Ericsson FIRST QUARTER report

April 25, 2012

Q112 includes a gain from the divestment of Sony Ericsson of SEK 7.7 b.

COMMENTS FROM HANS VESTBERG, PRESIDENT AND CEO

“Sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker,” says Hans Vestberg, President and CEO of Ericsson (NASDAQ:ERIC). “CDMA continued its expected decline in the transition to LTE. Our services business showed continued momentum where especially Professional Services developed favorably. Support Solutions (former Multimedia) increased organic sales.

NET SALES, SEK b.

OPERATING INCOME INCL. JVs, SEK b.

NET INCOME, SEK b.

CASH FLOW FROM OPERATIONS, SEK b.

In the quarter, we took important steps in our strategy execution. The announced acquisition of BelAir adds WiFi capabilities to our hetnet portfolio and by acquiring Technicolor’s Broadcast Services Division we have strengthened our position in media and broadcasting services, targeting a leadership position in Europe. With the completed divestment of Sony Ericsson, we have left the consumer part of the handset business in order to focus on enabling connectivity for all devices, handsets and beyond. Last year, we gained market share in our core businesses and continued to build a strong LTE position where we have more than 60% market share.

Late 2010, we took a strategic decision to increase our market share in Europe when operators started to modernize their networks and replacing old infrastructure with new multi-standard radio base stations. This, together with the business mix with more coverage than capacity projects, has, as expected, had a negative impact on gross margin YoY and is expected to prevail short-term.

Our joint venture ST-Ericsson has launched a revised strategy and actions to reduce its break-even point. We remain confident that ST-Ericsson has a strategic position in the industry to enable the device ecosystem,” concludes Vestberg.

Financial Highlights

INCOME STATEMENT AND CASH FLOW

Sales in the quarter were down -4% YoY and -20% QoQ. Sales for comparable units, adjusted for FX and hedging, decreased -6% YoY. Telcordia’s sales were SEK 0.9 b. in the quarter. Revenue from Telcordia is split 50/50 between segments Global Services and Support Solutions. Q111 was positively impacted by a one-off revenue from the sale of patents of SEK 0.3 b.

Networks declined compared to Q111, impacted by continued business trends from H211 as well as a major decrease in CDMA sales. Global Services continued to show good momentum with a growth of 18% YoY, with especially good development in Professional Services. Global Services represented 40% (33%) of total sales in the quarter.

Restructuring charges amounted to SEK 0.6 (0.4) b. As previously communicated, restructuring charges are estimated to approximately SEK 4 b. for the FY12. Activities for increased efficiency are ongoing and expected to be executed evenly during the course of the year.

Gross margin was down YoY to 33.3% (38.5%), and up from 30.2% QoQ. The YoY decrease is due to increased services share, network modernization projects in Europe and a higher proportion of coverage projects. The QoQ improvement is due to seasonality, positive effects from mobile broadband capacity investments and lower Global Services share. The underlying business mix, with a higher share of coverage than capacity projects, including the European network modernization projects, was unchanged and is expected to prevail short-term.

Gradually in 2011, gross margin was negatively impacted by the strategic decision to increase market share in Europe and fully impacted Q411. Average project duration is expected to be 18-24 months.

DAYS SALES OUTSTANDING

INVENTORY DAYS

PAYABLE DAYS

Total operating expenses, including impact from the consolidation of Telcordia, amounted to SEK 14.2 (14.4) b. R&D expenses amounted to SEK 8.0 (8.0) b. and declined QoQ from SEK 8.7 b. Selling and general administrative expenses (SG&A) amounted to SEK 6.2 (6.4) b., representing 12% of sales, same as in Q111. SG&A declined QoQ from SEK 6.8 b.

Other operating income and expenses includes a gain of SEK 7.7 b. related to the divestment of Sony Ericsson.

Operating income, excluding JVs and gain from Sony Ericsson divestment, decreased to SEK 2.8 (6.3) b. due to lower Networks sales and lower gross margin. Operating margin was 5.5% excluding the gain from the divestment of Sony Ericsson and loss in ST-Ericsson.

Ericsson’s share in ST-Ericsson’s income before tax was SEK -1.4 (-0.6) b.

Financial net amounted to SEK 0.0 (0.0) b and increased QoQ from SEK -0.3 b.

Net income improved to SEK 8.8 (4.1) b., due to the gain from divestment of Sony Ericsson.

EPS diluted was SEK 2.76 (1.27). EPS Non-IFRS, excluding the Sony Ericsson gain, was SEK 0.77 (1.61).

Cash flow from operations amounted to SEK 0.7 (-2.9) b., impacted by more projects. Cash conversion was 17% due to project mix and decreases in accounts payable. During the quarter, the Company made an employee contribution to pension trusts of SEK 1.0 b. Cash outlays for restructuring amounted to SEK 0.4 (0.8) b. Cash outlays of SEK 1.2 b. remain to be made.

BALANCE SHEET AND OTHER PERFORMANCE INDICATORS

Trade receivables decreased QoQ to SEK 60.7 (64.5) b. Days sales outstanding (DSO) increased from 91 to 104 days QoQ due to the seasonally lower volumes.

Inventory decreased QoQ by SEK 0.5 b. to SEK 32.5 (33.1) b. Inventory turnover days increased from 78 to 88 days reflecting the higher share of projects. YoY, ITO increased slightly by one day.

Focus remains on improving working capital levels to reach the cash conversion target of 70%.

Goodwill increased SEK 3.8 b. to SEK 31.2 (27.4) b. due to acquisitions.

Cash, cash equivalents and short-term investments amounted to SEK 75.6 (80.5) b. The net cash position decreased QoQ by SEK -2.4 b. to SEK 37.1 (39.5) b. The net effect on cash from divestment of Sony Ericsson, acquisitions of Telcordia and BelAir as well as increased share of LG-Ericsson was SEK -1.7 b.

During the quarter, approximately SEK 1.0 b. of provisions was utilized, of which SEK 0.4 b. related to restructuring. Additions of SEK 1.0 b. were made, of which SEK 0.3 b. related to restructuring. Reversals of SEK 0.4 b. were made.

Total number of employees at the end of the quarter increased to 108,551 (104,525). The total net addition is mainly related to the consolidation of Telcordia and expansion in the global service center in India.

SEGMENT SALES, SEK b.

NETWORKS QUARTERLY SALES, SEK b.

EBITA MARGIN, PERCENT

Segment Results

NETWORKS

Organic and FX adjusted sales growth was -18% YoY. In the quarter, business trends from H211 prevailed with cautious operator spending in regions with macro-economic or political uncertainty. QoQ sales were also impacted by seasonality. Sales in CDMA continued to decline and decreased -40% YoY. Demand for HSPA and LTE was good in the quarter, following the increased focus on network performance, especially in North America. India was still impacted by the uncertain regulatory environment and declined YoY and Russia continued its slower development from H211.

In the quarter, the 50^th contract for Evolved Packet Core was signed. The Antenna Integrated radio, which is part of the RBS6000 family, is now ready for volume deployment. The number of people covered by commercial LTE networks from Ericsson is 215 million. In total, 325 million people are covered by LTE. The introduction of LTE also drives operators’ interest for investments in core and IMS. The IP application router SSR 8020 is now in commercial operation.

Operating margin was negatively impacted YoY by the underlying business mix with more coverage than capacity projects and the European network modernization projects as well as lower volumes. Profitability was negatively impacted QoQ by lower volumes, however, this was partly offset by mobile broadband capacity investments. This underlying business mix, with higher share of coverage and network modernization projects than capacity projects, is expected to prevail short-term. The impact on profitability from the network modernization projects in Europe is a result of the strategic decision in 2010 to increase market share in Europe. Efficiency activities are ongoing to mitigate these effects.

GLOBAL SERVICES QUARTERLY SALES, SEK b.

EBITA MARGIN, PERCENT

GLOBAL SERVICES

Global Services continued its good momentum. Organic and FX adjusted sales growth was 14% YoY. The increase was especially good in Professional Services, mainly driven by consulting and systems integration. This growth is due to a number of reasons; the impact from growing data usage on our customers’ business, network and IT environments and increased operator focus on service quality. Operators’ transformation in the voice, IP and OSS/BSS domains in order to reduce OPEX are also driving growth. Also this quarter, Network Rollout sales increased YoY, driven by high volumes of network modernization in Europe and coverage projects in other regions. Managed Services continued its good momentum, reflecting the 23 new contracts signed in Q411.

Global Services operating margin decreased slightly YoY due to increased loss in Network Rollout. Profitability improved in Professional Services YoY, mainly due to continued work with efficiency. Network Rollout continued to be negatively impacted by the network modernization projects in Europe and coverage projects. The margin impact from restructuring charges was 2%-points Q112 for Global Services as well as Professional Services, compared to 1%-point in Q111.

Ericsson now supports networks with more than 2.5 billion subscribers.

SUPPORT SOLUTIONS QUARTERLY SALES, SEK b.

