EFORE GROUP INTERIM REPORT NOVEMBER 2010

Espoo, Finland, 2011-05-26 08:00 CEST (GLOBE NEWSWIRE) -- EFORE PLC Interim Report May 26, 2011 9 a.m.

EFORE GROUP INTERIM REPORT NOVEMBER 2010 – APRIL 2011: OVER 40% YEAR-OVER-YEAR GROWTH IN NET SALES

Period under the review in brief (November 1, 2010 — April 30, 2011)
- Net sales totaled EUR 42.7 million (EUR 30.1 million)
- Results from operating activities was EUR 1.9 million (EUR –1.4 million)
- Profit before taxes was EUR 1.7 million (EUR –1.1 million)
- Profit for the period was EUR 1.0 million (EUR –1.0 million)
- Earnings per share was EUR 0.03 (EUR -0.02)

Second quarter in brief (February 1, 2011 — April 30, 2011)
- Net sales totaled EUR 20.8 million (EUR 15.8 million)
- Results from operating activities was EUR 0.7 million (EUR –0.9 million)
- Profit before taxes was EUR 0.7 million (EUR –0.8 million)
- Profit for the period was EUR 0.5 million (EUR –0.7 million)
- Earnings per share was EUR 0.01 (EUR -0.02)

FINANCIAL ESTIMATE FOR THE FISCAL YEAR 2011

Efore adjusted its financial estimate for fiscal year 2011 on May 17, 2011 as follows: The company estimates at least 20% year-over-year net sales growth and result of operating activities to grow to at least 4%.

Vesa Vähämöttönen, Efore’s President and CEO:

“Strong demand for mobile broadband was driving Efore’s deliveries during the second quarter. Our net sales increased by 30% year-over-year although there was a decrease in deliveries in the beginning of the quarter due to Chinese New Year’s holidays in February. We are prepared to increase our Suzhou factory capacity by 40% with new production equipment investments during this year.

Building the foundation for Electric Vehicles power products business is progressing as planned.”

NOVEMBER – APRIL NET SALES AND FINANCIAL DEVELOPMENT

Net sales for the period under the review totaled EUR 42.7 million (EUR 30.1 million). Net sales by customer group was as follows: Telecommunication 79.2 % (72,0 %) and industrial electronics 20.8 % (28,0 %). Geographically Efore’s deliveries were to the following areas: EMEA EUR 20.0 million (EUR 15.5 million), APAC EUR 21.4 million (EUR 13.9 million) and the Americas EUR 1.3 million (EUR 0.7 million) which totaled EUR 42.7 million (EUR 30.1 million). Final geographical distribution of Efore’s products deviates from the before mentioned as Efore’s customers distribute further the products from the logistics centers to other markets.

The results from operating activities was EUR 1.9 million (EUR –1.4 million).

NET SALES AND FINANCIAL DEVELOPMENT FOR THE SECOND QUARTER

Net sales for the second quarter totaled EUR 20.8 million (EUR 15.8 million). Net sales by customer group was as follows: Telecommunication 79.5 % (73,9 %) and industrial electronics 20.5 % (26.1 %). Geographically Efore’s deliveries were to the following areas: EMEA EUR 10.4 million (EUR 8.4 million), APAC EUR 10.0 million (EUR 7.1 million) and the Americas EUR 0.4 million (EUR 0.4 million) which totaled EUR 20.8 million (EUR 15.8 million).

The results from operating activities was EUR 0.7 million (EUR –0.9 million).

BUSINESS DEVELOPMENT

Investment on product and technology development during the period under review was EUR 3.5 million (EUR 3.5 million) representing 8.1 % (11.5 %) of net sales.

Strong demand in telecom sector continued and was more evenly balanced between customers. Chinese New Year’s holidays in February caused a decrease in deliveries in the beginning of the quarter.

Efore and the Finnish Defence Forces agreed that Efore will deliver EMP protected power supply system cabinets to government’s security network project (TUVE). Deliveries start during the summer 2011. The value of the contract for Efore is about EUR 3 million in 2011.

