Communications |
Date: July 20, 2015
SECOND QUARTER
REPORT 2015, as adjusted for incorporation by reference.
Stockholm, July 17, 2015
Read more | ||||
SECOND QUARTER HIGHLIGHTS | (page) | |||
> | Reported sales increased by 11% YoY.
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> | Professional Services continued to deliver strong sales growth YoY.
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> | Sales in segment Networks recovered and showed a growth QoQ of 18%.
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> | Cash flow from operating activities recovered to SEK 3.1 (2.1) b., after a weak first quarter.
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Q2 | Q2 | YoY | Q1 | QoQ | Six months | Six months | ||||||||||||||||||||||
SEK b. | 2015 | 2014 | change | 2015 | change | 2015 | 2014 | |||||||||||||||||||||
Net sales | 60.7 | 54.8 | 11% | 53.5 | 13% | 114.2 | 102.4 | |||||||||||||||||||||
Gross margin | 33.2% | 36.4% | - | 35.4% | - | 34.2% | 36.4% | |||||||||||||||||||||
Operating margin excluding restructuring charges |
10.4% | 7.7% | - | 5.1% | - | 7.9% | 6.8% | |||||||||||||||||||||
Operating income | 3.6 | 4.0 | -11% | 2.1 | 67% | 5.7 | 6.6 | |||||||||||||||||||||
Operating income excluding restructuring charges |
6.3 | 4.2 | 49% | 2.7 | 129% | 9.1 | 7.0 | |||||||||||||||||||||
Operating margin | 5.9% | 7.3% | - | 4.0% | - | 5.0% | 6.5% | |||||||||||||||||||||
Gross margin excluding restructuring charges |
35.1% | 36.6% | - | 36.3% | - | 35.7% | 36.6% | |||||||||||||||||||||
Net income | 2.1 | 2.7 | -20% | 1.5 | 46% | 3.6 | 4.4 | |||||||||||||||||||||
EPS diluted, SEK | 0.64 | 0.79 | -19% | 0.40 | 60% | 1.04 | 1.44 | |||||||||||||||||||||
Cash flow from operating activities | 3.1 | 2.1 | 50% | -5.9 | -152% | -2.8 | 11.5 | |||||||||||||||||||||
Net cash, end of period 1) | 3.5 | 32.5 | -89% | 15.6 | -78% | 3.5 | 32.5 |
1) | Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28. |
1 | Ericsson | Second Quarter Report 2015 |
CEO COMMENTS
2 | Ericsson | Second Quarter Report 2015 |
FINANCIAL HIGHLIGHTS
Q2 | Q2 | YoY | Q1 | QoQ | 6 months | 6 months | ||||||||||||||||||||||
SEK b. | 2015 | 2014 | change | 2015 | change | 2015 | 2014 | |||||||||||||||||||||
Net sales | 60.7 | 54.8 | 11% | 53.5 | 13% | 114.2 | 102.4 | |||||||||||||||||||||
Of which Networks |
31.2 | 29.0 | 8% | 26.4 | 18% | 57.6 | 53.3 | |||||||||||||||||||||
Of which Global Services |
26.4 | 23.1 | 14% | 23.9 | 10% | 50.3 | 43.4 | |||||||||||||||||||||
Of which Support Solutions |
3.1 | 2.8 | 9% | 3.1 | 1% | 6.2 | 5.6 | |||||||||||||||||||||
Of which Modems |
0.0 | 0.0 | - | 0.1 | - | 0.1 | 0.0 | |||||||||||||||||||||
Gross income | 20.1 | 19.9 | 1% | 19.0 | 6% | 39.1 | 37.3 | |||||||||||||||||||||
Gross margin (%) | 33.2% | 36.4% | - | 35.4% | - | 34.2% | 36.4% | |||||||||||||||||||||
Research and development expenses | -9.9 | -9.1 | 9% | -8.5 | 17% | -18.4 | -17.4 | |||||||||||||||||||||
Selling and administrative expenses | -7.8 | -6.5 | 19% | -7.1 | 9% | -14.9 | -13.0 | |||||||||||||||||||||
Other operating income and expenses | 1.1 | -0.2 | - | -1.2 | - | -0.2 | -0.2 | |||||||||||||||||||||
Operating income | 3.6 | 4.0 | -11% | 2.1 | 67% | 5.7 | 6.6 | |||||||||||||||||||||
Operating margin | 5.9% | 7.3% | - | 4.0% | - | 5.0% | 6.5% | |||||||||||||||||||||
for Networks |
8% | 12% | - | 2% | - | 5% | 11% | |||||||||||||||||||||
for Global Services |
6% | 6% | - | 7% | - | 7% | 6% | |||||||||||||||||||||
for Support Solutions |
-8% | -13% | - | 3% | - | -3% | -7% | |||||||||||||||||||||
for Modems |
- | - | - | 0% | - | - | - | |||||||||||||||||||||
Financial net | -0.5 | -0.2 | 168% | -0.1 | - | -0.6 | -0.4 | |||||||||||||||||||||
Taxes | -0.9 | -1.1 | -20% | -0.6 | 46% | -1.5 | -1.9 | |||||||||||||||||||||
Net income | 2.1 | 2.7 | -20% | 1.5 | 46% | 3.6 | 4.4 | |||||||||||||||||||||
