ERIC Ericsson

We continue to execute on our strategy to be a leading mobile infrastructure provider and to establish a focused enterprise business. We see strong business momentum and our investments in technology and a resilient supply chain have allowed us to continue to win market share and deliver on customer commitments in spite of global supply chain challenges. In the quarter, we saw organic sales¹ growth of 3%. Gross margin at 42.3% (42.8%) indicates underlying stability while absorbing cost increases in the supply chain. Our EBITA margin was 11.0%, adjusted for revaluation of holdings and provision related to Russia.

Russia’s invasion of Ukraine and the resulting humanitarian disaster is a major setback for the world. While mobile infrastructure is essential for communications in Russia, it has been clear from the start of the invasion that business in Russia would have to be reconsidered. Following current sanctions, we have announced an indefinite suspension of our affected business in Russia and recorded a provision for impairment of assets and other extraordinary costs of SEK -0.9 b. in Q1. We will continue to monitor and respond to the situation day by day, with priority on the safety and well-being of our people.

In our core mobile infrastructure business, we foresee a longer investment cycle compared with previous mobile generations as 5G’s broad application usage will drive a continued need to increase capacity. Technology leadership is driving our competitiveness, and in the quarter, we invested SEK -10.7 (-9.6) b. in R&D.

Networks sales¹ grew organically by 4% in Q1 reflecting our continually strengthened market position. Gross margin was 44.7% (46.1%). Software sales vary between quarters, and a certain SEK 1 b. annual software contract that is normally recorded in Q1, is this year delayed into Q2. Gross margin was also negatively impacted by proactive investments in supply chain resilience. Hard work throughout the organization enabled us to deliver on customer commitments despite global supply chain challenges. We also continue to increase our R&D investments to extend our leadership. R&D increased by SEK -1 b. YoY and was primarily related to our Cloud RAN portfolio, which gives customers more flexible deployment options, and to next generation ASICs that provide industry-leading radio performance, energy savings and footprint reduction. We foresee long-term attractive return on our investments similar to the last few years.

Digital Services organic sales¹ were down by -2% YoY in the quarter and EBIT was SEK -1.4 b. We are building a strong platform for Digital Services and sales development in the cloud native 5G core portfolio is encouraging with double digit growth, albeit from a low base. However, the overall result in the quarter is not satisfactory. The target of a limited loss for 2022 is challenging especially in light of the increased investments in R&D in service orchestration and 5G portfolio. We now increase focus on accelerating sales growth and addressing efficiency to improve profitability.

To capture opportunities in the rapidly growing enterprise space, we are focusing on two specific areas. The first focus area is wireless networks for enterprise where we already offer easy-to-use pre-packaged solutions, with Cradlepoint showing strong growth in the first quarter as 5G coverage increases on the US C-band. We also see growing momentum for our 5G portfolio in Dedicated Networks. In addition, we are increasing investments in our enterprise go-to-market organization.

The other focus area is a Global Network Platform, which will be built on global unified interfaces, so called APIs. Developers and enterprises will be able to create new use cases and experiences, like high quality video or XR on top of the 5G network, which enable operators and the industry to monetize the network investment in new ways. Ericsson intends to play a major role in building the API platform. With our previously announced intention to acquire Vonage – more than 1 million developers, 120,000 enterprise customers and a proven scaled API infrastructure – we will have a strong position to deliver on this ambition.

Ericsson’s IPR licensing revenues in Q1 were affected by several expiring patent license agreements pending renewal and by 5G license negotiations. We are confident in our strong 5G position and leading patent portfolio, positioning us well to conclude pending and future license renewals. Revenues from current IPR licensing contracts are estimated to SEK 1.0–1.5 b. in Q2. The actual revenue impact will depend on timing as well as terms and conditions of new agreements.

We are currently engaging with the Department of Justice (DOJ) regarding the breach notices it issued relating to the Deferred Prosecution Agreement. The resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated. As this process is ongoing, we remain limited in what we can say about the historical events covered in the Iraq investigation and our ongoing engagement on the matter. We are fully committed to co-operating with the DOJ and our work to further strengthen our Ethics and Compliance program, controls and our culture remains a top priority. It was actually our improved compliance program that allowed us to identify the misconduct in Iraq that started at least back in 2011.

In light of the global supply chain challenges, we decided to create a buffer of vital components in order to secure that we meet customer delivery commitments. In the quarter this had a material impact on inventory levels and therefore Free cash flow before M&A amounted to -1.7 (+1.6) b. We expect elevated inventory levels to remain in the next few quarters.

