INTERIM REPORT JANUARY 1 TO SEPTEMBER 30, 2004

INTERIM REPORT JANUARY 1 TO SEPTEMBER 30, 2004 Strong growth for Pointsec - sharpened business focus THIRD QUARTER · Sales amounted to SEK 53.1 M (34.3) · Revenues from Pointsec operations amounted to SEK 37.7 M (16.7), corresponding to 71% (49%) of total revenues. · Gross profit amounted to SEK 42.2 M (23.3), resulting in a gross margin of 80% (68%). · Profit after net financial items amounted to SEK 5.2 M (loss: 6.7). REPORT PERIOD FROM JANUARY TO SEPTEMBER · Sales increased by 28% to SEK 155.6 M (121.8). · Revenues from Pointsec operations increased by 71% to SEK 106.0 M (61.9). · Gross profit amounted to SEK 126.2 M (87.6), resulting in a gross margin of 81% (72%). · Profit after net financial items amounted to SEK 19.7 M (loss: 9.8). · Profit after tax amounted to SEK 12.9 M (loss: 9.8). · Profit per share amounted to SEK 1.22 (loss: 0.93). CEO THOMAS BILL'S COMMENTS: - In terms of sales, the quarter was the second best in Pointsec's history. This was very gratifying, particularly since we see continued strong demand for our solutions. Demand is increasing steadily in the Japanese market where the quarter ended with a delivery to one of our Japanese resellers valued at SEK 5.7 M. After the closing of the quarter, an additional order was received from Japan. Protect Data will now increase Pointsec sales work. This will take place on several fronts. New sales representatives will be employed in Europe, Asia and the US, and development capacity in the areas of smartphones and handheld computers will be increased. - During the quarter, Protect Data initiated a strategically important partnership with the security company Entrust Technologies. This partnership will mean that Entrust will build in Pointsec technology in its Entrust Entelligence product family. - Sales in the Solutions business area have been dominated in recent years by digital identities and Pointsec. During the third quarter, this trend was even clearer, with 85% or sales deriving from these two product areas. After the closing of the quarter, a decision was taken to concentrate the Group's resources to these two profitable product areas. A contract is intended to be signed to transfer the network security and antivirus products areas to an external buyer as of November 1. - The divestment within Solutions will results in somewhat lower sales during the fourth quarter, with a negligable effect on profit, as a consequence. On the other hand, termination costs of SEK 4 to 5 M and a write down of goodwill by at most SEK 3 M will be charged against earnings during the fourth quarter. The strong demand for Pointsec in particular nonetheless allows us to retain our assessment that the Group's earnings for the full year will be significantly better than in 2003. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2004/10/28/20041027BIT21980/wkr0001.pdf The full report

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