Cardo Pump´s inflow of orders rose for the current structure by 2 percent

The Group's inflow of orders stood at SEK 9,904 million (9,605), which is a rise of 3 percent for the current structure of the Group after adjustment for the effects of exchange rate movements.

Invoiced sales amounted to SEK 9,786 million (9,489), an increase of 5 percent after adjustment for the effects of exchange rate movements. Company acquisitions/disposals account for 3 percentage points of this figure. Invoiced sales to customers outside Sweden made up 92 percent (92) of total Group invoicing.

Operating earnings rose to SEK 899 million (783), providing an operating margin of 9.2 percent (8.2).

Door's and Rail's positive earnings trends continued, while reduced volumes and lower margins for pumps for the pulp and paper industry adversely affected Pump. Operating earnings for the year include a net pension refund of SEK 69 million and those for last year a reversed warranty provision of SEK 38 million made during a previous year. Exclusive of these non-recurring items, operating earnings rose by SEK 85 million or 11 percent and the operating margin amounted to 8.5 percent (7.8).

Earnings after financial items amounted to SEK 789 million (695), a profit margin of 8.1 percent (7.3), and earnings after financial items and minority share to SEK 783 million (674).

The Group's tax expense amounted to SEK 217 million (177), which is equivalent to a tax rate of 28 percent (25) on earnings after financial items. Certain non-recurring effects influenced tax expense for both 2000 and 1999. Excluding these non-recurring effects, the Group's tax rate is estimated at approximately 32 percent.

Exchange rate movements during the year had only a marginal impact on Group earnings.

Earnings per share after full tax rose to SEK 18.93 (17.36).

Return on capital employed was 20.5 percent (18.3), and return on equity 20.6 percent (21.6).

Cash flow from operations after tax was SEK 25.87 (30.00) per share. Adjusted for the effects of exchange rate movements on the change in working capital, cash flow after tax was SEK 28.20 (27.43).

Cardo Pump

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.

Cardo Pump's inflow of orders rose for the current structure by 2 percent after adjustment for the effects of exchange rate movements. Sales to the biggest segment, water and wastewater, rose while the demand for products for the pulp and paper industry and the building services market decreased somewhat.

Invoiced sales amounted to SEK 2,537 million (2,465). After adjustment for the effects of exchange rate movements, this is a rise of 3 percent, which is entirely attributable to company acquisitions. Operating earnings fell to SEK 220 million (247), mainly as a

consequence of reduced volumes and lower margins in respect of pumps for the pulp and paper industry. Return on capital employed amounted to 22 percent (26).

A number of activities were started during the year within the framework of Cardo's C15 growth program. Cardo Pump's position in the aftermarket continued to be strengthened by a new service concept, the setting up of local service centers and further development of

rental activities for dewatering pumps. Several establishments and acquisitions of small service companies were also made during the year, e.g. in Germany, the Republic of Ireland, Spain, Sweden and Finland.

The start of the year saw the acquisition of the US company CH&E, which makes diesel-driven dewatering pumps for the construction sector. This company's operations have been integrated into Cardo Pump and synergy has been generated, particularly in sales.

In the biggest market segment, water and wastewater, a major program to make the sales force more efficient was run during the year. This involved courses in subjects such as sales management and training to enhance knowledge of applications. New products introduced included a submersible high-pressure pump for wastewater applications.

Increased harmonization of production was initiated during the year with a view to, among other things, better coordinating purchasing and logistics. As part of the effort to reduce costs, a small production unit was closed down in Sweden.

In order to further enhance its customer orientation, Cardo Pump changed its sales organization at the turn of the year 2000/2001 from having been geographically based to being based on market segments that reflect customers' applications and processes. Water and

wastewater, industry, and building services are to be represented by separate marketing organizations, creating even greater potential to focus on each group of customers.