# EDGAR Filing Document

**Accession Number:** 0000717826
**File Stem:** 0001193125-23-011666
**Filing Date:** 2023-1
**Character Count:** 251103
**Document Hash:** b39eeafa9914709b257fca3564126e3b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-011666.hdr.sgml**: 20230120

**ACCESSION NUMBER**: 0001193125-23-011666

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20230120

**FILED AS OF DATE**: 20230120

**DATE AS OF CHANGE**: 20230120

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ERICSSON LM TELEPHONE CO
- **CENTRAL INDEX KEY:** 0000717826
- **STANDARD INDUSTRIAL CLASSIFICATION:** RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** V7
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-12033
- **FILM NUMBER:** 23539493

**BUSINESS ADDRESS:**
- **STREET 1:** TORSHAMNSGATAN 21 - 23
- **CITY:** STOCKHOLM SWEDEN
- **STATE:** V7
- **ZIP:** 164 83
- **BUSINESS PHONE:** 46107190000

**MAIL ADDRESS:**
- **STREET 1:** S 164 83 STOCKHOLM
- **CITY:** SWEDEN
- **STATE:** V7
- **ZIP:** 0000

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LM ERICSSON TELEPHONE CO
- **DATE OF NAME CHANGE:** 19911030

##### [**Table of Contents**](#toc)

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**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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**FORM 6-K** 

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**REPORT OF FOREIGN ISSUER** 

**Pursuant to Rule 13a-16 or 15d-16** 

**of the Securities Exchange Act of 1934** 

**January 20, 2023** 

**Commission File Number 000-12033** 

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## LM ERICSSON TELEPHONE COMPANY
**(Translation of registrant's name into English)** 

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**Torshamnsgatan 21, Kista** 

**SE-164 83, Stockholm, Sweden** 

**(Address of principal executive offices)** 

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Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

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Announcement of LM Ericsson Telephone Company, January 20, 2023 regarding "Fourth quarter and full-year report 2022".

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##### [**Table of Contents**](#toc)
**SIGNATURES** 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| TELEFONAKTIEBOLAGET LM ERICSSON (publ) | TELEFONAKTIEBOLAGET LM ERICSSON (publ) |
| By: | /s/ STELLA MEDLICOTT |
|  | **Stella Medlicott** |
|  | **Senior Vice President,** |
|  | **Chief Marketing and Communications Officer** |
| By: | /s/ CARL MELLANDER |
|  | **Carl Mellander** |
|  | **Senior Vice President, Chief Financial Officer** |

---

Date: **January 20, 2023**

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##### [**Table of Contents**](#toc)
![LOGO](g391568page00001.jpg)

**Fourth quarter and full-year report 2022** 

**Stockholm, Jan 20, 2023** 

**Fourth quarter highlights** 

• The quarter was impacted by an IPR agreement resulting in total IPR revenues of SEK 6.0 (2.4) b. and previously
announced charges of SEK -4.0 b., including DOJ provision, IoT divestment and Cloud Software and Services contract and portfolio exits.

• Group organic sales<sup>1</sup> grew by 1% YoY., of which IPR revenues
contributed with 5 percentage points. Reported sales were SEK 86.0 (71.3) b. of which Vonage contributed SEK 4.1 b.

• Gross income increased to SEK 35.6 (30.8) b., while gross margin decreased to 41.4% (43.2%) primarily due to
business mix change in Networks and previously announced charges for contract exits and portfolio adjustments in Cloud Software and Services.

• EBITA excluding restructuring charges amounted to SEK 9.3 (12.8) b. with an EBITA margin of 10.8% (17.9%). EBITA
was impacted by the previously announced charges.

• Free cash flow before M&A was SEK 16.9 (13.5) b. mainly driven by reduced inventory and high cash collection
including IPR collection.

• Return on capital employed was 15.4% (26.6%) driven by lower EBIT.

**Full-year highlights** 

• Group organic sales<sup>1</sup> grew by 3%, driven by a 4% increase in
Networks and 16% in Enterprise. Reported sales were SEK 271.5 (232.3) b.

• Gross income increased to SEK 113.3 (100.7) b. with increases in segments Networks, Cloud Software and Services,
and Enterprise.

• EBITA amounted to SEK 29.1 (33.3) b. with an EBITA margin of 10.7% (14.3%). EBITA was negatively impacted by
previously announced charges of SEK -5.5 b., partly compensated by increased IPR licensing revenues.

• EBIT margin excl. restructuring charges was 10.1% (13.9%). Excluding Vonage and previously announced charges
during the year, EBIT margin was 12.9%, reaching the 2022 target of 12-14%.

• Net income was SEK 19.1 (23.0) b. EPS diluted was SEK 5.62 (6.81).

• Free cash flow before M&A amounted to SEK 22.2 (32.1) b. Net cash was SEK 23.3 (65.8) b. at year-end 2022.

• Return on capital employed was 14.0% (18.4%) driven by higher capital employed and lower EBIT.

• A dividend for 2022 of SEK 2.70 (2.50) per share will be proposed to the AGM by the Board of Directors.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change |
|  Net sales | 86.0 | 71.3 | 21% | 68.0 | 26% | 271.5 | 232.3 | 17% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Sales growth adj. for comparable units and currency ²* |  |  | 1% |  |  |  |  | 3% |
|  Gross margin ² | 41.4% | 43.2% |  | 41.4% |  | 41.7% | 43.4% |  |
|  EBIT | 7.9 | 11.9 | -34% | 7.1 | 10% | 27.0 | 31.8 | -15% |
|  EBIT margin ² | 9.1% | 16.6% |  | 10.5% |  | 10.0% | 13.7% |  |
|  EBITA ² | 9.0 | 12.3 | -26% | 7.6 | 19% | 29.1 | 33.3 | -13% |
|  EBITA margin ² | 10.5% | 17.2% |  | 11.2% |  | 10.7% | 14.3% |  |
|  Net income | 6.2 | 10.1 | -39% | 5.4 | 15% | 19.1 | 23.0 | -17% |
|  EPS diluted, SEK | 1.82 | 3.02 | -40% | 1.56 | 17% | 5.62 | 6.81 | -17% |
|  Measures excl. restructuring charges² |  |  |  |  |  |  |  |  |
|  Gross margin excluding restructuring charges | 41.5% | 43.5% |  | 41.4% |  | 41.8% | 43.5% |  |
|  EBIT excluding restructuring charges | 8.1 | 12.3 | -34% | 7.2 | 12% | 27.4 | 32.3 | -15% |
|  EBIT margin excluding restructuring charges | 9.4% | 17.3% |  | 10.6% |  | 10.1% | 13.9% |  |
|  EBITA excluding restructuring charges | 9.3 | 12.8 | -27% | 7.7 | 21% | 29.5 | 33.8 | -13% |
|  EBITA margin excluding restructuring charges | 10.8% | 17.9% |  | 11.3% |  | 10.9% | 14.6% |  |
|  Free cash flow before M &A | 16.9 | 13.5 | 25% | 2.5 |  | 22.2 | 32.1 | -31% |
|  Net cash, end of period | 23.3 | 65.8 | -65% | 13.4 | 74% | 23.3 | 65.8 | -65% |

---

<sup>1</sup> Sales adjusted for comparable units and currency

<sup>2</sup> Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements

 <br> 1 Ericsson \| Fourth quarter and full year report 2022

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##### [**Table of Contents**](#toc)
CEO comments

**With our fourth quarter result we are on track to deliver on our long-term EBITA target of 15-18% by 2024. We remain fully committed to our strategic ambitions and have full confidence in the long term. During the quarter, we made measurable progress towards achieving these ambitions, against a backdrop of broad macroeconomic headwinds. As we said during our Capital Markets Day, there are near-term uncertainties, however, we are still in the early phase of global 5G rollout and widespread enterprise digitalization.** 

Our strategy remains rooted in driving sustainable growth and maximizing value across all stakeholders. We are confident that we have the right team and strategy in place to extend our leadership in mobile networks; achieve profitability in Cloud Software and Services; execute in our high growth Enterprise segment; shape the industry landscape by becoming a platform company leveraging the 5G innovation platform; and continue our unwavering commitment to a culture of integrity.

This quarter, we signed a multiyear IPR patent license agreement with a major licensee. This positive outcome positions us well to capture further 5G patent license agreements among handset manufacturers and in new areas such as consumer electronics and IoT. We expect significant IPR revenue growth over the coming 18-24 months.

Group Net Sales<sup>1</sup> grew by 1% YoY, of which IPR revenues contributed with 5 percentage points. EBITA<sup>2</sup> of SEK 9.3 (12.8) b. corresponds to a margin<sup>2</sup> of 10.8% (17.9%). The positive impact from higher IPR revenues was offset by expected business mix shift and previously announced charges of SEK -4 b. We executed on our ambition to reduce inventory contributing to our free cash flow before M&A of SEK 16.9 (13.5) b.

Our **Networks** business grew in India on the back of significant market share gains. As anticipated, the growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America. Gross margin<sup>2</sup> was 44.6% (46.4%), negatively impacted by this business mix shift including a higher share of services sales from large network rollout projects. The IPR patent license agreement had positive margin impact.

During the quarter, we were able to largely offset the impact of high inflation with commercial activities, including product substitution. We continue to invest in technology to enhance performance and cost leadership, expand our global footprint and improve productivity and capital efficiency across the supply chain.

In **Cloud Software and Services**, organic sales<sup>1</sup> decreased by -2% excluding IPR revenues. Sales growth in North America – mainly from 5G Core contracts – was offset by a decline in other market areas. We remain committed to improving profitability and are on a clear path to reaching operating profit break-even for full-year 2023 by limiting subscale software development, accelerating automation, and changing focus from market share gains to profitability. In Q4, we decided to exit certain subscale business, with a one-off charge.

Within **Enterprise**, we continue to leverage our strength in mobile networks to accelerate our business. Organically, sales<sup>1</sup> grew by 15%. Our Enterprise strategy is underpinned by two pillars: First, our Enterprise Wireless Solutions business, focused on capturing the multi-billion-dollar enterprise market opportunity for 5G optimized networking and security solutions. Second, through the Global Communication Platform business, we will enable new ways of monetizing 5G by transforming how network features such as speed and latency are globally exposed, consumed and paid for. Enterprise is a growth engine for the company, and we continue to fine-tune our portfolio to maximize profitability. To this end, we announced the divestment of our loss-making IoT business in Q4. We continue to invest to strengthen our enterprise go-to-market channel and broaden our enterprise product portfolio. In addition, we are increasing our investments in developing the network APIs that will underpin the long-term growth in Global Communication Platform. From 2024 and beyond our enterprise business will be a major driver of Ericsson's long-term growth and profitability, however, these investments will weigh on profitability during 2023.

We remain positive on the long-term outlook for our business. However, the near-term outlook, as we also described at our Capital Markets Day, remains uncertain. We expect operators to continue to sweat assets in response to macroeconomic headwinds. In addition, we expect operators to adjust inventory levels as supply situation eases. These trends started to impact Networks in Q4 and we expect them to continue at least during the first half of 2023. At the same time, we expect good growth from market share wins, albeit not fully offsetting the near-term headwinds. In the longer-term, capex is driven by traffic growth. Given near-term macroeconomic headwinds, we expect Enterprise to grow somewhat slower than during 2022.

While the quarter saw the easing of supply chain related challenges, the inflationary environment persisted. We remain focused on navigating near-term headwinds through our commercial initiatives but also by making Ericsson more cost-effective. We expect to start seeing the effect of our SEK 9 b. cost savings activities during the second quarter of 2023. We anticipate declining margins in Networks during the first half of 2023 due to changing business mix. In Q1 we expect the EBITA<sup>2</sup> for the Group to be somewhat lower than EBITA<sup>2</sup> last year, with improvements during the year.

We remain focused on reaching a resolution with the US authorities regarding the previously announced Deferred Prosecution Agreement (DPA) breach notices received by the company. In this regard, we have this quarter booked a SEK 2.3 b. (approx. USD 220 million) provision as we are now in a position to make a sufficiently reliable estimate of the financial penalty (and additional monitoring costs) associated with a breach resolution.

 <br> 2 Ericsson \| Fourth quarter and full year report 2022 CEO comments

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##### [**Table of Contents**](#toc)
Separately, and with respect to the past matters described in the company's 2019 Iraq investigation report, we continue to thoroughly investigate the facts in full cooperation with the DOJ and the SEC to determine if there is any merit to the allegations.

Building a culture of ethics and integrity remains a top priority, and I am convinced that best-in-class compliance will give our company a competitive advantage. Both the company's resolution with the DOJ and the SEC in 2019 and the ongoing investigation into past conduct in Iraq clearly highlight the importance of intelligent decision-making and effective risk management.

In conclusion, I would like to thank all my colleagues for their diligence and efforts to deliver long-term stakeholder value as they continue to execute on our strategy. The commitment and passion of our team is what inspires me the most as we redefine both our company and our industry. The actions we have taken have positioned us to be a true industry leader.

*Börje Ekholm* 

*President and CEO* 

<sup>1</sup> Sales adjusted for comparable units and currency

<sup>2</sup> Excluding restructuring charges

Financial highlights

**Net sales Segments** 

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | YoY<br>adj.¹ | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change | YoY<br>adj.¹ |
|  Networks | 58.6 | 51.1 | 15% | 1% | 48.1 | 22% | 193.5 | 167.8 | 15% | 4% |
|  Cloud Software and Services | 20.2 | 18.0 | 13% | 2% | 14.2 | 42% | 60.5 | 56.2 | 8% | -1% |
|  Enterprise | 6.6 | 1.8 | 265% | 15% | 5.2 | 28% | 15.4 | 6.2 | 147% | 16% |
|  Other | 0.6 | 0.5 | 18% | 10% | 0.5 | 8% | 2.2 | 2.0 | 8% | 3% |
|  **Total** | **86.0** | **71.3** | **21%** | **1%** | **68.0** | **26%** | **271.5** | **232.3** | **17%** | **3%** |

---

<sup>1</sup> Sales growth adjusted for comparable units and currency. Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.

**Net sales Market Areas** 

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | YoY<br>adj.¹ | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change | YoY<br>adj.¹ |
|  South East Asia, Oceania and India | 11.2 | 8.6 | 31% | 21% | 7.9 | 42% | 33.0 | 28.8 | 14% | 7% |
|  North East Asia | 8.4 | 9.8 | -14% | -16% | 5.6 | 50% | 26.7 | 29.1 | -8% | -11% |
|  North America | 25.3 | 22.3 | 14% | -7% | 26.5 | -5% | 95.4 | 77.5 | 23% | 5% |
|  Europe and Latin America | 20.9 | 19.2 | 9% | 0% | 15.3 | 36% | 66.8 | 60.3 | 11% | 4% |
|  Middle East and Africa | 7.4 | 6.9 | 6% | -4% | 5.7 | 30% | 22.6 | 20.8 | 9% | -1% |
|  Other² | 12.8 | 4.5 | 186% |  | 7.0 | 81% | 27.1 | 15.9 | 71% |  |
|  **Total** | **86.0** | **71.3** | **21%** | **1%** | **68.0** | **26%** | **271.5** | **232.3** | **17%** | **3%** |

---

<sup>1</sup> Sales growth adjusted for comparable units and currency.

<sup>2</sup> "Other" includes primarily IPR licensing revenues and the major part of segment Enterprise.

Sales breakdown by market area by segment is available at the end of this report.

Fourth quarter comments

**Segments** 

Group reported sales increased by 21% YoY to SEK 86.0 b. Sales adjusted for comparable units and currency grew by 1% YoY, of which IPR revenues contributed with 5 percentage points.

IPR licensing revenues increased to SEK 6.0 (2.4) b. Revenues in the quarter were impacted by retroactive revenues for unlicensed periods, from a new contract with one licensee signed in the quarter.

Networks sales adjusted for comparable units and currency grew by 1%, of which IPR revenues contributed with 6 percentage points. Double-digit growth in market area South East Asia, Oceania and India was offset by decline in the other market areas. Networks reported sales were SEK 58.6 b., accounting for 68% (72%) of Group sales.

Cloud Software and Services sales adjusted for comparable units and currency grew by 2%, of which IPR licensing revenues contributed with 4% percentage points. Sales growth in market area North America was not fully offset by decline in other market areas. Cloud Software and Services reported sales were SEK 20.2 b., accounting for 23% (25%) of Group sales.

Enterprise sales adjusted for comparable units and currency increased by 15%, primarily driven by Enterprise Wireless Solutions. Enterprise reported sales were SEK 6.6 b. accounting for 8% (3%) of Group sales. Vonage sales were SEK 4.1 b.

 <br> 3 Ericsson \| Fourth quarter and full year report 2022 CEO comments

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##### [**Table of Contents**](#toc)
**Market Areas** 

Sales adjusted for comparable units and currency increased in market area South East Asia, Oceania and India, while sales were stable in Europe and Latin America. Sales declined in the other market areas, mainly due to reduction in operator capex investments in light of macroeconomic pressures. In addition, especially front-runner operators reduced purchases as inventories were optimized due to supply chain constraints easing.

In market area South East Asia, Oceania and India, sales adjusted for comparable units and currency increased by 21% primarily driven by 5G market share gains in India. However, a slowdown of investment in certain countries in South East Asia negatively impacted sales in the quarter.

In market area North East Asia, sales adjusted for comparable units and currency declined, after elevated 5G investment levels during the first three quarters of the year.

Sales adjusted for comparable units and currency declined in market area North America, after accelerated capex investments in prior quarters. Some operators are guiding for reduction in capex investments and are also optimizing inventory in the near-term as supply chain constraints ease.

Market area Other primarily includes IPR licensing revenues and a major part of segment Enterprise. Growth was driven mainly by acquisition of Vonage, impacting the quarter by SEK 4.1 b. and retroactive IPR licensing revenues for unlicensed periods.

 <br> 4 Ericsson \| Fourth quarter and full year report 2022 Financial highlights

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##### [**Table of Contents**](#toc)
Full-year comments

**Segments** 

Reported sales increased by 17% to SEK 271.5 (232.3) b. Networks sales increased by SEK 25.6 b. to SEK 193.5 b. Cloud Software and Services sales increased by SEK 4.3 b. to SEK 60.5 b. Enterprise sales increased by SEK 9.1 b. to SEK 15.4 b. Sales in segment Other increased by SEK 0.2 b., to SEK 2.2 b. Sales adjusted for comparable units and currency increased by 3%.

IPR licensing revenues increased to SEK 10.4 (8.1) b. primarily as a result of a new patent license agreement including 5G.

Networks sales adjusted for comparable units and currency increased by 4% YoY. Market areas North America, Europe and Latin America and South East Asia, Oceania and India reported mid-single digit organic growth while sales in North East Asia and Middle East and Africa declined. Reported sales grew by 15%. Networks accounted for 71% (72%) of Group sales.

Cloud Software and Services sales adjusted for comparable units and currency decreased by -1% YoY. Sales growth in North America and in IPR licensing revenues was more than offset by sales decline in other market areas. Reported sales grew by 8%. Cloud Software and Services accounted for 22% (24%) of Group sales.

Enterprise sales adjusted for comparable units and currency grew by 16% YoY driven primarily by business area Enterprise Wireless Solutions. Reported sales grew by 147%. Enterprise accounted for 6% (3%) of Group sales. Vonage sales were SEK 7.0 b.

The share of hardware in the sales mix was 44% (46%), software 20% (20%) and services 36% (34%).

**Market Areas** 

Sales adjusted for comparable units and currency increased in three of the five market areas.

Currency adjusted sales increased by 7% YoY in South East Asia, Oceania and India, driven by increased volumes in India on the back of significant market share gains, which compensated for lower investment levels in certain countries in the market area.

Currency adjusted sales in North East Asia decreased by -11% YoY as operators in several markets have finalized the first build-out phase of 5G.

Currency adjusted sales in North America increased by 5% YoY, driven by 5G network deployments and growth in 5G Core and cloud native solutions. Operator capex investments reached record levels in 2022, and some operators are guiding for reduction in capex investments and inventory optimization as supply chain constraints ease.

Currency adjusted sales in Europe and Latin America increased by 4% YoY with increases in both Europe and in Latin America. Sales in Networks increased as a result of high investment levels during the year and market share gains, partly offset by the decline in Russia.

Market area Other reported sales grew by 71%, driven by the acquisition of Vonage as well as increased IPR licensing revenues of SEK 10.4 (8.1) b. primarily as a result of a new patent license agreement including 5G.

 <br> 5 Ericsson \| Fourth quarter and full year report 2022 Financial highlights

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##### [**Table of Contents**](#toc)
**Income and margin development** 

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| | | | | | | | | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2022 |  | Q4<br>2021 | Q4<br>2021 |  | YoY<br>change | YoY<br>change |  | Q3<br>2022 | Q3<br>2022 |  | QoQ<br>change | QoQ<br>change |  | Jan-Dec<br>2022 | Jan-Dec<br>2022 |  | Jan-Dec<br>2021 | Jan-Dec<br>2021 |  | YoY<br>change | YoY<br>change |  |
|  **Net sales** |  | **86.0** |  |  | **71.3** |  |  | **21** | **%** |  | **68.0** |  |  | **26** | **%** |  | **271.5** |  |  | **232.3** |  |  | **17** | **%** |
|  **Gross income** |  | **35.6** |  |  | **30.8** |  |  | **15** | **%** |  | **28.1** |  |  | **26** | **%** |  | **113.3** |  |  | **100.7** |  |  | **12** | **%** |
|  Gross margin |  | 41.4 | % |  | 43.2 | % |  |  |  |  | 41.4 | % |  |  |  |  | 41.7 | % |  | 43.4 | % |  |  |  |
|  Research and development (R&D) expenses |  | -13.2 |  |  | -11.9 |  |  |  |  |  | -11.9 |  |  |  |  |  | -47.3 |  |  | -42.1 |  |  |  |  |
|  Selling and administrative expenses |  | -11.8 |  |  | -7.6 |  |  |  |  |  | -9.4 |  |  |  |  |  | -35.7 |  |  | -27.0 |  |  |  |  |
|  Impairment losses on trade receivables |  | 0.1 |  |  | 0.1 |  |  |  |  |  | 0.0 |  |  | 161 | % |  | 0.0 |  |  | 0.0 |  |  |  |  |
|  Other operating income and expenses |  | -2.8 |  |  | 0.4 |  |  |  |  |  | 0.2 |  |  |  |  |  | -3.3 |  |  | 0.4 |  |  |  |  |
|  Share in earnings of JV and associated companies |  | 0.0 |  |  | 0.0 |  |  |  |  |  | 0.0 |  |  |  |  |  | 0.0 |  |  | -0.3 |  |  |  |  |
|  **EBIT** |  | **7.9** |  |  | **11.9** |  |  | **-34** | **%** |  | **7.1** |  |  | **10** | **%** |  | **27.0** |  |  | **31.8** |  |  | **-15** | **%** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of which Networks |  | 12.5 |  |  | 11.8 |  |  | 6 | % |  | 9.6 |  |  | 30 | % |  | 38.5 |  |  | 37.3 |  |  | 3 | % |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of which Cloud Software & Services |  | 0.7 |  |  | 0.6 |  |  | 14 | % |  | -0.8 |  |  |  |  |  | -1.7 |  |  | -2.2 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of which Enterprise |  | -2.9 |  |  | -0.8 |  |  |  |  |  | -1.7 |  |  |  |  |  | -6.2 |  |  | -3.0 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of which Other |  | -2.3 |  |  | 0.3 |  |  |  |  |  | 0.0 |  |  |  |  |  | -3.6 |  |  | -0.3 |  |  |  |  |
|  EBIT margin ¹ |  | 9.1 | % |  | 16.6 | % |  |  |  |  | 10.5 | % |  |  |  |  | 10.0 | % |  | 13.7 | % |  |  |  |
|  EBITA ¹ |  | 9.0 |  |  | 12.3 |  |  | -26 | % |  | 7.6 |  |  | 19 | % |  | 29.1 |  |  | 33.3 |  |  | -13 | % |
|  EBITA margin ¹ |  | 10.5 | % |  | 17.2 | % |  |  |  |  | 11.2 | % |  |  |  |  | 10.7 | % |  | 14.3 | % |  |  |  |
|  Financial income and expenses, net |  | -0.5 |  |  | -0.9 |  |  |  |  |  | -0.5 |  |  |  |  |  | -2.4 |  |  | -2.5 |  |  |  |  |
|  Income tax |  | -1.2 |  |  | -0.8 |  |  |  |  |  | -1.2 |  |  |  |  |  | -5.5 |  |  | -6.3 |  |  |  |  |
|  **Net income** |  | **6.2** |  |  | **10.1** |  |  | **-39** | **%** |  | **5.4** |  |  | **15** | **%** |  | **19.1** |  |  | **23.0** |  |  | **-17** | **%** |
|  *Restructuring charges* | | *-0.2* | | | *-0.5* | | | *—* | | | *-0.1* | | | *—* | | | *-0.4* | | | *-0.5* | | | *—* | |
|  Measures excl. restr. charges and other items affecting<br>comparability<sup>1</sup> |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Gross margin excluding restructuring charges |  | 41.5 | % |  | 43.5 | % |  |  |  |  | 41.4 | % |  |  |  |  | 41.8 | % |  | 43.5 | % |  |  |  |
|  EBIT excluding restructuring charges |  | 8.1 |  |  | 12.3 |  |  | -34 | % |  | 7.2 |  |  | 12 | % |  | 27.4 |  |  | 32.3 |  |  | -15 | % |
|  EBIT margin excluding restructuring charges |  | 9.4 | % |  | 17.3 | % |  |  |  |  | 10.6 | % |  |  |  |  | 10.1 | % |  | 13.9 | % |  |  |  |
|  EBITA excluding restructuring charges |  | 9.3 |  |  | 12.8 |  |  | -27 | % |  | 7.7 |  |  | 21 | % |  | 29.5 |  |  | 33.8 |  |  | -13 | % |
|  EBITA margin excluding restructuring charges |  | 10.8 | % |  | 17.9 | % |  |  |  |  | 11.3 | % |  |  |  |  | 10.9 | % |  | 14.6 | % |  |  |  |

---

<sup>1</sup> Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.

Fourth quarter comments

**Gross income** 

Gross income increased by SEK 4.7 b. to SEK 35.6 b. with increases in all segments. Gross margin declined to 41.4% (43.2%). The new patent license agreement including 5G had a positive margin impact in Networks and Cloud Software and Services. Gross margin in Networks decreased to 44.4% (46.3%) primarily as a result of a business mix shift on the back of market share gains in several geographies, resulting in a higher share of services sales in large rollout projects that are contributing to gross profit but are gross margin dilutive. In Cloud Software and Services gross margin declined to 33.0% (35.4%) negatively impacted by the previously announced cost for the exit of subscale agreements and product offerings as well as a less favorable business mix. Enterprise gross margin declined to 43.5% (46.2%) mainly due to the addition of Vonage with a slightly lower gross margin than the rest of the Enterprise segment.

**Research and development (R&D) expenses** 

R&D expenses increased by SEK -1.4 b. and amounted to SEK -13.2 (-11.9) b. including a negative YoY currency effect of SEK -0.7 b. R&D expenses increased primarily in Networks due to further investments in Cloud RAN and in Ericsson Silicon (ASICs). R&D expenses were also impacted by the acquisition of Vonage and increased investments to expand the Enterprise Wireless Solutions portfolio.

**Selling and administrative (SG&A) expenses** 

SG&A expenses increased by SEK -4.2 b. to SEK -11.8 (-7.6) b. including a negative YoY currency effect of SEK -0.6 b. The increase is mainly related to acquisition of Vonage, which impacted SG&A by SEK -2.5 b. including amortization of intangible assets of SEK -0.9 b. The increase was also due to higher compliance and legal costs as well as investments in the go-to-market organization in Enterprise Wireless Solutions.

**Other operating income and expenses** 

Other operating income and expenses was SEK -2.8 (0.4) b. The quarter was negatively impacted by a provision of SEK -2.3 b. related to a potential DPA breach resolution with U.S. Department of Justice, including estimated expenses for the previously announced extended monitorship, and by SEK -1.0 b. due to the announced charges related to the divestment of IoT and other portfolio adjustments.

