Sectra — Interim / Quarterly Report 2011

Dec 7, 2010

Sectra's interim report for the first six months 2010/2011:

Sectra continues to double sales of mammography systems

For the first six months, IT and medical technology company Sectra reported a 15.8% increase in net sales to SEK 453.6 million (391.7). Operating profit totaled SEK 7.6 million (16.5), corresponding to an operating margin of 1.7% (4.2). Profit after net financial items was SEK 2.4 million (4.4).

In the second quarter, the Sectra Group's net sales rose 27.3% to SEK 246.9 million (193.9), which was primarily related to Sectra's largest markets, North America and Scandinavia. Operating profit increased 15.6% to SEK 7.4 million (6.4), corresponding to an operating margin of 3.0% (3.3). Profit after net financial items was SEK 0.5 million (0.9), which corresponds to a profit margin of 0.2% (0.5).

"Our focus on increasing sales volumes in markets in which we already hold a strong position has begun to generate results. We improved sales and operating profit in the second quarter compared with the year-earlier period," says Jan-Olof Brüer, President and CEO of Sectra AB.

One of Sectra's prioritized activities is to increase volumes in the mammography product division. Deliveries of the Sectra MicroDose Mammography system continued to rise, and the number of systems sold doubled for the second consecutive quarter compared with the year-earlier period.

After the close of the quarter, Sectra launched several new products, including a globally unique visualization table at the world's largest radiology trade fair, RSNA, in Chicago, Illinois. The visualization table has multiple scope of use; emergency care of multi-trauma patients, medical training, clinical conferences and virtual autopsies. The product was developed from concept to finished product in less than two years in close cooperation with researchers in Sweden at the University of Linköping, the Center for Medical Image Science and Visualization (CMIV), Norrköping Visualization Center C, and The Interactive Institute.

"We have always worked closely with researchers and customers, which has provided us with extensive experience in the commercial development of new, innovative technology that makes healthcare more efficient and improves the quality of care. The new visualization table is an example of how we provide new technology to customers in an international market in record time," says Jan-Olof Brüer.

The information in this press release is such that Sectra AB (publ) is obligated to disclose in compliance with the Swedish Securities and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was submitted for publication on December 7, 2010, at 8:30 am (CET).

For further information, please contact: Jan-Olof Brüer, President and CEO of Sectra AB, Tel: +46 (0)13-23 52 09

About the Sectra Group

Sectra was founded in 1978 and conducts successful development and sales of high-technology products in the expansive niche segments of medical systems and secure communication systems. Sectra has offices in 12 countries and sells its products through partners worldwide. The head office is in Linköping, Sweden, and the company developed from research at Linköping University. Sales for the 2009/2010 full year amounted to SEK 848 million. Sectra is listed on the NASDAQ OMX Stockholm AB exchange. For more information about Sectra, visit our website at http://www.sectra.com.

Sectra AB (publ)

Teknikringen 20 SE 583 30 Linköping Tel: +46 (0)13 23 52 00 Fax: +46 (0)13 21 21 85 info@sectra.se www.sectra.se

Momsreg.nr SE556064830401

Interim report Sectra AB (publ) for May– October 2010

The figures for the year-earlier period are shown in parentheses.

First six months, May – October 2010

• Order bookings amounted to SEK 360.2 million (428.8).
• Net sales increased 15.8% to SEK 453.6 million (391.7).
• Operating profit amounted to SEK 7.6 million (16.5), corresponding to an operating margin of 1.7% (4.2).
• Profit after net financial items totaled SEK 2.4 million (4.4), corresponding to a profit margin of 0.5% (1.1).
• Profit after tax amounted to SEK 1.9 million (5.2).
• Earnings per share before dilution were SEK 0.05 (0.14).

Second quarter, August – October 2010

• Order bookings amounted to SEK 154.2 million (276.7).
• Net sales increased 27.3% to SEK 246.9 million (193.9).
• Operating profit rose 15.6% to SEK 7.4 million (6.4), corresponding to an operating margin of 3.0% (3.3).
• Profit after net financial items totaled SEK 0.5 million (0.9), corresponding to a profit margin of 0.2% (0.5).
• Profit after tax was SEK 0.2 million (2.7).
• Earnings per share before dilution were SEK 0.00 (0.07).

Events during the second quarter

• The Board established new levels for the Group's profit and growth targets, which are as follows:
• To achieve an EBIT margin of at least 15%. (Up from 10%)
• To grow an average of 15% annually during a seven-year period. (Lowered from 30%).
• Sectra's mammography product division continued to increase its volumes of the Sectra MicroDose Mammography system and delivered 21 units, compared with nine in the yearearlier period.
• Increased order bookings for Sectra's medical products from customers in the UK, including Holly House Hospital, which, using Sectra's products, became the first hospital in the UK to combine mammography and the analysis of bone health in the same examination; an initiative that is deemed to reduce the number of fractures caused by osteoporosis.
• Under a four-year framework agreement with the European Council in Brussels, Sectra is being entrusted with the delivery of the product for secure telephony that is deployed in all EU countries. This is the result of the European Council's procurement process, in which the Sectra Tiger XS was selected.

