ERIXF Telefon AB LM Ericsson Sweden (PK)

Amounts marked with an ‘*’ in this document represent sales growth adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations, also named organic sales growth. These numbers present performance on a comparable basis to improve the comparability of results between periods. Organic sales growth figures are non-IFRS measures. ‘Adjusted’ metrics are adjusted to exclude restructuring charges and are non-IFRS measures. This is a change in nomenclature only. See ‘Financial statements and other information’ for Alternative performance measures.

Fourth quarter comments

Net sales

Sales increased by 2%* YoY. Networks sales grew by 5%* with growth in market areas North America and Europe and Latin America, partly offset by lower customer investment levels in other market areas. Sales in Cloud Software and Services were stable*, with growth in software sales offset by declines in other areas. Sales in segment Enterprise declined by -7%* due to lower sales in Global Communications Platform, reflecting the decision to focus on more profitable market segments and to reduce activities in some countries.

Reported Group sales increased by 1% to SEK 72.9 (71.9) b. with currency negatively impacting sales by SEK -0.7 b. YoY. Networks sales grew by 4% to SEK 46.8 b., despite a currency impact of SEK -0.5 b. Cloud Software and Services sales declined by -1% to SEK 19.5 b., Enterprise sales declined by -9% to SEK 6.1 b. and sales in segment Other declined by -9% to SEK 0.6 b.

A new 5G patent licensing agreement was signed in the quarter and IPR licensing revenues increased to SEK 3.5 (2.7) b., part of which related to retroactive revenue for unlicensed periods. 82% of IPR licensing revenues are reported in segment Networks, with the remainder in Cloud Software and Services.

Gross income and margin

Adjusted gross margin increased to 46.3% (41.1%), with improvements in all segments. The increase was driven primarily by Networks, as a result of a favorable market mix and supply chain efficiency. Gross margin in Cloud Software and Services increased, driven by improved delivery performance and higher share of software sales. In Enterprise the gross margin benefited from cost actions and the prioritization of profitable market segments. In addition, gross margin was supported by higher IPR licensing revenues.

Adjusted gross income increased to SEK 33.7 (29.6) b., supported by sales growth in Networks, efficiency and cost actions and a favorable market mix. Enterprise gross income increased despite a sales decline, reflecting the focus on more profitable market segments.

Reported gross income increased to SEK 32.7 (28.6) b., with a gross margin of 44.9% (39.8%). Gross margin was impacted by SEK -1.0 (-1.0) b. of restructuring charges.

Research and development (R&D) expenses

R&D expenses increased to SEK -13.9 (-13.0) b., including restructuring charges of SEK -0.4 (-0.5) b. Excluding restructuring charges, R&D expenses increased by SEK -1.0 b. YoY, primarily due to higher variable incentive accruals in Q4 2024, reflecting a bonus outcome above target level in 2024, whereas the outcome was below target in 2023.

Selling and administrative (SG&A) expenses

SG&A expenses increased to SEK -10.5 (-9.9) b., including restructuring charges of SEK -0.2 (-0.1) b., and a SEK 0.4 b. benefit from lower amortization following the impairment of intangible assets in Q2 2024. The SG&A expenses increased due to higher variable incentive accruals, reflecting a bonus outcome above target level in 2024, whereas the outcome was below target in 2023. Investments also increased in Enterprise to improve operational effectiveness.

Other operating income and expenses

Other operating income and expenses were SEK -0.1 (-0.1) b.

Restructuring charges

Restructuring charges were SEK -1.6 (-1.5) b. mainly related to redundancy activities, including actions to right-size operations to align with a lower level of customer demand in some markets as well as actions to improve efficiency and to reduce certain activities. Gross income was impacted by SEK -1.0 (-1.0) b. of restructuring

charges, while operating expenses included SEK -0.6 (-0.6) b. of restructuring charges.

EBITA

Adjusted EBITA increased to SEK 10.2 (8.2) b., as higher gross income was partly offset by increased operating expenses, mainly due to higher variable incentive accruals. Adjusted EBITA margin was 14.1% (11.4%).

EBITA increased to SEK 8.6 (6.7) b. corresponding to an EBITA margin of 11.8% (9.3%).

EBIT

Adjusted EBIT increased to SEK 9.6 (7.4) b. Adjusted EBIT margin was 13.1% (10.3%). Amortization and impairment of acquisition-related intangible assets impacted EBIT by SEK -0.7 (-0.8) b.

Reported EBIT increased to SEK 8.0 (5.8) b. with an EBIT margin of 10.9% (8.1%).

Financial income and expenses, net

Financial income and expenses were SEK -0.4 (-0.9) b. Financial net improved as a result of a higher net cash position. The currency hedge effect was SEK 0.0 (-0.2) b.

Income tax

Taxes were SEK -2.7 (-1.5) b.

Net income

Net income increased to SEK 4.9 (3.4) b. Diluted EPS increased to SEK 1.44 (1.02).

Full-year comments

Net sales

Sales declined by -5%* YoY. Sales declined by -6%* in Networks and by -1%* in Cloud Software and Services, while sales in Enterprise declined by -2%*. Sales increased by 24%* in market area North America but were materially lower in market area South East Asia, Oceania and India, as customer investment levels in India have normalized after a record year in 2023. Sales also declined organically in the other market areas.

Reported Group sales decreased by -6% YoY to SEK 247.9 (263.4) b. with a negative currency impact of SEK -3.3 b. Sales in Networks declined by -8% to SEK 158.2 b., sales in Cloud Software and Services declined by -2% to SEK 62.6 b. and sales in Enterprise declined by -3% to SEK 24.9 b. Sales in segment Other declined by -14% to SEK 2.2 b. IPR licensing revenues increased to SEK 14.0 (11.1) b.

