AXIS Communications
A world of intelligent networks
First quarter 2001
Presented by
Peter Ragnarsson
Axis Group

Founded 1984

Listed on Stockholm stock exchange 2000
Axis AB
ThinServers
• Printservers
• Scan servers
• CDservers
• Camera servers
• Technology
Mobile Internet
• Access Points
• Mobile Access
server
Netch 59%
(incl new issue 2001)
nBand 11%
ThinServer products
 Print & Scan servers
 Global top 3 on network
print solutions
 Camera servers
 Leader in network camera
and video servers
 Storage servers
 Global n°1 market leader
for CD/DVD servers
 Technology
 network solution
platforms
Mobile Internet products
Carrier class total system
solutions for local mobile
networks based on Bluetooth
and WLAN (802.11)
 Access Points
 Mobile Access Server





Subscriber management
Security
Positioning
Network management
I/f to billing & customer care systems
Axis history - four distinct phases
Camera
Mobile Systems
Globally
ThinServers
Storage
USA
Print servers
LAN environm.
Asia
1992
3rd phase
2nd phase
IBM protocol
conversion
Europe
1984
4th phase
1st phase
1996
2000
Highlights q1 2001 - Sales
 Sales growth following strategic
investments
 Strategic partnerships
 Camera
 New distribution structure in Europe
 Market-oriented organization structure
Highlights q1 2001 - Sales
 Sales 176 Mkr (150)
 Growth 17%
 ThinServers: growth 23%
 Netch: negative growth -32%
Sales mix q1-2001
Office
Connectivity
OEM
18%
Mobile
Internet
1%
Technology
0%
Camera
30%
Other
1%
Networked
Office
43%
Netch
7%
ThinServer products - sales q1 2001
Sales
(proforma 2000)
 Total sales 162,5 Mkr (132,4)
 Growth total area 22,7%
 Strategic partnerships
 Camera
 New distribution structure in
Europe
 Market-oriented organization
structure
 Formation of Network Office and
Office Connectivity OEM completed
150
SEK m
 Strategic investment provides
returns
200
100
50
0
q1
Prev year
accum
Current year
Networked Office - sales q1 2001
Sales
(proforma 2000)
 Total sales 75,5 Mkr (81,3)
 Growth -7,1%
 Professional buyers
 Organizations >50 employees
 Decrease in sales due to
Storage products
75
SEK m
 New market-oriented
organization
100
50
25
0
q1
Prev year
accum
Current year
Office Connectivity OEM - sales q1 2001
Sales
(proforma 2000)
 Total sales 32,0 Mkr (12,2)
100
 Growth 161,4%
 First deliveries to Canon of
Bluetooth products (AXIS 5800
Mobile) in april 2001
SEK m
 Orientation towards
industrial customers
75
50
25
0
q1
Prev year
accum
Current year
Camera - sales q1 2001
Sales
(proforma 2000)
 Total sales 52,3 Mkr (29,8)
 Cooperation with
Honeywell in Taiwan
 Solution for remote monitoring
of telecom infrastructure
75
SEK m
 Growth 75,1%
100
50
25
0
q1
Prev year
accum
Current year
Mobile Internet products - sales q1 2001
Sales
(proforma 2000)
 Initial order from Canon
 Mobile Access Server
launched at CEBIT
7,5
SEK m
 First deliveries of Axis
9010 Bluetooth™ Access
Points in april 2001
10,0
5,0
2,5
0,0
q1
Prev year
accum
Current year
Netch - sales q1 2001
Sales
(proforma 2000)
 Netch is a supplier of
strategic Internet
services
 Difficult market
situation
75
SEK m
 Axis holds 59% of Netch
after the new issue (57,6
Mkr) in February 2001
 Peter Ragnarsson
Chairman of the Board in
Netch from Dec. 2000
100
50
25
0
q1
Prev year
accum
Current year
Highlights q1 2001 - EBIT
 Towards profitability as planned
 Axis (excl. Mobile Internet) up 31,5 Mkr
compared to q1-2000
