Semcon — Annual Report 2007

Feb 21, 2008

AN EVENTFUL & SUCCESSFUL YEAR

FINANCIAL STATEMENT JAN-DEC 2007

KEY EVENTS DURING THE YEAR

• Acquisition of IVM Automotive and Caran.
• Introduction of cost-cutting scheme
• Sale of the Zpider business area

FOURTH QUARTER

• Sales rose by 147% to SEK 896 million (363 m). Organic growth reached 15%*
• Profi t after tax was SEK 183 million (2 m)
• Earnings per share (EPS) after dilution was SEK 10.30 (0.13)

JANUARY – DECEMBER

• Sales rose by 83% to SEK 2,497 million (1,361 m). Organic growth reached 12%*
• Profi t after tax was SEK 228 million (48 m)
• Earnings per share (EPS) after dilution was SEK 12.82 (2.59)

* The information for the fourth quarter and for the full year 2007, including comparable data for last year, applies to the remaining businesses in the Group, i.e. excluding the sold Zpider business area.

KEY EVENTS DURING 2007

Semcon acquired IVM Automotive of Germany on 1 April and Caran on 31 August. Both companies have sales of around SEK 900 million each and both have around 1,000 employees. The strategy behind the acquisitions is to create a bigger global business, partly to take on bigger, more complex engineering assignments and partly to be close to customers. The new Group is now one of the world's biggest suppliers of technical development services to the automotive industry, for both cars and trucks, and is well equipped to meet the demands set by our international customers. The acquisition of Caran also means that we expand our range of services to the engineering industry and become one of the biggest suppliers in Northern Europe.

A cost-cutting scheme at the central level was introduced in Q2. Measures implemented during the year are expected to save around SEK 30 million a year in Sweden and SEK 15 million in Germany, achieving their full effect in the 2008 fi nancial year. The costs for carrying out the cost-cutting scheme affected the 2007 results by SEK 19 million.

The acquisition of Caran has also meant major savings in the business, including costs for administrative personnel and the possibilities of utilising joint IT systems and premises. The overall annual savings are estimated at around SEK 40 million. The cost of implementing the scheme was SEK 15 million in Q4 and SEK 19 million for the full year.

In order to focus our resources on our core business in product development and information solutions, the Zpider business area was sold on 31 December to the Finnish IT company Enfo Oyj. The sale also helped fi nance the acquisition of IVM Automotive and Caran. The sale of Zpider strengthened the company's equity and generated a capital gain of SEK 257 million. Net borrowings have fallen by SEK 311 million during Q1 2008, which has drastically reduced debt/equity.

SALES AND EARNINGS ANALYSIS

Information for Q4 and for 2007, including comparable data for last year, refer to the remaining business in the Group, i.e. excluding the Zpider business, unless otherwise stated.

Fourth quarter

Group sales rose by 147% to SEK 896 million (363 m) in Q4. Organic growth for the period was 15%.

The operating loss after depreciation was SEK 58 million (-3 m), giving an operating margin of -6.5% (-0.8). One-off costs of SEK 127 million (25) affected operating earnings after depreciation, and refer to the integration of Caran, SEK 15 million, and write down of goodwill, SEK 112 million, of which IVM Automotive's value has been written down by SEK 100 million. (See note 1 on page 12 for more information.)

The German market is one of the most important in the automotive industry and is why the acquisition of IVM Automotive creates a good strategic platform for our international expansion. A impairment test shows however that the purchase price was high in relation to the company earnings capacity under the present market conditions. Excluding one-off costs the operating profi t was SEK 69 million (22 m) and the operating margin 7.7% (6.0).

The loss after net fi nancial items was SEK 69 million (-4 m). Net fi nancial items was SEK -11 million (-1 m). The drop relates to the acquisition of IVM Automotive and Caran. The profi t after tax for divested business amounted to SEK 263 million (9 m) giving a profi t after tax for the Group of SEK 183 million (2 m ). EPS after dilution SEK 10.30 (0.13).

January to December

The operating income during the year was SEK 2,497 million (1,361 m). The organic growth was 12%.

The operating loss after depreciation was SEK 11 million (+52 m). This gave an operating margin of -0.4% (3.8). The operating profi t after depreciation has been hit with one-off costs of SEK 162 million (31 m). (See note 1 on page 11 for more information). Excluding these items the operating profi t was SEK 150 million (82 m) and the operating margin 6.0% (6.1).

