Ericsson reports 2022 earnings, organic sales up 3%

IT - IT's home 2023-01-25 20:52:32 阅读数:342

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IT Home News on January 25, Ericsson recently announced the fourth quarter of 2022 and the full year of 2022financial report.Ericsson achieved net sales of SEK 86 billion (currently about RMB 56.9 billion) in the quarter, organic sales (sales adjusted for comparable units and currencies) increased by 1% year-on-year; In 2022, net sales of 271.5 billion Swedish kronor (currently about 179.7 billion yuan) will be achieved, and organic sales will increase by 3% year-on-year.

Key points of the fourth quarter financial report:

  • An IP agreement resulting in total Intellectual Property (IPR) revenue of SEK 6 billion (SEK 2.4 billion inKrona charges, which included DOJ provisions, IoT business transfers, and cloud software and services contracts and portfolio exits, impacted the quarter.

  • Group organic sales rose 1% year-on-year, with intellectual property (IPR) revenue contributing 5%.Reported sales were SEK 86.0 billion (Q2 2021: SEK 73.1 billion), of which Vonage contributed SEK 4.1 billion.

  • Total revenue increased to SEK 35.6 billion (Q1 2021: SEK 30.8 billion), while gross margin decreased to 41.4% (Q1 2021: 43.2%), mainly due toNetworking business mix changes, previously announced contract exit charges, and cloud software and services portfolio realignment impact.

  • Ebit before interest, tax, depreciation and amortization (EBITA) excluding restructuring charges was SEK 9.3 billion (Q1 2021: SEK 12.8 billion), EBITDAProfit margin was 10.8% (17.9% in the same period in 2021).Earnings before interest, taxes, depreciation, and amortization (EBITA) were impacted by previously announced charges.

  • Free cash flow before M&A of SEK 16.9 billion (Q1 2021: SEK 13.5 billion), driven by reduced inventory and high cash receipts including intellectual property receipts.

  • Return on capital employed was 15.4% (26.6% in the same period in 2021), driven by lower earnings before interest and taxes (EBIT).

2022 full year earnings highlights:

  • Group organic sales rose 3%, driven by 4% growth in Networks and 16% growth in Enterprise.Reported sales of SEK 271.5 billion (2021: SEK 232.3 billion).

  • Total revenue rose to SEK 113.3 billion (Q1 2021: SEK 100.7 billion) due to growth in Networks, Cloud Software and Services, and Enterprise.

  • Ebita before interest, tax, depreciation and amortization (EBITA) reached SEK 29.1 billion (2021: SEK 33.3 billion), EBITDA margin of 10.7%(14.3% in the same period in 2021).Earnings before interest, taxes, depreciation, and amortization (EBITA) were impacted by a previously announced charge of SEK 5.5 billion, which was partially compensated by an increase in IP licensing revenue.

  • The EBIT margin excluding restructuring charges was 10.1 percent (13.9 percent in the same period in 2021).Excluding Vonage and previously announced charges, EBIT margin was 12.9%, meeting the 2022 target of 12-14%.

  • Net income was SEK 19.1 billion (Q2 2021: SEK 23.0 billion).Diluted earnings per share (EPS) was SEK 5.62 (Q2 2021: SEK 6.81).

  • Free cash flow before M&A was SEK 22.2 billion (Q1 2021: SEK 32.1 billion).End 2022 with net cash of SEK 23.3 billion (2021: SEK 65.8 billion).

  • Return on capital employed was 14.0% (18.4% in the same period in 2021), driven by higher capital employed and lower EBIT.

  • The Board of Directors will propose to the General Meeting of Shareholders a dividend of SEK 2.70 per share for 2022 (SEK 2.50 per share for the same period in 2021).

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Ericsson President and CEO Börje Ekholm said:

During the quarter, we signed a multi-year intellectual property patent license agreement with a major licensee.This positive outcome positions us to secure additional 5G patent licensing agreements with handset manufacturers, as well as in new areas such as consumer electronics and the Internet of Things.We expect IP revenue to grow significantly over the next 18-24 months.

While supply chain challenges eased during the quarter, an inflationary environment remains.We still need to focus on overcoming the recent recession through commercial actions and improving the company's cost-effectiveness.Our SEK 9 billion cost saving actions are expected to start to pay off in the second quarter of 2023 and margins in the network business in the first half of 2023 due to changes in business mixdecline.Group earnings before interest, taxes, depreciation and amortization (EBITA) in the first quarter will be slightly lower than last year, but will improve during the year.

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