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
October 18, 2018
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 ☒ 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): ☐
Announcement of LM Ericsson Telephone Company, October 18, 2018 regarding Ericsson reports third quarter results 2018.
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/ XAVIER DEDULLEN | |
Xavier Dedullen | ||
Senior Vice President, Chief Legal Officer | ||
By: |
/s/ CARL MELLANDER | |
Carl Mellander | ||
Senior Vice President, Chief Financial Officer |
Date: October 18, 2018
Third quarter report 2018
Stockholm, October 18, 2018
Third quarter highlights | ||
| Sales as reported increased YoY by 9% and sales adjusted for comparable units and currency increased by 1%. | |
| Segment Networks showed a sales growth adjusted for comparable units and currency of 5% YoY with strong sales growth in North America as well as in Europe and Latin America. | |
| Gross margin was 36.5% (26.9%). Gross margin excluding restructuring charges improved to 36.9% (28.5%), driven mainly by cost reductions, the continued ramp-up of Ericsson Radio System (ERS) and good progress in reviewing Managed Services contracts. | |
| Operating margin was 6.0% (-7.4%). Operating margin excluding restructuring charges was 7.0% (-1.7%). | |
| Networks operating margin excluding restructuring charges was 16.1% (11.9%) driven by cost reductions and ERS ramp-up, partly offset by increased investments in R&D. | |
| Digital Services operating margin excluding restructuring charges was -15.9% (-29.9%) supported by a gross margin excluding restructuring charges of 36.9% (32.0%). Sequentially, gross margin declined from 42.6% mainly due to increased provisions related to transformation projects. | |
| Managed Services operating margin excluding restructuring charges improved to 6.8% (-9.5%) as a result of cost reductions and customer contract reviews. | |
| Cash flow from operating activities was SEK 2.0 (0.0) b. and free cash flow excluding M&A was SEK 0.7 (-0.8) b. Net cash increased YoY to SEK 32.0 (24.1) b. |
SEK b. |
Q3 2018 |
Q3 2017 |
YoY change |
Q2 2018 |
QoQ change |
9 months 2018 |
9 months 2017 |
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Net sales |
53.8 | 49.4 | 9 | % | 49.8 | 8 | % | 147.0 | 147.5 | |||||||||||||||||||
Sales growth adj. for comparable units and currency |
| | 1 | % | | 7 | % | | | |||||||||||||||||||
Gross margin |
36.5 | % | 26.9 | % | | 34.8 | % | | 35.2 | % | 24.0 | % | ||||||||||||||||
Operating income (loss) |
3.2 | -3.7 | | 0.2 | | 3.1 | -15.5 | |||||||||||||||||||||
Operating margin |
6.0 | % | -7.4 | % | | 0.3 | % | | 2.1 | % | -10.5 | % | ||||||||||||||||
Net income (loss) |
2.7 | -3.5 | | -1.8 | | 0.2 | -13.9 | |||||||||||||||||||||
EPS diluted, SEK |
0.83 | -1.09 | | -0.58 | | 0.01 | -4.31 | |||||||||||||||||||||
EPS (non-IFRS), SEK 1) |
1.03 | -0.29 | | -0.09 | | 1.04 | -2.15 | |||||||||||||||||||||
Cash flow from operating activities |
2.0 | 0.0 | | 1.4 | 41 | % | 5.1 | -1.6 | ||||||||||||||||||||
Free cash flow excluding M&A 2) |
0.7 | -0.8 | | -0.2 | | 1.3 | -5.4 | |||||||||||||||||||||
Net cash, end of period |
32.0 | 24.1 | 33 | % | 33.1 | -3 | % | 32.0 | 24.1 | |||||||||||||||||||
Gross margin excluding restructuring charges |
36.9 | % | 28.5 | % | | 36.7 | % | | 36.5 | % | 26.2 | % | ||||||||||||||||
Operating income (loss) excluding restructuring charges |
3.8 | -0.8 | | 2.0 | 85 | % | 6.7 | -9.4 | ||||||||||||||||||||
Operating margin excluding restructuring charges |
7.0 | % | -1.7 | % | | 4.1 | % | | 4.6 | % | -6.4 | % |
1) | EPS diluted, excl. amortizations and write-downs of acquired intangible assets, and excluding restructuring charges. Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
2) | Free cash flow excluding M&A: See Alternative Performance Measures (APM) at the end of the report. |
Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report.
1 Ericsson | Third Quarter Report 2018 |
CEO comments
2 Ericsson | Third Quarter Report 2018 |
CEO comments |
Financial highlights
SEK b. |
Q3 2018 |
Q3 2017 |
YoY change |
Q2 2018 |
QoQ change |
9 months 2018 |
9 months 2017 |
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Net sales |
53.8 | 49.4 | 9 | % | 49.8 | 8 | % | 147.0 | 147.5 | |||||||||||||||||||
Sales growth adj. for comparable units and currency |
| | 1 | % | | 7 | % | | | |||||||||||||||||||
Gross income |
19.6 | 13.3 | 48 | % | 17.3 | 13 | % | 51.8 | 35.4 | |||||||||||||||||||
Gross margin (%) |
36.5 | % | 26.9 | % | | 34.8 | % | | 35.2 | % | 24.0 | % | ||||||||||||||||
Research and development (R&D) expenses |
-9.4 | -10.5 | -11 | % | -9.8 | -4 | % | -28.2 | -27.9 | |||||||||||||||||||
Selling and administrative expenses |
-6.6 | -5.7 | 15 | % | -7.1 | -6 | % | -19.8 | -20.8 | |||||||||||||||||||
Impairment losses on trade receivables |
-0.4 | -1.1 | -63 | % | -0.4 | 11 | % | -0.8 | -3.0 | |||||||||||||||||||
Other operating income and expenses |
0.0 | 0.4 | -93 | % | 0.0 | | 0.1 | 0.8 | ||||||||||||||||||||
Operating income (loss) |
3.2 | -3.7 | | 0.2 | | 3.1 | -15.5 | |||||||||||||||||||||
Operating margin (%) |
6.0 | % | -7.4 | % | | 0.3 | % | | 2.1 | % | -10.5 | % | ||||||||||||||||
Financial net |
-0.6 | -0.3 | 99 | % | -0.8 | -21 | % | -2.0 | -0.7 | |||||||||||||||||||
Taxes |
0.1 | 0.5 | -72 | % | -1.2 | | -0.9 | 2.2 | ||||||||||||||||||||
Net income (loss) |
2.7 | -3.5 | | -1.8 | | 0.2 | -13.9 | |||||||||||||||||||||
Restructuring charges |
-0.6 | -2.8 | -80 | % | -1.9 | -71 | % | -3.6 | -6.1 | |||||||||||||||||||
Gross income excluding restructuring charges |
19.8 | 14.1 | 41 | % | 18.3 | 9 | % | 53.7 | 38.6 | |||||||||||||||||||
Gross margin excluding restructuring charges |
36.9 | % | 28.5 | % | | 36.7 | % | | 36.5 | % | 26.2 | % | ||||||||||||||||
R&D expenses excluding restructuring charges |
-9.2 | -8.6 | 6 | % | -9.3 | -1 | % | -27.2 | -25.5 | |||||||||||||||||||
SG&A expenses excluding restructuring charges |
-6.5 | -5.6 | 15 | % | -6.6 | -2 | % | -19.2 | -20.4 | |||||||||||||||||||
Operating income (loss) excl. restructuring charges |
3.8 | -0.8 | | 2.0 | 85 | % | 6.7 | -9.4 | ||||||||||||||||||||
Operating margin excluding restructuring charges |
7.0 | % | -1.7 | % | | 4.1 | % | | 4.6 | % | -6.4 | % |
3 Ericsson | Third Quarter Report 2018 |
Financial highlights |
4 Ericsson | Third Quarter Report 2018 |
Financial highlights |
Market area sales
Third quarter 2018 | Change | |||||||||||||||||||||||||||
SEK b. |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | YoY | QoQ | |||||||||||||||||||||
South East Asia, Oceania and India |
5.8 | 1.3 | 0.9 | 0.0 | 8.0 | 2 | % | 14 | % | |||||||||||||||||||
North East Asia |
4.6 | 0.8 | 0.3 | 0.0 | 5.8 | 2 | % | 21 | % | |||||||||||||||||||
North America |
11.8 | 2.1 | 1.0 | 0.0 | 14.9 | 21 | % | 4 | % | |||||||||||||||||||
Europe and Latin America |
8.7 | 2.9 | 3.2 | 0.1 | 14.8 | 10 | % | 5 | % | |||||||||||||||||||
Middle East and Africa |
3.1 | 1.5 | 1.0 | 0.0 | 5.7 | -9 | % | 2 | % | |||||||||||||||||||
Other 1) |
1.9 | 0.4 | 0.0 | 2.3 | 4.6 | 19 | % | 17 | % | |||||||||||||||||||
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Total |
35.9 | 9.0 | 6.5 | 2.4 | 53.8 | 9 | % | 8 | % | |||||||||||||||||||
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1) | Market Area Other includes primarily licensing revenues and the major part of segment Emerging Business and Other |
5 Ericsson | Third Quarter Report 2018 |
Market area sales |
Segment results
Networks
SEK b. |
Q3 2018 |
Q3 2017 |
YoY change |
Q2 2018 |
QoQ change |
9 months 2018 |
9 months 2017 |
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Net sales |
35.9 | 31.9 | 13 | % | 32.4 | 11 | % | 96.9 | 95.2 | |||||||||||||||||||
Of which products |
25.3 | 21.7 | 17 | % | 22.3 | 14 | % | 67.1 | 64.9 | |||||||||||||||||||
Of which IPR licensing revenues |
1.8 | 1.6 | 7 | % | 1.5 | 18 | % | 4.8 | 5.0 | |||||||||||||||||||
Of which services |
10.6 | 10.1 | 5 | % | 10.1 | 5 | % | 29.8 | 30.3 | |||||||||||||||||||
Sales growth adjusted for comparable units and currency |
| | 5 | % | | 9 | % | | | |||||||||||||||||||
Gross income |
14.8 | 10.7 | 39 | % | 12.6 | 18 | % | 38.5 | 31.6 | |||||||||||||||||||
Gross margin |
41.3 | % | 33.4 | % | | 38.8 | % | | 39.7 | % | 33.2 | % | ||||||||||||||||
Operating income |
5.7 | 2.4 | 138 | % | 3.5 | 60 | % | 12.6 | 8.5 | |||||||||||||||||||
Operating margin |
15.7 | % | 7.5 | % | | 10.9 | % | | 13.0 | % | 8.9 | % | ||||||||||||||||
Restructuring charges |
-0.1 | -1.4 | -91 | % | -0.7 | -83 | % | -1.4 | -3.6 | |||||||||||||||||||
Gross income excl. restructuring charges |
14.9 | 11.1 | 34 | % | 13.0 | 14 | % | 39.5 | 33.7 | |||||||||||||||||||
Gross margin excl. restructuring charges |
41.5 | % | 34.8 | % | | 40.2 | % | | 40.7 | % | 35.4 | % | ||||||||||||||||
Operating income excl. restructuring charges |
5.8 | 3.8 | 53 | % | 4.3 | 35 | % | 13.9 | 12.1 | |||||||||||||||||||
Operating margin excl. restructuring charges |
16.1 | % | 11.9 | % | | 13.3 | % | | 14.4 | % | 12.7 | % |
6 Ericsson | Third Quarter Report 2018 |
Segment results | Networks |
Digital Services
SEK b. |
Q3 2018 |
Q3 2017 |
YoY change |
Q2 2018 |
QoQ change |
9 months 2018 |
9 months 2017 |
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Net sales |
9.0 | 8.9 | 1 | % | 8.8 | 2 | % | 25.1 | 26.9 | |||||||||||||||||||
Of which products |
4.6 | 4.9 | -6 | % | 4.5 | 3 | % | 13.0 | 14.6 | |||||||||||||||||||
Of which IPR licensing revenues |
0.4 | 0.4 | 7 | % | 0.3 | 18 | % | 1.0 | 1.1 | |||||||||||||||||||
Of which services |
4.4 | 4.1 | 8 | % | 4.4 | 1 | % | 12.1 | 12.4 | |||||||||||||||||||
Sales growth adjusted for comparable units and currency |
| | -6 | % | | 0 | % | | | |||||||||||||||||||
Gross income |
3.2 | 2.6 | 22 | % | 3.5 | -7 | % | 9.6 | 3.6 | |||||||||||||||||||
Gross margin |
35.7 | % | 29.3 | % | | 39.1 | % | | 38.1 | % | 13.3 | % | ||||||||||||||||
Operating income (loss) |
-1.8 | -3.8 | -53 | % | -2.4 | | -6.8 | -15.0 | ||||||||||||||||||||
Operating margin |
-19.9 | % | -42.2 | % | | -26.9 | % | | -27.0 | % | -55.7 | % | ||||||||||||||||
Restructuring charges |
-0.4 | -1.1 | -68 | % | -0.9 | -59 | % | -1.8 | -1.8 | |||||||||||||||||||
