INTERIM REPORT JANUARY – SEPTEMBER 2008
INCREASED SALES AND IMPROVED EARNINGS
• Inflow of orders: SEK 7,322 million (7,172)
• Net sales: SEK 6,855 million (6,576)
• Operating earnings: SEK 472 million (332)
• Net earnings: SEK 290 million (208)
• Net earnings per share: SEK 9.91 (6.92)
• Cash flow from operating activities after tax: SEK 536 million (180)
• Repurchase of own shares: SEK 445 million
Cardo continues to show an increased inflow of orders and net sales for the first nine months of 2008. During the same period, net earnings improved to SEK 290 million.
During the third quarter, net sales and operating earnings rose. The inflow of orders remained positive in the Wastewater Technology Solutions division. For the Group’s door divisions, consistent price rises in combination with weakened demand had an adverse effect on the inflow of orders compared with the corresponding period the previous year.
The service operation continues to enjoy a good trend.
Operating earnings were affected in the sum of SEK -13 million by the movement of the US dollar during the period.
RESULTS - COMPLETE REPORT
Please see the enclosed pdf document for the complete report where all tables and summaries can be found. The report is available at www.cardo.com
INFLOW OF ORDERS, NET SALES AND EARNINGS
Third quarter 2008
During the third quarter, the inflow of orders amounted to SEK 2,247 million (2,337), down 4% after adjustment for the effects of exchange rate movements. The inflow of orders fell in all markets except for Latin America and the Middle East. Wastewater Technology Solutions shows an increased inflow of orders. Price rises continued to be implemented with the aim of improving the operating margin.
Net sales amounted to SEK 2,325 million (2,186), up 6% after adjustment for the effects of exchange rate movements.
Operating earnings amounted to SEK 189 million (150, excluding restructuring costs).
Period January – September 2008
During the first nine months of the year, the inflow of orders amounted to SEK 7,322 million (7,172), up 2% after adjustment for the effects of exchange rate movements. Except for Latin America, most regions show positive growth in comparison with the previous year. The service operation continues to develop positively.
Net sales amounted to SEK 6,855 million (6,576), up 4% after adjustment for the effects of exchange rate movements.
Operating earnings improved to SEK 472 million (424, excluding restructuring costs). Operating earnings were affected in the sum of SEK -13 million by the movement of the US dollar during the period.
Net earnings amounted to SEK 290 million (208), which is equivalent to SEK 9.91 (8.80, excluding restructuring costs) per share.
Cash flow from operating activities was SEK 536 million (180) after tax, which is equivalent to SEK 18.33 (6.00) per share.
OTHER MATTERS
Erroneous inventory accounting 2006
During the quarter, an error was identified in the inventory accounting in the Door & Logistics Solutions division. The error was found to relate to 2006, but it is not impossible that the error also dates from previous years. An investigation is under way to finally determine when the error arose. In accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, the error has been corrected retroactively by restating the 2006 earnings, in which connection operating earnings have been charged with SEK 41 million, affecting earnings for 2006 in the sum of SEK 29 million after the effect of tax. Items in the balance sheet and the relevant key figures have also been restated for 2006 and 2007. In the balance sheet, the inventory value has been adjusted downwards by SEK 41 million, the deferred tax asset, which is reported under the heading Financial fixed assets, has been adjusted upwards by SEK 12 million and equity has been reduced by SEK 29 million. It is not impossible that the adjustment will be changed on completion of the investigation.
Repurchase of shares
At the 2008 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% of all shares in the Company. 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. During the period January-September, Cardo repurchased 2,868,000 shares, equivalent to 9.6 percent of the number of outstanding shares. The equity in the parent company and the Group has therewith decreased by SEK 445 million.
INVITATION TO CONFERENCE CALL TODAY, NOVEMBER 12, AT 10.00 P.M.
Cardo’s President and CEO Peter Aru will comment on the interim report during a conference call today at 10.00 a.m. It will be possible to take part and ask questions via the telephone number +46 (0)8 535 264 40. The conference may also be followed via a webcast at www.cardo.com or www.financialhearings.com, where you will also be able to listen and see the presentation slides afterwards. The conference call will be held in Swedish.
Calendar 2009
February 5 - Report on Operations 2008
April 6 - Annual General Meeting in Malmö, Sweden
May 8 - Interim Report January – March 2009
August 13 - Interim Report January – June 2009
Interim Report January – September 2009 November 13
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