Ericsson Annual Report 2022

Ericsson
Annual Report
2022
ericsson.com
Contents
Financial report Corporate Governance report
CEO comment 2 Regulation and compliance 2

Business strategy 5 Governance structure 4
Letter from the Chair of the Board 12 General Meetings of shareholders 5
Board of Director’s report 14 Nomination Committee 6
Consolidated financial statements with notes 34 Board of Directors 6
Parent Company financial statements with notes 89 Committees of the Board of Directors 9
Risk factors 108 Remuneration to Board members 11
Auditor’s report 123 Members of the Board of Directors 12
Five-year summaries 129 Management 16
Alternative performance measures 131 Members of the Executive Team 20
The Ericsson share 136 Auditor 26
Internal control over financial reporting 26
Auditor’s report on the Corporate Governance report 29
Remuneration report Sustainability and Corporate Responsibility report
Statement from the Chair of the Improving lives, redefining business and p
ioneering
Remuneration Committee 1 a sustainable future 1
Introduction 2 Strategy and targets 2
Remuneration 2022 at a glance 3 2022 highlights – Environment 4
Total remuneration to the President 2022 highlights – Social 6
and CEO and Executive Vice Presidents 5 2022 highlights – Governance 8
Variable remuneration 6 Notes to the Sustainability and Corporate
Comparative information on changes in Responsibility report 10
remuneration and the Company’s performance 13 Assurance report 43
Glossary 44
Ericsson Annual Report 2022

Our legal Annual Report consists of four parts published as one pdf. The four parts can also be downloaded separately:
• The Financial report, including Board of Director’s report and the financial statements and notes
• The Corporate Governance report
• The Remuneration report
• The Sustainability and Corporate Responsibility report
Ericsson’s annual accounts and consolidated accounts are included on pages 14–122 in the Financial report and are reported on
by Deloitte in the auditor’s report. The Corporate Governance report, the Remuneration report and the Sustainability and Corporate
Responsibility report have also been subject to assurance procedures by Deloitte. We also file an Annual Report on Form 20-F with the
U.S. Securities and Exchange Commission (SEC). All parts of the legal Annual Report are available on Ericsson’s website. The report
Ericsson 2022 In Review, published on Ericsson’s website, describes the Company, its strategy and organization.
Financial Part of
Ericsson
Annual Report
report 2022
Annual Report 2022
Financial Corporate Remuneration Sustainability

report Governance report and Corporate
report Responsibility
report
ericsson.com
Contents
Financial report 2022

This is Ericsson 1
CEO comment 2
Business strategy – Creating long-term value 5
Letter from the Chair of the Board 12
Board of Director’s report 14
Board Assurance 33
Consolidated financial statements 34
Notes to the consolidated financial statements 41
Parent Company financial statements 89
Notes to the Parent Company financial statements 95
Risk factors 108
Auditor’s report 123
Forward-looking statements 128
Five-year summary – Financial information 129
Five-year summary – Non-financial information 130
Alternative performance measures 131
The Ericsson share 136
Shareholder information 140
Financial terminology 141
Glossary 142
Financial report 2022 This is Ericsson 1
This is Ericsson
Ericsson’s vision is a world where limitless connectivity improves lives,

redefines business and pioneers a sustainable future.
We are one of the leading providers of Ericsson’s strategy is to leverage its leadership market areas: North America; Europe and Latin
Information and Communications Technology in mobile networks to drive focused expansion America; Middle East and Africa; South East
(ICT). We enable the full value of connectivity in enterprise; lead the industry with critical Asia Oceania and India; and North East Asia.
by creating game-changing technology and innovations, and capture strategic business We are committed to being a leader in
services that are easy to use, adopt, and scale, opportunities. We are now driving a paradigm conducting business built on a culture of ethics
making our customers successful in a fully shift to the next wave of connectivity and are and integrity. The Company has approximately
connected world. transforming ourselves to a platform company, 105,000 employees, and customers in around
Our portfolio spans Networks, Cloud leveraging 5G networks as a powerful innova- 180 countries. Ericsson is headquartered in
Software and Services, Enterprise Wireless tion platform. Stockholm, Sweden. Our shares are listed
Solutions, Global Communications Platform, Our broad portfolio allows us to cater to a on Nasdaq Stockholm and our American
Technologies and New Businesses, and IPR wide range of customers in multiple industries. Depositary Shares (ADS) are listed on Nasdaq
licensing. Ericsson’s communications service provider New York.
business is divided into five geographical
2 CEO comment Financial report 2022
A platform for growth

and exponential innovation
2022 marked a significant year for Ericsson. We are a company on the move and have
solidified our leadership position in mobile networks, built an enterprise business, and
continued to drive transformation of our culture.
Ericsson is at the epicenter of a powerful trend

where anything that can go wireless will go
wireless. Together with front-runner custom-
ers, we are shaping the industry landscape by
becoming a platform company building on 5G.
Our strategy is to extend our leadership
in mobile networks and grow our enterprise
business. Our current available market is
around USD 100 billion, and with enterprise
offerings it increases by about 50%. While
the mobile network's market is expected to
be f lattish, the enterprise market is poised to
double over the next few years.
We are executing on our strategy. Our
investments in technology leadership have
allowed us to build a leading portfolio in
mobile networks which is the foundation of
our global leadership position. Half of the
world’s 5G traffic outside of Mainland China, is
carried over our networks, and 16 of the world's
20 largest communications service providers
have selected Ericsson 5G core.
Enterprise growth
Building on our technology and leadership in
mobile network solutions, we are expanding into
the enterprise space with a two-pillar approach.
The first pillar is Enterprise Wireless Solu
tions which includes Cradlepoint solutions
and private networks. This is a high-growth
multibillion-dollar opportunity, which can
create new revenues for Ericsson and our
customers.
The second pillar is powered by our acquisi-
tion of Vonage. The next lever of digitalization
in enterprise will leverage the capabilities Beyond this, our ambition is to create an network APIs can create significant revenue
only the network can provide, such as speed, entirely new market for open network APIs that streams on top of their current subscription
latency, and authentication. By leveraging allows developers to easily integrate network revenues, resulting in a virtuous cycle that will
Vonage’s platform and its global ecosystem capabilities and differentiated performance into stimulate further investments in the network.
of application developers, we aim to trans- their applications. This is a brand-new market,
form how network capabilities are exposed, and over time we believe it could be as large as Business performance
consumed, and paid for, using Application the current communications API market. During 2022, organic sales grew by 3% to
Programming Interfaces (APIs). At the recent Mobile World Congress, we reach SEK 271.5 billion. At the end of the year,
The current API market, addressed through showcased the live use of network APIs in a Ericsson powered 141 live 5G networks in 61
Vonage’s Communication Platform as a mobile gaming application and video solution countries. Free cash flow before M&A reached
Service (CPaaS), is an attractive standalone for the first time. We are working closely with SEK 22.2 billion. This performance allows us to
opportunity with a high growth outlook. selected frontrunner customers, who see that continue investing in Research & Development
Financial report 2022 CEO comment 3
(R&D), which is crucial to maintaining our structural cost improvements and productivity, a revamped approach to global risk manage-
technology leadership position. During 2022, aiming to reduce cost run rate by SEK 9 billion ment, and we continue to implement and
R&D investments totaled SEK 47.3 billion. by end of 2023. embed our compliance program, with the
EBITA excluding restructuring charges Cost savings, growing IPR revenues, a aim of being best in class.
declined to SEK 29.5 billion with an EBITA revised Cloud Software and Services strategy, We pride ourselves on our global market
margin of 10.9%. Excluding Vonage and portfolio adjustments and enhanced R&D position, customers in around 180 countries
previously announced charges of SEK −5.5 productivity, are expected to allow us to reach and playing a critical role in maintaining
billion during the year, EBIT margin excluding the lower end of our long-term EBITA 1) target communications networks around the world.
restructuring charges was 12.9%, reaching the of 15–18% by 2024. We regard access to connectivity as a fun-
target for 2022 set in 2018 of 12–14%. damental human need. We are at the same
Russia’s war in Ukraine has heartbreaking Market development time very thoughtful about where and with
consequences on individuals’ lives and a ripple Robust digital infrastructure is a prerequisite whom we work. We are constantly assessing
effect on the global economy. Following the for a digital society. Data traffic in the networks our operations in various markets and will
invasion, we wound down our engagement in is expected to grow almost 4x until 2028. not compromise the safety of our people, our
Russia in a controlled way. By year-end 2022, This growth will require more network infra- fundamental principles, or our core values.
we exited our operations in Russia and now structure. We are still in the early days of 5G Alongside ethical behavior, the safety and
have a small presence to fulfil remaining legal deployment with only about 20% of all radio well-being of our team, or anyone working on
and administrative requirements. base stations upgraded to 5G mid-band, which behalf of Ericsson, is paramount. During 2022,
To capitalize on the convergence of soft- is needed for performance and capacity. we continued to strengthen occupational
ware and services, we formed business area We expect the near term to be choppy. health and safety programs and practices in our
Cloud Software and Services by combining Some of our customers, primarily in frontrunner operations and throughout the supply chain.
business areas Digital Services and Managed markets, are guiding for lower capex and a Cultural transformation is a journey and
Services. Our performance in this area has not reduction of their inventory, impacting near- requires continuous effort – we have made
been satisfactory. To improve profitability, our term demand. The rapid build-out of 5G in great progress but there is always more work to
revised strategy is based on limiting subscale India, however, can to some extent offset this. do. We genuinely believe that having a strong
software development, accelerating automa- Given the macroeconomic headwinds, we are culture of ethics, integrity, diversity, and inclu-
tion, and changing focus from market share also planning for slower near-term growth in sion is a long-term competitive advantage.
gains to profitability. We are confident that we the Enterprise segment. We expect a better
are on a clear path to reaching operating profit demand in the second half of 2023 as data Resolution with the United States Depart-
break-even for full-year 2023 with further traffic growth will require further investments. ment of Justice
improvements thereafter. On March 2, 2023, we reached a resolution
At the end of 2022, Ericsson secured a People and culture with the DOJ regarding non-criminal breaches
multi-year license agreement with a leading Throughout 2022, we continued to enhance of our 2019 deferred prosecution agreement
device manufacturer. Based on this positive our culture, with integrity and ethics at the (DPA) and agreed to plead guilty to the histori-
outcome, we are confident that revenues from center of everything that we do. We will cal charges which concern conduct prior to
our patent portfolio can increase significantly, continue to prioritize operational excellence, 2017. The Ericsson Executive Team and I
both through new 5G agreements with previ- accountability, and strong governance across continue to work hard to clean up the past,
ously unlicensed device vendors and through the Company. Our people are at the core of strengthening our controls and processes, and
expansion into other licensing areas. everything; our success depends on our ability transforming our culture to ensure that the
In 2022, we put renewed focus on our to foster a diverse and inclusive culture that historical misconduct that led to our 2019 DPA
operating performance. We announced the enables our world-class talent to execute our never happens again.
introduction of a new Group function, Global strategy and help us shape a stronger Ericsson The DOJ noted in our agreement: “[Ericsson]
Operations, which is driving operational for the future. has significantly enhanced its compliance
simplification and improving customer We have strengthened our governance program and internal accounting controls
experience. Additionally, we are accelerating further over the course of 2022. We introduced through structural and leadership changes,
1) Excluding restructuring charges.

4 CEO comment Financial report 2022
including but not limited to the hiring of a new

Chief Legal Officer and new Head of Corporate
and Government Investigations and the
establishment of a multi-disciplinary Business
Risk Committee comprised of Group-level senior
executives … and has committed to continuing
to implement and test further enhancements. ”
Further, “[Ericsson] has significantly enhanced
its cooperation and information sharing efforts.”
Regarding the conduct in Iraq which has
been the subject of our investigation, it is
important to note that this is historical con-
duct, and is more than a decade old in some
instances. We will continue to investigate the
historical facts and are committed to cooperat-
ing openly and fully with the DOJ and the U.S.
Securities and Exchange Commission until the
matter is closed out. And, as we announced on
March 2, 2023, our 2019 investigation did not
conclude that Ericsson made or was responsi-
ble for any payments to any terrorist organiza-
tion, and our significant further investigation
over the course of 2022 has not altered this
conclusion.
When I joined, we began a concerted effort
to root out the type of misconduct that led to
the DPA, and we have made major changes
since then. With limited ability to travel dur- stakeholders. We expect the mobile market to “Together with front-runner
ing COVID, we now need to accelerate our be flattish over the next few years, with large
transformation going forward. We recognize short-term swings. To build sustainable and
customers, we are shaping
the need to get this right – to be a true industry resilient growth, our strategy to expand into the industry landscape
leader, we need to be market and t echnology the Enterprise segment is critical. Success by becoming a platform
leaders as well as world class in how we will require making near-term investments in
company building on 5G.”
conduct our business. building a strong go-to-market model, broad-
ening our portfolio, and creating a new market
Sustainability for network APIs.
Connectivity is the backbone of society’s We are confident that we have the right
sustainable development, and Ericsson’s tech- team and strategy in place to extend our leader-
nology is a key lever for fighting climate change ship in mobile networks; achieve profitability
and an enabler of greater social inclusion. in Cloud Software and Services; execute in the
In 2022, we continued our work on closing high-growth enterprise segment; transform
the digital divide through public-private part- into a platform company; and shape the indus-
nerships including UNICEF's and ITU’s Giga try landscape. We are committed to doing all
initiative, which aims to connect every school of this with integrity.
by 2030. These are exciting times for Ericsson, and
Ericsson and the telecom industry are we are in the midst of our journey to redefine
leading the race to zero emissions. We have our company and our industry. There is much
set an ambition to be Net Zero within our own more to come, and I want to thank the entire
operations by 2030 and to reach Net Zero Ericsson team worldwide for continuing their
across our value chain by 2040. We have work in this important journey. Their passion,
invested in an energy-efficient portfolio so our commitment and skills are a true inspiration
customers can reduce their energy cost and and without their hard work and dedication,
carbon emissions. The potential to decarbon- these accomplishments would not be possible.
ize other sectors through digitalization is even We are helping to shape an exciting and
greater. Ericsson has an important role to play positive future – a world where limitless
by providing digital infrastructure, enabling connectivity improves lives, redefines business
sectors like manufacturing or transportation and pioneers a sustainable future.
to reduce their emissions.
Concluding remarks
Our strategy is rooted in driving sustain- Börje Ekholm
able growth and maximizing value for all President and CEO
Financial report 2022 Business strategy 5
Strategy
Creating long-term value

Ericsson continues to strengthen its market and technology leadership position by investing
in R&D for cost and performance benefits. We have taken important steps in establishing an
enterprise presence and will further expand this business. Now we are shaping the industry
landscape by transforming into a platform company, leveraging 5G as the innovation plat-
form in close cooperation with our leading customers. By growing our core mobile networks
business and capitalizing on the fast-growing enterprise market, we look to create value for
all stakeholders. However, we know that to be an industry leader, market and technology
leadership are not enough. We also need to be an ethical leader, operating the Company
with the highest standards based on integrity. We have made significant investments in
building a strong culture of ethics and integrity.
Profitable growth based on technology leadership

Ericsson has achieved a successful turnaround and capabilities. These capabilities enable We will prudently manage our costs,
since 2017 by refocusing the portfolio, taking communications service providers to offer investments and balance sheet and will invest
out significant cost, and increasing the invest- differentiated services, such as enhanced responsibly to preserve and enhance our tech-
ments in R&D to regain technology leadership. network performance for extended reality, nology leadership, market share and profit-
Today, Ericsson has established a leadership video production or gaming. Another example ability. M&A activities will be limited to bolt-on
position in mobile networks with around 50% is more secure and easy-to-use authentication acquisitions with attractive returns and a clear
of the world’s 5G traffic, outside of Mainland for financial transactions and service access. strategic fit. Near-term focus will be to ensure
China, carried over Ericsson’s networks. At These use cases will benefit communica- a strong financial position, prioritizing invest-
year-end 2022, Ericsson powered 141 out of tions service providers by creating additional ments to support the strategy, and ensuring
the 228 live 5G networks. revenue streams on top of their current technology and market leadership.
Our strategy is to enhance our leadership in subscription offerings and stimulate further During 2022, we have continued to
mobile networks and expand into enterprise. investments in the network. The acquisition of strengthen and enhance our Ethics and
The changes to our organization during 2022 Vonage provides us with access to powerful Compliance program to ensure effective and
aimed at accelerating the execution of our building blocks, underpinning a full range of sustainable anti-bribery and anti-corruption
strategy. Ericsson's Networks segment, which cloud communication solutions, and creates processes. We have revamped our approach
accounts for 71% of the Company's revenues, the foundation for a global network platform. to global risk management and strengthened
remained unchanged. Meanwhile we merged This will enable us to establish a new market governance by establishing a sustainable plat-
two segments, Managed Services and Digital for network application programming interface form for compliance and controls. We continue
Services to create Segment Cloud Software (APIs) and a new way to expose, consume and to develop and streamline internal processes
and Services. This segment is designed to lev- monetize the network capabilities. and internal anti-corruption controls.
erage synergies in R&D investments, increase The success of the focused strategy is We are committed to provide a work
cloud-native offerings and build combined visible in our financial performance, which environment that promotes and safeguards
offerings for automation and artificial intel- shows organic growth, increased EBITA1) and the health, safety and well-being of our people.
ligence (AI) for service delivery. solid Free cash flow. Our long-term targets During the year we have accelerated the
The acquisition of Vonage in 2022 and are to generate an EBITA margin excluding implementation of the cultural transformation
the formation of the business area Global restructuring charges of 15–18% and Free program Ericsson on the Move, with its five
Communications Platform provide us with the cash flow before M&A of 9–12% of sales. We cornerstones: empathy and humanness,
foundation to transform Ericsson into a plat- remain committed to be Net Zero within our cooperation and collaboration, fact-based and
form company and are key steps in Ericsson’s own operations by 2030 and to reach Net Zero courageous decisions, executing speedily, and
expansion into the attractive and high-growth across the value chain by 2040. Our target to fostering a speak-up environment.
enterprise market. 5G is an innovation platform reduce greenhouse gas emissions from our
for digitalizing enterprises and society, which own activities by 35% by 2022 (from a 2016
offers differentiated network performance baseline) has been reached.
1) Excluding restructuring charges and previously announced charges of SEK −5.5 billion in 2022.
6 Business strategy Financial report 2022
A purpose driven organization

Purpose heart of everything we do and ensure that we and create value for stakeholders. Ericsson’s
Ericsson’s purpose, to create connections that do business in the right way. efforts in pioneering a sustainable future are
make the unimaginable possible, is the foun- grounded in concrete targets set across the
dation for the strategy to leverage technology A culture of ethics and integrity value chain. We are committed to supporting
leadership, to enhance our leadership in mobile In addition to being a technology leader and industries' transition towards a low-carbon
networks to grow the mobile network business a market leader, it is equally important to be a economy. We do this by using our technology
and to expand into enterprise. 5G technology leader in how we conduct business. Therefore, leadership and expertise in network opera-
is the platform for innovation, offering nearly we have put in place a solid compliance pro- tions and optimization, in the identification
limitless opportunity to develop superfast, gram with robust processes that permeate the of new innovative opportunities to minimize
highly reliable, low-latency and mission-critical Company. We also invest in simplification of energy consumption in mobile networks, while
services. processes and procedures to strengthen gov- maintaining a consistently high quality of
ernance and accountability. These initiatives customer experience. We continue our efforts
Vision will continue to make us a stronger and even to create a positive safety culture and our
Ericsson’s vision is a world where limitless more resilient company. Target Zero program aims for zero fatalities
connectivity improves lives, redefines business and lost workday incidents by 2025. This target
and pioneers a sustainable future. The vision, Sustainability covers health, safety and well-being efforts for
as well as the purpose, are anchored in the core Sustainability and responsible business everyone working for Ericsson.
values of professionalism, respect, persever- practices are fundamental to Ericsson’s culture
ance, and integrity. These values are at the and strategy to drive business transformation
Ericsson business strategy

Our business strategy is focused on creating long-term value through leadership in mobile networks and a focused expansion into enterprise.
Superior experience for consumers Reliable and easy-to-use solutions for businesses
Customer values
Leading network performance, relentless efficiency and revenue growth in an open world
Businesses
Leadership in mobile networks Focused expansion into enterprise

• Invest in technology leadership for cost, performance and Wireless networks Communication platform
sustainability across RAN, telecom core and OSS/BSS • Pre-packaged solutions • Accelerate the world’s
• End-to-end orchestration, automated deployments & • Leading reliability, security, ability to connect
operation and advanced network services and operations • Global network platform
Be first in critical innovations, and capture strategic business opportunities
Foundation
Technology leadership Cost efficiency Data-driven operations Global skill & scale
Superior experience for consumers and reliable and easy-to-use solutions for businesses
We are well positioned to create long-term trend, where anything that can go wireless satellite-based communication. 5G is also
value with a strategy based on the needs of will go wireless. The capabilities 5G offers, as crucial for the digitalization of many industries,
our customers. The convergence of internet, a wireless technology, will improve and spur including ports, mines and manufacturing. In
mobility and the cloud, combined with a new use cases that drive traffic, such as Fixed the coming years, extended reality (XR) can
powerful 5G network, is driving a rapid Wireless Access (FWA) and mission-critical be the next paradigm shift in technology after
acceleration in digital transformation. We at networks for public safety, rail or utilities and the smartphone, driving multiple times higher
Ericsson are at the epicenter of a powerful eventually also enabling digital airspaces and network requirements.
Leadership in mobile networks
Our customer offering is based on technol- of patents in support of the overall business Sustainability leadership
ogy leadership, offering leading network goals. Our patent portfolio comprises more 5G is significantly more energy efficient than
performance and superior user experience. than 60,000 granted patents. We are making previous generations, supporting both cost and
The increased demand for broader consumer substantial contributions to the development emissions reductions.
and enterprise applications will drive further of standards and cutting-edge technologies. 5G networks are playing a multiplier role
demand on network performance including in addressing climate change by reducing
advanced features such as high speed, time- Global scale and skills not only the ICT industry’s emissions, but
bound latency, network slicing and authenti- Our global presence, the skills and expertise also enabling other sectors to cut their emis-
cation. Our ambition is to help our customers of our people and close interaction with our sions in the transition toward a low-carbon
leverage their network investments by unlock- customers, create opportunities for us to grow economy. Ericsson is driving energy-efficient
ing new revenue streams and by developing with discipline, leading to increased market network modernization through hardware
new revenue-generating use cases in the most footprint and economies of scale. modernization, new software features,
cost-efficient way. network energy optimization services and the
Cost efficiency and productivity across use of AI-enabled automation and digital twin
Technology leadership the supply chain technologies.
Our strong R&D investments position us to We invest in technology for performance lead-
further extend our technology leadership for ership and cost leadership, entailing the ability
cost performance and sustainability. We also to provide the lowest network cost per gigabit.
capitalize on our R&D investments by creating, We continue to focus on improving productivity
securing, protecting, and licensing a portfolio and capital efficiency across our supply chain.
Focused expansion into enterprise

Our Enterprise strategy is organized around customers by developing competitive industrial new network APIs, a deep understanding of the
two pillars, each leveraging the Company’s solutions with leading reliability, security and network and network functionality is required,
strength in mobile networks: Enterprise easy-to-manage operations. This area will and that is our core capability. With the acquisi-
Wireless Solutions, where we are driving busi- provide a growing recurring revenue base with tion of Vonage, Ericsson has a leading position
ness transformation through seamless and a different business model than our mobile in the high growth CPaaS (Communications
secure network solutions, and secondly Global network business. We continue to invest in Platform as a Service) market, as well as the
Communications Platform, where we will be developing a strong product portfolio and Unified Communications as a Service (UCaaS)
able to monetize 5G in new ways by trans- dedicated enterprise go-to-market channels. and Contact Center as a Service (CCaaS) mar-
forming how network features such as high kets. Building on CPaaS, Ericsson has the plat-
speed and low latency are globally exposed, Global Communications Platform form to expose APIs, and a community of more
consumed and paid for. The second pillar of our enterprise business is than one million developers. Network APIs put
powered by our acquisition of Vonage. With 5G, the capabilities of the network at the fingertips
Enterprise Wireless Solutions the network becomes a platform for innovation. of the global developer community who in
With 5G, we are in the early stages of wide- Consumers and enterprises are willing to pay turn will create new innovative use cases,
spread enterprise digitalization – creating a premium for performance, with advanced such as authentication without passwords or
significant additional value for industrial features such as high speed, time-bound low-latency performance for superior extended
applications such as mining, airports, and latency, network slicing and authentication. reality experiences. These new use cases, which
manufacturing. Ericsson provides cost-efficient New differentiated performance services can are based on differentiated performance, will
high-resilience pre-packaged solutions for be created, which require a new monetization offer additional revenue streams on top of the
private 5G networks as well as wireless wide model. communications service providers’ current
area networks (WWAN). There is significant This is where network APIs (application subscription revenues, and transform the way
revenue potential in delivering new 5G enter- programming interfaces) and the global advanced 5G network capabilities are exposed,
prise services. Our ambition is to support our network platform come into play. To develop consumed, and paid for.
Be first in critical innovations and capture strategic business opportunities
New and innovative consumer and solutions. The position as a technology front- Ericsson to be a first mover also in the creation
enterprise applications runner creates advantages for our customers of open global network applications and com-
Investing in technology leadership and leverag- and enables us to capture strategic business pletely new services.
ing 5G as a platform for innovation enables us opportunities. The combination of 5G capabili-
to be first to market with significant innovative ties and the global network platform enables
Corporate responsibility and business integrity

To be an industry leader, market and technol- a guiding framework consistent with all inter- The solid Ericsson Group Management System
ogy leadership are not enough. We also need nationally recognized human rights principles secures the management of our business in a
to be an ethical leader, operating the Company as well as applicable laws and regulations systematic way, which is necessary to build,
with the highest standards based on integrity. where Ericsson operates. The CoBE is our evolve and maintain the essential key E&C
We started our journey to build a culture of compass and guide to all decision-making, capabilities, including the health and safety
compliance and ethics in 2017 and through defining both Ericsson’s ethical principles and and well-being of employees and anyone
this cultural transformation journey we aim its expectations on responsibility across the who is affected by our activities. To further
to protect Ericsson and its assets and create value chain. strengthen Ericsson’s capabilities, and as an
a stronger and improved business. We are With this value chain approach, we relent- element of the E&C program, online training on
strongly committed to continuing to strengthen lessly continue to drive a proactive agenda to anti-bribery and anti-corruption is mandatory
our Ethics and Compliance (E&C) program and further improve and strengthen our responsible for all employees. Managers are also trained
developing and streamlining internal processes business practices and transform our global in leading with integrity and solving ethical
and internal anti-corruption controls further. culture. Our focus is on fostering accountability, dilemmas.
A cornerstone in Ericsson’s strategy is the building and maintaining trust and respect Our corporate responsibility agenda deliv-
ambition to be a relevant driver of positive among stakeholders, and driving transparency ers value to Ericsson and stakeholders across
change. Ethical, responsible and sustainable and integrity in all we do. To further instill this the value chain. Corporate responsibility
business practices are the foundation of our focus, Integrity was added to our long-stand- extends beyond legal compliance through
strategy and of everything we do. Corporate ing core values of Respect, Professionalism proactive mitigation and addressing of risks.
responsibility and business integrity are and Perseverance in 2021. Identifying and managing compliance risks,
embedded in Ericsson’s business and funda- In recent years, efforts have also included including human rights risks, especially in
mental to our culture, no matter where in the enhancing and simplifying Ericsson’s Ethics certain high-risk geographies, are part of this
world we operate. With a zero-tolerance policy and Compliance (E&C) related policies, extensive ongoing work. To ensure the effec-
regarding corruption and financial irregularity, procedures and processes to provide clar- tiveness and sustainability of the E&C program
the revised Code of Business Ethics (CoBE), ity, improve user-friendliness and to set up in the years ahead, the operational E&C plan is
individually signed off by all employees, forms adequate controls for high-risk transactions. continuously updated and strengthened.
Segments
Networks Offering Business model
Networks offers multi-technology capable Radio Access Networks business is primarily based on a model, where
Network (RAN) solutions for all network spectrum Ericsson develops, sells, licenses and delivers hardware,
bands, including integrated high-performing hardware software and services. Networks business also includes
and software. The offering also includes a cloud-native recurring revenue streams such as customer support and
RAN portfolio, a transport portfolio, passive and active software revenues.
antenna solutions and a complete service portfolio
covering network deployment and support.
Cloud Software Offering Business model

and Services
Cloud Software and Services provides solutions for core Cloud Software and Services develops, sells, and
networks, business and operational support systems, delivers solutions, based on software or services, or
network design and optimization, and network managed both. The software solutions typically include services
services. The focus is to enable communications service with contracts for deployment projects as well as
providers to succeed in their transition to cloud-native, recurring revenues from software, support and lifecycle
intelligent and automated networks and operations. management. The network managed services contracts
are typically multi-year outsourcing agreements.
Enterprise Offering Business model
The segment comprises of three business areas offering Global Communications Platform offerings are predomi-
solutions primarily to enterprises: Global Communications nately sold via a monthly recurring consumption-based
Platform (Vonage) including cloud-based Unified revenue model. The Cradlepoint offerings in Enterprise
Communications as a Service (UCaaS), Contact Center Wireless Solutions are sold through a term-based
as a Service (CCaaS) and Communications Platform subscription contract, typically a three-year contract
as a Service (CPaaS); Enterprise Wireless Solutions with subsequent yearly renewal periods. These subscrip-
including private wireless networks and wireless WAN tions have up-front payments at the beginning of the
(Cradlepoint) pre-packaged solutions; Technologies contract and each renewal period. Other contracts in the
and New Businesses including mobile financial services, segment are typically aaS (as a Service) or license based
security solutions and advertising services. with recurring revenue from software licenses, services,
subscriptions and support.
Other Offering Business model
Segment Other comprises of Redbee Media, which Outsourced broadcast service contracts are generally
prepares and distributes live and on-demand video multi-year agreements whilst other media contracts
services for broadcasters, sports leagues and commu- are typically aaS (as a Service) or license based with
nications service providers. The Segment also includes recurring revenue from services, subscriptions and
other non-allocated business. support.
Mobile Networks go-to-market Enterprise go-to-market IPR licensing revenues
Our market is divided into five geographical To reach the enterprise market with busi- Ericsson’s patents are licensed globally on
market areas. The market areas are respon- nesses of all sizes, Ericsson has a multi- FRAND terms to the users of our technology.
sible for selling and delivering products and channel approach, which builds on the The key cellular market segments for our
solutions that are developed in Networks enterprise channel from Cradlepoint. It is patents are smartphones, IoT devices,
and Cloud Software and Services, and a global program with access to tens of consumer electronics and automotive.
focus on communications service provider thousands of reseller partners in Enterprise Beyond cellular, other licensed t echnologies
customers. Close cooperation with our cus- Wireless Solutions. include media technologies and other
tomers is key. In line with the strategy, the In order to provide communication APIs connectivity standards. Ericsson licenses
market areas have responsibility to ensure and create the Global Network Platform, the its patents bilaterally as well as by
that we stay close to our customers while go-to-market model to reach enterprises, participating in p
atent pools covering
maintaining central guidelines and govern- application software providers as well as certain market segments.
ance structures. developers is critical. Vonage has a go-to-
market channel with 120,000 businesses
and a developer community with more than
one million developers.
Market areas
North America
Europe and Latin America
Middle East and Africa
North East Asia
South East Asia, Oceania and India
12 Letter from the Chair of the Board Financial report 2022
Letter from the Chair of the Board
Dear shareholders,
2022 was marked by geopolitical upheav-
als, ushering in a context of rising inflation,
high energy prices, and prolonged supply
chain issues – factors that are impacting
world economic recovery from the COVID-19
pandemic. The geopolitical focal point in 2022
was the war in Ukraine, which has led to great
human suffering and destruction. Despite
these circumstances, Ericsson has once again
demonstrated its resilience and ability to
adapt to challenges; taking the opportunity
to transform by streamlining operations across
the business and further optimizing efficiency
and productivity. All whilst continuing to
develop and deliver best-in-class products
and services to its customers.
Strategic steps
In 2022 the Board invested significant time
in reviewing Ericsson's strategy of leveraging
its leadership in mobile networks, driving
focused expansion in enterprise, leading the
industry with critical innovations, and captur-
ing strategic business opportunities. During
2022, the Company took a major step towards
delivering its enterprise strategy through the
Vonage acquisition. This enterprise strategy
will leverage the company’s strength in mobile
networks to help transform Ericsson into a
platform company, and will maximize long-
term value for Ericsson.
The new business area, Global Communi
cations Platform, provides the business with
the foundation to realize its ambition of
monetizing 5G. It will do this by transforming
how network features are globally exposed,
consumed and paid for. our customers and other stakeholders, is fully program and the execution of the Company’s
The creation of the Cloud Software and endorsed by the Board. Ericsson supports ambition to become a global industry player
Services business segment in 2022 was its customers in their transition towards a underpinned by ethical leadership. The Board
designed to leverage R&D investments, low-carbon economy through its technology worked closely with the management in
increase cloud-native expertise and build leadership, and by identifying new, innovative the Company’s acceleration of its cultural
combined offerings for automation and AI opportunities to minimize energy consumption transformation program, the revamping of
for service delivery. The Board is actively in networks, while maintaining a consistently our global risk management approach, and
overseeing the implementation of the revised high quality of consumer experience. the strengthening of our governance. We also
Cloud Software and Services strategy, with The Board of Directors acknowledges the continue to embed a sustainable program of
a shift in focus from market share gains to vote against discharge from liability at the compliance and controls. In 2022, the Board
profitability. 2022 Annual General Meeting, and empha- witnessed with satisfaction Ericsson’s strong
sizes that best-in-class governance and build- commitment and progress in streamlining
Sustainability and corporate responsibility ing a culture of compliance, ethics and integrity and clarifying internal processes, oversight
Ericsson’s commitment to drive technology have been, and continue to be, a top priority and controls, as well as setting even higher
leadership in both cost performance and for the Board. In 2022, the Board oversaw the expectations of performance and adherence to
sustainability, creating additional value for reinforcement of the Ethics and Compliance its integrity mandate for all employees.
Financial report 2022 Letter from the Chair of the Board 13
On March 2, 2023, importantly, we margin excluding restructuring charges of The Board aims at a stable to progres-
announced our agreement with the United 10%. The company generated SEK 22 billion in sive dividend based on earnings, business
States Department of Justice (DOJ) to resolve Free cash flow (before M&A), supported by the outlook and financial position. As a mark of its
non-criminal breaches of the deferred prosecu- acceleration of initiatives to further increase confidence in Ericsson’s future, the Board will
tion agreement (DPA). Under this agreement, efficiency. propose a dividend for 2022 of SEK 2.70 per
we again accepted responsibility for, and Since 2017, the Company has undergone share to the Annual General Meeting, up from
the Company agreed to plead guilty to, the a considerable transformation, executing on SEK 2.50 in 2021.
pre-2017 conduct that had led to the 2019 its strategy of investing in technology and
DPA. Ericsson will continue its cooperation and cost leadership, with an increased focus on Concluding remarks
partnership with the appointed independent products and solutions. This shift in the cost The commitment and energy of Ericsson’s
compliance monitor and is now in its third base and strong execution restored Ericsson to employees are critical to the Company’s suc-
year of an extended four-year independent a competitive position, enabling it to reach its cess. Great emphasis is therefore placed on
compliance monitorship. With respect to Iraq, 2020 and 2022 targets earlier than expected. career management, leadership, and factors
I emphasize that this relates wholly to histori- Ericsson’s technology leadership and that secure Ericsson’s ability to attract, moti-
cal conduct. And, as we announced on March 2, innovation-based value creation are key, vate and retain talent. Moreover, Ericsson has
2023, the Company’s 2019 investigation enabling the Company to leverage R&D invest- a long-term variable compensation program
did not conclude that Ericsson made or was ments beyond mobile broadband, to fixed focused on value creation.
responsible for any payments to any terrorist wireless access and the wider enterprise space. Finally, during 2022 the Board conducted
organization; and the Company’s significant Moreover, the increased demand for broader 29 meetings, well supported by Börje Ekholm
further investigation over the course of 2022 consumer and enterprise applications will drive and the Executive team. On behalf of all
has not altered this conclusion. further demand for network performance and members of the Board, I would like to take this
Since 2017, under the strong leadership of Ericsson is positioned to capture that upside opportunity to thank the management and all
Börje Ekholm, the Company has strengthened with limited additional R&D investments. This employees at Ericsson, for their efforts, com-
its approach to risk management, compliance is a result of the Company's extended leader- mitment and achievements during 2022. I also
and internal controls, including an enhance- ship in mobile networks and focused expan- offer my personal thanks to Börje Ekholm and
ment of its anti-corruption compliance sion into enterprise. In addition, the current his team for their collaboration during my years
program to prevent and detect problematic shift in focus towards higher R&D productivity as Chairman.
conduct. The Board will continue its active will be crucial going forward, as will significant As previously announced, Jan Carlson
oversight and, with our full support, Börje IPR revenue growth potential over the coming will be proposed as my successor at our 2023
and his leadership team will continue to drive 18–24 months in new and existing areas. Annual General Meeting. It has been my
governance, compliance and cultural change, great honor to serve as chairman of this great
which will give Ericsson a competitive advan- Capital structure company. I am confident that the Company’s
tage in our vital mission. The Board oversees resource allocation and leadership, resilience, and its steadfast com-
monitors Ericsson’s capital structure with the mitment to transformation and to building a
Customer focus and technology leadership aim of safeguarding balance sheet strength, culture of ethics and integrity, put it in a strong
Long-term value creation is key for all our generating Free cash flow in line with the position to continue leading the industry and
stakeholders, and by partnering with front-run- target of 9–12% Free cash flow before M&A capitalize on even bigger opportunities. I wish
ner customers, Ericsson is truly at the heart of over net sales, and deploying capital wisely for Jan, the Board of Directors and all Ericsson
the industry’s development. The company has maximum value creation. Near-term focus will colleagues the best for the future.
showcased its leadership position in mobile be ensuring a strong financial position, prior-
networks by expanding its global market share itizing investments to support the strategy, and
(outside of China) through customer-centric enhancing technology and market leadership,
competitive offerings. In 2022, Ericsson gener- supported by bolt-on acquisitions with attrac- Ronnie Leten
ated revenues of SEK 272 billion with an EBIT tive returns and a clear strategic fit. Chair of the Board
14 Board of Director’s report Financial report 2022
Board of Director’s report
Contents 2022 highlights

14 Business in 2022 – Reported sales increased by 17% to SEK 271.5 (232.3) billion. Group organic sales grew by
15 Financial highlights 3%, with an increase in Networks organic sales of 4% and in Enterprise of 16%. Gross income
18 Business results – Segments increased to SEK 113.3 (100.7) billion with increases in segments Networks, Cloud Software
20 Business results – Market areas and Services, and Enterprise.
21 Corporate governance – EBIT decreased to SEK 27.0 (31.8) billion with an EBIT margin of 10.0% (13.7%). EBIT
22 Material contracts margin excluding restructuring charges was 10.1% (13.9%). Excluding Vonage and previously
22 Risk management announced charges of SEK −5.5 billion during the year, EBIT margin was 12.9%, reaching the
22 Sourcing and supply 2022 target of 12–14%.
22 Sustainability and Corporate Responsibility – EBITA amounted to SEK 29.1 (33.3) billion with an EBITA margin of 10.7% (14.3%). EBITA
23 Security and Privacy was negatively impacted by previously announced charges in 2022 of SEK −5.5 billion, partly
23 Ericsson interactions with US authorities compensated by increased IPR licensing revenues.
and other governmental authorities
23 Legal proceedings
– Net income was SEK 19.1 (23.0) billion. Earnings per share (EPS) diluted was SEK 5.62 (6.81).
24 Parent Company – Operating cash flow was SEK 30.9 (39.1) billion. Free cash flow before M&A amounted to
24 Share information SEK 22.2 (32.1) billion. Net cash was SEK 23.3 (65.8) billion on December 31, 2022.
24 Proposed disposition of earnings – The Board of Directors proposes a dividend for 2022 of SEK 2.70 (2.50) per share to the AGM.
25 Proposal of new guidelines for
Remuneration to Group Management
28 Guidelines for Remuneration to
Group Management Business in 2022
33 Board assurance In 2022, reported sales increased to SEK 271.5 large-scale projects from market share gains in
(232.3) billion. A weaker Swedish krona (SEK) Networks, as well as an impact from initial 5G
had a positive impact on reported sales in all Core deployment costs in Cloud Software and
Net sales segments. Sales growth adjusted for compara- Services. Gross margin in Enterprise declined
SEK billion ble units and currency was 3%, mainly driven mainly due to the dilutive effect of Vonage.
300 by growth in Networks and in Enterprise. Higher IPR licensing revenues in the sales mix
271.5
Reported sales grew by 15% in Networks, had a positive impact on the gross margin.
250 232.4 232.3 while organic sales increased by 4%, primarily Operating expenses increased to SEK −83.0
200 supported by continued market share gains as (−69.1) billion, including a currency effect of
well as increased IPR licensing revenues. From SEK −3.8 billion. Research and development
150
a geographical point of view, sales growth was (R&D) expenses increased by SEK −5.2 billion
100 primarily driven by North America, Europe and to SEK −47.3 billion including a currency
Latin America as well as by South East Asia, effect of SEK −2.1 billion. R&D expenses
50
Oceania and India. increased primarily in segments Networks and
0 Reported sales increased in Cloud Software Enterprise. Selling and administrative (SG&A)
2020 2021 2022
and Services by 8%, while organic sales expenses increased by SEK −8.7 billion to
Net sales
decreased by −1%. Sales growth in North SEK −35.7 billion including a currency effect of
America and increased IPR licensing revenues SEK −1.7 billion. The increase is mainly related
were offset by sales decline in managed to the acquisition of Vonage (SEK −4.3 billion)
EBIT and EBIT margin networks services business as a result of and investment in the go-to-market organiza-
descoping and contract exits. tion in Enterprise Wireless Solutions as well as
SEK billion%
35 13.7% 14
Reported sales in Enterprise increased to increases in compliance and legal expenses.
12.0% SEK 15.4 (6.2) billion, driven by the acquired Restructuring charges decreased to
30 31.8 12
10.0% Vonage business as well as by growth in SEK −0.4 (−0.5) billion.
27.8
25
27.0
10 Enterprise Wireless Solutions. Organic sales EBIT was SEK 27.0 (31.8) billion, impacted
20 8 in Enterprise increased by 16% driven mainly by previously announced charges of SEK −5.5
by Enterprise Wireless Solutions. billion during the year. The main items were
15 6
Gross income increased to SEK 113.3 SEK −2.3 billion due to a provision in relation
10 4 (100.7) billion with increases in all segments. to a potential resolution 1) with the United
5 2 Gross margin decreased to 41.7% (43.4%), States Department of Justice (DOJ) (includ-
negatively impacted mainly by increased ing estimated expenses for the previously
0 0
2020 2021 2022 component costs, inflationary pressure and announced extended monitorship), charges
EBIT 1) On March 2, 2023, the Company reached a resolution with the DOJ (the DOJ Plea Agreement) and agreed to pay a fine of approximately
EBIT margin SEK 2.2 billion.
Financial report 2022 Board of Director’s report 15
IPR licensing revenues of SEK −1.0 billion related to the divestment of acquisition, which contributed with sales of
SEK billion
IoT and other portfolio adjustments, SEK −0.9 SEK 7.0 billion.
12 billion related to market exits including Russia, The share of hardware in the sales mix was
10.0 10.4 SEK −0.8 billion related exit of subscale agree- 44% (46%), software 20% (20%) and services
10 36% (34%).
ments and product offerings in Cloud Software
8
8.1 and Services, as well as acquisition-related
costs of SEK −0.4 billion related to Vonage. Gross income
6 The number of employees increased to Gross income increased to SEK 113.3
4
105,529 (101,322). The increase is mainly (100.7) billion with increases in all segments.
driven by the acquisition of Vonage and Gross margin decreased to 41.7% (43.4%),
2 increases in service delivery. negatively impacted mainly by increased
Cash flow from operating activities was component costs, inflationary pressure and
0
2020 2021 2022 SEK 30.9 (39.1) billion. Free cash flow before large-scale projects from market share gains
IPR revenues
M&A amounted to SEK 22.2 (32.1) billion. in Networks, as well as an impact from initial
Free cash flow was impacted by an increase in 5G Core deployment costs in Cloud Software
working capital, primarily in inventory, higher and Services, partly offset by retroactive IPR
taxes as well as higher interest paid. Net cash licensing revenues.
Software, hardware and at December 31 was SEK 23.3 (65.8) billion.
services: share of total sales The decrease is primarily a result of the acqui- Research and development (R&D) expenses
% sition of Vonage in July 2022. R&D expenses increased by SEK −5.2 billion
100 to SEK −47.3 (−42.1) billion including a
22% 20% 20%
currency effect of SEK −2.1 billion. R&D
80 Financial highlights expenses increased primarily in Networks as
41% 46% 44% Net sales a result of further investments in Cloud RAN
60 Reported sales increased by 17% to SEK 271.5 and in Ericsson Silicon (ASICs) as well as in
(232.3) billion. Networks sales increased by Enterprise, through the acquisition of Vonage
40
37% 36%
SEK 25.6 billion to SEK 193.5 billion. Cloud and increased investments in Enterprise
34%
Software and Services sales increased by Wireless Solutions.
20
SEK 4.3 billion to SEK 60.5 billion. Enterprise
0 sales increased by SEK 9.1 billion to SEK 15.4 Selling and administrative (SG&A) expenses
2020 2021 2022
billion. Sales in segment Other increased SG&A expenses increased by SEK −8.7 b illion
Software by SEK 0.2 billion, to SEK 2.2 billion. Sales to SEK −35.7 (−27.0) billion including a
Hardware adjusted for comparable units and currency currency effect of SEK −1.7 billion. The increase
Services increased by 3%. is mainly related to the acquisition of Vonage
IPR licensing revenues increased to (SEK −4.3 billion), investments in the go-to-
SEK 10.4 (8.1) billion primarily as a result of market organization for Enterprise Wireless
a new patent license agreement including 5G. Solutions and increases in compliance and
Gross margin and restructuring
charges Networks sales adjusted for comparable legal expenses.
units and currency increased by 4%. Market
SEK billion% Other operating income and expenses
areas North America, Europe and Latin
10 50
43.5% America and South East Asia, Oceania and Other operating income and expenses was
41.8%
40.6%
43.4% India reported mid-single digit organic growth SEK −3.3 (0.4) billion impacted by SEK −2.3
8 40
40.3% 41.7%
while sales in North East Asia and Middle East billion due to a provision in relation to a poten-
6
30.0
30
and Africa declined. Reported sales grew by tial resolution 1) with the DOJ including esti-
15%. Networks accounted for 71% (72%) of mated expenses for the previously announced
4 20 Group sales. extended monitorship, and by SEK −1.0
Cloud Software and Services sales adjusted billion due to the announced charges related
2 10 for comparable units and currency decreased to the divestment of IoT and other portfolio
0.7
0.3 0.4 by −1%. Sales growth in North America and adjustments.
0
2020 2021 2022
0 in IPR licensing revenues was more than Share in earnings of JVs and associated
offset by sales decline in other market areas. companies was SEK 0.0 (−0.3) billion.
Restructuring charges in cost of sales
ross margin as reported
G
Reported sales grew by 8%. Cloud Software
Gross margin excl. restructuring charges and Services accounted for 22% (24%) of Restructuring charges
Group sales. Restructuring charges decreased to SEK −0.4
Enterprise sales adjusted for comparable (−0.5) billion.
units and currency grew by 16% driven
primarily by business area Enterprise Wireless Earnings before interest, taxes and
Solutions. Reported sales grew by 147%. amortizations (EBITA)
Enterprise accounted for 6% (3%) of Group EBITA declined to SEK 29.1 (33.3) billion with
sales. The increase was a result of the Vonage an EBITA margin of 10.7% (14.3%). EBITA
1) On March 2, 2023, the Company reached a resolution with the DOJ (the DOJ Plea Agreement) and agreed to pay a fine of approximately
SEK 2.2 billion.
Net income and EPS diluted was impacted by previously announced Free cash flow
SEK billion SEK
charges of SEK −5.5 billion during the year and Free cash flow before M&A was SEK 22.2
25 8 higher R&D expenses in segments Networks (32.1) billion or 8.2% (13.8%) in relation to
23.0
and Enterprise as well as increased SG&A sales, compared with the long-term target of
20 6.81
19.1 expenses in segment Enterprise, mainly from 9−12%. Capex net and other investing activi-
17.6 6
5.62
the acquisition of Vonage. ties was SEK −6.1 (−4.6) billion. Repayment of
15 5.26 lease liabilities was SEK −2.6 (−2.4) billion. The
4 Earnings before financial items and increase is related to higher interest rates for
10 income tax (EBIT) property leases.
2 EBIT decreased to SEK 27.0 (31.8) billion, with Free cash flow after M&A was SEK −29.5
5
an EBIT margin of 10.0% (13.7%). EBIT was (32.1) billion. The decrease is primarily a result
impacted by SEK −2.1 (−1.4) billion of amor- of the acquisition of Vonage in July 2022.
0 0
2020 2021 2022 tization of intangible assets, mainly related
Net income
to Vonage. Cash flow from investing activities
EPS diluted Cash flow from investing activities was
Financial income and expenses SEK −34.4 (−19.9) billion due to the acquisi-
Financial income and expenses improved tion of Vonage with a purchase price paid of
by SEK 0.1 billion to SEK −2.4 (−2.5) billion, SEK −51.3 billion, partly mitigated by disposal
Free cash flow of interest-bearing securities.
mainly due to foreign exchange revaluation
SEK billion effects. The currency hedge effect impacted
40 financial income and expenses by SEK −0.9 Cash flow from financing activities
32.1
30 (−0.8) billion. The USD strengthened a gainst Cash flow from financing activities was
22.3 22.2
20 the SEK between December 31, 2021 SEK −15.9 (−9.3) billion including repayment
10 (SEK/USD rate 9.05) and December 31, 2022, of lease liabilities. During the year, dividends
0
0.1 (SEK/USD rate 10.38). of SEK −8.4 (−6.9) billion were paid to share
−10
−9.6 holders. The net impact on cash flow from
−20
Taxes issuance and repayment of long-term debt,
−30
Taxes were SEK −5.5 (−6.3) billion, positively including repayment of debt related to Vonage,
−40
impacted by utilization of previously impaired was SEK −5.3 billion.
−50
−60
−51.7 withholding tax assets in Sweden. The effec-
2020 2021 2022 tive tax rate in 2022 was 22%, compared with Financial position
Free cash flow before M&A 21% in 2021. Gross cash decreased to SEK 56.2 (97.6) billion
M&A due to the acquisition of Vonage, repayment
Net income of Vonage debt and dividends paid to Ericsson
Net income declined to SEK 19.1 (23.0) billion. shareholders. The decrease was partly com-
EPS diluted was SEK 5.62 (6.81) and Adjusted pensated by positive free cash flow. Net cash
Working capital days
EPS was SEK 6.16 (7.26). was SEK 23.3 (65.8) billion.
Days Liabilities for post-employment benefits
100 Employees decreased to SEK 27.4 (36.1) billion primarily
The number of employees on December 31, due to higher discount rates. The Swedish
90 2022, was 105,529, a total increase of 4,207 defined benefit obligation (DBO) was calcu-
employees compared with December 31, lated using a discount rate based on the yields
80
2021. The increase is mainly driven by the of Swedish government bonds. If the discount
acquisition of Vonage and increases in service rate had been based on Swedish covered mort-
70 69 delivery. gage bonds, the liabilities for post-employment
60
65 65 benefits would have been approximately
Cash flow SEK 10.9 billion (SEK 16.5 billion lower than
50 Cash flow from operating activities the reported liabilities).
2020 2021 2022
Cash flow from operating activities was The average maturity of long-term borrow-
orking capital days
W SEK 30.9 (39.1) billion, following an increase ings was 3.8 years as of December 31, 2022,
Days sales outstanding
(target is less than 90 days) in working capital mainly as a result of a deci- an increase from 3.5 years 12 months earlier.
Inventory days sion to strengthen the supply chain resilience In February 2022, Ericsson issued a
(target is less than 65 days)
Payable days
in view of global component shortage. In EUR 750 million (SEK 7.8 billion) bond matur-
(target is more than 60 days) addition, the lower EBIT and higher taxes paid ing in February 2027. In May 2022, Ericsson
affected cash flow negatively compared with repaid its USD −1.0 billion (SEK −10.0 billion)
2021. bond.
Accounts receivable days of sales outstand- In July 2022, Ericsson completed the acqui-
ing decreased to 61 (71) days while inventory sition of Vonage. The cash effect on the day of
turnover days increased to 93 (88) and pay- the acquisition amounted to SEK −51.3 billion,
able days decreased to 85 (94). This resulted in adjusted by a positive cash flow hedge release
an increase in working capital days to 69 (65) of SEK 3.7 billion. Following the acquisition,
days. a Vonage debt of USD −0.6 billion (SEK −5.9
billion) was repaid.
Return on capital employed Ericsson has an unutilized revolving credit Off-balance sheet arrangements
SEK billion%
facility of USD 2.0 billion, linked to two of There are currently no material off-balance
250 20 Ericsson’s long-term sustainability goals. The sheet arrangements that have, or would
18.4%
17.0% facility is set to expire in 2027, with a one-year be reasonably likely to have, a current or
202.9
200 184.3 16 extension option. anticipated material effect on the Company’s
162.0 Ericsson has established a Green Financing financial condition, revenues, expenses, result
14.0%
150 12 Framework to enable financing of investments of operations, liquidity, capital expenditures or
in energy-efficient technologies, such as 4G, capital resources.
100 8 5G and future 6G, and renewable energy
solutions. Capital expenditures
50 4
Ericsson has established a commercial For 2022, capital expenditure was SEK 4.5
paper program for short-term borrowing. The (3.7) billion, representing 1.6% of sales.
0 0
2020 2021 2022 program is a complement to Ericsson funding Expenditures are largely related to test sites
Capital employed end of period
and has not yet been utilized. and equipment for R&D, network opera-
Return on capital employed S&P Global and Fitch Ratings both have tion centers and manufacturing and repair
a long-term BBB- rating on Ericsson, with operations.
developing outlook from S&P Global and a Annual capital expenditures are normally
stable outlook with Fitch Ratings. Moody’s around 2% of sales. This corresponds to the
Cash position
has a Ba1 rating with stable outlook. need for keeping and maintaining the current
SEK billion The capital turnover increased to 1.4 (1.3) capacity level. The Board of Directors reviews
100
97.6
times, while Return on capital employed the Company’s investment plans and propos-
80 72.0
(ROCE) decreased to 14.0% (18.4%) as a als. As of December 31, 2022, no material
65.8 result of higher capital employed and lower land, buildings, machinery or equipment
60 56.2
EBIT. were pledged as collateral for outstanding
41.9
40 indebtedness.
23.3
20 Research and development, patents and
licensing Capital expenditures 2020–2022
0
In 2022, R&D expenses amounted to SEK billion 2022 2021 2020
−20 SEK −47.3 (−42.1) billion. R&D expenses were Capital expenditures 4.5 3.7 4.5
−27.4
−37.4 −36.1
impacted by a currency effect of SEK −2.1 Of which in S weden 1.7 1.5 1.9
−40
2020 2021 2022
billion and SEK −0.1 (−0.1) billion of restructur- Share of annual sales 1.6% 1.6% 1.9%
Gross cash ing charges. The number of R&D resources

Net cash increased to 29,304 (27,379) and the number Capitalized development expenses
Liability for post employment benefits of granted patents amounted to more than Capitalized development expenses increased
60,000. to SEK −1.7 (−1.0) billion primarily due to 5G
development projects and the acquisition of
Debt maturity, Parent C
ompany1) Seasonality Vonage.
The Group’s sales, income and cash flow from
SEK billion operations vary between quarters, and are
10
generally lowest in the first quarter of the year
2.9 8.3 and highest in the fourth quarter. This is mainly
8
a result of the seasonal purchase patterns of
6
the Company’s customers.
5.5
4
Most recent three-year average seasonality
1.6 3.2
First Second Third Fourth
2.3 2.1 quarter quarter q
uarter quarter
2
Share of annual
5.5 1.6 0.0 Group sales 21% 24% 25% 31%
0
2023 2024 2025 2026 2027 2028 2029 2030 Sequential change,
sales within
Notes and bonds Networks −23% 12% 4% 22%
Nordic Investment Bank Sequential change,
European Investment Bank sales within
Swedish Export Credit Corporation Cloud Software
1) Nominal amounts using FX rates per year end 2022.
and Services −35% 12% 2% 35%
Sales split per segment Business results – Segments
Networks Cloud Software and Services

Networks represented 71% (72%) of Group Cloud Software and Services represented
net sales in 2022. Networks offers multi-tech- 22% (24%) of Group net sales in 2022. Cloud
nology capable Radio Access Network (RAN) Software and Services provides solutions
solutions for all network spectrum bands, for core networks, business and operational
including integrated high-performing hard- support systems, network design and optimi-
ware and software. The offering also includes zation, and network managed services. The
a cloud-native RAN portfolio, a transport port- focus is to enable communications service
Networks 71% folio, passive and active antenna solutions and providers to succeed in their transition to cloud
Cloud Software and Services 22% a complete service portfolio covering network native, intelligent and automated networks
Enterprise 6%
Other 1%
deployment and support. and operations.
Net sales Net sales

Reported sales increased by 15% in 2022 to Reported sales increased by 8% to SEK 60.5
Networks SEK 193.5 (167.8) billion. Growth was driven (56.2) billion in 2022. Sales adjusted for com-
SEK billion%
primarily by North America, Europe and Latin parable units and currency decreased by −1%.
America, South East Asia, Oceania and India Sales growth in market area North America
200 193.5 32
as well as by increased IPR licensing revenues. and higher IPR licensing revenues were offset
166.0 167.8
Sales adjusted for comparable units and by sales decline in managed networks services
150 24
22.2% currency increased by 4%. business as a result of descoping and contract
19.9% exits.
18.6%
100 16 Gross income
Gross income increased by SEK 7.5 billion to Gross income
50 8
SEK 86.4 billion while gross margin decreased Gross income increased by SEK 1.3 billion to
37.3 38.5
30.9 to 44.6% (47.0%). Gross margin was impacted SEK 20.1 billion. Gross margin was stable at
by increased component costs, inflationary 33.2% (33.5%). Positive impact from higher
0 0
2020 2021 2022 pressure, and investments in supply chain IPR licensing revenues in the sales mix was
Net sales resilience, partly offset by higher IPR licensing offset by initial 5G Core deployment costs.
EBIT revenues in the sales mix and commercial
EBIT margin
activities. Large scale projects from market EBIT (loss)
share gains had a dilutive impact on the gross EBIT was SEK −1.7 (−2.2) billion with an EBIT
margin. margin of −2.8% (−4.0%). EBIT was negatively
Cloud Software and Services impacted by a previously announced cost
EBIT of SEK −0.8 billion as a result of continued
SEK billion%
EBIT increased to SEK 38.5 (37.3) billion, with execution of the Cloud Software and Services
70 40
59.6
a decrease in EBIT margin to 19.9% (22.2%), revised strategy. The strategy includes limiting
60.5
30
60
56.2 impacted by lower gross margin. subscale software development, accelerating
50 20 Operating expenses increased by SEK −6.4 automation to reduce deployment and mainte-
40 10 billion to SEK −48.3 billion (including a nance efforts, and changing focus from market
30 0 negative currency impact of SEK −2.0 billion), share gains to profitable business.
20
−1.3% −4.0% −2.8%
−10
primarily due to higher investments in R&D Operating expenses increased by SEK −0.7
in Cloud RAN and in Ericsson Silicon (ASICs). billion to SEK −21.9 billion (including a nega-
10 −20
Networks EBIT margin exceeded the 2022 tive currency impact of SEK −1.0 billion).
0 −30
−0.8 −2.2 −1.7 target of 16–18%.
−10 −40
2020 2021 2022
Net sales
EBIT
EBIT margin
Enterprise
SEK billion %
20 10
Enterprise Other
Segment Enterprise represented 6% (3%) Segment Other represented 1% (1%) of Group
15.4
15 0 of Group net sales in 2022. The segment net sales in 2022. Segment Other includes
comprises of three Business Areas offering media businesses as well as other non-
10 −10
6.2
solutions primarily to Enterprise: Global allocated business.
4.8
5 −20 Communications Platform (Vonage) includ-
ing cloud-based Unified Communications as Net sales
0 −30
−1.9
a Service (UCaaS), Contact Center as a Service Reported sales increased by 8%.
−3.0 −40.5%
−5 −40 (CCaaS) and Communications Platform Sales adjusted for comparable units and
−40.4% −47.5% −6.2
as a Service (CPaaS); Enterprise Wireless currency increased by 3% compared to 2021.
−10 −50
2020 2021 2022 Solutions including private wireless networks Sales in the media business were stable.
Net sales and wireless WAN (Cradlepoint) pre-packaged
EBIT solutions; Technologies and New Businesses Gross income
EBIT margin
including mobile financial services, security Gross income decreased by SEK −0.3 billion
solutions and advertising services. primarily due to the previously announced
charges related to a market exit (SEK −0.2
Other Net sales billion). For this reason, gross margin
Reported sales increased by 147% driven by decreased to −5.7% (7.9%).
SEK billion % the acquired Vonage business. Reported sales
5 50 growth exceeded 70% in Enterprise Wireless EBIT (loss)
4
Solutions. Sales adjusted for comparable units EBIT (loss) was SEK −3.6 (−0.3) billion,
3 −15.4% −14.2% 0
and currency increased by 16% in 2022, driven impacted by a provision of SEK −2.3 b illion in
2 2.2
2.0 2.0 mainly by Enterprise Wireless Solutions. relation to a potential resolution 1) with the
1 −50
0
DOJ including e stimated expenses for the
−1
−0.3 −0.3
−100
Gross margin previously announced extended monitor-
−2 Gross margin decreased to 45.2% (46.4%) ship. Furthermore, there was an impact of
−3 −150 mainly due to the dilutive effect of Vonage. SEK −0.9 billion for a provision related to exit
−164.2%
−4 −3.6 from operations in Russia and previously
−5
2020 2021 2022
−200 EBITA (loss) announced market exit costs.
EBITA (loss) was SEK −4.5 (−2.3) billion. The
Net sales
EBIT
decline is mainly due to previously announced
EBIT margin charges related to the divestment of IoT
and other portfolio adjustments as well as
increased growth investments in Enterprise
Wireless Solutions and Vonage acquisition-
related costs.
EBIT (loss)
EBIT (loss) was SEK −6.2 (−3.0) billion
impacted by amortization of intangible assets
from acquired businesses.
1) On March 2, 2023, the Company reached a resolution with the DOJ (the DOJ Plea Agreement) and agreed to pay a fine of approximately
SEK 2.2 billion.
Sales split per market area Business results – Market areas
North America South East Asia, Oceania and India

Reported sales grew by 23% to SEK 95.4 Reported sales grew by 14% to SEK 33.0
billion. Sales adjusted for comparable units billion. Sales adjusted for comparable units and
and currency increased by 5% driven by 5G currency increased by 7% driven by increased
network deployments and growth in 5G Core volumes in India on the back of significant
and Cloud Native solutions. market share gains. These gains compensated
for lower investment levels in certain countries
Europe and Latin America in the market area.
North America 35% Reported sales grew by 11% to SEK 66.8
Europe and Latin America 25% billion. Sales adjusted for comparable units North East Asia
Middle East and Africa 8%
South East Asia, Oceania and India 12% and currency increased by 4% with increases Reported sales declined by −8% to SEK 26.7
North East Asia 10% in both Europe and in Latin America. Sales in billion. Sales adjusted for comparable units and
Other 10%
Networks increased as a result of high invest- currency decreased by −11%, as communica-
ment levels during the year and market share tions service providers in several markets have
gains, partly offset by the decline in Russia. finalized the first build-out phase of 5G.
Middle East and Africa Other

Reported sales grew by 9% to SEK 22.6 bil- Market area Other primarily includes IPR
lion. Sales adjusted for comparable units and licensing revenues and a major part of seg-
currency decreased by −1%, primarily due to ment Enterprise. Reported sales grew by 71%
lower sales volumes in countries hit by currency driven by the acquisition of Vonage as well as
devaluation and macro-economic challenges. increased IPR licensing revenues of SEK 10.4
(8.1) billion primarily as a result of new patent
license agreement including 5G.
Reported sales per market area – 2022 compared with 2021
SEK
271.5
billion
+23%
+71%
SEK
232.3 +11%
billion +14%
−8% +9%
2021 North Middle East South Europe and Other North 2022
East Asia and Africa East Asia, Latin America America
Oceania
and India
Sales adjusted for –11% –1% +7% +4% N/A +5%

comparable units
and currency,
growth/decline
Corporate governance oversight of ongoing implementation of by the unions, with Ulf Rosberg, Loredana
In accordance with the Swedish Annual the Company’s compliance and internal Roslund and Annika Salomonsson as deputies.
Accounts Act and the Swedish Corporate controls program;
Governance Code (the Code), a separate – substantially increasing the resources in Management
Corporate Governance Report, including an the Compliance office and Corporate & Since 2017 Börje Ekholm has been President
internal control section, has been prepared Government Investigations team, and and CEO of the Group. The President and
and appended to this Financial Report. continuing to invest in transactional CEO is supported by the Group management,
controls and analytics; and consisting of the Executive Team.
Ericsson’s Corporate Governance – making enhancements to risk assessments, Ericsson has a global management system,
Ericsson is committed to ensuring the highest including expanded risk assessments to the Ericsson Group Management System
standards of corporate governance: effective address country specific compliance risks, (EGMS). EGMS aims to ensure that Ericsson’s
oversight across the organization (by the and continuing to tighten our vetting and business is well-managed and has the ability
Board, the President and CEO and the Execu- oversight of third parties with whom we to fulfil the objectives of major stakeholders
tive Team); effective decision making with clear work, to choose parties who will meet our within established risk limits and with reliable
accountabilities at all levels; a robust approach ethics and compliance expectations. internal control. EGMS also aims to ensure
to risk management to effectively identify and compliance with applicable laws, listing
control risks; compliance with law in everything The Company has strengthened its executive requirements, governance codes and corpo-
we do; and an integrity-led culture. oversight of risk management with the recruit- rate responsibilities.
The Company has adopted corporate ment of highly-experienced executives, includ-
governance practices and procedures that ing a new Chief Legal Officer, and a new Head Discharge from liability vote at the 2022
establish clear rules of governance, ranging of Corporate & Government Investigations. Annual General Meeting
from matters requiring approval of the Com- Under the Swedish Companies Act, the Annual
pany’s shareholders and members of its Board Continued compliance with the Swedish General Meeting (AGM) of Swedish limited
to conflict of interest policies, and director and Corporate Governance Code liability companies should include a vote on
management duties and obligations. More Ericsson is committed to complying with whether or not to discharge each individual
information can be found on our website at best-practice corporate governance standards member of the Board and the CEO and
https://www.ericsson.com/en/about-us/ on a global level wherever possible. For 2022, President from legal liability for the previous
corporate-governance. Ericsson does not report any deviations from financial year. If shareholders representing at
the Code. least 10% of the Company’s share capital vote
Key Corporate Governance Developments against this discharge from liability, an action
in 2022 Business integrity for damages on behalf of the Company may
In the first quarter of 2022, the Board and Ericsson’s Code of Business Ethics (CoBE) be brought within one year.
Ericsson’s President and CEO requested that outlines the fundamental ethical principles A vote against the discharge from liability
the Executive Team, led by the Chief Legal and expectations that guide Ericsson’s deci- does not predicate or in itself lead to legal
Officer and working with the Audit and Com- sions and is designed to ensure that Ericsson action.
pliance Committee, review the Company’s pursues business with a strong sense of integ- At Ericsson’s AGM on March 29, 2022,
corporate governance practices with a view rity. It reflects the Company’s commitment to Ericsson shareholders representing more than
to extending them beyond the standard and conducting business responsibly, consistent 70% of the Company’s share capital voted for
mandatory levels of compliance and introduc- with all internationally recognized human discharging from liability each of the members
ing enhancements. The Company is pleased to rights principles and the applicable laws and of the Board and the Company’s CEO and
report that good progress has been made and regulations where Ericsson operates. President for the financial year 2021 and
our governance enhancements will continue Ericsson reviews and updates CoBE’s more than 10% voted against. At the same
to be made throughout 2023. The priorities content periodically, and runs an acknowl- AGM, Ericsson’s shareholders voted in favor
that were implemented in 2022 are as follows: edgment process regularly to ensure that of re-electing the individuals nominated for
– introduction of an enhanced approach to everyone working for Ericsson has read and Board (including the CEO and President). The
risk management and establishment of understood it. New employees and individuals Company’s external auditor, Deloitte, recom-
a Group Business Risk Committee (BRC) starting to work for Ericsson are also required mended that shareholders vote in favor of
comprising executives and co-chaired by to acknowledge their understanding of CoBE discharging liability.
the Chief Financial Officer and the Chief upon their recruitment or on the first day of Regardless of the shareholder decision
Legal Officer; their assignment. at the 2022 AGM, the Board has and will
– enhancing disclosures on our corporate continue to work actively with management
governance practices; Board of Directors to continuously improve Ericsson’s internal
– formally introducing compliance and integ- At the Annual General Meeting, held on March controls, governance, risk management and
rity performance indicators into executive 29, 2022, Ronnie Leten was re-elected as compliance program, recognizing the critical
remuneration; Chair of the Board, and Jon Fredrik Baksaas, importance of these areas to the Company’s
– formally expanding the remit of the Audit Jan Carlson, Nora Denzel, Börje Ekholm, overall strength and competitiveness. The
and Compliance Committee to ensure Eric A. Elzvik, Kurt Jofs, Kristin S. Rinne, embedding of a sustainable and strong culture
enhanced oversight of the compliance Helena Stjernholm and Jacob Wallenberg of integrity and ethics into all of Ericsson’s
program, high-risk investigations, and risk were re-elected as members of the Board. businesses and operations continues to be a
management; Carolina Dybeck Happe was elected as a new priority for the Board throughout 2022 and
– increasing the number of Audit and Compli- Board member. As of March 29, 2022, Torbjörn into the future.
ance Committee meetings and enhancing Nyman, Anders Ripa and Kjell-Åke Soting
the Audit and Compliance Committee’s were appointed as employee representatives
Remuneration management with strategy-setting and execu- components and services from global, regional
Remuneration to the members of the Board tion. The ERM framework is designed to estab- and local suppliers.
of Directors and to Group management are lish an adequate and effective management of The Company negotiates global supply
reported in note G2, “Information regarding risk, i.e. the uncertainty in achieving the strate- agreements with its primary suppliers. In
members of the Board of Directors and the gic objectives of the Company. The framework general, Ericsson endeavours to have alterna-
Group management.” Further information provides methods to identify, assess and treat tive supply sources and seeks to avoid single
about remuneration to the President and CEO the risks, and to agree on and stay within the source supply situations, as a means to build
and the Executive Vice Presidents is included Company’s risk appetite. resilience in the supply chain.
in the “Remuneration report” appended to this Each manager is responsible for handling The production of electronic modules
Financial Report. the risks that emerge from their respective and sub-assemblies is mostly outsourced to
areas of responsibility. The responsibility manufacturing services companies. Ericsson
uidelines for remuneration to Group
G for identified prime risks of the Company is is focusing internal manufacturing on new
management always allocated to an Executive Team mem- product introductions and new technologies.
The current Guidelines for remuneration to ber. The Group Risk Management function is The majority of the matured portfolio is out-
Group management was adopted by the responsible for driving the ERM strategy exe- sourced through production partners. Ericsson
Annual General Meeting 2020, included on cution and the ERM operations on Group level. has internal production sites in USA, Estonia,
pages 28–31. The Board of Directors proposes The head of each group function, market area China and Brazil and for Ericsson Antenna
that new amended Guidelines for remunera- and business area is accountable for appoint- Systems in Romania and Mexico.
tion to Group management is resolved by the ing one or several enterprise risk manager(s) The Company requires its suppliers to
Annual General Meeting 2023, which are to drive risk management within the unit’s comply with principles set forth in the Code
intended to remain in place for four years until area of responsibility, and for overseeing of Conduct for Business Partners. The Code
the Annual General Meeting 2027. The pro- the ERM in the respective unit. The Chief of Conduct sets forth standards on environ-
posed Guidelines are included on pages 25–27. Legal Officer (CLO) and the Chief Financial mental management, human and labor rights,
Officer (CFO) are accountable for performing occupational health and safety and business
Long-Term Variable Compensation oversight of ERM, and they co-chair the group ethics and anti-corruption as fundamental
Program 2022 (LTV 2022) for the Business Risk Committee. The Business Risk parts of Ericsson’s responsible business.
Executive Team Committee permanently comprises of the CLO, Business Partners are required to have an
Ericsson has share-based Long-Term Variable CFO, and Head of Group Risk management. environmental management system and to
Compensation Programs in place for the Exec- The Committee comprises of an additional be aware of and comply with applicable envi-
utive Team. LTV 2022 for the Executive Team 2–4 members of the Executive Management ronmental legislation, permits and reporting
was approved by the Annual General Meeting of the Company, to be agreed and appointed requirements. Where the requirements in the
2022. Details of LTV 2022 are explained in by the co-chairs and approved by the CEO Ericsson Code of Conduct for Business Partners
note G3, “Share-based compensation.” and the Audit and Compliance Committee are higher than local standards and laws, the
(ACC). In 2022, these members consisted of requirements of the Code should be applied.
the Chief Technology Officer, Chief Security Ericsson works to reduce environmental
Material contracts Officer, Chief Marketing and Communications impacts and emissions in the product portfolio
Material contractual obligations are outlined Officer and Head of Market Area North East and supply chain. Ericsson has set an ambi-
in note D4, “Contractual obligations.” These Asia. The CEO, Chief Compliance Officer (CCO) tion that a certain number of high emitting
are primarily related to leases of office and and Head of Corporate and Government and strategic suppliers should have their own
production facilities, purchase contracts for Investigations are invited to the Committee on 1.5°C aligned climate targets.
outsourced manufacturing, R&D and IT opera- an as-needed basis. The group Business Risk Ericsson’s approach to environmental
tions as well as the purchase of components Committee is a group wide body intended to sustainability is through a circular approach,
for the Company’s own manufacturing. ensure there is proper oversight of risk man- where the Company continuously strives to
The Company is party to certain agree- agement and to provide an appropriate forum minimize the negative impacts of its opera-
ments, which include provisions that may take for, and support to accountable executives in, tions, and to improve the environmental and
effect or be altered or invalidated by a change discussing management of material risks. The energy performance of its products. Minimiz-
in control of the Company as a result of a public Board of Directors and the Audit and Compli- ing waste is key to a circular economy.
takeover offer. Such provisions are not unusual ance Committee are responsible for reviewing
for certain types of agreements, such as financ- the effectiveness and appropriateness of ERM.
ing agreements and certain license agree- For information on risks that could impact Sustainability and Corporate
ments. However, considering among other the fulfilment of objectives, and form the basis Responsibility
things the Company’s strong financial position, for mitigating activities, see the other sections Sustainability and corporate responsibility are
the Company believes that none of the agree- of the Board of Director’s report, notes A2 integral parts of Ericsson’s strategy and cul-
ments currently in effect would in and of itself “Critical accounting estimates and judgments,” ture and are embedded across its operations
entail any material c onsequence for Ericsson F1 “Financial risk management,” F4 “Interest- to drive business transformation and create
due to a change in control of the Company. bearing liabilities” and the chapter Risk factors. value for the Company’s stakeholders.
Ericsson is committed to creating positive
impacts for and reducing risks to the Company
Risk management Sourcing and supply and its stakeholders through its operations,
Ericsson’s Enterprise Risk Management (ERM) Ericsson’s hardware largely consists of the expertise of its employees and its technol-
framework is an integrated part of the EGMS. electronics. For manufacturing, the Company ogy and solutions.
The aim of the ERM framework is to strengthen purchases customized and standardized In accordance with the Swedish Annual
the Group’s governance by integrating risk Accounts Act, Ericsson has prepared a sepa-
rate sustainability report titled “Sustainability DPA. As part of the DPA with the DOJ and On March 2, 2023, the Company reached
and Corporate Responsibility Report 2022”, consent judgment with the U.S. Securities a resolution (DOJ Plea Agreement) with the
which is appended to the Annual Report. and Exchange Commission (SEC), Ericsson DOJ regarding non-criminal breaches under
agreed to engage an independent compliance the DPA. Under the DOJ Plea Agreement,
monitor for three years while the Company Ericsson will plead guilty to previously deferred
Security and privacy continues to undertake significant reforms charges relating to conduct prior to 2017. In
Security and privacy are important areas for to strengthen its Ethics and Compliance addition, Ericsson has agreed to pay a fine of
Ericsson. Enterprise security and privacy is Program. The monitor’s primary responsi- USD 206,728,848. The entry of the DOJ Plea
governed through the Chief Security Officer bilities include reviewing and evaluating the Agreement will bring the DPA to an end. On
Security Board and Ericsson’s Group Enterprise Company’s progress in implementing and January 12, 2023, the Company announced
Security and Privacy Board, while the Product operating its enhanced compliance program a provision in the fourth quarter of 2022 of
and Technology Security Board governs and accompanying controls pursuant to the SEK 2.3 billion (approx. USD 220 m illion)
product security. The Audit and Compliance terms of the DPA, as well as providing recom- related to the DOJ Plea Agreement, which also
Committee and the Technology and Science mendations for improvements. included estimated expenses (SEK 0.1 billion)
Committee of the Board of Directors receive In October 2021, the DOJ notified Ericsson for the previously announced extended compli-
regular updates on security and privacy. of its determination that the Company ance monitorship.
Policies, directives and frameworks estab- breached its obligations under the DPA by fail- The Company’s internal investigation and
lish the security requirements across Ericsson. ing to provide required information to the DOJ. its cooperation with authorities in relation to
The security and privacy frameworks cover In February 2022, the Company publicly the matters discussed in the 2019 internal Iraq
product security, information security, privacy, disclosed that an internal investigation in investigation report remain open and ongoing
IT-security, risk management, sourcing and 2019 included a review of the conduct of and are not covered by the DOJ Plea Agree-
third parties, incident management, insider Ericsson employees, vendors and suppliers in ment. With respect to the matters discussed in
threat prevention, business continuity, physi- Iraq during the period 2011–2019. The inves- the 2019 internal Iraq investigation report, the
cal security, security in high-risk areas, and tigation found serious breaches of compliance Company continues to thoroughly investigate
travel and event security to secure all areas rules and the Company’s Code of Business the matters in full cooperation with the DOJ
of Ericsson’s business processes and ensure Ethics and identified evidence of corruption- and the SEC. As previously disclosed, the
the delivery of resilient products. Frameworks related misconduct and other serious viola- Company’s 2019 internal Iraq investigation
are based on with applicable regulations, tions, including payments to intermediaries did not conclude that Ericsson made or was
international standards and best practices. and the potential use of alternate transport responsible for any payments to any terrorist
For example, Ericsson’s Information Security routes in connection with circumventing Iraqi organization and significant further investiga-
Management System is certified to ISO/IEC Customs, at a time when terrorist organization over the course of 2022 has not altered
27001 and the Ericsson Security Reliability tions, including ISIS, controlled some trans- this conclusion.
Model detailing the security requirements port routes. The investigation also identified
for Ericsson’s products is aligned with GSMA payment schemes and cash transactions that
NESAS and NIST Cyber Security Framework. potentially created the risk of money launder- Legal proceedings
Ericsson endeavours to continuously ing. The investigators could not determine the On December 9, 2022, Ericsson and Apple
assessing and adjusting its capabilities, ultimate recipients of any payments, nor iden- reached a multi-year, global patent license
controls and processes and developing its tify that any Ericsson employee was directly agreement between the two companies. The
portfolio in order to secure the Company’s and involved in financing terrorist organizations. agreement includes a cross-license relating to
its customers’ assets in relation to evolving In March 2022, the DOJ informed Ericsson patented cellular standard-essential technolo-
threats, risks and legal requirements. it had determined that, before entering into gies and grants certain other patent rights.
For further information on Security and the DPA, the Company provided insufficient Furthermore, Ericsson and Apple have mutu-
Privacy and risks relating thereto see the information to the DOJ about the Company’s ally agreed to strengthen their technology and
chapter Risk factors in the Financial Report. 2019 internal investigation into conduct in business collaboration, including in technol-
Iraq. The DOJ also determined that the Com- ogy, interoperability and standards develop-
pany breached the DPA by failing to inform the ment. This settlement ends the lawsuits
Ericsson interactions with US authorities DOJ about the investigation after entering into filed by both companies in several countries,
and other governmental authorities the DPA. including in the United States District Court
In December 2019, Ericsson entered into a In June 2022, the SEC informed Ericsson of the Eastern District of Texas, as well as
resolution with the United States Department that it opened an investigation concerning the complaints filed before the United States
of Justice (DOJ) resolving the DOJ’s inves- matters described in the Company’s 2019 Iraq International Trade Commission (USITC).
tigations into Ericsson’s business dealings investigation report. Under Ericsson’s consent On March 3, 2022, Telefonaktiebolaget
in Djibouti, China, Vietnam, Indonesia and judgment with the SEC, Ericsson are perma- LM Ericsson and certain officers of Ericsson
Kuwait. The resolution included a deferred nently enjoined from violating the FCPA’s were named as defendants in a putative class
prosecution agreement (DPA), and a guilty antibribery, books and records and internal action filed on behalf of purchasers of Ericsson
plea by Ericsson’s Egyptian subsidiary to a controls provisions. Violations of the injunction ADS in the United States, in the United States
criminal violation of the US Foreign Corrupt or consent judgment could subject the Com- District Court for the Eastern District of New
Practices Act’s (FCPA) antibribery provisions. pany to new civil and criminal penalties as well York. An amended complaint was filed on
Under the DPA, the Company admitted to the as new enforcement actions. September 9, 2022, which added a former
conduct described in the DPA’s statement of In December 2022, the Company agreed Ericsson officer as defendant. The amended
facts, and the DOJ agreed to defer prosecu- with the DOJ and SEC to extend the term complaint alleges violations of United States
tion of Ericsson for the DPA’s three-year term of the Company’s independent compliance securities laws, in connection with allegedly
if Ericsson did not violate the terms of the monitor for one year, until June 2024. false and misleading statements principally
concerning the Company’s adherence with its Parent Company quotient value of these shares is SEK 5.00,
compliance and anti-corruption policies and Telefonaktiebolaget LM Ericsson´s (the Parent totaling SEK 20 million, representing 0.1% of
obligations and the conduct of its business Company) business consists mainly of corpo- capital stock, and the purchase price amounts
in Iraq. In December 2022, Ericsson and the rate management, holding company functions, to SEK 29.1 million.
Individual Defendants filed a motion to dismiss internal banking activities and customer credit
the complaint. In February 2023, the plaintiff management. As of December 31, 2022 the
opposed the motion. Parent Company had 3 (3) branch offices. In Proposed disposition of earnings
In August 2022, a civil lawsuit was filed in total, the Group has 79 (74) branch and repre- The Board of Directors proposes a dividend of
the United States District Court for the District sentative offices. SEK 2.70 (2.50) per share, and that the Parent
of Columbia against Telefonaktiebolaget Company shall retain the remaining part of
LM Ericsson and Ericsson Inc. The lawsuit was Financial information non-restricted equity. The dividend is proposed
brought by US military service members and Income after financial items was SEK 18.4 to be paid in two equal installments, SEK 1.35
employees of US government contractors who (9.3) billion. The Parent Company had no sales per share with the record date March 31, 2023
were killed or injured in terrorist attacks in Iraq, in 2022 or 2021 to subsidiaries, while 29% (payment date April 5, 2023), and SEK 1.35 per
Afghanistan and Syria from 2005 to 2021, as (34%) of total purchases of goods and services share with the record date September 29, 2023
well as by their family members. The lawsuit were from subsidiaries. (payment date October 4, 2023).
asserts claims against Ericsson under the US Major changes in the Parent Company’s For holders of the Parent Company’s treas-
Anti-Terrorism Act alleging that Ericsson made financial position for the year included: ury shares of Class B, no dividend will be dis-
payments that ultimately aided the terrorist – Current and non-current liabilities to tributed. All such treasury shares of Class B are
organizations that committed, planned or subsidiaries increased by SEK 13.7 billion held by the Parent Company. Assuming that no
authorized the attacks. In November 2022, to SEK 94.4 billion. treasury shares remain on the record date, the
Ericsson filed a motion to dismiss the complaint. – Current and non-current receivables from Board of Directors proposes that earnings be
On December 20, 2022, plaintiffs filed an subsidiaries decreased by SEK 0.9 billion distributed as follows:
amended complaint, which added additional to SEK 24.2 billion.
plaintiffs, including a plaintiff injured in Turkey, – Shareholder contributions to subsidiaries Amount to be paid to
the shareholders SEK 9,002,209,685
named Ericsson AB, CEO Börje Ekholm and a of SEK 55.8 billion. Amount to be retained by
former employee as additional defendants and – Impairment of investments in subsidiaries the Parent Company SEK 28,750,998,521
also asserted additional allegations and claims. and associates of SEK 2.2 billion. Total non-restricted equity
As part of its defense to a now settled pat- – Gross cash decreased by SEK 39.1 billion of the Parent Company SEK 37,753,208,206
ent infringement lawsuit filed by Ericsson in to SEK 41.4 billion.
2013 in the Delhi High Court against Indian As a basis for its dividend proposal, the
handset company Micromax, Micromax At the end of the year, gross cash: cash and Board of Directors has made an assessment
filed a complaint against Ericsson with the cash equivalents plus interest-bearing securi- in accordance with Chapter 18, Section 4 of
Competition Commission of India (CCI). The ties (current and non-current), amounted to the Swedish Companies Act of the Parent
CCI decided to refer the case to the Director SEK 41.4 (80.5) billion. Company’s and the Group’s need for financial
General’s Office for an in-depth investigation. At the end of the year, non-restricted equity resources as well as the Parent Company’s and
The CCI opened similar investigations against amounted to SEK 37.8 (35.0) billion, and total the Group’s liquidity, financial position in other
Ericsson in January 2014 based on claims equity amounted to SEK 85.9 (83.1) billion. respects and long-term ability to meet their
made by Intex Technologies (India) Limited commitments. The Group reports an equity
and, in 2015, based on a now settled claim ratio of 38.1% (35.0%) and a net cash amount
from iBall. Ericsson has challenged CCI’s Share information of SEK 23.3 (65.8) billion.
jurisdiction in these cases before the Delhi High As of December 31, 2022, the total number The Parent Company’s equity would have
Court and is awaiting a decision on the appeal of shares issued was 3,334,151,735, of been SEK 4.4 billion lower if assets and liabili-
of the first instance court’s decision. which 261,755,983 were Class A shares, ties had not been valued at fair value pursuant
In April 2019, Ericsson was informed each carrying one vote, and 3,072,395,752 to Chapter 4, Section 14a of the Swedish
by China’s State Administration for Market were Class B shares, each carrying one tenth Annual Accounts Act.
Regulation (SAMR) Anti-monopoly bureau of one vote. Both classes of shares have the The Board of Directors has also considered
that SAMR has initiated an investigation into same rights of participation in the net assets the Parent Company’s results and financial
Ericsson’s patent licensing practices in China. and earnings. The largest shareholders of the position and the Group’s position in general. In
Ericsson is cooperating with the investiga- Parent Company at year-end were Investor this respect, the Board of Directors has taken
tion, which is still in a fact-finding phase. The AB with approximately 23.79% of the votes into account known commitments that may
next steps include continued fact finding and (8.00% of the shares), AB Industrivärden with have an impact on the financial positions of
meetings with SAMR in order to facilitate the approximately 15.14% of the votes (2.61% of the Parent Company and its subsidiaries.
authority’s assessments and conclusions. the shares) and AMF Tjänstepension and AMF The proposed dividend does not limit the
In addition to the proceedings discussed Fonder with approximately 4.87% of the votes Group’s ability to make investments or raise
above, the Company is, and in the future may (2.74% of the shares). funds, and it is the Board of Directors’ assess-
be, involved in various other regulatory inves- In accordance with the conditions of the ment that the proposed dividend is well bal-
tigations, lawsuits, claims and proceedings Long-Term Variable Compensation Program anced considering the nature, scope and risks
incidental to the ordinary course of business. (LTV) for Ericsson employees, no treasury of the business activities, as well as the capital
For information on risks e.g. relating to law- shares were distributed to employees or sold requirements for the Parent Company and the
suits, claims and proceedings, see the chapter in 2022. Group, in addition to coming years’ business
Risk factors. The holding of treasury stock at December plans and economic development.
31, 2022 was 4,009,306 Class B shares. The
Proposal of new guidelines for – attract and retain highly competent, perform- CEO. Further, the Committee shall prepare for
Remuneration to Group Management ing, and motivated people that have the ability, resolution by the Board proposals to the AGM on
The Board of Directors proposes that the AGM experience, and skill to deliver on the Ericsson Guidelines for Remuneration to Group Manage-
2023 resolves on the following guidelines for strategy; ment at least every fourth year and on Long-term
remuneration to group management. In compari- – encourage behavior consistent with Ericsson’s Variable compensation programs and similar
son with the guidelines decided by the AGM 2020, culture and core values; equity arrangements.
the guidelines have been updated in order to: – ensure fairness in reward by delivering total The Committee has the mandate to resolve
– adapt the guidelines to ensure the Company’s remuneration that is appropriate but not salary and other remuneration for the other
business strategies and ways of working excessive, and clearly explained; members of Group Management except for the
can be supported through the lifecycle of the – have a total compensation mix of fixed pay, President and CEO, including targets for short-
guidelines; variable pay and benefits that is competitive term variable compensation (“STV”), and payout
– clarify the mandate for the Board of D irectors where Ericsson competes for talent; and of STV based on achievements and performance.
and Remuneration Committee to define – encourage variable remuneration which aligns To conduct its responsibilities, the Committee
meaningful short-term variable compen employees with clear and relevant targets, considers trends in remuneration, legislative
sation (“STV”) targets linked to the business reinforces their performance and enables changes, disclosure rules and the general global
plan. This enables STV targets to be defined flexible remuneration costs for Ericsson. executive remuneration environment. Before
and weighed differently for different parts of preparing salary adjustment recommendations
the business given the phase in the business The Guidelines and the Company’s strategy for the President and CEO for resolution by the
lifecycle they are in as required by the business and sustainable long-term interest Board and approving any salary adjustments for
strategy. Therefore, detailed requirements for A successful implementation of the Company’s the other members of Group Management the
mandatory weighting and definition of STV strategy and sustainable long-term interests Committee reviews salary survey data, Company
targets has been removed; requires that the Company can attract, retain, and results and individual performance. No employee
– enable for the Board of Directors to potentially motivate the right talent and can offer competi- is present at the Committee’s meetings when
include STV in the remuneration package of tive remuneration. These Guidelines aim to allow issues relating to their own remuneration are
the President and CEO. Any inclusion of STV the Company to offer the members of the Group being discussed. Similarly, the President and
for the future or current President and CEO Management attractive and competitive total CEO is not present at Board meetings when
will take into account the aggregated target remuneration. Variable compensation covered by issues relating to the President and CEO’s
opportunity of long-term variable compensa- these guidelines shall be awarded against specific own remuneration are being discussed. The
tion programs and STV; and pre-defined and measurable business targets Committee may appoint independent expert
– broaden the pension guidelines for Swed- derived from the short and long-term business plan advisors to assist and advise in its work.
ish members of the group management by approved by the Board of Directors. Targets will The Chair of the Remuneration Committee
removal of specific wordings related to the include financial targets at Group, Business Area along with the Chair of the Board work together
Swedish collective pension plan ITP1, to and/or Market Area level. In addition, strategic tar- with Ericsson’s Investor Relations team, striving
accommodate for potential future changes gets, operational targets, employee engagement to ensure that healthy contact is maintained as
in collective pension plans and to allow for targets, customer satisfaction targets, sustain- necessary and appropriate with shareholders
supplementary pension contributions or sup- ability and corporate responsibility targets or other regarding remuneration to Group Management.
plementary cash pension allowance, in excess lead indicator targets will be applied as deemed
of any caps of pension contributions allowed appropriate by the Remuneration Committee. Overview of remuneration package covered
under collective pension plans. The Company operates long-term variable by these Guidelines
compensation programs for the Group Manage- For Group Management the remuneration pack-
Introduction ment as approved by the Annual General Meeting age may consist of fixed salary, short-term and
These Guidelines for Remuneration to Group Man- (“AGM”). Such decisions are not covered by these long-term variable compensation (STV and LTV),
agement (the “Guidelines”) apply to the Executive Guidelines. Details of Ericsson’s current remunera- pension and other benefits.
Team of Telefonaktiebolaget LM Ericsson (the tion policy and how we deliver on our policy and Below are the key components of remuneration
“Company” or “Ericsson”), including the President guidelines and information on previously decided of Group Management covered by these Guidelines,
and Chief Executive Officer (the “President and long-term variable compensation programs that including why they are used, their operation, oppor-
CEO”) (“Group Management”). These Guidelines have not yet become due for payment, including tunity levels and related performance measures.
apply to remuneration agreed and changes to applicable performance criteria, can be found In addition, the AGM has resolved and may in the
previously agreed remuneration after the date in the Remuneration Report and in Note G2, future decide to implement LTV for Group Manage-
of approval of the Guidelines and are intended “Information regarding members of the Board of ment. The ongoing share-based LTV programs
to remain in place for four years until the Annual Directors, the Group management” and Note G3, resolved by the AGM have been designed to provide
General Meeting of shareholders 2027. For “Share-based compensation” in the annual report. long-term incentives for the members of Group
employments outside of Sweden, due adaptations Management and to incentivize the Company’s
may be made to comply with mandatory local rules Governance of remuneration to performance creating long-term value. The aim is to
or established local practices. In such cases, the Group Management attract, retain and motivate executives in a com-
overall purpose of these Guidelines shall be accom- The Board has established a Remuneration petitive market through performance-based share
modated to the largest extent possible. These Committee (the “Committee”) to handle com- related incentives and to encourage the build-up
Guidelines do not cover remuneration resolved by pensation policies and principles and matters of significant equity holdings to align the interests
the general meeting of shareholders, such as long- concerning remuneration to Group Management. of the members of Group Management with
term variable compensation programs (“LTV”). The Board has authorized the Committee to those of shareholders. The vesting period under
determine and handle certain issues in specific the ongoing share-based LTV programs resolved
Objective areas. The Board may also on occasion provide by the shareholders is three years and vesting is
These Guidelines aim to ensure alignment with extended authorization for the Committee to subject to the satisfaction of identified performance
the current remuneration philosophy and practices determine specific matters. criteria. Although LTV is an important component
applicable for the Company’s employees based on The Committee is authorized to review and of the remuneration of Group Management, it is
the principles of competitiveness, fairness, trans- prepare for resolution by the Board salary not covered by these Guidelines, because these
parency, and performance. In particular to: and other remuneration for the President and programs are resolved separately by the AGM.
Element and purpose Description
Fixed salary Salaries shall be set taking into account:

Fixed compensation paid at set times. –E ricsson’s overall business performance
Purpose: –b usiness performance of the Unit that the individual leads
– attract and retain the executive talent required to – year-on-year performance of the individual
implement Ericsson’s strategy –e xternal economic environment
– deliver part of the annual compensation in a – s ize and complexity of the position
predictable format –e xternal market data
–p ay and conditions for other employees based in locations considered to be relevant to the role.
When setting fixed salaries, the impact on total remuneration, including pensions and associated costs, shall be taken
into consideration.
Short-term variable compensation (STV) The STV shall be paid in cash every year after the Committee and, as applicable, the Board have reviewed and
STV is a variable compensation plan that shall be approved performance against targets which are normally determined at the start of each year for each member of
measured against targets derived from the business Group Management.
plan and paid over a single year. Target pay-out opportunity for any financial year may be up to 150% of annual fixed salary of the individual. This shall
Purpose: normally be determined in line with the external market practices of the country of employment. Maximum pay-out
– align members of Group Management with clear shall be up to two times the target pay-out opportunity (i.e., no more than 300% of annual fixed salary). Any existing
and relevant targets to Ericsson’s strategy and long-term variable pay-opportunity should be taken into account when determining target opportunity for STV (and
sustainable long-term interests, vice versa).
– provide individuals an earning opportunity for The STV shall be based on measures linked to the annual business plan and to Ericsson’s long-term strategy and
performance at flexible cost to the Company. sustainability. Measures will include financial targets at Group, Business Area and/or Market Area level (for relevant
members of Group Management). Other potential measures may include strategic targets, operational targets,
employee engagement targets, customer satisfaction targets, sustainability and corporate responsibility targets or
other lead indicator targets.
At the end of the performance period for each STV cycle, the Board and the Committee shall assess performance versus
the measures and determine the formula-based outcome using the financial information made public by the Company
for the financial targets when applicable.
The Board and the Committee reserve the right to:
– r evise any or all of the STV targets at any time,
–a djust the STV targets retroactively under extraordinary circumstances,
– r educe or cancel STV if Ericsson faces severe economic difficulties, for instance in circumstances as serious as no
dividend being paid,
–a djust STV in the event that the results of the STV targets are not a true reflection of business performance,
– r educe or cancel STV for individuals either whose performance evaluation or whose documented performance
feedback is below an acceptable level or who are on performance counselling.
The Board and the Committee shall have the right in their discretion to:
–d eny, in whole or in part, the entitlement of an individual to the STV payout in case an individual has acted in breach
of Ericsson’s Code of Business Ethics,
– c laim repayment in whole or in part the STV paid in case an individual has acted in breach of Ericsson’s Code of
Business Ethics,
– r eclaim STV paid to an individual on incorrect grounds such as restatement of financial results due to incorrect
financial reporting, non-compliance with a financial reporting requirement etc.
Pension The operation of the pension plan shall follow competitive practice in the individual’s home country and may contain
Contributions paid towards retirement fund. various supplementary plans in addition to any national system for social security.
Purpose: Pension plans should be defined contribution plans unless the individual concerned is subject to defined benefit
– attract and retain the executive talent required to pension plan under mandatory collective bargaining agreement provisions or mandatory local regulations.
implement Ericsson’s strategy, For Group Management members in Sweden:
– facilitate planning for retirement by way of –p ension benefits shall be granted based on a defined contribution plan except where law or collective bargaining
providing competitive retirement arrangements agreement require a defined benefit pension. The pensionable salary shall include fixed salary and, where required
in line with local market practices. by law or collective bargaining agreement, any variable salary.
–a supplementary pension contribution can be paid amounting to a maximum of 35% of the fixed annual salary that
exceeds any cap in collective pension plans, unless a higher percentage is obliged by law or collective bargaining
agreement.
– t he supplementary pension contribution can, as an alternative to a pension contribution, be exchanged for a cash
payment provided that it is done in a way that is cost-neutral for the Company.
Members of Group Management employed outside of Sweden may participate in the local market competitive pension
arrangements that apply in their home countries in line with what is offered to other employees in the same country.
In some special circumstances where individuals cannot participate in the local pension plans of their home countries
of employment:
– c ash equivalent to pension may be provided as a taxable benefit, or
– c ontributions may be made to an international pension fund on behalf of the individual on a costneutral basis
In all cases the annual pension contributions shall be capped at 70% of annual fixed salary.
Other benefits Benefits offered shall consider the competitive practices in the individual’s country of employment and should be in line
Additional tangible or intangible compensation with what is offered to other senior employees in the same country and may evolve year on year.
paid annually which do not fall under fixed salary, Benefits may for example include Company phones, Company cars, wellbeing assistance, medical and other insurance
short-term and long-term variable compensation, benefits, tax support, travel, Company gifts and any international relocation and/or commuting benefits if the indi-
or pension. vidual is required to relocate and/or commute internationally to execute the requirements of the role.
Purpose: Benefit opportunities shall be set in line with competitive market practices and shall reflect what is offered to other
– attract and retain the executive talent required to senior employees in the individual’s country of employment.
implement Ericsson’s strategy, The levels of benefits provided may vary year on year depending on the cost of the provision of benefits to the Company.
– deliver part of the annual compensation in a Other benefits shall be capped at 10% of annual fixed salary for members of Group Management located in Sweden.
predictable format. Additional benefits and allowances for members of Group Management who are commuters into Sweden or who are
on long-term assignment (“LTA”) in countries other than their home countries of employment, shall be determined in
line with the Company’s international mobility policy which may include (but is not limited to) commuting or relocation
costs; cost of living adjustment, housing, home travel or education allowance; tax and social security equalization
assistance.
Consideration of remuneration offered the employee receives, or has become entitled component and can be renewed, but each such
to the Company’s employees to, from any other employer or from his/her own arrangement shall be limited in time and shall
When developing these Guidelines, the Board or other activities during the period that sever- not exceed a period of 36 months and twice the
and the Committee have considered the total ance is paid to the employee by the Company. annual fixed salary that the individual would
remuneration and employment conditions of The Company shall have the right to ter- have received if no additional arrangements
the Company’s employees by reviewing the minate the employment contract and dismiss were made. In addition, if appropriate, different
application of Ericsson’s remuneration policy the employee with immediate effect, without measures and targets may be applied to the
for the wider employee population to ensure giving any advance notice and entitlement new appointment’s incentives in the first year.
consistency. to severance pay, if the employee commits a In addition, it may on a case-by-case basis
There is clear alignment in the remunera- serious breach of his/her obligations towards be decided by the Board and the Committee
tion components for the members of Group the Company. respectively to compensate an individual
Management and the Company’s employees Normally disputes regarding employment for remuneration forfeited from a previous
in the way that remuneration policy is applied agreements or any other agreements concern- employer during recruitment. The Board and
as well as the methods followed in determining the employment of the members of Group the Committee will consider on a case-by-case
ing fixed salaries, short-term and long-term Management, the way such agreements have basis if all or some of the remuneration includ-
variable compensation, pension, and benefits, been arrived at, interpreted, or applied, as well ing incentives forfeited need to be ‘bought-out’.
which are to be applied broadly and consistently as any other litigation proceedings from legal If there is a buy-out of forfeited incentives, this
throughout the Company. The targets under relations based on such agreements, shall be will take into account relevant factors including
short-term variable compensation are similar settled by arbitration by three arbitrators in the form they were granted (cash vs. shares),
and the performance measures under long- accordance with the Rules of the Arbitration performance conditions attached to these
term variable compensation program are the Institute of the Stockholm Chamber of Com- awards and the time they would have vested/
same for the members of Group Management merce. Irrespective of the outcome of any arbi- paid. Generally, buy-out awards will be made on
and other eligible employees of the Company. tral award, the Company may, in the relation a comparable basis to those forfeited.
However, the proportion of pay that is linked to between the parties, carry all fees and expenses In the event of an internal candidate being
performance is typically higher for Group Man- charged by the arbitrators and all of its own promoted to Group Management, legacy terms
agement in line with market practice and the litigation costs (including attorney’s fees), and conditions may be honored, including pen-
higher levels of total compensation applicable except in the event the arbitration proceedings sion and benefit entitlements and any outstand-
at that level. were initiated by the employee without reason- ing incentive awards. If a Group Management
able cause. member is appointed following a merger or
Employment contracts and termination acquisition with/of another company, legacy
of employment Recruitment policy for new members terms and conditions may also be honored for a
The members of Group Management are of Group Management maximum period of 36 months.
employed on permanent rolling contracts. In determining the remuneration of a new
The maximum mutual notice period is no member of Group Management, the Board and Board of Directors’ discretions
more than 12 months. In case of termination the Committee shall take into consideration all The Board upon recommendation from the
by the employee, the employee has no right relevant factors to ensure that arrangements Committee may in a specific case decide to
to severance pay. are in the best interests of the Company and its temporarily deviate from these Guidelines in
In any case, the fixed salary paid during the shareholders. These factors include: whole or in part based on its full discretion in
notice period plus any severance pay payable – the role being taken on, unusual circumstances such as:
will not together exceed an amount equivalent – the skills, experience and caliber of the – upon change of the President and CEO,
to the individual’s 24 months fixed salary unless candidate, – upon material changes in the Company struc-
otherwise determined by local legislation or – the level and type of remuneration opportu- ture, organization, ownership, and business
collective bargaining agreements. nity received at a previous employer, (for example takeover, acquisition, merger,
The employee may be entitled to severance – the geography in which the candidate is demerger etc.) which may require adjust-
pay up until the agreed retirement age or, if a being recruited from and whether any reloca- ments in STV and LTV or other elements to
retirement age has not been agreed, until the tion allowance is required, ensure continuity of Group Management, and
month when the employee turns 65. In a case – the circumstances of the candidate, – in any other circumstances, provided that the
where the employee is entitled to severance – the current external market and salary deviation is required to serve the long-term
pay from a date later than 12 months prior to practice, interests and sustainability of the Company
retirement, the severance pay shall be reduced – internal relativities. or to assure its financial viability.
in proportion to the time remaining and calcu-
lated only for the time as of the date when the Additional arrangements The Committee is responsible for preparing
employee’s employment ceases (i.e., the end By way of exception, additional arrangements matters for resolution by the Board, and this
of the period of notice) and until the time of can be made when deemed appropriate and includes matters relating to deviations from
retirement. necessary to recruit or retain an individual. Such these Guidelines. Any such deviation will be
Severance pay shall be reduced by 50% of arrangement could be in the form of short-term disclosed in the Remuneration Report for the
the remuneration or equivalent compensation or long-term variable compensation or fixed relevant year.
Guidelines for Remuneration them competitive remuneration. These Guide- general global executive remuneration environ-
to Group Management approved lines aim to allow the Company to offer the ment. It reviews salary survey data, Company
by the Annual General Meeting of members of the Group Management attractive results and individual performance before
shareholders 2020 and competitive total remuneration. Variable preparing salary adjustment recommendations
compensation covered by these guidelines shall for the President and CEO for resolution by
Guidelines for Remuneration be awarded against specific pre-defined and the Board and before approving any salary
to Group Management measurable business targets derived from the adjustments for the other members of Group
long-term business plan approved by the Board Management. In order to avoid conflict of
Introduction of Directors. Targets may include financial interests, no employee is present at the Commit-
These Guidelines for Remuneration to Group targets at either Group, Business Area or Market tee’s meetings when issues relating to their own
Management (the “Guidelines”) apply to Area level, strategic targets, operational targets, remuneration are being discussed. The President
the Executive Team of Telefonaktiebolaget employee engagement targets, customer sat- and CEO is not present at Board meetings when
LM Ericsson (the “Company” or “Ericsson”), isfaction targets, sustainability and corporate issues relating to the President and CEO’s own
including the President and Chief Executive responsibility targets or other lead indicator remuneration are being discussed. The Commit-
Officer (the “President and CEO”) (“Group targets. tee may appoint independent expert advisors to
Management”). These Guidelines apply to The Company operates long-term variable assist and advise in its work.
remuneration agreed and changes to previously compensation programs for the Group Man The Chair of the Remuneration Committee
agreed remuneration after the date of approval agement. These have been approved by the along with the Chair of the Board work together
of the Guidelines and are intended to remain Annual General Meeting (“AGM”) and as a with Ericsson’s Investor Relations team, striving
in place for four years until the Annual General result are not covered by these Guidelines. to ensure that healthy contact is maintained as
Meeting of shareholders 2024. For employ- Details of Ericsson’s current remuneration policy necessary and appropriate with shareholders
ments outside of Sweden, due adaptations may and how we deliver on our policy and guidelines regarding remuneration to Group Management.
be made to comply with mandatory local rules and information on previously decided long-
or established local practices. In such cases, term variable compensation programs that Overview of remuneration package covered
the overall purpose of these Guidelines shall be have not yet become due for payment, including by these Guidelines
accommodated to the largest extent possible. applicable performance criteria, can be found For Group Management the remuneration
These Guidelines do not cover remuneration in the Remuneration Report and in note G2, package may consist of fixed salary, short-term
resolved by the general meeting of sharehold- “Information regarding members of the Board and long-term variable compensation (STV and
ers, such as long-term variable compensation of Directors, the Group management” and note LTV), pension and other benefits.
programs (“LTV”). G3, “Share-based compensation” in the annual The table below sets out the key components
report 2019.1) of remuneration of Group Management covered
Objective by these Guidelines, including why they are
These Guidelines aim to ensure alignment with Governance of remuneration used, their operation, opportunity levels and the
the current remuneration philosophy and prac- to Group Management related performance measures. In addition, the
tices applicable for the Company’s employees The Board has established a Remuneration AGM has resolved and may in the future decide
based on the principles of competitiveness, Committee (the “Committee”) to handle com- to implement LTV for Group Management. The
fairness, transparency and performance. In pensation policies and principles and matters ongoing share-based LTV programs resolved
particular to: concerning remuneration to Group Manage- by the AGM have been designed to provide
– attract and retain highly competent, per- ment. The Board has authorized the Committee long-term incentives for the members of Group
forming and motivated people that have to determine and handle certain issues in Management and to incentivize the Company’s
the ability, experience and skill to deliver specific areas. The Board may also on occasion performance creating long-term value. The aim
on the Ericsson strategy, provide extended authorization for the Commit- is to attract, retain and motivate executives in
– encourage behavior consistent with tee to determine specific matters. a competitive market through performance-
Ericsson’s culture and core values, The Committee is authorized to review and based share related incentives and to encour-
– ensure fairness in reward by delivering total prepare for resolution by the Board salary and age the build-up of significant equity holdings
remuneration that is appropriate but not other remuneration for the President and CEO. to align the interests of the members of Group
excessive, and clearly explained, Further, the Committee shall prepare for resolu- Management with those of shareholders. The
– have a total compensation mix of fixed pay, tion by the Board proposals to the AGM on vesting period under the ongoing share-based
variable pay and benefits that is competitive Guidelines for Remuneration to Group Manage- LTV programs resolved by the shareholders
where Ericsson competes for talent, and ment at least every fourth year and on LTV and is three years and vesting is subject to the
– encourage variable remuneration which similar equity arrangements. satisfaction of identified performance criteria.
aligns employees with clear and relevant The Committee has the mandate to resolve Although LTV is an important component of
targets, reinforces their performance and salary and other remuneration for the other the remuneration of Group Management, it is
enables flexible remuneration costs. members of Group Management except for not covered by these Guidelines, because these
the President and CEO, including targets for programs are separately resolved by the AGM.
The Guidelines and the Company’s strategy short-term variable compensation (“STV”),
1) Information for 2022 can be found in the Remuneration
and sustainable long-term interest and payout of STV based on achievements report and in note G2, “Information regarding members of
A successful implementation of the Company’s and performance. the Board of Directors and Group management” and note
strategy and sustainable long-term interests In order to conduct its responsibilities, the G3, “Share-based compensation” in the Financial report.
requires that the Company can attract, retain Committee considers trends in remuneration,
and motivate the right talent and can offer legislative changes, disclosure rules and the
Element and purpose Operation Opportunity Performance measures
Fixed salary Salaries shall normally be reviewed There is no maximum salary level; how- This element of the package does not
Fixed compensation paid at set times. annually in January. ever, salary increases (as a % of existing require achievement of any specific
Purpose: Salaries shall be set taking into account: salary) for most Group Management performance targets.
–E ricsson’s overall business members would normally be in line However, individual performance and
– attract and retain the executive talent with the external market practices,
required to implement Ericsson’s performance, capability shall be taken into account
employees in relevant locations and along with business performance when
strategy, –b
usiness performance of the Unit performance of the individual.
that the individual leads, determining fixed salary levels and any
– deliver part of the annual compensa- There are circumstances where higher salary increases.
tion in a predictable format. – year-on-year performance of salary increases could be awarded. For
the individual, example, where:
–e
xternal economic environment, – a new Group Management member
– s ize and complexity of the position, has been appointed at a below-
market salary, in which case larger
–e
xternal market data,
increases may be awarded in follow-
– pay and conditions for other employees ing years, subject to strong individual
based in locations considered to be performance,
relevant to the role.
– the Group Management member
When setting fixed salaries, the impact has been promoted or has had an
on total remuneration, including increase in responsibilities,
pensions and associated costs, shall
– an individual’s salary has fallen
be taken into consideration.
significantly behind market practice.
Short-term variable The STV shall be paid in cash every year Target pay-out opportunity for any The STV shall be based on measures
compensation (STV) after the Committee and, as applicable, financial year may be up to 150% of linked to the annual business plan
STV is a variable compensation plan the Board have reviewed and approved annual fixed salary of the individual. which in itself is linked to Ericsson’s
that shall be measured and paid over performance against targets which This shall normally be determined in long-term strategy and sustainability.
a single year. are normally determined at the start of line with the external market practices Measures shall include financial targets
Purpose: each year for each member of Group of the country of employment. at Group, Business Area or Market
Management. Maximum pay-out shall be up to two Area level (for relevant members of
– align members of Group
Management with clear and relevant The Board and the Committee reserve times the target pay-out opportunity Group Management). Other potential
targets to Ericsson’s strategy and the right to: (i.e. 300% of annual fixed salary).1) 2) measures may include strategic targets,
sustainable long-term interests, – r evise any or all of the STV targets at operational targets, employee engage-
any time, ment targets, customer satisfaction
– provide individuals an earning oppor- targets, sustainability and corporate
tunity for performance at flexible cost –a
djust the STV targets retroactively responsibility targets or other lead
to the Company. under extraordinary circumstances, indicator targets.
– r educe or cancel STV if Ericsson A maximum of four STV targets shall
faces severe economic difficulties, for be assigned to an individual in total for
instance in circumstances as serious a financial year. Financial targets shall
as no dividend being paid, comprise at least 75% of the target
–a
djust STV in the event that the bonus opportunity with a minimum of
results of the STV targets are 40% being defined at Group level. The
not a true reflection of business minimum weighting for an STV target
performance, shall be 20%.
– r educe or cancel STV for individuals Performance of all STV targets shall
either whose performance evaluation be tested over a one-year performance
or whose documented performance period (financial year).
feedback is below an acceptable The STV measures and targets shall be
level or who are on performance determined by the Committee for the
counselling. members of Group Management other
than the President and CEO.
Malus and clawback
The Board and the Committee shall The Board has the mandate to define
have the right in their discretion to: STV measures and targets for the
President and CEO, should STV be
–d
eny, in whole or in part, the entitle- introduced for the President and CEO.
ment of an individual to the STV
payout in case an individual has
acted in breach of Ericsson’s Code
of Business Ethics.
– c laim repayment in whole or in part
the STV paid in case an individual has
acted in breach of Ericsson’s Code of
Business Ethics.
– r eclaim STV paid to an individual on
incorrect grounds such as restate-
ment of financial results due to
incorrect financial reporting, non-
compliance with a financial reporting
requirement etc.
Element and purpose Operation Opportunity Performance measures
Pension The operation of the pension plan Since 2011, members of Group None
Contributions paid towards retirement shall follow competitive practice in the Management in Sweden participate
fund. individual’s home country and may in the defined contribution plan (ITP1)
Purpose: contain various supplementary plans which applies for the wider workforce in
in addition to any national system for Sweden. The pension contribution for
– attract and retain the executive talent social security. ITP1 is capped at 30% of pensionable
required to implement Ericsson’s salary which includes fixed salary and
strategy, Pension plans should be defined con
tribution plans unless the individual STV paid in cash.
– facilitate planning for retirement by concerned is subject to defined benefit According to the local collective
way of providing competitive retire- pension plan under mandatory collective bargaining agreement in Sweden, the
ment arrangements in line with local agreement provisions or mandatory members of Group Management are
market practices. local regulations. also entitled to an additional pension
In some special circumstances where contribution for part-time retirement
individuals cannot participate in the for which the cap is determined during
local pension plans of their home the union negotiations for all the local
countries of employment: employees.
– c ash equivalent to pension may be Members of Group Management
provided as a taxable benefit, or employed outside of Sweden may
participate in the local market competi-
– c ontributions may be made to an tive pension arrangements that apply
international pension fund on behalf in their home countries in line with what
of the individual on a cost-neutral is offered to other employees in the
basis. same country.
In all cases the annual pension
contributions shall be capped at 70% of
annual fixed salary.3)
Other benefits Benefits offered shall take into account Benefit opportunities shall be set in None
Additional tangible or intangible the competitive practices in the line with competitive market practices
compensation paid annually which do individual’s country of employment and and shall reflect what is offered to other
not fall under fixed salary, short-term should be in line with what is offered senior employees in the individual’s
and long-term variable compensation to other senior employees in the same country of employment.
or pension. country and may evolve year on year. The levels of benefits provided may
Purpose: Benefits may for example include vary year on year depending on the
– attract and retain the executive talent company phones, company cars, cost of the provision of benefits to the
required to implement Ericsson’s medical and other insurance benefits, Company.
strategy, tax support, travel, Company gifts and Other benefits shall be capped at 10%
any international relocation and/or of annual fixed salary for members of
– deliver part of the annual compen commuting benefits if the individual is
sation in a predictable format. Group Management located in Sweden.
required to relocate and/or commute
internationally to execute the require- Additional benefits and allowances for
ments of the role. members of Group Management who
are commuters into Sweden or who
are on long-term assignment (“LTA”)
in countries other than their home
countries of employment, shall be
determined in line with the Company’s
international mobility policy which
may include (but is not limited to)
commuting or relocation costs; cost of
living adjustment, housing, home travel
or education allowance; tax and social
security equalization assistance.
1) For most of the current members of Group Management, the current STV target opportunity is below 50% of the annual fixed salary.
2) At present the President and CEO does not participate in STV. The Board has the mandate to decide to include the President and CEO in STV in the future. In doing so the Board shall:
– determine the STV opportunity for the President and CEO within the ranges mentioned above and in line with the external market practices of the country of employment, keeping
the STV opportunity of the other members of Group Management under consideration,
– reduce the LTV opportunity in relation to the STV opportunity, keeping the total target cash compensation consisting of fixed salary, STV and LTV unchanged.
Should the Board decide to introduce STV for the President and CEO, the details will be disclosed in the Remuneration Report for the relevant year.
3) Since most of the current members of Group Management are currently under ITP1 coverage, their pension contributions are currently capped at 30% of pensionable salary and the
additional pension contribution for part-time retirement mandated by the local collective bargaining agreement in Sweden.
Alignment of short-term variable Management. In determining the targets, be linked to financial measures. The Board
compensation with the Company’s the Board and the Committee shall take into and the Committee, as applicable, may also
strategy and criteria for payment account Ericsson’s focused business strategy, choose to include other operational, strategic,
These Guidelines for Remuneration to Group which is built on technology leadership, employee engagement, customer satisfaction
Management have been developed to support product-led solutions and global scale, along or sustainability and corporate responsibility
alignment of Ericsson’s business strategy with internal annual and long-term business or other lead indicator measures to support
and long-term interests of members of Group plans. Therefore, all members of Group the delivery of the business plan. For certain
Management with that of shareholders, in Management shall have one or more Group roles such targets may be supplemented by
particular: financial targets derived from the long-term targets for the relevant Business Area, Market
– The targets for the STV shall be set each financial targets which amount to at least Area or Group Function.
year either by the Board or the Committee 40% of the target STV opportunity. At least
as appropriate for the members of the Group 75% of the target STV opportunity shall
– Maximum pay-out shall be achievable for calculated only for the time as of the date when have received if no additional arrangements
truly outstanding performance and excep- the employee’s employment ceases (i.e. the were made. In addition, if appropriate, different
tional value creation. end of the period of notice) and until the time measures and targets may be applied to the
– At the end of the performance period for each of retirement. new appointment’s incentives in the first year.
STV cycle, the Board and the Committee shall Severance pay shall be reduced by 50% of In addition, it may on a case by case basis
assess performance versus the measures the remuneration or equivalent compensation be decided by the Board and the Committee
and determine the formula-based outcome the employee receives, or has become entitled respectively to compensate an individual
using the financial information made public to, from any other employer or from his/her own for remuneration forfeited from a previous
by the Company for the financial targets. The or other activities during the period that sever- employer during recruitment. The Board and
Board has the discretion to adjust targets ance is paid to the employee by the Company. the Committee will consider on a case by case
and the subsequent outcome in the event The Company shall have the right to ter- basis if all or some of the remuneration includ-
that they cease to be relevant or stretching or minate the employment contract and dismiss ing incentives forfeited need to be ’bought-out’.
to enhance shareholder value. Adjustments the employee with immediate effect, without If there is a buy-out of forfeited incentives, this
shall normally only occur in the event of a giving any advance notice and entitlement will take into account relevant factors including
major change (e.g. an acquisition or divest- to severance pay, if the employee commits a the form they were granted (cash vs. shares),
ment) and shall be on the basis that the serious breach of his/her obligations towards performance conditions attached to these
new target shall be no more or less difficult the Company. awards and the time they would have vested/
to achieve. Normally disputes regarding employment paid. Generally, buy-out awards will be made on
agreements or any other agreements concern- a comparable basis to those forfeited.
Consideration of remuneration offered ing the employment of the members of Group In the event of an internal candidate being
to the Company’s employees Management, the way such agreements have promoted to Group Management, legacy terms
When developing these Guidelines, the Board been arrived at, interpreted or applied, as well as and conditions may be honored, including
and the Committee have considered the total any other litigation proceedings from legal rela- pension and benefit entitlements and any
remuneration and employment conditions of tions based on such agreements, shall be settled outstanding incentive awards. If a Group
the Company’s employees by reviewing the by arbitration by three arbitrators in accordance Management member is appointed following a
application of Ericsson’s remuneration policy with the Rules of the Arbitration Institute of the merger or acquisition with/of another company,
for the wider employee population to ensure Stockholm Chamber of Commerce. Irrespective legacy terms and conditions may also be
consistency. of the outcome of any arbitral award, the honored for a maximum period of 36 months.
There is clear alignment in the remunera- Company may, in the relation between the
tion components for the members of Group parties, carry all fees and expenses charged by Board of Directors’ discretions
Management and the Company’s employees the arbitrators and all of its own litigation costs The Board upon recommendation from the
in the way that remuneration policy is applied (including attorney’s fees), except in the event Committee may in a specific case decide to
as well as the methods followed in determin- the arbitration proceedings were initiated by the temporarily deviate from these Guidelines in
ing fixed salaries, short-term and long-term employee without reasonable cause. whole or in part based on its full discretion in
variable compensation, pension and benefits, unusual circumstances such as:
which are to be applied broadly and consistently Recruitment policy for new members of – upon change of the President and CEO in
throughout the Company. The targets under Group Management accordance with recruitment policy for new
short-term variable compensation are similar In determining the remuneration of a new members of Group Management,
and the performance measures under long- member of Group Management, the Board and – upon material changes in the Company struc-
term variable compensation program are the the Committee shall take into consideration all ture, organization, ownership and business
same for the members of Group Management relevant factors to ensure that arrangements (for example takeover, acquisition, merger,
and other eligible employees of the Company. are in the best interests of the Company and its demerger etc.) which may require adjust-
However, the proportion of pay that is linked shareholders. These factors include: ments in STV and LTV or other elements to
to performance is typically higher for Group – The role being taken on. ensure continuity of Group Management, and
Management in line with market practice. – The level and type of remuneration opportu- – in any other circumstances, provided that the
nity received at a previous employer. deviation is required to serve the long-term
Employment contracts and termination – The geography in which the candidate interests and sustainability of the Company
of employment is being recruited from and whether any or to assure its financial viability.
The members of Group Management are relocation allowance is required. The Committee is responsible for preparing
employed on permanent rolling contracts. – The skills, experience and caliber of the matters for resolution by the Board, and this
The maximum mutual notice period is no more candidate. includes matters relating to deviations from
than 12 months. In case of termination by – The circumstances of the candidate. these Guidelines. Any such deviation will be
the employee, the employee has no right to – The current external market and salary disclosed in the Remuneration Report for the
severance pay. practice. relevant year.
In any case, the fixed salary paid during the – Internal relativities.
notice period plus any severance pay payable
will not together exceed an amount equivalent Additional arrangements
to the individual’s 24 months fixed salary. By way of exception, additional arrangements
The employee may be entitled to severance can be made when deemed appropriate and
pay up until the agreed retirement age or, if a necessary to recruit or retain an individual. Such
retirement age has not been agreed, until the arrangement could be in the form of short-term
month when the employee turns 65. In a case or long-term variable compensation or fixed
where the employee is entitled to severance component and can be renewed, but each such
pay from a date later than 12 months prior to arrangement shall be limited in time and shall
retirement, the severance pay shall be reduced not exceed a period of 36 months and twice the
in proportion to the time remaining and annual fixed salary that the individual would
Events after the reporting period As announced in October 2021 and March Ericsson announces changes to the
2022, the DOJ notified Ericsson that it failed to Executive Team
Proposals from the Nomination Committee provide certain documents and information to On January 25, 2023, Ericsson announced that
On January 11, 2023, Ericsson announced the the DOJ in a timely manner and did not ade- Jenny Lindqvist has been appointed as Senior
Nomination Committee’s proposal that the quately report to the DOJ certain information Vice President, Head of Market Area Europe
shareholders elect at the Annual General Meet- relating to the 2019 internal Iraq investigation. and Latin America, as of February 1, 2023.
ing 2023 ten ordinary board members with no The DOJ has not alleged or charged Ericsson Effective the same date she will become mem-
deputy directors. The Nomination Committee with any new criminal misconduct since the ber of the Ericsson Executive Team, reporting
proposed that the following persons be elected start of the DPA. to the President and CEO.
as board members: The Company’s internal investigation and its Jenny Lindqvist has a Master of Science
– Jan Carlson, Chairman (re-election as cooperation with authorities in relation to the in Business and Economics from Stockholm
director, new election as Chairman) matters discussed in a 2019 internal Iraq inves- School of Economics. Previous management
– Jon Fredrik Baksaas (re-election) tigation report remain open and ongoing. With positions within Ericsson Business Area and
– Carolina Dybeck Happe (re-election) respect to the matters described in the 2019 Market Area organizations include Head of
– Börje Ekholm (re-election) internal Iraq investigation report, the Company Global Customer Unit Telia Company, Head of
– Eric A. Elzvik (re-election) continues to thoroughly investigate the matters Solution Line Intelligent Transport Systems,
– Kristin S. Rinne (re-election) in full cooperation with the DOJ and the SEC. Key Account Manager Telenor, Managed
– Helena Stjernholm (re-election) As previously disclosed, the Company’s 2019 Services Engagement Lead and Business
– Jacob Wallenberg (re-election) investigation did not conclude that Ericsson Manager Multimedia. Previous positions
– Jonas Synnergren (new election) made or was responsible for any payments to outside Ericsson include roles in management
– Christy Wyatt (new election) any terrorist organization and significant further consulting in France and Sweden, as well as in
investigation over the course of 2022 has not Pharmaceuticals in the Philippines.
In addition, the Nomination Committee altered this conclusion. Since 2019, Ericsson As a member of Ericsson’s Executive Team,
informed the Company that the current has taken significant remedial measures, over- Jenny Lindqvist succeeds Stefan Koetz who
chairman, Ronnie Leten, and board members seen by the Board of Directors. These include has been acting in this role as of June 1, 2022.
Kurt Jofs and Nora Denzel had informed the enhancing its group-wide approach to risk Stefan will take on a new role as Head of
Nomination Committee that they will not management and strengthening its compliance Strategic Projects for Market Area Europe and
stand for re-election at the Annual General program and internal controls. The Company Latin America.
Meeting 2023. agreed in December 2022 to extend its inde-
The Company expects to hold its Annual pendent compliance monitorship with one year, Ericsson Announces Compliance Leadership
General Meeting on March 29, 2023, and the until June 2024, to further our efforts to embed Changes
Nomination Committee’s complete proposals best-in-class compliance, risk management and On February 28, 2023, Ericsson announced
and motivated statement are available on the internal controls across the organization. that after almost four years as Ericsson’s Chief
Company’s website www.ericsson.com. On March 2, 2023, the Company reached Compliance Officer (CCO), Laurie Waddy
a resolution (DOJ Plea Agreement) with the would be leaving the Company. Ms. Waddy
Update on deferred prosecution agreement DOJ regarding non-criminal breaches under its joined Ericsson in April 2019 and played an
In 2019, Ericsson entered into a deferred DPA . Under the DOJ Plea Agreement, Ericsson important role in strengthening the Company’s
prosecution agreement (DPA) with the United will plead guilty to previously deferred charges ethics and compliance function. She has been
States Department of Justice (DOJ) in order relating to conduct prior to 2017. In addition, replaced on an interim basis by Jan Sprafke.
to resolve past (prior to 2017) Foreign Cor- Ericsson has agreed to pay a fine of USD
rupt Practices Act (FCPA) violations relating 206,728,848. The entry of the DOJ Plea Agree-
to misconduct in certain countries. The DPA ment will bring the DPA to an end. In the fourth
provided that, in the event of any breach of its quarter of 2022, the Company made a provision
ongoing DPA obligations, the Company could of SEK 2.3 billion (approx. USD 220 million) in
be prosecuted for the historical FCPA violations relation to the DOJ Plea Agreement, including
covered by the DPA. estimated expenses (SEK 0.1 billion) for the
extended compliance monitorship.
Board assurance The financial statements of the Parent provides a fair view of the development of the
The Board of Directors and the President Company have been prepared in accordance Group’s and the Parent Company’s operations,
declare that the consolidated financial state- with generally accepted accounting principles financial position and results of operations
ments have been prepared in accordance with in Sweden and give a fair view of the Parent and describes material risks and uncertainties
IFRS, as issued by the IASB, and as adopted Company’s financial position and results of facing the Parent Company and the compa-
by the EU, and give a fair view of the Group’s operations. The Board of Directors’ Report for nies included in the Group.
financial position and results of operations. the Ericsson Group and the Parent Company
Stockholm, March 7, 2023
Telefonaktiebolaget LM Ericsson (publ)

