OKMETIC OYJ STOCK EXCHANGE RELEASE 1 MARCH 2007 AT 9.50 A.M. 1(19) OKMETIC'S FINANCIAL STATEMENTS 2006 Okmetic is a technology company that manufactures and carries out further processing on high-quality silicon wafers for the sensor and semiconductor industries. The company also sells technology. In 2006, Okmetic's net sales amounted to 63.7 million euro (49.8 million euro). Profit from continuing operations amounted to 6.9 million euro (-1.7 million euro). Profitability has developed positively and according to plan. YEAR IN BRIEF - Annual net sales amounted to 63.7 million euro (49.8 million euro). - The demand for Okmetic's silicon wafers has been strong. - Sales to sensor customers developed as planned. - In summer 2006, Okmetic sold its crystal growth technology to NorSun, a Norwegian solar energy enterprise. - The decommissioned production facility in Espoo was sold in December. - Profit from continuing operations amounted to 6.9 million euro (-1.7 million euro). - Profit for the period amounted to 6.9 million euro (60,000 euro). - In the last quarter of the year, profit before tax amounted to 1.8 million euro (0.2 million euro). - Okmetic's equity ratio strengthened, amounting to 51.1 percent (41.1%). - The Board of Directors' proposal for the Annual General Meeting is that the distributable earnings be retained in equity. KEY FINANCIAL FIGURES 1,000 euro 1.10.- 1.10.- 1.1.- 1.1.- 1.1.- 31.12.06 31.12.05 31.12.06 31.12.05 31.12.04 Net sales 16,007 13,994 63,694 49,822 54,524 Operating profit/loss 3,339 810 9,877 580 -5,735 % of net sales 20.9 5.8 15.5 1.2 -10.5 Earnings per share from continuing operations, euro 0.12 0.00 0.41 -0.10 -0.50 Net cash from operating activities 4,863 3,430 17,945 3,125 3,655 Return on equity, % 18.6 -5.1 -22.2 Gearing, % 31.3 99.5 116.9 Equity ratio, % 51.1 41.1 36.9 Average number of personnel during the period 360 359 446 PROJECTIONS FOR THE NEAR FUTURE The sensor industry is growing at a faster rate than the semiconductor industry. Over the last five years, the global sales of sensors have increased at a rate of one and a half times that of micro circuits on average. This trend is expected to continue in 2007. While the growth in the semiconductor industry is expected to come close to ten percent in 2007, SIA's estimates foresee growth of around 13 percent in the sensor market. The majority of sensors that are fabricated on silicon wafers are built using MEMS technology. The sensor types that are most significant to Okmetic are pressure sensors and accelerometers. 2 Okmetic's goal on the sensor market is to focus on products and services the demand for which is expected to grow at a considerably faster rate than the demand for other products and services in general. For the semiconductor industry, 2007 is expected to represent the kind of phase in the economic cycle where growth figures hover in the region of long-term averages. The decline in the average sale price of semiconductors is expected to be considerably less dramatic in 2007 than it was in 2006. In fact, the decline is even forecasted to stop altogether, and consequently shipment volumes of components are expected to increase at approximately the same rate as invoicing in 2007, in other words, around ten percent. (SIA, WSTS, Gartner, IC Insights) Demand for silicon wafers will grow in a similar way to the shipment volumes of the customer industries. According to prevailing forecasts, the total volume of wafer shipments will increase by about ten percent in 2007. Demand for sensor wafers is expected to increase slightly faster. Overall, demand for Okmetic's products remained high throughout 2006. Moreover, demand has stayed strong in the first months of 2007. Only a moderate increase is expected in the price level of wafers, despite the increase in the price of the raw material. The company estimates that in the first six months of 2007, net sales and profitability will amount to around the same as they did in the corresponding period of the previous year. BOARD OF DIRECTORS' PROPOSALS FOR THE ANNUAL GENERAL MEETING The Board of Directors' proposals for the Annual General Meeting scheduled for Thursday, 29 March 2007 are as follows: The Board's proposal regarding its own powers to decide on new issues and other share entitlements will be presented further down in the document, under Authorisation of the Board of Directors to increase share capital. The Board of Directors proposes that the Annual General Meeting decide to amend the Articles of Association of the company. The proposed amendments are mainly due to the new Finnish Companies