SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

October 14, 2011

 

 

LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

 

 

Torshamnsgatan 23, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F   x            Form 40-F  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨            No  x

 

 

 

Announcement of LM Ericsson Telephone Company, dated October 14, 2011 regarding “Sony Ericsson reports third quarter 2011 results”

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: October 14, 2011

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PRESS RELEASE		OCTOBER 14, 2011

Sony Ericsson reports third quarter 2011 results

Highlights:

 

•

Income before taxes was Euro 31 million

 

•

33 percent increase in sales quarter-on-quarter

 

•

Smartphones account for more than 80 percent of total sales

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the third quarter ended September 30, 2011 is as follows:

 

		Q3 2010				Q2 2011				Q3 2011
Number of units shipped (million)			10.4				7.6				9.5
Average selling price (Euro)			154				156				166
Sales (Euro m.)			1,603				1,193				1,586
Gross margin (%)			30	%			31	%			27	%
Operating income (Euro m.)			63				-37				38
Operating margin (%)			4	%			-3	%			2	%
Restructuring charges (Euro m.)			4				—				—
Operating income excl. restructuring charges (Euro m.)			67				-37				38
Operating margin excl. restructuring charges (%)			4	%			-3	%			2	%
Income before taxes (IBT) (Euro m.)			62				-42				31
IBT excl. restructuring charges (Euro m.)			66				-42				31
Net income (Euro m.)			49				-50				0

Bert Nordberg, President and CEO of Sony Ericsson commented, “We delivered a solid 73 million Euro improvement in income before taxes as we rebounded from the previous quarter with a 33 percent increase in sales. Android-based Xperia^™ smartphone sales now account for more than 80 percent of sales and we have shipped 22 million Xperia smartphones to date. We will continue to invest in the smartphone market, shifting the entire portfolio to smartphones during 2012.”

Units shipped during the quarter were 9.5 million, a 9% decrease year-on-year due to a decline in feature phone shipments, partially offset by an increase in smartphone shipments. The 25% quarter-on-quarter increase was due to the higher volume of smartphones shipped.

Average selling price (ASP) for the quarter was Euro 166, up 8% year-on-year and 6% sequentially. The year-on-year increase was due to the shift to smartphones and geographic mix despite a negative effect from foreign exchange rates. The sequential increase was due to product and geographic mix.

Sales for the quarter were approximately Euro 1.6 billion and essentially flat year-on-year.

The gross margin percentage for the quarter was 27%, a decrease of 3 percentage points year-on-year and 4 percentage points from the previous quarter. The year-on-year decrease in margin is attributed to product and geographic mix. The sequential decrease in margin was due to inventory-related adjustments and product and geographic mix.

Income before taxes for the quarter was Euro 31 million, compared to income before taxes of Euro

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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62 million for the same quarter in the previous year. Loss before taxes for the previous quarter was Euro 42 million. The sequential improvement was reflective of higher sales and lower operating expenses, while the year-on-year decline was due to lower gross margin percentage offset by lower operating expenses.

Net income during the quarter improved by Euro 50 million sequentially, while net income decreased by Euro 49 million year-on-year. Income taxes recorded during the quarter reflect the distribution of profits and losses between various jurisdictions and tax adjustments. Minority interest reflects higher net income at a majority-owned joint venture company.

Cash flow from operating activities during the quarter was Euro 53 million. External borrowings of Euro 51 million were repaid during the quarter, resulting in total borrowings of Euro 718 million at the end of the quarter. Total cash balances at September 30, 2011 amounted to Euro 466 million.

Sony Ericsson estimates that its share of the global Android-based smartphone market during the quarter was approximately 12% in volume and 11% in value.

Sony Ericsson maintains its forecast for modest industry growth in total units in the global handset market for 2011.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Xperia^™ 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

About Sony Ericsson

Sony Ericsson celebrates its 10th year as a joint venture between Sony Corporation and Ericsson in October 2011. Over the years Sony Ericsson has brought together the best communication technologies with superior entertainment user experiences to create its Xperia^™ line of the ‘most entertaining smartphones’ in the mobile handset industry. With its global corporate functions in London, Sony Ericsson has sales and marketing operations in all major regions of the world, as well as manufacturing operations in China, and product development sites in China, Japan, Sweden and Silicon Valley, California. For more information, please visit: www.sonyericsson.com/press.