Events after the end of the period

• Sectra launched a new model of the Sectra Tiger 7401 mobile telephone for secure communications.
• Sectra launched the Sectra Visualization Table, which enables a medical team to work with three-dimensional radiology images in an entirely new approach. The product has multiple scope of use; emergency care of multi-trauma patients, medical training, clinical conferences and virtual autopsies. The visualization table was developed in close cooperation with researchers in Sweden at the University of Linköping, the Center for Medical Image Science and Visualization (CMIV), Norrköping Visualization Center C, and The Interactive Institute.

THE GROUP'S ORDER BOOKINGS, SALES AND EARNINGS

First six months 2010/2011, May - October 2010

The Group's order bookings for the period amounted to SEK 360.2 million (428.8). Sectra's operations in Australia, the UK and North America reported increased order bookings for the first six months compared with the year-earlier period. Sectra has a number of major customers that enter into long-term agreements with the company. Order bookings vary considerably between quarters as a result of major individual orders for, as an example, medical IT projects or the development of crypto systems. The comparative year-earlier period included a SEK 100 million order from the Norwegian care provider, Curato.

The Group's net sales for the period rose 15.8% to SEK 453.6 million (391.7). Both of Sectra's business areas, Secure communication systems and Medical systems, reported sales growth.

Operating profit for the period was SEK 7.6 million (16.5), corresponding to an operating margin of 1.7% (4.2). Operating profit was charged with higher depreciation on capitalized development expenditures and Group-financed customer projects that have been completed and transitioned to the operational phase. During a transition period, earnings will also be impacted by the major efforts under way to upgrade existing installations to Sectra's nextgeneration PACS, which is an entirely new platform for the management of medical images.

Profit after financial items amounted to SEK 2.4 million (4.4), which corresponded to a profit margin of 0.5% (1.1). Currency fluctuations had an adverse impact of SEK 5.5 million (neg: 9.3) on the Group's net financial items, primarily as a result of the SEK strengthening against the USD and the GBP.

Profit after tax was SEK 1.9 million (5.2). Earnings per share amounted to SEK 0.05 (0.14).

Second quarter 2010/2011, August - October 2010

The Group's order bookings for the quarter amounted to SEK 154.2 million (276.7). Order bookings declined in the European market, while order bookings from North American customers rose by 48.6% to SEK 72.8 million (49.2). Sectra's order bookings can vary considerably between quarters as a result of major individual orders, such as the SEK 100 million order from the Norwegian care provider, Curato, in the comparative year-earlier quarter.

The Group's net sales for the quarter rose 27.3% to SEK 246.9 million (193.9). Both of Sectra's business areas reported sales growth for the quarter compared with the year-earlier period. The increase was primarily related to Sectra's largest markets, North America and Scandinavia.

Operating profit for the quarter increased 15.6% to SEK 7.4 million (6.4), corresponding to an operating margin of 3.0% (3.3). The Secure communications systems business area and Other operations contributed to the improved profit compared with the year-earlier period.

Profit after net financial items was SEK 0.5 million (0.9), which corresponded to a profit margin of 0.2% (0.5). Currency fluctuations had an adverse impact of SEK 7.3 million (neg: 4.9) on the Group's net financial items, primarily as a result of the SEK strengthening against the USD and the GBP.

Profit after tax was SEK 0.2 million (2.7). Earnings per share amounted to SEK 0.00 (0.07).

Seasonal variations

Sectra is affected by seasonal variations, which means that most invoicing and earnings are traditionally generated during the fiscal year's third and fourth quarters. Variations in order volumes, in terms of individual quarters, can be significant, since Sectra has a number of major customers that enter into extensive, long-term agreements with the company, pertaining to medical IT projects or the development of crypto systems, for example.

Diagram

Bars - per quarter Line – 12-months rolling

Comments

In recent years, operating profit has been affected by an extensive build-out of the proprietary international sales and support organization, and the development and launch of the Sectra MicroDose Mammography system. The mammography investment entails an increase in production operations. The current business mix, with a higher share of hardware-product deliveries, generated a lower operating margin than the previous mix, which to higher extent was dominated by IT-system deliveries.

