Q2 highlights:
* Continued challenging market conditions
* Transformation program on track
* New Communication Entertainment portfolio announced - shipping Q4
2009
The consolidated financial summary for Sony Ericsson Mobile
Communications AB (Sony Ericsson) for the second quarter ended June
30, 2009 is as follows:
Q2 2008 Q1 2009 Q2 2009
Number of units shipped (million) 24.4 14.5 13.8
Sales (Euro m.) 2,820 1,736 1,684
Gross margin (%) 23% 8% 12%
Operating income (Euro m.) -2 -369 -274
Operating margin (%) -0% -21% -16%
Restructuring charges (Euro m.) 11 12 1
Operating income excl. restructuring 8 -357 -274
charges (Euro m.)
Operating margin excl. restructuring 0% -21% -16%
charges (%)
Income before taxes (IBT) (Euro m.) 8 -370 -283
IBT excl. restructuring charges 19 -358 -283
(Euro m.)
Net income (Euro m.) 6 -293 -213
Average selling price (Euro) 116 120 122
Units shipped in the quarter were 13.8 million, a decrease of 43%
year-on-year and a sequential decrease of 5%. Sales for the quarter
were Euro 1,684 million, a year-on-year decrease of 40%. This was due
to continued challenging market conditions in all regions,
particularly in Latin American markets.
Gross margin improved sequentially, despite lower volumes and sales,
driven by a more favourable product mix and less material write-off
costs than the previous quarter.
Income before taxes for the quarter, excluding restructuring charges,
was a loss of Euro 283 million compared to a loss of Euro 370 million
from the previous quarter. This was due to the better gross margin,
as well as reduced operating expenses that are a result of the
ongoing cost savings program.
"As expected, the second quarter was challenging and we still
believe the remainder of the year will be difficult for Sony
Ericsson. Our focus remains on bringing the company back to
profitability and growth as quickly as possible, and our performance
is starting to improve due to our cost reduction activities. The new
product portfolio that integrates communications, entertainment and
social media applications should contribute to healthier topline
development when shipments start later this year," said Dick
Komiyama, President, Sony Ericsson. "We remain confident that the
actions we are taking will further improve our financial situation
and strengthen Sony Ericsson's competitiveness."
As of June 30, 2009, Sony Ericsson retained a good net cash position
of Euro 965 million.
Programs started mid 2008 to reduce operating expenses by Euro 880
million are on track, with the full benefit expected during the
second half of 2010. The total restructuring charges for these
programs are estimated to be well within the previously announced
Euro 500 million. Since the beginning of the cost reduction programs,
the total global workforce has been reduced by 2,350 people.
During the quarter Sony Ericsson expanded on its strategy of
transforming into the Communication Entertainment brand with the
announcement of three new mobile phones; Aino, Satio and Yari. These
phones integrate communications features with entertainment content
and social media applications. In addition, Sony Ericsson announced
the expansion of its content delivery platform, PlayNow(TM) arena, to
include an application store and downloadable movies via PC.
Sony Ericsson maintains its forecast that the global handset market
for 2009 will continue to contract by at least 10% from around 1,190
million units in 2008. Sony Ericsson estimates that its market share
was over 5% in the second quarter.
The liquid identity and PlayNow are trademarks or registered
trademarks of Sony Ericsson Mobile Communications.
Sony is a trademark or registered trademark of Sony Corporation.
Ericsson is the trademark or registered trademark of
Telefonaktiebolaget LM Ericsson.
Other product and company names mentioned herein may be the
trademarks of their respective owners. Any rights not expressly
granted herein are reserved. Subject to change without prior notice.
- ENDS -
A live webcast of the conference call will be available on July 16,
2009 at:
10:00 Central European Time (CET)
17:00 Japan Time (JST)
09:00 UK Time (BST)
04:00 US Eastern Time (EDT)
See: http://www.ericsson.com/ericsson/investors/ or join the webcast
directly at:
http://www.thomson-webcast.net/uk/dispatching/
event_id=bffe1ab2b7e317a500a16a93ee0841c2&
portal_id=ccec29148a44ec4b8077c845c5b4cbba
The archived webcast will be available approximately one hour after
the completion of the conference call.
CALL-IN NUMBERS:
Japan +81 3 3570 8228
Sweden +46 8 5352 6407
UK and Europe +44 20 7806 1955
US +1 718 354 1389
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 July 22, 2009.
