INTERIM REPORT JANUARY-JUNE 2007
CARDO CONTINUING TO DEVELOP ACCORDING TO PLAN
• Inflow of orders: SEK 4,835 million (4,426)
• Net sales: SEK 4,390 million (3,948)
• Operating earnings excluding restructuring costs: SEK 275 million (188)
Restructuring costs relate to closure of production unit and amount to SEK 83 million
• Net earnings including restructuring costs: SEK 117 million (124)
Cardo is following its declared strategy and developing according to plan. The first half-year saw a continued good trend. Inflow of orders and net sales are continuing to rise for the ninth and eighth quarter in succession respectively.
The strong inflow of orders during the first quarter was followed by a lower rate of increase in the second quarter. Organic growth for the first half-year amounts to 9%, and the backlog of orders has increased by 24% since the turn of the year.
The organic increase in sales for the first half-year amounts to 12%. The earnings trend is as planned with an improved operating margin for the seventh quarter in succession. All divisions are showing improvements in earnings compared with the previous year.
RESULTS – COMPLETE REPORT
Please see the enclosed pdf document for the complete report where all tables and summaries can be found. The report is also available at www.cardo.com
INFLOW OF ORDERS, NET SALES AND EARNINGS
Second quarter 2007
During the second quarter, the inflow of orders amounted to SEK 2,426 million (2,334), up 5% after adjustment for the effects of exchange rate movements. Organic growth was 4%. Growth was good in Europe, but we saw a slowdown in Germany in both the door divisions after the strong first quarter. In the USA, we also saw less activity than during the corresponding period the previous year. Latin America and the Middle East continued to enjoy a strong trend, while the rate of growth in Asia was lower in comparison with 2006.
Net sales amounted to SEK 2,311 million (2,136), up 10% after adjustment for the effects of exchange rate movements. Organic growth was 9%.
Operating earnings improved to SEK 173 million (145).
Period January – June 2007
During the first half-year, the inflow of orders amounted to SEK 4,835 million (4,426), up 11% after adjustment for the effects of exchange rate movements. Organic growth was 9%. The first half-year saw positive growth in all major markets in Europe and a continued strong trend in eastern Europe. Other markets are developing well, except for North America, where the weak state of the construction market had an adverse effect.
Net sales amounted to SEK 4,390 million (3,948), up 13% after adjustment for the effects of exchange rate movements. Organic growth was 12%.
Operating earnings excluding restructuring costs improved to SEK 275 million (188).
Net earnings, including restructuring costs, amounted to SEK 117 million (124), which is equivalent to SEK 3.89 (4.13) per share.
Cash flow from operating activities was SEK 134 million (116) after tax, which is equivalent to SEK 4.47 (3.87) per share.
RESTRUCTURING PROGRAM GOING ACCORDING TO PLAN
The restructuring program aimed at rationalizing the operation and for which SEK 201 million was charged to the fourth quarter 2005 is going according to plan. The expected effects in terms of lower costs are estimated at SEK 55 million for the full year 2007.
OUTLOOK
The outlook from the interim report for January-March 2007 still applies:
We assess that the market trend for Cardo’s products and services will be generally relatively favorable during 2007 thereby providing conditions for continued organic growth for the Group as a whole. We expect the prices of raw materials to remain high and that there will be continuing difficulties in passing on price rises to the customers for the Door & Logistics Solutions and Residential Garage Doors divisions.
INVITATION TO FINANCIAL HEARINGS TODAY, AUGUST 15, AT 10.00 AM
Cardo’s President and CEO Peter Aru will comment on the interim report at a conference today in Stockholm at 10.00 am. Notification of intention to attend may be made at www.financialhearings.com or via e-mail to hearings@financialhearings.com. It will also be possible to take part and ask questions via telephone number +46 (0)8 5052 0110. The conference may also be followed via a webcast at www.cardo.com or www.financialhearings.com. The conference will be held in Swedish.
For further information, please contact:
Peter Aru, President and CEO, tel +46 40 35 04 53
Ulf Liljedahl, CFO, tel +46 40 35 04 42
Maria Bergving, Senior Vice President Communications and Investor Relations,
tel +46 40 35 04 25, +46 70 602 61 81, maria.bergving@cardo.com