Annual Comments of the Chief Executive Three years of earnings improvements show that we have found the direction and strategy for Lagercrantz. Braced by the successes, we will continue to build with continued focus on margins and growth, organically as well as by acquisition.

The year gone by

The 2007/08 operating year was a third year of tangibly improved earnings. Profit after finance items increased to MSEK 121, as compared with MSEK 90 for the year before, and MSEK 55 two years ago. With the year's last quarter, we have now delivered 12 consecutive quarters of improved earnings compared to the equivalent yearago period. Earnings per share for the operating year increased by 43 percent to SEK 3.92 (2.75).

One of our financial goals, that of earnings growth of at least 15 percent per year, has thus been surpassed during the past years. With respect to the other financial goal, that of return on equity of 25 percent, the trend is clearly positive and for the full year we achieved the 21 percent level. Here we still have some way to go, but the increase from 16 percent last year demonstrates that we are on the right track with respect to this financial goal.

The Divisions

It is particularly gratifying to note that the improvement is derived from all three of our divisions. Lagercrantz today has three comparably-sized divisions and some 25 profit centres in nine countries. This platform was strengthened in several ways during the year.

Electronics is the division that shows the perhaps most impressive earnings improvement. Operating profit increased by 65 percent to MSEK 38 and the operating margin rose from 3.1 percent to 4.9 percent. We believe the reasons to be the strategy with niche focus and higher value added. In the division we are increasingly concentrating on embedded electronics and industrial wireless communication. During the year this was manifested in part in the form of supplemental acquisitions with an orientation towards IT and electronic products for health care in Norway, and the venture into Poland with proprietary products and design services.

Mechatronics' operating profit increased by 43 percent to MSEK 50, equivalent to an operating margin of 8.3 percent (6.5 percent). Here it is particularly the business in Elpress, acquired in June 2006, that shows a positive development. New positions have been accomplished with important customers and during the year the company has established itself on the Chinese market. Our Danish and Finnish businesses in custom wiring harnesses have also performed exceedingly well.

Communications increased its operating profit by 19 percent to MSEK 51, with a slightly improved operating margin of 6.5 percent. It is particularly the Access business that shows clear improvement. Behind these improvements are changes of suppliers, restructuring of companies in Sweden and newly acquired units (K&K in Finland and Direktronik in Sweden). Robust revenue growth in the area of Software continued. In the division's third area, Digital Image/Technical Security, profit declined during the year, however, and this is the year's disappointment. The reason is that a number of major projects fell short of projections and measures for increased control and organisational adjustments have therefore been implemented.

Acquisitions

During the year we have also advanced our positions in terms of acquisitions. This is an important element of our growth strategy and during the past two years we have made several acquisitions with good results. In many cases ideas for acquisition targets come from our subsidiaries and we are continually in progress with a handful of processes aimed at acquiring new companies. We are now continuing with these ambitions and actions during 2007/08 include strengthening the central organisation with additional acquisition expertise.

Management by objective and decentralisation

Overall, I am convinced that our organisational model with clear management by objective and decentralised decision-making generate these good results. Strategies are based on each profit centre's local customer and market conditions and implementation with a good measure of prospects for impacting the situation by our many engaged leaders and associates. I wish to extend a special heart-felt thanks to all of the Group's employees for their exemplary engagement and many fruitful efforts during the year!

The future

Recent unrest in the world's financial markets has increased the uncertainty that afflicts the development of the European industrial economy. However, we see no immediate clear signs of a more general weakening of demand. We will therefore keep on working with a focus on building strong market positions in niches. The Lagercrantz Group's established platform with three profitable divisions, a wellfunctioning strategy and diversification in terms of business ideas, customer groups and markets is good point of departure to handle an economic situation fraught with uncertainty.

Stockholm, 13 May 2008 Jörgen Wigh President & CEO

Lagercrantz Group is a technology trading group in electronics, electrics, communication and adjacent areas. The Group operates in a decentralised mode with value-creating sales close to its customers in several expansive niches. The business is organised in three divisions.

