Interim Report January-June 2007

Teleca's core business is developing well - order intake improved;
margins have not fully recovered.

2007 2006
Key figures, Jan-Jun Jan-Jun Change 2007 2006
SEK million Apr-Jun Apr-Jun Change
Net sales 642 744 -14% 324 394 -18%
Operating
earnings
(EBIT) -598 -108 n.a. -55 -87 n.a.
Earnings for
the period
from
continuing
operations -704 -128 n.a. -67 -99 n.a.
Earnings for
the period
from
discontinuing
operations 350 317 10% -34 278 -112%
Earnings for
the period -354 189 -288% -101 180 -156%
Earnings per
share, SEK -5.68 3.02 -288% -1.62 2.88 -156%
Cash flow
from current
operations -202 -20 n.a. -150 65 -331%
Cash flow
after
investment
operations 576 215 168% 619 337 84%
Net sales
Consulting 552 619 -11% 277 328 -15%
Net Sales
Products/
Obigo 91 125 -27% 47 66 -29%
EBIT
Consulting 50 71 -30% 21 44 -53%
EBIT
Products/
Obigo -121 -89 n.a. -55 -45 n.a.

Note: During the first half of 2007 it was decided to divest the
auSystems division and close down the operations in Japan. According to
IFRS, auSystems and the Japanese operations are reported as discontinuedoperations, implying 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
auSystems and Japan and the preliminary result from a sale of auSystems
are reported as a single amount on the face of the income statement.
· The consulting business reported operating earnings (EBIT) of SEK 21
million (44) and an 8% operating margin (13%) for the second quarter. Q2
had 1 less available working day than Q1. This corresponds to an effect
of about 1.6 percentage point on the operating margin. The consulting
business reported revenues of SEK 277 million (328), an increase of 1%
over the first quarter.
· The operating earnings for the second quarter were SEK -55 million.
Major changes in Teleca's cost base were implemented during the quarter.
From quarter three, costs in Products are estimated to be about SEK 60
million lower compared to the second quarter. Teleca will continue to
manage its cost down to match declining product revenue.
· Teleca focuses on the services business to the top 5 OEMs and their
key technology suppliers and these accounted for 82% (77) of total
revenue. Order intake improved for the group in the quarter and order
backlog increased 27% in the quarter, excluding outsourcing from Russia
where the order intake due to seasonal impact has been traditionally
very high in Q2.

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
· Mattias Stenberg, Investor Relations Manager, Teleca AB, mobile +46-
706119616

Interim Report January-June 2007

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