REG - Telefon AB Ericsson - Ericsson changesGroup structure and Executive Team

Telefonaktiebolaget LM EricssonAnnouncement

18/05/2022 09:30

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RNS Number : 9204L  Telefonaktiebolaget Lm Ericsson  18 May 2022

Ericsson changes Group structure and Executive Team to execute on growth
strategy

·    To capitalize on the convergence of software and services and deliver
growth in the core business, a new Business Area Cloud Software and Services
is introduced, combining Business Area Digital Services and Business Area
Managed Services. Per Narvinger will head up the unit and will be a member of
the Ericsson Executive Team.

·    A new Business Area Enterprise Wireless Solutions, comprising
Cradlepoint and Dedicated Networks, is created to drive the growth plan for
enterprise. George Mulhern is appointed head of the unit and will be a member
of the Ericsson Executive Team.

·    To simplify and digitalize overall ways of working, a new Group
Function Global Operations is introduced. Moti Gyamlani will head up the unit
and will be a member of the Ericsson Executive Team.

·    Arun Bansal, Jan Karlsson and Peter Laurin will leave the Executive
Team.

·    The new Group structure will take effect June 1, 2022.

Ericsson's (NASDAQ: ERIC) strategy is to be a leader in mobile infrastructure
and to establish an enterprise business. Today, Ericsson announces changes to
the group structure and Executive Team to position itself to execute on its
strategy and growth ambitions while continuing to invest in R&D to
maintain its technology leadership. The new Executive Team roles and the new
organization will take effect June 1, 2022.

Business Area Cloud Software and Services

To lead in the mobile infrastructure business, a Business Area Cloud Software
and Services is created by merging Business Area Digital Services and Business
Area Managed Services. This will enable Ericsson to capitalize on the
convergence of cloud, software and services. Through the new structure,
Ericsson will be able to leverage investments in R&D, increase cloud
native expertise and build its combined offerings for automation and AI for
service delivery. This will allow Ericsson to build on the success in recent
years which includes strong development in the cloud native 5G core portfolio
where 16 out of the 20 largest operators globally have chosen Ericsson.
Managed Services has undergone a significant transformation in recent years
with the introduction of the AI-driven Ericsson Operation Engine, enabling
proactive and predictive network and IT operations and optimization, and a
shift towards a more software-driven offering.

Per Narvinger is appointed Senior Vice President and head of Business Area
Cloud Software and Services and will be a member of the Ericsson Executive
Team. Narvinger is currently Head of Product Area Networks within Business
Area Networks.

Jan Karlsson, currently head of Business Area Digital Services, will leave the
Executive Team and instead drive the development of the Global Network
Platform, reporting to CEO Börje Ekholm. As previously communicated, Peter
Laurin, currently head of Business Area Managed Services will leave Ericsson
for opportunities outside Ericsson.

"Through the new Business Area Cloud Software and Services we provide
solutions that will help our customers automate the increasingly complex
networks for cost advantages and speed to market. By combining the two
business areas we can coordinate our investments in orchestration and AI
solutions leveraging insight from our network operations. This will allow us
to remain a technology leader in a constantly evolving market. I look forward
to working with Per as we take the next steps in reaching Ericsson's growth
ambitions. I also want to thank Jan and Peter for their contributions to the
Executive Team. They have both been instrumental in executing on our focused
strategy and Ericsson's turnaround", says Börje Ekholm.

Business Area Enterprise Wireless Solutions

A new Business Area Enterprise Wireless Solutions, comprised of the current
Cradlepoint business and Dedicated Networks, is created to take full
accountability and focus to develop solutions to meet the growing needs of
enterprises and create a dedicated go-to-market organization for enterprise
customers including leveraging the established relationship with service
providers. The new Business Area will enable Ericsson to build on recent
success which includes strong growth for Cradlepoint as 5G coverage increases
on the US C-band and the launch of Ericsson Private 5G (EP5G) in several
leading markets.

George Mulhern is appointed Senior Vice President and head of Business Area
Enterprise Wireless Solutions and will be a member of the Ericsson Executive
Team. Mulhern is currently CEO of Cradlepoint.