The share of hardware in the sales mix was 38% (38%), software 23% (22%) and services 39% (40%).

Gross income and margin

Adjusted gross income increased to SEK 111.4 (104.4) b. while adjusted gross margin increased to 44.9% (39.6%). The improvement in gross margin was driven by a more favorable market mix, cost-reduction initiatives, higher IPR licensing revenues, and the decision to focus on more profitable market segments in Enterprise.

Reported gross income increased to SEK 109.4 (101.6) b., with a gross margin of 44.1% (38.6%).

Research and development (R&D) expenses

R&D expenses increased to SEK -53.5 (-50.7) b., including restructuring charges of SEK -2.1 (-2.4) b. Excluding restructuring charges, R&D expenses increased by SEK -3.2 b. YoY, including a SEK -1.4 b. impact relating to the impairment of intangible assets, as well as a SEK -0.7 b. impact from a lower rate of capitalization of

development expenses in Enterprise. Excluding these items, the benefit from cost actions offset salary increases, and partly offset higher variable incentive accruals. The higher incentive accruals resulted from a bonus outcome above target level in 2024, whereas the outcome was below target in 2023.

Selling and administrative (SG&A) expenses

SG&A expenses increased to SEK -51.7 (-39.3) b., including a SEK -12.6 b. impact relating to the impairment of intangible assets in the year, restructuring charges of SEK -0.8 (-1.3) b., and a SEK 0.4 b. benefit from lower amortization following the impairment of intangible assets. Excluding these items, SG&A expenses increased by SEK -0.6 b. primarily reflecting investments in segment Enterprise to improve operational effectiveness, as well as higher variable incentive accruals, with salary increases offset by cost efficiency actions. The higher incentive accruals resulted from a bonus outcome above target level in 2024, whereas the outcome was below target in 2023.

Other operating income and expenses

Other operating income and expenses were SEK 0.6 (-31.9) b., impacted by non-cash impairment charges of SEK -1.3 (-31.9) b. mainly related to the Vonage acquisition, and a one-time gain of SEK 1.9 b. reported in Q1 2024.

Restructuring charges

Restructuring charges were SEK -5.0 (-6.5) b. mainly related to redundancy activities, including actions to right-size operations to align with a lower level of customer demand in some markets as well as actions to improve efficiency. Gross income included SEK -2.0 (-2.8) b. of restructuring charges, while operating expenses included SEK -3.0 (-3.7) b. of restructuring charges.

EBITA

Adjusted EBITA increased to SEK 27.2 (21.4) b., as higher gross income was partly offset by increased operating expenses. The adjusted EBITA margin was 11.0% (8.1%).

EBITA increased to SEK 22.1 (14.9) b. corresponding to an EBITA margin of 8.9% (5.7%).

EBIT

Adjusted EBIT increased to SEK 9.3 (-13.8) b. with a margin of 3.8% (-5.2%) including a SEK -15.3 (-31.9) b. non-cash impairment charge mainly attributed to the Vonage acquisition. The amortization of acquisition-related intangible assets was SEK -2.5 (-3.3) b. Reported EBIT (loss) increased to SEK 4.3 (-20.3) b. with an EBIT margin of 1.7% (-7.7%).

Financial income and expenses, net

Financial income and expenses were SEK -1.7 (-3.0) b., benefiting from a higher net cash position. The currency hedge effect was SEK 0.1 (-0.2) b. The USD strengthened against the SEK between December 31, 2023 (SEK/USD rate 10.01) and December 31, 2024 (SEK/USD rate 10.99).

Income tax

Taxes were SEK -2.2 (-2.8) b. The effective tax rate excluding impairment charges, mainly goodwill and intangible assets related to Vonage, was 28% for 2024. The effective tax rate for 2023 was 32%, excluding the impairment of goodwill related to Vonage.

Net income

Net income increased to SEK 0.4 (-26.1) b. Diluted EPS increased to SEK 0.01 (-7.94).

Employees

The number of employees on December 31, 2024, was 94,236 compared with 99,952 on December 31, 2023.

Fourth quarter comments

Market Area North America

Sales increased by 54%* YoY. Networks sales increased by 70%*, benefiting from contract wins, increased network investments by some large customers, and strong year-end software demand. Cloud Software and Services sales increased by 11%* reflecting timing of project deliverables. Reported sales increased by 53% YoY.

Market Area Europe and Latin America

Sales increased by 2%* YoY. Sales in Europe increased, despite a challenging market environment, benefiting from market share gains and strong deliveries. In Latin America, sales decreased due to continued intense competition and lower customer network investments. Reported sales increased by 1% YoY. In the quarter, Europe’s first contract for high-performing programmable network integration was signed with MasOrange.

Market Area South East Asia, Oceania and India

Sales decreased by -28%* YoY. Networks sales declined primarily due to lower customer investment levels in India after a record 2023. Cloud Software and Services sales declined, reflecting project deliverables in the prior year and the descoping of a managed services contract. Reported sales declined by -28% YoY. In the quarter, a multi-year contract extension for 4G and 5G RAN was announced with Bharti Airtel in India and a majority share of nationwide 5G deployment for VNPT in Vietnam was awarded.

Market Area North East Asia

Sales declined by -22%* YoY. Networks sales declined due to reduced customer investments in some 5G frontrunner markets. Cloud Software and Services sales declined due to timing of project deliverables. Reported sales declined by -22% YoY.

Market Area Middle East and Africa

Sales declined by -18%* YoY. Networks sales declined in the Middle East, as investment levels moderated following recent 5G build-out, and in Africa as macroeconomic headwinds continued. Cloud Software and Services sales declined, primarily due to timing of project deliverables. Reported sales decreased by -19% YoY.

Market Area Other

Market area Other primarily includes IPR licensing revenues and almost all sales in segment Enterprise. Sales increased by 3%* YoY driven by IPR licensing revenues, partly offset by the decline in Enterprise sales. Reported sales increased by 1% YoY.

IPR

A patent licensing agreement renewal was signed in the quarter and IPR licensing revenues increased to SEK 3.5 (2.7) b., part of which related to retroactive revenue for unlicensed periods.

Full-year comments

Market Area North America

Sales increased by 24%* YoY with Networks sales increasing by 31%* as a result of contract wins and selective network investments by some large customers. Cloud Software and Services sales increased by 2%*. Reported sales increased by 23% YoY.

Market Area Europe and Latin America

Sales decreased by -2%* YoY. Sales in Europe were stable with lower customer capex spend, offset by strong customer deliveries and market share gains. Sales in Latin America declined due to increased price competition and lower customer network investments. Reported sales decreased by -2% YoY.

Market Area South East Asia, Oceania and India

Sales decreased by -38%* YoY, primarily reflecting more normalized Network investment levels in India, after a record year in 2023. Sales in South East Asia declined reflecting lower customer investment levels due to market consolidation and macroeconomic uncertainty, partly offset by recent contract wins. Cloud Software and Services sales declined, reflecting timing of project deliverables as well as descoping and exit of managed services contracts. Reported sales declined by -39% YoY.

Market Area North East Asia

Sales declined by -19%* YoY. Networks sales declined due to reduced customer investments in some 5G frontrunner markets. Cloud Software and Services sales declined, reflecting timing of project deliverables and descoping of some low-margin contracts. Reported sales declined by -22% YoY.

Market Area Middle East and Africa

Sales declined by -12%* YoY. Networks sales declined reflecting lower Middle East investments, following an accelerated 5G rollout in 2023. In Africa, macroeconomic headwinds and currency devaluations impacted customer investment levels, and price competition remained intense. Cloud Software and Services sales declined due to timing of project deliverables. Reported sales decreased by -13% YoY.

Market Area Other

Market area Other primarily includes IPR licensing revenues and almost all sales in segment Enterprise. Sales increased by 6%* YoY driven by IPR licensing revenues, partly offset by the decline in Enterprise sales. Reported sales increased by 4% YoY.

IPR

IPR licensing revenues increased to SEK 14.0 (11.1) b. in 2024 as a result of new 5G license agreements and renewals. The increase includes retroactive revenue from previously unlicensed periods. Opportunities to further grow IPR licensing revenues remain.

Fourth quarter comments

Net sales

Sales increased by 5%* YoY. Sales grew in market areas North America and Europe and Latin America but declined in the other market areas. Reported sales increased by 17% sequentially, primarily driven by growth in market areas Europe and Latin America and North East Asia, as well as continued good growth in market area North America. Reported sales increased by 4% YoY to SEK 46.8 (45.0) b.

Sales in market area North America increased by 70%* YoY, benefiting from contract wins and increased network investments by some large customers, while sales in market area Europe and Latin America grew by 3%*. Sales in the other market areas decreased materially, particularly in market area South East Asia, Oceania and India, as operator capex investments in India normalized after a record 2023. Sales were supported by increased IPR licensing revenues, benefiting from new 5G licensing agreements signed in each of Q1-Q4 2024.

Gross income and margin

Adjusted gross margin increased to 49.1% (43.2%), benefiting from a favorable market mix, as well as improved supply chain effectiveness. In addition, gross margin was supported by higher IPR licensing revenues. Adjusted gross income increased to SEK 23.0 (19.4) b.

EBITA

Adjusted EBITA increased to SEK 10.1 (7.4) b. with an adjusted EBITA margin of 21.6% (16.5%). The benefit of higher gross income and continued efficiency improvements in operating expenses was partly offset by an increase in variable incentive accruals, reflecting a bonus outcome above target level in 2024 and below target in 2023.

Full-year comments

Net sales

Sales decreased by -6%* YoY, as strong sales growth in market area North America was offset by lower sales in the other market areas, where operators largely remained cautious with their investments. Reported sales decreased by -8% YoY to SEK 158.2 (171.4) b.

Sales in market area North America increased by 31%* YoY, as a result of contract wins and selective network investments by some large customers. Sales in the other market areas decreased. Sales declined by -45%* in market area South East Asia, Oceania and India, primarily due to more normalized investment levels in India following a record year in 2023. Sales were supported by increased IPR licensing revenues, benefiting from new 5G licensing agreements signed in each of Q1-Q4 2024.

Gross income and margin

Adjusted gross margin increased to 47.2% (40.8%), as a result of a favorable market mix, continued cost-reduction initiatives and improved supply chain effectiveness. In addition, gross margin was supported by higher IPR licensing revenues. Adjusted gross income increased to SEK 74.7 (69.9) b.

EBITA

Adjusted EBITA increased to SEK 27.8 (23.9) b. with an adjusted EBITA margin of 17.5% (14.0%). Higher gross income and efficiency improvements were partly offset by an increase in variable incentive accruals, reflecting a bonus outcome above target level in 2024 and below target in 2023. Strategic R&D investments continued to build high-performing programmable networks to maintain technology leadership.

