SEC Form 6-K filed by Ericsson

Amounts marked with an ‘*’ in this document represent sales growth adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations, also named organic sales growth. These numbers present performance on a comparable basis to improve the comparability of results between periods. Organic sales growth figures are non-IFRS measures. ‘Adjusted’ metrics are adjusted to exclude restructuring charges and are non-IFRS measures. This is a change in nomenclature only. See ‘Financial statements and other information’ for Alternative performance measures.

Net sales

Sales decreased by -7%*, reflecting reduced operator investment levels across most geographies. The sales decline was due to a -11%* decrease in Networks, as a return to growth in North America was more than offset by lower customer investment levels, primarily in India, after record investment levels in 2023. Organic sales were stable in Cloud Software and Services, and in Enterprise. Reported Group sales decreased by -7% to SEK 59.8 (64.4) b.

A new 5G patent licensing agreement was signed in the quarter and the IPR licensing revenue increased to SEK 3.9 (3.2) b., of which a portion related to retroactive revenue for unlicensed periods. Following new agreements, the Company is on track to deliver its 2024 IPR revenue target of SEK 12-13 b. 82% of IPR licensing revenues are reported in segment Networks, with the remainder in Cloud Software and Services. Opportunities to further grow IPR licensing revenues remain.

Gross income and margin

Adjusted gross margin increased to 43.9% (38.3%) driven primarily by improved gross margin in Networks. This was supported by increased IPR licensing revenues, cost-reduction actions and competitive portfolio offerings. Gross margin also increased in Cloud Software and Services, and in Enterprise. Adjusted gross income increased to SEK 26.3 (24.7) b. as the strong increase in gross margin was partly offset by lower sales.

Reported gross income increased to SEK 25.8 (24.1) b., with a gross margin of 43.1% (37.4%).

Impact of impairment

The second quarter results include a non-cash impairment loss, relating to the impairment of intangible assets mainly attributed to the Vonage acquisition. This had a SEK -13.9 b. negative impact on operating expenses in the quarter. Full details on the impairment impacts are provided in note 10 in the Financial statements and other information.

Research and development (R&D) expenses

R&D expenses increased to SEK -14.9 (-13.8) b., including a SEK 0.9 b. benefit from lower restructuring charges and a SEK -1.2 b. impact relating to the impairment of intangible assets.

Excluding restructuring and impairment impacts, R&D expenses increased by SEK -0.8 b. YoY. Investments in R&D for technology leadership and operational resiliency, as well as the impact from salary increases, higher variable incentive accruals, and the discontinuation of capitalization of development expenses in Enterprise, were partially offset by savings from cost reduction actions.

Selling and administrative (SG&A) expenses

SG&A expenses increased to SEK -23.1 (-10.6) b. including a SEK -12.6 b. impact relating to the impairment of intangible assets, and a SEK 0.6 b. benefit from lower restructuring charges. Excluding these impacts, SG&A expenses increased by SEK -0.4 b. YoY, as the benefit of cost actions was offset by salary increases, higher variable incentive accruals, and investments in Enterprise.

Other operating income and expenses

Other operating income and expenses were SEK -1.3 (0.3) b. reflecting a SEK -1.3 b. impact from the impairment charge.

Restructuring charges

Restructuring charges amounted to SEK -1.6 (-3.1) b. mainly related to redundancy activities. Gross income included SEK -0.5 (-0.6) b. of restructuring charges, while restructuring charges in operating expenses were SEK -1.2 (-2.6) b.

EBITA

Adjusted EBITA increased by 10% YoY to SEK 4.1 (3.7) b., as higher gross income was partly offset by increased operating expenses. The adjusted EBITA margin was 6.8% (5.7%).

EBITA increased to SEK 2.4 (0.5) b. corresponding to an EBITA margin of 4.1% (0.8%).

EBIT (loss)

Adjusted EBIT (loss) decreased to SEK -11.9 (2.8) b. including a SEK -15.1 b. impairment charge impact. The adjusted EBIT margin was -19.9% (4.4%). Excluding the impairment charge, adjusted EBIT would have been SEK 3.2 b. Amortization impacted EBIT by SEK -0.8 (-0.9) b.

Reported EBIT (loss) decreased to SEK -13.5 (-0.3) b. with an EBIT margin of -22.6% (-0.5%), including a SEK -15.1 b. impairment charge impact.

Financial income and expenses, net

Financial income and expenses were stable at SEK -0.4 (-0.4) b. The currency hedge effect was SEK 0.0 (-0.1) b.

Income tax

Taxes were SEK 2.9 (0.1) b. The reported positive tax is a result of the negative income after financial items and includes a SEK 3.7 b. tax benefit resulting from the impairment of intangible assets. Excluding the impairment impact, a tax rate of 30% is expected for the full year. Excluding the impact of impairments the full year 2023 tax rate was 32%.

Net income (loss)

Net income (loss) decreased to SEK -11.0 (-0.6) b., including a SEK -11.4 b. net impact from the impairment. Diluted EPS decreased to SEK -3.34 (-0.21).

Employees

The number of employees on June 30, 2024, was 97,985 compared with 99,140 on March 31, 2024.

Conclusion of Monitorship

On June 3, 2024, Ericsson announced the conclusion of the work and term of the independent compliance monitor originally appointed by the DOJ in June 2020 in connection with the DPA. The monitorship and Plea Agreement concluded on June 2, 2024. The Company is continuing to cooperate fully with DOJ and SEC investigations related to historical conduct.

Vodafone Idea Transaction

In June 2024, Ericsson India Private Limited entered into an agreement with Vodafone Idea Limited (“VIL”) to settle outstanding accounts receivables, and to take an equity stake in VIL. The transaction was placed before the shareholders of VIL at a meeting held on 10 July 2024 and approved. The impact of the transaction is expected to be recognized in the Company’s Q3 results. The shares will be subject to a six-month lock up period.

Financial highlights, year-to-date (Jan-June) development

Sales decreased by -10%* mainly driven by a -15%* decline in Networks. Cloud Software and Services sales declined by -1%* and Enterprise grew by 1%*.