Åsa Tamsons will continue in her role as Senior Vice President and head of
Business Area Technologies & New Businesses which will continue to focus
on developing new business solutions to accelerate growth across Ericsson's
core and enterprise businesses - building on the successful model established
to incubate new growth businesses, such as Dedicated Networks and Cradlepoint.

"With this change we are taking important steps in our journey to execute on
our strategy. The new Business Area Enterprise Wireless Solutions will provide
the focus and conditions we need to thrive in the enterprise market and secure
the next wave of success for this business. We are also excited to continue to
invest in new businesses for our long-term growth through the proven model
established in Business Area Technologies & New Businesses. I want to
extend a warm welcome to George as he joins Ericsson's Executive Team", says
Börje Ekholm.

Group Function Global Operations

The company is also changing its group function structure by adding a Group
Function Global Operations. This function will combine the many support
functions that are currently spread across the Company, including Sourcing,
IT, Digital Transformation, Group Sales, Real Estate and the operations parts
of the People and Finance Functions. By creating a global operations function,
Ericsson will be able to run its global operations more effectively and
consistently across the organization.

Moti Gyamlani is appointed Senior Vice President and head of Group Function
Global Operations and will be a member of the Ericsson Executive Team. Moti is
currently working as Head of Group Sourcing.

"Global Operations is created to achieve best-in class customer and employee
experience by simplifying and digitalizing end-to-end process flows in the
company. By creating this function, we will be able to better serve the needs
of our customers and better support our people, making us more agile and more
competitive. It is great to welcome Moti to the Executive Team and look
forward to working together with him to create a world class global operations
function", says Börje Ekholm.

Executive Team changes

Arun Bansal, currently Executive Vice President and Head of Market Area Europe
and Latin America, will leave the company to pursue other opportunities and
will therefore step down from his EVP role with immediate effect. He has been
with Ericsson since 1995 and has been in his current role for the last five
years. The Acting Head of Market Area Europe and Latin America will be
announced separately.

"Arun has been leading our Market Area Europe and Latin America for the last
five years and has been instrumental in driving change across the
organization, and in establishing and nurturing some of our most important
customer relationships. I wish Arun all the best in his future endeavors",
says Börje Ekholm.

"After turning around the company, Ericsson is entering a new phase of growth.
The changed group structure that we announce today represents exciting
opportunities for our people, our customers and our business and will allow us
to continue to grow our core mobile infrastructure business and capitalize on
the fast-growing enterprise market. Within 2-3 years, we want to achieve our
long-term goal of growing faster than the market and an EBITA margin
(excluding restructuring costs) of 15-18% for the Group. I look forward to
working together with the new Executive Team, and the whole Ericsson team, as
we accelerate our work to execute on our strategy, strengthen our company
culture and continue to grow the company with increased profitability",
concludes Ekholm.

Reporting segments

Following the new group structure, Ericsson will have the following reporting
segments:

·      Segment Networks (unchanged)

·    Segment Cloud Software and Services (corresponding to former Digital
Services and Managed Services)

·    Segment Enterprise (Enterprise Wireless Solutions and Technologies
& New Businesses). On completion of the acquisition, Vonage will form a
separate Business Area included in this segment.

·    Segment Other (including media businesses and one-offs)

The new segment reporting structure will be applied from Q3 2022. Restated
financials for new segments for 2020 - 2022 will be published in September
2022 ahead of the Q3 quarterly report.

 

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About Ericsson
Ericsson enables communications service providers to capture the full value of
connectivity. The company's portfolio spans Networks, Digital Services,
Managed Services, and Emerging Business and is designed to help our customers
go digital, increase efficiency and find new revenue streams. Ericsson's
investments in innovation have delivered the benefits of telephony and mobile
broadband to billions of people around the world. The Ericsson stock is listed
on Nasdaq Stockholm and on Nasdaq New York. www.ericsson.com
(http://www.ericsson.com)

Forward-looking statements

This release includes forward-looking statements, including statements
reflecting management'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:

- Our goals, strategies, planning assumptions and operational or financial
performance expectations

- Industry trends, future characteristics and development of the markets in
which we operate

- 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.

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