Gross income excl. restructuring charges |
3.3 | 2.9 | 16 | % | 3.8 | -12 | % | 10.2 | 4.3 | |||||||||||||||||||
Gross margin excl. restructuring charges |
36.9 | % | 32.0 | % | | 42.6 | % | | 40.7 | % | 15.8 | % | ||||||||||||||||
Operating income (loss) excl. restructuring charges |
-1.4 | -2.7 | | -1.5 | | -4.9 | -13.2 | |||||||||||||||||||||
Operating margin excl. restructuring charges |
-15.9 | % | -29.9 | % | | -16.9 | % | | -19.7 | % | -49.0 | % |
7 Ericsson | Third Quarter Report 2018 |
Segment results | Digital Services |
Managed Services
SEK b. |
Q3 2018 |
Q3 2017 |
YoY change |
Q2 2018 |
QoQ change |
9 months 2018 |
9 months 2017 |
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Net sales |
6.5 | 6.6 | -2 | % | 6.5 | -1 | % | 18.9 | 19.6 | |||||||||||||||||||
Sales growth adjusted for comparable units and currency |
| | -8 | % | | -1 | % | | | |||||||||||||||||||
Gross income (loss) |
0.8 | -0.4 | | 0.8 | 0 | % | 2.1 | -0.9 | ||||||||||||||||||||
Gross margin |
12.5 | % | -5.4 | % | | 12.4 | % | | 11.1 | % | -4.5 | % | ||||||||||||||||
Operating income (loss) |
0.4 | -0.7 | | 0.3 | 37 | % | 0.8 | -2.8 | ||||||||||||||||||||
Operating margin |
6.3 | % | -11.0 | % | | 4.6 | % | | 4.3 | % | -14.4 | % | ||||||||||||||||
Restructuring charges |
0.0 | -0.1 | | -0.1 | | -0.2 | -0.3 | |||||||||||||||||||||
Gross income (loss) excl. restructuring charges |
0.8 | -0.3 | | 0.9 | -9 | % | 2.3 | -0.6 | ||||||||||||||||||||
Gross margin excl. restructuring charges |
12.9 | % | -4.0 | % | | 14.0 | % | | 12.1 | % | -3.0 | % | ||||||||||||||||
Operating income (loss) excl. restructuring charges |
0.4 | -0.6 | | 0.4 | 5 | % | 1.0 | -2.5 | ||||||||||||||||||||
Operating margin excl. restructuring charges |
6.8 | % | -9.5 | % | | 6.5 | % | | 5.4 | % | -12.8 | % |
8 Ericsson | Third Quarter Report 2018 |
Segment results | Managed Services |
Emerging Business and Other (includes Emerging Business, MediaKind, Red Bee Media and iconectiv)
SEK b. |
Q3 2018 |
Q3 2017 |
YoY change |
Q2 2018 |
QoQ change |
9 months 2018 |
9 months 2017 |
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Net sales |
2.4 | 2.0 | 22 | % | 2.1 | 18 | % | 6.1 | 5.8 | |||||||||||||||||||
Sales growth adjusted for comparable units and currency |
| | 11 | % | | 15 | % | | | |||||||||||||||||||
Gross income |
0.8 | 0.4 | 113 | % | 0.5 | 56 | % | 1.6 | 1.1 | |||||||||||||||||||
Gross margin |
32.3 | % | 18.4 | % | | 24.4 | % | | 26.6 | % | 19.5 | % | ||||||||||||||||
Operating income (loss) |
-1.0 | -1.5 | | -1.3 | | -3.5 | -6.2 | |||||||||||||||||||||
Operating margin |
-42.9 | % | -76.7 | % | | -63.5 | % | | -57.4 | % | -106.3 | % | ||||||||||||||||
Restructuring charges |
0.0 | -0.2 | -84 | % | -0.1 | | -0.2 | -0.4 | ||||||||||||||||||||
Gross income excl. restructuring charges |
0.8 | 0.4 | 87 | % | 0.6 | 39 | % | 1.7 | 1.3 | |||||||||||||||||||
Gross margin excl. restructuring charges |
32.3 | % | 21.1 | % | | 27.4 | % | | 28.5 | % | 22.0 | % | ||||||||||||||||
Operating income (loss) excl. restructuring charges |
-1.0 | -1.3 | | -1.2 | | -3.3 | -5.8 | |||||||||||||||||||||
Operating margin excl. restructuring charges |
-41.5 | % | -66.2 | % | | -57.4 | % | | -53.8 | % | -99.7 | % |
9 Ericsson | Third Quarter Report 2018 |
Segment results | Emerging Business and Other |
Cash flow
SEK b. |
Q3 2018 |
Q3 2017 |
Q2 2018 |
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Net income reconciled to cash |
2.9 | -0.8 | -0.3 | |||||||||
Changes in operating net assets |
-0.9 | 0.8 | 1.7 | |||||||||
Cash flow from operating activities |
2.0 | 0.0 | 1.4 | |||||||||
Cash flow from investing activities |
-1.7 | 3.3 | 1.6 | |||||||||
Cash flow from financing activities |
0.3 | 1.4 | -3.7 | |||||||||
Effect of exchange rate changes on cash |
-1.6 | 0.0 | 1.0 | |||||||||
Net change in cash and cash equivalents |
-1.0 | 4.8 | 0.4 | |||||||||
Free cash flow excluding M&A |
0.7 | -0.8 | -0.2 | |||||||||
Free cash flow |
0.3 | -0.5 | -0.6 |
10 Ericsson | Third Quarter Report 2018 |
Cash flow |
Financial position
SEK b. |
Sep 30 2018 |
Sep 30 2017 |
Jun 30 2018 |
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+ Cash and cash equivalents |
36.1 | 26.2 | 37.0 | |||||||||
+ Interest-bearing securities, current |
6.6 | 6.5 | 8.3 | |||||||||
+ Interest-bearing securities, non-current |
23.0 | 22.4 | 21.5 | |||||||||
Gross cash |
65.7 | 55.1 | 66.9 | |||||||||
Borrowings, current |
2.5 | 3.0 | 2.6 | |||||||||
Borrowings, non-current |
31.2 | 28.0 | 31.1 | |||||||||
Net cash |
32.0 | 24.1 | 33.1 | |||||||||
Equity |
96.0 | 112.7 | 93.6 | |||||||||
Total assets |
264.8 | 267.2 | 265.3 | |||||||||
Capital turnover (times) |
1.3 | 1.1 | 1.2 | |||||||||
Return on capital employed (%) |
2.6 | % | -11.8 | % | 0.1 | % | ||||||
Equity ratio (%) |
36.2 | % | 42.2 | % | 35.3 | % | ||||||
Return on equity (%) |
0.0 | % | -15.2 | % | -5.7 | % |
11 Ericsson | Third Quarter Report 2018 |
Financial position |
Parent Company
12 Ericsson | Third Quarter Report 2018 |
Parent Company |
Other information
13 Ericsson | Third Quarter Report 2018 |
Other information |
Risk factors
14 Ericsson | Third Quarter Report 2018 |
Risk factors |
Auditors Review Report
15 Ericsson | Third Quarter Report 2018 |
Auditors Review Report |
Editors note
16 Ericsson | Third Quarter Report 2018 |
Editors note |
Forward-looking statements
17 Ericsson | Third Quarter Report 2018 |
Forward-looking statements |
Financial statements and
other information
18 Ericsson | Third Quarter Report 2018 |
Financial statements and other information |
Jul-Sep | Jan-Sep | |||||||||||||||||||||||
SEK million |
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||||
Net sales |
53,810 | 49,413 | 9 | % | 147,029 | 147,497 | 0 | % | ||||||||||||||||
Cost of sales |
-34,180 | -36,132 | -5 | % | -95,208 | -112,086 | -15 | % | ||||||||||||||||
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Gross income |
19,630 | 13,281 | 48 | % | 51,821 | 35,411 | 46 | % | ||||||||||||||||
Gross margin (%) |
36.5 | % | 26.9 | % | 35.2 | % | 24.0 | % | ||||||||||||||||
Research and development expenses |
-9,388 | -10,519 | -11 | % | -28,244 | -27,949 | 1 | % | ||||||||||||||||
Selling and administrative expenses |
-6,625 | -5,741 | 15 | % | -19,834 | -20,782 | -5 | % | ||||||||||||||||
Impairment losses on trade receivables 1) |
-409 | -1,094 | -63 | % | -806 | -2,969 | -73 | % | ||||||||||||||||
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Operating expenses |
-16,422 | -17,354 | -5 | % | -48,884 | -51,700 | -5 | % | ||||||||||||||||
Other operating income and expenses |
31 | 415 | 126 | 795 | ||||||||||||||||||||
Shares in earnings of JV and associated companies |
2 | 6 | 31 | 29 | ||||||||||||||||||||
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Operating income (loss) |
3,241 | -3,652 | -189 | % | 3,094 | -15,465 | -120 | % | ||||||||||||||||
Financial income |
-225 | -139 | -22 | -248 | ||||||||||||||||||||
Financial expenses |
-414 | -182 | -1,968 | -449 | ||||||||||||||||||||
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Income after financial items |
2,602 | -3,973 | -165 | % | 1,104 | -16,162 | -107 | % | ||||||||||||||||
Taxes |
146 | 516 | -72 | % | -883 | 2,222 | -140 | % | ||||||||||||||||
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Net income (loss) |
2,748 | -3,457 | -179 | % | 221 | -13,940 | -102 | % | ||||||||||||||||
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Net income (loss) attributable to: |
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Stockholders of the Parent Company |
2,745 | -3,561 | 23 | -14,100 | ||||||||||||||||||||
Non-controlling interests |
3 | 104 | 198 | 160 | ||||||||||||||||||||
Other information |
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Average number of shares, basic (million) |
3,293 | 3,279 | 3,290 | 3,275 | ||||||||||||||||||||
Earnings (loss) per share, basic (SEK) 2) |
0.84 | -1.09 | 0.01 | -4.31 | ||||||||||||||||||||
Earnings (loss) per share, diluted (SEK) 3) |
0.83 | -1.09 | 0.01 | -4.31 |
1) | Impairment of trade receivables has been calculated according to IFRS 9 in 2018 and according to IAS 39 in 2017. Previously, these losses have been reported as selling and administrative expenses. |
2) | Based on net income (loss) attributable to stockholders of the Parent Company. |
3) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
Statement of comprehensive income (loss)
Jul-Sep | Jan-Sep | |||||||||||||||
SEK million |
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) |
2,748 | -3,457 | 221 | -13,940 | ||||||||||||
Other comprehensive income (loss) |
||||||||||||||||
Items that will not be reclassified to profit or loss |
||||||||||||||||
Remeasurements of defined benefits pension plans incl. asset ceiling |
1,223 | -2,618 | 497 | -1,646 | ||||||||||||
Revaluation of borrowings due to change in credit risk |
-292 | | -226 | | ||||||||||||
Tax on items that will not be reclassified to profit or loss |
-217 | 546 | -270 | 217 | ||||||||||||
Items that may be reclassified to profit or loss |
||||||||||||||||
Available-for-sale financial assets |
||||||||||||||||
Gains/losses arising during the period |
| 5 | | 78 | ||||||||||||
Reclassification adjustments on gains/losses included in profit or loss |
| | | 5 | ||||||||||||
Revaluation of other investments in shares and participations |
||||||||||||||||
Fair value remeasurement |
| -5 | | -3 | ||||||||||||
Changes in cumulative translation adjustments |
-1,237 | -1,728 | 1,804 | -4,523 | ||||||||||||
Share of other comprehensive income on JV and associated companies |
-5 | -8 | 15 | -7 | ||||||||||||
Tax on items that may be reclassified to profit or loss |
| 1 | | -17 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income (loss), net of tax |
-528 | -3,807 | 1,820 | -5,896 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) |
2,220 | -7,264 | 2,041 | -19,836 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income (loss) attributable to: |
||||||||||||||||
Stockholders of the Parent Company |
2,223 | -7,327 | 1,807 | -19,939 | ||||||||||||
Non-controlling interest |
-3 | 63 | 234 | 103 |
19 Ericsson | Third Quarter Report 2018 |
Financial statements |
