Ericsson Capital Markets Day 2015
(Thomson Reuters ONE) -
* Progress update on execution of strategic agenda, building on core areas and
targeted growth areas to further expand leadership position.
* Outlook on growth for 2014-2018 for the projected total addressable market
of a CAGR of 2 to 4 percent, with continued ambition to grow faster than the
market.
* Estimated market growth for targeted areas 10% CAGR, with Ericsson
outperforming market growth year to date
* Cost and efficiency program on track, with the target to achieve annual net
savings of SEK 9 billion during 2017.
Ericsson (NASDAQ:ERIC) will hold its Capital Markets Day in Stockholm today. The
company will give an update on the progress of its Networked Society strategy,
focusing on market development, growth agenda, and profitability.
Hans Vestberg, President and CEO, says: "We are continuing our journey to
transform Ericsson into a leading ICT player, building on our leadership in our
core business and extending into targeted growth areas."
The partnership with Cisco announced on November 9, targeting USD 1 billion or
more in additional sales by 2018, will be discussed by Hans Vestberg and John
Chambers, Executive Chairman, Cisco.
Hans Vestberg continues: "The partnership with Cisco is a key step forward in
our company transformation and enables us to create unique value for our
customers. Together, we will build on our longstanding technology and services
leadership to define the networks of the future and accelerate realization of
the Networked Society."
Growth agenda
Ericsson has set out a clear, long-term strategic framework to lead the ICT
industry and drive the transformations of society and industry alike through
mobility. This framework includes the following key components:
* Excel in our core business - radio, core and transmission, and
telecommunications services
* Establish leadership in targeted areas - cloud, IP networks, TV and media,
OSS and BSS, as well as in the realm of Industry & Society, addressing new
customer segments outside of the telecommunications operator domain
These targeted areas are selected based on factors including clear adjacency to
the core business, high degree of software and professional services, high
degree of recurrent revenues, and higher market growth than the core business
areas. In addition, the targeted areas are less capital-intensive than today's
core business.
For 2015, rolling four quarters, the total sales in targeted areas amounted to
SEK 45 billion, up from SEK 35 billion for the same period last year and
representing a growing share of Ericsson's total sales. Estimated market growth
for targeted areas 10% CAGR, with Ericsson outperforming market growth year to
date
Adding to the growth agenda, the newly announced Cisco partnership is expected
to generate USD 1 billion or more of additional sales by 2018. The additional
sales are expected to be accretive to operating income already 2016.
Market development
Ericsson estimates that the total network equipment market during the years
2014-2018 will show a CAGR of 1 to 3 percent; the telecom services market is
estimated to show a CAGR of 3 to 5 percent; and the market for support solutions
is forecasted to show a CAGR of 7 to 9 percent in the same period. Market growth
in targeted areas is on average estimated at CAGR 10%
Ericsson's ambition is to continue to grow faster than the projected total
addressable market CAGR of 2 to 4 percent in 2014-2018, including growing faster
than the market in targeted areas.
Profit improvement and efficiency and cost reductions
The cost and efficiency program announced in November 2014 with target of
achieving annual net savings of SEK 9 billion during 2017 is tracking according
to plan. Examples of achievements so far include discontinuation of modem
operations; the first ICT center taken into operation; announced closure of the
supply site in Katrineholm, Sweden; and headcount reductions.
The program is expected to generate approximately SEK 3.5 to 4.5 billion in
restructuring charges 2015-2017, a revision from the previously communicated
expectation of SEK 3 to 4 billion. It is estimated that half of the savings will
reduce Ericsson's operating expenses (OPEX) and the other half will impact cost
of sales (CoS).
Presenters
Hans Vestberg will be joined on stage at the Capital Markets Day by and John
Chambers, Executive Chairman, Cisco, as well as several executive leadership
team members of Ericsson including: Jan Frykhammar, CFO; Magnus Mandersson, Head
of Segment Global Services; Per Borgklint, Head of Segment Support Solutions;
Arun Bansal, Head of Business Unit Radio; Anders Lindblad, Head of Business Unit
IP and Cloud; and Rima Qureshi, Head of Strategy. In addition, Marie Fossum,
Head of Energy & Utilities and Jean-Philippe Poirault, Head of Consulting &
Systems Integration will present at today's event, which takes place at
Kistamässan in Stockholm, Sweden.
NOTES TO EDITORS
For media kits, backgrounders and high-resolution photos, please visit
www.ericsson.com/press
Ericsson is the driving force behind the Networked Society - a world leader in
communications technology and services. Our long-term relationships with every
major telecom operator in the world allow people, business and society to
fulfill their potential and create a more sustainable future.
Our services, software and infrastructure - especially in mobility, broadband
and the cloud - are enabling the telecom industry and other sectors to do better
business, increase efficiency, improve the user experience and capture new
opportunities.
With approximately 115,000 professionals and customers in 180 countries, we
combine global scale with technology and services leadership. We support
networks that connect more than 2.5 billion subscribers. Forty percent of the
world's mobile traffic is carried over Ericsson networks. And our investments in
research and development ensure that our solutions - and our customers - stay in
front.
Founded in 1876, Ericsson has its headquarters in Stockholm, Sweden. Net sales
in 2014 were SEK 228.0 billion (USD 33.1 billion). Ericsson is listed on NASDAQ
OMX stock exchange in Stockholm and the NASDAQ in New York.
www.ericsson.com
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FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations(at)ericsson.com
Ericsson Investor Relations
Phone: +46 10 719 00 00
E-mail: investor.relations(at)ericsson.com
Ericsson Forward-Looking Statement
All statements made or incorporated by reference in this release, other than
statements or characterizations of historical facts, are forward-looking
statements. These forward-looking statements are based on our current
expectations, estimates and projections about our industry, management's beliefs
and certain assumptions made by us. Forward-looking statements can often be
identified by words such as "anticipates", "expects", "intends", "plans",
"predicts", "believes", "seeks", "estimates", "may", "will", "should", "would",
"potential", "continue", and variations or negatives of these words, and
include, among others, statements regarding: (i) strategies, outlook and growth
prospects; (ii) positioning to deliver future plans and to realize potential for
future growth; (iii) liquidity and capital resources and expenditure, and our
credit ratings; (iv) growth in demand for our products and services; (v) our
joint venture activities; (vi) economic outlook and industry trends; (vii)
developments of our markets; (viii) the impact of regulatory initiatives; (ix)
research and development expenditures; (x) the strength of our competitors; (xi)
future cost savings; (xii) plans to launch new products and services; (xiii)
assessments of risks; (xiv) integration of acquired businesses; (xv) compliance
with rules and regulations and (xvi) infringements of intellectual property
rights of others. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances,
including any underlying assumptions, are forward looking statements. These
forward-looking statements speak only as of the date hereof and are based upon
the information available to us at this time. Such information is subject to
change, and we will not necessarily inform you of such changes. These statements
are not guarantees of future performance and are subject to risks, uncertainties
and assumptions that are difficult to predict. Therefore, our actual results
could differ materially and adversely from those expressed in any forward-
looking statements as a result of various factors. Important factors that may
cause such a difference for Ericsson include, but are not limited to: (i)
material adverse changes in the markets in which we operate or in global
economic conditions; (ii) increased product and price competition; (iii)
reductions in capital expenditure by network operators; (iv) the cost of
technological innovation and increased expenditure to improve quality of
service; (v) significant changes in market share for our principal products and
services; (vi) foreign exchange rate or interest rate fluctuations; and (vii)
the successful implementation of our business and operational initiatives.
CMD 2015 release_Nov 10 2015:
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