“ I am pleased that we have successfully closed the IPR cross-licensing agreement with Samsung. Our industry is built on scale and a strong tradition of sharing technologies through licensing on fair, reasonable and non-discriminatory (FRAND) terms. The agreement shows the value of our R&D investments and enables both companies to continue to innovate and bring new technologies to the market,” says Hans Vestberg, President and CEO of Ericsson (NASDAQ:ERIC).

“Our focus on profitability started to pay off and operating margin for the group gradually improved in 2013, despite significant currency headwind, driven primarily by improvements in Networks and Network Rollout.

The business mix, with a higher share of coverage projects than capacity projects, started to shift towards more capacity during the year. As anticipated, sales came under some pressure during the quarter. As previously communicated, the major reason behind this development is the two large mobile broadband coverage projects, which peaked in North America in the first half of 2013 and the impact from reduced activity in Japan.

While executing on the large rollout projects in the US, we have also strengthened our professional services position and capabilities. For the full year Global Services accounted for the majority of the region’s sales and we are today the market leader in both telecom services and mobile infrastructure in one of the world’s most advanced and dynamic ICT markets.

The LTE tenders in China continue and so far the two major operators that have made their vendor selections have chosen Ericsson. During the quarter, sales in China improved as a result of deliveries to the ongoing mobile broadband coverage projects.

In the fourth quarter Ericsson continued to grow in some of its European key markets. During the last years we have strengthened our position in Europe through the network modernization projects. These projects have been delivered according to plan and the major part of the negative margin impact from these projects is now behind us. Over time, we expect the telecom industry in Europe to improve driven by macroeconomic development and a recent investment announcement made by one of the large operators.

During 2013 Ericsson executed on a number of strategic initiatives to both manage the ongoing technology transition in the industry and to transform the company for future business opportunities. We have solidified our core business as well as taken important steps to build a leadership position in new and targeted key areas. This includes consolidating the modems business and the acquisition of the IPTV business Mediaroom from Microsoft. We will gradually increase resource and capital allocation in these areas as well as in IP, Cloud, OSS and BSS.

The long-term fundamentals in the industry remain attractive and with our ongoing strategic initiatives we are well positioned to continue to support our customers in a transforming ICT market.

We have worked diligently to improve working capital and we ended the year with a strong cash flow of SEK 17.4 (22.0) b. and a full-year cash conversion of 79%, above the target of 70%, giving Ericsson a solid balance sheet to continue to execute on our strategy. The Board of Directors proposes a dividend for 2013 of SEK 3.00 (2.75) per share, an increase by 9%,” concludes Vestberg.

IMPACT OF SAMSUNG IPR AGREEMENT

On January 27, 2014, Ericsson and Samsung reached an agreement on global patent licenses between the two companies. The cross license agreement covers patents relating to GSM, UMTS, and LTE standards for both networks and handsets.

The agreement includes an initial payment and ongoing royalty payments from Samsung to Ericsson for the term of the new multi-year license agreement.

The initial payment contributed to net sales with SEK 4.2 b., operating income of SEK 4.2 b. and net income of SEK 3.3 b. in the fourth quarter. Ericsson expects that the initial payment will impact Ericsson’s operating cash flow in the beginning of 2014. This specific agreement impacts Segments Networks and Support Solutions. Numbers excluding the Samsung agreement:

FOURTH QUARTER

The Samsung agreement impacted sales by SEK 4.2 b. Sales increased in China and Russia, while Networks sales in North America and overall sales in Japan declined. CDMA sales in North America, as well as GSM sales in China, continued to decline.

Including the Samsung agreement, reported sales increased, 27% QoQ. Mobile broadband deliveries in China increased, while there were lower project activities in North America and Japan.

Licensing revenues grew in the quarter both YoY and QoQ, also excluding the Samsung agreement.

Restructuring charges amounted to SEK 1.0 (1.7) b., mainly driven by continued execution of the service delivery strategy.

