Efore Annual General Meeting March 30, 2016

Review by the CEO Heikki Viika

EFORE overview

EFORE – The trusted power partner

Efore Plc is an international group specialised in design, development and production of demanding power products.

Efore designs and manufactures cutting edge power conversion products; that offer superior energy efficiency, reliability, more intelligent designs, flexibility and creativity for the telecommunications including networks and broadcasting, industrial, medical, LED lighting and transportation markets.

Efore competences and know-how are embodied in the solutions we provide to our customers: high efficiency and high reliability.

• Net Sales 89,9M € (2015) • 737 employees (end 2015) • Established in 1975 • 2700 shareholders (end 2015) • Quoted on Nasdaq Helsinki

Key facts

Major shareholders * % of shares

1 Sievi Capital Oyj 21,8

2 Evli Pankki Oyj 9,4

3 Efore Oyj 6,3

4 Danske Bank Plc (Nom. reg.) 5,0

5 Jussi Invest Oy 3,4

6 Nordea Bank Finland Plc (Nom. reg.) 3,3

7 Tammivuori Leena 3,1

8 Rausanne Oy 2,9

9 Ilmarinen 2,8

10 Ulkomarkkinat Oy 2,0

* Status Feb. 29, 2016

Efore worldwide

Efore Plc is headquartered in Espoo, Finland, with major offices in Italy, China and Sweden, production units in China and Tunisia, and Sales and Marketing organizations in Europe, North America and Asia.

Technology and Development

Production

Headquarters

Sales office

Espoo, Finland Stockholm,

Sweden

Castelfidardo, Italy

Tunis, Tunisia

Stroudsburg, USA

Hong Kong, China

Tampere, Finland

Suzhou, China

Industry leading customers globally recognize EFORE Group as a reliable and trusted partner for their power supply applications.

We’re proud of our worldwide customers

DEFENCE INDUSTRIAL DC SYSTEM

DIGITAL POWER TELECOM

LIGHTING

MEDICAL HOUSEHOLD APPLIANCES

Awarded supplier

SUPPLIER OF THE YEAR ABB Substation Automation Products

SUPPLIER OF THE YEAR Ericsson

BEST IN CLASS SUPPLIER National Instruments

2013 2014 2015

SUPPLIER OF THE YEAR &

BEST IN CLASS SUPPLIER National Instruments

Financial statements 2015

Financial development in 2015 did not meet the expectations

Key indicators, EUR million FY/2015 FY/2014

Net sales 89,9 85,3

- Telecommunication sector 44,8 46,0

- Industrial sector 45,1 39,3

Results from operating activities without one-time items -1,6 0,1

Results from operating activities -2,0 -2,0

Results before taxes -3,3 -3,1

Net result -3,4 -2,6

Return on equity (ROE), % -16,8 -11,8

Return on investment (ROI), % -9,2 -6,7

Earnings per share, EUR -0,07 -0,05

Solvency ratio, % 34,2 38,1

Gearing, % 24,5 9,0

Cash flow from business operations 1,8 3,8

Share price on Dec. 31, 2015 0,77 0,81

Market capitalization on Dec. 31, 2015 40,2 42,3

Personnel, average 887 914

53,9 % 46,1 %

49,8 % 50,2 %

Telecommunication Industrial

2015

FY 2015 (2014) Net sales by sector

41,6 %

27,2 %

15,1 %

16,1 %

49,0 %

26,0 %

14,0 %

11,0 %

EMEA APAC Americas Finland

FY2015 (2014) Net sales by region*

2015

Despite the poor financial performance a good progress was made in several areas

• Net sales increased 5.4% year-on-year despite the decline of the telecommunication sector.

• The Industrial sector growth trend continued throughout the whole year.

• The new strategy focusing on being The Trusted Power Partner was published.

• The partner network was strengthened with several new sales representative firms and distributors in the U.S.A and in Europe.

• The company structure was streamlined and the organization was flattened to support more efficiently the Group’s strategic and financial targets.