Fourth quarter comments

Net sales

Sales were stable* YoY, with sales growth in market area North America offset by sales declines in the other market areas. Reported sales increased by 30% sequentially, primarily driven by market areas Europe and Latin America and North America. Reported sales decreased by -1% YoY to SEK 19.5 (19.6) b.

Sales grew by 11%* YoY in market area North America reflecting timing of project deliverables. Sales were stable in market area Europe and Latin America but declined in the other market areas, largely reflecting the timing of project deliverables. Sales were supported by increased IPR licensing revenues, benefiting from new 5G licensing agreements signed in 2024.

Gross income and margin

Adjusted gross margin increased to 39.0% (37.3%) as a result of improved delivery performance and a higher share of software sales. Gross margin was also supported by higher IPR licensing revenues. Adjusted gross income increased to SEK 7.6 (7.3) b.

EBITA

Adjusted EBITA declined to SEK 1.8 (2.0) b. with an adjusted EBITA margin of 9.3% (10.4%). The improvement in gross income and the effect of cost-efficiency measures in operating expenses were offset by an increase in variable incentive accruals, reflecting a bonus outcome above target level in 2024.

Full-year comments

Net sales

Sales declined by -1%* YoY, with moderate growth in core networks offset by lower services sales mainly due to timing of project deliverables. In addition, managed services contracts have been descoped in some markets. Reported sales decreased by -2% YoY to SEK 62.6 (63.6) b. with services sales accounting for 64% (66%) of net sales.

Sales grew in market areas North America and Europe and Latin America as a result of timing of project deliverables, while sales declined in other market areas. Sales were supported by increased IPR licensing revenues, as a result of new 5G licensing agreements signed in 2024.

Gross income and margin

Adjusted gross margin increased to 38.2% (36.0%) benefiting from improved delivery performance, cost actions and continued focus on commercial discipline. Gross margin was also supported by higher IPR licensing revenues. Adjusted gross income increased to SEK 23.9 (22.9) b.

EBITA

Adjusted EBITA increased to SEK 2.0 (1.7) b. with an adjusted EBITA margin of 3.2% (2.7%). Higher gross income, efficiency improvements and cost actions were partly offset by an increase in variable incentive accruals, reflecting a bonus outcome above target level in 2024, as well as investments in the 5G portfolio and in resilience. Strategy execution continues, with a focus on commercial discipline, acceleration of automation, and scalable software deployment.

Fourth quarter comments

Net sales

Sales declined by -7%* YoY, with lower sales in Global Communications Platform partly offset by growth in Enterprise Wireless Solutions. Reported sales decreased by -9% YoY to SEK 6.1 (6.7) b.

Reported sales growth in Enterprise Wireless Solutions accelerated to 19% YoY, reflecting strong growth in private 5G and neutral host solutions. WWAN and Security solutions billings growth improved YoY, driven by strong customer renewals and recent product launches.

Reported sales in Global Communications Platform declined by -17% YoY, negatively impacted by the decision to focus on more profitable market segments and to reduce activities in some countries.

Gross income and margin

Adjusted gross margin increased to 54.3% (44.3%), benefiting from the decision to focus on more profitable market segments. Adjusted gross income increased to SEK 3.3 (3.0) b. reflecting higher sales and gross income in Enterprise Wireless Solutions.

EBITA (loss)

Adjusted EBITA (loss) was SEK -1.2 (-0.8) b. The decrease primarily reflects non-recurring impacts, in part related to the exit of certain businesses, as well as increased investments to improve operational effectiveness. Adjusted EBITA margin was -19.3% (-12.0%).

Full-year comments

Net sales

Sales declined by -2%* YoY, with lower sales in Global Communications Platform partly offset by growth in Enterprise Wireless Solutions. Reported sales decreased by -3% YoY to SEK 24.9 (25.7) b.

Reported sales in Enterprise Wireless Solutions grew by 17% YoY, benefiting from good demand for private 5G and neutral host solutions as well as customer contract renewals in WWAN and Security solutions. Reported sales in Global Communications Platform declined -10% YoY, negatively impacted by the decision to focus on more profitable market segments and to reduce activities in some countries, as well as by a low-margin customer contract loss in Q4 2023. The negative impact was partly offset by growth in higher value market segments, including call center solutions.

Gross income and margin

Adjusted gross margin increased to 51.5% (46.7%), supported by an improved business mix following the decision to focus on more profitable markets and products. Adjusted gross income improved to SEK 12.8 (12.0) b., benefiting from sales growth in Enterprise Wireless Solutions and the focus on more profitable market segments.

EBITA (loss)

Adjusted EBITA (loss) declined to SEK -4.0 (-3.1) b. The decrease was primarily due to increased investments to improve operational effectiveness in Global Communications Platform and a lower rate of capitalization of development expenses, partly offset by operational efficiency improvements in Enterprise Wireless Solutions and in Technologies and New Businesses. Adjusted EBITA margin was -16.0% (-12.0%).

Fourth quarter comments

Net sales

Reported sales were stable at SEK 0.6 (0.6) b., despite the divestment of the IoT business in 2023, due to increased sales in the media businesses.

Gross income and margin

Adjusted gross income was stable at SEK -0.1 (-0.1) b. Adjusted gross margin remained at -22.7% (-22.8%).

EBITA (loss)

Adjusted EBITA (loss) was SEK -0.5 (-0.4) b. primarily reflecting the accelerated recognition of losses in the media businesses and an impairment in Ericsson Ventures.