Reported sales decreased by -11% to SEK 113.2 (127.0) b. mainly driven by a -16% sales decline in Networks to SEK 71.4 (84.9) b. Sales in Cloud Software and Services declined by -1% to SEK 28.2 (28.5) b. and Enterprise sales grew by 1% to SEK 12.5 (12.4) b.

The decline in sales was primarily a result of materially lower sales in market area South East Asia, Oceania and India, as investment levels in India have normalized after a record year in 2023. Sales declined organically in all market areas except Middle East and Africa, which was stable. Sales were supported by IPR licensing revenues of SEK 7.0 (5.7) b.

Adjusted gross income decreased slightly to SEK 49.1 (49.6) b. while gross margin increased to 43.4% (39.0%). The improvement in gross margin was driven by a more favorable market mix, cost reduction initiatives, and increased IPR licensing revenues. Reported gross income was SEK 48.5 (48.3) b. with a gross margin of 42.8% (38.0%).

Adjusted EBITA increased to SEK 9.2 (8.5) b. with a margin of 8.1% (6.7%). Lower gross income and increased operating expenses were more than offset by a one-time gain of SEK 1.9 b. in Q1 2024. EBITA increased to SEK 7.3 (4.4) b. and the EBITA margin was 6.5% (3.5%).

Adjusted EBIT (loss) was SEK -7.6 (6.8) b. with a margin of -6.7% (5.4%), including a SEK -15.1 b. impairment charge impact. Amortization of intangible assets was SEK -1.6 (-1.7) b. Reported EBIT (loss) decreased to SEK -9.4 (2.7) b., and the EBIT margin was -8.3% (2.2%).

Net income (loss) declined to SEK -8.4 (1.0) b. including a SEK -11.4 b. impairment charge impact and restructuring charges of SEK -1.8 (-4.1) b. Excluding these impacts, operating expenses increased by SEK -0.4 b. YoY. The net income decline was partly offset by lower taxes, which were SEK 2.3 b. lower YoY. Diluted EPS decreased to SEK -2.57 (0.25).

Market Area North America

Sales increased by 14%* YoY. Networks sales increased by 20%* as some larger customers selectively increased network investments. Sales benefited from recent contract wins, and further support is expected in the second half of 2024. Cloud Software and Services sales declined by -7%* due to project phasing. Reported sales increased by 15% YoY.

Market Area Europe and Latin America

Sales decreased by -3%* YoY. Sales in Europe declined slightly, due to lower operator network investments and managed services volumes. In Latin America, sales decreased due to lower network investments, and competition increased. Reported sales declined by -2% YoY.

Market Area South East Asia, Oceania and India

Sales decreased by -44%* YoY. Networks sales declined primarily in India as investment levels have normalized after a record year in 2023. Cloud Software and Services sales increased, benefiting from the completion of project milestones. Reported sales declined by -44%.

Market Area North East Asia

Sales declined by -3%* YoY as a result of more normalized investment levels in several markets after significant 5G radio and core network deployments in recent years. Reported sales declined by -10% YoY.

Market Area Middle East and Africa

Sales declined by -8%*, primarily due to macroeconomic headwinds and a slowdown in operator capex investments in several markets. Reported sales decreased by -8% YoY.

Market Area Other

Market area Other primarily includes IPR licensing revenues and almost all sales in segment Enterprise. Sales increased by 7%* driven by IPR licensing revenues, benefiting from recent new agreements. Reported sales increased by 7%.

Mobile Networks – Segment Networks

Breakdown of sales into products, services and IPR licensing is available in note 3.

Net sales

Sales decreased by -11%* YoY, reflecting reduced customer investment levels across most geographies. Sales increased by 12% sequentially, ahead of usual seasonality, benefiting from a return to growth in North America. Reported sales decreased by -11% to SEK 37.7 (42.4) b.

Sales in market area North America increased by 20%* as some larger customers selectively increased network investments, and declined in the other market areas. In market area South East Asia, Oceania and India sales declined by -55%*, primarily due to lower operator capex investments in India, after record investment levels in 2023. IPR licensing revenues increased, as a result of a new licensing agreement signed in the quarter.

Gross income and margin

Adjusted gross margin increased to 46.1% (39.3%), as a result of a favorable business mix with an earlier than anticipated impact from selective capex investments in North America, and higher IPR licensing revenues. In addition, the gross margin was supported by cost-reduction initiatives and a competitive portfolio offering. Adjusted gross income increased to SEK 17.4 (16.7) b.

EBITA

Adjusted EBITA increased to SEK 5.3 (4.9) b. YoY and the EBITA margin was 13.9% (11.4%). The benefit of higher gross income and continued efficiency improvements was partly offset by increased R&D investments. These R&D investments support the strategy to build high-performance programmable networks.

Net sales rolling four quarters were SEK 157.9 b. and the adjusted EBITA margin rolling four quarters was 14.0%.

Mobile Networks – Segment Cloud Software and Services

Breakdown of sales into products, services and IPR licensing is available in note 3.

Net sales

Sales were stable* YoY, with slight growth in core networks offset by lower sales elsewhere in the portfolio. Sales increased by 16% sequentially, ahead of usual seasonality. Sales grew in market area South East Asia Oceania and India as a result of the completion of project milestones, while sales declined in other market areas. IPR licensing revenues increased YoY, benefiting from a new licensing agreement signed in the quarter. Reported sales were stable at SEK 15.2 b.

Gross income and margin

Adjusted gross margin increased to 37.2% (33.9%) as a result of improved delivery performance and commercial discipline, and a positive impact from increased IPR licensing revenues. Adjusted gross income increased to SEK 5.7 (5.1) b.

EBITA

Adjusted EBITA improved to SEK 0.1 (-0.3) b. with an EBITA margin of 0.6% (-1.9%). The improvement in gross income was partly offset by increased investments in the 5G portfolio and resiliency, to strengthen delivery performance.

Net sales rolling four quarters were SEK 63.3 b. and the adjusted EBITA margin rolling four quarters was 3.6%.

Enterprise – Segment Enterprise

Net sales

Sales were stable* YoY, as growth in Enterprise Wireless Solutions and Technologies and New Businesses was offset by lower sales in Global Communications Platform. Reported sales increased by 2% to SEK 6.5 (6.4) b.

