MALMO, Sweden, Feb. 14, 2002 (PRIMEZONE) -- Cardo:
Earnings for the previous year included non-recurring income relating to a pension refund of SEK 69 million. In the commentary below, Group earnings for the previous year are stated exclusive of this pension refund.
-- Inflow of orders: SEK 11,197 million (9,904)
-- Invoiced sales: SEK 10,777 million (9,786)
-- Earnings after financial items: SEK 704 million (720), exclusive
of restructuring costs
-- The Board of Directors proposes a dividend of SEK 8.00 (7.00)
per share
The Group's inflow of orders stood at SEK 11,197 million (9,904), which is a rise of 4 percent for the current structure of the Group after adjustment for the effects of exchange rate movements.
Invoiced sales amounted to SEK 10,777 million (9,786). Adjusted for the effects of exchange rate movements, this is an increase of 2 percent. Company acquisitions account for half of this. Invoiced sales to customers outside Sweden made up 92 percent (92) of Group invoicing.
Operating earnings amounted to SEK 802 million (830), exclusive of restructuring costs of SEK 44 million at Cardo Pump, providing an operating margin of 7.4 percent (8.5).
During the fourth quarter, high invoicing and a favorable product mix had a beneficial effect on Rail's earnings. Pump's earnings were adversely affected by weak sales and low margins in Germany and the UK and by unsatisfactory margins for process pumps for the pulp and paper industry. Door's earnings were on a par with the previous year.
Earnings after financial items amounted to SEK 704 million (720) exclusive of restructuring costs, providing a profit margin of 6.5 percent (7.4).
The Group's tax expense amounted to SEK 212 million (268), which is equivalent to a tax rate of 32 percent (34) on earnings after financial items.
Exchange rate movements are estimated to have had a beneficial impact on Group earnings amounting to slightly more than 5 percent.
Earnings per share after full tax were SEK 15.81 (15.57), exclusive of restructuring costs. Including the year's restructuring provision and the previous year's non-recurring income, earnings per share were SEK 14.81 (17.23).
Cardo Door
Cardo Door is one of the world's largest manufacturers of industrial doors and Europe's leading supplier of dock loading equipment. Cardo Door is also the market leader in servicing these products and one of Europe's largest manufacturers of residential garage doors.
Cardo Door's inflow of orders for the current structure increased by 1 percent after adjustment for the effects of exchange rate movements.
For industrial doors, exclusive of Megadoor, demand was somewhat weaker than the previous year. A rising demand was noted for Megadoor, which is an industrial door that was developed for particularly demanding environments and very large door openings. For dock loading products, demand was slightly higher, and for residential garage doors on a par with the previous year, except for in Germany where demand was weak. Service, which accounts for about a quarter of Cardo Door's sales, continued to show a good trend during the year.
Invoiced sales rose to SEK 5,246 million (4,722), which after adjustment for exchange rate movements, is a rise of 3 percent. This rise is attributable to company acquisitions. Operating earnings amounted to SEK 455 million (474). Earnings were adversely affected by weak sales of residential garage doors in Germany.
In the fourth quarter, negotiations were initiated on moving production of industrial doors at the unit in Orebro, Sweden, to other Cardo Door plants. In addition, a decision was taken to invest in a new, highly mechanized production line for residential garage doors at the plant in Gothenburg, Sweden. The investment totals approximately SEK 100 million and ensures Cardo Door's further expansion in the residential garage door segment.
In the fourth quarter, Cardo Door won its biggest door order so far when the building contractor Bucon Construction in the USA ordered 60 Megadoor hangar doors worth SEK 58 million for a project involving airplane hangars for the US Air Force and Air National Guard. The doors are to be installed in the spring of 2002. Other major orders received during the fourth quarter included ones from the German supermarket chain Lidl for 82 complete dock loading systems for installation in a storage center north of Helsinki and 92 complete systems for a distribution center outside Brussels. Cardo Door's Belgian subsidiary won a record order when VMV in Mechelen ordered 108 complete dock loading systems for its vegetable auction facility. In the UK, the supermarket chain Sainsbury's ordered 156 complete dock loading systems for a facility in Essex. This means that Sainsbury's placed orders for a total of more than 300 systems during the year. From the US Air Force and Air National Guard, further orders were received for a total of 6 big Megadoor doors for maintenance hangars in Michigan, Alaska and Utah.
