About Axis Communications Axis offers intelligent security solutions that enable a smarter, safer world. As the market leader in network video, Axis is driving the industry by continually launching innovative network products based on an open platform - delivering high value to customers through a global partner network. Axis has long-term relationships with partners and provides them with knowledge and ground-breaking network products in existing and new markets. Axis has more than 2,700 dedicated employees in more than 50 countries around the world, supported by a global network of over 90,000 partners. Founded in 1984, Axis is a Sweden-based company listed on NASDAQ Stockholm under the ticker AXIS. For more information about Axis, please visit our website www.axis.com.

The first quarter of 2017 was characterized by strong growth and

profitability. A contributory factor to the sales increase was that

many of our distributors sold off large parts of their inventories due

to strong demand in late 2016, and thus needed to replenish their

inventories in early 2017. Foreign currency effects and revenue from

the companies we acquired during 2016 also contributed positively

to growth. But even apart from these factors, the performance

was strong during the quarter.

All of our three sales regions showed a stable performance during

the quarter. A global market presence is a crucial part of Axis’

strategy, and in this context it is worth mentioning that we also

opened several new offices in early 2017 and continued to increase

the number of employees in our global sales organization.

Just after the end of the quarter, we unveiled a number of new

products and solutions at the major security industry trade show

ISC West in the USA. One example is Axis’ new FA Series, with

modular cameras for highly discreet surveillance. At the exhibition,

we also introduced a future surveillance solution based on radar

technology, which will be a good complement to our existing

solutions.

On March 30, we published Axis’ Annual and Sustainability Report

for 2016. This was the first year that we combined the annual

report with the sustainability report, as part of our ambition that

sustainability should be a natural and integrated aspect of our

entire business. The report showed continued progress in the

sustainability field during 2016, and of course this is something

we will continue to advance going forward.

President’s comments

Interim reportJanuary-March 2017

Ray Mauritsson President

The first quarter > Net sales increased by 29 percent during the first quarter to SEK 2,027 M (1,567). Net sales increased by 21 percent in local currencies.

> Operating profit increased to SEK 234 M (153), which corresponds to an operating margin of 11.6 percent (9.8).

> Profit after tax amounted to SEK 177 M (114). > Earnings per share amounted to SEK 2.55 (1.64).

2

Events during the first quarter Continued growth and developmentDuring the first quarter of the year, the number of employees increased by 68, which means

that Axis had 2,714 employees at the end of the first quarter of 2017. The increase in the

number of employees primarily related to research and development and Axis’ global sales

organization. On a global basis, this growth was also noted through newly established offices

in Florida and Texas, and the opening of a new office and AEC in Hong Kong.

Activities continued in our research and development operations. During the first quarter, the

focus was on the products and solutions unveiled in early April at the security trade show ISC

West in Las Vegas, USA. At the exhibition, Axis previewed a new surveillance system – AXIS

D2050-VE Network Radar Detector – a motion detector based on radar technology. The new

network radar will operate as a great complement to existing surveillance solutions. Axis’

new FA Series was also presented at the trade show, which consists of modular network

cameras for highly discreet surveillance, and new camera models in the Axis P13 series,

mainly intended as surveillance solutions in cities and retail environments.

Publication of the Sustainability Report 2016On March 30, Axis published the company’s sustainability report for 2016, this time as

part of the annual report. For the third consecutive year, Axis reported in accordance with

the GRI (Global Reporting Initiative) G4 guidelines, Core level. The report also constitutes

Axis’ Communication on Progress report to the UN Global Compact.

The sustainability report showed continued progress during 2016. For example, 85 percent

of all cameras and encoders are PVC-free. Ten so-called critical suppliers underwent training

as part of Axis Supplier Academy. In addition, Axis participated in initiatives in order to

improve diversity, and thus increase competencies, in the workplace. During 2016, work

also began on creating a new environmental policy, which entered into force in the first

quarter of 2017.

Number of employees

Q2 Q3 Q4 01 02 03 Q4 Q1 2015 2016 2017

10001050110011501200125013001350140014501500155016001650170017501800185019001950200020502100215022002250230023502400245025002550260026502700

20612109

21392192

2493

25772646

2714

3

Comments on the income statement and balance sheetNet salesThe first quarter

Net sales in the first quarter amounted to SEK 2,027 M (1,567), which was an increase of

29 percent. Growth was 21 percent in local currency. Foreign currency effects impacted

sales positively by SEK 124 M.

Sales in the EMEA region amounted to SEK 732 M (586) during the first quarter, corresponding

to growth of 25 percent. Growth amounted to 19 percent in local currency. The region

showed a stable performance, with the exception of the Middle East to some extent.

Sales in the Americas region amounted to SEK 1,040 M (810) during the first quarter,

corresponding to growth of 28 percent. Growth amounted to 21 percent in local currency.

Foreign currency effects in relation to the USD had a positive effect on revenue from the USA.

Sales in the Asia region amounted to SEK 255 M (171) during the first quarter, corresponding

to growth of 49 percent. Growth was 35 percent in local currency.

Invoiced sales per product group (SEK M)

Q1 2017

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Video 1,901.4 1,546.9 1,714.9 1,864.1 1,941.8

Other 125.3 20.1 47.8 133.1 117.0

TOTAL 2,026.7 1,567.0 1,762.7 1,997.2 2,058.8

Invoiced sales per region (SEK M)

Q1 2017

Q1 2016

Q2 2016

Q3 2016

Q4 2016

EMEA 732.4 585.7 565.2 671.0 823.8

Americas 1,039.7 810.0 984.1 1,068.9 992.7

Asia 254.6 171.3 213.4 257.3 242.3

TOTAL 2,026.7 1,567.0 1,762.7 1,997.2 2,058.8

Sales

Sales SEK M

Total growth, %

Invoicing per regionQ1 2017

%

Sales per region, SEK M

SEK M

0100200300400500600700800900

100011001200130014001500160017001800190020002100

0

10

20

30

40

50

60

70

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017

Americas

EMEA

Asia

36 %

51 %13%

EMEA Americas Asia

050

100150200250300350400450500550600650700750800850900950

100010501100

Q2 Q3 Q4 Q1 02 03 Q4 Q1 2015 2016 2017

4

EarningsThe first quarter

Operating profit during the first quarter amounted to SEK 234 M (153), corresponding to an

operating margin of 11.6 percent (9.8). Gross margin continued to be stable and amounted

to 51.0 percent (50.1) in the first quarter. Profit before tax was SEK 234 M (153). Profit

after tax amounted to SEK 177 M (114). Exchange rate fluctuations impacted operating

profit positively by SEK 47 M.

Condensed income statement (SEK M)

Q1 2017

Q1 2016

Q2 2016

Q3 2016

Q4 2016

Net sales 2,026.7 1,567.0 1,762.7 1,997.2 2,058.8

Gross profit 1,034.0 785.5 876.0 989.4 1,055.9

Gross margin ,% 51.0 50.1 49.7 49.5 51.3Operating profit 234.3 153.1 166.8 312.2 252.9Operating margin, % 11.6 9.8 9.5 15.6 12.3Profit before tax 233.8 153.2 166.2 312.0 252.8

Cash flow, investments and financial positionCash flow from operating activities for the period amounted to SEK 323 M (-79). Net

investments totaled SEK 94 M (180), of which capitalized development costs amounted to

SEK 22 M (16). Axis had SEK 1,087 M (755) in cash and cash equivalents at the end of the

period, as well as unutilized credit facilities of SEK 50 M (50). Accordingly, the company

had a total of SEK 1,137 M (805) at its disposal at March 31, 2017.

EquityConsolidated equity amounted to SEK 2,531 M (1,858). The total number of shares at year-

end was 69,461,250 (69,461,250). Axis has no outstanding stock option programs. The group’s

equity/assets ratio was 61.3 percent (60.9) at March 31, 2017.

(SEK M)Share

capital Other contributed

capitalOther

reserves Retained earnings

Total equity

Opening balance at Jan 1, 2016 0.7 279.2 -1.8 1,463.4 1,741.5Total comprehensive income for the period - - 2.4 114.1 116.5

Dividend - - - - -

Closing balance at Mar 31, 2016 0.7 279.2 0.6 1,577.5 1,858.0

Opening balance at Jan 1, 2017 0.7 279.2 14.8 2,057.6 2,352.3Total comprehensive income for the period - - 1.6 177.2 178.8

Dividend - - - - 0.0

Closing balance at Mar 31, 2017 0.7 279.2 16.4 2,234.8 2,531.2

Parent CompanyThe parent company’s operations are primarily focused on company-wide administration.

The parent company has no employees. During the period, sales amounted to SEK 31 M (26)

and operating profit amounted to SEK 14 M (15). Cash and cash equivalents at the end of

the period amounted to SEK 487 M (378) and borrowing was SEK 0 M (0).

Operating profit

Operating profit SEK M

Gross margin %EBIT margin %

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2017

0

30

60

90

120

150

180

210

240

270

300

330

360

390

0

10

20

30

40

50

60

70

80

90

100

Mkr %

5

OutlookThe market activity and the inflow of new projects means that Axis’ view on the current

market growth rate remains unchanged. An important factor for continued strong growth

is increased penetration in installations for smaller systems and in emerging markets.

In order to meet market demand and retain its position as the market-leading supplier

of network video solutions, Axis will continue to develop and release a large number of

innovative products, refine the partner network, recruit more employees and continue to

expand globally.

OtherRisks and uncertainties

Axis’ operations are subject to a further number of risks and uncertainties, which are described

in the Annual Report for 2016. No new material risks have arisen during 2017.

Accounting policies

The consolidated financial statements have been prepared in accordance with the International

Financial Reporting Standards (IFRS) as adopted by the EU. The Parent Company has prepared

its financial statements in accordance with the Swedish Annual Accounts Act and the Swedish

Financial Reporting Board’s recommendation RFR 2, Accounting for Legal Entities. This

interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The

accounting and valuation principles and basis for judgements applied in the Annual Report

for 2016 were also used in preparation of this interim report. No new or revised IFRS, which

became effective in 2017, have had any material impact on the group.

Annual General Meeting

Axis’ Annual General Meeting was held on April 20.

The Axis share

The company’s share is listed on Nasdaq Stockholm in the Large Cap segment, under the ticker

AXIS. Axis’ share had a turnover of 44,179 shares during the period January-March 2017,

which gave an average turnover of 701 shares per trading day, to a value of SEK 241,428 M.

The average price of the share during the period was SEK 352.9.

Reporting dates

Axis will report on the following dates during the 2017 fiscal year:

Interim report, January-June: July 12

Interim report, January-September: October 20

Lund, April 21, 2017 Ray Mauritsson President

Audit

The company’s auditors did not perform a review of the report for the first quarter of 2017.

6

Consolidated comprehensive income

(SEK M)Q1

2017Q1

2016Full-year

2016Q2 16-Q1 17

12 months

Net sales 2,026.7 1,567.0 7,385.7 7,845.4

Cost of goods and services sold -992,7 -781.5 -3,678.9 -3,890.1

Gross profit 1,034.0 785.5 3,706.8 3,955.3

Other revenues and changes in value -8.0 3.3 63.5 52.2

Selling and marketing expenses -362.3 -295.2 -1,353.0 -1,420.1

Administative expenses -83.0 -74.2 -298.9 -307.7

Research and development expenses -346.4 -266.3 -1,233.4 -1,313.5

Operating profit* 234.3 153.1 885.0 966.2

Net financial items -0.5 0.1 -0.8 -1.4

Profit before tax 233.8 153.2 884.2 964.8

Taxes -56.6 -39.1 -245.5 -263.0

Net profit for the period 177.2 114.1 638.7 701.8

Other comprehensive incomeItems that later may be transferred to the income statementExchange differences 1.6 2.4 16.6 15.8

Other comprehensive income for the period, net after tax 1.6 2.4 16.6 15.8

Total comprehensive income for the period 178.8 116.5 655.3 717.6

Total comprehensive income attributable to:

Parent company’s shareholders 178.8 116.5 655.3 717.6

Earnings per share for the period, SEK 2.55 1.64 9.20 10.10

Number of shares, average, thousands 69,461 69,461 69,461 69,461

*Net effects of changes in exchange rates in underlying receivables and liabilities in foreign currencies have impacted operating profit positively by SEK 8 M (SEK 3 M) in the first quarter.

Consolidated cash flow statement, condensed

(SEK M)Q1

2017Q1

2016Full-year

2016Q2 16-Q1 17

12 monthsCash flow from operating activities before change in working capital

239.5 115.1 772.1 896.5

Change in working capital 83.2 -194.1 -50.7 226.6

Cash flow from operating activities 322.7 -79.0 721.4 1,123.1

Cash flow from investing activities -94.1 -180.3 -831.6 -745.3

Cash flow from financing activities -0.3 -1.2 -47.2 -46.3

Cash flow for the period 228.4 -260.5 -157.4 331.4Cash and cash equivalents at the beginning of the period 858.3 1,015.8 1,015.8 755.3

Cash and cash equivalents at the end of the period 1,086.7 755.3 858.3 1 086.7

7

Consolidated balance sheet, condensed(SEK M) March 31, 2017 March 31, 2016 December 31, 2016Non-current assets 1,226.6 590.6 1,167.9

Inventories 968.7 1,075.0 1,106.5

Trade receivables* 625.3 447.3 656.5

Other receivables 220.1 184.6 220.1

Cash and cash equivalents 1,086.7 755.3 858.3

Total 4,127.6 3,052.8 4,009.4

Equity 2,531.2 1,858.0 2,352.3

Non-current liabilities 396.7 281.1 391.0

Trade payables 527.2 403.8 621.3

Other current liabilities 672.5 509.9 644.8

Total 4,127.6 3,052.8 4,009.4

*This item includes receivables from contract manufacturers of SEK 9 M (SEK 5 M).

Key ratios (see note 1)

Q1 2017

Q1 2016

Full-year2016

Net sales growth (%) 29.3 15.7 11.3

Gross margin (%) 51.0 50.1 50.2

Operating margin (%) 11.6 9.8 12.0

Profit margin (%) 11.5 9,8 12.0

Depreciations/amortization (SEK M)* 146.1 109 135.8

Equity (SEK M) 2,531 1,858 2,352

Equity/assets ratio (%) 61.3 60.9 58.7

Total assets (SEK M)* 4,128 3,053 4,009

Interest-bearing liabilities (SEK M) 3 4 3

Net receivables, (SEK M) 1,084 751 855

Capital employed 2,534 1,862 2,355

Return on capital employed (%)* 39.6 49.4 43.3

Return on equity (%)* 30.8 38.5 33.7

Number of employees (average for the period) 2,692 2,164 2,414

Sales per employee (SEK M)* 2.9 3.2 3.1

Operating profit per employee (SEK M)* 0.4 0.4 0.4 * Key ratios have been recalculated to rolling 12-month values where appropriate.

Per-share dataMar 31, 2017 Mar 31, 2016 Dec 31, 2016

Share price at end of period (SEK) 340.00 337.10 340.60

Dividend (SEK)* 0.00 0.00 0.64

P/E ratio** 34 35 37

Earnings per share (SEK) 2.55 1.64 9.20

Number of shares (thousands) 69,461 69,461 69,461

Number of outstanding shares (thousands) 69,461 69,461 69,461

*Proposed dividend**The P/E ratio has been recalculated to rolling 12-month values.

8

Parent company income statement(SEK M) Q1

2017Q1

2016Full-year

2016Net sales 30.7 25.6 118.6

Gross profit 30.7 25.6 118.6

Administrative expenses -16.8 -10.7 -60.6

Operating profit 13.9 14.9 58.0

Financial income 2.3 6.5 0.9

Financial expenses -0.9 -0.2 -29.0

Profit/loss after financial items 15.3 21.2 29.9

Appropriations - - 542.2

Tax -3.4 -4.7 -126.7

Net profit for the period 11.9 16.5 445.4

Parent company balance sheet, condensed(SEK M) Mar 31, 2017 Mar 31, 2016 Dec 31, 2016Non-current assets 70.8 70.7 71.4

Receivables from group companies 1,700.6 1,281.5 1,902.7

Trade receivables and other receivables 1.0 1.3 1.3

Tax assets 21.4 15.8 0.0

Cash and cash equivalents 486.9 377.8 312.1

Total 2,280.7 1,747.1 2,287.5

Equity 1,289.4 893.1 1,277.5

Untaxed reserves 976.0 843.5 976.0

Liabilities to group companies 2.2 1.0 2.3

Current liabilities 13.1 9.5 31.7

Total 2,280.7 1,747.1 2,287.5

Quarterly dataInvoiced sales per product group (SEK M)

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Video 1,354.0 1,458.3 1,496.2 1,347.5 1,607.6 1,885.5 1,738.8 1,546.9 1,714.9 1,864.1 1,941.8 1,901.4

Other 0.7 3.8 7.6 6.8 8.7 20.2 19.6 20.1 47.8 133.1 117.0 125.3

TOTAL 1,354.7 1,462.1 1,503.8 1,354.3 1,616.3 1,905.7 1,758.4 1,567.0 1,762.7 1,997.2 2,058.8 2,026.7

Invoiced sales per region (SEK M)

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

EMEA 478.7 522.9 596.1 470.4 554.2 602.2 739.5 585.7 565.2 671.0 823.8 732.4

Americas 700.4 758.2 692.7 713.0 859.9 1,084.8 832.0 810.0 984.1 1,068.9 992.7 1,039.7

Asia 175.6 181.0 215.0 170.9 202.2 218.7 186.9 171.3 213.4 257.3 242.3 254.6

TOTAL 1,354.7 1,462.1 1,503.8 1,354.3 1,616.3 1,905.7 1,758.4 1,567.0 1,762.7 1,997.2 2,058.8 2,026.7

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Q32016

Q42016

Q12017

Net sales growth (%) 21.6 10.6 15.8 19.9 19.3 30.3 16.9 15.7 9.1 4.8 17.1 29.3

Gross profit (SEK M) 706.9 760.9 784.4 710.1 821.7 973.6 867.1 785.5 876.0 989.4 1,055.9 1,034.0

Gross margin (%) 52.2 52.0 52.2 52.4 50.8 51.1 49.3 50.1 49.7 49.5 51.3 51.0

Operating profit (SEK M) 187.6 256.5 199.2 144.8 116.5 388.7 231.2 153.1 166.8 312.2 252.9 234.3

Operating margin (%) 13.8 17.5 13.2 10.7 7.2 20.4 13.1 9.8 9.5 15.6 12.3 11.6

9

NOTE 1 Key ratios

1.1 DefinitionsReturn on equityProfit after financial items less full tax divided by average equity.

Return on capital employedProfit after financial items plus financial expenses divided by average capital employed.

Gross marginGross profit as a percentage of net sales.

Net receivablesNet interest-bearing receivables and liabilities.

Sales per employee Net sales divided by the average number of employees.

P/E ratioShare price divided by earnings per share.

Earnings per shareNet profit for the year divided by the average number of shares.

Operating marginOperating profit as a percentage of net sales.

Operating profit per employee Operating profit divided by the average number of employees.

Equity/assets ratioEquity as a percentage of total assets.

Capital employedTotal assets less non interest-bearing liabilities including deferred tax liability.

Profit marginProfit before tax as a percentage of net sales.

1.2 AimReturn on equityThe key ratio shows the operation’s return on the equity contributed by the shareholders and is thus a measurement of how profi-table the group is. Investors can compare this metric with current bank interest or returns from alternative investments. The metric can also be used to compare profitability between companies in the same industry.

Return on capital employedThe key ratio shows the operation’s return on the equity that the shareholders and lenders have made available. The metric thus shows the group’s return, independent of financing choice, and can be used in connection with investment evaluations.

Net receivablesThe key ratio is useful for users of financial statements as a complement to evaluate the possibility of dividends and strategic invest-ments and also to evaluate the group’s potential to meet its financial obligations.

Sales per employee The key ratio shows users of financial statements how effectively the company’s employees contribute to sales.

P/E ratioThe P/E ratio gives an indication of how long it will take before investors get back their money, provided that profits remain unchanged.

Operating profit per employee The key ratio is used to show how each employee contributes to the group’s operating profit.

Equity/assets ratioThe key ratio shows how large a proportion of the assets are financed with equity. The metric can be of interest when evaluating the group’s solvency in the longer term.

10

1.3 Reconciliation with financial statements according to IFRS Q1

2017Q1

2016Full-year

2016Return on equityProfit after financial items R12 965 889 884

Full tax -212 -196 -195

Profit after financial items R12 less full tax 753 694 690

Average equity 2,442 1,800 2,047

30.8% 38.5% 33.7%

Return on capital employedProfit after financial items R12 965 889 884

Financial expenses R12 -3 -1 -3

Profit after financial items R12 plus financial expenses 968 890 887

Average capital employed 2,445 1,802 2,049

39.6% 49.4% 43.3%

Net receivablesCash and cash equivalents 1,087 755 858

Interest-bearing liabilities -3 -4 -3

1,084 751 855

Sales per employee Net sales R12 7,845 6,847 7,386

Average number of employees 2,692 2,164 2,414

2.9 3.2 3.1

P/E ratioShare price at end of the period 340.00 337.10 340.60

Earnings per share R12 2.55 9.53 9.20

133 35 37

Operating profit per employee Operating profit R12 966 890 885

Average number of employees 2,692 2,164 2,414

0.4 0.4 0.4

Equity/assets ratioEquity 2,531 1,858 2,352

Total assets 4,128 3,053 4,009

61.3% 60.9% 58.7%

Some of the key ratios such as gross margin, earnings per share, operating margin and profit margin may be easily calculated from the financial statements. Thus these metrics are regarded as reconciled and are not presented above.

For further information please contact:

Björn Hallerborn, PR & Corporate Communications Manager

Mail: pressoffice@axis.com

Phone: +46 46 272 18 00

This report contains future-oriented information that is based on the present expectations of

Axis’ Management. Even if the Management believes that the expectations reflected in such

future-oriented information are reasonable, no assurance may be given that these expectations

will prove to be correct. Consequently, actual future outcomes may deviate significantly from

what is reflected in the future-oriented information due to changed conditions relating to

the economy, market and competition, changes in legal requirements and other political

measures, fluctuations in exchange rates and other factors.

This information is information that Axis AB is obliged to make public pursuant to the EU

Market Abuse Regulation. The information was submitted for publication, through the agency

of the contact person set out above, at 08.00 CET on April 21, 2017.

Axis AB

Corporate identity no. 556241-1065

Emdalavägen 14, 223 69 Lund

Phone: +46 46 272 18 00

www.axis.com