SEGMENT REPORTING

Net sales by business segment
(SEK M)	3 months	3 months	6 months	6 months	12 months	Full-year
	Aug - Oct	Aug – Oct	May - Oct	May - Oct	Nov 2009-	May - April
	2010	2009	2010	2009	Oct 2010	2009/2010
Medical Systems	214.7	192.1	409.7	366.4	853.4	810.1
Secure Communication
Systems	32.5	26.3	54.9	43.5	111.0	99.6
Other operations 1)	15.2	18.5	31.5	47.6	65.2	81.5
Group eliminations	-15.5	-43.0	-42.5	-65.8	-119.4	-142.8
Total	246.9	193.9	453.6	391.7	910.2	848.4

Operating profit/loss by business segment
(SEK M)	3 months	3 months	6 months	6 months	12 months	Full-year
	Aug - Oct	Aug – Oct	May - Oct	May - Oct	Nov 2009-	May - April
	2010	2009	2010	2009	Oct 2010	2009/2010
Medical Systems	1.8	5.2	0.6	9.7	17.4	26.5
Secure Communication
Systems	5.0	3.8	8.7	6.8	17.0	15.1
Other operations 1)	0.1	-3.7	-2.5	-0.9	-5.3	-3.7
Group eliminations	0.5	1.1	0.8	0.9	-3.8	-3.7
Total	7.4	6.4	7.6	16.5	25.3	34.2

Net sales by geographic market

(SEK M)	3 months	3 months	6 months	6 months	12 months	Full-year
	Aug - Oct	Aug – Oct	May - Oct	May - Oct	Nov 2009-	May - April
	2010	2009	2010	2009	Oct 2010	2009/2010
Sweden	79.4	67.9	146.7	123.0	287.3	263.6
Rest of Europe	95.7	69.4	153.7	149.7	329.4	325.5
North America	57.6	53.3	112.5	107.3	229.8	224.6
Rest of world	14.2	3.3	40.7	11.7	63.7	34.7
Total	246.9	193.9	453.6	391.7	910.2	848.4

1) Other operations refer to Sectra's financing activities regarding customer projects and asset management, and to the Parent Company's internal debiting of Group-wide costs.

Medical systems

Market

A total of 52 million radiology examinations are conducted annually in Sectra's systems, which makes Sectra one of the world's leading suppliers of systems for the processing of digital radiology images. The market for medical systems continued to grow as a result of the substantial need for systems that enhance care efficiency. Sectra's largest markets for Medical systems are Scandinavia and the US. A significant portion of the business area's revenues derive from commitments to existing customers. Sectra focuses on further growth and capturing market shares in the markets in which the business area has existing customers and partners.

The markets in which the Medical systems business area experienced its greatest sales achievements during the quarter were North America and the UK. New customers include the Holly House Hospital, which, using Sectra's products, became the first hospital in the UK to combine mammography and the analysis of bone health in the same examination. If people in the risk zone for osteoporosis are identified at an early stage, inexpensive and effective approaches to preventing fractures are currently available. This is accomplished through lifestyle changes and medication. Reducing the number of fractures due to osteoporosis could result in significant savings for care costs for society. Combined, these are the key reasons that mammography clinics in Europe are now becoming interested in Sectra's Internet service for the analysis of bone density.

One of Sectra's prioritized activities is to increase volumes in the mammography product division. Deliveries of the Sectra MicroDose Mammography system doubled for the second consecutive quarter compared with the year-earlier period. Deliveries have been sent to customers in Australia, France, Greece, Italy, the UK and Turkey. In terms of Sectra's ability to sell Sectra MicroDose in the US, the Food and Drug Administration (FDA) reclassified the approval process for digital mammography equipment in November, resulting in a simplified process. Sectra believes this reclassification to have reduced the risk of not securing FDA approval for Sectra MicroDose in the current fiscal year.

Sales and earnings for the period, May – October 2010

Medical systems' net sales for the first six months increased 11.8% to SEK 409.7 million (366.4). Revenues from Medical IT products and services rose 4.5% to SEK 341.8 million (327.1), or 83% of Medical systems' sales. The Mammography product division accounted for SEK 67.9 million (39.3) of the business area's sales, up 72.8% year-on-year. A total of 42 (19) Sectra MicroDose Mammography units were delivered in the first six months, up 121% compared with the year-earlier period.

Operating profit for the period totaled SEK 0.6 million (9.7), corresponding to an operating margin or 0.1% (2.6). Operating profit was charged with higher depreciation on capitalized development expenditures and Group-financed customer projects that have been completed and transitioned to the operational phase. During a transitional period, earnings will also be impacted by the major efforts under way to upgrade existing installations to Sectra's nextgeneration PACS, which is an entirely new platform for the processing of medical images. On completion of this generational shift, which is expected to require a further 18 months, future updates will be faster and more cost-efficient. The Mammography product division posted an operating loss of SEK 25.9 million (loss: 40.7). Adjusted for the loss in the Mammography division, the business area's operating profit was SEK 26.5 million (50.4), corresponding to an operating margin of 7.8% (15.4).

Sales and earnings for the second quarter, August – October 2010

Medical systems' net sales for the second quarter increased 11.8% to SEK 214.7 million (192.1), compared with the year-earlier period. Revenues from Medical IT products and services rose 2.7% to SEK 180.6 million (175.9). The Mammography product division accounted for SEK 34.1 million (16.2) of the business area's sales, up 110.5% year-on-year. A

total of 21 (9) Sectra MicroDose Mammography units were delivered in the second quarter, up 133% compared with the year-earlier period.

