Semcon Interim report January -- September 2005


GOTEBORG, Sweden, Oct. 20, 2005 (PRIMEZONE) -- Semcon: Interim report January-September 2005.

STABLE, PROFITABLE GROWTH IN SALES


 - Sales climbed by 16.8% to reach SEK 1,086.5 m (930.4). 
 - Profit after tax was SEK 42.9 m (21.2). 
 - Earnings per share of SEK 2.47 (1.22).
 - Operating profit after depreciation (EBIT) reached SEK 58.0 m
   (33.7) to produce a margin of 5.3% (3.6).

Comments by CEO Hans Johansson

The aims for 2005 are to improve our margins and win more market shares. Our focused activities and the positive market trends mean that we are achieving both aims. Our sales growth remains vibrant at 17%, which is above average for the past ten years. Good demand for our business range has enabled us to recruit 205 new, young members of staff who have the specialist skills we need. A growing portion of our staff is being recruited internationally and working abroad or in international projects.

In recent years we have noted increasing globalisation, soaring oil prices and very tough competition affecting our customers. This is most notable in the vehicle sector, where cost-cutting, new conditions and price pressure are encountered every day. Naturally, these things affect us, too, and we are working hard to adapt. We depend on our customers being successful and continuing to invest in product development.

To meet new realities we work continually to reduce our own production costs, by investing in more effective processes and systems, re-locating in low-cost countries and sharpening our focus on costs. Another example is a recently started project and assignment in the auto industry that is employing more sub-consultants than before. The aim is to avoid being over-stretched if the sector enters a downturn.

But the single most important activity for us as we meet the challenges of the vehicle sector is to grow within telecoms, which so far has been proceeding according to plan. We will further intensify our efforts aimed at growth in the telecom sector in the autumn and winter. I believe we are on the correct course, but that it would be good to move a bit faster. We have a strong base for growth. At the start of the year we signed preferred supplier agreements with key customers, so I am positive about new business opportunities in the coming period.

We are continuing to follow our international growth strategy and we opened new development centres in China and Hungary in Q3. These start-ups improve our cost base and will make us more effective with our business offer.

Success continues for our IT companies, Zipper and Zystems in the Innovation business area. In addition to its strong and profitable growth, Zystems has received the IBM Software Partner of the Year award for the second time. Due to its rapid sales growth, Zipper has been nominated as a "Gasellforetag" (Up and coming company) by Dagens Industri.

Reporting This report has not been checked by the company's auditors.

Goteborg, 20 October 2005

Hans Johansson SEMCON AB (PUBL) Company reg. no. 556539-9549

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