Highlights:
* Global economic slowdown leads to contracting consumer
demand
* Previously announced annual Euro 300 million cost savings on
track
* Initiated additional Euro 180 million annual cost savings
* Joined the Open Handset Alliance and developing new phone
using Android Open Source software
* Successful rollout of Xperia(TM) X1, Cyber-shot(TM)C905 phones
and PlayNow(TM) plus music service
London, UK - The consolidated financial summary for Sony
Ericsson Mobile Communications AB (Sony Ericsson) for the fourth
quarter and full year ended December 31, 2008 is as follows:
Q4 2008 Q3 2008 Q4 2007 FY 2008 FY 2007
Number of units shipped 24.2 25.7 30.8 96.6 103.4
(million)
Sales (Euro m.) 2,914 2,808 3,771 11,244 12,916
Gross margin (%) 15% 22% 32% 22% 31%
Operating income (Euro -262 -33 489 -113 1,544
m.)
Operating margin (%) -9% -1% 13% -1% 12%
Restructuring charges 129 35 - 175 -
(Euro m.)
Operating income excl. -133 2 489 61 1,544
restructuring charges
(Euro m.)
Operating margin excl. -5% 0% 13% 1% 12%
restructuring charges (%)
Income before taxes (IBT) -261 -23 501 -83 1,574
(Euro m.)
IBT excl. -133 12 501 92 1,574
restructuring charges
(Euro m.)
Net income (Euro m.) -187 -25 373 -73 1,114
Average selling price 121 109 123 116 125
(Euro)
Units shipped in the quarter were 24.2 million, a sequential
decrease of 6% and a year-on-year decrease of 21%. Sales for the
quarter were Euro 2,914 million, an increase of 4% sequentially due
to a positive impact of currency fluctuations, and a decrease of
23% compared to Q4 2007. The decline in sales year-on-year was
driven by lower volumes, due to the global economic slowdown that
resulted in contracting consumer demand and decreased availability
of credit.
Gross margin became 15% due to negative impact from exchange
rate fluctuations, restructuring charges and material
write-offs.
Foreign exchange fluctuations had a positive impact on sales in
total, but a large negative impact on costs of goods sold (ie.
costs increased) sequentially, as well as year-on-year.
Income before taxes for the quarter was Euro -133 million,
excluding restructuring charges of Euro 129 million, compared to
the profit of Euro 501 million in Q4 2007. Despite a negative
result in the quarter, Sony Ericsson maintained a healthy balance
sheet with a strong, net cash position of Euro 1,072 million.
The average selling price (ASP) for Sony Ericsson in Q4 2008 was
Euro 121, an increase sequentially but a decrease year-on-year. The
sequential increase of ASP was due to a positive impact of foreign
exchange rate fluctuations and to the sale of a higher proportion
of high-end models. Estimated market share for Q4 2008 is
maintained at around 8%.
"In economic terms, 2008 has been a tumultuous year with world
markets experiencing a serious downturn. The mobile phone market
has been greatly affected by this and as expected, the fourth
quarter continued to be very challenging for Sony Ericsson. Our
business alignment is progressing as planned, with the full effect
of annual savings of around Euro 300 million expected by the second
half of 2009. We foresee a continued deterioration in the market
place in 2009, particularly in the first half," said Dick Komiyama,
President, Sony Ericsson.
The additional cost saving measures initiated by Sony Ericsson
are aimed at reducing operating expenses by a further Euro 180
million annually, with the full effect expected at the end of 2009.
Sony Ericsson currently estimates that the cost for the additional
restructuring activities will be covered by the previously
announced Euro 300 million restructuring charges.
In Q4 2008, the successful roll out of the Xperia(TM) X1 and
Cyber-shot(TM)C905; Sony Ericsson's first eight mega pixel phone as
well as the PlayNow(TM) plus music service positively impacted the
business. In the same quarter, Sony Ericsson announced that it
joined the Open Handset Alliance and is currently developing a new
phone that uses the Android Open Source software.
Earlier in 2008, Sony Ericsson announced that it became a
founding member of the Symbian Foundation; an initiative will
create an open mobile software platform based on Symbian OS.
Sony Ericsson estimates the 2008 global handset market as being
around 1,190 million units or around 6% growth from 2007, compared
to the company's previous forecast of around 10%. Sony Ericsson
forecasts that the global handset market will contract in 2009 and
that the industry ASP will continue to decline.
Cyber-shot(TM) is a trademark of the Sony Corporation.
The Liquid Identity logo, Xperia(TM) and the Xperia(TM) logo and
PlayNow(TM)plus are trademarks or registered trademarks of Sony
Ericsson Mobile Communications AB.
Sony is a trademark or registered trademark of Sony Corporation.
Ericsson is the trademark or registered trademark of
Telefonaktiebolaget LM Ericsson.
Other product and company names mentioned herein may be the
trademarks of their respective owners. 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
- ENDS -
Sony Ericsson is a top, global industry player with sales of
around 97 million phones in 2008. Diversity is one of the core
strengths of the company, with operations in over 80 countries
including manufacturing in China and R&D sites in China,
Europe, India, Japan and North America. Sony Ericsson was
established as a 50:50 joint venture by Sony and Ericsson in
October 2001, with global corporate functions located in London.
For more information about Sony Ericsson please visit
www.sonyericsson.com
CONTACTS:
Investors / Analysts
Ericsson Investor Relations
Gary Pinkham (Stockholm) +46 10 719 0858
Susanne Andersson (Stockholm) + 46 10 719 4631
Sony Investor Relations
Shinji Tomita (London) +44 20 7426 8696
Gen Tsuchikawa (Tokyo) +81 3 6748 2180
Press / Media
Sony Ericsson Global Communications and PR
Aldo Liguori (London) +44 20 8762 5860
Merran Wrigley (London) +44 20 8762 5862
Simone Bresi-Ando (London) +44 20 8762 5863
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 2008 2007 Change
Net sales 2,914 3,771 -23%
Cost of sales -2,476 -2,573 -4%
Gross profit 438 1,198 -63%
Gross margin % 15.0% 31.8% -17%
Research and development expenses -359 -349 3%
Selling and administrative expenses -366 -375 -2%
Operating expenses -725 -724 0%
Other operating income, net 24 15 62%
Operating income -262 489 -154%
Operating margin % -9.0% 13.0% -22%
Financial income 28 19 47%
Financial expenses -27 -7 287%
Income after financial items -261 501 -152%
Taxes 81 -118 -169%
Minority interest -7 -10 -28%
Net income -187 373 -150%
Number of units shipped (million) 24.2 30.8 -21%
ASP (EUR) 121 123 -2%
EUR Million Oct-Dec
Restructuring charges 2008
Cost of sales 67
Research and development expenses 35
Sales and administrative expenses 24
Other operating income, net 3
Total 129
Sony Ericsson
CONSOLIDATED INCOME STATEMENT
Jan-Dec
EUR million 2008 2007 Change
Net sales 11,244 12,916 -13%
Cost of sales -8,750 -8,958 -2%
Gross profit 2,494 3,958 -37%
Gross margin % 22.2% 30.6% -8%
Research and development expenses -1,379 -1,173 18%
Selling and administrative expenses -1,249 -1,260 -1%
Operating expenses -2,628 -2,432 8%
Other operating income, net 21 18 19%
Operating income -113 1,544 -107%
Operating margin % -1.0% 11.9% -13%
Financial income 101 62 64%
Financial expenses -71 -32 122%
Income after financial items -83 1,574 -105%
Taxes 31 -423 -107%
Minority interest -21 -36 -42%
Net income -73 1,114 -107%
Number of units shipped (million) 96.6 103.4 -7%
ASP (EUR) 116 125 -7%
EUR Million Jan-Dec
Restructuring charges 2008
Cost of sales 75
Research and development expenses 62
Sales and administrative expenses 29
Other operating income, net 9
Total 175
Sony Ericsson
CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS
2008 2007
EUR million Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net sales 2,914 2,808 2,820 2,702 3,771 3,108 3,112 2,925
Cost of sales -2,476 -2,192 -2,168 -1,914 -2,573 -2,154 -2,192 -2,039
Gross profit 438 616 653 788 1,198 954 921 886
Gross margin % 15.0% 21.9% 23.1% 29.2% 31.8% 30.7% 29.6% 30.3%
Research and
development
expenses -359 -337 -344 -339 -349 -280 -283 -261
Selling and
administrative
expenses -366 -303 -310 -270 -375 -280 -321 -284
Operating
expenses -725 -640 -653 -610 -724 -560 -604 -545
Other
operating
income, net 24 -8 -2 6 15 -1 -2 5
Operating
income -262 -33 -2 184 489 393 315 346
Operating
margin % -9.0% -1.2% -0.1% 6.8% 13.0% 12.7% 10.1% 11.8%
Financial
income 28 25 25 24 19 7 18 18
Financial
expenses -27 -15 -14 -15 -7 -16 -6 -2
Income after
financial
items -261 -23 8 193 501 384 327 362
Taxes 81 6 0 -57 -118 -109 -97 -100
Minority
interest -7 -8 -3 -3 -10 -8 -10 -9
Net income -187 -25 6 133 373 267 220 254
Number of
units shipped
(million) 24.2 25.7 24.4 22.3 30.8 25.9 24.9 21.8
ASP (EUR) 121 109 116 121 123 120 125 134
EUR Million 2008 *
Restructuring
charges Q4 Q3 Q2
Cost of
sales 67 0 8
Research and
development
expenses 35 26 2
Sales and
administrative
expenses 24 3 1
Other
operating
income, net 3 6 0
Total 129 35 11
* Restructuring charges were not incurred in the first quarter of
2008.
Sony Ericsson
CONSOLIDATED BALANCE SHEET
Dec 31 Sep 30 Jun 30 Dec 31
EUR million 2008 2008 2008 2007
ASSETS
Total fixed and financial
assets 590 649 590 572
Current assets
Inventories 531 717 538 437
Accounts receivables 1,629 1,815 1,905 1,870
Other assets 585 527 511 345
Other short-term cash
investments 707 918 966 1,431
Cash and bank 418 555 624 724
Total current assets 3,870 4,532 4,544 4,808
Total assets 4,460 5,180 5,134 5,380
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity 1,217 1,429 1,684 2,026
Minority interest 57 50 35 64
Total equity 1,274 1,480 1,719 2,090
Total long-term liabilities 30 39 25 26
Accounts payable 990 1,453 1,436 1,263
Other current liabilities 2,166 2,208 1,954 2,001
Total current liabilities 3,156 3,661 3,390 3,264
Total shareholders' equity and
liabilities 4,460 5,180 5,134 5,380
Net cash* 1,072 1,374 1,591 2,155
* 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 2008 2007
OPERATIONS
Net income -187 373
Adjustments to reconcile net income to cash 37 17
-150 390
Changes in operating net assets -168 44
Cash flow from operating activities -318 434
INVESTMENTS
Investing activities 41 -27
Cash flow from investing activities 41 -27
FINANCING
Financing activities -46 0
Cash flow from financing activities -46 0
Net change in cash -323 408
Cash, beginning of period 1,473 1,758
Translation difference in Cash -25 -10
Cash, end of period 1,125 2,155
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS
Jan-Dec
EUR million 2008 2007
OPERATIONS
Net income -73 1,114
Adjustments to reconcile net income to cash 146 107
73 1,221
Changes in operating net assets -323 -305
Cash flow from operating activities -250 916
INVESTMENTS
Investing activities -64 -164
Cash flow from investing activities -64 -164
FINANCING
Financing activities -754 -849
Cash flow from financing activities -754 -849
Net change in cash -1,068 -97
Cash, beginning of period 2,155 2,273
Translation difference in Cash 37 -21
Cash, end of period 1,125 2,155
Sony Ericsson
CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS
2008 2007
EUR million Oct-Dec Jul-Sep Apr-Jun Jan-Mar Oct-Dec Jul-Sep Apr-Jun Jan-Mar
OPERATIONS
Net income -187 -25 6 133 373 267 220 254
Adjustments
to
reconcile
net income
to cash 37 39 40 31 17 32 30 28
-150 15 46 164 390 299 250 282
Changes in
operating
net assets -168 88 -142 -101 44 88 16 -454
Cash flow
from
operating
activities -318 102 -96 64 434 387 266 -172
INVESTMENTS
Investing
activities 41 -55 -29 -22 -27 -53 -31 -53
Cash flow
from
investing
activities 41 -55 -29 -22 -27 -53 -31 -53
FINANCING
Financing
activities -46 -238 -8 -462 0 -300 -548 -1
Cash flow
from
financing
activities -46 -238 -8 -462 0 -300 -548 -1
Net change
in cash -323 -191 -133 -421 408 34 -312 -226
Cash,
beginning
of period 1,473 1,591 1,711 2,155 1,758 1,730 2,045 2,273
Translation
difference
in Cash -25 74 13 -24 -10 -6 -3 -2
Cash, end
of period 1,125 1,473 1,591 1,711 2,155 1,758 1,730 2,045
Sony Ericsson
NET SALES BY MARKET AREA BY QUARTER
EUR million
2008 2007
Isolated quarters Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle
East & Africa * 1,642 1,427 1,386 1,494 2,251 1,715 1,729 1,598
Americas 636 703 740 486 636 573 499 365
Asia 636 678 694 722 884 820 885 961
Total 2,914 2,808 2,820 2,702 3,771 3,108 3,112 2,925
* of which
Western Europe 1,117 947 900 979 1,569 1,103 1,102 1,078
2008 2007
Sequential change
(%) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle
East & Africa * 15% 3% -7% -34% 31% -1% 8% -26%
Americas -10% -5% 52% -24% 11% 15% 37% -34%
Asia -6% -2% -4% -18% 8% -7% -8% -11%
Total 4% 0% 4% -28% 21% 0% 6% -23%
* of which
Western Europe 18% 5% -8% -38% 42% 0% 2% -27%
2008 2007
Year over year
change (%) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Europe, Middle
East & Africa * -27% -17% -20% -7% 5% 7% 59% 55%
Americas 0% 23% 48% 33% 15% 37% 52% 46%
Asia -28% -17% -21% -25% -18% -8% 4% 35%
Total -23% -10% -9% -8% 0% 7% 37% 47%
* of which
Western Europe -29% -14% -18% -9% 6% -1% 47% 60%
2008 2007
Year to date 0812 0809 0806 0803 0712 0709 0706 0703
Europe, Middle
East & Africa * 5,966 4,324 2,879 1,494 7,293 5,042 3,328 1,598
Americas 2,566 1,930 1,226 486 2,072 1,436 864 365
Asia 2,712 2,076 1,416 722 3,550 2,666 1,846 961
Total 11,244 8,330 5,522 2,702 12,916 9,145 6,037 2,925
* of which
Western Europe 3,943 2,826 1,879 979 4,852 3,283 2,179 1,078
2008 2007
YTD year over
year change (%) 0812 0809 0806 0803 0712 0709 0706 0703
Europe, Middle
East & Africa * -18% -14% -13% -7% 24% 36% 57% 55%
Americas 24% 34% 42% 33% 34% 44% 49% 46%
Asia -24% -22% -23% -25% 0% 8% 18% 35%
Total -13% -9% -9% -8% 18% 27% 42% 47%
* of which
Western Europe -19% -14% -14% -9% 21% 29% 53% 60%
The full report (including tables) can be downloaded from the
following link:
Fourth quarter and full year 2008:
http://hugin.info/1061/R/1282700/287034.pdf
This announcement was originally distributed by Hugin. The
issuer is solely responsible for the content of this
announcement.
Copyright � Hugin AS 2009. All rights reserved.
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