Comments from Börje Ekholm, President and CEO of Ericsson (NASDAQ:ERIC)
In 2023, we continued to execute on our strategy to strengthen our leadership in mobile networks, grow our enterprise business and drive cultural transformation. We concluded 2023 with a Q4 EBITA margin[2] of 11.4% and a historic 5-year USD 14 b. contract. Despite headwinds and a very weak mobile networks market, we were able to generate a full-year EBITA[2] of SEK 21.4 b. While the actions we have taken to improve performance are paying off, we are not satisfied with our profitability and there is more work to do. As we look to 2024, we expect the market outside China to further decline, with similar uncertainties as experienced in 2023. In this environment, we remain laser focused on managing elements within our control, including operational efficiency and tight cost management. We are confident in our strategy and are committed to driving long-term value for our shareholders.
Q4 – solid results in challenging environment
As a result of focused execution and increased resiliency, we were able to adapt in a challenging environment and delivered solid Q4 results. While Group sales[1] declined organically by -17% YoY, EBITA[2] reached SEK 8.2 b. with an EBITA margin[2] of 11.4%. With strong focus on profitability, we were able to deliver a 41.1% gross margin[2], a YoY increase when adjusting for the retroactive element of IPR revenues in Q4 2022. Our investments in geopolitical resiliency continued at a high level.
Networks sales[1] decreased organically by -23% YoY as customers continued to focus on cash flow. Sales in India declined QoQ as the market started its transition to normalized investment levels following an unprecedented roll-out pace. Q4 gross margin[2] grew QoQ to 43.2%.
In Cloud Software and Services, we delivered on our EBITA[2] target to reach at least breakeven in 2023 with an EBITA[2] of SEK 2.0 b. in Q4 and SEK 1.7 b. for the full year. We continue to increase commercial discipline, automation and delivery efficiency, focusing on long-term profitability.