Stock Exchange & Press Releases 2011

Print this release

April 29, 2011

EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY-MARCH 2011

* { font-family: Arial, Verdana, Helvetica; font-size: 13px;} td { padding: 3px; } } STOCK EXCHANGE RELEASE            

EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY-MARCH 2011
NET SALES DECREASED AND OPERATING RESULT WAS CLEARLY NEGATIVE. THE AUTOMOTIVE BUSINESS SEGMENT DEVELOPED AS PLANNED WHEREAS THE DEVELOPMENT OF THE WIRELESS BUSINESS SEGMENT DID NOT MEET THE TARGETS.

SUMMARY JANUARY-MARCH 2011

- Net sales for the period amounted to EUR 36.5 million (EUR 41.5 million, 1Q 2010), representing a decrease of 12.1 % year-on-year. Net sales of the Automotive Business Segment grew to EUR 23.6 million (EUR 18.5 million, 1Q 2010), representing a 27.4% growth year-on-year. The Wireless Business Segment's net sales fell by 44.2% to EUR 12.7 million (EUR 22.8 million, 1Q 2010). The decrease in net sales of the Wireless Business Segment was due to the significantly lower volume in the satellite terminal business.
- Operating loss was EUR -3.9 million (EUR 1.7 million, 1Q 2010). Operating profit for the Automotive Business Segment was EUR 0.6 million (EUR 0.9 million, 1Q 2010). The Wireless Business Segment's operating loss was EUR -4.6 million (EUR 0.9 million, 1Q 2010).
- EBITDA was EUR -1.6 million (EUR 3.8 million, 1Q 2010).
- Operating cash flow was EUR 1.4 million (EUR 10.6 million, 1Q 2010). The net cash flow was EUR -2.4 million (EUR 8.0 million, 1Q 2010).
- Cash and other liquid assets totaled EUR 18.1 million (EUR 67.1 million, 1Q 2010).
- Equity ratio remained strong at 63.9% (56.0%, 1Q 2010).
- Earnings per share were EUR -0.03 (EUR -0.01, 1Q 2010).
- Earlier on October 19, 2010, EB's customer TerreStar Networks Inc. filed for voluntary petition for reorganization, and its parent company TerreStar Corporation filed for voluntary petition for reorganization on February 16, 2011. Under the review period there were no changes in valuation in EB's receivables from these companies.
- EB lowered the profit guidance for the first half of 2011 on March 29, 2011. EB expects a clearly negative operating result for the first half of 2011. Earlier in the Financial Statement Bulletin on February 17, 2011, EB announced for the first half of 2011 that it expected operating result to be lower than in the first half of 2010 (EUR 1.8 million). The main reason for the revised profit outlook is a lowered revenue forecast in the Wireless Business Segment due to slower than expected order book development in the new satellite communication service solutions and due to increased competition in the area of smart phones related R&D services.

EB'S CEO JUKKA HARJU:

"During the first quarter of 2011 EB's operating result was clearly negative and did not meet our expectations. The Automotive Business Segment continued to grow strongly and the operating result developed as planned. The operating result for the Wireless Business Segment was clearly negative and did not meet our expectations due to slower than expected order book development in the new satellite communication service solutions and due to increased competition in the area of smart phones related R&D services. Within the Wireless Business Segment the demand for product development services strengthened towards the end of the first quarter of the year.

EB's main short-term objective remains to be improving profitability."

OUTLOOK FOR THE FIRST HALF OF 2011

The demand for software products and services is estimated to grow in the automotive industry and EB's net sales is expected to increase in the Automotive Business Segment. The net sales of EB's Wireless Business Segment is expected to remain in the same level than in the second half of 2010 (EUR 32.2 million, 2H 2010) but the revenue forecast still contains uncertainties in particular with respect to the timing of individual projects.

EB expects for the first half of 2011 that net sales will be lower than in the first half of 2010 (EUR 86.2 million) and operating result will be clearly negative (EUR 1.8 million, 1H 2010). It is expected that the operating result during the second quarter of the year will be better than during the first quarter of the year. The profit outlook for the first half of 2011 is based on the assumption that there will not be further bookings of impairments of EB's accounts receivables from TerreStar Networks Inc. and TerreStar Corporation. It is possible that, based on later information related to reorganizations of TerreStar Networks and TerreStar Corporation, this outlook may need to be reconsidered.