Org. no. 556016-0680
Ronnie Leten
Chair of the Board
Helena Stjernholm Jacob Wallenberg

Deputy Chair of the Board Deputy Chair of the Board
Jon Fredrik Baksaas Jan Carlson Nora Denzel

Member of the Board Member of the Board Member of the Board
Carolina Dybeck Happe Börje Ekholm Eric A. Elzvik

Member of the Board President, CEO and Member of the Board
Member of the Board
Kurt Jofs Kristin S. Rinne

Member of the Board Member of the Board
Torbjörn Nyman Anders Ripa Kjell-Åke Soting

Member of the Board Member of the Board Member of the Board
Our audit report has been submitted on March 7, 2023

Deloitte AB
Thomas Strömberg
Authorized Public Accountant
34 Consolidated financial statements with notes Financial report 2022
Consolidated financial statements with notes
Contents
Consolidated financial statements 54 B5 Inventories 66 F Financial instruments
35 Consolidated income statement 55 B6 Customer contract related 66 F1 Financial risk management
balances 71 F2 Financial income and expenses
35 Consolidated statement of comprehensive
income (loss) 55 B7 Other current receivables 71 F3 Financial assets, non-current
36 Consolidated balance sheet 55 B8 Trade payables 72 F4 Interest-bearing liabilities
37 Consolidated statement of cash flows 55 B9 Other current liabilities
73 G Employee related
38 Consolidated statement of changes in equity
56 C Long-term assets 73 G1 Post-employment benefits
56 C1 Intangible assets 77 G2 Information regarding members
Notes to the consolidated financial statements 58 C2 Property, plant and equipment of the Board of Directors and
59 C3 Leases Group management
41 A Basis of presentation 79 G3 Share-based compensation
41 A1 Significant accounting policies 60 D Obligations 84 G4 Employee information
48 A2 Critical accounting estimates 60 D1 Provisions
and judgments 62 D2 Contingent liabilities
85 H Other
62 D3 Assets pledged as collateral 85 H1 Taxes
51 B Business and operations 86 H2 Earnings per share
62 D4 Contractual obligations
51 B1 Segment information 86 H3 Statement of cash flows
54 B2 Net sales 63 E Group structure 87 H4 Related party transactions
54 B3 Expenses by nature 63 E1 Equity 87 H5 Fees to auditors
54 B4 Other operating income and 64 E2 Business combinations 88 H6 Events after the reporting period
expenses 65 E3 Associated companies
Financial report 2022 Consolidated financial statements 35
Consolidated financial statements
Consolidated income statement

January–December, SEK million Notes 2022 2021 2020
Net sales B1, B2 271,546 232,314 232,390
Cost of sales –158,251 –131,565 –138,666
Gross income 113,295 100,749 93,724
Research and development expenses –47,298 –42,074 –39,714

Selling and administrative expenses –35,692 –26,957 –26,684
Impairment losses on trade receivables F1 –40 –40 118
Operating expenses –83,030 –69,071 –66,280
Other operating income B4 1,231 1,526 1,161

Other operating expenses B4 –4,493 –1,164 –499
Share in earnings of joint ventures and associated companies B1, E3 17 –260 –298
Earnings before financial items and income tax (EBIT) B1 27,020 31,780 27,808
Financial income and expenses, net F2 –2,411 –2,530 –596

Income after financial items 24,609 29,250 27,212
Income tax H1 –5,497 –6,270 –9,589

Net income 19,112 22,980 17,623
Net income attributable to:
Owners of the Parent Company 18,724 22,694 17,483
Non-controlling interests 388 286 140
Other information
Average number of shares, basic (million) H2 3,330 3,329 3,323
Earnings per share attributable to owners of the Parent Company, basic (SEK) H2 5.62 6.82 5.26
Earnings per share attributable to owners of the Parent Company, diluted (SEK) H2 5.62 6.81 5.26
Consolidated statement of comprehensive income (loss)

January–December, SEK million 2022 2021 2020
Net income 19,112 22,980 17,623
Other comprehensive income (loss)

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension plans including asset ceiling 10,669 3,537 –4,618
Revaluation of borrowings due to change in credit risk 1,030 31 99
Cash flow hedge reserve
Gains/losses arising during the period 3,703 – –
Transfer to goodwill –3,677 – –
Tax on items that will not be reclassified to profit or loss –3,067 –682 880
Items that have been or may be reclassified to profit or loss

Gains/losses arising during the period –701 –542 136
Reclassification adjustments on gains/losses included in profit or loss 280 –96 281
Translation reserves
Changes in translation reserves 7,130 3,342 –5,376
Reclassification to profit and loss –85 46 124
Share of other comprehensive income of JV and associated companies 49 28 –81
Tax on items that have been or may be reclassified to profit or loss 87 126 –86
Other comprehensive income (loss), net of tax 15,418 5,790 –8,641
Total comprehensive income 34,530 28,770 8,982
Total comprehensive income attributable to:

Owners of the Parent Company 34,274 28,694 8,787
Non-controlling interests 256 76 195
36 Consolidated financial statements Financial report 2022
Consolidated balance sheet

Dec 31 Dec 31
SEK million Notes 2022 2021
Assets
Non-current assets
Intangible assets C1
Capitalized development expenses 3,705 3,528
Goodwill 84,570 38,204
Customer relationships, IPRs and other intangible assets 26,340 3,830
Property, plant and equipment C2 14,236 13,580
Right-of-use assets C3 7,870 7,948
Financial assets
Equity in joint ventures and associated companies E3 1,127 941
Other investments in shares and participations F3 2,074 2,258
Customer finance, non-current B6, F1 415 568
Interest-bearing securities, non-current F1, F3 9,164 30,626
Other financial assets, non-current F3 6,839 6,217
Deferred tax assets H1 19,394 23,109
175,734 130,809
Current assets
Inventories B5 45,846 35,164
Contract assets B6, F1 9,843 10,506
Trade receivables B6, F1 48,413 45,399
Customer finance, current B6, F1 4,955 2,719
Current tax assets 7,973 6,379
Other current receivables B7 9,688 7,656
Interest-bearing securities, current F1 8,736 12,932
Cash and cash equivalents H3 38,349 54,050
173,803 174,805
Total assets 349,537 305,614
Equity and liabilities

Equity
Capital stock E1 16,672 16,672
Additional paid in capital E1 24,731 24,731
Other reserves E1 8,201 454
Retained earnings E1 85,210 66,918
Equity attributable to owners of the Parent Company E1 134,814 108,775
Non-controlling interests E1 –1,510 –1,676

133,304 107,099
Non-current liabilities
Post-employment benefits G1 27,361 36,050
Provisions, non-current D1 3,959 3,722
Deferred tax liabilities H1 4,784 884
Borrowings, non-current F4 26,946 22,241
Lease liabilities, non-current C3 6,818 7,079
Other non-current liabilities 745 1,587
70,613 71,563
Current liabilities
Provisions, current D1 7,629 5,782
Borrowings, current F4 5,984 9,590
Lease liabilities, current C3 2,486 2,224
Contract liabilities B6 42,251 32,834
Trade payables B8 38,437 35,684
Current tax liabilities 2,640 2,917
Other current liabilities B9 46,193 37,921
145,620 126,952
Total equity and liabilities 349,537 305,614
Consolidated statement of cash flows

Operating activities
Net income 19,112 22,980 17,623
Adjustments to reconcile net income to cash H3 17,638 17,143 19,931
36,750 40,123 37,554
Changes in operating net assets

Inventories –7,740 –5,565 384
Customer finance, current and non-current –1,732 34 370
Trade receivables and contract assets 4,766 1,551 –3,185
Trade payables –1,995 1,385 4,303
Provisions and post-employment benefits 2,339 –118 –2,669
Contract liabilities 5,794 4,014 –560
Other operating assets and liabilities, net –813 2,701 –2,280
619 4,002 –3,637
Interest received 344 8 763
Interest paid –1,250 –974 –1,434
Taxes paid –5,600 –4,094 –4,313
Cash flow from operating activities 30,863 39,065 28,933
Investing activities
Investments in property, plant and equipment C2 –4,477 –3,663 –4,493
Sales of property, plant and equipment 249 115 254
Acquisitions of subsidiaries and other operations H3, E2 –51,995 –389 –9,657
Divestments of subsidiaries and other operations H3, E2 307 448 59
Product development C1 –1,720 –962 –817
Purchase of interest-bearing securities –13,582 –35,415 –13,637
Sale of interest-bearing securities 40,541 20,114 12,289
Other investing activities –3,720 –131 801
Cash flow from investing activities –34,397 –19,883 –15,201
Financing activities
Proceeds from issuance of borrowings F4 10,755 7,882 3,219
Repayment of borrowings F4 –16,029 –5,791 –9,031
Sale of own shares – 42 163
Dividends paid –8,415 –6,889 –5,996
Repayment of lease liabilities F4 –2,593 –2,368 –2,417
Other financing activities 352 –2,183 1,570
Cash flow from financing activities –15,930 –9,307 –12,492
Effect of exchange rate changes on cash 3,763 563 –2,707

Net change in cash and cash equivalents –15,701 10,438 –1,467
Cash and cash equivalents, beginning of period 54,050 43,612 45,079

Cash and cash equivalents, end of period H3 38,349 54,050 43,612
Consolidated statement of changes in equity

Equity and Other comprehensive income (loss) 2022
Additional
Capital paid in Other Retained Stockholders’ Non-controlling
SEK million stock capital reserves earnings equity interests Total equity
January 1, 2022 16,672 24,731 454 66,918 108,775 –1,676 107,099
Net income – – – 18,724 18,724 388 19,112

Remeasurements of defined benefit pension plans
including asset ceiling – – – 10,654 10,654 15 10,669
Revaluation of borrowings due to change in credit risk – – 1,030 – 1,030 – 1,030
Gains/losses arising during the period – – 3,703 – 3,703 – 3,703
Transfer to goodwill – – –3,677 – –3,677 – –3,677
Tax on items that will not be reclassified to profit or loss – – –970 –2,093 –3,063 –4 –3,067
Items that have been or may be reclassified

to profit or loss
Gains/losses arising during the period – – –701 – –701 – –701
Reclassification to profit and loss – – 280 – 280 – 280
Translation reserves 1)
Changes in translation reserves – – 7,273 – 7,273 –143 7,130
Reclassification to profit and loss – – –85 – –85 – –85
Share of other comprehensive income of JV
and associated companies – – 49 – 49 – 49
Tax on items that have been or may be reclassified
to profit or loss – – 87 – 87 – 87
Other comprehensive income (loss), net of tax – – 6,989 8,561 15,550 –132 15,418
Total comprehensive income – – 6,989 27,285 34,274 256 34,530
Transfer to retained earnings – – 758 –758 – – –
Transactions with owners
Long-term variable compensation plans – – – 89 89 – 89
Dividends paid 2) – – – –8,325 –8,325 –90 –8,415
Transactions with non-controlling interest – – – 1 1 – 1
December 31, 2022 16,672 24,731 8,201 85,210 134,814 –1,510 133,304
1) Changes in translation reserves include changes regarding revaluation of goodwill in local currency of SEK 5,070 million (SEK 2,646 million in 2021 and SEK –3,359 million in 2020).
2) Dividends paid per share amounted to SEK 2.50 (SEK 2.00 in 2021 and SEK 1.50 in 2020).

Additional
January 1, 2021 16,672 24,731 –2,689 47,960 86,674 –1,497 85,177
Net income – – – 22,694 22,694 286 22,980

including asset ceiling – – – 3,532 3,532 5 3,537
Revaluation of borrowings due to change in credit risk – – 31 – 31 – 31
Tax on items that will not be reclassified to profit or loss – – –6 –675 –681 –1 –682

to profit or loss
Gains/losses arising during the period – – –542 – –542 – –542
Reclassification to profit and loss – – –96 – –96 – –96
Changes in translation reserves – – 3,556 – 3,556 –214 3,342
and associated companies – – 28 – 28 – 28
to profit or loss – – 126 – 126 – 126
Other comprehensive income (loss), net of tax – – 3,143 2,857 6,000 –210 5,790
Total comprehensive income – – 3,143 25,551 28,694 76 28,770

Sale of own shares – – – 42 42 – 42
Dividends paid – – – –6,658 –6,658 –231 –6,889
Transactions with non-controlling interest – – – –70 –70 –24 –94
December 31, 2021 16,672 24,731 454 66,918 108,775 –1,676 107,099

Additional
January 1, 2020 16,672 24,731 2,292 38,864 82,559 –681 81,878
Net income – – – 17,483 17,483 140 17,623

including asset ceiling – – – –4,614 –4,614 –4 –4,618
Revaluation of borrowings due to change in credit risk – – 99 – 99 – 99
Tax on items that will not be reclassified to profit or loss – – –20 899 879 1 880

to profit or loss
Gains/losses arising during the period – – 136 – 136 – 136
Changes in translation reserves – – –5,434 – –5,434 58 –5,376
and associated companies – – –81 – –81 – –81
to profit or loss – – –86 – –86 – –86
Other comprehensive income (loss), net of tax – – –4,981 –3,715 –8,696 55 –8,641
Total comprehensive income (loss) – – –4,981 13,768 8,787 195 8,982

Sale of own shares – – – 163 163 – 163
Dividends paid – – – –4,985 –4,985 –1,011 –5,996
December 31, 2020 16,672 24,731 –2,689 47,960 86,674 –1,497 85,177
Financial report 2022 Notes to the consolidated financial statements 41
Notes to the consolidated financial statements
Section A – Basis of presentation
A1 Significant accounting policies Intra-group balances and any unrealized income and expense arising from
intra-group transactions are fully eliminated in preparing the consolidated
financial statements. Unrealized losses are eliminated in the same way as
Basis of presentation unrealized gains, but only to the extent that there is no evidence of impairment.
The Company is comprised of the parent company, Telefonaktiebolaget
Introduction LM Ericsson, with generally fully-owned subsidiaries in many countries of the
The consolidated financial statements comprise Telefonaktiebolaget world. The largest operating subsidiaries are the fully-owned telecom vendor
LM Ericsson, the Parent Company, and its subsidiaries (“the Company”) companies Ericsson AB, incorporated in Sweden and Ericsson Inc., incorpo-
and the Company’s interests in joint ventures and associated companies. rated in the US.
The Parent Company is domiciled in Sweden at Torshamnsgatan 21,
SE-164 83 Stockholm. Ericsson supplies communication infrastructure, Foreign currency remeasurement and translation
services and software to the telecom industry and other sectors. Items included in the financial statements of each entity of the Company are
The consolidated financial statements for the year ended December measured using the currency of the primary economic environment in which
31, 2022, have been prepared in accordance with International Financial the entity operates (“the functional currency”). The consolidated financial
Reporting Standards (IFRS) as issued by the IASB, and as endorsed by the statements are presented in Swedish Krona (SEK), which is the Parent
EU and RFR 1 “Additional rules for Group Accounting,” related interpretations Company’s functional and presentation currency.
issued by the Swedish Financial Reporting Board (Rådet för finansiell rap-
portering), and the Swedish Annual Accounts Act. For the financial reporting Transactions and balances
of 2022, the Company has applied IFRS as issued by the IASB (IFRS effective Foreign currency transactions are translated into the functional currency using
as per December 31, 2022). There is no difference between IFRS effective as the exchange rates prevailing at the dates of each respective transaction.
per December 31, 2022, and IFRS as endorsed by the EU, nor is RFR 1 related Foreign exchange gains and losses resulting from the settlement of such
interpretations issued by the Swedish Financial Reporting Board (Rådet för transactions and from the translation at period-end exchange rates of mon-
finansiell rapportering) or the Swedish Annual Accounts Act in conflict with etary assets and liabilities denominated in foreign currencies are recognized in
IFRS, for all periods presented. the income statement. An exception applies to intercompany loans regarded
The financial statements were approved by the Board of Directors on as part of net investment in foreign operations, whereby the foreign exchange
March 7, 2023. The financial statements are subject to approval by the Annual gains and losses on translation shall be recognised in Other Comprehensive
General Meeting of shareholders. Income (OCI) on consolidation until the intercompany loan is repaid or written
Disclosure about new standards and amendments applied as from off, at which time the cumulative OCI amount is reclassified to the income
January 1, 2022, can be found in the end of this note. statement.
The preparations for the adoption of new standards and interpretations not Changes in the fair value of monetary securities denominated in foreign
adopted in 2022 are disclosed at the end of this note, see heading Other. currency classified as fair value through other comprehensive income (FVOCI)
are allocated between translation differences resulting from changes in the
Basis of presentation amortized cost of the security and other changes in the carrying amount of
The financial statements are presented in millions of Swedish Krona (SEK). the security. Translation differences related to changes in the amortized cost
They are prepared on a going concern and historical cost basis, except for are recognized in profit or loss, and other changes in the carrying amount are
certain financial assets and liabilities that are stated at fair value: financial recognized in Other Comprehensive Income (OCI).
instruments classified as fair value through profit and loss (FVTPL), financial Foreign currency exchange effect is presented as a net item within Financial
instruments classified as fair value through other comprehensive income income and expenses, reported separately from other financial income and
(FVOCI) and plan assets related to defined benefit pension plans. Assets expenses items as this reflects the way the Company manages its foreign
acquired under business combinations are fair valued at initial recognition. exchange risks on a net basis.
Financial information in the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated statement of cash flows Translations of Group companies
and the consolidated statement of changes in equity with related notes are The results and financial position of all the group entities that have a func-
presented with two comparison years. For the consolidated balance sheet, tional currency different from the presentation currency are translated into the
financial information with related notes is presented with one comparison year. presentation currency as follows:
Assets and liabilities for each balance sheet presented are translated at the
Basis of consolidation and composition of the Group closing rate at the date of that balance sheet.
The consolidated financial statements are prepared in accordance with the Period income and expenses for each income statement are translated at
purchase method. Accordingly, consolidated stockholders’ equity includes period average exchange rates.
equity in subsidiaries, joint ventures and associated companies earned only All resulting net exchange differences are recognized as a separate compo-
after their acquisition. nent of Other comprehensive income (OCI).
Subsidiaries are all companies for which Telefonaktiebolaget LM Ericsson, On consolidation, exchange differences arising from the translation of the
directly or indirectly, is the parent. To be classified as a parent, Telefonaktie net investment in foreign operations, and of borrowings and other currency
bolaget LM Ericsson, directly or indirectly, must control another company instruments designated as hedges of such investments, are accounted for in
which requires that the Parent Company has power over that other company, OCI. When a foreign operation is disposed of or sold, exchange differences that
is exposed to variable returns from its involvement and has the ability to use its were recorded in OCI are recognized in the income statement as part of the
power over that other company. The financial statements of subsidiaries are gain or loss on sale.
included in the consolidated financial statements from the date that control
commences until the date that such control ceases.
42 Notes to the consolidated financial statements Financial report 2022
Note A1, cont’d.

Goodwill and fair value adjustments arising on the acquisition of a foreign Enterprise solutions
entity are treated as assets and liabilities of the foreign entity and are trans- Enterprise solutions comprise mainly of software platform solutions, delivered
lated at the closing rate. as-a-service through a cloud delivery model. These are generally sold as sub-
The Company is continuously monitoring the economies with high infla- scription contracts with revenue recognized pro-rata over time or on a usage
tion, the risk of hyperinflation and potential impact on the Company. There is basis.
no significant impact due to any currency translation of a hyper-inflationary Cloud services allow the customer to use hosted software over the contract
economy. period without taking possession of the software. Cloud services are highly
integrated with the software and the individual components are not con-
sidered distinct, hence all revenue is recognized in the period these services
Business and operations are provided. Contract duration ranges from one month to 5 years. Where
For further disclosure, see the notes under section B. equipment is supplied, lease assessment is performed. In most cases, no lease
arrangement is identified. Cost of equipment is expensed as cost of sales over
Revenue recognition the contract period. Costs relating to services delivered are recognized as cost
The following paragraphs describe the types of contracts, when performance of sales when incurred.
obligations are satisfied, and the timing of revenue recognition. They also Revenue for fixed fee is recognized on a pro-rata basis over the contract
describe the normal payment terms associated with such contracts and the duration. Revenue for fees based on usage is recognized when usage occurs.
resulting impact on the balance sheet over the duration of the contracts. The Services sold through wholesalers or distributors are assessed for principal
majority of Ericsson’s business is for the sale of standard products and services. or agent relationship. Wholesalers are treated as agents for services that are
activated upon delivery of equipment to the end users since the Company
Standard products and services still has the primary responsibility to the customers for providing the services,
Products and services are classified as standard solutions if they do not require hence revenue (in the gross amount) is recognized ratably from activation
significant installation and integration services to be delivered. Installation and until the end of the contract. In some cases within the communication applica-
integration services are generally completed within a short period of time, from tion platform interfaces (‘API’) business, wholesalers are viewed both as our
the delivery of the related products. These products and services are viewed customers and suppliers, hence revenue and costs of sales are accounted for
as separate distinct performance obligations. This type of customer contract is on a gross basis when usage by the end customer occurs.
usually signed as a frame agreement and the customer issues individual pur- For fixed fee contracts, billing is typically in advance, resulting in contract
chase orders to commit to purchases of products and services over the duration liability. For usage based contracts, billing is in arrears, resulting in a receivable.
of the agreement. Typical credit term is 30 to 45 days.
Revenue for standard products is recognized when control over the equip- This type of business applies to the Enterprise segment.
ment is transferred to the customer at a point in time. This assessment shall be
viewed from a customer’s perspective considering indicators such as transfer Intellectual Property Rights (IPR)
of titles and risks, customer acceptance, physical possession, and billing rights. This type of contract relates to the patent and licensing business. The
For hardware sales, transfer of control is usually deemed to occur when the Company has assessed that the nature of its IPR contracts is such that they
equipment arrives at the customer site. provide customers a license with the right to access the Company’s intellectual
Standard product software is sold as an on-premises software license that properties over time, therefore revenue shall be recognized over the duration of
provides a right to use the software as it exists when made available to the the contract. Royalty revenue based on sales or usage is recognized when the
customer. Software licenses may be provided to the customer at a point in time, sales and usage occur.
activated or ready to be activated by the customer at a later stage, therefore The transaction price on these contracts is usually structured as a royalty fee
revenue is recognized when customer obtains control of the software. based on sales or usage over the period, measured on a quarterly basis. This
Software licenses are also sold on a when-and-if available basis or delivered results in a receivable balance if the billing is performed the following quarter
to the customer network over a period of time. In such cases, the customer is after measurement. Some contracts include lump sum amounts, payable either
billed on a subscription basis, and revenue is recognized over time. For soft- up front at commencement or on an annual basis. This results in a contract
ware revenue based on usage the revenue is recognized upon usage measure- liability balance if payment is in advance of revenue, as revenue is recognized
ment and right to invoice. Revenue for installation and integration services is over time. Amounts billed are normally subject to payments terms within
recognized upon completion of the service. Costs incurred in delivering stand- 60 days from invoice date.
ard products and services are recognized as costs of sales when the related As described in note B1 “Segment Information”, revenue from IPR licensing
revenue is recognized in the Income statement. Costs incurred relating to contracts are allocated to the segments Networks and Cloud Software and
performance obligations not yet fully delivered are recognized as Inventories. Services.
Transaction prices under these contracts are usually fixed, and mostly
billed upon delivery of the hardware or software, or completion of installa- Customer contract related balances
tion services. A proportion of the transaction price may be billed upon formal Trade receivables include amounts that are billed in accordance with customer
acceptance of the related installation services, which will result in a contract contract terms and amounts that the Company has an unconditional right to,
asset for the proportion of the transaction price that is not yet billed. Amounts with only passage of time before the amounts can be billed in accordance with
billed are normally subject to payments terms within 60 days from invoice the customer contract terms.
date. Customer finance agreements are agreed separately with some custom- Customer finance credits arise from credit terms exceeding 179 days in
ers where payment terms exceed 179 days. the customer contract or a separate financing agreement signed with the
Revenue for recurring services such as customer support and managed customer. Customer finance is a class of financial assets that is managed
services is recognized as the services are delivered, pro-rata over time. Costs separately from receivables. See note F1 “Financial risk management,” for
incurred in delivering recurring services are recognized as cost of sales as they further information on credit risk management of trade receivables and cus-
are incurred. Transaction prices under these contracts are billed over time, tomer finance credits.
often on a quarterly basis. Transaction price for managed services contract Where significant financing is provided to the customer, revenue is adjusted
may include variable consideration that is estimated based on performance to reflect the impact of the financing transaction. These transactions could
and prior experience with the customer. Amounts billed are normally subject to arise from the customer finance credits above if the contracted interest rate
payments terms within 60 days from invoice date. Contract liabilities or receiv- is below the market rate or through implied financing transactions due to
ables may arise depending on whether the quarterly billing is in advance or in payment terms of more than one year from the date of transfer of control.
arrears. Contracts for standard products and services apply to all segments. The Company has elected to use the practical expedient not to adjust revenue
for transactions with payment terms, measured from the date of transfer of
control, of one year or less.
Note A1, cont’d.

Contract asset is unbilled sales amount relating to performance obligation discount rates applied by the Company is not materially different from a dis-
that has been satisfied under customer contract but is conditional on terms counting based on before-tax future cash flows and before-tax discount rates,
other than only the passage of time before payment of the consideration as required by IFRS. An impairment loss in respect of goodwill is not reversed.
is due. Write-downs of goodwill are reported under other operating expenses.
Contract liability relates to amounts that are paid by or due from custom- Additional disclosure is required in relation to goodwill impairment test-
ers for which performance obligations are unsatisfied or partially satisfied. ing: see note A2 “Critical accounting estimates and judgments” and note C1
Advances from customers are also included in the contract liability balance. “Intangible assets.”
Deferred sales commissions Intangible assets other than goodwill

The Company has various incremental commission costs for internal sales Intangible assets other than goodwill comprises intangible assets acquired
personnel and channel partners that relate to the acquisition of customer through business combination in order of materiality they are customer rela-
contracts in the Enterprise segment. These costs are capitalized as deferred tionships, technology (patents), trademarks and software. In addition there
contract acquisition costs (within Other non-current and Other current assets) are capitalized development expenses and separately acquired intangibles
and amortized on a straight-line basis to selling and administrative expenses assets, mainly consisting of software. At initial recognition, acquired intangible
over the contract period. The Company expenses sales commissions for com- assets relating to business combinations are stated at fair value and capital-
mission plans related to customer arrangements with a duration of one year or ized development expenses and software are stated at cost. Subsequent to
less. The Company periodically assesses for changes in its business or market initial recognition, these intangible assets are stated at the initially recognized
conditions which would indicate that its amortization period shall be changed amounts less accumulated amortization and any impairment. Amortization
or if there are potential indicators of impairment. and any impairment losses are included in Research and development
expenses, which mainly consists of capitalized development expenses and
Segment reporting technology; in Selling and administrative expenses, which mainly consists of
The segment presentation, as per each segment, is based on the Company’s expenses relating to customer relations and brands; and in Cost of sales.
accounting policies as disclosed in this note. An operating segment is a com- Costs incurred for the development of products to be sold, leased, or other-
ponent of a company whose operating results are regularly reviewed by the wise marketed or intended for internal use are capitalized as from when tech-
Company’s chief operating decision maker (CODM), to make decisions about nological and economic feasibility has been established until the product is
resources to be allocated to the segment and assess its performance. The available for sale or use. Research and development expenses directly related
President and the CEO is defined as the CODM function in the Company. to orders from customers are accounted for as a part of Cost of sales. Other
The Company’s segment disclosure about geographical areas is based on research and development expenses are charged to the income statement as
the country in which transfer of control of products and services occur. For incurred. Amortization of acquired intangible assets, such as patents, customer
further information, see note B1 “Segment information.” relations, trademarks, and software, is made according to the straight-line
method over their estimated useful lives, not exceeding ten years. Amortization
Inventories of capitalized development expenses is made according to the straight-line
Inventories are measured at the lower of cost or net realizable value and using method over their useful lives, which is normally three years.
cost formula first-in, first-out (FIFO) related to the Company’s owned produc- The Company has not recognized any intangible assets with indefinite
tion and weighted average cost formula for externally purchased components useful life other than goodwill.
and raw materials within the Company’s production units. The cost of invento- Impairment tests are performed when there is an indication of impairment.
ries related to work in progress is measured at its individual costs. Tests are performed in the same way as for goodwill but on an asset level, see
Risks of obsolescence have been measured by estimating market value above. However, intangible assets not yet available for use are tested annually
based on future customer demand and changes in technology and customer for impairment.
acceptance of new products. Corporate assets have been allocated to cash-generating units in relation
A significant part of inventories is Contract work in progress (CWIP). to each unit’s proportion of total net sales. The amount related to corporate
Recognition and derecognition of CWIP relates to the Company’s revenue assets is not significant. Impairment losses recognized in prior periods are
recognition principles meaning that costs incurred under a customer contract assessed at each reporting date for any indications that the loss has decreased
are initially recognized as CWIP (see Revenue recognition policy). When the or no longer exists.
related revenue is recognized, CWIP is derecognized and is instead recognized In note A2, “Critical accounting estimates and judgments,” further disclosure
as Cost of sales. is presented in relation to (i) key sources of estimation uncertainty and (ii) the
In note A2, “Critical accounting estimates and judgments,” further disclosure decision made in relation to accounting policies applied.
is presented in relation to (i) key sources of estimation uncertainty and (ii) the
decision made in relation to accounting policies applied. Property, plant, and equipment
Property, plant, and equipment consist of real estate, machinery and other
technical assets, other equipment, tools and installations, and construction
Long-term assets in progress. They are stated at cost less accumulated depreciation and any
For further disclosure, see the notes under section C. impairment losses.
Depreciation is charged to the income statement, on a straight-line basis,
Goodwill over the estimated useful life of each component of an item of property, plant,
As from the acquisition date, goodwill acquired in a business combination is and equipment, including buildings. Estimated useful lives are, in general,
allocated to each cash-generating unit (CGU) of the Company expected to 25–50 years for real estate and 3–10 years for machinery and equipment.
benefit from the synergies of the combination. Depreciation and any impairment charges are included in Cost of sales,
An annual impairment test for the CGUs to which goodwill has been Research and development or Selling and administrative expenses.
allocated is performed in the fourth quarter, or when there is an indication of For each item of property, plant and equipment , the Company recognizes
impairment. An impairment loss is recognized if the carrying amount of an separate components based on 1) physical component, and 2) a non-physical
asset or its cash-generating unit exceeds its recoverable amount. The recover- component that represents a major inspection of overhaul. The Company
able amount is the higher of the value in use and the fair value less costs of recognizes in the carrying amount of an item of property, plant, and equipment
disposal. In assessing value in use, the estimated future cash flows after tax the cost of replacing a component and derecognizes the residual value of the
are discounted to their present value using an after-tax discount rate that replaced component.
reflects current market assessments of the time value of money and the risks Impairment testing as well as recognition or reversal of impairment of
specific to the asset. Application of after-tax amounts in calculation, both in property, plant and equipment is performed in the same manner as for intangi-
relation to cash flows and discount rate is applied because available models ble assets other than goodwill, see description under “Intangible assets other
for calculating discount rate include a tax component. The effect of after-tax than goodwill” above.
Note A1, cont’d.

Gains and losses on disposals are determined by comparing the proceeds Obligations
less cost to sell with the carrying amount and are recognized within Other For further disclosure, see the notes under section D.
operating income and expenses in the income statement.
Provisions and Contingent Liabilities
Leases Provisions are made when there are legal or constructive obligations as a result
The main types of assets leased by the Company are, in the order of material- of past events and when it is probable that an outflow of resources will be
ity, real estate, and vehicles and IT-equipment. Vehicles are mainly used under required to settle the obligations and the amounts can be reliably estimated.
service contracts. When the effect of the time value of money is material, the estimated cash
flows are discounted to present value. However, the actual outflows as a result
Leases when the Company is the lessee of the obligations may differ from such estimates.
The Company recognizes right-of-use assets and lease liabilities arising from Provisions mainly relate to restructuring, customer and supplier-related
all leases in the balance sheet, with some exceptions of low value assets. This provisions, warranty commitments and other obligations, cash-settled share-
model reflects that, at the start of a lease, the lessee always obtains the right to based payments, claims or obligations as a result of patent infringement, and
control an asset for a period of time and has an obligation to pay for that right. other litigations.
In the assessment of a lease contract the lease components are separated A restructuring obligation is considered to have arisen when the Company
from non-lease components. The lease term is defined based on the contract has a detailed formal plan for the restructuring (approved by management),
lease term and when reasonably certain estimated extension or termina- which has been communicated in such a way that a valid expectation has been
tion options are included. The average remaining lease term for real estate raised among those affected. Provision for restructuring is recorded when the
contracts is around five years. For lease extensions not included in the lease Company has a constructive obligation and can reliably estimate the related
liability there can be multiple options for different periods (overlapping) and liabilities. The estimate is based on the Company’s expected expenditure
they can have different stipulations for how the various options can be applied to settle the obligation and is adjusted when changes to the expenditure is
to be valid (limitations on size/scope) that must be maintained for extension. known.
As a result, the future payments for these lease extensions are not known. Customer-related provisions mainly consist of estimated losses on onerous
At commencement date the lease liabilities are measured at the present contracts. For losses on customer contracts, a provision equal to the total
value of the lease payments not paid at the commencement date, discounted estimated loss is recorded immediately when a loss from a contract is probable
using the Company’s incremental borrowing rate. The incremental borrowing and can be estimated reliably. The loss is calculated based upon the lower of
rate is calculated considering interest swap rates, the creditworthiness of the the unavoidable costs to fulfill a contract and the exit penalty. The unavoidable
entity that signs the lease and an adjustment for the asset being collateralized. cost includes both the incremental and allocated costs to fulfill the contract.
Lease payments included in the liability are fixed payments, variable payments Supplier-related provisions relate to contractual obligations, mostly relating
depending on an index or rate and penalties for termination of contracts. to inventory, which has been assessed to be at risk for obsolescence based on
After the commencement date, the amount of lease liabilities is measured the business forecast. Based on a risk assessment a provision equal to the best
on an amortized cost basis using the effective interest method where the estimate of the expected obsolescence relating to the contractual commit-
lease liabilities increase related to the accrued interest and decrease due to ments is provided for.
lease payments made. In addition, the lease liability is remeasured if there Product warranty commitments consider probabilities of all material quality
is a modification, a change in the lease term or a change in the future lease issues based on historical performance for established products and expected
payments resulting from a change in an index or rate used to determine such performance for new products, estimates of repair cost per unit, and volumes
lease payments. sold still under warranty up to the reporting date.
At commencement date the right-of-use assets are measured at cost, which Share-based payment provision relates to cash-settled share-based
equals the amount of the initial measurement of lease liability adjusted for programs. Refer to the accounting policy under “Cash-settled plans.”
any lease payments made at or before the commencement date less any lease Other provisions relate mainly to litigations and other provisions which do
incentives received plus any initial direct costs and restoration costs. not fall within the defined categories. The Company provides for estimated
After commencement date the right-of-use assets are measured at cost future settlements related to patent infringements based on the probable
less accumulated depreciation and impairment losses and adjusted for any outcome of each infringement. The actual outcome or actual cost of settling an
remeasurements of the lease liabilities. The right-of-use asset is depreciated individual infringement may vary from the Company’s estimate. The Company
over the lease term straight-line. Impairment of right-of-use assets follows estimates the outcome of any potential patent infringement made known to
IAS 36 “Impairment of Assets.” When there is impairment the asset value shall the Company through assertion and the Company’s monitoring of patent-
be written down to its recoverable amount. related cases in the relevant legal systems. To the extent that the Company
The Company applies the recognition exemption for short-term leases and makes the judgment that an identified potential infringement will more likely
leases for which the underlying asset is of low value and recognizes the lease than not result in an outflow of resources, the Company records a provision
payments for those leases as an expense on a straight-line basis over the based on the Company’s best estimate of the expenditure required to settle
lease term. The interest expense on lease liabilities in the income statement with the counterpart.
is presented as a component of finance costs separate from the depreciation In the ordinary course of business, the Company is subject to proceedings,
charges for right-of-use assets. In the statement of cash flows, cash payments lawsuits, and other unresolved claims, including proceedings under laws and
related to the amortization of the lease liabilities are reported within financing government regulations and other matters. These matters are often resolved
activities. Interest payments, payments for short-term leases, low-value assets over a long period of time. The Company regularly assesses the likelihood of
and variable lease expenses not included in the measurement of the lease any adverse judgments in or outcomes of these matters, as well as potential
liability are reported within operating activities. For more information regard- ranges of possible losses. Provisions are recognized when it is probable that an
ing leases, see note C3 “Leases.” obligation has arisen, and the amount can be reasonably estimated based on a
detailed analysis of each individual issue.
Leases when the Company is the lessor Present or possible obligations which do not meet the provision recognition
Lease contracts with the Company as lessor are classified as finance leases criteria are reported as contingent liabilities. For further detailed information,
when substantially all of risks and rewards are transferred to the lessee, see note D2 “Contingent liabilities.” In note A2 “Critical accounting estimates
and otherwise as operating leases. Under a finance lease, a receivable is and judgments,” further disclosure is presented in relation to (i) key sources
recognized at an amount equal to the net investment in the lease and revenue of estimation uncertainty and (ii) the decision made in relation to accounting
is recognized in accordance with the revenue recognition principles. Under policies applied.
operating leases revenue as well as depreciation is recognized on a straight-
line basis over the lease term. When the Company acts as a lessor it is mainly
in relation to real estate sublease, financing and operating.
Note A1, cont’d.
Group structure or financial asset. In addition, any amounts previously recognized in Other
For further disclosure, see the notes under section E. comprehensive income in respect of that entity are accounted for as if the
Company had directly disposed of the related assets or liabilities. This may
Business combinations mean that amounts previously recognized in Other comprehensive income are
At the acquisition of a business, the cost of the acquisition, being the purchase reclassified to profit or loss.
price, is measured as the fair value of the assets given, and liabilities incurred
or assumed at the date of exchange, including any cost related to contingent
consideration. Transaction costs attributable to the acquisition are expensed Financial instruments and risk management
as incurred. The acquisition cost is allocated to acquired assets, liabilities, and For further disclosure, see the notes under section F. Plan assets under IAS 19
contingent liabilities based upon appraisals made, including assets and liabili- are excluded from the financial risk management policy and financial instru-
ties that were not recognized on the acquired entity’s balance sheet, for exam- ments disclosures in section F.
ple, intangible assets such as customer relations, brands, patents, and financial
liabilities. Goodwill arises when the purchase price exceeds the fair value of Financial assets
recognizable acquired net assets. In acquisitions with non-controlling interests Financial assets are recognized when the Company becomes a party to the
full or partial goodwill can be recognized. Final amounts are established within contractual provisions of the instrument. Regular purchases and sales of
one year after the transaction date at the latest. financial securities are recognized on the settlement date. Financial assets
In case there is a put option for a non-controlling interest in a subsidiary a are derecognized when the rights to receive cash flows from the assets have
corresponding financial liability is recognized. expired or have been transferred and the Company has transferred substan-
tially all risks and rewards of ownership. Separate assets or liabilities are recog-
Non-controlling interests nized if any rights and obligations are created or retained in the transfer.
The Company treats transactions with non-controlling interests as transac- The Company classifies its financial assets in the following categories: at
tions with equity owners of the Company. For purchases from non-controlling amortized cost, at fair value through other comprehensive income (FVOCI),
interests, the difference between any consideration paid and the relevant and at fair value through profit or loss (FVTPL). The classification depends
share acquired of the carrying value of net assets of the subsidiary is recorded on the cash flow characteristics of the asset and the business model in which
in equity. Gains or losses on disposals to non-controlling interests are also it is held.
recorded in equity. Financial assets are initially recognized at fair value plus transaction costs
At acquisition, the Company chooses on an acquisition-by-acquisition basis for all financial assets not carried at fair value through profit or loss. Financial
to measure the non-controlling interest in the acquiree either at fair value or at assets carried at fair value through profit or loss are initially recognized at fair
the non-controlling interest’s proportionate share of the acquiree’s net assets. value, and transaction costs are expensed in the income statement.
The fair values of quoted financial investments and derivatives are based
Joint ventures and associated companies on quoted market prices or rates. If official rates or market prices are not avail-
Joint ventures and associated companies are accounted for in accordance able, fair values are calculated using observable inputs such as market prices
with the equity method. Under the equity method, the investment in the joint for implied volatility, foreign exchange and interest rates. Where there are no
venture or associate is initially recognized at cost and the carrying amount is observable market data, fair values are calculated using other inputs such
increased or decreased to recognize the investor’s share of the profit or loss of as data from transactions, external evidence on exit price or other analytical
the investee after the date of acquisition. Any change in other comprehensive techniques.
income of joint ventures and associated companies are presented as part
of other comprehensive income. If the Company’s interest in an associated Financial assets at amortized cost
company is nil, the Company does not, recognize its part of any future losses. Financial assets are classified as amortized cost if the contractual terms give
Provisions related to obligations for such an interest shall, however, be recog- rise to payments that are solely payments of principal and interest on the
nized in relation to such an interest. principal amount outstanding and the financial asset is held in a business
Investments in associated companies is when the Company has significant model whose objective is to hold financial assets in order to collect contractual
influence and the power to participate in the financial and operating policy cash flows. These assets are subsequently measured at amortized cost using
decisions of the associated company but is not in control or joint control over the effective interest method, minus impairment allowances. Interest income
those policies. Normally, this is the case in voting stock interest, including and gains and losses from financial assets at amortized cost are recognized
effective potential voting rights, which stand at least at 20% but not more in financial income. Interest bearing assets, including cash equivalents, held
than 50%. with the objective to collect contractual cash flows, are classified as amortized
The Company’s share of income before taxes is reported in item “Share in cost assets.
earnings of joint ventures and associated companies,” included in EBIT. This
reflects the fact that these interests are held for operating rather than investing Financial assets at fair value through other comprehensive income
or financial purposes. Ericsson’s share of income taxes related to associ- (FVOCI)
ated companies is reported under the line item “Income tax,” in the income Assets are classified as FVOCI if the contractual terms give rise to payments
statement. that are solely payments of principal and interest on the principal amount
Unrealized gains on transactions between the Company and its joint ven- outstanding and the financial asset is held in a business model whose objec-
tures and associated companies are eliminated to the extent of the Company’s tive is achieved by both collecting contractual cash flows and selling financial
interest in these entities. Unrealized losses are also eliminated unless the assets. These assets are subsequently measured at fair value with changes in
transaction provides evidence of an impairment of the asset transferred. fair value recognized in other comprehensive income (OCI), except for effec-
Shares in earnings of joint ventures and associated companies are included in tive interest, impairment gains and losses and foreign exchange gains and
consolidated equity since they are undistributed. They are reported in retained losses which are recognized in the income statement. Upon derecognition, the
earnings in the balance sheet. cumulative gain or loss in OCI is reclassified to the income statement. Trade
Impairment testing, as well as recognition or reversal of impairment of receivables are classified as FVOCI because the business model is primarily to
investments in each joint venture and associated company, is performed in the collect, with occasional sales.
same manner as for intangible assets other than goodwill. The entire carrying
value of each investment, including goodwill, is tested as a single asset. See Financial assets at fair value through profit or loss (FVTPL)
also description under “Intangible assets other than goodwill.” All financial assets that are not classified as either amortized cost or FVOCI
When the Company ceases to have control, any retained interest in the are classified as FVTPL. Derivatives are classified as FVTPL, unless they are
entity is remeasured to its fair value, with the change in carrying amount designated as hedging instruments for the purpose of hedge accounting.
recognized in profit or loss. The fair value is the initial carrying amount for the Derivatives assets and liabilities are offset where there is legally enforceable
purposes of subsequently accounting for the retained interest in an associate right to set-off, and the Company settles on a net basis with the counterparties.
Note A1, cont’d.

Derivatives assets and liabilities (after offset) are classified as current and Trade payables
non-current based on the maturity of the contract, unless they are intended Trade payables are recognized initially at fair value and subsequently meas-
and expected to be settled within 12 months. ured at amortized cost using the effective interest method. Invoices sold to
Interest-bearing assets including cash collaterals paid in the Parent banks under the Company’s supply chain financing program continue to be
Company are classified as FVTPL as they are either held in a portfolio man- recognized as trade payables as there is no significant change in the nature
aged on a fair value basis or held for short term liquidity purposes. Customer and function of the liabilities.
finance receivables are classified as FVTPL because they are primarily held for
sale. These assets are presented on the balance sheet based on their maturity Cash flow hedge accounting
date (i.e., those with a maturity longer than one year are presented as non- The Company has the following recurring hedge programs:
current). Investments in shares and participations are classified as FVTPL a) Certain customer contracts where a fluctuation in the USD/SEK foreign
and presented as non-current financial assets. exchange (FX) rate would significantly impact net sales. These contracts
Gains or losses arising from changes in the fair values of investment in are multi-year contracts denominated in USD with highly probable pay-
shares and participations are presented in the income statement within other ments at fixed points in time.
operating income. Gains and losses on derivatives are presented in the income b) Highly probable forecasted sales denominated in USD in Ericsson AB
statement as follows. Gains and losses on derivatives used to hedge foreign (‘EAB) for the next 7 to 18 months are hedged on a monthly rolling basis.
exchange risks are presented within net foreign exchange gains and losses.
Gains and losses on interest rate derivatives used to hedge financial assets and For both programs, the Company enters into FX forward contracts that match
liabilities are presented in financial income and financial expense, respectively. the terms of the foreign exchange exposure as closely as possible and desig-
Gains and losses on revaluation of customer financing receivables are pre- nates these as hedging instruments.
sented in the income statement as selling expenses. Gains and losses arising At inception, the Company documents the economic relationship between
from changes in the fair values of all other assets in the FVTPL category are the hedged item and hedging instrument. For FX hedges, the hedge ratio is
presented in the income statement within financial income. usually 1:1. The Company designates changes in forward rates as the hedged
Dividends on equity instruments are recognized in the income statement risk. When applying hedge accounting, the effective portion of changes in
as part of financial income when the Company’s right to receive payments the fair value of derivatives that is designated and qualifies as cash flow
is established. hedges is recognized in OCI. The gain or loss relating to an ineffective por-
tion is recognized immediately in Financial income and expenses, net. Upon
Impairment in relation to financial assets recognition of the hedged net sales, the cumulative amount in cash flow hedge
At each balance sheet date, financial assets classified as either amortized cost reserve is released in the OCI as a reclassification adjustment and recognized
or FVOCI and contract assets are assessed for impairment based on Expected in net sales.
Credit Losses (ECL). ECLs are the differences between all contractual cash In addition to the recurring hedge programs, cash flow hedge is also des-
flows that are due in accordance with the contract and all the cash flows that ignated for certain highly probable acquisition expected to be transacted in
the Company expects to receive, discounted at the original effective interest foreign currencies. FX derivatives are used as hedging instruments, at a hedge
rate. The Company adopts a simplified approach for trade receivables and ratio of 1:1. The Company designates changes in forward rates as the hedged
contract assets whereby allowances are always equal to lifetime ECL. The risks. The accounting is similar to that described for the cash flow hedge
Company has established a provision matrix based on historical credit loss above, except that upon recognition of the hedged acquisition, the cumulative
experience, which has been adjusted for current conditions and expecta- amount in the cash flow hedge reserve is released and recognized as a basis
tions of future economic conditions. The losses are recognized in the income adjustment to the goodwill.
statement. When there is no reasonable expectation of collection, the asset is
written off.
Other amortized costs assets are mainly investment grade assets deemed Employee related
to be low risk hence credit risk is assumed not to have increased significantly For further disclosure, see the notes under section G.
since initial recognition. If the Company identifies evidence of significant
change in credit risk on the assets, lifetime ECL is used to calculate allowance Post-employment benefits
on the asset. Default is deemed if the asset is more than 90 days past due, after Pensions and other post-employment benefits are classified as either defined
which lifetime ECL is also used to calculate allowance on the asset. contribution plans or defined benefit plans. Under a defined contribution plan,
the Company’s only obligation is to pay a fixed amount to a separate entity
Financial liabilities (a pension trust fund) with no obligation to pay further contributions if the
Financial liabilities are recognized when the Company becomes bound to the fund does not hold sufficient assets to pay all employee benefits. The related
contractual obligations of the instrument. actuarial and investment risks fall on the employee. The expenditures for
Financial liabilities are derecognized when they are extinguished, i.e., when defined contribution plans are recognized as expenses during the period when
the obligation specified in the contract is discharged, cancelled or expired. the employee provides service.
Under a defined benefit plan, it is the Company’s obligation to provide
Borrowings agreed benefits to current and former employees. The related actuarial and
Borrowings issued by the Parent Company are designated FVTPL because investment risks fall on the Company.
they are managed on a fair value basis. Changes in fair value are recognized in The present value of the defined benefit obligations for current and former
financial expense, except for changes in fair value due to changes in credit risk employees is calculated using the Projected Unit Credit Method. The discount
which are recognized in other comprehensive income. rate for each country is determined by reference to market yields on high-
Borrowings not issued by the Parent Company and cash collaterals received quality corporate bonds that have maturity dates approximating the terms
are classified as amortized cost liabilities. They are initially recognized at fair of the Company’s obligations. In countries where there is no deep market for
value, net of transaction costs incurred. These borrowings are subsequently such bonds, the market yields on government bonds are used. The calculations
measured at amortized cost; any difference between the proceeds (net of are based upon actuarial assumptions that are updated annually. Actuarial
transaction costs) and the redemption value is recognized in the income state- assumptions are the Company’s best estimate of the variables that determine
ment over the period of the borrowings using the effective interest method. the cost of providing the benefits. When using actuarial assumptions, it is
Borrowings are presented as current liabilities unless the Company has an possible that the actual results will differ from the estimated results or that the
unconditional right to defer settlement of the liability for at least 12 months actuarial assumptions will change from one period to another. These differ-
after the balance sheet date. ences are reported as actuarial gains and losses. They are, for example, caused
Note A1, cont’d.

by unexpectedly high or low rates of employee turnover, changed life expec- Other
tancy, salary changes and changes in the discount rate. Actuarial gains and For further disclosure, see the notes under section H.
losses and gains and losses from remeasurement of plan assets are recognized
in OCI in the period in which they occur. The Company’s net liability for each Income taxes
defined benefit plan consists of the present value of pension commitments Income taxes in the consolidated financial statements include both current
less the fair value of plan assets and is recognized net on the balance sheet. and deferred taxes. Income taxes are reported in the income statement unless
When the result is a net benefit to the Company, the recognized asset is limited the underlying item is reported directly in equity or OCI. For those items, the
to the present value of any future refunds from the plan or reductions in future related income tax is also reported directly in equity or OCI. A current tax liabil-
contributions to the plan, referred to as ‘asset ceiling’. ity or asset is recognized for the estimated taxes payable or refundable for the
Interest cost on the defined benefit obligation and interest income on plan current year or prior years.
assets is calculated as a net interest amount by applying the discount rate Current income tax is measured at the tax rate that is expected to be applied
to the net defined benefit liability. Current service cost relating to employee based on the tax laws that have been enacted or substantially enacted for the
service is recognized in the profit and loss in the period. Past service cost relat- reporting period in the corresponding jurisdiction.
ing to plan amendments or curtailment is recognized immediately in the period Deferred tax is recognized for temporary differences between the book
it occurs. Swedish special payroll tax is accounted for as a part of the pension values of assets and liabilities and their tax values for unused tax loss carry-
cost and the pension liability respectively. forwards and for unused tax credits. A deferred tax asset is recognized only to
Payroll taxes related to actuarial gains and losses are included in determin- the extent that it is probable that future taxable profits will be available against
ing actuarial gains and losses, reported under OCI. which the deductible temporary differences, tax loss carry-forwards and tax
In note A2, “Critical accounting estimates and judgments” further disclosure credits can be utilized. In the recognition of income taxes, the Company offsets
is presented in relation to key sources of estimation uncertainty. current tax receivables against current tax liabilities and deferred tax assets
against deferred tax liabilities in the balance sheet, when the Company has a
Share-based compensation to employees and the Board of Directors legal right to offset these items and the intention to do so. Deferred tax is not
Share-based compensation is related to remuneration to employees, including recognized for the following temporary differences: goodwill not deductible for
key management personnel and the Board of Directors and could be settled tax purposes, for the initial recognition of assets or liabilities that affect neither
either in shares or cash. accounting nor taxable profit and for differences related to investments in
Under IFRS, a company shall recognize compensation costs for share-based subsidiaries when it is probable that the temporary difference will not reverse
compensation programs based on a measure of the value to the company of in the foreseeable future.
the services received under the plans. For share-settled plans, a corresponding Deferred tax is measured at the tax rate that is expected to be applied to
increase in equity shall be recognized. the temporary differences when they reverse, based on the tax laws that have
As from 2017 the granted share-based programs are cash-settled, except been enacted or substantively enacted by the reporting date. An adjustment
for programs for the Executive Team. Those programs are share-settled. of deferred tax asset/liability balances due to a change in the tax rate is
recognized in the income statement, unless it relates to a temporary difference
Share-settled plans earlier recognized directly in equity or OCI, in which case the adjustment is also
Compensation costs are recognized during the vesting period, based on the recognized in equity or OCI. As prescribed in IFRIC 23, only uncertainty over
fair value of the Ericsson share at the grant date, as well as considering perfor- income tax treatment is considered if and when recognizing and measuring
mance and market conditions. Examples of performance conditions could be income tax items in the financial statements.
revenue and profit targets while market conditions relate to the development The measurement of deferred tax assets involves judgment regarding
of the Parent Company’s share price in relation to a group of reference shares. the deductibility of costs not yet subject to taxation and estimates regarding
All plans have service conditions and some of them have performance or sufficient future taxable income to enable utilization of unused tax losses and/
market conditions. or tax credits in different tax jurisdictions. All deferred tax assets are subject to
For share-settled plans, a corresponding increase in equity shall be recog- annual review of probable utilization.
nized. The reason for this IFRS accounting principle is that compensation cost In note A2, “Critical accounting estimates and judgments,” further disclosure
for a share-settled program is a cost with no direct cash flow impact. is presented in relation to (i) key sources of estimation uncertainty and (ii) the
For further detailed information, see note G3 “Share-based compensation.” decision made in relation to accounting policies applied.
Cash-settled plans Earnings per share

The total compensation expense for a cash-settled plan is equal to the pay- Basic earnings per share are calculated by dividing net income attributable
ments made to the employees at the date of the end of the service period. to owners of the Parent Company by the weighted average number of shares
The fair value of the synthetic shares, being the cash equivalents of shares, is outstanding (total number of shares less treasury shares) during the year.
therefore reassessed and amended during the service period, and accounted Diluted earnings per share are calculated by dividing net income attributable
for as a provision. Otherwise the accounting is similar to a share-settled plan. to owners of the Parent Company, when appropriately adjusted by the sum
For further detailed information, see note G3 “Share-based compensation.” of the weighted average number of ordinary shares outstanding and dilutive
potential ordinary shares. Potential ordinary shares are treated as dilutive
Compensation to the Board of Directors when, and only when, their conversion to ordinary shares would decrease
Since 2008, the annual general shareholders meeting of the Parent Company earnings per share.
has each year resolved that the Board members shall be able to choose to
receive part of the Board remuneration in the form of synthetic shares. The Statement of cash flows
program gives non-employee Directors elected by the General Meeting of The statement of cash flows is prepared in accordance with the indirect
shareholders a right to receive part of their remuneration as a future payment method. Cash flows in foreign subsidiaries are translated at the average
of an amount which corresponds to the market value of a share of class B in exchange rate during the period. Payments for subsidiaries acquired or
the Parent Company at the time of payment, as further disclosed in note G3, divested are reported as cash flow from investing activities, net of cash and
“Share-based compensation.” The cost for cash-settlements is measured and cash equivalents acquired or disposed of respectively. Movements in cash col-
recognized based on the estimated costs for the program on a pro-rata basis laterals received and bank borrowings less than 3 months (used for short term
during the service period, being one year. The estimated costs are remeasured liquidity purposes) are presented net within “Other financing activities”.
during and at the end of the service period.
Note A1, cont’d.
Cash and cash equivalents consist of cash, bank, and interest-bearing The IASB has issued the following new standard with effective date
securities that are highly liquid monetary financial instruments with a remain- January 1, 2023:
ing maturity of three months or less at the date of acquisition. – IFRS 17 Insurance contracts (including the June 2020 and December 2021
amendments to IFRS 17, which establishes principles for the recognition,
Government grants measurements, presentation and disclosure of insurance contracts.)
Government grants are recognized when there is reasonable assurance that
the Company will comply with the conditions attached to them and the grants The IASB has also issued the following amendments with effective date
will be received. Government grants received are mainly recognized in the January 1, 2023:
consolidated income statement as a deduction against the related expense. – Amendments to IAS 1 Presentation of financial statements – Classification
of liabilities as current or non-current
New accounting standards and interpretations – Amendments to IAS 1 Presentation of Financial Statements and IFRS
On January 1, 2022, the following amendments issued by the IASB were Practice Statement 2 – Disclosure of Accounting policies
adopted with no material impact on the results and financial position of the – Amendments to IAS 8 Accounting policies, Changes in Accounting
Company. Estimates and Errors – Definition of Accounting Estimates
– IAS 16: Property, Plant and Equipment (PP&E) – Proceeds before Intended – Amendments to IAS 12 Income Taxes – Deferred Tax related to Assets and
Use Liabilities arising from a Single Transaction.
– IAS 37: Onerous Contracts – Cost of Fulfilling a Contract
– Annual Improvements to IFRS Standards 2018–2020 The Company has finalized the evaluation of any impact on financial results
– IFRS 3: Reference to the Conceptual Framework or position from this standard and these amendments and concluded that
they will not have a material impact on the results and financial position of the
A number of new standards, amendments to standards and interpretations Company.
are not yet effective for the year ended December 31, 2022 and have not been
applied in preparing these consolidated financial statements.
A2 Critical accounting estimates and judgments

The preparation of financial statements and application of accounting Judgments made in relation to accounting policies applied
standards often involve management’s judgment and the use of estimates and Management applies judgment when assessing the customer’s ability and
assumptions deemed to be reasonable at the time they are made. However, intention to pay in a contract. The assessment is based on the latest customer
other results may be derived with different judgments or using different credit standing and the customer’s past payment history. This assessment may
assumptions or estimates, and events may occur that could require a material change during the contract execution, and if there is evidence of deterioration
adjustment to the carrying amount of the asset or liability affected. Examples in the customer’s ability or intention to pay, then no further revenue shall be
of this could occur at change of strategy or restructuring. Judgments for recognized until the collectability criteria is met. Conversely, this assessment
accounting policies to be applied as well as estimates may also be impacted may also change favorably over time, upon which revenue shall now be recog-
due to this. Following are the most important accounting policies subject nized on a contract that did not initially meet the collectability criteria.
to such judgments and the key sources of estimation uncertainty that the Management also applies judgment in assessing criteria for contract combi-
Company believes could have the most significant impact on the reported nation. Master purchase agreement can cover a number of different businesses
results and financial position. with the same customer and judgment is applied to assess if prices relating to
the different businesses are highly dependent, in which case, contracts relating
The information in this note is grouped as per: to such businesses shall be combined and the total transaction price allocated
– Key sources of estimation uncertainty to each performance obligation based on estimated stand-alone selling prices.
– Judgments management has made in the process of applying the Judgment can also be applied on contract amendments related to prior per-
Company’s accounting policies. formance obligations, in which case, the judgment is related to assess if part
of the transaction price shall be applied retrospectively.
Revenue recognition Revenue for standard products shall be recognized when control over the
Key sources of estimation uncertainty equipment is transferred to the customer at a point in time. This assessment
The Company uses estimates and judgments in determining the amount and shall be viewed from a customer’s perspective considering indicators such as
timing of revenue particularly when determining the transaction price and its transfer of titles and risks, customer acceptance, physical possession, and bill-
allocation to performance obligations identified under the contract. ing rights. Judgment may be applied in determining whether risk and rewards
Transaction price may consist of variable elements such as discounts, have been transferred to the customer and whether the customer has accepted
performance related price and contract penalties. Transaction price, including the products. Often all indicators of transfer of control are assessed together
variable considerations, is estimated at the commencement of the contract and an overall judgment formed as to when transfer of control has occurred in
(and periodically thereafter). Judgment is used in the estimation process a customer contract.
based on historical experience with the type of business and customer. This
includes assessment of price concession based on latest available information Impairment allowance on receivables and contract assets
on contract negotiations that could have retrospective impact on prices for Key sources of estimation uncertainty
products and services already ordered or delivered. The Company monitors the financial stability of its customers, the environ-
Revenue is allocated to each performance obligations by reference to their ments in which they operate and historical credit losses. This is combined
standalone selling prices. The Company considers that an adjusted market with expectations of future economic conditions to calculate expected credit
assessment approach should be used to estimate stand-alone selling prices for losses (ECLs). ECLs on trade receivables and contract assets are assessed
its products and services for the purposes of allocating transaction price. These using a provision matrix based on days past due for groupings of customers
estimates comprised of prices set for similar customers and circumstances, that have historically had similar loss patterns. The amount of ECLs is sensitive
adjusted to reflect appropriate profit margins for the market. Estimates are to changes in the circumstances of our customers and the environments in
used to determine discounts that relate specifically to each performance obli- which they operate as well as management’s expectations of future economic
gation, thus impacting the stand-alone selling price. conditions. Actual credit losses may be higher or lower than expected, therefore
Note A2, cont’d.

are regularly monitored to ensure the provision matrix is updated if required. may have an adverse effect on the right-of-use assets. The Group estimates
Management review of current and future conditions is based on latest observ- its incremental borrowing rate to measure lease liabilities at the present
able economic updates and our internal assessment of the potential impact value of lease payments as the interest rate implicit in the lease is not readily
on our customers. Total allowances for expected credit losses as of December determinable. An incremental borrowing rate is used in discounting of the lease
31, 2022 were SEK 2.5 (2.4) billion or 4% (4%) of gross trade receivables and liabilities and requires judgment to reflect the rate of interest that would have
contract assets. For further detailed information see note F1 “Financial risk to be paid to borrow over a similar term, and with a similar security, the funds
management”. necessary to obtain an asset of a similar value to the right-of-use asset in a
Customer financing receivables are valued at fair value on an individual similar economic environment.
basis. When market pricing is not available, an internal valuation model is
applied considering external credit rating, political and commercial risks and Provisions and contingent liabilities
bank pricing. Regular monitoring of customer behavior is also a part of the Key sources of estimation uncertainty
internal assessment. The key sources of estimation uncertainty relating to provisions are the assess-
ment of the probability of outflow as well as whether a reliable estimate can be
Inventory valuation made.
Key sources of estimation uncertainty Supplier-related provisions require a reliable business forecast to estimate
Inventories are valued at the lower of cost and net realizable value. Estimates the expected usage of the committed inventory purchases. Therefore, estima-
are required in relation to forecasted sales volumes and inventory balances. tion uncertainty exists regarding the forecast and expected usage to assess the
In situations where excess inventory balances are identified, estimates of net future obsolescence risk and the provision amount. Other provisions include a
realizable values for the excess volumes are made. Inventory allowances for provision relating to a potential deferred prosecution agreement breach reso-
estimated losses as of December 31, 2022, amounted to SEK 5.7 (3.6) billion lution with the United States Department of Justice (DOJ). On March 2, 2023,
or 11% (9%) of gross inventory. For further detailed information, see note B5 the Company reached a resolution with the DOJ (the DOJ Plea Agreement) and
“Inventories.” agreed to pay a fine of approximately SEK 2.2 billion in line with the provision
made in the fourth quarter 2022 for such resolution. The Company’s internal
Acquired customer relationships, intellectual property rights and other investigation and its cooperation with authorities in relation to the matters
intangible assets, including goodwill discussed in the 2019 internal Iraq investigation report remain open and ongo-
Key sources of estimation uncertainty ing. Other sources for estimation uncertainty are patent and other litigations
At initial recognition, future cash flows are estimated, to ensure that the initial and disputes which may continue over several years and therefore there is
carrying values do not exceed the expected discounted cash flows for the items uncertainty in the final outcome and expected settlement.
of this type of assets. After initial recognition, impairment testing is performed The same estimation uncertainties described above for provisions exist for
whenever there is an indication of impairment, in addition, goodwill impair- contingent liabilities. Contingent liabilities include obligations that are not
ment testing is performed once per year. Negative deviations in actual cash recognized because their amount cannot be measured reliably or because
flows compared to estimated cash flows as well as new estimates that indicate settlement is not probable. Contingent liabilities mainly relate to estimates for
lower future cash flows might result in recognition of impairment charges. litigation, tax litigation, losses on customer contracts and pension guarantees.
Impairment losses for intangible assets and goodwill amounted to SEK –0.1 As the contingent liabilities will only be confirmed in the future based on the
(–0.3) billion for 2022. resolution of the litigation or dispute, management is required to estimate
At December 31, 2022, the carrying amount of acquired intangible assets the possibility of an adverse outcome occurring and the potential settlement
amounted to SEK 110.9 (42.0) billion, including goodwill of SEK 84.6 (38.2) value. A contingent liability may exist at year end, and/or expense (provision)
billion. may have to be recognized at a later stage based on the latest conditions and
For further discussion on goodwill, see note A1 “Significant accounting progress of the potential obligation.
policies.” Estimates related to acquired intangible assets are based on similar Provisions and contingent liabilities are regularly reassessed based on the
assumptions and risks as for goodwill. For more information, see note C1 latest information available and are adjusted to reflect the Company’s best
“Intangible assets.” estimate of the eventual outcome. This means there may be changes to the
values over time.
Judgments made in relation to accounting policies applied At December 31, 2022, provisions amounted to SEK 11.6 (9.5) billion.
At initial recognition and subsequent remeasurement, management judg- For further detailed information, see note D1 “Provisions.”
ments are made, both for key assumptions and regarding impairment At December 31, 2022, contingent liabilities disclosed amounted to
indicators. SEK 3.3 (1.6) billion. For further detailed information, see note D2 “Contingent
Management judgment is required for the purchase price allocation. For liabilities” including a description of contingent liabilities which cannot be
example when determining the fair values of acquired intangible assets. quantified.
Judgment is also required in the definition of cash-generating units for impair-
ment testing purposes. Other judgments might result in significantly different Judgments made in relation to accounting policies applied
results and financial position in the future. The nature and type of risks for these provisions and contingencies differ
and management’s judgment is applied regarding the nature and extent of
Leases obligations in deciding on the probability of the outcome. Further judgment is
Key sources of estimation uncertainty required in determining the value of the present or possible obligation as this is
Estimation uncertainty exists due to possible future changes in business based on the Company’s best estimate as to the expected future expenditure
operations, which may impact the actual lease term of a contract. For example, required to settle the obligation.
an early break due to business downturn. The determination of the rates at
which the lease liabilities are discounted is another uncertainty and this affects Supplier payments program
the lease liability and interest expense. This rate determines the discounting of Judgments made in relation to accounting policies applied
lease liabilities and right-of-use assets recognized in the statement of financial With the aim of increasing working capital efficiency, Ericsson continuously
position, as well as the split between interest expense and depreciation recog- renegotiates payment days with suppliers. The negotiations with suppliers
nized in the income statement over the lease term. For more information, see for payment days is an integral part of the procurement activities. Some sup-
note C3 “Leases.” pliers sell their Ericsson receivables to banks and Ericsson can if requested
introduce a bank interested in purchasing such receivables. Ericsson does not
Judgments made in relation to accounting policies applied pay or receive a fee, nor provide additional security under the program. This
At initial recognition and subsequent remeasurement, management estimates arrangement does not lead to any significant change in the nature or function
are made for the term applied in a lease contract. The outcome of these of Ericsson’s liabilities because the supplier invoices are considered part of
estimates may turn out not to match the actual outcome of the lease and working capital used in Ericsson’s normal operating cycle. The maximum credit
Note A2, cont’d.

period agreed with any supplier does not exceed six months. Therefore, these made for any expected changes in tax legislation with a potential material
liabilities remain classified as trade payables with separate disclosure in the impact.
notes, see note B8 “Trade payables.” The largest amounts of tax loss carry-forwards are reported in Sweden,
with an indefinite period of utilization (i.e. with no expiry date), except for
Pensions and other post-employment benefits withholding taxes that expire after five years. For further information, see
Key sources of estimation uncertainty note H1 “Taxes.”
Accounting for the costs of defined benefit pension plans and other applicable At December 31, 2022, the value of deferred tax assets amounted to
post-employment benefits is based on actuarial valuations, relying on key SEK 19.4 (23.1) billion. The deferred tax assets related to loss carry-forwards
estimates for discount rates, future salary increases, employee turnover rates are reported as non-current assets.
and mortality tables. The discount rate assumptions are based on rates for
high-quality fixed-income investments with durations as close as possible to Accounting for income tax, value added tax, and other taxes
the Company’s pension plans. In countries where there is not a deep market Key sources of estimation uncertainty
in high-quality corporate bonds, the market yields on government bonds shall Accounting for these items is based upon evaluation of taxable income, value
be applied. Judgment is applied in determining the depth of the high-quality added and other tax rules in all jurisdictions where the profits arise. The total
corporate bond market in each country. The impact of applying an alternative complexity of rules related to taxes and the accounting for these require man-
discount rate based on Swedish covered bonds is disclosed in note G1, “Post- agement’s involvement in judgments regarding classification of transactions
employment benefits.” At December 31, 2022, defined benefit obligations and in estimates of probable outcomes of claimed deductions and/or disputes.
for pensions and other post-employment benefits amounted to SEK 83.7 OECD guidelines on Pillar I (redistribution of excess profits over a certain
(113.5) billion and fair value of plan assets to SEK 60.5 (81.4) billion. For more margin to countries in proportion to local sales) and Pillar II (global minimum
information on estimates and assumptions, see note G1 “Post-employment effective tax rate) are still not enacted in Sweden or other relevant countries´
benefits.” tax laws. The likely effects of these proposals are being monitored, but it is not
yet clear whether there will be a material impact on the Group´s results.
Accounting for deferred tax
Key sources of estimation uncertainty
Deferred tax assets and liabilities are recognized for temporary differences
and for tax loss carry-forwards and for tax credits. The valuation of temporary
differences, tax loss carry-forwards and tax credits is based on management’s
estimates of future taxable profits in different tax jurisdictions against which
the temporary differences, loss carry-forwards and tax credits may be utilized.
These estimates are primarily based on business plans for the Company´s
estimated outcome of future taxable profits. As prescribed in IFRIC 23
“Uncertainty over Income Tax Treatments” estimates are made in relation to
uncertain tax positions in a limited number of countries. Estimates are also
Section B – Business and operations
B1 Segment information
New segment structure Segment Enterprise comprises of three Business Areas offering solutions
The Company started to report financial information according to the new primarily to Enterprise: Global Communications Platform (Vonage) including
segment structure as of the third quarter 2022. The financial information has cloud-based Unified Communications as a Service (UCaaS), Contact Center
been restated for the new reporting structure. as a Service (CCaaS) and Communications Platform as a Service (CPaaS).
Enterprise Wireless Solutions including private wireless networks and wireless
Segments
WAN (Cradlepoint) pre-packaged solutions. Technologies and New Businesses
When determining Ericsson’s operating segments, consideration has been
including mobile financial services, security solutions and advertising services.
given to the financial reporting reviewed by the Chief Operating Decision
Maker (CODM). Markets and what type of customers the products and services
Other includes media businesses as well as other non-allocated business.
aim to attract has been considered, as well as the distribution channels they
Segment-level information has also been presented for Other.
are sold through. Commonality regarding technology, research and develop-
ment has also been taken into account. To best reflect the business focus and Market areas
to facilitate comparability with peers, three operating segments are presented; The market areas are the Company’s primary sales channel with the responsi-
– Networks bility to sell and deliver customer solutions.
– Cloud Software and Services The Company operates worldwide and reports its operations divided into
– Enterprise five geographical market areas:
– Europe and Latin America
Segment Networks offers multitechnology capable Radio Access Network – Middle East and Africa
(RAN) solutions for all network spectrum bands, including integrated high- – North America
performing hardware and software. The offering also includes a cloud-native – North East Asia
RAN portfolio, a transport portfolio, passive and active antenna solutions – South East Asia, Oceania and India.
and a complete service portfolio covering network deployment and support.
82% (82% in 2021 and 2020 respectively) of the IPR licensing revenues are Segment Enterprise has a multi-channel go-to-market distribution model.
reported as part of segment Networks. Sales from segment Enterprise and Other, and the IPR licensing revenues are
externally reported as market area Other.
Segment Cloud Software and Services provides solutions for core networks,
business and operational support systems, network design and optimization, Major customers
and network managed services. The focus is to enable communications service The Company derives most of its sales from large, multi-year agreements with
providers to succeed in their transition to cloud native, intelligent and auto- a limited number of significant customers. Out of a customer base of more
mated networks and operations. 18% (18% in 2021 and 2020 respectively) than 500 customers, mainly consisting of communications service providers,
of the IPR licensing revenues are reported as part of segment Cloud Software the ten largest customers accounted for 50% (49% in 2021 and 50% in 2020)
and Services. of net sales. The largest customer accounted for approximately 14% (13% in
2021 and 13% in 2020) and the second largest customer accounted for 10%
(9% in 2021 and 10% in 2020) of net sales in 2022. These customers were
reported under segment Networks and Cloud Software and Services.
Segment information 2022

Cloud Software Total
Networks and Services Enterprise Other Segments Group
Segment sales 193,468 60,524 15,380 2,174 271,546 271,546
Net sales 193,468 60,524 15,380 2,174 271,546 271,546
Gross income 86,368 20,106 6,946 –125 113,295 113,295

Gross margin (%) 44.6% 33.2% 45.2% –5.7% 41.7% 41.7%
Earnings (loss) before financial items and income tax (EBIT) 1) 38,512 –1,689 –6,234 –3,569 27,020 27,020
EBIT margin (%) 19.9% –2.8% –40.5% –164.2% 10.0% 10.0%
Financial income and expenses, net –2,411
Income after financial items 24,609
Income tax –5,497
Net income 19,112
Other segment items

Share in earnings of JV and associated companies 30 27 – –40 17 17
Amortizations –1,424 –122 –2,019 –12 –3,577 –3,577
Depreciations –4,073 –1,792 –515 –185 –6,565 –6,565
Impairment losses –211 –91 –87 –12 –401 –401
Restructuring charges –146 –96 –157 – –399 –399
Gains/losses on investments and sale of operations 253 – 111 –108 256 256
1) Segment Other includes a provision of SEK –2.3 billion in relation to a potential resolution with the United States Department of Justice regarding, previously announced, non-criminal, alleged breaches under the
deferred prosecution agreement (DPA), including estimated expenses for extended compliance monitorship,noting that the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and
agreed to pay a fine of approximately SEK 2.2 billion in line with the provision made in the fourth quarter 2022, and SEK –1.0 billion due to the d
ivestment of IoT and other portfolio adjustments.
Note B1, cont’d.

Segment sales 167,838 56,224 6,236 2,016 232,314 232,314
Net sales 167,838 56,224 6,236 2,016 232,314 232,314
Gross income 78,869 18,829 2,891 160 100,749 100,749

Gross margin (%) 47.0% 33.5% 46.4% 7.9% 43.4% 43.4%
Earnings (loss) before financial items and income tax (EBIT) 37,266 –2,234 –2,965 –287 31,780 31,780
EBIT margin (%) 22.2% –4.0% –47.5% –14.2% 13.7% 13.7%
Financial income and expenses, net –2,530
Income tax –6,270
Net income 22,980
Other segment items

Share in earnings of JV and associated companies 40 72 – –372 –260 –260
Amortizations –1,169 –508 –830 – –2,507 –2,507
Depreciations –3,764 –1,568 –430 –189 –5,951 –5,951
Restructuring charges –262 –254 –16 –17 –549 –549
Gains/losses on investments and sale of operations 14 –51 998 – 961 961

Segment sales 165,978 59,597 4,792 2,023 232,390 232,390
Net sales 165,978 59,597 4,792 2,023 232,390 232,390
Gross income 72,413 19,496 1,767 48 93,724 93,724

Gross margin (%) 43.6% 32.7% 36.9% 2.4% 40.3% 40.3%
Earnings (loss) before financial items and income tax (EBIT) 30,851 –796 –1,935 –312 27,808 27,808
EBIT margin (%) 18.6% –1.3% –40.4% –15.4% 12.0% 12.0%
Financial income and expenses, net –596
Income tax –9,589
Net income 17,623
Other segment items

Share in earnings of JV and associated companies 37 33 – –368 –298 –298
Amortizations –775 –612 –602 – –1,989 –1,989
Depreciations –3,764 –1,632 –407 –186 –5,989 –5,989
Restructuring charges –746 –277 –267 –16 –1,306 –1,306
Gains/losses on investments and sale of operations –129 17 1 –30 –141 –141
Products and Services by Segments

Networks and Services Enterprise Other Segments
2022
Products 147,997 21,105 4,923 –1 174,024
Services 45,471 39,419 10,457 2,175 97,522
Total 193,468 60,524 15,380 2,174 271,546
2021
Products 128,951 19,267 3,955 24 152,197
Services 38,887 36,957 2,281 1,992 80,117
Total 167,838 56,224 6,236 2,016 232,314
2020
Products 122,229 20,317 3,735 –95 146,186
Services 43,749 39,280 1,057 2,118 86,204
Total 165,978 59,597 4,792 2,023 232,390
Note B1, cont’d.
Market area 2022

Non-current
Net sales assets 5)
Cloud Software
Networks and Services Enterprise Other Total Total
South East Asia, Oceania and India 3) 23,695 9,179 77 – 32,951 999
North East Asia 4) 22,488 4,015 230 – 26,733 3,385
North America 2) 81,917 13,362 115 – 95,394 41,065
Europe and Latin America 1) 44,644 21,638 508 – 66,790 93,612
Middle East and Africa 11,707 10,472 392 – 22,571 –804
Other 1) 2) 3) 4) 6) 9,017 1,858 14,058 2,174 27,107 –
Total 193,468 60,524 15,380 2,174 271,546 138,257
1) Of which in EU 6) 35,859 92,167
Of which in Sweden 6) 3,239 88,057
2) Of which in the United States 6) 109,709 39,906
3) Of which in India 6) 10,957 519
4) Of which in Japan 6) 9,965 187
4) Of which in China 6) 10,523 2,068
5) Total non-current assets excluding financial instruments, deferred tax assets, and post-employment benefit assets.
6) Including IPR licensing revenue reported under Market area Other which is allocated based on the country location of the customer. Other sales are attributed to countries based on the destination of products or
services delivered.
Market area 2021

Non-current
Net sales assets 5)
Cloud Software
South East Asia, Oceania and India 3) 20,299 8,493 37 – 28,829 1,010
North East Asia 4) 24,464 4,405 252 – 29,121 2,700
North America 2) 66,464 10,913 79 – 77,456 11,971
Middle East and Africa 10,743 9,726 316 – 20,785 209
Other 1) 2) 3) 4) 6) 7,197 1,506 5,132 2,016 15,851 –
Total 167,838 56,224 6,236 2,016 232,314 68,031
1) Of which in EU 6) 31,307 50,428
4) Of which in China 6) 10,078 2,202
services delivered.
Market area 2020

Non-current
Net sales assets 5)
Cloud Software
South East Asia, Oceania and India 3) 21,464 8,547 37 – 30,048 812
North East Asia 4) 27,120 5,955 259 – 33,334 2,648
North America 2) 62,199 11,508 68 – 73,775 12,749
Middle East and Africa 13,281 9,676 341 – 23,298 140
Other 1) 2) 3) 4) 6) 8,657 1,795 3,715 2,023 16,190 –
Total 165,978 59,597 4,792 2,023 232,390 66,244
1) Of which in EU 6) 29,501 48,133
4) Of which in China 6) 18,745 2,136
services delivered.
B2 Net sales B5 Inventories

Net sales Inventories
2022 2021 2020 2022 2021
Hardware 119,215 106,399 96,294 Raw materials, components, consumables
Software 54,809 45,798 49,892 and manufacturing work in progress 16,873 11,584
Services 97,522 80,117 86,204 Finished products 14,376 11,207
Net sales 271,546 232,314 232,390 Contract work in progress 14,597 12,373
Of which IPR licensing revenues 10,399 8,134 9,975 Inventories, net 45,846 35,164
Of which export sales from Sweden 153,833 140,898 132,269
The amount of inventories recognized as expense and included in Cost of sales
B3
was SEK 68,838 (60,362) million.
Expenses by nature Contract work in progress consists of costs incurred to date on customer
projects where the performance obligations are yet to be fully delivered. These
Expenses by nature costs will be recognized as cost of sales when the related revenue is recognized
in the income statement.
2022 2021 2020
The Company has had to increase its buffer of vital components to mitigate
Goods and services 147,023 119,787 120,102
the supply chain issues affecting electronic components globally. Inventory
Employee remuneration 89,191 77,462 74,645
allowance is reviewed periodically to ensure obsolete components are
Amortizations and depreciations 10,142 8,458 7,978
adequately provided for.
Impairments, obsolescence allowances The Company’s current climate-related strategy’s aim to have a portfolio
and revaluation 4,383 1,456 3,082
of energy performance products may affect recoverability of inventories as
Inventory increase, net –7,738 –5,565 –44
customers push for fast substitution and uptake of volume towards the most
Additions to capitalized development –1,720 –962 –817
energy efficient products. The current radio product offering largely reflects the
Expenses charged to cost of sales and
operating expenses 241,281 200,636 204,946
latest energy efficient technologies and although ongoing improvements are
expected in future, these factors have been included in the inventory obsoles-
Total restructuring charges in 2022 were SEK 0.4 (0.5) billion. Restructuring cence risk assessment at year end.
charges are included in the expenses presented above. Reported amounts are net of obsolescence allowances of SEK 5,716 (3,676)
million.
Restructuring charges by function
Movements in obsolescence allowances
2022 2021 2020
2022 2021
Cost of sales 195 273 725
Opening balance 3,676 3,627
R&D expenses 54 137 411
Additions 3,927 1,378
Selling and administrative expenses 150 139 170
Utilization –2,115 –1,457
Total restructuring charges 399 549 1,306
Translation differences 228 128
Closing balance 5,716 3,676
B4 Other operating income and expenses

Physical risks of climate changes on manufacturing facilities have also been
Other operating income and expenses identified as a potential climate-related risk to the Company’s operations,
although these risks are mostly mitigated through having appropriate insur-
2022 2021 2020
ance policies for damage to inventories and fixed assets, as well as potential
Other operating income
business interruptions, combined with having a globally spread production
Gains on sales of intangible assets
and PP&E 85 13 64 capability.
Gains on investments and sale
of operations 1) 701 1,199 347
Other operating income 445 314 750
Total other operating income 1,231 1,526 1,161
Other operating expenses

Losses on sales of intangible assets
and PP&E –54 –3 –
Losses on investments and sale
of operations 1) –445 –238 –488
Impairment of goodwill 2) – –112 –
Other operating expenses 3) –3,994 –811 –11
Total other operating expenses –4,493 – 1,164 –499
1) Information about divestments is presented in note E2 “Business combinations.”
2) For more information about the impairment of goodwill, see note C1 “Intangible assets.”
3) 2022 includes a provision of SEK –2.3 billion in relation to a potential resolution with the United
States Department of Justice regarding previously announced, non-criminal, alleged breaches
under the deferred prosecution agreement (DPA), including estimated expenses for the extended
compliance monitorship, noting that the Company, on March 2, 2023, entered into the DOJ Plea
Agreement with the DOJ and agreed to pay a fine of approx. SEK 2.2 billion, and charges of SEK –1.0
billion related to the divestment of IoT and other portfolio a
djustments.
B6 Customer contract related balances B7 Other current receivables

Trade receivables, customer finance, contract assets, contract liabilities and Other current receivables
deferred sales commissions 2022 2021
2022 2021 Prepaid expenses 2,506 2,290
Customer finance credits 1) 5,370 3,287 Advance payments to suppliers 473 426
Trade receivables 2) 48,413 45,399 Derivative assets 1) 1,121 317
Contract assets 9,843 10,506 Other taxes 2) 3,349 3,022
Contract liabilities 42,251 32,834 Other 2,239 1,601
Deferred sales commissions 3) 754 316 Total 9,688 7,656
1) Of the total Customer finance credits balance, SEK 4,955 (2,719) million is current 1) See also note F1 “Financial risk management.”
2) Total trade receivables include SEK 70 (0) million relating to associated companies. 2) Other taxes mainly includes VAT receivables.
3) Of the total Deferred sales commissions balance SEK 345 (316) million is current. The non-current
balance is presented within Other financial assets, non-current (see note F3 “Financial assets, non-
current”) and the current balance is presented within Other current receivables (see note B7 “Other
current receivables”). B8 Trade payables
Deferred sales commissions amortized in the year is SEK 288 (143) million. Trade payables
There were no material impairment losses incurred in 2022 and 2021. 2022 2021
For information about credit risk and impairment of customer contract
Trade payables to associated companies and
related balances, see note F1, “Financial risk management.” joint ventures 179 115
Trade payables, excluding associated companies
Revenue recognized in the period and joint ventures 1) 38,258 35,569
2022 2021 Total 38,437 35,684
Revenue recognized relating to the opening contract 1) Of the trade payable amount SEK 9.7 (8.3) billion relates to supplier invoices under Ericsson’s supplier
liability balance 25,601 19,745 payments program.
Revenue recognized relating to performance obligations
B9
satisfied, or partially satisfied, in prior reporting periods –7 – 186
Other current liabilities
Revenue recognized relating to performance obligations satisfied, or partially
satisfied, in prior reporting periods is a net adjustment that relates to contract Other current liabilities
modifications, retrospective price adjustments, settlement and adjustments to 2022 2021
variable consideration based on actual measurements concluded in the period. Accrued interest 335 177
Accrued expenses 35,896 30,837
Transaction price allocated to the remaining performance obligations Of which employee-related 19,630 15,380
2022 2021 Of which supplier-related 9,849 9,100
Aggregate amount of transaction price allocated Of which other 1) 6,417 6,357
to unsatisfied, or partially unsatisfied, performance Derivative liabilities 2) 2,621 762
obligations 169,609 138,234
Other 3) 7,341 6,145
Total 46,193 37,921
The Company expects that the transaction price allocated to the remaining 1) Major balance relates to accrued expenses for customer projects.
performance obligations will be converted into revenue in accordance with the 2) See also note F1 “Financial risk management.”
following approximation: 65% in 2023, 15% in 2024 and remaining 20% in 3) Includes items such as VAT and other payroll deductions.
2025 and beyond.
Section C – Long-term assets
C1 Intangible assets
Intangible assets
2022 2021
Customer relationships, Customer relationships,
Capitalized IPR 1), Capitalized IPR 1),
development and other intangible development and other intangible
expenses Goodwill assets expenses Goodwill assets
Cost
Opening balance 19,158 44,963 55,936 18,049 41,592 53,913
Additions 1,720 – 126 962 – 131
Balances regarding acquired/divested
business 2) – 40,881 23,451 – 725 –95
Disposals – – –452 – – –18
Translation differences 218 5,070 3,793 147 2,646 2,005
Closing balance 21,096 90,914 82,854 19,158 44,963 55,936
Accumulated amortizations
Opening balance –11,885 – –44,456 –10,447 – –41,721
Amortizations –1,586 – –1,991 –1,343 – –1,164
Balances regarding divested
business 2) – – 22 – – –
Disposals – – 452 – – 18
Translation differences –175 – –2,797 –95 – –1,589
Closing balance –13,646 – –48,770 –11,885 – –44,456
Accumulated impairment losses

Opening balance –3,745 –6,759 –7,650 –3,745 –6,647 –7,387
Balances regarding divested
business 2) – 415 81 – – –
Impairment losses – – –61 – –112 –201
Translation differences – – –114 – – –62
Closing balance –3,745 –6,344 –7,744 –3,745 –6,759 –7,650
Net carrying value 3,705 84,570 26,340 3,528 38,204 3,830
1) Intellectual property rights.
2) For more information on acquired/divested businesses, see note E2 “Business combinations.”
The total goodwill for the Company is SEK 84.6 (38.2) billion and is allocated Goodwill allocation
to the operating segments Networks, with SEK 28.5 (25.8) billion, Cloud Goodwill from the previous CGU Digital Services has been transferred to the
Software and Services, with SEK 3.6 (3.2) billion and Enterprise, with SEK 52.5 new CGU Cloud Software and Services and goodwill from the Vonage acquisi-
(9.2) billion, of which Vonage SEK 42.0 billion and Cradlepoint SEK 9.0 billion. tion during the year has been allocated to the Vonage CGU within segment
Segment Other does not carry goodwill. More information is disclosed in note Enterprise. Other than that, the goodwill allocation has not changed.
B1 “Segment information.”
Impairment tests
Impairment losses Each of segment Networks and segment Cloud Software and Services is a
In segment Enterprise there was an impairment loss of intangibles of SEK 61 CGU and there are several CGUs within segment Enterprise. The value in use
million in a business related to the Internet of Things during 2022 due to a method has been used for goodwill impairment testing, which means that the
strategic decision to discontinue the business operation, which is reported on recoverable amounts for CGUs are established as the present value of expected
the line item Research and development expenses in the income statement. future cash flows based on business plans approved by management.
In 2021 there was an impairment loss of SEK 176 million in the restated Estimation of future cash flows includes assumptions mainly for the follow-
segment Enterprise and an impairment loss of SEK 137 million in the restated ing key financial parameters:
segment Cloud Software and Services. The impairment losses for 2020 is – Sales growth
considered immaterial. – Development of EBIT (based on EBIT margin or cost of goods sold and
operating expenses relative to sales)
Intangible assets – Related development of working capital and capital expenditure
The carrying value of customer relationships, IPR, and other intangible assets requirements.
is SEK 26.3 (3.8) billion, of which customer relationships, acquired through the
Vonage transaction, amount to SEK 18.8 billion with a remaining amortization The assumptions regarding industry-specific market drivers and market
period of 7 to 10 years. growth are based on industry sources as input to the projections made within
the Company for the development 2023–2027 for key telecom industry
Capitalized development expenses parameters:
The Company capitalizes 5G radio product development costs which are – By 2027, about 35 years after the introduction of digital mobile technology,
amortized over a period of 3 years. In considering the Company’s climate- it is predicted that there will be 9.1 billion mobile subscriptions (excl. Cellular
related aim to have more energy efficient products, the Company continually IoT). Out of all mobile subscriptions, 7.9 billion will be associated with a
assesses the impact of future radio product improvements on the recoverability smartphone.
of such development costs. The conclusion is that the carrying value at year end – The number of 5G subscriptions is forecasted to reach 4.3 billion (excluding
is appropriate as the amortization period and product development lifecycle Cellular IoT) by the end of 2027.
are relatively short.
Note C1, cont’d.

– By 2027, about 42 billion connected devices are forecasted, of which over For the other CGUs there are no reasonably possible changes that would
30 billion will be related to Internet of Things, IoT. Connected IoT devices lead to the carrying value not being recoverable.
including connected cars, machines, meters, sensors, point-of-sale termi- The growth rates after the forecast period have increased this year as a
nals, consumer electronics and wearables. result of the increase in risk-free rates. All CGUs use a nominal annual growth
– Cellular IoT is predicted to grow from 3.1 billion devices in end of 2023 to 5.0 rate of 2.0% (1.5%) per year after the forecast period, except Vonage which
billion devices in end of 2027. uses a rate of 3.5%. The higher rate for Vonage is due to the higher risk-free
– Mobile data traffic volume is estimated to increase by more than two times rate implied by USD treasury bonds, which are used as the cash flows are
in the period 2023–2027. The mobile traffic is driven by smartphone users forecasted in USD.
and video traffic, with mobile video traffic forecasted to grow by almost 30%
annually through 2027 to account for approximately 80% of all mobile data An after-tax discount rate has been applied for the discounting of projected
traffic. after-tax cash flows. Rates per CGU:
The assumptions are also based upon information gathered in the Company’s Post-tax discount rates (%)
long-term strategy process, including assessments of new technology, the CGU 2022 2021
Company’s competitive position and new types of business and customers, Networks 9.0 7.5
driven by the continued integration of telecom and data. Cloud Software and Services 10.0 8.0
The forecasted cash flows are based on a five-year business plan. The CGUs Vonage 9.5 –
Vonage and Cradlepoint have assumed a forecasted growth above 20% per Cradlepoint 9.5 10.0
year over the next five years followed by a gradual decline in growth rates. The iconectiv 10.0 9.0
assumptions reflect the expected high growth market conditions in which both
Emodo 14.5 12.0
CGUs are present. Market maturity and market growth at long term sustain-
Red Bee Media 11.0 9.5
able levels (nominal rates described below) are not expected to be reached
until after ten years. It is noted that it is more difficult to estimate market condi-
tions the further into the future they are forecasted. The Company’s discounting is based on after-tax future cash flows and
Sales growth in the Enterprise segment is driven by the adoption of 5G and after-tax discount rates. This discounting is not materially different from a
the convergence of 5G and Cloud communications in the enterprise market. discounting based on before-tax future cash flows and before-tax discount
The Enterprise Private Network and Wireless WAN addressable market is rates, as required by IFRS. In note A1 “Significant accounting policies,” and
expected to grow with a CAGR of 34% 2022–2025 and by 2025 the Cloud note A2 “Critical accounting estimates and judgments,” further disclosures are
Communications total addressable market is estimated to reach USD 73 given regarding goodwill impairment testing. The assumptions for 2021 are
billion, up from USD 41 billion in 2021. disclosed in note C1 “Intangible assets” in the Annual Report of 2021.
Projections over extended time periods where the estimated cash flow Risk assessment on the business plans is carried out on a regular basis and
growth exceeds that of the market in which the Company operates are inher- an impairment review will be performed if conditions suggest that such assets
ently uncertain. The recoverable amount for CGU Vonage would equal the may be impaired.
carrying value, if the expected sales growth per year is reduced by circa 3%
until assuming steady state, or if a 4% decrease in the long term EBIT margin
would be applied. Likewise, an increase in the applied WACC for Vonage by
1.5% would give the same outcome.
C2 Property, plant and equipment

Property, plant and equipment 2022
Machinery and other Other equipment, tools Construction in progress
Real estate technical assets and installations and advance payments Total
Cost
Opening balance 6,946 3,549 35,009 705 46,209
Additions 47 200 2,705 1,525 4,477
Balances regarding acquired/divested business 37 – 138 11 186
Disposals –275 –421 –1,638 –253 –2,587
Reclassifications 287 213 593 –1,093 –
Translation differences 481 284 1,413 78 2,256
Closing balance 7,523 3,825 38,220 973 50,541
Accumulated depreciations
Opening balance –3,741 –2,678 –24,769 – –31,188
Depreciations –502 –373 –3,239 – –4,114
Disposals 226 434 1,509 – 2,169
Translation differences –265 –180 –1,107 – –1,552
Closing balance –4,282 –2,797 –27,606 – –34,685

Opening balance –283 –104 –1,054 – –1,441
Impairment losses –115 –4 –146 –9 –274
Disposals 44 3 145 9 201
Translation differences –31 –9 –66 – –106
Closing balance –385 –114 –1,121 – –1,620
Net carrying value 2,856 914 9,493 973 14,236
Contractual commitments for the acquisition of property, plant and equipment as per December 31, 2022, amounted to SEK 510 (477) million.
Property, plant and equipment 2021

Machinery and other Other equipment, tools Construction in progress
Real estate technical assets and installations and advance payments Total
Cost
Opening balance 6,503 3,030 32,890 995 43,418
Additions 54 207 2,215 1,187 3,663
Balances regarding acquired/divested business – – –75 – –75
Disposals –348 –135 –2,145 –94 –2,722
Reclassifications 356 270 813 –1,439 –
Translation differences 381 177 1,311 56 1,925
Closing balance 6,946 3,549 35,009 705 46,209
Opening balance –3,405 –2,393 –22,863 – –28,661
Depreciations –441 –286 –2,947 – –3,674
Balances regarding divested business – – 50 – 50
Disposals 315 136 1,956 – 2,407
Reclassifications 1 2 –3 – –
Translation differences –211 –137 –962 – –1,310
Closing balance –3,741 –2,678 –24,769 – –31,188

Opening balance –275 –75 –1,024 – –1,374
Impairment losses –22 –30 –146 – –198
Disposals 29 5 176 – 210
Translation differences –15 –4 –60 – –79
Closing balance –283 –104 –1,054 – –1,441
Net carrying value 2,922 767 9,186 705 13,580
C3 Leases
Leases with the Company as lessee
Right-of-use assets
2022 2021
Real estate Vehicles Other Total Real estate Vehicles Other Total
Cost
Opening balance 13,756 930 171 14,857 11,784 823 171 12,778
Additions 1,650 168 136 1,954 1,759 258 – 2,017
Balances regarding acquired/divested business 334 – – 334 –10 –11 – –21
Terminations –719 –178 – –897 –395 –180 – –575
Translation differences 874 78 –4 948 618 40 – 658
Closing balance 15,895 998 303 17,196 13,756 930 171 14,857
Opening balance –5,687 –495 –79 –6,261 –3,700 –390 –55 –4,145
Depreciations –2,141 –250 –60 –2,451 –2,002 –251 –24 –2,277
Balances regarding divested business – – – – 8 6 – 14
Terminations 393 159 – 552 233 158 – 391
Translation differences –354 –43 1 –396 –226 –18 – –244
Closing balance –7,789 –629 –138 –8,556 –5,687 –495 –79 –6,261

Opening balance –303 – – –303 –340 – – –340
Impairment losses –66 – – –66 – – – –
Terminations 27 – – 27 63 – – 63
Translation differences –32 – – –32 –26 – – –26
Closing balance –374 – – –374 –303 – – –303
Financial sublease
Opening balance –345 – – –345 –313 – – –313
Translation differences –51 – – –51 –32 – – –32
Closing balance –396 – – –396 –345 – – –345
Net carrying value 7,336 369 165 7,870 7,421 435 92 7,948
Lease liabilities Future cash outflow

The lease liabilities amounted to SEK 9,304 (9,303) million, of which Future cash outflows from leases not yet commenced in 2022 to which the
SEK 2,486 (2,224) million is classified as current. The remaining contractual Company is committed as the lessee is SEK 71 (157) million.
maturities as of December 31, 2022, is shown in note D4 “Contractual
obligations.” Leases with the Company as lessor
Lessor leases relate to subleases of real estate. These lease contracts vary in
Lease cost length from 1 to 10 years.
The total lease cost amounted to SEK 3,775 (3,375) million, of which depre- Receivables related to subleases in 2022 amounted to SEK 62 (70) million
ciation was SEK 2,451 (2,277) million, impairment losses were SEK –66 (0) for operating leases and to SEK 75 (64) million for financial leases. Interest
million, lease expense relating to low-value assets was SEK 516 (434) million, income from financial subleases was SEK 8 (9) million.
interest expense was SEK 464 (426) million and variable lease expense was At December 31, 2022, future minimum payment receivables were distrib-
SEK 278 (238) million. Variable lease expense consists mainly of property tax. uted as follows:
Cash payments
Cash payments Future minimum payment receivables

2022 2021 Financial leases Operating leases
Repayments of the lease liabilities 1) –2,593 –2,368 2023 77 67
Interest expense of the lease liabilities –464 –426 2024 80 28
Low-value asset not included in the measurement 2025 14 20
of the liabilities –516 –434 2026 – 19
Variable lease payments not included in 2027 – 11
the measurement of the lease liabilities –278 –238
2028 and later – 3
Total cash outflow –3,851 –3,466
Total 171 148
1) Including advance payments.
Section D – Obligations
D1 Provisions
Provisions
Customer Supplier Share-based
Restructuring related related Warranty payments Other Total
2022
Opening balance 639 3,440 1,231 1,074 1,591 1,529 9,504
Additions 400 1,024 561 368 303 4,129 6,785
Balances regarding acquired business 1) – – – – – 1,050 1,050
Reversal of excess amounts –54 –585 –960 –120 –99 –220 –2,038
Charged to income statement 4,747
Utilization 1) –338 –824 –144 –646 –897 –1,724 –4,573
Reclassifications –21 –31 32 – – 595 575
Translation differences 43 69 2 2 87 82 285
Closing balance 669 3,093 722 678 985 5,441 11,588
Of which current provisions 448 1,215 198 572 642 4,554 7,629
Of which non-current provisions 221 1,878 524 106 343 887 3,959
2021
Opening balance 1,200 3,850 791 987 2,107 1,531 10,466
Additions 303 795 1,020 455 1,367 483 4,423
Reversal of excess amounts –98 –491 –228 –153 –122 –86 –1,178
Charged to income statement 3,245
Utilization –785 –841 –175 –109 –1,837 –462 –4,209
Reclassifications –1 104 –179 –107 – 39 –144
Translation differences 20 23 2 1 76 24 146
Closing balance 639 3,440 1,231 1,074 1,591 1,529 9,504
Of which current provisions 411 1,488 1,231 320 915 1,417 5,782
Of which non-current provisions 228 1,952 — 754 676 112 3,722
1) Includes a provision from acquired business in the third quarter 2022, which was utilized in the fourth quarter 2022. For more information see note E2 “Business combinations”.
Provisions will fluctuate over time depending on the business mix, market mix are dependent on whether the plan execution is in line with management’s
and, technology shifts. Risk assessment in the ongoing business is performed assessment. The majority of the restructuring provision will be utilized within
monthly to identify the need for new additions and reversals. Management 1 year. For more information about the restructuring charges booked in the
uses its best judgment to estimate provisions based on this assessment. Under income statement, see note B3 “Expenses by nature.”
certain circumstances, provisions are no longer required due to outcomes
being more favourable than anticipated, which affect the provision balance as Customer-related provisions
a reversal. In other cases, the outcome can be negative, and if so, a charge is Customer-related provisions mainly consist of provisions for losses on cus-
recorded in the income statement. tomer contracts. To measure the customer-related provisions, management
For 2022, the total provision value is SEK 11.6 (9.5) billion, of which SEK 4.0 estimates the unavoidable costs to fulfill the obligations under the customer
(3.7) billion is classified as non-current. The provision balance increased contract. If the exit penalty is lower than the estimated costs to fulfill the
mainly due to the SEK 2.3 billion provision raised in the fourth quarter of 2022 contract, then the provision value is limited to the exit penalty value. The
in relation to a potential resolution with the United States Department of unavoidable costs to fulfill the contract sometimes differ from management’s
Justice (DOJ), noting that the Company, on March 2, 2023, entered into the estimates. Provisions raised for loss-making customer contracts are therefore
DOJ Plea Agreement with the DOJ and agreed to pay a fine of approx. SEK 2.2 regularly reviewed and adjusted based on the latest information available
billion. Refer to the section “Other provisions” below. considering the realization of the costs estimated. The expected timing and
For more information, see note A1 “Significant accounting policies” and note amount of outflows are dependent on whether the customer contract execu-
A2 “Critical accounting estimates and judgments” for key estimation uncer- tion is in line with management’s assessment. The majority of the customer-
tainty regarding timing and amount. related provisions will be utilized over 4 years.
Restructuring provisions Supplier-related provisions

Restructuring provisions relate to structural efficiency programs that are Supplier-related provisions are for supplier claims/guarantees based on the
planned and controlled by management and have a material impact on either contractual obligations mostly relating to inventory. The provision is calculated
the scope of the business undertaken or the manner in which the business is by comparing the committed inventory purchases with the expected usage
conducted. The scope of the structural efficiency measures involves service based on forecast and any excess is provided for based on an assessment of
delivery, supply and manufacturing, R&D, and selling and administration the risk of obsolescence. Therefore, estimation uncertainty exists regarding the
expenses. Restructuring provisions are recognized based on the expected forecast and expected usage as well as the assessment of future obsolescence,
costs of the respective restructuring programs and primarily consist of as this is based on management’s expectations. The expected timing and
personnel costs. Estimation uncertainty exists regarding the execution of the amount of outflows are dependent on the actual outcome of the supplier
restructuring programs, which may impact the expected timing and realization claims and guarantees. The majority of the supplier-related provisions will be
of costs. Restructuring provisions are reviewed and adjusted regularly based utilized over 2 years.
on management’s best estimate. The expected timing and amount of outflows
Note D1, cont’d.

