Fourth quarter highlights - Solid EBITA and cash flow in a challenged market
Sales declined organically[1] by -17% YoY, driven by a -23% decline in Networks. Reported sales were down by -16% to
SEK 71.9 b.Gross income excluding restructuring charges decreased to
SEK 29.6 (35.7) b. Gross margin excluding restructuring charges was 41.1% (41.5%). Adjusted for the retroactive element in IPR revenues in Q4 2022 the gross margin increased YoY.Reported gross income was
SEK 28.6 (35.6) b. with a gross margin of 39.8% (41.4%).EBITA excluding restructuring charges amounted to
SEK 8.2 (9.3) b. with an EBITA margin of 11.4% (10.8%).EBIT excluding restructuring charges amounted to
SEK 7.4 (8.1) b. with an EBIT margin of 10.3% (9.4%).Free cash flow before M&A was
SEK 12.5 (16.9) b. Q4 2022 was positively impacted by retroactive IPR payments.
Full-year highlights
Sales declined organically[1] by -10%, impacted by a -15% decrease in Networks, partly offset by an 11% growth in Enterprise. Reported sales were
SEK 263.4 (271.5) b.Gross income excluding restructuring charges was
SEK 104.4 (113.5) b., mainly related to Networks. Gross margin excluding restructuring charges was 39.6% (41.8%). Reported gross income wasSEK 101.6 (113.3) b. with a gross margin of 38.6% (41.7%).EBITA excluding restructuring charges was
SEK 21.4 (29.5) b. with a margin of 8.1% (10.9%). EBITA wasSEK 14.9 (29.1) b. with a margin of 5.7% (10.7%).Reported EBIT was
SEK -20.3 (27.0) b. impacted bySEK -31.9 b. of goodwill impairment recorded in Q3 related to Vonage.Net income (loss) was
SEK -26.1 (19.1) b. EPS diluted wasSEK -7.94 (5.62). Net income (loss) was impacted bySEK -31.9 b. of goodwill impairment andSEK -6.5 (-0.4) b. of restructuring charges.Free cash flow before M&A amounted to
SEK -1.1 (22.2) b. Net cash wasSEK 7.8 (23.3) b. at year-end 2023.A dividend for 2023 of
SEK 2.70 (2.70) per share will be proposed to the AGM by the Board of Directors.
SEK b. |
Q4 2023 |
Q4 2022 |
YoY change |
Q3 2023 |
QoQ change |
Jan-Dec 2023 |
Jan-Dec 2022 |
YoY change |
Net sales | 71.881 | 85.980 | -16% | 64.473 | 11% | 263.351 | 271.546 | -3% |
Sales growth adj. for comparable units and currency[2] | - | - | -17% | - | - | - | - | -10% |
Gross margin[2] | 39.8% | 41.4% | - | 38.4% | - | 38.6% | 41.7% | - |
EBIT (loss) | 5.848 | 7.853 | -26% | -28.908 | - | -20.326 | 27.020 | - |
EBIT margin[2] | 8.1% | 9.1% | - | -44.8% | - | -7.7% | 10.0% | - |
EBITA[2] | 6.694 | 9.049 | -26% | 3.828 | 75% | 14.912 | 29.071 | -49% |
EBITA margin[2] | 9.3% | 10.5% | - | 5.9% | - | 5.7% | 10.7% | - |
Net income (loss) | 3.409 | 6.190 | -45% | -30.491 | - | -26.104 | 19.112 | - |
EPS diluted, SEK | 1.02 | 1.82 | -44% | -9.21 | - | -7.94 | 5.62 | - |
Measures excl. restructuring charges[2] | ||||||||
Gross margin excluding restructuring charges | 41.1% | 41.5% | - | 39.2% | - | 39.6% | 41.8% | - |
EBIT (loss) excluding restructuring charges | 7.368 | 8.081 | -9% | -28.020 | - | -13.805 | 27.419 | - |
EBIT margin excluding restructuring charges | 10.3% | 9.4% | - | -43.5% | - | -5.2% | 10.1% | - |
EBIT excluding restructuring and goodwill impairments | 7.369 | 8.081 | -9% | 3.877 | 90% | 18.093 | 27.418 | -34% |
EBIT margin excluding restructuring and goodwill impairments | 10.3% | 9.4% | - | 6.0% | - | 6.9% | 10.1% | - |
EBITA excluding restructuring charges | 8.214 | 9.277 | -11% | 4.716 | 74% | 21.433 | 29.470 | -27% |
EBITA margin excluding restructuring charges | 11.4% | 10.8% | - | 7.3% | - | 8.1% | 10.9% | - |
Free cash flow before M&A | 12.464 | 16.866 | -26% | -0.540 | - | -1.084 | 22.196 | - |
Net cash, end of period | 7.832 | 23.319 | -66% | 1.610 | 386% | 7.832 | 23.319 | -66% |
[1] Sales adjusted for comparable units and currency
[2] Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements
Comments from
In 2023, we continued to execute on our strategy to strengthen our leadership in mobile networks, grow our enterprise business and drive cultural transformation. We concluded 2023 with a Q4 EBITA margin[2] of 11.4% and a historic 5-year
Q4 - solid results in challenging environment
As a result of focused execution and increased resiliency, we were able to adapt in a challenging environment and delivered solid Q4 results. While Group sales[1] declined organically by -17% YoY, EBITA[2] reached
Networks sales[1] decreased organically by -23% YoY as customers continued to focus on cash flow. Sales in
In
Enterprise sales[1] grew by 7% organically YoY mainly driven by Enterprise Wireless Solutions. EBITA[2] (loss) was stable YoY, negatively impacted by an inventory write-off in Enterprise Wireless Solutions.
Strong cash collection and released working capital from conclusion of large roll-out projects allowed a healthy free cash flow before M&A of
We delivered on the
Driving execution of our strategy
Our first strategic pillar is to further enhance our leadership in mobile networks. Technology leadership is core to our strategy, enabling customers to build high-performance, programmable and open networks to deliver superior customer experience, maximize return on investment (ROI) and accelerate business innovation. With our leading technology, customers can reduce their total cost of ownership, reduce non-strategic spend and instead redirect a larger portion of capex to revenue-generating network infrastructure, enabling an accelerated network modernization - as proven by our record win in Q4.
With our second strategic pillar, expansion into Enterprise, we aim at creating new monetization opportunities for our customers. Many operators fight to earn a healthy ROI with current monetization models. By offering network APIs to developers and enterprises, we enable new revenue streams for operators, and new applications that leverage network capabilities. We see good traction with frontrunner customers who share our excitement. In addition, offerings in Enterprise Wireless Solutions expand the market for high-performance mobile technology into enterprise.
2023 has been a year in which we have continued to build and transform our culture focusing on strong decision making and risk management, effective oversight and accountability. Ethical standards shall stand in the center of everything we do and become our competitive strength.
Looking ahead
The mobile network industry remains challenging. We expect the current market uncertainties to prevail into 2024 with a further decline of the RAN market outside
Underlying demand from growing data traffic and 5G only being in the early stages of build-out will require additional network investments. In our view, the current investment levels are unsustainably low for many operators. We are therefore confident that a market recovery should materialize. However, the timing of market recovery is ultimately in the hands of our customers. It is critical for us to lead in technology while focusing on operational efficiency, to ensure we are well positioned when the market recovers. Our strong IPR portfolio with over 60,000 patents gives us great opportunities to grow our licensing revenue, with a continued emphasis on ensuring that the full value is recognized in all contracts.
Our goal is to make
I would like to thank all my colleagues for their dedication to execute on our strategy. Together with our customers, we are well positioned to shape the future industry.
President and CEO
[1] Sales adjusted for comparable units and currency
[2] Excluding restructuring charges
NOTES TO EDITORS
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