Interim report 1 January - 30 June 2003

Interim report, six months ended June 30, 2003 - Sales increased by 3% and amounted to SEK 818 M (793). - Pre-tax profit amounted to SEK 36 M (36). - Earnings per share before dilution amounted to SEK 2.44 (2.41). - A number of organic products were launched. - The forecast for a continued improvement in earnings remains unchanged.

Trend in the second quarter Sales amounted to SEK 425 M (393). The somewhat higher sales were primarily due to the fact that Easter deliveries during 2003 took place during the second quarter. Sardus' pre-tax profit for the second quarter of 2003 amounted to SEK 16 M (18). The corresponding figure for the preceding year included capital gains of SEK 3 M from the sale of fixed assets. The strong trend in the Danish business unit 3-Stjernet offset the somewhat weaker trend in the Swedish units. Earnings January - June 2003 The positive trend from the 2002 fiscal year also continued during the first six months of 2003, with a retained high level of earnings. Pre-tax profit was unchanged at SEK 36 M (36). The preceding year's earnings included capital gains of SEK 3 M from the sale of fixed assets. Excluding capital gains during the first half of last year, profit increased by 9%. Earnings per share amounted to SEK 2.44 (2.41). Sales amounted to SEK 818 M (793). Sales increased in the business units Charkdelikatesser, 3-Stjernet and Falbygdens Ost. A continued favorable product mix and stable cost trends contributed to favorable earnings. In general, sales and marketing costs increased in conjunction with active product launches on the market. Goodwill amortization for the period totaled SEK 14 M (15), while net financial items resulted in an expense of SEK 18 M (expense: 19). Strategic investments Within Sardus' product areas, new consumer patterns are emerging, and changes are taking place in the work methods of retailers. As part of a long-term strategic effort, measures are being taken in both product development and production with a focus on new product ranges for specific target groups. As a consequence, costs for product development, marketing and manufacturing increased. Share repurchase In accordance with the decisions of the Annual General Meetings in April 2002 and March 2003, Sardus continued its share repurchase program during the second quarter by acquiring an additional 220,000 shares at an average price of SEK 83.50. The number of repurchased shares thus amounts to 397,696, while the number of outstanding shares is 9,602,304. In total, the average repurchase price amounted to SEK 80. The objective of the repurchase program is to continuously adapt Sardus' capital structure to capital requirements and to enable financing, in whole or in part, of company acquisitions and redemption of employee warrants. Business units Pastejköket Sales for the first half of the year amounted to SEK 214 M (218), while operating profit before goodwill amortization amounted to SEK 28 M (34). The decline in profit was due to lower sales and increased overhead costs, primarily relating to product and process development and to meeting increasing competition. Currently a number of organic products are being introduced into the product line to satisfy growing consumer interest. Charkdelikatesser Sales for the first half of the year amounted to SEK 233 M (229), while operating profit before goodwill amortization amounted to SEK 17 (18). Operating profit for the corresponding period during the preceding year included capital gains from the sale of fixed assets amounting to SEK 3 M. Changes in the product mix contributed to improving earnings excluding capital gains. The joint sales campaign with the soup producer Souperb that was initiated during 2002 continued to develop positively during the first half of 2003. Organic jellied veal and smoked sausage products were introduced in early 2003. The classic Cognac Medwurst product was launched as a light product. 3-Stjernet A/S Sales for the fist half of the year amounted to SEK 142 M (133), while operating profit before goodwill amortization amounted to SEK 26 M (18). The strong improvement in earnings during the first quarter continued during the second quarter. Increased sales of low-fat products under the "Det lette bord" brand and changes in the product mix contributed to the improvement. Sardus Foodpartner-Catering Sales for the first half of the year amounted to SEK 59 M (71), while operating profit before goodwill amortization amounted to SEK 2 (3). The lower sales were in part due to the strike in schools and municipalities during April and May and in part to changes in the competitive situation. Falbygdens Ost Sales for the first half of the year amounted to SEK 185 M (158), while operating profit before goodwill amortization amounted to SEK 6 M (8). The lower profit was related to an increased proportion of sub-contracted packaging, as well as costs relating to future expansion. New market ventures New low-fat sandwich toppings were launched in Sweden and Denmark during 2002 and 2003. Through the establishment of the "Det lette bord" brand in Denmark and the launch of the same products in Sweden under the "Det lätta bordet" brand, Sardus has satisfied a growing consumer demand. The Pastejköket business unit also launched several light products under the brands Arboga, Pastejköket and Lindbergs. To meet increased demand for smaller packages, Pastejköket products packaged in twin packs (2 x 75g) were launched during 2002. The first half of the year was characterized by aggressive launches with organic products being launched in several business units during 2003. Liquidity and net financial items The Group's liquid funds on June 30, 2003 amounted to SEK 42 M (31). In addition, there was an unutilized credit facility of SEK 304 M (356). Net financial items amounted to an expense of SEK 18 (expense: 19). Investments The Group's total investments during the first half of the year amounted to SEK 42 M (23). The increase was because the major share of the year's investments were completed during the first half of 2003. Goodwill Goodwill amortization for the first half of the year amounted to SEK 14 M (15). Brand strength and lifetime are reviewed in every acquisition and the rate of amortization is adjusted accordingly. Accounting principles This interim report was prepared in accordance with the recommendation RR20 Interim Reports, as issued by the Swedish Financial Accounting Standards Council. The accounting principles and calculation methods used in the interim report are the same as those used in the most recent annual report. Outlook for 2003 Sardus' markets are relatively unaffected by changes in general economic conditions. Consumption and demand patterns - as well as competitive conditions - are expected to remain stable throughout 2003. Market positions are strong with market shares increasing over several years. These factors, combined with the extended product range, offer the potential for continued growth. Consequently, in the current market situation, the favorable trend to date in 2003 provides conditions for continuing improvement in earnings. Helsingborg July 17, 2003 AB Sardus (publ.) For further information, contact Ragnar Bringert, President, +46 42 37 02 50, or +46 70 593 62 73.