Sony Ericsson continues profitable growth and market share gains
Q2 Highlights:
* Continued strong year-on-year volume growth of 59%
* Income before tax grew 55% year-on-year to €327 million
* Walkman® phone sales of 9 million in quarter sustain leadership
in music phones
* Expanded portfolio continues to generate market share gains
The consolidated financial summary for Sony Ericsson Mobile
Communications AB (Sony Ericsson) for the second quarter ended June
30, 2007 is as follows:
Q2 2006 Q1 2007 Q2 2007
Number of units shipped (million 15.7 21.8 24.9
Sales (Euro m.) 2,272 2,925 3,112
Gross Margin (%) 28.5% 30.3 29.6%
Operating Income (Euro m.) 203 346 315
Operating Income (%) 8.9% 11.8 10.1%
Income before taxes (Euro m.) 211 362 327
Net income (Euro m.) 143 254 220
Average Sales Price (Euro) 145 134 125
Units shipped in the quarter reached 24.9 million, a 59% increase
compared to the same period last year, generating both year-on-year
and sequential market share gains. Sales for the quarter were Euro
3,112 million, representing a year-on-year increase of 37%. Income
before taxes for the quarter was Euro 327 million, representing a
year-on-year increase of 55%. Net income for the quarter was Euro 220
million. In line with Sony Ericsson expectations, the increase in Q2
in low and mid-tier priced phones in the product portfolio resulted
in a decline in ASP to Euro 125."Sony Ericsson has continued to capture market share in a more
competitive market place with a product offering that addresses a
wider consumer audience than ever before. Our financial results for
Q2 2007 reflect our direction to build our brand in key imaging,
music and multimedia categories with a portfolio that includes more
competitively priced phones," said Miles Flint, President of Sony
Ericsson. "We expect the market in 2007 to remain competitive, but
with recently announced products such as the flag-ship Walkman® and
Cyber-shot(TM) models we aim to continue to grow faster than the
market."
During the quarter Sony Ericsson continued to capture market share in
Latin America, Western Europe and CEEMEA (Central and Eastern Europe,
Middle East, Africa) due to low and mid-tier feature phones such as
the W300 and W200 Walkman® phones and the K310 and Z310 phones. At
the same time, the company continued to strengthen its product line
up by announcing a large number of new products across a variety of
price points, including the K850, an HSDPA, 5 mega-pixel flag-ship
Cyber-shot(TM) phone, and the W960, a high-end Walkman® phone with
8GB of on-board storage.
Following an announcement in January that Sony Ericsson would start
the local manufacture of phones in India through its global
manufacturing partners Flextronics and Foxconn, in Q2 the company
extended its commitment to this important and rapidly growing market
by announcing plans to establish its own research and development
unit in Chennai later in the year.
In Q2 new trademark royalty fees were agreed with the parent
companies, and these additional expenses were recorded for the first
time in the second quarter.
Sony Ericsson forecasts that the 2007 global handset market will be
above 1.1 billion units. The company grew market share in Q2 2007
around 3 percentage points to well over 9% compared with the same
period last year.
WALKMAN® and Cyber-shot(TM) are trademarks or registered trademarks
of Sony Corporation.
EDITOR'S NOTES:
Financial Statements and Additional Information:
Financial Statements:
Consolidated Income Statement
Consolidated Income Statement - Year-to-Date
Consolidated Income Statement - Isolated Quarters
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows - Year-to-Date
Consolidated Statement of Cash Flows - Isolated Quarters
Additional Information:
Net Sales by Market Area by Quarter
- ENDS -
Sony Ericsson Mobile Communications serves the global communications
market with innovative and feature-rich mobile phones, accessories
and PC-cards. Established as a joint venture by Sony and Ericsson in
2001, with global corporate functions located in London, including
R&D sites in Europe, Japan, China and America, Sony Ericsson
celebrated the 5th anniversary of the start of the joint venture on
1st October, 2006. Sony Ericsson is the global title sponsor of the
Women's Tennis Association, and works with the Association to promote
the Sony Ericsson WTA Tour in over 80 cities during the year. For
more information on Sony Ericsson, please visit
www.sonyericsson.com
CONTACTS:
Investors/Analysts
Ericsson Investor Relations
Sony Investor Relations
Gary Pinkham (Stockholm) +46 8 719 0858 Tatsuyuki
Sonoda (Tokyo) +81 3 6748 2180
Shinji
Tomita (London) +44 207 444 9713
Press/Media
Sony Ericsson Corporate Communications
Aldo Liguori (London) +44 208 762 5860
Merran Wrigley (London) +44 208 762 5862
This press release contains forward-looking statements that involve
inherent risks and uncertainties. We have identified certain
important factors that may cause actual results to differ materially
from those contained in such forward-looking statements. For a
detailed description of risk factors see Sony's and Ericsson's
filings with the US Securities and Exchange Commission, particularly
each company's latest published Annual Report on Form 20-F.
The full report (including tables) can be downloaded from the
following link:
