2009 Snapshot

Financial results in short

  • NET SALES
    SEK 206.5 billion
  • OPERATING INCOME*
    SEK 24.6 billion
  • OPERATING MARGIN*
    12 percent
  • NET CASH
    SEK 36.1 billion (Dec. 31, 2009)
  • EARNINGS
    SEK 1.14
  • *Excluding restructuring charges
    and share in earnings of JVs

Performance

In a progressively more challenging environment during the year, Ericsson’s market shares were well maintained, adjusted operating margin was slightly improved, and cash conversion was well above target.

Grow faster than the market

In the economic slowdown, the market for GSM/WCDMA network equipment and related services is estimated to have declined by more than 10%. Ericsson’s sales for comparable units were down 9%, adjusted for currency and hedging effects. A decline in Networks in line with the market was partly offset by an increase in Professional Services, driven by strong growth in managed services. Reported Multimedia sales increased by 5% for comparable units. The Multimedia market is still too fragmented to make relevant overall market growth estimates.

Best-in-class operating margins

Operating margin, excluding JV results and restructuring, improved slightly to 12% (11%) despite lower volumes and remained the highest among major listed competitors. Multimedia showed the greatest improvement, up significantly from breakeven levels in 2008.

Cash conversion of more than 70%

Cash conversion was well above the target at 117% (92%), reflecting management’s ongoing focus on improving working capital efficiency as well as a lower level of turnkey projects.

Key developments

  • Two billion subscribers supported by Ericsson 24 hours a day, 7 days a week.
  • Ericsson provides managed services to network operators which together serve 370 million subscribers.
  • North America set to become Ericsson’s largest and fastest growing market.
  • Ericsson’s presence in North America elevated – Chief Technology Officer relocated to Silicon Valley.
  • Ericsson is the only supplier selected to participate in all major 4G/LTE projects.
  • A new brand launched with the value proposition: “Innovating to Empower”.
  • Both joint ventures make progress on returning to report profits.

NET SALES
(SEK billion)

NET SALES (SEK billion)

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SALES BY REGION 2009
Ericsson net sales (SEK billion) and change year-over-year

SALES BY REGION 2009 - Ericsson net sales (SEK billion) and change year-over-year

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OUR LARGEST MARKETS
Percent of total sales

OUR LARGEST MARKETS - Percent of total sales

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