We are well positioned to continue our strategic journey. The mobile infrastructure business will remain our core and we will not spare any effort to strengthen our position here. Our ambition is to continue to grow and develop this business based on market growth and market share gains. In the growing enterprise space, we are seeing good traction for our established portfolio with Cradlepoint and Dedicated Networks. We continue to work towards closing the Vonage acquisition in the first half of 2022 and to start developing the Global Network Platform.

With our investments in both our core and enterprise businesses, as well as in our culture, we are determined to continue to make Ericsson a stronger, more resilient company while at the same time put it on a higher growth trajectory. Our key focus is to accelerate the pace towards reaching our long-term target of an EBITA margin of 15–18% and our ambition is to reach this target no later than in 2–3 years.

Börje Ekholm

President and CEO

Group reported sales were SEK 55.1 (49.8) b. Sales adjusted for comparable units and currency increased by 3% YoY, with growth in North America and in Europe and Latin America.

IPR licensing revenues increased to SEK 1.4 (0.8) b. driven by renewal of patent license agreements expired in 2021, partly offset by agreements expired in 2022.

Networks sales adjusted for comparable units and currency increased by 4% YoY. Sales increased in North America as well as in Europe and Latin America. Networks accounted for 74% (73%) of total sales.

Digital Services sales adjusted for comparable units and currency decreased by -2% YoY. Sales grew in North America. Digital Services share of total sales was 13% (14%).

Managed Services sales adjusted for comparable units and currency decreased by -5% YoY, due to reduced variable sales and contract rescoping. Reported sales increased by 2% YoY. Managed Services share of total sales was 9% (10%).

Emerging Business and Other sales adjusted for comparable units and currency increased by 15%. Reported sales increased by 26% YoY, driven mainly by Cradlepoint. Emerging Business and Other share of total sales was 4% (3%).

Gross margin

Reported gross margin was 42.3% (42.8%) negatively impacted mainly by proactive investments in supply chain resilience in Networks and higher initial deployment costs for the cloud native 5G Core portfolio. Gross margin in Managed Services and in Emerging Business and Other increased YoY.

Sequentially, reported gross margin decreased to 42.3% from 43.2% mainly due to investments in supply chain resilience and increased costs in Networks. Gross margin was negatively impacted by sequentially lower IPR licensing revenues.

Research and development (R&D) expenses

R&D expenses amounted to SEK -10.7 (-9.6) b. including a negative currency impact of SEK -0.5 b. R&D expenses increased primarily in Networks due to further investments in ASICs and Cloud RAN.

Selling and administrative (SG&A) expenses

SG&A expenses were SEK -6.6 (-6.2) b. including a negative currency impact of SEK -0.5 b.

Other operating income and expenses

Other operating income and expenses was SEK -1.1 (0.0) b. The quarter was negatively impacted by the provision of SEK -0.9 b. for impairment of assets and other extraordinary costs due to the suspension of affected business in Russia, as well as by a negative revaluation of SEK -0.3 b. related to Ericsson Ventures investments.

Restructuring charges

Restructuring charges amounted to SEK 0.0 (-0.1) b.

EBIT

Reported EBIT decreased to SEK 4.7 (5.3) b. impacted by the provision related to Russia and increased R&D investments. EBIT improved in Networks, when excluding the provision, as well as in Managed Services and Digital Services. EBIT was also impacted by revaluation of SEK -0.3 b. related to Ericsson Ventures investments in Emerging Business and Other. EBIT margin was 8.6% (10.6%).

Sequentially, reported EBIT decreased to SEK 4.7 b. from SEK 11.9 b. as a result of seasonally lower sales, the provision related to Russia and the revaluation of Ericsson Ventures investments.

Net sales rolling four quarters were SEK 237.6 b. and reported EBIT margin rolling four quarters was 13.2%.

EBITA

Reported EBITA declined to SEK 4.9 (5.5) b. corresponding to an EBITA margin of 9.0% (11.1%).

Reported EBITA margin rolling four quarters was 13.7%.

Financial income and expenses, net

Reported financial net was SEK -0.6 (-0.5) b. The strengthened USD to SEK resulted in a negative currency hedge effect of SEK -0.2 (-0.4) b.

Sequentially, financial net increased by SEK 0.3 b. to SEK -0.6 b. The currency hedge effect was SEK -0.2 b. in the quarter, versus SEK -0.3 b. in the fourth quarter 2021. The USD strengthened against the SEK between December 31, 2021 (SEK/USD rate 9.05) and March 31, 2022 (SEK/USD rate 9.32).

