Elcoteq Network Corporation Company presentation

March 2003

Slide 1 Elcoteq in brief

• Largest European EMS provider, #6 globally, #3 in wireless communications

• Focus on communications technology products

• Founded in 1984 by Lohja Corporation

• Listed on the Helsinki Exchanges since 1997

• Net sales MEUR 1,840.2 in 2002

• Operations in 12 countries on three continents

• Approx. 10,200 employees

• Total plant floor space 183,500 m2

Slide 2 CAGR of net sales 58% between 1991 and 2002

MEUR % 3500 250 3000 194% 200 2500 150 2000 132% 100 1500 82% 91% 63% 70% 44% 50 1000 31% 40% -1% 500 0 -16% 0 -50

94 9 1991 1992 1993 1 1995 1996 1997 1998 1999 2000 2001 2002 2003

Net sales, MEUR Estimate Year to year growth, %

Slide 3 Elcoteq’s strategy Focus on communications technology Products – Terminal products, cellular networks, broadband communications networks and wireless local area networks – Wider service offering to meet customer needs and demand • Specific development areas: design & NPI services, sourcing and repair services Customers – Global, medium size and smaller start-up OEM’s Company image and brand – Unique global electronics manufacturing company for communications technology products

Slide 4 Competitive advantages – Elcoteq’s 7 C’s Concentration - Focus on communications technology products Competence - Expertise especially in wireless telecom - Skilled personnel, high technology competence Co-evolution - Superb customer service - Close co-operation and confidentiality Consistency - Consistent plant network, machinery, uniform systems and processes - Transferability of resources on a global basis Cost-efficiency - 100 % of volume capacity in low-cost countries - Sourcing power through focusing Coverage - Global operations network; European origin - Full service range Continuous improvement - Competitive and unique service offering Slide 5 Organization

CEO Lasse Kurkilahti TP* CNE/IE** GROUP FUNCTIONS: EUROPE EUROPE ASIA-PACIFIC AMERICAS Business Control Teo Ottola Harri Ollila Jukka Jäämaa Jouni Hartikainen Douglas Brenner Treasury Tuula Hatakka Corp. Development Vesa Keränen Human Resources Riitta Savonlahti Communication Osmo Kammonen Marketing Johan Westermarck Quality Reijo Itkonen Legal affairs Jukka Hakkila

TERMINAL PRODUCTS Christer Härkönen

Operations Reijo Itkonen D/SCM & IM*** Panu Kaila

COMMUNICATIONS NETWORK EQUIPMENT Hannu Keinänen

* TP= Terminal Products ** CNE/IE= Communications Network Equipment and Industrial Electronics *** D/SCM & IM = Demand and Supply Chain Management and Information Management

Slide 6 GA Europe

Two organizations: • TP Europe • CNE/IE Europe

Key figures Vaasa,

• Net sales in 2002 MEUR 1,286.7 Espoo, Lohja and Salo, Finland St. Petersburg, Russia • 6,200 employees Kista, Sweden Tallinn, Estonia • Plant floor-space 111,400 m² Units • Volume plants in Tallinn, Estonia; Pécs, Hungary and St. Petersburg, Überlingen, Germany Russia Baden, Switzerland Pécs, Hungary • NPI Centers in 5 countries • Elcoteq Design Center

Slide 7 GA Asia-Pacific

Key figures • Net sales in 2002 MEUR 470.6

Tokyo, Japan • 3,400 employees Seoul, Korea • Plant floor-space 53,800 m² Beijing Units

Dongguan • Volume plants in Beijing, Shenzhen Hong Kong Dongguan and Shenzhen, China • NPI Center in Beijing, China • Sales and Technical Support Offices in Hong Kong, China; Tokyo, Japan and Seoul, Korea

Slide 8 GA Americas

Key figures • Net sales in 2002 MEUR 82.9 • Approx. 500 employees • Plant floor-space 18,300 m² Dallas, USA

Units Monterrey, Mexico • Monterrey, Mexico: Volume manufacturing and NPI Center • Dallas, USA: sales office and NPI Center

