Sony Ericsson reports third quarter 2011 results
14 Oct, 2011 08:32 CET
Highlights:
* Income before taxes was Euro 31 million
* 33 percent increase in sales quarter-on-quarter
* Smartphones account for more than 80 percent of total sales
The consolidated financial summary for Sony Ericsson Mobile Communications AB
(Sony Ericsson) for the third quarter ended September 30, 2011 is as follows:
Q3 2010 Q2 2011 Q3 2011
Number of units shipped (million) 10.4 7.6 9.5
Average selling price (Euro) 154 156 166
Sales (Euro m.) 1,603 1,193 1,586
Gross margin (%) 30% 31% 27%
Operating income (Euro m.) 63 -37 38
Operating margin (%) 4% -3% 2%
Restructuring charges (Euro m.) 4 - -
Operating income excl. restructuring charges (Euro 67 -37 38
m.)
Operating margin excl. restructuring charges (%) 4% -3% 2%
Income before taxes (IBT) (Euro m.) 62 -42 31
IBT excl. restructuring charges (Euro m.) 66 -42 31
Net income (Euro m.) 49 -50 0
Bert Nordberg, President and CEO of Sony Ericsson commented, "We delivered a
solid 73 million Euro improvement in income before taxes as we rebounded from
the previous quarter with a 33 percent increase in sales. Android-based
Xperia(TM) smartphone sales now account for more than 80 percent of sales and we
have shipped 22 million Xperia smartphones to date. We will continue to invest
in the smartphone market, shifting the entire portfolio to smartphones during
2012."
Units shipped during the quarter were 9.5 million, a 9% decrease year-on-year
due to a decline in feature phone shipments, partially offset by an increase in
smartphone shipments. The 25% quarter-on-quarter increase was due to the higher
volume of smartphones shipped.
Average selling price (ASP) for the quarter was Euro 166, up 8% year-on-year and
6% sequentially. The year-on-year increase was due to the shift to smartphones
and geographic mix despite a negative effect from foreign exchange rates. The
sequential increase was due to product and geographic mix.
Sales for the quarter were approximately Euro 1.6 billion and essentially flat
year-on-year.
The gross margin percentage for the quarter was 27%, a decrease of 3 percentage
points year-on-year and 4 percentage points from the previous quarter. The
year-on-year decrease in margin is attributed to product and geographic mix.
The sequential decrease in margin was due to inventory-related adjustments and
product and geographic mix.
Income before taxes for the quarter was Euro 31 million, compared to income
before taxes of Euro 62 million for the same quarter in the previous year. Loss
before taxes for the previous quarter was Euro 42 million. The sequential
improvement was reflective of higher sales and lower operating expenses, while
the year-on-year decline was due to lower gross margin percentage offset by
lower operating expenses.
Net income during the quarter improved by Euro 50 million sequentially, while
net income decreased by Euro 49 million year-on-year. Income taxes recorded
during the quarter reflect the distribution of profits and losses between
various jurisdictions and tax adjustments. Minority interest reflects higher net
income at a majority-owned joint venture company.
Cash flow from operating activities during the quarter was Euro 53 million.
External borrowings of Euro 51 million were repaid during the quarter, resulting
in total borrowings of Euro 718 million at the end of the quarter. Total cash
balances at September 30, 2011 amounted to Euro 466 million.
Sony Ericsson estimates that its share of the global Android-based smartphone
market during the quarter was approximately 12% in volume and 11% in value.
Sony Ericsson maintains its forecast for modest industry growth in total units
in the global handset market for 2011.
The liquid identity is a registered trademark of Sony Ericsson Mobile
Communications AB. Xperia(TM) is a trademark 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 and subject to change without prior
notice.
