Report on Operations 1998

Report on Operations 1998 Earnings after financial items and minority interest rose to SEK 676 million (511). Exclusive of net one-off income, earnings were SEK 528. Earnings per share after full tax were SEK 14.62 (11.58). Exclusive of net one-off income, earnings were SEK 12.14 per share. Equity per share amounted to SEK 79.09 (68.58). The Board of Directors proposes a dividend of SEK 5.00 (4.75) per share. The Group's inflow of orders stood at SEK 8,942 million (8,162), which is on a par with last year for the current structure of the Group after adjustment for the effects of exchange rate movements. Invoiced sales amounted to SEK 8,994 million (7,983). Adjusted for the effects of exchange rate movements, the increase was approximately 10 percent. Company acquisitions accounted for approximately 8 percentage points of this figure. Invoiced sales to customers outside Sweden accounted for 92 percent (91) of total Group invoicing. In geographical terms, invoiced sales were distributed as follows: 85 percent (84) in Europe, 6 percent (6) in North America, 5 percent (5) in Asia and 4 percent (5) in other countries. In December 1998, it was decided that operations in the rail sector would be refined to include only those product areas covered by Cardo BSI Rail, in which Cardo has a 60-percent holding and Thyssen 40 percent. The 25-percent shareholding in AAE Cargo in Switzerland was sold, and at the same time a decision was made to seek a new owner for the wholly owned subsidiary Tebel. At the turn of the year 98/99, operative responsibility for Tebel was therefore transferred from Cardo Rail to the parent company. Group operating earnings amounted to SEK 527 million (567), which is equivalent to an operating margin of 5.9 percent (7.1). The fall in operating earnings is mainly due to the earnings trend at Cardo Rail during the first half of the year and to a write-down by SEK 85 million of the assets attributable to Tebel. For Cardo Door, the acquisition of Normstahl has principally contributed to improved operating earnings, while the profitability of Cardo Pump was adversely affected by the downturn in the pulp and paper industry. Earnings after financial items were SEK 654 million (504), a profit margin of 7.3 percent (6.3), and earnings after financial items and minority interest was SEK 676 million (511). Financial items include a capital gain of SEK 233 million from the sale of the shares in AAE Cargo. Net interest expense has increased as a result of company acquisitions carried through. Exclusive of net one-off income, earnings after financial items and minority share was SEK 528 million. The Group's tax expense amounts to SEK 249 million (166), which is equivalent to a tax rate of 38 percent (33) on earnings after financial items. The high percentage rate for 1998 is due both to an uneven generation of earnings by Cardo Rail and to the fact that the write-down by SEK 85 million of assets attributable to Tebel was not reported with deferred taxes recoverable. Exchange rate movements have had a beneficial impact on Group invoicing to an extent of approximately 2 percent and are calculated to have had a marginally positive effect on earnings after financial items. Earnings per share after full tax rose to SEK 14.62 (11.58). Exclusive of net one-off income, earnings were SEK 12.14 per share. Return on capital employed was 18.9 percent (18.0), and return on equity amounted to 20.6 percent (18.0). ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/02/18/19990218BIT00580/bit0001.xls Tables and figures http://www.bit.se/bitonline/1999/02/18/19990218BIT00580/bit0002.doc Entire report http://www.bit.se/bitonline/1999/02/18/19990218BIT00580/bit0003.pdf Entire report