Welcome to the Ericsson's Analyst and Media Conference Call for the Third Quarter Report. To view the visual aids for this call, please log on to www.ericsson.com/press or www.ericsson.com/investors. (Operator Instructions). As a reminder, a replay will be available one hour after today's conference. Peter Nyquist will now open the call.

Okay. Thank you, operator, and hello everyone, and welcome to our call today. With me here today, I have our President and CEO, Hans Vestberg; our CFO, Jan Frykhammar; and our Head of Communication, Helena Norrman. During the call, we will be making forward-looking statements. These statements are based on our current expectations and certain planning assumptions which are subject to risks and uncertainties. The actual result may differ materially due to factors mentioned in today's press release and discussed in this conference call. We encourage you to read about these risks and uncertainties in our earnings report, as well as in our Annual Report. With those words, I would like to hand over to you, Hans.

Thank you very much, Peter. Let me start with a little bit of the market development in the quarter. And this of course my feeling after having both being out in the field and met the local customers and it just continue to be accentuated what's happening in the networks, its more data, more video, things are happening in the networks, more connectivity, new devices, and industry using the networks, and all that leads to that the network the company differentiate them more and more. And of course the discussions we have with operators very much about capacity enhancement, small cells to meet the agency that's you can actually give a very good consistent experience and that's the roar and we can definitely see that moving. Other thing in the market of course China going full steam ahead on 4G. We clearly see that that's happening. And on top of that we can also see that many transformation; we have talked about these transformation. They are going from ICT, ICE transformation, even media versus agent; all of those are either in planning phases or in execution in order to be able to handle data and use revenues streams or service streams. All this is creating not only a demand on software's but also on system integration. And in our case that's a very labor intensive business; you need to have project leaders, solution architects, consultants, et cetera. And that's very important to remember. Finally, I mean on the market development, we saw in the quarter that some of the operators in North America slowed down their investment basically due to focus on cash flow optimization. It has to be added that consumer demand, the innovation in North American market remained very, very exciting. We see new phones coming out, new…

Yes. Hello everyone. So let me then comment a bit on the P&L and balance sheet. So the first point I want to make on the P&L is of course to look at the gross margin over the last four quarters that has been establishing itself on a much better level than a year ago for the reasons that we have been explaining many times. The most important one obviously, being the business mix, more capacity than what we used to have a few years ago with a lot of coverage but also, of course the European modernization projects back then. Also, we have the increased revenues from the licensing business on patterns, slightly lower global services share this year, as well as lower restructuring charges. But overall, we are operating the company on a higher level of gross margin for the last four quarters. We had then also a decline, sequentially meaning then compared to the second quarter for the reasons that Hans mentioned. We have started to see bit more business mix in regards to these new projects or contract. Of course, China would be an example of that 4G but also other contracts have just the ones in Taiwan and so forth. But I think what is important here is of course that we know and you know the dynamics of the business. We also have slightly lower share of capacity sales in North America this quarter for the reasons that Hans have already mentioned. If when I look at the operating expense so in the third quarter of last year, which is what we compare with here we still did not have the Modems business in-house. We did not have the Mediaroom business in-house. They are -- they both of them came in, in the fourth…

Thank you, Jan. Let's then look into the segments starting with Networks. Networks then growing 13%, of course some tailwind here as well on the currency but still 7% when you take away the currency impact and any potential acquisitions we have there. That's a strong quarter from Networks in terms of growth. A lot of happenings in the quarter, I talked about the small cell. We also had continued good momentum for SSR and I said here we have done the Apcera investments. Same market that is growing here also I talked about in the beginning Middle East, China, India, et cetera. We can add we see a good growth IMS driven by the voice-over-LTE, the VoLTE implementations that is undergoing in the market. Profitability wise, this quarter above double-digit operating margins and of course this is all included with both amortizations and depreciations so this is full P&L for networks. And here of course as Jan said the majority of the unrealized hedge contracts that we have revaluated is in networks so of course that SEK 0.8 billion negative networks. So the gradual improvement that we're seeking for, we are seeing here and we have growth in networks as well. Services. We have talked about services in two dimensions. We had a good funnel and lot of activities in professional services first half year, now we see that rolling as sales. And we grew 10% of professional services of course fueled by managed services growing above 20% in the quarter. So and that was contracted that of course we saw coming in already in the first half year now we are executing. The same goes for system integration. On the other hand we see Network Rollout declining that's also as we have expected given that they have been…