Restructuring charges |
-2.7 | -0.2 | - | -0.6 | - | -3.4 | -0.4 |
3 | Ericsson | Second Quarter Report 2015 |
4 | Ericsson | Second Quarter Report 2015 |
REGIONAL SALES
Second quarter 2015 |
Change |
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SEK b. | Networks | Global Services |
Support Solutions |
Total | YoY | QoQ | ||||||||||||||||||||
North America |
6.7 | 7.1 | 0.8 | 14.6 | -4% | 19% | ||||||||||||||||||||
Latin America |
2.3 | 2.6 | 0.2 | 5.1 | -6% | 11% | ||||||||||||||||||||
Northern Europe and Central Asia |
1.5 | 0.9 | 0.1 | 2.6 | -6% | -6% | ||||||||||||||||||||
Western and Central Europe |
1.9 | 3.1 | 0.1 | 5.1 | 12% | 8% | ||||||||||||||||||||
Mediterranean |
2.4 | 3.3 | 0.2 | 5.9 | 7% | 18% | ||||||||||||||||||||
Middle East |
4.0 | 2.1 | 0.3 | 6.5 | 44% | 44% | ||||||||||||||||||||
Sub-Saharan Africa |
1.2 | 1.3 | 0.2 | 2.7 | 41% | 23% | ||||||||||||||||||||
India |
1.8 | 1.1 | 0.2 | 3.0 | 85% | -14% | ||||||||||||||||||||
North East Asia |
4.8 | 2.0 | 0.2 | 6.9 | 8% | 15% | ||||||||||||||||||||
South East Asia and Oceania |
2.5 | 2.3 | 0.1 | 4.9 | 34% | 15% | ||||||||||||||||||||
Other 1) |
2.0 | 0.7 | 0.7 | 3.4 | 1% | -10% | ||||||||||||||||||||
Total |
31.2 | 26.4 | 3.1 | 60.7 | 11% | 13% |
1) Region Other includes licensing revenues, broadcast services, power modules, mobile broadband modules, Ericsson-LG Enterprise and other businesses.
5 | Ericsson | Second Quarter Report 2015 |
SEGMENT RESULTS
SEK b. | Q2 2015 |
Q2 2014 |
YoY change |
Q1 2015 |
QoQ change |
6 months 2015 |
6 months 2014 |
|||||||||||||||||||||
Net sales | 31.2 | 29.0 | 8% | 26.4 | 18% | 57.6 | 53.3 | |||||||||||||||||||||
Operating income | 2.4 | 3.6 | -32% | 0.6 | 313% | 3.0 | 6.1 | |||||||||||||||||||||
Operating income excluding restructuring charges |
4.3 | 3.7 | 16% | 0.8 | 460% | 5.0 | 6.3 | |||||||||||||||||||||
Operating margin | 8% | 12% | - | 2% | - | 5% | 11% | |||||||||||||||||||||
Operating margin excluding restructuring charges |
14% | 13% | - | 3% | - | 9% | 12% | |||||||||||||||||||||
Restructuring charges |
-1.8 | -0.1 | - | -0.2 | - | -2.0 | -0.2 |
6 | Ericsson | Second Quarter Report 2015 |
Q2 | Q2 | YoY | Q1 | QoQ | 6 months | 6 months | ||||||||||||||||||||||
SEK b. | 2015 | 2014 | change | 2015 | change | 2015 | 2014 | |||||||||||||||||||||
Net sales | 26.4 | 23.1 | 14% | 23.9 | 10% | 50.3 | 43.4 | |||||||||||||||||||||
Of which Professional Services |
20.0 | 16.6 | 21% | 18.1 | 10% | 38.1 | 31.7 | |||||||||||||||||||||
Of which Managed Services |
8.2 | 6.5 | 26% | 7.5 | 9% | 15.7 | 12.2 | |||||||||||||||||||||
Of which Network Rollout |
6.4 | 6.5 | -2% | 5.8 | 11% | 12.2 | 11.8 | |||||||||||||||||||||
Operating income | 1.6 | 1.5 | 10% | 1.7 | -2% | 3.3 | 2.5 | |||||||||||||||||||||
Of which Professional Services |
2.4 | 2.1 | 15% | 2.1 | 14% | 4.5 | 4.0 | |||||||||||||||||||||
Of which Network Rollout |
-0.8 | -0.6 | 25% | -0.4 | 78% | -1.2 | -1.5 | |||||||||||||||||||||
Operating margin | 6% | 6% | | 7% | | 7% | 6% | |||||||||||||||||||||
for Professional Services |
12% | 13% | | 12% | | 12% | 13% | |||||||||||||||||||||
for Network Rollout |
-12% | -9% | | -7% | | -10% | -12% | |||||||||||||||||||||
Operating income excluding restructuring charges |
2.3 | 1.6 | 49% | 2.1 | 11% | 4.4 | 2.6 | |||||||||||||||||||||
Operating margin excluding restructuring charges |
9% | 7% | - | 9% | - | 9% | 6% | |||||||||||||||||||||
Restructuring charges |
-0.7 | -0.1 | | -0.4 | | -1.1 | -0.1 |
Q2 | Q1 | Full year | ||||||||||
SEK b. | 2015 | 2015 | 2014 | |||||||||
Number of signed Managed Services contracts | 30 | 27 | 71 | |||||||||
Number of signed significant consulting & systems integration contracts 1) | 16 | 13 | 56 |
1) In the areas of OSS and BSS, IP, Service Delivery Platforms and data center build projects.