The continuing challenges of TerreStar Networks Inc., a significant customer of EB, in obtaining funding has resulted in payment delays. TerreStar Network and certain affiliates of TerreStar Corporation filed for voluntary petitions for reorganization to strengthen their financial position on October 19, 2010. TerreStar Corporation filed for voluntary petition for reorganization on February 16, 2011. Due to the uncertainties related to the outcome of reorganization processes of TerreStar Networks and TerreStar Corporation, the credit risk may still grow during the first half of 2011. More specific market outlook is presented under the "Business Segments' development during January-March 2011 and market outlook" section, and uncertainties regarding the filings for reorganization of TerreStar Networks and TerreStar Corporation, collecting the receivables, and other uncertainties regarding the outlook under "Risks and Uncertainties" section.

Information on TerreStar Networks' and TerreStar Corporation's reorganizations are presented in the October 20 and 25, November 20, December 30, 2010, and February 17, 2011, stock exchange releases at www.elektrobit.com .

INVITATION TO A PRESS CONFERENCE

EB will hold a press conference on the January-March interim report 2011 for media, analysts and institutional investors in Finland, Espoo, Keilasatama 5, 2^nd floor, meeting room Purje on Friday, April 29, 2011, at 11.00 a.m. (CEST+1). The conference will also be held as a conference call and the presentation will be shown simultaneously in the Internet through WebEx. The conference will be held in English. For more information on joining the conference please go to www.elektrobit.com/investors .

EB, Elektrobit Corporation
EB creates advanced technology and turns it into enriching end-user experiences. EB is specialized in demanding embedded software and hardware solutions for wireless and automotive industries. The net sales for the year 2010 totaled MEUR 161.8. Elektrobit Corporation is listed on NASDAQ OMX Helsinki. www.elektrobit.com

EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY-MARCH 2011

FINANCIAL PERFORMANCE DURING JANUARY-MARCH 2011
(Corresponding figures are for January-March 2010 unless otherwise indicated)

EB's net sales during January-March 2011 declined by 12.1 per cent to EUR 36.5 million (EUR 41.5 million, 1Q 2010). Operating loss was EUR -3.9 million (EUR 1.7 million).

- Cash flow from business operations was EUR 1.4 million (EUR 10.6 million).
- Equity ratio was 63.9% (56.0%).
- Net gearing was -9.7% (-59.5%).

QUARTERLY FIGURES

The distribution of the Group's overall net sales and profit, MEUR:

Non-recurring items are exceptional gains and costs that are not related to normal business operations and occur only seldom. These items include capital gains or losses, significant changes in asset values such as write-downs or reversals of write-downs, significant restructuring costs, or other items that the management considers to be non-recurring. When evaluating a non-recurring item, the euro translation value of the item is considered, and in case of a change in an asset value, it is measured against the total value of the asset.

The distribution of net sales by Business Segments, MEUR:    

The distribution of net sales by market areas, MEUR and %:

Net sales (external) and operating profit development by Business Segments and Other businesses, MEUR:

BUSINESS SEGMENTS' DEVELOPMENT DURING JANUARY-MARCH 2011 AND MARKET OUTLOOK
(Corresponding figures are for January-March 2010 unless otherwise indicated)

EB's reporting is based on two segments which are the Automotive and Wireless Business Segments.

AUTOMOTIVE

The Automotive Business Segment's product offering consists of in-car software products, navigation software for after market devices and development services for the automotive industry with leading car manufacturers, car electronics suppliers and automotive chipset suppliers as customers. By combining its software products and R&D services EB is creating unique, customized solutions for its automotive customers.

During the first quarter of 2011 net sales of the Automotive Business Segment amounted to EUR 23.6 million (EUR 18.5 million, 1Q 2010), representing a strong 27.4% growth year-on-year. The operating profit was EUR 0.6 million (EUR 0.9 million). Solid overall market demand continued for EB's software products, services and solutions based on own automotive grade software products adapted and integrated to the customer specific requirements. EB continued to grow during the first quarter both in the Infotainment and ECU (Electronic Control Unit) software markets.

Automotive Market Outlook

The majority of the innovation and differentiation in the automotive industry is brought about by software and electronics. The share of electronics and software in cars has grown significantly during the past years. It is expected that the use of software in automotives continues to increase. The estimated annual automotive software market long-term growth rate in passenger cars is some 15% (Frost & Sullivan). The underlying world automotive market is also expected to grow steadily with a yearly rate of about 6% between 2010 and 2015 (CSM).

