(CercleFinance.com) – Ericsson maintained its long-term profit margin target on Thursday, while warning that its performance would rather be at the lower end of the range in 2024.
On the occasion of an investor day held today, the Swedish group confirmed that it is aiming for an operating margin (Ebitda) of 15% to 18% over time, but specified that it would come out at the bottom of the range on the horizon. 2024.
The network equipment manufacturer explains that it wants to improve its margin through its cost reduction program, which aims to save around nine billion Swedish crowns (around 830 million euros) by 2023.
In a statement released at the meeting, Ericsson also said it wants to increase its intellectual property revenue and accelerate the pace of new product launches.
He also explains that he wants to reconnect with a position of technological ‘leader’ under the effect of his investments in research and development (R&D) and to recover his activity of software and ‘cloud’ services.
All of these factors should allow it to more than offset inflationary pressures, he explains, adding that it is also aiming for a conversion rate of sales to free cash flow (FCF) before mergers and acquisitions (M&A) of between 9% and 12% by 2024.
Finally, the group says it wants to implement a “policy of stability, even progression” of its dividend, depending on its financial performance, its prospects and its cash position.
Following all these announcements, Ericsson shares fell more than 4% on Wednesday on the Stockholm Stock Exchange.
Copyright © 2022 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends with the buttons below.
