AN EVENTFUL & SUCCESSFUL YEAR

AN EVENTFUL & SUCCESSFUL YEAR 

KEY EVENTS DURING THE YEAR
• Acquisition of IVM Automotive and Caran.
• Introduction of cost-cutting scheme
• Sale of the Zpider business area

FOURTH QUARTER
• Sales rose by 147% to SEK 896 million (363 m). Organic growth reached 15%*
• Profit after tax was SEK 183 million (2 m)
• Earnings per share (EPS) after dilution was SEK 10.30 (0.13)

JANUARY - DECEMBER
• Sales rose by 83% to SEK 2,497 million (1,361 m). Organic growth reached 12%*
• Profit after tax was SEK 228 million (48 m)
• Earnings per share (EPS) after dilution was SEK 12.82 (2.59)

* The information for the fourth quarter and for the full year 2007, including
comparable data for last year, applies to the remaining businesses in the Group,
i.e. excluding  the sold Zpider business area. 

KEY EVENTS DURING 2007
Semcon acquired IVM Automotive of Germany on 1 April and Caran on 31 August.
Both companies have sales of around SEK 900 million each and both have around
1,000 employees. The strategy behind the acquisitions is to create a bigger
global business, partly to take on bigger, more complex engineering assignments
and partly to be close to customers. The new Group is now one of the world's
biggest suppliers of technical development services to the automotive industry,
for both cars and trucks, and is well equipped to meet the demands set by our
international customers. The acquisition of Caran also means that we expand our
range of services to the engineering industry and become one of the biggest
suppliers in Northern Europe.

A cost-cutting scheme at the central level was introduced in Q2. Measures
implemented during the year are expected to save around SEK 30 million a year in
Sweden and SEK 15 million in Germany, achieving their full effect in the 2008
financial year. The costs for carrying out the cost-cutting scheme affected the
2007 results by SEK 19 million.

The acquisition of Caran has also meant major savings in the business, including
costs for administrative personnel and the possibilities of utilising joint IT
systems and premises. The overall annual savings are estimated at around SEK 40
million. The cost of implementing the scheme was SEK 15 million in Q4 and SEK 19
million for the full year.

In order to focus our resources on our core business in product development and
information solutions, the Zpider business area was sold on 31 December to the
Finnish IT company Enfo Oyj. The sale also helped finance the acquisition of IVM
Automotive and Caran. The sale of Zpider strengthened the company's equity and
generated a capital gain of SEK 257 million. Net borrowings have fallen by SEK
311 million during Q1 2008, which has drastically reduced debt/equity.  

SALES AND EARNINGS ANALYSIS
Information for Q4 and for 2007, including comparable data for last year, refer
to the remaining business in the Group, i.e. excluding the Zpider business,
unless otherwise stated.

Fourth quarter
Group sales rose by 147% to SEK 896 million (363 m) in Q4. Organic growth for
the period was 15%. 
The operating loss after depreciation was SEK 58 million (-3 m), giving an
operating margin of -6.5% (-0.8). One-off costs of SEK 127 million (25) affected
operating earnings after depreciation, and refer to the integration of Caran,
SEK 15 million, and write down of goodwill, SEK 112 million, of which IVM
Automotive's value has been written down by SEK 100 million. 

The German market is one of the most important in the automotive industry and is
why the acquisition of IVM Automotive creates a good strategic platform for our
international expansion. A impairment test shows however that the purchase price
was high in relation to the company earnings capacity under the present market
conditions. Excluding one-off costs the operating profit was SEK 69 million (22
m) and the operating margin 7.7% (6.0).

The loss after net financial items was SEK 69 million (-4 m). Net financial
items was SEK -11 million (-1 m). The drop relates to the acquisition of IVM
Automotive and Caran. The profit after tax for divested business amounted to SEK
263 million (9 m) giving a profit after tax for the Group of SEK 183 million (2
m ). EPS after dilution SEK 10.30 (0.13).

January to December
The operating income during the year was SEK  2,497 million (1,361 m). The
organic growth was 12%. 

The operating loss after depreciation was SEK 11 million (+52 m). This gave an
operating margin of -0.4% (3.8). The operating profit after depreciation has
been hit with one-off costs of SEK 162 million (31 m). (See note 1 on page 11
for more information). Excluding these items the operating profit was SEK 150
million (82 m) and the operating margin 6.0% (6.1). 
The loss after net financial items was SEK 35 million (50 m). Tax costs were SEK
21 million (19 m). Non-deductible write down of goodwill of SEK 112 has affected
the profit before tax. The profit after tax for divested business amounted to
SEK 284 million (17 m). The profit after tax for the Group was SEK 228 million
(48 m). EPS after dilution was SEK 12.82 (2.59).

SHARE DIVIDEND 
In accordance with Semcon's dividend policy, consideration is given to the
company's financial position and capital requirements for continued expansion,
and due to the acquisition of IVM Automotive and Caran the Board proposes that
no dividend be paid for 2007 (0).

OUTLOOK
Demand is expected to remain upbeat and a continued healthy earnings trend is
expected throughout 2008 on the back of the savings and integration scheme.