Sep 30 | Jun 30 | Dec 31 | ||||||||||
SEK million |
2018 | 2018 | 2017 | |||||||||
ASSETS |
||||||||||||
Non-current assets |
||||||||||||
Intangible assets |
||||||||||||
Capitalized development expenses |
4,918 | 5,458 | 4,593 | |||||||||
Goodwill |
30,514 | 30,145 | 27,815 | |||||||||
Intellectual property rights, brands and other intangible assets |
3,493 | 3,883 | 4,148 | |||||||||
Property, plant and equipment |
12,810 | 12,894 | 12,857 | |||||||||
Financial assets |
||||||||||||
Equity in JV and associated companies |
625 | 658 | 624 | |||||||||
Other investments in shares and participations |
1,572 | 1,587 | 1,279 | |||||||||
Customer finance, non-current |
780 | 1,367 | 2,178 | |||||||||
Interest-bearing securities, non-current |
23,014 | 21,501 | 25,105 | |||||||||
Other financial assets, non-current |
6,254 | 6,805 | 5,897 | |||||||||
Deferred tax assets |
24,648 | 23,573 | 21,963 | |||||||||
|
|
|
|
|
|
|||||||
108,628 | 107,871 | 106,459 | ||||||||||
Current assets |
||||||||||||
Inventories |
30,635 | 30,050 | 25,547 | |||||||||
Contract assets |
14,794 | 12,460 | 13,120 | |||||||||
Trade receivables |
41,456 | 41,580 | 48,105 | |||||||||
Customer finance, current |
1,240 | 1,664 | 1,753 | |||||||||
Other current receivables |
25,446 | 26,344 | 22,301 | |||||||||
Interest-bearing securities, current |
6,591 | 8,304 | 6,713 | |||||||||
Cash and cash equivalents |
36,058 | 37,049 | 35,884 | |||||||||
|
|
|
|
|
|
|||||||
156,220 | 157,451 | 153,423 | ||||||||||
|
|
|
|
|
|
|||||||
Total assets |
264,848 | 265,322 | 259,882 | |||||||||
|
|
|
|
|
|
|||||||
EQUITY AND LIABILITIES |
||||||||||||
Equity |
||||||||||||
Stockholders equity |
95,087 | 92,689 | 96,935 | |||||||||
Non-controlling interest in equity of subsidiaries |
866 | 871 | 636 | |||||||||
|
|
|
|
|
|
|||||||
95,953 | 93,560 | 97,571 | ||||||||||
Non-current liabilities |
||||||||||||
Post-employment benefits |
25,475 | 27,306 | 25,009 | |||||||||
Provisions, non-current |
3,420 | 2,819 | 3,596 | |||||||||
Deferred tax liabilities |
1,274 | 1,332 | 901 | |||||||||
Borrowings, non-current |
31,187 | 31,131 | 30,500 | |||||||||
Other non-current liabilities |
4,456 | 4,549 | 2,776 | |||||||||
|
|
|
|
|
|
|||||||
65,812 | 67,137 | 62,782 | ||||||||||
Current liabilities |
||||||||||||
Provisions, current |
5,275 | 6,715 | 6,283 | |||||||||
Borrowings, current |
2,463 | 2,642 | 2,545 | |||||||||
Contract liabilities |
30,108 | 30,959 | 29,076 | |||||||||
Trade payables |
28,914 | 28,563 | 26,320 | |||||||||
Other current liabilities |
36,323 | 35,746 | 35,305 | |||||||||
|
|
|
|
|
|
|||||||
103,083 | 104,625 | 99,529 | ||||||||||
|
|
|
|
|
|
|||||||
Total equity and liabilities |
264,848 | 265,322 | 259,882 | |||||||||
|
|
|
|
|
|
|||||||
Of which interest-bearing liabilities |
33,650 | 33,773 | 33,045 | |||||||||
Assets pledged as collateral |
5,768 | 5,702 | 5,215 | |||||||||
Contingent liabilities 1) |
1,490 | 1,363 | 1,561 |
1) | Contingent liabilities does not include any amounts related to investigation by the SEC and the DOJ about Ericssons compliance with the U.S Foreign Corrupt Practices Act (FCPA). For information about the investigation by the SEC and the DOJ, please refer to Other information on page 13 of this report. |
20 Ericsson | Third Quarter Report 2018 |
Financial statements |
Consolidated statement of cash flows
Jul-Sep | Jan-Sep | Jan-Dec | ||||||||||||||||||
SEK million |
2018 | 2017 | 2018 | 2017 | 2017 | |||||||||||||||
Operating activities |
||||||||||||||||||||
Net income (loss) |
2,748 | -3,457 | 221 | -13,940 | -32,433 | |||||||||||||||
Adjustments to reconcile net income to cash |
||||||||||||||||||||
Taxes |
-2,101 | -1,323 | -5,487 | -7,261 | -9,064 | |||||||||||||||
Earnings/dividends in JV and associated companies |
28 | 73 | 13 | 58 | 56 | |||||||||||||||
Depreciation, amortization and impairment losses |
1,893 | 4,146 | 5,849 | 11,774 | 27,892 | |||||||||||||||
Other |
348 | -218 | 1,056 | 261 | 440 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income reconciled to cash |
2,916 | -779 | 1,652 | -9,108 | -13,109 | |||||||||||||||
Changes in operating net assets |
||||||||||||||||||||
Inventories |
-1,773 | 1,061 | -6,496 | -3,637 | 4,719 | |||||||||||||||
Customer finance, current and non-current |
1,001 | 456 | 1,948 | 762 | 798 | |||||||||||||||
Trade receivables and contract assets |
-3,503 | 623 | 5,474 | 3,625 | 1,379 | |||||||||||||||
Trade payables |
953 | -1,061 | 1,607 | -679 | 1,886 | |||||||||||||||
Provisions and post-employment benefits |
-265 | -608 | -634 | 4,343 | 4,755 | |||||||||||||||
Contract liabilities |
-220 | -1,910 | 304 | 2,324 | 5,024 | |||||||||||||||
Other operating assets and liabilities, net |
2,931 | 2,200 | 1,200 | 812 | 4,149 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
-876 | 761 | 3,403 | 7,550 | 22,710 | ||||||||||||||||
Cash flow from operating activities |
2,040 | -18 | 5,055 | -1,558 | 9,601 | |||||||||||||||
Investing activities |
||||||||||||||||||||
Investments in property, plant and equipment |
-1,088 | -739 | -2,895 | -2,772 | -3,877 | |||||||||||||||
Sales of property, plant and equipment |
102 | 12 | 277 | 118 | 1,016 | |||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-425 | 371 | -1,305 | 383 | 276 | |||||||||||||||
Product development |
-151 | -126 | -730 | -1,306 | -1,444 | |||||||||||||||
Other investing activities |
-190 | 42 | -427 | 110 | -463 | |||||||||||||||
Interest-bearing securities |
30 | 3,756 | 3,152 | -8,806 | -11,578 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flow from investing activities |
-1,722 | 3,316 | -1,928 | -12,273 | -16,070 | |||||||||||||||
Cash flow before financing activities |
318 | 3,298 | 3,127 | -13,831 | -6,469 | |||||||||||||||
Financing activities |
||||||||||||||||||||
Dividends paid |
-2 | -145 | -3,291 | -3,423 | -3,424 | |||||||||||||||
Other financing activities |
254 | 1,563 | -223 | 6,829 | 8,902 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flow from financing activities |
252 | 1,418 | -3,514 | 3,406 | 5,478 | |||||||||||||||
Effect of exchange rate changes on cash |
-1,562 | 48 | 561 | -331 | -91 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net change in cash and cash equivalents |
-992 | 4,764 | 174 | -10,756 | -1,082 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents, beginning of period |
37,050 | 21,446 | 35,884 | 36,966 | 36,966 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents, end of period |
36,058 | 26,210 | 36,058 | 26,210 | 35,884 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
21 Ericsson | Third Quarter Report 2018 |
Financial statements |
of changes in equity
Jan-Sep | Jan-Dec | |||||||||||
SEK million |
2018 | 2017 | 2017 | |||||||||
Opening balance 1) |
97,571 | 135,257 | 135,257 | |||||||||
Opening balance adjustment due to IFRS 9 |
-983 | | | |||||||||
|
|
|
|
|
|
|||||||
Adjusted opening balance |
96,588 | 135,257 | 135,257 | |||||||||
Total comprehensive income (loss) |
2,041 | -19,836 | -35,232 | |||||||||
Sale/repurchase of own shares |
76 | -28 | -5 | |||||||||
Stock issue (net) |
| 15 | 15 | |||||||||
Long-term variable compensation plans |
540 | 650 | 885 | |||||||||
Dividends paid |
-3,291 | -3,424 | -3,424 | |||||||||
Transactions with non-controlling interests |
-1 | 76 | 75 | |||||||||
|
|
|
|
|
|
|||||||
Closing balance |
95,953 | 112,710 | 97,571 | |||||||||
|
|
|
|
|
|
1) | The opening balance adjustment for IFRS 15 on initial application date (January 1, 2016) was SEK -4,353 million. Opening balances of 2017 and 2018 have been restated for IFRS 15. |
- isolated quarters
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
Cost of sales |
-34,180 | -32,475 | -28,553 | -45,365 | -36,132 | -35,652 | -40,302 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross income |
19,630 | 17,333 | 14,858 | 12,516 | 13,281 | 14,629 | 7,501 | |||||||||||||||||||||
Gross margin (%) |
36.5 | % | 34.8 | % | 34.2 | % | 21.6 | % | 26.9 | % | 29.1 | % | 15.7 | % | ||||||||||||||
Research and development expenses |
-9,388 | -9,783 | -9,073 | -9,938 | -10,519 | -8,364 | -9,066 | |||||||||||||||||||||
Selling and administrative expenses |
-6,625 | -7,053 | -6,156 | -8,245 | -5,741 | -6,818 | -8,223 | |||||||||||||||||||||
Impairment losses on trade receivables 1) |
-409 | -369 | -28 | -680 | -1,094 | -235 | -1,640 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating expenses |
-16,422 | -17,205 | -15,257 | -18,863 | -17,354 | -15,417 | -18,929 | |||||||||||||||||||||
Other operating income and expenses |
31 | 11 | 84 | -12,926 | 2) | 415 | 239 | 141 | ||||||||||||||||||||
Shares in earnings of JV and associated companies |
2 | 26 | 3 | -5 | 6 | 12 | 11 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating income (loss) |
3,241 | 165 | -312 | -19,278 | -3,652 | -537 | -11,276 | |||||||||||||||||||||
Financial income |
-225 | 275 | -72 | -124 | -139 | -27 | -82 | |||||||||||||||||||||
Financial expenses |
-414 | -1,085 | -469 | -394 | -182 | 83 | -350 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income after financial items |
2,602 | -645 | -853 | -19,796 | -3,973 | -481 | -11,708 | |||||||||||||||||||||
Taxes |
146 | -1,157 | 128 | 1,303 | 516 | 24 | 1,682 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) |
2,748 | -1,802 | -725 | -18,493 | -3,457 | -457 | -10,026 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||||||||||
Stockholders of the Parent Company |
2,745 | -1,885 | -837 | -18,476 | -3,561 | -471 | -10,068 | |||||||||||||||||||||
Non-controlling interests |
3 | 83 | 112 | -17 | 104 | 14 | 42 | |||||||||||||||||||||
Other information |
||||||||||||||||||||||||||||
Average number of shares, basic (million) |
3,293 | 3,290 | 3,286 | 3,283 | 3,279 | 3,275 | 3,272 | |||||||||||||||||||||
Earnings (loss) per share, basic (SEK) 3) |
0.84 | -0.58 | -0.25 | -5.63 | -1.09 | -0.14 | -3.08 | |||||||||||||||||||||
Earnings (loss) per share, diluted (SEK) 4) |
0.83 | -0.58 | -0.25 | -5.63 | -1.09 | -0.14 | -3.08 |
1) | Impairment of trade receivables has been calculated according to IFRS 9 in 2018 and according to IAS 39 in 2017. Previously, these losses have been reported as selling and administrative expenses. |