NET REVENUE AND PROFIT

The Lagercrantz Group's net revenue for the 2007/08 financial year (1 April 2007– 31 March 2008) increased by 10 percent to MSEK 2,172 (1,974). The increase in revenue for comparable units was approximately 4 percent. During the fourth quarter revenue increased by 1 percent to MSEK 562 (557). The lower rate of revenue growth during the last quarter is primarily due to slightly lower revenue in division Electronics as a consequence of changes in product offerings and fewer selling days.

Order bookings saw a positive development during the year compared to the year before.

The operating margin continued to strengthen, to 7.1 percent (5.9 percent) during the fourth quarter. For the financial year the operating margin was 6.0 percent. Operating profit amounted to MSEK 40 (33) during the fourth quarter, equivalent to an increase by 21 percent. This result includes the effect of one-time items in a net amount of MSEK 1. Operating profit for the full year increased by 32 percent to MSEK 131 (99). This result includes approximately MSEK 4 in non-recurring items compared to about MSEK 5 last year. Profit for the financial year increased by 35 percent, not including one-time items.

Profit after finance items amounted to MSEK 121 (90) during the period and MSEK 37 (29) during the fourth quarter. The earnings improvement during the fourth quarter was the twelfth consecutive quarter with higher profit compared to the corresponding period the year before. Changes in foreign exchange rates impacted the Group's profit by approximately MSEK –2 (1) during the financial year.

PROFITABILITY, FINANCIAL POSITION & CAPITAL EXPENDITURES

The return on capital employed for the financial year was 21 percent, as compared with 18 percent during the preceding year. The return on equity was also stronger, reaching 21 percent as opposed to 16 percent for the year before.

The Group had a net financial liability at the end of the period of MSEK 93, as compared with MSEK 161 at the beginning of the financial year.

Cash flows from operating activities amounted to MSEK 120 (76) during the financial year and to MSEK 82 (69) during the fourth quarter. Earnings as well as working capital improvements contributed to the stronger cash flows.

Capital expenditures in non-current assets amounted to MSEK 25 (34), gross, whereas sales of real property had a positive effect on cash flow in an amount of MSEK 70 (25) during the year. Own shares were repurchased in an amount of MSEK 37 and dividends were paid in an amount of MSEK 30. No own shares were repurchased during the fourth quarter. A total of 1,200,000 shares were repurchased during 2007/08.

Equity per share at the end of the period amounted to SEK 20.40, as compared with SEK 18.20 at the beginning of the financial year. The equity ratio at the end of the period stood at 44 percent compared to 39 percent at the beginning of the financial year.

12 months 2006/07
3.1
6.5
6.3
-
5.0

Earnings per share increased to SEK 3.92 (2.75).

Current reporting period 1 April 2007–31 March 2008

NET REVENUE AND PROFIT BY DIVISION

Electronics

Net revenue for the fourth quarter amounted to MSEK 195 (207). Revenue increased in areas with higher margins, whereas revenue from standard components declined. In the aggregate, this meant lower revenue for the division during the quarter.

Operating profit increased to MSEK 13 (9), equivalent to a margin of 6.7 percent (4.3 percent). The improvement is attributable primarily to the Danish and Norwegian operations, where action to improve earnings has had a positive effect. Efforts to change and develop the product range towards higher value added are also having positive impact. As an element of this work a company was established in Poland during the quarter to offer proprietary products and design services.

Mechatronics

Net revenue for the fourth quarter amounted to MSEK 157 (154). Revenue increased as a result of slightly stronger demand in the division's trading business and a sustained positive market situation for the manufacturing entities.

Operating income during the quarter increased to MSEK 15 (11), equivalent to an operating margin of 9.6 percent (7.1 percent). The earnings improvement was due to favourable capacity utilisation in the division's manufacturing entities and actions to improve margins also had an effect.

Communications

Net revenue for the fourth quarter increased to MSEK 210 (196). The increase was derived from acquired businesses, and from increased revenue in the division's software business.

