Interim Report Jan-Jun 1998

The attached interim report for the first six months of 1998 includes the following information: 1 Income after financial items amounted to SEK 270 M (157) . Non- recurring items have positively affected income in an amount of SEK 159 M (0). Sales increased by approx. 15 percent, amounting to SEK 5,993 M (5,218). The level of orders received rose by approx. 10 percent, amounting to SEK 4,863 M (4,405). Figures in parentheses refer to 1997 "Group operating income continues to note a favourable trend, totalling SEK 274 M (88) for the period, including non-recurring items. Adjusted for non- recurring items, operating income totals SEK 115 M (88). Of this sum, SEK 80 M (70) was generated during the second quarter. The improvement derives mainly from the operations of business areas Defence and Commercial Aviation Services. The favourable trend of earnings further confirms the earlier forecast and the net income for 1998 is expected to exceed SEK 500 M." "The comprehensive restructuring programme, focused on a consolidation of Group resources and increased internationalization, continues. The first three months of the year saw a number of forward-looking investments, dedicated to strengthening the Group's market positions in the U.S.A. and Australia. The second quarter has seen a breakthrough with respect to collaboration between Nordic defence industries, with agreements being signed concerning the formation of an ammunition company as well as of a propellants and explosives company on a Nordic basis. Both companies will enjoy a commanding position in the Nordic countries, and have every prospect of becoming leading players in Europe." "Celsius has also noted considerable success in two European collaboration projects that are especially important to the Group. The German decision to invest in the continued development of the TAURUS air-to-surface missile will be of major significance to the Celsius Group in the coming years. The project will involve continuing collaboration between Celsius and Germany's DASA-LFK. France and Sweden have recently also placed a joint order for preparatory work prior to planned series production of the 155 BONUS sensor-fuzed anti-armour shell, developed jointly by Bofors Weapons Systems and France's GIAT Industries. Collaboration projects of this type will become increasingly common within the European Union. A freer approach to the sale and purchase of defence materiel within the EU, based on sound commercial principles, will increase the number of market opportunities open to Celsius," concludes Lars G. Josefsson. For further details, please contact Celsius CEO Lars G. Josefsson on +46 8 463 00 00, or Celsius' Executive Vice President, Nils-Ove Andersson, also on +46 8 463 00 00. The full report including tables and figures is now aviable for download on http://www.bit.se/