Act, which entered into force on 1 September 2006, and are mainly of a technical nature. The main content of the proposed amendments is as follows: - Section 3 concerning the maximum and minimum share capital of the company is removed as redundant. - The first paragraph of section 4 concerning the absence of par value of the shares is removed as redundant. - Section 5 concerning the record date procedure of the book-entry system is removed as redundant. - Section 8 concerning the right to sign in the name of the company is amended to correspond to the wording of the Companies Act. - Section 12 concerning the invitations to Annual General Meetings is Amended to the effect that the invitation can be delivered no earlier than three months prior to the Annual General Meeting instead of the current two months. 3 - Section 13 concerning the Annual General Meeting of shareholders is amended to correspond to the amended legislation. - The numbering of the sections in the Articles of Association is amended to correspond to the above. STRATEGY AND SEGMENT REPORTING The core of Okmetic's strategy is to produce solutions for the technological needs of its chosen customers in the sensor and semiconductor industries. The Group's primary segment reporting format is based on a single business segment, since the risks and profitability associated with the company's strategic product segments do not differ considerably from each other. The company's sales are assessed both on the basis of geographical market areas and the three chosen customer segments: sensor customers, semiconductor customers and technology customers. These are dealt with as individual sectors in Okmetic's strategy, which is based on specialisation. In 2006, the company detailed its strategy especially in terms of sensors, and set clear targets for sensor wafer activities for the next few years. Okmetic is the world's leading supplier of sensor wafers and aims to strengthen this position. MARKETS The electronics industry enjoyed better than average growth in 2006. The sensor market grew by almost 20 percent. The volume of semiconductor shipments also increased around 20 percent over the year. The prices of semiconductors, however, fell as a result of fierce competition, and dollar-denominated semiconductor sales only grew by nine percent. The volume of silicon wafer shipments increased significantly in all product segments and in all market areas in 2006. In terms of surface area, global growth in shipment volumes amounted to 20 percent in comparison with the previous year. SALES Okmetic's 28-percent increase in net sales exceeded the overall growth pace of the market, and the company increased its contribution to its customers' wafer supply. Demand for polycrystalline silicon, the principal raw material of silicon wafers, exceeded supply and its price increased. Major wafer manufacturers focused more and more on the large 200 mm and 300 mm wafers, which also contributed to Okmetic's ability to increase its net sales in the 100 - 150 mm size range, although the wafers' sale prices remained at the previous year's level. The Group's net sales grew by 27.9 percent compared to the previous year (decrease of 8.6%) and amounted to 63.7 million euro (49.8 million euro). Sales per customer segment 2006 (2005) Sensors 34% (36%) Semiconductors 59% (54%) Technology 7% (10%) 4 Okmetic's performance in the sensor market developed according to objectives. Sensor wafers are used in the automotive, aeronautical and pharmaceutical industries, for example, as well as in consumer applications. Thanks to the positive economic trend in the semiconductor market, semiconductor sales grew faster than sensor sales. The most typical uses of semiconductor wafers include consumer electronics, information technology, telecommunications and the automotive industry. In 2006, Okmetic expanded its business into a new business segment in accordance with the company's revised strategy. Technology sales comprise the sales of both manufacturing technology and crystals. Net sales per market area 2006 (2005) North America 55% (46%) Europe 28% (37%) Asia 17% (17%) PROFITABILITY In 2006, Okmetic Group recorded a profit of 6.9 million euro (60,000 euro). Profit from the Group's continuing operations amounted to 6.9 million euro (-1.7 million euro). Earnings per share from continuing operations were 0.41 euro (-0.10 euro). The structural change that Okmetic underwent in 2004 and 2005 in order to ensure long-term profitability combined with the associated development measures contributed significantly to the company's good