Full-year comments

Net sales

Reported sales declined to SEK 2.2 (2.5) b., primarily due to the divestment of the IoT business in 2023 and lower sales in the media businesses.

Gross income and margin

Adjusted gross income improved to SEK 0.0 (-0.4) b. mainly reflecting higher asset impairments in 2023. Adjusted gross margin increased to -1.5% (-17.7%).

EBITA (loss)

Adjusted EBITA (loss) was SEK 1.3 (-1.2) b., with the increase mainly related to a one-time gain of SEK 1.9 b. from the resolution of a commercial dispute, as well as lower operational cost due to the divestment of the IoT business in 2023.

Fourth quarter comments

Cash flow

Free cash flow before M&A was SEK 15.8 (12.5) b. benefiting from strong earnings and lower working capital. The reduction in working capital was a result of a favorable market mix, and strong collections, supported by early payments from customers, as well as further efficiency improvements in supply chain management.

Cash flow from investing activities was SEK -8.3 (-6.8) b., mainly driven by investments in interest-bearing securities following the increase in gross cash.

Cash flow from financing activities was SEK -5.4 (3.7) b. including the SEK -4.5 b. payment of the second dividend installment.

Financial position

Gross cash increased sequentially by SEK 13.7 b. to SEK 75.9 b. Ericsson has unutilized committed credit facilities of SEK 33.0 b. (USD 3.0 b.).

Net cash increased sequentially by SEK 12.3 b. to SEK 37.8 b. driven by positive free cash flow after M&A, partly offset by dividends paid.

Full-year comments

Cash flow

Free cash flow before M&A was SEK 40.0 (-1.1) b. benefiting from strong earnings and a significant reduction in working capital. The reduction in working capital was a result of a favorable market mix, following the completion of network rollouts in India and strong sales growth in market area North America. Working capital also benefited from strong collections, supported by early payments from customers, and efficient supply chain management.

Cash flow from investing activities was SEK -16.0 (-8.7) b., mainly driven by investments in interest-bearing securities following the increase in gross cash.

Cash flow from financing activities was SEK -23.9 (1.0) b. including dividends paid (SEK -9.2 b.), the repayment of a maturing EUR 500 m. bond, USD 400 m. of a liquidity revolving credit facility, and a USD 281 m. loan. This was partly offset by the disbursement of two loans of USD 184 m. and USD 108 m., respectively.

Financial position

Gross cash increased by SEK 21.2 b. to SEK 75.9 b. Ericsson had unutilized committed credit facilities of SEK 33.0 b. (USD 3.0 b.) as of December 31, 2024.

The average maturity of parent company borrowings was 3.6 years as of December 31, 2024, compared with 3.2 years as of December 31, 2023.

Net cash increased by SEK 30.0 b. to SEK 37.8 b. driven by positive free cash flow after M&A, offset by dividends paid.

Liabilities for post-employment benefits decreased in the year to SEK 24.4 b. from SEK 26.2 b. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liability for post-employment benefits would have been approximately SEK 13.9 b. (SEK 10.5 b. lower than current DBO).

Key data points

Market

Dell’Oro estimates that the global RAN equipment market will grow by 0% to +2% in 2025. North America is expected to grow by +5% to +10%, Europe to decline/grow by -5 to +5% and Mainland China to decline by -10% to -20%.

Source: Dell’Oro Mobile RAN quarterly report 3Q24, Nov 2024.

Ericsson

Net sales

Reported average seasonality, last 3 years (2022–2024), %.

Net sales may show large variations between quarters, including currency changes.

Currency exposure

Rule of thumb: A 10% appreciation/depreciation in the USD vs. SEK would have a positive/negative impact of approximately 5% on net sales.

Amortization of intangible assets

Amortization of intangible assets is expected to be around SEK -0.5 b. per quarter, of which approximately SEK -0.4 b. related to segment Enterprise.

Restructuring charges

Restructuring charges for 2025 are expected to remain at elevated levels.

Segments

Networks

Sales growth in Q1 2025 is expected to be broadly similar to 3-year average seasonality.

Adjusted gross margin in Q1 is expected to be in the range of 47%-49%.

Cloud Software and Services

Sales growth in Q1 2025 is expected to be to be broadly similar to 3-year average seasonality.

Parent Company

Income after financial items January – December 2024, was SEK 6.6 (-0.7) b.

At the end of the year, gross cash (cash, cash equivalents plus interest-bearing securities, current and non-current) amounted to SEK 58.7 (34.9) b.

There was an increase in intercompany lending of SEK 3.4 b. and a decrease in intercompany borrowing of SEK 2.0 b. in the quarter.

The Parent Company has recognized dividends from subsidiaries of SEK 13.8 (15.7) b. in the quarter.

At the end of the year, non-restricted equity amounted to SEK 22.3 (27.6) b., and total equity amounted to SEK 70.6 (75.8) b.

The holding of treasury stock on December 31, 2024, was 15,579,561 Class B shares.

Dividend, AGM, and Annual Report

Dividend proposal

The Board of Directors proposes to the Annual General Meeting a dividend to the shareholders of SEK 2.85 (2.70) per share for the financial year 2024, representing a total dividend of approximately SEK 9.5 (9.0) b. The dividend is proposed to be paid in two installments, SEK 1.43 per share with the record date March 27, 2025, and SEK 1.42 per share with the record date September 29, 2025. Should the Annual General Meeting decide in favor of the proposal, payment of the dividend is expected to be made on April 1, 2025, and on October 2, 2025. The dividend considers this year’s earnings and balance sheet structure, as well as coming years’ business plans and expected economic development.