Early January 2002 saw the acquisition of all shares in the British company Amber Doors Holding Limited with its subsidiary Amber Doors Limited. Amber, which has a turnover of approximately SEK 240 million and employs roughly 260 people, is one of the UK's largest manufacturers of industrial doors. The company also has a broad range of fire and security doors and a well developed service organization. The acquisition price amounts to approximately SEK 220 million. Goodwill as a result of the acquisition is preliminarily estimated at approximately SEK 165 million.
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.
The inflow of orders rose by 4 percent after adjustment for the effects of exchange rate movements. This was despite weak demand in Germany and the UK.
Demand rose in Cardo Pump's biggest segment, water and wastewater, as it also did from the process industry. In the building services segment, demand was somewhat lower than the previous year, mostly owing to the weak demand in Germany.
Invoiced sales amounted to SEK 2,825 million (2,537), which adjusted for the effects of exchange rate movements is a rise of 3 percent. Operating earnings amounted to SEK 176 million (220), exclusive of restructuring costs as set out below. Including these costs, earnings were SEK 132 million. Earnings were adversely affected by weak sales and low margins in Germany and the UK as well as by unsatisfactory margins for process pumps for the pulp and paper industry, which will also affect earnings during the first quarter of 2002 to some extent.
A program to reduce costs was established in the fall; and measures were introduced in operations in markets with a falling demand in particular. The program mainly comprises staff reductions and the closure of certain regional offices. The restructuring program relates to the sales companies in Germany, the UK, Austria, Norway and France. The cost amounts to SEK 44 million and was charged to earnings for the third quarter. The measures are expected to produce an annual improvement of approximately SEK 30 million in earnings and to take full effect as of 2003. During the course of the year, rationalization was also carried out at the production unit in Molndal, Sweden.
The objective is to achieve an operating margin of 10-11 percent at Cardo Pump within a two-year period.
The aftermarket area expanded strongly during the year with a rate of increase that was twice as high as that for other areas. Service workshops were established and acquired in countries that included the USA, the Republic of Ireland, the UK, France and Spain.
In the fourth quarter, orders received included one from the USA for a number of big submersible pumps for the treatment of process water at a new, major plant in the food industry. From a private company in water and wastewater management in Manila in the Philippines, an order was received for 23 big and 3 smaller submersible wastewater pumps. This order is to be seen as a breakthrough in the Philippine market. From the American paper maker Westwaco, an order was received worth approximately SEK 10 million relating to two complete systems for the measurement of paper quality.
At the end of the year, an agreement was signed on the acquisition of Swedmeter AB, one of Scandinavia's leading companies in the field of control engineering for water treatment processes etc. The company, which has a turnover of approximately SEK 30 million, manufactures and markets standardized products for purposes such as level and flow control, analysis, process control and remote monitoring for both municipal and industrial processes. Swedmeter is part of Cardo Pump as of January 2002.
January 2002 saw the acquisition of the Finnish company Nopon Oy, one of the world's leading manufacturers of products for aeration in connection with biological wastewater treatment. Nopon has a turnover of approximately SEK 120 million and employs 65 people. The company manufactures and markets fine-bubble aeration systems complete with associated compressors and mechanical aerators. The products are used in both municipal treatment plants and in treatment plants for various types of industries.
Cardo Rail
Cardo Rail is one of the world's largest manufacturers of brake systems and brake components for rail vehicles.
The inflow of orders amounted to SEK 3,023 million (2,584), which is a rise of 8 percent after adjustment for the effects of exchange rate movements.
Invoiced sales amounted to SEK 2,706 million (2,527), which adjusted for the effects of exchange rate movements is on a par with the previous year. Operating earnings amounted to SEK 245 million (213).
