Year-end Report January – December 2004

- Total group sales were down to SEK 147 million (192), fourth quarter sales dropped to SEK 29 million (41). Sales in Business Unit Anoto increased to SEK 95 million (73), of which SEK 22 million (25) is attributable to the fourth quarter. - The Group’s gross profit increased and amounted to SEK 90 million (45), of which SEK 19 million (15) in the fourth quarter. The gross margin has been calculated in compliance with a new accounting principle (see note 2). - For the first time in its history, the Group in the fourth quarter achieved a positive operating income of SEK 1 million (- 22) before depreciation and amortisation. - Income after taxes was SEK -107 million (- 310), of which SEK - 13 million (- 39) is attributable to the fourth quarter. - Earnings per share amounted to SEK - 0,90 (- 2,81), of which SEK - 0,11 (- 0,34) in the fourth quarter. - Total cash flow for the period was SEK - 74 million (-190), of which SEK -17 million (- 37) in the fourth quarter, exclusive of new share issues 2003. Operations Q4, 2004: - HP announced contracts signed with two important customers, APHP who are using HP FAS in a two-year clinical research study and Eurocopter who are deploying the solution for manufacturing and quality assurance. Both represent important customer references and significant business opportunities in their respective business segments. - Anoto partner Dai Nippon Printing introduced a forms solution at the Japanese transportation company Nippon Express. The initial application is being utilised in the company’s removals trade, comprising about one thousand users. The installation is of major strategic value to Anoto as well as to Dai Nippon Printing having developed the application, and to Maxell having delivered the digital pens. Significant events after the report period: - Subsequent to the end of the reporting period, Anoto partner LeapFrog announced its FLY Pentop computer product based on Anoto Technology. FLY Pentop Computer targets children and teenagers, making learning how to read, write, count and learn fun. Sales will start in the United States autumn 2005. Anoto Group (publ) corporate identification no. 556532-3929 Scheelevägen 19 C SE-223 70 Lund, Sweden Telephone: +46 46 540 12 00 www.anotogroup.com