Ericsson CEO Borje Ekholm (pictured) reassured shareholders the ongoing Covid-19 (coronavirus) pandemic would not derail its strategy, vowing to continue the R&D focus credited with helping to finally turn the company around in 2019.
In a pre-recorded speech to shareholders, set to be broadcast at the company’s AGM today (31 March), the executive said there was yet to be a material business impact from Covid-19, though it was prepared should this change.
Ekholm emphasised Ericsson was in a solid cash position offering “strong resilience” against a downturn and enabling continued investment.
“So far we’ve seen no business disruption,” he said. “But as several world economies experience an incredibly tough time we assume and plan for the fact that we will be affected and may need to take necessary measures.”
“We think we are well positioned to keep delivering on our strategy despite the challenges that the coronavirus presents,” he added.
Alongside well-documented operational cuts, a central strand of the company’s massive turnaround plan was to make large investments in R&D.
Since 2017, when Ekholm took the helm, the percentage of its employees working in R&D increased from 17 per cent to almost a quarter. During the period, however, it made significant cuts in other departments.
The executive said the company’s turnaround could now be considered complete, with it recording growth in 2019 for the first time since 2013 despite a challenging market.
During the speech he also updated on its progress in selling 5G network kit.
In Q1 2020, Ericsson added eight additional 5G contracts taking its tally to 86, of which 27 networks are now live, a position Ekholm claims places it as the market leader, though though this is frequently disputed by rivals.