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Report of foreign issuer [Rules 13a-16 and 15d-16]

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

Commission File Number

000-12033

LM ERICSSON TELEPHONE COMPANY

(Translation of registrants name into English)

Torshamnsgatan 21, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENTS ON FORM F-3 (NO. 333-203977) AND ON FORM S-8 (Nos. 333-196453, 333-161683 AND 333-161684) OF TELEFONAKTIEBOLAGET LM ERICSSON (PUBL.) AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED WITH OR FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

T ELEFONAKTIEBOLAGET LM E RICSSON (publ)
By:

/s/ NINA MACPHERSON

Nina Macpherson
Senior Vice President and
General Counsel
By:

/s/ HELENA NORRMAN

Helena Norrman
Senior Vice President
Corporate Communications

Date: April 22, 2016

FIRST QUARTER

REPORT 2016

AS ADJUSTED FOR INCORPORATION BY REFERENCE

Stockholm, April 21, 2016

FIRST QUARTER HIGHLIGHTS

Read more

(page)

Sales as reported decreased by -2% YoY. 3
Sales declined following weak development in Europe and a weak macro-economic environment in some emerging markets. 3
Sales grew in North America, Mainland China and in South East Asia. 3
IPR licensing revenues grew YoY, mainly driven by recently signed contracts which included certain one-time items. 3
Gross margin declined to 33.3% (35.4%), mainly due to lower margins in Global Services, higher share of mobile broadband coverage projects in parts of Asia and lower software sales in IP and core networks. 3
Operating margin increased to 6.7% (4.0%) YoY, driven by improvements in Networks, partly offset by lower profitability in Global Services. 4
In addition to the SEK 9 b. global cost and efficiency program, measures were started in the quarter to adapt the operations to current mobile broadband project volumes. Therefore, the estimate for 2016 restructuring charges increases to SEK 4-5 b. from previous SEK 3-4 b. 3
The company today announces structural changes to further accelerate strategy execution and drive efficiency and growth harder across the company. 2
Cash flow from operating activities was SEK -2.4 (-5.9) b. 9

SEK b.

Q1
2016
Q1
2015
YoY
change
Q4
2015
QoQ
change

Net sales

52.2 53.5 -2 % 73.6 -29 %

Gross margin

33.3 % 35.4 % 36.3 %

Operating income

3.5 2.1 63 % 11.0 -69 %

Operating margin

6.7 % 4.0 % 15.0 %

Net income

2.1 1.5 45 % 7.0 -70 %

EPS diluted, SEK

0.60 0.40 50 % 2.15 -72 %

Cash flow from operating activities

-2.4 -5.9 -60 % 21.9 -111 %

Net cash, end of period 1) 2)

36.5 39.7 -8 % 41.2 -11 %
1) Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28
2) The definition of Net cash is changed to exclude post-employment benefits, see accounting policies page 21.

1 Ericsson | First Quarter Report 2016

CEO COMMENTS

Growth in North America, Mainland China and South East Asia was offset by weak development in Europe and some emerging markets. Profitability increased YoY, driven by improvements in Networks while Global Services had a challenging quarter.

Business

Segment Networks sales declined slightly YoY. A continued weak macro-economic environment impacted sales negatively in some emerging markets in the Middle East and Latin America. In addition, sales in Europe were down primarily driven by completion of mobile broadband projects in 2015. Mobile broadband sales in North America and South East Asia grew and the fast pace of 4G deployments in Mainland China continued. IPR licensing revenues grew YoY, mainly driven by recently signed contracts which included certain one-time items. Software sales in IP and core networks declined.

Sales in segment Global Services declined YoY. This was mainly due to lower Network Rollout activities in Europe and Latin America. Professional Services sales were stable with growth in Consulting and Systems Integration driven by transformation projects and stable Managed Services sales with 21 contracts signed in the quarter.

Sales in Support Solutions increased YoY due to higher IPR licensing revenues. The underlying demand remains strong in OSS and BSS as data growth and increased focus on customer experience drives operators to transform their OSS and BSS solutions.

Profitability

Gross margin declined despite higher IPR licensing revenues. The main reasons were lower margins in Global Services, a higher share of mobile broadband coverage projects in parts of Asia and lower software sales in IP and core networks. Operating margin increased YoY to 6.7% (4.0%), driven by reduced operating expenses and a positive currency effect.

Segment Networks operating margin improved through higher profitability in Radio supported by growth in IPR licensing revenues. Global Services had a challenging quarter partly due to lower mobile broadband coverage activities, leading to temporarily larger losses in Network Rollout. In addition, Professional Services margin declined as a large number of systems integration transformation projects are in a start-up phase.

We ended the quarter with a negative cash flow from operating activities of SEK -2.4 b. which is a significant improvement compared with a year ago. As cash flow is volatile between quarters it should be viewed on a full-year basis. Our full-year cash conversion target of more than 70% remains.

When announcing the year-end results 2015, we presented three focus areas for 2016. The first focus area relates to our Core business where we will capture business opportunities in 4G and extend our leadership in 5G. At the Mobile World Congress (MWC) in Barcelona in March, we demonstrated our 5G leadership both technically and commercially through 21 customer contracts as well as industry and academia research cooperation.

The second focus area for 2016 is to improve profitability in the targeted growth areas. Sales in these areas showed growth mainly driven by professional services. We will continue to put stronger focus on software sales and recurring business to increase profitability.

The third focus area for 2016 is to improve cost and efficiency in order to stay competitive across the entire business.

The global cost and efficiency program is progressing according to plan and contributed with savings of SEK 0.5 b. in operating expenses in the quarter. We are confident in our ability to achieve net annual savings of SEK 9 b. during 2017 compared with 2014.

In the quarter, we began to take additional measures beyond the SEK 9 b. cost and efficiency program. Hence, we are adapting our operations to current mobile broadband project volumes, which primarily impacts service delivery. The additional measures are reflected in an increased estimate for the 2016 restructuring charges.