The loss after net fi nancial items was SEK 35 million (50 m). Tax costs were SEK 21 million (19 m). Non-deductible write down of goodwill of SEK 112 has affected the profi t before tax. The profi t after tax for divested business amounted to SEK 284 million (17 m). The profi t after tax for the Group was SEK 228 million (48 m). EPS after dilution was SEK 12.82 (2.59).

SEMCON'S BUSINESS AREAS

Following the sale of Zpider, Semcon's business is divided into three business areas: Automotive R&D, Design & Development and Informatic. Semcon AB is the parent company of the Group and is responsible for Group-wide issues.

AUTOMOTIVE R&D

	OCT-DEC		JAN-DEC
SEK m	2007	2006	2007	2006
Sales	569,6	149,4	1 512,7 530,0
Share of total sales, %	63,6	41,1	60,6	38,9
Operating profit after dep	35,1	9,8	63,0	27,2
Operating margin, %	6,2	6,6	4,2	5,1

In terms of sales 2007 was a very successful year for the business area with major organic growth plus the acquisition of IVM and Caran. Organic growth for Q4 was 13% and 17% for the full year. IVM showed a weak positive operating profi t before one-off costs. Excluding IVM Automotive, the operating margin was 11.0% (6.6) for the quarter and 7.6% (5.1) for the full year.

Demand for advanced technical specialist expertise, mainly in Europe, continues to be strong. Following the acquisition of IVM and Caran, Semcon is one of the world's biggest suppliers of development services to the auto industry, something that's been seen as very positive by our customers.

Great emphasis was placed on integrating the organisation's joint resources during the quarter in order to provide our customers with the right expertise in larger projects available on the market. Efforts during the period have resulted in healthy orders form major customers in Sweden as well as Germany. There is still a major need for more engineers. Growth in Brazil is continuing according to plan and our intensifi ed market activities in other BRICK countries are now beginning to show results.

The business area has further strengthened its level of expertise and range after the end of the period in the area of security by taking over a group of specialists from Autoliv in the UK.

DESIGN & DEVELOPMENT

	OCT-DEC		JAN-DEC
SEK m	2007	2006	2007	2006
Sales	229,2	137,4		620,5 490,6
Share of total sales, %	25,6	37,8	24,8	36,0
Operating profit after dep.	25,2	6,7	52,4	15,8
Operating margin, %	11,0	4,9	8,4	3,2

Organic growth for the fourth quarter was 7% and 11% for the full year. We are continuing to see strong demand from our customers in sectors like energy and plant, aviation, packaging industry, offshore and development-intensive engineering industries.

Semcon is a long-term partner to Saab AB in the aviation industry. This partnership has grown stronger during the year. Assignment orders are placed in design, construction and estimates of airborne equipment for Saab's own aircraft models and components within the framework for the partnership assignments Saab has with Boeing and Airbus.

Semcon Project Management (SPM) provides a wide range of project management training and services that have been successful during the year. In recent years SPM has trained over 15,000 individuals in almost 40 countries.

Medical Life Science has also had a good year and has continued its expansion by establishing new offi ces in Lund and Uppsala.

During the year EIS by Semcon (Embedded Intelligent Solutions) has very successfully completed a number of comprehensive projects. These projects include expertise from other Semcon businesses, which is positive. There are now around 150 individuals working in the in-built system in Design & Development, with around 400 in the Group as a whole.

INFORMATIC

	OCT-DEC		JAN-DEC
SEK m	2007	2006	2007	2006
Sales	97,1	76,5		364,2 340,8
Share of total sales, %	10,8	21,1	14,6	25,0
Operating profit after dep.	8,7	5,3	35,0	39,5
Operating margin, %	9,0	6,9	9,6	11,6

Sales growth for the fourth quarter was 26% and 7% for the year. The Swedish business continued to develop well during the quarter and we see opportunities for further expansion in the future.

The single biggest share of growth comes from our Jaguar/Land Rover deal in the UK. At our premises close to the Jaguar/Land Rover product development centre in Gaydon, Informatic is responsible for all development and production of aftermarket information such as owner manuals, diagnostic and service information, training manuals and training of technicians. There are currently over 50 people involved in various projects for Jaguar and Land Rover.