2) | Includes write-down of goodwill of SEK -13.0 billion. |
3) | Based on net income (loss) attributable to stockholders of the Parent Company. |
4) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
22 Ericsson | Third Quarter Report 2018 |
Financial statements |
of cash flows - isolated quarters
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Operating activities |
||||||||||||||||||||||||||||
Net income (loss) |
2,748 | -1,802 | -725 | -18,493 | -3,457 | -457 | -10,026 | |||||||||||||||||||||
Adjustments to reconcile net income to cash |
||||||||||||||||||||||||||||
Taxes |
-2,101 | -1,071 | -2,315 | -1,803 | -1,323 | -1,826 | -4,112 | |||||||||||||||||||||
Earnings/dividends in JV and associated companies |
28 | -19 | 4 | -2 | 73 | -8 | -7 | |||||||||||||||||||||
Depreciation, amortization and impairment losses |
1,893 | 2,065 | 1,891 | 16,118 | 4,146 | 2,197 | 5,431 | |||||||||||||||||||||
Other |
348 | 568 | 140 | 179 | -218 | -48 | 527 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income reconciled to cash |
2,916 | -259 | -1,005 | -4,001 | -779 | -142 | -8,187 | |||||||||||||||||||||
Changes in operating net assets |
||||||||||||||||||||||||||||
Inventories |
-1,773 | -1,910 | -2,813 | 8,356 | 1,061 | -1,492 | -3,206 | |||||||||||||||||||||
Customer finance, current and non-current |
1,001 | 547 | 400 | 36 | 456 | 1,140 | -834 | |||||||||||||||||||||
Trade receivables and contract assets |
-3,503 | 1,661 | 7,316 | -2,246 | 623 | 184 | 2,818 | |||||||||||||||||||||
Trade payables |
953 | 1,252 | -598 | 2,565 | -1,061 | 19 | 363 | |||||||||||||||||||||
Provisions and post-employment benefits |
-265 | 478 | -847 | 412 | -608 | 315 | 4,636 | |||||||||||||||||||||
Contract liabilities |
-220 | -233 | 757 | 2,700 | -1,910 | -573 | 4,807 | |||||||||||||||||||||
Other operating assets and liabilities, net |
2,931 | -94 | -1,637 | 3,337 | 2,200 | 550 | -1,938 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
-876 | 1,701 | 2,578 | 15,160 | 761 | 143 | 6,646 | ||||||||||||||||||||||
Cash flow from operating activities |
2,040 | 1,442 | 1,573 | 11,159 | -18 | 1 | -1,541 | |||||||||||||||||||||
Investing activities |
||||||||||||||||||||||||||||
Investments in property, plant and equipment |
-1,088 | -951 | -856 | -1,105 | -739 | -1,018 | -1,015 | |||||||||||||||||||||
Sales of property, plant and equipment |
102 | 52 | 123 | 898 | 12 | 37 | 69 | |||||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-425 | -431 | -449 | -107 | 371 | 9 | 3 | |||||||||||||||||||||
Product development |
-151 | -325 | -254 | -138 | -126 | -315 | -865 | |||||||||||||||||||||
Other investing activities |
-190 | -398 | 161 | -573 | 42 | -42 | 110 | |||||||||||||||||||||
Interest-bearing securities |
30 | 3,656 | -534 | -2,772 | 3,756 | -676 | -11,886 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash flow from investing activities |
-1,722 | 1,603 | -1,809 | -3,797 | 3,316 | -2,005 | -13,584 | |||||||||||||||||||||
Cash flow before financing activities |
318 | 3,045 | -236 | 7,362 | 3,298 | -2,004 | -15,125 | |||||||||||||||||||||
Financing activities |
||||||||||||||||||||||||||||
Dividends paid |
-2 | -3,289 | | -1 | -145 | -3,274 | -4 | |||||||||||||||||||||
Other financing activities |
254 | -383 | -94 | 2,073 | 1,563 | -5,636 | 10,902 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash flow from financing activities |
252 | -3,672 | -94 | 2,072 | 1,418 | -8,910 | 10,898 | |||||||||||||||||||||
Effect of exchange rate changes on cash |
-1,562 | 980 | 1,143 | 240 | 48 | -594 | 215 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net change in cash and cash equivalents |
-992 | 353 | 813 | 9,674 | 4,764 | -11,508 | -4,012 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents, beginning of period |
37,050 | 36,697 | 35,884 | 26,210 | 21,446 | 32,954 | 36,966 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and cash equivalents, end of period |
36,058 | 37,050 | 36,697 | 35,884 | 26,210 | 21,446 | 32,954 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23 Ericsson | Third Quarter Report 2018 |
Financial statements |
Parent Company income statement
Jul-Sep | Jan-Sep | Jan-Dec | ||||||||||||||||||
SEK million |
2018 | 2017 | 2018 | 2017 | 2017 | |||||||||||||||
Net sales |
| | | | | |||||||||||||||
Cost of sales |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross income |
| | | | | |||||||||||||||
Operating expenses |
-879 | -216 | -1,385 | -860 | -1,294 | |||||||||||||||
Other operating income and expenses |
399 | 557 | 1,153 | 1,747 | 1,616 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income |
-480 | 341 | -232 | 887 | 322 | |||||||||||||||
Financial net |
2,015 | 44 | 3,487 | 1,753 | -2,297 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income after financial items |
1,535 | 385 | 3,255 | 2,640 | -1,975 | |||||||||||||||
Transfers to (-) / from untaxed reserves |
| | | | -120 | |||||||||||||||
Taxes |
-101 | -40 | -256 | -148 | -53 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) |
1,434 | 345 | 2,999 | 2,492 | -2,148 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
of comprehensive income (loss)
Jul-Sep | Jan-Sep | Jan-Dec | ||||||||||||||||||
SEK million |
2018 | 2017 | 2018 | 2017 | 2017 | |||||||||||||||
Net income (loss) |
1,434 | 345 | 2,999 | 2,492 | -2,148 | |||||||||||||||
Revaluation of borrowings due to change in credit risk |
292 | | 342 | | ||||||||||||||||
Tax on items that will not be reclassified to profit or loss |
-64 | | -75 | | ||||||||||||||||
Available-for-sale financial assets |
||||||||||||||||||||
Gains/losses arising during the period |
| 5 | | 78 | 68 | |||||||||||||||
Reclassification adjustments on gains/losses included in profit or loss |
| | | 5 | 5 | |||||||||||||||
Revaluation of other investments in shares and participations |
||||||||||||||||||||
Fair value remeasurement |
| | | | 102 | |||||||||||||||
Tax on items that may be reclassified to profit or loss |
| -1 | | -18 | -14 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other comprehensive income, net of tax |
228 | 4 | 267 | 65 | 161 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive income (loss) |
1,662 | 349 | 3,266 | 2,557 | -1,987 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
24 Ericsson | Third Quarter Report 2018 |
Financial statements |
SEK million |
Sep 30 2018 |
Dec 31 2017 |
||||||
ASSETS |
||||||||
Fixed assets |
||||||||
Intangible assets |
170 | 329 | ||||||
Tangible assets |
306 | 346 | ||||||
Financial assets1) 2) |
115,254 | 119,896 | ||||||
|
|
|
|
|||||
115,730 | 120,571 | |||||||
Current assets |
||||||||
Inventories |
| 1 | ||||||
Receivables 2) |
44,328 | 41,173 | ||||||
Short-term investments |
6,292 | 6,446 | ||||||
Cash and cash equivalents |
25,896 | 18,715 | ||||||
|
|
|
|
|||||
76,516 | 66,335 | |||||||
|
|
|
|
|||||
Total assets |
192,246 | 186,906 | ||||||
|
|
|
|
|||||
STOCKHOLDERS EQUITY, PROVISIONS AND LIABILITIES |
||||||||
Equity |
||||||||
Restricted equity |
48,164 | 48,164 | ||||||
Non-restricted equity 2) |
39,181 | 39,578 | ||||||
|
|
|
|
|||||
87,345 | 87,742 | |||||||
Provisions |
1,079 | 602 | ||||||
Non-current liabilities 2) |
62,776 | 60,623 | ||||||
Current liabilities |
41,046 | 37,939 | ||||||
|
|
|
|
|||||
Total stockholders equity, provisions and liabilities |
192,246 | 186,906 | ||||||
|
|
|
|
|||||
1) Of which interest-bearing securities, non-current |
23,014 | 25,105 | ||||||
|
|
|
|
2) | The following 2018 opening balances have been adjusted due to IFRS 9: financial assets increased by SEK 8 million, receivables decreased by SEK 4 million, non-restricted equity decreased by SEK 28 million, and non-current liabilities increased by SEK 31 million. |
25 Ericsson | Third Quarter Report 2018 |
Financial statements |
Summary of changes to classification of financial assets and financial liabilities
Type of asset |
IAS 39 classification |
IFRS 9 classification |
Reason for IFRS 9 classification | |||
Cash equivalents, interest-bearing securities, and derivatives (held for trading) | FVTPL | FVTPL | Held for trading portfolios are classified as FVTPL (no change). | |||
Cash equivalents (not held for trading) | Loans and receivables | Amortized cost | These assets are held to collect contractual cash flows. | |||
Interest-bearing securities (not held for trading) | Available-for-sale | FVTPL | These assets are not held for trading but are managed and evaluated on a fair value basis. | |||
Trade receivables | Loans and receivables | FVOCI | Trade receivables are managed in a business model whose objective is achieved through both collection of contractual cash flows and selling of assets. | |||
Customer financing | Loans and receivables | FVTPL | Customer finance assets are managed in a business model with the objective to realize cash flows through the sale of assets. | |||
Investments in shares and participations (equity instruments) | Available-for-sale | FVTPL | This is an accounting policy choice under IFRS 9. | |||
Borrowings by parent company | Amortized cost | Designated FVTPL | These borrowings are managed and evaluated on a fair value basis. |
27 Ericsson | Third Quarter Report 2018 |
Additional information |
Impact of IFRS 9 and IFRS 15 on balance sheet items
Restated | Adjusted | |||||||||||||||||||
As reported at | IFRS 15 | balance at | IFRS 9 | balance at | ||||||||||||||||
31.12 2017 | restatement | 31.12.2017 | adjustment | 1.1.2018 | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Non-current assets |
||||||||||||||||||||
Deferred tax assets |
21,228 | 735 | 21,963 | 288 | 22,251 | |||||||||||||||
Current assets |
||||||||||||||||||||
Inventories |
24,960 | 587 | 25,547 | | 25,547 | |||||||||||||||
Contract assets |
| 13,120 | 13,120 | | 13,120 | |||||||||||||||
Trade receivables |
63,210 | -15,105 | 48,105 | -1,240 | 46,865 | |||||||||||||||
EQUITY AND LIABILITIES |
||||||||||||||||||||
Equity |
||||||||||||||||||||
Stockholders equity |
99,540 | -2,605 | 96,935 | -983 | 95,952 | |||||||||||||||
Non-current liabilities |
||||||||||||||||||||
Borrowings, non-current |
30,500 | | 30,500 | 31 | 30,531 | |||||||||||||||
Current liabilities |
||||||||||||||||||||
Provisions |
