Stockholm, Sweden - 23 October 2013 July-September 2013 * Sales were SEK 272.0 (254.2) m, which corresponds to an increase of 7.0%, or 8.5% adjusted for exchange rate fluctuations. * Operating profit was SEK 48.5 (50.1) m, which corresponds to an operating margin of 17.8% (19.7%). * Net profit was SEK 40.1 (38.0) m. * Earnings per share after dilution were SEK 1.44 (1.37). * Cash flow from operating activities was SEK 45.1 (74.6) m. January-September 2013 * Sales were SEK 805.8 (759.7) m, which corresponds to an increase of 6.1%, or 10.2% adjusted for exchange rate fluctuations. * Operating profit was SEK 139.2 (133.6) m, which corresponds to an operating margin of 17.3% (17.6%). * Net profit was SEK 112.4 (104.0) m. * Earnings per share after dilution were SEK 4.05 (3.74). * Cash flow from operating activities was SEK 103.0 (105.9) m. CEO's Statement: Profitable growth and continued investments Sales increased by over 8% in the third quarter adjusted for exchange rate fluctuations. Our gross margin was nearly 51%, and we achieved an operating margin of nearly 18% despite increased product development and sales initiatives, which are part of the company's growth strategy. Transmode's growth in EMEA, of over 18%, was above our expectations. Growth in the quarter was driven by shipments within Europe, however regional order intake was negatively affected in the quarter by the merger of two of our major customers. This merger is now complete and our commercial relationship is normalized, but due to the negatively affected order intake in the third quarter, sales will be affected in the fourth quarter. In APAC, we're continuing to report high growth year on year. Sales are driven by factors including high activity by Hutchison Global Communications. In the Americas, consisting of North and Latin America, Latin American sales were affected by the regulatory situation in Mexico, which limited one of our large customers' willingness to invest. In North America, we are continuing to secure new customers, but the volumes of some current customers did not progress at the rate we expected. But thanks to our strong customer base and competitive product offering, we're still seeing strong growth opportunities in the Americas and we continue to invest for growth in the region. I have great confidence in the measures we have taken and that the initiatives we're executing in this region will pay off. At the Ethernet and SDN Expo in early November, we announced how we will be tailoring Transmode's Enlighten(TM) management suite to exploit the opportunities inherent in Software Defined Networks (SDN) in the form of simpler and cheaper network operations. We are pleased by our growth and very good earnings in the first three quarters of the year. As a result of the situation in the Americas and the merger of two of our major European customers, the company's sales in the fourth quarter will show low growth compared to the corresponding quarter of the previous year. However, I'm still confident in our growth strategy, and accordingly, we are continuing to invest in geographical expansion, innovative products and efficient operations. Karl Thedéen, CEO, Transmode The Interim Report is attached and available via the link at the end of this press release. The information in this announcement is required to be disclosed by Transmode AB under the Swedish Securities Markets Act (Sw. lagen om värdepappersmarknaden). This information was released for publication at 08:00 AM CEST on 23 October 2013. This is a translation of the Swedish original. In case of any inconsistency between the Swedish and English version, the Swedish version shall prevail. Invitation to press and analysts conference Transmode AB will hold a conference call (in English) for the media, investors and analysts on 23 October at 09:00 AM CEST where CEO Karl Thedéen, and CFO Johan Wilsby, will present and comment on Transmode's Interim Report. To access the telephone conference, please call UK +44 (0)207 6602078 alternatively, call the Swedish number +46 (0)8 50556487 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/investors/reports/interim- reports 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 designed to increase the capacity, flexibility and functionality of metro and regional networks and are based on Wavelength Division Multiplexing (WDM) and transport technologies such as Ethernet. Transmode's Native Packet Optical 2.0 architecture gives customers key advantages such as cost efficient Ethernet services, ultra-low latency, low power consumption and future proof 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 40,000 systems for over 500 fixed and mobile network operators, service providers, large enterprises and public institutions in over 45 countries across the globe. For additional information about Transmode, please visit www.transmode.com. [HUG#1737453]