· Net turnover increased to KSEK 6,277 (1,073), an increase of 484 per cent compared with the previous year

· Profit/loss after tax amounted to KSEK -41,856 (-34,539)

· Earnings per share amounted to SEK -1.9 SEK (-3.1)

· The transaction volume increased to KSEK 155,061 (19,202), an increase of 707 per cent compared with the previous year

· The board proposes that no dividend be paid for 2005


· Net turnover increased to KSEK 3,942 (375), an increase of 905 per cent compared with the corresponding period the previous year

· Profit/loss after tax amounted to KSEK -12,508 (-10,095)

· Earnings per share amounted to SEK -0.7 SEK (-0.8)

· The transaction volume increased to KSEK 87,549 (8,420), an increase of 904 per cent compared with the corresponding period the previous year

· Almost a 200 per cent increase in transaction volume in the fourth quarter compared with the third quarter

· An agreement concerning the acquisition of a US sales and support company provides access to previously established significant transaction volumes for start of operations during 2006

· Increased investments within operation, support, risk management and marketing ensure capacity ahead of volume increases in Europe and North America. Work will continue during 2006

· Start of the first stage in cooperation with SJ

· Subscription to new shares via subscription option TO 6 brings the company MSEK 12.4 after costs associated with the share issue


· Steadily increasing transaction volumes during January and February from Europe, North America and extended cooperation with SJ


“With transaction volumes established at a higher level, we are now preparing ourselves for further significant volume increases.”

During 2005, Paynova has taken a crucial step from having mainly run local Swedish activities to becoming an established international player. We were able to see the first clear effects of this at the end of the third quarter when the transaction volumes exhibited a marked upward trend. These trends were reinforced during the fourth quarter, with volumes increasing from approximately MSEK 30 in the third quarter to just over MSEK 87 in the fourth quarter, an increase of almost 200 per cent. This means that during the year our transaction volumes increased more than nine-fold. It is also worth noting that the foreign transactions represent over two thirds of the total volumes.


There are several important factors behind these positive trends. During the year we have increased the activity level of our marketing. Our payment services have been developed further and the launch of a more customised and complete payment solution has made them even better. The response from the market has also improved. During the year we have achieved a high level of activity on several European markets, and in Germany our market position has moved forwards together with others such as STRATO, one of the country’s largest Internet Service Providers. This cooperation is a good example of how we successfully apply our strategy of cooperating with strong, established players to our international expansion. We are in the process of creating equivalent positions in France and North America.

In Sweden too we have linked up with a number of important customers and partners. Our cooperation with SJ, which began in November, is an important milestone that began to yield excellent volumes during the fourth quarter and then expanded and developed further during 2006.

The intensified marketing efforts have certainly increased costs during the quarter but will in future contribute to growing volumes and an improved result.


One market that increased in significance during the year is North America, where we strengthened our presence during the fourth quarter through a series of initiatives. These included an agreement concerning the acquisition of a sales and support company and an agreement concerning locally adapted customer support via a call centre. The acquisition agreement is potentially extremely valuable for Paynova. This agreement creates strong incentives for both parties, as the conditions are linked to the success of both parties in establishing high transaction volumes. The agreement has a threshold and a ceiling, with variable remuneration in the form of option rights in Paynova. Remuneration is regulated in a step model, where no variable remuneration is paid for transaction volumes under approximately MSEK 75 (MUSD 10) and where maximum remuneration is payable for a generated monthly transaction volume exceeding approximately MSEK 300 (MUSD 40). Altogether the agreement gives Paynova the potential for rapidly increasing volumes on the North American market during 2006.


The more than nine-fold volume increase during 2005 has resulted in increased demands on our systems and has also meant higher costs for ensuring operation, support and risk management. Stability and quality in what we deliver are crucial competitive factors and we have therefore invested a great deal in cooperating with our customers and partners in order to lay the foundations for continued volume increases. We have also increased capacity at our call centres, in North America and elsewhere. In parallel with this, we have worked on connecting new customers with significant transaction volumes. Altogether these investments mean a somewhat increased level of costs, but this is necessary to ensure the capacity and quality required for the significantly increased transaction volumes that we can see are possible during 2006. All within the framework of the partnerships and agreements we have already established, primarily in Europe and North America.

On the rapidly growing market for online payments, Paynova’s strong business model gives it highly competitive payment services and its strengthened presence on important markets gives it a good starting point for adding new large transaction volumes during 2006.

Stockholm, 23 February 2006

Lars Ekstedt

MD and Group President

The full Year-end Report is available at

For more information please contact:

Lars Ekstedt, MD and Group President Paynova AB

Mobile: +46 (0)70 374 27 37

Direct: +46 (0)8 517 100 37


(For complete report, see enclosed file)

Paynova offers an international, account-based payment service via the Internet. With Paynova as the only counterpart, e-retailers get a payment guarantee for around twenty payment options in 10 languages with 8 currencies in a security-certified interface (PCI). Consumers can open an account, a Paynova wallet, for free on the Internet to make purchases more secure and simpler, as well as look after transfers between family members, friends and acquaintances.

Paynova has an agreement with around 1,000 e-retailers. Most are found in the following prioritised segments: travel, retailing and media/network games. The company has been listed on NGM Equity since February 2004. For more information:


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