Okay. Thank you, Hans, and operator we are now open for questions so please.

Ladies and gentlemen, at this time, we will begin the question-and-answer session. (Operator Instructions). Our first question is coming from Edward Snyder from Charter Equity Research. Please go ahead sir.

Thank you very much. Hans you mentioned two new products that you talked about the beginning of the year that are now on the mix. What should we think about in terms of gross margin profile for these are they actually consolidated average, and do you consider them to be material in to the revenue impact on networks now, and if now, when will it be and then maybe you could also walk through what you think the mix will look like in the next coming quarters you've got North America slowing down here and China building out it sounds like rollouts may pick up there. And then Hans you only provider IPR revenue on an annual basis but is it fair to assume that its relatively evenly distributed over the quarters or is it more heavily weighted to one quarter or the shipments of some of your licensees? Thanks a lot.

I can with IPR and Jan will take the other. I mean normally it's of course fairly evenly spread out, it depends a little bit how the performance is on the markets as matter is attached to the mobile handset industry. But remember last year that was not evenly spread because we had the Samsung coming in, in the fourth quarter I think that's good to remember. That of course was not evenly spread. We had quite a big money coming into the fourth quarter so was not evenly spread but normally its fairly evenly spread but of course contracts coming in and out can of course change that but our plan is to have a gradual improvement here and have it evenly spread out.

Okay. On those contracts and that you referred to Ed they are in the mix as we speak now in the third quarter. And if you remember then we gave some examples such as the wins in Taiwan they are in the mix. We gave examples such as the Vodafone Spring initiative and so forth that's also in the mix. So I think what you have to think about when it comes to the fourth quarter is really two main things or three main things, one being the fact that typically in the fourth quarter we typically have a lot of project completions. So if you look historically the share of network rollout of the total picture of Ericsson in terms of sales typically is higher in the fourth quarter. So I think that's one thing to be aware of. Secondly of course the slowdown in capacity business somewhat at least in North America has impacted Q3. The command is of course there because it is a short-term uncertainty also for Q4. And then the final point is of course that as Hans said last year we had initial payment of Samsung in the third quarter. And then of course it's the dollar versus SEK stays on the level we have we will also continue to have some tailwind from currency in the fourth quarter. So those are the main points I think that you need to be aware of.

Next question is coming from Mark Sue from RBC Capital Markets. Please go ahead.

Thank you, good morning. If I looking it at a high level your ability to improve margins and increase cash flow is predicated on your ability to grow revenues in your most profitable regions. Now the carriers in these regions seem to be focused on improving their cash flow. So their incentive is always through reduced CapEx. As we think about next year and the future, are there considerations to align the incentives for the carriers and for Ericsson, other words do something different so it's not a constant tug of war so that both companies both Ericsson and the service provides can improve their margins and both can improve their cash flows?

I think, let me talk from another angle. I mean I think you're making an assumption that we would not tend to agree with, meaning that margin profile for us depends on type of projects, not type of markets. I think that is an assumption that we probably know. So then the question becomes a little bit hard to answer. I mean if we have a coverage project that by design has the lower volume because it's more hardware going out, which has a lower margin and of course usually in a more competitive environment one. Then of course if we have capacity, and capacity is the same where we are, a high degree of software. So I think that's a little bit how we see. And then of course your question about cash flow optimization how we can work together with operators in that. I think that we do it all the time to try to support I mean in their transformations in a good way. But again I mean it's nothing strange -- I mean -- I wouldn't play up sort of what we see in North America right now if it wasn't that North America such a significant portion of our business and I think that's what we are, that's why we tell what will happen in the second quarter. But again there is no change to our position in North America; there is no change to underlying consumer demand in North America. But that type of things happens and I don't think it's much dramatic into its bonus. I think that's the underlying demand therefore mobility, broadband, and cloud, and probably what is the most innovative technology markets in the world at the moment.

