TAMRO GROUP INTERIM REPORT FEBRUARY–JULY 2008

• Tamro Group net sales in February–July amounted to 2,776 (2,753), an increase of 0.8%. Net sales in May–July amounted to EUR 1,389 (1,401) million, a decrease of 0.9%.

• The profit before taxes in February–July was EUR 66 (60) million, an increase of 10.5%. The profit margin was 2.4 (2.2)%.

• Market growth continued to be more modest than expected mainly due to price decreases and government interventions in several markets. Labour conflicts in the health care sector in Sweden and Denmark, combined with poor availability of pharmacists in Norway and the Baltic states impacted the business negatively.

“The modest market growth and sales development were offset by targeted internal measures allowing the Group’s profitablity to develop reasonably, inspite of substantial increase in personnel costs and fuel prices. However, our market environment will be changing as countries like Sweden and Latvia, among others, are beginning to realise that their respective pharmacy legislations may need a complete revision to cater for future society needs,” states Tamro’s President & CEO Jo Langmoen.


Operating environment

Nordic pharmaceutical market growth during February–July 2008 was approximately 3%, varying between -1% in Norway and 7% in Finland. A contributing factor to the modest growth is the increase in legislative measures to restrict the growth of pharmaceutical costs.
In Estonia and Latvia the growth continued at a double digit rate. The Baltic markets are characterised by high inflation and an overall weak economic outlook. Pharmaceutical consumption is still below the EU average, and the legislative environment regarding pharmaceuticals is still developing.
The market growth was unchanged in Poland compared to the corresponding period last year.


Outlook for the full-year 2008/2009

The weakened general economic development and government interventions are slowing down market growth in some of Tamro’s markets. However, for the remaining financial year, Tamro expects the results to equal or exceed last year’s thanks to operational improvements and cost focus.

Tamro is following how the Swedish government is handling the deregulation process. It remains to be seen whether the new system will encourage market dynamics and international players to create a functioning pharmacy market, based on secure and efficient distribution as well as high customer benefits. Depending on the Swedish government’s model for a deregulated pharmacy market Tamro may decide to enter the retail market. The deregulation in Sweden will have a major effect on Tamro’s performance, but its financial impact will not be substantial before the financial year 2009/10 and thereafter.

The interim figures are unaudited. Comparable figures refer to last year’s corresponding period unless otherwise stated.

The entire Interim Report is available in PDF file on Tamro Group's website
http://www.tamro.com.

For further information, please contact:
Mr Jo Langmoen, President and CEO, tel. +358 20 445 4050
Mr Lars Birkeland, CFO, tel. +358 20 445 4057
Ms Terhi Kivinen, Communications Director, tel. +358 20 445 4001 or +358 40 848 4001,
terhi.kivinen@tamro.com