SONY Ericsson 2nd Quarter 2011 Press Release

19 Jul, 2011

Sony Ericsson reports second quarter 2011 results Highlights:

• Supply chain constraints from the Japan earthquake significantly impact Q2 results
• Smartphones account for more than 70 percent of total sales
• Android-based Xperia™ volume up 150 percent year-on-year

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson)
for the second quarter ended June 30, 2011 is as follows:

Q2-2010 Q1-2011 Q2-2011

Number of units shipped (million) 11.0 160 8.1
Average selling price (Euro) 141 7.6 156
Sales (Euro m.) 1,757 1,145 1,193
Gross margin (%) 28% 33% 31%
Operating income (Euro m.) 36 19 -37
Operating margin (%) 2% 2% -3%
Restructuring charges (Euro m.) -32 - -
Net income (Euro m.) 12 11 -50

Bert Nordberg, President and CEO of Sony Ericsson commented, “Sony Ericsson’s second quarter
profitability was affected by the March 11 earthquake in Japan.

We estimate that the impact of earthquake-related supply chain constraints on our portfolio was close to 1.5 million units, with most
of the effect in the early part of the quarter. Our shift to Android-based smartphones continues with
smartphone sales accounting for more than 70 percent of our total sales during the quarter.

We have shipped more than 16 million Xperia smartphones to date.

We have introduced eight new Xperia smartphones this year and we continue to see strong consumer and operator demand across
the Xperia smartphone portfolio.”

Units shipped during the quarter were 7.6 million, a 31% decrease year-on-year and a 6% decrease
sequentially, due to a decrease in volume caused by constrained supply of critical components and
an anticipated decline in the number of feature phones shipped.

Average selling price (ASP) for the quarter was Euro 156, a 3% decrease year-on-year but an 11%
increase sequentially. The year-on-year decrease is due to product and geographic mix and price
erosion. The sequential increase in ASP is attributed to favorable product and geographic mix,
more than offsetting price erosion and unfavorable foreign exchange rates.

Sales for the quarter were Euro 1,193 million, a 32% decrease year-on-year and a 4% increase

The gross margin percentage for the quarter was 31% with an improvement of 3 percentage pointsyear-on-year that included restructuring charges, and a decrease of 2 percentage points from the
previous quarter, which included the benefit of some larger than normal items relating to royalty matters and warranty estimates.

Loss before taxes for the quarter was Euro 42 million, compared to an income before taxes of Euro
31 million for the same quarter in the previous year, due to lower volume. Income before taxes for
the previous quarter was Euro 15 million. The sequential change was reflective of lower gross
margin and higher operating expenses.

The quarter ended in a net loss of Euro 50 million, compared to a net income of Euro 12 million in
the same quarter in the previous year, and Euro 11 million in the last quarter. Tax expenses in this
quarter included the impact of tax adjustments and the distribution of profits and losses between
various jurisdictions.

Cash flow from operating activities during the quarter was negative Euro 224 million, mainly due to
increases in accounts receivables and inventories, negative net income and timing of certain
payments. New external borrowings of Euro 165 million were made during the quarter to enhance
liquidity and growth, resulting in total borrowings of Euro 769 million at the end of the quarter. Total
cash balances at June 30, 2011 amounted to Euro 516 million.

Sony Ericsson estimates that its share in the global Android-based smartphone market during the
quarter was approximately 11% in volume and 11% in value.

Sony Ericsson maintains its forecast for modest industry growth in total units in the global handset
market for 2011.

About the author


Entrepreneur, Media Director, and Geek Culture Enthusiast.

At Intuned Online, J. Ang is tasked with the duties of Creative Marketing plans and on-site LIVE RECON Show Coordination.

While he isn't as intuned with the JDM Car Culture as the rest of the IO Team, J. Ang contributes with his extensive affinity for industry news in the world of Tech, Games, and geek-culture such as Anime, Manga, and comic books.


An avid reader of both Western Comics and Eastern Manga, J. Ang was inspired to create his own comic book at the early age of High School.

From short stories complimented with his own artistic flair for pin-up art, J.Ang cultivated his passion for story telling through artwork with diligence up until the day he befriended a very talented Korean manga artist named Jin Song Kim.

Together, both residing on the East Coast, they have been combining their talents to create their own graphic novels since 2003. With their flagship title JTF-3 Counter Ops, J.Ang and Jin Song Kim promises to release even more titles in the near future.

Check out his released works:

JTF-3 Counter Ops

PANDORA: End of Days

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