Operating profit for the second quarter was SEK 1.8 million (5.2), corresponding to an operating margin or 0.8% (2.7). Operating profit was charged with higher depreciation on capitalized development expenditures and on Group-financed customer projects that have been completed and transitioned to the operational phase. During a transitional period, earnings will also be impacted by the major efforts under way to upgrade existing installations to Sectra's next generation PACS. The Mammography product division posted an operating loss of SEK 17.6 million (loss:23.9). Adjusted for the loss in the Mammography division, the business area' operating profit was SEK 19.4 million (29.1), which corresponded to an operating margin of 10.7% (16.5).

Secure communication systems

Market

Sectra's crypto products are deployed by decision makers, government officials and armed forces in 17 European countries to protect telephone calls from eavesdropping. This makes Sectra the leading supplier of encrypted telephony to European authorities and defense departments. Sweden and the Netherlands comprise Sectra's largest markets for crypto products.

Growth in the market for secure communication systems is driven by the fact that it is easier than ever to eavesdrop on telephone calls, which has prompted an increasing number of authorities to opt to protect their telephony. This includes the European Council in Brussels, which signed a four-year framework agreement with Sectra during the quarter for Tiger XS deliveries. As a result of increased partnerships between authorities in European countries, customers require products that support cross-border partnerships. Sectra offers products that are approved by both the EU and NATO.

Sectra continuously improves its products based on customers' needs. The increased use of IP telephony and increasingly computer-based mobile phones, known as smartphones, leads to requirements for new types of security solutions. To meet this demand, the company launched a product that supports mobile IP telephony support and comprises a new security solution called Panthon; Sectra's new voice crypto for smartphones, providing protection against such threats as trojans.

Sales and earnings for the first six months, May – October 2010

Secure communications systems reported continued solid growth and favorable earnings as a result of increased sales of Tiger products. Net sales for the first six months rose 26.2% to SEK 54.9 million (43.5), compared with the year-earlier period. Operating profit was up 27.9% to SEK 8.7 million (6.8), corresponding to an operating margin of 15.9% (15.6).

Sales and earnings for the second quarter, August – October 2010

Net sales for the second quarter rose 23.6% to SEK 32.5 million (26.3), compared with the year-earlier period. Operating profit increased 31.6% to SEK 5.0 million (3.8), corresponding to an operating margin of 15.4% (14.5).

Other operations

Other operations pertain to Sectra's operations for the financing of customer projects, asset management, and the Parent Company's functions for Group finances and stock-exchange, share and investor relations activities.

Sales and earnings for the period, May – October 2010

The Group's financing activities for customer projects within medical IT did not account for net sales to the same extent as the comparative year-earlier period and Sectra's net sales from Other operations for the first six months amounted to SEK 31.5 million (47.6). Other operations posted a loss for the period of SEK 2.5 million (loss:0.9).

Sales and earnings for the second quarter, August – October 2010

Net sales from Other operations amounted to SEK 15.2 million (18.5) for the second quarter. Operating profit for the quarter was SEK 0.1 million (loss: 3.7), corresponding to an operating margin of 0.7% (neg: 20.0).

REVISED FINANCIAL TARGETS

The Board regularly addresses issues concerning the company's targets, strategies, structure and focus areas. As a result of the changes that have occurred in Sectra's operations and in the niche markets in which the company operates, the Board has revised the Sectra Group's long-term profit and growth targets. The new financial target levels are:

• To achieve an EBIT margin of not less than 15%. (Up from 10%)
• To grow an average of 15% annually during a seven-year period. (Lowered from 30%).
• To maintain an equity/assets ratio of at least 30%. (Unchanged)

The new profitability targets are on a par with the profit levels in sectors in which Sectra is active. The growth target is three times as high as the underlying average market growth in the niches in which Sectra operates. Based on the expected market development, Sectra's Board deems that the company is favorably positioned to achieve the new target levels over a threeyear horizon.

OTHER INFORMATION

Financial position

Consolidated cash flow from operations after changes in working capital amounted to a negative SEK 20.4 million (neg: 52.5). Total cash flow for the quarter was a negative SEK 41.6 million (neg: 48.5). After adjustment for exchange-rate differences in cash and cash equivalents, consolidated cash and cash equivalents amounted to SEK 155.7 million (151.5).

The equity/assets ratio at the close of the quarter was 63.6% (65.6) and liquidity amounted to a multiple of 2.3 (2.4).

At the end of the period, the Group's interest-bearing liabilities amounted to SEK 20.4 million (36.0) and pertained to convertible debentures.

Investments

Group investments during the first six months totaled SEK 24.3 million (29.7), of which SEK 9.6 million (14.8) pertained to the second quarter. Investments for the quarter were primarily attributable to customer projects in the Group's financing activities and to capitalized development expenditures.

