Q2 2024 Telefonaktiebolaget LM Ericsson Earnings Call Transcript
Key Points
- Gross margin for the group expanded to 43.9%, supported by proactive actions and a competitive portfolio.
- New 5G licensing agreement positively impacted financial performance, contributing to the IPR revenue target of SEK12 billion to SEK13 billion for 2024.
- North America returned to growth for the first time since 2022, driven by the end of inventory adjustments and increased network investments by larger customers.
- Adjusted EBITA increased to SEK4.1 billion in the quarter with a margin of 6.8%, showing resilience despite market challenges.
- Free cash flow improved significantly to SEK7.6 billion before M&A, driven by better working capital management and reduced inventory levels.
- Organic sales declined by 7% in the quarter, primarily driven by a slowdown in the networks segment.
- Sales in Europe and Latin America decreased by 3%, with increased competition from Chinese vendors noted.
- Sales in Southeast Asia, Oceania, and India decreased by 44%, following a normalization in India after last year's rapid 5G rollout.
- Vonage impairment charges significantly distorted reported OpEx, with an increase of SEK1.2 billion year on year.
- Overall market conditions remain challenging, with customers being cautious with their investments, impacting sales outside North America.
Hello, everyone, and welcome to today's presentation of Ericsson's second-quarter 2024 results. Today, Börje Ekholm, our President and CEO, joins us by video; and Lars Sandström, Chief Financial Officer, is here in the studio with me.
As usual, we'll have a short presentation followed by Q&A. And then in order to ask a question, you'll need to join the conference by phone. Details can be found in today's earnings release and on the Investor Relations website.
Please be advised that today's call is being recorded and that today's presentation may include forward-looking statements. These statements are based on our current expectations and certain planning assumptions, which are subject to risks and uncertainties. The actual results may differ materially due to factors mentioned in today's press release and discussed in the conference call. We encourage you to read about these risks and uncertainties in our earnings report as well as in our annual report.
I'll now hand the call over to Börje and
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