Structural changes

We are today announcing structural changes to further accelerate strategy execution and drive efficiency and growth even harder across the company. We will create a leaner, more fit for purpose, organization to cater to the needs of different customer segments and to faster capture market opportunities. As 5G, the Internet of Things and Cloud drive the next phase of industry development, the time is right to make this change.

The new structure will have five business units and one dedicated customer group for Industry & Society, in line with the company focus on core business, targeted growth areas and cost and efficiency. The changes will make it easier for our customers to do business with us, whether they are operators, media companies or other industries.

We are not satisfied with our overall growth and profitability development over the past years and I am convinced this will make us more competitive and enable us to grow both our company and our earnings.

2 Ericsson | First Quarter Report 2016

FINANCIAL HIGHLIGHTS

SEK b.

Q1
2016
Q1
2015
YoY
change
Q4
2015
QoQ
change

Net sales

52.2 53.5 -2 % 73.6 -29 %

Of which Networks

25.8 26.4 -2 % 37.3 -31 %

Of which Global Services

23.0 23.9 -4 % 30.7 -25 %

Of which Support Solutions

3.4 3.1 10 % 5.6 -40 %

Of which Modems

0.1

Gross income

17.4 19.0 -8 % 26.7 -35 %

Gross margin (%)

33.3 % 35.4 % 36.3 %

Research and development expenses

-7.5 -8.5 -12 % -7.9 -6 %

Selling and administrative expenses

-6.7 -7.1 -6 % -8.0 -16 %

Other operating income and expenses

0.3 -1.2 0.3 7 %

Operating income

3.5 2.1 63 % 11.0 -69 %

Operating margin

6.7 % 4.0 % 15.0 %

for Networks

11 % 2 % 19 %

for Global Services

3 % 7 % 8 %

for Support Solutions

7 % 3 % 30 %

for Modems

0 %

Financial net

-0.5 -0.1 -0.7 -36 %

Taxes

-0.9 -0.6 45 % -3.3 -73 %

Net income

2.1 1.5 45 % 7.0 -70 %

Restructuring charges

-0.6 -0.6 3 % -0.7 -10 %

FIRST QUARTER COMMENTS

3 Ericsson | First Quarter Report 2016

4 Ericsson | First Quarter Report 2016

REGIONAL SALES

First quarter 2016 Change

SEK b.

Networks Global
Services
Support
Solutions
Total YoY QoQ

North America

6.3 6.1 0.8 13.2 8 % -23 %

Latin America

2.0 1.8 0.2 4.0 -12 % -34 %

Northern Europe and Central Asia

1.3 0.8 0.1 2.2 -18 % -22 %

Western and Central Europe

1.3 2.5 0.1 4.0 -17 % -26 %

Mediterranean

1.5 2.7 0.1 4.3 -14 % -38 %

Middle East

1.4 1.9 0.3 3.6 -21 % -41 %

Sub-Saharan Africa

0.9 1.1 0.2 2.1 -2 % -26 %

India

1.3 1.2 0.2 2.7 -24 % -15 %

North East Asia

3.5 1.9 0.1 5.6 -7 % -37 %

South East Asia and Oceania

3.2 1.9 0.1 5.2 22 % -2 %

Other 1)

3.1 1.1 1.2 5.4 43 % -40 %

Total

25.8 23.0 3.4 52.2 -2 % -29 %
1) Region Other includes licensing revenues, broadcast services, power modules, mobile broadband modules, Ericsson-LG Enterprise and other businesses.

5 Ericsson | First Quarter Report 2016

SEGMENT RESULTS

NETWORKS

SEK b.

Q1
2016
Q1
2015
YoY
change
Q4
2015
QoQ
change

Net sales

25.8 26.4 -2 % 37.3 -31 %

Operating income

2.7 0.6 362 % 7.2 -62 %

Operating margin

11 % 2 % 19 %

Restructuring charges

-0.3 -0.2 71 % -0.3 14 %

Net sales

6 Ericsson | First Quarter Report 2016

GLOBAL SERVICES

SEK b.

Q1
2016
Q1
2015
YoY
change
Q4
2015
QoQ
change

Net sales

23.0 23.9 -4 % 30.7 -25 %

Of which Professional Services

17.9 18.1 -1 % 23.1 -22 %

Of which Managed Services

7.4 7.5 -2 % 8.2 -10 %

Of which Network Rollout

5.1 5.8 -12 % 7.6 -33 %

Operating income

0.6 1.7 -62 % 2.5 -75 %

Of which Professional Services

1.3 2.1 -39 % 2.7 -52 %

Of which Network Rollout

-0.6 -0.4 52 % -0.2 257 %

Operating margin

3 % 7 % 8 %

for Professional Services

7 % 12 % 12 %

for Network Rollout

-13 % -7 % -2 %

Restructuring charges

-0.3 -0.4 -25 % -0.2 48 %
Q1
2016
Q1
2015
Full year
2015

Number of signed Managed Services contracts

21 27 101

Number of signed significant consulting & systems integration contracts 1)

13 13 66
1) In the areas of OSS and BSS, IP, Service Delivery Platforms and data center build projects.

7 Ericsson | First Quarter Report 2016

SUPPORT SOLUTIONS

SEK b.

Q1
2016
Q1
2015
YoY
change
Q4
2015
QoQ
change

Net sales

3.4 3.1 10 % 5.6 -40 %

Operating income

0.2 0.1 190 % 1.7 -86 %

Operating margin

7 % 3 % 30 %

Restructuring charges

0.0 0.0 16 % -0.2 -90 %

8 Ericsson | First Quarter Report 2016

CASH FLOW

SEK b.

