About Axis Communications Axis offers intelligent security solutions that enable a smarter, safer world. As the global market leader in network video, Axis is driving the industry by continually launching innovative network products based on an open platform - delivering high value to customers through a global partner network. Axis has long-term relationships with partners and provides them with knowledge and ground-breaking network products in existing and new markets. Axis has more than 1,600 dedicated employees in more than 40 countries around the world, supported by a network of over 65,000 partners across 179 countries. Founded in 1984, Axis is a Sweden-based company listed on NASDAQ OMX Stockholm under the ticker AXIS. For more information about Axis, please visit our website www.axis.com.

Sales growth during the first quarter of 2014 was 15 percent in

local currency. Due to lower than expected sales during the end

of the period, the earnings trend was weaker than anticipated.

Eastern Europe has been clearly affected by the unrest in Russia

and Ukraine. Meanwhile, overall sales were impacted by a weaker

performance than expected in the Americas region, particularly

during the second part of the quarter. At a global level, we did

not notice any significant change in inventory levels. We estimate

that the underlying short-term demand is in line with the growth

rate we saw during 2013.

Our investments for future growth have continued at a high pace.

It is thanks to these ambitious investments that we were able

to present a large number of new solutions in various product

categories during the quarter. A number of new network cameras

were released and we have introduced an upgraded version of our

software for medium-sized installations, AXIS Camera Station.

The recruitment rate continued to be high in early 2014 and the

number of employees increased by 81 people.

Axis entered 2014 with a good basis for taking advantage of the

opportunities offered by the market. We will continue to advance

our offering for access control, to release new innovative network

cameras and we have now also strengthened our offering for

medium-sized installations. These investments clearly emphasise

our ambition – to continue to develop new innovative solutions

and strengthen our market-leading position.

President’s comments

Interim reportJanuary-March 2014

Ray Mauritsson President

The first quarter > Net sales increased by 15 percent during the first quarter to SEK 1,129 M (982). Net sales increased by 15 percent in local currencies

> Operating profit decreased to SEK 72 M (89), corresponding to an operating margin of 6.4 percent (9.1).

> Profit after tax amounted to SEK 52 M (66). > Earnings per share amounted to SEK 0.75 (0.95)

2

Events during the first quarter A strong product portfolioDuring the period, a number of important changes have occurred in the offering of

network cameras in the Axis P series. A number of advanced additions to the existing

AXIS P33 Series were released as well as the new AXIS P32 Series, while strategic price

reductions were made in certain volume products. The changes have meant that the

offering in this camera segment has improved due to more advanced functionality and a

more competitive price level.

In January, Axis Q60-S PTZ dome network cameras were released featuring stainless

steel casings. The cameras are equipped with functionality for image stabilization and

for handling foggy environments and are ideal for marine installations, surveillance of

oil and gas sites and the chemical industry. The Axis M1145-L and Axis M1145 cameras

were launched in February and offer a cost-efficient solution for around-the-clock indoor

surveillance. The cameras are primarily targeted to end customers in the retail segment

as well as restaurants and hotels. In March, AXIS Camera Station 4.0 was introduced, an

improved version of Axis’ software for medium-sized installations. The software has an

entirely new user interface with a clear focus on easy use. AXIS Camera Station 4.0 also

enables easier and more efficient handling of camera views, rapid replay of incidents,

improved search functionality relating to recorded material and smooth integration with

Axis’ solution for access control.

Continued high recruitment rate During the period, the number of employees increased by 81 people to 1,708 in total. The

recruitment rate is still high and the organization is continuing to expand in order to meet

the increasing future demand. The work on strengthening the global partner network through

training and certification of existing as well as new partners is continuing.

A strong American organizationIn January, a reorganization of the American operations commenced with the

aim of boosting the local presence and further strengthening our position in the

market. By dividing the US into six regions with local offices, proximity will be

strengthened to distributors and partners and also to end customers. Each region

will have its own local resources for sales, support, marketing and training within

the Axis Academy framework. Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014

650700750800850900950

1000105011001150120012501300135014001450150015501600165017001750

1265

1333

1403

1470

1521

15921627

1708

Number of employees

3

Comments on the income statement and balance sheetNet salesThe first quarter

Net sales for the first quarter amounted to SEK 1,129 M (982), which was an increase of 15

percent. Growth was 15 percent in local currency. Foreign currency effects had a negative

impact on sales of SEK 3 M.

Sales in the EMEA region amounted to SEK 402 M (353) during the first quarter, corresponding

to growth of 14 percent. Growth was 12 percent in local currency. In Eastern Europe, the sales

was negatively affected by local unrest in parts of the region. Certain markets in Central and

Southern Europe also performed more weakly than expected, especially during the second

half of the period. Meanwhile, the growth rate was particularly good in the Middle East.