7 | Ericsson | Second Quarter Report 2015 |
SUPPORT SOLUTIONS
Q2 | Q2 | YoY | Q1 | QoQ | 6 months | 6 months | ||||||||||||||||||||||
SEK b. | 2015 | 2014 | change | 2015 | change | 2015 | 2014 | |||||||||||||||||||||
Net sales | 3.1 | 2.8 | 9% | 3.1 | 1% | 6.2 | 5.6 | |||||||||||||||||||||
Operating income | -0.2 | -0.4 | -37% | 0.1 | - | -0.2 | -0.4 | |||||||||||||||||||||
Operating income excluding restructuring charges |
0.0 | -0.3 | -87% | 0.1 | - | 0.1 | -0.3 | |||||||||||||||||||||
Operating margin | -8% | -13% | - | 3% | - | -3% | -7% | |||||||||||||||||||||
Operating margin excluding restructuring charges |
-2% | -12% | - | 3% | - | 1% | -6% | |||||||||||||||||||||
Restructuring charges |
-0.2 | 0.0 | - | 0.0 | - | -0.2 | 0.0 |
8 | Ericsson | Second Quarter Report 2015 |
SEK b. | Q2 2015 |
Q2 2014 |
Q1 2015 |
|||||||||
Net income reconciled to cash |
3.4 | 5.9 | 3.1 | |||||||||
Changes in operating net assets |
-0.3 | -3.8 | -9.0 | |||||||||
Cash flow from operating activities | 3.1 | 2.1 | -5.9 | |||||||||
Cash flow from investing activities | 7.0 | 3.7 | -2.1 | |||||||||
Cash flow from financing activities | -10.6 | -12.2 | 0.9 | |||||||||
Net change in cash and cash equivalents |
-2.3 | -5.0 | -5.7 | |||||||||
Cash conversion (%) 1) | 90% | 35% | -188% |
Working capital KPIs, number of days | Jan-Jun 2015 |
Jan-Mar 2015 |
Jan-Dec 2014 |
Jan-Sep 2014 |
Jan-Jun 2014 |
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Sales outstanding | 112 | 125 | 105 | 111 | 113 | |||||||||||||||
Inventory | 74 | 82 | 64 | 69 | 70 | |||||||||||||||
Payable | 57 | 64 | 56 | 57 | 61 |
1) | Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28. |
9 | Ericsson | Second Quarter Report 2015 |
FINANCIAL POSITION
SEK b. | Jun 30 2015 |
Jun 30 2014 |
Mar 31 2015 |
|||||||||
+ Short-term investments | 20.8 | 35.3 | 30.8 | |||||||||
+ Cash and cash equivalents | 33.0 | 33.1 | 35.3 | |||||||||
Gross cash |
53.8 | 68.4 | 66.1 | |||||||||
Interest bearing liabilities and post-employment benefits | 50.3 | 35.9 | 50.5 | |||||||||
Net cash 1) |
3.5 | 32.5 | 15.6 | |||||||||
Equity | 136.7 | 138.0 | 149.1 | |||||||||
Total assets | 278.9 | 265.5 | 303.0 | |||||||||
Capital turnover (times) | 1.3 | 1.2 | 1.1 | |||||||||
Equity ratio (%) | 49% | 52.0% | 49.2% |
1) | Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28. |
10 | Ericsson | Second Quarter Report 2015 |
OTHER INFORMATION
11 | Ericsson | Second Quarter Report 2015 |
RISK FACTORS
12 | Ericsson | Second Quarter Report 2015 |
EDITORS NOTE
13 | Ericsson | Second Quarter Report 2015 |
SAFE HARBOR STATEMENT
14 | Ericsson | Second Quarter Report 2015 |
FINANCIAL STATEMENTS AND
ADDITIONAL INFORMATION
15 | Ericsson | Second Quarter Report 2015 |
AprJun | JanJun | |||||||||||||||||||||||||
SEK million | 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||
Net sales | 60,671 | 54,849 | 11% | 114,191 | 102,354 | 12% | ||||||||||||||||||||
Cost of sales | 40,536 | 34,910 | 16% | 75,092 | 65,094 | 15% | ||||||||||||||||||||
Gross income |
20,135 | 19,939 | 1% | 39,099 | 37,260 | 5% | ||||||||||||||||||||
Gross margin (%) | 33.2% | 36.4% | 34.2% | 36.4% | ||||||||||||||||||||||
Research and development expenses | 9,896 | 9,084 | 9% | 18,383 | 17,359 | 6% | ||||||||||||||||||||
Selling and administrative expenses | 7,765 | 6,541 | 19% | 14,896 | 12,993 | 15% | ||||||||||||||||||||
Operating expenses |
17,661 | 15,625 | 13% | 33,279 | 30,352 | 10% | ||||||||||||||||||||
Other operating income and expenses | 1,059 | 206 | 181 | 185 | ||||||||||||||||||||||
Shares in earnings of JV and associated companies | 27 | 109 | 54 | 94 | ||||||||||||||||||||||
Operating income |
3,560 | 3,999 | 11% | 5,693 | 6,629 | 14% | ||||||||||||||||||||