profitability in 2006. The 0.4 million dollar compensation payment awarded to a client towards the end of the year hurt the profits. Okmetic Oyj's loan to Okmetic Inc, which has previously been recorded as a net investment, has resulted in a 2.5 million euro loss due to exchange differences. This loss has been recorded in the translation differences under equity in the consolidated financial statements, and the loan is now recorded as a normal liability. As a result, 1.1 million euro of the exchange loss, which corresponds to the loan repayment, has been recorded under financial expenses in the consolidated income statement for 2006. The remaining 1.4 million euro of the exchange loss will be expensed according to the same principle in the future, proportioned to the loan repayments. FINANCING The Group's financial situation is good. The net cash flow from operations amounted to 17.9 million euro (3.1 million euro). The cash flow was particularly boosted by good profitability and the level of trade payables that has normalised since the end of the previous year, as well as by the increase in prepayments received. Due to the decline in the availability of polycrystalline silicon, stocks fell and around 2.0 million euro was freed as a result. Half of the amount was used to repay a loan that was taken out to finance the polysilicon stocks. The previous 2.0 million euro loan, which matured at the end of 2006, was paid off and a new 1.0 million euro loan was taken out at the beginning of 2007. 5 In December, Okmetic sold its decommissioned production facility in Espoo and some of the plant's old machinery. The sale price was 4.8 million euro and the sales profit of just over one million was entered into the books for 2006. In summer 2006, Okmetic sold its crystal growth technology to NorSun, a Norwegian solar energy enterprise. The deal is worth around 15 million euro over a period of three years. According to the agreement with NorSun AS, Okmetic will increase its crystal growth capacity at the Vantaa plant. NorSun will fund the additional production machinery, and Okmetic will pay for the building work required for extending the plant. Okmetic will then begin to grow crystals on behalf of NorSun. The total investment in the Vantaa plant extension will amount to around 10 million euro, and Okmetic's share of the investments will be worth around 2.7 million euro. The project will require the input of around 20 Okmetic employees. Construction work relating to the project began in Vantaa in July. In 2006, investments associated with the project amounted to 0.3 million euro. The companies aim to conclude negotiations on the details of the agreement during March. The remaining 1.4 million euro of the Group's gross investments of 1.7 million euro in 2006 related to normal replacement investments. The Group revised its syndicated bank facility in November. According to the loan agreement, Okmetic's credit facility was divided into a long-term 10.0 million euro loan and a 6.0 million euro credit facility. According to the terms and conditions of the new syndicated loan, repayments of subordinated loans can resume once the new loan has been reduced to four million euro. During the year, Okmetic paid back a total of 12.4 million euro worth of loans. Of this, normal loan repayments accounted for 4.9 million euro (2005: 5.2 million euro). In addition, the company paid off the aforementioned 2.0 million euro loan on polysilicon stocks and reduced the credit facility by 5.5 million euro. The company plans to pay the 3.1 million euro worth of interest on subordinated loans, which is recorded under liabilities, during spring 2007. The company's goal is to get to a situation where repayments can be made on subordinated loans as well. At the end of the year, cash and cash equivalents amounted to 13.2 million euro (4.5 million euro). Return on equity amounted to 18.6 percent (-5.1%). The Group's equity ratio strengthened and amounted to 51.1 percent (41.1%). Shareholders' equity per share was 2.37 euro (2.01 euro). PRODUCT DEVELOPMENT Product development accounted for 2.7 percent of Okmetic's net sales (2.9%). Okmetic engaged in several strategic research projects with clients, research institutes and other partners. Several new products and new versions of existing products were introduced during the year. 6 The development of new SOI versions continued in sensor wafers, and preparations for the customer industries' adoption of 200 mm wafers got underway. Yields were improved and the consumption of raw materials curbed through developing production machinery