EBITA MARGIN, PERCENT

SUPPORT SOLUTIONS (PREVIOUSLY MULTIMEDIA)

Organic and FX adjusted sales was 12% YoY, driven by good development in TV and multimedia brokering (IPX). The integration of Telcordia is proceeding as planned. Sales from the Telcordia operation are equally split between Support Solutions and Global Services. OSS was flat and BSS had a slow quarter, mainly related to a weaker development in India. Operating margins improved YoY due to increased volumes and cost efficiencies.

Number of subscribers served by our charging and billing solutions were 1.7 billion at end of period.

ST-ERICSSON

ST-Ericsson’s sales decreased substantially as anticipated due to a drop in sales of new products to one of the largest customers, in addition to the usual seasonal effect and continued decline in legacy products. The net debt at the end of the quarter was USD -956 m. Last quarter net debt was USD -798 m. ST-Ericsson is reported in US GAAP and Ericsson’s share in ST-Ericsson’s income before tax, adjusted to IFRS, was SEK -1.4 (-0.6) b. in the quarter. By the end of the quarter, ST-Ericsson had utilized USD 978 m. of a short-term credit facility of USD 1.1 b. granted on a 50/50 basis by the parent companies.

On April 23, 2012, ST-Ericsson announced a new strategic direction with the key components; focused R&D portfolio to deliver world class modems and ModAp systems, partnership signed for application processors, additional measures to accelerate time-to-market and lower break-even point.

Regional Overview

Revenue from the acquired Telcordia business operation, consolidated January 2012, is reported 50/50 between segments Global Services and Support Solutions. In the regional dimension, all of the Telcordia sales is reported in the Support Solution segment except for North America where it is split 50/50 between Global Services and Support Solutions. Multimedia brokering (IPX) was previously reported in each region in segment Support Solution. As of Q112 it is part of region “Other” in segment Support Solutions.

North America. Strong HSPA capacity sales and a continued build-out of 4G/LTE coverage more than offset the major decline in CDMA sales. In 2011, the networks business had a strong H1, while sales for mobile infrastructure equipment slowed down in H2 after the initial period with high spending. Services sales increased YoY driven by market share gains and a high level of project executions. Smartphone penetration is now more than 50% in the US market.

Latin America. The YoY increase was driven by services, both network rollout and system integration in OSS/BSS. Sales in Networks showed some growth YoY due to investments in mobile broadband coverage, but also enhancements in 2G. Support Solutions increased due to consolidation of Telcordia.

Northern Europe and Central Asia. Sales of Networks showed a major decrease YoY mainly due to continued slower investments in Russia. LTE rollouts and network modernization projects continued in the Nordics. Global Services increased YoY, mainly related to new managed services contracts. The QoQ decline in Global Services is due to slower rollouts in Russia.

Western and Central Europe. Networks sales were impacted by cautious operator spending, partly offset by network modernization projects. New managed services business is driving the YoY growth in Global Services.

Mediterranean. Networks sales decreased YoY primarily due to cautious operator spending. Network modernization projects continued to be deployed. Global Services sales showed good development YoY, fueled by managed services contracts in Italy and systems integration in Spain.

Middle East. YoY growth was mainly driven by strong sales in Saudi Arabia while business was slower in Turkey. Political unrest is still impacting the region and operators are cautious with infrastructure investments. Services grew strongly, especially in managed services and systems integration as operators are looking into network performance quality and operational efficiencies.

Sub-Saharan Africa. Mobile penetration continued to grow and compared to other regions, build out of voice services (2G) is still the main driver of infrastructure projects. However, in some markets the deployment of mobile broadband has begun. Sales were down YoY despite growth in Networks.

India. Regulatory uncertainty continued with Supreme Court ruling to revoke 122 2G licenses. In Q111, Networks sales were positively impacted by initial 3G rollouts. Operators have a strong focus on cost competitiveness, which has resulted in high interest in reducing their operating expenses. This has generated a growing managed services business. Strong QoQ growth in Support Solutions due to Telcordia consolidation.

China and North East Asia. The YoY increase is mainly related to continued data traffic growth in the region, especially in Japan and Korea. China had a YoY sales decline, primarily a result of good GSM deployments in H111. The QoQ sales decline is due to seasonality. The product mix is changing towards relatively more LTE coverage deployments in some key markets. The increase in Global Services YoY is mainly due to network rollout activities in China, Japan and Korea.

South East Asia and Oceania. Networks sales were positively impacted YoY by National Broadband Network (NBN) LTE deployment in Australia. In Bangladesh and Thailand, operators are planning for 3G spectrum progresses. Global Services showed good growth YoY, also due to the NBN LTE deployment.

Other. Licensing revenues showed stable development YoY. Also sales of cables, power modules and other businesses are included in “Other”. Multimedia brokering (IPX) was previously reported in each region, but from Q112 it is part of “Other”, under Support Solutions.

