Interim report January-June 2007

“We worked intensively to keep pace with fast-rising paper prices during the spring but found it difficult to push through our new prices in time, particularly in Germany, which had a tangible impact on gross margin in the second quarter. Now we are continuing to raise our prices and make further cost cuts in order to quickly correct the situation” says Bong’s President and CEO Anders Davidsson.

• Net sales for the first half of 2007 amounted to SEK 1,013 million (1,031) and second quarter sales to SEK 472 million (474).

• Adjusted operating profit is reported at SEK 27 million (44) for the first half of the year and SEK 3 million (20) for the second quarter. Including one-time items, operating profit was SEK 19 million (-1) for the first half of the year and SEK -5 million (-25) for the second quarter.

• The loss after tax for the second quarter was SEK -12 million (-24). For the first half of the year, the loss after tax was SEK -4 million (-13).Earnings per share after dilution for the first half of the year were SEK -0.29 (-1.04).

• Cash flow after investing activities for the first half of the year was SEK -72 million (-45). In the second quarter, working capital decreased after a substantial build-up in the first quarter and cash flow after investing activities reached SEK 7 million (-12).

• Bong’s Polish operations have been transferred to a company owned jointly with the envelope printer Liston. The factory in Warsaw has been closed.

• Second quarter earnings included additional restructuring charges for the integration of RCT in Germany, further cost-cutting measures in the German unit, the ongoing production transfer in Finland, the closure of the Warsaw factory and the change of management at Bong UK. At the same time, tangible assets were sold at a profit. The net of these one-time items was SEK -8 million.