and internal processes. PERSONNEL The level of expertise demonstrated by Okmetic's personnel is globally competitive. Competent, multi-talented employees are a prerequisite for achieving Okmetic's strategic goals and ensuring long-term success. Systematic development of the personnel's competencies is an inherent part of Okmetic's strategy. The company's personnel policy also supports the pursuit of Okmetic's strategic objectives. In 2006, the average number of personnel at Okmetic was 360 (2005: 359 and 2004: 446). The number of employees in production was increased to meet the increase in sales volumes. At the end of the year, 318 employees worked in Finland, 46 in the US and one in Japan. Thirty-two percent of the personnel were women and sixty-eight percent were men. Clerical workers accounted for 34 percent of the personnel and manual workers for 66 percent. The average age of the personnel was 40 and the average length of employment was eight years. Okmetic systematically develops the skills of all its personnel groups as well as their operating procedures and occupational welfare. On average, each employee spent 2.5 days in training. In 2006, the company launched a training programme for the management, which will continue in 2007. The first modules of the programme dealt with strategic planning and finance. Performance reviews are a regular exercise at Okmetic. A new concept was adopted in 2006. Eighty-seven percent of the planned performance reviews were conducted. The remuneration of Okmetic's employees is based on the level of difficulty of the tasks of each personnel group. Wages and salaries amounted to 17.6 million euro (2005: 15.7 million euro and 2004: 19.9 million euro). In some cases, a collective labour agreement determines the remuneration payable for specific positions. The Group's parent company complies with the collective labour agreements of the Technology Industries of Finland. All employee groups at Okmetic are eligible for an incentive scheme. Monthly targets are set for the manual workers' productivity, and the resulting bonuses are awarded once a month. Clerical workers are subject to a profit-sharing scheme, which is based on annual targets relating to profitability, finance and development of the company's operations. Operative targets are set individually from managerial level upwards. The Group achieved all of its profitability and finance- related targets in 2006. Operative targets were also met successfully. 7 The working atmosphere at Okmetic has remained at the level of the previous year. A personnel survey showed that Okmetic's employees are competent and motivated by their work, that they strive to ensure Okmetic's good performance and that they work well together as a team. The steering effect of the strategy and teamwork were also in line with the goals. In 2005, Okmetic invested heavily in developing its employees' competencies, which showed in the 2006 survey as an improvement in working atmosphere. Seventy-two percent of Okmetic's employees took part in the survey. ENVIRONMENTAL ISSUES At Okmetic, environmental issues are inherent in the very construction of the plants. The company has been awarded the ISO9001:2000, TS16949 and ISO14001 quality and environmental certificates. The most notable subcontractors and suppliers also have ISO14001 certification. Okmetic has identified the use of silicon material and the consumption of electricity and water as significant environmental issues. The volumes of emissions and waste are not significant, and environmental costs do not impinge on Okmetic's business. Thanks to development projects carried out during 2006, Okmetic has managed to make its use of silicon material more efficient, which has now created conditions for continuing the so-far-successful sustainable development in projects scheduled for 2007 as well. Concentrating all of Okmetic's activities in Finland to Vantaa in 2005 helped to reduce the consumption of electricity and water in Finland, and the plant consequently applied for a new environmental permit. The permit was renewed in 2006. Okmetic has identified the environmental risks relating to its business and taken measures to control them. The company continuously follows the evolution of environmental laws and requirements and adjusts its business accordingly. Okmetic also abides by the new EU chemicals legislation (REACH). No serious environmental issues occurred at Okmetic's plants in 2006. Acceptable emission limit values were exceeded on five occasions in relation to waste water treatment. The excess values were only slightly over the acceptable limits and corrective measures were implemented expediently. Okmetic's plants are not subject to emission trading. Okmetic does not publish a separate environmental report in addition to the Annual Report. The key figures on environmental protection at the Vantaa plant in 2006 are as follows: Energy consumption (GWh): electricity 25.2, district heating 3.2 Water consumption (tm3): water 480, waste water 450 Waste volumes (t): hazardous waste 220, landfill waste 65, recycled waste 140. 