Interim Report January-March 2008

• The consolidated net sales for the first quarter of 2008 amounted to SEK 1,317 million (1,565). The reduction compared to the same period the previous year is the result of both lower prices and lower sales volumes.
• Operating profit for the January – March 2008 period amounted to SEK 5 million (161), which is SEK 156 million lower than the same period the previous year. The reduction is mainly an effect of lower selling prices and delivery volumes as well as higher raw material costs.
• Profit after tax for the quarter amounted to SEK -4 million (109). Earnings per share amounted to SEK -0.17 (3.44).
• Cash flow from operating activities for the period was SEK -69 million (31). The cash flow was negatively affected by an increase in the amount of working capital tied up. The increase in working capital is mainly explained by increased stock levels.

Kent Torwald, President and CEO, comments:
“Setra, like the industry in general, had a weak start to the year. Wood products prices have fallen and are almost 15% below the level in the fourth quarter of 2007. At the same time, raw material prices have remained at the same high level. The stock situation among producers is still very strained. In view of the economic forecasts presented for our main markets, we cannot expect any improvement in the market situation over the next few quarters.

To reduce stock levels and improve cash flow, Setra took a decision in the first quarter to implement extensive production cuts. The effect of these measures will mainly be felt in the second half of 2008.

During the first quarter, Setra made two acquisitions. In January Setra increased its involvement in and ownership of the industrial building manufacturer, Plusshus. This acquisition is one element in Setra’s strategic focus on the growing market for multi-storey buildings made from wood. In March Setra acquired the Norwegian moulding manufacturer Barkevik Bruk A/S, a dynamic company with a high quality profile in the wood processing segment. This acquisition strengthens Setra’s position in the Norwegian market and expands our current offering to the Norwegian building materials trade. The acquisition also creates a platform in Norway for Setra’s continued progress towards becoming a full-range supplier to the Scandinavian building materials trade.”