EDITOR'S NOTES:
Financial statements:
Consolidated income statement
Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters
Net sales by market area by quarter
About Sony Ericsson
Sony Ericsson celebrates its 10th year as a joint venture between Sony
Corporation and Ericsson in October 2011. Over the years Sony Ericsson has
brought together the best communication technologies with superior entertainment
user experiences to create its Xperia(TM) line of the 'most entertaining
smartphones' in the mobile handset industry. With its global corporate functions
in London, Sony Ericsson has sales and marketing operations in all major regions
of the world, as well as manufacturing operations in China, and product
development sites in China, Japan, Sweden and Silicon Valley, California. For
more information, please visit:www.sonyericsson.com/press
- ENDS -
CONTACTS:
Ericsson investor relations
Stefan Jelvin (Stockholm) +46 10 714 2039
Sony investor relations
Yoshinori Hashitani (Tokyo) +81 3 6748 2111
Yas Hasegawa (London) +44 20 7426 8696
Press / Media
Sony Ericsson global communications and PR
Cathy Davies (London) +44 208 762 5879
Holly Rossetti (London) + 44 208 762 5851
Gustaf Brusewitz (London) +44 208 762 5805
This press release contains forward-looking statements that involve inherent
risks and uncertainties. Sony Ericsson has 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
Jul-Sep Jan-Sep
-------------------------------- ------------------------------
EUR million 2010 2011 Change 2010 2011 Change
------------------------------------------------- ------------------------------
Net sales 1,603 1,586 -1% 4,765 3,924 -18%
Cost of sales -1,130 -1,159 3% -3,371 -2,750 -18%
------------------------- ------------------------
Gross profit 473 427 -10% 1,394 1,174 -16%
Gross margin % 30% 27% -3 pp 29% 30% 1pp
Research and
development
expenses -179 -190 6% -555 -547 -1%
Selling and
administrative
expenses -241 -207 -14% -750 -630 -16%
------------------------- ------------------------
Operating
expenses -420 -397 -5% -1,305 -1,177 -10%
Other operating
income, net 10 8 -20% 31 24 -23%
------------------------- ------------------------
Operating income 63 38 -40% 120 21 -83%
Operating margin
% 4% 2% -2pp 3% 1% -2pp
Financial income 7 7 0% 16 15 -6%
Financial
expenses -8 -14 75% -24 -32 33%
------------------------- ------------------------
Income before
taxes 62 31 -50% 112 4 -96%
Taxes -12 -17 42% -21 -26 24%
Minority interest -2 -14 600% -8 -18 125%
------------------------- ------------------------
Net income 49 0 -100% 82 -40
------------------------------------------ ------------------------
Number of units
shipped (million) 10.4 9.5 -9% 31.9 25.3 -21%
ASP (EUR) 154 166 8% 150 155 3%
------------------------------------------ ------------------------
EUR million Jul-Sep Jan-Sep
------------------------------------------ ------------------------
Restructuring
charges 2010 2011 2010 2011
------------------------------------------ ------------------------
Cost of sales -3 - -34 -
Research and
development
expenses 5 - 2 -
Selling and
administrative
expenses -6 - -7 -
------------------------------------------ ------------------------
Total -4 - -39 -
* Operating expenses in 2010 have been restated to reflect certain
organizational changes.
Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS
2010 2011
---------------------------- -------------------
EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3
------------------------------------------------------------ -------------------
Net sales 1,405 1,757 1,603 1,528 1,145 1,193 1,586
Cost of sales -975 -1,266 -1,130 -1,069 -763 -828 -1,159
---------------------------- -------------------
Gross profit 429 492 473 459 382 365 427
Gross margin % 31% 28% 30% 30% 33% 31% 27%
Research and development
expenses -185 -191 -179 -191 -173 -184 -190
Selling and administrative
expenses -238 -272 -241 -236 -199 -224 -207
---------------------------- -------------------
Operating expenses -423 -463 -420 -427 -372 -408 -397
Other operating income, net 14 7 10 7 10 6 8
---------------------------- -------------------
Operating income 20 36 63 39 19 -37 38
Operating margin % 1% 2% 4% 3% 2% -3% 2%
Financial income 7 2 7 2 3 5 7
Financial expenses -9 -7 -8 -6 -8 -10 -14
---------------------------- -------------------
Income before taxes 18 31 62 35 15 -42 31
Taxes 6 -16 -12 -27 -5 -3 -17
Minority interest -3 -4 -2 0 1 -5 -14
---------------------------- -------------------
Net income 21 12 49 8 11 -50 0
------------------------------------------------------------ -------------------
Number of units shipped
(million) 10.5 11.0 10.4 11.2 8.1 7.6 9.5
ASP (EUR) 134 160 154 136 141 156 166
------------------------------------------------------------ -------------------
EUR million 2010 2011
------------------------------------------------------------ -------------------
Restructuring charges Q1 Q2 Q3 Q4 Q1 Q2 Q3
------------------------------------------------------------ -------------------
Cost of sales 2 -33 -3 2 - - -
Research and development
expenses -2 -1 5 0 - - -
Selling and administrative
expenses -3 2 -6 -5 - - -
------------------------------------------------------------ -------------------
Total -3 -32 -4 -3 - - -
* Operating expenses in 2010 have been restated to reflect certain
organizational changes.
Sony Ericsson
CONSOLIDATED BALANCE SHEET
Sep 30 Dec 31 Jun 30 Sep 30
EUR million 2010 2010 2011 2011
------------------------------------------------------------------------------
ASSETS
Total fixed and financial assets 813 803 819 890
Current assets
Inventories 457 460 570 656
Accounts receivable 986 836 872 1,090
Other assets 328 295 330 408
Other short-term cash investments 440 276 329 301
Cash and bank 482 329 188 165
-------- -------- -------- -------
Total current assets 2,692 2,196 2,289 2,620
------------------------------------------------------------------------------
Total assets 3,505 2,999 3,108 3,510
------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity 480 532 451 507
Minority interest 62 42 43 60
-------- -------- -------- -------
Total equity 541 574 494 567
Borrowing, Non Current 100 100 0 0
Other long-term liabilities 30 32 31 40
-------- -------- -------- -------
Total long-term liabilities 130 132 31 40
Accounts payable 922 769 716 1,050
Borrowing, Current 284 130 769 718
Other current liabilities 1,628 1,394 1,098 1,135
-------- -------- -------- -------
Total current liabilities 2,834 2,293 2,583 2,903
------------------------------------------------------------------------------
Total shareholders' equity and liabilities 3,505 2,999 3,108 3,510
------------------------------------------------------------------------------
Net cash* 538 375 -252 -252
* Net cash is defined as cash and bank deposit plus short-term cash investments
less interest-bearing liabilities.
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Jul-Sep Jan-Sep
---------------- --------------
EUR million 2010 2011 2010 2011
------------------------------------------------------------- --------------
OPERATING
Net income 49 0 82 -40
Adjustments to reconcile net income to cash -66 27 -105 -139
---------------- --------------
-17 27 -23 -179
Changes in operating net assets -38 26 -96 -345
---------------- --------------
Cash flow from operating activities -54 53 -119 -524
INVESTING
Investing activities 2 -58 14 -94
---------------- --------------
Cash flow from investing activities 2 -58 14 -94
FINANCING
Financing activities -32 -56 118 485
---------------- --------------
Cash flow from financing activities -32 -56 118 485
Net change in cash -85 -61 12 -133
Cash, beginning of period 1,039 516 878 605
Translation difference in Cash -33 11 31 -6
---------------- --------------
Cash, end of period 921 466 921 466