In the fourth quarter, a frame agreement was signed with the world's biggest car builder, Bombardier Transportation, relating to the delivery of the complete brake systems for Bombardier's new generation of electric commuter trains of the Talent type. The agreement covers equipment for a total of 1,200 cars, and a first order, worth SEK 75 million and relating to 193 cars, was received. Cardo Rail is thereby strengthening its position as a system supplier in Europe in the electrically driven commuter train area, which is the fastest growing segment in the rail market. At the end of the year, an order worth SEK 115 million was received from Bombardier's Italian company relating to complete brake systems for 100 locomotives for delivery to the Italian national railway company.
Liquidity and Financing
At year-end, the Group's liquid assets amounted to SEK 264 million (225). In addition, there are unutilized credit facilities of approximately SEK 3.5 billion (approximately 3.3).
Cash flow from operations amounted to SEK 509 million (776) after tax, which is equivalent to SEK 16.97 (25.87) per share. Adjusted for the effects of exchange rate movements on the change in working capital, cash flow was SEK 21.60 (28.20) per share after tax. The Group's gross investments, exclusive of company acquisitions, stood at SEK 305 million (300).
Net interest bearing debt fell to SEK 1,242 million (1,265).
Equity amounted to SEK 3,595 million (3,172), which is equivalent to SEK 119.84 (105.74) per share.
At year-end, the Group's equity ratio was 44.5 percent (43.8).
Personnel
The average number of employees in the Group was 8,179 (8,135).
Structural Changes
In January 2001, Cardo Door acquired all shares in the Danish dock loading equipment company Miflex Miljoexpert A/S with a turnover of approximately SEK 80 million.
Accounting and Valuation Principles
The accounting principles were changed during the year in consequence of the new recommendations RR 9 and RR 11 of the Swedish Financial Accounting Standards Council in respect of income taxes and revenues respectively. The new accounting principles have resulted in SEK 42 million being credited to the opening balance for Group equity. The comparative figures for the year 2000 have been adjusted.
Parent Company
The parent company's earnings after financial items amounted to SEK 74 million (109), gross investments to SEK 1 million (0) and liquid assets to SEK 0 million (1).
Dividend The Board of Directors and President propose a dividend of SEK 8.00 (7.00) per share for the financial year 2001, which requires SEK 240 million (210). The dividend is equivalent to 54 percent (41) of earnings per share.
Election Committee
An election committee has been appointed consisting of representatives of the Company's three largest owners. The Chairman of the Board is the convener. The duties of the election committee are to submit proposals to the Annual General Meeting in respect of the election of the Board of Directors, the appointment of auditors whenever applicable and the determination of fees. The election committee that has been appointed ahead of the 2002 Annual General Meeting consists of:
Fredrik Lundberg (Chairman of Cardo), L E Lundbergforetagen AB, Stockholm Tomas Nicolin, National Swedish Pension Fund, Third Fund Board, Stockholm Peter Rudman, Nordea Kapitalforvaltning AB, Stockholm
Annual General Meeting and Financial Reports
The Annual General Meeting will be held in Malmo on Monday, April 8 2002 at 5 pm at Storan, Malmo Musikteater.
- The Annual Report will be distributed in early March - The first quarter Interim Report will be published on May 6 - The half year Interim Report will be published on August 14 - The third quarter Interim Report will be published on November 7
Market Prospects
Market prospects for the USA and Europe, and there Germany in particular, continue to be difficult to assess. For Cardo's part, fluctuations in the business cycle affect mostly Door's activities and less than half of Pump's. A large part of Cardo's other activities is related to investments in environment and infrastructure, which do not usually follow the trend of the general business cycle. This is also true of service and the aftermarket, which will constitute an ever greater part of Cardo's activities in the future. For the whole of 2002, Cardo is considered to be capable of showing greater growth than that of the underlying market.
Enclosures:
1. Invoiced sales, operating earnings and operating margin by
business area
2. Consolidated income statement and balance sheet in brief
3. Business area financial summary Geographical distribution of
invoiced sales
4. Consolidated cash flow statement in brief
5. Group financial summary
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.
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