• A great number of R&D investments were made in the development of future products

Net sales and operating profit

88,1

78,1 74,5

85,3 89,9

-5

10

25

40

55

70

85

2011 2012 2013 2014 2015

Net Sales Results from operating activities

4,1 -2,6 -4,5 -2,0 -2,0

MEUR

*

Net Sales and EBIT in 2015

10,4 11,6 10,9 12,1

13,1

12,1 12,0 7,7

0,7

0 0

-2,3 -2,5

-2

-1,5

-1

-0,5

0

0,5

1

0

5

10

15

20

25

Q1/2015 Q2/2015 Q3/2015 Q4/2015

Telecom

Industrial

EBIT

MEUR MEUR

Solvency ratio

48,3 47,7

39,7

38,1 34,2

0

10

20

30

40

50

2011 2012 2013 2014 2015

%

Balance sheet: assets

6,3 7,8

15,4 16,6

14,9 14,5

19,0 17,7

0

10

20

30

40

50

60

Dec. 31, 2015 Dec. 31, 2014

Non current assets

Inventories

Trade & other receivables

Cash and cashequivalents

MEUR

Balance sheet: equity and liabilities

32,8 30,1

3,8 4,9

19,0

21,5

0

10

20

30

40

50

60

Dec.31, 2015 Dec. 31, 2014

Equity

Non-current liabilities

Current liabilities

m€

Personnel by geographical area

694 714 568 616

415

213 90 358

352

315

9 8

7

0

200

400

600

800

1000

1200

2011 2012 2013 2014 2015

America

EMEA

APAC

Status on Dec. 31, 2015

Strategic plan 2015 - 2018

Efore strategy in a nutshell

Eval

uat

ion

TECHNOLOGY TRENDS

MARKET INTELLIGENCE

PRODUCT ROADMAP

GO-TO- MARKET

STRATEGY

Alig

nm

ent

CUSTOMER FOOTPRINT

MARKET NEEDS

EFORE STRUCTURE

COMPETENCY ALIGNMENT

Solution driven – we focus to fulfil our customers’ needs at high pace (TTM)

Cost efficiency – we provide our products and services cost efficiently (TCO)

Customer intimacy – we are approachable at all levels, from individual to individual

Reliability – our product lasts longer and our delivery is on time

Merchant power supply market

Source: Global Switching Power Supply Industry, Market Analysis, Micro-Tech Consultants

19942 20239 20467 20711

0

5000

10000

15000

20000

25000

2016 2017 2018 2019

Military and aerospace

Transportation

Medical

Industrial andInstrumentation

Networking/telecom/equipment

Computer/office/equipment

Consumer/retail/equipment

LED Lighting

m$

19943 20239 20467 20712

0

5000

10000

15000

20000

25000

2016 2017 2018 2019

Modified &CustomizedStandard

Standard

m$

20

Competitive landscape - Current strengths/weaknesses Efore vs. competitors

• Our competitors have the following main advantages due to their larger size

– Well recognized brand

– Larger standard product offering,

– Geographic proximity with the customer base (office locations and bigger sales force)

– Scale of new product development

– Economy of scale due to very large volume

BUT

• Same customers are concerned about their dimension especially when the power spend is not big enough to receive the highest level of attention, flexibility and service

• We know how to reach the highest level on Intimacy with our Tier 1 customers

• In 2013, 2014 and 2015 we have been awarded as ”Supplier of the year” from ABB, Ericsson and National Instrument and the selection provided the following motivation:

– Superior quality,

– Lower than average cost of doing business (TCO)

– On time delivery

– Technology Added Value for their final products to guarantee our customer’ customers satisfaction

• Long term business with our customers is a clear representation of the HIGH RETURN OF INTIMACY (RofI)

Competitors EFORE

Our customers trust Efore

Standard & custom strategy

EFORE is a power supply design and manufacturing company that is serving both custom and standard

markets.

Working with both business models EFORE will:

1. Use the standard platform as a starting point for customization

2. Mitigate the payback risk of R&D investments by developing new features for custom products

Custom specifications Non-recurring cost

contribution Specific custom volume

Tier1 Competitor Direct

Single market destination

CUSTOM Benchmark market

performances Own development costs Broader customer base

Wide competition Distribution

Multiple market destination

STANDARD

Customization/ Standardization

Strategic plan 2015 – 2018

Main actions in 2015

• Contracts signed with four sales agency chains to strengthen sales force in USA

• New dual dimming LED driver series CIELO launched

• Quick S.p.A. selected Efore Plc's Italian subsidiary to jointly develop a LED luminaire for marine and industry applications

• National Instruments awarded Efore’s Italian subsidiary again

– This was the fourth time ROAL was awarded by National Instruments after after

Strategic plan 2015 – 2018

Main actions in 2015 • Efore invested in several R&D projects, a major

new product line has been launched at end of the year for a telecom customer, and development nearing completion for products intended for small cell market, launching mid 2016.