**Restructuring charges** 

Restructuring charges amounted to SEK -0.2 (-0.5) b. in the quarter, mainly due to the announced charges related to the divestment of IoT.

**EBITA** 

EBITA declined to SEK 9.0 (12.3) b. EBITA was impacted by previously announced charges of SEK -4.0 b. (including restructuring charges) as well as by increased operating expenses with higher R&D and increased SG&A expenses in segment Enterprise. EBITA margin declined to 10.5% (17.2%) as a result of higher charges and lower gross margin.

 <br> 6 Ericsson \| Fourth quarter and full year report 2022 Financial highlights

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##### [**Table of Contents**](#toc)
**EBIT** 

EBIT decreased to SEK 7.9 (11.9) b. corresponding to an EBIT margin of 9.1% (16.6%). EBIT was impacted by SEK -1.2 (-0.4) b. of amortization of intangible assets, mainly related to Vonage.

**Financial income and expenses, net** 

Financial net was SEK -0.5 (-0.9) b. The weakened USD to SEK resulted in a positive currency hedge effect of SEK 0.3 (-0.3) b.

**Taxes** 

Taxes were SEK -1.2 (-0.8) b. Taxes were positively impacted by SEK 0.6 b. as a result of the utilization of previously impaired withholding tax assets in Sweden.

**Net income** 

Net income decreased to SEK 6.2 (10.1) b. and EPS diluted declined to SEK 1.82 (3.02).

**Employees** 

The number of employees on December 31, 2022, was 105,529 compared with 104,490 on September 30, 2022. The increase is mainly due to increases in service delivery for large roll-out projects.

Full-year comments

**Gross income** 

Gross income increased to SEK 113.3 (100.7) b. with increases in all segments. Gross margin decreased to 41.7% (43.4%) negatively impacted mainly by increased component cost, inflationary pressure and large-scale projects from market share gains in Networks, as well as an impact from initial 5G Core deployment costs in Cloud Software and Services, partly offset by retroactive IPR licensing revenues.

**Research and development (R&D) expenses** 

R&D expenses increased by SEK -5.2 b. to SEK -47.3 (-42.1) b. including a currency effect of SEK -2.1 b. R&D expenses increased primarily in Networks as a result of further investments in Cloud RAN and in Ericsson Silicon (ASICs) as well as in Enterprise, with acquisition of Vonage and increased investments in Enterprise Wireless Solutions.

**Selling and administrative (SG&A) expenses** 

SG&A expenses increased by SEK -8.7 b. to SEK -35.7 (-27.0) b. including a currency effect of SEK -1.7 b. The increase is mainly related to acquisition of Vonage (SEK -4.3 b.), investments in go-to-market organization for Enterprise Wireless Solutions and increases in compliance and legal expenses.

**Other operating income and expenses** 

Other operating income and expenses was SEK -3.3 (0.4) b. impacted by SEK -2.3 b. due to a provision in relation to a potential DPA breach resolution with U.S. Department of Justice, including estimated expenses for the previously announced extended monitorship, and by SEK -1.0 b. due to the announced charges related to the divestment of IoT and other portfolio adjustments.

Share in earnings of JVs and associated companies was SEK 0.0 (-0.3) b.

**Restructuring charges** 

Restructuring charges decreased to SEK -0.4 (-0.5) b.

**EBITA** 

EBITA declined to SEK 29.1 (33.3) b. with an EBITA margin of 10.7% (14.3%). EBITA was impacted by previously announced charges of SEK -5.5 b. during the year (of which SEK -4.0 b. in Q4) and increased operating expenses with higher R&D as well as increased SG&A expenses in segment Enterprise, mainly from acquisition of Vonage.

**EBIT** 

EBIT decreased to SEK 27.0 (31.8) b. YoY with an EBIT margin of 10.0% (13.7%). EBIT was impacted by SEK -2.1 (-1.4) b. of amortization of intangible assets, mainly related to Vonage.

**Financial income and expenses, net** 

Financial net improved by SEK 0.1 b. to SEK -2.4 (-2.5) b., mainly due to foreign exchange revaluation effects. The currency hedge effect impacted financial net by SEK -0.9 (-0.8) b. The USD strengthened against the SEK between December 31, 2021 (SEK/USD rate 9.05) and December 31, 2022, (SEK/USD rate 10.38).

**Taxes** 

Taxes were SEK -5.5 (-6.3) b. positively impacted by utilization of previously impaired withholding tax assets in Sweden. The effective tax rate in 2022 was 22%, compared with 21% in 2021.

**Net income** 

Net income declined to SEK 19.1 (23.0) b. EPS diluted was SEK 5.62 (6.81) and Adjusted EPS was SEK 6.16 (7.26).

**Employees** 

The number of employees on December 31, 2022, was 105,529, a total increase of 4,207 employees compared with December 31, 2021. The increase is mainly driven by the acquisition of Vonage and increases in service delivery.

 <br> 7 Ericsson \| Fourth quarter and full year report 2022 Financial highlights

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##### [**Table of Contents**](#toc)
**Mobile Networks – Segment Networks** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change |
|  Net sales | 58.6 | 51.1 | 15% | 48.1 | 22% | 193.5 | 167.8 | 15% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which IPR licensing revenues* | 4.9 | 1.9 | 152% | 1.3 | 284% | 8.5 | 6.7 | 28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Sales growth adj. for comparable units and FX* |  |  | 1% |  |  |  |  | 4% |
|  Gross income | 26.1 | 23.6 | 10% | 21.4 | 22% | 86.4 | 78.9 | 10% |
|  Gross margin | 44.4% | 46.3% |  | 44.4% |  | 44.6% | 47.0% |  |
|  EBIT | 12.5 | 11.8 | 6% | 9.6 | 30% | 38.5 | 37.3 | 3% |
|  EBIT margin | 21.2% | 23.0% |  | 19.9% |  | 19.9% | 22.2% |  |
|  EBITA | 12.6 | 11.8 | 7% | 9.6 | 30% | 38.7 | 37.4 | 4% |
|  EBITA margin | 21.4% | 23.1% |  | 20.0% |  | 20.0% | 22.3% |  |
|  Restructuring charges | -0.1 | -0.3 |  | 0.0 |  | -0.1 | -0.3 |  |
|  Measures excl. restructuring charges |  |  |  |  |  |  |  |  |
|  Gross margin excl. restructuring charges | 44.6% | 46.4% |  | 44.4% |  | 44.7% | 47.0% |  |
|  EBIT excl. restructuring charges | 12.5 | 12.0 | 4% | 9.6 | 30% | 38.7 | 37.5 | 3% |
|  EBIT margin excl. restructuring charges | 21.4% | 23.6% |  | 20.0% |  | 20.0% | 22.4% |  |
|  EBITA excluding restructuring charges | 12.6 | 12.1 | 5% | 9.7 | 31% | 38.8 | 37.6 | 3% |
|  EBITA margin excl. restructuring charges | 21.5% | 23.6% |  | 20.0% |  | 20.1% | 22.4% |  |

---

Breakdown of sales into products, services and IPR licensing is available in the back-end tables.

Fourth quarter comments

• Organic sales growth of 1%, of which IPR revenues contributed with 6 percentage points.

• Continued market share gains.

• Gross margin excluding restructuring charges in Q4 was 44.6% and is expected to be 40-42% in Q1 2023.

**Net sales** 

Sales adjusted for comparable units and currency grew by 1%, of which IPR revenues contributed with 6 percentage points. Double-digit growth in South East Asia, Oceania and India, on the back of market share gains, was offset by lower operator capex and impact of initial reduction of inventory levels, primarily in front-runner 5G markets. Reported sales increased by 15%.

After fast build-out of 5G in 2022, some of Ericsson's customers are guiding for lower capex in light of macroeconomic headwinds. In addition, operators are expected to continue to reduce inventories as supply chain constraints are easing. This adjustment started in Q4 and is expected to last a few quarters. Consequently, near-term outlook is uncertain especially for the first half of 2023. In the longer-term, capex is driven by traffic growth, and thus is expected to normalize. The typical seasonality decline in sales between Q4 and Q1 is expected to be more pronounced in 2023, even when adjusting for the retroactive IPR licensing revenues in Q4.

**Gross income** 

Gross income increased by SEK 2.4 b. to SEK 26.1 b. primarily driven by retroactive IPR licensing revenues. Gross margin decreased to 44.4% (46.3%). The decrease in gross margin was caused by a business mix shift, following slowdown in front-runner markets, in combination with market share gains in several geographies. The market share gains contribute to gross profit but are gross margin dilutive in the early stages. Inflationary cost pressure continued but was largely offset by commercial initiatives like product substitution. The new patent license agreement including 5G had a positive margin impact.

It is anticipated that the high inflation impact on cost remains in the coming quarters but will be largely mitigated by commercial initiatives. The change in business mix, resulting from market share gains, will continue during the first half of 2023 and gross margin in the first quarter is expected to be in the range of 40-42%. Market share gains with large-scale projects in early stages tend to have a dilutive impact on gross margins while contributing to increased gross income.

**EBIT** 

EBIT increased to SEK 12.5 (11.8) b. with a decrease in EBIT margin to 21.2% (23.0%).

Operating expenses increased by SEK -1.8 b. to SEK -13.7 b. (including a negative currency impact of SEK -0.7 b.), primarily due to higher investments in R&D in Cloud RAN and in Ericsson Silicon (ASICs).

Full-year comments

**Net sales** 

Reported sales increased by 15% in 2022, to SEK 193.5 (167.8) b. Growth was driven primarily by market share gains in North America, Europe and Latin America, South East Asia, Oceania and India as well as by increased IPR licensing revenues. Sales adjusted for comparable units and currency increased by 4%.

**Gross income** 

Gross income increased by SEK 7.5 b. to SEK 86.4 b. while gross margin decreased to 44.6% (47.0%). Gross margin was impacted by increased component cost, inflationary pressure, and investment in supply chain resilience, partly offset by higher share of IPR licensing revenues in the sales mix and commercial activities. Large scale projects from market share gains had a dilutive impact on the gross margin.

**EBIT** 

EBIT increased to SEK 38.5 (37.3) b., with a decrease in EBIT margin to 19.9% (22.2%), impacted by lower gross margin.

Operating expenses increased by SEK -6.4 b. to SEK -48.3 b. (including a negative currency impact of SEK -2.0 b.), primarily due to higher investments in R&D in Cloud RAN and in Ericsson Silicon (ASICs). Networks EBIT margin exceeded the 2022 target of 16-18%.

 <br> 8 Ericsson \| Fourth quarter and full year report 2022 Segment results

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##### [**Table of Contents**](#toc)
**Mobile Networks – Segment Cloud Software and Services** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change |
|  Net sales | 20.2 | 18 | 13% | 14.2 | 42% | 60.5 | 56.2 | 8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which IPR licensing revenues* | 1.1 | 0.4 | 152% | 0.3 | 284% | 1.9 | 1.5 | 28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Sales growth adj. for comparable units and FX* |  |  | 2% |  |  |  |  | -1% |
|  Gross income | 6.7 | 6.4 | 5% | 4.5 | 48% | 20.1 | 18.8 | 7% |
|  Gross margin | 33.0% | 35.4% |  | 31.8% |  | 33.2% | 33.5% |  |
|  EBIT (loss) | 0.7 | 0.6 | 14% | -0.8 |  | -1.7 | -2.2 |  |
|  EBIT margin | 3.3% | 3.3% |  | -5.6% |  | -2.8% | -4.0% |  |
|  EBITA (loss) | 0.7 | 0.9 | -19% | -0.8 |  | -1.6 | -1.6 |  |
|  EBITA margin | 3.4% | 4.8% |  | -5.4% |  | -2.6% | -2.8% |  |
|  Restructuring charges | 0 | -0.2 |  | -0.1 |  | -0.1 | -0.3 |  |
|  Measures excl. restructuring charges |  |  |  |  |  |  |  |  |
|  Gross margin excl. restructuring charges | 33.0% | 36.1% |  | 32.1% |  | 33.3% | 33.9% |  |
|  EBIT (loss) excl. restructuring charges | 0.7 | 0.7 | -8% | -0.7 |  | -1.6 | -2 |  |
|  EBIT margin excl. restructuring charges | 3.4% | 4.2% |  | -5.2% |  | -2.6% | -3.5% |  |
|  EBITA (loss) excluding restructuring charges | 0.7 | 1 | -30% | -0.7 |  | -1.5 | -1.3 |  |
|  EBITA margin excl. restructuring charges | 3.5% | 5.7% |  | -5.0% |  | -2.4% | -2.4% |  |

---

Breakdown of sales into products, services and IPR licensing is available in the back-end tables.

Fourth quarter comments

• Organic growth of 2%, of which IPR licensing revenues contributed with 4% percentage points.

• EBIT impacted by SEK -0.8 b. of previously announced charges.

• Targeting to reach EBIT break-even full-year 2023.

**Net sales** 

Sales adjusted for comparable units and currency grew by 2%, of which IPR licensing revenues contributed with 4% percentage points. Sales grew in market area North America, while sales in the other market areas declined due to timing of project milestones as well as contract descoping and renegotiations in managed services. Reported sales increased by 13%.

Typical seasonality decline in sales between Q4 and Q1 is expected, when adjusting for the retroactive IPR licensing revenues in Q4.

**Gross income** 

Gross income increased by SEK 0.3 b., while gross margin declined to 33.0% (35.4%). Gross margin was negatively impacted by the previously announced charges for the exit of subscale agreements and product offerings in line with the revised strategy for the segment. In addition, there was a negative impact by a less favorable business mix, partly offset by retroactive IPR licensing revenues.

**EBIT** 

EBIT was SEK 0.7 (0.6) b. with a stable EBIT margin of 3.3%. EBIT was impacted by the previously announced charges of SEK -0.8 b. as a result of continued execution of the Cloud Software and Services revised strategy.

Operating expenses increased by SEK -0.2 b. to SEK -6.0 b. including a negative currency impact of SEK -0.3 b.

Full-year comments

**Net sales** 

Reported sales increased by 8% to SEK 60.5 b. in 2022. Sales adjusted for comparable units and currency decreased by -1%. Sales growth in market area North America and higher IPR licensing revenues, were offset by sales decline in managed networks services business as a result of descoping and contract exits.

**Gross income** 

Gross income increased by SEK 1.3 b. to SEK 20.1 b. Gross margin was stable at 33.2% (33.5%). Positive impact from higher share of IPR licensing revenues in the sales mix was offset by initial 5G Core deployment costs.

**EBIT (loss)** 

EBIT was SEK -1.7 (-2.2) b. with an EBIT margin of -2.8% (-4.0%). EBIT was negatively impacted by a previously announced cost of SEK -0.8 b. as a result of continued execution of the Cloud Software and Services revised strategy. The strategy includes limiting subscale software development, accelerating automation to reduce deployment and maintenance efforts, and changing focus from market share gains to profitable business.

Operating expenses increased by SEK -0.7 b. to SEK -21.9 b. (including a negative currency impact of SEK -1.0 b.).

 <br> 9 Ericsson \| Fourth quarter and full year report 2022 Segment results

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##### [**Table of Contents**](#toc)
**Segment Enterprise** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change |
|  Net sales | 6.6 | 1.8 | 265% | 5.2 | 28% | 15.4 | 6.2 | 147% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Global Comms Platform (Vonage)* | 4.1 |  |  | 2.9 | 40% | 7.0 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Enterprise Wireless Solutions* | 0.9 | 0.5 | 79% | 0.8 | 11% | 2.7 | 1.6 | 75% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Sales growth adj. for comparable units and FX* |  |  | 15% |  |  |  |  | 16% |
|  Gross income | 2.9 | 0.8 | 244% | 2.4 | 19% | 6.9 | 2.9 | 140% |
|  Gross margin | 43.5% | 46.2% |  | 46.5% |  | 45.2% | 46.4% |  |
|  EBIT (loss) | -2.9 | -0.8 |  | -1.7 |  | -6.2 | -3.0 |  |
|  EBIT margin | -44.7% | -42.7% |  | -32.4% |  | -40.5% | -47.5% |  |
|  EBITA (loss) | -1.9 | -0.6 |  | -1.2 |  | -4.5 | -2.3 |  |
|  EBITA margin | -28.6% | -35.2% |  | -23.7% |  | -29.3% | -36.1% |  |
|  Restructuring charges | -0.1 | 0.0 |  | 0.0 |  | -0.2 | 0.0 |  |
|  Measures excl. restructuring charges |  |  |  |  |  |  |  |  |
|  Gross margin excl. restructuring charges | 43.9% | 46.5% |  | 46.5% |  | 45.3% | 46.4% |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Global Comm. Platform (Vonage)* | 42.9% |  |  | 42.4% |  | 42.7% |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Enterprise Wireless Solutions* | 56.6% | 55.4% |  | 57.6% |  | 56.2% | 55.8% |  |
|  EBIT (loss) excl. restructuring charges¹ | -2.8 | -0.7 |  | -1.7 |  | -6.1 | -2.9 |  |
|  EBIT margin excl. restructuring charges¹ | -42.5% | -41.2% |  | -32.4% |  | -39.5% | -47.3% |  |
|  EBITA (loss) excluding restructuring charges¹ | -1.7 | -0.6 |  | -1.2 |  | -4.3 | -2.2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Global Comms Platform (Vonage)* | -0.1 |  |  | -0.5 |  | -0.6 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Enterprise Wireless Solutions* | -0.7 | -0.4 |  | -0.5 |  | -2.2 | -1.4 |  |
|  EBITA margin excl. restructuring charges¹ | -26.4% | -33.7% |  | -23.7% |  | -28.2% | -35.8% |  |

---

<sup>1</sup> Common costs are included at segment level only (not distributed within the segment)

Fourth quarter comments

• Enterprise business represented 8% of Ericsson sales in Q4.

• Organic sales grew in all business areas.

• EBITA (loss) impacted by previously announced charges related to the divestment of IoT business and other portfolio adjustments as well as higher investments in Enterprise Wireless Solutions.

**Net sales** 

Sales adjusted for comparable units and currency increased by 15% YoY, with growth in all business areas. Reported sales increased by SEK 4.8 b. YoY driven primarily by Vonage contributing SEK 4.1 b., and by organic growth in Enterprise Wireless Solutions.

The Vonage Communications Platform (VCP) grew by 13% in USD YoY. We continue to invest in line with our strategic imperative to build the Global Communication Platform.

**Gross income** 

Gross income increased by SEK 2.0 b. to SEK 2.9 b. driven mainly by the Vonage acquisition. Gross margin decreased to 43.5% (46.2%) mainly due to the addition of Vonage with slightly lower gross margin than the rest of the Enterprise segment.

**EBITA (loss)** 

EBITA (loss) was SEK -1.9 (-0.6) b. The decline is mainly due to the announced charges related to the divestment of IoT and other portfolio adjustments impacting EBITA by SEK -1.0 b., and growth investments in Enterprise Wireless Solutions.

**EBIT (loss)** 

EBIT (loss) was SEK -2.9 (-0.8) b. impacted by amortization of intangible assets of SEK -1.1 b., from acquired businesses.

Amortization of intangible assets is expected to be around SEK -0.8 b. related to segment Enterprise.

Full-year comments

**Net sales** 

Sales adjusted for comparable units and currency increased by 16% in 2022, driven mainly by Enterprise Wireless Solutions. Reported sales increased by 147% YoY driven by the acquired Vonage business. Reported sales growth exceeded 70% YoY in Enterprise Wireless Solutions.

**Gross margin** 

Gross margin decreased to 45.2% (46.4%) mainly due to the dilutive effect of Vonage.

**EBITA (loss)** 

EBITA (loss) was SEK -4.5 (-2.3) b. The decline is mainly due to announced charges related to the divestment of IoT and other portfolio adjustments as well as increased growth investments in Enterprise Wireless Solutions and Vonage acquisition related costs.

**EBIT (loss)** 

EBIT (loss) was SEK -6.2 (-3.0) b. impacted by amortization of intangible assets from acquired businesses.

 <br> 10 Ericsson \| Fourth quarter and full year report 2022 Segment results

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##### [**Table of Contents**](#toc)
**Segment Other** 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK b. | Q4<br>2022 | Q4<br>2021 | YoY<br>change | Q3<br>2022 | QoQ<br>change | Jan-Dec<br>2022 | Jan-Dec<br>2021 | YoY<br>change |
|  Net sales | 0.6 | 0.5 | 18% | 0.5 | 8% | 2.2 | 2.0 | 8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Sales growth adj. for comparable units and FX* |  |  | 10% |  |  |  |  | 3% |
|  Gross income | 0.0 | 0.0 |  | -0.1 |  | -0.1 | 0.2 |  |
|  Gross margin | -2.3% | -3.3% |  | -27.9% |  | -5.7% | 7.9% |  |
|  EBIT (loss) | -2.3 | 0.3 |  | 0.0 |  | -3.6 | -0.3 |  |
|  EBIT margin | -414.4% | 59.4% |  | -3.9% |  | -164.2% | -14.2% |  |
|  EBITA (loss) | -2.3 | 0.3 |  | 0.0 |  | -3.6 | -0.3 |  |
|  EBITA margin | -412.6% | 59.4% |  | -3.7% |  | -163.7% | -14.2% |  |
|  Restructuring charges | 0.0 | 0.0 |  | 0.0 |  | 0.0 | 0.0 |  |
|  Measures excl. restructuring charges |  |  |  |  |  |  |  |  |
|  Gross margin excl. restructuring charges | -2.3% | -3.3% |  | -27.9% |  | -5.7% | 8.3% |  |
|  EBIT (loss) excl. restructuring charges | -2.3 | 0.3 |  | 0.0 |  | -3.6 | -0.3 |  |
|  EBIT margin excl. restructuring charges | -414.4% | 59.4% |  | -3.9% |  | -164.2% | -13.4% |  |
|  EBITA (loss) excluding restructuring charges | -2.3 | 0.3 |  | 0.0 |  | -3.6 | -0.3 |  |
|  EBITA margin excl. restructuring charges | -412.6% | 59.4% |  | -3.7% |  | -163.7% | -13.4% |  |

---

Fourth quarter comments

**Net sales** 

Sales adjusted for comparable units and currency increased by 10% YoY. Reported sales increased by 18% YoY to SEK 0.6 b.

**Gross income** 

Gross income remained stable with a slight loss. Gross margin was -2.3% (-3.3%).

**EBIT (loss)** 

Reported EBIT (loss) was SEK -2.3 (0.3) b. impacted by a provision of SEK -2.3 b. in relation to potential DPA breach resolution with U.S. Department of Justice, including estimated expenses for the previously announced extended monitorship.

EBIT in Q4 2021 was positively impacted by SEK 0.4 b. related to a gain from divestment of a data center in the Netherlands and revaluation of Ericsson Ventures investments.

Full-year comments

**Net sales** 

Sales adjusted for comparable units and currency increased by 3% compared to 2021. Sales in the media business were stable. Reported Sales increased by 8%.

**Gross income** 

Gross income decreased by SEK -0.3 b. primarily due to the previously announced charges related to a market exit (SEK -0.2 b.). For this reason, gross margin decreased to -5.7% compared to 7.9% in 2021.

**EBIT (loss)** 

Reported EBIT (loss) was SEK -3.6 (-0.3) b. impacted by a provision of SEK -2.3 b. in relation to potential DPA breach resolution with U.S. Department of Justice including estimated expenses for the previously announced extended monitorship. Furthermore, there was an impact of SEK -0.9 b for a provision in Q1, related to exit from operations in Russia and a previously announced market exit cost of SEK -0.2 b in Q3.

 <br> 11 Ericsson \| Fourth quarter and full year report 2022 Segment results

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##### [**Table of Contents**](#toc)
**Cash flow** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Q3 | Jan-Dec | Jan-Dec |
| Free cash flow bridge, SEK b. | 2022 | 2021 | 2022 | 2022 | 2021 |
|  **EBIT excl. restructuring charges** | **8.1** | **12.3** | **7.2** | **27.4** | **32.3** |
|  Depreciation, amortization and impairment losses | 3.5 | 2.6 | 2.6 | 10.5 | 9.0 |
|  Restructuring charges | -0.2 | -0.5 | -0.1 | -0.4 | -0.5 |
|  Changes in working capital<sup>1)</sup> | 10.7 | 2.7 | -3.3 | 0.6 | 4.0 |
|  Interest paid/received, taxes paid, and other | -2.2 | -1.9 | -1.8 | -7.3 | -5.7 |
|  **Cash flow from operating activities** | **19.9** | **15.2** | **4.7** | **30.9** | **39.1** |
|  Capex net and other investing activities | -2.3 | -1.1 | -1.4 | -6.1 | -4.6 |
|  Repayment of lease liabilities | -0.8 | -0.6 | -0.7 | -2.6 | -2.4 |
|  **Free cash flow before M&A** | **16.9** | **13.5** | **2.5** | **22.2** | **32.1** |
|  M&A | -0.4 | 0.2 | -51.4 | -51.7 | 0.1 |
|  **Free cash flow after M&A** | **16.4** | **13.7** | **-48.9** | **-29.5** | **32.1** |
|  Cash flow from operating activities | 19.9 | 15.2 | 4.7 | 30.9 | 39.1 |
|  Cash flow from investing activities | -11.9 | -2.7 | -58.9 | -34.4 | -19.9 |
|  Cash flow from financing activities | -3.9 | -4.9 | -5.3 | -15.9 | -9.3 |

---

Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements.

<sup>1</sup> Defined as Changes in operating net assets

Fourth quarter comments

• Inventory reduced by SEK -7.2 b. QoQ to SEK 45.8 b.

• Free cash flow before M&A was SEK 16.9 (13.5) b. in the quarter, supported by a decrease in working capital partly offset by lower EBIT.

**Cash flow from operating activities** 

Cash flow from operating activities was SEK 19.9 (15.2) b. Cash flow was supported by a decrease in working capital, driven by reduction in inventory, high cash collection from customers and a retroactive IPR payment as a result of a new contract with one licensee in Q4. The positive effect was partly offset by lower EBIT and a settlement with the US Federal Trade Commission (FTC) on historic consumer practices in Vonage with a negative cash effect of SEK -1.1 b. Taxes paid were SEK -1.9 (-1.2) b.

**Free cash flow** 

Free cash flow before M&A was SEK 16.9 (13.5) b. Capex net and other investing activities was SEK -2.3 (-1.1) b., mainly related to investment in test equipment and capitalization of development expenses. Repayment of lease liabilities was SEK -0.8 (-0.6) b. M&A activities were SEK -0.4 (0.2) b. and Free cash flow after M&A was SEK 16.4 (13.7) b.

**Cash flow from investing activities** 

Cash flow from investing activities was SEK -11.9 (-2.7) b. mainly as a result of purchases of interest-bearing securities.

**Cash flow from financing activities** 

Cash flow from financing activities was SEK -3.9 (-4.9) b. including repayment of lease liabilities. Dividends paid amounted to SEK -4.2 (-3.4) b. and were related to the second installment (SEK 1.25 per share) of dividend for 2021.

Full-year comments

**Cash flow from operating activities** 

Cash flow from operating activities was SEK 30.9 (39.1) b., following an increase in working capital mainly as a result of a decision to strengthen the supply chain resilience in view of global component shortage. In addition, the lower EBIT and higher taxes paid affected cash flow negatively compared with 2021.

Accounts receivable days of sales outstanding decreased to 61 (71) days while inventory turnover days increased to 93 (88) and payable days decreased to 85 (94). This resulted in an increase in working capital days to 69 (65) days.

**Free cash flow** 

Free cash flow before M&A was SEK 22.2 (32.1) b. or 8.2% (13.8%) in relation to sales, compared with the long-term target of 9-12%. Capex net and other investing activities was SEK -6.1 (-4.6) b. Repayment of lease liabilities was SEK -2.6 (-2.4) b. The increase is related to higher interest rates for property leases.