Sales in the Americas region amounted to SEK 591 M (513) during the first quarter,

corresponding to growth of 15 percent. Growth amounted to 16 percent in local currency.

Most of the markets in North and South America performed more weakly than expected

during the period.

Sales in the Asia region amounted to SEK 136 M (115) during the first quarter, corresponding

to growth of 18 percent. Growth was 23 percent in local currency. Sales varied sharply

within the region. The emerging markets continued to display strong growth while the

more mature markets in southern Asia displayed weak sales during the quarter.

Invoiced sales per product group (SEK M)

Q1 2014

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Video 1,121.2 979.8 1,112.8 1,318.8 1,296.6

Other 7.9 1.7 1.6 3.6 1.9

TOTAL 1,129.1 981.5 1,114.4 1,322.4 1,298.5

Invoiced sales per region (SEK M)

Q1 2014

Q1 2013

Q2 2013

Q3 2013

Q4 2013

EMEA 401.5 353.4 362.5 511.1 537.1

Americas 591.4 512.9 617.9 653.0 580.0

Asia 136.2 115.2 134.0 158.3 181.4

TOTAL 1,129.1 981.5 1,114.4 1,322.4 1,298.5

Sales

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

0

10

20

30

40

50

60

70

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014

Sales SEK M

Total growth %

Invoicing per region,Q4 2013

Americas

EMEAAsia

52 %

36 %12 %

SEK M %

Sales per region, SEK M

EMEA Americas Asia

0

50

100

150

200

250

300

350

400

450

500

550

600

650

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014

4

EarningsThe first quarter

Operating profit during the first quarter amounted to SEK 72 M (89), which corresponded

to an operating margin of 6.4 percent (9.1). Operating profit was impacted negatively by

weak sales and a continued high rate of expansion, in combination with a negative effect

from currency translation differences. Meanwhile, gross margin continued to be stable and

amounted to 50.5 percent (51.5) in the first quarter. Profit before tax was SEK 71 M (88).

Profit after tax amounted to SEK 52 M (66). Changes in foreign exchange rates impacted

operating profit negatively by SEK 17 M, compared with the corresponding period of the

previous year.

Condensed income statement, (SEK M)

Q1 2014

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Net sales 1,129.1 981.5 1,114.4 1,322.4 1,298.5

Gross profit 569.8 505.3 568.1 696.2 660.6

Gross margin, % 50.5 51.5 51.0 52.6 50.9 Operating profit 72.1 89.3 126.5 258.4 166.0

Operating margin, % 6.4 9.1 11.4 19.5 12.8 Profit before tax 71.0 88.1 125.9 257.6 165.5

Cash flow, investments and financial positionCash flow from operating activities for the period amounted to SEK 114 M (100). Net

investments totaled SEK 31 M (32), of which capitalized development costs amounted to

SEK 12 M (13). Axis had SEK 419 M (392) in cash and cash equivalents at the end of the

period, as well as unutilized credit facilities of SEK 500 M (500). Accordingly, the company

had a total of SEK 919 M (892) at its disposal at March 31, 2014.

EquityConsolidated equity amounted to SEK 990 M (874). The total number of shares at year-end

was 69,461,250 (69,461,250). Axis has no outstanding stock option programs. The group’s

equity/assets ratio was 50.6 percent (53.5) at March 31, 2014.

(SEK M) Share capital Other contributed

capital Other

reservesRetained earnings

Total equity

Opening balance at Jan 1, 2013 0.7 279.2 -14.1 544.0 809.8Total comprehensive income for the period

- - -2.0 66.1 64.1

Closing balance at Mar 31, 2013 0.7 279.2 -16.1 610.1 873.9

Opening balance at Jan 1, 2014 0.7 279.2 -18.6 675.6 936.9Total comprehensive income for the period

- - 0.2 52.4 52.6

Closing balance at Mar 31, 2014 0.7 279.2 -18.4 728.0 989.5

Parent CompanyThe parent company’s operations are primarily focused on company-wide administration.

The parent company has no employees. During the period, sales amounted to SEK 5.1 M (5.2)

and operating profit amounted to SEK -2.6 M (-2.7). Cash and cash equivalents at the end

of the period amounted to SEK 306.9 M (0) and borrowing was SEK 0 M (0). No investments

have taken place during the period.

