Ericsson reports fourth quarter results and full-year results 2024

Strategic highlights – continuing to deliver on strategic and operational priorities

— Maintaining leadership in programmable networks, with new 5G Advanced software launched in October.

— Growing interest in network APIs, with financial fraud protection and Quality on Demand applications in focus.

— Further patent licensing agreement signed in Q4, with strong IPR revenue generation in 2024.

Fourth quarter highlights – growth in Networks sales, and strong gross margin expansion

— Sales increased by 2%* YoY, with 54%* growth in market area North America. Market area Europe and Latin America also grew, while the other market areas declined significantly. Reported sales were SEK 72.9 (71.9) b.

— Adjusted1 gross income increased to SEK 33.7 (29.6) b. driven by strong expansion in Networks adjusted[1] gross margin to 49.1% (43.2%). Reported gross income was SEK 32.7 (28.6) b.

— Adjusted1 gross margin was 46.3% (41.1%) driven by supply chain efficiency actions, commercial discipline and market mix. Reported gross margin was 44.9% (39.8%).

— Adjusted1 EBITA was SEK 10.2 (8.2) b. with a 14.1% (11.4%) margin, benefiting from higher gross income and cost actions, partly offset by bonus accruals which were above target level. EBITA was SEK 8.6 (6.7) b.

— Net income was SEK 4.9 (3.4) b. EPS diluted was SEK 1.44 (1.02).

— Free cash flow before M&A was SEK 15.8 (12.5) b. supported by earnings growth and improved working capital.

Full-year highlights – strong growth in North America, and strong free cash flow

— Sales declined by -5%*, impacted by a -6%* sales decrease in Networks. Reported sales were SEK 247.9 (263.4) b.

— Adjusted1 gross income increased to SEK 111.4 (104.4) b. with an increased contribution from all segments.

— Adjusted1 EBITA was SEK 27.2 (21.4) b. with an adjusted[1] EBITA margin of 11.0% (8.1%).

— Adjusted1 EBIT margin was 3.8% (-5.2%).

— Net income was SEK 0.4 (-26.1) b. EPS diluted was SEK 0.01 (-7.94).

— Free cash flow before M&A was SEK 40.0 (-1.1) b. Working capital contributed strongly, benefiting from market mix and customer payment phasing, as well as the structural actions taken to improve supply chain efficiency.

— Net cash at year-end 2024 was SEK 37.8 (7.8) b.

— Return on capital employed was 2.5% (-10.7%).

— A dividend for 2024 of SEK 2.85 (2.70) per share will be proposed to the AGM by the Board of Directors.

Börje Ekholm, President and CEO, said: “Q4 marks a strong end to 2024 for Ericsson. We progressed well against our strategic plan and generated strong free cash flow. Momentum around programmable networks for differentiated performance continued to build, and customers increasingly recognize the benefits of making mobile networks accessible through APIs. In Q4, we signed an open programmable network deal with MasOrange, a first for Europe.

We see further signs that the overall RAN market is now stabilizing, with strong growth in North America supporting a return to Networks sales growth in Q4. Progress on operational excellence continued, with commercial discipline and supply chain efficiency actions supporting a strong adjustedGroup gross margin of 46.3% in the quarter. We are not yet at our long-term EBITA goal, but we are progressing towards it, supported by our strategic actions.

For 2025, in Networks we will continue to benefit from our product leadership position, with the best performance and energy efficiency in the industry. In Enterprise, our priority remains stabilizing the commercial performance in the current portfolio and driving growth in areas such as mission critical and enterprise private networks. Our commitment remains to put high-performing, programmable and differentiated networks at the center of the digitalization of enterprise and society.”

* Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.

1Adjusted metrics exclude restructuring charges.

SEK b. Q4 2024 Q42023 YoYchange Q32024 QoQchange Jan-Dec2024 Jan-Dec2023 YoYchangeNet sales 72.913 71.881 1% 61.794 18% 247.880 263.351 -6%Organic sales growth1 2 – – 2% – – – – -5%Gross margin2 44.9% 39.8% – 45.6% – 44.1% 38.6% -EBIT (loss) 7.958 5.848 36% 5.774 38% 4.313 -20.326 -EBIT margin2 10.9% 8.1% – 9.3% – 1.7% -7.7% -EBITA2 8.623 6.694 29% 6.203 39% 22.145 14.912 49%EBITA margin2 11.8% 9.3% – 10.0% – 8.9% 5.7% -Net income (loss) 4.879 3.409 43% 3.881 26% 0.374 -26.104 -EPS diluted, SEK 1.44 1.02 41% 1.14 26% 0.01 -7.94 -Free cash flow before M&A2 15.824 12.464 27% 12.944 22% 40.034 -1.084 -Net cash, end of period2 37.830 7.832 383% 25.534 48% 37.830 7.832 383%Adjusted financial measures2 3Adjusted gross margin 46.3% 41.1% – 46.3% – 44.9% 39.6% -Adjusted EBIT (loss) 9.584 7.368 30% 7.327 31% 9.325 -13.805 -Adjusted EBIT margin 13.1% 10.3% – 11.9% – 3.8% -5.2% -Adjusted EBIT excluding impairments4 9.797 7.368 33% 7.327 34% 24.658 18.111 36%Adjusted EBIT marginexcluding impairments4 13.4% 10.3% – 11.9% – 9.9% 6.9% -Adjusted EBITA 10.249 8.214 25% 7.76 32% 27.157 21.433 27%Adjusted EBITA margin 14.1% 11.4% – 12.6% – 11.0% 8.1% –

1 Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.

2 Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statement.

3 Adjusted metrics exclude restructuring charges

4 Excluding the non-cash impairments recorded in the second and fourth quarter 2024, relating to the impairment of intangible assets mainly attributed to the Vonage acquisition.

NOTES TO EDITORS

You find the complete report with tables in the attached PDF or onwww.ericsson.com/investors

Video webcast for analysts, investors and journalists

President and CEO Börje Ekholm and CFO Lars Sandström will comment on the report and take questions at a live video webcast at 9:00 AM CET (8:00 AM GMT London, 3:00 AM EST New York).

Join the webcastor please go towww.ericsson.com/investors

To ask a question: Access dial-in information here

The webcast will be available on-demand after the event and can be viewed at www.ericsson.com/investors.

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 70267 27 30 E-mail: alan.ganson@ericsson.com

Media Ralf Bagner, Head of Media Relations Phone: +46 76128 47 89 E-mail: ralf.bagner@ericsson.com

Media relations Phone: +46 10 719 69 92 E-mail:media.relations@ericsson.com

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 07:00 CET on January 24, 2025.

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