• Net sales in the period amounted to MSEK 78 (111) and Net sales for the
second quarter were MSEK 35 (54).
• The Gross margin for the period was 68% (71) and Gross margin for the
second quarter was 70% (69). Gross profit for the period was MSEK 53 (79) and
Gross profit for the second quarter was MSEK 25 (37).
• Earnings before depreciations and amortizations (EBITDA) for the period
was MSEK -43 (-1) and EBITDA for the second quarter was MSEK -26 (-3).
• The Result after tax for the period was MSEK -52 (-11) and Result after
tax for the second quarter was MSEK -31 (-8).
• Earnings per share before and after dilution for the period was SEK -0,34
(-0,08) and for the second quarter SEK -0,19 (-0,06).
• Cash flow during the period was MSEK -3 (-11) and Cash flow for the second
quarter was MSEK -11 (-9). Cash flow from operating activities before changes
in working capital in the period was MSEK -44 (-3) and Cash from operating
activities before changes in working capital for the second quarter was MSEK
-27 (-4).

COMMENTS FROM THE CEO

Re-sizing the Swedish organization
In the second quarter we took action to re-size the Swedish operations into a
research and design engineering business unit for hardware products and to
consolidate other responsibilities with our international subsidiaries. The
plan was executed during June and July with the reduction of 27 full-time
employees and consultants in Lund. The net effect of the reorganization will be
a total annual cost saving of approximately 30 MSEK.

Revenues in Q2 were disappointing 35 MSEK compared to 43 MSEK in Q1 Cash flow
for the second quarter was MSEK -11 including 11 MSEK in partial proceeds from
the rights offering in March. Our working capital was high at the end of the
quarter whilst liquidity was tight partly due to a large number of pens in
stock. Sales in the beginning of the quarter were weak and no larger deals were
closed in the quarter. Anoto is suffering from having been too dependent on a
small number of partners with limited sales resources. Our strategy has
therefore been to strengthen our presence in key markets through acquisitions
and to strengthen sales. Develop IQ Ltd was acquired with effect from May 1st .
The acquisition further expands our business in the healthcare sector and
allows for synergies and optimization between our subsidiaries in the UK. The
company has been renamed Anoto Ltd.

Within business solutions we made progress in Germany within banking, insurance
and pharmaceuticals, in the US we got the first healthcare customer for Anoto
Live FormsTM, and in Holland we ran a successful pilot with a large global
company for a “proof of delivery” application combining digital pens and GPS
systems.

It has been a challenge to build market momentum and awareness with limited
resources in competition with the IT industry’s focus on tablet devices during
the past 12 months. Our strategy is therefore to increase focus on markets
where digital pen technology has a clear advantage. This is in areas where
tablet technology is not an option because of legal-, security-, mandatory- or
customer requirements for paper trail, in emerging markets with limited
infrastructure and in applications were digital pen technology offers ease of
use and superior return on investment.

In addition we are aligning our positioning with the rapid deployment of
tablets in different markets. As a result of the acquisitions we are able to
deliver mobile data capture and digital signature solutions that supports both
digital pens, tablets and smartphones. Customers are looking to reduce costs
related to paper handling and document workflow and improve returns and
operational efficiency by combining multiple device input for data capture. The
preferred solution should minimize disruption in work practice, maintain a high
level of service and customer satisfaction and meet strict compliance and
security requirements at the lowest cost. Anoto’s competitive edge is the
advantage to combine analog information capture and digital signatures on paper
with digital devices like tablets and smartphones in one system.

Within the OEM segments education, voting and screens we shipped 9,000 pens of
the 20,000 pen order to TStudy China in June. Product development with
Panasonic to finalize the first digital pen application for their new 20”
tablet is on schedule for mass production in October and the development of
voting applications for a global partner progressed according to plan.

Outlook
Following several quarters of weak sales we have, after the end of the quarter,
started looking into strategic options for the C Technologies business,
including a spin-off. The net effect on the operating expenses from a spin-off
would be approximately MSEK 10 per year.

Following the acquisitions of Develop IQ, Ubisys and 51% of the shares in
Destiny Wireless we will consolidate the operations in the UK and realize
synergies in sales, marketing, software development and support.

Anoto Group AB may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 08.30 on August 16, 2013.

A webcast of the Q2 report will be available from 09.00 on August 16 and a Q&A
session via audiocast will be held at 11.00 the same day. For more information,
see www.anoto.com/investors.

Calendar 2013/2014

Q3 report Nov 5, 2013
Q4 report Feb, 2014

For more information

Please contact:
Stein Revelsby, CEO
Phone: +46 (0)733 45 12 05
or
Dan Wahrenberg, CFO
Phone: +46 (0)733 45 10 19

Anoto Group AB (publ.), Corp. Id. No. 556532-3929
Box 4106,
SE-227 22 Lund, Sweden
Phone: +46 46 540 12 00
www.anoto.com

Anoto Quarterly Report EN Q2_13_final.pdf