Interim Report January-March 2002

INTERIM REPORT JANUARY-MARCH 2002 * The result after financial net was a loss of MSEK 4.5. * Equity of MSEK 576, or SEK 5.29 per share, equity ratio 98%. * Investments during the period amounted to MSEK 13, a reduction of 80% on the same period in the previous year, mainly due to the greater maturity of the portfolio companies. * Liquid funds amounted to MSEK 208, or SEK 1.91 per share. * The cost base has been lowered to an annual level of no more than MSEK 25 which is a 50% cut-down compared to 2001. * Sales breakthroughs by several portfolio companies, including Columbitech, which has entered into an OEM agreement with the global leader in mobile data transaction systems, Symbol Technologies Inc., listed on the New York Stock Exchange, positioning Columbitech as the leading company in security for wireless networks - WLAN. * Ledstiernan is building Europe's leading seed and venture capital company with a special focus on Mobile Communication. Ledstiernan is listed on Stockholm Stock Exchange's "O" list. FINANCIAL DEVELOPMENTS Ledstiernan's first quarter result after financial net was a loss of MSEK 4.5. No write-downs were made during the period. Administrative costs have been brought down to the targeted lower annual level of MSEK 25 or below as a result of the cost-adjustment programme that was started in 2001 and which means a 50 % cut-down compared to last year. Accumulated write-downs in the value of the existing portfolio amount to MSEK 134 in total. These are provisions against possible losses and not proven losses. LIQUIDITY AND FINANCIAL POSITION Ledstiernan has a strong financial position with cash in hand of MSEK 208, or SEK 1.91 per share, as of March 31, 2002. Ledstiernan has no loan liabilities. The company's liquid funds are estimated to be adequate to see it through until 2005 without any investments in new companies and without taking into account possible revenue from exits or other capital injections. This is mainly due to the lower level of second-phase investments, which is turn due to the greater maturity of the portfolio, but also to Ledstiernan now having co-investors in 80% of the portfolio companies. PORTFOLIO DEVELOPMENTS INVESTMENTS AND SECOND-PHASE INVESTMENTS At the end of the period Ledstiernan had holdings in 30 portfolio companies, in which it had invested a total amount of MSEK 505, or SEK 4.63 per share. As noted above, the value of the portfolio has been written down by MSEK 134 for reasons of prudence to a book value on March 31, 2002 of MSEK 371, or SEK 3.40 per share. All of the investments totalling MSEK 12.4 made during the period were phase-two or three investments. In connection with the preparation of the quarterly accounts each portfolio company is assessed in order to determine any changes in value in relation to the acquisition value. The portfolio companies are booked at the lower of acquisition value and estimated market value. In the supplementary information, Ledstiernan also lists the portfolio at its acquisition value (equal to invested capital) and at transaction value in the case of companies for which significant third-party financing has been arranged or, if the company in question has a market listing, at the latest price paid as at March 31, 2002. At the end of the period, there were 30 portfolio companies, of which 14 are in mobile communication, which corresponds to 64 per cent of the invested capital. [REMOVED GRAPHICS] Many of the portfolio companies achieved significant commercial advances during the period. Some of the more interesting of them are: Ambio - mobile internet solutions for the property industry - has delivered and commissioned its system for several customers, including Vasakronan, BodenBo, the National Fortifications Administration and Sweden Post. The company has been awarded further orders by Norrporten and the Norrbotten County Council, which means that another Ledstiernan company will move into profit in 2002. CCNOX - one of the leading consulting companies in Sweden in the IT security segment. After one and a half years, the business is profitable with stable, controlled growth. ipUnplugged - jointly with Lucent Technologies, ipUnplugged successfully demonstrated seamless roaming between a CDMA 2000 network and a WLAN network at CTIA Wireless in Florida at the end of March. During the first quarter, ipUnplugged also raised additional financing from Mobile Internet Capital (MIC), the Japanese venture capital company in which NTT DoCoMo is a major shareholder. MIC invested a further MUSD 1.0, over and above the MUSD 1.0 invested in the autumn of 2001. The company has booked its first commercial order from a leading American company. Nordic Circle - After the recent restructuring programme, Nordic Circle now consists of Fyrplus, a subsidiary, and Nordic Spring Management, an associated company in which Nordic Circle's interest is 45%. Nordic Circle reported continued stable and healthy profitability in the first quarter on a fiercely competitive market. North Node - The company has developed products that make possible online home/property management in the Energy, Security and Home Care sectors. The company's newly developed GPRS solution aroused considerable interest when demonstrated by Sony Ericsson at international trade shows. The company has distribution and marketing agreements with leading companies on the market, such as ABB, Ericsson Networks, Momentum, JM, Skanska and Bravida in Sweden, and with Intelli in Norway. North Node has booked follow-up orders from Platzer Bygg, JM and Mimer and its first order from Norway, where it will supply equipment through Sehlmer-Skanska for the rebuilding of Oslo's Rikshospitalet. The board has been strengthened by the appointment of a new chairman, Mats Cederholm, former president and CEO of Diligentia, and currently chairman of the Swedish Property Owners Confederation. Mint - Mint's revenue is on a rising trend, mainly due to the success of Mint Marknad and its P-Mint parking service. The alliance with Stockholm Parkering was strengthened during the period, partly in response to the strong demand for this type of mobile service. Mint Teknik has successfully attracted several large corporate clients, for whom Mint supplies technical content. MGON - one of the leading game-sites with 2.5 million unique visitors each month, has launched its first subscription service on "The Sims Resource", one of its large communities, at the end of January. More than 6,000 subscribers had joined by the end of March, and new ones were signing on at a rate of 80 a day. A joint venture has been started with Lunarstorm, one of Sweden's largest communities. Far-reaching negotiations relating to the "The Sims Resource" and "eSports", the game- server service, are in progress with Telenordia and Telia in Sweden, and SpeakEasy, AT&T and Bell in North America. Negotiations are also in progress with major ISPs via MGON's partner, Telia International Carrier AB. the PhonePages - that develops and sells systems that make it possible to add prictures to an ordinary phone call, known as PhonePages, presented its concept live for the first time during Q1, and is launching a complete phonepage system for mobile operators. Its solution has been developed in co-operation with Siemens and Giesecke & Devrient. In addition, two of the PhonePages most important patent applications have been approved by Patent Co-operation Treaty (PCT, the international patent organisation). Repeatit - has developed a family of products for fixed wireless broadband, R7S III. These products have been delivered and are in operation with Norrtälje Energi, Katrineholms Energi, and Strängnäs Energi, resulting in follow-up orders from these municipal electricity companies, and new orders from Vallentuna Energi, the Municipality of Tierp, and Växjö Energi. The company has also booked its first order from Norway. Repeatit's order from Växjö Energi was won against competition from Cisco. Voice Provider has consolidated its position as number one on the Swedish market for voice technology and control systems. VoiceProvider has confirmed its competitiveness by winning most of the important orders placed on this growing market. New customers during the first quarter included Swebus Express, Säfflebussen, SAS and Dagens Industri. DIVESTMENTS DURING THE FIRST QUARTER Iquity Systems was placed in bankruptcy in March. Ledstiernan's interest was some 2%. The holding had already been fully written off in the books. There were no other divestments during the period. DEVELOPMENTS AND FUTURE PROSPECTS Following the collapse in Ericsson's share price recently and other bearish reports from the telecom market, it is important to emphasise that Ledstiernan's portfolio companies are active in a variety of different underlying sectors, such as property, energy, finance, computer games, and retailing. Ledstiernan's portfolio companies have reached encouraging levels of maturity. Ledstiernan estimates that ten or so of them will move into profit or achieve a balanced cash flow in 2002. In 2001 and 2002, in connection with its second-phase investments and stock issues, Ledstiernan has renegotiated most of its earlier investments to bring them into line with current market conditions. According to Ledstiernan's latest estimates, the market value of its portfolio is still in excess of its book value. More detailed comments on developments and future prospects are provided in the annual report for 2001, which may be downloaded from our website, www.ledstiernan.se. The printed version may be obtained from the company upon request. IMPORTANT EVENTS SINCE THE END OF THE PERIOD Columbitech has entered into a far-reaching commercial OEM agreement initially amounting to MSEK 4.6 with the global leader in mobile data transaction systems, Symbol Technologies Inc. listed on the New York Stock Exchange, positioning Columbitech as the leading company in security for the mobile Internet. Ekonomi24, a portfolio company that publishes an online business journal with its focus on stock market and business news, was sold to Affärsvärlden at the end of April 2002, partly for cash, which will be paid on the completion date, and partly for a share of the new group's turnover during the coming five-year period. Ledstiernan had a 24.6% interest in Ekonomi24. As the book value of the holding had already been written down to zero, the transaction will give rise to a capital gain. The Annual General Meeting held on April 25, 2002 resolved in favour of mandating the Board to increase the share capital on one or more occasions by up to MSEK15 by issuing up to 50,000,000 shares. The mandate also authorised the Board to issue convertible loan stock or loan stock with attached warrants within the same overall limit. The mandate empowers the Board to make decisions to carry out these issues without regard to shareholders' prior rights and/or including conditions for non-cash settlement and/or netting off. The mandate only applies to the issue of Series "B" shares. It will enable Ledstiernan to play an active role in connection with the process of consolidation that has begun in the Nordic venture capital industry. The Board was re-elected in its entirety, except for Kaj-Erik Relander - a partner in Accel Partners and a former CEO of Sonera - who was elected a deputy member at his own request, instead of a full member. It was resolved that a total Board fee of MSEK 1.1 should be paid, which is a reduction of MSEK 0.9 on the previous year. It was resolved that no dividend be paid for 2001. TAX Ledstiernan AB's application for an advance decision regarding its investment trust status was rejected by the Supreme Administrative Court in March 2002. However, the new tax bill proposed by the Corporate Taxation Commission, which is intended to come into legal effect during 2003, will obviate the need for such an advance decision as the proposal will mean that capital gains on sales of unlisted holdings and dividends will in the future be tax free. As of December 31, 2001, Ledstiernan's accumulated loss allowances amounted to some MSEK 260; these loss allowances will be available for utilisation under the new tax regime. EMPLOYEES The number of employees at the end of the period was 11. Stockholm May 7, 2002 LEDSTIERNAN AB (publ) Johan Wachtmeister President and CEO This report has not been examined by the company's auditors. Financial reports Half-yearly report as of June 30, 2002 August 15, 2002 Interim report, as of September 30, 2002 November 12, 2002 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/05/07/20020507BIT00540/wkr0001.doc http://www.waymaker.net/bitonline/2002/05/07/20020507BIT00540/wkr0002.pdf