Efore announced in January 2011 that it will establish a new company for electric vehicle (EV) power electronic products in China. Efore (Suzhou) Automotive Technology has now been established in Suzhou International Science Park and the business license has been granted. New premises have been chosen for product development purposes. Also new key persons have been recruited. Efore has several development projects with customers ongoing in this business area.

In order to maintain the delivery flexibility under increased demand conditions the company prepares to invest EUR 3,5 million to production equipment in its Suzhou factory during 2011. Total capacity increase is 40% and first phase will be in use during the summer 2011.

INVESTMENTS

Group investments in fixed assets during the period under review amounted to EUR 1.5 million (EUR 0.8 million).

At the end of the period under review capitalized product development costs amounted to EUR 0.8 million (EUR 1.3 million).

FINANCIAL POSITION

The Group’s financial position during the period under review was good.

The consolidated interest-bearing cash reserves exceeded interest-bearing liabilities by EUR 4.0 million (EUR 7.3 million). The consolidated net financial income was EUR -0.2 million (EUR 0.4 million). The cash flow from business operations was EUR 2.9 million (EUR 3.0 million). The cash flow after investment was EUR 1.4 million (EUR 2.2 million).

The Group’s solvency ratio was 46.4 % (50.9 %) and the gearing was –19.4 % (-38.4 %).

Liquid assets excluding undrawn credit facilities totaled EUR 6.9 million (EUR 7.7 million) at the end of the period under review. The balance sheet total was EUR 44.4 million (EUR 37.6 million).

PERSONNEL

The number of the Group’s own personnel including temporary personnel averaged 912 (773) during the period under review and at the end of the period under review it was 954 (807). At the end of April 2011 more than 92% of the personnel worked outside of Finland.

SHARES, SHARE CAPITAL AND SHAREHOLDERS

The total number of Efore Plc shares at the end of the period under review was 42.529.648 and the registered share capital was EUR 15.000.000.

At the end of the fiscal year the number of the Group's own shares was 922.149. In addition to this Efore Management Oy, a company belonging to Efore group owned 2.084.400 pcs of Efore shares.

The highest share price during the period under review was EUR 1.08 and the lowest price was EUR 0.69. The average price during the period under review was EUR 0.90 and the closing price was EUR 0.92. The market capitalization calculated at the final trading price during the period under review was EUR 36.4 million.

The total number of Efore shares traded on the Nasdaq OMX Helsinki during the period under review was 9.7 million and their turnover value was EUR 8.7 million. This accounted for 22,8 % of the total number of shares. The number of shareholders totaled 3269 at the end of the period under review.

ACCOUNTING POLICIES

The financial statement has been drawn up in accordance with IAS 34 Standard on Interim Financial Reporting and the Group's accounting principles presented in the 2010 annual report. The information in this release is unaudited.

All the figures in the report have been rounded up/down, for which

reason the total of the individual figures when added together may be different from the total shown.

The comparable information for year 2010 has been changed for net sales and other operating income. Product development income, totaling EUR 0.2 million has been transferred from other operating income to net sales during the second quarter.

SHORT-TERM RISKS AND FACTORS OF UNCERTAINTY

The market typical fluctuation in demand can cause rapid changes in Efore’s business. The most significant business risks are related to the success of key customers in their markets and to Efore's delivery capability for the key customers.

Progress of the EV power electronics projects depends on the customers’ own project schedules and the establishment of the whole market.

A more comprehensive report on risk management is presented on the company's web-sites.

OUTLOOK

Strong demand for Efore’s main market, telecom power products is expected to continue over whole fiscal year. WCDMA/HSPA (3G) continues as the main technology but LTE (4G) deliveries will increase. Efore’s main telecom sector products are used in these configurations.

FINANCIAL ESTIMATE FOR THE FISCAL YEAR 2011

Efore adjusted its financial estimate for fiscal year 2011 on May 17, 2011. As announced in the stock exchange release favorable financial development is based on the increased demand for Efore’s telecom and industrial power products and on Efore’s capability to respond to it. Strong demand is estimated to continue and it reflects positively to the whole fiscal year.

Estimate was adjusted as follows: The company estimates at least 20% year-over-year net sales growth and result of operating activities to grow to at least 4%.