Japan +81 3 3570 8212
Sweden +46 8 5876 9441
UK and Europe +44 20 7806 1970
US +1 718 354 1112
Replay passcode: 6976647#
EDITOR'S NOTES:
Financial statements and additional information:
Financial statements:
Consolidated income statement
Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters
Additional information:
Net sales by market area by quarter
- ENDS -
Sony Ericsson is a top, global industry player with sales of around
97 million phones in 2008. Diversity is one of the core strengths
of the company, with operations in over 80 countries including
manufacturing in China and R&D sites in China, Europe, India, Japan
and North America. Sony Ericsson was established as a 50:50 joint
venture by Sony and Ericsson in October 2001, with global corporate
functions located in London. For more information about Sony
Ericsson please visit www.sonyericsson.com
CONTACTS:
Investors / Analysts
Ericsson investor relations
Gary Pinkham (Stockholm) +46 10 719 0858
Susanne Andersson (Stockholm) +46 10 719 4631
Andreas Hedemyr (Stockholm) +46 10 404 3748
Sony investor
relations
Shinji Tomita (London) +44 20 7426 8696
Gen Tsuchikawa (Tokyo) +81 3 6748 2180
Press / Media
Sony Ericsson global communications and PR
Aldo Liguori (London) +44 20 8762 5860
Merran Wrigley (London) +44 20 8762 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.
Sony Ericsson
CONSOLIDATED INCOME STATEMENT
Apr-Jun
EUR million 2009 2008 Change
Net sales 1,684 2,820 -40%
Cost of sales -1,483 -2,168 -32%
Gross profit 200 653 -69%
Gross margin % 11.9% 23.1% -11%
Research and development expenses -245 -344 -29%
Selling and administrative expenses -235 -310 -24%
Operating expenses -480 -653 -26%
Other operating income, net 6 -2 491%
Operating income -274 -2 -
Operating margin % -16.3% -0.1% -16%
Financial income 6 25 -76%
Financial expenses -15 -14 4%
Income after financial items -283 8 -
Taxes 74 0 -
Minority interest -4 -3 49%
Net income -213 6 -
Number of units shipped (million) 13.8 24.4 -43%
ASP (EUR) 122 116 5%
EUR Million Apr-Jun Apr-Jun
Restructuring charges 2009 2008
Cost of sales -9 8
Research and development expenses 9 2
Sales and administrative expenses 1 1
Other operating income, net 0 0
Total 1 11
Sony Ericsson
CONSOLIDATED INCOME STATEMENT
Jan-Jun
EUR million 2009 2008 Change
Net sales 3,419 5,522 -38%
Cost of sales -3,074 -4,082 -25%
Gross profit 346 1,440 -76%
Gross margin % 10.1% 26.1% -16%
Research and development expenses -548 -683 -20%
Selling and administrative expenses -460 -580 -21%
Operating expenses -1,008 -1,263 -20%
Other operating income, net 19 5 310%
Operating income -644 182 -454%
Operating margin % -18.8% 3.3% -22%
Financial income 15 49 -69%
Financial expenses -25 -29 -16%
Income after financial items -653 201 -424%
Taxes 158 -57 -379%
Minority interest -10 -6 71%
Net income -505 139 -464%
Number of units shipped (million) 28.3 46.7 -39%
ASP (EUR) 121 118 2%
EUR Million Jan-Jun Jan-Jun
Restructuring charges 2009 2008
Cost of sales -2 8
Research and development expenses 11 2
Sales and administrative expenses 4 1
Other operating income, net 0 0
Total 13 11
Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS
2009 2008
EUR million Q2 Q1 Q4 Q3 Q2 Q1
Net sales 1,684 1,736 2,914 2,808 2,820 2,702
Cost of sales -1,483 -1,591 -2,476 -2,192 -2,168 -1,914
Gross profit 200 145 438 616 653 788
Gross margin % 11.9% 8.4% 15.0% 21.9% 23.1% 29.2%
Research and development
expenses -245 -303 -359 -337 -344 -339
Selling and
administrative expenses -235 -225 -366 -303 -310 -270
Operating expenses -480 -528 -725 -640 -653 -610
Other operating income,
net 6 13 24 -8 -2 6
Operating income -274 -369 -262 -33 -2 184
Operating margin % -16.3% -21.3% -9.0% -1.2% -0.1% 6.8%
Financial income 6 9 28 25 25 24
Financial expenses -15 -10 -27 -15 -14 -15
Income after financial
items -283 -370 -261 -23 8 193
Taxes 74 84 81 6 0 -57
Minority interest -4 -6 -7 -8 -3 -3
Net income -213 -293 -187 -25 6 133
Number of units shipped
(million) 13.8 14.5 24.2 25.7 24.4 22.3
ASP (EUR) 122 120 121 109 116 121
EUR Million 2009 2008
Restructuring charges Q2 Q1 Q4 Q3 Q2
Cost of sales -9 7 67 0 8
Research and
development expenses 9 2 35 26 2
Sales and
administrative expenses 1 3 24 3 1
Other operating income,
net 0 0 3 6 0
Total 1 12 129 35 11
Sony Ericsson
CONSOLIDATED BALANCE SHEET
Jun 30 Mar 31 Dec 31 Jun 30
EUR million 2009 2009 2008 2008
ASSETS
Total fixed and financial assets 736 658 590 590
Current assets
Inventories 404 477 531 538
Accounts receivables 936 1,193 1,629 1,905
Other assets 379 463 585 511
Other short-term cash investments 456 574 707 966
Cash and bank 509 542 418 624
Total current assets 2,685 3,249 3,870 4,544
Total assets 3,421 3,908 4,460 5,134
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity 694 930 1,217 1,684
Minority interest 66 65 57 35
Total equity 760 995 1,274 1,719
Total long-term liabilities 30 30 30 25
Accounts payable 848 965 990 1,436
Other current liabilities 1,782 1,918 2,166 1,954
Total current liabilities 2,630 2,882 3,156 3,390
Total shareholders' equity and
liabilities 3,421 3,908 4,460 5,134
Net cash* 965 1,116 1,072 1,591
* Net cash is defined as cash and bank plus short-term cash
investments less interest bearing liabilities.