6,350 | -67 | 6,283 | | 6,283 | |||||||||||||||
Contract liabilities |
| 29,076 | 29,076 | | 29,076 | |||||||||||||||
Other current liabilities |
62,370 | -27,065 | 35,305 | | 35,305 |
28 Ericsson | Third Quarter Report 2018 |
Additional information |
29 Ericsson | Third Quarter Report 2018 |
Additional information |
30 Ericsson | Third Quarter Report 2018 |
Additional information |
31 Ericsson | Third Quarter Report 2018 |
Additional information |
32 Ericsson | Third Quarter Report 2018 |
Additional information |
Net sales by market area by quarter
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
South East Asia, Oceania and India |
7,985 | 6,981 | 6,379 | 7,844 | 7,858 | 7,234 | 8,410 | |||||||||||||||||||||
North East Asia |
5,773 | 4,764 | 3,385 | 6,465 | 5,653 | 5,901 | 5,564 | |||||||||||||||||||||
North America |
14,933 | 14,337 | 11,317 | 14,685 | 12,319 | 12,970 | 12,027 | |||||||||||||||||||||
Europe and Latin America 1) 2) |
14,816 | 14,174 | 13,061 | 16,939 | 13,430 | 14,231 | 12,201 | |||||||||||||||||||||
Middle East and Africa |
5,722 | 5,626 | 5,765 | 7,581 | 6,297 | 5,731 | 5,356 | |||||||||||||||||||||
Other 1) 2) |
4,581 | 3,926 | 3,504 | 4,367 | 3,856 | 4,214 | 4,245 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1) Of which in Sweden |
429 | 596 | 915 | 872 | 660 | 785 | 1,017 | |||||||||||||||||||||
2) Of which in EU |
8,481 | 8,619 | 8,522 | 10,822 | 8,635 | 8,687 | 8,328 | |||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Sequential change, percent |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
South East Asia, Oceania and India |
14 | % | 9 | % | -19 | % | 0 | % | 9 | % | -14 | % | | |||||||||||||||
North East Asia |
21 | % | 41 | % | -48 | % | 14 | % | -4 | % | 6 | % | | |||||||||||||||
North America |
4 | % | 27 | % | -23 | % | 19 | % | -5 | % | 8 | % | | |||||||||||||||
Europe and Latin America 1) 2) |
5 | % | 9 | % | -23 | % | 26 | % | -6 | % | 17 | % | | |||||||||||||||
Middle East and Africa |
2 | % | -2 | % | -24 | % | 20 | % | 10 | % | 7 | % | | |||||||||||||||
Other 1) 2) |
17 | % | 12 | % | -20 | % | 13 | % | -8 | % | -1 | % | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
8 | % | 15 | % | -25 | % | 17 | % | -2 | % | 5 | % | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1) Of which in Sweden |
-28 | % | -35 | % | 5 | % | 32 | % | -16 | % | -23 | % | | |||||||||||||||
2) Of which in EU |
-2 | % | 1 | % | -21 | % | 25 | % | -1 | % | 4 | % | | |||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year-over-year change, percent |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
South East Asia, Oceania and India |
2 | % | -3 | % | -24 | % | | | | | ||||||||||||||||||
North East Asia |
2 | % | -19 | % | -39 | % | | | | | ||||||||||||||||||
North America |
21 | % | 11 | % | -6 | % | | | | | ||||||||||||||||||
Europe and Latin America 1) 2) |
10 | % | 0 | % | 7 | % | | | | | ||||||||||||||||||
Middle East and Africa |
-9 | % | -2 | % | 8 | % | | | | | ||||||||||||||||||
Other 1) 2) |
19 | % | -7 | % | -17 | % | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
9 | % | -1 | % | -9 | % | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1) Of which in Sweden |
-35 | % | -24 | % | -10 | % | | | | | ||||||||||||||||||
2) Of which in EU |
-2 | % | -1 | % | 2 | % | | | | | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
South East Asia, Oceania and India |
21,345 | 13,360 | 6,379 | 31,346 | 23,502 | 15,644 | 8,410 | |||||||||||||||||||||
North East Asia |
13,922 | 8,149 | 3,385 | 23,583 | 17,118 | 11,465 | 5,564 | |||||||||||||||||||||
North America |
40,587 | 25,654 | 11,317 | 52,001 | 37,316 | 24,997 | 12,027 | |||||||||||||||||||||
Europe and Latin America 1) 2) |
42,051 | 27,235 | 13,061 | 56,801 | 39,862 | 26,432 | 12,201 | |||||||||||||||||||||
Middle East and Africa |
17,113 | 11,391 | 5,765 | 24,965 | 17,384 | 11,087 | 5,356 | |||||||||||||||||||||
Other 1) 2) |
12,011 | 7,430 | 3,504 | 16,682 | 12,315 | 8,459 | 4,245 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1) Of which in Sweden |
1,940 | 1,511 | 915 | 3,334 | 2,462 | 1,802 | 1,017 | |||||||||||||||||||||
2) Of which in EU |
25,622 | 17,141 | 8,522 | 36,472 | 25,650 | 17,015 | 8,328 | |||||||||||||||||||||
Year to date, year-over-year change, | 2018 | 2017 | ||||||||||||||||||||||||||
percent |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
South East Asia, Oceania and India |
-9 | % | -15 | % | -24 | % | 0 | % | | | | |||||||||||||||||
North East Asia |
-19 | % | -29 | % | -39 | % | -13 | % | | | | |||||||||||||||||
North America |
9 | % | 3 | % | -6 | % | 1 | % | | | | |||||||||||||||||
Europe and Latin America 1) 2) |
5 | % | 3 | % | 7 | % | -9 | % | | | | |||||||||||||||||
Middle East and Africa |
-2 | % | 3 | % | 8 | % | -9 | % | | | | |||||||||||||||||
Other 1) 2) |
-2 | % | -12 | % | -17 | % | -18 | % | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
0 | % | -5 | % | -9 | % | -7 | % | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1) Of which in Sweden |
-21 | % | -16 | % | -10 | % | -1 | % | | | | |||||||||||||||||
2) Of which in EU |
0 | % | 1 | % | 2 | % | -6 | % | | | |
33 Ericsson | Third Quarter Report 2018 |
Additional information |
Country | Q3 | Jan-Sep | ||||||||||||||
Percentage of Net sales |
2018 | 2017 | 2018 | 2017 | ||||||||||||
United States |
30 | % | 26 | % | 29 | % | 27 | % | ||||||||
China |
8 | % | 7 | % | 6 | % | 8 | % | ||||||||
India |
5 | % | 6 | % | 5 | % | 5 | % | ||||||||
Australia |
4 | % | 4 | % | 4 | % | 4 | % | ||||||||
Brazil |
4 | % | 3 | % | 3 | % | 3 | % |
Net sales by market area by segment
Q3 2018 | Jan-Sep 2018 | |||||||||||||||||||||||||||||||||||||||
SEK million |
Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | Networks | Digital Services |
Managed Services |
Emerging Business and Other |
Total | ||||||||||||||||||||||||||||||
South East Asia, Oceania and India |
5,834 | 1,270 | 878 | 3 | 7,985 | 15,240 | 3,574 | 2,518 | 13 | 21,345 | ||||||||||||||||||||||||||||||
North East Asia |
4,581 | 834 | 328 | 30 | 5,773 | 10,420 | 2,358 | 1,082 | 62 | 13,922 | ||||||||||||||||||||||||||||||
North America |
11,761 | 2,106 | 1,043 | 23 | 14,933 | 32,467 | 5,588 | 2,460 | 72 | 40,587 | ||||||||||||||||||||||||||||||
Europe and Latin America |
8,724 | 2,852 | 3,167 | 73 | 14,816 | 23,927 | 8,059 | 9,845 | 220 | 42,051 | ||||||||||||||||||||||||||||||
Middle East and Africa |
3,133 | 1,540 | 1,049 | | 5,722 | 9,662 | 4,455 | 2,984 | 12 | 17,113 | ||||||||||||||||||||||||||||||
Other |
1,901 | 385 | | 2,295 | 4,581 | 5,213 | 1,048 | | 5,750 | 12,011 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
35,934 | 8,987 | 6,465 | 2,424 | 53,810 | 96,929 | 25,082 | 18,889 | 6,129 | 147,029 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share of total |
67 | % | 17 | % | 12 | % | 4 | % | 100 | % | 66 | % | 17 | % | 13 | % | 4 | % | 100 | % |
Q3 2018 | ||||||||||||||||||||
Emerging | ||||||||||||||||||||
Sequential change, | Digital | Managed | Business | |||||||||||||||||
percent |
Networks | Services | Services | and Other | Total | |||||||||||||||
South East Asia, Oceania and |
||||||||||||||||||||
India |
17 | % | 18 | % | -4 | % | 50 | % | 14 | % | ||||||||||
North East Asia |
27 | % | 5 | % | -11 | % | 275 | % | 21 | % | ||||||||||
North America |
4 | % | -1 | % | 27 | % | 10 | % | 4 | % | ||||||||||
Europe and Latin America |
13 | % | -2 | % | -8 | % | -8 | % | 5 | % | ||||||||||
Middle East and Africa |
3 | % | -3 | % | 6 | % | -100 | % | 2 | % | ||||||||||
Other |
14 | % | 18 | % | -100 | % | 19 | % | 17 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
11 | % | 2 | % | -1 | % | 18 | % | 8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Q3 2018 | Jan-Sep 2018 | |||||||||||||||||||||||||||||||||||||||
Emerging | Emerging | |||||||||||||||||||||||||||||||||||||||
Year over year change, | Digital | Managed | Business | Digital | Managed | Business | ||||||||||||||||||||||||||||||||||
percent |
Networks | Services | Services | and Other | Total | Networks | Services | Services | and Other | Total | ||||||||||||||||||||||||||||||
South East Asia, Oceania and India |
1 | % | 24 | % | -15 | % | | 2 | % | -13 | % | 3 | % | -2 | % | 333 | % | -9 | % | |||||||||||||||||||||
North East Asia |
19 | % | -39 | % | -27 | % | 275 | % | 2 | % | -13 | % | -39 | % | -17 | % | 464 | % | -19 | % | ||||||||||||||||||||
North America |
24 | % | 4 | % | 32 | % | -12 | % | 21 | % | 13 | % | -6 | % | -3 | % | -6 | % | 9 | % | ||||||||||||||||||||
Europe and Latin America |
20 | % | 7 | % | -6 | % | -40 | % | 10 | % | 12 | % | -1 | % | -3 | % | 16 | % | 5 | % | ||||||||||||||||||||
Middle East and Africa |
-15 | % | -4 | % | 7 | % | -100 | % | -9 | % | -3 | % | 0 | % | 0 | % | -50 | % | -2 | % | ||||||||||||||||||||
Other |
6 | % | 52 | % | | 26 | % | 19 | % | -10 | % | 3 | % | | 5 | % | -2 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
13 | % | 1 | % | -2 | % | 22 | % | 9 | % | 2 | % | -7 | % | -3 | % | 6 | % | 0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34 Ericsson | Third Quarter Report 2018 |
Additional information |
IPR licensing revenues by segment by quarter
Isolated quarters, | 2018 | 2017 | ||||||||||||||||||||||||||
SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks |
1,755 | 1,486 | 1,522 | 1,731 | 1,640 | 1,670 | 1,724 | |||||||||||||||||||||
Digital Services |
385 | 326 | 334 | 380 | 360 | 366 | 379 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
2,140 | 1,812 | 1,856 | 2,111 | 2,000 | 2,036 | 2,103 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks |
4,763 | 3,008 | 1,522 | 6,765 | 5,034 | 3,394 | 1,724 | |||||||||||||||||||||
Digital Services |
1,045 | 660 | 334 | 1,485 | 1,105 | 745 | 379 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
5,808 | 3,668 | 1,856 | 8,250 | 6,139 | 4,139 | 2,103 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Opening balance |
9,534 | 9,030 | 9,879 | 9,514 | 10,357 | 10,514 | 6,320 | |||||||||||||||||||||
Additions |
1,491 | 1,974 | 1,315 | 2,769 | 1,942 | 1,403 | 6,365 | |||||||||||||||||||||
Utilization/Cash out |
-1,774 | -1,486 | -2,216 | -2,186 | -2,626 | -1,324 | -2,085 | |||||||||||||||||||||
Of which restructuring |
