Q3 Highlights:
* Turnaround continues with third consecutive quarter of profits
* Continued success of smartphone portfolio keeps ASP at high level
* Launch of Xperia(TM) models in new markets, including China and the U.S.
The consolidated financial summary for Sony Ericsson Mobile Communications AB
(Sony Ericsson) for the third quarter ended September 30, 2010 is as follows:
Q3 2009 Q2 2010 Q3 2010
Number of units shipped (million) 14.1 11.0 10.4
Sales (Euro m.) 1,619 1,757 1,603
Gross margin (%) 16% 28% 30%
Operating income (Euro m.) -193 36 63
Operating margin (%) -12% 2% 4%
Restructuring charges (Euro m.) 2 32 4
Operating income excl. restructuring charges -191 68 67
(Euro m.)
Operating margin excl. restructuring charges -12% 4% 4%
(%)
Income before taxes (IBT) (Euro m.) -199 31 62
IBT excl. restructuring charges (Euro m.) -198 63 66
Net income (Euro m.) -164 12 49
Average selling price (Euro) 114 160 154
Bert Nordberg, President & CEO of Sony Ericsson commented, "Our third
consecutive quarter of profitable results illustrates that Sony Ericsson's
overall performance is stabilising. Our strategy to focus on the smartphone
segment is succeeding and smartphones now comprise more than 50% of our total
sales. During the quarter, we launched our Android-based Xperia(TM) models in
new markets, such as China and the U.S., and it is our ambition to become the
global number one handset provider on the Android platform."
Income before taxes for the quarter excluding restructuring charges was a profit
of Euro 66 million following the positive effects of the transformation
programme. Net income for the quarter was Euro 49 million, an increase of Euro
213 million year-on-year and of Euro 37 million sequentially.
The gross margin percentage was 30% and almost doubled year-on-year, reflective
of the company turnaround.
Units shipped in the quarter were 10.4 million, a decrease of 26% year-on-year
and down 5% sequentially. Average selling price (ASP) in the quarter remained at
a high level of Euro 154, a 34% increase year-on-year and a decrease of 4%
sequentially, due to product and geographical mix. As a result, sales for the
quarter were Euro 1,603 million, essentially flat year-on-year and a 9% decrease
sequentially.
Sony Ericsson's net cash position as of September 30, 2010 was Euro 538 million.
The negative cash flow from operating activities was Euro 54 million, mainly due
to payments during the quarter related to the transformation programme.
Market share in unit base for the quarter remained flat sequentially and is
estimated to be approximately 4%. The value market share is estimated to be
approximately 6%.
Sony Ericsson maintains a forecast of slight growth in units in the global
handset market in 2010.
The liquid identity is a registered trademark of Sony Ericsson Mobile
Communications AB. Xperia(TM) is a trademark 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 and subject to change without prior
notice.
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
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. Sony Ericsson's 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.
- ENDS -
CONTACTS:
Ericsson investor relations
Susanne Andersson (Stockholm) +46 10 719 4631
Andreas Hedemyr (Stockholm) +46 10 714 3748
Sony investor relations
Gen Tsuchikawa (Tokyo) +81 3 6748 2111
Yas Hasegawa (London) +44 20 7426 8696
Press / Media
Sony Ericsson global communications and PR
Aldo Liguori (London) +44 20 8762 5860
Gustaf Brusewitz (London) +44 7960 58 19 68
This press release contains forward-looking statements that involve inherent
risks and uncertainties. Sony Ericsson has 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
Jul-Sep Jan-Sep
---------------------- ---------------------
EUR million 2009 2010 Change 2009 2010 Change
--------------------------------------------------------- ---------------------
Net sales 1,619 1,603 -1% 5,038 4,765 -5%
Cost of sales -1,367 -1,130 -17% -4,441 -3,371 -24%
--------------- ---------------
Gross profit 252 473 88% 597 1,394 134%
Gross margin % 15.5% 29.5% 14% 11.9% 29.3% 17%
Research and development expenses -260 -191 -27% -808 -625 -23%
Selling and administrative expenses -205 -228 12% -665 -680 2%
--------------- ---------------
Operating expenses -465 -420 -10% -1,473 -1,305 -11%
