SCANFIL GROUP'S FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2007 January - December - 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 - Earnings per share were EUR 0.24 (0.14) - The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0,08 (0,10) and an additional dividend of EUR 0,04 per share October - December - 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 - Earnings per share amounted EUR 0.06 (0.05) DEVELOPMENT OF OPERATIONS 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. The Company's new President Harri Takanen, MSc(Eng), took up his duties on 15 May 2007. Near the end of the review period, the Company initiated negotiations with Helkama Forste Oy to start co-operation in manufacturing in Hungary. The planned co-operation would involve manufacturing of sheet metal components and lease of production facilities from Scanfil's Hungarian subsidiary Kft. The negotiations continue. FINANCIAL DEVELOPMENT The Group's turnover in 2007 was EUR 224.6 (241,4) million, showing a decrease of 7.0% over the previous year. Distribution of turnover based on the location of customers was as follows: Finland 43 (43)%, rest of Europe 25 (29)%, Asia 30 (25)%, USA 1 (1)% and the others 1 (2)%. Competitiveness can only be maintained by continual development of production activities and by efficient management of costs with respect to the increasingly complex logistic supply chains. Scanfil has taken into account the changes in its operating environment. By planning and reorganising production within the Group, the Company has been able to retain its profitability at a satisfactory level. Operating profit for the review period totalled EUR 18.6 (11.4) million, representing 8.3 (4.7)% of turnover. Net profit amounted to EUR 14.1 (8.2) million or 6.3 (3.4)% of turnover. Earnings per share amounted to EUR 0.24 (0.14) and return on investment was 14.1 (9.0)%. A total of EUR 1.4 million of non-recurring income items have been recorded for the year 2007, most of which are profits from the sale of fixed assets. Write-downs of the material and product stores of terminated products totalled EUR 1.5 million. Year of comparison 2006 result was burdened by a non-recurring expense item of EUR 7.6 million related to the termination of the Belgian subsidiary's production. Income tax includes taxes corresponding to the result for the financial year. A deferred tax liability of EUR 1.2 million was entered for the total retained earnings of the Estonian subsidiary, as the retained earnings will be paid out as dividends in 2008. Taxes based on result have not been entered before. Turnover in October - December was EUR 54.4 (51.5) million. Operating profit in the fourth quarter totalled EUR 5.5 (2.7) million, representing 10.2 (5.2)% of turnover. Earnings per share were EUR 0.06 (0.05). When comparing the figures of the periods, it should be kept in mind that operations in the final quarter of 2006 were exceptional because of a very rapid and dramatic drop in demand, due to structural arrangements in the sector. In the final quarter of 2007, both operations and performance were normal, and comparison with the third quarter of 2007 gives the correct picture of the development. Owing to the structure of the company's operations, the effects of changes in exchange rates on the result were minimal. If the US dollar remains weak or continues to weaken, it will mainly have a declining impact on the turnover and expenses of the Asian operations. Changes in the US dollar exchange rate will not have a significant effect on the relative profitability of the Asian operations. FINANCING AND CAPITAL EXPENDITURE The Group enjoys a strong financial position. Liabilities amounted to EUR 47.9 (46.2) million, EUR 40.4 (38.7) million of which were