Operating income during the period amounted to MSEK 14 (14), equivalent to an operating margin of 6.7 percent (7.1 percent). Acquired business and improved earnings in the division's Access area had a positive impact on earnings. The division's area Digital Image/ Technical Security reported lower earnings than the comparative year. Action is being taken to turn the development.

PARENT COMPANY AND OTHER CONSOLIDATION ITEMS

The Parent Company's internal revenue for the year amounted to MSEK 26 (24) and profit after finance items was MSEK 32 (13). This result includes exchange rate adjustments on intra-Group lending in an amount of MSEK –1 (–1), depreciation of shares in subsidiaries in the amount of MSEK 30 (0) by reason of dividends rendered from subsidiaries in an amount of MSEK 81 (32). Net investments in non-current assets amounted to MSEK 0 (0).

The Parent Company has an approved credit facility in the amount of MSEK 250. MSEK 19 thereof was utilised, compared to MSEK 89 at the beginning of the financial year. The Parent Company also has a long-term acquisition credit in the amount of MSEK 78. Interest was fixed for a period of 5 years on MSEK 100 during the preceding year. In addition, the Company holds liquid funds in the amount of MSEK 0, compared to MSEK 1 at the beginning of the financial year.

Financial development in brief

Net revenue

– quarterly data				2007/08				2006/07
MSEK	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Electronics	195	206	182	195	207	175	186	183
Mechatronics	157	150	145	152	154	152	136	99
Communications	210	206	188	186	196	203	134	149
Parent company/consolidation items	-	-	-	-	-	-	-	-
GROUP TOTAL	562	562	515	533	557	530	456	431

Operating profit

– quarterly data				2007/08				2006/07
MSEK	Q 4	Q 3	Q 2	Q 1	Q 4	Q 3	Q 2	Q 1
Electronics	13	10	8	7	9	2	8	4
Mechatronics	15	13	13	9	11	9	10	5
Communications	14	15	10	12	14	17	6	6
Parent company/consolidation items	-2	-4	-2	0	-1	-4	-3	6
GROUP TOTAL	40	34	29	28	33	24	21	21

consolidated income statement

	3 months	3 months	Financial year	Financial year
MSEK	Jan-Mar 2008	Jan-Mar 2007	2007/08	2006/07
Revenue	562	557	2 172	1 974
Cost ofsales	-419	-422	-1 622	-1 490
Gross profit	143	135	550	484
Distribution costs	-79	-83	-301	-275
Administrative expenses	-28	-25	-128	-120
Research and development expenses	-2	-3	-8	-10
Other income and expenses	6	9	18	20
OPERATING pro fit	40	33	131	99
(of which depreciation and amortisation)	(-6)	(-5)	(-23)	(-21)
Finance income	2	1	7	4
Finance costs	-5	-5	-17	-13
pro fit AFTER FINANCe ITEMS	37	29	121	90
Income tax expenses	-7	-8	-30	-25
PROFIT FOR THE PERIOD	30	21	91	65
Attributable to:
Equity holders of the Company	30	21	91	65
Minority interest	-	0	0	0
Profit for the period	30	21	91	65
Earnings per share, SEK	1.34	0.89	3.92	2.75
Earnings per share after dilution, SEK	1.34	0.89	3.92	2.75
Weighted number ofshares outstanding after repurchases (thousands)	22 478	23 678	23 212	23 678
Weighted number ofshares outstanding after repurchases adjusted for dilution (thousands)	22 478	23 678	23 212	23 678
Number ofshares outstanding at period end (thousands)	22 478	23 678	22 478	23 678

In view of the redemption price on outstanding call options (SEK 36.00 and SEK 44.40) and the average market price of the share (SEK 33.40) during that part of the latest twelve-month period where the options were outstanding, no dilutive effect occured for the latest twelve-months. Also, no dilutive effect occured for the latest quarter when the average market price of the share (SEK 27.70) waslower than the redemption price.

