S&P upgrades Sweden’s Ericsson to ‘BBB-‘ with stable outlook

STOCKHOLM: S&P said on Wednesday it has upgraded its credit rating on telecom gear maker Ericsson to ‘BBB-‘ with a stable outlook following a solid improvement of free cash flow.

S&P, whose previous rating on the Swedish firm was BB+, said the stable outlook reflected expectations that Ericsson would post low-single-digit revenue growth, and maintain its adjusted EBITDA margin at 12% to 14%.

“We expect Ericsson’s annual reported free operating cash flow after lease payments will increase to about 10 billion Swedish crowns in 2020, compared with about 4 billion annually from 2016-2018,” S&P said in a statement.