INTERIM REPORT JANUARY-MARCH 2011

INTERIM REPORT JANUARY-MARCH 2011

Cost reductions improved operating profit


  · The road-marking business in Central and Northern Europe is highly
seasonal and really only begins in the second quarter.

  · Net turnover decreased by 33.5% and amounted to SKr 92.0 million
(138.4). The decline is mainly attributable to the contracting units in
Hungary, Romania and the Nordic region. In the Material Sales business
area the first quarter opened well, with an increase in turnover of SKr
9.5 million.

  · The operating result was a loss of SKr 85.2 million (loss 94.5). Raw
material prices have continued to rise, however the implemented action
programme has resulted in lower overheads, which improved the operating
result in relation to last year.

  · The seasonal nature of the business leads regularly to a deficit
being reported for the first quarter of the year.

  ·    The consolidated result after tax was a loss of SKr 69.9 million
(loss 75.3).

  · The loss per share was SKr 3.99 (loss 7.10).

Important events during the first quarter
Following negotiations in Norway, Geveko has been awarded most of the
contracts, which will result in higher volumes in relation to the
previous year. A major contract for the south of Jylland, Denmark, has
also been won, thereby ensuring a satisfactory volume. Contract
negotiations are currently underway in Sweden. On the national road
network in Romania, procurement contracts are negotiated in eight
regions. Geveko's subsidiary in Romania has renewed its road-marking
contracts for 2011 in six regions.

AB GEVEKO (publ) Co.reg.no.: 556024-6844
Box 2137, S-403 13 Göteborg, Sweden. +46 31 172945, info@geveko.se
www.geveko.se
 (http://www.geveko.se/)

Comments by Stefan Tilk, CEO and Managing Director
Some procurement negotiations have been completed in the Nordic region
and our assessment is that the road-marking market as a whole will
develop satisfactorily, both in the Nordic region and in Western Europe.
Raw material prices are expected to remain high, however. Competition in
the contracting industry means that there is little scope for price
increases. To some extent price increases can be passed on to customers,
but the situation on the raw materials market must be addressed by means
of greater efficiency.

The countries in Central and Eastern Europe still have a high level of
debt, which will result in tight government budgets. In all probability,
this will also affect the road-marking market in 2011, since most of the
market consists of public customers. In the Czech Republic, Slovakia and
Poland the first quarter has given an indication of stable volume
growth. In new negotiations for 2011, Geveko's subsidiary in Romania has
been awarded road-marking contracts in six out of eight regions. The
associate company in Turkey has been awarded road-marking contracts in
Turkmenistan and elsewhere. In contrast, during the first quarter the
Hungarian company noted a sharp drop in turnover and a very poor result
in relation to the previous year. The main reason for this is
persistently weak public finances and thus limited capacity to finance
road maintenance budgets.

The Material Sales business area has won a number of prestigious
contracts, including one in the TacPad® product area for the French
Stade de France. TacPad® markings, which are designed to help the
visually impaired in environments such as railway station platforms,
have been applied at stations in France, Norway and Great Britain. The
Material Sales business area has also signed a deal with Deutsche Bahn
for its Premark® products (prefabricated thermoplastic products).

Contact information:
Stefan Tilk, CEO and Managing Director       
Tel: +46 (0) 31 172945, +46 (0) 702 499419
Stefan.tilk@geveko.se