Financial income | 238 | 268 | 446 | 669 | ||||||||||||||||||||||
Financial expenses | 290 | 465 | 1,030 | 1,077 | ||||||||||||||||||||||
Income after financial items | 3,032 | 3,802 | 20% | 5,109 | 6,221 | 18% | ||||||||||||||||||||
Taxes | 909 | 1,140 | 1,532 | 1,867 | ||||||||||||||||||||||
Net income | 2,123 | 2,662 | 20% | 3,577 | 4,354 | 18% | ||||||||||||||||||||
Net income attributable to: | ||||||||||||||||||||||||||
Stockholders of the Parent Company |
2,094 | 2,579 | 3,413 | 4,699 | ||||||||||||||||||||||
Noncontrolling interests |
29 | 83 | 164 | 345 | ||||||||||||||||||||||
Other information | ||||||||||||||||||||||||||
Average number of shares, basic (million) |
3,247 | 3,235 | 3,246 | 3,234 | ||||||||||||||||||||||
Earnings per share, basic (SEK) 1) |
0.64 | 0.80 | 1.05 | 1.45 | ||||||||||||||||||||||
Earnings per share, diluted (SEK) 1) |
0.64 | 0.79 | 1.04 | 1.44 |
1) Based on Net income attributable to stockholders of the Parent Company.
STATEMENT OF COMPREHENSIVE INCOME
AprJun | JanJun | |||||||||||||||||
SEK million | 2015 | 2014 | 2015 | 2014 | ||||||||||||||
Net income |
2,123 | 2,662 | 3,577 | 4,354 | ||||||||||||||
Other comprehensive income |
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Items that will not be reclassified to profit or loss |
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Remeasurements of defined benefits pension plans incl. asset ceiling | 1,562 | 574 | 4,773 | 2,196 | ||||||||||||||
Tax on items that will not be reclassified to profit or loss | 610 | 114 | 1,304 | 443 | ||||||||||||||
Items that may be reclassified to profit or loss |
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Cash flow hedges | ||||||||||||||||||
Gains/losses arising during the period |
| | | | ||||||||||||||
Reclassification adjustments for gains/losses included in profit or loss |
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Revaluation of other investments in shares and participations | ||||||||||||||||||
Fair value remeasurement |
| | 181 | | ||||||||||||||
Changes in cumulative translation adjustments | 2,626 | 2,619 | 1,783 | 3,020 | ||||||||||||||
Share of other comprehensive income on JV and associated companies | 92 | 117 | 96 | 128 | ||||||||||||||
Tax on items that may be reclassified to profit or loss | | | | | ||||||||||||||
Total other comprehensive income, net of tax |
3,670 | 2,276 | 1,601 | 1,395 | ||||||||||||||
Total comprehensive income |
1,547 | 4,938 | 1,976 | 5,749 | ||||||||||||||
Total comprehensive income attributable to: | ||||||||||||||||||
Stockholders of the Parent Company |
1,515 | 4,792 | 1,790 | 6,032 | ||||||||||||||
Noncontrolling interest |
32 | 146 | 186 | 283 |
16 | Ericsson | Second Quarter Report 2015 |
SEK million | Jun 30 2015 |
Mar 31 2015 |
Dec 31 2014 |
|||||||||
ASSETS |
||||||||||||
Noncurrent assets |
||||||||||||
Intangible assets | ||||||||||||
Capitalized development expenses |
4,032 | 3,522 | 3,570 | |||||||||
Goodwill |
39,872 | 41,140 | 38,330 | |||||||||
Intellectual property rights, brands and other intangible assets |
10,739 | 12,238 | 12,534 | |||||||||
Property, plant and equipment | 15,309 | 14,947 | 13,341 | |||||||||
Financial assets | ||||||||||||
Equity in JV and associated companies |
1,627 | 1,783 | 2,793 | |||||||||
Other investments in shares and participations |
855 | 836 | 591 | |||||||||
Customer finance, noncurrent |
1,919 | 2,311 | 1,932 | |||||||||
Other financial assets, noncurrent |
5,010 | 6,505 | 5,900 | |||||||||
Deferred tax assets | 14,054 | 14,274 | 12,778 | |||||||||
93,417 | 97,556 | 91,769 | ||||||||||
Current assets |
||||||||||||
Inventories | 32,327 | 33,657 | 28,175 | |||||||||
