Sony Ericsson reports fourth quarter and full year 2010 results
(Thomson Reuters ONE) -
Highlights:
* Four consecutive quarters of profitability during 2010
* Improvement of Euro 1.1 billion of income before taxes, excluding
restructuring charges, for the full year
* Over 9 million Android-based Xperia(TM) phones shipped since launch
The consolidated financial summary for Sony Ericsson Mobile Communications AB
(Sony Ericsson) for the fourth quarter and full year ended December 31, 2010 is
as follows:
Q4 2009 Q3 2010 Q4 2010 FY 2009 FY 2010
Number of units shipped (million) 14.6 10.4 11.2 57.1 43.1
Sales (Euro m.) 1,750 1,603 1,528 6,788 6,294
Gross margin (%) 23% 30% 30% 15% 29%
Operating income (Euro m.) -181 63 39 -1,018 159
Operating margin (%) -10% 4% 3% -15% 3%
Restructuring charges (Euro m.) -150 -4 -3 -164 -42
Operating income excl. -32 67 43 -854 202
restructuring
charges (Euro m.)
Operating margin excl. -2% 4% 3% -13% 3%
restructuring
charges (%)
Income before taxes (IBT) (Euro m.) -190 62 35 -1,043 147
IBT excl. restructuring charges -40 66 39 -878 189
(Euro m.)
Net income (Euro m.) -167 49 8 -836 90
Average selling price (Euro) 120 154 136 119 146
Bert Nordberg, President & CEO of Sony Ericsson commented, "2010 was a
turnaround year for Sony Ericsson. Our four consecutive quarters of profit
reflect the success of our shift towards an Android-based smartphone portfolio.
We will celebrate the 10th anniversary of the creation of Sony Ericsson in
2011, and as shown by the recently announced Xperia(TM) arc, we will continue to
focus on delivering the most entertaining smartphones worldwide."
Income before taxes, excluding restructuring charges, was Euro 189 million for
the full year 2010, compared with a loss of Euro 878 million in 2009. The
improvement of approximately Euro 1.1 billion was driven by the success of a
streamlined product portfolio focused on higher-end smartphones and an improved
cost structure. Sales for the full year 2010 were Euro 6,294 million, a decrease
of 7% from 2009, while gross margin improved from 15% in 2009 to 29%, in 2010.
During 2010 Sony Ericsson completed its company-wide transformation programme,
improving its cost of sales ratio, reducing its global workforce by
approximately 4,000 people in total, consolidating its facilities worldwide and
decreasing annual operating expenses by more than Euro 880 million. The total
restructuring charges for the transformation programme were Euro 381 million.
Units shipped during the fourth quarter were 11.2 million, a year-on-year
decrease of 23%, consistent with the streamlining of the portfolio to focus on
higher-end smartphones. The sequential increase of 8%, related to seasonal
factors, was somewhat constrained by a lack of new product launches during the
quarter. Average selling price (ASP) for the quarter was Euro 136, a 13%
increase year-on-year. ASP decreased 12% sequentially, mainly due to price
erosion, foreign exchange and product mix. Sales for the quarter were Euro
1,528 million, a decrease of 13% year-on-year and a decrease of 5% sequentially.
The gross margin for the fourth quarter was 30%, an increase of 7 percentage
points year-on-year and essentially flat sequentially, including the benefit of
some one-time items, relating to certain royalty matters and warranty estimates.
Income before taxes for the fourth quarter, excluding restructuring charges, was
a profit of Euro 39 million, an increase of Euro 79 million year-on-year and a
decrease of Euro 27 million sequentially, mainly due to lower sales.
Sony Ericsson's net cash position as of December 31, 2010 was Euro 375 million.
The negative cash flow from operating activities for the quarter was Euro 128
million, mainly due to increases in inventory due to seasonal factors as well as
payments related to the transformation programme.
During the quarter term loan facilities of Euro 150 million matured and were
repaid in full.
Sony Ericsson estimates that the global handset market for the full year 2010
increased slightly in volume to almost 1.2 billion units. The company estimates
that the global handset market for the fourth quarter was essentially flat year-
on-year and its market share for the fourth quarter was approximately 3% in
units and approximately 5% in value. Sony Ericsson estimates that its market
share for the full year 2010 was approximately 4% in units and approximately 6%
in value.
