Elcoteq SE's Interim Report January-March 2011 (unaudited)

Elcoteq SE
Stock Exchange Release
May 4, 2011, at 9.00 am (EET)


Interim Report January-March 2011 in brief

  * operating result increased slightly although sales decreased
  * net sales were affected by shift in EMS customer portfolio according to
    company's new strategy and by lower AMS volumes especially in the American
    service centers
  * fixed costs were reduced by 30% compared to the Q1/2010
  * the second half of the year is expected to be profitable
  * actions for balance sheet strengthening continue




+---------------------------------------------------+-------+-------+----------+
|Key figures                                        |Q1/2011|Q1/2010|Q1-Q4/2010|
+---------------------------------------------------+-------+-------+----------+
|Net sales, MEUR                                    |191.4  |220.5  |1069.9    |
+---------------------------------------------------+-------+-------+----------+
|Operating result, MEUR                             |-11.1  |-12.9  |-18.1     |
+---------------------------------------------------+-------+-------+----------+
|Result before taxes, MEUR                          |-20.9  |63.0   |43.7      |
+---------------------------------------------------+-------+-------+----------+
|Earnings per share, MEUR                           |-0.62  |1.21   |0.45      |
+---------------------------------------------------+-------+-------+----------+
|Cash flow after investing activities, MEUR         |       |       |          |
|                                                   |-12.2  |-23.3  |39.3      |
+---------------------------------------------------+-------+-------+----------+
|Rolling 12-month return on capital employed, ROCE, |       |       |          |
|%                                                  |-1.3   |11.4   |30.4      |
+---------------------------------------------------+-------+-------+----------+
|Interest-bearing net debt                          |25.0   |103.7  |12.6      |
+---------------------------------------------------+-------+-------+----------+
|Gearing                                            |0.3    |1.0    |0.1       |
+---------------------------------------------------+-------+-------+----------+
|Solvency, %                                        |21.6   |19.4   |20.8      |
+---------------------------------------------------+-------+-------+----------+


Jouni Hartikainen, CEO and President of Elcoteq:

"The year started with mixed results. The completed acquisition of BroadTech
Inc. demonstrated that our new Life Cycle Services strategy implementation has
started strongly.  Also the seasonality related volume fluctuation of the EMS
business was predictable and in-line with our expectations, but the volume
development in After Market Services business fell clearly short of our
expectations. There were unpredictable shortages in our two biggest AMS
customers' business volumes both in the Americas and partly in Europe - for
different coincidental reasons.

This negative development indicates that our AMS customer base is not balanced
enough, yet. Our recent acquisition of the US based BroadTech will on its part
address the issue: combined with our existing set-up in Mexico it has enhanced
our service offering significantly in North America and is accelerating business
development with both existing and new customers in the region.  Despite of the
unsatisfactory volume development during first quarter we see that the
underlying strong demand for after market services and need for the new service
solutions have not changed.

Although we can be satisfied with the development of our cost base and cost
competitiveness in general, we cannot be happy with the speed of the results
generated by them. We were able to improve our operating results with lower
sales, but not fast enough. It is clearly visible in our figures that the
transition we have been going through has hit us relatively hardest in Asia,
where business volumes were extremely low.  We simply have not been able to
replace the high volume business smoothly with the new type of business we are
actively hunting for - despite new customer wins and related ramp-ups."


Outlook

Second-quarter net sales are expected to reach the same level as the first
quarter of 2011. Operating income for the second quarter is expected to remain
negative while the second half of the year is expected to be profitable thanks
to expected higher sales volumes. Due to the lower than expected start to the
year and supply chain uncertainties caused by the situation in Japan, operating
income for the whole year may not be positive. On the other hand additional
business from new customers may have positive impact on the outlook for the
second half of the year.

Elcoteq plans its material purchases and capacity based on the forecasts
received from customers and market analysis. Such forecasts may fluctuate during
the forecast period, causing uncertainty in the company's own forecasts.

New disclosure policy

Elcoteq SE follows the new disclosure procedure initiated by the Finnish
Financial Supervisor
Authority (Standard 5.2b). The Financial Statement Bulletin is published as a
PDF attachment to this stock exchange release. It is also available on the
company's website (www.elcoteq.com).

Financial Information 2011

The interim reports for Q2 and Q3 in 2011 will be published as follows:
  * Interim report January-June on July 20, 2011
  * Interim report January-September on October 26, 2011


Press Conference

Elcoteq will hold a combined press conference and conference call in English on
Wednesday, May 4, at 2.00 pm (EET) at Elcoteq's Espoo office (address:
Sinimäentie 8B, 02631 Espoo).

To participate via conference call, please dial in a few minutes before the
beginning of the event: +44 (0) 207 897 2852 (international) or +
358 9 231 944 61 (FI). The conference code is 2929451641#.

The presentation material used at the press conference (PDF) will be available
on the company's website at www.elcoteq.com after the event.

Further information:

Jouni Hartikainen, President and CEO, +358 10 413 11
Olli-Pekka Vanhanen, Senior Vice President, Business Control and Accounting, +
358 10 413 11

About Elcoteq

Elcoteq SE is the global Life Cycle Service Partner for high-tech product and
service companies. Elcoteq has a proven track record in electronics
manufacturing and after market services, and a global service network close to
its customers coupled with modern manufacturing and testing equipment and
consistent systems and processes.

Elcoteq's Electronics Manufacturing Services (EMS) Business Segment provides its
customers globally with engineering, manufacturing, and fulfillment services.
EMS products include mobile phones and their accessories, set-top boxes, LED
lighting products, flat panel TVs, infrastructure systems, and other industrial
segment products.

Elcoteq's After Market Services (AMS) Business Segment provides its customers in
the communications and consumer electronics industries with global reverse
logistics, depot repair, refurbishment, recycling and salvage services, and also
AMS-specific engineering and customer support services.

Elcoteq SE is listed on the NASDAQ OMX Helsinki Ltd.  For more information,
visit the Elcoteq website at www.elcoteq.com.


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