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First half year 2002/2003 consolidated results

Strong reduction in operating losses

(M€) (	03/31/2002 (*) Year	03/31/2003 (*) Year	Change in %
Revenues	2.33	2.10	-10%
Gross margin	1.25	1.55	+24%
Operating result	-3.67	-1.27	+65%
Net result	-3.67	-1.23	+66%

(*) Unaudited consolidated figures

Half year results

For the first half year of the current fiscal year, Mandriva's consolidated revenue decreased by 10% to 2.10 million euros over the same period of the previous year. This decrease is mainly due to the weakness of the US dollar, which is the main currency of Mandriva's revenue. With last year's USD/euro exchange rate, consolidated revenue would have remained mostly stable (-2%).

Consolidated gross margins for the first half year increased by 24%. This significant increase reflects an important change in revenue sources:

• Increase in high margin revenue lines such as OEM, on-line sales and subscriptions to Mandriva Linux Users Club (from 40% to 63% of consolidated revenue),

• Decrease in retail sales (from 51% to 27% of consolidated revenue).

For the first half year of the current fiscal year, Mandriva reported a consolidated operating loss of 1.27 million euros which is an improvement of 2.4 million euros compared to last year's same period. This improvement is mainly due to an increase in gross margin plus savings from the ongoing cost reduction plan.

Perspectives

On January 27th, 2003, the Commercial Court granted Mandriva a six month observation and protection period (similar to a U.S. Chapter 11 procedure). This period will end on July 27th, 2003. The company is pursuing an opportunity to be granted an additional six month observation and protection period.

Since January 2003 Mandriva has been cash-flow positive.

In the upcoming months, the company's objective is to exit the Observation Period with a 'Continuation Plan'.

About Mandriva

Mandriva is a leading Linux and Open Source Software (OSS) editor. (OSS source code is freely accessible according to the GPL, the General Public License). Mandrivasoft develops and distributes the Mandriva Linux operating system. Hundreds of developers around the world contribute to the continuous improvement of the product via Internet and contribute to its internationalization (with more than 67 languages available). The company also provides related on-line and off-line services including consulting, education, support, and the Mandriva Club.
Mandriva has offices in France, USA and Canada.

Since July 30th , 2001, the company is listed on Euronext Marché Libre and OTC US

Euroclear : FR00004159382 (previously 4477)
Reuters : MAKE.PA
OTCUS: MDKFF
Number of shares : 3,666,953

Mandriva contacts
Jacques Le Marois / Thierry Bossut
investors a mandriva com Tl. : +33 (0)1 40 41 00 41

For additional information: mandriva.com/company/investors/newsletter

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