Year-end report January – December 2003

The Nordic market remained weak, while growth accelerated in the US during the fourth quarter.

·The group’s operating revenue amounted to SEK 1,544.1 million (1,699.0). Exchange rate effects from the translation to Swedish kronor affected revenue negatively by SEK 115.4 million compared with the previous year. Organic growth in local currency was -4 percent. Organic growth has gradually improved and during the fourth quarter was –1 percent.

·Operating profit before goodwill amortization and items affecting comparability amounted to SEK 223.6 million (310.6). Exchange rate effects affected profit negatively by SEK 23.4 million compared with the previous year. The operating margin was 14.5 percent (18.3). The operating margin during the fourth quarter was 14.3 percent (17.9).

·Profit per share after dilution, excluding goodwill amortization and items affecting comparability, amounted to SEK 2.12 (2.89). The net loss for the year was SEK -26.6 million (26.2).

·Cash flow remains strong. Operating cash flow amounted to SEK 254.2 million (324.5).

·The Board of Directors proposes a dividend of SEK 0.45 (0.45) per share.

·In December MediaMap of the US was acquired. The company, with an annual turnover of approximately USD 13 million, offers communications management databases and IT applications for PR agencies and corporate communications departments. Two million shares were issued in connection with the acquisition.

Comment by Observer CEO Robert Lundberg
“The market remained weak in 2003. Not until the second half of the year did we see a turn-around in North America. With 8% growth in the US in the fourth quarter, we are well on the way to achieving our growth objective at the same time that we are improving profitability. We are also seeing positive signs in the British market, where disruptions in production due to the changeover to digital media monitoring are gradually subsiding.

“Our new do-it-yourself distribution services for information in the Nordic region have been well received. However, the Nordic market is still distinguished by low activity and restraint among customers, which may lead to a delay in the recovery compared with our other markets.”