... M A K E Y O U R N E T W O R K S M A R T E R Interim Report January - June 2003 CEO Ray Mauritsson

... M A K E Y O U R N E T W O R K S M A R T E R Continued restrained market affects sales

Financial Performance  Net sales: SEK 305 M (335) ¬ Currency effects impacted negatively: SEK 40 M  Operating loss: SEK -4 M (18)

Sales by quarter Q2:  Restrained market conditions  Continued growth in Video  Weak development within Print, Scan & Store Mkr Q1 Q2 Q3Q4Q Video Other Q2 2002

EBIT by quarter Q2:  Gross margin: 52.8% (56.6)  Operating margin: -2.8% (4.4)  Profit margin: -0.4% (5.4)

Business development Q2  Continued growth for Video  New agreements in prioritized segments  Additional developer partners; total 145  Aggressive product road map

Sales Q2 Sales by Region 24% 27% 49% Asia Americas EMEA Sales by Product Group 55% Print 38% Scan & Store 4% Access and other 3% Video

A growing Video market  Global market leader  A base of more than 200,000 units installed  Significant growth potential ¬ Growing interest in surveillance and security ¬ Shift from analog to digital solutions ¬ New technical possibilities

Technology evolution CCTV IP DVR Three stages: 1. CCTV: analog 2. DVR: digital capture 3. IP: digital networking

Revised financial targets A growth target of 30 percent in sales and a pre-tax profit margin of percent by 2005 at the latest.

Outlook 2003  Weak IT investments  Unchanged long term growth potential for Video  Goal of positive operating result for the full year 2003