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As previously revealed by Ericsson (NASDAQ: ERIC) in its Q4 2020 financial report and in its 2020 annual report, there is a risk that the decision of the Post and Telecommunications Authority (PTS) to exclude products from Chinese suppliers from the 5G auction in Sweden could have a negative impact on the economic interests of Sweden and Swedish industry, including those of Ericsson.
This risk has been included in the risk factors in Ericsson’s EMTN prospectus. The update coincides with the issue proposed by Ericsson under the EMTN program and the change in the risk factor as noted in the Q4 report is reflected in the in italic text below.
Updated excerpt from the text of the Q4 report
Persistent geopolitical and business uncertainty related to a range of factors may have a material adverse effect on our business, operations, business prospects and, consequently, on our results of operations, financial conditions and our ability to achieve our Goals.
[…]
There are uncertainties over future bilateral trade relations between China and several countries due to restrictions placed on Chinese suppliers in domestic 5G networks.
[…]
In Sweden, the Post and Telecommunications Authority (PTS) has taken the decision to exclude products from Chinese sellers from the 5G auction. In this context, trade relations between Sweden and China are of particular importance to Ericsson, because Ericsson, although a global company with a presence in all world markets, is headquartered in Sweden and therefore risks collateral damage from a weakened Swede. Chinese relationship as a result of this decision. There is a risk that the above will lead to measures taken by China that target the economic interests of Sweden and Swedish industry, including those of Ericsson. Although Ericsson is invited to various ongoing tendering processes in China, the final outcome remains uncertain and the company currently believes there has been an increased risk that Ericsson will be awarded a share of these tenders in these tenders. market significantly lower than its current market share.
[…]
The geopolitical situation can have consequences for the entire industry, with an increased likelihood of further industry splitting, separation of global value chains and separation of global standards for mobile telecommunications. This global development has also led several countries to assess how to ensure uninterrupted access to the infrastructure of the telecommunication network, for example by promoting the disaggregation of the radio access network and by supporting the champions of the national communication network infrastructure. as an alternative to established global suppliers such as Ericsson, although the timing and extent of this situation remains uncertain.
All of the above may have a significant and potentially lasting negative impact on our business, including sales, market share, market access and supply chain and R&D activities, our financial condition and results. operating. “
Please also refer to the 2020 Annual Report for risk factors and uncertainties relevant to Ericsson and its business.
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About Ericsson
Ericsson empowers communications service providers to capture the full value of connectivity. The company’s portfolio spans networks, digital services, managed services and emerging businesses and is designed to help our clients go digital, increase efficiency and find new revenue streams. Ericsson’s investments in innovation have brought the benefits of telephony and mobile broadband to billions of people around the world. Ericsson shares are listed on Nasdaq Stockholm and Nasdaq New York. www.ericsson.com
Forward-looking statements
This press release includes forward-looking statements, including statements reflecting the current views of management regarding market growth, future market conditions, future events, financial condition, and expected operational and financial performance, including the following:
– Our objectives, strategies, planning assumptions and operational or financial performance expectations
– Industry trends, future characteristics and evolution of the markets in which we operate
– Our future liquidity, capital resources, capital expenditures, cost savings and profitability
– The expected demand for our existing and new products and services as well as plans to launch new products and services, including research and development expenses
– The ability to realize future plans and realize the potential for future growth
– The expected operational or financial performance of strategic cooperation activities and joint ventures
– The time until the acquired entities and companies are integrated and accretive of income
– Technology and industry trends, including the regulatory and standardization environment in which we operate, the competition and our customer structure.
The words “believe”, “expect”, “foresee”, “anticipate”, “assume”, “see”, “intend”, “probable”, “projects”, “may”, “could” , “Plan”, “Estimate”, “foresee”, “will”, “should”, “would”, “predict”, “aim”, “ambition”, “seek”, “potential”, “target”, ” could, ”“ continue, ”or, in each case, their negatives or variations thereof, and similar words or phrases are used to identify forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances, including the underlying assumptions, are forward-looking statements.
We caution investors that such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, which could cause actual results to differ materially from those expressed, implied or projected by the information and forward-looking statements. .
Important factors that may affect whether and to what extent any of our forward-looking statements materialize include, but are not limited to, the factors described in the “Risk Factors” section of the last interim report and in “Risk Factors”. risk ”of the 2020 Annual Report.
These forward-looking statements also represent our estimates and assumptions only as of the date on which they were made. We expressly disclaim any obligation to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this release, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events, whether as a result of new information, future events or otherwise, except as required by applicable law or stock market regulations.
