AXIS CommunicationsA world of intelligent networks

Financial year (8 months) May - December 2000

Presented by Peter Ragnarsson

Axis Group

Connectivity forperipheral units

• Printservers• Scan servers• CDservers• Camera servers• Technology

Connectivity forpersonalcommunicationdevices

• Mobile Internet

Founded 1984

Listed on Stockholm stock exchange 2000

Founded 1984

Listed on Stockholm stock exchange 2000

Axis AB

Netch 59%(incl new issue 2001)

nBand 11%

Axis history - four distinct phases

1984 1992 1996 2000

IBM protocol conversion

Europe1st phase

2nd phasePrint servers

Asia

3rd phase ThinServers

USA

4th phaseIP connectivity

Globally

Highlights - 8 month period

Revenues 494 Mkr (481)

ThinServer products Document & Storage businesses

re-structured

Camera 184% growth

Profitability

Netch: EBIT loss -57 Mkr re-structuring finished in q1-2001

Highlights - 8 month period

Expansion as planned Build-up of complete

Mobile Internet Division

Total Mobile Internet investment costs 67 Mkr during May-Dec 2000

New technology platform, incl wireless technologies

Strategic partnerships

Total R&D 133 Mkr (92)

EBIT excl Netch -108 Mkr (-2)

EBIT incl Netch -165 Mkr (-8)

Revenue mix December 2000 (8 months)

Netch8,7%

Other4,4%

Technology0,3%

Document49,0%

Storage9,7%

Camera27,7%

Mobile Internet

0,2%

Revenues for 8-month period

May-Dec2000

May-Dec1999

Growth

Document 241,5 290,9 -17,0%

Camera 136,9 48,2 184,3%

Storage 48,0 98,5 -51,3%

Technology 1,6 - -

Other 21,6 6,2 250,4%

ThinServers 449,6 443,8 1,3%

MobileInternet

1,2 - -

Netch 42,8 37,4 14,6%

TOTAL 493,6 481,2 2,6%

EBIT 8 month period

Profitability in ThinServer area

Investment peak in Mobile Internet

26 Mkr in Nov-Dec 2000

Loss in Netch 27 Mkr whereof structural 10 Mkr

EBIT by period

-45

-36-27

-15

-15-27

-70

-60

-50

-40

-30

-20

-10

0

may-jul 2000 aug-oct 2000 nov-dec 2000S

EK

m

Axis Netch

2 months

EBIT for 8-month periodMay-Dec 2000 May-Dec 1999

ThinServer products -11,5

Mobile Internet -67,3

Corporate functions -29,3

SUB-TOTALAxis excl Netch

-108,1 -2,3

Netch -47,0 -5,4

Netch, structural -9,9

TOTAL -165,0 -7,7

Balance sheet - assets

Dec 2000 Apr 2000

Fixed assets 160,1 91,1

Inventories 60,1 69,9

Acc. Receivables 138,0 132,0

Other current rec. 73,2 34,5

Liquid funds 196,0 12,4

TOTAL ASSETS 627,4 339,9

Balance sheet - liabilities & equity

Dec 2000 Apr 2000

Equity 379,7 27,1

Minority 12,1 9,9

Provisions 15,2 12,3

Long-term loans 51,4 162,8

Short-term liab. 169,0 127,8

TOTAL LIAB& EQUITY

627,4 339,9

Change in liquid funds

May – Dec 2000

Opening balance 12,4

New issue 445,5

Amortization of loans -111,4

Cash-flow from operations -114,0

Investment in nBand -20,0

Investment in other fixed assets -18,5

Other 2,0

Closing balance 196,0

ThinServer products

Document Global top 3 on network print

solutions

Camera Leader in network camera

and video servers

Storage Global n°1 market leader for

CD/DVD servers

Technology network solution platforms

ThinServer market

ThinServer market

0

2 000

4 000

6 000

8 000

10 000

12 000

1999 2000 2001 2002 2003 2004

US

$ (

mill

ion

s)

IDC predicts sales of ThinServers at more than $11 billion by 2004

Source: IDC

ThinServer products - revenues

Camera growth 184%

Document OEM growth 33%

Document & Storage re-structured for appropriate focus

Networked Office

OEM

Sales, 8 month period

0

100

200

300

400

500

600

may-dec 1999 may-dec 2000

SE

K m

Document Brand Documet OEM

Camera Storage

Technology Other

ThinServer products - EBIT

Profitability in focus

Investment level reduced significantly

EBIT by period

-12

-6

6

-15

-10

-5

0

5

10

may-jul 2000 aug-oct 2000 nov-dec 2000

SE

K m

2 months

Mobile Internet

Carrier class total system solutions for local mobile networks based on Bluetoothand WLAN (802.11)

Mobile Internet Server Subscriber management Security Positioning Network management I/f to billing & customer care systems

Initial order from Canon on Axis 9010 Bluetooth™ Access Points

Mobile Internet

Mobile Internet Division founded

Complete solutions for local wireless networks

Intensive R&D (67 Mkr)

Test units delivered

Sales, 8 month period

1.170

0

0.5

1

1.5

2

may-dec 1999 may-dec 2000

SEK m

Mobile Internet products - EBIT

Investment peak during Nov-Dec 2000

Investment level declining during 2001

EBIT by period

-21 -20

-26

-30

-25

-20

-15

-10

-5

0

may-jul 2000 aug-oct 2000 nov-dec 2000

SE

K m

2 months

Netch

Netch is a supplier of strategic internet services

Axis holds 59% of Netch after the new issue (57,6 Mkr) in February 2001

Peter Ragnarsson Chairman of the Board in Netch from Dec. 2000

Sales, 8 month period

37 43

0

50

100

150

200

may-dec 1999 may-dec 2000

SEK

m

Netch - EBIT

Re-structuring program

Re-structuring costs q4 2000: 10 Mkr

q1 2001: 30 Mkr (est)

Focus on reaching profitability in 2001

EBIT by period

-15 -15

-27

-30

-25

-20

-15

-10

-5

0

may-jul 2000 aug-oct 2000 nov-dec 2000

SE

K m

2 months

Market trends 2001

Stable and profitable base in Document & Storage Growth in OEM segment

Strong growth potential in Camera

Market potential for local wireless networks

Outlook 2001

Focus on profitability Normalization of investment level

Re-structuring of Netch

Long-term financial goals remains unchanged

Axis 2001

Global presence

4th major investment phase completed

Industry insider

Profitable base business

Netch re-structured

Proven track record

Axis financial goals

Equity ratio normally not less than 50%

Average annual sales growth of 30% in the five years following the IPO

Pre-tax margin of 10-15% achieved within three years from the IPO