Investments in customer projects during the period were SEK 9.7 million (12.5), of which a negative SEK 0.5 million (4.1) pertained to the second quarter. At the close of the quarter, the Group's investments in customer projects totaled SEK 57.4 million (33.4).

During the period, capitalized work for own use amounted to SEK 9.7 million (10.7), of which SEK 5.3 million (6.0) pertained to the second quarter. At the end of the period, capitalized development expenditures totaled SEK 181.6 million (196.6).

Depreciation/amortization during the period amounted to SEK 30.1 million (22.8), of which SEK 16.1 million (12.5) pertained to the second quarter. The increase was due to depreciation of customer projects that were initiated and on capitalized development projects that have been completed and transitioned to the delivery phase.

Employees

The number of full-time employees at Sectra decreased by 8 during the second quarter. At the close of the period, there were a total of 604 (589) employees.

The share

Sectra's share capital at the end of the period amounted to SEK 36,842,088. At future full conversion and an exercise of the implemented incentive programs, the number of shares will increase by a maximum of 791,400, corresponding to 2.1% of the share capital and 1.3% of the voting rights. After dilution, the share capital will amount to SEK 37,633,488.

Incentive programs

The 2010 Annual General Meeting resolved on the issue of convertibles to Group employees and external Board members. The convertible loans can be subscribed for during the period September 27 – October 8, 2010. The conversion price was SEK 45.80, which corresponded to 135% of the average volume weighted mean of the listed price for the company's share on NASDAQ OMX Stockholm for each trading day during the period August 3 – August 18, 2010. The conversion to Series B shares may occur during May 26 – 30, 2014. In total, Group employees have subscribed for 133,000 convertibles, corresponding to 0.4% of the share capital and 0.2% of the voting rights.

During the quarter, pursuant to the Annual General Meeting's resolution, the Board also issued additional employee stock options for the Group's employees in the US. If these employee stock options are fully exercised, employees will acquire 100,000 Series B shares in the company corresponding to approximately 0.3% of the share capital and 0.2% of the voting rights. Options can be exercised three years from the date on which they were issued and have a conversion price of SEK 45.80.

Nomination Committee

The 2010 Annual General Meeting resolved to appoint a Nomination Committee consisting of four members – one of the members to be the Chairman of the Board of Directors and three members to be representatives of the Company's major shareholders. In accordance with the Annual General Meeting's decision, a Nomination Committee was appointed following consultations with the Company's major shareholders. The Nomination Committee includes the following members:

• Carl-Erik Ridderstråle, Board Chairman (convener)
• Jan-Olof Brüer, CEO of Sectra AB and representative of the Company's largest shareholder (Chairman)
• Gündor Rentsch, representing Frithjof Qvigstad
• Thomas Ehlin, representing Nordea

The Nomination Committee will prepare and present the following proposals to the Annual General Meeting:

• o Election of and fees for the Chairman of the Board and other Board members
• o Election of and fees for the auditor and deputy auditor (where applicable)
• o Decisions regarding principles for the appointment of the Nomination Committee
• o Chairman of the Meeting

Shareholders who wish to submit proposals can do so in writing to Jan-Olof Brüer by e-mail jan-olof.bruer@sectra.com or by traditional mail to Sectra AB, Teknikringen 20, SE-583 30 Linköping, Sweden.

Risks and uncertainties

Through its operations, Sectra is exposed to such business risks as dependence on major customers and partners, the effect of the exchange rate of the USD and EUR on pricing in the markets in which the Group is active, and property and liability risks. In addition, Sectra is exposed to various types of financial risks such as currency, interest, loan and liquidity risks.

A detailed description of the risks and uncertainties, as well as Sectra's strategies and tactics for minimizing risk exposure and limiting adverse effects, is provided in the Group's Annual

Report for the 2009/2010 fiscal year, Note 30, page 52. No significant events have occurred that would alter the conditions reported therein.

Outlook

Sectra has a strong technical platform. The products and system solutions that Sectra develops are aimed at markets with high growth potential. The Company's strong position in the home market provides a solid platform for ongoing international expansion.

PARENT COMPANY

The Parent Company Sectra AB

The Parent Company includes the head office's functions for Group finances, as well as stockexchange, share and investor relations activities.

Net sales in the Parent Company Sectra AB for the first six months amounted to SEK 10.9 million (13.0). Profit after net financial items was SEK 1.6 million (2.5).

In the second quarter, net sales in the Parent Company totaled SEK 5.1 million (6.4). Profit after net financial items was SEK 1.4 million (1.1).

The Parent Company's income statement and balance sheet are reported on page 13.

