Ericsson Returns to Top-line Growth in 2018, Hones In on 5G

Ericsson’s senior management was in bullish mood as the Swedish vendor posted financial results for 2018 that it believes put it comfortably on track to achieve its financial targets and exploit the expected growth in demand for 5G technology.CEO B��rje Ekholm trumpeted the fact that Ericsson returned to full-year organic sales growth in 2018 for the first time since 2013. Sales improved quarter on quarter throughout the year, culminating in a 10 percent increase (or 4 percent adjusted for comparable units and currency) to $7 billion in the fourth quarter. In the full year, sales rose by 1 percent after adjustments to $23 billion.The operating margin excluding restructuring charges also improved to 4.4 percent in the full year, up from minus 12.8 percent a year previously. Including charges, the operating margin was only just in the black at 0.6 percent. The company is confident it will achieve its targets of at least a 10 percent operating margin in 2020 and 12 percent in 2022, excluding any restructuring charges.“We exited the year as a much stronger company,” Ekholm said during a conference call with investors. This was achieved through a “relentless focus” on the vendor’s new strategy to turn round its business, with measures including the transition to the new Ericsson radio system in the networks division, an overhaul of the digital services unit, and a review of 42 low-performing customer contracts in managed services — all of which have now been addressed.