* Plan aimed to achieve $120 million of annualized savings by end of 2012
* Includes global workforce review that may affect up to 500 employees
worldwide
* Company also pushes out target for break-even based on current visibility
Geneva, Switzerland, June 23, 2011 - ST-Ericsson, a joint venture of
STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC), today announced that
due to recent changes in the business environment and reduced demand for legacy
products at certain customers, it will launch a cost savings plan to achieve
about $120 million of annualized savings by the end of 2012.
"These actions while necessary to strengthen the financial position of the
company, will not compromise the execution of our new products and delivery to
our customers," said Gilles Delfassy, president and CEO of ST-Ericsson. "We
continue to gain traction on our new product portfolio and remain steadfastly
committed to leadership in the smartphone and tablet markets."
Also, while the company keeps its strong focus to improving financial
performance, the company's path to profitability is expected to take longer,
with the target break-even, based on current visibility, now planned later than
the previously anticipated second quarter 2012.
The cost savings plan includes a global workforce review that may affect up to
500 employees worldwide. Specific country impact related to the plan and further
details will be provided when employee representatives have been involved where
required. Restructuring costs are estimated to be approximately $55 million, of
which the majority is expected to be recorded during the second half of 2011.
About ST-Ericsson
ST-Ericsson is a world leader in developing and delivering a complete portfolio
of innovative mobile platforms and cutting-edge wireless semiconductor solutions
across the broad spectrum of mobile technologies. The company is a leading
supplier to the top handset manufacturers and generated sales of $2.3 billion in
2010. ST-Ericsson was established as a 50/50 joint venture by STMicroelectronics
(NYSE:STM) and Ericsson (NASDAQ:ERIC) in February 2009, with headquarters in
Geneva, Switzerland.
www.stericsson.com
www.twitter.com/STEricssonForum
FOR FURTHER INFORMATION, PLEASE CONTACT:
Global Communications & Media
Relations
Carol Streitberger Brighton, Geneva,
Switzerland
Public & Media Relations Investor & Analyst Relations
Roland Sladek, Geneva, Switzerland Fabrizio Rossini, Geneva, Switzerland
Kristina Embring Klang, Lund, Sweden Phone: +41 22 929 6973
Phone: +41 22 930 2733 Email: investor.relations@stericsson.com
Email:media.relations@stericsson.com
Ericsson Investor Relations STMicroelectronics Investor Relations
Asa Konnbjer, Stockholm, Sweden Tait Sorensen, Phoenix AZ, US
Phone: +46 10 713 3928 Phone: +1 602 485 2064
E-mail:investor.relations@ericsson.com Celine Berthier, Geneva, Switzerland
Phone: +41 22 929 5812
Email:investors@st.com
###
The ST-Ericsson results reported in this press release do not reflect in their
entirety the results of the Wireless Segment of STMicroelectronics, which
include other activities that are not part of ST-Ericsson.
###
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
STMicroelectronics' (NYSE:STM) and Ericsson's (NASDAQ:ERIC) filings with the US
Securities and Exchange Commission, particularly each company's latest published
Annual Report on Form 20-F.
[HUG#1525536]
