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Telefonaktiebolaget LM Ericsson

OM:ERIC B
Snowflake Description

Moderate growth potential with mediocre balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ERIC B
OM
SEK299B
Market Cap
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Last updated 2019/05/19 20:44
Company description

Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers. The last earnings update was 32 days ago. More info.

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ERIC B Share Price and Events
7 Day Returns
2.5%
OM:ERIC B
2.5%
SE Communications
0.8%
SE Market
1 Year Returns
34.1%
OM:ERIC B
32.9%
SE Communications
-0.6%
SE Market
ERIC B Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Telefonaktiebolaget LM Ericsson (ERIC B) 2.5% -3.6% 5.7% 34.1% 42.6% 11%
SE Communications 2.5% -3.6% 4.7% 32.9% 40.8% -8.7%
SE Market 0.8% -2.3% 2.4% -0.6% 14.3% 18.2%
1 Year Return vs Industry and Market
  • ERIC B outperformed the Communications industry which returned 32.9% over the past year.
  • ERIC B outperformed the Market in Sweden which returned -0.6% over the past year.
Price Volatility
ERIC B
Industry
5yr Volatility vs Market
Related Companies

ERIC B Value

 Is Telefonaktiebolaget LM Ericsson undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Telefonaktiebolaget LM Ericsson to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Telefonaktiebolaget LM Ericsson.

OM:ERIC B Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 23 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.2%
Perpetual Growth Rate 10-Year SE Government Bond Rate 0.4%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for OM:ERIC B
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year SE Govt Bond Rate 0.4%
Equity Risk Premium S&P Global 6%
Communications Unlevered Beta Simply Wall St/ S&P Global 1.07
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.071 (1 + (1- 22%) (15.3%)) 		1.133
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)		 1.13
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 0.43% + (1.133 * 5.96%) 		7.19%

Discounted Cash Flow Calculation for OM:ERIC B using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Telefonaktiebolaget LM Ericsson is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

OM:ERIC B DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (SEK, Millions) Source Present Value
Discounted (@ 7.19%)
2019 11,506.72 Analyst x5 10,735.25
2020 15,356.61 Analyst x13 13,366.48
2021 18,546.79 Analyst x7 15,060.91
2022 23,701.00 Analyst x2 17,956.02
2023 22,396.00 Analyst x1 15,829.77
2024 21,536.95 Est @ -3.84% 14,201.99
2025 20,986.74 Est @ -2.55% 12,911.33
2026 20,638.78 Est @ -1.66% 11,845.97
2027 20,426.14 Est @ -1.03% 10,937.89
2028 20,305.43 Est @ -0.59% 10,144.26
Present value of next 10 years cash flows SEK132,989.86
OM:ERIC B DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= SEK20,305.43 × (1 + 0.43%) ÷ (7.19% – 0.43%) 		SEK302,039.33
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= SEK302,039.33 ÷ (1 + 7.19%)10 		SEK150,893.92
OM:ERIC B Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= SEK132,989.86 + SEK150,893.92 		SEK283,883.78
Equity Value per Share
(SEK)		 = Total value / Shares Outstanding
= SEK283,883.78 / 3,301.13 		SEK86
OM:ERIC B Discount to Share Price
Calculation Result
Value per share (SEK) From above. SEK86.00
Current discount Discount to share price of SEK90.70
= -1 x (SEK90.70 - SEK86.00) / SEK86.00 		-5.5%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Telefonaktiebolaget LM Ericsson is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Telefonaktiebolaget LM Ericsson's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Telefonaktiebolaget LM Ericsson's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
OM:ERIC B PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in SEK SEK-1.02
OM:ERIC B Share Price ** OM (2019-05-17) in SEK SEK90.7
Europe Communications Industry PE Ratio Median Figure of 23 Publicly-Listed Communications Companies 20.59x
Sweden Market PE Ratio Median Figure of 323 Publicly-Listed Companies 16.89x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Telefonaktiebolaget LM Ericsson.

