Supply - Evaluation of strategic opportunities concluded, upside from continued development deemed to be significant
- Focus is now on developing and transforming Red Bee Media, to enable its full potential as an independent media services business
- Performance improvement and legal separation initiatives implemented in 2017, continue in 2018
On March 28, 2017, Ericsson (NASDAQ:ERIC) presented a focused business strategy and stated that the company will explore strategic opportunities for Red Bee Media, to enable the business to scale and succeed in the evolving media landscape.
Ericsson has now concluded the evaluation of strategic opportunities and has decided to remain as the owner and continue to develop Red Bee Media as an independent and focused media services business. Ericsson has evaluated different opportunities, including partnerships, divestments, and a continued in-house development, based on the value they generate for Ericsson.
During 2017, Ericsson has successfully been running a performance improvement program for Red Bee Media, and significant progress has been made, both in operational efficiency and cost savings. This has given increased freedom in choosing the most value creating option for the business.
The performance improvement work has included a legal separation of the broadcast and media services business, tactical and transformational initiatives, clarified positioning and the adoption of the Red Bee Media brand.
With the improvements carried out during 2017, and a new business plan with the underlying customer needs as well as market and technology trends, Ericsson sees potential and future upsides to Red Bee Media.
Steve Nylund, CEO, Red Bee Media, says: “Red Bee Media is already today a leading broadcast and media service provider, with a strong customer base among the top tier broadcasters and service providers. Our focus is now on improving and transforming Red Bee Media, in partnership with our customers, to enable our full potential as an independent and focused media services business.”
Full Year 2017 adjusted operating income* for Red Bee Media was SEK -0.3 b. Full year revenues were SEK 2.5 b. Though still negative, the Q4 2017 adjusted operating income for the Red Bee business was significantly improved year on year, driven by cost and efficiency improvements. The Red Bee Media business will continue to be reported in segment Other.
About Red Bee Media
Red Bee Media is a leading global media services company with more than 2500 media service and broadcast experts primarily based out of 11 main service hubs around the globe. Every day, people on all continents watch television programs prepared, managed and broadcast by Red Bee Media staff. Every year, the business delivers more than 2.7 million hours of programming in more than 60 languages for nearly 600 TV channels. The Managed OTT service has more than 340 channels and over 20 000 live programming every week. Its content discovery portfolio spans more than 10 million movies and program titles, covering over 25 languages, and includes an image database covering over 90 percent of all programming available across traditional TV, video on demand (VOD), subscription video on demand (SVOD). It provides over 230,000 hours of captioning each year – more than 100,000 hours of which is live.
*Excluding corporate allocations, restructuring charges and certain other items impacting comparability. Please see Ericsson Q4 2017 earnings report.
NOTES TO EDITORS
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Ericsson is a world leader in communications technology and services with headquarters in Stockholm, Sweden. Our organization consists of more than 111,000 experts who provide customers in 180 countries with innovative solutions and services. Together we are building a more connected future where anyone and any industry is empowered to reach their full potential. Net sales in 2016 were SEK 222.6 billion (USD 24.5 billion). The Ericsson stock is listed on Nasdaq Stockholm and on NASDAQ in New York. Read more on www.ericsson.com.
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