Ericsson Annual General Meeting

The Annual General Meeting of shareholders will be held on March 25, 2025. Additional information about the Annual General Meeting of shareholders will be made available on Ericsson’s website.

Annual Report

The annual report will be made public and available on the Ericsson website www.ericsson.com.

Other information

Legal proceedings not involving governmental authorities

In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. (collectively, the “Ericsson defendants”). The lawsuit was brought by US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against the Ericsson defendants under the US Anti-Terrorism Act alleging that the Ericsson defendants made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, the Ericsson defendants filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, including a plaintiff injured in Turkey, and also named Ericsson AB (collectively with the Ericsson defendants, the “Ericsson corporate defendants”), CEO Börje Ekholm and a former employee (who has not been served with process) as additional defendants and also asserted additional allegations and claims. In March 2023, the Ericsson corporate defendants and Mr. Ekholm filed motions to dismiss the amended complaint. Plaintiffs filed their oppositions to defendants’ motions to dismiss the amended complaint in June 2023, and defendants filed reply briefs in support of their motions to dismiss in July 2023. All briefing has been submitted, and resolution of the matter is pending with the District Court. All defendants will continue to vigorously defend this matter.

In February 2024, a second civil lawsuit also alleging violations of the US Anti-Terrorism Act was filed in the United States District Court for the District of Columbia. The lawsuit was filed by the same law firm and involves substantially similar factual allegations and claims as those made in the Anti-Terrorism Act lawsuit originally filed in August 2022, and similarly names the same Ericsson corporate defendants, CEO Börje Ekholm and a former employee as defendants. The new lawsuit was brought by additional US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan, Syria, Turkey, Niger, and France from 2005 to 2021, as well as by their family members. The District Court for the District of Columbia has stayed the proceedings in this matter pending its decision on the motions to dismiss in the earlier-filed suit. The defendants will vigorously defend this matter.

Beginning on August 4, 2023, a number of civil lawsuits have been filed against Telefonaktiebolaget LM Ericsson in Solna District Court, Sweden. As of October 15, 2024, 93 claimants have filed suit, which are coordinated and financed by a UK-based litigation funder. The claimants consist of a group of non-Swedish funds and financial institutions that allegedly are or have been shareholders of the Company. Their damages claims are primarily based on alleged inadequate disclosure of the contents of the Company’s 2019 internal Iraq investigation report. Ericsson filed its statement of defense on March 15, 2024, and will continue to vigorously defend this matter.

On October 11, 2023, Ericsson commenced patent infringement proceedings against certain Lenovo entities (together “Lenovo”) in the Eastern District of North Carolina. In the course of the proceedings, Ericsson seeks declarations that Ericsson has complied with its FRAND commitments and with the ETSI IPR Policy and that Lenovo has infringed Ericsson patents. Ericsson has also commenced patent infringement proceedings against Lenovo at the United States International Trade Commission and in other jurisdictions (Brazil and Colombia). In return, Lenovo has filed lawsuits against Ericsson in the High Court of Justice in the UK, at

the Unified Patent Court, at the United States International Trade Commission, in the Eastern District of North Carolina, and has applied for an anti-suit injunction in the Eastern District of North Carolina. On February 14, 2024, the Eastern District of North Carolina denied the anti-suit injunction. Following Lenovo’s appeal, this decision was vacated and remanded to the Eastern District of North Carolina on October 24, 2024. This is a global dispute, and additional lawsuits and other legal actions may be initiated by the parties.

The Company actively manages its IPR portfolio and its need for third party licenses and is involved from time to time, in the ordinary course of business, in litigation related thereto, as plaintiff, defendant and other capacities.

In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, lawsuits, claims (including claims by third parties we have indemnified against infringement liability or provided guarantees to) and proceedings incidental to the ordinary course of business.

Legal proceedings involving governmental authorities

In February 2022, Ericsson publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period between 2011 to 2019. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. The Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization.

The Company continues to fully cooperate with the US Department of Justice (DOJ) in its investigation into matters discussed in the 2019 internal Iraq investigation report and related topics, including by providing additional documents and other information which continue to be requested by the DOJ. As additional information continues to be identified and evaluated in continued cooperation with the DOJ during its ongoing investigation, it is expected that there will not be any conclusive determinations on the outcome until the investigation is completed. The scope and duration of the investigation remains uncertain.

As part of its defense to a now settled patent infringement lawsuit filed by Ericsson in 2013 in the Delhi High Court against Indian handset company Micromax, Micromax filed a complaint against Ericsson with the Competition Commission of India. The Competition Commission of India decided to refer the case to the Director General’s Office for an in-depth investigation. The Competition Commission of India opened similar investigations against Ericsson in January 2014 based on claims made by Intex Technologies (India) Limited and, in 2015, based on a now settled claim from iBall. Ericsson has challenged Competition Commission of India’s jurisdiction in these cases before the Delhi High Court. On July 13, 2023, the Division Bench of the Delhi High Court found that in this instance the Competition Commission of India has no power to conduct the pending investigations against Ericsson. The Competition Commission of India has appealed this order to the Supreme Court of India.

In April 2019, Ericsson was informed by China’s State Administration for Market Regulations Anti-monopoly bureau that China’s State Administration for Market Regulations has initiated an investigation into Ericsson’s patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-

finding phase. The next steps include continued fact-finding and meetings with China’s State Administration for Market Regulations in order to facilitate the authority’s assessment and conclusions. In case of adverse findings, China’s State Administration for Market Regulations has the power to impose behavioral and financial remedies.

