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Hans Vestberg at Ericsson AGM: "Transformation creates sustainable value"
Speaking at the Ericsson (NASDAQ: ERIC) Annual General Meeting (AGM), President and CEO Hans Vestberg summarized the company's Networked Society strategy and reviewed its financial performance in 2015.
Vestberg explained that broadband, mobility and cloud are reshaping value chains, digitalizing business models and creating new possibilities in every industry. Ericsson's strategy aims to secure the company's relevance as this transformation accelerates.
Vestberg said: "Just like our industry and our customers, Ericsson is on a transformation journey. Our Networked Society strategy requires us to excel in our core business and establish a leadership position in targeted areas."
"By executing on this strategy, we will continue to lead our industry and create new opportunities for growth."
Ericsson's core business consists of radio, core and transmission networks, and telecommunications services. Targeted areas include Cloud, IP networks, TV & Media, OSS/BSS, and Industry & Society, which represent new customer segments outside the telecommunications operator domain.
In 2015, sales in targeted areas grew 20 percent year-on-year, accounting for 18 percent of Ericsson's total sales in the year.
Overall, Ericsson's net sales increased 8 percent to SEK 246.9 billion. Operating income rose 30 percent to SEK 21.8 billion, while cash flow was up 10 percent to SEK 20.6 billion.
In conjunction with the AGM, Ericsson published its 23 annual Sustainability and Corporate Responsibility Report, which details the company's performance in 2015 in three areas: responsible business; energy, environment and climate change; and communication for all.
The report shows that by the end of 2015, 20 million people had been directly impacted by Ericsson's Technology for Good initiatives , such as the Connect To Learn program that uses ICT to improve access to quality secondary education for over 76,000 students in 22 countries.
It also highlights how ICT can accelerate achievement of the United Nations Sustainable Development Goals - for example, mobile money services can reduce inequalities and enable financial inclusion.
Elaine Weidman-Grunewald, Vice President, Sustainability and Corporate Responsibility, Ericsson, said: "By embedding sustainability and corporate responsibility into our business, we have a strong platform for progress and positive impacts. We will continue to work in public-private partnership and advocate Technology for Good to drive change for the better."
Sara Mazur, Head of Ericsson Research, highlighted the role of innovation as the foundation of Ericsson's technology and services leadership. In 2015, the company invested SEK 32.8 billion in research and development, and today has an industry-leading portfolio of 39,000 patents.
She explained that Ericsson is leading the way toward 5G - the company has 21 contracts with operators around the world, a 5G test-bed that demonstrates speeds over 25 Gbps, and research partnerships that combine Ericsson's capabilities with the strengths and insights of customers, industries and academia.
Mazur also presented Ericsson's Inventor of the Year awards. The 2015 winners were John Diachina, Senior Engineer in Architecture and Protocol Design, Karl Norrman, Master Researcher in Security and Magnus Stattin, Master Researcher in Wireless Access Networks, who together hold more than 250 patents.
Vestberg closed the presentation with three priorities for 2016:
Vestberg concluded: "ICT opens up new possibilities for people, business and society - and the pace of change will never be as slow as it is today. This year, we celebrate Ericsson's 140 anniversary, and we are transforming in order to continue leading the industry and to create sustainable value for our shareholders, customers, employees and society."
NOTES TO EDITORS
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