Gross margin increased YoY to 37.1% (31.1%), due to the Samsung agreement, reduced negative effect from network modernization projects in Europe and continued business mix improvements. The QoQ gross margin improvement from 32.0% was driven by the same factors. Large LTE coverage projects in China impacted hardware margins negatively. The share of services sales was 41% (42%), a decline by -4%-points QoQ.

Total operating expenses amounted to SEK 16.1 (16.4) b. Operating expenses, excluding the added modems business, the one-time charge related to the acquisition of Airvana, the acquired Mediaroom operations and restructuring charges, were down -6% YoY and R&D expenses, adjusted for the same items, were down -9%. The modems business added cost of SEK -0.5 b. and the one-time charge related to Airvana amounted to SEK -0.4 b.

R&D expenses amounted to SEK 8.9 (9.2) b. and selling, general and administrative expenses (SG&A) amounted to SEK 7.2 (7.1) b.

Other operating income and expenses were flat YoY and amounted to SEK 0.3 b. The re-evaluation effect for new hedges taken in 2013 was SEK 0.1 b. For these new hedges hedge accounting is not applied (see Accounting Policies). In the third quarter there was a positive re-evaluation effect for new hedges of SEK 0.8 b.

Operating income, including JV, increased to SEK 9.1 (-3.8) b. The fourth quarter 2012 included a non-cash charge related to ST-Ericsson of SEK -8.0 b. Operating margin, including JV, was 13.5% (-5.7%). Currency had an overall negative impact on operating income YoY.

Financial net amounted to SEK -0.1 (-0.1) b. and declined QoQ from SEK 0.1 b., mainly related to foreign exchange currency revaluation effects. Tax costs were SEK -2.5
(-2.4) b.

Net income increased to SEK 6.4 (-6.3) b. The Samsung agreement had a positive effect of SEK 3.3 b.

EPS diluted was SEK 1.97 (-1.99).

FULL YEAR

Full year reported sales were flat and amounted to SEK 227.4 (227.8) b. During the year sales were negatively impacted by strong currency headwind and lower sales in North East Asia, driven by lower GSM investments in China combined with lower project activity in Japan and South Korea. In North America the CDMA sales declined by -50% to SEK 4.2 (8.4) b.

Revenues for IPR and licensing were SEK 10.6 (6.6) b. the Samsung agreement contributed with SEK 4.2 b.

With a large share of coverage projects in the beginning of the year and with slightly improved business mix from the second quarter, the commodity mix remained stable compared to last year. Software represented 24% (23%), hardware 34% (35%) and services 42% (42%) of total sales in 2013.

Restructuring charges amounted to SEK 4.5 (3.4) b., mainly related to continued execution of the service delivery strategy and headcount reductions in Sweden. The proactive work to drive efficiency and cost reductions continues.

Gross margin increased for the full year to 33.6% (31.6%), due to the agreement with Samsung, reduced negative effect from network modernization projects in Europe and improved business mix. The Global Services share of Group sales was flat at 43%.

Total operating expenses were basically flat and amounted to SEK 58.5 (58.9) b. During the fourth quarter expenses related to the modem business added SEK -0.5 b. to operating expenses. A one-time charge related to the acquisition of Airvana impacted the operating expenses negatively by SEK -0.4 b. Excluding restructuring charges, the operating expenses were down -2% compared to 2012. R&D expenses amounted to SEK 32.2 (32.8) b. and selling, general and administrative expenses (SG&A) amounted to SEK 26.3 (26.0) b.

During 2014, R&D expenses, excluding expenses related to Modems, Mediaroom and restructuring, are expected to increase somewhat, mainly due to investments in IP.

Other operating income and expenses decreased to SEK 0.1 (9.0) b. During the year, one-time charges related to the divestment of ACS and the exiting of the telecom and power cable operations of SEK -0.9 b. impacted other operating income negatively. For new hedges taken in 2013 hedge accounting is not applied. The total re-evaluation effect for 2013 hedges on other operating income was SEK 0.5 b. In 2012, other operating income included a gain related to the divestment of Sony Ericsson of SEK 7.7 b. and to Multimedia brokering (IPX) of SEK 0.2 b.