Warranty provisions Other provisions
Warranty provisions are based on historic quality rates for established products The Company made a provision in the fourth quarter of 2022 of SEK 2.3 bil-
as well as estimates regarding quality rates for new products and costs to lion in relation to a potential resolution with the United States Department of
remedy the various types of faults predicted. Uncertainty exists regarding the Justice (DOJ) regarding previously announced, non-criminal, alleged breaches
timing and amount as management utilizes the historical trends to estimate under the deferred prosecution agreement (DPA). The provision also includes
the warranty provisions as well as the cost to repair or replace, which may differ estimated expenses of SEK 0.1 billion for the previously announced extended
from the actual outcomes. New product warranty provisions require further compliance monitorship. On March 2, 2023, the Company reached a resolution
estimation since historical information is not available. These provisions do (DOJ Plea Agreement) with the DOJ regarding non-criminal breaches under its
not include costs for service in additions within customer contracts that are DPA. Under the DOJ Plea Agreement, the Company has agreed to pay a fine of
accounted for as separate performance obligations. The expected timing and USD 206,728,848 (approximately SEK 2.2 billion). The entry of the DOJ Plea
amount of outflows are dependent on the actual product faults which may Agreement will bring the DPA to an end. The Company’s internal investigation
occur. The majority of the warranty provisions are expected to be utilized and its cooperation with authorities in relation to the matters discussed in a
within 1 year. 2019 Iraq-related internal investigation report remain open and ongoing.
The Russian invasion of Ukraine has had an adverse effect on the
Share-based payments provisions operations of the Company’s business in Russia. As previously reported, the
Share-based payments provisions relate to cash-settled share-based pro- Company has provided SEK 0.9 billion for asset impairment and other costs in
grams and are based on the present period’s best estimate of the eventual the first quarter 2022. Operations in Russia were suspended in the first quarter,
pay-outs, see note G3 “Share-based compensation” for more information. The and in December 2022, the Company announced that it has divested its
uncertainty regarding outflows is relating to the fair value of the underlying customer support business in Russia. All costs relating to the business exit and
instrument during the service period and expected fulfilment of the service divestment were included in the provision and fully utilized by year end.
conditions. The majority of the share-based payment provisions are expected Other than the provision relating to the DOJ, other provisions relate mostly
to be utilized within 1 year. to the divestment of the IoT business, litigation and patent infringement dis-
putes. Management regularly assesses the likelihood of any adverse outcomes
and if deemed probable then a provision is raised based on the best estimate
of the expenditure required to settle with the counterpart. There is uncertainty
in the final outcome and settlement, therefore management reviews the
estimation regularly. Outflows relating to litigation are inherently uncertain in
what applies to timing and amount, and therefore most of the provisions are
expected used within 1 year.
D2 Contingent liabilities D4 Contractual obligations

Contingent liabilities Contractual obligations, SEK billion
2022 2021 Payment due by period
Contingent liabilities 3,322 1,614 <1 1–3 3–5 >5
Total 3,322 1,614 2022 year years years years Total
Current and non-current
Contingent liabilities mainly relate to, in order of materiality, litigations, tax debt 1) 6.3 12.9 9.1 11.2 39.5
litigations in subsidiaries, losses on customer contracts and pension guaran- Lease obligations 2) 3.0 4.4 2.1 1.1 10.6
tees, which are assessed to be possible obligations for the Company. Other non-current liabilities – 0.6 – 0.1 0.7
All ongoing legal and tax proceedings have been evaluated, their potential Purchase obligations 3) 17.8 3.1 0.2 – 21.1
economic outflows and probability estimated, and necessary provisions made, Trade payables 38.4 – – – 38.4
or contingent liabilities disclosed. In note A2 “Critical accounting estimates Commitments for customer
and judgments,” further disclosure is presented in relation to (i) key sources finance 4) 44.3 8.6 1.2 – 54.1
of estimation uncertainty and (ii) the decision made in relation to accounting Derivatives liabilities 4) 0.9 1.1 0.6 – 2.6
policies applied. Total 110.7 30.7 13.2 12.4 167.0
As part of its defense to a now settled patent infringement lawsuit filed by 2021
Ericsson in 2013 in the Delhi High Court against Indian handset company Current and non-current
Micromax, Micromax filed a complaint against Ericsson with the Competition debt 1) 9.8 10.4 3.1 10.1 33.4
Commission of India (CCI). The CCI decided to refer the case to the Director Lease obligations 2) 2.6 4.3 2.3 1.4 10.6
General’s Office for an in-depth investigation. The CCI opened similar inves- Other non-current liabilities – 1.0 – 0.6 1.6
tigations against Ericsson in January 2014 based on claims made by Intex Purchase obligations 3) 23.2 4.1 0.3 – 27.6
Technologies (India) Limited and, in 2015, based on a now settled claim from Trade payables 35.7 – – – 35.7
iBall. Ericsson has challenged CCI’s jurisdiction in these cases before the Delhi Commitments for customer
High Court and is awaiting a decision on the appeal of the first instance court’s finance 4) 34.4 9.7 3.2 – 47.3
decision. Derivatives liabilities 4) 0.4 0.4 – – 0.8
In April 2019, Ericsson was informed by China’s State Administration for Total 106.1 29.9 8.9 12.1 157.0
Market Regulation (SAMR) Anti-monopoly bureau that SAMR has initiated 1) Current and non-current debt, including interest commitments.
an investigation into Ericsson’s patent licensing practices in China. Ericsson is 2) Future lease obligations, nominal lease liability, see also note C3 “Leases.”
cooperating with the investigation, which is still in a fact-finding phase. The 3) The amounts of purchase obligations are gross, before deduction of any related provisions.
4) See also note F1 “Financial risk management.”
next steps include continued fact finding and meetings with SAMR in order to
facilitate the authority’s assessments and conclusions.
The above matters relating to Micromax and SAMR are possible obligations Contractual purchase obligations at the end of 2022 were lower than the pre-
which cannot be quantified and are, therefore, not included in the contingent vious year end as supply chain constraints eased in the fourth quarter of 2022.
liability amount disclosed in the table. However, contractual obligations have increased due to unfavorable exchange
rate movements and an increase in customer finance commitments.
D3 Assets pledged as collateral

Assets pledged as collateral
2022 2021
Chattel mortgages 1) 6,333 6,341
Bank deposits 2) 893 532
Total 7,226 6,873
1) See also note G1 “Post-employment benefits.”
2) See also note F1 “Financial risk management.”
Section E – Group structure
E1 Equity
Capital stock Additional paid in capital

Additional paid in capital relates to payments made by owners and includes
Capital stock share premiums paid.
Parent Company Class A shares Class B shares Total
December 31, 2022 1,309 15,363 16,672 Other reserves
December 31, 2021 1,309 15,363 16,672
Other reserves include translation reserves, cash flow hedges and revaluation
of borrowings.
The capital stock of the Parent Company is divided into two classes: Class A
shares (quota value SEK 5.00) and Class B shares (quota value SEK 5.00). Translation reserves
Both classes have the same rights of participation in the net assets and earn- The translation reserves comprise all foreign currency translation reserves
ings. Class A shares, however, are entitled to one vote per share while Class B arising from the translation of the financial statements of foreign operations to
shares are entitled to one tenth of one vote per share. the Group presentation currency and changes regarding revaluation of excess
At December 31, 2022, the total number of treasury shares was 4,009,306 value in local currency.
(4,009,306 in 2021 and 6,043,960 in 2020) Class B shares. Cash flow hedge reserve
For further information, see note F1 “Financial risk management.”
Number of shares
Revaluation of borrowings
2022 Class A shares Class B shares Total
For further information, see note F4 “Interest-bearing liabilities.”
As of January 1 261,755,983 3,072,395,752 3,334,151,735
As of December 31 261,755,983 3,072,395,752 3,334,151,735
Retained earnings
Retained earnings, including net income for the year, comprise the earned
2021 Class A shares Class B shares Total
profits of the Parent Company and its share of net income in subsidiaries,
As of January 1 261,755,983 3,072,395,752 3,334,151,735 joint ventures and associated companies. Retained earnings also include
As of December 31 261,755,983 3,072,395,752 3,334,151,735 remeasurements related to post-employment benefits.
Remeasurements related to post-employment benefits
Dividend proposal Actuarial gains and losses resulting from experience-based events and
The Board of Directors propose to the Annual General Meeting a dividend to the changes in actuarial assumptions, fluctuations in the effect of the asset ceiling,
shareholders of SEK 2.70 per share (SEK 2.50 in 2021 and SEK 2.00 in 2020), and adjustments related to the Swedish special payroll taxes. For more infor-
representing a total dividend of SEK 9.0 (8.3) billion. The dividend is proposed to mation, see note G1 “Post-employment benefits.”
be paid in two equal installments, SEK 1.35 per share with the record date March
31, 2023 (payment date April 5, 2023), and SEK 1.35 per share with the record Non-controlling interests
date September 29, 2023 (payment date October 4, 2023). Equity in a subsidiary not attributable, directly or indirectly, to a parent.
Other reserves
2022 2021
Translation Cash flow Revaluation Total other Translation Cash flow Revaluation Total other
SEK million reserves hedge reserve of borrowings reserves reserves hedge reserve of borrowings reserves
Opening balance 1,206 –411 –341 454 –2,424 101 –366 –2,689
Other comprehensive income
Items that will not be reclassified to profit

or loss
Revaluation of borrowings due to change in
credit risk – – 1,030 1,030 – – 31 31
Gains/losses arising during the period – 3,703 – 3,703 – – – –
Transfer to goodwill – –3,677 – –3,677 – – – –
Tax on items that will not be reclassified to
profit or loss – –758 –212 –970 – – –6 –6
Items that have been or may be reclassified

to profit or loss
Gains/losses arising during the period – –701 – –701 – –542 – –542
Reclassification to profit and loss – 280 – 280 – –96 – –96
Changes in translation reserves 7,273 – – 7,273 3,556 – – 3,556
Reclassification to profit and loss –85 – – –85 46 – – 46
and associated companies 49 – – 49 28 – – 28
Tax on items that have been or may be
reclassified to profit or loss – 87 – 87 – 126 – 126
Other comprehensive income, net of tax 7,237 –1,066 818 6,989 3,630 –512 25 3,143
Total comprehensive income 7,237 –1,066 818 6,989 3,630 –512 25 3,143
Transfer to retained earnings – 758 – 758 – – – –
Closing balance 8,443 –719 477 8,201 1,206 –411 –341 454
E2 Business combinations
Acquisitions
Acquisitions 2020–2022 Vonage

2022 2021 2020 2022
Consideration Consideration
Purchase price paid on acquisition 1) 51,297 256 9,534 Purchase price paid on acquisition 1) 51,297
Deferred consideration/Others 2) 1,972 – 314 Deferred consideration 2) 1,972
Total consideration, all cash and cash Total consideration, all cash and cash equivalents 53,269
equivalents 53,269 256 9,848
Net assets (liabilities) acquired
Net assets (liabilities) acquired Intangible assets 23,554
Intangible assets 23,554 –95 3,583 Property, plant and equipment 186
Property, plant and equipment 186 1 55 Right-of-use assets 334
Right-of-use of assets 334 – 126 Deferred tax assets 2,353
Investments in associates – – 167 Trade receivables 1,094
Cash and cash equivalents 521 – 314 Cash and cash equivalents 521
Other assets 5,344 21 1,292 Other assets 1,896
Provisions, incl. post-employment Provisions –1,050
benefits –1,050 – –16
Deferred tax liabilities –6,264
Other liabilities –16,916 –348 –2,781
Borrowings –6,473
Total identifiable net assets
(liabilities) 11,973 –421 2,740 Lease liabilities –403
Goodwill 41,296 677 7,108 Other liabilities –3,775
Total 53,269 256 9,848 Total identifiable net assets (liabilities) 11,973
Acquisition-related costs 3) 436 11 92 Goodwill 41,296
Total 53,269
Acquisition-related costs 3) 436
1) 2022 purchase price to acquire shares outstanding is net of hedge release of SEK 3.7 billion.
2) Deferred consideration relates to the pre-combination portion of employee stock awards that were previously granted to Vonage employees, which will be paid out post acquisition according to the original award
vesting schedule.
3) Acquisition-related costs are included in Selling and administrative expenses in the consolidated income statement.
In 2022, the Company made acquisitions resulting in a negative cash flow world-wide. With increasing investments in 4G and 5G – and a flourishing
effect from business combinations amounting to SEK 51,734 (256) million, see ecosystem of new applications and use cases leveraging the power of modern
also note H3 “Statement of cash flows.” networks – demand from enterprises for programmable networks has been
The cash flow effect differs from the total consideration in the above table accelerating. Goodwill in this transaction represents future customers, technol-
due to the acquired cash of SEK 0.5 billion and the portion of deferred consid- ogy, and synergies and is not expected to be deductible for tax purposes. The
eration not paid by year end of SEK 1.0 billion. intangible assets mainly relate to customer relationships. The fair values of the
assets acquired and liabilities assumed, at the acquisition date as presented,
Vonage: On July 21, 2022, the Company acquired, in an all cash transaction, are final.
all of the shares in Vonage Holdings Corp. – a US-based global provider of Vonage’s net sales and EBIT (loss) for the period, from acquisition date,
cloud-based communications. This acquisition provides the Company with an amounts to SEK 7.0 billion and SEK –1.8 billion respectively.
opportunity to access a complementary, substantial and high growth segment. Vonage’s net sales and EBIT (loss) for the 2022 financial year, as though
Vonage is a supplier of consumer communications solutions, as well as network the acquisition date occurred at the beginning of the annual reporting period,
API’s, unified communications, and contact center solutions to enterprises amounts to SEK 14.4 billion and SEK –3.0 billion respectively.
Acquisitions 2020–2022
Business Description Transaction date
Vonage A US based global provider of cloud-based communications. Jul 2022
Quortus A UK based mobile core software business with expertise in enterprise 4G/5G technology. Nov 2021
Axonix A UK based mobile-first programmatic advertising exchange business. Mar 2021
Cradlepoint A US company providing Wireless WAN Edge 4G and 5G solutions for the enterprise market. Nov 2020
Genaker A Spanish provider of Mission Critical Push-to-talk (MC-PTT) solutions. Mar 2020
Note E2, cont’d.

Divestments
Divestments 2020–2022 In 2022, the Company made divestments with a cash flow effect amounting
2022 2021 2020 to SEK 20 (273) million. Net gains/losses from the divestments are presented
Proceeds on Other operating income in the Income statement, see also note B4 “Other
Cash and cash equivalents 20 273 4 operating income and expenses.”
Shares in associated companies 298 – – For more information, see note H3 “Statement of cash flow.”
Total proceeds 318 273 4
Net assets disposed of

Property, plant and equipment – 26 1
Right-of-use assets – 7 1
Investments in associates 82 – –
Intangible assets – – 48
Goodwill – –48 4
Other assets 23 51 83
Provisions, incl. post-employment
benefits –42 –30 –1
Other liabilities –101 36 6
Total net assets –38 42 142
Net gains/losses from divestments 356 231 –138
Shares in associated companies –298 – –
Cash flow effect 20 273 4
Divestments 2020–2022
Business Description Transaction date
Aerialink A US based company providing premier messaging solutions for business to business communications Nov 2022
Data center A data center business located in the Netherlands. Nov 2021
E3 Associated companies
Equity in associated companies
2022 2021
Opening balance 941 1,274
Investments 298 –
Share in earnings 17 –260
Distribution of capital stock –24 –
Taxes –14 –11
Dividends –58 –90
Divested business –82 –260
Translation differences 49 28
Closing balance 1,127 941
The Company owns 49.07% of the shares in Ericsson Nikola Tesla d.d., located
in Croatia and 35.6% of the shares in ConcealFab Inc., located in US.
See also note H4 “Related party transactions.”
Section F – Financial instruments Foreign exchange risk

The Company is a global company with sales mainly outside Sweden. Sales
F1 Financial risk management

and costs incurred are to a large extent denominated in currencies other
than SEK and therefore the financial results of the Company are impacted by
currency fluctuations. The Company reports the financial statements in SEK.
The Company’s financial risk management is governed by a policy approved Movements in exchange rates between currencies that affect these statements
by the Board of Directors. The Board of Directors is responsible for overseeing will impact the comparability between periods.
the capital structure and financial management of the Company, approving Line items, primarily sales, are impacted by translation exposure incurred
certain matters (such as investments, customer finance commitments and when converting foreign entities’ financial statements into SEK. Line items and
borrowing) and setting limits on the exposure to financial risks. profitability, such as EBIT are impacted by transaction exposure incurred when
For the Company, a robust financial position with an investment grade financial assets and liabilities, primarily trade receivables and trade payables,
rating, low leverage and ample liquidity is deemed important. This provides are initially recognized and subsequently remeasured due to changes in
financial flexibility and independence to operate and manage variations in foreign exchange rates.
working capital needs as well as to capitalize on business opportunities. The table below presents the external net sales and cost exposures for the
The Company’s overall capital structure should support the financial targets. largest currencies which impact profitability. The internal exposures will not
The capital structure is managed by balancing equity, debt financing and impact group profitability if all related transactions occur and are recognized
liquidity in such a way that the Company can secure funding of operations in the profit and loss in the same month. Any effect on profit and loss from
at a reasonable cost of capital. Regular borrowings are complemented with internal transactions is a function of timing and FX volatility, therefore impos-
committed credit facilities to give additional flexibility to manage unforeseen sible to predict.
funding needs. The Company strives to deliver strong free cash flow.
Currency exposure, SEK billion
The Company’s capital objectives are: Sales Sales Cost Cost
– Free cash flow before M&A of 9–12% of net sales trans trans trans trans Cost
– Positive net cash position Exposure lation action Sales net lation action net
currency exposure exposure exposure exposure exposure 1) exposure
– Investment grade rating by Moody’s (Baa3), S&P Global (BBB-) and Fitch
USD 2) 106.2 51.5 157.7 –51.8 –77.9 –129.7
Ratings (BBB-).
EUR 38.2 1.9 40.1 –32.1 15.2 –16.9
Capital objectives-related information JPY 9.7 – 9.7 –3.7 – –3.7
INR 10.9 –0.4 10.5 –6.5 0.1 –6.4
2022 2021
CAD 4.1 – 4.1 –1.0 0.4 –0.6
Free cash flow before M&A as % of net sales1) 8.2% 13.8%
TWD 4.5 – 4.5 –1.8 – –1.8
Positive net cash (SEK billion) 1) 23.3 65.8
CNY 8.7 –0.3 8.4 –7.2 1.2 –6.0
Credit rating KRW 4.5 – 4.5 –2.5 0.2 –2.3
Fitch Ratings BBB–, stable BBB–, stable 1) External purchases in foreign currency translated to functional currency.
2) Sales transaction exposure in 2022 includes volume in the cash flow hedge of USD 401 million. Based
BBB–,
on the outstanding cash flow hedge volume at year end, the hedged sales volume that will occur in
S&P Global developing BBB–, stable
2023 is USD 2,278 million.
Moody´s Ba1, stable Ba1, stable
1) For more information about the measures, see Alternative performance measures and Financial As SEK has weakened against major currencies in the year, this had a positive
terminology.
effect on net sales of the Company. The strengthening of USD against SEK also
resulted in the treasury function acting on the Board mandate to increase the
In March 2022, S&P Global announced a change in their outlook from stable to hedge volume of sales and purchases denominated in USD, thereby protecting
developing. the value of a portion of future sales. This resulted in a higher outstanding
volume of cash flow hedges at year end compared to prior years.
The Company has a treasury and customer finance function with the principal
role to ensure that appropriate financing is in place through loans and com- Translation exposure
mitted credit facilities, actively managing the Company’s liquidity as well as Translation exposure relates to sales and cost incurred in foreign entities when
financial assets and liabilities, and managing and controlling financial risk converted into SEK upon consolidation. These exposures cannot be addressed
exposures in a manner consistent with underlying business risks and financial by hedging.
policies. The customer finance function may arrange suitable third-party
financing solutions for customers to support their purchases from Ericsson. In Transaction exposure
some cases, and to the extent that customer loans are not provided directly by The Company considers the following transaction exposures.
banks, the Parent Company may provide vendor finance credits to customers
directly. The central function also monitors the exposure from outstanding a) Transaction risk impacting net sales and net income
vendor credits and credit commitments. Transaction exposure relates to sales and cost incurred in non-reporting
currencies in individual group companies. Foreign exchange risk is as far as
The Company classifies financial risks as: possible concentrated in Swedish group companies, primarily Ericsson AB, by
– Foreign exchange risk selling to foreign subsidiaries in either the functional currency of the customers,
– Interest rate risk EUR or USD. This transaction risk can be hedged, although it is only done for
– Credit risk material cash inflows or outflows that are highly certain. The Company has the
– Liquidity risk following recurring hedge programs:
– Refinancing risk i) The Company has identified certain customer contracts where a fluctuation
– Market price risk in own and other equity instruments. in the USD/SEK foreign exchange rate would significantly impact net sales.
These contracts are multi-year contracts with highly probable payments at
The Board of Directors has established risk limits for defined exposures to fixed points in time denominated in USD.
foreign exchange and interest rate risks as well as to political risks in certain The Board of Directors has provided a mandate to the Company to hedge
countries. between 0%–100% of the next three years receipts on a rolling basis, up to the
For further information about accounting policies, see note A1 “Significant end of the contract period. This mandate instructs the treasury function to hedge
accounting policies.” a percentage of this exposure according to a defined scale, locking in a higher
percentage of exposure as the USD strengthens against SEK, up to 100%.
Note F1, cont’d.

ii) The Board of Directors has provided a mandate to the Company to hedge liquidity and take foreign exchange positions up to an aggregated risk of VaR
highly probable forecasted sales and purchases denominated in USD in EAB SEK 45 million given a confidence level of 99% and a one-day horizon. The
for the next 7 to 18 months, on a monthly rolling basis. This mandate instructs average VaR calculated for 2022 was SEK 21.0 (15.3) million. No VaR limits
the treasury function to hedge a percentage of this exposure according to a were exceeded during 2022.
defined scale, locking in a higher percentage of exposure as the USD strength- In the asset-liability management activity, the interest rate risk is managed
ens against SEK, up to 100%. by matching fixed and floating interest rates in interest-bearing balance
For both programs, hedge accounting is applied, whereby the Company sheet items. The policy is that the net sensitivity on a one basis point move on
enters into foreign exchange forward contracts that match the terms of the interest-bearing assets matching interest-bearing liabilities, taking derivatives
foreign exchange exposure as closely as possible and designates them as into consideration, is less than SEK 10 million. The average exposure during
hedging instruments. Hedge ineffectiveness is expected to be minimal but may 2022 was SEK 1.5 (1.1) million per basis point shift.
arise due to differences in timing of the cash flows between the hedged items
and the hedging instruments. Sensitivity to interest rate increase of 1 basis point, SEK million
< 3M 3–12M 1–3Y 3–5Y >5Y Total
b) Transaction exposure in individual balance sheet Interest-bearing assets – – –1 –1 – –2
According to Company policy, transaction exposure in subsidiaries’ balance Interest-bearing
sheets (e.g., trade receivables and trade payables that are remeasured due to liabilities 1) – – 1 3 4 8
change in foreign exchange rates) should be fully hedged. Foreign exchange Derivatives – – –1 –2 –3 –6
exposures in balance sheet items are hedged through offsetting balances or Total – – –1 – 1 –
derivatives. Foreign exchange exposures are managed net, and its effects are 1) Borrowings are included as they are designated FVTPL.
presented net within Financial income and expenses. This is not designated as
hedge accounting. Outstanding derivatives
c) FX execution risk in Ericsson AB (EAB) Outstanding derivatives

As balance sheet hedging is done net on a monthly basis, significant volatility
Related
in USD hedge volumes exposes EAB to FX execution risk. In order to spread the Gross Net amounts
FX execution risk over the year, 14% of each of the next six months forecasted amount amount not offset
sales and purchases in EAB are hedged monthly. This excludes volume in the 2022 recognized Offset presented – collaterals Net
7 to 18 month cash flow hedge program. The hedged volumes are funded by Currency
internal loans from its parent company which are not hedged, therefore the derivatives 1)
FX impact on revaluation of the loan is recognized in net FX as incurred. Assets 1,275 –165 1,110 –277 833
The sensitivity of the FX impact is dependent on changes in foreign Liabilities –2,778 165 –2,613 2,382 –231
exchange rates, forecasts and seasonality. USD is the only currency being Interest rate
hedged. Since the start of the 7 to 18 month cash flow hedge program in derivatives
March 2022, the USD hedge volume has steadily reduced through the year. Assets 11 – 11 – 11
Outstanding loan at year-end was USD 149 million (USD 728 million), with an Liabilities –8 – –8 – –8
average balance of USD 529 million (USD 926 million) over the year. Due to Related
the strengthening of USD against SEK throughout 2022, this resulted in a net Gross Net amounts
loss on the hedge loan balances of SEK 897 million, comprised of net realiza- amount amount not offset
tion loss and unrealized revaluation gain on these loans of SEK 1,191 million 2021 recognized Offset presented – collaterals Net
and SEK 294 million respectively. Currency
derivatives 1)
Assets 294 –36 258 – 258
d) Transaction risk impacting business combination
Liabilities –707 36 –671 467 –204
The Company is exposed to FX execution risk on consideration payable
for acquisition in foreign currency from the period of communication of the Interest rate
proposed transaction to final completion date. Such transaction, if deemed derivatives
material and highly probable, will be hedged to protect the cash consideration Assets 79 –20 59 – 59
for acquisition accounting. Liabilities –111 20 –91 – –91
Cash flow hedge accounting is applied, whereby the Company enters 1) Currency derivatives designated as cash flow hedge of SEK 566 (9) million are included in Other
into foreign exchange forward contracts that match the terms of the foreign current receivables and SEK 1,472 (510) million in Other current liabilities.
exchange exposure as closely as possible and designates them as hedging
instruments. Hedge ineffectiveness is expected to be minimal but may arise Cash collaterals paid or received under Credit Support Annex (CSA) to ISDA
due to differences in timing of the cash flows between the hedged item and for cross-currency derivatives are recognized as Interest-bearing securities,
the hedging instruments. current or Borrowings, current, respectively.
Interest rate risk The Company holds the following currency derivatives designated as hedging
The Company is exposed to interest rate risk through market value fluctuations instruments:
in certain balance sheet items and through changes in interest income and
expenses. Foreign exchange forward contracts
<3 3 – 12
Sensitivity analysis 2022 months months > 1 year Total
The Company uses the Value at Risk (VaR) methodology to measure foreign Notional Amount (USD millions) 916 1,362 2,194 4,472
exchange and interest rate risks managed by the treasury function. This Average forward rate (SEK/USD) 9.66 10.46 9.90
statistical method expresses the maximum potential loss that can arise with
a certain degree of probability during a certain period of time. For the VaR Hedge ratio is 1:1 and changes in forward rate have been designated as
measurement, the Company has chosen a probability level of 99% and a the hedged risk. The change in the fair value of the hedging instrument is
one-day time horizon. The daily VaR measurement uses market volatilities and compared with the change in fair value of the hedged item, and the lower
correlations based on historical daily data (one year). amount is taken to OCI. If the change in fair value of the hedging instrument is
The treasury function operates under two mandates. In the liquidity higher, then the excess change in fair value is considered ineffective hedging
management activity, it has a mandate to deviate from floating interest on net and recorded in net foreign exchange gains and losses. For hedge on customer
Note F1, cont’d.

contracts, upon recognition of the hedged net sales, the cumulative amount Movements in allowances for impairment of trade receivables and contract assets
in hedging reserve is released in the OCI as a reclassification adjustment and
2022 2021
recognized in net sales. For hedge on business combination, the cumulative
amount in hedge reserve is transferred as a basis adjustment to goodwill upon
Balances regarding acquired business 90 —
recognition of the business combination.
Increase in allowance 40 40
See note E1 “Equity” for movement in the cash flow hedge reserve. No
Write-offs –70 –163
hedge ineffectiveness was recognized in the income statement in 2022.
Translation difference 34 3
Credit risk Closing balance 1) 2,492 2,398
Credit risk is divided into three categories: credit risk in trade receivables and 1) Of which SEK 1 (1) million relates to contract assets.
contract assets, customer finance risk and financial credit risk, see note A1
“Significant accounting policies.” The distribution of trade receivables and contract assets closely follows the
distribution of the Company’s sales, see note B1 “Segment information.” The
Credit risk in trade receivables and contract assets ten largest customers represented 45% (47%) of the total trade receivables
Credit risk in trade receivables and contract assets is governed by a policy and contract assets in 2022.
applicable to all legal entities in the Company. The purpose of the policy is to:
– Avoid credit losses through establishing internal standard credit approval Aging analysis of gross values of trade receivables and contracts assets
routines in all the Company’s legal entities by risk category
– Ensure monitoring and risk mitigation of defaulting accounts, i.e. events Days past dues
of non-payment 2022 Not due 1–90 91–180 181–360 >360 Total
– Ensure efficient credit management within the Company and thereby Country risk :Low 32,015 2,090 165 103 328 34,701
improve days sales outstanding and cash flow Country risk: Medium 17,731 1,614 150 134 585 20,214
– Define escalation path and approval process for customer credit limits. Country risk: High 3,304 610 384 295 1,240 5,833
Total 53,050 4,314 699 532 2,153 60,748
The credit risk of all customers is regularly assessed. Through credit manage- Days past dues
ment system functionality, credit checks are performed every time a sales order
2021 Not due 1–90 91–180 181–360 >360 Total
is generated in the source system. These are based on the credit limit and risk
Country risk :Low 36,439 976 171 51 292 37,929
profile set on the customer. Credit blocks appear if credit limit is reached or if
Country risk: Medium 12,119 689 208 220 735 13,971
past due receivables are higher than permitted levels. Release of a credit block
Country risk: High 4,044 429 293 270 1,367 6,403
requires authorization.
Total 52,602 2,094 672 541 2,394 58,303
Letters of credits are used as a method for securing payments from custom-
ers operating in emerging markets, in particular in markets with unstable politi-
cal and/or economic environments. By having banks confirming the letters of Customer finance credit risk
credit, the political and commercial credit risk exposures to the Company are All major commitments to finance customers are made only after approval in
mitigated. accordance with the work procedure for the Board of Directors and according
to the established credit approval process.
Impairment of trade receivables and contract assets Prior to the approval of new facilities reported as customer finance, an
Trade receivables and contract assets are assessed for impairment under a internal credit risk assessment is conducted in order to assess the credit rating
unified model. The Company has determined that credit risk largely depends of each transaction for political and commercial risk. The credit risk analysis is
on both the risk in the country where the customer resides (e.g. ability to make made by using an assessment tool, where the political risk rating is identical to
cross border payments) as well as the payment pattern of the customer. the rating used by all Export Credit Agencies within the OECD. The commercial
Therefore, expected credit losses (ECLs) are calculated using a provision matrix risk is assessed by analyzing a large number of parameters, which may affect
that specifies a fixed rate depending both on the number of days past due and the level of the future commercial credit risk exposure. The output from the
the country risk rating. The country risk ratings depend on the ratings used by assessment tool for the credit rating also includes an internal pricing of the risk.
all Export Credit Agencies within the OECD. The rates defined in the provision This is expressed as a risk margin per annum over the relevant base rate. The
matrix are based on historical loss patterns for that grouping of customers. reference pricing for political and commercial risk, on which the tool is based, is
These rates are adjusted for current conditions as well as management expec- reviewed using information from Export Credit Agencies and prevailing pricing
tations of changes to political risks and payment patterns in the future. The in the bank loan and bond markets for structured financed deals. The objective
provision rates are higher on high risk countries compared to low risk countries is that the internally set risk margin shall reflect the assessed risk and that the
and also higher on amounts that remain unpaid for longer periods of time. pricing is as close as possible to the current market pricing. A reassessment of
The Company has assessed the recent global economic conditions on the the credit rating for each customer finance facility is made on a regular basis.
expected credit losses model for trade receivables and updated the provision As of December 31, 2022, the total amount payable to the Company under
matrix as appropriate. customer finance credits was SEK 7,758 (5,239) million. The carrying value
Trade receivables and contract assets together amounted to SEK 58,256 of these assets was SEK 5,370 (3,287) million as of December 31, 2022.
(55,905) million as of December 31, 2022. Provisions for expected credit losses Customer finance is arranged for infrastructure projects in different geographic
on trade receivables and contract assets amounted to SEK 2,492 (2,398) markets. As of December 31, 2022, there were a total of 73 (81) customer
million as of December 31, 2022. Total past due more than 360 days has finance arrangements originated by or guaranteed by the Company. As of
decreased and the expectation of collection from some customers has also December 31, 2022, the five largest facilities represented 74% (70%) of the
improved, resulting in a lower allowance as a percentage of gross exposure at customer finance exposure. The geographical split of the year end exposure
year end. The Company’s write-offs have historically been low. During the year is as follows: Middle East and Africa 30% (44%), Europe and Latin America
SEK 70 (163) million were written off due to the Company having no reason- 27% (17%), North America 24% (32%) and South East Asia, Oceania and
able expectation of collection. Of these write-offs, SEK 4 (0) million are still India 18% (6%). As of December 31, 2022, the Company also had unutilized
subject to enforcement. customer finance commitments of SEK 54,086 (47,344) million.
Security arrangements for customer finance facilities may include pledges
of equipment, pledges of certain assets belonging to the borrower and pledges
of shares in the operating company. If available, third-party risk coverage is, as
a rule, arranged. “Third-party risk coverage” means that a financial payment
guarantee covering the credit risk has been issued by a bank, an export credit
agency or an insurance company. All such institutions have been rated at least
Note F1, cont’d.

investment grade. A credit risk transfer under a sub-participation arrangement Liquidity risk
with a bank can also be arranged. In this case the entire credit risk and the The Company minimizes the liquidity risk by maintaining a sufficient cash
funding is taken care of by the bank for the part that they cover. position, centralized cash management, investments in highly liquid interest-
The table below summarizes the Company’s outstanding customer finance bearing securities, and by having sufficient committed credit lines in place to
as of December 31, 2022 and 2021. meet potential funding needs. For information about contractual obligations,
analyzed by contractual maturity, see note D4 “Contractual obligations.” The
Outstanding customer finance credit risk exposure 1) current cash position is deemed to satisfy all short-term liquidity requirements.
2022 2021
Fair value of customer finance credits 5,370 3,287 Cash, cash equivalents, interest bearing securities and derivative assets
Financial guarantees for third-parties 6 6 Rating
or equi
Accrued interest 8 9
2022 valent <3M 3–12 M 1–5 Y >5 Y Total
Maximum exposure to credit risk 5,384 3,302
Bank deposits 38,485 166 7 — 38,658
Less third-party risk coverage –298 –94
Other financial
The Company’s risk exposure, less third-party risk institutions 604 — — — 604
coverage 5,086 3,208
Type of issuer:
1) This table shows the maximum exposure to credit risk.
Governments AA/AAA 915 3,950 277 — 5,142
Corporates A2/P2 1,283 — — — 1,283
Fair value assessment of customer finance credits
Mortgage institutes AAA — 1,682 8,880 — 10,562
Customer finance risk exposures are held at fair value and are classified
Derivative assets 323 385 277 136 1,121
as Level 3 on the fair value hierarchy. The Credit Asset Management Team
within Ericsson Credit AB, reporting to Head of Group Treasury and Customer 41,610 6,183 9,441 136 57,370
Finance, has established a process with respect to measurement of fair values.
The quarterly credit review uses an internal model to determine a commercial
Rating
rating for each credit and for calculation of the fair value. The model is based or equi
on external credit rating, political/country rating and bank pricing. Regular 2021 valent <3M 3–12 M 1–5 Y >5 Y Total
monitoring of customer behavior is also a part of the internal assessment. Bank deposits 44,758 104 11 – 44,873
Revaluation of customer finance (excluding effect of foreign exchange transla- Other financial
tion) amounted to a net loss in the consolidated income statement of SEK 15 institutions 247 – – – 247
(gain of 350) million in 2022, of which net loss of SEK 17 (gain of 347) million Type of issuer:
relates to credits held as of December 31, 2022. This effect is presented within Governments AA/AAA 5,743 2,906 11,860 – 20,509
selling and administrative expenses. Corporates A2/P2 4,226 – – – 4,226
Mortgage institutes AAA – 5,749 21,700 304 27,753
Customer finance fair value reconciliation Derivative assets 118 199 – – 317
2022 2021 55,092 8,958 33,571 304 97,925
Additions 37,295 30,121
Refinancing risk
Disposals/repayments –35,412 –30,468
Refinancing risk is the risk that the Company is unable to refinance outstand-
Revaluation/amortization of interest –151 322
ing debt under reasonable terms and conditions, or at all, at a given point in
time. The Company mitigates the risk by having diversified funding sources
Closing balance 5,370 3,287 through a mix of bonds and bilateral loans, with a spread of debt maturing
Of which non-current 415 568 over time. The funding strategy is flexible to enable pre-financing before loan
maturities and funding in various currencies. The average maturity of long-
Due to 5G buildout, the demand for customer financing solutions has con- term borrowings is 3.8 years (3.5 years) at December 31, 2022. In addition to
tinued to increase significantly. Most of such financing has been successfully the existing funding programs, the Company has established a commercial
transferred to banks. paper program for short-term borrowings to complement the long-term bor-
rowings. The commercial paper program remained unutilized at year end.
Financial credit risk Debt financing is mainly carried out through borrowing in the Swedish and
Financial instruments carry an element of risk in that counterparts may international debt capital markets. Bank financing is used for certain subsidi-
be unable to fulfill their payment obligations. This exposure arises in the ary funding and to obtain c ommitted credit facilities.
investments in cash, cash equivalents, interest-bearing securities and from
derivative positions with positive unrealized results against banks and other
Funding programs 1)
counterparties.
Amount Utilized Unutilized
The Company mitigates these risks by investing cash primarily in high rated
Euro Medium-Term Note program
securities such as treasury bills, government bonds, commercial papers, and (USD million) 5,000 2,218 2,782
mortgage-covered bonds (see Liquidity risk section below). Separate credit
SEC Registered program (USD million) 2) — — —
limits are assigned to each counterpart in order to minimize risk concentration.
Commercial Paper Program (SEK million) 10,000 — 10,000
All derivative transactions are covered by ISDA netting agreements to reduce
the credit risk. For cross-currency derivatives a Credit Support Annex (CSA) 1) There are no financial covenants related to these programs.
2) Program amount indeterminate.
to ISDA is signed to further reduce the credit risk by exchanging collateral
weekly against market value. The Company has also moved some derivative
exposures to clearing counterparties with daily settlement of margins. In February 2022, the Company issued new EUR 750 million notes under the
At December 31, 2022, the credit risk in financial cash instruments was Euro Medium-Term Note program with maturity in 2027. In May 2022, the
equal to the instruments’ carrying value. The expected credit losses on cash Company redeemed USD 1,000 million notes issued under the SEC Registered
equivalents and interest-bearings securities classified as amortized cost were program. In December 2022, the Company established a Green Financing
immaterial. Credit exposure in derivative instruments was SEK 0.8 (0.3) billion. Framework to enable it to issue green bonds and other green financing instru-
ments. The proceeds will be exclusively allocated to investments in energy
efficiency and renewable energy. Bonds issued within the Green Financing
Framework will be under the existing funding programs.
Note F1, cont’d.
Committed credit facilities FX derivatives are valued by using observable forward rates, discounted
using base interest rate curve. Valuation of foreign exchange options are
Amount Utilized Unutilized
made using the Black-Scholes formula. The value of credit risks in derivative
Multi-currency revolving credit facility
(USD million) 2,000 — 2,000 contracts are monitored regularly. Derivative credit and debit valuations
adjustments are calculated based on outstanding market values and default
In September 2022, the Company exercised one (of two) one-year extension probabilities from the CDS market, and if effect on valuation is material, are
option on the USD 2 billion sustainability-linked revolving credit facility. The included in the fair value of the derivatives.
facility does not have interest rates linked to credit rating or financial covenants – Valuation technique using significant unobservable inputs – level 3
but is linked to two of Ericsson’s sustainability KPIs. Assets and liabilities are classified as level 3 if their valuation incorporates
The Green Financing Framework and the revolving credit facility were both significant inputs that are not based on observable market data (unobservable
unutilized at year end, and as such there was no accounting impact. Financial inputs). Apart from trade receivables and customer finance receivables, this
instruments arising from the use of these facilities will be assessed for account- valuation technique mainly applies to investment in shares and other partici-
ing in future periods. pations whereby valuation input is considered observable if it can be directly
Fair valuation of the Company’s financial instruments observed from transactions in an active market, or if there is compelling exter-
The Company’s financial instruments accounted for at fair value generally nal evidence demonstrating an executable exit price. Using a market approach
meet the requirements of level 1 valuation as they are based on quoted prices to valuation, unobservable inputs are generally determined via reference to
in active markets for identical assets. For some of the Company’s financial observable inputs, historical observations or other analytical techniques.
assets and liabilities, especially derivatives, quoted prices are not readily
available and fair values are calculated using market inputs such as interest Reconciliation of Level 3 fair value items
rate quotes and currency rates. Investment in shares
For financial liabilities designated at fair value to profit and loss, the carry- and participations
ing amount reflects the effect in own credit spreads either in quoted prices or Opening balance 1,674
quoted Credit Default Swap (CDS) for Investment Grade companies. Additions 218
Disposals –205
Valuation hierarchy Gains or losses 1) 291
– Quoted market prices – level 1
Translation differences 8
Assets and liabilities are classified as level 1 if their value is observable in an
Closing balance 1,986
active market. Such instruments are valued by reference to unadjusted quoted
1) Table shows net gains or losses recognized in Other operating income or expenses, of which SEK 290
prices for identical assets or liabilities in active markets where the quoted price
million unrealized gains relate to Level 3 assets held at the end of the year.
is readily available, and the price represents actual and regularly occurring
market transactions. Financial instruments carried at amortized cost
Financial instruments, such as some cash equivalents, interest-bearing securi-
– Valuation technique using observable inputs – level 2
ties, borrowings and payables, are carried at amortized cost which is deemed
Assets and liabilities classified as level 2 have been valued using models whose
to be equal to fair value. When a market price is not readily available and there
inputs are observable either directly or indirectly. Valuations based on observ-
is insignificant interest rate exposure and credit spreads affecting the value, the
able inputs include cash equivalents (e.g. discounted papers, term deposits) and
carrying value is considered to represent a reasonable estimate of fair value.
interest rate derivatives which are valued using interest rate yield curves. Other
market observable inputs include credit spreads and FX forward rates. Inputs for
base interest rates are quoted fixing rates, interest rates swaps and IBOR rates.
Financial instruments
2022 2021
Amortized Fair Fair value hierarchy level Amortized Fair Fair value hierarchy level
SEK billion cost value Level 1 Level 2 Level 3 cost value Level 1 Level 2 Level 3
Assets at fair value through profit
or loss
Customer finance – 5.4 – – 5.4 – 3.3 – – 3.3
Interest-bearing securities – 17.5 17.5 – – – 43.3 43.3 – –
Cash equivalents 1) – 15.7 – 15.7 – – 26.0 – 26.0 –
Other financial assets – 2.1 0.1 – 2.0 – 2.3 0.6 – 1.7
Other current assets – 1.1 – 1.1 – – 0.3 – 0.3 –
Assets at fair value through OCI
Trade receivable – 48.4 – – 48.4 – 45.4 – – 45.4
Assets at amortized cost
Interest-bearing securities 0.4 – – – – 0.3 – – – –
Cash equivalents 1) 2.9 – – – – 4.0 – – – –
Other financial assets 0.6 – – – – 0.5 – – – –
Financial assets 3.9 90.2 4.8 120.6
Financial liabilities at designated

FVTPL
Parent Company borrowings – –29.6 –16.7 –12.9 – – –31.4 –19.5 –11.9 –
Financial liabilities at FVTPL
Other current liabilities – –2.6 – –2.6 – – –0.8 – –0.8 –
Liabilities at amortized cost
Trade payables –38.4 – – – – –35.7 – – – –
Borrowings –3.3 – – – – –0.4 – – – –
Financial liabilities –41.7 –32.2 –36.1 –32.2
1) Total Cash and cash equivalent is SEK 38.3 (54.1) billion, of which SEK 18.6 (30.0) billion relating to Cash equivalents are presented in the table above.
Note F1, cont’d.

Market price risk in own shares and other listed equity investments Cash-settled plans to employees and the Board of Directors
The Company is exposed to fluctuations in its own share price through share- In the case of synthetic share programs (a cash-settled program as defined
based compensation for employees and the Board of Directors. Some of the in IFRS 2) to Board members and cash-settled plans to employees, the
plans are share-settled and some are cash-settled as further disclosed in note Company is exposed to risks in relation to own share price, both with regard
A1 “Significant accounting policies”, note G2 “Information regarding members to compensation expenses and social security charges. The obligations to pay
of the Board of Directors and Group management” and note G3 “Share-based compensation amounts under the synthetic share-based compensations to
compensation.” the Board of Directors and employees are covered by a provision in the balance
sheet. For further information about LTV, the cash- settled plans to employees
Share-based plans for employees and the synthetic share-based compensations to the Board of Directors, see
The obligation to deliver shares under the Long-Term Variable compensation note G2 “Information regarding members of the Board of Directors and Group
programs (LTV) for the Executive Team is covered by holding Ericsson Class management” and note G3 “Share-based compensation.”
B shares as treasury stock. The cash flow exposure is managed through the
holding of Ericsson Class B shares as treasury stock shall be sold to generate
funds, which also cover social security payments, when shares are delivered to
participants at the end of their service period.
F2 Financial income and expenses

Financial income and expenses
2022 2021 2020
Contractual interest on financial assets 717 360 665
of which on financial assets at amortized cost 251 148 148
Net revaluation gains and losses on financial assets –146 10 –103
Other financial income 207 321 131
Financial income 778 691 693
Contractual interest on financial liabilities –972 –525 –873

of which on financial liabilities at amortized cost –128 –41 –152
Net revaluation gains and losses on financial liabilities 379 67 9

Lease interest expense –464 –426 –490
Net interest on pension liabilities 1) –361 –262 –262
Other financial expenses –512 –528 –500
Financial expenses –1,930 –1,674 –2,116
Net foreign exchange gains/losses –1,259 –1,547 827

Financial income and expenses, net –2,411 –2,530 –596
Net gains and losses on financial instruments exclude effect of foreign exchange translations:
Financial instruments at fair value through profit or loss 2) –2,552 –534 –257
Financial liabilities designated at fair value through profit or loss 2,847 404 –121
1) Includes gains or losses on plan settlement.
2) Excludes net loss from revaluation of customer finance receivables of SEK 15 million (net gain of SEK 350 million in 2021 and net loss of SEK 262 million in 2020), reported as Selling and administrative expenses, and
net loss on revaluation of investments in shares and participations of SEK 205 million (net gain of SEK 784 million in 2021 and net gain of SEK 12 million in 2020) reported as Other operating income or expenses.
F3 Financial assets, non-current

Financial assets, non-current
2022 2021
Other Interest- Other Other Interest- Other
investments bearing financial investments bearing financial
in shares and securities, assets, in shares and securities, assets,
participations non-current non-current 1) participations non-current non-current 1)
Opening balance 2,258 30,626 6,217 1,519 21,613 4,842
Additions 218 13,583 1,249 184 30,305 1,054
Disposals/repayments/deductions –205 –29,523 –481 –229 –13,547 –959
Amortization – – –288 – – –
Change in value in funded pension plans 2) – – 244 – – 1,064
Revaluation –205 262 85 784 –75 99
Reclassification – –5,784 –542 –1 –7,670 –1
Translation differences 8 – 355 1 – 118
Closing balance 2,074 9,164 6,839 2,258 30,626 6,217
1) Includes items such as pension surplus assets, tax credit receivables, deferred sales commissions and loans to associates.
2) This amount includes asset ceiling. For further information, see note G1 “Post-employment benefits.”
F4 Interest-bearing liabilities
As of December 31, 2022, the Company’s outstanding interest-bearing liabili- To secure long-term funding, the Company uses notes and bond programs
ties were SEK 32.9 (31.8) billion. together with bilateral research and development loans. All outstanding
notes and bond loans are issued by the Parent Company under its Euro
Interest-bearing liabilities (excluding lease obligations) Medium-Term Note (EMTN) program or under its U.S. Securities and Exchange
2022 2021 Commission (SEC) Registered program. Bonds issued at a fixed interest rate
Borrowings, current are normally swapped to a floating interest rate using interest rate swaps
Current part of non-current borrowings 2,865 9,459 under the Asset and liability management mandate described in note F1
Other borrowings, current 3,119 131 “Financial risk management.” Total weighted average interest rate cost for
Total borrowings, current 5,984 9,590 the long-term funding during the year was 2.45% (1.75%).
The global economy continues to face multiple challenges due to the war
Borrowings, non-current in Ukraine and the threat of recession affecting all major economies. Inflation
Notes and bond loans 26,752 22,016 rates have risen significantly across the world and central banks have raised
Other borrowings, non-current 194 225 interest rates in response. The higher short term interest rates increased
Total borrowings, non-current 26,946 22,241 interest payments on long-term borrowings as fixed coupons payments are
Total interest-bearing liabilities 32,930 31,831 swapped to floating rates. As all long-term borrowings are also denominated
in either USD or Euro, interest payments and cost of borrowings in SEK have
increased compared to prior years.
Reconciliation of liabilities arising from financing activities
(including lease obligations)
2022 2021
Cash flows
Proceeds from issuance of borrowings 10,755 7,882
Repayment of borrowings 1) –16,029 –5,791
Other financing activities 315 –2,128
Lease payments –2,593 –2,368
Non-cash changes
Effect of foreign exchange movement 4,762 2,621
Revaluation due to changes in credit risk –1,030 –31
Other changes in fair value –2,888 –415
Acquisition of new lease contracts 1,986 2,009
Balances regarding acquired business 6,876 –
Other non-cash movements 1) –1,054 –105
1) Repayment in 2022 includes capped call received of SEK 0.6 billion (not classified as Borrowings)
relating to convertible bonds repaid, therefore net repayment amount is lower. This is included in
Other non-cash movements above.
Notes, bonds and bilateral loans

Cumulative
Changes in fair changes in fair
value due to value due to
Nominal Carrying value changes in credit changes in credit Carrying value
Issued-maturing amount Coupon Currency Maturity date 2022 risk 2022 risk 2022 2021
Notes and bond loans
2012–2022 1,000 4.125% USD May 15, 2022 – –58 – 9,163
2017–2024 500 1.875% EUR Mar 1, 2024 5,392 –72 46 5,297
2017–2025 1) 150 2.741% USD Dec 22, 2025 1,422 –50 30 1,393
2020–2030 1) 200 3.020% USD Dec 30, 2030 1,682 –97 18 1,825
2021–2029 500 1.000% EUR May 26, 2029 4,196 –286 –312 5,007
2022–2027 750 1.125% EUR Feb 8, 2027 7,119 –208 –207 –
Total notes and bond loans 19,811 –771 –425 22,685
Bilateral loans
2017–2023 2) 220 USD Jun 15, 2023 2,292 –38 6 2,033
2019–2024 3) 281 USD July 31, 2024 2,925 –58 4 2,608
2019–2025 2) 150 USD Dec 18, 2025 1,555 –45 –1 1,400
2021–2028 3) 305 USD Jun 21, 2028 2,981 –118 –183 2,692
Total bilateral loans 9,753 –259 –174 8,733
1) Private Placement, Swedish Export Credit Corporation (SEK).
2) Nordic Investment Bank (NIB), R&D project financing.
3) European Investment Bank (EIB), R&D project financing.
Section G – Employee related
G1 Post-employment benefits
Ericsson sponsors a number of post-employment benefit plans throughout the Alecta has a collective funding ratio which acts as a buffer for its insurance
Company, which are in line with market practice in each country. commitments to protect against fluctuations in investment return and insur-
The global economy continues to face multiple challenges due to the war ance risks. Alecta’s collective funding ratio ranges from 125% to 175% and
in Ukraine and the threat of recession affecting all major economies. Short reflects the market value of Alecta’s plan assets as a percentage of its commit-
term inflation rates have risen significantly across the world and central banks ments to policy holders (both guaranteed and non-guaranteed), measured
have raised interest rates in response. Asset prices (equity and bonds) remain in accordance with Alecta’s actuarial assumptions, which are different from
volatile in these market conditions. those in IAS 19. Alecta’s collective funding ratio was 172% (172%) as of
The Company has updated the assumptions used to value the defined December 31, 2022. The Company’s share of Alecta’s saving premiums is
benefit pension liabilities based on the latest market conditions. Discount 0.3%, the total share of active members in Alecta is 2.1%. The expected contri-
rates have increased, resulting in significant actuarial gain on remeasurement, bution to the plan is SEK 100 million for 2023.
although this is partly offset by higher inflation assumptions. Net actuarial
gain on defined benefit obligations was SEK 29.0 billion. Plan assets also Contingent liabilities / Assets pledged as collateral
decreased due to market volatility in the year resulting in a remeasurement loss Contingent liabilities include the Company’s mutual responsibility as a credit
of SEK 14.1 billion. The net pension obligations decreased by SEK 8.7 billion insured company of PRI Pensionsgaranti in Sweden. This mutual responsibility
compared to prior year. can only be imposed in the instance that PRI Pensionsgaranti has consumed
all of its assets, and it amounts to a maximum of 2% of the Company’s pension
Swedish plans liability in Sweden. The Company has a pledged business mortgage of SEK 6.1
Sweden has both defined benefit and defined contribution plans based on billion to PRI Pensionsgaranti at year end. PRI continuously measures the
collective agreement between the parties in the Swedish labor market: Company credit risk levels according to the credit insurance terms and condi-
– A defined benefit plan, known as ITP 2 (occupational pension for salaried tions. The Company has agreed to pledge additional business assets worth
employees in manufacturing industries and trade), complemented by SEK 750 million in the first quarter of 2023 as additional credit risk guarantee.
a defined contribution plan, known as ITPK (supplementary retirement
benefits). This is a final salary-based plan. US plans
– A defined contribution plan, known as ITP 1, for employees born in 1979 The Company operates both defined contribution and defined benefit pension
or later. plans in the US, which are a combination of final salary pension plans and
– A defined contribution plan ITP 1 or alternative ITP, for employees earning contribution-based arrangements. The final salary pension plans provide
more than 10 income base amount and who have opted out of the defined benefits to members in the form of a guaranteed level of pension payable for
benefit plan ITP 2, where rules are set by the Company and approved by life. The level of benefits provided depends on members’ length of service and
each employee selected to participate. their salary in the final years leading up to retirement. Retirees generally do not
receive inflationary increases once in payment.
The Company has by far most of its Swedish pension liabilities under defined The other type of plan is a contribution-based pension plan, which provides
benefit plans which according to IAS 19 is funded to 57% (51%) by the assets a benefit determined using a “cash balance” approach. The balance is credited
of Ericsson Pensionsstiftelse (a Swedish Pension Foundation). These liabilities, monthly with interest credits and contribution credits, based on a combination
if valued using different methodology and assumptions established by the of current year salary and length of service.
Swedish PRI Pensionsgaranti, are considered funded to more than 100% by The majority of benefit payments are from trustee-administered funds;
the assets of Ericsson Pensionsstiftelse. There are no funding requirements for however, there are also a number of unfunded plans where the Company
the Swedish plans. meets the benefit payment obligation as it falls due. In the US, the Company’s
The disability and survivors’ pension part of the ITP-plan is secured through policy is at least to meet or exceed the funding requirements of federal regula-
an insurance solution with the company Alecta, see section about Multi- tions. The funded level in the US Pension Plan is above the point at which
employer plans. minimum funding would be required for fiscal year 2022.
The Company pays benefit directly to the pensioners as the obligations fall Plan assets held in trusts are governed by local regulations and practice,
due. The responsibility for governance of the plans and the plan assets lies with as is the nature of the relationship between the Company and the trustees (or
the Company and the Pensionsstiftelse. The Swedish Pensionsstiftelse is man- equivalent) and their composition. Responsibility for governance of the plans,
aged on the basis of a capital preservation strategy and the risk profile is set including investment decisions and contribution schedules, lies with the Plan
accordingly. Traditional asset-liability matching (ALM) studies are undertaken Administrative Committee (PAC). The PAC is composed of representatives
on a regular basis to allocate within different asset classes. from the Company.
The plans are exposed to various risks, e.g., a sudden decrease in the bond The Company’s plans are exposed to various risks associated with pen-
yields, which would lead to an increase in the plan liability. A sudden instability sion plans, i.e., a sudden decrease in bond yields would lead to an increase
in the financial market might also lead to a decrease in fair value of plan assets in the present value of the defined benefit obligation. A sudden instability in
held by the Pensionsstiftelse, as the holdings of plan assets partly are exposed the financial markets might also lead to a decrease in the fair value of plan
to equity markets; however, this may be partly offset by higher values in fixed assets held by the trust. Pension benefits in the US are not linked to inflation;
income holdings. Swedish plans are linked to inflation and higher inflation will however, higher inflation poses the risk of increased final salaries being used to
most likely lead to a higher liability. determine benefits for active employees. There is also a risk that the duration
of payments to retirees will exceed the life expectancy in mortality tables.
Multi-employer plans In June 2022, the trustees completed a bulk annuity transaction which
As before, the Company has secured the disability and survivors’ pension part transferred all risks relating to some of the defined benefit plan liabilities to
of the ITP Plan through an insurance solution with the insurance company insurance companies. This resulted in a settlement event, whereby defined
Alecta. Although this part of the plan is classified as a multi-employer defined benefit obligation of SEK 11 billion was discharged.
benefit plan, it is not possible to get sufficient information to apply defined
benefit accounting, as for most of the accrued pension benefits in Alecta, UK plans
information is missing on the allocation of earnings process between employ- The Company operates both defined benefit and defined contribution plans in
ers. Full vesting is instead registered on the last employer. Alecta is not able to the UK. All defined benefit plans in the UK are closed to future pension accrual.
calculate a breakdown of assets and provisions for each respective employer, The defined benefit plans provide benefits to members in the form of a
and therefore, the disability and survivors’ pension portion of the ITP Plan has guaranteed level of pension payable for life. The level of benefits provided is
been accounted for as a defined contribution plan. defined by the Trust Deed & Rules and depends on members’ length of service
Note G1, cont’d.
and their salary. Pensions in payment are generally updated in line with the UK retains the legal responsibility to pay all scheme benefits, the plan liabilities
retail price index, subject to caps defined by the rules. remain on the balance sheet alongside the corresponding buy-in assets.
The plans’ assets are held in trusts and are invested in a diverse range of
assets. The plans are governed by local regulations and responsibility for the Other plans
governance of the plans lies with the Trustee Directors, who are appointed by The Company also sponsors plans in other countries. The main plans are in
the Company from its employees and from the plans’ members. Independent Brazil, India and Ireland. The main pension plans in Brazil are wholly funded
professional trustees sit on a number of the Boards. with a net surplus of assets. The plan in Ireland is a final salary pension plan
The plans remain exposed to various risks associated with defined benefit and is partly funded. The plans are managed by corporate trustees with direc-
plans, e.g. a decrease in bond yields or increase in inflation would lead to an tors appointed partly by the local company and partly by the plan members.
increase in the present value of the defined benefit obligation. Alternatively, The trustees are independent from the local company and subject to the
the duration of payments to retirees could exceed the life expectancy assumed specific country’s pension laws.
in the current mortality tables leading to an increase in liabilities. A sudden The Provident Fund Plan in India is self-managed through a registered
instability in the financial markets might also lead to a decrease in the fair Exempted Trust and according to local legislation, investment returns shall
value of the plans’ assets. The Company and Trustees’ aim is to reduce the be guaranteed at minimum rates of return specified by the government. The
plans’ exposure to the key risks over time. Company has an obligation to fund any shortfall on the yield of the trust’s
In December 2022, the trustees purchased a bulk annuity buy-in contract investments over the administered interest rates on an annual basis. These
(valued at SEK 2.3 billion) from an insurance company to secure all future pay- administered rates are determined annually predominantly considering the
ments to members of one of the UK pension plans. This transfers risks associ- social and economic factors in the past.
ated with the plan to the insurance company, although, since the Company
Amount recognized in the Consolidated balance sheet
Amount recognized in the Consolidated balance sheet

Sweden US UK Other Total
2022
Defined benefit obligation (DBO) 50,441 5,365 9,866 18,019 83,691
Fair value of plan assets 28,521 5,111 11,999 14,849 60,480
Deficit/surplus (+/–) 21,920 254 –2,133 3,170 23,211
Plans with net surplus, excluding asset ceiling 1) – 298 2,137 1,715 4,150
Provision for post-employment benefits 2) 21,920 552 4 4,885 27,361
2021
Defined benefit obligation (DBO) 58,754 18,463 17,071 19,255 113,543
Fair value of plan assets 29,876 18,254 19,427 13,798 81,355
Deficit/surplus (+/–) 28,878 209 –2,356 5,457 32,188
Plans with net surplus, excluding asset ceiling 1) – 450 2,802 610 3,862
Provision for post-employment benefits 2) 28,878 659 446 6,067 36,050
1) Plans with a net surplus, i.e., where plan assets exceed DBO, are reported as Other financial assets, non-current, see note F3 “Financial assets, non-current.”
The asset ceiling increased during the year to SEK 584 (540) million.
2) Plans with net liabilities are reported in the balance sheet as Post-employment benefits, non-current.
Total pension cost recognized in the Consolidated income statement

The costs for post-employment benefits within the Company are distributed between defined contribution plans and defined benefit plans.
Pension costs for defined contribution plans and defined benefit plans
2022
Pension cost for defined contribution plans 1,192 542 128 1,209 3,071
Pension cost for defined benefit plans 1) 2,144 160 –22 1,204 3,486
Total 3,336 702 106 2,413 6,557
Total pension cost expressed as a percentage of wages and salaries 8.9%
2021
Pension cost for defined contribution plans 1,199 460 138 1,084 2,881
Pension cost for defined benefit plans 1,920 97 –6 931 2,942
Total 3,119 557 132 2,015 5,823
2020
Pension cost for defined contribution plans 963 415 136 664 2,178
Pension cost for defined benefit plans 1,783 13 –4 993 2,785
Total 2,746 428 132 1,657 4,963
1) For the UK plans, negative cost was due to interest income of SEK 355 million exceeding interest cost of SEK 312 million during the year.
Note G1, cont’d.

Change in the net defined benefit obligation

Fair value Fair value
Present value of plan Present value of plan
of obligation assets Total of obligation assets Total
2022 1) 2022 2022 2021 1) 2021 2021
Opening balance 113,543 –81,355 32,188 108,188 –73,611 34,577
Included in the income statement 2)
Current service cost 2,772 – 2,772 2,644 – 2,644
Past service cost and gains and losses on settlements 311 – 311 1 – 1
Interest cost/income (+/–) 1,716 –1,475 241 1,463 –1,240 223
Taxes and administrative expenses – 62 62 – 41 41
Other 43 1 44 10 –17 –7
4,842 –1,412 3,430 4,118 –1,216 2,902
Remeasurements
Return on plan assets excluding amounts in interest expense/income – 14,135 14,135 – –3,526 –3,526
Actuarial gains/losses (–/+) arising from changes in demographic
assumptions 1,118 – 1,118 –49 – –49
Actuarial gains/losses (–/+) arising from changes in financial assumptions –29,031 – –29,031 –287 – –287
Experience-based gains/losses (–/+) 3,236 – 3,236 350 – 350
–24,677 14,135 –10,542 14 –3,526 –3,512
Other changes
Translation difference 3,381 –3,297 84 3,951 –3,764 187
Contributions and payments from:
Employers 3) –1,302 –652 –1,954 –1,260 –679 –1,939
Plan participants 334 –325 9 285 –270 15
Payments from plans:
Benefit payments –1,806 1,806 – –1,825 1,825 –
Settlements –10,759 10,755 –4 –12 – –12
Business combinations and divestments – – – 84 –114 –30
Other 135 –135 – – – –
Closing balance 83,691 –60,480 23,211 113,543 –81,355 32,188
1) The weighted average duration of DBO is 18.3 (20.4) years.
2) Excludes the impact of the asset ceiling of SEK 55 (40) million in 2022.
3) The expected contribution to the plans during 2023 is SEK 2.2 billion.
Present value of the defined benefit obligation

2022
DBO, closing balance 50,441 5,365 9,866 18,019 83,691
Of which partially or fully funded 50,441 4,812 9,866 14,417 79,536
Of which unfunded – 553 – 3,602 4,155
2021
DBO, closing balance 58,754 18,463 17,071 19,255 113,543
Of which partially or fully funded 58,754 17,805 17,071 15,574 109,204
Of which unfunded – 658 – 3,681 4,339
Note G1, cont’d.
Asset allocation by asset type and geography 1)

Of which
Sweden US UK Other Total unquoted 2)
2022
Cash and cash equivalents 1,151 184 449 88 1,872 6%
Equity securities 6,803 419 1,113 2,791 11,126 50%
Debt securities 14,114 3,646 5,818 8,539 32,117 28%
Real estate 5,577 – 199 603 6,379 100%
Investment funds 917 789 2,417 578 4,701 74%
Assets held by insurance company – – 1,872 1,717 3,589 100%
Other –41 73 131 533 696 15%
Total 28,521 5,111 11,999 14,849 60,480
Of which real estate occupied by the Company – – – – –
Of which securities issued by the Company – – – – –
2021
Cash and cash equivalents 1,100 500 1,468 46 3,114 33%
Equity securities 7,619 659 3,823 2,651 14,752 58%
Debt securities 14,427 15,817 12,705 7,999 50,948 44%
Real estate 5,157 – 195 594 5,946 100%
Investment funds 1,782 1,247 – 484 3,513 64%
Assets held by insurance company – – – 1,597 1,597 100%
Other –209 31 1,236 427 1,485 69%
Total 29,876 18,254 19,427 13,798 81,355
Of which real estate occupied by the Company – – – – –
Of which securities issued by the Company – – – – –
1) Asset class is presented based on the underlying exposure of the investment. This includes direct investment in securities or investment through pooled funds that invest in an asset class.
2) Unquoted refers to assets classified as fair value level 2 and 3. Unquoted assets comprise mainly i nvestments in pooled investment vehicles.
Actuarial assumptions
Financial and demographic actuarial assumptions

2022 2021
Sweden US UK Sweden US UK
Financial assumptions
Discount rate 2.0% 5.4% 4.9% 0.6% 2.7% 1.8%
Inflation rate 2.3% 2.5% 3.1% 2.0% 2.5% 3.2%
Salary increase rate 2.8% 3.0% – 2.8% 3.5% –
Demographic assumptions
Life expectancy after age 65 in years 23 22 23 23 23 23
Actuarial assumptions are assessed on a quarterly basis. See also note A1 Total remeasurements in Other comprehensive income related to
“Significant accounting policies” and note A2 “Critical accounting estimates post-employment benefits
and judgments.” 2022 2021
Actuarial gains and losses (+/–) 8,943 3,255
Sweden
The effect of asset ceiling 127 25
The defined benefit obligation (DBO) has been calculated using a discount rate
Swedish special payroll taxes 1,599 257
based on the yields of Swedish government bonds. IAS 19 Employee Benefits
Total 10,669 3,537
prescribes that if there is not a deep market in high-quality corporate bonds,
the market yields on government bonds shall be applied for the pension liabil-
ity calculation. As of December 31, 2022, the discount rate applied in Sweden Sensitivity analysis of significant actuarial assumptions, SEK billion
was 2.0% (0.6%). If the discount rate had been based on Swedish covered 2022
mortgage bonds, the discount rate as of December 31, 2022 would have been Impact on the DBO of a change
3.9% (2.1%). If the discount rate based on Swedish covered mortgage bonds in assumptions Sweden US UK
had been applied for the pension liability calculation, the DBO at December 31, Financial assumptions
2022 would have been approximately SEK 16.5 (18.8) billion lower. Discount rate –0.5% 5.9 0.3 0.9
Discount rate +0.5% –5.2 –0.2 –0.8
US and UK Inflation rate –0.5% –4.1 – –0.6
The defined benefit obligation has been calculated using a discount rate based Inflation rate +0.5% 7.0 – 0.6
on yields of high-quality corporate bonds, where “high-quality” has been Salary increase rate –0.5% –1.8 – –
defined as a rating of AA and above. Salary increase rate +0.5% 1.9 – –
Higher corporate bond discount rates were used to value pensions liabilities Demographic assumptions
in the US and UK plans at year end hence lowering the liabilities, although this
Longevity – 1 year –2.4 –0.1 –0.3
was partially offset by higher inflation rate in the UK.
Longevity + 1 year 2.4 0.1 0.3
G2 Information regarding members of the Board of Directors and Group management
Remuneration to the Board of Directors
Remuneration to members of the Board of Directors

Value at Number of
grant date of previously
Number of synthetic allocated Net change
synthetic shares synthetic in value of Total Total
shares/portion allocated shares synthetic Committee Total fees remunera- remunera-
SEK Board fees of Board fee in 2022 outstanding shares 1) fees paid in cash 2) tion 2022 tion 2021
A B C (A+B+C)
Board member
Ronnie Leten 4,375,000 – – 94,954 –2,501,774 385,000 4,760,000 2,258,226 4,487,599
Helena Stjernholm 1,100,000 6,669/50% 549,992 23,547 –1,182,457 180,000 730,000 97,535 1,441,705
Jacob Wallenberg 1,100,000 10,003/75% 824,947 35,323 –1,773,786 180,000 455,000 –493,839 1,375,710
Jon Fredrik Baksaas 1,100,000 6,669/50% 549,992 30,007 –1,519,416 205,000 755,000 –214,424 1,250,514
Jan Carlson 1,100,000 10,003/75% 824,947 35,323 –1,773,786 455,000 730,000 –218,839 1,512,156
Nora Denzel 1,100,000 3,334/25% 274,955 11,772 –591,164 180,000 1,005,000 688,791 1,240,674
Börje Ekholm – – – – – – – – 150,241
Carolina Dybeck Happe 1,100,000 10,003/75% 824,947 – –215,765 – – 609,182 –
Eric A. Elzvik 1,100,000 3,334/25% 274,955 11,772 –591,164 475,000 1,300,000 983,791 1,480,674
Kurt Jofs 1,100,000 3,334/25% 274,955 19,378 –459,865 635,000 1,460,000 1,275,090 1,598,923
Kristin S. Rinne 1,100,000 6,669/50% 549,992 14,005 –999,684 205,000 755,000 305,308 1,371,568
Employee Representatives
Torbjörn Nyman 43,500 – – – – 22,500 66,000 66,000 43,500
Anders Ripa 43,500 – – – – 12,000 55,500 55,500 27,000
Kjell-Åke Soting 43,500 – – – – 15,000 58,500 58,500 39,000
Annika Salomonsson 4) 28,500 – – – – – 28,500 28,500 –
Ulf Rosberg (deputy) 43,500 – – – – – 43,500 43,500 22,500
Loredana Roslund (deputy) 43,500 – – – – – 43,500 43,500 27,000
Roger Svensson – – – – – – – – 7,500
Per Holmberg (deputy) – – – – – – – – 21,000
Total 14,521,000 60,018 4,949,682 276,081 –11,608,861 2,949,500 12,245,500 5,586,321 3) 16,097,264
1) The difference in value as of the time for payment, compared to December 31, 2021, for synthetic shares allocated in 2017 (for which payment was made in 2022). The difference in value as of December 31,
2022 compared to December 31, 2021, for synthetic shares allocated in 2018, 2019, 2020 and 2021. Calculated on a share price of SEK 60.90. The difference in value as of December 31, 2022, compared to grant
date for synthetic shares allocated in 2022. The value of synthetic shares allocated in 2018, 2019, 2020 and 2021 includes respectively SEK 1.00, SEK 1.50, SEK 2.00 and SEK 2.50 per share in compensation for
dividends resolved by the Annual General Meetings 2019, 2020, 2021 and 2022 and the value of the synthetic shares allocated in 2017 includes dividend compensation for dividends resolved in 2018, 2019, 2020
and 2021.
2) Committee fee and cash portion of the Board fee.
3) Excluding social security charges in the amount of SEK 1,102,787.
4) Appointed deputy employee representative Board member as of March 29, 2022.
Comments to the table allocation, ii) 50% in cash and 50% in the form of synthetic shares, or iii)
– The Chair of the Board was entitled to a Board fee of SEK 4,375,000 and 75% in cash and 25% in the form of synthetic shares. Directors may also
a fee of SEK 205,000 as Chair of the Finance Committee and a fee of SEK choose not to participate in the synthetic share program and receive 100%
180,000 as member of the Remuneration Committee. of the Board fee in cash. Committee fees are always paid in cash.
– The other Directors elected by the Annual General Meeting were entitled
to a fee of SEK 1,100,000 each. In addition, the Chair of the Audit and The number of synthetic shares allocated is based on a volume-weighted
Compliance Committee was entitled to a fee of SEK 475,000 and the other average of the market price of Ericsson’s Class B shares on Nasdaq Stockholm
non-employee members of the Audit and Compliance Committee were enti- during the five trading days immediately following the publication of Ericsson’s
tled to a fee of SEK 275,000 each. The Chairs of the Finance, Remuneration interim report for the first quarter 2022; SEK 82.47. The number of synthetic
and Technology and Science Committees were entitled to a fee of SEK shares is rounded down to the nearest whole number of shares.
205,000 each and the other non-employee members of these Committees The synthetic shares are vested during the Directors’ term of office and the
were entitled to a fee of SEK 180,000 each. right to receive payment with regard to the allocated synthetic shares occurs
– Members of the Board, who are not employees of the Company, have after the publication of the Company’s year-end financial statement during
not received any remuneration other than the fees and synthetic shares the fifth year following the Annual General Meeting which resolved on the
as above. None of the Directors have entered into a service contract with synthetic share program, i.e., in 2027. The amount payable shall be determined
the Parent Company or any of its subsidiaries, providing for termination based on the volume-weighted average price for shares of Ericsson’s Class
benefits. B during the five trading days immediately following the publication of the
– Members and deputy members of the Board who are Ericsson employees year-end financial statement.
received no remuneration or benefits other than their entitlements as Synthetic shares were allocated to members of the Board for the first time
employees and a fee to the employee representatives and their deputies in 2008 and have been allocated annually since then on equal terms and
of SEK 1,500 per attended Board meeting and Committee meeting. conditions. Payment based on synthetic shares allocated in 2017 occurred
– The Annual General Meeting 2022 resolved that non-employee Directors in 2022. The amounts paid in 2022 under the synthetic share programs were
may choose to receive the Board fee (i.e., exclusive of Committee fee) as determined based on the volume-weighted average price for Ericsson’s Class
follows: i) 25% of the Board fee in cash and 75% in the form of synthetic B shares on Nasdaq Stockholm during the five trading days immediately
shares, with a value corresponding to 75% of the Board fee at the time of following the publication of the year-end financial statements for 2021:
Note G2, cont’d.

SEK 113.09 and totalled SEK 7,865,764 excluding social security charges. Remuneration to the Group management
The payments made do not constitute a cost for the Company in 2022. The The Company’s costs for remuneration to the Group management are the
Company’s costs for the synthetic shares have been disclosed each year and costs recognized in the income statement during the financial year. These costs
the net change in value of the synthetic shares for which payment was made in are disclosed under Remuneration costs below.
2022, is disclosed in the table above “Remuneration to members of the Board Costs recognized during a financial year in the income statement are not
of Directors”. fully paid by the Company at the end of the fiscal year. The unpaid amounts
The value of all outstanding synthetic shares fluctuates in line with the that the Company has in relation to the Group management are disclosed
market value of Ericsson’s Class B share and may differ from year to year under Outstanding balances.
compared to the original value on their respective grant dates. The change in
value of the outstanding synthetic shares is established each year and affects Remuneration costs
the total recognized costs that year. As of December 31, 2022, the total The total remuneration to the President and CEO and to other members of
outstanding number of synthetic shares under the programs is 336,099 and the Group management, consisting of the Executive Team (ET), includes
the total accounted debt is SEK 21,951,066. fixed salary, short- and long-term variable compensation, pension and other
benefits. These remuneration elements are based on the guidelines for remu-
neration to Group management (the Guidelines) as approved by the Annual
General Meeting (AGM) of shareholders held in 2020.
Remuneration costs for the President and CEO and other members of Executive Team (ET)
Other Other Other
President President President members members members
SEK and CEO 2022 and CEO 2021 and CEO 2020 of ET 2022 3) of ET 2021 of ET 2020 Total 2022 Total 2021 Total 2020
Salary 1) 19,154,852 18,208,859 17,727,726 132,945,295 110,043,431 98,063,266 152,100,147 128,252,290 115,790,992
Termination benefits – – – 25,503,967 – – 25,503,967 – –
Annual variable
remuneration provision
earned for the year – – – 90,908,181 52,507,185 37,992,529 90,908,181 52,507,185 37,992,529
Long-term variable
compensation provision 41,125,015 43,701,650 41,110,656 43,688,149 48,260,833 41,237,506 84,813,164 91,962,483 82,348,162
Pension costs 2) 9,856,121 9,569,049 9,113,376 42,248,588 40,886,802 39,685,920 52,104,709 50,455,851 48,799,296
Other benefits 135,743 555,688 770,276 20,167,043 11,199,631 14,360,413 20,302,786 11,755,319 15,130,689
Social charges and taxes 22,079,378 22,633,474 21,592,463 60,745,133 57,469,705 52,289,551 82,824,511 80,103,179 73,882,014
Total 92,351,109 94,668,720 90,314,497 416,206,356 320,367,587 283,629,185 508,557,465 415,036,307 373,943,682
1) Includes compensation for unused vacation days.
2) Includes cash payments to the President and CEO in lieu of defined contribution payment in a cost neutral way to Ericsson.
3) Does not include cash compensation paid to Rory Read during 2022 amounting to MUSD 32.76 for acceleration of existing restricted and performance stock units in Vonage Holdings Corp. (Vonage). Further
information is included in the “Remuneration report”.
Comments to the table – The group “Other members of ET 2021” and “Other members of ET 2020”
– Fredrik Jejdling was appointed Executive Vice President by the Board of comprises of the following 14 persons: MajBritt Arfert, Arun Bansal, Xavier
Directors effective November 7, 2017. He did not substitute the President Dedullen, Erik Ekudden, Niklas Heuveldop, Chris Houghton, Fredrik Jejdling,
and CEO as the deputy to the President and CEO in 2022. Information Jan Karlsson, Peter Laurin, Stella Medlicott, Carl Mellander, Nunzio Mirtillo,
regarding Fredrik Jejdling is included in the group “Other members of ET.” Fadi Pharaon and Åsa Tamsons.
The details of Fredrik Jejdling’s remuneration in 2022 can be found in the – The salary stated in the table for the President and CEO and other members
Remuneration report 2022. of the ET includes vacation pay paid during 2022 as well as other contracted
– Arun Bansal was appointed as Executive Vice President by the Board of compensation expenses in 2022.
Directors effective June 10, 2020. He did not substitute the President and – “Long-term variable compensation provision” refers to the compensation
CEO as the deputy to the President and CEO in 2022. He was relieved from costs for full year 2022 for all outstanding share-based plans.
his duties as Executive Vice President from June 1, 2022. Information
regarding Arun Bansal is included in the group “Other members of ET”. The Outstanding balances
details of Arun Bansal’s remuneration in 2022 corresponding to the period The Company has recognized the following liabilities relating to unpaid
until he was appointed as Executive Vice President can be found in the remunerations in the balance sheet:
Remuneration report 2022. – Ericsson’s commitments for defined benefit based pensions as of December
– The group “Other members of ET 2022” comprises of the following persons: 31, 2022, for other members of ET under IAS 19 amounted to 2022: SEK
MajBritt Arfert, Erik Ekudden, Niklas Heuveldop, Chris Houghton, Fredrik 37.6 million, 2021: SEK 47.4 million of which 2022: SEK 30.0 million, 2021:
Jejdling, Stella Medlicott, Carl Mellander, Nunzio Mirtillo, Fadi Pharaon SEK 32.9 million refers to the ITP and early retirement, and the remaining
and Åsa Tamsons. In addition, Scott Dresser joined ET on March 21, 2022, 2022 SEK 7.7 million, 2021 SEK 14.5 million to disability and survivors’
George Mulhern, Moti Gyamlani and Per Narvingar joined ET on June 1, pensions. The President and CEO does not have a Swedish defined benefit
2022 and Rory Read joined ET on July 21, 2022, Xavier Dedullen (left ET based pension plan, hence, Ericsson bears no commitment.
effective March 21, 2022 and Ericsson November 30, 2022), Jan Karlsson – For previous Presidents and CEOs, the Company has made provisions for
(left ET effective June 1, 2022), Peter Laurin (left ET effective June 1, 2022 defined benefit pension plans in connection with their active service periods
and Ericsson August 14, 2022) and Arun Bansal (left ET effective June 1, within the Company.
2022 and Ericsson December 31, 2022).
G3 Share-based compensation
Accounting treatment of Long-Term Variable Compensation Programs Share-Settled Programs
In note A1” Significant accounting policies”, the overall accounting policies for Long-Term Variable Compensation Program for the Executive Team
share-based payments within the Company are disclosed. In summary: The Long-Term Variable Compensation Program for the ET as approved by the
– Share-settled programs, the total compensation expense is calculated shareholders, is designed to provide long-term incentives for members of the
based on the fair value (FV) at grant date and recognized over the service ET and to incentivize the Company’s performance creating long-term value.
period of three years. Awards under LTV (Performance Share Awards) are granted to the par-
– Cash-settled plans, the accounting principles are the same as for any other ticipants, provided that certain performance conditions are met, to receive a
accruals or provisions. Prior to payout an accrual or provision is recognized number of shares, free of charge, following expiration of a three-year vesting
every period based on the present period’s best estimate of the total period (vesting period). Allotment of shares pursuant to Performance Share
amount. Any difference between total payout and the sum of accruals Awards are subject to the achievement of performance criteria which are
of provisions is recognized in the income statement in the period of final defined specific to each year’s program when the program is introduced.
payout. Which portion, if any, of the Performance Share Awards for LTV will vest is
determined at the end of the relevant performance period based on the satis-
Long-Term Variable Compensation faction of the predetermined performance criteria for that year’s LTV program
All long-term variable compensation programs have been designed to form (performance period). The performance criteria for the currently running
a part of a well-balanced total remuneration package and in general to span LTV and EPP are summarized in the below table along with the satisfaction
over a minimum of three years (service period). As these are variable compen- and achieved vesting levels for the ones which the performance period have
sation programs, the outcomes cannot be predicted when the programs are lapsed. It is generally required that the participant retains his or her employ-
introduced and rewards depend on long-term personal commitment, corpo- ment over a period of three years from the date of grant of awards to be eligible
rate performance and the share price performance. for receiving the performance awards.
Following discontinuation of the previous long-term variable compensation Provided that the performance criteria have been met during the perfor-
programs at the end of 2016, the shareholders approved the new Long-Term mance period and that the participant has retained his or her employment
Variable Compensation Program (LTV) for the Executive Team (ET). The (unless special circumstances are at hand) during the service period, allotment
Company also introduced the new Executive Performance Plan (EPP) for of vested shares will take place as soon as practicably possible following the
senior managers and the Key Contributor Plan (KC Plan) for key employees as expiration of the vesting period.
integral parts of its remuneration strategy starting from 2017. When determining the final vesting level of Performance Share Awards, the
All new programs are share-based payment programs as defined by IFRS 2 Board of Directors examines whether the vesting level is reasonable consider-
“Share-based Payment,” either share- or cash-settled. ing the Company’s financial results and position, conditions on the stock
LTV and EPP performance criteria

Program Vesting Opportunity Achieved
Year Target Criteria Weight Performance Period (linear pro-rata) Achievement Vesting Level
2022 2022 Group operating Range (SEK billion): 24.1–34.1 45% Jan 1, 2022–Dec 31, 2022 0%–200% SEK 32.2 162.76%
income (EBIT) billion 2)
2022 Absolute TSR Range: 6%-14% 25% Jan 1, 2022–Dec 31, 2024 0%–200%
2022 Relative TSR Ranking of Ericsson: 6–2 20% Jan 1, 2022–Dec 31, 2024 0%–200% 1)
2022 Group Environmental, CO2e emissions (ktonnes): 5% Jan 1, 2022–Dec 31, 2024 0%–200%
Social and Governance 265–200
(“ESG”) Increasing the representation 5% Jan 1, 2022–Dec 31, 2024 0%–200%
of women leaders in the Ericsson
Group: Range 22%–24%
2022 Total 100% 0%–200%
2021 2021 Group operating Range (SEK billion): 15.0–24.0 50% Jan 1, 2021–Dec 31, 2021 0%–200% SEK 27.4 200%
2021 Absolute TSR Range: 6%–14% 30% Jan 1, 2021–Dec 31, 2023 0%–200%
2021 Relative TSR Ranking of Ericsson: 6–2 20% Jan 1, 2021–Dec 31, 2023 0%–200% 1)
2021 Total 100% 0%–200%
2020 Absolute TSR Range: 6%–14% 30% Jan 1, 2020–Dec 31, 2022 0%–200% –6.65% 0.00%
2020 Relative TSR Ranking of Ericsson: 6–2 20% Jan 1, 2020–Dec 31, 2022 0%–200% 1) 12 out of 11 0.00%
2020 Total 100% 0%–200% 100.00%
2019 Absolute TSR Range: 6%–14% 30% Jan 1, 2019–Dec 31, 2021 0%–200% 9.00% 74.89%
2019 Relative TSR Ranking of Ericsson: 7–2 20% Jan 1, 2019–Dec 31, 2021 0%–200% 1) 6.52 out of 12 19.39%
2019 Total 100% 0%–200% 126.35%
1) The portion of the Performance Share Awards granted to a participant based on the relative TSR performance condition is subject to fulfilment of the related performance criteria over the performance period
compared to Peer Groups consisting of 11 companies for the program year 2022, 2021 and 2020 and 12 companies for the program years 2019. The vesting of the Performance Share Awards under this perfor-
mance condition will vary depending on the Company’s TSR performance ranking versus the other companies in the peer group at the end of the performance period.
2) Excludes restructuring charges and items not included in target performance criterion.
3) Excludes restructuring charges.
4) Excludes fines and similar related to the United States Department of Justice (DOJ) / U.S. Securities and Exchange Commission (SEC) resolution, including payments required pursuant to the DOJ Plea Agreement
announced by the Company on March 2, 2023.
Note G3, cont’d.

market and other circumstances, and if not, reserves the right to reduce the calculated as the volume weighted average of the market price of Ericsson B
vesting level to a lower level deemed appropriate. shares on Nasdaq Stockholm during the five trading days immediately follow-
In the event delivery of shares to the participants cannot take place under ing the publication of the Company’s interim report for the fourth quarter of
applicable law or at a reasonable cost and employing reasonable administra- 2020.
tive measures, the Board of Directors is entitled to decide that participants Following evaluation of the previously introduced Long-term variable
may, instead, be offered cash settlement. compensation programs, the Board of Directors decided to use the same per-
All major decisions relating to outcome of LTV are taken by the formance criteria for LTV 2021 as the ones used for LTV 2020, LTV 2019 and
Remuneration Committee, with approval by the full Board of Directors LTV 2018 in order to secure continuity and consistency in supporting achieve-
as required. ment of the Company’s 2022 targets. Hence again a one-year Group operating
income (EBIT) target measured over the period January 1, 2021 to December
2022 Long-Term Variable Compensation Program for the Executive Team 31, 2021 was included as a performance condition for LTV 2021 in addition
(LTV 2022) to the standard three-year total shareholder return (TSR) performance condi-
LTV 2022 was approved at the Annual General Meeting (AGM) of shareholders tions, which were also used for LTV 2020, LTV 2019 and LTV 2018.
held in 2022 and includes all members of the ET, a total of 15 ET members in The performance criteria relating to TSR are absolute TSR development and
2022, including the President and CEO. relative TSR development for the Ericsson B share over the period January 1,
The participants were granted Performance Share Awards on May 18, 2021 to December 31, 2023 (the performance period).
2022. The value of the underlying shares in respect of the Performance Share The performance criteria for LTV 2021 along with the details on how the
Awards made to the President and CEO was 190% of the annual base salary, performance criteria will be calculated and measured are explained in minutes
and for other participants ranged between 30% and 70% of the participants’ from the AGM 2021 under Item 16.
respective annual base salaries at the time of grant. The share price used The Board of Directors resolved on the achieved vesting level for the 2021
to calculate the number of shares to which the Performance Share Awards Group operating income (EBIT) performance criteria as 200% for this portion
entitles was calculated as the volume weighted average of the market price of the Performance Share Awards granted based on the 2021 Group operating
of Ericsson B shares on Nasdaq Stockholm during the five trading days imme- income (EBIT) outcome.
diately f ollowing the publication of the Company’s interim report for the fourth
quarter of 2021. 2020 Long-Term Variable Compensation Program for the Executive Team
Having evaluated the ongoing long-term variable compensation programs (LTV 2020)
and considering investor input obtained, the Remuneration Committee and the LTV 2020 was approved at the Annual General Meeting (AGM) of shareholders
Board of Directors proposed to the Annual General Meeting of shareholders held in 2020 and includes all members of the ET, a total of 15 ET members in
2022 a long-term variable compensation program 2022 for the Executive 2020, including the President and CEO.
Team similar to the long-term variable compensation program 2021 adding a The participants were granted Performance Share Awards on April 1, 2020.
Group Environmental, Social and Governance performance criterion (“ESG”). The value of the underlying shares in respect of the Performance Share Awards
The purpose is to further strengthen Ericsson’s commitment to long-term sus- made to the President and CEO was 180% of the annual base salary, and for
tainability and responsible business. Hence again a one-year Group operating other participants ranged between 30% and 70% of the participants’ respec-
income (EBIT) target measured over the period January 1, 2022 to December tive annual base salaries at the time of grant. The share price used to calculate
31, 2022 was included as a performance condition for LTV 2022 in addition the number of shares to which the Performance Share Awards entitles was
to the standard three-year total shareholder return (TSR) performance condi- calculated as the volume weighted average of the market price of Ericsson
tions, which were also used for LTV 2021, LTV 2020 and LTV 2019 however B shares on Nasdaq Stockholm during the five trading days immediately
with different weights. following the publication of the Company’s interim report for the fourth
The performance criteria relating to TSR are absolute TSR development and quarter of 2019.
relative TSR development for the Ericsson B share over the period January 1, Following evaluation of the previously introduced Long-term variable
2022 to December 31, 2024 (the performance period). The criteria related to compensation programs, the Board of Directors decided to use the same
ESG are split into two sub-components: reducing carbon dioxide equivalent performance criteria for LTV 2020 as the ones used for LTV 2019 and LTV
(“CO2e”) emissions in the Ericsson Group’s own activities and increasing the 2018 in order to secure continuity and consistency in supporting achievement
representation of women leaders in the Ericsson Group. The ESG performance of the Company’s 2020 targets. Hence again a one-year Group operating
criteria are being measured over the period January 1, 2022 to December 31, income (EBIT) target measured over the period January 1, 2020 to December
2024 (the performance period). 31, 2020 was included as a performance condition for LTV 2020 in addition
The Remuneration Committee and the Board decided to propose a long- to the standard three-year total shareholder return (TSR) performance condi-
term variable remuneration program for 2023 with a similar structure as tions, which were also used for LTV 2019, LTV 2018 and LTV 2017.
the long-term variable remuneration program for 2022 to the 2023 Annual The performance criteria relating to TSR are absolute TSR development and
General Meeting. relative TSR development for the Ericsson B share over the period January 1,
The performance criteria for LTV 2022 along with the details on how the 2020 to December 31, 2022 (the performance period).
performance criteria will be calculated and measured are explained in minutes The performance criteria for LTV 2020 along with the details on how the
from the AGM 2022 under Item 16. performance criteria will be calculated and measured are explained in minutes
The Board of Directors resolved on the achieved vesting level for the 2022 from the AGM 2020 under Item 17.
Group operating income (EBIT) performance criteria as 162.76% for this The Board of Directors resolved on the achieved vesting level for the 2020
portion of the Performance Share Awards granted based on the 2022 Group Group operating income (EBIT) performance criteria as 200% for this portion
operating income (EBIT) outcome. of the Performance Share Awards granted based on the 2020 Group operating
income (EBIT) outcome.
2021 Long-Term Variable Compensation Program for the Executive Team The Board of Directors also resolved on the achieved vesting levels for the
(LTV 2021) absolute and relative TSR development performance criteria as 0.00% and
LTV 2021 was approved at the Annual General Meeting (AGM) of shareholders 0.00% based on the achievement results of -6.65% absolute TSR and 12th
held in 2021 and includes all members of the ET, a total of 15 ET members in ranking for relative TSR respectively, which resulted in an overall achieved
2021, including the President and CEO. vesting level of 100.00% for LTV 2020 as illustrated in the table LTV and EPP
The participants were granted Performance Share Awards on May 3, 2021. Performance Criteria on the prior page.
The value of the underlying shares in respect of the Performance Share Awards
made to the President and CEO was 190% of the annual base salary, and for 2019 Long-Term Variable Compensation Program for the Executive Team
other participants ranged between 30% and 70% of the participants’ respec- (LTV 2019)
tive annual base salaries at the time of grant. The share price used to calculate LTV 2019 was approved at the AGM 2019 and includes a total of 14 ET mem-
the number of shares to which the Performance Share Awards entitles was bers in 2019, including the President and CEO, but excluding Helena Norrman
Note G3, cont’d.

who was not granted LTV 2019 due to her resignation, and Stella Medlicott Executive Performance Plan 2022 (EPP 2022)
and Fadi Pharaon who carried over their EPP entitlements for 2019 after their 165 senior managers were selected to participate in EPP 2022. The regular
appointments to the ET. award level is set at 15% and the high award level is set at 25% for all countries
The participants were granted Performance Share Awards on May 18, 2019. except for the USA/Canada. The regular and high award levels are set at 35%
The value of the underlying shares in respect of the Performance Share Awards and 45% respectively in the USA/Canada.
made to the President and CEO was 180% of the annual base salary, and for
other participants ranged between 30% and 70% of the participants’ respec- Executive Performance Plan 2021 (EPP 2021)
tive annual base salaries at the time of grant. The share price used to calculate 159 senior managers were selected to participate in EPP 2021. The regular
the number of shares to which the Performance Share Awards entitles was award level is set at 15% and the high award level is set at 25% for all countries
calculated as the volume weighted average of the market price of Ericsson B except for the USA. The regular and high award levels are set at 25% and 35%
shares on Nasdaq Stockholm during the five trading days immediately follow- respectively in the USA.
ing the publication of the Company’s interim report for the first quarter of 2019.
Following evaluation of the previously introduced Long-Term Variable Executive Performance Plan 2020 (EPP 2020)
Compensation Programs, the Board of Directors decided to use the same per- 155 senior managers were selected to participate in EPP 2020. The regular
formance criteria for LTV 2019 as the ones used for LTV 2018 in order to secure award level is set at 15% and the high award level is set at 25% for all countries
continuity and consistency in supporting achievement of the Company’s except for the USA. The regular and high award levels are set at 25% and 35%
2020 targets. Hence again a one-year Group operating income (EBIT) target respectively in the USA.
measured over the period January 1, 2019 to December 31, 2019 was included
as a performance condition for LTV 2019 in addition to the standard three-year Executive Performance Plan 2019 (EPP 2019)
total shareholder return (TSR) performance conditions, which were also used 161 senior managers were selected to participate in EPP 2019. The regular
for LTV 2018 and LTV 2017. award level is set at 15% and the high award level is set at 22.5%.
The performance criteria relating to TSR are absolute TSR development and The awards under EPP 2019 were paid in 2022 at the end of the vesting period
relative TSR development for the Ericsson B share over the period January 1, and EPP 2019 was officially closed.
2019 to December 31, 2021 (the performance period).
The performance criteria for LTV 2019 along with the details on how the Key Contributor Plans (KC Plans)
performance criteria will be calculated and measured are explained in minutes The KC Plan is a cash-settled retention plan. Employees, except for senior
from the AGM 2019 under Item 17. managers and the members of the ET, are selected as participants to KC Plan
The Board of Directors resolved on the achieved vesting level for the annually through a nomination process that identifies individuals according to
2019 Group operating income (EBIT) performance criteria as 200% for this performance, potential, critical skills, and business critical roles. Participants
portion of the Performance Share Awards granted based on a 2019 Group are assigned a potential award based on a percentage of their annual gross
operating income (EBIT) outcome excluding fines and similar related to the salary, which is converted into a number of synthetic shares based on the same
United States Department of Justice (DOJ) / U.S. Securities and Exchange market price of Ericsson B shares used for the respective year’s LTV.
Commission (SEC) resolutions. The KC Plan is a retention plan, therefore there are no performance criteria
The Board of Directors also resolved on the achieved vesting levels for the for vesting of awards. In general, there is a three-year service period for receiv-
absolute and relative TSR development performance criteria as 74,89% and ing the award in full and the award is subject only to continued employment
19,39% based on the achievement results of 9.00% absolute TSR and 6.52th during the service period. As of the KC 2019 plan the total service period is
ranking for relative TSR respectively. Which resulted in an overall achieved three years, however the payout is distributed over the entire service period
vesting level of 126.35% for LTV 2019 as illustrated in the table LTV and EPP with staggered payments according to the below schedule:
Performance Criteria on the prior page. – 25% of the award to be paid at the end of the first year,
Delivery of shares under LTV 2019 to CEO and entitled ET members is still – 25% of the award to be paid at the end of the second year, and
on hold given the enforcement actions. Given this position, the vesting (and – the remaining 50% of the award to be paid at the end of the third year.
delivery) of the shares is postponed to a later date; namely, until such time as
the Chairman of the Board together with the CLO authorize the final vesting of Accounting wise, the plans with three staggered payments are seen as three
shares under the LTV 2019. The LTV 2019 plan provides for delayed vesting. separate tranches. The tranches are accounted for as separate awards and
accrued in parallel with the same grant date but different vesting dates. The
Cash-Settled Plans consequence of the staggered payments is a front-end loaded cost for these
Executive Performance Plans (EPP) plans. The accounting model is referred to as staged vesting.
The Executive Performance Plan (EPP) is a cash-settled plan which uses the The value of each synthetic share is driven by the absolute share price
same performance criteria as the ones under the respective year’s long-term performance of Ericsson B shares during the service period. At the end of the
variable compensation program for the ET. service period, the allotted synthetic shares are converted into a cash amount,
Senior managers, except for the members of the ET, are selected as partici- based on the market price of Ericsson B shares Nasdaq Stockholm at the
pants to EPP annually through a nomination process that identifies individuals vesting date, and this final amount is paid to the participant in cash gross
according to performance, potential, critical skills, and business critical roles. before tax.
There are two award levels, high and regular, which represent the potential
award levels as a percentage of the participant’s annual gross salary, which Key Contributor Plan 2022 (KC Plan 2022)
are determined separately by the Board of Directors for each year’s plan before 7,704 employees were selected to participate in KC Plan 2022. There are at
the plan is launched. Participants are assigned a potential award, which is multiple levels between 10% - 40% of the participants’ annual gross salary.
converted into a number of synthetic shares based on the same market price The total service period is three years, however the payout is distributed over
of Ericsson B shares used for the respective year’s LTV. The three-year vesting the entire service period with staggered payments as explained under Key
period is the same as for the LTV. The vesting level of the award is subject to Contributor Plans (KC Plans).
the achievement of the same performance criteria over the same performance
period defined for the respective year and generally requires that the partici- Key Contributor Plan 2021 (KC Plan 2021)
pant retains his or her employment over the vesting period. 7,246 employees were selected to participate in KC Plan 2021. There are three
At the end of the vesting period, the allotted synthetic shares are converted award levels at 10%, 25% and 30% of the participants’ annual gross salary.
into a cash amount, based on the market price of Ericsson B shares at Nasdaq The total service period is three years, however the payout is distributed over
Stockholm at the vesting date, and this final amount is paid to the participant the entire service period with staggered payments as explained under Key
in cash gross before tax. Contributor Plans (KC Plans).
Note G3, cont’d.

Key Contributor Plan 2020 (KC Plan 2020) The total service period is three years, however the payout is distributed over
7,007 employees were selected to participate in KC Plan 2020. There are three the entire service period with staggered payments as explained under Key
award levels at 10%, 25% and 30% of the participants’ annual gross salary. Contributor Plans (KC Plans) and was officially closed in 2022.
The total service period is three years, however the payout is distributed over
the entire service period with staggered payments as explained under Key Number of shares and synthetic shares
Contributor Plans (KC Plans). The awards granted to the participants of the LTV programs and the develop-
ment of the granted shares over time, considering the fulfilment of performance
Key Contributor Plan 2019 (KC Plan 2019) conditions, are displayed in the below table, together with the number of
6,941 employees were selected to participate in KC Plan 2019. There are three synthetic shares for the EPP and KC plans.
award levels at 10%, 25% and 30% of the participants’ annual gross salary.
Number of shares and synthetic shares

(million) Executive team programs Of which the President and CEO
Share-settled programs LTV 2022 LTV 2021 LTV 2020 LTV 2019 Total LTV 2022 LTV 2021 LTV 2020 LTV 2019 Total
Maximum shares required 2.0 2.1 2.5 3.0 9.6 – – – – –
Granted shares 0.7 0.6 0.9 0.6 2.8 0.3 0.3 0.4 0.3 1.3
Outstanding number of shares
beginning of 2022 – 0.9 1.3 0.8 3.0 – 0.5 0.6 0.3 1.4
Exercised during 2022 – – – – – – – – – –
Forfeited during 2022 – – – – – – – – – –
Increase/decrease due to
performance condition 2022 0.2 – –0.4 – –0.2 0.1 – –0.2 – –0.1
Outstanding number of shares
end of 2022 0.9 0.9 0.9 0.8 3.5 0.4 0.5 0.4 0.3 1.6
Executive performance program Key contributors plans

Cash-settled plan EPP 2022 EPP 2021 EPP 2020 EPP 2019 Total KC 2022 KC 2021 KC 2020 KC 2019 Total
Synthetic shares 1.1 1.1 1.0 – 3.2 9.5 5.4 5.0 – 19.9
Compensation expense The compensation expense for the EPP and the KC Plans during 2022,
The compensation expense is based on the FV and the number of shares or which are cash settled, was SEK 5 million and SEK 356 million respectively as
synthetic shares. The compensation expense for the share-settled long-term shown in the table Compensation expense for LTV 2019-2022 below. The total
variable compensation programs for the President and CEO and the ET during compensation expense during 2022 amounted to SEK 450 (1,346) million. The
2022 was SEK 89 million. total provision for the cash-settled plans amounted to SEK 985 (1,591) million,
including social charges of SEK 120 (190) million, at the end of 2022.
Compensation expense for LTV 2019–2022

Share-settled programs 2022 2021 2020 2019 Total
LTV 2022 12 – – – 12
LTV 2021 36 24 – – 60
LTV 2020 31 31 23 – 85
LTV 2019 10 28 28 17 83
Total executive team programs 89 83 51 17 240
Of which the President and CEO 41 38 24 8 111
Cash-settled plans
EPP 2022 12 – – – 12
EPP 2021 15 17 – – 32
EPP 2020 –19 56 34 – 71
EPP 2019 –3 14 50 11 72
Total executive performance plans 5 87 84 11 187
KC 2022 280 – – – 280
KC 2021 89 355 – – 444
KC 2020 5 376 523 – 904
KC 2019 –18 194 335 248 759
Total key contributor plans 356 925 858 248 2,387
Total cash-settled plans 361 1,012 942 259 2,574
Total compensation expense 450 1,095 993 276 2,814
Note G3, cont’d.

Fair value criteria the number of shares is adjusted in relation to the achievement level of
The compensation expense for the share-settled plans is based on FV and the performance criteria at the end of the performance period.
the number of shares. The FV for the LTV programs includes adjustments for The compensation expense for the cash-settled plans is based on the FV
absolute and relative TSR development performance criteria at the grant date, and the number of synthetic shares allocated. The FV for the EPP includes
using a Monte Carlo model, which uses a number of inputs, including expected the same criteria as the share-settled plans and calculated in a similar way,
dividends, expected share price volatility and the expected period to exercise. however reassessed quarterly with updated criteria. The FV for the KC Plans
The performance criteria of the LTV program are also based on the outcome of are the share price reduced by the net present value of the dividend expected
the Group operating income (EBIT) as per fiscal years 2022, 2021 and 2020. during the service period. The KC Plans 2022, 2021 and 2020 have three FV
The FV for the Group operating income (EBIT) performance criteria is calcu- based on the three different service periods. The FV per performance criteria
lated as the share price at grant date, reduced by the net present value of the and program is shown in the table Fair values below.
dividend expected during the three-year vesting period. For the performance
Fair values (SEK)

Executive team programs LTV 2022 LTV 2021 LTV 2020 LTV 2019
Share price at grant 78.88 116.66 78.88 90.70
Fair value Absolute TSR 41.18 113.47 54.69 87.92
Fair value ESG – Environmental 71.45 – – –
Fair value ESG – Social 71.45 – – –
Fair value Relative TSR 54.48 108.61 98.06 94.63
Fair value Group operating income (EBIT) 71.45 110.70 74.22 86.94
Executive performance plans EPP 2022 EPP 2021 EPP 2020 EPP 2019
Fair value Absolute TSR 10.53 3.63 – 78.88
Fair value ESG – Environmental 54.37 – – –
Fair value ESG – Social 54.37 – – –
Fair value Relative TSR 17.08 1.39 – 78.88
Fair value Group operating income (EBIT) 54.37 56.79 59.31 78.88
Key contributor plans KC 2022 KC 2021 KC 2020 KC 2019

Fair value – Tranche 1 59.31 94.13 109.80 84.12
Payout of Cash-settled Plan Option agreements

During 2022 four plans vested: EPP 2019 and KC Plan 2019 tranche 3 (vesting Prior to taking office as President and CEO of Ericsson, Board member Börje
May 18) and KC Plan 2020 tranche 2 and KC Plan 2021 tranche 1 (vesting Ekholm entered into an option agreement in 2016 with Investor AB and
February 18). The share price for the plan that vested February 18 was AB Industrivärden, shareholders of Ericsson. Each of these two shareholders
SEK 94.13 and for the plans that vested May 18 SEK 78.88 and the accumu- has issued 1,000,000 call options to Börje Ekholm on market terms (valuation
lated payout to the participants amounted to SEK 784 million. conducted, using the Black & Scholes model, by an independent third party).
Under the agreements, Börje Ekholm has purchased in total 2,000,000 call
The Ericsson share purchase plan (ESPP) options, issued by the shareholders, for a purchase price of SEK 0.49 per call
Ericsson is committed to helping employees thrive and to recognizing them option. Each call option entitles the purchase of one Ericsson Class B share
for the impact they create by providing opportunities to enrich their working from the shareholders at a strike price of SEK 80 per share (to be recalculated
experience. In order to encourage employees to play an active role in achieving to neutralize the effects of dividend payments during the option period) during
the Company’s purpose, further create sense of belonging and ownership, the one year after a seven-year period. Due to the fact that the call options were
new Ericsson share purchase plan was launched in November 2021. At the purchased on market terms as described above, no compensation expense
end of 2022 the plan is implemented in 79 countries to approximately 90,500 has been recognized by the Company and will not be recognized during the
eligible employees. Further deployment will be pursued in additional countries remaining part of the seven-year period.
where possible in line with local statutory legislation during 2023. In 2019 Investor AB, shareholder of Ericsson, made an offer to the Board
The ESPP is an all-employee share purchase plan that enables employees Chairs of its listed core investment to purchase call options relating to shares
to purchase Ericsson B-shares up to a maximum value of SEK 50,000 per year in the respective core investment. Following this offer, Ronnie Leten, Chair
via monthly payroll deduction. In recognition of the employees’ commitment, of the Board of Directors, entered into such a call option agreement with
Ericsson supports the participants with a net cash payment up to 15% of their Investor AB with respect to Ericsson Class B share. Under the agreement,
elected contribution amounts and will cover the tax on the Company sup- Investor AB has issued 128,452 call options to Ronnie Leten on market terms
ported amount, which is payable via payroll. Under the ESPP participants will (valuation conducted, using the Black & Scholes model, by an independent
acquire Ericsson B shares at market price on the stock exchange and the ESPP third party) and Ronnie Leten has purchased these call options for a purchase
does therefore not have any dilutive effect. price of SEK 15.57 per call option. Each call option entitles the purchase of
one Ericsson Class B share from Investor AB at a strike price of SEK 87.97 per
Ericsson share purchase plan share (to be recalculated to neutralize the effects of dividend payments during
Number of Take-up rate the option period) during one year after a four-year period starting February
countries with Number of – percent of eligible 5, 2019. Due to the fact that the call options were purchased on market terms
Eligible employees ESPP participants employees as described above, no compensation expense has been recognized by the
90,500 79 16,319 18.0% Company and will not be recognized during the remaining part of the period.
G4 Employee information
Employee numbers, wages and salaries
Average number of employees by gender and market area
2022 2021
Women Men Total Women Men Total
South East Asia, Oceania and India 5,700 20,902 26,602 5,470 20,828 26,298
North East Asia 4,376 8,711 13,087 4,579 9,323 13,902
North America 2,471 8,415 10,886 2,269 7,999 10,268
Europe and Latin America 1) 12,017 34,637 46,654 11,581 34,336 45,917
Middle East and Africa 883 3,629 4,512 823 3,549 4,372
Total 25,447 76,294 101,741 24,722 76,035 100,757
1) Of which in EU 9,006 26,259 35,265 8,728 25,971 34,699
Of which in Sweden 3,408 10,635 14,043 3,173 10,237 13,410
Number of employees by market area at year-end Wages and salaries and social security expenses
2022 2021 (SEK million) 2022 2021
South East Asia, Oceania and India 27,761 26,369 Wages and salaries 73,526 62,823
North East Asia 13,207 13,091 Social security expenses 15,665 14,639
North America 11,993 10,344 Of which pension costs 6,316 5,601
Europe and Latin America 1) 48,023 47,064
Middle East and Africa 4,545 4,454 Amounts related to the President and CEO and the Executive Leadership Team
Total 105,529 101,322 are included in the table above.
1) Of which in EU 36,594 35,950
Of which in Sweden 14,481 14,183 Remuneration to Board members and Presidents in subsidiaries
(SEK million) 2022 2021
Salary and other remuneration 477 572
Number of employees by gender and age at year-end 2022
Of which annual variable remuneration 90 80
Percent
Pension costs 1) 34 41
Women Men of total
Under 25 years old 1,543 2,435 4%
1) Pension costs are over and above any social security charges and taxes.
25–35 years old 9,848 21,790 30%

36–45 years old 8,051 27,595 34% Board members, Presidents and Group management by gender at year end
46–55 years old 5,261 18,646 22% 2022 2021
Over 55 years old 2,229 8,131 10% Women Men Women Men
Percent of total 26% 74% 100% Parent Company
Board members and
President 36% 64% 23% 77%
Employee movements Group Management 19% 81% 20% 80%
2022 2021
Subsidiaries
Headcount at year-end 105,529 101,322
Board members and
Employees who have left the Company 13,028 11,631
Presidents 20% 80% 21% 79%
Employees who have joined the Company 17,235 12,129
Temporary employees 627 868
Section H – Other
H1 Taxes
The Company’s tax expense for 2022 was SEK –5,497 (–6,270) million or Deferred tax balances
22.3% (21.4%) of income after financial items. The tax rate may vary between Deferred tax assets and liabilities are derived from the balance sheet items as
years depending on business and geographical mix. Items reported for income shown in the table below.
taxes include the impact of the Swedish tax rate reduction which was signed
into law on June 14, 2018. The law enacts a corporate income tax of 21.4% Tax effects of temporary differences and tax loss carry-forwards
from January 1, 2019 and then reduces it to 20.6% from January 1, 2021. Deferred Deferred tax Net
tax assets liabilities balance
Income taxes recognized in the income statement 2022
2022 2021 2020 Intangible assets and property, plant
Current income taxes for the year –7,353 –6,110 –5,470 and equipment 1,161 8,135
Current income taxes related to prior years 253 –337 –175 Current assets 3,605 1,055
Deferred tax income/expense (+/–) 1,617 188 –3,911 Post-employment benefits 5,558 571
Share of taxes in joint ventures and Provisions 5,234 –
associated companies –14 –11 –33 Deferred tax credits 2,081 –
Income tax expense –5,497 –6,270 –9,589 Other 1,837 295
Loss carry-forwards 5,190 –
Deferred tax assets/liabilities 24,666 10,056 14,610
A reconciliation between reported tax expense for the year and the theoretical
tax expense that would arise when applying statutory tax rate in Sweden, Netting of assets/liabilities –5,272 –5,272
20.6% (20.6%), on the consolidated income before taxes, is shown in the table Deferred tax balances, net 19,394 4, 784 14,610
below. 2021
Taxes were positively impacted by SEK 411 (969) million as a result of Intangible assets and property, plant
utilization of previously impaired withholding tax assets in Sweden and nega- and equipment 160 1,331
tively impacted by the tax effect of the provision made in relation to a potential Current assets 3,605 862
resolution with the United States Department of Justice (DOJ) of SEK 450 Post-employment benefits 6,782 567
million 1). Provisions 3,555 –
The withholding tax expense 2020 includes an impairment of withholding Deferred tax credits 5,288 –
tax of SEK –1,393 million. Other 1,425 44
Loss carry-forwards 4,214 –
Reconciliation of Swedish income tax rate with effective tax rate Deferred tax assets/liabilities 25,029 2,804 22,225
2022 2021 2020 Netting of assets/liabilities –1,920 –1,920
Calculated tax expense at Swedish tax Deferred tax balances, net 23,109 884 22,225
rate 20.6% (20.6%) –5,070 –6,025 –5,823
Effect of foreign tax rates –605 –324 –616
Current income taxes related to Changes in deferred taxes, net
prior years 253 –337 –175 2022 2021
Remeasurement of tax loss Opening balance, net 22,225 25,207
carry-forwards –49 –175 –258
Recognized in net income 1,617 188
Remeasurement of deductible
temporary differences 15 220 369 Recognized in other comprehensive income –2,099 –556
Withholding tax expense – – –1,393 Balances regarding acquired/divested businesses –3,911 171
Reversal of impaired withholding tax 411 969 – Deferred tax credits utilization –3,586 –3,027
Tax effect of non-deductible expenses –760 –975 –2,079 Translation difference 364 242
Tax effect of non-taxable income 327 392 372 Closing balance, net 14,610 22,225
Tax effect of changes in tax rates –19 –15 14
Income tax expense –5,497 –6,270 –9,589 Total tax reported in other comprehensive income (OCI) amounted to
Effective tax rate 22.3% 21.4% 35.2% SEK –2,980 (–556) million, of which actuarial gains and losses related to
pensions constituted SEK –2,093 (–675) million, revaluation of borrow-
ings SEK –212 (–6) million, cash flow hedges SEK –671 (126) million and
non-controlling interests SEK –4 (–1) million. Of the total tax effect reported
in OCI, SEK –2,099 (–556) million is deferred tax and SEK –881 (0) million
is current tax.
Deferred tax assets are only recognized in countries where the Company
expects to be able to generate corresponding taxable income in the future to
benefit from tax reductions.
Tax loss carry-forwards

Significant tax assets regarding tax loss carry-forwards are reported to the
extent that realization of the related tax benefit through future taxable profits
is probable also when considering the period during which these can be
utilized, as described below.
The majority of the recognized tax loss carry-forwards pertains to Sweden,
US, UK and Germany. These countries have long or indefinite periods of utiliza-
tion. Of the total SEK 5,190 (4,214) million recognized deferred tax assets
related to tax loss carry-forwards, SEK 3,508 (3,512) million relates to Sweden.
1) On March 2, 2023, the Company reached a resolution with the DOJ (the DOJ Plea Agreement)
and agreed to pay a fine of approximately SEK 2.2 billion.
Note H1, cont’d.

