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Business results of Ericsson Nikola Tesla Group in the first nine months 2018

  Categories: Business Results Investors Notices

Gordana Kovačević, the President of Ericsson Nikola Tesla commented: “In the first nine months of 2018, Ericsson Nikola Tesla Group sales revenue amounted to MHRK 1,080.5, up by 1% year-over-year. Increased investments in mobile networks modernization and digital transformation have enabled a strong sales growth in the domestic market. In addition to operators’ segment, we also recorded good results in Industry & Society segment. Export markets showed lower sales revenue affected primarily by the ramping down of network modernization projects and challenges related to political and economic situation. Opposed to the sales decline in export markets, Ericsson internal market once again recorded a solid growth and contributed to the stability of financial performance.

We are proud that our experts, together with colleagues from global Ericsson, create technologies that provide opportunities for personal growth and development to individuals, and open new opportunities for globally competitive development to industry and society. Globally, Ericsson collaborates with key partners to enable 5G mobile networks that will offer higher data transfer rates, facilitating services such as 4K/8K video content, solutions based on augmented and virtual reality to end-users. Low network latency and faster data transfer will also enable various industry segments to reduce costs through automation, remote control and Artificial Intelligence in Cloud.
Ericsson Nikola Tesla follows global trends, and this March at the Company’s headquarters we were the first in Croatia to demonstrate the possibilities of 5G technology. During summer, we supported leading Croatian operators in their 5G demos in real environment, focusing on end-user services. Furthermore, we have extended our research and development activities, and opened an office in Osijek where approximately thirty employees work on development of 4G and 5G mobile communications. Further employment and expansion of responsibilities is planned. 
We also marked the 18th anniversary of Ericsson Nikola Tesla’s Summer Camp, which confirms that over the years, numerous young experts have recognized Ericsson Nikola Tesla as a company that offers both advanced technologies and the possibility for career development. From the very beginning, when we initiated Summer Camp in cooperation with the Faculty of Electrical Engineering and Computing of the University of Zagreb, our goal has been to enable graduate students to gain their first work experience by working on interesting projects where their talent and innovativeness are recognized. Students from different faculties from Zagreb, Split, Osijek, Rijeka, and neighboring countries participated in this year’s Summer Camp and with the help of their mentors worked in teams on projects related to the Internet of Things (IoT), 5G technology, machine learning, radio networks, and R&D tools. 

According to the Croatian national report of the recently finished European LIFE Clim’Foot project, Ericsson Nikola Tesla is the only private company in Croatia that calculated its carbon footprint and based on that analysis created a corresponding plan to reduce the Company’s impact on the environment and has already undertaken a range of activities. Thus, the Company has started an energy efficiency improvement project co-financed by European Union under the operational program “Competitiveness and cohesion 2014 – 2020”. 
In terms of financial results, gross profit is up by 4.3%, while operating profit increased by 16.2%, due to slightly increased sales revenue and gross margin, lower sales and administrative costs and less impact of currency deviations compared to the first nine months of the previous year. Net profit rose by 20.2% to MHRK 62.3. End of Q3 was concluded with a lean balance sheet and an equity ratio of 30%. A positive cash flow from operating activities was achieved due to proactive collection of customer receivables. At the end of Q3, total cash and cash equivalents, including short-term financial assets, amounted to MHRK 197.5. Working capital efficiency remained strong, and expressed in Working Capital Days (WCD), was 30. Cash conversion rate was 17%.
In Q3 we have initiated a new strategic planning cycle for the period until 2023, based on continuous analysis of the situation on all relevant markets and projections of ICT industry trends. We remain focused on the following strategic segments: 4G/5G mobile solutions, digital transformation solutions, Managed Services, and solutions in the Industry & Society segment. Furthermore, our strategic focus is placed on gaining new responsibilities and projects and strengthening competitiveness on the global Ericsson market. Our goal is to keep the position as a quality Ericsson center, by efficient service delivery based on key competencies, automation, and advanced solutions for analysis and network management.  

In response to challenging market environment, we closely cooperate with customers, adapt our organization and ways of working, and invest in competence development and our technology leadership with a focus on 5G. We stay focused on cost and operating efficiency, capital efficiency and risk management to strengthen the already solid financial foundation of the Company.”

Communications Ericsson Nikola Tesla


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