Financial development in brief

consolidated balance sheet

MSEK	2008 03 31	2007 03 31
ASSETS
Goodwill	140	128
Other intangible non-current assets	98	97
Property, plant and equipment	51	83
Financial non-current assets	30	39
Inventories	238	234
Current receivables	419	444
Cash and cash equivalents	79	94
Tota l ASSETS	1 055	1 119
EQUITY AND LIABILITIES
Equity attributable to the equity holders of the Company	459	432
Minority interest	-	0
Total equity	459	432
Non-current liabilities	174	189
Current liabilities	422	498
TOTAL EQUITY AND LIABILITIES	1 055	1 119
Interest-bearing assets	79	94
Interest-bearing liabilities	172	255

Consolidated cash flow

	3 months	3 months	Financial year	Financial year
MSEK	Jan-Mar 2008	Jan-Mar 2007	2007/08	2006/07
Operating activities
Profit after finance items	37	29	121	90
Adjustment for items not included in cash flow, etc.	-5	-2	-19	3
Cash flow from operating activities before changes in working capital	32	27	102	93
Cash flow from changes in working capital
Increase(-)/Decrease(+) in inventories	10	3	1	0
Increase(-)/Decrease(+) in operating receivables	4	-1	16	-65
Increase(+)/Decrease(-) in operating liabilities	36	40	1	48
Cash flow from operat ing act ivities	82	69	120	76
Investing activities
Investments in businesses	-2	0	-27	-160
Investments in other non-current assets, net	33	-4	44	-10
cas h flow from invest ing act ivities	31	-4	17	-170
Financing activities
Dividends. repurchase of own shares	0	-	-67	-24
Change in loan liabilities	-113	-33	-84	158
cas h flow from financ ing act ivities	-113	-33	-151	134
cas h flow for the per iod	0	32	-14	40
Cash and cash equivalents at beginning of the period	79	63	94	55
Exchange rate difference in cash and cash equivalents	0	-1	-1	-1
Cash and cash equivalents at end of the period	79	94	79	94

change in shareholders'

equity
MSEK	Apr-Mar 2007/08	Apr-Mar 2006/07
Opening balance	432	393
Repurchase of own shares	-37	-
Dividend	-30	-24
Period's exhange rate differences	3	-2
Change in hedging reserve	0	-
Profit for the period	91	65

Key financial indicators

					Financial year
	2007/08	2006/07	2005/06	2004/05	2003/04
Change in revenue, %	10.0	22.8	5.9	-3.2	7.2
Operating margin, %	6.0	5.0	3.5	0.3	1.7
Profit margin, %	5.6	4.6	3.4	-0.1	1.5
Equity ratio, %	44	39	52	51	47
Return on equity, %	21	16	10	1	3
Return on capital employed, %	21	18	13	1	6
Debt equity ratio	0.4	0.6	0.1	0.2	0.3
Net debt equity ratio	0.2	0.4	0.0	0.0	0.0
Interest coverage ratio	9	9	14	1	4
Net interest-bearing liabilities (+)/receivables (-), MSEK	93	161	-9	-5	2
Number of employees at end of period	763	751	541	512	585
Revenue outside Sweden, MSEK	1 496	1 352	1 053	941	1 071
Per-share data
Number ofshares outstanding at end of period after repurchases (thousands)	22 478	23 678	23 678	24 078	24 078
Weighted number ofshares outstanding after repurchases (thousands)	23 212	23 678	23 923	24 078	24 696
Weighted number ofshares outstanding after repurchases and dilution (thousands)	23 212	23 678	23 923	24 078	24 696
Operating result per share, SEK	5.64	4.18	2.38	0.17	1.09
Result per share, SEK	3.92	2.75	1.63	0.21	0.57
Result per share after dilution, SEK	3.92	2.75	1.63	0.21	0.57
Cash flow per share, SEK	-0.60	1.69	-1.00	-2.45	1.21
Shareholders' equity per share, SEK	20.40	18.20	16.60	15.50	16.70
Latest market price paid per share, SEK	28.80	33.50	30.10	19.50	22.60

Definitions are found on page 25 of the most recent Annual Report. Year 2004/05 onwards are ecalculated in accordance with IFRS. Prior years have not been recalculated.

Parent company income statement

	3 months	3 months	Financial year	Financial year
MSEK	Jan-Mar 2008	Jan-Mar 2007	2007/08	2006/07
Revenue	6	6	26	24
Administrative expenses	-7	-11	-36	-38
Other operating income and expenses	0	0	0	0
Operat ing pro fit	-1	-5	-10	-14
Finance income	1	1	86	36
Finance costs	-34	-2	-44	-9
pro fit after finance items	-34	-6	32	13
Income tax expense	0	2	4	6
Profit for the per iod	-34	-4	36	19

Parent company balance sheet

MSEK	2008 03 31	2007 03 31
ASSETS
Property, plant and equipment	0	0
Financial non-current assets	642	692
Current receivables	33	18
Cash and cash equivalents	0	1
Tota l assets	675	711
EQUITY AND LIABILITIES
Equity	378	394
Non-current liabilities	145	100
Current liabilities	152	217
Tota l equity and liabilities	675	711
Assets pledged and contingent liabilities	47	44

Other information

ACCOUNTING POLICIES AND COMMENTS

This Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting policies applied are those set forth in the 2006/07 Annual Report.

EMPLOYEES

At the end of the period the number of employees in the Group was 763, which can be compared to 751 at the beginning of the period. The increase is explained by acquired businesses.

SHARE DISTRIBUTION AND REPURCHASES

The share capital at the end of the period amounted to MSEK 48.8. The distribution on classes of shares is as follows:

Class ofshares	Shares outstanding
Class A shares	1 095 998
Class B shares	23 318 234
Repurchased Class B shares	-1 936 423
Tota l	22 477 809

Lagercrantz holds 1,936,423 class B shares in treasury, equivalent to 7.9 percent of the number of shares outstanding and 5.6 percent of the votes in Lagercrantz. During the year 1,200,000 shares were acquired for a total of MSEK 37. No shares were repurchased during the fourth quarter. Of the repurchased shares, 515,000 are intended to fulfil the Company's obligation under outstanding option programmes (awards for 2006 and 2007) where the redemption price is SEK 36.00 and SEK 44.40, respectively per call option. The average cost of the repurchased shares amounts to MSEK 28.25 per share. The quotient value per share is SEK 2.

ACQUISITIONS

Businesses acquired during the year had a net effect on revenue and profit before taxes by approximately MSEK 55 and MSEK 6, respectively.

In March 2008 Lagercrantz acquired the Danish company CAD Kompagniet. The closing took place on 1 April 2008 (see below).

RISKS AND FACTORS OF UNCERTAINTY

The Lagercrantz Group's profit and financial as well as strategic position is affected by a number of internal factors over which the Company exerts control and a number of external factors where opportunities to affect the course of events are limited. The most important risk factors for Lagercrantz are the state of the economy, structural changes in the market, supplier and customer dependence, the competitive situation and foreign exchange trends. Since no changes have occurred during the period with respect to risks and factors of uncertainty, reference is made to the Annual Report for 2006/07 for further details. The Parent Company is affected by the above mentioned risks and factors of uncertainty by virtue of its function as owner of its subsidiaries.

RELATED PARTY DISCLOSURES

Transactions between Lagercrantz and related parties that have had a significant impact on the Group's financial position and profit have not occurred.

EVENTS AFTER THE BALANCE SHEET DATE

CAD Kompagniet A/S was acquired and the closing took place on 1 April 2008. The company is active in consulting in the CAD area (computer-aided design) and will inter-act with the software business that exists in this area in division Communications. CAD Kompagniet had revenue during 2007 of almost MDKK 30 with good profitability.