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Apr-Jun
EUR million 2009 2008
OPERATIONS
Net income -213 6
Adjustments to reconcile net income to cash 37 40
-176 46
Changes in operating net assets 60 -142
Cash flow from operating activities -115 -96
INVESTMENTS
Investing activities -13 -29
Cash flow from investing activities -13 -29
FINANCING
Financing activities 0 - 8
Cash flow from financing activities 0 -8
Net change in cash -128 -133
Cash, beginning of period 1,116 1,711
Translation difference in Cash -23 13
Cash, end of period 965 1,591
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Jan-Jun
EUR million 2009 2008
OPERATIONS
Net income -505 139
Adjustments to reconcile net income to cash 66 69
-439 208
Changes in operating net assets 382 -242
Cash flow from operating activities -57 -34
INVESTMENTS
Investing activities -32 -50
Cash flow from investing activities -32 -50
FINANCING
Financing activities - 53 -470
Cash flow from financing activities -53 -470
Net change in cash -142 -554
Cash, beginning of period 1,125 2,155
Translation difference in Cash -18 -11
Cash, end of period 965 1,591
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS
2009 2008
EUR million Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar
OPERATIONS
Net income -213 -293 -187 -25 6 133
Adjustments to
reconcile net income
to cash 37 29 37 39 40 31
-176 -263 -150 15 46 164
Changes in operating
net assets 60 321 -168 88 -142 -101
Cash flow from
operating activities -115 58 -318 102 -96 64
INVESTMENTS
Investing activities -13 -19 41 -55 -29 -22
Cash flow from
investing activities -13 -19 41 -55 -29 -22
FINANCING
Financing activities 0 - 53 - 46 - 238 - 8 - 462
Cash flow from
financing activities 0 -53 -46 -238 -8 -462
Net change in cash -128 -14 -323 -191 -133 -421
Cash, beginning of
period 1,116 1,125 1,473 1,591 1,711 2,155
Translation
difference in Cash -23 5 -25 74 13 -24
Cash, end of period 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 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle East & Africa
* 927 977 1,642 1,427 1,386 1,494
Americas 195 200 636 703 740 486
Asia 562 559 636 678 694 722
Total 1,684 1,736 2,914 2,808 2,820 2,702
* of which Western Europe 678 721 1,117 947 900 979
2009 2008
Sequential change (%) Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle East & Africa
* -5% -40% 15% 3% -7% -34%
Americas -3% -69% -10% -5% 52% -24%
Asia 1% -12% -6% -2% -4% -18%
Total -3% -40% 4% 0% 4% -28%
* of which Western Europe -6% -35% 18% 5% -8% -38%
2009 2008
Year over year change (%) Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle East & Africa
* -33% -35% -27% -17% -20% -7%
Americas -74% -59% 0% 23% 48% 33%
Asia -19% -23% -28% -17% -21% -25%
Total -40% -36% -23% -10% -9% -8%
* of which Western Europe -25% -26% -29% -14% -18% -9%
2009 2008
Year to date 0906 0903 0812 0809 0806 0803
Europe, Middle East & Africa
* 1,903 977 5,947 4,306 2,879 1,494
Americas 395 200 2,566 1,930 1,226 486
Asia 1,121 559 2,731 2,094 1,416 722
Total 3,419 1,736 11,244 8,330 5,522 2,702
* of which Western Europe 1,400 721 3,943 2,826 1,879 979
2009 2008
YTD year over year change
(%) 0906 0903 0812 0809 0806 0803
Europe, Middle East & Africa
* -34% -35% -18% -15% -13% -7%
Americas -68% -59% 24% 34% 42% 33%
Asia -21% -23% -23% -21% -23% -25%
Total -38% -36% -13% -9% -9% -8%
* of which Western Europe -26% -26% -19% -14% -14% -9%
The full report (including tables) can be downloaded from the
following link:
