Report on Operations 1999

- Invoiced sales amounted to SEK 9,489 million (8,994), a rise of 1 percent after adjustment for the effects of exchange rate movements and company acquisitions.

- Operating earnings amounted to SEK 783 million (527).

- Earnings after financial items and minority share were SEK 674 million (676). Earnings for 1998 included net one-off income amounting to SEK 148 million.

- Earnings per share after full tax were SEK 17.36 (14.62).

- Cash flow from operations rose to SEK 30.00 (14.50) per share.

- The Board of Directors proposes a dividend of SEK 6.00 (5.00) per share.


The Group's inflow of orders stood at SEK 9,605 million (8,942), which is a rise of approximately 1 percent for the current structure of the Group after adjustment for the effects of exchange rate movements.

Invoiced sales amounted to SEK 9,489 million (8,994). Adjusted for the effects of exchange rate movements, this was an increase of 6 percent. Company acquisitions accounted for 5 percentage points of this figure. Invoiced sales to customers outside Sweden accounted for 92 percent (92) of total Group invoicing.

Operating earnings rose to SEK 783 million (527), which is equivalent to an operating margin of 8.2 percent (5.9). The improvement in operating earnings is mainly attributable to the positive earnings trend at Cardo Rail. Cardo Door's earnings were somewhat higher than last year, while lower delivery volumes adversely affected the profitability of Cardo Pump. Cardo Rail's earnings include SEK 38 million that was reversed from the provision amounting to SEK 70 million established in the financial statements for 1997 for risks attributable to warranty matters relating to certain deliveries completed during previous years. The reversal was carried out since the final requirement has now been estimated at SEK 32 million. Operating earnings for 1998 included a write-down by SEK 85 million of assets attributable to Tebel.

Earnings after financial items were SEK 695 million (654), a profit margin of 7.3 percent (7.3), and earnings after financial items and minority share were SEK 674 million (676). Last year, financial items included a capital gain of SEK 233 million.

The Group's tax expense amounted to SEK 177 million (249), which is equivalent to a tax rate of 25 percent (38) on earnings after financial items. Certain one-off effects influenced tax expense for both 1999 and 1998. Excluding these one-off effects, the Group's tax rate is estimated at approximately 32 percent.

Exchange rate movements during the year had only a marginal impact on Group invoicing and earnings after financial items.

Earnings per share after full tax were SEK 17.36 (14.62).

Return on capital employed was 18.3 percent (18.9), and return on equity amounted to 21.6 percent (20.6).

Cash flow from operations after tax was SEK 30.00 (14.50) per share. Adjusted for the effects of exchange rate movements on the change in working capital, cash flow was SEK 27.43 (19.27) per share.

At the end of 1999, Cardo entered into an agreement with ThyssenKrupp on the acquisition of its 40-percent holding in Cardo BSI Rail AB. Under the previously applying option agreement of 1997, Cardo had the opportunity to acquire the shares as of January 2000. The agreement resulted in Cardo taking over the shares as of December 31 1999 at a price of DEM 100 million, and Cardo is now the owner of 100 percent of the shares in the company.

In accordance with the decision in December 1998 to refine operations in the rail sector to include only those product areas covered by Cardo BSI Rail AB, the shares in the Dutch train-door company Tebel were disposed of at the end of the year.