Sony Ericsson forecasts modest growth in units in the global handset market for
2011.
The liquid identity is a registered trademark of Sony Ericsson Mobile
Communications AB. Xperia(TM) is a trademark of Sony Ericsson Mobile
Communications AB. Sony is a registered trademark of Sony Corporation. Ericsson
is a registered trademark of Telefonaktiebolaget LM Ericsson. Any rights not
expressly granted herein are reserved and subject to change without prior
notice.
EDITOR'S NOTES:
Financial statements:
Consolidated income statement
Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters
Net sales by market area by quarter
Sony Ericsson is a 50:50 joint venture by Sony and Ericsson established in
October 2001, with global corporate functions located in London and operations
in all major markets. Sony Ericsson's vision is to become the industry leader
in Communication Entertainment; where new styles of communicating through the
internet and social media, become entertainment. Sony Ericsson offers exciting
consumer experiences through phones, accessories, content and applications. For
more information please visit,www.sonyericsson.com.
- ENDS -
CONTACTS:
Ericsson investor relations
Susanne Andersson (Stockholm) +46 10 719 4631
Sony investor relations
Yoshinori Hashitani (Tokyo) +81 3 6748 2111
Yas Hasegawa (London) +44 20 7426 8696
Press / Media
Sony Ericsson global communications and PR
Aldo Liguori (London) +44 20 8762 5860
Gustaf Brusewitz (London) +44 7960 58 19 68
This press release contains forward-looking statements that involve inherent
risks and uncertainties. Sony Ericsson has identified certain important factors
that may cause actual results to differ materially from those contained in such
forward-looking statements. For a detailed description of risk factors see
Sony's and Ericsson's filings with the US Securities and Exchange Commission,
particularly each company's latest published Annual Report on Form 20-F.
Sony Ericsson
CONSOLIDATED INCOME STATEMENT
Oct-Dec Jan-Dec
---------------------- ---------------------
EUR million 2009 2010 Change 2009 2010 Change
--------------------------------------------------------- ---------------------
Net sales 1,750 1,528 -13% 6,788 6,294 -7%
Cost of sales -1,341 -1,069 -20% -5,782 -4,440 -23%
--------------- ---------------
Gross profit 409 459 12% 1,006 1,853 84%
Gross margin % 23% 30% 7% 15% 29% 14%
Research and development expenses -299 -214 -28% -1,108 -840 -24%
Selling and administrative expenses -299 -212 -29% -964 -893 -7%
--------------- ---------------
Operating expenses -599 -427 -29% -2,072 -1,732 -16%
Other operating income, net 8 7 -13% 48 38 -21%
--------------- ---------------
Operating income -181 39 -1,018 159
Operating margin % -10% 3% -15% 3%
Financial income 4 2 -50% 21 18 -14%
Financial expenses -12 -6 -50% -46 -30 -35%
--------------- ---------------
Income before taxes -190 35 -1,043 147
Taxes 36 -27 236 -48
Minority interest -12 0 -29 -9 -69%
--------------- ---------------
Net income -167 8 -836 90
Number of units shipped (million) 14.6 11.2 -23% 57.1 43.1 -25%
ASP (EUR) 120 136 13% 119 146 23%
EUR million Oct-Dec Jan-Dec
-------------------------------------------------- ---------------
Restructuring charges 2009 2010 2009 2010
-------------------------------------------------- ---------------
Cost of sales -41 2 -39 -32
Research and development expenses -72 0 -84 7
Sales and administrative expenses -37 -5 -41 -17
-------------------------------------------------- ---------------
Total -150 -3 -164 -42
Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS
2009 2010
----------------------------- ---------------------------
EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
---------------------------------------------------- ---------------------------
Net sales 1,736 1,684 1,619 1,750 1,405 1,757 1,603 1,528
Cost of sales -1,591 -1,483 -1,367 -1,341 -975 -1,266 -1,130 -1,069
----------------------------- ---------------------------
Gross profit 145 200 252 409 429 492 473 459
Gross margin % 8% 12% 16% 23% 31% 28% 30% 30%
Research and
development expenses -303 -245 -260 -299 -216 -218 -191 -214
Selling and
administrative expenses -225 -235 -205 -299 -207 -245 -228 -212
----------------------------- ---------------------------
Operating expenses -528 -480 -465 -599 -423 -463 -420 -427
Other operating income,
net 13 6 21 8 14 7 10 7
----------------------------- ---------------------------
Operating income -369 -274 -193 -181 20 36 63 39
Operating margin % -21% -16% -12% -10% 1% 2% 4% 3%
Financial income 9 6 3 4 7 2 7 2
Financial expenses -10 -15 -9 -12 -9 -7 -8 -6
----------------------------- ---------------------------
Income before taxes -370 -283 -199 -190 18 31 62 35
Taxes 84 74 42 36 6 -16 -12 -27
Minority interest -6 -4 -6 -12 -3 -4 -2 0
----------------------------- ---------------------------
Net income -293 -213 -164 -167 21 12 49 8
Number of units shipped
(million) 14.5 13.8 14.1 14.6 10.5 11.0 10.4 11.2
ASP (EUR) 120 122 114 120 134 160 154 136
EUR million 2009 2010
---------------------------------------------------- ---------------------------
Restructuring charges Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
---------------------------------------------------- ---------------------------
Cost of sales -7 9 0 -41 2 -33 -3 2
Research and
development expenses -2 -9 -1 -72 -2 -1 10 0
Sales and
administrative expenses -3 -1 -1 -37 -3 2 -11 -5
---------------------------------------------------- ---------------------------
Total -12 -1 -2 -150 -3 -32 -4 -3
Sony Ericsson
CONSOLIDATED BALANCE SHEET
Dec 31 Jun 30 Sep 30 Dec 31
EUR million 2009 2010 2010 2010
------------------------------------------------------------------------------
ASSETS
Total fixed and financial assets 779 836 813 803
Current assets
Inventories 358 467 457 460
Accounts receivable 832 1,063 986 836
Other assets 415 412 328 295
Other short-term cash investments 489 477 440 276
Cash and bank 389 562 482 329
-------- -------- -------- -------
Total current assets 2,483 2,981 2,692 2,196
------------------------------------------------------------------------------
Total assets 3,262 3,817 3,505 2,999
------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 381 510 480 532
Minority interest 47 66 62 42
-------- -------- -------- -------
Total equity 428 575 541 574
Borrowing, Non Current 0 101 100 100
Other long-term liabilities 32 40 30 32
-------- -------- -------- -------
Total long-term liabilities 32 141 130 132
Accounts payable 852 973 922 769
Borrowing, Current 258 329 284 130
Other current liabilities 1,692 1,798 1,628 1,394
-------- -------- -------- -------
Total current liabilities 2,802 3,101 2,834 2,293
------------------------------------------------------------------------------
Total shareholders' equity and liabilities 3,262 3,817 3,505 2,999
------------------------------------------------------------------------------
Net cash* 620 609 538 375
* Net cash is defined as cash and bank plus short-term cash investments less
interest-bearing liabilities.