PRESS RELEASES

Risk factors

Ericsson is exposed to a number of risks in its activities. To stimulate identification and support cross-functional treatment within the Ericsson Group, risks are grouped in a number of categories, including, for example, risks relating to technology, IPR, compliance, project execution, operations, products and services, treasury and accounting, the geopolitical environment, M&A, cybersecurity and occupational health and safety. Ericsson’s risk management is embedded into strategy development and operational processes and material Group risks are regularly assessed and reviewed by executives as required by Ericsson’s Material Group Risk Protocol to ensure accountability, effectiveness, efficiency, business continuity and compliance. Risks are defined in both a short-term and long-term perspective and are related to long-term objectives and strategic direction as well as to short-term objectives. Risk factors and uncertainties of relevance to Ericsson are described in the Ericsson Annual Report 2023 and in the Annual Report on Form 20-F for the year ended December 31, 2023 (in the following, the “Annual Report 2023”), as well as in Ericsson’s quarterly reports. Updates to these risk factors and uncertainties observed by Ericsson that are deemed of short-term relevance include, but are not limited to, the following risks described below. See also the risks set out in the section titled “Forward-Looking Statements.”

Ongoing geopolitical and trade uncertainty from a range of factors may have a material adverse impact on Ericsson’s business, operations and ability to meet its targets, as well as the information and telecommunications industry as a whole.

As mentioned in the Annual Report 2023, including in the risk factor 1.1, geopolitical alliances are shifting as global tensions over trade and influence drive growing economic, technological, military, and political competition across the world, particularly between the US and China. Geopolitical tensions and ongoing conflicts such as those in the broader Middle East, Russia and Ukraine, amplify the risk of government intervention, including protectionist interventions, such as tariffs, security-related requirements, such as increased regulatory barriers, restrictions on technology transfers, telecommunications and digital infrastructure to promote national security, as well as trade restrictions, export controls and enhanced sanctions measures. Additionally, geopolitical instability increasingly leads some governments to use the private sector for political objectives, including by restricting or enabling market access based on national security interests, leveraging influence over industry standards, providing financial support to domestic companies or restricting the use of foreign equipment or technology in critical infrastructure.

There are particular uncertainties for the future bilateral trading relationship between China and a number of countries, including the United States and Sweden, as a result of the restrictions imposed on Chinese vendors or components in 5G networks. These restrictions have been adopted in many countries and have resulted and may continue to result in constraints on access to hardware and software products and components. Ericsson may be affected by any further deterioration of the relationships between these countries. In addition, the Company has business operations in China, and further changes in economic and political policies in or relating to China could have a material adverse effect on the Company’s business. In addition, the incoming US administration has indicated that it intends to impose a broad range of tariffs on imports to the US, which could have significant negative impacts throughout the information and telecommunications industry, including the Company’s international product development and global value and supply chains. Restrictions on international trade, such as tariffs and other

controls on imports or exports of goods, technology or data, could have a material adverse effect on Ericsson’s business.

Due to the strategic nature of the information and telecommunications industry, Ericsson is exposed to competitive risks from state-supported enterprises, particularly from countries with significant government-backed industries. Companies in these industries may receive financial support, favorable regulatory environments and selective enforcement of rules that enable them to operate at a scale and with a cost structure that private sector companies cannot match. They may also receive market and technology access that grants them significant competitive advantages. This dynamic can create competitive pressures, particularly in international markets where these government-supported enterprises can operate with significantly lower margins compared to private sector companies. Additionally, such state-backed entities may pursue opportunities in pursuit of strategic objectives of their government owners and supporters, with less focus on financial returns, allowing for these companies to increase their market share disproportionately.

Over the last several years there have been sustained challenges to the global free trade system, including towards the World Trade Organization dispute settlement body. Certain countries have moved away from the multilateral system and instead have imposed tariffs and other trade barriers, price or exchange controls, restrictions of imports and other government policies. Any increased prospect of government restrictions on international trade could negatively impact Ericsson’s ability to benefit from open markets and free trade and could limit Ericsson’s operations and decrease Ericsson’s profitability. Furthermore, the mandated or otherwise required localization of manufacturing and R&D or use of local suppliers or production, as well as their digital counterparts (including data localization of IT-infrastructure and restrictions on data flows), has been steadily growing, motivated by protectionism, domestic industrial policies and national security concerns. Geopolitical uncertainty has led to reduced efficiency in R&D, including restrictions on use of R&D resources, and opportunities to scale or grow with increasing logistical and administrative burdens, while polarization of the industry and fragmentation of global standards continues to develop (e.g., O-RAN). There is a risk of moves away from global value and supply chains and towards more regional or national alternatives. Governments may continue to impose conditions that require the use of local suppliers and local production or partnerships with local companies for R&D and IT-infrastructure, require the license or other transfer of intellectual property, or engage in other efforts to promote local businesses and local competitors, which could have a significant adverse impact on Ericsson’s ability to operate its global business efficiently.

Many countries, including the US and China, view technology, including telecommunications infrastructure and mobile wireless technologies, as critical infrastructure and aim to lead and influence global policy and regulations around such technologies. While Ericsson is a global company with a global presence, Ericsson may face unique challenges as a Swedish company because Sweden and Europe have historically exerted limited influence in shaping global technology policies compared to more prominent technology regulators and have not committed similar levels of investment in technology infrastructure. Neither Sweden nor the European Union have developed a common and cohesive technology agenda or technology geopolitical strategy, and where regulations in the European Union have been introduced, such regulations have focused on consumer pricing rather than promoting or protecting European-based technology or telecommunications companies.