9 Slide 9 Global coverage

Volume manufacturing Tallinn, Estonia Pécs, Hungary Espoo, Lohja, Salo, Turku & St. Petersburg, Russia Vaasa, Finland Beijing, China St.Petersburg, Russia Dongguan, China Kista, Sweden Shenzhen, China Tallinn, Estonia Überlingen, Germany Monterrey, Mexico Pécs, Hungary Baden, Switzerland Seoul, Korea Desig&NPI Centers (incl. low-volume Beijing, China Dallas, USA manufacturing) Dongguan, China Tokyo, Japan Shenzhen, China Espoo, Lohja, Salo, Monterrey, Mexico Hong Kong, China Turku and Vaasa, Finland St. Petersburg, Russia Tallinn, Estonia Überlingen, Germany Baden, Switzerland Beijing, China Dallas, USA Monterrey, Mexico Other locations Espoo, Finland Kista, Sweden Hong Kong, China Seoul, Korea Tokyo, Japan Slide 10 Dallas, USA Global footprint

Plant Country Founded/ Area Personnel Services acquired (m2) Jan. 2003 Europe Lohja Plants Finland 1991 14,000 623 NPI Center, low to medium volume production Vaasa Finland 1998 3,200 150 NPI Center, low volume production Tallinn Estonia 1992 31,000 1,966 NPI Center, high volume production St.Petersburg Russia 1997 2,500 181 Medium to high volume production Pécs Hungary 1998 46,000 2,608 High volume production, after-sales services Überlingen Germany 2000 5,200 186 NPI Center, low to medium volume production Baden Switzerland 2001 9,500 267 NPI Center, low to medium volume production Europe, total 111,400 5,981 Asia-Pacific Dongguan China 1999 13,000 880 High volume production Beijing China 2000 12,000 899 High volume production, NPI Center Beijing China 2003 20,000 696 High-volume production Shenzhen China 2003 8,800 934 High-volume production Hong Kong China 1999 52 Sales and technical support Asia-Pacific, total 55,300 3,461 Americas Monterrey Mexico 1999 18,300 461 High volume production, NPI Center

Other 296 Total 183,500 10,199

Slide 11 Terminal Products

• 73% of Elcoteq’s net sales in 2002 • Mobile phones and accessories, PDAs, wireless modules, home communication products • Customers e.g. Ascom, Motorola, , , Sony-, 450 Soutec, Swissvoice, Wavecom Net Sales (MEUR) 400 414 423 350 381

300 342 339 321 301 250 285

200

150

100

50

0 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 Q4/2002 Slide 12 Communications Network Equipment • 13% of Elcoteq’s net sales in 2002 • Cellular networks, modules, antennas, broadband switches and routers, optical devices, etc. • Customers e.g. ADC, Allgon, Andrew Corporation, Ericsson, Guangzhou Thinker, LGP, Nokia80 Net Sales, MEUR 68 60 62 60 52 55 47 40 38 35

20

0 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Slide 13 Integrated end-to-end services

PurchasingPurchasing DistributionDistribution NewNew ProductProduct After-After- andand GlobalGlobal andand DesignDesign SourcingSourcing IntroductionIntroduction salessales inboundinbound ManufacturingManufacturing outboundoutbound (NPI)(NPI) servicesservices logisticslogistics logisticslogistics

Pre-manufacturing Core manufacturing Post-manufacturing services services services

Slide 14 Participation in industry arrangements • Sufficient financial resources – Positive cash flow – No net debt – Unused credit limits • Principal owners’ willingness to dilute their ownership through a secondary issue if – good business rationale – promotes EPS growth – promotes better valuation • Principal owners have no plans to sell their shares

Slide 15 Key financial indicators and targets

Indicator Target Achieved in 2002 EPS Continuous growth EUR 0.54

ROCE > 20% 9.2% Cash flow Positive MEUR 77 Gearing <1 -0.1

Slide 16 In a nutshell

• Unique strategy and ambitious goal – Back to growth and better profits • New tight organization model • Aggressive sales efforts Ö new customers • Wider service portfolio • Sufficient financial resources • Active participation in industry arrangements

Slide 17 EMS Industry

Slide 18 EMS growth Broadening continues OEM service divestitures offering continue

