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

July 16, 2010

 

 

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 July 16, 2010 regarding “Ericsson (SE) - Sony Ericsson reports second quarter 2010 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: July 16, 2010

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PRESS RELEASE		July 16, 2010

Sony Ericsson reports second quarter 2010 results

Q2 Highlights:

Income before taxes excl. restructuring charges increases to Euro 63 million

Positive cash flow generated from operating activities

ASP rises to Euro 160

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the second quarter ended June 30, 2010 is as follows:

 

		Q2 2009			Q1 2010			Q2 2010
Number of units shipped (million)		13.8			10.5			11.0
Sales (Euro m.)		1,684			1,405			1,757
Gross margin (%)		12	%		31	%		28	%
Operating income (Euro m.)		-274			20			36
Operating margin (%)		-16	%		1	%		2	%
Restructuring charges (Euro m.)		1			3			32
Operating income excl. restructuring charges (Euro m.)		-274			23			68
Operating margin excl. restructuring charges (%)		-16	%		2	%		4	%
Income before taxes (IBT) (Euro m.)		-283			18			31
IBT excl. restructuring charges (Euro m.)		-283			21			63
Net income (Euro m.)		-213			21			12
Average selling price (Euro)		122			134			160

Bert Nordberg, President, Sony Ericsson commented, “Our second quarter results show that the company continued the momentum seen in the first quarter as a result of our focus on the value market and the success of new smartphones; Xperia™ X10 and Vivaz™, launched during the first quarter. These models, along with the Xperia™ X10 mini and Xperia™ X10 mini pro which started shipping at the end of the second quarter, have been well received by operators and we are now wel positioned for long term growth.”

Sales for the quarter were Euro 1,757 million, a 25% increase sequentially and a 4% increase year-on-year. Units shipped in the quarter were 11 million, a 5% increase sequentially and a 20% decrease year-on- year due to the reduction in size of the product portfolio. Average selling price (ASP) increased 19% sequentially and 31% year-on-year to Euro 160 during the quarter due to improved product and geographical mix, as well as positive currency effects.

Income before taxes for the quarter excluding restructuring charges was a profit of Euro 63 million, illustrating the positive impact of the cost reduction programme and favourable product mix.

The transformation programme, which started in mid-2008 is now in its final stages and on target to reduce annual operating expenses by Euro 880 million by the end of the year. Since the start of the program Sony Ericsson has reduced its global workforce by approximately 4,000 people to reach a total workforce of approximately 7,800 by June 30, 2010. The total restructuring charges taken to date for the programme are Euro 374 million.

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As of June 30, 2010 Sony Ericsson retained a net cash position of Euro 609 million, an increase of Euro 46 million sequentially mainly due to operating results, tight financial management of working capital, as well as positive currency effects.

Market share in unit base for the quarter remained flat and is estimated to be around 4%.

Sony Ericsson maintains a forecast of slight growth in units in the global handset market in 2010.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Vivaz™ and XPERIA™ are trademarks 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 and additional information:

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

Additional information:

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 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

Andreas Hedemyr (Stockholm) +46 10 714 3748

Sony investor relations

Gen Tsuchikawa (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

Merran Wrigley (London) +44 20 8762 5862

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

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT

 