The increasingly sophisticated and networked features and growing performance foster the complexity of automotive electronics. The growing complexity is driving the industry towards gradual separation of software and hardware in electronics solutions. Hence it is necessary for managing the architectural software layer appropriately and to aim for efficiency in innovation and implementation. The use of standard software solutions is expected to increase in the automotive industry. This enables faster innovation, improves quality and development efficiency and reduces complexity related to deployment of software.

The fundamental industry migration and consequent growth of the automotive software market will continue. Cost pressures of the automotive industry are expected to accelerate the need of productized and efficient software solutions EB is offering.

EB's net sales cumulating from the automotive industry are currently primarily driven by the development of software and software platforms for new cars. Hence the dependency of EB's net sales on car production volumes is currently limited, however, the direct dependency is expected to increase as a result of the EB's transition towards software product business models over the forthcoming years.

WIRELESS

The Wireless Business Segment offers development services, customized solutions and radio channel emulator products for industries and authorities utilizing wireless technologies.

Net sales for the Wireless Business Segment during the first quarter of 2011 was EUR 12.7 million (EUR 22.8 million, 1Q 2010), representing a decline of 44.2% year-on-year. Operating loss was EUR -4.6 million (EUR 0.9 million). The decreased net sales in the Wireless Business Segment  was due to the significant lower business volume in the satellite terminal business. The Wireless Business Segment's lower than anticipated operating result was due to slower than expected order book development in the new satellite communication service solutions and due to increased competition in the area of smart phones related R&D services.

Wireless Market Outlook

In the mobile infrastructure market the use of LTE standard, which improves the performance of radio channel and mobile phone networks, is expected to continue to gain strength. EB's business driven by LTE is expected to increase. Mastering of multi-radio technologies and end-to-end system architectures covering both terminals and networks has gained importance in the complex wireless technology industry. Fast implementation of LTE technology and a wide spectrum of bandwidth needed are creating opportunities for EB.

The growth of demand for smart phones and transitions in the related software architectures and platforms are expected to continue during 2011. The R&D services market for smart phones continues to be challenging and the continuing price pressure drives increasing off-shoring in the industry. The overall demand for R&D services for smart phones is expected to decrease in the future due to changes in the market environment. However, OEMs are expected to continue relying on outsourcing in order to maintain their R&D flexibility which can create new business opportunities for EB.

The market for communications, interference and intelligence solutions targeted for public authorities is estimated to remain stable. The systems used by authorities are expected to be based on commercial technology in the future. EB's competence on commercial technologies and mastering the radio channel and software radio solutions are creating opportunities for EB.

The performance of radio channel is going to increase quickly when introducing new LTE-technologies. This will create demand for advanced development tools during the next few years. EB provides world leading channel emulation tools for the development of MIMO based LTE, LTE-Advanced and other advanced radio technologies.

The mobile satellite communication service industry is introducing new data and mobile communication services with new operators being formed and traditional ones upgrading their solutions and offerings. The Satellite Terrestrial and Mobile Satellite Services (MMS) market demand is expected to move from the current reference design phase towards the launch of commercial products and services during the next few years. The filing for reorganization of TerreStar Networks Inc. has delayed and brought uncertainties to the development of demand of the satellite terrestrial "Genus" terminal. Based on the current understanding there is no reason to expect that the business relationship between the parties will continue.

RESEARCH AND DEVELOPMENT

EB continued its investments in R&D in the automotive software products and tools, in radio channel emulation products and in Wireless Solutions' product platforms.

The total R&D investments during the first quarter of 2011 were EUR 6.3 million (EUR 4.7 million, 1Q 2010), equaling 17.3% of the net sales (11.2%, 1Q 2010). EUR 1.6 million of R&D investments were capitalized (EUR 0.7 million, 1Q 2010).

OUTLOOK FOR THE FIRST HALF OF 2011

The demand for software products and services is estimated to grow in the automotive industry and EB's net sales is expected to increase in the Automotive Business Segment. The net sales of EB's Wireless Business Segment is expected to remain in the same level than in the second half of 2010 (EUR 32.2 million, 2H 2010) but the revenue forecast still contains uncertainties in particular with respect to the timing of individual projects.

EB expects for the first half of 2011 that net sales will be lower than in the first half of 2010 (EUR 86.2 million) and operating result will be clearly negative (EUR 1.8 million, 1H 2010). It is expected that the operating result during the second quarter of the year will be better than during the first quarter of the year. The profit outlook for the first half of 2011 is based on the assumption that there will not be further bookings of impairments of EB's accounts receivables from TerreStar Networks Inc. and TerreStar Corporation. It is possible that, based on later information related to reorganizations of TerreStar Networks and TerreStar Corporation, this outlook may need to be reconsidered.

