Electronics Production | February 18, 2008

Scanfil's turnover for the year 07 decrease 7,0%

Finland based EMS provider Scanfil turnover for the year 2007 totalled EUR 224.6 million (241,4 year 2006) decrease of 7,0%. Operating profit was EUR 18.6 (11.4) million, which is 8.3 (4.7) % of turnover. Profit for the review period was EUR 14.1 (8.2) million.
Turnover for the fourth quarter totalled EUR 54.4 million (51.5 in the corresponding period in 2006), increase of 5.7% Operating profit was EUR 5.5 (2.7) million representing 10.2 (5.2)% of turnover.

Harri Takanen, President of Scanfil plc:
"The year 2007 was challenging in many ways. In the midst of tough price competition and structural changes in the business, we achieved our goals and retained profitability at a satisfactory level. Profitable business is the only
means of ensuring the company's future and development. Therefore, maintaining profitability will continue to be Scanfil's primary goal. The Company's excellent financial position is the result of Scanfil's cost-efficient
operations, competitiveness, good service competence and successful implementation of the chosen strategy. We have been more successful than our competitors in managing the changes in the business and the market. With correct timing, this gives Scanfil the opportunity to grow and strengthen its market position."
In the industrial electronics products market, both the volume of production and the sales continued to grow steadily throughout the year. Scanfil's customers have been successful in the market. Building and modernisation of infrastructure in developing regions, higher energy prices, increasing environmental awareness and concern over the warming of climate are global factors that have had a positive effect on the markets where Scanfil's industrial electronics customers operate.

In 2007, the telecommunications network products market was characterised by corporate restructurings implemented by large players in the field. These affected the operations of contract manufacturers of network products. The
lower-cost product and supply structures of new products have cut the value and volume of the material flow through contract manufacturers. The network suppliers' increasing engagement in service business activities has contributed
to slower growth in the equipment market. For Scanfil plc's operations, the main effects of this development included downsizing of operations in Finland, relocation of production to lower-cost plants in Europe and Asia and a drop in
turnover compared with the year before.

Telecommunications customers accounted for about 69 (72)% and industrial electronics customers for about 31 (28)% of the turnover.

The reorganisation of operations in Finland was completed during the year, and the operations in Finland were concentrated in Sievi and Vantaa. The reorganisation of production was completed successfully and did not cause any significant extra costs. All the resources assigned to the reorganisation of operations in Finland were released and engaged in business development again by the end of the year.

The Chinese subsidiaries' sales accounted for 39% of the Group's sales during the review period (32% in 2006), including deliveries to the Group's other plants. Of the Group's personnel, 54% (46) worked in China at the end of 2007, and a total of 75% (70%) worked in the international subsidiaries on 31 December 2007.

Scanfil plc's Belgian subsidiary Scanfil N.V. sold its plant site in Belgium on 20 March 2007. In Finland, Scanfil plc sold its Äänekoski plant site on 8 October 2007. In addition, the Company has initiated the process to sell the Oulu plant site. The plant site deals were concluded at prices that were higher than their balance sheet values. In addition, on 17 September 2007 the Company announced that it is investigating the option to sell its plant sites in Vantaa, Estonia and Hungary. If these deals are concluded, the Company will continue its operations at the sites as a tenant.
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