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Ericsson ‘must transform to stay relevant’

Hans Vestberg

Hans Vestberg

Ericsson CEO Hans Vestberg told shareholders that he intended to deliver strong earnings and value by driving transformation within the company, at the firm’s annual general meeting on Friday. 

Outlining strategic priorities, around the idea of the ‘networked society,’ Vestberg said: “Industries and companies are using broadband on an industrial scale to improve processes. People are using connected devices, to help them be healthier and stay closer to loved ones. It is our job to build the foundation to make all that possible.”

Ericsson said that the “new industry paradigm” requires the firm to “continuously transform to stay relevant.” Vestberg also highlighted that the company’s sales split across hardware, services, and software has already “changed dramatically” between 1999 and 2013.

In 1999, the firm said sales were 73% from hardware and 27% software and services. Currently, this split is 34% hardware, 43% services and 23% software.

“We are committed to our strategic framework to excel in our core business, establish leadership in targeted areas, and expand business in new areas in order to deliver the best value to our employees, our customers, and our shareholders,” said Vestberg.

He added that 2013 was a “strong year” for the firm, and that it grew 5% – better than its addressable market. “We improved our operating margin and generated a solid operating cash flow, which gives Ericsson a strong balance sheet to capture the opportunities that lie ahead.”