Year-End Report 2007

Strong earnings for Setra

• Consolidated net sales for 2007 amounted to SEK 6,059 million (5,844). The increase compared to the previous year is mainly due to higher prices. Net sales for the fourth quarter amounted to SEK 1,379 million (1,587). The reduction compared to the same period the previous year is explained by lower sales volumes.
• Operating profit for 2007 amounted to SEK 771 million (257). The improvement of SEK 514 million compared to the previous year is an effect of higher gross profits due to a strong business climate and the efficiency improvements implemented. Operating profit for the fourth quarter amounted to SEK 68 million (132). The 2007 earnings were charged with restructuring costs of SEK 64 million, SEK 55 million of which was charged in the fourth quarter.
• Profit after tax for 2007 amounted to SEK 528 million (222). Earnings per share amounted to SEK 16.72 (7.01).
• The Board proposes a dividend for 2007 of SEK 2.50 per share.
• In January 2008 Setra increased its ownership of building manufacturer, Plusshus, by 15% to 51%.

Kent Torwald, President and CEO comments:
“The 2007 operating profit of SEK 771 million (257) is the best result the Group has reported since Setra was formed in autumn 2003. A strong business climate with high price levels, particularly in the first three quarters, combined with the efficiency improvement measures that were implemented contributed to this positive development.
In the second half of 2007 the wood products market was characterised by an excess supply resulting in increased stocks and price pressure. Also, there is general excess capacity in the sawmill industry, particularly in northern Sweden, in relation to the regional wood supply. Therefore, in the fourth quarter, Setra decided to implement a number of measures for a production scale-down equivalent to around 10% of Setra’s annual production.
In our opinion, 2008 will start in a wait-and-see mode and margins and profits will be lower than in 2007. In a longer-term perspective, however, the wood products market will develop in a positive direction. In particular, environmental and climate-related issues and concerns will lead to an increase in the use of wood - a renewable building material. The increased engagement and shareholding in the pre-fabricated building manufacturer, Plusshus, is part of Setra’s strategic initiative to increase the Group’s market share in the growing market for multi-storey buildings made of wood.”