Income tax

Taxes were SEK -1.2 (-1.6) b. The effective tax rate in Q1 was 29% compared with 33% in Q1 2021, mainly due to market mix.

Net income

Net income declined to SEK 2.9 (3.2) b. and EPS diluted declined to SEK 0.88 (0.96) YoY, impacted by the provision related to Russia.

Employees

The number of employees on March 31, 2022, was 101,067 compared with 101,322 on December 31, 2021.

South East Asia, Oceania and India

Currency adjusted sales decreased by -17% YoY. Networks and Digital Services sales declined due to timing of orders and project milestones. Managed Services sales remained stable. Reported sales decreased by -13%.

North East Asia

Currency adjusted sales declined by -20% YoY. Sales declined in Networks and Digital Services as a result of project timing in Japan. The decline was partly offset by increased sales in Mainland China based on project milestones. Reported sales declined by -16%.

North America

Currency adjusted sales increased by 9% YoY driven by strong demand for 5G solutions across all segments. Reported sales increased by 21%.

Europe and Latin America

Currency adjusted growth was 15% YoY with 18% growth in Europe and 2% in Latin America. Sales in Networks continued to grow as a result of market share gains. Digital Services sales were stable while sales decreased in Managed Services due to rescoping and renegotiations of contracts. Reported sales increased by 21%. As a consequence of the Russian invasion of Ukraine and related sanctions, affected business in Russia has been indefinitely suspended. In 2021, Russia accounted for SEK 4.1 b. in sales.

Middle East and Africa

Currency adjusted sales decreased by -9% YoY. Sales declined in Networks due to timing of 5G investments in the Middle East, partly compensated by growth in African markets. Sales in Digital Services were stable with a drop in the Middle East compensated by strong Core upgrade sales in Africa. Managed Services sales declined, mainly due to contract rescoping. Reported sales decreased by -2%.

Other

IPR licensing revenues increased to SEK 1.4 (0.8) b. driven by renewal of patent license agreements expired in 2021 partly offset by agreements expired in 2022.

Sequentially, IPR licensing revenues decreased to SEK 1.4 b. from SEK 2.4 b.

Net sales

Sales adjusted for comparable units and currency decreased by -5% YoY, due to reduced variable sales and contract rescoping. Sales in Network Optimization showed growth in 4 out of 5 market areas, with an increasing share of software in the sales mix. Reported sales increased by 2% YoY.

Gross margin

Reported gross margin increased to 23.2% (19.4%) due to reduced restructuring charges, higher Network Optimization sales and timing of costs.

Reported gross margin increased to 23.2% from 18.2% QoQ due to seasonally lower costs and lower restructuring charges.

EBIT

Reported EBIT increased to SEK 0.6 (0.3) b. with an EBIT margin of 12.0% (6.4%). The increase was driven by increased gross margin.

Q1 2021 was negatively impacted by costs related to an exit from a non-core field services business in Italy.

Reported EBIT increased to SEK 0.6 b. from SEK 0.4 b. QoQ mainly due to higher gross margin.

Net sales rolling four quarters were SEK 20.5 b. and reported EBIT margin rolling four quarters was 8.5%.

Net sales

Sales adjusted for comparable units and currency increased by 15% YoY. Reported sales increased by 26% YoY, driven mainly by Cradlepoint.

Gross margin

Reported gross margin increased to 38.1% (36.6%). The increase was driven primarily by Cradlepoint.

Reported gross margin increased to 38.1% from 34.9% QoQ, as a result of broad-based improvements across most units.

EBIT (loss)

Reported EBIT (loss) was SEK -1.2 (-0.8) b.

Reported EBIT was negatively impacted by SEK -0.3 b. from revaluation of Ericsson Ventures investments.

Reported EBIT (loss) decreased to SEK -1.2 b. from SEK -0.6 b. QoQ.

In Q4 2021, reported EBIT was positively impacted by SEK 0.4 b. related to a gain from divestment of a data center in the Netherlands and revaluation of Ericsson Ventures investments.

Net sales rolling four quarters were SEK 8.4 b. and reported EBIT margin rolling four quarters was -44.7%.

