CARDO AB Interim report, January – March 2001

The Group's inflow of orders amounted to SEK 2,900 million (2,357)

during the quarter, which is a rise of 15 percent for the current

structure of the Group after adjustment for the effects of exchange

rate movements. The rise is almost exclusively attributable to Cardo

Rail, which has had a very good inflow of orders during the period.

Invoiced sales amounted to SEK 2,375 million (2,214). Adjusted for

the effects of exchange rate movements, this is a rise of 2 percent,

which is mainly attributable to company acquisitions.

Operating earnings amounted to SEK 100 million (107), providing an

operating margin of 4.2 percent (4.8). Cardo Door improved its

earnings, while Cardo Pump's were slightly lower. Lower deliveries of

completed orders compared with the corresponding period last year

resulted in a reduction in Cardo Rail's earnings by SEK 8 million,

which gave a slightly lower operating margin. For the year as a

whole, Cardo Rail's operating margin is expected to be in line with

the objective of 8-10 percent.

Earnings after financial items were SEK 76 million (83), providing a

profit margin of 3.2 percent (3.8). Earnings per share after full tax

amounted to SEK 1.63 (1.80).

Exchange rate movements are estimated to have had only a marginal

impact on Group earnings.

Return on capital employed was 19.6 percent (19.1) for the

twelve-month period ended March 31. Return on equity during the same

period amounted to 18.9 percent (21.5).

Cash flow from operations after tax amounted to SEK 1.63 (7.60) per

share. Adjusted for the effects of exchange rate movements on the

change in working capital, cash flow after tax was SEK 4.16 (6.68)

per share.

Cardo Pump

Invoiced sales amounted to SEK 611 million (571). The increase is

almost exclusively attributable to the effects of exchange rate

movements. Operating earnings amounted to SEK 31 million (37).

Deliveries to Cardo Pump's biggest segment, water and wastewater,

rose compared to the corresponding period last year, while deliveries

to the pulp and paper industry decreased somewhat. Deliveries to the

building services segment were on a par with last year, despite the

weak German and US construction markets.

In order to further increase customer orientation, Cardo Pump's sales

organization was altered at the turn of the year. Water and

wastewater, industry and building services are now separate marketing

organizations, creating even greater potential to focus on each

customer group.

During the period, a restructuring of the plant in Mölndal was begun

with a view to improving efficiency and profitability. At the end of

March, negotiations were initiated under the Co-determination in the

Workplace Act regarding reduction of the workforce by 35 people.

Big contracts included a general agreement regarding service for

Severn Trent, which is one of the biggest water boards in the UK,

with responsibility for water and wastewater treatment for more than

8 million people in the area around Birmingham. The agreement, which

covers service, maintenance work and repairs at about 200 pumping

stations, is estimated to be worth more than SEK 15 million. In the

USA, an order was received for almost 100 process pumps for a new

paper machine for the Willamette paper mill in Tennessee. These pumps

will be delivered in 2001 and 2002. In Spain, an order worth

approximately SEK 5 million was received for 8 big submersible pumps

for a treatment plant outside Barcelona.

About Cardo AB

Cardo is an international engineering group with a turnover of

approximately SEK 9.8 billion in 2000. Cardo holds a strong position

in the markets for doors, pumps and rail-vehicle brake systems. Cardo

has subsidiaries in about 30 countries with the focal point resting

in western Europe, and roughly 8,000 employees.

About Cardo Pump

Cardo Pump is one of Europe's largest manufacturers of centrifugal

pumps, mixers and aerators for use in water and wastewater treatment

plants, process industries and the construction sector. Cardo Pump is

also a global leader in the production of sophisticated measuring

instruments for the pulp and paper industry. Its products are

marketed under the brand names ABS, Pumpex and Lorentzen & Wettre.