And just one quick follow-up, is there a way to move it from less of a CapEx discussion in the future to possibly an OpEx discussion for the carriers?

I think so and if you follow that way our last industry event where we talked about our new software models. Of course software models in the future will be different ways how you can buy that. I mean, ideally you would do a software buyout earlier or you can buy it as the capacity or you can buy it all the time. We have different models and think about that all transformation is going pretty quickly into software. I mean already right now the majority of all of our R&D is into software and of course the solutions we're selling have much less hardware. So that's why we have the industry events for a couple of weeks ago when we launched both our new software and the way we are working with it in the pricing transformation. So yes there are going to be ways for carriers to decide how they want to acquire or buy software from us in the future that will have different impacts for them.

That's all, thank you. Good luck gentlemen.

Next question, please.

Next question is from Sandeep Deshpande from JP Morgan. Please go ahead sir.

Thank you for letting me on. I have two quick questions if I may; Hans your margin is in the network business is now been for a few quarters above the 10% level. Where do you think that margins in networks for Ericsson should be in the midterm as such and so where is the target for the company? And then you've been acquiring a whole bunch of companies which are reported I think, much of them in the support solutions business, you see the revenue growth there but the margin there has I mean modeling it or what the margin is going to be and how we should be looking at support solutions may be you can help us on that?

I mean when it comes for the network business we're working constantly gradual improvements. We have now executed on that for five consecutive quarters and we are only 11%. And then of course the unrealized hedge contracts impacted heavilier as well on that for us. Of course we are all on an (inaudible) of improving. We are not giving any final guidance. But I think well this is important there I remember also we have a fully loaded P&L for networks. There is no allocations outside, depreciation is included. So you can see on a detailed level that if you take weighted depreciation we are gaining some 3% to 4% more on bottom-line in the networks business. So networks just continue to do gradual improvement there. I think that's what we're seeking but quarters may go up and down but long-term we are constantly working on that. On the support solutions, yes, we are now coming to a breakeven level, even though we have the growth we are all in that transition between the legacy portfolio and the new areas. And of course ultimately this should be a good business for us and that's what we are sort of driving for and taking the leadership here. One need to remember that when we drive the support solution business, well we're driving equally much in services, and you see a growth right now 10% on professional services, part of that's driven from the support solution contract although OSS/BSS transformation, T.V. and media transformation as well. So one need to look a little bit more holistic on the whole support solution business in order to see what we're driving here. But still we are not satisfied with it being a breakeven on support solutions we are of course striving for much better.

Thank you.

Thanks, Sandeep. And next question please.

Next question is from Stuart Jeffrey from Nomura. Please go ahead.

Hi, thanks very much. A quick question on OpEx and restructuring, restructuring in particular I was wondering in a very low level compared to history of an 0.4% of revenue. Could you just talk about whether that sort of the level that you hope to sustain going forward and related to that OpEx has taken that step change up you found that recently constant sequentially but are you happy with your OpEx structure environment, is there more to come and should we factor in some high restructuring charges as you try to perhaps moderate your OpEx numbers? Thanks.

