===== SIDA 1 ===== 1 Ericsson | First quarter report 2023 First quarter report 2023 Stockholm, April 18, 2023 First quarter highlights – Executing in a challenging market - Group organic sales1 were unchanged YoY. As expected, segment Networks organic sales1 declined by -2%, driven by lower operator capex and inventory optimization among multiple customers. The decline was offset by growth in other business segments. Reported sales increased to SEK 62.6 (55.1) b. - Gross income excluding restructuring charges increased to SEK 24.9 (23.3) b. mainly driven by Enterprise as well as Cloud Software and Services. Reported gross income was SEK 24.2 (23.3) b. - Gross margin excluding restructuring charges was 39.8% (42.3%) primarily impacted by changed business mix in Networks. Reported gross margin was 38.6% (42.3%). - EBITA excluding restructuring charges amounted to SEK 4.8 (5.0) b. EBITA was SEK 3.8 (4.9) b. - Net income was SEK 1.6 (2.9) b. EPS diluted was SEK 0.45 (0.88). - Free cash flow before M&A was SEK -8.0 (-1.7) b. Cash flow was impacted by an increase in working capital. Net cash on March 31, 2023, was SEK 13.6 b. compared with SEK 23.3 b. on December 31, 2022. 1 Sales adjusted for comparable units and currency 2 Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. SEK b. Q1 2023 Q1 2022 YoY change Q4 2022 QoQ change Net sales 62.6 55.1 14% 86.0 -27%  Sal es gr owth adj. for comparable units and currency ² - - 0% - - Gross margin ² 38.6% 42.3% - 41.4% - EBI T 3.0 4.7 -36% 7.9 -61% EBIT margin ² 4.9% 8.6% - 9.1% - EBI TA ² 3.8 4.9 -22% 9.0 -57% EBITA margin ² 6.2% 9.0% - 10.5% - Net income 1.6 2.9 -46% 6.2 -75% EPS diluted, SEK 0.45 0.88 -49% 1.82 -75% Measures excl. restructuring charges ² Gross margin excluding restructuring charges 39.8% 42.3% - 41.5% - EBIT excluding restructuring charges 4.0 4.8 -16% 8.1 -50% EBIT margin excluding restructuring charges 6.4% 8.7% - 9.4% - EBITA excluding restructuring charges 4.8 5.0 -3% 9.3 -48% EBITA margin excluding restructuring charges 7.7% 9.1% - 10.8% - Free cash flow before M&A -8.0 -1.7 - 16.9 - Net cash, end of period 13.6 65.2 -79% 23.3 -42% ===== SIDA 2 ===== 2 Ericsson | First quarter report 2023 CEO comments CEO comments We are on a journey to shape the future industry landscape and extend our addressable market by leveraging our 5G capabilities. We continue to execute on our strategy to strengthen our leadership in Mobile Networks, grow our enterprise business, and drive continued cultural transformation. Q1 in line with expectations Group organic sales1 were flat, as the expected decline in Networks was offset by growth in other business segments, including a 19% organic growth1 in Enterprise. EBITA excluding restructuring charges was SEK 4.8 (5.0) b. Organic sales1 in Networks decreased by -2% YoY. As expected, customers in early 5G markets have slowed the deployment pace somewhat. Our effect on sales is bigger as some customers have also lowered the elevated inventory levels built up in a tight supply environment. We expect this inventory adjustment to be mostly completed during Q2 but may spill into Q3. Significant growth from large roll-out projects did not fully offset the sales impact from early 5G markets. As expected, the increased share of large roll-out projects pressured the gross margin in Networks, however it positions us well for future growth. In Cloud Software and Services, we continued to execute on our turnaround strategy and reduced our loss slightly more than plan. With this progress, we are on track to reaching the important milestone of break-even in 2023. Following the strong cash flow in Q4, the first quarter cash flow was negative. Compared to last year working capital grew related to the changed business mix with the two components: increased customer financing for large roll-out projects in new 5G markets and reduced trade payables. As usual, Q1 cash flow was seasonally impacted by pay-out of accrued employee-related expenses. Cost saving initiatives accelerated and increased Cost efficiency is crucial for our long-term competitiveness. We have accelerated our cost-out execution and have identified additional savings opportunities of SEK 2 b. and now plan to reduce cost run rate by SEK 11 b. by year-end. Our early estimate, given the increased scope and more costly programs in Europe, indicates that restructuring charges may amount to around SEK 7 b. for the full year, of which more than half is likely to be booked in Q2. For 2024, we expect restructuring charges to normalize to about 0.5% of sales. Progress in responsible business and integrity As announced in the quarter, we reached a resolution with the Department of Justice (DOJ) regarding the breaches of the 2019 Deferred Prosecution Agreement (DPA). We reiterate, that these breaches were contractual and non-criminal in nature, and that the DOJ has not identified any new criminal conduct after 2016. The DOJ noted Ericsson’s significant progress in building a compliance program that is fit for purpose and works in practice, validating the positive changes. The resolution is an important step and enables us to focus on strategic execution and cultural change. We continue our efforts to simplify the company, increase accountability and strengthen risk management. We are fully dedicated to embedding integrity into everything we do, and we believe this is a competitive advantage. Driving execution of our strategy Leadership in Mobile Networks based on technology leadership is a top priority. In Networks we introduced many new market leading products at Mobile World Congress (MWC). Cloud Software and Services is focused on executing the turnaround plan. We are capitalizing on our leadership position in Mobile Networks and are building momentum towards our vision of a network API platform. Last year we tested Ericsson Dynamic End-user Boost with SmarTone in Hong Kong. At MWC, we showcased the world’s first multi-operator quality-of-service network API on commercial networks, in cooperation with Telefonica, Orange and Vodafone. This demonstrated how advanced mobile network functionality can be exposed to, and easily consumed by, the global developer community. We are working with front-runner customers to establish the market for network APIs, and we see great interest from early adopters. We anticipate the first revenues late this year, positioning us for revenue ramp-up in 2024 and 2025 as our transformation into a platform company accelerates. It will take some time to build this new network API market, but we believe it can develop faster and grow bigger than the market for traditional communication APIs. With the acquisition of Ericom with its advanced cloud-based security and zero-trust technology, we will accelerate our security offering in Enterprise Wireless Solutions. We now have the capabilities to build a full-stack security service optimized for 5G. A cornerstone in our Enterprise Wireless Solutions is to build a dedicated go-to-market organization which in the short term requires investments. These investments, in combination with the subscription model with deferred revenue, impact reported profitability in the short term. Longer term the business area has an attractive profitability profile. We continue to finetune our portfolio to optimize profitability across our business. By end of Q1, we closed the divestiture of our IoT platform business, which reduces quarterly losses by about SEK 250 m. going forward. This was an important step in improving financial performance in our Enterprise business. Managing choppy 2023 We continue to see a choppy environment during 2023 with poor visibility. In Q2, we expect operators to remain cautious with capex investments and continue to adjust inventories. We expect this dynamic to largely be offset by growth from large roll-out projects which, as noted earlier, will be dilutive to gross margin in the short term. In the Enterprise segment, we remain confident of the long-term growth trajectory, and we expect the slower growth we saw in Q1, caused by the slower global economy, to continue in Q2. For Q2, we expect Group EBITA2 margin to reach mid-single-digit level. We expect a gradual recovery in the second half of 2023, primarily as we expect the inventory adjustments to be completed and our cost reduction activities to start flowing through the P&L. Long-term, previous experience tells us that when operators are seeing underlying traffic growth, this leads to investments in networks in order to avoid deteriorating quality. Our strategy is paying off and we are excited about our position to capitalize on the full value of 5G. We are driving our transformation to a platform company with a focus on creating a stronger and more profitable Ericsson with a larger addressable market. With the expected recovery by 2024 of the Mobile Networks market, the turnaround of Cloud Software and Services, portfolio adjustments, enhanced R&D productivity, increased IPR revenues and cost reductions, we are on track to reaching the lower end of the long-term EBITA2 target range of 15-18% by 2024. Börje Ekholm President and CEO 1 Sales adjusted for comparable units and currency 2 Excluding restructuring charges ===== SIDA 3 ===== 3 Ericsson | First quarter report 2023 Financial highlights Financial highlightsNet sales Segments 1 Sales growth adjusted for comparable units and currency. Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. Net sales Market Areas 1 Sales growth adjusted for comparable units and currency. 2 Market area “Other” includes primarily IPR licensing revenues and a major part of segment Enterprise. Sales breakdown by market area by segment is available at the end of this report. Segments Group sales increased by 14% to SEK 62.6 (55.1) b. Sales adjusted for comparable units and currency were unchanged. Networks sales adjusted for comparable units and currency declined by -2% YoY. Networks sales grew in market area South East Asia, Oceania and India while it declined in the other four market areas. Networks accounted for 68% (74%) of total sales. Cloud Software and Services sales adjusted for comparable units and currency increased by 5% YoY, with sales growth in three of the five market areas. Cloud Software and Services share of total sales was 21% (22%). Enterprise sales adjusted for comparable units and currency increased by 19% YoY driven by Enterprise Wireless Solutions. Enterprise share of total sales was 10% (3%). Global Communications Platform (Vonage) sales were SEK 3.9 b. in the quarter. IPR licensing revenues increased to SEK 2.5 (1.4) b. No significant contracts were signed during Q1. Market Areas Sales adjusted for comparable units and currency increased in market area South East Asia, Oceania and India while sales declined in the other four market areas. In market area South East Asia, Oceania and India, sales adjusted for comparable units and currency increased by 132% YoY primarily driven by 5G market share gains in India as well as timing of project milestones in the Philippines and Malaysia. Reported sales increased by 138% YoY. In market area North America, sales adjusted for comparable units and currency declined by -26% YoY as a result of reduction of customers’ inventory levels and lower capex spend following high investment levels in 2021 and 2022. Reported sales decreased by -18% YoY. In market area Europe and Latin America, sales adjusted for comparable units and currency decreased by -12% YoY. Sales in Europe declined by -16% following high investment levels in 2022, while sales in Latin America increased by 6% mainly driven by 5G deployments. Reported sales declined by -7% YoY. In market area North East Asia, sales adjusted for comparable units and currency declined by -19% YoY as investments declined in several markets after elevated 5G investment levels in 2022. Reported sales declined by -20% YoY. Market area Other primarily includes IPR licensing revenues and almost all sales from segment Enterprise. Sales adjusted for comparable units and currency increased by 28% driven mainly by IPR licensing revenues and Enterprise Wireless Solutions. SEK b. Q1 2023 Q1 2022 YoY change YoY adj.¹ Q4 2022 QoQ change Networks 42.5 40.7 4% -2% 58.6 -28% C loud Software and Services 13.4 12.1 11% 5% 20.2 -34% Enterprise 6.0 1.6 275% 19% 6.3 -5% Ot her 0.7 0.7 4% 0% 0.8 -17% Total 62.6 55.1 14% 0% 86.0 -27% SEK b. Q1 2023 Q1 2022 YoY change YoY adj.¹ Q4 2022 QoQ change South East Asia, Oceania and India 13.9 5.8 138% 132% 11.2 24% North East Asia 4.4 5.4 -20% -19% 8.4 -48% North America 16.9 20.7 -18% -26% 25.3 -33% Europe and Latin America 14.2 15.3 -7% -12% 20.9 -32% Middle East and Africa 4.2 4.3 -3% -8% 7.4 -43% Ot her ² 8.9 3.5 157% 28% 12.8 -30% Total 62.6 55.1 14% 0% 86.0 -27% ===== SIDA 4 ===== 4 Ericsson | First quarter report 2023 Financial highlights Income and margin development 1 Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. Gross income Gross income increased to SEK 24.2 (23.3) b. Gross income excluding restructuring charges increased to SEK 24.9 (23.3) b. driven primarily by Enterprise as well as Cloud Software and Services. Gross margin excluding restructuring charges was 39.8% (42.3%). Networks gross income and gross margin, excluding restructuring charges, decreased mainly due to the changed business mix, partly mitigated by higher IPR revenues and a higher software share in the sales mix. Cloud Software and Services gross income and gross margin, excluding restructuring charges, increased and were supported by higher IPR revenues and a higher software share in the sales mix. Enterprise gross income excluding restructuring charges increased while gross margin excluding restructuring charges decreased as a result of changed business mix after the Vonage consolidation. Research and development (R&D) expenses R&D expenses amounted to SEK -12.0 (-10.7) b. including a negative currency effect of SEK -0.3 b. R&D expenses increased primarily in segment Enterprise through the acquisition of Vonage and increased investments to expand the Enterprise Wireless Solutions portfolio. Selling and administrative (SG&A) expenses SG&A expenses were SEK -9.1 (-6.6) b. including a negative currency effect of SEK -0.3 b. The increase is related to Enterprise where the acquisition of Vonage had an impact of SEK -2.1 b. (of which amortization of intangible assets amounted to SEK -0.7 b.). Furthermore, SG&A expenses increased due to continued investments in the go-to-market organization in Enterprise Wireless Solutions. Other operating income and expenses Other operating income and expenses was SEK 0.0 (-1.1) b. Q1 2022 was negatively impacted by a provision of SEK -0.9 b. due to suspension of business in Russia as well as a negative revaluation of SEK -0.3 b. related to Ericsson Ventures investments. Restructuring charges Restructuring charges amounted to SEK -1.0 (0.0) b. as a result of the ongoing cost-reduction activities. EBITA EBITA decreased to SEK 3.8 (4.9) b. corresponding to an EBITA margin of 6.2% (9.0%). EBITA excluding restructuring charges declined by SEK -0.2 b. YoY to SEK 4.8 b. The increase in gross income was offset by increased investments in R&D and higher SG&A expenses in segment Enterprise, where the consolidation of Vonage constitutes the main part. EBITA margin excluding restructuring charges was 7.7% (9.1%). EBITA margin excluding restructuring charges rolling four quarters was 10.5%. EBIT EBIT decreased to SEK 3.0 (4.7) b. with an EBIT margin of 4.9% (8.6%). EBIT excluding restructuring charges decreased by SEK -0.8 b. to SEK 4.0 b. The result included an increase in amortization of intangible assets by SEK -0.6 b. YoY mainly related to the acquisition of Vonage in 2022. EBIT margin excluding restructuring charges was 6.4% (8.7%). SEK b. Q1 2023 Q1 2022 YoY change Q4 2022 QoQ change Net sales 62.6 55.1 14% 86.0 -27% Gross income 24.2 23.3 4% 35.6 -32% Gross margin 38.6% 42.3% - 41.4% - Research and development (R&D) expenses -12.0 -10.7 - -13.2 - Selling and administrative expenses -9.1 -6.6 - -11.8 - Impairment losses on trade receivables 0.0 -0.2 - 0.1 -149% Other operating income and expenses 0.0 -1.1 - -2.8 - Share in earnings of JV´s and associated companies 0.0 0.0 - 0.0 - EBI T 3.0 4.7 -36% 7.9 -61%  of which Networks 6.0 7.6 -21% 12.5 -52%  of which C loud Software & Services -0.9 -0.8 - 0.7 -  of which Enterprise -1.7 -0.5 - -1.9 -  of which Other -0.3 -1.5 - -3.4 - EBIT margin ¹ 4.9% 8.6% - 9.1% - EBI TA ¹ 3.8 4.9 -22% 9.0 -57% EBITA margin ¹ 6.2% 9.0% - 10.5% Financial income and expenses, net -0.9 -0.6 - -0.5 - Inc ome tax -0.6 -1.2 - -1.2 - Net income 1.6 2.9 -46% 6.2 -75% Restructuring charges -1.0 0.0 - -0.2 - Measures excl. restr. charges and other items affecting comparability ¹ Gross margin excluding restructuring charges 39.8% 42.3% - 41.5% - EBIT excluding restructuring charges 4.0 4.8 -16% 8.1 -50% EBIT margin excluding restructuring charges 6.4% 8.7% - 9.4% - EBITA excluding restructuring charges 4.8 5.0 -3% 9.3 -48% EBITA margin excluding restructuring charges 7.7% 9.1% - 10.8% - ===== SIDA 5 ===== 5 Ericsson | First quarter report 2023 Financial highlights Financial income and expenses, net Financial income and expenses declined to SEK -0.9 (-0.6) b. mainly due to foreign exchange revaluation effects. There was a limited currency hedge effect of SEK 0.0 (-0.2) b. YoY. The USD was stable against the SEK between December 31, 2022 (SEK/USD 10.38) and March 31, 2023 (SEK/USD 10.37). Income tax Taxes were SEK -0.6 (-1.2) b. Effective tax rate in Q1 was 26%. Effective tax rate in Q1 2022 was 29%. Net income Net income declined to SEK 1.6 (2.9) b. The decrease in EBIT was partly offset by lower income tax. EPS diluted decreased to SEK 0.45 (0.88). Employees The number of employees on March 31, 2023, was 104,931 compared with 105,529 on December 31, 2022. ===== SIDA 6 ===== 6 Ericsson | First quarter report 2023 Segment results Segment results Mobile Networks – Segment Networks Breakdown of sales into products, services and IPR licensing is available in note 3. Net sales Sales adjusted for comparable units and currency decreased by -2% YoY, primarily driven by a -30% sales drop in North America with operators adjusting their inventories as well as reducing their capex spend. Sales in market area South East Asia, Oceania and India increased by 184%, primarily as a result of market share gains in India as well as timing of project milestones in the Philippines and Malaysia. Reported sales increased by 4%. Uncertainty