Cash flow from operating activities

Reported cash flow from operating activities was SEK 0.0 (3.2) b. The strategy to improve supply chain resilience, and secure the ability to capture market demand, affected cash flow negatively. The decrease in cash flow was partly offset by continued high cash collection. Operating net assets increased in the quarter with a negative impact on cash flow of SEK -5.5 b. Key movements include a negative impact of SEK -5.3 b. related to an increase in inventory, to support the supply chain resilience within Networks. Cash flow was also negatively impacted by SEK -6.8 b. from a change in other operating assets and liabilities, net, which includes pay-outs of accrued employee-related expenses. These negative impacts were partly offset by a positive impact of SEK 6.3 b. as a result of an increase in contract liabilities related to customer contracts and IPR payments. Taxes paid were SEK -1.3 b.

Free cash flow

Free cash flow before M&A was SEK -1.7 (1.6) b. in the quarter. The decrease in the quarter was mainly driven by lower cash flow from operating activities, with build-up of operating net assets. Capex net and other investing activities were SEK -1.1 (-1.1) b. and include investments in 5G production capacity. Repayment of lease liabilities in the quarter was stable at SEK -0.6 b. and was mainly related to property leases.

Free cash flow before M&A rolling four quarters was SEK 28.8 b., or 12.1% in relation to sales.

There were limited M&A activities in the quarter and free cash flow after M&A was SEK -1.6 (1.6) b.

Cash flow from investing and financing activities

Reported cash flow from investing activities was SEK 14.4 (-0.9) b. due to disposal of non-current interest-bearing securities to cash and cash equivalents. Reported cash flow from financing activities including repayment of lease liabilities was SEK 7.8 (-6.2) b., mainly as a result of issuance of a EUR 750 m. (SEK 7.8 b.) bond. In Q1 2021, Ericsson repaid a EUR -500 m. (SEK -5.1 b.) bond.

Financial position

Gross cash increased by SEK 6.6 b. QoQ to SEK 104.2 b. as a result of the issuance of a EUR 750 m. (SEK 7.8 b.) bond. Net cash was stable at SEK 65.2 b. with a slight decrease of SEK -0.6 b. QoQ.

The funding strategy relies on diverse funding sources with bilateral loans and bonds. In the quarter, Ericsson issued a EUR 750 m. (SEK 7.8 b.) bond maturing in February 2027. The bond has a coupon of 1.125% and proceeds will be used for general corporate purposes. The average maturity of long-term borrowings was 3.6 years as of March 31, 2022, an increase from 3.0 years 12 months earlier.

Liabilities for post-employment benefits decreased to SEK 30.6 b. from SEK 36.1 b. in the quarter, due to higher discount rates partly offset by higher inflation rates. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liability for post-employment benefits would have been approximately SEK 15.3 b. (SEK 15.3 b. lower than current DBO).

Return on capital employed (ROCE) was 10.2% (13.3%).

Market related

Source: Dell’Oro Mobile RAN outlook report February 2022. Numbers in brackets from the Dell’Oro Mobile RAN outlook report January 2022.

Ericsson related

Group long-term financial targets

Net sales

Reported average seasonality last 3 years (2019-2021), %

Net sales may show large variations between quarters.

Sales to Russia amounted to SEK 4.1 b. in 2021.

Operating expenses excluding restructuring

Reported average seasonality last 3 years (2019-2021), SEK b.

Operating expenses may show large variations between quarters.

M&A

Work continues towards closing the Vonage acquisition during H1 2022.

Currency exposure

Income after financial items January–March 2022 was SEK 0.1 (0.8) b.

At the end of the quarter, gross cash (cash, cash equivalents, short-term investments and interest-bearing securities, non-current) amounted to SEK 89.0 (53.1) b.

There was a decrease in intercompany lending of SEK 1.6 b. and in intercompany borrowing of SEK 0.7 b. in the quarter.

In the quarter, a dividend of SEK 8.3 b. was recognized, after decision by the Annual General Meeting on March 29. The first of two equal dividend payouts was made in the first week of April. The second payout will be in October.

The holding of treasury stock on March 31, 2022, was 4,009,306 Class B shares.