8 BUSINESS RISKS The Group's silicon wafer sales are targeted at the sensor and semiconductor industries. The demand for semiconductor wafers is sensitive to economic fluctuations and changes in the market situation can be sudden and dramatic. The demand for sensor wafers is more stable. Okmetic is the market leader in sensor wafers and they account for a significant proportion of the company's sales. Maintaining the market leader position and continuing to develop sensor wafers in collaboration with clients require larger than average investment from Okmetic. Okmetic's share of the global silicon wafer market is around one percent and the market prices have a notable effect on the price development of Okmetic's products. The majority of sales are conducted in US dollars. Despite hedging, the company is vulnerable to exchange rate fluctuations. Demand for polycrystalline silicon, the raw material of silicon wafers, exceeded supply in 2006, reducing its availability and increasing its price. Okmetic expects availability to remain low and the price to continue to rise. Moreover, the suppliers of polysilicon are expected to start demanding prepayments more and more often. Okmetic has secured access to the raw material through long-term purchase agreements. The availability of polysilicon may become an issue if the market situation changes, and it may be that the company will have to tie up even more resources to secure its availability. Great volumes of electricity are used in Okmetic's production. Despite hedging, the company is also vulnerable to fluctuations in the price of electricity. The production process also consumes a lot of water, but its availability and price are not expected to cause a problem to business. At the end of the year, the Group's interest-bearing liabilities amounted to 25.7 million euro (38.3 million euro). Unpaid subordinated loans amounted to 6.6 million euro at the end of the year. The company has been unable to make the capital and interest repayments of subordinated loans in the absence of distributable funds. Loans from financial institutions amounted to 19.1 million euro at the end of the year (31.4 million euro). Loan repayments amounted to a total of 12.4 million euro in 2006 (5.2 million euro). Although the amount of debt has gone down significantly, interest rate fluctuations still have an impact on the company's financial performance. Okmetic's production activities are capital-intensive, and also largely labour-intensive. Some of the processes are highly technical and the raw materials are subject to special permits. Any downtime in production represents a significant risk to profitability. Okmetic aims to protect itself against these risks by regularly inspecting its production plants together with the relevant officials and its insurance provider and by organising emergency drills to prepare for accidents. The company has extensive, regularly revised accident insurance cover. 9 SHARE PRICE DEVELOPMENT AND TRADING A total of 16.5 million shares (5.9 million shares) were traded between 1 January and 31 December 2006, representing 97.7 percent (34.7%) of the share total of 16.9 million. The lowest quotation of the year was 1.80 euro (1.65 euro) and the highest 3.75 euro per share (3.14 euro per share), with the average being 3.11 euro (2.09 euro). The closing quotation for the year was 3.69 euro (1.78 euro). At the end of the year, the market value of the entire share capital amounted to 62.3 million euro (30.1 million euro). The high trading volume is largely due to the share dealings of major shareholders who sold their holdings to several different buyers simultaneously in spring 2006. Okmetic is listed on the Nordic Small Cap list of the Helsinki Stock Exchange under the trading code OKM1V. According to the Global Industry Classification Standard (GICS), which the Helsinki Stock Exchange uses, Okmetic Oyj is listed under the Information Technology sector. OWN SHARES The company has not repurchased its own shares and the Board of Directors has not been authorised to repurchase or convey the