------------------------------------------------------------- --------------
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS
2010 2011
----------------------- --------------
EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3
----------------------------------------------------------------- --------------
OPERATING
Net income 21 12 49 8 11 -50 0
Adjustments to reconcile net income to
cash -44 4 -66 -50 -137 -29 27
----------------------- --------------
-23 16 -17 -42 -127 -79 27
Changes in operating net assets -72 13 -38 -86 -226 -145 26
----------------------- --------------
Cash flow from operating activities -94 29 -54 -128 -353 -224 53
INVESTING
Investing activities 27 -15 2 -18 -14 -21 -58
----------------------- --------------
Cash flow from investing activities 27 -15 2 -18 -14 -21 -58
FINANCING
Financing activities 150 0 -32 -178 375 165 -56
----------------------- --------------
Cash flow from financing activities 150 0 -32 -178 375 165 -56
Net change in cash 83 15 -85 -324 8 -80 -61
Cash, beginning of period 878 980 1,039 921 605 599 516
Translation difference in Cash 19 45 -33 7 -14 -3 11
----------------------- --------------
Cash, end of period 980 1,039 921 605 599 516 466
----------------------------------------------------------------- --------------
Sony Ericsson
NET SALES BY MARKET AREA BY QUARTER
EUR million 2010 2011
------------------------- ------------------
Isolated quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3
--------------------------------------------------------- ------------------
Europe, Middle East & Africa * 711 876 837 795 485 435 480
Americas 201 223 222 205 151 193 121
Asia 493 659 544 528 509 565 985
--------------------------------------------------------- ------------------
Total 1,405 1,757 1,603 1,528 1,145 1,193 1,586
--------------------------------------------------------- ------------------
* of which Western Europe 525 668 632 569 307 323 313
2010 2011
------------------------- ------------------
Sequential change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3
--------------------------------------------------------- ------------------
Europe, Middle East & Africa * -26% 23% -4% -5% -39% -10% 10%
Americas -9% 11% 0% -8% -26% 28% -37%
Asia -12% 34% -17% -3% -4% 11% 74%
--------------------------------------------------------- ------------------
Total -20% 25% -9% -5% -25% 4% 33%
--------------------------------------------------------- ------------------
* of which Western Europe -23% 27% -5% -10% -46% 5% -3%
2010 2011
------------------------- ------------------
Year over year change (%) Q1 Q2 Q3 Q4 Q1 Q2 Q3
--------------------------------------------------------- ------------------
Europe, Middle East & Africa * -27% -6% -4% -18% -32% -50% -43%
Americas 1% 14% -4% -8% -25% -13% -45%
Asia -12% 17% 6% -6% 3% -14% 81%
--------------------------------------------------------- ------------------
Total -19% 4% -1% -13% -19% -32% -1%
--------------------------------------------------------- ------------------
* of which Western Europe -27% -1% -1% -16% -42% -52% -50%
2010 2011
------------------------- ------------------
Year to date 1003 1006 1009 1012 1103 1106 1109
--------------------------------------------------------- ------------------
Europe, Middle East & Africa * 711 1,587 2,424 3,219 485 919 1,399
Americas 201 424 646 851 151 345 466
Asia 493 1,152 1,695 2,224 509 1,075 2,060
--------------------------------------------------------- ------------------
Total 1,405 3,162 4,765 6,294 1,145 2,339 3,925
--------------------------------------------------------- ------------------
* of which Western Europe 525 1,193 1,825 2,393 307 630 943
2010 2011
------------------------- ------------------
YTD year over year change (%) 1003 1006 1009 1012 1103 1106 1109
--------------------------------------------------------- ------------------
Europe, Middle East & Africa * -27% -17% -13% -14% -32% -42% -42%
Americas 1% 7% 3% 0% -25% -19% -28%
Asia -12% 3% 4% 1% 3% -7% 22%
--------------------------------------------------------- ------------------
Total -19% -8% -5% -7% -19% -26% -18%
--------------------------------------------------------- ------------------
* of which Western Europe -27% -15% -10% -12% -42% -47% -48%
The full report (including tables) can be downloaded from the following link:
Third quarter 2011 financial results:
http://hugin.info/133603/R/1554852/479396pdf
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Sony Ericsson via Thomson Reuters ONE
[HUG#1554852]