Trade receivables | 73,932 | 80,334 | 77,893 | |||||||||
Customer finance, current | 2,552 | 2,633 | 2,289 | |||||||||
Other current receivables | 22,919 | 22,700 | 21,273 | |||||||||
Shortterm investments | 20,807 | 30,776 | 31,171 | |||||||||
Cash and cash equivalents | 32,962 | 35,311 | 40,988 | |||||||||
185,499 | 205,411 | 201,789 | ||||||||||
Total assets |
278,916 | 302,967 | 293,558 | |||||||||
EQUITY AND LIABILITIES |
||||||||||||
Equity |
||||||||||||
Stockholders equity | 135,565 | 147,855 | 144,306 | |||||||||
Noncontrolling interest in equity of subsidiaries | 1,160 | 1,196 | 1,003 | |||||||||
136,725 | 149,051 | 145,309 | ||||||||||
Noncurrent liabilities |
||||||||||||
Postemployment benefits | 24,530 | 24,163 | 20,385 | |||||||||
Provisions, noncurrent | 139 | 198 | 202 | |||||||||
Deferred tax liabilities | 3,010 | 3,156 | 3,177 | |||||||||
Borrowings, noncurrent | 22,551 | 23,496 | 21,864 | |||||||||
Other noncurrent liabilities | 1,939 | 1,815 | 1,797 | |||||||||
52,169 | 52,828 | 47,425 | ||||||||||
Current liabilities |
||||||||||||
Provisions, current | 5,215 | 3,858 | 4,225 | |||||||||
Borrowings, current | 3,199 | 2,847 | 2,281 | |||||||||
Trade payables | 22,147 | 24,266 | 24,473 | |||||||||
Other current liabilities | 59,461 | 70,117 | 69,845 | |||||||||
90,022 | 101,088 | 100,824 | ||||||||||
Total equity and liabilities |
278,916 | 302,967 | 293,558 | |||||||||
Of which interestbearing liabilities and postemployment benefits |
50,280 | 50,506 | 44,530 | |||||||||
Of which net cash 1) |
3,489 | 15,581 | 27,629 | |||||||||
Assets pledged as collateral | 2,608 | 2,590 | 2,525 | |||||||||
Contingent liabilities | 693 | 721 | 737 |
1) | Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28. |
17 | Ericsson | Second Quarter Report 2015 |
OF CASH FLOWS
AprJun | JanJun | JanDec | ||||||||||||||||||||||
SEK million | 2015 | 2014 | 2015 | 2014 | 2014 | |||||||||||||||||||
Operating activities |
||||||||||||||||||||||||
Net income | 2,123 | 2,662 | 3,577 | 4,354 | 11,143 | |||||||||||||||||||
Adjustments to reconcile net income to cash | ||||||||||||||||||||||||
Taxes |
1,360 | 26 | 3,281 | 1,322 | 1,235 | |||||||||||||||||||
Earnings/dividends in JV and associated companies |
49 | 356 | 27 | 340 | 305 | |||||||||||||||||||
Depreciation, amortization and impairment losses |
2,579 | 2,414 | 5,260 | 4,774 | 9,945 | |||||||||||||||||||
Other |
22 | 404 | 966 | 953 | 2,185 | |||||||||||||||||||
3,413 | 5,862 | 6,549 | 9,099 | 22,343 | ||||||||||||||||||||
Changes in operating net assets |
||||||||||||||||||||||||
Inventories | 383 | 1,188 | 3,636 | 3,287 | 2,924 | |||||||||||||||||||
Customer finance, current and noncurrent | 405 | 341 | 147 | 217 | 710 | |||||||||||||||||||
Trade receivables | 3,630 | 892 | 5,667 | 7,065 | 1,182 | |||||||||||||||||||
Trade payables | 1,400 | 1,644 | 3,068 | 1,534 | 1,265 | |||||||||||||||||||
Provisions and postemployment benefits | 1,685 | 225 | 1,519 | 689 | 859 | |||||||||||||||||||
Other operating assets and liabilities, net | 5,038 | 2,806 | 10,000 | 2,483 | 1,595 | |||||||||||||||||||
335 | 3,808 | 9,371 | 2,357 | 3,641 | ||||||||||||||||||||
Cash flow from operating activities |
3,078 | 2,054 | 2,822 | 11,456 | 18,702 | |||||||||||||||||||
Investing activities |
||||||||||||||||||||||||
Investments in property, plant and equipment | 2,424 | 1,320 | 4,791 | 2,354 | 5,322 | |||||||||||||||||||
Sales of property, plant and equipment | 1,075 | 53 | 1,150 | 327 | 522 | |||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net | 169 | 1,512 | 227 | 2,361 | 4,394 | |||||||||||||||||||
Product development | 843 | 185 | 1,137 | 382 | 1,523 | |||||||||||||||||||
Other investing activities | 280 | 388 | 162 | 557 | 3,392 | |||||||||||||||||||
