The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Francois Bouvignies - UBS - Analyst
: Thank you very much. So my question would be on the slide 8 that you show in the presentation where you show the adjusted EBITA margin and
adjusted gross margin. So what we see in the chart, we can clearly see, I think, a correlation between gross margin and EBITA margin since 2022,
and I checked in '19, '21, and '20, I think it's the same correlation directionally. But for some reason from Q4 '23, we see the gross margin going up,
but the EBITA margin going down, and I was wondering why. Because we see the -- in Q2, for example, the top line increasing, so it should help to
scale. You have to the North America increasing should help the mix. And you have the IPR, which is almost all-time high, which should help the
margins. So I'm wondering why you have a disconnection between the gross margin and EBITA margins since the beginning of the year. That
would be my question, please.
Question: Francois Bouvignies - UBS - Analyst
: Do you move cost of sales into OpEx at all? I mean, because when I look at this chart, I think you are -- in the year, the cost base, and you always
invested a lot in OpEx increasing R&D in the last few years. So why would you invest even more now than before?
Lars Sandstrom - Telefonaktiebolaget LM Ericsson - Chief Financial Officer, Senior Vice President, Head of Group Function Finance
It is not more, it's the relative. With a significantly lower revenue base that impacts the ratios. It's not more cost purse in absolute and levels in that
sense. It's the revenue that gives the impact.
Question: Francois Bouvignies - UBS - Analyst
: (inaudible) Thank you.
Question: Francois Bouvignies - UBS - Analyst
: Understood. Thank you very much.
|
