At Annual General Meeting of shareholders, Ericsson President and CEO Hans Vestberg gave an overview of 2011 financial results and strategic decisions
Good sales growth; profitability remains in focus
Information and Communications Technology (ICT) reaching all parts of society - from electric vehicles to city planning
At Ericsson's (NASDAQ:ERIC, news, filings) Annual General Meeting, President and CEO Hans Vestberg reviewed financial results and discussed strategic decisions made throughout 2011, which he told shareholders will ensure continued technology and services leadership for the company.
As previously reported in the Annual Report, published on March 15, income increased by 12% and sales, excluding acquisitions and divestments, increased by 19% adjusted for currencies. Net sales were SEK 227 billion for 2011. During the same period, Ericsson increased its market share for mobile network equipment by 6% to 38%. Ericsson holds the number one position as a global telecom equipment vendor and is twice as large as its nearest competitor.
Vestberg gave an overview of Ericsson's focus areas: mobile broadband, managed services, and OSS/BSS (Operations Support Systems and Business Support Systems). Business Unit Support Solutions, formerly Multimedia, has defined a new strategy in 2012 that builds on OSS/BSS, TV and media solutions as well as M-Commerce.
2011 was a tough year for Ericsson's joint ventures, which both reported losses. Vestberg remarked on the divestment of Sony Ericsson as emotional, because Ericsson has been involved in making telephones practically since the company's inception in 1876, but said it made good business sense in the strategy to enable 50 billion connected devices - not just phones.
With regard to ST-Ericsson, Vestberg told shareholders that the company has presented a new business strategy and announced steps to return to profitability.
By the end of 2011, there were 6 billion mobile subscriptions in the world. There are about 7 billion people on Earth. Even more importantly, subscriptions for mobile broadband, or internet via mobile devices, increased by 60% during the year. By 2016, Ericsson predicts that mobile broadband subscriptions will go up to five billion. There are many examples of how the world is headed into the Networked Society, where people, business, and society use connected devices to their benefit. Vestberg presented two examples at the Annual General Meeting.
Staffan Lorentz from the City of Stockholm, talked about Stockholm Royal Seaport, where Ericsson is one of many partners in a project to build a sustainable city of the future. Ten-thousand people will live and 30-thousand people are expected to work in the area, which is designed to make it easy for people to live in a low-carbon, ecologically-conscious way. Ericsson is an ICT advisor and is building a network that is used for much more than voice calls. The other example mentioned by Vestberg was an electric car charging project, done in collaboration with Victoria Institute, Göteborg Energi, and Volvo Car Corporation, where drivers can control the charging of a Volvo C30 Electric car via a mobile app. An actual car was parked outside the meeting area for shareholders to see and touch.
Ericsson invested close to SEK 33 billion in 2011 in Research and Development and employs about 22,000 engineers in R&D. The company is the largest holder of essential patents for wireless communication, with over 90 license agreements and 30,000 patents.
During the Annual General Meeting, three employees were brought onstage and recognized as "Inventors of the Year." Thomas Cheng, from Ericsson Research in San Jose, California, USA, Paul Schliwa-Bertling, from Ericsson in Linköping, Sweden, and Iana Siomina, from Ericsson Research in Kista, Sweden, are altogether responsible for 275 patent applications.
Sustainability and Corporate Responsibility Report 2011
Ericsson today publishes its Sustainability and Corporate Responsibility Report for 2011, Technology for Good. The report gives examples of Ericsson's performance and activities in areas such as energy efficiency, in helping to reduce climate change, as well as its involvement in endeavors like Refugees United, which works to help refugees find their loved ones, and Connect to Learn, where Ericsson provides ICT to enable a 21st century education for secondary school students, especially girls, in Africa.
The report also highlights Ericsson's longtime commitment to human rights. Onstage, Hans Vestberg said: "It is our firm conviction that access to telecommunication is crucial to ensure human rights - the right to education, health care, not to mention freedom of expression and democracy."
He summed up by saying: "We have strengthened our position as the industry leader and I'm convinced that Ericsson has what it takes to be the driving force in the Networked Society. Our best assets are our leadership within technology and services, our global scale, and of course the fantastic colleagues that we have around the world."
NOTES TO EDITORS
Sustainability and Corporate Responsibility Report
Electric Car Charging Project- Media Kit
Our multimedia content is available at the broadcast room: www.ericsson.com/broadcast_room
Ericsson is the world's leading provider of communications technology and services. We are enabling the Networked Society with efficient real-time solutions that allow us all to study, work and live our lives more freely, in sustainable societies around the world.
Our offering comprises services, software and infrastructure within Information and Communications Technology for telecom operators and other industries. Today more than 40 percent of the world's mobile traffic goes through Ericsson networks and we support customers' networks servicing more than 2 billion subscribers.
We operate in 180 countries and employ more than 100,000 people. Founded in 1876, Ericsson is headquartered in Stockholm, Sweden. In 2011 the company had revenues of SEK 226,9 billion (USD 35.0 billion). Ericsson is listed on NASDAQ OMX, Stockholm and NASDAQ, New York stock exchanges.
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