regarding 2023 remains, with lower investment activities in several markets and some customers guiding for lower capex in light of macroeconomic headwinds. Sales in Q2 are expected to be in line with Q1. Increased rollout pace in large scale projects, such as in India, is being offset by more cautious investment levels in other markets. Gross income Gross income decreased by SEK -1.3 b. to SEK 16.9 b. with a gross margin of 39.7% (44.7%). Gross income excluding restructuring charges decreased to SEK 17.2 (18.2) b. Gross margin excluding restructuring charges decreased to 40.6% (44.8%) impacted by a business mix shift, with a slowdown in 5G front-runner markets and large deployments, with an initial dilutive effect, in other geographies. However, these market share gains are contributing to gross income and building a more diversified revenue base. The increase in IPR licensing revenues and a higher share of software in the sales mix had a positive impact on the margin YoY. The supply chain performance continues to support business demand. Work continues to address increasing geopolitical requirements and changes in demand. These actions are negatively impacting gross margin. The business mix shift, resulting from market share gains, will continue during the first half of 2023 and the impact of the business mix is anticipated to be more pronounced in Q2. Combined, the above factors are expected to result in a Networks gross margin excluding restructuring charges in the range of 37-39% in Q2. EBIT and EBITA EBIT and EBITA declined to SEK 6.0 (7.6) b. YoY with an EBIT and EBITA margin of 14.2% (18.7%). EBIT and EBITA excluding restructuring charges amounted to SEK 6.4 (7.6) b. due to lower gross income and higher operating expenses, primarily as a result of a negative currency impact. The EBIT margin excluding restructuring charges declined to 15.1% (18.7%). EBITA margin excluding restructuring charges was 15.2% (18.8%). Net sales rolling four quarters were SEK 195.2 b. and the EBITA margin excluding restructuring charges rolling four quarters was 19.3%. Mobile Networks – Segment Cloud Software and Services Breakdown of sales into products, services and IPR licensing is available in note 3. - Sales increased by 5% adjusted for comparable units and currency. - EBITA (loss) excl. restructuring charges improved YoY to SEK -0.4 (-0.8) b. - Target to reach break-even for full-year 2023. Net sales Sales adjusted for comparable units and currency increased by 5% YoY with growth in market areas North America, South East Asia, Oceania and India as well as North East Asia. Reported sales increased by 11% YoY. It is expected that the positive seasonality between Q1 and Q2 will be somewhat less than normal in Q2 due to macroeconomic uncertainty impacting customers’ investment levels. Gross income Gross income increased by SEK 0.2 b. to SEK 4.5 b with a gross margin of 33.4% (35.0%). Gross income excluding restructuring charges was SEK 4.8 (4.2) b. while gross margin increased to 36.1% (35.0%). Gross margin was supported by increased IPR licensing revenues and a higher share of software in the sales mix. EBIT (loss) and EBITA (loss) EBIT and EBITA were SEK -0.9 (-0.8) b. with an EBIT margin of -7.0% (-6.9%) and an EBITA margin of -6.9% (-6.5%). EBIT and EBITA excluding restructuring charges were SEK -0.4 (-0.8) b. with an EBIT margin excluding restructuring charges of -3.3% (-6.7%) and an EBITA margin excluding restructuring charges of -3.2% (-6.3%). The increase in gross income was partly offset by higher operating expenses, primarily driven by a negative currency impact of SEK -0.2 b. The target for Cloud Software and Services is to reach break-even for full-year 2023. Strategy execution continues, by limiting subscale software development, accelerating automation to reduce deployment and maintenance efforts, and changing focus from market share gains to profitable business. Results will vary between quarters. Net sales rolling four quarters were SEK 61.8 b. and the EBITA margin excluding restructuring charges rolling four quarters was -1.8%. SEK b. Q1 2023 Q1 2022 YoY change Q4 2022 Net sales 42.5 40.7 4% 58.6   Of which IPR licensing revenues 2.0 1.1 79% 4.9  Sal es gr owth adj. for comparable units and FX - - -2% - Gross income 16.9 18.2 -7% 26.1 Gross margin 39.7%44.7% - 44.4% EBI T 6.0 7.6 -21% 12.5 EBIT margin 14.2%18.7% - 21.2% EBI TA 6.0 7.6 -21% 12.6 EBITA margin 14.2%18.7% - 21.4% Restructuring charges -0.4 0.0 - -0.1 Measures excl. restructuring charges Gross margin excl. restructuring charges 40.6%44.8% - 44.6% EBIT excl. restructuring charges 6.4 7.6 -16% 12.5 EBIT margin excl. restructuring charges 15.1%18.7% - 21.4% EBITA excluding restructuring charges 6.4 7.6 -16% 12.6 EBITA margin excl. restructuring charges 15.2%18.8% - 21.5% SEK b. Q1 2023 Q1 2022 YoY change Q4 2022 Net sales 13.4 12.1 11% 20.2   Of which IPR licensing revenues 0.4 0.3 79% 1.1  Sal es gr owth adj. for comparable units and FX - - 5% - Gross income 4.5 4.2 6% 6.7 Gross margin 33.4%35.0% - 33.0% EBIT (loss) -0.9 -0.8 - 0.7 EBIT margin -7.0%-6.9% - 3.3% EBITA (loss) -0.9 -0.8 - 0.7 EBITA margin -6.9%-6.5% - 3.4% Restructuring charges -0.5 0.0 - 0.0 Measures excl. restructuring charges Gross margin excl. restructuring charges 36.1%35.0% - 33.0% EBIT (loss) excl. restructuring charges -0.4 -0.8 - 0.7 EBIT margin excl. restructuring charges -3.3%-6.7% - 3.4% EBITA (loss) excluding restructuring charges-0.4 -0.8 - 0.7 EBITA margin excl. restructuring charges -3.2%-6.3% - 3.5% - Strong development in India, offset by lower sales in other markets. - Leading market position through an attractive and competitive product portfolio. - Around 50% of the world's mobile 5G traffic, outside Mainland China, is carried over Ericsson's radio networks. ===== SIDA 7 ===== 7 Ericsson | First quarter report 2023 Segment results Enterprise – Segment Enterprise 1Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. 2Common costs are included at segment level only (not distributed within the segment). - Reported sales growth driven by the Vonage acquisition. - Organic sales growth driven by Enterprise Wireless Solutions. - Increase in gross income excl. restructuring charges to SEK 2.9 b. - Global Communications Platform was EBITA break-even. Net sales Reported sales were SEK 6.0 (1.6) b., which is an increase of SEK 4.4 b. YoY, driven primarily by Global Communications Platform (the consolidation of Vonage) which contributed SEK 3.9 b. Sales, adjusted for comparable units and currency increased by 19%, driven by Enterprise Wireless Solutions. Vonage was not consolidated in Q1 2022, however when comparing the pre- and post-acquisition figures, the Vonage Communications Platform (VCP) sales grew by 14% in USD YoY, whilst the sales growth from the current communications API offering was almost twice this level. Investments continue in line with the strategic imperative to build the Global Network Platform. Gross income Gross income was SEK 2.8 (0.9) b. with a gross margin of 47.4% (55.2%). Gross income excluding restructuring charges was SEK 2.9 (0.9) b. driven mainly by the Vonage acquisition and Enterprise Wireless Solutions. Gross margin excluding restructuring charges declined to 47.6% (55.2%) due to the consolidation of Vonage with lower gross margin than the remaining part of the Enterprise segment. EBITA (loss) EBITA (loss) was SEK -0.9 (-0.4) b. EBITA (loss) excluding restructuring charges was SEK -0.9 (-0.4) b., where the decline was mainly driven by Enterprise Wireless Solutions, due to increased growth investments. In addition, operating expenses were higher due to the consolidation of all costs for Private Cellular Networks (Dedicated Networks), previously reported in other segments. Technologies and New Businesses reported a positive EBITA. The segment’s operating expenses were impacted by a negative currency effect. EBITA margin excluding restructuring charges was -14.3% (-25.8%). EBIT (loss) EBIT (loss) was SEK -1.7 (-0.5) b. EBIT (loss) excluding restructuring charges was SEK -1.6 (-0.5) b. impacted by amortization of intangible assets of SEK -0.8 b., from acquired businesses. Cradlepoint subscription model drives enhanced cash position and higher margins; however, a large part of the revenue is deferred and is recognized monthly during the 3 years, on average, of the subscription period. This leads to a negative impact on EBITA as a large part of the gross income is deferred while most of the operating expenses and investments are expensed. Segment Other 1Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. Net sales Sales adjusted for comparable units and currency were stable YoY. Reported sales increased by 4% YoY. Sales increase in the media business was offset by a decline in IoT sales. Gross income Gross income and gross income excluding restructuring charges were both SEK 0.0 (0.0) b. with a gross margin of -2.6% (-5.7%). The margin increased mainly driven by improvements in the media business. EBITA (loss) EBITA (loss) and EBITA (loss) excluding restructuring charges were both SEK -0.3 (-1.5) b. EBITA margin was -46.3% (-224.6%). EBITA margin excluding restructuring charges was -48.2% (-223.8%). EBITA in Q1 2022 was negatively impacted by SEK -1.2 b. due to a provision related to suspension of business in Russia (SEK -0.9 b) and a revaluation of Ericsson Ventures investments (SEK -0.3 b). EBIT (loss) EBIT (loss) and EBIT (loss) excluding restructuring charges were both SEK -0.3 (-1.5) b. EBIT margin was -46.3% (-224.6%). EBIT margin excluding restructuring charges was -48.2% (-223.8%). SEK b. Q1 2023 Q1 2022 YoY change Q4 2022¹ Net sales 6.0 1.6 275% 6.3  Of whi ch Global Comms Platfor m (Vonage) 3.9 - - 4.1  Of which Enterprise Wireless Solutions 0.8 0.5 60% 0.9  Sal es gr owth adj. for comparable units and FX - - 19% - Gross income 2.8 0.9 222% 2.9 Gross margin 47.4%55.2% - 45.7% EBIT (loss) -1.7 -0.5 - -1.9 EBIT margin -28.6%-33.2% - -30.0% EBITA (loss) -0.9 -0.4 - -0.8 EBITA margin -15.8%-25.9% - -13.2% Restructuring charges -0.1 0.0 - -0.1 Measures excl. restructuring charges Gross margin excl. restructuring charges 47.6%55.2% - 45.7%  Gl obal Comms Pl at for m (Vonage) 43.5% - - 42.9%  Enterprise Wireless Solutions 56.7% 56.9% - 56.6% EBI T (loss) excl. restructuring charges ² -1.6 -0.5 - -1.8 EBIT margin excl. restructuring charges ² -27.1%-33.1% - -29.0% EBI TA (loss) excluding restructuring charges ² -0.9 -0.4 - -0.8  Of whi ch Global Comms Platfor m (Vonage) 0.0 - - -0.1  Of which Enterprise Wireless Solutions -0.8 -0.5 - -0.7 EBITA margin excl. restructuring charges ² -14.3%-25.8% - -12.2% SEK b. Q1 2023 Q1 2022 YoY change Q4 2022¹ Net sales 0.7 0.7 4% 0.8  Sal es gr owth adj. for comparable units and FX - - 0% - Gross income 0.0 0.0 - 0.0 Gross margin -2.6%-5.7% - -4.3% EBIT (loss) -0.3 -1.5 - -3.4 EBIT margin -46.3%-224.6% --407.2% EBITA (loss) -0.3 -1.5 - -3.4 EBITA margin -46.3%-224.6% --406.0% Restructuring charges 0.0 0.0 - -0.1 Measures excl. restructuring charges Gross margin excl. restructuring charges -2.6%-5.7% - -1.0% EBIT (loss) excl. restructuring charges -0.3 -1.5 - -3.3 EBIT margin excl. restructuring charges -48.2%-223.8% --396.7% EBITA (loss) excluding restructuring charges-0.3 -1.5 - -3.3 EBITA margin excl. restructuring charges-48.2%-223.8% --395.5% ===== SIDA 8 ===== 8 Ericsson | First quarter report 2023 Cash flow and financial position Cash flow and financial position Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements. 1 Defined as Changes in operating net assets. Cash flow from operating activities Cash flow from operating activities was SEK -5.8 (0.0) b. Following the strong cash flow in Q4, working capital grew related to the changed business mix with two components: increased customer financing for large roll-out projects in new 5G markets, and reduced trade payables. In addition, Q1 is normally a weak cash flow quarter driven by seasonality effects with lower sales and payout of employee incentives. The negative impact on cash flow was partly offset by lower buildup of inventories and higher IPR payments compared with the same period last year. Taxes paid were SEK -1.3 (-1.3) b. Free cash flow Free cash flow before M&A was SEK -8.0 (-1.7) b. in the quarter. Capex net and other investing activities was SEK -1.5 (-1.1) b. M&A activities were SEK -0.8 (0.0) b. mainly related to the divestment of the IoT business and Free cash flow after M&A was SEK -8.9 (-1.6) b. Free cash flow before M&A rolling four quarters was SEK 15.8 b., or 5.7% in relation to sales. Cash flow from investing activities Cash flow from investing activities was SEK 2.4 (14.4) b. primarily due to lower divestment of interest-bearing securities. Cash flow from financing activities Cash flow from financing activities was SEK -0.8 (7.8) b. In Q1 2022, Ericsson issued a EUR 750 m. (SEK 7.8 b.) bond. Financial position Sequentially, Gross cash decreased by SEK -8.9 b. to SEK 47.3 b. and Net cash decreased by SEK -9.7 b. to SEK 13.6 b. The sequential change was a result of the negative Free cash flow after M&A in the quarter. The USD 0.2 b. (SEK 2.2 b.) fine related to the resolution with the U.S. Department of Justice (DOJ) regarding non-criminal breaches of its 2019 Deferred Prosecution Agreement (DPA) was paid in the beginning of April 2023 and will impact Q2. The average maturity of long-term borrowings was 3.6 years as of March 31, 2023, unchanged from 12 months earlier. Liabilities for post-employment benefits decreased to SEK 26.8 b. from SEK 27.4 b. due to changes in the financial assumptions and better returns on plan assets in the quarter. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on Swedish government bond yields. If the discount rate had been based on Swedish covered mortgage bonds, the liability for post-employment benefits would have been approximately SEK 10.5 b. (SEK 16.3 b. lower than current DBO). Return on capital employed (ROCE) was 6.1% (10.2%) as a result of lower EBIT and higher capital employed. Free cash flow bridge, SEK b. Q1 2023 Q1 2022 Q4 2022 EBI T excl. restructuring charges 4.0 4.8 8.1 Depreciation, amortization and impairment losses 3.1 2.1 3.5 Restructuring charges -1.0 0.0 -0.2 C hanges in working capital ¹ ⁾ -11.8 -5.5 10.7 Interest paid/ received, taxes paid, and other -0.2 -1.4 -2.2 Cash flow from operating activities -5.8 0.0 19.9 C apex net and other investing activities -1.5 -1.1 -2.3 Repayment of lease liabilities -0.7 -0.6 -0.8 Free cash flow before M&A -8.0 -1.7 16.9 M&A -0.8 0.0 -0.4 Free cash flow after M&A -8.9 -1.6 16.4 C ash flow from operating activities -5.8 0.0 19.9 C ash flow from investing activities 2.4 14.4 -11.9 C ash flow from financing activities -0.8 7.8 -3.9 SEK b. Mar 31 2023 Mar 31 2022 Dec 31 2022 Gross cash 47.3 104.2 56.2 - Borrowings, current 11.6 10.4 6.0 - Borrowings, non-current 22.2 28.6 26.9 Net cash 13.6 65.2 23.3 Equity 125.8 109.9 133.3 Total assets 345.7 323.9 349.5 C apital turnover (times) 1.3 1.2 1.4 Return on capital employed (%) 6.1% 10.2% 14.0% - Free cash flow before M&A was SEK -8.0 (-1.7) b. impacted by an increase in working capital. - Net cash decreased by SEK -9.7 b. QoQ to SEK 13.6 b. - The average maturity of long-term borrowings was 3.6 years. ===== SIDA 9 ===== 9 Ericsson | First quarter report 2023 Key data points Key data pointsMarket The global RAN equipment market is estimated to grow by 0% (-1%) in 2023. North America is expected to decline by -7% (-7%), Europe by 0% (0%) and Mainland China by -4% (-4%). Source: Dell’Oro Mobile RAN Quarterly Report Q422, Feb 2023. Numbers in parenthesis are from Dell’Oro Mobile RAN 5-year forecast, Jan 2023. Ericsson Net sales Reported average seasonality last 3 years (2020–2022), % Net sales may show large variations between quarters, including currency changes. Operating expenses excluding Vonage and restructuring charges Reported average seasonality last 3 years (2020–2022), SEK b. Positive numbers = decrease in operating expenses. Negative numbers = increase in operating expenses. Operating expenses may show large variations between quarters, including currency changes. EBITA For Q2, we expect Group EBITA margin excluding restructuring charges to reach mid-single-digit level. Currency exposure Rule of thumb: A change by 10% of SEK to USD would have an impact of approximately +/-5% on net sales. Amortization of intangible assets Amortization of intangible assets is expected to continue to be around SEK -0.9 b. per quarter of which approximately SEK -0.8 b. related to segment Enterprise. Restructuring charges Restructuring charges may amount to around SEK 7 b. for the full year, of which more than half is likely to be booked in Q2. For 2024, restructuring charges are expected to normalize at about 0.5% of sales. Segments Networks Sales in Q2 is expected to be in line with Q1 2023. Networks gross margin excluding restructuring charges in Q2 is expected to be in the range of 37-39%. Cloud Software and Services Positive seasonality between Q1 and Q2 is expected to be somewhat less than normal in Q2 2023. Enterprise The slower sales growth rate in Q1 is expected to continue in Q2. Amortization of intangible assets is expected to be approximately SEK -0.8 b. per quarter. Q4àQ1 Q1àQ2 Q2àQ3 Q3àQ4 Networks -23% +12% +4% +22% Cloud Software and Services -35% +12% +2% +35% Q4àQ1 Q1àQ2 Q2àQ3 Q3àQ4 Ericsson Group +3.3 -1.5 +0.7 -2.4 ===== SIDA 10 ===== 10 Ericsson | First quarter report 2023 Parent Company Parent Company Income after financial items January–March 2023, was SEK 0.3 (1.0) b. At the end of the quarter, gross cash (cash, cash equivalents plus interest-bearing securities, current and non-current) amounted to SEK 32.6 (89.0) b. There was an increase in intercompany lending of SEK 3.6 b. and in intercompany borrowing of SEK 1.0 b. in the quarter. In the quarter, a dividend of SEK 9.0 b. was recognized, after decision by the Annual General Meeting on March 29. The first of two equal dividend payouts was made in the first week of April. The second payout will be in October. The holding of treasury stock on March 31, 2023, was 4,009,306 Class B shares. ===== SIDA 11 ===== 11 Ericsson | First quarter report 2023 Other information Other information Legal proceedings not involving governmental authorities On March 3, 2022, Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed on behalf of purchasers of Ericsson ADS in the United States, in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as defendant. The amended complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq. In December 2022, Ericsson and the individual defendants filed a motion to dismiss the complaint. In February 2023, the plaintiff opposed the motion. In March 2023, Ericsson filed a reply in support of its motion to dismiss. Oral argument on the motion to dismiss was held on March 24, 2023 and the Court took the matter under advisement and has not yet issued a decision. In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. The lawsuit was brought by US military service members and employees of US government contractors who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against Ericsson under the US Anti-Terrorism Act alleging that Ericsson made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, Ericsson filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, including a plaintiff injured in Turkey, named Ericsson AB, CEO Börje Ekholm and a former employee as additional defendants and also asserted additional allegations and claims. In March 2023, Ericsson filed a new motion to dismiss. In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, lawsuits, claims and proceedings incidental to the ordinary course of business. Legal proceedings involving governmental authorities In December 2019, Ericsson entered into a resolution with the United States Department of Justice (DOJ) resolving the DOJ’s investigations into Ericsson’s business dealings in Djibouti, China, Vietnam, Indonesia and Kuwait. The resolution included a deferred prosecution agreement (DPA), and a guilty plea by Ericsson’s Egyptian subsidiary to a criminal violation of the US Foreign Corrupt Practices Act’s (FCPA) antibribery provisions. Under the DPA, the Company admitted to the conduct described in the DPA’s statement of facts, and the DOJ agreed to defer prosecution of Ericsson for the DPA’s three-year term if Ericsson did not violate the terms of the DPA. As part of the DPA with the DOJ and consent judgment with the U.S. Securities and Exchange Commission (SEC), Ericsson agreed to engage an independent compliance monitor for three years while the Company continues to undertake significant reforms to strengthen its Ethics and Compliance Program. The monitor’s primary responsibilities include reviewing and evaluating the Company’s progress in implementing and operating its enhanced compliance program and accompanying controls pursuant to the terms of the DPA, as well as providing recommendations for improvements. In October 2021, the DOJ notified Ericsson of its determination that the Company breached its obligations under the DPA by failing to provide required information to the DOJ. In February 2022, the Company publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period 2011–2019. The investigation found serious breaches of compliance rules and the Company’s Code of Business Ethics and identified evidence of corruption related misconduct and other serious violations, including payments to intermediaries and the potential use of alternate transport routes in connection with circumventing Iraqi Customs, at a time when terrorist organizations, including ISIS, controlled some transport routes. The investigation also identified payment schemes and cash transactions that potentially created the risk of money laundering. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. In March 2022, the DOJ informed Ericsson it had determined that, before entering into the DPA, the Company provided insufficient information to the DOJ about the Company’s 2019 internal investigation into conduct in Iraq. The DOJ also determined that the Company breached the DPA by failing to inform the DOJ about the investigation after entering into the DPA. In June 2022, the SEC informed Ericsson that it opened an investigation concerning matters described in the Company’s 2019 Iraq investigation report. Under Ericsson’s consent judgment with the SEC, Ericsson is permanently enjoined from violating the FCPA’s antibribery, books and records and internal controls provisions. Violations of the injunction, consent judgment or securities law could subject the Company to new civil and criminal penalties as well as new enforcement actions. In December 2022, the Company agreed with the DOJ and SEC to extend the term of the Company’s independent compliance monitor for one year, until June 2024. On January 12, 2023, the Company announced that a provision in the fourth quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) had been made in relation to the breaches of the DPA. The provision also included estimated expenses (SEK 0.1 billion) for the previously announced extended compliance monitorship. On March 2, 2023, the Company reached a resolution (Plea Agreement) with the DOJ regarding the non-criminal breaches of the DPA. Under the Plea Agreement, Ericsson pleaded guilty to previously deferred charges relating to conduct prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206,728,848. The entry of the Plea Agreement brought the DPA to an end. The Company’s internal investigation and its cooperation with authorities in relation to the matters discussed in the 2019 internal Iraq investigation report remain open and ongoing and are not covered by the Plea Agreement. With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to thoroughly investigate the matters in full cooperation with the DOJ and the SEC. As previously disclosed, the Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization and significant further investigation by the Company over the course of 2022 has not altered this conclusion. As part of its defense to a now settled patent infringement lawsuit filed by Ericsson in 2013 in the Delhi High Court against Indian handset company Micromax, Micromax filed a complaint against Ericsson with the Competition Commission of India (CCI). The CCI decided to refer the case to the Director General’s Office for an in- ===== SIDA 12 ===== 12 Ericsson | First quarter report 2023 Other information depth investigation. The CCI opened similar investigations against Ericsson in January 2014 based on claims made by Intex Technologies (India) Limited and, in 2015, based on a now settled claim from iBall. Ericsson has challenged CCI’s jurisdiction in these cases before the Delhi High Court and is awaiting a decision on the appeal of the first instance court’s decision. In April 2019, Ericsson was informed by China’s State Administration for Market Regulation (SAMR) Anti-monopoly bureau that SAMR has initiated an investigation into Ericsson’s patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact finding and meetings with SAMR in order to facilitate the authority’s assessments and conclusions. PRESS RELEASES Jan 25, 2023 | Ericsson announces changes to the Executive Team Ericsson (NASDAQ: ERIC) has appointed Jenny Lindqvist Senior Vice President, Head of Market Area Europe & Latin America, as of February 1, 2023. Effective the same date she will become member of the Ericsson Executive Team, reporting to the CEO. Jenny Lindqvist currently holds the position of Vice President and Head of Northern and Central Europe within Ericsson’s Market Area Europe & Latin America. Börje Ekholm, President and CEO, says: “I am very pleased to welcome Jenny as a member of the Executive Team. Jenny takes on this role at a pivotal time for Ericsson and the industry as we drive towards realizing the full potential of 5G technology by solidifying our leadership position in mobile networks. Under Jenny’s leadership and leveraging her commercial and operations experience, I see an opportunity for Ericsson to further grow and shape the future of our business in Europe and Latin America with our leading customers." Jenny Lindqvist says: ”I am delighted to take on this exciting new role for Europe and Latin America. I look forward to working closely together with our customers and teams in this diverse Market Area to bring value, innovation, and vision to our fast-changing business environment and leverage our technology leadership in 5G.” Jenny Lindqvist has a Master of Science in Business & Economics from Stockholm School of Economics. Previous management positions within Ericsson Business Area and Market Area organizations include Head of Global Customer Unit Telia Company, Head of Solution Line Intelligent Transport Systems, Key Account Manager Telenor, Managed Services Engagement Lead and Business Manager Multimedia. Previous positions outside Ericsson include roles in management consulting in France and Sweden, as well as in Pharmaceuticals in the Philippines. As a member of Ericsson's Executive Leadership Team, Jenny Lindqvist succeeds Stefan Koetz who has been acting in this role as of June 1, 2022. Stefan will take on a new role as Head of Strategic Projects for Market Area Europe & Latin America. https://www.ericsson.com/en/press-releases/2023/1/ericsson-announces-changes-to-the-executive-team March 2, 2023 | U.S. Department of Justice Resolves 2019 Deferred Prosecution Agreement Breaches with Ericsson Ericsson (NASDAQ: ERIC) today announced that it has reached a resolution with the U.S. Department of Justice (DOJ) regarding non-criminal breaches of its 2019 Deferred Prosecution Agreement (DPA). Under the agreement, and as provided for by the DPA, LM Ericsson will enter a guilty plea regarding previously deferred charges relating to conduct prior to 2017. In addition, Ericsson will pay a fine of $206,728,848. The entry of the plea agreement will bring the 2019 DPA to an end. In 2019, Ericsson entered into the DPA to resolve previously disclosed Foreign Corrupt Practices Act (FCPA) violations relating to conduct in several countries between 2010 and 2016. Since the start of the DPA, the DOJ has not alleged or charged Ericsson with any new criminal misconduct, and no new illegal conduct has been alleged or charged today. As previously announced in October 2021 and March 2022, however, the DOJ notified Ericsson that it had failed to provide documents and information to the DOJ in a timely manner and had not adequately reported to the DOJ information relating to a 2019 Iraq-related internal investigation. Under the DPA, the DOJ has the sole discretion to determine that the Company has breached its obligations, and if it makes this determination, it has the ability to prosecute the Company for the past misconduct covered under the DPA. As a result, the Company has entered a guilty plea for the FCPA violations to which it previously admitted as part of the DPA. The Company is not adjusting the long-term financial targets it has given, as it does not expect any material deviations from these. Börje Ekholm, CEO of Ericsson, commented, “Taking this step today means that the matter of the breaches is now resolved. This allows us to focus on executing our strategy while driving continued cultural change across the company with integrity at the center of everything we do. This resolution is a stark reminder of the historical misconduct that led to the DPA. We have learned from that and we are on an important journey to transform our culture. To be a true industry leader, we must be a market and technology leader while also being a leader in how we conduct our business. The Ericsson Executive Team and I remain committed to this transformation and we continue to implement stringent controls and improved governance, ethics and compliance across our company, with corresponding enhancements to our risk management approach. The change continues and we are a very different company today and have made important changes since 2017 and over 2022.” Ronnie Leten, Chairman of the Board of Directors, further commented, “Since 2017, under the strong leadership of Börje Ekholm, the Company has substantially improved its approach to risk management and compliance, including an overhaul of its Anti-Corruption Program to prevent and detect problematic conduct. The Board continues its active oversight, and with our full support, Börje and his leadership team will continue to embed these changes into the governance and culture of the Company.” With respect to the historical conduct in Iraq, the Company continues to thoroughly investigate the facts in full cooperation with the DOJ and the U.S. Securities and Exchange Commission. As previously disclosed, the Company’s 2019 investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization; and the Company’s significant further investigation over the course of 2022 has not altered this conclusion. Commenting on the Company in the agreement, the DOJ noted: “[Ericsson] has significantly enhanced its compliance program and internal accounting controls through structural and leadership changes, including but not limited to the hiring of a new Chief Legal Officer and new Head of Corporate and Government Investigations and the establishment of a multi-disciplinary Business Risk Committee comprised of Group-level senior executives … and has committed to continuing to implement and test further enhancements”. Further, “[Ericsson] has significantly enhanced its cooperation and information sharing efforts.” https://www.ericsson.com/en/press-releases/2023/3/u.s.-department-of-justice-resolves-2019-deferred-prosecution-agreement-breaches-with-ericsson ===== SIDA 13 ===== 13 Ericsson | First quarter report 2023 Other information March 29, 2023 | Ericsson’s Annual General Meeting 2023 Telefonaktiebolaget LM Ericsson’s (NASDAQ:ERIC) Annual General Meeting (AGM) was held today on March 29, 2023 in Kista, Stockholm. Shareholders were also able to exercise their voting rights by post before the meeting. Adoption of the Profit and Loss Statements and the Balance Sheets The AGM resolved to adopt the Profit and Loss Statement and the Balance Sheet for the Parent company as well as the Consolidated Profit and Loss Statement and the Consolidated Balance Sheet for the Group for 2022. Dividend The proposed dividend of SEK 2.70 per share was approved by the AGM. The dividend will be paid in two equal installments: SEK 1.35 per share with the record date Friday, March 31, 2023, and SEK 1.35 per share with the record date Friday, September 29, 2023. Euroclear Sweden AB is expected to disburse SEK 1.35 per share on Wednesday, April 5, 2023, and SEK 1.35 per share on Wednesday, October 4, 2023. Remuneration report The AGM resolved to adopt the Board of Directors’ remuneration report for 2022. Discharge from liability The AGM resolved to discharge Carolina Dybeck Happe and Annika Salomonsson from liability for the financial year 2022. It was recorded that shareholders representing at least one tenth of all of the shares in the company voted against discharge from liability for the other members of the Board and the President for the financial year 2022. Board of Directors The AGM elected Board members in accordance with the proposal of the Nomination Committee. Jan Carlson was elected as new Chair of the Board and Jon Fredrik Baksaas, Börje Ekholm, Eric A. Elzvik, Carolina Dybeck Happe, Kristin S. Rinne, Helena Stjernholm and Jacob Wallenberg were re-elected as Board members. Jonas Synnergren and Christy Wyatt were elected new Board members. Ronnie Leten, Kurt Jofs and Nora Denzel, who did not stand for re-election, left the Board of Directors in connection with the AGM. It was also noted that the unions have appointed Torbjörn Nyman, Anders Ripa and Kjell-Åke Soting employee representatives in the Board of Directors with Ulf Rosberg, Loredana Roslund and Annika Salomonsson as deputies. Board of Directors' Fees The AGM resolved on fees to the Board of Directors, in accordance with the Nomination Committee's proposal. Yearly fee to the Chair of the Board of SEK 4,500,000, and fees to other non-employee members of the Board, elected by the AGM, of SEK 1,140,000 each. Fees for Committee work to non-employee members of the Committees, elected by the AGM, were approved as follows: SEK 495,000 to the Chair of the Audit and Compliance Committee and SEK 285,000 to each of the other members of the Audit and Compliance Committee, SEK 210,000 to each of the Chairs of the Finance Committee, the Remuneration Committee and the Technology and Science Committee, and SEK 185,000 to each of the other members of the Finance Committee, the Remuneration Committee and the Technology and Science Committee. The AGM approved the Nomination Committee's proposal to enable payment of part of the fees to the members of the Board for the Board assignment (excluding fees for Committee work), in the form of synthetic shares. Auditor The AGM re-elected Deloitte AB as auditor for the period up until the end of the AGM 2024 and approved the Nomination Committee´s proposal for auditor fee. Long-Term Variable Compensation Programs Long-Term Variable Compensation Program I 2023 (LTV I 2023). In accordance with the Board of Directors’ proposals, the AGM resolved on implementation of LTV I 2023 for the members of the Executive Team, including the President and CEO, (currently 17 individuals), comprising a maximum of 4.1 million B-shares in Ericsson. “Performance Share Awards" will be granted free of charge entitling the participant to receive a number of shares, free of charge, following the expiration of a three-year vesting period, provided that certain performance conditions are met and that the participant retains his or her employment. The 4.1 million B-shares covered by LTV I 2023 correspond to approximately 0.12 percent of the total number of registered shares of the company. Furthermore, the AGM resolved to approve the Board of Directors’ proposal to hedge the company’s undertakings under LTV I 2023 through an equity swap agreement with a third party. - Long-Term Variable Compensation Program II 2023 (LTV II 2023). In accordance with the Board of Directors’ proposals, the AGM resolved as follows: Implementation of LTV II 2023 for employees classified as Executives, excluding the President and CEO and Executive Team, (currently approximately 180 employees), comprising a maximum of 5.9 million B-shares in Ericsson. “Performance Share Awards" will be granted free of charge entitling the participant to receive a number of shares, free of charge, following the expiration of a three-year vesting period, provided that certain performance conditions are met and that the participant retains his or her employment. The 5.9 million B-shares covered by LTV II 2023 correspond to approximately 0.18 percent of the total number of registered shares of the company. - A directed issue of 5.9 million C-shares to Investor AB, or subsidiaries of Investor AB, at a