© Ericsson AB 2014 | 2014-09-21 | Page 1

Agenda

10:30AM - 12:00PM

Winning in the Networked Society

HANS VESTBERG President & CEO

Ericsson’s Sustainability and Corporate Responsibility

initiatives, an integrated part of the Networked Society

ELAINE WEIDMAN-GRUNEWALDVice President Sustainability and Corporate Responsibility

Q&A

Lunch12:00PM

© Ericsson AB 2014 | 2014-09-21 | Page 2

Safe Harbor

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.

winning in the networked society

Hans Vestberg, President & CEO

© Ericsson AB 2014 | 2014-09-21 | Page 4

35,000

25,000

$5B 64,000

2.5 billion

1 billion

180

114,000

Subscribers

managed by us

Subscribers

supported by us

Services

professionals

LTE smartphone traffic

handled by our networks

Employees

Countries with

customers

R&D Employees

Patents

In R&D

$35B Net Sales

Ericsson at a glance

MOBILE INFRASTRUCTURE

OSS&BSS

SERVICES

MEDIA DELIVERY & IPTV

50%

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› ericssontransformation

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Business Mix Changing

1999

27%Services &Software

2008

60%Services &Software

2013

66%Services &Software

73%Hardware

40%Hardware

34%Hardware

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Competition transforming

1999

MANY

~15 vendors

SEVERAL

2013

MANY

Telecom

FEW

ICT ICT ICT

SEVERAL

~10 vendorsTelecom

FEW

~5 vendorsTelecom

2008

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Our People

1999

103,290Employees

43,500 in Sweden

2008

78,740Employees

20,155in Sweden

2013

114,340Employees

17,858in Sweden

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› The networked society & Ericsson strategy

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› Foundation for innovation

› Broad application

› Transforming society

the Networked societyWe are at the ICT inflection point

MOBILITY - BROADBAND - CLOUD

INSTALLATION DEPLOYMENT

More efficiently solving old

problems - winners among

old players

Applying paradigm to innovate

across society – new winners

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Key technology enablers

Flexible deployment of

virtualized functionality

across the network

Dynamic, on-demand

pooling and scaling of

resources

New simplified mechanism for

Control, Orchestration &

Management

NFV CLOUDSDN

Virtualize ScaleSimplify

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re-thinking industry roles

Applications & Services

Platforms & Systems

Connectivity & Infrastructure

USERS, CONTENT & DEVICES

Service Platform Developer

Service Producer

ServiceCreator

ServiceEnabler

NetworkDeveloper

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What Ericsson brings

Innovation and Revenue Growth

OSS&BSS and Process transformation

Network Evolution Service

CreatorServiceEnabler

NetworkDeveloper

Service Platform Developer

Service Producer

USERS, CONTENT & DEVICES

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Long term growth strategy

Establish leadership

in targeted areas

IPNetworks

OSS&BSS

TV &Media

2

Cloud

Expand business in

new areas3

Mobile

Enterprise

M2M

IS/IT

Services

Analytics

Excel in core business

Radio, Core

& Transmission

Telecom

Services

1

Future/

Emerging

Present/

Large Industry & Society

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Strategy execution

Establish leadership

in targeted areas

IPNetworks

OSS&BSS

TV &Media

Modems

2

Cloud

Expand business in

new areas3

Mobile

Enterprise

M2M

IS/IT

Services

Analytics

Excel in core business

Radio, Core

& Transmission

Telecom

Services

1

Future/

Emerging

Present/

Large

- Microsoft Mediaroom, Sep 2013- Azuki Systems, Feb 2014- Red Bee Media, May 2014- Fabrix Systems, Sep 2014

- Telcocell, Sep 2013

- MetraTech, July 2014

- Partnership Ciena, Feb 2014

- Apcera, Sep 2014

Industry & Society

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Modems announcement

› All development and sales of new

LTE thin modems discontinued,

current customer commitments on

M7450 maintained

› Redirecting investment from modems

to radio networks to better capture

opportunities

› Shifting parts of Modems’ resources

into Radio R&DSeptember 18, 2014

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Changed marketdynamics

Reduced addressable market for thin modems

› ModAps gaining ground in premium segment› Market leader’s strong position with one of the two key OEMs

Strong competition

› Accelerating pace of technology innovation› Causing rapid price erosion

Need for significant increase in R&D spend

› To establish annual product cadence› To keep up with accelerated pace of technology innovation

