Interim report July 1 - december 31, 2000

INTERIM REPORT JULY 1 - DECEMBER 31, 2000 for AB Novestra (publ), company reg. No. 556539-7709 Result and Financial Position, the Group (KSEK unless otherwise indicated) Purchase method. Second quarter October 1 - December 31, 2000 Novestra reports a result for the period October 1 to December 31, 2000 of -44,007 (64,692). The result per share amounted to SEK -1.88 (4.76). Of the total result, -41,614 represents unrealized write-downs which are mainly adjustments of the share price in Iquity Systems Inc. and in Mobilestop Inc. - where transactions have been made at lower valuations - and reservations within liquidity management. Moreover, of the total result, -35,628 (63,389) relates to the result from investment activities and the remaining balance -3,755 (4,257) relates to other operations. Book value on fixed financial assets amounted to 599,601 (157,478) of which interest-bearing investments constituted 206,459 (-). The Group's cash and cash equivalents, including interest-bearing investments shown under fixed financial assets, amounted to 229,721 (1,779) which corresponds to a value of SEK 9.8 per share (0.1). Solidity was 92.1% (83.4%). Shareholders' equity amounted to 604,766 (140,484) which corresponds 1 to a value of SEK 25.9 per share (9.1). Net asset value amounted to 1,070,453 (219,767) which corresponds to a 1, value of SEK 45.8 per share (14.3). Investments in portfolio companies amounted to 28,755 (118,401). The total number of shareholders as of December 31, 2000 was approx. 4,200 (approx. 3,500 as of June 30, 2000). Half-year July 1 - December 31, 2000 The result for the half-year ending December 31, 2000 amounted to - 61,191 (81,671) of which -50,938 (81,209) relates to the result from investment activities and -1,802 (4,588) relates to other operations. Of the result from investment activities, -41,614 emanate from write- downs which are unrealized. Novestra's liquidity management report a loss, including unrealized amounts, of MSEK 16.6 due to adverse market 1 conditions. The result per share amounted to SEK -2.62 (5.37). Novestra's additional investments in existing portfolio companies during the period (totalling MSEK 28.8). In connection with this transaction, Novestra's previous holding in Iquity Systems was written down by MSEK 14.9 to the share price level of the new issue. Following the postponement of B2 Bredband AB's IPO in October, B2's largest shareholders have committed additional capital needed for future expansion. B2 continues to show strong performance where, for example, the number of households with property network installations increased from 26,800 to 67,400 during the period September to October 2000. The rate of installations has continued at the same pace after October. In December, the Orange consortium (jointly owned by B2 Bredband (30%), Orange, Schibsted and Skanska) was granted a license for UMTS in Sweden. Novestra reached an agreement in December with Ericsson Business Innovation AB to invest in Multilet AB whereby Novestra would acquire 28 percent for MSEK 10 with an opportunity to increase its ownership to 49 percent. Ericsson Business Innovation AB owns the remaining shares. The transaction was formally closed in January, 2001. Significant events during the period July1 - September 30, 2000 Novestra's holding in Jupiter Communications Inc. was divested against payment in shares in Jupiter Media Metrix Inc. as a result of Media Metrix Inc.'s purchase of Jupiter Communications Inc. in September of 2000. The net positive result effect for Novestra of the transaction as of December 31, 2000 was MSEK 4.2. Novestra's holding in Boxman.com plc, with a book value of MSEK 20.6, was written down to zero following the company's application for voluntary liquidation in October of 2000. Novestra's total capital investment in Boxman.com plc is, however, limited to MSEK 13.9. Significant events after the end of the period Strax Holding Inc., a major shareholder in Mobilestop Inc., has made an offer to acquire all outstanding shares in Mobilestop and to merge the operations under a common management. Strax has shown strong growth since the foundation three years ago and it has managed to remain profitable in spite of significant investments in product development during the past year. Strax had sales of approx. MSEK 220 during 2000 and the merged company is expected to reach sales exceeding MSEK 500 during 2001. In connection with this offer, Novestra was offered to invest MSEK 14 in a convertible debenture in Strax. The transactions will give Novestra an aggregate ownership, upon conversion, of 7.6 percent in Strax and result in a write-down of the previous holding in Mobilestop of MSEK 7.4, which has been reserved in the accounts as of December 31, 2000. Strax will acquire Novestra's shares in Mobilestop regardless of whether the merger with Mobilestop is realized or not. in setting up the winning consortium for the Bologna broadband network, has acquired indirectly 5 percent of Casa. web through a consortium including CIR S.p.A., the industrial holding company of the De Benedetti Group, iNTEk S.p.A., a holding company specialising in acquiring high-growth potential companies (both listed on the Milan stock exchange) and B2 Bredband AB. Casa.web was established to build and operate the broadband network in the Bologna region with 2 million inhabitants. In addition to the partners of the consortium, Casa.web is held by the municipalities of Bologna, Imola, Ravenna and Forlì. Future development The development in Novestra's portfolio companies during 2000 has in general been positive. Many of the portfolio companies have reached their product development, sales and profit goals. The deteriorating market conditions in the second half of the year 2000 have in some cases forced companies to postpone IPOs or transactions. Multilet, jointly owned with Ericsson Business Innovation, will strengthen the focus on broadband at the same time as it is in line with Novestra's ambition to expand further into technology. Enabling services and technologies for the communication industry, including fixed and wireless broadband, will continue to be core areas for future development. The recent transactions in Iquity Systems and Mobilestop were conducted under highly adverse market conditions. With these two deals concluded, the already incurred and expected write-downs, in relation to shareholders' equity as per September 30, 2000, are currently estimated to be well within the 10 percent communicated in a previous press release dated December 14. The net asset value of the portfolio is still estimated to exceed book values considerably and the management believes that the balanced portfolio has possibilities to develop well over the next 12 to 24 months. With two new investments, excellent potential in the portfolio companies and the general ambition of Novestra to continue to be an active owner, the focus during the next two quarters will be to support and develop the existing portfolio. At the same time, the current market situation generates investment opportunities at valuations that are viable long-term and Novestra, with its strong financial position, will be able to consider selective investments in core areas. If the market conditions stabilise and recover in the later part of 2001, the management expects to be able to conclude transactions that will expose underlying values in Novestra's investment portfolio. Meanwhile, Novestra's long-term financial goal of a 30 percent annual growth remains unchanged in spite of the weak market conditions. Other information The interim report for the period July 1, 2000 - March 31, 2001 will Thomas Åkerman President ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/01/31/20010131BIT00830/bit0001.doc http://www.bit.se/bitonline/2001/01/31/20010131BIT00830/bit0002.pdf