- Non-cash impairment of SEK 11.4
billion to be recorded in the second quarter 2024, relating
to the impairment of intangibles mainly attributed to the Vonage
acquisition
- Reflects lower anticipated market growth in some of Vonage's
current portfolio
- The Ericsson strategy to build a new source of monetization for
the telecom industry remains. Vonage is positioned at the center of
digitalizing enterprises and society through the development of the
Global Network Platform for network APIs; 12 partnerships with
leading service providers have already been announced, with Singtel
and Telstra added in Q2
STOCKHOLM, July 3, 2024 /PRNewswire/ -- Ericsson (NASDAQ:
ERIC) today announces that, in accordance with IFRS accounting
requirements, it will record a non-cash impairment charge of
SEK 11.4 billion in the second
quarter of 2024, primarily reflecting lower anticipated market
growth rates in Vonage's current portfolio. The Net income impact
after tax will be SEK 11.4 billion
and reported in segment Enterprise.
Niklas Heuveldop, Head of Business Area Global Communications
Platform and CEO of Vonage says: "Given deterioration in the market
environment and elective decisions we have made to refocus our
investments in strategically prioritized areas, we have reassessed
certain growth assumptions, resulting in a non-cash impairment of
SEK 11.4 billion."
Niklas Heuveldop adds: "We continue to advance our strategy to
build a Global Network Platform for network APIs, which was the
strategic impetus for the Vonage acquisition. We recently announced
additional partnerships with leading mobile network operators and
we see continued positive momentum across the industry. Through
this strategy, we are making advanced 5G network capabilities
available to the world's developer community to accelerate the
innovation of value-added applications for industry and society.
This will open up new revenue streams for our operator customers
and spur growth in the telecom industry."
FOR FURTHER INFORMATION, PLEASE CONTACT
Contact person
Daniel Morris, Head of Investor
Relations
Phone: +44 7386657217
E-mail: investor.relations@ericsson.com
Additional contacts
Stella Medlicott, Senior Vice
President, Marketing and Corporate Relations
Phone: +46 730 95 65 39
E-mail: media.relations@ericsson.com
Investors
Lena Häggblom, Director, Investor Relations
Phone: +46 72 593 27 78
E-mail: lena.haggblom@ericsson.com
Alan Ganson, Director, Investor
Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@ericsson.com
Media
Ralf Bagner, Head of Media
Relations
Phone: +46 76 128 47 89
E-mail: ralf.bagner@ericsson.com
Media relations
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
Forward-looking statements
This release includes forward-looking statements, including
expected write-down of our goodwill and other asset impairments,
amounts of such impairments, effect of impairments on cash flow and
dividend capacity, financial condition, performance and results of
operations, business plans, objectives, market conditions, and
assumptions upon which those statements are based including, in
particular the following risks and uncertainties:
- Final determination of the extent of the impairment based on
fair value analysis compared to carrying value
- Completion of the quarterly financial statements and review by
our independent registered public accounting firm
- Potential changes in estimated impairment amounts based on the
completion of the review process
- Extent of impairment impacts on cash flow and dividend
capacity
- Our goals, strategies, planning assumptions and operational or
financial performance expectations
- Industry trends, future characteristics and development of the
markets in which we operate
- Our future liquidity, capital resources, capital expenditures,
cost savings and profitability
- The expected demand for our existing and new products and
services as well as plans to launch new products and services
including research and development expenditures
- The ability to deliver on future plans and to realize potential
for future growth
- Technology and industry trends including the regulatory and
standardization environment in which we operate, competition and
our customer structure.
- Potential dividend capacity in future periods is assessed based
on full year performance and is impacted by a variety of factors
including earnings, business outlook and financial position.
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"
in the latest interim reports, and in "Risk Factors" in the Annual
Report 2023.
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 release, 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 regulations.
This 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 22:15 CEST on July 3,
2024.
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Ericsson announces
non-cash impairment charge mainly relating to Vonage
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