Year-end report 2006

Fourth quarter:
- Margin improvements in services business
- Restructuring in Products in line with plan
- EBIT of SEK -44 M (SEK 32 M excl. restructuring)

Key 2006 2005
figures, Jan–Dec Jan–Dec Change 2006 2005
SEK million Oct–Dec Oct–Dec Change
Net sales 2,780 2,542 9% 723 705 3%

Operating
earnings
(EBIT) –255 57 –547% –44 26 -266%

Earnings
for the
period from
remaining
operations –288 13 –2,402% –62 –9 n/a

Earnings
for the
period from
terminated
operations 290 34 742% –2 11 –119%

Earnings
for the
period 2 47 –97% –64 2 –4,125%

Earnings
per share,
SEK 0.03 0.75 –97% –1.03 0.03 –4,125%

Cash flow
from
current
operations –70 203 –135% 6 70 -91%

Cash flow
after
investment
operations 21 5 326% –22 33 -165%

Teleca
Mobile
Net sales 1,532 1,284 19% 384 361 6%

Of which
Products/
Obigo 227 254 –10% 56 99 –43%

Operating
earnings
(EBIT) –111 –14 n/a –56 3 –1,913%

Of which
Products/
Obigo –218 –76 n/a –93 –10 n/a

auSystems
Net sales 1,359 1,345 1% 365 364 0%

Operating
earnings
(EBIT) 25 88 –72% 14 29 –54%




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 reported separated from the continuing business. 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.

· Operating earnings for the quarter were SEK -44 million, and SEK 32 million excluding earlier announced restructuring of SEK 76 million.

· During the fourth quarter mobile services reported growth of 18% and an EBIT margin of 10%. auSystems reported an EBIT margin of 9%, excluding restructuring of SEK 19 million, at flat revenues.

· In summary Teleca’s services businesses reported in fourth quarter a revenue growth of 9 % and an EBIT margin of 10 %, excluding restructuring costs of SEK 19 million.

· In line with earlier announcements a significant restructuring program is ongoing in the Products business. The changes are driven by general needs to improve the cost structure, market expectations that software is pre-integrated to leading platforms and declining volumes from Teleca’s Tier 2 and Tier 3 OEM clients. The restructuring which is expected to have full effect from Q3 2007 is progressing in line with plans.


Outlook for 2007:

· Teleca Group Forecast
For the full year 2007 Teleca expects positive operating earnings. Further the company expects significant improvements in the areas showing the weakest results in 2006.

While Teleca Mobile expects good growth in service volumes, a targeted increase in the share of off-shore or low-cost services will impact the revenue growth. Margins are expected to be at a good level.

During Q1 and Q2 the result will be significantly impacted by continued losses in Teleca’s Mobile Products business. Operating earnings will be further impacted by a need to increase investments into products with focus on so-called platform reference designs. The ongoing restructuring of the product business will have full effect 2H 2007.

auSystems is expected to leverage the performance improvements of Q4 2006 into 2007 leading to improved operating earnings in 2007 compared to 2006.



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


Forthcoming report dates
Interim report January–March 2007: 24 April 2007
Interim report January–June 2007: 19 July 2007
Interim report January–September 2007: 18 October 2007
Year-end report 2007: February 2008

Press and analyst conferences
Teleca will present the year-end report in English via a telephone conference on Wednesday 7 February 2007 at 09:00 CET. To participate please call +44‑2073651851 or +46‑858536965 or view the presentation live via the internet at www.teleca.com.

Teleca is a world-leading consulting company that develops and integrates advanced software and IT solutions. Teleca helps its customers shorten development times and use the most suitable technology more effectively. The company consists of about 3,500 experts based in 17 countries in Asia, Europe and North America. Teleca is quoted on the Mid cap list of The Nordic Exchange.

The year-end report can be ordered from the company or downloaded via www.teleca.com.