OM:ERIC B PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= OM:ERIC B Share Price ÷ EPS (both in SEK)

= 90.7 ÷ -1.02

 -88.51x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Telefonaktiebolaget LM Ericsson is loss making, we can't compare its value to the Europe Communications industry average.
  • Telefonaktiebolaget LM Ericsson is loss making, we can't compare the value of its earnings to the Sweden market.
Price based on expected Growth
Does Telefonaktiebolaget LM Ericsson's expected growth come at a high price?
Raw Data
OM:ERIC B PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section -88.51x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts		 25.3%per year
Europe Communications Industry PEG Ratio Median Figure of 12 Publicly-Listed Communications Companies 1.7x
Sweden Market PEG Ratio Median Figure of 235 Publicly-Listed Companies 1.36x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for Telefonaktiebolaget LM Ericsson, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Telefonaktiebolaget LM Ericsson's assets?
Raw Data
OM:ERIC B PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in SEK SEK25.63
OM:ERIC B Share Price * OM (2019-05-17) in SEK SEK90.7
Sweden Communications Industry PB Ratio Median Figure of 10 Publicly-Listed Communications Companies 1.78x
Sweden Market PB Ratio Median Figure of 567 Publicly-Listed Companies 2.46x
OM:ERIC B PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= OM:ERIC B Share Price ÷ Book Value per Share (both in SEK)

= 90.7 ÷ 25.63

 3.54x

* Primary Listing of Telefonaktiebolaget LM Ericsson.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Telefonaktiebolaget LM Ericsson is overvalued based on assets compared to the SE Communications industry average.
X
Value checks
We assess Telefonaktiebolaget LM Ericsson's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Communications industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Communications industry average (and greater than 0)? (1 check)
    5. Telefonaktiebolaget LM Ericsson has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

ERIC B Future Performance

 How is Telefonaktiebolaget LM Ericsson expected to perform in the next 1 to 3 years based on estimates from 23 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
25.3%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Telefonaktiebolaget LM Ericsson expected to grow at an attractive rate?
  • Telefonaktiebolaget LM Ericsson's earnings growth is expected to exceed the low risk savings rate of 0.4%.
Growth vs Market Checks
  • Telefonaktiebolaget LM Ericsson's earnings growth is expected to exceed the Sweden market average.
  • Telefonaktiebolaget LM Ericsson's revenue growth is positive but not above the Sweden market average.
Annual Growth Rates Comparison
Raw Data
OM:ERIC B Future Growth Rates Data Sources
Data Point Source Value (per year)
OM:ERIC B Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts 25.3%
OM:ERIC B Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 23 Analysts 2.9%
Sweden Communications Industry Earnings Growth Rate Market Cap Weighted Average 25.6%
Sweden Communications Industry Revenue Growth Rate Market Cap Weighted Average 3%
Sweden Market Earnings Growth Rate Market Cap Weighted Average 8.6%
Sweden Market Revenue Growth Rate Market Cap Weighted Average 4.6%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
OM:ERIC B Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
All numbers in SEK Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
OM:ERIC B Future Estimates Data
Date (Data in SEK Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 240,290 27,588 21,764 2
2022-12-31 242,281 26,246 21,343 3
2021-12-31 231,605 23,776 18,339 12
2020-12-31 222,932 21,473 15,016 23
2019-12-31 217,973 14,574 10,228 23
OM:ERIC B Past Financials Data
Date (Data in SEK Millions) Revenue Cash Flow Net Income *
2019-03-31 216,333 13,534 -3,376
2018-12-31 210,838 9,342 -6,530
2018-09-30 200,835 16,214 -21,083
2018-06-30 196,438 14,156 -27,389
2018-03-31 200,986 12,715 -23,345
2017-12-31 205,378 9,601 -32,576
2017-09-30 212,712 17,854 -15,704
2017-06-30 214,375 15,555 -12,376
2017-03-31 218,202 14,841 -10,318
2016-12-31 220,316 14,010 833
2016-09-30 230,961 16,457 10,376
2016-06-30 239,046 20,334 13,689

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Telefonaktiebolaget LM Ericsson's earnings are expected to grow significantly at over 20% yearly.
  • Telefonaktiebolaget LM Ericsson's revenue is expected to grow by 2.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
OM:ERIC B Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below

All data from Telefonaktiebolaget LM Ericsson Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

OM:ERIC B Future Estimates Data
Date (Data in SEK Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 6.55 6.76 6.34 2.00
2022-12-31 6.43 6.68 6.17 2.00
2021-12-31 5.58 6.47 3.67 9.00
2020-12-31 4.53 5.46 3.18 16.00
2019-12-31 3.02 4.15 1.90 16.00
OM:ERIC B Past Financials Data
Date (Data in SEK Millions) EPS *
2019-03-31 -1.02
2018-12-31 -1.98
2018-09-30 -6.41
2018-06-30 -8.34
2018-03-31 -7.12
2017-12-31 -9.94
2017-09-30 -4.80
2017-06-30 -3.78
2017-03-31 -3.16
2016-12-31 0.26
2016-09-30 3.18
2016-06-30 4.20

