INTERIM REPORT OBDUCAT AB (PUBL.) JANUARY - SEPTEMBER 2010

(NGM:OBDU B)

Third quarter

* Third quarter sales were SEK 6.9 M (13.7)

* Third quarter profits after taxes were SEK -15.3 M (-12.1) and earnings per share per before dilution were SEK –1.89 (–2.75)

* Gross margin stood at 55% (49%)

* Cash flow before financing activities was SEK -9.3 M (-20.9)

* Order intake in Q3 was SEK 12.3 M (14.1)

January - September

* Sales for the period was SEK 29.5 M (43.9)

* Profits for the period after taxes was SEK -46,9 M(-34.5) and earnings per share before dilution were SEK -6.23 (–7.62)

* Gross margin stood at 52% (48%)

* Cash flow before financing activities for the period was SEK -41.9 M (-57.7)

* Order intake was SEK 29.7 M (28.1). At the close of the period the order stock amounted to SEK 14.7 M (43.9)

(All amounts below in SEK 000 unless otherwise stated)

Sales/Market – third quarter

The order intake in the third quarter was SEK 12.3 M (14.1), resulting at the close of the period in a total order stock of SEK 14.7 M (43.9).

The LED industry remains sluggish as far as investments in lithography capacity are concerned, mainly owing to the need for expanded development efforts in the final product development phase at the customers. Much of the development is either associated with the customer not previously having used lithography in the production process or that the customer finds the opportunity to change lithography method in connection with exchanging the substrate size for a larger one. Other reasons impacting the speed of the capacity expansion is the lack of substrates and other expendable items used in the manufacture of LED chips. The lack of substrates has caused the cost of them to treble during the current year. It is however expected that these capacity problems will gradually be solved during the second half of 2010 and that the price will be normalised in the beginning of next year.

During the quarter Obducat received a conditional order for a semi-automatic Sindre system. The customer will jointly with end customers evaluate their LED components with, if successful, the intention of confirming the order towards the end of the first quarter of 2011.Since the order is conditional, Obducat has chosen to include it neither in the order intake for the quarter, nor in the order stock. The conditional order is valued at approx. SEK 8 million.

Obducat continues to be involved in several LED market related customer projects. Customers’ businesses vary from supplying other companies with patterned substrates to securing their own supply of components for proprietary consumer products.

As for sales of R&D systems, investments are made primarily in Asia and Obducat has during the quarter received orders for R&D systems in China. The European market is experiencing a significantly lower rate of investments since Government budgets have been considerably reduced as a consequence of national financial issues. The US presents a similar situation as in Europe.

Furthermore, Obducat has during the quarter received an order from a US based company that previously used Obducat equipment at a university in the US. The component, which is intended for use in connection with dialysis treatments, will now be prepared and test components for field tests will be manufactured. The customer plans to commence volume production next year.

January - September

For the period January-September the total order intake amounted to SEK 29.7 M (28.1).

The order intake during the first nine months is definitely lower than expected. However, based on information about customer’s development plans, Obducat estimates that the long-term potential for its NIL products remains very positive.

In the second quarter Obducat received an order for an Eitre®6 nanoimprint lithography system from Centre National de la Recherche Scientific (CNRS) in Grenoble. The Eitre® system will be installed in the Plateforme Technologique Amont (PTA) clean room at the MINATEC campus, Europe’s largest innovation centre for micro and nanotechnologies.

During the first quarter Obducat received UniLite’s formal approval (Site Acceptance Test) of the fully automatic Sindre 400® machine delivered in 2009. UniLite is one of the world’s leading manufacturers of LEDs and the Sindre 400® is an essential requirement for UniLite’s increasing production volumes and an important reference plant for Obducat.

In the first quarter Hamamatsu Photonics, world-leading producer of components for optoelectronics and measuring instruments, placed an order for a NIL system through Obducat’s partner Canon Marketing Japan. Hamamatsu Photonics supplies optoelectronic products, such as opto-semiconductors, photosensitive electron tubes, light sources and image measurement systems to industrial enterprises, universities and research institutes all over the world. The Obducat NIL system (nanoimprint lithography system) is intended for use in product development and pilot production of optical equipment. Hamamatsu chose Obducat on account of excellent imprint quality, Obducat’s industrial merits and the strong local support offered by the partner Canon Marketing Japan. Obducat’s patented process technologies, IPS® and STU®, were employed during the evaluation.

In the first quarter the order for a Sindre HDD HVM system was removed form the order stock while at the same time discussing joint development activities with the customer in order to meet the customer’s newly arisen needs in the Bit Patterned Media (BPM) segment. The production system for the BPM segment is however a requirement for later on compared with the DTR segement, on which the HDD industry has so far focused, and therefore final delivery of the DTR order will not take place.

Sales and result – third quarter

Group sales for the quarter amounted to 6.862 (13.712). The Group generated a gross profit of 3.789 (6.718), corresponding to a gross margin of 55 (49) per cent. Operating loss for the quarter was -14 571 (-10.357), which was charged with depreciation according to plan of –3.012 (–2.721).

Loss for the quarter after taxes was -15.252 (-12.099), with the difference compared with the same quarter the previous year largely depending on a lower gross result attributable to lower sales.

(For full report, including tables, see attached file)