Q1
2016
Q1
2015
Q4
2015

Net income reconciled to cash

3.6 3.1 11.0

Changes in operating net assets

-6.0 -9.0 10.9

Cash flow from operating activities

-2.4 -5.9 21.9

Cash flow from investing activities

-1.0 -2.1 -12.8

Cash flow from financing activities

0.1 0.9 -0.7

Net change in cash and cash equivalents

-4.3 -5.7 6.3

Cash conversion (%) 1)

-65 % -188 % 200 %
1) Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28

Working capital KPIs, number of days

Jan-Mar
2016
Jan-Dec
2015
Jan-Sep
2015
Jan-Jun
2015
Jan-Mar
2015

Sales outstanding (target: <90)

108 87 113 112 125

Inventory (target:<65)

80 64 72 74 82

Payable (target:>60)

58 53 55 57 64

9 Ericsson | First Quarter Report 2016

FINANCIAL POSITION

SEK b.

Mar 31
2016
Mar 31
2015
Dec 31
2015

+ Short-term investments

25.1 30.8 26.0

+ Cash and cash equivalents

35.9 35.3 40.2

Gross cash

61.0 66.1 66.3

- Interest bearing liabilities

24.5 26.3 25.1

Net cash 1)

36.5 39.7 41.2

Equity

145.6 149.1 147.4

Total assets

280.3 303.0 284.4

Capital turnover (times)

1.1 1.1 1.3

Equity ratio (%)

52.0 % 49.2 % 51.8 %
1) Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28

10 Ericsson | First Quarter Report 2016

OTHER INFORMATION

11 Ericsson | First Quarter Report 2016

RISK FACTORS

Potential negative effects on operators willingness to invest in network development due to uncertainty in the financial markets and a weak economic business environment, or reduced consumer telecom spending, or increased pressure on us to provide financing, or delayed auctions of spectrums;
Effects on gross margins and/or working capital of the business mix in the Networks segment between capacity sales and new coverage build-outs;
Effects on gross margins of the business mix in the Global Services segment including proportion of new network build-outs and share of new managed services deals with initial transition costs;
Effects of the ongoing industry consolidation among our customers as well as between our largest competitors, e.g. with postponed investments and intensified price competition as a consequence;
Effects on production and sales from restrictions with respect to timely and adequate supply of materials, components and production capacity and other vital services on competitive terms;
No guarantees that specific restructuring or cost-savings initiatives will be sufficient, successful or executed in time to deliver any improvements in short-term earnings;

12 Ericsson | First Quarter Report 2016

EDITORS NOTE

Investors
Peter Nyquist, Vice President,
Head of Investor Relations
Phone: +46 10 714 64 49, +46 70 575 29 06
E-mail: peter.nyquist@ericsson.com
Stefan Jelvin, Director,
Investor Relations
Phone: +46 10 714 20 39, +46 70 986 02 27
E-mail: stefan.jelvin@ericsson.com
Åsa Konnbjer, Director,
Investor Relations
Phone: +46 10 713 39 28, +46 73 082 59 28
E-mail: asa.konnbjer@ericsson.com
Rikard Tunedal, Director,
Investor Relations
Phone: +46 10 714 54 00, +46 761 005 400
E-mail: rikard.tunedal@ericsson.com
Media
Ola Rembe, Vice President,
Head of External Communications
Phone: +46 10 719 97 27, +46 73 024 48 73
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com

13 Ericsson | First Quarter Report 2016

SAFE HARBOR STATEMENT

14 Ericsson | First Quarter Report 2016

FINANCIAL STATEMENTS AND

ADDITIONAL INFORMATION

Contents

Financial statements

Consolidated income statement

16

Statement of comprehensive income

16

Consolidated balance sheet

17

Consolidated statement of cash flows

18

Consolidated statement of changes in equity

19

Consolidated income statement isolated quarters

19

Consolidated statement of cash flows isolated quarters

20

Additional information

Accounting policies

21

Net sales by segment by quarter

22

Operating income by segment by quarter

23

Operating margin by segment by quarter

23

Net sales by region by quarter

24

Net sales by region by quarter (cont.)

25

Top 5 countries in sales

25

Net sales by region by segment

26

Provisions

27

Information on investments

27

Reconciliation tables, non-IFRS measures

28

Other information

29

Number of employees

29

Restructuring charges by function

30

Restructuring charges by segment

30

15 Ericsson | First Quarter Report 2016

CONSOLIDATED INCOME STATEMENT

Jan-Mar Jan-Dec

SEK million

2016 2015 Change 2015

Net sales

52,209 53,520 -2 % 246,920

Cost of sales

-34,819 -34,556 1 % -161,101

Gross income

17,390 18,964 -8 % 85,819

Gross margin (%)

33.3 % 35.4 % 34.8 %

Research and development expenses

-7,485 -8,487 -12 % -34,844

Selling and administrative expenses

-6,720 -7,131 -6 % -29,285

Operating expenses

-14,205 -15,618 -9 % -64,129

Other operating income and expenses

273 -1,240 153

Shares in earnings of JV and associated companies

17 27 -38

Operating income

3,475 2,133 63 % 21,805

Financial income

-89 684 525

Financial expenses

-377 -740 -2,458

Income after financial items

3,009 2,077 45 % 19,872

Taxes

-903 -623 -6,199

Net income

2,106 1,454 45 % 13,673

Net income attributable to:

Stockholders of the Parent Company

1,966 1,319 13,549

Non-controlling interests

140 135 124

Other information

Average number of shares, basic (million)

3,258 3,244 3,249

Earnings per share, basic (SEK) 1)

0.60 0.41 4.17

Earnings per share, diluted (SEK) 1)

0.60 0.40 4.13
1) Based on Net income attributable to stockholders of the Parent Company.