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Telefonaktiebolaget LM Ericsson is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
Show me more growth companies in the Communications industry
X
Future performance checks
We assess Telefonaktiebolaget LM Ericsson's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Sweden market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Sweden market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Telefonaktiebolaget LM Ericsson has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

ERIC B Past Performance

  How has Telefonaktiebolaget LM Ericsson performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Telefonaktiebolaget LM Ericsson's growth in the last year to its industry (Communications).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Telefonaktiebolaget LM Ericsson does not make a profit and their year on year earnings growth rate was negative over the past 5 years.
  • Unable to compare Telefonaktiebolaget LM Ericsson's 1-year earnings growth to the 5-year average as it is not currently profitable.
  • Unable to compare Telefonaktiebolaget LM Ericsson's 1-year growth to the Europe Communications industry average as it is not currently profitable.
Earnings and Revenue History
Telefonaktiebolaget LM Ericsson's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Telefonaktiebolaget LM Ericsson Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

OM:ERIC B Past Revenue, Cash Flow and Net Income Data
Date (Data in SEK Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 216,333.00 -3,376.00 27,199.00 37,618.00
2018-12-31 210,838.00 -6,530.00 27,131.00 37,316.00
2018-09-30 200,835.00 -21,083.00 26,704.00 34,687.00
2018-06-30 196,438.00 -27,389.00 26,533.00 34,136.00
2018-03-31 200,986.00 -23,345.00 27,962.00 35,475.00
2017-12-31 205,378.00 -32,576.00 31,675.00 35,580.00
2017-09-30 212,712.00 -15,704.00 31,150.00 32,854.00
2017-06-30 214,375.00 -12,376.00 30,469.00 31,557.00
2017-03-31 218,202.00 -10,318.00 30,630.00 30,520.00
2016-12-31 220,316.00 833.00 27,513.00 28,892.00
2016-09-30 230,961.00 10,376.00 27,552.00 29,153.00
2016-06-30 239,046.00 13,689.00 27,817.00 29,820.00
2016-03-31 245,609.00 14,196.00 28,142.00 31,615.00
2015-12-31 246,920.00 13,549.00 28,521.00 32,823.00
2015-09-30 241,338.00 10,716.00 28,690.00 34,762.00
2015-06-30 239,820.00 10,282.00 28,358.00 35,958.00
2015-03-31 233,998.00 10,767.00 27,556.00 36,184.00
2014-12-31 227,983.00 11,568.00 26,927.00 36,004.00
2014-09-30 227,029.00 13,755.00 25,850.00 35,212.00
2014-06-30 222,367.00 14,030.00 25,592.00 33,669.00
2014-03-31 222,849.00 12,920.00 25,617.00 32,295.00
2013-12-31 227,376.00 12,005.00 25,248.00 31,364.00
2013-09-30 227,280.00 -867.00 25,149.00 31,155.00
2013-06-30 228,849.00 -1,611.00 25,141.00 30,949.00
2013-03-31 228,837.00 -1,970.00 25,379.00 31,309.00
2012-12-31 227,779.00 5,775.00 25,503.00 31,981.00
2012-09-30 224,510.00 13,391.00 25,240.00 32,084.00
2012-06-30 225,478.00 15,035.00 25,211.00 32,353.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • It is difficult to establish if Telefonaktiebolaget LM Ericsson has efficiently used shareholders’ funds last year (Return on Equity greater than 20%) as it is loss-making.
  • It is difficult to establish if Telefonaktiebolaget LM Ericsson has efficiently used its assets last year compared to the Europe Communications industry average (Return on Assets) as it is loss-making.
  • It is difficult to establish if Telefonaktiebolaget LM Ericsson improved its use of capital last year versus 3 years ago (Return on Capital Employed) as it is currently loss-making.
X
Past performance checks
We assess Telefonaktiebolaget LM Ericsson's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Communications industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Telefonaktiebolaget LM Ericsson has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

ERIC B Health

 How is Telefonaktiebolaget LM Ericsson's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Telefonaktiebolaget LM Ericsson's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Telefonaktiebolaget LM Ericsson is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Telefonaktiebolaget LM Ericsson's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Telefonaktiebolaget LM Ericsson's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 3.5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Telefonaktiebolaget LM Ericsson Company Filings, last reported 1 month ago.

OM:ERIC B Past Debt and Equity Data
Date (Data in SEK Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 84,532.00 45,794.00 48,636.00
2018-12-31 87,770.00 33,420.00 45,014.00
2018-09-30 95,953.00 33,650.00 42,649.00
2018-06-30 93,560.00 33,773.00 45,353.00
2018-03-31 93,466.00 33,688.00 42,150.00
2017-12-31 97,571.00 33,282.00 42,597.00
2017-09-30 115,687.00 31,043.00 32,736.00
2017-06-30 123,755.00 30,330.00 32,200.00
2017-03-31 126,841.00 37,337.00 46,502.00
2016-12-31 135,257.00 26,686.00 50,291.00
2016-09-30 134,012.00 27,290.00 43,064.00
2016-06-30 136,691.00 27,817.00 48,777.00
2016-03-31 145,644.00 24,524.00 61,011.00
2015-12-31 147,366.00 25,881.00 66,270.00
2015-09-30 137,984.00 25,785.00 51,547.00
2015-06-30 136,725.00 25,750.00 53,769.00
2015-03-31 149,051.00 26,343.00 66,087.00
2014-12-31 145,309.00 26,198.00 72,159.00
2014-09-30 143,374.00 22,644.00 66,053.00
2014-06-30 137,958.00 23,029.00 68,398.00
2014-03-31 142,633.00 24,637.00 79,875.00
2013-12-31 141,623.00 30,611.00 77,089.00
2013-09-30 133,950.00 25,594.00 60,668.00
2013-06-30 133,866.00 26,489.00 64,814.00
2013-03-31 139,169.00 28,722.00 72,085.00
2012-12-31 138,483.00 30,372.00 76,708.00
2012-09-30 144,542.00 30,106.00 68,821.00
2012-06-30 145,747.00 30,616.00 66,381.00
  • Telefonaktiebolaget LM Ericsson's level of debt (54.2%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (17.3% vs 54.2% today).
  • Debt is well covered by operating cash flow (29.6%, greater than 20% of total debt).
  • Telefonaktiebolaget LM Ericsson is making a loss, therefore interest payments are not well covered by earnings.
X
Financial health checks
We assess Telefonaktiebolaget LM Ericsson's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
    7. Telefonaktiebolaget LM Ericsson has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

ERIC B Dividends

 What is Telefonaktiebolaget LM Ericsson's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.1%
Current annual income from Telefonaktiebolaget LM Ericsson dividends. Estimated to be 1.96% next year.
If you bought SEK2,000 of Telefonaktiebolaget LM Ericsson shares you are expected to receive SEK22 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Telefonaktiebolaget LM Ericsson's pays a lower dividend yield than the bottom 25% of dividend payers in Sweden (1.79%).
  • Telefonaktiebolaget LM Ericsson's dividend is below the markets top 25% of dividend payers in Sweden (4.39%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
OM:ERIC B Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
Europe Communications Industry Average Dividend Yield Market Cap Weighted Average of 10 Stocks 2.8%
Sweden Market Average Dividend Yield Market Cap Weighted Average of 243 Stocks 3.2%
Sweden Minimum Threshold Dividend Yield 10th Percentile 1.1%
Sweden Bottom 25% Dividend Yield 25th Percentile 1.8%
Sweden Top 25% Dividend Yield 75th Percentile 4.4%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

OM:ERIC B Future Dividends Estimate Data
Date (Data in SEK) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 3.48 2.00
2022-12-31 3.20 2.00
2021-12-31 2.18 12.00
2020-12-31 1.61 18.00
2019-12-31 1.28 16.00
OM:ERIC B Past Annualized Dividends Data
Date (Data in SEK) Dividend per share (annual) Avg. Yield (%)
2019-02-20 1.000 1.125
2018-02-21 1.000 1.427
2017-03-28 1.000 1.862
2016-03-10 3.700 6.350
2015-03-06 3.400 3.922
2015-01-27 3.400 3.238
2014-04-11 3.000 3.463
2013-03-06 2.750 3.415
2012-01-25 2.500 3.891
2011-03-03 2.250 2.986
2010-01-25 2.000 2.595