Other information

Legal proceedings

On October 4, 2021, Ericsson asked the U.S. District Court for the Eastern District of Texas for a declaration that Ericsson has, in its negotiations with Apple, complied with its FRAND commitment and all other applicable laws and policies that would affect the terms of Ericsson’s and Apple’s prospective license. On December 17, 2021, Apple filed a responsive case against Ericsson in the U.S. District Court for the Eastern District of Texas alleging, among other things, that Ericsson breached obligations associated with the licensing of its standard essential patents under FRAND terms. Ericsson and Apple were not able to renew the now expired patent license agreement between the parties in a timely manner. On January 18, 2022, Ericsson filed three complaints with the U.S. International Trade Commission (ITC) alleging infringement of 12 patents by certain Apple products. In addition, Ericsson filed companion lawsuits in the Western District of Texas alleging infringement of the same 12 patents. Also, in January 2022 Ericsson filed complaints in several jurisdictions in Europe (Germany, Netherlands, Belgium) and South America (Brazil, Colombia) alleging that certain Apple products infringe Ericsson patents. On January 19, 2022, Apple filed a complaint against Ericsson in the ITC alleging infringement of three Apple patents by certain Ericsson products. Apple also filed a complaint in Germany at the District Court of Düsseldorf alleging infringement of a German utility model and another complaint at the District court of Mannheim alleging infringement of an Apple patent by certain Ericsson products. In addition, Apple filed complaints in China at the Beijing Patent Court alleging infringement by Ericsson of one patent and one utility model.

On March 3, 2022, Ericsson learned that Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed in the United States District Court for the Eastern District of New York. The complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and disclosure policies and obligations and the conduct of its business in Iraq.

PRESS RELEASES

March 02, 2022 | Update on Deferred Prosecution Agreement

On December 6, 2019, Ericsson entered into a Deferred Prosecution Agreement (DPA) with the United States Department of Justice (DOJ). On March 1, 2022, the DOJ informed Ericsson that the disclosure made by the company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient. Furthermore, it determined that the company breached the DPA by failing to make subsequent disclosure related to the investigation post-DPA. The company is in communication with the DOJ regarding the facts and circumstances of the breach determination and is committed to co-operating with the DOJ to resolve the matter.

At this stage it is premature to predict the outcome of this matter.

Comments about the Iraq investigation Based on our current review, we believe the situation described in the media reports on the conduct of Ericsson employees, vendors and suppliers in Iraq, going back to 2011 is covered by Ericsson’s 2019 internal investigation.

As previously disclosed in our press release on February 15, 2022, Ericsson invested significant time and resources to understand these matters. The investments we have made in our Ethics & Compliance program enabled us to identify and investigate the misconduct in Iraq. The 2019 investigation, which was supported by external legal

counsel, conducted over the course of a year, and involved the collection and review of a large amount of information, found serious breaches of compliance rules and the Code of Business Ethics.

The investigation could not identify that any Ericsson employee was directly involved in financing terrorist organizations. Based on our current assessment of the media reports, we do not believe they change this conclusion. We reiterate our commitment to investigate and take action to address any new information, including further investigation as appropriate.

As a result of the investigation, several employees were exited from the company and multiple other disciplinary and other remedial actions were taken. This included closing gaps in our internal processes in the region and incorporating lessons from the investigation into our ethics and compliance program. Furthermore, Ericsson terminated a number of third-party relationships and prioritized the Iraq country business for enhanced training and awareness activities, policies and procedures, and third-party management processes.

The Company has previously acknowledged publicly that it had failed to implement sufficient internal controls, including internal controls designed to deter and detect corruption. Over the last years, Ericsson has made significant investments in compliance which has enabled the company to uncover and address past misconduct. Since the beginning of 2017 when we started the turnaround of our company, we have invested extensively in enhanced compliance systems and processes. We work hard to build a better Ericsson focused on safeguarding a strong ethical and compliant culture throughout the entire company. We continue to invest significant resources to improve our ethics and compliance program and our speak-up culture to help prevent future misconduct.

Ericsson is under a compliance monitorship and the deferred prosecution agreement with the US Department of Justice remains in effect.

https://www.ericsson.com/en/press-releases/2022/3/update-on-

deferred-prosecution-agreement

March 16, 2022 | Ericsson appoints Scott Dresser as Chief Legal Officer

Ericsson (NASDAQ: ERIC) today announced the appointment of Scott Dresser to the company’s Executive Team as Senior Vice President, Chief Legal Officer and Head of Group Function Legal Affairs & Compliance. Scott will join Ericsson on 21 March 2022 and be based in the US. Scott replaces Xavier Dedullen.

Ericsson President and CEO, Börje Ekholm said: “I warmly welcome Scott to Ericsson. He brings a wealth of global experience spanning our sector and beyond. Scott joins us at a critical time and will play a key role working with me, our Board and the rest of our team as we continue to grow and strengthen the company. We demand that our business be conducted responsibly and with integrity across its value chain. Scott’s experience driving positive change will be invaluable as Ericsson expands its business and continues its cultural transformation, enhancing its governance, compliance, and controls.”

Commenting on his appointment, Scott Dresser said: “Ericsson is a global leader that plays an essential role in advancing the future of communications. I am excited to be joining and look forward to working with Börje and the entire organization to execute the strategy

while focusing on operating with the highest standards of corporate governance and compliance.”