Ericsson’s share in earnings of JV and associated companies was SEK -0.1 (-11.7) b. In 2012 a non-cash charge of SEK -8.0 b. related to ST-Ericsson was made.

Operating income, including JV, increased to SEK 17.8 (10.5) b., positively impacted by improved gross margin and no negative effect from ST-Ericsson. Operating income was negatively impacted by one-time charges of SEK -1.3 b. related to the divestment of ACS, the exiting of the telecom and power cable operations and the acquisition of Airvana. Operating margin, including JV, was 7.8% (4.6%). Operating income including JV and excluding the Samsung agreement was SEK 13.6 b. with an operating margin of 6.1%. 2012 included a gain of SEK 7.7 b. related to the divestment of Sony Ericsson.

Financial net amounted to SEK -0.7 (-0.3) b. The difference is mainly attributable to lower interest net as an effect of lower interest rates during 2013 compared to in 2012.

The tax rate for 2013 was 29% compared to 42% in 2012, positively impacted by product and market mix and the change in corporate tax rate in Sweden. Tax costs were SEK -4.9 (-4.2) b.

Net income increased to SEK 12.2 (5.9) b., positively impacted by the Samsung agreement by SEK 3.3 b.

EPS diluted was SEK 3.69 (1.78).

FOURTH QUARTER

All comparisons relating to balance sheet items are QoQ.

Trade receivables increased to SEK 71.0 (64.9) b. driven by QoQ sales increase and the Samsung agreement.

Inventory decreased to SEK 22.8 (28.1) b., positively impacted by improved business mix and efficiency measures.

Cash, cash equivalents and short-term investments amounted to SEK 77.1 (60.7) b. The *net cash position increased by SEK 13.1 b. to SEK 37.8 (24.7) b., primarily due to higher earnings and improved working capital.

In November, a USD 684 million European Investment Bank (EIB) loan was disbursed. The loan agreement was signed in October 2012 and the loan supports Ericsson’s R&D. The loan will mature in November 2020. The existing SEK 4 b. loan, with original maturity in July 2015, was repaid in January 2014.

During the quarter, approximately SEK 1.4 b. of provisions was utilized, of which SEK 0.3 b. were related to restructuring. Additions of SEK 0.9 b. were made, of which SEK 0.4 b. related to restructuring. Reversals of SEK 0.6 b. were made. Cash outlays of SEK 1.3 b. remain to be made from the restructuring provision.

Cash flow from operating activities was SEK 14.6 (15.7) b. YoY with no impact from the Samsung agreement.

The total number of employees increased QoQ to 114,340 (113,989).

FULL YEAR

Compared to December 31, 2012, trade receivables increased from SEK 63.7 b. to 71.0 b. mainly due to the Samsung agreement. Days sales outstanding (DSO) increased from 86 to 97 days.

Inventory decreased from SEK 28.8 b. to 22.8 b., positively impacted by improved business mix and efficiency measures.

Inventory turnover days (ITO) improved from 73 to 62 days. Accounts payable days decreased from 57 to 53 days.

During the year, Ericsson concluded the following refinancing activities to extend the average debt maturity profile:

A SEK 4 b. EIB loan, with original maturity in July 2015, was repaid in January 2014.

Provisions amounted to SEK 5.4 (8.6) b. by end of the year. The reduction was mainly due to utilization of the 2012 ST-Ericsson provision.

Cash flow from operations was positive at SEK 17.4 (22.0) b. driven by improved working capital. There was no impact on cash flow from the Samsung agreement.

Cash, cash equivalents and short-term investments amounted to SEK 77.1 (76.7) b. The *net cash position decreased from SEK 38.5 b to 37.8 b. Cash conversion for the full year 2013 ended at 79%.