Operating profit / EBIT

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014

0

25

50

75

100

125

150

175

200

225

250

275

0

10

20

30

40

50

60

70

80

90

100

EBIT SEK M

Gross margin %EBIT margin %

SEK M %

5

Outlook There is a continued steady inflow of new projects and the view on the market’s current

growth rate remains unchanged. Axis and external market research institutions estimate the

long-term global growth potential for the network video market at 20-25 percent annually.

An important factor for continued strong growth is increased penetration in installations

for smaller systems and in emerging markets. In order to meet market demand and retain

its position as the market-leading supplier of network video solutions, Axis will continue

to develop and release a large number of innovative products, refine the partner network,

recruit more employees and continue to expand globally.

OtherRisks and uncertainties Axis’ operations are subject to a further number of risks and uncertainties, which are described

in the 2013 Annual Report. No new material risks have arisen during the first quarter of 2014.

Accounting policiesThis interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS 34,

Interim Financial Reporting. For information on the accounting policies applied, see the 2013

Annual Report. The accounting policies are unchanged compared with those applied in 2013.

Nomination Committee Axis’ Nomination Committee is composed of representatives from the three largest shareholders;

Christer Brandberg (Inter Indu AB), Therese Karlsson (LMK Industri AB) and Martin Gren (AB

Grenspecialisten). Christer Brandberg is chairman and convenor. Proposals and views from

shareholders concerning the composition of the board may either be submitted in writing to

the address: Axis AB, attn. Adrienne Jacobsen, Emdalavägen 14, 223 69 Lund, or by phone

+46 46 272 18 00.

Annual General MeetingAxis’ Annual General Meeting will be held on April 28, 2013 at 5 p.m. in Lund, Sweden.

The Axis share The company’s share is listed on NASDAQ OMX Stockholm in the Large Cap segment, under

the ticker AXIS. Axis’ share had a turnover of 9,330,768 shares during the period January-

March 2014, which gave an average turnover of 150,496 shares per trading day, to a value

of SEK 32,749,337. The average price of the share during the period was SEK 218.4.

Reporting dates Axis will report on the following dates during the 2014 fiscal year:

Interim report, January-June: July 9, 2014

Interim report, January-September: October 16, 2014

Lund, April 24, 2014 Ray Mauritsson President

6

Review report Review report of condensed interim financial information (Interim report) prepared in

accordance with IAS 34 and Chapter 9 of the Swedish Annual Accounts Act.

IntroductionWe have reviewed this interim report for the period January 1-March 31, 2014 for Axis

AB (publ). The board of directors and the president are responsible for the preparation

and presentation of this interim financial information in accordance with IAS 34 and the

Swedish Annual Accounts Act. Our responsibility is to express an opinion on this interim

financial information, based on our review.

The focus and scope of the reviewWe conducted our review in accordance with the International Standard on Review

Engagements, ISRE 2410, Review of Interim Financial Information Performed by the

Independent Auditor of the Entity. A review of the interim report consists of making

inquiries, primarily of persons responsible for financial and accounting matters, and applying

analytical and other review procedures. A review has a different focus and is substantially

less in scope than an audit conducted in accordance with International Standards on

Auditing (ISA) and other generally accepted auditing standards in Sweden. The procedures

performed in a review do not enable us to obtain a level of assurance that would make

us aware of all significant matters that might be identified in an audit. Accordingly, the

conclusion expressed based on a review does not constitute the same level of assurance

as a conclusion based on an audit.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the

Interim Report, in all material respects, is not prepared for the group in compliance with

IAS 34 and the Swedish Annual Accounts Act and for the Parent Company in compliance

with the Swedish Annual Accounts Act.

Lund, April 24, 2014PricewaterhouseCoopers AB

Ola BjärehällAuthorized Public AccountantAuditor in charge

7

Consolidated comprehensive income

(Mkr)Q1

2014Q1

2013Full-year

2013Q2 13 - Q1 14

12 months

Net sales 1,129.1 981.5 4,716.8 4,864.4

Cost of goods and services sold -559.3 -476.2 -2,286.6 -2,369.7

Gross profit 569.8 505.3 2,430.2 2,494.7

Other revenues and changes in value -11.4 -15.4 -8.0 -4.0

Selling and marketing expenses -228.2 -188.7 -864.4 -903.9

Administrative expenses -57.0 -49.4 -208.9 -216.5

Research and development expenses -201.1 -162.4 -708.6 -747.3

Operating profit * 72.1 89.3 640.3 623.1

Financial expenses -1.1 -1.2 -3.1 -3.0

Profit before tax 71.0 88.1 637.2 620.1

Tax -18,6 -22.0 -158.3 -154.9

Net profit for the period 52.4 66.1 478.9 465.2

Other comprehensive incomeItems that later may be transferred to the income statement Exchange differences 0.2 -2.0 -4.5 -2.3

Other comprehensive income for the period, net after tax 0.2 -2.0 -4.5 -2.3

Total comprehensive income for the period 52.6 64.1 474.4 462.9

Total comprehensive income attributable to:

Parent Company’s shareholders 52.6 64.1 474.4 462.9

Earnings per share for the period, SEK 0.75 0.95 6.89 6.70

Number of shares, average, thousands 69,461 69,461 69,461 69,461

*Net effects of changes in exchange rates in underlying receivables and liabilities in foreign currencies have impacted operating profit negatively by SEK 12 M (negatively by SEK 15 M) during the first quarter.

