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Ericsson aims for margin jump beyond 2022 as it sets new targets

·1-min read
FILE PHOTO: The Ericsson logo is seen at the Ericsson's headquarters in Stockholm
FILE PHOTO: The Ericsson logo is seen at the Ericsson's headquarters in Stockholm

STOCKHOLM (Reuters) - Sweden's Ericsson <ERICb.ST> is targeting an operating margin excluding restructuring charges of between 15% and 18% beyond 2022, it said ahead of Tuesday's capital markets day.

"Growth as well as gross margin improvements, driven by software sales and operational leverage, will be the cornerstones in reaching the long-term targets," the telecoms gear maker said in a statement https://www.ericsson.com/en/press-releases/2020/11/ericsson-capital-markets-day-2020.

The company, which maintained its 2022 operating margin of 12-14%, excluding charges, boosted its margin forecast from its networks business as telecom operators across the world upgrade to next-generation 5G technology.

The 2022 operating margin target for Networks was raised to 16-18% from 15-17%. On the flip side, it reduced its margin target for its digital services business to 4-7% from 10-12% in 2022.

(Reporting by Supantha Mukherjee; additional reporting by Helena Soderpalm; editing by Niklas Pollard)