Oh, Stuart, I guess that's a question for me. I think if we start with the first question around restructuring for Q3 and Q2 and Q1 versus the full year and so forth I think what we have is, we have typically little bit backend loaded in terms of restructuring charges predominantly related them to the service delivery transformations. So I think for Q4 we work on a slightly obviously we think that there will be a small increase or a slight increase in restructuring charges because of that simply. Then when you think about the overall operating expense level so what I meant when I said that we have the organic investment in the social development that or now on the run rate that is okay to model with that is of course then helping you to model the OpEx for the full year. Typically we have actually a seasonality impact in OpEx in Q3. So typically operating expense is slightly lower in the third quarter compared to the second quarter and here you see a flattish scenario. So for me that's really an increase to be honest with you. So I think that there will be a seasonal uptick in operating expense this year but it will be easier to compare in the fourth quarter because then we had the Modem business inside Ericsson and the Mediaroom business inside Ericsson and so forth. So there will be a little bit of a seasonality impacting Q4. If we look going forward on efficiency and so forth and restructuring related to continuous inefficiencies, I mean we work with proactively to identify efficiencies all the time. I think we will come back and talk a little bit more about our agenda in terms of efficiency when we meet at the Capital Market Day. And then, as we always try to do, when we have the January meeting there on the Q4, we can give some more color to what we think the restructuring level will be for the year. So that's the plan I think.

Thanks.

Okay. Next question please, operator.

Next question is coming from Francois Meunier from Morgan Stanley. Please go ahead sir.

Yes. It's actually Francois Meunier from Morgan Stanley. Yes. Question may be in a bit with your cloud strategy and how do you see virtual network strategy impacting your Packet Core and your Voice/Packet Core business, which I think government is still quite profitable as this is moving to more software and less hardware? And what's going to be the impact potentially on your profitability and what do you think you're investing in these two to protect your profitability?

Okay. Well, of course, I mean let me take you on a little bit longer journey. I mean, already 2010 when we started to look into our hardware platforms and software platforms, I know we had probably some 35 different hardware platform, more than 20 different software packs. When we try then to bring that down, also while our acquisitions, we of course then saw we had three hardware platforms and very few software packs. In that work, we came up with a component based architecture that enables to virtualize our products. So that has been an ongoing work from us from 2010. And basically around 2015, all our product except the rate technology really (inaudible) virtualize if user want. They can be disconnected between hardware and software. So we are already prepared for that so that's number one. We are not prepared for that technology revolution.

Yes.

Secondly, your question is of course when will it happen and what will -- I think we're going to see it rising. I mean, we are obviously selling, restructuring the core element, the billing element, that's normalized. And that's also including an estimation (inaudible) in the media. The other part of the answer of course, I think from the base centers especially with our service organization to consolidate that. And on top of that of course the more different things that will happen a little bit in the future, I have to say, that's of course the connectivity between the enterprise level and telecom level. And then, of course, Sierra (inaudible) connecting together where up Sierra will talk with members of the enterprise, well how is the data security and characterization there but that will -- all the time going to the telecom network side. I think we are in early stages. I think we are well prepared as you mentioned and we will deliver on that. But remember that pretty big transformation for our customers to go from a sort of a verticalized network structure to a horizontalized network structure, and but we will be there with the product and our service engineers that we can do with. So let's see how fast it goes. But it's nothing that we should feel worried about. We see more and there is a great opportunity given our competitor area.

Right. Thank you, you answered. The point is that, I think there is someone else on the line and it's very difficult to answer your question. So to listen to your question, so probably we will ask again at the Analyst Day.

And this is a scenario that we will cover. We will cover more in depth the targeted areas as we call them OSS/BSS, IP, Cloud, T.V. and Media, and industry and society, we will cover them in more exempt at the Capital Markets Day. We usually don't have time for that on our earnings call, but that's going to be one of the important things to cover during the Capital Markets Day.

Thank you.

Thanks, Francois. Next question please.

Next question is from Achal Sultania from Credit Suisse. Please go ahead.

Hi. Thanks for taking my questions. So Hans, if I look at the gross margin structure for the industry, we had 2011 and 2012 where we had -- we were operating at about 32%, 33% gross margins. Now we've seen a step-up towards 35%, 36%. Is it fair to say that all of that improvement is basically being driven by project mix or is it also somewhat impacted by somewhat more rationale pricing environment from competition? And then, I've got a follow-up on Middle East.