The continuing challenges of TerreStar Networks Inc., a significant customer of EB, in obtaining funding has resulted in payment delays. TerreStar Network and certain affiliates of TerreStar Corporation filed for voluntary petitions for reorganization to strengthen their financial position on October 19, 2010. TerreStar Corporation filed for voluntary petition for reorganization on February 16, 2011. Due to the uncertainties related to the outcome of reorganization processes of TerreStar Networks and TerreStar Corporation, the credit risk may still grow during the first half of 2011. More specific market outlook is presented under the "Business Segments' development during January-March 2011 and market outlook" section, and uncertainties regarding the filings for reorganization of TerreStar Networks and TerreStar Corporation, collecting the receivables, and other uncertainties regarding the outlook under "Risks and Uncertainties" section.

Information on TerreStar Networks' and TerreStar Corporation's reorganizations are presented in the October 20 and 25, November 20, December 30, 2010, and February 17, 2011, stock exchange releases at www.elektrobit.com .

RISKS AND UNCERTAINTIES

EB has identified a number of business, market and finance related risk factors and uncertainties that can affect the level of sales and profits. Those of the greatest significance on a short term are those affecting the utilization and chargeability levels and average hourly prices of R&D services. On the ongoing financial period the global economic uncertainty may affect the demand for EB's services, solutions and products and provide pressure on e.g. volumes and pricing. It may also increase the risk for credit losses.

Challenges in obtaining funding have resulted in payment delays by TerreStar Networks Inc., a significant customer of EB's subsidiary Elektrobit Inc., and increased the risk of credit losses.  While on October 19, 2010, TerreStar Networks and certain other affiliates of TerreStar and on February 16, 2011, the parent company TerreStar Corporation filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code to strengthen their financial position, the credit risk may still grow during the first half of 2011. Chapter 11 establishes a process for reorganizing financially troubled companies. Under such reorganization process, payment by TerreStar Networks of amounts owed to its creditors will require approval by the United States Bankruptcy Court and, if made pursuant to a plan of reorganization, an affirmative vote of TerreStar Networks' creditors. The plan of reorganization filed earlier by TerreStar Networks and its affiliated debtors suggested that payment of EB's receivables may take the form of newly issued common stock in the reorganized debtors. Afterwards the proposed plan was withdrawn and no new plan has been filed. TerreStar Corporation has not yet filed its plan of reorganization.

As previously published on November 20, 2010, EB initiated legal proceedings against TerreStar Networks's parent company TerreStar Corporation to collect its receivables. The claim is partly based on a guarantee issued by TerreStar Corporation for EB's accounts receivables from TerreStar Networks and partly based on TerreStar Corporation's direct contractual obligations towards EB. EB's legal proceedings against TerreStar Corporation have now been frozen under Chapter 11 of the United States Bankruptcy Code.

On April 27, 2011, EB's receivables from TerreStar Networks amounted to approximately USD 25.8 million (EUR 17.6 million as per exchange rate of April 27, 2011). Further, in addition to the amount claimed in the TerreStar Networks' reorganization process, EB has claimed additional costs to be compensated in the amount of approximately USD 2.1 million (EUR 1.4 million as per exchange rate of April 27, 2011) and resulting mainly from the ramp down of the business operations between the parties. Due to uncertainties related to the accounts receivables EB booked an impairment of the accounts receivables in the amount of EUR 8.3 million during the second half of 2010. Based on EB's current understanding there is no reason to believe that there would be further impairment losses on EB's receivables from TerreStar Networks. EB aims to collect the amounts owed to it in full through the reorganization processes of TerreStar Networks and TerreStar Corporation, and/or for example through selling of the earlier mentioned accounts receivables. 

Based on the current understanding it is unlikely that the business relationship between TerreStar Networks and EB will continue. TerreStar Networks has with Court approval determined that it will not comply with its contractual obligations towards EB as provided by EB. The determination will result into the termination of the parties' further obligations under the current contracts between them, but this does not change the EB's current view that there would not be further impairment losses on EB's receivables from TerreStar Networks. At worst, TerreStar Networks' reorganization process and challenges in obtaining funding may, however, result in significant credit losses for EB. Should the accounts receivables not be collected at all, either from TerreStar Networks or TerreStar Corporation, this would additionally lower EB's operating result non-recurringly by approximately EUR 10 million, at maximum (USD-nominated items as per exchange rate of April 27, 2011). However, this would not have any significant negative effect on the EB's cash flow. Further, it is possible that under Chapter 11 reorganization process, debtors may seek to recover payments made prior to their bankruptcy filing. In addition to the above, the risk of potential recovery claims by TerreStar Networks against EB cannot be out ruled at this time.

