Elcoteq SE

Stock Exchange Release

August 31, 2011, at 9.00 am (EET)

Interim Report April-June 2011 in brief

  • Operating result affected by one off write downs.

  • As the Company has not at the moment adequate financing available to run its' operations in the future, the Company has discontinued to adopt the going concern basis in preparing its' consolidated financial statements.

  • The decline in net sales of the EMS Business Segment pared to the last year at Q2 was caused by TV sales peak due to Football World Championship and Sharp KIN phone production peak at Q2 in 2010.

  • The decline in net sales of AMS Business Segment sales was mainly due to reduction of volumes by the Company's main AMS customer in Mexico.

  • Company has no visibility for the outlook for the rest of the year due actions taken by its' lenders and consecutive reactions by suppliers and customers.

Key figuresQ2/2011Q2/2010Q1-Q2/2011Q1-Q2/2010Q1-Q4/2010
Net sales, MEUR175.7332.3367.2552.91069.9
Operating result, MEUR-37.8-6.9-48.9-19.8-18.1
Result before taxes, MEUR-45.3-1.7-66.261.343.7
Earnings per share, MEUR-1.93-0.18-2.551.050.45
Cash flow after investing activities, MEUR

-12.3

5.3

-24.5

-18.0

39.3

Rolling 12-month return on capital employed at end of period, ROCE, %

-25.4

16.8

-25.4

16.8

30.4

Interest-bearing net debt at end of period

36.4

76.3

36.4

76.3

12.6

Gearing at end of period

2.0

0.7

2.0

0.7

0.1

Solvency at end of period, %

6.3

18.7

6.3

18.7

20.8

Elcoteq's Chairman of the Board, Mr. Jorma Vanhanen:

"The second quarter of 2011 was a challenging period for Elcoteq. Operating result was negative as sales continued to decline from the first quarter. Sales decline was resulting from existing customers being extremely careful for outsourcing production to Elcoteq as the customers were concerned about the financial situation of the pany. Due to the situation it was also extremely difficult to make new customer deals during the quarter."

Outlook

Elcoteq has no visibility for the outlook for the rest of the year due actions taken by its' lenders and consecutive reactions by suppliers and customers.

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 pany's website (www.elcoteq.).

Financial Information 2011

The interim report of January-September will be published on October 26, 2011.

Further information:

Jorma Vanhanen, Chairman of the Board, tel. +358 10 413 11

Olli-Pekka Vanhanen, Senior Vice President, Business Control and Accounting, tel. + 358 10 413 11

About Elcoteq

Elcoteq SE is an experienced Life Cycle Service Partner in electronics with a global network of service centers. Elcoteq provides a wide range of services to original equipment manufacturers (OEM) and to service providers such as operators, retailers and insurance panies.

Elcoteq's Electronics Manufacturing Services (EMS) Business Segment provides global supply chain solutions such as Engineering and Manufacturing Services but also technology and ponent Sourcing, custom Configuration, Testing, Delivery and other product supply related Services. EMS products range from control and security, munications infrastructure and lighting solutions to special purpose mobile devices and home entertainment systems.

Elcoteq's After Market Services (AMS) Business Segment provides globally reverse supply chain solutions for its customers consisting of Reverse Logistics, Depot Repair, Refurbishment, Recycling and Salvaging Services as well as AMS specific Engineering and Customer Support Services. AMS products range from mobile phones, tablets, flat panel TV's and set-top boxes to personal navigation and gaming devices.

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