Capital expenditures amounted to SEK 4.5 b., 2% of net sales. Annual capital expenditures are normally around 2% of sales. This corresponds to the needs for keeping and maintaining current capacity level, including the introduction of new technology and methods.

For the full year, the net number of employees increased by 4,085 to 114,340 (110,255), of which

3,293 in services and 741 in R&D. In 2013, 5,377 people joined Ericsson through acquisitions and through managed services contracts. At the same time approximately 12,000 employees left Ericsson, reflecting natural attrition rate and ongoing company transformation.

The Board of Directors proposes a dividend for 2013 of SEK 3.00 (2.75), reflecting earnings and balance sheet structure in 2013, as well as coming years’ business plans and expected economic development, in accordance with Ericsson’s dividend policy.

FOURTH QUARTER

As previously communicated, lower sales in North America and Japan, where large mobile broadband coverage projects are coming to an end, had a negative impact on sales. Coverage projects in China and Russia did not fully offset this decrease. GSM investments in China, CDMA and circuit-switched core continued their structural decline following operators’ transition to LTE. CDMA sales declined -57% YoY and increased 16% QoQ to SEK 1.1 b. The Samsung agreement added sales of SEK 2.9 b.

Sales in North East Asia, Latin America and Middle East showed a strong development QoQ.

The demand for the multi-application router, SSR 8000, continues. 96 SSR contracts have been signed to date, of which 18 new in the quarter, including six for fixed networks. As operators are preparing for Voice over LTE (VoLTE), including video communication and other service enhancements, the need for upgrades in the legacy voice network is increasing.

Operating margin increased to 17% (8%) driven by the Samsung agreement, improved business mix, positive effects from cost adaptations and portfolio streamlining. During the quarter the European network modernization projects continued to improve and were not dilutive to margins. Lower sales, negative currency effects and a one-time charge of SEK -0.4 b., related to the Airvana acquisition, impacted operating margin negatively. Excluding the Samsung agreement, operating margin was 9%.

Restructuring charges amounted to SEK -0.3 (-0.9) b.

FULL YEAR

Increased sales in Latin America, Europe and the Middle East were partly offset by lower sales in North America, where CDMA related sales declined by -50%. North East Asia sales declined as an effect of lower project activities in Japan and South Korea and lower GSM investments in China. At the end of the year there was solid demand for our IMS and data layered architecture UDC (User Data Consolidation). However, this was not enough to offset the continued structural decline in circuit-switched core.

Operators’ focus on improving network performance and new service opportunities were the main drivers

for LTE and mobile broadband investments throughout the year. The positive customer feedback on the new small-cell product Radio Dot System is a demonstration of our innovation leadership.

Operating margin gradually improved during the year and ended at 10% (6%) for the full year. This was a result of the Samsung agreement, reduced negative effect from network modernization projects in Europe, improved business mix and strong focus on improving profitability. Restructuring charges amounted to SEK -2.2 (-1.3) b. This was primarily related to reductions of operations in Sweden and dismantling of the CDMA operations. Operating margin excluding the Samsung agreement was 7%.

Demand for consulting and systems integration services was strong in the quarter as operators focus on improving network performance and increasing their operational efficiency. Network Rollout sales continued to decline as a result of lower coverage project activity.

Global Services sales growth QoQ was driven by Professional Services, where Consulting and System Integration as well as Network Design and Optimization showed strong development.

Global Services operating margin improved YoY to 8% (6%), primarily due to higher Network Rollout margins. However, Network Rollout margin continued to be negative in the quarter mainly due to the network modernization projects in Europe. Professional Services showed stable margin at 14% (15%).

Restructuring charges amounted to SEK -0.6 (-0.6) b.

Reported sales for Global Services were flat in comparison to a strong 2012. Network Rollout reported sales grew 4% driven by high coverage project activities, primarily in North America. Professional Services sales grew, adjusted for FX, supported by strong development in region North America and India.