The business in Hungary and China continued to develop according to plan during the quarter and we see good opportunities for further growth. There is growth potential in China, mainly by helping foreign companies that have moved parts of their product development to the country. There is both a local market in Hungary and an ambition to site some production in back-offi ce environments, meaning that some of the work for our customers in Sweden and the UK will be performed in Hungary.

Design & Development provides product development, production development and project management focussing on the energy and engineering industries, pharmaceuticals and medi-tech, telecoms and aviation industries. Our range in the area is mainly aimed at development managers in technical and project-intensive manufacturing companies. Business area manager: Mats Körner

Biggest customers: ABB, Alstom, AstraZeneca, Bombardier, Ericsson, FMV, Fortum, GE, Haldex, Husqvarna, Metso Paper, Nokia, Pfi zer, Preemraff, Saab AB and Sony Ericsson ²⁵

Informatic's businesses develop information solutions for market communication and the aftermarket. Our range in the area is mainly aimed at the automotive and engineering industries plus Information and Communication Technologies (ICT). Business area manager:

Johan Ekener

Biggest customers: Bombardier, Ericsson, Ford - Volvo Personvagnar och Jaguar och Land Rover, GM - Saab Automobile and Cadillac, Kockums, Sony Ericsson and AB Volvo

ZPIDER

All activities in the business area were sold to the Finnish IT company Enfo Oyj on 31 December. The business area is reported separately in this report under the heading "Divested activities".

STAFF AND ORGANISATION

The average number of employees was 2,672 (1,509). The headcount at the period's end was 3,648 (1,522) of whom 2,511 in Sweden and 1,137 abroad. Staff turnover in Sweden was 17.8% (12.1). The high staff turnover rate is mainly due to the favourable business climate. The average number of employees in the respective business area at the end of the period was: Automotive R&D 2,401 (615), Design & Development 906 (606) and Informatic 341 (301).

FINANCIAL POSITION, INVESTMENTS AND SHAREHOLDER INFORMATION

The operation's cash fl ow from current activities was SEK 24 million (109 m). The Group's liquid assets stood at SEK 117 million (29 m). Investment in hardware, licences and offi ce supplies and equipment was SEK 37 million (25 m). Shareholders' equity at the end of the period was SEK 494 million (265 m), the equity/assets ratio was 23.5% (40.0) and the debt/equity ratio was 1.6 times (0.0). Net borrowings stood at SEK 778 million (12 m). The increase is due to the acquisition of IVM Automotive and Caran.

The sale of the Zpider business area had not affected net borrowings as of 31 December 2007 because the settlement of the proceeds from the sale and the old additional purchase price were not completed until 8 February 2008. The effects of the sale mean that net borrowings have fallen by SEK 311 million. Taking this into account the debt/equity ration will drop to 0.9 times and the equity/assets ratio will increase to 29%.

Ownership structure

On 31 December, the JCE Group held 29.9% of Semcon's shares, Skandia Liv held 13.1%, Swedbank Robur fonder held 6.7% and Handelsbankens fonder held 6.1%. Foreign ownership of Semcon on 31 December was 19.5% (20.2) and the number of shareholders was 3,411 (4,340). The total number of shares at the end of the period was 17,782,534. Semcon is listed on the OMX Nordic Exchange Stockholm under the SEMC ticker and has a share class with equal voting rights.

SHARE DIVIDEND

In accordance with Semcon's dividend policy, consideration is given to the company's fi nancial position and capital requirements for continued expansion, and due to the acquisition of IVM Automotive and Caran the Board proposes that no dividend be paid for 2007 (0).

ACQUISITION AND SALES OF COMPANIES

Semcon has acquired 100 per cent of the shares in Caran AB, Caran Design Limited, A2 Acoustics AB and Caran Embedded Intelligent

Solutions AB. Semcon also acquired the German company IVM Automotive Beteiligungs GmbH during the year. More information about the acquisitions is given on page 10.

On 31 December 100% of Semcon's ownership of Zipper AB, Zystem Solutions by Semcon AB, Zingle by Semcon AB, Zuite AB and Semcon Innovation AB was sold. Zetup by Semcon, which was part of the Zpider business area, was sold on 7 September. The effects of the sale of these companies are reported as sold businesses in the income statement and cash fl ow statement. In addition, Propeller by Semcon AB, which was part of Design & Development, was sold on 1 April and Semcon's part of Compliant Logistics AB was sold on 17 of October.

