SOURCE: Ericsson

January 22, 2010 03:08 ET

Sony Ericsson reports fourth quarter and full year 2009 results

STOCKHOLM, SWEDEN--(Marketwire - January 22, 2010) -



Q4 Highlights:
  * Improved quarterly financial results reflected success of refreshed
    portfolio
  * Transformation programme bearing fruit and to continue
  * Announced first Android-based phone, the XPERIA™ X10

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson) for the fourth quarter and full year ended December 31, 2009 is as follows:

                                    Q4 2009 Q3 2009 Q4 2008 FY 2009 FY 2008

 Number of units shipped (million)     14.6    14.1    24.2    57.1    96.6

 Sales (Euro m.)                      1,750   1,619   2,914   6,788  11,244

 Gross margin (%)                       23%     16%     15%     15%     22%

 Operating income (Euro m.)            -181    -193    -262  -1,018    -113

 Operating margin (%)                  -10%    -12%     -9%    -15%     -1%

   Restructuring charges (Euro m.)      150       2     129     164     175

   Operating income excl. restructuring
   charges (Euro m.)                    -32    -191    -133    -854      61

   Operating margin excl. restructuring
   charges (%)                          -2%    -12%     -5%    -13%      1%

 Income before taxes (IBT) (Euro m.)   -190    -199    -261  -1,043     -83

   IBT excl. restructuring charges
   (Euro m.)                            -40    -198    -133    -878      92

 Net income (Euro m.)                  -167    -164    -187    -836     -73



 Average selling price (Euro)           120     114     121     119     116

Bert Nordberg, President, Sony Ericsson comments; "The refreshed portfolio, coupled with the business transformation programme has started to positively impact our financial results. Continued cost saving activities and resource realignment are necessary in order to build a leaner, more efficient organisation capable of meeting the demands of the changing competitive landscape. We will continue to focus on returning the company to profitability by establishing Sony Ericsson as the communication entertainment brand based on an exciting portfolio of mid- and high-end products, such as our recently announced Android-based phone, the XPERIA™ X10. 2010 will still be challenging as the full benefit of cost improvements will not impact results until the second half of the year, however we are confident that our business is on the right track."

Units shipped in the quarter were 14.6 million, a sequential increase of 3% and a year-on-year decrease of 40%. Sales for the quarter were Euro 1,750 million, a sequential increase of 8% and a year-on-year decrease of 40%. The sequential increase was driven by market seasonality and successful sales of Satio™ and Aino™ phones. The year-on-year decrease in both units and sales was mainly due to a downturn in the global handset market and a faster than anticipated shift to touch screen phones in the mid-priced sector of the market. Average Selling Price (ASP) for the quarter rose sequentially by 5% to Euro 120 due to a more favourable product mix.

Gross margin percentage improved sequentially and year-on-year mainly driven by the successful sales of new, higher-margin phones as well as the positive impact of cost reduction activities.

Income before taxes for the quarter, excluding restructuring charges, was a loss of Euro 40 million compared to a loss of Euro 198 million in the previous quarter. The reduced loss was due to the improved gross margin and the benefits of reduced operating expenses. Excluding restructuring charges, Sony Ericsson made a loss for the full year 2009 of Euro 878 million compared with an income of Euro 92 million in 2008. The year-on-year deterioration was mainly attributable to the lower sales.

As of December 31, 2009, Sony Ericsson had a net cash position of Euro 620 million.

During 2009, Sony Ericsson secured external funding of Euro 455 million to strengthen the balance sheet and improve liquidity, out of which Euro 350 million has been guaranteed by the parent companies on a 50/50 basis. Euro 255 million was drawn by the end of 2009, but the remaining Euro 200 million, a two-year committed back-up facility, has not been utilised.

The programme started in mid-2008 to reduce annual operating expenses by Euro 880 million is continuing; with the full benefit expected during the second half of 2010. Since the start of the programme Sony Ericsson has reduced its global workforce by approximately 2,500 people to 9,100 by the end of 2009. The total restructuring charges taken to date are Euro 339 million, and charges for the full programme are estimated to be well within the previously announced Euro 500 million.

Sony Ericsson estimates that the global handset market in units for the fourth quarter 2009 was flat year-on-year and that its market share was about 5% in the fourth quarter. Sony Ericsson believes that the global handset market for the full year 2009 decreased in volume by around 8% year-on-year to around 1.1 billion units and that its market share in units for the full year 2009 was about 5%.

Sony Ericsson forecasts a slight growth in units in the global handset market in 2010.

