Ericsson (NASDAQ: ERIC) President and CEO Hans Vestberg presented an overview of the company's 2012 financial performance, key business developments and governance framework at the Annual General Meeting of Shareholders in Stockholm, Sweden.
Vestberg said: "Our sales in 2012 were basically flat compared to 2011. We reported sales of SEK 227.8 billion for the year, which is more than 600 million per day. We saw variation in growth for the different segments, but overall we are not satisfied with profitability."
For two of Ericsson's three business segments, Global Services and Support Solutions, business grew and Vestberg highlighted a new acquisition within IPTV.
"We help our customers create and deliver TV and video services with the best picture quality and end-user experience for interactive TV services. Our TV solutions now have over 2000 customers globally.
Yesterday we announced the acquisition of Microsoft's IPTV solution, called Mediaroom, which will make Ericsson the leading provider of IPTV and multi-screen solutions with a market share of over 25%," he said.
From 2011 to 2012, sales grew 16% for Global Services. The segment, with 60,000 employees, represents more than half of Ericsson's global workforce. Key deals within Managed Services were highlighted during the shareholders' meeting and Vestberg said that customers are seeking more consulting and systems integration capabilities.
Within Networks, Ericsson remains market leader with 35% of mobile network equipment market and has twice the size of installed base as the number two and three-ranked players combined. While 2011 was stronger than 2012 for Networks, the segment represents 51% of the company's sales, and during the year, Ericsson won key deals for LTE delivery in North East Asia, Brazil, and North America.
Illustrating how the world is moving toward a Networked Society, Vestberg reviewed business deals from 2012 with industries such as shipping, utilities, and IT. "We stand strong in the transformation toward Information and Communications Technology, successfully reshaping our business while not losing sight of our unique competitive advantages," he said.
Wherever Ericsson works in the world, making a positive impact and conducting business responsibly is prioritized. Vestberg invited Elaine Weidman-Grunewald, head of Sustainability and Corporate Responsibility, onstage to outline the highlights of the newly-released 2012 Sustainability and Corporate Responsibility report.
Weidman-Grunewald said: "The theme of our report is Technology for Good, which summarizes our firm belief that mobile broadband is a transformational technology that can help address global sustainability challenges.
"Our 2012 performance can be briefly described in three key focus areas: The positive impact of mobile broadband, energy continued. and climate change, and conducting business responsibly," she
She covered specific activities that Ericsson is driving in the areas of human rights, and anti-corruption. She said: "We have updated our Code of Business Ethics to reflect the new UN Guiding Principles for Business and Human Rights as well as initiated a two-year business learning program on human rights and business.
"Our Zero tolerance for corruption sets a high bar for responsible business and during the year we joined the Partnering Against Corruption Initiative, PACI, established by members of the World Economic Forum, to counter bribery and provide a platform for corporate anti-corruption programs," Weidman-Grunewald concluded.
Vestberg wrapped up his presentation to shareholders by awarding three Ericsson employees the title "Inventor of the Year." Together, the three engineers are behind 292 patent applications, related to antenna and radio technology within HSPA and LTE.
Vestberg said: "We continuously aim to create a culture where our colleagues can be creative and contribute to Ericsson's ability to always be on the cutting edge, and create new technologies as well as invent new solutions.
"Bo Göransson, George Jöngren, and Henning Wiemann are some of the many fantastic examples of the unique competence, experience and professionalism that our 110,255 employees bring to work every day.
Their work is extremely important to ensure Ericsson's leadership," Vestberg concluded.