RISK AND INSTABILITY FACTORS

The Group's and parent company's signifi cant risks and instability factors include business risks in the form of high exposure towards a certain industry. In general terms the acquisition of businesses involved increased risks. This also includes fi nancial risks mainly concerning interests and currency risks. In addition to the risk described in Semcon's Annual Report 2006 (see page 30-31 for an extensive description of the Group's and parent company's exposure and risk management), no other signifi cant risks exist apart from the increased risk exposure that has arisen due to the integration of IVM Automotive and Caran.

KEY EVENTS AFTER THE CLOSING DATE

•The Board decided at the Extraordinary General Meeting on 7 February 2008 to:

• appoint Hans-Erik Andersson as the Chairman of the Board

• introduce a long-term share savings scheme for Group employees. The share savings scheme means in brief that participants of the scheme will pay part of their wages for a period of 12 months to buy shares in the company. After a period of three years each share saved will entitle the holder, providing the individual is still employed by the Semcon Group, to one matching share. The share savings scheme will include a maximum of 330,000 shares, of which 250,000 will be matching shares and 80,000 mainly to cover social security expenses.

• implement a convertible-based incentive scheme for a maximum of 165 key employees in the Semcon Group and to take up a convertible subordinate debenture of no more than SEK 50 million. The convertibles will, from 20 March 2008, bear interest of three per cent per year. The scheme will provide a maximum dilution of 3.3 per cent of the current number of shares.

• To appoint Kjell Nillson as the new President and CEO from February 2008.

OUTLOOK

Demand is expected to remain good and a continued healthy earnings trend is expected throughout 2008 on the back of the savings and integration scheme.

OTHER INFORMATION

Accounting principles

Semcon follows the IFRS standards and interpretations thereof used by the EU (IFRIC). This fi nancial statement has been produced in accordance with IAS 34. The same accounting principles have been applied in this fi nancial statement a in the latest annual report. The new or revised IFRS standards that came into effect on 1 January 2007 do not affect the reported results or position.

Reporting and Annual General Meeting

The 2007 Annual Report is expected to be published at the end of March 2008 and will be sent to all shareholders who've notifi ed of their intention to receive printed information from Semcon. The Annual Report is also available on Semcon's website: http://www.semcon.se and at Semcon's head offi ce at: Theres Svenssons gata 15 in Göteborg. It can also be ordered by: Phone: +46 (0)31 721 00 00 Fax: +46 (0)31 721 03 33 Email: info@semcon.se

Questions to the nominating committee, consisting of Christer Ericsson, representing JCE Group; Erik Sjöström, representing Skandia Liv, Joakim Spetz, representing Handelsbanken fonder and Kjell Nilsson, can be submitted via email to: valberedning@semcon.se

The 2007 Annual General Meeting will take place at 5 p.m. on 24 April 2008 at Semcon's head offi ce in Göteborg. The record day is proposed for 18 April.

The quarterly report for Q1 will be published on 24 April.

Göteborg, 21 February 2008.

Hans-Erik Andersson Chairman of the Board

Pia Gideon Board member

Ulf Wallin Board member

Gunvor Engström Board member

Christer Eriksson Employee representative Kjell Nilsson CEO and Board member

Annemarie Gardshol Board member

Dan Persson Board member

Stefan Novakovic Employee representative

Roland Kristiansson Employee representative

SEMCON AB (PUBL) 417 80 Göteborg, Sweden

Co. Reg. No. 556539-9549 www.semcon.se

For more information, please contact: Kjell Nilsson, CEO Semcon AB, +46 (0) 702 60 01 21 Björn Strömberg, CFO Semcon AB, +46 (0)708 35 44 80 Anders Atterling, IR manager Semcon AB, +46 (0)704 47 28 19

This report has not been subject to review by the company's auditors.

