
On November 8, Ericsson (NASDAQ: ERIC) will hold its Capital Markets Day 2018 in New York. The company will give an overview of its turnaround, strategy, and plans for future growth as well as details about its business segments and market trends.
Over the past seven quarters, focus has been on simplifying and stabilizing the business, including stopping the topline decline. Accelerated cost reduction activities and contract reviews have been implemented. There is good traction in the ongoing portfolio review. Moreover, the company's increased investments in R&D for future growth combined with efficient cost control has proven successful with improved profitability as a result.
B rje Ekholm, President and CEO, says: With our focused strategy we have created a strong foundation of stability and profitability. Our strengthened portfolio and competitive cost structure have enabled us to grow in the third quarter 2018, for the first time since 2014, on a constant currency basis, despite headwind from exited contracts and businesses. As the industry moves to 5G and IoT we are now preparing to take the next step to generate profitable growth in a selective and disciplined way.
Group profitability target and net sales ambition 2020
The ambition for net sales is increased to SEK 210 220 (190-200) b. by 2020, mainly driven by Networks. Of the increase in the sales ambition, SEK 5 b. is explained by currency and SEK 2 b. is explained by the inclusion of Red Bee Media, previously not included in the sales ambition.
In Networks, increased investments in R&D for technology and cost leadership will continue. Growth is expected to come from a stronger market, selective market shares gains, and expansion of the product portfolio into close adjacent markets. In 2019, investments in 5G trials will continue. The operating margin target for 2020 is unchanged at 15% 17%.
In Digital Services, the top priority is returning to profitability. Continued cost reductions and efficiency improvements will contribute to reaching the target of a low single digit operating margin by 2020. Investments in a 5G-ready and cloud-native product portfolio continue. There is a strong market demand for the new portfolio driven by virtualization and 5G acceleration. At the same time, the legacy product sales decline faster than the new portfolio uptake. The lower net sales ambition for the segment is fully explained by the internal transfer of a business line to Managed Services.
In Managed Services, where a turnaround has been completed, focus is shifting to further improving profitability through investments in automation and Artificial Intelligence. Consequently, the operating margin target 2020 is increased to 5% 8%.
In Segment Emerging Business and Other focus is on establishing new businesses for organic growth. The strategy is to capture new revenues through rapid and disciplined innovation building on 5G and IoT. For the current business portfolio, the target of break-even by 2020 is unchanged. However, in case of attractive new business opportunities, we may decide to scale up investments. We will manage emerging business initiatives for growth, based on positive NPV case-by-case and within 2022 Group targets.
Long-term profitability
As previously communicated the long-term profitability target for the Group is an operating margin of more than 12% excluding restructuring. While the target level remains unchanged, the timing is now set to 2022 at the latest. Operating margin targets per segment for 2022 are found in the table below:
Financial targets and sales ambitions
(CMD 2017 numbers in brackets, when changed)
SEK b. Networks Digital Services Managed Services Emerging Business and Other Group
2020 Net sales ambition 141 145(128 - 134) 41 - 43 23 - 25 5 - 7 210 - 220
2020 Operating margins 15% - 17% Low single digit 5% - 8%(4% - 6%) Break-even(current business) >10%
Operating margin by 2022, at the latest 15% - 17% 10% - 12% 8% - 10% - >12%
Note: All financial targets are based on USD/SEK at 8.70. Operating margin targets are all excluding restructuring charges.
Market development
Ericsson's total addressable market is expected to grow between 2% 3% CAGR from 2018 to 2022, broken down as follows: Radio Access Network 1% 3%, Managed Services 2% - 4%, and Digital Services 1% 4%.
Planning assumptions for all key segments are based on external sources.
Planning assumptions Q4 2018
The planning assumptions as stated in the third quarter report for 2018 remain. However, following the announcement to accelerate edge computing through a partnership with Limelight, we plan to reset Ericsson EdgeGravity, formerly known as Ericsson UDN, allowing for a leaner set-up of content delivery. These actions are expected to generate annual cost savings of SEK 0.2 b. starting from 2019. Related to this, Q4 2018 will be negatively impacted by SEK -0.5 b., of which SEK -0.2 b. of restructuring charges impacts cashflow.
Speakers and details of the event
President and CEO B rje Ekholm and CFO Carl Mellander, will be joined by members of the companys Executive Team. The speakers include Erik Ekudden, CTO, Fredrik Jejdling, Executive Vice President and Head of Business Area Networks, Jan Karlsson, Head of Business Area Digital Services, Peter Laurin, Head of Business Area Managed Services, and sa Tamsons, Head of Business Area Technologies and New Businesses, Niklas Heuveldop, Head of Market Area North America, Arun Bansal, Head of Market Area Europe and Latin America, and Chris Houghton, Head of Market Area North East Asia.
Ericssons Capital Markets Day event can be accessed via the Ericsson website https://www.ericsson.com/en/investors/events-and-presentations/CMD2018. Presentation materials can also be downloaded from the website once the webcast has started.
NOTES
Most recent headlines
05/01/2027
Worlds first 802.15.4ab-UWB chip verified by Calterah and Rohde & Schwarz to be ...
04/08/2026
Dalet, a leading technology and service provider for media-rich organizations, t...
04/07/2026
April 7 2026, 19:00 (PDT) Detective Conan: Fallen Angel of the Highway Opens in...
01/06/2026
January 6 2026, 05:30 (PST) Dolby Sets the New Standard for Premium Entertainment at CES 2026
Throughout the week, Dolby brings to life the latest innovatio...
19/05/2026
Cisco and the USGA have announced a multiyear extension of their partnership, which began in 2018. Cisco serves as the Official Technology Partner of the USGA, ...