subscription price corresponding to the quota value of the share (approximately SEK 5). - Authorization for the Board of Directors to, prior to the AGM 2024, resolve on an acquisition offer regarding the 5.9 million C-shares at a price per share corresponding to the quota value of the share (approximately SEK 5). Following the acquisition, the C-shares will, in accordance with the articles of association, be converted into B-shares, which thereafter can be transferred to employees and on an exchange. - Transfer of no more than 4.9 million B-shares, free of consideration, to employees covered by the terms of the LTV II 2023. The AGM further resolved to authorize the Board of Directors to decide to, in conjunction with the delivery of vested shares under LTV II 2023, prior to the AGM 2024, retain and sell no more than 60% of the vested B-shares on Nasdaq Stockholm at a price within the, at each time, prevailing price interval for the share, in order to cover for the costs for withholding and paying tax and social security liabilities on behalf of the participants of LTV II 2023 in relation to the Performance Share Awards for remittance to revenue authorities. - Transfer of no more than 1.0 million B-shares on Nasdaq Stockholm, prior to the AGM 2024, at a price within the, at each time, prevailing price interval for the share, to cover certain expenses, mainly social security payments. Transfer of treasury stock to employees and on an exchange, directed share issues and acquisition offer for the previously resolved LTV programs 2021 and 2022 (LTV 2021 and LTV 2022) The AGM resolved to approve the Board of Directors’ proposals on: - directed issues of in total 4.1 million C-shares to Investor AB, or subsidiaries of Investor AB, at a subscription price corresponding to the quota value of the share (approximately SEK 5); - authorization for the Board of Directors to, prior to the AGM 2024, resolve on an acquisition offer regarding the 4.1 million C-shares at a price per share corresponding to the quota value of the share (approximately SEK 5); following the acquisition, the C-shares will, in accordance with the articles of association, be ===== SIDA 14 ===== 14 Ericsson | First quarter report 2023 Other information converted into B-shares, which thereafter can be transferred to employees and on an exchange; - transfer of no more than 3.1 million B-shares, free of consideration, to employees covered by the terms of LTV 2021 and LTV 2022, with an authorization for the Board of Directors to decide to, in conjunction with the delivery of vested shares under LTV 2021 and LTV 2022, prior to the AGM in 2024, retain and sell no more than 60% of the vested B-shares on Nasdaq Stockholm, at a price within the, at each time, prevailing price interval for the share, in order to cover for the costs for withholding and paying tax and social security liabilities on behalf of the participants in relation to the Performance Share Awards for remittance to revenue authorities; and - transfer of no more than 1 million B-shares on Nasdaq Stockholm, prior to the AGM 2024, at a price within the, at each time, prevailing price interval for the share, to cover certain expenses, mainly social security payments. Transfer of treasury stock on an exchange for previously resolved LTV programs 2019 and 2020 The AGM resolved to approve the Board of Directors’ proposals on: - transfer of no more than 1.4 million B-shares on Nasdaq Stockholm, prior to the AGM 2024, at a price within the, at each time, prevailing price interval for the share, to cover certain expenses, mainly social security charges, which may occur in relation to the previously resolved and ongoing LTV programs LTV 2019 and LTV 2020; and - authorization for the Board of Directors to decide to, in conjunction with the delivery of vested shares under LTV 2019 and LTV 2020, prior to the AGM 2024, retain and sell no more than 60% of the vested B-shares on Nasdaq Stockholm, at a price within the, at each time, prevailing price interval for the share, in order to cover for the costs for withholding and paying tax and social security liabilities on behalf of the participants in relation to the Performance Share Awards for remittance to revenue authorities. New Guidelines for remuneration to Group management The AGM resolved to approve the new guidelines for remuneration to Group Management, in accordance with the Board of Directors’ proposal. Shares and votes There are in total 3,334,151,735 shares in the company; 261,755,983 A-shares and 3,072,395,752 B-shares, corresponding to in total 568,995,558.2 votes. The company’s holding of treasury stock as of March 29, 2023, amounts to 4,009,306 B-shares, corresponding to 400,930.6 votes. https://www.ericsson.com/en/press-releases/2023/3/ericssons-annual-general-meeting-2023 POST-CLOSING EVENTS April 5, 2023 | Cradlepoint acquisition of Ericom strengthens Ericsson’s global enterprise ambitions Ericsson’s drive to deliver second-to-none enterprise connectivity solutions for businesses of all sizes around the world has been boosted by the acquisition of cloud-based security specialist Ericom, by Cradlepoint, part of Ericsson. Cradlepoint, itself a leader in enterprise-focused wireless WAN and private 5G networks, is part of Ericsson’s Business Area Enterprise Wireless Solutions (BEWS). The combined portfolio leads the industry in next-generation enterprise and private network connectivity with the broadest portfolio of 5G solution choices for enterprises and public sector agencies embracing digitalization and Industry 4.0. With cybersecurity high of the agendas of enterprise digitalization strategies worldwide, Cradlepoint’s acquisition of Ericom - including its cloud-based enterprise security capabilities - strengthens Ericsson’s appeal as the portfolio solution of choice. Ericom’s zero trust and cloud-based security solutions will form the basis of the new Cradlepoint NetCloud Threat Defense cloud service, expanding the company’s mobile-capable and router-integrated SASE (secure access service edge) and zero trust portfolio of solutions for fixed-site, remote worker, in-vehicle and IoT use cases. Welcoming Ericom, George Mulhern, Head of Ericsson Business Area Enterprise Wireless Solutions and CEO of Cradlepoint, said: “We can now deliver a comprehensive SD-WAN and SASE solution for Wireless WAN and private cellular networking, leveraging 5G while addressing the wireline needs of enterprise customers.” David Canellos, CEO of Ericom, said: “The acquisition enhances our ability to meet the cybersecurity needs of global enterprises as they accelerate their rapid adoption of 5G technologies.” For further details, read the related Cradlepoint press release: Cradlepoint Acquires Ericom and its Cloud-Based Enterprise Security Solution Further tech detail With the Ericom acquisition, Cradlepoint is building a unified platform for cellular first customers to combine wireless/5G networks and security to deliver PCN security, WAN Security, and Web security from single-pane-of-glass management. While Cradlepoint’s Netcloud Exchange (NCX) platform focuses on PCN and WAN security, the Ericom acquisition allows Cradlepoint to combine PCN security, WAN security, and Web security to provide a converged networking and security software stack for cellular-focused enterprise customers. April 17, 2023 | Ericsson announces CFO transition Ericsson (NASDAQ: ERIC) today announced that Carl Mellander, the Company’s Chief Financial Officer, will step down at the end of the first quarter 2024. Mr. Mellander has been with Ericsson for over 25 years and has been a member of its Executive Team since 2016. A recruitment process will be initiated to appoint a successor. Börje Ekholm, President and CEO, comments: "For almost 7 years Carl has been a valued member of the Executive Team and instrumental in the turnaround of Ericsson. We have come to a mutual agreement that this is a good time for a change, as the turnaround phase is completed and the foundation for the next chapter of Ericsson’s strategy has been laid. During his tenure as CFO, Ericsson regained its technology leadership and significantly strengthened its financial position. With his dedicated leadership and broad background in Ericsson and other companies, Carl has successfully built Ericsson’s finance function and been an integral part in closing key strategic acquisitions as well as enhancing our compliance program. I wish him all the best in his future ventures. I am happy he will stay on in the role until the end of Q1 2024, which allows for finding and ensuring a smooth handover to a successor.” Carl Mellander comments: “It has been an incredible privilege to serve as Ericsson’s CFO during these soon 7 years and to work with such an extraordinary group of people. I am deeply proud of the work we have done in transforming the Company; Ericsson is well positioned globally to continue building on its industry-leading position and to expand into enterprise. If there was ever a good time for me to move on to new career adventures, I feel that this moment is it, and I am excited about what the future might bring. Meanwhile I will continue in full capacity as CFO during this period. I will always follow Ericsson with passion and pride as it keeps transforming society.” https://www.ericsson.com/en/press-releases/2023/4/ericsson-announces-cfo-transition ===== SIDA 15 ===== 15 Ericsson | First quarter report 2023 Risk factors Risk factorsEricsson is exposed to a number of risks in its activities. To stimulate identification and support cross-functional treatment within the Ericsson Group, risks are grouped in a number of categories, including for example risks relating to technology, IPR, compliance, project execution, operations, products and services, treasury and accounting, the geopolitical environment, M&A, cyber security and occupational health and safety. Ericsson’s risk management is embedded into strategy development and operational processes and is a part of the Ericsson Group Management System to ensure accountability, effectiveness, efficiency, business continuity and compliance. Risks are defined in both a short-term and long-term perspective and are related to long-term objectives as per the strategic direction as well as to short-term objectives. Risk factors and uncertainties of relevance to Ericsson are described in the Annual Report 2022 and in the Annual Report on Form 20-F 2022 (in the following the “Annual Report 2022”). Updates to these risk factors and uncertainties observed by Ericsson that are deemed of short-term relevance include, but are not limited to, the following risks described below. See also “Forward-Looking Statements”. Ericsson is subject to certain US and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations. Ericsson may be subject to further adverse consequences under the Plea Agreement with the United States Department of Justice (DOJ) and the injunction issued in connection with the 2019 settlement with the U.S. Securities and Exchange Commission (SEC), as well as other ongoing investigations by governmental authorities. As mentioned in the Annual Report 2022, including in the risk factor 3.3, on January 12, 2023, the Company made a provision in the fourth quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation to the breaches of the Company’s 2019 deferred prosecution agreement (DPA) with the DOJ. The provision also included estimated expenses (SEK 0.1 billion) for the previously announced extended compliance monitorship. On March 2, 2023, the Company reached a resolution (Plea Agreement) with the DOJ regarding the non-criminal breaches of its DPA. Under the Plea Agreement, Ericsson pleaded guilty to previously deferred charges relating to conduct prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206,728,848. The entry of the Plea Agreement brought the DPA to an end. As set forth in the Plea Agreement, Ericsson has certain continuing obligations through June 2024, including cooperation, reporting evidence or allegations of potential Foreign Corrupt Practices Act (FCPA) violations, continuing to engage an independent compliance monitor and improving its compliance program. If Ericsson fails to meet those obligations and is found to have breached the Plea Agreement, the Company could face further adverse consequences, including prosecution for additional federal criminal violations. The Company’s internal investigation and its cooperation with authorities in relation to the matters discussed in the 2019 internal Iraq investigation report remain open and ongoing and are not covered by the Plea Agreement. With respect to the matters described in the 2019 internal Iraq investigation report, the Company continues to thoroughly investigate the matters in full cooperation with the DOJ and the SEC. As previously disclosed, the Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization and significant further investigation by the Company over the course of 2022 has not altered this conclusion. Ericsson is involved in lawsuits, legal proceedings and regulatory investigations, which, if determined unfavorably, could require the Company to pay substantial damages, fines and/or penalties. As mentioned in the Annual Report 2022, including in the risk factor 3.4, in April 2019, Ericsson was informed by China’s State Administration for Market Regulations (SAMR) Anti-monopoly bureau that SAMR has initiated an investigation into Ericsson’s patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact-finding and meetings with SAMR in order to facilitate the authority’s assessment and conclusions. In case of adverse findings, SAMR has the power to impose behavioral and financial remedies, which may have material adverse effects on Ericsson’s business, financial condition and operating results. On March 3, 2022, Telefonaktiebolaget LM Ericsson and certain officers of Ericsson were named as defendants in a putative class action filed on behalf of purchasers of Ericsson ADS in the United States, in the United States District Court for the Eastern District of New York. An amended complaint was filed on September 9, 2022, which added a former Ericsson officer as a defendant. The amended complaint alleges violations of United States securities laws, in connection with allegedly false and misleading statements principally concerning the Company’s adherence with its compliance and anti-corruption policies and obligations and the conduct of its business in Iraq. In December 2022, Ericsson and the individual defendants filed a motion to dismiss the complaint. In February 2023, the plaintiff opposed the motion. In March 2023, Ericsson filed a reply in support of its motion to dismiss. Oral argument on the motion to dismiss was held on March 24, 2023, and the court took the matter under advisement and has not yet issued a decision. In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. The lawsuit was brought by US military service members and employees of US government contractors who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against Ericsson under the US Anti-Terrorism Act alleging that Ericsson made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, the Company filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, named Ericsson AB, CEO Börje Ekholm and a former employee as additional defendants and asserted additional allegations and claims. In March 2023, Ericsson filed a new motion to dismiss. Inflationary pressure As mentioned in the risk factor 1.2 of the Annual Report 2022, inflation may impact our cost base through increased costs of labor and supply of material, products and services. It may not be possible to fully compensate for such increased costs through increased sales prices to the Company’s customers, leading to lower margins and decreased financial performance. Stockholm, April 18, 2023 Telefonaktiebolaget LM Ericsson Börje Ekholm, President and CEO Org. No. 556016-0680 This report has not been reviewed by Telefonaktiebolaget LM Ericsson auditors Date for next report: 14 July 2023 ===== SIDA 16 ===== 16 Ericsson | First quarter report 2023 Editor’s Note Editor’s noteMedia and analyst briefing Ericsson invites media, investors and analysts to a conference call and live video webcast at 9:00 AM CEST on April 18, 2023. Link to the webcast, dial-in to audio conference, supporting material and replay will be available at: www.ericsson.com/investors and www.ericsson.com/newsroom For further information, please contact: Carl Mellander, Senior Vice President, Chief Financial Officer Phone: +46 72 583 88 70 E-mail: investor.relations@ericsson.com or media.relations@ericsson.com Stella Medlicott, Senior Vice President, Chief Marketing and Communications Officer Phone: +46 73 095 65 39 E-mail: investor.relations@ericsson.com or media.relations@ericsson.com Telefonaktiebolaget LM Ericsson Org. number: 556016-0680 Torshamnsgatan 21 SE-164 83 Stockholm Phone: +46 10 719 00 00 www.ericsson.com Investors Peter Nyquist, Vice President, Head of Investor Relations Phone: +46 70 575 29 06 E-mail: peter.nyquist@ericsson.com Lena Häggblom, Director, Investor Relations Phone: +46 72 593 27 78 E-mail: lena.haggblom@ericsson.com Alan Ganson, Director, Investor Relations Phone: +46 70 267 27 30 E-mail: alan.ganson@ericsson.com Media Kristoffer Edshage, Director of Corporate Media Phone: +46 72 220 44 46 E-mail: media.relations@ericsson.com Corporate Communications Phone: +46 10 719 69 92 E-mail: media.relations@ericsson.com ===== SIDA 17 ===== 17 Ericsson | First quarter report 2023 Forward-looking statements Forward-looking statements This report includes forward-looking statements, including statements reflecting the Company’s current views relating to the growth of the market, future market conditions, future events, financial condition, and expected operational and financial performance, including, in particular the following: - Potential material additional costs and liability resulting from our ongoing future compliance with the terms of the Plea Agreement with the DOJ and extended monitorship - Potential to become a target for public scrutiny as a result of entering into the Plea Agreement with the DOJ, including incorrect misinterpretations of the resolution, complaints to regulatory agencies, negative media publicity and, interference from our competitors, all of which could damage our reputation and materially and adversely affect our business and prospects - Risks resulting from entering into the Plea Agreement