FIRST QUARTER REPORT

Transcription

1 FIRST QUARTER REPORT 2007

2 FIRST QUARTER REPORT HENRY STÉNSON Senior Vice President Communications 2007

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 FIRST QUARTER REPORT 2007 CARL-HENRIC SVANBERG President and CEO

5 Good start of the year Stable market growth Mobile subs 2.9 b. - mobile data traffic tripled - fixed BB 280 m Solid performance 8% growth stable margins Extended leadership Market share gains strategic acquisitions Technology leadership global presence operational excellence

6 New organization in place Networks Copyright Telefon AB LM Ericsson All rights reserved Professional Services FIRST QUARTER REPORT 2007 Multimedia

7 New reporting information Networks Professional Services Multimedia Sales 29.3 b Oper margin 17% Growth, YoY 5% Sales 9.5 b Oper margin 15% Growth, YoY 15% Sales 3.4 b Oper Margin 8% Growth, YoY 19%

8 Mobile systems Will be reported at least through 2007 Networks Professional Services Multimedia Mobile networks and rollout Parts of system integration Mobile multimedia systems Mobile systems Q1 sales growth of 6%

9 Q1 financial highlights Group sales SEK 42.2 (39.1) b.* Growth of 8% - USD down 11% - tough US comparison Gross margin 43.0% (43.5%) - up sequentially 0.8% Operating margin 19.3% (16.7%) Operational excellence work and Sony Ericsson *excl. divested operation

10 Q1 financial highlights (cont d) Operating income SEK 8.2 (6.6) b., up 23% year-over-year EPS SEK 0.37 (0.29), up 28% year-over-year Operating cash flow SEK 4.6 (2.4) b. Sony Ericsson prepaid dividend 3.5 (1.2) b. Increased working capital 4.7 b. due to large projects Net cash SEK 29.1 (33.7) b. Redback/Entrisphere paid as well as shares in Tandberg

11 Comments to cash flow development Two typical types of contracts Separate contracts for shipment and installation Prevailing in Western Europe and Americas HW / SW NRO Services 60 + due days 40 + due days Turnkey project Prevailing in CEMA and APAC Progress payments due days

12 Comments to cash flow development Turnkey projects growing in importance ~ 60% of total growth ~ 70% of total growth in 2006 CEMA and APAC, majority turnkey, longer payment terms ~ 65% of total growth ~ 75% of total growth in 2006

13 Turnkey capabilities a competitive tool As key as technology leadership in driving market share Builds working capital - but with healthy margins Collections has never been an issue Cash generation of 70 b versus 3.7 b

14 Networks Networks Net sales Operating margin First quarter First quarter Change % 17% 17% - Stable growth and margins Continued GSM and mobile broadband momentum Data doubled last 6 months in HSPA networks Integration of acquired companies well on track Growth outside US amounted to 14%

15 Professional Services Professional Services Net sales Operating margin First quarter First quarter Change % Of which Managed services 11% 15% 15% - Growth of 15% in local currencies 20% Managed services up 11%, in local currencies up 15% Stable margins Innovative spare parts management contract with Vodafone First European-wide deal setting new trend 1 billion subs supported 120 million under management

16 Multimedia Multimedia First quarter First quarter Change Net sales % Operating margin 8% 3% - Strong growth driven by EMP and revenue management Significant margin improvements - could vary near term Tandberg a great addition in fast growing segment Adds products, competence, customers

17 Multimedia Multimedia First quarter First quarter Change Net sales % Operating margin 8% 3% - Strong growth driven by EMP and revenue management Significant margin improvements - could vary near term Tandberg a great addition in fast growing segment Adds products, competence, customers Video Head-End Middle-ware Systems VOD Platform Content Management System Integration Telecom Infrastructure

18 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Mobile networks sales up primarily southern Europe Accelerating traffic creating transmission bottlenecks Continued strong focus on managed services Western Europe Q: 12.5 b. +9%

19 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year High activity level particularly in Sub-Sahara Middle East slower in Q1 but good business momentum New licenses e.g. Saudi, Egypt Russia preparing for 3G Central & Eastern Europe, Middle East & Africa Q: 11.4 b. +9%

20 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Continued high activity, eg. Japan, Bangladesh, Indonesia India strong momentum 2G and 3G - BSNL court case ended Growing 2G in China while waiting for 3G Asia Pacific Q: 11.9 b. +36%

21 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Increasing subscribers and traffic recovery on its way Telefónica and América Móvil preparing for 3G Managed services in increased focus Latin America Q: 3.3 b. -9%

22 Regional update, Q Ericsson sales (BSEK) and growth (%) year-over-year Tough comparison with Q Focus on triple play and fixed and mobile broadband Considerably strengthened position through acquisitions North America Q: 3.1 b. - 41%

23 Sony Ericsson Q1 highlights Units shipped up 63% to 21.8 million Wow products drive success also in entry segments ASP down from expanded portfolio stable margins More than 110 m. music enabled phones to date

24 Sony Ericsson highlights Q1 sales up 47% to EUR 2.9 b. Q1 NIBT up 139% to EUR 362 m. Strong growth in Europe, Latin America and Asia Pacific More than 110 m. music enabled phones to date

25 Market outlook For 2007 we believe that the GSM/WCDMA track within the global mobile systems market, will continue to show mid-single digit growth* Addressable market for professional services to show good growth* Well positioned to capture market opportunities *Measured in USD, this slide contains forward-looking statements.

26 FIRST QUARTER REPORT Q & A 2007

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