FIRST QUARTER REPORT 2007Please read our earnings reports and our most recent annual report for a better understanding of these risks and uncertainties. 2007 FIRST QUARTER REPORT CARL-HENRIC

2007FIRST QUARTER REPORT


HENRY STÉNSONSenior Vice President Communications

Safe Harbor Statement

This presentation contains forward looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our earnings reports and our most recent annual report for a better understanding of these risks and uncertainties.


CARL-HENRIC SVANBERGPresident and CEO

2007-04-26© Copyright Telefon AB LM Ericsson 2006. All rights reserved FIRST QUARTER REPORT 2007

Good start of the yearStable market growth

– Mobile subs 2.9 b. - mobile data traffic tripled - fixed BB 280 m

Solid performance– 8% growth – stable margins

Extended leadership– Market share gains – strategic acquisitions

Technology leadership – global presence – operational excellence


Networks

New organization in place

Professional Services Multimedia


Sales 29.3 bOper margin 17%Growth, YoY 5%

Sales 9.5 bOper margin 15%Growth, YoY 15%

Networks

New reporting information

Professional Services

Sales 3.4 bOper Margin 8% Growth, YoY 19%

Multimedia


Networks

Mobile systems Will be reported at least through 2007

Professional Services Multimedia

Mobile systemsQ1 sales growth of 6%

Mobile networksand rollout

Parts of systemintegration

Mobile multimedia systems


Group sales SEK 42.2 (39.1) b.* – Growth of 8% - USD down 11% - tough US comparison

Gross margin 43.0% (43.5%) - up sequentially 0.8%

Operating margin 19.3% (16.7%)– Operational excellence work and Sony Ericsson

Q1 financial highlights

*excl. divested operation


Q1 financial highlights (cont’d)

Operating income SEK 8.2 (6.6) b., up 23% year-over-year

EPS SEK 0.37 (0.29), up 28% year-over-year

Operating cash flow SEK 4.6 (2.4) b.– Sony Ericsson prepaid dividend 3.5 (1.2) b.

– Increased working capital 4.7 b. due to large projects

Net cash SEK 29.1 (33.7) b.– Redback/Entrisphere paid as well as shares in Tandberg


Comments to cash flow development

200 + due days

Turnkey projectPrevailing in CEMA and APAC

Separate contracts for shipment and installationPrevailing in Western Europe and Americas

HW / SW

60 + due days 40 + due days

NRO Services

Progress payments

Two typical types of contracts


Comments to cash flow development

Turnkey projects growing in importance~ 60% of total growth 2003-2006

~ 70% of total growth in 2006

CEMA and APAC, majority turnkey, longer payment terms~ 65% of total growth 2003-2006

~ 75% of total growth in 2006


Turnkey capabilities a competitive tool

As key as technology leadership in driving market share

Builds working capital - but with healthy margins

Collections has never been an issue

Cash generation of 70 b 2003-06 versus 3.7 b 1990-99


Networks

Stable growth and marginsContinued GSM and mobile broadband momentum Data doubled last 6 months in HSPA networksIntegration of acquired companies well on track

First quarter2007 2006

First quarter Change

Net salesOperating margin

29.3 28.0 5%17% -17%

Net

wor

ks

Growth outside US amounted to 14%


Growth of 15% – in local currencies 20% – Managed services up 11%, in local currencies up 15%

Stable marginsInnovative spare parts management contract with Vodafone

– First European-wide deal – setting new trend

Pro

fess

iona

l S

ervi

ces

2007 2006

Professional Services

Operating margin

9.5 8.3 15%

15% -15%

Of which Managed services 11%2.6 2.3

1 billion subs supported – 120 million under management

First quarter First quarter Change

Net sales


Multimedia

Strong growth driven by EMP and revenue managementSignificant margin improvements - could vary near termTandberg a great addition in fast growing segment

– Adds products, competence, customers

Mul

timed

ia

2007 2006

Net sales 3.4 2.8 19%8% -3%

First quarter First quarter Change

Operating margin


MultimediaM

ultim

edia

2007 2006

Net sales 3.4 2.8 19%8% -3%

First quarter

Video Head-End

Middle-wareSystems

VOD Platform

System Integration

Telecom Infrastructure

Content Management

First quarter Change

Operating margin

Strong growth driven by EMP and revenue managementSignificant margin improvements - could vary near termTandberg a great addition in fast growing segment

– Adds products, competence, customers


Regional update, Q1 2007- Ericsson sales (BSEK) and growth (%) year-over-year

Mobile networks sales up – primarily southern EuropeAccelerating traffic creating transmission bottlenecksContinued strong focus on managed services

Western EuropeQ: 12.5 b. +9%


Regional update, Q1 2007 - Ericsson sales (BSEK) and growth (%) year-over-year

High activity level – particularly in Sub-SaharaMiddle East slower in Q1 but good business momentumNew licenses e.g. Saudi, Egypt – Russia preparing for 3G

Central & Eastern Europe,Middle East & Africa

Q: 11.4 b. +9%



Continued high activity, eg. Japan, Bangladesh, IndonesiaIndia strong momentum 2G and 3G - BSNL court case endedGrowing 2G in China while waiting for 3G

Asia PacificQ: 11.9 b. +36%



Increasing subscribers and traffic – recovery on its wayTelefónica and América Móvil preparing for 3GManaged services in increased focus

Latin AmericaQ: 3.3 b. -9%



Tough comparison with Q1 2006 Focus on triple play and fixed and mobile broadbandConsiderably strengthened position through acquisitions

North AmericaQ: 3.1 b. - 41%


Sony Ericsson Q1 highlights

Units shipped up 63% to 21.8 million“Wow” products drive success – also in entry segmentsASP down from expanded portfolio – stable margins

More than 110 m. music enabled phones to date


Sony Ericsson highlights

More than 110 m. music enabled phones to date

Q1 sales up 47% to EUR 2.9 b.Q1 NIBT up 139% to EUR 362 m.Strong growth in Europe, Latin America and Asia Pacific


Market outlook

.

Well positioned to capture market opportunities*Measured in USD, this slide contains forward-looking statements

For 2007 we believe that the GSM/WCDMA track within the global mobile systems market, will continue to show mid-single digit growth*

Addressable market for professional services to show good growth*


Q & A


Documents

FIRST QUARTER REPORT 2007Please read our earnings reports and our most recent annual report for a better understanding of these risks and uncertainties. 2007 FIRST QUARTER REPORT CARL-HENRIC