Q4 Highlights:
* Improved quarterly financial results reflected success of refreshed
portfolio
* Transformation programme bearing fruit and to continue
* Announced first Android-based phone, the XPERIA(TM) X10
The consolidated financial summary for Sony Ericsson Mobile Communications AB
(Sony Ericsson) for the fourth quarter and full year ended December 31, 2009 is
as follows:
Q4 2009 Q3 2009 Q4 2008 FY 2009 FY 2008
Number of units shipped (million) 14.6 14.1 24.2 57.1 96.6
Sales (Euro m.) 1,750 1,619 2,914 6,788 11,244
Gross margin (%) 23% 16% 15% 15% 22%
Operating income (Euro m.) -181 -193 -262 -1,018 -113
Operating margin (%) -10% -12% -9% -15% -1%
Restructuring charges (Euro m.) 150 2 129 164 175
Operating income excl. restructuring
charges (Euro m.) -32 -191 -133 -854 61
Operating margin excl. restructuring
charges (%) -2% -12% -5% -13% 1%
Income before taxes (IBT) (Euro m.) -190 -199 -261 -1,043 -83
IBT excl. restructuring charges
(Euro m.) -40 -198 -133 -878 92
Net income (Euro m.) -167 -164 -187 -836 -73
Average selling price (Euro) 120 114 121 119 116
Bert Nordberg, President, Sony Ericsson comments; "The refreshed portfolio,
coupled with the business transformation programme has started to positively
impact our financial results. Continued cost saving activities and resource
realignment are necessary in order to build a leaner, more efficient
organisation capable of meeting the demands of the changing competitive
landscape. We will continue to focus on returning the company to profitability
by establishing Sony Ericsson as the communication entertainment brand based on
an exciting portfolio of mid- and high-end products, such as our recently
announced Android-based phone, the XPERIA(TM) X10. 2010 will still be
challenging as the full benefit of cost improvements will not impact results
until the second half of the year, however we are confident that our business is
on the right track."
Units shipped in the quarter were 14.6 million, a sequential increase of 3% and
a year-on-year decrease of 40%. Sales for the quarter were Euro 1,750 million, a
sequential increase of 8% and a year-on-year decrease of 40%. The sequential
increase was driven by market seasonality and successful sales of Satio(TM) and
Aino(TM) phones. The year-on-year decrease in both units and sales was mainly
due to a downturn in the global handset market and a faster than anticipated
shift to touch screen phones in the mid-priced sector of the market. Average
Selling Price (ASP) for the quarter rose sequentially by 5% to Euro 120 due to a
more favourable product mix.
Gross margin percentage improved sequentially and year-on-year mainly driven by
the successful sales of new, higher-margin phones as well as the positive impact
of cost reduction activities.
Income before taxes for the quarter, excluding restructuring charges, was a loss
of Euro 40 million compared to a loss of Euro 198 million in the previous
quarter. The reduced loss was due to the improved gross margin and the benefits
of reduced operating expenses. Excluding restructuring charges, Sony Ericsson
made a loss for the full year 2009 of Euro 878 million compared with an income
of Euro 92 million in 2008. The year-on-year deterioration was mainly
attributable to the lower sales.
As of December 31, 2009, Sony Ericsson had a net cash position of Euro 620
million.
During 2009, Sony Ericsson secured external funding of Euro 455 million to
strengthen the balance sheet and improve liquidity, out of which Euro 350
million has been guaranteed by the parent companies on a 50/50 basis. Euro 255
million was drawn by the end of 2009, but the remaining Euro 200 million, a
two-year committed back-up facility, has not been utilised.
The programme started in mid-2008 to reduce annual operating expenses by Euro
880 million is continuing; with the full benefit expected during the second half
of 2010. Since the start of the programme Sony Ericsson has reduced its global
workforce by approximately 2,500 people to 9,100 by the end of 2009. The total
restructuring charges taken to date are Euro 339 million, and charges for the
full programme are estimated to be well within the previously announced Euro
500 million.
Sony Ericsson estimates that the global handset market in units for the fourth
quarter 2009 was flat year-on-year and that its market share was about 5% in the
fourth quarter. Sony Ericsson believes that the global handset market for the
full year 2009 decreased in volume by around 8% year-on-year to around 1.1
billion units and that its market share in units for the full year 2009 was
about 5%.