Future income projections considering 5G roll-out, technology leadership
based on increased investments in R&D, strengthened competitive position
H3 Statement of cash flows
and expansion of the product portfolio, support the conclusion that the Cash and cash equivalents include cash of SEK 19,746 (24,014) million and
deferred tax assets will be utilized in the foreseeable future. cash equivalents of SEK 18,603 (30,036) million. For more information regard-
As of December 31, 2022, the recognized tax loss carry-forwards amounted ing the disposition of cash and cash equivalents and unutilized credit commit-
to SEK 23,438 (19,635) million. The increase is primarily attributable to ments, see note F1 “Financial risk management.”
Vonage acquisition. Cash and cash equivalents as of December 31, 2022, include SEK 2,246
The tax value of the tax loss carry-forward is reported as a tax asset based (2,616) million in countries where there exist significant cross-border conver-
on the indefinite utilization period and the expectation that the group will sion restrictions due to hard currency shortage or strict government controls.
realize a significant taxable income to offset these loss carry-forwards. The This amount is not directly available for distribution to the Parent Company,
final years in which the recognized tax loss carry-forwards can be utilized are however it may be used to pay normal business expenditures in the local
shown in the following table. jurisdictions, thereby reducing group liabilities.
Tax loss carry-forwards Adjustments to reconcile net income to cash

Tax loss 2022 2021 2020
Year of expiration c arry-forwards Tax value Property, plant and equipment
2023 17 3 Depreciations 4,114 3,674 3,602
2024 12 2 Impairment losses 274 198 512
2025 19 6 Total 4,388 3,872 4,114
2026 85 22
2027 1,236 317 Right-of-use assets
2028 or later (also includes unlimited Depreciations 2,451 2,277 2,387
carry-forwards) 22,069 4,840 Impairment losses 66 – 47
Total 23,438 5,190 Total 2,517 2,277 2,434
Intangible assets
In addition to the table above there are tax loss carry-forwards of SEK 8,490 Amortizations
(4,038) million at a tax value of SEK 1,777 (671) million (including SEK 2,394 Capitalized development expenses 1,586 1,343 906
million relating to the recent US acquisitions) that have not been recognized Customer relationships, IPRs and other
due to judgments that they are unlikely to be utilizable against future taxable intangible assets 1,991 1,164 1,083
profits in the respective jurisdictions. The majority of the tax loss carry- Total amortizations 3,577 2,507 1,989
forwards have an expiration date in excess of five years. Impairments
Risk assessment on the business plans is carried out on a regular basis, Customer relationships, IPRs and other
and deferred tax asset recoverability analysis will be performed if conditions intangible assets 61 201 137
suggest that such assets may be impaired. Goodwill – 112 –
The adoption of the amendment to IAS 12 Income Taxes: “Deferred Tax Total impairments 61 313 137
related to Assets and Liabilities arising from a Single Transaction” from Total 3,638 2,820 2,126
1 January 2023, is not expected to have a material impact on the deferred Total depreciation, amortization and
tax balances, however it is expected to impact the disclosure of deferred tax impairment losses on property, plant
and equipment and intangible assets 10,543 8,969 8,674
balances which will be restated as appropriate in 2023.
Taxes 5,383 6,576 10,436
H2
Dividends from joint ventures/associated
companies 1) 58 90 43
Earnings per share Undistributed earnings in joint ventures/
associated companies 1) –3 270 331
Earnings per share Gains/losses on investments and sale of
2022 2021 2020 operations, intangible assets and PP&E,
net 2) –287 –971 77
Basic
Other non-cash items 3) 1,944 2,209 370
Net income attributable to owners of the
Parent Company (SEK million) 18,724 22,694 17,483 Total adjustments to reconcile
net income to cash 17,638 17,143 19,931
Average number of shares outstanding,
basic (millions) 3,330 3,329 3,323 1) See note E3 “Associated companies.”
Earnings per share, basic (SEK) 5.62 6.82 5.26
2) Includes revaluation gains and losses on investments, see note B4 “Other operating income and
expenses.”
Diluted
3) Relates mainly to unrealized foreign exchange, gains/losses on financial instruments.
Net income attributable to owners of the

Parent Company (SEK million) 18,724 22,694 17,483 For information about reconciliation of liabilities arising from financing
Average number of shares outstanding, activities, see note F4 “Interest-bearing liabilities.”
basic (millions) 3,330 3,329 3,323
Dilutive effect for stock purchase (millions) 4 3 3
Average number of shares outstanding,
diluted (millions) 3,334 3,332 3,326
Earnings per share, diluted (SEK) 5.62 6.81 5.26
Note H3, cont’d.

Acquisitions/divestments of subsidiaries and other operations H5 Fees to auditors
Acquisitions Divestments
2022 Fees to auditors
Cash flow from business combinations 1) –51,734 20 2022 Deloitte Others Total
Acquisitions/divestments of other investments –261 287 Audit fees 163 7 170
Total –51,995 307 Audit-related fees 7 2 9
Tax fees 2 11 13
2021
Other fees 1 22 23
Cash flow from business combinations 1) –256 273
Total 173 42 215
Acquisitions/divestments of other investments –133 175
Total –389 448
2021 Deloitte Others Total
2020 Audit fees 132 8 140
Cash flow from business combinations 1) –9,534 4 Audit-related fees 9 1 10
Acquisitions/divestments of other investments –123 55 Tax fees 2 6 8
Total –9,657 59 Other fees 1 2 3
1) See also note E2 “Business combinations.” Total 144 17 161
2020 Deloitte Others Total
H4 Related party transactions Audit fees

Audit-related fees
97
8
9
–
106
8
Tax fees 4 6 10
Related party transactions, SEK billion
Other fees 5 2 7
2022 2021 2020
Total 114 17 131
Sales to Ericsson Nikola Tesla 0.3 0.4 0.4
Purchases from Ericsson Nikola Tesla 1.5 1.2 1.2
Loans to MediaKind (Leone Media Inc.) 0.6 0.5 0.5 At the 2022 Annual General Meeting Deloitte was appointed auditor for the
period until the 2023 Annual General Meeting.
The audit-related services include quarterly reviews and assurance on
IAS 24, “Related Party Disclosures” requires disclosure of related party rela-
Ericsson’s Sustainability and Corporate Responsibility report. The tax services
tionships, transactions and outstanding balances.
include corporate tax compliance work. Other services include work related to
During 2022, various minor related party transactions were executed pursu-
agreed-upon-procedures engagements.
ant to contracts based on terms customary in the industry and negotiated on
an arm’s length basis. The main related party transactions relate to Ericsson
Nikola Tesla d.d located in Croatia, where Ericsson holds 49.07% of the shares
and to MediaKind (Leone Media Inc.) located in US, where Ericsson holds
45.5% of the shares. For information regarding equity and Ericsson’s share of
assets, liabilities and income in joint ventures and associated companies, see
note E3 “Associated companies.”
For information regarding transactions with the Board of Directors and
Group management, see note G2 “Information regarding members of the
Board of Directors and Group management.”
For information about the Company’s pension trusts, see note G1 ”Post-
employment benefits.”
H6 Events after the reporting period

Proposals from the Nomination Committee Update on deferred prosecution agreement
On January 11, 2023, Ericsson announced the Nomination Committee’s In 2019, Ericsson entered into a deferred prosecution agreement (DPA) with
proposal that the shareholders elect at the Annual General Meeting 2023 ten the United States Department of Justice (DOJ) in order to resolve past (prior to
ordinary board members with no deputy directors. The Nomination Committee 2017) Foreign Corrupt Practices Act (FCPA) violations relating to misconduct
proposed that the following persons be elected as board members: in certain countries. The DPA provided that, in the event of any breach of its
– Jan Carlson, Chairman (re-election as director, new election as Chairman) ongoing DPA obligations, the Company could be prosecuted for the historical
– Jon Fredrik Baksaas (re-election) FCPA violations covered by the DPA.
– Carolina Dybeck Happe (re-election) As announced in October 2021 and March 2022, the DOJ notified Ericsson
– Börje Ekholm (re-election) that it failed to provide certain documents and information to the DOJ in a
– Eric A. Elzvik (re-election) timely manner and did not adequately report to the DOJ certain information
– Kristin S. Rinne (re-election) relating to the 2019 internal Iraq investigation. The DOJ has not alleged or
– Helena Stjernholm (re-election) charged Ericsson with any new criminal misconduct since the start of the DPA.
– Jacob Wallenberg (re-election) The Company’s internal investigation and its cooperation with authorities in
– Jonas Synnergren (new election) relation to the matters discussed in a 2019 Iraq-related internal investigation
– Christy Wyatt (new election) report remain open and ongoing. The Company continues to thoroughly inves-
tigate the matters in full cooperation with the DOJ and the SEC. As previously
In addition, the Nomination Committee informed the Company that the current disclosed, the Company’s 2019 investigation did not conclude that Ericsson
chairman, Ronnie Leten, and board members Kurt Jofs and Nora Denzel had made or was responsible for any payments to any terrorist organization and
informed the Nomination Committee that they will not stand for re-election at significant further investigation over the course of 2022 has not altered this
the Annual General Meeting 2023. conclusion. Since 2019, Ericsson has taken substantial remedial measures,
The Company expects to hold its Annual General Meeting on March 29, 2023, overseen by the Board of Directors. These include enhancing its group-wide
and the Nomination Committee’s complete proposals and motivated state- approach to risk management and strengthening its compliance program
ment are available on the Company’s website www.ericsson.com. and internal controls. The Company agreed in December 2022 to extend its
independent compliance monitorship with one year, until June 2024, to further
Ericsson announces changes to the Executive Team our efforts to embed best-in-class compliance, risk management and internal
On January 25, 2023, Ericsson announced that Jenny Lindqvist has been controls across the organization.
appointed as Senior Vice President, Head of Market Area Europe and Latin On March 2, 2023, the Company reached a resolution (DOJ Plea Agreement)
America, as of February 1, 2023. Effective the same date she will become with the DOJ regarding non-criminal breaches under its DPA. Under the DOJ
member of the Ericsson Executive Team, reporting to the President & CEO . Plea Agreement, Ericsson will plead guilty to previously deferred charges
Jenny Lindqvist has a Master of Science in Business and Economics from relating to conduct prior to 2017. In addition, Ericsson has agreed to pay a
Stockholm School of Economics. Previous management positions within fine of USD 206,728,848. The entry of the DOJ Plea Agreement will bring the
Ericsson Business Area and Market Area organizations include Head of Global DPA to an end. In the fourth quarter of 2022, the Company made a provi-
Customer Unit Telia Company, Head of Solution Line Intelligent Transport sion of SEK 2.3 billion (approx. USD 220 million) in relation to the DOJ Plea
Systems, Key Account Manager Telenor, Managed Services Engagement Agreement, including estimated expenses (SEK 0.1 billion) for the extended
Lead and Business Manager Multimedia. Previous positions outside Ericsson compliance monitorship.
include roles in management consulting in France and Sweden, as well as in
Pharmaceuticals in the Philippines.
As a member of Ericsson’s Executive Leadership Team, Jenny Lindqvist
succeeds Stefan Koetz who has been acting in this role as of June 1, 2022.
Stefan will take on a new role as Head of Strategic Projects for Market Area
Europe and Latin America.
Financial report 2022 Parent Company financial statements with notes 89
Parent Company
financial statements with notes
Contents
Parent Company financial statements 101 P10 Receivables and liabilities –
subsidiary companies
90 Parent Company income statement and
statement of comprehensive income 101 P11 Other current receivables
91 Parent Company balance sheet 101 P12 Equity and other
comprehensive income
93 Parent Company statement of cash flows
102 P13 Contributions
94 Parent Company statement of changes in
stockholders’ equity 102 P14 Post-employment benefits
103 P15 Other provisions
103 P16 Interest-bearing liabilities
Notes to the Parent Company
financial statements 104 P17 Financial risk management
and financial instruments
95 P1 Significant accounting policies
105 P18 Other current liabilities
96 P2 Other operating income
and expenses 105 P19 Trade payables
96 P3 Financial income and expenses 106 P20 Assets pledged as collateral
96 P4 Taxes 106 P21 Contingent liabilities
97 P5 Intangible assets 106 P22 Statement of cash flows
97 P6 Property, plant and equipment 106 P23 Leases
98 P7 Financial assets 106 P24 Information regarding employees
99 P8 Investments 107 P25 Related party transactions
100 P9 Trade receivables and customer 107 P26 Fees to auditors
finance 107 P27 Events after the reporting period
90 Parent Company financial statements Financial report 2022
Parent Company
financial statements
Parent Company income statement
Selling expenses –298 –470 –506

Administrative expenses –1,194 –350 –872
Operating expenses –1,492 –820 –1,378
Other operating income and expenses P2 691 1,770 2,866

EBIT (loss) –801 950 1,488
Financial income and expenses, net 1) P3 19,213 8,399 6,944

Income after financial items 18,412 9,349 8,432
Contributions to subsidiaries, net P13 –7,272 –1,526 –1,540

11,140 7,823 6,892
Taxes 2) P4 631 –167 –428
Net income 11,771 7,656 6,464
1) 2021 and 2020 restated as described in note P1 with an impact of SEK 31 million in 2021 and SEK 99 million in 2020.
2) 2021 and 2020 restated as described in note P1 with an impact of SEK –6 million in 2021 and SEK –20 million in 2020.
Parent Company statement of comprehensive income (loss)

January–December, SEK million 2022 2021 2020
Net income (loss) 11,771 7,656 6,464

Items that will not be reclassified to profit or loss
Gains/losses arising during the period 3,703 –26 –
Transfer to investments –3,677 – –
Tax on items that will not be reclassified to profit or loss –758 – –
Total other comprehensive loss, net of tax 1) –732 –26 –
Total comprehensive income 11,039 7,630 6,464
1) 2021 and 2020 restated as described in note P1 with a net impact of SEK –25 million in 2021 and SEK –79 million in 2020.
Financial report 2022 Parent Company financial statements 91
Parent Company balance sheet

December 31, SEK million Notes 2022 2021
Assets
Fixed assets
Intangible assets P5 4 8
Tangible assets P6 380 413
Financial assets
Investments
Subsidiaries P7, P8 128,638 72,009
Joint ventures and associated companies P7, P8 628 1,184
Other investments P7 2,039 2,175
Receivables from subsidiaries P7, P10 15,414 13,284
Customer finance, non-current P9 222 287
Deferred tax assets P4 586 507
Other financial assets, non-current P7 36 544
Interest-bearing securities, non-current P7 9,157 30,615
157,104 121,026
Current assets
Receivables
Trade receivables P9 11 1
Customer finance, current P9 322 499
Receivables from subsidiaries P10 24,180 25,035
Current income taxes 12 16
Other current receivables P11 3,139 1,813
Interest-bearing securities, current P17 8,540 12,722
Cash and cash equivalents P17 23,731 37,128
59,935 77,214
Total assets 217,039 198,240
Parent Company balance sheet, cont’d.

December 31, SEK million Notes 2022 2021
Stockholders’ equity, provisions and liabilities
Stockholders’ equity P12
Capital stock 16,672 16,672
Revaluation reserve 20 20
Statutory reserve 31,472 31,472
Restricted equity 48,164 48,164
Retained earnings 25,982 27,328
Net income 11,771 7,656
Non-restricted equity 37,753 34,984
85,917 83,148
Provisions
Post-employment benefits P14 – –
Other provisions P15 2,435 293
2,435 293
Notes and bond loans P16 19,712 13,430
Other borrowings, non-current P16 7,040 8,586
Liabilities to subsidiaries P10 – 20
Other non-current liabilities 83 370
26,835 22,406
Current liabilities
Borrowings, current P16 2,814 9,405
Trade payables P19 542 419
Liabilities to subsidiaries P10 94,401 80,668
Other current liabilities P18 4,095 1,901
101,852 92,393
Total stockholders’ equity, provisions and liabilities 217,039 198,240
Financial report 2022 Parent Company financial statements 93
Parent Company statement of cash flows

Operating activities
Net income (loss) 1) 11,771 7,656 6,464
Adjustments to reconcile net income to cash 2) P22 8,382 2,202 5,485
20,153 9,858 11,949
Changes in operating net assets

Customer finance, current and non-current 242 135 712
Trade receivables –5 94 –554
Trade payables 243 –124 –229
Provisions and post-employment benefits 2,142 –50 –325
Other operating assets and liabilities, net –1,068 519 1,230
1,554 574 834
Interest received 1,708 759 523

Interest paid –1,542 –634 –840
Taxes paid/received –259 –94 –246
Cash flow from operating activities 21,614 10,463 12,220
Investing activities
Investments in property, plant and equipment –81 –62 –253
Investments in intangible assets – – –
Sales/disposals of property, plant and equipment – – –
Investments in shares and other investments –58,586 –6,657 –1,552
Divestments of shares and other investments 552 2,076 511
Other investing activities –3,634 66 1,174
Purchase of investments –13,583 –35,415 –13,637
Sale of investments 40,541 20,114 12,289
Cash flow from investing activities –34,791 –19,878 –1,468
Cash flow before financing activities –13,177 –9,415 10,752
Financing activities
Borrowings from subsidiaries 57,291 144,574 131,538
Repayment of loans from subsidiaries –53,716 –150,656 –135,585
Proceeds from issuance of borrowings 7,777 7,574 1,686
Repayment of borrowings –9,993 –5,066 –7,517
Stock issue – – –
Sale/repurchase of own shares – 42 163
Dividends paid –8,325 –6,658 –4,985
Settled contributions from/to (–) subsidiaries –1,526 –1,540 –1,961
Other financing activities 3) 7,353 30,375 4,808
Cash flow from financing activities –1,139 18,645 –11,853
Effect from remeasurement in cash 919 –877 76

Net change in cash –13,397 8,353 –1,025
Cash and cash equivalents, beginning of period 37,128 28,775 29,800

Cash and cash equivalents, end of period P17 23,731 37,128 28,775
3) 2021 and 2020 restated as described in note P1 with an impact of SEK –31 million in 2021 and SEK –99 million in 2020.
Parent Company statement of changes in stockholders’ equity

Total Cash flow Other Non-
Revaluation Statutory restricted Disposition hedge retained restricted
SEK million Capital stock reserve reserve equity reserve reserve earnings equity Total
January 1, 2022 16,672 20 31,472 48,164 100 –26 34,910 34,984 83,148
Total comprehensive income – – – – – –732 11,771 11,039 11,039
Transfer to Other retained

earnings – – – – – 758 –758 – –

Stock issue – – – – – – – – –
Sale of own shares – – – – – – – – –
Long-term variable compensation – – – – – – 55 55 55
Repurchase of own shares – – – – – – – – –
Dividends paid – – – – – – –8,325 –8,325 –8,325
December 31, 2022 16,672 20 31,472 48,164 100 – 37,653 37,753 85,917
January 1, 2021 16,672 20 31,472 48,164 100 – 33,815 1) 33,915 82,079
Total comprehensive income – – – – – -26 7,656 7,630 7,630

Stock issue – – – – – – – – –
Sale of own shares – – – – – – 42 42 42
Dividends paid – – – – – – –6,658 –6,658 –6,658
December 31, 2021 16,672 20 31,472 48,164 100 –26 34,910 34,984 83,148
1) Restated as described in note P1 with an impact of SEK –366 million related to transfer of accumulated balance from Revaluation of borrowings.
Financial report 2022 Notes to the Parent Company financial statements 95
Notes to the Parent Company

financial statements
P1 Significant accounting policies Business combinations
Transaction costs attributable to the acquisition are included in the cost
The financial statements of the Parent Company, Telefonaktiebolaget of acquisition in the Parent Company statements compared to Group
LM Ericsson, have been prepared in accordance with the Annual Accounts Act Statements where these costs are expensed as incurred.
and RFR 2 “Reporting in separate financial statements.” RFR 2 requires the
Parent Company to use the same accounting principles as for the Group, i.e., Critical accounting estimates and judgments
IFRS, to the extent allowed by RFR 2. See notes to the consolidated financial statements – note A2 “Critical account-
The main deviations between accounting policies adopted for the Group ing estimates and judgments.” Major critical accounting estimates and judg-
and accounting policies for the Parent Company are: ments applicable to the Parent Company include “Trade and customer finance
receivables” and “Acquired intellectual property rights and other i ntangible
Subsidiaries, associated companies and joint ventures assets, excluding goodwill.”
The investments are accounted for according to the acquisition cost method.
Investments are carried at cost and only dividends are accounted for in the Changes to the presentation in the financial statements
income statement. An annual impairment test for the investments in each sub- Revaluation of borrowings due to change in credit risk, which historically has
sidiary company is performed in the fourth quarter, or when there is an indica- been reported under Other comprehensive income, has for 2022 been reported
tion of impairment. An impairment loss is recognized if the carrying amount of in the Income statement. Prior periods have been restated. The restatement
an investment exceeds the sum of the subsidiary’s equity and related goodwill, is due to an exemption in the Swedish Annual Accounts Act (RFR 2; IFRS 9)
intangible liabilities and deferred tax liabilities or its estimated future cash which does not allow the items to be reported under Other comprehensive
flows after tax. Cash flows are discounted to present value using an after-tax income. The restatement from Other comprehensive income to the Income
discount rate that reflects current market assessments of the time value of statement resulted in changes of reported financial expenses and tax expense
money and the risks specific to the asset. in the years 2021 and 2020. Revaluation of borrowings was restated to Other
Contributions to/from subsidiaries and shareholders’ contributions retained earnings in equity for the opening balance of year 2020. The restate-
are accounted for according to RFR 2. Contributions from/to Swedish subsidi- ments are specified in the Parent Company financial statements and in the
aries are reported net in the income statement. Shareholders’ c ontributions relevant notes to the Parent Company financial statements.
increase the Parent Company’s investments.
Changes in accounting policies
Classification and measurement of financial instruments On January 1, 2022, the following amendments issued by the IASB were
IFRS 9 “Financial instruments” is adopted, except regarding financial guar- adopted with no material impact on the results and financial position of the
antees and revaluation of borrowings due to change in credit risk. Financial Parent Company.
guarantees are included in Contingent liabilities according the exception – IAS 16: ‘Property, Plant and Equipment (PP&E) – Proceeds before Intended
allowed in RFR 2. Revaluation of borrowings due to change in credit risk are Use
reported in the Income statement – see more under “Changes to the presenta- – IAS 37: ‘Onerous Contracts – Cost of Fulfilling a Contract
tion in the financial statements”. – Annual Improvements to IFRS Standards 2018–2020
– IFRS 3: ‘Reference to the Conceptual Framework
Leases
Leases are reported according to the exception allowed in RFR 2. For leases A number of issued new standards, amendments to standards and interpreta-
where the Parent Company is lessee this means that the right-of-use assets tions are not yet effective for the year ended December 31, 2022 and have
and liabilities are not recognized on the balance sheet. Costs under the lease not been applied in preparing the Parent Company financial statements. The
are recognized in the income statement on a straight-line basis over the term IASB has issued the following new standard with effective date January 1,
of the lease. Lease incentives received are recognized as an integral part of 2023 : “IFRS 17 Insurance contracts”. The impact of IFRS 17 will be immate-
the total lease expense, over the term of the lease. For leases where the Parent rial and the Swedish Financial Reporting Board has recommended voluntary
Company is lessor, the equipment is recorded as property, plant and equipment application of IFRS 17 in RFR 2. The IASB has also issued amendments to the
and revenue as well as depreciation is recognized on a straight-line basis over following standards with effective date January 1, 2023:“IAS 1, ‘Presentation
the lease term. Expenses related to the lease income are recognized when of financial statements’ “,“IAS 8 Accounting policies” and“IAS 12 Income
incurred. Direct expenses incurred when a lease agreement is entered are Taxes”.The amendements will not have a material impact on the results and
added to the carrying amount of the leased asset and expensed over the lease financial position of the Parent Companyandthere are no additions or excep-
period on the same basis as the lease income. tions allowed in RFR 2. For the changes in IFRS standards, more details can be
found in the Consolidated Financial Statements, note A1 ”Significant account-
Deferred taxes ing policies”.
The accounting of untaxed reserves in the balance sheet results in different
accounting of deferred taxes as compared to the principles applied in the con-
solidated statements. Swedish GAAP and tax regulations require a company to
report certain differences between the tax basis and book value as an untaxed
reserve in the balance sheet of the standalone financial statements. Changes
to these reserves are reported as an addition to, or withdrawal from, untaxed
reserves in the income statement.
Pensions
Pensions are accounted for according to the simplification rule in RFR 2. The
pension obligation is secured with transferring of funds to a pension trust. A net
pension obligation is only accounted for to the extent that the fair value of the
trust is lower than the pension obligation. According to RFR 2, disclosures from
IAS 19 is adopted as applicable.
96 Notes to the Parent Company financial statements Financial report 2022
P2 Other operating income and expenses P4 Taxes

Other operating income and expenses Income taxes recognized in the income statement
2022 2021 2020 2022 2021 2020
License revenues and other Current income taxes for the year 758 –72 –100
operating revenues Current income taxes related to prior years 1) –294 –64 –214
Subsidiary companies 2,956 2,573 2,588 Deferred tax income/expense (+/–) 167 –31 –114
Other operating income/expenses 1) –2,265 –803 278 Tax income/expense 631 –167 –428
Total 691 1,770 2,866 1) 2021 and 2020 restated as described in note P1 with an impact of SEK –6 million in 2021 and SEK
1) Includes a provision of SEK –2,3 billion in 2022 in relation to a potential resolution with the United –20 million in 2020.
States Department of Justice (DOJ) related to potential breaches of the deferred prosecution agree-
ment (DPA), including estimated expenses for the extended compliance monitorship, noting that A reconciliation between reported tax expense for the year and the theoretical
the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and agreed to
pay a fine of approx. SEK 2.2 billion. Includes cost of SEK –0,8 billion in 2021 as a result of the Nokia
tax expense that would arise when applying the statutory tax rate in Sweden,
settlement related to the 2019 resolutions with the U.S. Securities and Exchange Commission (SEC) 20.6% (20.6% in 2021, 21.4% in 2020), on the income before taxes, is shown
and DOJ. in the table below.
P3 Financial income and expenses

Reconciliation of Swedish income tax rate with effective tax
2022 2021 2020
Expected tax expense at Swedish tax rate –2,295 –1,605 –1,454
Financial income and expenses
Current income taxes related to prior years 1) –294 –64 –214
2022 2021 2020
Tax effect of non-deductible expenses –668 –190 –107
Financial income
Tax effect of non-taxable income 4,186 1,962 2,067
Result from participations
Tax effect related to write-downs of
in subsidiary c ompanies
investments in subsidiary companies –298 –270 –724
Dividends 19,412 8,602 9,423
Tax effect of changes in tax rate – – 4
Net gains on participations 19 12 –
Tax income/expense 631 –167 –428
Result from participations in joint
ventures and associated companies 1) 2021 and 2020 restated as described in note P1 with an impact of SEK –6 million in 2021 and SEK
–20 million in 2020.
Dividends 59 72 43
Net gains on sales – – 38
Income taxes recognized in Other retained earnings
Result from participations in other companies
2022 2021 2020
Net gains on participations 96 718 103
Current income taxes for the year –758 0 0
Interest income from subsidiary companies 1,465 886 1,038
Tax expense/income –758 0 0
Interest income from others 147 41 260
Total 21,198 10,331 10,905
Deferred tax balances
Financial expenses
Deferred tax assets are derived from the balance sheet items as shown in the
Losses on sales of participations
in s ubsidiary companies – –8 –3 table below.
Write-down of investments in subsidiary
companies –1,446 –1,300 –3,383 Tax effects of temporary differences
Net loss from joint ventures and 2022 2021
associated companies –557 – – Current assets 348 290
Net loss from participations in other Post-employment benefits 34 38
companies –209 – –62
Provisions 48 40
Interest expense to subsidiary companies –712 –30 –64
Other 156 139
Interest expenses to others –368 –304 –705
Deferred tax assets 586 507
Other financial expenses 1) 948 –179 36
Total –2,344 –1,821 –4,181
Net foreign exchange gain/(loss) on financial Changes in deferred taxes
liabilities/assets 359 –111 220 2022 2021
Financial income and expenses, net 19,213 8,399 6,944 Opening balance 507 544
Net gains and losses on financial instruments Reclassification –88 –6
below excluding effect of gains and losses
from foreign exchange transactions: Recognized in net income (loss) 167 –31
Net gains and losses on financial instruments Closing balance 586 507
at FVTPL –2,563 –543 –251
Net gains and losses on financial liabilites
designated at FVTPL 2,847 404 –121
1) Revaluation of borrowings due to change in credit risk in 2022: SEK 1,030 million. 2021 and 2020
restated as described in note P1 with revaluation impact of SEK 31 million in 2021 and SEK 99 million
in 2020.
Interest expenses on pension liabilities are included in the interest expenses

shown above.
P5 Intangible assets
Patents, licenses, trademarks and similar rights
2022 2021
Accumulated acquisition costs
Acquisitions – –
Sales/disposals – –
Accumulated amortization
Opening balance –4,130 –4,115
Amortization –4 –15
Sales/disposals – –
Closing balance –4,134 –4,130

Opening balance –948 –945
Impairment losses – –3
Closing balance –948 –948
Net carrying value 4 8
The balances are mainly related to Radio Frequency technology.
P6 Property, plant and equipment

Property, plant and equipment
Construction in
Other equipment process and advance
and installations payments Total
2022
Opening balance 1,948 13 1,961
Additions 26 59 85
Sales/disposals –45 –3 –48
Reclassifications 43 –43 –
Closing balance 1,972 26 1,998
Accumulated depreciation
Opening balance –1,548 – –1,548
Depreciation –115 – –115
Sales/disposals 45 – 45
Closing balance –1,618 – –1,618
Net carrying value 354 26 380
2021
Opening balance 1,722 182 1,904
Additions 14 50 64
Sales/disposals –6 –1 –7
Reclassifications 218 –218 –
Closing balance 1,948 13 1,961
Accumulated depreciation
Opening balance –1,444 – –1,444
Depreciation –110 – –110
Sales/disposals 6 – 6
Closing balance – 1,548 – –1,548
Net carrying value 400 13 413
P7 Financial assets
Investments in subsidiary companies, joint ventures and associated companies
Subsidiary companies Associated companies
2022 2021 2022 2021
Opening balance 72,009 68,798 1,184 1,184
Acquisitions and stock issues 2,244 127 298 –
Shareholders’ contribution 55,835 6,396 – –
Repayment of shareholders’ contribution – –1,388 – –
Write-downs 1) –1,446 –1,300 –791 –
Disposals –4 –624 –63 –
Closing balance 128,638 72,009 628 1,184
1) In 2022 write-downs of investments in subsidary and associated companies were made by SEK 2.2 (1.3) billion. For impairment test in 2022 of investments in subsidiary and associated companies a discount rate
of 9.0% (8.0%) has been applied. For high inflation countries individual discount rates ( 10.0-24.0%) were applied. The write-downs are mainly a result of devaluation of currency in several markets and lowered
expectation on future profitability for a few entities. At the time of the write-downs the recognized amounts in the balance sheet related to each impacted subsidiary company are equal to value in use or equity
value of the entity.
Other financial assets

Other investments in shares Interest-bearing Other financial assets, Receivables from
and participations securities, non-current non-current subsidiaries, non-current
2022 2021 2022 2021 2022 2021 2022 2021
Opening balance 2,175 1,382 30,615 21,597 544 458 13,284 10,631
Additions 168 134 13,583 30,305 – 754 5,963 2,215
Disposals/repayments/deductions –96 –49 –29,666 –13,561 – –775 –5,189 –714
Reclassifications –1 –1 –5,632 –7,651 –588 – – –
Fair value remeasurement –207 709 257 –75 80 107 – –
Translation difference – – – – – – 1,356 1,152
Closing balance 2,039 2,175 9,157 30,615 36 544 15,414 13,284
P8 Investments
The following listing shows certain shareholdings owned directly and i ndirectly by the Parent Company as of December 31, 2022.
A complete listing of shareholdings, prepared in accordance with the Swedish Annual Accounts Act and filed with the Swedish Companies Registration Office
(Bolagsverket), may be obtained upon request to: Telefonaktiebolaget LM Ericsson, External Reporting, SE-164 83 S tockholm, Sweden.
Shares owned directly by the Parent Company

Percentage of Par value in local Carrying value,
Company Reg. No. Domicile ownership currency, million SEK million
Subsidiary companies
Ericsson AB 556056-6258 Sweden 100 50 20,731
Ericsson Shared Services AB 556251-3266 Sweden 100 361 2,216
Ericsson Software Technology Holding AB 559094-8963 Sweden 100 – 7
Datacenter i Rosersberg AB 556895-3748 Sweden 100 – 74
Datacenter i Mjärdevi Aktiebolag 556366-2302 Sweden 100 10 69
Aktiebolaget Aulis 556030-9899 Sweden 100 14 6
Ericsson Credit AB 556326-0552 Sweden 100 5 5
Other (Sweden) – 1,257
Ericsson Austria GmbH Austria 100 4 94
Ericsson Danmark A/S Denmark 100 90 216
Oy L M Ericsson Ab Finland 100 13 196
Ericsson France S.A.S France 100 21 524
Ericsson Antenna Technology Germany GmbH Germany 100 2 21
Ericsson Germany GmbH Germany 100 1 2,844
Ericsson Hungary Ltd. Hungary 100 1,301 120
L M Ericsson Limited Ireland 100 4 34
Ericsson Telecomunicazioni S.p.A. Italy 100 44 2,429
Ericsson Holding International B.V. The Netherlands 100 222 2,983
Ericsson A/S Norway 100 75 114
Ericsson Television AS Norway 100 161 160
Ericsson Corporatia AO Russia 100 5 5
Ericsson España S.A. Spain 100 28 14
Ericsson AG Switzerland 100 – –
Ericsson Holdings Ltd. United Kingdom 100 328 10
Ericsson Ltd. United Kingdom 100 53 1,957
Other (Europe, excluding Sweden) – 974
Ericsson Holding II Inc. United States 100 – 34,295
Ericsson Smart Factory Inc. United States 100 – 424
Ericsson Global Network Platform Holding Inc. United States 100 – 51,298
Companía Ericsson S.A.C.I. Argentina 95 1) 193 99
Ericsson Canada Inc. Canada 100 – 221
Ericsson Del Paraguay S.A. Paraguay 95 1) 42,647 53
Ericsson Telecom S.A. de C.V. Mexico 100 1,439 576
Other (United States, Latin America) – 389
Teleric Pty Ltd. Australia 100 20 100
Ericsson Ltd. China 100 2 2
Ericsson (China) Company Ltd. China 100 65 475
P.T. Ericsson Indonesia Indonesia 95 9,531 614
Ericsson India Global Services PVT. Ltd India 100 291 51
Ericsson Kenya Limited Kenya 100 – 46
Ericsson-LG CO Ltd. Korea 75 285 2,279
Ericsson (Malaysia) Sdn. Bhd. Malaysia 100 3 131
Ericsson Telecommunications Pte. Ltd. Singapore 100 2 1
Ericsson South Africa PTY. Ltd South Africa 70 – 135
Ericsson Taiwan Ltd. Taiwan 90 270 36
Ericsson (Thailand) Ltd. Thailand 49 2) 90 17
Other countries (the rest of the world) – 336
Total 128,638
Joint ventures and associated companies

Concealfab Inc. USA 36 – 298
Leone Media Inc. USA 46 134 –
Ericsson Nikola Tesla d.d. Croatia 49 65 330
Total 628
1) Through subsidiary holdings, total holdings amount to 100% of Compania Ericsson S.A.C.I. and Ericsson Del Paraguay S.A.
2) Through subsidiary holdings, total holdings amount to 74% of Ericsson (Thailand) Ltd.
Note P8, cont’d.
Shares owned by subsidiary companies

Percentage
Company Reg. No. Domicile of ownership
Subsidiary companies
Ericsson Cables Holding AB 556044-9489 Sweden 100
Emodo Inc. United States 100
Ericsson Telekommunikation GmbH Germany 100
Ericsson GmbH Germany 100
Ericsson Telecommunicatie B.V. The Netherlands 100
Ericsson Telekomunikasyon A.S. Turkey 100
Ericsson Inc. United States 100
Vonage Holdings Corp. United States 100
Ericsson Wireless Office Inc. United States 100
Cradlepoint Inc. United States 100
Iconectiv, LLC. United States 83
Ericsson Telecomunicações S.A. Brazil 100
Ericsson Australia Pty. Ltd. Australia 100
Ericsson (China) Communications Co. Ltd. China 100
Nanjing Ericsson Panda Communication Co. Ltd. China 51
Ericsson Japan K.K. Japan 100
P9 Trade receivables and customer finance

Credit risk management is governed on a Group level.
For further information, see notes to the consolidated financial statements – Note B6, “Customer contract related balances”
and note F1 “Financial risk management.”
Trade receivables and customer finance Movements in allowances for impairment

2022 2021 Trade receivables
Trade receivables excluding associated 2022 2021
companies and joint ventures 29 17 Opening balance 16 15
Allowances for impairment –19 –16 Additions – –
Trade receivables, net 10 1 Utilization – –
Trade receivables related to associated Reversal of excess amounts – –
companies and joint ventures 1 –
Trade receivables, total 11 1
Closing balance 19 16
Customer finance 544 786
Customer finance, net 544 786
Outstanding customer finance credit risk exposure 1) Customer Finance Fair Value Reconciliation
2022 2021 2022 2021
Fair value of customer finance credits 544 786 Opening balance 786 920
Of which current 322 499 Additions 53 243
Financial guarantees for third-parties 6 6 Disposals/repayments –288 –395
Accrued interest 8 9 Revaluation –7 18
Maximum exposure to credit risk 558 801 Translation difference – –
Less third-party risk coverage – – Closing balance 544 786
Parent Company’s risk exposure,
less third-party risk coverage 558 801
Credit commitments for customer finance 412 303
1) This table has been adjusted to show the maximum exposure to credit risk.
P10 Receivables and liabilities –

subsidiary companies P11 Other current receivables
Receivables and liabilities – subsidiary companies Other current receivables
Payment due by period 2022 2021
<1 1–5 >5 Total Total Prepaid expenses 353 391
year years years 2022 2021 Accrued revenues 105 222
Non-current receivables Derivative assets 2,017 1,155
Financial receivables – 15,414 – 15,414 13,284 Other 664 45
Current receivables Total 3,139 1,813
Trade receivables 1,662 – – 1,662 820
Financial receivables 22,518 – – 22,518 24,215
Total 24,180 – – 24,180 25,035
Financial liabilities – – – – 20
Current liabilities
Trade payables 230 – – 230 101
Financial liabilities 94,171 – – 94,171 80,567
Total 94,401 – – 94,401 80,688
P12 Equity and other comprehensive income
Capital stock 2022 and SEK 1.35 per share with the record date September 29, 2023 (payment
Capital stock at December 31, 2022, consisted of the following: date October 4, 2023). Holders of the Class B treasury shares are not entitled to
receive a dividend. All Class B treasury shares are held by the P
arent Company.
Capital stock Assuming that no treasury shares remain on the record date, the Board of
Number of shares Capital stock Directors proposes that e arnings be distributed as follows:
Class A shares 1) 261,755,983 1,309
Class B shares 1) 3,072,395,752 15,363 Proposed disposition of earnings
Total 3,334,151,735 16,672
Proposed disposition of earnings
1) Class A shares (quotient value SEK 5.00) and Class B shares (quotient value SEK 5.00).
Amount to be paid to the shareholders SEK 9,002,209,685

The Board of Directors proposes a dividend of SEK 2.70 (2.50) per share and
that the Parent Company shall retain the remaining part of non-restricted Amount to be retained by the Parent Company SEK 28,750,998,521
equity. The dividend is proposed to be paid in two equal installments, SEK 1.35 Total non-restricted equity of the Parent Company SEK 37,753,208,206
per share with the record date March 31, 2023 (payment date April 5, 2023),
Equity and other comprehensive income 2022

Capital Revaluation Statutory restricted Disposition hedge r etained restricted
stock reserve reserve equity reserve reserve earnings equity Total
January 1, 2022 16,672 20 31,472 48,164 100 –26 34,910 34,984 83,148
Net income – – – – – – 11,771 11,771 11,771
Other comprehensive income(loss)

Items that will not be reclassified to profit or loss
Gains arising during the period – – – – – 3,703 – 3,703 3,703
Transfer to investments – – – – – –3,677 – –3,677 –3,677
Tax on items that will not be reclassified to profit or loss – – – – – –758 – –758 –758
Total other comprehensive income, net of tax – – – – – –732 – –732 –732
Transfer to Other retained earnings – – – – – 758 –758 – –

Stock issue – – – – – – – – –
Sale of own shares – – – – – – – – –
Dividends paid – – – – – – –8,325 –8,325 –8,325
December 31, 2022 16,672 20 31,472 48,164 100 – 37,653 37,753 85,917
Note P12, cont’d.

Equity and other comprehensive income 2021
Capital Revaluation Statutory restricted Disposition hedge r etained restricted
stock reserve reserve equity reserve reserve earnings equity Total
January 1, 2021 16,672 20 31,472 48,164 100 – 33,815 1) 33,915 82,079
Net income – – – – – – 7,656 7,656 7,656
Other comprehensive income

Items that have been or may be reclassified
to profit or loss
Losses arising during the period – – – – – –26 – –26 –26
Tax on items that will not be reclassified to profit or loss – – – – – – – – –
Total other comprehensive income, net of tax – – – – – –26 – –26 –26

Stock issue – – – – – – – – –
Sale of own shares – – – – – – 42 42 42
Dividends paid – – – – – – –6,658 –6,658 –6,658
December 31, 2021 16,672 20 31,472 48,164 100 –26 34,910 34,984 83,148
1) Restated as described in note P1 with an impact of SEK –366 million related to transfer of accumulated balance from Revaluation of borrowings.
P13 Contributions
Contributions to Swedish subsidiaries amount to SEK 7,272 (1,526) m
illion. There were no contributions from Swedish subsidiaries in 2022 and 2021.
P14 Post-employment benefits

The Parent Company has two types of pension plans: Plan assets allocation
– Defined contribution plans: post-employment benefit plans where the of which of which
Parent Company pays fixed contributions into separate entities and has no 2022 unquoted 2021 unquoted
legal or constructive obligation to pay further contributions if the entities do Cash and cash equivalents 71 0% 68 0%
not hold sufficient assets to pay all employee benefits relating to employee Equity securities 418 41% 468 35%
service. The expenses for defined contribution plans are recognized during Debt securities 867 19% 887 16%
the period when the employee provides service. Real estate 343 100% 317 100%
– Defined benefit plans: post-employment benefit plans where the Parent Derivatives –2 100% –13 110%
Company’s undertaking is to provide predetermined benefits that Investment funds 56 100% 109 84%
the employee will receive on or after retirement. Total 1,753 1,836
Of which Ericsson securities – –
Defined benefit obligation – amount recognized in the Balance sheet
2022 2021
Present value of wholly or partially funded pension plans1) 1,491 1,298
2022 2021
Fair value of plan assets –1,753 –1,836
Opening balance 0 0
Net obligation/surplus(–) of funded pension plans –262 –538
Pension costs, excluding taxes, related to defined benefit
Excess from plan assets not accounted for 262 538 obligations accounted for in the income statement 266 103
Closing balance provision for pensions 0 0 Pension payments –72 –71
1) The total defined benefit obligation is considered to be secured in the pension trust. Return on plan assets –194 –179
Return on plan assets not accounted for 0 147
The defined benefit obligations are calculated based on the actual salary levels Closing balance provision for pensions 0 0
at year-end and based on a discount rate of 2.85% (3.84%) regarding ITP2
and 0.2% (–0.1%) for other pension liabilities. Estimated pension payments for 2023 related to defined benefit obligations
Weighted average life expectancy after the age of 65 is 24.7 (24.7) years are SEK 79 million.
for women and 23.5 (23) years for men.
The Parent Company utilizes no assets held by the pension trust.
Return on plan assets was –4.5% (10.8%).
Note P14, cont’d.
Total pension cost and income recognized in the Income statement

2022 2021 2020 P15 Other provisions
Defined benefit obligations
Costs excluding interest and taxes 233 64 361 Other provisions
Interest cost 33 39 39 2022 2021
Return of plan assets –194 –32 –17 Opening balance 293 343
Total cost defined benefit plans Additions 2,338 88
excluding taxes 1) 72 71 383 Reversal of excess amounts –60 –2
Defined contribution plans Cash out/utilization –136 –136
Pension insurance premium 67 70 60 Reclassifications – –
Total cost defined contribution plans Closing balance 1) 2,435 293
excluding taxes 67 70 60 1) Consists mainly of estimated expenses for the provision in relation to a potential resolution with
Credit insurance premium 0 2 2 the United States Department of Justice (DOJ) related to potential breaches of the deferred
prosecution agreement (DPA), including the extended compliance monitorship, noting that the
Total cost, net excluding taxes 139 143 445 Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ and agreed to pay
1) The defined benefit obligation has increased by SEK 168 million in 2022 due to changed discount rate a fine of approx. SEK 2.2 billion, and costs for LTV expenses. SEK 2,372 (206) million is expected to
from 3.84% to 2.85%. This increase also impacts the value in plan assets due to previous years return, be utilized within one year.
not accounted for, so that the net cost in defined benefit plans are not affected. The pension cost for
2020 includes a contribution to the pension trust with SEK 311 millions.
Of the total pension cost, SEK 300 (136 in 2021 and 423 in 2020) million is
included in operating expenses and SEK –161 (7 in 2021 and 22 in 2020)
million in the financial net.
P16 Interest-bearing liabilities

As of December 31, 2022, the Parent Company’s outstanding interest-bearing
liabilities, excluding liabilities to subsidiaries, stood at SEK 29.6 (31.4) billion.
Interest-bearing liabilities Reconciliation of liabilities arising from financing activities

2022 2021 2022 2021
Borrowings, current Opening balance 31,421 28,414
Current part of non-current borrowings 2,814 9,405 Cash flows
Other borrowings, current – – Proceeds from issuance of borrowings 7,777 7,574
Total borrowings, current 2,814 9,405 Repayment of borrowings –9,993 –5,066
Other financing activities – –1,181
Borrowings, non-current
Non-cash changes
Notes and bond loans 19,712 13,430
Effect of foreign exchange movement 4,041 2,118
Other borrowings, non-current 7,040 8,586
Revaluation due to changes in credit risk –1,030 –31
Total borrowings, non-current 26,752 22,016
Other changes in fair value –2,650 –407
Total interest-bearing liabilities 29,566 31,421
Reclassification – –
Other non-cash movements – –
To secure long-term funding, the Company uses notes and bond programs agement.” Total weighted average interest rate cost for the long-term funding
together with bilateral research and development loans. All outstanding notes during the year was 2.45% (1.75%).
and bond loans are issued by the Parent Company under its Euro Medium-Term The borrowings issued by the Parent Company are held at fair value with
Note (EMTN) program or under its U.S. Securities and Exchange Commission changes in value recognized in the Income statement. See note P1 Significant
(SEC) Registered program. Bonds issued at a fixed interest rate are normally Accounting Policies.
swapped to a floating interest rate using interest rate swaps under the Asset For detailed information about Notes, bonds and bilateral loans, see notes to
and liability management mandate described in note F1, “Financial risk man- the Consolidated Financial Statements, note F4 “Interest-bearing liabilities”.
P17 Financial risk management and financial instruments

Ericsson’s financial risk management is governed on a Group level. For further information see notes to the Consolidated Financial Statements,
note F1, ”Financial risk management”
Outstanding derivatives
Related Related
Gross Net amounts Gross Net amounts
amount amount not offset amount amount not offset
2022 recognized Offset presented – collaterals Net 2021 recognized Offset presented – collaterals Net
Currency derivatives 1) Currency derivatives 1)
Assets 2,171 –165 2,006 –277 1,729 Assets 83 –20 63 – 63
Liabilities –2,727 165 –2,562 2,382 –180 Liabilities –111 20 –91 – –91
Interest rate Interest rate

derivatives derivatives
Assets 11 – 11 – 11 Assets 1,128 –36 1,092 – 1,092
Liabilities –8 – –8 – –8 Liabilities –696 36 –660 467 –193
1) Currency derivatives designated as cash flow hedge of SEK 0 (9) million are included in Other current
receivables and SEK 0 (25) million in Other current liabilities.
Cash collaterals paid or received under Credit Support Annex (CSA) to ISDA for cross-currency derivatives are recognized as Interest-bearing securities, current or
Borrowings, current, respectively. See note P 12 “Equity and other comprehensive income” for movement in the cash flow hedge reserve. No hedge ineffectiveness
was recognized in the income statement in 2022.
Cash, cash equivalents, interest bearing securities and derivative assets

Rating or Rating or
2022 equivalent < 3 M 3–12 M 1–5 Y >5Y Total 2021 equivalent < 3 M 3–12 M 1–5 Y >5Y Total
Bank deposits 24,252 – – – 24,252 Bank deposits 27,730 – – – 27,730
Other financial Other financial
institutions 604 – – – 604 institutions 247 – – – 247
Type of issuer: Type of issuer:
Governments AAA 500 3,950 277 – 4,727 Governments AA/AAA 5,743 2,906 11,860 – 20,509
Corporates A2/P2 1,283 – – – 1,283 Corporates A2/P2 4,226 – – – 4,226
Mortgage institutes AAA – 1,682 8,880 – 10,562 Mortgage institutes AAA – 5,749 21,700 304 27,753
Derivative assets 951 93 837 136 2,017 Derivative assets 202 641 312 – 1,155
Total 27,590 5,725 9,994 136 43,445 Total 38,148 9,296 33,872 304 81,620
Debt financing is mainly carried out through borrowing in the Swedish and In September 2022, the Company exercised one (of two) one-year extension
international debt capital markets. Bank financing is used for certain subsidiary option on the USD 2 billion sustainability-linked revolving credit facility. The
funding and to obtain committed credit facilities, see note P16, “Interest- facility does not have interest rates linked to credit rating or financial covenants
bearing liabilities.” but is linked to two of Ericsson’s sustainability KPIs. The Green Financing
Framework and the revolving credit facility were both unutilized at year end,
Funding programs 1) and as such there was no accounting impact. Financial instruments arising
Amount Utilized Unutilized from the use of these facilities will be assessed for accounting in future periods.
Euro Medium-Term Note program The following table shows analysis of financial liabilities by contractual
(USD million) 5,000 2,218 2,782
maturity:
SEC Registered program (USD million) 2) – – –
Commercial Paper Program (SEK million) 10,000 – 10,000 2022 <1Y 1–3 Y 3–5 Y >5Y Total
1) There are no financial covenants related to these programs. Trade payables 542 – – – 542
2) Program amount indeterminate.
Borrowings and loans 3,133 12,835 8,992 11,144 36,104
Derivative liabilities 868 1,091 611 – 2,570
In February 2022, the Company issued new EUR 750 million notes under the
Total 4,543 13,926 9,603 11,144 39,216
Euro Medium Term Note program with maturity in 2027. In May 2022, the
Company redeemed USD 1,000 million notes issued under the SEC Registered
program. In December 2022, the Company established a Green Financing 2021 <1Y 1–3 Y 3–5 Y >5Y Total
Framework to enable it to issue green bonds and other green financing instru- Trade payables 419 – – – 419
ments. The proceeds will be exclusively allocated to investments in energy Borrowings and loans 9,405 10,221 2,796 8,999 31,421
efficiency and renewable energy. Bonds issued within the Green Financing Derivative liabilities 411 330 – 10 751
Framework will be under the existing funding programs. Total 10,235 10,551 2,796 9,009 32,591
Committed credit facilities The Company has a treasury and customer finance function with the principal
Amount Utilized Unutilized role to ensure that appropriate financing is in place through loans and com-
Multi-currency revolving credit facility mitted credit facilities, actively managing the Company’s liquidity as well as
(USD million) 2,000 – 2,000 financial assets and liabilities, and managing and controlling financial risk
Note P17, cont’d.

exposures in a manner consistent with underlying business risks and financial Reconciliation of Level 3 fair value items
policies. The customer finance function may arrange suitable third-party
Other investments in
financing solutions for customers to support their purchases from Ericsson. In shares and participations
some cases, and to the extent that customer loans are not provided directly by Opening balance 1,591
banks, the Parent Company may provide vendor finance credits to customers Additions 168
directly. The central function also monitors the exposure from outstanding Disposals –96
vendor credits and credit commitments.
Gains or losses 1) 290
Reclassifications –1
Fair valuation of the Company’s financial instruments
Closing balance 1,952
For a description of the Company’s valuation techniques and valuation
hierarchies, see note F1 “Financial risk management”.
1) Table shows net gains or losses recognized in Financial income or expenses, of which SEK 287 million
unrealized gains relate to Level 3 assets held at the end of the year.
Financial instruments
2022 2021
Fair value hierarchy level Fair value hierarchy level
Amortized Amortized
SEK billion cost Fair value Level 1 Level 2 Level 3 cost Fair value Level 1 Level 2 Level 3
Assets at fair value through profit or loss
Customer finance – 0.5 – – 0.5 – 0.8 – – 0.8
Interest bearing securities – 17.5 17.5 – – – 43.2 43.2 – –
Cash equivalents 2) – 15.3 – 15.3 – – 26.0 – 26.0 –
Other financial assets 1) – 2.0 0.1 – 1.9 – 2.2 0.6 – 1.6
Other current receivables – 2.0 – 2.0 – – 1.2 – 1.2 –
Assets at fair value through OCI
Trade receivables – 0.0 – – 0.0 – 0.0 – – 0.0
Assets at amortized cost
Interest bearing securities 0.2 – – – – 0.1 – – – –
Cash equivalents – – – – – – – – – –
Other financial assets 0.6 – – – – 0.5 – – – –
Receivables subsidiaries 39.6 – – – – 38.3 – – – –
Financial assets 40.4 37.3 – – – 38.9 73.4 – – –
Financial liabilities at designated FVTPL

Interest-bearing liabilities – –29.6 –16.7 –12.9 – – –31.4 –19.5 –11.9 –
Financial liabilities at FVTPL
Other current liabilities – –2.6 – –2.6 – – –0.8 – –0.8 –
Liabilities at amortized cost
Trade payables –0.5 – – – – –0.4 – – – –
Borrowings –0.0 – – – – –0.0 – – – –
Liabilities subsidiaries –94.4 – – – – –80.7 – – – –
Financial liabilities –94.9 –32.2 – – – –81.1 –32.2 – – –
1) Other financial assets relate to investment in equity interests which are included in ‘Other investments in shares and participations’ within note P7.
2 ) Total Cash and cash equivalent is SEK 23.7 (37.1) billion, of which SEK 15.3 (26.0) billion relating to Cash equivalents are presented in the table above.
P18 Other current liabilities P19 Trade payables

Other current liabilities Trade payables
2022 2021 2022 2021
Accrued interest 251 171 Trade payables excluding associated companies and joint
Accrued expenses, of which 965 665 ventures 542 419
Employee related 388 461 Associated companies and joint ventures – –
Other 577 204 Total 542 419
Derivative liabilities 2,570 751
Other current liabilities 309 314
Total 4,095 1,901
P20 Assets pledged as collateral Leases with the Parent Company as lessor
The operating lease income is mainly income from the subleasing of real estate.
Assets pledged as collateral At December 31, 2022, future minimum payment receivables were
2022 2021 distributed as follows:
Bank deposits 893 532
Other 234 242 Future minimum payment receivables
Total 1,127 774 Operating leases
2023 15
Other includes pledged capital insurances for pension agreements to 2024 3
employees. 2025 –
2026 –
2027 –
P21 Contingent liabilities

2028 and later
Total
–
18
Contingent liabilities
Total contingent liabilities

2022
24,811
2021
20,322
P24 Information regarding employees
Contingent liabilities include pension commitments of SEK 24,680 Average number of employees
(20,102) million. 2022 2021
Men Women Total Men Women Total
Europe and
P22 Statement of cash flows

Latin America 1)
Total
1) of which in EU
177
177
177
179
179
179
356
356
356
177
177
177
185
185
185
362
362
362
Adjustments to reconcile net income to cash of which in Sweden 177 179 356 177 185 362
2022 2021 2020
Property, plant and equipment Remuneration
Depreciation 115 110 97
Wages and salaries and social security expenses
Total 115 110 97
2022 2021
Intangible assets
Wages and salaries 557 606
Amortization 4 18 32
Social security expenses 327 397
Total 4 18 32
of which pension costs 178 179
Total depreciation and amortization
on tangible and intangible assets 119 128 129
Taxes 1) –631 160 572
Write-downs and capital gains (–)/losses Wages and salaries per region
on sale of fixed assets, excluding customer 2022 2021
finance, net 2,097 578 3,304
Europe and Latin America 1) 557 606
Unsettled group contributions 7,272 1,526 1,540
Total 557 606
Unsettled dividends – – – 1) of which in EU 557 606
Other non-cash items –475 –190 –60
of which in Sweden 557 606
Total adjustments to reconcile
net income to cash 8,382 2,202 5,485
Remuneration in foreign currency has been translated to SEK at average
1) 2021 and 2020 restated as described in note P1 with an impact of SEK 6 million in 2021 and SEK 20
million in 2020 exchange rates for the year.
Remuneration to the Board of Directors and the President and CEO
P23 Leases
See notes to the consolidated financial statements, note G2 “Information
regarding members of the Board of Directors and Group management.”
Leases with the Parent Company as lessee Long-term variable compensation

The Parent Company has the following types of lease contracts: lease of real Compensation costs for employees of the Parent Company for the cash-based
estate and vehicles. 2022 costs for real estate amounted to SEK 633.4 (596.2) plan amounted to SEK 2.0 (24.3) million and the cost for share-based plan
million and vehicles to SEK 4.9 (4.4) million. The Parent Company had varia- amounted to SEK 54.8 (56.8) million. See notes to the consolidated financial
ble lease expenses of SEK 51.6 (46.2) million in 2022 related to property taxes. statements, note G3, “Share-based compensation”.
At December 31, 2022, future payment obligations for leases were
distributed as follows:
Future payment obligations for leases

Operating leases
2023 657
2024 589
2025 533
2026 428
2027 212
2028 and later 90
Total 2,509
P25 Related party transactions P26 Fees to auditors

IAS 24, “Related Party Disclosures” requires disclosure of related party Fees to auditors
relationships, transactions and outstanding balances. 2022 Deloitte Others Total
During 2022, various transactions were executed pursuant to contracts Audit fees 94 – 94
based on terms customary in the industry and negotiated on an arm’s Audit-related fees 2 – 2
length basis. Tax services fees – – –
Other fees – 7 7
Ericsson Nikola Tesla d.d. Total 96 7 103
Ericsson Nikola Tesla d.d. is a company providing the design, sales and service
of telecommunications systems and equipment and an associated member
2021
of the Ericsson Group. Ericsson Nikola Tesla d.d. is located in Zagreb, Croatia.
Audit fees 90 3 93
The Parent Company holds 49.07% of the shares.
Audit-related fees – – –
For the Parent Company, the major transactions are license revenues for
Ericsson Nikola Tesla d.d.’s usage of trademarks and received d ividends. Tax services fees – 9 9
Other fees – 1 1
Ericsson Nikola Tesla d.d. Total 90 13 103
2022 2021
Related party transactions 2020
License revenues 5 3 Audit fees 56 28 84
Dividends 59 72 Audit-related fees 8 5 13
Related party balances Tax services fees 1 1 2
Receivables 5 3 Other fees – 1 1
Total 65 35 100
The Parent Company does not have any contingent liabilities, assets p
ledged
as collateral or guarantees toward Ericsson Nikola Tesla d.d. The allocation of fees to the auditors is based on the requirements in the
Swedish Annual Accounts Act.
Leone Media Inc. At the 2022 Annual General Meeting, Deloitte was appointed auditor for
Leone Media Inc., operating under the brand name MediaKind, includes plat- the period until the 2023 Annual General Meeting. PricewaterhouseCoopers
forms for compression video processing and storage. 51% of the MediaKind (PwC) was appointed auditor for the period until the 2020 Annual General
business was divested February 1, 2019. After the transaction, the Parent Meeting.
Company held 49% of the shares. During 2022, Leone Media Inc. launched During the period 2020–2022, in addition to audit services, PwC and
a share-based incentive program for its employees, which reduced the Parent Deloitte provided certain audit-related services, tax and other services to the
Company holding to 45.5% of the shares. The Parent C ompany has provided Parent Company. The audit-related services include quarterly reviews, SSAE
a loan to Leone Media Inc. of SEK 0.6 (0.5) billion. 16 reviews and services in connection with the issuing of certificates and
opinions and consultation on financial accounting. The tax services include
Leone Media Inc. corporate tax c ompliance work. Other services include services related to
acquisitions.
2022 2021
Related party transactions
License revenues
Dividends
–
–
–
–
P27 Events after the reporting period
Related party balances
The impact of inflation on the defined benefit obligation
Receivables 615 536 Alecta decides on the indexation of ITP 2 every year, which simply means
that pensions are increased to provide compensation for inflation. The level of
The Parent Company does not have any contingent liabilities, assets p
ledged the indexation as of January 1, 2023 was decided on November 11, 2022 and
as collateral or guarantees toward Leone Media Inc. was 10,84%, which corresponds to the increase in the consumer price index
from September 2021 to September 2022.
Other related parties
Total receivables from other related parties were SEK 3.8 (3.5) million.
For information regarding the remuneration of management, see notes to the

consolidated financial statements, note G2, “Information regarding members
of the Board of Directors and Group management.
108 Risk factors Financial report 2022
Risk factors
All the information in this Annual Report and in particular the risks Contents
and uncertainties outlined below should be carefully considered.
Based on the information currently known to the Company, Ericsson 108 Risks related to business activities and industry
believes that the following section identifies the most significant 115 Risks related to Ericsson’s financial situation
risks affecting our business. Any of the factors described below, or 116 Legal and regulatory risks
any other risk factors discussed elsewhere in this report, could have 120 Internal control risks
a material negative effect on strategic objectives, business, opera- 121 Environmental, social and business conduct risks
tions, future performance, revenues, operating and after-tax results,
profit margins, financial condition, cash flow, liquidity, credit rating,
market share, reputation, brand and/or our share price. Additional
risks and uncertainties not presently known to the Company or that
Ericsson currently believes to be immaterial may also materially
adversely affect our business. Furthermore, our operating results
may have a greater variability than in the past and Ericsson may
have difficulties in accurately predicting future developments. See
also “Forward-Looking Statements”.
1 Risks related to business activities and industry The mandated, or otherwise required, localization of manufactur-
ing and R&D, or use of local suppliers or production – as well as their
1.1 Ongoing geopolitical and trade uncertainty from a range of digital counterparts (including data localization of IT-infrastructure
factors may have a material adverse impact on our business, opera- and restrictions on data flows) has been steadily growing and has been
tions, business prospects and consequently on operating results, motivated by either protectionism, indigenous industrial policies or
financial conditions and our ability to meet our targets. national security. There is a risk of moves away from global value chains
Geopolitical alliances are shifting as global tensions, including between and towards more regional or national alternatives. Governments may
US-China, drive growing economic, technological, military, and political continue to impose conditions that require the use of local suppliers
competition across the world. At the same time, there are numerous and local production or partnerships with local companies for R&D and
ongoing local and regional conflicts, including the ongoing military IT-infrastructure, require the license or other transfer of intellectual
conflict between the Ukraine and Russia and the tense Cross-Strait property, or engage in other efforts to promote local businesses and
relations. It is not yet clear how these new dynamics will play out across local competitors, which could have a significant adverse impact on
the world, but we can expect more difficulty navigating through this Ericsson’s ability to pursue a business globally.
variable geopolitical geometry. These tensions, including trade restric- Additionally, political instability, strict requirements on localization of
tions and export controls, enhanced sanctions measures and increased data, manufacturing and R&D, or use of local suppliers or production in
safeguards for national security purposes, can impact global market the regions in which the Company operates may further increase the risk
conditions and continue to be challenging for global supply chains in of possible legal or regulatory violations by Ericsson or its employees.
general and ICT supply chains in particular. These uncertainties include Any violation by Ericsson or its employees could cause severe reputa-
the effects of trade disputes and other political tensions involving, tional harm to the Company and a material adverse effect on Ericsson’s
among others, the governments of the European Union, the US, China, business operations and result in government actions and the imposi-
India, South Korea and Japan. tion of significant financial penalties and restrictions on the Company’s
There are also uncertainties for the future bilateral trading relation- ability to do business, including with certain customers, such as govern-
ship between China and several countries as a result of the restrictions ment bodies or those in certain regulated sectors (e.g. telecommunica-
towards Chinese vendors or contents in 5G networks that have been tions). See risk factor 3.3.
adopted in many countries. Of special relevance for Ericsson in this The geopolitical situation can have consequences on the entire indus-
context is the trade relationship between Sweden and China, since try, with the possibility of further industry splits, separation of global value
Ericsson, even though it is a global company with a global presence, has chains and separation of global standards for mobile telecommunications.
its headquarters in Sweden and therefore risks being affected by any These developments have also led to several countries evaluating how to
deterioration of the Swedish-Chinese relationship. ensure uninterrupted access to telecommunication network infrastruc-
The Company has business operations in China, and further changes ture, for example through promoting disaggregation of the Radio Access
in the economic and political policies in or relating to China could have Network and support of national communication network infrastructure
a material adverse effect on the Company’s business. During the last champions as alternatives to the established global vendors such as
few years Ericsson has observed sustained challenges to the global free Ericsson – although the timing and extent of this remains unclear.
trade system, including towards the World Trade Organization (WTO) All of the above may have a material and potentially lasting adverse
dispute settlement body. Any increased prospect of government poli- impact on Ericsson’s international product development and supply
cies and actions violating WTO agreements could negatively impact chains and necessitates a flexible and adaptive organizational setup,
Ericsson’s ability to benefit from open markets and free trade.
Financial report 2022 Risk factors 109
therefore impacting its profitability and business as a whole. Such – Reduced demand for products and services, resulting in increased
adverse impacts may include for example: price competition or deferrals of purchases, with lower revenues not
– Reduction or loss of sales and market share and weakened market fully compensated by reduced costs
position – Excess and obsolete inventories and excess manufacturing capacity
– Reduced or lost market access – Financial difficulties or failures among Ericsson’s suppliers
– Decreased ability for unrestricted use of Ericsson’s global supply – Increased demand for customer finance, difficulties in collection of
chain for all markets, e.g. as a result of import, export or security- accounts receivable and increased risk of counter party failures
related restrictions – Impairment losses related to Ericsson’s intangible assets as a result
– Increased trade restrictions, including economic sanctions and of lower forecasted sales of certain products
export controls, tariffs and increased costs which may not be – Increased difficulties in forecasting sales and financial results as well
recoverable as increased volatility in Ericsson’s reported results
– Separation of global standards for mobile telecommunication – Changes in the value in the Company’s pension plan assets resulting
– Sourcing restrictions and constraints for access to hardware and from, for example, adverse equity and credit market developments
software products and components and/or increased pension liabilities resulting from, for example, lower
– Reduced efficiency in R&D and restrictions in use of R&D resources discount rates. Such developments may trigger additional pension
– Deferrals of purchases, with lower revenues not fully compensated trust capitalization needs, negatively affecting the company’s cash
through reduced costs balance
– Excess and obsolete inventories and excess manufacturing capacity – End user demand could also be adversely affected by reduced con-
– Financial difficulties or failures among Ericsson’s suppliers sumer spending on technology, changes to communications service
– Impairment losses related to Ericsson’s intangible assets as a result provider pricing, security breaches and trust issues.
of lower forecasted sales of certain products
– Increased difficulties in forecasting sales and financial results as well 1.3 Ericsson’s business depends upon the continued growth of
as increased volatility in Ericsson’s reported results. mobile communications and the success of Ericsson’s existing and
targeted customer base. If growth slows or if the Company’s custom-
1.2 Challenging global economic conditions may adversely impact ers do not manage to maintain or grow in relevance in the digital
the demand, cost and pricing for Ericsson’s products and services as value chain, or if Ericsson’s products and/or services are not success-
well as limit the Company’s ability to grow. ful, Ericsson’s customers’ investment in networks may slow or stop,
Challenging global economic conditions, e.g. due to the pandemic, harming the Company’s business and operating results.
downturn in the global economy, political unrest and uncertainty, labor A substantial portion of Ericsson’s business depends on the continued
and supply shortages, increasing inflation and rising interest rates, or growth of mobile communications in terms of both the number of sub-
geopolitical risks and trade frictions may have adverse, wide-ranging scriptions and usage per subscriber, which in turn drives the continued
effects on demand for Ericsson’s products and for the products of deployment and expansion of network systems by Ericsson’s custom-
Ericsson’s customers. This could cause operators and other customers ers. If communications service providers fail to increase the number
to postpone investments or initiate other cost-cutting measures to of subscribers and/or usage does not increase, or if they fail to utilize
maintain or improve their financial position. This could also result in opportunities from the technological evolution, Ericsson’s business and
significantly reduced expenditures for the Company’s products and operating results could be materially adversely affected. Also, if com-
services, including network infrastructure, in which case Ericsson’s munications service providers fail to monetize services, fail to adapt their
operating results would suffer. If demand for the Company’s products business models or experience a decline in their revenues or profitability,
and services were to fall, Ericsson may experience material adverse their willingness to further invest in their existing and new networks may
effects on Ericsson’s revenues, cash flow, capital employed and value decrease, which will reduce their demand for Ericsson’s products and
of the Company’s assets, and Ericsson could incur operating losses. services and have an adverse effect on the Company’s business, operat-
Furthermore, if demand is significantly weaker or more volatile than ing results, and financial condition.
expected, Ericsson’s credit rating, borrowing opportunities and costs Traffic development on cellular networks could be affected if more
as well as the trading price of Ericsson’s shares could be adversely traffic is offloaded to WI-FI networks. Further alternative services
impacted. Should global economic conditions fail to improve or should provided over the internet have profound effects on operator voice/
they worsen or should political unrest and uncertainty, labor and supply broadband/SMS revenues with possible reduced capital expenses con-
shortages, increasing inflation and rising interest rates, or geopolitical sequences. Ericsson’s strategy depends on the development and suc-
problems or trade frictions fail to improve or should they worsen, other cess of global standards. This could be affected adversely in the future
business risks Ericsson face could intensify and could also negatively by industry forces more interested in de-facto standards or geopolitical
impact Ericsson’s business prospects with operators and other custom- forces leading to standards fragmentation and increased difficulties of
ers. Some operators and other customers, in particular in markets creating economies of scale.
with weak currencies, may incur funding difficulties and slower traffic Fixed and mobile networks converge and new technologies, such as
development, which may negatively affect their investment plans and IP and broadband, enable communications service providers to deliver
cause them to purchase fewer of the Company’s products and services. services in both fixed and mobile networks. Ericsson is dependent on the
Increased inflation may impact our cost base through increased costs uptake of such services and the outcome of regulatory and standardiza-
of labor and supply of material, products and services. It may not be tion activities such as spectrum allocation. If delays in uptake, stand-
possible to fully compensate for such increased costs through increased ardization or regulation occur, this could adversely affect Ericsson’s
sales prices to the Company’s customers, leading to lower margins and business, operating results, and financial condition.
decreased financial performance. The potential adverse effects of an Ericsson’s future growth is partly dependent on that Enterprises in
economic downturn include: several industries digitalize and increasingly utilize cellular wireless
solutions (including Private Cellular Networks), as well as increasingly 1.6 Ericsson may not be successful in executing its strategy to
utilize and offer automated services which are drivers for the Ericsson capture the 5G market opportunity in terms of e.g. scale, time and
Global Network Platform opportunity. Competing technologies such as volume of business.
Wi-Fi, macro-economic headwinds, and customers’ unwillingness to The 5G market opportunity will depend on availability of attractive
pay for services might slow down this development. Legal and regula- spectrum for 5G, and time of spectrum allocations, amount of spectrum,
tory restrictions such as Net neutrality can slow down or restrict global type of frequency bands such as low bands (below 1 GHz), mid-bands
expansion of this business. Furthermore, access to devices, sensors, and (3–6 GHz) and high bands (above 24 GHz), as well as terms of spectrum
spectrum might also impact the pace and ability for enterprises to adopt licenses, such as cost and license period of time, may not be according to
cellular wireless technology. needs and plans, which could delay or reduce the 5G market. In addition,
the operator usage of this spectrum could be restricted by regulatory
1.4 Pandemics, such as the one caused by COVID-19, could authorities for shorter or longer time and in different geographical areas,
severely impact Ericsson’s business and local and global operations. due to unforeseen reasons such as interference with other electronic
Pandemics, such as the one caused by COVID-19, could severely impact equipment at sensitive locations, e.g. airports, and the Group cannot
Ericsson’s local and global operations related to e.g. Service Delivery, guarantee that it will not become the subject of related liability claims
Research & Development, Sales and Supply, as well as the Company’s (such as product liability or claims associated with the configuration or
employees, customers and suppliers, which could result in significant installation of equipment), all of which could have a material adverse
financial and other consequences. For example, the COVID-19 pan- impact on the Ericsson Group’s business, operating results, financial
demic has caused challenges and risks relating to travel and lockdowns condition, reputation and brand.
limiting access to sites, transportation and logistics and impacting the Operator speed and scale to adopt to 5G could also be changed due
flow of goods, as well as having major parts of the workforce working to market situations, including resolution of M&A transactions as well
remotely. The infection rate in Ericsson markets can increase, giving as government incentives to deploy 5G. Operator 5G deployment plans
further disturbances to the Company’s operations, including in network could also be delayed by operational aspects such as site access, per-
deployments and impacting corresponding revenues. Moreover, exten- mits, availability of installation crews. There is also a risk that the scale
sive working from home may limit creativity and efficiency in parts of and time of 5G deployments will change due to the availability of 5G
the Company’s operations, as well as negatively impact the health and devices, not only for launch but also due to the speed with which device
motivation for some of Ericsson’s employees. prices will decline to drive mass market adoption.
The extent to which the COVID-19 pandemic will continue to impact In addition to this, the timing, size and technology choices of market
our business, operating results and financial condition, including our abil- opportunities beyond enhanced mobile broadband, such as fixed
ity to execute our near-term and long-term business strategies and initia- wireline access, industrial IoT and private networks, may materialize
tives in the expected time frame, will depend on future developments, differently than estimated, which could have a materially adverse effect
including the duration and severity of the pandemic, the emergence of on our business.
new variants, changes in infection rates, the vaccine participation rate, Finally, Ericsson or its suppliers may encounter unforeseen technical
the effectiveness of vaccines and the speed with which the vaccine can challenges that can affect Ericsson’s ability to develop, supply or deploy
be distributed, as well as regulations and requirements impacting the 5G networks.
return of employees to the offices and/or our ability to visit customer All of the above risks may have a negative impact on the ability of
sites, none of which can be predicted. Any of the foregoing factors, or Ericsson to implement its strategy and its business as a whole.
other cascading effects of the COVID-19 pandemic that are not cur-
rently foreseeable, could have a material adverse effect on our business, 1.7 Ericsson engages in acquisitions and divestments that may be
operating results, financial condition and/or cash flows. Additionally, as disruptive and require the Company to incur significant expenses,
pandemic conditions wane, we cannot predict how quickly the market- and Ericsson may not be successful in consummating such trans-
places in which the Company operate will return to pre-pandemic levels. actions, protecting the value of acquisitions during integration
following consummation, or creating the value anticipated with the
1.5 Ericsson may not be successful in implementing its strategy, in acquisition.
achieving improvements in its profitability, in estimating address- In addition to in-house innovation efforts, Ericsson makes acquisitions
able markets or market CAGR in the markets in which the Company in order to obtain various benefits such as reduced time-to-market,
operates. access to technology and competence, increased scale or to broaden
There can be no assurance that Ericsson will be able to successfully Ericsson’s product portfolio or customer base. Recent examples are the
implement its strategy to achieve future profitability, growth or create acquisitions of Vonage and Cradlepoint. Acquisitions could result in
shareholder value. When deemed necessary, Ericsson has undertaken the incurrence of contingent liabilities and an increase in amortization
and expects to continue to undertake specific restructuring or cost- expenses related to intangible assets or impairment of goodwill, which
saving initiatives; however, there are no guarantees that such initiatives could have a material adverse effect upon Ericsson’s business, operating
will be sufficient, successful or executed in time to deliver any improve- results, financial condition and liquidity. Risks Ericsson could face with
ments in Ericsson’s earnings. Furthermore, this Annual Report includes respect to acquisitions include:
certain estimates with respect to addressable markets as well as with – Insufficiencies of technologies and products acquired, such as
respect to growth rate in the market segments in which Ericsson oper- unexpected quality problems
ates, including Networks, Cloud Software and Services, Enterprise and – Difficulties in the full or partial integration of the operations, tech-
Other. If the underlying assumptions on which the Company’s estimates nologies, products and personnel of the acquired company to mate-
are based prove not to be accurate, the actual performance or address- rialize expected synergies or to maintain independent operations in
able markets and CAGR may be materially different from the estimates these companies at a risk appropriate level.
presented in this Annual Report, which may have a materially adverse
effect upon Ericsson’s financial condition.
– Risks of entering markets in which the Company has no or limited an expansion towards the Enterprise segment, which is a market that
prior experience, or in creating such market or eco-system as envi- is more affected by the overall economic conditions than the operator
sioned in e.g. the Vonage and Cradlepoint examples markets. Even if global conditions improve, conditions in the specific
– Potential loss of key employees industry segments in which the Company participates could be weaker
– Diversion of management’s attention away from other business than in other segments. In that case, the Company’s revenue and
concerns operating results may be adversely affected. If capital expenditures by
– Risks and expenses of any disclosed, undisclosed or potential legal operators and other customers are weaker than Ericsson anticipates,
liabilities of the acquired company, including failure to comply with the Company’s revenues, operating results and profitability may be
laws or regulations or other requirements or conditions, e.g. from adversely affected. The level of demand from operators and other
foreign direct investment reviews and decisions such as the CFIUS customers who buy Ericsson’s products and services can vary over short
review process. periods of time, including from month to month. Due to the uncertainty
From time-to-time Ericsson also divests parts of Ericsson’s business to and variations in the telecommunication industry, as well as in the ICT
optimize the Company’s product portfolio or operations. Any decision industry, accurately forecasting revenues, results, and cash flow remains
to dispose of or otherwise exit businesses may result in the recording of difficult.
special charges, such as workforce reduction costs and industry- and With 5G volume at scale shifting from early 5G markets into markets
technology-related write-offs. The risks associated with such acquisi- with higher volatility and as Ericsson is establishing business relation-
tions and divestments could have a material adverse effect upon ship with new customers, the levels of uncertainty and fluctuation
Ericsson’s business, operating results, financial condition and liquidity. can increase going forward. For example, both sales and profit can be
Risks Ericsson could face with respect to divestments include: impacted due to a significant variation in underlying market and/or
– Difficulties in the separation of the operations, technologies, products product and services mix. Furthermore, Ericsson might fail to anticipate
and personnel of the business divested customer demand properly, leading to an over or under supply of com-
– Potential loss of key employees ponents, production capacity and deployment capabilities.
– Expenses of any undisclosed or potential legal liabilities of the
business divested. 1.10 Sales volumes and gross margin levels can be reduced by an
unfavorable mix and order time of Ericsson’s products and services.
1.8 Ericsson is in, and may enter into new, Joint Ventures (JV) Ericsson’s sales to operators and other customers represent a mix of
arrangements and has, and may have new, partnerships, which may equipment, software and services, which normally generate different
not be successful and could expose the Company to future costs. gross margins. The operators still represent the main part of Ericsson’s
Ericsson’s JV and partnership arrangements, may fail to perform as business and are also the main focus for sales going forward. Ericsson
expected for various reasons, including an incorrect assessment of provides all of the Company’s customers with solutions based on
the Company’s needs and synergies, Ericsson’s inability to take action Ericsson’s own products as well as third-party products which normally
without the approval of Ericsson’s partners, the Company’s difficulties have lower margins than Ericsson’s own products. As a consequence,
in implementing Ericsson’s business plans, or the lack of capabilities Ericsson’s reported gross margin in a specific period will be affected by
or financial instability of the Company’s strategic partners. Ericsson’s the overall mix of products and services as well as the relative content
ability to work with these partners or develop new products and solu- of third-party products. In the Company’s Cloud Software and Services
tions, e.g. as part of Ericsson’s 5G portfolio, may become constrained, and Other segments, third-party products and services represent a larger
which could harm the Company’s competitive position in the market. portion of Ericsson’s business than the Company’s traditional sales,
In addition, any adverse regulatory, governmental or authority d ecision which impact Ericsson’s business models. Further, network expansions
towards a partner could negatively impact Ericsson or the JV, and and upgrades have much shorter lead times for delivery than initial
Ericsson’s brand could also be exposed and damaged if a partner does network build outs. Orders for such network expansions and upgrades
not adhere to Ericsson’s Code of Conduct for Business Partners, includ- are normally placed on short notice by customers, often less than a
ing compliance rules. month in advance, and consequently variations in demand are difficult
Additionally, Ericsson’s share of any losses from or commitments to to forecast. As a result, changes in Ericsson’s product and service mix
contribute additional capital or borrowings to such JVs and partnerships and the short order time for certain of Ericsson’s products may affect
may adversely affect Ericsson’s business, operating results, financial Ericsson’s ability to accurately forecast sales and margins or detect in
condition and cash flow. advance whether actual results will deviate from market consensus
and expectations. Product and delivery lead times of certain products
1.9 The telecommunications industry investment levels fluctuate may be prolonged due to possibly restricted market availability of
and are affected by many factors, including the economic environ- certain components caused as a result of pandemics and subsequent
ment, and decisions made by operators and other customers regard- supply chain delays. Short-term variation could have a material adverse
ing deployment of technology and their timing of purchases. effect on Ericsson’s business, operating results, financial condition and
The telecommunications industry has historically experienced down- cash flow.
turns in which operators substantially reduced their capital spending on
new equipment. The uncertainty surrounding global economic growth 1.11 Ericsson may not be able to properly respond to market trends
and the geopolitical situation may materially harm actual market condi- in the industries in which it operates, including virtualization of
tions, which could have a material adverse effect on Ericsson’s business. network functions.
Moreover, market conditions are subject to substantial fluctuation, Ericsson is affected by market conditions and trends within the
and could vary geographically and across technologies. Uncertainties industries in which the Company operates, including the convergence
can have an impact on both the CAPEX driven market as well as the of the IT and telecom industries. Technological developments largely
OPEX market, e.g., Managed Services. Ericsson’s strategy is based on drive convergences enabling digitalization and a move from dedicated
hardware to software and cloud-based services. This also includes a Ericsson’s markets, new strong competitors could emerge. Consolidation
disaggregation of the Radio Access Network, although the timing and may also result in competitors with greater resources than Ericsson has.
extent of this remains unclear. This is changing the competitive land- Both of these events could have a materially adverse effect on Ericsson’s
scape of Ericsson’s business as well as value chains and business models business, operating results, financial condition and market share.
and affects Ericsson’s objective-setting, risk assessment and strategies.
The change makes access to market easier for new competitors includ- 1.14 Ericsson relies on a limited number of suppliers of components,
ing new competitors to Ericsson’s business that have entered and may production capacity and R&D and IT services, which exposes the
continue to enter the market, and negatively impact Ericsson’s market Company to supply disruptions and cost increases.
share in selected areas. If Ericsson fails to understand or anticipate Ericsson’s ability to deliver according to market demands and contrac-
the market trends and development, or fails to acquire the necessary tual commitments depends significantly on obtaining a timely and
competencies to develop and sell products, services and solutions that adequate supply of materials, components, production capacity and
are competitive in this changing business environment, the Company’s other vital services on competitive terms, including on occasion from
business, operating results and financial condition will suffer. single-source suppliers, or in the case of the development and supply
of key ASIC and FPGA components, from very few suppliers, on which
1.12 Ericsson faces intense competition from the Company’s exist- Ericsson depends. Some of these suppliers have in addition very limited
ing competitors as well as new entrants, and this could materially geographical redundancy, making them vulnerable for natural disasters,
adversely affect the Company’s results. conflicts or other potentially disruptive events. Accordingly, there is a
The markets in which Ericsson operates are highly competitive in terms risk that the Company will be unable to obtain key supplies it needs to
of price, functionality, service quality, customization, timing of develop- produce Ericsson’s products and provide Ericsson’s services on commer-
ment, and the introduction of new products and services. The Company cially reasonable terms, in time, or at all. Failure by any of the Company’s
faces intense competition from significant competitors, many of which suppliers could delay or interrupt Ericsson’s products or services supply
are very large companies, with substantial technological and financial or operations and significantly limit sales or increase Ericsson’s costs. To
resources and established relationships with operators. Ericsson’s find an alternative supplier or redesign products to replace components
operator customers, which represent the main part of Ericsson’s busi- may take significant time, which could cause significant delays or inter-
ness, are also large and highly sophisticated and exercise significant ruptions in the delivery of Ericsson’s products and services and result in a
buying power through the common use of a competitive bidding pro- reduction in sales. Ericsson has from time to time experienced interrup-
cess. Ericsson also encounters increased competition from new market tions of supply and the Company may experience such interruptions in
entrants and alternative technologies as industry standards evolve. In the future.
addition, if Ericsson chooses to enter new market segments, it might Furthermore, the Company’s procurement of supplies requires
underestimate the skills and practices of the competitors within these Ericsson to predict future customer demands. If Ericsson fails to antici-
segments. The Company’s competitors may implement new technolo- pate customer demand properly, an over or under supply of components
gies before Ericsson does, offer more attractively priced or enhanced and production capacity could occur. In many cases, some of Ericsson’s
products, services or solutions, or they may offer other incentives that competitors utilize the same manufacturers and if they have purchased
Ericsson does not provide. Some of the Company’s competitors may also capacity ahead of Ericsson, the Company could be blocked from
have greater resources in certain business segments or geographic areas acquiring the needed products. This factor could limit Ericsson’s ability
than Ericsson does. Increased competition, and the crystallization of any to supply its customers and increase costs. At the same time, Ericsson
of the risks above, could result in reduced profit margins, loss of market commits to certain capacity levels or component quantities, which, if
share, increased research and development costs as well as increased unused, will result in charges for unused capacity, unrecoverable costs or
sales and marketing expenses, which could have a material adverse the scrapping of costs used to procure such components. The Company
effect on Ericsson’s business, operating results, financial condition and is also exposed to financial counterpart risks to suppliers when Ericsson
market share. pays in advance for supplies. Such supply disruptions and cost increases
Additionally, Ericsson operates in markets characterized by rapidly may negatively affect the Company’s business, operating results and
changing technology and also the nature in which this technology is financial condition.
being brought to market is rapidly changing. This has resulted in, and
may continue to result in continuous price pressure on Ericsson’s prod- 1.15 A significant portion of Ericsson’s revenue is currently gener-
ucts and services. If Ericsson’s counter measures, including enhanced ated from a limited number of key customers, and operator consoli-
products and business models or end to end cost reductions, cannot dation may increase Ericsson’s dependence on key customers and
be achieved or do not occur in a timely manner, there could be adverse key markets. The Company is also significantly dependent on the
impacts on Ericsson’s business, operating results, financial condition sales of certain of Ericsson’s products and services.
and market share. Ericsson derives most of its business from large, multi-year agree-
ments with a limited number of significant customers. Many of these
1.13 Vendor consolidation may lead to stronger competitors who agreements are reviewed on a yearly basis to renegotiate the price for
are able to benefit from integration, scale and greater resources, Ericsson’s products and services and do not contain committed purchase
which could increase competition in our market. volumes. Ericsson’s largest customer represented approximately 13%
Industry convergence and consolidation among equipment and services of the Company’s sales in 2022, and Ericsson’s ten largest customers
suppliers could potentially result in stronger competitors that are com- accounted for 59% of Ericsson’s sales in 2022. A loss of or a reduced role
peting as end-to-end suppliers as well as competitors more specialized with a key customer could have a significant adverse impact on sales,
in particular areas, which could for example impact certain of Ericsson’s profit and market share for an extended period. In addition, Ericsson’s
segments such as Cloud Software and Services and Other. If established dependence on the sales of certain of Ericsson’s products and services
actors in adjacent markets acquire players with new technologies in may have a significant adverse impact on sales, profit and market share.
During the past decade, communications service providers have markets or more competitive environments for the customers, those
undergone significant consolidation, resulting in fewer operators with demands may increase. Upon the financial failure of a customer, the
activities in several countries. This trend is expected to continue as a Company may experience losses on credit extended and loans made to
result of competitive pressure. A market with fewer and larger operators such customer, losses relating to Ericsson’s commercial risk exposure,
will increase Ericsson’s reliance on key customers and may negatively and the loss of the customer’s ongoing business. If customers fail to
impact Ericsson’s bargaining position and profit margins. Moreover, if meet their obligations to us, the Company may experience reduced cash
the combined companies operate in the same geographic areas, net- flows and experience losses in excess of reserves, which could have a
works may be shared and less network equipment and fewer associated material adverse effect on its operating results and financial condition.
services may be required. Network investments could be delayed by the
consolidation process, which may include, among others, actions relat- 1.18 Product, solution or service quality issues could lead to reduced
ing to merger or acquisition agreements, securing necessary regulatory revenue and gross margins and declining sales to existing and new
approvals, or integration of businesses. Network operators also share customers, as well as penalties, claims and liquidity damage.
parts of their network infrastructure through cooperation agreements Sales contracts normally include warranty undertakings for faulty prod-
rather than legal consolidations, which may adversely affect demand ucts and often include provisions regarding penalties and/or termination
for network equipment. Accordingly, operator consolidation may have a rights in the event of a failure to deliver ordered products or services
material adverse effect on Ericsson’s business, operating results, market on time or with required quality, possibly also for damages incurred on
share and financial condition. customer businesses. Although Ericsson undertakes a number of quality
In addition, some of the communications service providers may be assurance measures to reduce such risks, product and service quality,
becoming more willing to partner with hyperscalers to build and run the security, privacy or service performance issues may negatively affect
telecom’s access networks. Ericsson risks having more complex relations Ericsson’s reputation, business, operating results and financial condition.
wherein new relationships with our customers or competitors could This could also include poor quality of AI-based solutions, or third-party
appear, e.g., Ericsson’s customers could also become our competitors by products that are part of Ericsson’s solutions. If significant warranty
selling telecom cloud solutions to operators, or Ericsson’s competitors obligations arise due to reliability, security, privacy or quality issues with
could also become our partners when our software would potentially run Ericsson’s product, solutions or service, Ericsson’s operating results and
on their hardware run-time environment. financial position could be negatively impacted by costs associated with
Moreover, communications service providers including Ericsson’s key fixing software or hardware defects including replacement, high service
customers may be adversely impacted by new competition, especially in and warranty expenses, high inventory obsolescence expense, adapting or
rural mobile broadband growth affected by the emerging competition creating a replacement service, delays in collecting accounts receivable or
from the greenfield satellite broadband sector. Accordingly, Ericsson’s declining sales to existing and new customers, and reputational damage.
business may experience a material adverse effect, including impacts on
Ericsson’s operating sales, operating results, market share and financial 1.19 Ericsson depends upon the development of new products and
condition. enhancements to the Company’s existing products, and the success
of Ericsson’s substantial research and development investments is
1.16 Certain long-term agreements with customers include commit- uncertain.
ments to future price reductions, requiring us to constantly manage Rapid technology and market changes in Ericsson’s industry require
and control Ericsson’s cost base. us to make significant investments in research and development to be
Long-term agreements with Ericsson’s customers are typically awarded innovative. Ericsson invests significantly in new technology, products
on a competitive bidding basis. In some cases, such agreements also and solutions, e.g. related to 5G. In order for us to be successful, those
include a commitment to future price reductions. In order to maintain technologies, products and solutions must often be accepted by relevant
Ericsson’s gross margin with such price reductions, Ericsson continu- standardization bodies and/or by the industries and markets as a whole.
ously strives to reduce the costs of the Company’s products through The failure of Ericsson’s research and development efforts to be techni-
design improvements, negotiation of better purchase prices from cally or commercially successful could have adverse effects on Ericsson’s
Ericsson’s suppliers, allocation of more production to low-cost countries business, operating results and financial condition. If Ericsson invests
and increased productivity in Ericsson’s own production. However, there in the development of technologies, products and solutions that do not
can be no assurance that Ericsson’s actions to reduce costs, particularly function as expected, are not adopted by the industry, are not ready in
with increasing inflation and interest rates, will be sufficient or quick time, or are not successful in the marketplace, the Company’s sales and
enough to maintain the Company’s gross margin in such contracts, earnings may materially suffer. Additionally, it is common for research
which may have a material adverse effect on Ericsson’s business, and development projects to encounter delays due to changing require-
operating results and financial condition. ments and unforeseen problems. Delays in production and research
and development may increase the cost of research and development
1.17 If the Company’s customers’ financial conditions deteriorate, efforts and put us at a disadvantage against Ericsson’s competitors,
Ericsson will be exposed to increased credit and commercial risks. and can also include delays of communicated product availability dates.
After completing sales to customers, the Company may encounter This could have a material adverse effect upon the Company’s business,
difficulty collecting accounts receivables and could be exposed to risks customer relationships, operating results and financial condition.
associated with uncollectable accounts receivable. Ericsson regularly
assesses the creditworthiness of Ericsson’s customers and based on 1.20 Ericsson may not be successful in reaching the Cloud Software
that assessment Ericsson determines a credit limit for each customer. and Services business objectives.
Challenging financial conditions have impacted some of Ericsson’s Ericsson may be unable to meet its Cloud Software and Services busi-
customers’ ability to pay their invoices. Ericsson may be unable to avoid ness objectives and several risks related to market, technology and
future losses on the Company’s trade receivables. Ericsson has also operations can impact the plan.
experienced demands for customer financing, and in adverse financial
5G market development and subscriber growth, as well as the uptake software. Contributing to the development and distribution of software
of cloud native technologies and consequent adoption of Ericsson’s new developed as free and open source software may limit Ericsson’s ability
offerings, and automated delivery and life-cycle-management of the to enforce applicable patents in the future. Third parties have asserted,
products can be slower than expected. Increased competition from both and may assert in the future, claims, directly against us or against
emerging and established competitors may impact Ericsson’s market Ericsson’s customers, alleging infringement of their intellectual property
position. rights. Defending such claims may be expensive, time-consuming and
The Company could be too slow to adapt and adopt new technolo- divert the efforts of Ericsson’s management and/or technical personnel.
gies like AI and Machine Learning to drive more automation in products, As a result of litigation, Ericsson could be required to pay damages and
solutions and services. The transformation to the cloud native solutions other compensation directly or to indemnify Ericsson’s customers for
that 5G core standards are built on could also include greater complexity such damages and other compensation, develop non-infringing prod-
and take longer than expected. In addition, the increasing influence of ucts/technology or enter into royalty or licensing agreements. However,
open source initiatives could drive a best of breed approach in Ericsson’s the Company cannot be certain that such licenses will be available to
customers, driving prices down and adversely impact the Company’s full us on commercially reasonable terms or at all, and such judgments
suite of offerings. could have a material adverse effect on Ericsson’s business, reputation,
For managed services, most contracts span more than one year, with operating results and financial condition. Using free and open source
a long sales cycle for new contracts. Risk of termination and reduced software may allow third parties to further investigate the Company’s
scope or renegotiation of existing contracts may have a negative impact software due to the accessibility of source code. This may in turn make
on sales and earnings. this software more prone to assertions from third parties.
In the operational dimension, Ericsson may be unable to successfully Investigations held by antitrust authorities, court judgments and
execute on continued end-to-end efficiency measures to simplify the legislative change could potentially affect Ericsson’s ability to benefit
operating model, as well as being unable to mitigate risks in the cus- from its patent portfolio when licensing patents necessary to conduct an
tomer projects, which could have a material adverse effect on Ericsson’s open standard (e.g. 4G and 5G technology), which could have a material
business. adverse effect on Ericsson’s business, reputation, operating results and
financial condition. Ericsson holds a leading patent portfolio in open
1.21 Ericsson’s ability to benefit from intellectual property rights standards and possible changes regarding such a portfolio may materi-
(IPR), which are critical to the Company’s business, may be limited ally affect Ericsson’s reputation, business, operating results and financial
by changes in regulation relating to patents, inability to prevent condition.
infringement, the loss of licenses to or from third parties, infringe- Ericsson’s ability to benefit from intellectual property rights (IPR),
ment claims brought against us by competitors and others and may be limited by the loss of patent licenses to or from third-parties.
changes in the area of open standards when it comes to licensing of Patent licensing agreements are generally multi-year and term based
open standard essential patents. and the process for renewal of these licenses normally requires negotia-
Although the Company has a large number of patents, there can be no tions, particularly in conjunction with technology shifts and the introduc-
assurance that they will not be challenged, invalidated, or circumvented, tion of new standards, such as 5G. Such renewals and negotiations may
or that any rights granted in relation to Ericsson’s patents will in fact take time to resolve, sometimes involve litigation and may have material
provide us with competitive advantages. adverse impact on Ericsson’s business and financial position, including
Ericsson utilizes a combination of trade secrets, confidentiality poli- on the timing for and level of revenues from the IPR licensing contract
cies, nondisclosure and other contractual arrangements in addition to portfolio.
relying on patent, copyright and trademark laws to protect Ericsson’s Challenging global economic conditions and political unrest and
intellectual property rights. However, these measures may not be uncertainty, geopolitical risks and trade frictions may increase the
adequate to prevent or deter infringement or other misappropriation. In uncertainty around the direction of the global cellular eco-systems and
addition, Ericsson relies on many software patents, and limitations on standards, which could have adverse effects on Ericsson’s IPR licensing
the patentability of software may materially affect Ericsson’s business. revenues as well as on the ability to acquire licenses.
Moreover, the Company may not be able to detect unauthorized use
or take appropriate and timely steps to establish and enforce Ericsson’s 1.22 Ericsson may not be successful in continuing to attract and
proprietary rights. In fact, existing legal systems of some countries retain highly qualified employees to remain competitive.
in which Ericsson conducts business offer only limited protection of Ericsson believes that the Company’s future success largely depends
intellectual property rights, if at all. The Company’s solutions may also on Ericsson’s continued ability to hire, develop, motivate and retain
require us to license technologies from third-parties. It may be necessary engineers and other qualified employees who develop successful new
in the future to seek or renew licenses and there can be no assurance products/solutions, support Ericsson’s existing product range and
that they will be available on acceptable terms, or at all. Moreover, the provide services to the Company’s customers and create great customer
inclusion in Ericsson’s products of software or other intellectual property experience.
licensed from third-parties on a non-exclusive basis could limit the Competition for highly qualified people in the industries in which the
Company’s ability to protect proprietary rights in Ericsson’s products. Company operates remains intense. This competition is only further
Many key aspects of telecommunications and data network technol- increased by the fact that other industries are looking for similar talent.
ogy are governed by industry-wide standards usable by all market The Company is continuously developing its corporate culture, and
participants. As the number of market entrants and the complexity of Ericsson’s philosophies with the aim to create a positive work experi-
technology increases, the possibility of functional overlap and inadvert- ence that makes it easy for us to focus on Ericsson’s business and the
ent infringement of intellectual property rights also increases, which Company’s customers as well as inspiring Ericsson’s people to grow and
has been the case with the introduction of 5G technology. In addition to find “their great”. The Company’s ability to succeed depends in part
to industry-wide standards, other key industry-wide software solutions on maintaining a favorable corporate reputation that can be adversely
are currently developed by market participants as free and open source impacted by many factors, including ongoing litigation, investigations,
and adverse media reports. There are no guarantees that Ericsson will 2 Risks related to Ericsson’s financial situation
be successful in attracting and retaining employees with the right skills
in the future, and failure in retaining and recruiting could have a material 2.1 Ericsson’s debt increases the Company’s vulnerability to
adverse effect on Ericsson’s business and brand. general adverse economic and industry conditions, limits Ericsson’s
ability to borrow additional funds, and may limit the Company’s flex-
1.23 Ericsson’s operations are complex, and several critical opera- ibility in planning for, or reacting to, changes in Ericsson’s business
tions are centralized in a single location. Any disruption of Ericsson’s and industry.
operations, whether due to natural or man-made events, may be As of December 31, 2022, Ericsson’s outstanding debt was SEK 32,9
highly damaging to the operation of Ericsson’s business. billion and the Company is rated investment grade by S&P Global
The Company’s business operations and those of our suppliers are (BBB-) and Fitch Ratings (BBB-) and one step below investment grade
vulnerable to interruption by fire, earthquake, hurricane, flood or by Moody’s (Ba1). This degree of debt and the credit ratings could have
other natural disasters, power loss, security incidents, systems failure, important adverse consequences, including:
telecommunications failure, pandemics, quarantines, national catastro- – Increasing Ericsson’s vulnerability to general economic and industry
phe, terrorist activities, war and other events beyond our control. If any conditions
disaster were to occur, our or our suppliers ability to operate could be – Requiring a substantial portion of cash flow from operations to be
seriously impaired and we could experience material harm to our busi- dedicated to the payment of principal and interest on the Company’s
ness, operating results and financial condition. indebtedness, thereby reducing Ericsson’s ability to use its cash flow
Having outsourced significant portions of Ericsson’s operations, to fund the Company’s operations, capital expenditures and future
such as parts of IT, finance and HR operations, Ericsson depends on business opportunities
the performance of external companies, including their security and – Restricting us from making strategic acquisitions or causing us to
reliability measures. Regardless of protection measures, systems and make non-strategic divestitures
communications networks are susceptible to disruption due to failure, – Limiting Ericsson’s ability to obtain additional financing for adjusted
vandalism, security incidents, natural disasters, power outages and working capital, capital expenditures, debt service requirements,
other events. Ericsson also has a concentration of operations on certain acquisitions and general corporate or other purposes
sites, including R&D, production, network operation centers, ICT centers – Limiting the Company’s ability to adjust to changing market condi-
and logistic centers and shared services centers, where business inter- tions and placing us at a competitive disadvantage compared to
ruptions could cause material damage and costs. Ericsson’s competitors.
The delivery of goods from suppliers, and to customers, could also Ericsson may choose to incur substantial additional indebtedness in
be hampered for the reasons stated above. Interruptions to Ericsson’s the future. If new indebtedness is added to the Company’s current debt
systems and communications may have an adverse effect on the levels, the related risks that Ericsson now faces could increase.
Company’s operations and financial condition. If Ericsson’s financial performance were to deteriorate, the Company
may not be able to generate sufficient cash to service all of its indebted-
1.24 The Company may not achieve some or all of the expected ness and may be forced to take other actions to satisfy Ericsson’s obliga-
benefits of Ericsson’s restructuring activities, and the Company’s tions under the Company’s indebtedness, which may not be successful.
restructuring may adversely affect Ericsson’s business. Ericsson’s ability to make scheduled payments on or to refinance
Restructuring activities may be costly and disruptive to Ericsson’s the Company’s debt obligations depends on its financial condition and
business, and Ericsson may not be able to achieve and retain the cost operating performance, which is subject to prevailing economic and
savings and benefits that were initially anticipated. Additionally, as competitive conditions and to certain financial, business and other fac-
a result of Ericsson’s restructuring, the Company may experience a tors beyond Ericsson’s control. If Ericsson’s financial performance were
loss of continuity, loss of accumulated knowledge and/or inefficiency to deteriorate significantly, the Company might be unable to maintain a
during transitional periods. Reorganization and restructuring can level of cash flows from operating activities sufficient to permit us to pay
require a significant amount of management and other employees’ the principal, premium, if any, and interest on Ericsson’s indebtedness.
time and focus, which may divert attention from operating and growing If, due to such a deterioration in the Company’s financial perfor-
Ericsson’s business. Restructuring activities can create unanticipated mance, Ericsson’s cash flows and capital resources were to be insuf-
consequences and negative impacts on the business such as Ericsson’s ficient to fund its debt service obligations, Ericsson may be forced to
ability to develop, sell and deliver, and Ericsson cannot be sure that any reduce or delay investments and capital expenditures, or to sell assets,
ongoing or future restructuring efforts will be successful or generate seek additional capital or restructure or refinance Ericsson’s indebted-
expected cost savings. Factors that may impede a successful implemen- ness. These alternative measures may not be successful and may not
tation include the retention of key employees, the impact of regulatory permit us to meet Ericsson’s scheduled debt service obligations. In
matters, and adverse economic market conditions. If Ericsson fails to addition, if the Company were required to raise additional capital in the
achieve some or all of the expected benefits of restructuring, it could current financial markets, the terms of such financing, if available, could
have a material adverse effect on the Company’s competitive position, result in higher costs and greater restrictions on its business.
business, financial condition, operating results, cash flows, reputation In addition, if Ericsson were to refinance its existing indebtedness,
and share price. the conditions in the financial markets at that time could make it difficult
to refinance Ericsson’s existing indebtedness on acceptable terms or
at all. If such alternative measures proved unsuccessful, Ericsson could
face substantial liquidity problems and might be required to dispose of
material assets or operations to meet the Company’s debt service and
other obligations.
2.2 Due to having a significant portion of Ericsson’s costs in SEK restructuring actions or adverse market conditions that are either spe-
and revenues in other currencies, the Company’s business is exposed cific to us or the broader industries in which Ericsson operates or more
to foreign exchange fluctuations that could negatively impact its general in nature and that could have an adverse effect on Ericsson’s
revenues and operating results. operating results and financial condition.
Ericsson incurs a significant portion of the Company’s expenses in SEK. Negative deviations in actual cash flows compared to estimated cash
Please refer to the consolidated financial statement note F1, “Financial flows as well as new estimates that indicate lower future cash flows
risk management”. As a result of Ericsson’s international operations, might result in recognition of impairment charges. Estimates require
Ericsson generates, and expects to continue to generate, a significant management judgment as well as the definition of cash-generating
portion of the Company’s revenue in currencies other than SEK. To the units for impairment testing purposes. Other judgments might result in
extent Ericsson is unable to match revenue received in foreign currencies significantly different results and may differ from the actual financial
with costs paid in the same currency, exchange rate fluctuations could condition in the future.
have a negative impact on Ericsson’s consolidated income statement,
balance sheet and cash flows when foreign currencies are exchanged or
translated to SEK, which increases volatility in reported results. 3 Legal and regulatory risks
As market prices are predominantly established in US dollars or
Euros, Ericsson presently has a net revenue exposure in foreign curren- 3.1 Ericsson could experience penalties and adverse rulings in
cies, which means that a stronger SEK exchange rate would generally enforcement or other proceedings, breach of contract claims and/
have a negative effect on Ericsson’s reported results. The Company’s or loss of revenue for non-compliance with laws, rules and regula-
attempts to reduce the effects of exchange rate fluctuations through a tions governing its business. Compliance with existing or changed
variety of natural and financial hedging activities may not be sufficient laws, rules or regulations may subject Ericsson to increased costs or
or successful, resulting in an adverse impact on Ericsson’s results and reduced products and services demand, and may adversely affect
financial condition. Ericsson’s development efforts.
Ericsson is subject to multiple laws, rules and regulations in several
2.3 Ericsson relies on various sources for short-term and long-term jurisdictions. The Company could experience penalties and adverse
capital for the funding of the Company’s business. Should such rulings in enforcement or other proceedings for non-compliance with
capital become unavailable or available in insufficient amounts or applicable laws, rules or regulations governing its business, which could
on unreasonable terms, Ericsson’s business, financial condition and have a material adverse effect on Ericsson and its customers, including
cash flow may materially suffer. its reputation, business, financial condition, operating results, cash flows,
Ericsson’s business requires a significant amount of cash. If Ericsson prospects or its current or future customer relationships, including both
does not generate sufficient amounts of capital to support the private and government customers. While Ericsson strives for compli-
Company’s operations, service its debt and continue Ericsson’s research ance, the Company has not been in compliance with all such laws, rules
and development and customer finance programs, or if the Company and regulations in the past and cannot assure that all past violations
cannot raise sufficient amounts of capital at the required times and on have been addressed or that additional violations will not occur in the
reasonable terms, Ericsson’s business, financial condition and cash flow future. Ericsson’s non-compliance with laws, rules and regulations may
are likely to be adversely affected. Access to funding may decrease or also affect our customer’s compliance requirements and/or lead to actual
become more expensive as a result of Ericsson’s operational and finan- or perceived breach of our contractual obligations to our customers
cial condition, market conditions, or due to deterioration in Ericsson’s resulting in contract claims and loss of revenue. It may also impact our
credit rating. There can be no assurance that additional sources of funds ability to gain new customers.
that Ericsson may need from time to time will be available on reason- Further changes in laws, rules or regulations could subject us to liabil-
able terms or at all. If the Company cannot access capital on a commer- ity, increased costs, or reduced products and services demand, market
cially viable basis, Ericsson’s business, financial condition and cash flow access restrictions, inability to deliver products of certain origin and have
could materially suffer. a material adverse effect on Ericsson, including its reputation, business,
financial condition, operating results, cash flows or prospects.
2.4 Impairment of goodwill, other intangible assets, property Changes to laws, rules or regulations may adversely affect both
and equipment (PP&E) and right-of-use (RoU) assets leased by the Ericsson’s customers’ and the Company’s own operations. For example,
Company have impacted and may continue to negatively impact regulations imposing more stringent, time-consuming or costly planning
Ericsson’s financial condition and operating results. An impairment and zoning requirements or building approvals for radio base stations
of goodwill, other intangible assets, PP&E and RoU could adversely and other network infrastructure could adversely affect the timing and
affect the Company’s financial condition or operating results. costs of network construction or expansion, and ultimately the commer-
Ericsson has a significant amount of these assets; for example, patents, cial launch and success of these networks. Similarly, tariff and roaming
customer relations, trademarks, software, PP&E and RoU. laws, regulations or rules on network neutrality could also affect com-
Goodwill is the only intangible asset the Company has recognized to munications service providers ability or willingness to invest in network
have an indefinite useful life. Other intangible assets are mainly amor- infrastructure, which in turn could affect the sales of Ericsson’s systems
tized on a straight-line basis over their estimated useful lives, and the and services. Additionally, delay in radio frequency spectrum allocation,
assets are reviewed for impairment whenever events such as product and allocation between different types of usage may adversely affect
discontinuances, product dispositions or other changes in circumstances communications service provider spending or force us to develop new
indicate that the carrying amount may not be fully recoverable. Those products to be able to compete.
intangible assets not yet in use are tested for impairment annually. Further, Ericsson develops many of the Company’s products and ser-
Historically, the Company has recognized impairment charges mainly vices based on existing laws, rules, regulations and technical standards.
due to restructuring, which is usually limited, but occasionally signifi- Changes to existing laws, rules, regulations and technical standards,
cant. Additional impairment charges may be incurred in the future and or the implementation of new laws, rules, regulations, restrictions and
could be significant due to various reasons, including strategy changes, technical standards relating to products and services not previously
regulated, could adversely affect Ericsson’s development or supply countries in which Ericsson is active may result in a reduction of commit-
efforts by increasing compliance costs and causing delay or disruptions. ment in those countries. As an example, an escalation of trade tensions
Demand for those products and services could also decline. Regulatory between the US and China has resulted in additional trade restric-
changes related to e.g. license fees, environment, health and safety, tions including export controls, and increased tariffs, which if further
security, data localisation, privacy (including the cross-border transfer negatively developed could harm the Company’s ability to compete
of personal data for example between the EU and the US), and other effectively in Chinese markets or with Chinese companies and nega-
regulatory areas may increase costs and restrict Ericsson’s operations tively impact Ericsson’s operations in the country. The need to terminate
or the operations of network operators. Also, indirect impacts of such activities as a result of further trade restrictions may also expose us to
changes and changes to laws, rules or regulations in other fields, such customer claims and other inherent risks. Although the Company seeks
as pricing regulations, could have an adverse impact on Ericsson, even to comply with all export control and sanctions rules or regulations,
though the specific laws, rules or regulations may not apply directly to these laws, rules and regulations are complex, frequently changing and
the Company’s products or us. increasing in number and the Company has not been in compliance with
all such export control and sanctions rules or regulations in the past and
3.2 Ericsson’s substantial international operations are subject to cannot assure that all past violations have been addressed or that addi-
uncertainties that could affect the Company, including its reputational violations will not occur in the future. Such violations could have
tion, business, financial condition, operating results, cash flows or material adverse effects on Ericsson, including its reputation, business,
prospects. financial condition, operating results, cash flows, or prospects and could
Ericsson conducts business throughout the world and is subject to the constitute a violation of the DOJ Plea Agreement or the consent judg-
effects of general global economic conditions as well as conditions ment with the U.S. Securities and Exchange Commission (SEC).
unique to specific countries or regions. The Company has customers in The business operations are complex involving the development,
more than 180 countries, with a significant proportion of Ericsson’s sales production and delivery of telecom solutions to customers in a very large
to emerging markets in the Asia Pacific region, Latin America, Eastern number of jurisdictions. Each jurisdiction has its own tax laws, rules and
Europe, the Middle East and Africa. regulations and the Company has to comply with the relevant laws,
Ericsson’s extensive operations are subject to additional risks, rules and regulations in each of these countries. These laws, rules and
including civil disturbances, acts of terrorism, acts of war, economic and regulations involve income taxes and indirect taxes such as VAT and
geopolitical instability and conflict, potential misuse of technology lead- sales taxes as well as withholding taxes on domestic and cross border
ing to human rights violations, pandemics, the imposition of exchange payments and social security charges related to Ericsson’s employees.
controls, economies that are subject to significant fluctuations, nation- Constant changes of the laws, rules or regulations and the interpretation
alization of private assets or other governmental actions affecting the thereof also create exposures regarding taxes. This results in complex
flow of goods and currency, effects from changing climate and difficulty tax issues and tax disputes that may lead to additional tax payment
of enforcing agreements and collecting receivables through local legal obligations. Being a global operation, Ericsson also faces the risk of
systems. being taxed for the same income in more than one jurisdiction (double
Further, in certain markets in which Ericsson operates, there is a risk taxation). This could have adverse effects on Ericsson, including its
that national governments actively favor or establish local vendors or reputation, business, financial condition, operating results, cash flows,
introduce requirements for local content in their respective markets at or prospects.
the expense of foreign competitors or introduce other requirements There has been a concern reported by some media and others, that
impacting how Ericsson can provide products and services to its cus- certain countries may use features of their telecommunications systems
tomers. The implementation of such measures could adversely affect in ways that could result in potential violation of human rights, among
Ericsson’s sales, Ericsson’s market share and its ability to purchase or others. This may adversely affect the telecommunications business and
supply critical products or components. may have a negative impact for people and Ericsson.
Compliance with applicable export control regulations and sanctions All of the above may have a material and potentially lasting adverse
or other trade embargoes in force is paramount for the Company. The impact on Ericsson, including its reputation, business, including sales
political situation in parts of the world, particularly in Russia/Ukraine market share, market access, supply chain and R&D activities, financial
and parts of the Middle East and China, remains uncertain and the level condition, operating results, cash flows, or prospects.
of export controls and sanctions is still relatively high from a historical
perspective. This level could even increase, thus significantly impacting 3.3 Ericsson is subject to certain US and other anti-corruption
our operations where such increase occurs, including in these markets. (including anti-bribery, anti-money-laundering, sanctions, terror
The most recent increase in export controls has particularly targeted finance and anti-terrorism) laws, rules and regulations. Ericsson
Chinas ability to develop advanced super computers and artificial intelli- may be subject to further adverse consequences under the DOJ Plea
gence, including the semiconductors needed for those operations. A uni- Agreement with the United States Department of Justice (DOJ) and
versal element of the sanctions is the financial restrictions with respect the injunction issued in connection with the settlement with the U.S.
to individuals and legal entities, but sanctions can also restrict certain Securities and Exchange Commission (SEC), from 2019 and other
exports and ultimately lead to a complete trade embargo towards a investigations by governmental authorities.
country. During the last few years, the global free trade system has been The Company is required to comply with anti-corruption (including
under sustained attack, which has increased the risk of states adopting anti-bribery, anti-money-laundering, sanctions, terror finance and anti-
policies and actions that violate WTO agreements. Further, there is a risk terrorism) laws, rules and regulations in jurisdictions where Ericsson
in many countries of unexpected changes in regulatory requirements, does business. In addition, some of the international locations in which
tariffs and other trade barriers, price or exchange controls, restrictions of we operate lack a developed legal system and have elevated levels of
imports, or other governmental policies that could limit Ericsson’s opera- corruption affecting many aspects of conducting business. From time
tions and decrease Ericsson’s profitability. Furthermore, export control to time, the Company investigates potential instances of corruption,
regulations, sanctions or other forms of trade restrictions targeting
including potential violations of anti-bribery, anti-money-laundering, DPA. Under the DOJ Plea Agreement, Ericsson will plead guilty to previ-
sanctions, terror finance and anti-terrorism laws, rules and regulations. ously deferred charges relating to conduct prior to 2017. In addition,
The Company cannot assure that its employees, subcontractors Ericsson agreed to pay a fine of USD 206,728,848. The entry of the DOJ
and agents have complied with these requirements in the past, and the Plea Agreement will bring the DPA to an end. As set forth in the DOJ Plea
Company faces exposure to possible past, present and future violations Agreement, Ericsson will have certain continuing obligations through
of these requirements by its employees, subcontractors and agents. June 2024, as set forth in the DOJ Plea Agreement, including coopera-
Actions by Ericsson’s employees, or by third-party intermediaries acting tion, reporting evidence or allegations of potential FCPA violations,
on the Company’s behalf in violation of these laws, rules or regulations, continuing to engage an independent compliance monitor and improv-
whether carried out in the US or elsewhere in connection with the con- ing its compliance program.
duct of Ericsson’s business, may expose the Company to significant civil On January 12, 2023, the Company made a provision in the fourth
or criminal liability that would materially harm the Company, including quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation
its reputation, business, financial condition, funding, operating results, to the DOJ Plea Agreement. The provision also included estimated
cash flows, and prospects. expenses (SEK 0.1 billion) for the previously announced extended
In December 2019, Ericsson entered into a resolution with the DOJ compliance monitorship. The Company’s internal investigation and its
resolving the DOJ’s investigations into Ericsson’s business dealings in cooperation with authorities in relation to the matters discussed in the
Djibouti, China, Vietnam, Indonesia and Kuwait. The resolution included 2019 internal Iraq investigation report remain open and ongoing. With
a deferred prosecution agreement (DPA) and a guilty plea by Ericsson’s respect to the matters described in the 2019 internal Iraq investigation
Egyptian subsidiary to a criminal violation of the US Foreign Corrupt report, the Company continues to thoroughly investigate the matters
Practices Act’s (FCPA) anti-bribery provisions. in full cooperation with the DOJ and the SEC. As previously disclosed,
Under the DPA, the Company admitted to the conduct described in the Company’s 2019 internal Iraq investigation did not conclude that
the DPA’s statement of facts, and the DOJ agreed to defer prosecution Ericsson made or was responsible for any payments to any terrorist
of Ericsson for the DPA’s three-year term if Ericsson did not violate the organization and significant further investigation over the course of
terms of the DPA. 2022 has not altered this conclusion.
In October 2021, the DOJ notified Ericsson of its determination that We are subject to potential material additional liability resulting from
we breached our obligations under the DPA by failing to provide required past conduct, including allegations of past conduct in Iraq or other loca-
information to the DOJ. tions that remains unresolved or unknown. These include risks related to
In February 2022, the Company publicly disclosed that an internal internal control and governance, including the potential to incur material
investigation in 2019 included a review of the conduct of Ericsson liability in connection with internal controls surrounding payments made
employees, vendors and suppliers in Iraq during the period 2011–2019. to third parties in connection with historical conduct in Iraq or other
The investigation found serious breaches of compliance rules and locations.
the Company’s Code of Business Ethics and identified evidence of We also face other negative consequences from these matters,
corruption-related misconduct and other serious violations, including including matters under review as part of our ongoing and future
payments to intermediaries and the potential use of alternate transport communications with governmental authorities to comply with our
routes in connection with circumventing Iraqi Customs, at a time when obligations under the DOJ Plea Agreement. Governmental authorities
terrorist organizations, including ISIS, controlled some transport routes. in the US and elsewhere are investigating us for possible violations
The investigation also identified payment schemes and cash transac- of applicable anti-corruption (including anti-bribery, anti-money
tions that potentially created the risk of money laundering. The investi- laundering, sanctions, terror finance and anti-terrorism) laws, rules or
gators could not determine the ultimate recipients of any payments, nor regulations, and we currently face litigation related to these matters.
identify that any Ericsson employee was directly involved in financing Any criminal prosecution or civil or criminal penalties imposed as a result
terrorist organizations. of non-compliance for any reason with the DOJ Plea Agreement or
As a result of the investigation, several employees were terminated consent judgment could have a material adverse effect on the Company,
from the Company and multiple other disciplinary and other remedial including its reputation, business, financial condition, funding, operating
actions were taken. results, cash flows, or prospects.
In March 2022, the DOJ informed Ericsson it had determined that, In addition, the Company may face potential material additional
before entering into the DPA, the Company provided insufficient infor- costs and liability resulting from our ongoing future compliance with
mation to the DOJ about the Company’s 2019 internal investigation into the terms of the DOJ Plea Agreement with the DOJ and extended
conduct in Iraq. The DOJ also determined that the Company breached compliance monitorship, including to become a target for public scrutiny
the DPA by failing to inform the DOJ about the investigation after enter- as a result of entering into the DOJ Plea Agreement, incorrect misinter-
ing into the DPA. pretations of the resolution, complaints to regulatory agencies, negative
In June 2022, the SEC informed us that it opened an investigation media publicity, potential debarment from government contracting in
concerning matters described in the Company’s 2019 Iraq investiga- the United States and elsewhere, reputational risk, as well as potential
tion report. Under Ericsson’s consent judgment with the SEC, we are negative impact on commercial contracts, dealings with financial
permanently enjoined from violating the FCPA’s anti-bribery, books and institutions and, contracts with suppliers, primarily due to counter-party
records and internal controls provisions. Violations of the injunction or reluctance to continue business relationships.
consent judgment could subject us to new civil and criminal penalties as Ericsson may also face other potentially negative consequences
well as new enforcement actions. relating to the investigations by, and settlements with, the DOJ and
In December 2022, the Company agreed with the DOJ and SEC to SEC, or to other potential investigations. Enforcement authorities in the
extend the term of the Company’s independent compliance monitor for US or elsewhere, including the SEC, the DOJ or The Office of Foreign
one year, to June 2024. Assets Control (OFAC), could investigate us for additional possible
On March 2, 2023, the Company reached a resolution (DOJ Plea violations of applicable anti-corruption (including anti-bribery, anti-
Agreement) with the DOJ regarding non-criminal breaches under its money laundering, sanctions, terror finance and anti-terrorism) laws,
rules or regulations of which we are aware or unaware at any time. China. Ericsson is cooperating with the investigation, which is still in a
Such violations could result in severe reputational damage, and have a fact-finding phase. The next steps include continued fact-finding and
materially adverse effect on Ericsson, including its reputation, business, meetings with SAMR in order to facilitate the authority’s assessment
financial condition, operating results, cash flows, or prospects and could and conclusions. In case of adverse findings, SAMR has the power to
constitute a violation of the DOJ Plea Agreement or the consent judg- impose behavioral and financial remedies, which may have material
ment with the SEC. Neither the DOJ Plea Agreement nor the consent adverse effects on Ericsson’s business, financial condition and operating
judgment prevents the DOJ, SEC or any other authorities from carrying results.
out investigations with respect to facts not covered in the agreements On March 3, 2022, Telefonaktiebolaget LM Ericsson and certain
or in other jurisdictions, or prevents other authorities from carrying out officers of Ericsson were named as defendants in a putative class action
investigations related to these or other matters. Similarly, the resolutions filed on behalf of purchasers of Ericsson ADS in the United States, in
with the DOJ and SEC do not foreclose third parties, such as competi- the United States District Court for the Eastern District of New York. An
tors, customers, suppliers, or shareholders, from commencing litigation amended complaint was filed on September 9, 2022, which added a
related to these or other matters. former Ericsson officer as a defendant. The amended complaint alleges
There can be no assurance that the remedial measures described violations of United States securities laws, in connection with allegedly
above and any others Ericsson may take in the future will be effective false and misleading statements principally concerning the Company’s
or that there will not be a finding of material weakness in Ericsson’s adherence with its compliance and anti-corruption policies and obliga-
internal controls. Any one or more of the foregoing could have a material tions and the conduct of its business in Iraq. In December 2022, Ericsson
adverse effect on the Company, including its reputation, business, finan- and the Individual Defendants filed a motion to dismiss the complaint.
cial condition, funding, operating results, cash flows, or prospects. In February 2023, the plaintiff opposed the motion.
Additionally, any ongoing media or governmental interest in In August 2022, a civil lawsuit was filed in the United States
investigations and resolutions or additional company investigations District Court for the District of Columbia against Telefonaktiebolaget
that we are currently undertaking or may undertake in the future could LM Ericsson and Ericsson Inc. The lawsuit was brought by US military
result in the discovery of additional facts, impact the public perception service members and employees of US government contractors who
of Ericsson and result in reputational harm and other negative conse- were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria
quences. For example, customers or suppliers may reconsider their rela- from 2005 to 2021, as well as by their family members. The lawsuit
tionships with the Company, or governmental and regulatory authorities asserts claims against Ericsson under the US Anti-Terrorism Act alleg-
in the relevant jurisdictions or elsewhere could seek to penalize the ing that Ericsson made payments that ultimately aided the terrorist
Company or place restrictions on its operations or ability to participate organizations that committed, planned or authorized the attacks. In
in public tenders. Harm to reputation, or any resulting disruption in cus- November 2022, the Company filed a motion to dismiss the complaint.
tomer or supplier relationships, could have a material adverse impact on On December 20, 2022, plaintiffs filed an amended complaint, which
Ericsson, including its reputation, business, financial condition, funding, added additional plaintiffs, named Ericsson AB, CEO Börje Ekholm and a
operating results, cash flows, or prospects. former employee as additional defendants and also asserted additional
allegations and claims.
3.4 Ericsson is involved in lawsuits, legal proceedings and regula- An unfavorable outcome of any of the abovementioned proceedings
tory investigations, which, if determined unfavorably, could require may have material adverse effects on Ericsson’s business, financial
the Company to pay substantial damages, fines and/or penalties. condition and operating results.
In the normal course of Ericsson’s business Ericsson is involved in legal For additional information regarding certain of the inquiries and
proceedings. These proceedings include matters such as commercial lawsuits in which Ericsson is involved, see “Legal proceedings” in the
disputes, claims regarding intellectual property, labor disputes and any Board of Directors’ Report.
government or authority inquiry or investigation, e.g. antitrust and tax,
disputes. Legal proceedings can be expensive, lengthy and disruptive 3.5 Ericsson may be found non-compliant with privacy, security
to normal business operations. Moreover, the results of complex legal and data localisation regulations as well as corresponding contrac-
proceedings are difficult to predict. An unfavorable resolution of a par- tual obligations and may be subject to regulatory penalties and/or
ticular matter could have a material adverse effect on Ericsson’s busi- breach of contract claims.
ness, operating results , financial condition and reputation. As a publicly More stringent privacy, security and data localisation regulations are
listed company, Ericsson may be exposed to lawsuits in which plaintiffs developed in a rapid pace in many countries and markets in which
allege that the Company or its officers have failed to comply with securi- Ericsson operates, including the General Data Protection Regulation
ties laws, stock market regulations or other laws, regulations or require- (EU), and national privacy regimes in India, China and some states of
ments. Whether or not there is merit to such claims, the time and costs the United States. We are also subject to contractual obligations to our
incurred to defend the Company and its officers and the potential settle- customers and third parties relating to privacy, security and our use
ment or compensation to the plaintiffs could have significant impact on of data generally, which, amongst other things, requires us to ensure
Ericsson’s reported results and reputation. appropriate security and limit our use of customer data. Whilst we
In addition, the Company is from time to time and may in the future strive to comply with applicable privacy, security and data localisation
be subject to additional inquiries, litigation or other proceedings or regulations and our contractual obligations, the complexity, uncertainty,
actions, regulatory or otherwise, arising in relation to the matters pace of implementation of new laws and contradictions in local and
described above and related or other litigation and investigative regional privacy, security and data localisation regulations may mean
matters. An unfavorable outcome of any such litigation or regulatory that Ericsson is found to be non-compliant with these requirements
proceeding or action could have a material adverse effect on Ericsson’s or our contractual obligations, and subject to penalties levied against
business, financial condition and operating results. Ericsson, breach of contract claims, with the risk for associated damage
In April 2019, Ericsson was informed by China’s State Administration to Ericsson’s brand and reputation. We continue to review on a periodic
for Market Regulations (SAMR) Anti-monopoly bureau that SAMR has basis our privacy compliance across our global operations to comply
initiated an investigation into Ericsson’s patent licensing practices in with these varied global and ever changing requirements. For example
as part of this review cycle, we are reviewing data management in 4 Internal control risks
connection with our customer support function and are in the process
of identifying and implementing certain changes, for example, changes 4.1 Cybersecurity incidents may have a material adverse effect on
to data access and amendments to customer contracts and policies Ericsson’s business, operations, financial performance, customer
and procedures. Due to the diverse nature of legislation worldwide of and vendor relationships, reputation and brand, and may lead to
privacy, security and data localisation regulations, any single incidence significant penalties or litigation, or to regulatory investigations or
of non-compliance by Ericsson may lead to regulatory agencies in actions.
various jurisdictions levelling separate penalties or judgments against Threat actors exploiting vulnerabilities in Ericsson’s systems, processes
Ericsson. Due to the nature of Ericsson’s business and the amount of or personnel due to insufficient or failing controls, e.g. lack of access
personally identifiable information of which Ericsson is the controller or management or use of more sophisticated attack techniques could
processor, such an event could have far ranged consequences, such as result in security incidents that may impact the confidentiality, avail-
orders to change our operations or cease processing personally identifi- ability or integrity of information assets, IT assets, personnel, products,
able information, even if it was accidental or caused by a third party services, or solutions. These incidents may include data breaches,
outside of the control of Ericsson. This could include large fines, as well intrusions, espionage, disruptive attacks utilizing malware (such as
as significant damage claims and losing trust from customers, end-users ransomware or other extortion-based tactics), exploitation of hardware
and employees, which may have material adverse effects on Ericsson’s or software vulnerabilities or bugs, data privacy infringements, leakage
business, reputation, financial condition and operating results and may of confidential or sensitive data, unauthorized or accidental usage or
require us to change our business practices and potentially the services, modification of data or accounts and general malfeasance.
features, integrations and other capabilities of our offerings. Ericsson utilizes third parties to a large extent to whom the Company
has outsourced significant aspects of Ericsson’s IT infrastructure,
3.6 Ericsson may be found non-compliant with new and emerging product development, services, hardware, software, finance and other
human rights and environmental due diligence regulations and may internal and external-facing operations. Events or incidents caused
be subject to administrative penalties and/or civil liability. as a result of vulnerabilities in their operations or products could have
The regulatory landscape addressing corporate conduct in relation a material adverse effect on Ericsson, Ericsson’s business, financial
to human rights and environmental impacts is rapidly evolving. New performance, reputation and brand, potentially disrupting operations,
legislation, imposing more stringent due diligence requirements (for leaking valuable or sensitive information, personal data or damaging
example the US Uyghur Forced Labor Prevention Act (UFLPA), The Ericsson’s products that have been installed in the Company’s custom-
Norwegian Transparency Act and the German Supply Chain Due ers’ networks.
Diligence Law), has already entered into force and requires Ericsson to A cybersecurity incident in Ericsson’s operations or supply chain could
assess risks from a full supply chain perspective, beyond first-tier sup- have an adverse impact on the integrity of solutions or services provided
pliers. Additionally, emerging legislation from the European Union (The by Ericsson as well as Ericsson’s ability to comply with legal, regulatory
Corporate Sustainability Due Diligence Directive and the Forced Labor or contractual requirements. These incidents may include tampering
Ban Regulation) will put additional requirements on Ericsson to adopt with components, the inclusion of backdoors or implants, the uninten-
and refine additional mechanisms to identify, address, prevent and tional inclusion of vulnerabilities in components or software, and cyber-
mitigate certain human rights and environmental risks in its operations security incidents which prevent a supplier from being able to fulfil com-
and business relationships. Because of this regulation, Ericsson may mitments to Ericsson. In the past few years, widely publicized incidents
be expected to engage in increasingly more detailed due diligence with involving third parties such as SolarWinds and Apache’s Log4j software
respect to its third parties, some of which may not have the controls and are examples of situations in which cyberattacks on supply chain players
data necessary to assist Ericsson with its compliance. Due to the global affected companies that utilized their products and services.
reach of these legislations, impacts in any country of operation or where Any cybersecurity incident including unintended use, misconfigura-
Ericsson engages with suppliers, customers or other third parties may tion, or unintended actions, involving Ericsson’s operations, supply
lead to non-compliance thereby potential administrative penalties or chain, product development, services, third-party providers or installed
civil liability. Moreover, the UFLPA and the upcoming EU Forced Labor product base, could cause severe harm to Ericsson and could have a
Ban Regulation, enable customs authorities to seize and destroy ship- material adverse effect on Ericsson’s business, financial performance,
ments that include components produced with forced labor, unless the customer and vendor relationships, reputation and brand, and may
company in question provides credible evidence of full supply chain due introduce the possibility of litigation or regulatory investigations or
diligence efforts that prove the absence of forced labor. Such actions actions, increased costs for remediation and compliance, diminished
by law enforcement would have significant financial and reputational reputation and brand in the marketplace, any or all of which could mate-
impacts on Ericsson’s operations and business relationships. In order rially impact Ericsson’s financial results.
to comply with the legislation, Ericsson needs to endeavor to increase Ericsson’s network systems and storage and other business applica-
supply chain transparency and knowledge of supplier base and material tions, and the systems, storage and other business applications main-
content. Ericsson might also need to shift its supply chains from high-risk tained by the Company’s third-party providers, have been in the past,
countries, which could have adverse financial implications, including and are expected to be in the future, subject to cybersecurity incidents.
increasing the total costs associated with our businesses. We expect continued attempts to gain unauthorized access to breach
our systems and/or information, and other forms of malfeasance and
disruptive attacks. In some cases, such incidents are difficult to antici-
pate or to detect immediately and the damage caused thereby. Threat
actors are increasingly sophisticated in using attack techniques that are
specifically engineered to avoid detection, circumvent security controls,
and obfuscate forensic evidence, which means that we may be unable 4.5 Insiders may steal or monitor information or disrupt networks
to identify, detect, respond or remediate in a timely manner. related to Ericsson or its customers, through technological or non-
If an actual or perceived breach of security occurs in Ericsson’s net- technological means.
work or any of its third-party providers’ networks, Ericsson could incur To gain strategic access or to steal specific information competitors or
significant costs and the Company’s reputation could be harmed. While governments may induce insiders or recruit employees who sell informa-
Ericsson works to safeguard Ericsson’s internal network systems and tion or services for personal gain. Several organizations and institutes
assess and validate the security of the Company’s third-party providers report an increase of insider threat over the last years. Any insider
to mitigate these potential risks, including through security requirements incident could cause severe harm to Ericsson and could have a material
and employee awareness and training, there is no assurance that such adverse effect on Ericsson’s business, financial performance, customer
actions will be sufficient to prevent security incidents. Any insurance that and vendor relationships, reputation and brand, and may introduce
we carry may be partially or wholly insufficient to cover losses or costs litigation or other actions.
associated with responding to and remediating any or all cybersecurity
incidents that we may experience.
5 Environmental, social and business conduct risks
4.2 The presence of vulnerabilities in Ericsson’s products, services
or operations, may not be detected during product development and 5.1 Failure to comply with environmental, social and business
operations, and may be leveraged by a threat actor to cause material conduct regulations in many jurisdictions may expose Ericsson to
harm to Ericsson or Ericsson’s customers. significant penalties and other sanctions.
Vulnerabilities in Ericsson’s products, solutions or services not detected Ericsson is subject to environmental, social and business conduct
and treated during product development or solution delivery may be applicable laws, rules and regulations as well as related requirements.
exploited by a threat actor to cause harm to Ericsson’s customers, end- Ericsson expects such laws, rules and regulations and other require-
users or Ericsson. Vulnerabilities could be brought in through different ments to increase as governments impose new laws, rules, regulations
stages of the product life cycle. In some situations, it may be hard to and other requirements. These laws, rules, regulations and other require-
detect these vulnerabilities due to their location, or due to the fact that ments include anti-corruption laws (including anti-bribery, anti-money-
they are unknown vulnerabilities, often referred to as “zero-day vulner- laundering, sanctions, terror finance and anti-terrorism), as well as envi-
abilities”. As almost any modern software can contain open source and ronmental, occupational health and safety laws and regulations that are
third-party components, so does software in networks, unmitigated applicable to Ericsson’s operations, facilities, products and services in
security exposures can put Ericsson customers at varying levels of risk each of the jurisdictions in which the Company operates. Ericsson works
and expose Ericsson to liabilities or loss of business. Cyberattacks and actively to promote compliance with applicable laws, rules, regulations
security incidents are expected to accelerate in both frequency and and customer requirements related to the environment, health, and
impact as attackers are increasingly sophisticated and utilize tools and safety (including without limitation occupational health and safety) that
techniques that are designed to circumvent controls, avoid detection, apply to the Company; however, if Ericsson has failed or fails to comply
and remove or obfuscate forensic evidence, which means that Ericsson with these laws, rules or regulations, the Company could be subject to
may be unable to detect, investigate, contain or recover from future significant penalties and other sanctions that could have a material
attacks or incidents in a timely or effective manner. adverse effect on Ericsson’s business, operating results, financial condi-
tion, reputation and brand. Additionally, there is a risk that Ericsson
4.3 Identities may be compromised, either from the misuse of may have to incur expenditures to cover environmental, occupational
Ericsson’s identities or accounts, leading to material damage to health and safety-liabilities to maintain compliance with current or
Ericsson’s products, services or brand. future applicable laws and regulations or to undertake any necessary
If identities in Ericsson are misused or compromised, it can be difficult remediation. It is difficult to reasonably estimate the future impact of
to differentiate authorized parties undertaking normal account activi- environmental matters, such as climate change and extreme weather
ties from the threat actor’s use of a compromised identity or credential. events, including potential liabilities. Future regulations or judgments
Ericsson’s identity and access management routines are required to could have a significant adverse effect on Ericsson’s business, operating
access Ericsson’s customer’s networks, and any limitation of this capa- results , financial condition, reputation and brand.
bility would impact Ericsson’s ability to offer services and products to
Ericsson’s customers, which could have a material adverse effect upon 5.2 Ericsson may fail to comply with environmental, social and
Ericsson’s reputation and its business as a whole. business conduct standards, which could negatively affect the
Company.
4.4 Threat actors may target employees, or other members of Ericsson’s management system includes the Code of Business Ethics,
Ericsson’s workforce, through technological and non-technological the Code of Conduct for Business Partners and a Sustainability Policy,
means. as well as other Group Policies and Directives to govern the Company’s
Recent trends have shown that there is a willingness to target end users, processes and operations, and to enable the Company’s processes and
rather than the entire enterprises. This has manifested itself in the rise operations to be conducted in accordance with applicable laws, rules,
of threats such as ransomware, phishing, spear phishing, spoofing and regulations and other requirements. Ericsson’s Code of Business Ethics
other extortion methods. With a diverse workforce of approximately and Code of Conduct for Business Partners are based on the Company’s
105,000 employees, Ericsson is susceptible to risks of disruption or commitment to the UN Global Compact ten principles and the UN
information loss resulting from large scale attacks towards Ericsson’s Guiding Principles on Business and Human Rights.
employees, or society at large. This could have a material adverse effect Ericsson’s compliance with the policies, directives, laws, rules and
on the Company’s business, financial condition, reputation and brand. regulations, including anti-corruption (including anti-bribery, anti-
money laundering, sanctions, terror finance and anti-terrorism) laws,
rules and regulations, as well as the Company’s suppliers’ adherence effects to human health. However, any perceived risk or new scientific
to Ericsson’s Code of Conduct for Business Partners and related laws findings of adverse health effects from mobile communication devices
is subject to risk, and Ericsson has not been in compliance with all such and equipment could adversely affect us through a reduction in sales
policies, directives, laws, rules and regulations in the past and cannot or through liability claims. Although Ericsson’s products are designed
provide any assurances that future violations will not occur, which could to comply with currently applicable safety standards and regulations
have material adverse effects on Ericsson, including its reputation, busi- regarding radio frequency electromagnetic fields, the Company cannot
ness, financial condition, operating results, cash flows, or prospects. See guarantee that Ericsson will not become the subject of product liability
risk factor 3.3 above. claims. We also cannot guarantee that the Company will not be held
There is also an increased demand from external stakeholders, for liable for such claims or be required to comply with future changed regu-
example non-governmental organizations and investors, on transpar- latory requirements. Ericsson may in addition be affected by regulatory
ency about sustainability and corporate responsibility issues that might or other restrictions imposed on the Company’s customers use of radio
be difficult to fulfil, including expectations that the Company make equipment that may have a material adverse effect on our business,
commitments. If we fail to adequately meet these expectations, or fail operating results, financial condition, reputation and brand.
to timely meet any related goals or commitments, our business may be
adversely affected. In addition, the Company’s disclosures regarding 5.4 Regulations related to “conflict minerals” may cause us to incur
such matters may make us the target of activists, regulators and others additional expenses, and may make our supply chain demands more
who want the Company to take different approaches on such matters or complex.
provide additional disclosures or commitments, and such engagement In 2012, the U.S. Securities and Exchange Commission (SEC) adopted a
could result in increased costs or reputational damage. Certain of our rule requiring disclosures of specified minerals (“conflict minerals”) that
disclosures and commitments regarding such matters may be based in are necessary to the functionality or production of products manufac-
part or in whole on third-party information or third-party performance, tured or contracted to be manufactured by companies that file periodic
and we cannot assure the quality of third-party information nor assure reports with the SEC, whether or not these products or their components
third-party performance. are manufactured by third parties. Ericsson can provide no assurance
Climate change and the potential environmental impact resulting that there will not be material costs associated with complying with the
therefrom may also result in new environmental, health and safety laws, disclosure requirements. These requirements could adversely affect the
rules and regulations that may affect us, our suppliers, and our custom- sourcing, availability and pricing of minerals used in the manufacture of
ers. Such laws, rules or regulations could cause us to incur additional certain of our products, which may have a material adverse effect on our
direct costs for compliance, including costs associated with changes business. In addition, since our supply chain is complex, the Company
to manufacturing processes, or costs associated with the procurement may not be able to sufficiently verify the origins for these minerals
of raw materials and components used in our products, as well as contained in our products through the due diligence procedures that
increased indirect costs resulting from our customers, suppliers or both Ericsson implements, which may harm our reputation and our business.
incurring additional costs that are passed on to us. These costs may Ericsson may also encounter challenges if customers put more emphasis
adversely impact the Company, including its reputation, business, finan- on the idea that all of the Ericsson’s product components be certified as
cial condition, operating results, cash flows, or prospects. In addition, “conflict-free”. Ericsson acknowledges that similar challenges exist for
climate change could cause severe weather events, such as droughts, other mineral and metals, outside the scope of the SEC disclosure rule.
heat waves, wildfires, storms, and flooding, to occur more frequently or
with greater intensity, as well as chronic changes in temperatures and 5.5 Employees and sub-contractors may be put at risk in areas
rising sea levels, which could pose physical risks to our manufacturing where Ericsson operates.
facilities or our suppliers’ facilities, cause disruptions in our upstream and Ericsson’s commitment to bring connectivity to the world involves oper-
downstream logistic flows, and consequently increase operating costs ations in areas of high risk related to local conflicts, warfare, criminality,
and/or cause business interruptions. authoritarian rule, man-made accidents or naturally caused crises, such
as flooding, earthquakes, tsunamis or other. Such situations may risk
5.3 Potential health risks related to radiofrequency electro- the lives or welfare of employees, subcontractors’ employees, or their
magnetic fields may subject us to various product liability claims and families, as well as trigger liabilities under International Humanitarian
result in regulatory changes. Law. Ericsson’s internal frameworks, contractual agreements, protective
The mobile telecommunications industry is subject to claims that mobile measures, and emergency response plans, may not be enough to protect
devices and other equipment that generate radiofrequency electromag- employees or subcontractors’ employees from harm. If Ericsson is found
netic fields may expose individuals to health risks. At present, a sub- to not have done enough to provide protection or support in such situa-
stantial number of scientific reviews conducted by various independent tions, it could have adverse material effects on our business and reputa-
research bodies have concluded that radiofrequency electromagnetic tion and can lead to litigation and sanctions.
fields, when used at levels within the limits prescribed by public health
authority safety standards and recommendations, cause no adverse
Financial report 2022 Auditor’s report 123
Auditor’s report
To the general meeting of the shareholders of Telefonaktiebolaget LM Ericsson (publ) corporate identity number 556016-0680
Report on the annual accounts and Revenue recognition of significant contracts