FINANCIAL REPORTING

AGM for 2007 24 April 2008 Q1 report 24 April 2008 Q2 /half year report 17 July 2008 Q3 report 23 October 2008

Head offi ce: Semcon AB, 417 80 Göteborg, Sweden, Phone: +46 (0)31 721 00 00, Fax: +46 (0)31 721 03 33, Visiting address: Theres Svenssons gata 15

CONSOLIDATED FINANCIAL SUMMARY

INCOME STATEMENT		OCT-DEC		JAN-DEC
SEK m	2007	2006	2007	2006
Operating income	895.9	363.3	2,497.4	1,361.4
Purchase of goods and services	-218.5	-60.8	-594.2	-260.5
Other external operating expenses*	-78.9	-62.8	-250.7	-153.1
Staff costs	-535.1	-236.0	-1,524.0	-881.0
Operating profi t before depreciation	63.4	3.7	128.5	66.8
Depreciation of tangible assets	-6.7	-1.9	-21.6	-8.7
Depreciation of intangible assets	-2.9	-0.5	-5.8	-2.0
Write down of goodwill	-112.2	-4.4	-112.2	-4.4
Operating profi t/loss after depreciation and amortisation (Note 1)	-58.4	-3.1	-11.1	51.7
Net fi nancial items	-10.8	-1.2	-24.4	-1.9
Profi t/loss after net fi nancial items	-69.2	-4.3	-35.5	49.8
Tax	-10.4	-2.6	-20.7	-18.9
Profi t/loss after tax, remaining business	-79.6	-6.9	-56.2	30.9
Profi t after tax, sold business (Note 2)	262.7	9.0	284.2	17.3
Profi t after tax**	183.1	2.1	228.0	48.2
Average number of shares	17,782,534	17,718,295	17,762,400	17,531,478
Average number of convertibles	-	66,343	21,186	253,160
EPS, SEK	10.30	0.13	12.84	2.62
EPS after dilution, SEK	10.30	0.13	12.82	2.59
No. of days in the period	62	63	249	250
* Of which share in associated company's profi t/loss	0.6	-0.4	0.3	-1.0
** Of which parent company shareholders	183.1	2.4	228.0	46.0
Of which minority interests	-	-0.3	-	2.2
Note 1 See page 11. One-off costs.

Note 2 See page 11. Profi t/loss after tax, sold business.

QUARTERLY INFORMATION BY BUSINESS AREA

	2006	2006	2006	2006	2007	2007	2007	2007
Sales (SEK m)	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Automotive R&D	132.1	133.6	114.9	149.4	157.2	378.3	407.6	569.6
Design & Development	121.7	124.4	107.1	137.4	136.7	123.7	130.9	229.2
Informatic	92.9	103.1	68.3	76.5	95.1	96.0	76.0	97.1
Remaining business	346.7	361.1	290.3	363.3	389.0	598.0	614.5	895.9
Operating profi t/loss after amortisation/depreciation (SEK m)
Automotive R&D	10.7	2.5	4.2	9.8	10.6	5.1	12.2	35.1
Design & Development	6.9	1.6	0.6	6.7	14.1	1.5	11.6	25.2
Informatic	14.0	15.6	4.6	5.3	11.4	13.1	1.8	8.7
Total before one-off costs	31.6	19.7	9.4	21.8	36.1	19.7	25.6	69.0
One-off costs	-	-5.9	-	-24.9	-1.0	-26.0	-7.1	-127.4
Remaining business	31.6	13.8	9.4	-3.1	35.1	-6.3	18.5	-58.4
Operating margin (%)
Automotive R&D	8.1	1.9	3.7	6.6	6.7	1.3	3.0	6.2
Design & Development	5.7	1.3	0.6	4.9	10.3	1.2	8.9	11.0
Informatic	15.1	15.1	6.7	6.9	12.0	13.6	2.4	9.0
Total before one-off costs	9.1	5.5	3.2	6.0	9.3	3.3	4.2	7.7
Remaining business	9.1	3.8	3.2	-0.9	9.0	-1.1	3.0	-6.5
Number of employees
Automotive R&D	599	602	610	615	622	1,633	2,450	2,401
Design & Development	635	621	609	606	607	574	908	906
Informatic	289	288	283	301	332	329	343	341
Remaining business	1,523	1,511	1,502	1,522	1,561	2,536	3,701	3,648
Number of days in the period	64	58	65	63	64	58	65	62