-END -

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Aino™, Satio™ and XPERIA™ are trademarks or registered trademarks 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. Subject to change without prior notice.

EDITOR'S NOTES:

Financial statements:

Consolidated income statement
Consolidated income statement full year
Consolidated income statement isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows full year
Consolidated statement of cash flows isolated quarters

Additional information:

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. Our 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.

CONTACTS:

Investors / analysts
Ericsson investor relations

Susanne Andersson (Stockholm) +46 10 719 4631

Lars Jacobsson (Stockholm)    +46 10 719 9489


Sony investor relations

Gen Tsuchikawa (Tokyo) +81 3 6748 2180

Shinji Tomita (London) +44 20 7426 8696


Press / media
Sony Ericsson global communications and PR

Aldo Liguori (London)   +44 20 8762 5860

Merran Wrigley (London) +44 20 8762 5862

A live webcast of the conference call discussing the company's results for the fourth quarter and full year ended December 31, 2009 will be available on January 22, 2010 at the following times:

TIMING:
15:30 UK time (GMT)
16:30 Central European time (CET)
10:30 US Eastern time (EST)
00:30 Japan time (JST) January 23, 2010

WEBCAST:
A live webcast of the conference call will be available
at: www.ericsson.com/ericsson/investors
Or please click here to join the webcast
directly: www.thomson-webcast.net/uk/dispatching/?event_id=55bbf43ecfabff7e6e9119
83a216b4b0&portal_id=ccec29148a44ec4b8077c845c5b4cbba
The archived webcast will be available approximately one hour after the
completion of the conference call.

CALL-IN NUMBERS:

UK and Europe +44 20 7806 1956

Sweden        +46 8 5352 6407

US:           +1 718 354 1389

Japan:        +81 3 3570 8228


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
28 January, 2010.


UK and Europe: +44 20 7111 1244

Sweden:        +46 8 5051 3897

US:            +1 347 366 9565

Japan:         +81 3 5767 9615


Replay pass code: 8140934#

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


                                           Oct-Dec

 EUR million                           2009   2008 Change


 Net sales                            1,750  2,914   -40%

 Cost of sales                       -1,341 -2,476   -46%

 Gross profit                           409    438    -7%

 Gross margin %                       23.4%  15.0%     8%


 Research and development expenses     -299   -359   -17%

 Selling and administrative expenses   -299   -366   -18%

 Operating expenses                    -599   -725   -17%


 Other operating income, net              8     24   -66%

 Operating income                      -181   -262   -31%

 Operating margin %                  -10.4%  -9.0%    -1%


 Financial income                         4     28   -88%

 Financial expenses                     -12    -27   -55%

 Income after financial items          -190   -261   -27%


 Taxes                                   36     81   -56%

 Minority interest                      -12     -7    75%

 Net income                            -167   -187   -11%



 Number of units shipped (million)     14.6   24.2   -40%

 ASP (EUR)                              120    121    -1%





 EUR Million                            Oct-Dec

 Restructuring charges                 2009   2008

   Cost of sales                         41     67

   Research and development expenses     72     35

   Sales and administrative expenses     37     24

   Other operating income, net            0      3

 Total                                  150    129




Sony Ericsson
CONSOLIDATED INCOME STATEMENT


                                           Jan-Dec

 EUR million                           2009   2008 Change


 Net sales                            6,788 11,244   -40%

 Cost of sales                       -5,782 -8,750   -34%

 Gross profit                         1,006  2,494   -60%

 Gross margin %                       14.8%  22.2%    -7%


 Research and development expenses   -1,108 -1,379   -20%

 Selling and administrative expenses   -964 -1,249   -23%

 Operating expenses                  -2,072 -2,628   -21%


 Other operating income, net             48     21      -

 Operating income                    -1,018   -113      -

 Operating margin %                  -15.0%  -1.0%   -14%


 Financial income                        21    101   -79%

 Financial expenses                     -46    -71   -35%

 Income after financial items        -1,043    -83      -


 Taxes                                  236     31      -

 Minority interest                      -29    -21    35%

 Net income                            -836    -73      -



 Number of units shipped (million)     57.1   96.6   -41%

 ASP (EUR)                              119    116     2%





 EUR Million                            Jan-Dec

 Restructuring charges                 2009   2008

   Cost of sales                         39     75

   Research and development expenses     84     62

   Sales and administrative expenses     41     29

   Other operating income, net            0      9

 Total                                  164    175




Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS


                             2009                          2008

 EUR million          Q4     Q3     Q2     Q1       Q4     Q3     Q2     Q1


 Net sales         1,750  1,619  1,684  1,736    2,914  2,808  2,820  2,702

 Cost of sales    -1,341 -1,367 -1,483 -1,591   -2,476 -2,192 -2,168 -1,914

 Gross profit        409    252    200    145      438    616    653    788

 Gross margin %    23.4%  15.5%  11.9%   8.4%    15.0%  21.9%  23.1%  29.2%


 Research and
 development
 expenses           -299   -260   -245   -303     -359   -337   -344   -339