TABLES


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR million	Feb./11-	Feb./10-	Nov./10-	Nov./09-	Nov./09-
	Apr./11	Apr./10	Apr./11	Apr./10	Oct./10
	3 months	3 months	6 months	6 months	12 months


Net sales	20,8	15,8	42,7	30,1	69,7

Change in inventories of
finished goods and work in progress	1,0	0,0	2,8	0,5	0,9
Other operating income	0,0	0,1	0,1	0,1	0,2
Materials and services	-15,1	-10,8	-31,6	-20,7	-48,1
Employee benefits expenses	-3,7	-3,3	-7,2	-6,2	-12,6
Depreciation	-0,6	-0,8	-1,3	-1,6	-3,1
Impairments	0,0	0,0	0,0	0,0	0,0
Other operating expenses	-1,8	-1,9	-3,5	-3,5	-6,9
RESULTS FROM OPERATING ACTIVITIES	0,7	-0,9	1,9	-1,4	0,0
% net sales	3,5	-5,7	4,4	-4,7	0,0
Financing income	0,1	0,2	0,1	0,5	0,5
Financing expenses	-0,2	0,0	-0,4	-0,1	-0,5
Share of profit of associated
companies	0,1	0,0	0,1	0,0	0,0
PROFIT (-LOSS) BEFORE TAX	0,7	-0,8	1,7	-1,1	0,1
% net sales	3,4	-4,9	4,0	-3,6	0,1
Tax on income from operations	-0,2	0,1	-0,7	0,1	0,1
PROFIT (-LOSS) FOR THE PERIOD	0,5	-0,7	1,0	-1,0	0,1

OTHER COMPREHENSIVE INCOME:
Translation differences	-0,8	0,3	-0,6	0,6	0,3
Total comprehensive income	-0,3	-0,5	0,4	-0,4	0,5

NET PROFIT/LOSS ATTRIBUTABLE
To equity holders of the parent	0,5	-0,7	1,0	-1,0	0,1
To non-controlling interests	0,0	0,0	0,0	0,0	0,0

TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Equity holders of the parent	-0,3	-0,5	0,4	-0,4	0,5
Non-controlling interests	0,0	0,0	0,0	0,0	0,0

EARNINGS PER SHARE CALCULATED ON PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT:
Earnings per share, basic,eur	0,01	-0,02	0,03	-0,02	0,00
Earnings per share, diluted, eur	0,01	-0,02	0,03	-0,02	0,00

INFORMATION ABOUT GEOGRAPHICAL	Feb./11-	Feb./10-	Nov./10-	Nov./09-	Nov./09-
AREAS, EUR million	Apr./11	Apr./10	Apr./11	Apr./10	Oct./10
	3 months	3 months	6 months	6 months	12 months

Americas	0,4	0,4	1,3	0,7	2,2
EMEA	10,4	8,4	20,0	15,5	32,5
APAC	10,0	7,1	21,4	13,9	35,1
Total	20,8	15,8	42,7	30,1	69,7

CONSOLIDATED STATEMENT OF FINANCIAL POSITION


EUR million			Apr. 30,		Apr. 30,			change	Oct. 31,
			2011		2010			%	2010
ASSETS
NON-CURRENT ASSETS
Intangible assets			1,3		1,8				1,5
Tangible assets			4,8		5,2				4,6
Investments in associates			0,7		0,6				0,6
Other long-term investments			0,0		0,0				0,0
NON-CURRENT ASSETS			6,8		7,6			-10,4	6,7

CURRENT ASSETS
Inventories			13,4		9,6				10,5
Trade receivables and other receivables			17,0		12,6				17,5
Tax receivable, income tax			0,3		0,1				0,1
Cash and cash equivalents			6,9		7,7				5,9
CURRENT ASSETS			37,6		30,0			25,3	34,0
ASSETS			44,4		37,6			18,1	40,6

EQUITY AND LIABILITIES
EQUITY
Share capital			15,0		34,5				15,0
Treasury shares			-2,1		-0,6				-2,1
Other reserves			21,9		1,0				21,9
Translation differences			-0,4		0,4				0,1
Retained earnings			-14,0		-16,1				-15,0
Equity attributable to equity holders of the parent			20,3		19,1				19,9
Equity attributable to non-controlling interests			0,3		0,0				0,3
EQUITY			20,6		19,1			7,8	20,2

