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 ...
06/09/2026
June 9 2026, 23:00 (PDT) Dolby and MagentaTV Bring Fans Closer to the FIFA Worl...
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...
15/06/2026
Detach from Direct-Attached: How Remote Editing with EVO Keeps Creative Teams Mo...
14/06/2026
Library captures 1960s R&B/pop drum sound
Following on from their recent wave of plug-in effects, Iconic Instruments have just launched an all-new virtual d...
14/06/2026
HBO Comedy Rooster Shot with URSA Cine 17K 65
Brie Clayton June 14, 2026
0 Comments
Large format brings viewers intimately close to characters.
Black...
13/06/2026
Latest expansion pack includes 252 presets
Devious Machines have recently introduced another expansion for their powerful multi-effects plug-in, Infiltrator...
13/06/2026
Create custom DAW/plug-in controllers using prompts
MetaGrid have recently introduced an all-new AI Builder function to their touchscreen-based control surf...
13/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
13/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
YES Network and The Gotham Sports App will air seven Athletes Unlimited Softball...
12/06/2026
The United Football League will host its FAST Innovation Suite at the 2026 United Bowl presented by Credit One Bank on Saturday, June 13 at 3:00 p.m. ET at Audi...
12/06/2026
PTZOptics and LayerJot will present live demonstrations at InfoComm 2026 showing how natural-language AI prompting, robotic camera control, and on-device comput...
12/06/2026
MultiDyne Video and Fiber Optic Systems will exhibit at InfoComm 2026, featuring...
12/06/2026
Ateme has announced that Eurovision Services is using Ateme's software-based frame-rate conversion technology for international live event workflows. The de...
12/06/2026
Bitmovin and Simplestream have announced a partnership with Xperi to simplify the launch of OTT streaming services on TiVo OS smart TVs and devices. The collabo...
12/06/2026
Net Insight has announced that a multinational technology company is deploying a...
12/06/2026
MLB Players Inc., the business arm of the MLB Players Association, has announced a partnership with Athletes First to develop and sell brand partnerships across...
12/06/2026
Guntermann and Drunck (G&D) and VuWall have announced the CommandKeyboard-Advanc...
12/06/2026
Comcast Smart Solutions announces a new smart technology deployment with Major L...
12/06/2026
Elevation Worship completed the initial leg of its Elevation Nights 2026 tour ...
12/06/2026
AJA Video Systems has announced KONA IP25 support for Colorfront Transkoder and ...
12/06/2026
Audinate Group Limited (ASX: AD8) will exhibit at InfoComm 2026 (Booth C7321, Ce...
12/06/2026
Pac-12 Commissioner Teresa Gould has announced the appointment of Scott Adametz as Chief Technology Officer. The Pac-12 describes the hire as the first CTO appo...
12/06/2026
Grass Valley has announced AMPP Edge Live, a production system combining Grass Valley hardware, NVIDIA Blackwell GPU acceleration, and AMPP OS in a single platf...
12/06/2026
At one time a trailblazer with the launch of the Longhorn Network, the Universit...
12/06/2026
Ratings Roundup is a rundown of recent rating news and is derived from press rel...
12/06/2026
Chyron has announced PAINT 10.4, an update to its illustrated replay and sports ...
12/06/2026
SVP, Production, Mark Gross: With the new schedule, with not having every Sunday night, it has given us an opportunity to take a step back and reimagine what o...
12/06/2026
For Televisa Technical Engineering Manager Roberto N nez Ibarra and the small team of 12 technicians and two production personnel at the IBC things are already ...
12/06/2026
Simple Steps to Better Acoustics - Taming The Small Room
Most of us mix in spare rooms and small spaces, where the acoustics fight us at every turn. At Gear...
12/06/2026
Latest addition expands vintage-inspired effects palette
Meris' Ottobit pedal range draws its inspiration from vintage gaming consoles, and the latest a...
12/06/2026
Soundbox-based chamber strings series expanded
Sonora Cinematic have just announced the launch of the second instalment in their Soundbox-based chamber stri...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
AJA Announces KONA IP25 Integration with Colorfront Software
Brie Clayton June 12, 2026
0 Comments
Collaboration enables uncompressed SMPTE ST 2110 I/O ...
12/06/2026
URSA Cine 12K LF Used to Create Visuals for STUTS' K-Arena Concert
Brie Clayton June 12, 2026
0 Comments
Organic visuals projected on a giant scre...
12/06/2026
MTI FILM Acquires Mango New Edit, Expanding its Global Post-Production Services ...
12/06/2026
AI Point Tracking Speeds Up Complex VFX Tracks in Mocha Pro
Jessie Electa Petrov June 12, 2026
0 Comments
The 2026.5 release adds automatic point trac...
12/06/2026
Bitmovin, a provider of video streaming solutions, has partnered with Simplestream, a provider of OTT and broadcast solutions, and technology provider Xperi, to...
12/06/2026
Leostream Corporation, creator of the world-leading Leostream Remote Desktop Access Platform, today announced Jigsaw24, a leading B2B IT solutions provider wit...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
Share
Copy link
Facebook
X
Linkedin
Bluesky
Email...
12/06/2026
How Aussie indie games and screen are levelling up with IP 11 June 2026
Ari Harrison, Pro Jank Footy
Head of Games Joey Egger and Ari Harrison of Umbrella sha...
12/06/2026
AgentPerf from Artificial Analysis, the industry's first agentic AI benchmark, gives developers, enterprises and infrastructure providers a clear way to com...
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.