Consolidated Income Statements

	3 months	3 months	6 months	6 months	12 months	Full-year
SEK thousands	Aug 2010	Aug 2009	May 2010	May 2009	Nov 2009	May - Apr
	- Oct 2010	- Oct 2009	- Oct 2010	- Oct 2009	– Oct 2010	2009/2010
Net sales	246,904	193,899	453,570	391,691	910,236	848,357
Capitalized work for own use	5,337	5,996	9,696	10,697	15,148	16,149
Operating expenses	-228,746	-180,924	-425,531	-363,118	-842,963	-780,550
Depreciation and amortization	-16,054	-12,529	-30,123	-22,765	-57,116	-49,758
Operating profit after depreciation	7,441	6,442	7,612	16,505	25,305	34,198
and amortization
Net financial items	-6,945	-5,515	-5,247	-12,111	-3,796	-10,660
Profit after net financial items	496	927	2,365	4,394	21,509	23,538
Taxes	-345	1,732	-432	831	-7,594	-6,331
Earnings for the period	151	2,659	1,933	5,225	13,915	17,207
Of which, attributable to:
Parent Company owners	151	2,659	1,933	5,225	13,915	17,207
Minority interest	0	0	0	0	0	0
Earnings per share
Before dilution, SEK	0.00	0.07	0.05	0.14	0.38	0.47
After dilution, SEK	0.00	0.07	0.05	0.14	0.37	0.46
No. of shares
Before dilution	36,842,088	36,842,088	36,842,088	36,842,088	36,842,088	36,842,088
After dilution 1)	37,633,488	37,770,988	37,633,488	37,770,988	37,633,488	37,400,488
Average, before dilution	36,842,088	36,842,088	36,842,088	36,842,088	36,842,088	36,842,088
Average, after dilution 1)	37,478,155	37,458,721	37,439,321	37,339,421	37,574,280	37,544,946

1) Dilution is based on the convertible debentures programs issued in 2009/2010 (368,400) and 2010/2011 (133,000) and on employee stock options issued in 2008/2009 (90,000), 2009/2010 (100,000) and 2010/2011 (100,000).

Consolidated Statement of Comprehensive Income

	3 months	3 months	6 months	6 months	12 months	Full-year
SEK thousands	Aug 2010	Aug 2009	May 2010	May 2009	Nov 2009	May - Apr
	- Oct 2010	- Oct 2009	- Oct 2010	- Oct 2009	– Oct 2010	2009/2010
Earnings for the period	151	2,659	1,933	5,225	-13,915	17,207
Other comprehensive income Change in translation differences from translating foreign subsidiaries	-9,149	-5,387	-10,154	-12,618	-13,780	-16,244
Total other comprehensive income	-9,149	-5,387	-10,154	-12,618	-13,780	-16,244
for the period
Total comprehensive income for the period	-8,998	-2,728	-8,221	-7,392	135	963

Consolidated Balance Sheets

SEK thousands	Oct. 31,	Oct. 31,	Apr 30,
	2010	2009	2010
Assets
Intangible assets	202,914	221,825	211,079
Tangible assets	71,323	51,791	72,780
Financial assets	5,018	4,458	3,931
Total fixed assets	279,255	278,074	287,790
Other current assets	501,057	473,967	487,861
Cash and cash equivalents	155,704	151,504	193,024
Total current assets	656,761	625,471	680,885
Total assets	936,016	903,545	968,675
Equity and liabilities
Equity (including earnings for the period)	595,534	592,621	602,568
Provisions	6,189	6,234	6,354
Deferred tax liabilities	15,872	20,953	16,141
Long-term liabilities	20,429	13,729	17,315
Current liabilities	297,992	270,008	326,297
Total equity and liabilities	936,016	903,545	968,675

No changes have occurred in pledged assets and contingent liabilities since the 2009/2010 Annual Report.

Consolidated Statement of Changes in Equity

	6 months	6 months	Full-year
SEK thousands	May 2010	May 2009	May - Apr
	– Oct 2010	– Oct 2009	2009/2010
Equity at start of period	602,568	599,114	599,114
Comprehensive income for the period	-8,221	-7,392	963
Tax effect due to changed tax rate	0	0	0
Share-related payments	1,187	899	2,491
Dividend paid	0	0	0
Equity at the end of the period	595,534	592,621	602,568

Consolidated Cash-flow Statements

	6 months	6 months	Full-year
SEK thousands	May 2010	May 2009	May - Apr
	– Oct 2010	– Oct 2009	2009/2010
Cash flow from operations before changes in working capital	16,577	5,885	37,631
Cash flow from operations after changes in working capital	-20,403	-52,516	47,780
Investing activities	-24,316	-29,731	-66,807
Financing activities	3,130	33,700	13,196
Change in cash and cash equivalents	-41,589	-48,547	-5,831
Cash and cash equivalents, opening balance	193,024	184,282	184,282
Exchange-rate difference in cash and cash equivalents	4,268	15,769	14,573
Cash and cash equivalents, closing balance	155,703	151,504	193,024