Free cash flow after M&A was SEK -29.5 (32.1) b. The decrease is primarily a result of the acquisition of Vonage in July 2022.

**Cash flow from investing activities** 

Cash flow from investing activities was SEK -34.4 (-19.9) b. due to the acquisition of Vonage with a purchase price paid of SEK -51.3 b., partly compensated by disposal of interest-bearing securities.

**Cash flow from financing activities** 

Cash flow from financing activities was SEK -15.9 (-9.3) b. including repayment of lease liabilities. During the year, dividends of SEK -8.4 (-6.9) b. were paid to shareholders. The net impact on cash flow from issuance and repayment of long-term debt, including repayment of debt related to Vonage, was SEK -5.3 b.

 <br> 12 Ericsson \| Fourth quarter and full year report 2022 Cash flow

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##### [**Table of Contents**](#toc)
**Financial position** 

---

| | | | |
|:---|:---|:---|:---|
| SEK b. | Dec 31<br>2022 | Dec 31<br>2021 | Sep 30<br>2022 |
|  **Gross cash** | **56.2** | **97.6** | **45.8** |
|  - Borrowings, current | 6.0 | 9.6 | 5.4 |
|  - Borrowings, non-current | 26.9 | 22.2 | 27.0 |
|  **Net cash** | **23.3** | **65.8** | **13.4** |
|  Equity | 133.3 | 107.1 | 136.8 |
|  Total assets | 349.5 | 305.6 | 361.2 |
|  Capital turnover (times) | 1.4 | 1.3 | 1.3 |
|  Return on capital employed (%) | 14.0% | 18.4% | 13.2% |

---

**Fourth quarter comments** 

• Net cash position was SEK 23.3 (65.8) b.

• The average maturity of long-term borrowings as of December 31, 2022, was 3.8 years.

• Ericsson established a Green Financing Framework.

On the back of solid operating cash flow generation, net cash increased by SEK 9.9 b. QoQ to SEK 23.3 b., including payment of remaining part of dividends of SEK -4.2 b.

Gross cash increased by SEK 10.4 b. QoQ to SEK 56.2 b.

Liabilities for post-employment benefits increased to SEK 27.4 b. from SEK 25.1 b. in the quarter, due to changes in demographic assumptions and experience adjustments. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liabilities for post-employment benefits would have been approximately SEK 10.9 b. (SEK 16.5 b. lower than the reported liabilities).

In the quarter, Ericsson established a Green Financing Framework to enable financing of investments in energy-efficient technologies, such as 4G, 5G and future 6G, and renewable energy solutions. See press release in section Other information.

**Full-year comments** 

Gross cash decreased to SEK 56.2 (97.6) b. due to the acquisition of Vonage, repayment of Vonage debt and dividends paid to Ericsson shareholders. The decrease was partly compensated by positive free cash flow. Net cash was SEK 23.3 (65.8) b.

Liabilities for post-employment benefits decreased to SEK 27.4 (36.1) b. primarily due to higher discount rates. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liabilities for post-employment benefits would have been approximately SEK 10.9 b. (SEK 16.5 b. lower than the reported liabilities).

The average maturity of long-term borrowings was 3.8 years as of December 31, 2022, an increase from 3.5 years 12 months earlier.

In February 2022, Ericsson issued a EUR 750 m. (SEK 7.8 b.) bond maturing in February 2027. In May 2022, Ericsson repaid its USD -1.0 b. (SEK -10.0 b.) bond.

In July 2022, Ericsson completed the acquisition of Vonage. The cash effect on the day of the acquisition amounted to SEK -51.3 b., adjusted by a positive cash flow hedge release of SEK 3.7 b. Following the acquisition, a Vonage debt of USD -0.6 b. (SEK -5.9 b.) was repaid.

Ericsson has an unutilized revolving credit facility of USD 2.0 b., linked to two of Ericsson's long-term sustainability goals. The facility is set to expire in 2027 with a one-year extension option.

Ericsson has established a commercial paper program for short-term borrowing. The program is a complement to Ericsson funding and has not yet been utilized.

Standard & Poor's (S&P) and Fitch both have a long-term BBB- rating on Ericsson with developing outlook from S&P and a stable outlook with Fitch. Moody's has a Ba1 rating with stable outlook.

The capital turnover increased to 1.4 (1.3) times, while Return on Capital Employed (ROCE) decreased to 14.0% (18.4%) as a result of higher capital employed and lower EBIT.

 <br> 13 Ericsson \| Fourth quarter and full year report 2022 Financial position

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##### [**Table of Contents**](#toc)
Key data points

**Market related** 

The global RAN equipment market is estimated to decline by -1% (0%) in 2023. North America is expected to decline by -7% (-5%), Europe by 0% (4%) and Mainland China by -4% (-2%). Source: Dell'Oro Mobile RAN 5-year forecast, Jan 2023. Numbers in parenthesis are from Dell'Oro Mobile RAN 5-year forecast, July 2022.

**Ericsson related** 

**Net sales** 

Reported average seasonality last 3 years (2020–2022), %

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Q4🡺Q1 | Q1🡺Q2 | Q2🡺Q3 | Q3🡺Q4 |
|  Networks | -23% | +12% | +4% | +22% |
|  Cloud Software & Services | -35% | +12% | +2% | +35% |

---

Net sales may show large variations between quarters, including currency changes.

**Operating expenses excluding Vonage and restructuring** 

Reported average seasonality last 3 years (2020–2022), SEK b.

Positive numbers = decrease in operating expenses.

Negative numbers = increase in operating expenses

<u>Q4🡺Q1</u> <u>Q1🡺Q2</u> <u>Q2🡺Q3</u> <u>Q3🡺Q4</u> <br> Ericsson Group +3.3 -1.5 +0.7 -2.4

Operating expenses may show large variations between quarters, including currency changes.

**Amortization of intangible assets** 

Amortization of intangible assets is expected to continue to be around SEK -0.9 b. per quarter, based on currency rates

December 31, 2022, for Ericsson group in 2023, of which around SEK -0.8 b. related to segment Enterprise.

**Currency exposure** 

Rule of thumb: A change by 10% of SEK to USD would have an impact of approximately +/-5% on net sales and approximately +/-1 percentage point on EBIT margin.

 <br> 14 Ericsson \| Fourth quarter and full year report 2022 Key data points

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##### [**Table of Contents**](#toc)
Parent Company

Income after financial items January–December 2022, was SEK 18.4 (9.3) b.

At the end of the year, gross cash (cash and cash equivalents plus interest-bearing securities, current and non-current) amounted to SEK 41.4 (80.5) b.

There was a decrease in intercompany lending of SEK 2.5 b. and an increase in intercompany borrowing of SEK 0.3 b. in the fourth quarter.

A provision was made in the quarter of SEK -2.3 billion (approx. USD 220 million) in relation to a potential resolution with the U.S. Department of Justice (DOJ) regarding previously announced, non-criminal, alleged breaches under its 2019 Deferred Prosecution Agreement (DPA). This provision also includes estimated expenses for the previously announced independent Compliance Monitorship extension.

The holding of treasury stock on December 31, 2022, was 4,009,306 Class B shares.

 <br> 15 Ericsson \| Fourth quarter and full year report 2022 Parent Company

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##### [**Table of Contents**](#toc)
Dividend, AGM, and Annual Report

**Dividend proposal** 

The Board of Directors proposes to the Annual General Meeting a dividend to the shareholders of SEK 2.70 (2.50) per share for the financial year 2022, representing a total dividend of approximately SEK 9.0 (8.3) b. The dividend is proposed to be paid in two installments, SEK 1.35 per share with the record date March 31, 2023, and SEK 1.35 per share with the record date September 29, 2023. Should the Annual General Meeting decide in favor of the proposal, payment of the dividend is expected to be made on April 5, 2023, and on October 4, 2023. The dividend considers this year's earnings and balance sheet structure, as well as coming years' business plans and expected economic development.

**Ericsson Annual General Meeting** 

The Annual General Meeting of shareholders will be held on March 29, 2023. Additional information about the Annual General Meeting of shareholders will be made available on Ericsson's website.

**Annual Report** 

The annual report will be made public and available on the Ericsson website www.ericsson.com in the first week of March.

 <br> 16 Ericsson \| Fourth quarter and full year report 2022 Dividend, AGM and Annual Report

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##### [**Table of Contents**](#toc)
**Other information** 

**Legal proceedings** 

On December 9, 2022, Ericsson and Apple reached a multi-year, global patent license agreement between the two companies. The agreement includes a cross-license relating to patented cellular standard-essential technologies and grants certain other patent rights. Furthermore, Ericsson and Apple have mutually agreed to strengthen their technology and business collaboration, including in technology, interoperability and standards development. This settlement ends the lawsuits filed by both companies in several countries, including in the United States District Court of the Eastern District of Texas, as well as the complaints filed before the United States International Trade Commission (USITC).

On March 3, 2022, Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed on behalf of investors in Ericsson securities in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as defendant. The amended complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company's adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq. In December 2022, Ericsson filed a motion to dismiss the complaint.

In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. The lawsuit was brought by US military service members and employees of US government contractors who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against Ericsson under the US Anti-Terrorism Act alleging that Ericsson made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, Ericsson filed a motion to dismiss the complaint. On December 20 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, named Ericsson AB, CEO Börje Ekholm and a former employee as additional defendants and also asserted additional allegations and claims.

As part of its defense to a now settled patent infringement lawsuit filed by Ericsson in 2013 in the Delhi High Court against Indian handset company Micromax, Micromax filed a complaint against Ericsson with the Competition Commission of India (CCI). The CCI decided to refer the case to the Director General's Office for an in-depth investigation. The CCI opened similar investigations against Ericsson in January 2014 based on claims made by Intex Technologies (India) Limited and, in 2015, based on a now settled claim from iBall. Ericsson has challenged CCI's jurisdiction in these cases before the Delhi High Court and is awaiting a decision on the appeal of the first instance court's decision.

In April 2019, Ericsson was informed by China's State Administration for Market Regulation (SAMR) Anti-monopoly bureau that SAMR has initiated an investigation into Ericsson's patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact finding and meetings with SAMR in order to facilitate the authority's assessments and conclusions.

In addition, the Company continues to negotiate with the DOJ in relation to a potential resolution regarding previously announced, non-criminal, alleged breaches under the DPA, as further described in Note 5 (Provisions) on page 41 of the Report.

In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, lawsuits, claims and proceedings incidental to the ordinary course of business. For information on risks e.g. relating to internal investigations, lawsuits, claims and proceedings, see the chapter Risk factors.

**Press releases** 

**Dec 7, 2022, \| Aeris to acquire IoT business from Ericsson** 

Ericsson (NASDAQ: ERIC) and Aeris Communications, a leading provider of Internet of Things (IoT) solutions based in San Jose, California, have signed an agreement for the transfer of Ericsson's IoT Accelerator and Connected Vehicle Cloud businesses.

Ericsson IoT Accelerator is used by over 9,000 enterprises to manage more than 95 million connected devices with 22 million eSIM connections globally. These enterprises and connections leverage Ericsson's growing ecosystem of over 35 communications service provider partners for global IoT cellular connectivity. Connected Vehicle Cloud is the most complete connected car platform on the market today, with frontrunners in automotive IoT using it to connect six million vehicles and counting across 180 countries.

Founded in 1996, Aeris is an expert in the IoT field, providing businesses with intelligent IoT cellular connectivity. Its solution stack is being brought to the market through an ecosystem of channel partners, communications service providers and direct sales organizations. Aeris' Intelligent IoT Network, targeting industry verticals such as transportation, energy, automotive and healthcare, gives communications service providers the opportunity to monetize new services on top of connectivity enabled by the IoT Accelerator. The company has already teamed up with several leading communication service providers including Softbank, AT&T, T-Mobile, and Vodafone, and is also working with leading automotive original equipment manufacturers.

Together, Aeris' and Ericsson's IoT platforms will connect over 100 million IoT devices worldwide, covering 190 countries. For customers, this provides the stability, reliability and global scale needed to support the full lifecycle of IoT programs across multiple industries, use cases and geographies. Through the transaction, Aeris will become a market leader in IoT, generate strong market synergies, and further simplify IoT for 9,400 enterprises by providing them with a global, feature rich platform with secure, reliable, and intelligent IoT solutions. To communications service providers, the transaction of Ericsson's IoT businesses to Aeris will result in a strong partner that continues to provide their customers with a leading IoT connectivity platform, while also offering new value-added services to help grow IoT revenue streams.

Åsa Tamsons, Head of Business Area Technologies & New Businesses at Ericsson, says: "Aeris has been successful in extending its IoT solution offering beyond connectivity and has the right focus, assets, and capabilities to realize the full value creation potential of Ericsson's IoT business and its strong market presence. Despite significant investments to address the fragmentation of the IoT market, Ericsson has only tapped into a limited part of the value chain, limiting the returns of such investments. The combined business will offer an unparalleled IoT platform for enterprises and new revenue streams for communication service providers, ultimately benefiting Ericsson's customers. Aeris is a good home for our IoT business."

With the cellular IoT market being a rather fragmented sector, a consolidation of two industry leading players is expected to accelerate the IoT market overall. IoT will be a fundamental and growing part of the 4G and 5G market.

Marc Jones, President and CEO of Aeris, says: "Building the best technology to support the success of our customers and drive innovation in the IoT space have always been at the forefront for Aeris. Our intelligent, software defined IoT network and Ericsson's leading connectivity management platform will provide the leading IoT technology stack in the industry. We look forward to bringing these new, transformational IoT solutions and Ericsson's IoT Accelerator and Connected Vehicle Cloud products to our customers."

 <br> 17 Ericsson \| Fourth quarter and full year report 2022 Other information

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##### [**Table of Contents**](#toc)
The transaction includes the transfer of Ericsson's assets and employees in its IoT business to Aeris. In addition, Ericsson intends to support Aeris with transition services and will acquire a small stake in the company. The transaction is expected to close in the first quarter of 2023.

The IoT business, with 2022 full year forecasted net sales of SEK 0.8 billion, has been the key driver of the losses in Business Area Technologies and New Businesses in the Enterprise segment. The transaction will eliminate quarterly losses of SEK 0.25 billion. The divestment, related cost and other portfolio optimizations will lead to a negative one-time EBIT impact of SEK 1.1 billion in Q4 2022, of which 80 percent being cash and the majority occurring in Q1 2023. The IoT business will be transferred to Segment Other in Q1 2023 in anticipation of closing of the transaction, with an expected EBIT loss of SEK 0.25 billion during the first quarter.

More information about Aeris Communications

Aeris to acquire IoT business from Ericsson

**Dec 9, 2022 \| Changes to Ericsson's Nomination Committee** 

Effective December 9, 2022, Niko Pakalén will replace Jonas Synnergren as representative for Cevian Capital Partners Limited in Ericsson's (NASDAQ:ERIC) Nomination Committee.

The Nomination Committee now consists of:

Johan Forssell, Investor AB;

Karl Åberg, AB Industrivärden;

Anders Oscarsson, AMF – Tjänstepension och Fonder;

Niko Pakalén, Cevian Capital Partners Limited; and

Ronnie Leten, the Chair of the Board of Directors

Johan Forssell is the Chair of the Nomination Committee.

Changes to Ericsson's Nomination Committee

**Dec 9, 2022 \| Ericsson and Apple sign global patent license agreement** 

Ericsson (NASDAQ: ERIC) and Apple have reached a multi-year, global patent license agreement between the two companies. The agreement includes a cross-license relating to patented cellular standard-essential technologies and grants certain other patent rights.

Furthermore, Ericsson and Apple have mutually agreed to strengthen their technology and business collaboration, including in technology, interoperability and standards development.

This settlement ends the lawsuits filed by both companies in several countries, including in the United States District Court of the Eastern District of Texas, as well as the complaints filed before the United States International Trade Commission (USITC).

Ericsson's IPR licensing revenues continue to be affected by several factors, including expired patent license agreements pending renewal, the technology shift from 4G to 5G, and possible currency effects and geopolitical impact going forward. Including effects of the agreement with Apple covering sales from January 15, 2022, and including ongoing IPR business with all other licensees, Ericsson estimates the fourth quarter 2022 IPR licensing revenues will be SEK 5.5-6.0 b.

Christina Petersson, Chief Intellectual Property Officer at Ericsson says: "We are pleased to settle the litigations with Apple with this agreement, which is of strategic importance to our 5G licensing program. This will allow both companies to continue to focus on bringing the best technology to the global market."

Over several decades, Ericsson has been a leading contributor to 3GPP and to the development of global mobile standards for the benefit of consumers and enterprises everywhere. The value of Ericsson's patent portfolio of more than 60,000 granted patents is strengthened by our

leading position as 5G vendor, and annual investments of more than USD 4 b in R&D. The company is confident of growing its IPR revenues with new 5G agreements and by expanding into other licensing areas long term.

Ericsson and Apple sign global patent license agreement

**Dec 14, 2022 \| Ericsson Announces Extension of Compliance Monitorship** 

Ericsson (NASDAQ: ERIC) announces that it has agreed with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) to extend the term of the Company's Independent Compliance Monitor for one year, to June 2024.

In 2019 Ericsson entered into a Deferred Prosecution Agreement (DPA) with the DOJ and a Consent Judgment with the SEC to resolve violations of the FCPA. As part of the resolution, Ericsson agreed to engage an independent compliance monitor for a period of three years while the Company strengthened its culture and established a rigorous anti-corruption, compliance and controls program.

This extension will allow the company, under the monitorship, to further embed best in class governance, risk management and compliance frameworks across the organization.

The Company remains committed to cooperating with the DOJ in connection with the resolution of the breach notification.

Börje Ekholm, President and CEO, says: "This extension is consistent with our commitment to continuous improvement of Ericsson's Ethics and Compliance program. We have made significant progress in changing our culture and implementing an enhanced compliance framework and system of internal controls, and we will use this additional time to ensure these improvements are ingrained in our organization, our daily interactions and the way we do business. We want to get this right and, to be a true industry leader, we have to conduct our business in the right way."

Ronnie Leten, Chair of the Board of Directors, says: "We are dedicated to acting with integrity in everything we do and continuing to align business operations with strengthened internal controls, governance and risk management processes. Our work with the monitor has meaningfully advanced our Ethics and Compliance program, and we welcome this extension of our engagement with the monitor."

Ericsson Announces Extension of Compliance Monitorship

**Dec 15, 2022 \| Ericsson Capital Markets Day 2022** 

Ericsson (NASDAQ: ERIC) hosts a Capital Markets Day on December 15, 2022. Executives from across the company join President and Chief Executive Officer, Börje Ekholm, to share insights on the company's strategic priorities for extending its leadership in mobile infrastructure, executing on its ambitions in the high-growth enterprise segment, and driving continued cultural change.

**Ericsson's strategy is to leverage leadership in mobile networks, drive focused expansion in enterprise, lead the industry with critical innovations, and capture strategic business opportunities** 

Ericsson continues to execute on its **Enterprise** strategy organized around two pillars, each leveraging the Company's strength in mobile networks: First, Enterprise Wireless Solutions, where Ericsson is driving business transformation through seamless secure network solutions addressing the multi-billion dollar opportunity of enterprise 5G. Second, the Global Network Platform, where Ericsson will be able to monetize 5G in new ways by transforming how network features such as speed and latency are globally exposed, consumed and paid for. With the completion of the Vonage acquisition, the cloud communication portfolio, including the communication platforms as a service (CPaaS) with its developer community, provides the business foundation to realize this ambition. Transforming Ericsson into a platform company creates a virtuous circle with new revenue streams for operators to monetize their network investments.

 <br> 18 Ericsson \| Fourth quarter and full year report 2022 Other information

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In **Networks**, Ericsson expects to expand its global footprint and enhance gross income through continued investments in technology for performance and cost leadership and, in addition, improve productivity and capital efficiency across the supply chain. In particular the Segment will continue investing in enhanced portfolio energy performance, enabled by Ericsson Silicon and innovating next-generation open architecture, such as Cloud RAN – key areas of strategic importance for its operator customers. Cloud RAN also offers potential in the enterprise segment.

Ericsson is implementing a revised and robust strategy for achieving profitability in the segment **Cloud Software and Services**. The segment addresses three distinct offering areas where Ericsson has leading positions including (i) Network Managed Services and (ii) Business and Operations Support Systems which show good business progress but are offset by (iii) Core Networks which has gained significant market share but with negative development of profitability. Key priorities include limiting subscale software development, accelerating automation to lower deployment and maintenance efforts and changing focus from market share gains to profitable business. The target is to reach break-even in full-year 2023 with gradual improvements towards long-term sustainable profitability.

**Overall RAN market is expected to be flat with growth of 11% p.a. in the 5G RAN market over the next 3 years** 

Ericsson is planning for a flat RAN market and is structuring its cost base and operations accordingly. Underlying the flat market is a technology shift to 5G from earlier generation. 5G build-out is still in its early days with only about 20% of all base station sites outside China installed with 5G mid-band. Given the rapid increase in network traffic levels, operators' investment in performance and capacity is expected to remain robust. The 5G RAN market is expected to grow by over 11% per annum over the next three years, with potential further upside from areas such as Fixed Wireless Access, Enterprise connectivity, XR and Mission Critical Services. With a leading position in 5G, Ericsson is confident in its ability to capitalize on the long runway of opportunities presented by 5G and achieve its long-term targets. With investments in a competitive portfolio, Ericsson remains committed to growing its 39% RAN market share outside of China by 1% per year and increasing gross profit.

*Long-term Financial and Sustainability Targets* 

The trends on operator capex identified in the Q3 report remain. After record capex levels in North America in 2022, build-out is expected to normalize in 2023, beginning in Q4 of this year. At the same time, revenues from share gains in other markets are expected to accelerate during Q4 and into 2023. As disclosed in the Q3 report, while these market share gains contribute to gross profit, they will be margin dilutive. In addition, following easing of the supply chain, there are indications that some customers in advanced markets may adjust their inventory levels continuing into 2023.

Looking to 2024 and beyond, the long-term investments in mobile infrastructure are driven by underlying traffic development and these are expected to continue developing favorably; this gives confidence on the longer-term development of investments.

Ericsson confirms its long-term target of an EBITA margin in the range of 15 to 18% and expects to reach the lower end by 2024. Margin improvement will be supported by the (i) acceleration of structural cost out efforts targeting a run-rate gross reduction of SEK 9 b. by 2023 of which 70% are in cost of goods sold and 30% in SG&A, (ii) growth of IPR revenues, (iii) improved commercial terms and accelerated cadence of new products, (iv) after re-establishing technology leadership, focus is shifting towards productivity in R&D, and (v) the turnaround of BCSS business. This will offset headwinds such as business mix changes and inflation.

There is significant growth potential in IPR revenues over the coming 18-24 months. The recently announced agreement puts Ericsson in a good position to pursue other currently unlicensed actors. In addition, new areas such as consumer electronics provide a further growth opportunity.

The company aims at generating Free Cash Flow before M&A of 9%-12% of sales. During 2022, there has been significant investments in working capital due to geo-resiliency as well as a tight supply chain. Going forward Ericsson expects that the working capital will gradually be released as large roll-out projects are completed, and thus Free Cash Flow before M&A will improve.

Connectivity is a fundamental enabler of digitalization and Ericsson sees 5G as a key driver. Digitalization of industries and society will be critical to tackle the climate crisis. Ericsson remains committed to be Net Zero within its own operations by 2030 and to reach Net Zero across the value chain by 2040.

*Building a culture of ethics and integrity* 

Ericsson is on a critically important journey to transform its culture and to be a leader in how it conducts business. The Company is accelerating its cultural transformation and enhancing its governance. The approach to global risk management has been revamped – putting in place strong central oversight and a streamlined process to effectively anticipate, identify and mitigate material risks at all levels. The Company also continues its work in establishing a sustainable program of compliance and controls that is properly embedded in the organization. Moreover, Ericsson is driving simplification to enhance accountability and our execution effectiveness.

*Capital allocation supporting business strategy and value creation* Ericsson is introducing near-term capital allocation priorities with a central focus on generating free cash flow in line with the target of 9-12% free cash flow before M&A over net sales, deploying our capital wisely for maximum value creation, while safeguarding balance sheet strength.

Given uncertainties, ensuring a strong financial position is critical. Priority will be given to organic and inorganic investments to support strategy execution and ensure technology and market leadership. As the company is fully focused on delivering the Vonage and Cradlepoint acquisitions, M&A will be limited to bolt-on acquisitions with attractive returns and clear strategic fit. Further, Ericsson targets a stable to progressive dividend with a policy based on earnings, business outlook and financial position.

Börje Ekholm, President and CEO, commented: "With 5G, everything that can go wireless, will go wireless. Long-term, the industry is moving towards the network as a platform for innovation where 5G and future 6G capabilities will be monetized in new ways. Our strategy and industry leadership puts us in an advantageous position to capitalize on this development and thereby create new revenue streams for our operator customers that complement subscription revenues. This is an exciting future, and we remain fully committed to continue executing on this strategy as we build a stronger Ericsson for the long-term."

Carl Mellander, CFO, commented: "Over the last years, our strategy execution has been visible in the financial results and the strengthened financial position with strong free cash flow generation and return on invested capital. Our expected continued strong business performance, in combination with measures to offset external headwind, puts Ericsson on track to reach the lower end of our long-term EBITA margin target range by 2024."

*Speakers and details of the event* 

President and CEO Börje Ekholm and CFO Carl Mellander, is joined by members of the company's Executive Team including Erik Ekudden, CTO, Fredrik Jejdling, Executive Vice President and Head of Business Area Networks, Per Narvinger, Head of Business Area Cloud Software & Services, George Mulhern, Head of Business Area Enterprise Wireless Solutions, Rory Read, Head of Business Area Global Communications Platform and Niklas Heuveldop, Head of Market Area North America.

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Ericsson's Capital Markets Day event can be accessed via the Ericsson website: www.ericsson.com/en/investors/events-and-presentations/cmd

Presentation materials can also be downloaded from the website once the webcast has started.

Ericsson Capital Markets Day 2022

**Dec 15, 2022 \| Ericsson divests its local customer support business in Russia** 

Ericsson's (NASDAQ: ERIC) wholly owned Russian subsidiary has entered into an asset transfer agreement to divest its local customer support business in Russia to a Russian company owned by former operational managers of Ericsson´s Russian subsidiary.

The transaction includes a transfer of approximately 40 Ericsson employees, and certain assets and contracts related to the business.

The customer support business is a local business engagement that does not involve the export of hardware, software, or related services to mobile operators in Russia.

Following Russia's invasion in Ukraine, Ericsson announced the suspension of operations and deliveries to customers in Russia and an orderly wind-down in accordance with applicable sanctions. Approximately 400 Ericsson employees in Russia have been notified of layoffs and have been leaving the company as operations have been discontinued.

Going into 2023, Ericsson expects to have a small presence in Russia on a local basis. A legal entity owned by Ericsson will continue to be registered to complete the wind-down and to fulfill legal, contractual, and administrative requirements.

Ericsson divests its local customer support business in Russia

**Dec 20, 2022 \| Ericsson presents a Green Financing Framework** 

Ericsson (NASDAQ: ERIC) has established a Green Financing Framework to enable the company to issue green bonds and other green financing instruments. The proceeds will be exclusively allocated to investments in energy efficiency and renewable energy.

The framework has been developed in accordance with the 2021 ICMA Green Bond Principles (GBP). CICERO Shades of Green, a Norway-based institute for interdisciplinary climate research and a leading global provider of assessments related to green and sustainable financing, has acted as second party opinion provider.

Carl Mellander, Ericsson's CFO, says: "This framework is part of our overall ambition in sustainable finance, and complements our existing sustainability linked Revolving Credit Facility. Proceeds raised under the framework will include capital expenditures and R&D investments in enhanced portfolio energy performance in our existing 4G and 5G offerings as well as future 6G solutions. Extending our leadership in energy efficiency is a key priority for Ericsson and of strategic importance for our operator customers."

