Q1 Highlights:
* Year-on-year volume growth of 2%
* Income before taxes at higher end of forecast
* R&D investment continues to expand portfolio and addressable
market
* New sub-brand XPERIA(TM) added to portfolio
The consolidated financial summary for Sony Ericsson Mobile
Communications AB (Sony Ericsson) for the first quarter ended March
31, 2008 is as follows:
Q1 2007 Q4 2007 Q1 2008
Number of units shipped (million) 21.8 30.8 22.3
Sales (Euro m.) 2,925 3,771 2,702
Gross margin (%) 30.3% 31.8% 29.2%
Operating income (Euro m.) 346 489 181
Operating income (%) 11.8% 13.0% 6.7%
Income before taxes (Euro m.) 362 501 193
Net income (Euro m.) 254 373 133
Average sales price (Euro) 134 123 121
Units shipped in the quarter were 22.3 million, a 2% increase
compared to the same period last year and in line with our March 19,
2008 interim announcement of 22 million units. Sales for the quarter
were Euro 2,702 million, a decrease of 8% on a year ago due to
slowing market growth in mid-to-high end phones in markets where Sony
Ericsson has a strong presence. Gross margin was one percentage point
lower than Q1 2007, reflecting a less favourable product mix. Income
before taxes for the quarter was Euro 193 million, which was at the
higher end of the range (Euro 150-200 million) we announced on March
19, 2008. This represented a decrease of 47% compared with a year
ago, due to higher R&D investments as a percentage of sales, and
reflecting that Q1 2007 was a particularly strong first quarter for
the company. Net income for the quarter was 48% lower, at Euro 133
million.
"Sony Ericsson continues to invest in expanding its product portfolio
to appeal to a wider variety of consumers in both new and existing
markets," said Dick Komiyama, President, Sony Ericsson. "Our product
announcements during the first quarter have been well received by the
industry, and we expect to see a positive effect from these
announcements during the second half of 2008."
During the quarter, Sony Ericsson added a new sub-brand to its
product portfolio with the announcement of the XPERIA(TM) X1, a
high-end multi-media convergence phone based on Windows Mobile®,
which will launch in the second half of the year. In addition, the
company announced a number of new phones during the quarter to
increase the appeal of its brand to a broader audience. These
included new high-end Walkman® and HSDPA web phones, such as the
W980, W760, Z770 models and also added to its cutting-edge
Cyber-shot(TM) range with models such as the C702 and C902.
Average selling price (ASP) decreased both sequentially and
year-on-year due to the impact of softer sales of high-to-mid end
models in key markets. Market share for the quarter is estimated to
be around 8%, down one percentage point sequentially.
Sony Ericsson made a dividend payment of Euro 470 million during the
quarter to the parent companies. A second dividend payment will be
made this year.
Sony Ericsson forecasts that the global handset market for 2008 will
grow at a rate of around 10% from more than 1.1 billion units in
2007. The majority of this growth is expected to be in emerging
markets.
XPERIA(TM) is a trademark of Sony Ericsson Mobile Communications
WALKMAN® and Cyber-shot(TM) are trademarks or registered trademarks
of Sony Corporation.
Microsoft and Windows Mobile® are trademarks of Microsoft Corporation
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 -
Having sold over 100 million phones in 2007, Sony Ericsson is
currently one of the five largest mobile phone manufacturers in the
world. An important industry player operating in over 80 countries,
our phones, accessories and PC cards are synonymous with innovation
and style. With R&D sites in Europe, Japan, China, India and North
America, diversity is one of the core strengths of the company. 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 8 719 0858
Sony investor
relations
Shinji Tomita (London) +44 20 7444 9713
Tatsuyuki Sonoda (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.
The full report (including tables) can be downloaded from the
following link:
