April 25, 2017, 07:29 (CEST)

FIRST QUARTER HIGHLIGHTS

• Reported sales decreased by -11% YoY. Sales, adjusted for currency, decreased -16% YoY partly due to lower IPR licensing revenues which amounted to SEK 2.0 (3.8) b.
• Provisions and adjustments related to certain customer contracts of SEK -8.4 b., asset write-downs of SEK -3.3 b. and restructuring charges of SEK -1.7 b. were made in the quarter, in line with the announcement on March 28, 2017.
• Gross margin was 13.9%. Adjusted¹⁾ gross margin declined to 30.5% (33.9%) mainly due to lower IPR licensing revenues.
• Operating income was SEK -12.3 b. Adjusted¹⁾ operating income declined to SEK 1.1 (4.1) b. due to lower sales and lower gross margin.
• Networks operating margin was -2%. Networks adjusted¹⁾ operating margin was solid at 12%, despite lower sales including reduced IPR licensing revenues.
• IT & Cloud operating income was SEK -9.0 b. Adjusted¹⁾ operating income for IT & Cloud showed a significant negative development YoY with increased losses. Actions have been initiated to improve performance.
• Media operating income was SEK -2.8 b. Adjusted¹⁾ operating income was significantly reduced YoY. Strategic opportunities are being explored.
• Cash flow from operating activities was SEK -1.5 (-2.4) b.

1) Restructuring, write-down of assets as well as provisions and adjustments related to certain customer projects had a significant negative impact on the reported Q1 2017 result. Numbers excluding these items are referred to in the text as "adjusted", please see page 3 for reconciliation.

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