-1,236 | -832 | -1,424 | -1,204 | -1,461 | -1,075 | -1,586 | |||||||||||||||||||||
Reversal of excess amounts |
-127 | -191 | -117 | -199 | -32 | -65 | -66 | |||||||||||||||||||||
Reclassification, translation difference and other |
-429 | 207 | 169 | -19 | -127 | -171 | -20 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Closing balance |
8,695 | 9,534 | 9,030 | 9,879 | 9,514 | 10,357 | 10,514 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Of which restructuring |
2,960 | 4,029 | 3,524 | 4,043 | 3,458 | 4,003 | 4,059 | |||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Opening balance |
9,879 | 9,879 | 9,879 | 6,320 | 6,320 | 6,320 | 6,320 | |||||||||||||||||||||
Additions |
4,780 | 3,289 | 1,315 | 12,479 | 9,710 | 7,768 | 6,365 | |||||||||||||||||||||
Utilization/Cash out |
-5,476 | -3,702 | -2,216 | -8,221 | -6,035 | -3,409 | -2,085 | |||||||||||||||||||||
Of which restructuring |
-3,492 | -2,256 | -1,424 | -5,326 | -4,122 | -2,661 | -1,586 | |||||||||||||||||||||
Reversal of excess amounts |
-435 | -308 | -117 | -362 | -163 | -131 | -66 | |||||||||||||||||||||
Reclassification, translation difference and other |
-53 | 376 | 169 | -337 | -318 | -191 | -20 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Closing balance |
8,695 | 9,534 | 9,030 | 9,879 | 9,514 | 10,357 | 10,514 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Of which restructuring |
2,960 | 4,029 | 3,524 | 4,043 | 3,458 | 4,003 | 4,059 |
35 Ericsson | Third Quarter Report 2018 |
Additional information |
Investments in assets subject to depreciation, amortization, impairment and write-downs
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||
Property, plant and equipment |
1,088 | 951 | 856 | 1,105 | 739 | 1,018 | 1,015 | |||||||||||||||||||||
Capitalized development expenses |
151 | 325 | 254 | 138 | 126 | 315 | 865 | |||||||||||||||||||||
IPR, brands and other intangible assets |
| 1 | | 315 | 1 | 19 | 1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
1,239 | 1,277 | 1,100 | 1,558 | 866 | 1,352 | 1,881 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Depreciation, amortization and impairment losses |
||||||||||||||||||||||||||||
Property, plant and equipment |
870 | 1,080 | 928 | 1,284 | 2,894 | 1,061 | 1,075 | |||||||||||||||||||||
Capitalized development expenses |
678 | 635 | 616 | 881 | 874 | 690 | 2,481 | |||||||||||||||||||||
Goodwill, IPR, brands and other intangible assets |
345 | 350 | 347 | 13,953 | 378 | 446 | 1,875 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
1,893 | 2,065 | 1,891 | 16,118 | 4,146 | 2,197 | 5,431 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Additions |
||||||||||||||||||||||||||||
Property, plant and equipment |
2,895 | 1,807 | 856 | 3,877 | 2,772 | 2,033 | 1,015 | |||||||||||||||||||||
Capitalized development expenses |
730 | 579 | 254 | 1,444 | 1,306 | 1,180 | 865 | |||||||||||||||||||||
IPR, brands and other intangible assets |
1 | 1 | | 336 | 21 | 20 | 1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
3,626 | 2,387 | 1,110 | 5,657 | 4,099 | 3,233 | 1,881 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Depreciation, amortization and impairment losses |
||||||||||||||||||||||||||||
Property, plant and equipment |
2,878 | 2,008 | 928 | 6,314 | 5,030 | 2,136 | 1,075 | |||||||||||||||||||||
Capitalized development expenses |
1,929 | 1,251 | 616 | 4,926 | 4,045 | 3,171 | 2,481 | |||||||||||||||||||||
Goodwill, IPR, brands and other intangible assets |
1,042 | 697 | 347 | 16,652 | 2,699 | 2,321 | 1,875 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
5,849 | 3,956 | 1,891 | 27,892 | 11,774 | 7,628 | 5,431 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36 Ericsson | Third Quarter Report 2018 |
Additional information |
1) | Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. |
2) | Excluding amortizations and write-downs of acquired intangibles and restructuring charges. |
37 Ericsson | Third Quarter Report 2018 |
Additional information |
Items excluding restructuring charges
38 Ericsson | Third Quarter Report 2018 |
Items excluding restructuring charges |
Gross income (loss) and gross margin excluding restructuring charges by segment
Isolated quarters, | 2018 | 2017 | ||||||||||||||||||||||||||
SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks |
14,898 | 13,034 | 11,542 | 12,901 | 11,084 | 11,406 | 11,184 | |||||||||||||||||||||
Digital Services |
3,319 | 3,761 | 3,118 | 1,724 | 2,860 | 3,531 | -2,129 | |||||||||||||||||||||
Managed Services |
833 | 912 | 539 | -365 | -266 | 132 | -459 | |||||||||||||||||||||
Emerging Business and Other |
784 | 563 | 402 | 295 | 420 | 488 | 364 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
19,834 | 18,270 | 15,601 | 14,555 | 14,098 | 15,557 | 8,960 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Isolated quarters, | 2018 | 2017 | ||||||||||||||||||||||||||
As percentage of net sales |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks |
41.5 | % | 40.2 | % | 40.4 | % | 34.8 | % | 34.8 | % | 36.0 | % | 35.3 | % | ||||||||||||||
Digital Services |
36.9 | % | 42.6 | % | 42.9 | % | 14.6 | % | 32.0 | % | 35.7 | % | -26.3 | % | ||||||||||||||
Managed Services |
12.9 | % | 14.0 | % | 9.1 | % | -5.3 | % | -4.0 | % | 2.0 | % | -7.3 | % | ||||||||||||||
Emerging Business and Other |
32.3 | % | 27.4 | % | 24.3 | % | 14.1 | % | 21.1 | % | 24.3 | % | 20.4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
36.9 | % | 36.7 | % | 35.9 | % | 25.1 | % | 28.5 | % | 30.9 | % | 18.7 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year to date, | 2018 | 2017 | ||||||||||||||||||||||||||
SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks |
39,474 | 24,576 | 11,542 | 46,575 | 33,674 | 22,590 | 11,184 | |||||||||||||||||||||
Digital Services |
10,198 | 6,879 | 3,118 | 5,986 | 4,262 | 1,402 | -2,129 | |||||||||||||||||||||
Managed Services |
2,284 | 1,451 | 539 | -958 | -593 | -327 | -459 | |||||||||||||||||||||
Emerging Business and Other |
1,749 | 965 | 402 | 1,567 | 1,272 | 852 | 364 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
53,705 | 33,871 | 15,601 | 53,170 | 38,615 | 24,517 | 8,960 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year to date, | 2018 | 2017 | ||||||||||||||||||||||||||
As percentage of net sales |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks |
40.7 | % | 40.3 | % | 40.4 | % | 35.2 | % | 35.4 | % | 35.7 | % | 35.3 | % | ||||||||||||||
Digital Services |
40.7 | % | 42.7 | % | 42.9 | % | 15.4 | % | 15.8 | % | 7.8 | % | -26.3 | % | ||||||||||||||
Managed Services |
12.1 | % | 11.7 | % | 9.1 | % | -3.6 | % | -3.0 | % | -2.5 | % | -7.3 | % | ||||||||||||||
Emerging Business and Other |
28.5 | % | 26.0 | % | 24.3 | % | 19.9 | % | 22.0 | % | 22.5 | % | 20.4 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
36.5 | % | 36.3 | % | 35.9 | % | 25.9 | % | 26.2 | % | 25.0 | % | 18.7 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Ericsson | Third Quarter Report 2018 |
Items excluding restructuring charges |
Operating income (loss) and operating margin excluding restructuring charges by segment
Isolated quarters, | 2018 | 2017 | ||||||||||||||||||||||||||
SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks |
5,784 | 4,293 | 3,850 | 3,205 | 3,784 | 4,240 | 4,054 | |||||||||||||||||||||
Digital Services |
-1,426 | -1,492 | -2,026 | -11,585 | -2,668 | -1,783 | -8,734 | |||||||||||||||||||||
Managed Services |
441 | 422 | 151 | -898 | -628 | -143 | -1,744 | |||||||||||||||||||||
Emerging Business and Other |
-1,006 | -1,178 | -1,115 | -7,575 | -1,321 | -1,337 | -3,109 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
3,793 | 2,045 | 860 | -16,853 | -833 | 977 | -9,533 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Isolated quarters, | 2018 | 2017 | ||||||||||||||||||||||||||
As percentage of net sales |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Networks |
16.1 | % | 13.3 | % | 13.5 | % | 8.6 | % | 11.9 | % | 13.4 | % | 12.8 | % | ||||||||||||||
Digital Services |
-15.9 | % | -16.9 | % | -27.9 | % | -98.0 | % | -29.9 | % | -18.0 | % | -107.8 | % | ||||||||||||||
Managed Services |
6.8 | % | 6.5 | % | 2.6 | % | -13.0 | % | -9.5 | % | -2.1 | % | -27.8 | % | ||||||||||||||
Emerging Business and Other |
-41.5 | % | -57.4 | % | -67.5 | % | -363.1 | % | -66.2 | % | -66.6 | % | -174.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
7.0 | % | 4.1 | % | 2.0 | % | -29.1 | % | -1.7 | % | 1.9 | % | -19.9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year to date, | 2018 | 2017 | ||||||||||||||||||||||||||
SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks |
13,927 | 8,143 | 3,850 | 15,283 | 12,078 | 8,294 | 4,054 | |||||||||||||||||||||
Digital Services |
-4,944 | -3,518 | -2,026 | -24,770 | -13,185 | -10,517 | -8,734 | |||||||||||||||||||||
Managed Services |
1,014 | 573 | 151 | -3,413 | -2,515 | -1,887 | -1,744 | |||||||||||||||||||||
Emerging Business and Other |
-3,299 | -2,293 | -1,115 | -13,342 | -5,767 | -4,446 | -3,109 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
6,698 | 2,905 | 860 | -26,242 | -9,389 | -8,556 | -9,533 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year to date, | 2018 | 2017 | ||||||||||||||||||||||||||
As percentage of net sales |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Networks |
14.4 | % | 13.4 | % | 13.5 | % | 11.6 | % | 12.7 | % | 13.1 | % | 12.8 | % | ||||||||||||||
Digital Services |
-19.7 | % | -21.9 | % | -27.9 | % | -63.9 | % | -49.0 | % | -58.4 | % | -107.8 | % | ||||||||||||||
Managed Services |
5.4 | % | 4.6 | % | 2.6 | % | -12.9 | % | -12.8 | % | -14.6 | % | -27.8 | % | ||||||||||||||
Emerging Business and Other |
-53.8 | % | -61.9 | % | -67.5 | % | -169.6 | % | -99.7 | % | -117.3 | % | -174.6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
4.6 | % | 3.1 | % | 2.0 | % | -12.8 | % | -6.4 | % | -8.7 | % | -19.9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40 Ericsson | Third Quarter Report 2018 |
Items excluding restructuring charges |
Alternative performance measures
comparable units and currency
Sales growth adjusted for the impact of acquisitions and divestments as well as the effects of foreign currency fluctuations.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarter, sequential change |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Reported net sales |
