AXIS CommunicationsA world of intelligent networks

Second quarter 2001 Presented by

Peter Ragnarsson

Positioning Axis for profitability

Axis will be profitable second half of 2001

Highlights - Structure

Clear structure Netch sold

Mobile Access Server sold

Focus on network connectivity

Highlights - EBIT

-57 -55 -62

-42-29

-10-31

-20

-80

-70-60

-50

-40

-30-20

-10

0

q2-00 q3-00 q4-00 q1-01 q2-01

EBIT Structural

Highlights - Sales

Half year 2001 Sales 353 Mkr (320)

Growth 10% ThinServers: +17% Netch: -45% (sold)

Sales(proforma 2000)

50

100

150

200

250

300

350

400

q2 accum

SE

K m

Prev year Current year

Highlights - Sales

Axis grows in weak IT-market Global company

Market positions

Product portfolio

Broad customer base

Distribution channels

Highlights - EBIT

Reduced production costs Productions problems solved

Positive impact 3-5 percentage units

Reduced overhead cost level Costs down >100 M annually

Profitability second half of 2001

Segments

Networked Office Professional buyers

Organizations >50 employees

Office connectivity OEM Industrial customers

Camera IT

Security / surveillance

Technology

Mobile Internet

Networked Office - sales q2 2001

Total sales 73.4 Mkr (81.5)

Growth –9.9%

Strategic segment

Profitable base

Sales(proforma 2000)

0

25

50

75

100

125

150

175

q2 accum

SE

K m

Prev year Current year

Office Connectivity OEM - sales q2 -01

Total sales 34.9 Mkr (21.7)

Growth 60.8%

Continuous demand for built-in printserver solutions

Sales(proforma 2000)

0

25

50

75

100

125

150

175

q2 accum

SE

K m

Prev year Current year

Camera - sales q2 2001

Total sales 56.5 Mkr (44.4)

Growth 27.3%

Launch Axis 2420

Collaboration with Milestone

Sales(proforma 2000)

0

25

50

75

100

125

150

175

q2 accum

SE

K m

Prev year Current year

Camera

New order approx. $ 1 M Mexican Election Authority (Instituto

Federal Electoral)

Axis Network Cameras part of integrated solution for producing Mexican ID-cards

Mobile Internet - sales q2 2001

Strategic area Wireless technologies

(WLAN, Bluetooth, etc)

Platform

Technology and market uncertainties

Sales(proforma 2000)

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

q2 accum

SE

K m

Prev year Current year

Highlights q2 2001 - EBIT

Towards profitability as planned Axis (excl. structural costs) up 5.5 Mkr

compared to q2-2000

Heavy R&D investments Mobile Internet 25 Mkr R&D total 50 Mkr

Structural changes

Highlights q2 2001 - EBIT

Items influencing EBIT Temporary production problems solved

in June, but unfavourable production allocation impacts also q2

Administrative costs related to restructuring activities

Lay-off program -20 Mkr

EBIT analysis q2-2001 (proforma q2-2000)

April-June 2001 April-June 2000

ThinServer products 0.7 -11.2

Mobile Internet -24.7 -18.6

Corporate functions -15.2 -14.8

Sub-total Axis excl structural and Netch

-39.1 -44.6

Structural cost Axis -20.3 -

SUB-TOTAL Axis excl Netch

-59.4 -44.6

Netch 9.8 -11.9

TOTAL -49.6 -56.6

EBIT by quarter (proforma 2000)

R&D overall 50 Mkr in q2-2001

New structure 20 Mkr restructuring

costs in q2-2001

Restructuring costs in q4 and q1 relates to Netch

Towards profitability as planned

EBIT by quarter (proforma 2000)

-57 -57 -55-62

-42-29

-10

-31

-20

-80

-70

-60

-50

-40

-30

-20

-10

0

q1-2000

q2-2000

q3-2000

q4-2000

q1-2001

q2-2001

SE

K m

EBIT Structural

ThinServer products - EBIT q1 2001

Profitability in focus Action program

reduces cost by 15%

EBIT level improved significantly

Action program impacts profitability from q3 and onwards

EBIT by quarter (proforma 2000)

-31

-11-7

1 0 1

-35

-30

-25

-20

-15

-10

-5

0

5

q1-2000

q2-2000

q3-2000

q4-2000

q1-2001

q2-2001

SE

K m

Mobile Internet products - EBIT q2 -01

Intensive R&D Total investment in

q2-2001 25 Mkr (19)

Investment level reduced during 2001

EBIT by quarter (proforma 2000)

-14-19

-21

-34

-24 -25

-40

-35

-30

-25

-20

-15

-10

-5

0

q1-2000

q2-2000

q3-2000

q4-2000

q1-2001

q2-2001

SE

K m

Change in liquid funds – q2 2001

Jan – June 2001

Opening balance 196.0

Cash-flow from operations -44.5

Investment in other fixed assets -17.6

Financing activities 30.6

Other -

Closing balance 164.5

Balance sheet - assets

June 2001 Dec 2000

Fixed assets 167.9 160.1

Inventories 51.5 60.1

Acc. Receivables 109.5 138.0

Other current rec. 28.6 73.2

Liquid funds 164.5 196.0

TOTAL ASSETS 522.1 627.4

Balance sheet - liabilities & equity

June 2001 Dec 2000

Equity 267.6 379.7

Minority - 12.1

Provisions 30.1 15.2

Long-term loans 61.0 51.4

Short-term liab. 163.4 169.0

TOTAL LIAB & EQUITY

522.1 627.4

Market trends 2001

Generally weak market conditions expected for the rest of year 2001

Market and technology delays in wireless area

Axis 2001

Focus on network connectivity

Global presence

Industry insider

R&D portfolio

Established channels to markets

Track record

Outlook 2001

Profitable second half of year 2001