Stockholm, Sweden - 29 April 2014 January-March 2014 * Sales were SEK 231.3 (240.3) m, corresponding to a decrease of 3.8%, and 6.9% adjusted for exchange rate fluctuations. * Operating profit was SEK 21.5 (41.1) m, corresponding to an operating margin of 9.3% (17.1). * Net profit was SEK 18.6 (31.9) m. * Diluted and basic earnings per share were SEK 0.67 (1.15). * Cash flow from operating activities was SEK 1.6 (59.7) m. CEO's Statement: Clear strategy for profitable growth Sales volume on our biggest market, EMEA, remained stable in the first quarter of the year. Volumes remained low in the Americas, affecting overall sales which totaled SEK 231 m. Although this was an improvement on the preceding quarter, the figure was slightly down year-on-year. Gross margin remained sound, and lower expenses compared to the previous quarter contributed to an operating margin of 9.3%. I retain my positive view of Transmode's market, even if growth can fluctuate between individual quarters and regions. In order to capitalize more on market opportunities and improve our growth rate and profitability, we're continuing to implement a number of initiatives within our strategic framework. We're taking a combined approach to expanding outside Europe, and are developing business with existing customers, approaching new customers and simultaneously increasing our focus on partners. This is taking place within the framework of our regional sales organization, which we introduced last year. Our partners are an important channel for reaching enterprise customers and smaller network operators, and we're focusing on developing existing collaborations as well as identifying new partners. Discussions are also underway with a number of large customers relating to various niche applications such as Mobile Fronthaul and passive optical infrastructure. This allows us to utilize the flexibility of our products to approach new customer segments. Our ambition is to lead the integration of Ethernet functionality in packet- optical networks, and we launched several new products in the first quarter. The new 100G Layer 2 Ethernet muxponder is the first of its kind on the market. We also launched a new generation of compact products in the quarter. Our family of "Hex cards" improve the cost-efficiency and competitiveness of our products for critical characteristics such as high density and low power consumption. Underlying market growth remains positive, mainly driven by video traffic, with many of our customers reporting annual traffic increases of 40-50%. Our products, based on WDM and Ethernet technology in combination with fiber, meet our customers' capacity needs. There are no signs to suggest that the underlying drivers have changed, and our customers' long-term investment needs remain substantial. I'm confident that our growth strategy of focusing on geographical expansion, innovative products and efficient operations will pay off. Transmode is in a strong financial position with clear financial targets, and we're well positioned for continued profitable growth. Karl Thedéen, CEO, Transmode The InterimReport 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 CET on 29 April 2014. 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 29 Aprilat 09:00 AM CET where CEO Karl Thedéen, and CFO Johan Wilsby, will present and comment on Transmode's Year-end Report. To access the telephone conference, please call UK +44 (0)203 1940552 alternatively, call the Swedish number +46 (0)8 50556483 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#1780775]