Ericsson reports fourth quarter results and full-year results 2024

STOCKHOLM, Jan. 24, 2025 /PRNewswire/ -- 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 adjusted Group 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	Q4 2023	YoY change	Q3 2024	QoQ change	Jan-Dec 2024	Jan-Dec 2023	YoY change
Net 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 measures 2 3
Adjusted 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 margin excluding 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 on www.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 webcast or please go to www.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.

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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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The following files are available for download:

https://mb.cision.com/Main/15448/4095452/3222352.pdf	Q4 full-year 2024
https://mb.cision.com/Public/15448/4095452/8d46fd1cd72a1cf8.xlsx	Q4 full-year 2024

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