-- Net sales in the period amounted to MSEK 37 (43).
-- The Gross margin for the period was 73% (66). Gross profit for the period
was MSEK 27 (28).
-- Earnings before depreciations and amortizations (EBITDA) for the period was
MSEK -8 (-17).
-- The Result after tax for the period was MSEK -13 (-21).
-- Earnings per share before and after dilution for the period was SEK -0.03
(-0.15).
-- Cash flow during the period was MSEK 0 (8). Cash flow from operating
activities before changes in working capital in the period was MSEK -9
(-17). Cash flow from financing activities during the period was MSEK 14
(31).

Comments from the CEO

INCREASING MOMENTUM IN HEALTHCARE

Revenues in Q1 were MSEK 37.0 compared to MSEK 33.3 in Q4. Gross margin was
72.7% compared to 61.0% in Q4. Operating expenses were on target MSEK 34.6 in
Q1 compared to MSEK 36.3 in Q4. EBITDA was MSEK -7.7 compared to MSEK -16.0 in
Q4. Cash flow for the quarter was MSEK 0.4, including MSEK 15 of net proceeds
from the private placement in March. Included in working capital at the end of
the quarter was a large inventory of 23,200 DP 201 digital pens for Business
solutions.

60% of total revenues and 76% of Business solutions revenues in Q1 came from
the UK of which a vast majority was business in healthcare. Thirty percent of
the MGBP 100 Nursing Technology Fund was released for the successful first
round of applications. NHS Trusts were granted funds to deploy technologies
including digital writing and other options to improve efficiency of their
nursing staff. The remaining seventy percent of the Nursing Technology Fund is
expected to be released towards the end of the year with a potential positive
impact on our business in Q4 this year. There is also an increasing business
momentum within healthcare outside the UK. Our partner Phoniro has developed
its Health Diary solution around Anoto’s digital writing technology. Phoniro
Health Diary is being used by hospitals in Sweden to monitor patients with
terminal illnesses such as cancer, chronic obstructive pulmonary disease and
severe heart conditions. Patients report their state on a daily basis, without
the need for a physician or nurse present, making it possible to take care of
the patients in their own homes.

Business solutions revenues outside healthcare were disappointing in Q1
although several projects are ongoing, especially within banking in Germany and
Turkey as well as within field service (oil & gas) in the US.

Our OEM business within education, consumer, voting and screens has taken
longer to establish and did not materialize in higher sales in Q1. We strongly
believe though that Anoto has a large future opportunity in these business
areas. Digital writing is one of four major human nature interface technologies
in a rapidly expanding world of ubiquitous computing, in addition to voice,
touch and gesture. The pen is and has always been a preferred communication
tool because of its accuracy, backed by rich libraries of symbols, letters and
languages embedded in human cultures. For a digital pen to be as useful as a
pencil or ballpoint pen, it needs to be as precise as those traditional tools
and possess the same touch and feel in addition to offering connectivity.


OUTLOOK

Total revenues per quarter need to increase approximately 30% compared to
revenues in Q1 for Anoto to break-even at the current OPEX level. In the UK we
are working to optimize resources between Anoto and 51% owned subsidiary
Destiny Wireless and to further capitalize on the success within healthcare.
Outside the UK we need to strengthen our presence, marketing and sales as well
as establish new partnerships.

We expect more business from OEM partners. Livescribe is positioning their
Livescribe 3 to be used with iPhones and iPads and is now selling online and in
Apple stores world-wide. TStudy has developed revolutionary interactive
learning applications and is now selling in China. Panasonic has started
selling 4K Toughpad with Touchpen to professional users within automotive,
healthcare, design and construction.

The development of applications for voting has taken longer than expected but
is now progressing well. We are constantly focusing on improving cash flow and
manage working capital, optimize resources and further reduce costs. We see a
potential in aligning interests and realizing synergies with partners
Livescribe in the US and Pen Generations in Korea.

For complete report, please see attached document.

A webcast of the Q4 report will be available from 09.00 on May 9 and a Q&A
session via audiocast will be held at 11.00 the same day.

For more information, see www.anoto.com\Investors.


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 May 9, 2014.

For more information, please contact:

Stein Revelsby, VD
Tel. +46 (0)733 45 12 05

eller

Dan Wahrenberg, CFO
Tel. +46 (0)733 45 10 19


Anoto Group AB (publ.) org. nr. 556532-3929
Box 4106
SE-227 22 Lund
Tel.: +46 46 540 12 00
http://www.anoto.com

Anoto Quarterly Report EN Q1_14.pdf