		Apr-Jun									Jan-Jun
EUR million		2009			2010			Change			2009			2010			Change
Net sales		1,684			1,757			4	%		3,419			3,162			-8	%
Cost of sales		-1,483			-1,266			-15	%		-3,074			-2,241			-27	%
Gross profit		200			492			146	%		346			921			167	%
Gross margin %		11.9	%		28.0	%					10.1	%		29.1	%
Research and development expenses		-245			-218			-11	%		-548			-434			-21	%
Selling and administrative expenses		-235			-245			4	%		-460			-452			-2	%
Operating expenses		-480			-463			-4	%		-1,008			-886			-12	%
Other operating income, net		6			7			25	%		19			21			14	%
Operating income		-274			36			—			-644			57			—
Operating margin %		-16.3	%		2.1	%					-18.8	%		1.8	%
Financial income		6			2			-60	%		15			9			-40	%
Financial expenses		-15			-7			-51	%		-25			-16			-35	%
Income after financial items		-283			31			—			-653			50			—
Taxes		74			-16			—			158			-10			—
Minority interest		-4			-4			-2	%		-10			-7			-32	%
Net income		-213			12			—			-505			33			—
Number of units shipped (million)		13.8			11.0			-20	%		28.3			21.5			-24	%
ASP (EUR)		122			160			31	%		121			147			22	%
EUR Million		Apr-Jun									Jan-Jun
Restructuring charges		2009			2010						2009			2010
Cost of sales		-9			33						-2			31
Research and development expenses		9			1						11			3
Sales and administrative expenses		1			-2						4			1
Total		1			32						13			35

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Sony Ericsson

CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS

 

		2009												2010
EUR million		Q1			Q2			Q3			Q4			Q1			Q2
Net sales		1,736			1,684			1,619			1,750			1,405			1,757
Cost of sales		-1,591			-1,483			-1,367			-1,341			-975			-1,266
Gross profit		145			200			252			409			429			492
Gross margin %		8.4	%		11.9	%		15.5	%		23.4	%		30.6	%		28.0	%
Research and development expenses		-303			-245			-260			-299			-216			-218
Selling and administrative expenses		-225			-235			-205			-299			-207			-245
Operating expenses		-528			-480			-465			-599			-423			-463
Other operating income, net		13			6			21			8			14			7
Operating income		-369			-274			-193			-181			20			36
Operating margin %		-21.3	%		-16.3	%		-11.9	%		-10.4	%		1.4	%		2.1	%
Financial income		9			6			3			4			7			2
Financial expenses		-10			-15			-9			-12			-9			-7
Income after financial items		-370			-283			-199			-190			18			31
Taxes		84			74			42			36			6			-16
Minority interest		-6			-4			-6			-12			-3			-4
Net income		-293			-213			-164			-167			21			12
Number of units shipped (million)		14.5			13.8			14.1			14.6			10.5			11.0
ASP (EUR)		120			122			114			120			134			160
EUR Million		2009												2010
Restructuring charges		Q1			Q2			Q3			Q4			Q1			Q2
Cost of sales		7			-9			0			41			-2			33
Research and development expenses		2			9			1			72			2			1
Sales and administrative expenses		3			1			1			37			3			-2
Total		12			1			2			150			3			32

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Sony Ericsson

CONSOLIDATED BALANCE SHEET

 

EUR million		Jun 30 2009		Dec 31 2009		Mar 31 2010		Jun 30 2010
ASSETS
Total fixed and financial assets		736		779		791		836
Current assets
Inventories		404		358		384		467
Accounts receivable		936		832		849		1,063
Other assets		379		415		369		412
Other short-term cash investments		456		489		537		477
Cash and bank		509		389		443		562
Total current assets		2,685		2,483		2,582		2,981
Total assets		3,421		3,262		3,373		3,817
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity		694		381		438		510
Minority interest		66		47		54		66
Total equity		760		428		492		575
Borrowing, Non Current		0		0		100		101
Other long-term liabilities		30		32		37		40
Total long-term liabilities		30		32		137		141
Accounts payable		848		852		829		973
Borrowing, Current		0		258		316		329
Other current liabilities		1,782		1,692		1,599		1,798
Total current liabilities		2,630		2,802		2,744		3,101
Total shareholders’ equity and liabilities		3,421		3,262		3,373		3,817
Net cash*		965		620		563		609

 