Now, the gross margin had so many dynamics in them but you mentioned some of them. And of course, the mix is one. Efficient improvement, pricing is two others. The third one in our case of course, how services is playing against the networks business. I mean increasingly, service has a lower gross volume and that has grown in the last couple of years. But I will comment, last year, I think we're up to 42%, 43% for a total turnover in media and services. So we are seeing sales bringing it down that is not negatively. I mean that gross volume goes down because of services, it's not negative. Because as a total different OpEx structure than our networks business. But then, as I said, the mix has been changed when we were investing in market share in the beginning of the cycle. And of course, also we are working efficiencies and that's why we see it gradually coming up. But there is lot of dynamics in this. So it's a little bit hard to generalize over long time, because some is going against and some is going for us on the gross volume. And for us, of course gross volume is important but for each and every segment it's very important. Finally, it's about improving our bottom-line that we are looking on there, the gradual improvement on bottom-line.

Right. And then may be a follow-up on Middle East and India, we saw very strong growth in Middle East this quarter. And India has been strong for the last few. Can you just give us some color on what kind of projects, is it like more coverage projects or capacity projects that you are doing in these regions? The reason I'm asking is about the sustainability of these, the growth in these regions going forward.

If you then take me to the East that's a bit of mix depending on where in Middle East you are. There are for sure very advanced cities that has started to deploy 4G but the main driver of the business in Middle East continues to be 3G, where you have coverage. But also, in certain area some capacity on 3G depends a bit on where you are, if you are in Saudi or in UAE and so forth, right. But then -- so that's kind of -- it's the way. It's very much the basic mobile broadband business that is building their momentum in Middle East. Despite the fact, I should say that we have also buckets of countries that have been slow for few years, like Egypt as an example, driven of course by some lack of hard currency and also quite slow business in Turkey. So I think Middle East, as I typically say, it's fantastic to see the growth and it's the growth in mobile broadband here despite that we have some slow misdeal in some other markets.

Thanks a lot.

Next question please, operator.

Next question is coming from Simon Leopold from Raymond James. Please go ahead.

Thank you very much. I wanted to come back to the North American market trend and really two parts. One degree is the decline that you experienced sequentially in the September quarter to what degree was that a surprise versus your expectation. And then in terms of the behavior that you saw that caused the slowness, what's your feeling of the duration. Is this a very temporary measure? How much does it affect the fourth quarter and how much does it affect 2015. Thank you.

That's a good question, very hard to answer.

I think can I start and Hans talk about scientific in a bit. But I think so the nature of the capacity business is that we have very short order cycles. There are pros and cons as we've talked many times about coverage and capacity. The good thing with coverage is obviously that it's typically very long project, very much often involving site acquisition and site fills and so forth, which means that we have longer planning horizons and that's a visibility. Capacity is shorter orderly times in many cases it's about obviously shipping the latest software release or supporting the operators with the capacity to fill in some hardware point of view. So there are obviously lesser margin profile on capacity but also little bit more shorter among uncertainty. So I think that's the most important thing for you to know that capacity is great but it could be three, four weeks of orderly time not more than that. I think on 2015, then Hans.

Yes, no, I wasn't planning plans on 2015, I would just say that for certain reason of course, I mean this is our customer talking as well. I mean and as long as, first of all short lead time and they are communicating with the financial market. I remember there are not that many operators in North America and some of them are very big. So they are important and big for us and they have an impact as well so much this year. So but finally on any predictions on what they will do and how they will cash flow optimize, we need to let them communicate that more than and we say it so that's why we say what we're going to see this quarter and that's why Jan is saying what you're saying. So any sort of future look at what they will do with the cash flow optimization, that's not for me to comment that we need to left our customers do at this moment. But we are close to them; we are working with them constantly. So even though this lead down on much shorter in capacity we are very close with these operators.

