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B1 Segment information

12 Months Ended

Dec. 31, 2024

Disclosure of operating segments [abstract]

Segment information

Segments

When determining Ericsson’s operating segments, consideration has been given to the financial reporting reviewed by the Chief Operating Decision Maker (CODM). Markets and what type of customers the products and services aim to attract have been considered, as well as the distribution channels they are sold through. Commonality regarding technology, research and development has also been taken into account. To best reflect the business focus, three operating segments are presented:

–

Networks

–	Cloud Software and Services

–	Enterprise.

Segment Networks

offers hardware and software solutions and related services, enabling communications service providers to evolve to new 5G capabilities. The portfolio includes Radio Access Network (RAN), RAN Compute, Transport, Antenna products and a complete service portfolio. 82% (82% in both 2023 and 2022) of the IPR licensing revenues are reported as part of segment Networks.

Segment Cloud Software and Services

provides solutions that equip communications service providers to enhance their business agility, service experience, and operational efficiency. The portfolio includes Core Networks, Business and Operations Support Systems, Network Management, Cognitive Network Solutions and Managed Network Services. 18% (18% in both 2023 and 2022) of the IPR licensing revenues are reported as part of segment Cloud Software and Services.

Segment Enterprise

provides advanced connectivity solutions for businesses to accelerate digitalization, drive innovation and optimize processes. The portfolio includes Global Communications Platform, Wireless Wide-Area Networks (WWAN) and private cellular networks.

Other

comprises media businesses as well as other

non-allocated

businesses, including RedBee Media. Segment-level information has also been presented for Other.

Market areas

The market areas are the Company’s primary sales channel with the responsibility to sell and deliver Mobile Networks customer solutions.

The Company operates worldwide and reports its operations divided into five geographical market areas:

–	North America

–	Europe and Latin America

–	South East Asia, Oceania and India

–	North East Asia

–	Middle East and Africa.

Segment Enterprise has a multi-channel

go-to-market

distribution model. Sales from segment Enterprise and Other, and the IPR licensing revenues are externally reported as market area Other.

Major customers

The Company derives most of its sales from large, multi-year agreements with a limited number of significant customers. Out of a customer base of more than 500 customers, mainly consisting of communications service providers, the 10 largest customers accounted for 44% (43% in 2023 and 50% in 2022) of net sales. These customers were reported under segments Networks and Cloud Software and Services. The largest customer accounted for approximately 13% (8% in 2023 and 14% in 2022) and the second largest customer accounted for 8% (7% in 2023 and 10% in 2022) of net sales.

Segment information 2024

Networks

Cloud Software
and Services

Enterprise

Other

Group/Total
segments

Segment sales

158,207

62,635

24,863

2,175

247,880

Net sales

158,207

62,635

24,863

2,175

247,880

Gross income

73,648

23,021

12,788

–92

109,365

Gross margin (%)

46.6%

36.8%

51.4%

–4.2%

44.1%

Earnings (loss) before financial items and income tax (EBIT)

1)2)

25,665

–435

–22,083

1,166

4,313

EBIT margin (%)

16.2%

–0.7%

–88.8%

53.6%

1.7%

Financial income and expenses, net

–1,724

Income after financial items

2,589

Income tax

–2,215

Net income

374

Other segment items

Share in earnings of associated companies

–

–342

–246

Amortizations

–1,288

–30

–2,661

–1

–3,980

Depreciations

–4,187

–1,381

–274

–198

–6,040

Impairment losses

–305

–87

–15,308

–14

–15,714

Restructuring charges

–1,899

–2,434

–511

–168

–5,012

Gains/losses on investments and sale of operations

–7

–165

–145

Segment Enterprise includes impairment of goodwill and intangible assets of SEK –15.3 billion, mainly related to the acquisition of Vonage in 2022. For more information, see note C1 “Intangible assets.”

Segment Other includes a gain of SEK 1.9 billion from the resolution of a commercial dispute, see note B4 “Other operating income and expenses.”

Segment information 2023

Networks

Cloud Software
and Services

Enterprise

Other

Group/Total
segments

Segment sales

171,442

63,630

25,745

2,534

263,351

Net sales

171,442

63,630

25,745

2,534

263,351

Gross income

67,959

22,088

12,016

–461

101,602

Gross margin (%)

39.6%

34.7%

46.7%

–18.2%

38.6%

Earnings (loss) before financial items and income tax (EBIT)

19,382

–220

–38,336

–1,152

–20,326

EBIT margin (%)

11.3%

–0.3%

–148.9%

–45.5%

–7.7%

Financial income and expenses, net

–2,993

Income (loss) after financial items

–23,319

Income tax

–2,785

Net income (loss)

–26,104

Other segment items

Share in earnings of associated companies

–

124

Amortizations

–1,013

–43

–3,401

–1

–4,458

Depreciations

–4,460

–1,470

–274

–495

–6,699

Impairment losses

–527

–176

–31,952

–77

–32,732

Restructuring charges

–4,437

–1,924

–173

–6,521

Gains/losses on investments and sale of operations

–24

–39

–16

–206

–285

Segment Enterprise includes impairment of goodwill of SEK –31.9 billion related to the acquisition of Vonage. For more information, see note C1 “Intangible assets.”