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

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		Apr-Jun				Jan-Jun
EUR million		2009		2010		2009		2010
OPERATIONS
Net income		-213		12		-505		33
Adjustments to reconcile net income to cash		37		4		66		-40
		-176		16		-439		-6
Changes in operating net assets		60		13		382		-58
Cash flow from operating activities		-115		29		-57		-65
INVESTMENTS
Investing activities		-13		-15		-32		12
Cash flow from investing activities		-13		-15		-32		12
FINANCING
Financing activities		0		0		- 53		150
Cash flow from financing activities		0		0		-53		150
Net change in cash		-128		15		-142		97
Cash, beginning of period		1,116		980		1,125		878
Translation difference in Cash		-23		45		-18		64
Cash, end of period		965		1,039		965		1,039

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Sony Ericsson

CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS

 

		2009								2010
EUR million		Q1		Q2		Q3		Q4		Q1		Q2
OPERATIONS
Net income		-293		-213		-164		-167		21		12
Adjustments to reconcile net income to cash		29		37		20		48		-44		4
		-263		-176		-143		-119		-23		16
Changes in operating net assets		321		60		49		-97		-72		13
Cash flow from operating activities		58		-115		-94		-216		-94		29
INVESTMENTS
Investing activities		-19		-13		-42		-10		27		-15
Cash flow from investing activities		-19		-13		-42		-10		27		-15
FINANCING
Financing activities		- 53		0		159		100		150		0
Cash flow from financing activities		-53		0		159		100		150		0
Net change in cash		-14		-128		22		-126		83		15
Cash, beginning of period		1,125		1,116		965		996		878		980
Translation difference in Cash		5		-23		9		8		19		45
Cash, end of period		1,116		965		996		878		980		1,039

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Sony Ericsson

NET SALES BY MARKET AREA BY QUARTER

 

EUR million		2009												2010
Isolated quarters		Q1			Q2			Q3			Q4			Q1			Q2
Europe, Middle East & Africa *		977			927			875			966			711			876
Americas		200			195			232			222			201			223
Asia		559			562			512			562			493			659
Total		1,736			1,684			1,619			1,750			1,405			1,757
*  of which Western Europe		721			678			636			678			525			668
		2009												2010
Sequential change (%)		Q1			Q2			Q3			Q4			Q1			Q2
Europe, Middle East & Africa *		-40	%		-5	%		-6	%		10	%		-26	%		23	%
Americas		-69	%		-3	%		19	%		-4	%		-10	%		11	%
Asia		-12	%		1	%		-9	%		10	%		-12	%		34	%
Total		-40	%		-3	%		-4	%		8	%		-20	%		25	%
*  of which Western Europe		-35	%		-6	%		-6	%		7	%		-23	%		27	%
		2009												2010
Year over year change (%)		Q1			Q2			Q3			Q4			Q1			Q2
Europe, Middle East & Africa *		-35	%		-33	%		-39	%		-41	%		-27	%		-5	%
Americas		-59	%		-74	%		-67	%		-65	%		1	%		14	%
Asia		-23	%		-19	%		-25	%		-12	%		-12	%		17	%
Total		-36	%		-40	%		-42	%		-40	%		-19	%		4	%
*  of which Western Europe		-26	%		-25	%		-33	%		-39	%		-27	%		-2	%
		2009												2010
Year to date		0903			0906			0909			0912			1003			1006
Europe, Middle East & Africa *		977			1,903			2,778			3,744			711			1,587
Americas		200			395			627			850			201			424
Asia		559			1,121			1,633			2,194			493			1,152
Total		1,736			3,419			5,038			6,788			1,405			3,162
*  of which Western Europe		721			1,400			2,036			2,714			525			1,193
		2009												2010
YTD year over year change (%)		0903			0906			0909			0912			1003			1006
Europe, Middle East & Africa *		-35	%		-34	%		-35	%		-37	%		-27	%		-17	%
Americas		-59	%		-68	%		-67	%		-67	%		1	%		7	%
Asia		-23	%		-21	%		-22	%		-20	%		-12	%		3	%
Total		-36	%		-38	%		-40	%		-40	%		-19	%		-8	%
*  of which Western Europe		-26	%		-26	%		-28	%		-31	%		-27	%		-15	%