non-interest-bearing and EUR 7.5 (7.5) million interest-bearing. Liquid cash assets totalled EUR 50.0 (31.8) million. The equity ration was 73.6 (73.6)% and gearing -31.8 (-19.1)%. Cash flow from operating activities in the review period was positive at EUR 20.2 (18.8) million. Cash flow from investments was EUR 4.9 (-5.0) million, and cash flow from funding stood at EUR -5.9 (-19.1) million. Change in working capital during the financial period was EUR 0.4 (2.9) million and dividends for previous financial period were paid to the amount of EUR 5.9 (6.0) million. Gross investments in fixed assets totalled EUR 1.4 (8.5) million, which is 0.6 (3.5)% of turnover. Investments consists mainly machinery and equipment purchases. Depreciations were EUR 7.2 (8.3) million. During the financial period the company sold its industrial property in Äänekoski (Finland) and Hoboken (Belgium). BOARD OF DIRECTORS' AUTHORISATION On 12 April 2007, the Annual General Meeting authorised the Board of Directors to decide on the repurchase of a maximum of 4,000,000 company shares, using non-restricted equity, and on the disposal of a maximum of 5,998,449 company shares. The Board of Directors has no existing share issue authorisations or authorisations to issue convertible bonds with warrants. OWN SHARES On 31 December 2007, the company owned a total of 1,998,449 of its own shares, the counter-book value of which totalled EUR 499,612 and which represented 3.3% of the company's share capital and votes. During the review period, the company disposed of 1,551 of its own shares in conjunction with the share-based profit-sharing scheme of the Group's Management Team. SHARE TRADING AND SHARE PERFORMANCE The highest trading price during the review period was EUR 2.49 and the lowest EUR 1.92, the closing price for the period standing at EUR 1.95. A total of 8,947,228 shares were traded during the period, corresponding to 14.7% of the total number of shares. The market value of the shares on 31 December 2007 was EUR 118,4 million. GROUP STRUCTURE On 31 December 2007, the Scanfil Group consisted of parent company Scanfil plc (Sievi), Scanfil (Suzhou) Co., Ltd. and Scanfil (Hangzhou) Co., Ltd. in China, Scanfil Kft. (Biatorbagy) in Hungary and Scanfil Oü (Pärnu) in Estonia. Scanfil's Belgian subsidiary Scanfil N.V. (Hoboken) has not been engaged in any production activities after the year 2006. The Group holds the entire share capital in all of its subsidiaries. CPS Elektroniikka Oy, a subsidiary of the Scanfil Group, was dissolved on 15 June 2007 in accordance with the decision of the Annual General Meeting. The company has not engaged in any production activities since 30 April 2005. PERSONNEL At the end of the review period the Group employed 2,061 (2,073) people, of whom 1548 (1444) worked abroad. The Group employed an average 2,105 (2,213) people during the year. BOARD OF DIRECTORS' PROPOSALS TO THE ANNUAL GENERAL MEETING Dividend for 2007 The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.08 per share be paid based on the annual result of the financial year ending on 31 December 2007 according to the dividend policy, plus an additional dividend of EUR 0.04 per share, totalling EUR 7,045,898.52. The Board proposes that the matching date for payment of dividend be 8 April 2008 and that the dividend is paid on 15 April 2008. OTHER EVENTS IN THE REVIEW PERIOD The prosecutor pressed charges against Scanfil plc's Chairman of the Board of Directors and Group CEO Jorma J. Takanen and the President at that time, who is no longer working for Scanfil plc, in a suspected information offence concerning alleged delay of profit warning at the turn of 2005-2006. The prosecutor called for Scanfil plc to be sentenced to a fine imposed on a corporation of EUR 