53,810 | 49,808 | 43,411 | | | | | |||||||||||||||||||||
Acquired/divested business |
| | | | | | | |||||||||||||||||||||
Net FX impact |
-752 | -2,460 | 423 | | | | | |||||||||||||||||||||
Comparable net sales, excluding FX impact |
53,058 | 47,348 | 43,834 | | | | | |||||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
7 | % | 9 | % | -24 | % | | | | | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarter, year over year change |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Reported net sales |
53,810 | 49,808 | 43,411 | | | | | |||||||||||||||||||||
Acquired/divested business |
| | | | | | | |||||||||||||||||||||
Net FX impact |
-3,748 | -263 | 3,328 | | | | | |||||||||||||||||||||
Comparable net sales, excluding FX impact |
50,062 | 49,545 | 46,739 | | | | | |||||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
1 | % | -1 | % | -2 | % | | | | | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, year over year change |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Reported net sales |
147,029 | 93,219 | 43,411 | | | | | |||||||||||||||||||||
Acquired/divested business |
| | | | | | | |||||||||||||||||||||
Net FX impact |
-683 | 3,065 | 3,328 | | | | | |||||||||||||||||||||
Comparable net sales, excluding FX impact |
146,346 | 96,284 | 46,739 | | | | | |||||||||||||||||||||
Sales growth adjusted for comparable units and currency (%) |
-1 | % | -2 | % | -2 | % | | | | |
41 Ericsson | Third Quarter Report 2018 |
Alternative performance measures |
Items excluding restructuring charges
Gross income, operating expenses, and operating income (loss) are presented excluding restructuring charges and, for certain measures, as a percentage of net sales.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Gross income |
19,630 | 17,333 | 14,858 | 12,516 | 13,281 | 14,629 | 7,501 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
Gross margin (%) |
36.5 | % | 34.8 | % | 34.2 | % | 21.6 | % | 26.9 | % | 29.1 | % | 15.7 | % | ||||||||||||||
Gross income |
19,630 | 17,333 | 14,858 | 12,516 | 13,281 | 14,629 | 7,501 | |||||||||||||||||||||
Restructuring charges included in cost of sales |
204 | 937 | 743 | 2,038 | 817 | 927 | 1,460 | |||||||||||||||||||||
Gross income, excluding restructuring charges |
19,834 | 18,270 | 15,601 | 14,554 | 14,098 | 15,556 | 8,961 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
Gross margin, excluding restructuring charges (%) |
36.9 | % | 36.7 | % | 35.9 | % | 25.1 | % | 28.5 | % | 30.9 | % | 18.7 | % | ||||||||||||||
Operating expenses |
-16,422 | -17,205 | -15,257 | -18,863 | -17,354 | -15,417 | -18,929 | |||||||||||||||||||||
Restructuring charges included in R&D expenses |
214 | 502 | 326 | -147 | 1,896 | 344 | 214 | |||||||||||||||||||||
Restructuring charges included in selling and administrative expenses |
134 | 441 | 103 | 534 | 106 | 243 | 69 | |||||||||||||||||||||
Operating expenses, excluding restructuring charges |
-16,074 | -16,262 | -14,828 | -18,476 | -15,352 | -14,830 | -18,646 | |||||||||||||||||||||
Operating income (loss) |
3,241 | 165 | -312 | -19,278 | -3,652 | -537 | -11,276 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
Operating margin (%) |
6.0 | % | 0.3 | % | -0.7 | % | -33.3 | % | -7.4 | % | -1.1 | % | -23.6 | % | ||||||||||||||
Operating income (loss) |
3,241 | 165 | -312 | -19,278 | -3,652 | -537 | -11,276 | |||||||||||||||||||||
Total restructuring charges |
552 | 1,880 | 1,172 | 2,425 | 2,819 | 1,514 | 1,743 | |||||||||||||||||||||
Operating income (loss), excluding restructuring charges |
3,793 | 2,045 | 860 | -16,853 | -833 | 977 | -9,533 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
Operating margin, excluding restructuring charges (%) |
7.0 | % | 4.1 | % | 2.0 | % | -29.1 | % | -1.7 | % | 1.9 | % | -19.9 | % | ||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Gross income |
51,821 | 32,191 | 14,858 | 47,927 | 35,411 | 22,130 | 7,501 | |||||||||||||||||||||
Net sales |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
Gross margin (%) |
35.2 | % | 34.5 | % | 34.2 | % | 23.3 | % | 24.0 | % | 22.6 | % | 15.7 | % | ||||||||||||||
Gross income |
51,821 | 32,191 | 14,858 | 47,927 | 35,411 | 22,130 | 7,501 | |||||||||||||||||||||
Restructuring charges included in cost of sales |
1,884 | 1,680 | 743 | 5,242 | 3,204 | 2,387 | 1,460 | |||||||||||||||||||||
Gross income, excluding restructuring charges |
53,705 | 33,871 | 15,601 | 53,169 | 38,615 | 24,517 | 8,961 | |||||||||||||||||||||
Net sales |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
Gross margin, excluding restructuring charges (%) |
36.5 | % | 36.3 | % | 35.9 | % | 25.9 | % | 26.2 | % | 25.0 | % | 18.7 | % | ||||||||||||||
Operating expenses |
-48,884 | -32,462 | -15,257 | -70,563 | -51,700 | -34,346 | -18,929 | |||||||||||||||||||||
Restructuring charges included in R&D expenses |
1,042 | 828 | 326 | 2,307 | 2,454 | 558 | 214 | |||||||||||||||||||||
Restructuring charges included in selling and administrative expenses |
678 | 544 | 103 | 952 | 418 | 312 | 69 | |||||||||||||||||||||
Operating expenses, excluding restructuring charges |
-47,164 | -31,090 | -14,828 | -67,304 | -48,828 | -33,476 | -18,646 | |||||||||||||||||||||
Operating income (loss) |
3,094 | -147 | -312 | -34,743 | -15,465 | -11,813 | -11,276 | |||||||||||||||||||||
Net sales |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
Operating margin (%) |
2.1 | % | -0.2 | % | -0.7 | % | -16.9 | % | -10.5 | % | -12.0 | % | -23.6 | % | ||||||||||||||
Operating income (loss) |
3,094 | -147 | -312 | -34,743 | -15,465 | -11,813 | -11,276 | |||||||||||||||||||||
Total restructuring charges |
3,604 | 3,052 | 1,172 | 8,501 | 6,076 | 3,257 | 1,743 | |||||||||||||||||||||
Operating income (loss), excluding restructuring charges |
6,698 | 2,905 | 860 | -26,242 | -9,389 | -8,556 | -9,533 | |||||||||||||||||||||
Net sales |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
Operating margin, excluding restructuring charges (%) |
4.6 | % | 3.1 | % | 2.0 | % | -12.8 | % | -6.4 | % | -8.7 | % | -19.9 | % |
42 Ericsson | Third Quarter Report 2018 |
Alternative performance measures |
Earnings (loss) before interest, taxes, amortization and write-downs of acquired intangibles, also expressed as a percentage of net sales.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net income (loss) |
2,748 | -1,802 | -725 | -18,493 | -3,457 | -457 | -10,026 | |||||||||||||||||||||
Taxes |
-146 | 1,157 | -128 | -1,303 | -516 | -24 | -1,682 | |||||||||||||||||||||
Financial income and expenses |
639 | 810 | 541 | 518 | 321 | -56 | 432 | |||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
344 | 350 | 347 | 13,953 | 379 | 445 | 1,875 | |||||||||||||||||||||
EBITA |
3,585 | 515 | 35 | -5,325 | -3,273 | -92 | -9,401 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
EBITA margin (%) |
6.7 | % | 1.0 | % | 0.1 | % | -9.2 | % | -6.6 | % | -0.2 | % | -19.7 | % | ||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net income (loss) |
221 | -2,527 | -725 | -32,433 | -13,940 | -10,483 | -10,026 | |||||||||||||||||||||
Taxes |
883 | 1,029 | -128 | -3,525 | -2,222 | -1,706 | -1,682 | |||||||||||||||||||||
Financial income and expenses |
1,990 | 1,351 | 541 | 1,215 | 697 | 376 | 432 | |||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
1,041 | 697 | 347 | 16,652 | 2,699 | 2,320 | 1,875 | |||||||||||||||||||||
EBITA |
4,135 | 550 | 35 | -18,091 | -12,766 | -9,493 | -9,401 | |||||||||||||||||||||
Net sales |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
EBITA margin (%) |
2.8 | % | 0.6 | % | 0.1 | % | -8.8 | % | -8.7 | % | -9.7 | % | -19.7 | % |
Cash flow from operating activities divided by the sum of net income (loss) and adjustments to reconcile net income to cash, expressed as a percentage.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net income (loss) |
2,748 | -1,802 | -725 | -18,493 | -3,457 | -457 | -10,026 | |||||||||||||||||||||
Net income reconciled to cash |
2,916 | -259 | -1,005 | -4,001 | -779 | -142 | -8,187 | |||||||||||||||||||||
Cash flow from operating activities |
2,040 | 1,442 | 1,573 | 11,159 | -18 | 1 | -1,541 | |||||||||||||||||||||
Cash conversion (%) |
70.0 | % | -556.8 | % | -156.5 | % | -278.9 | % | 2.3 | % | -0.7 | % | 18.8 | % | ||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net income (loss) |
221 | -2,527 | -725 | -32,433 | -13,940 | -10,483 | -10,026 | |||||||||||||||||||||
Net income reconciled to cash |
1,652 | -1,264 | -1,005 | -13,109 | -9,108 | -8,329 | -8,187 | |||||||||||||||||||||
Cash flow from operating activities |
5,055 | 3,015 | 1,573 | 9,601 | -1,558 | -1,540 | -1,541 | |||||||||||||||||||||
Cash conversion (%) |
306.0 | % | -238.5 | % | -156.5 | % | -73.2 | % | 17.1 | % | 18.5 | % | 18.8 | % |
Gross cash and net cash, end of period
Gross cash: Cash and cash equivalents plus interest-bearing securities (current and non-current).
Net cash: Cash and cash equivalents plus interest-bearing securities (current and non-current) less interest-bearing liabilities (which include: non-current borrowings and current borrowings).
2018 | 2017 | |||||||||||||||||||||||||||
SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Cash and cash equivalents |
36,058 | 37,049 | 36,697 | 35,884 | 26,210 | 21,446 | 32,954 | |||||||||||||||||||||
+ Interest-bearing securities, current |
6,591 | 8,304 | 5,453 | 6,713 | 6,526 | 10,754 | 13,548 | |||||||||||||||||||||
+ Interest-bearing securities, non-current |
23,014 | 21,501 | 27,104 | 25,105 | 22,405 | 22,122 | 19,124 | |||||||||||||||||||||
Gross cash, end of period |
65,663 | 66,854 | 69,254 | 67,702 | 55,141 | 54,322 | 65,626 | |||||||||||||||||||||
- Borrowings, current |
2,463 | 2,642 | 2,554 | 2,545 | 3,004 | 3,230 | 9,514 | |||||||||||||||||||||
- Borrowings, non-current |
31,187 | 31,131 | 31,134 | 30,500 | 28,039 | 27,100 | 27,823 | |||||||||||||||||||||
Net cash, end of period |
32,013 | 33,081 | 35,566 | 34,657 | 24,098 | 23,992 | 28,289 |
43 Ericsson | Third Quarter Report 2018 |
Alternative performance measures |
Total assets less non-interest-bearing provisions and liabilities.