Sales in Global Communications Platform were negatively impacted by the decision to reduce activities in some countries, as well as the earlier announced low-margin customer contract loss in Q4. These negative impacts are expected to continue during the year as more profitable market segments are prioritized.

Sales in Enterprise Wireless Solutions benefited from good customer demand for private cellular network solutions.

Gross income and margin

Adjusted gross income increased to SEK 3.3 (3.0) b. reflecting growth in sales and improved margins across all business areas. The adjusted gross margin increased to 51.1% (46.3%), benefiting from increased focus on more profitable market segments.

EBITA (loss)

Adjusted EBITA (loss) was SEK -1.2 (-0.8) b., as sales growth in Enterprise Wireless Solutions and Technologies and New Businesses was offset by higher operating expenses in Global Communications Platform. Adjusted EBITA margin was -18.9% (-13.2%).

Adjusted operating expenses were stable in Enterprise Wireless Solutions but increased in Global Communications Platform, due to the discontinuation of capitalization of development expenses as well as investments to efficiently meet contractual and regulatory requirements.

The focus on leveraging the current business to support the build-out of the Global Network Platform for network APIs continues, and during Q2 two additional partnerships with leading mobile network operators were announced.

Net sales rolling four quarters were SEK 25.8 b. and the adjusted EBITA margin rolling four quarters was -13.2%.

Segment Other

Net sales

Reported sales were stable at SEK 0.5 (0.5) b.

Gross income and margin

Adjusted gross income was SEK 0.0 (-0.1) b. mainly reflecting the divestment of IoT in Q2 2023. Adjusted gross margin increased to -7.5% (-22.6%).

EBITA (loss)

Adjusted EBITA (loss) was SEK -0.1 (-0.1) b.

Net sales rolling four quarters were SEK 2.4 b.

Cash flow

Free cash flow before M&A was SEK 7.6 (-5.0) b. primarily driven by a significant reduction in working capital, also benefiting from a one-time inflow of SEK 1.9 b. related to a one-time gain reported in Q1 2024.

Working capital benefited from a favorable change in market mix, significantly lower inventories, and a reduction in accounts receivables due to lower sales volumes.

In Q2 2023 free cash flow before M&A was negatively impacted by a SEK 2.1 b. payment to the U.S. Department of Justice (DOJ).

Cash flow from financing activities was SEK -5.7 (-7.1) b., primarily reflecting SEK -4.7 b. of dividends paid. A further payment of SEK -4.5 b., SEK 1.35 per share, will be paid in October to the shareholders of the parent company.

Financial position

Gross cash increased sequentially by SEK 1.7 b. to SEK 53.7 b. Ericsson has unutilized committed credit facilities of SEK 29.7 b. (USD 2.8 b.).

The average maturity of long-term borrowings was 3.9 years as of June 30, 2024, from 3.6 years in the prior year period.

Net cash increased sequentially by SEK 2.3 b. to SEK 13.1 b. driven by positive free cash flow after M&A.

Liabilities for post-employment benefits increased sequentially to SEK 26.1 b. from SEK 20.8 b. due to lower discount rate in Sweden. The Swedish defined benefit obligation (DBO) was calculated using a discount rate based on the yields of Swedish government bonds. If the discount rate had been based on Swedish covered mortgage bonds, the liabilities for post-employment benefits would have been approximately SEK 15.1 b., or SEK 11.0 b. lower than the reported liabilities.

Key data points

Market

Dell’Oro estimates that the global RAN equipment market will decline by -5% to -8% (-4%) in 2024. North America is expected to grow by 5% to 15% (10% to 20%), Europe to decline by -5% to -15% (0% to -5%) and Mainland China to decline by -5% to -10% (-5% to -10%).

Source: Dell’Oro Mobile RAN Quarterly Report Q124, May 2024. Numbers in parenthesis are from Dell’Oro Mobile RAN Quarterly Report Q423, Feb 2024.

Ericsson

Net sales

Reported average seasonality last 3 years (2021–2023), %.

Net sales may show large variations between quarters, including currency changes.

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 be around SEK -0.5 b. per quarter, of which approximately SEK -0.4 b. related to segment Enterprise.

Restructuring charges

Restructuring charges for 2024 are expected to be in the range of SEK 3.0-4.0 b.

Segments

Networks

Adjusted gross margin in Q3 is expected to be in the range of 45-47%.

Parent Company

Income after financial items January – June 2024, was SEK -7.1 (16.4) b. including impairment of investments in subsidiaries of SEK -11.0 b. in the second quarter.

At the end of the quarter, gross cash (cash, cash equivalents plus interest-bearing securities, current and non-current) amounted to SEK 40.0 (20.8) b.

There was a decrease in intercompany lending of SEK 1.8 b. and in intercompany borrowing of SEK 1.8 b. in the quarter.

At the end of the quarter, non-restricted equity amounted to SEK 10.9 (45.2) billion, and total equity amounted to SEK 59.2 (93.4) b.

The proposed dividend of SEK 2.70 per share (SEK 9.0 b.) was approved by the AGM on April 3, 2024. The first of two equal dividend payouts was made in the beginning of April 2024 and the record date of the second payout will be October 2, 2024.

The AGM 2024 resolved to issue 4,100,000 Class C shares for the Long-Term Variable Compensation Program LTV I 2023 for the company’s executive team. In accordance with an authorization from the AGM, the Board of Directors resolved to repurchase the new issued shares, which were subsequently converted into Class B shares. The quotient value of the repurchased shares was SEK 5.00, totaling SEK 20.5 million.

In accordance with the conditions of the long-term variable compensation program (LTV) for Ericsson employees, 704,982 shares from treasury stock were distributed or sold to employees in the second quarter. The holding of treasury stock on June 30, 2024, was 15,579,561 Class B shares.