STATEMENT OF COMPREHENSIVE INCOME

Jan-Mar Jan-Dec

SEK million

2016 2015 2015

Net income

2,106 1,454 13,673

Other comprehensive income

Items that will not be reclassified to profit or loss

Remeasurements of defined benefits pension plans incl. asset ceiling

-3,502 -3,211 -2,026

Tax on items that will not be reclassified to profit or loss

953 694 721

Items that may be reclassified to profit or loss

Cash flow hedges

Gains/losses arising during the period

Reclassification adjustments for gains/losses included in profit or loss

Revaluation of other investments in shares and participations

Fair value remeasurement

-4 181 457

Changes in cumulative translation adjustments

-1,133 4,409 -604

Share of other comprehensive income on JV and associated companies

-376 -4 141

Tax on items that may be reclassified to profit or loss

Total other comprehensive income, net of tax

-4,062 2,069 -1,311

Total comprehensive income

-1,956 3,523 12,362

Total comprehensive income attributable to:

Stockholders of the Parent Company

-2,093 3,305 12,218

Non-controlling interest

137 218 144

16 Ericsson | First Quarter Report 2016

CONSOLIDATED BALANCE SHEET

SEK million

Mar 31
2016
Dec 31
2015

ASSETS

Non-current assets

Intangible assets

Capitalized development expenses

6,349 5,493

Goodwill

40,316 41,087

Intellectual property rights, brands and other intangible assets

8,400 9,316

Property, plant and equipment

16,127 15,901

Financial assets

Equity in JV and associated companies

851 1,210

Other investments in shares and participations

1,090 1,275

Customer finance, non-current

1,663 1,739

Other financial assets, non-current

4,997 5,634

Deferred tax assets

14,117 13,183
93,910 94,838

Current assets

Inventories

32,252 28,436

Trade receivables

66,701 71,069

Customer finance, current

2,346 2,041

Other current receivables

24,105 21,709

Short-term investments

25,077 26,046

Cash and cash equivalents

35,934 40,224
186,415 189,525

Total assets

280,325 284,363

EQUITY AND LIABILITIES

Equity

Stockholders equity

144,699 146,525

Non-controlling interest in equity of subsidiaries

945 841
145,644 147,366

Non-current liabilities

Post-employment benefits

25,715 22,664

Provisions, non-current

158 176

Deferred tax liabilities

2,098 2,472

Borrowings, non-current

22,110 22,744

Other non-current liabilities

1,834 1,851
51,915 49,907

Current liabilities

Provisions, current

3,374 3,662

Borrowings, current

2,414 2,376

Trade payables

21,549 22,389

Other current liabilities

55,429 58,663
82,766 87,090

Total equity and liabilities

280,325 284,363

Of which interest-bearing liabilities

24,524 25,120

Of which net cash 1)

36,487 41,150

Assets pledged as collateral

2,513 2,526

Contingent liabilities

918 922
1) Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page 28

17 Ericsson | First Quarter Report 2016

CONSOLIDATED STATEMENT

OF CASH FLOWS

Jan-Mar Jan-Dec

SEK million

2016 2015 2015

Operating activities

Net income

2,106 1,454 13,673

Adjustments to reconcile net income to cash

Taxes

-1,208 -1,921 -2,835

Earnings/dividends in JV and associated companies

-16 -22 130

Depreciation, amortization and impairment losses

2,097 2,681 10,206

Other

652 944 3,110
3,631 3,136 24,284

Changes in operating net assets

Inventories

-4,212 -4,019 -366

Customer finance, current and non-current

-251 -258 824

Trade receivables

3,408 2,037 7,000

Trade payables

-617 -1,668 -2,676

Provisions and post-employment benefits

-14 -166 544

Other operating assets and liabilities, net

-4,317 -4,962 -9,013
-6,003 -9,036 -3,687

Cash flow from operating activities

-2,372 -5,900 20,597

Investing activities

Investments in property, plant and equipment

-1,474 -2,367 -8,338

Sales of property, plant and equipment

44 75 1,301

Acquisitions/divestments of subsidiaries and other operations, net

-108 -58 -2,200

Product development

-1,208 -294 -3,302

Other investing activities

735 118 -543

Short-term investments

1,013 399 5,095

Cash flow from investing activities

-998 -2,127 -7,987

Cash flow before financing activities

-3,370 -8,027 12,610

Financing activities

Dividends paid

-33 -25 -11,337

Other financing activities

94 899 627

Cash flow from financing activities

61 874 -10,710

Effect of exchange rate changes on cash

-981 1,476 -2,664

Net change in cash and cash equivalents

-4,290 -5,677 -764

Cash and cash equivalents, beginning of period

40,224 40,988 40,988

Cash and cash equivalents, end of period

35,934 35,311 40,224

18 Ericsson | First Quarter Report 2016

CONSOLIDATED STATEMENT

OF CHANGES IN EQUITY

Jan-Mar Jan-Dec

SEK million

2016 2015 2015

Opening balance

147,366 145,309 145,309

Total comprehensive income

-1,956 3,523 12,362

Sale/repurchase of own shares

29 46 169

Stock purchase plan

238 198 865

Dividends paid

-33 -25 -11,337

Transactions with non-controlling interests

-2

Closing balance

145,644 149,051 147,366

CONSOLIDATED INCOME STATEMENT

- ISOLATED QUARTERS

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Net sales

52,209 73,568 59,161 60,671 53,520

Cost of sales

-34,819 -46,899 -39,110 -40,536 -34,556

Gross income

17,390 26,669 20,051 20,135 18,964

Gross margin (%)

33.3 % 36.3 % 33.9 % 33.2 % 35.4 %

Research and development expenses

-7,485 -7,921 -8,540 -9,896 -8,487

Selling and administrative expenses

-6,720 -7,996 -6,393 -7,765 -7,131

Operating expenses

-14,205 -15,917 -14,933 -17,661 -15,618

Other operating income and expenses

273 254 80 1,059 -1,240

Shares in earnings of JV and associated companies

17 29 -121 27 27

Operating income

3,475 11,035 5,077 3,560 2,133

Financial income

-89 -109 188 -238 684

Financial expenses

-377 -619 -809 -290 -740

Income after financial items

3,009 10,307 4,456 3,032 2,077

Taxes

-903 -3,329 -1,338 -909 -623

Net income

2,106 6,978 3,118 2,123 1,454

Net income attributable to:

Stockholders of the Parent Company

1,966 7,056 3,080 2,094 1,319

Non-controlling interests

140 -78 38 29 135

Other information

Average number of shares, basic (million)

3,258 3,254 3,251 3,247 3,244

Earnings per share, basic (SEK) 1)

0.60 2.17 0.95 0.64 0.41

Earnings per share, diluted (SEK) 1)

0.60 2.15 0.94 0.64 0.40
1) Based on Net income attributable to stockholders of the Parent Company.