2018 | 2017 | |||||||||||||||||||||||||||
SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Total assets |
264,848 | 265,322 | 260,681 | 259,882 | 267,239 | 275,160 | 291,976 | |||||||||||||||||||||
Non-interest-bearing provisions and liabilities |
||||||||||||||||||||||||||||
Provisions, non-current |
3,420 | 2,819 | 2,597 | 3,596 | 3,930 | 4,794 | 4,867 | |||||||||||||||||||||
Deferred tax liabilities |
1,274 | 1,332 | 1,325 | 901 | 1,736 | 1,838 | 1,888 | |||||||||||||||||||||
Other non-current liabilities |
4,456 | 4,549 | 2,792 | 2,776 | 2,563 | 2,602 | 2,699 | |||||||||||||||||||||
Provisions, current |
5,275 | 6,715 | 6,435 | 6,283 | 5,584 | 5,563 | 5,647 | |||||||||||||||||||||
Contract liabilities |
30,108 | 30,959 | 30,391 | 29,076 | 26,185 | 28,657 | 29,930 | |||||||||||||||||||||
Trade payables |
28,914 | 28,563 | 26,453 | 26,320 | 23,559 | 25,266 | 26,077 | |||||||||||||||||||||
Other current liabilities |
36,323 | 35,746 | 37,888 | 35,305 | 33,395 | 32,599 | 37,323 | |||||||||||||||||||||
Capital employed |
155,078 | 154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 |
Annualized net sales divided by average capital employed.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net sales |
53,810 | 49,808 | 43,411 | 57,881 | 49,413 | 50,281 | 47,803 | |||||||||||||||||||||
Annualized net sales |
215,240 | 199,232 | 173,644 | 231,524 | 197,652 | 201,124 | 191,212 | |||||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||||||
Capital employed at beginning of period |
154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 | 185,667 | |||||||||||||||||||||
Capital employed at end of period |
155,078 | 154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 | |||||||||||||||||||||
Average capital employed |
154,859 | 153,720 | 154,213 | 162,956 | 172,064 | 178,693 | 184,606 | |||||||||||||||||||||
Capital turnover (times) |
1.4 | 1.3 | 1.1 | 1.4 | 1.1 | 1.1 | 1.0 | |||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net sales |
147,029 | 93,219 | 43,411 | 205,378 | 147,497 | 98,084 | 47,803 | |||||||||||||||||||||
Annualized net sales |
196,039 | 186,438 | 173,644 | 205,378 | 196,663 | 196,168 | 191,212 | |||||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||||||
Capital employed at beginning of period |
155,625 | 155,625 | 155,625 | 185,667 | 185,667 | 185,667 | 185,667 | |||||||||||||||||||||
Capital employed at end of period |
155,078 | 154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 | |||||||||||||||||||||
Average capital employed |
155,352 | 155,132 | 154,213 | 170,646 | 177,977 | 179,754 | 184,606 | |||||||||||||||||||||
Capital turnover (times) |
1.3 | 1.2 | 1.1 | 1.2 | 1.1 | 1.1 | 1.0 |
44 Ericsson | Third Quarter Report 2018 |
Alternative performance measures |
The annualized total of operating income (loss) plus financial income as a percentage of average capital employed.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Operating income (loss) |
3,241 | 165 | -312 | -19,278 | -3,652 | -537 | -11,276 | |||||||||||||||||||||
Financial income |
-225 | 275 | -72 | -124 | -139 | -27 | -82 | |||||||||||||||||||||
Annualized operating income (loss) + financial income |
12,064 | 1,760 | -1,536 | -77,608 | -15,164 | -2,256 | -45,432 | |||||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||||||
Capital employed at beginning of period |
154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 | 185,667 | |||||||||||||||||||||
Capital employed at end of period |
155,078 | 154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 | |||||||||||||||||||||
Average capital employed |
154,859 | 153,720 | 154,213 | 162,956 | 172,064 | 178,693 | 184,606 | |||||||||||||||||||||
Return on capital employed (%) |
7.8 | % | 1.1 | % | -1.0 | % | -47.6 | % | -8.8 | % | -1.3 | % | -24.6 | % | ||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Operating income (loss) |
3,094 | -147 | -312 | -34,743 | -15,465 | -11,813 | -11,276 | |||||||||||||||||||||
Financial income |
-22 | 203 | -72 | -372 | -248 | -109 | -82 | |||||||||||||||||||||
Annualized operating income (loss) + financial income |
4,096 | 112 | -1,536 | -35,115 | -20,951 | -23,844 | -45,432 | |||||||||||||||||||||
Average capital employed |
||||||||||||||||||||||||||||
Capital employed at beginning of period |
155,625 | 155,625 | 155,625 | 185,667 | 185,667 | 185,667 | 185,667 | |||||||||||||||||||||
Capital employed at end of period |
155,078 | 154,639 | 152,800 | 155,625 | 170,287 | 173,841 | 183,545 | |||||||||||||||||||||
Average capital employed |
155,352 | 155,132 | 154,213 | 170,646 | 177,977 | 179,754 | 184,606 | |||||||||||||||||||||
Return on capital employed (%) |
2.6 | % | 0.1 | % | -1.0 | % | -20.6 | % | -11.8 | % | -13.3 | % | -24.6 | % |
Equity, expressed as a percentage of total assets.
2018 | 2017 | |||||||||||||||||||||||||||
SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Total equity |
95,953 | 93,560 | 93,466 | 97,571 | 112,710 | 119,887 | 122,434 | |||||||||||||||||||||
Total assets |
264,848 | 265,322 | 260,681 | 259,882 | 267,239 | 275,160 | 291,976 | |||||||||||||||||||||
Equity ratio (%) |
36.2 | % | 35.3 | % | 35.9 | % | 37.5 | % | 42.2 | % | 43.6 | % | 41.9 | % |
Annualized net income (loss) attributable to stockholders of the Parent Company as a percentage of average Stockholders equity.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Net income (loss) attributable to stockholders of the parent company |
2,745 | -1,885 | -837 | -18,476 | -3,561 | -471 | -10,068 | |||||||||||||||||||||
Annualized |
10,980 | -7,540 | -3,348 | -73,904 | -14,244 | -1,884 | -40,272 | |||||||||||||||||||||
Average stockholders equity |
||||||||||||||||||||||||||||
Stockholders equity, beginning of period |
92,689 | 92,703 | 96,935 | 112,095 | 119,177 | 121,698 | 134,582 | |||||||||||||||||||||
Stockholders equity, end of period |
95,087 | 92,689 | 92,703 | 96,935 | 112,095 | 119,177 | 121,698 | |||||||||||||||||||||
Average stockholders equity |
93,888 | 92,696 | 94,819 | 104,515 | 115,636 | 120,438 | 128,140 | |||||||||||||||||||||
Return on equity (%) |
11.7 | % | -8.1 | % | -3.5 | % | -70.7 | % | -12.3 | % | -1.6 | % | -31.4 | % | ||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Net income (loss) attributable to stockholders of the parent company |
23 | -2,722 | -837 | -32,576 | -14,100 | -10,539 | -10,068 | |||||||||||||||||||||
Annualized |
31 | -5,444 | -3,348 | -32,576 | -18,800 | -21,078 | -40,272 | |||||||||||||||||||||
Average stockholders equity |
||||||||||||||||||||||||||||
Stockholders equity, beginning of period |
96,935 | 96,935 | 96,935 | 134,582 | 134,582 | 134,582 | 134,582 | |||||||||||||||||||||
Stockholders equity, end of period |
95,087 | 92,689 | 92,703 | 96,935 | 112,095 | 119,177 | 121,698 | |||||||||||||||||||||
Average stockholders equity |
96,011 | 94,812 | 94,819 | 115,759 | 123,339 | 126,880 | 128,140 | |||||||||||||||||||||
Return on equity (%) |
0.0 | % | -5.7 | % | -3.5 | % | -28.1 | % | -15.2 | % | -16.6 | % | -31.4 | % |
45 Ericsson | Third Quarter Report 2018 |
Alternative performance measures |
Earnings (loss) per share (non-IFRS)
Earnings (loss) per share, diluted, excluding amortizations and write-down of acquired intangible assets and excluding restructuring charges.
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Earnings (loss) per share, diluted |
0.83 | -0.58 | -0.25 | -5.63 | -1.09 | -0.14 | -3.08 | |||||||||||||||||||||
Restructuring charges |
0.12 | 0.41 | 0.30 | 0.37 | 0.73 | 0.38 | 0.46 | |||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
0.08 | 0.08 | 0.06 | 4.17 | 0.07 | 0.09 | 0.43 | |||||||||||||||||||||
Earnings (loss) per share (non-IFRS) |
1.03 | -0.09 | 0.11 | -1.09 | -0.29 | 0.33 | -2.19 | |||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Earnings (loss) per share, diluted |
0.01 | -0.83 | -0.25 | -9.94 | -4.31 | -3.22 | -3.08 | |||||||||||||||||||||
Restructuring charges |
0.82 | 0.71 | 0.30 | 1.93 | 1.57 | 0.84 | 0.46 | |||||||||||||||||||||
Amortization and write-downs of acquired intangibles |
0.21 | 0.14 | 0.06 | 4.77 | 0.59 | 0.52 | 0.43 | |||||||||||||||||||||
Earnings (loss) per share (non-IFRS) |
1.04 | 0.02 | 0.11 | -3.24 | -2.15 | -1.86 | -2.19 |
Free cash flow and free cash flow excluding M&A
Free cash flow: Cash flow from operating activities less net capital expenditures and other investments.
Free cash flow excluding M&A: Cash flow from operating activities less net capital expenditures and other investments (excluding M&A).
2018 | 2017 | |||||||||||||||||||||||||||
Isolated quarters, SEK million |
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||||||
Cash flow from operating activities |
2,040 | 1,442 | 1,573 | 11,159 | -18 | 1 | -1,541 | |||||||||||||||||||||
Net capital expenditures and other investments (excluding M&A) |
||||||||||||||||||||||||||||
Investments in property, plant and equipment |
-1,088 | -951 | -856 | -1,105 | -739 | -1,018 | -1,015 | |||||||||||||||||||||
Sales of property, plant and equipment |
102 | 52 | 123 | 898 | 12 | 37 | 69 | |||||||||||||||||||||
Product development |
-151 | -325 | -254 | -138 | -126 | -315 | -865 | |||||||||||||||||||||
Other investing activities |
-190 | -398 | 161 | -573 | 42 | -42 | 110 | |||||||||||||||||||||
Free cash flow excluding M&A |
713 | -180 | 747 | 10,241 | -829 | -1,337 | -3,242 | |||||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-425 | -431 | -449 | -107 | 371 | 9 | 3 | |||||||||||||||||||||
Free cash flow |
288 | -611 | 298 | 10,134 | -458 | -1,328 | -3,239 | |||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||||
Year to date, SEK million |
Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | |||||||||||||||||||||
Cash flow from operating activities |
5,055 | 3,015 | 1,573 | 9,601 | -1,558 | -1,540 | -1,541 | |||||||||||||||||||||
Net capital expenditures and other investments (excluding M&A) |
||||||||||||||||||||||||||||
Investments in property, plant and equipment |
-2,895 | -1,807 | -856 | -3,877 | -2,772 | -2,033 | -1,015 | |||||||||||||||||||||
Sales of property, plant and equipment |
277 | 175 | 123 | 1,016 | 118 | 106 | 69 | |||||||||||||||||||||
Product development |
-730 | -579 | -254 | -1,444 | -1,306 | -1,180 | -865 | |||||||||||||||||||||
Other investing activities |
-427 | -237 | 161 | -463 | 110 | 68 | 110 | |||||||||||||||||||||
Free cash flow excluding M&A |
1,280 | 567 | 747 | 4,833 | -5,408 | -4,579 | -3,242 | |||||||||||||||||||||
Acquisitions/divestments of subsidiaries and other operations, net |
-1,305 | -880 | -449 | 276 | 383 | 12 | 3 | |||||||||||||||||||||
Free cash flow |
-25 | -313 | 298 | 5,109 | -5,025 | -4,567 | -3,239 |
46 Ericsson | Third Quarter Report 2018 |
Alternative performance measures |