With a legal career spanning more than three decades, Dresser joins Ericsson from Veon, where he has served for eight years as the company’s General Counsel. Prior to Veon, Scott held senior leadership positions with Virgin Media, White Mountains Capital and Conservation International. He began his career in New York in private practice with law firms Lord Day & Lord and Morgan Lewis where he specialized in corporate law, governance, and mergers and acquisitions. Scott is a US citizen.

Appointed Chief Legal Officer and Secretary to the Board of Directors in April 2018, Xavier Dedullen has played an important role during the turn-around of the company’s business and helped to establish firmer foundations for the legal, compliance, and corporate investigation functions. He will leave the role effective 20 March, 2022 but remain with Ericsson for a transition period.

Börje Ekholm continued: “I want to thank Xavier sincerely for his commitment and support over the past four years. During his tenure, we have taken important strides in several strategic areas including our compliance program. Xavier leaves with our gratitude and I wish him well in all future endeavors.”

https://www.ericsson.com/en/press-releases/2022/3/ericsson-

appoints-scott-dresser-as-chief-legal-officer

March 29, 2022 | Ericsson’s Annual General Meeting 2022

Telefonaktiebolaget LM Ericsson’s (NASDAQ:ERIC) Annual General Meeting (AGM) was held on March 29, 2022. Due to COVID-19, the AGM 2022 was conducted without the physical presence of shareholders, representatives and third parties and the meeting was conducted as a digital meeting with online participation. Shareholders were also able to exercise their voting rights by post before the meeting.

Adoption of the Profit and Loss Statements and the Balance Sheets The AGM resolved to adopt the Profit and Loss Statement and the Balance Sheet for the Parent Company as well as the Consolidated Profit and Loss Statement and the Consolidated Balance Sheet for the Group for 2021.

Dividend

The proposed dividend of SEK 2.50 per share was approved by the AGM. The dividend will be paid in two equal installments; SEK 1.25 per share with the record date Thursday, March 31, 2022, and SEK 1.25 per share with the record date Friday, September 30, 2022. Euroclear Sweden AB is expected to disburse SEK 1.25 per share on Tuesday, April 5, 2022, and SEK 1.25 per share on Wednesday, October 5, 2022.

Remuneration report

The AGM resolved to adopt the Board of Directors’ remuneration report for 2021.

Discharge from liability

It was recorded that shareholders representing at least one tenth of all of the shares in the Company voted against discharge from liability of the Board of Directors and the President for the financial year 2021.

Board of Directors

The AGM elected Board members in accordance with the proposal of the Nomination Committee. Ronnie Leten was re-elected as Chair of the Board and Jon Fredrik Baksaas, Jan Carlson, Nora Denzel, Börje Ekholm, Eric A. Elzvik, Kurt Jofs, Ronnie Leten, Kristin S. Rinne, Helena Stjernholm and Jacob Wallenberg were re-elected as Board members. Carolina Dybeck Happe was elected new Board member. It was also noted that the unions have appointed Torbjörn Nyman, Anders Ripa

and Kjell-Åke Soting employee representatives in the Board with Ulf Rosberg, Loredana Roslund and Annika Salomonsson as deputies.

Board of Directors’ Fees

The AGM resolved on fees to the Board of Directors, in accordance with the Nomination Committee’s proposal. Yearly fee to the Chair of the Board of SEK 4,375,000, and fees to other non-employee members of the Board, elected by the AGM, of SEK 1,100,000 each. Fees for Committee work to non-employee members of the Committees, elected by the AGM, were approved as follows: SEK 475,000 to the Chair of the Audit and Compliance Committee and SEK 275,000 to each of the other members of the Audit and Compliance Committee, SEK 205,000 to each of the Chairs of the Finance Committee, the Remuneration Committee and the Technology and Science Committee, and SEK 180,000 to each of the other members of the Finance Committee, the Remuneration Committee and the Technology and Science Committee.

The AGM approved the Nomination Committee’s proposal to enable payment of part of the fees to the members of the Board for the Board assignment, in the form of synthetic shares.

Auditor

The AGM elected Deloitte AB as auditor for the period up until the end of the AGM 2023.