Sony Ericsson forecasts a slight growth in units in the global handset market in
2010.
-END -
The liquid identity is a registered trademark of Sony Ericsson Mobile
Communications AB.
Aino(TM), Satio(TM) and XPERIA(TM) are trademarks or registered trademarks of
Sony Ericsson Mobile Communications AB.
Sony is a registered trademark of Sony Corporation. Ericsson is a registered
trademark of Telefonaktiebolaget LM Ericsson.
Any rights not expressly granted herein are reserved. Subject to change without
prior notice.
EDITOR'S NOTES:
Financial statements:
Consolidated income statement
Consolidated income statement full year
Consolidated income statement isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows full year
Consolidated statement of cash flows isolated quarters
Additional information:
Net sales by market area, by quarter
Sony Ericsson is a 50:50 joint venture by Sony and Ericsson established in
October 2001, with global corporate functions located in London and operations
in all major markets. Our vision is to become the industry leader in
Communication Entertainment; where new styles of communicating through the
internet and social media, become entertainment. Sony Ericsson offers exciting
consumer experiences through phones, accessories, content and applications. For
more information please visit,www.sonyericsson.com
<http://www.sonyericsson.com/>.
CONTACTS:
Investors / analysts
Ericsson investor relations
Susanne Andersson (Stockholm) +46 10 719 4631
Lars Jacobsson (Stockholm) +46 10 719 9489
Sony investor relations
Gen Tsuchikawa (Tokyo) +81 3 6748 2180
Shinji Tomita (London) +44 20 7426 8696
Press / media
Sony Ericsson global communications and PR
Aldo Liguori (London) +44 20 8762 5860
Merran Wrigley (London) +44 20 8762 5862
A live webcast of the conference call discussing the company's results for the
fourth quarter and full year ended December 31, 2009 will be available on
January 22, 2010 at the following times:
TIMING:
15:30 UK time (GMT)
16:30 Central European time (CET)
10:30 US Eastern time (EST)
00:30 Japan time (JST) January 23, 2010
WEBCAST:
A live webcast of the conference call will be available
at:www.ericsson.com/ericsson/investors
<http://www.ericsson.com/ericsson/investors>
Or please click here to join the webcast
directly:www.thomson-webcast.net/uk/dispatching/?event_id=55bbf43ecfabff7e6e9119
83a216b4b0&portal_id=ccec29148a44ec4b8077c845c5b4cbba
<http://www.thomson-webcast.net/uk/dispatching/?event_id=55bbf43ecfabff7e6e91198
3a216b4b0&portal_id=ccec29148a44ec4b8077c845c5b4cbba>
The archived webcast will be available approximately one hour after the
completion of the conference call.
CALL-IN NUMBERS:
UK and Europe +44 20 7806 1956
Sweden +46 8 5352 6407
US: +1 718 354 1389
Japan: +81 3 3570 8228
REPLAY:
A replay of the conference call will be available approximately two hours after
the completion of the conference call until 11:00 pm UK time on 28 January,
2010.
UK and Europe: +44 20 7111 1244
Sweden: +46 8 5051 3897
US: +1 347 366 9565
Japan: +81 3 5767 9615
Replay pass code: 8140934#
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.