Global services operating margin was 6% (6%). Network Rollout margin gradually improved during the year due to the declining dilutive effect from the European network modernization projects as well as the ongoing efficiency programs. Professional Services operating margin was 14% (14%).

Restructuring charges amounted to SEK -2.0 (-1.9) b. for the full year.

There is a growing momentum for IT-related business in the market. With acquisitions such as TeleOss (Thailand), Devoteam (France) and TelcoCell (Canada) Ericsson has further strengthened its capabilities and market position. Currently there is 16,000 Consulting and Systems Integration professionals.

Sales QoQ increased 117% driven by the Samsung agreement, the acquired Mediaroom business this in combination with strong software license revenue. The Samsung agreement added sales of SEK 1.3 b.

Segment sales are characterized by the fluctuations between quarters in software volumes. This, in combination with investments in the next generation of cloud-adopted solutions, and the high proportion of fixed costs in software business creates uneven distributed margins that is impacted by the variation in sales volumes.

Operating margin increased YoY to 37% (8%) positively impacted by the Samsung agreement. Operating margin excluding the Samsung agreement was 16% as a result of high software license sales, portfolio streamlining and efficiencies.

Operating margin increased QoQ, driven by the Samsung agreement and higher sales volumes.

FULL YEAR

The development was primarily driven by portfolio changes and decline in sales of TV compression technology while OSS and BSS showed stable development. The Samsung agreement had an overall positive impact on sales.

Operating margin increased to 12% (9%) due to the Samsung agreement. Lower sales and a charge of SEK -0.3 b. related to the divestment of ACS had a negative impact on margin.

Demand for OSS and BSS continued to be strong. Customer interest to partner with vendors that can address an end-to-end suite of OSS and BSS solutions increased. The overall segment is positively impacted by growth in mobile broadband as this requires improved user experience. With its complete OSS and BSS offerings Ericsson is well positioned to take on the role.

During the year, the acquisition of Microsoft’s TV solution business Mediaroom was completed, strengthening Ericsson’s position in the growing TV and media management market. Service providers increasingly have premium content as part of their overall mix, fueled by TV-on demand and multiscreen. Content anywhere, anytime and on any device is a trend that drives growth together with increasing access to content and bundled packages. This is one of the main drivers of the sharp increase of video traffic in the networks. As a consequence, service providers and network owners need solutions to make networks video centric and efficient for video delivery.

The number of subscriptions served by Ericsson’s charging and billing solutions was 2.1 billion at the end of the year.

FROM ST-ERICSSON TO SEGMENT MODEMS

ST-Ericsson was created in 2008 as a joint venture between Ericsson and STMicroelectronics. Early 2013 the parents agreed to split up and close the joint venture.

Ericsson decided to take over the design, development and sales of the thin LTE multi-mode modem solutions as it is seen as an important part for the Ericsson vision of 50 billion connected devices in the Networked Society. The ambition is to be among the top three suppliers in the thin-modem market.

The company ST-Ericsson is winding down and all businesses have been transferred to parents or divested. In 2012 Ericsson made a provision of SEK 3.3 b., related to the ongoing implementation of strategic options at hand.

Ericsson now has a highly focused thin-modem operation with industry-leading technology and intellectual property. A new segment was established as of October 1, 2013, and the modems business is now consolidated into Ericsson.

FOURTH QUARTER

Segment Modems generated an operating loss of SEK 0.5 b. in the quarter, primarily related to R&D expenses. In the quarter the new product M7450 was released for commercial use and the work with OEMs is ongoing to get M7450 based products on the market. Chipset production has started.

Operating expenses for the modems business in 2014 is estimated to approximately SEK 2.6 b.

North America

Networks sales continued to decline QoQ as a result of the two large mobile broadband coverage projects which peaked in first half of 2013. However, business fundamentals remain positive. Increased smartphone penetration, mobile broadband consumption and 4G device lineup remain drivers for network expansion. Network evolution has driven strong professional services business.