BALANCE SHEET SEK m	2007 31 DEC	2006* 31 DEC
Assets
Intangible fi xed assets, goodwill	516.6	71.9
Other intangible fi xed assets	18.9	6.7
Tangible fi xed assets	92.3	32.1
Financial fi xed assets	21.3	19.8
Other long-term receivables	62.3	4.8
Current assets	1,275.3	499.1
Cash and bank balances	117.1	28.9
Total assets	2,103.8	663.3
Shareholders' equity and liabilities
Shareholders equity	494.0	265.1
Pension allocations	63.7	-
Other long-term allocations	53.7	39.8
Interest-bearing long-term liabilities	404.0	1.5
Interest-bearing current liabilities	427.7	39.7
Non interest-bearing current liabilities	660.7	317.2
Total shareholders' equity and liabilities	2,103.8	663.3
Minority share of shareholders' equity at start of year	2.3	-
Minority share of acquired subsidiaries during the year	-	0.1
Minority share of subsidiaries sold during the year	-2.3	-
Profi t/loss for the year attributable to minority shareholdings	-	2.2
Minority share of shareholders' equity at year-end	-	2.3

* Including assets and liabilities concerning sold businesses

CHANGE IN SHAREHOLDERS EQUITY SEK m	2007 31 DEC	2006 31 DEC
Shareholders' equity at start of period	265.1	198.9
Translation difference	-0.5	-0.2
Sale/acquisition of Semcon's shares	-	5.9
New share issue	1.4	12.3
Earnings for the period attributable to parent company shareholders	228.0	46.0
Shareholders' equity before minority participations	494.0	262.9
Earnings for the year attributable to minority interests	-	2.2
Shareholders' equity at end of period	494.0	265.1

CASH FLOW STATEMENT SEK m	2007 JAN-DEC	2006 JAN-DEC
Cash fl ow from current activities before change in working capital	28.1	46.5
Change in working capital	-4.3	62.4
Cash fl ow from current activities	23.8	108.9
Net investments	-36.9	-23.9
Acquisition of subsidiaries/associated companies	-651.0	-14.0
Sale of subsidiaries/associated companies	-	0.3
Sale of fi xed assets	0.4	9.4
Cash fl ow from investment activities	-687.5	-28.2
Change in interest-bearing receivables and liabilities	751.9	-69.7
Cash fl ow from fi nancing activities	751.9	-69.7
Cash fl ow of remaining activities	88.2	11.0
Cash fl ow of sold activities (Note 3)	25.4	-
Cash fl ow for the year	113.6	11.0

Note 3 See page 11 Cash fl ow statement for sold activities

KEY FIGURES* EXCLUDING ONE-OFF COSTS	2007	2006
	31 DEC	31 DEC
Operating margin after depreciation/amortization (%)	6.0	5.9
Profi t margin (%)	5.0	5.8
Earning capacity of average shareholders' equity (%)	37.3	26.6
Earning capacity of average capital employed (%)	22.8	24.9

KEY FIGURES* INCLUDING ONE-OFF COSTS	2007	2006
	31 DEC	31 DEC
Change in sales (%)	83.4	4.4
Operating margin before depreciation/amortization (%)	5.1	4.9
Operating margin after depreciation/amortization (%)	-0.4	3.8
Profi t margin (%)	-1.4	3.7
Earning capacity of average shareholders' equity (%)	60.2	19.9
Earning capacity of capital employed (%)	-1.2	21.4
Equity/assets ratio (%)	23.5	40.0
Debt/equity ratio (times)	1.6	0.0
Interest coverage ratio (times)	-0.3	12.9
Average number of employees	2,672	1,509
Sales per employee (SEK 000)	935	902
Value added per employee (SEK 000)	555	602
Profi t after net fi nancial items per employee (SEK 000)	-13.3	33.1
Investments in fi xed assets (SEK m)	36.6	25.4

KEY FIGURES FOR SHARES*	2007 31 DEC	2006 31 DEC
EPS after tax (SEK)	12.84	2.62
EPS after dilution (SEK)	12.82	2.59
Shareholders' equity before dilution (SEK)	27.78	14.82
Shareholders' equity after dilution (SEK)	27.78	14.78
Shareholders' equity per share (times)	2.91	4.61
Cash fl ow per share (SEK)	6.39	0.62
Dividend	-	-
P/E ratio	6.29	26.01
P/S ratio	0.57	0.88
Share price at end of period (SEK)	80.75	68.25
Market price at end of period (SEK m)	1,436	1,211
Number of shares at end of period. Quotient value SEK 1 (000)	17,783	17,742
Average number of shares (000)	17,762	17,531
Number of outstanding convertibles at end of period (000)	-	42
Average number of convertibles (000)	21	253
Number of own shares at end of period (000)	-	-

* Defi nitions of key fi gures appear on page 31 of the Annual Report for 2006

LARGEST HOLDINGS ON 31 DEC

	NUMBER OF SHARES	PER CENT
JCE Group	5,318,178	29.91
Skandia liv	2,337,900	13.15
Swedbank Robur fonder	1,194,910	6.72
Handelsbankens fonder	1,082,319	6.09
Mellom Omnibus	460,920	2.59
Glitner Bank Ltd	411, 110	2.31
Kaupthing Bank	395,800	2.23
ESR EQ	248,400	1.40
Morgan Stanley	208,890	1.17
Gartmore	206,430	1.16
Total	11,864,857	66.73
Other	5,917,677	33.27
Total	17,782,534	100.00

PRICE TREND

CORPORATE ACQUISITIONS

ACQUISITION OF IVM AUTOMOTIVE

Semcon has acquired 100% of shares in IVM Automotive Beteiligungs GmbH. IVM was consolidated into Semcon on 1 April 2007. IVM is a leading design and development partner to the European automotive industry. IVM currently has around 1,000 employees at seven sites in Germany plus Spain and Brazil. Customers include leading automotive manufacturers like Audi, BMW, Ford, GM, Mercedes Benz, Porsche and Volkswagen plus their system manufacturers. IVM's German business is strategically located in Munich, Stuttgart, Ingolstadt, Rüsselsheim, Wolfsburg, Bad Friedrichshall and Böblingen.

IVM's sales between January-December 2007 amounted to EUR 87.1 million with a net loss of EUR 4.6 million. Between April-December 2007 sales totalled EUR 73.1 million with a net loss of EUR 2.7 million. The operating profi t after depreciation/amortization and before one-off costs was EUR 0.1 million for the period.

ACQUISITION OF CARAN

Semcon signed a contract with the JCE Group on 21 August to acquire 100% of the shares in Caran AB, Caran Design Limited, A2 Acoustics AB and Caran Embedded Intelligent Solutions AB. The takeover took place on 31 August 2007.

The JCE Group is Semcon AB's biggest shareholder with a holding of 29.9%. The purchase price was SEK 335 million, which is the same price the JCE Group paid when they acquired the companies from WM-data on 4 June 2007.

Caran specialises in industrial design and product development. The company was founded in 1983. Caran's head offi ce is in Göteborg but the company also has offi ces in Lund, Helsingborg, Jönköping, Karlstad, Örebro, Eskilstuna, Södertälje, Stockholm and Linköping. Outside Sweden Caran has offi ces in London and Bangalore. Caran has extensive, close relationships with its customers, including AB Volvo, Volvo Cars, Scania, Saab Automobile/GM and Saab AB.

Caran's sales between January-December 2007 amounted to SEK 898.2 million with a net profi t of SEK 35.2 million. Between 1 September-31 December sales amounted to SEK 320.9 million with a net profi t of SEK 16.7 million. The operating profi t after depreciation/amortization and before one-off costs was SEK 40.1 million for the period.

SPECIFICATION OF THE ACQUIRED NET ASSETS AND GOODWILL

SPECIFICATION OF ASSETS AND LIABILITIES	IVM AUTOMOTIVE			CARAN
SEK m	MARKET VALUE	BOOKED VALUE	MARKET VALUE	BOOKED VALUE
Intangible fi xed assets	6.1	15.6	24.2	26.9
Tangible fi xed assets	40.4	40.4	18.8	18.8
Financial fi xed assets	-	-	0.2	0.2
Deferred tax assets	48.7	-	1.8	1.0
Operating assets	211.4	211.4	222.1	222 .1
Liquid assets	19.4	19.4	9.5	9.5
Total assets	326.0	286.8	276.6	278.5
Interest-bearing allocations and liabilities	-60.7	-47.9	-54.3	-54.3
Other allocations and operating liabilities	-208.1	-204.6	-149.4	-149.4
Total market value of acquired net assets	57.2	34.3	72.9	74.8

SPECIFICATION OF GOODWILL

SEK m
Purchase price paid including acquisition costs	348.2	335.2
Market value of acquired net assets	-57.2	-72.9
Goodwill*	291.0	262.3

* Goodwill is attributable to the acquired companies' ability to earn and synergies expected as a result of the acquisitions. The customer base is expanding and the geographic spread is expanding both nationally and internationally. The acquisitions also mean an increased opportunity to take on larger, more complex complete projects. At the time of writing the financial statement IVM Automotive's value had depreciated by SEK 100 million. The German market is one of the most important in the automotive industry and is why the acquisition of IVM Automotive creates a good strategic platform for our international expansion. A impairment test shows however that the purchase price was high in relation to the company earnings capacity under the present market conditions.

