Q1 report 2011
Ericsson's financial report was released at 7.30am CET, on April 27, 2011. On this page you will find: CEO Comments, Press Conference webcast and the Media & Analyst conference call information.
“Group sales in the quarter increased by 17% year-over-year driven by continued strong demand for mobile broadband and especially for the multi-standard radio base station RBS 6000,” says Hans Vestberg, President and CEO of Ericsson. “Sales for comparable units, adjusted for currency and hedging, increased 25% year-over-year. Net income improved from SEK 1.3 b to SEK 4.1 b. mainly related to increased profitability in segment Networks. Cash flow in the quarter amounted to SEK -2.9 (2.3) b. impacted by higher level of work in progress in the regions and continued ramp up of production.
The increase in Group sales was driven by segment Networks where revenues grew 35% year-over-year with an EBITA margin of 20%. The strong demand for mobile broadband resulted in five out of ten regions showing growth year-over-year. Countries with especially strong growth were the US, India, Japan, Korea and Russia. China had continued good momentum for 2G.
Segment Global Services sales decreased -4% year-over-year primarily due to currency exchange rate effects. In local currencies Professional Services grew 3%. EBITA margin decreased to 7% in the quarter mainly due to lower profitability in Network Rollout. Managed Services was flat compared to the first quarter 2010, but grew 11% year-over-year in local currencies driven by a number of new smaller contracts. Segment Multimedia sales were flat year-over-year while EBITA margin dropped to -7%, mainly due to product mix. Our joint ventures showed mixed performance. Sony Ericsson contributed with a profit before tax of SEK 0.1 b. while ST-Ericsson’s loss amounted to SEK -0.6 b.
Sales in the first quarter were not impacted by the devastating earthquake and tsunami in Japan. Our global supply chain of components is partly dependent on Japan and we estimate delays in delivery of certain products. We have taken a number of actions to mitigate the effects to secure that we limit the impact on our customers. These activities include finding and integrating alternative components in our products as well as increasing volumes with second source suppliers. Effects will also depend on Japan’s overall recovery but our best estimate is that we will be able to deliver the majority of these volumes before end of third quarter 2011.
During 2010 we continued to gain market shares in 3G and at least maintained our market shares in 4G/LTE of more than 50%. While GSM will continue to exist for many years, we will see the bulk of investments shifting to 3G/WCDMA and 4G/LTE. In services we increased the market share and we continue to be the leading provider in the industry,” concludes Hans Vestberg.
Media & analyst conference call, Live audio webcast, 2PM CET
Sweden: +46 (0) 850 520 270
UK & Europe: +44 (0) 208 817 9301
US & international: +1 718 354 1226
Confirmation code: 4582748
(Participants will have to quote the confirmation code when dialing into the conference)
A replay of the conference call will be available 90 minutes after the scheduled end time. The playback will be available until May 04, 2011 7:00 pm CET.
Sweden replay number: +46 (0) 8 5052 0294
UK & European replay number: +44 (0) 20 7769 6425
US replay number: +1 630 652 3111
Replay pass code: 4582748#
Press conference webcast, REPLAY
The press conference began at 9am CET on April 27 at the Ericsson Studio, Grönlandsgången 4, Stockholm. President and CEO Hans Vestberg commented on the result and answered questions. The press conference was open to journalists and analysts.
Note: Webcast viewers was not able to post questions.
Windows Media (video for broadband connection)
Flash Player (video for broadband connection)