CARDO AB: Interim Report, January-March 2005

At Cardo Door, the inflow of orders was lower for all product areas except service. For Cardo Pump too, the inflow of orders decreased, despite the fact that the trend in wastewater and water treatment applications remained good.

• Inflow of orders: SEK 1,835 million (1,943)
• Net sales: SEK 1,621 million (1,709)
• Net earnings: SEK -16 million (5)
• Earnings per share: SEK -0.53 (0.16)
• Weak trend for Garage field within Cardo Door
• Peter Aru new President and CEO of Cardo as of April 21 2005

Net sales amounted to SEK 1,621 million (1,709). Adjusted for the effects of exchange rate movements, this is a decrease of 4 percent.

Operating earnings amounted to SEK -10 million (27). The lower earnings are mainly due to a weak trend for the Garage field. The impact of exchange rate movements on operating earnings was only marginal.

Apart from in the Garage field, it was in the main possible to compensate for higher raw-material prices by raising product prices.

Net earnings amounted to SEK -16 million (5), which is equivalent to SEK -0.53 (0.16) per share.

Cash flow from operations was SEK 50 million (116) after tax, which is equivalent to SEK 1.67 (3.87) per share.

New President and CEO

On April 21 2005, Peter Aru was appointed new President and CEO of Cardo. Since January 2004, Peter Aru has been head of the Pump field within Cardo Pump. Before that, he was president of Besam, which operates in the field of automatic door systems. From 1993-1997 he was marketing manager in Cardo's business area Cardo Door.

The cost of terminating the previous President and CEO amounts to approximately SEK 14 million and will be charged to Group earnings for the second quarter this year. The cost relates to salary, social security contributions and pension costs.

Cardo Door

The inflow of orders was lower than during the corresponding period the previous year as far as industrial doors, dock loading systems and garage doors are concerned, while a continued increase was noted for service. For the business area as a whole, the inflow of orders decreased by 5 percent after adjustment for the effects of exchange rate movements. The inflow of orders remained weak in Germany and the UK.

Net sales amounted to SEK 1,054 million (1,096), which is a decrease of 3 percent after adjustment for the effects of exchange rate movements. Operating earnings amounted to SEK 2 million (31). The lower net sales and the deterioration in earnings can be entirely attributed to the Garage field. The decline in earnings at Garage is explained both by the lower net sales and by difficulties in compensating for the rises in the prices of raw materials.

Cardo Pump

The inflow of orders remained good in the wastewater and water treatment applications segment, while it was lower in the pulp and paper industry and construction industry segments. For the business area as a whole, the inflow of orders decreased by 3 percent after adjustment for the effects of exchange rate movements.

Net sales amounted to SEK 567 million (613), which adjusted for the effects of exchange rate movements is a decrease of 6 percent. Operating earnings amounted to SEK 3 million (12). Earnings were adversely affected by the lower net sales. The reorganization that was implemented during 2004 is taking effect on earnings according to plan.

The quarter saw the completion of the move of production in Mölndal to the new production facility in Vadstena.

Liquidity and financing

At March 31, the Group's liquid funds stood at SEK 192 million (125) compared with SEK 213 million at the beginning of the year. In addition, there are unutilized credit facilities of approximately SEK 2.3 billion (approximately 1.5).

The Group's gross investments, excluding company acquisitions, stood at SEK 62 million (49).

Net interest bearing debt at March 31 amounted to SEK 277 million (223) compared with SEK 268 million at the beginning of the year.

Equity amounted to SEK 2,919 million (2,907), which is equivalent to SEK 97.30 (96.90) per share.

The Group's equity ratio at March 31 was 57.4 percent (57.7).

Personnel

The average number of employees during the period was 5,801 (5,938).

Repurchase of shares

At this year's Annual General Meeting of Cardo AB, a resolution was passed authorizing the Board of Directors to acquire up to so many own shares before the next Annual General Meeting that the Company's holding at no time exceeds 10 percent of all shares in the Company. Acquisition is to be made on the Stockholm Stock Exchange at the market value applying on the occasion of acquisition. The purpose of the repurchase is to give the Board the opportunity to adjust the capital structure of the Company during the period until the next Annual General Meeting. The Board has yet to resolve to utilize the authorization and thus no repurchase has been made.