Heather Johnson, VP of Sustainability and Corporate Responsibility, says: "This framework is a concrete step in further embedding sustainability across the company, in this case strengthening our climate action and financial activities. Investments based on this framework will help drive the development and deployment of energy-efficient technology that support the Net Zero ambition not only in our own industry but enables the digital and green transition across industries and society."

The Green Financing Framework and the second party opinion are available at Ericsson website.

Ericsson presents a Green Financing Framework

**Post-closing events** 

**Press releases** 

**Jan 4, 2023 \| Ericsson is taking action to accelerate** 

**profitability in Cloud Software and Services** 

Ericsson (NASDAQ: ERIC) is continuing to execute on its revised strategy in segment Cloud Software and Services. As outlined at the recent Capital Markets Day, key priorities include limiting subscale software development, accelerating automation to lower deployment and maintenance efforts and changing focus from market share gains to profitable business.

With the revised Cloud Software and Services strategy, Ericsson is laying the foundation to turn the segment around. The target is to reach break-even in full-year 2023 on EBIT/EBITA level with gradual improvements towards long-term attractive profitability.

Following a portfolio and customer contract review, the Company has decided to exit certain subscale agreements and product offerings, with a one-off negative impact on EBIT of SEK -0.8 b. in Q4 2022, of which SEK -0.7 b. is expected to impact cash flow, mainly in 2023.

Ericsson's Q4 and full-year 2022 results will be published January 20 at approximately 7:00 CET.

Ericsson is taking action to accelerate profitability in cloud software and services

**Jan 11, 2023 \| Ericsson Nomination Committee´s proposal for board of directors. Jan Carlson proposed as new Chairman** 

The Nomination Committee of Ericsson (NASDAQ: ERIC) has informed the Company that it proposes that the shareholders elect at the Annual General Meeting 2023 ten ordinary board members with no deputy directors. The Nomination Committee proposes that the following persons be elected as board members:

Jan Carlson, Chairman (re-election)

Helena Stjernholm (re-election)

Jacob Wallenberg (re-election)

Jon Fredrik Baksaas (re-election)

Carolina Dybeck Happe (re-election)

Börje Ekholm (re-election)

Eric Elzvik (re-election)

Kristin S. Rinne (re-election)

Christy Wyatt (new election)

Jonas Synnergren (new election)

Ronnie Leten, the current Chairman of the board, has informed he will not stand for re-election to the Board at the next Annual General Meeting. Ronnie was elected to the Ericsson board of directors as Chairman in 2018 and will continue to serve as Chairman for the remainder of his term. The Nomination Committee hence proposes that, the current board member, Jan Carlson be elected by the Annual General Meeting 2023 as new Chairman of the Ericsson Board.

Kurt Jofs and Nora Denzel have informed the Nomination Committee that they will not be available for re-election at the Annual General Meeting 2023.

It is the Nomination Committee's assessment that each of the proposed board members, with their respective experiences, adds valuable expertise and experience to the Board. Christy Wyatt's and Jonas Synnergren's extensive international business experiences and deep software, enterprise and technology expertise will be of additional value to Ericsson and will further strengthen the board of directors.

Christy Wyatt is born 1972 and holds a Diploma of Scientific Computer Programming Technology from the College of Geographic Sciences in Canada. Christy has long-term international business experience from senior management roles within DTEX Systems, Good Technology and Motorola and is currently the President and CEO of Absolute Software.

Jonas Synnergren is born 1977 and holds a Master of Science in Business and Economics from Stockholm School of Economics in Sweden. Jonas has long-term international business experience as a Board member of Veoneer, Tieto and Metso and is currently a board member of Nordea. In addition, Jonas is Senior Partner in Cevian Capital, one of Ericsson's shareholders.

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Information of the board members proposed for re-election can be found on the company's website (www.ericsson.com).

The company expects to hold its Annual General Meeting on March 29, 2023, and the Nomination Committee's complete proposals and motivated statement will be announced in due time before the Annual General Meeting.

Johan Forssell, Chairman of the Nomination Committee says: "We believe that Ericsson has a strong board of directors to continue to drive the strategic agenda and further strengthen the culture of the company. Jan Carlson has a long career both as CEO and Chairman, as well as good knowledge of Ericsson after serving many years on the board. His international experience, technology background and personal qualities make him an excellent successor as Chairman of the Board, securing a smooth transition from Ronnie Leten."

Ronnie Leten says: "It has been an honor to serve on the Ericsson board since 2018 and I am very proud of what has been achieved. Today Ericsson is a very strong company both strategically and financially. The company has brought 5G to the world and regained its technology leadership."

Ronnie continues: "Börje Ekholm, since stepping in as CEO, has turned the company around and this continues with the important governance and cultural transformation which is underway."

Commenting on the matter, Jan Carlson stated: "Having been on the Board since 2017, it is an honor to be put forward for the Ericsson Chairmanship. I look forward to the Annual General Meeting and to working closely with Börje, the Board and the executive team as we continue to execute on our strategy."

Ericsson's Nomination Committee consists of Johan Forssell, Investor AB (Chairman of the Nomination Committee); Karl Åberg, AB Industrivärden, Anders Oscarsson, AMF – Tjänstepension och Fonder, Niko Pakalén, Cevian Capital Partners Limited, and Ronnie Leten, Chairman of the Board.

Ericsson Nomination Committee´s proposal for board of directors. Jan Carlson proposed as new Chairman

**Jan 12, 2023 \| Ericsson makes provision in fourth quarter of 2022 in relation to potential DPA breach resolution with U.S. Department of Justice** 

Ericsson (NASDAQ: ERIC) announces that it is now in a position to make a provision of SEK 2.3 billion (approx. USD 220 million) in relation to a potential resolution with the U.S. Department of Justice (DOJ) regarding previously announced, non-criminal, alleged breaches under its 2019 Deferred Prosecution Agreement (DPA). Ericsson has not reached a resolution with the DOJ regarding these alleged breaches and discussions are ongoing.

This charge, which will be booked in the Company's fourth quarter 2022 financial results, will be SEK 2.3 billion (approx. USD 220 million). The Company believes that this is a sufficiently reliable estimate of the financial penalty associated with any potential breach resolution, and this provision also includes estimated expenses for the previously announced extended monitorship. The provision will be booked as Other Operating Expenses in the income statement of Segment Other.

The Company's internal investigation and its cooperation with authorities in relation to the allegations in the 2019 Iraq-related internal investigation report remain open and ongoing.

Since 2019, Ericsson has taken significant remedial measures, overseen by the Board of Directors. These include enhancing its group-wide approach to risk management and strengthening its compliance program and internal controls. The Company agreed in December 2022 to extend its independent compliance monitorship until June 2024 to further our efforts to embed best-in-class compliance, risk management and internal controls frameworks across the organization.

*Background* 

In 2019, Ericsson entered into the DPA in order to resolve past (prior to 2017) Foreign Corrupt Practices Act (FCPA) violations relating to misconduct in certain countries. The 2019 agreement provided that, in the event of any breach of its ongoing DPA obligations, the Company could be prosecuted for the historic FCPA violations covered by the DPA.

As announced in October 2021 and March 2022, the DOJ notified Ericsson that it failed to provide documents and information to the DOJ in a timely manner and did not adequately report to the DOJ certain information relating to a 2019 Iraq-related internal investigation.

The DOJ has not alleged or charged Ericsson with any new criminal misconduct since the start of the DPA.

Ericsson makes provision in fourth quarter of 2022 in relation to potential DPA breach resolution with U.S. Department of Justice

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**Risk factors** 

Ericsson is exposed to a number of risks in its activities. To stimulate identification and support cross-functional treatment within the Ericsson Group, risks are grouped in a number of categories, including for example risks relating to technology, IPR, compliance, project execution, operations, products and services, treasury and accounting, the geopolitical environment, M&A, cyber security and occupational health and safety.

Ericsson's risk management is embedded into strategy development and operational processes and is a part of the Ericsson Group Management System to ensure accountability, effectiveness, efficiency, business continuity and compliance. Risks are defined in both a short-term and long-term perspective and are related to long-term objectives as per the strategic direction as well as to short-term objectives. Risk factors and uncertainties of relevance to Ericsson are described in the Annual Report 2021 and in the Annual Report on Form 20-F 2021 (in the following the "Annual Report 2021"). Updates to these risk factors and uncertainties observed by Ericsson that are deemed of short-term relevance include, but are not limited to, the following risks described below:

**We are subject to certain US and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations. Ericsson may be subject to further adverse consequences under the DPA with the DOJ and the injunction issued in connection with the settlement with the SEC, both from 2019, and other investigations by governmental authorities.** 

The Company is required to comply with anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations in jurisdictions where Ericsson does business. In addition, some of the international locations in which we operate lack a developed legal system and have elevated levels of corruption affecting many aspects of conducting business. When necessary, the Company investigates potential instances of corruption, including potential violations of anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism laws, rules and regulations.

The Company cannot assure that its employees, subcontractors and agents have complied with these requirements in the past, and the Company faces exposure to possible past, present and future violations of these requirements by its employees, subcontractors and agents. Actions by Ericsson's employees, or by third-party intermediaries acting on the Company's behalf in violation of these laws, rules or regulations, whether carried out in the US or elsewhere in connection with the conduct of Ericsson's business, may expose the Company to significant civil or criminal liability that would materially harm the Company, including its reputation, business, financial condition, funding, operating results cash flows, and prospects.

In December 2019, Ericsson entered into a deferred prosecution agreement (DPA) with the DOJ resolving the DOJ's investigations into Ericsson's business dealings in Djibouti, China, Vietnam, Indonesia and Kuwait.. The DPA has a three-year term and includes a guilty plea by our Egyptian subsidiary to a criminal violation of the US Foreign Corrupt Practices Act's (FCPA) anti-bribery provisions.

Under the DPA, the Company admitted to the conduct described in the DPA's statement of facts, and the DOJ agreed to defer prosecution of Ericsson for the DPA's three-year term if Ericsson does not violate the terms of the DPA.

In October 2021, the DOJ notified us of its determination that we breached our obligations under the DPA by failing to provide required information to the DOJ.

In February 2022, the Company publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period 2011–2019. The investigation found serious breaches of compliance rules and the Company's Code of Business Ethics and identified evidence of corruption-related misconduct and other serious violations, including payments to intermediaries and the potential use of alternate transport routes in connection with circumventing Iraqi Customs, at a time when terrorist organizations, including ISIS, controlled some transport routes. The investigation also identified payment schemes and cash transactions that potentially created the risk of money laundering. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations.

As a result of the investigation, several employees were terminated from the Company and multiple other disciplinary and other remedial actions were taken.

In March 2022, the DOJ informed Ericsson that, before entering into the DPA, the Company provided insufficient information to the DOJ about the Company's 2019 internal investigation into conduct in Iraq. The DOJ also determined that the Company breached the DPA by failing to inform the DOJ about the investigation post-DPA. The DOJ's determination that the Company violated the DPA allows the DOJ, in its sole discretion, to commence prosecution for criminal violations, including the charged conspiracy to violate the FCPA's anti-bribery, books and records and internal controls provisions referenced in the DPA. In doing so, the DOJ could rely upon Ericsson's DPA admissions and would benefit from Ericsson's waiver of certain procedural and evidentiary defences. The DOJ also may, in its sole discretion, extend the term of the DPA.

The Company is in communication with the DOJ regarding the facts and circumstances of the breach determinations and is committed to cooperating with the DOJ to resolve the matters. While the length of the process cannot be determined, the resolution of these matters could result in a range of actions by the DOJ, including criminal prosecution, civil or criminal penalties and additional monetary fines or penalties.

In June 2022, the SEC informed us that it opened an investigation concerning matters described in the Company's 2019 Iraq investigation report. Under Ericsson's consent judgment with the SEC, we are permanently enjoined from violating the FCPA's anti-bribery, books and records and internal controls provisions. Violations of the injunction or consent judgment could subject us to new civil and criminal penalties as well as a new enforcement action. In December 2022, the Company agreed with the DOJ and SEC to extend the term of the Company's independent Compliance Monitor for one year, to June 2024.

Ericsson is committed to cooperating with the DOJ and the SEC to resolve these matters, the outcome of which we are unable to predict. The Company made a provision in the fourth quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation to a potential resolution with the DOJ regarding previously announced, non-criminal, alleged breaches under the DPA. The provision also includes estimated expenses for the previously announced extended Compliance Monitorship. The eventual financial penalty could differ materially from the provision. The Company's internal investigation and its cooperation with authorities in relation to the allegations made in the 2019 Iraq report remain open and ongoing.

We also face other negative consequences from these matters, including matters under review as part of our ongoing and future communications with governmental authorities to comply with our

 <br> 22 Ericsson \| Fourth quarter and full year report 2022 Risk factors

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obligations under the DPA. Governmental authorities in the US and elsewhere are investigating us for possible violations of applicable anti-corruption (including anti-bribery, anti-money laundering, sanctions, terror finance and anti-terrorism) laws, rules or regulations, and we currently face litigation related to these matters. Any criminal prosecution or civil or criminal penalties imposed as a result of non-compliance for any reason with the DPA or consent judgment could have a material adverse effect on the Company, including its reputation, business, financial condition, funding, operating results, cash flows, or prospects.

Ericsson may also face other potentially negative consequences relating to the investigations by, and settlements with, the DOJ and SEC, or to other potential investigations. Enforcement authorities in the US or elsewhere, including the SEC, the DOJ or OFAC, could investigate us for additional possible violations of applicable anti-corruption (including anti-bribery, anti-money laundering, sanctions, terror finance and anti-terrorism) laws, rules or regulations of which we are aware or unaware at any time. Such violations could result in severe reputational damage, and have a materially adverse effect on Ericsson, including its reputation, business, financial condition, operating results, cash flows, or prospects and could constitute a violation of the DPA or the consent judgment with the SEC. Neither the DPA nor the consent judgment prevents the DOJ, SEC or any other authorities from carrying out investigations with respect to facts not covered in the agreements or in other jurisdictions, or prevents other authorities from carrying out investigations related to these or other matters. Similarly, the resolutions with the DOJ and SEC do not foreclose third parties, such as competitors, customers, suppliers, or shareholders, from commencing litigation related to these or other matters.

There can be no assurance that the remedial measures described above and any others Ericsson may take in the future will be effective or that there will not be a finding of material weakness in Ericsson's internal controls. Any one or more of the foregoing could have a material adverse effect on the Company, including its reputation, business, financial condition, funding, operating results, cash flows, or prospects.

Additionally, any ongoing media or governmental interest in investigations and resolutions or additional company investigations that we are currently undertaking or may undertake in the future could result in the discovery of additional facts, impact the public perception of Ericsson and result in reputational harm and other negative consequences. For example, customers or suppliers may reconsider their relationships with the Company, or governmental and regulatory authorities in the relevant jurisdictions or elsewhere could seek to penalize the Company or place restrictions on its operations or ability to participate in public tenders. Harm to reputation, or any resulting disruption in customer or supplier relationships, could have a material adverse impact on Ericsson, including its reputation, business, financial condition, funding, operating results, cash flows, or prospects.

**Ericsson is involved in lawsuits, legal proceedings and regulatory investigations which, if determined unfavorably, could require the Company to pay substantial damages, fines and/or penalties.** 

In the normal course of Ericsson's business Ericsson is involved in legal proceedings. These proceedings include matters such as commercial disputes, claims regarding intellectual property, antitrust, tax and labor disputes, as well as government inquiries and investigations. Legal proceedings can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a particular matter could have a material adverse effect on Ericsson's business, operating results, financial position and reputation. As a publicly listed company, Ericsson may be exposed to lawsuits in which plaintiffs allege that the Company or its officers have failed to comply with securities laws, stock market regulations or other laws, regulations or requirements. Whether or not there is merit to such claims, the time and costs incurred to defend the Company and its officers and the potential settlement or compensation to the plaintiffs could have significant impact on Ericsson's reported results and reputation.

In addition, the Company is from time to time and may in the future be subject to additional inquiries, litigation or other proceedings or actions, regulatory or otherwise, arising in relation to the matters described above and related litigation and investigative matters. An unfavorable outcome of any such litigation or regulatory proceeding or action could have a material adverse effect on Ericsson's business, financial condition and operating results.

In April 2019, Ericsson was informed by China's State Administration for Market Regulations (SAMR) Anti-monopoly bureau that SAMR has initiated an investigation into Ericsson's patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact-finding and meetings with SAMR in order to facilitate the authority's assessment and conclusions. In case of adverse findings, SAMR has the power to impose behavioral and financial remedies, which may have material adverse effects on Ericsson's business, financial condition and operating results.

On March 3, 2022, Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed on behalf of investors in Ericsson securities in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as a defendant. The amended complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company's adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq. In December 2022, Ericsson filed a motion to dismiss the complaint.

In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. The lawsuit was brought by US military service members and employees of US government contractors who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against Ericsson under the US Anti-Terrorism Act alleging that Ericsson made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, Ericsson filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, named Ericsson AB, CEO Börje Ekholm and a former employee as additional defendants and also asserted additional allegations and claims.

An unfavorable outcome of any of the abovementioned proceedings may have material adverse effects on Ericsson's business, financial condition and operating results. For additional information regarding certain of the inquiries and lawsuits in which Ericsson is involved, see "Legal proceedings" in the Report.

**5G volumes shifting into more volatile markets** 

As mentioned in the Annual Report 2021 risk factor 1.9, telecom investment levels fluctuate and are affected by many factors. In addition to the risk factor described in the Annual Report 2021, with 5G volume at scale shifting from early 5G markets into markets with higher volatility and as Ericsson is establishing business relationship with new customers, the levels of uncertainty and fluctuation can increase going forward. For example, both sales and profit can be impacted due to a significant variation in underlying market and/or product and services mix. Furthermore, Ericsson might fail to anticipate customer demand properly, leading to an over or under supply of components, production capacity and deployment capabilities.

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Stockholm, January 20, 2023

Telefonaktiebolaget LM Ericsson (publ)

The Board of Directors

Corporate Reg. No. 556016-0680

Date for next report: April 18, 2023.

 <br> 24 Ericsson \| Fourth quarter and full year report 2022 Risk factors

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**Editor's note** 

**Press briefing and live webcast** 

Ericsson invites media, investors and analysts to a conference call on January 20, 2023, starting at 9:00 am CET.

Live audio webcast of the conference call as well as supporting slides will be available at:

www.ericsson.com/investors and

www.ericsson.com/press

Replay of the conference call will be available approximately one hour after the call has ended and will remain available for seven days.

For further information, please contact:

Carl Mellander, Senior Vice President, Chief Financial Officer

Phone: +46 72 583 88 70

E-mail: investor.relations@ericsson.com or

media.relations@ericsson.com

Stella Medlicott, Senior Vice President, Chief Marketing and Communications Officer

Phone: +46 73 095 65 39

E-mail: investor.relations@ericsson.com or

media.relations@ericsson.com

Telefonaktiebolaget LM Ericsson

Org. number: 556016-0680

Torshamnsgatan 21

SE-164 83 Stockholm

Phone: +46 10 719 00 00

www.ericsson.com

**Investors** 

Peter Nyquist, Vice President,

Head of Investor Relations

Phone: +46 70 575 29 06

E-mail: peter.nyquist@ericsson.com

Lena Häggblom, Director,

Investor Relations

Phone: +46 72 593 27 78

E-mail: lena.haggblom@ericsson.com

Alan Ganson, Director,

Investor Relations

Phone: +46 70 267 27 30

E-mail: alan.ganson@ericsson.com

**Media** 

Kristoffer Edshage, Director of Corporate Media

Phone: +46 72 220 44 46

E-mail: media.relations@ericsson.com

Corporate Communications

Phone: +46 10 719 69 92

E-mail: media.relations@ericsson.com

 <br> 25 Ericsson \| Fourth quarter and full year report 2022 Editor's note

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**Forward-looking statements** 

This report includes forward-looking statements, including statements reflecting management's current views relating to the growth of the market, future market conditions, future events, financial condition, and expected operational and financial performance, including, the following:

• Our ability to reach a mutually agreeable resolution with DOJ regarding alleged DPA breaches

• Any such potential resolution could involve a financial penalty that differs materially from the provision

• Our ability to reach a full and final resolution that covers all past conduct, including allegations of past conduct in Iraq

• Our goals, targets, strategies, planning assumptions and operational or financial performance expectations, such as the investor day key messages and our targets and strategies as described in the introductory bullets,
the CEO comments, the Segment descriptions and in Other information

• Industry trends, future characteristics and development of the

• markets in which we operate

• Our future liquidity, capital resources, capital expenditures, cost savings and profitability

• The expected demand for our existing and new products and services as well as plans to launch new products and services

• including research and development expenditure

• The ability to deliver on future plans and to realize potential for

• future growth

• The expected operational or financial performance of strategic

• cooperation activities and joint ventures

• The time until acquired entities and businesses will be integrated and accretive to income

• Technology and industry trends including the regulatory and

• standardization environment in which we operate, competition

• and our customer structure.

The words "believe," "expect," "foresee," "anticipate," "assume," "intend," "likely," "projects," "may," "could," "plan," "estimate," "forecast," "will," "should," "would," "predict," "aim," "ambition," "seek," "potential," "target," "might," "continue," or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

We caution investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond our control that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Important factors that could affect whether and to what extent any of our forward-looking statements materialize include, but are not limited to, the factors described in the section "Risk factors", and in "Risk factors" in the Annual Report 2021.

These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this report, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulation.

 <br> 26 Ericsson \| Fourth quarter and full year report 2022 Forward-looking statements

------

##### [**Table of Contents**](#toc)
**Auditors' Review Report** 

**Introduction** 

We have reviewed the condensed interim financial information (year-end report) of Telefonaktiebolaget LM Ericsson (publ.) as of December 31, 2022, and the twelve months period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the year-end report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this year-end report based on our review.

**Scope of review** 

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, *Review of Interim Report Performed by the Independent Auditor of the Entity.*

A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

**Conclusion** 

Based on our review, nothing has come to our attention that causes us to believe that the year-end report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, January 20, 2023

Deloitte AB

Thomas Strömberg

Authorized Public Accountant

 <br> 27 Ericsson \| Fourth quarter and full-year report 2022 Auditors' Review Report

------

##### [**Table of Contents**](#toc)
**Financial statements and other information** 

**Contents** 

---

| | |
|:---|:---|
|  **[Financial statements (unaudited)](#tx391568_1)** | **29** |
|  [Condensed consolidated income statement](#tx391568_2) | 29 |
|  [Condensed statement of comprehensive income (loss)](#tx391568_3) | 29 |
|  [Condensed consolidated balance sheet](#tx391568_4) | 30 |
|  [Condensed consolidated statement of cash flows](#tx391568_5) | 31 |
|  [Condensed consolidated statement of changes in equity](#tx391568_6) | 32 |
|  [Condensed consolidated income statement – isolated quarters](#tx391568_7) | 32 |
|  [Condensed consolidated statement of cash flows – isolated quarters](#tx391568_8) | 33 |
|  [Condensed Parent Company income statement](#tx391568_9) | 34 |
|  [Condensed Parent Company statement of comprehensive income (loss)](#tx391568_10) | 34 |
|  [Condensed Parent Company balance sheet](#tx391568_11) | 35 |
|  **[Accounting policies and Explanatory notes (unaudited)](#tx391568_12)** | **36** |
|  [Note 1 – Accounting policies](#tx391568_13) | 36 |
|  [Note 2 – Critical accounting estimates and judgements](#tx391568_14) | 36 |
|  [Note 3 – Segment information](#tx391568_15) | 37 |
|  [Note 4 – Financial income and expenses, net](#tx391568_16) | 41 |
|  [Note 5 – Provisions](#tx391568_17) | 42 |
|  [Note 6 – Financial risk management](#tx391568_18) | 43 |
|  [Note 7 – Cash flow](#tx391568_19) | 44 |
|  [Note 8 – Contingent liabilities and Assets pledged as collateral](#tx391568_20) | 44 |
|  [Note 9 – Share information](#tx391568_21) | 45 |
|  [Note 10 – Employee information](#tx391568_22) | 45 |
|  [Note 11 – Business combinations](#tx391568_23) | 46 |
|  **[Alternative performance measures (unaudited)](#tx391568_24)** | **47** |
|  [Sales growth adjusted for comparable units and currency](#tx391568_25) | 47 |
|  [Items excluding restructuring charges](#tx391568_26) | 48 |
|  [EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges](#tx391568_27) | 49 |
|  [Rolling four quarters of net sales and EBIT margin excluding restructuring charges (%)](#tx391568_28) | 49 |
|  [Gross cash and net cash, end of period](#tx391568_29) | 50 |
|  [Capital employed](#tx391568_30) | 50 |
|  [Capital turnover](#tx391568_31) | 50 |
|  [Return on capital employed](#tx391568_32) | 51 |
|  [Equity ratio](#tx391568_33) | 51 |
|  [Return on equity](#tx391568_34) | 51 |
|  [Adjusted earnings per share](#tx391568_35) | 52 |
|  [Free cash flow before M&A / Free cash flow after M&A](#tx391568_36) | 52 |
|  [Sales growth by segment adjusted for comparable units and currency](#tx391568_37) | 53 |
|  [Sales growth by market area adjusted for comparable units and currency](#tx391568_38) | 53 |
|  [Gross margin by segment by quarter](#tx391568_39) | 54 |
|  [EBIT margin by segment by quarter](#tx391568_40) | 54 |
|  [Restructuring charges by function](#tx391568_41) | 55 |
|  [Restructuring charges by segment](#tx391568_42) | 55 |
|  [Gross income and gross margin excluding restructuring charges by segment](#tx391568_43) | 56 |
|  [EBIT and EBIT margin excluding restructuring charges by segment](#tx391568_44) | 57 |
|  [Rolling four quarters of net sales by segment](#tx391568_45) | 57 |
|  [Rolling four quarters of EBIT margin excluding restructuring charges by segment (%)](#tx391568_46) | 57 |
|  [EBITA and EBITA margin by segment by quarter](#tx391568_47) | 58 |
|  [EBITA and EBITA margin excluding restructuring charges by segment](#tx391568_48) | 59 |
|  [Other ratios](#tx391568_49) | 59 |

---

 <br> 28 Ericsson \| Fourth quarter and full-year report 2022 Financial statements and other information

------

##### [**Table of Contents**](#toc)
**Financial statements (unaudited)** 

**Condensed consolidated income statement** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | Q4 | Q4 | Q4 | Jan-Dec | Jan-Dec |
| SEK million | Note | 2022 | 2021 | Change | 2022 | 2021 |
|  Net sales | 3 | 85980 | 71332 | 21% | 271546 | 232314 |
|  Cost of sales |  | -50411 | -40511 | 24% | -158251 | -131565 |
|  **Gross income** | 3 | **35569** | **30821** | **15%** | **113295** | **100749** |
|  Research and development expenses |  | -13217 | -11863 | 11% | -47298 | -42074 |
|  Selling and administrative expenses |  | -11791 | -7620 | 55% | -35692 | -26957 |
|  Impairment losses on trade receivables |  | 99 | 99 |  | -40 | -40 |
|  **Operating expenses** |  | **-24909** | **-19384** | **29%** | **-83030** | **-69071** |
|  Other operating income and expenses<sup>¹</sup><sup>)</sup> |  | -2824 | 428 | -760% | -3262 | 362 |
|  Share of earnings of JV and associated companies |  | 17 | -4 | -525% | 17 | -260 |
|  **Earnings before financial items and income tax (EBIT)** | 3 | **7853** | **11861** | **-34%** | **27020** | **31780** |
|  Financial income and expenses, net | 4 | -474 | -945 | -50% | -2411 | -2530 |
|  **Income after financial items** |  | **7379** | **10916** | **-32%** | **24609** | **29250** |
|  Income tax |  | -1189 | -770 | 54% | -5497 | -6270 |
|  **Net income** |  | **6190** | **10146** | **-39%** | **19112** | **22980** |
|  Net income attributable to: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Owners of the Parent Company |  | 6066 | 10076 |  | 18724 | 22694 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interests |  | 124 | 70 |  | 388 | 286 |
|  Other information |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average number of shares, basic (million) | 9 | 3330 | 3330 |  | 3330 | 3329 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings per share, basic (SEK) ²<sup>)</sup> |  | 1.82 | 3.03 |  | 5.62 | 6.82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings per share, diluted (SEK) ³<sup>)</sup> |  | 1.82 | 3.02 |  | 5.62 | 6.81 |

---

<sup>1)</sup> Jan-Dec 2022 includes a provision of SEK -2.3 billion in relation to a potential DPA breach resolution with DOJ, including estimated expenses for extended monitorship.