– ENDS –

CONTACTS:

Ericsson investor relations

Stefan Jelvin (Stockholm) +46 10 714 2039

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

Cathy Davies (London) +44 208 762 5879

Holly Rossetti (London) + 44 208 762 5851

Gustaf Brusewitz (London) +44 208 762 5805

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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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		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Jul-Sep												Jan-Sep
EUR million		2010				2011				Change				2010				2011				Change
Net sales			1,603				1,586				-1	%			4,765				3,924				-18	%
Cost of sales			-1,130				-1,159				3	%			-3,371				-2,750				-18	%
Gross profit			473				427				-10	%			1,394				1,174				-16	%
Gross margin %			30	%			27	%			-3	pp			29	%			30	%			1	pp
Research and development expenses			-179				-190				6	%			-555				-547				-1	%
Selling and administrative expenses			-241				-207				-14	%			-750				-630				-16	%
Operating expenses			-420				-397				-5	%			-1,305				-1,177				-10	%
Other operating income, net			10				8				-20	%			31				24				-23	%
Operating income			63				38				-40	%			120				21				-83	%
Operating margin %			4	%			2	%			-2	pp			3	%			1	%			-2	pp
Financial income			7				7				0	%			16				15				-6	%
Financial expenses			-8				-14				75	%			-24				-32				33	%
Income before taxes			62				31				-50	%			112				4				-96	%
Taxes			-12				-17				42	%			-21				-26				24	%
Minority interest			-2				-14				600	%			-8				-18				125	%
Net income			49				0				-100	%			82				-40
Number of units shipped (million)			10.4				9.5				-9	%			31.9				25.3				-21	%
ASP (EUR)			154				166				8	%			150				155				3	%
EUR million		Jul-Sep												Jan-Sep
Restructuring charges		2010				2011								2010				2011
Cost of sales			-3				—								-34				—
Research and development expenses			5				—								2				—
Selling and administrative expenses			-6				—								-7				—
Total			-4				—								-39				—

 

*	Operating expenses in 2010 have been restated to reflect certain organizational changes.

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

---

Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

 

		2010																2011
EUR million		Q1				Q2				Q3				Q4				Q1				Q2				Q3
Net sales			1,405				1,757				1,603				1,528				1,145				1,193				1,586
Cost of sales			-975				-1,266				-1,130				-1,069				-763				-828				-1,159
Gross profit			429				492				473				459				382				365				427
Gross margin %			31	%			28	%			30	%			30	%			33	%			31	%			27	%
Research and development expenses			-185				-191				-179				-191				-173				-184				-190
Selling and administrative expenses			-238				-272				-241				-236				-199				-224				-207
Operating expenses			-423				-463				-420				-427				-372				-408				-397
Other operating income, net			14				7				10				7				10				6				8
Operating income			20				36				63				39				19				-37				38
Operating margin %			1	%			2	%			4	%			3	%			2	%			-3	%			2	%
Financial income			7				2				7				2				3				5				7
Financial expenses			-9				-7				-8				-6				-8				-10				-14
Income before taxes			18				31				62				35				15				-42				31
Taxes			6				-16				-12				-27				-5				-3				-17
Minority interest			-3				-4				-2				0				1				-5				-14
Net income			21				12				49				8				11				-50				0
Number of units shipped (million)			10.5				11.0				10.4				11.2				8.1				7.6				9.5
ASP (EUR)			134				160				154				136				141				156				166
EUR million		2010																2011
Restructuring charges		Q1				Q2				Q3				Q4				Q1				Q2				Q3
Cost of sales			2				-33				-3				2				—				—				—
Research and development expenses			-2				-1				5				0				—				—				—
Selling and administrative expenses			-3				2				-6				-5				—				—				—
Total			-3				-32				-4				-3				—				—				—

 

*	Operating expenses in 2010 have been restated to reflect certain organizational changes.

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

		Sep 30				Dec 31				Jun 30				Sep 30
EUR million		2010				2010				2011				2011
ASSETS
Total fixed and financial assets			813				803				819				890
Current assets
Inventories			457				460				570				656
Accounts receivable			986				836				872				1,090
Other assets			328				295				330				408
Other short-term cash investments			440				276				329				301
Cash and bank			482				329				188				165
Total current assets			2,692				2,196				2,289				2,620
Total assets			3,505				2,999				3,108				3,510
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity			480				532				451				507
Minority interest			62				42				43				60
Total equity			541				574				494				567
Borrowing, Non Current			100				100				0				0
Other long-term liabilities			30				32				31				40
Total long-term liabilities			130				132				31				40
Accounts payable			922				769				716				1,050
Borrowing, Current			284				130				769				718
Other current liabilities			1,628				1,394				1,098				1,135
Total current liabilities			2,834				2,293				2,583				2,903
Total shareholders’ equity and liabilities			3,505				2,999				3,108				3,510
Net cash*			538				375				-252				-252

 

*	Net cash is defined as cash and bank deposit plus short-term cash investments less interest-bearing liabilities.

