Teleca is expecting weaker first quarter numbers than previously anticipated

Teleca is expecting weaker first quarter numbers than previously anticipated

Over recent few weeks, Teleca has experienced delays or cancellations of
previously agreed and expected contracts from key clients. This has led to a
decline in the utilization rate in the first quarter of 2008 and is expected to
also have a negative effect on the second quarter of 2008.  

The company is actively working on re-assigning resources to alternative
projects and customers, but due to the limited short term visibility, Teleca has
decided to take a cautious view on 2008. As a consequence, the company will
review its expense planning for the remainder of 2008 to maintain its goal of
improved profitability.     

Teleca delivers engineering services to the world's leading mobile phone
companies and their key suppliers. Teleca views the decline in demand as a
consequence of the mobile industry being cautious with regard to the adverse
sentiment driven by the US market situation. While Teleca expects the situation
to be of short term nature, the company will take all relevant measures to
protect profitability until better visibility of demand returns. In a medium- to
long-term perspective, Teleca is very confident that the demand for mobile
device software as well as the demand for outsourced software services will
increase. 

Teleca is committed to its growth strategy of expanding with its wireless
know-how into new industry segments, such as the Internet industry as well as
expanding beyond the current embedded software expertise categories. The company
expects the outsourcing industry to consolidate around a few global suppliers.
With its solid customer base and know-how, Teleca is very well positioned for
gaining market share through consolidation.
Current outlook: 
Revenues and margins are expected to show increasing growth in 2008.
Teleca expects slight to moderate growth in services revenue whilst a decline in
product revenue is expected. The company targets EBIT margins at 10% for the
year 2008. Margins are expected to be higher in second half of the year than in
the first half. 
New outlook:
While Teleca expects flat organic growth in 2008 compared to 2007, the Company
intends to seek growth through industry consolidation.  
The operating earnings (EBIT) in the first quarter is expected to show a small
surplus (excluding earlier announced restructuring costs of around SEK 14
million,). The EBIT margin for the second quarter is expected to be between 4%
and 8%. Given the limited visibility, Teleca has taken a cautious view with
regard to the second half of 2008. However, the Company remains committed to its
ambition to deliver a double-digit EBIT margin for the second half of 2008.   

For more information contact
René Svendsen-Tune, President and CEO, Teleca AB, mobile +45-40540068
Christian Luiga, CFO, Teleca AB, mobile +46-703751604
Mattias Stenberg, Investor Relations Manager, Teleca AB, mobile +46-706119616


Teleca is a world-leading supplier of software services to major players of the
mobile device industry. The company offers tailored solutions, systems design
and the integration of software and hardware for mobile phones. Teleca has about
2,000 employees in 11 countries in Asia, Europe and North America and is quoted
on the small cap list of the Nordic Exchange.