including potential debarment from government contracting in the United States and elsewhere, reputational risk, as well as potential negative impact on commercial contracts, dealings with financial institutions, contracts with suppliers, primarily due to counter-party reluctance to continue business relationships - Potential material additional liability resulting from past conduct, including allegations of past conduct in Iraq or other locations that remains unresolved or unknown - Risks related to internal control and governance, including the potential to incur material liability in connection with internal controls surrounding payments made to third parties in connection with historical conduct in Iraq or other locations - Our goals, strategies, planning assumptions and operational or financial performance expectations - Ongoing geopolitical and trade uncertainty, including challenging global economic conditions, market trends and pandemics such as COVID-19 - Industry trends, future characteristics and development of the markets in which we operate - Our ability to comply with legal and regulatory requirements internationally - Risks related to cybersecurity and privacy - Our future liquidity, capital resources, capital expenditures, cost savings and profitability - The expected demand for our existing and new products and services as well as plans to launch new products and services including research and development expenditures - The ability to deliver on future plans and to realize potential for future growth - The expected operational or financial performance of strategic cooperation activities and joint ventures - The time until acquired entities and businesses will be integrated and accretive to income - Technology and industry trends including the regulatory and standardization environment in which we operate, competition and our customer structure. The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “intend”, “likely”, “projects”, “may”, “could”, “plan”, “estimate”, “forecast”, “will”, “should”, “would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”, “might”, “continue”, or, in each case, their negative or variations, and similar words or expressions are used to identify forward-looking statements. Any statement that refers to the Company’s strategy, future financial performance, expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Such statements are based on management’s expectations as of the date of this report, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable. We caution investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond our control that could cause actual results to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. Important factors that could affect whether and to what extent any of our forward-looking statements materialize include but are not limited to the factors described throughout this report, including in the section Risk Factors, and in “Risk Factors” in the Annual Report 2022 and in the Annual Report on Form 20-F 2022. These forward-looking statements also represent our estimates and assumptions only as of the date that they were made, and to the extent they represent third-party data, we have not undertaken to independently verify such third-party data and do not intend to do so. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this report and in other documents we file from time to time with our regulators that disclose risks and uncertainties that may affect our business. Unless specifically indicated otherwise, the forward-looking statements in this report do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed as of the date of this report. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this report, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulation. We maintain website and external voluntary reports that may be referenced in this report. The information on our website and in our external voluntary reports is not incorporated by reference in, or otherwise to be regarded as part of, this report. We also report to more than one regulator, and our regulators have different definitions of what is or is not or may or may not be “material” for the purposes of our operations, financial statements and strategy. Given this, we may report certain matters to certain regulators and not to others. We may also use definitions of materiality in our voluntary reporting that are different from the definitions we use in our regulatory filings. ===== SIDA 18 ===== 18 Ericsson | First quarter report 2023 Financial statements and other information Financial statements and other information Contents Financial statements (unaudited) ................................................................................................................................................................................................. 19 Condensed consolidated income statement ................................................................................................................................................................................................... 19 Condensed statement of comprehensive income (loss) ............................................................................................................................................................................. 19 Condensed consolidated balance sheet ............................................................................................................................................................................................................ 20 Condensed consolidated statement of cash flows ........................................................................................................................................................................................ 21 Condensed consolidated statement of changes in equity .......................................................................................................................................................................... 22 Condensed consolidated income statement – isolated quarters ............................................................................................................................................................ 22 Condensed consolidated statement of cash flows – isolated quarters ................................................................................................................................................ 23 Condensed Parent Company income statement ........................................................................................................................................................................................... 24 Condensed Parent Company statement of comprehensive income (loss) .......................................................................................................................................... 24 Condensed Parent Company balance sheet ................................................................................................................................................................................................... 25 Accounting policies and Explanatory notes (unaudited) ........................................................................................................................................................ 26 Note 1 – Accounting policies ................................................................................................................................................................................................................................ 26 Note 2 – Segment information*) .......................................................................................................................................................................................................................... 27 Note 3 – Financial income and expenses, net ................................................................................................................................................................................................ 31 Note 4 – Provisions .................................................................................................................................................................................................................................................. 32 Note 5 – Financial risk management ................................................................................................................................................................................................................ 33 Note 6 – Cash flow ................................................................................................................................................................................................................................................... 34 Note 7 – Contingent liabilities and Assets pledged as collateral ............................................................................................................................................................ 34 Note 8 – Share information ................................................................................................................................................................................................................................... 35 Note 9 – Employee information .......................................................................................................................................................................................................................... 35 Alternative performance measures (unaudited) ....................................................................................................................................................................... 36 Sales growth adjusted for comparable units and currency ........................................................................................................................................................................ 37 Items excluding restructuring charges .............................................................................................................................................................................................................. 38 EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges .............................................................................................................. 39 Rolling four quarters of net sales and EBIT margin excluding restructuring charges (%) ............................................................................................................. 39 Gross cash and net cash, end of period ............................................................................................................................................................................................................. 40 Capital employed ....................................................................................................................................................................................................................................................... 40 Capital turnover ......................................................................................................................................................................................................................................................... 40 Return on capital employed .................................................................................................................................................................................................................................. 41 Equity ratio ................................................................................................................................................................................................................................................................... 41 Return on equity ........................................................................................................................................................................................................................................................ 41 Adjusted earnings per share .................................................................................................................................................................................................................................. 42 Free cash flow before M&A / Free cash flow after M&A ............................................................................................................................................................................. 42 Sales growth by segment adjusted for comparable units and currency*) ............................................................................................................................................. 43 Sales growth by market area adjusted for comparable units and currency ........................................................................................................................................ 43 Gross margin by segment by quarter ................................................................................................................................................................................................................. 44 EBIT margin by segment by quarter .................................................................................................................................................................................................................. 44 Restructuring charges by function ...................................................................................................................................................................................................................... 45 Restructuring charges by segment ..................................................................................................................................................................................................................... 45 Gross income and gross margin excluding restructuring charges by segment .................................................................................................................................. 46 EBIT and EBIT margin excluding restructuring charges by segment .................................................................................................................................................... 47 Rolling four quarters of net sales by segment ................................................................................................................................................................................................ 47 Rolling four quarters of EBIT margin excluding restructuring charges by segment (%) ................................................................................................................ 47 EBITA and EBITA margin by segment by quarter ........................................................................................................................................................................................ 48 EBITA and EBITA margin excluding restructuring charges by segment .............................................................................................................................................. 49 Other ratios .................................................................................................................................................................................................................................................................. 49 ===== SIDA 19 ===== 19 Ericsson | First quarter report 2023 Financial statements Financial statements (unaudited) Condensed consolidated income statement 1) Based on net income attributable to owners of the Parent Company. 