1 january – june 2006 observer ab. 2 highlights q2 2006 revenue up 11 % and ebit* up 41 % strong...

1

January – June 2006

Observer AB

2

Highlights Q2 2006

Revenue up 11 % and EBIT* up 41 %

Strong growth in value added, analyzed information

Growth in international client segment

Restructurings in the Nordic & Baltic region, the UK and HQ proceed according to plan

Positive development in the US, Canada, Germany and Portugal

* Excluding write-down, goodwill and restructuring expenses

3

January – June 2006

Amounts in SEK million Jan-June 2006 Q2 2006Revenue 974.1 (856.0) 481.5 (432.5)Organic growth 4% 5%EBIT excl write-down, goodwill and restructuring expenses 114.7 (86.2) 49.8 (35.4)Operating margin excl write-down, goodwill and restructuring expenses 11.8% (10.1) 10.3 % (8.2)EBIT incl write-down, goodwill and restructuring expenses -372.6 (86.2) 31.5 (35.4)

4

Market

Generally good market conditions Rising demand for value-added analyzed information Opportunity to gradually increase fixed revenue

North America Healthy demand for integrated services Strong market for broadcast monitoring

Nordic & Baltic Strong growth in evaluation services Positive development in the international client segment

Rest of Europe Positive development in Germany and Portugal Weak development in Monitoring in the UK and Ireland

5

The Regions

%Organic Growth

-2

4

-2

0

7

9

-4

-2

0

2

4

6

8

10

Nordic & Baltic Rest of Europe North America

%

2005 Q1-Q2 2006 Q1-Q2

Operating Margin (excl. writedown, goodwill and

restructuring expenses)

0,2 0,0

12,3 10,8

21,923,8

0

5

10

15

20

25

2005 Q1-Q2 2006 Q1-Q2

Nordic & Baltic Rest of Europe North America

6

Changes and development

Business model towards more integrated and international offering Digitalization of production processes Restructuring - estimated savings: SEK 130 million, costs: SEK 120 million

Nordic & Baltic: Functional organization Digitalization of the monitoring process and integrated offering Reduced number of production sites

Rest of Europe: Establish new sales process in UK & Ireland Further development of the digital production process Organizational and management changes

North America Successful integration of Multivision Synergies with US operations enhance profit and growth in Canada

7

Organic Growth & Operating Margin (rolling 12 months)

0%

2%

4%

6%

8%

10%

2005 Q

1

2005 Q

2

2005 Q

3

2005 Q

4

2006 Q

1

2006 Q

2

Gro

wth

5%

7%

9%

11%

13%

15%

Marg

in

Organic growth Operating margin - rolling 12 months

8

Regions Q2 2006

Organic growth and EBIT margin by region (excl. write-down, goodwill)

Organic growth EBIT-margin Organic growth EBIT-marginNorthern Europe 9% 0.3% 0% -1.4 %Rest of Europe -1% 9.2% 0% 11.2%North America 8% 22.4% 7% 20.4%

Group 5% 10.3% 2% 8.2%

Q2 2006 Q2 2005

9

Operating cash flow & EBITA / EBIT

0%

20%

40%

60%

80%

100%

120%

2002 2003 2004 2005 Q1+Q22005

Q1+Q22006

EBITA/EBIT Operating cash flow

10

Write-down (Q1) (M SEK)

UK 405

Ireland 41

Norway 23

Baltics 0.1

Total 469

Exchange rate effects in Q2 -147

Goodwill Q2 2006

SEK 2 273 million

1101

223

751

287

11

Balance Sheet June 30, 2006

Working capital: - 63Equity / Assets ratio: 52 %Debt / Equity ratio: 50 %

Financial liabilities 936

Operating liabilities 541

Equity 1 608

Financial Assets, 130

Current receivables, 406

Other fixed assets, 276

Goodwill 2 273

Amounts in SEK million

12

A changing market

Growing international sales

Growing demand for Evaluate services

Increasing share of revenue from portals and software

Outsourcing and off-shoring

Copy right agreements

Partnerships, joint ventures, acquisitions

13

Focus 2006

Integrated and International offering

Integration, knowledge sharing and best practice

Observer Nordic & UK

14

Highlights Q2 2006

Revenue up 11 % and EBIT* up 41 % Strong growth in value added, analyzed information Growth in international client segment Restructurings in the Nordic & Baltic region, the UK and HQ proceed according to plan Positive development in the US, Canada, Germany and Portugal

* Excluding write-down, goodwill and restructuring expenses

15