Interim report January - June 2007

• Northern reported powerful sales growth and strong earnings. Sales of Northern Storage Suite software for the new NetApp and EMC storage platforms increased during the quarter.
• IAR Systems is expanding in the USA and posted its highest ever quarterly sales of software in the ARM segment.
• Deltaco’s strategy to successively increase sales of products under its own brand is progressing according to plan – the goal is to launch 1,000 own-branded products before the end of 2007.
• Consolidated profit for the first half of 2007 was charged with investments of approximately SEK 10 million to increase sales and marketing resources.
• Net sales amounted to SEK 378.4 million (378.9) for the first half of the year and SEK 175.1 million (173.1) for the second quarter.
• Profit before amortization of intangible assets (EBITA) was SEK 24.0 million (26.0) for the first half of the year and SEK 10.9 million (10.3) for the second quarter.
• Profit after tax is reported at SEK 15.5 million (15.8) for the first half of the year and SEK 6.9 million (5.6) for the second quarter.
• Earnings per share were SEK 0.13 (0.16) for the first half of the year and SEK 0.06 (0.06) for the second quarter.

Comments from the CEO

“Upward earnings trend in the second quarter – investments starting to have effect”

Nocom’s operations showed continued positive development and an increase in consolidated profit compared to the second quarter of 2006. Several of the subsidiaries delivered a strong quarter, which is reflected in an improved operating profit both for individual companies and for the Group as a whole. The strategic focus on proprietary products has been successful and the outlook is bright for all companies in this sector – IAR Systems, Northern and Deltaco – which not only lie behind the Group’s impressive earnings performance, but also growth and future potential.

Northern has taken further steps in the establishment of an international sales organization. Aside from hiring additional sales staff, Northern acquired its distributor in France after the end of the period in order to more quickly reach the market and boost sales. In the second quarter, Northern received its first order for Northern Storage Suite for the new NetApp and EMC platforms. The company is creating solid profitability through a high share of license revenue with a strong gross margin.

Deltaco is continuing to build a range of products under its own brand and aims to launch 1,000 own-branded products before the end of 2007. The brand strategy will improve Deltaco’s competitiveness as brands become an increasingly important factor in end-user sales. The computer accessories market is changing and expanding into the retail trade and cash-and-carry outlets.

IAR Systems’ sales of licenses for 32-bit technology are rising steadily and the company recorded its highest ever quarterly sales in this segment. The increase was driven mainly by ARM technology, but also the launch of new products based on 32-bit technology during the quarter. The recruitment of new sales staff had a positive impact in the second quarter and is expected to generate further effects throughout the remainder of the year. IAR Systems’ development revenue has decreased during the year as a direct result of ongoing consolidation in the market.

In the Distribution business area, increased profitability remains the top priority. Nocom Security has taken decisive action to reduce volume-related sales with low gross margins, including the wind-up of operations in Finland and the Baltic countries and adjustments in the product mix, which has led to weaker sales but higher margins in Nocom Security. The intensive process of change in Distribution is expected to be completed before year-end.

The year is continuing with a high level of activity – investments in increased global presence, marketing initiatives and the launch of new products. The goal is to increase our long-term profitability and our chosen path is a sustained focus on the company’s proprietary products together with an enhanced offering in Distribution.

Stockholm, Tuesday, August 21, 2007

Stefan Ström, President and CEO

Group

“Stable earnings, marketing investments and solid financial position”

Consolidated sales reached SEK 378.4 million (378.9) for the first half of 2007 and SEK 175.1 million (173.1) for the second quarter. Overall, the Group reported stable sales with some variation within the respective areas of operation compared to the preceding year. Both Northern and Deltaco showed growth, while distribution operations accounted for a declining share of total group sales following a decision to reduce volume-related sales mainly in Nocom Security.

Profit before amortization of intangible assets increased to SEK 24.0 million (26.0) for the first half of 2007 and SEK 10.9 million (10.3) for the second quarter. Operating margin was 5.8 percent (6.3) for the first half of 2007 and 5.6 percent (5.3) for the second quarter. Strong profitability was noted in all of the subsidiaries with proprietary products – IAR Systems, Northern and Deltaco and the distribution company Nocom Software. In the second quarter, the most significant earnings growth was achieved by Deltaco and Northern. The earnings trend is in line with the Group’s pursuit of stable long-term profitability.

The Group’s investments in sales and marketing resources were charged to profit for the first quarter of 2007 in an amount of approximately SEK 10 million.

Profit for the first half of the prior year included two one-time items amounting to SEK 3 million – a SEK 2 million gain on the first quarter sale of the shareholding in ContactorArete and additional purchase consideration of SEK 1 million for the sale of Arete and Arete Datastöd in the second quarter of 2006.

Cash flow from operating activities was SEK -1.5 million (22.9) for the first six months of the year and SEK 4.1 million (5.0) for the second quarter.

In the second quarter Nocom paid stockholder dividends of SEK 0.30 per share, for a total of SEK 35.1 million. Nocom also carried out a buy-back of 439,000 treasury shares for a total price of SEK 2.9 million during the period. In April Nocom paid additional cash consideration of SEK 5.0 million for the acquisition of Northern. These items were charged to second quarter cash flow and net cash in a total amount of SEK 43 million. Net cash at June 30, 2007, was SEK 33.9 million (51.6).

Nocom has a solid financial position with total available cash and cash equivalents of SEK 60.9 million (115.9) at June 30, 2007. The equity/assets ratio improved further during the period and amounted to 79 percent (72) at June 30, 2007.