<sup>2)</sup> Based on net income attributable to owners of the Parent Company.

<sup>3)</sup> Potential ordinary shares are not considered when their conversion to ordinary shares would improve earnings per share.

**Condensed statement of comprehensive income (loss)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Jan-Dec | Jan-Dec |
| SEK million | 2022 | 2021 | 2022 | 2021 |
|  **Net income** | **6190** | **10146** | **19112** | **22980** |
|  **Other comprehensive income** |  |  |  |  |
|  **Items that will not be reclassified to profit or loss** |  |  |  |  |
|  Remeasurements of defined benefits pension plans incl. asset ceiling | -3596 | -79 | 10669 | 3537 |
|  Revaluation of borrowings due to change in credit risk | -661 | 205 | 1030 | 31 |
|  Cash flow hedge reserve |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gains/ losses arising during the period |  |  | 3703 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Transfer to goodwill |  |  | -3677 |  |
|  Tax on items that will not be reclassified to profit or loss | 57 | 62 | -3067 | -682 |
|  **Items that have been or may be reclassified to profit or loss** |  |  |  |  |
|  Cash flow hedge reserve |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gains/ losses arising during the period | 2189 | -188 | -701 | -542 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reclassification adjustments on gains/ losses included in profit or loss | 153 | -24 | 280 | -96 |
|  Translation reserves |  |  |  |  |
|  Changes in translation reserves | -7301 | 1241 | 7130 | 3342 |
|  Reclassification to profit and loss | -55 | 41 | -85 | 46 |
|  Share of other comprehensive income of JV and associated companies | -24 | -6 | 49 | 28 |
|  Tax on items that have been or may be reclassified to profit or loss | -482 | 38 | 87 | 126 |
|  **Total other comprehensive income (loss), net of tax** | **-9720** | **1290** | **15418** | **5790** |
|  **Total comprehensive income (loss)** | **-3530** | **11436** | **34530** | **28770** |
|  Total comprehensive income (loss) attributable to: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Owners of the Parent Company | -3816 | 11423 | 34274 | 28694 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interests | 286 | 13 | 256 | 76 |

---

 <br> 29 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

------

##### [**Table of Contents**](#toc)
**Condensed consolidated balance sheet** 

---

| | | | |
|:---|:---|:---|:---|
|  | | Dec 31 | Dec 31 |
| SEK million | Note | 2022 | 2021 |
|  **Assets** |  |  |  |
|  **Non-current assets** |  |  |  |
|  Intangible assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capitalized development expenses |  | 3705 | 3528 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill | 11 | 84570 | 38204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Customer relationships, IPR and other intangible assets | 11 | 26340 | 3830 |
|  Property, plant and equipment |  | 14236 | 13580 |
|  Right-of-use assets |  | 7870 | 7948 |
|  Financial assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity in JV and associated companies |  | 1127 | 941 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other investments in shares and participations | 6 | 2074 | 2258 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Customer finance, non-current | 6 | 415 | 568 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing securities, non-current | 6 | 9164 | 30626 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other financial assets, non-current | 6 | 6839 | 6217 |
|  Deferred tax assets |  | 19394 | 23109 |
|  |  | **175734** | **130809** |
|  **Current assets** |  |  |  |
|  Inventories |  | 45846 | 35164 |
|  Contract assets |  | 9843 | 10506 |
|  Trade receivables | 6 | 48413 | 45399 |
|  Customer finance, current | 6 | 4955 | 2719 |
|  Current tax assets |  | 7973 | 6379 |
|  Other current receivables |  | 9688 | 7656 |
|  Interest-bearing securities, current | 6 | 8736 | 12932 |
|  Cash and cash equivalents | 6 | 38349 | 54050 |
|  |  | **173803** | **174805** |
|  **Total assets** |  | **349537** | **305614** |
|  **Equity and liabilities** |  |  |  |
|  **Equity** |  |  |  |
|  Stockholders' equity |  | 134814 | 108775 |
|  Non-controlling interest in equity of subsidiaries |  | -1510 | -1676 |
|  |  | **133304** | **107099** |
|  **Non-current liabilities** |  |  |  |
|  Post-employment benefits |  | 27361 | 36050 |
|  Provisions, non-current | 5 | 3959 | 3722 |
|  Deferred tax liabilities | 11 | 4784 | 884 |
|  Borrowings, non-current | 6 | 26946 | 22241 |
|  Lease liabilities, non-current |  | 6818 | 7079 |
|  Other non-current liabilities |  | 745 | 1587 |
|  |  | **70613** | **71563** |
|  **Current liabilities** |  |  |  |
|  Provisions, current | 5 | 7629 | 5782 |
|  Borrowings, current | 6 | 5984 | 9590 |
|  Lease liabilities, current |  | 2486 | 2224 |
|  Contract liabilities |  | 42251 | 32834 |
|  Trade payables | 6 | 38437 | 35684 |
|  Current tax liabilities |  | 2640 | 2917 |
|  Other current liabilities |  | 46193 | 37921 |
|  |  | **145620** | **126952** |
|  **Total equity and liabilities** |  | **349537** | **305614** |

---

 <br> 30 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

------

##### [**Table of Contents**](#toc)
**Condensed consolidated statement of cash flows** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | Q4 | Q4 | Jan-Dec | Jan-Dec |
| SEK million | Note | 2022 | 2021 | 2022 | 2021 |
|  **Operating activities** |  |  |  |  |  |
|  Net income |  | 6190 | 10146 | 19112 | 22980 |
|  Adjustments for |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxes |  | 1304 | 938 | 5383 | 6576 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings/dividends in JV and associated companies |  | -24 | 13 | 55 | 360 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation, amortization and impairment losses | 7 | 3535 | 2552 | 10543 | 8969 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other |  | 432 | 398 | 1657 | 1238 |
|  |  | **11437** | **14047** | **36750** | **40123** |
|  **Changes in operating net assets** |  |  |  |  |  |
|  Inventories |  | 5898 | 248 | -7740 | -5565 |
|  Customer finance, current and non-current |  | -871 | 780 | -1732 | 34 |
|  Trade receivables and contract assets |  | -4080 | -5227 | 4766 | 1551 |
|  Trade payables |  | -131 | 3020 | -1995 | 1385 |
|  Provisions and post-employment benefits |  | 1749 | 950 | 2339 | -118 |
|  Contract liabilities |  | 2878 | -1655 | 5794 | 4014 |
|  Other operating assets and liabilities, net |  | 5235 | 4606 | -813 | 2701 |
|  |  | **10678** | **2722** | **619** | **4002** |
|  Interest received |  | 127 | -104 | 344 | 8 |
|  Interest paid |  | -406 | -310 | -1250 | -974 |
|  Taxes paid |  | -1941 | -1159 | -5600 | -4094 |
|  **Cash flow from operating activities** |  | **19895** | **15196** | **30863** | **39065** |
|  **Investing activities** |  |  |  |  |  |
|  Investments in property, plant and equipment | 7 | -1502 | -701 | -4477 | -3663 |
|  Sales of property, plant and equipment |  | 76 | 34 | 249 | 115 |
|  Acquisitions/divestments of subsidiaries and other operations, net | 11 | -445 | 178 | -51688 | 59 |
|  Product development | 7 | -717 | -302 | -1720 | -962 |
|  Purchase of interest-bearing securities |  | -12108 | -8858 | -13582 | -35415 |
|  Sale of interest-bearing securities |  | 789 | 7064 | 40541 | 20114 |
|  Other investing activities |  | 2012 | -122 | -3720 | -131 |
|  **Cash flow from investing activities** |  | **-11895** | **-2707** | **-34397** | **-19883** |
|  **Financing activities** |  |  |  |  |  |
|  Proceeds from issuance of borrowings |  | 1301 | 1 | 10755 | 7882 |
|  Repayment of borrowings |  | -121 | -39 | -16029 | -5791 |
|  Sale of own shares |  |  |  |  | 42 |
|  Dividends paid |  | -4172 | -3395 | -8415 | -6889 |
|  Repayment of lease liabilities |  | -765 | -623 | -2593 | -2368 |
|  Other financing activities |  | -183 | -825 | 352 | -2183 |
|  **Cash flow from financing activities** |  | **-3940** | **-4881** | **-15930** | **-9307** |
|  Effect of exchange rate changes on cash |  | -2460 | -34 | 3763 | 563 |
|  **Net change in cash and cash equivalents** |  | **1600** | **7574** | **-15701** | **10438** |
|  **Cash and cash equivalents, beginning of period** |  | **36749** | **46476** | **54050** | **43612** |
|  **Cash and cash equivalents, end of period** |  | **38349** | **54050** | **38349** | **54050** |

---

 <br> 31 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

------

##### [**Table of Contents**](#toc)
**Condensed consolidated statement of changes in equity** 

---

| | | |
|:---|:---|:---|
|  | Jan-Dec | Jan-Dec |
| SEK million | 2022 | 2021 |
|  Opening balance | 107099 | 85177 |
|  Total comprehensive income | 34530 | 28770 |
|  Sale/repurchase of own shares |  | 42 |
|  Long-term variable compensation plans | 89 | 93 |
|  Dividends to shareholders | -8415 | -6889 |
|  Transactions with non-controlling interests | 1 | -94 |
|  **Closing balance** | **133304** | **107099** |

---

**Condensed consolidated income statement – isolated quarters** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  Cost of sales | -50411 | -39905 | -36163 | -31772 | -40511 | -31487 | -31084 | -28483 |
|  **Gross income** | **35569** | **28135** | **26302** | **23289** | **30821** | **24776** | **23857** | **21295** |
|  Research and development expenses | -13217 | -11880 | -11496 | -10705 | -11863 | -10155 | -10480 | -9576 |
|  Selling and administrative expenses | -11791 | -9441 | -7872 | -6588 | -7620 | -6177 | -6972 | -6188 |
|  Impairment losses on trade receivables | 99 | 38 | 3 | -180 | 99 | -27 | 100 | -212 |
|  **Operating expenses** | **-24909** | **-21283** | **-19365** | **-17473** | **-19384** | **-16359** | **-17352** | **-15976** |
|  Other operating income and expenses<sup>1)</sup> | -2824 | 234 | 393 | -1065 | 428 | 500 | -579 | 13 |
|  Share of earnings of JV and associated companies | 17 | 29 | -22 | -7 | -4 | -82 | -103 | -71 |
|  **Earnings before financial items and income tax (EBIT)** | **7853** | **7115** | **7308** | **4744** | **11861** | **8835** | **5823** | **5261** |
|  Financial income and expenses, net | -474 | -535 | -759 | -643 | -945 | -598 | -454 | -533 |
|  **Income after financial items** | **7379** | **6580** | **6549** | **4101** | **10916** | **8237** | **5369** | **4728** |
|  Income tax | -1189 | -1220 | -1899 | -1189 | -770 | -2471 | -1469 | -1560 |
|  **Net income** | **6190** | **5360** | **4650** | **2912** | **10146** | **5766** | **3900** | **3168** |
|  Net income (loss) attributable to: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Owners of the Parent Company | 6066 | 5214 | 4504 | 2940 | 10076 | 5752 | 3679 | 3187 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interests | 124 | 146 | 146 | -28 | 70 | 14 | 221 | -19 |
|  Other information |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average number of shares, basic (million) | 3330 | 3330 | 3330 | 3330 | 3330 | 3330 | 3329 | 3328 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings per share, basic (SEK) ²<sup>)</sup> | 1.82 | 1.56 | 1.36 | 0.88 | 3.03 | 1.73 | 1.10 | 0.96 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings per share, diluted (SEK) ³<sup>)</sup> | 1.82 | 1.56 | 1.35 | 0.88 | 3.02 | 1.73 | 1.10 | 0.96 |

---

<sup>1)</sup> Q4 2022 includes a provision of SEK -2.3 billion in relation to a potential DPA breach resolution with DOJ, including estimated expenses for extended monitorship. Q3 2022 includes revaluation of Ericsson Ventures investments of SEK 0.2 billion. Q2 2022 includes revaluation/disposals of Ericsson Ventures investments of SEK 0.1 billion. Q1 2022 includes a provision of SEK -0.9 billion for impairment of assets and other one-time costs due to the suspension of the affected business in Russia, and revaluation of Ericsson Venture investments of SEK -0.3 billion. Q4 2021 includes a gain from divestment of a data center and revaluation of Ericsson Ventures investments of SEK 0.4 billion. Q3 2021 includes an Ericsson Ventures investment revaluation of SEK 0.5 billion. Q2 2021 includes cost of SEK -0.8 billion as a result of the Nokia settlement related to the 2019 resolutions with SEC and DOJ. 

<sup>2)</sup> Based on net income attributable to owners of the Parent Company.

<sup>3)</sup> Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

 <br> 32 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

------

##### [**Table of Contents**](#toc)
**Condensed consolidated statement of cash flows – isolated quarters** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  **Operating activities** |  |  |  |  |  |  |  |  |
|  Net income | 6190 | 5360 | 4650 | 2912 | 10146 | 5766 | 3900 | 3168 |
|  Adjustments for |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxes | 1304 | 1307 | 1751 | 1021 | 938 | 2824 | 1230 | 1584 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings/dividends in JV and associated companies | -24 | -17 | 88 | 8 | 13 | 159 | 112 | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation, amortization and impairment losses | 3535 | 2638 | 2224 | 2146 | 2552 | 2385 | 2097 | 1935 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | 432 | -19 | 345 | 899 | 398 | 24 | 631 | 185 |
|  | **11437** | **9269** | **9058** | **6986** | **14047** | **11158** | **7970** | **6948** |
|  **Changes in operating net assets** |  |  |  |  |  |  |  |  |
|  Inventories | 5898 | -3564 | -4728 | -5346 | 248 | -3877 | -701 | -1235 |
|  Customer finance, current and non-current | -871 | -872 | 134 | -123 | 780 | -1419 | 454 | 219 |
|  Trade receivables and contract assets | -4080 | 4595 | 3350 | 901 | -5227 | 8833 | -4034 | 1979 |
|  Trade payables | -131 | -1817 | 1324 | -1371 | 3020 | 1733 | 744 | -4112 |
|  Provisions and post-employment benefits | 1749 | -58 | -321 | 969 | 950 | -130 | -1461 | 523 |
|  Contract liabilities | 2878 | -2623 | -721 | 6260 | -1655 | -3388 | 4603 | 4454 |
|  Other operating assets and liabilities, net | 5235 | 1052 | -333 | -6767 | 4606 | 3168 | 608 | -5681 |
|  | **10678** | **-3287** | **-1295** | **-5477** | **2722** | **4920** | **213** | **-3853** |
|  Interest received | 127 | 156 | -17 | 78 | -104 | 42 | 2 | 68 |
|  Interest paid | -406 | -196 | -437 | -211 | -310 | -120 | -384 | -160 |
|  Taxes paid/received | -1941 | -1291 | -1022 | -1346 | -1159 | -1276 | -1861 | 202 |
|  **Cash flow from operating activities** | **19895** | **4651** | **6287** | **30** | **15196** | **14724** | **5940** | **3205** |
|  **Investing activities** |  |  |  |  |  |  |  |  |
|  Investments in property, plant and equipment | -1502 | -1104 | -1053 | -818 | -701 | -1040 | -1007 | -915 |
|  Sales of property, plant and equipment | 76 | 74 | 61 | 38 | 34 | 40 | 17 | 24 |
|  Acquisitions/divestments of subs. and other operations, net | -445 | -51412 | 123 | 46 | 178 | -55 | -69 | 5 |
|  Product development | -717 | -414 | -301 | -288 | -302 | -190 | -266 | -204 |
|  Purchase of interest-bearing securities | -12108 | -437 | -1037 |  | -8858 | -9670 | -13207 | -3680 |
|  Sale of interest-bearing securities | 789 | 978 | 22747 | 16027 | 7064 | 1801 | 7408 | 3841 |
|  Other investing activities | 2012 | -6537 | 1384 | -579 | -122 | -4 |  | -5 |
|  **Cash flow from investing activities** | **-11895** | **-58852** | **21924** | **14426** | **-2707** | **-9118** | **-7124** | **-934** |
|  **Financing activities** |  |  |  |  |  |  |  |  |
|  Proceeds from issuance of borrowings | 1301 | 1666 |  | 7788 | 1 |  | 7804 | 77 |
|  Repayment of borrowings | -121 | -5915 | -9993 |  | -39 |  | -510 | -5242 |
|  Sale of own shares |  |  |  |  |  | 42 |  |  |
|  Dividends paid | -4172 | -79 | -4164 |  | -3395 | -161 | -3328 | -5 |
|  Repayment of lease liabilities | -765 | -658 | -577 | -593 | -623 | -580 | -617 | -548 |
|  Other financing activities | -183 | -277 | 243 | 569 | -825 | -1849 | 940 | -449 |
|  **Cash flow from financing activities** | **-3940** | **-5263** | **-14491** | **7764** | **-4881** | **-2548** | **4289** | **-6167** |
|  Effect of exchange rate changes on cash | -2460 | 2595 | 3042 | 586 | -34 | 145 | -375 | 827 |
|  **Net change in cash and cash equivalents** | **1600** | **-56869** | **16762** | **22806** | **7574** | **3203** | **2730** | **-3069** |
|  **Cash and cash equivalents, beginning of period** | **36749** | **93618** | **76856** | **54050** | **46476** | **43273** | **40543** | **43612** |
|  **Cash and cash equivalents, end of period** | **38349** | **36749** | **93618** | **76856** | **54050** | **46476** | **43273** | **40543** |

---

 <br> 33 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

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##### [**Table of Contents**](#toc)
**Condensed Parent Company income statement** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Jan-Dec | Jan-Dec |
| SEK million | 2022 | 2021 | 2022 | 2021 |
|  Net sales |  |  |  |  |
|  Cost of sales |  |  |  |  |
|  **Gross income** | **—** | **—** | **—** | **—** |
|  Operating expenses | -537 | -317 | -1492 | -820 |
|  Other operating income and expenses | -1234 | 664 | 691 | 1770 |
|  **EBIT** | **-1771** | **347** | **-801** | **950** |
|  Financial net<sup>¹</sup><sup>)</sup> | -1689 | 1849 | 19213 | 8399 |
|  **Income after financial items** | **-3460** | **2196** | **18412** | **9349** |
|  Transfers to (-) / from untaxed reserves | -7272 | -1526 | -7272 | -1526 |
|  Income tax<sup>¹</sup><sup>)</sup> | 1495 | 223 | 631 | -167 |
|  **Net income (loss)** | **-9237** | **893** | **11771** | **7656** |

---

<sup>1)</sup> Revaluation of borrowings due to change in credit risk, which historically has been reported under Other Comprehensive Income has for 2022 been reported in the Income Statement. Prior periods have been restated. The restatement is due to an identified exemption in the Swedish Annual Accounts Act (RFR 2) which does not allow the items to be reported under Other Comprehensive Income. The restatement from Other comprehensive income to the Income statement resulted in an increase of reported financial net of SEK 31 million YTD and 205 MSEK in the fourth quarter and an increase of the reported tax expense of SEK 6 million YTD and SEK 42 million in the fourth quarter, 2021. SEK 366 million has been restated from Revaluation of borrowings to Other retained earnings in equity for the opening balance of year 2021. 

**Condensed Parent Company statement of comprehensive income (loss)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Jan-Dec | Jan-Dec |
| SEK million | 2022 | 2021 | 2022 | 2021 |
|  **Net income (loss)** | **-9237** | **893** | **11771** | **7656** |
|  Cash flow hedge reserve |  |  |  |  |
|  Gains / losses arising during the period |  | -26 | 3703 | -26 |
|  Transfer to investments |  |  | -3677 |  |
|  Tax on items that will not be reclassified to profit or loss | -758 |  | -758 |  |
|  **Other comprehensive income (loss), net of tax** | **-758** | **-26** | **-732** | **-26** |
|  **Total comprehensive income (loss)** | **-9995** | **867** | **11039** | **7630** |

---

 <br> 34 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

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##### [**Table of Contents**](#toc)
**Condensed Parent Company balance sheet** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Dec 31 | Dec 31 | Dec 31 | Dec 31 |  |
| SEK million | 2022 | 2022 | 2021 | 2021 |  |
|  **Assets** |  |  |  |  |  |
|  **Fixed assets** |  |  |  |  |  |
|  Intangible assets |  | 4 |  | 8 |  |
|  Tangible assets |  | 380 |  | 413 |  |
|  Financial assets<sup>¹</sup><sup>)</sup> |  | 156720 |  | 120605 |  |
|  |  | **157104** |  | **121026** |  |
|  **Current assets** |  |  |  |  |  |
|  Receivables |  | 27664 |  | 27364 |  |
|  Short-term investments |  | 8540 |  | 12722 |  |
|  Cash and cash equivalents |  | 23731 |  | 37128 |  |
|  |  | **59935** |  | **77214** |  |
|  **Total assets** |  | **217039** |  | **198240** |  |
|  **Stockholders' equity, provisions and liabilities** |  |  |  |  |  |
|  **Equity** |  |  |  |  |  |
|  Restricted equity |  | 48164 |  | 48164 |  |
|  Non-restricted equity |  | 37753 |  | 34984 |  |
|  |  | **85917** |  | **83148** |  |
|  Provisions |  | 2435 |  | 293 |  |
|  Non-current liabilities |  | 26835 |  | 22406 |  |
|  Current liabilities |  | 101852 |  | 92393 |  |
|  **Total stockholders' equity, provisions and liabilities** |  | **217039** |  | **198240** |  |
|  *<sup>¹</sup><sup>)</sup> Of which interest-bearing securities, non-current* | | *9157* | | *30615* | |

---

 <br> 35 Ericsson \| Fourth quarter and full-year report 2022 Financial statements

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##### [**Table of Contents**](#toc)
Accounting policies and Explanatory notes

(unaudited)

Note 1 – Accounting policies

**The group** 

This condensed consolidated interim financial report for the quarterly reporting period ended December 31, 2022, has been prepared in accordance with Accounting Standard IAS 34 "Interim Financial Reporting". The term "IFRS" used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB's Standards Interpretation Committee (SIC) and IFRS Interpretations Committee (IFRIC). The accounting policies adopted are consistent with those of the annual report for the year ended December 31, 2021 and should be read in conjunction with that annual report. There are no amendments of IFRS during 2022 that are estimated to have a material impact on the result and financial position of the Company.

**New segment structure implemented in Q3** 

As announced in May 2022, Ericsson will start to report its financials according to its new segment structure from Q3 2022. The four new segments are:

**Networks** – including Radio Access Networks, Transport Solutions, Site Solutions, Network Rollout & Tuning and Customer Support.

**Cloud Software and Services** – including Core Network and Automation, Managed Services, Services Orchestration and Telecom BSS.

**Enterprise** – including Enterprise Wireless Solutions, Technologies & New Businesses, Global Communication Platform (Vonage – reported from Q3 2022) and Global Network Platform.

**Other** – including media businesses, Ericsson Ventures and one-offs.

The financial reporting by segment was restated in the Q3 report for the first two quarters of 2022, each quarter of 2021 and full-year 2020.

Note 2 – Critical accounting estimates and judgements

**Russia** 

In the first quarter 2022, Ericsson recorded a SEK 0.9 billion provision for impairment of assets and other costs related to its decision to wind down operations in Russia. The provision was recorded in Other operating expenses in Segment Other and has been utilized during 2022.

**Provision**

In December 2022, the Company agreed with the DOJ and SEC to extend the term of the Company's independent compliance monitor for one year, to June 2024. In addition, the Company made a provision in the fourth quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation to a potential resolution with the DOJ regarding previously announced, non-criminal, alleged breaches under the DPA. The provision also includes estimated expenses for the previously announced extended monitorship. The eventual financial penalty could differ materially from the provision, since negotiations are still ongoing. For more information, see note 5 "Provisions".

