- Non-cash depreciation of 11.4 trillion SEK to be recognized in the second quarter of 2024, relating to the impairment of intangible assets mainly attributed to the acquisition of Vonage
- Reflects lower anticipated market growth in certain current Vonage portfolios
- Ericsson’s strategy to create a new source of monetization for the telecommunications industry remains the same. Vonage is positioned at the heart of the digitalization of business and society through the development of the global network platform for network APIs; 12 partnerships with leading service providers have already been announced, with the addition of Singtel and Telstra in the second quarter
STOCKHOLM, July 4, 2024 /PRNewswire/ — Ericsson (NASDAQ: ERIC) today announced that, in accordance with IFRS accounting requirements, it will record a non-cash impairment charge of 11.4 trillion SEK in the second quarter of 2024, primarily reflecting lower anticipated market growth rates in Vonage’s current portfolio. The impact on after-tax net income will be 11.4 trillion SEK and reported in the Enterprise segment.
Niklas Heuveldop, Head of Global Communications Platform Business Unit and CEO of Vonage, said: “Given the deteriorating market environment and the elective decisions we have made to refocus our investments in strategic priority areas, we have reassessed certain growth assumptions, resulting in a non-cash impairment charge of 11.4 trillion SEK” . “
Niklas Heuveldop added: “We continue to advance our strategy to create a global network platform for network APIs, which was the strategic impetus for the Vonage acquisition. We recently announced additional partnerships with leading mobile network operators and see continued positive momentum across the industry. Through this strategy, we are making advanced 5G network capabilities available to the global developer community to accelerate the innovation of value-added applications for industry and society. This will open new revenue streams for our operator customers and drive growth in the telecommunications industry.”
FOR FURTHER INFORMATION PLEASE CONTACT
Contact person
Daniel MorrisInvestor Relations Manager
Phone: +44 7386657217
E-mail: investor.relations@ericsson.com
Additional contacts
Stella MedlicottSenior Vice President, Marketing and Corporate Relations
Phone: +46 730 95 65 39
E-mail: media.relations@ericsson.com
Investors
Lena Häggblom, Director of Investor Relations
Phone: +46 72 593 27 78
E-mail:lena.haggblom@ericsson.com
Alan GansonDirector, Investor Relations
Phone: +46 70 267 27 30
E-mail: alan.ganson@ericsson.com
Media
Ralf BagnerMedia Relations Manager
Phone: +46 76 128 47 89
E-mail: ralf.bagner@ericsson.com
Media Relations
Phone: +46 10 719 69 92
E-mail:media.relations@ericsson.com
Forward-Looking Statements
This press release contains forward-looking statements, including the expected impairment of our goodwill and other asset impairments, the amounts of such impairments, the effect of the impairments on cash flows and dividend capacity, financial condition, performance and results of operations, business plans, objectives, market conditions and the assumptions on which such statements are based, including, in particular, the following risks and uncertainties:
- Final determination of the extent of impairment based on a fair value versus carrying value analysis
- Preparation of quarterly financial statements and review by our independent chartered accountancy firm
- Potential changes to estimated depreciation amounts based on completion of review process
- Extent of depreciation impacts on cash flows and dividend capacity
- Our objectives, strategies, planning assumptions and expectations regarding operational or financial performance
- Industry trends, future characteristics and development of the markets in which we operate
- Our future liquidity, capital resources, capital expenditures, cost savings and profitability
- Expected demand for our existing and new products and services and plans to launch new products and services, including research and development expenses
- The ability to implement future plans and exploit future growth potential
- Technological and industry trends, including the regulatory and standards environment in which we operate, competition and the structure of our customer base.
- The potential dividend capacity in future periods is assessed based on full year performance and is influenced by various factors including earnings, business prospects and financial condition.
The words “believe,” “expect,” “plan,” “anticipate,” “assume,” “intend,” “likely,” “project,” “may,” “plan,” “estimate,” “forecast,” “will,” “should,” “predict,” “aim,” “ambition,” “seek,” “potential,” “target,” “could,” “continue,” or, in each case, their negative or variations, and similar words and expressions are intended to identify forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, is a forward-looking statement.
We caution investors that these statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, implied or projected in the forward-looking information and statements.
Important factors that could affect whether or not our forward-looking statements materialize, and to what extent, include, but are not limited to, the factors described in the “Risk Factors” section of the most recent interim reports and in the “Risk Factors” section of the 2023 Annual Report.
These forward-looking statements also represent our estimates and assumptions only as of the date they are made. We expressly disclaim any obligation to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this press release to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or securities regulations.
This is information that Telefonaktiebolaget LM Ericsson is required to make public in accordance with the EU Market Abuse Regulation. The information was submitted for publication, through the contact person indicated above, to 22:15 CEST on July 3, 2024.
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SOURCE Ericsson