19 Ericsson | First Quarter Report 2016

CONSOLIDATED STATEMENT

OF CASH FLOWS - ISOLATED QUARTERS

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Operating activities

Net income

2,106 6,978 3,118 2,123 1,454

Adjustments to reconcile net income to cash

Taxes

-1,208 395 51 -1,360 -1,921

Earnings/dividends in JV and associated companies

-16 -33 136 49 -22

Depreciation, amortization and impairment losses

2,097 2,521 2,425 2,579 2,681

Other

652 1,092 1,052 22 944
3,631 10,953 6,782 3,413 3,136

Changes in operating net assets

Inventories

-4,212 3,496 -226 383 -4,019

Customer finance, current and non-current

-251 302 375 405 -258

Trade receivables

3,408 2,754 -1,421 3,630 2,037

Trade payables

-617 886 -494 -1,400 -1,668

Provisions and post-employment benefits

-14 -673 -302 1,685 -166

Other operating assets and liabilities, net

-4,317 4,141 -3,154 -5,038 -4,962
-6,003 10,906 -5,222 -335 -9,036

Cash flow from operating activities

-2,372 21,859 1,560 3,078 -5,900

Investing activities

Investments in property, plant and equipment

-1,474 -1,740 -1,807 -2,424 -2,367

Sales of property, plant and equipment

44 92 59 1,075 75

Acquisitions/divestments of subsidiaries and other operations, net

-108 -945 -1,028 -169 -58

Product development

-1,208 -1,183 -982 -843 -294

Other investing activities

735 -418 37 -280 118

Short-term investments

1,013 -8,613 3,631 9,678 399

Cash flow from investing activities

-998 -12,807 -90 7,037 -2,127

Cash flow before financing activities

-3,370 9,052 1,470 10,115 -8,027

Financing activities

Dividends paid

-33 -277 -11,035 -25

Other financing activities

94 -669 -34 431 899

Cash flow from financing activities

61 -669 -311 -10,604 874

Effect of exchange rate changes on cash

-981 -2,109 -171 -1,860 1,476

Net change in cash and cash equivalents

-4,290 6,274 988 -2,349 -5,677

Cash and cash equivalents, beginning of period

40,224 33,950 32,962 35,311 40,988

Cash and cash equivalents, end of period

35,934 40,224 33,950 32,962 35,311

20 Ericsson | First Quarter Report 2016

ACCOUNTING POLICIES

THE GROUP

21 Ericsson | First Quarter Report 2016

NET SALES BY SEGMENT BY QUARTER

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Networks

25,820 37,304 28,817 31,163 26,436

Global Services

23,018 30,670 27,055 26,392 23,901

Of which Professional Services

17,932 23,072 20,545 20,001 18,131

Of which Managed Services

7,352 8,214 7,976 8,150 7,501

Of which Network Rollout

5,086 7,598 6,510 6,391 5,770

Support Solutions

3,371 5,594 3,289 3,092 3,074

Modems

24 109

Total

52,209 73,568 59,161 60,671 53,520
2016 2015

Sequential change, percent

Q1 Q4 Q3 Q2 Q1

Networks

-31 % 29 % -8 % 18 % -22 %

Global Services

-25 % 13 % 3 % 10 % -20 %

Of which Professional Services

-22 % 12 % 3 % 10 % -15 %

Of which Managed Services

-10 % 3 % -2 % 9 % -3 %

Of which Network Rollout

-33 % 17 % 2 % 11 % -31 %

Support Solutions

-40 % 70 % 6 % 1 % -23 %

Modems

Total

-29 % 24 % -2 % 13 % -21 %
2016 2015

Year over year change, percent

Q1 Q4 Q3 Q2 Q1

Networks

-2 % 9 % -4 % 8 % 8 %

Global Services

-4 % 3 % 11 % 14 % 17 %

Of which Professional Services

-1 % 8 % 15 % 21 % 20 %

Of which Managed Services

-2 % 6 % 11 % 26 % 30 %

Of which Network Rollout

-12 % -9 % -2 % -2 % 9 %

Support Solutions

10 % 40 % 8 % 9 % 11 %

Modems

Total

-2 % 8 % 3 % 11 % 13 %
2016 2015

Year to date, SEK million

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Networks

25,820 123,720 86,416 57,599 26,436

Global Services

23,018 108,018 77,348 50,293 23,901

Of which Professional Services

17,932 81,749 58,677 38,132 18,131

Of which Managed Services

7,352 31,841 23,627 15,651 7,501

Of which Network Rollout

5,086 26,269 18,671 12,161 5,770

Support Solutions

3,371 15,049 9,455 6,166 3,074

Modems

133 133 133 109

Total

52,209 246,920 173,352 114,191 53,520
2016 2015

Year to date, year over year change, percent

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Networks

-2 % 5 % 4 % 8 % 8 %

Global Services

-4 % 11 % 14 % 16 % 17 %

Of which Professional Services

-1 % 15 % 19 % 21 % 20 %

Of which Managed Services

-2 % 17 % 22 % 28 % 30 %

Of which Network Rollout

-12 % -2 % 1 % 3 % 9 %

Support Solutions

10 % 19 % 9 % 10 % 11 %

Modems

Total

-2 % 8 % 8 % 12 % 13 %

22 Ericsson | First Quarter Report 2016

OPERATING INCOME

BY SEGMENT BY QUARTER

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Networks

2,724 7,154 2,764 2,435 590

Global Services

644 2,530 2,364 1,640 1,681

Of which Professional Services

1,293 2,712 2,386 2,403 2,109

Of which Network Rollout

-649 -182 -22 -763 -428

Support Solutions

238 1,668 -6 -240 82

Modems

1 -1 7 0

Unallocated 1)