 Selling and
 administrative
 expenses           -299   -205   -235   -225     -366   -303   -310   -270

 Operating expenses -599   -465   -480   -528     -725   -640   -653   -610


 Other operating
 income, net           8     21      6     13       24     -8     -2      6

 Operating income   -181   -193   -274   -369     -262    -33     -2    184

 Operating
 margin %         -10.4% -11.9% -16.3% -21.3%    -9.0%  -1.2%  -0.1%   6.8%


 Financial income      4      3      6      9       28     25     25     24

 Financial expenses  -12     -9    -15    -10      -27    -15    -14    -15

 Income after
 financial items    -190   -199   -283   -370     -261    -23      8    193


 Taxes                36     42     74     84       81      6      0    -57

 Minority interest   -12     -6     -4     -6       -7     -8     -3     -3

 Net income         -167   -164   -213   -293     -187    -25      6    133



 Number of units
 shipped (million)  14.6   14.1   13.8   14.5     24.2   25.7   24.4   22.3

 ASP (EUR)           120    114    122    120      121    109    116    121





 EUR Million                    2009                         2008

 Restructuring
 charges                Q4     Q3     Q2     Q1       Q4     Q3     Q2

  Cost of sales         41      0     -9      7       67      0      8

  Research and
  development
  expenses              72      1      9      2       35     26      2

  Sales and
  administrative
  expenses              37      1      1      3       24      3      1

  Other operating
  income, net            0      0      0      0        3      6      0

 Total                 150      2      1     12      129     35     11




Sony Ericsson
CONSOLIDATED BALANCE SHEET


                                          Dec 31   Sep 30   Jun 30   Dec 31

 EUR million                                2009     2009     2009     2008


 ASSETS


 Total fixed and financial assets            779      757      736      590



 Current assets

 Inventories                                 358      397      404      531

 Accounts receivable                         832      917      936    1,629

 Other assets                                415      416      379      585

 Other short-term cash investments           489      464      456      707

 Cash and bank                               389      532      509      418

 Total current assets                      2,483    2,726    2,685    3,870




 Total assets                              3,262    3,482    3,421    4,460



 SHAREHOLDERS' EQUITY AND LIABILITIES


 Shareholders' equity                        381      532      694    1,217

 Minority interest                            47       43       66       57

 Total equity                                428      575      760    1,274



 Borrowing, Non Current                        0       50        0        0

 Other long-term liabilities                  32       31       30       30

 Total long-term liabilities                  32       81       30       30



 Accounts payable                            852    1,019      848      990

 Borrowing, Current                          258      105        0       53

 Other current liabilities                 1,692    1,702    1,782    2,113

 Total current liabilities                 2,802    2,826    2,630    3,156


 Total shareholders' equity and
 liabilities                               3,262    3,482    3,421    4,460



 Net cash*                                   620      841      965    1,072



* Net cash is defined as cash and bank plus short-term cash investments
less interest-bearing liabilities.



Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS


                                              Oct-Dec

 EUR million                                 2009  2008


 OPERATIONS

 Net income                                  -167  -187

 Adjustments to reconcile net income to cash   48    37

                                             -119  -150


 Changes in operating net assets              -97  -168

 Cash flow from operating activities         -216  -318



 INVESTMENTS

 Investing activities                         -10    41

 Cash flow from investing activities          -10    41



 FINANCING

 Financing activities                         100  - 46

 Cash flow from financing activities          100   -46



 Net change in cash                          -126  -323

 Cash, beginning of period                    996 1,473

 Translation difference in Cash                 8   -25

 Cash, end of period                          878 1,125




Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS


                                               Jan-Dec

 EUR million                                  2009   2008


 OPERATIONS

 Net income                                   -836    -73

 Adjustments to reconcile net income to cash   135    146

                                              -701     73


 Changes in operating net assets               333   -323

 Cash flow from operating activities          -368   -250



 INVESTMENTS

 Investing activities                          -84    -64

 Cash flow from investing activities           -84    -64



 FINANCING

 Financing activities                          205   -754

 Cash flow from financing activities           205   -754



 Net change in cash                           -247 -1,068

 Cash, beginning of period                   1,125  2,155

 Translation difference in Cash                 -1     37

 Cash, end of period                           878  1,125




 Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS


                                    2009                     2008

 EUR million                  Q4   Q3    Q2    Q1      Q4    Q3    Q2    Q1


 OPERATIONS

 Net income                 -167 -164  -213  -293    -187   -25     6   133

 Adjustments to reconcile net
 income to cash               48   20    37    29      37    39    40    31

