Table:
| SEK billion | Full year 2019 | Full year 2018 |
| --- | --- | --- |
| Segment operating income | -12.5 | -5.4 |
| income of which Emerging Business, iconective, media businesses and common costs | -2.4 | -5.4 |
| of which SEC and DOJ<br>settlement costs | –10.7 | – |
| of which costs for<br>ST-Ericsson wind-down | –0.3 | – |
| of which a refund of social security costs in Sweden | 0.9 | - |
Paragraphs:
Operating income increased to SEK 2.3 (1.1) billion. Operating income excluding restructur- ing charges improved to SEK 2.4 (1.4) billion due to a positive effect from reversal of a provision for impairment of trade receivables made in Q1 2019, of SEK 0.7 billion, and higher gross margin.
Operating margin was 6.3%, excluding restructuring charges and the positive effect from reversal of a provision for impairment of trade receivables of SEK 0.7 billion in Q1 2019.
Restructuring charges amounted to SEK 0.0 (–0.3) billion.
Emerging Business and Other
Segment Emerging Business and Other represented 3% (4%) of Group net sales in 2019.
The segment includes:
–– Emerging Business, including IoT, iconectiv
and New businesses
–– Media businesses, including Red Bee
Media and a 49% ownership of MediaKind.
Net sales
Reported sales decreased by –19% in 2019 due to the 51% divestment of MediaKind in February 2019. Sales adjusted for comparable units and currency increased by 14% driven by growth in the iconectiv business through a multi-year number portability contract in the US.
Gross margin
Gross margin declined mainly due to the 51% divestment of MediaKind. The decline was partly offset by lower restructuring charges.
Operating income (loss)
Operating income was impacted by costs of SEK –10.7 billion related to the resolution of the US SEC and DOJ investigations, a refund of earlier paid social security costs in Sweden of SEK 0.9 billion and by costs of SEK –0.3
billion related to the wind-down of the ST-Ericsson legal structure.
Operating income in Emerging Business, iconectiv and common costs improved, driven by profitable growth in iconectiv. Red Bee Media income improved supported by profit improvement activities. Media Solutions income improved driven by the 51% divestment of Media Kind, including a capital gain from the transaction.
Question:
What is the reason that gross margin declined?
Answer: the 51% divestment of MediaKind