Francois-Xavier Bouvignies: And then on the cost measures, I mean, do you have a lot to potential still to work on? Or where are you in these cost measures in the gross margin?
Lars Sandstrom: Yes. On the previous program that you have talked about, I think there we are where we — those are through now and have delivered, and we see that impact. And then what we have announced during Q1 on the additional side that is to support. That will take a bit of time, as you know, when we need to have the union negotiations in place, et cetera, and then it takes a bit of time before it comes through in the result in the financials.
Francois-Xavier Bouvignies: Thank you.
Lars Sandstrom: Yes. On the previous program that you have talked about, I think there we are where we — those are through now and have delivered, and we see that impact. And then what we have announced during Q1 on the additional side that is to support. That will take a bit of time, as you know, we need to have the Union negotiations in place, et cetera, and then it takes a bit of time before it comes through in the result, in the financials.
Francois-Xavier Bouvignies: Thank you.
Borje Ekholm: Just to add, we know from experience also when we do cost initiatives on the cost of sales, it takes a bit of time before it comes through into the P&L. That’s why you also see the support from the cost out we did last year coming through now. It takes a bit longer than you would hope sometimes.
Daniel Morris: Thanks for this question, Francois. We will move on to our next question. So the next question comes from Joachim Gunell at DNB. Joachim, your line is now open.
Joachim Gunell: Thank you for that. And good morning. So just a clarification when it comes to how you’ve talked about H2 and this stabilization in growth coming from year-over-year declines in H1. Does that — is this basically supporting your view of the overall Networks market or is this also to be seen for you — I mean is this excluding the AT&T contract ramping where you expect more of a flattish development H2 or is this including that contract?
Lars Sandstrom: If we start with your comment there on stabilization on growth, I think we are not saying stabilization of growth, we are saying stabilization of it in the down going market. I think that’s worth reminding. And also on the total, where we highlight the external view of minus 4%, which we see — still see a bit optimistic. So just to get that right. And in this, what we talk about saying that is, of course, including the total group, including the rollout of networks in the U.S.
Joachim Gunell: That’s clear. Thank you.
Daniel Morris: Great. Thanks for the question, Joachim. The next question will come from Sandeep Deshpande at JPMorgan. Sandeep, please go ahead.
Sandeep Deshpande: Yes, hi. Thanks for taking me on. My question is, when you look at North America and your design wins in — your footprint wins in North America, how do we — how should we look at them in terms of not only the — how they’re going to ramp up as well as the margin impacts of these — of these wins, whether they will be immediately accretive or they will take time to be accretive to margin?
Lars Sandstrom: I think here, it has not a big impact. It’s rather stable over the rollout period. It depends a little bit on the work that we conduct during the project phase and that plan is going on together with the customer now. And so there can be in some periods, a bit of a weaker margin and then it’s back to normal again for this market. So that it is a bit early to say in that sense, and we will see that paying out. And this is a long-term contract. It’s for ’24 into ’25 and forward as well.
Sandeep Deshpande: And you’re fairly confident this is going to start in the second half of this year?
Lars Sandstrom: Yes.
Sandeep Deshpande: Thank you.
Daniel Morris: Thanks Sandeep. So we’ll move to the next question. So the next question is coming from Daniel Djurberg from Handelsbanken. Daniel, your line is now open.
Daniel Djurberg: Thank you, operator. And good morning, Borje, Lars and Daniel. A question on the IPR run rate, excluding one-offs entering Q2. How large was the catch-up item? And also, if I may, how many of the larger Tier 1 handset OEMs is still about to close 5G? Have you, for example, done the BBK and also the status of Lenovo would be found to understand. Thanks.
Lars Sandstrom: On the financials, the run rate coming out of Q1 here is around SEK 12 billion — sorry, SEK 11 billion. And then what we have said previously is that we are aiming for a full-year of around SEK 12 billion to SEK 13 billion, and that remains.
Daniel Djurberg: Perfect. Is it sorry.
Borje Ekholm: A couple of the big handset vendors still remain unlicensed. And you know we have litigation ongoing with one of them you mentioned. So we can’t comment really on where that is right now.
Daniel Djurberg: Yes, just a super first follow-up on the nonrecurring item of SEK 1.9 billion. It was a noncash, it seems, but it was a commercial dispute resolution. Why is it not cash flow impacting?
Lars Sandstrom: It will be cash flow impacting in Q2.
Daniel Djurberg: Super, thanks.
Daniel Morris: Great. Thanks for the question, Daniel. We’ll move to the next question. So that’s coming from Joe Zhou at Barclays. Joe, please go ahead.