Segment information 2022

Networks

Cloud Software

and Services

Enterprise

Other

Group/Total
segments

Segment sales

193,468

60,524

14,597

2,957

271,546

Net sales

193,468

60,524

14,597

2,957

271,546

Gross income

86,368

20,106

7,096

–275

113,295

Gross margin (%)

44.6%

33.2%

48.6%

–9.3%

41.7%

Earnings (loss) before financial items and income tax (EBIT)

38,512

–1,689

–4,473

–5,330

27,020

EBIT margin (%)

19.9%

–2.8%

–30.6%

–180.3%

10.0%

Financial income and expenses, net

–2,411

Income after financial items

24,609

Income tax

–5,497

Net income

19,112

Other segment items

Share in earnings of associated companies

–

–40

Amortizations

–1,424

–122

–2,019

–12

–3,577

Depreciations

–4,073

–1,792

–515

–185

–6,565

Impairment losses

–211

–91

–87

–12

–401

Restructuring charges

–146

–96

–65

–92

–399

Gains/losses on investments and sale of operations

253

–

111

–108

256

1)	Segment Other includes a provision of SEK –2.3 billion related to the DPA breach resolution with the US Department of Justice, including expenses for the extended monitorship, and by SEK –1.0 billion due to charges related to the divestment of IoT and other portfolio adjustments.

Products and Services by Segments



	Networks		Cloud Software and Services		Enterprise		Other		Total
2024
Products		121,814		22,409		5,927		–		150,150
Services		36,393		40,226		18,936		2,175		97,730
Total		158,207		62,635		24,863		2,175		247,880

2023
Pro d ucts		131,393		21,672		5,704		–4		158,765
Services		40,049		41,958		20,041		2,538		104,586
Total		171,442		63,630		25,745		2,534		263,351

2022
Products		147,997		21,105		4,923		–1		174,024
Services		45,471		39,419		9,674		2,958		97,522
Total		193,468		60,524		14,597		2,957		271,546


Market area 2024
	Net sales										Non-current assets 5)

	Networks		Cloud Software and Services		Enterprise		Other		Total		Total
North America 1)		57,875		14,326		598		87		72,886		18,223
Europe and Latin America 2)		40,855		22,271		284		–		63,410		66,765
South East Asia, Oceania and India 3)		23,259		9,114		37		–		32,410		1,005
North East Asia 4)		14,477		4,142		18		124		18,761		1,374
Middle East and Africa		10,344		9,761		678		–12		20,771		173
Other 1) 2) 3) 4) 6)		11,397		3,021		23,248		1,976		39,642		–
Total		158,207		62,635		24,863		2,175		247,880		87,540
1) of which in the United States 6)										98,265		17,175

2) of which in EU 6)										35,264		62,126
of which in Sweden 6)										2,341		61,065
3) of which in India 6)										15,194		569
4) of which in Japan 6)										9,072		199
4) of which in China 6)										10,221		1,007

5)	Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.

6)	Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer.

Other sales are attributed to countries based on the destination of products or services delivered.


Market area 2023
	Net sales										Non-current assets 5)

	Networks		Cloud Software and Services		Enterprise		Other		Total		Total
North America 1)		44,640		14,199		266		125		59,230		33,214
Europe and Latin America 2)		42,298		22,270		245		71		64,884		64,497
South East Asia, Oceania and India 3)		43,235		10,038		36		9		53,318		886
North East Asia 4)		18,986		4,720		37		189		23,932		1,775
Middle East and Africa		12,902		10,457		378		2		23,739		174
Other 1) 2) 3) 4) 6)		9,381		1,946		24,783		2,138		38,248		–
Total		171,442		63,630		25,745		2,534		263,351		100,546
1) of which in the United States 6)										85,313		32,133
2) of which in EU 6)										34,257		59,456
of which in Sweden 6)										1,774		58,728
3) of which in India 6)										31,205		535
4) of which in Japan 6)										10,139		132
4) of which in China 6)										10,716		1,449

5)	Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.

6)	Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer.

Other sales are attributed to countries based on the destination of products or services delivered.


Market area 2022
	Net sales										Non-current assets 5)

	Networks		Cloud Software and Services		Enterprise		Other		Total		Total
North America 1)		81,917		13,362		47		68		95,394		41,065
Europe and Latin America 2)		44,644		21,638		99		409		66,790		93,612
South East Asia, Oceania and India 3)		23,695		9,179		17		60		32,951		999
North East Asia 4)		22,488		4,015		8		222		26,733		3,385
Middle East and Africa		11,707		10,472		368		24		22,571		–804
Other 1) 2) 3) 4) 6)		9,017		1,858		14,058		2,174		27,107		–
Total		193,468		60,524		14,597		2,957		271,546		138,257
1) of which in the United States 6)										109,709		39,906
2) of which in EU 6)										35,859		92,167
of which in Sweden 6)										3,239		88,057
3) of which in India 6)										10,957		519
4) of which in Japan 6)										9,965		187
4) of which in China 6)										10,523		2,068

5)	Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.

6)	Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer. Other sales are attributed to countries based on the destination of products or services delivered.