Anoto Group, January – September 2007 Interim Report

• Third quarter sales rose by 52% to SEK 38 million (25). January-September
sales totalled SEK 124 million (79).

• The group's gross margin for the third quarter was 83% (70), while the gross
profit was up by 81% to SEK 31 million (17). The gross margin for January-
September was 76% (76), while the gross profit was SEK 94 million (60).

• Earnings before depreciation and amortisation for the third quarter were SEK 1
million (–28) and SEK 6 million (–75) for January-September.

• Earnings after taxes were SEK –1 million (–33) for the third quarter and SEK –5
million (–93) for January-September.

• Earnings per share totalled SEK –0.01 (–0.26) for the third quarter and SEK –
0.04 (–0.73) for January-September.

• Cash flow amounted to SEK –8 million (–42) for the third quarter and SEK –20
million (–7) for January-September.

Operations
• Active forms users numbered approximately 92,000, up 38% from the previous
quarter and 119% from a year ago.

• The large increase in forms users stemmed primarily from two orders by Order-
Made Souyaku in Japan totalling 20,000 user licences. New orders were also
announced in both the United States and Europe during the quarter.

• LeapFrog, one of Anoto's partners, launched its Fly Fusion Pentop Computer
during the quarter.

A word from CEO Anders Norling
Sales and earnings continue to improve
We experienced a substantial improvement again in the third quarter. Sales increased by 52% and
gross profit by 81% from the third quarter of 2006.
The combination of sharply higher sales and successful cost control efforts boosted earnings from SEK –33 million in the third quarter of 2006 to SEK –1 million in the third quarter of 2007. While we still reported a loss of SEK –5 million for January-September, earnings before depreciation and amortisation were SEK 6 million. I am pleased to note that Anoto is approaching a time when our finances will be in balance and we can focus on more rapid growth.

Record quarter for Forms Solutions
The number of new Forms Solutions users rose by 25,000, or 38%, in the third quarter. A large
percentage of the quarter's growth was attributable to two orders totalling 20,000 user licences by Order-Made Souyaku, a Japanese partner. Most of our other sales came from Europe and the United
States. We also announced new orders during the quarter that will contribute to sales going forward. For instance, the City of Stockholm decided to use our digital pens to simplify the collection of elderly care data, while Adapx – a U.S. partner – launched a solution for the collection of field data.

During the first nine months this year, we have put our new strategy for Forms Solutions in place. Anoto will take greater responsibility for packaging our products. As a result, we established a new organisation in September 2007 to focus on Forms Solutions.Our effort to develop a supplementary, more flexible technology platform, as well as new products, in cooperation with new and existing partners is proceeding according to plan. The emphasis on Forms Solutions in a limited number of application areas (verticals) is starting to bear fruit. We expect that sales will begin increasing in 2008 as a result and that we will attract new partners in verticals for which Anoto technology offers clear advantages.

Interactive Media launches
Our cooperation with LeapFrog (www.leapfrog.com) is proceeding well. LeapFrog has begun marketing
its new Fly Fusion Pentop Computer, and sales went according to plan in the third quarter. Given that a major advertising campaign started after the end of the quarter to boost Christmas sales, we are hoping for continued good progress in the fourth quarter.

For more information
You are welcome to take part in Anoto’s upcoming teleconference for media and financial analysts at 10.00 CET on Wednesday, 7 November.

Date:
Wednesday, 7 November 2007

Time:
10.00 CET

Phone:
+44 (0) 207 162 0125

Specify: Anoto

Or phone:
Mats Blom
CFO
+46 46 540 12 48

The 2006 annual report is available at www.anoto.com. Although the report will not be printed, a printout of the digital version may be ordered from the company.