| Balance Sheet
Exiting 3Q09, cash, cash equivalents, and short-term investment balance was approximately SEK 79.8 billion versus SEK 75.5 billion in 2Q09. Inventories were approximately SEK 26.8 billion versus SEK 29.0 billion in 2Q09, and accounts receivable were SEK 62.4 billion versus SEK 69.4 billion in 2Q09. DSO (Days Sales Outstanding) in the quarter was 118 days versus 121 days in 2Q09; DPO (Days Payable Outstanding) was 57 days versus 59 in 2Q09; and DIO (Days Inventory Outstanding) was 77 days versus 78 days in 2Q09. Equity ratio was 51.0% versus 51.0% in 2Q09.
Ericsson intends to repurchase its callable bond EUR LME 6.75%, maturing on November 28, 2010. The intention is to make a full redemption on November 28, 2009, of all outstanding notes with a total nominal amount of EUR 471 million. The repurchase will reduce gross debt and improve annual interest net.
Cash Flow
Cash flow from operations was SEK 5.7 billion in 3Q09 versus SEK 9.1 billion in 2Q09. Capital expenditure was SEK 690.0 million in 3Q09 versus SEK 1.2 billion in 2Q09.
Dividend
During the quarter, the Company paid approximately SEK 20.0 million as dividend.
Cost Reductions Initiatives
In January 2009, ERIC announced cost reductions program targeting annual savings of SEK 10.0 billion from 2H10 with an equal split between cost of sales and operating expenses. Restructuring charges are estimated to be approximately SEK 6.0-SEK 7.0 billion.
Others
On October 29, 2009, ERIC and United Arab Emirates-based operator du, signed a three-year managed services agreement which will enable du to continue develop operational efficiency of nationwide GSM/WCDMA network operations.
The partnership provides du with a long-term sustainable operating model, reducing its operational expenses and enabling the operator to focus further on providing attractive new services to its subscribers.
On October 23, 2009, ERIC and Samsung successfully achieved interoperability between the world's first commercial LTE device from Samsung and the live network from Ericsson in Stockholm, Sweden, an important milestone in making 4G a reality.
LTE will transform the mobile-broadband user experience, providing the ultra-high data speeds anywhere, anytime. LTE will bring unparalleled services such as Internet TV, mobile video blogging, online video games, and high speed mobile business environment.
On October 19, 2009, ERIC and Kaixin001, the largest and fastest-growing social networking site in China, joined forces for a three-year partnership to develop innovative mobile applications that will provide millions of users omnipresent access the site.
On September 7, 2009, LM Ericsson announced that it has been selected as one of the two suppliers for AT&T’s wireline access products and services. Ericsson will offer AT&T full end-to-end system solutions, allowing AT&T to significantly accelerate time-to-market for new products and services.
On July 25, 2009, Ericsson entered into an asset purchase agreement to acquire the parts of the Carrier Networks division of Nortel relating to CDMA and LTE technology in North America. The purchase is structured as an asset sale at a cash purchase price of USD 1.13 billion on a cash and debt free basis. This announcement follows the completion of the auction process initiated by Nortel, and the transaction is subject to court and customary regulatory approvals.
On July 9, 2009, LM Ericsson announced that it has entered into a seven-year deal with Sprint Nextel Corp. (S) under which it will manage day-to-day operations of Sprint’s CDMA, iDEN, and wireline networks. The deal, under which 6,000 Sprint employees will move to Ericsson, is valued between $4.5 billion and $5 billion. Sprint will retain full ownership and control of its network assets.
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