company's own shares. AUTHORISATION OF THE BOARD OF DIRECTORS TO INCREASE SHARE CAPITAL On 28 February 2007 the Board of Directors decided to propose at the Annual General Meeting to be held on Thursday, 29 March 2007 that the Board of Directors be granted the authority to decide on new issues, stock options and other share entitlements according to the first paragraph of section 10 of the Finnish Companies Act as follows: The aggregate number of shares issued on the basis of the authorisation may not exceed 3,377,500 shares, which represents approximately 20 percent of all the shares of the company. The Board of Directors is authorised to decide on all the terms and conditions concerning the issue of shares and other share entitlements. The authorisation relates to the issuance of new shares. Issuance of shares and other share entitlements can be carried out as a directed issue. The authorisation is effective until the following Annual General Meeting of shareholders, however no later than until 29 March 2008. The Board of Directors was granted similar authorisations at the Annual General Meetings held on 24 March 2005 and 11 March 2006. The Board had not taken advantage of its powers by 28 February 2007. Convertible bonds Okmetic has no convertible subordinated loans at the moment. 10 At an Extraordinary General Meeting held on 28 June 1999, the shareholders decided to issue a convertible subordinated bond of 3,363,757.76 euro (then FIM 19,999,995.40) and offer it for subscription to the shareholders registered in the company's Share Register on 28 June 1999 so that the shareholders were entitled to subscribe for one bond valued at FIM 8,605.85 for every 10.483219 shares owned. A total of 2,096 bonds were subscribed at 3,033,750.54 euro (then FIM 18,037,861.60). The conversion ratio was 1:8.60585 whereupon a maximum of 2,096 shares could be subscribed under the bonds. Due to changes resulting from the increase in the total number of shares and the adoption of the euro between 2000 and 2006 the company's share capital has been allowed to increase by no more than 366,800 euro as a result of all bonds issued at the same time being converted, which corresponds to about 3.28 percent of the company's total share capital and votes. The number of shares would have been able to increase by no more than 524,000 if all the bonds were converted. One of the shareholders used their right of conversion on 30 June 2001. The amount of the converted bond was 39,079.80 euro and the number of shares involved was 6,750. The right of conversion expired on 30 June 2006. MANAGEMENT AND AUDITOR In 2006, Okmetic's Board of Directors was made up of Mikko J. Aro as the chairman, Karri Kaitue as the deputy chairman and Esa Lager, Pekka Paasikivi and Pekka Salmi as members of the Board. Antti Rasilo, M.Sc. (Tech.) has been acting as the President of Okmetic Oyj since 1 January 2003. In addition to the President, the Group's Executive Management Group comprises Timo Koljonen, Senior Vice President, Production; Jaakko Montonen, Senior Vice President, Product Development; Mikko Montonen, Senior Vice President, Sales and Marketing; Esko Sipilä, Senior Vice President, Finance, IT and Communications; Markku Tilli, Senior Vice President, Research; Markus Virtanen, Vice President, Human Resources; and Anna-Riikka Vuorikari- Antikainen, Senior Vice President, Sensor Business Development. The company's auditors are PricewaterhouseCoopers Oy, Authorised Public Accountants, with Markku Marjomaa, Authorised Public Accountant, acting as the principal auditor. THE BOARD OF DIRECTORS' PROPOSAL REGARDING MEASURES CONCERNING RETAINED EARNINGS According to the financial statements dated 31 December 2006, Okmetic's distributable earnings amount to 5,734,093.35 euro. The earnings consist of profit from the financial year 2006. The Board of Directors' proposal for the Annual General Meeting is that the distributable earnings be retained in equity. Vantaa, 28 February 2007 Board of Directors 11 FINANCIAL STATEMENTS JANUARY 1 - DECEMBER 31, 2006 (unaudited) These financial statements have been prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards (IFRS). CONDENSED CONSOLIDATED INCOME STATEMENT 1,000 euro 1.10.- 1.10.- 1.1.- 1.1.