                            -119 -143  -176  -263    -150    15    46   164


 Changes in operating net
 assets                      -97   49    60   321    -168    88  -142  -101

 Cash flow from operating
 activities                 -216  -94  -115    58    -318   102   -96    64


 INVESTMENTS

 Investing activities        -10  -42   -13   -19      41   -55   -29   -22

 Cash flow from investing
 activities                  -10  -42   -13   -19      41   -55   -29   -22


 FINANCING

 Financing activities        100  159     0  - 53    - 46 - 238   - 8 - 462

 Cash flow from financing
 activities                  100  159     0   -53     -46  -238    -8  -462


 Net change in cash         -126   22  -128   -14    -323  -191  -133  -421

 Cash, beginning of period   996  965 1,116 1,125   1,473 1,591 1,711 2,155

 Translation difference in
 Cash                          8    9   -23     5     -25    74    13   -24

 Cash, end of period         878  996   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          Q4    Q3    Q2    Q1       Q4    Q3    Q2    Q1

 Europe, Middle East &
 Africa *                  966   875   927   977    1,642 1,427 1,386 1,494

 Americas                  222   232   195   200      636   703   740   486

 Asia                      562   512   562   559      636   678   694   722

 Total                   1,750 1,619 1,684 1,736    2,914 2,808 2,820 2,702

 * of which Western
 Europe                    678   636   678   721    1,117   947   900   979



                                  2009                       2008

 Sequential change (%)      Q4    Q3    Q2    Q1       Q4    Q3    Q2    Q1

 Europe, Middle East &
 Africa *                  10%   -6%   -5%  -40%      15%    3%   -7%  -34%

 Americas                  -4%   19%   -3%  -69%     -10%   -5%   52%  -24%

 Asia                      10%   -9%    1%  -12%      -6%   -2%   -4%  -18%

 Total                      8%   -4%   -3%  -40%       4%    0%    4%  -28%

 * of which Western
 Europe                     7%   -6%   -6%  -35%      18%    5%   -8%  -38%



                                  2009                       2008

 Year over year change (%)  Q4    Q3    Q2    Q1       Q4    Q3    Q2    Q1

 Europe, Middle East &
 Africa *                 -41%  -39%  -33%  -35%     -27%  -17%  -20%   -7%

 Americas                 -65%  -67%  -74%  -59%       0%   23%   48%   33%

 Asia                     -12%  -25%  -19%  -23%     -28%  -17%  -21%  -25%

 Total                    -40%  -42%  -40%  -36%     -23%  -10%   -9%   -8%

 * of which Western
 Europe                   -39%  -33%  -25%  -26%     -29%  -14%  -18%   -9%



                                  2009                       2008

 Year to date             0912  0909  0906  0903     0812  0809  0806  0803

 Europe, Middle East &
 Africa *                3,744 2,778 1,903   977    5,947 4,306 2,879 1,494

 Americas                  850   627   395   200    2,566 1,930 1,226   486

 Asia                    2,194 1,633 1,121   559    2,731 2,094 1,416   722

 Total                   6,788 5,038 3,419 1,736   11,244 8,330 5,522 2,702

 * of which Western
 Europe                  2,714 2,036 1,400   721    3,943 2,826 1,879   979



                                  2009                       2008

 YTD year over year change
 (%)                      0912  0909  0906  0903     0812  0809  0806  0803

 Europe, Middle East &
 Africa *                 -37%  -35%  -34%  -35%     -18%  -15%  -13%   -7%

 Americas                 -67%  -67%  -68%  -59%      24%   34%   42%   33%

 Asia                     -20%  -22%  -21%  -23%     -23%  -21%  -23%  -25%

 Total                    -40%  -40%  -38%  -36%     -13%   -9%   -9%   -8%

 * of which Western
 Europe                   -31%  -28%  -26%  -26%     -19%  -14%  -14%   -9%

The full report (including tables) can be downloaded from the following link:

Fourth quarter and full year report 2009: http://hugin.info/1061/R/1375864/337698.pdf

Contact Information