consolidated accounts Ericsson generates revenues from sales of hardware, software,
and services to its customers. Total revenue for 2022 amounted to
Opinions SEK 271.5 billion. The majority of these revenues are related to multi-
We have audited the annual accounts and consolidated accounts of year framework agreements with large customers which often include
Telefonaktiebolaget LM Ericsson (publ) for the financial year January 1, discounts and incentives arrangements. The customers issue purchase
2022–December 31, 2022. The annual accounts and consolidated orders under these framework agreements that in combination
accounts of the company are included on pages 14–122 in this constitute a commitment to purchases of products and services over
document. the duration of the agreement with the customer. These arrangements
In our opinion, the annual accounts have been prepared in may give rise to a risk of material misstatement due to the incorrect
accordance with the Annual Accounts Act and present fairly, in all identification of performance obligations and timing of revenue
material respects, the financial position of the parent company as of recognition for each obligation, for significant contracts that could
31 December 2022 and its financial performance and cash flow for have a material impact on the financial statements.
the year then ended in accordance with the Annual Accounts Act. The Ericsson conducts an assessment at contract inception to determine
consolidated accounts have been prepared in accordance with the which promised goods and services in a customer contract are distinct
Annual Accounts Act and present fairly, in all material respects, the and accordingly identified as performance obligations. The Company
financial position of the group as of 31 December 2022 and their finan- considers there to be a distinct performance obligation if the customer
cial performance and cash flow for the year then ended in accordance can benefit from the goods or service either on its own or together with
with International Financial Reporting Standards (IFRS), as adopted other resources readily available, and if the Company’s obligation to
by the EU, and the Annual Accounts Act. The statutory administration transfer the goods or service is separately identifiable from other obliga-
report is consistent with the other parts of the annual accounts and tions in the contract.
consolidated accounts. The amount and timing of revenue recognized is determined in
We therefore recommend that the general meeting of sharehold- relation to the individual elements of the contract. Transaction prices
ers adopts the income statement and balance sheet for the parent including variable considerations, discounts, concessions, and incentive
company and the group. agreements, are estimated at the commencement of the contract (and
Our opinions in this report on the annual accounts and consolidated periodically thereafter). Judgment is used in the estimation process
accounts are consistent with the content of the additional report based on historical experience with the type of business and customer
that has been submitted to the parent company’s audit committee in and in allocating revenue to each performance obligation by reference
accordance with the Audit Regulation (537/2014) Article 11. to their standalone selling prices.
We identified revenue recognition of significant contracts as a key
Basis for Opinions audit matter due to the complex application of revenue recognition
We conducted our audit in accordance with International Standards accounting standards and that it requires management to make
on Auditing (ISA) and generally accepted auditing standards in Sweden. judgments and estimates in determining the amount and timing of
Our responsibilities under those standards are further described in revenue recognized in relation to individual elements of the contracts.
the Auditor’s Responsibilities section. We are independent of the par- Accounting principles and disclosures related to revenue recognition
ent company and the group in accordance with professional ethics can be found in note B1 and B2.
for accountants in Sweden and have otherwise fulfilled our ethical Our audit procedures related to the amount and timing of revenue
responsibilities in accordance with these requirements. This includes recognized in relation to significant contracts included, but were not
that, based on the best of our knowledge and belief, no prohibited limited to the following:
services referred to in the Audit Regulation (537/2014) Article 5.1 have – We tested the effectiveness of the Company’s controls over revenue
been provided to the audited company or, where applicable, its parent recognition with particular focus on the controls related to the iden-
company or its controlled companies within the EU. tification of performance obligations within revenue contracts and
We believe that the audit evidence we have obtained is sufficient determination of the timing of recognition for each revenue obliga-
and appropriate to provide a basis for our opinions. tion including the reviews performed by the company’s central board
for material and complex deals.
Key Audit Matters – We tested a sample of significant contracts to assess management’s
Key audit matters of the audit are those matters that, in our professional judgments and estimates related to the identification of performance
judgment, were of most significance in our audit of the annual accounts obligations and determination of the timing of recognition for each
and consolidated accounts of the current period. These matters were revenue obligation based on the contract.
addressed in the context of our audit of, and in forming our opinion – We tested a sample of revenue transactions recorded during the year
thereon, the annual accounts and consolidated accounts as a whole, by tracing them to supporting evidence of delivery and acceptance
but we do not provide a separate opinion on these matters. and assessed the judgments and estimates for revenue recorded
in the period by comparing it to contractual terms such as, delivery
terms, transaction prices including variable considerations, dis-
counts, and incentive agreements.
124 Auditor’s report Financial report 2022
– We tested a sample of ongoing negotiations with existing customers makes to identify the intangible assets and calculate the fair values.
and analysed reversals of revenue subsequent to year-end for indi- This required a high degree of auditor judgment and an increased extent
cators of unrecorded discounts and concessions during the period. of effort, including the need to involve our fair value specialists, when
performing audit procedures to evaluate the reasonableness of man-
Valuation of Goodwill agement’s forecasts of future estimated cash flows and the selection of
Goodwill is a significant asset in the consolidated balance sheet and the discount rate to arrive at the present value for the intangible assets
amounts to SEK 84.6 billion as of December 31, 2022. The Company’s as of the date of acquisition.
evaluation of the carrying value of goodwill involves the comparison of Our audit procedures related to the identification and fair value
the recoverable amount of each cash generating unit to their carrying determination of the acquired intangible assets included, but were not
values. The Company’s assessment is based on a discounted cash flow limited to the following:
model using a business plan covering five years followed by a steady or – We tested the effectiveness of the Company’s controls over the pur-
declining growth rate, which requires management to make significant chase price allocation and identification and valuation of the intangi-
estimates and assumptions regarding forecasts of future sales growth, ble assets, with particular focus on the controls over management’s
operating income, working capital and capital expenditure require- preparation and review of assumptions for the calculation of fair
ments, as well as assumptions on discount rates. Changes in these value, future cash flows and the selection of the discount rate used.
assumptions could have a significant impact on either the recoverable – We tested the purchase price allocation in order to assess the com-
amount, the amount of any impairment charge, or both. In 2022, the pleteness in the identification of acquired intangible assets.
Company completed its acquisition of Vonage Holdings Corp. which – We evaluated management’s ability to accurately forecast future
added SEK 41.3 billion of goodwill. sales growth and operating income by comparing actual results to
We identified valuation of goodwill as a key audit matter because of historical forecasts, historical results, external analyst reports and
the significant judgments made by management to estimate the recov- internal communications to management and the Board of Directors.
erable amount. The assessment of management’s assumptions regard- – With the assistance of our fair value specialists, we evaluated the
ing recoverable amount requires a high degree of auditor judgment, discount rates, including testing the underlying source information
including an increased extent of complexity and the need to involve our and the mathematical accuracy of the calculations, and developing
fair value specialists. Accounting principles and disclosures related to a range of independent estimates and comparing those to the dis-
goodwill and other intangible assets can be found in note C1. count rates selected by management.
Our audit procedures related to the assumptions regarding recover-
able amount included, but were not limited to the following: Provision related to the alleged DPA breach with
– We tested the effectiveness of the Company’s controls over good- United States Department of Justice
will impairment evaluation and determination of the recoverable In December 2019, Ericsson entered into a Deferred Prosecution
amount with particular focus on the controls over management’s Agreement (“DPA”) with the US Department of Justice (“DOJ”) to
preparation and review of assumptions for future sales growth, resolve the DOJ’s investigations into Ericsson’s business dealings in
operating income, working capital, capital expenditure requirements certain countries. Under the DPA, the Company admitted to the conduct
and method for determining the discount rate used. described in the DPA’s statement of facts, and the DOJ agreed to defer
– We evaluated management’s ability to accurately forecast future prosecution of Ericsson for the DPA’s three-year term if Ericsson does
sales growth and operating income by comparing actual results to not violate the terms of the DPA. In October 2021, the DOJ notified
management’s historical forecasts, the Company’s historical results, Ericsson of its determination that the Company breached certain obli-
external analyst reports, industry research, peer companies and gations under the DPA by failing to provide required information to the
internal communications to management and the Board of Directors. DOJ. Further, in March 2022, Ericsson was informed that the DOJ had
– With the assistance of our fair value specialists, we evaluated the determined that the Company had breached the DPA by not providing
discount rates, including testing the underlying source information sufficient information regarding its internal investigations into conduct
and the mathematical accuracy of the calculations, and developing in Iraq in the period from 2011 to 2019.
a range of independent estimates and comparing those to the dis- In the fourth quarter of 2022, the Company recorded a provision
count rates selected by management. of SEK 2.3 billion in relation to a potential resolution with the DOJ
regarding previously announced, non-criminal, alleged breaches
Business combinations under its 2019 DPA. The provision also includes estimated expenses
The Company completed the acquisition of Vonage Holdings Corp. for a for the extension of the monitorship by one year to June 2024. As of
consideration equivalent of 53.3 BSEK on July 21, 2022. The Company December 31, 2022, Ericsson had not reached a resolution with the DOJ
accounted for the acquisition as a business combination in accordance regarding the alleged breaches.
with IFRS 3, ‘Business Combinations’. Accordingly, the purchase price We identified the provision for the alleged DPA breaches as a key
was allocated to the assets acquired and liabilities assumed, using the audit matter due to the significant amount of judgement and assump-
acquisition method, based on their respective fair values at the acquisitions required by management in determining whether, under IAS 37
tion date, including Intangible assets of 23.6 BSEK. Management Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”),
estimated the fair value of the identified intangible assets by applying a reliable estimate can be made of the amount of the provision, and
different discounted cash flow methods, where the multi-period excess underlying significant estimation uncertainties are adequately disclosed
earnings method was applied for customer relationships and relief- relating to this matter. This also is due to the fact that no resolution had
from-royalty method for trade names and technology. The identification been reached regarding the alleged breaches and discussions were still
and fair value determination of the acquired intangible assets required ongoing at year-end. The assessment of management’s assumptions
management to make significant estimates and assumptions related to regarding the related disclosures to the provision are complex and
the calculation of fair value, future cash flows and the selection of the requires a high degree of auditor judgment and an increased extent of
discount rate. audit effort.
We identified the acquired intangible assets as a key audit matter In March 2023 Ericsson reached a resolution with the DOJ regarding
because of the significant estimates and assumptions management the alleged breaches bringing the 2019 DPA to an end.
Our audit procedures related to the assessment of management’s concern basis of accounting is however not applied if the Board of
assumptions regarding the related disclosures for the provision Directors and the Managing Director intends to liquidate the company,
included, but were not limited to the following: to cease operations, or has no realistic alternative but to do so.
– We tested the effectiveness of the Company’s controls over manage- The Audit Committee shall, without prejudice to the Board of
ment’s assessment and review of the assumptions related to the Director’s responsibilities and tasks in general, among other things
recorded provision and the related disclosures. oversee the company’s financial reporting process.
– We tested the provision in order to assess the adequacy of the
related disclosures made around the uncertainties of the provision. The auditor’s responsibility
– We evaluated whether the disclosures made in the financial state- Our objectives are to obtain reasonable assurance about whether the
ments appropriately reflect the facts and key sources of estimation annual accounts and consolidated accounts as a whole are free from
uncertainty. material misstatement, whether due to fraud or error, and to issue an
– We evaluated the assessment of the provisions, associated prob- auditor’s report that includes our opinions. Reasonable assurance is a
abilities, and potential outcomes in accordance with IAS 37 includ- high level of assurance, but is not a guarantee that an audit conducted
ing events subsequent to year-end. in accordance with ISAs and generally accepted auditing standards
– We evaluated management’s position related to the recorded provi- in Sweden will always detect a material misstatement when it exists.
sion by inspecting correspondence and independently validating Misstatements can arise from fraud or error and are considered material
these assumptions with internal and external legal counsel as it if, individually or in the aggregate, they could reasonably be expected
relates to the prior alleged breaches. to influence the economic decisions of users taken on the basis of these
– We evaluated the allegations reporting provided to the Company’s annual accounts and consolidated accounts.
Corporate & Government Investigations team and that these reports As part of an audit in accordance with ISAs, we exercise professional
have been considered when evaluating the completeness of the judgment and maintain professional scepticism throughout the audit.
provision and the related disclosures. We also:
– We obtained an understanding around the procedures performed – Identify and assess the risks of material misstatement of the annual
by the Company’s Anti-Bribery and Corruption team. accounts and consolidated accounts, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and
Other information than the annual accounts and obtain audit evidence that is sufficient and appropriate to provide
consolidated accounts a basis for our opinions. The risk of not detecting a material mis-
This document also contains other information than the annual statement resulting from fraud is higher than for one resulting from
accounts and consolidated accounts and is found on pages 1–13 and error, as fraud may involve collusion, forgery, intentional omissions,
126–140 in the Financial report, 1–13 in the Remuneration report, misrepresentations, or the override of internal control.
1–42 and 44–45 in the Sustainability and corporate responsibility – Obtain an understanding of the company’s internal control relevant
report. The Board of Directors and the Managing Director are responsi- to our audit in order to design audit procedures that are appropriate
ble for this other information. in the circumstances, but not for the purpose of expressing an opin-
Our opinion on the annual accounts and consolidated accounts does ion on the effectiveness of the company’s internal control.
not cover this other information and we do not express any form of – Evaluate the appropriateness of accounting policies used and the
assurance conclusion regarding this other information. reasonableness of accounting estimates and related disclosures
In connection with our audit of the annual accounts and consoli- made by the Board of Directors and the Managing Director.
dated accounts, our responsibility is to read the information identified – Conclude on the appropriateness of the Board of Directors’ and the
above and consider whether the information is materially inconsistent Managing Director’s use of the going concern basis of accounting
with the annual accounts and consolidated accounts. In this procedure in preparing the annual accounts and consolidated accounts. We
we also take into account our knowledge otherwise obtained in the also draw a conclusion, based on the audit evidence obtained,
audit and assess whether the information otherwise appears to be as to whether any material uncertainty exists related to events or
materially misstated. conditions that may cast significant doubt on the company’s and the
If we, based on the work performed concerning this information, group’s ability to continue as a going concern. If we conclude that
conclude that there is a material misstatement of this other information, a material uncertainty exists, we are required to draw attention in
we are required to report that fact. We have nothing to report in this our auditor’s report to the related disclosures in the annual accounts
regard. and consolidated accounts or, if such disclosures are inadequate,
to modify our opinion about the annual accounts and consolidated
Responsibilities of the Board of Directors and the Managing Director accounts. Our conclusions are based on the audit evidence obtained
The Board of Directors and the Managing Director are responsible for up to the date of our auditor’s report. However, future events or
the preparation of the annual accounts and consolidated accounts conditions may cause a company and a group to cease to continue
and that they give a fair presentation in accordance with the Annual as a going concern.
Accounts Act and, concerning the consolidated accounts, in accord- – Evaluate the overall presentation, structure and content of the
ance with IFRS as adopted by the EU. The Board of Directors and the annual accounts and consolidated accounts, including the disclo-
Managing Director are also responsible for such internal control as they sures, and whether the annual accounts and consolidated accounts
determine is necessary to enable the preparation of annual accounts represent the underlying transactions and events in a manner that
and consolidated accounts that are free from material misstatement, achieves fair presentation.
whether due to fraud or error. – Obtain sufficient and appropriate audit evidence regarding the
In preparing the annual accounts and consolidated accounts, The financial information of the entities or business activities within the
Board of Directors and the Managing Director are responsible for the group to express an opinion on the consolidated accounts. We are
assessment of the company’s and the group’s ability to continue as a responsible for the direction, supervision, and performance of the
going concern. They disclose, as applicable, matters related to going group audit. We remain solely responsible for our opinions.
concern and using the going concern basis of accounting. The going
126 Auditor’s report Financial report 2022
We must inform the Board of Directors of, among other matters, the The auditor’s responsibility
planned scope and timing of the audit. We must also inform of signifi- Our objective concerning the audit of the administration, and thereby
cant audit findings during our audit, including any significant deficien- our opinion about discharge from liability, is to obtain audit evidence to
cies in internal control that we identified. assess with a reasonable degree of assurance whether any member of
We must also provide the Board of Directors with a statement that the Board of Directors or the Managing Director in any material respect:
we have complied with relevant ethical requirements regarding inde- – has undertaken any action or been guilty of any omission which can
pendence, and to communicate with them all relationships and other give rise to liability to the company, or
matters that may reasonably be thought to bear on our independence, – in any other way has acted in contravention of the Companies Act,
and where applicable, actions taken to eliminate threats or safeguards the Annual Accounts Act or the Articles of Association.
applied.
From the matters communicated with the Board of Directors, we Our objective concerning the audit of the proposed appropriations of the
determine those matters that were of most significance in the audit of company’s profit or loss, and thereby our opinion about this, is to assess
the annual accounts and consolidated accounts, including the most with reasonable degree of assurance whether the proposal is in accord-
important assessed risks for material misstatement, and are therefore ance with the Companies Act.
the key audit matters. We describe these matters in the auditor’s report Reasonable assurance is a high level of assurance, but is not a guar-
unless law or regulation precludes disclosure about the matter. antee that an audit conducted in accordance with generally accepted
auditing standards in Sweden will always detect actions or omissions
that can give rise to liability to the company, or that the proposed appro-
Report on other legal and regulatory requirements priations of the company’s profit or loss are not in accordance with the
Opinions Companies Act.
In addition to our audit of the annual accounts and consolidated As part of an audit in accordance with generally accepted auditing
accounts, we have also audited the administration of the Board of standards in Sweden, we exercise professional judgment and maintain
Directors and the Managing Director of Telefonaktiebolaget LM Ericsson professional scepticism throughout the audit. The examination of the
(publ) (publ) for the financial year January 1, 2022 – December 31, administration and the proposed appropriations of the company’s
2022 and the proposed appropriations of the company’s profit or loss. profit or loss is based primarily on the audit of the accounts. Additional
We recommend to the general meeting of shareholders that audit procedures performed are based on our professional judgment
the profit to be appropriated in accordance with the proposal in the with starting point in risk and materiality. This means that we focus the
statutory administration report and that the members of the Board of examination on such actions, areas and relationships that are material
Directors and the Managing Director be discharged from liability for the for the operations and where deviations and violations would have
financial year. particular importance for the company’s situation. We examine and test
decisions undertaken, support for decisions, actions taken and other cir-
Basis for Opinions cumstances that are relevant to our opinion concerning discharge from
We conducted the audit in accordance with generally accepted auditing liability. As a basis for our opinion on the Board of Directors’ proposed
standards in Sweden. Our responsibilities under those standards are appropriations of the company’s profit or loss we examined the Board of
further described in the Auditor’s Responsibilities section. We are inde- Directors’ reasoned statement and a selection of supporting evidence in
pendent of the parent company and the group in accordance with pro- order to be able to assess whether the proposal is in accordance with the
fessional ethics for accountants in Sweden and have otherwise fulfilled Companies Act.
our ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
The auditor’s examination of the Esef report
appropriate to provide a basis for our opinions.
Opinion
Responsibilities of the Board of Directors and the Managing Director In addition to our audit of the annual accounts and consolidated
The Board of Directors is responsible for the proposal for appropria- accounts, we have also examined that the Board of Directors and the
tions of the company’s profit or loss. At the proposal of a dividend, this Managing Director have prepared the annual accounts and consolidated
includes an assessment of whether the dividend is justifiable consider- accounts in a format that enables uniform electronic reporting (the Esef
ing the requirements which the company’s and the group’s type of report) pursuant to Chapter 16, Section 4 a of the Swedish Securities
operations, size, and risks place on the size of the parent company’s and Market Act (2007:528) for Telefonaktiebolaget LM Ericsson (publ) for
the group’s equity, consolidation requirements, liquidity, and position in the financial year January 1, 2022 – December 31, 2022.
general. Our examination and our opinion relate only to the statutory
The Board of Directors is responsible for the company’s organization requirements.
and the administration of the company’s affairs. This includes among In our opinion, the Esef report has been prepared in a format that, in
other things continuous assessment of the company’s and the group’s all material respects, enables uniform electronic reporting.
financial situation and ensuring that the company’s organization
is designed so that the accounting, management of assets and the Basis for opinion
company’s financial affairs otherwise are controlled in a reassuring We have performed the examination in accordance with FAR’s recom-
manner. The Managing Director shall manage the ongoing administra- mendation RevR 18 Examination of the Esef report. Our responsibility
tion according to the Board of Directors’ guidelines and instructions under this recommendation is described in more detail in the Auditors’
and among other matters take measures that are necessary to fulfill the responsibility section. We are independent of Telefonaktiebolaget LM
company’s accounting in accordance with law and handle the manage- Ericsson (publ) in accordance with professional ethics for accountants
ment of assets in a reassuring manner.
in Sweden and have otherwise fulfilled our ethical responsibilities in The examination involves obtaining evidence, through various pro-
accordance with these requirements. cedures, that the Esef report has been prepared in a format that enables
We believe that the evidence we have obtained is sufficient and uniform electronic reporting of the annual accounts and consolidated
appropriate to provide a basis for our opinion. accounts. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement in the
Responsibilities of the Board of Directors and the Managing Director report, whether due to fraud or error. In carrying out this risk assess-
The Board of Directors and the Managing Director are responsible for ment, and in order to design audit procedures that are appropriate in
the preparation of the Esef report in accordance with the Chapter 16, the circumstances, the auditor considers those elements of internal
Section 4 a of the Swedish Securities Market Act (2007:528), and for control that are relevant to the preparation of the Esef report by the
such internal control that the Board of Directors and the Managing Board of Directors and the Managing Director, but not for the purpose
Director determine is necessary to prepare the Esef report without of expressing an opinion on the effectiveness of those internal controls.
material misstatements, whether due to fraud or error. The examination also includes an evaluation of the appropriateness
and reasonableness of assumptions made by the Board of Directors and
The auditor’s responsibility the Managing Director.
Our responsibility is to obtain reasonable assurance whether the Esef The procedures mainly include a validation that the Esef report has
report is in all material respects prepared in a format that meets the been prepared in a valid XTHML format and a reconciliation of the Esef
requirements of Chapter 16, Section 4(a) of the Swedish Securities report with the audited annual accounts and consolidated accounts.
Market Act (2007:528), based on the procedures performed. Furthermore, the procedures also include an assessment of whether
RevR 18 requires us to plan and execute procedures to achieve the consolidated statement of financial performance, financial position,
reasonable assurance that the Esef report is prepared in a format that changes in equity, cash flow and disclosures in the Esef report have
meets these requirements. been marked with iXBRL in accordance with what follows from the Esef
Reasonable assurance is a high level of assurance, but it is not a regulation.
guarantee that an engagement carried out according to RevR 18 and
generally accepted auditing standards in Sweden will always detect Deloitte AB, was appointed auditor of Telefonaktiebolaget LM Ericsson
a material misstatement when it exists. Misstatements can arise from (publ) by the general meeting of the shareholders on March 29, 2022,
fraud or error and are considered material if, individually or in aggregate, and has been the company’s auditor since March 31, 2020.
they could reasonably be expected to influence the economic decisions
of users taken on the basis of the Esef report.
The firm applies International Standards on Quality Management 1,
which requires the firm to design implement and operate a system of
quality management, including policies or procedures regarding compli-
ance with ethical requirements, professional standards, and applicable
legal and regulatory requirements.
Stockholm March 7, 2023

Deloitte AB
Thomas Strömberg
Authorized public accountant
128 Forward-looking statements Financial report 2022
Forward-looking statements
This Annual Report includes forward-looking statements, including The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “intend”,
statements reflecting the Company’s current views relating to the “likely”, “projects”, “may”, “could”, “plan”, “estimate”, “forecast”, “will”,
growth of the market, future market conditions, future events, financial “should”, “would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”,
condition, and expected operational and financial performance, includ- “might”, “continue”, or, in each case, their negative or variations, and
ing, in particular the following: similar words or expressions are used to identify forward-looking state-
– Potential material additional costs and liability resulting from ments. Any statement that refers to the Company’s strategy, future
our ongoing future compliance with the terms of the DOJ Plea financial performance, expectations, projections or other characteri-
Agreement with the DOJ and extended monitorship zations of future events or circumstances, including any underlying
– Potential to become a target for public scrutiny as a result of entering assumptions, are forward-looking statements. Such statements are
into the DOJ Plea Agreement with the DOJ, including incorrect mis- based on management’s expectations as of the date of this report,
interpretations of the resolution, complaints to regulatory agencies, unless an earlier date is specified, including expectations based on
negative media publicity and, interference from our competitors, all third-party information and projections that management believes to
of which could damage our reputation and materially and adversely be reputable.
affect our business and prospects We caution investors that these statements are subject to risks
– Risks resulting from entering into the DOJ Plea Agreement including and uncertainties many of which are difficult to predict and generally
potential debarment from government contracting in the United beyond our control that could cause actual results to differ materially
States and elsewhere, reputational risk, as well as potential negative and adversely from those expressed in, or implied or projected by, the
impact on commercial contracts, dealings with financial institutions, forward-looking information and statements. Important factors that
contracts with suppliers, primarily due to counter-party reluctance to could affect whether and to what extent any of our forward-looking
continue business relationships statements materialize include but are not limited to the factors
– Potential material additional liability resulting from past conduct, described throughout this Annual Report, including in the section Risk
including allegations of past conduct in Iraq or other locations that factors. These forward-looking statements also represent our estimates
remains unresolved or unknown and assumptions only as of the date that they were made, and to the
– Risks related to internal control and governance, including the extent they represent third-party data, we have not undertaken to
potential to incur material liability in connection with internal independently verify such third-party data and do not intend to do so.
controls surrounding payments made to third parties in connection Given these risks and uncertainties, readers are cautioned not to place
with historical conduct in Iraq or other locations undue reliance on such forward-looking statements. Readers are urged
– Our goals, strategies, planning assumptions and operational or to carefully review and consider the various disclosures made in this
financial performance expectations Annual Report and in other documents we file from time to time with
– Ongoing geopolitical and trade uncertainty, including challenging our regulators that disclose risks and uncertainties that may affect our
global economic conditions, market trends and pandemics such business. Unless specifically indicated otherwise, the forward-looking
as COVID-19 statements in this Annual Report do not reflect the potential impact of
– Industry trends, future characteristics and development of the any divestitures, mergers, acquisitions, or other business combinations
markets in which we operate that have not been completed as of the date of this report. We expressly
– Our ability to comply with legal and regulatory requirements disclaim a duty to provide updates to these forward-looking statements,
internationally and the estimates and assumptions associated with them, after the
– Our future liquidity, capital resources, capital expenditures, cost date of this Annual Report, to reflect events or changes in circumstances
savings and profitability or changes in expectations or the occurrence of anticipated events,
– The expected demand for our existing and new products and ser- whether as a result of new information, future events or otherwise,
vices as well as plans to launch new products and services including except as required by applicable law or stock exchange regulation. We
research and development expenditures maintain website and external voluntary reports that may be referenced
– The ability to deliver on future plans and to realize potential for in this Annual Report. The information on our website and in our exter-
future growth nal voluntary reports is not incorporated by reference in, or otherwise to
– The expected operational or financial performance of strategic be regarded as part of, this Annual Report. We also report to more than
cooperation activities and joint ventures one regulator, and our regulators have different definitions of what is or
– The time until acquired entities and businesses will be integrated is not or may or may not be “material” for the purposes of our operations,
and accretive to income financial statements and strategy. Given this, we may report certain
– Technology and industry trends including the regulatory and matters to certain regulators and not to others. We may also use defini-
standardization environment in which we operate, competition tions of materiality in our voluntary reporting that are different from the
and our customer structure. definitions we use in our regulatory filings.
Financial report 2022 Five-year summary – Financial information 129
Five-year summary – Financial information

For definitions of certain financial terms used, see Alternative performance measures and Financial terminology.
Five-year summary
2022 Change 2021 2020 2019 2018
Income statement and cash flow items, SEK million
Net sales 271,546 17% 232,314 232,390 227,216 210,838
Operating expenses –83,030 20% –69,071 –66,280 –64,215 –66,848
EBIT 27,020 –15% 31,780 27,808 10,564 1,242
Net income (loss) 19,112 –17% 22,980 17,623 1,840 –6,276
Cash flow from operating activities 30,863 –21% 39,065 28,933 16,873 9,342
Year-end position, SEK million

Total assets 349,537 14% 305,614 271,530 276,383 268,761
Property, plant and equipment 14,236 5% 13,580 13,383 13,850 12,849
Stockholders’ equity 134,814 24% 108,775 86,674 82,559 86,978
Non-controlling interests –1,510 – –1,676 –1,497 –681 792
Per share indicators

Earnings (loss) per share, basic, SEK 5.62 –18% 6.82 5.26 0.67 –1.98
Earnings (loss) per share, diluted, SEK 5.62 –17% 6.81 5.26 0.67 –1.98
Dividends per share, SEK 1) 2.70 8% 2.50 2.00 1.50 1.00
Dividends per share, USD 1) 0.25 9% 0.23 0.16 0.16 0.11
Number of shares outstanding (in millions)
end of period, basic 3,330 0% 3,330 3,328 3,314 3,297
average, basic 3,330 0% 3,329 3,323 3,306 3,291
average, diluted 3,334 0% 3,332 3,326 3,320 3,318
Other information, SEK million

Additions to property, plant and equipment 4,477 22% 3,663 4,493 5,118 3,975
Depreciations and write-downs/impairments of property, plant
and equipment 4,388 13% 3,872 4,114 3,947 3,843
Acquisitions/capitalization/divestments of intangible assets 66,178 – 1,723 11,817 –13,692 2,315
Amortizations and write-downs/impairments of intangible assets 3,638 29% 2,820 2,126 2,593 4,475
Research and development expenses 47,298 12% 42,074 39,714 38,815 38,909
as percentage of net sales 17.4% – 18.1% 17.1% 17.1% 18.5%
Inventory turnover days 93 6% 88 78 77 70
Alternative Performance Measures (APMs) 2)

Sales growth adjusted for comparable units and currency 3% – 4% 5% 4% 1%
Gross margin 41.7% – 43.4% 40.3% 37.3% 32.3%
Gross margin excluding restructuring charges 41.8% – 43.5% 40.6% 37.5% 35.2%
EBIT margin 10.0% – 13.7% 12.0% 4.6% 0.6%
EBIT margin excluding restructuring charges 10.1% – 13.9% 12.5% 5.0% 4.4%
EBITA margin 10.7% – 14.3% 12.5% 5.1% 1.4%
EBITA margin excluding restructuring charges 10.9% – 14.6% 13.1% 5.5% 5.2%
Restructuring charges, SEK million 399 –27% 549 1,306 798 8,015
Free cash flow before M&A, SEK million 22,196 –31% 32,056 22,261 7,633 4,253
Free cash flow after M&A, SEK million –29,492 – 32,115 12,663 6,128 2,968
Capital employed, SEK million 202,899 10% 184,283 161,990 165,273 149,615
Return on equity 15.4% – 23.2% 20.7% 2.6% –7.1%
Return on capital employed 14.0% – 18.4% 17.0% 6.7% 0.8%
Equity ratio 38.1% – 35.0% 31.4% 29.6% 32.7%
Capital turnover 1.4 8% 1.3 1.4 1.4 1.4
Adjusted working capital, SEK million 36,653 –39% 59,667 45,613 48,821 52,508
Gross cash, SEK million 56,249 –42% 97,608 72,045 72,192 68,996
Net cash, SEK million 23,319 –65% 65,777 41,885 34,496 35,871
Adjusted earnings per share, SEK 6.16 –15% 7.26 5.83 1.07 0.27
Statistical data, year-end

Number of employees 105,529 4% 101,322 100,824 99,417 95,359
of which in Sweden 14,481 2% 14,183 13,173 12,730 12,502
Export sales from Sweden, SEK million 153,833 9% 140,898 132,269 120,822 109,969
1) For 2022, as proposed by the Board of Directors.
2) A reconciliation to the most directly reconcilable line items in the financial statements for 2022 and four comparison years is available on pages 131–135.
130 Five-year summary – Non-financial information Financial report 2022
Five-year summary – Non-financial information

For additional information and definitions, see the Consolidated sustainability notes, found on pages 10–42 of the Sustainability and Corporate
Responsibility report 1).
Five-year summary 2)
2022 Change 2021 2020 2019 2018
Employees
Employee headcount at year-end 105,529 4% 101,322 100,824 99,417 95,359
Average number of employees 101,741 1% 100,757 98,589 94,503 97,843
Employees who have left the Company 14,381 24% 11,631 7,839 11,078 16,630
Employees who have joined the Company 17,235 42% 12,129 9,246 15,136 11,254
Employees by age group
Under 25 4% – 3% 3% 3% 3%
25–35 30% – 31% 33% 35% 36%
36–45 34% – 34% 34% 32% 32%
46–55 23% – 23% 22% 22% 22%
Over 55 10% – 9% 8% 8% 7%
Share of women
All employees 26% – 25% 25% 25% 23%
Line managers 22% – 21% 21% 20% 20%
Executive population 35% – 36% 32% 32% 31%
Executive Team 19% – 20% 20% 20% 27%
Board of Directors 36% – 23% 23% 23% 23%
Occupational health and safety
Fatalities – Employees 0 –100% 1 0 0 0
Fatalities – Suppliers, subcontractors and third parties 8 –38% 13 7 11 14
Lost workday incidents – Employees 96 25% 77 90 180 143
Lost workday incident – Suppliers, subcontractors and third parties 35 –49% 68 53 87 61
Facility energy consumption
Total energy consumption (GWh) 693 10% 631 628 664 716
Share of renewable energy 67% – 62% 62% 50% 47%
Energy intensity (GWh/net sales SEK billion) 2.6 –4% 2.7 2.7 2.9 3.4
Waste, product take-back and water
Waste generated at facilities (metric tons) 8,130 20% 6,777 6,916 11,013 10,217
of which recycled 47% – 67% 49% 44% 34%
Product take-back (metric tons)3) 4,825 –10% 5,389 6,079 – –
of which recycled or re-used 97% – 96% 95% – –
Total water consumption (Mm3) 1.1 –8% 1.2 1.5 1.5 1.6
Green House Gas Emissions (kiloton CO2e)
Direct emissions – Scope 1 38 0% 38 40 49 54
Indirect emissions – Scope 2 (market based) 45 –22% 58 74 124 134
Other indirect emissions – Scope 3 3) 4) 27,609 –1% 28,024 29,923 – –
Emissions intensity (kiloton CO2e / net sales SEK million)
Scope 1 0.14 –13% 0.16 0.17 0.22 0.26
Scope 2 (market based) 0.17 –32% 0.25 0.32 0.55 0.64
1) The Sustainability and Corporate Responsibility report is not to be considered incorporated by reference due to being referenced here.
2) Ericsson continously develops its methodologies for measuring and reporting environment, social and governance (ESG) performance data. As methodologies evolve it is not always possible to re-calculate
performance data for previous periods. Where this is the case this is indicated with a “-” in the table above.
3) Scope and/or measurement methodologies have been updated in 2022 wherefore data for previous periods have been restated. See note O3 in the Sustainability and Corporate Responsibility Report for more
information.
4 ) See note E2 in the Sustainability and Corporate Responsibility report for more information on the Scope 3 categories included and Ericsson’s GHG accounting methodologies.
Financial report 2022 Alternative performance measures 131
Alternative performance measures

In this section, the Company presents its Alternative Performance Management uses these APMs to, among other things, evaluate
Measures (APMs), which are not recognized measures of financial ongoing operations in relation to historical results, for internal planning
performance under IFRS. This section includes a reconciliation of the and forecasting purposes and in the calculation of c ertain performance-
APM’s to the most directly reconcilable line items in the financial state- based compensation. APM’s should not be viewed as substitutes for
ments. The presentation of APMs has limitations as analytical tools income statement or cash flow items computed in accordance with IFRS.
and should not be considered in i solation or as a substitute for related The APMs presented in this report may differ from similarly titled
financial measures p repared in accordance with IFRS. measures used by other companies.
APMs are presented to enhance an investor’s evaluation of ongoing
operating results, to aid in forecasting future periods and to facilitate
meaningful comparison of results between periods.
Adjusted earnings per share

SEK 2022 2021 2020 2019 2018
Earnings (loss) per share, diluted 5.62 6.81 5.26 0.67 –1.98
Restructuring charges 0.09 0.13 0.30 0.18 1.88
Amortizations and write-downs of acquired i ntangibles 0.45 0.32 0.27 0.22 0.37
Adjusted earnings per share 6.16 7.26 5.83 1.07 0.27
Definition Reason to use

Earnings (loss) per share (EPS), diluted, excluding Restructuring charges vary between years. This measurement gives an indication of the performance without
amortizations and write-downs of acquired intangible restructuring and without the impact of amortizations and write-downs of acquired intangible assets from
assets and excluding restructuring charges. acquired companies.
Adjusted working capital

SEK million 2022 2021 2020 2019 2018
Current assets 173,803 174,805 149,795 153,914 161,167
Current non-interest-bearing provisions and liabilities
Provisions, current –7,629 –5,782 –7,580 –8,244 –10,537
Contract liabilities –42,251 –32,834 –26,440 –29,041 –29,348
Trade payables –38,437 –35,684 –31,988 –30,403 –29,883
Current tax liabilities 1) –2,640 –2,917 –4,486 – –
Other current liabilities 1) –46,193 –37,921 –33,688 –37,405 –38,891
Adjusted working capital 36,653 59,667 45,613 48,821 52,508
1) As from 2021 current tax liabilities is presented as a separate line item in the balance sheet and the comparison year 2020 has been updated accordingly. For 2018– 2019 the current tax liabilities is included in
other current liabilities.

Current assets less current non-interest-bearing provisions Due to the need to optimize cash generation to c reate value for Ericsson’s shareholders, management focuses on
and liabilities (which include: current provisions, contract working capital and reducing lead times between orders booked and cash received.
liabilities, trade payables, current tax liabilities and other
current liabilities).
132 Alternative performance measures Financial report 2022
Capital employed
SEK million 2022 2021 2020 2019 2018
Total assets 349,537 305,614 271,530 276,383 268,761
Non-interest-bearing provisions and liabilities
Provisions, non-current 3,959 3,722 2,886 2,679 5,471
Deferred tax liabilities 4,784 884 1,089 1,224 670
Other non-current liabilities 745 1,587 1,383 2,114 4,346
Provisions, current 7,629 5,782 7,580 8,244 10,537
Contract liabilities 42,251 32,834 26,440 29,041 29,348
Trade payables 38,437 35,684 31,988 30,403 29,883
Current tax liabilities 1) 2,640 2,917 4,486 – –
Other current liabilities 1) 46,193 37,921 33,688 37,405 38,891
Capital employed 202,899 184,283 161,990 165,273 149,615
1) As from 2021 current tax liabilities is presented as a separate line item in the balance sheet and the comparison year 2020 has been updated accordingly. For 2018–2019 the current tax liabilities is included in
other current liabilities.

Total assets less non-interest-bearing provisions Capital employed represents the value of the balance sheet assets that contributes to revenue and profit generation.
and liabilities (which includes non-current provisions, It is also used in the calculation of return on capital employed.
deferred tax liabilities, contract liabilities, other non-current
liabilities, current provisions, trade payables, current tax
liabilities and other current liabilities).
Capital turnover
SEK million 2022 2021 2020 2019 2018
Net sales 271,546 232,314 232,390 227,216 210,838
Average capital employed
Capital employed at beginning of period 184,283 161,990 165,273 149,615 155,625
Capital employed at end of period 202,899 184,283 161,990 165,273 149,615
Average capital employed 193,591 173,137 163,632 157,444 152,620
Capital turnover (times) 1.4 1.3 1.4 1.4 1.4

Net sales divided by average capital employed (based on Capital turnover indicates how effectively investment capital is used to generate revenues.
the amounts at January 1 and December 31).
EBIT and EBIT margin / EBIT and EBIT margin excluding restructuring charges
SEK million 2022 2021 2020 2019 2018
EBIT 27,020 31,780 27,808 10,564 1,242
Net sales 271,546 232,314 232,390 227,216 210,838
EBIT margin (%) 10.0% 13.7% 12.0% 4.6% 0.6%
Restructuring charges 399 549 1,306 798 8,015
EBIT excluding restructuring charges 27,419 32,329 29,114 11,362 9,257
EBIT margin excluding restructuring charges (%) 10.1% 13.9% 12.5% 5.0% 4.4%

Earnings before financial items and income tax. EBIT margin shows the EBIT in percentage of net sales. EBIT margin is a key internal measure as the Company
EBIT as a percentage of net sales. believes that it provides users of the financial statements with a better understanding of the Group’s financial
Earnings before financial items and income tax excluding performance both short and long term. The Company’s view is that EBIT margin excluding restructuring charges gives
restructuring charges. a fair view of the profitability of the ongoing business.
EBIT excluding restructuring charges as a percentage of
net sales.
To ensure comparability to the 2022 Group target for EBIT margin excluding restructuring charges, set in 2018, the result for 2022 has been adjusted for the result from the acquired
company Vonage as well as for the following items: SEK −2.3 billion due to a provision in relation to a potential DPA breach resolution with the United States Department of Justice
(including estimated expenses for the previously announced extended monitorship), noting that the Company, on March 2, 2023, entered into the DOJ Plea Agreement with the DOJ
and agreed to pay a fine of approx. SEK 2.2 billion, charges of SEK −1.0 billion related to the divestment of IoT and other portfolio adjustments, SEK −0.9 billion related to market exits
including Russia, and SEK −0.8 billion related to exit of subscale agreements and product offerings in Cloud Software and Services, as well as acquisition related costs of SEK −0.4 billion
related to Vonage.
EBITA and EBITA margin / EBITA and EBITA margin excluding restructuring charges
SEK million 2022 2021 2020 2019 2018
Net income (loss) 19,112 22,980 17,623 1,840 –6,276
Income tax 5,497 6,270 9,589 6,922 4,813
Financial income and expenses, net 2,411 2,530 596 1,802 2,705
Amortizations and write-downs of acquired i ntangible assets 2,051 1,477 1,220 1,038 1,662
EBITA 29,071 33,257 29,028 11,602 2,904
Net sales 271,546 232,314 232,390 227,216 210,838
EBITA margin (%) 10.7% 14.3% 12.5% 5.1% 1.4%
Restructuring charges 399 549 1,306 798 8,015
EBITA excluding restructuring charges 29,470 33,806 30,334 12,400 10,919
EBITA margin excluding restructuring charges (%) 10.9% 14.6% 13.1% 5.5% 5.2%

Earnings (loss) before interest, taxes, amortizations and write-downs Amortizations and write-downs of intangible assets are normally non-cash items in the annual income
of acquired intangible assets. statement, EBITA margin % gives an indication of the financial performance without the impact from
Earnings (loss) before interest, taxes, amortizations and write-downs acquired companies. The Company’s view is that EBITA margin excluding restructuring charges gives a fair
of acquired intangible assets, as a percentage of net sales. view of the profitability of the ongoing business.
EBITA excluding restructuring charges.
EBITA excluding restructuring charges as a percentage of net sales.
Additionally, Ericsson provides forward-looking targets for EBITA margin excluding restructuring charges and free cash flow before M&A, which are non-IFRS financial measures. Ericsson
has not provided quantitative reconciliation of these targets to the most directly comparable IFRS measures because certain information needed to reconcile these non-IFRS financial
measures to the most comparable IFRS financial measures are dependent on specific items or impacts that are not yet determined, are subject to incarcerating and variability in timing
and amount due to their nature, are outside of Ericsson’s control or cannot be predicted, including items and impacts such as currency exchange rate changes, acquisitions and disposals,
and charges such as impairments or acquisition related charges. Accordingly, reconciliation of these non-IFRS forward-looking financial measures to the most directly comparable IFRS
financial measures are not available without unreasonable efforts. Such unavailable reconciling items could significantly impact our results of operations and financial condition.
Equity ratio
SEK million 2022 2021 2020 2019 2018
Total equity 133,304 107,099 85,177 81,878 87,770
Total assets 349,537 305,614 271,530 276,383 268,761
Equity ratio (%) 38.1% 35.0% 31.4% 29.6% 32.7%

Equity expressed as a percentage of total assets. This supports financial flexibility and independence to operate and manage variations in working capital
needs as well as to c apitalize on business opportunities.
Free cash flow before M&A / Free cash flow after M&A
SEK million 2022 2021 2020 2019 2018
Cash flow from operating activities 30,863 39.065 28,933 16,873 9,342
Net capital expenditures and other investments (excluding M&A)
Investments in property, plant and equipment –4,477 –3,663 –4,493 –5,118 –3,975
Sales of property, plant and equipment 249 115 254 744 334
Product development –1,720 –962 –817 –1,545 –925
Other investments 1) –126 –131 801 –331 –523
Repayment of lease liabilities –2,593 –2,368 –2,417 –2,990 –
Free cash flow before M&A 22,196 32,056 22,261 7,633 4,253
Acquisitions of subsidiaries and other operations –51,995 –389 –9,657 –1,753 –1,618
Divestments of subsidiaries and other operations 307 448 59 248 333
Free cash flow after M&A –29,492 32,115 12,663 6,128 2,968
Net sales 271,546 232,314 232,390 227,216 210,838
Free cash flow before M&A as percentage of net sales (%) 8.2% 13.8% 9.6% 3.4% 2.0%
1) Other investments is part of the line item Other investing activities in the Consolidated cash flow statement. The difference is movements in other interest-bearing assets which is not part of the definition of Free
cash flow.

Free cash flow before M&A: Cash flow from operating activities less Free cash flow before M&A represents the cash that the Company generates after capital expenditures, other
net capital expenditures, other investments and repayment of lease investments and repayment of lease liabilities. The Company believes that free cash flow before M&A is a
liabilities (excluding M&A). good way of reflecting the cash flows generated by the Company that can be used to expand the business,
Free cash flow after M&A: Cash flow from operating activities less invest in subsidiaries, pay dividends and reduce debt.
net capital expenditures, other investments and repayment of lease Free cash flow after M&A represents the cash that the Company generates after capital expenditures,
liabilities. other investments, repayment of lease liabilities and acquisitions/divestments of subsidiaries. The Company
Free cash flow before M&A as a percentage of net sales. believes that free cash flow after M&A is a good way of reflecting the cash flows generated by the Company
that can be used to expand the business, pay dividends and reduce debt.
134 Alternative performance measures Financial report 2022
Gross cash
SEK million 2022 2021 2020 2019 2018
Cash and cash equivalents 38,349 54,050 43,612 45,079 38,389
Interest-bearing securities, current 8,736 12,932 6,820 6,759 6,625
Interest-bearing securities, non-current 9,164 30,626 21,613 20,354 23,982
Gross cash 56,249 97,608 72,045 72,192 68,996

Cash and cash equivalents plus interest-bearing securities Gross cash is showing total available cash and i nterest-bearing securities and is a parameter for calculating
(current and non-current). the net cash position.
Gross margin and Gross margin excluding restructuring charges

SEK million 2022 2021 2020 2019 2018
Gross income 113,295 100,749 93,724 84,824 68,200
Net sales 271,546 232,314 232,390 227,216 210,838
Gross margin (%) 41.7% 43.4% 40.3% 37.3% 32.3%
Restructuring charges included in cost of sales 195 273 725 337 5,938
Gross income excluding restructuring charges 113,490 101,022 94,449 85,161 74,138
Gross margin excluding restructuring charges (%) 41.8% 43.5% 40.6% 37.5% 35.2%

Gross income as a percentage of net sales. Gross margin shows the difference between net sales and cost of sales, in percentage of net sales. Gross margin is
Gross income excluding restructuring charges as a impacted by several factors such as business mix, service share, price development and cost reductions. Gross margin
percentage of net sales. is an important internal measure and this number is also provided in the income statement as the Company believes
that it provides users of the financial statements with a better understanding of the Group’s business d
evelopment.
The Company’s view is that gross margin excluding restructuring charges gives a fair view of the profitability of the
ongoing business.
Net cash
SEK million 2022 2021 2020 2019 2018
Cash and cash equivalents 38,349 54,050 43,612 45,079 38,389
+ Interest-bearing securities, current 8,736 12,932 6,820 6,759 6,625
+ Interest-bearing securities, non-current 9,164 30,626 21,613 20,354 23,982
– Borrowings, current 5,984 9,590 7,942 9,439 2,255
– Borrowings, non-current 26,946 22,241 22,218 28,257 30,870
Net cash 23,319 65,777 41,885 34,496 35,871

Cash and cash equivalents plus interest-bearing securities A positive net cash position is one of the company’s capital targets.
(current and non-current) less borrowings (current and non- This creates financial flexibility and independence to operate and manage variations in working capital needs.
current).
Operating expenses, excluding restructuring charges

SEK million 2022 2021 2020 2019 2018
Operating expenses –83,030 –69,071 –66,280 –64,215 –66,848
Restructuring charges included in R&D expenses 54 137 411 344 1,293
Restructuring charges included in selling and administrative expenses 150 139 170 117 784
Operating expenses, excluding restructuring charges –82,826 –68,795 –65,699 –63,754 –64,771

Operating expenses, excluding restructuring charges. Restructuring charges vary between years and in order to analyse trends in reported expenses overtime,
restructuring charges are excluded.
Return on capital employed

SEK million 2022 2021 2020 2019 2018
EBIT 27,020 31,780 27,808 10,564 1,242
Average capital employed
Capital employed at beginning of period 184,283 161,990 165,273 149,615 155,625
Capital employed at end of period 202,899 184,283 161,990 165,273 149,615
Average capital employed 193,591 173,137 163,632 157,444 152,620
Return on capital employed (%) 14.0% 18.4% 17.0% 6.7% 0.8%

EBIT as a percentage of average capital employed (based Return on capital employed is a measure of the profitability after taking into account the amount of capital used.
on the amounts at January 1 and December 31). A higher return on capital employed indicates a more efficient use of capital.
Return on equity
SEK million 2022 2021 2020 2019 2018
Net income (loss) attributable to owners
of the Parent Company 18,724 22,694 17,483 2,223 –6,530
Average stockholders’ equity
Stockholders’ equity, beginning of period 1) 108,775 86,674 82,559 86,729 95,952
Stockholders’ equity, end of period 134,814 108,775 86,674 82,559 86,978
Average stockholders’ equity 121,795 97,725 84,617 84,644 91,465
Return on equity (%) 15.4% 23.2% 20.7% 2.6% –7.1%
1) For 2019, adjusted opening balance due to implementation of IFRS 16 “Leases,” and for 2018, adjusted opening balance due to implementation of IFRS 9 “Financial instruments.”

Net income (loss) attributable to owners of the P
arent Return on equity is a measure of the profitability in relation to the book value of shareholder equity. Return on equity is
Company as a percentage of average s tockholders’ equity a measure of how investments are used to generate earnings growth.
(based on the amounts at January 1 and December 31).
Sales growth adjusted for comparable units and currency

SEK million 2022 2021 2020 2019 2018
Net sales 271,546 232,314 232,390 227,216 210,838
Acquired/divested business –7,015 –1,201 –1,362 –96 –
Net FX impact –25,968 11,607 7,796 –10,675 –4,232
Comparable net sales, excluding FX impact 238,563 242,720 238,824 216,445 206,606
Comparable net sales adjusted for acquired/divested business 232,314 232,390 227,132 208,130 –
Sales growth adjusted for comparable units and currency (%) 3% 4% 5% 4% 1%

Sales growth adjusted for the impact of acquisitions and Ericsson’s presentation currency is SEK while the total revenues are mainly in other currencies. Reported sales growth
divestments as well as the effects of foreign c urrency is dependent on fluctuations in SEK versus other currencies and in addition acquired or divested business can have an
fluctuations. Also named organic sales. impact on reported net sales. Sales growth adjusted for comparable units and currency shows the underlying sales
development without these parameters.
136 The Ericsson share Financial report 2022
The Ericsson share

Share trading The Ericsson share
The Telefonaktiebolaget LM Ericsson (the Parent Company) Class A and Class B shares Share/ADS listings
(Ericsson shares) are listed on Nasdaq Stockholm. In the United States, the Class B shares Nasdaq Stockholm
are listed on Nasdaq New York in the form of American Depositary Shares (ADS) evidenced Nasdaq New York
by American Depositary Receipts (ADR) under the symbol ERIC. Each ADS represents one
Class B share.
In 2022, approximately 2.0 (1.8) billion Class B shares were traded on Nasdaq Stockholm
Share data
and approximately 2.3 (1.6) billion ADS were traded in the United States (incl. Nasdaq New
York). A total of 4.4 (3.5) billion Ericsson Class B shares were thus traded on the exchanges in Total number of shares in issue 3,334,151,735
Stockholm and in the United States. According to Nasdaq, trading volume in Ericsson shares of which Class A shares,
each carrying one vote 1) 261,755,983
increased by approximately 11% on Nasdaq Stockholm and increased by approximately
of which Class B shares, each carrying
43% in the United States when compared to 2021. one tenth of one vote 1) 3,072,395,752
With the implementation of the Mifid directive
Ericsson treasury shares, Class B 4,009,306
Share trading on different in the EU, share trading became heavily fragmen
Quotient value SEK 5.00
market places (class B shares) ted across a large number of venues and trading
Market capitalization, December 31, 2022 SEK 204 billion
categories. Trading on MTFs (multilateral trading
Shares, millions ICB (Industry Classification Benchmark) 9,500
facilities) and other venues gained market shares
8,000 from stock exchanges such as Nasdaq Stockholm.
1) Both classes of shares have the same rights of participation
in the net assets and earnings.
7,000 In the last few years however, following a series
of merger and acquisitions among trading venues,
6,000
trading has become more concentrated.
5,000 Ticker codes
Total trading in Ericsson B shares on all venues
4,000 combined has increased over the past five years Nasdaq Stockholm ERIC A/ERIC B
from 6.4 billion shares in 2018 to 7.3 billion shares Nasdaq New York ERIC
3,000
in 2022. Over the same period, trading of Ericsson Bloomberg Nasdaq Stockholm ERICA SS/ERICB SS
2,000 Bloomberg Nasdaq ERIC US
ADS in the US has increased from 1.4 billion
1,000 shares in 2018 to 2.3 billion shares in 2022. Reuters Nasdaq Stockholm ERICa.ST/ERICb.ST
0 Reuters Nasdaq ERIC.O
2018 2019 2020 2021 2022
Cboe Global Markets London

Stockholm Other
Changes in number of shares and capital stock 2018–2022

Number of shares Share capital (SEK)
2018 December 31 3,334,151,735 16,670,758,678
2019 December 31 3,334,151,735 16,670,758,678
2020 December 31 3,334,151,735 16,670,758,678
2021 December 31 3,334,151,735 16,670,758,678
2022 December 31 3,334,151,735 16,670,758,678
Share performance indicators

2022 2021 2020 2019 2018
Earnings (loss) per share, diluted (SEK) 1) 5.62 6.81 5.26 0.67 –1.98
Adjusted earnings per share (SEK) 2) 6.16 7.26 5.83 1.07 0.27
Dividend per share (SEK) 3) 2.70 2.50 2.00 1.50 1.00
Total shareholder return (%) –36 4 22 6 47
P/E ratio 11 15 19 122 n/a
1) Calculated on average number of shares outstanding, diluted.
2) EPS, diluted, excluding amortizations and write-downs of acquired intangible assets, and excluding restructuring charges, SEK.
A reconcilation of Alternative performance measures is available on pages 131–135.
3) For 2022 as proposed by the Board of Directors.
For definitions of the financial terms used including a description of alternative performance measure, see Glossary and Financial Terminology.
Financial report 2022 The Ericsson share 137
Share and ADS prices Share prices on Nasdaq Stockholm

Principal trading market – Nasdaq Stockholm – share prices (SEK) 2022 2021 2020 2019 2018
The tables state the high and low share prices for the Class A and Class B Class A at last day of trading 66.00 100.20 105.40 85.40 77.40
shares as reported by Nasdaq Stockholm for the periods indicated. Trading on Class A high
(Feb 11, 2022) 118.40 128.80 119.00 96.80 85.20
the exchange generally continues until 5:30 p.m. (CET) each business day. In
addition to trading on the exchange, there is trading off the exchange and on Class A low
(Nov 3, 2022) 63.50 91.90 64.10 74.70 49.05
alternative venues during trading hours and also after 5:30 p.m. (CET).
Class B at last day of trading 60.90 99.79 99.98 81.56 77.92
Nasdaq Stockholm publishes a daily Official Price List of Shares which
Class B high
includes the volume of recorded transactions in each listed stock, together with (Feb 11, 2022) 117.32 121.80 110.15 96.74 85.66
the prices of the highest and l owest recorded trades of the day. The Official Class B low
Price List of Shares reflects price and volume information for trades completed (Nov 24, 2022) 58.81 91.00 59.54 74.02 49.04
by the members.
Source: Nasdaq Stockholm
Host market – Nasdaq New York – ADS prices

The tables state the high and low share prices quoted for the ADSs on
Nasdaq New York for the periods indicated. The N asdaq New York q uotations Share prices on Nasdaq New York
represent prices between dealers, not including retail markups, markdowns or (USD) 2022 2021 2020 2019 2018
commissions, and do not necessarily represent actual t ransactions. ADS at last day of trading 5.84 10.87 11.95 8.78 8.88
ADS high (Jan 22, 2022) 12.78 15.32 12.20 10.46 9.45
ADS low (Oct 20, 2022) 5.16 9.93 6.15 7.58 6.00
Source: Nasdaq New York
Share prices on Nasdaq Stockholm and Nasdaq New York

Nasdaq Stockholm Nasdaq New York
SEK per Class A share SEK per Class B share USD per ADS 1)
Period High Low High Low High Low
Annual high and low
2018 85.20 49.05 85.66 49.04 9.45 6.00
2019 96.80 74.70 96.74 74.02 10.45 7.58
2020 119.00 64.10 110.15 59.54 12.61 6.15
2021 128.80 91.90 121.80 91.00 15.32 9.93
2022 118.40 63.50 117.32 58.81 12.78 5.16
Quarterly high and low

2021 First Quarter 128.80 105.40 118.05 96.90 15.32 11.55
2021 Second Quarter 122.60 104.40 121.80 104.90 14.39 12.40
2021 Third Quarter 116.00 95.40 116.16 95.58 13.40 10.88
2021 Fourth Quarter 107.00 91.90 107.04 91.00 12.24 9.93
2022 First Quarter 118.40 78.50 117.32 72.56 12.78 5.16
2022 Second Quarter 97.00 76.00 94.77 72.60 9.80 7.26
2022 Third Quarter 88.30 66.30 81.32 64.12 7.81 5.65
2022 Fourth Quarter 77.00 63.50 73.56 58.81 6.82 5.16
Monthly high and low

August 2022 85.30 80.40 81.32 76.15 7.81 7.12
September 2022 83.50 66.30 80.46 64.12 7.53 5.65
October 2022 77.00 63.70 73.54 58.81 6.54 5.16
November 2022 72.50 63.50 67.55 59.51 6.55 5.32
December 2022 76.00 65.00 70.67 59.62 6.82 5.67
January 2023 73.00 63.00 68.50 56.48 6.43 5.50
1) One ADS = 1 Class B share. Source: Nasdaq Stockholm and Nasdaq New York.
138 The Ericsson share Financial report 2022
Shareholders Geographical ownership breakdown of share capital including

As of December 31, 2022, the Parent Company had 425,636 shareholders retail shareholders and treasury shares
Percent of capital
registered at Euroclear Sweden AB (the Central Securities Depository – CSD),
of which 747 holders had a US address. According to information provided
by the Company’s depositary bank, Deutsche Bank, there were 315,301,878 2022 2021
ADSs outstanding as of December 31, 2022, and 2,884 registered holders of Sweden 40.53% 39.83%
such ADSs. A significant number of Ericsson ADSs are held by banks, brokers United States 26.96% 26.67%
and/or nominees for the accounts of their customers. As of January 18, 2023, United Kingdom 9.21% 6.47%
the total number of bank, broker and/or nominee accounts holding Ericsson Norway 4.68% 4.10%
ADSs was 181,994. Denmark 1.55% 1.90%
According to information known at year-end 2022, approximately 86% of Other countries 17.07% 21.03%
the Class A and Class B shares were owned by institutions, Swedish and inter- Source: Nasdaq
national. The major shareholders do not have different voting rights than other
shareholders holding the same classes of shares. As far as Ericsson knows, the
Ownership breakdown by type of owner
Company is not directly or indirectly owned or controlled by another corpora- Percentage of voting rights
tion, by any foreign government or by any other natural or legal person(s)
separately or jointly.
2022 2021
The table below shows the total number of shares in the Parent C ompany
Swedish institutions 58.07% 58.66%
owned by the Executive Team and Board members (including Deputy
Of which:
employee representatives) as a group as of December 31, 2022.
– Investor AB 23.79% 23.79%
– AB Industrivärden 15.14% 15,45%
The Executive Team and Board members, ownership – AMF Tjänstepension and 4.87% 4.36%
AMF Fonder
Number of Number of Voting rights, Foreign institutions 28.28% 28.23%
Class A shares Class B shares percent
Swedish retail investors 5.41% 5.02%
The Executive Team and
Board members as a group Other 8.24% 8.09%
(33 persons) 1,708 2,963,353 0.05% Source: Nasdaq
For individual holdings, see Corporate Governance report.
Number of shares 1)
No. of No. of No. of Percentage Percentage Market value
Holding shareholders A shares B shares of share capital of voting rights (MSEK)
1 - 500 338,026 1,471,646 42,378,039 1.32% 1.00% 2,677,951
501 - 1,000 39,076 972,986 28,689,593 0.89% 0.68% 1,811,413
1,001 - 5,000 39,572 2,862,155 83,603,065 2.59% 1.97% 5,280,329
5,001 - 10,000 5,108 1,067,025 35,605,102 1.10% 0.81% 2,238,774
10,001 - 15,000 1,407 428,979 16,962,784 0.52% 0.37% 1,061,346
15,001 - 20,000 661 314,370 11,532,196 0.36% 0.26% 723,059
20,001 - 1,785 254,638,822 2,853,004,496 93.21% 94.89% 190,554,136
Total, December 31, 2022 2) 425,636 261,755,983 3,072,395,752 100.00% 100.00% 204,384,796
1) Source: Euroclear.
2) Includes a nominee reporting discrepancy of 620,477 shares.
The following table shows share information as of December 31, 2022 with respect to the 15 largest shareholders ranked by voting rights as well as their
percentage of voting rights as of December 31, 2022, 2021 and 2020.
Largest shareholders December 31, 2022 and percentage of voting rights December 31, 2022, 2021 and 2020
Of total Class Of total Class Of total Class 2022 2021 2020
Number of A shares Number of B shares A+B shares Voting rights Voting rights Voting rights
Identity of person or group 1) Class A shares percent Class B shares percent percent percent percent percent
Investor AB 120,762,803 46.14 145,982,932 4.75 8.00 23.79 23.79 22.81
AB Industrivärden 86,052 615 32.88 1,000,000 0.03 2.61 15.14 15.14 15.14
AMF Tjänstepension and AMF Fonder 20,650,000 7.89 70,713,302 2.30 2.74 4.87 4.36 2.56
Cevian Capital 339,228 0.13 151,386,082 4.93 4.55 2.72 2.72 3.25
BlackRock Institutional Trust Company, N.A. 522 0.00 137,111,236 4.46 4.11 2.41 2.41 2.35
Fidelity International 0 0.00 122,905,644 4.00 3.69 2.16 2.24 2.31
AFA Försäkring AB 11,484,600 4.39 7,180,817 0.23 0.56 2.14 2.05 1.99
Swedbank Robur Fonder AB 8,277 0.00 111,928,200 3.64 3.36 1.97 1.86 2.18
The Vanguard Group, Inc. 1,161,057 0.44 94,519,989 3.08 2.87 1.87 1.56 1.42
PRIMECAP Management Company 0 0.00 82,414,721 2.68 2.47 1.45 1.20 1.17
Norges Bank Investment Management (NBIM) 1 0.00 70,964,273 2.31 2.13 1.25 1.05 0.79
Livförsäkringsbolaget Skandia, ömsesidigt 4,240,604 1.62 25,530,500 0.83 0.89 1.19 1.02 0.44
Tredje AP Fonden 4 250,736 1.62 18,765,383 0.61 0.69 1.08 0.95 0.97
Handelsbanken Asset Management 16,581 0.01 60,074,265 1.96 1.80 1.06 0.93 0.89
State Street Global Advisors (US) 1,583 0.00 54,001,003 1.76 1.62 0.95 0.89 1.03
Others 12,787,376 4.89 1,917,917,405 62.42 57.91 35.95 37.83 40.71
Total 261,755,983 100 3,072,395,752 100 100 100 100 100
1) Source: Nasdaq
Financial report 2022 The Ericsson share 139
Share trend
In 2022, Ericsson’s total market capitalization decreased by 39.0% to SEK 204 billion, from SEK 333 bil-
lion in 2021 (which represented an increase by 2.2% against 2020). In 2022, the index, OMX Stockholm,
on Nasdaq Stockholm decreased by 15.6%, the Nasdaq composite index decreased by 33.0% and the
S&P 500 Index decreased by 19.4%.
Share turnover and price trend, Nasdaq Stockholm Earnings (loss) per share, diluted
Class A shares, SEK 000’s share traded
SEK
monthly
8 7.26
150 26,000 7 6.81
6.16
// 6 5.83 5.62
5.26
125 5,000 5
4
100 4,000 3
2
1.07
75 3,000 1 0.67
0.27
0
50 2,000 −1
−2 −1.98
25 1,000 −3
2018 2019 2020 2021 2022
0 0 Earnings (loss) per share, diluted

2018 2019 2020 2021 2022
Adjusted earnings per share 1)
1) EPS, diluted, excl. restructuring charges,
amortizations and write-downs of acquired
Class B shares, SEK 000’s share traded intangible assets, SEK. A reconciliation
monthly of Alternative performance measures is
available on pages 131–135.
150 600,000
125 500,000
100 400,000
75 300,000
Dividend per share
50 200,000
SEK
25 100,000
3.0
2.70
0 0 2.5
2.50
2018 2019 2020 2021 2022
Volume traded, 000’s monthly Ericsson share Nasdaq Stockholm Index OMXS30 2.00
2.0
Volumes reflect trading on Nasdaq Stockholm only.
1.50
1.5
1.00
1.0
0.5
Share turnover and price trend, Nasdaq New York
ADS, USD 000’s share traded 0.0
2018 2019 2020 2021 20221)
monthly
1) For 2022 as proposed by the Board of Directors.
24 300,000
20 250,000
16 200,000
12 150,000
8 100,000
4 50,000
0 0
2018 2019 2020 2021 2022
Volume traded, 000’s monthly Ericsson ADS S&P 500

140 Shareholder information Financial report 2022
Shareholder information
Telefonaktiebolaget LM Ericsson’s Annual Financial information from Ericsson
General Meeting of shareholders 2023 is 2022 Form 20-F for the US market:
expected to be held on Wednesday, March 29, – March 15, 2023
2023 at 3 p.m. at Kistamässan, Arne Beurlings
Torg 5, Kista/Stockholm, Sweden. Interim reports 2023:
Shareholders are also able to exercise their – Q1, April 18, 2023
voting rights by post before the meeting. – Q2, July 14, 2023
Information on registration and notice of – Q3, October 17, 2023
participation, on how shareholders will be able – Q4, January 23, 2024
to exercise their voting rights, and on proxies
and assistants is found in the notice of the Annual Report 2023:
Annual General Meeting. Information is also – March, 2024
available on the Company’s website
www.ericsson.com.
Dividend proposal
The board of Directors proposes to the Annual
General Meeting a dividend to the sharehold-
ers of SEK 2.70 (2.50) per share for the finan-
cial year 2022, representing a total dividend
of approximately SEK 9.0 (8.3) billion. The
dividend is proposed to be paid in two install-
ments, SEK 1.35 per share with the record date
March 31, 2023, and SEK 1.35 per share with
the record date September 29, 2023. Should
the Annual General Meeting decide in favor
of the proposal, payment of the dividend is
expected to be made on April 5, 2023 and on
October 4, 2023.
Financial report 2022 Financial terminology 141
Financial terminology 1)
Adjusted earnings per share EBIT OPEX

Earnings (loss) per share (EPS), diluted, excluding Earnings before financial items and income tax. Operating expenses.
amortizations and write-downs of acquired intan-
gible assets and excluding restructuring charges. EBIT margin P/E ratio
EBIT as a percentage of net sales. The P/E ratio is calculated as the price of a Class B
Adjusted working capital share at last day of trading divided by earnings per
Current assets less current non-interest-bearing EBITA basic share.
provisions and liabilities (which include c urrent Earnings (loss) before interest, taxes, amorti-
provisions, contract liabilities, trade payables, zations and write-downs of acquired intangible Payable days
current tax liabilities and other c urrent liabilities). assets. The average balance of trade payables at the
beginning and at the end of the year divided
CAPEX EBITA margin by cost of sales for the year, and multiplied by
Capital expenditures. Earnings (loss) before interest, taxes, amortiza- 365 days.
tions and write-downs of acquired intangible
Capital employed assets as a percentage of net sales. Return on capital employed
Total assets less non-interest-bearing provisions EBIT as a percentage of average capital employed
and liabilities (which includes non-current provi- Equity ratio (based on the amounts at January 1 and Decem-
sions, deferred tax liabilities, contract liabilities, Equity expressed as a percentage of total assets. ber 31).
other non-current liabilities, current provisions,
trade payables, current tax liabilities and other Free cash flow after M&A Return on equity
current liabilities). Cash flow from operating activities less net capital Net income (loss) attributable to owners of the
expenditures, other investments and repayment Parent Company as a percentage of average
Capital turnover of lease liabilities. stockholders’ equity (based on the amounts at
Net sales divided by average capital employed January 1 and December 31).
(based on the amounts at January 1 and Free cash flow before M&A
December 31). Cash flow from operating activities less net capital Sales growth adjusted for comparable units
expenditures, other investments and repayment and currency
Compound annual growth rate (CAGR) of lease liabilities (excluding M&A). Sales growth adjusted for the impact of acquisi-
The year-over-year growth rate over a specified tions and divestments as well as the effects of
period of time. Gross cash foreign currency fluctuations. Also named as
Cash and cash equivalents plus interest-bearing organic sales.
Days sales outstanding (DSO) securities (current and non-current).
Trade receivables balance at quarter end divided SG&A
by net sales in the quarter and multiplied by Gross margin Selling, General & Adminstrative operating
90 days. If the amount of trade receivables is Gross income as a percentage of net sales. expenses.
larger than last quarter’s sales, the excess amount
is divided by net sales in the previous quarter Inventory turnover days (ITO days) Total shareholder return (TSR)
and multiplied by 90 days, and total DSO are 365 divided by inventory turnover, calculated as The increase or decrease in Class B share price
the 90 days of the most c urrent quarter plus the total cost of sales divided by the average invento- during the period, including dividend, expressed
additional days from the previous quarter. ries for the year (net of advances from customers). as a percentage of the share price at the start of
the period.
Earnings (loss) per share (EPS) M&A
Basic earnings (loss) per share: profit or loss attrib- Mergers and Acquisitions. Value at Risk (VaR)
utable to stockholders of the Parent C ompany A statistical method for calculating the maximum
divided by the weighted average number of Net cash potential loss that may occur with a given confi-
ordinary shares outstanding during the period. Cash and cash equivalents plus interest-bearing dence level over a given time period.
securities (current and non-current) less borrow-
Earnings (loss) per share diluted (EPS diluted) ings (current and non-current).
Earnings (loss) per share, using the weighted Exchange rates
average number of shares outstanding adjusted OCI
for the effects of dilutive potential ordinary shares. Other comprehensive income. Exchange rates in consolidation
January–December
2022 2021
SEK/EUR
Average rate 1) 10.61 10.15
Closing rate 11.08 10.24
SEK/USD
Average rate 1) 10.04 8.56
Closing rate 10.38 9.05
1) Average for the year for disclosure purpose only.
Period income and expenses for each income statement
1) For additional information of certain financial terms, see Alternative performance measures on pages 131–135. are translated at period average exchange rates.
142 Glossary Financial report 2022
Glossary
4G CO2e Network slicing

Forth generation mobile systems, also known The amount of a particular greenhouse gas, A network slice is a logically separated, self-
as LTE. expressed as the amount of carbon dioxide that contained, independent and secured part of the
gives the same greenhouse effect. network, targeting different services with different
5G requirements on speed, latency and reliability.
The fifth generation of mobile systems. An evolu- Core network
tion of 4G/LTE. The mobile network’s core part, which offers OSS
numerous services to the end users who are inter- Operations Support Systems, IT-systems used by
5GC connected by the access network. Its key function communications service providers to manage
5G Core Network is responsible for managing is to direct voice calls and route data traffic. their networks. They support management func-
the flow of data in a 5G network and ensures tions such as network inventory, service provision-
that the network can meet the demands of the COVID-19 ing, network configuration and fault management.
5G services and applications. The disease caused by the coronavirus Together with Business Support Systems (BSS),
(SARS-CoV-2). they are used to support various services for both
6G business processes and the network end-to-end.
COVID-19 pandemic
Sixth generation mobile system. An evolution The global spread of the disease caused by the RAN
of 5G. coronavirus (SARS-CoV-2). Radio Access Network, consists of a large number
radio base stations that handsets and devices can
AI connect to.
CPaaS
Artificial Intelligence. The ability of a machine to
Communications Platform as a Service. A cloud-
perform tasks commonly associated with intel-
based solution that provides businesses with Time-bound latency
ligent beings.
tools and APIs for integrating real-time com- Time-bound latency refers to the time delay
munication capabilities, such as voice, video, and between when a device sends a request and when
API it receives a response from the network.
messaging, into their applications.
Applications Programming Interface. An API
is a set of protocols and routines for building UCaaS
FWA
software applications, enabling communication Unified Communications as a Service. A cloud-
Fixed Wireless Access is a high-speed internet
and access to services or data of other software based solution that integrates various communi-
technology using wireless communication
programs. cation tools, such as voice, video, messaging, and
instead of cables.
collaboration, into a single platform.
BSS
ICT
Business Support Systems, the IT-systems that a
Information and Communication Technology. WAN
communications service provider uses to run its
Wide Area Network. A WAN connects remote
business operations towards customers. Together IoT networks for communication and resource
with operations support systems (OSS), they are Internet of things, interconnection of computing sharing.
used to support various services for both business things enabling them to send and receive data.
processes and the network end-to-end.
XR
IP Extended Reality. A technology that includes
CCaaS Internet Protocol. Defines how information travels
Contact Center as a Service. A cloud-based virtual reality (VR), augmented reality (AR),
between network elements across the internet.
solution for managing customer interactions, and mixed reality (MR), enabling users to
providing businesses with a virtual call center experience and interact with computer-
IPR
environment. Intellectual Property Rights, or specifically patents. generated simulations.
Cloud Managed services

When data and applications reside in accessible Management of operator networks and/or h
osting
data centers. of their services.
Cloud native Mobile broadband

Cloud native is the software approach of building, Wireless high-speed internet access using
deploying, and managing modern applications in the HSPA, LTE, CDMA2000EV-DO and 5G
cloud computing environments. technologies.
The terms “Ericsson”, “the Company”, “the Group”, “us”, “we”, and “our” all refer to Telefonaktiebolaget LM Ericsson and its subsidiaries.
Corporate Part of
Ericsson
Annual Report
Governance 2022
report
Annual Report 2022

report
ericsson.com
Contents
Corporate Governance report 2022

Regulation and compliance 2
Governance structure 4
General Meetings of shareholders 5
Nomination Committee 6
Board of Directors 6
Committees of the Board of Directors 9
Remuneration to Board members 11
Members of the Board of Directors 12
Management 16
Members of the Executive Team 20
Auditor 26
Internal control over financial reporting 26
Auditor’s report on the Corporate
Governance report 29
This Corporate Governance report is rendered as a separate report

added to the Financial Report in accordance with the Annual
Accounts Act ((SFS 1995:1554) Chapter 6, Sections 6 and 8) and
the Swedish Corporate Governance Code.
The report has been reviewed by Ericsson’s auditor in accordance
with the Annual Accounts Act.
A report from the auditor is appended hereto.
This report may include forward-looking statements, including statements information and statements. Important factors that could affect whether
reflecting the Company’s current views relating to the growth of the market, and to what extent any of our forward-looking statements materialize
future market conditions, future events, financial condition, and expected include but are not limited to the factors described throughout the
operational and financial performance. Company’s Annual Report for the financial year 2022, including in the
The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “intend”, section Risk Factors of the Company’s Annual Report for the financial year
“likely”, “projects”, “may”, “could”, “plan”, “estimate”, “forecast”, “will”, “should”, 2022. These forward-looking statements also represent our estimates and
“would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”, “might”, assumptions only as of the date that they were made, and to the extent
“continue”, or, in each case, their negative or variations, and similar words they represent third-party data, we have not undertaken to independently
or expressions are used to identify forward-looking statements. Any state- verify such third-party data and do not intend to do so. Given these risks
ment that refers to the Company’s strategy, future financial performance, and uncertainties, readers are cautioned not to place undue reliance on
expectations, projections or other characterizations of future events or such forward-looking statements. We expressly disclaim a duty to provide
circumstances, including any underlying assumptions, are forward-looking updates to these forward-looking statements, and the estimates and
statements. Such statements are based on the Company’s expectations as assumptions associated with them, after the date of this report, to reflect
of the date of this report, unless an earlier date is specified, including expec- events or changes in circumstances or changes in expectations or the occur-
tations based on third-party information and projections that the Company rence of anticipated events, whether as a result of new information, future
believes to be reputable. events or otherwise, except as required by applicable law or stock exchange
We caution investors that these statements are subject to risks and regulation. We maintain website and external voluntary reports that may be
uncertainties many of which are difficult to predict and generally beyond referenced in this report. The information on our website and in our external
our control that could cause actual results to differ materially and adversely voluntary reports is not incorporated by reference in, or otherwise to be
from those expressed in, or implied or projected by, the forward-looking regarded as part of, this report.
Corporate Governance report 2022 1
Corporate Governance report 2022
Ericsson is committed to maintaining the highest standards of

corporate governance; this ensures effective decision-making,
robust risk management, accountability, ownership, transparency
and social responsibility at all levels of the organization. Strong
oversight across the organization (by the Board, the CEO, the
Executive Team and at all other levels) underpins our governance.
“For the Board, best-in-class governance and build- Company’s governance framework. Also, impor-
ing a culture of compliance, ethics and integrity tantly, on March 2, 2023, we announced our resolu-
remain a top priority. The Board has continued to tion with the U.S. Department of Justice regarding
oversee and accelerate our cultural transformation, non-criminal breaches under our 2019 Deferred
further embedding our sustainable program of Prosecution Agreement, and this allows us to focus
compliance and controls, and revamping our global more fully on our strategic opportunities.
risk management approach. The Company and the In 2022, the Board witnessed with satisfaction
Board are committed to continuously developing Ericsson’s strong commitment to further developing
and improving its internal governance, risk manage- and streamlining and clarifying internal processes,
ment and oversight and controls. oversight and controls, as well as setting even higher
The Board acknowledges the feedback from the expectations of performance and adherence to its
shareholders and the vote against discharge from integrity mandate for all personnel. Integrity and
liability at the 2022 Annual General Meeting; and ethics will remain at the center of everything we do.”
taking this into account, best-in-class governance
and building a culture of compliance, ethics and
integrity continue to be a top priority for the Board.
Over the course of 2022, the Board worked closely Ronnie Leten
with management to make enhancements to the Chair of the Board
2 Corporate Governance report 2022
Regulation and compliance – formally expanding the remit of the Audit Internal rules and policies
and Compliance Committee to ensure The articles of association and the work proce-
Ericsson’s Corporate Governance enhanced oversight of the compliance dure for the Board of Directors (and its respec-
Ericsson is committed to ensuring the highest program, high-risk investigations, and risk tive Committees) establish the foundation for
standards of corporate governance: effec- management; our internal corporate governance.
tive oversight across the organization (by – increasing the number of Audit and In addition, to ensure compliance with legal
the Board, the President and CEO and the Compliance Committee meetings and and regulatory requirements and the high stand-
Executive Team); effective decision making enhancing the Audit and Compliance ards that Ericsson has set, Ericsson has adopted
with clear accountabilities at all levels; a Committee’s oversight of ongoing imple- a range of policies and procedures that include:
robust approach to risk management to effec- mentation of the Company’s compliance – The Code of Business Ethics
tively identify and control risks; compliance and internal controls program; and – Group Steering Documents, including
with law in everything we do; and an integrity- – substantially increasing the resources in Group policies and directives, instructions
led culture. the Compliance office and Corporate & and business processes for approval,
The Company has adopted corporate Government Investigations team, and control and risk management
governance practices and procedures that continuing to invest in transactional con- – The Code of Conduct for Business Partners
establish clear rules of governance, rang- trols and analytics; and – Group Risk Protocol.
ing from matters requiring approval of the – making enhancements to risk assessments,
Company’s shareholders and members of its including expanded risk assessments to Sustainability and corporate responsibility
Board to conflict of interest policies, and direc- address country specific compliance risks, governance
tor and management duties and obligations. and continuing to tighten our vetting and Sustainability and corporate responsibility are
More information can be found on our website oversight of third parties with whom we integral parts of Ericsson’s strategy and culture.
at https://www.ericsson.com/en/about-us/ work, to choose parties who will meet our This embodies our values, and we have embed-
corporate-governance. ethics and compliance expectations. ded this across our operations to create a more
resilient business, to have a positive impact
Key Corporate Governance Developments The Company has strengthened its execu- on our people and the communities in which
in 2022 tive oversight of risk management with the we work, and to create long-term value for the
In the first quarter of 2022, the Board and recruitment of highly-experienced executives, Company’s stakeholders. Within the Company,
Ericsson’s President and CEO requested including a new Chief Legal Officer, and a dedicated Sustainability and Corporate
that the Executive Team, led by the Chief a new Head of Corporate & Government Responsibility unit is responsible for develop-
Legal Officer and working with the Audit Investigations. ing and implementing relevant strategies,
and Compliance Committee, review the policies, steering documents, targets, and pro-
Company’s corporate governance practices External rules cesses. Environmental, social, and economic
with a view to extending them beyond the As a Swedish public limited liability company performance is continuously measured and
standard and mandatory levels of compli- with securities traded on Nasdaq Stockholm monitored, and is regularly subject to external
ance and introducing enhancements. The as well as on Nasdaq New York, Ericsson assurance to ensure accuracy and reliability.
Company is pleased to report that good is subject to a variety of rules that affect its The Board of Directors oversees the
progress has been made and our governance governance. Relevant external rules applica- Company’s sustainability and corporate
enhancements will continue to be made ble to Ericsson’s governance include: responsibility strategy, and the Executive
throughout 2023. The priorities that were – The Swedish Companies Act Team provides strategic guidance through
implemented in 2022 are as follows: – Applicable EU regulations various steering boards and committees. The
– introduction of an enhanced approach to – Swedish Corporate Governance Code Board receives reports on risks and perfor-
risk management and establishment of (the Code) mance annually, or more often as needed. In
a Group Business Risk Committee (BRC) – The Nasdaq Stock Market Rules, including accordance with the Swedish Annual Accounts
comprising executives and co-chaired by The Nasdaq Nordic Main Market Rules for Act, Ericsson has prepared a separate sustain-
the Chief Financial Officer and the Chief Issuers of Shares and applicable Nasdaq ability report titled “Sustainability and
Legal Officer; New York corporate governance require- Corporate Responsibility Report 2022.”
– enhancing disclosures on our corporate ments (subject to certain exemptions
governance practices; principally reflecting mandatory Swedish Ericsson interactions with U.S. authorities
– formally introducing compliance and integ- legal requirements) and other governmental authorities
rity performance indicators into executive – Applicable requirements of the U.S. On March 2, 2023, the Company reached a
remuneration; Securities and Exchange Commission (SEC). resolution (DOJ Plea Agreement) with the
Compliance with securities market regulations
Compliance with the Swedish Corporate Governance Code Compliance with applicable stock exchange rules
The Code is based on the principle of “comply or explain” and is published on the There has been no infringement by Ericsson of
website of the Swedish Corporate Governance Board, which administers the applicable stock exchange rules and no breach
Code: www.corporategovernanceboard.se. Ericsson is committed to complying of good practice on the securities m arket reported
with best-practice corporate governance standards on a global level. Ericsson by the disciplinary c ommittee of Nasdaq Stockholm
does not report any deviations from the rules of the Code in 2022. or the Swedish Securities Council in 2022.
United States Department of Justice (DOJ) compliance monitor for three years while the DPA by failing to inform the DOJ about the
regarding non-criminal breaches under its the Company continues to undertake sig- investigation until after entering into the DPA.
deferred prosecution agreement (DPA). nificant reforms to strengthen its Ethics and In June 2022, the SEC informed Ericsson
Under the DOJ Plea Agreement, Ericsson will Compliance Program. The monitor’s primary that it opened an investigation concerning
plead guilty to previously deferred charges responsibilities include reviewing and evaluat- matters described in the Company’s 2019 Iraq
relating to conduct prior to 2017, as described ing the Company’s progress in implementing investigation report. Under Ericsson’s consent
below. In addition, Ericsson has agreed to and operating its enhanced compliance pro- judgment with the SEC, we are permanently
pay a fine of USD 206,728,848. The entry gram and accompanying controls, pursuant enjoined from violating the FCPA’s antibribery,
of the DOJ Plea Agreement will bring the to the terms of the DPA, as well as providing books and records and internal controls provi-
DPA to an end. As set forth in the DOJ Plea recommendations for improvements. sions. Violations of the injunction or consent
Agreement, Ericsson will have certain continu- In October 2021, the DOJ notified Ericsson judgment could subject us to new civil and
ing obligations through June 2024, including of its determination that the Company criminal penalties as well as new enforcement
cooperation, reporting evidence or allegations breached its obligations under the DPA by fail- actions.
of potential FCPA violations, continuing to ing to provide required information to the DOJ. In December 2022, prior to entering the
engage an independent compliance monitor In February 2022, the Company publicly DOJ Plea Agreement, the Company agreed
and improving its compliance program. disclosed that an internal investigation in with the DOJ and SEC to extend the term
Previously, on January 12, 2023, the 2019 included a review of the conduct of of the Company’s independent compliance
Company announced that a provision in Ericsson employees, vendors and suppliers in monitor for one year, to June 2024. The
the fourth quarter of 2022 of SEK 2.3 billion Iraq during the period 2011–2019. The inves- Company continues to face other negative
(approx. USD 220 million) in relation to the tigation found serious breaches of compliance consequences from these matters, including
DOJ Plea Agreement was made. The provision rules and the Company’s Code of Business matters under review as part of our ongoing
also included estimated expenses (SEK 0.1 Ethics and identified evidence of corruption- and future communications with governmen-
billion) for the previously announced extended related misconduct and other serious viola- tal authorities to comply with our obligations
compliance monitorship. tions, including payments to intermediaries under the DOJ Plea Agreement.
Ericsson originally entered into a resolution and the potential use of alternate transport With respect to the matters described in the
with the DOJ resolving the DOJ’s investiga- routes in connection with circumventing Iraqi 2019 Iraq investigation report, the Company
tions into Ericsson’s business dealings in Customs, at a time when terrorist organiza- continues to thoroughly investigate the mat-
Djibouti, China, Vietnam, Indonesia and tions, including ISIS, controlled some trans- ters in full cooperation with the DOJ and the
Kuwait. The resolution included a DPA and port routes. The investigation also identified SEC. As previously disclosed, the Company’s
a guilty plea by our Egyptian subsidiary to payment schemes and cash transactions that 2019 investigation did not conclude that
a criminal violation of the antibribery provi- potentially created the risk of money launder- Ericsson made or was responsible for any
sions of the US Foreign Corrupt Practices ing. The investigators could not determine the payments to any terrorist organization, and
Act (FCPA). Under the DPA, the Company ultimate recipients of any payments, nor iden- the Company’s significant further investiga-
admitted to the conduct described in the tify that any Ericsson employee was directly tion over the course of 2022 has not altered
DPA’s statement of facts, and the DOJ agreed involved in financing terrorist organizations. this conclusion. The Company’s internal
to defer prosecution of Ericsson for the DPA’s In March 2022, the DOJ informed Ericsson investigation and its cooperation with authori-
three-year term if Ericsson did not violate it had determined that, before entering into ties in relation to the matters discussed in a
the terms of the DPA. As part of the DPA with the DPA, the Company provided insufficient 2019 Iraq-related internal investigation report
the DOJ and consent judgment with the U.S. information to the DOJ about the Company’s remain open and ongoing and are not covered
Securities and Exchange Commission (SEC), internal investigation into conduct in Iraq. The by the DOJ Plea Agreement.
Ericsson agreed to engage an independent DOJ also determined the Company breached
Ericsson’s core values
Professionalism
The Company’s core values are the

foundation of its culture. They guide
employees’ daily work, in how they
relate to each other and the world
Ericsson’s around them and in the way the
Integrity Respect
core values Company does business.
The Code of Business Ethics and
the Code of Conduct for Business
Partners can be found
on Ericsson’s website.
Perseverance
Ethics and Compliance Program sense of integrity and reflects the Company’s Committee. He will continue to lead the further
For several years, we have invested significant commitment to conducting business respon- embedding of our E&C Program into the
resources to strengthen our ethics and compli- sibly, consistent with all internationally organization.
ance (E&C) program. This is a continuous recognized human rights principles and the
effort and has, importantly, been underpinned applicable laws and regulations where the
by work across the organization to embed a Company operates. All employees and our Governance structure
culture of integrity and ethics. This is bolstered Board of Directors are subject to CoBE, as are Shareholders may exercise their decision-
by the continuous strengthening of the com- our consultants and contractors. CoBE is avail- making rights in Telefonaktiebolaget
pliance function, together with the implemen- able in 43 languages used across our global LM Ericsson (the “Parent Company”) at
tation and maintenance of strong systems, operations, and all employees are required General Meetings of shareholders.
controls and policies to effectively prevent and to confirm their understanding of CoBE on a A Nomination Committee is appointed
detect wrongdoings. regular basis. In addition, all employees shall each year by the major shareholders in accord-
During 2022, we advanced the company- participate in a mandatory Foundational ance with the Instruction for the Nomination
wide and E&C-led program focused on prior- Anti-Bribery and Corruption (ABC) train- Committee adopted by the Annual General
itizing integrity as part of Ericsson’s culture ing. Managers and employees exposed to Meeting of shareholders. The tasks of the
and way of working. This program serves to increased risk are also required to participate Nomination Committee include the proposal
foster accountability and effective decision- in an expanded version of the ABC training. of Board members and external auditor for
making, while also furthering trust with our In 2022, the Company also increased election by the Annual General Meeting of
customers, business partners, and regulators. the number of employees within the compli- shareholders and proposal of Board member
The Company also promotes transparency ance function, further strengthening the and auditor remuneration.
through the maintenance of a dedicated com- organization in this area. We continue to In addition to the Board members elected
munication channel for employees and other embed compliance employees throughout the by shareholders, the Board of Directors con-
external stakeholders to report any compliance organization, to partner with the business and sists of employee representatives and their
concerns – the Ericsson Compliance Line. advise on decisions. Moreover, the Company deputies, who the unions have the right to
Progress in the speak-up culture is continued to invest in transactional controls appoint under Swedish law. The Board of
evidenced by the continuous and increasing and data analytics, a Compliance Help desk Directors is ultimately responsible for oversee-
engagement of our employees over the recent and additional compliance officers in-country, ing the strategy of Ericsson and the manage-
years in raising compliance questions as well to help employees make integrity-driven ment of its operations.
as potential concerns to ensure we conduct decisions. In addition, the Company has The President and CEO, appointed by the
business with integrity. The Company noted embedded Ethics and Compliance guidance Board of Directors, is responsible for develop-
a modest increase in number of reported into its M&A processes. ing and executing the strategy and handling
potential compliance concerns by 33 (approx. We continue to make considerable invest- the day-to-day management of Ericsson in
3.12%). We treat this as an indicator of grow- ments in improving our E&C Program in accordance with guidelines issued by the
ing confidence by employees and third parties accordance with our strategy and objectives, Board. The President and CEO is supported by
in the integrity of our allegation management to remediate historical issues, including gaps the Executive Team.
and investigation processes and we take seri- in our compliance processes and internal The external auditor of Ericsson is appointed
ous measures when we learn of any potential controls, and to strengthen our internal inves- by the shareholders at the General Meeting
misconduct. tigations team. of shareholders.
Also, in 2022 we revised and enhanced On February 28, 2023, we announced that
our Code of Business Ethics (CoBE), which the Head of our Ethics and Compliance func- Ownership structure
outlines the Company’s expectations for tion was departing after almost four years in As of December 31, 2022, the Parent
all employees and our fundamental ethical her role, and was being replaced on an interim Company had 425,636 registered sharehold-
principles. CoBE is designed to ensure that basis by Jan Sprafke, who reports to the Chief ers, of which 412,763 were resident or located
the Company pursues business with a strong Legal Officer and the Audit and Compliance in Sweden (according to the share register
Governance structure Shareholders