NOTES

2007 2006 2007 2006 OCT-DEC OCT-DEC JAN-DEC JAN-DEC Cost-cutting scheme Integration costs, Caran and IVM Dismissal of CEO Other organisational changes Write down of goodwill Cancellation of internal IT projects Costs in connection with bids for Semcon Total remaining activities NOTE 1; ONE-OFF COSTS SEK m - -15.2 - - -112.2 - - -127.4 - - - -3.0 -4.4 -11.9 -5.6 -24.9 - - -5.9 -3.0 -4.4 -11.9 -5.6 -30.8 -18.8 -22.3 -5.0 -3.2 -112.2 - - -161.5

Specifi cation of items in the income statement
Other external expenses	-4.4	-17.5	-4.4	-17.5
Staff costs	-10.8	-3.0	-44.9	-8.9
Write down of goodwill	-112.2	-4.4	-112.2	-4.4
Total	-127.4	-24.9	-161.5	-30.8

NOTE 2; INCOME STATEMENT OF SOLD ACTIVITIES	2007	2006	2007	2006
SEK m	OKT-DEC	OKT-DEC	JAN-DEC	JAN-DEC
Operating income	95.8	79.5	338.7	252.7
Operating expenses	-86.2	-66.7	-295.9	-226.5
Profi t before depreciation	9.6	12.8	42.8	26.2
Depreciation	-0.2	-0.3	-1.2	-1.8
Profi t after depreciation	9.4	12.5	41.6	24.4
Financial items*	257.8	0.1	255.8	0.2
Profi t before tax	267.2	12.6	297.4	24.6
Tax	-4.5	-3.6	-13.2	-7.3
Profi t after tax	262.7	9.0	284.2	17.3

* Includes a tax-free capital gain from the sale of the Zpider business area of SEK 257.3 million.

NOTE 3; CASH FLOW STATEMENT OF SOLD ACTIVITIES	2007	2006
SEK m	JAN-DEC	JAN-DEC
Cash fl ow from current activities	39.2	4.3
Cash fl ow from investment activities	4.1	-8.2
Cash fl ow from fi nancing activities	-17.9	3.9
Cash fl ow for the year	25.4	0.0

SUMMARY OF PARENT COMPANY'S FINANCIAL STATEMENT

INCOME STATEMENT SEK m	2007 OCT-DEC	2006 OCT-DEC	2007 JAN-DEC	2006 JAN-DEC
Operating income	-4.8	13.9	36.8	37.5
Other external expenses	-4.9	-9.2	-17.3	-16.8
Staff costs	-6.9	-5.3	-21.8	-22.2
Operating loss before depreciation	-16.6	-0.6	-2.3	-1.5
Depreciation of tangible assets	-	-	0,0	0,0
Operating loss after depreciation	-16.6	-0.6	-2.3	-1.5
Net fi nancial items *	227.5	58.3	214.5	60.4
Profi t after net fi nancial items	210.9	57.7	212.2	58.9
Appropriations	-2.1	8.2	-2.1	8.2
Profi t before tax	208.8	65.9	210.1	67.1
Tax	-8.3	-18.2	-8.7	-18.6
Profi t for the period	200.5	47.7	201.4	48.5

* Includes a tax-free capital gain from the sale of the Zpider business area of SEK 257.3 million and depreciation of shares in subsidiaries of SEK 120 million.

BALANCE SHEET SEK m	2007 31 DEC	2006 31 DEC
Assets
Financial fi xed assets	386.5	54.7
Fixed assets	917.9	387.3
Total assets	1,304.4	442.0
Shareholders' equity and liabilities
Shareholders' equity	403.4	210.0
Untaxed reserves	13.2	11.1
Interest-bearing long-term liabilities	400.4	-
Interest-bearing current liabilities	378.3	41.2
Non interest-bearing current liabilities	109.1	179.7
Total shareholders' equity and liabilities	1,304.4	442.0