Other information

Legal proceedings not involving governmental authorities

On March 3, 2022, Telefonaktiebolaget LM Ericsson (together with its consolidated operating companies and all other subsidiaries, “Ericsson” or the “Company”) 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 alleged 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. On May 24, 2023, the court granted Ericsson’s motion to dismiss and dismissed the case with prejudice, concluding that Ericsson did not violate any disclosure obligation to investors. On June 23, 2023, plaintiff filed a notice of appeal to the United States Court of Appeals for the Second Circuit. Following the submission of appellate briefing over the second half of 2023, oral argument for the appeal was held on March 22, 2024. The Second Circuit court took the matter under advisement and has not yet issued a decision. Ericsson will continue to vigorously defend this matter.

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. (collectively, the “Ericsson defendants”). The lawsuit was brought by US military service members, employees of US government contractors and other civilians 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 the Ericsson defendants under the US Anti-Terrorism Act alleging that the Ericsson defendants made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, the Ericsson defendants 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, and also named Ericsson AB (collectively with the Ericsson defendants, the “Ericsson corporate defendants”), CEO Börje Ekholm and a former employee (who has not been served with process) as additional defendants and also asserted additional allegations and claims. In March 2023, the Ericsson corporate defendants and Mr. Ekholm filed motions to dismiss the amended complaint. Plaintiffs filed their oppositions to defendants’ motions to dismiss the amended complaint in June 2023, and defendants filed reply briefs in support of their motions to dismiss in July 2023. All briefing has been submitted, and resolution of the matter is pending with the District Court. All defendants will continue to vigorously defend this matter.

In February 2024, a second civil lawsuit also alleging violations of the US Anti-Terrorism Act was filed in the United States District Court for the District of Columbia. The lawsuit was filed by the same law firm and involves substantially similar factual allegations and claims as those made in the Anti-Terrorism Act lawsuit originally filed in August 2022, and similarly names the same Ericsson corporate defendants, CEO Börje Ekholm and a former employee as defendants. The new lawsuit was brought by additional US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan, Syria, Turkey, Niger, and France from 2005 to 2021, as well as by their family members. The District Court for the District of Columbia has stayed the proceedings in this matter pending its decision on the motions to dismiss in the earlier-filed suit. The defendants will vigorously defend this matter.

Beginning on August 4, 2023, a number of civil lawsuits have been filed against Telefonaktiebolaget LM Ericsson in Solna District Court, Sweden. As of July 12, 2024, 93 claimants have filed suit, which are coordinated and financed by a UK-based litigation funder. The claimants consist of a group of non-Swedish funds and financial institutions that allegedly are or have been shareholders of the Company. Their damages claims are primarily based on alleged inadequate disclosure of the contents of the Company’s 2019 internal Iraq investigation report. Ericsson filed its statement of defense on March 15, 2024 and will continue to vigorously defend this matter.

On October 11, 2023, Ericsson commenced patent infringement proceedings against certain Lenovo entities (together “Lenovo”) in the Eastern District of North Carolina (“EDNC”). In the course of the proceedings, Ericsson seeks declarations that Ericsson has complied with its FRAND commitments and with the ETSI IPR Policy and that Lenovo has infringed Ericsson patents. Ericsson has also commenced patent infringement proceedings against Lenovo at the United States International Trade Commission (“ITC”) and in other jurisdictions (Brazil and Colombia). In return, Lenovo has filed lawsuits against Ericsson in the High Court of Justice in the UK, at the Unified Patent Court, at the ITC, in the EDNC, and has applied for an anti-suit injunction in the EDNC. On February 14, 2024, the EDNC denied the anti-suit injunction. This decision has been appealed. This is a global dispute, and additional lawsuits and other legal actions may be initiated by the parties.

The Company actively manages its IPR portfolio and its need for third party licenses and is involved from time to time, in the ordinary course of business, in litigation related thereto, as plaintiff, defendant and other capacities.

In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, lawsuits, claims (including claims by third parties we have indemnified against infringement liability) and proceedings incidental to the ordinary course of business.

Legal proceedings involving governmental authorities

In February 2022, Ericsson 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 between 2011 to 2019. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. The Company’s 2019 internal investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization.

In March 2022, the United States Department of Justice (“DOJ”) informed Ericsson it had determined that, before entering into the Deferred Prosecution Agreement (“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 US Securities and Exchange Commission (“SEC”) informed Ericsson that it opened an investigation concerning

matters described in the Company’s 2019 internal Iraq investigation report. Under Ericsson’s consent judgment with the SEC, Ericsson is permanently enjoined from violating the anti-bribery, books and records and internal controls provisions in the Foreign Corrupt Practices Act (“FCPA”). 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.

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 that occurred prior to 2017. In addition, Ericsson agreed to pay a fine of USD 206.7 million. The entry of the Plea Agreement brought the DPA to an end.

On June 3, 2024, Ericsson announced the conclusion of the work and term of the independent compliance monitor originally appointed by the DOJ in June 2020 in connection with the DPA. The monitorship and Plea Agreement concluded on June 2, 2024.

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.

On May 24, 2023, Nasdaq Stockholm concluded its review of Ericsson’s public disclosure obligations concerning its 2019 internal Iraq investigation report and dismissed the matter, stating that Nasdaq could not conclude that a reasonable investor would have used the content of the report as part of an investment decision. After having reviewed Nasdaq Stockholm’s investigation and conclusion, on June 8, 2023, the Swedish Financial Supervisory Authority also decided to formally close its review of Ericsson’s prior disclosures relating to the 2019 internal Iraq investigation report.

With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to investigate these matters and related matters in full cooperation with the DOJ and the SEC. As additional information continues to be identified and evaluated during the ongoing investigations in continued cooperation with the DOJ and the SEC, it is expected that there will not be any conclusive determinations on the outcome until the investigations are completed. The scope and duration of the investigations remain uncertain.

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-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. On July 13, 2023, the Division Bench of the Delhi High Court found that in this instance the CCI has no power to conduct the pending investigations against Ericsson. The CCI has appealed this order to the Supreme Court of India.

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.

PRESS RELEASES

Risk factors

Ericsson 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, cybersecurity and occupational health and safety. Ericsson’s risk management is embedded into strategy development and operational processes and material group risks are regularly assessed and reviewed by executives as required by Ericsson’s Material Group Risk Protocol 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 and strategic direction as well as to short-term objectives. Risk factors and uncertainties of relevance to Ericsson are described in the Annual Report 2023 and in the Annual Report on Form 20-F for the year ended December 31, 2023 (in the following, the “Annual Report 2023”), as well as in Ericsson’s quarterly reports. 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 the risks set out in the section titled “Forward-Looking Statements.”