- 31.12.06 31.12.05 31.12.06 31.12.05 Continuing operations Net sales 16,007 13,994 63,694 49,822 Cost of sales -11,437 -11,540 -48,165 -43,906 Gross profit 4,570 2,453 15,529 5,915 Other income and expenses -1,231 -1,643 -5,652 -5,335 Operating profit/loss 3,339 810 9,877 580 Financial income and expenses -1,565 -566 -3,198 -2,141 Profit/loss before taxes 1,774 242 6,679 -1,561 Income taxes 1) 206 -143 206 -143 Profit/loss for the period from continuing operations 1,980 101 6,885 -1,704 Profit/loss for the period from discontinued operations - - - 1,764 Profit/loss for the period 1,980 101 6,885 60 Continuing operations: Basic and diluted earnings per share 0.12 0.00 0.41 -0.10 Discontinued operations: Basic and diluted earnings per share - 0.00 - 0.10 All operations: Basic and diluted earnings per share 0.12 0.00 0.41 0.00 1) The estimated income taxes for the period January 1 - December 31, 2006 include the tax loss carry-forwards of the Group companies. 12 CONDENSED CONSOLIDATED BALANCE SHEET 1,000 euro December 31, December 31, 2006 2005 Assets Non-current assets Property, plant and equipment 47,821 58,629 Available-for-sale financial assets 1,502 2,214 Other receivables 123 238 Total non-current assets 49,446 61,081 Current assets Inventories 7,915 7,946 Receivables 9,036 9,301 Cash and cash equivalents 13,184 4,452 Total current assets 30,135 21,699 Total assets 79,581 82,779 Equity and liabilities Equity Share capital 11,821 11,821 Other equity 28,259 22,165 Total equity 40,080 33,987 Liabilities Non-current liabilities 21,294 16,390 Current liabilities 18,206 32,403 Total liabilities 39,501 48,793 Total equity and liabilities 79,581 82,779 13 CONDENSED CONSOLIDATED CASH FLOW STATEMENT 1,000 euro January 1- January 1- December 31, December 31, 2006 2005 Cash flows from operating activities: Profit/loss before taxes 6,679 -1,561 Adjustments 10,259 10,001 Change in working capital 2,652 -3,325 Interest and dividends received 172 70 Interest paid and other financial items -1,818 -2,060 Net cash from operating activities 17,945 3,125 Cash flows from investing activities: Proceeds from investing activities 4,777 1,894 Capital expenditure -1,203 -660 Net cash used in investing activities 3,574 1,234 Cash flows from financing activities: Payments of long-term borrowings -6,916 -4,681 Proceeds of long-term borrowings 10,000 - Payments of finance lease liabilities -343 -322 Payments of short-term borrowings -15,500 -500 Other financing cash flow - 20 Net cash used in financing activities -12,759 -5,483 Increase (+) / decrease (-) in cash and cash equivalents 8,760 -1,124 Exchange rate changes -27 61 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 1,000 euro Share Share Trans- Fair Re- Total capital premium lation value tained equity differ- reserve earnings ences Balance at Jan 1, 2005 11,821 71,266 -806 7 -49,580 32,709 Available-for-sale financial assets: Fair value gains/ losses recognised directly in equity -346 -346 Taxes on fair value gains/losses recognised directly in equity -1 -1 Translation differences 1,565 1,565 Losses offset from previous financial years -34,865 34,865 0 Net income recognised directly in equity - -34,865 1,565 -348 34,865 1,218 Profit/loss for the period 60 60 Total recognised income and expenses - -34,865 1,565 -348 34,925 1,278 Balance at Dec 31, 2005 11,821 36,401 759 -340 -14,655 33,987 Available-for-sale financial assets: Fair value gains/ losses recognised directly in equity -691 -691 Transfer to income statement -15 -15 Taxes on fair value gains/losses recognised directly in equity 4 4 Translation differences 595 595 Transfer to income statement 505 505 Losses offset from previous financial years -16,145 16,145 0 Net income recognised directly in equity - -16,145 -90 -702 16,145 -792 Profit/loss for the period 6,885 6,885 Total recognised income and expenses - -16,145 -90 -702 23,031 6,094 Balance at Dec 31, 2006 11,821 20,256 669 -1,042 8,376 40,081 15 COMMITMENTS AND CONTINGENCIES 1,000 euro December 31, December 31, 2006 2005 Loans secured by mortgages or pledges 18,870 31,110 Mortgages 30,610 44,233 Other pledges 8,908 8,908 Off-balance sheet lease commitments 322 420 Nominal values of derivative contracts Currency forward agreements 3,355 2,530 Currency options, call - 810 Currency options, put - 810 Interest-rate swap contracts - 9,345 Electricity derivatives 2,580 882 Fair values of derivative contracts Currency forward agreements 117 0 Currency options, call - 0 Currency options, put - -37 Interest rate swap contracts - -52 Electricity derivatives 80 328 The contract price of the derivatives has been used as the nominal value of the underlying asset. Derivative contracts are held for hedging. 16 KEY FIGURES SHOWING FINANCIAL PERFORMANCE January 1- January 1- December 31, December 31, 2006 2005 Net sales 63,694 49,822 Change in net sales compared to the previous year's period, % 27.8 -8.6 Export and foreign operations share of net sales, % 95.7 95.6 Operating profit/loss 9,877 580 % of net sales 15.5 1.2 Profit/loss before taxes from continuing operations 6,679 -1,561 % of net sales 10.5 -3.1 Return on equity, % 18.6 -5.1 Return on investment, % 14.2 0.8 Non-interest bearing liabilities 13,770 10,514 Gearing, % 31.3 99.5 Equity ratio, % 51.1 41.1 Capital expenditure 1,671 713 % of net sales 2.6 1.4 Depreciations 8,486 8,610 Research and development expenditure 1) 1,731 1,424 % of net sales 2.7 2.9 Average personnel during the period 360 359 Personnel at the end of the period 365 338 1) Research and development expenditure has been presented in gross figures and only long-term projects based on research program have been taken into account. 17 KEY FIGURES PER SHARE December 31, December 31, 2006 2005 Continuing operations: Earnings per share basic and diluted, euro 0.41 -0.10 All operations: Earnings per share basic and diluted, euro 0.41 0.00 Equity per share, euro 2.37 2.01 Dividend per share, euro 0.00 0.00 Dividend/earnings, % - - Price/earnings (P/E) 9.3 501.0 Share price performance (Jan 1 -) Average trading price 3.11 2.09 Lowest trading price 1.80 1.65 Highest trading price 3.75 3.14 Trading price at the end of the period 3.69 1.78 Market capitalisation at the end of the period, 1,000 euro 62,315 30,060 Trading volume (Jan 1 -) Trading volume, transactions 16,500,162 5,851,792 In relation to weighted average number of shares, % 97.7 34.7 Trading volume, euro 51,312,696 12,220,981 The weighted average number of shares during the period under review adjusted by the share issue 16,887,500 16,887,500 The number of shares at the end of the period adjusted by the share issue 16,887,500 16,887,500 Adjusted average number of shares during the period including the dilution due to convertible loans and options 16,887,500 16,887,500 Adjusted average number of shares at the end of the period including the dilution due to convertible loans and options 16,887,500 16,887,500 18 QUARTERLY KEY FIGURES FROM CONTINUING OPERATIONS 1) 10-12/2006 7-9/2006 4-6/2006 1-3/2006 Net sales 16,008 15,903 15,872 15,912 Compared to previous quarter, % 0.7 0.2 -0.3 13.7 Operating profit/loss 3,339 2,690 1,142 2,706 % of the sales 20.9 16.9 7.2 17.0 Profit/loss before taxes 1,774 2,338 407 2,161 % of net sales 11.1 14.7 2.6 13.6 Net cash flow generated from: Operating activities 4,863 5,694 3,431 3,957 Investing activities 3,996 -84 -329 -9 Financing activities -3,190 -2,968 -5,017 -1,584 Increase/decrease in cash and cash equivalents 5,669 2,641 -1,915 2,364 Personnel at the end of the period 365 368 379 337 10-12/2005 7-9/2005 4-6/2005 1-3/2005 Net sales 13,994 11,541 11,904 12,383 Compared to previous quarter, % 21.3 -3.1 -3.9 -9.7 Operating profit/loss 810 1,372 -1,076 -526 % of net sales 5.8 11.9 -9.0 -4.2 Profit/loss before taxes 242 769 -1,624 -950 % of net sales 1.7 6.7 -13.6 -7.7 Net cash flow generated from: Operating activities 3,430 -433 88 40 Investing activities -385 359 -182 1,439 Financing activities -1,725 332 -2,945 -1,144 Increase/decrease in cash and cash equivalents 1,320 258 -3,039 335 Personnel at the end of the period 338 338 387 356 1) Cash flows represent all operations. All figures of the financial tables are rounded, and consequently the sum of individual figures can deviate from the presented sum figure. The figures are unaudited. In the written report, the figures in parenthesis refer to the corresponding period in the previous year. OKMETIC OYJ Antti Rasilo President 19 For further information, please contact: President Antti Rasilo, Okmetic Oyj, Tel. +358 9 5028 0232, email: antti.rasilo@okmetic.com Senior Vice President, Finance Esko Sipilä, Okmetic Oyj, Tel. +358 9 5028 0286, email: esko.sipila@okmetic.com Distribution: Helsinki exchanges Principal media IN BRIEF Okmetic - take it higher Okmetic is a technology company that manufactures and carries out further processing on high-quality silicon wafers for the sensor and semiconductor industries. The company also sells technology. Okmetic's wafers are part of a further processing chain, which produced end products that improve human interaction and quality of life. Okmetic's products are based on innovative product development, an efficient production process and a strong partner network. The company offers its customers solutions that enhance their competitiveness and profitability. Okmetic has plants in Vantaa, Finland and in Allen, Texas in North America. The company is quoted on the Helsinki Stock Exchange (Nordic Small Cap list: OKM1V). More information about the company can be found at www.okmetic.com.