Cardo Annual General Meeting

At the statutory meeting of the board after the annual general meeting, Fredrik Lundberg was appointed chairman of the board and Lennart Nilsson vice chairman.

Dividend

In accordance with the proposal put forward by the board of directors and president, the meeting declared a dividend of SEK 8.00 per share. April 11 2002 was established as the day of record for dividend, and payment is expected to be distributed by VPC AB (Swedish Central Securities Depository & Clearing Organization) on April 16 2002.

The president's address

In his speech, Cardo's president and CEO Kjell Svensson commented on matters such as the influence of the economic slowdown on Cardo during the past year and on the effects of the efforts being made to increase the group's growth towards the target of 15 percent annual profitable growth in sales.

"At present, we are far from our growth target. This depends both on the fact that we are at the beginning of the growth phase and that we are in an unfavorable situation as regards the state of the economy."

In Germany, which is Cardo's biggest market, the economic situation resulted in a fall in sales by about SEK 300 million in comparable currency as against the year before.

"The decline in Germany is equivalent to a reduction in turnover of approximately 3 percent for the group as a whole. Despite this, the group's organic growth was 1 percent. This indicates an underlying rise of 4 percent, which can mainly be ascribed to our efforts in service and the aftermarket and to successful sales of new products outside Germany, both in new and established markets."

The percentage of group sales accounted for by service and the aftermarket has shown a good increase since the growth program started. In 1999, service and the aftermarket accounted for SEK 2.7 billion of group invoicing. In 2001, the corresponding figure was SEK 3.4 billion, which represents an increase from 29 to 32 percent of group invoiced sales during this period. Successes are being noted in all three business areas.

"During the past year, Door continued to show a high rate of growth in service and the aftermarket; and at Pump, the rate of increase in this area was twice as high as in the business area's other operations. Our growth efforts at Rail when it comes to service and the aftermarket resulted in great successes, particularly in the French market. I believe that we shall be able to continue to maintain a good rate of increase in the service and aftermarket segment."

Besides service and the aftermarket, new products are important when it comes to increasing the group's organic growth. These may be products that are developed in-house, and they may be supplementary products that are obtained in connection with acquisitions.

"Through company acquisitions this year, we have gained access to products that supplement our product range in an absolutely first-rate manner. We are increasing our marketing efficiency and are becoming a more complete system supplier at the same time as we are increasing our knowledge of our customers' processes."

Cardo's strategy for increased organic growth also includes long-term expansion in eastern Europe and Asia. Its rate of growth in these markets has been high in recent years. All in all, Cardo had a turnover of approximately SEK 930 million in eastern Europe and Asia in 2001, compared with approximately SEK 670 million in 1999.

"We have gradually increased our knowledge of these growth markets. We have started up by various collaborative ventures, then established our own sales companies, and in the case of Door have now built up a complete production plant in China. Sales in the Chinese market are showing a good rate of increase; and Door's operation there is characterized by rapid expansion. We are also seeing increased sales in this market for Pump's part; and in the railway area, China is one of the markets where the rate of growth is currently highest. This may open up good business prospects for Rail in the future."

In eastern Europe, Cardo is today represented by its own sales companies in Poland, Hungary, the Czech Republic and Estonia. As regards turnover, Cardo's biggest market in eastern Europe is Poland, where, however, a certain degree of slackness has been noted recently owing to the weakened economy in this country.

In Cardo's growth strategy, approximately half of the annual growth in sales of 15 percent is to come from acquisitions.

"We have made a reasonable start on the acquisition front this year, and it is an important aspect of our strategy to continue to develop by means of acquisitions. Financially speaking, we have a good basis for so doing. Our cash flow is good, our net debt/equity ratio has improved three years in a row and our equity ratio is high. This strength provides scope both for a good dividend yield for the shareholders and for the opportunity to achieve a rate of acquisition in line with the growth target of our strategy using our own funds."

The generation of further profitable growth in the group and the implementation of the restructuring measures at Pump according to plan are this year's principal challenges.

"As to market prospects: these continue to be difficult to assess, not least as regards Germany. However, my assessment is that Cardo will be capable of showing greater growth than that of the underlying market for the whole of 2002 too," said Kjell Svensson.

Financial information

Cardo's first quarter interim report for 2002 will be published on May 6 and the half year interim report on August 14. The third quarter interim report will be published on November 8 2002 and not on November 7 as previously announced.

Malmö, Sweden, April 8 2002

Cardo AB (publ)

About Cardo

Cardo is an international engineering group with a turnover of SEK 10.8 billion in 2001. 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.

Cardo Pump is one of Europe's largest manufacturers of pumps, mixers and aerators and a global leader in the production of sophisticated measurement instruments for the pulp and paper industry. Products are marketed under the brand names ABS, Pumpex and Lorentzen & Wettre.

Exchange rate

1 EUR = 9,0701 SEK (04.08.2002 18:47)