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Telefonaktiebolaget LM Ericsson is not paying a notable dividend for Sweden, therefore no need to check if the payments are stable.
  • Telefonaktiebolaget LM Ericsson is not paying a notable dividend for Sweden, therefore no need to check if the payments are increasing.
Current Payout to shareholders
What portion of Telefonaktiebolaget LM Ericsson's earnings are paid to the shareholders as a dividend.
  • No need to calculate the sustainability of Telefonaktiebolaget LM Ericsson's dividends as it is not paying a notable one for Sweden.
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.6x coverage).
X
Income/ dividend checks
We assess Telefonaktiebolaget LM Ericsson's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Telefonaktiebolaget LM Ericsson afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
    7. Telefonaktiebolaget LM Ericsson has a total score of 1/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

ERIC B Management

 What is the CEO of Telefonaktiebolaget LM Ericsson's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Börje Ekholm
COMPENSATION SEK737,547
AGE 55
TENURE AS CEO 2.3 years
CEO Bio

Mr. Börje E. Ekholm, MSc, MBA has been the Chief Executive Officer and President of Telefonaktiebolaget LM Ericsson (publ) since January 16, 2017. Mr. Ekholm served as the Chief Executive Officer/head of Patricia Industries AB from May 12, 2015 to January 2017. Mr. Ekholm has held a variety of management positions since joining Patricia Industries in 1992. He served as the Chief Executive Officer and President of Investor AB from September 1, 2005 to May 12, 2015. He served as a Member of the Management Group at Investor AB from 1997 to May 12, 2015 and was employed there since 1992. He served as the Head of New Investments at Investor Growth Capital. He served as the Head of New Investments from 1999 to 2005 and an Advisor on private equity investments since January 1998. He served as Deputy Chief Executive Officer at Logica AB. He was also associated with McKinsey & Company, Inc. and AB Electrolux (publ). He has served as an Analyst at Core Holdings and Investor AB. From January 1995 to December 1997, he served as the President at Novare Kapital and as its Chief Executive Officer from 1988 to 1992. He was a Manager of Hycliff LLC. Mr. Ekholm has been the Chairman at Logica AB since 2002. He serves as the Chairman of KTH Kungliga Tekniska Högskolan. He served as the Chairman at Nasdaq, Inc. from December 13, 2012 to December 31, 2016. He served as the Interim Chairman of Nasdaq, Inc. from May 25, 2012 to December 13, 2012. He served as the Chairman of the Board of Biotage AB; and at b-business partners. He served as Vice Chairman of Scania AB (publ) since 2007. He has been a Director of Telefonaktiebolaget LM Ericsson (publ) since April 2006. He served as a Director at AB Chalmersinvest. He has been an Independent Director at Alibaba Group Holding Limited since June 2015. He serves as a Director of Chalmers Innovation AB, Avlis and Avlis Invest. He served as an Independent Director at Trimble Inc. since 2015 until May 2, 2017. He served as a Director at Nasdaq, Inc. since February 17, 2011 until May 10, 2017. Mr. Ekholm served as a Director at Scania from 2007 to May 4, 2012; Greenway Medical Technologies, Inc. and Tessera, Inc., since May 1999. He served as a Director of Tessera Technologies Inc., (now Xperi Corporation) from May 1999 to May 18, 2006 and as its Lead Independent Director from April 2004 to May 18, 2006. He served as a Director at Investor AB from April 2006 to May 12, 2015. He served as a Director of Husqvarna AB (publ) from January 2006 to April 11, 2013. He served as a Director of Lindorff Group AB since February 17, 2011. He served as a Director of EQT Partners AB and WM-data. He is a Member of Board of directors/Trustees of Choate Rosemary Hall. Mr. Ekholm holds an M.B.A. degree from INSEAD, Fontainebleau, France and an M.Sc. in Electrical Engineering from Kungliga Tekniska Hogskolan, Sweden.

