Ericsson reports fourth quarter and full-year results 2022, CEO Ekholm’s note – Times of India

Ericsson reports fourth quarter and full-year results 2022, CEO Ekholm's note - Times of India

2023-01-23 23:16:20

“With our fourth quarter result we are on track to deliver on our long-term EBITA target of 15-18% by 2024. We remain fully committed to our strategic ambitions and have full confidence in the long term. During the quarter, we made measurable progress towards achieving these ambitions, against a backdrop of broad macroeconomic headwinds. As we said during our Capital Markets Day, there are near-term uncertainties, however, we are still in the early phase of global 5G rollout and widespread enterprise digitalization,” said Borje Ekholm, President and CEO of Ericsson.
Our strategy remains rooted in driving sustainable growth and maximizing value across all stakeholders. We are confident that we have the right team and strategy in place to extend our leadership in mobile networks; achieve profitability in Cloud Software and Services; execute in our high growth Enterprise segment; shape the industry landscape by becoming a platform company leveraging the 5G innovation platform; and continue our unwavering commitment to a culture of integrity.
This quarter, the company signed a multiyear IPR patent license agreement with a major licensee. This positive outcome positions it to capture further 5G patent license agreements among handset manufacturers and in new areas such as consumer electronics and IoT. It expects significant IPR revenue growth over the coming 18-24 months. Group Net Sales grew by 1% YoY, of which IPR revenues contributed with 5 percentage points. EBITA of SEK 9.3 (12.8) corresponds to a margin of 10.8% (17.9%).
Indian market
Talking of India, he said, “Our Networks business grew in India on the back of significant market share gains. As anticipated, the growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America. Gross margin was 44.6% (46.4%), negatively impacted by this business mix shift including a higher share of services sales from large network rollout projects. The IPR patent license agreement had positive margin impact.”
“During the quarter, we were able to largely offset the impact of high inflation with commercial activities, including product substitution. We continue to invest in technology to enhance performance and cost leadership, expand our global footprint and improve productivity and capital efficiency across the supply chain,” he added.
“Our Enterprise strategy is underpinned by two pillars: First, our Enterprise Wireless Solutions business, focused on capturing the multi-billion-dollar enterprise market opportunity for 5G optimized networking and security solutions. Second, through the Global Communication Platform business, we will enable new ways of monetizing 5G by transforming how network features such as speed and latency are globally exposed, consumed and paid for. Enterprise is a growth engine for the company, and we continue to fine-tune our portfolio to maximize profitability. To this end, we announced the divestment of our loss-making IoT business in Q4,” he added.

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