Consolidated statement of cash flows

(SEK M)Q1

2014Q1

2013Full-year

2013Q2 13 - Q1 14

12 monthsCash flow from operating activities before change in working capital

83.5 102.9 567.6 548.2

Change in working capital 30.4 -2.6 -90.1 -57.1

Cash flow from operating activities 113.9 100.3 477.5 491.1

Cash flow from investing activities -31.1 -31.8 -117.0 -116.3

Cash flow from financing activities -1.3 -141.3 -487.3 -347.3

Cash flow during the period 81.5 -72.8 -126.8 27.5Cash and cash equivalents at the start of the period 337.7 464.5 464.5 391.7

Cash and cash equivalents at the end of the period 419.2 391.7 337.7 419.2

8

Consolidated balance sheet (SEK M) Mar 31, 2014 Mar 31, 2013 Dec 31, 2013Non-current assets 286.3 227.9 270.5

Inventories 676.7 516.1 636.8

Trade receivables* 428.0 385.6** 592.0

Other receivables 145.6 111.5 105.9

Cash and cash equivalents 419.2 391.7 337.7

Total 1,955.8 1,632.8 1,942.9

Equity 989.5 873.9 936.9

Non-current liabilities 181.7 143.3 163.5

Trade payables 402.9 288.4 439.1

Other current liabilities 381.7 327.2** 403.4

Total 1,955.8 1,632.8 1,942.9

*This item includes receivables from contract manufacturers of SEK 92.3 M.**Since Q4 2014, Axis has applied net accounting of trade receivables in cases where Axis’ counterparty in turn has claims on Axis in the form of accrued discounts connected to purchasing from Axis. For comparability between quarters, Q1 2013 has been recalculated and the effect of the net accounting is a reduction in trade receivables and other current liabilities of SEK 97.7 M.

Key ratios Q1

2014Q1

2013Full-year

2013Net sales growth (%) 15.0 11.4 12.7

Gross margin (%) 50.5 51.5 51.1

Operating margin (%) 6.4 9.1 13.6

Profit margin (%) 6.3 9.0 13.5

Depreciation/amortization (SEK M) * 57.2 51.0 55.4

Shareholders’ equity (SEK M) 990 874 937

Capital employed (SEK M) 1,038 814 984

Interest-bearing liabilities (SEK M) - - -

Net interest-bearing liabilities/net receivables (SEK M) ** 419 392 338

Total assets (SEK M) 1,956 1,633 1,943

Return on capital employed (%) * 61.6 64.7 64.8

Return on total assets (%) * 32.0 34.2 35.2

Return on equity (%) * 50.2 53.6 56.9

Interest coverage ratio (times) * 209.9 83.3 206.5

Equity/assets ratio (%) 50.6 53.5 48.2

Share of risk-bearing capital (%) 57.4 60.0 54.2

Capital turnover ratio (times) 4.8 4.7 4.8

Number of employees (average for the period) 1,680 1,449 1,532

Sales per employee (SEK M) * 2.9 3.0 3.1

Operating profit per employee (SEK M) * 0.4 0.4 0.4 *The key figures have been recalculated to rolling 12-month values where appropriate. **Refers to net of interest-bearing receivables and liabilities.

Per-share dataMar 31, 2014 Mar 31, 2013 Dec 31, 2013

Share price at end of period, SEK 221.60 169.50 223.80

Dividend, SEK 5.50* 5.00 5.00

P/E ratio 33** 27** 32

Earnings per share, SEK 0.75 0.95 6.89

Average number of shares, thousands 69,461 69,461 69,461

Number of outstanding shares, thousands 69,461 69,461 69,461

*Proposed dividend.**P/E ratio has been recalculated to rolling 12-month value.