Sony Ericsson
CONSOLIDATED INCOME STATEMENT
Oct-Dec
EUR million 2009 2008 Change
Net sales 1,750 2,914 -40%
Cost of sales -1,341 -2,476 -46%
Gross profit 409 438 -7%
Gross margin % 23.4% 15.0% 8%
Research and development expenses -299 -359 -17%
Selling and administrative expenses -299 -366 -18%
Operating expenses -599 -725 -17%
Other operating income, net 8 24 -66%
Operating income -181 -262 -31%
Operating margin % -10.4% -9.0% -1%
Financial income 4 28 -88%
Financial expenses -12 -27 -55%
Income after financial items -190 -261 -27%
Taxes 36 81 -56%
Minority interest -12 -7 75%
Net income -167 -187 -11%
Number of units shipped (million) 14.6 24.2 -40%
ASP (EUR) 120 121 -1%
EUR Million Oct-Dec
Restructuring charges 2009 2008
Cost of sales 41 67
Research and development expenses 72 35
Sales and administrative expenses 37 24
Other operating income, net 0 3
Total 150 129
Sony Ericsson
CONSOLIDATED INCOME STATEMENT
Jan-Dec
EUR million 2009 2008 Change
Net sales 6,788 11,244 -40%
Cost of sales -5,782 -8,750 -34%
Gross profit 1,006 2,494 -60%
Gross margin % 14.8% 22.2% -7%
Research and development expenses -1,108 -1,379 -20%
Selling and administrative expenses -964 -1,249 -23%
Operating expenses -2,072 -2,628 -21%
Other operating income, net 48 21 -
Operating income -1,018 -113 -
Operating margin % -15.0% -1.0% -14%
Financial income 21 101 -79%
Financial expenses -46 -71 -35%
Income after financial items -1,043 -83 -
Taxes 236 31 -
Minority interest -29 -21 35%
Net income -836 -73 -
Number of units shipped (million) 57.1 96.6 -41%
ASP (EUR) 119 116 2%
EUR Million Jan-Dec
Restructuring charges 2009 2008
Cost of sales 39 75
Research and development expenses 84 62
Sales and administrative expenses 41 29
Other operating income, net 0 9
Total 164 175
Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS
2009 2008
EUR million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net sales 1,750 1,619 1,684 1,736 2,914 2,808 2,820 2,702
Cost of sales -1,341 -1,367 -1,483 -1,591 -2,476 -2,192 -2,168 -1,914
Gross profit 409 252 200 145 438 616 653 788
Gross margin % 23.4% 15.5% 11.9% 8.4% 15.0% 21.9% 23.1% 29.2%
Research and
development
expenses -299 -260 -245 -303 -359 -337 -344 -339
Selling and
administrative
expenses -299 -205 -235 -225 -366 -303 -310 -270
Operating expenses -599 -465 -480 -528 -725 -640 -653 -610
Other operating
income, net 8 21 6 13 24 -8 -2 6
Operating income -181 -193 -274 -369 -262 -33 -2 184
Operating margin % -10.4% -11.9% -16.3% -21.3% -9.0% -1.2% -0.1% 6.8%
Financial income 4 3 6 9 28 25 25 24
Financial expenses -12 -9 -15 -10 -27 -15 -14 -15
Income after
financial items -190 -199 -283 -370 -261 -23 8 193
Taxes 36 42 74 84 81 6 0 -57
Minority interest -12 -6 -4 -6 -7 -8 -3 -3
Net income -167 -164 -213 -293 -187 -25 6 133
Number of units
shipped (million) 14.6 14.1 13.8 14.5 24.2 25.7 24.4 22.3
ASP (EUR) 120 114 122 120 121 109 116 121
EUR Million 2009 2008
Restructuring
charges Q4 Q3 Q2 Q1 Q4 Q3 Q2
Cost of sales 41 0 -9 7 67 0 8
Research and
development
expenses 72 1 9 2 35 26 2
Sales and
administrative
expenses 37 1 1 3 24 3 1
Other operating
income, net 0 0 0 0 3 6 0
Total 150 2 1 12 129 35 11
Sony Ericsson
CONSOLIDATED BALANCE SHEET
Dec 31 Sep 30 Jun 30 Dec 31
EUR million 2009 2009 2009 2008
ASSETS
Total fixed and financial assets 779 757 736 590
Current assets
Inventories 358 397 404 531
Accounts receivable 832 917 936 1,629
Other assets 415 416 379 585
Other short-term cash investments 489 464 456 707
Cash and bank 389 532 509 418
Total current assets 2,483 2,726 2,685 3,870
Total assets 3,262 3,482 3,421 4,460
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 381 532 694 1,217
Minority interest 47 43 66 57
Total equity 428 575 760 1,274
Borrowing, Non Current 0 50 0 0
Other long-term liabilities 32 31 30 30
Total long-term liabilities 32 81 30 30
Accounts payable 852 1,019 848 990
Borrowing, Current 258 105 0 53
Other current liabilities 1,692 1,702 1,782 2,113
Total current liabilities 2,802 2,826 2,630 3,156
Total shareholders' equity and liabilities 3,262 3,482 3,421 4,460
Net cash* 620 841 965 1,072
* Net cash is defined as cash and bank plus short-term cash investments less
interest-bearing liabilities.
