July-September 2012 * Sales were SEK 254.2 (273.8) m, corresponding to a decrease of 7.1% and 6.2% adjusted for exchange rate fluctuations. * Operating profit was SEK 50.1 (69.4) m and operating margin was 19.7% (25.3%). * Net profit was SEK 38.0 (53.5) m for the quarter. * Earnings per share after dilution were SEK 1.37 (1.94). * Cash flow from operating activities was SEK 74.6 (31.4) m. * The second-largest mobile operator in Austria, T-Mobile Austria, has selected Transmode's WDM solution to increase the capacity of its nationwide fiber network. January-September 2012 * Sales were SEK 759.7 (670.5) m, corresponding to an increase of 13.3% and 12.6% adjusted for exchange rate fluctuations. * Operating profit was SEK 133.6 (104.3) m and operating margin was 17.6% (15.6%). Adjusted operating profit for the first nine months of 2011 was SEK 123.0 m and adjusted operating margin was 18.4%. The adjustment was for expenses of SEK 18.7 m relating to Transmode's IPO on NASDAQ OMX Stockholm. * Net profit was SEK 104.0 (82.1) m. * Earnings per share after dilution were SEK 3.74 (3.02). * Cash flow from operating activities was SEK 105.9 (50.9) m. CEO's Statement: Another highly profitable quarter for Transmode "The quarter's operating profit of SEK 50 m equates to an operating margin of nearly 20%. This very positive operating profit is driven by continued high sales, a gross margin of just over 49% and low expenses. Sales in the third quarter of the year were SEK 254 m. In a comparison with the corresponding quarter of the previous year, it is worth noting that the third quarter 2011 included items such as large deliveries on the contract reported with Virgin Media on Mobile Backhaul. Apart from continued high operating margins, I'm especially satisfied with sales in the Americas continuing to increase, our strong cash flow and that we, despite unfavorable exchange rates, retained our gross margin. Our market is driven by the underlying increase in data traffic driven by video applications, cloud services and mobile broadband. Accordingly, there is a continued need for investments in equipment that increases the capacity of optical fiber networks. At present, there is nothing to suggest that this underlying driver is weakening. But due to macroeconomic concerns, primarily in Europe, we did note some slowdown in the market during the quarter and accordingly, we consider that sales in the final quarter of the year will be in line with the corresponding quarter of the previous year. To summarize, we are pleased by the very positive profits of the first three quarters of the year, and despite some slowdown in the market, we're maintaining confidence in our growth strategy with its focus on geographical expansion, innovative products and operational efficiency." Karl Thedéen, CEO, Transmode The Interim Report is attached and available via the link at the end of this press release. Invitation to press and analysts conference Transmode Holding AB will hold a conference call (in English) for the media, investors and analysts on 23 October at 09:00 CET where CEO Karl Thedéen, and CFO Tomas Kihlstrand, will present and comment on Transmode's Interim Report. To access the telephone conference, please call UK +44 (0) 808 109 0700 alternatively, call the Swedish number +46 (0) 20 089 63 77 and state that you are joining the "Transmode conference call" a few minutes before the scheduled start. The conference and presentation can also be followed live online, see Transmode's homepage: http://www.transmode.com/en/interim-reports/interim- reports The Interim Report along with historical quarterly data is also available on the Transmode website at www.transmode.com. The information in this announcement is required to be disclosed by Transmode Holding AB under the Swedish Securities Markets Act (Sw. lagen om värdepappersmarknaden). This information was released for publication at 08:00 AM CET on 23 October,2012. For more information please contact: Ola Elmeland Vice President Marketing & Communications Transmode Systems AB Telephone: +46 8 506 882 71 Email: ola.elmeland@transmode.com About Transmode Transmode is a global provider of packet-optical networking solutions that enable fixed line and mobile network operators to cost effectively address the capacity needs created by the rapid growth in video and data traffic. These solutions are important building blocks in next-generation high-speed optical networks that support services such as broadband backhaul, mobile data backhaul, video delivery services and cloud computing. Transmode's solutions are based on Wavelength Division Multiplexing (WDM) and packet optical transport technologies, which are designed to increase the capacity, flexibility and functionality of optical metro core and metro access networks. Transmode's Intelligent WDM (iWDM(TM)) approach gives key advantages to customers, such as ultra-low latency, low power consumption and innovative network design. Transmode is headquartered in Stockholm, Sweden and is listed on the NASDAQ OMX Stockholm Exchange (TRMO). Since 2000 the company has installed more than 30,000 systems for over 400 fixed and mobile network operators, service providers, large enterprises and public institutions in over 40 countries across the globe. For additional information about Transmode, please visit www.transmode.com. [HUG#1651292]