 <br> 36 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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##### [**Table of Contents**](#toc)
Note 3 – Segment information<sup>\*)</sup>

**Net sales by segment by quarter** 

---

| | | | | | | | | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Isolated quarters, SEK million | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  |
|  Networks |  | 58626 |  |  | 48147 |  |  | 45983 |  |  | 40712 |  |  | 51097 |  |  | 40591 |  |  | 39876 |  |  | 36274 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *45804* | | | *35763* | | | *35299* | | | *31131* | | | *39963* | | | *31078* | | | *30415* | | | *27495* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *12822* | | | *12384* | | | *10684* | | | *9581* | | | *11134* | | | *9513* | | | *9461* | | | *8779* | |
|  Cloud Software and Services |  | 20210 |  |  | 14213 |  |  | 14014 |  |  | 12087 |  |  | 17955 |  |  | 13610 |  |  | 12949 |  |  | 11710 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *8047* | | | *4752* | | | *4675* | | | *3631* | | | *7133* | | | *4590* | | | *3977* | | | *3567* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *12163* | | | *9461* | | | *9339* | | | *8456* | | | *10822* | | | *9020* | | | *8972* | | | *8143* | |
|  Enterprise |  | 6582 |  |  | 5161 |  |  | 1875 |  |  | 1762 |  |  | 1802 |  |  | 1558 |  |  | 1600 |  |  | 1276 |  |
|  Other |  | 562 |  |  | 519 |  |  | 593 |  |  | 500 |  |  | 478 |  |  | 504 |  |  | 516 |  |  | 518 |  |
|  **Total** |  | **85980** |  |  | **68040** |  |  | **62465** |  |  | **55061** |  |  | **71332** |  |  | **56263** |  |  | **54941** |  |  | **49778** |  |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Sequential change, percent | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  |
|  Networks |  | 22 | % |  | 5 | % |  | 13 | % |  | -20 | % |  | 26 | % |  | 2 | % |  | 10 | % |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *28* | *%* | | *1* | *%* | | *13* | *%* | | *-22* | *%* | | *29* | *%* | | *2* | *%* | | *11* | *%* | | *—* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *4* | *%* | | *16* | *%* | | *12* | *%* | | *-14* | *%* | | *17* | *%* | | *1* | *%* | | *8* | *%* | | *—* | |
|  Cloud Software and Services |  | 42 | % |  | 1 | % |  | 16 | % |  | -33 | % |  | 32 | % |  | 5 | % |  | 11 | % |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *69* | *%* | | *2* | *%* | | *29* | *%* | | *-49* | *%* | | *55* | *%* | | *15* | *%* | | *11* | *%* | | *—* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *29* | *%* | | *1* | *%* | | *10* | *%* | | *-22* | *%* | | *20* | *%* | | *1* | *%* | | *10* | *%* | | *—* | |
|  Enterprise |  | 28 | % |  | 175 | % |  | 6 | % |  | -2 | % |  | 16 | % |  | -3 | % |  | 25 | % |  |  |  |
|  Other |  | 8 | % |  | -12 | % |  | 19 | % |  | 5 | % |  | -5 | % |  | -2 | % |  | 0 | % |  |  |  |
|  **Total** |  | **26** | **%** |  | **9** | **%** |  | **13** | **%** |  | **-23** | **%** |  | **27** | **%** |  | **2** | **%** |  | **10** | **%** |  | **-28** | **%** |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year over year change, percent | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  |
|  Networks |  | 15 | % |  | 19 | % |  | 15 | % |  | 12 | % |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *15* | *%* | | *15* | *%* | | *16* | *%* | | *13* | *%* | | *—* | | | *—* | | | *—* | | | *—* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *15* | *%* | | *30* | *%* | | *13* | *%* | | *9* | *%* | | *—* | | | *—* | | | *—* | | | *—* | |
|  Cloud Software and Services |  | 13 | % |  | 4 | % |  | 8 | % |  | 3 | % |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *13* | *%* | | *4* | *%* | | *18* | *%* | | *2* | *%* | | *—* | | | *—* | | | *—* | | | *—* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *12* | *%* | | *5* | *%* | | *4* | *%* | | *4* | *%* | | *—* | | | *—* | | | *—* | | | *—* | |
|  Enterprise |  | 265 | % |  | 231 | % |  | 17 | % |  | 38 | % |  |  |  |  |  |  |  |  |  |  |  |  |
|  Other |  | 18 | % |  | 3 | % |  | 15 | % |  | -3 | % |  |  |  |  |  |  |  |  |  |  |  |  |
|  **Total** |  | **21** | **%** |  | **21** | **%** |  | **14** | **%** |  | **11** | **%** |  | **3** | **%** |  | **-2** | **%** |  | **-1** | **%** |  | **0** | **%** |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year to date, SEK million | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  |
|  Networks |  | 193468 |  |  | 134842 |  |  | 86695 |  |  | 40712 |  |  | 167838 |  |  | 116741 |  |  | 76150 |  |  | 36274 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *147997* | | | *102193* | | | *66430* | | | *31131* | | | *128951* | | | *88988* | | | *57910* | | | *27495* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *45471* | | | *32649* | | | *20265* | | | *9581* | | | *38887* | | | *27753* | | | *18240* | | | *8779* | |
|  Cloud Software and Services |  | 60524 |  |  | 40314 |  |  | 26101 |  |  | 12087 |  |  | 56224 |  |  | 38269 |  |  | 24659 |  |  | 11710 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *21105* | | | *13058* | | | *8306* | | | *3631* | | | *19267* | | | *12134* | | | *7544* | | | *3567* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *39419* | | | *27256* | | | *17795* | | | *8456* | | | *36957* | | | *26135* | | | *17115* | | | *8143* | |
|  Enterprise |  | 15380 |  |  | 8798 |  |  | 3637 |  |  | 1762 |  |  | 6236 |  |  | 4434 |  |  | 2876 |  |  | 1276 |  |
|  Other |  | 2174 |  |  | 1612 |  |  | 1093 |  |  | 500 |  |  | 2016 |  |  | 1538 |  |  | 1034 |  |  | 518 |  |
|  **Total** |  | **271546** |  |  | **185566** |  |  | **117526** |  |  | **55061** |  |  | **232314** |  |  | **160982** |  |  | **104719** |  |  | **49778** |  |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year over year change, percent | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  |
|  Networks |  | 15 | % |  | 16 | % |  | 14 | % |  | 12 | % |  | 1 | % |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *15* | *%* | | *15* | *%* | | *15* | *%* | | *13* | *%* | | *5* | *%* | | *—* | | | *—* | | | *—* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *17* | *%* | | *18* | *%* | | *11* | *%* | | *9* | *%* | | *-11* | *%* | | *—* | | | *—* | | | *—* | |
|  Cloud Software and Services |  | 8 | % |  | 5 | % |  | 6 | % |  | 3 | % |  | -6 | % |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Products* | | *10* | *%* | | *8* | *%* | | *10* | *%* | | *2* | *%* | | *-5* | *%* | | *—* | | | *—* | | | *—* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which Services* | | *7* | *%* | | *4* | *%* | | *4* | *%* | | *4* | *%* | | *-6* | *%* | | *—* | | | *—* | | | *—* | |
|  Enterprise |  | 147 | % |  | 98 | % |  | 26 | % |  | 38 | % |  | 30 | % |  |  |  |  |  |  |  |  |  |
|  Other |  | 8 | % |  | 5 | % |  | 6 | % |  | -3 | % |  | 0 | % |  |  |  |  |  |  |  |  |  |
|  **Total** |  | **17** | **%** |  | **15** | **%** |  | **12** | **%** |  | **11** | **%** |  | **0** | **%** |  | **-1** | **%** |  | **-1** | **%** |  | **0** | **%** |

---

\*) Net sales by segment has been restated for the first two quarters of 2022, each quarter 2021 and for the full year 2020. Comparisons against isolated quarters 2020 are not available by segment.

 <br> 37 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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##### [**Table of Contents**](#toc)
**Gross income by segment by quarter** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 26056 | 21366 | 20735 | 18211 | 23643 | 19401 | 19111 | 16714 |
|  Cloud Software and Services | 6664 | 4516 | 4692 | 4234 | 6362 | 4575 | 3959 | 3933 |
|  Enterprise | 2862 | 2398 | 843 | 843 | 832 | 760 | 765 | 534 |
|  Other | -13 | -145 | 32 | 1 | -16 | 40 | 22 | 114 |
|  **Total** | **35569** | **28135** | **26302** | **23289** | **30821** | **24776** | **23857** | **21295** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 86368 | 60312 | 38946 | 18211 | 78869 | 55226 | 35825 | 16714 |
|  Cloud Software and Services | 20106 | 13442 | 8926 | 4234 | 18829 | 12467 | 7892 | 3933 |
|  Enterprise | 6946 | 4084 | 1686 | 843 | 2891 | 2059 | 1299 | 534 |
|  Other | -125 | -112 | 33 | 1 | 160 | 176 | 136 | 114 |
|  **Total** | **113295** | **77726** | **49591** | **23289** | **100749** | **69928** | **45152** | **21295** |

---

**EBIT (loss) by segment by quarter** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 12453 | 9597 | 8861 | 7601 | 11757 | 9624 | 8645 | 7240 |
|  Cloud Software and Services | 673 | -792 | -733 | -837 | 590 | -449 | -1158 | -1217 |
|  Enterprise | -2944 | -1670 | -839 | -781 | -770 | -819 | -649 | -727 |
|  Other | -2329 | -20 | 19 | -1239 | 284 | 479 | -1015 | -35 |
|  **Total** | **7853** | **7115** | **7308** | **4744** | **11861** | **8835** | **5823** | **5261** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 38512 | 26059 | 16462 | 7601 | 37266 | 25509 | 15885 | 7240 |
|  Cloud Software and Services | -1689 | -2362 | -1570 | -837 | -2234 | -2824 | -2375 | -1217 |
|  Enterprise | -6234 | -3290 | -1620 | -781 | -2965 | -2195 | -1376 | -727 |
|  Other | -3569 | -1240 | -1220 | -1239 | -287 | -571 | -1050 | -35 |
|  **Total** | **27020** | **19167** | **12052** | **4744** | **31780** | **19919** | **11084** | **5261** |

---

 <br> 38 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

------

##### [**Table of Contents**](#toc)
**Net sales by market area by quarter** 

---

| | | | | | | | | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Isolated quarters, SEK million | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  |
|  South East Asia, Oceania and India |  | 11239 |  |  | 7914 |  |  | 7962 |  |  | 5836 |  |  | 8604 |  |  | 6450 |  |  | 7099 |  |  | 6676 |  |
|  North East Asia |  | 8396 |  |  | 5597 |  |  | 7319 |  |  | 5421 |  |  | 9816 |  |  | 5691 |  |  | 7123 |  |  | 6491 |  |
|  North America |  | 25301 |  |  | 26517 |  |  | 22849 |  |  | 20727 |  |  | 22264 |  |  | 20161 |  |  | 17950 |  |  | 17081 |  |
|  Europe and Latin America <sup>¹</sup><sup>)</sup> ²<sup>)</sup> |  | 20877 |  |  | 15298 |  |  | 15325 |  |  | 15290 |  |  | 19236 |  |  | 14378 |  |  | 14011 |  |  | 12647 |  |
|  Middle East and Africa |  | 7379 |  |  | 5668 |  |  | 5223 |  |  | 4301 |  |  | 6948 |  |  | 4985 |  |  | 4459 |  |  | 4393 |  |
|  Other ¹<sup>)</sup> ²<sup>)</sup> |  | 12788 |  |  | 7046 |  |  | 3787 |  |  | 3486 |  |  | 4464 |  |  | 4598 |  |  | 4299 |  |  | 2490 |  |
|  **Total** |  | **85980** |  |  | **68040** |  |  | **62465** |  |  | **55061** |  |  | **71332** |  |  | **56263** |  |  | **54941** |  |  | **49778** |  |
|  *¹<sup>)</sup> Of which in Sweden* | | *778* | | | *833* | | | *950* | | | *678* | | | *1078* | | | *478* | | | *404* | | | *389* | |
|  *²<sup>)</sup> Of which in EU* | | *10495* | | | *8242* | | | *8511* | | | *8611* | | | *10181* | | | *7069* | | | *7256* | | | *6801* | |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Sequential change, percent | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  |
|  South East Asia, Oceania and India |  | 42 | % |  | -1 | % |  | 36 | % |  | -32 | % |  | 33 | % |  | -9 | % |  | 6 | % |  | -32 | % |
|  North East Asia |  | 50 | % |  | -24 | % |  | 35 | % |  | -45 | % |  | 72 | % |  | -20 | % |  | 10 | % |  | -49 | % |
|  North America |  | -5 | % |  | 16 | % |  | 10 | % |  | -7 | % |  | 10 | % |  | 12 | % |  | 5 | % |  | -11 | % |
|  Europe and Latin America <sup>¹</sup><sup>)</sup> ²<sup>)</sup> |  | 36 | % |  | 0 | % |  | 0 | % |  | -21 | % |  | 34 | % |  | 3 | % |  | 11 | % |  | -26 | % |
|  Middle East and Africa |  | 30 | % |  | 9 | % |  | 21 | % |  | -38 | % |  | 39 | % |  | 12 | % |  | 2 | % |  | -33 | % |
|  Other ¹<sup>)</sup> ²<sup>)</sup> |  | 81 | % |  | 86 | % |  | 9 | % |  | -22 | % |  | -3 | % |  | 7 | % |  | 73 | % |  | -42 | % |
|  **Total** |  | **26** | **%** |  | **9** | **%** |  | **13** | **%** |  | **-23** | **%** |  | **27** | **%** |  | **2** | **%** |  | **10** | **%** |  | **-28** | **%** |
|  *¹<sup>)</sup> Of which in Sweden* | | *-7* | *%* | | *-12* | *%* | | *40* | *%* | | *-37* | *%* | | *126* | *%* | | *18* | *%* | | *4* | *%* | | *7* | *%* |
|  *²<sup>)</sup> Of which in EU* | | *27* | *%* | | *-3* | *%* | | *-1* | *%* | | *-15* | *%* | | *44* | *%* | | *-3* | *%* | | *7* | *%* | | *-23* | *%* |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year over year change, percent | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  | Q4 | Q4 |  | Q3 | Q3 |  | Q2 | Q2 |  | Q1 | Q1 |  |
|  South East Asia, Oceania and India |  | 31 | % |  | 23 | % |  | 12 | % |  | -13 | % |  | -12 | % |  | -17 | % |  | 8 | % |  | 13 | % |
|  North East Asia |  | -14 | % |  | -2 | % |  | 3 | % |  | -16 | % |  | -23 | % |  | -35 | % |  | -9 | % |  | 66 | % |
|  North America |  | 14 | % |  | 32 | % |  | 27 | % |  | 21 | % |  | 17 | % |  | 10 | % |  | -2 | % |  | -5 | % |
|  Europe and Latin America <sup>¹</sup><sup>)</sup> ²<sup>)</sup> |  | 9 | % |  | 6 | % |  | 9 | % |  | 21 | % |  | 12 | % |  | 8 | % |  | 7 | % |  | 3 | % |
|  Middle East and Africa |  | 6 | % |  | 14 | % |  | 17 | % |  | -2 | % |  | 7 | % |  | -10 | % |  | -18 | % |  | -25 | % |
|  Other ¹<sup>)</sup> ²<sup>)</sup> |  | 186 | % |  | 53 | % |  | -12 | % |  | 40 | % |  | 4 | % |  | 26 | % |  | 0 | % |  | -37 | % |
|  **Total** |  | **21** | **%** |  | **21** | **%** |  | **14** | **%** |  | **11** | **%** |  | **3** | **%** |  | **-2** | **%** |  | **-1** | **%** |  | **0** | **%** |
|  *¹<sup>)</sup> Of which in Sweden* | | *-28* | *%* | | *74* | *%* | | *135* | *%* | | *74* | *%* | | *197* | *%* | | *92* | *%* | | *42* | *%* | | *71* | *%* |
|  *²<sup>)</sup> Of which in EU* | | *3* | *%* | | *17* | *%* | | *17* | *%* | | *27* | *%* | | *15* | *%* | | *0* | *%* | | *0* | *%* | | *9* | *%* |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year to date, SEK million | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  |
|  South East Asia, Oceania and India |  | 32951 |  |  | 21712 |  |  | 13798 |  |  | 5836 |  |  | 28829 |  |  | 20225 |  |  | 13775 |  |  | 6676 |  |
|  North East Asia |  | 26733 |  |  | 18337 |  |  | 12740 |  |  | 5421 |  |  | 29121 |  |  | 19305 |  |  | 13614 |  |  | 6491 |  |
|  North America |  | 95394 |  |  | 70093 |  |  | 43576 |  |  | 20727 |  |  | 77456 |  |  | 55192 |  |  | 35031 |  |  | 17081 |  |
|  Europe and Latin America <sup>¹</sup><sup>)</sup> ²<sup>)</sup> |  | 66790 |  |  | 45913 |  |  | 30615 |  |  | 15290 |  |  | 60272 |  |  | 41036 |  |  | 26658 |  |  | 12647 |  |
|  Middle East and Africa |  | 22571 |  |  | 15192 |  |  | 9524 |  |  | 4301 |  |  | 20785 |  |  | 13837 |  |  | 8852 |  |  | 4393 |  |
|  Other ¹<sup>)</sup> ²<sup>)</sup> |  | 27107 |  |  | 14319 |  |  | 7273 |  |  | 3486 |  |  | 15851 |  |  | 11387 |  |  | 6789 |  |  | 2490 |  |
|  **Total** |  | **271546** |  |  | **185566** |  |  | **117526** |  |  | **55061** |  |  | **232314** |  |  | **160982** |  |  | **104719** |  |  | **49778** |  |
|  *¹<sup>)</sup> Of which in Sweden* | | *3239* | | | *2461* | | | *1628* | | | *678* | | | *2349* | | | *1271* | | | *793* | | | *389* | |
|  *²<sup>)</sup> Of which in EU* | | *35859* | | | *25364* | | | *17122* | | | *8611* | | | *31307* | | | *21126* | | | *14057* | | | *6801* | |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 |  | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year to date, Year over year change, percent | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  | Jan-Dec | Jan-Dec |  | Jan-Sep | Jan-Sep |  | Jan-Jun | Jan-Jun |  | Jan-Mar | Jan-Mar |  |
|  South East Asia, Oceania and India |  | 14 | % |  | 7 | % |  | 0 | % |  | -13 | % |  | -4 | % |  | 0 | % |  | 10 | % |  | 13 | % |
|  North East Asia |  | -8 | % |  | -5 | % |  | -6 | % |  | -16 | % |  | -13 | % |  | -6 | % |  | 16 | % |  | 66 | % |
|  North America |  | 23 | % |  | 27 | % |  | 24 | % |  | 21 | % |  | 5 | % |  | 1 | % |  | -4 | % |  | -5 | % |
|  Europe and Latin America <sup>¹</sup><sup>)</sup> ²<sup>)</sup> |  | 11 | % |  | 12 | % |  | 15 | % |  | 21 | % |  | 8 | % |  | 6 | % |  | 5 | % |  | 3 | % |
|  Middle East and Africa |  | 9 | % |  | 10 | % |  | 8 | % |  | -2 | % |  | -11 | % |  | -18 | % |  | -21 | % |  | -25 | % |
|  Other ¹<sup>)</sup> ²<sup>)</sup> |  | 71 | % |  | 26 | % |  | 7 | % |  | 40 | % |  |  |  |  |  |  |  |  |  |  |  |  |
|  **Total** |  | **17** | **%** |  | **15** | **%** |  | **12** | **%** |  | **11** | **%** |  | **—** |  |  | **—** |  |  | **—** |  |  | **—** |  |
|  *¹<sup>)</sup> Of which in Sweden* | | *38* | *%* | | *94* | *%* | | *105* | *%* | | *74* | *%* | | *109* | *%* | | *67* | *%* | | *55* | *%* | | *71* | *%* |
|  *²<sup>)</sup> Of which in EU* | | *15* | *%* | | *20* | *%* | | *22* | *%* | | *27* | *%* | | *6* | *%* | | *2* | *%* | | *4* | *%* | | *9* | *%* |

---

 <br> 39 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

------

##### [**Table of Contents**](#toc)
**Net sales by market area by segment** 

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Q4 2022 | Q4 2022 | Q4 2022 | Q4 2022 | Q4 2022 | Jan-Dec 2022 | Jan-Dec 2022 | Jan-Dec 2022 | Jan-Dec 2022 | Jan-Dec 2022 |
| SEK million | Networks | Cloud Software<br>and Services | Enterprise | Other | Total | Networks | Cloud Software<br>and Services | Enterprise | Other | Total |
|  South East Asia, Oceania and India | 8501 | 2693 | 45 | 0 | 11239 | 23695 | 9179 | 77 | 0 | 32951 |
|  North East Asia | 6989 | 1338 | 69 | 0 | 8396 | 22488 | 4015 | 230 | 0 | 26733 |
|  North America | 20680 | 4573 | 48 | 0 | 25301 | 81917 | 13362 | 115 | 0 | 95394 |
|  Europe and Latin America | 13675 | 7038 | 164 | 0 | 20877 | 44644 | 21638 | 508 | 0 | 66790 |
|  Middle East and Africa | 3725 | 3510 | 144 | 0 | 7379 | 11707 | 10472 | 392 | 0 | 22571 |
|  Other <sup>1)</sup> | 5056 | 1058 | 6112 | 562 | 12788 | 9017 | 1858 | 14058 | 2174 | 27107 |
|  **Total** | **58626** | **20210** | **6582** | **562** | **85980** | **193468** | **60524** | **15380** | **2174** | **271546** |
|  Share of total | 68% | 23% | 8% | 1% | 100% | 71% | 22% | 6% | 1% | 100% |

---

<sup>1)</sup> Includes primarily IPR licensing revenues and a major part of segment Enterprise.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Q4 2022 | Q4 2022 | Q4 2022 | Q4 2022 | Q4 2022 |
| Sequential change, percent | Networks | Cloud Software<br>and Services | Enterprise | Other | Total |
|  South East Asia, Oceania and India | 53% | 15% | 200% |  | 42% |
|  North East Asia | 47% | 68% | 33% |  | 50% |
|  North America | -11% | 37% | 78% |  | -5% |
|  Europe and Latin America | 34% | 41% | 31% |  | 36% |
|  Middle East and Africa | 21% | 41% | 44% |  | 30% |
|  Other | 260% | 277% | 26% | 8% | 81% |
|  **Total** | **22%** | **42%** | **28%** | **8%** | **26%** |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Q4 2022 | Q4 2022 | Q4 2022 | Q4 2022 | Q4 2022 | Jan-Dec 2022 | Jan-Dec 2022 | Jan-Dec 2022 | Jan-Dec 2022 | Jan-Dec 2022 |
| Year over year change, percent | Networks | Cloud Software<br>and Services | Enterprise | Other | Total | Networks | Cloud Software<br>and Services | Enterprise | Other | Total |
|  South East Asia, Oceania and India | 44% | 1% | 350% |  | 31% | 17% | 8% | 108% |  | 14% |
|  North East Asia | -14% | -18% | -15% |  | -14% | -8% | -9% | -9% |  | -8% |
|  North America | 10% | 33% | 167% |  | 14% | 23% | 22% | 46% |  | 23% |
|  Europe and Latin America | 9% | 8% | 39% |  | 9% | 15% | 2% | 21% |  | 11% |
|  Middle East and Africa | 5% | 8% | 4% |  | 6% | 9% | 8% | 24% |  | 9% |
|  Other | 138% | 147% | 326% | 18% | 186% | 25% | 23% | 174% | 8% | 71% |
|  **Total** | **15%** | **13%** | **265%** | **18%** | **21%** | **15%** | **8%** | **147%** | **8%** | **17%** |

---

 <br> 40 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

------

##### [**Table of Contents**](#toc)
**Top 5 countries in sales** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Jan-Dec | Jan-Dec |
| Country, percentage of net sales¹<sup>)</sup> | 2022 | 2021 | 2022 | 2021 |
|  United States | 41% | 32% | 40% | 34% |
|  India | 6% | 3% | 4% | 3% |
|  China | 3% | 6% | 4% | 4% |
|  Japan | 4% | 6% | 4% | 6% |
|  United Kingdom | 3% | 3% | 3% | 3% |

---

<sup>1)</sup> Based on Jan-Dec 2022. Includes IPR licensing revenues.

**IPR licensing revenues by segment by quarter** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 4917 | 1282 | 1186 | 1142 | 1949 | 2146 | 1904 | 671 |
|  Cloud Software and Services | 1080 | 281 | 261 | 250 | 428 | 471 | 418 | 147 |
|  **Total** | **5997** | **1563** | **1447** | **1392** | **2377** | **2617** | **2322** | **818** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 8527 | 3610 | 2328 | 1142 | 6670 | 4721 | 2575 | 671 |
|  Cloud Software and Services | 1872 | 792 | 511 | 250 | 1464 | 1036 | 565 | 147 |
|  **Total** | **10399** | **4402** | **2839** | **1392** | **8134** | **5757** | **3140** | **818** |

---

Note 4 – Financial income and expenses, net

**Financial income and expenses, net** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Financial income | 283 | 319 | 117 | 59 | 125 | 127 | 124 | 315 |
|  Financial expenses | -757 | -428 | -452 | -293 | -439 | -325 | -382 | -528 |
|  Net foreign exchange gains/losses |  | -426 | -424 | -409 | -631 | -400 | -196 | -320 |
|  **Total** | **-474** | **-535** | **-759** | **-643** | **-945** | **-598** | **-454** | **-533** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec Jan-Sep | Jan-Dec Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec Jan-Sep | Jan-Dec Jan-Sep | Jan-Jun | Jan-Mar |
|  Financial income | 778 | 495 | 176 | 59 | 691 | 566 | 439 | 315 |
|  Financial expenses | -1930 | -1173 | -745 | -293 | -1674 | -1235 | -910 | -528 |
|  Net foreign exchange gains/losses | -1259 | -1259 | -833 | -409 | -1547 | -916 | -516 | -320 |
|  **Total** | **-2411** | **-1937** | **-1402** | **-643** | **-2530** | **-1585** | **-987** | **-533** |

---

 <br> 41 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

------

##### [**Table of Contents**](#toc)
Note 5 – Provisions

**Provisions** 

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Isolated quarters, SEK million | Q4 | Q4 | Q3 | Q3 | Q2 | Q2 | Q1 | Q1 | Q4 | Q4 | Q3 | Q3 | Q2 | Q2 | Q1 | Q1 |  |
|  Opening balance |  | 10562 |  | 9668 |  | 10197 |  | 9504 |  | 8813 |  | 9232 |  | 11045 |  | 10466 |  |
|  Additions <sup>¹</sup><sup>)</sup> |  | 4304 |  | 351 |  | 547 |  | 1583 |  | 1738 |  | 316 |  | 616 |  | 1753 |  |
|  Utilization ²<sup>)</sup> |  | -1974 |  | -533 |  | -893 |  | -1173 |  | -643 |  | -408 |  | -2179 |  | -979 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which restructuring* | | *-150* | | *-70* | | *-51* | | *-67* | | *-193* | | *-95* | | *-161* | | *-336* | |
|  Reversal of excess amounts |  | -1034 |  | -236 |  | -316 |  | -452 |  | -603 |  | -66 |  | -170 |  | -339 |  |
|  Reclassification, translation difference and other<sup>²</sup><sup>)</sup> |  | -270 |  | 1312 |  | 133 |  | 735 |  | 199 |  | -261 |  | -80 |  | 144 |  |
|  **Closing balance** |  | **11588** |  | **10562** |  | **9668** |  | **10197** |  | **9504** |  | **8813** |  | **9232** |  | **11045** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which restructuring* | | *668* | | *595* | | *579* | | *604* | | *637* | | *732* | | *807* | | *950* | |
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year to date, SEK million | Jan-Dec | Jan-Dec | Jan-Sep | Jan-Sep | Jan-Jun | Jan-Jun | Jan-Mar | Jan-Mar | Jan-Dec | Jan-Dec | Jan-Sep | Jan-Sep | Jan-Jun | Jan-Jun | Jan-Mar | Jan-Mar |  |
|  Opening balance |  | 9504 |  | 9504 |  | 9504 |  | 9504 |  | 10466 |  | 10466 |  | 10466 |  | 10466 |  |
|  Additions<sup>¹</sup><sup>)</sup> |  | 6785 |  | 2481 |  | 2130 |  | 1583 |  | 4423 |  | 2685 |  | 2369 |  | 1753 |  |
|  Utilization ²<sup>)</sup> |  | -4573 |  | -2599 |  | -2066 |  | -1173 |  | -4209 |  | -3566 |  | -3158 |  | -979 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which restructuring* | | *-338* | | *-188* | | *-118* | | *-67* | | *-785* | | *-592* | | *-497* | | *-336* | |
|  Reversal of excess amounts |  | -2038 |  | -1004 |  | -768 |  | -452 |  | -1178 |  | -575 |  | -509 |  | -339 |  |
|  Reclassification, translation difference and other <sup>²</sup><sup>)</sup> |  | 1910 |  | 2180 |  | 868 |  | 735 |  | 2 |  | -197 |  | 64 |  | 144 |  |
|  **Closing balance** |  | **11588** |  | **10562** |  | **9668** |  | **10197** |  | **9504** |  | **8813** |  | **9232** |  | **11045** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *Of which restructuring* | | *668* | | *595* | | *579* | | *604* | | *637* | | *732* | | *807* | | *950* | |

---

<sup>1)</sup> Q4 2022 includes a provision of SEK -2.3 billion in relation to a potential DPA breach resolution with DOJ, including estimated expenses for extended monitorship.

<sup>2)</sup> Includes a provision from acquired business in Q3 2022, which was utilized in Q4 2022. For more information see note 11 "Business combinations".

In December 2019, Ericsson entered into a deferred prosecution agreement (DPA) with the United States Department of Justice (DOJ). The DPA has a three-year term and includes a guilty plea by our Egyptian subsidiary to a criminal violation of the US Foreign Corrupt Practices Act's (FCPA) antibribery provisions. In October 2021, the DOJ notified Ericsson of its determination that the Company breached its obligations under the DPA by failing to provide required information to the DOJ. In March 2022, the DOJ informed Ericsson that, before entering into the DPA, the Company provided insufficient information to the DOJ about the Company's 2019 internal investigation into conduct in Iraq. The DOJ also determined that the Company breached the DPA by failing to inform the DOJ about the investigation post-DPA. In December 2022, the Company agreed with the DOJ and SEC to extend the term of the Company's independent compliance monitor for one year, to June 2024. In addition, the Company made a provision in the fourth quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation to a potential resolution with the DOJ regarding previously announced, non-criminal, alleged breaches under the DPA. The provision also includes estimated expenses for the previously announced extended monitorship. The eventual financial penalty could differ materially from the provision, since negotiations are still ongoing.