25,000. Scanfil plc denied all charges. EVENTS AFTER THE REVIEW PERIOD In its decision issued on 21 January 2008, the District Court of Helsinki dismissed all charges against the Chairman of Scanfil plc's Board of Directors and Scanfil plc's former President in legal proceedings that concerned a delayed profit warning at the turn of 2005-2006. The District Court of Helsinki also dismissed the prosecutor's call to sentence Scanfil plc to a fine imposed on a corporation of EUR 25,000. FUTURE PROSPECTS Demand in the industrial electronics sector is expected to continue growing in 2008. In addition, negotiations are in progress with potential new customers in the industrial electronics sector. The growth of the telecommunications equipment market is generally estimated to remain very low in 2008. Turnover from telecommunications equipment supplied by Scanfil is expected to remain unchanged from year-end 2007. Scanfil expects its turnover in 2008 to be about the same as in 2007. Profitability for the full year is estimated to be at a satisfactory level. However, market predictability is still poor. The Company's good financial position provides an opportunity to actively seek various means and arrangements that will put Scanfil's operations back on a growth track. OPERATIONAL RISKS AND UNCERTAINTIES The most important operational uncertainties and risks associated with telecommunications technology contract manufacturing include low visibility in the market and extremely poor predictability, tough price competition, availability of materials and rapid and significant fluctuation of demand. In the industrial electronics sector, the demand looks more stable, with risks and uncertainties mainly associated with global economic development and subsequent changes in demand. For more information on risk management, please visit the Company website at www.scanfil.com. Select Investors and Corporate Governance. APPENDICES: Appendix 1: Consolidated profit and loss statements and balance sheet Appendix 2: Consolidated cash flow statement Appendix 3: Key indicators Appendix 4: Calculation of changes in shareholders' equity Appendix 5: Segment information Appendix 6: Consolidated contingent liabilities Appendix 7: Key indicators quarterly Financial statements have been prepared in accordance with the recognition and measurement principles of the IFRS. Individual figures and grand totals have been rounded to the nearest million euros, so they will not always add up. The figures are unaudited. APPENDIX 1 CONSOLIDATED PROFIT AND LOSS STATEMENT EUR million 2007 2006 2007 2006 10 - 12 10 - 12 1 - 12 1 - 12 NET SALES 54.4 51.5 224.6 241.4 Increase or decrease of inventory of finished products 1.0 0.7 - 0.6 - 0.4 Manufacturing for own use 0.0 Other operating income 0.0 1.2 2.1 2.1 Expenses - 48.3 - 49.0 -200.3 - 223.5 Depreciation - 1.6 - 1.7 - 7.2 - 8.3 OPERATING PROFIT 5.5 2.7 18.6 11.4 Financial income and expenses 0.1 0.7 0.4 0.7 PROFIT BEFORE TAXES 5.7 3.3 19.0 12.1 Direct tax - 2.3 - 0.3 - 4.9 - 3.8 NET PROFIT FOR THE PERIOD 3.4 3.0 14.1 8.2 Attributable to: Equity holders of the Company 3.4 3.0 14.1 8.2 Earnings/share (EPS), EUR 0.06 0.05 0.24 0.14 CONSOLIDATED BALANCE SHEET EUR million 30.12. 31.12. 