ANNUAL GENERAL MEETING 2008

The 2008 Annual General Meeting for the 2007/08 financial year will be held at 4:00 p.m., 1 September 2008, at IVA konferenscenter, Grev Turegatan 16, Stockholm. Information about the Meeting will sent to shareholders of record and will be available at the Company's website: www.lagercrantz.com.

The Annual Report is estimated to be published at the end of June 2008 and will be distributed to shareholders of record by mail and will also be available at the Company's website.

DIVIDEND

The Board of Directors proposes a dividend of SEK 1.50 per share (1.25). The dividend payment totals MSEK 34 (30).

CANCELLATION AND REPURCASE OF SHARES

The Board of Directors proposes that the Annual General Meeting resolves to cancel repurchased Class B shares up to a number equivalent to the excess number of shares not required to meet the Company's obligations under option programmes.

The Board of Directors proposes that the Annual General Meeting resolves to renew the mandate of the Board of Directors to repurchase own shares. The proposal contains a mandate for the Board of Directors to acquire up to the number of shares so that

the Company's holding from time to time does not exceed 10 percent of the shares outstanding in the Company – such mandate to remain valid until the next following Annual General Meeting. Repurchases shall be made over the stock exchange. The mandate of the Board of Directors is also proposed to include the possibility of using shares held in treasury as payment in acquisitions, or to sell shares in other ways than over the stock exchange to finance acquisitions and to cover the Company's obligations under incentive programmes.

Stockholm, 13 May 2008 Jörgen Wigh President & CEO

REVIEW REPORT

Introduction

We have performed a review of the twelve-month period covered by the Year-end Report (the interim report) for Lagercrantz Group AB as of 31 March 2008. The preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act are the responsibility of the Board of Directors and the President. Our responsibility is to express an opinion on the basis of our review.

Focus and scope of the review

We have performed our review in accordance with the Standard for Review, SÖG 2410 Review of interim financial information performed by the company's elected auditor. A review comprises making inquiries, primarily of individuals responsible for financial and accounting matters, and performing analytical procedures and other review procedures. A review has a different focus and significantly smaller scope compared with an audit in accordance with Auditing Standards in Sweden (RS) and generally accepted auditing standards in other respects. Given the procedures performed in a review, it is not possible for us to obtain such a degree of assurance that we would become aware of all important circumstances which

could have been identified had an audit been performed. Therefore, the opinion expressed on the basis of a review does not have the assurance of an opinion based on an audit.

Conclusion

Based on our review, no circumstances have come to our attention which would give us reason to consider that this interim report has not, in all material respects, been prepared, as far as the group is concerned, in accordance with IAS 34 and the Swedish Annual Accounts Act and, as far as the parent company is concerned, in accordance with the Swedish Annual Accounts Act.

Stockholm, 13 May 2008 KPMG Bohlins AB

George Pettersson Authorised Public Accountant

LAGERCRANTZ GROUP IN BRIEF

The business is organised in three divisions: Division Electronics is primarily involved in marketing solutions in industrial wireless communication and embedded systems. Division Mechatronics offers electric and electro-mechanical components as well as production of cable harnesses and electric connection systems. Division Communications provides solutions in digital image transmission/technical security, design software and access products. Customers are primarily manufacturing companies.

Lagercrantz is today active in eight countries in Northern Europe and in China. The Group has revenue of about 2 billion kronor and has approximately 800 employees.

CALENDAR

Annual report 2007/08 Around 30 June 2008
Quarterly report 1 April 30 June 2008 14 August 2008
Annual general meeting 2007/08 1 September 2008

FOR FURTHER INFORMATION, CONTACT

Jörgen Wigh, President & CEO, telephone +46 (0)8 700 66 70 Niklas Enmark, CFO, telephone +46 (0)8 700 66 70

LAGERCRANTZ GROUP AB (PUBL)

Box 3508 • Torsgatan 2, SE-103 69 Stockholm, Sweden Telephone +46 (0)8 700 66 70 • Fax +46 (0)8 28 18 05 [email protected] • www.lagercrantz.com Company number 556282-4556