TIDM61QS
RNS Number : 5766M
Telefonaktiebolaget Lm Ericsson
12 January 2023
Ericsson makes provision in fourth quarter of 2022 in relation
to potential DPA breach resolution with U.S. Department of
Justice
Ericsson (NASDAQ: ERIC) announces that it is now in a position
to make a provision of SEK 2.3 billion (approx. USD 220 million) in
relation to a potential resolution with the U.S. Department of
Justice (DOJ) regarding previously announced, non-criminal, alleged
breaches under its 2019 Deferred Prosecution Agreement (DPA).
Ericsson has not reached a resolution with the DOJ regarding these
alleged breaches and discussions are ongoing.
This charge, which will be booked in the Company's fourth
quarter 2022 financial results, will be SEK 2.3 billion (approx.
USD 220 million). The Company believes that this is a sufficiently
reliable estimate of the financial penalty associated with any
potential breach resolution, and this provision also includes
estimated expenses for the previously announced extended
monitorship. The provision will be booked as Other Operating
Expenses in the income statement of Segment Other.
The Company's internal investigation and its cooperation with
authorities in relation to the allegations in the 2019 Iraq-related
internal investigation report remain open and ongoing.
Since 2019, Ericsson has taken significant remedial measures,
overseen by the Board of Directors. These include enhancing its
group-wide approach to risk management and strengthening its
compliance program and internal controls. The Company agreed in
December 2022 to extend its independent compliance monitorship
until June 2024 to further our efforts to embed best-in-class
compliance, risk management and internal controls frameworks across
the organization.
Background
In 2019, Ericsson entered into the DPA in order to resolve past
(prior to 2017) Foreign Corrupt Practices Act (FCPA) violations
relating to misconduct in certain countries. The 2019 agreement
provided that, in the event of any breach of its ongoing DPA
obligations, the Company could be prosecuted for the historic FCPA
violations covered by the DPA.
As announced in October 2021 and March 2022, the DOJ notified
Ericsson that it failed to provide documents and information to the
DOJ in a timely manner and did not adequately report to the DOJ
certain information relating to a 2019 Iraq-related internal
investigation.
The DOJ has not alleged or charged Ericsson with any new
criminal misconduct since the start of the DPA.
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MORE INFORMATION AT:
Ericsson Newsroom
media.relations@ericsson.com (+46 10 719 69 92)
investor.relations@ericsson.com (+46 10 719 00 00)
Contact person
Peter Nyquist, Head of Investor Relations
Phone: +46 705 75 29 06
E-mail: peter.nyquist@ericsson.com
Additional contacts
Stella Medlicott, Senior Vice President, Marketing and Corporate
Relations
Phone: +46 730 95 65 39
E-mail: media.relations@ericsson.com
Media
Kirsty Fitzgibbon, Vice President, Head of External Relations,
acting
Phone: +46 730 95 81 57
E-mail: media.relations@ericsson.com
Kristoffer Edshage, Head of Financial and Regulatory
Communication
Phone: +46 722 20 44 46
E-mail: media.relations@ericsson.com
Media Relations
Phone: +46 10 719 69 92
E-mail: media.relations@ericsson.com
ABOUT ERICSSON:
Ericsson enables communications service providers and
enterprises to capture the full value of connectivity. The
company's portfolio spans the following business areas: Networks,
Cloud Software and Services, Enterprise Wireless Solutions, Global
Communications Platform, and Technologies and New Businesses. It is
designed to help our customers go digital, increase efficiency and
find new revenue streams. Ericsson's innovation investments have
delivered the benefits of mobility and mobile broadband to billions
of people globally. Ericsson stock is listed on Nasdaq Stockholm
and on Nasdaq New York. www.ericsson.com
Forward-looking statements
This release includes forward-looking statements, including
statements reflecting management's current views relating to the
growth of the market, future market conditions, future events,
financial condition, and expected operational and financial
performance, including, in particular the following risks and
uncertainties:
- Our ability to reach a mutually agreeable resolution with DOJ
regarding alleged DPA breaches
- Any such potential resolution could involve a financial
penalty that differs materially from the provision
- Our ability to reach a full and final resolution that covers
all past conduct, including allegations of past conduct in Iraq
- Our goals, strategies, planning assumptions and operational or
financial performance expectations
- Industry trends, future characteristics and development 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 expenditures
- The ability to deliver on future plans and to realize
potential for future growth
- The expected operational or financial performance of strategic
cooperation activities and joint ventures
- The time until acquired entities and businesses will be
integrated and accretive to income
- Technology and industry trends including the regulatory and
standardization environment in which we operate, competition and
our customer structure.
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including any underlying assumptions, are forward-looking
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We caution investors that these statements are subject to risks
and uncertainties many of which are difficult to predict and
generally beyond our control that could cause actual results to
differ materially from those expressed in, or implied or projected
by, the forward-looking information and statements.
Important factors that could affect whether and to what extent
any of our forward-looking statements materialize include, but are
not limited to, the factors described in the section "Risk Factors"
in the latest interim report, and in "Risk Factors" in the Annual
Report 2021.
These forward-looking statements also represent our estimates
and assumptions only as of the date that they were made. We
expressly disclaim a duty to provide updates to these
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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 exchange regulations.
This information is information that Telefonaktiebolaget LM
Ericsson is obliged to make public pursuant to the EU Market Abuse
Regulation. The information was submitted for publication, through
the agency of the contact person set out above at 2:00 pm CET on
January 12, 2023.
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END
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(END) Dow Jones Newswires
January 12, 2023 08:27 ET (13:27 GMT)
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