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Ericsson Says 2022 Profitability Target Remains Unchanged

Ericsson (ERIC) said that 2022 profitability target for the group remains unchanged with an operating margin of 12% - 14%, excluding restructuring charges.

The company said it will outline revised strategic growth ambitions and new long-term financial targets at its Capital Markets Day 2020 on Tuesday.

The 2022 operating margin target for Networks is raised to 16% - 18% from the prior outlook of 15% - 17%. The increased target in segment Networks is mainly driven by foot-print gains in the market.

In segment Digital Services, due to the increase in R&D spend in combination with the decline in legacy sales the operating margin target is revised to 4% - 7% in 2022, compared to the prior outlook of 10% - 12%.

Beyond 2022, the long-term profitability target is an EBITA margin excluding restructuring charges of 15% - 18% for the Group. The company aims to achieve this through improvement activities across the Group.

The company will continue its focus on free cash flow, before M&A, with a target of 9% - 12% of sales.

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