Interim Report, January - June 2004

• Inflow of orders: SEK 4,002 million (3,897)
• Net sales: SEK 3,691 million (3,703)
• Net earnings: SEK 65 million (104)
• Earnings per share: SEK 2.16 (3.45)
• New marketing organization in Pump

The Group’s inflow of orders amounted to SEK 4,002 million (3,897), an increase of 4 percent after
adjustment for the effects of exchange rate movements.

Net sales amounted to SEK 3,691 million (3,703), an increase of 1 percent after adjustment for the
effects of exchange rate movements.

Operating earnings amounted to SEK 102 million (155) during the period. The lower earnings are mainly
due to the product mix and costs for increased activities in both sales and product development.

In order to increase its competitiveness and rate of geographical expansion, the Pump field within Cardo
Pump will change its sales organization. The measures include implementation of a new, geographically
based organization, which involves the sales resources being moved nearer the customers, and an
expansion of the organization in Asia. The measures will create better conditions for increasing organic
growth at the same time as they are expected to bring an annual net saving of SEK 30-40 million,
whereof the main part as of 2005. The cost of the measures is expected to amount to SEK 50-70 million
and will be charged to earnings for the second half-year.

Group earnings after financial items amounted to SEK 93 million (148). The impact of exchange rate
movements on earnings was only marginal.

Net earnings amounted to SEK 65 million (104), which is equivalent to SEK 2.16 (3.45) per share.
Cash flow from operations was SEK 126 million (265) after tax, which is equivalent to SEK 4.20 (8.83)
per share.

Cardo Door
The inflow of orders increased as far as industrial doors, dock loading systems and service were
concerned. For garage doors, the inflow of orders was on a par with the corresponding period the
previous year. For the business area as a whole, the increase was 5 percent after adjustment for the
effects of exchange rate movements.

Net sales amounted to SEK 2,317 million (2,323), an increase of 1 percent after adjustment for the
effects of exchange rate movements.

Operating earnings amounted to SEK 65 million (85). Earnings were affected by costs for increased
activities in both sales and product development.

Sales companies in Austria and also Denmark were consolidated during the period. These measures
are part of the strategy of making the sales organization more efficient and concentrating sales activities
for industrial products under the leading brand, Crawford.

Cardo AB (publ). Interim Report January-June 2004

Cardo Pump
The inflow of orders rose in the water and wastewater segment, while it fell for building services and
industry. For the business area as a whole, the inflow of orders increased by 4 percent after adjustment
for the effects of exchange rate movements.

Net sales amounted to SEK 1,374 million (1,380), an increase of 1 percent after adjustment for the
effects of exchange rate movements.

Operating earnings amounted to SEK 69 million (100). Earnings were adversely affected by the product
mix in the period.

Cardo Pump has enhanced its internal efficiency by rationalization in a number of different areas,
resulting in improved profitability in recent years. Decisions have also been taken on a concentration of
pump manufacture in Sweden.

In order to increase its competitiveness and rate of geographical expansion, the Pump field within Cardo
Pump will change its sales organization. The measures include implementation of a new, geographically
based organization, which involves the sales resources being moved nearer the customers, and an
expansion of the organization in Asia. The marketing activities that are pursued today under the ABS
and Pumpex trademarks will be concentrated on the ABS brand and a single sales channel, which
means that the parallel sales organizations in Sweden, France, Germany and the USA will be merged.

A sales company will be formed focusing on customers in the pulp and paper industry globally. The
measures will create better conditions for increasing organic growth at the same time as they are
expected to bring an annual net saving of SEK 30-40 million, whereof the main part as of 2005. The
cost of the measures is expected to amount to SEK 50-70 million and will be charged to earnings for the
second half-year.

Liquidity and financing
At June 30, the Group’s liquid funds stood at SEK 121 million (158) compared with SEK 171 million at
the beginning of the year. In addition, there are unutilized credit facilities of approximately SEK 1 billion
(approximately 2.0).

The Group’s gross investments, excluding company acquisitions, stood at SEK 127 million (154).
Net interest bearing debt at June 30 amounted to SEK 527 million (491) compared with SEK 179 million
at the beginning of the year.

Equity amounted to SEK 2,691 million (2,745), which is equivalent to SEK 89.70 (91.51) per share.
The Group’s equity ratio at June 30 was 52.7 percent (52.8).

Personnel
The number of employees in the Group at June 30 was 5,762 (6,026).

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 Stockholmsbörsen 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.

Accounting principles
The interim report has been drawn up in accordance with recommendation RR 20 of the Swedish
Financial Accounting Standards Council concerning interim reports. The accounting principles used are
the same as in the annual report for 2003 except in relation to accounting for benefit-based pension
schemes, for which the change is described below.

Cardo AB (publ). Interim Report January-June 2004

As of January 1 2004, Cardo applies the Swedish Financial Accounting Standards Council’s
recommendation RR 29, Employee Benefits, which in all essentials agrees with IAS 19, Employee
Benefits. Pensions and other remuneration after retirement have previously been accounted for in
accordance with the local regulations in each country. The application of RR 29 involves a change of
accounting principle and the effect of the change has been recorded directly against equity. The
changeover to RR 29 has involved the Group’s provisions for pensions increasing by SEK 74 million,
which, after taking deferred tax into consideration, has reduced the Group’s equity by SEK 57 million
net. In accordance with the transition rules of the recommendation, Cardo has not recalculated figures
for previous financial years in respect of the new recommendation.

The parent company
The parent company's earnings after financial items amounted to SEK -9 million (-7), its gross
investments to SEK 0 million (0) and its liquid funds to SEK 0 million (1) as against SEK 0 million at the
beginning of the year.

Market prospects
The markets for Cardo’s business stabilized during the first half-year. The general economic upturn now
seems more assured and is reflected in an increased demand for construction-related products, which it
is assessed could continue.

Malmö, Sweden, August 10 2004
Cardo AB (publ)

Kjell Svensson
President and CEO

This report has not been subjected to special examination by the Company’s auditors.
Cardo's interim report for January-September will be published on November 2 2004.

Enclosures:
1. Net sales, earnings and operating margin by business area
2. Consolidated income statement and balance sheet in brief
3. Consolidated cash flow statement in brief
4. Group financial summary


For further information, please contact:
Kjell Svensson, President and CEO, phone +46 40 35 04 53, +46 40 35 04 00
Göran Axeheim, Executive Vice President and CFO, phone +46 40 35 04 42, +46 40 35 04 00
Christer Roskvist, Head of Public Relations, phone +46 40 35 04 25, +46 40 35 04 00


Cardo is an international engineering group and a leading supplier of high-quality products and systems with a
good aftermarket. Cardo holds strong positions in the markets for doors and pumps. Cardo has subsidiaries in
about 30 countries with the focal point resting in western Europe.