2007 2006 ASSETS Long-term assets Tangible current assets 36.5 43.1 Goodwill 2.5 2.5 Other intangible assets 1.1 1.0 Sellable investments 0.0 0.3 Receivables 0.2 0.2 Deferred tax receivables 0.4 0.2 Long-term assets total 40.8 47.4 Short-term assets Inventories 33.6 41.4 Sales and other receivables 52.3 43.0 Prepayments 0.1 0.0 Financing assets with result impact entered at current value 8.9 Cash and cash equivalents 50.0 22.9 Short-term assets total 136.1 116.2 Non-current assets held for sale 4.6 10.0 ASSETS TOTAL 181.5 173.6 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity that belongs to the owners of the parent company Share capital 15.2 15.2 Premium fund 16.1 16.1 Own shares - 6.9 - 6.9 Other funds 2.6 1.9 Translation differences - 2.6 - 0.7 Value change fund 0.1 Profits accrued 109.3 101.7 Shareholders' equity that belongs to the owners of the parent company total 133.6 127.4 Shareholders' equity total 133.6 127.4 Long-term liabilities Deferred tax liabilities 2.3 1.4 Reserves 7.0 8.5 Interest-bearing liabilities 7.5 Long-term liabilities total 9.3 17.4 Short-term liabilties Procurement and other liabilities 30.4 28.2 Current income tax liabilities 0.7 0.6 Interest-bearing liabilities 7.5 Short-term liabilities total 38.6 28.8 Liabilities total 47.9 46.2 SHAREHOLDERS' EQUITY AND LIABILITIES TOTAL 181.5 173.6 APPENDIX 2 CONSOLIDATED CASH FLOW STATEMENT 2007 2006 EUR million 1 - 12 1 - 12 Cash flow from operations Net profit 14.1 8.2 Adjustment for the net profit of the period 8.7 13.6 Change in net working capital 0.4 2.9 Interests paid and other financial expenses - 0.4 - 0.7 Interests received 1.3 0.8 Taxes paid - 4.0 - 6.1 Net cash flow from operations 20.2 18.8 Cash flow from investments Investments in tangible and intangible assets - 1.7 - 7.8 Proceeds from sale of tangible and intangible assets 6.3 2.8 Proceeds from sale of other investments 0.2 0.0 Net cash flow from investments 4.9 - 5.0 Cash flow from funding Acquiring of own shares 0.0 - 2.8 Repayment of long-term loans - 10.4 Dividends paid - 5.9 - 6.0 Net cash flow from funding - 5.9 - 19.1 Change in assets 19.2 - 5.3 Liquid assets at the beginning of the period 31.8 37.8 Changes in exchange rates - 0.6 - 0.9 Changes in fair value of investments - 0.3 0.1 Liquid assets at the end of the period 50.0 31.8 APPENDIX 3 KEY INDICATORS 2007 2006 1 - 12 1 - 12 Return on equity, % 10.8 6.4 Return on investment, % 14.1 9.0 Interest-bearing liabilities, EUR million 7.5 7.5 Gearing, % - 31.8 - 19.1 Equity ratio, % 73.6 73.6 Gross investments in fixed assets, EUR million 1.4 8.5 % of net turnover 0.6 3.5 Personnel, average 2 105 2 213 Earnings per share, EUR 0.24 0.14 Shareholders' equity per share, EUR 2.27 2.17 Dividend per share, EUR 0.12 0.10 Dividend per earnings, % 49.8 72.4 Effective dividend yield, % 6.15 4.22 Price-to-earnings ratio (P/E) 8.1 17.2 Share price Year's lowest share price, EUR 1.92 2.30 Year's highest share price, EUR 2.49 4.67 Average share price for year, EUR 2.19 3.47 Share price at year's end, EUR 1.95 2.37 Market capitalisation at end of year, EUR million 118.4 143.9 Number of shares at the end of period, 000's 60 714 60 714 - not counting own shares 58 716 58 714 - weighted average 58 716 59 557 The company does not have any liabilities resulting from derivative instruments. Owing to the nature of the sector, the company's order book covers only a short period of time and does not give an accurate picture of future development. APPENDIX 4 CALCULATION OF CHANGES IN SHAREHOLDERS' EQUITY EUR million A = Share capital B = Premium fund C = Own shares D = Other reserves E = Translation differences F = Fair value reserve G = Retained earnings H = Total I = Shareholder's equity total SHAREHODER'S A B C D E F G H I EQUITY 1.1.2006 15.2 16.1 -4.1 1.3 2.5 0.1 100.0 131.1 131.1 Translation difference - 3.1 - 3.1 - 3.1 NET INCOME RECOGNIZED DIRECTLY IN EQUITY - 3.1 - 3.1 - 3.1 Net profit for the period 8.2 8.2 8.2 TOTAL RECOGNIZED INCOME AND EXPENCE - 3.1 8.2 5.1 5.1 Payment of dividend - 6.0 - 6.0 - 6.0 Transfer to funds 0.6 - 0.6 0 0 Acquiring of own shares - 2.8 - 2.8 - 2.8 SHAREHOLDER'S EQUITY 31.12.2006 15.2 16.1 - 6.9 1.9 - 0.7 0.1 101.7 127.4 127.4 SHAREHOLDER'S EQUITY A B C D E F G H I 1.1.2007 15.2 16.1 - 6.9 1.9 - 0.7 0.1 101.7 127.4 127.4 Value change - 0.1 - 0.1 - 0.1 Translation