Ericsson engages in acquisitions and divestments that may be disruptive and require the Company to incur significant expenses, and Ericsson may not be successful in consummating such transactions, protecting the value of acquisitions during integration, or creating the value anticipated from the acquisition.

As mentioned in the Annual Report 2023, including in the risk factor 1.5, in addition to in-house innovation efforts, Ericsson makes acquisitions to obtain various benefits, such as reduced time-to-market, access to technology and competence, increased scale or a broadened product portfolio or customer base, for example, the acquisitions of Vonage and Cradlepoint. Acquisitions could result in the incurrence of material contingent liabilities or an increase in amortization expenses related to intangible assets or impairment of goodwill, which could have a material adverse effect on Ericsson’s business, operating results, financial condition and liquidity. Ericsson has recorded impairment charges related to acquisitions in the past, including non-cash impairment charges of SEK 31.9 billion in the third quarter of 2023 and SEK 11.4 billion in the second quarter of 2024, mainly related to goodwill and other intangible assets attributed to Vonage. The Company may record additional impairment charges in future. Further risks Ericsson could face with respect to acquisitions include:

From time to time, Ericsson also divests parts of its business to optimize the Company’s product portfolio or operations. Any decision to dispose of or otherwise exit businesses may result in the recording of special charges, such as workforce reduction costs and industry- and technology-related write-downs. Risks Ericsson could face with respect to divestments include:

The risks associated with acquisitions and divestments could have a material adverse effect upon Ericsson’s business, operating results, financial condition, and liquidity.

Impairment of goodwill, other intangible assets, property and equipment (PP&E) and right-of-use (RoU) assets leased by the Company have impacted and may continue to negatively impact Ericsson’s financial condition and operating results.

As mentioned in the Annual Report 2023, including in the risk factor 2.3, Ericsson has a significant amount of these assets; for example, patents, customer relations, trademarks, software, PP&E and RoU.

Goodwill is the only intangible asset the Company has recognized to have an indefinite useful life. Other intangible assets are mainly amortized on a straight-line basis over their estimated useful lives, and the assets are reviewed for impairment whenever events such as product discontinuances, product dispositions or other changes in circumstances indicate that the carrying amount may not be fully recoverable. Those intangible assets not yet in use are tested for impairment annually.

Historically, the Company has recognized impairment charges mainly due to restructuring, which is usually limited, but occasionally significant. Additional impairment charges may be incurred in the future and could be significant due to various reasons, including strategy changes, restructuring actions or adverse market conditions that are either specific to Ericsson or the broader industries in which Ericsson operates, or more general in nature and that could have an adverse effect on Ericsson’s operating results and financial condition. For example, Ericsson recorded non-cash impairment charges of SEK 31.9 billion in the third quarter of 2023 and SEK 11.4 billion in the second quarter of 2024, mainly related to goodwill and other intangible assets

attributed to Vonage. These impairments resulted from the significant drop in the market capitalization of Vonage’s publicly traded peers, increased interest rates, and on overall slowdown in Vonage’s core markets, as well as lower anticipated growth in certain Vonage businesses.

Negative deviations in actual cash flows compared to estimated cash flows as well as new estimates that indicate lower future cash flows might result in recognition of impairment charges. Other impairment indicators, such as the impact of increased interest rates, inflation, macroeconomic conditions, and other market events can also lead to the recognition of impairment charges. Non-cash impairment charges reduce the Company’s non-restricted equity and, consequently, impact dividend capacity. The impairments were reported in segment Enterprise as items affecting comparability. Estimates require management judgment as well as the definition of cash-generating units for impairment testing purposes. Other judgments might result in significantly different results and may differ from the actual financial condition in the future.

Ericsson could experience penalties and adverse rulings in enforcement or other proceedings, breach of contract claims and/or loss of revenue for non-compliance with laws, rules and regulations governing its business. Compliance with existing or changed laws, rules or regulations may subject Ericsson to increased costs or reduced products and services demand and may adversely affect Ericsson’s development efforts.

As mentioned in the Annual Report 2023, including in the risk factor 3.1, Ericsson is subject to applicable laws, rules and regulations in multiple jurisdictions. The Company could experience penalties and adverse rulings in enforcement or other proceedings for non-compliance with applicable laws, rules or regulations governing its business, which could have a material adverse effect on Ericsson and its customers, including its reputation, business, financial condition, operations, research and development, operating results, cash flows, prospects or its current or future customer relationships, including both private and government customers. Ericsson strives for compliance, but the burden of monitoring and maintaining compliance across global operations in a rapidly changing world and evolving industry is significant. There can be no assurance that Ericsson’s compliance policies and programs, including in connection with the now-concluded monitorship, will be effective. The Company has not been in compliance with all such laws, rules and regulations in the past and cannot assure that all past violations have been addressed or that additional violations will not occur in the future. Ericsson’s non-compliance with laws, rules and regulations may also affect its customers’ compliance requirements and/or lead to actual or perceived breach of Ericsson’s contractual obligations to its customers resulting in contract claims and loss of revenue. It may also impact Ericsson’s ability to gain new customers.

Further changes in laws, rules or regulations could subject Ericsson to liability, increased costs, or reduced products and services demand, market access restrictions, inability to deliver products of certain

origin and have a material adverse effect on Ericsson, including its reputation, business, financial condition, operating results, cash flows or prospects.

Changes to laws, rules or regulations may adversely affect both Ericsson’s customers’ and the Company’s own operations. For example, regulations imposing more stringent, time-consuming or costly planning and zoning requirements or building approvals for radio base stations and other network infrastructure could adversely affect the timing and costs of network construction or expansion, and ultimately the commercial launch and success of these networks. Similarly, tariff and roaming laws, regulations or rules on network neutrality could also affect communications service providers ability or willingness to invest in network infrastructure, which in turn could affect the sales of Ericsson’s systems and services. Additionally, delay in radio frequency spectrum allocation, and allocation between different types of usage may adversely affect communications service provider spending or force Ericsson to develop new products to be able to compete. Furthermore, the rapid development and deployment of tools that leverage AI is also causing governments to consider regulation of AI, even for AI that does not pertain to personal data.

