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 ...
09/10/2026
September 10 2026, 06:00 (PDT) Dolby Expands Dolby OptiView Platform with New Capabilities at IBC 2026
New Sports Intelligence helps providers better unders...
08/10/2026
Modern venues have come a long way since the tinny, echoing audio of the mid 20t...
08/10/2026
ESPN's first Super Bowl production will stream in English and Spanish on Disney+, while the ESPN App carries the full slate of game, ManningCast, studio, an...
08/10/2026
From high-school videoboards to War Eagle Productions, the Opelika native is learning how to lead shows and capture big moments
The future of live sports produ...
08/10/2026
The Television Academy and Prime Video have announced a six-year agreement making Prime Video the exclusive global home of the Emmy Awards beginning with the 20...
08/10/2026
Techex will exhibit at NAB Show New York 2026 (Booth 623, Javits Center, October...
08/10/2026
X Games has announced the appointment of Steve Rogers as Chief Operating Officer. Rogers previously served as COO of World Supercross and spent nearly a decade ...
08/10/2026
Fonn Group has appointed Trevor Spielmann as Sales Director for Germany, Austria, and Switzerland. Spielmann joins from EVS, where he held sales and business de...
08/10/2026
The flagship program will originate from major PG events with a four-camera production, live distribution across PGTV, social platforms
Perfect Game is bringin...
08/10/2026
Innovation rarely happens in a vacuum. More often, it happens at the point of collision: when worlds that have run on separate tracks begin to converge. That is...
08/10/2026
For decades, the production and broadcast services business has run on a familia...
08/10/2026
Uplynk, Zixi, BroadView Software, and Grass Valley have published The IP Converg...
08/10/2026
The NFL has announced the return of the Big Data Bowl, the league's analytics competition, now in its ninth year and again powered by AWS. Registration is o...
08/10/2026
Eutelsat has renewed its partnership with T l diffusion d'Alg rie (TDA), Algeria's national broadcasting network operator, for continued distribution of...
08/10/2026
Disney will livestream Super Bowl LXI on February 14, 2027, alongside the game's broadcast on ESPN and ABC. All Disney subscribers in the United States wi...
08/10/2026
RHStv and Red House Streaming have announced an expansion of their partnership w...
08/10/2026
Gray Media has announced a distribution agreement with TEGNA and DAZN to simulca...
08/10/2026
SVG readers can save 10% on registration and receive a complimentary Solutions H...
08/10/2026
PROTON Camera Innovations GmbH has been named a recipient of a 2026 Technology a...
08/10/2026
Industry leaders discuss real-world cloud workflows for live game production, pl...
08/10/2026
The next-gen audio technology joins Dolby Vision as part of Apple TV's immersive F1 experience...
08/10/2026
David France, Jesse Short Bull, Mato Wayuhi, N. Bird Runningwater, Jodi Archambau, Jhane Myers, Paul McGuire, Amber Morning Star Byars, Holly Macarro, Nick Tils...
08/10/2026
Dynamic panning plug-ins get an upgrade
Sound Particles have just announced major updates for two of their popular dynamic panning plug-ins. Energy Panner 2...
08/10/2026
New expandable instrument boasts full DMNO engine
UDO Audio have just announced the upcoming release of a new, expandable synth that packs the power of the ...
08/10/2026
Two new subwoofers added to monitoring line-up
ADAM Audio's monitoring range has just been expanded with two new DSP-equipped subwoofers, the Sub8 PRO a...
08/10/2026
eds3_5_jq(document).ready(function($) { $(#eds_sliderM519).chameleonSlider_2_1({ content_source:......
08/10/2026
Calrec gives broadcasters freedom of choice at NAB Show New York We're looking forward to meeting up with you all at NAB New York on 21st-22nd October.
Cal...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Globecast, a leading provider of broadcast, media and entertainment managed services, will showcase its next generation of media orchestration services at NAB S...
08/10/2026
Clear-Com played a critical role in the production communications infrastructure for Rock in Rio 2026, one of the world's largest and most recognized music...
08/10/2026
Sohonet Launches ClearView Rush: A Leap Forward in Studio Review, Built for Crea...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Ikegami announces a major expansion to its range of broadcast-quality live production cameras. Scheduled for introduction on Ikegami booth 708 at NAB New York, ...
08/10/2026
Calrec will be located at Booth 444.
Freedom to choose
The media landscape is evolving quickly, and the broadcasters best placed for what comes next will be...
08/10/2026
LiveU has announced that CRD Audiovisuel relied on LiveUs LU900Q intelligent production unit, with built-in native LiveU IQ (LIQ ) connectivity, to deliver live...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
08/10/2026
Marshall Electronics, a globally recognized provider of high-performance video solutions for broadcast, streaming, AV and professional production, will exhibit ...
08/10/2026
14-hour package also includes A Remarkable Place to Die season 2 as well as libr...
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.