• Efore designed a next generation of AC/DC power supply product for industrial markets. This new technology features Efore’s proprietary full digital control and communications.

• Besides the power conversion technology - also new manufacturing techniques were explored and evaluated to reduce product cost and further improve power supply capabilities.

• Efore is involved in several research projects related to all these fields of activities.

• Efore designed new dual dimming LED driver series CIELO ideal for track, downlights and other architectural lighting applications.

Strategic plan 2015 – 2018

Main actions in 2015

• New corporate brand “The Trusted Power Partner” released

• Product naming structure updated

• Corporate naming harmonised, Roal entities joined the Efore family also with the company names

Strategic plan 2015 – 2018

Main actions in 2015

• Savings programme conducted in Italy

• Cost improvement programme initiated in China and Finland

• Manufacturing process in Suzhou has been reorganized in to improve factory throughput time

• Cost structure of certain products has been improved

• New flatter organization structure implemented to reduce duplications

Changes in ownership, Suzhou plant

As an important step of creating a cost

efficient manufacturing platform Efore is

evaluating a possibility to sell out its

Suzhou factory to an external company.

A The plan is that manufacturing will continue as

such but owned and managed by the chosen

company. This company will act as Efore’s

trusted supplier for products manufactured in

Suzhou plant.

B

Efore will have an office in Suzhou taking care of R&D

activities, NPI activities as well as of the daily supply/

manufacturing activities. Efore will remain as the

supplier to its customers.

C The new owner shall have a strategy to

further develop the production site to be

a modern , competitive and high quality

production plant.

D

With this action Efore can release needed capital

to invest in its core capabilities. E Efore will invest in capabilities to further improve its competitiveness and time to

market in product development

Background to strategic action

Taking this action will allow us to take a leap forward

Ability to invest in Efore Core Competencies and to improve the time to market

• Global Product management

• Global Sales

• Technology

• Product Development

• Production Engineering team in Suzhou

• NPI

• Dedicated team in Suzhou supporting EMS

• Tunisia NPI factory

Securing Cost Competiveness also in the long run

• Utilization rate of production line

• Modernization of manufacturing technology

• Yield/Quality

• Concern of China cost level

• Maintain cost leverage

• EMS 2nd Sourcing to maintain cost pressure

• Component Supplier leverage through EMS partner volume

Securing our ability to supply reliably

• Capability to meet the demand

• Manage EMS locally in China

• Quality resouces near supplier

• Flexibility and Agreements

• Inhouse mfg

• Second Source

• Contractual agreements with main suppliers

• Recovery Management

Strategic plan 2015 – 2018

Main actions in 2015

• Organization was renewed to correspond to the business structure

• The head of both HR and Quality functions were included in the Executive Management Team

• Strategic actions are being cascaded throughout the organisation as personal targets

• Senior level succession planning for first two levels has been implemented

Conclusions

An updated vision for the company: The trusted power partner

• Four strategic cornerstones encapsulate the strategy

• Growth is aimed through

– Securing current large accounts at current high level or increasing the volumes

– Capturing selected new major accounts through planned approach

– Opening new sales channels including Internet

– Bringing new technologies to the market

• Improvements in profitability to reach 10% EBIT by end of

planning period are aimed through optimising overhead costs,

efficiency improvements in manufacturing and product

development, and ensuring a competitive materials cost base

• We are aiming at energising the company through

management commitment to leadership, empowering our

employees and ensuring we have the right competencies and

rewards system for the future

• Detailed information on annual accounts can be found in Annual Report 2015

- Group level from page 19

- Parent company from page 53

- Auditor’s report from page 73

Financial estimate for 2016

• The Company estimates its net sales of financial year 2016 to be higher than 2015, and the results from operating activities without one-time items to be positive.

• The estimate of the development of Efore's net sales and results from operating activities is based on current business structure as well as partly on forecasts and delivery plans received from the customers.

Thank you for your attention

HEIKKI VIIKA