Market data

GROWTH RATES ARE BASED ON ERICSSON AND MARKET ESTIMATES

Parent Company Information

Income after financial items was SEK 5.1 (3.1) b. During the quarter, Ericsson completed the divestment of its 50% share in Sony Ericsson. The divestment resulted in a gain of SEK 4.4 b. Other major changes in the Parent Company’s financial position for the quarter include; decreased cash, cash equivalents and short-term investments of SEK 4.2 b., increased current and non-current receivables from subsidiaries of SEK 7.3 b. and decreased current liabilities to subsidiaries of SEK 2.3 b. At the end of the quarter, cash, cash equivalents and short-term investments amounted to SEK 51.9 (56.1) b. By the end of the quarter, ST-Ericsson had utilized USD 489 million of a short-term credit facility.

In accordance with the conditions of the long-term variable compensation program (LTV) for Ericsson employees, 2,367,197 shares from treasury stock were sold or distributed to employees during the first quarter. The holding of treasury stock at March 31, 2012, was 60,479,306 Class B shares.

Other Information

DIVESTMENT OF SONY ERICSSON COMPLETED

On February 16, 2012, Ericsson announced the completion of the divestment of its 50% stake in Sony Ericsson Mobile Communications to Sony. The agreed cash consideration for the transaction is EUR 1.05 billion. The deal includes a broad IP cross-licensing agreement.

ACQUISITION OF BELAIR

On February 21, 2012, Ericsson announced the intention to acquire 100% of North American carrier grade WiFi company BelAir Networks. The company is based in Canada and has approximately 120 employees.

ACQUISITION OF TECHNICOLOR’S BROADCAST SERVICES DIVISION

On March 13, 2012, Ericsson announced the submission of a binding offer to acquire the broadcast services division of Technicolor. The purchase price is EUR 19 million and a potential earn-out based on 2015 revenues of the broadcast services activity of up to EUR 9 million. The acquisition brings about 900 skilled employees and playout operations in France, UK and in the Netherlands. The closing of the acquisition is subject to relevant customary regulatory administrative approvals and consultations.

INCREASED OWNERSHIP IN LG-ERICSSON

On March 22, 2012, Ericsson announced it has acquired additional shares in LG-Ericsson and now holds 75% of the total shares. Before the purchase, Ericsson held 50% of the shares plus one share. LG-Ericsson is a joint venture between LG Electronics and Ericsson. LG-Ericsson is headquartered in Seoul, Republic of Korea. The joint venture is fully consolidated by Ericsson, since Ericsson acquired Nortel’s part of the company in July 2010.

ASSESSMENT OF RISK ENVIRONMENT

Ericsson’s operational and financial risk factors and uncertainties along with our strategies and tactics to mitigate risk exposures or limit unfavorable outcomes are described in our Annual Report 2011. Compared to the risks described in the Annual Report 2011, no material, new or changed risk factors or uncertainties have been identified in the quarter.

Risk factors and uncertainties in focus during the forthcoming nine-month period for the Parent Company and the Ericsson Group include:

Ericsson conducts business in certain countries which are subject to trade restrictions or which are focused on by certain investors. We stringently follow all relevant regulations and trade embargos applicable to us in our dealings with customers operating in such countries. Moreover, Ericsson operates globally in accordance with Group level policies and directives for business ethics and conduct. In no way should our business activities in these countries be construed as supporting a particular political agenda or regime. Stockholm, April 25, 2012

Telefonaktiebolaget LM Ericsson (publ)

Hans Vestberg, President and CEO

Date for next report: July 18, 2012

Auditors’ Review Report

We have reviewed this report for the period January 1, 2012, to March 31, 2012, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this financial information based on our review.

We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, April 25, 2012

PricewaterhouseCoopers AB

Editor’s Note

To read the complete report with tables, please go to: www.ericsson.com/res/investors/docs/q-reports/2012/3month12-en.pdf

Ericsson invites media, investors and analysts to a press conference at the Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), April 25, 2012. An analysts, investors and media conference call will begin at 14.00 (CET).

Live webcast of the press conference and conference call as well as supporting slides will be available at www.ericsson.com/press and www.ericsson.com/investors

Video material will be published during the day on www.ericsson.com/broadcast_room

For Further Information, Please Contact

Helena Norrman, Senior Vice President, Communications

Phone: +46 10 719 3472

E-mail: investor.relations@ericsson.com or media.relations@ericsson.com

Safe Harbor Statement of Ericsson under the US Private Securities Litigation Reform Act of 1995;

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans to launch new products and services; (xiii) assessments of risks; (xiv) integration of acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements of intellectual property rights of others.

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Financial Statements and Additional Information