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Jul-Sep								Jan-Sep
EUR million		2010				2011				2010				2011
OPERATING
Net income			49				0				82				-40
Adjustments to reconcile net income to cash			-66				27				-105				-139
			-17				27				-23				-179
Changes in operating net assets			-38				26				-96				-345
Cash flow from operating activities			-54				53				-119				-524
INVESTING
Investing activities			2				-58				14				-94
Cash flow from investing activities			2				-58				14				-94
FINANCING
Financing activities			-32				-56				118				485
Cash flow from financing activities			-32				-56				118				485
Net change in cash			-85				-61				12				-133
Cash, beginning of period			1,039				516				878				605
Translation difference in Cash			-33				11				31				-6
Cash, end of period			921				466				921				466

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

		2010																2011
EUR million		Q1				Q2				Q3				Q4				Q1				Q2				Q3
OPERATING
Net income			21				12				49				8				11				-50				0
Adjustments to reconcile net income to cash			-44				4				-66				-50				-137				-29				27
			-23				16				-17				-42				-127				-79				27
Changes in operating net assets			-72				13				-38				-86				-226				-145				26
Cash flow from operating activities			-94				29				-54				-128				-353				-224				53
INVESTING
Investing activities			27				-15				2				-18				-14				-21				-58
Cash flow from investing activities			27				-15				2				-18				-14				-21				-58
FINANCING
Financing activities			150				0				-32				-178				375				165				-56
Cash flow from financing activities			150				0				-32				-178				375				165				-56
Net change in cash			83				15				-85				-324				8				-80				-61
Cash, beginning of period			878				980				1,039				921				605				599				516
Translation difference in Cash			19				45				-33				7				-14				-3				11
Cash, end of period			980				1,039				921				605				599				516				466

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

 

EUR million		2010																2011
Isolated quarters		Q1				Q2				Q3				Q4				Q1				Q2				Q3
Europe, Middle East & Africa *			711				876				837				795				485				435				480
Americas			201				223				222				205				151				193				121
Asia			493				659				544				528				509				565				985
Total			1,405				1,757				1,603				1,528				1,145				1,193				1,586
* of which Western Europe			525				668				632				569				307				323				313
		2010																2011
Sequential change (%)		Q1				Q2				Q3				Q4				Q1				Q2				Q3
Europe, Middle East & Africa *			-26	%			23	%			-4	%			-5	%			-39	%			-10	%			10	%
Americas			-9	%			11	%			0	%			-8	%			-26	%			28	%			-37	%
Asia			-12	%			34	%			-17	%			-3	%			-4	%			11	%			74	%
Total			-20	%			25	%			-9	%			-5	%			-25	%			4	%			33	%
* of which Western Europe			-23	%			27	%			-5	%			-10	%			-46	%			5	%			-3	%
		2010																2011
Year over year change (%)		Q1				Q2				Q3				Q4				Q1				Q2				Q3
Europe, Middle East & Africa *			-27	%			-6	%			-4	%			-18	%			-32	%			-50	%			-43	%
Americas			1	%			14	%			-4	%			-8	%			-25	%			-13	%			-45	%
Asia			-12	%			17	%			6	%			-6	%			3	%			-14	%			81	%
Total			-19	%			4	%			-1	%			-13	%			-19	%			-32	%			-1	%
* of which Western Europe			-27	%			-1	%			-1	%			-16	%			-42	%			-52	%			-50	%
		2010																2011
Year to date		1003				1006				1009				1012				1103				1106				1109
Europe, Middle East & Africa *			711				1,587				2,424				3,219				485				919				1,399
Americas			201				424				646				851				151				345				466
Asia			493				1,152				1,695				2,224				509				1,075				2,060
Total			1,405				3,162				4,765				6,294				1,145				2,339				3,925
* of which Western Europe			525				1,193				1,825				2,393				307				630				943
		2010																2011
YTD year over year change (%)		1003				1006				1009				1012				1103				1106				1109
Europe, Middle East & Africa *			-27	%			-17	%			-13	%			-14	%			-32	%			-42	%			-42	%
Americas			1	%			7	%			3	%			0	%			-25	%			-19	%			-28	%
Asia			-12	%			3	%			4	%			1	%			3	%			-7	%			22	%
Total			-19	%			-8	%			-5	%			-7	%			-19	%			-26	%			-18	%
* of which Western Europe			-27	%			-15	%			-10	%			-12	%			-42	%			-47	%			-48	%

 

Sony Ericsson		Sony Ericsson House
Mobile Communications		202 Hammersmith Road		T: +44 (0)20 8762 5800
Management Limited		London W6 7DN, United Kingdom		www.sonyericsson.com

VAT Number GB781457994. Registered in England Number 4257114