Shortterm investments | 9,678 | 7,012 | 10,077 | 222 | 6,596 | |||||||||||||||||||
Cash flow from investing activities |
7,037 | 3,660 | 4,910 | 5,105 | 7,513 | |||||||||||||||||||
Cash flow before financing activities |
10,115 | 5,714 | 2,088 | 6,351 | 11,189 | |||||||||||||||||||
Financing activities |
||||||||||||||||||||||||
Dividends paid | 11,035 | 9,828 | 11,060 | 9,828 | 9,846 | |||||||||||||||||||
Other financing activities | 431 | 2,393 | 1,330 | 7,462 | 8,379 | |||||||||||||||||||
Cash flow from financing activities |
10,604 | 12,221 | 9,730 | 17,290 | 18,225 | |||||||||||||||||||
Effect of exchange rate changes on cash | 1,860 | 1,499 | 384 | 1,932 | 5,929 | |||||||||||||||||||
Net change in cash and cash equivalents |
2,349 | 5,008 | 8,026 | 9,007 | 1,107 | |||||||||||||||||||
Cash and cash equivalents, beginning of period |
35,311 | 38,096 | 40,988 | 42,095 | 42,095 | |||||||||||||||||||
Cash and cash equivalents, end of period |
32,962 | 33,088 | 32,962 | 33,088 | 40,988 |
18 | Ericsson | Second Quarter Report 2015 |
OF CHANGES IN EQUITY
SEK million |
JanJun 2015 |
JanJun 2014 |
JanDec 2014 |
|||||||||
Opening balance |
145,309 | 141,623 | 141,623 | |||||||||
Total comprehensive income | 1,976 | 5,749 | 12,709 | |||||||||
Sale/repurchase of own shares | 88 | 54 | 106 | |||||||||
Stock purchase plan | 414 | 360 | 717 | |||||||||
Dividends paid | 11,060 | 9,828 | 9,846 | |||||||||
Transactions with noncontrolling interests | 2 | | | |||||||||
Closing balance |
136,725 | 137,958 | 145,309 |
ISOLATED QUARTERS
2015 | 2014 | |||||||||||||||||||||||||
Isolated quarters, SEK million | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||
Net sales | 60,671 | 53,520 | 67,986 | 57,643 | 54,849 | 47,505 | ||||||||||||||||||||
Cost of sales | 40,536 | 34,556 | 43,100 | 37,362 | 34,910 | 30,184 | ||||||||||||||||||||
Gross income |
20,135 | 18,964 | 24,886 | 20,281 | 19,939 | 17,321 | ||||||||||||||||||||
Gross margin (%) | 33.2% | 35.4% | 36.6% | 35.2% | 36.4% | 36.5% | ||||||||||||||||||||
Research and development expenses | 9,896 | 8,487 | 9,668 | 9,281 | 9,084 | 8,275 | ||||||||||||||||||||
Selling and administrative expenses | 7,765 | 7,131 | 8,107 | 6,000 | 6,541 | 6,452 | ||||||||||||||||||||
Operating expenses |
17,661 | 15,618 | 17,775 | 15,281 | 15,625 | 14,727 | ||||||||||||||||||||
Other operating income and expenses | 1,059 | 1,240 | 837 | 1,134 | 206 | 21 | ||||||||||||||||||||
Shares in earnings of JV and associated companies | 27 | 27 | 28 | 10 | 109 | 15 | ||||||||||||||||||||
Operating income |
3,560 | 2,133 | 6,302 | 3,876 | 3,999 | 2,630 | ||||||||||||||||||||
Financial income | 238 | 684 | 179 | 429 | 268 | 401 | ||||||||||||||||||||
Financial expenses | 290 | 740 | 639 | 557 | 465 | 612 | ||||||||||||||||||||
Income after financial items |
3,032 | 2,077 | 5,842 | 3,748 | 3,802 | 2,419 | ||||||||||||||||||||
Taxes | 909 | 623 | 1,677 | 1,124 | 1,140 | 727 | ||||||||||||||||||||
Net income |
2,123 | 1,454 | 4,165 | 2,624 | 2,662 | 1,692 | ||||||||||||||||||||
Net income attributable to: | ||||||||||||||||||||||||||
Stockholders of the Parent Company |
2,094 | 1,319 | 4,223 | 2,646 | 2,579 | 2,120 | ||||||||||||||||||||
Noncontrolling interests |
29 | 135 | 58 | 22 | 83 | 428 | ||||||||||||||||||||
Other information | ||||||||||||||||||||||||||
Average number of shares, basic (million) |
3,247 | 3,244 | 3,241 | 3,238 | 3,235 | 3,233 | ||||||||||||||||||||
Earnings per share, basic (SEK) 1) |
0.64 | 0.41 | 1.30 | 0.82 | 0.80 | 0.66 | ||||||||||||||||||||
Earnings per share, diluted (SEK) 1) |
0.64 | 0.40 | 1.29 | 0.81 | 0.79 | 0.65 |
1) Based on Net income attributable to stockholders of the Parent Company.