Networks sales declined for the full year with a strong first half while second half was weaker as a result of the two large mobile broadband coverage projects that peaked in the first half of 2013. While executing on the large rollout projects in the US, Ericsson has also strengthened its professional services position and capabilities. For the full year Global Services accounted for the majority of the region’s sales.

Latin America

Sales increased in the quarter driven by operator investments in 3G network quality and LTE rollouts.

LTE deployments ramped up after a slow start and together with 3G network quality investments drove sales growth for the full year 2013. However, macroeconomic development in mainly Brazil and Mexico continued to slow down during the year.

Northern Europe and Central Asia

Sales growth YoY and QoQ was driven by 2G/3G/4G equipment sales and deployments in Russia. Professional Services developed well following increased network quality focus across the region.

Full year sales growth was mainly driven by Networks sales in Russia. Operators continued to show high interest in OSS and BSS.

Western and Central Europe

In the quarter network modernization projects progressed according to plan and LTE deployment to the installed base continued.

The full year sales growth was driven by network modernization projects in several countries and also by a high activity level in managed services.

Mediterranean

Modernization projects in France and LTE deployments in Spain offset lower investments in Italy, resulting in stable sales YoY.

Sales in 2013 grew, driven by 3G deployments in Northwest Africa and modernization projects.

Middle East

Sales grew both YoY and QoQ. LTE is being deployed in the region but still represents a small share of Networks sales. There is continued demand for Professional Services, both System Integration and Managed Services, as operators seek network performance quality and operational efficiencies. Political unrest prevails in several countries.

Sales for the full year grew, driven by increased investments in mobile broadband.

Sub-Saharan Africa

Operators continue to focus on improving capacity on 2G and 3G networks to improve quality of services. However, sales were negatively impacted by reduced deployment pace in Nigeria and South Africa. Professional services growth is fueled by continued good demand for managed services.

For the full year 2013 sales volumes came from 2G and 3G deployment and managed services, although the deployment pace slowed down in the fourth quarter. Long-term industry fundamentals remain positive as mobile broadband and smartphone penetration is still at low levels.

India

Sales grew both YoY and QoQ mainly due to network capacity increases with one recently signed contract. During 2014 uncertainty is expected to remain until spectrum auctions are completed and the presidential election period is concluded.

For the full year 2013, sales were negatively impacted by poor macroeconomic environment and delays in regulatory legislation. Global Services grew largely due to an increase in Managed Services.

North East Asia

Sales declined YoY. Japan continued to be negatively impacted by currency and reduced activity as completion of a major project is getting closer. During the quarter, sales in China improved as a result of deliveries to the ongoing mobile broadband coverage projects, contributing to growth QoQ.

Sales for the full year declined. Japan was negatively impacted by currency and reduced activity. GSM in China structurally declined whilst LTE deployments commenced in the fourth quarter. In Japan, KDDI has selected Ericsson as one of the prime vendors to deploy its LTE system and evolved packet core network.

South East Asia and Oceania

Sales in the region declined YoY as a result of certain major projects which peaked in Australia and Indonesia during the fourth quarter of 2012. Sales grew sequentially in all segments as a result of 3G coverage and capacity projects as well as increased activities in BSS and TV and Media.

Sales grew in 2013 with 3G deployments in Thailand and LTE deployments in Singapore and Australia. In Indonesia major capacity projects were finalized. Smartphone penetration continues to increase from a low level.

Other

Sales were strong YoY, positively impacted by the Samsung agreement. Sales were negatively impacted by the exit from the telecom and power cable business which had a negative impact on YoY comparison. Licensing revenues grew in the quarter both YoY and QoQ, also excluding the Samsung agreement.

Full year sales increased positively impacted by the Samsung agreement but negatively impacted by the divestment of IPX in Q312 and the exit of the telecom and power cable business. Sales of broadcast services, telecom cables, power modules and other businesses are also included in “Other”.

Income after financial items was SEK 7.2 (-4.9) b.

