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Third quarter report 2021 Stockholm , October 19 , 2021 Third quarter highlights Group organic sales declined by -1 % YoY . Sales in Mainland China in Networks and Digital Services declined by SEK -3.6 b . impacting the growth rate by -6 % . Some impact was seen from disturbances in the supply chain . Reported sales were SEK 56.3 ( 57.5 ) b . Gross margin excl . restructuring charges improved to 44.0 % ( 43.2 % ) mainly driven by increased and partly retroactive IPR revenues and the acquired Cradlepoint business . Operational leverage continued to be strong in Networks . Reported gross margin was 44.0 % ( 43.1 % ) . EBIT margin excl . restructuring charges increased slightly to 15.7 % ( 15.6 % ) . Reported EBIT increased to SEK 8.8 b . ( 15.7 % ) from SEK 8.6 b . ( 15.0 % ) . EBIT was supported by a market revaluation of investments and an impairment write - off , amounting to SEK 0.4 b . Organic sales development in Networks was stable YoY . The quarter was impacted by market share loss in Mainland China . Reported EBIT margin was 23.7 % ( 22.0 % ) . Reported net income was SEK 5.8 ( 5.6 ) b . Free cash flow before M & A was SEK 13.0 ( 3.9 ) b . driven primarily by strong cash collection . Net cash per September 30 , 2021 was SEK 55.7 b . compared with SEK 41.5 b . per September 30 , 2020 . SEK b . Net sales Investor Update ( Nov. 9 ) will be postponed into next year with the intent to host a full - day , in - person CMD with the entire executive management present . Sales growth adj . for comparable units and currency ¹ Gross margin ¹ EBIT EBIT margin ¹ Net income EPS diluted , SEK Measures excl . restructuring charges ¹ Gross margin excluding restructuring charges EBIT excluding restructuring charges EBIT margin excluding restructuring charges Free cash flow before M & A Net cash , end of period Q3 2021 56.3 1 Ericsson Third quarter report 2021 44.0 % 8.8 15.7 % 5.8 1.73 44.0 % 8.8 15.7 % 13.0 55.7 Q3 YoY 2020 change 57.5 -2 % -1 % 43.1 % 8.6 15.0 % 5.6 1.61 43.2 % 9.0 15.6 % 3.9 41.5 2 % 4 % 7 % -1 % 229 % 34 % Q2 2021 change 54.9 2 % 43.4 % 5.8 10.6 % 3.9 1.10 43.4 % 5.8 10.6 % 4.1 43.7 ¹ Non - IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statements . QoQ Jan - Sep Jan - Sep 2021 161.0 2020 52 % ERICSSON 48 % 57 % III 52 % 218 % 27 % 43.4 % 19.9 12.4 % 12.8 3.79 43.5 % 20.0 12.4 % 18.6 55.7 162.8 40.2 % 16.8 10.3 % 10.4 3.00 40.7 % 18.1 11.1 % 9.5 41.5 YOY change -1 % 6 % 19 % 23 % 26 % 10 % 96 % 34 %