Anoto Group AB: Year-end Report for January-December 2006

• Fourth-quarter sales were SEK 29 million (32). January-December sales totalled SEK 109 million (113).

• The Group’s fourth-quarter gross margin was 62% (73), or SEK 18 million (24). The gross margin for January-December was 72% (70), or SEK 78 million (79).

• Earnings before depreciation and amortisation for the fourth quarter were SEK –30 million(–16). The Content and Applications business unit (Anoto Inc., Oakland in the United States) accounted for SEK –16 million (–6) of the loss. Earnings before depreciation and amortisation for January-December were SEK –104 million (–53). Content and Applications accounted for SEK –51 million (–6) of the January-December loss.

• Earnings after taxes were SEK –40 million (48) for the fourth quarter and SEK –133 million(–14) for January-December.

• Earnings per share totalled SEK –0.31 (0.38) for the fourth quarter and SEK –1.03 (–0.12) for January-December.

• Cash flow amounted to SEK –24 million (140) for the fourth quarter. The Content and Applications business unit accounted for SEK -15 million (-6) of this. For January-December the cash flow amounted to SEK –32 million (170) of which the Content and Applications business unit accounted for SEK -49 million (-6).


Operations

• Anoto´s subsidiary in Japan, Anoto Nippon K.K., obtained two new orders for a total of 9,000 forms pens in the fourth quarter.

• The Forms Solutions application area continued to grow. Active Forms Solutions users totalled approximately 53,000, up 26% from the previous quarter and 137% from a year ago.

• To focus even more on Forms Solutions, a decision was made in December to close down the Content and Applications business unit by closing Anoto's office in Oakland, California. As a result, also the running costs are reduced.

• Anoto transferred its video technology (ASIC) development department to a new subsidiary.


Events after the balance sheet date

• In January 2007 Anoto signed an agreement with a new U.S. pen partner headed up by Jim Marggraff, former CEO of Anoto Inc. in Oakland, California. The agreement covers development and marketing of the next-generation digital pen and paper solution for the consumer market. Anoto is receiving USD 3.5 million, plus royalties based on its sales.

For more information

You are welcome to participate in Anoto's teleconference for financial analysts and the media.

Date: Wednesday, 7 February 2007
Time: 10.00
Phone: +44 207 162 0025
Specify: Anoto

Or phone:
Maria Galvin
Corporate Communications Manager
+46 46 540 10 21

Anoto’s 2005 annual report is available at http://www.anotogroup.com/cldoc/aog-ir-reports.htm

Anoto Group AB (publ), company registration no. 556532-3929
Emdalavägen 18
SE-223 69 Lund, Sweden
Phone: +46 46 540 12 00
www.anoto.com