And to what degree was the September quarter performance a surprise versus what you were thinking?

I don't think it's about a surprise or not. I think that beyond that capacity, it can be acquired very quickly and filled in very quickly. So you have to be prepared for that type of things happening and that's happening all the time for us. Is you stat in general, we can balance it out between regions, between customers et cetera. Then there are of course some larger carriers in the world that can have some impact on us. But again let's look at the totality we are growing 9% in the quarter. We have other regions that are compensating. We're not deteriorating our position in North America. There is no market or consumer behavior that has changed some macroeconomics in the U.S.

Thank you.

Thanks, Simon. Next question please operator.

Next question is coming from Kai Korschelt from Merrill Lynch. Please go ahead.

Yes, hi, it's Kai. A couple of follow-ups on gross margins. One, just shorter-term I think you mentioned more project completions in Q4 and I think typically you had indicated that the average seasonality is I think down 100 basis points to 200 basis points Q4 versus Q3. Is that still the right sort of way for us to think about the gross margin? And then the second one is just slightly more mid-term obviously as you had said many times on the call capacity spending in the U.S. has been very strong, you have had a very high gross margin in the first half this year, and it also seems like you're winning more services contracts which I believe Jan, you mentioned on the press call this morning. I'm just wondering could that mean that your gross margins slowed sort of from a directional perspective, because may be this is a sort of bit more of a permanent shift in the mix or is it really just very early -- too early to tell? Thank you.

Thank you, Kai. Thank you for the question. It's Jan here. I think first and foremost we have established ourselves on a higher level, the last four quarters compared to the previous two, three years. I think we start there, it's driven by several parameters as Hans and I myself mentioned many times. If we then assume into Q4, there is typically in our business there is more of project completions that translate into more network allowed revenue. And I think that the best way to look at this is that for every percentage point increase in services share of the total revenue, typically we talk about 0.3 percentage points of impact on company gross margin. And I think that's still a relevant rule of thumb if I may say so. So I think that's -- then of course we work every day as a company to try to make good deals whether its capacity or software and so forth. But reality is that there will be a lot of project completions and the rule of thumb as I just mentioned still holds.

All right and operator we have got a message here that it seems to be someone else put on the mic, microphone that disturbs the transfer here. Please take the next question and try to fix that as well.

We will we're looking into it already. So the next question is from Pierre Ferragu from Bernstein. Please go ahead.

Hi, thank you for taking my question. So we heard a lot of comments and a lot of questions of course on your gross margin and your level of spending in OpEx. And what I'd like to do is actually to rub that off in a very, very simple question like a couple of very, very simple questions. The first one is in the long run is your aspiration to continue to expand gross margins and I'm really not talking about the next few quarters but on the -- might be a year horizon, is the way you manage the company make sure you feel confident that gross margin is going to continue to expand over time. So that's my first question. And then my second question is about your OpEx, you've been signaling a lot about like your spending level at the moment that's where you run perfect to tell, which is very encouraging. But could you confirm that we should consider that the OpEx now is at the peak? All these investments that you want to make to secure the future of Ericsson are now reflected in your numbers and we can be confident that over time you are not going to continue to grow your OpEx. And as I speak I just think about like third very quick question very related. What about acquisition disciplines? So you're making a lot of acquisitions even your best peers don't have like a very high success rates with acquisition, it very often doesn't work. And so my question is are you aware of that? Do you agree with that? And do you plan to manage your acquisition flow in a way where you're going to actually shutdown and take down the additional cluster acquisition bring in to your cost base, if the acquisition doesn't work well under the best rates collectively rapidly. Thanks a lot.