Further, Ericsson develops many of its products and services based on existing laws, rules, regulations and technical standards. Changes to existing laws, rules, regulations and technical standards, or the implementation of new laws, rules, regulations, restrictions and technical standards relating to products and services not previously regulated, could adversely affect Ericsson’s development or supply efforts by increasing compliance costs and causing delay or disruptions. Demand for those products and services could also decline. Regulatory changes related to e.g., license fees, environment, health and safety, security, data localization, privacy (including the cross-border transfer of personal data for example between the EU and the US), and other regulatory areas may increase costs and restrict Ericsson’s operations or the operations of network operators. Also, indirect impacts of such changes and changes to laws, rules or regulations in other fields, such as pricing regulations, could have an adverse impact on Ericsson, even though the specific laws, rules or regulations may not apply directly to the Company or its products.

Ericsson’s substantial international operations are subject to uncertainties that could affect the Company, including its reputation, business, financial condition, operating results, cash flows or prospects.

As mentioned in the Annual Report 2023, including in the risk factor 3.2, Ericsson conducts business throughout the world and is subject to the effects of general global economic conditions as well as conditions unique to specific countries or regions. The Company has customers in approximately 180 countries, with a significant proportion of Ericsson’s sales to emerging markets in the Asia Pacific region, Latin America, Eastern Europe, the Middle East and Africa. Ericsson’s extensive global operations subject the Company to additional risks on many fronts, including civil disturbances, acts of terrorism, acts of war, economic and geopolitical instability and conflict, potential misuse of technology leading to human rights violations, pandemics, the imposition of exchange controls, economies that are subject to significant fluctuations, nationalization of private assets or other governmental actions affecting the flow of goods and currency, effects from changing climate and difficulty of enforcing agreements and collecting receivables through local legal systems.

Further, in certain markets in which Ericsson operates, there is a risk that national governments actively favor or establish local vendors or introduce requirements for local content in their respective markets at the expense of foreign competitors or introduce other requirements impacting how Ericsson can provide products and services to its customers. The implementation of such measures could adversely affect Ericsson’s sales, Ericsson’s market share and its ability to purchase or supply critical products or components.

Compliance with applicable export control regulations and sanctions or other trade embargoes in force is paramount for the Company. The geopolitical situation in parts of the world, particularly in Russia/Ukraine, parts of the Middle East and China, remains uncertain, and the level of export controls and sanctions is still relatively high from a historical perspective. This level could even increase, thus significantly impacting Ericsson’s operations where such increase occurs, including in these markets. The most recent increase in export controls has particularly targeted China’s ability to develop advanced super computers and artificial intelligence, including the semiconductors needed for those operations. A universal element of the sanctions is the financial

restrictions with respect to individuals and legal entities, but sanctions can also restrict certain exports and ultimately lead to a complete trade embargo towards a country. During the last few years, the global free trade system has been under sustained attack, which has increased the risk of states adopting policies and actions that violate WTO agreements. Further, there is a risk in many countries of unexpected changes in regulatory requirements, tariffs and other trade barriers, price or exchange controls, restrictions of imports, or other governmental policies that could limit Ericsson’s operations and decrease Ericsson’s profitability. Furthermore, export control regulations, sanctions or other forms of trade restrictions targeting countries in which Ericsson is active may result in a reduction of commitment in those countries. As an example, an escalation of trade tensions between the US and China has resulted in additional trade restrictions including export controls, and increased tariffs, which if further negatively developed could harm the Company’s ability to compete effectively in Chinese markets or with Chinese companies and negatively impact Ericsson’s operations in the country. The need to terminate activities as a result of further trade restrictions may also expose Ericsson to customer claims and other inherent risks. The export control and sanctions laws, rules and regulations are complex, frequently changing and increasing in number; and the Company has not been in compliance with all such export control and sanctions rules or regulations in the past, and cannot assure that all past violations have been addressed or that additional violations will not occur in the future. Such violations could have material adverse effects on Ericsson, including its reputation, business, financial condition, operating results, cash flows, or prospects and could constitute a violation of the consent judgment with the US Securities and Exchange Commission (SEC).

Ericsson’s business operations are complex, involving the development, production and delivery of telecommunications solutions to customers in a very large number of jurisdictions. Each jurisdiction has its own tax laws, rules and regulations subject to updates or changes in interpretation or enforcement, and the Company has to comply with the relevant laws, rules and regulations in each of these countries. These laws, rules and regulations involve income taxes and indirect taxes such as VAT and sales taxes as well as withholding taxes on domestic and cross border payments and social security charges related to Ericsson’s employees. Constant changes in the laws, rules or regulations and the interpretation thereof also create exposures regarding taxes. This results in complex tax issues and tax disputes that may lead to additional tax payment obligations. From time to time, Ericsson is subject to challenges from tax authorities that carry the risk of financial penalties regarding its approach to taxation and related matters, including transfer pricing and revenue recognition. As a global company, Ericsson also faces the risk of being taxed for the same income in more than one jurisdiction (double taxation). This could have adverse effects on Ericsson, including its reputation, business, financial condition, operating results, cash flows, or prospects.

There has been a concern reported by some media and others, that certain countries may use features of their telecommunications systems in ways that could result in actual or potential violation of human rights, among others. This may

adversely affect the telecommunications business and may have a negative impact for people and Ericsson. All of the above may have a material and potentially lasting adverse impact on Ericsson, including its reputation, business, including sales market share, market access, supply chain and R&D activities, financial condition, operating results, cash flows, or prospects.

Ericsson is subject to certain US, UK and other anti-corruption (including anti-bribery, anti-money-laundering, sanctions, terror finance and anti-terrorism) laws, rules and regulations and other regulatory requirements or conditions in other jurisdictions, or imposed as a result of foreign direct investment reviews and decisions. Ericsson may be subject to further adverse consequences under the injunction issued in connection with the 2019 settlement with the SEC, as well as other investigations by governmental authorities.

