Interim report, January 1 – September 30, 2005

Pointsec sales increase for fifth consecutive quarter

THIRD QUARTER • Sales for the quarter increased to SEK 61.3 M (53.1). Excluding divested operations, sales increased 21% from SEK 50.6 M. • Sales of Pointsec products increased for the fifth consecutive quarter and amounted to SEK 51.4 M, which was an increase of 37%, compared with the corresponding quarter in the preceding year. • Operating profit amounted to SEK 9.7 M (4.8). REPORT PERIOD FROM JANUARY TO SEPTEMBER • Sales during the period increased by 24% to SEK 192.7 M (155.6). • Operating profit amounted to SEK 31.9 M (17.6). • Profit after net financial items amounted to SEK 34.5 M (20.4). • Profit after tax amounted to SEK 22.1 M (13.6). • Profit per share amounted to SEK 2.00 (1.29). • Changed outlook – sharp increase in profit. CEO Thomas Bill’s comments: “The third quarter was the best-ever, although by a small margin, with respect to sales of Pointsec’s security solution. This was despite a third quarter that is normally a seasonally weak quarter. Sales of Pointsec products amounted to SEK 51.4 M during the quarter, an increase of 37%, compared with the corresponding quarter last year. The composition of sales also showed strength. The increase in sales consisted of a large number of orders. In addition, the spread was favorable from a geographic perspective. We also noted that our efforts in the US market continued to produce returns. This important market accounted for slightly more than 40% of Pointsec sales. Business in Japan also continued to show strong growth. The newly started operations in the Middle East and India are developing surprisingly favorably. In addition, the first orders for Pointsec were received from Brazil and Taiwan via local partners. The European market, on the other hand, showed a somewhat weaker trend than anticipated. However, two important contracts were signed with major European banks during the quarter. Other important contracts signed during the quarter included a couple of orders from US authorities that we regard as important endorsements of quality. Sales continued to develop favorably in the financial sector, where important orders were received in the US and Europe. Against the background of our performance thus far this year, we are adjusting the wording of the outlook for the full year to read that the company will report a ‘sharp’ increase in profits. This may be compared with the previous earnings forecast, which was that ‘the Group’s earnings are expected to improve over the preceding year’.”

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