It is possible that based on later information related to the TerreStar Networks' and TerreStar Corporation's reorganizations, the view may need to be reconsidered.

As the EB's customer base consists mainly of companies operating in the fields of automotive and telecommunications, the company is exposed to market changes in these industries. EB believes that expanding the customer base will reduce dependence on individual companies and that the company will thereby be mainly affected by the general business climate in automotive and telecommunication industries. However, some parts of EB's business are more sensitive to customer dependency than others. Respectively, this may translate as accumulation of risk with respect to outstanding receivables and ultimately with respect to credit losses. The more specific market outlook is presented under the "Business Segments' development during the first quarter 2011 and market outlook" section.

EB's operative business risks are mainly related to following items: uncertainties and short visibility on customers' product program decisions, their make or buy decisions and on the other hand, their decisions to continue, downsize or terminate current product programs, ramping up and down project resources, timing and on the other hand successful utilization of the most important technologies and components, competitive situation and potential delays in the markets, timely closing of customer and supplier contracts with reasonable commercial terms, delays in R&D projects, activations based on customer contracts, obsolescence of inventories and technology risks in product development causing higher than planned R&D costs. In addition there are typical industry warranty and liability risks as well as risks related to management of intellectual property rights involved in selling EB's services, solutions and products. Product delivery business model includes such risks as high dependency on actual product volumes, development of the cost of materials and production yields. The above-mentioned risks may manifest themselves as higher cost of product delivery, and ultimately, as lower profit. Revenues expected to come from new products for existing and new customers include normal timing risks. 

More information on the risks and uncertainties affecting EB can be found on the Company's website at www.elektrobit.com

STATEMENT OF FINANCIAL POSITION AND FINANCING

The figures presented in the statement of financial position of March 31, 2011, are compared with the statement of the financial position of December 31, 2010 (MEUR). The figures for the period under review contain provision of EUR 3.4 million.

Net cash flow from operations during the period under review:

The amount of accounts and other receivables, booked in current receivables, was EUR 52.9 million (EUR 61.3 million on December 31, 2010). Accounts and other payables, booked in interest-free current liabilities, were EUR 31.1 million (EUR 35.7 million on December 31, 2010). The amount of non-depreciated consolidation goodwill at the end of the period under review was EUR 18.5 million (EUR 18.5 million on December 31, 2010).

The amount of gross investments in the period under review was EUR 2.4 million, consisting of replacement investments. Net investments for the reporting period totaled EUR 2.2 million. The total amount of depreciation during the period under review was EUR 2.4 million, including EUR 0.5 million of depreciation owing to business acquisitions.

The amount of interest-bearing debt at the end of the reporting period was EUR 11.5 million. The distribution of net financing expenses on the income statement was as follows:

EB's equity ratio at the end of the period was 63.9% (62.6% at the end of 2010).

EB follows a hedging strategy, the objective of which is to ensure the margins of business operations in changing market circumstances by minimizing the influence of exchange rates. In accordance with the hedging strategy, the agreed customer commitments net cash flow of the currency in question is hedged. The net cash flow is determined on the basis of sales receivables, payables, the order book and the budgeted net currency cash flow. The hedged foreign currency exposure at the end of the review period was equivalent to EUR 14.0 million.

PERSONNEL

EB employed an average of 1,545 people between January and March 2011. At the end of March, EB had 1,549 employees (1,539 at the end of 2010). A significant part of EB's personnel are product development engineers. 

CHANGE IN COMPANY'S MANAGEMENT

EB appointed M.Sc. (Econ) Gregor Zink, Vice President, Finance of EB Automotive Business Segment, as Acting President of the EB Automotive Business Segment effective April 1, 2011. EB announced on December 15, 2010, that the employment of Jarkko Sairanen (M.Sc (Eng), MBA), the President of the Automotive Business Segment ended on March 31, 2011. EB continues to look for a successor for this position.

FLAGGING NOTIFICATIONS

There were no changes in ownership during the period under review that would have caused flagging notifications which are obligations for disclosure in accordance with Chapter 2, section 9 of the Securities Market Act.