Long-Term Variable Compensation Program (LTV)

Long-Term Variable compensation program 2022 (LTV 2022)

In accordance with the Board of Directors’ proposals, the AGM resolved on implementation of LTV 2022 for the members of the Executive Team (currently 15 individuals), comprising a maximum of 2 million B-shares in Ericsson. “Performance Share Awards” will be granted free of charge entitling the participant to receive a number of shares, free of charge, following the expiration of a three-year vesting period, provided that certain performance conditions are met and that the participant retains his or her employment. The performance conditions are based on TSR (total shareholder return) development during a three-year period (absolute TSR-development and relative TSR-development), fulfilment of a Group Environmental Social and Governance (ESG) performance criterion comprised of two equally weighted subcomponents covering environmental and social aspects of ESG measured during a three-year period and the 2022 Group EBIT (operating income) performance criterion. All targets have a three-year vesting period. The Company has approximately 3.3 billion shares in issue. The 2 million B-shares covered by LTV 2022 correspond to approximately 0.06 percent of the total number of outstanding shares.

Furthermore, the AGM resolved to approve the Board of Directors’ proposal to hedge the company’s undertakings under LTV 2022 through an equity swap agreement with a third party.

The Board of Directors’ proposals on transfer of treasury stock, directed share issue and acquisition offer under agenda item 16.2 and item 17 were withdrawn.

Transfer of treasury stock for previously resolved LTV programs

The AGM resolved to approve the Board of Directors’ proposal on transfer of not more than 1.4 million B-shares on Nasdaq Stockholm prior to the AGM 2023 to cover certain expenses, mainly social security charges, which may occur in relation to previously resolved and ongoing LTV programs; LTV 2019 and LTV 2020.

The AGM further resolved that the Company shall have the right to, in conjunction with the delivery of vested shares under LTV 2019 and LTV 2020, prior to the AGM in 2023, retain and sell no more than 60% of the vested B-shares on Nasdaq Stockholm in order to cover for the costs for withholding and paying tax and social security liabilities on

behalf of the participants in relation to the Performance Share Awards. Transfer of these shares shall be made at a price within the, at each time, prevailing price interval for the share.

Shares and votes

There are in total 3,334,151,735 shares in the Company; 261,755,983 shares of series A and 3,072,395,752 shares of series B, corresponding to in total 568,995,558.2 votes. The Company’s holding of treasury stock as of March 29, 2022, amounts to 4,009,306 shares of series B, corresponding to 400,930.6 votes.

https://www.ericsson.com/en/press-releases/2022/3/ericssons-

annual-general-meeting-2022

POST-CLOSING EVENTS

April 07, 2022 | Ericsson announces change to the Executive Team

Ericsson (NASDAQ: ERIC) today announces that Peter Laurin has decided to leave Ericsson to pursue opportunities outside the company. Peter Laurin has been with the company since 2001 and will leave his position as Senior Vice President and Head of Business Area Managed Services on August 15, 2022. He has served on Ericsson’s Executive Team since 2017.

Börje Ekholm, President and CEO, says: “Peter has been instrumental in turning around and transforming our Managed Services business and successfully led Ericsson’s digitalization and IT journey. He is a valued member of the Ericsson leadership team and I wish Peter all the very best in this new role as CEO of Piab.”

Peter’s successor as Head of Business Area Managed Services will be announced later.

Piab (www.piab.com) is a leading company in automation of production processes around the globe.

https://www.ericsson.com/en/press-releases/2022/4/ericsson-

announces-change-to-the-executive-team

April 11, 2022 | Ericsson suspends business in Russia indefinitely and records provision in Q1 2022

In late February, Ericsson (NASDAQ: ERIC) suspended all deliveries to customers in Russia. In the light of recent events and of European Union sanctions, the company will now suspend its affected business with customers in Russia indefinitely. Ericsson is engaging with customers and partners regarding the indefinite suspension of the affected business. The priority is to focus on the safety and well-being of Ericsson employees in Russia and they will be placed on paid leave.

As a consequence, Ericsson records a SEK 0.9 b. provision in first quarter 2022 for impairment of assets and other exceptional costs. No staff redundancy cost is included. The provision will be recorded in Other Operating Expenses in Segment Networks. Around one third of this amount will impact cashflow.

https://www.ericsson.com/en/press-releases/2022/4/ericsson-

suspends-business-in-russia-indefinitely-and-records-provision-in-q1-2022

Ericsson is exposed to a number of risks in its activities. To stimulate identification and support cross-functional treatment within the Ericsson Group, risks are grouped in a number of categories, including for example risks relating to technology, IPR, compliance, project execution, operations, products and services, treasury and accounting, the geopolitical environment, M&A, cyber security and occupational health and safety.