Key Figures

	6 months	6 months	12 months	Full-year
	Oct 31	Oct 31	Oct	Apr.
	2010	2009	312010	302010
Order bookings, SEK M	360.2	428.8	792.7	861.3
Equity/assets ratio, %	63.6	65.6	63.6	62.2
Liquidity, multiple	2.3	2.4	2.3	2.1
Operating margin, %	1.7	4.2	2.8	4.0
Profit margin, %	0.5	1.1	2.4	2.8
Return on equity, %	0.3	0.5	2.3	2.9
Return on capital employed, %	0.5	0.9	3.7	3.9
Return on total capital, %	0.3	0.6	2.5	2.5
Value added, SEK M	236.0	232.9	481.6	478.5
Average number of employees	599	579	591	584
Equity per share, SEK	16.16	16.09	16.16	16.36
Equity per share after full dilution, SEK	15.82	15.69	15.82	16.11
Cash flow per share, SEK	0.45	0.16	1.31	1.02
Cash flow per share after full dilution, SEK	0.44	0.16	1.28	1.01
P/E ratio, multiple	-	-	81.8	79.9
Share price at end of period, SEK	30.9	40.0	30.9	37.3

Quarterly consolidated income statements and key figures

		2010/2011		2009/2010				2008/2009
SEK M	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Net sales	246.9	206.7	255.4	201.2	193.9	197.8	263.7	226.1	199.4	174.0
Capitalized work for own use	5.3	4.4	1.8	3.6	6.0	4.7	13.7	9.5	11.6	4.3
Operating expenses	-228.7	-196.8	224.0	-193.3	-180.9	-182.2	-247.3	-225.2	-194.4	168.9
Depreciation and amortization	-16.1	-14.1	-13.0	-14.0	-12.6	-10.2	-18.9	-9.0	-8.7	-8.5
Operating profit after depreciation	7.4	0.2	20.2	-2.5	6.4	10.1	11.2	1.4	7.9	0.9
and amortization
Net financial items	-6.9	1.7	-3.6	5.1	-5.5	-6.6	-3.8	14.4	34.1	5.3
Profit after net financial items	0.5	1.9	16.6	2.6	0.9	3.5	7.4	15.8	42.0	6.2
Tax on earnings for the period	-0.3	-0.1	-6.3	-0.9	1.8	-0.9	-3.4	-3.8	-11.9	-1.8
Earnings for the period	0.2	1,8	10.3	1.7	2.7	2.6	4.0	12.0	30.1	4.4
Equity/assets ratio, %	63.6	64.7	62.2	62.6	65.6	65.1	59.4	60.7	61.5	60.4
Operating margin, %	3.0	0.1	7.9	-1.2	3.3	5.1	4.2	0.6	4.0	0.5
Return on equity, %	0.0	0.3	1.7	0.3	0.1	0.4	0.7	2.0	5.3	0.8
Return on capital employed, %	0.1	0.3	2.6	0.5	0.2	1.6	1.2	2.6	7.1	1.1
Equity per share, SEK	16.16	16.40	16.36	16.24	16.09	16.20	16.26	16.06	15.74	14.94
Earnings per share, SEK	0.0	0.05	0.28	0.05	0.07	0.07	0.11	0.32	0.82	0.12
Cash flow per share, SEK	0.16	0.28	0.49	0.37	0.10	0.06	1.36	0.87	0.93	0.27

Five-year summary

	2009/2010	2008/2009	2007/2008	2006/2007	2005/2006
Order bookings, SEK M	861.3	1,149.7	1,016.6	684.7	613.7
Net sales, SEK M	848.4	863.3	742.9	672.5	564.4
Profit after net financial items, SEK M	23.5	71.4	79.8	70.2	80.7
Profit after tax, SEK M	17.2	50.5	50.5	47.2	60.4
Operating margin, %	4.0	2.5	10.7	9.1	13.4
Profit margin, %	2.8	8.3	10.7	10.4	14.3
Return on equity, %	2.9	8.7	9.3	9.4	13.2
Return on capital employed, %	3.9	11.6	13.8	13.0	16.0
Return on total capital, %	2.5	7.4	8.9	8.6	10.9
Earnings per share before dilution, SEK	0.47	1.37	1.37	1.28	1.65
Earnings per share after dilution, SEK	0.46	1.35	1.34	1.26	1.61
Equity per share before dilution, SEK	16.36	16.26	15.22	14.12	13.24
Equity per share after dilution, SEK	16.11	16.06	14.93	13.84	12.97
Equity/assets ratio, %	62.2	59.4	56.9	60.8	58.9
Dividend per share, SEK	0.00	0.00	0.50	0.50	0.50
Share price at year end, SEK	37.3	38.8	58.5	76.0	58.8
P/E ratio, multiple	79.9	28.3	42.7	59.2	35.7