Other operating income, net 21 10 -51% 39 31 -20%
--------------- ---------------
Operating income -193 63 -837 120
Operating margin % -11.9% 4.0% -16.6% 2.5%
Financial income 3 7 124% 18 16 -12%
Financial expenses -9 -8 -15% -34 -24 -29%
--------------- ---------------
Income after financial items -199 62 -853 112
Taxes 42 -12 200 -21
Minority interest -6 -2 -75% -16 -8 -48%
--------------- ---------------
Net income -164 49 -669 82
Number of units shipped (million) 14.1 10.4 -26% 42.5 31.9 -25%
ASP (EUR) 114 154 34% 119 150 26%
EUR million Jul-Sep Jan-Sep
-------------------------------------------------- ---------------
Restructuring charges 2009 2010 2009 2010
-------------------------------------------------- ---------------
Cost of sales 0 3 -2 34
Research and development expenses 1 -10 12 -6
Sales and administrative expenses 1 11 4 12
-------------------------------------------------- ---------------
Total 2 4 15 39
Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS
2009 2010
----------------------------- --------------------
EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3
----------------------------------------------------------- --------------------
Net sales 1,736 1,684 1,619 1,750 1,405 1,757 1,603
Cost of sales -1,591 -1,483 -1,367 -1,341 -975 -1,266 -1,130
----------------------------- --------------------
Gross profit 145 200 252 409 429 492 473
Gross margin % 8.4% 11.9% 15.5% 23.4% 30.6% 28.0% 29.5%
Research and development
expenses -303 -245 -260 -299 -216 -218 -191
Selling and administrative
expenses -225 -235 -205 -299 -207 -245 -228
----------------------------- --------------------
Operating expenses -528 -480 -465 -599 -423 -463 -420
Other operating income, net 13 6 21 8 14 7 10
----------------------------- --------------------
Operating income -369 -274 -193 -181 20 36 63
Operating margin % -21.3% -16.3% -11.9% -10.4% 1.4% 2.1% 4.0%
Financial income 9 6 3 4 7 2 7
Financial expenses -10 -15 -9 -12 -9 -7 -8
----------------------------- --------------------
Income after financial items -370 -283 -199 -190 18 31 62
Taxes 84 74 42 36 6 -16 -12
Minority interest -6 -4 -6 -12 -3 -4 -2
----------------------------- --------------------
Net income -293 -213 -164 -167 21 12 49
Number of units shipped
(million) 14.5 13.8 14.1 14.6 10.5 11.0 10.4
ASP (EUR) 120 122 114 120 134 160 154
EUR million 2009 2010
----------------------------------------------------------- --------------------
Restructuring charges Q1 Q2 Q3 Q4 Q1 Q2 Q3
----------------------------------------------------------- --------------------
Cost of sales 7 -9 0 41 -2 33 3
Research and development
expenses 2 9 1 72 2 1 -10
Sales and administrative
expenses 3 1 1 37 3 -2 11
----------------------------------------------------------- --------------------
Total 12 1 2 150 3 32 4
Sony Ericsson
CONSOLIDATED BALANCE SHEET
Sep 30 Dec 31 Jun 30 Sep 30
EUR million 2009 2009 2010 2010
------------------------------------------------------------------------------
ASSETS
Total fixed and financial assets 757 779 836 813
Current assets
Inventories 397 358 467 457
Accounts receivable 917 832 1,063 986
Other assets 416 415 412 328
Other short-term cash investments 464 489 477 440
Cash and bank 532 389 562 482
-------- -------- -------- -------
Total current assets 2,726 2,483 2,981 2,692
------------------------------------------------------------------------------
Total assets 3,482 3,262 3,817 3,505
------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 532 381 510 480
Minority interest 43 47 66 62
-------- -------- -------- -------
Total equity 575 428 575 541
Borrowing, Non Current 50 0 101 100
Other long-term liabilities 31 32 40 30
-------- -------- -------- -------
Total long-term liabilities 81 32 141 130
Accounts payable 1,019 852 973 922
Borrowing, Current 105 258 329 284
Other current liabilities 1,702 1,692 1,798 1,628
-------- -------- -------- -------
Total current liabilities 2,826 2,802 3,101 2,834
------------------------------------------------------------------------------
Total shareholders' equity and liabilities 3,482 3,262 3,817 3,505
------------------------------------------------------------------------------
Net cash* 841 620 609 538
* Net cash is defined as cash and bank plus short-term cash investments less
interest-bearing liabilities.