Ericsson’s risk management is embedded into strategy development and operational processes and is a part of the Ericsson Group Management System to ensure accountability, effectiveness, efficiency, business continuity and compliance. Risks are defined in both a short-term and long-term perspective and are related to long-term objectives as per the strategic direction as well as to short-term objectives.

Risk factors and uncertainties of relevance to Ericsson are described in the Annual Report 2021 and in the Annual Report on Form 20-F 2021 (in the following the “Annual Report 2021”). Updates to these risk factors and uncertainties observed by Ericsson that are deemed of short-term relevance include, but are not limited to, the following risks described below:

Deferred Prosecution Agreement with the United States Department of Justice

On December 6, 2019, Ericsson entered into a Deferred Prosecution Agreement (DPA) with the United States Department of Justice (DOJ). In October 2021, Ericsson received correspondence from the DOJ stating its determination that the Company had breached its obligations under its DPA by failing to provide certain documents and factual information. On March 1, 2022, the DOJ informed Ericsson that the disclosure made by the Company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient. Furthermore, it determined that the Company breached the DPA by failing to make subsequent disclosure related to the investigation post-DPA. As mentioned in the Annual Report 2021, the Company is in communication with the DOJ regarding the facts and circumstances of the breach determinations and is committed to co-operating with the DOJ to resolve the matters. While the length of the process cannot be determined, the resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated. Accordingly, no provisions have been recorded for such potential exposure.

Business in Russia

As mentioned in the Annual Report 2021, including in the risk factor 1.1 and 3.2, conducting business throughout the world makes Ericsson subject to the effects of general global economic conditions as well as conditions unique to specific countries or regions. In addition to the risk factors described in the Annual Report 2021 and the provision recorded by the Company in Q1 2022, the large uncertainties relating to the Russian market, including the applicable and changed sanctions landscape, lead to large uncertainties relating to other potential costs and consequences that may follow. All of the above could have a material adverse effect on the Company, including its reputation, business, financial condition, results of operations (EBIT), cash flows, or prospects.

Stockholm, April 14, 2022

Telefonaktiebolaget LM Ericsson

Börje Ekholm, President and CEO

Org. No. 556016-0680

This report has not been reviewed by Telefonaktiebolaget LM Ericsson auditors

Date for next report: July 14, 2022

Media and analyst briefing

Ericsson invites media, investors and analysts to a conference call and live video webcast at 9:00 AM CEST on April 14, 2022.

Link to the webcast, dial-in to audio conference, supporting material and replay will be available at:

www.ericsson.com/investors and

www.ericsson.com/newsroom

For further information, please contact:

Carl Mellander, Senior Vice President, Chief Financial Officer

Phone: +46 72 583 88 70

E-mail: investor.relations@ericsson.com or

media.relations@ericsson.com

Stella Medlicott, Senior Vice President, Chief Marketing and Communications Officer

Phone: +46 73 095 65 39

E-mail: investor.relations@ericsson.com or

media.relations@ericsson.com

Telefonaktiebolaget LM Ericsson

Org. number: 556016-0680

Torshamnsgatan 21

SE-164 83 Stockholm

Phone: +46 10 719 00 00

www.ericsson.com

Investors

Peter Nyquist, Vice President,

Head of Investor Relations

Phone: +46 70 575 29 06

E-mail: peter.nyquist@ericsson.com

Lena Häggblom, Director,

Investor Relations

Phone: +46 72 593 27 78

E-mail: lena.haggblom@ericsson.com

Stefan Jelvin, Director,

Investor Relations

Phone: +46 70 986 02 27

E-mail: stefan.jelvin@ericsson.com

Media

Kristoffer Edshage, Director of Corporate Media

Phone: +46 72 220 44 46

E-mail: media.relations@ericsson.com

Corporate Communications

Phone: +46 10 719 69 92

E-mail: media.relations@ericsson.com

This This report includes forward-looking statements, including statements reflecting management’s current views relating to the growth of the market, future market conditions, future events, financial condition, and expected operational and financial performance, including, the following:

The words “believe,” “expect,” “foresee,” “anticipate,” “assume,” “intend,” “likely,” “projects,” “may,” “could,” “plan,” “estimate,” “forecast,” “will,” “should,” “would,” “predict,” “aim,” “ambition,” “seek,” “potential,” “target,” “might,” “continue,” or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

We caution investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond our control that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Important factors that could affect whether and to what extent any of our forward-looking statements materialize include, but are not limited to, the factors described in the section “Risk Factors”, and in “Risk Factors” in the Annual Report 2021.

These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this report, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulation.