Wednesday, April 21, 2021

Ericsson's Q1 networks sales increased 15% YoY

Ericsson reported Q1 net sales of SEK 49.8 billion up 10% YoY despite SEK -1.6 billion lower IPR licensing revenues.

  • Networks sales increased by 15% YoY, adjusted for comparable units and currency, driven by market share gains. Networks EBIT margin excluding restructuring charges was 19.9% (16.8%). 
  • Reported net income was SEK 3.2 (2.3) billion.
  • The company reported strong global growth in 5G. There was high activity levels in all market areas, except in the Middle East and Africa. Ericsson also noted good contract award momentum in Digital Services, primarily in its cloud native 5G Core portfolio.

Börje Ekholm, President and CEO of Ericsson, states:

"Our strategy, built on increased investments in R&D for technology and cost leadership, continued to bear fruit in the first quarter of 2021. We saw organic sales[1] growth of 10%, primarily driven by market share gains in Networks. Adjusting for declining IPR revenues, organic sales[1] growth was 14%. Gross margin[2] improved to 42.9% (40.4%) YoY and margin increases in all segments more than offset lower IPR licensing revenues. Our EBIT margin[2] increased to 10.7% despite significant investments in our business and headwind from currency. We are well positioned to take advantage of the continued market momentum with a competitive 5G product portfolio and cost structure."