-131 -318 -44 -282 -220

Total

3,475 11,035 5,077 3,560 2,133
2016 2015

Year to date, SEK million

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Networks

2,724 12,943 5,789 3,025 590

Global Services

644 8,215 5,685 3,321 1,681

Of which Professional Services

1,293 9,610 6,898 4,512 2,109

Of which Network Rollout

-649 -1,395 -1,213 -1,191 -428

Support Solutions

238 1,504 -164 -158 82

Modems

7 6 7 0

Unallocated 1)

-131 -864 -546 -502 -220

Total

3,475 21,805 10,770 5,693 2,133
1) Unallocated consists mainly of costs for corporate staff, non-operational capital gains and losses.

OPERATING MARGIN

BY SEGMENT BY QUARTER

As percentage of net sales, isolated quarters

2016 2015
Q1 Q4 Q3 Q2 Q1

Networks

11 % 19 % 10 % 8 % 2 %

Global Services

3 % 8 % 9 % 6 % 7 %

Of which Professional Services

7 % 12 % 12 % 12 % 12 %

Of which Network Rollout

-13 % -2 % 0 % -12 % -7 %

Support Solutions

7 % 30 % 0 % -8 % 3 %

Modems

Total

7 % 15 % 9 % 6 % 4 %
2016 2015

As percentage of net sales, year to date

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Networks

11 % 10 % 7 % 5 % 2 %

Global Services

3 % 8 % 7 % 7 % 7 %

Of which Professional Services

7 % 12 % 12 % 12 % 12 %

Of which Network Rollout

-13 % -5 % -6 % -10 % -7 %

Support Solutions

7 % 10 % -2 % -3 % 3 %

Modems

Total

7 % 9 % 6 % 5 % 4 %

23 Ericsson | First Quarter Report 2016

NET SALES

BY REGION BY QUARTER

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

North America

13,182 17,082 14,355 14,578 12,246

Latin America

4,040 6,106 5,610 5,067 4,574

Northern Europe & Central Asia 1) 2)

2,222 2,847 2,520 2,556 2,726

Western & Central Europe 2)

3,953 5,320 4,540 5,131 4,741

Mediterranean 2)

4,296 6,971 5,470 5,887 4,982

Middle East

3,567 6,089 5,728 6,515 4,517

Sub Saharan Africa

2,120 2,847 2,691 2,653 2,158

India

2,683 3,172 3,629 3,049 3,531

North East Asia

5,579 8,916 6,348 6,943 6,030

South East Asia & Oceania

5,199 5,329 4,750 4,897 4,259

Other 1) 2)

5,368 8,889 3,520 3,395 3,756

Total

52,209 73,568 59,161 60,671 53,520

1) Of which in Sweden

1,113 972 1,135 598 1,091

2) Of which in EU

9,229 12,644 10,584 11,453 10,904
2016 2015

Sequential change, percent

Q1 Q4 Q3 Q2 Q1

North America

-23 % 19 % -2 % 19 % -6 %

Latin America

-34 % 9 % 11 % 11 % -30 %

Northern Europe & Central Asia 1) 2)

-22 % 13 % -1 % -6 % -33 %

Western & Central Europe 2)

-26 % 17 % -12 % 8 % -22 %

Mediterranean 2)

-38 % 27 % -7 % 18 % -34 %

Middle East

-41 % 6 % -12 % 44 % -34 %

Sub Saharan Africa

-26 % 6 % 1 % 23 % -17 %

India

-15 % -13 % 19 % -14 % 49 %

North East Asia

-37 % 40 % -9 % 15 % -35 %

South East Asia & Oceania

-2 % 12 % -3 % 15 % -14 %

Other 1) 2)

-40 % 153 % 4 % -10 % -19 %

Total

-29 % 24 % -2 % 13 % -21 %

1) Of which in Sweden

15 % -14 % 90 % -45 % 4 %

2) Of which in EU

-27 % 19 % -8 % 5 % -24 %
2016 2015

Year-over-year change, percent

Q1 Q4 Q3 Q2 Q1

North America

8 % 31 % 2 % -4 % 0 %

Latin America

-12 % -7 % -5 % -6 % -3 %

Northern Europe & Central Asia 1) 2)

-18 % -30 % -20 % -6 % 12 %

Western & Central Europe 2)

-17 % -13 % -2 % 12 % 8 %

Mediterranean 2)

-14 % -7 % 5 % 7 % 4 %

Middle East

-21 % -11 % -5 % 44 % 17 %

Sub Saharan Africa

-2 % 9 % 10 % 41 % 19 %

India

-24 % 34 % 81 % 85 % 108 %

North East Asia

-7 % -3 % -10 % 8 % 23 %

South East Asia & Oceania

22 % 8 % 25 % 34 % 24 %

Other 1) 2)

43 % 91 % 4 % 1 % 15 %

Total

-2 % 8 % 3 % 11 % 13 %

1) Of which in Sweden

2 % -7 % 4 % -41 % 9 %

2) Of which in EU

-15 % -12 % -1 % 11 % 12 %

24 Ericsson | First Quarter Report 2016

NET SALES

BY REGION BY QUARTER, CONT .

