STOCKHOLM, Dec. 8, 2017 /PRNewswire/ --Restated segment
financials
As announced in April 2017,
Ericsson (NASDAQ: ERIC) will start to report financials according
to its new segments as of the fourth quarter 2017. To facilitate
year-on-year comparisons, Ericsson today discloses the restated
financials for full year 2015, each quarter of 2016 and the three
first quarters of 2017.
The four segments reported are:
Networks – Radio and transport solutions with supporting
services, based on industry standards and offered via scalable
modular platforms. The portfolio enables customers to evolve their
telecom networks across generations to 5G – including new use
cases, such as, public safety, IoT, and fixed wireless access.
Digital Services – Products and services providing
solutions for our customers' digital transformation journeys across
the support systems BSS and OSS, Telecom Core, and IT Cloud domains
through a combination of products, technology and expertise in
networks, software, cloud, and business processes.
Managed Services – Services are offered in three main
areas: Networks, IT, and Network Design & Optimization. Managed
services for networks range from hands-on field service operations
to remote network operations. IT managed services include the
management of applications and data centers, while network design
& optimization services evolve and expand customer networks to
meet ever-changing demands from consumers and business users.
Other – Products and services that enable content owners,
broadcasters, TV service providers and network operators to
efficiently deliver, manage and monetize new TV experiences. In
addition, segment Other includes iconectiv and emerging business
such as Internet of Things and Unified Delivery Network (UDN).
Financial disclosures for each segment remain the same as
earlier and include:
- Net Sales
- Gross income and gross margin
- Operating income and operating margin
- EBITA and EBITA margin
- Restructuring charges
Net Sales for segments Networks and Digital Services include a
breakdown of sales into products, services and IPR licensing
revenues. The split of IPR licensing revenues will be 82% to
Networks and 18% to Digital Services.
There is no change in the geographical structure. Net sales will
continue to be reported in five geographic Market Areas and Market
Area Other.
Overview of restated financials:
Net sales SEK
million
|
2017 Q1 –
Q3
|
2016
|
2015
|
Networks
|
91,781
|
140,984
|
157,791
|
Digital
Services
|
28,116
|
45,298
|
49,443
|
Managed
Services
|
18,309
|
27,501
|
30,597
|
Other
|
5,898
|
8,825
|
9,089
|
Total
|
144,104
|
222,608
|
246,920
|
Operating income,
reported SEK million
|
2017 Q1 –
Q3
|
2016
|
2015
|
Networks
|
6,017
|
17,570
|
28,290
|
Digital
Services
|
-15,232
|
-6,663
|
-3,389
|
Managed
Services
|
-2,972
|
-507
|
-19
|
Other
|
-6,183
|
-4,101
|
-3,077
|
Total
|
-18,370
|
6,299
|
21,805
|
Operating income,
adjusted* SEK million
|
2017 Q1 –
Q3
|
2016
|
2015
|
Networks
|
12,992
|
20,983
|
31,055
|
Digital
Services
|
-6,854
|
-3,487
|
-1,514
|
Managed
Services
|
-752
|
-125
|
219
|
Other
|
-4,052
|
-3,505
|
-2,915
|
Total
|
1,334
|
13,866
|
26,845
|
* The numbers exclude restructuring charges and are adjusted for
certain other items affecting comparability in 2017
Goodwill and acquisition-related intangible assets
Goodwill and acquisition-related intangible assets amounted to
approximately SEK 45 b. in the
balance sheet per Q3 2017. In the previous segment structure,
SEK 24.7 b. is related to Networks,
SEK 11.6 b. to IT & Cloud, and
SEK 8.6 b. to Other.
As the restatement of the profit and loss accounts per segment
is now finalized, Ericsson is together with the auditors starting
the process to allocate goodwill and intangibles to segments.
Thereafter the required impairment testing will be conducted, based
on the strategy and business plans presented at the Capital Markets
Day on November 8, 2017. The
impairment test outcome will be announced shortly after the Q4
closing, before the Q4 earnings report.
A preliminary indication is that impairment may be required in
segments Digital Services and Other, but not in segments Networks
or Managed Services. An impairment would not impact cash flow but
operating income and equity. Also, an impairment is not an
indication of the performance of the business in the quarter. Our
gross and net cash positions are strong, and will not be impacted
by a potential impairment.
Find the complete tables of restated financials at
www.ericsson.com/investors.
CONFERENCE CALL FOR ANALYSTS, INVESTORS, AND
JOURNALISTS
A conference call for financial analysts, investors and
journalists will begin at 15:00 CET
on December 8.
CFO Carl Mellander will comment
on the restated financials and take questions. To join the
conference call, please call one of the following numbers:
SE Toll Number: +46(0)856642662 (Toll-Free Sweden:
0200883817)
International/UK Toll Number: +44-2030089801 (Toll-Free UK:
08082370059)
US Toll Number: +1-6465025116 (Toll-Free US: +1-8557532235)
Please call in at least 15 minutes before the conference call
begins. As there is usually a large number of callers, it may take
some time before you are connected.
A live audio webcast of the conference call will be available
at: www.ericsson.com/investors and at:
www.ericsson.com/press
REPLAY:
A replay of the conference call will be available from about one
hour after it has ended until December 15,
2017.
Sweden replay number:
+46-8-5664-2638
International replay number: +44-20-3426-2807
Conference Number: 693556#
Contacts investors and financial analysts:
Peter Nyquist, Head of Investor
Relations
Phone: +46-10-714-64-99
E-mail: peter.nyquist@ericsson.com
Åsa Konnbjer, Director, Investor Relations
Phone: +46-10-713-39-28
E-mail: asa.konnbjer@ericsson.com
Stefan Jelvin, Director, Investor Relations
Phone: +46-10-714-20-39
E-mail: stefan.jelvin@ericsson.com
Rikard Tunedal, Director, Investor Relations
Phone: +46-10-714-54-00
E-mail: rikard.tunedal@ericsson.com
Contacts media enquiries:
Peter Olofsson, Head of Corporate
Communications
Phone: +46-10-719-18-80
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46-10-719-69-92
E-mail: media.relations@ericsson.com
Ericsson is a world leader in communications technology and
services with headquarters in Stockholm,
Sweden. Our organization consists of more than 111,000
experts who provide customers in 180 countries with innovative
solutions and services. Together we are building a more connected
future where anyone and any industry is empowered to reach their
full potential. Net sales in 2016 were SEK
222.6 billion (USD 24.5
billion). The Ericsson stock is listed on Nasdaq Stockholm
and on NASDAQ in New York. Read more
on www.ericsson.com.
This information is information that Telefonaktiebolaget LM
Ericsson is obliged to make public pursuant to the EU Market Abuse
Regulation. The information was submitted for publication, through
the agency of the contact person set out above, at 08:30 CET on December 8,
2017.
This information was brought to you by Cision
http://news.cision.com
http://news.cision.com/ericsson/r/restated-segment-financials-published-and-impairment-testing-begins,c2410055
The following files are available for download:
http://mb.cision.com/Main/15448/2410055/764282.pdf
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Restated segment
financials published and impairment testing begins
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