Gordana Kovačević, Ericsson Nikola Tesla president, addressed the attendants. In 2006 the company operated within the planned track record – operations were stable and showing a tendency toward moderate growth.

 

Business was good despite the strong market competition, demanding customers and pressure on prices, the sales were good both in domestic and export markets.

 

Good business results of the company are founded on strategic agreements important for the positioning of the company and concluded with the longstanding and new customers, also on new responsibilities obtained from the Corporation.

 

The company already is ranking as a strong R&D and expert center in global Ericsson. During 2006 the company repositioned itself toward system integration, with emphasis on e-health, multimedia solutions and new products and services offering, also on becoming an e-systems leader.

 

Good performance was possible owing to the competence, professionalism and efforts of all ETK employees and to their creative and innovative solutions. It is also due to our global references in modern technologies, to business processes management, permanent orientation to quality and cost optimization, to our readiness to accept change and to the world class standards applied in our business operations.

Compared to the preceding year, a moderate business growth in money terms was achieved with an increased products and services sales volume of no less than 20% and accordingly we think the results were very good.

 

The company increased the share of services (in both mobile and fixed telephony) in total sales from 42% to 48%. It means that almost half the sales revenues were achieved with the sale of services.

 

Gordana Kovačević analyzed the business situation in major company’s markets and their individual participation in total sales. She also spoke about the results, good collaboration with both longstanding and new customers, significant contracts concluded for fixed and mobile telephony and for enterprise systems in Croatia, export markets and Ericsson’s internal market.

 

Export to global Ericsson shows a growth trend (up 20 %) compared to the preceding year, resulting from the broadened regional and global ETK responsibilities within the corporation.

Strategic orientation of Ericsson Nikola Tesla in the next three years is: to perceive better and to increase business volume for multimedia solutions, enterprise systems and system integration; to build a strong position in broadband and IP technologies; wider responsibilities in R&D area relating to IP technologies; stronger position in services segment and business excellence in order to improve competitiveness.

 

It is essential in a company with 1386 employees (87% of them university graduates) to maintain the proactive innovative approach and entrepreneurship culture, to develop competence and share knowledge and resources, and to introduce new technologies and business models.

 

The first quarter 2007 results indicate that the current business year should be good. A number of contracts were concluded in domestic market with Vipnet, T-HT, Tele2, also contracts for enterprise systems. In export markets we signed new contracts with T-Mobile Montenegro, JV MDC Velcom in Belarus, the mobile operator Megafon in Russia, and also many valuable contracts with customers in the CIS and in Bosnia and Herzegovina; we performed well also in the internal Ericsson market. The Global Service Delivery Center, GSDC, obtained the project management responsibility for the southern branch of the Europe, Middle East and Africa region; our research and development institute obtained additional responsibilities relating to integration and verification services; the Customer Solutions and Sales Support specialists have been increasingly engaged in projects carried out in Ericsson’s Market Units, says Gordana Kovačević.

Oscar Wallstén, the new Finance Director commented on major figures and highlights in the balance sheet. He also spoke about the assets management, cash and cash flow management, dividend for 2006, ETK ownership structure, share price movement and financial targets.

 

He explained the complex situation in the global telecommunication market and pointed out that every year we should have a larger sales volume to maintain the same financial effect. Despite a demanding market situation the company performed well and this reflects in the interest on the part of investors and in the share price which by the end of 2006 recorded a 30 percent increase.

 

Oscar Wallstén also characterized the company operation in the first quarter 2007 as stable and indicating growth. The increased sales volume in Croatia and in the internal Ericsson market and orders booked in export markets provide a solid foundation on which we may achieve the planned net sales 2007.

With the majority of votes the Assembly made a decision on paying a dividend of 320 HRK per share to all shareholders who on May 24, 2007 had Company shares registered on their securities account in the Central Depository Agency. The payment shall be effected not later than August 29, 2007.

 

The regular dividend of 20 HRK complies with the Company’s dividend policy and the extra amount of 300 HRK shall be a non-recurring payment to shareholders. In view of the outstanding performance over the last couple of years, strong technology and market references, the dividend payment will not influence the Company’s ability to accomplish its business goals.

 

Also, keeping in mind the Company’s performance in the reported period, and to enable the participation in profit, consent was given to the Managing Director to grant to Company’s employees up to 15.000 treasury shares.

 

It was also decided that the net income (profit) of the Company for the financial year 2006 amounting to a total of 233,772,789.73 HRK shall be allocated to a reserve for treasury shares (70,000,000.00 HRK) and to the retained earnings (163,772,789.73 HRK.).

 

DSc Ignac Lovrek, professor at the Faculty of Electrical Engineering and Computing and Darko Marinac, president of the Board of Podravka were re-elected as the members of the Supervisory Board. KPMG Croatia d.o.o za reviziju, Zagreb was re-appointed as the independent auditor of the Company for 2007.

 

Company Communication of Ericsson Nikola Tesla