econd Quarter Report

Transcription

1 econd Quarter Report

2 econd Quarter Report HENRY STÉNSON Senior Vice President Communications

3 Safe Harbor Statement This presentation contains forward looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our earnings reports and our most recent annual report for a better understanding of these risks and uncertainties.

4 econd Quarter Report CARL-HENRIC SVANBERG President and CEO

5 A milestone quarter for GSM 15 years and 2 billion users GSM a major success with Ericsson leadership 2 billion GSM subscriptions - 1,000 new users per minute* 12 years to reach first billion 30 months for second billion 80% of second billion in high-growth markets GSM paving the way for 3G and future technologies 690 networks across more than 200 countries* Source: GSM Association GSM/ WCDMA the winning track now 100 WCDMA networks

6 Mobility changes the world Traffic accelerates with new services Global cellular reported subscriptions Traffic in mobile networks Mobile data traffic Mobile Internet Mobile Office TV streaming/ video telephony Music and other downloads Subscriptions (million) High growth markets Mature markets Terabyte 0 Voice traffic

7 Mobility changes the world Traffic accelerates with new services Global cellular reported subscriptions Traffic in mobile networks Subscriptions (million) High growth markets Mature markets Mobile data Mobile Voice Mobile data to pass voice fixed data passed voice 2000 Terabyte

8 Wireline network traffic IPTV/Internet the main traffic drivers Subscriber traffic in fixed access networks IPTV Assumption: 50 Mn IPTV subscribers in hours/day 5 Mbps (from 2007) IPTV Terabyte 0 Internet Voice

9 Vendor consolidation Ongoing natural process to reach critical mass Complete offering vs. niche products Global presence, technology leadership and operational excellence remain key Our strategy remains Organic growth with bolt-on acquisitions the primary focus Opportunities while large mergers are in progress Balance long-term growth and short-term profitability

10 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Tariff competition and falling roaming charges Operator focus on cost and new services Growth driven by services and added Marconi sales Western Europe 12.5 b. +26% Central & Eastern Europe, Middle East & Africa North America Latin America Asia Pacific The need for more capacity is growing

11 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year High activity throughout the region Network rollouts continues Ericsson s largest region Several 3G contracts HSPA contracts in 12 countries Western Europe 12.5 b. +26% Central & Eastern Europe, Middle East & Africa 12.9 b. +24% North America Latin America Asia Pacific Continued positive development

12 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Strong growth throughout region subscribers and networks HSPA rollouts in Australia and Japan at full speed Strong China sales steady rollout but invoicing fluctuates Western Europe 12.5 b. +26% Central & Eastern Europe, Middle East & Africa 12.9 b. +24% North America Latin America Asia Pacific 11.2 b. +55% Dynamic region with continued opportunities

13 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Operators consolidate positions after recent build outs Need for capacity and coverage enhancements remain CDMA migration to GSM/WCDMA in continued focus Western Europe 12.5 b. +26% Central & Eastern Europe, Middle East & Africa 12.9 b. +24% North America Latin America 3.8 b. -14% Asia Pacific 11.2 b. +55% Market slower after two exceptional years

14 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Cingular s HSPA rollout on plan Steady 2G expansions but operators trimming inventories Extra invoicing in Q2, 2005, also affects YoY comparison Western Europe 12.5 b. +26% Central & Eastern Europe, Middle East & Africa 12.9 b. +24% North America 3.7 b. - 42% Asia Pacific Latin America 11.2 b. +55% 3.8 b. -14% Spectrum auctions affects market but opens opportunities

15 Continued strong growth in Services Professional services sales SEK 8.1 b. Up 31% year-over-year Continued growth in managed services 35 contracts with 65 m. subscribers - 60 hosting contracts Biggest telecom support organization Supporting 725 m. subscribers 24/7 Platform established for continued leadership

16 Marconi integration on plan Product portfolio being integrated Services, softswitch, broadband and transmission Increasingly difficult to track Marconi specific numbers Workforce reductions on plan 1,000 to be notified Q3, additional 600 by year-end Restructuring of supply chain continues Moving supply chain to low-cost countries Main effects in 2007 Continued good business momentum Building leading position in next generation converged networks

17 Q2 financial highlights Sales SEK 44.2 (38.4) b. Up 15% year-over-year Gross margin 42.0% (45.9%) Quickly growing services and added Marconi sales Slight sequential decline due to product mix Operating margin 18.7% (21.6%) Excluding amortization of intangibles 19.6%

18 Q2 financial highlights (cont.) Operating income SEK 8.3 (8.3) b. Earnings per share SEK 0.36 (0.37) SEK 0.38 before amortization of Marconi intangibles Cash flow from operations SEK -2.0 (5.4) b. Receivables increased following completion of large contracts Sequential increase of customer financing of SEK 1.5 b. Net cash of SEK 27.9 b.

19 Sony Ericsson Q2 highlights Sales EUR 2,272 million Sales up 41%, units up 33% year-over-year Income before tax EUR 211 (87) million Successful introduction of new products Increasing market share Sony Ericsson Walkman, Cybershot and smart phones in focus

20 Market outlook 2006 The GSM/WCDMA track within the global mobile systems market to show moderate growth compared to 2005, measured in USD* Addressable market for professional services to show good growth* Well positioned to capture market opportunities *All estimates refer to market growth compared to previous year. This slide contains forward looking statements.

21 econd Quarter Report Question & Answer

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