Major changes in the Parent Company’s financial position for the year; increased cash, cash equivalents and short-term investments of SEK 1.1 b, decreased current and non-current receivables from subsidiaries of SEK 7.1 b and decreased current and non-current liabilities to subsidiaries of SEK 5.2 b. At the end of the quarter, cash, cash equivalents and short-term investments amounted to SEK 58.5 (57.4) b. During the quarter LME signed a loan of USD 0.7 b. with the European Investment Bank (EIB). During the year, a dividend payment of SEK 8.9 b., was made.

In accordance with the conditions of the long-term variable compensation program (LTV) for Ericsson employees, 2,974,951 shares from treasury stock were sold or distributed to employees during the fourth quarter. The holding of treasury stock at December 31, 2013, was 73,968,178 Class B shares.

Dividend proposal

The Board of Directors will propose to the Annual General Meeting a dividend of SEK 3.00 (2.75) per share, representing some SEK 9.9 (8.9) b., and April 16, 2014, as the record day for payment of dividend. The dividend is reflecting 2013 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 April 11, 2014, 15.00 (CET) at Stockholm Waterfront Congress Centre, Stockholm, Sweden.

Annual Report

The annual report will be made available on our website www.ericsson.com and at the Ericsson headquarters, Torshamnsgatan 21, Kista, Stockholm, Sweden, during the first weeks of March.

Patent infringement lawsuit against Micromax

In March 2013, Ericsson filed a patent infringement lawsuit in the Indian Delhi High Court against Micromax, seeking damages and an injunction. Ericsson alleged that Micromax products, compliant with the 2G/3G standard, infringe eight of Ericsson’s Indian patents. Ericsson had before that made numerous attempts to sign a license agreement with the company on Fair, Reasonable and Non-discriminatory (FRAND) terms. As part of its defense, Micromax filed in November 2013 a complaint with the Competition Commission of India (CCI) and the CCI has decided to refer the case to the Director General’s Office for an in-depth investigation.

Hexatronic acquires Ericsson’s telecom cable business in Hudiksvall

On December 1, 2013, Ericsson finalized the divestment of its telecom cable business in Hudiksvall, Sweden, to Hexatronic. The divestment was made pursuant to an agreement that was signed between the two companies on October 31, 2013. The divestment is made as a business transfer and the new company within the Hexatronic Group will be named Hexatronic Cables & Interconnect Systems AB.

85 former Ericsson employees were transferred to Hexatronic and will work within the fiber- and submarine cables business and an additional 30 employees within the production of interconnect until it is finalized.

Samsung litigation and agreement

In November 2012, Ericsson filed two patent infringement lawsuits in the US District Court for the Eastern District of Texas against Samsung. Ericsson seeked damages and an injunction. Ericsson also asked the Court to adjudge that Samsung breached its commitment to license any standard-essential patents it owns on fair, reasonable, and non-discriminatory terms and to declare Samsung’s allegedly standard essential patents to be unenforceable. In March 2013, Samsung filed its answers and counterclaims in the Ericsson suits (above) in Texas, USA.

In November 2012, Ericsson also filed a complaint with the US International Trade Commission (ITC) seeking an exclusion order blocking Samsung from importing certain products into the US. In December 2012, Samsung filed a complaint with the ITC seeking an exclusion order blocking Ericsson from import of certain products into the US.

Initial determinations in both ITC investigations were expected in late January 2014.

On January 27, 2014, Ericsson announced that an agreement had been signed with Samsung on global patent licenses between the two companies. The cross license agreement covers patents relating to GSM, UMTS, and LTE standards for both networks and handsets.

Ericsson is committed to licensing its standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms for the benefit of the industry. It believes that licensing according to FRAND principles strikes the appropriate balance between incentivizing companies to innovate and contribute technology to open standards and maintaining the overall royalty rates at a reasonable level to allow new entrants access to the market.

