Interim Report Jan-Sept

11/1/2002 4:04 AM EST

Interim Report January-September 2002

* Sales during the period January - September amounted to SEK
3,480,000 (8,018,000).

* Operating loss improved to SEK -39,515,000 (-86,329,000) for
the nine-month period. The result after financial items amounted to SEK
-35,026,000 (-78,605,000). Since the revenue continues to be far below
expectations it resulted in a profit warning sent out by the management
in the middle of September.

* The average level of costs per month for the nine-month period
amounted to SEK 5,220,000 (10,483,000) and the negative cash flow to
5,190,000 (8,189,000).

* Liquid funds at the close of the period totaled SEK
133,123,000, or SEK 2.42 per share.

* The number of full-time employees at the end of the period
amounted to 27 (63).

In August Örjan Grinndal left his post as CEO of Effnet Group AB. Effnet
board member Göran E Larsson was appointed acting CEO. Executive Vice
President Marika Philipson also left the company. Hans Runesten, also an
Effnet board member, was appointed acting Executive Vice President.

* On August 29 Effnet Group AB held an Extra general meeting
during which the shareholders decided, in accordance with the suggestion
from the board, to reduce the Company's share premium reserve by SEK 175
million. The decision is subject to acceptance from the district court
in accordance with the Swedish Companies Act.

Events after the end of the period

* In the beginning of October the board and the management of
Effnet Group AB (publ) decided to decrease the personnel by an
additional 15 employees. This action was taken as a part of the
previously announced cost reduction program. The measures will be
completed during the fourth quarter 2002. Two of the company's founders,
Stephen Pink and Mikael Degermark, have already left the company.

* On the 14th of October Effnet Group AB acquired the company
Factum Electronics from Teracom. Factum develops and sells systems for
digital radio, DAB, as well as digital stereo sound in TV broadcasting,
NICAM. Factum had a turnover of SEK 14,000,000 during the period January
- September this year. Factum Electronics has approximately 20 employees
and is situated in Linköping.

Effnet Group AB (publ) is a parent company in a group of wholly owned
subsidiaries. Effnet AB develops and sells integrated software, Header
Compression, to manufacturers of network products. Wkit Security AB is
specialized in developing copy protection software. Factum Electronics
AB develops and sells systems for digital radio, DAB, as well as digital
stereo sound in TV broadcasting, NICAM. Effnet Group AB shares are
traded on Sweden's Nya Marknaden (symbol: EFFN). Read more at
www.effnet.com, www.wkit.com and www.factum.se.

THIRD QUARTER 2002

A new management team took over on August 15 with the goal of adapting
current operating expenses to the company's short-term income and
benefitting from the favorable market for corporate acquisitions.

Short- and medium-term market conditions for the company's main products
in the field of header compression have not developed according to
expectations during the period. Most 3G players (the next generation
mobile network) have postponed their investment decisions, which has had
a negative impact on Effnet's sales. In the field of data security,
sales of the company's copy protection software for CD-ROMs have also
been very weak. Because of these factors, the company's income is far
below expected levels and unfortunately, no crucial improvements in
these fields can be seen in the near future.

As a consequence of the company's disappointing sales, the company's
Board of Directors and management has formulated a cost-cutting program
that includes reducing the number of employees by fifteen. This program
is currently under implementation and it should be completed during
fourth quarter 2002. One effect of the program will be an increased
concentration of the company's operational functions to Sweden.

Effnet has a strong financial position in a world where companies that
are searching for capital today offer yield levels far above what has
been commonly seen in recent years. The Board of Directors has therefore
decided to intensify its efforts to build up a small portfolio of
technology companies with strong potential for the future through
selective acquisitions. As a first step in this strategy, after the end
of the reporting period the company acquired Factum Electronics AB from
Teracom AB.

FINANCIAL STATEMENT

Effnet's sales amounted to SEK 3,480,000 (8,018,000) during the first
nine months of 2002. The revenue continues to be far below expectations
and resulted in a profit warning sent out by the management in the
middle of September.

The group's operating result amounted to
SEK -39,515,000 (-86,329,000). The result after financial items amounted
to SEK -35,026,000
(-78,605,000). Losses have been reduced to less than half compared to
the same period last year.

Personnel costs continue to decrease as a direct consequence of the cost
cutting measures that where implemented earlier this year and amounted
to SEK -26,993,000 (-57,395,000) for the period January - September.

Total write-downs for the period amounted to
SEK -1,151,000 (-3,349,000) of which goodwill write-downs comprised of
SEK 0 (-1,460,000).

Research and development
Total costs for research and development during the period amounted to
SEK -15,914,000
(-33,809,000), of which SEK 1,369,000 (0) was capitalized in the balance
sheet in compliance with RR 15, the Swedish Financial Accounting
Standards Council recommendation that went into force on January 1,
2002.

Financial position
Effnet's equity/asset ratio on September 30, 2002 was 91.7 % (92.2 %, at
the same time last year). Liquid funds, including current investments,
amounted to SEK 133,123,000 (201,259,000), or SEK 2.42 (3.66) per share.

Investments
Investments in material fixed assets during the period January -
September amounted to SEK 84,000 (-1,517,000) and comprised primarily
computer equipment.

Personnel
The number of full-time employees at the end of the period totaled 27,
down 36 from one year ago (63). The average number of full-time
employees during the period was 29 (68), 11 (11) of whom were based in
the U.S.

Financial Calendar
Earnings Release 2002 on February 11, 2003

This report has not been examined by the company's auditors.

Stockholm, November 1, 2002

Effnet Group AB (publ)

Göran E. Larsson
Chief Executive Officer

For more information, please contact:

Göran E. Larsson, Chief Executive Officer
+46-(0)8-564 605 50, +46-(0)705-65 68 69

Hans Runesten, Executive Vice President
+46-(0)8-564 605 50, +46-(0)702-80 26 26