Asia’s OEMs growing EMS reduce importance supplier trends lists

Boom in Industry low-cost consolidation locations Polarization

Slide 19 EMS Industry Size (USD billion)

$B

20% 180 06 170 -20 003 160 R 2 AG 139 140 C 116 120 101 98 100 92

80

60

40

20

0 2001 2002 2003 2004 2005 2006

Source: Technology Forecasters, Inc. Dec 2002 Slide 20 EMS revenue growth estimates by industrial segments

Wireless telecom + $39 billion

Wired telecom/networking + $44 billion

Military/Aerospace

Medical 2005 Instrumentation 2000 Industrial

Consumer

Computer systems

Computer peripherals

Automotive

0 10203040506070$ billionSlide 21 Source: Technology Forecasters, Inc. EMS revenues, end 4Q02 (Trailing 12 months, USD million)

1. Flextronics 13,615 2. Solectron 12,261 Tier 1: "Mega-EMS" 3. Sanmina-SCI* 10,168 4. Celestica 8,272

5. Jabil Circuit 3,729

6. Elcoteq Network 1,749 7. Benchmark 1,630 Tier 2: "Niche Players" 8. Plexus 889 9. MSL 854 10. Pemstar 647

Slide 22 Top 10 companies’ share of total EMS market

1997 2001 Top 10 35% Top 10 33% 67%

65%

Total EMS market: $ 50 billion Total EMS market: $ 104 billion Top 10 companies: $ 17.5 billion Top 10 companies: $ 70 billion Others: $ 32.5 billion Others: $ 34 billion

Slide 23 Source: Technology Forecasters, Inc. Communications’ share of net sales Elcoteq Celestica Flextronics

58 % 87 % 44 %

Jabil Circuit Sanmina-SCI Solectron

34 % 53 % 57 %

Latest reported fiscal year

Sources: Lehman Brothers, Elcoteq Slide 24 Capacity by location

Elcoteq Celestica Flextronics

22 % 50 % 83 %

Jabil Circuit Sanmina-SCI Solectron

19 % 48 % 33 %

Low-cost location High-cost location Financial Statements 2002 Second best result ever

Slide 26 2002 net sales and result

2002 2001 Change Net sales, MEUR 1,840.2 1,862.5 -1.2% Operating profit, MEUR 25.5 -18.4 +43.9 MEUR

Profit before taxes, MEUR 18.6 -30.7 +49.3 MEUR EPS, EUR 0.54 -1.08 +1.62 EUR Equity/share, EUR 8.40 7.99 ROCE (trailing 12 months), % 9.2 -3.5 Cash flow after investments, 77 123 MEUR

Slide 27 Key figures in 2002

2002 2001 Capital employed, MEUR 304 323 Interest-bearing net debt, MEUR -33.4 39.4 Gross capital expenditure, MEUR 78 45.1 Gearing -0.1 0.2 Personnel at the end of period 10,176 8,350

Slide 28 Prospects 2003

• Elcoteq’s principal goals in 2003 are to – increase sales – expand customer base – improve internal efficiency – build an even more international base for business • Full-year net sales are estimated to total about three billion euros and result to improve • Compared to Q1/2002, first-quarter net sales are expected to increase by roughly one-third and result to improve

Slide 29 Net sales

MEUR

2500 2 213 2000 1 862 1 840

1500

1000 752 500 395 282 0 1997 1998 1999 2000 2001 2002

Slide 30 Net sales by quarter MEUR 800 690 700 600 591 556 532 494 500 470 456 438 433 428 402 425 400 277 300 203 200 155 118 100 0 I/99 III/99 I/00 III/00 I/01 III/01 I/02 III/02

Slide 31 Net sales in 2002

By Business Area By Geographical Area

57% 73%

26% 13% 12.5% 4.5% 13% Europe

Terminal Products Asia-Pacific

Communications Network Americas Equipment Industrial Electronics Industrial Electronics, Europe

Slide 32 Operating profit by quarter MEUR % 25 7 20.1 20 18.4 18.1 14.7 5 15 13.2 12.7 10 3 3.1 3.3 33 2.9 4.9 2.8 5 3.6 1.2 -3.8 -4.3 -6.5 1 0 0.7 0.9 I/00 II/00 III/00 IV/00 I/01 II/01 III/01 IV/01 I/02 II/02 III/02 IV/02 -5 0.3 -1 -7 Materials write-off -1.6 -10 -11,8 -2.5 -3 -15 -3.8 -20 -5