19 | Ericsson | Second Quarter Report 2015 |
OF CASH FLOWS ISOLATED QUARTERS
2015 | 2014 | |||||||||||||||||||||||||
Isolated quarters, SEK million | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||
Operating activities |
||||||||||||||||||||||||||
Net income | 2,123 | 1,454 | 4,165 | 2,624 | 2,662 | 1,692 | ||||||||||||||||||||
Adjustments to reconcile net income to cash | ||||||||||||||||||||||||||
Taxes |
1,360 | 1,921 | 475 | 388 | 26 | 1,348 | ||||||||||||||||||||
Earnings/dividends in JV and associated companies |
49 | 22 | 25 | 10 | 356 | 16 | ||||||||||||||||||||
Depreciation, amortization and impairment losses |
2,579 | 2,681 | 2,690 | 2,481 | 2,414 | 2,360 | ||||||||||||||||||||
Other |
22 | 944 | 965 | 267 | 404 | 549 | ||||||||||||||||||||
3,413 | 3,136 | 8,270 | 4,974 | 5,862 | 3,237 | |||||||||||||||||||||
Changes in operating net assets |
||||||||||||||||||||||||||
Inventories | 383 | 4,019 | 1,203 | 840 | 1,188 | 2,099 | ||||||||||||||||||||
Customer finance, current and noncurrent | 405 | 258 | 174 | 1,101 | 341 | 558 | ||||||||||||||||||||
Trade receivables | 3,630 | 2,037 | 4,661 | 1,222 | 892 | 7,957 | ||||||||||||||||||||
Trade payables | 1,400 | 1,668 | 1,250 | 1,519 | 1,644 | 110 | ||||||||||||||||||||
Provisions and postemployment benefits | 1,685 | 166 | 152 | 18 | 225 | 464 | ||||||||||||||||||||
Other operating assets and liabilities, net | 5,038 | 4,962 | 2,512 | 1,624 | 2,806 | 323 | ||||||||||||||||||||
335 | 9,036 | 326 | 6,324 | 3,808 | 6,165 | |||||||||||||||||||||
Cash flow from operating activities |
3,078 | 5,900 | 8,596 | 1,350 | 2,054 | 9,402 | ||||||||||||||||||||
Investing activities |
||||||||||||||||||||||||||
Investments in property, plant and equipment | 2,424 | 2,367 | 1,553 | 1,415 | 1,320 | 1,034 | ||||||||||||||||||||
Sales of property, plant and equipment | 1,075 | 75 | 56 | 139 | 53 | 274 | ||||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net | 169 | 58 | 1,747 | 286 | 1,512 | 849 | ||||||||||||||||||||
Product development | 843 | 294 | 986 | 155 | 185 | 197 | ||||||||||||||||||||
Other investing activities | 280 | 118 | 1,533 | 1,302 | 388 | 169 | ||||||||||||||||||||
Shortterm investments | 9,678 | 399 | 4,066 | 2,308 | 7,012 | 6,790 | ||||||||||||||||||||
Cash flow from investing activities |
7,037 | 2,127 | 1,697 | 711 | 3,660 | 8,765 | ||||||||||||||||||||
Cash flow before financing activities |
10,115 | 8,027 | 6,899 | 2,061 | 5,714 | 637 | ||||||||||||||||||||
Financing activities |
||||||||||||||||||||||||||
Dividends paid | 11,035 | 25 | 15 | 3 | 9,828 | | ||||||||||||||||||||
Other financing activities | 431 | 899 | 371 | 1,288 | 2,393 | 5,069 | ||||||||||||||||||||
Cash flow from financing activities |
10,604 | 874 | 356 | 1,291 | 12,221 | 5,069 | ||||||||||||||||||||
Effect of exchange rate changes on cash | 1,860 | 1,476 | 1,691 | 2,306 | 1,499 | 433 | ||||||||||||||||||||
Net change in cash and cash equivalents |
2,349 | 5,677 | 8,946 | 1,046 | 5,008 | 3,999 | ||||||||||||||||||||
Cash and cash equivalents, beginning of period |
35,311 | 40,988 | 32,042 | 33,088 | 38,096 | 42,095 | ||||||||||||||||||||
Cash and cash equivalents, end of period |
32,962 | 35,311 | 40,988 | 32,042 | 33,088 | 38,096 |
20 | Ericsson | Second Quarter Report 2015 |
21 | Ericsson | Second Quarter Report 2015 |
NET SALES BY SEGMENT BY QUARTER
2015 | 2014 | |||||||||||||||||||||||||
Isolated quarters, SEK million | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||
Networks | 31,163 | 26,436 | 34,110 | 30,030 | 28,964 | 24,383 | ||||||||||||||||||||
Global Services | 26,392 | 23,901 | 29,777 | 24,467 | 23,059 | 20,356 | ||||||||||||||||||||
Of which Professional Services |
20,001 | 18,131 | 21,405 | 17,794 | 16,554 | 15,078 | ||||||||||||||||||||
Of which Managed Services |
8,150 | 7,501 | 7,741 | 7,175 | 6,485 | 5,754 | ||||||||||||||||||||
Of which Network Rollout |
