Ericsson announces the second quarter financial re

Ericsson announced its financial report for the second quarter of 2020. Brje ekholm, President and CEO of Ericsson, said:

affected by the global COVID-19, more than 80% of Ericsson employees still work from home, but Ericsson's performance in the second quarter is still robust. In the second quarter, Ericsson's organic sales were flat with the same period last year, and its gross profit margin increased by 38.2% year-on-year (36.7% in the same period in 2019). At the same time, we are optimistic about the achievement of the group's annual goals

in the business composition, Ericsson network's business grew organically by 4% year-on-year, with a gross profit margin of 40.5%, on the contrary (41.4% in the same period in 2019). We have signed a strategic contract including 5g business in Chinese Mainland, which can ensure accurate and large share of full-scale speed control. The Chinese Mainland market is expected to become a key demand driver in the future, in accordance with the provisions of the international environmental protection law, and create large-scale business volume for Ericsson

the digital service business continues to implement the plan of turning losses into profits, and the basic business condition is continuously improving. Thanks to the growth of software sales, the digital service business in the second quarter must be replaced immediately after the instigator alarm; The gross profit margin reached 43.6% (37.1% in the same period in 2019). The market demand for Ericsson cloud native and 5g product portfolio is extremely strong. At present, we have won a number of important first-class customer contracts in 5g core areas, and are expected to generate revenue in 2021 and beyond. In view of the business development trend, Ericsson's goal of achieving% operating profit margin in 2022 remains unchanged

key points of the second quarter performance report:

the sales volume was SEK 55.6 billion (the same period in 2019 was SEK 54.8 billion); After adjustment in comparable units and currencies, sales were flat year-on-year

the gross profit margin excluding restructuring expenses increased to 38.2% (36.7% in the same period in 2019), including the previously announced inventory write downs related to the Chinese Mainland market (-900 million SEK, equivalent to -1.6 percentage points)

thanks to the improvement of the performance of digital services business, the operating revenue excluding restructuring expenses was SEK 4.5 billion, and the operating profit margin was 8.2%; In the second quarter of 2019, the operating income excluding restructuring expenses was 3.9 billion kroner, and the operating profit margin was 7.0%

the sales of network business increased by 4% year-on-year. Affected by strategic contracts and inventory write downs, the operating profit margin of the network business after deducting restructuring expenses was 14.1% (15.0% in the same period in 2019), partially compensated by operating leverage and favorable business combinations

the operating income of the digital services business excluding restructuring costs was SEK -700 million (the same period in 2019 was SEK -1.3 billion). The increase in gross profit margin was mainly due to the increase in software sales, while sales fell by 5%

the net profit was SEK 2.6 billion (the same period in 2019 was SEK 1.8 billion)

free cash flow before M & A was SEK 3.2 billion (the same period in 2019 was SEK 1.6 billion). The net cash flow on June 30, 2020 was SEK 37.5 billion (the same period in 2019 was SEK 33.8 billion)

the impact of the COVID-19 on operating income and cash flow in the quarter is limited