The agreement ends the complaints made by both companies against each other before ITC as well as the lawsuits before the U.S. District Court for the Eastern District of Texas.

The agreement includes an initial payment and ongoing royalty payments from Samsung to Ericsson for the term of the new multi-year license agreement.

Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA)

During the fourth quarter of 2013, Ericsson made sales of telecommunications infrastructure related products and services in Iran to MTNIrancell and to Mobile Communication Company of Iran, which generated gross revenues (reported as net sales) of approximately SEK 876 million. Ericsson does not normally allocate quarterly net profit (reported as net income) on a country-by-country or activity-by-activity basis, other than as set forth in Ericsson’s consolidated financial statements prepared in accordance with IFRS as issued by the IASB. However, Ericsson has estimated that its net profit from such sales, after internal cost allocation, during the fourth quarter of 2013 would be substantially lower than such gross revenues. In light of the recent international developments related to Iran, Ericsson has decided not to execute on the anticipated phase out of telecommunications infrastructure related products to customers in Iran. Ericsson intends to cautiously continue to engage with existing customers in Iran while continuously evaluating the situation.

During the fourth quarter of 2013, Ericsson’s Iranian subsidiary closed the account temporarily opened in Tejarat Bank during the third quarter of 2013. The account was opened for purposes of collecting interest income earned from Tejarat Bank prior to the closing of the subsidiary’s accounts with that bank in 2012 and the account was closed once the amount had been collected and transferred to an account in another bank.

Ericsson’s operational and financial risk factors and uncertainties along with our strategies and tactics to mitigate risk exposures or limit unfavorable outcomes are described in our Annual Report 2012. Compared to the risks described in the Annual Report 2012, no material, new or changed risk factors or uncertainties have been identified in the year.

Risk factors and uncertainties in focus short-term for the Parent Company and the Ericsson Group include:

Ericsson stringently monitors the compliance with all relevant trade regulations and trade embargos applicable to dealings with customers operating in countries where there are trade restrictions or trade restrictions are discussed. Moreover, Ericsson operates globally in accordance with Group policies and directives for business ethics and conduct.

Stockholm, January 30, 2014

Telefonaktiebolaget LM Ericsson (publ)

Org. Nr. 556016-0680

Board of Directors

Date for next report: April 23, 2014

Introduction

We have reviewed this report for the period January 1, 2013, to December 31, 2013, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, January 30, 2014

PricewaterhouseCoopers AB

Peter Nyllinge

Authorized Public Accountant

Auditor in Charge

Ericsson invites media, investors and analysts to a press conference at the Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), January 30, 2014. An analysts, investors and media conference call will begin at 14.00 (CET).

For further information, please contact:

Helena Norrman, Senior Vice President, Communications Phone: +46 10 719 34 72

E-mail: investor.relations@ericsson.com or media.relations@ericsson.com

Telefonaktiebolaget LM Ericsson (publ)

Org. number: 556016-0680

Torshamnsgatan 23

SE-164 83 Stockholm

Phone: +46 10 719 00 00

Investors

Peter Nyquist, Vice President,

Investor Relations

Phone: +46 10 714 64 49, +46 70 575 29 06

E-mail: peter.nyquist@ericsson.com

Stefan Jelvin, Director,

Investor Relations

Phone: +46 10 714 20 39, +46 70 986 02 27

E-mail: stefan.jelvin@ericsson.com

Åsa Konnbjer, Director,

Investor Relations

Phone: +46 10 713 39 28, +46 73 082 59 28

E-mail: asa.konnbjer@ericsson.com

Rikard Tunedal, Director,

Investor Relations

Phone: +46 10 714 54 00, +46 761 005 400

E-mail: rikard.tunedal@ericsson.com

Media

Ola Rembe, Vice President,

External Communications

Phone: +46 10 719 97 27, +46 73 024 48 73

E-mail: media.relations@ericsson.com

Corporate Communications

Phone: +46 10 719 69 92

E-mail: media.relations@ericsson.com

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.