Lower Volumes

Higher Cost

Lower Prices

Ericsson has

decided to shift

away from

modem

development to

increase focus

on opportunities

in radio

networks

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› Acquire majority stake in Apcera, creator of the

next-generation platform as-a-service (PaaS) -

Continuum™

› Strengthens Ericsson’s position in cloud market

by extending the network approach into

operator and enterprise cloud

› Commits to significant funding for Apcera’s

technology development and global expansion

of its enterprise sales channel

› Entry of former Google, VMware, Microsoft

executives and engineers into Ericsson

APCERA

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› Continuum™ customer benefits

– Radically simpler infrastructure

– Automation - >Time to Market

– Policy control -> Trust

› Market potential

– USD 4.7 b. PaaS market addressable for

Ericsson

– Aim to reach a leading position by 2017

› Go to Market

– Apcera direct and indirect through enterprise

sales channels

– Ericsson use the strength of existing global sales

organization

› Sales and R&D ramp

– Recruitment to meet expected demand

– The best product in the PaaS space and we

intend to keep it that way

APCERA

Ericsson’s Sustainability and Corporate Responsibility initiativesElaine Weidman-Grunewald, Vice President Sustainability and Corporate Responsibility

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Sustainability & CORPORATE RESPONSIBILITY journey

2004

1.0STRONG FOUNDATION

BUILT ON TRUST.

2.0EMBED IN EVERYTHING

WE DO.

2014 2020

3.0CREATE SUSTAINABLE

ECOSYSTEMS

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BUILDING LONG-TERMSHAREHOLDER VALUE

We strive to be a responsible and relevant

driver of positive change by

› Continuously improving our sustainability

performance

while

› minimizing risks to our brand, and our

customers’ brand

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key focus areas

COMMUNICATION

FOR ALL

CONDUCTING BUSINESS

RESPONSIBLY

ENERGY, ENVIRONMENT AND

CLIMATE

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Ecovadis gold

Ericsson is in the top 2% of suppliers

assessed by EcoVadis in all categories

(approx. 10,000 suppliers)

Ericsson score: 79/100 Used in procurement by

18 customers

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Conducting Business Responsibly

Our aim is to act with responsibility, accountability and transparency

as we help to build the Networked Society

› Human Rights

› Occupational Health and Safety

› Product Take-back

› Anti-corruption

› Advocacy

SALES COMPLIANCE

RESPONSIBLE

SOURCING

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Sales complianceboard

200+ Cases reviewed in 2013

Myanmar & Iran Human rights impact assessment

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Improving

Environmental

Performances

Zero tolerance for

Corruption and

Bribes

Zero

Occupational Health &

Safety Incidents

Respecting

Human Rights

Zero Occupational,

Health & Safety

Incidents

Responsible sourcing

Require assess approve

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Responsible Sourcing

Code of Conduct a key factor

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ENERGy, Environment and Climate

OUR OWN IMPACT PRODUCT PORTFOLIO LOW-CARBON ECONOMY

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Case study – robi, south east asia

Customer Benefits:

UP TO 42% reduced electricity consumption

1000 LITRES less diesel for off-grid sites

64% LONGER battery life

40% FASTER Time to Market

Up to 67% lower towerrental cost

34% reduced spare parts

High cost of energy limiting network growth

Network Modernization (3G overlay over

2G) using a low-traffic optimized base

station solution

Paves the way for continued network capacity growth

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Creating a Low-carbon Economy

› Greater utilization of ICT is critical for the transformative change needed to

create a low-carbon economy through:

‒ Smarter and more sustainable cities

‒ Rethinking how mobility, broadband and cloud solutions will transform and optimize

nearly every industry

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significant Markets

› Smart Grid Comm.

› Smart Meeting

› Asset Mgmt. & Critical infra System

› Customer & Revenue Mgmt.

› Grid Control

UTILITIES

› ICT infra for road and rail

› Connected Vehicle

› Connected Vessel

› Transport transactions

› Traffic Management

TRANSPORT

› Public Safety LTE

› Strategic Networks

› Critical Infrastructure Protection

› Emergency Response

PUBLIC SAFETY

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Communication for

All

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› ASBANC formed a “Committee for Electronic

Money” aiming at financial education and

accessibility for Peru’s unbanked population.

› Ericsson won the contract with our unique

approach to help ASBANC develop the customer’s

mobile financial service ecosystem in Peru.

› Complete Mobile Financial Services’ HUB to

enable all ecosystem actors to interconnect and

provide a white label M-Wallet, est. 5 million

users by 2020

› This project is the first worldwide in this kind

where all financial institutions in a

country decided to join efforts to develop a Mobile

Money Platform to provide mobile financial

services to the unbanked people

Social and financial inclusionperu

Reaching the

unbanked!

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Q&A