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Electronics Production | February 27, 2009

Efore net sales down by 30.9% in 1Q

Net sales for the 1Q totalled €14.3 million (€20.7 million). The fall compared with the corresponding period in the previous fiscal year was 30.9%. Net sales by customer group were as follows: telecommunications 62.6% (66.6%) and industrial electronics 37.4% (33.4).
Geographically net sales were as follows: EMEA €7.1 million (€13.1 million), APAC €5.7 million (€5.1 million) and the Americas €1.5 million (€2.5 million). The profit before taxes for the first quarter was € -1.3 million (€0.2 million) and the net profit was € -1.3 million (€0.2 million).

Financial Position
The Group's financial position during the period under review was good. The Group's solvency ratio was 57.6% (56.3%) and the gearing was -9.3% (-14.0%). The consolidated interest-bearing cash reserves exceed interest-bearing liabilities by €2.0 million (€3.5 million). The consolidated net financial expenses were € -0.1 million (€ -0.1 million). The cash flow from business operations was € -1.3 million (€ -3.0 million). The cash flow after investment was € -1.5 million (€ -3.1 million).

Liquid assets excluding undrawn credit facilities totalled €3.1 million (€4.6 million) at the end of period under review. The Group also had access to substantial undrawn credit facilities. The balance sheet total was €38.0 million (€44.9 million).

Personnel
The number of the Group's own personnel averaged 584(680) during the period under review and at the end of the period under review it was 565(666). The number of personnel fell by 35 during the period under review.

In addition to its own personnel, the Group's contract staff numbered 212(153) at the end of the period under review. The number of contract staff increased by 6 during the period under review. The geographical distribution of the personnel including contract staff at the end of the period under review was as follows: Europe 319 (384), Asia 435 (401) and the Americas 23(34).

Events after period under review
The company issued an invitation to the representatives of personnel in Finland to participate in statutory joint negotiations as per the Act on Co-operations within Undertakings on February 3, 2009. The purpose of these negotiations is to streamline the company's operations and costs to meet the market situation. The adjusting measures will involve approximately 30 employees in Finland.

Decisions concerning adjusting measures in the USA have been made and company's operations will be focused on product sales, marketing and maintenance services.

Outlook
According to the estimations received from the companies in the business the overall telecommunications market will be weakening. There are however growing geographical markets in the field such as Asia, the Middle East and Africa. The international financial crisis and the recession in the world economy are expected to weaken the demand during the whole fiscal year althought China's and India's remarkable investments on local wireless networks will increase demand in these countries.

The company continues to focus on new technologies as well as the development of demanding and innovative power supply solutions. Developing energy saving solutions that will take up less space and use renewable energy sources will be a focal point for product development.

Operational development projects of the group together with long term programs in order to improve productivity and reduce cost structure, lower inventories and make the production and product development processes more efficient will continue. The purpose of these projects is to maintain continuous improvement in the competitiveness of the company on the global market.

With these planned actions and adjusting fixed costs in order to meet the market situation the company estimates to lighten fixed costs of the group by approximately €2.0 million on annual level. The effect of savings will materialize in full from the beginning of the next fiscal year.

With ongoing development projects and growing demand in Asia result for the fiscal year 2009 is expected to show an improvement compared to the previous fiscal year.

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