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Jul-Sep Jan-Sep
------------ -----------
EUR million 2009 2010 2009 2010
------------------------------------------------------- -----------
OPERATING
Net income -164 49 -669 82
Adjustments to reconcile net income to cash 20 -66 87 -105
------------ -----------
-143 -17 -583 -23
Changes in operating net assets 49 -38 431 -96
------------ -----------
Cash flow from operating activities -94 -54 -152 -119
INVESTING
Investing activities -42 2 -74 14
------------ -----------
Cash flow from investing activities -42 2 -74 14
FINANCING
Financing activities 159 - 32 106 118
------------ -----------
Cash flow from financing activities 159 -32 106 118
Net change in cash 22 -85 -120 12
Cash, beginning of period 965 1,039 1,125 878
Translation difference in Cash 9 -33 -9 31
------------ -----------
Cash, end of period 996 921 996 921
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS
2009 2010
----------------------- -----------------
EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3
-------------------------------------------------------------- -----------------
OPERATING
Net income -293 -213 -164 -167 21 12 49
Adjustments to reconcile net income to
cash 29 37 20 48 -44 4 -66
----------------------- -----------------
-263 -176 -143 -119 -23 16 -17
Changes in operating net assets 321 60 49 -97 -72 13 -38
----------------------- -----------------
Cash flow from operating activities 58 -115 -94 -216 -94 29 -54
INVESTING
Investing activities -19 -13 -42 -10 27 -15 2
----------------------- -----------------
Cash flow from investing activities -19 -13 -42 -10 27 -15 2
FINANCING
Financing activities - 53 0 159 100 150 0 - 32
----------------------- -----------------
Cash flow from financing activities -53 0 159 100 150 0 -32
Net change in cash -14 -128 22 -126 83 15 -85
Cash, beginning of period 1,125 1,116 965 996 878 980 1,039
Translation difference in Cash 5 -23 9 8 19 45 -33
----------------------- -----------------
Cash, end of period 1,116 965 996 878 980 1,039 921
Sony Ericsson
NET SALES BY MARKET AREA BY QUARTER
EUR million
2009 2010
------------------------- ------------------
Isolated quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3
----------------------------------------------------------------------------
Europe, Middle East & Africa * 977 927 875 966 711 876 837
Americas 200 195 232 222 201 223 222
Asia 559 562 512 562 493 659 544
----------------------------------------------------------------------------
Total 1,736 1,684 1,619 1,750 1,405 1,757 1,603
----------------------------------------------------------------------------
* of which Western Europe 721 678 636 678 525 668 632
2009 2010
------------------------- ------------------
Sequential change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3
----------------------------------------------------------------------------
Europe, Middle East & Africa * -40% -5% -6% 10% -26% 23% -4%
Americas -69% -3% 19% -4% -10% 11% 0%
Asia -12% 1% -9% 10% -12% 34% -18%
----------------------------------------------------------------------------
Total -40% -3% -4% 8% -20% 25% -9%
----------------------------------------------------------------------------
* of which Western Europe -35% -6% -6% 7% -23% 27% -5%
2009 2010
------------------------- ------------------
Year over year change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3
----------------------------------------------------------------------------
Europe, Middle East & Africa * -35% -33% -39% -41% -27% -5% -4%
Americas -59% -74% -67% -65% 1% 14% -4%
Asia -23% -19% -25% -12% -12% 17% 6%
----------------------------------------------------------------------------
Total -36% -40% -42% -40% -19% 4% -1%
----------------------------------------------------------------------------
* of which Western Europe -26% -25% -33% -39% -27% -2% -1%
2009 2010
------------------------- ------------------
Year to date 0903 0906 0909 0912 1003 1006 1009
----------------------------------------------------------------------------
Europe, Middle East & Africa * 977 1,903 2,778 3,744 711 1,587 2,424
Americas 200 395 627 850 201 424 646
Asia 559 1,121 1,633 2,194 493 1,152 1,695
----------------------------------------------------------------------------
Total 1,736 3,419 5,038 6,788 1,405 3,162 4,765
----------------------------------------------------------------------------
* of which Western Europe 721 1,400 2,036 2,714 525 1,193 1,825
2009 2010
------------------------- ------------------
YTD year over year change (%) 0903 0906 0909 0912 1003 1006 1009
----------------------------------------------------------------------------
Europe, Middle East & Africa * -35% -34% -35% -37% -27% -17% -13%
Americas -59% -68% -67% -67% 1% 7% 3%
Asia -23% -21% -22% -20% -12% 3% 4%
----------------------------------------------------------------------------
Total -36% -38% -40% -40% -19% -8% -5%
----------------------------------------------------------------------------
* of which Western Europe -26% -26% -28% -31% -27% -15% -10%
The full report (including tables) can be downloaded from the following link:
[HUG#1452148]