NON-CURRENT LIABILITIES
Interest-bearing liabilities			2,3		0,1				2,6
NON-CURRENT LIABILITIES			2,3		0,1				2,6

CURRENT LIABILITIES
Interest-bearing liabilities			0,6		0,2				0,6
Trade payables and other liabilities			20,2		17,6				16,7
Tax liabilities			0,4		0,0				0,2
Provisions			0,4		0,5				0,3
CURRENT LIABILITIES			21,5		18,4				17,9
LIABILITIES			23,8		18,5				20,5
TOTAL EQUITY AND LIABILITIES			44,4		37,6			18,1	40,6

GROUP KEY FIGURES, EUR million	Feb./11-	Feb./10-		Nov./10-		Nov./09-	Nov./09-
	Apr./11	Apr./10		Apr./11		Apr./10	Oct./10
	3 months	3 months		6 months		6 months	12 months

Earnings per share, basic,eur	0,01	-0,02		0,03		-0,02	0,00
Earnings per share, diluted, eur	0,01	-0,02		0,03		-0,02	0,00
Equity per share, eur	0,51	0,48		0,51		0,48	0,50
Solvency ratio,%	46,4	50,9		46,4		50,9	49,7
Return on equity-%(ROE)	8,9	-15,1		9,7		-10,0	0,6
Return on investment-%(ROI)	12,8	-15,7		15,6		-10,7	1,1
Gearing, %	-19,4	-38,4		-19,4		-38,4	-13,3
Net interest-bearing liabilities	-4,0	-7,3		-4,0		-7,3	-2,7
Investments (intangible and tangible assets)	0,5	0,5		1,5		0,8	1,6
as percentage of net sales	2,5	3,2		3,5		2,7	2,3
Average personnel	936	783		912		773	821

CONSOLIDATED STATEMENT OF CASH FLOWS	Nov./10-	Nov./09-	change	Nov./09-
EUR million	Apr./11	Apr./10	%	Oct./10

Cash flows from operating activities
Cash receipts from customers	45,6	30,3		64,0
Cash paid to suppliers and employees	-42,0	-27,4		-65,4
Cash generated from operations	3,6	2,9		-1,4
Interest paid	0,0	0,0		0,0
Interest received	0,0	0,0		0,0
Other financial items	-0,2	0,2		0,1
Income taxes paid	-0,5	0,0		0,3
Net cash from operating activities (A)	2,9	3,0	-2,1	-1,0

Cash flows from investing activities
Purchase of tangible and intangible assets	-1,5	-0,8		-1,6
Proceeds from sale of tangible and intangible assets	0,0	0,0		0,1
Proceeds from repayments of loans	0,0	0,0		0,0
Proceeds from sales of investments	0,0	0,0		0,0
Dividend received	0,0	0,0		0,0
Net cash used in investing activities (B)	-1,5	-0,8	86,8	-1,5

Cash flows from financing activities
Capital investment by the minority	0,0	0,0		0,3
Purchase of treasury shares	0,0	0,0		-0,1
Proceeds from short term borrowings	0,0	0,0		0,5
Repayment of short-term borrowings	-0,3	0,0		0,0
Proceeds from long term borrowings	0,0	0,0		2,5
Repayment of long-term borrowings	0,0	0,0		0,0
Financial leasing repayment	-0,1	-0,1		-0,3
Dividends paid	0,0	0,0		0,0
Net cash used in financing activities (C)	-0,3	-0,1		3,0

Net increase/decrease in cash and cash
equivalents (A+B+C)	1,1	2,1		0,4


GROUP CONTINGENT LIABILITIES	Apr. 30,	Apr. 30,		Oct. 31,
EUR million	2011	2010		2010

Security and contingent liabilities

For others
Other contingent liabilities	0,1	0,1		0,1

Operating lease commitments
Group as lessee
Non-cancellable minimum operating lease
payments:
Less than 1 year	1,5	1,4		1,5
1-5 years	1,2	2,2		1,7

Fair values of derivative financial instruments

Currency derivatives, not hedge
Option contract
Nominal amount	1,4	3,0		2,9
Positive fair value	0,0	0,0		0,0
Negative fair value	0,0	0,0		0,0