As mentioned in the Annual Report 2023, including in the risk factor 3.3, Ericsson is, from time to time, involved in legal proceedings and regulatory investigations, and is subject to certain other regulatory requirements, conditions and agreements. If any of these lawsuits or legal proceedings are determined unfavorably against the Company or it is determined that the Company is not in compliance with any of these regulatory requirements, conditions or agreements, the Company could be required to pay substantial damages, fines and/or penalties, be subject to public scrutiny, negative reputational consequences, or become subject to additional enforcement actions, regulatory review and/or adverse decisions. Ericsson could face potential debarment from government contracting in the United States and elsewhere, reputational risk, as well as potential counterparty reluctance to continue business relationships. In addition, these ongoing matters and investigations require significant resources and costs for investigation, compliance and remediation that could lead to adverse financial and reputational consequences.

For example, in connection with the acquisition of Vonage by Ericsson, and as a condition to CFIUS’s approval of the acquisition, Vonage, Ericsson and the DOJ and the US Department of the Treasury, in their capacity as CFIUS monitoring agencies (CMAs), entered into a NSA in July 2022, which imposes restrictions on access to certain types of sensitive data, equipment and systems. Vonage and Ericsson are engaged and cooperating with the CMAs in relation to ongoing compliance with the NSA restrictions, related remediation efforts to address concerns raised by the CMAs regarding such access, and the CMAs’ requests for information. The ongoing compliance efforts and related remediation may adversely affect the Vonage business, including changes required to business structure and additional compliance costs. In addition, violations of a CFIUS mitigation agreement, such as the NSA, can result in an enforcement action imposing monetary penalties or other remedies.

As previously reported, the Company reached a resolution (Plea Agreement) in March 2023 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 206.7 million. The entry of the Plea Agreement brought the DPA to an end. On June 3, 2024, Ericsson announced the conclusion of the work and term of the independent compliance monitor originally appointed by the DOJ in June of 2020 in connection with the DPA. The monitorship and Plea Agreement concluded on June 2, 2024.

In addition, as previously reported, in June 2022, the SEC informed Ericsson that it opened an investigation concerning matters described in the Company’s 2019 internal Iraq investigation report. Under Ericsson’s consent judgment with the SEC, Ericsson is permanently enjoined from violating the anti-bribery, books and records and internal controls provisions in the FCPA. 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.

The Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization. With respect to the matters discussed in the 2019 internal Iraq investigation report, the Company continues to investigate these matters and related matters in full cooperation with the DOJ and the SEC. As additional information continues to be identified and evaluated during the ongoing investigations in continued cooperation with the DOJ and the SEC, it is expected that

there will not be any conclusive determinations on the outcome until the investigations are completed. The scope and duration of the investigations remains uncertain.

Ericsson is required to comply with anti-corruption and anti-bribery laws in the jurisdictions in which it operates, including the U.S. “FCPA”, the UK Bribery Act (the “Bribery Act”) and other similar laws in other countries in which the Company does business. As a result of doing business in foreign countries, including through channel partners and agents, Ericsson is exposed to risks of violating anti-corruption laws. As a company that operates in certain regulated sectors, Ericsson deals with both governments and state-owned business enterprises, the employees of which are often considered foreign officials for purposes of the FCPA and other applicable anti-bribery legislation. Some of the international locations in which Ericsson operates have developing legal systems and may have higher levels of corruption than more developed jurisdictions. Actual or alleged non-compliance with anti-corruption laws and other laws governing the conduct of business with government entities and/or officials (including local laws) could subject Ericsson to criminal and civil penalties and other remedial measures, which could have a material adverse effect on Ericsson, including its reputation, business, financial condition, operating results, cash flows or prospects.

For additional information regarding certain of the legal proceedings and inquiries in which Ericsson is involved, see “Legal proceedings” in the Board of Directors’ Report.

Vulnerabilities (and threat actors exploiting vulnerabilities), including in Ericsson’s products, services and operations may lead to compromise of identities, target of work force, misuse of accounts, network disruption, cybersecurity incidents, and material harm to Ericsson or Ericsson’s customers, any of which may have a material adverse effect on Ericsson’s business, operations, financial performance, customer and vendor relationships, reputation and brand, and may lead to significant penalties or litigation, or to regulatory investigations or actions.

As mentioned in the Annual Report 2023, including in the risk factor 4.1, Ericsson relies on computer systems, hardware, software, technology infrastructure and networks for both internal and external operations that are critical to its business (collectively, “IT Systems”). Ericsson develops, owns and manages some of these IT Systems but also relies on third parties for a range of IT Systems and related products and services, including but not limited to cloud computing services. Ericsson faces numerous and evolving cybersecurity risks, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware.

Cyberattacks and security incidents are expected to accelerate in both frequency and impact as attacks are increasingly sophisticated and utilize tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, which means that Ericsson may be unable to detect, investigate, contain or recover from future attacks or incidents in a timely or effective manner. For example, the presence of vulnerabilities in Ericsson’s products, services or operations, may not be detected during product development and operations, and may be leveraged by a threat actor to cause material harm to Ericsson or Ericsson’s customers. Vulnerabilities in Ericsson’s products, solutions or services not detected and treated during product development or solution delivery may be exploited by a threat actor to cause harm to Ericsson’s customers, end users or Ericsson. Vulnerabilities could be brought in through different stages of the product life cycle. As almost any modern software can contain open source and third-party components, so does software in networks, and unmitigated security exposures can put Ericsson customers at varying levels of risk and expose Ericsson to liabilities or loss of business.

Moreover, threat actors exploiting vulnerabilities in Ericsson’s IT Systems, processes or personnel due to insufficient implementation of controls, such as lack of access management or use of more sophisticated attack techniques could result in security incidents that may impact the confidentiality, availability or integrity of Ericsson’s IT Systems, Confidential Information, personnel, products, services, or solutions. These incidents may include data breaches, intrusions, espionage, disruptive attacks utilizing malware (such as ransomware or other extortion-based tactics), exploitation of hardware or software vulnerabilities, bugs, hardware or software misconfigurations in Ericsson’s IT Systems, data privacy infringements, leakage of Confidential Information, unauthorized or accidental usage or modification of data or accounts, fraud and general malfeasance. For example, in 2023, an anonymous individual or group of individuals obtained and exploited unlawful access to a system Ericsson uses to interface externally with its customers to remove a small number of non-sensitive materials from that system. While Ericsson did not experience significant financial loss, data theft, encryption or any significant disruptions to normal business operations, by reason of the incident, Ericsson further fortified security measures in the impacted system in response to the intrusion.