 <br> 42 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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##### [**Table of Contents**](#toc)
Note 6 – Financial risk management

There have been no changes to the classification of financial instruments or fair value hierarchy categorization from that presented in the latest Annual Report. Where Level 2 and Level 3 fair value hierarchies apply, the inputs and valuation methods used remained unchanged. The book values and fair values of financial instruments are as follows:

**Financial instruments** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| SEK billion | Dec 31<br>2022 | Dec 31<br>2022 | Dec 31<br>2022 | Dec 31<br>2022 | Dec 31<br>2021 | Dec 31<br>2021 | Dec 31<br>2021 | Dec 31<br>2021 |
|  | Fair value hierarchy level | Fair value hierarchy level | Fair value hierarchy level | Fair value hierarchy level | Fair value hierarchy level | Fair value hierarchy level | Fair value hierarchy level | Fair value hierarchy level |
|  | Carrying<br>value | Level 1 | Level 2 | Level 3 | Carrying<br>value | Level 1 | Level 2 | Level 3 |
|  Assets at fair value through profit or loss |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Customer finance <sup>¹</sup><sup>)</sup> | 5.4 |  |  | 5.4 | 3.3 |  |  | 3.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing securities | 17.5 | 17.5 |  |  | 43.3 | 43.3 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash equivalents ²<sup>)</sup> | 15.3 |  | 15.3 |  | 26.0 |  | 26.0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other financial assets | 2.1 | 0.1 |  | 2.0 | 2.3 | 0.6 |  | 1.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets | 1.1 |  | 1.1 |  | 0.3 |  | 0.3 |  |
|  Assets at fair value through OCI |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade receivables | 48.4 |  |  | 48.4 | 45.4 |  |  | 45.4 |
|  Assets at amortized costs |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing securities | 0.4 |  |  |  | 0.3 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash equivalents ²<sup>)</sup> | 2.9 |  |  |  | 4.0 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other financial assets | 0.6 |  |  |  | 0.5 |  |  |  |
|  **Total financial assets** | **93.7** |  |  |  | **125.4** |  |  |  |
|  Financial liabilities at designated FVTPL |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Parent company borrowings | -29.6 | -16.7 | -12.9 |  | -31.4 | -19.5 | -11.9 |  |
|  Financial liabilities at FVTPL |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | -2.6 |  | -2.6 |  | -0.8 |  | -0.8 |  |
|  Liabilities at amortized cost |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade payables | -38.4 |  |  |  | -35.7 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Borrowings | -3.4 |  |  |  | -0.4 |  |  |  |
|  **Total financial liabilities** | **-74.0** |  |  |  | **-68.3** |  |  |  |

---

<sup>1)</sup> Year to date movements of customer finance receivables are as follows: additions of SEK 37.3 billion, disposals and repayments of SEK 35.4 billion and revaluation gain of SEK 0.2 billion.

<sup>2)</sup> Total Cash and cash equivalent is SEK 38.3 (54.1) billion, of which SEK 18.2 (30.0) billion relating to Cash equivalents are presented in the table above. 

**Exchange rates used in the consolidation** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Jan-Dec | Jan-Dec | Jan-Dec | Jan-Dec |
|  | 2022 | 2022 | 2021 | 2021 |
|  SEK/EUR - closing rate |  | 11.08 |  | 10.24 |
|  SEK/USD - closing rate |  | 10.38 |  | 9.05 |

---

 <br> 43 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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Note 7 – Cash flow

**Information on investments** 

Investments in assets subject to depreciation, amortization, impairment and write-downs

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  **Additions** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment | 1502 | 1104 | 1053 | 818 | 701 | 1040 | 1007 | 915 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capitalized development expenses | 717 | 414 | 301 | 288 | 302 | 190 | 266 | 204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IPR, brands and other intangible assets | 120 | 2 | 2 | 2 | 123 | 3 | 1 | 4 |
|  **Total** | **2339** | **1520** | **1356** | **1108** | **1126** | **1233** | **1274** | **1123** |
|  **Depreciation, amortization and impairment losses** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment | 1250 | 1100 | 1074 | 964 | 1134 | 954 | 910 | 874 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capitalized development expenses | 395 | 387 | 403 | 401 | 396 | 394 | 329 | 224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill, IPR, brands and other intangible assets | 1196 | 499 | 159 | 198 | 436 | 464 | 294 | 283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets | 694 | 652 | 588 | 583 | 587 | 572 | 564 | 554 |
|  **Total** | **3535** | **2638** | **2224** | **2146** | **2553** | **2384** | **2097** | **1935** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  **Additions** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment | 4477 | 2975 | 1871 | 818 | 3663 | 2962 | 1922 | 915 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capitalized development expenses | 1720 | 1003 | 589 | 288 | 962 | 660 | 470 | 204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IPR, brands and other intangible assets | 126 | 6 | 4 | 2 | 131 | 8 | 5 | 4 |
|  **Total** | **6323** | **3984** | **2464** | **1108** | **4756** | **3630** | **2397** | **1123** |
|  **Depreciation, amortization and impairment losses** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property, plant and equipment | 4388 | 3138 | 2038 | 964 | 3872 | 2738 | 1784 | 874 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capitalized development expenses | 1586 | 1191 | 804 | 401 | 1343 | 947 | 553 | 224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill, IPR, brands and other intangible assets | 2052 | 856 | 357 | 198 | 1477 | 1041 | 577 | 283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets | 2517 | 1823 | 1171 | 583 | 2277 | 1690 | 1118 | 554 |
|  **Total** | **10543** | **7008** | **4370** | **2146** | **8969** | **6416** | **4032** | **1935** |

---

Note 8 – Contingent liabilities and Assets pledged as collateral

**Contingent liabilities and Assets pledged as collateral** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| SEK million | Dec 31<br>2022 | Dec 31<br>2022 | Dec 31<br>2021 | Dec 31<br>2021 |
|  Contingent liabilities |  | 3322 |  | 1614 |
|  Assets pledged as collateral |  | 7226 |  | 6873 |

---

 <br> 44 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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Note 9 – Share information

**Number of shares and earnings per share** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Jan-Dec | Jan-Dec |
|  | 2022 | 2021 | 2022 | 2021 |
|  Number of shares, end of period (million) | 3334 | 3334 | 3334 | 3334 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Of which class A-shares (million) | 262 | 262 | 262 | 262 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Of which class B-shares (million) | 3072 | 3072 | 3072 | 3072 |
|  Number of treasury shares, end of period (million) | 4 | 4 | 4 | 4 |
|  Number of shares outstanding, basic, end of period (million) | 3330 | 3330 | 3330 | 3330 |
|  Numbers of shares outstanding, diluted, end of period (million) | 3334 | 3333 | 3334 | 3333 |
|  Average number of treasury shares (million) | 4 | 4 | 4 | 5 |
|  Average number of shares outstanding, basic (million) | 3330 | 3330 | 3330 | 3329 |
|  Average number of shares outstanding, diluted (million) <sup>¹)</sup> | 3334 | 3333 | 3334 | 3332 |
|  Earnings per share, basic (SEK) <sup>²</sup><sup>)</sup> | 1.82 | 3.03 | 5.62 | 6.82 |
|  Earnings per share, diluted (SEK) ¹<sup>)</sup> | 1.82 | 3.02 | 5.62 | 6.81 |

---

<sup>1)</sup> Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

<sup>2)</sup> Based on net income attributable to owners of the Parent Company.

The proposed dividend of SEK 2.50 per share was approved by the AGM on March 29, 2022. The dividend was paid out in two equal installments; SEK 1.25 per share in Q2 and in Q4 2022.

Note 10 – Employee information

**Number of employees** 

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| End of period | Dec 31 | Dec 31 | Sep 30 | Sep 30 | Jun 30 | Jun 30 | Mar 31 | Mar 31 | Dec 31 | Dec 31 | Sep 30 | Sep 30 | Jun 30 | Jun 30 | Mar 31 | Mar 31 |  |
|  South East Asia, Oceania and India |  | 27761 |  | 26844 |  | 26127 |  | 26255 |  | 26369 |  | 26363 |  | 26325 |  | 26123 |  |
|  North East Asia |  | 13207 |  | 13219 |  | 13077 |  | 12999 |  | 13091 |  | 14111 |  | 14043 |  | 14033 |  |
|  North America |  | 11993 |  | 11706 |  | 10501 |  | 10327 |  | 10344 |  | 10371 |  | 10256 |  | 10161 |  |
|  Europe and Latin America <sup>¹</sup> |  | 48023 |  | 48144 |  | 47240 |  | 46994 |  | 47064 |  | 46903 |  | 46616 |  | 46482 |  |
|  Middle East and Africa |  | 4545 |  | 4577 |  | 4514 |  | 4492 |  | 4454 |  | 4455 |  | 4384 |  | 4314 |  |
|  **Total** |  | **105529** |  | **104490** |  | **101459** |  | **101067** |  | **101322** |  | **102203** |  | **101624** |  | **101113** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *<sup>¹)</sup> Of which in Sweden* | | *14481* | | *14444* | | *14564* | | *14195* | | *14183* | | *13908* | | *13626* | | *13379* | |

---

 <br> 45 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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Note 11 – Business combinations

**Acquisition Vonage – Final PPA** 

---

| | |
|:---|:---|
| SEK billion | 2022 |
|  Purchase price paid on acquisition <sup>¹</sup><sup>)</sup> | 51.3 |
|  Deferred consideration ²<sup>)</sup> | 2.0 |
|  **Total consideration, all cash and cash equivalents** | **53.3** |
|  **Net assets (liabilities) acquired** |  |
|  Intangible assets | 23.6 |
|  Property, plant and equipment | 0.2 |
|  Right-of-use assets | 0.3 |
|  Deferred tax assets | 2.4 |
|  Trade receivables | 1.1 |
|  Cash and cash equivalents | 0.5 |
|  Other assets | 1.9 |
|  Provisions | -1.1 |
|  Deferred tax liabilities | -6.2 |
|  Borrowings | -6.5 |
|  Lease liabilities | -0.4 |
|  Other liabilities | -3.8 |
|  **Total identifiable net assets (liabilities)** | **12.0** |
|  Goodwill | 41.3 |
|  **Total** | **53.3** |
|  Acquisition-related costs <sup>³</sup><sup>)</sup> | 0.4 |

---

<sup>1)</sup> Purchase price to acquire shares outstanding net of hedge release of SEK 3.7 billion.

<sup>2)</sup> Deferred consideration relates to the pre-combination portion of employee stock awards that were previously granted to Vonage employees, which will be paid out post acquisition according to the original award vesting schedule.

<sup>3)</sup> Acquisition-related costs are included in Selling and administrative expenses in the consolidated income statement.

On July 21, 2022, the Company acquired, in an all cash transaction, all of the shares in Vonage Holdings Corp – a US-based global provider of cloud-based communications. This acquisition provides Ericsson with an opportunity to access a complementary, substantial and high growth segment. Vonage is a supplier of consumer communications solutions, as well as network API's, unified communications, and contact center solutions to enterprises world-wide. With increasing investments in 4G and 5G – and a flourishing ecosystem of new applications and use cases leveraging the power of modern networks – demand from enterprises for programmable networks has been accelerating. Goodwill in this transaction represents future customers, technology, and synergies and is not expected to be deductible for tax purposes. The intangible assets mainly relate to customer relationships. The fair values of the assets acquired and liabilities assumed, at the acquisition date and as presented in Q4 2022, are final.

Vonage's net sales and EBIT (loss) for the period, from acquisition date, amounts to SEK 7.0 billion and SEK -1.8 billion respectively.

Vonage's net sales and EBIT (loss) for the 2022 financial year, as though the acquisition date occurred at the beginning of the annual reporting period, amounts to SEK 14.4 (USD 1.4) billion and SEK -3.0 (USD -0.3) billion respectively.

 <br> 46 Ericsson \| Fourth quarter and full-year report 2022 Accounting policies and Explanatory notes

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**Alternative performance measures (unaudited)** 

In this section, the Company presents its Alternative Performance Measures (APMs), which are not recognized measures of financial performance under IFRS. The presentation of APMs has limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS.

APMs are presented to enhance an investor's evaluation of ongoing operating results, to aid in forecasting future periods and to facilitate meaningful comparison of results between periods.

Management uses these APMs to, among other things, evaluate ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of certain performance-based compensation. APM's should not be viewed as substitutes for income statement or cash flow items computed in accordance with IFRS.

This section also includes a reconciliation of the APMs to the most directly reconcilable line items in the financial statements. For more information about non-IFRS key operating measures, see Ericsson Annual Report 2021.

**Sales growth adjusted for comparable units and currency** 

Sales growth adjusted for the impact of acquisitions and divestments as well as the effects of foreign currency fluctuations. Also named organic sales.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, year over year change | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Reported net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquired business | -4090 | -2925 |  |  | -124 | -402 | -450 | -225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net FX impact | -9489 | -7437 | -5034 | -4008 | -385 | 1196 | 5455 | 5341 |
|  Comparable net sales, excluding FX impact | 72401 | 57678 | 57431 | 51053 | 70823 | 57057 | 59946 | 54894 |
|  Comparable quarter net sales adj. for acq/div business | 71332 | 56263 | 54941 | 49778 | 69590 | 57472 | 55578 | 49750 |
|  Sales growth adjusted for comparable units and currency (%) | 1% | 3% | 5% | 3% | 2% | -1% | 8% | 10% |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, year over year change | Jan-Dec | Jan-Sep | Jan-Jun | Jan-M ar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-M ar |
|  Reported net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquired business | -7015 | -2925 |  |  | -1201 | -1077 | -675 | -225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net FX impact | -25968 | -16479 | -9042 | -4008 | 11607 | 11992 | 10796 | 5341 |
|  Comparable net sales, excluding FX impact | 238563 | 166162 | 108484 | 51053 | 242720 | 171897 | 114840 | 54894 |
|  Comparable quarter net sales adj. for acq/div business | 232314 | 160982 | 104719 | 49778 | 232390 | 162800 | 105328 | 49750 |
|  Sales growth adjusted for comparable units and currency (%) | 3% | 3% | 4% | 3% | 4% | 6% | 9% | 10% |

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 <br> 47 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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**Items excluding restructuring charges** 

Gross income, operating expenses, and EBIT are presented excluding restructuring charges and, for certain measures, as a percentage of net sales.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Gross income | 35569 | 28135 | 26302 | 23289 | 30821 | 24776 | 23857 | 21295 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  Gross margin (%) | 41.4% | 41.4% | 42.1% | 42.3% | 43.2% | 44.0% | 43.4% | 42.8% |
|  Gross income | 35569 | 28135 | 26302 | 23289 | 30821 | 24776 | 23857 | 21295 |
|  Restructuring charges included in cost of sales | 96 | 55 | 42 | 2 | 199 | 6 | 6 | 62 |
|  Gross income excluding restructuring charges | 35665 | 28190 | 26344 | 23291 | 31020 | 24782 | 23863 | 21357 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  Gross margin excluding restructuring charges (%) | 41.5% | 41.4% | 42.2% | 42.3% | 43.5% | 44.0% | 43.4% | 42.9% |
|  Operating expenses | -24909 | -21283 | -19365 | -17473 | -19384 | -16359 | -17352 | -15976 |
|  Restructuring charges included in R&D expenses | 10 | 7 | 4 | 33 | 140 | -2 | -1 |  |
|  Restructuring charges included in selling and administrative expenses | 122 | 19 | 3 | 6 | 124 | 1 | -1 | 15 |
|  Operating expenses excluding restructuring charges | -24777 | -21257 | -19358 | -17434 | -19120 | -16360 | -17354 | -15961 |
|  EBIT | 7853 | 7115 | 7308 | 4744 | 11861 | 8835 | 5823 | 5261 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  EBIT margin (%) | 9.1% | 10.5% | 11.7% | 8.6% | 16.6% | 15.7% | 10.6% | 10.6% |
|  EBIT | 7853 | 7115 | 7308 | 4744 | 11861 | 8835 | 5823 | 5261 |
|  Total restructuring charges | 228 | 81 | 49 | 41 | 463 | 5 | 4 | 77 |
|  EBIT excluding restructuring charges | 8081 | 7196 | 7357 | 4785 | 12324 | 8840 | 5827 | 5338 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  EBIT margin excluding restructuring charges (%) | 9.4% | 10.6% | 11.8% | 8.7% | 17.3% | 15.7% | 10.6% | 10.7% |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Gross income | 113295 | 77726 | 49591 | 23289 | 100749 | 69928 | 45152 | 21295 |
|  Net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
|  Gross margin (%) | 41.7% | 41.9% | 42.2% | 42.3% | 43.4% | 43.4% | 43.1% | 42.8% |
|  Gross income | 113295 | 77726 | 49591 | 23289 | 100749 | 69928 | 45152 | 21295 |
|  Restructuring charges included in cost of sales | 195 | 99 | 44 | 2 | 273 | 74 | 68 | 62 |
|  Gross income excluding restructuring charges | 113490 | 77825 | 49635 | 23291 | 101022 | 70002 | 45220 | 21357 |
|  Net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
|  Gross margin excluding restructuring charges (%) | 41.8% | 41.9% | 42.2% | 42.3% | 43.5% | 43.5% | 43.2% | 42.9% |
|  Operating expenses | -83030 | -58121 | -36838 | -17473 | -69071 | -49687 | -33328 | -15976 |
|  Restructuring charges included in R&D expenses | 54 | 44 | 37 | 33 | 137 | -3 | -1 |  |
|  Restructuring charges included in selling and administrative expenses | 150 | 28 | 9 | 6 | 139 | 15 | 14 | 15 |
|  Operating expenses excluding restructuring charges | -82826 | -58049 | -36792 | -17434 | -68795 | -49675 | -33315 | -15961 |
|  EBIT | 27020 | 19167 | 12052 | 4744 | 31780 | 19919 | 11084 | 5261 |
|  Net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
|  EBIT margin (%) | 10.0% | 10.3% | 10.3% | 8.6% | 13.7% | 12.4% | 10.6% | 10.6% |
|  EBIT | 27020 | 19167 | 12052 | 4744 | 31780 | 19919 | 11084 | 5261 |
|  Total restructuring charges | 399 | 171 | 90 | 41 | 549 | 86 | 81 | 77 |
|  EBIT excluding restructuring charges | 27419 | 19338 | 12142 | 4785 | 32329 | 20005 | 11165 | 5338 |
|  Net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
|  EBIT margin excluding restructuring charges (%) | 10.1% | 10.4% | 10.3% | 8.7% | 13.9% | 12.4% | 10.7% | 10.7% |

---

 <br> 48 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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##### [**Table of Contents**](#toc)
**EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges** 

Earnings before interest, taxes, amortizations, write-downs of acquired intangibles and excluding restructuring charges also expressed as a percentage of net sales.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Net income | 6190 | 5360 | 4650 | 2912 | 10146 | 5766 | 3900 | 3168 |
|  Income tax | 1189 | 1220 | 1899 | 1189 | 770 | 2471 | 1469 | 1560 |
|  Financial income and expenses, net | 474 | 535 | 759 | 643 | 945 | 598 | 454 | 533 |
|  Amortizations and write-downs of acquired intangibles | 1196 | 498 | 158 | 199 | 436 | 464 | 294 | 283 |
|  EBITA | 9049 | 7613 | 7466 | 4943 | 12297 | 9299 | 6117 | 5544 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  EBITA margin (%) | 10.5% | 11.2% | 12.0% | 9.0% | 17.2% | 16.5% | 11.1% | 11.1% |
|  Restructuring charges | 228 | 81 | 49 | 41 | 463 | 5 | 4 | 77 |
|  EBITA excluding restructuring charges | 9277 | 7694 | 7515 | 4984 | 12760 | 9304 | 6121 | 5621 |
|  EBITA margin excluding restructuring charges (%) | 10.8% | 11.3% | 12.0% | 9.1% | 17.9% | 16.5% | 11.1% | 11.3% |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Net income | 19112 | 12922 | 7562 | 2912 | 22980 | 12834 | 7068 | 3168 |
|  Income tax | 5497 | 4308 | 3088 | 1189 | 6270 | 5500 | 3029 | 1560 |
|  Financial income and expenses, net | 2411 | 1937 | 1402 | 643 | 2530 | 1585 | 987 | 533 |
|  Amortizations and write-downs of acquired intangibles | 2051 | 855 | 357 | 199 | 1477 | 1041 | 577 | 283 |
|  EBITA | 29071 | 20022 | 12409 | 4943 | 33257 | 20960 | 11661 | 5544 |
|  Net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
|  EBITA margin (%) | 10.7% | 10.8% | 10.6% | 9.0% | 14.3% | 13.0% | 11.1% | 11.1% |
|  Restructuring charges | 399 | 171 | 90 | 41 | 549 | 86 | 81 | 77 |
|  EBITA excluding restructuring charges | 29470 | 20193 | 12499 | 4984 | 33806 | 21046 | 11742 | 5621 |
|  EBITA margin excluding restructuring charges (%) | 10.9% | 10.9% | 10.6% | 9.1% | 14.6% | 13.1% | 11.2% | 11.3% |

---

**Rolling four quarters of net sales and EBIT margin excluding restructuring charges (%)** 

Net sales, EBIT margin and restructuring charges as a sum of last four quarters.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Rolling four quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Net sales | 271546 | 256898 | 245121 | 237597 | 232314 | 230572 | 231781 | 232418 |
|  EBIT | 27020 | 31028 | 32748 | 31263 | 31780 | 30927 | 30735 | 28763 |
|  Restructuring charges | 399 | 634 | 558 | 513 | 549 | 78 | 403 | 1082 |
|  EBIT excl. restr . charges | 27419 | 31662 | 33306 | 31776 | 32329 | 31005 | 31138 | 29845 |
|  EBIT margin excl. restr. charges (%) | 10.1% | 12.3% | 13.6% | 13.4% | 13.9% | 13.4% | 13.4% | 12.8% |

---

 <br> 49 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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##### [**Table of Contents**](#toc)
**Gross cash and net cash, end of period** 

Gross cash: Cash and cash equivalents plus interest-bearing securities (current and non-current).

Net cash: Cash and cash equivalents plus interest-bearing securities (current and non-current) less borrowings (current and non-current).

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Cash and cash equivalents | 38349 | 36749 | 93618 | 76856 | 54050 | 46476 | 43273 | 40543 |
|  + Interest-bearing securities, current | 8736 | 6640 | 3715 | 12292 | 12932 | 15016 | 12855 | 4599 |
|  + Interest-bearing securities, non-current | 9164 | 2423 | 3061 | 15022 | 30626 | 26668 | 20998 | 23477 |
|  Gross cash, end of period | 56249 | 45812 | 100394 | 104170 | 97608 | 88160 | 77126 | 68619 |
|  - Borrowings, current | 5984 | 5437 | 3686 | 10403 | 9590 | 10155 | 11737 | 2353 |
|  - Borrowings, non-current | 26946 | 26994 | 26363 | 28599 | 22241 | 22282 | 21673 | 23299 |
|  Net cash, end of period | 23319 | 13381 | 70345 | 65168 | 65777 | 55723 | 43716 | 42967 |

---

**Capital employed** 

Total assets less non-interest-bearing provisions and liabilities.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Total assets | 349537 | 361166 | 332453 | 323935 | 305614 | 290527 | 281045 | 270319 |
|  Non-interest-bearing provisions and liabilities |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions, non-current | 3959 | 4511 | 4020 | 4498 | 3722 | 2471 | 1922 | 2337 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred tax liabilities | 4784 | 8025 | 1250 | 1012 | 884 | 909 | 975 | 1049 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other non-current liabilities | 745 | 791 | 762 | 1070 | 1587 | 1605 | 1596 | 1326 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provisions, current | 7629 | 6051 | 5648 | 5699 | 5782 | 6342 | 7310 | 8708 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities | 42251 | 41105 | 41547 | 39875 | 32834 | 33869 | 36621 | 32054 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade payables | 38437 | 40864 | 39539 | 35316 | 35684 | 31877 | 29638 | 29135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current tax liabilities | 2640 | 5008 | 6703 | 5701 | 2917 | 5409 | 4676 | 4761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | 46193 | 50554 | 40346 | 41919 | 37921 | 36025 | 32477 | 35761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed | 202899 | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 |

---

**Capital turnover** 

Annualized net sales divided by average capital employed.

Annualization factor of four is used for isolated quarter.

Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Net sales | 85980 | 68040 | 62465 | 55061 | 71332 | 56263 | 54941 | 49778 |
|  Annualized net sales | 343920 | 272160 | 249860 | 220244 | 285328 | 225052 | 219764 | 199112 |
|  Average capital employed |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at beginning of period | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 | 161990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at end of period | 202899 | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average capital employed | 203578 | 198448 | 190742 | 186564 | 178152 | 168925 | 160509 | 158589 |
|  Capital turnover (times) | 1.7 | 1.4 | 1.3 | 1.2 | 1.6 | 1.3 | 1.4 | 1.3 |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Net sales | 271546 | 185566 | 117526 | 55061 | 232314 | 160982 | 104719 | 49778 |
|  Annualized net sales | 271546 | 247421 | 235052 | 220244 | 232314 | 214643 | 209438 | 199112 |
|  Average capital employed |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at beginning of period | 184283 | 184283 | 184283 | 184283 | 161990 | 161990 | 161990 | 161990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at end of period | 202899 | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average capital employed | 193591 | 194270 | 188461 | 186564 | 173137 | 167005 | 163910 | 158589 |
|  Capital turnover (times) | 1.4 | 1.3 | 1.2 | 1.2 | 1.3 | 1.3 | 1.3 | 1.3 |

---

 <br> 50 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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##### [**Table of Contents**](#toc)
**Return on capital employed** 

The annualized total of EBIT as a percentage of average capital employed.

Annualization factor of four is used for isolated quarter.

Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  EBIT | 7853 | 7115 | 7308 | 4744 | 11861 | 8835 | 5823 | 5261 |
|  Annualized EBIT | 31412 | 28460 | 29232 | 18976 | 47444 | 35340 | 23292 | 21044 |
|  Average capital employed |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at beginning of period | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 | 161990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at end of period | 202899 | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average capital employed | 203578 | 198448 | 190742 | 186564 | 178152 | 168925 | 160509 | 158589 |
|  Return on capital employed (%) | 15.4% | 14.3% | 15.3% | 10.2% | 26.6% | 20.9% | 14.5% | 13.3% |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  EBIT | 27020 | 19167 | 12052 | 4744 | 31780 | 19919 | 11084 | 5261 |
|  Annualized EBIT | 27020 | 25556 | 24104 | 18976 | 31780 | 26559 | 22168 | 21044 |
|  Average capitalem ployed |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at beginning of period | 184283 | 184283 | 184283 | 184283 | 161990 | 161990 | 161990 | 161990 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital employed at end of period | 202899 | 204257 | 192638 | 188845 | 184283 | 172020 | 165830 | 155188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average capital employed | 193591 | 194270 | 188461 | 186564 | 173137 | 167005 | 163910 | 158589 |
|  Return on capital employed (%) | 14.0% | 13.2% | 12.8% | 10.2% | 18.4% | 15.9% | 13.5% | 13.3% |

---

**Equity ratio** 

Equity expressed as a percentage of total assets.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Total equity | 133304 | 136820 | 127799 | 109879 | 107099 | 95628 | 91695 | 88124 |
|  Total assets | 349537 | 361166 | 332453 | 323935 | 305614 | 290527 | 281045 | 270319 |
|  Equity ratio (%) | 38.1% | 37.9% | 38.4% | 33.9% | 35.0% | 32.9% | 32.6% | 32.6% |

---

**Return on equity** 

Annualized net income attributable to owners of the Parent Company as a percentage of average stockholders' equity.

Annualization factor of four is used for isolated quarter.

Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Net income attributable to owners of the Parent Company | 6066 | 5214 | 4504 | 2940 | 10076 | 5752 | 3679 | 3187 |
|  Annualized | 24264 | 20856 | 18016 | 11760 | 40304 | 23008 | 14716 | 12748 |
|  Average stockholders' equity |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders' equity, beginning of period | 138607 | 129620 | 111701 | 108775 | 97323 | 93331 | 89782 | 86674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders' equity, end of period | 134814 | 138607 | 129620 | 111701 | 108775 | 97323 | 93331 | 89782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average stockholders' equity | 136711 | 134114 | 120661 | 110238 | 103049 | 95327 | 91557 | 88228 |
|  Return on equity (%) | 17.7% | 15.6% | 14.9% | 10.7% | 39.1% | 24.1% | 16.1% | 14.4% |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Net income attributable to owners of the Parent Company | 18724 | 12658 | 7444 | 2940 | 22694 | 12618 | 6866 | 3187 |
|  Annualized | 18724 | 16877 | 14888 | 11760 | 22694 | 16824 | 13732 | 12748 |
|  Average stockholders' equity |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders' equity, beginning of period | 108775 | 108775 | 108775 | 108775 | 86674 | 86674 | 86674 | 86674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders' equity, end of period | 134814 | 138607 | 129620 | 111701 | 108775 | 97323 | 93331 | 89782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average stockholders' equity | 121795 | 123691 | 119198 | 110238 | 97725 | 91999 | 90003 | 88228 |
|  Return on equity (%) | 15.4% | 13.6% | 12.5% | 10.7% | 23.2% | 18.3% | 15.3% | 14.4% |

---

 <br> 51 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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##### [**Table of Contents**](#toc)
**Adjusted earnings per share** 

Adjusted earnings per share, diluted, excluding amortizations and write-downs of acquired intangible assets and excluding restructuring charges.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Earnings per share, diluted | 1.82 | 1.56 | 1.35 | 0.88 | 3.02 | 1.73 | 1.10 | 0.96 |
|  Restructuring charges | 0.05 | 0.02 | 0.01 | 0.01 | 0.11 | 0.00 | 0.00 | 0.02 |
|  Amortizations and write-downs of acquired intangibles | 0.26 | 0.12 | 0.03 | 0.05 | 0.10 | 0.09 | 0.07 | 0.06 |
|  Adjusted earnings per share | 2.13 | 1.70 | 1.39 | 0.94 | 3.23 | 1.82 | 1.17 | 1.04 |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Earnings per share, diluted | 5.62 | 3.80 | 2.23 | 0.88 | 6.81 | 3.79 | 2.06 | 0.96 |
|  Restructuring charges | 0.09 | 0.04 | 0.02 | 0.01 | 0.13 | 0.02 | 0.02 | 0.02 |
|  Amortizations and write-downs of acquired intangibles | 0.45 | 0.19 | 0.08 | 0.05 | 0.32 | 0.22 | 0.13 | 0.06 |
|  Adjusted earnings per share | 6.16 | 4.03 | 2.33 | 0.94 | 7.26 | 4.03 | 2.21 | 1.04 |

---

**Free cash flow before M&A / Free cash flow after M&A** 

Free cash flow before M&A: Cash flow from operating activities less net capital expenditures, other investments (excluding M&A) and repayment of lease liabilities.

Free cash flow after M&A: Cash flow from operating activities less net capital expenditures, other investments and repayment of

lease liabilities.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Cash flow from operating activities | 19895 | 4651 | 6287 | 30 | 15196 | 14724 | 5940 | 3205 |
|  Net capital expenditures and other investments (excl M&A) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments in property, plant and equipment | -1502 | -1104 | -1053 | -818 | -701 | -1040 | -1007 | -915 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales of property, plant and equipment | 76 | 74 | 61 | 38 | 34 | 40 | 17 | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development | -717 | -414 | -301 | -288 | -302 | -190 | -266 | -204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other investments <sup>1)</sup>  | -121 | -1 | 23 | -27 | -122 | -4 |  | -5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayment of lease liabilities | -765 | -658 | -577 | -593 | -623 | -580 | -617 | -548 |
|  Free cash flow before M&A | 16866 | 2548 | 4440 | -1658 | 13482 | 12950 | 4067 | 1557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisitions/ divestments of subs and other operations, net | -445 | -51412 | 123 | 46 | 178 | -55 | -69 | 5 |
|  Free cash flow after M&A | 16421 | -48864 | 4563 | -1612 | 13660 | 12895 | 3998 | 1562 |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec Jan-Sep Jan-Jun | Jan-Dec Jan-Sep Jan-Jun | Jan-Dec Jan-Sep Jan-Jun | Jan-Mar |
|  Cash flow from operating activities | 30863 | 10968 | 6317 | 30 | 39065 | 23869 | 9145 | 3205 |
|  Net capital expenditures and other investments (excl M&A) |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments in property, plant and equipment | -4477 | -2975 | -1871 | -818 | -3663 | -2962 | -1922 | -915 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales of property, plant and equipment | 249 | 173 | 99 | 38 | 115 | 81 | 41 | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development | -1720 | -1003 | -589 | -288 | -962 | -660 | -470 | -204 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other investments <sup>1)</sup> | -126 | -5 | -4 | -27 | -131 | -9 | -5 | -5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayment of lease liabilities | -2593 | -1828 | -1170 | -593 | -2368 | -1745 | -1165 | -548 |
|  Free cash flow before M&A | 22196 | 5330 | 2782 | -1658 | 32056 | 18574 | 5624 | 1557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquisitions/ divestments of subs and other operations, net | -51688 | -51243 | 169 | 46 | 59 | -119 | -64 | 5 |
|  Free cash flow after M&A | -29492 | -45913 | 2951 | -1612 | 32115 | 18455 | 5560 | 1562 |

---

<sup>1)</sup> Other investments is part of the line item Other investing activities in the Consolidated cash flow statement. The differences are movements in other interest-bearing assets and the cash flow hedge reserve gain, which are not to be part of the definition of Free cash flow.

 <br> 52 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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##### [**Table of Contents**](#toc)
**Sales growth by segment adjusted for comparable units and currency<sup>\*)</sup>** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarter, year over year change, percent | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 1% | 4% |  |  |  |  |  |  |
|  Cloud Software and Services | 2% | -5% |  |  |  |  |  |  |
|  Enterprise | 15% | 21% |  |  |  |  |  |  |
|  Other | 10% | -1% |  |  |  |  |  |  |
|  **Total** | **1%** | **3%** | **5%** | **3%** | **2%** | **-1%** | **8%** | **10%** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, year over year change, percent | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 4% | 5% |  |  |  |  |  |  |
|  Cloud Software and Services | -1% | -3% |  |  |  |  |  |  |
|  Enterprise | 16% | 17% |  |  |  |  |  |  |
|  Other | 3% | 0% |  |  |  |  |  |  |
|  **Total** | **3%** | **3%** | **4%** | **3%** | **4%** | **6%** | **9%** | **10%** |

---

\*) Sales growth adjusted for comparable units and currency has not been restated by segment for the first two quarters of 2022 and for each quarter in 2021.

**Sales growth by market area adjusted for comparable units and currency** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarter, year over year change, percent | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  South East Asia, Oceania and India | 21% | 13% | 6% | -17% | -13% | -16% | 14% | 21% |
|  North East Asia | -16% | -6% | -1% | -20% | -22% | -33% | 1% | 78% |
|  North America | -7% | 9% | 12% | 9% | 15% | 13% | 11% | 10% |
|  Europe and Latin America | 0% | 0% | 4% | 15% | 12% | 9% | 14% | 12% |
|  Middle East and Africa | -4% | 3% | 8% | -9% | 5% | -8% | -10% | -16% |
|  **Total** | **1%** | **3%** | **5%** | **3%** | **2%** | **-1%** | **8%** | **10%** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, year over year change, percent | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  South East Asia, Oceania and India | 7% | 1% | -5% | -17% | -1% | 4% | 17% | 21% |
|  North East Asia | -11% | -9% | -10% | -20% | -8% | 1% | 27% | 78% |
|  North America | 5% | 10% | 10% | 9% | 12% | 11% | 11% | 10% |
|  Europe and Latin America | 4% | 6% | 9% | 15% | 12% | 12% | 13% | 12% |
|  Middle East and Africa | -1% | 1% | 0% | -9% | -7% | -12% | -13% | -16% |
|  **Total** | **3%** | **3%** | **4%** | **3%** | **4%** | **6%** | **9%** | **10%** |

---

 <br> 53 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

------

##### [**Table of Contents**](#toc)
**Gross margin by segment by quarter** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 44.4% | 44.4% | 45.1% | 44.7% | 46.3% | 47.8% | 47.9% | 46.1% |
|  Cloud Software and Services | 33.0% | 31.8% | 33.5% | 35.0% | 35.4% | 33.6% | 30.6% | 33.6% |
|  Enterprise | 43.5% | 46.5% | 45.0% | 47.8% | 46.2% | 48.8% | 47.8% | 41.8% |
|  Other | -2.3% | -27.9% | 5.4% | 0.2% | -3.3% | 7.9% | 4.3% | 22.0% |
|  **Total** | **41.4%** | **41.4%** | **42.1%** | **42.3%** | **43.2%** | **44.0%** | **43.4%** | **42.8%** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, as percentage of net sales | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 44.6% | 44.7% | 44.9% | 44.7% | 47.0% | 47.3% | 47.0% | 46.1% |
|  Cloud Software and Services | 33.2% | 33.3% | 34.2% | 35.0% | 33.5% | 32.6% | 32.0% | 33.6% |
|  Enterprise | 45.2% | 46.4% | 46.4% | 47.8% | 46.4% | 46.4% | 45.2% | 41.8% |
|  Other | -5.7% | -6.9% | 3.0% | 0.2% | 7.9% | 11.4% | 13.2% | 22.0% |
|  **Total** | **41.7%** | **41.9%** | **42.2%** | **42.3%** | **43.4%** | **43.4%** | **43.1%** | **42.8%** |

---

**EBIT margin by segment by quarter** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 21.2% | 19.9% | 19.3% | 18.7% | 23.0% | 23.7% | 21.7% | 20.0% |
|  Cloud Software and Services | 3.3% | -5.6% | -5.2% | -6.9% | 3.3% | -3.3% | -8.9% | -10.4% |
|  Enterprise | -44.7% | -32.4% | -44.7% | -44.3% | -42.7% | -52.6% | -40.6% | -57.0% |
|  Other | -414.4% | -3.9% | 3.2% | -247.8% | 59.4% | 95.0% | -196.7% | -6.8% |
|  **Total** | **9.1%** | **10.5%** | **11.7%** | **8.6%** | **16.6%** | **15.7%** | **10.6%** | **10.6%** |
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, as percentage of net sales | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 19.9% | 19.3% | 19.0% | 18.7% | 22.2% | 21.9% | 20.9% | 20.0% |
|  Cloud Software and Services | -2.8% | -5.9% | -6.0% | -6.9% | -4.0% | -7.4% | -9.6% | -10.4% |
|  Enterprise | -40.5% | -37.4% | -44.5% | -44.3% | -47.5% | -49.5% | -47.8% | -57.0% |
|  Other | -164.2% | -76.9% | -111.6% | -247.8% | -14.2% | -37.1% | -101.5% | -6.8% |
|  **Total** | **10.0%** | **10.3%** | **10.3%** | **8.6%** | **13.7%** | **12.4%** | **10.6%** | **10.6%** |

---

 <br> 54 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

------

##### [**Table of Contents**](#toc)
**Restructuring charges by function** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Cost of sales | -96 | -55 | -42 | -2 | -199 | -6 | -6 | -62 |
|  Research and development expenses | -10 | -7 | -4 | -33 | -140 | 2 | 1 | 0 |
|  Selling and administrative expenses | -122 | -19 | -3 | -6 | -124 | -1 | 1 | -15 |
|  **Total** | **-228** | **-81** | **-49** | **-41** | **-463** | **-5** | **-4** | **-77** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Cost of sales | -195 | -99 | -44 | -2 | -273 | -74 | -68 | -62 |
|  Research and development expenses | -54 | -44 | -37 | -33 | -137 | 3 | 1 | 0 |
|  Selling and administrative expenses | -150 | -28 | -9 | -6 | -139 | -15 | -14 | -15 |
|  **Total** | **-399** | **-171** | **-90** | **-41** | **-549** | **-86** | **-81** | **-77** |

---

**Restructuring charges by segment** 

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Isolated quarters, SEK million | Q4 | Q4 | Q3 | Q3 | Q2 | Q2 | Q1 | Q1 | Q4 | Q4 | Q3 | Q3 | Q2 | Q2 | Q1 | Q1 |  |
|  Networks |  | -65 |  | -26 |  | -45 |  | -10 |  | -278 |  | 1 |  | -8 |  | 23 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *-69* | | *-3* | | *-44* | | *-10* | | *-77* | | *1* | | *-1* | | *24* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *4* | | *-23* | | *-1* | | *0* | | *-201* | | *0* | | *-7* | | *-1* | |
|  Cloud Software and Services |  | -16 |  | -55 |  | 0 |  | -25 |  | -158 |  | -5 |  | -4 |  | -87 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *1* | | *-52* | | *2* | | *8* | | *-116* | | *-7* | | *-2* | | *-82* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *-17* | | *-3* | | *-2* | | *-33* | | *-42* | | *2* | | *-2* | | *-5* | |
|  Enterprise |  | -147 |  | 0 |  | -4 |  | -6 |  | -27 |  | -1 |  | 11 |  | 1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *-28* | | *0* | | *0* | | *0* | | *-6* | | *0* | | *1* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *-119* | | *0* | | *-4* | | *-6* | | *-21* | | *-1* | | *10* | | *1* | |
|  Other |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | 0 |  | -3 |  | -14 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *0* | | *0* | | *0* | | *0* | | *0* | | *0* | | *-4* | | *-4* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *0* | | *0* | | *0* | | *0* | | *0* | | *0* | | *1* | | *-10* | |
|  **Total** |  | **-228** |  | **-81** |  | **-49** |  | **-41** |  | **-463** |  | **-5** |  | **-4** |  | **-77** |  |

---

---

| | | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 | 2021 |  |
| Year to date, SEK million | Jan-Dec | Jan-Dec | Jan-Sep | Jan-Sep | Jan-Jun | Jan-Jun | Jan-Mar | Jan-Mar | Jan-Dec | Jan-Dec | Jan-Sep | Jan-Sep | Jan-Jun | Jan-Jun | Jan-Mar | Jan-Mar |  |
|  Networks |  | -146 |  | -81 |  | -55 |  | -10 |  | -262 |  | 16 |  | 15 |  | 23 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *-126* | | *-57* | | *-54* | | *-10* | | *-53* | | *24* | | *23* | | *24* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *-20* | | *-24* | | *-1* | | *0* | | *-209* | | *-8* | | *-8* | | *-1* | |
|  Cloud Software and Services |  | -96 |  | -80 |  | -25 |  | -25 |  | -254 |  | -96 |  | -91 |  | -87 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *-41* | | *-42* | | *10* | | *8* | | *-207* | | *-91* | | *-84* | | *-82* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *-55* | | *-38* | | *-35* | | *-33* | | *-47* | | *-5* | | *-7* | | *-5* | |
|  Enterprise |  | -157 |  | -10 |  | -10 |  | -6 |  | -16 |  | 11 |  | 12 |  | 1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *-28* | | *0* | | *0* | | *0* | | *-5* | | *1* | | *1* | | *0* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *-129* | | *-10* | | *-10* | | *-6* | | *-11* | | *10* | | *11* | | *1* | |
|  Other |  | 0 |  | 0 |  | 0 |  | 0 |  | -17 |  | -17 |  | -17 |  | -14 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which cost of sales* | | *0* | | *0* | | *0* | | *0* | | *-8* | | *-8* | | *-8* | | *-4* | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *of which operating expenses* | | *0* | | *0* | | *0* | | *0* | | *-9* | | *-9* | | *-9* | | *-10* | |
|  **Total** |  | **-399** |  | **-171** |  | **-90** |  | **-41** |  | **-549** |  | **-86** |  | **-81** |  | **-77** |  |

---

 <br> 55 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

------

##### [**Table of Contents**](#toc)
**Gross income and gross margin excluding restructuring charges by segment** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 26125 | 21369 | 20779 | 18221 | 23720 | 19400 | 19112 | 16690 |
|  Cloud Software and Services | 6663 | 4568 | 4690 | 4226 | 6478 | 4582 | 3961 | 4015 |
|  Enterprise | 2890 | 2398 | 843 | 843 | 838 | 760 | 764 | 534 |
|  Other | -13 | -145 | 32 | 1 | -16 | 40 | 26 | 118 |
|  **Total** | **35665** | **28190** | **26344** | **23291** | **31020** | **24782** | **23863** | **21357** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 44.6% | 44.4% | 45.2% | 44.8% | 46.4% | 47.8% | 47.9% | 46.0% |
|  Cloud Software and Services | 33.0% | 32.1% | 33.5% | 35.0% | 36.1% | 33.7% | 30.6% | 34.3% |
|  Enterprise | 43.9% | 46.5% | 45.0% | 47.8% | 46.5% | 48.8% | 47.8% | 41.8% |
|  Other | -2.3% | -27.9% | 5.4% | 0.2% | -3.3% | 7.9% | 5.0% | 22.8% |
|  **Total** | **41.5%** | **41.4%** | **42.2%** | **42.3%** | **43.5%** | **44.0%** | **43.4%** | **42.9%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 86494 | 60369 | 39000 | 18221 | 78922 | 55202 | 35802 | 16690 |
|  Cloud Software and Services | 20147 | 13484 | 8916 | 4226 | 19036 | 12558 | 7976 | 4015 |
|  Enterprise | 6974 | 4084 | 1686 | 843 | 2896 | 2058 | 1298 | 534 |
|  Other | -125 | -112 | 33 | 1 | 168 | 184 | 144 | 118 |
|  **Total** | **113490** | **77825** | **49635** | **23291** | **101022** | **70002** | **45220** | **21357** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, as percentage of net sales | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 44.7% | 44.8% | 45.0% | 44.8% | 47.0% | 47.3% | 47.0% | 46.0% |
|  Cloud Software and Services | 33.3% | 33.4% | 34.2% | 35.0% | 33.9% | 32.8% | 32.3% | 34.3% |
|  Enterprise | 45.3% | 46.4% | 46.4% | 47.8% | 46.4% | 46.4% | 45.1% | 41.8% |
|  Other | -5.7% | -6.9% | 3.0% | 0.2% | 8.3% | 12.0% | 13.9% | 22.8% |
|  **Total** | **41.8%** | **41.9%** | **42.2%** | **42.3%** | **43.5%** | **43.5%** | **43.2%** | **42.9%** |

---

 <br> 56 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

------

##### [**Table of Contents**](#toc)
**EBIT and EBIT margin excluding restructuring charges by segment** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 12518 | 9623 | 8906 | 7611 | 12035 | 9623 | 8653 | 7217 |
|  Cloud Software and Services | 689 | -737 | -733 | -812 | 748 | -444 | -1154 | -1130 |
|  Enterprise | -2797 | -1670 | -835 | -775 | -743 | -818 | -660 | -728 |
|  Other | -2329 | -20 | 19 | -1239 | 284 | 479 | -1012 | -21 |
|  **Total** | **8081** | **7196** | **7357** | **4785** | **12324** | **8840** | **5827** | **5338** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 21.4% | 20.0% | 19.4% | 18.7% | 23.6% | 23.7% | 21.7% | 19.9% |
|  Cloud Software and Services | 3.4% | -5.2% | -5.2% | -6.7% | 4.2% | -3.3% | -8.9% | -9.6% |
|  Enterprise | -42.5% | -32.4% | -44.5% | -44.0% | -41.2% | -52.5% | -41.3% | -57.1% |
|  Other | -414.4% | -3.9% | 3.2% | -247.8% | 59.4% | 95.0% | -196.1% | -4.1% |
|  **Total** | **9.4%** | **10.6%** | **11.8%** | **8.7%** | **17.3%** | **15.7%** | **10.6%** | **10.7%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 38658 | 26140 | 16517 | 7611 | 37528 | 25493 | 15870 | 7217 |
|  Cloud Software and Services | -1593 | -2282 | -1545 | -812 | -1980 | -2728 | -2284 | -1130 |
|  Enterprise | -6077 | -3280 | -1610 | -775 | -2949 | -2206 | -1388 | -728 |
|  Other | -3569 | -1240 | -1220 | -1239 | -270 | -554 | -1033 | -21 |
|  **Total** | **27419** | **19338** | **12142** | **4785** | **32329** | **20005** | **11165** | **5338** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, as percentage of net sales | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 20.0% | 19.4% | 19.1% | 18.7% | 22.4% | 21.8% | 20.8% | 19.9% |
|  Cloud Software and Services | -2.6% | -5.7% | -5.9% | -6.7% | -3.5% | -7.1% | -9.3% | -9.6% |
|  Enterprise | -39.5% | -37.3% | -44.3% | -44.0% | -47.3% | -49.8% | -48.3% | -57.1% |
|  Other | -164.2% | -76.9% | -111.6% | -247.8% | -13.4% | -36.0% | -99.9% | -4.1% |
|  **Total** | **10.1%** | **10.4%** | **10.3%** | **8.7%** | **13.9%** | **12.4%** | **10.7%** | **10.7%** |

---

**Rolling four quarters of net sales by segment <sup>\*)</sup>** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Rolling four quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 193468 | 185939 | 178383 | 172276 | 167838 |  |  |  |
|  Cloud Software and Services | 60524 | 58269 | 57666 | 56601 | 56224 |  |  |  |
|  Enterprise | 15380 | 10600 | 6997 | 6722 | 6236 |  |  |  |
|  Other | 2174 | 2090 | 2075 | 1998 | 2016 |  |  |  |
|  **Total** | **271546** | **256898** | **245121** | **237597** | **232314** | **230572** | **231781** | **232418** |

---

\*) Rolling four quarters of net sales by segment has not been restated for the first three quarters of 2021.

**Rolling four quarters of EBIT margin excluding restructuring charges by segment (%) <sup>\*)</sup>** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Rolling four quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 20.0% | 20.5% | 21.4% | 22.0% | 22.4% |  |  |  |
|  Cloud Software and Services | -2.6% | -2.6% | -2.2% | -2.9% | -3.5% |  |  |  |
|  Enterprise | -39.5% | -38.0% | -45.3% | -44.6% | -47.3% |  |  |  |
|  Other | -164.2% | -45.7% | -22.0% | -74.5% | -13.4% |  |  |  |
|  **Total** | **10.1%** | **12.3%** | **13.6%** | **13.4%** | **13.9%** | **13.4%** | **13.4%** | **12.8%** |

---

\*) Rolling four quarters of EBIT margin excluding restructuring charges by segment has not been restated for the first three quarters of 2021.

 <br> 57 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

------

##### [**Table of Contents**](#toc)
**EBITA and EBITA margin by segment by quarter** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 12555 | 9624 | 8889 | 7629 | 11787 | 9643 | 8679 | 7274 |
|  Cloud Software and Services | 695 | -769 | -710 | -783 | 861 | -318 | -1035 | -1097 |
|  Enterprise | -1882 | -1223 | -732 | -664 | -635 | -505 | -512 | -598 |
|  Other | -2319 | -19 | 19 | -1239 | 284 | 479 | -1015 | -35 |
|  **Total** | **9049** | **7613** | **7466** | **4943** | **12297** | **9299** | **6117** | **5544** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 21.4% | 20.0% | 19.3% | 18.7% | 23.1% | 23.8% | 21.8% | 20.1% |
|  Cloud Software and Services | 3.4% | -5.4% | -5.1% | -6.5% | 4.8% | -2.3% | -8.0% | -9.4% |
|  Enterprise | -28.6% | -23.7% | -39.0% | -37.7% | -35.2% | -32.4% | -32.0% | -46.9% |
|  Other | -412.6% | -3.7% | 3.2% | -247.8% | 59.4% | 95.0% | -196.7% | -6.8% |
|  **Total** | **10.5%** | **11.2%** | **12.0%** | **9.0%** | **17.2%** | **16.5%** | **11.1%** | **11.1%** |

---

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 38697 | 26142 | 16518 | 7629 | 37383 | 25596 | 15953 | 7274 |
|  Cloud Software and Services | -1567 | -2262 | -1493 | -783 | -1589 | -2450 | -2132 | -1097 |
|  Enterprise | -4501 | -2619 | -1396 | -664 | -2250 | -1615 | -1110 | -598 |
|  Other | -3558 | -1239 | -1220 | -1239 | -287 | -571 | -1050 | -35 |
|  **Total** | **29071** | **20022** | **12409** | **4943** | **33257** | **20960** | **11661** | **5544** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, as percentage of net sales | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 20.0% | 19.4% | 19.1% | 18.7% | 22.3% | 21.9% | 20.9% | 20.1% |
|  Cloud Software and Services | -2.6% | -5.6% | -5.7% | -6.5% | -2.8% | -6.4% | -8.6% | -9.4% |
|  Enterprise | -29.3% | -29.8% | -38.4% | -37.7% | -36.1% | -36.4% | -38.6% | -46.9% |
|  Other | -163.7% | -76.9% | -111.6% | -247.8% | -14.2% | -37.1% | -101.5% | -6.8% |
|  **Total** | **10.7%** | **10.8%** | **10.6%** | **9.0%** | **14.3%** | **13.0%** | **11.1%** | **11.1%** |

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 <br> 58 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures

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##### [**Table of Contents**](#toc)
**EBITA and EBITA margin excluding restructuring charges by segment** 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 12620 | 9650 | 8934 | 7639 | 12065 | 9642 | 8687 | 7251 |
|  Cloud Software and Services | 711 | -714 | -710 | -758 | 1019 | -313 | -1031 | -1010 |
|  Enterprise | -1735 | -1223 | -728 | -658 | -608 | -504 | -523 | -599 |
|  Other | -2319 | -19 | 19 | -1239 | 284 | 479 | -1012 | -21 |
|  **Total** | **9277** | **7694** | **7515** | **4984** | **12760** | **9304** | **6121** | **5621** |

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---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Isolated quarters, as percentage of net sales | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
|  Networks | 21.5% | 20.0% | 19.4% | 18.8% | 23.6% | 23.8% | 21.8% | 20.0% |
|  Cloud Software and Services | 3.5% | -5.0% | -5.1% | -6.3% | 5.7% | -2.3% | -8.0% | -8.6% |
|  Enterprise | -26.4% | -23.7% | -38.8% | -37.3% | -33.7% | -32.3% | -32.7% | -46.9% |
|  Other | -412.6% | -3.7% | 3.2% | -247.8% | 59.4% | 95.0% | -196.1% | -4.1% |
|  **Total** | **10.8%** | **11.3%** | **12.0%** | **9.1%** | **17.9%** | **16.5%** | **11.1%** | **11.3%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, SEK million | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 38843 | 26223 | 16573 | 7639 | 37645 | 25580 | 15938 | 7251 |
|  Cloud Software and Services | -1471 | -2182 | -1468 | -758 | -1335 | -2354 | -2041 | -1010 |
|  Enterprise | -4344 | -2609 | -1386 | -658 | -2234 | -1626 | -1122 | -599 |
|  Other | -3558 | -1239 | -1220 | -1239 | -270 | -554 | -1033 | -21 |
|  **Total** | **29470** | **20193** | **12499** | **4984** | **33806** | **21046** | **11742** | **5621** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 2022 | 2022 | 2022 | 2022 | 2021 | 2021 | 2021 | 2021 |
| Year to date, as percentage of net sales | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar | Jan-Dec | Jan-Sep | Jan-Jun | Jan-Mar |
|  Networks | 20.1% | 19.4% | 19.1% | 18.8% | 22.4% | 21.9% | 20.9% | 20.0% |
|  Cloud Software and Services | -2.4% | -5.4% | -5.6% | -6.3% | -2.4% | -6.2% | -8.3% | -8.6% |
|  Enterprise | -28.2% | -29.7% | -38.1% | -37.3% | -35.8% | -36.7% | -39.0% | -46.9% |
|  Other | -163.7% | -76.9% | -111.6% | -247.8% | -13.4% | -36.0% | -99.9% | -4.1% |
|  **Total** | **10.9%** | **10.9%** | **10.6%** | **9.1%** | **14.6%** | **13.1%** | **11.2%** | **11.3%** |

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**Other ratios** 

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Q4 | Q4 | Q4 | Q4 | Jan-Dec | Jan-Dec | Jan-Dec | Jan-Dec |
|  | 2022 | 2022 | 2021 | 2021 | 2022 | 2022 | 2021 | 2021 |
|  Days sales outstanding |  |  |  |  |  | 61 |  | 71 |
|  Inventory turn over days |  | 89 |  | 79 |  | 93 |  | 88 |
|  Payable days |  | 72 |  | 76 |  | 85 |  | 94 |

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 <br> 59 Ericsson \| Fourth quarter and full-year report 2022 Alternative performance measures