THE FOLLOWING TRANSACTIONS WERE	Apr. 30,	Apr. 30,		Oct. 31,
CARRIED OUT WITH RELATED PARTIES:	2011	2010		2010
EUR million

Associated companies
Purchases	0,0	0,0		0,1

Liabilities	0,0	0,0		0,0


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


EUR million	Share capital	Treasury shares	Unrestricted equity reserve	Other reserves	Translation differences	Retained earnings	Equity holders of the parent	Non-controlling interests	Total


Equity	34,5	-0,6	0,0	1,0	-0,2	-15,2	19,5	0,0	19,5
Nov.1, 2009

Comprehensive income	0,0	0,0	0,0	0,0	0,6	-1,0	-0,4	0,0	-0,4


Equity	34,5	-0,6	0,0	1,0	0,4	-16,1	19,1	0,0	19,1
Apr. 30, 2010


EUR million	Share capital	Treasury shares	Unrestricted equity reserve	Other reserves	Translation differences	Retained earnings	Equity holders of the parent	Non-controlling interests	Total


Equity	15,0	-2,1	20,9	1,0	0,1	-15,0	19,9	0,3	20,2
Nov.1, 2010

Comprehensive income	0,0	0,0	0,0	0,0	-0,6	1,0	0,4	0,0	0,4

Equity	15,0	-2,1	20,9	1,0	-0,4	-14,0	20,3	0,3	20,6
Apr. 30, 2011


CALCULATION OF KEY FIGURES AND RATIOS 30.4.2011

Return on investment (ROI), %	=	Profit before taxes + interest and other financing expenses / (Equity + interest-bearing liabilities, average )		x 100

Return on Equity (ROE), %	=	Profit/loss for the period / Equity (average )		x 100

Current ratio	=	Current assets / Current liabilities

Solvency ratio, %	=	Equity / (Total assets - advance payments received - own shares*)		x 100

Net interest-bearing liabilities	=	Interest-bearing liabilities - financial assets at fair value through profit or loss - cash and cash equivalents

Gearing, %	=	Net interest-bearing liabilities / Equity		x 100

Earnings per share	=	Profit or loss attributable to ordinary equity holders of the parent entity/ The weighted aAverage number of ordinary shares outstanding

Dividend per share	=	Dividend for the financial year / (Number of shares - own shares*)

Dividend payout ratio, %	=	Dividend per share / Earnings per share	x 100

Effective dividend yield, %	=	Dividend per share /Adjusted share price at balance sheet date	x 100

Equity per share	=	Equity - own shares* /Number of shares at balance sheet date

P/E-ratio	=	Adjusted share price at balance sheet date / Earnings per share

Market capitalization =	=	Adjusted share price at balance sheet date x outstanding number of shares at balance sheet date

Average personnel	=	The average number of employees at the end of each calendar month during the accounting period

All share-specific figures are based on the issue-adjusted number of shares.
Equity is the equity owned by the holders of the parent company's shares.
Profit for the period is the fiscal period profit attributable to equity holders of the parent. * There were own shares held by company April 30, 2011.

EFORE PLC

Board of Directors

For further information please contact Mr.Vesa Vähämöttönen, President and CEO, on May 26, 2011 at 9 – 11 a.m., tel. +358 9 4784 6312

Efore Plc will hold a news conference regarding the financial statement report for analysts and media on May 26, 2011 at 11 a.m. in Helsinki World Trade Center, address Aleksanterinkatu 17.

DISTRIBUTION
Nasdaq OMX Helsinki Oy
Principal media

Efore Group

Efore Group is an international company which develops and produces demanding power products. Efore’s head office is based in Finland and its production units are located in China and in Estonia. Efore is present also in Sweden. In the fiscal year ending in October 2010, consolidated net sales totaled EUR 69.7 million and the Group’s personnel averaged 821. The company's share is quoted on the Nasdaq OMX Helsinki Ltd. www.efore.com

Vesa Vähämöttönen, President and CEO, tel. +358 9 4784 6312

EFORE GROUP INTERIM REPORT NOVEMBER 2010 - APRIL 2011: OVER 40% YEAR-OVER-YEAR GROWTH IN NET SALES