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Oct-Dec Jan-Dec
---------------- ---------------
EUR million 2009 2010 2009 2010
------------------------------------------------------------- ---------------
OPERATING
Net income -167 8 -836 90
Adjustments to reconcile net income to cash 48 -50 135 -156
---------------- ---------------
-119 -42 -701 -65
Changes in operating net assets -97 -86 333 -183
---------------- ---------------
Cash flow from operating activities -216 -128 -368 -248
INVESTING
Investing activities -10 -18 -84 -4
---------------- ---------------
Cash flow from investing activities -10 -18 -84 -4
FINANCING
Financing activities 100 - 178 205 - 60
---------------- ---------------
Cash flow from financing activities 100 -178 205 -60
Net change in cash -126 -324 -247 -312
Cash, beginning of period 996 921 1,125 878
Translation difference in Cash 8 7 -1 38
---------------- ---------------
Cash, end of period 878 605 878 605
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS
2009 2010
----------------------- -----------------------
EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
-------------------------------------------------------- -----------------------
OPERATING
Net income -293 -213 -164 -167 21 12 49 8
Adjustments to reconcile net
income to cash 29 37 20 48 -44 4 -66 -50
----------------------- -----------------------
-263 -176 -143 -119 -23 16 -17 -42
Changes in operating net assets 321 60 49 -97 -72 13 -38 -86
----------------------- -----------------------
Cash flow from operating
activities 58 -115 -94 -216 -94 29 -54 -128
INVESTING
Investing activities -19 -13 -42 -10 27 -15 2 -18
----------------------- -----------------------
Cash flow from investing
activities -19 -13 -42 -10 27 -15 2 -18
FINANCING
Financing activities - 53 0 159 100 150 0 - 32 - 178
----------------------- -----------------------
Cash flow from financing
activities -53 0 159 100 150 0 -32 -178
Net change in cash -14 -128 22 -126 83 15 -85 -324
Cash, beginning of period 1,125 1,116 965 996 878 980 1,039 921
Translation difference in Cash 5 -23 9 8 19 45 -33 7
----------------------- -----------------------
Cash, end of period 1,116 965 996 878 980 1,039 921 605
Sony Ericsson
NET SALES BY MARKET AREA BY QUARTER
EUR million
2009 2010
------------------------- ------------------------
Isolated quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
--------------------------------------------------------------------------------
Europe, Middle East & Africa
* 977 927 875 966 711 876 837 795
Americas 200 195 232 222 201 223 222 205
Asia 559 562 512 562 493 659 544 528
--------------------------------------------------------------------------------
Total 1,736 1,684 1,619 1,750 1,405 1,757 1,603 1,528
--------------------------------------------------------------------------------
* of which Western Europe 721 678 636 678 525 668 632 569
2009 2010
------------------------- ------------------------
Sequential change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
--------------------------------------------------------------------------------
Europe, Middle East & Africa
* -40% -5% -6% 10% -26% 23% -4% -5%
Americas -69% -3% 19% -4% -9% 11% 0% -8%
Asia -12% 1% -9% 10% -12% 34% -17% -3%
--------------------------------------------------------------------------------
Total -40% -3% -4% 8% -20% 25% -9% -5%
--------------------------------------------------------------------------------
* of which Western Europe -35% -6% -6% 7% -23% 27% -5% -10%
2009 2010
------------------------- ------------------------
Year over year change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
--------------------------------------------------------------------------------
Europe, Middle East & Africa
* -35% -33% -39% -41% -27% -6% -4% -18%
Americas -59% -74% -67% -65% 1% 14% -4% -8%
Asia -23% -19% -24% -12% -12% 17% 6% -6%
--------------------------------------------------------------------------------
Total -36% -40% -42% -40% -19% 4% -1% -13%
--------------------------------------------------------------------------------
* of which Western Europe -26% -25% -33% -39% -27% -1% -1% -16%
2009 2010
------------------------- ------------------------
Year to date 0903 0906 0909 0912 1003 1006 1009 1012
--------------------------------------------------------------------------------
Europe, Middle East & Africa
* 977 1,903 2,778 3,744 711 1,587 2,424 3,219
Americas 200 395 627 850 201 424 646 851
Asia 559 1,121 1,633 2,194 493 1,152 1,695 2,224
--------------------------------------------------------------------------------
Total 1,736 3,419 5,038 6,788 1,405 3,162 4,765 6,294
--------------------------------------------------------------------------------
* of which Western Europe 721 1,400 2,036 2,714 525 1,193 1,825 2,393
2009 2010
------------------------- ------------------------
YTD year over year change
(%) 0903 0906 0909 0912 1003 1006 1009 1012
--------------------------------------------------------------------------------
Europe, Middle East & Africa
* -35% -34% -35% -37% -27% -17% -13% -14%
Americas -59% -68% -68% -67% 1% 7% 3% 0%
Asia -23% -21% -22% -20% -12% 3% 4% 1%
--------------------------------------------------------------------------------
Total -36% -38% -40% -40% -19% -8% -5% -7%
--------------------------------------------------------------------------------
* of which Western Europe -26% -25% -28% -31% -27% -15% -10% -12%
The full report (including tables) can be downloaded from the following link:
Fourth quarter and full year report 2010:
http://hugin.info/133603/R/1480920/416296.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Sony Ericsson via Thomson Reuters ONE
[HUG#1480920]
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Datum: 20.01.2011 - 08:31 Uhr
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