9

Parent Company income statement (SEK M) Q1

2014Q1

2013Full-year

2013Net sales 5.1 5.2 25.9

Gross profit 5.1 5.2 25.9

Administrative expenses -7.7 -7.9 -37.4

Operating profit -2.6 -2.7 -11.5

Result from participations in group companies - - 451.6

Interest income and similar profit/loss items 0.6 1.6 1.8

Interest expenses and similar profit/loss items -1.5 -1.3 -20.5

Profit before tax -3.5 -2.4 421.4

Change in tax allocation reserve - - -31.8

Tax - - -83.7

Net profit for the period -3.5 -2.4 305.9

Parent Company balance sheet(SEK M) Mar 31, 2014 Mar 31, 2013 Dec 31, 2013Non-current assets 9.6 12.0 10.2

Receivables from group companies 564.6 904.5 749.6

Trade receivables and other receivables 1.3 3.0 2.4

Tax receivables 13.9 19.8 15.1

Cash and cash equivalents 306.9 0.0 122.5

Total 896.3 939.3 899.8

Equity 380.2 422.7 383.7

Untaxed reserves 510.4 478.6 510.4

Liabilities to group companies 0.8 0.7 0.9

Current liabilities 4.9 37.3 4.8

Total 896.3 939.3 899.8

Quarterly dataInvoiced sales per product group (SEK ‘000)

Q12014

Q42013

Q32013

Q22013

Q12013

Q42012

Q32012

Q22012

Q12012

Q42011

Q32011

Q22011

Video 1,121.2 1,296.6 1,318.8 1,112.8 979.8 1,177.5 1,065.0 1,039.1 876.6 1,046.7 965.5 740.7

Other 7.9 1.9 3.6 1.6 1.7 2.0 14.2 4.4 4.7 4.2 5.7 6.4

TOTAL 1,129.1 1,298.5 1,322.4 1,114.4 981.5 1,179.5 1,079.2 1,043.5 881.3 1,050.9 971.2 747.2

Invoiced sales per region Q12014

Q42013

Q32013

Q22013

Q12013

Q42012

Q32012

Q22012

Q12012

Q42011

Q32011

Q22011

EMEA 401.5 537.1 511.1 362.5 353.4 484.9 384.9 377.0 331.8 452.1 374.1 320.9

Americas 591.4 580.0 653.0 617.9 512.9 555.9 569.9 542.7 449.0 495.3 499.7 350.0

Asia 136.2 181.4 158.3 134.0 115.2 138.7 124.4 123.8 100.5 103.5 97.4 76.3

TOTAL 1,129.1 1,298.5 1,322.4 1,114.4 981.5 1,179.5 1,079.2 1,043.5 881.3 1,050.9 971.2 747.2

Q12014

Q42013

Q32013

Q22013

Q12013

Q42012

Q32012

Q22012

Q12012

Q42011

Q32011

Q22011

Net sales growth (%) 15.0 10.1 22.5 6.8 11.4 16.9 11.1 39.7 9.0 20.1 31.8 10.2

Gross profit (SEK M) 569.8 660.6 696.2 568.1 505.3 600.5 548.2 515.1 439.7 533.7 499.7 382.4

Gross margin (%) 50.5 50.9 52.6 51.0 51.5 50.9 50.8 49.4 49.9 50.8 51.5 51.2

Operating profit (SEK M) 72.1 166.0 258.4 126.5 89.3 206.7 168.4 121.1 79.1 191.9 224.9 90.2

Operating margin (%) 6.4 12.8 19.5 11.4 9.1 17.5 15.6 11.6 9.0 18.3 23.2 12.1

Analyst & Press Conference

Axis will hold a teleconference for the media and financial analysts today. A presentation

is available at: www.axis.com/sv/corporate/investor/financial_reports.htm

Time: Thursday, April 24. at 10.00 a.m.

Phone number: +46 8 519 993 57

The presentation will be broadcast live on:

http://financialhearings.nu/140424/axis/

For further information please contact:Johan Lundin, Manager, Investor Relations

Mail: ir@axis.com

Phone: +46 (0)46 - 272 18 00

This report contains future-oriented information that is based on the present expectations of Axis’

Management. Even if the Management believes that the expectations reflected in such future-

oriented information are reasonable, no assurance may be given that these expectations will

prove to be correct. Consequently, actual future outcomes may deviate significantly from what is

reflected in the future-oriented information due to changed conditions relating to the economy,

market and competition, changes in legal requirements and other political measures, fluctuations

in exchange rates and other factors.

Axis discloses the information provided herein pursuant to the Swedish Securities Markets Act and/

or the Swedish Financial Instruments Trading Act. The information was released for publication at

08.00 CET on Thursday, April 24, 2014.

Axis AB (publ)

Corporate identity no. 556241-1065

Emdalavägen 14, 223 69 Lund

Phone: +46 46 272 18 00

www.axis.com