Interim Report January–June 2006

New structure in place – Benima sold, Popwire and head office restructuring realised 2006 2005 Key figures, Jan-Jun Jan-Jun Change 2006 2005 SEK million Apr-Jun Apr-Jun Change Net sales 1,402 1,279 10% 728 650 12% Operating earnings (EBIT) -80 39 -308% -84 14 -700% Earnings from continuing operations -103 24 -523% -96 6 -1 717% Earnings from discontinued operations 292 18 1,548% 274 8 3,325% Earnings for the period 189 42 348% 178 14 1,171% Earnings per share 3.02 0.67 351% 2.85 0.23 1,139% Cash flow from current activities -20 109 -119% 65 86 -25% Cash flow after investments 215 -9 n.a. 337 16 2,106% Teleca Mobile, Net sales 754 636 19% 407 312 31% o w Products/ Obigo 125 110 14% 66 52 27% Operating earnings -19 -9 n.a. -2 -15 n.a. o w Products/ Obigo -90 -39 n.a. -46 -25 n.a. Teleca Systems, Net sales 696 693 0% 344 364 -5% Operating earnings 29 51 -43% 3 27 -89% Note: During the second quarter the Benima division was sold. According to IFRS, Benima is to be reported as discontinued operations, meaning that all current financial and other key numbers for the reporting period as well as comparison figures are to be reported as if Benima was not part of the Teleca Group. Net operating earnings from Benima and the net capital gain from the sale of Benima are reported as a single amount on the face of the income statement. · Good momentum and improved margin for Mobile Consulting, Popwire closed and losses stopped, weak results in Obigo and Systems. · Teleca is in the process of implementing a new strategic direction, where Teleca Mobile will form the new Teleca. As a consequence the following initiatives have been taken: · The Benima division was sold for SEK 517 million. Total earnings from discontinued operations were SEK 292 million. · Teleca Mobile and Teleca Systems will be run as two different companies from 1 July. Telecas Systems to be listed at the OMX Stockholm Stock exchange through a dividend. · Teleca Mobile has launched a new global organisation and a simplified management structure. · Management and structural changes resulted in non recurring charges of SEK 27 million during the second quarter. · The Popwire product family that has generated substantial losses over the past 12 months have been restructured causing non recurring charges of SEK 47 million during the second quarter. Hereafter the losses in the Popwire product family will have been eliminated. · In all Teleca had one-time charges in the second quarter 2006 of SEK 74 million. · Microsoft Corp. has commissioned Teleca to integrate most of the components from Obigo with Windows Mobile. · Previous full-year group forecast for 2006 was: increased net sales and operating profits. The Board is confident that the new strategic direction and that the initiatives already taken to strengthen operations will lead to improved financial results. Given the multitude of changes, which is the highest priority, the board has decided to issue a full-year group forecast the next quarter. For more information please contact: · René Svendsen-Tune, President and CEO, Teleca AB, mobile +45-40540068 · Christian Luiga, CFO, Teleca AB, +46-857911604, mobile +46-703751604 · Johannes Rudbeck, Investor Relations Manager, Teleca AB, +46-857911616, mobile +46-705825656