Parent Company Income Statements

	3 months	3 months	6 months	6 months	12 months	Full-year
SEK thousands	Aug 2010	Aug 2010	May 2010	May 2009	Nov 2009 -	May - Apr
	- Oct 2010	- Oct 2010	- Oct 2010	- Oct 2009	Oct 2010	2009/2010
Net sales	5,082	6,440	10,866	12,990	23,680	25,804
Operating expenses	-5,875	-6,939	-14,954	-15,282	-31,479	-31,807
Depreciation and amortization	-59	-129	-120	-261	-417	-558
Operating loss after depreciation and	-852	-628	-4,208	-2,553	-8,216	-6,561
amortization
Net financial items	2,213	1,776	5,831	5,086	107,484	106,739
Profit after net financial items	1,361	1,148	1,623	2,533	99,268	100,178
Appropriations	-	-	-	-	15,700	15,700
Profit before tax	1,361	1,148	1,623	2,533	114,968	115,878
Tax on earnings for the period	-360	-321	-430	-681	-31,182	-31,433
Earnings for the period	1,001	827	1,193	1,852	83,786	84,445

Parent Company Statement of Comprehensive Income

	3 months	3 months	6 months	6 months	12 months	Full-year
SEK thousands	Aug 2010	Aug 2009	May 2010	May 2009	Nov 2009	May - Apr
	- Oct 2010	- Oct 2009	- Oct 2010	- Oct 2009	– Oct 2010	2009/2010
Earnings for the period	1,001	827	1,193	1,852	83,786	84, 445
Other comprehensive income
Change in translation differences from translating foreign subsidiaries	-7,570	-6,602	-8,700	-14,175	-9,864	-15,339
Total other comprehensive income	-7,570	-6,602	-8,700	-14,175	-9,864	-15,339
for the period
Total comprehensive income for the period	-6,569	-5,775	-7,507	-12,323	73,922	69,106

Parent Company Balance Sheets

SEK thousands	Oct 31,	Oct 31,	Apr 30,
	2010	2009	2010
Assets
Tangible assets	669	1,684	1,878
Financial assets	161,534	205,102	167,862
Total fixed assets	162,203	206,786	169,740
Other current assets	330,776	242,123	340,934
Cash and cash equivalents	716,235	702,600	729,260
Total current assets	1,047,011	944,723	1,070,194
Total assets	1,209,214	1,151,509	1,239,934
Equity and liabilities
Equity (including earnings for the period)	552,198	553,450	559,704
Deferred tax liabilities	25,731	29,860	25,731
Long-term liabilities Current liabilities	20,429 610,856	19,903 548,296	17,315 637,184

Definition of key figures

Adjusted equity	Reported shareholders' equity increased by 73.7% of untaxed reserves.
Capital employed	Total assets reduced by non interest-bearing liabilities.
Cash flow per share	Cash flow divided by the number of shares at the end of the period.
Earnings per share	Profit/loss after tax divided by the average number of shares.
Equity/assets ratio	Equity as a percentage of total assets.
Equity per share	Equity divided by the number of shares at the end of the period.
Liquidity	Current assets divided by current liabilities.
P/E ratio	Share price at the end of the period in relation to the 12-month period's earnings per share.
Profit margin	Profit after net financial items as a percentage of net sales.
Return on equity	Profit after tax as a percentage of average adjusted equity.
Return on capital employed (ROCE)	Profit before tax plus financial expenses as a percentage of average capital employed.
Return on total capital	Profit after net financial items plus financial expenses as a percentage of average total assets.
Value added	Operating profit plus labor costs.

Accounting principles

This interim report was prepared in accordance with IAS 34, Interim Financial Reporting, the Annual Accounts Act and the Swedish Securities Markets Act. The consolidated accounts were prepared in accordance with the International Financial Reporting Standards (IFRS) and statements from the International Financial Reporting Interpretations Committee (IFRIC) that were approved by the EU Commission for application within the EU.

The accounting policies and calculation methods are unchanged compared with those applied in the 2010/2011 Annual Report with the following exceptions. From the first quarter of the 2010/2011 fiscal year, IFRS 3, Business Combinations, and IAS 27, Consolidated and Separate Financial Statements, are applicable. New policies and amendments that have come into effect as of the 2010/2011 fiscal have had no impact on the financial statements.

Financial calendar

Nine-month interim report	March 8, 2011
Year-end report 2010/2011	May 24, 2011
Annual General Meeting	June 30, 2011

For further information, please contact:

CEO Jan-Olof Brüer Telephone +46 13 - 23 52 09

The Board of Directors and the President of Sectra AB (publ) hereby assure that the interim report for the period May-October 2010 provides a true and fair view of the Parent Company's and Group's operations, financial position and earnings and describes the significant risks and uncertainty factors facing the Parent Company and other companies in the Group.

This interim report has not been reviewed by the Company's auditors.

Linköping, December 7, 2010

Board of Directors Sectra AB (publ)

Sectra AB (publ)

SE 583 30 Linköping, Sweden

Tel: +46 (0)13 23 52 00

info@sectra.se

http://www.sectra.se

VAT. Registration no SE556064830401

The information in this report is such that Sectra AB (publ) is obligated to disclose in compliance with the Securities and Clearing Operations Act and/or the Financial Instruments Trading Act. This information was released to the media for public disclosure on December 7, 2010 at 8:30 a.m. (CET).