The annual press conference of Ericsson Nikola Tesla (ETK) was held on March 9, 2006. There the performance of the company in 2005 and the outlook for 2006 were presented. The conference was attended by a number of journalists from printed media, radio and TV and also by a number of investors.

The conference was opened and conducted by Snježana Bahtijari, Communication Director.
Gordana Kovačević, the president of Ericsson Nikola Tesla presented the business results in 2005 and rated the year favorably as the year of success for the company.

Gordana Kovačević maintained that in the business year 2005 the company performed well. It was the year of business growth, of created new and strengthened old partnerships, of stronger regional and global positioning within Ericsson with subsequent demand for employment of young specialists, the year of permanent adjustment to market situation and of continued orientation to business and operational excellence. 

The operations of Ericsson Nikola Tesla are founded on high-quality performance and commitment of all employees, on their professionalism and competence. 

Last year was characterized by strong market competition, especially from the Far East, by demanding customers, pressure upon margins, but also by new business opportunities.

The president then spoke about the situation in major markets. In total sales of Ericsson Nikola Tesla in 2005 the domestic market participated with 29%, the export market with 71%. In total export, the internal Ericsson market accounts for 18% of sales, whereas export to other countries accounts for 53%. Major single markets last year were Croatia, Sweden, Belarus, Bosnia and Herzegovina, Kazakhstan, Russia and Montenegro.

In 2005 the ETK sales in Croatia went up 25% compared to the preceding year. When speaking of ETK export markets beside the internal Ericsson market, the total sales in 2005 amounted to 852 million HRK. In the Commonwealth of Independent States (former Soviet Union) the company performed outstandingly again with emphasis on Belarus and Kazakhstan.  In Russia, however, the sales went down because our large customer, Svyazinvest, reduced its investments into the fixed network, compared to 2004. Sales growth was also recorded in Bosnia and Herzegovina and Montenegro.

Based on excellent results over a couple of years Ericsson Nikola Tesla obtained broader responsibilities on Ericsson's internal market in the research and development area and also in the Global Service Delivery Center. Consequently there was an increased demand for new employment. In 2005 the company employed 230 new associates, a rise of 17% compared with the preceding year. The export to Ericsson's internal market went up 31% compared to preceding year and it amounts to 297 million HRK. 

Maria Radtke, Finance Director reported on the financial aspect of ETK operations.  In 2005 the company completely fulfilled its plans and even exceeded some of them so that the year 2005 was again a record year in terms of sales and profit.

In 2005 Ericsson Nikola Tesla achieved the following results: net sales up 4,7%, orders booked on the record 2004 level, gross margin of 20%, operating margin of 14,5%, profit before taxes up 9%, net profit up 8% and positive cash flow from operating activities that rose by 47 million HRK compared to the preceding year.

Such performance is based a great deal on perseverance and consistent work with customers. Much attention is still paid to cost optimization and accordingly the sales, administrative and general expenses decreased from 7,4% to 7,0% of sales revenues.

In risk management, based on a thorough analysis we defined adequate reservations for long-lasting, high-risk receivables that should cover all risks.

Gordana Kovačević emphasized that in 2006 Ericsson Nikola Tesla will strengthen its strategic positioning in all markets, with emphasis on the Croatian market where the company will improve its relations with present customers and build relations with the new ones by offering the latest ICT solutions and technologies.  It will also continue its orientation to export growth on internal Ericsson market and in the markets of Central and Eastern Europe, Central Asia and Africa. ETK will actively pursue and use all business opportunities, even those that exceed the core business but can be fulfilled with the existing competence and resources. Ericsson Nikola Tesla will continue to operate as a strong research and development center with global responsibilities in the Ericsson Group and secure increased sales of services, in addition to the activities of the Global Service Delivery Center. Another objective of the company is to further build and improve its position as the leading competence center for total communication solutions. For Ericsson Nikola Tesla it is also of importance to retain its standing as the best employer and socially responsible entrepreneur.

The president of the company said that the year 2006 was on national level declared as the year of Nikola Tesla to mark the 150th anniversary of the birth of this scientific genius. The company is intensively involved in this national project and has independently started a series of activities as well.

At the press conference it was stated that the Supervisory Board of Ericsson Nikola Tesla supported the proposal by the Managing Director to the Stockholders Assembly to adopt the payment of dividend of 19 HRK per share. 

The members of the management team of Ericsson Nikola Tesla answered questions from journalists.

Company communication Ericsson Nikola Tesla