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January – September 2006

Observer AB

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Highlights January - September 2006

Revised strategy and new financial targets

Revenue up 11 % and EBIT* up 31 %

Strong growth in integrated services with value added analyzed information

Growth in international client segment

Restructurings in the Nordic & Baltic region proceed according to plan

On-going restructuring in the UK

Positive development in the US, Canada, Germany and Portugal

* Excluding write-down goodwill and restructuring expenses

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Market

Generally good market conditions

New media and channels create opportunities for service development

– Crises management through blog monitoring

– New channels, primarily within broadcast monitoring

Growing importance of reputation and brands drive demand

Rising demand for integrated services with value-added analyzed information

Growing demand within international client segment

Copy right issues change market prerequisites

Tough competition in all service areas

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January – September 2006

Amounts in SEK million January – September July - September

Revenue 1 429 (1 287) 455 (431)

Organic growth 4 % (1) 4 % (3)

EBIT* 172 (131) 57 (45)

Operating margin* 12 % (10) 13 % (10)

Operating cash flow 156 (89) 54 (13)

*excl. write-down goodwill and restructuring expenses

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Organic Growth & Operating Margin* (rolling 12 months)

-2%

0%

2%

4%

6%

8%

2004 Q

3

2004 Q

4

2005 Q

1

2005 Q

2

2005 Q

3

2005 Q

4

2006 Q

1

2006 Q

2

2006 Q

3

Gro

wth

5%

7%

9%

11%

13%

15%

Marg

in

Organic growth Operating margin

* Excluding write-down goodwill and restructuring expenses

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Operating Cash Flow and EBIT * (rolling 12 months)

0

50

100

150

200

250

2004 Q

3

2004 Q

4

2005 Q

1

2005 Q

2

2005 Q

3

2005 Q

4

2006 Q

1

2006 Q

2

2006 Q

3

OC

F

0

50

100

150

200

250

EB

IT

Operating Cash Flow EBIT *

* EBIT before write down of goodwill and restructuring costs Amounts in SEK million

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Balance Sheet September 30, 2006

Working capital: -76 Equity / Assets ratio: 52 % Debt / Equity ratio: 49 % Net debt: 797

Financial liabilities 961

Operating liabilities 429

Equity 1 640

Financial Assets, 164

Current receivables, 353

Other fixed assets, 281

Goodwill 2 303

Amounts in SEK million

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The Regions

North America Improved earnings Organic growth amounted to 8 % (Q3: 5 %) Healthy demand for integrated services Strong market for broadcast monitoring

Nordic & Baltic Improved but still weak earnings Organic growth amounted to 5 % (Q3: 7 %) Strong growth in evaluation services Positive development in the large client segment

Rest of Europe Lower earnings Organic growth amounted to 0 % (Q3: -1 %) Positive development in Germany and Portugal Weak development in UK and Ireland

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Changes and development

Revised strategy and new financial targets

Digitalization of production processes

Restructuring - estimated savings: SEK 130 million, costs: SEK 120 million

Expansion in geographic markets with high shareholder ROI

Centralization for increased efficiency and profitability:

Sourcing and quality management

International client processes

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Observer today

Strengths

Global market leader

Unparalleled offering – breadth and depth

Large client base

Prime position in North America – the leading media market in the world

Strong cash flow

Opportunities

Strong growth in international client segment

Strong position within our client segment

Effects from initiated cost reduction program

Increased synergies within and between regions

Expansions to new markets

Observer is well positioned to capitalize on a growing market.

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