CEO Compensation
  • Börje's compensation has been consistent with company performance over the past year.
  • Börje's remuneration is lower than average for companies of similar size in Sweden.
Management Team Tenure

Average tenure and age of the Telefonaktiebolaget LM Ericsson management team in years:

2.3
Average Tenure
54
Average Age
  • The tenure for the Telefonaktiebolaget LM Ericsson management team is about average.
Management Team

Börje Ekholm

TITLE
President
COMPENSATION
SEK738K
AGE
55
TENURE
2.3 yrs

Carl Mellander

TITLE
Senior VP
AGE
54
TENURE
2.1 yrs

Eva-Britt Allenius

TITLE
Chief Accounting Officer

Erik Ekudden

TITLE
Group CTO & SVP and Head of Technology & Architecture
AGE
50
TENURE
1.8 yrs

Peter Nyquist

TITLE
VP & Head of Investor Relations
AGE
53
TENURE
5.7 yrs

Xavier Dedullen

TITLE
Senior VP
AGE
54
TENURE
1.1 yrs

Peter Olofsson

TITLE
Head of Corporate Communications

Helena Norrman

TITLE
SVP, Chief Marketing & Communications Officer and Head of Group Function Marketing & Corp Relations
AGE
48
TENURE
4.5 yrs

MajBritt Arfert

TITLE
Senior VP
AGE
55
TENURE
2.5 yrs

Björn Boström

TITLE
Senior Vice President of Supply & Information Technology
AGE
71
Board of Directors Tenure

Average tenure and age of the Telefonaktiebolaget LM Ericsson board of directors in years:

2.2
Average Tenure
59
Average Age
  • The average tenure for the Telefonaktiebolaget LM Ericsson board of directors is less than 3 years, this suggests a new board.
Board of Directors