Consequently, Ericsson remains exposed to changes in global policy dynamics that it cannot directly or indirectly influence, and which may be influenced to benefit competitors. Additionally, due to the strategic nature of the industry in which Ericsson operates, foreign countries could support or develop a national champion as an alternative to the established global vendors, such as Ericsson, in order to have further control over local communication networks and infrastructure.

There are numerous ongoing local and regional conflicts, including the ongoing military conflicts between Ukraine and Russia (which market Ericsson has exited) and in the broader Middle East. While the ultimate impact of these events is unclear, the uncertainty they create is expected to continue. These geopolitical developments, including trade or security restrictions and export controls, enhanced sanctions measures and vendor consolidation, can negatively impact global market conditions, including market share, access and position. The strategic and sensitive nature of the information and telecommunications industry also heightens exposure to cyberattacks and corporate espionage, with respect to both technology and commercial matters, resulting in an increased risk of cyber threats from state-backed and criminal threat actors, including digital attacks aimed at disrupting, damaging or infiltrating another’s critical infrastructure, network and systems. Countries and their policies have been increasingly focused on mitigating the risk of cyber espionage, geolocation and data control, and the protection of critical national infrastructure and information.

Additionally, political instability, strict requirements on localization of data, manufacturing and R&D, or use of local suppliers or production in the regions in which the Company operates may further increase the risk of possible legal or regulatory violations by Ericsson or its employees. Any violation by Ericsson or its employees could cause severe reputational harm to the Company and have a material adverse effect on Ericsson’s business operations and result in government actions and the imposition of significant financial penalties and restrictions on the Company’s ability to do business, including with certain customers, such as government bodies or those in certain regulated sectors (e.g. telecommunications).

The continually evolving global geopolitical situation has had and will continue to have consequences for the entire information and telecommunications industry, with the possibility of further industry splits, separation of global value and supply chains and separation of global standards for mobile telecommunications. These developments have also led to several countries evaluating how to ensure uninterrupted access to telecommunication network infrastructure, for example through promoting disaggregation of the Radio Access Network, although the timing and extent of this remains unclear.

All of the above may have a material and potentially lasting adverse impact on Ericsson’s international product development and global value and supply chains and necessitate a flexible and adaptive organizational setup, therefore negatively impacting its profitability and business as a whole.

Ericsson is subject to certain US, UK and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations and other regulatory requirements or conditions in other jurisdictions or imposed as a result of foreign direct investment reviews and decisions, and may be subject to heightened scrutiny by governmental authorities.

As mentioned in the Annual Report 2023, including in the risk factor 3.3, Ericsson is, from time to time, involved in legal proceedings and regulatory investigations, and is subject to certain other regulatory requirements, conditions and agreements. If any of these lawsuits or legal proceedings are determined unfavorably

against the Company or it is determined that the Company is not in compliance with any of these regulatory requirements, conditions or agreements, the Company could be required to pay substantial damages, fines and/or penalties, be subject to public scrutiny, negative reputational consequences, or become subject to additional enforcement actions, regulatory review and/or adverse decisions. Ericsson could face potential debarment from government contracting in the United States and elsewhere, reputational risk, as well as potential counterparty reluctance to continue business relationships. In addition, these ongoing matters and investigations require significant resources and costs for investigation, compliance and remediation that could lead to adverse financial and reputational consequences.

Additionally, due to the strategic nature of the industry in which Ericsson operates and its previously disclosed regulatory investigations, Ericsson is closely monitored by government authorities and may be subject to heightened scrutiny from regulators. As previously disclosed, Ericsson has resolved matters with government agencies through settlements, which increase regulatory scrutiny of its current and future compliance practices. This heightened scrutiny exposes Ericsson to an elevated risk of compliance audits, investigations and enforcement actions and any future perceived or actual non-compliance with applicable laws and regulations could result in more significant penalties, restrictions on its operations, or reputational harm that may impact its business relationships and customer trust.

In connection with the acquisition of Vonage by Ericsson, and as a condition to Committee on Foreign Investment in the United States’ (CFIUS) approval of the acquisition, Vonage, Ericsson and the US Department of Justice and the US Department of the Treasury, in their capacity as CFIUS monitoring agencies, entered into a National Security Agreement in July 2022, which imposes restrictions on access to certain types of sensitive data, equipment and systems. Vonage and Ericsson are engaged and cooperating with the CFIUS monitoring agencies in relation to ongoing compliance with the National Security Agreement restrictions, related remediation efforts to address concerns raised by the CFIUS monitoring agencies regarding such access, and the CFIUS monitoring agencies’ requests for information. The ongoing compliance efforts and related remediation have required changes to the Vonage business, including reduction and cessation of operations in certain jurisdictions. Further changes may be required which could adversely affect the Vonage business, including changes to business structure and additional compliance measures with associated costs. The CFIUS monitoring agencies review of integrations and connections of Ericsson and Vonage technologies could also increase time to market. Vonage and Ericsson continue to cooperate with the CFIUS monitoring agencies in investigating historical and ongoing compliance with the terms of the National Security Agreement. The ultimate outcome of these investigations remains uncertain. Violations of a CFIUS mitigation agreement, such as the National Security Agreement, can result in an enforcement action imposing monetary penalties or other remedies. CFIUS has increased its resources and focus on enforcement and has recently imposed major financial penalties for violations of mitigation agreements involving unauthorized access to sensitive data and failure to report such incidents promptly to CFIUS.

In February 2022, Ericsson publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period between 2011 to 2019. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. The Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization.