-- Net sales in the period was MSEK 138 (95) and Net sales for the quarter
were MSEK 55 (27).
-- The Gross margin for the period was 46% (67%) and Gross margin for the
quarter was 37% (65%) due to a combination of lower software sales in the
quarter in Enterprise Solutions and larger sales of hardware to our
partners in Korea within education. Gross profit for the period was MSEK 64
(64) and Gross profit for the quarter was MSEK 20 (17).
-- Earnings before depreciation and amortization (EBITDA) for the period was
MSEK -59 (-45) and EBITDA for the quarter was MSEK -25 (-26).
-- The Result after tax for the period was MSEK -68 (-56) and the Result after
tax for the quarter was MSEK -30 (-26).
-- Earnings per share before and after dilution for the period was SEK -0.08
(-0.13) and for the quarter SEK -0.03 (-0.06).
-- Cash flow during the period was MSEK 3 (-5) and Cash flow for the quarter
was MSEK 0 (-11). Cash flow from operating activities before changes in
working capital during the period was MSEK -58 (-49) and for the quarter
MSEK -23 (-23). Cash flow from financing activities during the period was
MSEK 92 (45) and for the quarter MSEK 64 (7).

Comments from the CEO

MULTI SURFACE PRECISION PEN INPUT

Revenues in the second quarter were 55 MSEK compared to 27 MSEK in Q3 2015.
Gross margin was 37% compared to 65% in Q3 2014. The lower gross margin was due
to a combination of lower software sales in the quarter in Enterprise Solutions
and larger sales of hardware to our partners in Korea within education. We
expect the gross margin to normalize around 50% in the coming quarters.
Operating expenses in the quarter were 48 MSEK compared to 35 MSEK in the same
quarter last year. As previously announced the higher operating expenses in
2015 are related to product development with HP,Ink., research and testing of
new micro dot thin film solutions for large displays and the development of
Anoto LiveTM Services. The combined result of these efforts is a broader
portfolio of products that we are now preparing to ship in the coming quarters
and a back-end infrastructure for the support of partners and resellers.

We are about to realize the vision of a universal platform to enable precision
pen input on paper, displays and walls, -from small sticky notes to 24 foot
size walls as well as small to ultra-large displays. The advantages of having a
single pen technology that works on multiple surfaces are many. The ability to
combine paper, displays and walls opens for totally new user experiences, more
flexibility and creative freedom, as well as better control of content and
data. For manufacturers it means lower overall manufacturing costs and
synergies between devices but most importantly better pen performance.

We expanded the management team in Q3 with the hiring of senior managers within
product management, marketing and sales and to get a stronger presence in Los
Angeles and the San Francisco Bay area. Key priorities in the quarter was to
work on the overall positioning of a broader product portfolio that now
includes products and applications for digital signatures and document data
capture, solutions for professional collaboration, brainstorming and project
management, precision pen input on small and large displays, as well as hybrid
solutions for the combination of digital pens, paper and mobile devices.

During the quarter we initiated contact with new potential OEM customers and
signed up new distributors and resellers in the US, Germany and France. We
tested out a range of new large displays and planned for segmentation of the
portfolio into application areas; professional collaboration solutions,
architects, design and creatives.

We finalized the development of Anoto LiveTM Pen 2 Professional and prepared
for mass production of 30,000 pens for the delivery to a large financial
services company in Japan in Q4.

Our increased working capital need was financed through a 40 MSEK private
placement of shares in the third quarter and we also closed the acquisition of
XMS Penvision, an innovative Swedish software company specializing in digital
writing solutions. The acquisition of XMS Penvision gives us a larger portion
of the value chain, flexibility in pricing and a product suitable for sale
through larger resellers, as well as a highly competent team that complements
our own in-house software development.

OUTLOOK

After a long period of negotiations in parallel with product and business
development we finally signed a Technology Licensing Agreement with HP, Inc. on
November 5th. We are very excited about this new partnership and believe HP is
the ideal partner to help realize our vision about a universal digital writing
platform that embraces user cases across all industries. The agreement contains
certain exclusivity rights for HP within product segments for Workstations, a
product segment where HP has a dominant market share. The exclusivity is
subject to certain conditions including a minimum purchase of products from
Anoto over a 4 year period. It is difficult to estimate the future revenue
deriving from the agreement, but we expect the agreement to have a significant
positive impact on Anoto`s business in the coming years.

On November 5th Anoto signed a share purchase agreement to acquire Livescribe
Inc., Anoto partner since 2007, with it’s headquarter in the San Francisco Bay
area. The purchase price shall be paid in cash and is based upon an enterprise
value of 15 MUSD equal to estimated sales for 2015. On closing, which is
expected to take place on November 30, Livescribe will be debt free. The
acquisition is another step in consolidating the Anoto ecosystem and to realize
synergies in hardware and software development, supply chain and operations, as
well as to give Anoto access to additional market channels for online sales and
retail distribution. We are working on a new range of products to be launched
in Livescribe sales channels in 2016. Livescribe employs 45 full time employees
and contractors, and offers the leading personal mobile companion and
application to integrate handwriting into mobile devices. Livescribe allows
customers to continue using pen and paper to take both structured and
unstructured notes yet instantly make them useful with their favorite
applications as they digitize in real-time.

Based upon a strong order back log with our partners in Korea and China and
large publishing companies within education, as well as the enterprise order in
Japan and the planned delivery of 29,000 pens to a large financial services
company in Japan we expect continued strong revenue growth in Q4. We expect the
strong growth to continue in 2016 with the expected commercial launch of
products with HP, the commercial launch of large displays, the addition of new
distributors and resellers for We-Inspire, partnering with The Foundry as well
as the acquisition of Livescribe. We expect gross margin to normalize around
50%.


Stein Revelsby
CEO, Anoto Group


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 07.20 on November 6, 2015.



A webcast of the Q3 report will be available from 9.00am on November 6, and a
Q&A session via audiocast will be held at 11.00am the same day.
For more information, see www.anoto.com/investors.

Calendar 2015

Q4 report February 2016


For more information

Please contact:

Stein Revelsby, CEO
Phone: +46 (0)733 45 12 05

Email: [email protected]

Anoto Group AB (publ.), Corp. Id. No. 556532-3929
Mobilvägen 10,
SE-223 62 Lund
Phone: +46 46 540 12 00
www.anoto.com


About Anoto Group:
Anoto Group AB is a global leader in digital writing solutions, which enables
fast and reliable transmission of handwriting into a digital format. Anoto
operates worldwide through a global partner network that delivers user-friendly
digital writing solutions for efficient capture, transmission, distribution and
storage of data. Anoto is currently in use across multiple business segments,
e.g. healthcare, banking and finance, transportation and logistics and
education. The Anoto Group has around 100 employees and is headquartered in
Lund (Sweden). The company also has offices in Norrköping (Sweden), Basingstoke
and Wetherby (UK), Boston (US), Los Angeles (US) and Tokyo (Japan). The Anoto
share is traded on the Small Cap list of NASDAQ OMX Stockholm under the ticker
ANOT.

For more information, please visit: www.anoto.com.

Follow Anoto on Twitter at: @Anoto

Anoto Quarterly Report EN Q3_15_FINAL.pdf