General Meeting of shareholders Nomination
Annual General Meeting/Extraordinary General Meeting Committee Ownership percentage (voting rights)
Board of Directors External

Unions
Directors elected by the General Meetings of shareholders Auditors
3 Directors and 3 Deputies appointed by the Unions
Audit and Finance Remuneration Technology

Compliance Committee Committee and Science
Committee Committee
Swedish institutions: 58.07%
President and CEO Of which:
– Investor AB 23.79%
– AB Industrivärden 15.14%
– AMF Tjänstepension
Management and AMF Fonder 4.87%
Foreign institutions 28.28%
Head of Internal Chief Compliance Swedish retail investors 5.41%
Others 8.24%
audit function Officer
Source: Nasdaq
kept by Euroclear Sweden AB). Swedish insti- Act requires qualified majorities in certain until December 31, 2022. Shareholders who
tutions held approximately 58% of the votes. cases, for example in case of: amendment of did not wish to vote or ask questions online
The largest shareholders as of December 31, the articles of association; and resolution to and others who wanted to follow the discus-
2022 were Investor AB with approximately transfer treasury stock to employees partici- sions were able to follow the AGM via Lumi
23.79% of the votes (8.00% of the shares) pating in long-term variable compensation Global’s website.
and AB Industrivärden with approximately programs. Decisions of the AGM 2022 included:
15.14% of the votes (2.61% of the shares) and – Shareholders representing at least one
AMF Tjänstepension and AMF Fonder with The Annual General Meeting tenth of all shares in the Company voted
approximately 4.87% of the votes (2.74% of of shareholders against discharge from liability of the
the shares). The Annual General Meeting of shareholders Board members and the President and
A significant number of the shares held by (AGM) is held in Kista/Stockholm. The date CEO for the financial year 2021
foreign investors are nominee-registered, i.e., and venue for the meeting are announced on – Payment of a dividend of SEK 2.50 per
held of record by banks, brokers and/or the Ericsson website no later than at the time share to be paid in two installments
nominees. This means that the actual share- of release of the third-quarter interim financial – Re-election of Ronnie Leten as Chair of the
holder is not displayed in the share register report in the preceding year. Board of Directors
kept by Euroclear Sweden AB or included in Shareholders who cannot participate in – Re-election of the following members
the shareholding statistics. person may be represented by proxy. The of the Board of Directors: Jon Fredrik
More information on Ericsson’s share Board of Directors may decide, in accordance Baksaas, Jan Carlson, Eric A. Elzvik, Nora
holders can be found in the chapter “The with the articles of association, that the share- Denzel, Börje Ekholm, Kurt Jofs, Kristin
Ericsson share” in the Financial Report. holders also shall be able to exercise their S. Rinne, Helena Stjernholm and Jacob
voting rights by post before the AGM pursuant Wallenberg
Shares and voting rights to the procedure stated in the Swedish – New election of the following member of
The share capital of the Parent Company Companies Act. Only shareholders registered the Board of Directors: Carolina Dybeck
consists of two classes of shares listed on in the share register have voting rights. Happe
Nasdaq Stockholm: A and B shares. Each Nominee-registered shareholders who wish to – Approval of Board of Directors’ fees,
Class A share carries one vote, and each vote must request to be entered into the share in accordance with the Nomination
Class B share carries one tenth of one vote. register by the record date for the AGM. Committee’s proposal:
Class A and B shares entitle the holder to the The AGM is held in Swedish and is simulta- – Chair: SEK 4,375,000 (previously
same proportion of assets and earnings and neously translated into English. SEK 4,225,000)
carry equal rights to dividends. Documentation provided by the Company is – Other non-employee Board members:
The Parent Company may also issue Class available in both Swedish and English. SEK 1,100,000 each (previously
C shares, which are converted into Class B The AGM gives attending shareholders the SEK 1,060,000)
shares to create treasury stock to finance opportunity to raise questions relating to the – Chair of the Audit and Compliance
and hedge long-term variable compensation operations of the Group. Normally, the major- Committee: SEK 475,000 (previously
programs resolved by the General Meeting ity of the members of the Board of Directors SEK 420,000)
of shareholders. and the Executive Team is present to answer – Other non-employee members of the
In the US, the Ericsson Class B shares are such questions. Audit and Compliance Committee: SEK
listed on Nasdaq New York in the form of The external auditor is present at the AGM. 275,000 each (previously SEK 270,000)
American Depositary Shares (ADS) evidenced – Chairs of the Finance Committee, the
by American Depositary Receipts (ADR). Each Ericsson’s AGM 2022 Remuneration Committee and the
ADS represents one Class B share. Including shareholders represented by proxy, Technology and Science Committee:
The members of the Board of Directors and 2,163 shareholders were represented at the SEK 205,000 each (previously
the Executive Team have the same voting AGM held on March 29, 2022 representing SEK 205,000)
rights on shares as other shareholders holding approximately 68% of the votes. – Other non-employee members of the
the same class of shares. Due to the COVID-19 pandemic, the AGM Finance Committee, the Remuneration
2022 was conducted without the physical Committee and the Technology and
presence of shareholders, representatives and Science Committee: SEK 180,000 each
General Meetings of shareholders third parties and the meeting was conducted (previously SEK 180,000)
as digital meeting with online participation. – Approval for part of the Board members’
Decision-making at General Meetings In addition, the shareholders were able to fees to be paid in the form of synthetic shares
The decision-making rights of Ericsson’s exercise their voting rights by post before the – Re-appointment of Deloitte AB as auditor for
shareholders are exercised at General meeting. This was in line with section 22 of the period up until the end of the AGM 2023
Meetings of shareholders. Most resolutions the Act (2020:198) on temporary exceptions – Implementation of a Long-Term Variable
at General Meetings are passed by a simple to facilitate the execution of general meetings Compensation Program 2022 for the
majority. However, the Swedish Companies in companies and other associations, in force Executive Team. However, due to technical
Contact the Board of Directors Annual General Meeting 2023

Telefonaktiebolaget LM Ericsson Ericsson’s AGM 2023 is expected to be held
The Board of Directors Secretariat on March 29, 2023. Further information is
SE-164 83 Stockholm, Sweden available on Ericsson’s website.
boardsecretariat@ericsson.com
issues, the Company was unable to prop- – Karl Åberg (appointed by Committee on the Company’s strategy and
erly register and count all submitted votes, AB Industrivärden) challenges. The Committee also met with
the Board of Directors therefore resolved – Anders Oscarsson (appointed by AMF Ericsson’s President and CEO, Börje Ekholm,
to withdraw resolution item 16.2 (Transfer Tjänstepension and AMF Fonder) who presented his views in this respect.
of treasury stock to employees and on an – Niko Pakalén (replaced Jonas Synnergren The Committee has analysed the needs
exchange, directed share issue and acquisi- on December 9, 2022) (appointed by of competencies in the Board and has been
tion offer for the Long-Term Variable Cevian Capital Partners Limited) informed of the results of the Board work eval-
Compensation Program 2022) and item – Ronnie Leten (the Chair of the Board uation led by the Chair of the Board. On this
17 (The Board of Directors’ proposal for of Directors). basis the Nomination Committee has assessed
resolution on transfer of treasury stock to the competence and experience required by
employees and on an exchange, directed The tasks of the Nomination Committee Ericsson’s Board members and the need for
share issue and acquisition offer in relation The main task of the Nomination Committee improvement of the composition of the Board
to the earlier resolution on the Long-Term is to propose Board members for election in terms of diversity in age, gender and cul-
Variable Compensation Program 2021). by the AGM. As member of the Nomination tural/geographic background. The Nomination
Committee, the Chair of the Board of Directors Committee has applied the Swedish Corporate
The minutes from the AGM 2022 is available fulfils an important role to inform the Governance Code, section 4.1, as diversity
on Ericsson’s website. Committee of the Company’s strategy and policy. The Nomination Committee aims to
future challenges. Such insights are necessary propose a composition of Board members with
for the Committee to be able to assess the complementing experiences and competencies
Nomination Committee competence and experience that is required to make it possible for the Board to contribute
The AGM has adopted an Instruction for the by the Board. In addition, the Committee must to a positive development of Ericsson. The
Nomination Committee that includes the consider independence rules applicable to the Nomination Committee searches for potential
tasks of the Nomination Committee and the Board of Directors and its committees. Board member candidates both with a long-
procedures for appointing its members. The The Nomination Committee also makes the term and a short-term perspective and always
Instruction applies until the General Meeting following proposals, for resolution by the AGM: focuses on diversity to ensure that the Board
of shareholders resolves otherwise. Under the – Remuneration to non-employee Board is provided with different perspectives into
Instruction, the Nomination Committee shall members elected by the AGM and remu- the Board work and considerations. The
consist of: neration to the auditor Nomination Committee also considers the
– representatives of the four largest share- – Appointment of auditor, whereby candi- need for renewal and carefully assesses
holders by voting power by the end of the dates are selected in cooperation with the whether the proposed Board members have
month in which the AGM was held, and Audit and Compliance Committee of the the capability to devote necessary time and
– the Chair of the Board of Directors. Board care to the Board’s work.
– Election of Chair at the AGM In 2022, the Committee met with the Chair
The Committee may also include additional – Changes to the Instruction for the of the Audit and Compliance Committee to
members following a request by a shareholder. Nomination Committee (if any). acquaint itself with the assessments made by
The request must be justified by changes in the Company and the Audit and Compliance
the shareholder’s ownership of shares and be Work of the Nomination Committee Committee of the quality and efficiency of
received by the Nomination Committee no for the AGM 2023 external auditor work. The Audit and
later than December 31 of each year. No fees The Nomination Committee started its work Compliance Committee also provided its
are paid to the members of the Nomination by going through a checklist of its duties recommendations on external auditor and
Committee. However, the Company shall bear under the Code and the Instruction for the audit fees.
reasonable expenses related to the assign- Nomination Committee and by setting a As of February 22, 2023, the Nomination
ment of the Nomination Committee. timeline for its work ahead. The complete Committee has held nine meetings.
proposals of the Nomination Committee
Members of the Nomination Committee were presented in connection with the notice
The current Nomination Committee members convening the AGM 2023. Board of Directors
are: A good understanding of Ericsson’s The Board of Directors is ultimately respon-
– Johan Forssell (appointed by Investor AB), business and strategy is important for the sible for the organization of Ericsson and the
Chair of the Nomination Committee Nomination Committee. Therefore, the Chair management of Ericsson’s operations. The
of the Board presented his views to the Board appoints the President and CEO who
Contact the Nomination Committee Proposals to the Nomination Committee

Telefonaktiebolaget LM Ericsson Shareholders may submit proposals to the
The Nomination Committee Nomination Committee at any time but should
c/o The Board of Directors Secretariat do so in due time before the AGM to ensure
SE-164 83 Stockholm that the proposals can be considered by the
Sweden Committee. Further information is available on
nomination.committee@ericsson.com Ericsson’s website.
is responsible for managing the day-to-day representatives and three deputies, appointed private issuer. Ericsson can rely on exemp-
operations in accordance with guidelines from by the trade unions for the same period of time. tions from certain U.S. and SEC requirements
the Board. The President and CEO ensures The Nomination Committee advised and may decide to follow Swedish practices
that the Board is updated regularly on issues before the AGM 2022 that the Nomination in lieu of some Nasdaq Stock Market inde-
of importance to Ericsson, including matters of Committee had applied the Swedish pendence rules.
business development, results, financial posi- Corporate Governance Code, section 4.1, The composition of the Board of Directors
tion and liquidity. as diversity policy with the aim to propose a meets all applicable independence criteria.
Board members serve from the close of one composition of Board members with comple- The Nomination Committee concluded before
AGM to the close of the next, but can serve any menting experiences and competencies that the AGM 2022 that, for purposes of the Code,
number of consecutive terms. is also diverse in terms of age, gender and at least seven of the nominated Board
The President and CEO may be elected a cultural/geographical background. The cur- members were independent from Ericsson,
Director of the Board (and Börje Ekholm is rent Board composition is the result of the its senior management and its major share-
currently a Director) but may not be elected work of the Nomination Committee prior to holders. These were Jon Fredrik Baksaas, Jan
Chair of the Board under the Swedish the AGM 2022. The Board consists of Board Carlson, Nora Denzel, Carolina Dybeck Happe,
Companies Act. members with experiences from different Eric A. Elzvik, Kurt Jofs and Kristin S. Rinne.
cultural/geographic areas, competencies At Board meetings where the Board
Conflicts of interest from different industry sectors and, excluding members meet in person, a non-executive
Ericsson maintains rules and regulations the President and CEO, 40% of the share- session is normally held without Ericsson
regarding conflicts of interest. Board members holder-elected Board members are women. management present.
are disqualified from participating in any Ahead of the AGM 2023, the Nomination
decision regarding agreements between Work procedure Committee has proposed that current Board
themselves and Ericsson. The same applies to In accordance with the Swedish Companies member Jan Carlson be elected as Chair of the
agreements between Ericsson and any third Act, the Board of Directors has adopted a work Board (replacing Ronnie Leten) and that
party or legal entity in which the Board mem- procedure for the Board and its Committees Jonas Synnergren and Christy Wyatt be
ber has an interest that may be contrary to the outlining rules for the distribution of tasks elected as new Board members (replacing
interests of Ericsson. among the Board, its Committees and the Kurt Jofs and Nora Denzel), all three are
The Audit and Compliance Committee President and CEO. This complements the rules deemed independent from Ericsson, its
oversees the procedures for related-party in the Swedish Companies Act and in the arti- Executive Management and its major
transactions. The Committee has also imple- cles of association of the Company. The work shareholders.
mented a pre-approval process for non-audit procedure is reviewed, evaluated and amended
services carried out by the external auditor. by the Board as required or appropriate, and is Structure of the work of the Board
adopted by the Board at least once a year. of Directors
Composition of the Board of Directors The work of the Board follows a yearly cycle.
and diversity Independence This enables the Board to appropriately
The current Board of Directors consists The Board of Directors and its Committees address each of its duties and to keep strategy,
of eleven Board members elected by the are subject to a variety of independence rules risk assessment and value creation high on
shareholders at the AGM 2022 for the period under applicable Swedish law, the Code and the agenda.
until the close of the AGM 2023. The Board applicable U.S. securities laws, U.S. Securities As the Board is responsible for financial
of Directors also consists of three employee and Exchange Commission (SEC) rules and oversight, financial information is presented
the Nasdaq Stock Market Rules as a foreign and evaluated at Board meetings.
The Board’s annual work cycle 2022

Financial targets meeting Fourth-quarter and full-year
– Board work evaluation financial results meeting
The annual cycle applied to the – Financial result of the past year
Board’s work allows the Board
Third interim report meeting
to appropriately address its Q4 Dec Jan Q1
– Q3 Financial report
duties during the year. It also – Financial outlook Nov Feb
facilitates the organization in
aligning its global processes Board meeting
to allow appropriate Board Oct Mar (incl. statutory matters)
involvement.
Sep Apr
Strategy meeting First interim report meeting
– Q1 Financial report
Aug May
Q3 Jul Jun Q2
Second interim report meeting

– Q2 Financial report Strategy meeting
Furthermore, the Chair of each Committee Board addressed the interim financial auditor’s review of the interim and annual
reports on Committee work at Board meetings report for the third quarter of the year and reports are deemed to give reasonable
and minutes from the Committee meetings are the financial outlook. assurance of the effectiveness of the internal
made available to all Board members. – Financial targets meeting controls over financial reporting.
At Board meetings, the President and CEO A Board meeting was held for the Board to
reports on business and market developments address the financial targets. At this meet- Work of the Board of Directors in 2022
as well as on the financial performance of the ing, the results of the Board evaluation were In 2022, 29 Board meetings were held. For
Group. Strategic issues and risks are also presented to and discussed by the Board. attendance at Board meetings, see the table
addressed at most Board meetings. The Board on page 11. In addition to the Board meet-
is regularly informed of developments in legal Training ings held as a part of the annual work cycle
and regulatory matters of importance. Board New Board members receive training tailored of the Board, the Board receives information
and Committee meetings may, as appropriate, to their individual needs. Introductory training updates, in writing or in telephone meetings,
be held by way of telephone or video confer- typically includes meetings with heads of as deemed appropriate.
ence, and resolutions may be taken per capsu- business areas and Group functions, as well Business strategy, ethics and compliance,
lam (unanimous written consent). Such reso- as training required by Nasdaq Stockholm on geopolitics and M&A, are among the matters
lutions are accounted for as Board/Committee listing issues and insider rules. that have been in focus within the Board
meetings. The Board’s strategy discussions are during the year. Compliance, strategy and risk
usually combined with deep-dive sessions into management are always high on the Board’s
The 2022 annual work cycle of the Board issues of importance for the Ericsson Group, agenda as well as sustainability and corporate
– Fourth-quarter and full-year financial including business area and market area deep responsibility, which are integrated into the
results meeting dives. Board members’ knowledge in these business s trategy. The Board continuously
Following the end of the calendar year, the fields is crucial to allow well-founded Board monitors international developments and their
Board held a meeting which focused on the resolutions, and to ensure that the Company possible impact on Ericsson.
financial results of the entire year 2021 and takes due advantage of the different compe-
handled the fourth-quarter financial report. tencies of the Board members. Board work evaluation
– Board meeting (incl. statutory matters) A key objective of the Board work evaluation is
A Board meeting was held in connection Auditor involvement to ensure that the Board is functioning effec-
with the AGM 2022. Members of each of At the AGM 2022, Deloitte AB was reappointed tively. This includes gaining an understanding
the Board Committees were appointed and external auditor. of the issues that the Board thinks warrant
the Board resolved on signatory powers. The Board meets with Ericsson’s external greater focus, as well as determining areas
– First interim report meeting auditor in closed sessions at least once a year where additional competence is needed within
At the first interim report meeting, the to receive and consider the auditor’s observa- the Board and whether the Board composition
Board addressed the interim financial tions. The auditor provides reports to manage- is appropriate. The evaluation also serves
report for the first quarter of the year. ment on the accounting and financial as guidance for the work of the Nomination
– Strategy meeting reporting of the Group. Committee.
A Board meeting was held to address The Audit and Compliance Committee also Each year, the Chair of the Board initiates
particular strategic matters in further detail. meets regularly with the auditor to receive and and leads the evaluation of the Board and
– Second interim report meeting consider observations on the interim reports Committee work and procedures. Evaluation
At the second interim report meeting, the and the Annual Report. The auditor reports on tools include detailed questionnaires and
Board addressed the interim financial whether the accounts, the management of discussions. The services of an external corpo-
report for the second quarter of the year. funds and the general financial position of rate advisory firm have been retained by the
– Strategy meeting the Group are presented fairly in all material Company to assist in developing question-
A Board meeting was held, in essence respects. naires, carrying out surveys and summarizing
dedicated to short-term and long-term In addition, the Board reviews and responses.
strategies of the Group, with particular assesses the process for financial reporting, In 2022, Board members responded to a
focus on merger and acquisitions. as described on page 26 under Internal control written questionnaire covering the Board work
– Third interim report meeting over financial reporting. Combined with other in general as well as the work of the Chair of
At the third interim report meeting, the steps taken internally, the Board’s and the the Board, the Audit and Compliance
Organization of the Board work

Number of Committee members as of December 31, 2022
Board of Directors
14 Board members
Audit and Compliance Committee Finance Committee Remuneration Committee Technology and Science
(4 Board members) (4 Board members) (4 Board members) Committee
(5 Board members)
Oversight of financial reporting Finance strategy Guidelines for remuneration
Oversight of internal control to Group management Technology strategy and planning
Oversight of auditing Long-Term Variable Remuneration Technology ecosystem and
Executive remuneration partnerships
Oversight of the Group’s Ethics
and Compliance program Science direction
Committee, the Finance Committee, the – Internal control over financial reporting further independent reporting line to the Audit
Remuneration Committee and the Technology – Risk management and Compliance Committee on the areas of the
and Science Committee. In addition, each – The effectiveness, appropriateness and Ethics and Compliance Program (defined as the
Director responded to a questionnaire on the implementation of the Group’s compli- areas of ethics, anti-bribery and -corruption,
Director’s individual performance. As part of ance programs including the Ethics and conflicts of interests, anti-money laundering and
the evaluation process, the Chair of the Board Compliance (E&C) Program. competition law). The Chief Compliance Officer
also had individual discussions with each of regularly reports to the Committee on the effec-
the Board members. The results from the The Audit and Compliance Committee also tive operation of the E&C Program, including
evaluations were presented to the Board and reviews the annual and interim financial information of actual or suspected serious Code
were thoroughly discussed. The Nomination reports and oversees the external audit of Business Ethics (CoBE) violations, insights
Committee was informed of the results of process. In order to ensure the auditor’s inde- from investigations outcomes and remediation
the Board work evaluation. pendence, there are pre-approval policies and activities, the identification of patterns of fail-
procedures in place for audit and non-audit ures, and emerging risks and changes in the
related services to be performed by the exter- legal and regulatory environment. Such reports
Committees of the Board of Directors nal auditor. Pre-approval authority may not be enable proper oversight over the identification
The Board of Directors has currently delegated to management. of emerging risks or risk patterns and the ade-
established four Committees: the Audit The Audit and Compliance Committee itself quacy of corresponding activities to prevent,
and Compliance Committee, the Finance does not perform audit work. The Head of detect and remediate such risks in a risk appro-
Committee, the Remuneration Committee Ericsson’s internal audit function reports directly priate manner. In addition to the above, the
and the Technology and Science Committee. to the Audit and Compliance Committee. The Chief Compliance Officer has in camera sessions
Members of each Committee are appointed for Head of Ericsson´s internal audit function has in with the Audit and Compliance Committee
one year from among the Board members. camera sessions with the Audit and Compliance without the presence of anyone from the man-
The main task of the Committees is, and Committee without the presence of anyone agement and unrestricted access to the CEO as
the Board has authorized each Committee, to from the management and unrestricted access well as to the Audit and Compliance Committee
provide focused Board oversight on their to the Audit and Compliance Committee in her in the Chief Compliance Officer’s discretion and
relevant subject matters, and to review such discretion and at least quarterly. at least quarterly. However, in 2022 the fre-
matters prior to any resolution by the Board. Ericsson’s external auditor is appointed by quency of meetings was increased. The Head of
The Board may also on occasion resolve on an the shareholders at the Annual General Meeting Corporate and Government Investigations has
extended authorization for one or several (AGM). The Committee is involved in the pre- an extraordinary reporting line to the Committee
Committee(s) to resolve on additional specific paratory work for the Nomination Committee to in the event he/she is impeded or obstructed in
matters outside of the ordinary authorization. propose external auditor and auditor fees for fulfilling his/her duties.
If deemed appropriate, the Board of Directors resolution by the AGM. It also monitors the The Audit and Compliance Committee also
and each Committee have the right to engage ongoing performance and independence of the oversees Ericsson’s process for reviewing
independent external expertise, either in auditor with the aim to avoid conflicts of interest. transactions with related parties and Ericsson’s
general or with respect to specific matters. The Audit and Compliance Committee over- whistleblower procedures. Further, the Audit
The minutes from the Committee meetings sees matters relating to compliance risk, and and Compliance Committee reviews the
are made available to all Board members and regularly receives reporting on compliance Group’s handling of information and cyber
the Chair of the Committee reports on the related matters from the Chief Legal Officer, the security as well as data privacy, and the
work of the Committee at Board meetings. Chief Compliance Officer and the Head of Group’s environmental, social and governance
Corporate and Government Investigations. The (ESG) reporting and performance.
Audit and Compliance Committee Chief Legal Officer has a direct reporting line to On an annual basis, the Audit and
On behalf of the Board, the Audit and the Audit and Compliance Committee on com- Compliance Committee receives training on
Compliance Committee monitors the pliance matters that fall outside the scope of the topics of special relevance to the Committee,
following: E&C Program, and on the holistic management within areas such as finance, legal, compliance
– The scope and correctness of the financial of legal, compliance, ethical and associated and security. During 2022, the Committee
statements reputational risks arising in the Company’s received training on several topics including
– Compliance with legal and regulatory operations. In addition to reporting to the Chief accounting principles, ESG reporting and anti-
requirements Legal Officer, the Chief Compliance Officer has a corruption and accurate books and records.
Members of the Committees as of December 31, 2022
Members of the Committees of the Board of Directors
Audit and Compliance Committee Finance Committee Remuneration Committee Technology and Science Committee
Eric A. Elzvik (Chair) Ronnie Leten (Chair) Jon Fredrik Baksaas (Chair) Kristin S. Rinne (Chair)
Jan Carlson Anders Ripa Kurt Jofs Jan Carlson
Kurt Jofs Helena Stjernholm Ronnie Leten Nora Denzel
Torbjörn Nyman Jacob Wallenberg Kjell-Åke Soting Kurt Jofs
Anders Ripa
Reporting Compliance Concerns Directors has determined that each of Eric A. Finance Committee assessed the Company’s
Ericsson provides employees and other Elzvik, Jan Carlson and Kurt Jofs is an “audit financial strength and balance-sheet as well
external stakeholders a dedicated com- committee financial expert”, as defined under as reviewed the finance strategy including
munication channel for reporting compliance the U.S. Securities and Exchange Commission capital structure, capital targets, rating strat-
concerns – the Ericsson Compliance Line. The rules and regulations, and that each of them egy and treasury operations.
Ericsson Compliance Line is operated by a qualifies as financially sophisticated under the
third party and is available 24/7, 365 days per applicable Nasdaq listing rules and are familiar Remuneration Committee
year, enabling people to report from multiple with the accounting practices of an interna- The Remuneration Committee’s responsibili-
countries and in many languages. Employees tional company, such as Ericsson. ties include:
and external stakeholders are encouraged – Reviewing and preparing, for resolution by
to report conduct that could violate the law, Work of the Audit and Compliance the Board, proposals on salary and other
Ericsson’s policies including CoBE and related Committee in 2022 remuneration, including retirement com-
steering documents or the Ericsson Code of The Audit and Compliance Committee pensation, for the President and CEO
Conduct for Business Partners. Such conduct held 15 meetings in 2022. Board members’ – Reviewing and preparing, for resolution
may relate to corruption, fraud, question- attendance is reflected in the table on page by the Board, proposals to the AGM
able accounting, deficiencies in the internal 11. During the year, the Audit and Compliance on Guidelines for remuneration to the
controls, auditing, human right matters, work- Committee reviewed the scope and results Executive Team
place respect and fairness or other matters of external financial audits and the inde- – Reviewing and preparing, for resolution
that could constitute a breach of law, or that pendence of the external auditor. Prior to by the Board, proposals to the AGM on
could harm the sustainability or reputation of publishing, the Committee also reviewed the Long-Term Variable Compensation
Ericsson, its employees and shareholders. and discussed each interim report and the Program (LTV) and similar equity
Ericsson’s Allegation Management Office is annual report with the external auditor. The arrangements
responsible for the overall management pro- Committee also monitored the external audit – Approving proposals on salary and other
cess from the time an allegation of a potential fees and approved non-audit services per- remuneration, including retirement com-
compliance violation is reported to the reme- formed by the external auditor in accordance pensation, for the members of the Executive
diation of any such substantiated violation. with such policies and procedures. Team (other than the President and CEO)
Corporate and Government Investigations The Committee approved the audit plan for – Approving proposals on target levels for the
(CGI) team is responsible for ensuring that all the internal audit function based on among short-term variable compensation (STV)
plausible allegations of potential compliance other things the annual risk assessment, and for the members of the Executive Team
violations assigned to CGI are appropriately reviewed the reports of the internal audit (other than the President and CEO)
investigated, and that investigations of higher function. The Committee also received and – Approving pay-out of the STV for the
risk are reported to the Audit and Compliance reviewed updates and reports to the Ericsson members of the Executive Team members
Committee as appropriate. Compliance Line and from other internal (other than the President and CEO), based
To respond to the coming into force of the reporting channels including updates on on achievements and performance.
European Union Directive on Whistleblower on-going investigations within the Group.
Protection, and its transposition into Swedish The Committee monitored the continued In its work, the Remuneration Committee
and other EU national laws, Ericsson has compliance with the Sarbanes-Oxley Act as considers trends in remuneration, legislative
enhanced its internal processes and is further well as the internal control and risk manage- changes, disclosure rules and the general
analyzing the impact on its current allegation ment process and monitored and evaluated global executive remuneration environment.
management process to meet further require- the effectiveness and appropriateness of It reviews salary survey data before preparing
ments entering into force during 2022 particu- Ericsson’s E&C Program. salary adjustment recommendations for the
larly in relation to the implementation of local President and CEO for resolution by the Board
channels as a new option to reporters, in addi- Finance Committee and before approving any salary adjustments
tion to the Compliance Line. The Finance Committee is responsible for for the other members of the Executive Team.
More information on reporting compliance preparing for resolution by the Board, matters
concerns can be found on page 33–34 of the related to the finance strategy such as capital Members of the Remuneration Committee
Sustainability and Corporate Responsibility structure, capital targets, rating strategy and The Remuneration Committee appointed by
report. treasury operations. the Board in connection with the AGM 2022
consists of four Board members: Jon Fredrik
Members of the Audit and Compliance Members of the Finance Committee Baksaas (Chair), Kurt Jofs, Ronnie Leten and
Committee The Finance Committee consists of four Kjell-Åke Soting (employee representative).
The Audit and Compliance Committee Board members appointed by the Board The Board has appointed shareholder elected
consists of four Board members appointed by in connection with the AGM 2022: Ronnie Board members to the Committee with experi-
the Board in connection with the AGM 2022: Leten (Chair), Anders Ripa (employee ences from different markets of relevance to
Eric A. Elzvik (Chair), Jan Carlson, Kurt Jofs, representative), Helena Stjernholm and the Group.
and Torbjörn Nyman (employee representa- Jacob Wallenberg. The Board has appointed During the year 2022, Peter Boreham from
tive). The Board has appointed shareholder shareholder elected Board members with Mercer advised and assisted the Remuneration
elected Board members with CFO or CEO extensive industrial and financial experience Committee as an independent expert.
experience to the Committee. to the Committee.
The composition of the Audit and Work of the Remuneration Committee
Compliance Committee meets all applicable Work of the Finance Committee in 2022 in 2022
independence requirements, including the The Finance Committee held four meetings in The Remuneration Committee held ten meet-
conditions for reliance on an exemption for 2022. Board members’ attendance is reflected ings in 2022. Director’s attendance is reflected
employee representatives. The Board of in the table on page 11. During 2022, the in the table on page 11.
The Remuneration Committee reviewed – Reviewing and preparing for consideration Remuneration to Board members
and prepared a proposal for LTV 2022 for the and/or resolution by the Board, matters Remuneration to Board members not employed
Executive Team, for resolution by the Board related to science direction and influence by the Company is proposed by the Nomination
and further approval by the AGM 2022. It on a geopolitical level. Committee for resolution by the AGM.
further resolved on salaries and STV 2022 for The AGM 2022 approved the Nomination
the members of the Executive Team (other Members of the Technology and Science Committee’s proposal for fees to non-
than the President and CEO), reviewed the Committee employee Board members for Board and
vesting results for LTV 2019 and result of the The Technology and Science Committee Committee work. For further information on
2021 EBIT (Group operating income) perfor- consists of five Board members appointed by Board of Directors’ fees 2022, please refer to
mance condition for LTV 2021, and prepared the Board in connection with the AGM 2022: Notes to the consolidated financial statements
proposals regarding remuneration to the Kristin S. Rinne (Chair), Jan Carlson, Nora – note G2 “Information regarding members
President and CEO for resolution by the Board. Denzel, Kurt Jofs and Anders Ripa (employee of the Board of Directors and Group manage-
It reviewed the implementation of Guidelines representative). The Board has appointed ment” in the Financial Report.
for remuneration to Group management in Board members to the Committee with exten- The shareholders at the AGM 2022 also
2022 and proposed changes for resolution by sive experience within technology. approved the Nomination Committee’s pro-
the Board. It also proposed the Remuneration posal that Board members may be paid part of
Report 2021 to be approved by the Board and Work of the Technology and Science their Board fee in the form of synthetic shares.
subsequently referred to the AGM 2022 for Committee in 2022 A synthetic share gives the right to receive
adoption. The Technology and Science Committee a future cash payment of an amount which
For further information on fixed and vari- held four meetings in 2022. Board members’ corresponds to the market value of a Class B
able remuneration, please see Notes to the attendance is reflected in the table below. The share in Ericsson at the time of payment. The
consolidated financial statements – note G2 Technology and Science Committee has dur- Board members’ right to receive payment with
Information regarding members of the Board ing the year reviewed selected focus areas: regard to allocated synthetic shares occurs,
of Directors and Group management and note – Radio network evolution as a general rule, after the publication of the
G3 “Share-based compensation” in the – Network management and orchestration Company’s year-end financial statement
Financial report and the Remuneration report. – Enterprise network technologies during the fifth year following the General
– Product security Meeting that resolved on the allocation of the
Technology and Science Committee – Virtual and augmented reality technology synthetic shares. The purpose of paying part
The responsibilities of the Technology and evolution of the Board of Directors’ fee in the form of
Science Committee include: – Industry development in hardware and synthetic shares is to further align the Board
– Reviewing and preparing for consideration software. members’ interests with shareholder interests.
and/or resolution by the Board, matters For more information on the terms and condi-
related to technology strategy and plan- tions of the synthetic shares, please refer to
ning for the Group, monitoring the Group’s the notice convening the AGM 2022 and to
technology ecosystem, relationships and the minutes from the AGM 2022, which are
partnerships available at Ericsson’s website.
Board members’ attendance and fees 2022

Fees resolved by the AGM 2022 Number of Board/Committee meetings attended in 2022
Audit and Tech. and
Board fees, Committee fees, Compliance- Finance Remun. Science
Board member SEK 1) SEK Board Committee ommittee Committee
C Committee
Ronnie Leten 4,375,000 385,000 29 4 10
Helena Stjernholm 1,100,000 180,000 29 4
Jacob Wallenberg 1,100,000 180,000 29 4
Jon Fredrik Baksaas 1,100,000 205,000 28 10
Jan Carlson 1,100,000 455,000 29 15 4
Nora Denzel 1,100,000 180,000 28 4
Carolina Dybeck Happe 4) 1,100,000 – 19
Börje Ekholm – 2) – 29
Eric A. Elzvik 1,100,000 475,000 29 15
Kurt Jofs 1,100,000 635,000 29 15 10 4
Kristin S. Rinne 1,100,000 205,000 27 4
Torbjörn Nyman 43,500 3) 22,500 3) 29 15
Anders Ripa 4) 43,500 3) 12,000 3) 29 4 4
Kjell-Åke Soting 43,500 3) 15,000 3) 29 10
Ulf Rosberg 43,500 3) – 29
Loredana Roslund 43,500 3) – 29
Annika Salomonsson 5) 28,500 3) – 19
Total number of meetings 29 15 4 10 4
1) Non-employee Directors can choose to receive part of their Board fee (exclusive of Committee fees) in the form of synthetic shares.
2) Board member remuneration resolved by the AGM is only for non-employee Directors elected by the shareholders.
3) Employee representative Board members and their deputies are not entitled to a Board fee, but instead get paid compensation in the amount of SEK 1,500 per attended Board and Committee meeting.
4) Elected member of the Board at the AGM held on March 29, 2022.
5) Appointed deputy employee representative Board member as of March 29, 2022.
Members of the Board of Directors
Board members elected by the AGM 2022
Ronnie Leten Helena Stjernholm Jacob Wallenberg Jon Fredrik Baksaas

Chair of the Board of Directors, Chair Deputy Chair of the Board of Deputy Chair of the Board of Directors, Chair of the Remuneration
of the Finance Committee, Member Directors, Member of the Finance Member of the Finance Committee Committee
of the Remuneration Committee Committee
First elected First elected First elected First elected
2018 2016 2011 2017
Born Born Born Born
1956 1970 1956 1954
Education Education Education Education
Master of Science in Applied Master of Business Administration, Bachelor of Science in Economics and Master of Science in Economics, NHH
Economics, University of Hasselt, Stockholm School of Economics, Master of Business Administration, Norwegian School of Economics and
Belgium. Sweden. Wharton School, University of Business Administration, Norway.
Pennsylvania, USA. Officer of the
Reserve, Swedish Navy.
Nationality Nationality Nationality Nationality
Belgium Sweden Sweden Norway
Board Chair Board Chair Board Chair Board Chair
Epiroc AB and Ellimetal N.V. – Investor AB and the Confederation of DNV GL Group AS
Swedish Enterprise
Deputy Board Chair
ABB Ltd., FAM, Patricia Industries and
Wallenberg Investments AB
Board Member Board Member Board Member Board Member
– AB Industrivärden, AB Volvo and The Knut and Alice Wallenberg Svenska Handelsbanken AB.
Sandvik AB Foundation
Holdings in Ericsson Holdings in Ericsson Holdings in Ericsson Holdings in Ericsson

100,000 Class B shares 1), 128,452 20,060 Class B shares 1) 427,703 Class B shares 1) and 45,326 36,676 synthetic shares 3).
call options 2) and 94,954 synthetic and 30,216 synthetic shares 3). synthetic shares 3).
shares 3).
Principal work experience Principal work experience Principal work experience Principal work experience
and other information and other information and other information and other information
President and CEO of Atlas Copco President and CEO of AB Chair of the Board of Investor AB since President and CEO of Telenor Group
AB (2009–2017) and various Industrivärden since 2015. Partner in 2005. President and CEO of SEB in 1997 (2002–2015). Previous positions
leadership positions within the Atlas the private equity firm IK Investment and Chair of SEB’s Board of Directors within the Telenor Group since 1989,
Copco Group (1997–2009) and Partners (2008–2015). Investment (1998–2005). Executive Vice President including Deputy CEO, CFO and CEO
(1985–1995). Previous positions Manager at IK Investment Partners and CFO of Investor AB (1990–1993). of TBK AS. Positions before Telenor
include plant manager of Tenneco (1998–2008). Previous experience Honorary Chair of IBLAC (Mayor of include CFO of Aker AS, finance
Automotive Inc., Belgium, as consultant for Bain & Company Shanghai’s International Business director of Stolt Nielsen Seaway AS
(1995–1997) and various positions (1997–1998). Leaders Advisory Council) and member and controller at Det Norske Veritas,
within General Biscuits (1979–1985). of the steering committee of the Norway and Japan. Member of the
European Round Table of Industrialists, GSMA Board (2008–2016) and
Deputy Chair of the Swedish-American Chair of the GSMA Board
Chamber of Commerce US, member (2014–2016).
of the International Advisory Board of
the Atlantic Council, Washington DC,
member of the International Business
Council of the World Economic Forum,
Trilateral Commission and the Advisory
Board of Tsinghua Management School.
The Board memberships and holdings in Ericsson reported above are as of December 31, 2022.
1) The number of shares and ADS includes holdings by related persons, if applicable.
2) Call options issued by Investor AB entitling to purchase Ericsson Class B shares.
3) Since 2008, the AGM has each year resolved that part of the Board fee may be received in the form of synthetic shares. A synthetic share is a right to receive in the future a payment corresponding to the value of
the Class B share in Ericsson at the time of payment. Please see page 11 for further information.
Jan Carlson Nora Denzel Carolina Dybeck Happe Börje Ekholm

Member of the Audit and Compliance Member of the Technology and Member of the Board President, CEO and Member of the
Committee and the Technology and Science Committee Board
Science Committee
First elected First elected First elected First elected
2017 2013 2022 2006
Born Born Born Born
1960 1962 1972 1963
Education Education Education Education
Master of Science degree in Master of Business Administration, Master of Science in Business and Master of Science in Electrical
Engineering Physics and Electrical Santa Clara University, USA. Economics, Uppsala University, Engineering, KTH Royal Institute of
Engineering, Linköping University, Bachelor of Science in Computer Sweden. Technology, Stockholm, Sweden.
Sweden. Science, State University of New Master of Business Administration,
York, USA. INSEAD, France.
Nationality Nationality Nationality Nationality
Sweden USA and Ireland Sweden Sweden and USA
Board Chair Board Chair Board Chair Board Chair
Autoliv Inc. – – –
Board Member Board Member Board Member Board Member

AB Volvo Advanced Micro Devices Inc., – Trimble Inc.
NortonLifeLock Inc. and SUSE
Holdings in Ericsson Holdings in Ericsson Holdings in Ericsson Holdings in Ericsson

7,900 Class B shares 1) and 45,326 3,850 ADS 1) and 15,106 synthetic 36,100 Class B shares 1) and 260,351 Class B shares, 1,009,000
synthetic shares 2). shares 2) 10,003 synthetic shares 2). ADS 1) and 2,000,000 call options 3).
Principal work experience Principal work experience Principal work experience Principal work experience
and other information and other information and other information and other information
Chair and President and CEO of CEO (interim) of Outerwall Inc. CFO of GE since 2020. Group CFO President and CEO of
Veoneer Inc. (2018-2022). President (January 2015–August 2015). of A.P. Moller - Maersk A/S Telefonaktiebolaget LM Ericsson
and CEO of Autoliv Inc. (2007–2018) Senior Vice President Big Data, (2019–2020). Group CFO of ASSA since 2017. CEO of Patricia
and Chair of Autoliv Inc. since Marketing and Social Product Design ABLOY (2012–2018) as well as Industries, a division within Investor
2014. Previous positions within the and General Manager QuickBooks CFO for Europe, the Middle East and AB (2015–2017). President and
Autoliv Group since 1999, including Payroll Division (2008–2012). Africa (2007–2011) and CFO for CEO of Investor AB (2005–2015).
President Autoliv Europe, Vice Previous positions include Senior Central Europe (2002–2006). Group Formerly Head of Investor Growth
President Engineering of Autoliv Vice President and General Manager CFO of Trelleborg Group (2011–2012). Capital Inc. and New Investments.
and President Autoliv Electronics. of HP’s Global Software, Storage CFO of Establish (2000–2002). Previous positions at Novare Kapital
Previous positions include President and Consulting Divisions Various positions at EF Education AB and McKinsey & Co Inc. Holds
of Saab Combitech and of Swedish (2000–2006), Senior Vice President First (1996–1999). honorary Doctorate at KTH Royal
Gate Array. Honorary Doctor at Product Operations Legato Systems Institute of Technology, Sweden.
the Technical faculty of Linköping (bought by Dell EMC) and various Since 2017, member of the Steering
University. engineering, marketing and Committee of the World Economic
executive positions at IBM. Non- Forum Digital Communication
Profit board member of the National Governors. Member of the Board of
Association of Corporate Directors. the Swedish-American Chamber of
Commerce New York.
2) Since 2008, the AGM has each year resolved that part of the Board fee may be received in the form of synthetic shares. A synthetic share is a right to receive in the future a payment corresponding to the value of
the Class B share in Ericsson at the time of payment. Please see page 11 for further information.
3) Call options issued by AB Industrivärden (1,000,000 call options) and Investor AB (1,000,000 call options), each entitling the purchase of one Ericsson B share from AB Industrivärden/Investor AB respectively
(further information is available in the Notes to the consolidated financial statements – note G2 “Information regarding members of the Board of Directors and Group management” in the Financial Report).
Board members elected by the AGM 2022, cont’d.
Eric A. Elzvik Kurt Jofs Kristin S. Rinne

Chair of the Audit and Compliance Member of the Remuneration Chair of the Technology and Science
Committee Committee, the Audit and Committee
Compliance Committee and the
Technology and Science Committee
First elected First elected First elected
2017 2018 2016
Born Born Born
1960 1958 1954
Education Education Education
Master of Business Administration, Master of Science in Engineering, Bachelor of Arts, Washburn
Stockholm School of Economics, Royal Institute of Technology, University, USA.
Sweden. Stockholm, Sweden.
Nationality Nationality Nationality
Sweden and Switzerland Sweden USA
Board Chair Board Chair Board Chair
Global Connect Group – –
Board Member Board Member Board Member
Landis+Gyr Group AG and AB Volvo AB Volvo, Feal AB and Arjeplog Hotel Synchronoss
Silverhatten AB
Holdings in Ericsson Holdings in Ericsson Holdings in Ericsson
10,000 Class B shares 1) 50,450 Class B shares 1) and 22,712 20,674 synthetic shares 2).
and 15,106 synthetic shares 2) synthetic shares 2).
Principal work experience Principal work experience Principal work experience
and other information and other information and other information
CFO and member of the Group Entrepreneur and investor with Previously Senior Vice President,
Executive Committee of ABB Ltd extensive experience in various Network Technology, Network
(2013–2017). Division CFO ABB industries. Previous positions Architecture and Planning, at AT&T
Discrete Automation & Motion include Executive Vice President (2007–2014). CTO of Cingular
(2010–2012) and division CFO and responsible for Ericsson’s Wireless (2005–2007) and VP
Automation Products Division Networks business (2003–2008), Technology and New Product
(2006–2010). Previous positions CEO of Segerström & Svensson Development of Cingular Wireless
within the ABB Group since 1984, (1999–2001). CEO of Linjebuss (2000–2005). Previous positions
including senior management (1996–1999), and various positions within Southwestern Bell and SBC
positions within finance, M&A and within ABB and Ericsson. (1976–2000). Trustee of Washburn
new ventures. Currently, senior University Foundation. Member of
industrial advisor the Advisory Board of Link Labs.
to EQT. Honorary Doctorate of Science,
Washburn University, USA.
1) The number of shares and ADS includes holdings by related person, if applicable.
2) Since 2008, the AGM has each year resolved that part of the Board fee may be received in the form of synthetic shares. A synthetic share is a right to receive in the future a payment corresponding to the value
of the Class B share in Ericsson at the time of payment. Please see page 11 for further information.
Board members and deputies appointed by the trade unions
Torbjörn Nyman Anders Ripa Kjell-Åke Soting

Employee representative, Member of Employee representative, Member Employee representative, Member of
the Audit and Compliance Committee of the Finance Committee and of the the Remuneration Committee
Technology and Science Committee
First appointed First appointed First appointed
2017 2017 2016
Born Born Born
1961 1962 1963
Appointed by Appointed by Appointed by
LO, the Swedish Trade Union PTK PTK
Confederation
Sweden Sweden Sweden
34,675 Class B shares 1). 2,560 Class B shares and 9,793 Class B shares 1).
1,708 Class A shares 1).
Employed since Employed since Employed since
1996 1998 1996
Working as ICT Strategic Product Working as Security Advisor for Working as Global SQA Manager
Manager within Business Area Mission Critical Networks within within Business Area Networks.
Networks. Business Area Networks.
Ulf Rosberg Loredana Roslund Annika Salomonsson

Employee representative – Deputy Employee representative – Deputy Employee representative – Deputy
First appointed First appointed First appointed
2021 2017 2022
Born Born Born
1964 1967 1972
Appointed by Appointed by Appointed by
PTK PTK LO
Sweden Sweden Sweden
110 Class B shares 1). 2,271 Class B shares 1). 1,832 Class B shares 1).
Employed since Employed since Employed since
1985 1994 1997–2003 and since 2005.
Working as System Developer within Working as Project Manager within Working as Verification Engineer.
R&D, Business Area Networks. R&D, Business Area Networks.
Börje Ekholm was the only Director who held an operational management position at Ericsson in 2022.
1) The number of shares and ADS reflects ownership as of December 31, 2022 and includes holdings by related persons, if applicable.
Management Business areas are responsible for requirements (including in relation to decision-
The President and CEO and the developing competitive product-led business making and risk management), Ericsson
Executive Team solutions, including both products and services maintains a “management system”, referred
The Board of Directors appoints the President and for investing in research and development to as the Ericsson Group Management System
and CEO and the Executive Vice President(s). for technology and cost leadership. (EGMS). EGMS also allows us to ensure that
The President and CEO is responsible for the Segments have been defined for financial selected ISO standards and certifications are
management of day-to-day operations and reporting purposes based on the business effectively maintained and that the operations
is supported by the other members of the areas. See further information in Note B1, are evaluated and improved continually.
Executive Team. “Segment Information” in the Financial Report. EGMS is founded on ISO 9001 (interna-
The Executive Team members as of Decem- Market areas are responsible for selling tional standard for quality management sys-
ber 31, 2022, are presented on pages 20–25 and delivering customer solutions. Resources tems) and is designed as a dynamic system to
together with the new Senior Vice President, are moved closer to the customers in order to enable Ericsson to adapt to evolving demands
Head of Market Area Europe and Latin establish leading positions in critical markets. and expectations, including new legislation
America, appointed as of February 1, 2023. The Ericsson group is comprised of more as well as customers’ and other stakeholders’
The role of the Executive Team is to: than 200 legal entities, and 79 branch offices, requirements. Ericsson implements external
– Define Group strategies and policies, drive with representation in approximately 150 requirements only after thorough analysis and
corporate agenda and establish a strong countries. after putting them into the Ericsson context.
corporate culture
– Determine targets for operational units, Remuneration to the Executive Team Management and control
allocate resources and monitor unit Guidelines for remuneration to Group man- Our governance framework, as set out above,
performance agement were approved by the AGM 2020. ensures effective management and control of
– Secure operational excellence and realize The Board of Directors proposes that new our operations. As noted, group-wide policies,
global synergies through efficient organi- amended Guidelines for remuneration to directives and instructions govern how the
zation of the Group. Group management is resolved by the Annual organization works, and our approach to risk
General Meeting 2023, which are intended management is summarized below in the
Organizational Structure to remain in place for four years until the section titled “Risk Management”. Further, we
The organizational structure is comprised of: Annual General Meeting 2027. The proposed maintain specific accounting and reporting
central corporate/group functions, five business Guidelines are included on pages 25–27 of procedures to fulfill external reporting require-
areas, and five geographical market areas. the Financial Report. For further information ments.
Central corporate/group functions are on fixed and variable remuneration, see the To ensure that our governance policies are
responsible for managing all corporate and Remuneration Report and note G2, “Infor- aligned and reflective of changing require-
group aspects of the organization, including mation regarding members of the Board of ments and expectations, Ericsson maintains
corporate governance, financial reporting Directors and the Group m anagement” in the a Group Steering Documents Committee that
and capital markets, necessary corporate Financial Report. regularly reviews our policies and directives
and risk management/controls, and for against our Group strategies and values.
providing relevant expertise through the group The Ericsson Group Management System Ericsson’s strategy process includes the whole
(including on legal, finance, compliance, tech- To provide employees with information chain from business intelligence and strategic
nology, c ommunications, security and people associated with our corporate governance and forecasting to deployment of developed
matters). other associated operational expectations and strategies into targets and programs in coor-
Ericsson Group Management System

Customer
Key Stakeholders
Business Environment
Management and Control

Demands and Satisfaction through
Expectations Steering Documents Value Deliverables
Roles and Responsibilities
Operating Model
Strategy
Results
and Risk
Ericsson
Business Process
Performance Performance
Improvement Evaluation
Organization and Resources

Culture
dinated cycles; capturing the overall strategic that Ericsson’s interpretation of standards or introduction of an enhanced approach to risk
direction, market development and progress of requirements are confirmed by a third party management and establishment of a Group
strategy execution. via an assessment activity. Business Risk Committee (BRC) compris-
ISO certificates are issued by a third-party ing executives and co-chaired by the Chief
Ericsson business processes certification body proving that the system is Financial Officer and the Chief Legal Officer.
Ericsson business processes are a set of efficient throughout the operations as well The purpose of these changes is to ensure that
defined Group-wide processes integrated in as compliant to the ISO standards in scope. risks are identified, duly assessed, escalated as
EGMS. They describe how Ericsson delivers Ericsson’s operations are currently certified appropriate, and effectively addressed to ensure
value to customers, proactively and on- to ISO 9001 (Quality), ISO 14001 (Environ- accountability of risk by executives at all levels
demand. Ericsson business processes offer ment), ISO 45001 (Health and Safety) and of the organization. The BRC helps to consider
capabilities to translate customer require- ISO 27001 (Information Security). Selected Ericsson’s overall risk profile, review potential
ments into defined hardware, software, solu- Ericsson units are also certified to TL 9000 risk matters with high impact, and also serves
tions, and services offered by Ericsson. (telecom-specific standard). EGMS is also as a forum to monitor and assess enterprise risk
assessed within the scope of the audit management on a regular basis.
Insider Committee plan of Ericsson’s internal audit function Financial risk management is overseen by
Ericsson has established an Insider Committee (Corporate Audit). the Finance function and governed by a Group
to make assessments relating to the disclosure ISO/management system assessments policy. For further information on financial
of inside information. The Insider Committee were performed up to 2022 by BSI (British risk management, please see Notes to the
comprises the Chief Legal Officer, the Chief Standards Institution), and will in 2023 be consolidated financial statements – note F1
Financial Officer and the Chief Marketing and done by DNV (Det Norske Veritas). Internal “Financial risk management” in the Financial
Communications Officer. audits are performed by the Company’s internal Report.
audit function which reports to the Audit and
Audits, assessments, and certification Compliance Committee.
The purpose of assurance activities such as With a risk-based approach, Ericsson
Governance Strategy
audits and assessments, is to determine the conducts audits of suppliers to secure compli- and Culture
level of compliance and to provide valuable ance with Ericsson’s Code of Conduct for
information for understanding, analyzing, and Business Partners, which includes rules that
continually improving performance, to ensure suppliers to the Ericsson Group must comply ERM
that the EGMS is adequate and effective in with. Ericsson’s external financial audits are Monitoring Framework Assessment
and Treatment
managing Ericsson´s operations. Manage- performed by Deloitte AB.
ment monitors compliance with policies, Different types of assurance as described
directives, instructions, and processes through above have differing scope and rationale. All Communication
internal self-assessment activities within the assurance providers have defined and estab- and Reporting
respective units. This is complemented by lished accountabilities and responsibilities.

internal and external audits and assessments.
To ensure fulfilment of demands and Risk management The existing Ericsson Enterprise Risk Manage-
requirements from customers and other Ericsson is committed to a robust approach to ment (ERM) framework aims to ensure that
stakeholders, Ericsson takes conscious deci- risk management to effectively identify and the Board and management team at all times
sions on certification. Certification means control risks. A key initiative during 2022 is the have a consolidated view of Group risk and that
ERM Process Read more about Risk management on next page.
Group Risk Management

Risk Assessment
Top down Group Prime

Risk Identification Risk Consolidation Risk Selection
Group Function/Market
area/Business area
Scope Bottom up Risk Risk Risk Risk

Definition Risk Identification Analysis Evaluation Treatment Sign-off
Ericsson Business and Financial Planning Process

overall Group risk appetite is regularly assessed. Risk culture Risk Assessment
The above described enhanced approach to Ericsson management continuously communi- The Risk Assessment approach includes the
risk management and the BRC are intended to cates to, and embeds within, the organization maintenance of a risk register for each busi-
complement the ERM framework. the importance of identification and attention ness unit where the risks in each units’ risk
The ERM framework is designed to establish to risk; ensuring that risk is properly assessed registers are assessed on regular base by the
an adequate and effective management of risk, and transparently considered in decision mak- Group Risk Management function; in turn, the
i.e. the uncertainty in achieving the strategic ing, and where appropriate, escalated within Group Risk Management function ensures that
objectives of the Company. The framework the organization for further consideration. The identified risks are escalated to the BRC as
provides methods to assess and treat the risks, BRC provides an appropriate forum for, and required. The Group Risk Management func-
and to agree on and stay within the Company’s support to accountable executives in, assessing tion maintains a consolidated Ericsson risk
risk appetite. The ERM framework is based on management of material risks. register which summaries Group risk.
five elements (illustrated above and described Current risks within the scope of account-
in the following text). It is applied across Strategy ability for the group function, market area and
Ericsson’s operations and covers business Risk management is an important element of business area are identified in a bottom-up
areas, market areas and group functions. The strategic decision making and value creation risk identification process. The appropriate
framework comprises the minimum require- since it captures the opportunities and threats enterprise risk manager, together with the
ments that the units must meet to have a com- that are related to achieving our strategic relevant business leadership team and other
mon basis for ERM to enable transparency and objectives. Ericsson’s risk management activi- personnel in the unit, identify and consider
risk oversight. ties are interconnected with the development risks. These may then be subject to escala-
and deployment of Ericsson’s business plans tion to the BRC according to our Group Risk
Governance and Culture and functional strategies. Protocol. In the top-down risk identification,
Risk Governance the Group Risk Management function col-
Each manager is responsible for effectively Assessment and Treatment laborate with the Strategy Unit and conduct
handling risk that emerges from their respec- Assessment and treatment of risks are done in interviews with senior management, and
tive area of responsibility. The Group Risk accordance with the ERM process (illustrated external experts, to identify and refine the
Management function is responsible for on page 17) that applies to the Group and risks Ericsson faces.
driving the ERM strategy execution and the to all roles with responsibilities with regards The Risk Universe (illustrated below) is
ERM operations at the Group level. The head to risk management activities. It focuses on used to identify emerging risks and secure that
of each group function, market area and busi- ensuring that group functions, market areas all applicable risk categories are covered. Risk
ness area, is accountable for appointing one and business areas consider risk in relation to Descriptions cover event, cause and impact
or several enterprise risk manager(s) to drive strategic objectives and decision making. In (illustrated below). For further information
risk management within the unit’s area of 2022, the Company has continued investing on risks related to Ericsson’s business, see the
responsibility, and for overseeing risk manage- in transactional controls and data analytics, chapter “Risk factors” in the Financial Report.
ment of the respective unit; including ensuring as well as increased monitoring of third-party In the Risk Analysis process step, the
that proper processes are in place to identify, relationships following enhanced initial impact of an identified risk is estimated
duly assess and escalate risks as appropriate. due-diligence. In addition, the Company has considering four dimensions – financial
The CFO and CLO are jointly accountable for expanded anti-corruption risk assessments impact, strategic impact, occupational health
performing oversight of ERM and they co-chair to address country-specific compliance risks, and safety impact, and reputational impact.
the BRC. The Board of Directors and the Audit developed a State-Owned Entities (SOE) Map The key risks in a unit are presented in a heat
and Compliance Committee are responsible for to identify public officials and state-owned cus- map (see example to the right). The heat map
overseeing and reviewing the effectiveness of tomers, expanded on-the-ground, in-country shows the impact and probability for each key
the Company’s approach to risk management compliance officers and increased personnel in risk and enables comparison for all kinds of
and the ERM. compliance and other gate-keeper functions. risks supporting prioritization.
Risk Universe
Intellectual Cyber and Security, safety

Competition M&A People
Property Rights information security and continuity
Governance, Communication
Laws and regulations Geopolitical Customer Accounting
risk and control and marketing
Supply Environment
Treasury Technology Product and service Project execution
and sourcing and climate
Risk Evaluation is done to define the risk Communication and Reporting Risk Heat Map
appetite for each risk i.e., the accepted prob- Risk Communication
Probability
ability and impact rating. The risk appetite for Effective communication is important to
Very high
an individual risk indicates the ambition with enable employees to share information,
treatment plans, hence driving operational collaborate, and support each other in manag-
decisions. ing risks in the business. The enterprise risk
The Group Risk Management function management community has the mission to
High
analyses the risks in Ericsson’s risk register create awareness and, improve knowledge
to identify possibilities for consolidating risks with respect to risk management issues and
cross units based on commonalities: e.g. simi- requirements. Ericsson has established a
Medium
lar treatment plans or root causes. Further, the Group Risk Council to facilitate cross-Group
Group Risk Management function confirms alignment and improvements of the ERM
the consolidation with Enterprise Risk Manag- framework as well as of the management of
ers for applicable units, who are responsible actual risks, chaired by the Head of Group Risk
Low
for further analysis and treatment. Management and in which all enterprise risk
managers participate. Low Medium High Very high
Risk Treatment Impact
For each risk in the units’ risk register, man- Risk Reporting
agement options are considered, i.e. avoid The enterprise risk managers coordinate the The illustration shows an example of the heat map
or accept the risk, mitigate the probability or reporting of key risk status to the leadership used for presenting the key risks in a unit.
impact of the risk, transfer the risk manage- teams within the respective unit on a regular
ment and part of the impact to a third party, or basis. Each unit’s risk register is also reported Monitoring
increase the risk in order to pursue an opportu- to the Group Risk Management function. The Group Risk Management function moni-
nity. Based on the selected option(s), a man- The Heads of market areas and business tors the efficiency and effectiveness of the
agement plan for getting the probability and areas are reporting on the material risks to ERM Framework. This is done through self-
impact within the risk appetite is defined and their business on a quarterly basis to the BRC. assessments but also by providing assessment
described, including references to current or Head of Group Risk Management function requirements regarding risk management to
planned internal controls (illustrated below). reports on the status of Ericsson’s risk register, the ISO 9001 internal assessment process and
Once the risk management plan is imple- and the efficiency and effectiveness of ERM, to follow up on the internal assessment results.
mented, its effectiveness shall be assessed on the BRC twice per year. The Group Risk Management function also
an ongoing basis, and decisions shall be made The Head of the Group Risk Management reviews internal and external audit results
where corrective actions are needed. function reports, in collaboration with the to address identified weaknesses as part of
Prime Risk Owners, the status of the prime the continuous improvements of the ERM
Prime Risk Selection risks to the Executive Team and the Audit and framework.
Ericsson’s prime risks are defined as the identi- Compliance Committee on a regular basis.
fied material risks in the Group. The responsibil- These reports include a heat map overview
ity for each prime risk is allocated to a member and a more detailed reporting of prime risks
of the Executive Team and these risks are given and relevant treatment.
additional attention in terms of analysis and
reporting. The Group Risk Management func-
tion identifies potential prime risks in Ericsson’s
risk register in collaboration with the responsi-
ble units and the Executive Team.
Risk Description Treatment plan
Risk Descriptions are created by answering the following questions: T Treatment plans for the risk are defined by looking at different treatment
options to reduce the probability and impact of the event.
2 1 3
Cause Impact Cause T T Impact
Cause Event Impact Cause T Event T Impact
Cause Impact Cause T T Impact
Why could it happen? What could happen? Why do we care, i.e. what is
the impact on our objectives?
Members of the Executive Team
Börje Ekholm Fredrik Jejdling MajBritt Arfert

President and Chief Executive Officer Executive Vice President, Business Senior Vice President, Chief People
(CEO) (since 2017) Area Networks (since 2017) Officer (CPO) (since 2017)
Functions Functions Functions

President and CEO and Head of Business Area Networks and Head of Group Function People
Head of Segment Enterprise Head of Segment Networks
Born Born Born
1963 1969 1963
Master of Science in Electrical Master of Science in Economics and Bachelor of Human Resources,
Engineering, KTH Royal Institute of Business Administration, Stockholm University of Gothenburg, Sweden.
Technology, Stockholm, Sweden. School of Economics, Sweden.
Master of Business Administration,
INSEAD, France.
Sweden and USA Sweden Sweden
Board Member: Board Member Board Member
Telefonaktiebolaget LM Ericsson and Teknikföretagen and the –
Trimble Inc. Confederation of Swedish Enterprise
Holdings in Ericsson 1) Holdings in Ericsson 1) Holdings in Ericsson 1)
260,351 Class B shares, 1,009,000 73,318 Class B shares. 51,912 Class B shares.
ADS and 2,000,000 call options 2).
Background Background Background
CEO of Patricia Industries, a division Senior Vice President and Head of Acting Head of Group
within Investor AB (2015–2017). Business Unit Network Services Function Human Resources
President and CEO of Investor (2016–2017). Has held a variety of (November 2016–March 2017).
AB (2005–2015). Formerly Head positions in commercial operations Previously Head of Human Resources
of Investor Growth Capital Inc. and financials, including Head of Ericsson Sweden (2015–2016) and
and New Investments. Previous Region Sub-Saharan Africa, Head Vice President and Head of Human
positions at Novare Kapital AB and of Region India, and Head of Sales Resources Business Unit Support
McKinsey & Co Inc. Since 2017, and Finance for Business Unit Global Solutions (2007–2015). Has held
member of the Steering Committee Services. Previous positions include various senior global positions in
of the World Economic Forum senior positions with LUX Asia Pacific Ericsson including Head of Human
Digital Communication Governors. and Tele2 Group. Resources Business Unit Broadband
Member of the Board of the Swedish- Networks, Head of Human Resources
American Chamber of Commerce Microwave Systems as well as a
New York. position as Head of Human Resources
and Internal Communications at Sony
Ericsson Germany.
Changes in the Executive Team
Effective February 1, 2023, Jenny Lindqvist was appointed new Senior Vice President and Head of Northern and Central Europe within Ericsson’s Market Area Europe and Latin America and replacing Stefan
Koetz, who assumed the role as acting on June 1, 2022, after Arun Bansal left his position on May 31, 2022. Effective July 21, 2022, Rory Read was appointed new Senior Vice President and Head of Business Area
Global Communications Platform after the acquisition of Vonage Holdings Corp. (Vonage) and due to that Vonage formed the separate business area Business Area Global Communications Platform of Ericsson.
On May 18, 2022, Ericsson announced changes to the Group structure and Executive Team introducing the new Business Areas; Cloud Software and Services, Enterprise Wireless Solutions, Group Function Global
Operations. Effective June 1, 2022, Per Narvinger was appointed Senior Vice President and Head of Business Area Cloud Software and Services, Moti Gyamlani was appointed Senior Vice President and Head of
Group Function Global Operations and George Mulhern was appointed Senior Vice President and Head of Business Area Enterprise Wireless Solutions and replaced Jan Karlsson, former Head of Business Area
Digital Services, and Peter Laurin, former Head of Business Area Managed Services (Peter Laurin announced his resignation on April 7, 2022). Effective March 21, 2022, Scott Dresser was appointed new Chief
Legal Officer and Head of Group Function Legal Affairs and Compliance replacing Xavier Dedullen, who assumed the role on April 1, 2018.
The Board memberships and Ericsson holdings reported above are as of December 31, 2022.
2) Call options issued by AB Industrivärden (1,000,000 call options) and Investor AB (1,000,000 call options), each entitling the purchase of one Ericsson B share from AB Industrivärden/Investor AB respectively
(further information is available in the Notes to the consolidated financial statements – note G2 “Information regarding members of the Board of Directors and the Group management” in the Financial Report).
Scott Dresser Erik Ekudden Moti Gyamlani

Senior Vice President, Chief Legal Senior Vice President, Chief Senior Vice President, Group
Officer, and secretary of the Board Technology Officer (CTO) Function Global Operations
of Directors of Telefonaktiebolaget (since 2018) (since 2022)
LM Ericsson (since 2022)
Head of Group Function Legal Affairs Head of Group Function Technology Head of Group Function Global
and Compliance Operations
Born Born Born
1967 1968 1973
Juris Doctorate, Vanderbilt University Master of Science in Electrical Master of Business Administration,
Law School, Bachelor of Science Engineering, KTH Royal Institute of Arizona State University, USA, and
Business Administration and Technology, Stockholm, Sweden. Bachelor of Mechanical engineering,
Finance, University of Hampshire. MIT, India.

USA Sweden USA
Birdlife International, Cambridge UK; ASSA ABLOY AB. –
member of Advisory Board.
– 31,888 Class B shares 4,873 Class B Shares
and 9,417 ADS.
Previously Group General Counsel Group Chief Technology Officer and Most recently, Head of Group
at VEON and General Counsel Head of Technology and Architecture Sourcing (2019–2022). Previous
of Virgin Media. Has held senior within Group Function Technology position as Chief Procurement and
leadership positions with BirdLife and Emerging Business (July 2017– Supply Chain Officer and a Chief
International, White Mountains Re March 2018). Joined Ericsson in 1993 Cost Transformation Officer of Airtel
and Conservation International. and has held various management (2012–2019). Leadership positions
Started his career in New York in positions in the company, including include Group Vice President Global
private practice with law firms Lord Head of Technology Strategy, Supply Chain and Sourcing at
Day & Lord and Morgan Lewis, where Chief Technology Officer Americas General Electric Power Conversion,
he specialized in corporate law, in Santa Clara US, and Head of Vice President Global Sourcing at
governance, and M&A. Standardization and Industry. Honeywell, and Executive Director
Member of the Royal Swedish at General Motors. Lived and worked
Academy of Engineering Sciences in across multiple countries and
(IVA). Since 2020, member of markets, including US, France,
the Broadband Commission for Mexico, and India.
Sustainable Development and vice
chairman of IVA’s Näringslivsråd.
Members of the Executive Team, cont’d.
Niklas Heuveldop Chris Houghton Stefan Koetz

Senior Vice President, Market Area Senior Vice President, Market Area Acting Head of Market Area Europe
North America (since 2017) North East Asia (since 2017) and Latin America (since June 1,
2022 until February 1, 2023)
(Not a member of Executive Team)
Head of Market Area North America Head of Market Area North East Asia Acting Head of Market Area Europe
and Latin America
Born Born Born
1968 1966 1962
Master of Science in Industrial Bachelor of Law, Huddersfield Master of Science in
Engineering and Management, the Polytechnic, United Kingdom. Telecommunications, University
Linköping Institute of Technology, Kaiserslautern, Germany.
Sweden.

Sweden United Kingdom and Sweden Germany
The Swedish-American Chamber of – –
Commerce New York and CTIA – US
wireless industry trade association.
82,435 Class B shares 96,963 Class B shares. –
and 14,249 ADS.
Senior Vice President, Chief Strategy Head of Region North East Asia Head of Customer Unit Western
Officer and Head of Group Function (2015–2017). Has also previously Europe, within Market Area Europe
Technology and Emerging Business held management positions within and Latin America. In this role
(April 2017–March 2018). Previous Ericsson, including Head of Region Koetz is responsible for business in
positions include Chief Customer India, Head of Customer Unit UK and Germany, Netherlands, Switzerland
Officer and Head of Group Function Ireland and various management and Liechtenstein. Koetz has been
Sales (2016–2017) and senior positions within Ericsson in China, working in the information and
leadership positions across Europe Hungary, India, Ireland, Japan, communications industry for more
and the Americas, including Head Sweden and the UK. than 20 years. He held various
of Global Customer Unit AT&T management positions, among
and Head of Market Unit Central others at Robert Bosch GmbH and
America and Caribbean. Previous Marconi Communications GmbH.
positions outside Ericsson include
CEO of ServiceFactory and COO of
WaterCove Networks.
Jenny Lindqvist Stella Medlicott Carl Mellander

Senior Vice President, Market Area Senior Vice President, Chief Senior Vice President, Chief Financial
Europe and Latin America (since Marketing and Communications Officer (CFO) (since 2017)
February 1, 2023) Officer (CMO and CCO) (since 2019)

Head of Market Area Europe and Head of Group Function Marketing Head of Group Function Finance
Latin America and Corporate Relations and Common Functions
Born Born Born
1982 1969 1964
Master of Science in Business and Bachelors of Arts (Hons) degree in Bachelor of Arts in Business
Economics from Stockholm School of Social Science, University of Lincoln Administration and Economics,
Economics (SSE). (known at that time as University of Stockholm University, Sweden; and
Humberside), United Kingdom and East- and South East Asia Program,
Postgraduate Diploma in Marketing, Lund University, Sweden.
Chartered Institute of Marketing,
United Kingdom.
Sweden United Kingdom Sweden
TechSverige – International Chamber of Commerce
(ICC) Sweden

772 Class B shares. 7,842 Class B shares. 92,837 Class B shares.

Head of Northern and Central Europe Vice President of Marketing, Acting Chief Financial Officer
within Market Area Europe and Latin Communications and Government and Head of Group Function
America. Previous management Relations for Ericsson Market Finance and Common Functions
positions within Ericsson Business Area Europe and Latin America (July 2016–March 2017). Previous
Area and Market Area organizations (July 2017–June 2019). Prior to positions within Ericsson include Vice
include Head of Global Customer joining Ericsson, Stella Medlicott President and Group Treasurer, and
Unit Telia Company, Head of Solution was Chief Marketing Officer at Red Head of Finance in Region Western
Line Intelligent Transport Systems, Bee Media, which was acquired by and Central Europe. Also held Head
Key Account Manager Telenor, Ericsson in May 2014. She has over of Finance/CFO positions within the
Managed Services Engagement Lead 25 years of marketing experience telecom operator space and defence
and Business Manager Multimedia. in major IT, telecoms and media industry.
Previous positions outside Ericsson companies including two years at
include roles in management Technicolor as VP Marketing and ten
consulting in France and Sweden, years at Siemens Communications as
as well as in Pharmaceuticals in the Global VP Marketing.
Philippines.
Members of the Executive Team, cont’d.
Nunzio Mirtillo George Mulhern Per Narvinger

Senior Vice President, Market Area Senior Vice President, Business Area Senior Vice President, Business Area
South East Asia, Oceania and India Enterprise Wireless Solutions Cloud Software and Services
(since 2017) (since 2022) (since 2022)
Head of Market Area South East Asia, Head of Business Area Enterprise Head of Business Area Cloud
Oceania and India Wireless Solutions and CEO of Software and Services and
Cradlepoint Head of Segment Cloud Software
and Services
Born Born Born
1961 1956 1974
Master in Electronic Engineering, Bachelor of Science and Master of Master of Science in Electrical
Sapienza University, Italy. Business Administration, San Jose Engineering, Royal Institute of
State University (USA). Technology (KTH), Sweden.

Italy USA Sweden
– Regence Blue Shield of Idaho, –
Cambia Health Solutions and Focus
IP, Inc. dba Tracer.
81,389 Class B shares. – 8,271 Class B shares.

Previously Head of Region CEO at Cradlepoint when it was Head of Product Area Networks,
Mediterranean. Previous acquired by Ericsson in 2020. Business Unit Networks
management positions within Previously general partner at (2018– 2022). Head of Customer
Ericsson include Head of Sales Highway 12 Ventures, a venture Unit Northern and Central Europe,
Networks for Western Europe within capital firm making investments in Market Area Europe and Latin
Business Unit Networks, Head of early-stage technology companies. America (2017–2018). Has held
Business Operations in Market Unit Held various leading positions a variety of senior management
South East Europe and Key Account during a long tenure at Hewlett positions in Ericsson since 1997,
Manager for Wind Italy, Vodafone Packard Company, including senior spanning R&D line management,
Italy and other customers. vice president, leading the LaserJet Head of Customer Solutions
Global Business Unit. (Australia and Spain) and Product
Management.
Fadi Pharaon Rory Read Åsa Tamsons

Senior Vice President, Market Area Senior Vice President, Business Area Senior Vice President, Business Area
Middle East and Africa (since 2019) Global Communications Platform Technologies and New Businesses
(since 2022) (since 2018)
Head of Market Area Middle East Head of Business Area Global Head of Business Area Technologies
and Africa Communications Platform and and New Businesses and Head of
CEO of Vonage Segment Other
Born Born Born

1972 1961 1981
Master of Science in Computer Bachelor of Information Sciences, Master of Business Administration,
Science, KTH Royal Institute of Hartwick College, New York. Stockholm School of Economics,
Technology, Sweden and a Master Sweden.
of Business Administration, Heriot
Watt University, Edinburgh Business
School, Scotland.
Sweden and Lebanon USA Sweden
– – CNH Industrial

342 Class B shares 57,390 Class B shares. 35,311 Class B shares.
and 1,166 ADS.
Vice President of Networks and Read has more than three decades Head of Business Area Technology
Managed Services (presales and of global technology industry and Emerging Business
commercial management) within experience and has been CEO of (April–September 2018) and Group
Market Area Europe and Latin Vonage since July 2020. Vonage was Strategy and M&A. Previously
America. Previous management acquired by Ericsson in July 2022. Partner at McKinsey & Company,
positions within Ericsson include Previously, Read was Chief Operating serving high-tech and
Head of Presales and Strategy for Executive of Dell Technologies, CEO telecommunications companies
Ericsson Region South East Asia and and President of Dell’s Virtustream, worldwide on growth strategies,
Oceania, and Country Manager for and EVP of Dell Boomi. Read also digital and commercial
Ericsson Singapore and Brunei. served as Chief Integration Officer transformations. Before joining
of the USD 67 billion merger of Dell Ericsson lived and work in the US,
and EMC – the largest tech merger in Brazil, France, Sweden and
history. Earlier, he was CEO, President Singapore.
and Board member of Advanced
Micro Devices and Chief Operating
Officer and President at Lenovo
following 23 years at IBM.
Auditor Internal control over financial reporting – Timely – with regularly scheduled disclo-
According to the articles of association, the This section has been prepared in accordance sures as well as ad-hoc information, such
Parent Company shall have no less than one with the Annual Accounts Act and the Swedish as press releases on important events,
and no more than three registered public Corporate Governance Code and is limited to performed in a timely manner
accounting firms as external independent internal control over financial reporting. – Fair and equal – where all material infor-
auditor. Ericsson’s auditor is currently Since Ericsson is listed in the US, the mation is published via press releases to
appointed each year at the AGM for a one-year requirements outlined in the Sarbanes-Oxley ensure that the whole investor community
mandate period. The auditor reports to the Act (SOX) apply, subject to certain exceptions. receives the information at the same time
shareholders at General Meetings. These regulate the establishment and mainte- – Complete – free from material errors and
The duties of the auditor include: nance of internal control over financial report- a reflection of best practice – disclosures
– Updating the Board of Directors regarding ing as well as management’s assessment of compliant with applicable financial report-
the planning, scope and content of the the effectiveness of the controls. ing standards and listing requirements and
annual audit work In order to support high-quality report- in line with industry norms.
– Reviewing the interim reports to assess ing and to meet the requirements of SOX,
that the financial statements are presented the Company has implemented detailed Ericsson’s website comprises comprehensive
fairly in all material respects and providing documented controls and testing, and report- information about the Group, including:
review opinions over the interim reports for ing procedures based on the internationally – An archive of annual and interim reports
the third and fourth quarters and the year- established 2013 COSO framework for inter- – Access to recent news.
end financial statements nal control. The COSO framework is issued by
– Providing an audit opinion over the Annual the Committee of Sponsoring Organizations of Disclosure controls and procedures
Report the Treadway Commission (COSO). Ericsson has controls and procedures in place
– Advising the Board of Directors of non- Management’s internal control report, to allow for timely disclosure in accordance
audit services performed, the consideration according to SOX, will be included in Ericsson’s with applicable laws and regulations, includ-
paid and other issues that determine the Annual Report on Form 20-F and filed with ing the (EU) Market Abuse Regulation, the
auditor’s independence. the SEC in the US. U.S. Securities Exchange Act of 1934, and
under agreements with Nasdaq Stockholm
Auditing work is carried out by the auditor Disclosure policies and Nasdaq New York. These procedures also
continuously throughout the year. For further Ericsson’s financial reporting and disclosure require that such information is provided to
information on the contacts between the policies follow the International Financial management, including the President and
Board and the auditor, please see “Work of the Reporting Standards (IFRS) and aim to ensure CEO and the CFO, so timely decisions can be
Board of Directors” earlier in this Corporate transparent, relevant and consistent com- made regarding the required disclosures.
Governance report. munication with equity and debt investors on The Disclosure Committee assists manage-
a timely, fair and equal basis. This will support ment in fulfilling their responsibility regarding
Current auditor a fair market value for Ericsson securities. disclosures made to the shareholders and the
Deloitte AB was reappointed auditor at the Ericsson wants current and potential investors investment community. One of the main tasks
AGM 2022 for a period of one year, i.e. until to have a good understanding of how the of the committee is to monitor the integrity
the close of the AGM 2023. Deloitte AB has Company works, including operational perfor- and effectiveness of the disclosure controls
appointed Thomas Strömberg, Authorized mance, prospects and potential risks. and procedures. The Disclosure Committee
Public Accountant, to serve as auditor in To achieve these objectives, financial comprises members with various expertise
charge. reporting and disclosure must be: including representation from the segments.
– Transparent – enhancing understanding Ericsson has investments in certain entities
Fees to the auditor of the economic drivers and operational that the Company does not control or manage.
Ericsson paid the fees (including expenses) performance of the business, building trust With respect to such entities, disclosure con-
for audit-related and other services listed in and credibility trols and procedures are substantially more
the table in note H5, “Fees to auditors” in the – Consistent – comparable in scope and limited than those maintained with respect to
Financial Report. level of detail to facilitate comparison subsidiaries.
between reporting periods Controls and procedures, no matter how
– Simple – to support the understanding of well designed and operated, can only provide
the business operations and performance, reasonable assurance of achieving the desired
and to avoid misinterpretations control objectives. Ericsson’s President and
– Relevant – with focus on what is relevant CEO and the CFO evaluated the Company’s
to Ericsson’s stakeholders or required by disclosure controls and procedures and con-
regulation or listing agreements, to avoid cluded that they were effective at a reason-
information overload able assurance level as of December 31, 2022.
Internal control over financial reporting The most essential parts of the control envi- financial closing and reporting process has
Ericsson has integrated risk management and ronment relative to financial reporting are controls regarding recognition, measurement,
internal control over financial reporting into included in steering documents and processes and disclosure. These include the application
its business processes. As defined in the COSO for accounting and financial reporting. These of critical accounting policies and estimates,
framework, internal control is an aggregation steering documents are updated regularly to in individual subsidiaries as well as in the
of components such as a control environment, include, among other things: consolidated accounts.
risk assessment, control activities, information – Changes to laws Regular analyses of the financial results
and communication and monitoring. – Financial reporting standards and listing for each subsidiary, region and business unit
The control framework is updated regularly requirements, such as IFRS and SOX. cover the significant elements of assets, liabili-
to reflect relevant changes in processes, tools ties, revenues, costs and cash flow. Together
usage, outcome of risk assessments, changes The processes include specific controls to be with further analysis of the consolidated
in legislations, etc. Continuous enhancements performed to ensure high-quality financial financial statements performed at Group level,
are initiated to strengthen and risk-adapt the reports. The management of each reporting these procedures are designed to produce
design of the controls and the efficiency of legal entity, region and business unit is sup- financial reports without material errors.
the internal control over financial reporting. ported by finance functions in the execution of For external financial reporting purposes,
The scope of the enhancements covers both controls related to transactions and reporting. the Disclosure Committee performs additional
business process controls and IT controls. The finance functions are organized in Com- control procedures to review whether the
The Company completed the acquisition of pany Control and Business Shared Services disclosure requirements are fulfilled.
Vonage on July 21, 2022. As permitted by Hubs/Centers, each supporting a number of The Company has implemented controls
the SEC rules and regulations management’s legal entities within a geographical area. A to ensure that financial reports are prepared
assessment did not include the internal control financial controller function is also established in accordance with its internal accounting and
of the acquired operations of Vonage which on Group level, reporting to the CFO. For larger reporting policies, and IFRS as well as with
are included in our consolidated financial acquisitions, the main finance functions and the relevant listing regulations. It maintains
statements as of December 31, 2022 and for the control execution of the acquired entity detailed documentation on internal controls
the period from the acquisition date through remain at the entity and enter into close col- related to the accounting and financial report-
December 31, 2022. In accordance with laboration with the Group finance functions. ing. It also keeps records on the monitoring of
our integration activities, we plan to assess the execution and results of such controls. This
the Vonage’s internal control over financial Risk assessment allows the President and CEO and the CFO to
reporting control framework within the time Risks of material misstatements in the finan- assess the effectiveness of the controls in a
period provided by applicable SEC rules and cial reporting may exist in relation to recogni- way that is compliant with SOX.
regulations. tion and measurement of assets, liabilities, Entity-wide controls, focusing on the
The Company continued to adapt its work- revenue and cost or insufficient disclosure. control environment and compliance with
place practices globally due to the COVID-19 Other risks related to financial reporting financial reporting policies and directives,
pandemic, resulting in a hybrid work environ- include fraud, loss or embezzlement of assets are implemented in the subsidiaries. Detailed
ment; this has not significantly affected the and undue favorable treatment of counter process controls and documentation of con-
Company’s internal control over financial parties at the expense of the Company. trols performed are also implemented in the
reporting. Policies and directives regarding account- significant subsidiaries or operational units
ing and financial reporting cover areas of covering these subsidiaries, covering the items
Control environment particular significance to support correct, with significant materiality and risk.
The Company’s internal control structure is complete and timely accounting, reporting In order to secure compliance, govern-
based on the division of tasks between the and disclosure. ance and risk management in the areas of
Board of Directors and its Committees and Identified types of risks are mitigated legal entity accounting and taxation, as well
the President and CEO. The Company has through well-defined business processes with as securing funding and equity levels, the
implemented a management system that integrated risk management activities, segre- Company operates through Company Control
is based on: gation of duties and appropriate delegation and Business Shared Services Hubs/Centers,
– Steering documents, such as policies and of authority. This requires specific approval of covering subsidiaries in each geographical
directives, and the Code of Business Ethics material transactions and ensures adequate area.
– A strong corporate culture asset management. Based on a common IT platform, a com-
– The Company’s organization and mode mon chart of accounts and common master
of operations, with well-defined roles and Control activities data, the Company Control and Business
responsibilities and delegations of authority The Company’s business processes include Shared Services Hubs/Centers perform
– Several well-defined Group-wide processes financial controls regarding the approval and accounting and financial reporting services
for planning, operations and support. accounting of business transactions. The for most subsidiaries.
Information and communication – Are conducted by Group or local manage- tors. Compliance with policies and directives is
The Company’s information and communica- ment, and monitored through annual self-assessments
tion channels support complete, correct and – Relate to corruption, questionable account- and representation letters from company
timely financial reporting by making all rel- ing, deficiencies in the internal control of heads and company controllers in subsidiaries
evant internal process instructions and policies accounting or auditing matters, or other- as well as in business areas and market areas.
accessible to all the employees concerned. wise seriously affect vital interests of the The Company’s financial performance
Regular updates and briefing documents Group or personal health and safety. is also reviewed at Board meetings. The
regarding changes in accounting policies, Committees of the Board fulfill important
reporting and disclosure requirements are also Monitoring monitoring functions regarding remuneration,
supplied. The Company’s process for financial reporting loans, investments, customer finance, cash
Subsidiaries and operating units prepare is reviewed annually by management. This management, financial reporting and internal
regular financial and management reports forms a basis for evaluating the internal man- control. The Audit and Compliance Committee
for internal steering groups and Company agement system and internal steering docu- and the Board of Directors review all interim
management. These include analysis and ments to ensure that they cover all significant and annual financial reports before they are
comments on financial performance and areas and risks related to financial reporting. released to the market. The Company’s inter-
risks. The Board of Directors receives financial The management of the Company Control and nal audit function reports directly to the Audit
reports monthly. Ericsson has established a Business Shared Services Hubs/Centers (and and Compliance Committee. The Audit and
whistleblower tool, the Ericsson Compliance of the companies handled outside Company Compliance Committee also receives regular
Line, that can be used for the reporting of Control and Business Shared Services Hubs/ reports from the external auditor. The Audit
alleged violations that: Centers) continuously monitor accounting and Compliance Committee follows up on any
quality through a set of performance indica- actions taken to improve or modify controls.
Board of Directors

Org. no. 556016-0680
Auditor’s report on the

Corporate Governance report
To the general meeting of the shareholders in Telefonaktiebolaget LM Ericsson (publ) corporate identity number 556016-0680
Engagement and responsibility c onducted in accordance with International Standards on Auditing and
It is the board of directors who is responsible for the corporate govern- generally accepted auditing standards in Sweden. We believe that the
ance report for the financial year January 1, 2022–December 31, 2022 examination has provided us with sufficient basis for our opinions.
on pages 1–28 and that it has been prepared in accordance with the
Annual Accounts Act. Opinions
A corporate governance report has been prepared. Disclosures in
The scope of the audit accordance with chapter 6 section 6 the second paragraph points 2–6
Our examination has been conducted in accordance with FAR’s stand- the Annual Accounts Act and chapter 7 section 31 the second paragraph
ard RevR 16 The auditor’s examination of the corporate governance the same law are consistent with the annual accounts and the consoli-
report. This means that our examination of the corporate govern- dated accounts and are in accordance with the Annual Accounts Act.
ance report is different and substantially less in scope than an audit
Stockholm, March 7th, 2023
Deloitte AB
Thomas Strömberg
Authorized public accountant
Remuneration Part of
Ericsson
Annual Report
report 2022
Annual Report 2022

report
ericsson.com
Contents
Remuneration report 2022

Statement from the Chair of the
Remuneration Committee 1
Introduction 2
Remuneration 2022 at a glance 3
Total remuneration to the President and
CEO and Executive Vice Presidents 5
Variable remuneration 6
Short-term variable compensation (STV) 6
Long-term variable compensation (LTV) 7
Information on guidelines for shareholdings
by Executive Team 12
Deviations from adopted Guidelines for
remuneration to Group Management
(“the Guidelines”) 12
Comparative information on changes in
remuneration and the Company’s performance 13
The report has been prepared in accordance with Chapter 8,

Sections 53a and 53b of the Swedish Companies Act (2005:551)
and the Rules on Executive Remuneration and Incentive Schemes
(1 December 2020) issued by the Swedish Corporate Governance
Board.
Information required by Chapter 5, Sections 40–44 of the Annual
Accounts Act (1995:1554) is included in note G1–G4 in the
Financial report.
Information on the work of the Remuneration Committee in 2022
can be found on pages 10–11 in the Corporate Governance report.
This report may include forward-looking statements, including statements i nformation and statements. Important factors that could affect whether
reflecting the Company’s current views relating to the growth of the market, and to what extent any of our forward-looking statements material-
future market conditions, future events, financial condition, and expected ize include but are not limited to the factors described throughout the
operational and financial performance. Company’s Annual Report for the financial year 2022, including in the
The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “intend”, section Risk Factors of the Company’s Annual Report for the financial year
“likely”, “projects”, “may”, “could”, “plan”, “estimate”, “forecast”, “will”, “should”, 2022. These forward-looking statements also represent our estimates and
“would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”, “might”, assumptions only as of the date that they were made, and to the extent
“continue”, or, in each case, their negative or variations, and similar words they represent third-party data, we have not undertaken to independently
or expressions are used to identify forward-looking statements. Any state- verify such third-party data and do not intend to do so. Given these risks
ment that refers to the Company’s strategy, future financial performance, and uncertainties, readers are cautioned not to place undue reliance on
expectations, projections or other characterizations of future events or such forward-looking statements. We expressly disclaim a duty to provide
circumstances, including any underlying assumptions, are forward-looking updates to these forward-looking statements, and the estimates and
statements. Such statements are based on the Company’s expectations as assumptions associated with them, after the date of this report, to reflect
of the date of this report, unless an earlier date is specified, including expec- events or changes in circumstances or changes in expectations or the occur-
tations based on third-party information and projections that the Company rence of anticipated events, whether as a result of new information, future
believes to be reputable. events or otherwise, except as required by applicable law or stock exchange
We caution investors that these statements are subject to risks and regulation. We maintain website and external voluntary reports that may be
uncertainties many of which are difficult to predict and generally beyond referenced in this report. The information on our website and in our external
our control that could cause actual results to differ materially and adversely voluntary reports is not incorporated by reference in, or otherwise to be
from those expressed in, or implied or projected by, the forward-looking regarded as part of, this report.
Remuneration report 2022 1
Remuneration report 2022
Statement from the Chair of

the Remuneration Committee
On behalf of the Board, I am pleased to Management”. In the annual review of total
present Ericsson’s Remuneration report for the remuneration, each remuneration element (at
financial year 2022. The Remuneration report target level) of the total remuneration mix has
describes how the Guidelines for Remunera- been compared with the external local and
tion to Group Managament, adopted at the global markets where Ericsson competes for
2020 Annual General Meeting, have been employees.
complied with in 2022. The Remuneration The Remuneration Committee and the
report also contains information on the long- Board continue to evaluate the effectiveness of
term variable remuneration programs for 2022. the long-term variable remuneration programs
In 2022, Ericsson continued to execute on for the Executive Team in achieving the objec-
its strategy to leverage its leadership position tive of supporting the Company in its strategic
in mobile networks and drive focused expan- goals and sustainable long-term interests. In
sion in enterprise. The Company continues to addition, the Committee has evaluated the
pursue sustainable growth to build a stronger potential to increase the long-term focus of the
Ericsson for the long-term, and remains com- Executive Team and to ensure it is in line with
mitted to reach the EBITA target of 15–18% the long-term expectations and interests of
(excluding restructuring costs). shareholders. The long-term variable remuner-
Ericsson can only achieve its long-term ation programs which were introduced in 2017
targets under strong leadership, consisting of for the Executive Team, along with the use of
individuals with a wide range of backgrounds, the one-year performance condition regarding
skills, and abilities. This requires that the Com- the Group’s operating income (EBIT) in the
pany attracts, retains and motivates the right long-term variable remuneration programs
people and offer them globally competitive as of the 2018 program, have been effective
remuneration. That is why Ericsson’s remu- in playing a key role in achieving Ericsson’s
neration philosophy and practices are based Group financial targets. After evaluating the
on the principles of competitiveness, fairness, current long-term variable remuneration pro-
transparency and impact with the overall aim grams and taking into account feedback from
of creating long-term value for shareholders investors, the Remuneration Committee and
in order to realize the Company’s strategy and the Board will propose a long-term variable
sustainable long-term interests. remuneration program for the Executive Team
The Guidelines for Remuneration to Group to the 2023 Annual General Meeting. The
Management (approved by the shareholders in proposed 2023 program is similar to the 2022
March 2020) have been a guide for the com- long-term variable remuneration program.
mittees work. Remuneration during the year The aim is to further strengthen Ericsson’s
was paid in accordance with the Guidelines. commitment to long-term sustainability and
It is currently recommended that no trading responsible business practices.
in Ericsson shares be conducted by board Finally, I would like to extend the Remunera-
members, the Executive Team or the Company. tion Committee’s appreciation to the Executive
In light of this, the Chairman of the Board, Team and all our employees worldwide for
the CEO and CLO have recommended to the Ericsson’s performance during the year.
Board that the vesting date of the LTV 2019 be
postponed until the Chairman and CLO jointly
agree that the shares can be vested.
Decisions on deviations from the Guidelines,
made in order to complete the acquisition Thank you, everyone!
of Vonage, are set out in the Remuneration
report under the section “Deviations from Jon Fredrik Baksaas
adopted Guidelines for remuneration to Group Chair of the Remuneration Committee
2 Remuneration report 2022
Introduction
This Remuneration report provides a summary of how the Guidelines for Remu- In 2022, the following key decisions were respectively made by the
neration to Group Management (the “guidelines”) of Telefonaktiebolaget LM Remuneration Committee and the Board regarding remuneration:
Ericsson (“Ericsson” or the “Company”), adopted by the Annual General Meeting – It is currently recommended that no trading in Ericsson shares be con-
2020, have been complied with during the financial year 2022. The report also ducted by board members, the Executive Team or the Company. In light
contains information on the total remuneration, including fixed and variable of this, the Chairman of the Board, the President & CEO and Chief Legal
remuneration, of Ericsson’s President and CEO and Executive Vice Presidents. Officer (CLO) have recommended to the Board that the vesting date of the
In addition, the report contains a summary of the Company’s current short-term LTV 2019 be postponed until the Chairman of the Board and CLO jointly
and long-term variable remuneration programs for Executive Team. agree that the shares can be vested
The Board of directors proposes that new amended Guidelines for Remu- – The achievement for LTV 2020 was set at 100% of target, based on pre-
neration to Group Management is resolved by the Annual General Meeting determined performance conditions: group operating income and relative
2023. Amended Guidelines are intended to remain in place for four years until and absolute total shareholder return (TSR)
the Annual General Meeting 2027. – The level of achievement of the performance condition for the Group’s
The remuneration of the President and CEO and the Executive Vice operating income for LTV 2022 was set at 162,76%
Presidents disclosed in the report represents their total remuneration, regard- – To drive Ericsson’s values, culture and leadership practices related to ethics,
less of whether it is paid through the Company or by another group company. compliance and integrity, underperformance against pre-defined criteria
The guidelines, adopted by the 2020 Annual General Meeting, can be found reduces the 2022 STV pay-out and overperformance justifies an additional
on pages 28–31 of the Financial report. The Board of Directors proposes that incentive. The pre-defined criteria and metrics used for this assessment
new amended Guidelines for remuneration to Group management is resolved is related to compliance training, third party management, allegation
by the Annual General Meeting 2023, which are intended to remain in place for management and other factors driving company Ethics and Integrity
four years until the Annual General Meeting 2027. The proposed guidelines are transformation. This review establishes a clear connection between our
included on pages 25–27 of the Financial report. The Auditors’ report on the integrity transformation and rewards for senior executive.
Company’s compliance with the guidelines is available on Ericsson’s website,
www.ericsson.com. The Remuneration Committee supports the Board in reviewing and evaluating
This report does not include remuneration of the Board. Board remunera- the guidelines and Ericsson’s application of the guidelines. The intention was
tion is decided annually by the Annual General Meeting and is disclosed in that the guidelines adopted by the 2020 AGM remain in force until the 2024
Note G2 on pages 77–78 of the Financial report for 2022. AGM. The Remuneration Committee and the Board have concluded that the
guidelines need to be revised in 2023, to inter alia, align with new rules for sup-
plementary pensions under the Industry and Trade Pension Plan Title 1 (ITP1)
Summary and to clarify the mandate for the Board of Directors and Remuneration Com-
Information on Ericsson’s performance during the financial year can be found mittee to define meaningful short-term variable compensation (“STV”) targets
in the Financial report 2022. linked to the business plan. New guidelines (including these amendments) are
As part of the Company implementing its business strategy and safe- proposed by the board of directors to be adopted by the 2023 AGM.
guarding the sustainable long-term interests of the Company, the Company The Remuneration Committee and the Board continuously evaluate the
must attract, retain, and motivate employees with the right skills and offer effectiveness of the LTV programs for the Executive Team in achieving the
them competitive remuneration. Long-term shareholder value creation and objective of supporting the Company’s achievement of its strategic goals and
performance-based remuneration are the basis for remuneration at Ericsson. sustainable long-term interests. In addition, their potential to increase the
The guidelines aim to ensure that remuneration is consistent with Ericsson’s long-term focus of the Executive Team and to link their interests with the
current remuneration philosophy and practices for the Company’s employees long-term expectations and interests of shareholders is evaluated.
based on the principles of competitiveness, fairness, transparency, and perfor- After evaluating the ongoing LTV programs for the Executive Team, the
mance. The main objectives of the guidelines are to: Remuneration Committee and the Board concluded that the ongoing LTV
– Attract and retain competent, performance-oriented, and motivated programs for 2020 and 2021, as well as the completed programs for 2018
employees who have the skills, experience and competencies required to and 2019, enabled the Company to achieve the long-term objectives set in
implement Ericsson’s business strategy 2017, in particular with the introduction of the one-year performance condi-
– Encourage behaviors consistent with Ericsson’s corporate culture, values tion regarding the Group’s operating result (EBIT). Although the one-year
and ethics and compliance programs performance condition relating to the Group’s operating income (EBIT) has a
– Ensure fair remuneration by ensuring that the total remuneration is of an one-year performance period, it has a three-year vesting period which is the
appropriate level without being excessive, and that the basis for the remu- same as the vesting period of the performance conditions relating to the
neration is clearly explained development of absolute and relative TSR, which is in line with the objectives
– Offer total remuneration, consisting of fixed and variable remuneration and of the LTV programs. This means that participants cannot redeem any of the
benefits, that is competitive in the markets in which Ericsson competes for Performance Share rights granted before the end of the three-year vesting
employees period and that participants are fully exposed to share price movements
– Promote forms of variable remuneration that unite employees in working during the three-year period.
towards clear and relevant objectives and reinforce their performance and As the 2018, 2019, 2020 and 2021 LTV programs have fulfilled their pur-
allow for flexible remuneration costs. pose to support the Company in achieving its long-term financial targets, the
2022 AGM decided on the introduction of a 2022 LTV program to the Execu-
The guidelines also aim to enable the Company to offer attractive and globally tive Team with the same structure as the previous LTV program and with the
competitive total remuneration to the Executive Team. addition of targets to further strengthen Ericsson’s and the Executive Team’s
According to the guidelines, the remuneration of the Executive Team commitment to long-term sustainability and responsible business practices
must be in line with market conditions and can be made up of the following (“ESG”). The Remuneration Committee and the Board decided to propose a
components: fixed salary, variable remuneration, pension and other benefits. long-term variable remuneration program for 2023 with a similar structure as
In addition to remuneration covered by the guidelines, the shareholders have the long-term variable remuneration program for 2022 to be resolved by the
decided to implement long-term variable remuneration (“LTV”) programs. The 2023 Annual General Meeting.In addition, the Remuneration Committee and
LTV 2020, LTV 2021 and LTV 2022 programs are still ongoing. the Board propose to change the delivery of the Executive Performance Plan
In 2022, there have been deviations from the guidelines in conjunction with from cash to shares. This is to further reinforce the alignment between share-
the acquisition of Vonage but not from the decision-making procedures as holders and Group Management.
described in the guidelines for determining the remuneration of the Executive
Team. There has been no claw-back of remuneration in 2022.
Remuneration 2022 at a glance

Total remuneration
The table below summarizes how the remuneration elements set out in the guidelines have been applied in relation to the President and CEO and
the Executive Vice Presidents. The table also summarizes information on the Long-Term Variable Pay (LTV) as approved by the shareholders.
Purpose and link to strategy Arrangement in brief Implementation during the financial year
ending December 31, 2022
Fixed salary Attract and retain the leadership required to Pay a portion of the annual remuneration in President and CEO: fixed annual salary of
implement Ericsson’s business strategy. a predictable manner. SEK 18,252,074 corresponding to an increase
Salaries are normally reviewed in January, taking of 3% since 2021.
into account: EVP and Head of Business Area Networks: fixed
– Ericsson’s overall business performance annual salary of SEK 8,673,074, c orresponding
to an increase of 4% since 2021.
– The business performance of the unit that the
employee manages EVP and Head of Market Area Europe and Latin
America: fixed salary of INR 31,330,687 (from
– Employee performance over time
January 1 to May 31), corresponding to an
– External economic conditions increase of 9% compared to 2021 (on p ro-rata
– The scope and complexity of the position, basis).1)
– External market data
– Pay and conditions of other employees in
countries considered relevant to the role.
When determining fixed salaries, the impact on
total remuneration must also be taken into account.
Other benefits Provide competitive benefits to attract and Benefits are aligned with competitive market prac- President and CEO: other benefits to the value
retain the leadership required to implement tices in the individual’s country of employment. of SEK 135,743.
Ericsson’s strategy. The level of benefits may vary from year-to- EVP and Head of Business Area Networks:
year depending on the cost of the benefits to the other benefits to the value of SEK 151,452.
Company. EVP and Head of Market Area Europe and
The benefits amount to a maximum of 10% of the Latin America: other benefits to the value of
annual fixed salary for members the Executive SEK 2,037,140 (from January 1 to May 31).1)
Team in Sweden.
Benefits for members of Executive Team on inter-
national long-term assignment (“LTA”) in a coun-
try other than the country of original employment
are determined in line with the Company’s global
policy on international mobility. Such benefits
may include, but are not limited to, commuting or
moving expenses, increased cost of living, housing
costs, travel home, educational allowances, and tax
and social security benefits.
Pension Provide long-term financial security and plan- The pension plans follow competitive practices in Company pension contributions:
ning for retirement by offering competitive the individual’s home country. – President and CEO: SEK 9,856,121
pension solutions that are in line with local The pension plans for the President and CEO and – EVP and Head of the Networks Business
market practice. the Executive Vice Presidents are defined contribu- Area: SEK 5,061,846.
tion plans.
– EVP and Head of Market Area Europe and
Latin America: SEK 510,164 (from January
1 to May 31).1)
Short-term Setting clear and relevant objectives for the The President and CEO is not entitled to any STV. Outcome for STV 2022:
variable Executive Team that are in line with Ericsson’s The target level is 40% of the fixed salary and – EVP and Head of the Networks Business Area:
compensation strategy and sustainable long-term interest. the maximum is 80% of the fixed salary for the 90,1% of the maximum level
(STV) Offer an individual earning opportunity Executive Vice Presidents. – EVP and Head d of Market Area Europe and
linked to performance at a flexible cost to Performance conditions, weightings and target Latin America: 90,1% of the maximum level
the Company. levels are set annually. (from January 1 to May 31).1)
Subject to malus and clawback.
Long-term Creating a common ownership interest Remuneration is awarded after approval by the LTV 2020 target achievement level of 100%.
variable between Executive Team and shareholders Annual General Meeting.
compensation Remuneration based on long-term per- Remuneration levels are determined as a percent-
(LTV) formance in line with Ericsson’s business age of the fixed salary.
strategy. – For the President and CEO, 190% of the fixed
Provide individuals with long-term remuner- salary
ation for long-term commitment and value – For the Executive Vice Presidents, 50% of the
creation in accordance with the interests of fixed salary.
shareholders.
Performance conditions, weightings and target
levels are taken to the AGM for approval. Three-
year vesting period.
Subject to malus and clawback.
1) Arun Bansal left the position as EVP May 31, 2022.

