Interim report, January - March 2003

5/6/2003 7:12 AM EST

CARDO AB


· Invoiced sales: SEK 1,801 million (2,623)

· Net earnings: SEK 41 million (51)

· Earnings per share: SEK 1.35 (1.70)

· Earnings after financial items in the current operations
amounted to SEK 58 million (59)

· Cash flow remained good

The Rail business area was disposed of on September 25 2002 and is
included in the consolidated financial statements for the previous year.
The income statement and cash flow broken down by current operations and
the operation disposed of are shown in enclosure 4.

The Group's inflow of orders amounted to SEK 1,887 million (2,664).
Adjusted for the effects of exchange rate movements and the disposal of
Rail, this is a decrease of 5 percent, which is entirely attributable to
Cardo Door. Company acquisitions made a positive contribution of 1
percentage point.

Invoiced sales amounted to SEK 1,801 million (2,623). Adjusted for the
effects of exchange rate movements and the disposal of Rail, this
represents a decrease of 5 percent. Company acquisitions made a positive
contribution of 1 percentage point.

Net earnings amounted to SEK 41 million (51), which is equivalent to SEK
1.35 (1.70) per share.

Current operations
After the disposal of the Rail business area, the Group's operations
consist of the Cardo Door and Cardo Pump business areas.

Operating earnings in the current operations amounted to SEK 56 million
(68). Pump's earnings were on a par with the previous year, while Door's
were adversely affected by the weak state of the construction market in
Europe.

Earnings after financial items amounted to SEK 58 million (59). The
impact of exchange rate movements on earnings was only marginal.

Net earnings amounted to SEK 41 million (42), which is equivalent to SEK
1.35 (1.40) per share.

Cardo Door
Cardo Door's inflow of orders was, after adjustment for the effects of
exchange rate movements, 8 percent lower than the previous year. Company
acquisitions made a positive contribution of 1 percentage point.

Demand for industrial doors and dock loading systems was considerably
weaker than during the corresponding period the previous year. The trend
for service, which accounts for approximately a quarter of Cardo Door's
turnover, remained good. For residential garage doors, demand was
somewhat lower than the previous year.

Invoiced sales amounted to SEK 1,153 million (1,243), which adjusted for
the effects of exchange rate movements is a decrease of 5 percent.
Company acquisitions made a positive contribution of 1 percentage point.
Operating earnings amounted to SEK 41 million (53).

The measures that were initiated during the fourth quarter of 2002 with
a view to reducing costs and enhancing efficiency at Door are expected
to give an annual improvement in earnings of approximately SEK 30
million and to take effect gradually during 2003, achieving full effect
as of 2004. During the first quarter, the effect of the measures was
marginal.

January 2003 saw the acquisition of the French garage door distributor
SEA B2L. This company, which has a turnover of approximately SEK 70
million and employs roughly 30 people, strengthens the position of Cardo
Door in the French market for residential garage doors and supplements
its product range for the consumer sector with automatic gate control
devices.

Cardo Pump
The inflow of orders was, after adjustment for the effects of exchange
rate movements, on a par with the previous year.

In the water and wastewater segment, demand during the period was lower
than the previous year, particularly as regards big wastewater pumps.
Demand in the building services segment was on a par with the previous
year, while it increased from the process industry. In the USA, the
market situation stabilized during the first quarter and demand was on a
par with the corresponding period the previous year.

Invoiced sales amounted to SEK 648 million (722), which adjusted for the
effects of exchange rate movements is 6 percent lower than the previous
year. Operating earnings amounted to SEK 30 million (30).

Liquidity and financing
At March 31, the Group's liquid funds stood at SEK 922 million (219)
compared with SEK 922 million at the beginning of the year. In addition,
there are unutilized credit facilities of approximately SEK 3.0 billion
(3.2).

Cash flow from operations was SEK 174 million (229) after tax, which is
equivalent to SEK 5.80 (7.63) per share. Adjusted for the effects of
exchange rate movements on the change in working capital, cash flow was
SEK 5.67 (5.03) per share after tax. The Group's gross investments,
excluding company acquisitions, stood at SEK 79 million (65). The level
of investment was higher than the previous year in consequence of the
ongoing construction of a new production line for residential garage
doors in Torslanda, Sweden.

Net liquid funds at March 31 amounted to SEK 681 million (-1,484)
compared with SEK 593 million at the beginning of the year.

Equity amounted to SEK 3,925 million (3,497), which is equivalent to SEK
130.85 (116.56) per share.

The Group's equity ratio at March 31 was 65.3 percent (43.2).

After the end of the period, the Annual General Meeting declared a
dividend totaling SEK 40.00 per share as proposed by the Board of
Directors and the President. Payment was made on April 15. After the
payment totaling SEK 1,200 million, the Group's equity ratio amounts to
approximately 50 percent.

Personnel
The number of employees in the Group at March 31 was 6,097 (8,173).

Company acquisitions
As of January 2003, Cardo Door includes the acquired company SEA B2L,
which has a turnover of approximately SEK 70 million.

Accounting principles
The report has been drawn up in accordance with recommendation RR 20 of
the Swedish Financial Accounting Standards Council concerning interim
reports. The accounting principles used are the same as in the annual
report for 2002 except for the new recommendations of the Swedish
Financial Accounting Standards Council effective as of January 1 2003.
The application of the new recommendations has not given rise to any
adjustment of previously reported periods.

The parent company
The parent company's earnings after financial items amounted to SEK 2
million (89), its gross investments to SEK 0 million (0) and its liquid
funds to SEK 1 million (0) as against SEK 176 million at the beginning
of the year.

Market prospects
There is still uncertainty about the market trend and no sign at present
indicating imminent improvement. For Cardo's part, the uncertainty means
continued focus on cost adjustment and improvements in efficiency.

Malmö, Sweden, May 6 2003

Cardo AB (publ)

Kjell Svensson
President and CEO

This report has not been subjected to special examination by the
Company's auditors.

Cardo's interim report for January-June will be published on August 12
2003.

Enclosures:
1. Invoiced sales, earnings and operating margin by
business area
2. Consolidated income statement and balance sheet in brief
3. Consolidated cash flow statement in brief
4. Income statement and cash flow broken down by current
operations and operation disposed of
5. Group financial summary

For further information, please contact:
Kjell Svensson, President and CEO, phone +46 40 35 04 53,
+46 40 35 04 00
Göran Axeheim, Executive Vice President and CFO, phone +46 40 35 04 42,
+46 40 35 04 00
Christer Roskvist, Head of Public Relations, phone +46 40 35 04 25,
+46 40 35 04 00

Cardo is an international engineering group and a leading supplier of
high-quality products and systems with a good aftermarket. Cardo holds
strong positions in the markets for doors and pumps. Cardo has
subsidiaries in about 30 countries with the focal point resting in
western Europe.