Quarterly report, 1 January - 31 March 2005

Pointsec sales hit new record highs

FIRST QUARTER • Sales rose to SEK 63.7 M (58.1) for the quarter. Excluding divested operations the sales growth was 20%, SEK 63.7 M compared to 52.9. • Sales of Pointsec-products rose for the third quarter in row to SEK 49.7 M (40.1). • Operating result amounted to SEK 13.1 M (13.2). • Profit after financial items amounted to SEK 13.5 M (15.3). • Profit after tax amounted to SEK 8.8 M (11.1). • Profit per share amounted to SEK 0.80 (1.05). CEO Thomas Bill’s comments: • Pointsec’s revenue increased for the third consecutive quarter to its highest quarterly value to date, SEK 49.7 M. In total, the Group revenues grew with 20%, taking last year’s divested operations into consideration. This is particularly pleasing to note since the first quarter normally is weak in respect of sales for software companies. • Particularly satisfactory is that the revenue upswing was not caused by any single major order, which was the case the first quarter preceding year when a single order amounted to SEK 18 M of total sales. Instead, this year’s sales was the result of a high volume of orders and a record number of new customers – a clear demonstration of Pointsec’s strength. • Also encouraging is the fact that sales in the US have accelerated. During the quarter, US sales accounted for approximately one-quarter of total sales. Here, the order from the US Army, worth SEK 3.9 M, regarding a security solution for handheld computers to be used in mobile field medical care, is key. • The strong demand for Pointsec’s solutions in the Japanese market was ongoing. The coming into effect of new Japanese legislation concerning requirements on protection of confidential information was a contributing factor. To fully take advantage of the new business opportunities, a Japanese subsidiary was launched and a Japanese president was appointed for the new subsidiary. • The phase-out of the unprofitable parts of the third-party operations carried out at year-end has, through the resulting increase in focus, given rise to increased sales in the Nordic countries of Pointsec and remaining third-party products. • We also note that first-quarter profit after net financial items, SEK 13.5 M, was achieved despite a planned increase in the cost base, due to increased investments in new offices and product development. • Due to the good start to the year, our expectation that the trend of Pointsec’s sales will continue to be favorable, and that the Group’s earnings will be an improvement over the previous year, remains unchanged.