Ericsson utilizes third parties to a large extent to whom the Company has outsourced significant aspects of Ericsson’s IT Systems, product development, services, finance and other internal and external-facing operations. Events or incidents caused as a result of vulnerabilities in their operations or products could have a material adverse effect on Ericsson, Ericsson’s business, potentially disrupting operations, leaking valuable or sensitive information, personal data or damaging Ericsson’s products that have been installed in the Company’s customers’ networks. Furthermore, Ericsson has acquired and continues to acquire companies that may have cybersecurity vulnerabilities and/or unsophisticated fraud detection, authentication controls or other security measures, which may expose the Company to significant cybersecurity, operational, and financial risks.

A cybersecurity incident in Ericsson’s operations or supply chain could have an adverse impact on the integrity of solutions or services provided by Ericsson as well as Ericsson’s ability to comply with legal, regulatory or contractual requirements. These incidents may include tampering with components, the inclusion of backdoors or implants, the unintentional inclusion of vulnerabilities in components or software, and cybersecurity incidents which prevent a supplier from being able to fulfil commitments to Ericsson.

Any cybersecurity incident including unintended use, misconfiguration, or unintended actions, involving Ericsson’s operations, supply chain, product development, services, third-party providers or installed product base, could cause severe harm to Ericsson. For example, a misconfiguration incident in 2023 led to a data breach that Ericsson reported to certain EU data protection authorities as well as certain customers and employees.

Ericsson’s IT Systems and storage and other business applications, and the systems, storage and other business applications maintained by the Company’s third-party providers, have been in the past, and are expected to be in the future, subject to cybersecurity incidents. Ericsson expects continued attempts to gain unauthorized access to breach Ericsson’s IT Systems and/or Confidential Information, and other forms of malfeasance and disruptive attacks. In some cases, such incidents are difficult to anticipate or to detect immediately and the damage caused thereby. Ericsson also cannot guarantee that a material incident will not occur in the future.

If an actual or perceived breach of security occurs in Ericsson’s network or any of its third-party providers’ networks, Ericsson could incur significant costs, and the Company’s reputation could be harmed. While Ericsson works to safeguard Ericsson’s internal network systems and assess and validate the security of the Company’s third-party providers to mitigate these potential risks, including through security requirements and employee awareness and training, there is no assurance that such actions will be sufficient to prevent security incidents. Ericsson cannot guarantee that the Company’s cybersecurity program and processes will be fully implemented, complied with or effective in protecting Ericsson’s IT Systems and Confidential Information. Any insurance that Ericsson carries may be partially or wholly insufficient to cover losses or costs associated with responding to and remediating any or all cybersecurity incidents that the Company may experience.

In addition, insiders may steal or monitor Confidential Information or disrupt networks related to Ericsson or its customers, through technological or non-technological means. To gain strategic access or to steal specific information, competitors or governments may induce insiders or recruit employees who sell information or services for personal gain. Any insider incident could cause severe harm to Ericsson.

If Ericsson or customer identities are misused or compromised, it can be difficult to differentiate authorized parties undertaking normal account activities from the threat actor’s use of a compromised identity or credential. Identity and access management routines are required to access Ericsson’s customers’ networks, and any limitation of this capability

would adversely impact Ericsson’s ability to offer services and products to Ericsson’s customers.

Furthermore, threat actors may target employees, or other members of Ericsson’s workforce, through technological and non-technological means. Recent trends have shown that there is a willingness to target end users, for access to enterprises. This has manifested itself in the rise of threats such as ransomware, phishing, spear phishing, spoofing and other extortion methods. With a diverse workforce of approximately 100,000 employees, Ericsson is susceptible to risks of disruption or information loss resulting from large scale attacks towards Ericsson’s employees, or society at large. Additionally, remote and hybrid working arrangements at Ericsson (and at many third-party providers) also increase this risk due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

The forgoing risks are increasing and rapidly evolving, and any of the above could result in a material adverse effect on Ericsson’s business, operations, financial performance, customer and vendor relationships, reputation and brand and result in financial penalties, litigation, regulatory investigations and other governmental actions.

This report has not been reviewed by Telefonaktiebolaget LM Ericsson auditors.

Date for next report: 15 October 2024

Media and analyst briefing

Ericsson invites media, investors and analysts to a conference call

and live video webcast at 10:00 AM CEST on July 12, 2024.

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:

Lars Sandström, Senior Vice President, Chief Financial Officer

Phone: +46 72 161 20 04

E-mail: [email protected]

Stella Medlicott, Senior Vice President, Chief Marketing and

Communications Officer

Phone: +46 73 095 65 39

E-mail: [email protected]

Telefonaktiebolaget LM Ericsson

Org. number: 556016-0680

Torshamnsgatan 21

SE-164 83 Stockholm

Phone: +46 10 719 00 00

www.ericsson.com

Investors

Daniel Morris, Vice President,

Head of Investor Relations

Phone: +44 7386 657217

E-mail: [email protected]

Lena Häggblom, Director,

Investor Relations

Phone: +46 72 593 27 78

E-mail: [email protected]

Alan Ganson, Director,

Investor Relations

Phone: +46 70 267 27 30

E-mail: [email protected]

Media

Ralf Bagner, Head of Media Relations

Phone: + 46 76 128 47 89

E-mail: [email protected]

Corporate Communications

Phone: +46 10 719 69 92

E-mail: [email protected]

This report includes forward-looking statements. All statements other than statements of historical fact are forward-looking statements. 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. These statements are subject to risks and uncertainties that could cause actual results to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking statements, including, in particular the following:

These forward-looking statements also represent our estimates, assumptions and expectations 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 and 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. 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, except as required by applicable law or stock exchange regulations.