EVENTS AFTER THE REVIEW PERIOD

The company has no significant events subsequent to the review period.
RESOLUTIONS MADE BY THE ANNUAL GENERAL MEETING

The Annual General Meeting held on March 31, 2011, decided on the following topics:

BOARD OF DIRECTORS AND AUDITOR

The Annual General Meeting decided that the Board of Directors shall comprise five (5) members. Jorma Halonen, Juha Hulkko, Seppo Laine, Staffan Simberg and Erkki Veikkolainen were elected members of the Board of Directors for a term of office expiring at the end of the next Annual General Meeting.

At its assembly meeting held on March 31, 2011, the Board of Directors elected Mr. Seppo Laine Chairman of the Board. Further, the Board resolved to keep the Audit and Financial Committee with Mr. Staffan Simberg (Chairman of the committee) and Mr. Seppo Laine as committee members.

Ernst & Young Ltd, authorized public accountants, was re-elected auditor of the Company for a term of office ending at the end of the next Annual General Meeting. Ernst & Young Ltd notified that Mr. Jari Karppinen, authorized public accountant, will act as responsible auditor.

AUTHORIZING THE BOARD OF DIRECTORS TO DECIDE ON THE REPURCHASE OF THE COMPANY'S OWN SHARES

The General Meeting authorized the Board of Directors to decide on the repurchase of the Company's own shares as follows. The amount of own shares to be repurchased shall not exceed 12,500,000 shares, which corresponds to approximately 9.66 per cent of all of the shares in the Company. Only the unrestricted equity of the Company can be used to repurchase own shares on the basis of the authorization. Own shares can be repurchased at a price formed in public trading on the date of the repurchase or otherwise at a price formed on the market. The Board of Directors decides how own shares will be repurchased. Own shares can be repurchased using, inter alia, derivatives. Own shares can be repurchased otherwise than in proportion to the shareholdings of the shareholders (directed repurchase). The authorization cancels the authorization given by the General Meeting on March 25, 2010, to decide on the repurchase of the Company's own shares. The authorization is effective until June 30, 2012.

AUTHORIZING THE BOARD OF DIRECTORS TO DECIDE ON THE ISSUANCE OF SHARES AS WELL AS THE ISSUANCE OF SPECIAL RIGHTS ENTITLING TO SHARES

The General meeting authorized the Board of Directors to decide on the issuance of shares and other special rights entitling to shares referred to in chapter 10 section 1 of the Companies Act as follows. The amount of shares to be issued shall not exceed 25,000,000 shares, which corresponds to approximately 19.32 per cent of all of the shares in the Company. The Board of Directors decides on all the conditions of the issuance of shares and of special rights entitling to shares. The authorization concerns both the issuance of new shares as well as the transfer of treasury shares. The issuance of shares and of special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue). The authorization cancels the authorization given by the General Meeting on March 25, 2010, to decide on the issuance of shares as well as the issuance of options and other special rights entitling to shares. The authorization is effective until June 30, 2012.

USE OF THE PROFITS SHOWN ON THE BALANCE SHEET AND PAYMENT OF DIVIDEND

The General Meeting decided in accordance with the proposal of the Board of Directors that no dividend shall be distributed.

Oulu, April 29, 2011

EB, Elektrobit Corporation
The Board of Directors

Further Information:
Jukka Harju
CEO
Tel. +358 40 344 5466

Distribution:
NASDAQ OMX Helsinki
Major media

EB, ELEKTROBIT CORPORATION,
CONDENSED FINANCIAL STATEMENTS AND NOTES JANUARY- MARCH 2011
(unaudited)
The Interim Report has been prepared in accordance with IAS 34 Interim Financial Reporting.

NOTES TO THE FINANCIAL STATEMENT BULLETIN

Accounting principles for the Financial Statement Bulletin:
The same accounting policies and methods of computation are followed in the financial statement bulletin as compared with annual financial statements.

Explanatory comments about the seasonality or cyclicality of reporting period operations:
The Company operates in business areas which are subject to seasonal fluctuations.

Payment of dividend:
The General Meeting held on March 31, 2011 decided in accordance with the proposal of the Board of Directors that no dividend shall be distributed. 

SEGMENT INFORMATION (MEUR)

Material events subsequent to the end of the interim period not reflected in the financial statements for the interim period:
There are no such material events subsequent to the end of the interim report period that have not been reflected in this report.