Observer AB Preliminary Year-End Report 2002; Improved Operating Margin and Continued Strong Cash Flow

Investments in New Technology and Savings Will Ensure a Continuation of Good Profits in a Continued Slow Economy


STOCKHOLM, Sweden, Jan. 31, 2003 (PRIMEZONE) -- Observer AB (publ) (Other OTC:OBSEF) (Stockholm:OBS):


 -- The group's operating revenue amounted to SEK 1,699.0 million 
    (1,358.7), an increase of 25 percent. Exchange rate effects have 
    adversely affected the revenue by SEK 36.3 million. Organic growth
    in local currency was -3 percent.

 -- Operating profit before goodwill amortization and items affecting 
    comparability amounted to SEK 310.6 million (231.2), with exchange 
    rates adversely affecting profit by SEK 8.4 million. The operating 
    margin for the full year rose to 18.3 percent (17.0). Fourth-quarter
    operating profit amounted to SEK 76.3 million, with exchange rates 
    adversely affecting profit by SEK 4.6 million. The operating margin 
    amounted to 17.9 percent (17.5).

 -- Profit per share after dilution, excluding goodwill amortization and 
    items affecting comparability, amounted to SEK 2.89 (2.47).

 -- Cash flow remains strong. Operating cash flow is the strongest ever, 
    amounting to SEK 324.5 million (130.6) for the full-year and SEK 89.6 
    million (42.4) for the fourth quarter.

 -- A new investment in a system to digitalize print media through 
    scanning has begun. Digitalization will improve processing efficiency 
    and provide the opportunity to develop a number of new services at
    low cost. The nonrecurring cost of the conversion is estimated at
    SEK 10 million, which will be charged against profit in the first
    quarter of 2003.

 -- As a result of continued economic weakness, actions are being taken 
    that will reduce costs by SEK 45 million. The one-time cost for the
    action program is estimated at SEK 17 million and will be charged
    against profit in the first quarter of 2003.

 For further information, please contact:
 Anders Lundmark, Chief Financial Officer
 telephone: +46 70 333 29 77
 e-mail: anders.lundmark@observergroup.com

 Per Blixt, Senior VP Corporate Communications/Investor Relations
 telephone: +46 70 549 28 08
 e-mail: per.blixt@observergroup.com

 Robert Lundberg, President and CEO
 telephone: +46 8 507 410 10
 e-mail: robert.lundberg@observergroup.com

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 www.waymaker.net/bitonline/2003/01/31/20030131BIT00120/wkr0001.doc
 The full report

 www.waymaker.net/bitonline/2003/01/31/20030131BIT00120/wkr0002.pdf
 The full report