January 31, 2013
Ericsson's financial report was released at 7.30am CET, on January 31, 2013. On this page you will find: CEO Comments, Press Conference webcast and the Media & Analyst conference call information.
“Our segments showed mixed developments during the year with strong growth in Global Services and Support Solutions, while Networks had a more challenging year. Support Solutions went from losses in 2011 into profitability and together with Global Services represented close to 50% of Group sales in 2012, compared to 42% in 2011,” says Hans Vestberg, President and CEO of Ericsson (NASDAQ:ERIC).
“During the year profitability was negatively impacted by operating losses in ST-Ericsson, the ongoing network modernization projects in Europe as well as the underlying business mix, with a higher share of coverage projects than capacity projects. With present visibility of customer demand, and with the current global economic development, underlying business mix is expected to gradually shift towards more capacity projects during the second half of 2013.
We ended the year with strong cash flow and a full-year cash conversion well above target. The Board of Directors proposes a dividend for 2012 of SEK 2.75 (2.50) per share, an increase by 10%.
Throughout 2012 North America was our strongest market, driven by continued mobile broadband investments and demand for services. However, regions such as South East Asia and Oceania and Sub-Saharan Africa gradually improved during the year.
In the fourth quarter Networks sales recovered, despite continued expected decline in CDMA. Profitability in Networks improved sequentially due to higher sales and a higher share of software sales. Sales and profitability for Global Services and Support Solutions remained stable.
The quarter was negatively impacted by a non-cash charge related to ST-Ericsson. Following the announcement of STMicroelectronics’ intention to exit as a shareholder, Ericsson will explore various strategic options for ST-Ericsson assets. We believe that the modem technology, which we originally contributed to the JV, has a strategic value to the wireless industry.
The work to leverage our strength in the growth areas mobile broadband, managed services and operations and business support systems (OSS/BSS) has continued during the year, with both selective acquisitions and divestments. In addition, we completed the divestment of Sony Ericsson and introduced a new strategy for Support Solutions. Improving profitability, reducing costs and working capital remain high on the agenda also for 2013. While the macroeconomic and political uncertainty continues in certain regions the long-term fundamentals in the industry remain attractive and we are well positioned to continue to support our customers in a transforming ICT market,” concludes Vestberg.
The conference call for financial analysts, investors and media began at 14:00 CET (13:00 UK time, 08:00 Eastern Time in the US, and 22:00 local time in Japan).
President and CEO Hans Vestberg, CFO Jan Frykhammar, Head of Business Unit Networks Johan Wibergh, and Head of Business Unit Support Solutions Per Borgklint commented on the report and took questions.
A replay of the conference call is available till February 7th at 23:59 CET.
Ericsson held a press conference and a live webcast at 09:00 CET on January 31 at Ericsson Studio, Grönlandsgången 4, Kista.
Ericsson President and CEO Hans Vestberg and CFO Jan Frykhammar commented on the report and answered questions. The press conference was open to journalists and analysts.
Note: Webcast viewers was not able to pose questions.