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Oct-Dec
EUR million 2009 2008
OPERATIONS
Net income -167 -187
Adjustments to reconcile net income to cash 48 37
-119 -150
Changes in operating net assets -97 -168
Cash flow from operating activities -216 -318
INVESTMENTS
Investing activities -10 41
Cash flow from investing activities -10 41
FINANCING
Financing activities 100 - 46
Cash flow from financing activities 100 -46
Net change in cash -126 -323
Cash, beginning of period 996 1,473
Translation difference in Cash 8 -25
Cash, end of period 878 1,125
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Jan-Dec
EUR million 2009 2008
OPERATIONS
Net income -836 -73
Adjustments to reconcile net income to cash 135 146
-701 73
Changes in operating net assets 333 -323
Cash flow from operating activities -368 -250
INVESTMENTS
Investing activities -84 -64
Cash flow from investing activities -84 -64
FINANCING
Financing activities 205 -754
Cash flow from financing activities 205 -754
Net change in cash -247 -1,068
Cash, beginning of period 1,125 2,155
Translation difference in Cash -1 37
Cash, end of period 878 1,125
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS
2009 2008
EUR million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
OPERATIONS
Net income -167 -164 -213 -293 -187 -25 6 133
Adjustments to reconcile net
income to cash 48 20 37 29 37 39 40 31
-119 -143 -176 -263 -150 15 46 164
Changes in operating net
assets -97 49 60 321 -168 88 -142 -101
Cash flow from operating
activities -216 -94 -115 58 -318 102 -96 64
INVESTMENTS
Investing activities -10 -42 -13 -19 41 -55 -29 -22
Cash flow from investing
activities -10 -42 -13 -19 41 -55 -29 -22
FINANCING
Financing activities 100 159 0 - 53 - 46 - 238 - 8 - 462
Cash flow from financing
activities 100 159 0 -53 -46 -238 -8 -462
Net change in cash -126 22 -128 -14 -323 -191 -133 -421
Cash, beginning of period 996 965 1,116 1,125 1,473 1,591 1,711 2,155
Translation difference in Cash 8 9 -23 5 -25 74 13 -24
Cash, end of period 878 996 965 1,116 1,125 1,473 1,591 1,711
Sony Ericsson
NET SALES BY MARKET AREA BY QUARTER
EUR million
2009 2008
Isolated quarters Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle East &
Africa * 966 875 927 977 1,642 1,427 1,386 1,494
Americas 222 232 195 200 636 703 740 486
Asia 562 512 562 559 636 678 694 722
Total 1,750 1,619 1,684 1,736 2,914 2,808 2,820 2,702
* of which Western Europe 678 636 678 721 1,117 947 900 979
2009 2008
Sequential change (%) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle East &
Africa * 10% -6% -5% -40% 15% 3% -7% -34%
Americas -4% 19% -3% -69% -10% -5% 52% -24%
Asia 10% -9% 1% -12% -6% -2% -4% -18%
Total 8% -4% -3% -40% 4% 0% 4% -28%
* of which Western Europe 7% -6% -6% -35% 18% 5% -8% -38%
2009 2008
Year over year change (%) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle East &
Africa * -41% -39% -33% -35% -27% -17% -20% -7%
Americas -65% -67% -74% -59% 0% 23% 48% 33%
Asia -12% -25% -19% -23% -28% -17% -21% -25%
Total -40% -42% -40% -36% -23% -10% -9% -8%
* of which Western Europe -39% -33% -25% -26% -29% -14% -18% -9%
2009 2008
Year to date 0912 0909 0906 0903 0812 0809 0806 0803
Europe, Middle East &
Africa * 3,744 2,778 1,903 977 5,947 4,306 2,879 1,494
Americas 850 627 395 200 2,566 1,930 1,226 486
Asia 2,194 1,633 1,121 559 2,731 2,094 1,416 722
Total 6,788 5,038 3,419 1,736 11,244 8,330 5,522 2,702
* of which Western Europe 2,714 2,036 1,400 721 3,943 2,826 1,879 979
2009 2008
YTD year over year change
(%) 0912 0909 0906 0903 0812 0809 0806 0803
Europe, Middle East &
Africa * -37% -35% -34% -35% -18% -15% -13% -7%
Americas -67% -67% -68% -59% 24% 34% 42% 33%
Asia -20% -22% -21% -23% -23% -21% -23% -25%
Total -40% -40% -38% -36% -13% -9% -9% -8%
* of which Western Europe -31% -28% -26% -26% -19% -14% -14% -9%
The full report (including tables) can be downloaded from the following link:
[HUG#1375864]