difference - 2.0 - 2.0 - 2.0 NET INCOME RECOGNIZED DIRECTLY IN EQUITY - 2.0 - 0.1 - 2.1 - 2.1 Net profit for the period 14.1 14.1 14.1 TOTAL RECOGNIZED INCOME AND EXPENCE - 2.0 14.1 12.0 12.0 Payment of dividend - 5.9 - 5.9 - 5.9 Transfers to funds 0.7 - 0.7 0 0 Acquiring of own shares 0.0 0.0 0.0 SHAREHOLDER'S EQUITY 31.12.2007 15.2 16.1 - 6.9 2.6 - 2.6 0.0 109.3 133.6 133.6 APPENDIX 5 SEGMENT INFORMATION ACCORDING GEOGRAPHICAL AREA EUR million 2007 2006 1 - 12 1 - 12 TURNOVER Europe 150.2 188.1 Asia 92.4 72.5 Turnover between segments - 18.0 - 19.1 Total 224.6 241.4 OPERATING PROFIT Europe 7.5 4.9 Asia 11.1 6.5 Total 18.6 11.4 The Group operates in single sector. APPENDIX 6 CONSOLIDATED CONTINGENT LIABILITIES EUR million 2007 2006 1 - 12 1 - 12 Real estate mortgages 6.2 Business mortgages 16.4 16.4 Guarantees pledged 0.7 0.7 Rental liabilities 0.7 0.5 The parent company has arranged a EUR 7.8 million bank guarantee to secure the payment of contributions related to Scanfil NV's restructuring. Scanfil NV's balance sheet includes a corresponding provision. APPENDIX 7 KEY INDICATORS QUARTERLY EUR million Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Turnover, MEUR 54.4 59.1 58.9 52.2 51.5 67.5 62,4 60,1 Operating profit, MEUR 5.5 5.6 4.0 3.6 2.7 7.0 5.1 - 3.4 Operating profit, % 10.2 9.4 6.7 6.8 5.2 10.4 8.2 - 5.7 Net income, MEUR 3.4 4.5 3.2 3.1 3.0 6.1 3.7 - 4.5 EPS, EUR 0.06 0.08 0.05 0.05 0.05 0.10 0.06 - 0.08 The company's Annual Report for 2007 will be published in week 13. The company will publish interim reports in 2008 as follows: January-March on 25 April, January-June on 5 August and January-September on 24 October. Scanfil plc's Annual General Meeting will be held on 3 April 2008 at the company's head office in Sievi, Finland, at 2.00 pm. SCANFIL PLC Harri Takanen President Additional information: President Harri Takanen Tel +358 8 4882 111 Distribution Helsinki Exchanges Major Media www.scanfil.com Scanfil plc is a global contract manufacturer and systems supplier for communication and industrial electronics with over 30 years experience in demanding contract manufacturing Scanfil offers contract-manufacturing services as a systems supplier to the telecommunication industry, mainly to wireless communication sector, as well as to the industrial electronics industry. Main telecommunication products are among others integrated enclosure systems for mobile phone and ADSL networks and assembly and testing of modules related to enclosure systems. Examples of industrial electronics products include box-built tested devices, various electronic modules, backplanes and assembled circuit boards as well as cable assemblies. Production plants are situated in China, Hungary, Estonia and Finland. Not for release over US newswire services. Forward looking statements: certain statements in this stock exchange release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of Scanfil Oyj to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this stock exchange release, such statements use such words as "may," "will," "expect," "anticipate," "project," "believe," "plan" and other similar terminology. New risk factors may arise from time to time and it is not possible for management to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance and achievements of Scanfil Oyj to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The forward-looking information contained in this stock exchange release is current only as of the date of this stock exchange release. There should not be an expectation that such information will in all circumstances be updated, supplemented or revised, except as provided by the law or obligatory regulations, whether as a result of new information, changing circumstances, future events or otherwise.