Operating profit Restructuring costs Operating profit as % of net sales

Slide 33 Profit/loss before taxes by quarter MEUR % 20 5 17.3 14.4 14.5 4 15 12.4 13.1 10.7 10 3 3.1 2.8 2.7 2.4 2 5 2.1 2.9 2.3 -0.7 -13.8 -19.1 -8.1 -1.3 1 0 I/00 II/00 III/00 IV/00 I/01 II/01 III/01 IV/01 I/02 II/02 III/02 IV/02 0 -5 -0.1 0.5 -0.3 -1 -10 -2 -2 -15 -3 -20 -3.2 -4 -4.5 -25 -5

Profit/loss before taxes as % of net sales

Slide 34 Earnings per share

Euro 1,5 1.38

1 0.54 0,5 0.44 0.32 0.21 -1.08 0 1997 1998 1999 2000 2001 2002 -0,5

-1

-1,5 Number of 23 315 500 shares 26 944 809 29 491 652

16 558 377 23 315 500 29 491 373

Slide 35 Capital expenditure and depreciation MEUR % 140 12,0 11.1 125.7 120 10,0 100 7.9 8,0 6.7 78 80 5.7 6,0 60 50.2 44 45.1 48.4 49.2 34.7 4,0 40 4.2 22.2 17.9 2.4 20 2,0 5.9 9.6 0 0,0 1997 1998 1999 2000 2001 2002

Capital expenditure Depreciation Investments as % of net sales

Slide 36 Average working capital days

70 60 60 54 55 50 42 41 40 40 39 35 34 37 30 27 10 21 22 20 20 23 18 10 19 11 9 7 0

9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 I/ I/ I/ / I/ / I/ / I/ / I/ / I/ I/ I/ / I II IV II II IV II II IV I II IV Sold receivables

Slide 37 Cash flow

MEUR

150 123 100 77

50 -40 -167 0 1999 2000 2001 2002 -50

-100

-150

-200

Slide 38 Solvency ratio

% 70

60 9.3 50 7.2 40

30 4.2

20 52.7 43.8 27.5 35.1 39.6 36.6 10

0 1997 1998 1999 2000 2001 2002

Solvency ratio Impact of convertible capital notes on solvency ratio

Slide 39 Gearing

1 0,8 0,6 0.5 0.5 0,4 0.2 0.2 0,2 -0.5 -0.1 0 -0,2 1997 1998 1999 2000 2001 2002 -0,4 -0,6

Slide 40 Equity per share

Euro 10 9.37 8.40 7.99 8

6 4.53 4.81 5.04 4

2

0 1997 1998 1999 2000 2001 2002

Slide 41 Return on capital employed (ROCE) (Trailing 12 months) % 25 20.4 ROCE 20 17.4 17.5 15.7 14.6 15 8.4 9.2 10 7.3 8.2 6.4 6 4.4 5 0.3 0 -3.5

9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 -5 I/ I/ I/ / I/ I/ I/ / I/ I/ I/ / I/ I/ I/ / I II IV I II IV I II IV -5.6 I -3.4II IV -10

Slide 42 Return on equity (Trailing 12 months)

% ROE 16.719.3 20 13.414.5 13.5 15 7.4 5.4 10 4 6.3 3.8 2.5 5 -0.6

0 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 -5 I/ I/ I/ / I/ I/ I/ / I/ I/ I/ / I/ I/ I/ / I II IV I II IV I -7.7II IV I I-10.6I IV -10 -11.7 -15 -14.4

-20

Slide 43 SMD capacity utilization rate % 100 85% 80

60

40

20

0

0 1 2 0 0 0 0 0 0 2 2 2 . . n n a a Jan. J J

Slide 44 Personnel at the end of period

12000

10000

8000

6000

4000

2000

0 1997 1998 1999 2000 2001 2002

Finland Estonia Hungary Mexico China Other

Slide 45 World’s leading EMS provider to communications technology customers

Slide 46