Ronnie Leten

TITLE
Chairman of the Board
COMPENSATION
SEK5M
AGE
62
TENURE
1.2 yrs

Börje Ekholm

TITLE
President
COMPENSATION
SEK738K
AGE
55
TENURE
13.1 yrs

Jacob Wallenberg

TITLE
Deputy Chairman
COMPENSATION
SEK2M
AGE
62

Helena Stjernholm

TITLE
Deputy Chairman
COMPENSATION
SEK2M
AGE
48
TENURE
3.1 yrs

Kris Rinne

TITLE
Director
COMPENSATION
SEK1M
AGE
64
TENURE
3.1 yrs

Jon Baksaas

TITLE
Director
COMPENSATION
SEK1M
AGE
64
TENURE
2.2 yrs

Eric Elzvik

TITLE
Director
COMPENSATION
SEK1M
AGE
58
TENURE
2.2 yrs

Kurt Jofs

TITLE
Director
COMPENSATION
SEK1M
AGE
60
TENURE
1.2 yrs

Torbjorn Nyman

TITLE
Employee Representative Director
COMPENSATION
SEK32K
AGE
57
TENURE
1.2 yrs

Roger Svensson

TITLE
Employee Representative Director
COMPENSATION
SEK48K
AGE
47
TENURE
2.2 yrs
Who owns this company?
Recent Insider Trading
  • More shares have been bought than sold by Telefonaktiebolaget LM Ericsson insiders in the past 3 months.
Show me more companies with insider buying in the Communications industry
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (SEK) Value (SEK)
30. Apr 19 Sell Cevian Capital AB Company 24. Apr 19 30. Apr 19 -3,371,442 SEK95.43 SEK-320,726,636
25. Apr 19 Buy Loredana Roslund Individual 18. Apr 19 18. Apr 19 17 SEK94.49 SEK1,602
25. Apr 19 Buy Anders Ripa Individual 18. Apr 19 18. Apr 19 20 SEK94.49 SEK1,889
25. Apr 19 Buy MajBritt Arfert Individual 18. Apr 19 18. Apr 19 228 SEK94.49 SEK21,576
25. Apr 19 Buy Kjell-Åke Soting Individual 18. Apr 19 18. Apr 19 42 SEK94.49 SEK3,948
25. Apr 19 Buy Carl Mellander Individual 18. Apr 19 18. Apr 19 321 SEK94.49 SEK30,360
25. Apr 19 Buy Rafiah Ibrahim Individual 18. Apr 19 18. Apr 19 19 SEK94.49 SEK1,841
25. Apr 19 Buy Lars-Peter Laurin Individual 18. Apr 19 18. Apr 19 48 SEK94.49 SEK4,558
25. Apr 19 Buy Roger Svensson Individual 18. Apr 19 18. Apr 19 138 SEK94.49 SEK13,003
25. Apr 19 Buy Fredrik Jejdling Individual 18. Apr 19 18. Apr 19 143 SEK94.49 SEK13,493
25. Apr 19 Buy Helena Norrman Individual 18. Apr 19 18. Apr 19 396 SEK94.49 SEK37,390
25. Apr 19 Buy Nunzio Mirtillo Individual 18. Apr 19 18. Apr 19 318 SEK94.49 SEK30,003
25. Apr 19 Buy Chris Houghton Individual 18. Apr 19 18. Apr 19 291 SEK94.49 SEK27,525
25. Apr 19 Buy Arun Bansal Individual 18. Apr 19 18. Apr 19 125 SEK94.49 SEK11,780
25. Apr 19 Buy Torbjorn Nyman Individual 18. Apr 19 18. Apr 19 207 SEK94.49 SEK19,595
25. Apr 19 Buy Niklas Heuveldop Individual 18. Apr 19 18. Apr 19 32 SEK94.49 SEK3,026
19. Feb 19 Sell MajBritt Arfert Individual 18. Feb 19 18. Feb 19 -193 SEK86.18 SEK-16,636
19. Feb 19 Sell Peter Laurin Individual 18. Feb 19 18. Feb 19 -828 SEK86.18 SEK-71,380
19. Feb 19 Sell Carl Mellander Individual 18. Feb 19 18. Feb 19 -663 SEK86.18 SEK-57,167
19. Feb 19 Sell Fredrik Jejdling Individual 18. Feb 19 18. Feb 19 -420 SEK86.18 SEK-36,184
19. Feb 19 Sell Helena Norrman Individual 18. Feb 19 18. Feb 19 -643 SEK86.18 SEK-55,452
19. Feb 19 Sell Nunzio Mirtillo Individual 18. Feb 19 18. Feb 19 -524 SEK86.18 SEK-45,161
19. Feb 19 Sell Chris Houghton Individual 18. Feb 19 18. Feb 19 -689 SEK86.18 SEK-59,413
19. Feb 19 Sell Arun Bansal Individual 18. Feb 19 18. Feb 19 -384 SEK86.18 SEK-33,073
31. Jan 19 Sell Peter Laurin Individual 30. Jan 19 30. Jan 19 -1,465 SEK80.64 SEK-118,137
22. Nov 18 Sell Niklas Heuveldop Individual 22. Nov 18 22. Nov 18 -21 SEK73.60 SEK-1,546
21. Nov 18 Sell MajBritt Arfert Individual 19. Nov 18 19. Nov 18 -179 SEK76.98 SEK-13,800
21. Nov 18 Sell Peter Laurin Individual 19. Nov 18 19. Nov 18 -789 SEK76.98 SEK-60,721
21. Nov 18 Sell Carl Mellander Individual 19. Nov 18 19. Nov 18 -616 SEK76.98 SEK-47,422
21. Nov 18 Sell Fredrik Jejdling Individual 19. Nov 18 19. Nov 18 -399 SEK76.98 SEK-30,701
21. Nov 18 Sell Helena Norrman Individual 19. Nov 18 19. Nov 18 -598 SEK76.98 SEK-45,999
21. Nov 18 Sell Nunzio Mirtillo Individual 19. Nov 18 19. Nov 18 -492 SEK76.98 SEK-37,877
21. Nov 18 Sell Chris Houghton Individual 19. Nov 18 19. Nov 18 -427 SEK76.98 SEK-32,857
21. Nov 18 Sell Arun Bansal Individual 19. Nov 18 19. Nov 18 -353 SEK76.98 SEK-27,164
25. Oct 18 Sell Peter Laurin Individual 23. Oct 18 23. Oct 18 -1,571 SEK82.63 SEK-129,813
21. Aug 18 Sell MajBritt Arfert Individual 20. Aug 18 20. Aug 18 -166 SEK72.00 SEK-11,950
21. Aug 18 Sell Peter Laurin Individual 20. Aug 18 20. Aug 18 -942 SEK72.00 SEK-67,854
21. Aug 18 Sell Carl Mellander Individual 20. Aug 18 20. Aug 18 -733 SEK72.00 SEK-52,791
21. Aug 18 Sell Fredrik Jejdling Individual 20. Aug 18 20. Aug 18 -467 SEK72.00 SEK-33,621
21. Aug 18 Sell Helena Norrman Individual 20. Aug 18 20. Aug 18 -711 SEK72.00 SEK-51,208
21. Aug 18 Sell Nunzio Mirtillo Individual 20. Aug 18 20. Aug 18 -468 SEK72.00 SEK-33,694
21. Aug 18 Sell Chris Houghton Individual 20. Aug 18 20. Aug 18 -762 SEK72.00 SEK-54,865
25. Jul 18 Sell Peter Laurin Individual 24. Jul 18 24. Jul 18 -1,901 SEK72.34 SEK-137,496
18. Jul 18 Buy Kjell-Åke Soting Individual 18. Jul 18 18. Jul 18 3,000 SEK71.12 SEK213,360
X
Management checks
We assess Telefonaktiebolaget LM Ericsson's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
    5. Telefonaktiebolaget LM Ericsson has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

