1 January – March 2006 Niklas Flyborg May 2006 Observer AB.

1

January – March 2006Niklas Flyborg

May 2006

Observer AB

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Highlights

Positive market development and improved underlying results

Measures to strengthen operations in Nordics and UK

Expected savings of app SEK 130 million – restructuring costs of SEK 120 million

Write-down of goodwill in UK, Ireland, Norway and the Baltics

Strong development in important markets like US and Germany

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January – March 2006

Amounts in SEK million Jan-Mar 2006Revenue 493 (424)Organic growth 3% (0)EBIT excl write-down, goodwill 65 (51)Operating margin excl write-down, goodwill 13.2% (12.0)EBIT incl write-down, goodwill -404 (50.8)

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Market

Generally good market conditions Rising demand for value-added analyzed information Opportunity to gradually increase fixed revenue

North America Healthy demand for integrated services Strong market for broadcast monitoring

Nordics Continuing weak demand for non-digital monitoring services Positive development in the large client segment

Rest of Europe Positive development in Germany and Portugal Weak development in Monitoring in UK and Ireland

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The Regions

Organic Growth Operating Margin(excl. write-down, goodwill)

6

Changes and developments

Nordic: Functional organization Digitalization of the monitoring process Reduced number of production sites Co-ordination with group HQ

UK & Ireland Implement changes in business model Establish new sales process Further development of the digital production process Organizational and management changes Restructuring Ireland

Savings & costs Estimated savings of SEK 130 million Restructuring costs of SEK 120 million

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Organic Growth & Operating Margin

0%

2%

4%

6%

8%

10%

20

05

Q1

20

05

Q2

20

05

Q3

20

05

Q4

20

06

Q1

Gro

wth

5%

7%

9%

11%

13%

15%

Ma

rgin

Organic growth Operating margin

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Regions Q1 2006

Organic growth and EBIT margin by region (excl. write-down, goodwill)

Organic growth EBIT-margin Organic growth EBIT-margin

Northern Europe 0% -0,5% -4% 1,6%

Rest of Europe 1% 12,6% -4% 13,4%

North America 6% 25,2% 8% 23,5%

Group 3% 13,2% 0% 12,0%

Q1 2006 Q1 2005

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Operating cash flow / EBIT/EBITA

0%

20%

40%

60%

80%

100%

120%

2002 2003 2004 2005 Q1 2005 Q1 2006

EBITA/EBIT Operating cash flow

10

Write-down (M SEK)

UK 405

Ireland 41

Norway 23

Baltics 0.1

Total 469

Goodwill Q1 2006

SEK 2363 million

1101

223

751

287

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A changing market

Growing international sales

Growing demand for Evaluate services

Increasing share of revenue from portals and software

Outsourcing and off-shoring

Copy right agreements

Partnerships, joint ventures, acquisitions

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Focus 2006

Observer Nordic & UK

Integration, knowledge sharing and best practice

International offering

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