Remuneration earned in 2022
Börje Ekholm Fredrik Jejdling Arun Bansal 1)

President and CEO EVP and Head of Business Area Networks and EVP and Head of Market Area Europe and
Remuneration
Head of Segmentearned – Fredrik Jejdling
Networks Remuneration
Latin America earned – Arun Bansal
MSEK MSEK MSEK
120 40 40
35 35
100 78.5
30 30
80 9.8
25 25
9.0 2.7
4.1
60 36.6 20 20 9.8
5.1 0.5
4.3 2.3
24.0
15 15 0.8
3.5 6.3
40 6.7
0.5 15.2
4.4 2.3 3.1
10 0.0 0.2 10
0.8
9.1 9.6 9.9 0.0 0.5
20 9.1 9.5 8.7 3.0
0.8 0.6 0.1 7.9
17.7 18.2 19.2 5 5 2.0
3.1
0 0 0
2020 2021 2022 2020 2021 2022 2020 2021 2022
Fixed salary Benefits Pension LTV Fixed salary Benefits STV Pension LTV Fixed salary Benefits STV Pension LTV
1) Arun Bansal was appointed Executive Vice President in June 1,
2020 and left the same position May 31, 2022. All values for 2020,
except LTV, are calculated pro-rata for the period of June 1, 2020 to
December 31, 2020. LTV for 2020 is calculated for full year 2020. All
values for 2022, except LTV, are calculated pro-rata for the period of
January 1, 2022 to May 31, 2022. LTV for 2022 covers full year 2022.
STV LTV
The information presented for 2022 covers the financial year 2022 and The information presented for 2022 includes information on the LTV 2020
the information for 2021 and 2020 covers the financial years 2021 and which expires in 2023. Information presented for 2021 and 2020 includes
2020, respectively. information on LTV 2019 and LTV 2018 that expired in 2022 and 2021,
respectively. LTV 2019 values are provisional since payment is pending
after recommendation by the Chairman of Board, CEO and CLO (Chief
Legal Officer).
Performance outcome in 2022
STV 2022 outcome LTV 2020 outcome LTV 2020 TSR development (2020–2022)
2022 Short Term Variable Compensation outcome 2020 Long Term Variable Compensation outcome
% % %
100 100
100 100 Motorola Solutions 76.51
60 90 90 20
Cap Gemini 68.91
60 60
QUALCOMM 66.96
80 80
30 Juniper 50.01
IBM 37.27
60 60
Corning 35.52
50
0
50 50 Nokia 31.62
40 40
40 Cisco Systems 19.83
F5 Networks Absolute TSR

30 30 15.69
–6.65% CAGR
20 20 achieved vesting
CGI Group 14.10
level 0.0%
Cognizant 10.16 Relative TSR
ranking 12 out of
Ericsson −18.66 11, achieved vest-
0 0
Opportunity Outcome Outcome Opportunity Outcome ing level 0.00%
Fredrik Jejdling Arun Bansal −25 0 25 50 75 100
EVP and Head EVP and Head Relative TSR: As % of maximum opportunity
of Business Area of Market Area
Networks and Europe and Latin Absolute TSR: As % of maximum opportunity
Head of Segment America Group Operating income (EBIT): As % of maximum
Networks opportunity
Economic Profit: Business Area/Market Area as % of m
aximum
opportunity
Economic Profit: Group as % of maximum opportunity
Economic Profit means operating income less cost of capital.
To support the execution of Ericsson’s business strategy and the achievement of the Group’s financial targets, the Company’s variable remuneration
program focuses on targets related to financial profitability, the Group’s operating income (EBIT) and total shareholder return. The variable remu-
neration is thus designed to create incentives to contribute to Ericsson’s short- and long-term strategic plan and business objectives.
Total remuneration to the President

and CEO and Executive Vice Presidents
The table below sets out the total remuneration in SEK for Ericsson’s President and CEO and Executive Vice Presidents between 2020 and 2022.
Total remuneration to the President and CEO and to the Executive Vice Presidents
Fixed remuneration Variable remuneration
One-year Multiannual
Fixed salary variable variable Additional Share of
Financial (including Other remune remune agree- Total Share of fixed variable remu-
Name and position year holiday pay) benefits 1) ration 2) ration 3) ments 4) Pension 5) remuneration 6) remuneration 7) neration 8)
2022 19,154,852 135,743 - 24,034,229 - 9,856,121 53,180,945 55% 45%
Börje Ekholm
2021 18,208,859 555,688 - 36,630,457 - 9,569,049 64,964,053 44% 56%
President and CEO
2020 17,727,726 770,276 - 78,475,833 - 9,113,376 106,087,211 26% 74%
Fredrik Jejdling 2022 9,515,305 151,452 6,251,115 2,746,240 - 5,061,846 23,725,958 62% 38%
Executive Vice President
2021 9,129,087 14,980 6,671,595 4,092,344 - 4,314,186 24,222,193 56% 44%
and Head of Business Area
Networks 2020 7,925,971 22,110 4,415,425 9,025,678 - 3,457,409 24,846,592 46% 54%
Arun Bansal 2022 3,053 034 2,037,140 3,038,067 3,102,134 - 510,164 11,740,538 48% 52%
Executive Vice President
and Head of Market Area Europe 2021 15,158,407 1,345,055 6,727,226 4,741,209 - 985,340 28,957,237 60% 40%
and Latin America 9) 10, 11) 2020 8,673,843 840,273 2,253,084 9,844,590 - 516,344 22,128,134 45% 55%
1) For further information about other benefits, see table regarding the Execution of fixed remuneration and pension to the President and CEO and the Executive Vice Presidents.
2) The amounts represent STV earned during the financial year and paid in the following year, i.e., for 2022 the amounts represent STV 2022, for 2021 the amounts represent 2021 and for 2020 the amounts
represent STV 2020.
3) Amounts represent LTVs for which all performance periods expired during the fiscal year and the Executive Performance Share Plan (“EPSP”) share matching that took place during the fiscal year. For 2022, the
amounts represent LTV 2020, for 2021, the amounts represent LTV 2019 and for 2020, the amounts represent LTV 2018. LTV 2019 is not paid, the values are provisional pending decision by the Chairman of the
Board and CLO (Chief Legal Officer). The amounts are calculated based on the number of Performance Shares that will vest at the end of the vesting period multiplied by the volume weighted average of the last
five trading days of each financial year. The EPSP for 2016 was reconciled and terminated with the final delivery of the remaining Performance Match Shares to participants on August 17, 2020. The EPSP perfor-
mance period for 2016 expired on 31 December 2018, and since 2016 no EPSP has been launched for the Executive Team. The details of the EPSP are explained in the notes to the income statement and balance
sheet – note G3, share-based payment, page 69 of the Financial report 2020.
4) Amounts represent additional discretionary arrangements approved by the Remuneration Committee or the Board and entered into during the financial year.
5) Amounts represent cash payment in lieu of pension (for the President and CEO) or pension premium (for the Executive Vice Presidents) paid during the financial year.
6) The amounts represent the sum of fixed remuneration, variable remuneration, additional agreements and pension.
7) Amounts represent the sum of fixed remuneration and pension divided by total remuneration.
8) Amounts represent the sum of variable remuneration and additional agreements divided by total remuneration.
9) Any remuneration in foreign currency has been translated to SEK at average exchange rate.
10) Arun Bansal was appointed EVP in June 2020. Values related to 2020 are calculated on a pro-rata basis based on the time period June 1 – December 31, 2020. Multiannual variable represent LTV 2018 and
EPSP share matching for the time period June 1 to December 31, 2020.
11) Arun Bansal left the postion as EVP May 31, 2022. All values for 2022, except LTV, is calculated pro-rata for the period of January 1, 2022 to May 31, 2022. LTV for 2022 covers full year 2022.
Implementation of fixed remuneration and pension for the President and CEO and the Executive Vice Presidents
The table below shows the implementation of fixed remuneration and pension for the President and CEO and the Executive Vice Presidents.
Fixed salary Other benefits Pension
Börje Ekholm During the annual review of the total remuneration, the Board According to the Company’s Börje Ekholm receives a cash payment instead
President and decided on a salary increase of 3% of the fixed salary as of Swedish benefits policy, Börje of a defined contribution pension, as it is not
CEO January 1, 2022 for the President and CEO. The increase reflects Ekholm is entitled to a company possible to enroll him in the Swedish defined
the performance of the President and CEO until the end of 2021. car or equivalent cash remunera- contribution pension plan (ITP1) as he is
The fixed salary level for 2022 is considered appropriate in tion and other benefits as other resident in the US. The cash payment is treated
relation to the responsibility of being the President and CEO employees in Sweden. Since as salary for tax and social security purposes
of a leading global provider of ICT solutions, compared to the Börje Ekholm is a resident of the and is made in a way that is cost neutral
remuneration packages for the position of President and CEO of United States, he is also eligible for Ericsson. According to his employment
comparable international companies. for health insurance in the United contract, the pension supplement shall include
States and tax advice regarding an additional premium on top of the fixed
his tax return. annual salary to take into account an assumed
achieved target level of STV.
Fredrik Jejdling The salary level reflects Fredrik Jejdling’s responsibility as head According to the Company’s In accordance with Ericsson’s pension guide-
Executive Vice of Ericsson’s largest business area, Networks. The salary level Swedish benefits policy, Fredrik lines, Fredrik Jejdling participates in the ITP1
President and is considered competitive in the external market for both other Jejdling is entitled to a company defined contribution plan. He is not entitled
Head of Business VPs on leading ICT solution providers and for the position of car or equivalent cash remunera- to any other pension benefit outside the rules
Area Networks President and CEO of smaller companies. tion and other benefits as other applicable to the ITP.
employees in Sweden.
Arun Bansal The fixed salary reflects Arun Bansal’s responsibility as head As Arun Bansal was on LTA, he In accordance with Ericsson’s pension guide-
Executive Vice of two major geographies, both Europe and Latin America. His was entitled to benefits in line lines and according to his employment contract,
President salary level was deemed competitive to reflect his responsibil- with Ericsson’s international Arun Bansal was eligible for Ericsson’s LTA
and Head of ity. Arun Bansal was on LTA in the United Kingdom from his mobility policy such as housing pension plan, International Pension Plan (IPP)
Market Area original employment in India. In accordance with best practice allowance, transportation allow- and annual pension contribution was paid into
Europe and
for international assignments, his compensation was set with ance, home travel, tax and social Interben Trustees Limited in 2022.
Latin America
(from January a “home base approach”. security equalization assistance
1 until May 31, and medical insurance.
2022)
Variable remuneration
Ericsson believes that, where possible, variable remuneration should eration, and therefore the starting point is to have a financial profitability
be encouraged as an integral part of total remuneration. The aim is target, which is a measure of operating profitability net of capital costs.
first and foremost to reconcile employees’ interests with Ericsson’s The financial profitability targets are defined for the Executive Team:
strategic business objectives, sustainable long-term and relevant unit – at group level for heads of group functions
performance. At the same time, this allows for flexible wage costs and – as a combination of group level and business area level for business
underlines the link between performance and pay. area managers
All variable remuneration programs have defined maximum grant – as a combination of group level and market area level for market
and vesting levels. area managers.
The short-term variable remuneration depends to a greater extent
on the Company’s performance and the unit concerned, while the The President and CEO is not entitled to any STV. The Remuneration
long-term variable remuneration depends on Ericsson’s performance Committee decides on and approves all objectives set for the other
at Group level. members of the Executive Team. These objectives are spread down-
wards through the organization and broken down into unit-related
objectives across the Group, where applicable. The Remuneration
Short-term variable compensation (STV) Committee monitors the appropriateness and fairness of the target
Annual short-term variable remuneration is paid through cash-based levels for the Group, Business Areas and Market Areas throughout
programs that depend only on financial performance targets. The the performance year and has the power to revise them if they are no
concrete business objectives are calculated on the basis of the annual longer relevant, or if they no longer contribute to shareholder value.
business plan approved by the Board, which in turn is based on the The current weighting for the Executive Vice Presidents is made up of
Company’s long-term strategy. Ericsson strives for industry-leading 40% E conomic Profit for the Group and 60% Economic Profit for each
operating margins and return on investment as well as good cash gen- Business/Market Area.
The tables below describe the STV 2022 outcome for each of the Executive Vice Presidents, which is determined by evaluating performance against
the applicable financial metrics.
Executive Vice President and Head of Business Area Networks – Fredrik Jejdling (STV 2022)
Threshold level Maximum level
(in % of target) Target level (in % of target) Outcome (% of target)
SEK outcome SEK outcome SEK outcome SEK actual
Performance measures Weighing at threshold performance at target performance at maximum performance performance outcome
70% 100% 130% 150.5%
Group Economic Profit 1) 40 %
0 1,387,692 2,775,384 2,088,040
85% 100% 114% 200%
Economic Profit Business Area Networks 1) 60 %
2,081,537 4,163,075 4,163,075
Total 100 % 0 3,469,229 6,938,459 6,251,115
1) Economic profit means operating income minus cost of capital.
Executive Vice President and Head of Market Area Europe and Latin America (from January 1 until May 31, 2022) – Arun Bansal (STV 2022)
Threshold level Maximum level
(in % of target) Target level (in % of target) Outcome (% of target)
SEK outcome SEK outcome SEK outcome SEK actual
Performance measures Weighing at threshold performance at target performance 2, 3) at maximum performance 2, 3) performance outcome 2, 3)
70% 100% 130% 150.5%
Group Economic Profit 1) 40 %
0 674,424 1,348,848 1,014,796
Economic Profit Market Area Europe and 85% 100% 113% 200%
60 %
Latin America 1) 1,011,636 2,023,271 2,023,271
Total 100 % 0 1,686,059 3,372,119 3,038,067
1) Economic profit means operating income minus cost of capital. Any remuneration in foreign currency has been translated to SEK at average exchange rate.
2) Any remuneration in foreign currency has been translated to SEK at average exchange rate.
3) Arun Bansal left the position as EVP May 31, 2022. All SEK values related to 2022 are calculated on pro-rata basis based on the period from January 1 to May 31, 2022.
Long-term variable compensation (LTV) When deciding on the final exercise level of the Performance Share
The current LTV programs have been designed to encourage long- Rights, the Board considers whether the exercise level is reasonable in
term commitment and value creation in line with Ericsson’s long-term light of the Company’s financial performance and position, stock market
strategic goals and shareholders’ interests. They form part of an overall conditions and other circumstances. Otherwise, the Board reserves the
remuneration package and normally extend over at least three years. As right to reduce the level of outputs to a lower level deemed appropriate.
these are variable remuneration programs, it is not possible to predict The Board may at any time up to the last day of the vesting period
the outcome when they are launched, and the remuneration depends reduce (including cancel) the number of shares to which the Perfor-
on long-term personal commitment, the Company’s performance, the mance Share Rights are entitled, to the extent deemed appropriate in
share price performance and the Company’s approach to sustainability view of:
and social issues. – the Company’s financial performance and position
The LTV programs launched at Ericsson consist of share-based – stock market conditions and/or
remuneration for members of Executive Team. The objective of the – such other circumstances and reasons as the Board considers
LTV programs is to attract, retain and motivate senior executives in relevant.
a competitive market through performance-based and share-based
incentives, and to encourage the building of a significant shareholding, In addition, the Company has the right to unilaterally decide to withhold
in order to create a common ownership interest between the Executive all or part of such awards for a participant in respect of years in which
Team and shareholders. Awards under LTV 2018, 2019, 2020, 2021 the participant has violated Ericsson’s Code of Business Conduct. The
and 2022 (Performance Share Rights) are made free of charge and Company also has the right to unilaterally decide to demand repayment,
entitle participants, subject to the achievement of certain performance in whole or in part, of awards relating to years in which a participant has
targets, to receive a number of shares free of charge after the expiry of a violated Ericsson’s Code of Business Conduct.
three-year vesting period for each program. Awards of shares under the The details of each of the ongoing long-term variable remuneration
Performance Share Rights are made upon the achievement of challeng- programs at Ericsson, including the programs for other employees, are
ing performance conditions, which are defined for each year’s program described in the notes to the consolidated financial statements – note
at the time of its launch. The portion of the LTV Performance Share G3, “Share-based remuneration”, on pages 79–83 of the Financial
Rights that will potentially vest will be determined at the end of the report.
relevant performance period based on whether the predefined criteria
for this year’s LTV program have been met, with the performance period Long-Term Variable Compensation Program 2022 (LTV 2022)
being one to three years. It is a general requirement that the participant LTV 2022 was approved at the 2022 AGM and covers all members
remain employed for three years from the date of grant of the Perfor- of the Executive Team, a total of 16 members of the Executive Team
mance Share Rights in order to be eligible to receive the outcome. Pro- 2022, including the President and CEO. Participants were awarded
vided that the performance conditions have been met during the perfor- Performance Shares on May 18, 2022. The Performance Share Awards
mance period, and that the participant has continued to be employed granted to the President and CEO and the Executive Vice Presidents are
(except in exceptional circumstances) during the vesting period, shares summarized in the table below.
will be awarded as soon as possible after the vesting period has expired.
Award information, Long-Term Variable Compensation 2022 (LTV 2022) program

Allocation value Number of Percentage of the award Maximum number of
as a percentage Performance Shares to which performance Performance Shares
Participants Allocation value 1) of annual basic salary 2) granted 3) conditions apply 4) that can be earned 5)
Börje Ekholm SEK 34,678,941 190% 306,649 100% 613,298
Fredrik Jejdling SEK 4,336,537 50% 38,346 100% 76,692
Arun Bansal 6) SEK 0 0% − − −
1) The amount represents the basic amount in SEK.
2) The figures represent basic amounts as a percentage of annual basic salary at the date of award.
3) Calculated as the respective grant value divided by the volume weighted average price of Ericsson’s B-shares on Nasdaq Stockholm during the five trading days immediately following the publication of the Com-
pany’s fourth quarter report for 2021.
4) All Performance Shares are subject to challenging performance conditions. These are measured over pre-defined performance periods spanning one to three years. Performance conditions for LTV 2022 are: (1)
Group operating income target (weighted at 45%) measured over the period January 1, 2022 to December 31, 2022, (2) absolute TSR performance (weighted 25%) in the range 6%-14% annual growth rate, (3)
relative TSR performance (weighted 20%) of Ericsson’s B-share, ranked 6-2 against 11 peers, measured over the period January 1, 2022 to December 31, 2024, (4) reduction of CO2 emissions (weighted 5%) in
the Company’s own facilities and (5) increased proportion of female executives (weighted 5%) within the Company. Performance conditions for LTV 2022 and details of how performance conditions will be calcu-
lated and measured are set out in the minutes of the 2022 AGM under item 16.
5) The maximum number of shares that can be allotted will result in a dilution of approximately 0.1% of the total number of outstanding shares. The effect on key ratios is marginal.
LTV 2020 performance outcome and LTV 2022 Group operating income target
LTV 2020 and LTV 2022 had targets with performance periods ending on December 31, 2022, which are summarized in the tables below. LTV 2020 will expire
in 2023 as all performance periods under the program have now expired. LTV 2022 will not expire until 2025, but the performance period for the one-year Group
operating income (EBIT) target for LTV 2022 expired on December 31, 2022.
Performance conditions for LTV 2022

Possible outcome Target
Program Target Conditions Weight Performance period (Linear distribution) Outcome achievement level 1)
Group Operating Range (billion SEK) Jan 1, 2022–
LTV 2022 income (EBIT) 2022 24.1–34.1 45% Dec 31, 2022 0%–200% SEK 32,238 billion 2) 162.76%
Jan 1, 2022–
LTV 2022 Absolute TSR Range 6%–14% 25% Dec 31, 2024 0%–200% – –
Ericsson’s Jan 1, 2022–
LTV 2022 Relative TSR ranking 6–2 20% Dec 31, 2024 0%–200% – –
Range CO2 emissions
(tonnes in thousands) Jan 1, 2022–
LTV 2022 Reduction of CO2 265–200 5% Dec 31, 2024 0%–200% – –
Percentage of
female managers Jan 1, 2022–
LTV 2022 Female managers Range 22%–24% 5% Dec 31, 2024 0%–200% – –
Total 100% 0%–200%
1) The Board decided that the target achievement level for the performance condition for the Group’s operating income 2022 was 162,76% for the part of the Performance Share Rights that are granted based on
the outcome of the Group’s operating result 2022. Further information regarding the number of Performance Share Units earned by each of the President and CEO and the Executive Vice Presidents is provided in
the table Long-Term Variable Compensation (LTV) to the President and CEO and to the Executive Vice President. The performance share rights vest at the end of the vesting period in 2025.
2) Excluding restructuring costs and other items not included in the performance condition.
Performance conditions for LTV 2020

Possible outcome Target
Program Target 1) Conditions Weight Performance period (Linear distribution) Outcome achievement level 2)
Group Operating Range (billion SEK) Jan 1, 2020–
LTV 2020 income (EBIT) 2020 19.1– 27.9 50% Dec 31, 2020 0%–200% SEK 29.1 billion 200.00% 1)
Jan 1, 2020–
LTV 2020 Absolute TSR Range 6%–14% 30% Dec 31, 2022 0%–200% −6,65% 0% 2)
Jan 1, 2020–
LTV 2020 Relative TSR Ericsson's ranking 6–2 20% Dec 31, 2022 0%–200% 12 out of 11 0% 2)
Total 100% 0%–200% 100%
1) As announced in the 2020 Annual Report, the Board decided that the target achievement level for the performance condition for the Group’s 2020 operating income was 200% for the part of the Performance
Share Rights based on an outcome of the Group’s 2020 operating income.
2) The Board decided that the target achievement level for the performance conditions development of absolute TSR and relative TSR amounted to 0% and 0% respectively, based on the achievements of −6,65%
absolute TSR and ranking 12 for relative TSR, resulting in an overall achieved target achievement level of 100% for LTV 2020. Performance shares vest at the end of the vesting period in 2023. For further informa-
tion on the number of Performance Share Units earned by each of the President and CEO and the Executive Vice Presidents, please refer to the table Long-Term Variable Compensation (LTV) of the President and
CEO and the Executive Vice Presidents.
Long term variable compensation (LTV) to the President and CEO and the Executive Vice Presidents
The table below sets out relevant information of LTV 2018, 2019, 2020 and 2021 with regards to the President and CEO and the EVPs.
Long-term variable remuneration (LTV) to the President and CEO and to the Executive Vice Presidents
Main conditions for share-based plans Information concerning the reported financial year
Performance
End Maximum Performance share rights Balance at
date number of Performance share rights forfeited and year-end,
of the Performance Performance share rights still subject to paid out in Performance
Perfor- perfor- End date share rights Shares that can Incoming earned during performance shares during shares earned
Name and Target Date of mance mance of vesting granted be Awarded balance the year conditions the year but not f orfeited
position Program (weight) 1) award 2) period 3) period 4) period 5) (value in SEK) 6) (value in SEK) 7) (value in SEK) 8) (value in SEK) 9) (value in SEK) 10) (value in SEK) 11) (value in SEK) 12)
Group
Operating 18/5/ 31/12/ 18/5/ 137,994 275,988 224,594 224,594
1 year
income (EBIT) 2022 2022 2025 (15,605,741) (31,211,483) (13,852,958) (13,852,958)
(45%)
TSR
LTV 2022 275,982
performance 18/5/ 31/12/ 18/5/ 137,991 275,982
3 years (17,022,570)
conditions 2022 2024 2025 (15,605,402) (31,210,804)
(45%)
ESG targets 18/5/ 31/12/ 18/5/ 30,664 61,328 61,328
3 years
(10%) 2022 2024 2025 (3,467,792) (6,935,584) (3,782,711)
Group
Operating 3/5/ 31/12/ 3/5/ 154,161 308,322 308,322 308,322
1 year
income (EBIT) 2021 2021 2024 ( 16,834,381) ( 33,668,762) (19,017,301) (19,017,301)
(50%)
LTV 2021
TSR
Börje performance 3/5 31/12/ 3/5/ 154,162 308,324 308,324
3 years
Ekholm conditions 2021 2023 2024 (16 834 490) (33,668,981) (19,017,424)
CEO and (50%)
President Group
Operating 1/4/ 31/12/ 1/4/ 194,830 389,660 389,660 389,660
1 year
income (EBIT) 2020 2020 2023 (15,188,947) (30,377,894) (24,034,229) (24,034,229)
(50%)
LTV 2020
TSR
performance 1/4/ 31/12/ 1/4/ 194,830 389,660
3 years
conditions 2020 2022 2023 (15,188,947) (30,377,894)
(50%)
Group
Operating 18/5/ 31/12/ 18/5/ 146,087 292,174 292,174 292,174
1 year
income (EBIT) 2019 2019 2022 (13,808,143) (27,616,286) (18,021,292) (18,021,292)
(50%)
LTV 2019 13)
TSR
performance 18/5/ 31/12/ 18/5/ 146,087 292,174 76,973 76,973
3 years
conditions 2019 2021 2022 (13,808,143) (27,616,286) (4,747,695) (4,747,695)
(50%)
1,296,806 2,593,612 1,067,129 224 594 645,634 1,291,723
Total (126,341,987) (252,683,974) (65,820,517) (13,852,958) (39,822,705) (79,673,475)
1) TSR performance conditions include both absolute and relative performance conditions for each program.
2) The date of allocation represents the date on which the original allocation was made.
3) Performance period represents the period over which the performance conditions are measured.
4) The end date of the performance period represents the date on which the performance period ends.
5) The Vesting Period End Date represents the date on which any Performance Shares will vest and entitle participants to receive shares.
6) The figures represent the original number of Performance Share Rights granted on the grant date. Values in SEK represent the corresponding value on the date of award.
7) The figures represent the maximum number of Performance Share Units that can be earned for each performance condition. Values in SEK represent the corresponding value on the date of award.
8) Figures represent the balance at the beginning of the year, which includes Performance Share Units earned for prior years that have not yet been awarded. Values in SEK are calculated as the number of vested
Performance Share rights multiplied by the volume weighted average share price for the last five trading days of the previous financial year.
9) The figures represent the number of Performance Share Units earned that had a performance period that expired during the financial year. Values in SEK are calculated as the number of Performance Share Units
earned multiplied by the volume weighted average share price for the last five trading days of the financial year.
10) The figures represent the maximum number of outstanding Performance Shares that are still subject to an ongoing performance period. Values in SEK are calculated as the number of outstanding Performance
Shares still subject to a performance period multiplied by the volume weighted average share price for the last five trading days of the financial year.
11) The figures represent the number of Performance Share Units that had a vesting period expiring during the financial year and that entitled the participant to receive shares free of charge. Values in SEK represent the
fair value of shares granted to the participant at the end of the vesting period.
12) The figures represent the balance at the end of the year, which includes Performance Share Units earned during the financial year as well as previous Performance Share Units earned but not forfeited. Values in
SEK are calculated as the number of Performance Share Units earned multiplied by the volume weighted average share price for the last five trading days of the financial year.
13) LTV 2019 payment pending after recommendation by the Chairman of the Board, CEO and CLO (Chief Legal Officer).
Long-term variable remuneration (LTV) to the President and CEO and to the Executive Vice Presidents, cont’d.
Performance
Group
Operating 18/5/ 31/12/ 18/5/ 17,257 34,514 28 086 28 086
1 year
income (EBIT) 2022 2022 2025 (1,951,594) (3,903,188) (1,732,344) (1,732,344)
(45%)
TSR
LTV 2022
performance 18/5/ 31/12/ 18/5/ 17,255 34,510 34 510
3 years
conditions 2022 2024 2025 (1,951,368) (3,902,736) (2,128,577)
(45%)
ESG targets 18/5/ 31/12/ 18/5/ 3,834 7,668 7 668
3 years
(10%) 2022 2024 2025 (433,587) (867,174) (472,962)
Group
Fredrik Operating 3/5 31/12/ 3/5/ 19,092 38,184 38,184 38 184
1 year
Jejdling income (EBIT) 2021 2023 2024 ( 2,084,846) (4,169,693) (2,355,189) (2,355,189)
Executive LTV 2021 (50%)
Vice Presi- TSR
3/5 12/31/ 3/5/ 19,092 38,184 38,184
dent performance 3 years
2021 2023 2024 ( 2,084,846) (4,169,693) (2,355,189)
and Head criteria (50%)
of Business Group
Area Net- Operating 1/4/ 12/31/ 1/4/ 22,262 44,524 44 524 44 524
works 1 year
income (EBIT) 2020 2020 2023 (1,735,546) (3,471,091) (2,746,240) (2,746,240)
LTV 2020 (50%)
TSR
1/4/ 12/31/ 1/4/ 22,263 44,526
performance 3 years
2020 2022 2023 (1,735,623) (3,471,247)
criteria (50%)
Group
Operating 18/5/ 31/12/ 18/5/ 16,321 32,642 32,642 32,642
1 year
income (EBIT) 2019 2019 2022 (1,542,661) (3,085,322) (2,013,359) (2,013,359)
LTV 2019 13) (50%)
TSR
18/5/ 31/12/ 18/5/ 16,322 32,644 8,599 8,599
performance 3 years
2019 2021 2022 (1,542,755) (3,085,511) (530,386) (530,386)
criteria (50%)
153,698 307,396 123,949 28,086 80,362 152,035
Total (15,062,827) (30,125,655) (7,645,174) (1,732,344) (4,956,728) (9,377,519)
11) The figures represent the number of Performance Share Units that had a vesting period expiring during the financial year and that entitled the participant to receive shares free of charge. Values in SEK represent
the fair value of shares granted to the participant at the end of the vesting period.
13) LTV 2019 payment pending after recommendation by the Chairman of Board, CEO and CLO (Chief Legal Officer).
Long-term variable remuneration (LTV) to the President and CEO and to the Executive Vice Presidents, cont’d.
Performance
Group
Operating 31/12/
1 year 0 -
income (EBIT) 2022
(45%)
TSR
LTV 2022
performance 31/12/
3 years 0 -
conditions 2024
(45%)
ESG targets 31/12/
3 years 0 -
(10%) 2024
Group
Arun Bansal Operating 3/5 31/12/ 3/5/ 18,062 36,124 36,124 20,057 15)
1 year
Executive income (EBIT) 2021 2021 2024 (1,972,370) (3,944,741) (2,228,128) (1,237,116)
Vice LTV 2021 (50%)
President TSR
3/5 31/12/ 3/5/ 18,063 36,126 20,05915)
and Head of performance 3 years
2021 2023 2024 (1,972,480) (3,944,959) (1,237,239)
Market Area criteria (50%)
Europe and Group
Latin Operating 1/4/ 31/12/ 1/4/ 27,399 54,798 54,798 50,294
America 14) 1 year
income (EBIT) 2020 2020 2023 (2,136,026) (4,272,052) (3,379,941) (3,102,134)
LTV 2020 (50%)
TSR
1/4/ 31/12/ 1/4/ 27,398 54,796
performance 3 years
2020 2022 2023 (2,135,948) (4,271,896)
criteria (50%)
Group
Operating 18/5/ 31/12/ 18/5/ 18 909 37,818 37 818 37,818
1 year
income (EBIT) 2019 2019 2022 (1,787,279) (3,574,557) (2 332 614) (2,332,614)
LTV 2019 13) (50%)
TSR
18/5/ 31/12/ 18/5/ 18,909 37,818 9,962 9,962
performance 3 years
2019 2021 2022 (1,787,279) (3,574,557) (614,456) (614,456)
criteria (50%)
128,740 257,480 138,702 20,059 118,131
Total (11,791,381) (23,582,763) (8,555,139) (1,237,239) (7,286,320)
11) The figures represent the number of Performance Share Units that had a vesting period expiring during the financial year and that entitled the participant to receive shares free of charge. Values in SEK represent
the fair value of shares granted to the participant at the end of the vesting period.
13) LTV 2019 payment pending after recommendation by the Chairman of Board, CEO and CLO (Chief Legal Officer).
15) Holdings in LTV 2020 and 2021 prorated based on last day for employment as December 31, 2022.
Information on guidelines for shareholdings by Executive Team Deviations from adopted Guidelines for remuneration to
The Board has adopted the following shareholding guidelines to apply Group Management
to current and future members of the Executive Team as of 1 January Upon recommendation from the Remuneration Committee, the Board
2019, to encourage management to build and maintain a shareholding of Directors may, in extraordinary circumstances, decide to temporarily
to create a common ownership interest between the Company’s share- deviate in whole or in part from the remuneration guidelines to promote
holders and the members of the Executive Team: the Company’s long-term interests and sustainability or to ensure the
– The President and CEO must build and maintain a shareholding Company’s financial viability. If a member of the Executive Team is
equivalent to at least 200% of the annual fixed salary appointed following a merger with or acquisition of another company,
– Other members of the Executive Team must build up and maintain legacy terms and conditions may also be honored for a maximum period
a shareholding equivalent to at least 75% of their respective annual of 36 months.
fixed salary. As part of the acquisition of Vonage Holdings Corp. (Vonage) in
July 2022 and to retain Rory Read (below RR), Senior Vice President
The current members of the Executive Team shall have the opportunity and Head of Business Area Global Communications Platform, the Board
to build up the required shareholding over a period of five years starting of Directors has resolved of a deviation from the guidelines.
from January 1, 2019. In the event that new members of the Execu-
tive Team are appointed, they are expected to meet the shareholding The deviation consists in the resolution to enter into an employment
requirement on the anniversary date five years after they are granted agreement with RR on the following terms:
their first Performance Shares under the LTV Plans. The Board considers – An acceleration of RR’s existing long-term share based variable
the following for the purpose of meeting the shareholding requirement: incentive program of restricted and performance stock units (RSU
– Holdings of Ericsson Class B-shares held or acquired by the and PSU) in Vonage in return of cash compensation to be paid in
Executive Team member four incremental payments of in total USD 43,400,028, whereof
– Vested but unexercised options (value calculated after tax and after USD 32,760,000 has been paid during 2022.
utilization costs) – An indemnification by the Company to compensate RR (on a fully
– Share rights held by the member of the Executive Team, for which tax grossed up basis) for any excise tax and interest or other penal-
performance and/or employment conditions have been met, but ties that may become due in connection with the acceleration of
which must be held for a certain period of time (value calculated RSU and PSU under RR’s long-term share based variable incentive
after tax). program in Vonage, corresponding to a maximum gross up amount
of USD 4,000,000.
Shares, synthetic shares, or options that are subject to performance – A two-year (2022 until and including 2023) cash-based incen-
conditions and continued employment, but which have not vested, tive program of a variable remuneration on target level of USD
should not be counted under the shareholding guidelines. 12,000,000 and a maximum of USD 36,000,000 at 300% target
The Remuneration Committee shall monitor compliance with the achievement, to ensure the fulfillment of the Vonage management
shareholding guidelines and regularly report to the Board and inform business plan for Vonage. Payout under the program only takes
the members of the Executive Team on the extent to which the share- place under conditions that set targets for sales growth and results
holding guidelines have been complied with. are achieved according to the current business plan. For 2022, the
The holdings of each of the members of the Executive Team are maximum earning opportunity amounted to USD 18,000,000.
disclosed on pages 20–25 of the Corporate Governance report. The actual achievement for 2022 was approximately 4,1% of the
maximum earning opportunity, which corresponds to USD 738,750
payable in 2024 conditional upon RR’s continued employment.
– In the event of termination of RR’s employment by the Company, RR
is obliged to receive severance pay equal to 12 months’ fixed salary,
an amount corresponding to annual short-term variable compensa-
tion calculated at the target level, the current year’s bonus outcome
calculated prorated in relation to the time worked during the year
and other benefits amounting under the notice period.
Comparative information on changes

in remuneration and the Company’s performance
Comparison table of the change in remuneration and the Company’s performance over the last three financial years reported
Ericsson’s performance
Fredrik Jejdling Arun Bansal Average
Executive Vice Executive Vice remuneration Group Share price at
Remuneration to the President and CEO President and President and Head of of employees perating
o Group December 31
and to the Executive Börje Ekholm Head of Business Market Area Europe converted to full- income (EBIT) Net Sales for the
Vice President President and CEO Area Networks and Latin America 4) time equivalents 3) SEK million SEK million financial year
2022 Fixed remuneration 1) 19,290,595 (3%) 9,666,757 (6%) 5,090,173 (−69%) 966,031 (8,5%) 27,020 271,546 60.9
(% change) Variable remuneration 2) (10%) (17%) (−38,97%)
0 (−100%) 6,671,595 (−54%) 3,986,292 (−73%) 230,928 (−27%)
2021 Fixed remuneration 1) 18,764,547 (1%) 9,144,067 (15%) 16,503,462 (73%) 889,538 (13%) 31,780 232,314 99.79
(% change) (14%) (−0.03%) (2.20%)
Variable remuneration 2) 88,782,271 (22%) 14,626,469 (122%) 14,763,028 (11,248%) 295,193 (−1%)
2020 Fixed remuneration 1) 18,498,002 (13%) 7,948,081 (15%) 9,514,116 790,295 (−23%) 27,808 232,390 97.64
(% change) (163%) (2.28%) (19.72%)
Variable remuneration 2) 72,507,054 6,595,909 (103%) 130,096 299,589 (25%)
Comments LTV 2018 expired LTV 2018 expired LTV 2018 vested and In 2021, the delayed
and shares were and shares were shares were trans- salary revision for
transferred in transferred in ferred in may 2021. 2020 took place with
May 2021. May 2021. Information disclosed a company-
and compared during sponsored
dates of being EVP. retroactive effect,
which increased the
remuneration of
other employees.
A majority of
employees do not
have variable
remuneration.
1) Fixed remuneration includes fixed salary and other benefits.

2) Variable remuneration for the CEO and President and to the Executive Vice Presidents includes applicable STV and LTV. For the Company’s employees, variable remuneration includes short-term and long-term
variable remuneration. For the sake of comparison, variable remuneration represents figures accrued and paid during the financial year. This is because performance reviews and long-term variable remuneration
programs for other employees with performance periods expiring in fiscal year 2022 have not yet been completed.
3) Employees of Telefonaktiebolaget LM Ericsson, excluding the CEO and President and other members of Executive Team employed by the Company.
4) Arun Bansal left the position as EVP on May 31, 2022. All values related to 2022 are calculated on pro-rata basis based on the period from January 1 to May 31, 2022.
Board of Directors
Org. no. 556016-0680
Sustainability Part of
Ericsson
Annual Report
and Corporate 2022
Responsibility
report
Annual Report 2022

report
ericsson.com
Contents
Sustainability and Corporate

Responsibility report 2022
Improving lives, redefining business and
pioneering a sustainable future 1
Strategy and targets 2
2022 highlights – Environment 4
2022 highlights – Social 6
2022 highlights – Governance 8
Notes to the Sustainability and Corporate
Responsibility report 10
Assurance report 43
Glossary 44
This Sustainability and Corporate Responsibility report is rendered

as a separate report added to the Financial Report in accordance
with the Annual Accounts Act (SFS 1995:1554, chapter 6, section
10 and 11). An assurance report from the Company’s a uditor is
appended hereto.
This report may include forward-looking statements, including statements tion and statements. Important factors that could affect whether and to
reflecting the Company’s current views relating to the growth of the market, what extent any of our forward-looking statements materialize include but
future market conditions, future events, financial condition, and expected are not limited to the factors described throughout the Company’s Annual
operational and financial performance. Report for the financial year 2022, including in the section Risk Factors of
The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “intend”, the Company’s Annual Report for the financial year 2022. These forward-
“likely”, “projects”, “may”, “could”, “plan”, “estimate”, “forecast”, “will”, “should”, looking statements also represent our estimates and assumptions only as of
“would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”, “might”, the date that they were made, and to the extent they represent third-party
“continue”, or, in each case, their negative or variations, and similar words data, we have not undertaken to independently verify such third-party data
or expressions are used to identify forward-looking statements. Any state- and do not intend to do so. Given these risks and uncertainties, readers are
ment that refers to the Company’s strategy, future financial performance, cautioned not to place undue reliance on such forward-looking statements.
expectations, projections or other characterizations of future events or We expressly disclaim a duty to provide updates to these forward-looking
circumstances, including any underlying assumptions, are forward-looking statements, and the estimates and assumptions associated with them,
statements. Such statements are based on the Company’s expectations as after the date of this report, to reflect events or changes in circumstances or
of the date of this report, unless an earlier date is specified, including expec- changes in expectations or the occurrence of anticipated events, whether as
tations based on third-party information and projections that the Company a result of new information, future events or otherwise, except as required
believes to be reputable. by applicable law or stock exchange regulation. We maintain website
We caution investors that these statements are subject to risks and and external voluntary reports that may be referenced in this report. The
uncertainties many of which are difficult to predict and generally beyond our information on our website and in our external voluntary reports is not incor-
control that could cause actual results to differ materially and adversely from porated by reference in, or otherwise to be regarded as part of, this report.
those expressed in, or implied or projected by, the forward-looking informa-
Sustainability and Corporate Responsibility report 2022 Introduction 1
Improving lives, redefining business

and pioneering a sustainable future
Ericsson’s vision to improve lives, redefine
business and pioneer a sustainable future is
built on the power of mobile connectivity to
deliver positive impact. Just as electrification
transformed the world in the 20th century,
digitalization is transforming the 21st century.
With 5G, the network becomes a platform for
innovation and APIs put the capabilities of the
network at the fingertips of a global developer
community that will create new innovative use
cases. 5G technology will be transformational
not just for the mobile ecosystem but any eco-
system that depends on connectivity, whether
consumer or enterprise. This new platform
will be a global engine for economic growth, a
fundamental lever for fighting climate change
and a powerful enabler of social inclusion.
Integrity is a foundation for Ericsson’s value
creating capabilities. With a presence in around
180 countries, Ericsson is operating in markets Beyond its portfolio, Ericsson is working on Enabling industry transformation
with varying degrees of complexity in terms the ground to ensure that meaningful connec- While the ICT sector is responsible for only
of business culture, geopolitical stability and tivity is available and usable by everyone. 1.4% of the global carbon footprint 3) it has
maturity of institutions, and holds the same The Company was the first private sector the potential of enabling a 15% reduction of
high standards of ethical business – from equal partner of UNICEF and ITU’s Giga initiative to emissions across industries by 2030 through
opportunity for all and respect for human rights, make a multimillion-dollar commitment, and connectivity solutions such as smart building
to anti-corruption – across all its operations. over the past two years it has supported Giga management systems and connected electric
Further, the health, safety and well-being of in connecting more than 5,500 schools and vehicle charging infrastructure 4).
everyone working for Ericsson is of the highest 2 million children and youth to the internet. These are just two examples of the pos-
priority. The Company takes a holistic approach Ericsson aims to take the learnings of the last sibilities of the Fourth Industrial Revolution.
to risk management and is firmly committed to decade and work in public-private partner- Exponential technologies such as 5G, artificial
acting with integrity across its value chain. ships to support Giga in connecting every intelligence (AI) and IoT have the potential
school across the globe to the internet by 2030. to significantly increase productivity and effi-
Driving digital inclusion Through Ericsson’s flagship program Connect ciency and as an open innovation platform, 5G
About 2.7 billion people still lack access to the To Learn, 400,000 children and young adults will have a direct impact on a range of societal
internet 1). The unconnected disproportionately in 36 countries have been provided with access infrastructure and industry sectors including
live in low- and middle-income countries and to digital learning and skills development transport, manufacturing, energy utilities and
are more likely to be poorer, less educated, programs. public safety, to name a few.
older, rural and women. While increasing cov-
erage remains an important issue to address, Catalyzing Net Zero Connectivity is the backbone of sustainable
and solutions like fixed wireless access can The digital transformation of society and development
be a powerful tool for delivering broadband, industry is also a low-carbon one. The telecom Ericsson’s technology is critical to the digital
reducing the usage gap with relevant tools and industry is leading the race to zero emissions transformation of society and forms the back-
digital skills development is also key to closing both in terms of Net Zero commitments and bone of sustainable development, but to meet
the digital divide. through an industry-wide commitment to global challenges and realize opportunities,
Financial inclusion is also an important source renewable energy 2). technology needs to be scaled and Ericsson’s
driver for attaining social inclusion. Nearly one Ericsson has set an ambition to be Net Zero experience in driving eco-systems within and
quarter of the world’s adult population lacks across its value chain by 2040 and its most across industries, and in society is critical to
access to formal banking and financial services important contribution to climate change miti- achieve this.
according to World Bank Findex. However, a gation is delivering an energy efficient portfolio Ericsson was founded on the belief that
majority of unbanked people own a mobile that will help break the energy curve of mobile communication is a basic human need – and
phone that can help them access formal networks, reducing customers’ energy use, the Company has been a part of societal devel-
financial services. Today more than 80 million energy cost and carbon emissions. The opment for over 145 years. Today Ericsson is
consumers use mobile financial services pow- Company also works with suppliers to provide delivering technology, solutions and a platform
ered by Ericsson Wallet Platform every month, relevant tools and frameworks for business for innovation that support social connection,
many of whom were previously unbanked. partners to set their own 1.5 C-aligned targets. economic growth and a sustainable future.
1) The State of Broadband 2022: Accelerating broadband for new realities (2022) ITU/UNESCO Broadband Commission for Sustainable Development, p. 26, 978-92-61-36751-0.
2) Mobile Net Zero: State of the Industry on Climate Action 2022 (2022), GSMA.
3) Malmodin, Jens & Lundén, Dag. (2018).The Energy and Carbon Footprint of the Global ICT and E&M Sectors 2010–2015. Sustainability, 10.3390/su10093027.
4) Malmodin, Jens & Bergmark, Pernilla. (2015). Exploring the effect of ICT solutions on GHG emissions in 2030. 10.2991/ict4s-env-15.2015.5.
2 Strategy and targets Sustainability and Corporate Responsibility report 2022
Strategy and targets

Over the coming decades, the world will face transition, both as an enabler of decar- The materiality analysis also serves as a tool to
unprecedented challenges such as mitigating bonization and by creating and distributing provide input to the S&CR strategy.
and adapting to climate change and making the knowledge and innovation needed for Turning the strategy into reality is made
sure everyone on the planet can partake in the sustainable economic development. Ericsson’s possible by the people working for Ericsson
digital economy and society. In order to meet Sustainability and Corporate Responsibility around the world. They are the driving force
these challenges, more action is required from (S&CR) strategy is built on the potential of its behind realizing the Company’s vision: A world
both the public and private sector to transition technology deployed and used in the most where limitless connectivity improves lives,
to a low-carbon and circular economy while at responsible way. Ericsson regularly conducts redefines business and pioneers a sustainable
the same time addressing social inclusion. a materiality analysis1) to identify the envi- future.
Information communications technology ronmental, social and economic aspects most
(ICT) already plays an important role in this relevant to the Company and its stakeholders.
Sustainability and Corporate Responsibility strategy
Environmental sustainability Digital inclusion Responsible business
– Continuously improve energy performance – Explore and develop affordable internet – Conduct business with integrity to
of the portfolio access solutions mitigate risks and build trust
– Take climate action in own activities and – Scale meaningful connectivity and – Embed robust risk management practices
in the supply chain usability through partnerships across the Company
– Transition to a circular economy model – Offer scalable technologies for financial – Safeguard that the Company’s technology
– Provide ICT solutions that can enable inclusion is a force for good and not misused
decarbonization across industry sectors. – Support digital literacy and skills – Provide transparent reporting and dis
development. closures on par with global best practice.
Enabled by our people
– Work to ensure the health, safety and well-being of everyone working for Ericsson
– Build an inclusive and innovative culture that drives business performance through ethical decision-making
– Create a great place to work, where everyone feels included and proud to belong to a caring, flexible and world-class tech company
– Develop people with the right skillsets and mindsets in the right places, at the right time, to win business with integrity
– Enable fact-based and courageous decision-making through people analytics to drive people performance.
Ericsson’s technology – an enabler of sustainable development

Ericsson’s technology can contribute to the Connectivity drives sustainable Partnerships are key to bridge digital divides
achievement of many of the United Nations industrialization and innovation To help bridge the digital divide, Ericsson
Sustainable Development Goals (SDGs). From smart grids and building energy engages and collaborates with its customers
Examples include alleviating poverty through management systems, to autonomous and business partners, as well as international
mobile financial services, better access to vehicles and connected factories, connectivity institutions and civil society, in a connected
education through digital learning and reduced is the backbone of the digitalized economy. ecosystem. Through these partnerships,
GHG emissions through digital data-driven It is also an enabler of many of the trans- Ericsson supports people getting access to
solutions. However, Ericsson’s core contribu- formations necessary to ensure sustainable connectivity and the skills needed to fully
tion to the SDGs is through SDG 9 – Industry, economic growth and decarbonization of the participate in the digital economy and society.
innovation and infrastructure, and SDG 17 – economy. Ericsson provides the connectivity
Partnerships for the goals. These two goals are infrastructure and its customers provide the
central to Ericsson’s business as a technology communication services that industries require
leader. The Company creates and orchestrates to digitalize.
ecosystems and works across trusted partner-
ships to create positive impact at scale and
to meet the global challenges of today and
tomorrow.
1) See note O1 on page 40 for more information about the materiality analysis and how materiality should be interpreted in the context of the S&CR report.
Sustainability and Corporate Responsibility report 2022 Strategy and targets 3
Performance on goals and targets

Below is a summary of the performance and current status of Ericsson’s Sustainability and Corporate Responsibility goals and targets. Commentary
on performance highlights is presented on pages 4–9, and target specifics and detailed performance data can be found in the notes to this report on
pages 11–42.
Goals and performance targets Base year 1) Target year 2022 performance Status
Climate change mitigation

Net Zero GHG emissions across the
2020 2040
value chain, covering scope 1, 2 and 3
(to be submitted to SBTi 2))
Emissions reductions
More effort
– Reduce scope 1, 2 and 3 emissions 2020 2030 8% reduction
needed
by 50% (to be submitted to SBTi)
– Reduce scope 1, 2 and scope 3

categories Business travel and
2016 2022 60% reduction Achieved
Downstream transportation
Environment
emissions by 35% (SBTi verified)
Portfolio energy performance

– Achieve a 5G portfolio that is
2017 2022 10 times more energy efficient Achieved
10 times more energy efficient per
transferred data compared to 4G
– Achieve 35% energy savings in

Ericsson Radio Systems compared 2016 2022 39% savings Achieved
to the legacy portfolio (SBTi verified)
Supply chain engagement

Have 350 high-emitting and s trategic
225 suppliers with accepted
suppliers set their own Paris Agree- 2019 2025 On track
targets
ment-aligned emissions reduction
targets
Health and safety

Zero fatalities and lost workday More effort
2020 2025 8 fatalities and 131 LWIs
incidents (LWI) needed
Social
Diversity and inclusion

30% share of women among all More effort
2021 2030 25, 22 and 35% respectively
employees, line managers and needed
executive population
Ethics and Compliance

Governance
Strengthen and enhance the Ethics

Implementation
and Compliance program to ensure an 2019 2022 Extended to 2024
in progress
effective and sustainable anti-bribery
and corruption program
1) For targets tracked using a relative performance metric compared to a set baseline the base year is shown. For targets not tracked through a relative metric, the year the target was set (start year) is shown.
2) The Science Based Target initiative (SBTi) is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) that defines and
promotes best practice in emissions reductions and net-zero targets in line with climate science, including providing a second opinion on the ambition level of targets set by corporates and other entities.
4 2022 highlights – Environment Sustainability and Corporate Responsibility report 2022
2022 highlights – Environment

Value chain carbon footprint Net Zero by 2040 solutions to reach their full potential. Further,
Million metric tons of CO2e / %
Ericsson’s long-term ambition is Net Zero through the development of new technologies
35 greenhouse gas (GHG) emissions across its such as the Global Network Platform and
30
value chain by 2040. By 2030 the Company 5G, the decarbonization potential could be
30
28 28 has a target to halve value chain emissions further enhanced. Ericsson has throughout the
25 compared to a 2020 baseline, and aims to year continued to explore and demonstrate
20 achieve Net Zero emissions from its Own the enabling effect of ICT through use cases
91% 91% 91% Activities 1). Ericsson’s ambition is science where cellular IoT is used for digital energy
15
based and the Company is preparing to submit management in the property sector and higher
10 its new targets for verification by the Science efficiency in electric vehicle charging infra-
5 Based Targets initiative (SBTi). structure, to name a few. In parallel, Ericsson
8% 9% 9%
<1% <1% <1% In 2022, total value chain GHG emissions has contributed to a new standard from the
0
2020 2021 2022 were approximately 28 (28) million tonnes. International Telecommunications Union
91 (91)% of the footprint occurred down- for assessing how ICT solutions impact GHG
cope 1 and 2
S
Scope 3 Upstream
stream primarily from energy consumption emissions of other sectors 3).
Scope 3 Downstream of sold network equipment to customers,
and 9 (9)% occurred upstream in the supply Portfolio energy performance
chain. Scope 1 and 2 emissions accounted for Downstream emissions, mainly from products
less than 1 (<1)% of total emissions. Ericsson in use, represented 91 (91)% of total value
5G portfolio energy efficiency addresses emissions in all stages of the value chain emissions. This makes continuously
Energy performance ratio chain but the largest emission reduction improving energy performance of the portfolio
10
potential is connected with continuously key to reaching the Company’s medium- and
10.0x
9.3x
making the portfolio more energy efficient, long-term emissions reduction targets. Higher
8 and decarbonizing the supply chain through efficiency also creates financial value for cus-
supplier engagement, product design and tomers as it supports reducing energy-related
6.6x
6 material choices. operational expenditures. In 2022 Ericsson
5.5x Ericsson has continued to implement its Net achieved both of its portfolio targets, showing
4 4.2x Zero strategy during 2022, setting milestones significantly higher energy efficiency in its
for areas and activities with larger impact, Ericsson Radio System (ERS) radio portfolio.
2
such as product design and radio site energy Ericsson reached its target to make the
consumption. A carbon footprint calculation 5G portfolio 10 times more efficient for the
0
2017 2018 2019 2020 2021 2022 and tracking project was launched to improve same amount of transferred data compared
5G vs. 4G portfolio the accuracy of emissions accounting both for to 4G. By 2022, the Company’s third and
2022 target individual products and for the organization fourth generation massive MIMO 5G radios
as a whole. The ambition is to have a fully were 10.0 (9.3) times more energy efficient
digitalized system to track emissions and compared to 4G radios. If looked at in isolation,
empower business leaders to make the fact- fourth generation 5G radios were 10.6 times
based decisions necessary to deliver on the more efficient. Ericsson achieved this by using,
Company’s climate targets. among other things, highly efficient radio unit
To strengthen the link between sustainability power amplifiers and through improvements in
efforts and its strategic priority of technology Ericsson Silicon (ASICs), a dedicated, purpose-
leadership, Ericsson launched a green bond built system on a chip design solution that
framework verified by an independent third- makes it possible to create smaller and lighter
party. This enables the Company to access radios that consume less energy.
the growing market for green financing when Ericsson also had a SBTi-verified 2022
raising capital, primarily for R&D-related capi- target of 35% energy savings in its ERS remote
tal expenditures. radio units compared to the legacy portfolio.
The savings achieved in delivered ERS radios
Enabling effect of ICT by the end of 2022 were 39 (36)%. If savings
Ericsson’s research 2) shows that the potential from the Micro Sleep Tx energy savings func-
for ICT solutions to support other industries tion, which switches off components when
to decarbonize is substantial and much more no transmission is required, are included,
significant than the sector’s own carbon foot- the savings increase to 44%. This was made
print. Technologies such as electric charging possible by a combination of factors, including
infrastructure, smart grids and building man- improvements in radio unit design, multi-band
agement systems all depend on connectivity technology and hardware components such
1 ) Own Activities cover emissions in Scope 1, 2, and Scope 3 categories Business Travel and Employee Commuting.
2) Malmodin, Jens & Bergmark, Pernilla. (2015). Exploring the effect of ICT solutions on GHG emissions in 2030. 10.2991/ict4s-env-15.2015.5.
3) ITU Standardization L.1480: Enabling the Net Zero transition: Assessing how the use of ICT solutions impacts GHG emissions of other sectors.
Sustainability and Corporate Responsibility report 2022 2022 highlights – Environment 5
Supplier climate engagement as Ericsson Silicon. With multi-band technol- purchased renewable electricity. The share of
No.
ogy, the Company can efficiently combine purchased renewable electricity increased to
several radio units for two or more frequency 82 (75)%, which represented 67 (62)% of total
400
bands into a single physical unit. This signifi- facility energy consumption.
350
cantly improves energy efficiency as well as While emissions from business travel
300 reduces size and weight. increased to 25 (9) thousand tonnes, they
Going forward, Ericsson will increasingly were still substantially lower than their
225
200 leverage artificial intelligence and machine pre-pandemic levels. Ericsson has set a cap
learning, operating networks intelligently to on business travel to limit related emissions
100 121 meet traffic demand and deliver the best user to no more than 50% of pre-pandemic 2019
experience with the lowest energy use. levels. Emissions from downstream transpor-
35 tation were 116 (119) thousand tonnes.
0
2020 2021 2022 Supply chain climate action Combined, this meant the Company
Suppliers with accepted targets Supply chain emissions represented 9 (9)% of surpassed its SBTi-verified target to reduce
2025 target the total value chain carbon footprint. As part emissions from Own Activities by 35% by
of its Net Zero ambition, Ericsson is working to 2022, with achieved emissions reductions
reduce these through design improvements, being 60% from the 2016 target baseline.
transport efficiency and supplier engagement. During the year Ericsson has continued its
During the year, efforts to reduce the weight efforts to improve data quality including more
Performance on SBTi target and size of products have continued, and regular reviews of climate KPIs, continued
initiatives that target carbon intense materi- rollout of telematics in fleet vehicles and a
Kiloton CO2e
als and processes, such as aluminum, were more granular analysis of employees’ com-
600
560 launched. The Company has also explored muting habits. Priorities for the coming year
500 ways to capture supply chain emissions data include further improvements in data quality
–35% more efficiently and accurately. with a focus on automation, assessing Power
400
Ericsson has a target to by 2025 have 350 Purchase Agreement projects as a source for
300 high emitting and strategic direct suppliers set renewable energy and continuing the transi-
225 their own emission reduction targets aligned tion towards fossil free fleet vehicles. Energy
200
with the 1.5 C ambition. These suppliers, saving features at the USA 5G factory will be
100 together with their supply chains, represent rolled out to other manufacturing sites and
a majority of Ericsson’s supply chain related installation of on-site solar panels will be
0 //
2016 2022 carbon footprint. For a supplier’s target to be evaluated.
accepted, it must include a halving of emis-
Scope 3 (Business travel and downstream sions in relevant scopes by 2030 compared Transition to circular economy
transportation)
cope 2
S
to the target baseline, be made public and be Ericsson undertook two initiatives aimed at
Scope 1 accompanied by public reporting on progress. improving performance in product take-back
2022 target By year end, 225 (121) suppliers had set and the sale of refurbished equipment. The
targets that meet these criteria, putting the Company also developed a targeted training
Company on track to achieve its engagement course to raise internal knowledge on take-
target within the set timeframe 1). Ericsson back and re-use. In addition, the Company
Share of renewable electricity and continues to engage with those suppliers who analyzed emerging legislation and trends
energy at facilities have not yet set aligned targets. related to product take-back with the help of
Taking a collaborative approach to further a third-party advisor. Ericsson also analyzed
%
100 supply chain climate action, Ericsson hosted an how to increase relatively low take-back
online webinar together with the Exponential volumes and piloted the product reuse services
82
77
80 75 Roadmap Initiative and co-created the 1.5 C that were launched in 2021.
Business Playbook and Supplier Engagement
67
60
62 62 Guide with the aim to support companies to More information available in the notes to the
set 1.5 C-ambition aligned targets and to help S&CR report
40
them engage with their own supply chains. p. 11 E1 – Environmental management
20
p. 12 E2 – Climate change mitigation
Climate action in Own Activities p. 16 E3 – Climate related scenario analysis,
0
Scope 1 emissions were 38 (38) thousand risks and opportunities
2020 2021 2022 tonnes and were primarily related to the p. 17 E4 – Transition to circular economy
Share of renewable electricity
Share of renewable energy (electricity,
service vehicle fleet. Scope 2 emissions p. 18 E5 – Reporting according to article 8 of
heating, cooling, and stationary combustion) decreased to 45 (58) thousand tonnes, which the EU Taxonomy regulation
was primarily driven by larger volumes of
1) See note O2 on page 41 for an explanation on limitations regarding value chain reporting and disclosures.
6 2022 highlights – Social Sustainability and Corporate Responsibility report 2022
2022 highlights – Social

Lost workday incidents and Health, safety and well-being Work to reinforce an inclusive culture
fatalities Ericsson has a target to have zero fatalities continued with the addition of Inclusive
No. and lost workday incidents by 2025 and the Leadership as one of Ericsson’s critical skills,
150
Company continuously monitors a combina- supported by bespoke training that combines
143 145 tion of leading and lagging indicators on the the latest academic insight with online simula-
125
131 progression on this target. tions. Ericsson supports a network of employee
100
The number of fatalities decreased to resource groups and provides career accelera-
8 (14) and involved site service suppliers and tor programs to remove barriers to progression
75 third parties. Causes of fatalities were driving for underrepresented groups.
accidents and climbing or working at heights.
50
Lost workday incidents decreased to 131 (145) Talent attraction, retention and development
25
14
and involved both suppliers and employees. Ericsson’s Talent Acquisition strategy is built on
7 8
Reported incidents primarily involved slips, trips three key focus areas: demand planning and
0
2020 2021 2022 and falls, site installations, climbing and work- capacity; identifying key talent markets; and
Lost workday incidents ing at heights and manual lifting and handling. attracting and retaining talent with critical skills
Fatalities There was a 45% increase in reported near- – including cloud native (applications develop-
misses as a result of increased awareness and ment, architecture, design, and more on cloud
enhanced reporting capabilities. Ericsson also infrastructure). To enable this strategy, the
continued strengthening its supplier conse- Company has enhanced its sourcing capacity,
Breakdown of fatalities by cause quence management practices to drive further improved recruiter capability and invested
improvement in supplier safety performance in new technology to reduce complexity and
No. and health and safety risk management. provide a better hiring experience.
15 14 A new mandatory health, safety and well- A global recognition program available to
being induction course for employees and more than 85,000 employees at year end was
3
contingent workers was launched with a 92% launched to drive engagement and recognize
10
completion rate. impact. From 2023 onwards, the program will
8
7 A mental health training program was be available to more than 100,000 employees
6 introduced and campaigns on musculoskeletal globally. Since 2021 the Company has an
5 4 health were carried out in order to reduce health employee share purchase plan in place with
4
risks and increase understanding of self-care. the aim to encourage employees to take an
3 5 4 Future priorities include increasing understand- individual stake in achieving the Company’s
0
2020 2021 2022
ing about mental health and financial literacy, goals, and through this reinforce a sense of
raising awareness on psychologically safe ownership. At the end of 2022 the plan was
Other 1) working environments and on non-communica- implemented in 78 countries and available to
all from heights
F ble diseases such as cancer and cardiovascular about 89,000 employees, with a participation
Traffic/driving accident
1) Detailed information in note S2 on page 24. illnesses, and reviewing benefit coverage. rate of 18.9 (15.8)%. Deployment in additional
countries is planned for 2023.
Diversity and inclusion Ericsson has continued to work towards pay
Ericsson has a target to achieve at least 30% equity and put additional efforts into finding
representation of women at all levels of the ways to measure and better understand the
Share of women per employee
Company by 2030. To support this target, reasons behind gender pay gaps across the
category
the shareholders at the 2022 annual general Company.
% meeting approved linking part of the variable Employee satisfaction scores remained
40 compensation to executives to a performance high at 81 (81) points and continued to be
35.6 35.0
31.8
criteria where the share of women in line above the benchmark value for comparable
30
manager positions is to increase to 23% by companies in the industry which was 77 (73).
24.5 25.2 25.5 2024. During the year, the share of women line Over 19,000 employees were trained in the
20.6 21.3 21.7 managers increased to 21.7 (21.3)%. Among all critical skills of artificial intelligence (AI) and
20
employees, the share increased to 25.5 (25.2)% automation, with plans to double this number
while decreasing to 35.0 (35.6)% within the in 2023. Two new pathways for upskilling the
10 executive population. Ericsson worked with its workforce in power skills (collaboration, com-
recruitment partners to have a fifty-fifty gender munication and stakeholder management)
0 balance for early career and graduate hires and cloud native were launched during the
2020 2021 2022
as part of the strategy to attract more diverse year. This was enabled through the learning
All employees candidates. The Company also progressed on platform Degreed, which covers more than
Line managers
Exec. population gender balance through its ALTitude career 20,000 skills and was used by 97% of the
2030 target accelerator program for women, with a third of workforce who completed 3.0 (3.1) million
program graduates progressing to more senior online learning sessions during the year. The
positions within a year. volume of completions on Degreed more
Sustainability and Corporate Responsibility report 2022 2022 highlights – Social 7
Employee satisfaction than doubled during the COVID-19 pandemic A record-breaking company-matched
eSAT score
as people were working remotely. In 2022, employee donation drive was carried out dur-
the volume decreased slightly as employees ing the early stages of the war in Ukraine, and
100
transitioned into a hybrid working model and Ericsson has continued to support relief efforts
83
80
81 81 were able to participate in more onsite learn- with monetary and in-kind donations, technical
77 ings, interacting with teams and colleagues. support, and volunteer hours. As the Ukraine
73 73
60 Employees are encouraged to gain experience emergency situation unfolded UNHCR RETS 1)
through internal job moves supported by an called upon partners, and Ericsson Response
40 open talent market and targeted succession mobilized to support refugees in neighboring
planning. countries by deploying communication equip-
20 ment in Moldova which increased the country’s
Human rights capacity to receive and assist refugees.
0
2020 2021 2022 During the year, Ericsson underwent its Support to UN operations in Columbia for
Ericsson employees first assessment as a member of the Global Venezuelan refugees initiated in 2021 contin-
Benchmark Network Initiative. The third-party assessor ued in 2022 and Ericsson Response deployed
concluded that Ericsson overall has adequate a team to the La Guajira region to provide
processes and policies in place related to and improve connectivity for refugee service
human rights. Key areas of improvement centers. The WFP-led ETC 2) and Ericsson
highlighted included more comprehensive Response also deployed after Typhoon Odette
Digital education – Connect to Learn
human rights training and clearer policies hit the Philippines, providing connectivity to
Thousands No. when acting on government requests on humanitarians in affected areas.
500 50 behalf of customers, as well as better under-
standing of how equipment is used post-sale. Digital inclusion
400
400 40 Ericsson is committed to implementing these Mobile broadband is one of the most cost
30 36 recommendations and to further strengthen- efficient technology options to connect society
300 30
25 296 ing its due diligence processes for a more and fixed Wireless Access (FWA) is an efficient
proactive approach to human rights-related and scalable alternative to wired connec-
200 227 20
risk management. tions and a portfolio solution that can benefit
A new Human Rights strategy was adopted institutional coverage. Almost 40% of the new
100 10
which included identification of key transfor- 5G FWA launches in the past 12 months have
0 0 mations needed to align with international been in emerging markets.
2020 2021 2022
best-practice and standards. This covers The Ericsson Wallet Platform supported
Impacted children and youth, thousands improving due diligence frameworks across the 379 (314) million registered mobile wallet
Countries deployed, no.
value chain, as well as preparing for new legal accounts and over 80 (65) million active
requirements on human rights, in particular consumers in 24 countries use mobile financial
related to supply chain traceability. services powered by the Platform every month,
Ericsson has engaged in the Action many of which were previously unbanked.
Ericsson Mobile Wallet accounts Coalition on Responsible Technology, part of The Platform has enabled many businesses
and active users the Tech for Democracy initiative. One of the and organizations to accept digital payments
Million
main contributions is a project to map the ICT accelerating the growth of cash-light digital
ecosystem to better understand the respon- economies.
400
sibilities related to human rights of different To date Ericsson has positively impacted
379
actors. 400,000 children and young adults in 36 coun-
300
314 tries by providing access to digital learning
268 Corporate citizenship and skills development programs through its
200 Ericsson launched a global volunteering portal Connect To Learn initiative.
during the year to facilitate opportunities
100
for employees to use their time and skills for More information available in the notes to the
80 volunteering. S&CR report
65
53
The Company continued to invest in p. 21 S1 – Human Capital
0
2020 2021 2022 connected reforestation projects by entering p. 24 S2 – Health, safety and well-being
Accounts a new project in India, complementing the p. 25 S3 – Human rights
Monthly active users existing ones in Malaysia and the Philippines, p. 27 S4 – Corporate citizenship
with the aim to plant 100,000 mangroves and p. 29 S5 – Digital inclusion
20,000 fruit bearing plants.
1) United Nations High Commissioner for Refugees – Refugee Emergency Telecommunications Sector.
2) World Food Programme – Emergency Telecommunications Cluster.
8 2022 highlights – Governance Sustainability and Corporate Responsibility report 2022
2022 highlights – Governance

Compliance and anti-bribery and Compliance and business ethics and in 2021. More details, including reported
corruption training completion rates Ericsson has continued to strengthen and cases broken down by category, are available
% develop its Ethics and Compliance (E&C) in note G2 on pages 32–33.
100 99 97 Program, now with a renewed focus on integrity During the year, 178 (233) corrective and
93
90 as part of the Company’s culture. Specifically, disciplinary actions involving individuals found
82
80 Ericsson launched a company-wide strategy to be in breach of the company’s Code of
70
that focuses on prioritizing integrity as part of its Business Ethics were taken. 39 of these actions
60 culture and ways of working to foster account- resulted in terminations, and 74 in written
ability, build trust and respect with customers, warnings. 8 individuals resigned as a result
40
business partners, and regulators, and drive of confirmed misconduct.
sustainable success. The Company continues to
20
support and encourage its employees and busi- Anti-bribery and corruption
ness partners to take part in the transformation In December 2019, Ericsson entered into a
0
All workforce Enhanced Ethics training by providing them with tools and information to resolution with the United States Department
ABC training ABC training for leaders
make fact-based, integrity-driven decisions. of Justice (DOJ). The resolution included a
2021
2022
To help employees identify and appro- deferred prosecution agreement (DPA), and a
priately interact with public officials and guilty plea by Ericsson’s Egyptian subsidiary to
customers who are state-owned, an interactive a criminal violation of the US Foreign Corrupt
State Owned Entities (SOE) Map was made Practices Act’s (FCPA) antibribery provisions.
available during the year. To help treat officials As part of the DPA with the DOJ and consent
Reported and substantiated
compliance concerns of SOEs with greater sensitivity and care from judgment with the U.S. Securities and Exchange
an E&C perspective, global customer designa- Commission (SEC), Ericsson agreed to engage
No.
tions were also made available to employees. an independent compliance monitor for three
1,200
1,092 During the year, gift, entertainment and years while the Company continues to under-
1,000 hospitality, and conflict of interest functionali- take significant reforms to strengthen its E&C
ties have been migrated into Ericsson’s Ethics Program.
800
& Compliance Portal, a single platform for In October 2021, the DOJ notified Ericsson
600 front-end recording and tracking, and back- of its determination that the Company
end monitoring and testing to ensure full breached its obligations under the DPA by fail-
400
visibility and control of relevant processes. ing to provide required information to the DOJ.
200 Ericsson has continued to provide trainings In March 2022, the DOJ informed Ericsson
118
to increase awareness around ethics and that, before entering into the DPA, the
0 integrity among its workforce. All employees Company provided insufficient information
Reported1) Substantiated2)
are required to take foundational anti-bribery to the DOJ about the Company’s internal
1) All reported cases received in 2022. and corruption (ABC) training courses, and investigation into conduct in Iraq. The DOJ also
2) All cases concluded and deemed as s ubstantiated
during 2022, some of which were received in
enhanced ABC training is mandatory for determined the Company breached the DPA by
previous years. line managers and people in exposed roles. failing to inform the DOJ about the investiga-
Completion rate among the target audiences tion post-DPA, and in June 2022, the SEC
was 93 (99) and 97 (82)% respectively. The informed the Company that it had opened an
ethics training for leaders continued during investigation concerning matters described in
Corrective and disciplinary actions taken1) the year in the form of online instructor-led the Company’s 2019 Iraq investigation report.
workshops around ethical and integrity-related In December 2022, the Company agreed
No. 0 20 40 60 80 100
dilemmas. It had reached 90 (70)% of the with the DOJ and SEC to extend the term of the
Termination 39 target audience by year end. Company’s independent compliance monitor for
one year, until June 2024. In addition, on March
Demotion 4
Reported compliance concerns 2, 2023, the Company reached a resolution with
Written warning 74 In 2022, the number of reported compliance the DOJ regarding non-criminal breaches under
46
concerns was 1,092 (1,059). Out of these, its DPA (DOJ Plea Agreement). Under the DOJ
Verbal warning
215 cases were referred for further investiga- Plea Agreement, Ericsson will plead guilty to
Resignation 8 tion. 877 cases were not referred for investiga- previously deferred charges relating to conduct
tion as they were inquiries of a general nature prior to 2017. In addition, Ericsson agreed to pay
Other 7
or not deemed to be related to misconduct or a fine of USD 206,728,848. The entry of the DOJ
Total: 178 breaches of the Code of Business Ethics. When Plea Agreement will bring the DPA to an end.
1) Actions taken as a result of substantiated breaches of applicable, these cases were referred directly to With respect to the matters described in the 2019
Ericsson’s Code of Business Ethics. Each corrective action the relevant units for attention or remediation. internal Iraq investigation report, the Company
represents a unique individual meaning the total of
actions shown here cannot be directly compared to the During the year, 118 (237) cases were con- continues to thoroughly investigate the matters
number of substantiated cases shown above, as each cluded and found to be substantiated. At year in full cooperation with the DOJ and the SEC.
case may involve several individuals. An individual can be
subject to several corrective actions but is only counted end, 209 cases were still under investigation; As previously disclosed, the Company’s 2019
once in these statistics, with the most severe consequent this figure includes cases reported both in 2022 internal Iraq investigation did not conclude that
determining classification in the above presentation.
Sustainability and Corporate Responsibility report 2022 2022 highlights – Governance 9
Ericsson made or was responsible for any pay- benefits. As for other non-conformities, most authority closed the file with no further action.
ments to any terrorist organization and the Com- were related to health and safety. All-in-all the Company detected and resolved
pany’s significant further investigation over the Ericsson also conducted 15 (24) Contract security events and incidents in an efficient
course of 2022 has not altered this conclusion. Compliance audits. Most of the critical non- manner and stopped smaller incidents from
On January 12, 2023, the Company conformities identified concerned occupational expanding in severity or scale. During the year
announced that a provision in the fourth quar- health and safety and quality management there were no significant 2) security incidents.
ter of SEK 2.3 billion (approx. USD 220 million) systems, while most of the minor non-conform-
in relation to the DOJ Plea Agreement had been ities concerned suppliers’ processes for assess- Advocacy and policy influence
made. The provision also included estimated ing intellectual property rights limitations, as Ericsson has continued to promote sound
expenses (SEK 0.1 billion) for the previously well as processes for handling claims. business conditions for the telecommunication
announced extended compliance monitorship. Ericsson views each audit as an opportunity industry with a focus on topics such as net neu-
The Company has and continues to for improvement and establishes correc- trality, security, privacy, artificial i ntelligence,
strengthen its approach to governance and tive action plans with suppliers to address data policy, intellectual property rights and
risk management, including through the non-conformities. The closure rate of all non- spectrum management and allocation, as well
implementation of enhanced internal policies conformities identified at CoC audits was 73%. as climate change mitigation and human rights.
and practices and continued, active oversight Ericsson has strengthened its human rights The Company’s aim is to show technology
by the Board and Executive Team. There is competencies in the sourcing organization leadership and act as a trusted advisor, basing
more information on this on pages 22–23 of during the year to meet increasingly higher its advice on scientific and fact-based informa-
the Financial report and in note G2 on pages stakeholder expectations in the area 1). tion. Ericsson is an active member of several
32–33 of this report. industry organizations and partnerships that
The E&C Program has continued to evolve Security and privacy jointly develop policies and show thought
over the last several years. Today, Ericsson is Ericsson has continued to strengthen opera- leadership by developing digitalization use
better positioned to prevent a recurrence and tional and portfolio resilience by executing on cases. Examples include active engagement
to uncover and respond to misconduct when its security and privacy strategies. Key efforts in the CEO Alliance for Europe, where the
it occurs. and initiatives included: Company contributes to projects focused on
The process for vetting and oversight of the – enhancement of Security & Privacy by digitalization and energy supply, and Digital
third parties has continued to develop in order Design in Ericsson’s product and solutions Europe, where it drives climate and environ-
to enable Ericsson to choose parties that meet value chain through assessment of cus- mental topics. Ericsson has also contributed to
the Company’s expectation of zero tolerance tomer needs and local requirements. an international training program called ICT
for bribery and corruption. Through the global – updating Ericsson’s Binding Corporate Regulation – Policy and Practice, commis-
Third-Party Management (TPM) Program, Rules and implementing a data m apping sioned by the Swedish International Develop-
Ericsson identifies and mitigates corruption program covering data flows within ment Cooperation Agency.
and integrity-related risks in the context of the Group. Ericsson has hosted frequent government
third-party relationships. Ericsson further – expansion of security monitoring and visits to the Ericsson Imagine Studio in Stock-
embedded E&C guidance into the M&A process threat detection capabilities throughout holm, which have served as an opportunity to
to increase oversight of strategic transactions the Company. showcase, for example, 5G use cases. During
and the Company’s portfolio of non-wholly – setting new architecture principles to the year the Company also conducted a
owned companies. enable gradual implementation of Zero thorough review of its binding framework for
Trust throughout the IT-environment. government and policy advocacy and adopted
Responsible sourcing – optimization of security measures in new mandatory requirements that meet the
As part of the Responsible Sourcing Program, high-risk areas, including implementation highest standards on ethics and compliance for
audits of suppliers continued during the of stricter requirements for suppliers work- engaging with public officials.
year. In China, some audits were delayed or ing in such areas and quicker access to
postponed due to lockdowns related to the exhaustive intelligence analysis support to More information available in the notes to the
COVID-19 pandemic. When on-site audits mitigate operational risks for Ericsson and S&CR report
were not possible due to travel restrictions, the supplier personnel. p. 31 G1 – S&CR Governance
Company carried out initial audits remotely p. 32 G2 – Compliance and business ethics
with follow-up audits performed on site. Every year Ericsson identifies and manages p. 35 G3 – Supply chain and responsible
The Company conducted 114 (124) numerous attack attempts, vulnerabilities and sourcing
Code of Conduct (CoC) audits. Critical non- security events and incidents. For example p. 37 G4 – Security and privacy
conformities were identified at 6% of the the Company experienced a breach that p. 38 G5 – Advocacy and policy influence
suppliers audited in the past 24 months. Most was reported to the applicable supervisory
of these concerned working hours, wages and authority and for which the supervisory
Board of Directors

Org. no. 556016-0280
2) A significant security incident is cross-functional, complex/severe, or high impact in nature, potentially affecting multiple o
rganizations, markets, business areas and/or customers.
10 Consolidated sustainability notes Sustainability and Corporate Responsibility report 2022
Notes to the Sustainability

and Corporate Responsibility report
Contents
Environment
11 E1 Environmental management
12 E2 Climate change mitigation
16 E3 Climate related scenario analysis, risks and opportunities
17 E4 Transition to circular economy
18 E5 Reporting according to article 8 of the Taxonomy regulation
Social
21 S1 Human capital
24 S2 Health, safety and well-being
25 S3 Human rights
27 S4 Corporate citizenship
29 S5 Digital inclusion
Governance
31 G1 Sustainability and corporate responsibility governance
32 G2 Compliance and business ethics
35 G3 Supply chain and responsible sourcing
37 G4 Security and privacy
38 G5 Advocacy and policy influence
Other – Basis for preparation

40 O1 Stakeholder engagement and materiality
41 O2 Reporting principles, scope and external assurance
42 O3 Restatements of information
Sustainability and Corporate Responsibility report 2022 Consolidated sustainability notes 11
Section E – Environment
E1 Environmental management
Impacts, risks and opportunities Water usage
Ericsson’s environmental aspect and impact assessments are based on a Water used at facilities is mainly consumed for sanitary purposes and comes
Life-Cycle Assessment (LCA) approach and show that the direct environmental from municipal water supplies. Fresh water is not directly drawn from ground or
impacts of the Company’s operations are relatively limited in comparison with surface water sources.
the indirect impacts that occur upstream and downstream in the value chain.
There are, however, environmental regulations with which Ericsson needs to Land use and biodiversity
comply, in particular in relation to products and production sites. Ericsson’s facilities, including offices, data centers, test labs and production
sites, are located in urban or semi-urban areas with limited impact on land use
Governance and policies and surrounding ecosystems.
The Company’s Environmental Management System (EMS) is part of the In some instances, Ericsson supports customers when building telecommu-
Ericsson Group Management System (EGMS) with group responsibility nication sites. In such cases Ericsson's standard procedures include considering
delegated to the Sustainability and Corporate Responsibility unit. Operational location selection as part of minimizing the environmental impact from land use.
responsibility is delegated to relevant business and market areas, supported by
Environmental Health and Safety subject matter experts. Performance metrics
The Company’s Sustainability Policy sets out the foundation for Ericsson’s
approach to environmental management. A group directive on the EMS is in Environmental incidents reported
place to ensure a systematic approach within the Group and to clarify responsi- (No.) 2022 2021 2020
bilities of units and individuals in relation to the Sustainability Policy. Significant incidents 1) – – –
1) A significant environmental incident is defined as an unplanned event that has resulted in, or may
Management approach result i, severe long-term negative environmental impact, including impact on air, water, land, natural
resources, flora and/or fauna.
Environmental Management System
Ericsson continuously strives to minimize the negative impacts of its own Waste generated in operations by disposal method 1)
operations. The EMS is certified to the ISO 14001:2015 standard, covering (metric tons) 2022 2021 2020
management, research, product management, development and supply, sales
Recycling 3,782 4,573 3,370
and installation, and maintenance of hardware, software, services and solu-
Reuse 335 – –
tions for information and communications technology.
Energy recovery (incineration) 2,003 1,429 1,465
The EMS, as an integrated part of the EGMS, builds on group-wide processes
Landfilling 1,922 740 2,065
such as audits and assessments and management reviews. Environmental
Hazardous waste 88 35 16
aspects are assessed to identify significant ones which forms the basis for
Total 8,130 6,777 6,916
setting targets. Environmental compliance obligations are monitored on a
country level to ensure that Ericsson meets environmental requirements. 1) Reported volumes of waste from production sites are based on measured data. Waste from other facil-
ities are estimates based on extrapolations of waste generated at the Company's headquarters. Other
In addition to Ericsson´s Enterprise Risk Management (ERM) framework, a facilities include offices, warehouses, data centers and labs.
specific Environmental Risk Management framework, which is aligned to EMR,
is in place. Water consumption 1)
The Company has an incident reporting system through which employees
(Mm3) 2022 2021 2020
and suppliers to report environmental incidents. Incident reporting is part of
All facilities 1.05 1.15 1.55
the environmental requirements for suppliers included in the Ericsson Code of
Conduct for Business Partners.
1) Out of total reported water consumption, approximately 57% of the Group’s headcount is covered by
measured data, with the remaining being estimated based on extrapolations of the measured vol-
umes.
Energy usage
Ericsson’s facilities primarily use purchased electricity as the source of energy
and, to a lesser extent, externally sourced cooling and heating. Direct combus-
tion of fossil fuels is limited to service vehicles, backup generators and local
heating at a limited number of sites. For more information on energy usage see
note E2 on page 12.
Waste generation and disposal

The waste generated in Ericsson’s operations is primarily office waste, which is
handled locally. Waste generated at production sites is managed according to
local legislation by local waste management companies. Ericsson also offers a
global program through which customers’ end-of-life products can be collected
and recycled. For more information on the Take-Back program see note E4 on
page 17.
E2 Climate change mitigation

Impacts, risks and opportunities Ericsson’s 2040 Net Zero ambition
The Information and Communications Technology (ICT) sector represents ktCO2e
a small share 1) of global greenhouse gas (GHG) emissions, with emissions 30,000
primarily derived from the sector’s energy consumption. According to Life-Cycle
Assessments (LCAs) conducted by Ericsson, the vast majority of the emissions, 50% reduction Net Zero across
approximately 91%, occur downstream in the value chain. Upstream emissions across value chain value chain
represent around 9% of total value chain emissions, while emissions from

Ericsson’s direct operations (Scope 1 and 2) represent less than 1% of the total
carbon footprint.
Downstream emissions primarily stem from electricity consumption in the
use phase of sold products 2). The rollout of mobile communication genera-
tions (such as 2G, 3G and 4G) has historically increased the total mobile
network energy consumption. The increase has been about the same for each 0
mobile generation. However, Ericsson’s research shows that it is not primarily
increased data traffic that has led to increased energy consumption. Instead, it -5,000
is the surface coverage and the installation of new equipment when deploying 2020 2030 2040
new generations of mobile networks that has driven increased energy usage. Reported value chain emissions (covering scope, 1, 2 and 3)
Indicative emissions trajectory
The ICT sector must address its own carbon footprint, but it can also play 2030 milestone
an important role in enabling other sectors in their decarbonization efforts. Negative emissions through for example Carbon Capture and Storage (CCS)
Many of the solutions needed in other sectors to reduce emissions, such as
management systems and smart meters in buildings, smart electrical grids, Total value chain emissions shown in the graph above should be considered illustrative of Ericsson’s Net
Zero transition plan, as they include forward-looking estimates of future emissions. Ericsson is continu-
telematics, and storage and inventory management solutions in enterprises, ously working to increase the accuracy of emissions data for different stages of the value chain, especially
are all dependent on ICT solutions and infrastructure to function. Ericsson’s emissions occurring upstream and downstream in the value chain. More details on emissions per scope and
information about the Company’s GHG accounting methodologies can be found below.
own peer reviewed research 3) suggests that ICT solutions have the potential to
enable decarbonization of up to 15% in other sectors by 2030, not considering
the enabling potential of 5G and the Internet of Things. If these technologies
are also considered, the enabling potential is assumed to be even higher. Scope 1 direct emissions
For more information about climate-related risks and opportunities, based Ericsson is working to replace its fleet of combustion engine service vehicles
on Ericsson’s climate scenario analysis, see note E3 on page 16. with a low-emission fleet. The transformation will take place gradually, with
some countries and market areas expected to transition faster than others
due to differences in availability of low- or zero tailpipe emissions vehicles
Governance and policies
and market conditions. In addition, the Company plans to increase the cover-
The Executive Team governs Ericsson’s Sustainable Business Program, of
age and use of fleet management systems and telematics where feasible to
which climate action and network energy performance are two workstreams.
optimize fleet utilization and reduce unnecessary trips. Backup generators and
Ericsson’s Sustainability Policy sets out the Company’s foundational princi-
local heating using fossil fuels at facilities will be phased out or replaced with
ples with regard to environmental sustainability, including climate change
low-emitting alternatives wherever possible. Technical building requirements
mitigation.
specify limits on the maximum global warming potential for refrigerants used
Group climate strategy and targets are coordinated and driven by the
at facilities.
central Sustainability and Corporate Responsibility unit. On an operational
level, climate action strategies and policies are integrated across business and
Scope 2 indirect emissions
market areas, and Group functions, with each organization being responsible
Ericsson aims to source 100% renewable energy at its facilities by 2030. In
for executing on its respective strategies and targets.
addition, Ericsson works together with facility management companies to
improve the energy efficiency of its facilities. The majority of facilities Ericsson
Executive variable remuneration
occupies are leased.
A portion of the variable remuneration to executives is determined by perfor-
mance on selected elements of the Company’s emissions reduction targets.
Scope 3 upstream emissions 5)
See page 8 of the Remuneration report for further information.
Ericsson engages with its high-emitting and strategic tier 1 suppliers to encour-
age them to set their own 1.5 C aligned emissions reduction targets, in line with
Management approach the Paris Agreement. For targets to be accepted by Ericsson, they need include
Ericsson takes a value chain approach to climate change mitigation, based a commitment to halving emissions in relevant scopes by 2030, be made public
on the Company’s LCAs of the carbon footprint of its products and services. and the supplier must commit to publicly and at least annually report on pro-
The strategy is to reduce both direct and indirect emissions in line with the gress toward their targets. Ericsson continues to engage with those suppliers
Paris Agreement’s ambitions of limiting global warming to 1.5 C compared who have not yet set aligned targets.
to preindustrial times. To reduce the emissions embodied in hardware products, Ericsson applies
other measures such as product design and material choice/substitution and
Net Zero transition plan recycling. There is more information on this in note E4 on page 17 of this report.
Ericsson has an ambition to achieve Net Zero 4) value chain emissions by To prevent emissions from business travel from returning to their pre-
2040, with a medium-term target to achieve a reduction of 50% across the pandemic levels, Ericsson has decided to cap business travel emissions at 50%
value chain by 2030. Described here are the most significant actions that of their 2019 levels, with each business and market area, Group function and
the Company plans to take to reach this target. sub-units being allocated yearly emission budgets for business travel.
1) Malmodin, Jens & Lundén, Dag. (2018).The Energy and Carbon Footprint of the Global ICT and E&M Sectors 2010–2015. Sustainability, 10.3390/su10093027.
2) Use phase emissions reported in one year include the total assumed lifetime emissions of products sold in that same year. See more information on accounting methodologies on page 15.
3) Malmodin, Jens & Bergmark Pernilla. (2015). Exploring the effect of ICT solutions on GHG emissions in 2030. Atlantis Press, 10.2991/ict4s-env-15.2015.5.
4) Implying emissions reductions of at least 90% within the set timeframe in the selected scopes.
Note E2, cont’d.

Scope 3 downstream emissions 1) with real-time data exchange, automatic grid fault detection, distribution
Ericsson’s approach for reducing indirect downstream emissions from the automation, connected electric vehicle charging and building energy manage-
use of products and services is through improved energy efficiency of the ment and optimization.
Company’s solutions, which includes both hardware and software. A focal Ericsson will continue to assess the use of ICT solutions in reducing GHG
point is ensuring the rollout of 5G does not result in an increase in the energy emissions of other sectors following the International Telecommunication
consumption of customers' mobile networks, as has been the case with rollouts Union’s (ITU) standards and methodologies for making such assessments and
of previous generations of mobile communication networks. This involves: quantifications. This requires companies to assess all types of effects, including
– Investments in R&D to increase the energy efficiency of the portfolio. the rebound effect 3).
– Planning networks both from a performance and an energy usage
perspective. Research and contributions to standardization
– Modernizing equipment and operating the networks intelligently. Ericsson conducts research into the direct and indirect environmental impacts
– Using artificial intelligence, machine learning and other features to reduce of the ICT sector and has for several years used LCAs to understand its portfo-
energy use during times of low network load. lio’s carbon and environmental footprint. In addition, the Company contributes
to the development of methodologies for assessing these impacts. One exam-
In addition to the Group’s targets presented on the next page, the Company ple is the ITU’s Net Zero standard, which guides companies in the sector on
has an ambition to reduce the energy consumption of a typical new radio base setting Net Zero targets, to which Ericsson contributed.
station site by approximately 40% by 2025, compared to a 2021 baseline. To
further reduce Scope 3 downstream emission, customers also need to transi- Training and awareness raising
tion to low-carbon and renewable energy sources. Reducing energy demand, Climate action is one of nine critical skills identified for Ericsson’s workforce.
and subsequent consumption, are important steps in making the transition to A framework has been developed to upskill all employees based on the level of
renewable energy sources easier and more financially viable. needs in their respective roles, ranging from introductory to advanced training,
Besides improved energy efficiency, Ericsson can support customers with with the lower levels already available to all employees.
integration of on-site renewable energy generation such as solar and wind
energy at base station sites. By using the same management system to control Collaborations and partnerships
the radio-access network and the renewable energy sources, the energy supply Ericsson leverages its efforts through collaborations and partnerships with
and demand can be optimized for the site conditions. More details on how other organizations. As a general principle, any commitment or collaboration
Ericsson is aiming to reduce energy consumption of mobile networks are avail- must be based on a scientific approach for Ericsson to consider endorsement.
able in the Breaking the Energy Curve report on the Company’s website 2). In the table below, the most significant external collaborations related to
For emissions related to product transport, Ericsson is utilizing increased climate change mitigation are listed.
data visibility and an internal shadow price on carbon to optimize transport
planning and thereby reduce emissions. Organization Engagement objective
1.5 °C Supply Chain Member of the 1.5 °C Supply Chain Leaders work together to
Carbon removals Leaders drive climate action through global supply chains and support
Ericsson may consider using carbon removal technologies, such as Carbon small and medium-sized enterprises (SMEs) through the SME
Climate Hub. The partnership aims to support suppliers in halv-
Capture and Storage, to neutralize the unavoidable part of value chain ing emissions before 2030 and achieving Net Zero emissions
emissions. If such technologies are employed, they will not represent more before 2050.
than around 10% of the base year carbon footprint and must adhere to high CEO alliance for Europe The CEO Alliance for Europe is a cross-sector collaboration
standards to ensure effectiveness and trustworthiness of Net Zero claims. between 13 companies, with over 1.5 million employees and
500 BEUR in annual revenue working for a more sustainable
and resilient Europe, with a focus on digitalization and
Internal price on carbon decarbonization.
Ericsson has introduced an internal shadow carbon price of USD 100 per metric European Green Digital The European Green Digital Coalition is an initiative by a group
ton of carbon dioxide equivalent (CO2e) as a pilot project within the process for Coalition of ICT companies, supported by the European Commission and
sourcing outbound transportation of products such as radios and antennas. the European Parliament, that aims to promote and harness
The shadow price is included in the landed cost model used to calculate the the enabling emission-reducing potential that digital solutions
can have in other sectors.
total price of outgoing deliveries of certain hardware product categories. The
Exponential Roadmap The Exponential Roadmap Initiative brings together innova-
aim is to visualize the cost of carbon related to downstream transportation
Initiative tive and transformative businesses taking action in line with
when calculating and deciding on transport routes for outgoing shipments limiting global warming to 1.5 C. The purpose is to accelerate
sourced by Ericsson. exponential climate action and solutions, integrate climate in
business strategies and influence climate action in society, with
the mission to halve emissions before 2030. The initiative is an
Product energy certifications accredited partner of the United Nations’ Race To Zero.
The majority of the product portfolio, made up of communication network
Pathways Coalition The Pathways Coalition aims to accelerate decarbonization of
hardware such as radios and antennas, is currently not covered by any third- heavy transport with member companies committing to the
party managed certification scheme for energy efficiency. Products eligible for vision of the Coalition: to reach zero CO2 emissions no later
certification, such as servers, constitute a smaller part of the product portfolio. than 2050.
These are currently not certified according to any such scheme. We Don’t Have Time We Don't Have Time provides a platform for the dissemination
of knowledge, discussion and rating of businesses and public
individuals from a climate perspective. Together with Ericsson
Enablement strategy the partnership broadcasts Exponential Climate Action
For many sectors, cellular technology has accelerated the digitalization process Summits to increase awareness of the need for climate action.
and proven to create value through improved productivity, safer workplaces We Don't Have Time is a member of the UN-backed Race To
Zero campaign and the Exponential Roadmap Initiative.
and more environmentally sustainable operations. As an example, cellular
connectivity helps accelerate the transformation of utility companies in an World Economic Forum The Alliance of CEO Climate Leaders is a global community of
– Alliance of CEO Chief Executive Officers who work towards climate action
environment where energy costs as well as demand for electricity is increasing. Climate Leaders across all sectors and engage with policymakers to help deliver
Cellular technology has the potential to further provide companies in this sector the transition to a Net Zero economy.
2) Report available on the Sustainability and Corporate Responsibility pages on ericsson.com, under the heading Network Energy Performance.
3) The reduction in expected gains from new technologies that increase the efficiency of resource use, because of behavioral or other systemic responses.
Note E2, cont’d.

Targets
Emission reductions
Long-term
Net Zero value chain emissions by 2040. This implies at least a 90% reduction of emissions in scope 1, 2 and relevant scope 3 categories from a 2020 baseline, and
the potential use of carbon removal and storage technology for the remaining unavoidable 10% of emissions.
Medium-term
Base year emissions Reduction Use of carbon
Emissions in scope Base year Target year Scope SBTi status
(kiloton CO2e) target (%) removal technology
Scope 1 40
Scope 2 (market-based) 74 50 (all scopes) 2020 2030 Company-wide Potentially To be verified
Scope 3 (all relevant categories) 29,923
Total 30,036
Short-term
Base year emissions Reduction Use of offsets
Emissions in scope Base year Target year Scope SBTi status
(kiloton CO2e) target (%) or removals
Scope 1 75
Scope 2 (market-based) 185
Scope 3: 35 (all scopes) 2016 2022 Company-wide None Verified (2017)
Business travel 154
Downstream transportation 146
Total 560
Portfolio energy performance

5G Base year Target year Scope SBTi status
Achieve a 5G portfolio that is 10 times more efficient compared with the 4G portfolio for
2017 2022 5G portfolio Not verified
the same amount of transferred data in an enhanced mobile broadband use case,
Ericsson Radio Systems Base year Target year Scope SBTi status
Achieve 35% energy savings compared with the legacy portfolio. 2016 2022 ERS portfolio Verified (2017)
Value chain engagement

Supplier emissions reduction targets Start year Target year Scope SBTi status
Have 350 high-emitting and strategic direct suppliers set their own 1.5 C aligned emis-
350 high-emitting
sions reduction targets, including a commitment to halve emissions in relevant scopes to
2017 2022 and strategic Not verified
2030. Targets must be made public, and suppliers must commit to publicly report at least
direct suppliers
annually on the progress for the targets to be accepted.
Performance metrics
Energy consumption and mix 1)

(MWh) 2022 2021 2020 (MWh) 2022 2021 2020
Non-renewable sources Renewable sources
Fuel consumption from coal and coal products – – – Fuel consumption from renewable sources – – –
Fuel consumption from oil and petroleum products 2) 103,692 123,445 128,375 Purchased or acquired electricity 466,208 389,553 388,723
Fuel consumption from natural gas 44,772 23,720 31,369 Purchased or acquired heat – – –
Fuel consumption from other non-renewable sources – – – Purchased or acquired steam – – –
Consumption from nuclear products – – – Purchased or acquired cooling – – –
Purchased or acquired electricity 102,989 133,186 118,900 Consumption of self-generated non-fuel
Purchased or acquired heat 24,188 25,693 23,360 renewable energy 1,001 1,000 1,100
Purchased or acquired steam – – – B. Total renewable energy consumption 467,209 390,553 389,823
Purchased or acquired cooling 51,453 55,996 62,970 Renewable share of total energy consumption (%) 58.8 51.9 51.6
A. Total non-renewable energy consumption 327,094 362,040 364,974 Renewable share of electricity consumption (%) 81.9 74.6 76.6
Non-renewable share of total energy consumption (%) 41.2 48.1 48.4
Non-renewable share of electricity consumption (%) 18.1 25.4 23.4 C. Total energy consumption (A+B) 794,303 752,593 754,797
1) Measured energy consumption at facilities (offices, production sites, warehouses, data centers and labs) represents approximately 85% of reported energy consumption. For locations were measured data is not
available, extrapolation of consumption at similar locations have been used to estimate the consumption.
2) Fuel consumption is primarily related to the service vehicle fleet and is partially estimated based on number of vehicles in fleet and contracted distances in leasing agreements.
Note E2, cont’d.
Energy intensity Other emissions to air

(MWh/net sales MSEK) 2022 2021 2020 (metric tons) 2022 2021 2020
Facility energy 2.55 2.71 2.70 NOx 682 645 670
Fuel for service vehicles 0.37 0.53 0.55 SOx 657 694 770
Total 2.93 3.24 3.25 Particle matters 71 77 80
Product transportation by mode 1) Suppliers with 1.5 C aligned emissions reduction targets
(Ktonnekm) 2022 2021 2020 (No. ) 2022 2021 2020
Air 136,027 153,956 116,566 Aggregated since target start year 225 121 35
Road 155,086 179,790 162,556
Sea 119,725 152,230 261,108
GHG accounting methodology
Rail 5,865 2,877 6,547
Ericsson reports GHG emissions according to the GHG protocol using financial
Total 416,703 488,853 546,777
control as the basis for consolidation. GHG emissions are calculated and
1) Data for 2022 and 2021 is primarily based on information about transported volumes derived from reported as carbon dioxide equivalents (CO2e) and include the following gases
Ericsson’s ERP system, while data for 2020 is primarily based on reported information from logistic
service providers. Transported distances have been estimated based on linear routes between loca- and chemicals: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),
tions. For a smaller share (approximately 11%) of distances transported by truck and some additional hydrofluorocarbons (HFCs) and perfluorochemicals (PFCs). For practical and
air transport, data is derived from purchase orders using a spend-based method.
timing reasons, data to calculate energy consumption and emissions in scope
1, 2 and scope 3 category downstream transportation is collected and reported
Greenhouse gas (GHG) emissions
for the period December to November.
(metric tons of CO2e) 2022 2021 2020 Scope 1: Consumed volumes of fuels and refrigerants are multiplied by
Scope 1 direct GHG emissions applicable emission factors to derive emissions. For parts of the service vehicle
Fuel for service vehicle fleet 27,689 32,176 32,967 fleet, distances and related fuel consumption are estimated based on con-
Facility stationary combustion and refrigerants 10,713 6,066 6,673 tracted distances in leasing contracts.
Total gross scope 1 emissions 38,402 38,242 39,640 Scope 2: Energy (electricity, heating and cooling) at facilities is multiplied
Scope 1 emissions under regulated ETSs (%) 0 0 0 by country average emission factors for location-based emissions. For market-
based emissions, supplier-specific factors and purchased renewable energy
Scope 2 indirect GHG emissions
instruments are reflected in the emission factors used in the calculation. Part of
Purchased energy (gross location-based) 141,636 138,985 155,934
the underlying energy consumption at facilities is estimated. See the footnote
Purchased energy (gross market-based) 45,258 57,685 73,700
to the energy table on the previous page for details.
Scope 3 other indirect GHG emissions Scope 3: Emissions in the categories Purchased goods and services, Capital
Upstream goods, Fuel- and energy-related activities, Upstream transportation, and
Purchased goods and services 2,199,900 2,313,000 2,272,000 End-of-life treatment of sold products are estimated based on Ericsson’s LCA
Capital goods 39,200 42,000 43,000 of the carbon footprint of its products.
Fuel- and energy-related activities 36,600 49,000 52,000 For the purpose of calculating emissions in the category Use of sold products
Upstream transportation 77,700 79,000 79,000 and services, the average useful life of products sold is assumed to be 10 years,
Business travel 1) 2) 25,469 9,255 14,122
and emission factors relevant to the use phase have been estimated using
the current energy mix of the grids in markets served, and customer-specific
Employee commuting (incl. teleworking) 2) 34,500 26,800 36,900
energy mix data where available, not considering future changes in grid factors
Downstream
occurring over the useful life of products. Use-phase emissions are reported in
Downstream transportation 1) 116,176 119,169 111,700
their entirety in the year a product was sold and not accrued over its estimated
Use of sold products and services 2) 25,048,000 25,352,500 27,281,100
useful life.
End-of-life treatment of sold products 31,800 33,000 33,000
The majority of emissions in the category Downstream transportation
Total gross Scope 3 emissions 27,609,345 28,023,724 29,922,822
are calculated using the weight of transported products and distances, with
a smaller part being extrapolated based on spend data, and cover all forms
Total gross GHG emissions (location-based) 27,789,383 28,200,951 30,118,396 of transport sourced by Ericsson. The majority of emissions in the category
Total gross GHG emissions (market-based) 27,693,005 28,119,651 30,036,162 Business travel are based on data reported by travel agencies, with a smaller
1) Figures reported do not include the so-called high-altitude effect of emissions from air travel and air part being estimated based on travel spend. Emissions in the category
transport. The high-altitude effect is estimated to correspond to emissions of 119 kilotons of CO2e in Employee commuting are estimated based on a survey of employees’ com-
2022.
2) Emission data for previous reporting periods have been restated due to changes in GHG accoutning muting and teleworking habits. Emissions in the remaining Scope 3 categories
methodologies. See note O3 on page 42 for more information. have been assessed as not material and are therefore not reported on.
Estimating Scope 3 emissions is associated with inherent uncertainties due
Carbon footprint per scope to limitations in availability and accuracy of primary data, which is why the
(%) 2022 2021 2020 reported figures should not be regarded as exact measurements. The table on
Scope 1 0.1 0.1 0.1 the next page summarizes Ericsson’s Scope 3 accounting methodologies and
Scope 2 (market-based) 0.2 0.2 0.2 the estimated levels of uncertainty of reported figures by category.
Scope 3 upstream 8.7 9.0 8.3
Scope 3 downstream 91.0 90.7 91.3
Emissions intensity
(metric tons of CO2e/net sales MSEK) 2022 2021 2020
Scope 1 0.14 0.16 0.17
Scope 2 (location-based) 0.52 0.60 0.67
Scope 2 (market-based) 0.17 0.25 0.32
Scope 3 upstream categories 8.89 10.84 10.74
Scope 3 downstream categories 92.79 109.79 118.02
All scopes (market-based) 101.99 121.04 129.25
Note E2, cont’d.
Scope 3 category Accounting method Level of uncertainty (±%)

Purchased goods and services Average data 30
Capital goods Average data 30
Fuel- and energy-related Average data 30
Upstream transportation Average data 30
Business travel Distance- and spend-based 10
Employee commuting Average data and distance-based 30
Downstream transportation Distance- and spend-based 10
Use of sold products and services Direct use-phase emissions through a hybrid method 10
End-of-life treatment of sold products Average data 30
Emission factors used in consolidation

Source GWP (kg CO2e) Measured by Source
Purchased energy
Non-renewable electricity 0.00 – 1.35 kWh IEA/US EIA/AIB/Supplier specific
Renewable electricity 0.00 kWh Supplier specific
District cooling 0.00 – 0.41 kWh IEA
District heating, Sweden 0.04 kWh Supplier specific
District heating, other 0.04 – 0.26 kWh Country averages
Fuels and refrigerants
Natural gas (local heating) 0.20 kWh DEFRA
Diesel 0.26 kWh DEFRA
Gasoline 0.25 kWh DEFRA
Refrigerants 466 – 14,800 kg IPCC 4th assessment report
Travel
Air 0.08 – 0.52 pkm DEFRA
Road 0.00 – 0.43 pkm Country averages
Transport
Air 0.65 tonnekm Logistic providers
Road 0.08 tonnekm Logistic providers
Sea 0.02 tonnekm Logistic providers
Rail 0.03 tonnekm Logistic providers
E3 Climate related scenario analysis, risks and opportunities

As part of the Company’s overall climate strategy and its commitment to Assumed annual global GHG emissions
align to the reporting recommendations of the Task Force on Climate-related (Billion metric tons of CO2e)
Financial Disclosures (TCFD), Ericsson has analyzed potential climate-related 60
risks and opportunities using two different scenarios, “Net Zero 2050” and
“Current Policies.” The main conclusions from this analysis are presented below, 50
together with a summary of the assessment methodology. For further details, 40

please refer to Ericsson’s response to the CDP Climate Change questionnaire,
available on the Company’s website. 30
20
Scenarios used in analysis
10
Net Zero 2050 0

Baseline
– Ambitious mitigating actions introduced imminently 2010 2015 2020 2025 2030 2035 2040 2045 2050
– Net-zero global greenhouse gas emissions around 2050 Net Zero 2050
– 50% chance of limiting global warming to below 1.5 C by the end of Current Policies
the century
– Relatively low physical risks but high transitional impacts.
Current Policies
– Mitigating actions limited to currently adopted or announced policies
– Emissions grow until 2080
– Global warming of around 3 C by end of century
– High physical risks but lower transitional impacts.
Note E3, cont’d.

Most relevant risks and opportunities under scenarios analyzed Risk and Opportunity Heat Map
Very High
Expansion of network energy efficiency offering
(opportunity - products and services)
Under the Net Zero 2050 scenario, higher energy prices drive further efforts by
High
communications service providers to increase energy efficiency in mobile com-
Probability
munication networks, while at the same time striving to reduce emissions, with
many setting Net Zero targets across value chains. The combination of these
Medium
two factors creates opportunities for Ericsson to expand its offering of network
energy efficiency solutions. Ericsson’s strategy and targets within this area are
described on pages 2–3.
Low
Enabling emissions reductions in enterprise sectors
(opportunity - markets) Low Medium High Very High
Impact
As other more emission-intense sectors – such as power, transport and
The illustration shows an example of the heatmaps used
manufacturing rapidly increase efforts to decarbonize under the Net Zero 2050 in the scenario analysis.
scenario, significant investments are made to achieve decarbonization goals.
These investments, such as deployment of smart grids and private networks,
all depend on Information and Communications Technology solutions, which sites and at Ericsson’s own sites, such as production facilities and IT centers.
provides significant opportunity for Ericsson to expand its connectivity offering Ericsson buys insurance policies for its own operations, covering both damage
to these sectors. to inventory and fixed assets, as well as potential business interruptions. How
Ericsson works with supply chain resilience is described on pages 35–36.
Increased costs due to carbon emissions pricing (transition risk - policy)
The price of carbon emissions is expected to increase substantially in the Net Assessment methodology
Zero 2050 scenario leading to increased costs. While direct impacts are limited, Initially, more than 30 potential climate-related risks and opportunities were
indirect impact upstream in the value chain is more significant, assuming emis- considered. The items on this longlist were identified through consultations
sions stay the same and costs are passed through to Ericsson from affected with internal subject matter experts covering several company functions, and
suppliers. How Ericsson is working to decarbonize both its own operations and through external benchmarking. The probability and impact of all items were
its supply chain is described on pages 12–16. analyzed qualitatively through the usage of heatmaps. This was followed by
a more granular analysis of a shortlist of risks and opportunities considered
Input shortages due to water stress (chronic physical risk) to be of highest relevance to Ericsson. Risks and opportunities upstream and
Water is a key input upstream in Ericsson’s value chain, as it is utilized when downstream in the value chain, as well as in own operations were considered.
extracting minerals used in hardware as well as in semiconductor manufac- Physical risks were mainly assessed using the assumptions under the Current
turing. Under the Current Policies scenario, several regions where Ericsson Policies scenario, whereas transitional factors were primarily analyzed using
suppliers are located, including manufacturers of semiconductors in Southeast the Net Zero 2050 scenario. Both scenarios are published by the NGFS (the
Asia, are at risk of high water stress, which could cause shortages of manufac- Network of Central Banks and Supervisors for Greening the Financial System).
turing inputs for Ericsson. How Ericsson works with supply chain resilience is Regarding time horizons 1), the quantitative analysis of opportunities focused
described on pages 35–36. on the period up to 2025, and the quantitative analysis of risks on the period
between 2025 and 2030. The more long-term impacts of risks and opportuni-
Disruptions caused by severe weather events (acute physical risk) ties, stretching beyond 2030, were primarily assessed in a qualitative fashion.
Under the Current Policies scenario, the frequency and intensity of severe Under the Current Policies scenario, the impacts of the physical risks described
weather events, as well as coastal and riverine flooding, increases. This leads above are expected to become more severe after 2030.
to heightened risks for long-term business interruptions as well as damage
to stock and fixed assets in the supply chain, at outsourced manufacturing 1) For the purpose of this analysis, Ericsson defined short-, medium-, and long-term time horizons as up
to 2025, 2025-30, and beyond 2030 respectively.
E4 Transition to circular economy

Impacts, risks and opportunities Governance and policies
The transition to a low-carbon economy is expected to increase the global Circular economy is one workstream of Ericsson’s Sustainable Business
demand for metals and minerals and increase scarcity of certain materials. Program, which is governed by the Executive Team. Operational responsibil-
Ericsson’s products contain metals and minerals that are likely to be affected by ity is delegated to relevant business and market areas, primarily Business
these changes in supply and demand. This puts pressure to minimize the usage Area Networks, in collaboration with the Group Sustainability and Corporate
of new materials and increase the use of recycled ones. In parallel to this devel- Responsibility unit.
opment, waste from electrical and electronic equipment (e-waste) is one of the The Company’s Sustainability Policy is the foundation for Ericsson’s
fastest growing waste streams globally, and regulation in the area is expected approach to environmental sustainability. In addition, a group Take-back
to continue to evolve. In Ericsson’s context, the generation of e-waste is most Directive is in place to ensure that Ericsson complies with the Sustainability
relevant in the end-of-life phase of hardware sold to customers. Policy and is meeting or exceeding its legal obligations as a producer with
Regulators, especially within the EU, are responding to these developments respect to waste practices for decommissioned products. Environmentally con-
through the introduction of more stringent regulation on the presence of certain scious design has been an integrated part of the Ericsson product development
substances in products, producer end-of-life responsibility, as well as the reuse process for many years via a group directive on generic product requirements.
and recyclability of products put on the market. Ericsson also sets requirements on product design and on suppliers through
To respond to these macrotrends, changes in stakeholder expectations and a list of banned and restricted substances. Such substances shall not be inten-
regulatory developments, as well as to optimize resource usage and reduce tionally added in products supplied to or manufactured by Ericsson. The list is
environmental impact, companies such as Ericsson need to transition to more based on IEC 62 474 declarable substances but has a wider scope and includes
circular models. Failure to do so may result in loss of competitiveness and additional substances.
difficulties in meeting regulatory requirements.
Note E4, cont’d.

Management approach Product take-back program
Ericsson’s work with circularity is based on 20 years of life-cycle assessments, Ericsson offers a global program, through collaboration with third-party
covering all value chain stages of the Company’s portfolio including raw vendors, where end-of-life products can be collected from customers and
material extraction, manufacturing, transport, use and end-of-life. The life- subsequently dismantled and recycled in a way that minimizes environmental
cycle assessments identify environmental hotspots and form the basis for the impact. As the equipment is the property of the customer, take-back volumes
Company’s strategy in the area. Ericsson strives to minimize the environmental are dependent on the customers’ utilization of the program.
impact of its products throughout all life-cycle stages.
Other measures
Product design principles Ericsson works to reduce the weight and size of products and is looking at more
Ericsson utilizes the Design for the Environment principles and has generic sustainable material choices. This is part of the Net Zero initiative but will also
product requirements in this area. These include specific requirements on ease contribute to more efficient resource use and circularity.
of dismantling and disassembly of products to facilitate recycling. In addi- The Support Services portfolio includes a structured approach to refurbish,
tion, products are designed to be durable and have a high longevity, which is reuse and recycle used equipment. Shared warehouses and spare parts reduce
part of the quality process. The aforementioned list of banned and restricted the need to produce and store spare parts. Automatic hardware fault analysis is
substances and the material declarations (see below) are also important tools conducted to avoid unnecessary hardware replacements.
to design products that have a high grade of recyclability. The recyclability of Ericsson offers repair services, and as a complement to new sales also offers
products taken back has historically been high, averaging above 90% in recent reuse of old equipment.
years.
Performance metrics
Material declarations
Ericsson collects material declarations from its suppliers. Upon request, sup- Product take-back (incl. batteries) by disposal method
pliers are expected to declare the full material content of products delivered to (metric tons) 2022 2021 2020
Ericsson. This includes substances on the REACH 1) candidate list and declara- Reuse 25 2 135
tions of the use of certain critical raw materials (as defined in the EU Critical Recycling 4,636 5,211 5,690
Raw Materials List). In addition, there is a SCIP (Substances of Concern In Energy recovery (incineration) 146 164 179
articles, as such or in complex objects (Products)) reporting process in place to Landfill 18 12 74
fulfill requirements in the EU Waste Framework Directive 2008/98/EC.
Total 4,825 5,389 6,079
All electronic products may contain small traces of declarable substances
through impurities that are virtually impossible to eliminate, and which fall
below the threshold for what needs to be declared. Ericsson continously works
to avoid inclusion of harmful substances in products and components.
1) REACH (Registration, Evaluation, Authorization, and Registration of Chemicals) is the regulation and system governing the manufacture and import of chemicals in the EU.
E5 Reporting according to article 8 of the EU Taxonomy regulation

Information and Communications Technology in the Taxonomy Capex
Ericsson’s research 1) shows that the adoption of Information and Total capex corresponds to additions, including capitalized research and devel-
Communications Technology solutions has the potential to enable significant opment costs, to balance sheet items property, plant and equipment, intangible
emissions reductions in other sectors of the economy, such as power, trans- assets, before any remeasurement, depreciation, amortization or impairment
port, manufacturing and construction and real-estate. The sector itself must and excluding any changes in fair value, as specified in note C1 and C2 to the
also continue to work toward higher energy efficiency to contribute to the consolidated balance sheet, complemented by additions/changes in IFRS16
progress on internationally agreed greenhouse gas (GHG) emissions reduction classified right of use assets as specified in note C3 to the consolidated balance
targets. Both these aspects are recognized in the Delegated Regulation (EU) sheet.
2021/2139 on Climate Change Mitigation and Adaptation Activities (“the
Delegated Regulation”) but technical screening criteria for all relevant activi- Opex
ties in the sector have not yet been developed. The European Commission Total opex corresponds to non-capitalized research and development costs,
states that it may consider developing additional technical screening criteria building renovation costs, short-term leases, maintenance and repair costs, as
in the future. However, at present, the vast majority of Ericsson’s commercial well as other indirect costs for the day-to-day servicing of assets of property,
offerings to its customers, including mobile communication networks, is not plant and equipment.
currently covered by the EU Taxonomy Regulation (“the Taxonomy”).
Eligible turnover, capex and opex
Accounting policies Turnover in accordance with the above definition and that is associated with
For the purpose of reporting according to article 8 of the Taxonomy, turnover, eligible activities (see next page) constitutes the basis for calculating the share
capital expenditure (capex) and operational expenditure (opex) are defined of eligible turnover. Capex and opex in accordance with the above definitions
as follows. These definitions differ from how capex and opex are defined in and that is associated with eligible activities (see next page) constitute the
Ericsson’s mainstream financial reporting. basis for calculating the share of eligible capex and opex. Moreover, individual
eligible capex and opex (see next page) can also be added to the share of
Turnover eligible capex and opex.
Total turnover corresponds to net sales in the consolidated income statement
in the Financial report.
1) Malmodin, Jens & Bergmark Pernilla. (2015). Exploring the effect of ICT solutions on GHG emissions in 2030. Atlantis Press, 10.2991/ict4s-env-15.2015.5.
Note E5, cont’d.

Changes in accounting policies or disclosures compared with the previous opex and capex associated with this activity have been included as taxonomy
reporting period eligible in the key performance indicators presented below. Turnover derived
Individually eligible capex and opex are included in the share of eligible, and from this activity is based on an analysis of customer contracts, where the
where applicable, aligned capex and opex for the financial year 2022 but were delivery stated matches the activity in Annex I to the Delegated Regulation.
not reported in the previous year. This activity does not currently meet the associated technical screening
criteria, and related turnover, capex and opex are therefore not reported as
Eligible and aligned economic activities aligned.
Identifying economic activities relevant for the Company has required inter-
pretations of the Taxonomy Regulation as well as the Delegated Regulation. Computer programming and related activities
Ericsson’s interpretation is that for an economic activity, to be considered (Annex II, 8.2)
Taxonomy eligible, the activity must: Within all business areas, software development is part of Ericsson’s commer-
– be, or be aimed at, generating external turnover, cial offering to its customers. Should expenditures associated with making this
– meet the description of an activity included in Annex I or II of the Delegated activity more resilient to the effects of climate change be incurred, these will be
Regulation, and accounted for as either eligible capex or opex. Related turnover is not included
– have practically applicable technical screening criteria associated with it in the share of eligible turnover, as this activity is not classified as an enabling
activity, as defined in the Taxonomy.
Based on this interpretation, the activities stated below are the ones that have Ericsson has not incurred any expenditures of this nature during the report-
been identified as relevant for Ericsson. Certain capex and opex can also be ing year.
individually eligible (see further below). However, there remains some uncer-
tainty around how the Taxonomy should be applied, and interpretations, as Individually eligible capex and opex
well as reporting practices, are expected to evolve over time. It is permitted to include expenditures for products and services related to other
economic activities than the ones stated above as eligible and aligned capex
Data-driven solutions for GHG emissions reductions and opex, if these contribute to emission reductions for the reporting entity,
(Annex I, 8.2) and if the economic activity of the supplier in question is Taxonomy eligible and
Ericsson offers artificial intelligence-powered and data-driven operations aligned. Ericsson includes expenditures for electric or hybrid vehicles, vehicle
solutions, focusing on managing energy assets efficiently through intelligent charging infrastructure and energy efficiency measures in buildings as eligible
site measurements and control, enabling customers to improve network energy and, where applicable, aligned capex and opex.
efficiency, and consequently reducing energy-related GHG emissions. Turnover,
Key performance indicators
Meeting substantial Meeting do no significant

Turnover contribution criteria harm criteria
Biodiversity and ecosystems
Enabling (E) or transitional

Water and marine resources
Minimum social safeguards

Climate change adaptation

Climate Change mitigation
Taxonomy aligned (%)
(T) activity
Circular economy
Circular economy
Activity code
Pollution
Pollution
2022
SEK
million % % Yes / No 2022 2021
A. Taxonomy eligible activities
Aligned activities
– – – – – – – – – – – – – – – – – – –
Total aligned activities – – – – – – – – – – – – – – – – – –
Not aligned activities
Data-driven solutions for GHG emission reductions 8.2 53 0
Total not aligned activities 53 0
Total eligible activities 53 0
B. Taxonomy non-eligible activities
Non-eligible activities 271,493 100
Total turnover (A+B) 271,546 100
Note E5, cont’d.

Capex contribution criteria harm criteria



(T) activity
Circular economy
Circular economy
Activity code
Pollution
Pollution
2022
SEK
Aligned activities
– - - - - - - - - - - - - - -
Total aligned activities - - - - - - - - - - - - - -
Primary activities
Data-driven solutions for GHG emission reductions 8.2 - -
Individually eligible activities
Low-carbon vehicles1) 6.5 81 0
Total Capex (A+B) 30,712 100
1) Full name: Transport by motorbikes, passenger cars and light commercial vehicles.

Opex contribution criteria harm criteria



(T) activity
Circular economy
Circular economy
Activity code
Pollution
Pollution
2022
SEK
Aligned activities
– - - - - - - - - - - - - - -
Total aligned activities - - - - - - - - - - - - - -
Data-driven solutions for GHG emission reductions 8.2 4 0
Total Opex (A+B) 38,359 100
Section S– Social
S1 Human capital
Impacts, risks and opportunities strategies. Results are summarized on both group-, department-, and unit-
Human capital is one of the most important assets for companies, particularly level for managers and leaders to be able to act when and where appropriate.
those involved in high technology businesses which on a global level are
experiencing skills shortages and high turnover. Employees with the right skills, Diversity and inclusion
as well as a diverse workforce are critical for driving innovation and serving the Ericsson fosters a work environment based on respect. Treating colleagues
needs of a global and varied customer base. with respect, dignity and inclusion brings out the best in everyone and is the
Companies that can attract, develop, and retain diverse talent have a com- right thing to do. At Ericsson there is no room for harassment, threats, bullying
petitive advantage and key factors to achieve this include building a corporate or violence against anyone regardless of their position or seniority and all forms
culture that values integrity, empathy, career growth, and inclusion. Successful of harassment, threats, and acts of violence are prohibited.
strategies in these areas have become increasingly important in the context of Ericsson is committed to creating a diverse and inclusive organization as
greater expectations of flexibility and hybrid work. this helps ensure that it attracts the best global talent, fosters innovation, and
brings greater value to customers. Accountability for diversity and inclusion
Governance and policies sits at CEO and Executive Team level, with strategy led by the Global People
Ericsson’s People Strategy is governed by Ericsson’s People department, function. Each business area, market area and Group function has a dedicated
headed by the Chief People Officer, with the Global People Leadership Team diversity and inclusion lead responsible for driving strategy execution and
having responsibility for strategy formulation and execution. Subject matter driving performance.
experts develop Group-wide core processes that are embedded throughout Ericsson aims at achieving greater gender balance alongside increasing
business areas and market areas, and other Group functions by unit people representation of currently underrepresented groups. To achieve this, Ericsson
leaders. focuses on creating unbiased people processes, for example ensuring that job
A global People Services unit supports delivery, ensuring consistent practices advertisements use gender neutral language, and on upskilling employees in
across the business. The people strategy is anchored in Ericsson’s Code of inclusive leadership through training programs.
Business Ethics and the People Group Policy states that all activity relating to the Ericsson supports a network of more than 26 employee resource groups
workforce, including employment, development, compensation, and benefits, throughout the organization including but not limited to sexual orientation,
will be carried out without discrimination and with equal opportunity for all. gender, age, families, health, and wellbeing; and provides career accelerator
programs focused on removing barriers to progression for underrepresented
Executive variable remuneration groups.
A portion of the variable remuneration to executives is determined by perfor-
mance on the Company’s target to increase the share of women in line man- Compensation and rewards
ager positions. See page 8 of the Remuneration report for further information. At Ericsson, the guiding principle is that people should be paid in a fair way and
be recognized and rewarded for the impact that they create. Consequently, pay
and benefits offered are market competitive and relevant to the individual with
Management approach
the aim to offer a broad reward offering to attract and retain talent and to keep
Ericsson’s ability to attract, develop and retain talent is largely determined by
employees feeling engaged, supported, and rewarded.
the experience it provides for its people. Ericsson strives to enable employees
Ericsson is consistent in what it rewards for and works to ensure that pay
to realize their full potential, and in doing so, create long term value for the
decisions are non-discriminatory, based on the Company’s pay philosophy and
business. Focal points of the strategy are culture and leadership, diversity and
always applied using the same criteria. There is a defined and globally consist-
inclusion, fair and competitive rewards, career development, and well-being.
ent job levelling and job architecture in place to ensure that pay is competitive
and fair. To drive fairness and consistency and promote a culture of apprecia-
Culture and leadership
tion, the Company has put in place a global recognition program and platform.
A shared set of values and a strong company culture are prerequisites for both
The global job levelling and job architecture enable Ericsson to make mean-
a positive people experience and for successfully executing on business strate-
ingful comparisons on pay and the Company continues to refine its review of
gies. Ericsson’s core values, which are expected to be lived by all employees
pay equity to identify where unexplained pay differences may exist.
and leaders are:
– Professionalism
Career and development
– Perseverance
Ericsson enables its people to develop skills and experience through on the job
– Respect
training and a focus on internal mobility. A set of critical skills areas necessary
– Integrity.
to execute on the 2025 growth strategy of extending leadership in mobile net-
works, and focused expansion into enterprise have been identified. Learning
Ericsson’s cultural transformation program is aimed at strengthening the
and development opportunities connected to these critical skills, range from
behaviors needed for the Company to execute on its strategies and create a
introductory and elementary, to experienced and advanced training, and are
work environment where employees can reach their full potential. This includes
offered to upskill and reskill employees as needed in their job roles. The critical
emphasizing ethical and compliant decision-making, and driving behaviors
skills areas are:
along five focus areas:
– Automation and AI
– Climate Action
Creating a speak-up Create an environment where it is safe to share ideas, ask
environment questions, and speak up if observing compromises on ethics. – Cloud Native
Empathy and Foster empathy for different perspectives and approaches,
– Enterprise go-to-market
humanness enabling people to bring their unique perspectives. – Enterprise network infrastructure
Executing Move quickly when needed to seize o
pportunities. – Ethics and integrity; and health, safety and well-being
speedily – Power skills, such as communication, collaboration and stakeholder
Fact-based and Always base decisions on the right data and be brave to take management
courageous decisions tough decisions. – Security.
Cooperation and Encourage cross-company cooperation as one E
ricsson,
collaboration with the customer in focus. Up- and re-skilling is facilitated by a digital learning platform, which gives
Surveys are carried out regularly to understand how employees are employees easy access to material and courses, and gives the Company a tool
experiencing work and their perceptions of the Company, its leadership, and for tracking and analyzing progress and completions.
Note S1, cont’d.

Besides training and development programs in scope of the critical skills Share of women per employee category
areas, employees have access to a broad range of upskilling assets such as
(%) 2022 2021 2020
online internal and external courses and articles through the digital learning
Executive Team 18 20 20
platform.
Employees together with their managers set individual yearly and long-term Executive population 1) 35 36 32
career goals and learning plans. Employees also receive yearly individual Line managers 22 21 21
performance evaluations. Technical employees 2) 21 20 20
Non-technical employees 46 47 46
Future of work All employees 4) 25 25 25
Ericsson offers possibilities of remote working in a hybrid model to employees
where job role and responsibilities allow for it. When possible, employees are Share of employees by age and employee category
also offered flexible working hours to help them balance work and personal
(%) 2022 2021 2020
commitments. The Company offers internal job rotation opportunities, and
Executive population 1)
often first looks internally for candidates to fill open positions.
<25 0 0 0
For more information on approaches to well-being, see note S2 on page 24.
25–35 2 1 2
36–45 15 18 22
Strategic workforce management
46–55 59 58 54
Ericsson uses workforce planning and analytics to plan the workforce size
and capabilities required to match current and future business needs and >55 24 23 23
ensure that the right resources are in the right place at the right time and for Line managers
the right cost. A People Analytics and Digital Solutions team provides analytics <25 0 0 0
and insight to support leaders, both on Group- as well as unit-level in making 25–35 6 7 8
informed workforce and business decisions. 36–45 39 40 42
46–55 42 41 40
Collective bargaining >55 13 12 10
Ericsson respects the right of all employees to form or join independent trade Technical employees 2)
unions as well as the right to collective bargaining. In places where local laws <25 5 3 3
restrict these rights, Ericsson seeks other ways of having a meaningful dialogue 25–35 34 35 37
with employees. This includes alternative, independent and freely elected 36–45 34 34 33
forms of employee representation such as employee committees or councils. 46–55 20 20 20
As for the rights of employees of suppliers, Ericsson's requirements in this >55 9 8 7
area are set out in its Code of Conduct for Business Partners. These require- Non–technical employees
ments are on par with the rights of Ericsson’s own employees. <25 2 2 2
25–35 25 26 27
External workforce 36–45 33 33 33
Besides employees, Ericsson also has an external workforce that does not have
46–55 26 26 26
a direct employment relationship with the Company. This workforce is primarily
>55 13 12 11
made up of consultants working in the fields of service delivery, product devel-
opment and supply. Every year Ericsson also offers internships to students and
new graduates in various parts of the Company. Share of employees by nationality and employee category 5)
2022
Targets (%) All employees Line mgrs. Tech. employees 2)
Indian 25 20 29
Gender diversity Chinese 11 10 12
Share of women in Swedish 10 16 9
Objective Base year Target year Scope the base year (%) American 6 6 5
Increase the percentage of Romanian 4 3 3
women among all employees, All employees: 25
Company- Other 44 45 42
line managers and the execu- 2021 2030 Line managers: 21
wide
tive population to equal to or Exec. population: 36
greater than 30%. 2021
(%) All employees Line mgrs. Tech. employees 2)
Performance metrics Indian 24 20 29

Chinese 12 10 12
Employees and external workforce Swedish 10 16 10
American 6 6 5
(No.) 2022 2021 2020
Romanian 4 3 3
Executive Team 17 15 15
Other 44 45 42
Executive population 1) 177 163 170
Line managers 7,602 7,241 7,121
1) Employees reporting to members of the Executive Team.
2) Non-managerial employees in job roles within the fields of science, technology, engineering and
Technical employees 2) 78,789 75,859 75,952 mathematics (STEM).
Non-technical employees 18,944 18,044 17,566 3) Includes consultants, contractors, interns and other workforce not directly employed by Ericsson.
Total 105,529 101,322 100,824
4) 2022 share presented here differs from the share p resented in note G4 in the Financial report (26%)
due to nominal differences when rounding to the nearest whole percentage point.
5) Nationalities shown are the top five nationalities among all employees.
External workforce 3) 18,088 12,308 11,398
Note S1, cont’d.
Turnover Average recorded training hours per employee and by gender 1)

(%) 2022 2021 2020 (hrs.) 2022 2021 2020
Turnover rate 14 12 8 Men 18.9 19.7 25.9
Women 17.8 17.0 22.0
Leavers by gender All employees 18.6 19.0 24.9
Men 74 76 75
Women 26 24 25
Completed learning opportunities by gender 1) 2)
(Thousands ) 2022 2021 2020
Leavers by age
Men 2,283 2,321 1,428
<25 8 6 7
Women 757 823 493
25–35 49 49 43
All employees 3,040 3,144 1,921
36–45 27 24 25
46–55 9 13 15
>55 7 8 9 Spend on learning and development
(SEK thousands) 2022 2021 2020
Average per employee 4.0 3.8 3.6
Hiring
(%) 2022 2021 2020
Hiring rate 17 12 9 Performance and career development reviews 1)
(%) 2022 2021 2020
New joiners by gender Employees receiving evaluations 3) 93 91 95
Men 72 70 74
Women 27 30 26 Employee satisfaction by gender
(eSAT score) 4) 2022 2021 2020
New joiners by age
Men 81 81 83
<25 21 19 14
Women 81 81 83
25–35 49 54 51
All employees 81 81 83
36–45 20 19 23
1) Excludes employees of Vonage and Cradlepoint.
46–55 7 6 10 2) Refers to learning contents (courses, articles, webinars etc.) consumed and completed through
>55 2 2 2 Ericsson’s learning platform and includes both external and Ericsson-internal content.
3) Performance evaluations recorded as of January 31 the following year. Field service personnel
excluded.
Positions filled by internal candidates 1) 37 40 41 4) Measuring scale: 0–100 with 100 being the most favorable score. Employees of Vonage are excluded
1) Derived by dividing the number of positions filled in a year by people already employed by Ericsson by from these statistics and employees of Cradlepoint are excluded from the 2021 and 2020 data.
the total number of positions filled in the same year.
Collective bargaining agreements
Ratio of compensation of women to men 1) (%) 2022
(%) 2022 2021 2020 Employees covered 1) 29
Base salary 84 86 83 1) In 2022 Ericsson mapped out the existence and coverage of collective bargaining agreements in the
Total compensation 82 82 80 20 countries with the largest employee headcount. These countries cover approximately 86% of the
Group's total headcount. The share of employees covered stated above is based on this mapping,
assuming the remaining unsurveyed 14% of the total headcount is not covered. Comparative figures
are not available.
CEO to employee pay ratio
(ratio) 2022 2021 2020
Base salary – Sweden 2) 25 25 25
Base salary – Global 2) 32 38 38
Total compensation – Sweden 3) 68 67 63
Total compensation – Global 3) 84 98 93
1) The figures presented here reflect the average unadjusted pay ratio of women to men for Ericsson’s
global workforce. This metric does not take into consideration other factors affecting c ompensation
levels, such as location, job role and responsibilities, experience, age, education level etc. For t iming
and practical reasons, the calculations are based on compensation levels as of the end of the third
quarter of each respective year and covers full time annual base salary, short term variable pay / sales
incentive plan (STV/SIP) target entitlement, and long-term variable pay (LTV) grants given in the
current year. Data excludes employees who are in exit programs. In addition, the figures for total com-
pensation ratios excludes Field Service Organization (FSO) employees in certain companies that fol-
low local STV plans making it difficult to make relevant comparisons (for 2020 and 2021 approxi-
mately 7,000 individuals and for 2022 approximately 1,600 individuals). The figure for total compen-
sation ratio in 2022 also excludes employees of Vonage due to limitations in the comparability of vari-
able compensation plans.
2 ) For comparison reasons, base salary in this context excludes holiday pay in Sweden (including for the
CEO) and therefore differs from the data presented in the table “Total Remuneration to the President
and CEO and Executive Vice Presidents” on page 5 in the Remuneration report, which includes holiday
pay.
3) For comparison reasons, Total Compensation in this context is based on STV/SIP target level entitle-
ment and LTV granted for each respective year (including for the CEO) and therefore differs from the
information presented in the ”Total Remuneration to the President and CEO and Executive Vice Pres-
idents”, on page 5 in the Remuneration report, which shows actual earned STV and vested LTV. Total
compensation ratio for 2022 excludes employees of Vonage due to limitations in the comparability of
variable compensation plans. Employees of Cradlepoint are included in the total compensation ratio
for 2022 but not for the previous years.
S2 Health, safety and wellbeing

Impacts, risks and opportunities Well-being
By creating a safety culture, a company can protect its workers’ health, safety Ericsson’s well-being approach comprises four main areas:
and well-being, in addition to preventing injuries and illnesses. This can – Physical: maintaining healthy habits in fitness, nutrition and rest
decrease absenteeism, strengthen the employee experience and increase – Emotional: good mental health and work-life balance and building resilience
productivity. through awareness of emotions and behaviors
The primary safety risks identified in Ericsson’s operations are related to – Financial: control of personal finances and informed financial
suppliers, especially within field operations, and are linked to manual handling decision-making
and lifting, driving, climbing, working at heights and with electricity. Incidents – Social: sense of belonging, respect and feeling of purpose in career and life.
related to these risks account for all fatalities and a significant portion of major
incidents. Ericsson has a hybrid and flexible working approach, which facilitates greater
The main health and well-being risks within the workforce concern mental autonomy for employees on where and when they perform their work. A home
health (including stress) and musculoskeletal illnesses. Contributing to these furniture package is provided to improve ergonomics for hybrid working
risks are the COVID-19 pandemic and lifestyle factors. employees, aimed at preventing musculoskeletal ill-health caused by poor
posture.
Governance and policies Digital solutions are central to Ericsson’s well-being approach. Three primary
Health, safety and well-being is governed globally by two forums. The Global solutions are provided to all employees:
Occupational Health and Safety (OHS) Board, chaired by the Chief Marketing – Free access to a mindfulness application aimed at providing support for
Officer, takes decisions and provides guidance on the OHS strategy and global stress reduction and better sleep, among other benefits
programs. The Major Incidents and Performance Review Board, co-chaired by – An integrated software solution that provides employees with insights on
Head of Service Area Managed Services Networks 1) and Head of Service Area their use of business software tools, such as e-mail, to improve understand-
Networks ), reviews fatal and major incidents, causes and actions taken, and ing of work patterns, and how better usage can benefit well-being
follows up on performance and compliance. Both forums are mirrored in the – A health, safety and well-being portal on the Company’s intranet that
market areas to promote consistency, alignment and accountability across the provides access to training material and other resources.
Group. Ericsson’s approach and commitments are set out in a Health, Safety,
and Well-being policy and is further detailed in a group directive. Employee consultation and participation
Ericsson has established OHS committees that include managers and employ-
ees, or employee representatives where they exist. The committees meet on a
Management approach
regular basis, follow up on OHS performance and discuss and decide on actions
Ericsson drives a proactive agenda that goes beyond legal compliance, inter-
for improvement of the OHS MS and its processes.
national standards and customer requirements to prevent work-related injuries
Communication around health, safety and well-being targets, performance,
and illnesses.
programs and training is available for all employees through internal channels
The Ericsson Care program is the company’s overarching approach for its
such as the intranet and newsletters. Employees are asked twice a year about
health, safety and well-being and efforts to reach Target Zero. See below for
health, safety and well-being through an employee survey, which includes
more information about this target.
questions about their perceptions of the Company’s efforts within health,
Annual health, safety and well-being risk and opportunity assessments are
safety and well-being, as well as their perceived work-life balance.
conducted to identify strategic risks as well as the recurring risks and oppor-
tunities. These assessments are aligned to the Enterprise Risk Management
Leadership, training and awareness raising
framework.
All Ericsson employees and employees of site services suppliers are required
to take health, safety and well-being induction training. Additional training
Occupational Health and Safety Management System
is required based on a person’s role and risk exposure to ensure adequate
Ericsson’s Occupational Health and Safety Management System (OHS MS) is a
competence needs are met. Further, targeted web-based training that covers
part of the Ericsson Group Management System (EGMS) that aims to mitigate
safe driving awareness and Lifesaving Rules 3) are available to all employees
health, safety and well-being risks, as well as capture and implement opportu-
and suppliers.
nities for improvement in these areas across Ericsson’s business and processes.
Ericsson has a Safety Leadership Training Program for leaders within three
Ericsson’s OHS MS is certified to ISO/IEC 45001, the international standard
levels of the CEO including Executive Team members and selected key roles
for OHS management.
that have a direct impact on field safety. The Safety Leadership Training
Program for leaders is delivered to approximately 2,000 people, including
Incident reporting and investigation
Executive Team members. The Safety Leadership Training Program for people
Ericsson provides a global incident reporting tool for reporting hazards,
in key roles targets approximately 4,700 employees.
near-misses and incidents involving employees, suppliers and anyone who
Ericsson has also launched the Walk the Talk guide, encouraging all leaders
is affected by its operations. Concerns related to remote working can also be
to conduct regular safety and well-being walks by personally visiting a site and
reported through this tool.
having a conversation exclusively about health, safety and well-being.
Reported incidents are investigated, including performing root-cause
analysis, to remedy any damage and prevent recurrence.
Targets
Supplier management
Ericsson has specific OHS requirements for suppliers that are part of contracts. Target Zero
Site service suppliers failing to adhere to Ericsson’s health and safety Objective and measurement Start year Target year Scope
requirements are handled through a consequence management process. To Zero fatalities and lost workday Ericsson workforce
incidents, covering both physical 2020 2025 and field service
mitigate the risk of repeated failure of suppliers to follow rules and procedures, injuries and work-related illness. suppliers
Ericsson imposes consequences such as financial penalties, reduction of
business volumes, more quality inspections and audits and written warnings.
In severe cases, supplier relationships can be terminated.
1) Part of Business Area Cloud Software and Services.

2) Part of Business Area Networks.
3) Eight basic lifesaving rules that apply to the entire workforce, covering driving, seatbelts, wearing h
elmets, alcohol and drug use, personal protective equipment, working in drop zones and at heights, and electricity.
Note S2, cont’d.

Performance metrics
Fatalities by involved party Supplier consequence management per finding and type of warning 1)
(No.) 2022 2021 2020 2022 2021 2020
Ericsson employees 0 1 0 Red Yellow Red Yellow Red Yellow
Suppliers and subcontractors 1) 6 11 5 (No). card card card card card card
Third parties 2) 2 2 2 Working at
47 16 24 18 22 14
heights
Total 8 14 7
Incorrect use
40 32 20 29 21 43
of PPE 2)
Fatalities by cause Insufficient incident and
8 17 3 26 3 2
resource management
(No.) 2022 2021 2020
Lack of adherence to
Fall from heights 4 6 4 3 4 2 0 2 2
driving/vehicle standards
Driving/traffic accident 4 5 3 Lack of required and
Electric accident – 1 – 15 17 11 18 7 13
certified competence
Slip and fall – 1 – Lack of risk assessment/
83 86 22 74 10 23
Hit by falling object – 1 – Safe working conditions
Total 8 14 7 Total 196 172 82 165 65 97
1) Red card and yellow card indicate the severity of the consequence issued to a supplier after a viola-
tion of our Health and Safety Standards. Red cards are used for serious breaches and carry significant
Lost workday incidents (LWIs) by involved party 3) consequences.
2) Personal Protective Equipment.
(No.) 2022 2021 2020
Ericsson employees 96 77 90
Work-life balance and well-being – employee responses
Suppliers and subcontractors 1) 30 66 44
Third parties 2) 5 2 9 (Survey results) 2022 2021 2020
Total 131 145 143 Balance 1) 77 76 75
Well-being commitment 2) 85 87 85
1) Scoring of aggregated employee responses to question "I am able to successfully balance my
Employee fatality and LWI rate work and personal life", measured on a scale of 0–100 with 100 being the most favorable result.
(per 100 FTEs) 4) 2022 2021 2020 Cradlepoint employees not included in 2021 and 2020 statistics. Vonage employees not included.
2) Scoring of aggregated employee responses to question "Ericsson takes a genuine interest in
Fatality rate – 0.001 – employees well-being", measured on a scale of 0–100 with 100 being the most favorable result.
LWI rate 0.087 0.074 n/a Cradlepoint employees not included in 2021 and 2020 statistics. Vonage employees not included.
Lost workdays and near misses

(No.) 2022 2021 2020
Lost workdays 5) 3,040 2,390 2,315
Near misses reported 9,716 6,699 4,773
1) Primarily site service suppliers and subcontractors.
2) Third parties refer to any person not working for Ericsson either as an employee or as a supplier or
subcontractor, such as a member of the public, who is affected by an incident assessed to be within the
Company's control.
3) Incidents resulting in one or more lost workdays.
4) Indicates the rate of fatalities/ lost workday incidents occurring in a year per 100 full-time equivalents
(FTEs), using 200,000 hours as the standardized average number of hours worked by 100 FTEs in
one year. Total hours worked is estimated based on standard annual working hours for active employ-
ees and sums to 220 (217) million hours. Due to limitations in data availability, comparative figures for
LWI rate for 2020 cannot be disclosed and data for suppliers and subcontractors is not available.
5) Ericsson is currently only able to collect information with satisfactory accuracy on the number of lost
workdays for its own employees.
S3 Human rights
Impacts, risks and opportunities
Based on internal and external expertise and stakeholder consultations, due security of the person, right to life, right to health, land-related rights and inter-
diligence and analysis of business relationships, Ericsson has identified its sali- national humanitarian law risks.
ent human rights issues across the value chain. While Ericsson acknowledges With regard to the supply chain, Ericsson has identified trade union rights,
that its responsibility covers all internationally recognized human rights, the forced labor, occupational health and safety, living wages, excessive working
salient risks described below are the ones that need the most attention and are hours, discrimination and conflict-related impacts as the most salient risks.
therefore prioritized through the Company's due diligence processes. Being a global company, the salient human rights risks for Ericsson’s own
In relation to the sales and end use of its technology and solutions, Ericsson operations will depend on factors such as country of operations and type of
has concluded that its salient human rights risks are the right to privacy, the business activities. Some of the main risks identified include occupational
right to freedom of expression and conflict-related risks, meaning human rights health and safety, trade union rights, living wages, discrimination and conflict-
risks arising from operating in conflict-affected areas, including international related impacts.
humanitarian law risks. While mobile networks provide essential needs in order More details on human rights risks and considerations in Ericsson’s value
to communicate and access information, certain functionalities can be misused chain can be found in the 5G Human Rights Assessment, available on the
to adversely impact human rights. Conflict-related impacts refer to risks that Company’s website.
materialize in conflict-affected and high-risk contexts, such as the right to
Note S3, cont’d.

The introduction of new legal requirements on companies to ensure respect in a specific country, new product developments or identified actual adverse
for human rights across their value chains, in particular mandatory due dili- impacts. The methodology used for conducting human rights impact assess-
gence provisions, will require many companies to strengthen their measures ments is aligned with the UNGPs.
in the area. Failure to comply can have both legal and financial consequences,
as well as impact Ericsson’s ability to operate in certain markets. Taking a Due diligence of sales opportunities – Sensitive Business Framework
proactive approach to addressing human rights risks and impacts, and ensur- In order to assess, prevent and mitigate potential misuse of Ericsson’s
ing human rights are integrated into other relevant due diligence frameworks, echnology, human rights due diligence is integrated into the sales process
prepares Ericsson for changes in its operating environment and helps to build through the Sensitive Business Framework. The framework aims to ensure that
trust with its stakeholders over time. Ericsson’s solutions are used in accordance with international human rights
standards. Four main factors are considered when assessing the potential
Governance and policies human rights risks in a given sales opportunity.
Ericsson is committed to the UN Guiding Principles (UNGPs) on Business and
Human Rights and the OECD (Organization for Economic Co-operation and Portfolio Purpose
Whether the sale includes technology The purpose and context in which the
Development) Guidelines for Multinational Enterprises. As a member of the that stores or processes personally customer intends to use the product, service
Global Network Initiative (GNI), Ericsson commits to its Principles on Freedom identifiable information. or solution.
of Expression and Privacy. These commitments are reflected in both the Code
of Business Ethics and the Code of Conduct for Business Partners, and other Customer Country
steering documents. For more information, see Ericsson’s Business and Human The type and ownership structure The country-specific risk with regards to
Rights Statement, available on the Company’s website. of the customer. human rights. A third-party risk analytics
firm is used to assess countries based on
The area of business and human rights is managed by the Sustainability and risks related to the right to privacy and
Corporate Responsibility (S&CR) unit, reporting to the Chief Marketing Officer. freedom of opinion and expression.
Within the S&CR unit sits human rights subject matter experts, responsible
for developing the Company’s human rights strategy and for supporting the When risks are identified in a sales opportunity that is to be pursued, the
business and market areas and Group functions in the implementation of the market area shall submit an approval request, which is evaluated according
strategy and commitments. to the Sensitive Business risk methodology and may be approved, approved
The Sensitive Business Framework (further described below) is managed with conditions or rejected. Conditional approvals include technical and/or
on an operational level by the Sensitive Business Council and Core Team contractual mitigations, and implementation of these is monitored to ensure
(cross-functional forum consisting of representatives from the Group Functions adherence. See the next page for examples of cases reviewed in this process
and Business Areas), chaired by the Head of Sensitive Business and the Head during the reporting year. The Sensitive Business process can also trigger
of Government and Policy Advocacy respectively. Escalations made in accord- further due diligence measures (for example a review of legal frameworks in
ance with this framework are made through the marketing and corporate a country, heightened human rights due diligence concerning the customer or
relations department and market area management. country) before a decision is taken on the opportunity.
Management approach Due diligence in the supply chain

To operationalize its commitments to respecting human rights, the Company See note G3 on page 35 for a description of how ESG factors, including human
has integrated human rights due diligence across its business operations. The rights, are considered in Ericsson’s supply chain management strategy.
aim is to ultimately provide better outcomes for people across the value chain
and ensure the Company’s technology is a force for good, by preventing and Due diligence in M&A
mitigating intended and unintended misuse. Ericsson’s S&CR strategy, part Human rights issues are included as one aspect in Ericsson’s due diligence
of its wider business strategy, incorporates its commitment to the UNGPs and process for M&A. The focus is on evaluating main human rights risks of the tar-
compliance to existing and emerging regulation in the area of human rights. get company, as well as to what extent the target company has sufficient due
Human rights risks are also included in Ericsson’s Enterprise Risk Management diligence frameworks in place to identify and address such human rights risks.
Framework. In case red flags or gaps are identified, mitigating measures are introduced
either as preconditions or as part of the integration post closure.
Enhanced human rights due diligence
When conducting business in conflict affected areas or when human rights Grievance mechanism
risks are otherwise considered elevated, enhanced due diligence is conducted. All internal and external stakeholders can report suspected violations of laws,
Measures taken in such situations involve engaging with external stakehold- regulations or company policies, including human rights violations, through
ers, including potentially affected stakeholders or their intermediaries and the Ericsson Compliance Line. Reporting through this channel can be done
representatives. anonymously.
In conflict-affected or high-risk contexts, it may be difficult to reach out Ericsson does not require persons that report compliance concerns to waive
directly to impacted stakeholders. In such circumstances, Ericsson tries to their rights to bring claims through a judicial process as a condition to partici-
leverage its engagement in forums such as the GNI and the Business Network pating in the grievance process. As part of reporting a compliance concern,
on Civic Freedoms and Human Rights Defenders to identify ways of engaging either via a manager or through the Ericsson Compliance Line, Ericsson does
with external stakeholders that ensure their personal security and safety. This not require the reporter to sign a non-disclosure agreement. The reporter is
can involve sharing information about current and future business activities however asked not to share any communication relating to an ongoing matter,
and practices, potential human rights risks and mitigating measures, and how in order to protect the integrity of the process. More information in note G2 on
to establish purposeful communication channels with concerned stakeholders. page 32.
A full human rights impact assessment can also be triggered by factors such
as reentry into a market, reports about deteriorating human rights situations
Note S3, cont’d.

Collaborations and partnerships Training and awareness raising
Ericsson leverages its efforts through collaborations and partnerships with Ericsson provides human rights training accessible to all employees. Targeted
other organizations. Listed below are the most significant external collabora- training and capacity building for key job roles and functions is also offered.
tions, partnerships and commitments related to human rights. All market areas have an appointed single point of contact responsible for
preparing cases for Sensitive Business evaluation. Each such person is trained
Organization Engagement objective by the Sensitive Business Unit at Group level and is responsible for informing
Business Network on Civic A group of companies committed to identifying ways the relevant functions, such as account managers within their respective
Freedoms and Human Rights that businesses and society can benefit from market areas of recent developments and decisions.
Defenders increased support from the private sector for the pro- More senior members of the Sensitive Business Core Team and Board
tection of civic freedoms and human rights defenders.
receive onboarding as well as continuous updates by the Sensitive Business
Global Network Initiative An initiative addressing Freedom of Expression and
Right to Privacy in the Information and Communica-
Unit.
tions Technology (ICT) sector. Participants are inter-
net and telecommunica-tions companies, human Performance metrics
rights and press freedom groups, investors and
academic institutions. During 2022, Ericsson has not, through its reporting channels, been made
aware of any adverse human rights impacts in which the Company has been
Shift Business Learning An independent, non-profit center for business and
Program human rights practice, supporting companies in the involved. Consequently, no remediation actions have been undertaken.
implementation of the UNGPs.
Tech for Democracy Initiative Multi-stakeholder initiative for protecting and Cases reviewed in the sensitive business process by outcome 1)
of the Danish Government promoting democracy and human rights in an era of (No.) 2022 2021 2020
rapid technological development.
Approved 235 286 321
UN B-tech Project A project led by UN Human Rights to provide an
authoritative and broadly accepted roadmap for Approved with conditions 435 432 480
applying the UNGPs in the ICT sector. Rejected 13 4 27
Total 683 722 828
1) Ericsson has for several years observed full adherence to the Sensitive Business Process and has
therefore discontinued reporting on process adherence as a key performance indicator.
Sensitive Business case examples
Decision Customer Description Rationale

Approved Local communications A communications service provider in a high-risk The non-Ericsson solutions were assessed through the Sensitive
service provider country requested that Ericsson manage and Business third-party risk evaluation. The solutions did not process
optimize its internal non-Ericsson inventory any personal identifiable data and based on the assessment, there
application. was a low risk of misuse and potential adverse human rights
impacts. The engagement was therefore approved.
Approved with conditions Global communica- A global communications service provider with The communications service provider’s network contained and
tions service provider operations in a high-risk country requested Ericsson processed sensitive personal information such as user location
to modernize and upgrade its core network software. and call logs. Contractual mitigations limiting the approved use of
such functionalities in line with the Sensitive Business Framework
were therefore agreed with the communications service provider.
Approved with conditions Local reseller A local partner agreement with a reseller was due for Contractual mitigations limiting the usage of the Ericsson solu-
renewal. While the reseller operates in a low-risk tions for the end customer were agreed with the local partner.
country, it supports government entities, which is why
an assessment through the Sensitive Business
Frame-work was required.
Rejected Local communications A local communications service provider requested The communications service provider did not disclose the author-
service provider Ericsson to provide a solution that would give authority entity nor the purpose of the functionality. Therefore, it was not
ities unrestricted direct access to subscribers’ data possible to identify the risk of misuse and potential adverse human
traffic. The authority entity that would receive this rights impacts, nor was it possible to propose any mitigating
data was not disclosed. measures. The engagement was therefore rejected.
Not pursued Local communications A local communications service provider requested As the risk was identified by the market area organization, the
service provider functionality that could potentially pose a risk of mis- decision not to pursue the opportunity was taken without the need
use in a high-risk country. to involve the central Sensitive Business Core Team.
S4 Corporate citizenship
Impacts, risks and opportunities Governance and policies
Ericsson and its technology have the potential to positively impact stakehold- Group level operational responsibility over the initiatives and programs
ers, communities and societies in a multitude of ways, from facilitating access described on the next page is delegated to Ericsson’s Sustainability and
to education for children and young people, to providing necessary commu- Corporate Responsibility unit, often in collaboration with the market areas.
nications infrastructure to support humanitarian response in crisis situations. Volunteering activities are managed together with the People department and
In addition to the benefits to the receiving parties, meaningful community the heads of Marketing and Communication in the market areas through the
engagement also contributes to enhancing the employee experience for the Volunteer Program Board, chaired by the Head of Sustainability and Corporate
people working for Ericsson and can positively impact the Company’s brand Responsibility.
and reputation. However, as with any form of contribution, there are risks A Sponsorship and Donation Committee, on which the Chief Marketing
of potential misuse of resources provided by Ericsson that must be carefully Officer, the Chief Compliance Officer, and the Head of Sustainability and
evaluated and appropriately managed. Corporate Responsibility sit, governs matters related to donations and
Note S4, cont’d.

sponsorships. All group-wide sponsorships and donations must be approved by Ericsson Innovation Awards
the Committee. Approval of local sponsorships can be delegated to the respec- The Ericsson Innovation Awards is a yearly competition open to university
tive market or business area head. In certain situations, donations must also be students of all ages, regardless of location, aimed at recognizing innovative
approved by the President and CEO or the Board of Directors. concepts that utilize technology to solve global challenges. Regional winners
A Group Policy on Sponsorships and Donations sets out foundational rules and top-three finalists are given mentoring from Ericsson employees and
applicable to the Group, which are further detailed in a group directive on the awarded cash prizes.
same topic.
Collaborations and partnerships
Management approach Ericsson leverages its impacts through collaborations and partnerships with
Ericsson leverages its core competencies in connectivity technology to support, other organizations. In the table below, a selection of significant external
develop and create positive impact for stakeholders in the communities in collaborations are listed.
which it operates. Described below are group-wide programs and initiatives
through which Ericsson engages with local communities and stakeholders Organization Engagement objective
on a non-commercial basis. In addition to these group-wide initiatives, there 1t.org Ericsson contributes to 1t.org, part of the World Economic
are local initiatives driven by the market areas not described here. Initiatives Forum’s work to accelerate nature-based solutions through
our pledge on Connected Mangroves, which is a reforesta-
related to digital education are described in note S5 on page 29. tion project in Malaysia, the Philippines and India that lever-
To prevent potential misuse of its resources the Company is strengthening ages connected technologies such as solar-powered sensors
processes, including assessments, approvals and documentation for all forms and real-time camera footage to collect and analyze critical
data on mangrove wetlands. The project offers the local
of contributions. Further, the work with third-party contributions is being community a platform to check on water, soil and humidity
revised to make sure that the Company focuses on contributions with the conditions, and remotely monitor any intrusion on the site.
highest impact. International Red Cross Ericsson contributes with donations during emergencies to
and Red Crescent the Red Cross Red Crescent humanitarian work.
Due diligence of partner organizations Movement
To ensure Ericsson only partners with organizations that share similar values UNHCR UNHCR, the UN Refugee Agency, is a global organization
and ethical standards, systematic evaluations of partners for sponsorship and dedicated to saving lives, protecting rights and building a
better future for refugees, forcibly displaced communities
donations are applied. The Compliance function is responsible for evaluating and stateless people. Ericsson Response is a partner to the
all sponsorships and donations, with regard to potential missuses, ensuring UNHCR.
appropriate due diligence of receiving parties and recommending necessary UNICEF UNICEF works in over 190 countries and territories to
mitigation measures to be adhered to when necessary. More information on protect the rights of children. Ericsson supports UNICEF-led
third-party management can be found in note G2 on page 32. efforts through donations, employee volunteering and
through humanitarian response action in disaster-stricken
areas. In addition, Ericsson is a partner to UNICEF on the
Donations and sponsorships Giga initiative for school connectivity, see more information
Ericsson makes donations, both directly by the Company, as well as in the form in note S5 on page 29.
of company-matched employee donations, to selected causes. Donations can World Food The WFP is the leading humanitarian organization saving
be in the form of both cash and in-kind. Ericsson also engages in sponsorships Programme (WFP) and changing lives, delivering food assistance in emergen-
cies and working with communities to improve nutrition and
of activities that are aligned with Ericsson’s values and brand strategy. build resilience. Ericsson contributes through the Ericsson
In certain markets, most notably in India and South Africa, Ericsson is Response and WFP partnership.
subject to mandatory profit-sharing rules, where a portion of the local entity’s
profits are to be spent on community investments and other charitable causes.
Performance metrics
Ericsson Volunteers
Ericsson Volunteers is one way through which the Company delivers a mean- Economic value generated and distributed
ingful employee experience and contributes to positive impacts on communi- (SEK million) 2022 2021 2020
ties and broader society. Every employee is given one paid day per year when Value generated
they can apply their skills and time to volunteering. A volunteering framework Revenues 274,432 234,521 234,347
sets the direction for activities applicable for volunteering, including both Value distributed
general cause categories as well as activities for extended volunteering, such Operating costs -158,674 -127,253 -121,462
as Ericsson Innovation Awards, Connect To Learn and Ericsson Response. Wages and benefits -89,191 -77,462 -74,645
Payment to providers of capital -9,966 -8,496 -8,103
Ericsson Response Payments to governments -7,113 -6,226 -5,678
Ericsson Response is a global volunteer program founded by employees in Community investments 1) -115 -113 n/a
2000. Together with partners, Ericsson Response utilizes the Company’s Value retained 9,373 14,971 24,459
technology and the skills of its employees to provide connectivity where local 1) Includes donations and mandatory profit distributions made by Ericsson Group companies during the
services are not sufficient, for example after natural disasters or in refugee reporting year. Sponsorships included are those with activity start date January 1 to December 31, or
situations. multi-year contracts that were active during the reporting year. Sponsorships related to recreation and
sports have been excluded. Due to limitations in data availability, comparative figures for 2020 cannot
It is a partner of the World Food Program led UN Emergency
be disclosed.
Telecommunications Cluster, a global network of partners to fill connectivity
gaps for humanitarians and populations affected by disasters. Ericsson is a
partner to the UNHCR (the United Nations High Commissioner for Refugees)
to strengthen the Refugee Emergency Telecommunications Sector, to provide
vital communications to the humanitarian response community, supporting
their life-saving work.
S5 Digital inclusion
Impacts, risks and opportunities Financial inclusion
The number of Internet users has increased from a few million to almost five Ericsson Wallet Platform enables leading communications service providers
billion within thirty years. This growth has enabled a digital transformation that and financial institutions to provide easy to use, affordable and secure mobile
is reshaping societies and economies. Research shows that, on average, a 10% financial services to financially underserved people worldwide, helping them
increase in the mobile broadband adoption can increase economic growth by lead a financially empowered life. It allows unbanked people to save and
up to 0.8% 1), with the effect being significantly larger in low-income countries. transfer money, receive financial-aid and salary, pay bills and merchants,
Moreover, a 2022 study 2) commissioned by Ericsson in 15 countries in Asia, top-up mobile services, get instant loans, access insurance and other financial
Africa and Latin America also showed that 5G rollout can generate overall services, helping to meet their financial goals and aspirations
economic benefits (in terms of GDP growth) three-to-seven times higher than
the incremental cost of extending coverage. Similarly, increases in school Digital education
connectivity can have significant effects of economic growth, with potential Ericsson’s commitment to bridging the digital divide includes a focus on
double-digit additions to GDP if low-income countries achieve the same levels access to education and digital skills development. To reinforce this effort, the
of connectivity as the most connected economies 3). Yet the potential of the Company set the ambition to empower 1 million children and young people
Internet for social and economic growth remains largely untapped, as roughly with access to digital tools, learning content and skills development programs
one third of the world’s population remains offline and many among the two by 2025. This is carried out through Ericsson’s global flagship education
thirds of the people online lack meaningful connectivity. program, Connect To Learn, a non-profit program delivered in collaboration
The connectivity gap is twofold and consists of both a gap in overall cover- with governments, communications service providers, non-governmental
age, meaning access to any type of mobile broadband connection, and a gap in organizations (NGOs), and international/UN agencies, with the ambition to:
terms of lacking a mobile broadband connection that is good enough to allow – Accelerate access to digital connectivity for schools and community learning
full participation in the digital economy, such as access to at least 4G coverage. centres and, ultimately, all learners around the globe and their communities.
The challenge in bridging both these gaps is primarily a financial, rather than – Empower the next generation with digital skills, essential for their socio-
a technological one, with a need for new business models to evolve to enable economic development and enhance industry-ready education to make
meaningful connectivity at lower cost. students employment ready.
Nearly one quarter of the world’s adult population lacks access to formal
banking and financial services according to World Bank Findex. However, the Key non-profit education offerings that Ericsson deploys globally in collabora-
majority of the unbanked population own a mobile phone that can help them tion with partners are:
access formal financial services. Mobile financial services offer the possibility – Ericsson Educate: A digital skills development program designed for
to bring millions of financially underserved people into the formal economy, university students covering key topics related to emerging technologies
boosting individual livelihoods and transforming economies. such as: Telecommunications and 5G, artificial intelligence, data science,
In addition, without sufficient digital literacy people cannot fully partake in automation and internet of things. Since 2020, the program has been
the digital economy regardless of whether they have a meaningful connection deployed to students at universities across Asia, Africa and the Middle East.
or not, which is why digital education is another key enabler to achieve broad – Ericsson Digital Lab: An education program designed to inspire children
digital inclusion in society. aged 11–16 to explore new technologies and develop their problem-solving
skills. The Digital Lab is a place where instructors from Ericsson and partner-
Governance and policies ing organizations can share their interest in technology with students, and
The Executive Team governs Ericsson’s Sustainable Business Program. The includes courses on robotics, game development, electronics, and artificial
aim of the program is to accelerate and fully integrate sustainability-related intelligence.
aspects of Ericsson’s portfolio and programs. The program is cross-functional
and includes eight work streams of which digital inclusion is one. In 2020, Ericsson became the first private sector partner to make a multi million
dollar commitment to support the joint UNICEF-ITU 4) Giga initiative for global
school connectivity with the aim to connect every school to the Internet and
Management approach
every young person to information, opportunity and choice. With support from
Ericsson’s approach is based on the belief that technology developed and
Ericsson, Giga maps schools and their connectivity levels and their connectivity
deployed responsibly can help bridge the digital divide and ensure the benefits
levels to help target investment to where it is most needed and to measure
of the digital economy and society are enjoyed by all. The Company works
progress toward increasing Internet access. Ericsson's financial and in-kind
toward this goal through digital inclusion initiatives which cover the portfolio,
support have contributed towards Giga’s achievements to date in connecting
business cases, advocacy and on-the-ground efforts.
over 5,500 schools and over 2 million students.
Business models for affordable connectivity
Ericsson continues to explore how its portfolio and offerings can be used to
develop cost efficient and profitable business offerings targeting regions
with no or low internet penetration. The scope of these efforts includes radio
and power management solutions as well as business cases and use case
scenarios.
1) Edquist, Harald et. al. (2018). How important are mobile broadband networks for the global economic development?, Information Economics and Policy, 10.1016/j.infoecopol.2018.10.001.
2) Stewart, Janette et. al. (2022). Future Value of mobile in emerging markets. Analysys Mason, 698248491-273.
3) Birdwell, Jonathan et. al. (2021). Connecting learners: Narrowing the educational divide. The Economist Intelligence Unit.
4) International Telecommunication Union
Note S5, cont’d.

Collaborations and partnerships Performance metrics
Ericsson leverages its efforts through collaborations and partnerships with
other organizations. Below are some of the more significant collaborations Connect To Learn
related to digital inclusion the Company is engaged in. (No. aggregated) 2022 2021 2020
Impacted children and youth 400,163 296,079 226,612
Organization Engagement objective Countries covered 36 30 25
ITU/UNESCO Broadband Ericsson’s CTO is a Commissioner on the Broadband Com-

Commission for Sustaina- mission, a multi-stakeholder high-level platform for devel- Ericsson Mobile Wallet
ble Development oping policy recommendations and thought leadership on
bridging the digital divide, dedicated to raising awareness of (Millions) 2022 2021 2020
the importance of broadband on the global sustainable Registered accounts 379 314 268
development agenda. The Commission envisions and works
Active users 1) 80 65 53
towards realizing a fully connected world that h arnesses the
power of broadband to achieve the UN S ustainable Devel- 1) Active users are defined as those having used the service in the past 30 days from the reporting cut-off
opment Goals by 2030. date.
The World Economic The World Economic Forum-aligned EDISON Alliance 1
Forum Edison Alliance Billion Lives Challenge brings together digital inclusion
commitments from governments, companies and other
organizations globally. The members, including Ericsson,
are committed to prioritizing digital inclusion as founda-
tional to the achievement of the United Nations’ Sustainable
Development Goals so that every person can fully partici-
pate in the digital economy and society.
Whitaker Peace and Ericsson is a long-standing partner to the Whitaker Peace
Development Initiative and Development Initiative aimed at supporting youth to
develop their skills as leaders, as peace builders, and com-
munity builders. The partner organizations recognize the
important role of ICT in education and pursue joint efforts
to develop peacebuilding and conflict resolution programs
using ICT as a tool for the advancement of peace in
post-conflict situations.
Technovation Ericsson is partnering with NGO Technovation in a global
mentorship program with the objective to inspire girls to be
leaders and tech entrepreneurs. With the support of volun-
teer mentors and parents, girls work in teams to code mobile
apps that address real-world problems. Ericsson employees
support as mentors to enrolled participants.
Section G – Governance
G1 Sustainability and corporate responsibility governance

Governance of Sustainability and Corporate Responsibility (S&CR) follows the In 2022, Ericsson established a Group Business Risk Committee (BRC) com-
Company’s overall governance structure. The Board of Directors, Executive prised of executives and co-chaired by the CFO and the CLO. The role of the
Team and management’s respective roles and responsibilities with regards to BRC is to consider the overall risk profile of the Group and ensure risk-informed
S&CR are described below. and ethical decision-making, as well as serve as a forum to monitor and assess
enterprise risk management on a regular basis.
Board of Directors
Executive remuneration
Audit and Technology and Part of variable remuneration to executives is determined by a number of
Finance Remuneration environmental and social criteria. See page 8 of the Remuneration report for
Compliance Science
Committee Committee
Committee Committee further details.
President and CEO Operational management

A dedicated S&CR unit, reporting to the Head of Group Function Marketing and
Corporate Relations, is accountable for developing and implementing strate-
Management
gies, policies, steering documents, targets and processes related to S&CR.
Responsibility for executing on S&CR strategies and progressing on targets
Sustainability-related
Steering boards and committees lies with the group functions, business and market areas, often in collaboration
with each other and through cross-functional Group-wide programs. See the
Sustainability-related table below for a list of such programs.
Group-wide programs
Group-wide programs
Business Market Group Ethics and Compliance Program
areas areas functions Sustainable Business Program
Ericsson Care Program
Group Sustainability and Corporate Responsibility unit
Board of Directors Integration of sustainability into the business lines is done through a company-
The Board of Directors oversees Ericsson’s S&CR strategy and receives reports wide Sustainable Business Program, with the Executive Team as the governing
on developments and performance annually, or more often as needed. The body of the program. The objective of the program is to accelerate and fully
Board approves the annual S&CR report as part of the Company’s statutory integrate sustainability aspects into Ericsson’s customer portfolio and opera-
Annual Report. tions. The program is cross-functional and includes the workstreams Climate
action, Energy performance, Circular economy, Material and substances,
Board committees Responsible sourcing, Position and standards, ESG reporting and Digital
The Audit and Compliance Committee (ACC) of the Board of Directors oversees inclusion.
Ericsson’s Ethics and Compliance Program and whistleblower procedures.
Further, the ACC reviews the Group’s handling of information and cybersecu- Group policies
rity, data privacy, and its environmental, social and governance (ESG) reporting Group-wide policies are approved by the President and CEO. A list of founda-
practices. As part of its role to prepare and propose rewards and compensation tional S&CR-related policies and steering documents can be found in the table
policies that attract and motivates the Company’s executives to achieve the below.
long-term interest of the Company and its stakeholders, the Remuneration
Committee considers inclusion of ESG criteria in variable compensation plans. Foundational policies and steering documents
More information on pages 2 and 8–10 of the Remuneration report. Part of the Code of Business Ethics
Technology and Science Committee’s role of monitoring the Company’s tech- Sustainability Policy
nology ecosystem, relationships and partnerships involves reviewing matters Security Policy
related to energy and sustainability. Privacy Policy
Health, Safety and Well-being Policy
President and CEO and the Executive Team Business and Human Rights Statement
The Executive Team, led by the President and CEO, is responsible for approving Code of Conduct for Business Partners
S&CR strategies and related Group targets, and regularly receives reports on
the implementation of strategies and progress made on targets and mile-
The Code of Business Ethics (Our Compass) is the foundation for employees
stones. Its members are also part of dedicated steering boards and committees
and other people working for Ericsson for how to conduct business responsibly.
that provide more frequent strategic guidance and oversight of S&CR-related
It serves as a guide to Ericsson’s ethical principles and expectations.
matters (see table below). The responsibilities of these boards and committees
The Code of Conduct for Business Partners outlines expectations on suppli-
are further detailed in the topic-specific notes to this report.
ers and other business partners in key areas such as business ethics and anti-
corruption, labor and human rights, occupational health and safety, environ-
Steering boards and committees Chaired by
ment and climate change. It is a binding requirement for all business partners.
Business Risk Committee Chief Financial Officer and Chief Legal Officer
Ericsson encourages employees and external stakeholders to report
Group Compliance Committee Chief Legal Officer
concerns of violations of either of the Codes through the Ericsson Compliance
Sustainable Business Reference Group Chief Financial Officer
Line, see more information in note G2 on pages 32–33.
Group Enterprise Security Privacy Board Chief Financial Officer
Product and Technology Security Board Chief Technology Officer
Group management system and risk management
Global People Leadership Team Chief People Officer Ericsson has a global management system, the Ericsson Group Management
Global Occupational Health Chief Marketing Officer System (EGMS). The EGMS aims to ensure that Ericsson’s business is well
and Safety Board
managed and has the ability to fulfill the objectives of major stakeholders
Note G1, cont’d.

within established risk limits and with reliable internal control. The EGMS also environment, health and safety and information security. More information on
aims to ensure compliance with applicable laws, listing requirements, govern- the EGMS and ERM framework can be found on page 21 in the Financial report
ance codes and corporate responsibilities. and on page 18 in the Corporate Governance report.
EGMS is founded on ISO 9001 (international standard for quality manage- The S&CR report includes information on ESG-related impacts, risks and
ment systems) but is designed as a dynamic governance system to enable opportunities that are not considered significant on a Group level but which
Ericsson to adapt the system to evolving demands and expectations, including are relevant to disclose from a sustainability perspective.
new legislation as well as customers’ and other stakeholders’ requirements.
ISO certificates are issued by a third-party certification body proving External commitments and endorsements
that the system is efficient throughout the operations as well as compliant In addition to topic-specific commitments and endorsements described in this
to the ISO standards in scope. Ericsson’s operations are currently certified report, Ericsson is a founding member of the UN Global Compact and continues
to ISO 9001 (Quality), ISO 14001 (Environment), ISO 45001 (Health and to support its 10 principles. Ericsson’s President and CEO is a member of the
Safety) and ISO 27001 (Information Security). Selected Ericsson units are Alliance of CEO Climate Leaders, a global community of chief executive offic-
also certified to TL 9000 (telecom-specific standard). EGMS is also assessed ers who work toward climate action across industry sectors and engage with
within the scope of the audit plan of Ericsson’s internal audit function. policymakers to help deliver the transition to a Net Zero economy. Ericsson’s
Identification and treatment of ESG-related risks is an integrated part of Chief Technology Officer is a commissioner on the ITU/UNESCO 1) Broadband
the Enterprise Risk Management (ERM) framework, which is a part of the Commission for Sustainable Development which develops policy recommen-
EGMS. There are also dedicated risk management frameworks aligned with dations to advance broadband connectivity and digital inclusion.
the ERM framework that cover specific areas of risks such as anti-corruption,
1) International Telecommunication Union / United Nations Educational, Scientific and Cultural Organization
G2 Compliance and business ethics

Impacts, risks, and opportunities nor identify that any Ericsson employee was directly involved in financing
Corruption and unethical business practices are an obstacle to economic and terrorist organizations.
social development and often disproportionally affect fragile communities and In March 2022, the DOJ informed Ericsson that it had determined that,
undermine democratic institutions. There are increasing demands, both regula- before entering into the DPA, the Company provided insufficient information to
tory and from stakeholders, for more transparency around business practices the DOJ about the Company’s 2019 internal investigation into conduct in Iraq.
and for companies to have zero-tolerance policies for corruption and ethics and The DOJ also determined that the Company breached the DPA by failing to
implement robust compliance programs to ensure a culture of compliance. inform the DOJ about the investigation after entering the DPA.
With operations in more than 150 countries, Ericsson is present in markets In June 2022, the SEC informed Ericsson that it opened an investigation
and geographies with varying levels of exposure to corruption and unethical concerning matters described in the Company’s 2019 Iraq investigation report.
business risks, and therefore needs to have a comprehensive approach to Under Ericsson’s consent judgment with the SEC, the Company is permanently
mitigate such risks. enjoined from violating the FCPA’s antibribery, books and records and internal
controls provisions. Violations of the injunction or consent judgment could subject
Ericsson interactions with U.S. authorities and other governmental Ericsson to new civil and criminal penalties as well as a new enforcement action.
authorities In December 2022, the Company agreed with the DOJ and SEC to extend
In December 2019, Ericsson entered into a resolution with the United States the term of the Company’s independent compliance monitor for one year, until
Department of Justice (DOJ). The resolution included a deferred p rosecution June 2024.
agreement and a guilty plea by the Company’s Egyptian subsidiary to a On March 2, 2023 the Company reached a resolution (DOJ Plea Agreement)
criminal violation of the US Foreign Corrupt Practices Act’s (FCPA) antibribery with the DOJ regarding non-criminal breaches under its DPA. Under the
provisions. Under the DPA, the Company admitted to the conduct described DOJ Plea Agreement, Ericsson will plead guilty to previously-deferred FCPA
in the DPA’s statement of facts, and the DOJ agreed to defer prosecution of charges. In addition, Ericsson agreed to pay a fine of USD 206,728,848. The
Ericsson for the DPA’s three-year term if Ericsson did not violate the terms of entry of the DOJ Plea Agreement will bring the DPA to an end. With respect to
the DPA. As part of the DPA with the DOJ and consent judgment with the SEC, matters described in the 2019 internal Iraq investigation report, the Company
Ericsson agreed to engage an independent compliance monitor for three years continues to thoroughly investigate the matters in full cooperation with the
while the Company continues to undertake significant reforms to strengthen its DOJ and the SEC. As previously disclosed, the Company’s 2019 internal Iraq
Ethics & Compliance Program. investigation did not conclude that Ericsson made or was responsible for any
In June 2020, the three-year period for the monitorship commenced with payments to any terrorist organization and the Company's significant further
the appointment of its monitor. The monitor’s primary responsibilities include investigation over the course of 2022 has not altered this conclusion.
reviewing and evaluating Ericsson’s compliance with the terms of the DPA The Company has and continues to strengthen its approach to governance
and evaluating the Company’s progress in implementing and operating its and risk management, including through the implementation of enhanced
enhanced compliance program and accompanying controls, as well as provid- internal policies and practices and continued, active oversight by the Board and
ing recommendations for improvements. Executive Team.
In October 2021, the DOJ notified Ericsson of its determination that the On January 12, 2023, the Company announced that a provision in the fourth
Company breached its obligations under the DPA by failing to provide required quarter of 2022 of SEK 2.3 billion (approx. USD 220 million) in relation to the
information to the DOJ. DOJ Plea Agreement had been made. The provision also included estimated
In February 2022, the Company publicly disclosed that an internal investiga- expenses (SEK 0.1 billion) for the previously announced extended compliance
tion in 2019 included a review of the conduct of Ericsson employees, vendors, monitorship. Ericsson also faces other negative consequences from these
and suppliers in Iraq during the period 2011–2019. The investigation found matters, including matters under review as part of its ongoing and future
serious breaches of compliance rules and the Company’s Code of Business communications with governmental authorities to comply with its obligations
Ethics and identified evidence of corruption-related misconduct and other under the DOJ Plea Agreement. More information related to this matter can be
serious violations, including payments to intermediaries and the potential found in the Financial report on pages 22–23 and in the Corporate Governance
use of alternate transport routes in connection with circumventing Iraqi report on pages 2–3.
Customs, at a time when terrorist organizations, including ISIS, controlled
some transport routes. The investigation also identified payment schemes and Governance and policies
cash transactions that potentially created the risk of money laundering. The The Compliance function at Ericsson is led by the Chief Compliance Officer
investigators could not determine the ultimate recipients of any payments, (CCO), who reports to the Chief Legal Officer (CLO). In addition, the CCO
Note G2, cont’d.

has a direct reporting line to the Audit and Compliance Committee (ACC) on Third-party management
the Board of Directors on matters falling within the scope of the Ethics and Ericsson maintains a global, risk-based and integrated Third Party
Compliance (E&C) Program (see further below) and regularly briefs the ACC Management (TPM) program to prevent, detect, and manage bribery and
on the implementation of the program as well as suspected and substantiated corruption risks in the Company’s relationships with its third parties.
cases of violations of the Code of Business Ethics or laws and regulations.The The program is managed by a central team of due diligence experts and
ACC oversees matters relating to compliance risk, and regularly receives report- data specialists that reports to the CCO and works in close coordination with
ing on other compliance related matters from the CCO and CLO. other functions including sourcing, sourcing compliance, sales, and internal
The compliance organization consists of legal counsels and compliance controls. The program includes a risk-based due diligence process to assess
officers at group-level working with general compliance and competition law. bribery and corruption risk exposure and potential liability that may result
Further, the market areas have local compliance officers supporting the line from relationships with third parties. A risk mitigation toolbox includes a broad
organization. range of measures that can be used to mitigate identified risks such as training,
The Company’s foundational values and principles are set out in the Code certifications, financial transaction pre-approvals, or, in extreme cases pay-
of Business Ethics (Our Compass), available in 43 languages. Specific policies ment blocks and rejections.
on Gifts, Entertainment and Hospitality, Third-party Management, Conflict TPM increasingly utilizes advanced data analytics and transaction analysis
of Interest, Anti-trust law, and Insider Rules, among others, are also in place. and focuses on monitoring risks throughout the lifecycle of business relation-
These policies are supported by relevant financial and procurement controls to ships. Business Partner Review Boards monitor the third-party risk landscape
ensure end-to-end oversight. Ericsson also has a Code of Conduct for Business and provide approvals and mitigating actions on high risk third parties on both
partners, which is a part of its standard supplier contracts. a market area and global level. The effectiveness of underlying processes in
each geography is continuously measured and strengthened, when necessary.
Executive variable remuneration
Short-term variable compensation to executives is affected by criteria related Training and awareness raising
to integrity. Breaches of the Code of Business Ethics can also result in denial of Ericsson’s communications and training on E&C are designed and intended to
reclaiming of variable compensation. See further information on pages 8 and 9 promote integrity-driven behaviors by employees and third parties. Trainings
of the Remuneration report. include instructor-led workshops for senior executives and middle manage-
ment (around 1,500 individuals) on leading with integrity and solving ethical
Management approach dilemmas and a targeted anti-bribery and corruption (ABC) e-learning for line
As Ericsson continues to evolve, a core and constant objective is to ensure that managers and employees in highly exposed roles (around 15,000 individuals).
the organization is optimally positioned to execute on its approach: delivering In addition to these specific training programs, all employees must take a
value and growth while operating ethically, managing risks, and having a mandatory online ABC training which is refreshed every second year. Additional
positive impact on the communities in which it operates. training programs are also available for employees in more exposed positions
Effective governance, risk management, and compliance are supported by to help better equip them to face compliance risks inherent to their positions.
a strong corporate culture, where all Ericsson’s employees exercise solid judg- Employees are regularly asked about the Company’s work with Compliance,
ment and act with integrity and in compliance with the Code of Business Ethics. Business Ethics and ABC through the bi-annual employee survey, which
Transparency and appropriate escalation of matters form a cornerstone of includes questions about their perception of the Company’s commitment to
the Company’s governance model; this allows for appropriate decision making ethical and responsible business practices and if they feel free to speak their
and ensures that the Executive Team, the President and CEO, and the Board mind without fear of negative consequences.
of Directors are properly informed and able to exercise the necessary oversight
across the Group. Ericsson recognizes that reputation and trust are hard won Employee performance evaluations
and easily lost and strives to win business with integrity. The Company takes a All employees have a goal related to acting with integrity, which encompasses
value chain approach with a zero tolerance for bribery and corruption in any of acting in accordance with laws and internal rules and instructions, followed up
its business dealings. Integrity is one of Ericsson’s core values and fostering a on as part of their annual performance evaluation.
compliance-aware and speak-up culture are cornerstones is a cornerstone of
its strategy. The strategy is executed through the Company’s (E&C) program Prevention of anticompetitive behavior
which is designed to raise awareness and prevent mistakes and breaches of the As part of the commitment to a compliance culture, employees are asked
Code of Business Ethics, detect mistakes and breaches when they do happen, to recognize competition (antitrust) laws and comply with them. Given the
and respond and remediate quickly when needed. complexity of competition laws, employees are encouraged to consult with the
competition law attorneys in the Company’s Legal department in case of any
Risk assessments, monitoring and controls questions.
Ericsson conducts bribery and corruption risk assessments using a risk-based,
multi-tiered approach across multiple regions to identify areas of heightened Reporting compliance concerns
risks. This typically includes document collection, onsite or remote interviews Employees are encouraged to report suspected non-compliance with the Code
of key personnel, and financial transaction testing for select markets and units. of Business Ethics or laws and regulations directly to their manager, the supe-
Focus areas include, but are not limited to leadership and culture, sales, third rior of a manager or to the People or Legal and Compliance departments.
party management, gifts and hospitality, conflicts of interest, government rela- In addition, both employees and third-party individuals can report concerns
tions, policies and procedures, sponsorship and donations, and joint ventures related to the Code of Business Ethics or the Code of Conduct for Business
and partnership. Partners via the Ericsson Compliance Line either by a secure website or by
Further, a Central Monitoring Center within the Finance department and phone at any time. Reporting can be done anonymously, as permitted under
a Monitoring and Testing unit within the Legal and Compliance department applicable legislation. The process for receiving and handling compliance
cooperate in end-to-end monitoring of the E&C program. concerns is designed to help maintain an appropriate degree of independent
assessment. Ericsson does not accept any discrimination of, or retaliation
Digitalization and operational efficiency against, individuals who report compliance concerns in good faith.
The core compliance processes are integrated in an E&C Portal (facilitating con- Ericsson’s Allegation Management Office is responsible for the overall
trols by the Compliance Office around high-risk transactions, including benefits management process from the time an allegation of a potential compliance
provided to third parties, particularly public officials) and combined with an inte- violation is reported to the remediation of any such substantiated violation.
grated reporting and analytics E&C Application (hosting E&C compliance data The Corporate and Government Investigations (CGI) team is responsible for
and insights) to support overall program deployment, m onitoring and testing. ensuring that all allegations of potential compliance violations recommended
An interactive State-Owned Entities (SOE) Map is available for employees to to CGI are appropriately investigated, and that investigations of higher risk
identify Ericsson’s top state-owned customers. Global customer designations are reported to the Audit and Compliance Committee as appropriate. Findings
enable Company employees to treat public officials of SOEs with greater sensi- and remediation plans for cases are presented to Ericsson’s Market Area
tivity and care from an E&C perspective. Remediation Committees.
Note G2, cont’d.

Targets
Strengthen Ericsson’s Ethics and Compliance program to ensure an effective
and sustainable anti-bribery and corruption program by 2024.
Performance metrics
Compliance training and awareness – completion rates 1) Ethics and compliance - employee responses
(%) Target audience 2022 2021 (Survey results) 2022 2021 2020
CoBE acknowledgement 2) Total workforce 99 99 Ethical and responsible business practices 1) 88 87 88
Mandatory ABC training 3) Total workforce 93 99 1) Scoring of aggregated employee responses to question "Ericsson shows a commitment to ethical
Enhanced ABC training 3) Line mgrs. & exposed roles 97 82 and responsible business practices", measured on a scale of 0–100 with 100 being the most favora-
ble result. Cradlepoint employees not included in 2021 and 2020 statistics. Vonage employees not
Ethics training for l eaders 4) Exec. & middle mgmt. 90 70 included.
1) Ericsson’s compliance training and awareness program has undergone a significant transformation
from recent years wherefore relevant comparative figures for 2020 are not available. The scope of Compliance concerns reporting
reporting is limited to the active workforce, meaning people on long-term leave or in exit programs are
excluded from the statistics.
The table below shows the number of compliance concerns received, the
2) Acknowledging understanding of the Code of Business Ethics is initially required when an individ- number investigated, the numberconcluded in the reporting year which were
ual starts working for the Company, and subsequently once every year. The numbers shown above found to be substantiated, as well as the number of open investigations at year
represent the share of the workforce in scope which had completed acknowledgement during the
12-month period ending January 31, 2023.
end. As the length of an investigation varies depending on case complexity,
3) Mandatory and enhanced ABC training is mandatory to take once every two years. The numbers not all cases are concluded in the same year as they are reported. Hence, the
shown above represent the share of target audience which had completed assigned training during number of substantiated cases and cases under investigation also includes
the preceding 24-month period.
cases received in prior reporting periods but which were concluded during the
4) Training is held in batches for the target audience. The numbers shown above represent the share of
the target audience which had completed assigned training during the preceding 24-month period. reporting year. Many matters reported are not referred for investigation. These
are often inquiries of a general nature or other matters which are not deemed
to be related to misconduct or breaches of the Code of Business Ethics. When
applicable, these cases were referred directly to the relevant units for attention
or remediation.
Reported, investigated and substantiated compliance concerns 1) Corrective and disciplinary actions by type 1)
(No.) 2022 (No.) 2022 2021 2020
Concern intake and investigation Termination 39 97 87
Reported 1,092 Demotion 4 2 2
Not referred for investigation 2) 877 Written warning 74 89 87
Referred for investigation 215 Verbal warning 46 22 32
Resignation 8 19 28
Status at year end Other 7 4 0
Substantiated 3) 118 Total 178 233 236
Under investigation 209 1) Actions taken as a result of substantiated breaches of Ericsson's CoBE. Each action represents a
unique individual meaning the sum of actions shown in this table cannot be directly compared to
the number of substantiated cases shown above, as each case may involve several individuals.
Reported concerns by category An individual is counted once in these statistics with the most severe action determining category
classification.
(No.) 2022
Fraud, corruption and regulatory breach 177
Conflicts of interest 69
Human resources 429
Discrimination 20
Human rights –
Operations 125
Other 4) 272
Total 1,092
1) The process for categorizing compliance concerns underwent significant transformation in 2022 such
that comparative figures are not available.
2) Cases received but not investigated as they pertained to inquiries of a general nature or other matters
not deemed to be related to misconduct or breaches of the Code of Business Ethics.
3) Cases closed and concluded to be substantiated during the reporting year, some of which were
reported in previous reporting years.
4) Includes reported concerns related to environmental sustainability, health and safety as well as con-
cerns which were assessed as not constituting compliance concerns, such as product quality issues,
employees testing the Compliance Line, or comments of a general nature. To the extent relevant these
are referred to the relevant unit or function for attention.
G3 Supply chain and responsible sourcing

Ericsson’s supply chain Manufacturing sites and hubs
Ericsson has a global supply chain with around 20,000 tier 1 suppliers (No.) 2022
and several thousand additional tier 2 and higher suppliers. However, only Manufacturing sites
about 2,000 tier 1 suppliers make up more than 90% of the supplier spend. Own sites 6
Of the total supplier base, around 200 suppliers are providers of hardware EMS 9
to Ericsson’s production. Most of the supplier spend is related to purchases Hubs
of electronics and mechanical components, outsourced electronics manu Supply 9
facturing, and Information and Communications Technology consulting and Component 2
engineering.
Share of production (%) 1) 2022
Share of supplier spend Own sites 17
(%) 2022 EMS 83
Network products – hardware 22 1) Calculated based on the number of modules for radios and base bands delivered in the reporting
Network services and managed services 18 year. Shares fluctuate over time due to factors such as demand forecasts and type of hardware that is
produced.
Production services and test 19
Site products and logistics 12
IT 12
Impacts, risks and opportunities
External workforce 7 Ericsson is involved in several indirect impacts through its business and supplier
Business Support Services 10 relationships. In the environmental area, greenhouse gas emissions and waste
Total 100
generation have been assessed as the most relevant ones. For human rights,
labor-related rights such as risk of forced labor, living wages and working
hours, have been identified as salient issues in the supply chain. As for health
Manufacturing supply chain and safety-related impacts, the supplier category with the highest risk is site
Manufacturing and assembly of Ericsson’s electronic hardware is done both at services and in particular field operations, where most fatalities and accidents
Ericsson’s own sites and at third-party electronic manufacturing services sites in the supply chain occur. Additionally, with a complex and global supply chain
(EMS). In addition, a limited number of modules are manufactured by original/ come risks of business conduct by partners that are not aligned to a company’s
joint design manufacturing (ODM/JDM) suppliers supporting specific market own values, principles and standards.
and business requirements. Regulation on supply chain visibility and traceability, particularly in regard
Ericsson supply hubs are regional distribution centers for logistics opera- to forced labor, is being introduced or considered in several of Ericsson’s key
tions to serve customer orders and customer projects efficiently with activities markets. Companies must have robust processes for supply chain due diligence
like collection of deliveries from production units and suppliers, warehousing, in place, or risk losing access to these markets.
co-packing, order configuration and transport optimization. Working together with suppliers not only helps them improve on their
Regional inbound (component) hubs consolidate material from component environmental, social and governance performance, it is also one way for
suppliers and are a central point of component supply to the production sites, Ericsson to create strong supplier relationships, and thereby help build supply
creating resilience and flexibility in inbound supply chains. chain resilience.
Ericsson’s manufacturing supply chain
Manufacturing sites
Ericsson
EMS
Hubs
Supply
Component
Note G3, cont’d.

Governance and policies including, but not being limited to, employment conditions such as working
Within Ericsson’s sourcing organization, a dedicated Responsible Sourcing unit hours, wages and management dialogue, OHS – such as accident and incident
is responsible for driving sustainability-related initiatives as part of the overall prevention, chemical handling as well as communication of requirements to
sourcing strategy. sub-suppliers and contractors.
The Code of Conduct (CoC) for Business Partners is the foundation for the Non-conformities are required to be addressed through time-specific correc-
Company’s work with Responsible Sourcing and is part of standard supplier tive action plans. Since the CoC is part of standard supplier contracts, suppliers
contracts. The CoC covers four main areas: anti-corruption and business ethics, failing to adhere to it may have their contracts terminated.
human and labor rights, safe and healthy working conditions, and environmen- Because of travel restrictions during the pandemic, remote audits have
tal management. In addition, and covering all these areas, there is a require- increased in number, but always with the intention to perform on-site audits
ment on suppliers to have an established management system. Business once restrictions have been eased and conditions allow for it. Ericsson does not
partners must also ensure and monitor that their suppliers and subcontractors conduct unannounced audits.
comply with the CoC, or other agreed equivalent standards.
Alongside the CoC, specific requirements on business partners and suppliers Contract compliance audits
with regards to environment and occupational health and safety (OHS) are Ericsson also conducts audits to verify compliance to agreements between
available and can be accessed through the Company’s website. suppliers and Ericsson. These are performed by Ericsson’s internal auditors
The Ericsson Compliance Line, available to internal as well external stake- and follow the principles of ISO 9011 Guidelines for Auditing Management
holders, including suppliers, can be used to report concerns about violations of Systems. Besides the CoC, other criteria such as trade compliance, business
policies or laws and regulations. See further information in note G2 on page 32. continuity management and security are in the scope of these audits. Non-
conformities are required to be addressed through time-specific corrective
Management approach action plans.
In line with Ericsson’s vision and strategy, Supply Chain of the Future is one of
the strategic focus areas within the sourcing organization. The objective is to Responsible Business Alliance
build resilient, compliant and responsible supply chains. Within the Responsible Ericsson is a member of the Responsible Business Alliance and is working to
Sourcing program, focus is on supplier alignment with environmental and OHS increase the share of participating suppliers, and to make further use of its
expectations, as well as adherence to the CoC in the supply chain. audit programs and other assets.
Supplier segmentation Training and awareness raising

Ericsson segments its supplier base to efficiently manage and prioritize supplier Ericsson offers free training through its website to its suppliers and business
relationship management activities, optimize value from the supplier base partners. Besides general training on the CoC, targeted content covering anti-
as well as manage risks. Suppliers are segmented into one of four categories corruption, conflict minerals, OHS and climate action is also available.
based on a combination of the following four aspects; spend, risk, dependency An internal online training covering modern slavery is available to all
and value. Suppliers in the top two categories are considered business critical. Ericsson employees and is mandatory for anyone that has supplier responsibil-
ity or a significant supplier contract. A set of trainings has been created for all
Supply chain resilience and business continuity Sourcing employees focusing on environmental requirements and how to guide
Ericsson strives to have dual supply sources to strengthen the supply chain suppliers to drive climate action. Direct access to the United Nation Global
resilience wherever possible. The company also invests in strategic buffers to Compact and Sustainable Development Goals training academies is available
further reduce the risk of disruptions. to employees in the sourcing organization.
In addition, the Company has a process to monitor disruptive events in
real time and offers suppliers to be visualized in the monitoring process. In Conflict minerals due diligence
case such an event occurs, Ericsson will be notified of which suppliers might Ericsson bases its approach on sourcing of minerals and metals on the OECD
be impacted. Based on supplier input about the event's impact, in combina- Due Diligence Guidance for responsible Supply Chains of Minerals from
tion with internal insights into the supply chain, the risk is assessed, and the Conflict-affected and High-Risk Areas. This process covers the metals tin,
perceived severity will guide mitigation activities for the specific event. The tantalum, tungsten, and gold (3TGs) as well as cobalt. As there are often sev-
real-time monitoring can be extended to integrate a supplier’s business con- eral tiers of suppliers between Ericsson and smelters or refineries, the Company
tinuity plans, enabling additional granularity in the analysis of the supplier’s does not normally have a direct purchasing relationship with them. More infor-
vulnerability. mation on this topic can be found in Ericsson’s annual Conflict Minerals report,
available on the Company’s website.
Responsible sourcing
The scope of the Responsible Sourcing program mirrors the topics covered Other measures
in the CoC. Appointed program managers drive and implement initiatives Anti-bribery and -corruption: More information on Ericsson’s work with third-
through networking within the line organizations. This work is aligned with the party management in relation to business ethics, and anti-bribery and corrup-
Sustainability and Corporate Responsibility strategy and is an integrated part tion is available in note G2 on page 32.
of the supply chain strategy.
Supplier adherence to standards and requirements is verified through two Human rights: Ericsson assesses its supplier categories for risks for human
audit programs, one based on the CoC and the other on Contract Compliance. rights risks, in particular risks for forced labor, and whether the risk is more
relevant further back in the supply chain or with direct suppliers. More informa-
Code of Conduct audits tion on Ericsson’s approach to human rights is available in note S3 on page 25.
The purpose of the CoC Audit program is to assess suppliers’ adherence to
Ericsson’s CoC. Suppliers in focus of this program are tier 1 suppliers and pri- Occupational health and safety: More information on Ericsson’s work with
marily those making up the top 90% of Ericsson’s supplier spend. The inherent OHS in its operations and in the supply chain is available in note S2 on page 24.
risk of these suppliers – based on factors such as purchase volume, country,
type of service or product supplied and time since the last audit – is assessed Climate action: To address emissions in the supply chain, Ericsson is engaging
and forms the basis for audit selection. with select high-emitting and strategic suppliers. More information is available
The audits are performed by a contracted third-party audit firm and are in note E2 on page 12.
done primarily on-site, with remote audits being an option for high-risk coun-
tries. The overall audit criterion is adherence to the CoC, with specific criteria
Note G3, cont’d.

Performance metrics 1)
Supplier audits Smelter RMAP participation and conformity by minerals in scope1)

(No.) 2022 2021 2020 2022
Code of Conduct audits 114 124 83 Identified Participating Conformant Conformity
Contract Compliance audits 15 24 23 (No.) smelters smelters smelters rate (%) 2)
Cobalt 85 64 35 55
Code of Conduct audit program Gold 181 148 95 64
Tantalum 39 34 34 100
(%) 2022
Tin 104 77 62 81
Audit findings 2)
Tungsten 52 38 37 97
Suppliers with non-conformities 97
Total 461 361 263 73
Suppliers with critical non-conformities 6
Corrective action rate 3) 2021

All non-conformities 73 Identified Participating Conformant Conformity
(No.) smelters smelters smelters rate (%) 2)
Critical non-conformities 63
Cobalt 83 45 23 51
1) See note O2 on page 41 for an explanation on limitations regarding value chain reporting and
disclosures. Gold 185 130 107 82
2) Calculated as the number of audited suppliers with identified non-conformities /critical non- Tantalum 52 39 39 100
conformities divided by the total number of audited suppliers in the preceding 24-month period
Tin 120 72 56 78
3) Calculated as the number of non-conformities/critical non-conformities addressed and closed
within 24 months from the time of identification, divided by the total number of identified Tungsten 68 48 43 90
non-conformities/critical non-conformities in the same period. Total 508 334 268 80
1) Responsible Minerals Assurance Process. Data is based on supplier responses as of January 31, 2023
and January 18, 2022 respectively and cover smelters identified in the supply chain.
2) Out of RMAP participating smelters.
G4 Security and privacy

Impacts, risks, and opportunities The Chief Security Officer is accountable for enterprise security, the Chief
The increased sophistication of security threats poses a growing risk of Product Security Officer for product security, and the Chief Privacy Compliance
incidents that can have significant adverse impact on companies, society and and Group Data Protection Officer for privacy.
individuals. With around 50% of the world’s 5G traffic, outside of Mainland
China, carried over Ericsson’s networks, the Company plays an important role Directives, frameworks and assurance
in securing networks and user data. The increasing prevalence of cybersecurity Security and privacy frameworks set requirements across the Company.
threats creates both risks and opportunities, as effective security can be a These cover product security, information security, privacy, IT security, risk
source of competitive advantage, while a lack of such measures may risk management, sourcing and third parties, incident management, insider threat
damaging customer trust. prevention, business continuity, physical security, security in high-risk areas,
Additionally, Ericsson, faces increasing cybersecurity threats to its own and travel and event security. The purpose is to ensure all areas of Ericsson’s
operations, where supply-chain compromise, insider threats and ransomware business processes are covered and ensure the delivery of resilient products.
attacks are some of the risks that potentially could have significant impact on Frameworks are developed in accordance with applicable regulations,
the Company and its customers. Further, as stringent security, privacy and data international standards (ISO/IEC 27001 based on NIST CSF 2, GSM NESAS,
localisation regulations have, and continue to be adopted, in many countries ISO 22301) and best practices.
in which Ericsson operates, Ericsson faces challenges in ensuring that its busi- Adherence to frameworks and processes is achieved through quantitative
ness operations comply with these regulations. While Ericsson welcomes clear and qualitative measurements and regularly recurring training including
regulation in the area, the high implementation pace, complexity in the law, in-depth training and security awareness.
and contradictions between different legislation pose compliance challenges
to the Company. This could have a material adverse effect upon the Company's Management approach
business, customer relationships, reputation, operating results and financial Ericsson’s security strategy is to strengthen the security posture of the
condition an lead to potential regulatory action. For further information on Company and its portfolio through more integrated, proactive, and customized
Security and Privacy and risks relating thereto see the chapter Risk factors in security and privacy controls. Ericsson’s strategic objectives for 2025 include,
the Financial report. but are not limited to, enhanced capabilities in cyber defense, for example,
advanced threat hunting, artificial intelligence detection, and behavioral analy-
Governance and policies sis to quicker detect and eliminate any threat actor activities. Ericsson will also
At Ericsson, security and privacy are driven in three main pillars: enterprise continue to invest in rapid vulnerability management capabilities across the
security, product security, and privacy, as mandated by the Security Policy and value chain to close any potential entry point for threats.
the Privacy Policy. Identifying and managing security and privacy risks is embedded in the
Ericsson’s Group Enterprise Security and Privacy Board, chaired by the Chief Company’s business processes. Security or privacy risks are handled directly
Finance Officer, is the central authority for the oversight of enterprise security or escalated to the regional or global level for mitigation in accordance with
and privacy. The Product and Technology Security Board, chaired by the Chief frameworks and processes. Key risks are fed into the security and privacy
Technology Officer, is the central authority for oversight of Ericsson’s product strategy processes as the basis for strategic direction and prioritization.
security and product privacy. The Audit and Compliance Committee and
Technology and Science Committee of the Board of Directors regularly receive Handling of security incidents
updates on security and privacy. An incident management process is activated if a security risk materializes, or
severe vulnerabilities are detected. Incidents are detected through technical
Note G4, cont’d.

controls or can be reported by employees or business partners through Data privacy compliance
Ericsson’s Security Incident Management System. Ericsson’s strategy for privacy compliance is executed through a company-
Escalation, management, and communication follow a defined global wide privacy program. Ericsson works with the General Data Protection
process. Confirmed security incidents are reported in accordance with appli- Regulation (GDPR) as the global baseline but focuses also on local deviations
cable legal, regulatory, and contractual requirements. Incidents that result in and adaptations where necessary. Ericsson’s Binding Corporate Rules (BCRs)
employee security investigations are handled by a dedicated team. The People approved by the European data protection authorities define the binding
and Legal departments are notified in the event of disciplinary actions, and law privacy framework for the Ericsson Group entities.
enforcement is notified in the suspicion of criminal offence. Ericsson has designated persons and departments responsible for privacy
issues across the Group. There are also appointed data protection officers with
Resilience testing and business continuity specific regulatory tasks where required under applicable laws.
Response and recovery plans and processes are implemented throughout The Company’s privacy compliance is regularly assessed in internal audits.
the Company to limit the scale and impact of an incident. The efficiency and In addition, the Ericsson BCRs set out a framework for monitoring and auditing
robustness of response and recovery plans are continuously tested. Business Ericsson Group’s privacy compliance.
continuity planning is in line with ISO 22301 and ISO/IEC 27001. For severe
incidents, a root cause analysis with lessons learned and recommendations for Performance metrics
improvement or mitigating actions is conducted and communicated.
Ericsson continuously tests its internal resilience against a variety of attacks Security incidents 1)
by utilizing internal and third-party simulation and tests. Similar tailored secu- (No.) 2022
rity tests and simulations are integrated and automated throughout Ericsson’s Significant security incidents –
product development process.
1) A significant security incident is cross-functional, complex/severe, or high impact in nature, potentially
affecting multiple organizations, markets, business areas and/or customers and include, but are not
limited to, those that require reporting/notification to authorities. The definition was updated in 2022
wherefore comparative figures are not available.
G5 Advocacy and policy influence

Impacts, risks, and opportunities Management approach
A company’s business can be significantly impacted by changes in public policy The objective of Ericsson’s advocacy activities is to achieve positive and
and regulation in the market where it operates. Engaging in discourse with sustainable long-term conditions for the Company and the Information and
policy makers, either directly or through intermediary organizations to influence Communications Technology sector in general. The Company aims to act as
public policy, is a legitimate and often important means to create favorable a trusted advisor, offering policy advice and recommendations when a legisla-
business conditions, but companies must do so in a way that does not risk tive or regulatory action could impact its business and investment conditions.
damage to their reputation or create risks of corruption. Companies must also Ericsson sets out to do so in a way that does not risk damaging its reputation
ensure that their own positions on important policy matters are consistent with or create risks of corruption.
those of any organizations they participate in to maintain credibility and trust. Only employees trained and individually authorized may engage in advo-
cacy activities. An annual vetting process is set up to ensure that employees
Governance and policies have obtained prior approval and authorization to speak to public officials. All
The Ericsson Group Directive on Policy Advocacy and Interaction sets forth the external engagements with public officials to articulate a public position or
binding requirements applicable to managing advocacy activities with public Ericsson’s view on a regulatory matter shall be registered and employees shall
officials and industry representatives. These rules of engagement are manda- keep a record of contacts, dates of interactions as well as a summary of out-
tory for all government and policy advocacy personnel within the Company and comes of discussions, action points and decisions. These records are analyzed
apply to all interactions which involve an active advocacy and policy element quantitatively, as well as qualitatively through random checks on inputs.
on behalf of Ericsson.
Positions on various policy and regulatory topics are agreed and approved Due diligence
within established governing bodies consisting of senior representatives from The Company only participates in trade and industry associations that share
different parts of the Company. These positions serve as a basis for any policy- the Company’s ethical values, and it does not engage in any advocacy efforts
related advocacy efforts, within industry organizations or directly with public that would undermine Ericsson’s commitment to ethical business practices and
officials. its overall advocacy positions.
Ericsson is a member of several organizations that provide policy recom- Any new or existing memberships due for renewal are subject to specific
mendations and advice to public officials. The Company is mainly involved compliance review requirements and conditions. The same general principles,
in organizations with a direct focus on Ericsson’s business within electronics as described above, apply when any employee participates in advocacy activi-
manufacturing and telecommunications, but also in organizations with a ties under the umbrella of any one of these associations.
generic industrial and business focus.
Ericsson does not make any direct or indirect contributions to political par- Climate policy alignment
ties or individuals running for political office, or in relation to ballot measures The Company’s memberships and involvement in multilateral industry organi-
or political referendums of any kind, as stipulated by the Company’s Code of zations also cover climate-related advocacy efforts. It is central to Ericsson to
Business Ethics. Exempt from this policy is support of voluntary employee only engage in partnerships that share the Company’s position on a science-
contributions permitted under local law and supported by public reporting based climate perspective, not conflicting with the Paris Agreement, and
regulations. partnerships are evaluated on a case-by-case basis.
Note G5, cont’d.

Significant policy topics Memberships
Below is a summary of the most significant topics on which Ericsson is engag- Ericsson is a member of several international, national and local organizations,
ing with industry and policy makers, and the Company’s position on those which to varying degrees advocate and/or exercise influence over public policy
topics. development. Below are the most significant memberships maintained on a
Group level. Memberships maintained by subsidiaries and local entities are not
Topic Position included, which is why the list should not be considered exhaustive.
Data and artificial The Company’s ability to innovate by using data and trans-
intelligence ferring data across borders is crucial. Artificial intelligence is a
necessity for 5G capabilities and Ericsson is committed to Industry and trade organizations
building trustworthiness into the systems by design. – African Telecommunications Union
Digital inclusion Ericsson advocates universal internet coverage and digital – American Chamber of Commerce
inclusion, such as affordability and digital literacy efforts. The – Asia-Pacific Telecommunity (APT)
focus is on low-income countries and countries with low – Association of Swedish Engineering Industries (Teknikföretagen)
internet penetration. This is done through organizations such
as The Broadband Commission for Sustainable Development – Digital Europe
and the International Telecommunication Union. – European Forum for Manufacturing
Environment and Ericsson contributes to consultations and hearings on strate- – European Internet Forum
climate change gies and legislative proposals in the area of environment and – European Telecommunications Network Operators’ Association (ETNO)
climate. The Company’s approach is to advocate clear
environmental legal requirements that are effective, based – Global System for Mobile Communications Association (GSMA)
on science and that promote the environmental performance – Hong Kong Chamber of Commerce in Sweden
of the sector. Ericsson is also advocating for the benefits of – International Chamber of Commerce
digitaliza-tion and 5G in the transition to a Net Zero future. – International Council of Swedish Industry (NIR)
Human rights Ericsson is engaged in consultations for legislative proposals – Stockholm Chamber of Commerce
and policy developments, and it supports legislation in line
with international human rights standards that ensure – Sweden – China Trade Council
companies across value chains are covered by the same – Sweden – Finnish Chamber of Commerce
responsibilities, in particular in relation to the right to freedom – Sweden – German Chamber of Commerce
of expression and privacy.
– Sweden – India Business Council, Round Table
Industrial policy Ericsson advocates a new EU industrial policy, where 5G is
– Sweden – Saudi Business Council
recognized as a requirement for Europe’s digital transforma-
tion by prioritizing a build-out of national 5G coverage, and a – Sweden Eurasia Chamber of Commerce
regulatory environment that recognizes the B2B aspect of – Sweden’s General Association for Trade
connectivity for industries. – Sweden-Bangladesh Business Council
Actors who contribute to the creation of the standards should
be reasonably compensated for their R&D investments – Swedish – Thai Chamber of Commerce
through standard essential patent licensing, while at the – Swedish International Chamber of Commerce (ICC)
same time access is provided to standardized technology. – Swedish South African Chamber of Commerce
Network regulation Ericsson has consistently supported a framework for net – Tech Sweden
neutrality that gives people access to the content, applica-
– The International Institute of Communications (IIC)
tions and services they want, while at the same time promot-
ing continued investments, experi-mentation, differentiation – The Swedish Institute of International Affairs.
and innovation.
Network security Ericsson supports a comprehensive approach to net-work Advocacy organizations
security in mobile telecom networks to ensure that consum- – Business Europe
ers are effectively protected. Such an approach builds on miti-
gating measures that are implemented with consideration to – European Round Table of Industrialists (ERT)
security relevant interdependencies between layers (stand- – World Economic Forum (WEF).
ards, products and related development processes, network
deployments and network operation that define the security
experience), as well as a risk-based approach to mitigation
measures within specific layers.
Spectrum allocation Timely availability of sufficient amounts of harmonized
and deployment licensed spectrum is the most efficient way to use spectrum to
address both public and private sectors. Ericsson engages on
discussions related to availability of spectrum in the short (5G),
medium (5G-Advanced) and long term (6G) and advocates
harmonization of both spectrum allocations and technical
conditions.
Section O – Other – Basis for preparation
O1 Stakeholder engagement and materiality

Ericsson continuously engages with its stakeholders through different channels to understand their expectations, requirements and concerns around current and
emerging environmental, social and governance (ESG) topics. The table below contains highlights of stakeholder engagements taking place over the past year,
and the main topics raised by the different stakeholder groups.
Stakeholder group Examples of ESG-related stakeholder engagements Main topics and concerns raised
Employees – Employee surveys – Business ethics and anti-corruption
– Volunteering and donations campaignes – Health, safety and well-being of workforce, including transition to hybrid working models
– Cultural transformation workshops – Learning and development
– Training and awareness-raising initiatives. – Climate action.
Customers – Individual customer meetings and dialogues – Business ethics and anti-corruption
– Customer ESG assessments – Portfolio sustainability, including energy performance and cir-cularity
– Joint research and development. – Product security and quality features
– Role of industry and digitalization in society
– Industry-wide supply chain requirements.
Shareholders – Investor dialogues and Capital Markets Day – Business ethics and anti-corruption
– Analyst inquiries and meetings – Corporate governance
– ESG ratings and rankings. – Portfolio sustainability
– Transparent and comparable ESG reporting.
Society
Suppliers – Responsible Business Alliance – Business ethics and anti-corruption
– 1.5 C Supply Chain Leaders – Health, safety and well-being of workforce
– Supplier assessments and audits – Labor rights and working conditions
– Supplier training, seminars and workshops. – Environmental and climate requirements
– Conflict minerals and material traceability.
Regulators and – Policy advocacy toward regulators – Environmental and human rights impacts of ICT sector
international – Partnerships with: – Digital inclusion and connectivity
institutions UNICEF/UNHCR/UN World Food Programme – Digital education
UN B-tech Project – Humanitarian relief efforts
World Health Organization – Radio waves and health.
ITU/UNESCO Broadband Commission for Sustainable Development.
Academia and – Joint research and research funding – Environmental impacts of ICT sector
business – Development of technology curriculum – Enablement effect of ICT in mitigating climate change
– Participation in standardization bodies – Radio waves and health.
– Membership of industry associations
– European CEO Alliance.
Civil society, NGOs Participation in/partnerships with: – Collective climate action
and other – COP27 – Protection of right to privacy and freedom of expression
– World-Wide Fund for Nature – Digital inclusion and education.
– Exponential Roadmap Initiative
– Global Network Initiative.
Materiality analysis
Ericsson has been assessing its business' impacts on people and the environ- of the materiality analysis as part of their review and approval of the
ment for many years. Much of this work has been done through peer-reviewed Sustainability and Corporate Responsibility report as a whole.
research, particularly on products' environmental impacts through life-cycle Ericsson acknowledges the increasing expectations on companies to
analyses. In addition, Ericsson conducts due diligence on human rights to conduct due diligence and the factors to consider when identifying material
identify salient human rights relevant to its business. Non-financial factors, environmental, social and economic impacts, risks and opportunities. Ericsson
such as security and privacy, and people matters are also integrated into the plans to develop its process for identifying material ESG topics in the coming
Company’s Enterprise Risk Management Framework. Topic-specific impacts, years to further inform its strategies, as well as define the scope of its external
risks and opportunities are described in connection to each specific topic on disclosures, in alignment with emerging regulation.
pages 11 to 39 in this report. Materiality as referred to in the Sustainability and Corporate Responsibility
These inputs form the foundation for Ericsson’s materiality analysis. report refers to the level of direct and indirect impact Ericsson, through its
Informing the analysis are also stakeholder engagements and dialogues as operations and its value chain, has or may have on the environment, people
described above, as well as external benchmarks. and society. This definition of materiality is different from, and should not be
The matrix on the next page summarizes the outcome of the materiality interpreted as, the definition of materiality used in the context of mainstream
analysis. The Board of Directors and Executive team reviews the outcome and regulatory financial reporting.
Note O1, cont’d.
Assess and engage Address and engage A Business ethics and anti-corruption
B Climate action – portfolio energy performance
High
C Human capital 1)
A B D Health, safety and well-being
E Security and privacy
C D E
F Radio waves and health
G Climate action – own activities
Relevance to stakeholders
H Human rights
I Resource circularity
J Responsible management of suppliers
G H K Digital inclusion
Medium
F K L Biodiversity
I J M Non-GHG emissions to air
N Water 2)
O Waste 3)
P Corporate citizenship
1) Human capital covers several people-related aspects

L M N O P such as talent attraction and retention, diversity and
inclusion and learning and development.
2) Water in this context refers to process and sanitary
water use at Ericsson’s own facilities.
Assess Address 3) Waste in this context refers to waste generated in
Low
Ericsson’s day-to-day operations. Waste in the form

of end-of-life products is included under the topic
Low Medium High “Resource circularity”.
Impact
Topics considered significant and covered in this report Topics not considered significant and therefore not covered in this report
O2 Reporting principles, scope and external assurance

This Sustainability and Corporate Responsibility report ("the report"), published a target key performance indicator is assessed as significant. In other cases,
on March 7, 2023, constitutes Ericsson’s annual statutory sustainability report baselines or data pertaining to previous reporting periods are not restated.
and contains information about impacts, risks and opportunities, governance Information on restatements made in the reporting year can be found in note
and policies, management approaches, targets and performance metrics O3 on page 42.
relevant to material environmental, social and corporate governance (ESG) In 2022 Ericsson acquired Vonage, now part of Businness Area Global
related aspects of the Company and its value chain. A description of Ericsson’s Communications Platform and in 2020, Cradlepoint, now part of Business Area
business model can be found on pages, 1 and 5–11, and a description of finan- Enterprise Wireless Solutions. For a number of disclosures, primarily people-
cial and non-financial risk factors on pages 108–122 of the Financial Report, related, these entities have not yet been fully consolidated into the Group's ESG
which is also part of Ericsson’s Annual Report. reporting. At year end 2022, these entities had a headcount of about 2,300 and
1,300 employees respectivly, equal to 3.4% of the Group's total headcount.
Reporting principles and frameworks Where the scope of a disclosure point excludes one or both of these entities,
The report has been prepared in accordance with the Global Reporting this is indicated in a footnote.
Initiative (GRI) Standards. Ericsson has in the preparation of the report This report contains disclosures related to the Company’s up- and down-
applied reporting principles as prescribed in the standard GRI 1: Foundation stream value chain including suppliers, vendors, customers and other business
(2021). The report has also been prepared in accordance with the UN Guiding partners. There are inherent uncertainties to the completeness, accuracy and
Principles on Business and Human Rights reporting framework. verifiability of this information as it relates to performance and activities which
In addition, the report includes climate-related disclosures included in the are beyond the Company’s direct influence and oversight.
recommendations of the Taskforce on Climate related Financial Disclosures
(TCFD) as well as relevant disclosures in applicable Sustainability Accounting External assurance
Standards Board (SASB) standards. Ericsson is also reporting on the core The report has been subject to assurance procedures by the Company’s statu-
disclosures of the Stakeholder Capitalism Metrics developed and endorsed by tory auditors in accordance with the assurance standard ISAE 3000. The report
the International Business Council and the World Economic Forum. as a whole has been subject to limited assurance procedures. Additionally,
As a supplement to the report, an ESG reporting reference index is published information on greenhouse gas emissions in Scope 1, 2 and Scope 3 categories
on the ESG section of the Investor Relations pages on Ericsson’s website. Business Travel and Downstream Transportation, presented in note E2, as well
The index contains detailed references to applied reporting frameworks and as information on the share of women per employee category, presented in
standards and includes the GRI content index. note S1, have been subject to reasonable assurance procedures. The assurance
statement can be found on page 43.
Scope and boundaries
Unless otherwise stated, the information and data provided pertain to the Related reporting and disclosures
period January 1 to December 31. The report covers the Ericsson Group, that Ericsson publishes other ESG-related statements and reports on its website,
is the parent company Telefonaktiebolaget LM Ericsson and its subsidiaries such as the annual CDP Climate Change questionnaire response, a Modern
as presented in note P8 to the parent company’s financial statements in the Slavery and Human Trafficking Statement, and a Conflict Minerals Report.
Financial Report. The report does not include environmental and social data
related to associated companies or joint ventures. These constitute a limited Contact information
share of the Group’s headcount and operations. Inquiries related to this report can be made to:
As a general principle, baselines for Group ESG targets are recalculated corporate.responsibility@ericsson.com
when the effect of a merger, acquisition or divestment on the performance of
O3 Restatements of information
– The following information in note E2 has been restated:

– Emissions in scope 3 category Business travel has been restated as
Ericsson has refined its methodology for estimating these emissions.
Figures reported for 2021 and 2020 have been restated from 12 and 17 to
9 and 14 thousand tonnes of CO2e respectively to make them comparable
to data reported for 2022
– Emissions in scope 3 category Employee commuting has been restated
as Ericsson has refined its methodology for estimating these emissions.
Figures reported for 2021 and 2020 have been restated from 23 and 30 to
27 and 37 thousand tonnes of CO2e respectively to make them compara-
ble to data reported for 2022
– Emissions in scope 3 category Use of sold products and services has
been restated as Ericsson has refined its methodology for estimating
these emissions in 2022. Figures reported for 2021 and 2020 have been
restated from 32 and 34 to 25 and 27 million tonnes of CO2e respectively
to make them comparable to data reported for 2022. The resulting reduc-
tion in emissions is due to a combination of using more granular methods
for estimating sold products’ energy consumption, updated average grid
emission factors, and consideration of individual customers’ purchases
of renewable energy, where such data is available. Consequently, related
information in note E2 on the share of the value carbon footprint and
emissions intensity broken down per scope has also been restated
– Information in note E3 on product take-back volumes has been restated as
Ericsson has redefined the scope of this disclosure. Previously this included
all products received through the take-back program, regardless of if they
had been put on the market or not. From 2022 and onwards the scope
is limited to the weight of products taken back from customers, and not
from internal sources, such as redundant stock. Total weights reported for
2021 and 2020 have been restated from 8,850 and 10,203 to 5,389 and
6,079 tonnes respectively, as has data broken down by disposal method, to
make figures comparable to those reported for 2022
– Information in note S2 on employee to CEO total compensation ratio
reported for 2021 has been restated from 97 to 98. This is due to Cradlepoint
employees being excluded from the restated 2021 figures because of limita-
tions in accessing comparable data for total compensation.
Sustainability and Corporate Responsibility report 2022 Assurance report 43
Assurance report
Auditor’s Assurance Report on Ericsson’s Sustainability and Corporate Responsibility Report and statement regarding
the Statutory Sustainability Report
To Telefonaktiebolaget LM Ericsson, corporate identity number responsible for the preparation of the Sustainability Report, and apply-
556016-0680 ing analytical and other limited assurance procedures. Our examination
regarding the Statutory Sustainability Report has been conducted in
Introduction accordance with FAR’s accounting standard RevR 12 The auditor’s
We have been engaged by the Board of Directors and Executive opinion regarding the Statutory Sustainability Report. A limited assur-
Management of Telefonaktiebolaget LM Ericsson (“Ericsson”) to ance engagement and an examination according to RevR 12 is different
undertake an assurance engagement of the Ericsson Sustainability and and substantially less in scope than an audit conducted in accordance
Corporate Responsibility Report (“the Sustainability Report”) for the with International Standards on Auditing and generally accepted audit-
year 2022. The Company has defined the scope of the Sustainability ing standards in Sweden.
Report on page 41 in the Sustainability Report, which also constitutes The firm applies International Standard on Quality Management 1,
the Statutory Sustainability Report. which requires the firm to design, implement and operate a system of
quality management including policies or procedures regarding compli-
Responsibilities of the Board of Directors and the Executive ance with ethical requirements, professional standards and applicable
Management legal and regulatory requirements. We are independent of Ericsson in
The Board of Directors and the Executive Management are responsible accordance with professional ethics for accountants in Sweden and
for the preparation of the Sustainability Report including the Statutory have otherwise fulfilled our ethical responsibilities in accordance with
Sustainability Report in accordance with the applicable criteria and the these requirements.
Annual Accounts Act respectively. The criteria are defined on page 41 in The limited assurance procedures performed and the examination
the Sustainability Report, and are part of the Sustainability Reporting according to RevR 12 do not enable us to obtain assurance that we
Standards published by GRI (Global Reporting Initiative), which are would become aware of all significant matters that might be identified
applicable to the Sustainability Report, as well as the accounting and in an audit. The conclusion based on a limited assurance engagement
calculation principles that the Company has developed. This responsi- and an examination according to RevR 12 does not provide the same
bility also includes the internal control relevant to the preparation of a level of assurance as a conclusion based on an audit. Since this engage-
Sustainability Report that is free from material misstatements, whether ment is combined, our conclusions regarding the limited assurance, the
due to fraud or error. reasonable assurance, and the examination according to RevR 12 will
be presented separately below.
Responsibilities of the auditor Our procedures are based on the criteria defined by the Board of
Our responsibility is to express a conclusion on the Sustainability Report Directors and the Executive Management as described above. We
based on the assurance procedures we have performed and to express consider these criteria suitable for the preparation of the Sustainability
an opinion regarding the Statutory Sustainability Report. Our engage- Report.
ment is limited to historical information presented and does therefore We believe that the evidence we have obtained is sufficient and
not cover future-oriented information. appropriate to provide a basis for our conclusion below.
We conducted our engagement in accordance with ISAE 3000
(revised) Assurance Engagements Other than Audits or Reviews of Conclusion
Historical Financial Information. The engagement includes limited Based on the limited assurance procedures we have performed,
assurance on the complete Sustainability Report, and an audit of nothing has come to our attention that causes us to believe that the
selected information consisting of GHG emissions in Scope 1, 2, and Sustainability Report, is not prepared, in all material respects, in accord-
Scope 3 categories Business travel and Downstream transportation ance with the criteria defined by the Board of Directors and Executive
disclosed on page 15, as well as information on the share of women per Management.
employee category, disclosed on page 22 in the Sustainability Report. In our opinion, the selected information in the Sustainability Report
The objective of an audit is to obtain reasonable assurance that the which has been subject to our reasonable assurance procedures has,
information is free of material misstatements. A reasonable assurance in all material respects, been prepared in accordance with the criteria
engagement includes examining, on a test basis, evidence supporting defined by the Board of Directors and Executive Management
the selected information in the Sustainability Report. A limited assur- A Statutory Sustainability Report has been prepared.
ance engagement consists of making inquiries, primarily of persons
Stockholm 7 March 2023

Deloitte AB
Thomas Strömberg Lennart Nordqvist

Authorized Public Accountant Expert Member of FAR
44 Glossary Sustainability and Corporate Responsibility report 2022
Glossary
2G GSM Scope 3
Second generation of mobile systems (the first digital Global System for Mobile Communications. Second Other indirect GHG emissions which are a consequence of
generation). Includes GSM, TDMA, PDC and cdmaOne. generation mobile system. the activities of the company but are derived from sources
not owned or controlled by the company. These include
3G ICT emissions occurring in the supply chain as well those
Third generation mobile systems. Includes Information and Communication Technology. occurring when customers use a company’s products
WCDMA/HSPA, CDMA2000 and TD-SCDMA.
IoT and services.
4G Internet of things, interconnection of computing things SDGs
Fourth generation mobile systems, also known as LTE. enabling them to send and receive data. Sustainable Development Goals. The 2030 Agenda for
5G ITU Sustainable Development, adopted by all United Nations
The fifth generation of mobile systems. An evolution International Telecommunication Union. Member States in 2015, provides a shared blueprint for
of 4G/LTE. peace and prosperity for people and the planet, now
LCA and into the future. At its heart are the 17 Sustainable
ABC Life-Cycle Assessment. An approach for calculating the Development Goals (SDGs), which are an urgent call for
Anti-bribery and corruption. environmental impact of a product or service across action by all countries – developed and developing – in a
all its lifecycle phases, ranging from extraction of raw global partnership.
AI materials and manufacturing to usage and end-of-life
Artificial intelligence. The ability of a machine to perform management. TCFD
a task commonly associated with intelligent beings. Task force on Climate related Financial Disclosures.
LTE
API Long-Term Evolution. 4G; the evolutionary step of mobile The Paris Agreement
Application programming interface. A software intermedi- technology beyond 3G HSPA, allowing data rate above A legally binding international treaty on climate change,
ary for two or more computer programs to communicate 100 Mbps. adopted by 196 Parties at the UN Climate Change
with each other. Conference (COP21) in Paris 2015. The Paris Agreement
LWI sets out a global framework to avoid dangerous climate
Cloud native Lost workday incidents. An incident resulting in one or change by limiting global warming to well below 2 C and
Software approach of building, deploying, and managing more lost workdays.
modern applications in cloud computing environments. pursuing efforts to limit it to 1.5 C.
Mobile broadband UNGC
CO2e Wireless high-speed internet access using the HSPA, LTE,
Carbon dioxide equivalents. The amount of a particular United Nations Global Compact. Is a voluntary initiative
CDMA2000EV-DO and 5G technologies. adopted in 2005 by the UN Secretary-General, based on
greenhouse gas, expressed as the amount of carbon
CEO commitments to Implement universal sustainability
dioxide that gives the same greenhouse effect. Net Zero
principles and to take steps to support the UN Sustainable
A state in which no net additions of greenhouse gases are
COVID-19 released into the atmosphere. Organizations can achieve
Development Goals.
The disease caused by the coronavirus (SARS-CoV-2). this primarily by reducing their emissions as well as using UNGP
COVID-19 pandemic certain accepted carbon capture, removal and storage The UN Guiding Principles Reporting Framework was
The global spread of the disease caused by the corona technologies to neutralize any unavoidable remaining launched in February 2015 and is the first comprehensive
virus (SARS-CoV-2). emissions. guidance for companies to report on human rights issues
in line with their responsibility to respect human rights.
Downstream in value chain / Own Activities
This responsibility is set out in the UN Guiding Principles
Downstream emissions Cover GHG emissions in Scope 1, 2, and Scope 3 catego-
on Business and Human Rights, which constitute the
Activities (and related greenhouse gas emissions) ries Business Travel and Employee Commuting.
authoritative global standard in this field.
occurring post manufacturing/productions, primarily SASB
associated with a product or service’s distribution, use UNHCR RETS
Sustainability Accounting Standards Board.
and end-of-life phases. United Nations High Commissioner for Refugees –
SBTi Refugee Emergency Telecommunications Sector. RETS
ESG The Science Based Target initiative, A partnership between is the mechanism through which UNHCR coordinates the
Environment, Social, and Governance. Refers to the three CDP, the United Nations Global Compact, World Resources communications technology response in emergencies.
overarching themes for assessing non-financial factors Institute (WRI) and the World Wide Fund for Nature (WWF)
which can impact a company’s value-creating abilities UNICEF
that defines and promotes best practice in emissions
and enterprise value. United Nations children’s fund, established in 1946, and
reductions and net-zero targets in line with climate science,
responsible for providing humanitarian and developmen-
GHG including providing a second opinion on the ambition level
tal aid to children worldwide.
Greenhouse gases. Naturally occurring and man-made of targets set by corporates and other entities.
gases that trap heat in the atmosphere, contributing to Upstream in value chain /
Scope 1
the greenhouse effect warming the earth. upstream emissions
Direct GHG emissions derived from sources that are
Activities (and related greenhouse gas emissions) occur-
GHG (Greenhouse gas) protocol owned or controlled by an organization, typically through
ring in an organization’s supply chain, including extraction
A global standardized framework for m
easuring, account- combustion of fossil fuels.
of raw materials, manufacturing, assembly and distribu-
ing and managing greenhouse gas emissions. Scope 2 tion of purchased products and components, and other
Global Reporting Initiative (GRI) Standards Indirect GHG emissions derived from the energy acquired services.
The first and most widely adopted global standards for purchased and consumed, but not generated by, an
WEF
sustainability reporting. GRI is an independent inter- organization, typically from acquired electricity, heating
World Economic Forum.
national organization that has pioneered sustainability and cooling.
reporting since 1997. WFP-led ETC
Emergency Telecommunications Cluster led by World
Food Programme (WFP).
The terms “Ericsson”, “the Company”, “the Group”, “us”, “we”, and “our” all refer to Telefonaktiebolaget LM Ericsson and its subsidiaries.
Sustainability and Corporate Responsibility report 2022 More information 45
More information
Information about Ericsson and its development is available on the website:
www.ericsson.com. Annual and interim reports and other r elevant shareholder
information can be found at: www.ericsson.com/investors
Every care has been taken in the translation of this annual report to English.
However, in the event of discrepancies, the Swedish original will supersede
the English translation.
Contact details Contact details for ADR program Ericsson Annual Report 2022
Ericsson headquarters For ADR institutional investors and brokers Project management
Torshamnsgatan 21, Kista Deutsche Bank ADR broker services desk Ericsson Investor Relations
SE-164 83 Stockholm New York: Tel +1 212 250 9100
Sweden London: Tel +44 207 547 6500 Design and production
SAFIR Communication
Registered office For registered ADR Holders
Telefonaktiebolaget LM Ericsson Deutsche Bank Shareholder Services Photos of Board of Directors
Torshamnsgatan 21, Kista American Stock Transfer & Trust Company and Executive Team
SE-164 83 Stockholm Email: DB@amstock.com Glenn Røkeberg
Sweden Toll-free number: +1 800 937 5449
Direct Dial: +1 718 921 8124 Printing
Investor relations Larssons Offset 2023
For questions on the Company, please contact Printed on Amber Graphic
Investor Relations:
Phone: +46 10 719 0000
Email: investor.relations@ericsson.com
For printed publications

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Order a hard copy of the Annual Report – online:
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https://www.ericsson.com/en/investors/financial-reports/order-annual-report
Order a hard copy of the Annual Report – phone: Printed matter

3041 0298
Strömberg Distribution
Phone: +46 8 449 88 16
About Ericsson
We are one of the leading providers of Information and Communications Technology
(ICT). We enable the full value of connectivity by creating game-changing technology
and services that are easy to use, adopt, and scale, making our customers successful
in a fully connected world. Our portfolio spans Networks, Cloud Software and Services,
Enterprise Wireless Solutions, Global Communications Platform, Technologies and
New Businesses, and IPR licensing.
The Company has approximately 105,000 employees, and customers in around

180 countries. Ericsson is headquartered in Stockholm, Sweden. Our shares are
listed on Nasdaq Stockholm and our American Depositary Shares (ADS) are listed
on Nasdaq New York. Ericsson’s vision is a world where limitless connectivity
improves lives, redefines business and pioneers a sustainable future.
Telefonaktiebolaget LM Ericsson
SE-164 83 Stockholm, Sweden
Telephone +46 10 719 00 00 EN/LZT 138 2360 R1A
www.ericsson.com © Telefonaktiebolaget LM Ericsson 2023

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Ericsson

Financial report Corporate Governance report

CEO comment 2 Regulation and compliance 2

Remuneration report Sustainability and Corporate Responsibility report

Ericsson Annual Report 2022

Annual Report 2022

Financial Corporate Remuneration Sustainability

Financial report 2022

Business strategy – Creating long-term value 5

Letter from the Chair of the Board 12

Board of Director’s report 14

Consolidated financial statements 34

Notes to the consolidated financial statements 41

Parent Company financial statements 89

Notes to the Parent Company financial statements 95

Risk factors 108

Auditor’s report 123

Forward-looking statements 128

Five-year summary – Financial information 129

Five-year summary – Non-financial information 130

Alternative performance measures 131

The Ericsson share 136

Shareholder information 140

Financial terminology 141

Ericsson’s vision is a world where limitless connectivity improves lives,

A platform for growth

Ericsson is at the epicenter of a powerful trend

1) Excluding restructuring charges.

including but not limited to the hiring of a new

Creating long-term value

Profitable growth based on technology leadership

A purpose driven organization

Ericsson business strategy

Leadership in mobile networks Focused expansion into enterprise

Be first in critical innovations, and capture strategic business opportunities

Leadership in mobile networks

Focused expansion into enterprise

Be first in critical innovations and capture strategic business opportunities

Corporate responsibility and business integrity

Networks Offering Business model

Cloud Software Offering Business model

Enterprise Offering Business model

Other Offering Business model

Mobile Networks go-to-market Enterprise go-to-market IPR licensing revenues

Letter from the Chair of the Board

Board of Director’s report

Contents 2022 highlights

Gross cash ing charges. The number of R&D resources

Sales split per segment Business results – Segments

Networks Cloud Software and Services

Net sales Net sales

Sales split per market area Business results – Market areas

North America South East Asia, Oceania and India

Middle East and Africa Other

Reported sales per market area – 2022 compared with 2021

Sales adjusted for –11% –1% +7% +4% N/A +5%

Element and purpose Description

Fixed salary Salaries shall be set taking into account:

Element and purpose Operation Opportunity Performance measures

Element and purpose Operation Opportunity Performance measures

Gross cash ing charges. The number of R&D resources