2) Potential ordinary shares are not considered when their conversion to ordinary shares would improve earnings per share. Condensed statement of comprehensive income SEK million Note 2023 2022 Change Net sales 2 62,553 55,061 14% C ost of sales -38,385 -31,772 21% Gross income 2 24,168 23,289 4% Research and development expenses -11,972 -10,705 12% Selling and administrative expenses -9,118 -6,588 38% Impairment losses on trade receivables -49 -180 -73% Operating expenses -21,139 -17,473 21% Other operating income and expenses 27 -1,065 -103% Share of earnings of JV and associated companies -10 -7 43% Earnings before financial items and income tax (EBI T) 2 3,046 4,744 -36% Financial income and expenses, net 3 -917 -643 43% In c o m e afte r fi n an c i al i te m s 2,129 4,101 -48% Inc ome tax -554 -1,189 -53% Net income 1,575 2,912 -46% Net income attributable to:  Owners of t he Parent Company 1,516 2,940  Non-controlling interests 59 -28 Other information  Average number of shares, basic (million) 8 3,330 3,330  Earnings per share, basic (SEK) ¹ ⁾ 0.46 0.88  Earnings per share, diluted (SEK) ² ⁾ 0.45 0.88 Q1 SEK million 2023 2022 Net income 1,575 2,912 Other comprehensive income Ite m s th at wi l l n o t b e r e c l as s i fi e d to p r o fi t o r l o s s Remeasurements of defined benefits pension plans incl. asset ceiling -171 6,926 Revaluation of borrowings due to change in credit risk -225 916 C ash flow hedge reserve  Gains/ losses arising during the period - 458 Tax on items that will not be reclassified to profit or loss 102 -1,761 Ite m s th at h av e b e e n o r m ay b e r e c l as s i fi e d to p r o fi t o r l o s s C ash flow hedge reserve  Gains/ losses arising during the period -296 121  Reclassification adjustments on gains/ losses included in profit or loss 208 42 Translation reserves C hanges in translation reserves 391 1,585 Reclassification to profit and loss -7 -8 Share of other comprehensive income of JV and associated companies 5 -1 Tax on items that have been or may be reclassified to profit or loss 18 -34 Total other comprehensive income, net of tax 25 8,244 Total comprehensive income 1,600 11,156 Total comprehensive income (loss) attributable to:  Owners of t he Parent Company 1,565 11,237  Non-controlling interests 35 -81 Q1 ===== SIDA 20 ===== 20 Ericsson | First quarter report 2023 Financial statements Condensed consolidated balance sheet Mar 31 Dec 31 SEK million Note 2023 2022 Assets Non-current assets Intangible assets  C apitalized development expenses 3,882 3,705  Goodwill 84,558 84,570  C ustomer relationships, IPR and other intangible assets 25,520 26,340 Property, plant and equipment 14,037 14,236 Right-of-use assets 7,593 7,870 Financial assets  Equity in JV and associated companies 1,116 1,127  Other investments in shares and participations 5 2,142 2,074  C ustomer finance, non-current 5 887 415  Inte re s t-bearing securities, non-current 5 3,925 9,164  Other financial assets, non-current 5 6,676 6,839 Deferred tax assets 20,570 19,394 170,906 175,734 Current assets Inventories 46,217 45,846 Cont ract asset s 8,034 9,843 Trade receivables 5 50,176 48,413 C ustomer finance, current 5 7,784 4,955 C urrent tax assets 7,239 7,973 Other current receivables 11,910 9,688 Interest-bearing securities, current 5 9,259 8,736 C ash and cash equivalents 5 34,133 38,349 174,752 173,803 Total assets 345,658 349,537 Equity and liabilities Equity Stockholders' equity 127,396 134,814 Non-controlling interest in equity of subsidiaries -1,564 -1,510 125,832 133,304 Non-current liabilities Post-employment benefits 26,791 27,361 Provisions, non-current 4 4,119 3,959 Deferred tax liabilities 4,986 4,784 Borrowings, non-current 5 22,167 26,946 Lease liabilities, non-current 6,413 6,818 Other non-current liabilities 716 745 65,192 70,613 Current liabilities Provisions, current 4 6,422 7,629 Borrowings, current 5 11,577 5,984 Lease liabilities, current 2,623 2,486 C ontract liabilities 47,916 42,251 Trade payables 5 34,554 38,437 C urrent tax liabilities 2,478 2,640 Other current liabilities 49,064 46,193 154,634 145,620 Total equity and liabilities 345,658 349,537 ===== SIDA 21 ===== 21 Ericsson | First quarter report 2023 Financial statements Condensed consolidated statement of cash flows Jan-Dec SEK million Note 2023 2022 2022 Operating activities Net income 1,575 2,912 19,112 Adjustments for  Taxes 1,069 1,021 5,383  Earnings/dividends in JV and associated companies 9 8 55  Depreciation, amortization and impairment losses 6 3,092 2,146 10,543  Ot her 1,646 899 1,657 7,391 6,986 36,750 Changes in operating net assets Inventories -60 -5,346 -7,740 C ustomer finance, current and non-current -3,284 -123 -1,732 Trade receivables and contract assets 200 901 4,766 Trade payables -4,107 -1,371 -1,995 Provisions and post-employment benefits -963 969 2,339 C ontract liabilities 5,553 6,260 5,794 Other operating assets and liabilities, net -9,105 -6,767 -813 -11,766 -5,477 619 Interest received 395 78 344 Interest paid -589 -211 -1,250 Taxes paid -1,256 -1,346 -5,600 Cash flow from operating activities -5,825 30 30,863 In v e s ti n g ac ti v i ti e s Investments in property, plant and equipment 6 -954 -818 -4,477 Sales of property, plant and equipment 33 38 249 Acquisitions/ divestments of subsidiaries and other operations, net -844 46 -51,688 Product development 6 -575 -288 -1,720 Purchase of interest-bearing securities - - -13,582 Sale of interest-bearing securities 3,704 16,027 40,541 Other investing activities 1,006 -579 -3,720 Cash flow from investing activities 2,370 14,426 -34,397 Financing activities Proceeds from issuance of borrowings 1,027 7,788 10,755 Repayment of borrowings -1,080 - -16,029 Dividends paid - - -8,415 Repayment of lease liabilities -693 -593 -2,593 Other financing activities -24 569 352 Cash flow from financing activities -770 7,764 -15,930 Effect of exchange rate changes on cash 9 586 3,763 Net change in cash and cash equivalents -4,216 22,806 -15,701 Cash and cash equivalents, beginning of period 38,349 54,050 54,050 Cash and cash equivalents, end of period 34,133 76,856 38,349 Q1 ===== SIDA 22 ===== 22 Ericsson | First quarter report 2023 Financial statements Condensed consolidated statement of changes in equity 1) Jan-Mar includes accrual of SEK 9,002 (8,335) million for the dividend approved by the Annual General Meeting on March 29, 2023. Condensed consolidated income statement – isolated quarters 1) Q4 2022 includes a provision of SEK -2.3 billion in relation to a potential resolution with the United States Department of Justice regarding previously announced, non-criminal, alleged breaches under the deferred prosecution agreement (DPA), including estimated expenses for the extended compliance monitorship, noting that the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and agreed to pay a fine of approximately SEK 2.2 billion. Q3 2022 includes revaluation of Ericsson Ventures investments of SEK 0.2 billion. Q2 2022 includes revaluation/disposals of Ericsson Ventures investments of SEK 0.1 billion. Q1 2022 includes a provision of SEK -0.9 billion for impairment of assets and other one-time costs due to the suspension of the affected business in Russia, and revaluation of Ericsson Venture investments of SEK -0.3 billion. 2) Based on net income attributable to owners of the Parent Company. 3) Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. Jan-Dec SEK million 2023 2022 2022 Opening balance 133,304 107,099 107,099 Total comprehensive income 1,600 11,156 34,530 Long-term variable compensation plans 19 24 89 Dividends to shareholders ¹ ⁾ -9,091 -8,400 -8,415 Transactions with non-controlling interests - - 1 Closing balance 125,832 109,879 133,304 Jan-Mar Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Net sales 62,553 85,980 68,040 62,465 55,061 C ost of sales -38,385 -50,411 -39,905 -36,163 -31,772 Gross income 24,168 35,569 28,135 26,302 23,289 Research and development expenses -11,972 -13,217 -11,880 -11,496 -10,705 Selling and administrative expenses -9,118 -11,791 -9,441 -7,872 -6,588 Impairment losses on trade receivables -49 99 38 3 -180 Operating expenses -21,139 -24,909 -21,283 -19,365 -17,473 Other operating income and expenses ¹ ⁾ 27 -2,824 234 393 -1,065 Share of earnings of JV and associated companies -10 17 29 -22 -7 Earnings before financial items and income tax (EBI T) 3,046 7,853 7,115 7,308 4,744 Financial income and expenses, net -917 -474 -535 -759 -643 In c o m e afte r fi n an c i al i te m s 2,129 7,379 6,580 6,549 4,101 Inc ome tax -554 -1,189 -1,220 -1,899 -1,189 Net income 1,575 6,190 5,360 4,650 2,912 Net income (loss) attributable to:   Owners of t he Parent Company 1,516 6,066 5,214 4,504 2,940  Non-controlling interests 59 124 146 146 -28 Other information   Average number of shares, basic (million) 3,330 3,330 3,330 3,330 3,330  Earnings per share, basic (SEK) ² ⁾ 0.46 1.82 1.56 1.36 0.88  Earnings per share, diluted (SEK) ³ ⁾ 0.45 1.82 1.56 1.35 0.88 2023 2022 ===== SIDA 23 ===== 23 Ericsson | First quarter report 2023 Financial statements Condensed consolidated statement of cash flows – isolated quarters Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Operating activities Net income 1,575 6,190 5,360 4,650 2,912 Adjustments for  Taxes 1,069 1,304 1,307 1,751 1,021  Earnings/dividends in JV and associated companies 9 -24 -17 88 8  Depreciation, amortization and impairment losses 3,092 3,535 2,638 2,224 2,146  Ot her 1,646 432 -19 345 899 7,391 11,437 9,269 9,058 6,986 Changes in operating net assets Inventories -60 5,898 -3,564 -4,728 -5,346 C ustomer finance, current and non-current -3,284 -871 -872 134 -123 Trade receivables and contract assets 200 -4,080 4,595 3,350 901 Trade payables -4,107 -131 -1,817 1,324 -1,371 Provisions and post-employment benefits -963 1,749 -58 -321 969 C ontract liabilities 5,553 2,878 -2,623 -721 6,260 Other operating assets and liabilities, net -9,105 5,235 1,052 -333 -6,767 -11,766 10,678 -3,287 -1,295 -5,477 Interest received 395 127 156 -17 78 Interest paid -589 -406 -196 -437 -211 Taxes paid/ received -1,256 -1,941 -1,291 -1,022 -1,346 Cash flow from operating activities -5,825 19,895 4,651 6,287 30 In v e s ti n g ac ti v i ti e s Investments in property, plant and equipment -954 -1,502 -1,104 -1,053 -818 Sales of property, plant and equipment 33 76 74 61 38 Acquisitions/ divestments of subs. and other operations, net -844 -445 -51,412 123 46 Product development -575 -717 -414 -301 -288 Purchase of interest-bearing securities - -12,108 -437 -1,037 - Sale of interest-bearing securities 3,704 789 978 22,747 16,027 Other investing activities 1,006 2,012 -6,537 1,384 -579 Cash flow from investing activities 2,370 -11,895 -58,852 21,924 14,426 Financing activities Proceeds from issuance of borrowings 1,027 1,301 1,666 - 7,788 Repayment of borrowings -1,080 -121 -5,915 -9,993 - Dividends paid - -4,172 -79 -4,164 - Repayment of lease liabilities -693 -765 -658 -577 -593 Other financing activities -24 -183 -277 243 569 Cash flow from financing activities -770 -3,940 -5,263 -14,491 7,764 Effect of exchange rate changes on cash 9 -2,460 2,595 3,042 586 Net change in cash and cash equivalents -4,216 1,600 -56,869 16,762 22,806 Cash and cash equivalents, beginning of period 38,349 36,749 93,618 76,856 54,050 Cash and cash equivalents, end of period 34,133 38,349 36,749 93,618 76,856 2023 2022 ===== SIDA 24 ===== 24 Ericsson | First quarter report 2023 Financial statements Condensed Parent Company income statement 1) Jan-March 2022 restated in accordance with the change in accounting described in Q4 2022 financial statements. Condensed Parent Company statement of comprehensive income (loss) Jan-Dec SEK million 2023 2022 2022 Net sales - - - C ost of sales - - - Gross income - - - Operating expenses -355 -355 -1,492 Other operating income and expenses 854 609 691 EBI T 499 254 -801 Financial net ¹ ⁾ -174 747 19,213 In c o m e afte r fi n an c i al i te m s 325 1,001 18,412 Transfers to (-) / from untaxed reserves - - -7,272 Income tax ¹ ⁾ -44 -276 631 Net income (loss) 281 725 11,771 Q1 Jan-Dec SEK million 2023 2022 2022 Net income (loss) 281 725 11,771 C ash flow hedge reserve Gains/ losses arising during the period - 458 3,703 Transfer to investments - - -3,677 Tax on items that will not be reclassified to profit or loss - -89 -758 Other comprehensive income (loss), net of tax - 369 -732 Total comprehensive income (loss) 281 1,094 11,039 Q1 ===== SIDA 25 ===== 25 Ericsson | First quarter report 2023 Financial statements Condensed Parent Company balance sheet Mar 31 Dec 31 SEK million 2023 2022 Assets Fixed assets Intangible assets 3 4 Tangible assets 366 380 Financial assets ¹ ⁾ 157,816 156,720 158,185 157,104 Current assets Receivables 24,352 27,664 Short-term investments 9,087 8,540 C ash and cash equivalents 19,564 23,731 53,003 59,935 Total assets 211,188 217,039 Stockholders' equity, provisions and liabilities Equity Restricted equity 48,164 48,164 Non-restricted equity 29,045 37,753 77,209 85,917 Provisions 2,387 2,435 Non-current liabilities 22,053 26,835 C urrent liabilities 109,539 101,852 Total stockholders' equity, provisions and liabilities 211,188 217,039 ¹ ⁾ Of which interest-bearing securities, non-current 3,920 9,157 ===== SIDA 26 ===== 26 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Accounting policies and Explanatory notes (unaudited)Note 1 – Accounting policies The group This condensed consolidated interim financial report for the quarterly reporting period ended March 31, 2023, has been prepared in accordance with Accounting Standard IAS 34 “Interim Financial Reporting”. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and IFRS Interpretations Committee (IFRIC). The accounting policies adopted are consistent with those of the annual report for the year ended December 31, 2022, and should be read in conjunction with that annual report. There are no amendments of IFRS during 2023 that are estimated to have a material impact on the result and financial position of the Company. Changes applied as from Q1 2023 - IoT business reported in segment Other The IoT business was divested in Q1 2023. As previously announced in Q4 2022 the IoT business has been transferred from segment Enterprise to segment Other in Q1 2023. In order to reflect the change all prior quarters in 2022 have been restated where applicable. ===== SIDA 27 ===== 27 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Note 2 – Segment information*) Net sales by segment by quarter *) Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 42,467 58,626 48,147 45,983 40,712  Of which Products 32,175 45,804 35,763 35,299 31,131  Of whi ch Ser vi ces 10,292 12,822 12,384 10,684 9,581 C loud Software and Services 13,400 20,210 14,213 14,014 12,087  Of which Products 4,455 8,047 4,752 4,675 3,631  Of whi ch Ser vi ces 8,945 12,163 9,461 9,339 8,456 Enterprise 5,995 6,314 4,981 1,703 1,599 Ot her 691 830 699 765 663 Total 62,553 85,980 68,040 62,465 55,061 Sequential change, percent Q1 Q4 Q3 Q2 Q1 Networks -28% 22% 5% 13% -20%  Of which Products -30% 28% 1% 13% -22%  Of whi ch Ser vi ces -20% 4% 16% 12% -14% C loud Software and Services -34% 42% 1% 16% -33%  Of which Products -45% 69% 2% 29% -49%  Of whi ch Ser vi ces -26% 29% 1% 10% -22% Enterprise -5% 27% 192% 7% 0% Ot her -17% 19% -9% 15% -3% Total -27% 26% 9% 13% -23% Year over year change, percent Q1 Q4 Q3 Q2 Q1 Networks 4% 15% 19% 15% 12%  Of which Products 3% 15% 15% 16% 13%  Of whi ch Ser vi ces 7% 15% 30% 13% 9% C loud Software and Services 11% 13% 4% 8% 3%  Of which Products 23% 13% 4% 18% 2%  Of whi ch Ser vi ces 6% 12% 5% 4% 4% Enterprise 275% 295% 256% 20% 47% Ot her 4% 22% 5% 11% -6% Total 14% 21% 21% 14% 11% Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 42,467 193,468 134,842 86,695 40,712  Of which Products 32,175 147,997 102,193 66,430 31,131  Of whi ch Ser vi ces 10,292 45,471 32,649 20,265 9,581 C loud Software and Services 13,400 60,524 40,314 26,101 12,087  Of which Products 4,455 21,105 13,058 8,306 3,631  Of whi ch Ser vi ces 8,945 39,419 27,256 17,795 8,456 Enterprise 5,995 14,597 8,283 3,302 1,599 Ot her 691 2,957 2,127 1,428 663 Total 62,553 271,546 185,566 117,526 55,061 Year over year change, percent Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 4% 15% 16% 14% 12%  Of which Products 3% 15% 15% 15% 13%  Of whi ch Ser vi ces 7% 17% 18% 11% 9% C loud Software and Services 11% 8% 5% 6% 3%  Of which Products 23% 10% 8% 10% 2%  Of whi ch Ser vi ces 6% 7% 4% 4% 4% Enterprise 275% 165% 112% 31% 47% Ot her 4% 8% 3% 2% -6% Total 14% 17% 15% 12% 11% 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 ===== SIDA 28 ===== 28 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Gross income by segment by quarter EBIT (loss) by segment by quarter *) Financial information by segment has been restated for the quarters 2022, where the divested IoT business in Q1 2023 has moved from segment Enterprise to segment Other. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 16,869 26,056 21,366 20,735 18,211 C loud Software and Services 4,476 6,664 4,516 4,692 4,234 Enterprise 2,841 2,885 2,429 900 882 Ot her -18 -36 -176 -25 -38 Total 24,168 35,569 28,135 26,302 23,289 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 16,869 86,368 60,312 38,946 18,211 C loud Software and Services 4,476 20,106 13,442 8,926 4,234 Enterprise 2,841 7,096 4,211 1,782 882 Ot her -18 -275 -239 -63 -38 Total 24,168 113,295 77,726 49,591 23,289 2023 2022 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 6,020 12,453 9,597 8,861 7,601 C loud Software and Services -942 673 -792 -733 -837 Enterprise -1,712 -1,893 -1,456 -593 -531 Ot her -320 -3,380 -234 -227 -1,489 Total 3,046 7,853 7,115 7,308 4,744 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 6,020 38,512 26,059 16,462 7,601 C loud Software and Services -942 -1,689 -2,362 -1,570 -837 Enterprise -1,712 -4,473 -2,580 -1,124 -531 Ot her -320 -5,330 -1,950 -1,716 -1,489 Total 3,046 27,020 19,167 12,052 4,744 2023 2022 ===== SIDA 29 ===== 29 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Net sales by market area by quarter Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 South East Asia, Oceania and India 13,911 11,239 7,914 7,962 5,836 North East Asia 4,363 8,396 5,597 7,319 5,421 North America 16,927 25,301 26,517 22,849 20,727 Europe and Latin America ¹ ⁾ ² ⁾ 14,219 20,877 15,298 15,325 15,290 Middle East and Africa 4,186 7,379 5,668 5,223 4,301 Ot her ¹ ⁾ ² ⁾ 8,947 12,788 7,046 3,787 3,486 Total 62,553 85,980 68,040 62,465 55,061 ¹ ⁾ Of which in Sweden 611 778 833 950 678 ² ⁾ Of which in EU 8,205 10,495 8,242 8,511 8,611 2023 2022 Sequential change, percent Q1 Q4 Q3 Q2 Q1 South East Asia, Oceania and India 24% 42% -1% 36% -32% North East Asia -48% 50% -24% 35% -45% North America -33% -5% 16% 10% -7% Europe and Latin America ¹ ⁾ ² ⁾ -32% 36% 0% 0% -21% Middle East and Africa -43% 30% 9% 21% -38% Ot her ¹ ⁾ ² ⁾ -30% 81% 86% 9% -22% Total -27% 26% 9% 13% -23% ¹ ⁾ Of which in Sweden -21% -7% -12% 40% -37% ² ⁾ Of which in EU -22% 27% -3% -1% -15% 2023 2022 Year over year change, percent Q1 Q4 Q3 Q2 Q1 South East Asia, Oceania and India 138% 31% 23% 12% -13% North East Asia -20% -14% -2% 3% -16% North America -18% 14% 32% 27% 21% Europe and Latin America ¹ ⁾ ² ⁾ -7% 9% 6% 9% 21% Middle East and Africa -3% 6% 14% 17% -2% Ot her ¹ ⁾ ² ⁾ 157% 186% 53% -12% 40% Total 14% 21% 21% 14% 11% ¹ ⁾ Of which in Sweden -10% -28% 74% 135% 74% ² ⁾ Of which in EU -5% 3% 17% 17% 27% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar South East Asia, Oceania and India 13,911 32,951 21,712 13,798 5,836 North East Asia 4,363 26,733 18,337 12,740 5,421 North America 16,927 95,394 70,093 43,576 20,727 Europe and Latin America ¹ ⁾ ² ⁾ 14,219 66,790 45,913 30,615 15,290 Middle East and Africa 4,186 22,571 15,192 9,524 4,301 Ot her ¹ ⁾ ² ⁾ 8,947 27,107 14,319 7,273 3,486 Total 62,553 271,546 185,566 117,526 55,061 ¹ ⁾ Of which in Sweden 611 3,239 2,461 1,628 678 ² ⁾ Of which in EU 8,205 35,859 25,364 17,122 8,611 2023 2022 Year t o dat e, year over year change, percent Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar South East Asia, Oceania and India 138% 14% 7% 0% -13% North East Asia -20% -8% -5% -6% -16% North America -18% 23% 27% 24% 21% Europe and Latin America ¹ ⁾ ² ⁾ -7% 11% 12% 15% 21% Middle East and Africa -3% 9% 10% 8% -2% Ot her ¹ ⁾ ² ⁾ 157% 71% 26% 7% 40% Total 14% 17% 15% 12% 11% ¹ ⁾ Of which in Sweden -10% 38% 94% 105% 74% ² ⁾ Of which in EU -5% 15% 20% 22% 27% 2023 2022 ===== SIDA 30 ===== 30 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Net sales by market area by segment 1) Includes primarily IPR licensing revenues and a major part of segment Enterprise. SEK million Networks C loud Software and Services Enterprise Ot her Total South East Asia, Oceania and India11,537 2,358 8 8 13,911 North East Asia 3,273 1,031 8 51 4,363 North America 14,030 2,850 38 9 16,927 Europe and Latin America 9,382 4,746 21 70 14,219 Middle East and Africa 2,105 1,969 104 8 4,186 Ot her ¹ ⁾ 2,140 446 5,816 545 8,947 Total 42,467 13,400 5,995 691 62,553 Share of t ot al 68% 21% 10% 1% 100% Q1 2023 Sequential change, percent Networks C loud Software and Services Enterprise Ot her Total South East Asia, Oceania and India 36% -12% 14% -79% 24% North East Asia -53% -23% 167% -23% -48% North America -32% -38% 73% -65% -33% Europe and Latin America -31% -33% -45% -44% -32% Middle East and Africa -43% -44% -21% -33% -43% Ot her -58% -58% -5% -3% -30% Total -28% -34% -5% -17% -27% Q1 2023 Year over year change, percent Networks C loud Software and Services Enterprise Ot her Total South East Asia, Oceania and India 195% 23% 300% 100% 138% North East Asia -28% 25% 300% -6% -20% North America -23% 14% 217% -18% -18% Europe and Latin America -12% 4% 24% -23% -7% Middle East and Africa -4% -3% 44% 167% -3% Ot her 72% 78% 289% 9% 157% Total 4% 11% 275% 4% 14% Q1 2023 ===== SIDA 31 ===== 31 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Top 5 countries in sales 1) Based on Jan-Mar 2023. Includes IPR licensing revenues. IPR licensing revenues by segment by quarter Note 3 – Financial income and expenses, net Financial income and expenses, net Jan-Dec Count ry, percentage of net sales¹ ⁾ 2023 2022 2022 United States 37% 39% 40% India 11% 2% 4% Philippines 5% 1% 1% Japan 3% 3% 4% United Kingdom 3% 4% 3% Q1 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 2,041 4,917 1,282 1,186 1,142 C loud Software and Services 448 1,080 281 261 250 Total 2,489 5,997 1,563 1,447 1,392 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 2,041 8,527 3,610 2,328 1,142 C loud Software and Services 448 1,872 792 511 250 Total 2,489 10,399 4,402 2,839 1,392 2023 2022 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Financial income 517 283 319 117 59 Financial expenses -865 -757 -428 -452 -293 Net foreign exchange gains/ losses -569 - -426 -424 -409 Total -917 -474 -535 -759 -643 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Financial income 517 778 495 176 59 Financial expenses -865 -1,930 -1,173 -745 -293 Net foreign exchange gains/ losses -569 -1,259 -1,259 -833 -409 Total -917 -2, 411 -1, 937 -1, 402 -643 2023 2022 ===== SIDA 32 ===== 32 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Note 4 – Provisions Provisions 1) Q4 2022 includes a provision of SEK -2.3 billion in relation to a potential resolution with the United States Department of Justice regarding previously announced, non-criminal, alleged breaches under the deferred prosecution agreement (DPA), including estimated expenses for the extended compliance monitorship, noting that the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and agreed to pay a fine of approximately SEK 2.2 billion. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Opening balance 11,588 10,562 9,668 10,197 9,504 Additions ¹ ⁾ 1,699 4,304 351 547 1,583 Utilization -2,463 -1,974 -533 -893 -1,173 Of which restructuring -274 -150 -70 -51 -67 Reversal of excess amounts -224 -1,034 -236 -316 -452 Reclassification, translation difference and other -59 -270 1,312 133 735 Closing balance 10,541 11,588 10,562 9,668 10,197 Of which restructuring 1,096 668 595 579 604 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Opening balance 11,588 9,504 9,504 9,504 9,504 Additions ¹ ⁾ 1,699 6,785 2,481 2,130 1,583 Utilization -2,463 -4,573 -2,599 -2,066 -1,173 Of which restructuring -274 -338 -188 -118 -67 Reversal of excess amounts -224 -2,038 -1,004 -768 -452 Reclassification, translation difference and other -59 1,910 2,180 868 735 Closing balance 10,541 11,588 10,562 9,668 10,197 Of which restructuring 1,096 668 595 579 604 2023 2022 ===== SIDA 33 ===== 33 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Note 5 – Financial risk management Liquidity portfolios in some subsidiaries are now managed globally on a fair value basis, therefore deposits (cash equivalents) held in these portfolios are classified as fair value through P&L (previously classified as amortized costs). There have been no changes to the fair value hierarchy categorization from that presented in the latest Annual Report. Where Level 2 and Level 3 fair value hierarchies apply, the inputs and valuation methods used remained unchanged. The book values and fair values of financial instruments are as follows: Financial instruments 1) Year to date movements of customer finance receivables are as follows: additions of SEK 10.7 billion, disposals and repayments of SEK 7.2 billion and revaluation loss of SEK 0.2 billion. 2) Total Cash and cash equivalent is SEK 34.1 (38.3 on Dec 31, 2022) billion, of which SEK 14.6 (18.6 on Dec 31, 2022) billion relating to Cash equivalents are presented in the table above. Exchange rates used in the consolidation SEK billion C arrying value Level 1 Level 2 Level 3C arrying value Level 1 Level 2 Level 3 Assets at fair value through profit or loss C ustomer finance ¹ ⁾ 8.7 - - 8.7 5.4 - - 5.4 Interest-bearing securities 12.8 12.8 - - 17.5 17.5 - - C ash equivalents ² ⁾ 14.6 - 14.6 - 15.7 - 15.7 - Other financial assets 2.1 0.1 - 2.1 2.1 0.1 - 2.0 Other current assets 0.8 - 0.8 - 1.1 - 1.1 - Assets at fair value through OC I Trade receivables 50.2 - - 50.2 48.4 - - 48.4 Assets at amortized costs Interest-bearing securities 0.4 - - - 0.4 - - - C ash equivalents ² ⁾ - - - - 2.9 - - - Other financial assets 0.6 - - - 0.6 - - - Total financial assets 90.2 94.1 Financial liabilities at designated FVTPL Parent company borrowings -30.2 -17.3 -12.9 - -29.6 -16.7 -12.9 - Financial liabilities at FVTPL Other current liabilities -1.9 - -1.9 - -2.6 - -2.6 - Liabilities at amortized cost Trade payables -34.6 - - - -38.4 - - - Borrowings -3.5 - - - -3.3 - - - Total financial liabilities -70.2 -73.9 2023 2022 Mar 31 Dec 31 Fair value hierarchy level Fair value hierarchy level Jan-Dec 2023 2022 2022 SEK/ EUR - closing rate 11.26 10.34 11.08 SEK/ USD - closing rate 10.37 9.32 10.38 Jan-Mar ===== SIDA 34 ===== 34 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Note 6 – Cash flow Information on investments Investments in assets subject to depreciation, amortization, impairment and write-downs Note 7 – Contingent liabilities and Assets pledged as collateral Contingent liabilities and Assets pledged as collateral Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Additions  Property, plant and equipment 954 1,502 1,104 1,053 818  C apitalized development expenses 575 717 414 301 288  IP R, brands and other intangible assets 2 120 2 2 2 Total 1,531 2,339 1,520 1,356 1,108 Depreciation, amortization and impairment losses  Property, plant and equipment 1,183 1,250 1,100 1,074 964  C apitalized development expenses 397 395 387 403 401  Goodwill, IP R, brands and other intangible assets 803 1,196 499 159 198  Right-of-use assets 709 694 652 588 583 Total 3,092 3,535 2,638 2,224 2,146 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Additions  Property, plant and equipment 954 4,477 2,975 1,871 818  C apitalized development expenses 575 1,720 1,003 589 288  IP R, brands and other intangible assets 2 126 6 4 2 Total 1,531 6,323 3,984 2,464 1,108 Depreciation, amortization and impairment losses  Property, plant and equipment 1,183 4,388 3,138 2,038 964  C apitalized development expenses 397 1,586 1,191 804 401  Goodwill, IP R, brands and other intangible assets 803 2,052 856 357 198  Right-of-use assets 709 2,517 1,823 1,171 583 Total 3,092 10,543 7,008 4,370 2,146 2023 2022 Mar 31 Dec 31 SEK million 2023 2022 C ontingent liabilities 2,917 3,322 Assets pledged as collateral 7,877 7,226 ===== SIDA 35 ===== 35 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Note 8 – Share information Number of shares and earnings per share 1) Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share. 2) Based on net income attributable to owners of the Parent Company. The proposed dividend of SEK 2.70 per share was approved by the AGM on March 29, 2023. The first of two equal dividend payouts were made in the first week of April 2023. The second payout will be in October 2023. Note 9 – Employee information Number of employees Jan-Dec 2023 2022 2022 Number of shares, end of period (million) 3,334 3,334 3,334  Of which class A-shares (million) 262 262 262  Of which class B-shares (million) 3,072 3,072 3,072 Number of treasury shares, end of period (million) 4 4 4 Number of shares outstanding, basic, end of period (million) 3,330 3,330 3,330 Numbers of shares outstanding, diluted, end of period (million) 3,334 3,333 3,334 Average number of treasury shares (million) 4 4 4 Average number of shares outstanding, basic (million) 3,330 3,330 3,330 Average number of shares outstanding, diluted (million) ¹ ⁾ 3,334 3,333 3,334 Earnings per share, basic (SEK) ² ⁾ 0.46 0.88 5.62 Earnings per share, diluted (SEK) ¹ ⁾ 0.45 0.88 5.62 Q1 End of period Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 South East Asia, Oceania and India 27,981 27,761 26,844 26,127 26,255 North East Asia 13,136 13,207 13,219 13,077 12,999 North America 11,765 11,993 11,706 10,501 10,327 Europe and Latin America ¹ ⁾ 47,500 48,023 48,144 47,240 46,994 Middle East and Africa 4,549 4,545 4,577 4,514 4,492 Total 104,931 105,529 104,490 101,459 101,067 ¹ ⁾ Of which in Sweden 14,384 14,481 14,444 14,564 14,195 2023 2022 ===== SIDA 36 ===== 36 Ericsson | First quarter report 2023 Accounting policies and Explanatory notes Alternative performance measures (unaudited)In this section, the Company presents its Alternative Performance Measures (APMs), which are not recognized measures of financial performance under IFRS. The presentation of APMs has limitations as analytical tools and should not be considered in isolation or as a substitute for related financial measures prepared in accordance with IFRS. APMs are presented to enhance an investor’s evaluation of ongoing operating results, to aid in forecasting future periods and to facilitate meaningful comparison of results between periods. Management uses these APMs to, among other things, evaluate ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of certain performance-based compensation. APM’s should not be viewed as substitutes for income statement or cash flow items computed in accordance with IFRS. This section also includes a reconciliation of the APMs to the most directly reconcilable line items in the financial statements. For more information about non-IFRS key operating measures, see Ericsson Annual Report 2022. ===== SIDA 37 ===== 37 Ericsson | First quarter report 2023 Alternative performance measures Sales growth adjusted for comparable units and currency Sales growth adjusted for the impact of acquisitions and divestments as well as the effects of foreign currency fluctuations. Also named organic sales. Isolated quarters, year over year change Q1 Q4 Q3 Q2 Q1 Reported net sales 62,553 85,980 68,040 62,465 55,061  Acquired business -3,894 -4,090 -2,925 - -  Net FX impact -3,596 -9,489 -7,437 -5,034 -4,008 C omparable net sales, excluding FX impact 55,063 72,401 57,678 57,431 51,053 C omparable quarter net sales adj. for acq/ div business 55,061 71,332 56,263 54,941 49,778 Sales growth adjusted for comparable units and currency (%) 0% 1% 3% 5% 3% 2023 2022 Year t o dat e, year over year change Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Reported net sales 62,553 271,546 185,566 117,526 55,061  Acquired business -3,894 -7,015 -2,925 - -  Net FX impact -3,596 -25,968 -16,479 -9,042 -4,008 C omparable net sales, excluding FX impact 55,063 238,563 166,162 108,484 51,053 C omparable quarter net sales adj. for acq/ div business 55,061 232,314 160,982 104,719 49,778 Sales growth adjusted for comparable units and currency (%) 0% 3% 3% 4% 3% 2023 2022 ===== SIDA 38 ===== 38 Ericsson | First quarter report 2023 Alternative performance measures Items excluding restructuring charges Gross income, operating expenses, and EBIT are presented excluding restructuring charges and, for certain measures, as a percentage of net sales. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Gross income 24,168 35,569 28,135 26,302 23,289 Net sales 62,553 85,980 68,040 62,465 55,061 Gross margin (%) 38.6% 41.4% 41.4% 42.1% 42.3% Gross income 24,168 35,569 28,135 26,302 23,289 Restructuring charges included in cost of sales 746 96 55 42 2 Gross income excluding restructuring charges 24,914 35,665 28,190 26,344 23,291 Net sales 62,553 85,980 68,040 62,465 55,061 Gross margin excluding restructuring charges (%) 39.8% 41.5% 41.4% 42.2% 42.3% Operating expenses -21,139 -24,909 -21,283 -19,365 -17,473 Restructuring charges included in R&D expenses 91 10 7 4 33 Restructuring charges included in selling and administrative expenses 143 122 19 3 6 Operating expenses excluding restructuring charges -20,905 -24,777 -21,257 -19,358 -17,434 EBI T 3,046 7,853 7,115 7,308 4,744 Net sales 62,553 85,980 68,040 62,465 55,061 EBIT margin (%) 4.9% 9.1% 10.5% 11.7% 8.6% EBI T 3,046 7,853 7,115 7,308 4,744 Total restructuring charges 980 228 81 49 41 EBIT excluding restructuring charges 4,026 8,081 7,196 7,357 4,785 Net sales 62,553 85,980 68,040 62,465 55,061 EBIT margin excluding restructuring charges (%) 6.4% 9.4% 10.6% 11.8% 8.7% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Gross income 24,168 113,295 77,726 49,591 23,289 Net sales 62,553 271,546 185,566 117,526 55,061 Gross margin (%) 38.6% 41.7% 41.9% 42.2% 42.3% Gross income 24,168 113,295 77,726 49,591 23,289 Restructuring charges included in cost of sales 746 195 99 44 2 Gross income excluding restructuring charges 24,914 113,490 77,825 49,635 23,291 Net sales 62,553 271,546 185,566 117,526 55,061 Gross margin excluding restructuring charges (%) 39.8% 41.8% 41.9% 42.2% 42.3% Operating expenses -21,139 -83,030 -58,121 -36,838 -17,473 Restructuring charges included in R&D expenses 91 54 44 37 33 Restructuring charges included in selling and administrative expenses 143 150 28 9 6 Operating expenses excluding restructuring charges -20,905 -82,826 -58,049 -36,792 -17,434 EBI T 3,046 27,020 19,167 12,052 4,744 Net sales 62,553 271,546 185,566 117,526 55,061 EBIT margin (%) 4.9% 10.0% 10.3% 10.3% 8.6% EBI T 3,046 27,020 19,167 12,052 4,744 Total restructuring charges 980 399 171 90 41 EBIT excluding restructuring charges 4,026 27,419 19,338 12,142 4,785 Net sales 62,553 271,546 185,566 117,526 55,061 EBIT margin excluding restructuring charges (%) 6.4% 10.1% 10.4% 10.3% 8.7% 2023 2022 ===== SIDA 39 ===== 39 Ericsson | First quarter report 2023 Alternative performance measures EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges Earnings before interest, taxes, amortizations and write-downs of acquired intangibles also expressed as a percentage of net sales. EBITA excluding restructuring charges also expressed as a percentage of net sales. 1) Of which segment Enterprise 767 in Q1 2023, 1,062 in Q4 2022, 447 in Q3 2022, 107 in Q2 2022 and 117 in Q1 2022. 1) Of which segment Enterprise 767 in Jan-Mar 2023, 1,733 in Jan-Dec 2022, 674 in Jan-Sep 2022, 224 in Jan-Jun 2022 and 117 in Jan-Mar 2022. Additionally, Ericsson provides forward-looking targets for EBITA margin excluding restructuring charges and free cash flow before M&A, which are non-IFRS financial measures. Ericsson has not provided quantitative reconciliation of these targets to the most directly comparable IFRS measures because certain information needed to reconcile these non-IFRS financial measures to the most comparable IFRS financial measures are dependent on specific items or impacts that are not yet determined, are subject to incarcerating and variability in timing and amount due to their nature, are outside of Ericsson’s control or cannot be predicted, including items and impacts such as currency exchange rate changes, acquisitions and disposals, and charges such as impairments or acquisition related charges. Accordingly, reconciliation of these non-IFRS forward-looking financial measures to the most directly comparable IFRS financial measures are not available without unreasonable efforts. Such unavailable reconciling items could significantly impact our results of operations and financial condition. Rolling four quarters of net sales and EBIT margin excluding restructuring charges (%) Net sales, EBIT margin and restructuring charges as a sum of last four quarters. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Net income 1,575 6,190 5,360 4,650 2,912 Inc ome tax 554 1,189 1,220 1,899 1,189 Financial income and expenses, net 917 474 535 759 643 Amortizations and write-downs of acquired intangibles ¹ ⁾ 802 1,196 498 158 199 EBI TA 3,848 9,049 7,613 7,466 4,943 Net sales 62,553 85,980 68,040 62,465 55,061 EBITA margin (%) 6.2% 10.5% 11.2% 12.0% 9.0% Restructuring charges 980 228 81 49 41 EBITA excluding restructuring charges 4,828 9,277 7,694 7,515 4,984 EBITA margin excluding restructuring charges (%) 7.7% 10.8% 11.3% 12.0% 9.1% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Net income 1,575 19,112 12,922 7,562 2,912 Inc ome tax 554 5,497 4,308 3,088 1,189 Financial income and expenses, net 917 2,411 1,937 1,402 643 Amortizations and write-downs of acquired intangibles ¹ ⁾ 802 2,051 855 357 199 EBI TA 3,848 29,071 20,022 12,409 4,943 Net sales 62,553 271,546 185,566 117,526 55,061 EBITA margin (%) 6.2% 10.7% 10.8% 10.6% 9.0% Restructuring charges 980 399 171 90 41 EBITA excluding restructuring charges 4,828 29,470 20,193 12,499 4,984 EBITA margin excluding restructuring charges (%) 7.7% 10.9% 10.9% 10.6% 9.1% 2023 2022 Rolling four quarters, SEK million Q1 Q4 Q3 Q2 Q1 Net sales 279,038 271,546 256,898 245,121 237,597 EBI T 25,322 27,020 31,028 32,748 31,263 Restructuring charges 1,338 399 634 558 513 EBIT excl. restr. charges 26,660 27,419 31,662 33,306 31,776 EBIT margin excl. restr. charges (%) 9.6% 10.1% 12.3% 13.6% 13.4% 2023 2022 ===== SIDA 40 ===== 40 Ericsson | First quarter report 2023 Alternative performance measures Gross cash and net cash, end of period Gross cash: Cash and cash equivalents plus interest-bearing securities (current and non-current). Net cash: Cash and cash equivalents plus interest-bearing securities (current and non-current) less borrowings (current and non-current). Capital employed Total assets less non-interest-bearing provisions and liabilities (which includes non-current provisions, deferred tax liabilities, contract liabilities, other non-current liabilities, current provisions, trade payables, current tax liabilities and other current liabilities). Capital turnover Annualized net sales divided by average capital employed. Annualization factor of four is used for isolated quarter. Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec. SEK million Q1 Q4 Q3 Q2 Q1 C ash and cash equivalents 34,133 38,349 36,749 93,618 76,856 + Interest-bearing securities, current 9,259 8,736 6,640 3,715 12,292 + Interest-bearing securities, non-current 3,925 9,164 2,423 3,061 15,022 Gross cash, end of period 47,317 56,249 45,812 100,394 104,170 - Borrowings, current 11,577 5,984 5,437 3,686 10,403 - Borrowings, non-current 22,167 26,946 26,994 26,363 28,599 Net cash, end of period 13,573 23,319 13,381 70,345 65,168 2023 2022 SEK million Q1 Q4 Q3 Q2 Q1 Total assets 345,658 349,537 361,166 332,453 323,935 Non-interest-bearing provisions and liabilities   Provisions, non-current 4,119 3,959 4,511 4,020 4,498  Deferred tax liabilities 4,986 4,784 8,025 1,250 1,012  Ot her non-current liabilities 716 745 791 762 1,070  Provisions, current 6,422 7,629 6,051 5,648 5,699  C ontract liabilities 47,916 42,251 41,105 41,547 39,875  Trade payables 34,554 38,437 40,864 39,539 35,316  C urrent tax liabilities 2,478 2,640 5,008 6,703 5,701  Other current liabilities 49,064 46,193 50,554 40,346 41,919 C apital employed 195,403 202,899 204,257 192,638 188,845 2023 2022 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Net sales 62,553 85,980 68,040 62,465 55,061 Annualized net sales 250,212 343,920 272,160 249,860 220,244 Average capital employed   C apital employed at beginning of period 202,899 204,257 192,638 188,845 184,283  C apital employed at end of period 195,403 202,899 204,257 192,638 188,845  Average capital employed 199,151 203,578 198,448 190,742 186,564 C apital turnover (times) 1.3 1.7 1.4 1.3 1.2 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Net sales 62,553 271,546 185,566 117,526 55,061 Annualized net sales 250,212 271,546 247,421 235,052 220,244 Average capital employed   C apital employed at beginning of period 202,899 184,283 184,283 184,283 184,283  C apital employed at end of period 195,403 202,899 204,257 192,638 188,845  Average capital employed 199,151 193,591 194,270 188,461 186,564 C apital turnover (times) 1.3 1.4 1.3 1.2 1.2 2023 2022 ===== SIDA 41 ===== 41 Ericsson | First quarter report 2023 Alternative performance measures Return on capital employed The annualized total of EBIT as a percentage of average capital employed. Annualization factor of four is used for isolated quarter. Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec. Equity ratio Equity expressed as a percentage of total assets. Return on equity Annualized net income attributable to owners of the Parent Company as a percentage of average stockholders’ equity. Annualization factor of four is used for isolated quarter. Annualization factor of four is used for Jan-Mar, two is used for Jan-Jun, 4/3 is used for Jan-Sep and one is used for Jan-Dec. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 EBI T 3,046 7,853 7,115 7,308 4,744 Annualized EBIT 12,184 31,412 28,460 29,232 18,976 Average capital employed   C apital employed at beginning of period 202,899 204,257 192,638 188,845 184,283  C apital employed at end of period 195,403 202,899 204,257 192,638 188,845  Average capital employed 199,151 203,578 198,448 190,742 186,564 Return on capital employed (%) 6.1% 15.4% 14.3% 15.3% 10.2% 20222023 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar EBI T 3,046 27,020 19,167 12,052 4,744 Annualized EBIT 12,184 27,020 25,556 24,104 18,976 Average capital employed   C apital employed at beginning of period 202,899 184,283 184,283 184,283 184,283  C apital employed at end of period 195,403 202,899 204,257 192,638 188,845  Average capital employed 199,151 193,591 194,270 188,461 186,564 Return on capital employed (%) 6.1% 14.0% 13.2% 12.8% 10.2% 2023 2022 SEK million Q1 Q4 Q3 Q2 Q1 Total equity 125,832 133,304 136,820 127,799 109,879 Total assets 345,658 349,537 361,166 332,453 323,935 Equity ratio (%) 36.4% 38.1% 37.9% 38.4% 33.9% 2023 2022 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Net income attributable to owners of the Parent C ompany 1,516 6,066 5,214 4,504 2,940 Annualized 6,064 24,264 20,856 18,016 11,760 Average stockholders' equity  Stockholders' equity, beginning of period 134,814 138,607 129,620 111,701 108,775  Stockholders' equity, end of period 127,396 134,814 138,607 129,620 111,701  Average stockholders' equity 131,105 136,711 134,114 120,661 110,238 Return on equity (%) 4.6% 17.7% 15.6% 14.9% 10.7% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Net income attributable to owners of the Parent C ompany 1,516 18,724 12,658 7,444 2,940 Annualized 6,064 18,724 16,877 14,888 11,760 Average stockholders' equity  Stockholders' equity, beginning of period 134,814 108,775 108,775 108,775 108,775  Stockholders' equity, end of period 127,396 134,814 138,607 129,620 111,701  Average stockholders' equity 131,105 121,795 123,691 119,198 110,238 Return on equity (%) 4.6% 15.4% 13.6% 12.5% 10.7% 2023 2022 ===== SIDA 42 ===== 42 Ericsson | First quarter report 2023 Alternative performance measures Adjusted earnings per share Earnings (loss) per share (EPS), diluted, excluding amortizations and write-downs of acquired intangible assets and excluding restructuring charges. Free cash flow before M&A / Free cash flow after M&A Free cash flow before M&A: Cash flow from operating activities less net capital expenditures, other investments and repayment of lease liabilities (excluding M&A). Free cash flow after M&A: Cash flow from operating activities less net capital expenditures, other investments, repayment of lease liabilities and, acquisitions/divestments of subsidiaries and other operations, net. 1) Other investments is part of the line item Other investing activities in the Consolidated cash flow statement. The differences are movements in other interest-bearing assets and the cash flow hedge reserve gain, which are not to be part of the definition of Free cash flow. Isolated quarters, SEK Q1 Q4 Q3 Q2 Q1 Earnings per share, diluted 0.45 1.82 1.56 1.35 0.88 Restructuring charges 0.24 0.05 0.02 0.01 0.01 Amortizations and write-downs of acquired intangibles 0.18 0.26 0.12 0.03 0.05 Adjusted earnings per share 0.87 2.13 1.70 1.39 0.94 2023 2022 Year t o dat e, SEK Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Earnings per share, diluted 0.45 5.62 3.80 2.23 0.88 Restructuring charges 0.24 0.09 0.04 0.02 0.01 Amortizations and write-downs of acquired intangibles 0.18 0.45 0.19 0.08 0.05 Adjusted earnings per share 0.87 6.16 4.03 2.33 0.94 2023 2022 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 C ash flow from operating activities -5,825 19,895 4,651 6,287 30 Net capital expenditures and other investments (excl M&A)  Investments in property, plant and equipment -954 -1,502 -1,104 -1,053 -818  Sales of property, plant and equipment 33 76 74 61 38  Product development -575 -717 -414 -301 -288  Other investments ¹ ⁾ -2 -121 -1 23 -27  Repayment of lease liabilities -693 -765 -658 -577 -593 Free cash flow before M&A -8,016 16,866 2,548 4,440 -1,658  Acquisitions/divestments of subs and other operations, net -844 -445 -51,412 123 46 Free cash flow after M&A -8,860 16,421 -48,864 4,563 -1,612 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar C ash flow from operating activities -5,825 30,863 10,968 6,317 30 Net capital expenditures and other investments (excl M&A)  Investments in property, plant and equipment -954 -4,477 -2,975 -1,871 -818  Sales of property, plant and equipment 33 249 173 99 38  Product development -575 -1,720 -1,003 -589 -288  Other investments ¹ ⁾ -2 -126 -5 -4 -27  Repayment of lease liabilities -693 -2,593 -1,828 -1,170 -593 Free cash flow before M&A -8,016 22,196 5,330 2,782 -1,658  Acquisitions/divestments of subs and other operations, net -844 -51,688 -51,243 169 46 Free cash flow after M&A -8,860 -29,492 -45,913 2,951 -1,612 2023 2022 ===== SIDA 43 ===== 43 Ericsson | First quarter report 2023 Alternative performance measures Sales growth by segment adjusted for comparable units and currency*) *) Sales growth by segment adjusted for comparable units and currency has not been restated by segment for the first two quarters of 2022 due to the re-organization in 2022. Sales growth by market area adjusted for comparable units and currency Isolated quarter, year over year change, percent Q1 Q4 Q3 Q2 Q1 Networks -2% 1% 4% - - C loud Software and Services 5% 2% -5% - - Enterprise 19% 15% 21% - - Ot her 0% 10% -1% - - Total 0% 1% 3% 5% 3% 2023 2022 Year t o dat e, year over year change, percent Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks -2% 4% 5% - - C loud Software and Services 5% -1% -3% - - Enterprise 19% 16% 17% - - Ot her 0% 3% 0% - - Total 0% 3% 3% 4% 3% 2023 2022 Isolated quarter, year over year change, percent Q1 Q4 Q3 Q2 Q1 South East Asia, Oceania and India 132% 21% 13% 6% -17% North East Asia -19% -16% -6% -1% -20% North America -26% -7% 9% 12% 9% Europe and Latin America -12% 0% 0% 4% 15% Middle East and Africa -8% -4% 3% 8% -9% Ot her 28% 60% -21% -24% 31% Total 0% 1% 3% 5% 3% 2023 2022 Year t o dat e, year over year change, percent Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar South East Asia, Oceania and India 132% 7% 1% -5% -17% North East Asia -19% -11% -9% -10% -20% North America -26% 5% 10% 10% 9% Europe and Latin America -12% 4% 6% 9% 15% Middle East and Africa -8% -1% 1% 0% -9% Ot her 28% 9% -11% -4% 31% Total 0% 3% 3% 4% 3% 2023 2022 ===== SIDA 44 ===== 44 Ericsson | First quarter report 2023 Alternative performance measures Gross margin by segment by quarter EBIT margin by segment by quarter Isolated quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 39.7% 44.4% 44.4% 45.1% 44.7% C loud Software and Services 33.4% 33.0% 31.8% 33.5% 35.0% Enterprise 47.4% 45.7% 48.8% 52.8% 55.2% Ot her -2.6% -4.3% -25.2% -3.3% -5.7% Total 38.6% 41.4% 41.4% 42.1% 42.3% 2023 2022 Year to date, as percentage of net sales Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 39.7% 44.6% 44.7% 44.9% 44.7% C loud Software and Services 33.4% 33.2% 33.3% 34.2% 35.0% Enterprise 47.4% 48.6% 50.8% 54.0% 55.2% Ot her -2.6% -9.3% -11.2% -4.4% -5.7% Total 38.6% 41.7% 41.9% 42.2% 42.3% 2023 2022 Isolated quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 14.2% 21.2% 19.9% 19.3% 18.7% C loud Software and Services -7.0% 3.3% -5.6% -5.2% -6.9% Enterprise -28.6% -30.0% -29.2% -34.8% -33.2% Ot her -46.3% -407.2% -33.5% -29.7%-224.6% Total 4.9% 9.1% 10.5% 11.7% 8.6% 2023 2022 Year to date, as percentage of net sales Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 14.2% 19.9% 19.3% 19.0% 18.7% C loud Software and Services -7.0% -2.8% -5.9% -6.0% -6.9% Enterprise -28.6% -30.6% -31.1% -34.0% -33.2% Ot her -46.3% -180.3% -91.7%-120.2%-224.6% Total 4.9% 10.0% 10.3% 10.3% 8.6% 2023 2022 ===== SIDA 45 ===== 45 Ericsson | First quarter report 2023 Alternative performance measures Restructuring charges by function Restructuring charges by segment Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 C ost of sales -746 -96 -55 -42 -2 Research and development expenses -91 -10 -7 -4 -33 Selling and administrative expenses -143 -122 -19 -3 -6 Total -980 -228 -81 -49 -41 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar C ost of sales -746 -195 -99 -44 -2 Research and development expenses -91 -54 -44 -37 -33 Selling and administrative expenses -143 -150 -28 -9 -6 Total -980 -399 -171 -90 -41 2023 2022 Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks -404 -65 -26 -45 -10  of which cost of sales -367 -69 -3 -44 -10  of which operating expenses -37 4 -23 -1 0 C loud Software and Services -500 -16 -55 0 -25  of which cost of sales -367 1 -52 2 8  of which operating expenses -133 -17 -3 -2 -33 Enterprise -89 -60 0 -4 -1  of which cost of sales -12 0 0 0 0  of which operating expenses -77 -60 0 -4 -1 Ot her 13 -87 0 0 -5  of which cost of sales 0 -28 0 0 0  of which operating expenses 13 -59 0 0 -5 Total -980 -228 -81 -49 -41 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks -404 -146 -81 -55 -10  of which cost of sales -367 -126 -57 -54 -10  of which operating expenses -37 -20 -24 -1 0 C loud Software and Services -500 -96 -80 -25 -25  of which cost of sales -367 -41 -42 10 8  of which operating expenses -133 -55 -38 -35 -33 Enterprise -89 -65 -5 -5 -1  of which cost of sales -12 0 0 0 0  of which operating expenses -77 -65 -5 -5 -1 Ot her 13 -92 -5 -5 -5  of which cost of sales 0 -28 0 0 0  of which operating expenses 13 -64 -5 -5 -5 Total -980 -399 -171 -90 -41 2023 2022 ===== SIDA 46 ===== 46 Ericsson | First quarter report 2023 Alternative performance measures Gross income and gross margin excluding restructuring charges by segment Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 17,236 26,125 21,369 20,779 18,221 C loud Software and Services 4,843 6,663 4,568 4,690 4,226 Enterprise 2,853 2,885 2,429 900 882 Ot her -18 -8 -176 -25 -38 Total 24,914 35,665 28,190 26,344 23,291 2023 2022 Isolated quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 40.6% 44.6% 44.4% 45.2% 44.8% C loud Software and Services 36.1% 33.0% 32.1% 33.5% 35.0% Enterprise 47.6% 45.7% 48.8% 52.8% 55.2% Ot her -2.6% -1.0% -25.2% -3.3% -5.7% Total 39.8% 41.5% 41.4% 42.2% 42.3% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 17,236 86,494 60,369 39,000 18,221 C loud Software and Services 4,843 20,147 13,484 8,916 4,226 Enterprise 2,853 7,096 4,211 1,782 882 Ot her -18 -247 -239 -63 -38 Total 24,914 113,490 77,825 49,635 23,291 2023 2022 Year to date, as percentage of net sales Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 40.6% 44.7% 44.8% 45.0% 44.8% C loud Software and Services 36.1% 33.3% 33.4% 34.2% 35.0% Enterprise 47.6% 48.6% 50.8% 54.0% 55.2% Ot her -2.6% -8.4% -11.2% -4.4% -5.7% Total 39.8% 41.8% 41.9% 42.2% 42.3% 2023 2022 ===== SIDA 47 ===== 47 Ericsson | First quarter report 2023 Alternative performance measures EBIT and EBIT margin excluding restructuring charges by segment Rolling four quarters of net sales by segment *) Rolling four quarters of net sales by segment for segments Enterprise and Other have not been restated for the first three quarters of 2022. Rolling four quarters of EBIT margin excluding restructuring charges by segment (%) *) Rolling four quarters of EBIT margin excluding restructuring charges by segment for segment Enterprise and segment Other have not been restated for the first three quarters of 2022. Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 6,424 12,518 9,623 8,906 7,611 C loud Software and Services -442 689 -737 -733 -812 Enterprise -1,623 -1,833 -1,456 -589 -530 Ot her -333 -3,293 -234 -227 -1,484 Total 4,026 8,081 7,196 7,357 4,785 2023 2022 Isolated quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 15.1% 21.4% 20.0% 19.4% 18.7% C loud Software and Services -3.3% 3.4% -5.2% -5.2% -6.7% Enterprise -27.1% -29.0% -29.2% -34.6% -33.1% Ot her -48.2% -396.7% -33.5% -29.7%-223.8% Total 6.4% 9.4% 10.6% 11.8% 8.7% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 6,424 38,658 26,140 16,517 7,611 C loud Software and Services -442 -1,593 -2,282 -1,545 -812 Enterprise -1,623 -4,408 -2,575 -1,119 -530 Ot her -333 -5,238 -1,945 -1,711 -1,484 Total 4,026 27,419 19,338 12,142 4,785 2023 2022 Year to date, as percentage of net sales Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 15.1% 20.0% 19.4% 19.1% 18.7% C loud Software and Services -3.3% -2.6% -5.7% -5.9% -6.7% Enterprise -27.1% -30.2% -31.1% -33.9% -33.1% Ot her -48.2% -177.1% -91.4%-119.8%-223.8% Total 6.4% 10.1% 10.4% 10.3% 8.7% 2023 2022 Rolling four quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 195,223 193,468 185,939 178,383 172,276 C loud Software and Services 61,837 60,524 58,269 57,666 56,601 Enterprise * 18,993 14,597 - - - Ot her * 2,985 2,957 - - - Total 279,038 271,546 256,898 245,121 237,597 2023 2022 Rolling four quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 19.2% 20.0% 20.5% 21.4% 22.0% C loud Software and Services -2.0% -2.6% -2.6% -2.2% -2.9% Enterprise * -29.0% -30.2% - - - Ot her * -136.9% -177.1% - - - Total 9.6% 10.1% 12.3% 13.6% 13.4% 2023 2022 ===== SIDA 48 ===== 48 Ericsson | First quarter report 2023 Alternative performance measures EBITA and EBITA margin by segment by quarter Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 6,042 12,555 9,624 8,889 7,629 C loud Software and Services -929 695 -769 -710 -783 Enterprise -945 -831 -1,009 -486 -414 Ot her -320 -3,370 -233 -227 -1,489 Total 3,848 9,049 7,613 7,466 4,943 2023 2022 Isolated quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 14.2% 21.4% 20.0% 19.3% 18.7% C loud Software and Services -6.9% 3.4% -5.4% -5.1% -6.5% Enterprise -15.8% -13.2% -20.3% -28.5% -25.9% Ot her -46.3% -406.0% -33.3% -29.7%-224.6% Total 6.2% 10.5% 11.2% 12.0% 9.0% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 6,042 38,697 26,142 16,518 7,629 C loud Software and Services -929 -1,567 -2,262 -1,493 -783 Enterprise -945 -2,740 -1,909 -900 -414 Ot her -320 -5,319 -1,949 -1,716 -1,489 Total 3,848 29,071 20,022 12,409 4,943 2023 2022 Year to date, as percentage of net sales Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 14.2% 20.0% 19.4% 19.1% 18.7% C loud Software and Services -6.9% -2.6% -5.6% -5.7% -6.5% Enterprise -15.8% -18.8% -23.0% -27.3% -25.9% Ot her -46.3% -179.9% -91.6%-120.2%-224.6% Total 6.2% 10.7% 10.8% 10.6% 9.0% 2023 2022 ===== SIDA 49 ===== 49 Ericsson | First quarter report 2023 Alternative performance measures EBITA and EBITA margin excluding restructuring charges by segment Other ratios Isolated quarters, SEK million Q1 Q4 Q3 Q2 Q1 Networks 6,446 12,620 9,650 8,934 7,639 C loud Software and Services -429 711 -714 -710 -758 Enterprise -856 -771 -1,009 -482 -413 Ot her -333 -3,283 -233 -227 -1,484 Total 4,828 9,277 7,694 7,515 4,984 2023 2022 Isolated quarters, as percentage of net sales Q1 Q4 Q3 Q2 Q1 Networks 15.2% 21.5% 20.0% 19.4% 18.8% C loud Software and Services -3.2% 3.5% -5.0% -5.1% -6.3% Enterprise -14.3% -12.2% -20.3% -28.3% -25.8% Ot her -48.2% -395.5% -33.3% -29.7%-223.8% Total 7.7% 10.8% 11.3% 12.0% 9.1% 2023 2022 Year to date, SEK million Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 6,446 38,843 26,223 16,573 7,639 C loud Software and Services -429 -1,471 -2,182 -1,468 -758 Enterprise -856 -2,675 -1,904 -895 -413 Ot her -333 -5,227 -1,944 -1,711 -1,484 Total 4,828 29,470 20,193 12,499 4,984 2023 2022 Year to date, as percentage of net sales Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar Networks 15.2% 20.1% 19.4% 19.1% 18.8% C loud Software and Services -3.2% -2.4% -5.4% -5.6% -6.3% Enterprise -14.3% -18.3% -23.0% -27.1% -25.8% Ot her -48.2% -176.8% -91.4%-119.8%-223.8% Total 7.7% 10.9% 10.9% 10.6% 9.1% 2023 2022 Jan-Dec 2023 2022 2022 Days sales outstanding 84 92 61 Inve ntory turnove r days 109 110 93 Payable days 87 102 85 Q1