ERIC B News

Simply Wall St News

ERIC B Company Info

Description

Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment provides mobile radio access networks, transport solutions, and site solutions, as well as related services, such as network rollout, network tuning, and customer support. The Digital Services segment offers products and services for service providers in the areas of business support systems, operations support systems, cloud core, cloud communication, network functions virtualization, and cloud infrastructure, as well as consulting, learning, and testing services. The Managed Services segment provides vendor agnostic services, including networks and IT managed, application development and modernization, and network design and optimization services to manage service providers networks. The Emerging Business and Other segment consists of emerging businesses; iconectiv that offers software-based interconnection solutions; media solutions; and Red Bee Media, which consists of technology enabled services to manage the play-out platform for broadcasters and content owners. It operates in Europe and Latin America, the Middle East and Africa, North America, North East Asia, South East Asia, Oceania, and India. The company was founded in 1876 and is headquartered in Stockholm, Sweden.

Details
Name: Telefonaktiebolaget LM Ericsson (publ)
ERIC B
Exchange: OM
Founded: 1876
SEK299,334,301,246
3,301,133,716
Website: http://www.ericsson.com
Address: Telefonaktiebolaget LM Ericsson (publ)
Torshamnsgatan 21,
Kista,
Stockholm,
Stockholm County, 164 83,
Sweden
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
OM ERIC B Class B Shares OMX Nordic Exchange Stockholm SE SEK 20. Sep 1990
OTCPK ERIX.F Class B Shares Pink Sheets LLC US USD 20. Sep 1990
DB ERCB Class B Shares Deutsche Boerse AG DE EUR 20. Sep 1990
XTRA ERCB Class B Shares XETRA Trading Platform DE EUR 20. Sep 1990
LSE 0O87 Class B Shares London Stock Exchange GB SEK 20. Sep 1990
SWX ERICB Class B Shares SIX Swiss Exchange CH CHF 20. Sep 1990
HLSE ERIBR Class B Shares OMX Nordic Exchange Helsinki FI EUR 20. Sep 1990
BATS-CHIXE ERICBS Class B Shares BATS 'Chi-X Europe' GB SEK 20. Sep 1990
BATS-CHIXE ERIBRH Class B Shares BATS 'Chi-X Europe' GB EUR 20. Sep 1990
NasdaqGS ERIC ADR EACH REP 1 ORD'B'SEK1 Nasdaq Global Select US USD 14. Dec 1972
OM ERIC A Class A Shares OMX Nordic Exchange Stockholm SE SEK 02. Jan 1992
DB ERCA ADR EACH REP 1 ORD'B'SEK1 Deutsche Boerse AG DE EUR 14. Dec 1972
DB ERCG Class A Shares Deutsche Boerse AG DE EUR 02. Jan 1992
XTRA ERCG Class A Shares XETRA Trading Platform DE EUR 02. Jan 1992
XTRA ERCA ADR EACH REP 1 ORD'B'SEK1 XETRA Trading Platform DE EUR 14. Dec 1972
LSE 0O86 Class A Shares London Stock Exchange GB SEK 02. Jan 1992
BMV ERIC N ADR EACH REP 1 ORD'B'SEK1 Bolsa Mexicana de Valores MX MXN 14. Dec 1972
BATS-CHIXE ERICAS Class A Shares BATS 'Chi-X Europe' GB SEK 02. Jan 1992
Number of employees
Current staff
Staff numbers
94,580
Telefonaktiebolaget LM Ericsson employees.
Industry
Communications Equipment
Tech
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/19 20:44
End of day share price update: 2019/05/17 00:00
Last estimates confirmation: 2019/05/08
Last earnings filing: 2019/04/17
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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