Fourth Quarter Highlights
- Sales adjusted for comparable units and currency grew by 13% YoY mainly driven by sales in North East Asia, Europe and North America. Reported sales were SEK 69.6 (66.4) b.
- Gross margin excluding restructuring charges improved to 40.6% (37.1%) with margin improvements in all segments. Reported gross margin improved to 40.6% (36.8%).
- Operating income excluding restructuring charges improved to SEK 11.0 b. (15.8% operating margin) from SEK 6.5 b. (9.7% operating margin) mainly driven by Networks. Reported operating income was SEK 11.0 (6.1) b.
- Networks sales increased by 20% YoY, adjusted for comparable units and currency. Operating margin excluding restructuring charges was 21.5% (14.5%).
- Reported net income was SEK 7.2 (4.5) b.
- Free cash flow before M&A was SEK 12.8 (-1.9) b. Q4 2019 included a payment of SEK 10.1 b. related to the resolution of the US SEC and DOJ investigations. Net cash Dec 31, 2020, was SEK 41.9 (34.5) b.
Full-year highlights
- Sales adj. for comp. units and currency grew by 5%, with Networks growing by 10%. Reported sales increased by 2% to SEK 232.4 b.
- Gross margin excl. restructuring charges was 40.6% (37.5%), with improvements in all segments.
- Reported operating income improved to SEK 27.8 (10.6) b.
- Reported net income was SEK 17.6 (1.8) b.
- Free cash flow before M&A amounted to SEK 22.3 (7.6) b. Full-year 2019 included a payment of SEK 10.1 b. related to the resolution of the US SEC and DOJ investigations.
- The Board of Directors will propose a dividend for 2020 of SEK 2.00 (1.50) per share to the AGM.
Planning assumptions highlights (please see the quarterly report for complete planning assumptions)
- Three-year average reported sales seasonality between Q4 and Q1 is -24%; however, the seasonal effect may be somewhat less pronounced due to 5G deployment in some of Ericsson’s markets.
SEK b. | Q4 | Q4 | YoY | Q3 | QoQ | Jan-Dec | Jan-Dec | YoY |
Net sales | 69.6 | 66.4 | 5% | 57.5 | 21% | 232.4 | 227.2 | 2% |
Sales growth adj. for comparable units and currency | - | - | 13% | - | - | - | - | 5% |
Gross margin | 40.6% | 36.8% | - | 43.1% | - | 40.3% | 37.3% | - |
Operating income (loss) | 11.0 | 6.1 | 80% | 8.6 | 27% | 27.8 | 10.6 | 163% |
Operating margin | 15.8% | 9.2% | - | 15.0% | - | 12.0% | 4.6% | - |
Net income (loss) | 7.2 | 4.5 | 60% | 5.6 | 29% | 17.6 | 1.8 | - |
EPS diluted, SEK | 2.26 | 1.33 | 70% | 1.61 | 40% | 5.26 | 0.67 | - |
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Gross margin excluding restructuring charges | 40.6% | 37.1% | - | 43.2% | - | 40.6% | 37.5% | - |
Operating income excl. restr. charges & items affecting compar. in 2019[2] | 11.0 | 5.7 | 92% | 9.0 | 23% | 29.1 | 22.1 | 32% |
Operating margin excl. restr. charges & items affecting compar. in 2019[2] | 15.8% | 8.6% | - | 15.6% | - | 12.5% | 9.7% | - |
Free cash flow before M&A | 12.8 | -1.9 | - | 3.9 | - | 22.3 | 7.6 | 192% |
Net cash, end of period | 41.9 | 34.5 | 21% | 41.5 | 1% | 41.9 | 34.5 | 21% |
[1] Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.
[2] Operating income excludes restructuring charges in all periods and cost provisions related to the resolution of the SEC and DOJ investigations of SEK -11.5 b. in Q3 2019 as well as a partial release of the same provision of SEK 0.7 b. in Q4 2019.
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