Telebriefing: Ericsson Media and the Microsoft Mediaroom acquisition

Fourth quarter report 2012


Fabrizio RossiniHead of investor relations

3 Fourth Quarter 2012 Report

Safe harbor

This presentation contains forward-looking statements that involve inherent risks and

uncertainties. We have identified certain important factors that may cause actual results

to differ materially from those contained in such forward-looking statements.

In particular, the forward looking statements contained in this presentation and the fourth

quarter 2012 closing are based on a going concern assumption. In the month of

December 2012 ST-Ericsson’ shareholders issued press releases about their future

intent with respect to ST-Ericsson, on December 10 by STMicroelectronics and on

December 20 by Ericsson. Please consider this presentation in conjunction with this

information.

For a detailed description of risk factors see STMicroelectronics’ (NYSE:STM) and

Ericsson's (NASDAQ:ERIC) filings with the US Securities and Exchange Commission,

particularly each company's latest published Annual Report on Form 20-F.


Didier Lamouche President and CEO


Transforming our company

Solid execution in 2012 in line with the transformation roadmap

Products• Clear market

strategy• Focused portfolio

approach• Differentiation

Customers• Engage with market

shapers• Diversification

Company Organization• Execution• Simplicity• Speed • Focus

Culture• From technology focus

to customer focus• Sustainable profitability• From brilliant ideas to

products delivered on time













Focused roadmap

Application processor partnership













Focused roadmap


Featurephones













Focused roadmap


Featurephones

Activities consolidated from 44 to 31 sites













Focused roadmap


Featurephones

Activities consolidated from 44 to 31 sites

LTE final stage certification & customer test

FD-SOI













Recent external developments increase the level of uncertainty going forward


NovaThor launches 2012

Via

U8500

Samsung

Galaxy S Advance

Sony

Xperia Sola

Sony

Xperia P

Sony

Xperia go

Samsung

Galaxy Ace2

Samsung

Galaxy Beam

Motorola

XT760

ShandaBambook

S1

OntimWP8500 Tablet

Sony

Xperia U

YulongCoolpadCP7728

HTCOneSC

HTCOneST

HTCOneSU

LenovoLePhoneS899t

mMaxTablet+Phone

Accelerating TTM

HTCT329T

SamsungGalaxy S III

mini


Portfolio execution

∙ Thor M7400 – LTE multi-mode

∙ Certification nearing completion

∙ Extensive field testing ongoing

∙ Market ready

∙ NovaThor L8540 – integrated LTE ModAp

∙ Sampled and testing with customers

∙ Ready for market mid 2013

∙ NovaThor L8580 – FD-SOI integrated LTE ModAp

∙ First samples in December

∙ Breakthrough nature of technology confirmed

∙ Fastest and lowest power mobile processor


NovaThor™ L8580 Faster in the real world

0,6 0,8 1 1,2 1,4 1,6x times slower

Video transcoding beforeYouTube upload

Full HD HD 720p

L8540 – Dual A9 1.85GHz

Product A - Quad A9 1.5GHz

Product C - Quad A9 1.4GHz

Product B - Quad Krait 1.5GHz

L8580 – eQuad 2.5GHz

x1.2 slower

x1.4 slower

x1.6 slower

Lower is better

Faster

Faster processors (not just more cores)

means faster apps


FD-SOI Transistor

Bulk Transistor

Transistor innovation

Buried gate

Top gate

Buried Oxide (BOx)

Source DrainGateSource Drain

FD-SOI

Smart body biasing

Ultra-Thin buried oxide layer

Vertical double-gatetransistor

Ultra-Thin Channel

Cooler


NovaThor eQuad

Vertical Double Gate Transistor

High Performance modeTop Gate voltage

High Performance mode Back biasing

Low power modeTop Gate voltage

Low power modeBack biasing

Simpler

16 Fourth Quarter 2012 ReportFourth Quarter 2012 Report16

Q4 Revenues∙ $358 million in line with outlook provided

∙ NovaThor ModAp platforms continue to grow as largest revenue segment with 10.7 million units shipped

∙ Feature phones and legacy about 35% of total

∙ Revenues included $43 million from licensing (vs. $35 million in Q3)

∙ Very significant sequential decline in net sales due to:∙ Q1 seasonality∙ No licensing revenues expected∙ Further decline of legacy product

∙ Double digit YoY growth excluding former largest customer

MUnits MUSD

NovaThor shipments up 45% vs. Q3

1,3

5,3

7,4

10,7

0

100

200

300

400

500

600

700

0

1

2

3

4

5

6

7

8

9

10

11

12

Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312Q412

ModAp platforms MUnits Revenue MUSD

Q1 Outlook

17 Fourth Quarter 2012 ReportFourth Quarter 2012 Report17

Financial Overview∙ Net sales $358 million, flat vs Q3

• Execution of cost transformation initiatives ahead of plan:

• About 1,600 resources, 26% reduced

• $53 million savings vs. Q4 2011

• Operating loss continued to reduce : $15 million reduction sequentially; $164 million or 55% since Q1 2012

• -$152 million net operating cashflow

• Recapitalization during Q4 by shareholders waiving $1.54 billion of loans

$ million 2012Q4

2012Q3

2012Q2

2012Q1

DeltaQ4 vsQ3

Net sales 358 359 344 290 (1)

Adjusted Operating income/(loss)*

(133) (148) (235) (297) 15

Net operatingcashflow

(152) (146) (249) (159) (6)

Adjusted operating income/(loss)*

*:.Adjusted Operating Income/(Loss) is a non-GAAP measure. Please refer to the press release for details.

$ million

Continued reduction of losses thanks to solid execution of plans

0,6

0,7

0,8

0,9

1

Q4 09 Q4 10 Q4 11 Q4 12

OPEX indexed to Q1 2009


2012

Redefined the scope of the company• Focused resources on modem and ModAp system integration while

partnering on key technology blocks

• Consolidated our R&D to a smaller number of sites

Aggressive transformation of our cost structure …• Put in place the right organization to deliver with sense of urgency

• Reduced cost and operating losses faster and to a greater extent than planned

.. While improving our product delivery capabilities• Great market traction for our first generation of NovaThor platforms, with

more than 20 devices successfully launched

• Our first LTE NovaThor platforms and Thor modems ready to hit the market in 2013

• Sampled our next generation FD-SOI silicon–based NovaThor as committed


Positioning for 2013

• However, we remain focused on execution of our unique assets:

• Revolutionary Thor LTE modem

• Highly integrated LTE ModAp platform

• Groundbreaking low power, high performance next generation ModAp

• Recent external developments significantly increase the level of uncertainty going forward

ST-Ericsson’s management is committed to exploring all solutions to ensure that our expertise and capabilities will continue to play a

leading role in innovation in the wireless industry

Telebriefing: Ericsson Media and the Microsoft Mediaroom acquisition

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