Yes, there was many questions, one, let me start with the gross margin. I mean of course we are striving for every different unit to continue to improve. And of course the business mix going forward with some of the targeted areas, we're investing in everything from OSS/BSS, Cloud et cetera. They have an higher degree on software. So that of course but they also have another higher degree of R&D. So you need to think about that if you're really focused on the gross margin development, which is a combination of software and services. Of course we're focused on improving that for each and every unit and that we'll continue to do. When come to OpEx you've already seen the decision and that's to discontinue Modems. I think that's an important OpEx decision that we're not going -- we take a portion of that and reallocate it to radio. But the other, as I said, in the second half next year we expected that doesn't have an impact. So we will continue to work on that and we have been in the cycle where we've been investing in especially R&D. And this year what is non-organic is of course explainable but what is organic growth that's in one area and that's in IP that we have ramped up and as Jan said that is has come into to the area more in force well in the second half as expected. On the acquisitions if you try to follow us we are acquiring companies in this areas of T.V., media, OSS/BSS and cloud, where we want to establish leadership by not acquiring anything in the core business there rather deploy our own R&D, it's the growth of mobile infrastructure and traditional services. Of course services like system integration of cloud would be an area and that would be new area. So we are following it closely and you're right I mean there are probably some successes in acquisitions and some that are not successful. We are doing everything to use our experience, our background, when we both acquire and making our business cases. Additionally we are looking much more into culture, how these companies can be integrated with Ericsson and working Ericsson. So I think we have learnt a lot the last couple of year in acquisitions and I think that we're trying that as much as possible to be as successful as possible with acquisitions.

Thanks a lot. That's very clear.

We are now ready for the last question of this session so please.

The last question is coming from Andrew Gardiner from Barclays. Please go ahead sir.

Good afternoon thank you for taking the question. Fairly quick one really to trend cash flow Jan, you mentioned so the impacts on some of these key contracts that were signed earlier in the year that had a negative impact on your working capital in the third quarter. And just -- you also mentioned seasonality there which I think we can understand in terms of the inventory build into the final period of the year. But in terms of the specific contract are you suggesting that there was perhaps an abnormal level of inventory associated with it, the wait on working capital or is it that perhaps payment terms are longer for some of these contracts, I just -- I was curious about some of the moving parts there? Thank you.

I think you're spot on when it comes to inventory of course. I think on the working capital related to those projects, its more related to the fact that typically when you run a big project you have different milestones related to, for instance billing milestones related to preliminary acceptance, and final acceptance, while when you are in the capacity business typically you can have split contracts which means that you ship hardware and software separately from services as an example. So the impact on working capital is more the fact that the project in itself has a different way of reaching its billing milestones that goes actually for most projects we have globally. So it's not that we have worse terms it's just the nature of projects. We'll see -- we'll come back in January and see if we can deliver a great Q4 on cash flow. We have done that for a few years here but I think I just want to highlight that there is a bit of mix shift this quarter and we'll see there, the year isn't over it.

Understood. Thank you.

Thank you, Andrew. And Hans may be you can end this.

Yes let me end this by talking about the Capital Markets Day then and of course we are now coming up for our annual event, very important event 13 of November when we're going to gather here in Stockholm and that of course that -- that event will have a couple of different topics and I think we've already mentioned. We're going to talk more about the areas that we also talk toyed in for transformation the areas like OSS/BSS, T.V., media, IP cloud, industry and society or industry vertical. We will talk more about them and give as fully loaded picture of them as possible their growth potential, market size, competition, what we are doing, why we should succeed. We will try as good as we can, we know that is the question out there and of course also clarify the clear adjacency with this area with the rest of the company. And as Jan said and as I said we will talk about expenses and operating expenses because that's part of the ingredients here how we allocate the resource and capital allocate. And then of course the normal seasonality or normal business core business we will talk about of course like mobile infrastructure and services as well. But this is a little bit of the feedback we have from you what we would like to discuss and we will bring it up. And hopefully it's going to be like last year you'll see this is a picture from the last year, today a lot of sharing the film, have to be present. We will do our best at least from our side Jan and me but let's see.

Okay thank you.

Thank you very much.