Ericsson (NASDAQ: ERIC) is continuing to execute its revised strategy in the segment of Cloud Software and Services. As outlined at the recent Capital Markets Day, key priorities include limiting subscale software development, accelerating automation to lower deployment and maintenance efforts, and changing focus from market share gains to a profitable business.
With the revised Cloud Software and Services strategy, Ericsson lays the foundation to turn the segment around. The target is to break even in full-year 2023 on EBIT/EBITA level with gradual improvements towards attractive long-term profitability.
Following a portfolio and customer contract review, the Company has decided to exit certain subscale agreements and product offerings, with a one-off negative impact on EBIT of SEK -0.8 b. in Q4 2022, of which SEK -0.7 b. is expected to impact cash flow, mainly in 2023.