6,391 | 5,770 | 8,372 | 6,673 | 6,505 | 5,278 | ||||||||||||||||||||
Support Solutions | 3,092 | 3,074 | 4,009 | 3,057 | 2,824 | 2,765 | ||||||||||||||||||||
Modems | 24 | 109 | 90 | 89 | 2 | 1 | ||||||||||||||||||||
Total |
60,671 | 53,520 | 67,986 | 57,643 | 54,849 | 47,505 | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
Sequential change, percent | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||
Networks | 18% | 22% | 14% | 4% | 19% | 30% | ||||||||||||||||||||
Global Services | 10% | 20% | 22% | 6% | 13% | 25% | ||||||||||||||||||||
Of which Professional Services |
10% | 15% | 20% | 7% | 10% | 20% | ||||||||||||||||||||
Of which Managed Services |
9% | 3% | 8% | 11% | 13% | 12% | ||||||||||||||||||||
Of which Network Rollout |
11% | 31% | 25% | 3% | 23% | 37% | ||||||||||||||||||||
Support Solutions | 1% | 23% | 31% | 8% | 2% | 46% | ||||||||||||||||||||
Modems | | | | | | | ||||||||||||||||||||
Total |
13% | 21% | 18% | 5% | 15% | 29% | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
Year over year change, percent | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||
Networks | 8% | 8% | 2% | 13% | 3% | 13% | ||||||||||||||||||||
Global Services | 14% | 17% | 10% | 2% | 7% | 5% | ||||||||||||||||||||
Of which Professional Services |
21% | 20% | 14% | 10% | 1% | 3% | ||||||||||||||||||||
Of which Managed Services |
26% | 30% | 18% | 15% | 4% | 2% | ||||||||||||||||||||
Of which Network Rollout |
2% | 9% | 0% | 14% | 19% | 23% | ||||||||||||||||||||
Support Solutions | 9% | 11% | 21% | 30% | 21% | 13% | ||||||||||||||||||||
Modems | | | | | | | ||||||||||||||||||||
Total |
11% | 13% | 1% | 9% | 1% | 9% | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
Year to date, SEK million | JanJun | JanMar | JanDec | JanSep | JanJun | JanMar | ||||||||||||||||||||
Networks | 57,599 | 26,436 | 117,487 | 83,377 | 53,347 | 24,383 | ||||||||||||||||||||
Global Services | 50,293 | 23,901 | 97,659 | 67,882 | 43,415 | 20,356 | ||||||||||||||||||||
Of which Professional Services |
38,132 | 18,131 | 70,831 | 49,426 | 31,632 | 15,078 | ||||||||||||||||||||
Of which Managed Services |
15,651 | 7,501 | 27,155 | 19,414 | 12,239 | 5,754 | ||||||||||||||||||||
Of which Network Rollout |
12,161 | 5,770 | 26,828 | 18,456 | 11,783 | 5,278 | ||||||||||||||||||||
Support Solutions | 6,166 | 3,074 | 12,655 | 8,646 | 5,589 | 2,765 | ||||||||||||||||||||
Modems | 133 | 109 | 182 | 92 | 3 | 1 | ||||||||||||||||||||
Total |
114,191 | 53,520 | 227,983 | 159,997 | 102,354 | 47,505 | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||
Year to date, year over year change, percent | JanJun | JanMar | JanDec | JanSep | JanJun | JanMar | ||||||||||||||||||||
Networks | 8% | 8% | 0% | 1% | 5% | 13% | ||||||||||||||||||||
Global Services | 16% | 17% | 0% | 3% | 6% | 5% | ||||||||||||||||||||
Of which Professional Services |
21% | 20% | 7% | 4% | 1% | 3% | ||||||||||||||||||||
Of which Managed Services |
28% | 30% | 7% | 3% | 3% | 2% | ||||||||||||||||||||
Of which Network Rollout |
3% | 9% | 14% | 19% | 21% | 23% | ||||||||||||||||||||
Support Solutions | 10% | 11% | 3% | 21% | 17% | 13% | ||||||||||||||||||||
Modems | | | | | | | ||||||||||||||||||||
Total |
12% | 13% | 0% | 0% | 5% | 9% |
22 | Ericsson | Second Quarter Report 2015 |
BY SEGMENT BY QUARTER
2015 | 2014 | |||||||||||||||||||||||||
Isolated quarters, SEK million | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||
Networks | 2,435 | 590 | 4,319 | 3,175 | 3,574 | 2,476 | ||||||||||||||||||||
Global Services | 1,640 | 1,681 | 1,937 | 1,607 | 1,487 | 1,036 | ||||||||||||||||||||
Of which Professional Services |
2,403 | 2,109 | 2,472 | 2,059 | 2,095 | 1,893 | ||||||||||||||||||||
Of which Network Rollout |
763 | 428 | 535 | 452 | 608 | 857 | ||||||||||||||||||||
Support Solutions | 240 | 82 | 443 | 108 | 378 | 12 | ||||||||||||||||||||
Modems | 7 | 0 | 85 | 739 | 456 | 745 |