2016 2015

Year to date, SEK million

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

North America

13,182 58,261 41,179 26,824 12,246

Latin America

4,040 21,357 15,251 9,641 4,574

Northern Europe & Central Asia 1) 2)

2,222 10,649 7,802 5,282 2,726

Western & Central Europe 2)

3,953 19,732 14,412 9,872 4,741

Mediterranean 2)

4,296 23,310 16,339 10,869 4,982

Middle East

3,567 22,849 16,760 11,032 4,517

Sub Saharan Africa

2,120 10,349 7,502 4,811 2,158

India

2,683 13,381 10,209 6,580 3,531

North East Asia

5,579 28,237 19,321 12,973 6,030

South East Asia & Oceania

5,199 19,235 13,906 9,156 4,259

Other 1) 2)

5,368 19,560 10,671 7,151 3,756

Total

52,209 246,920 173,352 114,191 53,520

1) Of which in Sweden

1,113 3,796 2,824 1,689 1,091

2) Of which in EU

9,229 45,585 32,941 22,357 10,904

Year to date, year-over-year change, percent

2016 2015
Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

North America

8 % 7 % -1 % -2 % 0 %

Latin America

-12 % -5 % -5 % -5 % -3 %

Northern Europe & Central Asia 1) 2)

-18 % -14 % -6 % 3 % 12 %

Western & Central Europe 2)

-17 % 0 % 6 % 10 % 8 %

Mediterranean 2)

-14 % 1 % 5 % 6 % 4 %

Middle East

-21 % 7 % 16 % 32 % 17 %

Sub Saharan Africa

-2 % 18 % 22 % 30 % 19 %

India

-24 % 74 % 91 % 97 % 108 %

North East Asia

-7 % 2 % 5 % 15 % 23 %

South East Asia & Oceania

22 % 21 % 28 % 29 % 24 %

Other 1) 2)

43 % 33 % 7 % 8 % 15 %

Total

-2 % 8 % 8 % 12 % 13 %

1) Of which in Sweden

2 % -8 % -9 % -16 % 9 %

2) Of which in EU

-15 % 1 % 7 % 12 % 12 %

TOP 5 COUNTRIES IN SALES

Q1 Jan-Dec

Country

2016 2015 2015

United States

27 % 23 % 26 %

China

9 % 8 % 8 %

India

5 % 7 % 5 %

Japan

4 % 3 % 3 %

Italy

3 % 3 % 3 %

25 Ericsson | First Quarter Report 2016

NET SALES

BY REGION BY SEGMENT

Q1 2016

SEK million

Networks Global
Services
Support
Solutions
Total

North America

6,341 6,078 763 13,182

Latin America

2,023 1,815 202 4,040

Northern Europe & Central Asia

1,342 807 73 2,222

Western & Central Europe

1,295 2,522 136 3,953

Mediterranean

1,459 2,690 147 4,296

Middle East

1,407 1,896 264 3,567

Sub Saharan Africa

869 1,087 164 2,120

India

1,279 1,228 176 2,683

North East Asia

3,544 1,917 118 5,579

South East Asia & Oceania

3,185 1,928 86 5,199

Other

3,076 1,050 1,242 5,368

Total

25,820 23,018 3,371 52,209

Share of Total

50 % 44 % 6 % 100 %
Q1 2016

Sequential change, percent

Networks Global
Services
Support
Solutions
Total

North America

-20 % -20 % -50 % -23 %

Latin America

-29 % -39 % -23 % -34 %

Northern Europe & Central Asia

-6 % -39 % -25 % -22 %

Western & Central Europe

-30 % -22 % -45 % -26 %

Mediterranean

-45 % -33 % -42 % -38 %

Middle East

-49 % -37 % -21 % -41 %

Sub Saharan Africa

-45 % -4 % 23 % -26 %

India

-26 % -7 % 31 % -15 %

North East Asia

-39 % -33 % -50 % -37 %

South East Asia & Oceania

21 % -21 % -67 % -2 %

Other

-49 % 43 % -41 % -40 %

Total

-31 % -25 % -40 % -29 %
Q1 2016

Year over year change, percent

Networks Global
Services
Support
Solutions
Total

North America

23 % -4 % -4 % 8 %

Latin America

-6 % -18 % -7 % -12 %

Northern Europe & Central Asia

-26 % -4 % -1 % -18 %

Western & Central Europe

-21 % -14 % -19 % -17 %

Mediterranean

-24 % -8 % 0 % -14 %

Middle East

-41 % -2 % 44 % -21 %

Sub Saharan Africa

15 % -7 % -31 % -2 %

India

-39 % 11 % -46 % -24 %

North East Asia

-11 % -5 % 97 % -7 %

South East Asia & Oceania

32 % 9 % 8 % 22 %

Other

44 % 47 % 57 % 43 %

Total

-2 % -4 % 10 % -2 %

26 Ericsson | First Quarter Report 2016

PROVISIONS

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Opening balance

3,838 4,331 5,354 4,056 4,427

Additions

492 589 695 2,777 915

Utilization/Cash out

-667 -1,096 -1,545 -1,217 -1,204

Of which restructuring

-487 -754 -1,103 -472 -437

Reversal of excess amounts

-67 87 -168 -161 -236

Reclassification, translation difference and other

-64 -73 -5 -101 154

Closing balance

3,532 3,838 4,331 5,354 4,056
2016 2015

Year to date, SEK million

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Opening balance

3,838 4,427 4,427 4,427 4,427

Additions

492 4,976 4,387 3,692 915

Utilization/Cash out

-667 -5,062 -3,966 -2,421 -1,204

Of which restructuring

-487 -2,766 -2,012 -909 -437

Reversal of excess amounts

-67 -478 -565 -397 -236

Reclassification, translation difference and other

-64 -25 48 53 154

Closing balance

3,532 3,838 4,331 5,354 4,056

INFORMATION ON INVESTMENTS

Investments in assets subject to depreciation, amortization, impairment and write-downs

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Additions

Property, plant and equipment

1 474 1,739 1,807 2,424 2,367

Capitalized development expenses 1)

1 208 1,183 982 843 294

IPR, brands and other intangible assets

5 23 10 26 11

Total

2 687 2,945 2,799 3,293 2,672

Depreciation, amortization and impairment losses

Property, plant and equipment

1 062 1,194 1,129 1,152 1,214

Capitalized development expenses

351 349 354 333 342

IPR, brands and other intangible assets, etc.