19/05/2026
Urban Edge Network (UEN), a streaming platform for NAIA sports, has announced a partnership with Spiideo to provide streaming and production tools to UEN's ...
19/05/2026
Warner Bros. Discovery (WBD) will provide live coverage of all 900 Roland-Garros matches across its platforms beginning with qualifiers on May 18. In Europe, 21...
19/05/2026
Tubi, Fox Corporation's free streaming service, has announced the launch of the FIFA World Cup 2026 FOX Hub, a dedicated destination for World Cup programmi...
19/05/2026
Telef nica, in collaboration with Sony, has conducted a 5G connectivity trial at the Movistar Arena in Spain using the 26 GHz millimetre wave (mmWave) band. The...
19/05/2026
Ross Production Services (RPS) has installed a Calrec Argo M console into its new Hypermax-1 remote production truck, replacing one of three Argo S consoles pre...
19/05/2026
Panasonic Projector and Display Corporation has announced the acquisition of 100% of the shares of UK-based media technology company Hive Media Control Ltd. (HI...
19/05/2026
Globecast has announced the completion of a nine-month renovation of its Singapore facility, converting it from a traditional linear broadcast operation into a ...
19/05/2026
Grass Valley has announced a three-year enterprise agreement with Phoenix Broadc...
19/05/2026
Bitmovin has announced that Watch Brasil, a streaming platform operating across Brazil and Europe since 2018, has replaced its legacy systems with Bitmovin'...
19/05/2026
Ateme has announced the migration of Dish Home Nepal's Nepal Premier League (NPL) streaming infrastructure to Ateme's TITAN Live solution deployed on Ak...
19/05/2026
CMSI provided workflow, media management, and HDR support for ESPN during coverage of the NCAA Gymnastics Semifinals and Championships. The company supported fi...
19/05/2026
In advance of this year's Sports Emmy Awards, SVG is taking a deep dive into the six production-technologies nominated for this year's George Wensel Tec...
19/05/2026
In advance of this year's Sports Emmy Awards, SVG is taking a deep dive into the six production-technologies nominated for this year's George Wensel Tec...
19/05/2026
Featuring a fully IP infrastructure, Supershooter 11 is intended for large-scale events. Enabling remote and distributed workflows, Supershooter 65 joins the RE...
19/05/2026
By Jessica Herndon
The line wrapped around the building outside Denver's La...
19/05/2026
Podcasting continues to evolve, and so does Spotify. As we build what comes next, one thing remains constant: This is a medium built on connection. It lives in ...
19/05/2026
Popular design joins Inherit cartridge line-up
When GC Audio introduced their modular Inherit system, it was available with a selection of the company's...
19/05/2026
Resonance-suppression plug-in gets ground-up rebuild
Following on from its 10-year anniversary, oeksound's flagship plug-in has just reached its third m...
19/05/2026
Dedicated FL Studio controller keyboard range refreshed
Novation's dedicated FL Studio controller family has just been upgraded, with four new models ex...
19/05/2026
Rohde & schwarz strengthens its in-vehicle networks test portfolio with the laun...
19/05/2026
Lawful Intelligence: Rohde & Schwarz stellt neues Portfolio f r moderne Polizeia...
19/05/2026
Press Release
18 May 2026, Johannesburg South Africa has been selected as the...
19/05/2026
When all companies in the market are allowed to compete under the same set of ru...
19/05/2026
Battle-proven technology withstands electronic warfare threats across air, maritime surface and subsea domains....
19/05/2026
WESCAM MX-Series EO/IR systems provide high-precision targeting across domains, including counter-UAS applications...
19/05/2026
Champaign, IL - March 16, 2026 Cobalt Digital, the leading designer and manufa...
19/05/2026
CHAMPAIGN, Ill. April 16, 2026 - Cobalt Digital today announced a partnership ...
19/05/2026
Las Vegas - April 18, 2026 Cobalt Digital, the leading designer and manufactur...
19/05/2026
LAS VEGAS April 18, 2026 - Advanced HDR by Technicolor and Cobalt Digital are ...
19/05/2026
LAS VEGAS - May 4, 2026 - Cobalt Digital, the leading designer and manufacturer of signal processing products, and a founding partner in the openGear initiativ...
19/05/2026
London - 11 May 2026 Cobalt Digital, the leading designer and manufacturer of award-winning signal processing products, and a founding partner in the openGear...
19/05/2026
eds3_5_jq(document).ready(function($) { $(#eds_sliderM519).chameleonSlider_2_1({ content_source:......
19/05/2026
Celebrating its ability to quickly adapt to changing requirements, Ross Production Services (RPS) has put its flexible infrastructure to good use, switching one...
19/05/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
19/05/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
19/05/2026
Grass Valley has entered into a three-year enterprise agreement with Phoenix Broadcast Solutions as the Singapore-based company expands its live production oper...
19/05/2026
Clear-Com supported Musikal Perahu Kertas, a large-scale musical theater production in Indonesia adapted from the acclaimed novel by Dee Lestari, through the d...
19/05/2026
Actus Digital, a LiveU company, and a leading provider of intelligent media monitoring and broadcast compliance platforms, announced today that METEO CONSULT ha...
19/05/2026
Globecast, a leading provider of managed services for the broadcast and media industry, today announced the completion of a major renovation of its Singapore fa...
19/05/2026
Following a major upgrade to its Connecticut remote production centre with the installation of three 60-fader Argo S consoles in 2023, RPS has switched one of t...
19/05/2026
PlayBox Technology today announced the launch of Celebro Play, a browser-based media orchestration platform designed specifically for broadcast facilities and p...
19/05/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
19/05/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
19/05/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
19/05/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...