 Heavy R&D investments
 Mobile Internet 24 Mkr
 R&D total 38 Mkr
Highlights q1 2001 - EBIT
 Extraordinary profit influence
 Q1-2001 impact -5 Mkr
 temporary production problems
 write-off accounts receivable
 Netch impacted by re-structuring costs
(announced in December 2000 report)
 total amount -31 Mkr
EBIT analysis q1-2001 (proforma q1-2000)
Jan-Mar 2001
Jan-Mar 2000
0,4
-30,8
-23,8
-14,2
-9,0
-9,2
-32,4
-54,2
-9,3
-2,3
Netch, structural
-31,0
--
TOTAL
-72,7
-56,5
ThinServer products
Mobile Internet
Corporate functions
SUB-TOTAL
Axis excl Netch
Netch
EBIT by quarter (proforma 2000)
EBIT by quarter
(proforma 2000)
 R&D overall
0
 38 Mkr in q1-2001
-10
 Investments in Mobile
Internet area
 Netch restructuring
costs
 10 Mkr in q4-2000
 31 Mkr in q1-2001
SEK m
 24 Mkr in q1-2001
-20
-30
-45
-37
-32
-41
-54
-9
-40
-18
-50
-60
-12
-21
-31
-2
-10
-70
-80
q1-2000 q2-2000 q3-2000 q4-2000 q1-2001
Axis
Netch
Netch-structural
ThinServer products - EBIT q1 2001
EBIT by quarter
(proforma 2000)
 Profitability in focus
 EBIT level improved
significantly
 temporary production
problems
 write-off accounts
receivable
1
0
0
-7
-5
-11
-10
SEK m
 Extraordinary profit
influence -5 Mkr
5
-15
-31
-20
-25
-30
-35
q1-2000 q2-2000 q3-2000 q4-2000 q1-2001
Mobile Internet products - EBIT q1 2001
EBIT by quarter
(proforma 2000)
 Intensive R&D
0
 Total investment in
q1-2001 24 Mkr (14)
 Technology and market
uncertainties
-10
-15
SEK m
 Investment level
reduced during 2001
-5
-14
-19
-21
-24
-34
-20
-25
-30
-35
-40
q1-2000 q2-2000 q3-2000 q4-2000 q1-2001
Netch - EBIT q1 2001
EBIT by quarter
(proforma 2000)
 Re-structuring
program
0
-5
 Re-structuring costs
-10
 q4 2000: 10 Mkr
 Focus on reaching
profitability in 2001
-9
-12
-18
-21
-15
SEK m
 q1 2001: 31 Mkr
-2
-20
-25
-10
-31
-30
-35
-40
-45
q1-2000 q2-2000 q3-2000 q4-2000 q1-2001
Highlights q1 2001 - Liquid funds
 Liquid funds 198,7 Mkr
 Net change in liquid funds +2,7 Mkr
Change in liquid funds - q1 2001
Jan – Mar 2001
Opening balance
196,0
Cash-flow from operations
-17,8
Investment in other fixed assets
-15,2
Financing activities
+35,7
Other
Closing balance
-198,7
Balance sheet - assets
Mar 2001
Dec 2000
168,1
160,1
52,5
60,1
Acc. Receivables
125,8
138,0
Other current rec.
50,2
73,2
Liquid funds
198,7
196,0
TOTAL ASSETS
595,3
627,4
Fixed assets
Inventories
Balance sheet - liabilities & equity
Mar 2001
Dec 2000
326,0
379,7
Minority
-5,8
12,1
Provisions
38,1
15,2
Long-term loans
66,1
51,4
Short-term liab.
170,9
169,0
TOTAL LIAB
& EQUITY
595,3
627,4
Equity
ThinServer market
ThinServer market
12 000
US $ (millions)
10 000
8 000
6 000
4 000
2 000
0
1999 2000 2001 2002 2003 2004
Source: IDC
IDC predicts sales
of ThinServers at
more than $11
billion by 2004
Market trends 2001
 Growth potential in
 Office Connectivity OEM
 Camera
 Market and technology delays in
wireless area
 Uncertainty regarding general economic
down-turn
Outlook 2001
 Priority on profitability and cash-flow
 Normalization of investment level
 Re-structuring of Netch
Axis 2001
 Global presence
 4th major investment phase completed
 Industry insider
 Profitable – and growing - base business
 Netch re-structured
 Proven track record
Axis financial goals
 Equity ratio normally not less than 50%
 Average annual sales growth of 30% in
the five years following the IPO (ending
2005)
 Pre-tax margin of 10-15% achieved
within three years from the IPO (2003)