684 978 942 1,094 1,125

Total

2 097 2,521 2,425 2,579 2,681

27 Ericsson | First Quarter Report 2016

RECONCILIATION TABLES, NON-IFRS

MEASURES

CASH CONVERSION

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Net income

2,106 6,978 3,118 2,123 1,454

Net income reconciled to cash

3,631 10,953 6,782 3,413 3,136

Cash flow from operating activities

-2,372 21,859 1,560 3,078 -5,900

Cash conversion

-65.3 % 199.6 % 23.0 % 90.2 % -188.1 %

NET CASH - END OF PERIOD

SEK million

Mar 31
2016
Dec 31
2015

Cash and cash equivalents

35,934 40,224

+ Short term investments

25,077 26,046

- Borrowings, non-current

22,110 22,744

- Borrowings, current

2,414 2,376

Net cash, end of period

36,487 41,150

28 Ericsson | First Quarter Report 2016

OTHER INFORMATION

Jan-Mar Jan-Dec

SEK million

2016 2015 2015

Number of shares and earnings per share

Number of shares, end of period (million)

3,305 3,305 3,305

Of which class A-shares (million)

262 262 262

Of which class B-shares (million)

3,043 3,043 3,043

Number of treasury shares, end of period (million)

46 60 49

Number of shares outstanding, basic, end of period (million)

3,259 3,245 3,256

Numbers of shares outstanding, diluted, end of period (million)

3,293 3,277 3,289

Average number of treasury shares (million)

47 61 56

Average number of shares outstanding, basic (million)

3,258 3,244 3,249

Average number of shares outstanding, diluted (million) 1)

3,292 3,276 3,282

Earnings per share, basic (SEK)

0.60 0.41 4.17

Earnings per share, diluted (SEK) 1)

0.60 0.40 4.13

Ratios

Days sales outstanding

108 125 87

Inventory turnover days

80 82 64

Payable days

58 64 53

Equity ratio (%)

52.0 % 49.2 % 51.8 %

Capital turnover (times)

1.1 1.1 1.3

Cash conversion % 2)

-65.3 % -188.1 % 84.8 %

Exchange rates used in the consolidation 3)

SEK/EUR- closing rate

9.23 9.29 9.17

SEK/USD- closing rate

8.11 8.64 8.40

Other

Regional inventory, end of period

18,089 20,000 15,453

Export sales from Sweden

23,254 26,151 117,486
1) Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.
2 ) Reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures can be found on page XX
3) Translation method changed from 2015. Monthly rates used to translate transactions are available on www.ericsson.com/thecompany/investors

NUMBER OF EMPLOYEES

2016 2015

End of period

Mar 31 Dec 31 Sep 30 Jun 30 Mar 31

North America

14 081 14,548 14,669 14,975 15,156

Latin America

9 836 10,412 10,754 10,823 10,970

Northern Europe & Central Asia 1)

20 167 20,700 20,953 21,441 21,556

Western & Central Europe

12 100 12,220 12,042 12,400 12,575

Mediterranean

12 906 12,702 12,748 12,925 13,363

Middle East

3 608 3,639 3,634 3,717 3,813

Sub Saharan Africa

2 377 2,301 2,306 2,389 2,442

India

22 424 21,999 21,343 21,353 21,215

North East Asia

13 623 13,706 13,782 13,104 13,488

South East Asia & Oceania

4 178 4,054 4,009 4,056 4,128

Total

115 300 116,281 116,240 117,183 118,706

1) Of which in Sweden

16 290 17,041 17,242 17,560 17,569

29 Ericsson | First Quarter Report 2016

RESTRUCTURING CHARGES BY FUNCTION

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Cost of sales

-328 -282 -351 -1,157 -484

Research and development expenses

-257 -305 -547 -1,118 -51

Selling and administrative expenses

-47 -117 -80 -469 -79

Total

-632 -704 -978 -2,744 -614
2016 2015

Year to date, SEK million

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Cost of sales

-328 -2,274 -1,992 -1,641 -484

Research and development expenses

-257 -2,021 -1,716 -1,169 -51

Selling and administrative expenses

-47 -745 -628 -548 -79

Total

-632 -5,040 -4,336 -3,358 -614

RESTRUCTURING CHARGES BY SEGMENT

2016 2015

Isolated quarters, SEK million

Q1 Q4 Q3 Q2 Q1

Networks

-295 -259 -565 -1,842 -173

Global Services

-315 -213 -358 -691 -419

Of which Professional Services

-237 -60 -316 -175 -140

Of which Network Rollout

-78 -153 -42 -516 -279

Support Solutions

-22 -230 -37 -194 -19

Modems

1 -1 -12 -3

Unallocated

-3 -17 -5

Total

-632 -704 -978 -2,744 -614
2016 2015

Year to date, SEK million

Jan-Mar Jan-Dec Jan-Sep Jan-Jun Jan-Mar

Networks

-295 -2,839 -2,580 -2,015 -173

Global Services

-315 -1,681 -1,468 -1,110 -419

Of which Professional Services

-237 -691 -631 -315 -140

Of which Network Rollout

-78 -990 -837 -795 -279

Support Solutions

-22 -480 -250 -213 -19

Modems

-15 -16 -15 -3

Unallocated

-25 -22 -5

Total

-632 -5,040 -4,336 -3,358 -614

30 Ericsson | First Quarter Report 2016

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Report of foreign issuer [Rules 13a-16 and 15d-16] - April 21, 2016