Sony Ericsson reports second quarter results

Q2 highlights:

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the second quarter ended June 30, 2009 is as follows:

	Q2 2008	Q1 2009	Q2 2009
Number of units shipped (million)	24.4	14.5	13.8
Sales (Euro m.)	2,820	1,736	1,684
Gross margin (%)	23%	8%	12%
Operating income (Euro m.)	-2	-369	-274
Operating margin (%)	-0%	-21%	-16%
Restructuring charges (Euro m.)	11	12	1
Operating income excl. restructuring charges (Euro m.)	8	-357	-274
Operating margin excl. restructuring charges (%)	0%	-21%	-16%
Income before taxes (IBT) (Euro m.)	8	-370	-283
IBT excl. restructuring charges (Euro m.)	19	-358	-283
Net income (Euro m.)	6	-293	-213
Average selling price (Euro)	116	120	122

Units shipped in the quarter were 13.8 million, a decrease of 43% year-on-year and a sequential decrease of 5%. Sales for the quarter were Euro 1,684 million, a year-on-year decrease of 40%. 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 favourable product mix and less material write-off costs than the previous quarter.

Income before taxes for the quarter, excluding restructuring charges, was a loss of Euro 283 million compared to a loss of Euro 370 million from the previous quarter. This was due to the better gross margin, as well as reduced operating expenses that are a result of the ongoing cost savings program.

 "As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson. Our focus remains on bringing the company back to profitability and growth as quickly as possible, and our performance is starting to improve due to our cost reduction activities. The new product portfolio that integrates communications, entertainment and social media applications should contribute to healthier topline development when shipments start later this year," said Dick Komiyama, President, Sony Ericsson. "We remain confident that the actions we are taking will further improve our financial situation and strengthen Sony Ericsson's competitiveness."

As of June 30, 2009, Sony Ericsson retained a good net cash position of Euro 965 million.

Programs started mid 2008 to reduce operating expenses by Euro 880 million are on track, with the full benefit expected during the second half of 2010. The total restructuring charges for these programs are estimated to be well within the previously announced Euro 500 million. Since the beginning of the cost reduction programs, the total global workforce has been reduced by 2,350 people.

During the quarter Sony Ericsson expanded on its strategy of transforming into the Communication Entertainment brand with the announcement of three new mobile phones; Aino, Satio and Yari. These phones integrate communications features with entertainment content and social media applications. In addition, Sony Ericsson announced the expansion of its content delivery platform, PlayNow(TM) arena, to include an application store and downloadable movies via PC. 

Sony Ericsson maintains its forecast that the global handset market for 2009 will continue to contract by at least 10% from around 1,190 million units in 2008. Sony Ericsson estimates that its market share was over 5% in the second quarter.

The liquid identity and PlayNow are trademarks or registered trademarks of Sony Ericsson Mobile Communications.

Sony is a trademark or registered trademark of Sony Corporation. Ericsson is the trademark or registered trademark of Telefonaktiebolaget LM Ericsson.

Other product and company names mentioned herein may be the trademarks of their respective owners. Any rights not expressly granted herein are reserved. Subject to change without prior notice.

- ENDS -

A live webcast of the conference call will be available on July 16, 2009 at:

10:00	Central European Time (CET)
17:00	Japan Time (JST)
09:00	UK Time (BST)
04:00	US Eastern Time (EDT)

The archived webcast will be available approximately one hour after the completion of the conference call.

 

                              

Japan	+81 3 3570 8228
Sweden	+46 8 5352 6407
UK and Europe	+44 20 7806 1955
US	+1 718 354 1389

REPLAY:
A replay of the conference call will be available approximately two hours after the completion of the conference call until 11:00 pm UK time on July 22, 2009.

Japan	+81 3 3570 8212
Sweden	+46 8 5876 9441
UK and Europe	+44 20 7806 1970
US	+1 718 354 1112

Replay passcode:         6976647#

 

 

 

Financial statements and additional information:

Financial statements:

Consolidated income statement

Consolidated income statement - isolated quarters

Consolidated balance sheet

Consolidated statement of cash flows

Consolidated statement of cash flows - isolated quarters

Additional information:

Net sales by market area by quarter

- ENDS -

Sony Ericsson is a top, global industry player with sales of around 97 million phones in 2008.  Diversity is one of the core strengths of the company, with operations in over 80 countries including manufacturing in China and R&D sites in China, Europe, India, Japan and North America.  Sony Ericsson was established as a 50:50 joint venture by Sony and Ericsson in October 2001, with global corporate functions located in London.  For more information about Sony Ericsson please visit www.sonyericsson.com

 

Gary Pinkham (Stockholm) +46 10 719 0858

Susanne Andersson (Stockholm) +46 10 719 4631

Andreas Hedemyr (Stockholm) +46 10 404 3748          

 

Sony investor relations                                                                              

Shinji Tomita (London) +44 20 7426 8696

Gen Tsuchikawa (Tokyo) +81 3 6748 2180   

 

Aldo Liguori (London) +44 20 8762 5860

Merran Wrigley (London) +44 20 8762 5862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Net cash is defined as cash and bank plus short-term cash investments less interest bearing liabilities.