Year-end report January - December 2006 Strong fourth quarter despite negative profit in Sardus Lätta Måltider

Sardus’ profit for the 2006 financial year totaled SEK 37 M (60), which is in line with the September estimate. The profit decline is fully attributable to the negative profit in the Sardus Lätta Måltider business unit. Net sales increased by 10 percent during the year to SEK 2,135 M (1,934).
The fourth quarter was characterized by a strong sales increase of 10 percent and profit for the quarter rose to SEK 17 M (3).
Earnings per share for 2006 were SEK 2.74 (4.25). The Board of Directors proposes a dividend of SEK 1.50 (3.00) per share. The long-term objectives of 15 percent annual sales growth and 7-8 percent operating margin remain unchanged.

New strategy and heavy rationalization program have commenced
All business units other than Sardus Lätta Måltider showed a stable or positive profit trend during the year. During the fourth quarter sales and profit increased strongly. The negative profit for Sardus Lätta Måltider has however lead to a lower profit for the 2006 financial year for the Group as a whole than 2005. A powerful action program has been initiated to change the trend in the unit. The program has led to management changes along with a reduction in employee numbers in Sardus Lätta Måltider of 70 people during early 2007. On April 1, 2007, Petri Salminen will take up the position as new manager of Sardus Lätta Måltider.

In general, 2006 was characterized by a new strategy and the start of a long-term corporate savings program focusing on supply chain costs such as purchasing, production and logistics. The program consists of a range of measures which combined will generate annual cost savings of SEK 60 M during the next 3-5 years. The program will start to take effect during 2007. The new strategy also involves centralizing certain corporate functions, a comprehensive brand review, and heavily increased investment in marketing and product development.

“We are already starting to see a breakthrough from our new strategy and savings program. We will be following it up in a systematic and long-term manner. At the same time, our long-term growth strategy still holds and our intention is to grow organically as well as through acquisition,” says Sardus CEO Per Strömberg.

Helsingborg, January 31, 2007
AB SARDUS
Per Strömberg
Chief Executive Officer